The Queen v Davidson[1998] QCA 130

COURT OF APPEAL

PINCUS JA

McPHERSON JA

DOWSETT J

CA No 435 of 1997

THE QUEEN

v.

WILLIAM JAMES HENRY DAVIDSON  Applicant

BRISBANE

DATE 19/03/98

JUDGMENT

DOWSETT J:  The applicant pleaded guilty on 27 October 1997 to 15 counts of wilful false promise. There were 11 different complainants who lost in total $765,262.28. The losses suffered by individual complainants varied from $12,900 to $251,000.

The applicant's criminal conduct involved his falsely promising that he would place funds entrusted to him by each complainant in prudent investments which would return in excess of 7 per cent per annum. It is not clear where all of the money ended up, but it is common ground that $90,000 was spent for the applicant's own benefit, $30,000 for his daughters and $327,000 was invested in his business.

The conduct persisted over about four years from February 1991 until February 1995. A number of the complainants were defrauded on more than one occasion. They were, in general, persons who could ill-afford to lose such relatively large sums. In may cases the money came from superannuation or insurance pay outs.

There were two accomplices, both of whom have been dealt with. One, Robertson, pleaded guilty to three counts of misappropriation involving about $300,000 of which he received $70,000. He was sentenced to three years imprisonment with a recommendation for parole after six months.

Another, Cockcroft, pleaded guilty to three counts of misappropriation involving $75,000, all of which went to the benefit of the present applicant or Robertson. He was sentenced to 12 months imprisonment with a recommendation for parole after two months.

The present applicant was treated as the motivating force behind the operation. Obviously, his criminal misconduct was more extensive and involved more substantial financial consequences to other than did that of Robertson or Cockcroft. It seems also that in Robertson's case, the money he took was taken in lieu of wages as he was not being paid by the applicant. Further, it seems that Robertson was a person who experienced ongoing psychological problems. As I have already said his position was, relative to the present applicant, subordinate.

The applicant had no previous convictions, was aged 54 years, married with three children aged 17, 20 and 21. They were financially dependent on their parents as they were studying. The applicant passed himself off as an experienced investment adviser. It is not clear to me what his experience in the field may have been.

In sentencing him the learned sentencing Judge discounted certain character references because, as she said, "The person they portray is entirely different from the one who has committed the offences before me."  Her Honour accepted that the applicant had committed the offences because of business difficulties.

On counts 1 to 6, 8, 10 and 12 he was sentenced to imprisonment for three years, such sentences to be concurrent. On counts 14, 16, 18, 20, 22 and 23 he was sentenced to imprisonment for three and a half years, such sentences to be concurrent with one another but cumulative upon the three year sentence.

Her Honour recommended that he be considered for parole after serving two and a half years. As the reason for the longer sentences for the second group of offences and for the sentences being cumulative, her Honour said:

"As the years went by your conduct became even more deliberate. You were dealing with people who had already lost as a result of your wilfully false promises. Yet you continued to make further wilfully false promises and inflict further losses on an even greater number of victims."

The sentences of three years related to offences committed between February 1991 and October 1993. The longer sentences related to offences committed between February 1994 and February 1995. Of the offences in the second group two were committed against persons who were also complainants in respect of offences in the first group. On the other hand, in the first group, count 2 on 28 May 1991, count 10 on 1 October 1993, and count 12 on 4 October 1993 were all committed against the one complainant.

If her Honour is taken as meaning that all offences in the second group were committed against persons against whom the applicant had previously offended, then the statement is not precisely correct. If, however, her Honour meant that the applicant had opportunity to realise the error of his ways but continued to offend, including further exploitation of persons he had previously exploited, then the observation is fair enough. That is the view which I prefer to take of her Honour's observations.

The major thrust of the application for leave to appeal is that her Honour was in error in imposing a cumulative sentence with respect to the second group of charges. I should say for the sake of completeness that the maximum penalty for each of the charges was five years. Unfortunately for the applicant, there appears to be a substantial body of cases justifying her Honour's approach.

In Finn (CA 170 of 1984) the Court of Criminal Appeal considered the case of an applicant convicted of four counts of fraud committed over a period of about nine months and involving about $100,000 in aggregate, of which $78,000 was not recovered. He had some previous convictions and stood his trial. He was sentenced to imprisonment for three years on the first count and to four years on each of the other three counts, which sentences were to be served concurrently as amongst themselves, but to be cumulative upon the sentence on count 1, giving a total of seven years. At page 5 of the reasons, the Chief Justice said:

"I appreciate that this Court does not in many cases and then only with some hesitation support the imposition of cumulative sentences, but I think the seriousness and gravity of the offences here were such that it could not be said that his Honour was not justified in making the two periods of sentence cumulative one upon the other."

In Armstrong (CA 6 of 1987) the Court of Criminal Appeal considered the case of an applicant convicted of nine counts of fraud of various kinds after a lengthy trial. As in the present case, in respect of each of his convictions, that applicant was liable to a maximum penalty of five years. He had no previous convictions. The amount lost was very substantial. The learned trial Judge imposed sentences of five years on eight counts and two years on another count to be served cumulatively, giving a total of seven years.

In dealing with the application for leave to appeal against sentence, Shepherdson J said:

"In the instant case the appellant followed a ruthless, systematic and well planned practice which resulted in innocent victims being defrauded of over $300,000. In one case one victim lost $107,000. The effective sentence adequately dealt with the appellant despite the absence of any prior conviction."

No criticism was made of the cumulative nature of the sentencing process used to reach the appropriate total.

In Hyland (CA 300 of 1996) this Court considered the case of an applicant convicted of eight counts of wilful false promise and one of false pretences. He had been sentenced to various periods of imprisonment ranging from two years to four and a half years. It was submitted in support of the application that the period of four and a half years was too close to the prescribed maximum penalty.

In that case Thomas J observed:

"The offences were particularly cruel and very serious. Counsel for the Crown Prosecutor had urged upon the sentencing Judge the imposition of a cumulative sentence with respect to the last count which would have, for argument's sake, allowed the Court to sentence the offender to the maximum of five years on the other counts and impose an additional, say, two years on the final count.

Such a course was upheld by the Court of Criminal Appeal in the Queen v. Armstrong and the effective overall sentences of seven years were not disturbed. However, the learned sentencing Judge did not accept that invitation. Instead, he imposed a sentence of four and a half years which is less than the maximum." 

Clearly, the possible use of a cumulative sentence was not disapproved of in that case.

In Jones (CA 393 of 1997) this Court considered the case of an applicant who had been convicted of two groups of offences of dishonesty for which he had been sentenced to a total of six years imprisonment; four years for offences committed in 1992 and two years cumulative for offences committed in 1996, with a recommendation for parole after two years. The actual amount involved in that case was about $76,820.90. Because of an error in the factual basis upon which the sentences had been passed, this Court chose to intervene, apparently considering that the error may have affected the outcome.

The sentences for the first group of offences were reduced to three years and those for the second group to 18 months. The sentences remained cumulative, totalling four years and six months. There was a recommendation for parole after 18 months. Again, there was no challenge to the appropriateness in the circumstances, of cumulative sentences.

In the Queen v. Heiser (CAs 506, 507 and 513 of 1996) this Court expressly approved this approach. At page 3 the Court said:

"However, there is no principle that no matter how many offences are committed, how long the period over which they are committed or how much is involved, cumulative sentences exceeding the maximum permissible for a single offence should never be imposed. It is necessary to ensure that the punishment imposed is proportionate to the total criminality and it is permissible to achieve this by requiring some sentences to be cumulative upon others."

Finally, in Tyson (CA 272 of 1992) this Court considered an application by an appellant convicted of five counts of pecuniary dishonesty for which he was sentenced in respect of one count, to 12 months imprisonment and on the other counts to five years, the sentences to be cumulative. He had some previous convictions for offences of dishonesty. The offences occurred over a period of two years and involved a total loss in excess of $150,000. Davies JA said:

"It seems to me, having regard to the circumstances which I have mentioned, that is that the offences all related to one general scheme and that there were several sets of victims, though in the course of what appeared to be a general conduct of selling one scheme, I think the appropriate course should have been for his Honour to treat all the offences as concurrent offences."

The sentences in that case were made concurrent. In that case all of the offences related to the marketing of a particular product over a period of two years.

Whether or not a cumulative sentence will be justified in a particular case will depend very much upon the circumstances. In the present case, the offences extended over four years.   This alone might be seen as justifying our distinguishing the decision in Tyson. If it was permissible to impose cumulative sentences in the case of Jones, where the offences were in two clusters in 1992 and 1996, it is difficult to see any logical reason why a person who commits offences in 1991 and 1995 and also in between those years, ought to be treated more leniently. Further, it is reasonable to infer, as her Honour did, that demonstrated persistent wrongdoing over an extended period of time indicates a lack of remorse concerning previous misconduct and a determination to persevere in such misconduct for the future. Where some of the victims are, as it were, repeats, the situation is aggravated.

There is no reason to believe that in fixing the maximum penalty of five years for offences of this kind, Parliament intended that to be the maximum penalty for any number of such offences committed during an identifiable period. As in all such cases, it was obviously intended that the Court look to the overall criminality of the conduct and ensure that the total outcome reflects the legitimate expectations of the community as to the sentencing process, whilst at the same time reflecting the peculiar circumstances of the offender.

The other basis for attacking the sentence was lack of parity as compared with the sentence passed against Robertson. As I have demonstrated already, however, there were numerous reasons for treating Robertson more leniently, particularly his much less significant participation in the project, the smaller amount of money for which he was responsible and his own personal conditions. I do not see any reason in this case for concluding that the treatment of Robertson could be seen as a basis for a perception that the present applicant was too harshly dealt with.

Given the very large amount of money lost by individual victims in this case, it is impossible to say that the total sentence was out of line with the others to which I have referred, notwithstanding the fact that the applicant was without previous convictions and pleaded guilty on the morning of his trial. In particular, the recommendation as to parole recognised those factors. Nor can I see any error in principle in using the device of cumulative sentences to bring about that appropriate result where, as here, the conduct was directed against numerous victims over an extended period of time. The sentences represent an entirely appropriate exercise of the sentencing discretion. I would refuse leave to appeal.

PINCUS JA:  I agree with the reasons which have been given and would add this: that one may gain the impression that those who are prosecuted for fraudulent activity may sometimes be considered unlucky. Much criminal fraud goes unpunished by the law yet when detected and prosecuted it cannot be treated lightly. Those who engage in defrauding the public must be made to appreciate that heavy penalties may lie in wait for them. I agree with the order proposed.

McPHERSON JA:  I also agree and for my part I wish to refer only to one remark of her Honour in the course of sentencing which, in fact, does not bear directly on the quantum of the sentence or the application in this case. What her Honour said was, that with reference to investment advisers that there were few controls, regulations, duties to report, licensing and so on. From what I have been able to discover in the course of looking at the Corporations Law, her Honour's remarks to that effect may not be correct. Section 781 of the Corporations Law provides that a person must not carry on an investment advice business or hold out that the person is an investment adviser unless the person is a licensee or an exempt investment adviser.

I have not been concerned to follow up, or been able to follow up, the precise convolutions of the definitions of those provisions; but if, as rather appears from s.781, an investment advice business is what one would expect it to be, then it must be said that there is a very detailed series of provisions in Part 7.3 of the Corporations Law applicable to persons who carry on businesses like this.

Why it was not discovered that the applicant was doing so at any time in the four to five years when he was perpetrating these frauds is not clear to me; but it may be that he was not advertising publicly but rather preying on people he knew to provide the funds for his criminal enterprise.

I mention that only because it would appear that, if anything, there may have been a failure in the policing of the Act, rather than a failure of legislative provision of covering or restricting or regulating it. I have no remarks beyond that which I wish to add, except that I agree with the reasons of Mr Justice Dowsett for dismissing this application.

PINCUS JA:  The application is refused.