District Court New South Wales Medium Neutral Citation: R v Gerald William PIEPER [2014] NSWDC 242 Hearing dates: 3 September 2014 Decision date: 09 September 2014 Before: Letherbarrow SC DCJ Decision: The offender is convicted of all counts. The offender is subject to an effective total sentence of 4 years and 9 months and an effective non parole period of 3 years Catchwords: Misconduct in public office - common law offence - analogous statutory offences - utilitarian value of pleas of guilty - public opprobrium - factors relevant to seriousness of offending - issues of concurrency, accumulation and totality - general and specific deterrence - special circumstances Legislation Cited: Crimes Act 1900, ss 124, 125, 156, 157,159 and 160 Victims Rights and Support Act 2013, s97(1) Cases Cited: Blackstock v R [2013] NSWCCA 172, Jaturawong v R [2011] NSWCCA 168, R v Mungomery [2004] NSWCCA 450 , Pearce v The Queen [1988] HCA 57, Johnson v The Queen (2004) 78 ALJR 616, in R v MMK (2006) A Crim R 481, Markarian v The Queen [2005] HCA 25 Category: Sentence Parties: Director of Public Prosecutions Gerald William Pieper Representation: Crown: Queenan Defence: Weir File Number(s): 2012/220585 SENTENCE 1The offender appears for sentence after pleading guilty to six counts of misconduct in public office which occurred over a ten year period between 1 January 2001 and 31 December 2010. During this time he was employed as the general manager of the Riverina County Council (the County Council). In relation to the second count, he also seeks to have taken into account on a form 1 a further five offences of the same nature. 2Misconduct in public office is a common law offence for which there is no penalty prescribed by statute. Accordingly, the maximum penalty has been described to be "at large". 3Whilst it is the practice of the Court to adopt an analogous or corresponding statutory offence where one is available as a point of reference for the imposition of any penalty, this does not fetter the court's discretion. Blackstock v R [2013] NSWCCA 172 per Campbell J at [8] - [11]; Jaturawong v R [2011] NSWCCA 168 per Beazley JA, as her Honour then was, at [1] - [6]. 4Based on the agreed facts surrounding the offences in question, which I will summarise in a moment, I am of the view that analogous or corresponding statutory offences are those contained in ss 156, 159 and 160 of the Crimes Act 1900. These are larceny by a clerk or servant, larceny by persons in public service and embezzlement by a person in public service respectively, all of which carry a maximum penalty of ten years imprisonment. This was also the Crown's submission. Some of the subject offences could also be regarded as analogous to an offence under s 157 of that Act, being embezzlement by a clerk or servant, which carries a similar maximum penalty. 5Whilst Mr Weir, the offender's solicitor, accepted that ss 156 or 157 might be analogous to counts 1 to 4 inclusive, he submitted that those counts, as well as count 5, could likewise be regarded as analogous to fraudulent appropriation under s 124 of the Crimes Act 1900, which carries a maximum penalty of two years imprisonment. In addition, he submitted that counts 1, 4 and 5 could also be viewed as analogous to larceny as a baillee under s 125 of the Crimes Act which carries a maximum penalty of five years imprisonment. With respect to count 6, he submitted that there was no statutory equivalent. 6In preferring the Crown's position as to this question, I note that the offence of fraudulent appropriation does not have to include any fraudulent taking of the property in the first place, which is not really similar to what occurred here in relation to counts 1 to 5 inclusive. Nor do I regard the offender's conduct as akin to that of larceny as a baillee. In relation to counts 1, 4 and 5, in my view the statutory offences referred to by the Crown, with the addition perhaps of an offence under s 157, are much more analogous, including in relation to count 6. 7The County Council constructs, operates and maintains the water supply for the city of Wagga Wagga and several surrounding shires, in all covering an area of more than 15,000 square kilometres in which over 60,000 persons reside. It was formed in 1997 under the provisions of the Local Government Act and currently employees 88 people. 8The offender started employment under the County Council's statutory predecessor, the Southern Riverina County Council, in 1975 and rose through various positions such as junior clerk, financial service administrator and manager of water and finance. He was responsible for the integration of the financial and administrative functions of the Northern and Southern Riverina Water County Councils when they merged and become the County Council in 1996/7 and he prepared the financial section of its 1996/1997 budget. 9In 1997, the offender was appointed as the County Council's general manager, a position that he held until he retired on 14 January 2011. In this role he was the County Council's primary link with elected councillors and was involved in the development of numerous projects such as its strategic business and financial plans and the upgrade and conversion of its computer system. 10As general manager, the offender also had an accounts receivable account and an accounts payable account. The former is for use by staff members in situations where the County Council needs to charge for goods and services provided to them by it. The latter is for use in situations where staff members are owed money for goods and services they have provided to the council. 11In relation to each of the offences, there is no evidence that anyone other than the offender undertook the various dishonest acts involved. 12Count 1 on the indictment arose in the following circumstances: In August 2006, the County Council purchased a VM model Holden Statesman for $52,360.31. On 5 March 2007, the offender processed several false accounting entries to acquire this vehicle from the County Council. On 7 March 2007, he transferred the vehicle into his own name through the RTA. On 23 March 2007, he sold the vehicle to Wagga Motors for $48,338.31, depositing these proceedings into two bank accounts in his own name. The financial loss to the County Council for this offence was $48,338.31. 13Count 2 on the indictment arose in the following circumstances: On 5 September 2007, an amount of $115,830 was deposited into another bank account of the offender's from the County Council's bank account as a result of an email he forwarded instructing that this be done. The cost for this payment was first recorded in the County Council's accounting system as a sundry management expense and was ultimately disguised by the offender in the County Council's records as a sick leave payout. The financial loss to the County Council for this offence was $115,830. 14Count 3 on the indictment arose in the following circumstances: The offender has for some time owned a property at Euberta, which is within the County Council's water supply area. During construction work on the property, the County Council installed a water supply connection at a cost of $14,500. On 15 September 2009, the offender directed an employee of the County Council to charge this sum to the offender's accounts receivable account. He then used funds generated from false expenses claims to pay off this amount. The financial loss the County Council for this offence was $14,500. 15As to count 4, on 22 October 2009, the County Council purchased a Mitsubishi Pajero from Thomas Bros Car Dealers for $64,301. On 29 January 2010, the offender instructed a subordinate to post a false entry in the County Council's accounting system resulting in $57,000 being deposited into the offender's accounts receivable account, thereby creating a credit in favour of the offender in that amount. On 26 May 2010, the offender then transferred the Mitsubishi Pajero into his own name through the RTA. The same day he sold the vehicle to Valley Motor Auctions Pty Ltd for $51,000, depositing the money into his personal account. The financial loss to the County Council for this offence was $51,000. 16As to count 5, on 12 February 2008, the County Council purchased a Ford Ranger from Hills Ford Wagga Wagga for $26,712.28. On 24 May 2010, the offender transferred the vehicle into his own name through the RTA. On 26 May 2010, the offender paid the County Council $23,000 for the vehicle using some of the $57,000 he had deposited into his accounts receivable account during the commission of a count 4. The financial loss to the County Council for this offence was $23,000. 17As to count 6, in his role as general manager of the County Council, the offender was issued with a NAB corporate credit card which, pursuant to the applicable guidelines, was not to be used for private purposes. Between 1 January 2001 and 21 December 2010, the offender used this credit card to make purchases of private goods and services, amounting to $15,299.11, from such entities as the Murrumbidgee Turf Club, Florentine Eye Wear, Windsor Smith Shoes as well as from various medical providers and Australia Post. The financial loss to the County Council for this offence was $15,299.11. 18The first matter on the form 1 involved the payment of $14,000 into the offender's bank account from the County Council's bank account on 29 September 2004. The funds in question were processed through a series of transactions via multiple internal accounts of the County Council ultimately being costed as a salary sacrifice superannuation payment and then credited as cash to the offender's personal bank account. The financial loss to the County Council for this offence was $14,000. 19The second matter on the form 1 arose out of the offender directing that a $2,000 cheque be drawn payable to a firm of solicitors and listed on the County Council's records as "retainer". This cheque was not given to its nominated payee but deposited into the offender's accounts receivable account thereby reducing its balance. The financial loss to the County Council for this offence was $2,000. 20The third offence on the form 1 occurred in the following circumstances: In February 2010, the County Council purchased a Toyota Prado motor vehicle for $84,668.55. On 20 August 2010, the offender requested a 65,000 dollar cheque be drawn in favour of the County Council from the ledger account entitled "Mains Planned Maintenance-Wagga Wagga". This cheque was then paid into the asset ledger account in relation to the Toyota Prado. On 27 October 2010, the offender then transferred this vehicle into his own name through the RTA. The financial loss to the council in relation to this offence was $65,000. 21The fourth matter on the form 1 arose when the offender received an invoice in the sum of $792.00 from Weser Pty Ltd, Surveyor, dated 2 November 2010, for work done on the offender's Euberta property. On 9/11/2013, the offender caused a cheque from the County Council's bank account to be drawn in favour of this surveying company with the relevant voucher attached containing the words "Survey plans" as the reference. The financial loss to the council in relation to this offence was $792.00. 22The fifth matter on the form 1 arose when, on 9 November 2009, at the request of the offender, a cheque from the County Council's bank account in the sum of $2,200.00 was drawn in favour of an entity called "Wagga Drawing Board" with a payment voucher listing it as "Modify Subdivision Plans Wilbundrie". This cheque was paid into the offender's accounts receivable account enabling him to reduce such account's balance. The financial loss to the County Council as a result of this offence was $2,200. 23None of these matters were discovered until after the offender had retired. After such discovery, the offender and his solicitor voluntarily met with police on 26 May 2012, at which time the allegations were put to him and he was asked whether he wished to be interviewed. He declined. On 2 July 2012, he was arrested and charged but was apparently released the same day. In these circumstances it is common ground that there is no element of pre-sentence custody to be taken into account. 24The offender's trial was listed for a four to six week hearing in Sydney commencing on 7 July 2014. On that date, the matter came before the criminal list judge, when it was adjourned to enable discussions to continue between the parties. On 9 July 2014, the accused was arraigned and entered the relevant pleas of guilty, again before the criminal list judge. In these circumstances, the Crown submitted that the utilitarian value of the pleas should be assessed as permitting no more than a 10% discount on each of the sentences that would otherwise have been imposed. 25Mr Weir argued that the discount should be "something greater" due to the fact that a saving of four to six weeks court time was "still of great utilitarian value" and a "trial court and judge" had not been allocated for the trial. In response, the Crown argued that the anticipated lengthy trial had been fully prepared by the Crown and that all witnesses had been arranged to attend. Overall, the Crown submitted that there had been little gain to the administration of justice by such a late plea. 26Whilst it's true that a judge had not yet been allocated for the relevant hearing by the time that the offender pleaded guilty, there is no doubt that the matter had been fixed for trial for some time and to the exclusion of a similar length trial. There is also no doubt that the degree of preparation involved by the Crown and the associated public expense, was significant. 27Accordingly, in my view, the utilitarian value of the offender's pleas is as submitted by the Crown and for each offence I have applied a discount of around 10% on the sentence that would otherwise have been imposed. However, as will be seen from a comparison between the indicated starting point of each sentence and the actual head sentence imposed, somewhat more than a 10% discount has been allowed due to the rounding down of the resultant sentence to the nearest month, particularly in relation to the shorter terms imposed. 28The period of almost two years between the offender's arrest and trial was not relied upon by Mr Weir as constituting a period of delay sufficient to operate as a mitigating factor within the relevant authorities, which are, in any event, usually concerned with delays between arrest and charging. However, he did seek to rely upon it as extending the period of public opprobrium which he argued that the offender has suffered. I will return to this issue a little later in these remarks. 29As to the offender's prior criminal history, he was born on 10 December 1957 and is currently 56 years of age. Other than the matters under consideration, he has a clear criminal history, which is of course evidence of good character. I have taken this into account in the offender's favour. However, it is common ground that good character carries less weight in matters of this nature where an offender relies upon it to assist in the commission of the relevant offences. 30On behalf of the offender, Mr Weir also called five character witnesses of some standing in the local community, all of whom attested to the offender's otherwise good character and such matters as his mentoring of young Australian rules footballers and his voluntary work including coaching in that sport. They also spoke highly of his reputation as a man with strong family values. 31It is also clear from the evidence that the offender was highly regarded at work, although of course no one knew of his offending at that time. 32Whilst I have taken into account this evidence of good character in the offender's favour, as with respect to his clear criminal history, such evidence carries less weight in relation to offences of this nature. Nevertheless, all of these witnesses indicated that they would remain supportive of the offender even after becoming aware of the nature of the offences. This says something of note about his character otherwise than in relation to the offending. 33However, the offender himself was not called to give evidence before me and therefore there is no direct evidence from him of any remorse. Further, in the pre-sentence report it is recorded that when questioned about the circumstances surrounding the offenders the offender "provided little information", stating that "processes undertaken were not the right procedures" and that he had "made mistakes", but he would not elaborate. He also denied to the author of this report having any financial stressors or any alcohol, drug or gambling problem. 34The report goes on to state that the offender "offered that he had been under stress at work in relation to staffing" but otherwise it contains no explanation as to why the offending occurred nor even any indirect expressions of remorse. In this respect, it is also worth noting that the offender has made no attempt to date to pay back any of the moneys that he dishonestly accrued. 35In this regard, the Crown has sought an order for compensation pursuant to s 97(1) of the Victims Rights and Support Act 2013 in the amount of $351,959.42, being the total of the moneys lost to the County Council. In indicating that this was not opposed, Mr Weir submitted that this fact should be taken into account in the offender's favour, not as evidence of remorse, but because it demonstrates that there is some prospect of the funds in question being recovered. Even assuming this to be the case, there is no real basis on which the offender could oppose such an order and therefore his lack of opposition to it is of little value. However, I have taken into account that there is some prospect that the moneys may ultimately be recovered. 36As to the offender's subjective circumstances, all of which I have taken into account, these are described in the pre-sentence report mentioned and in the various other pieces of documentary evidence. They were also fleshed out in some of the character evidence called on his behalf. 37The offender was born and raised in the Riverina area and was the second youngest of six siblings. His father passed away when he was 13 and his mother still resides locally. The offender maintains regular contact with her and his siblings. 38As to his schooling, the offender attended local primary and high schools, leaving midway through Year 11 to commence his employment with a prior incarnation of the County Council which he then maintained over the next 35 years. 39The offender was a keen sportsman and a very good Australian rules football player, playing numerous times in local representative sides and also representing New South Wales. After his playing days, he became involved in coaching and selecting the local Australian rules football teams. In fact, this year he was the chairman of selectors for one such local representative side. 40As to his personal life, the offender has been married for 35 years and maintains a strong relationship with his wife who is supportive of him. They have a high level of contact with both their children and grandchildren who all reside locally. 41As to his health, the two short reports from his local GP indicate that he is generally in good health although he has had slightly elevated blood pressure over the last few months not requiring medication, which his GP attributed to the stress arising from the current matters. He opined that if the offender is imprisoned this will most likely exacerbate this condition which may then require medication. Other than this and an abdominal hernia not currently requiring any treatment, the offender appears to be in good physical health. 42A number of the character witnesses also spoke of the offender becoming withdrawn and somewhat depressed since these matters came to light, although there is no mention of it in the medical reports unless it could be understood to be part of the stress to which the doctor refers. 43Overall, I am not satisfied on the evidence that any physical or mental condition that the offender has or which may develop or deteriorate, cannot be adequately treated whilst he is in custody nor that any such condition will make his incarceration more burdensome upon him as understood within the authorities. 44This matter has attracted a significant degree of local publicity. On behalf of the offender, Mr Weir relied upon various press clippings he tendered to demonstrate that publicity and to form the basis of a submission that the public opprobrium and associated personal, social and family distress which the offender must have suffered should be taken into account as a mitigating factor, especially in relation to specific deterrence. 45As to this issue, the Crown submitted that the relevant publicity did no more than record the progress of the matter through the courts and that, taken at its highest, it has led to the offender suffering no greater public denigration than that which naturally flows from the revelation of such offences. The Crown also pointed out that as these offences did not come to light until after the offender retired, they did not in any way effect his employment, career opportunities or benefits. 46There is, in my view, no evidence of the offender suffering any more than the usual degree of public opprobrium or publicity that occurs when any prominent citizen commits a crime. Whilst there may well be cases where the press's or the public's reaction is so great, for example where it may lead to death threats and the like, that these sorts of matters can be taken into account as mitigating factors, I do not believe that the current matter falls into that category. 47As mentioned, the offender gave no evidence before me and there is no explanation from him as to why these offences occurred nor is there any remorse. In these circumstances, Mr Weir accepted that the only rational inference was that the offender was acting for personal gain. Whilst it is not easy to make a favourable determination on the defender's prospects of rehabilitation in such circumstances, I am nevertheless satisfied that this offender presents a low level risk of reoffending which is also the opinion expressed in the pre-sentence report. Further, I am satisfied that bearing in mind the offender's age, his lack of any prior record and his otherwise good character, his prospects of rehabilitation are good and may improve further if he comes in time to better appreciate the extent of his wrongdoing. 48Any offence of misconduct in public office is serious. As to the factors which must be taken into account in assessing the degree of such seriousness, some guidance is given by the following comments of Hulme J in R v Mungomery [2004] NSWCCA 450 at [40]. This and other authority makes it clear that the amount of money involved in premeditated deception and the period of time over which the offences are committed are important factors in determining the extent of criminality. 49The amount of money involved in these matters is substantial and the period of time over which the offences were committed is lengthy. The position held by the offender and the nature and extent of the offending involves a serious breach of trust. In saying this, I accept Mr Weir's argument that a breach of trust is part of an offence of misconduct in public office itself and cannot be viewed as a separate aggravating feature, although he also accepted that it did bear on the seriousness or objective gravity of the offending. 50Further, here there are clearly a multiplicity of dishonest acts and several of them involved an obvious level of sophistication in relation to both their commission and the steps taken to avoid them being uncovered. In addition, Mr Weir, as mentioned, accepted that the only available inference was that the offences were committed for the purpose of financial gain. He also accepted that this constitutes an aggravating feature as not all offences of this type are committed for that purpose. 51In relation to the offences involving the use of his employer's credit card, Mr Weir submitted that this was in effect a minor matter, apparently because of the amount of money involved. Whilst it is clearly not the most serious offence, I view it as more serious than some of the other counts because it obviously involved many dishonest acts committed over some ten years. 52Overall, I would regard the level of criminality involved in each of these matters as quite significant and each are objectively very serious. 53As to the importance of general deterrence in matters of this nature I quote what Hulme J said in Mungomery at [41]: The cases in this area also stress the importance of general deterrence. Organisations, be they business or government, cannot operate effectively without placing a good deal of trust in their employees. Opportunities for the abuse of that trust are legion and breaches are often difficult to detect. Commonly, offenders are able to continue their depredations for long periods. Often matters only come to light when the total amounts involved become too large to be overlooked. It seems to me an inevitable inference that there must be many cases where offending is never discovered - a factor also arguing for sentences which are substantial deterrents. 54Those in positions of authority must understand that this sort of offending will not be tolerated by the courts and will result in stern sentences being imposed. Further, specific deterrence must also not be forgotten in this matter. 55In my view, the only appropriate sentence in relation to each of these matters is one of imprisonment. 56As to issues of concurrency, accumulation and totality which arise when sentencing for more than one offence, in structuring all the sentences that I will impose shortly, I have had careful regard to the relevant principles as discussed by the High Court in Pearce v The Queen [1988] HCA 57 at [45] and in Johnson v The Queen (2004) 78 ALJR 616 at [26] and as further explained by the Court of Criminal Appeal in R v MMK (2006) A Crim R 481 at [11]. In this regard, Mr Weir submitted that counts 3, 5 and 6, being those involving the smallest amounts of money, should be dealt with by way of fixed terms made entirely concurrent with the sentences for the remaining counts which should be partially accumulated. If those counts were not dealt with in that way, Mr Weir submitted, as I understood him, that care should be taken to avoid the imposition of too lengthy an overall non-parole period. 57Upon reflection, I do not agree that any of the offences in this matter should be concurrent. Each involves separate and distinct acts of offending committed at different times. Further, the seriousness of each individual offence is such that it would not be properly reflected in concurrent sentences. 58Nevertheless, I have generally adopted, inter alia, fairly low periods of accumulation so as not to offend the principle of totality. 59In addition, in taking into account all the matters to which I have referred, I have adopted the approach of McHugh J in Markarian v The Queen [2005] HCA 25 at [51]. 60As to the issue of special circumstances, it was common ground that these arise in the present matters thereby allowing the usual statutory ratio between the head sentence and the non-parole period to be varied. In this respect, I rely upon the fact that this will be the offender's first time in prison as well as his prospects of rehabilitation and the need to partially accumulate the sentences to be imposed. 61The offender is convicted on all counts. 62In relation to count 3, I indicate a starting point of five months imprisonment and impose a fixed term of imprisonment of four months, commencing on 9 September 2014 and expiring on 8 January 2015. 63In relation to count 5, I indicate a starting point of eight months imprisonment and impose a fixed term of imprisonment of seven months, commencing 9 October 2014 and expiring on 8 May 2015. I do not intend to fix a non-parole period in relation to this sentence as any such period would be subsumed by the sentence for the next count. 64In relation to count 6, I indicate a starting point of 12 months imprisonment and impose a fixed term of imprisonment of ten months, commencing 9 November 2014 and expiring 8 September 2015. I do not intend to fix a non-parole period in relation to this sentence as any such period would be subsumed by the sentence for the next count. 65In relation to count 1, I indicate a starting point of two years imprisonment. A non-parole period of one year and one month is set commencing on 9 December 2014 and expiring on 8 January 2016. The total sentence imposed is one of one year and nine months commencing on 9 December 2014 and expiring on 8 September 2016. 66In relation to count 4, I indicate a starting point of two years imprisonment. A non-parole period of one year and one month is set commencing on 9 March 2015 and expiring on 8 April 2016. The total sentence imposed is one of one year and nine months, commencing on 9 March 2015 and expiring on 8 December 2016. 67In relation to count 2, for which I consider it appropriate to take the five matters on the form 1 into account, I indicate a starting point of four and a half years imprisonment. A non-parole period of two years and three months is set, commencing on 9 June 2015 and expiring on 8 September 2017. The total sentence imposed is one of four years, commencing on 9 June 2015 and expiring on 8 June 2019. 68The offender is therefore subject to an effective total sentence of four years and nine months and an effective non-parole period of three 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. 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: 18 December 2014