R v Hancox[2006] QCA 333

SUPREME COURT OF QUEENSLAND

THE PRESIDENT:  The applicant pleaded guilty on 5 June 2006 to one count of misappropriation of property as an employee of a sum greater than $5,000 between 1 September 1996 and 30 June 1997 and one count of fraud as an employee of a sum greater than $5,000 between 1 July 1997 and 30 September 2001.  The reason for the two charges was because of changes to the criminal law establishing those charges which commenced on 1 July 1997.  On the first count he was sentenced to five and half years' imprisonment and on the second count to four and a half years' imprisonment.  In respect of each count the judge recommended that he be eligible for post-prison

community-based release after 21 months.  The applicant, who is self-represented today, contends that the sentence is manifestly excessive. 

He had no prior criminal convictions and was between 42 and 48 years old at the time of the offences and 53 at sentence.

Count 1 occurred, as I have said, between September 1996 and June 1997 and count 2 between 1 July 1997 and 30 September 2001.  The applicant was employed as the pay master at a margarine plant at Murarrie.  The company operated a large petty cash float ($35,000 per month).  The applicant manipulated the wage records and the petty cash float to defraud the company.  He allowed employees to cash in their benefits such as unused sick leave, long service leave and annual leave for cash payments which he would then enter into the payroll system.

The accounting firm, Deloittes, conducted an audit and found that the applicant was responsible for 200 manual cash wage payments which were fraudulent in that the leave the employee allegedly took was not debited to the employee's leave entitlement.  The total of the overpayments was $435,870.10, of which the applicant received $265,716 and $170,154.10 was paid to the Australian Tax Office.

Some 130 employees gave statements denying that they received the benefits claimed.  Those employees were issued with group certificates at the end of the relevant financial years showing that they received additional income which they had in fact not received and from which tax had been deducted.  In some cases this meant that the income of the employee was inflated.  Some employees suffered financial losses because they lost their right to concessions which they would have received had their income been correctly stated.  The employees had to pay tax at a higher marginal tax rate as a result of the overstated income.  The employees have received the appropriate repayments from the Australian Tax Office. The Australian Tax Office has also refunded the overpayments to the company so that the company at sentence sought compensation of $265,716 from the applicant.  The applicant participated in a record of interview with police and acknowledged his responsibility for the offences.  He denied, however, that he fraudulently misappropriated the money.

The prosecutor at sentence submitted that a six-year term of imprisonment was appropriate, relying on the comparable case of R v. Spalding [2002] QCA 538.

Defence counsel pointed out that it was unfortunate that the applicant had been put into a position of temptation by being placed in charge of both the payroll system and the record-keeping in relation to a large amount of cash.  The applicant had worked for the firm and its predecessor as a clerical worker in various capacities since 1968.  He married in 1980 but his wife had recently died after suffering a terminal illness.  He had a son aged 17.  For the past few years he had been in receipt of a carer's pension and caring for his wife who was suffering a terminal malignant bone tumour from February 2004 which required intensive chemotherapy, surgery and complicated treatment of infection of a wound prosthesis. Her haematologist and oncologist provided a report to the Court stating that the applicant had been a constant and invaluable support to the deceased and their teenage son during this period.  The applicant pleaded guilty in February 2006.  The sentence was adjourned to enable him to care for his wife during the final stage of her illness.  He has also been involved in community work as a coach and manager in junior rugby league.  Since he was charged with the offences, he had reported twice a week to police under his bail conditions.

In sentencing, the primary judge referred to the significant breach of trust in the commission of the offences which affected not only the applicant's employer but 130 employees who also worked for the company.  The applicant had given no meaningful explanation as to where the misappropriated money went.  Compensation was impracticable.  In the four years nine months since the dishonesty was uncovered the applicant had not paid any compensation.  He had, however, pleaded guilty and cooperated in the administration of justice, although the matter had initially been listed for trial and there had been some substantial costly preparation for trial.  Nevertheless, the judge noted that the guilty plea saved the expense of a lengthy trial.  The applicant had not reoffended since committing these offences and had apparently been a good employee from 1969 until 1996.  The Judge noted that the applicant had made a monumental effort in caring for his wife during the period of her terminal illness and that he had a 17-year-old son.

The applicant today in his written and oral submissions emphasises that his wife had battled bone cancer and that his 17-year-old son has had to cope with the loss of his mother and then the applicant's imprisonment.  Understandably, he would like to be able to support his son in the community at this time.  He contends in his written submissions that he would be of more use to the community outside prison and asks for a suspended sentence.

An unfortunate result of the applicant's serious breach of trust as an employee in committing these offences is that his teenage son, who is of an age and in circumstances where he would benefit from the guidance and support of his father especially following the tragic and recent loss of his mother, is without that fatherly support.  Mr Hancox has only himself to blame.  His offending was calculated.  It continued over a lengthy period (more than five years) and involved a great deal of money.  There has been no explanation as to where the defrauded moneys went.  The only matters in the applicant's favour were that he had no prior convictions; that he pleaded guilty and, to some significant extent, cooperated with the authorities; that he had not committed further offences since and he had commendably nursed his wife and supported his son through his wife's lengthy, debilitating and ultimately terminal illness.  The extent and nature of the applicant's offending warranted a salutary deterrent penalty. 

It is supported by many decisions of this Court, for example, the case of Spalding.  Spalding pleaded guilty to similar offences and, like this applicant, was a paymaster who abused his possession of trust as employee.  Spalding received $222,378 and the Tax Office was wrongly paid $80,495 so that the total amount misappropriated was $302,873.  Spalding, like this offender, was a mature man with no prior convictions.  He had a nine-year-old child.  He fully cooperated with the authorities; pleaded guilty at an early stage by way of an ex officio indictment; showed remorse; had a drinking problem and matters raised in a psychologist's report included that he felt victimised in the workplace and that this was a factor leading to his offending.  This Court determined, however, that Spalding's criminal behaviour warranted a substantial custodial sentence as a personal and general deterrent and that the sentence of six years' imprisonment with a recommendation for post-prison community-based release after two years was not excessive.

Spalding clearly demonstrates that the present applicant's sentence of imprisonment for five and a half years with a parole eligibility recommendation after 21 months was also well within the appropriate range.  It was certainly not manifestly excessive.

I would refuse the application.

JERRARD JA:  I agree.

WILSON J:  I agree.

THE PRESIDENT:  That is the order of the Court.