REGINA v. PONT [2000] NSWCCA 419

3 GREG JAMES, J: The Director of Public Prosecutions appeals to this court against the asserted inadequacy of a sentence imposed upon the respondent in the District Court of New South Wales at Sydney on a charge of larceny as a servant. The respondent had pleaded not guilty to the charge which is punishable by a maximum of 10 years imprisonment but had been found guilty by a jury. 4 The respondent was sentenced to imprisonment for three years, to be served by way of periodic detention. That sentence was to date from 19 November 1999. Although the appeal had been commenced by lodgment of a notice of appeal on or about 20 December 1999, it was not brought on for hearing before us until 7 August 2000. By that time, the respondent had served a little under one-third of the sentence. 5 The sentence passed was the longest that the law permits to be the subject of an order that it be served by way of periodic detention (Crimes (Sentencing Procedure) Act 1999, s.6). 6 The notice of appeal asserts as the ground of appeal that the sentence "is inadequate". By this ground, I understand that it is intended to assert "error in point of principle" (see per Barwick, CJ. in Griffiths v. The Queen (1977) 137 CLR 293 at 310) as would amount to "the kind of manifest inadequacy or inconsistency in sentencing standards" (Everett v. The Queen (1994) 181 CLR 295 at 300 and Regina v. Barbara (CCA, unreported 24 February 1997)) as would warrant the exercise of the exceptional power vested in the Director by s.5D by appealing to invoke the court's function to lay down principles for the governance and guidance of sentencing courts in such circumstances as applied in this case (Griffiths (supra) at 310). That kind of error would be found in the course taken by the primary judge in consequence of such findings of fact as were properly open and made. The appeal does not call for any re-hearing to re-determine findings open on the facts: Histollo Pty. Limited v. Director-General of National Parks & Wildlife Service (CCA, unreported 10 December 1998). The appeal is against the exercise of a discretion which recognises that a range of sentences might be appropriate in any case and that judges might legitimately differ in philosophy, approach and result: see Spigelman, CJ. in Regina v. Jurisic (1998) 45 NSWLR 209 and Kirby, P. in Regina v. Hayes (1987) 29 A. Crim. R. 452. 7 I understand the ground to assert not merely that there has been disclosed some error of principle such that the sentencing discretion has been improperly exercised even though that error might not be able to be identified (see Cranssen v. The King (1936) 55 CLR 509 at 519-520), but that the error contended for is such as to show that the sentence in its duration or nature is so far outside the permissible range of the exercise of a proper discretion as to require the intervention by this court, at least in the absence of matters going to the exercise of the court's well known discretion to refrain from intervening (see, eg., Regina v. Morrow [1999] NSWCCA 64; Regina v. Holder (1983) 3 NSWLR 245 at 225-226; Hayes (supra); Regina v. Allpass (1994) 72 A. Crim. R. 561; Regina v. Haughton [2000] NSWCCA 62; Regina v. Kalache [2000] NSWCCA 2). 8 On an appeal such as this, the court, in its discretion, may dismiss the appeal and, if upholding it, would ordinarily impose a sentence which might be at the bottom of the range or less than that which ought to have been imposed at first instance: see Kalache (supra); Regina v. Webster [1999] NSWCCA 313, provided that, having regard to the necessity to denounce the error, the discretion and the other matters to be taken into account on re-sentencing, it might properly do so. 9 In considering the exercise of those discretions, it is necessary to have regard to other matters such as the double jeopardy in which the respondent has been placed (Holder (supra); Regina v. Warfield (1994) 34 NSWLR 2000); any delay in instituting the appeal; the extent to which the sentence imposed below has been served (Regina v. Morris (CCA, unreported 10 March 1989)); the extent of error detected in the original sentence and whether, if that sentence did not involve full-time custody, a re-sentencing to full-time custody is now appropriate (Allpass (supra)). 10 In Haughton (supra), Barr, J., with whom Fitzgerald, JA. and Abadee, J. agreed, referred to one circumstance which might call for the exercise of the discretion not to intervene:- "When this court hears an appeal by the Crown against what is said to be the severity of sentences, the court is not free to take the course it might if sentencing at first instance. A residual discretion exists which favours the respondent to any such appeal if the sentence is found to be below the range of sentencing discretion, but not so far below it that the court considers that it ought not to interfere." 11 Further to what Barr, J. has noted in Haughton (supra), an occasion for the exercise of discretion in particular arises where error is detected in that a sentence is below the range of a proper sentencing discretion, but where the sentence which might be imposed on appeal, having regard, in particular, to those matters appropriate to be considered by the appellate court and the necessity to denounce error in the original sentence, would involve only a limited increase or limited change in the nature of the sentence but which would have a disproportionately onerous effect in the individual circumstances of the respondent. 12 Crown appeals exist for the correction of errors having general effects (see Everett (supra) and Griffiths (supra)). It follows, since the imposition of sentence is individual in effect, that the correction of such errors of general significance will have a specific impact on the respondent. Insofar, however, as the error proceeds from a failure in the sentencing process below and because its correction may have an impact, in the circumstances, of a particularly onerous kind, provided that the error may be properly corrected and the original criminal conduct as well as the leniency with which it has been treated properly denounced, then it is open to the court to avoid occasioning, by the re-sentencing process, consequences which in their effect would be unduly onerous. This is since the necessity to re-sentence is due to the judicial error, a failure in the process, rather than to any fault of the respondent and, in particular, so as to avoid that failure producing untoward hardship. 13 There was admitted in evidence on the appeal the affidavit of Mr. Taylor, the solicitor for the respondent. On the issue of discretion, it provided evidence that the respondent had been serving the sentence satisfactorily. For the purpose of any re-sentencing, it also provides evidence of the respondent's present particular health problems. 14 I turn to the particular facts of the appeal. 15 It appears from her Honour's remarks that she concluded that the offence had occurred on 27 January 1997 at about 11.30 pm (although there was a degree of uncertainty as to the circumstances in which the offence was committed) and was committed in an opportunistic exploitation of a robbery to which the respondent was not party. An acquaintance of the respondent, Mr. George Wright, had approached the respondent, the manager of the Blue Cattle Dog Tavern at St. Clair, seeking his participation in a hold-up at the Tavern. The respondent, when first approached, said he was not interested. His response was both in the negative and with shock. He revealed to a Ms. Gallagher, that he had been approached to this effect by Mr. Wright. Subsequently, on the evening of 27 January, he recognised Mr. Wright in the hotel and apparently realised that a robbery was about to occur some minutes before that offence occurred. Mr. Wright, with a shotgun, directed the respondent and other employees of the hotel into the hotel office where Mr. Wright removed a sum of money from the safe in the order of $20,000. Subsequently, Mr. Wright provided some $5,000 from those monies to the respondent. 16 The respondent was, on that evening, the most senior person in attendance at the hotel and in the ordinary course of events was the third most senior person in the management of the hotel: he was the manager of the bar. 17 Her Honour found that, at close of business on the evening before the robbery, there was a sum of some $50,000 odd in the hotel safe; that Mr. Wright was able to rob the premises of some $20,000; and that the respondent, although there was a degree of uncertainly as to the basis on which the jury reached its conclusion, had, in what her Honour described as "an essentially opportunistic exercise", under cover of the activities of Mr. Wright, removed from the safe a sum of some $30,000. Thus the respondent dishonestly obtained a total sum of some $35,000 of his employer's money. 18 Her Honour found that the respondent was, at the time, occupying a position of trust which he had egregiously abused; that in his maintenance of his innocence of the charge, he had displayed a lack of insight such that there was no mitigation by way of contrition available to him. 19 The sentencing judge correctly identified the facts as relevant to the charge of larceny as a servant, appropriately distinguishing those facts from the facts applicable to the robbery. This was necessary as the respondent had not been charged for any complicity in or as accessory after the armed robbery, nor with any offence involving the use of the firearm, nor with any offence against public justice, for example, seeking to divert the police investigation from his own activities. Her Honour held that, although his activities were opportunistic and not aggravated by any planning for the robbery, there was, however, a degree of planning for his own activities apparent from his seizing the chance to remove the money before the robber's appearance on the scene. 20 She had regard to both the evidence of the respondent's good character and good repute as of direct relevance to her assessment of the opportunistic nature of the offence. She also had regard to his prior offences for dishonesty in 1982, 1966 and 1964, treating the first as "not necessarily a feature of aggravation in this context". The respondent explained and her Honour apparently accepted the 1982 offence was committed at a time at which the respondent was responsible as a sole parent for the welfare of four children whilst under considerable financial pressure and the offences involved the stealing of groceries to feed his children. 21 Since the offences of 1966 and 1964, had occurred some 30 years prior, her Honour reached the view that it was inappropriate to have regard to them. 22 Her Honour made no finding concerning any restitution nor was there any evidence before her or this court either way concerning that matter. 23 Her Honour concluded that:- "The Crown puts before me that this is an offence for which the appropriate sentence is full-time imprisonment. That would be the case if there were any of the elements of the aggravation of the nature of the offence such as attended the offence with which Mr. Wright was charged. It seems to me there are differences in the nature of the charges and of the circumstances; and that it would be inappropriate to have regard to any element of use of weaponry or placing of others in fear such as attended upon Mr. Wright's offence. The appropriate sentence is, therefore, one of imprisonment to be served by way of periodic detention." 24 She invited any submission from counsel on that issue and the Crown's submission was as follows:- "Your Honour, the Crown's position is still one of full-time imprisonment and the arguments about law and reform and also periodic detention does have a strong element of leniency built into it. I just stand by my earlier submissions in relation to that. I cannot take it any further. I will not engage in terms, your Honour. I will not engage in that." 25 Counsel for the respondent submitted that such a sentence was overly severe. 26 Her Honour, in response to that, expressed her view that it seemed to her that this offence was "at the extreme end of the breach of trust" and thus required a significant sentence. 27 As to the breach of trust, it seems on a reading of her remarks her Honour may not only have had regard to the breaches of trust involved in taking advantage of the criminal activities of another and in stealing from the employer (this latter was, of course, the very core of the offence with which he was charged), but also to the respondent's failure to protect his employer's interests by failing to reveal the intended robbery beforehand, later, the involvement of the robber and in failing afterwards to inform the police of the true position. No complaint is made here that it was wrong of her to so proceed. 28 At the time of the offence the respondent was 57 years of age, having raised the four children to whom I have referred. 29 A pre-sentence report tendered before her Honour on sentence showed that he had a strong relationship with his family and was a devoted family man. He was, at the time of sentence, self-employed, having lost his job, not surprisingly, as a hotel manager at the time of the offence. He had re-financed his house loan in order to obtain a courier van to start the business he was operating and appeared suitable for a community service work order or periodic detention. 30 In the written submissions filed on behalf of the Crown, it was contended that her Honour had fallen into error in the manner in which she treated the prior convictions of the respondent (see Regina v. Macdonald (CCA, unreported 12 October 1998). It was contended that those matters required her Honour to treat this offence as not an "uncharacteristic aberration" (Veen v. The Queen (No. 2) (1988-89) 164 CLR 465 at 477). 31 It was further submitted that the effect of the prior convictions was either to negate the evidence of good character or that that evidence of good character and the history of prior employment were such as to have, either because of the prior convictions or the nature of the crime, very much reduced significance. 32 Her Honour did not treat the prior offences as indicating a basis for depriving the respondent of leniency or as requiring a longer sentence or one of a different nature be imposed for the protection of the community. She did not find that he should receive leniency as might have been afforded to a person whose good character was not so marred. She did not expressly afford the good character reduced weight in the context of an offence of this general nature but her entire approach to this question was in the context of a discussion of character and prior offences as relating to any aggravation of the crime. She had earlier, when discussing the respondent's maintaining his innocence, held that there was, in the circumstances, nothing by way of mitigation. I would not regard her Honour's treatment of this matter as inappropriate so as to attract intervention. 33 The more substantial criticism advanced is not so much concerned with the sentence of imprisonment and its duration but with the order that it be served by way of periodic detention. 34 A sentence of imprisonment to be served by way of periodic detention contains in-built leniency: Regina v. Duraux (CCA, unreported 11 April 1991) and is outwardly less severe in its denunciation of the offence: Regina v. Pangallo (CCA, unreported 20 February 1992); Regina v. Hallocoglu (1992) 29 NSWLR 67, although it remains a salutary form of punishment: Regina v. Burnett & Ors (1996) 85 A. Crim. R. 76. See also The Queen v. O'Keefe (1992) 60 A. Crim. R. 201. It is a sentence nominally of full-time imprisonment for the whole of its duration but to be served periodically. It is of greater severity than the recently re-introduced suspended sentence. The availability of that latter form of sentence may make the observations of the High Court in Regina v. Shrestha (1991) 173 CLR 48 to which I referred in Webster (supra) and which suggested that in an appropriate case considerations of mitigation or rehabilitation may make full-time custodial imprisonment unnecessary or even undesirable now applicable to the New South Wales sentencing regime. 35 It may be that the degree of comparative leniency involved in such a sentence may require re-consideration for that reason and also because of changes in executive policy as to how such a sentence is served from time to time (see the matters discussed by Hunt, CJ. at CL. in Hallocoglou (supra) and Barbara (supra) and the observations of Spigelman, CJ. in Jurisic (supra) at 214-25 concerning periodic detention, full-time imprisonment and home detention). 36 It was submitted on behalf of the Crown that her Honour erred in failing to give adequate regard to the principle of general deterrence, citing remarks of Gleeson, CJ. in Regina v. El Rashid (CCA, unreported 7 April 1995):- "Considerations of general deterrence are of particular importance in sentencing from crimes of this nature. Such crimes frequently involve … a serious breach of trust. Such breaches of trust are usually only able to be committed because of the previous good character of the person who has been placed in a position of trust." 37 Both in El Rashid (supra) and in Regina v. Pantano (1990) 49 A. Crim. R. 328, reference was made to the principles to be applied when sentencing for white collar crime. In Pantano (supra) it was said:- "Those involved in serious white collar crime must expect condign sentences. General deterrence is an important element of sentencing for such offences." 38 In El Rashid (supra), the Chief Justice referred to a number of cases in which in recent years the court discussed the principles to be applied in sentencing for white collar crimes, referring to Regina v. Corbett (1991) 52 A. Crim. R. 112, in which case reference was made to a number of comparable sentences. It is, however, notable that all of El Rashid (supra), Regina v. Kermali (CCA, unreported 6 July 1994) and Regina v. Mille (CCA, unreported 1 May 1998), were cases which referred to a multiplicity of offences committed over a period of time for substantial sums of money in circumstances of some degree of sophistication. It is notable that the court in Mille (supra) distinguished from the circumstances there applicable the remarks of Kirby, P. in The Queen v. Chaloner (1990) 49 A. Crim. R. 370 and in doing so, stressed the distinction between offences of the kind being considered in Mille and an offence committed on impulse. 39 In Mille (supra), the court held:- "It is the case that persons involved in serious crimes, particularly stealing from their employers, must expect condign sentences. See Regina v. Halabi (CCA, unreported 17 February 1992) and The Queen v. Pantano (1990) 49 A. Crim. R. 328." 40 Halabi (supra), again, was a case involving a substantial sum and a crime committed with some sophistication. 41 Similarly, the matter of Regina v. Jalalaty (CCA, unreported 2 April 1997), related to the sentencing for over 30 offences committed over a lengthy period of time involving a level of planning and deception such as to raise the criminality of the offences to such a degree that the imposition of a custodial sentence such as was imposed was not outside the proper sentencing discretion. Other cases cited in relation to the relevance of the amount of money taken were not at all apposite in that reference was made, for instance, to Regina v. Hawkins (1989) 45 A. Crim. R. 430 involving a lengthy sentence on a professional for defrauding persons of monies in excess of $6.6 million over a period of some three and a half years. It is notorious that severe sentences have been passed and upheld as appropriate for solicitors, accountants and company directors dishonestly stealing or committing fraud particularly of large sums, by numerous dishonest acts or using sophisticated schemes. 42 In response, however, it was contended on behalf of the respondent that a principle that offences of dishonesty involving breach of trust would ordinarily attract a full-time custodial sentence, even where large sums and high trust are involved, was qualified to those cases where the breaches of trust involved planning, premeditation and some degree of sophistication. 43 In considering what her Honour had said as to the appropriate sentence having been full-time imprisonment if there had been any of the elements of aggravation (see the passage cited at para.19 above in which, however, her Honour may be referring to aggravation by involvement in the robbery), the submission was put that, in the light of the opportunism and the absence of the aggravating circumstances to which her Honour refers, the present sentence was appropriate. But it was conceded, on the authorities in this court, that where there are breaches of trust by employees, particularly involving large or substantial sums, involving systematic dishonesty attended by planning and some sophistication, general deterrence requires at least usually or in the absence of special features, that there be substantial sentences of imprisonment. 44 It was put that breach of trust, planning and repetition are key features of aggravation. In that regard, Regina v. Phelan (1993) 66 A. Crim. R. 446 was cited as was O'Keefe (supra) where the Court of Criminal Appeal referred to the court's duty to seek, by the penalties it imposes, the deterrence of others who might be tempted to commit such offences. There, the court held that in cases of dishonesty over a period of time involving substantial sums of money and multiple offences, the consideration of general deterrence looms large. It referred to Regina v. Glenister (1980) 2 NSWLR 597; Regina v. Falzon (CCA, unreported 20 February 1992); Regina v. McKechnie (CCA, unreported 1 October 1987) and Regina v. Debroun (CCA, unreported 12 December 1991) as illustrating a long line of decisions given in the court concerning the appropriate level of penalty for white collar crime. In the judgment of Lee, AJ. in O'Keefe (supra) appears the following:- "It is of the utmost importance that employers carrying on business and entrusting members of their staff with control of monies as must be done, should be entitled to maximum honesty in that activity and the courts play an important role and must play an important role in imposing sentences in cases of this nature which are often called white collar crimes - which will operate effectively as a deterrent to others like-minded, particularly when the monies are taken, as here, for the purpose of maintaining a lifestyle which the offender considers should be maintained. One recognises that in many cases where that occurs, the offender is concerned not so much in respect of her own lifestyle, but the lifestyle of her children or often her husband but where it is done for that purpose, that cannot be put forward as any matter entitling significant leniency." 45 However, an examination of the sentencing statistics in respect of the crime of larceny by a servant for the past 10 years, indicates that imprisonment is imposed in less than one third of cases on individuals sentenced for one offence. Similarly, for the offence of embezzlement by clerks or servants. There does not appear to be discrimination between different categories of white collar crime. 46 Some discrimination is, however, to be detected. In a number of cases in which professional persons have committed offences of dishonesty involving substantial amounts, sentences of substantial imprisonment have been imposed. In such cases as The Queen v. Smith [2000] NSWCCA 140 (in which the court reviewed a number of other decisions, some of which themselves reviewed a number of earlier cases) the court sought to define an applicable principle. 47 By reference to those cases and such cases as Hawkins (supra) and Regina v. Cole (CCA, unreported 10 May 1974), the court concluded that persons (eg. solicitors) placed in a special position of trust by the law and the community who abuse that trust by dishonesty, call their profession into question and merit sentences calculated to ensure that other professional persons will be left in no doubt as to the serious consequences that will follow. 48 In Regina v. Kelvin [2000] NSWCCA 190 in respect of a sentence imposed upon an accountant that stood in a position of trust, not only in relation to his clients, but also to the Australian Tax Office, the court referred to such cases involving a breach of a position of trust as Regina v. Nguyen & Phan (1996) 86 A. Crim. R. 521 and reviewed a number of decisions in this court including that of Director of Public Prosecutions v. Hammond (CCA, unreported 1 December 1998) (a barrister) concluding that in respect of sentences for offences of defrauding the revenue, general deterrence is a predominant consideration. 49 In Regina v. Boland (CCA, unreported 13 October 1998), it was said, in the context of the sentencing of a solicitor on one count of fraudulent misappropriation of an amount of $48,759.08, in respect of the submission that the sentencing judge erroneously concluded that there was no option but to impose a sentence of full-time imprisonment, that the following remarks of the trial judge represented the correct principle:- "It is clear that breaches of trust of the nature that you have committed as solicitor inevitably demand punishment by way of full-time custody except in the most unusual of circumstances. Solicitors stand in a position of trust and responsibility to their clients and the public and it is essential that serious breaches of trust be treated as grave criminal activity." 50 In this context, Stein, JA. went on to say:- "It is trite that there is no rule that in all cases of serious white collar crime a sentence other than a full-time custodian one is inapposite - see, for example, Hunt, CJ. at CL. in Regina v. James Brown (CCA, unreported 1 August 1994). In the appeal of Regina v. Chaloner (1990) 49 A. Crim. R. 370, the court considered the issue. Kirby, P. had some important matters to state in relation to the issue with which the court is now faced. He said:- 'Whilst custodial sentences are normally to be imposed in circumstances such as the present, it is equally the duty of the judge to consider whether, in the special circumstances of the case, some features of the case warrant a non-custodial sentence. The deprivation of liberty is always a serious matter. Whether it is required in the particular case must always be considered. Normal rules, statutory authority apart, cannot be ossified into an inflexible requirement. The sentence discretion remained to be exercised in each case (at 375).' It is also clear that in cases of the nature now before the court, involving a breach of trust by a solicitor, or for that matter another professional person standing in a similar position of trust, a full-time custodial sentence will be imposed except in cases involving some special or unusual feature or circumstances - see, for example, Regina v. Pantano (1990) 49 A. Crim. R. 328; Regina v. Halabi (CCA, unreported 17 February 1992); and Regina v. Law (CCA, unreported 7 October 1993)." 51 In Regina v. Houlton [2000] NSWCCA 183, on an appeal under s.5D of the Criminal Appeal Act 1912 by the Director of Public Prosecutions, a special bench of five judges of this court sat, the Chief Justice presiding. The judgment of the court was delivered by Foster, AJA. The respondent was a solicitor who had pleaded guilty to five counts of fraudulent misappropriation and had asked that a further 80 offences under the same section by taken into account. All told, there were defalcations of approximately $347,000 made between August 1989 and October 1992. The trial judge had imposed a sentence of three years' imprisonment to be served by way of periodic detention and for other counts had deferred passing sentence under s.558 of the Crimes Act 1900 upon the respondent entering into a recognizance. 52 Foster, AJA. noted that the trial judge had referred to the remarks of Sully, J. in Regina v. Marvin (CCA, unreported 1 November 1995) concerning the offender in such circumstances betraying public trust and confidence and coming forward for sentence for a crime meriting in any but the most exceptional cases, a custodial sentence. He noted that the trial judge had referred to the special need for general deterrence and that there be a public warning to ensure that those entrusted with funds in the community will be warned by the harsh penalties imposed not to breach that trust. 53 His Honour referred to the circumstances of certain of the matters put forward on the prisoner's behalf as affording no justification for departure from "the general principle requiring the imposition of a custodial sentence". 54 The Crown appeal was dismissed but only having regard to circumstances particular and personal to that respondent. 55 The principles apply to professionals because the breach of trust abuses the special status they have and affects public confidence in all of their colleagues. Their crime undermines the institution of which they are members. 56 In a series of like cases, not however dealing with professionals, but involving ongoing sophisticated, systematic fraud, including of the revenue or of Commonwealth benefits, the principle has been somewhat differently expressed: eg. Regina v. Giallussi [1999] NSWCCA 56 "A number of decisions of the Court of Criminal Appeal have indicated that for offences of the type here involved, a full-time custodial sentence should be imposed unless there are special circumstances. See, for example, Regina v. Boian & Carter (CCA, unreported 10 October 1997); Regina v. Sopher (CCA, unreported 17 December 1993); Regina v. Purdon (CCA, unreported 27 March 1997); Regina v. Luu (CCA, unreported 7 December 1984. These cases stress the seriousness of such frauds and the need for sentences to incorporate elements of general deterrence." 57 Those cases would appear to involve another matter of gravity akin to that to which attention is given in social security cases, that the States' resources to provide the benefits are thereby reduced and the offence is thus of wider effect and more grave. Such offences have the broader social effect in common with those of professionals. 58 The position of senior company employees or directors being sentenced for fraud or the like merits examination. In Regina v. Scott (CCA, unreported 7 November 1991), dealing with a charge of accessory after fact to larceny by the applicant's wife, in the context of a senior employee but a very small amount of money, Kirby, P. (with whom Gleeson, CJ. at Campbell, J. agreed) said:- "The starting point for the consideration of this submission is the recognition that the maximum penalty allowed by Parliament upon conviction under s.350 of the Crimes Act 1900 is five years penal servitude. The jury's verdict indicated acceptance that a serious crime by a person of seniority within the employment of the company had occurred. In him, Pain, DCJ. observed, the company had placed a high degree of trust. The courts have said on many occasions that sentencing persons convicted of offences as an employee to a custodial sentence will often be necessary because of the principle of general deterrence and in order to mark the court's disapproval of the abuse of a position of trust and responsibility. Often crimes by company employees are difficult to detect. Nowhere is this more so today than in cases where the records exist, wholly or in part, in computer systems. In the present case, having regard to the Crown's concession at the trial, it should not be assumed for the purpose of sentencing that the applicant did manipulate the computer record to disguise the theft of his wife. However, his position of seniority in the company made it so much easier for him to cover her tracks and to discourage scrutiny and detection of the actions of a subordinate such as his wife. It is because of the obligation to uphold the trust of employers in their employees and to deter breaches of such trust by senior employees that the courts frequently, and properly, respond to offences such as the present with the imposition of a custodial sentence. Clearly, the order that the sentence be served by periodic detention in this case mitigated its impact somewhat. Nevertheless, it remained a very serious punishment, reserved to the proper case." 59 In Regina v. Houghton (supra), Barr, J. (with whom Fitzgerald, JA. and Abadee, J. agreed) reviewed a number of recent cases of sentences imposed for offences of a similar kind to that with which that respondent had been charged, that is, fraudulently applying company property whilst being a director. Those cases included Regina v. Ngui (CCA, unreported 23 August 1990); Regina v. O'Neil (CCA, unreported 24 July 1996); Regina v. Egerton (CCA, unreported 8 August 1997), noting that there were many separate gross breaches of trust carried out systematically over a period of three and a half years involving a very large sum of money and deceptive tactics to cover up the crimes and that the money was lost, the respondent being motivated by greed, his Honour said:- "Sentences imposed for offences involving such serious and persistent breaches of trust must be sufficient to deter others from offending, not least because they are so difficult to detect." 60 The learned trial judge had sentenced the respondent to 26 concurrent terms each of two years' imprisonment, comprising a minimum term of 18 months and an additional term of six months. 61 Here too, the effect may be more serious as falling on a wide group of investors or creditors. 62 The position is not so clear when dealing with less senior employees, lesser amounts, few dishonest acts, lack of planning or sophistication. This phenomenon seems to underlie the wide range of sentences shown in New South Wales statistics. 63 Despite the differences in sentencing regimes, it is worthwhile to consider the approach taken elsewhere. In Queensland, in Regina v. Cox (1995) 85 A. Crim. R. 1, in respect of an offender who had pleaded guilty to one count of misappropriation as an employee of property of value in excess of $5,000, it was noted by Pincus, JA. that recent sentences imposed in the District Court in that State in such circumstances appeared to be nearly always non-custodial, but that there were decisions including Regina v. Seeney (Queensland CCA, unreported 11 August 1988) which would appear to support the sentence that had been passed. 64 Lee, J. asserted that persons who commit offences of this type, particularly those in a position of trust and responsibility, cannot expect that, if apprehended, the sentence imposed will always be of a non-custodial nature but that the circumstances of each case and of the offender must be taken into account. 65 Their Honours made these observations in the context of consideration of a schedule of sentences imposed at first instance for misappropriation or stealing as a servant. 66 In Victoria in The Queen v. Hoppner (CCA, unreported 7 October 1980), a court comprising Young, CJ., McGarvey and McInerney, JJ. dismissed an appeal in respect of a 12 month sentence of imprisonment with a six month non-parole period after a plea of guilty to one count of theft of some $3,213 by an employee with previous record of dishonesty in a position of trust as an assistant manager. The sentence was expressed to be one which was within the ambit of discretion of the sentencing judge having regard to the offence having been committed by an employee placed in a position of trust who had abused the trust confided in him by his employer. 67 "In Sentencing - State and Federal Law in Victoria" (2nd Ed) by Fox and Fryburg, the learned authors, in a detailed analysis of the sentences on indictment for specific instances of theft in Victoria note that such sentences rarely exceed three years and then usually because of the value of the property and the offender's prior record and that such custodial sentences are imposed upon persons often of middle age, of good character with no prior convictions but who have stolen over a lengthy period of time very large amounts of money and who have been charged with a number of offences. 68 They note that in that State, sentences in the mid-range one to two years, are imposed on persons in positions of trust although the amount taken is relatively small. Often, those sentences are suspended or offences of that kind punished by a substantial fine in addition to a shorter term of imprisonment. 69 In her analysis of the sentences of imprisonment in such circumstances in Tasmania, Kate Warner, in her text "Sentencing in Tasmania" (Federation Press 1990), p. 374, observes that sentences of imprisonment are almost invariably imposed when stealing from employer offences are prosecuted on indictment and that such sentences ranged in duration from two months to eight years with a median of 12 months. She says:- "In assessing the severity of the conduct, the amount of money or value of the property, the number of transactions involved, the length of time over which the dishonest behaviour continued and the amount of restitution are important considerations. The degree of trust given to the defendant is a particularly important factor so that cases of employment in a position of financial trust are more seriously regarded than cases of employees who are not so employed but steal in the course of their employment. In cases of abuse of a position of trust, good character and an absence of prior convictions are typical and have little weight because of the expressed need for a general deterrent sentence." 70 Elsewhere (at p.375) she notes that the data for the period studied (1983-1989) showed clearly that only in exceptional cases of theft by an employee in a position of trust will a prison sentence be avoided and that it was rare that non-custodial options or suspended sentences were imposed. 71 In Canada, the position appears to be as follows:- "Theft by persons occupying a position of trust are considered as a special category for sentencing purposes. Most convicted in such circumstances have no prior record and many come from a 'good' background, replete with family, education and community ties. Factors most often taken into consideration are the value of the theft, the amount (if any) repaid, whether the accused profited directly from the enterprise, the length of time over which the operation took place and the nature of the theft (ie., the degree of planning and sophistication). The sentencing principle dominating consideration in these cases is general deterrence. In recognition of this (absent exceptional circumstances), a period of incarceration is almost invariably given. There is no rule, however, that merely because the theft is from an employer a period of incarceration is required. The range of sentence generally appears to be one to seven years. (Clayton C. Ruby, "Sentencing", (3rd ed.) Butterworths) 72 D.A. Thomas in "Principles of Sentencing" (2nd ed.) p.152 refers to the offsetting of the substantial mitigation involved where, as a consequence of such offences, a man of good character may stand to lose his career, pension, rights and possibly his home as a result of his conviction against the aggravating effect of the abuse of trust which the offence constitutes. He refers to the pronouncements by courts that "others faced with a similar temptation must … be fortified by knowing that the penalty for committing a breach of trust is bound to be … a sentence of substantial duration" with reference at least to offences involving the misappropriation over a period of time of some thousands of pounds: see Regina v. Hunter (CCA, unreported 18 November 1976). He refers by way of illustration to cases in which immediate imprisonment for systematic breach of trust has been upheld. 73 Recently in the United Kingdom in Regina v. Barrick (3 May 1985), a court presided over by the Lord Chief Justice, gave detailed guidelines for sentencing in cases of theft in breach of trust by employees and professional persons. The appellant had been convicted of four counts of false accounting, four counts of obtaining by deception and two counts of theft. He had, over a period of time, stolen a total of at least 9,000 pounds and had been sentenced to two years' imprisonment. His Honour noted that there had been some divergence of opinion as to the proper sentence to be passed in respect of certain types of theft and fraud and that there should be no distinction on that ground alone between solicitors and other professional men, on the one hand, and others following an occupation which placed them in a position of trust. He concluded that (at 146):- "In general, a term of immediate imprisonment is inevitable, save in very exceptional circumstances or where the amount of money obtained is small. Despite the great punishment that offenders of this sort bring upon themselves, the court should nevertheless pass a sufficiently substantial term of imprisonment to mark publicly the gravity of the offence. The sum involved is obviously not the only factor to be considered, but it may in many cases provide a useful guide." 74 His Honour's judgment continued:- "The following are some of the matters to which the court will no doubt wish to pay regard in determining what the proper level of sentence should be: (i) the quality and degree of trust reposed in the offender including his rank; (ii) the period over which the fraud or the thefts had been perpetrated; (iii) the use to which the money or property taken was put; (iv) the effect on the victim; (v) the impact of the offences on the public and public confidence; (vi) the effect on fellow employees or partners; (vii) the effect on the offender himself; (viii) his own history; and (ix) those matters of mitigation special to the offender, such as illness, being placed under great strain by excessive responsibility or the like, where, as sometimes happened, there had been a long delay, say, over two years, between his being confronted with his dishonesty and the start of his trial and any help given by him to the police." 75 The consideration of those criteria would be made having regard in the instant case to the precise offence charged, its elements and the applicable statutory maximum (as they may differ dramatically) from case to case. 76 I have, in this survey, admittedly by looking at examples rather than seeking to make an exhaustive analysis, sought to discern whether there is or should be some such principle as would normally, or in the absence of exceptional features, require sentences of full-time custodial imprisonment to be passed in cases of single offence, breach of trust, employee dishonesty, albeit involving a substantial but not enormous sum. Whilst it seems clear that there is such a principle as would require imprisonment in the absence of exceptional circumstances of defalcating professionals or others, eg., company directors, whose crimes are of considerable extent and wide effect, I am unable to conclude that there is a useful statement of such a principle of general applicability in cases where persons are in a position of trust, the position of trust arising out of an employer/employee relationship. Expressions of the necessity for general deterrence and condign punishment are of limited utility to define the appropriate nature of the sanction to be employed in such circumstances. It may well be that this is the sort of case which draws attention to the prospect of this court providing a guideline judgment for such matters. 77 In this case then, for the reasons I have given, I am unpersuaded that her Honour fell into appellable error by failing to accord proper recognition to some general principle which would have required full-time imprisonment. 78 I turn to the objective circumstances of this particular case. Having regard to the severe breach of trust involved, particularly in the context of the utilisation of another's gross criminality against a victim to whom the applicant had, by reason of his employment, special duty, her Honour's reaction to this offence as one being "at the extreme end of the breach of trust" was entirely appropriate. In many ways so to breach trust and to take advantage of another's criminality in this way is worse than simply stealing from an employer under guise of some ineffective accounting or security system. It can be said that this is much more serious than having one's hand in the till. 79 Notwithstanding the subjective matters to which her Honour referred, I consider that her sentence was in error, particularly as it was directed to have been served by way of periodic detention. Indeed, I consider that the sentence, in duration and because of that direction, was impermissibly lenient and so disproportionate to the objective culpability as to show error of the kind that, absent the exercise of the discretion to which I referred at the commencement of this judgment, would require the intervention of this court in the exercise of the corrective function I have earlier referred to. 80 The sentence, however, has, to a great extent, as I have pointed out, been served since, by reason of the direction it be served by way of periodic detention, the attendances of the respondent for the custodial periods of the sentence satisfies the requirements of the legislation and amounts to service of the term of the sentence. 81 Were the applicant to be re-sentenced, it would be necessary to have regard to the legislation's effect that the period during which the applicant has attended periodically should be considered as serving the sentence. That is not to say that credit to the full extent of the duration involved would necessarily be given to the applicant if the applicant were now sentenced to full-time custody. But a substantial allowance would have to be made in respect of the period taken to be served by reason of the applicant having attended periodically as required by the original sentence. A substituted sentence of substantial duration of full-time imprisonment on top of what has been served would have a drastic impact. 82 Further, on a re-sentencing it would not simply be a matter of setting aside the direction for periodic detention leaving a sentence of three years fixed term. It would be necessary for the court to readjust the duration and make up of the sentence and to consider the imposition of a non-parole period. It would be appropriate, particularly with the applicant having apparently responded to periodic imprisonment and on the additional evidence of the applicant's particular health problems, that the applicant receive the benefit of a parole period. 83 Having regard to those matters and those I have earlier referred to concerning what course the court might take on allowing a Crown appeal, it would seem that any full-time custodial sentence would contain a period of actual custody which would be unlikely to be much in excess of the period taken to be served so far. I consider these matters have such effect that in this most exceptional case, the court should, in discretion, refrain from intervening, notwithstanding the cynical behaviour in breach of trust of the respondent. It may have been, had the Crown brought the matter on for hearing earlier, that a different course would have been taken. 84 In all the circumstances, however, I conclude that the appeal should be dismissed. **********

At a glance

Court

Decision date

Before

Source

Judgment (10 paragraphs)

Cases Cited (18)

Cited By (14)