R v Ward[2008] QCA 222

SUPREME COURT OF QUEENSLAND

MUIR JA:  Justice Mackenzie will deliver the first judgment.

MACKENZIE AJA:  This is an application for leave to appeal against the sentence of five years imprisonment suspended after 20 months for five years for an offence of dishonestly obtaining, as an employee, the sum of $97,810.30, the property of his employer. 

The applicant was employed by a company owned by his sister and brother-in-law whom I will, for convenience, call the victims, which provided security services in the Brisbane area through sub-contractor security officers.  Overall, the applicant was employed by the company for about eight years commencing in 1998.  He started as a security guard and became general manager when his sister and her husband moved to Kingaroy. 

During 2001 it was noticed that there were discrepancies in the company's accounts of an unspecified kind and the applicant was warned but continued as general manager.  That is not a matter relied on by the Crown. 

In May 2005 an audit revealed a large deficiency in the accounts.  The applicant had been raising false invoices and rosters to create the impression that work had been done which had not.  He faxed these documents to his sister who would authorise payments of them to the sub-contractor.  The applicant then, by arrangement with a person connected with the recipient, received the money into his personal account on the pretext that he was aiding the complainant company to engage in a tax dodge.

To conceal the actual deficiency in the company's accounts, he told his sister that the company was owed a substantial sum by a company that was going into receivership.  He backed this claim up by creating a false document purporting to be from an accountancy firm.  He gave her a mobile number, which was his own, telling her that it was the number of an accountant of the firm. 

Whenever she rang the number he would not answer the call.  She became suspicious and made her own inquiries.  She discovered that the company was not in receivership and that it had paid all of its debts to the complainant.  When she confronted the applicant he confessed to taking the money and pretending to be the accountant.

When interviewed by the police he admitted the matters already referred to and also to altering bank slips and forms, with the correct one going to the bank and the falsified one going to his sister.  An agreed schedule of individual transactions shows that there were about 85 separate transactions over a 20 month period.  The services allegedly provided were distributed over the accounts of about 30 clients with two names being shown as the sub-contractor. 

As would be expected, the victim impact statement shows that the applicant's conduct has had a serious ongoing effect on the victims.  The gross breach of trust occurred at a time when the family was dealing with the stresses of health crises involving their parents.  It put strain on the victims' personal and family relationships, their financial position, their business reputation and their preferred lifestyle.  To keep the business from failing they had to sell their Kingaroy acreage and return to Brisbane, renting premises here because they could not afford to buy.

According to what the applicant said, the misappropriation enabled him to live above his means.  A proposal to pay back the amount by instalments came to nothing.  Only one payment of $50 was ever made. 

The applicant was 32 to 33 when the offences were committed.  He had no criminal history.  He offered to plead guilty to an ex officio indictment but that became unworkable because of the inability of the parties to agree as to the sum of money involved.  We were told by his counsel that it was the Crown who had attempted to increase the amount of the defalcation which was the cause of the disagreement, so it should be treated as a timely plea.  He pleaded guilty, in any event, at the end of the committal which was a full hand up committal without cross-examination.  All of those matters have a mitigating effect. 

The aggravating features of the case are the gross breach of trust, the scale of the dishonesty - the theft of an average of just under $5,000 a month - the attempt to brazen it out when confronted with the audit results and the creation of a false explanation with false documentation and a false persona to support it. 

The Crown Prosecutor at sentence proposed a range of four to five years imprisonment with a parole eligibility date or a suspension after 12 to 18 months.  Defence counsel below submitted that the head sentence should be no more than four years.  The matters of a mitigating nature relied on have been referred to previously. 

Defence counsel also informed the sentencing judge that the applicant had no gambling or drug addiction.  He was in financial trouble through living beyond his means and what began with a one-off misappropriation snowballed.  There was also some feeling on the part of the applicant that his remuneration was not commensurate with the demands of his management duties. However it was recognised that this did not justify what had happened.  He had a good employment record including three years with the Victoria Police. 

On the applicant's behalf it was accepted that the dishonesty was a breach of a position of substantial trust, that it was persisted in over 20 months and that sophisticated and dishonest efforts to hide the offending were engaged in.  Further, virtually no compensation had been made.  However, the plea of guilty was an early one and he had no criminal history.  He had made admissions to his sister when confronted ultimately. 

That of course has to be understood in the context of a confession being made only after the attempt by the applicant to persuade his sister otherwise by further fraudulent means that proved ineffective.  It was only her discovery of this when she was trying to verify his story herself that led to the ultimate confrontation and the confession. 

It was submitted that in any event the authorities indicated that an appropriate head sentence for cases of stealing as a servant over a protracted period involving comparable amounts to the present case is in the order of four years.  It is correct that sentences of that level are to be found but even within the relatively limited spectrum applying to cases of this kind, the particular facts of the case dictate the outcome. 

The applicant referred to R v Ma'afu (unreported, Court of Criminal Appeal, Qld, CA No 269 of 1990, 28 February 1991) which is a relatively old case.  The submission was that the sum involved, $77,000, should be treated as if it were a larger sum than the sum involved in this case because of inflation since then.  That of course has some validity but the money was obtained by the simple means, in Ma'afu, of counter-signing cheques signed in blank by the other signatory.  Mitigating circumstances, save for one matter to which reference will be made soon, are fairly comparable. 

In delivering the leading judgment, Justice Cooper said that on the basis of comparative sentences presented on that occasion, a range of custodial sentences appropriate to this type of offence where there is a serious breach of trust over a considerable period of time and where no restitution is made and where the offender has no previous convictions was from three to five years imprisonment. 

In comparing the case before him with R v Powell (unreported, Court of Criminal Appeal, Qld, CA No 90 of 1989, 1 June 1989) he said that the cases were of different levels.  Powell received five years for misappropriating $99,000.  In differentiating between the cases, Justice Cooper noted the larger sum, the scheming in the misappropriation and the absence of anything in the personal circumstances of Powell that could explain her conduct in a mitigating way. 

On the other hand, there were psychological factors in Ma'afu's case and it did so.  Justice Cooper concluded "Because of the personal circumstances of the applicant, I am of the view that she did not fall to be sentenced on the same basis as Powell at the top of the relevant range." 

In my view, Ma'afu does not assist the applicant.  It was also submitted that, even allowing for the principles relating to Attorney-General's appeals, the sentence imposed could not be reconciled with R v Adams; ex parte A-G (Qld) [2006] QCA 312.  The sum of money taken in that case was about $240,000 over a 12 month period, substantially more than in the present case. 

It was another case where the respondent had significant psychological problems which led Justice Holmes, with whom other members of this Court agreed, to say that the sentencing judge had not correctly applied the "delicate balance" between allowing for individual frailty and recognising individual responsibility. 

Too much weight had been given to the respondent's "wretched background and its unhappy consequences in moulding her personality."  There are factors in Adams, apart from the fact that it was an Attorney-General's appeal, that are absent from the present matter. 

R v Hearnden [2002] QCA 258 where $70,000 was taken over an eight month period is a different level of case.  The misappropriation consisted of simply stealing cash by creating false dockets concerning returns to a department store.  He had made substantial restitution of most of the money and promised to pay the rest out of future earnings.  He was said to be genuinely remorseful.  The sentence of three years imprisonment to be suspended after nine months was varied only to the extent of reducing the period before suspension to six months. 

On behalf of the Crown it was submitted that the present case was one where the need for general deterrence was particularly important.  The applicant's conduct was protracted and persistent involving a large number of fraudulent transactions over a 20 month period.  He was at a high level within the company and determinedly covered his tracks when the need arose.  Virtually none of the money had been repaid. 

Further, the criminality of the applicant's misconduct was in no way ameliorated by adverse personal circumstances.  It was also submitted that his close relationship with the victims should be treated as an aggravating feature. 

The comparable cases referred to the Crown can be dealt with in relatively short compass.  R v Power [1998] QCA 32, where $108,000 was taken over a 15 month period and six years imprisonment with a recommendation for parole after two and a half years was imposed, is clearly a worse case.  In particular, the applicant there had a previous recent conviction for an offence of dishonesty. 

R v Adams [1999] QCA 326, where $60,000 was taken over two years, attracted a sentence of four years imprisonment with a recommendation that she be eligible for parole after serving 15 months.  She was only 23 to 25 at the time of offending and was pregnant at the time of sentence.  It was a case of greed, not need.  She converted cheques in the sum of $10,000 initially and when the accounting system was revised she took the remainder of the sum in cash.  The case overall is, in my view, not as serious as the present one. 

R v Allen [2005] QCA 73 is another case where a sentence of four years imprisonment was imposed.  Allen was in the comparable position of authority to the present applicant but had made full restitution.  Otherwise, his antecedents were not dissimilar from the present applicant's. 

In his case, the only variation of sentence was to reduce the period before sentence was suspended from 15 months to nine months.  The reason given was that the original period did not adequately recognise the "unique combination of mitigating circumstances."  The case is also noteworthy in that it describes a utilitarian justification for reducing the sentence where restitution has been made in addition to any issue of remorse. 

President McMurdo said, "Whilst courts would never allow wealthy offenders with the capacity to pay compensation to buy their way out of an appropriate custodial sentence, restitution is, as the respondent concedes, a relevant mitigating factor in that it compensates the victim and benefits society and is often, as here, a tangible demonstration of genuine remorse." 

Finally, R v Parker [2007] QCA 22 where interference with a computer-based system to conceal the frauds was involved and about $230,000 was taken and no restitution made, the head sentence of five years suspended after 21 months for the offence of misappropriation was not disturbed.  It was held that general deterrence was of particular importance in the crimes of deliberate and persistent self-indulgence. 

The review of these authorities indicates that the present case was one where there was no identifiable reason for the commission of the offences except for advancement of the applicant's lifestyle.  The offending behaviour occurred when the applicant was entrusted with the duty of running the day to day operations of the company.  He resorted to further fraudulent behaviour when the audit results showed that there were irregularities.  But for the persistence of his sister, he may have persuaded her that the source of the problem was not him. 

On the basis of the comparable authorities, a five year head sentence may be a substantial one but is appropriate in the circumstances of this case.  It is not manifestly excessive.  The attempt to evade responsibility by further dishonest conduct when challenged is a significant aggravating feature.  Suspension after 20 months, in my view, adequately recognises the mitigating factors.  I would refuse leave to appeal against sentence.

MUIR JA:  I agree.

WILSON J:  I agree. 

MUIR JA:  The order of the Court is that leave to appeal against sentence be refused.  We thank counsel for their assistance and in particular, Mr Wilson, we express our appreciation for your pro bono appearance.

MR WILSON:  Thank you.