New South Wales District Court CITATION: R v Thomas Douglas WATKINS [2006] NSWDC 54 HEARING DATE(S): 10/07/2006 - 03/08/2006 Trial 13/10/2006 - Sentence JUDGMENT DATE: 13 October 2006 EX TEMPORE JUDGMENT DATE : 10/13/2006 JUDGMENT OF: Berman SC DCJ DECISION: See paragraph 24 CATCHWORDS: Criminal Law - Dishonesty - Sentence - Gambling - Breach of trust LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Crimes Act 1900 CASES CITED: Rv Gilmore (1979) 1 A Crim R 416 PARTIES: DPP Thomas Douglas WATKINS FILE NUMBER(S): 05/11/0742 COUNSEL: S Higgins (Solicitor) - Crown A Martin - Accused SOLICITORS: NSW DPP Nikola Velcic & Associates (Offender) SENTENCE 1 HIS HONOUR: Thomas Douglas Watkins, known as Doug Watkins, was employed as the financial controller for a successful family company, Tasman KB Pty Limited. That company conducted its timber wholesaling business with a head office in Sydney and other offices in Brisbane and Melbourne. Over a considerable period of time the offender took over two million dollars from the company. He now stands to be sentenced on 43 separate charges under section 176A of the Crimes Act. Each offence carries a maximum penalty of 10 years. 2 The offender's crimes were relatively unsophisticated. He was not a signatory to any of the company's bank accounts, but he was permitted and indeed required to prepare cheques for signatures by one of the three signatories. On 43 separate occasions he presented a cheque to a particular signatory, David McAndrew. Each time the cheque was presented to Mr McAndrew for his signature, the payee line read "Pay Westpac St Marys". Mr McAndrew, no doubt influenced by his trust in the offender, believed that these were cheques which needed to be signed in order to effect a transfer from the company's Brisbane bank account to the company's Sydney bank account. The cheques were all drawn on the Brisbane account and the company had an account at the St Marys branch of the Westpac Bank, so Mr McAndrew signed the cheques. The offender had left a gap between the word "Pay" which is printed on the cheque and his handwritten entry "Westpac St Marys". Into each of those gaps the offender wrote the words "T Watkins", so that the payee line on the cheques now read "Pay T Watkins Westpac St Marys". He then deposited each of the 43 cheques into his own personal bank account at Westpac St Marys and spent the money gambling. 3 The offender pleaded not guilty to every one of the 43 separate charges. He maintained in evidence that the cheques contained the words "T Watkins" on them when Mr McAndrews signed them. He had different explanations as to why it was that, he as a person who was not a signatory to any of the company bank accounts, was paid large sums of money by the company. The explanations fitted into three broad categories, which given the wholesale rejection by the jury it is not necessary to further discuss. 4 This was a remarkably strong case. The accused gave evidence which revealed in a most obvious way that he was unable to explain the inexplicable. For a start, a forensic document examiner was able to determine that the words "T Watkins" were often written with different ink and thus a different pen to the words "Westpac St Marys". The accused's explanation for this was unconvincing in the extreme. The document examiner also noted that the gaps between the words in the payee line clearly suggested that the words "T Watkins" had been squashed in after the rest of the payee line had been written. 5 The accused could only provide unbelievable explanations for other aspects of his behaviour and he was not assisted by evidence called on his behalf either. His wife, from whom he is now separated, contradicted both him and herself as to important matters. 6 I want to make it quite clear the offender is not to be punished for having exercised his right to trial, nor for attempting to portray the head of the company as a shady and underhand gambler. He does not of course receive a discount for pleading guilty, nor can he suggest that he is remorseful for his conduct, but his sentence will not be increased beyond that which is appropriate. 7 Quite clearly each of these 43 offences represent a significant breach of trust. That is a matter which is implicitly an element of the offences, so is not a separate aggravating feature under section 21A of the Crimes (Sentencing Procedure) Act. In this case the breach of trust was significant given the offender's professional standing and his position within the company. I gather that the directors of Tasman AB Pty Limited were rather more concerned with timber wholesaling than they were with office administration, and it was for that reason that they relied on the offender to do his job properly and honestly. They were entitled to be able to trust him. 8 As they now know, they were not the first of the offender's employers to suffer a loss because of his dishonesty. In the early 1980s the offender committed a large number of offences of dishonesty against his then employer John Fairfax and Sons Limited. He committed 37 separate offences of larceny as a clerk, taking from that company the sum of $703,922.26. He was sentenced for those offences to a period of imprisonment for 4 years with a non parole period of 12 months. He is this not entitled to any leniency on the basis of his prior good character. 9 The offender is now 67 years of age. He was born in the country, left school at 14 and completed the intermediate certificate. He subsequently completed accounting studies and in 1965 he completed a course which entitled him to be a company secretary. He has always worked in the accountancy and financial services field. He was married and separated from his first wife. He was left with the care of his 14 year old son and he brought him up alone. His second marriage ended when his wife passed away in 1991 and he married again in 1994. That marriage appears to be at an end. He is now separated from his third wife. No doubt his past incarceration, which I will shortly mention, is a factor in that separation. 10 The trial at which the offender was convicted of those 43 counts was not the first trial that he faced for these matters. He earlier faced trial before Woods QC DCJ for some 30 offences covering, in a broad sense, the same offences which he must now be sentenced. He was sentenced by Woods DCJ on each count to identical periods of imprisonment, they being of 5 years, consisting of a minimum term of 3 years and 9 months with an additional term of 1 year and 3 months. Mr Watkins appealed those convictions and was successful, but spent some time in custody as a result. 11 In those circumstances, the cases surrounding the approach a sentencing judge should take following a conviction after a successful conviction appeal were examined in submissions before me. I will summarise them very shortly by saying that there is a principle or rule that ordinarily a judge in my position should not impose a sentence which is longer than the sentence imposed by the first sentencing judge. The reasons for this were explained in R v Gilmore (1979) 1 A Crim R 416. It is in the interests of justice that people are able to challenge their convictions without fear of receiving a greater sentence on retrial and there must not be an appearance that there was an element of retribution, whereby the criminal justice system operates such that people get longer sentences after having convictions overturned on appeal. 12 However, as it is clear and accepted by Mr Martin, who appears on the behalf of the offender, that approach is not universally to be adopted. There are a number of circumstances here which have persuaded me to impose overall a longer sentence than that earlier imposed. 13 I have taken into account that, as I have mentioned earlier, he was sentenced the offender for fewer counts than the 43 for which I am to sentence him. The money involved in those counts was slightly less than the money involved in the present 43 counts. There was a Crown appeal on foot which the Court of Criminal Appeal did not deal with after deciding to quash the earlier convictions. Woods DCJ did not accumulate any of the sentences which he imposed. And finally, with the greatest of respect to his Honour, I consider that the overall sentence he determined was inadequate. I have to give expression to my own view, taking into account and giving great weight to what has happened earlier. My own view is that the overall sentence I will impose must necessarily be a longer one than that which his Honour imposed. 14 I mentioned the question of accumulation. These offences occurred over a long period of time, approaching 3 years. There is no suggestion that at any stage the offender was overcome with remorse and determined himself that he would cease his illegal activities. I am satisfied that were it not for employees of the company discovering a discrepancy in relation to one particular cheque concerning QBE Insurance, the offender's wrongdoing would have continued indefinitely. 15 There were 43 separate occasions when the offender committed a criminal offence and I am satisfied that it would be quite wrong in principle for him to receive a sentence for those 43 offences which is equivalent to what he would have got had he committed a single offence. I have, in conformity with the High Court requirements as outlined in Pearce v The Queen (1998) 194 CLR 610, determined the appropriate sentence for each offence and then turned my mind to issues of accumulation. As will be made clear at the end of these remarks on sentence, I divided the offences into the three broad categories I mentioned earlier, the first dealing with expense codings, the second with codings for Austral Softwoods, and the third which were coded as loans and for QBE Insurance. 16 I mentioned earlier that the offender spent the money he took from Tasman KB Pty Limited gambling. This is not something that the offender himself admits. He claimed at trial that he was a successful gambler, but I am satisfied beyond reasonable doubt that that was not the case. Indeed, Mr Martin's submissions proceeded on the basis that I would find that the offender had a problem with gambling which he himself would not recognise. I am satisfied that the money, $2,242,642.22, was simply gambled away. 17 The fact that a person is addicted to gambling, as the offender appears to be, is rarely a matter of significant mitigation. The offender had a choice. Once he had gambled away all his own money he could have stopped and sought counselling, but he chose to continue gambling with other people's money, knowing better than most the risks that this activity had to his continued liberty. He began to take money from Tasman KB Pty Limited so that he could gamble very much with his eyes open as to what would happen to him if he was detected. In those circumstances the fact that the offender was motivated by a gambling addiction is not a matter of significant mitigation at all. 18 Mr Martin said that there were but two purposes of sending the offender to gaol. They were general deterrence and retribution. They are pretty good reasons to impose a significant sentence on the offender. Others in his position who find themselves able, through trickery, to take other people's money must know that if they do so and they are detected they will go to gaol for a significant period of time. The breach of trust which is implicit in each of these offences requires that the offender is harshly punished. The sentences must also recognise in a meaningful way just how wrong it is for someone to benefit through illegal use of someone else's money, especially when that person is placed, as the offender was, in a position of trust. 19 I am also satisfied, despite Mr Martin's submission, that there needs to be a component of personal deterrence in the present case. The offender should have learnt through his experiences in the early 1980s that if he acted dishonestly in a significant way he would be significantly punished as a result. He did not learn from his experience. The sentence I will shortly announce must act as a warning to him that if he finds himself in the position where he is able to take someone's money in the future, he will recognise the obvious result of doing so. 20 Although it seems clear that as a result of the offender's age and his convictions for these matters he is unlikely to be put in a position where he will have access to large sums of money, I am not at all convinced that he is beyond the realm of possibility that the offender will find himself in a position where he can take other people's money in the future. For that reason I have included in the sentence I will shortly announce a consideration of the need to personally deter this offender. 21 As I mentioned earlier in these remarks on sentence, the offender is now 67 years of age. He suffers from some medical problems as well, including high blood pressure, migraine headaches and attacks of gout. Although there are those medical issues, they are not such as to lead to a significant reduction in the custodial sentence that would otherwise be appropriate. 22 I have taken into account the offender's age and the fact that he will spend a significant part of his remaining years in custody. That is unfortunately a necessary consequence of the seriousness of his wrongdoing. However, I should say that were he a younger man he would have received a longer sentence. 23 Mr Martin asked that I find special circumstances. I will do so. They are primarily related to the offender's age. However, I am not going to adjust the ratio of non-parole period to head sentence as favourably to the offender as Mr Martin suggested. The effective non parole period I will shortly announce is the lowest I consider which reflects the abject gravity of the offender's conduct in all the circumstances of this case. 24 The sentences are as follows. For counts 1 to 7 the offender is sentenced to imprisonment, I set a non parole period of 4 and a half years to commence on 28 July 2005. It will expire on 27 January 2010. I set a head sentence on those matters of 5 years. For counts 8 to 21 I set a non parole period of 3 and a half years to commence on 28 July 2006. It will also expire on 27 January 2010. I set a head sentence of 5 years. For counts 22 to 43 I set a non parole period of 2 and a half years, commencing 28 July 2007, and a head sentence for those matters of 5 years. Thus, the offender is eligible to be released to parole on 27 January 2010. The overall effect of my sentence is a head sentence of 7 years with a non parole period of 4 and a half years. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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