Court of Criminal Appeal Supreme Court New South Wales Medium Neutral Citation: Abellanoza v R [2021] NSWCCA 4 Hearing dates: 5 August 2020 Decision date: 08 February 2021 Before: Meagher JA at [1]; Fullerton J at [4]; Button J at [39] Decision: (1) Leave to appeal granted. (2) Appeal dismissed. Catchwords: CRIME — appeal against sentence — dishonestly obtain financial advantage by deception — money laundering — ongoing fraud of employer leading to loss in the millions of dollars — very large sum unaccounted for — aggravating and mitigating features — moral culpability as relevant factor on sentence — whether sentencing judge erred by failing to find offences motivated by gambling — whether error with regard to asserted nexus between mental conditions and offending — onuses of proof on sentence — sentence assertedly manifestly excessive Legislation Cited: Crimes Act 1900 (NSW), ss 192E(1)(b), 193B(2), 193B(1) Cases Cited: Goodbun v R [2020] NSWCCA 77 IM v R (2019) 100 NSWLR 110; [2019] NSWCCA 107 Johnston v R [2017] NSWCCA 53 Subramaniam v R [2013] NSWCCA 159 R v Qutami (2001) 127 A Crim R 369; [2001] NSWCCA 353 The Queen v Olbrich [1999] HCA 54; (1999) CLR 270 Category: Principal judgment Parties: Mary Ann Abellanoza (Applicant) Regina (Respondent) Representation: Counsel: R Rodger (Applicant) C Curtis (Respondent) Solicitors: Legal Aid NSW (Applicant) Solicitor for Public Prosecutions (Respondent) File Number(s): 2018/297610 Decision under appeal Court or tribunal: District Court of NSW Jurisdiction: Criminal Date of Decision: 05 November 2019 Before: Culver DCJ File Number(s): 2018/297610 Judgment 1. MEAGHER JA: I agree for the reasons given by Button J that whilst leave to appeal should be granted, Ms Abellanoza's appeal against sentence must be dismissed. The applicant was sentenced for offences relating to the misappropriation of $3.7 million from her employer, Silver Sea Cruises, over a period of four years in which she held the position of Branch Accounting Supervisor in its Sydney office. 2. Addressing the issue of her moral culpability, the applicant's case was that she was motivated by a combination of factors, being disgruntlement in her employment, a gambling addiction, and a desire for additional funds to send to the Philippines and to spend on personal items and family holidays. 3. The sentencing judge was not required to make a finding to the criminal standard as to the applicant's motivation for her offending being one or more of those three factors. Nor did her Honour do so. That was wholly explicable in circumstances where it was common ground that $2.6 or $2.7 million of the misappropriated funds remained unaccounted for. In that context, the sentencing judge considered the question of moral culpability and was not satisfied that the offending resulted from a gambling addiction or that the psychological conditions described by Mr Borkowski were significantly causative of the offending. Neither of these conclusions is shown to have involved error, particularly when regard is had to the objective features of the offending – the period over which it occurred, the degree of sophistication entailed in undertaking and concealing the ongoing frauds, and the number of transactions and the amounts involved in the offending. 4. FULLERTON J: I have read the judgment of Button J, circulated in draft, and his Honour's reasons for proposing that leave to appeal be granted and the appeal dismissed. 5. I agree with his Honour's orders but wish to express my own reasons for doing so. 6. It is unnecessary to restate in detail the circumstances in which the applicant's offending occurred. Suffice to note the following facts as either agreed or found by the sentencing judge to be established by the evidence. 7. The seven offences which attracted indicative sentences and, ultimately, the imposition of an aggregate sentence of 8 years with a non-parole period of 5 years, comprehended a calculated and repeated course of fraudulent conduct by the applicant between 2010 and 2018, and her calculated laundering of the proceeds of that offending during the same time frame. 8. Each of the four offences which alleged the dishonest obtaining of a financial advantage by deception (the offences of dishonesty) contrary to s 192E(1)(b) of the Crimes Act 1900 (NSW) was a representative charge involving, respectively, 61, 81, 42 and 24 separate transactions. Three additional offences contrary to s 192E(1)(b) were taken into account on a Form 1 when the sentencing judge indicated a sentence of 5 years and 3 months for the second of the four offences of dishonesty against a maximum penalty of 10 years' imprisonment. Sentences of 2 years and 3 months, 3 years, and 3 years and 9 months were indicated for the remaining offences of dishonesty. 9. The offences of dishonesty were committed by the applicant as Branch Accounting Supervisor for Silversea Cruises Australia Ltd while in receipt of an annual salary of approximately $88,000. The abuse of her senior and trusted position within the company not only enabled the applicant to commit the offences but allowed for her offending to continue undetected for many years. 10. In total, the applicant dishonestly obtained from her employer $3,775,704, of which $3,182,730 was withdrawn, in cash, from various of the seven bank accounts into which the applicant had deposited the payments she obtained by a fraudulent manipulation of the software program used by the company to pay the company's vendors on invoice. 11. The remaining three offences involved the applicant knowingly dealing with some of the proceeds of her offending laid contrary to s 193B(1) or (2) of the Crimes Act. The offence laid contrary to s 193B(1) attracted a maximum penalty of 20 years' imprisonment. Against that offence, a sentence of 3 years and 9 months was indicated. The offences laid contrary to s 193B(2) attracted maximum penalties of 15 years' imprisonment. Against those two offences, sentences of 3 years and 2 years and 3 months were indicated, respectively. 12. The two offences laid contrary to s 193B(2) of the Crimes Act involved cash withdrawals in the amount of $61,000 over a four year period which were used to enhance the applicant's lifestyle and that of her family (including the purchase of personal items and family holidays and other activities), and the amount of $119,975.85 which was transferred to account(s) in the Philippines using a money forwarding company. The sentencing judge noted that the applicant used that company, from time to time between 2010 and 2012, to transfer a total of $2,167,050 in cash to the Philippines. Those transactions were not relied upon by the Crown as constituting criminal conduct. 13. The third proceeds of crime offence laid contrary to s 193B(1) alleged an additional element of an intention to conceal that the money dealt with was the proceeds of crime. That offence concerned $130,135 transacted through gaming machines on 30 separate occasions after which cheques for the applicant's "winnings" were made out to the applicant, or her husband, and deposited into one of two bank accounts under the applicant's control. 14. The agreed facts also record that of the $3,775,704 fraudulently obtained by the applicant's dishonesty, $3,182,730 was withdrawn from the bank accounts into which those funds had been deposited and then withdrawn and used by the applicant in gaming machines at one of three establishments. Gaming records held by the Rooty Hill RSL Club and Dooleys Club in Lidcombe in relation to the applicant's gaming account with those organisations between January 2013 and April 2018 (accounts which were established at that time the first fraudulent transaction in 2010 and which were closed prior to last fraudulent transaction in 2018) recorded a total loss to the applicant of $398,426 resulting in a net return to her of $2,784,304 in cash. 15. The way those cash monies were dealt with by the applicant, including the whereabouts of the monies (or any part of them) at the time of sentence, could not be forensically traced by investigating police. Save for the Crown's concession on sentence that the $119,000 sent to the Philippines and the cash withdrawals of $61,000 expended on personal items might have been sourced from the $2,784,304 that was withdrawn, in cash, after being "played" through the gaming machines, thereby reducing the amount unaccounted for by $180,000, the monies that remained unaccounted for was a matter of contention at the time of sentence. That issue provided a factual substratum to the first and second grounds of appeal. 16. The sentencing judge's findings as to the objective seriousness of the defendant's overall offending were not controversial on the appeal. After taking into consideration the number of individual transactions comprehended by the offences of dishonesty, the breach of trust, the years over which the applicant's offending continued, the nature of the proceeds of crime offences and the planning involved in the structure of that offending, the four offences contrary to s 192E(1)(b) of the Crimes Act were assessed at above the mid-range of objective criminality, with the first and second offences being the most objectively grave. The money laundering offences were also assessed at above the mid-range of objective seriousness. 17. The evidence relied upon by the applicant to support the submission, advanced on her behalf on sentence, that the combined weight of her prior good character, together with what was described by her counsel as a multi-layering of factors capable of providing insight into the motives for her offending and which operated in mitigation of sentence, appeared to be based solely upon the history the applicant provided to Mr Borkowski, a forensic psychologist. His report was tendered on the sentence without objection. The applicant told Mr Borkowski that she has difficulty understanding why she committed the offences or how the amount defrauded from her employer totalled millions of dollars. She expressed to him a willingness to repay the amounts defrauded even if she had to work the rest of her life to do so. 18. The applicant's affidavit, also tendered without objection, did not directly address her motives for offending but focused on her husband's ignorance of that fact. She did, however, depose to the fact that it was not until the criminal proceedings commenced that she reviewed her bank statements and came to, as she expressed it, "learn of the extent of my gambling addiction and … to realise the ramifications this was going to have on my family and myself". She did not address the whereabouts of the $2.7 million in cash returned to her from her gaming activities. She did not give evidence on sentence addressing that issue. 19. Mr Borkowski's diagnosis of a gambling disorder was based upon the rated results of administering the South Oaks Gambling Screen, a psychometric screening instrument used to assess the presence of pathological gambling. The applicant's responses to the assessment attracted a rating of 13/20 said by Mr Borkowski to suggest the applicant "presents with a pathological gambling problem". 20. The applicant also gave Mr Borkowski an account of her gambling history as follows: [The applicant] reported she started gambling in around 2013 at a time when she was experiencing a number of stressors, including the death of several extended family members, and her husband was going through depression and they stopped attending church and "lost contact with [their] faith". She stated gambling initially provided her with a way of "escaping" the negativity she was experiencing at the time, and it became a method of "stress relief" and a "distraction". [The applicant] said her gambling was initially restricted to the wages she earned, but as her losses accumulated, she commenced drawing from credit cards and then she borrowed money in the form of a personal loan which her husband was not aware of. [The applicant] estimated she quickly accumulated a debt of around $25,000. [The applicant] explained she subsequently continued to gamble to try and recover and chase her losses. She reported it got to the point when she was gambling daily, at times up to 10 hours at a time, and she believes those were the occasions she would gamble tens of thousands of dollars in a sitting. However, [the applicant] said at the time she was never paying attention to how much she lost. [The applicant] reported she stopped gambling after her employer became aware of the fraudulent behaviour that resulted in the current charges. 1. The applicant's written submissions on sentence referred to what was described as the applicant's multifaceted motives. They included the "disgruntlement factor" - said to be a retaliation to the applicant believing she was being taken advantage of by her employer - "the addiction factor" where her gambling, initially said to be triggered by her efforts to relieve stress in the workplace and which led her believe her "winnings" would enable her to repay the monies defrauded - and "the greed factor" which enabled her to improve her family's material circumstances, including sending money to her extended family in the Philippines. 2. Counsel also placed significant reliance on Mr Borkowski's opinion that the applicant's compromised mental health at the time of her offending, in turn reflected in his diagnoses of a generalised anxiety disorder, a major depressive disorder and a gambling disorder, contributed "to some extent" in the applicant's "decision to engage in the current offences". This aspect of Mr Borkowski's report was relied upon as providing an evidential foundation for the Court to be satisfied, on the probabilities, of a causal link between the applicant's offending and her mental health, thereby reducing her moral culpability for her offending in ultimate mitigation of sentence. 3. The first and second grounds of appeal contend that the sentencing judge either erred in failing to consider motive at all in her assessment of the applicant's moral culpability for her offending, or erred in failing to make any finding concerning what were said to be the applicant's multifaceted motives. 4. The sentencing judge declined to find that a causal connection was established. The failure to do so is the subject of the third ground of appeal. The first three grounds of appeal 1. As concerns the first three grounds of appeal, I am not persuaded that error of the kind contended for has been made out. 2. The way in which the issue of motive was raised in the sentence proceedings on behalf the applicant was correctly identified in the Crown's submissions on the appeal as effectively limited to the question whether the evidence allowed for a finding, on the probabilities, that there was a causal nexus between the applicant's offending and what Mr Borkowski diagnosed as a gambling disorder. While the sentencing judge noted that other aspects of motive were relied upon, she did not, and in my view was not obliged to, make a finding as to whether either or both of "greed" or "disgruntlement", as motives for the applicant's offending, were established by the evidence. In my view, having regard to the way in which these considerations were said to be implicated in the applicant's offending, neither, in any practical sense, could they have operated in mitigation of sentence either by reducing the applicant's moral culpability for her offending or as features deserving of weight in the assessment of her subjective circumstances. 3. While Mr Borkowski considered that there was what he described as "a relationship between her diagnosed conditions and the current offences" (as the sentencing judge noted in the sentencing remarks), he did not go so far as to offer the opinion that the applicant's wish to avenge her sense of self-worth as an employee, or her desire to improve her family's financial or material circumstances was because her mental health was compromised to the extent that either or both of those considerations provided a satisfactory explanation for what the agreed facts revealed as well-planned, repeated offences of dishonesty committed over a significant period of years, including the planning involved in the laundering of the monies defrauded. For that reason alone, in my view the sentencing judge was not obliged to make any finding as to whether "greed" or "disgruntlement" explained the applicant's offending. 4. While the sentencing judge accepted, and correctly, that considerations of motive may impact on an offender's moral culpability, her Honour also made it clear that the very significant amount of money unaccounted for, her unpreparedness to accept the applicant's assertion to Mr Borkowski that "nearly all" of the funds defrauded had been expended on gambling, did not persuade her that the necessary temporal or causal link between a diagnosed gambling disorder and the applicant's offending had been established on the probabilities. 5. The situation may have been different were the applicant to have given evidence on sentence. The sentencing judge referred expressly to the decision in R v Qutami (2001) 127 A Crim R 369; [2001] NSWCCA 353 in an exchange with the applicant's counsel during the delivery of her Honour's ex tempore sentencing remarks at which time counsel informed her that no evidence additional to what was contained in the report of the forensic psychologist was relied upon. 6. The decision in R v Qutami and the principled approach for which it is authority, was most recently considered by this court in IM v R (2019) 100 NSWLR 110; [2019] NSWCCA 107 where at [20] Meagher JA, (RA Hulme and Button JJ agreeing) said: In a series of decisions this Court has made clear that if offenders do not give evidence in a sentencing hearing and are not tested about assertions made to others which are relevant in determining an appropriate sentence, that material, whilst admissible, must be treated with very considerable caution (see R v Qutami [2001] NSWCCA 353 at [58] (Smart AJ); (2001) A Crim R 369). Ordinarily such evidence should be given very limited weight, assuming it is not inconsistent with the facts the offender has agreed should form the basis of the sentencing decision, in which case the agreed facts should prevail: see R v Harrison [2001] NSWCCA 79 at [44] (Spigelman CJ); (2002) 121 A Crim R 380; R v Qutami at [58]–[59] (Smart AJ), [79] (Spigelman CJ); Butters v R [2010] NSWCCA 1 at [18] (Fullerton J); Pfitzner v R [2010] NSWCCA 314 at [33] (McClellan CJ at CL); Imbornone v R [2017] NSWCCA 144 at [9] (R A Hulme J); [57] (Wilson J); Hall v R [2017] NSWCCA 260 at [48] (Wilson J); Jinde Huang aka Wei Liu v R at [66] (Bellew J); Zhang v R [2018] NSWCCA 82 at [55] (Hoeben CJ in CL). 1. The applicant was under no obligation to give evidence expanding upon the motivations for her offending, including an explanation for the coincidence between the system she used to launder the proceeds of her offending through gaming machines and the early onset of what she claimed, after her arrest, had become a gambling compulsion. However, the applicant bore the onus of establishing matters in mitigation on the balance of probabilities. Were she to have given evidence, the Crown would have had the opportunity to enquire into the whereabouts of the unaccounted for $2.7 million but also the apparent coincidence between the commencement of the applicant's gambling activities and her defrauding of her employer, and her cessation of those activities when those offences were revealed. 2. As the Crown pointed out in its submissions in this Court, the sheer fact that very large amounts of unaccounted for cash were returned to the applicant from gambling activities was a relevant consideration in the sentencing judge's assessment as to whether she accepted, on the probabilities, that Mr Borkowski's assessment of the applicant's gambling disorder had any relevant bearing upon her moral culpability. 3. That said, the sentencing judge also made it clear that she would not treat the money unaccounted for, or the implication that the applicant was motivated by greed in defrauding her employer of over $3 million and prima facie retaining $2.7 million, as a feature of aggravation. Instead, the sentencing judge treated the amount defrauded and the objective criminality reflected in the applicant's overall offending as a factor to be taken into account as part of the factual complex for sentencing purposes. The sentencing judge did, however, heavily discount the weight that might otherwise have been afforded to the applicant's expressions of shame and remorse. That finding is not challenged. It has a bearing only on the fourth ground of appeal which contends the aggregate sentence is manifestly inadequate. The fourth ground of appeal 1. I have found no error in the sentencing judge's failure to find a causal nexus between the applicant's offending and any of the mental disorders from which she was apparently suffering at the time of the offending, including a gambling disorder, and no error in the sentencing judge's treatment of other subjective factors which might have informed the applicant's offending so as to reduce her moral culpability. No error was contended for in the sentencing judge's treatment of the issue of remorse as a factor in mitigation. 2. In those circumstances, and despite other positive features of the applicant's subjective case, including her prior good character, the objective seriousness of her overall offending and the need for the aggregate sentence to reflect the principle of general deterrence consistently with what this Court has said in Johnson v R [2017] NSWCCA 53, the applicant's contention that an aggregate sentence of 8 years with a non-parole period of 5 years is manifestly excessive, rests solely on it being a sentence towards the top of the range of sentences imposed in other cases. Significantly, is not said, on the applicant's behalf, that any of the seven indicative sentences are suggestive of error in the imposition of the aggregate sentence or that the sentencing judge misapplied principles of totality. 3. The contention that the aggregate sentence imposed is so far outside the range of sentences as to either imply error or the misapplication of sentencing principle, has to be tested consistently with the caution that attends the comparison of a sentence under review with sentences imposed in other cases. 4. In Goodbun v R [2020] NSWCCA 77 at [257], Bellew J emphasised the need for caution: Thirdly, in circumstances where the Court has been referred to sentences imposed in a number of other cases, it is necessary to bear firmly in mind the limitations which are placed on material of that kind. Sentences imposed in other cases are not binding precedents. They are statements of what has happened in the past. A history of sentencing can establish a range of sentences that have in fact been imposed. However, such history does not establish that the range is the correct range, or that the upper or lower limits of the range are the correct upper and lower limits. Further, the range of sentences that have been imposed in past cases does not fix the boundaries within which future judges must, or even ought, to sentence. Such cases can, and should, provide guidance to sentencing judges, and to appellate courts, and stand as a yardstick against which to examine a particular sentence. However when considering past sentences, it is only by examination of the whole of the circumstances that have given rise to the sentence that unifying principles may be discerned. Fundamentally, the consistency that is sought in sentencing is consistency in the application of the relevant legal principles, and not numerical or mathematical equivalence. 1. Without descending into an analysis of the Judicial Commission statistics upon which the applicant relied, I am not persuaded that the aggregate sentence imposed on the applicant, which is, in any event, demonstrably within the available range, albeit at the very top of it, was a sentence that exceeded the proper exercise of a sentencing discretion. I am not satisfied the aggregate sentence imposed is otherwise unreasonable or plainly unjust. 2. BUTTON J: Introduction 1. On 5 November 2019, Ms Mary Ann Abellanoza (the applicant) was sentenced for a series of fraud and money laundering offences by her Honour Judge Culver in the District Court sitting at Sydney. The applicant seeks leave to appeal against the aggregate sentence imposed on that day. 2. The applicant pleaded guilty to the following offences: four offences of dishonestly obtaining a financial advantage by deception ("fraud"), contrary to s 192E(1)(b) of the Crimes Act 1900 (NSW) (the Act); two offences of knowingly dealing with the proceeds of crime ("dealing with proceeds"), contrary to s 193B(2) of the Act; and one offence of knowingly dealing with the proceeds of crime with intent to conceal ("dealing with proceeds to conceal"), contrary to s 193B(1) of the Act. Three further frauds were taken into account on a Form 1. 3. The maximum penalty for the frauds, pursuant to s 192E(1)(b) of the Act, is imprisonment for 10 years. As for the dealing with proceeds, pursuant to s 193B(2), the maximum penalty is a term of imprisonment for 15 years. Finally, the dealing with proceeds to conceal, by way of s 193(B)(1), carries a maximum term of 20 years. None of the offences has a standard non-parole period applicable to it. 4. The aggregate sentence imposed upon the applicant was a head sentence of imprisonment of 8 years, with a non-parole period of 5 years. The non-parole period commenced on 5 November 2019, and is due to expire on 4 November 2024. The head sentence expires on 4 November 2027. 5. Because they were not said to play a role in any ground of appeal, I shall not pause here to recount every single indicative sentence that was provided by the learned sentencing judge; they appear on the sentencing diagram attached to this judgment. Findings about objective features 1. The following summary of the facts of the offending is derived from the agreed facts (AF) tendered in the proceedings on sentence (POS), and from the remarks on sentence (ROS). 2. The applicant worked for Silversea Cruises Australia between 2009 and 2018. For the majority of that time, she was in the responsible position of branch accounting supervisor. During that period, she was authorised to create and amend vendor details, including the ability to amend payee bank account details for vendors, on the computer application used by that company. In the context of the company, vendors would be suppliers for inventory or other services provided to Silversea Cruises. 3. Between 2010 and 2018, the applicant changed the payee bank account details for existing vendors to accounts with financial institutions that were under her control. Throughout this period, the applicant made 236 payments into seven different bank accounts held at three financial institutions. The applicant would also create and submit false invoices to her employer, and the payments from the vendors would be deposited into accounts that she controlled. 4. The applicant obtained a total of $3,739,773.15 through over a hundred transactions of that nature. 5. The applicant also dealt with the proceeds of those transactions by "either transferring the money obtained to overseas accounts in the Philippines using a money forwarding company or making cash withdrawals to a total of $180,975.85": AF [11]. The combination of the two methods of transferring the money to the Philippines, $119,975.85 by a money forwarding company, and $61,000 by way of cash withdrawals, formed the basis for two of the offences of dealing with proceeds. 6. The applicant also dealt with those proceeds by putting money through gaming machines and collecting the winnings in the form of a cheque made payable to her husband, and then depositing the cheque into an account that she maintained. This amounted to a total of $130,135.14, and formed the basis for the third proceeds offence that featured an intent to conceal. 7. The applicant would then either withdraw the cash via an ATM or transfer the funds electronically to another account. The transferred funds were then used to pay for her expenses. From January 2013 to May 2018, "a total of $1,855,881 was dealt with in that way at the Rooty Hill RSL and $1,326,849 was dealt with at Dooley's Lidcombe": AF [14]. Those sums include the substantial number of withdrawals via ATMs at various locations. 8. That withdrawn cash, detailed in the preceding paragraph, was then fed into gaming machines. An examination of the gaming records from those two places revealed that, from January 2013 to April 2018, the applicant "received $3,182,730 with a loss of $398,426 resulting in net amount returned to the offender of $2,784,304": AF [16]. 9. Cash deposits were also made into an account under the name of the partner of the applicant that "totalled $144,135.14" from July 2014 to April 2018: AF [15]. 10. On 28 September 2018, the applicant attended Surry Hills Police Station where she was arrested and taken into custody. She declined to be interviewed. 11. Importantly, it was not disputed at first instance, nor before this Court, that as an objective feature of the offending, in the order of $2.7 million of the $3.7 million misappropriated between 2014 and 2018 remained unaccounted for at the time when the applicant came to be sentenced. Findings about objective seriousness 1. The sentencing judge noted that the offending needed to be seen to involve a degree of planning and organisation, on the basis of the "sheer extent of the transactions and the ways in which the offender employed different methods involved in defrauding Silversea Cruises" (ROS 13.11 – 13.14). 2. Her Honour also found that the "fraud offences fall above mid-range level of objective gravity of such offences, with sequences 2 and 1 being of the most serious objective gravity" (ROS 13.23). 3. Her Honour found that the applicant was in a position of trust, and that her offending could properly be properly described as a "gross breach of trust" (ROS 10). 4. With respect to the money laundering offences, her Honour found that they "fall above the mid-range of objective seriousness, but not at the top end of that range. Instead, they sit between the mid-range and the top end of the range (ROS 15.17). 5. The sentencing judge emphasised the need for general deterrence in this matter, on the basis that crimes such as these are difficult to detect, and caused financial devastation to the victimised company and other stakeholders. Aspect of proceedings on sentence 1. In order to explain my approach to three of the four grounds, it is necessary for me to set out some of the transcript of the POS. 2. The POS began with a discussion between the sentencing judge and counsel as to the difficulty the Court might have in placing weight on submissions about certain matters, in the absence of the applicant giving evidence in the witness box: HER HONOUR: Insofar as it's not proposed to call the offender, the parties are aware of the application of Qutami's case, for example, that the Court might not be able to place weight on some assertions? NEMATALLA [defence counsel then appearing]: Absolutely. If I may say so, that is not a blanket directive that forces the hand of a discretionary exercise of power, but I'm aware of— HER HONOUR: I haven't read the material yet. I've just said that may be one aspect. NEMATALLA: I'm responding to that. I understand that. (POS 4.34 – 4.44) 1. In reference to the net amount of $2.7 million that remained unaccounted for and was linked to the question of motivation for the offending, the following exchange occurred between her Honour and defence counsel: HER HONOUR: If I understand the figures, looking at the agreed facts, the offender received three thousand one hundred and eighty two seven hundred and thirty dollars (as said) with a loss of $398,426. NEMATALLA: Can I just have a reference? HER HONOUR: Paragraph 16, resulting in the net amount returned to the offender of $2,784,304. NEMATALLA: Yes. HER HONOUR: Doesn't that show that, instead, your client only lost a fraction of the amount she received from her fraudulent activity to gambling, and the vast majority, namely, $2,784,304 was received by her and diverted to greed? NEMATALLA: I think there's a problem with gaps in the evidence before you and what you don't know-- HER HONOUR: I'm just looking at that paragraph of the agreed facts. NEMATALLA: I understand. HER HONOUR: This is an agreed fact. NEMATALLA: I understand, and what I was about-- HER HONOUR: How else do I interpret that? NEMATALLA: What I was about to say is that you say - if you reads - on examination of the gambling records, now, the gambling records are a record of when she uses her membership card to go in and gamble. So a system of putting the card into a machine whilst she's gambling to get loyalty points, et cetera. HER HONOUR: Let me put it this way: we know from Olbrich's case, if your client wants to rely on an assertion that most of her money was diverted to gambling as opposed to greedy purposes, then she bears the burden on the balance of proving it to me. NEMATALLA: I understand that. HER HONOUR: When you say there's a gap in the evidence, maybe the gap is hers? NEMATALLA: I think there's a difficulty for you, with great respect, as a tribunal of fact, finding that issue, that you are connecting a dot that there can only be a conclusion that the totality of the gambling, based on the record, is as set out in 16. I don't know with any more that you can make that finding. HER HONOUR: Let me try and clarify, then. I need to look at the burden of proof. Where it's a mitigating factor relied upon and you seek to rely on gambling as somehow mitigating because you say, by having an addiction under the DSM-IV, that would result in mitigation of the moral culpability where it's causative of the offending conduct. If you are relying on it in that way, doesn't your client bear the burden of satisfying the Court on the balance of probabilities that, in fact, the money she receives from her fraudulent activities over four years was diverted, really, for the purpose of gambling. I don't have evidence of that, other than an assertion by your client to her psychologist. She's not given evidence about that. There is no other record other than para 16. Why would I allow that to sound in any real mitigation? (POS 8.19 – 9.28) 1. A further discussion of this issue took place later in the POS: HER HONOUR: To the extent that your client wants me to allow any mitigation for the fact that it was further expended in some addiction under the DSM-IV that would sound in mitigation, she bears an onus on the balance of showing that to me. I don't know that a line in Mr Borkowski's statement of such a general nature, when we know ostensibly that not all of the money went to gambling, not even nearly all the money went to gambling, I would have thought, then there's obviously some paucity of evidence to say that there was much more than that 2 million-odd figure. The other matter is this: to the extent that your client wants me to take into account that she is trying to make, or she intends to make, reparation as part of an assessment of her remorse, it is relevant for the Court to know whether they are words that really don't bear much possible fruition, or whether there is this $2.78 million somewhere available to your client in her assets. That's why I say there are several relevancies to this issue. So I'm not prepared to just accept in a line in Mr Borkowski's report that suggests that your client said to him that nearly all the money went on gambling. I'm not prepared to accept it as amounting to any particular mitigation either in terms of showing that she had some addiction that was significantly causative of her conduct or in showing that she has, despite her best wishes, limited means to make reparation. NEMATALLA: This is despite the clinical finding as a result of the testing that hasn't been challenged by my learned friend. HER HONOUR: It's one thing to say a person has a gambling addiction; it's another thing to say it's causative of the offences. To show it's causative, when one looks at para 16 of the facts, 2.78 million, net return 398,000 spent on gambling. NEMATALLA: He links to a release valve for the stress that she was under at work. The trilogy of factors are linked, in my submission. (POS 10.44 – 11.25) 1. In her case on sentence, the applicant tendered reports from a forensic psychologist Mr Borkowski, and psychologist Dr Pineda, along with a further letter from the same expert; a letter of apology from the applicant, along with a further affidavit sworn by her; and references from four persons about her character. 2. In the event, the applicant did not give evidence on oath before the sentencing judge. Nor did any other person who had prepared documentary evidence tendered in her case. Findings about subjective matters 1. As I have said, the applicant relied upon a detailed forensic psychological report of Mr Borkowski, as well as two shorter reports of Dr Pineda, a clinical psychologist. 2. Mr Borkowski's report commences with the applicant's history as reported. She was born and grew up in the Philippines. In 2002, she moved to Australia with her husband and two children. At that stage, she was 36 years of age. 3. She reported experiencing an abusive childhood, marked by the alcoholism of her father. When the applicant was about 22 years old, the family of the applicant had asked her father to move away from the family home. 4. Mr Borkowski's opinion was that the applicant was suffering from generalised anxiety disorder, major depressive disorder, and gambling disorder. 5. He also considered that there was a causal link between the applicant's diagnosed conditions. The opinion was formed on the basis that her troubled relationship with her father, combined with several setbacks in her personal life, including the deaths of family members and the fact of her husband suffering from depression, led to depressed moods and generalised anxiety. The psychologist was of the opinion that gambling was a way of escaping from that negativity. 6. Additionally, he suggested that the applicant's fraudulent behaviour was initially a way of proving a point to her employer, namely that the systems in place at work were insufficient. Even so, the offending quickly became a way of financing her severe gambling disorder. 7. With respect to remorse, Mr Borkowski stated that the applicant "took responsibility for her actions, and she did not express any attitudes or beliefs to suggest she condones, or is supportive of criminal or other antisocial behaviour" (Borkowski report p 7). 8. Dr Pineda expressed the following opinions: (1) that the applicant was suffering from a major depressive disorder in the context of numerous psychosocial social stressors; (2) that a range of therapeutic methods would assist her to cope with her stressors; and (3) that the applicant was genuinely remorseful for her actions and accepted their consequences. 9. The letter of the applicant and her affidavit may be summarised as follows. The applicant spoke of feeling heartfelt remorse to her family, her employer and the wider community for her actions, and that she accepted responsibility for her actions and was committed to making reparations. In her affidavit, she stated maintained that as between herself and her husband she had responsibility for the operation of bank accounts, including their joint bank accounts, and that she "handled" their finances. She denied that her husband had any awareness of the extent of her withdrawals and deposits into the bank accounts. 10. In a nutshell, the persons who had provided character evidence expressed the following opinions. A family member of the applicant described her as a caring and maternal figure who had undergone severe tragedy in her personal life. A fellow classmate described her as caring, generous and willing to go above and beyond to make people feel comfortable. Finally, her husband described the distress, manifested by suicide attempts, that he felt on becoming aware of her offending. 11. The sentencing judge made reference in the ROS to the defence submissions directed to the three factors – "'the disgruntlement factor', 'the addiction factor' and 'the greed factor'" (ROS 21.19) in the following detail: The defence relies on this mental health material and opinion of Mr Borkowski in submitting that there was a multi-layering of factors contributing to the overall motivation for the offences committed: firstly, there was the gambling matter; secondly, there was the response to her impression that she felt like the company was taking advantage of her, and so she engaged in the offending to prove to the company that their systems were faulty and their audit procedures were lacking; thirdly, she wished to attempt to have the company acknowledge that additional staff were required to assist her; and fourthly, there was a motive in ... having funds which were able to be sent to the Philippines, as well as being spent on personal items and family holidays and gambling. (ROS 21.8 – 21.18) 1. The proposition that the applicant's mental health played a substantially causative role in the offending was not accepted in the ROS. Her Honour stated that "the evidence of the offender's mental health does not sufficiently establish a causal connection for offences committed over such a period of time and involving so many transactions in the course of conduct" (ROS 25.14). Later, on more than one occasion, the sentencing judge spoke of having found that the "mental health material" was not "significantly causative" of the offending. 2. Having said that, her Honour was of "the view that the mental health material does in part contribute to a finding of special circumstances" (ROS 28.10), and was of the view that "they are criminogenic factors worthy of treatment" (ROS 30.4). 3. It was also noted by her Honour, in light of the defence submissions on motive, that "there is a significant, but unidentified, amount of money unaccounted for" (ROS 25.5), and whilst the applicant should not be punished additionally for that, it did detract from the "genuineness of her assertion that she wishes to make full reparation" (ROS 25.8) to the point where it became "dubious and somewhat lacking any concrete position" (ROS 25.9). 4. Her Honour found that the applicant had an absence of prior criminal history and therefore was entitled to a finding of good character. Having said that, her Honour exercised caution about the weight to be given to the good character of the applicant, in the circumstances of these offences. 5. Whilst there was some demonstration of remorse from the applicant by way of her letter to the sentencing judge and in the report by the psychologist, her Honour dealt with it cautiously. In relation to remorse and contrition, the following was said: "The offender describes her genuine and heartfelt remorse to her family, her relatives, to her previous employer and to the community. She says she cannot offer any excuses for her criminal actions, and she accepts overall responsibility for what she has done. That acceptance of responsibility is important, because it means that the offender acknowledges that any aspect of disgruntlement forming a motivation for her to commit the offences is not seen as excusing her conduct." (ROS 28.15 – 28.21) 1. There was also a 25% discount applied in recognition of the utilitarian value of the applicant's guilty pleas. 2. Finally, as I have said, special circumstances were found that reduced the aggregate non-parole period from 6 years to 5 years. Grounds of appeal 1. The grounds of appeal as formulated (and pressed) are: Ground 1: Her Honour erred in failing to make a finding as to the applicant's motive for the offending, and if Her Honour's finding can be implied, it was not open on the evidence to make such finding applying the requisite standard. Ground 2: Her Honour erred in failing to consider motive in the assessment of the offender's moral culpability for the offences. Ground 3: Her Honour erred in the rejection of the causal link between the applicant's mental health diagnosis and the offending behaviour as it was not open on the evidence to reject such a finding applying the requisite standard. Ground 4: The sentence was manifestly excessive. 1. Because the oral submissions about the first three grounds were presented compendiously, I shall recount them later, and thereafter determine each of those grounds in turn. Ground 1: Her Honour erred in failing to make a finding as to the applicant's motive for the offending, and if Her Honour's finding can be implied, it was not open on the evidence to make such finding applying the requisite standard. Written submissions of the applicant 1. In written submissions, it was said that at first instance a submission had been made that there were "three interrelated motives" for the offending: gambling, disgruntlement with her employer, and greed. And yet, in the ROS, the sentencing judge made no specific finding about motivation. No finding was made, it was said, accepting or rejecting any one of the three asserted motives. 2. It was said that the inference can readily be drawn from the ROS that the proposition of the money being lost to gambling was rejected, and that the applicant was sentenced on the basis that she was motivated by simple greed. It was also said that those inferred findings needed to be proven beyond reasonable doubt, as aggravating features. 3. The submission was that, in accordance with the criminal standard, if such a state of mind was to be inferred from surrounding circumstances, it would need to be the only available rational inference. 4. Expanding upon that, it was said that various kinds of particular evidence – such as the attributes of gaming machines, their record keeping systems, and the locations and amounts of the withdrawals from the various ATMs – would have been required before a finding of simple greed could have been made. 5. The proposition that there was any onus upon the applicant with regard to those matters was rejected in written submissions. 6. The asserted Crown concession during the POS that there was no evidence of a lavish lifestyle or accumulation of assets was said to demonstrate error in the "implied rejection" by the sentencing judge of the defence proposition that the vast majority of the money was gambled away, on the basis that it was unsupported by evidence. I understood the submission to be that the absence of evidence of such things as purchases of real property was itself evidence that supported the proposition that the money had been wasted away on gaming machines. Ground 2: Her Honour erred in failing to consider motive in the assessment of the offender's moral culpability for the offences. Written submissions of the applicant 1. In written submissions, attention was invited to the fact that, in the ROS, the sentencing judge said that the question of motive would be dealt with in the "consideration of moral culpability". Even so, it was said that her Honour failed to consider motive with regard to "the criminality of the offending behaviour". 2. It was accepted that the sentencing judge did reflect on the $2.7 million that was unaccounted for in considering remorse and the asserted intention on the part of the applicant to repay the money. But the point was made that those are considerations different from that of moral culpability. Ground 3: Her Honour erred in the rejection of the causal link between the applicant's mental health diagnosis and the offending behaviour as it was not open on the evidence to reject such a finding applying the requisite standard. Written submissions of the applicant 1. In written submissions, it was said that it was "not open" to the sentencing judge to reject the evidence of addiction to gambling as causing the offending, bearing in mind the lack of negating evidence about the topic, and the "available inference" that it had been gambled away. 2. In similar vein, in the absence of contradictory prosecution evidence, it was said that it was "not open" to the sentencing judge to reject the "causal link" between the mental health diagnosis of the applicant and the offending. It was emphasised that there was expert opinion evidence about diagnoses of "Generalised Anxiety Disorder, Major Depressive Disorder and Gambling Disorder". Attention was also invited to the opinion of a psychologist to the effect that the offending was likely to have been enabled by "the distorted and dysfunctional cognitive processes associated with her psychological conditions". 3. It was said that the ROS provide no detail as to why that link had been rejected; all that appeared (at ROS 25.15) was the statement that the causal connection had not been "sufficiently establish[ed]" "for offences committed over such a period of time and involving so many transactions in the course of conduct". It was said that there was no contradictory expert evidence that permitted such a finding of disjunction. 4. A separate decision of this Court, in which such a finding had been made, despite similar offending having occurred over a similar stretch of time, was relied upon. And it was said that in that same case, motivations such as resentment, a gambling addiction, and psychological or psychiatric conditions were not approached on the basis that they were mutually exclusive. 5. The written submissions on this ground concluded with the proposition that "[a] reduction of the moral culpability to some degree was justified". Oral submissions of the applicant with regard to first three grounds 1. As I have said, the oral submissions about the first three related grounds were provided compendiously. For that reason, I outline them at this stage of my judgment. 2. It was said that the proposition at first instance had been that a component of the motive for the offending was gambling, and the sentencing judge had wrongly rejected it, even though it only required satisfaction on the balance of probabilities. 3. It was also emphasised that "in fact no positive finding in relation to motive" had been made by the sentencing judge, although a finding of greed could be inferred. It was said that the latter finding would have needed to be proven beyond reasonable doubt. Such a finding was resisted, on the basis that dissipation by gambling was indeed supported by the absence of evidence of "lavish lifestyle". 4. It was accepted that it was not incumbent upon the Crown on sentence to prove the manner in which the applicant had disposed of the proceeds of the crimes. 5. It was also accepted that it was common ground at first instance that "there is still some 2.6 million unaccounted for" (ROS 24.3). But it was said that there was evidence from the applicant through the expert report, and in her own affidavit, that there was a gambling issue, and that it was "a reasonable inference on the balance of probabilities that the reason the money has disappeared into thin air is because it was dissipated by gambling". Other possibilities as to where the sums may have ended up were depreciated in oral submissions as speculation. 6. It was said that the primary position of the applicant was that no finding had been made about motivation, but "[i]f one can be gleaned, it is a finding of greed." It was accepted that the word "greed" appears nowhere in the ROS, but it was said to have appeared repeatedly in the POS. 7. It was accepted that there was an onus on the applicant "in relation to establishing motive of gambling on the balance of probabilities", but it was suggested that, in the absence of records as to the identity of a person who receives a payout from a gaming machine and the amount of that payout, there is some practical shifting of the evidentiary onus in that respect. 8. As for the possibility, raised by the sentencing judge in the POS at 7.4, of gaming machines being used extensively not as a result of a gambling addiction, but rather as a way of "laundering dirty money", it was said that the two were not mutually exclusive. 9. It was also accepted that the expert evidence was based to a degree on self-report of the applicant, but it was said to be based also on some objective psychological tests that had been administered to the applicant. Determination of ground 1 1. I consider that this ground can be resolved by returning to basic principles of sentencing law, along with some uncontroverted factual aspects of the proceedings at first instance. 2. The pleas of guilty entered by the applicant were solemn, public admissions of all of the elements of each of the offences. 3. The pleas of guilty said nothing about the motivation underpinning the offences. 4. If the Crown sought to establish a motivation that could be thought of as an aggravating feature on sentence, it needed to do so beyond reasonable doubt. 5. If the applicant sought to establish a motivation that could be thought of as a mitigating feature on sentence, she needed to do so on the balance of probabilities. 6. If, in accordance with the two propositions immediately above, the question of motive was not determined, then sentence would simply be imposed with motive remaining unestablished to either standard. (The last three propositions are derived from The Queen v Olbrich [1999] HCA 54; (1999) CLR 270.) 7. Although there was discussion about the question of greed in the POS, the sentencing judge made no affirmative finding to that effect in the ROS. The word was simply never used. 8. A fact agreed between the parties was that approximately $2.7 million, of the $3.7 million misappropriated, remained unaccounted for. 9. There was no evidence placed before the sentencing judge of the applicant having enjoyed a "lavish lifestyle". Nor was there evidence of her having accumulated assets, real or personal. 10. The applicant did not give evidence on oath. 11. Despite her prior good character, the offences to which the applicant had pleaded guilty demonstrated by their nature that she was a person capable of very great dishonesty. 12. Her pleas of guilty showed that not only had she committed fraud, but she had also engaged in money laundering. 13. The sentencing judge explicitly raised with defence counsel her concerns about the well-known proposition, often endorsed by this Court, that assertions made by offenders to experts and others that are not on oath and subject to cross-examination should be approached with significant caution by sentencing judges: R v Qutami (2001) 127 A Crim R 369; [2001] NSWCCA 353. 14. Gaming machines are used by people who are extremely infrequent recreational gamblers, by people who are out of control gambling addicts, and people who are between those two extremes of the spectrum. And they are also used by criminals to launder the proceeds of crime, the almost inevitable losses within that process simply being regarded as a percentage cost of doing unlawful business. 15. In my opinion, in light of those legal and factual propositions, it was well open to the sentencing judge on the evidence not to be satisfied on the balance of probabilities that the applicant was motivated by an addiction to gambling. For that reason, I do not pause to consider the anterior question of whether that can be a mitigating factor on sentence in any event: see Johnston v R [2017] NSWCCA 53. 16. To the extent that the sentencing judge made no explicit finding about motivation in the ROS, that was entirely in accordance with the "middle position" discussed in The Queen v Olbrich. 17. Finally, as I have said, there was no explicit finding about greed, the enjoyment of hidden ill-gotten gains, or anything similar made in the ROS, founded on the enormous sum of cash that was not accounted for on the evidence. Nor, in my opinion, is there any implicit finding to be derived from the ROS. The sentencing judge simply made findings on the evidence placed before her, to the extent that one could, and thereafter imposed sentence. On the evidence, the findings made were unexceptionable. 18. In my opinion, this ground should not be upheld. Determination of ground 2 1. In my opinion, this ground can be resolved concisely. 2. As can be seen from its terms, the ground complains about a failure by the sentencing judge to take into account motive when assessing moral culpability. The most important motive under discussion is an asserted gambling addiction. 3. In fact, commencing with the words "I turn now to a broad consideration of the moral culpability of the offender" (ROS 15.20), the sentencing judge engaged in a detailed review of the psychological and other evidence as to motive. Contrary to this ground, motive was undoubtedly considered in the ROS; it is just that the defence submission about it was not accepted. 4. As I have explained, the onus was on the applicant to establish the motive of gambling addiction on the balance of probabilities, in the context of $2.7 million not being accounted for, the applicant not having given sworn evidence, and the applicant self-evidently being a person capable of great dishonesty. 5. The approach of the sentencing judge in the ROS of recounting the evidence in support of the proposition under consideration, although ultimately not being satisfied about it, was an entirely orthodox approach. And in my opinion, the ultimate finding was well open on the evidence. 6. I would not uphold this ground. Determination of ground 3 1. This ground can also be resolved shortly. 2. Contrary to the way in which the ground is expressed, it was incumbent upon the applicant to establish on the balance of probabilities any causal link between her psychological state and the offending. The opinions of the two psychologists were based very largely on the history and self-report of the applicant. To repeat: the applicant did not give evidence on oath confirming what she had said to either of them, thereby exposing herself to cross-examination, despite the sentencing judge explicitly raising concerns about the whole question of acceptance of subjective matters with defence counsel. The applicant was a person not only capable of great dishonesty, but also, clearly enough, of being dishonest in her own interest. The acts making up the offences were repeated, committed over an extended period, and not without a measure of sophistication. Overshadowing the entire subjective case for the applicant was the enormous sum of missing cash to which I have referred many times. 3. In my opinion, it was well open to the sentencing judge not to be satisfied on balance that emotional or mental difficulties on the part of the applicant had contributed to the offending. 4. I would not uphold this ground. Ground 4: The sentence was manifestly excessive. Submissions of the applicant 1. It was said in writing in support of the final ground that the errors founding the above three grounds had played a role in the imposition of a sentence that was manifestly excessive. 2. It was also said that the aggregate head sentence of eight years was imposed after the application of a discount of 25% for the applicant's offer to plead guilty. The proposition was that the "starting point was therefore just below 11 years". (I interpreted this to be a reference to a "rule of thumb", because of course the discount would have been applied to each individual indicative sentence, and not to the ultimate aggregate sentence.) 3. It was said that sentencing statistics from the Judicial Commission show that the sentence imposed upon the applicant was "heavier than other comparable sentences", apart from the sentence imposed upon another offender whose offending took place over a longer period, and involved more than 10 times the quantum dishonestly taken by the applicant. 4. The very small proportion of offenders who received a sentence longer than that of the applicant for similar offending was relied upon for the proposition that her aggregate sentence is manifestly excessive. 5. In oral submissions, the decision of this Court in Subramaniam v R [2013] NSWCCA 159 was relied upon as a comparator. As for whether there was a shortfall of over $2.5 million in that matter, as there is here, it was said that, although there had been some reparation, even so there was a "substantial shortfall" in the repayment of the quantum of $45 million in that case. Determination of this ground 1. In my opinion, this ground can be resolved concisely as well. 2. It is true that the applicant was a middle-aged woman who had never offended previously. Despite her occupational achievements, she was not a person who had been particularly lucky in life, materially or otherwise, and had experienced her share of hardship. It is also true that she had pleaded guilty to all of the offences, that many spoke highly of her, and that there was no evidence of ostentatious enjoyment of the fruits of the offending. 3. To be weighed against that was: the total amount of money dishonestly taken; the duration, repeated nature, and reasonable complexity of the frauds; the huge amount unrecovered; and the pall that the latter cast over the whole defence case. Furthermore, it is to be recalled that special circumstances were found that had the practical effect of reducing the non-parole period by one year. 4. In short: the sentence is undoubtedly substantial, but so was the offending. 5. In my opinion, in light of the findings made about objective and subjective features, none of which I believe should be disturbed on the basis of the first three grounds, the aggregate head sentence and non-parole period are well within the discretion of the sentencing judge. 6. I would not uphold this ground. Proposed orders 1. Accordingly, I propose the following orders: 1. Leave to appeal granted. 2. Appeal dismissed. Abellanoza v R Sentencing Diagram (2.7 KB.pdf) ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 February 2021