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Court of Criminal Appeal 29 June 2017

R v Jafari

[2017] NSWCCA 152

Fraud & dishonestyTheft & property
CRIME SENTENCE THEFT OF $220,000 FROM TRUST FUND MONEY DISBURSED AT HIS DIRECTION SIGNATURE OF CO‑CONTROLLER FORGED MONEY APPLIED TO REPAY PERSONAL DEBT

Citation: R v Jafari [2017] NSWCCA 152
Court: NSW Court of Criminal Appeal
Date: 29 June 2017
Judges: Basten JA at [1]; Johnson J at [120]; Davies J at [121]

Background

The respondent was a senior solicitor employed by the Australian Government Solicitor. In August 2008, he and a colleague jointly managed a Commonwealth trust fund held for the benefit of a young man seriously injured during Australian Defence Force training. The fund held $3.5 million.

Within days of the fund being established, the respondent directed a payment of $220,000 from the trust to a personal friend, Ms Morcos. He signed the payment authority himself and forged his colleague's signature. The money was used to repay a personal debt: the respondent had previously gambled away approximately $200,000 that Ms Morcos had entrusted to him for investment.

The defalcation was not discovered until May 2014. A theft charge under s 131.1(1) of the Criminal Code 1995 (Cth), carrying a maximum of 10 years imprisonment, followed in early 2016. The respondent pleaded guilty. The District Court convicted him and imposed a sentence of 2 years imprisonment to be served by way of an intensive correction order (that is, in the community rather than in custody). The Director of Public Prosecutions appealed, arguing the sentence was manifestly inadequate.

  • Whether the 2-year head sentence was manifestly inadequate given the objective seriousness of the offending.
  • Whether it was appropriate to order the entire sentence to be served by way of an intensive correction order, with no period of actual custody.
  • How a diagnosed gambling addiction should be weighed in sentencing, including its effect on moral culpability and the purposes of general deterrence.
  • Whether the circumstances surrounding repayment (timing, amounts offered, and the eventual civil settlement) reflected genuine remorse and mitigated the sentence.

Decision

The Court of Criminal Appeal allowed the appeal, finding that the sentencing judge had erred by ordering the entire sentence to be served by way of an intensive correction order. The Court accepted that the sentencing judge correctly identified the need for a significant custodial sentence but concluded that no part of that sentence should be served behind bars. That conclusion was wrong in principle.

On objective seriousness, the Court found the offending was grave. The respondent was a trusted legal professional who abused his position of authority over a vulnerable beneficiary, forged a colleague's signature, and took no steps to repay the money for nearly six years. The Court was also critical of the sentencing judge's characterisation of the repayment negotiations as showing genuine remorse: the respondent had consistently sought to avoid paying interest and, as at the date of sentencing, had repaid nothing.

The Court examined the role of the respondent's compulsive gambling diagnosis in the sentencing exercise. Consistent with authority, a gambling addiction may reduce moral culpability to a degree and may also call for a sentencing response that addresses rehabilitation. However, the Court found that professional misconduct of this nature remains a vehicle for general deterrence regardless of an underlying addiction. The addiction did not displace the need for actual imprisonment.

The head sentence was increased to 3 years. However, the Court accepted that the respondent's need for treatment of his gambling addiction justified an unusually long period of conditional release rather than a straight non-parole period. A recognizance release order was made to take effect after 18 months of actual custody, with conditions directed at rehabilitation.

Orders Made

  • The appeal by the Director of Public Prosecutions (Cth) against sentence was allowed.
  • The District Court sentence of 30 January 2017 was set aside.
  • The respondent was resentenced to 3 years imprisonment commencing 30 January 2017.
  • A recognizance release order was made directing the respondent's release on 29 July 2018 (after 18 months in custody), on conditions including:
  • Good behaviour
  • Supervision by a probation officer
  • Compliance with the probation officer's directions, including counselling or psychiatric treatment for compulsive gambling
  • No interstate or overseas travel without written permission of the probation officer
  • The recognizance release order terminates on 29 January 2020, with security set at $500 without sureties.

Key Takeaways

  • A solicitor who abuses a position of trust over a vulnerable beneficiary's trust fund, forges a colleague's signature, and makes no repayment for nearly six years commits offending of high objective seriousness that warrants actual imprisonment, not merely a community-based order.
  • A diagnosed gambling addiction may, in appropriate cases, marginally reduce an offender's moral culpability and may justify rehabilitative conditions in sentencing. However, the Court of Criminal Appeal confirmed it does not displace the need for general deterrence, particularly where the offender is a trained legal professional.
  • Delay in repayment, and attempts to settle civil recovery proceedings on terms that exclude interest, may undermine a finding of genuine remorse at the time of sentencing.
  • Where a sentencing judge correctly identifies that a serious custodial sentence is warranted but then makes an order that effectively avoids all actual custody, that reasoning is self-contradictory and constitutes appellable error.
  • The Court demonstrated willingness to impose an unusually long period of conditional release (beyond the conventional ratio) where the circumstances specifically call for structured rehabilitation, here treatment for compulsive gambling.

Legislation and Cases Referenced

Legislation
- Criminal Code 1995 (Cth), s 131.1(1) (theft)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 4, 7, 21A, 67, 72
- Crimes (Administration of Sentences) Act 1999 (NSW), ss 81, 82
- Crimes (Administration of Sentences) Regulation 2014 (NSW), Pt 10
- Proceeds of Crime Act 2002 (Cth), ss 115, 320
- Criminal Appeal Act 1912 (NSW), s 5D

Cases
- Green v The Queen (2011) 244 CLR 462
- Griffiths v The Queen (1977) 137 CLR 293
- Johnston v R [2017] NSWCCA 53
- R v Henry (1999) 46 NSWLR 346
- Director of Public Prosecutions (Cth) v Gregory (2011) 34 VR 1
- Director of Public Prosecutions (Cth) v Page [2006] VSCA 224
- R v Grossi [2008] VSCA 51; 183 A Crim R 15
- The Queen v Bernstein [2008] VSC 254
- The Queen v Slattery [2008] VSC 81
- Carroll v The Queen [2009] HCA 13
- R v Host [2015] WASCA 23
- Regina v Boland NSWCCA, unrep, 13 October 1998