R v Hamid [2002] VSCA 9

2 In 1997 the appellant had a problem. He conducted a business of trading in second-hand records and compact discs in rented premises. The appellant needed money for gambling, but the business, his only asset, was of little or no value. The appellant's uncle had worked in the business and was interested in acquiring it. Unfortunately he had no money.

3 The appellant met a finance broker named Grujin who helped the appellant to devise a scheme to solve his problem by defrauding the National Australia Bank ("the Bank"). In May 1997, using a false name, the uncle applied to the Bank for a loan of $150,000 in order to purchase the business from the appellant, who also used a false name. The offenders supplied documents to the Bank which stated that the purchase price of the business was $250,000, that a deposit of $100,000 had been paid, and that the purchaser had assets of $150,500 and liabilities of $34,000. In fact no deposit was paid. The documents also stated that the business had generated a profit of $245,062 in a period of 18 months. That statement was false. Induced partly by the false documents, the Bank advanced the sum of $150,000. Apart from small sums paid to a solicitor for costs and to the landlord for arrears of rent, the proceeds of the loan were divided between the appellant and the finance broker in the approximate proportions of two-thirds to the appellant and one-third to the broker.

4 About a month after the loan was made the Bank discovered that the premises from which the business was conducted had been vacated. Later a Bank officer found the appellant and his uncle conducting a new business in a music shop in Reservoir. The Bank has not been able to recover any part of the money it advanced.

5 On 8 March 2001 the appellant and his co-offender were arraigned in the County Court and pleaded guilty to a count of obtaining property by deception. After a plea, the appellant was sentenced to be imprisoned for a period of three years, and a period of 18 months was fixed before the appellant was to be eligible for parole. The appellant's uncle was sentenced to a term of 15 months' imprisonment which was wholly suspended.

6 The appellant is 48 years old. He has seven prior convictions from four court appearances, including convictions for offences of dishonesty: handling stolen goods, being in possession of stolen goods, failing to make an entry in a second-hand dealer's book and making a false entry in a log book. The appellant was born in Lebanon and came to Australia with his family when he was nine years old. At the age of 13 years the appellant left school and went to work at the Bradmill factory as a machinist. The appellant later worked as a salesman for four years, and then was seriously injured in a motor car accident. With the compensation he received from the accident the appellant purchased a milk bar business which he subsequently sold to his sister. He fell out with his sister in the course of a general division between the members of the family when the appellant's father was charged with sexual offences involving his sister's children. Although the father was acquitted of the charges, the family remained divided. As a result of falling out with his sister the appellant did not receive the full price for which he sold the milk bar business. The appellant then developed a music exchange business, which was successful. In 1994 he was persuaded to move his business to Sydney, where the business failed after the stock was stolen. The appellant returned to Melbourne and in 1996 commenced the business which he sold to his uncle. The appellant has not worked since 1997 and is in receipt of sickness benefits. In recent years he has suffered from addictions to gambling and to alcohol.

7 Amongst the grounds of appeal the appellant complains that the sentencing judge erred in acting upon the basis that the maximum penalty for the offence of obtaining property by deception was 15 years' imprisonment. The mistake was caused by a statement by the prosecutor during the course of the plea. At the outset of his sentencing remarks the judge said:

"This offence, as a maximum penalty, attracts a sentence of 15 years' imprisonment, that is as a maximum. No doubt that reflects upon your mind how serious the offence is with which you have been charged."

In my opinion in those circumstances it cannot be said that his Honour's error was immaterial to the sentencing process. The sentence was a substantial fraction of the maximum, the distinction between the maximum in fact and what the judge perceived it to be was significant and it appears that his Honour was "steering by the maximum" when he took the maximum as the starting point for the reasoning which produced the sentence. In my view the error was material[1].

8 Accordingly I am of the opinion that the sentence was vitiated by a specific error, and the appellant is to be re-sentenced by this Court.

9 A matter which bears upon the question of an appropriate sentence is the psychiatric and psychological history of the appellant. In the course of the plea the sentencing judge was provided with reports by Mr Healy, a clinical psychologist, and the general practitioner who had treated the appellant since 1994. According to the reports, in the 1990s the appellant engaged in gambling to the extent that he developed an addiction to it and for some five years until about 1997 he abused alcohol. Both his treating doctor and the psychologist expressed the opinion that the appellant suffered from chronic anxiety and depression, which required ongoing support and medication. The psychologist described the appellant as suffering from "a major depressive illness". It appears that in 1995 the appellant was admitted to Royal Park psychiatric hospital suffering depression and threatening suicide. The psychologist went so far as to say that:

"A term of imprisonment for a person with his mental state, having suffered a chronic major depressive illness for a number of years, would be quite disastrous. He has been (and indeed remains) a distinct suicidal risk."

It would appear that the appellant's mental state, combined with his business failure, played a part in the appellant and his wife separating in 1996 for some two years. The couple have since re-united to the extent that they live under the same roof, although separately.

10 Despite Mr Healy's view that the imposition of a prison sentence would be disastrous to the appellant, I am of the opinion that the nature of the crime is one which requires a period of incarceration. The deception of the Bank was carefully planned. It was not a spur-of-the-moment action triggered by a disturbed mental state. False documents were delivered pursuant to a coolly premeditated scheme to defraud. The sum obtained, which has been wholly lost to the Bank, was significant. The appellant's prior history of dishonesty shows that the crime cannot be considered an aberration.

11 The appellant's mental state is to be brought into account. The ways in which it may be relevant were described by Callaway, J.A. in R. v. Tsiaras[2]. Mr Healy was of the opinion that the crime was committed "in the context of mental impairment (a major depressive illness) and although he was aware of the wrongness of his conduct, he seemed unable to exercise appropriate judgment". Accordingly the appellant's mental state reduces his moral culpability to some extent and should temper the influence of the objective of general deterrence. I am of the view, however, particularly in the light of the appellant's history, that in this case personal deterrence remains worth pursuing. Finally, the suicidal tendencies of the appellant render prison a more dangerous environment for him than a person in normal mental health.

12 The sentence I would impose upon the appellant is one which has been reduced by reason of his mental condition. I have also reduced the sentence which I would otherwise have proposed to give the appellant credit for his plea of guilty. Although the appellant was in a sense caught red-handed, his plea has saved the Crown and witnesses trouble and expense. Balancing those factors against the circumstances of the crime itself, I would propose a sentence of two years' imprisonment and I would fix a minimum term of 12 months' imprisonment before the appellant is to be eligible for parole.

WINNEKE, P.: The formal order of the Court will be that the appeal is allowed. The sentence imposed below is set aside and in lieu thereof the Court imposes a sentence of two years' imprisonment and orders that the appellant serve a period of 12 months before becoming eligible for parole.

We declare that a period of 304 days has been served pursuant to that sentence and we direct that the declaration and its details be noted in the records of the Court.

I certify that this and the preceding 4 pages are a true copy of the reasons for judgment of Winneke, P., Buchanan and Vincent, JJ.A. of the Court of Appeal of the Supreme Court of Victoria delivered on 7 February 2002.

[1] Cf. R. v. Galea [2001] VSCA 115.

[2] [1991] 1 V.R. 398 at 400.