SUPREME COURT OF QUEENSLAND

1. de JERSEY CJ:  I have had the advantage of reading the reasons for judgment of Chesterman J. I agree that the application should be refused for the reasons expressed by His Honour.

2. CHESTERMAN J:  On 20 April 2001 the applicant pleaded guilty to an ex officio indictment which charged him with dishonestly applying to his own use money belonging to different persons.   The offence was committed between June 1983 and September 1996.  The amount involved was a little over $6.5 million, $1.8 million of which has not been recovered. 

The applicant was a solicitor who practised for many years on the Gold Coast before moving to practise in northern New South Wales.  The money which he dishonestly used was his clients’.  He is now 56 years of age and was 37 when he embarked on his career of dishonesty.

3. The applicant’s dishonesty occurred in 72 individual transactions and involved 31 victims or sets of victims. They were, for the most part, elderly people who entrusted their money to the applicant to be invested by him on their behalf. In many cases the funds represented security for their retirements.

4. In about September 1996 the applicant was under investigation by the Queensland Law Society for irregularities in the conduct of his practice. He voluntarily surrendered his practising certificate but moved immediately to New South Wales where he commenced practise without notifying the Law Society of that State of what had happened in Queensland. He continued his pattern of defrauding clients while practising in New South Wales. He misappropriated over $2.8 million of which only $250,000 has been recovered.

The applicant came to the attention of the New South Wales Law Society which suspended his practising certificate.  Undeterred, he continued to practise by utilising another solicitor’s certificate without the knowledge or consent of that practitioner.  In 1998 he was struck off the roll of solicitors in Queensland and thereafter his practice in New South Wales was placed into receivership. 

5. On 3 November 1999 the applicant was sentenced in the District Court in New South Wales to an effective term of 5 years’ imprisonment for his fraudulent conduct in that State. An order was made that he serve a minimum term of 3 years. An appeal by the Attorney-General was allowed, and on 1 May 2000 the Court of Criminal Appeal sentenced the applicant to 6½ years’ imprisonment consisting of a minimum term of 4½ years, to commence on 3 November 1999 and expire on 2 May 2004, with an additional term of 2 years to commence on 3 May 2004 and expire on 2 May 2006.

6. The applicant’s persistence in his dishonest conduct was quite audacious. In 1998 when rumours about his trustworthiness had come to the ears of one client he reassured him that his being struck off the roll in Queensland “was a political thing and that the investments were perfectly safe”.

7. For the most part the moneys which the applicant misappropriated were entrusted to him for the purpose of being invested securely on first registered mortgages over real estate. He advised his clients that he could obtain better returns for them than were generally available, and that the investments were safe. He satisfied his clients’ desire for security by showing them forged mortgage documents. On 13 occasions money was paid into a bogus trust account which the applicant maintained in the name of clients who had no knowledge of, or interest in, the moneys standing to their credit in that account. On three occasions the applicant deposited money into his general account. On two occasions money went properly into his trust account but was then misappropriated. On three occasions money went into the applicant’s private bank account. There is no record of what happened to the moneys in the other 53 instances of fraud.

8. To avoid detection the applicant paid clients whom he had defrauded substantial amounts which he said was interest accrued on their investments. In fact the moneys so paid had been misappropriated from other clients.

9. The applicant was sentenced to the maximum term of 10 years’ imprisonment to be served concurrently with the sentences imposed by the courts in New South Wales. A recommendation was made that he be eligible for parole on 3 May 2007. The intent and effect of the sentence was that the applicant would remain in prison for a further term of 3 years after becoming eligible for parole on 2 May 2004 in respect of the New South Wales sentences.

10. The applicant has been transferred to a prison in Queensland pursuant to the Prisoners (Interstate Transfer) Act 1982, the general effect of which is that, upon the transfer, the courts and prison authorities in Queensland assume responsibility to determine the future of the applicant according to the laws of this State.  The sentence imposed by the District Court of New South Wales, as amended by the Court of Criminal Appeal, is deemed to be a sentence imposed by the District Court of Queensland and the direction that the applicant serve a minimum term of 4½ years is deemed to take effect as postponing the applicant’s eligibility to be released on parole pursuant to the relevant Queensland legislation.  The consequence is that when determining the appropriate punishment to inflict upon the applicant the learned sentencing judge was to treat the applicant as though he had been sentenced to serve a term of 6½ years’ imprisonment in Queensland with a recommendation that he not be eligible for parole until he had served 4½ years, ie on 2 May 2004. 

11. The applicant complains that the sentence imposed on him is manifestly excessive. Before passing to consider the submissions it is fitting to consider the impact his dishonesty has had upon those whose money he stole. They are, for the most part, elderly and the money represented their life savings.

Mrs Rossini, wrote:

“We are finding it very difficult to get by on . . . the aged pension and the recent death of my father which we believe was partly due to his only money being stolen by Smith . . . devastated me . . .  We . . . can’t afford counselling or specialists to help us get better . . .  While I write this statement my washing machine has just broken down and the repairman tells me it will cost $300 to fix. I am in tears because I can’t afford to fix it and I can’t afford a new one . . .”

 Mr and Mrs Olsen wrote:

“(We) first met (the applicant) in 1972 . . .  In 1991 . . . he asked what we intended to do with (our) money and suggested . . . a sound secure investment – we followed his advice.  . . . by 1998 we had over $1 million invested . . .  This money represents the total funds resulting from our working lives.  We now know that (the applicant) stole this money for his own purposes.  . . .  We had retired with a comfortable income level but now find that there has been a dramatic reduction in our income and consequently our lifestyle.  We have married daughters and grandchildren in . . . Melbourne and Darwin.  We could afford to fly to visit them from time to time.  That is now no longer possible . . .  Some 18 months ago we moved to an apartment . . . which affords privacy and high security . . .  What was once affordable has become a problem . . .  We have sold our second car but still life is a financial struggle . . .  Both of us have been proud that we could always pay our way . . .  but I regret . . . that we have had now applied for a . . . pension.  An experience I find humiliating . . .  We . . . now become depressed . . .”

12. The applicant’s submission that the sentence imposed on him is manifestly excessive has three bases: The first is that the sentencing judge failed to give proper weight to the evidence concerning the applicant’s psychiatric condition. The second is that the recommendation for parole has the effect that the applicant must serve more than 6 years of a 10 year sentence when, without a recommendation, he would have been eligible for parole after serving 5 years. The third is that the sentence gave no discernible credit for his plea of guilty. It is submitted that the applicant should have been sentenced to a term of 8 years’ imprisonment with a recommendation that he be eligible for parole on 20 April 2005, the usual “halfway mark” of the sentence.

13. The respondent is, I think, correct in describing the applicant as having engaged in a sustained, determined and deliberate course of dishonesty spanning 13 years in violation of the highest level of trust. His dishonesty has devastated the lives of his many, most elderly, victims who are not in a position to recover from his depredations. It is apparent from the recitation of facts that the applicant has shown a high degree of callousness towards the suffering wrought as a consequence of his fraud, and that he continued to encourage clients to invest moneys with the evident intention that he should misappropriate them until extreme action was taken by the Law Societies. It is impossible to imagine a more reprehensible course of conduct or a more disgraceful contravention of the trust he enjoyed as a solicitor.

14. There is evidence that the applicant was severely depressed during some parts of the period in which he offended. Doctor Dwyer, a psychiatrist who has treated the applicant for depression, reported on 23 March 1999 that:

“. . . by the time October 1996 came around, (the applicant) was suffering a serious depressive illness that affected his ability to make proper financial decisions, that affected his ability to even know what sort of danger he was in, and that affected his ability, even when this insight gradually developed, to care about what would happen to him.”

Doctor Dwyer began to treat the applicant in December 1997 for a depressive illness.  It is not surprising that the applicant should have been depressed at that time.  He had been under investigation by the Queensland Law Society for over a year and must have realised that his dishonesty would soon be uncovered.  He had commenced practise in New South Wales by means of deception.  He was aware that his fraud was about to become public.  Dr Dwyer dated the onset of the applicant’s depression to 1992 when his daughter became seriously ill.  It does not help the applicant that he has depressive symptoms dating back to 1992.  His dishonesty commenced nine years earlier.

15. Doctor Curtis who examined the applicant at the request of his solicitors also believed the applicant was depressed, but from a date earlier than that mentioned by Dr Dwyer.  Doctor Curtis thought that the applicant had become progressively more depressed from early adulthood.  He reported:

“. . . I do not consider that his Major Depression, whilst genuine and severe, was of a psychotic depth so as to affect his judgment in the manner of an ambulant psychotic.  On the other hand, I think his overall mental illness and the general fragilities and inadequacies of his mental health were such as to affect his discriminative judgment and his assessment of . . . social realities over a long period of time.  . . . I (consider) that the Major Depression, at some level, was a partial cause or part of a causal chain affecting the behaviour and the orientation of this man towards his responsibilities as a lawyer . . .  On the other hand, it is not a credible proposition . . . to consider that a crime of complicated fraud perpetrated over a significant period of time be put down to a single cause such as a non-psychotic Major Depressive Disorder.”

Doctor Curtis’s conclusion was that:

“. . . the Major Depressive Illness . . . is a relevant backdrop to (the applicant’s) offending and there are probably . . . some causal connections between his long standing mental illness and his crimes. . . .  he has been operating with defective judgments and with an exaggeration of . . . mental denial whereupon . . . he would have been able to persuade himself that what he was doing was not what he was doing or that (it) was not as significant or bad as some might fear.  The second strand involved (was) the careless chronic suicidality of his approach to his life and to his profession . . .”

16. Mr Devereaux submits, correctly in my opinion, that a serious psychiatric illness, such as major depression, is relevant to sentencing in a number of ways. Mental illness which partially explains offending conduct reduces the moral culpability of the offender. As well it becomes inappropriate to impose a sentence as a means of deterring others from similar criminal conduct when the conduct is, by definition, the product of special circumstances. Similarly, there is less need for specific deterrence because, if successfully treated, the partial cause of the offences will dissipate without punishment.

17. Nevertheless the applicant’s depression does not have the consequence that the sentence imposed is manifestly excessive. It is not surprising the applicant should have been depressed when examined by the two doctors. His professional career was in ruins, he was disgraced and was facing the inevitability of a long term of imprisonment. A better appreciation of the extent to which he was affected by depression can be seen by what he did. For a start there is no real evidence of any psychiatric illness prior to 1992. Therefore the first eight years of offending cannot be explained by mental illness. The applicant sought psychiatric assistance in December 1996 but continued to offend despite treatment.

Most significantly, the applicant’s mental agility must have remained high for him to maintain and disguise his complicated system of fraud for so long.  To succeed he had to retain the confidence of the investors, manufacture a trail of false documents and distribute large amounts of money, alleging it to be interest, to allay suspicion.  He was obliged to perform these acts unassisted lest his staff learn of his dishonesty.  In 1996, when he was said to be debilitated by depression he was able to reorganise his affairs to enable a prompt relocation from Queensland to New South Wales.  Such persistence and determination are not commonly found amongst the profoundly depressed. 

18. The applicant’s next point is that it was improper to recommend that the applicant not be eligible for parole until he had served 6 years of the 10 year sentence, more than the 50% of a sentence after which a prisoner would ordinarily be eligible for parole. There is no doubt that such a recommendation may be made in appropriate cases. It has the effect of postponing a prisoner’s eligibility to be released on parole to the recommended date. See R v Griinke [1992] 1 Qd R 196 at 197. 

19. The recommendation cannot be criticised. Without it the applicant could have been released on parole in May 2006, only two years after his release pursuant to the minimum term fixed by the Court of Criminal Appeal. An additional term of actual custody of two years would have been inadequate punishment for the applicant’s crime. The punishment imposed is similar in effect to a sentence of 6 years’ imprisonment made cumulative upon the earlier sentences but with parole eligibility set at the statutory point.  Such a sentence, in my opinion, could not have been criticised.  The fact that a punishment to a like effect has been imposed by different means does not make it susceptible to criticism.

20. The same point is an answer to the applicant’s third submission that his plea of guilty, and to an ex officio indictment, did not result in any discernible discount.  The maximum penalty was imposed and no early recommendation for parole was made.  It must be accepted that generally a plea of guilty will result in a discount to the sentence otherwise appropriate and/or to a recommendation for early parole but there are exceptional cases.  This is one. 

21. Whatever substance there is in the points urged on behalf of the applicant it is overwhelmed by the gravity of the applicant’s criminal conduct and the scale of his dishonesty which is, we were told, unprecedented in this State for the amount misappropriated and the time over which the money was taken. It was a case plainly calling for the imposition of the maximum penalty and the fixing, if the sentence were to be made concurrent, of a release date that ensured that the applicant spent a substantial further period in gaol.

22. In my opinion the application should be refused.

23. MULLINS J:  I agree that the application should be refused for the reasons stated by Chesterman J.