Supreme Court of SA|1994-04-20|Before: Matheson J

SA POLICE v JULIE DAWN ASHDOWN No. SCCRM 93/1654 Judgment No. 4488 Number of pages - 12 Criminal law and procedure - sentence (1994) 72 A Crim R 63 [1994] SASC 4488 (20 April 1994)

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA COURT OF CRIMINAL APPEAL MATHESON(1), PRIOR(2) AND OLSSON(3) JJ

CWDS Criminal law and procedure - Sentence of imprisonment for six years suspended for one count of falsification of accounts and twenty-eight counts of fraudulent conversion - no non-parole period fixed - offences committed over twelve month period - $178,000 outstanding and no prospects of restitution - gross breach of trust - decision to suspend wrong in all the circumstances

Solicitors for respondent: David Stokes and Associates

JUDGE1 MATHESON J The respondent was employed by Thomson Simmons and Co., Solicitors, as an executive secretary to Mr David Simmons from 17 April, 1990 until 9 September, 1991. On the latter date she confessed to Mr Simmons that for a period of twelve months she had defrauded him of a very substantial sum of money, which upon investigation by his accountant turned out to be approximately $190,000. Her crimes had been committed to feed her addiction to compulsive gambling. She subsequently pleaded guilty in the Magistrates Court to one count of falsification of accounts and twenty-eight counts of fraudulent conversion. She was convicted by Mr K C Rogers SM, who invoked his powers under s.18a of the Criminal Law (Sentencing) Act, and imposed one penalty, namely imprisonment for six years. His Honour suspended the sentence upon the respondent entering into a bond in the sum of $500 to be of good behaviour for three years. He added: "Conditions of the bond shall be that you obey the directions of your Community Service Officer, report within two working days to the Community Service Centre at 81 Flinders Street, Adelaide and perform 320 hours community service within 12 months. A further condition of the bond

shall be that you are not to enter the Casino during the currency of the bond, not take part in any activity whereby principally any reward is gained by chance, rather than by skill, except any raffle or similar activity where the expenditure is small and the benefits are to a charitable organisation, or an organisation principally operated by volunteers."

His Honour did not fix a non parole period. In an affidavit filed herein, the respondent's counsel, Mr D F Stokes, deposed: "At the time of sentence I indicated to the learned Special Magistrate that he had not fixed a non-parole period and submitted he should do so. He indicated that he declined to do so on the basis that he did not anticipate it would ever be necessary to bring one into effect, but if it were to be necessary it would be more appropriate for a sentencing Magistrate on a future offence to fix such a term."

The prosecution has appealed to this Court pursuant to s.42(3) of the Magistrates Court Act 1991, and submits that his Honour erred in suspending the sentence and in failing to fix a non-parole period.

The respondent's modus operandi was clearly set out in the affidavit filed herein of Ms. Pamela Rogers, Assistant Police Prosecutor, and I think it is important to understand it. Ms. Rogers deposed: "She was answerable only to (Mr Simmons) and the Administrative Manager. Her duties related to the running of his business and office affairs including normal secretarial duties, organising his travelling and business appointments and his personal banking. Simmons states that his personal banking amounted to a number of cheque accounts and foreign money market deposit accounts. The first account is a family trust account in the name of Plancoet Pty Ltd with the State Bank of South Australia ... This account received regular income from his company and it was

from this account that monies were transferred into his other accounts. These included another State Bank of South Australia cheque account ... which was in the name of David Winston Simmons and a Westpac Banking Corporation cheque account ... which was in the name of David Winston and Simone Simmons. Simmons states that the defendant's duties in relation to his personal banking were to pay his personal creditors, to transfer funds from the Plancoet account to other accounts as he deemed, to maintain his cheque books and butts and to produce a monthly balance for all of his accounts. He states that he relied on these monthly balance sheets to instruct the defendant on transferring funds. He states that from mid-1991 he came under an intense workload

and would rarely if at all see the actual bank statements for each account. He became very reliant on the defendant to run both his business and personal affairs and had absolute trust in her handling of all his affairs. In relation to the actual cheques he states that the cheque books for Plancoet and his personal cheque account were kept in his office at 101 Pirie Street. In relation to the Westpac joint account with his wife he states that one cheque book was kept in his office and his wife maintained one from their home. It was the defendant's duty to write out the payee section and amount in relation to Simmons' creditors accounts and then present the cheque with the account to Simmons for signing. In relation to the cheques drawn on Plancoet it was her duty to follow his instructions as to how each cheque drawn on the account was to be divided up between his other accounts ... As a result of (of a review) by his accountant, Ian Elliss, (of) all his personal

banking accounts, (after the respondent's confession on 9 September, 1991) ... 28 cheques were discovered to have been fraudulently drawn on the 3 accounts, 13 cheques on Plancoet, 10 cheques on D W Simmons and 5 cheques on D W and S Simmons accounts. There were also a number of false entries discovered in the cheque books and papers belonging to him that were prepared by the defendant. Simmons can state that the signature on every cheque was his but he can remember that on occasions the defendant would present him with blank cheques when he was in a hurry or leaving the office or would slip a blank cheque along with pre-written ones that were accompanied with creditor's accounts with the excuse that she had not had the time to complete the account. He states that when he signed these cheques she was entrusted with the cheques to either pay his creditors, to transfer funds or on occasions to cash cheques for him and to return the proceeds to him. He states that the defendant was not entitled to receive the proceeds from any of these cheques. In relation to the payee section, amount section and cheque butt for the corresponding cheque he can state that the handwriting is that of the defendant. It was her duty to fill in the correct details of each cheque on the cheque butt. Simmons also states that until his accountant conducted an audit he was unaware of the true state of accounts as he had totally relied on the monthly balance sheets prepared by the defendant. He believed that his accounts were all within the limit set. He states that it was discovered that the monthly bank statement for Plancoet from May 1992 were held for collection by the defendant from the State Bank Pirie Street Branch. He states that he did not authorise her to do this. Further to this he states that it was discovered that on the 9th of June, 1992 the defendant forwarded a facsimile to the State Bank of South Australia requesting that 25,000 United States dollars be transferred from his foreign money market account to his State Bank personal cheque account. This facsimile

was signed by the defendant who had no authority to make this request ... Counts 2 to 14 refer to cheques drawn on Plancoet Pty Ltd, State Bank of South Australia account ... Counts 15 to 24 refer to cheques drawn on the State Bank account ... in the name of David Winston Simmons. Counts 25 to 29 refer to cheques drawn on the account of David Winston and Simone Simmons, account ... with the Westpac Banking Corporation ... Count l refers to the discrepancies that have been described throughout these counts with regards to the details of the cheques and the detail or lack of detail in cheque butts or missing cheque butts. The accountant can state that he has examined the monthly balance of accounts sheets drawn up by the defendant and can state that some of the balances for individual accounts differ markedly from the actual balances and that on a continuing basis the summaries were at a substantial variance to the actual account position and this variance increased over the period reviewed. He also discovered the

facsimile sent to the State Bank by the defendant requesting the transfer of 25,000 United States Dollars from the money

market deposit account to the personal cheque account held with the State Bank. He states that this transfer appears to have covered up for the large amounts of money that had been misappropriated."

In addition to the usual obstacles in the path of a prosecution appeal on penalty (see for example, R. v. Osenkowski (1982) 30 SASR 212; R. v. Drewitt (1983) 35 SASR 344 and Malvaso v. The Queen [1989] HCA 58; (1989) 168 CLR 227), the applicant has the further difficulty that here the sentence was suspended, but in that connection, I refer to the remarks of King CJ, (with whom Duggan and Debelle JJ agreed) in R. v. Taddeo Unrep.Jt.No.S4059. When delivering the decision of the Court of Criminal Appeal, admittedly in considering a different charge, his Honour said at pp. 3-4: "I must say that it seems to me that suspension is a quite inappropriate order to make in a case of possession of cannabis for sale committed against a background of substantial involvement in cannabis trading. If I had been the sentencing judge I would certainly have declined to

suspend the sentence. Moreover, it seems to me that the expressed ground for the suspension of the sentence are so inadequate that it must be said that the sentencing discretion has miscarried. My only cause for hesitation in the present case is the fact that it is an appeal by the prosecution and on the well-known principles affecting prosecution appeals this court has to look very carefully at the matter before reversing a decision of a sentencing judge in a way which would increase the penalty upon the offender. That is particularly so where there has been a suspension of the sentence and the offender has been told by the court that he will not have to serve the sentence if he obeys the bond. Nevertheless, considerations of public interest have to prevail in the end over considerations of that kind. I think that the suspension of this sentence was wrong and that the public interest would not be served by allowing the suspension to stand. I think that to allow the suspension to stand would tend to erode the standards of punishment that are necessary to operate as a deterrent to persons who are inclined to engage in commercial activity with respect to cannabis. To allow this suspension to stand would send an entirely wrong signal to people who are tempted to engage in cannabis trading and could only tend to weaken the defences which the community expects to be erected and maintained against the drug trade. In my opinion therefore there is no real alternative but to grant leave to appeal and to allow this appeal and to reverse the order suspending the sentence."

I consider these observations apply mutatis mutandis here.

The learned Magistrate was entitled to be influenced by the respondent's plea of guilty and the eloquent evidence of good character that was given. However, I agree with Miss Vanstone QC, counsel for the appellant, that the learned Magistrate clearly attached too much importance to the respondent's lack of previous convictions, bearing in mind that her offences extended over a twelve month period. (Compare Chisholm v The Queen (1985) 122 LSJS 230 and R v Rogers Unrep.Jt.No.7776 delivered on 18 September, 1984.) Moreover, it is agreed that the total outstanding is approximately $178,000 and that there are no prospects of restitution. I also agree that his Honour's treatment of the deterrent factor is unrealistic and misconceived. In that regard, his Honour said: "I must consider the deterrent aspect, both to you and to other people who may be inclined to act in the same or similar manner. I am certain you will not reoffend and as far as the deterrent aspect to other persons is concerned, quite frankly I doubt whether anybody will have the opportunity to defraud in this manner because this case serves as a warning to other employers and other people in authority not to sign blank cheques. The deterrent factor to you, therefore, now really doesn't exist ..."

In my opinion, and having regard to all the circumstances, and the extent of the breach of trust and the extent of the loss, the suspension here was plainly wrong, and should be set aside.

In fixing the period of imprisonment at six years, his Honour did not indicate what discount he made, if indeed he made one, for the respondent's plea of guilty (see R v Nixon (1993) 66 A Crim R 83). If he had deducted 25%, he must have started with a head sentence of eight years. That, in my opinion, would have been clearly too much. There is the further fact here that the respondent has now undertaken the 320 hours of community service required under the bond. I think, in all the circumstances, that the head sentence should be reduced to four years.

As to the question of a non parole period, his Honour clearly did not make an order pursuant to s.32(5)(c), nor was there any justification for such an order. He should have fixed a non parole period. I think in all the circumstances this Court should fix two years.

I would allow the appeal and set aside the sentence and orders of the learned Magistrate. In lieu thereof I would order a custodial sentence of four years and fix a non parole period of two years, both periods to run from the date the respondent surrenders or is taken into custody.

JUDGE2 PRIOR J I agree that this appeal must be allowed. The sentencing discretion has miscarried in a number of respects. An immediate custodial sentence was required given the serious nature of this offending over twelve months, aggravated by the breach of trust involved and the extent of the loss suffered by the respondent's employer.

The Magistrate was required by s32(1) of the Criminal Law (Sentencing) Act, 1988 to fix a non-parole period. Sub-s(5) of s32 speaks of a number of qualifications to the obligation to fix a non-parole period. By para (a) a non-parole period may not be fixed in respect of a person who is liable to serve a total period of imprisonment of less than one year. Para (c) provides:- "a court may, by order, decline to fix a non-parole period in respect of a person sentenced to imprisonment if the court is of the opinion that it would be inappropriate to fix such a period because of - (i) the gravity of the offence or the circumstances surrounding the offence; (ii) the criminal record of the person; (iii) the behaviour of the person during any previous period of release on parole; or (iv) any other circumstance."

The power in this paragraph is a power to do something adverse to a person sentenced to imprisonment. The mandatory requirement to fix a non-parole period is qualified when a circumstance can be identified that justifies denying the benefit that results from the fixing of a non-parole period.

The duty to fix a non-parole period cannot be ignored or waived because of any confident expectation that a suspended sentence of imprisonment was not likely to be served. The structure of the legislation requires that a non-parole period be fixed in all but the most exceptional cases. The only obvious justification for declining to fix a non-parole period here would have been the gravity of the offence and surrounding circumstances. The Magistrate could only decline by order and by reference to an adverse circumstance. It is another thing to say that the Crown's appeal against the suspension of the sentence should be granted because of an error adverse to the respondent and made after the respondent's counsel requested the Magistrate to do as s32(1) required.

The Magistrate's remarks on sentence indicate that too much weight was placed upon the respondent's previous good character. Too little regard was paid to the respondent's resourcefulness over twelve months and the need for general deterrence. Given the amount of money and the degree of deliberation involved, it was wrong to suspend the sentence: Chisholm v The Queen (1985) 122 LSJS 230 at 232; R v Rogers (18 Sept. 1984) and R v Wirth (1974) 14 SASR 291. An immediate custodial sentence was called for. This Court must intervene to maintain adequate standards of punishment: R v Osenkowski (1982) 30 SASR 212 at 213 and R v Wilton (1981) 28 SASR 362 at 363.

Setting aside the sentence imposed the course of conduct admitted calls for a sentence of the order of seven years imprisonment but for the respondent's plea of guilty. Taking that into account as well as the fact that the respondent has now performed community service, I would allow the appeal and substitute a sentence of imprisonment for four years with a non-parole period of two years from whatever date the respondent is taken into custody.

JUDGE3 OLSSON J This is an appeal by the prosecutor against a sentence imposed on the respondent, on the grounds that it is manifestly inadequate and that the learned sentencing magistrate fell into error in various respects. It is made to the Court of Criminal Appeal, at the election of the appellant, pursuant to section 42 of the Magistrates Court Act.

By information presented to the Magistrates Court on 12 March 1993, the respondent was charged with 28 counts of fraudulent conversion and one count of falsifying books. The offences were all part of a consistent course of conduct, which took place between 31 August 1991 and 10 August 1992. They related to a series of transactions whereby the respondent dishonestly appropriated moneys belonging to her employer, his wife or a family trust company owned or controlled by him. It is common ground that the moneys appropriated were expended in satisfying the respondent's addiction to gambling at the Casino.

In all a total sum of $198,044.45 was so appropriated, but it is clear that some money was reimbursed. It is not entirely apparent to me as to what was the true net amount not reimbursed. What is, however, common ground, is that that amount is not less than $130,000 and there is no short term prospect of restitution of such sum.

The respondent was, on 17 April 1990, employed as executive assistant to Mr David Simmons, the Chairman of Thomson Simmons and Co. She came with an impeccable prior background and as a person who, rightly, was highly regarded for her work, including work in the community. Character evidence placed before the Court indicated that she was a talented person, whose previous character was beyond reproach.

The respondent was appointed to a very responsible position and one which, in reality, was of considerable trust. She was answerable only to Mr Simmons and the Administrative Manager. She was responsible for organising his business and office affairs (including normal secretarial duties), co-ordinating and implementing his travel arrangements and business appointments and attending to his personal banking. The banking function involved operations of various cheque and foreign money market deposit accounts.

In the lastmentioned regard it was the task of the respondent to pay Mr Simmons' personal liabilities, transfer funds between accounts as necessary, maintain cheque books and butts and produce a monthly balance for all of his financial operations. Because of his many business commitments Mr Simmons came to rely upon and trust the respondent implicitly - so much so that he paid scant regard to the detail of what she put before him and did not ever question the monthly balance sheets. More importantly he often signed blank cheques and left the respondent to fill in the details.

Investigations made indicate that the respondent wrongfully caused some 28 cheques to be drawn for large sums, ostensibly in the normal course of Mr Simmons' personal business affairs or those of his family trust, but which she cashed and appropriated the proceeds to satisfy her personal gambling addiction.

As a consequence of some questions eventually raised by Mr Simmons concerning certain specific transactions, the respondent came into his office on 9 September 1992 and confessed what she had done. This led to an audit of the relevant accounts and notification of the situation to the police.

When the matter came before the Magistrates Court, the respondent pleaded guilty to all charges. It was common ground that she had no antecedent record. Substantial evidence was provided to the learned magistrate as to her prior good character and excellent community and employment record.

It was made to appear to the learned magistrate that she had totally ceased gambling and hoped to be able to make some restitution in the future, if and when her financial position enabled her to do so. She had obtained other employment with an employer who was aware of what she had done. However, it appeared that restitution was unlikely in the short term. The magistrate was satisfied that it was unlikely that she would re-offend.

In approaching the question of sentence the learned magistrate elected, as he was entitled to do, to impose a single sentence for all offences, pursuant to the provisions of section 18A of the Criminal Law (Sentencing) Act. Having regard to the respondent's prior good character, her confession to Mr Simmons and timely pleas of guilty, her lack of antecedent record, and his satisfaction that she would not re-offend, he imposed a sentence of six years' imprisonment, but suspended it upon entry into a bond of $500 to be of good behaviour for three years and to perform 320 hours of community service. It was a term of the bond that she not enter the Casino or be involved in any other significant gambling activities.

When imposing that sentence the learned magistrate recognised the need to have due regard to the factors of personal and general deterrence. However, he said that, not only was he certain that she would not re-offend but, so far as the deterrent aspect related to other persons was concerned, he also doubted whether "anybody will have the opportunity to defraud in this manner because this case serves as a warning to other employers and other people in authority not to sign blank cheques". He further commented "The deterrent factor to you, therefore, now really doesn't exist".

I pause at this juncture to make the comment that daily experience in the criminal court would tend to suggest that such an assessment exhibits more of a pious hope than the reality of life. Unfortunately, it might equally be argued that his sentencing approach and the publicity attendant upon it was not only likely to have little practical effect on the commission of crimes of this fraudulent nature but might also encourage it because of the probable lack of an effective sanction against it.

It is not disputed that the respondent has, during the unsatisfactorily lengthy period of delay which has elapsed in bringing this matter on for hearing, due principally to the need to resolve legal aid issues, performed the full amount of the community service required and obtained alternative employment. However, neither she nor her husband are persons of means, and it is difficult to see that restitution is a practical reality in the immediate future.

Against that background Miss Vanstone QC argues that, having regard to the amount of the moneys involved, the period of time over which these deliberately planned and concealed offences took place and the serious breaches of trust involved, the learned magistrate plainly fell into error in suspending the sentence and also in failing to fix a non parole period.

It should be said that no reasons were expressed by the learned magistrate for that failure, although it is asserted in an affidavit that, at the time, he commented that he felt that it was unnecessary to do so because "he did not anticipate that it would ever be necessary to bring one into effect, but, if it were necessary, it would be more appropriate for a sentencing magistrate on a future offence to fix such a period".

As to this aspect it need only be said that the Criminal Law (Sentencing) Act expressly requires the court to fix a non parole period in relation to any custodial period of one year or more, subject to the proviso, contained in section 32(5)(c), that it may, by order, decline to fix a non parole period where it is inappropriate so to do by virtue of the gravity of the offence or circumstances surrounding it, the criminal record of the person sentenced, the behaviour of that person during any previous release on parole, or any other circumstance.

Not only did the learned magistrate not make any formal order concerning the matter, but he also did not express any reasons which would justify the making of one. If it be accepted that he informally intimated an attitude as outlined above, then it should be said that this would clearly not constitute "any other circumstance" within the intendment of the statute. To invoke that head of permissible refusal there must be an identification of some specific circumstance which takes the case out of the ordinary run and amounts to a compelling reason for a departure from normal sentencing practice. The reason said to have been expressed simply does not fit the type of mould obviously envisaged by subsection (5)(c).

This failure alone constituted an error in the sentencing process.

But this was not the only error apparent on the face of the sentencing remarks.

It must be said at once that the offences admitted (and particularly the continuous course of conduct evidenced by them over a lengthy period of time) were of an extremely serious nature. There was a large amount of money involved, the defalcations constituted a grave breach of trust, they were carefully and deliberately orchestrated so as to deceive Mr Simmons and they were of a repeated nature extending over twelve months.

In my opinion this Court should make it abundantly clear that this type of so-called "white collar" crime is no less criminal in its nature than many other serious crimes such as armed robbery not involving actual violence, breaking and entering and the like, specifically where it involves characteristics of the type which I have outlined above. This type of offending is not uncommon, in one form or another, at the present time, it is insidious in nature and can, in some instances, result in disastrous consequences for a victim - even more so than the other types of crime to which I have referred.

In my view paramount considerations must be the factors of general and personal deterrence. It must be made clear that conduct of this type will firmly be dealt with. If it were otherwise there would be justifiable public outrage. There are very real limits to which such factors can properly be subordinated to personal mitigating circumstances. Past sentences imposed by this court for generically similar offences clearly indicate that situation.

It is at once to be seen that, on the face of his reasons, the learned magistrate failed to accord those factors the prominence which they so clearly demand. He patently accorded undue weight to personal mitigating circumstances in a manner which deflected his mind from the approach which he was bound to adopt. Indeed there is a clear inconsistency inherent in what he did. It must be a rare case indeed in which criminal conduct sufficiently serious to attract a head sentence of six years' imprisonment can nevertheless properly be the subject of an exercise of discretion to suspend that sentence.

It follows that the sentencing process manifestly miscarried and it thus falls to this Court to consider the matter afresh for itself; and substitute its conclusions for those of the learned magistrate.

In so doing it at once becomes apparent that, as counsel virtually conceded, the learned magistrate made yet a third error in the sentencing process.

It is beyond question that, by virtue of her timely pleas of guilty and the other significant mitigating factors related to her prior impeccable character and community work, the respondent was entitled to a substantial discount on what would have been a normal sentencing tariff. On the assumption that the learned magistrate allowed that discount, the sentence imposed suggests that his base figure for initial consideration must have been of the order of nine years imprisonment. Such a commencement point is in discord with relevant previous sentencing tariffs; and would necessarily elevate the offending in the instant case to a situation of parity with earlier cases of fraudulent conduct involving sums of money vastly in excess of the sum here in question.

I consider that the commencement point for consideration in this case ought to be a sentence of the order of seven years' imprisonment, which should then be reduced to a head sentence of four years, so as to allow a proper discount for the timely pleas, personal mitigating factors and the fact that the respondent has performed 320 hours of community service. In my view a suspension of that sentence cannot reasonably be contemplated.

Having regard to the factors personal to the respondent, the good prospects for her rehabilitation and some delay which has occurred in this application coming before the court (albeit not due to any default on the part of the Director) I would fix a non parole period of two years. The resultant lengthy period of parole and the supervision associated with it should ensure that the high hopes held for the successful rehabilitation of the respondent from her gambling addiction are realised in fact.

In so concluding I by no means ignore the principle that this Court ought to be slow to interfere when a respondent has been dealt with in the court below on the basis that an expectation that she will not actually have to serve a custodial sentence has been generated (R v Hicks (1987) 45 SASR 270 at 273). However, such are the patent errors in the sentencing process in this case and such is the serious nature of the offending that the public conscience would be affronted if this Court did not perform its duty, however distasteful that duty might be, and rectify the situation.

I would therefore allow the appeal, set aside the sentence imposed and substitute a sentence that the respondent be imprisoned for four years with a non parole period of two years, both to run from the date when the respondent is actually taken into custody. I would also order that a bench warrant issue, but lie in the Registry for 24 hours to permit the voluntary surrender of the respondent.

Magistrates Court Act 1991

SA POLICE v JULIE DAWN ASHDOWN No. SCCRM 93/1654 Judgment No. 4488 Number of pages - 12 Criminal law and procedure - sentence

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SA POLICE v JULIE DAWN ASHDOWN No. SCCRM 93/1654 Judgment No. 4488 Number of pages - 12 Criminal law and procedure - sentence (1994) 72 A Crim R 63 [1994] SASC 4488 (20 April 1994)

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