Scott v R [1986] TASSC 81

Supreme Court of Tasmania|1986-12-18|Before: Underwood JJ, Nettlefold J, Cox J

The applicant in that case had pleaded guilty to four counts of fraudulent disposal of trust funds to the extent of $30,000 which had been used to prevent the collapse of certain investment arrangements in which he had a personal interest. The money was refunded in full after several years.

33 The present case bears no relation to the cases I have cited, nor to those other unfortunate cases where money is stolen from clients to make good shortages which might have resulted from non-criminal, if careless or incompetent, professional conduct. All too often in such cases the offender mounts a treadmill of continuing defalcations to keep his business viable and his initial errors undetected. Here the applicant criminally abused his position of trust admittedly to avoid pressure from a dissatisfied client, but in a single transaction whereby the complainants were exposed to only slight risk and from which they in fact suffered no loss. To his credit, when his vendor clients were still dissatisfied in May 1986 with his failure to produce the outstanding interest, he did not yield to the temptation to repeat such conduct to keep them at bay. His action in March was not, on the evidence, premeditated and though inexcusable and foolhardy has already cost him dearly in terms of his professional standing now and in all probability for the rest of his life. A sentence of imprisonment is not inappropriate, but in my respectful opinion one of 12 months' duration fails to recognise the individual circumstances and relatively minor culpability of his offence. Similar conduct in like circumstances can in my respectful view be expected to be realistically discouraged by a sentence of imprisonment of considerably shorter length.

34 In my view the sentence should be quashed and a sentence of four months' imprisonment, dating from 10th October 1986 substituted therefor.

35 The appellant was sentenced to 12 months' imprisonment upon one count of stealing $45,000. Leave to appeal against that sentence is sought on the following grounds:-

(1) The learned trial judge erred in fact in finding that the complainants were exposed to any risk of losing their money, or alternatively in failing to find that the complainants were not exposed to any risk at all.

(2) The learned trial judge misdirected himself in that he took into account an irrelevant consideration, namely, the question of initial mismanagement or misappropriation of trust funds sometimes leading to more serious defalcations.

(3) The learned trial judge failed to properly take into account and give sufficient weight to the factors of mitigation, in particular:

(a) The fact that there was no monetary benefit to the appellant nor was there an intention at any stage to so benefit.

(b) The past and future personal consequences to the appellant arising out of his commission of the offence and conviction thereof.

(c) The circumstances of the resolution of all matters and restitution by the appellant.

(4) The said term of twelve months imprisonment is manifestly excessive in the circumstances.

36 The appellant is a legal practitioner and, at the time of the offence, was a partner in a legal firm carrying on practice in Launceston. He joined the firm as an employed solicitor in March 1985 and immediately took over carriage of a matter on behalf of Messrs Dent Chellis & Cuthill (hereinafter called "the vendors"). The vendors had entered into a contract to sell a unit to a Mrs Holmes (hereinafter called "the purchaser") for $45,000. When the appellant took charge of the file the title to the unit had been lost and consequently, completion had been delayed. The purchaser had entered into possession of the unit and the purchase price was deposited in an investment account in the joint names of the solicitors for the vendors and the solicitors for the purchaser.

37 The appellant, ignorant of the appropriate procedure required to obtain a replacement title, neglected the file despite repeated requests by the vendors for completion. Apparently, this file was one of a number the appellant found he was unable to manage properly and accordingly left without attention.

38 His counsel submitted to the learned sentencing judge that, with respect to the sale from the vendor to the purchaser, the appellant "found himself unable to properly address his mind to the way in which the problem should be rectified and unable to perceive quickly what ought to be done."

39 The appellant received letters from the Law Society advising that there had been complaints of delay and requesting an explanation. He did not respond to these letters. He was under continual pressure from the vendors to resolve the matter and to put them in funds. The appellant made an application (which subsequently proved to be inappropriate) to the Recorder of Titles for the issue of a replacement title but not long after, on the 25th March 1986, one of the vendors called on the accused and demanded payment of the purchase price.

40 That day, the appellant stole $45,000 by withdrawing from a Building Society two sums, one of $20,000 and one of $25,000. This money belonged to two clients of the appellant's firm and, on their instructions, had been deposited by the firm in the Building Society, pending completion of certain contracts both had entered into.

41 After withdrawal, the monies were initially credited to the accounts kept by the firm for each of those clients. Journal entries were then made to transfer these sums to the trust account of one of the vendors. The appellant used $10,496.00 to complete a separate purchase being made by that vendor and the balance was paid by three separate cheques to the vendors on account of the purchase price. No doubt this was done to relieve the pressure then being put on the appellant to complete the transaction.

42 Notwithstanding the commission of the crime the appellant remained unable to properly address the problem of the lost title and in May 1986 the file was taken to another firm of solicitors. By June 1986 title to the unit was obtained and discovery of the appellant's crime became inevitable. On 30th June 1986 the appellant resigned from the firm and very shortly afterwards, the defalcation became the subject of enquiry by the Law Society and then the police. The appellant made a full confession to the police.

43 The appellant's counsel told the learned sentencing judge that there would be no opposition to a foreshadowed motion by the Law Society to strike the appellant off the roll of legal practitioners. As the contract between the vendor and the purchaser finally settled, the misappropriated monies were restored to the rightful owners. The appellant has made full restitution for the interest lost and paid damages suffered by reason of his delays.

44 At the time of the commission of the crime the appellant was aged 29 years. On leaving school he undertook a year's study at the University of Tasmania in the Economics Faculty but abandoned that course and took employment. In 1978, after a few years in employment, he commenced his studies for a Law Degree and was admitted as a Legal Practitioner in 1984. From the material submitted by his counsel it appeared that he was not suited to the practise of the law; a state of affairs the appellant himself acknowledged.

45 In his comments upon passing sentence the learned judge said he took into account the following matters:

"(1) Although the accused was not motivated by a desire for financial gain, he was not acting altruistically[1] either. He misappropriated these monies in order to extricate himself from a professionally and personally difficult situation.

(2) Although the complainants were not exposed to any great risk that they might lose their money, their position between the time of misappropriation and the time of the completion of the conveyances was as a result of the misappropriation not as secure as it would have been if their monies had remained deposited in the Building Society.

(3) It is important for the maintenance of public confidence in the legal profession that solicitors who handle Trust monies observe the highest standards of propriety and the court has a duty to deter all those who are in such a position from engaging in any improper dealing with Trust money of any kind at all whatever might be their motivation for doing so.

(4) Although there is no suggestion in this case that there was any likelihood of this accused repeating this offence when considering the weight which I should give to the element of general deterrence, I should bear in mind that an initial mismanagement or misappropriation of Trust funds of this kind can sometimes lead to more serious defalcations."

46 Grounds 1 and 2 of the Notice of Appeal attack the comments made by his Honour in paragraphs 2 and 4 above. In my view these grounds are without substance. Until title was obtained and the contract actually completed there was a risk of loss of the money misappropriated. Although the purchaser's money was in a joint trust account, its payment to the vendors was dependent upon the acquisition of a good title. Until such title was obtained and accepted by the purchaser there was a risk, albeit, not great, that the purchase money would not be handed over with consequential loss to the clients whose money the appellant had misappropriated.

47 It was entirely appropriate for his Honour to refer in the context of general deterrence, to the undeniable fact that the crime committed by the appellant is often the beginning of more serious defalcations. His Honour's reference is to the seriousness of the offence and the need to impose a sentence which will operate as a general deterrent. There was no suggestion in his Honour's comments that in the case of this appellant a repetition of the offence was likely.

48 Grounds 3 and 4 together amount to the proposition that in the circumstances the sentence was manifestly excessive.

49 The community expects legal practitioners to practise their profession with the utmost integrity. By virtue of their calling and the authority of the Legal Practitioners Act they occupy a privileged and exclusive position in society. This position carries with it an onerous responsibility to at all times, practise the law with propriety. In sentencing a legal practitioner for a crime of dishonesty concerning his client's trust account, general deterrence plays a substantial role in an attempt to ensure the maintenance of the necessary high standard of conduct in the profession. In an unreported decision of the Victorian Court of Criminal Appeal, DPP v J K Ryan (7th April 1986) Young CJ said at p6:-

"It is, however, I think, true to say that a solicitor is in a special position. He is not only in a position of trust but he is held out by the Court as a person of skill and ability and as a person who can be trusted. That is the consequence of his admission to practise as a barrister and solicitor of the Court. Such a person must, in my view, inevitably suffer severe punishment for offences which demonstrate that he is not to be trusted. Offences which demonstrate that a solicitor is not to be trusted bring the whole profession of the law into disrepute, and a solicitor guilty of such offences cannot expect to be treated leniently. This, however, is not to say that there is an inflexible rule that a solicitor must receive a custodial sentence even for offences which demonstrate that he is not to be trusted."

As in every sentencing situation, all the circumstances of the case, that is to say, all the circumstances of the offences and of the offender must be looked at and considered. But it is true to say, I think, that in the case of a solicitor there will have to be strong and cogent reasons for treating an offender with leniency."

See also Bell v R (1981) 5 A Crim R 347.

50 Learned counsel for the appellant acknowledged the validity of the proposition that general deterrence properly played a substantial part in the sentencing process but submitted that in the present case the sentence was nonetheless, manifestly excessive.

51 In the present case it is of great significance that the appellant was not motivated by personal greed. It is true that his actions were brought about by desire to protect himself from professional embarrassment in front of clients and his peers but at no stage was it contemplated that the stolen monies would be directly applied for his own use. The appellant appears to have succumbed to pressure caused by the visit of one of the vendors on the day the crime was committed. That pressure was entirely of the appellant's own making but its existence indicates that the crime was the product of a decision made in the dilemma of the moment and not the result of a maturely considered plan. No ledger entries were falsified or omitted and although confession was delayed until prosecution was inevitable, the appellant has not since then, sought to avoid the consequences of the single act of wrongdoing.

52 The money stolen has been repaid and no one other than the appellant, has suffered loss by reason of the criminal conduct. No small part of his punishment is the loss of his career and the consequential public humiliation and financial harm.

53 I have reached the conclusion that, nothwithstanding all these matters, the aspect of general deterrence calls for the imposition of an immediate custodial sentence. However, the circumstances of the offence and the offender are such that in my view, the sentence of twelve months is manifestly excessive. In my respectful opinion such a sentence fails to give sufficient weight to the factors I have referred to which operate to offset the element of general deterrence.

54 I would give leave to appeal, allow the appeal and substitute a sentence of four months' imprisonment.

CITATION: Scott v R [1986] TASSC 81; A81/1986

"......... the appeal is from a discretionary act of the court responsible for the sentence. The jurisdiction to revise such a discretion must be exercised in accordance with recognized principles. It is not enough that the members of the court would themselves have imposed a less or different sentence, or that they think the sentence over-severe. There must be some reason for regarding the discretion confided to the court of first instance as improperly exercised. This may appear from the circumstances which that court has taken into account. They may include some considerations which ought not to have affected the discretion, or may exclude others which ought to have done so. The court may have mistaken or been misled as to the facts, or an error of law may have been made. Effect may have been given to views or opinions which are extreme or misguided. But it is not necessary that some definite or specific error should be assigned. The nature of the sentence itself, when considered in relation to the offence and the circumstances of the case, may be such as to afford convincing evidence that in some way the exercise of the discretion has been unsound. In short, the principles which guide courts of appeal in dealing with matters resting in the discretion of the court of first instance restrain the intervention of this court to cases where the sentence appears unreasonable, or has not been fixed in the due and proper exercise of the court's authority." (Cranssen v R [1936] HCA 42; (1936) 55 CLR 509 at 519-520).

"An appellate court does not interfere with the sentence imposed merely because it is of the view that that sentence is insufficient or excessive. It interferes only if it be shown that the sentencing judge was in error in acting on a wrong principle or in misunderstanding or in wrongly assessing some salient feature of the evidence. The error may appear in what the sentencing judge said in the proceedings or the sentence itself may be so excessive or inadequate as to manifest such error (see generally Skinner v R [1913] HCA 32; (1913) 16 CLR 336 at 339-340; R. v Withers (1925) 25 SR(NSW) 382 at 394; Whittaker v R [1928] HCA 28; (1928) 41 CLR 230 at 249; Griffiths v R [1977] HCA 44; (1977) 15 ALR 1 at 15-17)."

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