R v Kinnear & Thomas [2009] VSCA 104

2 To establish error, the appellant relied upon two grounds which complained that the sentencing judge had, on a number of counts, sentenced the appellant on the basis of a misunderstanding as to the maximum penalty referable to the offences comprising those counts.

3 By ground one it was submitted that the appellant was wrongly sentenced on the basis that counts 16-20 inclusive were capable of qualifying as continuing criminal enterprise (CCE) offences under the Sentencing Act 1991 ('the Act'). The sentencing judge considered ss 6H and 6(I) of the Act to operate so as to subject those counts to a 'maximum term of imprisonment twice the length of the maximum term prescribed' by Parliament.

4 Similarly, ground 2 alleged that on counts 4 and 16 (attempting obtain a financial advantage by deception), the sentencing judge also sentenced by reference to the incorrect maximum, that being a period of 10 years imprisonment instead of the 5 years imprisonment prescribed by the Crimes Act.[1]

5 Sentencing on the basis of an incorrect maximum is a significant error and in the present case it cannot be said that it could not have materially effected the sentencing discretion.[2] The consequence of the error was that the sentencing judge was liable to consider the appropriate sentence, by measure of an inaccurate yardstick. It was conceded by the Crown that the learned sentencing judge had been led into error as he was incorrectly informed by the prosecutor that these were CCE offences. The respondent accepted that these errors required the re-opening of the sentencing discretion.

6 In light of that concession it is not necessary to consider the other grounds relied upon by the appellant.

7 It is convenient to set out the periods during which particular offending occurred, the sentences imposed and the dates of the appellant's contact with investigative and enforcement authorities during the course of that offending.

Count 1 - make false document [3]- 12 months imprisonment (2 months cumulative)

Count 2 - obtaining financial advantage by deception - 12 months imprisonment (2 months cumulative)[4]

Count 3 - obtaining financial advantage by deception - 12 months imprisonment (2 months cumulative)

Count 4 - attempting to obtain financial advantage by deception[5] - 18 months imprisonment (no order of cumulation)

1. Counts 5 -13 inclusive and 15 which relate to offences committed against an elderly husband and wife which commenced in October 2001 and ceased in January 2003.

Count 5 - obtaining property by deception[6] - 24 months imprisonment ( 9 months cumulative)

Count 6 - obtaining property by deception - 30 months imprisonment (9 months cumulative)

Count 7 - obtaining property by deception - 24 months imprisonment (9 months cumulative)

Count 8 - obtaining property by deception - 6 months imprisonment (4 months cumulative)

Count 9 - obtaining property by deception - 24 months imprisonment ( 9 months cumulative)

Count 10 - obtaining property by deception 20 months imprisonment (4 months cumulative)

Count 11 - obtaining property by deception 24 months imprisonment (9 months cumulative)

3. On 23 May 2002 the appellant was arrested and interviewed in relation to some of this conduct. He denied any wrongdoing. He was not charged with any offence

Count 12 - obtaining property by deception - 20 months imprisonment (4 months cumulative)

Count 13 - obtaining property by deception - 24 months imprisonment (6 months cumulative)

Count 14 - obtaining financial advantage by deception - 6 months imprisonment (1 month cumulative)

Count 15 - obtaining property by deception - 24 months imprisonment (6 months cumulative)

1. In March 2003 the appellant was convicted of 8 different offences of a like nature committed in Queensland. Those convictions were prior convictions for the purpose of the following subsequent offending.

Count 16 - attempting to obtain a financial advantage by deception - 24 months imprisonment (1 months cumulative)

Count 17 - obtaining financial advantage by deception - 16 months imprisonment (2 months cumulative)

Count 18 - obtaining property by deception - 2 months imprisonment (2 months cumulative)

1. The appellant was arrested and interviewed on 25 January 2005 with respect to offences committed prior to this date. He was charged and was released on bail.

Count 19 - use false document [7]- 24 months imprisonment (3 months cumulative)

Count 20 - theft[8] - 24 months imprisonment (6 months cumulative)

Count 21 - obtaining financial advantage by deception - 4 years imprisonment (Base sentence)

1. Following the last of these offences the appellant was arrested and interviewed.

8 It is unnecessary to repeat in detail the offences set out in the remarks of the learned sentencing remarks. The facts are not disputed. Almost all of the offences arose in the context of the appellant's activity as a financial consultant.

9 Counts 1-4 inclusive disclose a similar modus operandi. For example, on count 1, the appellant, having held himself out as able to obtain loans from financial institutions, falsely stated in a number of documents that the applicant, who was seeking a loan from the Australian and New Zealand Bank, had been employed by him on a particular salary. The applicant obtained the loan which was secured by a mortgage. Ultimately the property was sold and the bank recovered its money.

10 Counts 5-13 inclusive and 15 are perhaps the most serious of the offending committed by the appellant and involve a couple named Mr and Mrs Wines. They were an elderly couple, whose life savings were invested in property. He acted as their financial broker. As a result of his fraudulent conduct, they lost $961,289 and were left in financial ruin. The consequences for them are poignantly spelt out in the victim impact statement of their son, Dr Ross Wines. He described how his mother was forced to spend her final days in very basic accommodation, as she no longer had the financial ability to maintain the more comfortable lifestyle to which she had been accustomed.

11 Other smaller frauds were also revealed. Count 16 involved an attempt to obtain money by providing false details of employment and income in support of a loan. Count 17 involved the provision of false details in support of a BMW car loan. Count 18 involved the appellant obtaining a business machine by use of a cheque from an account that had been opened for that reason, when the appellant knew there were insufficient funds for the transaction.

12 Counts 19, 20 and 21 all disclose a similar modus operandi. Essentially, the appellant used the name of one 'David Stray' and produced false documents including a birth certificate, licence and a Medicare card to support that deception. The appellant, with the assistance of others, then obtained a certificate of title relating to a property owned by a Mr Stray, and used it to obtain a loan in the sum of $481,728. Various methods were then used to funnel those moneys to the appellant. As described above, the offences comprising these counts were committed whilst the appellant was on bail.

13 The appellant was between 50 and 57 years of age at the time of the offences and was 58 years of age at the time of sentencing. He had 8 prior offences from one prior court appearance in 2003 and as I have already said, in sentencing the appellant on counts 16-21, these are relevant convictions, involving crimes of deception. They involved five offences of opening accounts in a false names, one offence of attempting to do so and one offence of improperly using a passport. He was ordered to pay a fine of $1200 and in default, to serve a sentence of imprisonment for one month.

14 The appellant's parents separated when he was aged 11. Both are now deceased. The appellant has one brother and sister, but has had little contact with those siblings for some time. The appellant is married to his second wife and has a son aged 35 from his first marriage.

15 The appellant left school at the age of 15 or 16. Shortly after, he joined the Commonwealth Bank where he worked until the age of about 40. After resigning from the bank, the appellant worked in the insurance industry and workers compensation industry. The appellant then formed a home broking business, that operated for 3 years and employed 25 members of staff. Following the break up of that business in 1999, the appellant continued to work in the financial industry as a broker and financial consultant.

16 In sentencing the appellant, the sentencing judge had the benefit of two reports prepared by a psychologist, Mr Jeffrey Cummins. The first report was prepared after Mr Cummins had seen the appellant on a number of occasions in 2003, in preparation for his first court appearance. The second, was prepared in support of the plea, in relation to the present offences, on the basis of further consultations in 2007.

17 On the appeal, Mr Cummins gave oral evidence in amplification of a third report based upon further consultation with the appellant in Port Phillip Prison in 2009. It was Mr Cummins' opinion that the appellant was suffering from a major depressive illness which was a component of a cyclothymic mood disorder, causing a fluctuation in moods between hypomania and depression. Mr Cummins was now satisfied that this was a condition that the appellant suffered from throughout the period of his offending. It was his opinion that this condition contributed to his offending as it affected his judgment and diminished his capacity to resist offending. Mr Cummins stated that the appellant had a limited insight into his medical condition and until recently had been resistant to medical treatment for his condition. He also stated that this condition would make his time in prison more burdensome.

18 Under cross examination Mr Cummins conceded that the appellant was quite aware that what he was doing was wrong. He accepted that the appellant was motivated by greed in offending but maintained that the appellant's mental condition was a more important consideration explaining his offending. Counsel for the Director did not challenge the fact that he suffered from the disorder alleged, that his cyclothymic mood disorder relevantly affected his mental capacity at the time of the offences, or that it had the effect of impairing his ability to exercise appropriate judgment.[9] But it was the respondent's contention that having regard to the nature and duration of his offending, his mental condition should not be viewed as a particularly significant mitigating factor.

19 Counsel for the appellant submitted that the appellant's mental condition should be treated in accordance with the principles set out in R v Verdins[10] so as to reduce his moral culpability and to moderate general and specific deterrence. As must always be the case when Verdins principles apply, some assessment of the severity and effect of the condition must be undertaken and the manner in which it contributed to the offending must be evaluated. In the present case, it is necessary to take account of the fact that the appellant knew that he had become depressed after his business failed in 1999 and that he had been advised by Mr Cummins in 2003 that he had suffered from a depressive illness which contributed to his offending conduct. In addition, he had remained resistant to receiving any treatment for that condition. Although allowance must be made for his poor insight into his condition, his knowledge of his condition and its effects and his unwillingness to address it is relevant to his continued offending after 2003 and must reduce the mitigatory effect of his condition in relation to those later offences.[11]

20 After some discussion it was accepted by the parties that the counts comprising 2, 3, 4, 9-13, 15 and 21 were CCE offences and consequentially subject to a doubling of the relevant maximum penalty. The offences comprising counts 19-21, having been committed whilst on bail, are also subject to s 16(3C) of the Sentencing Act. It provides that where a sentence is to be imposed on a person who has committed those offences whist on bail for other offences, any sentence imposed must be served cumulatively unless the court orders otherwise. The sentencing judge did not make any specific reference to this consideration in making orders for cumulation on these offences.

21 In his reasons for sentence, the sentencing judge said that he had taken into account a statement made by the appellant in respect of his criminal complicity with others in respect of Counts 19-21 and his willingness to give evidence against others who were said to be involved. In doing so, his Honour also referred to the Crown view that by reasons of the appellant's credibility, this information was of very limited value and provided an insufficient basis for any prosecution. His Honour further referred to the matter of delay, taking into account the time the appellant has spent in custody prior to the hearing of the plea. As at the date of the plea 385 days of pre-sentence detention were assessed. Against this, it was observed by the Crown that the reasons for the delay were primarily matters within the control of the appellant. The sentencing judge was right to attribute little weight in the circumstances to those matters.

22 On the plea, an issue of 'parity' was said to arise. A co-offender, Grant Elliot, had already been sentenced on three identical counts. He came before the learned sentencing judge, on 11 counts (9 counts of obtaining financial advantage by deception and 2 counts attempting to obtain financial advantage by deception). Some of those counts disclosed complicity in the offences that were the subject of counts 2, 3, and 4 in the present matter. The learned sentencing judge observed that Elliot's 'total financial stealings' in relation to other offences amounted to $626,813. Elliot had also appeared before Judge Gullaci on 3 counts of theft (electricity), making a false document, two counts of obtaining property by deception, trafficking in cannabis and being a prohibited person in possession of a firearm and had been sentenced 7 years 6 months, with a minimum of 5 years six months. The sentencing judge had then sentenced him to 7 years and ten months, and ordered that 3 years be cumulative on the sentence of Judge Gullaci making a total effective sentence of 10 years 9 months with a non parole period of 7 years and 6 months. It is difficult to discern whether the sentences passed upon Elliot had any influence on the sentences imposed on the appellant. Both parties on the appeal acknowledged that the circumstances of the appellant and Elliot were quite different so that parity was of no relevance in re-sentencing.

23 Counsel for the appellant recognised that because of the large amounts of money involved, the duration of the offending conduct, the sophistication of the deceptions and their effect on the victims a substantial term of imprisonment was required. But he urged the Court to re-sentence the appellant on the basis that the total effective sentence imposed by the sentencing judge was inconsistent with other cases involving the appropriation of large amounts of money by theft and deception and was well beyond the range of sentences available. To support this contention, Counsel referred the court to a series of cases, some said to be comparable and others not, which would provide some guidance as to the appropriate range of sentences available in the present case.[12] Bearing in mind that the outcome in other cases will be of limited utility, consideration of those cases discloses sentences varying from 4 ½ to 11 years, with variations produced by a range of factors including the length of the period of offending, whether the bulk of the relevant offences were CCE offences, the amount stolen, the level of remorse and any other mitigating factors such as mental illness.

24 In response, the respondent contended that the sentence passed was within the reasonable exercise of the sentencing discretion. That submission cannot be sustained. No cases were cited that would indicate that it was open to the sentencing judge to fix such a sentence. Based upon an instinctive synthesis of the relevant factors and having regard to other cases, it is my view that the sentence imposed was significantly outside the range of sentences available. There are a number of mitigating factors which must be given significant weight. The appellant's psychological condition and his willingness to undergo treatment for his condition requires some moderation of the sentences that would otherwise be imposed.[13] I also have regard to the fact that his imprisonment will be more burdensome and that he has encouraging prospects for rehabilitation. None of this is to say that the offences committed by the appellant were not of the most serious that required strong denunciation through the imposition of a substantial sentence. As I said in DPP v Adams:[14]

The importance of general deterrence in the imposition of sentences for white collar crimes was discussed by Charles, J.A. in Bulfin v. D.P.P. It was noted that offenders typically involved in white collar crimes usually had no prior criminal history. It was that fact which often made the commission of the crime possible for such crimes were frequently committed by persons in a position of trust which they would not have been able to attain had they possessed a criminal record. Charles, J.A., with whom the President and Callaway, J.A. agreed went on to state:

'Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money, and, frequently, losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. Detection is difficult, the investigation of the crime usually lengthy and very expensive, and the problems of trial and proof will frequently be extreme. ... The result of such considerations in my view, is that the element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period, together with a requirement for strong denunciation by the sentencing court.[15]

25 These comments are apposite. The frauds committed by the appellant were carefully and cleverly conducted over a sustained period of time and involved large sums obtained from numerous victims. The harm and suffering to the victims, particularly to the Wines, has been severe. The offending was driven by greed. The offending continued, despite convictions on similar charges and the commencement of a police investigation.

26 Because of the large number of counts it is, as the sentencing judge found, necessary to moderate the individual sentences. I would however substantially alter the orders for cumulation pronounced by the sentencing judge in order to comply with the principle of totality and to avoid a crushing sentence.[16]

Count 1 Make false document 6 months' imprisonment

Count 2 Obtaining financial advantage by deception 18 months' imprisonment

Count 3 Obtaining financial advantage by deception 18 months' imprisonment

Count 4 Attempting to obtain financial advantage by deception 12 months' imprisonment (no order of cumulation)

Count 5 Obtaining property by deception 24 months' imprisonment

Count 6 Obtaining property by deception 30 months' imprisonment

Count 7 Obtaining property by deception 24 months' imprisonment

Count 8 Obtaining property by deception 6 months' imprisonment

Count 9 Obtaining property by deception 30 months' imprisonment

Count 10 Obtaining property by deception 24 months' imprisonment

Count 11 Obtaining property by deception 30 months' imprisonment

Count 12 Obtaining property by deception 24 months' imprisonment

Count 13 Obtaining property by deception 30 months' imprisonment

Count 14 Obtaining financial advantage by deception 6 months' imprisonment

Count 15 Obtaining property by deception 30 months' imprisonment

Count 16 Attempting to obtain a financial advantage by deception 24 months' imprisonment

Count 17 Obtaining financial advantage by deception 16 months' imprisonment

Count 18 Obtaining property by deception 2 months' imprisonment

Count 19 Use false document 24 months' imprisonment

Count 20 Theft 24 months' imprisonment

Count 21 Obtaining financial advantage by deception 3 years' imprisonment (Base sentence)

I would order that two months of counts one, two and three, six months of counts five, six and seven, three months of count eight, six months of count nine, three months of count ten, six months on count eleven, three months on count twelve, thirteen and fifteen, two months on count sixteen, seventeen and nineteen and three months on count 20 be served cumulatively on count 21, making a total effective sentence of eight years. I would order that the appellant serve a minimum period of four years and nine months before he is eligible for parole.

28 I have had the advantage of reading in draft the reasons for judgment of Redlich JA. I agree with the disposition proposed by his Honour for the reasons he gives.

[1] ss 82(1) and 321(1)(a).

[2] R v Beary [2004] VSCA 229; (2004) 11 VR 151, [21], R v Orbach [2007] VSCA 166, [2].

[3] s 83A(1) Crimes Act 1958 - maximum 10 years' imprisonment.

[4] s 82 of the Crimes Act (Vic) - maximum penalty 10 years' imprisonment.

[5] s 321M of the Crimes Act - maximum 5 years' imprisonment.

[6] s 81 of the Crime Act - maximum 10 years' imprisonment.

[7] s 83A(2) of the Crimes Act - maximum 10 years' imprisonment.

[8] s 74 of the Crimes Act - maximum 10 years' imprisonment.

[9] R v Howell [2007] VSCA 119; (2007) 16 VR 349, [20].

[10] [2007] VSCA 102; (2007) 16 VR 269.

[11] See for example DPP v Arvanitidis [2008] VSCA 189, [33]-[34].

[12] R v Flavall [2006] VSCA 32; R v Senese [2004] VSCA 136; R v Rousetty [2008] VSCA 259; R v Arundell [2003] VSCA 69; R v Fernandez [2006] VSCA 38; R v Coukoulis [2003] VSCA 22; (2003) 7 VR 45, R v Nagul [2007] VSCA 8; R v Wang [2009] VSCA 67.

[13] R v Verdins [2007] VSCA 102; (2007) 16 VR 269, [17]; R v Yaldiz [1998] 2 VR 376, 381.

[14] [2006] VSCA 149.

[16] R v Rousetty [2008] VSCA 259, [50] (Nettle JA); DPP v Grabovac [1998] 1 VR 664, 677-680.