R v Jeffree [2010] QCA 47

[1]

Director of Public Prosecutions (Qld) for the respondent

[2]

[1] FRASER JA: I agree with the reasons for judgment of Daubney J and the order proposed by his Honour.

[3]

[2] DAUBNEY J: On 31 August 2009, the applicant pleaded guilty to one count of having committed fraud as an employee to the value of $5,000 or more. The amount involved was $43,686. On 8 October 2009, he was sentenced to a term of three years imprisonment, suspended after nine months with an operational period of three years.

[4]

[3] The applicant now seeks leave to appeal against that sentence, contending that it was manifestly excessive.

[5]

[4] The complainant in this matter was the owner of a supermarket. In August 2007, the applicant was employed as the fruit and vegetable department manager in that supermarket. He was responsible for the purchasing, merchandising and retailing of all fresh produce. In January 2008, he approached his employer with a business opportunity involving the purchasing of fruit and vegetables from a new local wholesaler. The applicant told his employer that this supplier would operate on a cash account. The arrangement with the supplier was to be that an order would be placed and when the produce arrived at the supermarket it would be accompanied by an invoice. The applicant was to take this invoice to the complainant's financial controller who would then give the applicant cash to enable him to pay the supplier. In fact what happened over a period of about six months was that orders would be placed with the supplier and, when goods were delivered, the supplier would hand a formal invoice to the applicant. The applicant, however, would then provide the complainant's financial controller with a handwritten document purporting to be the supplier's invoice in an amount in excess of the real invoice and, after paying the supplier, the applicant would retain the difference. In all, over a period of about six months, the complainant's financial controller gave the applicant $124,019.40 of which the applicant only paid $80,333.25 to the supplier.

[6]

[5] The applicant's fraudulent activities were uncovered in the course of a stock-take in June 2008. When the complainant uncovered the fraudulent activities, it contacted the police. The applicant made some admissions to the complainant's director when he saw police arrive at the supermarket. When interviewed by the police, the applicant admitted the fraud, and said that he had used the money to service a gambling addiction.

[7]

[6] The applicant has made no restitution of any of the money. It was accepted before the learned sentencing judge that there is no realistic prospect of the money being repaid to the complainant.

[8]

[8] At the sentencing hearing, counsel for the applicant submitted that an appropriate head sentence in this case would be in the order of three years. It was acknowledged that the applicant would have to serve time in prison, but counsel urged for the applicant's sentence to be suspended after six months. The factors relied on were:

[9]

- The lack of criminal history;

- the applicant co-operated with the authorities and pleaded guilty;

- he made admissions to his employer, voluntarily attended upon the police, and made full admissions in a police interview;

- he was the sole breadwinner for a family with three young children, aged 12, 9 and 7 months at the time;

- he was in employment up until the time of sentencing, and had a sympathetic employer, and had prospects of re-employment after release from prison;

- he suffered from a gambling habit which consumed his wages, and he took this money in order to maintain his family;

- shortly before the fraud was uncovered, he voluntarily desisted from further perpetrating the fraud;

- he had, since committing the fraud, undertaken counselling with a psychologist and had made positive steps with respect to his gambling addiction.

[10]

[9] The learned sentencing judge weighed these matters, but concluded that the applicant had committed a serious offence, being one for which there was a strong need for a deterrent element in the sentence imposed.

[11]

[10] In making that observation, the learned sentencing judge reflected concerns which have been raised in this Court a number of times in relation to offences of this nature.

[12]

[11] In R v Robinson; ex parte Attorney-General (Qld) [2004] QCA 169, McMurdo P, with whom Chesterman and Atkinson JJ agreed, said:

[13]

"The concerning aspect of offences of this kind is the breach of trust. These offences involved a considerable sum of money obtained over a 14 month period. The offending was planned and systemic. Compensation has not been made. Generally in these circumstances an offender will be required to serve a period of actual detention."

[14]

"Breaches of trust of this magnitude by an employee ordinarily demand an actual period of imprisonment be served to show the community's grave disapproval of such conduct and to deter those who might be inclined to act in a similar way."

[15]

[13] In that case, Robinson, who was employed as an insurance consultant with the Queensland Police Union, used his position to fraudulently transfer a total of $33,239 of members' funds into his own bank account. After pleading guilty, he was sentenced to six months imprisonment suspended immediately with an operational period of two years, and ordered to pay compensation of $28,928.74 within three months, in default imprisonment for six months. The Attorney-General appealed, contending that the sentence was manifestly inadequate. The fraud involved 101 transactions over a 14 month period, and was detected during an external audit. Robinson admitted that he had used the money for his gambling habit on poker machines and to buy personal everyday items. He was 49 years old at the time of sentence and 47 to 48 at the time of offending. He had no criminal history. A psychologist's report recorded that Robinson had been in a physically and emotionally abusive seven year relationship which led to him attempting suicide by a drug overdose. He was then placed on anti-depressants and began to gamble on poker machines. He descended into financial difficulty. At the time of sentence, Robinson had not made restitution, but his counsel intimated a possibility of him being able to raise funds through his superannuation and by arranging for a personal loan with his mother as guarantor. McMurdo P observed that the learned sentencing judge seemed to have placed "unusual and undesirable emphasis on this fact in framing the sentence, which encouraged the making of the restitution by sending him to gaol for six months if he defaulted". Her Honour said that, even taking into account the principles applicable when considering an

[16]

Attorney-General's appeal, the sentence imposed on Robinson was plainly manifestly inadequate. A term of two and a half years imprisonment suspended after six months with an operational period of three years was substituted for the sentence imposed below.

[17]

[14] Similar observations about the deterrence aspect of sentencing in cases such as this were made by Keane JA, with whom de Jersey CJ and Williams JA agreed, in

[18]

R v La Rosa; ex parte Attorney-General (Qld) [2006] QCA 19. Keane JA, at [24], said:

[19]

"It is clear that where an offender has abused a position of trust in order to steal a substantial amount of money over a lengthy period of time, a non-custodial sentence can only be justified in the most exceptional case."

[20]

His Honour then referred to the judgment of McMurdo P in R v Robinson, ex parte A-G (Qld). In La Rosa's case, the respondent pleaded guilty to stealing some $51,214 from her employer over a period of some 18 months. She was sentenced to three years imprisonment, which was wholly suspended for an operational period of three years, and ordered to make partial restitution by payments of $300 per month for a period of three years. The respondent had complied with that order for restitution up to the time of the hearing of the Attorney-General's appeal against sentence. The respondent had been employed as a supervisor in a plant nursery. As a result of an audit, it emerged that the respondent had been stealing from the cash register. She admitted to the director of the complainant that she had been stealing money on almost a daily basis. She made full admissions to the police and described the methods by which she concealed her theft from the cash register. The respondent was 23 years old when sentenced, with no prior criminal history. A psychologist's report revealed that she had a history of bulimia, which left her in a vulnerable psychological condition. The psychologist expressed the view that jail environment would be counter-productive for the respondent. Keane JA noted that there was no reason to doubt that the respondent's bulimia afforded the occasion for her to steal the money that she did in that the nature of her lifestyle required her to obtain large amounts of food. His Honour thought, however, that while the respondent's condition should properly have been taken into account as a mitigating factor, it should not have been taken by the sentencing judge in that case as serving to preclude the imposition of a custodial sentence. Keane JA concluded that, having regard to the respondent's "persistent and systematic abuse of trust over a long period and the amount of money stolen, a head sentence of three years is called for once an appropriate allowance is made for the lack of any prior criminal history". His Honour continued:

[21]

"[32] When one takes into account the respondent's plea of guilty and her personal circumstances, particularly her youth and her bulimia, that sentence must be moderated to some further extent. But on no view is this case so exceptional that a substantial period of actual custody can be said to be unnecessary or inappropriate having regard to the strong claims of general deterrence in relation to this kind of offence. In my view, a period of actual imprisonment of 12 months would be appropriate were it not for the circumstance that the respondent has been meeting her obligations in relation to restitution and that this is an appeal by the Attorney-General where a period of actual imprisonment of nine months was sought from the learned sentencing judge by the Crown Prosecutor at first instance. In the light of these circumstances, a period of actual imprisonment of nine months is appropriate."

[22]

[15] In R v Rees [2002] QCA 469, the applicant was, at the time of sentencing, a 49 year old woman, married, with a child who suffered from a congenital heart condition that was possibly terminal. She worked in a real estate business. Her duties included the collection of bond money. Over a period of just over three years, she embezzled some $51,063. It appeared that sometimes she replaced that money but sometimes she did not. Her offending behaviour was discovered when the complainants in that matter commissioned an audit. She made some admissions to the police. Ultimately she pleaded guilty. She was sentenced to three and a half years imprisonment suspended after 15 months for an operational period of three and a half years, and further ordered to make immediate restitution of some $23,852. After referring to the particular circumstances of the applicant in that case, including the further factor of a seriously ill husband, followed by a break up of her marriage caused in part, at least, of the charges laid against the applicant, and a psychiatric report which suggested that the offence was committed as a result of the stress she had been undergoing, McPherson JA, with whom Jerrard JA and Mullins J agreed, said that he considered that "the sentence was excessive judged by the pattern and level of sentences imposed in similar cases stretching over a considerable period". The appeal against sentence was allowed, and her sentence was varied to a head sentence of three years, to be suspended after nine months imprisonment with an operational period of three years.

[23]

[16] In R v Sheehan [2007] QCA 409, the applicant for leave to appeal had been sentenced to two and a half years imprisonment, suspended after four months, for having misappropriated some $25,000 over a four week period from his employer. He was a branch manager of FAI Insurance. As Holmes JA, with whom

[24]

Williams JA and McMurdo J agreed, said, the stealing "occurred in the turmoil surrounding the collapse of FAI's parent company and another insurer's taking over of FAI's business at the beginning of 2001". Apart from this misappropriation of some $25,000, the applicant had also pleaded guilty to four counts of fraud (two with the circumstances of aggravation) and one count of stealing simpliciter. The total amount which he had misappropriated amounted to some $41,317. By the time of sentence, restitution had been made of all the misappropriated funds, except for an amount owed to a bank, and that was held in trust ready for payment. Holmes JA regarded imposition of a head sentence of two and a half years as "unremarkable". She also said that restitution and rehabilitation were important mitigating factors, but not such as to mandate a non-custodial sentence. Her Honour did not think that the requirement in that case for the applicant to serve four months actual custody was "outside a proper exercise of sentencing discretion".

[25]

[17] In R v Lawrie [2008] QCA 97, the applicant had pleaded guilty to three counts of fraud as an employee, with a circumstance of aggravation, for which she was sentenced to three and a half years imprisonment, suspended after 12 months. The amount involved in the frauds was some $51,000, which was misappropriated over a 20 months period. The applicant was employed in an administrative position and had several modes of misappropriating money from her employer. A Lyons J, with whom Muir JA and White J agreed, reviewed some of the authorities to which I have referred, and others, and concluded that the head sentence in that case of three and a half years was not manifestly excessive, and further considered that the suspension after 12 months, which would see the applicant released before serving one third of the term, was "certainly within range".

[26]

[18] Other authorities to which we were referred are of limited assistance in the present case:

[27]

- In R v Shultz [1997] QCA 169, the offending activity was theft of a computer server from police headquarters by a cleaner. It was an opportunistic offence. The server was valued at $14,000, and was dismantled by the applicant, leading to a further charge of wilful damage to property. The sentence of two years imprisonment, suspended after six months, was not disturbed.

- In R v Bulloch [2003] QCA 578, the applicant had been convicted after trial of misappropriating $40,000 in his capacity as a security officer. In any event, the sentence of three years imprisonment was not disturbed.

- In R v Haugland [2009] QCA 46, the 21 year old applicant, who was employed as an assistant manager in a mobile phone store, stole 14 phones and falsified six mobile phone contracts over a two month period. For the stealing offence she was sentenced to four months imprisonment and two years probation. On a fraud charge, she was sentenced to two years imprisonment, suspended after four months. An application for leave to appeal against these sentences was refused. A distinguishing feature of that case from the present, however, is that Muir JA (with whom Keane JA and I agreed) noted that the "offending conduct appeared quite aberrant in nature and was not shown to be engaged in for the purposes of personal gain".

- R v Docherty [2009] QCA 379 was a completely different circumstance, in which a carer had stolen and then on-sold a piece of jewellery from the wife of a patient. She was convicted of stealing property valued in excess of $5,000 and fraud to a value in excess of $5,000. She was sentenced to three years imprisonment, with a parole dated fixed after 12 months. On appeal, that was reduced to a head sentence of two years with a parole release date fixed after six months. However, as Holmes JA (with whom Fraser JA and I agreed) observed, at [19], there were strong mitigating factors in that case, including the offender's poor health and personal circumstances at the time of the offending. It was also an opportunistic offence, rather than a systematic pattern of fraud.

[28]

[19] Counsel for the applicant conceded that the head sentence of three years in the present case was within range, and that a period of actual imprisonment was open, but that the time required to be served should be less than nine months when one has regard to the mitigating factors in this case.

[29]

[20] The present applicant was a mature man - 45 years old at the time of the offences and 46 when sentenced. He had no criminal history. His personal circumstances and the impetus for him embezzling in this way are explained above, and were referred to by the learned sentencing judge. The fact is, however, that the applicant, over a period of about six months, systematically and deliberately defrauded his employer of some $43,500, and was able to do so by taking advantage of the position of trust he enjoyed in his management position. It is also notable, as was referred to by the learned sentencing judge, that not only has there been no restitution, there is no realistic prospect of restitution. Having regard to the reaffirmed statements of the necessity for sentences for offences of this nature to be an appropriate deterrent and to the comparable cases to which I have referred, I do not think it could in any way be said that the learned sentencing judges' discretion miscarried either in respect of the head sentence or in relation to the requirement that the applicant serve nine months in custody. In short, the sentence was not manifestly excessive.

[30]

[21] The application for leave to appeal should be dismissed.

[31]

[22] P LYONS J: I have had the advantage of reading the reasons for judgment of Daubney J. I agree with his Honour's reasons, and with the order which he proposes.

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Judgment (31 paragraphs)

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