Applicant's relevant evidence at trial
25 The thrust of the applicant's evidence at the trial was to the following effect. He said that he worked very closely with Hammond and, because he worked hard, he effectively became part of his "inner circle" with the result that Hammond "looked after him" in terms of financial benefits. The applicant claimed, as was also evident from other material, that Hammond was a dynamic managing director who had built Spicers to the position that it then enjoyed. The applicant essentially said that Hammond was a person who used a "broadbrush" approach to matters such as the provision of financial incentives to executives he regarded as outstanding. Hammond resented, said the applicant, the constraints that the company's remuneration committee sought to impose in relation to matters such as the applicant's remuneration package. He claimed that Hammond wanted to ensure that the applicant remained with the company and consequently was prepared to see that he was adequately remunerated. In order to achieve that, the applicant effectively said, Hammond was prepared to "bend the rules".
26 It was in that context, said the applicant, that Hammond authorised his drawings on the company's US currency account. According to the applicant, Hammond told him that those moneys would have been paid to him if Hammond's hands were "not tied" (by the company's remuneration committee). The applicant said that the moneys were essentially advances against the payment of future bonuses and salary increases that had not yet been processed and were an incentive for him to remain with the company. He claimed that the real reason for the payments was kept between himself and Hammond and that he was under instructions not to tell anyone else about it. As to the Anthonisz cheque, it was the applicant's case that the misallocation of it as described was the result of Marshall's misunderstanding of his instructions. He had handed her the cheque, he said, and she mistakenly credited it against his drawings on the US currency account. The applicant said it was when he was preparing the monthly reports in early September 1997 that he noticed that his "housing" loan, and not that of Anthonisz, had the benefit of the cheque. He communicated this to Hammond who told him to leave things as they were until otherwise advised. The applicant also said that all the drawings against his advance account were made with the knowledge of Hammond who kept a very close eye on the account.
27 The applicant claimed that in 1991 his late father informed him that there was a discretionary family trust in the United States of which his father was a beneficiary, that he expected to receive money from the trust and that he would pass it on to the applicant. Thus, the applicant said he had a real expectation of receiving those funds although in about 1993 or 1994 he concluded that the money would not be forthcoming.
28 In relation to the Mercer cheque, $37,215 of which was effectively deposited by him into the Hammond account such as to show that it was paid in by William Abbott, thereby creating the impression that it was in payment of the outstanding balance of the Hammond account, the applicant claimed that the reference on the deposit voucher to William Abbott was an error on his part. He said he did not realise his mistake in that regard until it was pointed out to him by Morris and Tompkins at the meeting of 14 March 2001 when he could no longer do anything about it.
29 In respect of the dishonoured cheques drawn in 2000 and 2001, ostensibly for the purposes of repaying the housing loan, the applicant's case seems to have been that the real purpose of those payments was to maintain an appearance for "external consumption" that the debt was paid but that all relevant people within the office were aware of the "bouncing cheques". He claimed that after the death of Hammond he made Waterworth aware of the situation.
30 In the event, as has been noted, the applicant was found guilty of the 25 counts and was sentenced to six years' imprisonment with a non parole period of four years.
Application for leave to appeal
31 When the applications for leave to appeal against conviction and sentence were called on for hearing, Mr Croucher of the applicant sought, properly and responsibly, in my view, leave to discontinue the appeal against conviction and, there being no objection from the Crown, leave was granted. Mr Hillman for the Crown conceded, also sensibly, I think, that in sentencing the applicant his Honour did so on the erroneous basis that the financial benefit obtained by him from the offending was in the order of $724,000 whereas, on the judge's own methodology of quantifying the benefit, the amount was only in the order of $480,000. Counsel conceded that this error reopened the sentencing discretion. As a consequence, the matter proceeded essentially as a plea in mitigation of sentence. It is now a matter for this Court to form its own view as to the appropriate sentences to be imposed in this case.[7] The task of this Court is to fix, in relation to each count, a sentence that justly reflects the seriousness of the offence and the offending conduct in light of the applicable sentencing principles and the personal and other mitigating factors referrable to the offender.
32 In support of the plea in mitigation, Mr Croucher highlighted the mitigating factors that were put to the learned sentencing judge, including the applicant's loss of career, particularly at the age of 53, his previous good character, the impressive evidence given as to his qualities as a devoted family man and his work history, the delay in the matter coming for trial, the assistance he gave to the company's investigators and his restitution of $178,000 to the company. An important matter on which counsel also relied was the hardship that the applicant's family was suffering by reason of his imprisonment which, it was said, materially added to his burden of serving the sentence. Before dealing with this submission it is convenient to dispose of two other arguments on which counsel relied in support of the claim for mitigation.
33 One argument was that, given the applicant's dismissal from the company, he had forgone termination entitlements in the order of $500,000 and this, it was said, was a mitigating factor that was to be taken into account in the sentencing disposition. It would seem that this amount was based on the advice that the applicant had received from his solicitors as to the sum that he could expect to receive if his employment contract with Spicers had been prematurely terminated by the company. But as the learned President pointed out in argument, given the applicant's fraudulent conduct, the company was entitled to dismiss him summarily, so that he would have no right to compensation on the basis of having improperly lost the benefit of the remainder of the contract. Counsel nevertheless submitted that in the circumstances the applicant lost long service leave entitlements that had accrued prior to his sacking, and that this formed the bulk of the $500,000 referred to earlier. It seems to me, however, that given that no material was placed before the Court on this issue it is not possible to assess in quantitative terms the applicant's loss in that regard. In the circumstances the only course that could be fairly adopted in relation to this claim that is most favourable to the applicant is to assume for sentencing purposes that he had forgone, by reason by his forced departure from Spicers, an amount in lieu of long service leave that is not insubstantial.
34 The second argument was based on the applicant's admission of the substantive transactions. It was said that this shortened the proceeding "considerably" and, in the circumstances, amounted to a material matter of mitigation. In my view, however, there is no merit in this claim. The transactions were established by the Crown, essentially through documents that were tendered in evidence, and it is difficult to see how they could have been contradicted by the applicant. In the circumstances, to have attempted to do so would have been not only futile but an exercise in bad advocacy. At one point, as I understand Mr Croucher, it was said that, in any event, given the applicant's admissions the Crown case could have been shortened and because this was not done the applicant was put through the ordeal of a longer trial than would otherwise have been the case. It was claimed that this was yet another factor that should be taken into account as mitigation. In my view, however, it may be that the Crown case could have been shortened by resort to a notice to admit, but I cannot accept that any relevant fault lies in the Crown's thorough conduct of the trial such as to constitute it a mitigating factor for sentencing purposes. It seems to me that it was the applicant's denial that he was dishonest in procuring the transactions and his contradiction of many of his admissions that he had made to the company's officers that took up a significant period of the trial. Obviously enough, such conduct of the applicant's case at trial is not a matter that is to be weighed against him for sentencing purposes.
35 I now come back to counsel's submission based on the claim of hardship to which I have referred. In support of this claim the applicant filed, as he was entitled to do, affidavits sworn severally late last year and this month, by the applicant, his 17 year old son, his wife, his mother-in-law and his solicitor, who exhibited a letter of 19 December 2006 from a surgeon, Mr Michael Fink, as to the state of health of the applicant's wife. Counsel also tendered a report dated 17 December 2006 from Suzanne Thompson, a Catholic chaplain at the prison.
36 More particularly, the material shows that the applicant's son is a very good student and is about to commence Year 12 which it may be accepted is the, or one of the, most difficult periods for any young student. It is apparent from his affidavit that, unsurprisingly, he relied to considerable extent on the help and guidance from his father in his studies, and in life generally, and that the applicant had given him practical support throughout his young years, as well as to the household. Such assistance and friendship will not be available to him during the forthcoming year when he would have particularly relied on it. The material also makes plain that late last year the applicant's wife was diagnosed as suffering from cancer of the gall bladder and bile ducts. The operation that was performed on 5 December 2006 resulted in a good early recovery. Mr Fink expects that she will soon commence chemotherapy in addition to other treatment in relation to her problems. He said that, although it is difficult to be certain about Mrs Nagul's prognosis, her five year survival expectation is in the order of 30 to 40 per cent. Mr Fink also said that it is important that Mrs Nagul have the maximum family and social support over the period of her recovery from her operation and chemotherapy, which will probably be in the order of six months.
37 Needless to say this illness has added considerably to the stress and difficulty that Mrs Nagul and the applicant's son face in coming to terms with his imprisonment. The son says that this causes him constant depressive feelings and emotional pain. Obviously enough, from an economic, social and emotional point of view for the Nagul family, the applicant's absence is causing great difficulties for its members. Included in the concerns is the fear of losing the family home. It may also be accepted that these circumstances imposed yet another moral burden on the applicant. The report of Ms Thompson makes it apparent that she had regular contact with the applicant over several months while he has been in prison. She is generally aware of the family's situation that I have described and confirms the applicant's love for his family and the concern and pain that he feels for them. Ms Thompson makes the point that the applicant's family is a small, close and rather private unit without a large support base.
38 Mr Croucher urged the Court to take this material into account in the sentencing disposition, not so much because it amounted to "exceptional circumstances" that might warrant its consideration in the ordinary way, but rather in the exercise of mercy, a discretion that was always open to be exercised in the appropriate case. Counsel submitted that the material warrants the Court exercising mercy in respect of the head sentence and the non-parole period.
39 Mr Hillman, on the other hand, submitted that the offending here was undertaken in aggravating circumstances, such that the hardship relied on by the applicant should not affect the head sentence or the non-parole period as imposed by the sentencing judge, but, if it were to be taken into account in an exercise of this Court's discretion to extend mercy, it should only go to the question of the length of the non-parole period.
40 It is plain enough I think that the offences of obtaining a financial advantage by deception and theft are serious offences, as is made plain by the maximum custodial sentence of ten years that has been prescribed in relation to them by Parliament. As the learned sentencing judge noted, the maximum sentence in relation to the offence of obtaining a financial advantage by deception was doubled in 1992. In most instances this offence produces a flow-on effect on the community that is significantly detrimental. It calls, for example, for expenditure of considerable funds on systems and methods aimed at preventing fraud, increases the cost of insurance premiums and the like and, in many instances, it compels the undertaking of costly and time consuming investigations into the fraud. Moreover, it is very often very difficult to detect.
41 That the offending here was of a most serious kind also cannot be doubted, I think. It involved, amongst other aggravating circumstances, a gross breach of the trust that the applicant had enjoyed as a very senior officer of the company. It also involved, over a period of over seven years, a considerable amount of planning and exploitation by him of his knowledge of the financial system and records of his company to facilitate the perpetration and the disguising of his fraud. He effectively stole not only from the company but also from a fellow employee and he lied and otherwise deceived the company's representatives. When the offending was discovered the applicant continued to lie to the company's officers about the transactions, insisting falsely that money was coming from the United States to repay what he had taken. Moreover, he sought to put the responsibility for the impugned transactions on fellow employees such as Hammond and Marshall. There is little doubt that the applicant's primary, if not the sole, motivation for the conduct was greed, or at least financial gain. It is also plain that the principles of general deterrence and denunciation assume considerable importance in the sentencing disposition in this case.
42 It may be accepted that the applicant worked in a context where very considerable monetary rewards were the norm and there was only "loose" control as to how such benefits were made available to select employees. Nevertheless, putting to one side hardship, the mitigating circumstances on which the applicant relies, although obviously of importance, are, in my view, not very compelling. Nevertheless, primary amongst them is I think the applicant's sound prospects of rehabilitation as the learned sentencing Judge properly noted in his sentencing remarks. It is also of some relevance that special deterrence is not of great significance in this case. But as Charles JA pointed out in DPP v. Bulfin[8] it will nearly always be the case that in significant white collar crimes, given the discovery of the offending and the lack of opportunity of repeating it, means that it is unlikely that there will be a re-offending. Nevertheless, as His Honour accepted in that case, the rehabilitation of such an offender and the likelihood that he or she will not re-offend are material considerations for sentencing purposes.
43 As to the hardship material on which the applicant relies, it is plain enough, I think, that in almost every case the imprisonment of the offender imposes some hardship on others and, as Charles JA notes in Bulfin,[9] typically wreaks havoc on family members. Thus, the courts have effectively said that, other than in exceptional circumstances, hardship to family members of the imprisoned offender by reason of the incarceration is not a factor relevant to the sentencing disposition.[10] As Gleeson CJ explained,[11] "[t]here is nothing unusual about a situation in which the sentencing of an offender to a term of imprisonment would impose hardship upon some other person." It has been said that exceptional circumstances might exist where, in effect, it would be "inhumane" to refuse to take the relevant hardship into account[12] and, although hardship on an offender's children does not of itself constitute exceptional circumstances, it may be said to be present where, for example, the imprisonment of the offender leaves the children without parental care.[13] Even in such cases, however, special circumstances will not readily be found, as is apparent from R v. Carmody[14] and R v. Thai[15] in which both parents had been imprisoned and where the offenders' children showed a marked adverse reaction to that situation. Similarly, in Holland this Court considered that the hardship to the applicant's seven and a half year old daughter arising from her being left in the care of the grandparents while the applicant and the father served a sentence of imprisonment,[16] did not require the sentencing judge to find that the circumstances were exceptional for sentencing purposes.
44 But as I have noted, Mr Croucher did not seek to claim that the hardship material in this case demonstrates the presence of "exceptional circumstances". Nevertheless, where hardship to the offender's family cannot be taken into account for sentencing purposes because of absence of exceptional circumstances, it may be taken into consideration in determining whether mercy should be extended to the offender,[17] the exercise of mercy being part of the exercise of the sentencing discretion.[18] As King CJ said in R v. Osenkowski[19] in an oft cited passage cautioning against the circumscription of the sentencing discretion by Crown appeals, "[t]here must always be a place for the exercise of mercy where a judge's sympathies are reasonably excited by the circumstances of the case". Its application may arise where, for example, hardship to the family, or the family circumstances, make the imprisonment of the offender more onerous than would otherwise be the case. But, as will be seen, in the appropriate case mercy may also be extended effectively to the family member who suffers significant hardship because of the offender's incarceration; or mercy may be extended where both factors are present, namely to the offender and family members. In R v. Nguyen,[20] for example, considerations that included the ill health of the offender's wife and his concern as to its effects on their children for whom she was increasingly incapable of caring, the deterioration in his own mental health and, generally, the greater burden imposed on the offender by his imprisonment motivated the Court to invoke considerations of mercy in reducing the non-parole period. Similarly in R v. Dooley,[21] the applicant's dependent wife suffered from schizophrenia, and probably also from post partum depression, and, since the appellant's incarceration, had been admitted a number of times as an involuntary patient at a mental institution, compelling the appellant's parents to look after the chid. In re-sentencing the appellant, the Court seems to have extended mercy[22] to him on grounds that included his sincere efforts at rehabilitation and the "additional burden of custody as a consequence of the plight of [his] family".
45 Consistently with the proposition that dispensation of mercy is part of the exercise of the sentencing discretion, it seems that considerations of mercy may operate both at the level of the fixing of the head sentence and of the non-parole period or, at least, the former is not precluded. In Miceli, for example, both the head sentence and non-parole period were reduced (the head sentence from two years to 18 months and the non-parole period from six to three months). In Nguyen and Carmody, on the other hand, only the non-parole period was reduced. In Carmody, that course is readily explained in the judgment of Tadgell JA. More particularly, although His Honour shortened the non-parole period explicitly "on the sole ground that some mercy was warranted", he otherwise considered the sentence passed below to be "unexceptional", and the mercy that was extended in that case was, as his Honour said,[23] effectively to the offender's young child, notwithstanding that his Honour had explicitly rejected that "special circumstances" had been shown such as to take hardship to the child into account in the ordinary course of the sentencing disposition.
46 In the present case, I am of the view that the circumstances of hardship do not warrant the exercise of mercy such as to reduce the period of the head sentence that would otherwise be appropriate. I consider that the aggravating circumstances of the offending and the applicable sentencing principles are such as to leave no room for the proper exercise of mercy in that regard. In particular, I think that the importance of the operation of the principle of general deterrence and the need for the Court to express denunciation of the offending conduct requires the imposition of a head sentence in respect of each count, and a total effective sentence, that properly reflects the gravity of the offending, obviously in the context of the mitigating circumstances. It is impossible not to sympathise with the applicant's family and recognise the hardship that they will bear because of his imprisonment, but in all the circumstances, as I have said, I consider that this does not justify the exercise of discretion to extend mercy in relation to the head sentence. It is important to bear in mind in this context the caution sounded by Callaway JA in Carmody,[24] namely that the sentencing judge will be failing in his or her duty of proper sentencing considerations where overwhelmed by an emotional response to the hardship that a sentence would impose upon the family of the offender. Similarly the exercise of mercy should not undermine the general principle that, save for exceptional circumstances, hardship to family members by reason of the offender's imprisonment is not a relevant consideration for sentencing purposes.
47 In the circumstances I would impose a total effective sentence of six years' imprisonment, calculated as shown below, on the basis that the sentence imposed on Count 10 is the base sentence. Before dealing with each count, I should explain that I have sought to sentence the applicant in accordance with the principles stated by Ormiston JA (with whom Winneke P and Hedigan AJA agreed) in DPP v. Grabovac[25] in which his Honour recognised that in multiple offence cases "[t]he ordinary principles as to cumulation require that the sentencing judge should as far as practicable identify separate events, 'episodes' or 'transactions' giving rise to specific counts or groups of counts and to recognise them by ordering at least a degree of cumulation". His Honour went on to say that the difficulties in sentencing for multiple offences arise not so much from providing for a degree of cumulation, but in having proper regard to the principles of totality and in avoiding the imposition of an inappropriately crushing sentence. A little later in his reasons his Honour said:[26]