New South Wales Court of Criminal Appeal R v Hovan [2005] NSWCCA 179 CITATION: This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 02/12/04 JUDGMENT DATE: 13 May 2005 JUDGMENT OF: James J at 1; Hidden J at 2; Bell J at 25 DECISION: Appeal allowed: on first charge, fixed term of imprisonment for six months from 26/02/04; on second and third charges, two-and-a-half years imprisonment, with non-parole period of twelve months, from 26/08/04. CATCHWORDS: CRIMINAL LAW - application for leave to appeal against sentence - concurring in the making of a false instrument to obtain a benefit - making and using a false instrument - applicant a solicitor - whether adequate allowance for pleas of guilty and assistance to authorities - desirability of quantifying discount Crimes Act 1900 LEGISLATION CITED: Criminal Appeal Act 1912 R v Halls (2002) 12 ACrimR 209 R v Thomson (2000) 49 NSWLR 383 CASES CITED: R v Waqa (No 2) [2005] NSWCCA 33 Pearce v The Queen (1998) 194 CLR 610 George Leslie Hovan (applicant) PARTIES: Regina (respondent) FILE NUMBER(S): CCA 2004/2346 CCAP SJ Odgers SC (applicant) COUNSEL: B Knox SC (Crown) R F Bergagnin & Co Solicitors (applicant) SOLICITORS: S Kavanagh (Solicitor for Public Prosecutions) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 03/11/0974 LOWER COURT JUDICIAL OFFICER: J X Gibson ADCJ IN THE COURT OF CRIMINAL APPEAL 2004/2346 JAMES J HIDDEN J BELL J 13 May 2005 Regina v George Leslie HOVAN Judgment 1 JAMES J: I agree with Hidden J. 2 HIDDEN J: The applicant, George Leslie Hovan, pleaded guilty in the District Court to a charge of concurring in the making of a false instrument to obtain a benefit, an offence under s178BB(1) of the Crimes Act which carries maximum sentence of five years imprisonment, and charges of making and using a false instrument, offences under s300(1) and (2) of the Act, each of which carries a maximum sentence of ten years imprisonment. On the first charge he was sentenced to imprisonment for a fixed term of twelve months to date from the date on which sentence was passed, 26 February 2004. On each of the other two charges he was sentenced to concurrent terms of imprisonment for three and a half years, to date from 26 February 2005, but in respect of those sentences his Honour fixed a non-parole period of two and a half years to date from 26 February 2004. In discussion with counsel after the sentences were pronounced, his Honour explained that it was his intention that the applicant serve a period of two and a half years in custody before being eligible for release on parole on 25 August 2006. 3 The applicant seeks leave to appeal against those sentences. Facts of first charge 4 The offence the subject of the first charge was committed late in October 1999, when the applicant was in practice as a solicitor. He needed money for the running of the practice, including wages for his staff and the rent for his office premises. To this end he entered into an arrangement with Mr Tony Denigris, the proprietor of a business supplying computer equipment, whereby Mr Denigris applied on his behalf to the Australian Guarantee Corporation (AGC) for finance, ostensibly for the purchase of such equipment. In so far as the application was stated to be for that purpose, it was false. In addition, accompanying documentation concerning the financial position of the practice and of the applicant personally contained information which was false in material respects. AGC approved the loan in amount of almost $102,000. That sum was paid to Mr Denigris's company, and from it a little over $89,000 was paid to the applicant. 5 In the same year, 1999, the applicant repaid to AGC amounts totalling about $5,180. In November 2001, at a time when the loan application was under investigation by AGC, he paid a further $40,000. At the time of sentence the company was still owed about $58,500. However, the applicant had entered into a contract to sell a property on the south coast of New South Wales for $97,000, and he gave evidence that he intended to make full restitution to AGC on settlement of that sale. Indeed, his evidence was that he had always intended to repay the loan. 6 Upon his arrest, the applicant declined to be interviewed about this matter. Facts of second and third charges 7 Over a period of years from 1984, the applicant acted for a family company known as Sakatik Pty Ltd in relation to a commercial dispute with another company, Liberty Investments Pty Ltd. Sakatik commenced proceedings against Liberty Investments in the District Court, and in December 1992 it obtained judgment in its favour. Liberty Investments appealed unsuccessfully. In the result, Liberty Investments was liable to Sakatik for the costs of the proceedings at first instance and on appeal. 8 In 2002 negotiations between the applicant and the solicitor for Liberty Investments achieved an agreement whereby those costs were assessed at $20,000, to be paid in three instalments between October and December of that year. On the applicant's part these negotiations were conducted without reference to his clients, the husband and wife who were the directors of Sakatik. The applicant's evidence, which the sentencing judge accepted, was that they owed him about $52,000 in solicitor/client costs and had agreed that he could retain whatever he could recover from Liberty Investments. 9 Liberty Investments' solicitor prepared a deed of release and forwarded it to the applicant. On 7 November 2002 he forged the signatures of the two directors of Sakatik on that document and applied what purported to be, but in fact was not, the common seal of that company. On the faith of the document, the solicitor for Liberty Investments provided the applicant with a cheque for the first instalment, $10,000. 10 At the time the deed was executed and that payment was made, the applicant's practice was under the control of a receiver appointed by the Supreme Court on 29 November 2001 in proceedings brought against him by the Law Society of New South Wales. The applicant had deposited the cheque for $10,000 into an account controlled by his wife. However, the situation came to the attention of the receiver when she intercepted the second instalment paid by the solicitor for Liberty Investments. The applicant then paid the first instalment of $10,000 to the receiver. 11 He was charged with these offences after he presented himself to police on 10 June 2003 and took part in an electronically recorded interview, during which he made relevant admissions. Significantly, at the time of these offences he was on bail in respect of the first charge. Subjective case 12 The applicant is now forty-nine years old. He has no previous convictions. He had been in practice as a solicitor for about twenty years before he was struck off in September 2003. There was evidence in the form of testimonials of his general good character, including his preparedness to provide legal services free or at a minimum cost to people of limited means. 13 His background was sketched in reports by the Probation and Parole Service, a psychologist and a psychiatrist. He had a rather difficult upbringing. It is not necessary to recite it except to observe that he appears to have emerged from it as a man who, despite his intellectual capacity, was insecure, emotionally dependent and burdened by a need to prove himself. He married twice, and there are three young children of his second marriage. The relationship had been under strain for some time prior to his separation from his second wife in October 2002. However, she appears to have remained supportive of him and at the time of sentence, although they were still estranged, they were again living under the same roof. He was unemployed and caring for the children, while she was working. 14 It emerges from the psychological and psychiatric reports that he has long been disorganised in the conduct of his affairs and has been a poor financial manager. It seems that, over the period of years during which the offences were committed, his practice was in financial difficulty and he was struggling to maintain it and to pay his staff. He became depressed and was drinking to excess. The psychiatrist, Dr Robert Hampshire, concluded that he was suffering from a number of conditions. Significantly for present purposes, these included a longstanding and previously undiagnosed Attention Deficit Hyper Activity Disorder. For several months prior to sentence he had been counselled by Mr W John Taylor, psychologist, who wrote of him in his report: As counselling has proceeded he is beginning to gain some insight with regard to the effect of his feelings of insecurity, and feelings of inadequacy particularly concerning his lack of skill in financial management. It is clear that for a number of years he has been suffering from a dysthymic disorder. That is, he has had feelings of dejection and sadness, and is likely to have experienced difficulties in his functioning. He had experienced a loss of efficiency and had difficulties in maintaining his focus on his work. As he perceived his situation becoming more desperate, his dysthmia progressed to a depressive disorder. 15 In evidence he expressed his remorse for his offending. He entered his pleas of guilty early in the proceedings and his Honour found that he was entitled to their "full benefit", both for the utilitarian value and as further evidence of his remorse. In addition, there was evidence that he had provided valuable assistance to the authorities of a nature which need not be set out for the purpose of this application. The application 16 Mr Odgers SC, for the applicant, argued that the sentencing judge fell into error in a number of respects in his remarks and that, in any event, the sentences are manifestly excessive. I consider that one of the matters raised about his Honour's approach to sentence is sufficient to move this Court to intervene and to determine for itself the appropriate sentences. That being so, I find it unnecessary to decide the other matters raised by Mr Odgers. 17 As I have said, his Honour expressly referred to the applicant's pleas of guilty. He also said that he had "taken into consideration on his behalf" the assistance to the authorities. However, his Honour did not quantify the reduction of sentence which those factors had earned the applicant, either individually or in combination. 18 In recent years, this Court has recognised the desirability, as a matter of policy, of specifying the discount of sentence an offender earns by assistance to the authorities: see the observations of Buddin J in R v Halls (2002) 127 ACrimR 209 at [13], and the authorities to which his Honour there refers. On the other hand, it has also been recognised that where, as is commonly the case, that offender has also pleaded guilty, it "will often be appropriate" to specify a combined discount: R v Thomson (2000) 49 NSWLR 383, per Spigelman CJ at [160]. 19 Given that the applicant's pleas were entitled to recognition both for their utilitarian value and as an expression of remorse, and that his assistance to the authorities was valuable, I would have thought that a reduction of sentence of the order of forty percent was appropriate. The aggregate sentence imposed upon the applicant was four and a half years imprisonment. If that were the result after a forty percent deduction, the starting point would have been seven and a half years: a term which would be excessive for these offences, viewed purely objectively. The case is yet another demonstration of the desirability of transparency in the sentencing process in cases where there have been pleas of guilty and assistance to the authorities, at least by the specification of a notional starting point: cf. R v Waqa (No 2) [2005] NSWCCA 33, per Dunford J at [13]. Re-sentence 20 In the applicant's favour, I am mindful that it was always his intention to repay the loan the subject of the first charge and that, in respect of the second and third charges, his clients would have had no objection to his retaining the amount which he received. Nevertheless, the three offences involved dishonesty on the part of a man pursuing a profession which, in the public interest, demands a high degree of probity. The second and third offences also involved his dealing with money in such a way as to conceal its receipt from the receiver appointed by the Law Society. Further, those offences were committed while he was on bail in respect of the first offence. 21 We received further evidence by way of affidavit for the purpose of re-sentence. It is unnecessary to go to the detail of it. As one would expect, the applicant's situation has strained his relationship with his family and his current placement has compromised his contact with his children. The sale of the south coast property had run into difficulties, but it seems that they have been resolved and payment of the amount outstanding to AGC can be made. He has experienced particular difficulties in prison, partly due to the fact that a significant part of his practice as a solicitor was in the field of criminal law. 22 Leaving out of account the applicant's pleas of guilty and his assistance, I consider that the global sentence appropriate to represent the totality of his criminality is imprisonment for five years. Because of the pleas of guilty and the assistance, I would reduce that term by forty percent to three years. At the time of sentence the applicant had expressed his willingness to provide further assistance to the authorities, although he had not entered into a formal undertaking to do so. It seems, in any event, that that further assistance is not likely to be required. That being so, for the purpose of s5DA of the Criminal Appeal Act, I would not assign any part of that reduction of sentence to future assistance. 23 In determining the global sentence and the discount to be applied to it, I am not unmindful of the need to fix sentences appropriate for each of the charges in accordance with the principles in Pearce v The Queen (1998) 194 CLR 610. I would adopt the sentencing judge's approach of accumulating the sentences in respect of the second and third charges upon that in respect of the first, recognising that they represent discrete episodes of criminality. Like his Honour, I also find special circumstances. Orders 24 I would propose that leave to appeal be granted, the appeal be allowed and the sentences passed in the District Court be quashed. In lieu, I would sentence the applicant as follows: On the first charge, a fixed term of imprisonment for six months, to date from 26 February 2004; On each of the second and third charges, imprisonment for two and a half years, with a non-parole period of twelve months, to date from 26 August 2004. I would direct the release of the applicant on parole on 25 August 2005. 25 BELL J: I agree with Hidden J. ********** 24/05/2005 - To distinguish his Honour from her Honour J C Gibson DCJ. - Paragraph(s) - 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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