New South Wales Court of Criminal Appeal CITATION : Heather Kathleen Power v Regina [2002] NSWCCA 244 FILE NUMBER(S) : CCA 60801/01 HEARING DATE(S) : 19 June 2002 JUDGMENT DATE : 19 June 2002 PARTIES : Heather Kathleen Power v Regina JUDGMENT OF : Greg James J at 1,43; Smart AJ at 2 LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : 01/11/0713 LOWER COURT JUDICIAL Latham DCJ OFFICER : COUNSEL : (A) M Ramage QC (C) D Frearson SOLICITORS : (A) Turner Freeman (C) S E O'Connor CATCHWORDS : Sentencing - major fraud - principles to be applied - substantial head sentences with lesser non-parole periods LEGISLATION CITED : Crimes (Sentencing Procedure) Act 1999 Pantano (1990) 49 A Crim R 328 CASES CITED: Regina v Pearce 194 CLR 610 Corbett 52 A Crim R 112 at 117 Bugmy v The Queen (1990) 169 CLR 525 DECISION : See para 42 IN THE COURT OF CRIMINAL APPEAL 60801/01 GREG JAMES J SMART AJ Wednesday, 19 June 2002 REGINA v HEATHER KATHLEEN POWER JUDGMENT 1. GREG JAMES J: The Court is in a position to give judgment immediately. I ask Smart AJ to deliver the first judgment. 2. SMART AJ: Heather Kathleen Power seeks leave to appeal against the asserted severity of sentences imposed on 39 counts of make false instrument, to which she pleaded guilty. The maximum penalty for each offence is ten years. The offences commenced on 16 October 1996 and continued until 27 October 2000, a period of four years. The making of the false instruments resulted in her employer, the National Bank of Australia Limited, being defrauded of large sums of money. 3. She held the middle management position of Personal Banker at the Seven Hills or Blacktown branch of the bank, and had authority to approve loans. She created a number of fictitious loans with fictitious customers. She entered into the NAB computer false details, which satisfied the bank's requirements for the particular loan in question. 4. On most occasions she drew down the funds the subject of the loans by obtaining bank cheques for the amounts nominated by her. 5. Details of the offences, the sentences and non-parole periods are as follows: Count Date of Offence Amount Sentence 1. 4 May 2000 $230,000 7 years NPP 4 years 2. 27 October 2000 $390,000 7 years NPP 4 years 3. 1-30 June 1999 $310,000 5 years Fixed Term 4. 14 September 2000 $325,000 7 years NPP 4 years 5. 14 September 2000 $330,000 7 years NPP 4 years 6. 23 June 2000 $395,000 7 years NPP 4 years 7. 9 June 2000 $335,000 7 years NPP 4 years 8. 8 June 2000 $355,000 7 years NPP 4 years 9. 1 June 2000 $285,000 7 years NPP 4 years 10. 29 May 2000 $430,000 7 years NPP 4 years 11 . 16 October 1996 $ 80,000 12 months Fixed Term 12. 16 December 1996 $130,000 12 months Fixed Term 13. 30 May 1997 $ 64,000 2 years Fixed Term 14. 13 July 1997 $112,000 2 years Fixed Term 15. 19 September 1997 $ 95,000 2 years Fixed Term 16. 19 September 1997 $ 93,000 2 years Fixed Term 17. 19 September 1997 $ 97,000 2 years Fixed Term 18. 11 February 1998 $ 90,000 2 years Fixed Term 19. 11 March 1998 $ 92,000 2 years Fixed Term 20. 12 March 1998 $ 75,000 2 years Fixed Term 21. 13 March 1998 $100,000 2 years Fixed Term 22. 16 November 1998 $125,000 5 years Fixed Term 23. 5 February 1999 $125,000 5 years Fixed Term 24. 25 February 1999 $140,000 5 years Fixed Term 25. 5 March 1999 $130,000 5 years Fixed Term 26. 5 March 1999 $127,000 5 years Fixed Term 27. 11 March 1999 $ 94,000 5 years Fixed Term 28. 11 March 1999 $117,000 5 years Fixed Term 29. 2 July 1999 $145,000 5 years Fixed Term 30. 19 September 1999 $145,000 5 years Fixed Term 31. 30 August 1999 $160,000 5 years Fixed Term 32. 10 September 1999 $175,000 5 years Fixed Term 33. 17 September 1999 $155,000 5 years Fixed Term 34. 15 October 1999 $273,000 5 years Fixed Term 35. 9 November 1999 $197,000 5 years Fixed Term 36. 19 November 1999 $350,000 5 years Fixed Term 37. 10 February 2000 $250,000 7 years NPP 4 years 38. 3 March 2000 $180,000 7 years NPP 4 years 39. 17 March 2000 $380,000 7 years NPP 4 years 6. In broad terms the judge has imposed the lenient sentence of 12 months fixed term for the 1996 offences and that of two years fixed term for the offences in 1997 and early 1998; five years fixed term for the offences in the latter part of 1998 and in 1999; and seven years, with a non-parole period of four years for the offences in 2000 as the criminality escalated. There was a noticeable increase in the amounts defrauded in the year 2000. The judge found that the applicant had, in the course of 2000, defrauded the bank of $3.88 million. The sentences of twelve months fixed term on counts 11 and 12, and those of five years fixed term imposed on counts 3 and 22-36 inclusive, commenced on 29 October 2001. The sentences of two years fixed term on counts 13-21 inclusive, and those of seven years with a non-parole period of four years on the remaining counts commenced on 29 October 2002. Thus, the applicant received sentences of imprisonment totalling eight years and because of the fixed terms and the non-parole period, did not become eligible for release on parole for five years. 7. While the amounts the subject of the offences total about $7.681 million, some of the fictitious loans which the applicant raised were used to repay earlier fictitious loans. The actual amount which she expended was $5.81 million. This sum was expended on jewellery, art, furnishings, wine and luxury living. A significant proportion of the property purchased with the stolen funds has been recovered, but on sale the prices achieved for such property were well below the prices paid to either Mr Chriss Smith or Martin and Stein Jewellery Store. 8. Inspector Gerondis, who had the overall control of the police investigation, said that the bulk of the bank's funds went to Martin and Stein Jewellery Store, and Smith. The inspector said that some of the items were sold to the applicant at highly inflated prices. They took advantage of her naivety. It is apparent that Messrs Smith and Stein told lies to the inspector when he initially spoke to them in the course of his investigation. 9. Inspector Gerondis asked Messrs Smith and Stein to provide a statement in relation to these matters, but they refused. Inspector Gerondis said that Messrs Smith and Stein insisted that they had but a business relationship with the applicant. The applicant claimed a closer relationship. Smith did not dispute that he had gone to New Zealand with her. The photographs suggest more than a business relationship. 10. It was common ground before the judge that as a result of the sale of the property purchased by the applicant, the bank had recovered between $1.5 and $1.8 million. There was other jewellery, which had not been sold. The judge proceeded on the basis of $1.8 million and counsel for the applicant today suggested that perhaps the figure might be a little more. 11. The bank has instituted equity proceedings against the applicant, Chriss Smith and Vista Nominees Pty Limited, trading as Martin and Stein Antiques. There was no evidence as to the stage which those proceedings had reached at the time of the sentencing hearing. It is obvious the proceedings will be of some complexity. 12. On 31 October 2000 an audit manager, Investigations, of the bank, asked the applicant about a number of loans in various names, all with the same address at Kirribilli, she having rented a unit there. She confessed what she had done. The bank notified the police and that night the police called at her home at North Rocks, and took her to the Kirribilli unit. That had been lavishly furnished and included art works. The police made an inventory of the contents. That night she entered into a record of interview with the police in which she made extensive admissions. 13. Inspector Gerondis stated that the applicant was candid with the police and co-operated fully with the police investigation. She supplied such information as she had. He was satisfied that she had done her best to assist the police. 14. In her evidence the applicant explained how she came to offend. Her father had recently died and she did not want to return to an empty house alone. Her husband was at the football. It was late September 1996. She went into the Queen Victoria Building and started browsing in the shops. Ultimately, she went into Martin and Stein's store there. From that point matters developed. 15. Shortly thereafter, the first offence was committed. She loved jewellery and they were very attentive and quite flattering. They, especially Smith, let her know when they had items they thought that she would like. She became a frequenter of their store. A relationship developed with Smith. It is not necessary to recite the details. 16. She used the bank's funds to purchase the items she was offered, and to engage in high living. She kept what she was doing from her husband. The applicant had been an employee of the bank for twenty-six years and was trusted by it. The bank would rightly have taken the view that her activities did not require regular checking and investigation. 17. The judge said that the applicant's motivation for embarking upon such an extraordinary criminal escapade at the age of forty remained partially obscure. The judge referred to the report of Dr Walker, psychologist, and that of Dr Westmore, psychiatrist. The applicant verified what she had told each of them. 18. Dr Walker had seen the applicant on some ten occasions, and her report contained a very detailed history. She placed emphasis on the applicant's background and her relationships, and expressed the view the applicant had committed the offences "after a time of cumulative stress as literally acting out a fantasy". Dr Walker detailed these stresses. She also thought that the applicant became prone to abnormal disassociation as a result of sexual abuse at the age of seven years. 19. Dr Walker concluded: "... her criminal behaviour began with emotional enmeshment by Messrs Smith and Stein in a lady who was vulnerable from her upbringing and who had suffered a series of recent traumas and stresses. Mrs Power is also vulnerable to influence, and repeated suggestion by being, in my estimation, highly hypnotisable, which involves not just being disassociation-prone, but also highly suggestible and prone to live in fantasy worlds much of the time. Her being strongly disassociation-prone ... made it possible for her to put aside rational thinking and to work her job in the bank, live with her husband and at the same time be involved in the stealing of money and the 'high flying' lifestyle." 20. While all this may well be true, it is not an entirely satisfactory and convincing explanation for the applicant defrauding the bank of such large sums over such an extended period. 21. The judge thought that the most succinct explanation appeared in Dr Westmore's report of 12 June 2001: "Mrs Power does have some personality vulnerability, although not a personality disorder. Her problems commenced around the time she is likely to have been low in mood, due to the death of her father and an incident in her place of employment. Her marriage was having difficulties and James and Chriss, due to the attention they showed her, met a need she had at that time. This attention, and her wish for more attention of a similar type, possibly fuelled her desire to keep offending to enable her to obtain more money, which she could spend at Martin and Stein, and continue receiving the attention she was enjoying from James and Chriss." The judge continued: "The prisoner's father died on 11 July 1996 and the incident in the workplace was a robbery at the Seven Hills branch, reportedly on 23 September 1996, for which the prisoner received some perfunctory counselling." 22. I do not think that the judge can be criticised for saying that the applicant's motivation remained partially obscure. The judge was entitled to take the view, that while some factors existed which explained in part what led to her committing the offences, they did not completely explain her motivation. 23. The judge accepted that at the time of the applicant's initial meeting with Smith, she was emotionally vulnerable, needy and depressed. So much is clear from the reports of Doctors Walker and Westmore. It is also clear that she was subject to considerable stresses and living at least in part in a fantasy world. In some respects, she was pursuing a Jekyll and Hyde existence. 24. The applicant has to accept primary responsibility for her conduct and her criminality. The judge rightly regarded her criminality as considerable and serious, pointing to the large amounts taken, and expended, the conduct lasting over four years, thirty-nine separate charges, and the offences committed in breach of trust. She relied on Pantano (1990) 49 A Crim R 328 at 330. 25. She was conscious of the need for general deterrence and the vindication of the criminal law, where a position of trust had been abused. 26. The applicant was born on 12 March 1956. She was a person of prior good character. Indeed, the testimonials as to that were very strong, and she could fairly be described as a person of exceptional prior good character. The judge acknowledged that imprisonment would weigh heavily upon her, that she had destroyed her good reputation, her life with her husband and her employment prospects. The judge accepted that there was little or no prospect of her re-offending, so that rehabilitation was no longer a factor in the sentencing exercise. 27. She also held that some lesser weight should be placed on the principle of general deterrence in view of the applicant's emotional and psychological state at the time of the offences. I agree. 28. The judge found special circumstances on the basis that this was the applicant's first custodial sentence. The judge also gave her the maximum discount allowable for her early plea and her contrition. The judge found that her attitude since she was first confronted had been one of abject remorse and co-operation with the investigating officials. I do not think it can be said, so far as the head sentences are concerned, that the judge erred in the allowances she made for the early plea of guilty and the contrition. 29. What I have said so far disposes substantially of the applicant's contention that there were significant errors of fact. I reject the applicant's submission that the judge excluded concepts of rehabilitation from the exercise of the sentencing discretion. She thought that it had taken place and that there was little or no risk of re-offending. The judge took those factors into consideration in determining the sentences which she was going to impose. 30. The applicant contended, in her written submissions, that having regard to the judge's remarks the applicant should be given the full allowable discount for her early plea of guilty, contrition and co-operation with the investigating officials, and that must mean a discount of 25 per cent. It was submitted that the judge must therefore have started with a sentence of ten years and eight months, and that this was manifestly excessive. 31. In his oral submissions today, counsel submitted that this was a case where the discount, when all the factors are taken into account, should exceed 25 per cent. This would result in a starting point in excess of 11 years. A mathematical approach is not applied. Even more importantly in the present case, this is not how the judge approached the sentencing task. Following Pearce 194 CLR 610, she determined the sentence in respect of each offence, had regard to the principle of totality, and then decided that the sentences should be partially concurrent and partially cumulative. 32. Amongst other matters, this was necessary to adequately reflect the criminality involved. Correctly, the judge did not take the overall approach postulated by the submissions of the applicant to which I have recently referred. In fixing the head sentence, I do not think that the judge gave insufficient weight to the evidence of prior good character. Because of the singular nature of the facts in the present case, I do not regard the statistics produced by the Judicial Commission as being of great assistance, although I have had regard to them. 33. In Pantano (1990) 49 A Crim R 328 at 338 I reviewed some of the decisions of this Court in major frauds between 1980 and 1987. Allowing for inflation, they are still useful, even though they were imposed under a different sentencing regime. In Gale and Glenister and Garrity although there were effective head sentences of thirteen and twelve years, the non-parole periods were less than five years. 34. In McKechnie the effective head sentence was one of twelve years, with a non-parole period of seven years. When McKechnie was decided, remissions of one-third were usually also applied to the non-parole period. That would have led to an effective non-parole period of less than five years. The offenders in those cases all held senior executive positions. Indeed, Garrity was an official liquidator. The applicant held a more junior position. 35. In the present case the sentences of five years, with no non-parole periods fixed are manifestly excessive. They do not reflect the strong subjective features of the applicant and the discounts earlier mentioned to which she is entitled. The period which she is likely to spend in prison on those sentences is likely to be greater than that for the more serious offences in 2000, where the non-parole period is four years. 36. Where there is an accumulation of sentences, anomalies are sometimes difficult to avoid, when regard is had to the principle of totality, and the overall period which should be spent in gaol. Concurrent sentences of five years with a non-parole period of three years would not have been open to challenge in respect of the offences committed in the latter part of 1998 and in 1999. They would also have adequately reflected the principle of totality. 37. For the most serious offences, namely those committed in 2000, I do not regard the concurrent head sentences of seven years as being fairly open to challenge. Lesser head sentences could not be imposed. If those sentences had stood alone, I would not have regarded the non-parole period of four years as excessive. Of course, those sentences do not stand-alone. There is an accumulation of sentences. This, of itself, is a special circumstance. 38. In Corbett 52 A Crim R 112 at 117 this Court, comprising Gleeson CJ, Priestley JA and Matthews J, understandably said: "Nevertheless, a feature of past sentencing for 'white collar' crimes involving fraudulent abuse of trust, and sometimes involving fraud on the public purse, has been the imposition of lengthy head sentences, but with a substantial gap between head sentence and non-parole periods or minimum terms. This has probably been the consequence of a desire on the part of the courts, on the one hand, to reflect the need for general deterrence and, on the other hand, to give due account to the fact that the offenders involved frequently have no prior criminal history, are not likely to re-offend, and have good prospects of rehabilitation." 39. The reasons for that policy apply with particular force in the present case. Further, there is some explanation as to why the applicant acted as she did. 40. Section 41(1)(b) of the Crimes (Sentencing Procedure) Act 1999 requires a non-parole period to be the minimum term for which the offender must be kept in detention in relation to the offence. This is a statutory recognition of the principle which has applied for many years: Bugmy v The Queen (1990) 169 CLR 525 and cases there cited. 41. In the present case there are special circumstances which underline the validity and applicability of the policy in Corbett and also reflect the purpose of s 44(1)(b) of the Crimes (Sentencing Procedure) Act 1999. I have earlier referred to them. In my opinion, an effective non-parole period of five years is manifestly excessive. It exceeds the minimum period for which the offender must be kept in detention in relation to these serious offences. 42. I propose the following orders: 1 Leave to appeal granted. 2. Appeals allowed in part. 3. Dismiss the appeals as to counts 11 and 12, namely, a sentence of a fixed period of twelve months on each count and as to counts 13-21 inclusive, namely, a sentence of two years fixed period on each count. 4. Appeals as to counts 3, 22-36 inclusive allowed in part. Dismiss the appeal against a head sentence of five years on each count, but as to each count, fix a non-parole period of three years commencing on 29 October 2001 and expiring on 28 October 2004. 5. Appeal as to counts 1, 2, 4-10 and 37-39 inclusive allowed in part. Dismiss the appeals against the head sentence of seven years on each count commencing on 29 October 2002. Quash the non-parole period of four years. In lieu thereof, a non-parole period of three years is fixed in respect of each count, commencing on 29 October 2002 and expiring on 28 October 2005, on which day the applicant is eligible for release on parole. 43. GREG JAMES J: I agree. The orders will be as proposed by Smart AJA. ********** 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.