R v Fernandez [2006] VSCA 38

2 On any view, the total effective sentence and non-parole period fixed in this case were severe. That being so, one might have expected the learned sentencing judge to have said more in his sentencing remarks than he did. His Honour's reasons (which were delivered two weeks after the completion of submissions) barely exceeded three pages of transcript. There was no discussion, at all, by his Honour as to why he imposed a sentence of six years' imprisonment (out of what he was advised was the maximum of 10 years' imprisonment) on count 29, which was the heaviest individual sentence of all. The paucity of reasons invited particular scrutiny of the complaint under ground one that the sentence imposed was manifestly excessive. However, despite my initial concern in that regard, I am persuaded that the ground has not been made out.

3 The question raised by ground one is whether the sentence imposed, as to the individual sentences, the total effective sentence or the non-parole period, was outside the appropriate range, and thereby manifestly excessive. For the reasons given by Mandie, A.J.A., and notwithstanding the paucity of the sentencing judge's reasons, I am not persuaded that error has been shown. Brief as the judge's reasons were, each of the considerations that were identified as particulars in the appeal ground were addressed by the judge, overall, and appropriately valued.

4 In concluding that the limited reasons do not betray sentencing error I bear in mind that no complaint is made in the grounds of appeal concerning the sufficiency of the reasons. That no doubt reflects the fact that the explanation for the sentence on count 29 must be the very fact, highlighted by Mandie, A.J.A., that it is a rolled up count, one that represents many hundreds of individual instances of dishonest

representations amounting, in all, to a total financial advantage of more than $2 million. Thus, count 29 represents a substantially greater degree of criminality than was represented by any of the other counts. To some extent, therefore, the explanation for the sentence on that count may be regarded as self-evident. Even so, a person being sentenced, and the appeal court which reviews the sentence, ought not be required to presume that which proper reasons would make certain.

5 I agree, too, with the reasons of Mandie, A.J.A. for rejecting ground 2, and accordingly, I agree that the appeal should be dismissed.

6 On 2 February 2005 the appellant pleaded guilty in the County Court at Melbourne to a plea presentment alleging 30 "rolled-up" counts of dishonestly obtaining financial advantage by deception contrary to s.82 of the Crimes Act 1958. The maximum penalty for that offence is ten years imprisonment.

7 The appellant had one prior conviction for dishonesty, at the age of twenty, for which he received a good behaviour bond and which the sentencing Judge treated as of "no great moment".

8 On 8 August 2005 the appellant was sentenced as follows:

• on counts 1-7, 9, 12-15, 18 and 24 - two years imprisonment

• on counts 8, 10, 11, 16, 17, 19-23, 25-28 and 30 - four years imprisonment, with six months on each of counts 16, 17, 20, 21, 25, 27, 28 and 30 cumulative on the sentence on count 29

• on count 29 - six years imprisonment.

9 When the six months on each of counts 16, 17, 20, 21, 25, 27, 28 and 30 (totalling four years) was cumulated with the sentence on count 29, the total effective sentence was ten years and the Judge fixed a non-parole period of seven years. The total amount involved in the offences was approximately $10 million.

10 I note that the structure of the sentence, although not expressly explained by the Judge, essentially reflects the amounts of the financial advantages obtained by the appellant in the various periods covered by the respective counts. Thus, count 29 involved conduct over some fourteen weeks whereby the appellant obtained financial advantages totalling around $2 million. The counts which were the subject of partial cumulation involved conduct whereby the appellant obtained financial advantages totalling amounts varying from $387,000 to $799,000. The other counts in respect of which a sentence of four years was imposed involved substantial but lesser amounts and the counts in respect of which a sentence of two years was imposed each involved amounts of less than $200,000.

11 On 9 December 2005 a Judge of this Court granted the appellant leave to appeal.

12 The appellant relies on two grounds of appeal:

(1) The individual sentences, the total effective sentence and the non-parole period are manifestly excessive, particularly in view of:

(a) the appellant's pleas of guilty;

(b) his remorse;

(c) his good character (apart from a prior appearance in 1992) and contributions to the community;

(d) his employment history;

(e) his personal circumstances;

(f) his prospects of rehabilitation;

(g) the delay between offending and charge;

(h) the explanation for the offending, namely the appellant's gambling addiction;

(i) the sentences imposed in like cases.

(2) The learned judge erred in treating the offending as a breach of trust or as if it involved a breach of trust of the type where a solicitor or an accountant steals from a client.

13 The facts giving rise to the offences were as follows. The appellant was a director of TQM Legal and Accounting Pty Ltd ("TQM") which was a company providing services to the legal profession and conveyancing industry in relation to property settlements, company and other searches and the like. In or about November 1997 TQM was appointed as an "authorised person" under s.40A of the Stamps Act 1958 to act on behalf of the State Revenue Office ("SRO"). Authorised persons were entitled to endorse specified instruments as stamped under the Stamps Act, collect the stamp duty payments from the persons liable to pay stamp duty and periodically pay the amounts of stamp duty so collected, together with a periodic statement or "return", to the SRO. A return had to be in the prescribed form and show all the documents endorsed during the relevant period and the amount of stamp duty endorsed in respect of each class of documents. Each document had a unique transaction number.

14 TQM commenced lodging returns together with stamp duty remittances in December 1997. After the receipt of some information in September 2000 the SRO conducted an investigation into TQM's activities and in November 2000 obtained warrants to search TQM's office and the appellant's residence. Eventually all the documentation was assembled and it was found that TQM had endorsed documents and received stamp duty totalling in excess of $15 million, but that TQM had only declared and paid to the SRO a total of some $5 million. The total amount of stamp duty that TQM had failed to remit to the SRO was $10,168,303.60. This amount was accumulated in a multitude of transactions between 19 February 1998 and 3 November 2000.

15 Part of the method used by the appellant to deceive the SRO was the duplication of transaction numbers on documents and then including only one of each such document on the return and not disclosing the existence of each other such document. The appellant duplicated transaction numbers 955 times. Other documents were also falsified by or at the instigation of the appellant. The money so obtained by the appellant resided in the TQM Trust Account and was paid out for various purposes of the appellant. The appellant used funds for gambling at Crown Casino and by telephone betting. In excess of $2 million was withdrawn by way of 263 cheques made out to "cash". Thirty-eight cheques totalling over $3 million were made payable to "Dial-a-bet", a gambling organisation based in Vanuatu.

16 Further, the appellant purchased harness racing horses and was involved with expensive activities relating to the operation of a racing syndicate running horses at harness races. One hundred and thirty-seven cheques totalling in excess of $1 million were made out for purposes related to harness racing activities.

17 In addition, 96 cheques for an amount totalling in excess of $860,000 were used for the payment of the appellant's "Visa" credit card account and 22 cheques totalling in excess of $410,000 were paid to the appellant's cash management account. Other cheques were drawn on the TQM Trust Account for the balance of the misappropriated funds, for a variety of other purposes.

18 The appellant was born in Singapore on 24 July 1967 and came to Australia at the age of six. He was educated to HSC level at St Patrick's College Ballarat and then obtained a Bachelor of Commerce from Melbourne University and a Masters degree in Taxation at Victoria University. He married on 25 November 2001, now has three young children and is a loving father.

19 The learned sentencing Judge had before him on the plea a psychological report from Mr Bernard J Healey, consultant clinical psychologist. Mr Healey said that the appellant satisfied a number of the relevant criteria for pathological gambling. He had falsified documents to obtain the money payable to the SRO to feed his increasingly "insatiable gambling addiction" and also to "maintain an aura of success and magnanimity". Mr Healey said that the appellant had become "preoccupied with projecting an image of success, wealth and associated 'high' living, including involvement on the gambling scene (harness racing and attending the Casino) that reached pathological proportions" and in "this 'fantasy' existence he deluded himself that he wasn't hurting any particular person". The appellant now had symptoms of depression, primarily as a result of the consequences of his conduct.

20 The sentencing Judge said that the appellant's behaviour was in clear breach of a position of trust in which he had been placed and it was repeated time and time again. His conduct was premeditated and prolonged and the sum of money involved was large. The sentencing Judge referred to the nature of the offending and to the appellant's personal circumstances. His Honour said that he was not able to find remorse in its proper sense, at least not to any great degree but that the appellant had prospects of rehabilitation, was able to find and keep employment but was vulnerable to recurrence of his gambling habit. The Judge took into account the number of years that had elapsed since the appellant's offending and since he had been charged. He further took into account the appellant's guilty plea, although it was not made at the earliest opportunity.

21 It is convenient to deal first with ground 2. It was submitted on behalf of the appellant that the sentencing Judge was wrong to characterise the offending as a breach of trust because the appellant's position was not like the position of a solicitor or accountant and his client. The relationship with the SRO was a commercial relationship for the collection of State funds brought about by the privatisation of government services and the appellant's ability to persist in the behaviour resulted in part from the laxity of bank procedures. I do not agree with this submission. While accepting that there was no harm to individual clients or investors, as is found in many instances of this offence, there was nevertheless, as the Judge said, a clear breach of the position of trust in which the appellant had been placed. The appellant controlled TQM which was an "authorised person" collecting stamp duty payments for and on behalf of the SRO, and the appellant in substance misappropriated a large part of the money so received by TQM, when under a duty to remit the same to the SRO. In addition, the persons liable to pay, and paying, the stamp duty expected the amounts to be paid to the SRO by TQM. The appellant's position was quite properly referred to by the sentencing Judge as "a position of trust". In my view ground 2 fails.

22 I turn to ground 1. It was submitted on behalf of the appellant that the individual sentences, particularly the sentence on count 29, and the total effective sentence and the non-parole period were manifestly excessive. It was submitted that the sentence of six years imprisonment on count 29, although that was the most serious count in terms of value, was manifestly excessive given that the maximum period was ten years imprisonment and taking into the factors in mitigation listed under ground one, especially the plea of guilty. A comparison was made with sentences in other cases[1] to support a submission that the sentence in this matter was outside the range properly open to the sentencing Judge.

23 In my opinion, the remarks of the sentencing Judge (although brief) contain a fair description of the nature of the offending in this case and the sentences imposed properly reflect the seriousness of the offences. I do not find the reference to sentences in other cases, all with their own features, to be of great assistance. In any event I am not able to find, when looking at those cases, anything that persuades me that the sentences in this case are relevantly inconsistent with the sentences in those cases, given the nature of the rolled-up counts in this case. The sentences here imposed are justified by considerations of specific and general deterrence, denunciation and punishment, after taking into account and giving full weight to the mitigating factors identified in the appellant's ground 1. The seriousness of the offences, having regard to their nature including the dishonesty involved and the public funds lost, are not lessened by characterising the offences, as counsel for the appellant sought to do, as "the deferral of debt". In my opinion, the individual sentences including in particular the sentence on count 29 are not manifestly excessive. I am further of the view that the total effective sentence and non-parole period were within the range open to the Judge and not manifestly excessive. The sentence as a whole, while stern, was to my mind just and appropriate and justified by the seriousness of the offences.

24 The Court heard submissions dealing with the applicability of the provisions of Part 2B of the Sentencing Act 1991 and as to whether the appellant should have been sentenced as a continuing criminal enterprise offender. Having regard to the conclusions I have reached it is unnecessary for me to deal with those submissions.

25 For those reasons I would dismiss the appeal.

I certify that this and the preceding 97 pages are a true copy of the reasons for judgment of Chernov and Eames, JJ.A. and Mandie, A.J.A. respectively of the Court of Appeal of the Supreme Court of Victoria delivered on 3 March 2006.

DATED the day of 2006.

[1] R v. De Stefano [2003] VSC 68; R v. Coukoulis [2003] VSCA 22; (2003) 7 VR 45; R v. Shannon [2005] VSCA 143 - reference was also made to DPP v. Bulfin [1998] 4 VR 114, R v. Jenkins [2002] VSCA 224; (2002) 6 VR 81, R v. Reid [1999] VSCA 98; [1999] 2 VR 605.