R v Smith[2017] QCA 144

SUPREME COURT OF QUEENSLAND

1. HOLMES CJ:  I agree with the reasons of Bond J and with the orders he proposes.
2. MORRISON JA:  I have read the reasons of Bond J and agree with those reasons and the orders his Honour proposes.
3. BOND J:  Prior to 2004, John Michael Houston operated his own floor-laying business as a sole trader.  In May of 2004, he and the applicant agreed that she would take care of all of his business affairs.  She was then aged 46, and Mr Houston had known her for 5 years.  Unfortunately for Mr Houston, the applicant would prove to be a fraudster who would deprive him of his life’s savings.
4. On 3 May 2016, the applicant pleaded guilty to two counts of fraud.  She was convicted and sentenced to 5 years imprisonment, suspended after serving 2 years, with an operational period of 5 years.  She has sought leave to appeal against the sentence.  For the following reasons, the application (together with an application for leave to adduce further evidence) should be refused.
5. After reaching the agreement to take care of Mr Houston’s business affairs, the applicant set up All Points Flooring Pty Ltd, a private company of which Mr Houston was the sole shareholder and director, as the vehicle by which Mr Houston would carry on his business.  She also set up a business bank account with the Commonwealth Bank (the APF account).  Outgoings such as telephone bills, computer costs and so on were to be paid by the company.
6. The applicant was in charge of all book-keeping and accountancy matters.  Her role included filing tax returns for Mr Houston and the company, paying tax to the Australian Taxation Office, paying company fees to ASIC, and paying all other bills and liabilities, including Telstra, rent, car insurance, public liability and income protection insurance, and child support.
7. The fraud occurred over a period of approximately 4 years and 8 months, from January 2007 to August 2011.  During this period the applicant performed the role described in the previous paragraph, while Mr Houston carried on the day-to-day running of the business, including procuring work, ordering materials, performing the work, and issuing invoices to clients.  Clients would deposit payment into the APF account.  The applicant was to pay “wages” into Mr Houston's personal account.  Only the applicant had access to the Netbank facility for the APF account, but Mr Houston had access to the APF account through an EFTPOS card.
8. During the period of the fraud the applicant used the Netbank facility to transfer sums of money from the APF account to her personal bank accounts on over 500 occasions.  She transferred monies back on only 2 occasions.  Not all of the transfers were for a fraudulent purpose.  The quantum of the amount she fraudulently applied to her own use, in the form of paying living expenses, was $150,000.  In August 2011, the applicant repaid $50,000 to Mr Houston, leaving an amount of $100,000 outstanding.
9. She made attempts to cover her tracks, including by entering false “payment references” into the Netbank forms (e.g. “ATO” or “tax” or “ASIC” or the use of the name of a company creditor, “Fort Knox”).  However, Fort Knox accounts were paid directly by the company and no monies were ever paid to the ATO on behalf of the company or Mr Houston from 2007 to 2011.  Indeed, no income tax returns were lodged for either the company or Mr Houston in that period.  No fees were paid to ASIC after 2006, and ASIC deregistered the company in 2008.
10. Mr Houston became suspicious of the applicant’s activities as early as 2008, when a creditor told him his account had not been paid.  He was also told that he was in arrears in child support and rent.  So far as rent was concerned, the applicant told him that there must have been an accounting problem at the real estate agent’s end, and that she would fix the problem.
11. Mr Houston started to check the bank balance of the APF account a few times per week.  He noticed regular weekly deductions from it, some of which were to an account number that he did not recognise.
12. He spoke to the defendant.  She claimed that she was taking money out of the APF account for his savings and that he had around $100,000 in savings.  He asked for proof, and she said she would get him the documents.
13. A few weeks later, upon further prompting, the applicant gave Mr Houston some “transfer codes” but no information about dates or amounts.  He said he would come to her house to speak to her about it.  To explain where the money had gone she later created three fake documents:
    1. a term deposit slip purporting to show that $20,000 was held on account of John Houston in trust for his daughter for 12 months, starting 27 November 2009 with a maturity date of 14 February 2011;
    2. a term deposit slip purporting to show that $85,000 was held on account of John Houston in trust for his daughter for 12 months, starting 8 February 2010 with a maturity date of 30 November 2010; and
    3. an ING bank statement purporting to show that $22,000 was held in an account in the name of the company.
14. She gave him the two forged deposit slips in early 2010 when he came to her home.  She sent him the ING bank statement by facsimile on 29 April 2010.  In fact, none of those deposits existed.  The two term deposits had an identical account number, which was for an account in the applicant’s name and which had, in any event, been closed since 2001.  The ING account in fact had a balance under $10.
15. Mr Houston did not realise the documents were fake and was satisfied that his money was safe.  He only discovered the documents were false and the money was gone when he presented the term deposit slips to the bank in 2011 to collect the money.  He later discovered that the applicant had not lodged tax returns since 2004 and the company had been deregistered.  He told her to give him all of the records for the company, but she never gave him anything except a USB which turned out to be blank.
16. The effect on Mr Houston was profound.  Amongst other things:
    1. He was betrayed by a person who he thought was a trusted friend.
    2. He was found to owe a significant sum in unpaid taxes and had to enter into an agreement to pay with the ATO.  That destroyed his previously perfect credit rating.
    3. He had thought that by hard work and by scrimping and saving and sacrificing over the years, he had provided a nest egg for his daughter, but that proved false.  He was left with debts to the child support agency.
    4. He was forced to renege on a deal he made with his dying father to buy his parents’ house, so that they might have funds to enjoy their remaining years.
    5. He has had enormous worry and emotional stress about his future and the financial consequences of the applicant’s actions.
17. On 17 February 2014, the applicant attended Burpengary Police Station.  She declined to participate in an interview, and was charged.
18. Ultimately, on the morning of her District Court trial on 3 May 2016, the applicant pleaded guilty to two counts of fraud, contrary to ss 408C(1)(a)(i) and 408C(2)(d) of the Criminal Code (Qld).  The first count covered the period from 1 January 2007 to 30 November 2008 and the second covered the period from 6 December 2008 to 20 August 2011.  The maximum penalty for the first count was 10 years imprisonment and for the second count, 12 years imprisonment.
19. As I have earlier mentioned, she was sentenced to 5 years imprisonment, suspended after serving 2 years, with an operational period of 5 years.  In reaching that sentence, the learned sentencing judge took into account the following matters:
    1. The applicant had a criminal history in that in 1997 she had pleaded “guilty” to not dissimilar offending involving more than $30,000.  It was only a few years after that that she would meet Mr Houston.
    2. The offences were serious.  The total sum involved was $150,000, obtained in the course of hundreds of transactions.  The offending was brazen, systematic, persistent, and to an extent sophisticated.  It was a great breach of the trust reposed in her by Mr Houston.  It had been continued notwithstanding his first becoming suspicious in 2008, she going to significant lengths to conceal the fraud from him, including by the creation of the three false documents.
    3. Mr Houston had suffered very greatly by trusting her.
    4. After a young life which had indicated some promise, the applicant had been dogged by significant illness.  She had health issues which caused her significant difficulty on a day-to-day basis.  But there was no evidence that they could not be appropriately managed in prison.
    5. There was very little evidence of remorse.  His Honour was, however, prepared to give her some consideration in that regard because of her guilty plea.  Her guilty plea could not be described as early, but had saved the state the cost of a trial.
    6. General and specific deterrence were of critical importance.  So was the need for denunciation.
    7. His consideration of comparable cases led him to conclude that the appropriate range of sentence was four to six years, and not the three and a half to four years which her counsel had suggested.
20. The applicant applies to this Court for leave to appeal against her sentence, on the ground that it was manifestly excessive.  She also applies for leave to adduce further evidence.  Before this Court she appeared for herself.
21. It is appropriate to deal first with the application for leave to adduce further evidence.
22. The evidence consists of an affidavit of Ms Smith which exhibited certain hospital records, doctors’ records, and bank statements.  The evidence was conceded to be evidence which could reasonably have been obtained and used at the time of her original sentence.  Using the distinction referred to in R v Spina [2012] QCA 179 at [32], the evidence was new evidence rather than fresh evidence.  Of such evidence, McMurdo P (with whom Fraser JA and Margaret Wilson AJA agreed) observed in Spina at [34] (citations omitted):

Appellate courts recognise, however, that there remains a residual discretion in exceptional cases to receive new or further evidence which is not fresh in the legal sense where to refuse to do so would result in a miscarriage of justice …  In determining an appeal which turns on new or further evidence, there are strictly two questions.  The first is whether the court should receive the evidence.  The second is whether that evidence, if received, when combined with the evidence at trial, requires that the conviction be set aside to avoid a miscarriage of justice.  Frequently those two questions can be conveniently dealt with together.

23. The basis on which the applicant contended the new bank statement evidence should be admitted was that it was probative of the proposition that she had re-paid Mr Houston $100,000 not $50,000.  However, it did not do that.  It was an agreed fact at sentence that $50,000 had been repaid in August 2011.  Even if I was prepared to accept the reliability of copy documents produced by the applicant and marked up in handwriting, the most they would show was that $50,000 was paid by $20,000 in August 2011 and $30,000 in September 2011.  There was no material which would demonstrate that the $50,000 was a further $50,000 on top of the amount which was the subject of the agreed fact.
24. The other evidence was somehow said to be probative of the fact that three identified “fraudulent” bank transfers (which presumably had gone to making up the $150,000 which had been the subject of the agreed facts on which she was sentenced) could not have been made by the applicant as she was hospitalised at the time and the hospital had a blocking system which would have prevented internet transfers.  This was a hopeless proposition as there was no evidence to support the assertion about the blocking system.  And even if the system had been proved, the material did not demonstrate she was in hospital and subject to the blocking system at the times the transfers were made.
25. This is an occasion on which the two questions identified in Spina may be dealt with together.  There is no reason to exercise the discretion in favour of admission and no reason to think that if admitted it would disclose any miscarriage of justice.  The application to adduce new evidence should be refused.
26. I turn next to consider whether the sentence imposed by the learned sentencing judge was manifestly excessive.  In order to succeed, the applicant would have to persuade this Court that, having regard to all of the relevant sentencing factors, including the degree to which the impugned sentence differs from sentences that have been imposed in comparable cases, it should be driven to conclude that there must have been some misapplication of principle by the sentencing judge: R v Pham (2015) 256 CLR 550 at [28] per French CJ, Keane and Nettle JJ.
27. The considerations which influenced the learned sentencing judge were those which are identified at [19] above.  His Honour was correct to conclude that, having regard to the circumstances identified by him, the appropriate range for the offence before him was between 4 and 6 years.  The case to which he referred was R v Sommerfeld [2009] QCA 333, at [28] to [33].
28. I agree with the Crown’s submission in relation to Sommerfeld that although the applicant’s offending extended over a significantly greater period of time, otherwise many features of comparability exist between the applicant’s conduct and circumstances and those in Sommerfeld: both cases involved similar loss figures, both involved false denials in the face of confrontation, and both offenders appeared before the sentencing court with a criminal history involving dishonest offending.  The range of 4 to 6 years, which the Court of Appeal in Sommerfeld found had been supported by two earlier Queensland Court of Appeal decisions, was equally appropriate to the applicant.
29. The applicant did not advance any submission that Sommerfeld was not relevantly comparable.  Nor did she identify sentences or features from any other cases which might support her argument.
30. In my view the sentence imposed on the applicant was not manifestly excessive.  There is no reason to conclude that there must have been some misapplication of principle by the sentencing judge.
31. The applications for leave to adduce further evidence and for leave to appeal against sentence should be refused.