STRATFORD v R

Aubrey Watts v Regina [2007] NSWCCA 153 R v Brillo (unreported NSWCCA 26 May 1997) R v Carr (2002) 135 A Crim R 171 R v Egerton (unreported NSWCCA 8 August 1997) R v Giam (No 2) (1999) 109 A Crim R 348; NSWCCA 378 R v Houghton [2000] NSWCCA 62 CASES CITED: R v Jackson [2001] NSWCCA 355 R v Martin [2005] NSWCCA 190 R v Pearce (1998) 194 CLR 610 R v Phelan (1993) 66 A Crim R 446 R v Scott [2005] NSWCCA 152 R v Tadrosse (2005) 65 NSWLR 740 R v Thomson & Houlton (2000) 49 NSWLR 383 R v Wong [2001] NSWCCA 444

PARTIES: Barry Stratford (Appl) The Crown

COUNSEL: L Brasch (Appl) M Barr (Crown)

SOLICITORS: Greg Walsh & Co (Appl) Director of Public Prosecutions (Crown)

IN THE COURT OF CRIMINAL APPEAL 2006/5063

McCLELLAN CJ at CL HARRISON J FULLERTON J

TUESDAY 18 SEPTEMBER 2007 STRATFORD, Barry v R Judgment 1 McCLELLAN CJ at CL: The applicant pleaded guilty to fifteen counts of fraud by an officer contrary to 176(A) of the Crimes Act 1900 (NSW). Each offence carries a maximum penalty of ten years imprisonment. 2 The various offences were described as a sequence. The sentencing judge was asked to consider a further twenty-nine similar matters on a Form 1 in relation to sequence 1 which related to a cheque for the sum of $2,392.00. However, when sentencing his Honour mistakenly referred to sequence 42 and said that he took the Form 1 matters into account when sentencing in relation to that sequence. Sequence 42 involved a cheque for $16,200.00. 3 The total of the amounts in relation to which the applicant pleaded guilty was $61,804.00. The total amount in relation to the matters on the Form 1 was $98,633.00. 4 In relation to fourteen of the counts to which the applicant pleaded guilty he was sentenced to concurrent non-parole periods of ten months each to date from 18 August 2006 and conclude on 17 June 2007. His Honour did not provide any period on parole for these offences. 5 In relation to sequence 42 the applicant was sentenced to a non-parole period of 18 months to commence on 18 February 2007 and conclude on 17 August 2008. It was for this offence that his Honour said he considered the Form 1. His Honour also provided a period of 18 months on parole dating from 18 August 2008 and concluding on 17 February 2010. 6 The overall effective sentence was a non-parole period of 2 years with a balance of term of 18 months.

The Facts 7 The facts relating to the various offences are complicated. 8 They occurred between 14 October 1999 and 25 October 2002. During this time the applicant was the Financial Controller and Company Secretary for Crawford & Co. He had been employed by the company since 1993. He was appointed the Financial Controller in July 1994 and the company secretary in January 1997. 9 The applicant was authorised to make payments from the company's business accounts. Withdrawals up to $5,000 could be made from account No 1 without requiring the authorisation of a second person. Withdrawals could be made from account no 2 without limit. 10 Between October 1999 and October 2002 the applicant made a number of withdrawals from company accounts transferring money to bank accounts under his own control. The payments were not authorised by the company. A total of $114,170 was illegally taken from account no 1. A total of $46,267 was taken from account no 2. Both accounts were with the St George Bank. 11 In relation to the withdrawal made from account no 1 there were a total of 34 withdrawals ranging from the sum of $1,518 to $5,350. In relation to the withdrawals from account no 2 there were ten in total ranging from $1,925 to $16,200.

Subjective matters 12 The applicant was born on 29 September 1938. After leaving school he qualified as an accountant. He is married and has two children. The younger of his sons has suffered with heroin addiction. This has impacted significantly on the lives of the applicant and his wife. It has also required the applicant to financially support his son including providing for his rehabilitation. The applicant suffered various stresses at work and has been treated for depression. He has also had a problem with alcohol which it would appear he has been able to overcome. 13 The applicant did not give evidence before the sentencing judge. However, his wife gave evidence of his remorse which was confirmed by a report from a psychiatrist. His Honour accepted that the applicant was remorseful. 14 The evidence disclosed that the applicant has made complete reparation for the money which he took. Apparently he brought a civil action against his former employer for wrongful dismissal and as part of the settlement of that action he accepted the obligation to repay the stolen monies to his employer. The sentencing judge accepted that in so doing he made a sacrifice. He withdrew $72,206.14 from his superannuation benefits borrowed an additional $40,000.00 from his wife and otherwise secured borrowings against his home. 15 Before committing these offences the applicant was a person of good behaviour. His Honour found that the applicant was unlikely to re-offend and had good prospect of rehabilitation. 16 There was evidence before his Honour which indicated that the applicant began taking money at about the time his son commenced using heroin. There is no doubt that the difficulties of his son occasioned significant stress to the applicant and may have contributed to his offending because of his need for additional monies. 17 The applicant pleaded guilty at the first opportunity and the sentencing judge gave him the benefit of a full Thomson discount: see R v Thomson & Houlton (2000) 49 NSWLR 383. 18 There are four grounds of appeal.

Ground One - his Honour erred by taking the matters on the Form 1 into account on the wrong principal offence. 19 The Crown does not take issue with this ground of appeal. In the course of submission his Honour was invited to consider the matters on the Form 1 in relation to sequence 1. His Honour indicated that he would take this course. However, when passing sentence his Honour indicated that he had regard to the matters on the Form 1 in relation to sequence 42 rather than sequence 1. 20 The applicant submitted that this error has affected the structure of the sentences imposed and accordingly this Court should intervene. It was submitted that by having regard to the matters on the Form 1 in relation to sequence 42 his Honour not only erred but that error has caused his Honour to impose an excessive sentence in relation to that offence. Because the sentence for sequence 42 is of such significance to the overall sentence it was submitted that the sentencing discretion has miscarried. 21 In my view, notwithstanding the obvious error, it is unnecessary for this Court to intervene. Although the sum of money stolen in sequence 42 was greater than the sum stolen for sequence 1, the difference was not such as to have justified a significantly greater sentence but for the Form 1 matters. I am satisfied that his Honour intended to impose concurrent sentences in relation to all but the matters in respect of which the Form 1 matters were to be taken into account. I am not persuaded that if the Form 1 matter had been considered in relation to the offence described as sequence 1 the overall result would have been different.

Ground Two - his Honour erred in failing to give proper effect to restitution made by the applicant 22 During the course of the sentence hearing there was discussion about the matter of restitution. His Honour recognised the efforts which the applicant had made and recognised that it involved sacrifice. However, the obligation to make the repayments was included in the terms of settlement of his civil action against his employer. The terms of settlement were not tendered and the complete position as between the applicant and his employer has not been disclosed. 23 The applicant referred to the remarks of Hunt CJ at CL in R v Phelan (1993) 66 A Crim R 446. In that case the offender had made voluntary reparation. However, his Honour emphasised that, even if voluntary, the circumstances of the repayment are important. If the payment was voluntary and involved quite a degree of sacrifice it may have considerable significance when considering mitigation. 24 In the present case the applicant was able to provide the funds to repay the stolen monies from within his own and his family's resources. Although the consequence is that he must carry debts he has not been required to sell his home or, so far as the evidence discloses, suffer a very significant change in his family's standard of living. The family's present financial position was not disclosed in the evidence. 25 The remarks on sentence indicate that his Honour was mindful of the provisions of s 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999. He correctly identified that the extent of the remorse was informed by the sacrifice which the applicant had made. I can discern no error in the manner in which he approached this issue.

Ground Three - His Honour erred in finding as an aggravating factor that the offences involved multiple criminal acts 26 Section 21A(2)(m) provides that an aggravating factor which can be taken into account in determining the appropriate sentence for an offence includes "the offence involved multiple victims or a series of criminal acts." 27 When considering the appropriate sentence his Honour said that he had had regard to "the objective seriousness of the multiplicity of the offences." His Honour also said in relation to matters of aggravation that he had regard to the fact that "the offences involved multiple criminal acts." The applicant submitted that in considering the matters in this way his Honour fell into error. Where an offender has committed a series of criminal acts and is to receive a separate sentence for each of them it was submitted that s 21A(2)(m) is not relevant. 28 In R v Tadrosse (2005) 65 NSWLR 740 at 747 which involved an offender who had committed multiple offences, Howie J said: "…the fact that there were multiple victims and multiple acts of criminality would be addressed by the sentences to be imposed for each of those offences in accordance with the principle of totality. With respect, it is illogical to take into account, where there are multiple offences charged, that it is an aggravating factor relevant to each offence that there is a series of criminal acts disclosed by the offences before the court." [28] 29 In my opinion the sentencing judge's reference to the multiplicity of criminal acts as a matter of aggravation was an error. His Honour was required to fix an appropriate sentence for each offence and then consider matters of cumulation or concurrency as well as totality (see R v Pearce (1998) 194 CLR 610 at [45] McHugh, Hayne and Callinan JJ). Obviously when carrying out this task his Honour was required to have regard to the fact that the applicant was being sentenced for multiple offences and ensure that the ultimate sentence imposed was appropriate to the totality of the applicant's offending and his personal circumstances. 30 Notwithstanding the error which I have identified I do not believe it has resulted in sentences which were inappropriate for the individual offences. The offences were objectively serious and the applicant's culpability was informed by the fact that the offence was a deliberate act of dishonesty and committed as part of a sequence extending over a lengthy period of time. By providing a concurrent sentence for 14 offences his Honour has ameliorated the impact of the sentence for each offence. This is likely to have been advantageous to the applicant.

Ground Four - his Honour erred in imposing an overall sentence that was manifestly excessive 31 The applicant submitted that having regard to his strong subjective case, the amounts taken and the fact that restitution has been made, the sentence imposed was excessive. Having regard to the fact that his Honour gave the applicant a discount for his plea which it must be assumed was of the order of 25% the starting point for the overall sentence must have been of the order of 4 years and 5 months. 32 It was submitted that a number of decisions in relation to similar offences indicate that having regard to the circumstances of the applicant's case the sentences imposed cannot be justified. The applicant relied upon the following cases:

R v Carr (2002) 135 A Crim R 171 33 Mr Carr pleaded guilty in the Local Court to two offences, the first contrary to s 176A and the second contrary to s 178A (maximum penalty of seven years). Carr had been a director of a company and had been responsible for the custody and control of the company's chequebooks and had paid himself from the company's funds over a three year period a sum of $321,666 to which he was not entitled. He repaid $85,800 of these monies. He was sentenced to four years imprisonment with a non-parole period of two years. On the second offence which involved $358,952.68 and occurred after being detected for the first offence, he was sentenced to a wholly concurrent fixed term of two years. The court found that the overall sentence was inadequate due to the sentence for the second offence being made wholly concurrent but dismissed the Crown appeal. Howie J said in reference to the sentence imposed on the offence contrary to s 176A at [31]: "Having regard to the length of time over which the acts giving rise to the offence occurred, the serious breach of trust involved, … the amount of money involved and importance of general deterrence the sentence was an appropriate one for that offence." 34 It was submitted that in Carr, as opposed to the applicant's case, a far greater amount of money was involved, there was not the same compelling subjective case and the amount of restitution was significantly less.

R v Wong [2001] NSWCCA 444 35 Mr Wong was convicted at trial of an offence of defrauding the ANZ bank of $431,269.62 by taking advantage of a banking error. He was sentenced to a good behaviour bond of two years. The court dismissed his conviction appeal. There was no appeal against sentence by the appellant or Crown. The report does not disclose the extent of any restitution.

R v Jackson [2001] NSWCCA 355 36 Mr Jackson pleaded guilty to seven charges contrary to s 176A. A further 22 offences were taken into account on a Form 1. The conduct involved 29 fraudulent cheques over a period of two years. He was 27 at the time that he commenced his criminal activity. The total amount involved was in excess of $5.2 million. The money was used for personal financial commitments and significant luxury purchases. All but $300,000 was repaid. The sentencing judge imposed an overall sentence of five years imprisonment with a non-parole period of two years. By majority the court upheld the Crown appeal and increased the non-parole period to three years. It was accepted that the head sentence of five years was appropriate.

R v Houghton [2000] NSWCCA 62 37 Mr Houghton pleaded guilty to twenty six counts of fraudulently applying company property whilst being a director. The maximum penalty for the offences was 10 years imprisonment. He had taken $1,376,293 over a three and a half year period. The court found that he had voluntarily ceased offending. There was effectively no restitution although the sum of $20,000 had been secured against Houghton's property. The sentencing judge imposed an overall sentence of two years imprisonment with a minimum term of eighteen months. On the Crown appeal the court found the sentence to be below the bottom of the available range but not so far below it that it ought to interfere.

R v Brillo (unreported NSWCCA 26 May 1997) 38 Ms Brillo pleaded guilty to 10 counts of making/using a false instrument. The maximum penalty is ten years. A further 148 matters of a similar nature were taken into account. She had defrauded her employer of $188,075. No money had been repaid. The money was spend on her lifestyle and gambling. She was twenty to twenty-one at the time of the offending. The sentence of a minimum term of eighteen months with an additional term of two years was upheld on appeal.

R v Egerton (unreported NSWCCA 8 August 1997) 39 Mr Egerton was convicted after trial of defrauding the company of which he was a director contrary to s 173. The maximum penalty is ten years. The amount involved was in the order of $3 million. Losses sustained were in excess of $1 million. The offending took place over a period of five weeks. The sentence imposed was a minimum term of eighteen months with an additional term of six months. The court dismissed the appeal against severity of sentence noting it was the most lenient which the circumstances allowed.

R v Giam (No 2) (1999) 109 A Crim R 348; NSWCCA 378 40 Mr Giam was convicted after trial of one count contrary to s 176A. The Crown appealed against the imposition of a good behaviour bond in circumstances in which he had been sentenced for a total of seven offences but the convictions on the other six offences had been overturned. Mr Giam was a director and accountant. He took an unquantified amount from a bank and after restitution there remained a loss of $1.7 million. The appeal was upheld and the court found the appropriate sentence to be one of a minimum term of two years with an additional term of two years.

R v Scott [2005] NSWCCA 152 41 Mr Scott pleaded guilty to three offences contrary to s 176A. He had obtained $4,700,065.62. The Crown appealed against a sentence of 2 years six months with a non-parole period of 22 months and 15 days. The sentence was to be served by way of periodic detention. The court upheld the Crown appeal in so far as the periodic detention order was concerned. However the term of the sentence remained intact although it was considered that it bordered on being inadequate.

R v Martin [2005] NSWCCA 190 42 Mr Martin pleaded guilty to an offence contrary to s 172 Crimes Act 1900 of being a trustee fraudulently disposing of property. The maximum penalty is ten years imprisonment. The conduct occurred over three years and nine months and involved 35 transactions. Martin was a director of a strata management company and misappropriated trust monies. He was 41 to 45 years old during the offending. The amount involved was $488,875.00. None was repaid. The court dismissed the appeal finding that a sentence of four years with a minimum term of 3 years was within the range. 43 The Crown responded with reference to further decisions which I have included in tabulated form. Name Charge Value Sentence Plea and Type of appeal Subjective matters MT 2½ yrs 1.Age 28 Law AT 1½ (14 counts) 2.Offence took place over 4 yrs CCA 7/10/93 S 176A 24 counts $180,000 PG 3.Money went to extravagant lifestyle MT 2½ years 4.Made attempt to repay AT 1½ years (10 counts) concurrent 5.Fear by judge of reoffending 18 months Nasr S 176 A $136,861 AT 2 years (incl Form 1) PG 1.Depression CCA 12/5/97 2 counts Form 1 (20 counts) 2.Gambling 18 months fixed 1.Age 21 Brillo MT 18 months 2.Offence took place over 1 yr CCA 14/5/97 S 300(1) and (2) $188,075 PG 3.No money repaid AT 2 years 4.spent money 5.Gambling out of control MT 18 months 1.Age 54 Egerton S 173 AT 6 months 2.Had a depressive illness CCA 8/8/97 Director fraudulently appropriate 2 counts $3 million about $1 million lost CCA held that the sentence was as lenient as possible Crown 3.Offence took place over 5 weeks In Houghton Barr J at [23] commented to the effect that this sentence may be low 4.Unsophisticated 5.Most monies were recovered

Bond increased to MT 2 years 1.Age 43 Giam (No 2) [1999] CCA 378 S 176A Unclear how much was taken in respect of this offence however about $1.7 million was taken overall AT 2 years Crown 2.Family assets sold to pay for fraud 3.Fraud monies used for gambling MT 18 months Crown 1.Age 54 Houghton [2000] CCA 62 Director fraudulently apply 26 counts $1,376,000 between $10,000 and $300,000 taken AT 6 months Sentence was below the range but the court would not interfere 2.Gambler 3.Offender gave himself up voluntarily before offence was detected

Wong [2001] CCA 444 S 176A $US288,562 by banking error Bond Plea not guilty 1.Offender acted on bank error Conviction appeal only 2.Offence over 3 weeks

S 176A $680,000 4 years PG 1.Age 49 Carr [2002] CCA 434 2 counts About $116,000 was repaid NPP 2 years Crown 2.Solicitor 2 years fixed concurrent Sentence should have been cumulative but court did not intervene 3.Required long term psychological therapy 1.Age 40 4 years 2.Aboriginal Rosser [2004] CCA 216 S 176A $80,000 NPP 2 yrs 3 months (1 count) Plea not guilty 3.Deprived background 33 counts Principal offence was $8,200 15 months fixed (32 counts) 4.Drug and alcohol problems All counts concurrent 5.Gambling addiction 6.16 months period

S 176A PG 1.Age 37 Mungomery [2004] CCA 450 3 counts $1,000,000 5 years Crown 2.Period over 4½ years 3 Forms 1 NPP 3 yrs 3 months Prisoner 3.Gambling habit (105 counts) 5 year starting point reduced by 50% for plea and delay Crown 1.Age 51 Scott [2005] CCA 152 S 176A $4.7 million 2½ yrs Sentenced increased to 2½ years 2.Careful and clever scheme 3 counts NPP 22 months by PD NPP 22 months fulltime 3.Money did not go personally to the offender it went to company to pay off debts Noted that 5 years starting point was at the lower end of the available range 4.Severe depressive illness S 172 4 years 1.Age 53(41-45 at time of offence) Martin [2005] CCA 190 (Trustee) $488,875 NPP 3 years PG 2.Pretended to be dead 1 count re: 35 transactions 3.Offence not done for benefit of offender

Conclusion 44 There can be no doubt that the applicant's offending was serious. He was sentenced for 15 acts of fraud each of which was deliberate and involved a significant sum of money. He was in a position of trust being a senior executive of the company. As Dunford J said in Giam (No 2) "offences of this type call for significant sentences." Although in the applicant's case consideration of personal deterrence was not significant, he is unlikely to be employed in a similar position, general deterrence is an important component of his sentence. Offences of this nature can be difficult to detect. When a company places its trust in a senior official it is entitled to expect that trust will be honoured. When it is not, both the viability of that company and its dealings with others, may be compromised. 45 There is nothing arising from the decisions placed before the court which would persuade me that the applicant's sentences were excessive or that the overall term was excessive. It must be remembered that the applicant's dishonesty occurred repeatedly and over a significant period of time. It was not a "one off" opportunistic offence. It was a lengthy series of deliberate acts of dishonesty. Although his Honour made the errors to which I have referred I am not persuaded that any of the individual sentences were excessive. If the sentences were set aside and the applicant resentenced a lesser sentence in respect of sequence 42 may have been appropriate. However, a significantly greater sentence would have been required in relation to sequence 1 having regard to the matters on the Form 1. Furthermore, in my opinion it was not appropriate to provide sentences for each of 14 counts and require them to be served concurrently. They should have been at least divided into three groups and the sentences made partially concurrent. If this had been done the overall sentence would not have been less than that which his Honour imposed and may have been greater. Both the individual sentences and the total sentence were well within the appropriate range. 46 There are two further matters. Firstly, the Crown chose to place matters on a Form 1 which in total exceeded the total amount for which the applicant was required to be sentenced. That was not appropriate and may have given the applicant the benefit of being sentenced for crimes with a lesser total culpability than was appropriate. Secondly, the Form 1 should have been considered with the greater offence, which his Honour in fact did, although contrary to the course which the parties asked him to take. 47 Although I would grant leave to appeal, I would dismiss the appeal. 48 HARRISON J: I have had the benefit of reading the draft judgment of McClellan CJ at CL. I agree with his Honour's reasons and with the orders he proposes. 49 I agree, in particular, with his Honour's remarks at par [30], that the present offences "were objectively serious", involved "deliberate act[s] of dishonesty" and were "committed as part of a sequence extending over a lengthy period". There was of course material before the learned sentencing judge that the period over which the applicant's conduct occurred corresponded significantly with a period during which the applicant's son was struggling with the effects of heroin addiction. Although that material was not wholly satisfactory, a reasonably clear inference from the evidence is that the applicant's conduct was directly related to attempts by him and his family to assist his son through his ordeal.

50 In Aubrey Watts v Regina [2007] NSWCCA 153 I made the following remarks concerning a young offender whose addictions had been central to his criminal conduct: -

"[57] In my experience, narcotic addiction, and the tragic and devastating consequences for the addict, his family and the community, is not something that the addict chooses in the true sense of the word. As in the case of the present applicant, heroin addiction is demonstrably destructive of physical and mental health, social standing and acceptance, and financial security and stability. It puts at risk, and often destroys, the patience and forbearance of loved ones whose own lives are thrown into turmoil. But it does so most often as a response by the addict to painful and otherwise apparently inescapable circumstances. As his Honour accurately noted, these matters can rarely, if ever, excuse criminal behaviour and both first-time and repeat offenders should not misapprehend the seriousness with which the courts regard offences of this kind. Correspondingly, however, the courts are required quite properly to have regard to the often compelling personal circumstances of offenders in each individual case. In my opinion, the subjective factors operating in the present case are particularly compelling.

[58] In the nature of things, courts are limited in the range of options available to them to deal with repeat offenders such as the applicant. There is no doubt that the applicant should have been sentenced to a period of imprisonment. Even if his Honour had had a significantly wider range of sentencing options available to him, it is not possible to see how the present applicant should not have been sentenced to some term of imprisonment. Notions of retribution, punishment and deterrence cannot be wholly discarded or disregarded even in the most deserving of cases. Correspondingly, rehabilitation is also a very important factor to be taken into account, particularly in the case of a young offender such as the applicant.

[59] I have had regard to the significant wisdom, often expressed, to the effect that this Court should not interfere with sentences imposed by other courts in a way that appears to be overly meddlesome or unnecessarily interventionist. There are good reasons for this, not the least of which is the special advantage enjoyed by a sentencing judge in the normal course." 51 In my opinion, these remarks apply by analogy in the present case. Although the applicant was not himself the victim of a relevant addiction, his criminal conduct would not in all probability have occurred but for the condition of his son. The applicant's subjective circumstances therefore warranted close scrutiny by the sentencing judge. 52 However, at least two things need to be noted in this last respect. First, having regard to the degree of objective criminality identified by the Chief Judge, this was never a case in which the applicant could have avoided some form of custodial sentence. Even taking the applicant's strong subjective case into account, such a result would have offended notions of parity with comparable cases, which the Chief Judge has identified. Secondly, the learned sentencing judge clearly did give proper and appropriate consideration to the applicant's unfortunate predicament. He did not fall into any relevant error in the way that he did so. As difficult as it may be for the applicant and his family to accept or even comprehend, the painful events that may have motivated him are matters of mitigation, not exculpation. 53 FULLERTON J: I agree with McClellan CJ at CL. **********

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