R v Slattery [2008] VSC 81

Supreme Court of Victoria|2008-03-20|Before: LASRY J

CRIMINAL LAW - Sentence - Plea of guilty - Solicitor - Theft - Having a deficiency in a trust account - False accounting - Failing to deposit trust monies - Attempting to pervert the course of justice.

1 Daniel Sydney Slattery, you have pleaded guilty to three counts of theft; seven counts of having a deficiency in a trust account; four counts of false accounting; three counts of failing to deposit trust monies; and three counts of attempting to pervert the course of justice. These offences took place between 24 August 2000 and 13 August 2002. I propose to impose on you a total effective sentence of eighteen months' imprisonment to be wholly suspended for a period of two years.

2 At the time of these offences you were a solicitor and the holder of a practising certificate under which you were authorised to receive trust money. You conducted a practice under the name of Daniel S. Slattery and Associates, at Level 1, No. 2 Burwood Highway, Burwood in Victoria until September 2002.

3 In that practice you had a number of bank accounts including your general trust account, an account known as the "Gilchrist account", an account known as the "Maxima residual account", a long service leave account, and a business account. Although the presentment contains 20 counts (about which your counsel complained), those counts can be divided into seven groups of offences.

4 The means by which you gained use of some funds was by depositing them to the Gilchrist account and the Maxima residual account, and then withdrawing some amounts to your benefit. On the other hand, your counsel relies on the fact that the majority of the funds quickly found their way into the trust account or to the client concerned.

5 In February 1997 Ms Angela Parsons commenced family law proceedings against her husband, Mr Robert Parsons. You were her solicitor. On 10 December 1997 proceedings in relation to the family's financial arrangements were listed for hearing at 2.25 pm. Shortly before the matter was due to be heard, Mr Parsons murdered Ms Parsons in the vicinity of the Family Court at Dandenong. Mr Parsons was sentenced for that murder by Cummins J on 24 May 1999 to life imprisonment, with a minimum term of 25 years to be served before eligibility for parole. That case had a dramatic effect on you and played, in part, a causative role in the commission of these offences.

6 Ms Joanna Collins was the sister of Ms Parsons and she engaged you to act on her behalf to obtain custody of her sister's children, and a civil action was also commenced against Mr Parsons arising out of those horrific events of 10 December 1997.

7 As a result of the matter being settled, two bank cheques totalling $288,862.72 were sent to you, and rather than banking them into your trust account they were placed into the Gilchrist account. Mr Gilchrist was a medical practitioner who was formerly a client and the account in that name was originally opened for the purpose of collecting outstanding fees. The account, however, was a savings account and the Crown case is that when money was deposited by you into that account as on this occasion it was done for the purpose of enabling you to access those funds, rather than deposit the funds into your trust account as was your duty.

8 The cheque for $288,862.72 had been deposited into the Gilchrist account on 24 August 2000 and on the following day you withdrew $270,656.78 from that account and deposited $184,918.98 into your trust account.

9 On 21 September 2001 a further bank cheque for $117,632.78 was received in further settlement of the action against Mr Parsons. This cheque should have been deposited into the trust account but instead was placed in the Maxima residual account. On 24 December 2001, $118,000.00 was withdrawn from the Maxima residual account and $93,882.10 was sent to the client Ms Collins.

10 Count 1 thus refers to the theft of the initial two cheques and Count 2 refers to the failure to deposit these cheques into the trust account. Count 3 concerns the relevant deficiency and Count 4 concerns a charge of false accounting in relation to 11 cheque butts. Count 5 refers to a deficiency in your trust account for $59,606.98. Count 6 is the theft of the cheque for $117,632.78 to which I have just referred. Count 7 refers to your failure to deposit that cheque into your trust account and Count 8 alleges the consequent deficiency. The actual loss to Ms Collins which you were required to repay was the amount of $59,606.00.

11 Mr Andrew Lowe was another client with funds in your trust account. Five cheque butts and trust account ledgers in relation to him were falsified and a sum of money totalling $1,825.00 was misappropriated by you. Count 9 alleges the falsification of cheque butts and trust account ledgers. Count 10, alleges the deficiency consequent upon Count 9. The amount in that count was amended with leave to read $1,825.00 rather than $1,525.00.

12 Counts 11 and 12 related to Dr Susan Ottomanski. You held funds in trust on her behalf and made withdrawals totalling $6,200.00 between May and December 2001.

13 Count 11 relates to the falsification of documents relating to cheque butts and ledgers, and Count 12 relates to the consequent trust account deficiency.

14 These counts relate to your client Mr Peter Campbell. On 5 July 2002 a bank cheque for $23,500.00 was received on his behalf for crimes compensation. That cheque was placed into the Gilchrist account, instead of being placed in the trust account as it should have been. Count 13 is therefore the theft of the amount, Count 14 is the failure to deposit the funds into the trust account, and Count 15 is, as Mr McArdle QC, the learned senior prosecutor put it, the "mirror offence" of having a deficiency in the trust account.

15 Counts 16 and 17 relate to Ms Denise Niblett. Over nine transactions funds were withdrawn from the trust account in her name. As a result, Count 16 is a false accounting count being the nine National Australia Bank cheque butts and Count 17 is, again, the consequent deficiency count being an amount of $6,200.00.

16 These counts each allege the doing of an act which had a tendency to pervert the course of justice with the required intent. Each involved requests by you to your clients, in particular Ms Collins, Mr Lowe and Ms Niblett, to make false statements to the Law Institute of Victoria. Effectively what you requested was that those individuals tell the Law Institute inspector that the money had been taken by you with their authority and approval.

17 Of course, for a practicing solicitor to be doing such things is completely at odds with your obligations to the legal profession and your oath as a barrister and solicitor of this Court. However, it is clear enough that Mr Carter's submission that these were acts of desperation and panic is accurate. There was no planning or sophistication involved and at the time of these events, there was no police involvement. You were later admonished by the Law Institute for contacting these people and you apologised.

18 In relation to the first 17 counts, at the conclusion of the submissions before me Mr McArdle accepted several propositions that were important. First, on his instructions, there have been no claims on the fidelity fund in respect of your conduct. Second, he appeared to accept that the amount of money that was actually appropriated by you and used to your benefit was a sum totalling approximately $75,000.00. The amount you appropriated has been repaid in full and that is also accepted by the learned prosecutor. There is therefore no loss to the fidelity fund. The repayment was achieved by cashing in superannuation and other forms of assistance from your family.

19 There is no question of you gaining financially from this and I accept that one of the reasons these offences were committed by you was financial stress. It would appear that your practice was failing and your ability to cope with the pressures had diminished dramatically. There is, however, no question that solicitors who manage trust accounts stand in an unusual position of trust. Clients are totally dependent on the solicitor for the ethical and legal treatment of their funds as well as legal advice. Breaches of those obligations have a consequence not just for the particular solicitor and client but for the legal profession as a whole.

20 The prosecutor produced three victim impact statements. They were prepared by Mr Campbell, Dr Ottomanski and Mr Lowe. Each of those former clients expressed concern about your actions, although some of the matters raised by them seem to be at odds with the evidence in this case. They relate, for example, to issues such as over charging, and I make no finding as to whether that allegation is true or not because it is not part of the case brought against you. However, these victim impact statements do refer to what was clearly a breach of trust by you, notwithstanding that complete reparation has been made for the funds concerned.

21 You are aged 61 and unquestionably your early life was difficult. That early life included being placed in foster care in Lithgow, New South Wales, and then being returned unexpectedly to your parents at the age of six. That meant changing locations and schools while you came to grips with the trauma of being returned to your parents having believed that another couple were in fact your parents.

22 Mr Carter of counsel, who appeared on your behalf, outlined your early life as the consultant psychiatrist, Dr David Sturrock, had done in his report of 15 February 2008. That included beatings by your father who was obviously a very violent man both toward you and toward your mother. I am told that at the age of 16 you intervened in a very aggressive attack by your father on your mother with a knife and removed her and yourself to your uncle's place, ultimately going to Sydney.

23 At the age of 16 you joined the Royal Australian Air Force as an apprentice radio technician and made your time in that service into a very successful career. You began as an electronics technician apprentice and graduated from that course in 1965, ultimately moving on to a degree in engineering at RMIT which you completed with honours. You became the Engineering Officer in Charge of all airborne radar systems for all three branches of the armed forces and rose to the rank of Wing Commander which, as I understand it, is the Air Force equivalent of the army rank of Lieutenant Colonel.

24 Earlier in your Air Force career you married and that marriage produced two children. Later, but whilst still in the Air Force, you commenced a law course at Monash University and finally retired from the Air Force in 1984, with a long service medal and a good conduct medal for an Air Force career that had lasted 21 years. You graduated with honours in law in 1986 and won the Family Law Prize.

25 I am told that you then set up a practice which immediately became busy and specialised in family law matters. You became an accredited family law specialist in 1990. Apparently part of the motivation for that was your own experience when your first marriage ended, resulting in difficult family disputes.

26 As a solicitor, you carried out pro bono work and contributed as a volunteer to the work of the Community Legal Centre in Mount Waverley. The written reference of Mr Darren Mort of counsel, who also specialises in family law proceedings, attests to your quality as a solicitor. However, he became aware that as a result of the incident involving the murder of Ms Parsons and the events that followed it, your legal practice went into serious decline, and by the time these offences were committed and you had lost your practising certificate, there was not much of your practice left.

27 After these matters were examined by the Law Institute of Victoria, your practising certificate was suspended on 24 September 2002. In April 2003, you obtained employment as a senior manager with Victoria Body Corporate Services Pty Ltd and remain employed in that position. I will return to this topic but it is clear that such employment has been very successful and you are highly regarded by your employer.

28 You married your present wife Frances in December 1994 and she continues to provide you with the love and support you need. In 2005 she suffered injuries in a motor car accident and is need of continuing treatment for back and spinal injuries.

29 I have already referred to the tragic incident involving Ms Parsons which occurred on 10 December 1997.

30 On 15 February 2008 Dr David Sturrock, a consultant psychiatrist, prepared a report on your overall psychiatric condition. That report was tendered in evidence with the consent of the learned prosecutor. He concluded that you suffered from a major depressive episode with post traumatic stress symptoms for five years up until your first contact with him in 2002. Dr Sturrock concludes that your illness arose as a result of the Parsons matter. He also made observations about your childhood, although it seems to me that you had made significant progress in dealing with that until the murder of Ms Parsons. Dr Sturrock has also concluded that your compromised mental state at the time of the offences was "... a significant factor in impairing [your] judgment ..." and leading you to make the decisions which resulted in the commission of these offences.

31 Your counsel submits that the principles arising from R v Verdins[1] apply in this case. In particular, Mr Carter submitted on your behalf that your diagnosed conditions justify a sensible moderation of general deterrence and some "sensible reduction of [your] level of moral culpability",[2] consistent with the principles in that case. It does seem to me that your impaired mental functioning may well have interfered with your ability to exercise appropriate judgment and to make calm and rational choices as well as to think clearly.[3] I accept those submissions.

32 These offences were committed between 24 August 2000 and 13 August 2002. You were spoken to by the Law Institute of Victoria in September 2002 and your practicing certificate was suspended on 24 September 2002. I suspect you hoped that was the end of the matter. But you were interviewed by the Victoria Police Fraud Squad on 17 August 2005. As Mr McArdle pointed out, you answered questions in that record of interview by making no comment, as you were entitled to do. That meant the matter had to be investigated, and you were not charged with any offences until 26 April 2007. You pleaded guilty on 2 November 2007.

33 That chronology demonstrates that from the time that the offences were first committed until the present is seven and a half years. That is a long delay, which must be taken into account. As the authorities make clear, such a delay is to be taken into account when rehabilitation is a real prospect.[4] There is no question that rehabilitation is a real prospect in your case and that the delay and the uncertainty has obviously been difficult for you. The matter has been "hanging over your head" for some considerable time.

34 In addition, the cases cited by your counsel included R v Merrett, Piggott & Ferrari,[5] where the judgment of Maxwell P referred to the views of the Court of Criminal Appeal of Western Australia in Duncan v R,[6] to the effect that when there has been a lengthy process of rehabilitation and society is not in need of protection from the accused, punitive and deterrent aspects of sentencing should not be allowed to prevail so as to possibly destroy the results of rehabilitation.

35 Your plea of guilty was made at the first appropriate opportunity and, as your counsel submitted, there was never a prospect of a trial. Despite your "no comment" record of interview you have never sought to contest the matter. I am told you now regret not having answered the questions in that interview. In the course of his submissions, Mr McArdle agreed that your plea is "relevant and important". I am satisfied that your plea does reflect the remorse you feel about what you have done. I am in no doubt that you are ashamed of what has occurred and that you are determined similar events will not occur again.

36 You have no prior convictions, and by inference, as well as by direct evidence you can, but for these offences, be described as a man of good character.

37 The evidence produced to me supports the conclusion that your rehabilitation both in relation to your psychiatric condition as well as the commission of these offences is well advanced. As I have earlier noted you have been employed in a full-time position as a manager with Victoria Body Corporate Services Pty Ltd since April 2003. As I understand it, this is a company which manages body corporate activities for property owners. It appears that when you first sought employment with this company you immediately revealed your wrongdoing, inviting Mr Herman Klein, the director of the company, to make his own inquiries with the Law Institute of Victoria. You are regarded by that company as a "valued senior employee undertaking a responsible and trustworthy role" and the continuation of your employment is assured. Mr Klein gave impressive evidence before me, and in the course of it he said that he had no regrets about employing you and that what he had heard in court on 3 March 2008 made no difference to his judgment of your character. Mr Klein's evidence compels the conclusion that your rehabilitation and desire to progress and improve your life is well advanced and stands to your credit.

38 In addition, I received a number of other detailed references,[7] from both personal and professional contacts. Each individual testifies to your qualities and the conscientious manner in which you conducted your practice as a solicitor. Some of the witnesses are familiar with the trauma associated with the murder of Ms Parsons, and witnessed its effect on you.

39 I am required to take into account current sentencing practices. I have been referred to a number of cases which are similar to yours, although in most cases the offending is more serious or more culpable than your offending. The Court of Appeal has noted a traditional reservation about comparative sentencing analysis on the basis that the sentencing process "is not amenable to simple comparisons or mathematical precision: too many variables are involved as between cases and no two cases have the same factors or equally weighted factors of mitigation and aggravation".[8] However, whatever the limitations, some comparative consideration is necessary, and I have received assistance from counsel in that regard.

40 Your counsel has submitted that whilst a sentence of imprisonment is appropriate given the seriousness of the offences, a wholly suspended sentence is properly within the range of options. The learned prosecutor agrees that such an outcome is "one of the options" available to me.

42 I direct that the sentences on Counts 2 to 17 be served concurrently with the sentence on Count 1. I direct that the sentences on Counts 18, 19 and 20 be served concurrently with each other but as to 6 months of those sentences, that 6 months be served cumulatively with the sentences on Counts 1 to 17. That results in a total effective sentence of eighteen (18) months' imprisonment.

43 Having regard to the factors referred to in s 27 of the Sentencing Act 1991 (Vic), I consider it is desirable to wholly suspend this sentence. I therefore direct that your sentence be wholly suspended for a period of two (2) years. I am required to explain to you the purpose and effect of this order and the consequences that may follow if you commit another offence punishable by imprisonment during the operational period of the sentence. A breach would occur if you committed either in or outside Victoria another offence punishable by imprisonment during the period of the suspended sentence. Were that to happen, it is very likely that you would have to serve the full period of the sentence that has been suspended. Given the evidence I have heard, I am very confident that will not occur.

[2] Transcript of Proceedings, R v Slattery (3 March 2008, Supreme Court of Victoria, Lasry J) at 54.

[3] See R v Verdins [2007] VSCA 102 at [32].

[4] R v Miceli [1997] VSC 22; [1998] 4 VR 588 (per Tagell J).

[8] R v Bangard [2005] VSCA 313.

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