R v THORNE No. SCCRM-99-149 Judgment No. S408 [1999] SASC 408

The appellant was charged with one count of fraudulent conversion and three counts of false pretences. He pleaded guilty to the charges before committal. He was sentenced by a District Court Judge for a head sentence of two years with a non-parole period of nine months. The learned Judge refused to suspend the sentence.

The appellant appealed to this Court against the sentence imposed on the grounds that it was manifestly excessive and that the learned Sentencing Judge erred in failing to exercise his discretion to suspend it.

I shall deal first with the circumstances of the offending. The appellant was in charge of the TAB Agency at the Renmark Hotel. His duties included the balancing of moneys received and paid and the remittance of amounts from time to time payable to the TAB. In carrying out his duties, the appellant was not allowed to give credit to TAB customers. He ignored these instructions and permitted a number of customers to place bets on credit, some of them for large sums. Two persons, Mr Hua and Mr Yang, were permitted to wager substantial sums of money on numerous occasions. Heavy losses were incurred and they were in no position to make them good. Mr Hua and Mr Yang both worked in a Chinese Restaurant in Renmark. Any losses incurred as a result of the granting of credit to them would have to be made good to the TAB by the Renmark Hotel. Mr Hua and Mr Yang were in no position themselves to recoup their losses.

It appears from the learned Judge's sentencing remarks and the Victim Impact Statement that as a result of the appellant's dealings with Mr Hua and Mr Yang, the Renmark Hotel lost $71,616.35. An amount of $49,000 was recovered from the Hotel's Fidelity Insurance Policy leaving a net loss to the hotel of $22,616.35. It also lost commission of some $7,634.35 which it would have earned if the business had been conducted properly. In the end the loss to the hotel amounted to $30,250.

This was not the first time the appellant has been before the courts on a matter involving fraudulent conversion. In 1995 he was convicted of five counts of fraudulent conversion and one count of falsifying accounts. On that occasion he was sentenced to ten months' imprisonment, the sentence being suspended on his entering into a good behaviour bond for two years. The appellant successfully served out the period of his good behaviour bond. The charges in respect of the earlier offending related to the misuse of about $6,000 belonging to a hotel social club. Some of it was lost in gambling but most of it was used for general expenses.

The appellant is 50 years of age. He is married with three adult children all of whom have left home. His upbringing was unexceptional. He attended a private school and left after obtaining an Intermediate Certificate.

He worked on his parents' farm for 15 years or so. On his mother's death in 1985 the farm had to be sold. The appellant then purchased a hotel lease. He conducted the hotel for 18 months or so but found it too difficult to operate the hotel while raising a young family. He was manager of a golf club for two years and assistant manager of a hotel for about four years. While working at that, he was charged with fraudulent conversion and falsification of accounts. In 1995 he obtained part-time work at the Renmark Hotel.

The appellant has had difficulty with both alcohol and gambling. He has managed to get on top of his addiction to alcohol, at least for the time being. It also appears that he ceased his gambling habit prior to taking up employment with the Renmark Hotel.

The learned Judge took into account the fact that the appellant pleaded guilty to the charges and the fact that he sought no personal gain. For reasons which I will explain, I doubt whether the latter consideration is relevant.

There are a number of factors which tell against the appellant in this instance. The appellant was in a position of trust. The management of the TAB Agency Account was entrusted to him. The fact that he was in a position of trust should be treated as an aggravating factor. Personal deterrence and general deterrence are important considerations in relation to an offence of this kind. So far as the appellant is concerned, it is important that he be deterred from further dishonesty, particularly having regard to the fact that this is the second occasion on which he has come before the courts. General deterrence is also most important. The community must know that the courts take a very dim view of offences of this kind involving, as they do, dishonesty in a position of trust: R v Ashdown [1994] SASC 4488; (1994) 72 ACrimR 63, R v Seagrim (unreported CCA Judg No S4888, delivered 9 December 1994) and SA Police v John (1995) 181 LSJS 20. The amount of money involved was $79,250.70, a substantial sum. In this matter it appears that the appellant did not stand to gain anything in a financial sense from his dealings with Mr Hua and Mr Yang. It is rather a case where the appellant permitted a few transactions on credit, got out over his depth and, rather than face up to the matter with his employer, allowed Mr Hua and Mr Yang to continue to place bets on credit in the forlorn hope that the losses might be recouped and a refund made for the benefit of the hotel. If he had faced up to his employer at an early stage, he would probably have been dismissed. Rather than face that prospect, he simply allowed matters to drift until he was ultimately discovered and apprehended. Before being apprehended he lied about the matter on a number of occasions to the hotel accountant.

In all the circumstances, I am of the opinion that the sentence imposed by the learned Judge was not manifestly excessive. In relation to the question of suspension, one must remember that the appellant had the benefit of a suspended sentence on an earlier occasion. On this occasion I am of the view that a more serious deterrent is required and that the learned Judge was well within his sentencing discretion in refusing to suspend the sentence.

DOYLE CJ: I invite Debelle J to give his reasons next.

DEBELLE J: The difficulty I have found in this case stems from the fact that the appellant gained nothing from his offending. He has not converted the money into his own use. Others, who are not before the court, in effect, have benefited from the fact that he acted contrary to his employer's instructions. In other circumstances, those might have been reasons for either a lesser sentence, or, more likely, for suspending the sentence. However, as I have said, the appellant was acting contrary to instructions. It was not a question of a miscalculated judgment on his part. Instead, his instructions were clear, and he did not heed them.

In addition, the appellant allowed the practice to continue over a period of several months. He did not at any time go to his employer and acknowledge his error. Had he done so it might have been possible to take a more lenient view of his offending.

The other difficulty lying in the path of taking a more lenient view is the fact that the offending is similar to the earlier offences of fraudulent conversion which had not happened all that long before. Whilst it must be acknowledged that they were of a different character, the appellant had had a clear warning that he should, when acting in a position of trust, properly discharge that trust so that there would be no financial loss to his employer.

For these reasons, but with a degree of hesitation, I would dismiss the appeal.

DOYLE CJ: Accordingly, the order of the Court is that the appeal be dismissed.