Whyte v R

SIMPSON AJA: On 11 April 2017 the applicant was arraigned in the District Court in Sydney on an indictment that charged her with 27 counts of offences committed between 21 June 2007 and 30 June 2014. The counts were as follows:

The applicant entered a plea of not guilty to each count, and a jury trial proceeded. On 28 April 2017, the jury returned verdicts of guilty on all counts. On 16 August 2017 the trial judge sentenced the applicant to an aggregate term of imprisonment of 11 years commencing on 28 April 2017 and expiring on 27 April 2028, with a non-parole period of 6 years and 6 months, which will expire on 27 October 2023. In compliance with s 53A(2)(b) of the Crimes (Sentencing Procedure Act) 1999 (NSW) (“the Sentencing Procedure Act”), the trial judge specified the indicative sentence for each count. The table below shows the dates on which the offences were committed, the amount of defalcation, and the indicative sentence.

The applicant now seeks leave to appeal against the sentence. She does not challenge the conviction. She proposes two grounds of appeal. They were formulated as follows:

Since the applicant was convicted after trial, it was necessary, for sentencing purposes, that the judge determine the relevant facts, consistent with the jury verdicts. This he did as follows.

The applicant began employment as an office administrator in 2000 with a company associated with Centurne Pty Ltd (“Centurne”). Centurne is a family business, controlled jointly by Mr Graham Jenkins as its general manager and his wife Ms Susan Jenkins as its sole shareholder and director. It is in the business of providing crane hire services, transport, access equipment, concrete pumps and labour to large companies in the building and mining industries.

The applicant performed all office tasks required for the daily operations of Centurne, including booking jobs, bookkeeping, paying accounts, answering client inquiries and invoicing customers. As the business of Centurne grew over the years, the applicant became a trusted employee and was responsible for carrying out important and financially sensitive functions. The applicant and her family also formed a close relationship with Mr and Mrs Jenkins and other members of their family.

Centurne’s customers received invoices or end of month statements, which included instructions as to making payments to an account that Centurne held with Westpac Bank. The applicant, however, provided verbal and written instructions to some customers to make their payments into an account she held with the Commonwealth Bank. The applicant also changed some invoices by replacing Centurne’s bank account details with her own. To avoid detection, the applicant occasionally directed certain larger account holders with Centurne to make payments to the account Centurne held with Westpac Bank instead of her own.

Using that methodology, the applicant used her position of employment to defraud her employer of approximately $2.906 million. This money was used by the applicant for a variety of purposes, including the purchase of property, luxury goods, motor vehicles, a boat, holidays and personal items for herself and her family. In particular, the applicant used some of the funds to support an interest that she and her then husband had in drag racing. To conceal the truth as to the discrepancy between her lifestyle and earnings, the applicant represented to several people that she was receiving financial support from a wealthy relative.

In May 2014, Mr Jenkins became aware of financial irregularities in Centurne’s finances and an audit was undertaken. The applicant was asked to assist by preparing reports. The applicant resigned the following month and gave limited notice. On her last day of employment at Centurne, the applicant deleted 6,600 emails from her work computer. Some of these emails were able to be recovered, and showed correspondence between the applicant and Centurne customers nominating the applicant’s bank details for payment of accounts.

During the trial and afterwards, the applicant alleged that the payments were made to her with the acquiescence of Mr Jenkins and without the knowledge of Mrs Jenkins on the basis of some affection or illicit relationship between them. This, she stated, extended to Centurne sponsoring her and her then husband’s drag racing interests. Mr and Mrs Jenkins denied these claims and, consistent with their verdicts of guilty, the jury clearly rejected them.

Sentencing proceedings took place on 14 August 2017. Before the court for sentencing purposes was a short report from a psychologist (Ms Anita Duffy), Supreme Court consent orders that dealt with civil litigation between Centurne and the applicant and her husband, and a letter from the applicant addressed to the sentencing judge. The applicant did not give oral evidence. Both the Crown and the applicant submitted draft statements of facts on sentence, which were substantially agreed except for a few relatively minor aspects. From that, the following emerges.

The applicant was born in April 1974. She was aged between 33 and 40 years at the time of the offences. She had no criminal history, nor had she had any disciplinary incidents while in custody.

According to the history given to Ms Duffy by the applicant, the applicant was a victim of domestic violence and intimidation by her estranged husband that culminated in her leaving the matrimonial home in December 2016. Ms Duffy considered the applicant to be “an individual who lacks the confidence, assertiveness and initiative to extricate herself from situations of abuse, dominance and control over her”. Ms Duffy administered personality tests that suggested that the applicant was suffering from anxiety, major depression and post-traumatic stress disorder. Ms Duffy stated that the applicant was feeling considerable concern about the wellbeing of her youngest daughter, who is living with her estranged husband while she is in custody.

In her letter directed to the sentencing judge, the applicant stated that she is a private person and is primarily focussed on her commitment to raise and provide for her two children.

The sentencing judge began his Remarks on Sentence by recording the offences for which the applicant was to be sentenced. He noted that the applicant was without prior convictions and had not committed offences whilst on remand, and proceeded to make specific findings of fact concerning the offences. These are as set out above and are not the subject of criticism on this application. He noted that no reparations had yet been made, but that it was expected that about $790,000 from the sale of the applicant’s property and assets would eventually be made available for reparation.

The sentencing judge noted that the offending involved a total of 323 invoices or transactions subsumed in the 27 separate counts with 24 different debtors or creditors of Centurne. He said that:

With respect to aggravating circumstances, he said:

The sentencing judge found that mitigating factors, that the applicant had no prior convictions and was of previous good character, were made out on the balance of probabilities. Although defence counsel urged that other mitigating factors such as an unlikelihood of reoffending and good prospects of rehabilitation were present, the sentencing judge declined to uphold those claims in light of the applicant’s continued maintenance of her innocence.

With respect to totality and accumulation, he said:

Pursuant to s 22A of the Sentencing Procedure Act, the sentencing judge took into account, in the applicant’s favour, that she had facilitated the administration of justice by the manner in which the trial had been conducted. Specifically, he accepted that the trial had been shorter and less complex than it otherwise would have been by the admission of agreed facts. He did not quantify the “adjustment” he made in that respect.

The sentencing judge made a finding of special circumstances pursuant to s 44(2) of the Sentencing Procedure Act on the basis of the accumulation of sentences, it being the applicant’s first time in custody, her mental health conditions, her relatively young age and the necessity for an extended period of rehabilitation to assist in her assimilation back into society. He accordingly varied the statutory ratio between the head sentence and the non-parole period. Section 44(2) provides for a statutory ratio of 75 per cent unless special circumstances are found justifying variation. 75 per cent of 11 years is 8 years and 3 months. The variation was therefore significant – a reduction of 1 year and 9 months of the non-parole period. The non-parole period is 59 per cent of the head sentence.

Finally, the sentencing judge stated:

The sentencing judge proceeded to impose on the applicant the sentence mentioned above.

Having imposed sentence, the judge purported to give directions to the “Corrective Services Commission” to assist the applicant by providing specified forms of treatment, counselling and assessment, to provide her with access to “educational, training, work related skills and vocational programs”, and, as the applicant’s parole date approaches, to obtain an assessment as to the suitability of placement in appropriate residential accommodation and subsequent placement in appropriate work and/or training courses.

He then made a request of the Corrective Services Commission with respect to accelerated classification. Noting that the applicant is eligible for parole at the expiration of the non-parole period, he directed that parole be subject to the supervision and guidance of the Parole Authority and subject to the standard conditions as provided. He recommended that the Parole Authority impose specific conditions.

To the extent that the judge purported to give directions to those administering the sentences, he acted without power. Administration of prisons and the facilities and services available to prisoners is governed by the Crimes (Administration of Sentences) Act 1999 (NSW) and regulations made thereunder. Discretionary decisions, taking account of competition for resources and the claims of other prisoners need to be made by authorities in possession of relevant information. It is inappropriate for a judge to purport to intervene in administrative decisions. “Directions” such as those purportedly made should not be made; they are beyond power. To purport to give such directions in the absence of power is apt to cause confusion to the prison administration, and to engender disrespect when it is known that the “directions” are of no force and effect and can safely be ignored.

It is open to a sentencing judge to make recommendations to authorities administering prisons, but, in my opinion, even these should be made with caution and circumspection. They are not binding, while they may be made in the interests of the particular prisoner concerned, they cannot be made in full knowledge of the resources available or the competing claims for the resources. Such recommendations also can safely be ignored by their recipients.

It was also, in my opinion, inappropriate to make recommendations to the Parole Authority. As the sentence imposed exceeded 3 years (see Sentencing Procedure Act, s 50, now repealed), the judge had no power to order the applicant’s release on parole, and no power to impose conditions (he did not purport to do so, but he did make recommendations). The applicant will not be eligible for release on parole until October 2023. There exists in this State an elaborate structure by which parole is considered and granted and by which appropriate conditions – at the time parole is granted – are imposed. The Parole Authority is well qualified, at the time of granting parole, to determine the conditions to be imposed.

As indicated above, two grounds of appeal are proposed. The first asserts specific error in the finding that the offences were aggravated by being committed for financial gain. The second asserts that the sentence is manifestly excessive.

Section 21A(2) of the Sentencing Procedure Act spells out aggravating factors “to be taken into account in determining the appropriate sentence” to be imposed. One, identified in par (o), is that the offence was committed for financial gain. A suffix to the sub-section provides that the court is not to have regard to any specified aggravating factor that is an element of the offence. That has also been held to apply to any circumstance that is inherent in the offence and therefore to be taken into account on ordinary sentencing principles.

The simple point made on behalf of the applicant is that, self-evidently, financial gain is an element of each of the 27 offences of which she was convicted and it was therefore an error to treat it as an aggravating factor: Clinton v R [2018] NSWCCA 66; Elyard v R [2006] NSWCCA 43; (2006) 45 MVR 402.

The Crown accepted that the offences were indeed committed for financial gain, but referred to decisions of this Court that contemplate that a circumstance that is an element of the offence for which an offender is to be sentenced may nevertheless be taken into account if it is present to an unusual degree. Reference was made to my judgment in R v Yildiz [2006] NSWCCA 97; (2006) 160 A Crim R 218 at [37]. There I said:

The Crown therefore argued that, having regard to the extent of the applicant’s offending, the element of financial gain was present to a greater degree than was necessary to establish the element of obtaining a financial advantage.

For three reasons this submission cannot be accepted. First, it goes, not to the assessment of the gravity of the individual offences, each of which was committed for financial gain, some of which were within “normal” limits, but rather to the extent of the offending over a period of seven years, the repetitive course of conduct in which the applicant engaged. The magnitude of the defalcations is a consideration in the evaluation of the totality of the offending. Totality is a salient consideration, when sentencing under s 53A of the Sentencing Procedure Act, in the selection of the aggregate sentence. To add to the evaluation of totality the further consideration of financial gain beyond what would normally be expected of offences of the kind for which sentence is to be imposed would be to double count.

The second reason for rejecting the submission is that there is nothing in the Remarks on Sentence to indicate that the sentencing judge considered that the extent of financial gain was outside the “norm” and that that was the reason for taking that consideration into account. As mentioned above, some of the offences involved relatively small amounts. If “excessive” financial gain were to be taken into account, it would have to be in the determination of the indicative sentences for the individual offences.

The third reason for rejecting the submission is more complex. On 4 December 2018 the sentencing judge communicated by email with the Registrar of this Court. He said that he agreed that he ought not to have taken into account, as an aggravating factor, that the offence was committed for financial gain, as it is “a constituent of each offence”.

Section 11 of the Criminal Appeal Act 1912 (NSW) provides:

Although the judge’s communication was not expressed to be a report under s 11, that is the most obvious construction to place upon it. Section 11 has been in the Criminal Appeal Act since it was passed in 1912. Reports of trial judges were, no doubt, of significant benefit to this Court in a less technological era, when transcripts were not so readily available. Reports under s 11, however, continue to have some use in the modern era, but that use is somewhat circumscribed.

In R v Sloane [2001] NSWCCA 421; (2001) 126 A Crim R 188, this Court considered the function of reports under s 11. Wood CJ at CL, with whom Studdert and Bell JJ agreed, said:

In SKA v The Queen (2011) 243 CLR 400; [2011] HCA 13, Crennan J gave similar consideration to a report made under s 11. Her Honour said:

Crennan J was in dissent as to the outcome in SKA, but there is no reason to doubt the accuracy of her observations.

In R v Ahmet (1996) 86 A Crim R 316, the Court of Appeal of Victoria also was faced with a report, under different legislation, and which had twice been solicited by the court. Winneke P (with whom Hayne JA and Smith AJA agreed) said, of the purpose of such reports:

In this case, the Crown submitted that, even if the communication is to be treated as a report authorised under s 11, it adds nothing to what can be derived from the transcript of the Remarks on Sentence. That is generally correct, in that it can readily be seen on the transcript that the s 21A(2)(o) factor was taken into account in the determination of the sentence. That raises a question of what use this Court ought to make of the communication. In Sloane, despite misgivings about the nature of the report, the Court did take its contents into account. So also did the Victorian Court of Appeal in Ahmet.

As stated above, there is nothing in the Remarks on Sentence to indicate that the sentencing judge considered that the motivation for the offences, being for financial gain, qualified as an “additional” aggravating factor by reason of the magnitude of the financial gain – that is, to take it beyond the norm. That that was not the reason is confirmed by the email communication, which I am prepared to treat as a s 11 report. In my opinion, the report can be used to that extent and for that purpose.

It follows that the sentencing judge erroneously took into account that the offences were committed for financial gain. It also follows that the exercise of the sentencing discretion has miscarried and Ground 1 must be upheld. This Court must proceed to exercise an independent sentencing discretion: Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37.

Notwithstanding that it is necessary that the Court proceed to resentence, in this case it is appropriate to consider, although briefly, the second ground.

It was accepted on behalf of the applicant that the offending was “systematic, repetitive and persisted over seven years”, involved $2.9 million, and that the applicant showed no remorse for her conduct. As against that, it was pointed out, the applicant had no prior criminal history, was aged 43 at sentence, and was the mother of two daughters. She was described by the psychologist as:

The principal argument advanced on behalf of the applicant lay in a close examination of a number of what were said to be comparable cases, to several of which the sentencing judge was also referred.

I found the summaries of the cases provided informative and helpful. I do not propose to perform an examination of all of them. One, in particular, was presented to the sentencing judge as bearing significant parallels to the present case: Vaughan v R [2011] NSWCCA 4. Ms Vaughan pleaded guilty to five counts of offences against s 178BA; another five offences were taken into account pursuant to Pt 3 Div 3 of the Sentencing Procedure Act. The offences were of a similar nature to those under present consideration: Ms Vaughan was a trusted employee, who, over a seven year period, defrauded her employer of almost $2.8 million. She was sentenced to imprisonment for 5 years with a non-parole period of 3 years. An appeal against sentence was dismissed.

The parallels to the present case lie in the position of trust from which the offences were committed and the period over which they were committed. No motive other than the desire to support “a lavish lifestyle” was disclosed.

As against that, there are significant dissimilarities. Ms Vaughan pleaded guilty at the earliest opportunity and was awarded a reduction of 25 per cent in the sentence that otherwise would have been imposed. That means the starting point was 6 years and 6 months, with a non-parole period of 4 years. Ms Vaughan had voluntarily made significant reparations. She suffered mental health issues that were causally connected to the offending. Most significantly, all offences were committed at a time when the maximum applicable penalty was 5 years.

The decision in Vaughan does not establish a benchmark for the sentencing of the applicant. Nor does a survey of the other cases to which counsel referred. They are informative, and provide a useful check against which to compare the sentence imposed. Historical sentencing information is valuable as a yardstick against which to measure a proposed sentence: Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45.

Far from persuading me that the sentence in this case was manifestly excessive, the sentencing in Vaughan indicates that, although severe, the sentence in this case was within the available range.

It is well recognised that consistency in sentencing is a desirable goal. The consistency that is sought is consistency in the application of the relevant legal principles. That does not mean that a sentencing judge is bound to select a sentence that mirrors sentences imposed in comparable cases.

The ultimate question where a complaint of manifest excess is made is that stated in Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [25]. It is:

The principles, drawn from Markarian and other decisions were summarised by this Court in Hughes v R [2018] NSWCCA 2 at [86]:

I am not able to find, in the circumstances, that the sentence imposed on the applicant was unreasonable or plainly unjust. In particular, the applicant was given a very significant reduction on the statutory proportions of the non-parole period relative to the head sentence.

I would reject this ground of appeal.

Nevertheless, by reason of the error exposed by Ground 1, and the decision in Kentwell, it is necessary that this Court proceed to resentence. For that purpose, the applicant provided two affidavits, one sworn by herself on 21 March 2019, and the second by Karim Rizkalla sworn on 19 March 2019.

The applicant provided evidence of her conduct while in custody. I am prepared to accept that the evidence attests to some efforts at rehabilitation, and that these efforts appear to have borne fruit. The Crown objected to the evidence of Mr Rizkalla, on the basis that it referred to circumstances that pre-dated sentencing. That, however, disappears when this Court sentences afresh.

The fact remains that the applicant engaged, over a sustained period of time, in a deliberate course of conduct which resulted in her employer being deprived of almost $3 million. Even when interviewed by the psychologist, after conviction, she continued to assert her innocence, and attributed the defalcations to:

In my opinion, the aggregate sentence that should be imposed is one of imprisonment for 10 years. While I would adopt the sentencing judge’s finding of special circumstances, I would not vary the statutory proportion to the extent that he did. The sentence that I propose is a term of imprisonment for 10 years with a non-parole period of 6 years and 6 months. That is a reduction of 1 year on the statutory ratio, and results in a non-parole period that is 65 per cent of the head sentence.

It is necessary, by s 53A(2)(b) of the Sentencing Procedure Act, to specify the separate sentences that would have been imposed in respect of the individual offences. In arriving at those sentences, I have borne in mind that the maximum penalty applicable to Counts 1-8 was imprisonment for 5 years; the maximum sentence applicable to the remainder is imprisonment for 10 years. Recognition must be given to the clear intention of the legislature that offences of this kind are to be treated as serious crimes.

I have also borne in mind the progressive criminality evident in the applicant’s conduct. Although she has no prior convictions, she can hardly be said to have been a person of good character throughout the 7 year period.

The custodial sentences I would, if sentencing separately, impose are:

The orders I propose are:

WILSON J: I have had the benefit of reading in draft the judgment of Simpson AJA. I agree with her Honour’s conclusions with respect to each of the proposed grounds of appeal, and with the sentence her Honour would impose on exercising the sentencing discretion afresh.

There is one discrete issue with respect to which I am unable to agree with Simpson AJA, that being the treatment of the email received from the sentencing judge by the Registrar of this Court.

Her Honour has set out the terms of s 11 of the Criminal Appeal Act, and referred to the decisions of R v Sloane, SKA v The Queen, and Ahmet v R, in which the operation of s 11 or a comparable Victorian provision is discussed. A report pursuant to s 11 and the uses to be made of it has also been considered recently in Zhang v R [2018] NSWCCA 82 and Cummins v R [2019] NSWCCA 163.

In the present case the email from the sentencing judge served to concede the error raised by ground 1, in circumstances where the error could be readily discerned from his Honour’s remarks on sentence, without the need for any privately conveyed information from him. I do not agree that his Honour’s email is a s 11 report, and have disregarded it in my consideration of ground 1.

I otherwise agree with Simpson AJA.

IERACE J: I have had the benefit of reading the draft judgments of Simpson AJA and Wilson J and agree with Simpson AJA.

As Simpson AJA noted, the communication from the sentencing judge purports to be an acceptance that, in the circumstances, his Honour ought not to have taken the motive of financial gain into account as an aggravating factor. Simpson AJA treated the communication as a report under s 11 of the Criminal Appeal Act 1912 (NSW) and took it into account as confirming her Honour’s independent analysis of the facts and Remarks on Sentence, to the same effect. The marginal value of the communication is that it removed any doubt that the sentencing judge had treated financial gain as outside the “norm” for such an offence, so that it was legitimately an aggravating factor.

Wilson J has concluded that the communication does not qualify as a s 11 report and disregarded it on that basis. In both Zhang v R [2018] NSWCCA 82 and Cummins v R [2019] NSWCCA 163, this Court disregarded a note from the sentencing judge expressing views on grounds of appeal, because in each case it did not meet any of the purposes for which s 11 was enacted, as those purposes are explained in R v Sloane (2001) 126 A Crim R 188; [2001] NSWCCA 421.

In Sloane, the Court (Wood CJ at CL, Studdert and Bell JJ) similarly concluded that the report in that case did not come within the purposes for which s 11 was enacted. The sentencing judge sought to explain why he had not given reasons for the sentence imposed more fully, which the Court held was not a proper use of a s 11 report. Nevertheless the Court considered it appropriate, in the circumstances of that case, for the report to be taken into account, because it provided some assistance in understanding an aspect of the circumstances in which the offence occurred. The decision in Sloane to admit the report is not inconsistent with the Court in Zhang and Cummins, which disregarded the report as having no redeeming value in the circumstances of those cases.

Accordingly, although the communication from the sentencing judge in this case does not come within the purposes set out in Sloane, its marginal value in confirming that his Honour inappropriately regarded financial gain as an aggravating factor warrants it being taken into account.