R v O'Neill [2003] VSCA 26

Court of Appeal (Vic)|2003-04-11|Before: PHILLIPS, C.J., VINCENT, J.A. and CUMMINS, A.J.A.

Criminal Law - Sentence - Application for leave to appeal against sentence - Applicant pleaded guilty to a "rolled up" count of improper use of his position of an officer of a company and to other counts illustrative of his dishonest conduct - Held, that the applicant's criminality was over valued in the sentences on those other counts - Appeal allowed - Reduced sentence imposed.

On 28 May 2001, the applicant, who is 37 years of age, pleaded guilty to a presentment containing four counts. These were, one count of making improper use of his position as officer of a company, contrary to s.232 (6) and s.1317FA of the Corporations Law, (count 1); two counts of using false documents (counts 2 and 3) and one count of theft (count 4). These offences, which carried maximum penalties of five years' imprisonment (count 1) and ten years' imprisonment (counts 2, 3 and 4) were committed between June 1995 and February 1999. In this application count 1 has been referred to as the "Commonwealth" count and the other counts as "State" counts.

The applicant admitted three prior convictions for theft incurred in the Magistrates' Court in 1987 and for which he was fined $50 on each charge and ordered to pay $1028 restitution. After a plea for leniency, in which a deal of character evidence was presented on the applicant's behalf, together with the evidence of a clinical psychologist, Mr Healey, the learned judge sentenced the applicant to be imprisoned for two and a half years on the "Commonwealth" count. His Honour ordered the applicant's release after serving 18 months of that sentence on his entering into a recognizance in the sum of $1000 to be of good behaviour for 18 months. On counts 2, 3 and 4 the applicant was sentenced to two years'; three years and two years' imprisonment respectively. The learned judge directed that six months of the sentence on count 2 and one year of the sentence on count 4 be served cumulatively upon the sentence on count 3. This made for a total effective sentence with respect to the "State" counts of four and a half years' imprisonment. His Honour fixed a non-parole period of three years and directed that the sentence on these counts commence six months after the commencement of the sentence on count 1, which was to be that very day, 27 July 2001. His Honour concluded, "That makes a total effective sentence of five years with three and a half years to be served before being eligible for parole."

The applicant later lodged notice of application for leave to appeal against sentence pleading the following grounds:

"1. The individual sentences imposed and the total sentences imposed are manifestly excessive. 2. The individual sentences imposed and the total sentences imposed fail to give proper weight to (a) the assistance given by the applicant to investigative authorities; (b) the applicant's prospects for rehabilitation; (c) the applicant's pleas of guilty; (d) the remorse exhibited by the applicant. 3. The sentences imposed on counts 2, 3 and 4 overvalue the applicant's criminality and fail to give effect to the discounting factors referred to in paragraph 2."

Later, the learned Master allowed a fourth ground to be pleaded.

"(a) The sentences passed upon the applicant are manifestly excessive in light of the applicant's suffering Bipolar Affective Disorder, the diagnosis of which was made following sentence. (b) The applicant seeks leave to lead evidence of his suffering Bipolar Affective Disorder, the diagnosis of which was made following sentence."

It is now necessary that there be set out a summary of the facts of the applicant's offences. It is convenient to take that given by the sentencing judge in his reasons for sentence which summary has not been challenged. (His Honour is, of course, addressing the applicant.)

"This case has its commencement back in early 1993 when you and another man, Mr Bailey, who was involved in car dealerships, saw money to be made in a mortgage loan business. At the outset I make it clear that there is no suggestion or imputation of dishonesty in any operations against Mr Bailey. The mortgage loan business was based simply on the advertising and networking of obtaining investors to put their money into mortgage secured loans. As a result, Bailey O'Neill and Associates Pty Ltd was formed, and in the years that followed business flourished. The industry had no regulation and, even at that stage, you had three prior convictions for theft imposed in the Magistrates' Court in 1987. Briefly the facts of the case may be summarised as follows. Count 1 alleges that between 15 June 1995 and 2 September 1998, you, being an officer of Bailey O'Neill and Associates, did intentionally and dishonestly, intending to gain directly or indirectly an advantage for yourself, make improper use of your position as an officer of the company by drawing on the bank account of the company's trust account No. 2, 350 cheques in the amount of $2,266,479.09 and applying the proceeds of same to your own use. Now, this is called a rolled up count consisting of a number of offences brought together to create one offence. It is to be noted that it involves the improper use and drawing and dishonest use of 350 cheques. It covers a period from 15 June 1995 to 2 September 1998. The amount you have dishonestly used totals $2,266,479.09. It involves the intentional and dishonest use by you of that amount by drawing 350 cheques which you were not entitled to draw. You were effectively in charge of the trust account and they were drawn upon and you were the sole signatory, in effect. This count, which covers a substantial component of your criminality, has a maximum prison sentence of five years. It involved you in using, for your own purposes, the capital trust fund into which investors' funds were paid and were expected to be married up to a specific mortgage. The way you went about it required little skill, as the accounting systems were abysmal, checking was completely lacking and you had virtually complete autonomy over the trust fund. You further manipulated the cash journal books from which you tore pages and made false entries. Essentially you maintained and you manipulated this account by the following methods. A, investors would invest in mortgages, initially for a period of a year, but they could go up to six or seven years; B, investors would make further payments into the account when all the time the mortgages were at an end; C, investors were informed the mortgages had not been paid whereas the mortgages would already have been; D, investment moneys were paid towards an investment that did not proceed. The money would remain in the account and investors made payments by various means. A considerable amount of money was paid to investors by way of late interest or additional interest payment of funds back to them. The moneys you dishonestly used were improperly sent out in various directions. Your criminality was high and sustained over a number of years. The money was expected to be paid out of that account, unless it related to a properly secured investment. You commenced your criminality after making an unauthorized loan of $250,000 to a man named McArdle. This act does not form part of the charge. You bankrolled a friend's Federal Court case for a substantial sum of money. You also made futile investments in the hope, no doubt, that rewards would flow and enable you to bring the trust account to reach its proper level in the bank. You were, however, the main beneficiary. A figure of over $540,000 was spent by you on renovations to your South Yarra home. You purchased a Porsche for $213,000. You drew cheques for various amounts of cash and drew four cheques for $40,000 to maintain a cocaine habit. I should add, the Porsche was paid back for $100,000 and a further $78,000 went back into the proper account. You paid 18 cheques to CitiBank in an amount of $117,500 to pay for your own purposes and credit cards. Many other cheques went to unsecured funding of companies and property developers. All this was made possible because you had sole control of the trust account. In many cases investors were making payments on mortgages which had already been paid out. All this was discovered in about September 1998. You were basically frank about your dishonesty when it was obvious your scheme was being discovered. Attempts were made to get funds back into the trust account by you and Mr Bailey. In all, a sum in the figure of $1,080,000 remains outstanding. The bulk of investors have, for all practical purposes, lost their money. The point to make is that this high degree of criminality is to be dealt with under an offence which covers a maximum term of five years. By your plea of guilty I am required to give you a discount and, by reason of s.16G of the Commonwealth Crimes Act, I am required to give you a further discount on the head sentence because of the absence of remissions. These discounts bring down the maximum sentence I can impose significantly from five years. The other three offences are offences which occurred in the course of maintaining the criminality involved in count 1. Although they carry a maximum sentence of ten years, I must sentence you for each offence separately and on the basis of the criminality involved in that particular offence. I cannot use those higher sentences to punish you for your criminality under count 1, the maximum of which is inadequate. Count 2 involved you in forging and using a false mortgage document to obtain a false discharge at a settlement. This enabled you to pay $34,000 back into the trust account. Count 3, at a settlement of a property, you received a pay out cheque of $26,150, which should have gone to an investor; instead you paid it into your own bank account and used $20,000 to pay off to a developer. You used the rest of the money for your own purposes. Count 4 also involved discharge of a false mortgage. As in Count 2, you drew up a false discharge of the mortgage document which enabled you to pay $60,000 back into the trust account. The investors never saw any of it and received no money whatsoever." (His Honour later noted that the applicant had made some restitution to investors but some $1,080,000 remained outstanding.)

I now turn to the submissions of counsel. Mr Priest, for the applicant, relied on a quite extensive written outline of submissions and supplemented this with oral argument. I shall not draw any distinction between the two.

As to ground 2 (a), Mr Priest reminded the Court that after the plea for leniency ended on 30 May 2001, the court convened again on 25 June. On this occasion a letter under the hand of a Detective Sergeant, and dated 18 May 2001, was put before the learned judge. Submissions were made upon it. It referred to assistance furnished to the authorities by the applicant. Counsel submitted that the persons in whom the police were interested were "relatively dangerous".

Counsel stressed that there was reliable evidence before the judge that the assistance rendered by the applicant had "been of great value" and "always...accurate". Further, the prosecution had accepted that it was "significant" and that it merited "a significant discount to be reflected in both the head sentence and (as I believe that counsel intended to say) the non-parole period".

Mr Priest pointed out that his Honour never specifically referred to this assistance in his reasons for sentence - although he said he took into account the submissions of the applicant's counsel. This omission, it was submitted, makes it difficult to determine what weight, if any, was given to this assistance in the composition of the sentence. An examination of the face of each sentence, it was said, reveals at least that this factor must have been devalued. By virtue of a combination of Commonwealth legislation and the common law, the assistance was important in relation to sentences on all the counts.

Continuing his submissions, Mr Priest contended that, with respect to count 1, the maximum sentence available (five years' imprisonment) was notionally to be reduced for remissions: vide s.16G of the Crimes Act (Cth). A one third reduction, he submitted, is "an appropriate starting point" and he referred to R. v. Li[1] and R. v. Majeric[2]. Applying a reduction to that order, so the argument went, renders a notional maximum sentence of three years and four months. But that, it was submitted, fell to be further discounted by other matters in the applicant's favour. Accordingly, the sentence of two and a half years for count 1 made little allowance for the applicant's assistance.

In reality, the sentence imposed must be seen as being at, or near, the maximum - and this occurred in a setting where it was common ground, to use the words of the judge, that count 1 "covers a substantial component of criminality" of the applicant's conduct. Further, counsel argued, examination of the face of the sentences for the remaining counts shows that the applicant's assistance could not have been given proper weight in their composition.

Mr Wiltshire, for the respondent, who also relied on a written outline of argument, submitted as to this ground that the applicant's assistance did not involve him giving evidence against any person or his role being voluntarily disclosed by the Crown to any defendant. The lack of explicit mention of it in the reasons for sentence is explained by a discussion which took place on 4 July. At that hearing, his Honour appears to have been minded to simply say in his reasons that the applicant had received a lighter sentence because of his assistance to authorities. Counsel for the prosecution suggested an alternative method and discussion then went to non publication orders. Defence counsel was in favour of publication and the Crown Prosecutor told the judge at one point that although counsel had spoken about these considerations they hadn't "got down to the tin tacks of how that might be done". In short, nothing was settled.

With respect to the relevant discount, Mr Wiltshire submitted that the judge had had the appropriate authorities drawn to his attention. As to the "appropriate starting point" he contended that one third should be regarded as the maximum notional adjustment and he referred to Majeric (supra); DPP v. El Kharhani[3] and R. v. Sweet[4].

Counsel also pointed out that his Honour had acknowledged that he had taken s.16 G into account. Further, that the sentences on counts 2, 3 and 4 do not require a notional downward adjustment.

It was also submitted that the alleged anomaly between the sentence on count 1 (that of the substantial criminality) and the other sentences can be explained by the circumstance that the maximum penalties for those are double the maximum sentence available on count 1.

As to the other grounds apart from Ground 4, Mr Priest submitted that although his Honour allowed that the higher maximum sentences available on counts 2, 3 and 4 could not be used to punish the applicant for his criminality under count 1 "the maximum of which is inadequate" (Judge at p.133); the judge really proceeded to do what he had said he could not do. The sentence on count 3 involved a cheque to the value of $26,150, yet it attracted a sentence of three years' imprisonment which was plainly excessive, as were the sentences of two years' imprisonment, on each of counts 2 and 4 for using false discharges of mortgage.

Mr Priest also contended that the sentences did not, on their face, reflect sufficient weight being given to other mitigatory factors including pleas of guilty, remorse, partial restitution and prospects of rehabilitation. Finally, as to these grounds, it was submitted that the extent of cumulation ordered produced a manifestly excessive head sentence and similarly infected the non-parole period fixed.

As to these grounds, Mr Wiltshire submitted for the respondent that an allegation of manifest excess of sentence admitted of little debate. Nor could this Court substitute its own opinion for that of the sentencing judge merely because it would have exercised its discretion in a different manner. The head sentence on count 3 was 30 percent of the available maximum; the head sentence on count 2 is 20 percent thereof and that on count 4 is 40 percent thereof. Counts 2, 3 and 4 were committed not long after the period pleaded for count 1.

As to ground 4, it is sufficient for me to say that during argument as to it, the Court indicated it would not admit the evidence referred to therein.

I would uphold ground 3 inasmuch as I have come to conclude that the sentences on counts 2, 3 and 4 do overvalue the applicant's criminality. In my opinion, a real anomaly is apparent when one considers those sentences against that imposed on the "substantial criminality" count 1. I do not accept the explanations proffered by the Crown for this anomaly.

Should the other members of the Court agree with this conclusion, the sentence as a whole is vitiated and it falls to this Court to re-sentence the applicant. I shall return to this later.

I would not uphold the submission that the sentence on count 1 is manifestly excessive or that it fails to properly reflect matters favourable to the applicant. On its face, it plainly falls within the range of sentences properly available in all the circumstances to the learned judge. In my view the applicant was fortunate to have this "rolled up count" pleaded against him in that it involved hundreds of instances of proscribed conduct.

Nor would I uphold the submission that the sentences failed to reflect sufficiently the assistance given by the applicant to the authorities. An inspection of their faces does not give rise to such a conclusion. Further, the failure of his Honour to specify this assistance in his reasons is sufficiently explained by the matters urged on behalf of the respondent. After all, a special sitting of the Court was in part devoted to it and it is just not to be supposed that the judge overlooked it.

In the matter of re-sentencing, I have given regard to all the relevant considerations including the maximum penalties prescribed by Parliament and matters personal to the applicant. As I perceive his Honour's sentencing intent, it was to arrive at a custodial component of 18 months in the sentence for count 1 (after which the applicant was entitled to conditional liberty) and, on the "State" counts a total effective sentence of four and a half years' imprisonment with a non-parole period of three years'. By making the commencement of the "State" sentence six months from the date of sentencing, this produced an overall total effective sentence of five years' with a non-parole period of three and a half years.

I would propose that the sentence below be varied so as to substitute sentences of 18 months' imprisonment for counts 2 and 4 and two years' and six months' imprisonment for count 3. I would also propose that nine months of the sentences on count 2 and 4 be served cumulatively upon the sentence on count 3. On the "State" counts, this would make for a total effective sentence of four years' imprisonment. I would further propose a non-parole period of three years' be fixed. As to the commencement date fixed by his Honour for the "State" sentences, late in the plea the learned judge engaged in a lengthy dialogue with the Crown Prosecutor who began it by recalling observations casting doubt on consistency of sentencing throughout the Commonwealth made by Sir Guy Green (then Chief Justice of Tasmania) and His Honour Chief Judge Rozenes (then Commonwealth DPP). His Honour began the dialogue by postulating the composition of a sentence involving both Commonwealth and State counts. He stressed repeatedly that he was not referring to "this case". Thereafter, the discussion ranged from cumulative to concurrent sentences "minimums or release orders". For my part, I would commend the earnest attempts of the Crown Prosecutor to assist the judge but at its end even he felt obliged to state "once again I apologise that I had to go to this length to explain something which is pretty well incomprehensible". In any event, it seems clear that defence counsel, who later addressed the judge, never discerned that his Honour had it in his mind to defer commencement of the State sentence in the instant matter. I am troubled by what occurred and I cannot see that any useful

purpose is served by this direction. I would propose the sentence below be varied by removing it. I would otherwise confirm the sentence on count 1 below. That would make for a total effective sentence of four years' imprisonment with a non-parole period of three years.

I agree with the disposition of this matter proposed by the learned Chief Justice, and for the reasons advanced by him. However, I wish to add a few remarks of my own with respect to the sentence imposed on count 1.

Considered by reference to the number of criminal acts encompassed by the "rolled up" count, the adoption by the applicant of a deliberate course of conduct over a quite long period of time, the amount misappropriated and the repeated breaches of the trust reposed in him, the assessment by the judge in the Court below of his level of criminality as "high" was clearly appropriate. It is apparent in his sentencing remarks that he was conscious of his obligation to impose a sentence which properly reflected these considerations.

It is equally apparent that his Honour was mindful that appropriate weight had to be attributed to a range of factors militating in favour of mitigation of penalty. In addition to a number of matters personal to the applicant, they included, inter alia, the assistance that he had provided to investigating authorities and the necessity to have regard to the provisions of s.16G of the Crimes Act. In my view, there is nothing in his remarks or in the sentence imposed which suggests that he may have fallen into error in relation to either of these aspects or in the synthesis of the relevant sentencing principles and considerations at which he arrived and is represented by the sentence imposed.

I agree with the disposition of this application proposed by the learned Chief Justice, and for the reasons stated by him, and I agree also with the observations of Vincent, J.A.

At a glance

Court

Decision date

Before

Source

Judgment (38 paragraphs)

Parties