Court of Appeal (WA)|2005-11-22|Before: Gallop J, Steytler P, McLure JA

Thompson v The Queen [2005] WASCA 223 (22 November 2005)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : THOMPSON -v- THE QUEEN [2005] WASCA 223

Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA

Criminal law and procedure - Appeal against sentence - Serious case of fraud - Whether sentence manifestly excessive - Whether sufficient weight given to appellant's mental illness - Whether sufficient consideration given to effect of imprisonment on mentally unwell offender - Sentences ordinarily imposed in serious cases of fraud

Crimes Act 1914 (Cth), s 16A, s 16G, s 29D

Criminal Code (Cth), s 11.1(1), s 16A, s 134.2(1)

National Health Act 1953 (Cth), s 62(1)(f)

Sentencing Legislation Amendment and Repeal Act 2003 (WA), cl 2(1), Sch 1

Respondent : Commonwealth Director of Public Prosecutions

Anderson v The Queen [1981] VicRp 17; [1981] VR 155

Beard v The Queen [2003] WASCA 262

Grubb v The Queen [2002] WASCA 158

Hladin v The State of Western Australia [2005] WASCA 50

Kaye v The Queen [2004] WASCA 227

Lauritsen v The Queen [2000] WASCA 203; (2000) 22 WAR 442

McKenna v The Queen [1999] NSWCCA 358

R v Bahntoff, unreported; SCt of VIC; No 21 of 1998; 14 May 1998

R v Balchin (1974) 9 SASR 64

R v Letteri, unreported; CCA SCt of NSW; Library No 60497 of 1991; 18 March 1992

R v Ottobrino [1999] WASCA 207

R v Ramanah, unreported; DCt of WA (Wisbey DCJ); 11 May 2005

R v Ramdhun unreported; SCt of ACT (Gallop J); No SCC 92 of 1994; 3 August 1995

R v Richards [1999] WASCA 105

R v Scognamiglio (1991) 56 A Crim R 81

Caratti v The Queen [2000] WASCA 279; (2000) 22 WAR 527

Cooley v The State of Western Australia [2005] WASCA 160

Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321

Director of Public Prosecutions v Hamman, unreported; CCA SCt of NSW; Library Nos 60388 and 60457 of 1998; 1 December 1998

Faure v The State of Western Australia [2004] WASCA 315

Li v The Queen [2000] WASCA 340

Markarian v The Queen [2005] HCA 25; (2005) 79 ALJR 1048

Otley v The Queen [2005] WASCA 5

Parry v The Queen [2003] WASCA 222

R v Block [2002] WASCA 26

R v Dalgety [2000] WASCA 10

R v El Karhani (1990) 51 A Crim R 123

R v Holland [2002] WASCA 265

R v Niketic [2002] NSWCCA 425

R v Suarez-Mejia (2002) 131 A Crim R 564

Symonds v The Queen, unreported; CCA SCt of WA; Library No 980616; 28 October 1998

Watson v The Queen [2000] WASCA 119

Wilkie v The State of Western Australia [2005] WASCA 156

1 STEYTLER P: This is an application for leave to appeal against sentence. The appellant pleaded guilty, on the fast-track system, to one count of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth), two counts of attempting to dishonestly obtain a financial advantage contrary to s 11.1(1) and s 134.2(1) of the Criminal Code (Cth) ("Code") and 155 counts of dishonestly obtaining a financial advantage contrary to s 134.2(1) of the Code. The offences involved a total amount of $3,106,447, of which the appellant received $3,068,182.51. Two cheques totalling $38,264.49 (the subject of the two counts of attempted fraud) were not presented for payment by the appellant.

2 The appellant was sentenced to a term of 3 years and 6 months' imprisonment in respect of each count involving an amount between $30,000 and $40,000; to a term of 3 years' imprisonment in respect of each count involving an amount between $20,000 and $30,000; to a term of 2 years and 6 months' imprisonment in respect of each count involving an amount between $10,000 and $20,000; and to a term of 2 years' imprisonment in respect of each count involving less than $10,000. The sentences within each group were directed to be served concurrently with each other. The total sentence of 3 years' imprisonment imposed in respect of the second group (amounts between $20,000 and $30,000) was ordered to be served cumulatively upon the total sentence of 3 years and 6 months' imprisonment imposed in respect of the first group of offences (involving amounts between $30,000 and $40,000). The sentences imposed in respect of the third and fourth groups were directed to be served concurrently with those imposed in respect of the other groups. The appellant was consequently required to serve a total sentence of 6 years and 6 months' imprisonment. The sentencing Judge fixed a non-parole period of 3 years and 3 months. The maximum penalty for each offence is one of 10 years' imprisonment and/or a fine of $110,000.

3 The solitary ground of appeal challenges only the total sentence imposed. This is said to have been so excessive as to manifest error. However, there are two particulars to the ground, and these assert error on the part of the sentencing Judge as regards the reasoning process which led to the sentences imposed. The first contends that the sentencing Judge "failed to place sufficient emphasis on the ... [appellant's] mental illness in relation to the effect which this had on his offending behaviour". The second contends that the sentencing Judge "failed to properly take into account the effect which the ... [appellant's] mental illness would have on him serving a term of imprisonment".

Circumstances leading up to the convictions

4 The appellant was a chartered accountant, a registered tax agent and a registered financial adviser. He graduated in 1987 from Curtin University with a degree in business and accounting. Thereafter, he was employed by various accountancy firms and partnerships.

5 In 1996 he entered into a partnership with two others. The partnership encountered financial problems. Six months after the appellant had joined it, one of the partners, a Mr Dew, left, taking with him many of the "good paying clients". Over the next few years, the partnership accumulated debts of approximately $300,000. The appellant said that he left the partnership in February 2000 in order to set up his own business. However, he was sued for $100,000, being the amount that his former partner, Mr Howe, said was his share of the partnership debts. The appellant signed an agreement to pay that sum, albeit he disputed that he was liable to do so, because he "was sort of at a fairly low point at that stage".

6 In about March 2000 the appellant opened a business as a sole practitioner in Albany in Western Australia under the business name "George Thompson Chartered Accountant". He also operated three family companies.

7 The appellant's offending behaviour took place between about August 1999 and September 2003 (although the period covered by the indictment is from 28 March 2001 to 9 September 2003). During this time, he was engaged by 105 clients to complete income tax returns on their behalf for one or more of the financial years within that period. The charges upon which the appellant was convicted relate to 158 income tax returns completed and lodged by him on behalf of his clients.

8 In his capacity as an accountant and tax agent, the appellant completed the returns on behalf of the taxpayers, using information supplied by them. He then asked the taxpayers to sign the returns so that he could file them with the Australian Tax Office ("ATO"). However, before lodging the signed returns, the appellant altered entries on the returns in order to deceive the ATO into assessing and paying tax refunds when those refunds were either not payable or not payable to the extent claimed. The altered entries varied from return to return. However, many involved the inclusion of dividends or imputation credits received and tax withheld. The appellant also increased deductions which had been claimed, reduced capital gains and partnership losses and amended the amounts of income earned. All of the alterations to the tax returns occurred without the knowledge or permission of the respective taxpayers. The appellant also inserted his own address and bank account details on the tax returns as the appropriate place to which the refund notices could be sent and to which electronic bank transfers of tax refunds could be made.

9 The majority of the refunds were electronically transferred by the ATO into the bank accounts nominated by the appellant on the tax returns. These were accounts at the National Australia Bank, Albany and the Commonwealth Bank, Perth. They were in the names of the appellant's family companies and were controlled by him. In 11 instances, relating to nine separate taxpayers, the ATO issued refunds by cheque to the appellant's nominated address, but in the name of the taxpayers. In these instances, the appellant opened accounts with Macquarie Bank in the names of the taxpayers without their knowledge or authorisation. In order to do so, and so as to give himself the authorisation to move money in and out of the accounts, he forged the signatures of the various taxpayers on their account opening documents. As soon as money was paid into the accounts, he transferred the funds by electronic funds transfer back into the accounts of two of his family companies.

10 The offending was detected when the Macquarie Bank noticed that a large number of accounts had been opened and that the appellant had been authorised to operate all of these accounts on behalf of the account holders. The bank also noticed that on all occasions funds in the account had been withdrawn shortly after the ATO cheques were deposited and cleared.

11 Most of the appellant's clients had not expected to receive a tax refund. In order to conceal what he had done, the appellant did not forward on to them the refund notices which he received from the ATO. Some of the appellant's clients received letters from him formally advising them that they had no tax payable or refund due for that financial year. Those tax payers who queried the fact that no notice of assessment had been received from the ATO were told by the appellant that their tax returns had been lodged and that "everything was okay" and that they "did not have to worry about it" or words to similar effect. On some occasions, the appellant's clients were told by him that they had a tax debt of a certain amount owing to the ATO when, as a consequence of the altered returns, refunds had in fact been claimed from the ATO without their knowledge.

12 The appellant charged his clients accounting fees in order to manage their accounts and their tax affairs. Once they had learned of the appellant's fraud, many of them incurred expense in order to have their tax affairs audited and to engage new accountants.

13 After investigations by Macquarie Bank (and parallel investigations by the ATO itself) had revealed the frauds which had been perpetrated by the appellant, a search warrant was executed at his home and business premises. On 15 November 2003, after learning that he was under investigation, the appellant left Albany for Perth. He took with him two laptop computers from his accountancy practice which contained incriminating data. He threw the computers out of the window of his car whilst driving to Perth. On the same day he boarded a flight from Perth to London, via Cyprus. While in Cyprus, he deposited three cheques totalling $780,000 into a Bank of Cyprus account he had set up in July or September 2003.

14 On 4 December 2003 the appellant returned to Perth in order to "face the music", as he put it. He was met at the airport by the Australian Federal Police ("AFP") and voluntarily accompanied them for questioning at their headquarters. He was then in possession of $232,965.96 in cash and travellers' cheques.

15 The appellant cooperated with the AFP during the investigation and helped them to recover a large portion of the money which he had defrauded from the Commonwealth. He participated in a tape-recorded interview on 16 December 2003, in the course of which he provided details of bank accounts, residential property and other assets held in the names of his companies. The sentencing Judge was told that there was some prospect that the whole of the defrauded money might be recovered.

16 It is important, for reasons which will later become apparent, to set out some of what took place during the appellant's interview by the AFP on 16 December 2003.

17 The appellant was asked why he had committed the frauds against the ATO. He said that, when he started altering entries in tax returns in September 1999, whilst still in partnership with Mr Howe, financial pressure was "one of the reasons" for his offending behaviour. The appellant said that financial pressures continued after he left the partnership and set up his sole practice. This was because he had signed the agreement to pay $100,000 to Howe. He paid off that debt "around early 2002", having done so by means of a number of instalments. These were paid using a mix of business income and money defrauded from the ATO.

18 The appellant said that he was then also under some "emotional strain" as a consequence of setting up his own business and expanding into financial planning. The stock market was down and he had clients regularly telephoning him and "wanting to know why their investments were reducing and falling in value".

19 The appellant accepted that, once he had paid off the partnership debt in early 2002, he was no longer under financial pressure. He acknowledged that, by then, "there was a fair bit of money in the bank from all the various refunds ... [he had] received from the ATO". When asked why he had continued to defraud the ATO after his financial pressures had eased, he said that he did not really have "a particular reason for it". He said that, once clients had started telephoning the ATO regarding their refunds, he was under "a fair bit of strain" and "mentally ... just really wanted to stop it". However, he continued with his activities for reasons which he could not understand. He suggested that he might have "sort of wanted to be found out".

20 The appellant did not offer any mental condition as an excuse for his offending. However, he did make a number of comments which bear upon his then mental state. So, for example, he said, at one point, that, while financial pressure was one of the reasons for his offending, it "probably wasn't the main ... [reason]". He also said that he hadn't made a "rational judgement" to continue the offending from year to year. When asked why he had not stopped offending when his initial money problems were solved, he replied "it was just the pressures of business, and I mean I am sort of seeking counselling at the moment, and psychology and that sort of thing, just to try and work out, you know, the reasons for it, but you know, I can't really say at this stage".

21 When asked what had happened to the money which he had obtained through his frauds, the appellant told the interviewing police officers that he had lost about $400,000 to $500,000 in the course of share trading although he had later been able to recover some $250,000 of that amount. Because he regarded investments in shares as being "too big a risk", most of the proceeds of his frauds was kept in cash. I have mentioned that he had opened an off-shore bank account with the Bank of Cyprus in July or September of 2003. He estimated that there was then approximately $2.1 million in that account. He arranged for it to be returned. Other Australian bank accounts held much smaller sums. Most of the remaining money had been used to purchase properties in Albany and Broome. The appellant had also purchased two oil paintings.

22 When asked why he had moved most of the money off-shore into a Cyprus account, the appellant said that he did so because the pound was up and he could "make use of that exchange rate which was pretty high at the moment and also the interest rate they were paying". He said that there was no other reason why he had moved the money off-shore. He said that he had considered the possibility of moving overseas (and hence beyond the jurisdiction of Australian authorities) but said that this was never a real motivator because "I mean, I'm not dumb, I know that you can trace money anyway, anywhere in the world ...".

23 A number of psychological and psychiatric reports concerning the appellant were made available to the sentencing Judge. From these, a relatively consistent personal history emerged.

24 The appellant was born in the United Kingdom and immigrated to Australia with his parents when he was 4 years old. The family later returned to the United Kingdom where the appellant attended a "sort of seminary school" known as Upholland College for two years when he was about 11 or 12. He was sexually abused by one of the teaching priests at that school and this appears to have had a deep psychological effect on him. None of the reports which have been produced go into any detail in respect of this abuse, other than describing it as "sexual molestation" and "intense and protracted emotional abuse". During this period of his life, the appellant first began to see "apparitions" of his deceased grandfather, who would support and comfort him when he was frightened or struggling to cope with a situation. He recalls his mother as having been "emotionally unavailable", seemingly because she was prone to depression throughout his childhood.

25 After completing his secondary education in Australia, the appellant attended Curtin University where he began to drink heavily to "fit in" and feel more "socially competent". Once financial problems emerged at the partnership into which he had entered with Howe and Dew, his coping strategies included increased binge drinking and avoidance of issues. An existing tendency towards depression and anxiety was exacerbated.

26 Then, in August 1999, one of the appellant's clients, a Mr Morris Stone, committed suicide. The appellant discovered Mr Stone's crushed body during a visit at the latter's farm. This, too, appears to have had a major impact on him. He has described having "flash backs" of the dead body in later times and said that he sometimes had visual delusions of seeing and talking to Mr Stone. His offending behaviour began approximately one month after Mr Stone's suicide. In fact, his first fraudulent income tax return was lodged in respect of Mr Stone.

27 The appellant adopted a practice of selecting alternative names for himself, depending upon his moods. One of these was "Jennifer", the name of an accountant with whom he had previously worked and who had been controlled, capable, confident and efficient. When he was "Jennifer", he was able to work competently and efficiently. In March 2000, he made up a new person, "Philippe", who was extroverted, confident, assertive and "knew everything". When he was "Philippe", the appellant would sometimes behave in a manner that was totally out of character, driving erratically, not sleeping and visiting prostitutes.

28 After the events of 11 September 2001 and the subsequent invasion of Iraq, the appellant appeared to believe that he had a special role in life as some kind of secret agent. He justified some of his offending to himself in terms of retaliation against the government, through the ATO, for its involvement in these world events. He also regarded himself as increasing his and his family's financial security and independence in what he described as an increasingly unpredictable and harsh world. His delusional behaviour became more extreme in about November 2003, when he appeared to believe that he was collecting money in order to fund anti-terrorist activities. He placed this money in the Cyprus bank account.

29 In late 2003, the appellant was prescribed anti-depressant medication by his general practitioner. He began to see a psychologist in early 2004. His first session was with Helen Fowler. This took place some three weeks after he was apprehended by the Federal Police upon his return to Australia, although it seems that, at the time of his arrest, he was briefly assessed at the Mill Street Centre, Bentley Hospital where, according to a report later prepared by a consultant psychiatrist, Dr Raymond Wu, the appellant "was not diagnosed to have any major psychiatric illness". Rather, the diagnosis was one of "situational crisis".

30 Shortly after his first consultation with Dr Fowler, the appellant was admitted as an inpatient at the Perth Clinic, having been assessed as "mentally unstable". He received eight sessions of an "electro-convulsive treatment" programme, in order to assist with his depression. He was a patient at the clinic on four separate occasions before being discharged on 28 September 2004.

31 All of the reports which have been prepared in respect of the appellant by psychologists and psychiatrists appear to be in agreement that he will need substantial ongoing treatment and support and that a relapse in his condition is possible, particularly under stressful circumstances such as a prison setting. He is more likely to suffer less stress and receive a wider range of psychological counselling services in a community setting. However, most of the reports which have been provided comment that the prison will be able to provide the appellant with medication, counselling and psychiatric services. They do not go so far as to suggest that imprisonment would be inappropriate or would dramatically affect the appellant's mental condition.

32 I will deal, next, with some specific aspects of the various reports.

33 Ms Fowler saw the appellant on 17 occasions between 5 January 2004 and 15 September 2004.

34 In a report dated 24 September 2004, she concluded that the appellant:

"... suffers from severe depression, anxiety, dependency and delusional personality characteristics. His negative early childhood experiences appear to have impacted on him, to such an extent as to have severely impaired his adult psychological development ..."

"... a severely psychologically damaged individual where his offending appears to be representative of grossly maladaptive coping strategies that he employed to reduce intense dysphoria and his underlying fear of vulnerability."

36 She concluded that, despite his need for protracted and intense psychological and psychiatric intervention, his risk of re-offending was low.

37 Ms Fowler considered that there was no suggestion or evidence that the appellant suffered from a multiple personalty disorder. She considered that the personas adopted by him were part of his dysfunctional and inadequate coping style. She also noted that the appellant was extremely wary and suspicious of disclosing his beliefs to others. She said that, in her opinion, the stresses at work, the suicide of Mr Stone and the appellant's poor coping skills appear to have "triggered" his offending behaviour.

38 Dr Victoria Pascu, a consultant psychiatrist, interviewed the appellant for two hours at the Perth Clinic on 24 April 2004. She prepared a report dated 7 May 2004 in which she concluded that the appellant then suffered from bipolar affective disorder, encompassing a major depressive episode with melancholic features. She also said that he demonstrated mixed personality traits. She said, in regard to s 27 of the Criminal Code (WA), (which defines insanity for the purposes of the WA Code), that she was of the opinion that the appellant's "mental impairment was not of such [a] degree as to deprive him of the capacity to understand what he is doing, or of the capacity to control his actions, or of the capacity to know that he ought not to do the act or make the omission".

39 She expressed the opinion that the appellant's underlying mood disorder had had an influence on his behaviour, although she said that this was coloured by his alcohol use which was increasingly a problem. She went on to say:

"His unlawful behaviour extended over a four year period. During this time Mr Thompson was not subject to psychotic experiences and impaired judgment, which would allow him to fulfil an insanity defence.

In the month prior to his arrest, however, I believe that Mr Thompson went through a period of affective psychosis, which culminated in him, [sic] travelling overseas to the UK and Cyprus. For this short period of psychosis an insanity defence may be entertained. However the longitudinal history of systematic fraud mitigates against a s27 defence."

40 On 4 March 2004 the appellant was referred by his general practitioner to Dr Martin Chapman, a consultant psychiatrist. After consulting with the appellant, Dr Chapman prepared a report dated 11 October 2004. In it, he said that he agreed with the diagnosis which had been made by Dr Pascu in her report dated 7 May 2004. He found that the appellant was suffering from a number of disorders encompassing bipolar affective disorder, major depression with psychotic features, alcohol dependency and mixed personality traits. He said, as regards the relationship between the appellant's diagnosis and the alleged offences:

"There is a clear correlation between his offending and his mental impairment. Mr Thompson describes symptoms typical of a Severe Mood Disorder complicated by binge alcohol abuse for the duration of his unlawful behaviour. It is likely that he experienced periods of mania and depression as a component of Bipolar Affective Disorder in the last 4 years. The binge alcohol abuse is likely to have arisen as a result of both his past abuse history but more directly from his mental impairment. I understand that the proceeds of his offending were by and large not spent on himself. They were largely retained to allow him to conduct his proposed 'spying activities', which he believed, as a result of his mental impairment. The Bipolar Affective Disorder clearly affected all areas of his life and was not isolated to his offending behaviour. He suffered clear deterioration in his work performance, personal friendships and also in his marriage as a result of his illness."

41 After mentioning that the appellant's mood disorder had clearly influenced his behaviour for the majority of the previous four years, and that the appellant had not disclosed the full extent of his symptoms in his initial interviews due to feelings of embarrassment, Dr Chapman went on to say:

"My opinion therefore differs from Dr Pascu's in the extent to which the psychotic symptoms influenced his behaviour. I feel that psychotic symptoms did play a significant role in his offending behaviour over a prolonged period. Mr Thompson clearly describes a link between his belief that he was a secret agent working for an anti-terrorist group and his behaviour with regard to the false taxation returns. His description of wanting to gather funds and deposit them in Cyprus does appear to be in keeping with his delusional beliefs rather than his own benefit. The other psychotic phenomena at the time such as beliefs of persecution, being followed, having special surveillance set-up on him, certainly support the existence of a psychotic illness influencing his actions."

42 On 6 October 2004, the appellant was interviewed by Mr Mercurio Cicchini, a clinical psychologist.

43 In his report dated 8 October 2004, Mr Cicchini recorded that the appellant had told him that his offending behaviour had started as a reaction to his business difficulties, which had overloaded him with work and responsibilities and in which he had felt trapped and unable to extricate himself due to the financial commitments which he had undertaken. Mr Cicchini said that the appellant reported having experienced core feelings of powerlessness and impotence, which, in turn, had resulted from childhood influences on his personality. He said that much of the appellant's behaviour could be understood in terms of his having a vulnerability to perceived depression, and feelings of impotence and vulnerability which he tried to resolve through his offending behaviour. He said that it was clear from the appellant's own reports that the commencement of his offending behaviour in 1999 was associated with a desire to escape feelings of powerlessness and of being trapped in his work role. He concluded that the continuation of the appellant's offending was motivated by an ongoing excessive pre-occupation with the security needs of his family, although he said that the appellant had indicated that some of the offending was justified in terms of retaliation against the government for its involvement in Iraq and that the appellant had developed a delusional system in that respect in which he perceived himself as a type of agent who was acting to redress these undesirable world events.

44 Mr Cicchini accepted that the appellant had had recurrent psychotic experiences, mainly involving delusional thinking and hallucinations, and that thought disorder had been present. He also accepted that these had sometimes influenced the appellant's actions related to his offending, such as taking funds to Cyprus believing himself to be an agent influencing the war in Iraq. However, he said that it was apparent that the appellant's psychotic behaviour was not a causal factor in the initiating of his offending, but a latter manifestation. He said that the transient but recurring psychotic episodes manifested by the appellant were attributable to schizophrenic-like processes rather than a bipolar condition which, he said, was not supported by the current test results. On the last page of his report he expressed the following conclusion:

"It is concluded that Mr Thompson's extreme offending behaviour was significantly influenced by psychological factors over which he had little insight or control. It appears that his offending behaviour was planned and methodical, with efforts made to achieve success and avoid detection. However the material gains were not an end in themselves but a perceived means of resolving deep-seated core feelings of impotence and helplessness of childhood origins."

45 I have mentioned that Dr Wu noted, in his report (which was dated 10 October 2004), that the appellant had been diagnosed with "situational crisis" shortly after being arrested. However, Dr Wu himself examined the appellant for the first (and only) time on 6 October 2004.

46 Dr Wu considered that the appellant was suffering from symptoms suggestive of a bipolar affective disorder and said that the "differential diagnosis" would be one of major depression with psychotic features. He doubted that the appellant suffered from a schizoaffective disorder. He considered it likely that the appellant was suffering from a serious mental illness which required treatment. He said that, since August 1999, some of the appellant's symptoms had escalated to the point at which they became recognisable as being abnormal and which were clearly adversely affecting his thinking, behaviour and judgement. He said that the onset of this appeared to coincide with significant psychosocial stress, initially precipitated by the discovery of the dead body of his friend. Dr Wu referred, also, to the ensuing partnership problems which the appellant had had, noting that these issues had caused significant psychosocial stresses and that, from that time, there was evidence that the appellant started experiencing psychotic signs and symptoms which remained undetected and which were not brought to attention, allowing him to continue to be able to function and work as an accountant without any apparent major problems.

47 He concluded that the appellant was likely to have had episodes of impaired insight and judgement from September 1999 until such time as he started receiving appropriate psychiatric treatment.

48 The appellant was examined by Dr Ananth Pullela, a consultant forensic psychiatrist on 19 October 2004 and again on 27 July 2005. In his report dated 16 September 2005 (prepared only for the purposes of the appeal and tendered without objection from the respondent), Dr Pullela said that the appellant presented with a history suggestive of a bipolar affective disorder with a past history of both major depressive and hypomanic episodes with psychotic features. During his most recent assessment of the appellant, Dr Pullela found him to be "relatively stable although he did present with some degree of anticipated anxiety about his appeal" and said that he presented with "some depressive features", although there was no evidence of any underlying psychosis.

49 Dr Pullela said that the appellant's mental illness was such that he was likely to experience more stress, and perhaps a more unstable mental state, in a prison setting. He also said that, given the complexity of the appellant's psychiatric and psychological condition, he would recommend that the appellant received intense psychological guidance and counselling, "preferably on a one to one basis". He said that it was highly unlikely that the appellant's "long-term and intense psychological needs" would be met by the limited prison psychological resources. He also said that the appellant was likely to show significant stability in his mental state and better psychological functioning in a close supportive family environment.

The sentencing Judge's approach to the appellant's mental condition

50 The sentencing Judge, after mentioning that the appellant's mental health had been the subject of extensive investigation and submissions, accepted that, if there was a causal link between a mental illness or psychological disorder and offending behaviour, the condition might have an impact upon the type of disposition chosen and its severity. Then, after referring to some of the appellant's background, and to the psychological and psychiatric reports which had been prepared in respect of him, she said that, on balance, she was "of the view that there ... [was] some causal link between at least the later offending behaviour and the mental difficulties suffered ... [by the appellant] but ... [that she was] not necessarily persuaded the initial offending was as a result of ... [the appellant's] mental difficulties", although she accepted that the appellant had been under some financial pressure and had witnessed the aftermath of his friend's suicide. She went on to say that, while she viewed the "mental difficulties" as a mitigating factor, and would take them into account, "especially towards the end", they would "mitigate the sentence to some extent only". A little later in her judgment, in the course of considering the factors required to be considered by her pursuant to s 16A of the Code, she referred again to the impact of the bipolar affective disorder suffered by the appellant and accepted that it had had a "disinhibiting effect" on him, "at least towards the end of ... [his] offending".

51 The sentencing Judge also accepted that a sentence of imprisonment might have a "severe impact" on the appellant due to his mental difficulties and said that his punishment would be moderated as a consequence of that and other mitigating factors to which she had referred.

The relevance of psychiatric illness to sentencing

52 It is settled that serious psychiatric illness not amounting to insanity is relevant to sentencing. In R v Tsiaras [1996] VicRp 26; [1996] 1 VR 398 at 400, Charles and Callaway JJA and Vincent AJA said that this was so in at least the following five ways:

"First, it may reduce the moral culpability of the offence, as distinct from the prisoner's legal responsibility. Where that is so, it affects the punishment that is just in all the circumstances and denunciation of the type of conduct in which the offender engaged is less likely to be a relevant sentencing objective. Second, the prisoner's illness may have a bearing on the kind of sentence that is imposed and the conditions in which it should be served. Third, a prisoner suffering from serious psychiatric illness is not an appropriate vehicle for general deterrence, whether or not the illness played a part in the commission of the offence. The illness may have supervened since that time. Fourth, specific deterrence may be more difficult to achieve and is often not worth pursuing as such. Finally psychiatric illness may mean that a given sentence will weigh more heavily on the prisoner than it would on a person in normal health."

53 Of course, moral culpability would only be lessened where there is a causal connection between the psychiatric illness and the commission of the offence or offences, in the sense that the psychiatric condition must have contributed to the commission of the offence: R v Richards [1999] WASCA 105; R v Paparone [2000] WASCA 127; (2000) 112 A Crim R 190 at [50] and [51] per Murray J; and R v Payne [2002] WASCA 186; (2002) 131 A Crim R 432 at [40]. It must necessarily be the case that, the greater the contribution of the psychiatric illness, the more the moral culpability will be lessened. To the extent that there is a moral lessening of culpability, that should be reflected in the penalty imposed, as it often has been: see, for example, R v Juli (1990) 50 A Crim R 31 at 37; R v Hurd [1988] TASSC 54; (1988) 38 A Crim R 454 at 461, 465; Tsiaras, above, at 400; R v Balchin (1974) 9 SASR 64 at 68; R v Reynolds (1983) 10 A Crim R 30; and Lauritsen v The Queen [2000] WASCA 203; (2000) 22 WAR 442 at 456 - 459.

54 As to personal deterrence, as is implicit from what was said in Tsiaras, much depends upon the nature and effect of the illness. The notion of personal deterrence assumes some rational analysis or reasoning in the course of comparing the likely gains from the crime against the prospect, and likely severity, of punishment, and, where the illness affects the person's ability to make that analysis, there is no justification for affording that consideration the same measure of significance as it might have in the case of a well person: see Payne, above, at [43].

55 As to general deterrence, this is a factor which should often be given little weight in the case of an offender suffering from a mental disorder, such an offender not being an appropriate medium for making an example to others: R v Scognamiglio (1991) 56 A Crim R 81 at 86; Anderson v The Queen [1981] VicRp 17; [1981] VR 155 at 159. In an extreme case, considerations of general deterrence might be totally outweighed by other factors. However, in every case, the relevant factors must be balanced in a manner no different from that which is involved in every sentencing exercise: R v Letteri, unreported; CCA SCt of NSW; Library No 60497 of 1991; 18 March 1992 at 14, per Badgery-Parker J and R v Engert (1995) 84 A Crim R 67 at 70-71, per Gleeson CJ.

56 That brings me to the question whether the sentencing Judge erred in the respects contended for in the particulars to the ground of appeal.

57 As to the second of the particulars, it is plain that the sentencing Judge did take into account the fact that imprisonment might weigh more heavily upon the appellant as a consequence of his illness. It will be apparent from what I have earlier said that she said that the appellant's punishment would be "moderated" as a consequence of this and other mitigating factors to which she referred.

58 As to the first of the particulars, it seems that the sentencing Judge gave the appellant's psychiatric illness only limited significance as a mitigating factor, and that, to the extent that she took it into account, she did so "especially towards the end" of the appellant's period of offending. In adopting this approach she was plainly influenced, to some extent at least, by what was said by Dr Pascu. She said that she found Dr Pascu's report to be "helpful". In the course of referring to that report, she said:

"This was prepared on 7 May 2004 and indicated that you [the appellant] suffer from a mood disorder, namely bipolar effective [sic] disorder. This disorder had influenced your behaviour, although your behaviour was exacerbated by alcohol abuse. Relevantly she [Dr Pascu] indicated that you knew and understood what you were doing and had the capacity to control it. She isolated a period of time at the end of the offending behaviour during which you suffered a period of psychosis."

She went on to say that this was consistent with what had been said by Mr Cicchini in his report dated 8 October 2004.

59 In my respectful opinion, the sentencing Judge took a mistaken view of the relevance of what had been said by Dr Pascu. Dr Pascu's comment that the appellant's mental impairment was not of such a degree as to deprive him of the capacity to understand what he was doing, or the capacity to control his actions, was, as I have earlier said, directed to s 27 of the WA Code and to the question whether or not the appellant could be held criminally responsible for his conduct. That is an issue very different to the question whether, accepting that he was criminally responsible for his conduct (a fact recognised by his pleas of guilty), the appellant's moral culpability was lessened as a consequence of his illness. Moreover, in saying that what had been said by Dr Pascu was consistent with what had been said by Mr Cicchini, the sentencing Judge may have overlooked the fact that Mr Cicchini distinguished between the psychotic episodes to which he referred and the other "psychological factors" mentioned by him over which, he said, the appellant had no control and which significantly influenced his offending behaviour.

60 However, the identification of error does not resolve the appeal. The question remains whether any different sentence should have been passed: see s 689(3) of the WA Code and, now, s 31(4)(a) of the Criminal Appeals Act 2004 (WA).

61 Severe sentences have often been imposed in cases of serious offending of this type. So much is apparent from the following review of some of these cases.

62 In Beard v The Queen [2003] WASCA 262, the appellant was convicted of organised fraud under s 83(1) of the Proceeds of Crime Act 1987 (Cth). His offence involved 310 instances of defrauding the Commonwealth over a three year period. It involved a total of about $600,000. Beard pleaded guilty at a late stage and showed a lack of remorse. He was sentenced to a total term of 9 years' imprisonment. The Court of Criminal Appeal declined to interfere with the sentence imposed.

63 In R v Boian (1997) 96 A Crim R 582, the respondent to a Crown appeal had been convicted of a number of counts of defrauding the Commonwealth under s 29D of the Crimes Act 1914 (Cth). The offences were committed over a period of four years and involved a total amount of $1.7 million. The respondent was also convicted of nine counts at making false statements in writing contrary to s 62(1)(f) of the National Health Act 1953 (Cth). He made full restitution. A Crown appeal succeeded and a sentence of 6 years' imprisonment, with a minimum term of 3 years and 6 months, was replaced by one of 8 years with a non-parole period of 4 years and 6 months. This sentence was imposed when s 16G of the Crimes Act was still in operation and it is consequently equivalent, for comparison purposes, to one of 12 years' imprisonment (both parties in the present case accepted that the provisions of cl 2(1) of Sch 1 of the Sentencing Legislation Amendment and Repeal Act 2003 (WA) have no application in the case of sentences imposed for Commonwealth offences, as to which see Kaye v The Queen [2004] WASCA 227).

64 In R v Ramdhun unreported; SCt of ACT (Gallop J); No SCC 92 of 1994; 3 August 1995, the appellant, an employee of the Customs Department who had falsified diesel rebate claims, was convicted on 13 counts of defrauding the Commonwealth and one of organised fraud and also of two other offences. The fraud charges involved a total amount of $1,420,000. Almost all of that money was recovered. The appellant was sentenced to a term of 8 years' imprisonment with a non-parole period of 4 years.

65 In R v Stitt (1998) 102 A Crim R 428, the appellant pleaded guilty to a count of defrauding the Commonwealth under s 29D of the Crimes Act by falsely claiming refunds for fictitious people from the ATO over a five year period. The total amount involved was $624,509,81. The appellant, who had a small number of previous convictions, pleaded guilty. He did little to assist with restitution and the defrauded money was largely unrecovered. He was sentenced, in New South Wales, to a term of 5 years and 6 months' imprisonment with a non-parole period of 5 years in respect of the fraud charges and to a concurrent term of 12 months in respect of a second charge relating to imposition on the Department of Social Security contrary to s 29B of the Crimes Act. These sentences were affirmed on appeal, save that the non-parole period was reduced to a term of 3 years and 8 months. Once again, this was a case in which s 16G of the Crimes Act operated.

66 In R v Bahntoff, unreported; SCt of VIC; No 21 of 1998; 14 May 1998 the appellant was convicted of 27 counts of defrauding the Commonwealth contrary to s 29D of the Crimes Act, of 19 counts of attempted fraud, of two counts of breach of a restraining order and of one count of operating bank accounts unde a false name. He had pleaded guilty to all counts. He had previous convictions which had resulted in him serving a term of imprisonment. He was sentenced to a total term of 8 years' imprisonment, with a 6 year non-parole period. The sentence was affirmed on appeal.

67 In McKenna v The Queen [1999] NSWCCA 358, the appellant was convicted of 22 counts of fraud, contrary to s 29D of the Crimes Act, involving a total of $558,669. He had a previous conviction for obtaining a benefit by deception. He suffered from a serious medical condition. He was sentenced to a term of 6 years' imprisonment, with a 3 year non parole period at a time when s 16G of the Crimes Act operated. The Court of Appeal effectively confirmed that sentence.

68 In R v Sopher (1993) 70 A Crim R 570, the respondent to the Crown appeal was convicted of 5 counts of obtaining money by false pretences under s 29A of the Crimes Act and of 10 counts of defrauding the Commonwealth under s 29D of that Act. He had assumed five false identities in order to obtain social service benefits. His offending occurred over a 16-year period and resulted in him obtaining some $400,000. He pleaded guilty at an early stage and made restitution. He was 70 years old and in poor health. The Crown appeal was successful and he was sentenced, after the appeal, to a total term of 5 years' imprisonment, with a 3 year non-parole term (again, s 16G of the Crimes Act operated). The Court took into account his age and ill health and the effect, on his wife, of this jail term.

69 In R v Ramanah, unreported; DCt of WA (Wisbey DCJ); 11 May 2005, the defendant was convicted of 184 counts of fraud, contrary to s 29D of the Crimes Act and s 134.2 of the Code. These related to the filing of income tax returns in relation to over 50 clients between 1996 and 2004. As in the present case, Ramanah had fraudulently altered the income tax returns in order to take the benefit of refunds paid by the ATO. The total amount involved was one of $1,585,716. The defendant pleaded guilty at the earliest opportunity and cooperated fully with authorities. He was sentenced to a term of 9 years' imprisonment, with a non-parole period of 4 years and 6 months. However, we were told that there is an appeal pending against the sentence imposed.

70 In Hladin v The State of Western Australia [2005] WASCA 50 I summarised a number of cases of fraud or stealing, all of which involved State offences, most of them a good deal less serious than the offences committed in this case. The range of sentences imposed varied between a total of 18 months' imprisonment (imposed in R v Ottobrino [1999] WASCA 207, in which the respondent to an unsuccessful Crown appeal had been convicted of 51 counts of stealing as a servant, involving approximately $194,500) and a total of 10 years' imprisonment (imposed in Grubb v The Queen [2002] WASCA 158, in which the appellant was convicted of 8 counts of stealing money received subject to a direction and 25 counts of stealing, resulting in losses amounting to $5,205,481).

71 Of course, in this case it is necessary to take into account the appellant's mental illness. It seems to me that it should be accepted, in his favour, that his illness, and other mental problems, did contribute to the commission of these offences. He appears always to have suffered from depression and anxiety and to have had maladaptive coping strategies. So much appears from the reports prepared by Ms Fowler, Dr Pascu and Mr Cicchini. It also appears from the reports prepared by Dr Chapman, Dr Wu and Dr Pullela that the appellant probably suffered from bipolar affective disorder over the whole of the period of his offending. Each of the reports reveals an acceptance of the proposition that there was some causal connection between the appellant's offending and his mental problems.

72 However, it is important to examine the nature and extent of that connection in each case.

73 There seems to be little doubt that the appellant's maladaptive coping strategies, his feelings of powerlessness and impotence, his excessive preoccupation with the security needs of his family and the financial and other stresses which affected him, all played a part in the commencement, and the continuation, of his offending behaviour. That appears quite plainly from the reports prepared by Ms Fowler and Mr Cicchini. However, and without wishing to diminish the importance of factors such as these on human behaviour, the sad truth is that problems of this kind, and even depression, are shared by many others who commit criminal offences. Consequently, while some allowance should be made for these factors, they are, on their own, capable of producing only a relatively modest reduction in the sentence which would otherwise be imposed.

74 More significance should be ascribed, for sentencing purposes, to the bipolar affective disorder (encompassing episodes of severe depression) which was diagnosed by a majority of those who examined the appellant, and to the psychotic episodes which he experienced. As will be apparent, Dr Chapman considered that this illness, and the psychotic symptoms, played a significant role in the appellant's behaviour over a prolonged period. As will also be apparent, Mr Cicchini thought that the appellant's recurrent psychotic experiences had sometimes influenced the appellant's actions related to his offending, although he said that the appellant's psychotic behaviour was not a causal factor in the initiating of the appellant's offending, but a later manifestation. Finally, I have said that Dr Wu considered that the appellant was likely to have had episodes of impaired insight and judgement from September 1999 onwards.

75 However, it is apparent from the evidence that the appellant's illness worsened over time and that it played a much greater role in the later stages of his offending than it did in the earlier stages. That appears, in particular, from the reports of Dr Pascu, Mr Cicchini and Dr Wu. Moreover, it seems also to be clear that, while the illness was probably present throughout the period of the appellant's offending, the psychotic episodes, which had a major impact on his offending behaviour, were periodic in nature. Dr Chapman's report speaks of "periods" of mania and depression. Mr Cicchini, in his report, wrote that the appellant's actions related to his offending were "sometimes" influenced by psychotic experiences. Dr Wu's report speaks of "episodes" of impaired insight and judgement. In these circumstances, and given that the appellant's period of offending (which involved continuing dishonesty, even if returns were only periodically lodged) lasted some four years, it seems impossible to ascribe the whole of his offending behaviour to his illness and its symptoms.

76 That there were other, significant contributing factors seems to be plain from what was said by the appellant in the course of his interview with the AFP on 16 December 2003. Even making some allowance for the fact that the appellant was embarrassed to admit to the symptoms of his illness, it seems plain that the financial stresses which he experienced were a principal cause of the commencement, and early continuation, of the appellant's offending behaviour and that careful planning and mundane considerations accompanied his offending over most of its duration, including the time at which the account with the Bank of Cyprus was opened by the appellant.

77 The review of the sentences imposed in the case of similar offences, set out above, reveals (even leaving to one side the case of Ramanah) that the total sentence imposed in this case was a good deal lower than might be expected in an ordinary case of fraud of this magnitude, even allowing for the other matters in mitigation (and the matters required by s 16A(1) of the Crimes Act to be taken into account), including the appellant's early plea of guilty, remorse and cooperation with authorities and also his former good character, close family relationship and favourable prognosis. The ATO conducts its business in such a way as to depend largely upon the honesty of those who prepare returns and offences of this kind strike at the heart of the system (see, in this respect, Stitt, above, at 430 and R v Pantano (1990) 49 A Crim R 328 at 330). The seriousness with which the legislature views such offences is apparent from the fact that it has provided, in each case, for a maximum penalty of 10 years' imprisonment. In this case the appellant's offending involved careful and sophisticated planning and a range of dishonest conduct over a lengthy period of time. In my opinion, a total sentence of 6 years and 6 months' imprisonment, with a non-parole period of 3 years and 3 months, is of a severity appropriate in all the circumstances of the offence (s 16A(1) of the Crimes Act) and takes sufficient account of the contribution to the appellant's offending of his mental illness and also of the other considerations reflected in the cases to which I have referred, including the additional hardship which the appellant will experience over the period of his imprisonment as a consequence of his illness (as to which see also R v Smith (1987) 44 SASR 587 at 589).

78 It is enough to say, in this last respect, that, while I accept what has been said by Dr Pullela, in particular (similar comments have been made by Ms Fowler, Mr Cicchini and Dr Chapman), as regards the additional stress and greater instability likely to be undergone by the appellant in prison, and the obvious advantages of having the appellant treated outside a prison, I did not understand him, or any other of the expert witnesses, to suggest that imprisonment would have any dramatic or long-term adverse consequences for the appellant's illness. In that circumstance, and given the scale, protracted nature and seriousness of the appellant's offending, it seems to me that a period of imprisonment is required and, as I have said, that the term fixed by the sentencing Judge, and the length of the non-parole period, sufficiently take into account all of the matters to which I have referred.

79 While I would give leave to appeal, I would dismiss the appeal.

Legislation Amendment and Repeal Act 2003

Thompson v The Queen [2005] WASCA 223

At a glance

Court

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Judgment (166 paragraphs)

Thompson v The Queen [2005] WASCA 223 (22 November 2005)

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Legislation Cited (4)

Cases Cited (13)