Citation: R v McInnes [2022] NSWDC 723
Court: District Court of New South Wales
Date: 5 December 2022
Judge: Colefax SC DCJ
Background
The offender was a senior employee of Rheem Australia, holding the position of National Sales Manager or General Manager, Sales. Over an eleven-year period from August 2007 to October 2018, he submitted 53 false invoices for services never provided, dishonestly obtaining just over $2 million from his employer. The scheme went undetected for so long because of the high degree of trust placed in him and his seniority within the organisation.
The misappropriated funds were used to finance an affluent lifestyle, including home renovations and mortgage repayments, deposits on two Queensland investment properties, a luxury boat, and a holiday home. Shortly before he was made redundant in late December 2018, he transferred over $400,000 to a bank account controlled solely by his then wife. He was arrested in September 2021.
The offender appeared for sentencing on two principal charges of dishonestly obtaining a financial advantage by deception, each under section 192E(1)(b) of the Crimes Act 1900 (NSW). A third related matter, involving obtaining money by deception under section 178B(1), was taken into account on a Form 1 alongside the first principal offence.
Legal Issues
- The appropriate objective seriousness of each principal offence and how it compared to the mid-range for offences of that kind
- The weight to be given to aggravating factors, including breach of trust and sophistication of the scheme
- Whether the offender had demonstrated genuine remorse, and how that bore on rehabilitation prospects
- Whether special circumstances existed to justify reducing the non-parole period below the standard 75% of the head sentence
- The applicable sentencing discount for an early guilty plea
Decision
Colefax SC DCJ assessed each principal offence as above the mid-range for its kind. Both were further aggravated by the serious breach of trust involved in stealing from an employer and by the sophistication of the fraudulent scheme. The Form 1 matter, involving a further $413,957.50, was taken into account in a way the judge noted would produce a meaningful increase in the sentence for the relevant principal offence.
The court rejected the suggestion that the offender had genuinely repaid what he stole. Rheem was forced to commence proceedings in the Equity Division of the Supreme Court, the matter proceeded to a contested hearing, costs disputes followed, and by the time of sentencing Rheem had not received even 50% of what it was owed, including its legal costs. The court drew a clear distinction between voluntary reparation and repayment extracted through litigation.
The court found the offender was not genuinely remorseful. His statements to the author of the sentencing assessment report were weighed against his conduct in the Supreme Court proceedings, and his primary stated regret was for the impact on his family rather than for the harm caused to his employer. His rehabilitation prospects were assessed as guarded, particularly given a prior 1993 conviction and custodial sentence for dishonesty offences against another employer (the State Rail Authority).
A 25% discount was applied to the indicative sentences for the early guilty plea. Special circumstances were found, justifying a non-parole period below the standard 75%, on four grounds: the hardship of imprisonment given the condition of the offender's aged mother, a medically confirmed heart condition (though one treatable in custody), his age, and the extended period since his last time in custody.
Orders Made
- Aggregate sentence of imprisonment of seven years, commencing 5 December 2022
- Non-parole period of four years, expiring 4 December 2026
- Balance of term of three years, expiring 4 December 2029
- Indicative sentence for sequence 2 (including Form 1 matter): five years, three months
- Indicative sentence for sequence 3: four years, six months
Key Takeaways
- The District Court placed each offence above the mid-range of objective seriousness, treating the breach of an employer's trust and the sophistication of a long-running false invoice scheme as significant aggravating features.
- Repayment secured only through contested civil litigation does not constitute voluntary reparation, and the court gave it no mitigating weight; the gap between what was owed and what had actually been recovered at the time of sentencing further reinforced that conclusion.
- Claimed remorse was scrutinised against the offender's actual conduct in related civil proceedings, demonstrating that courts may look beyond statements of contrition when assessing whether remorse is genuine.
- A prior conviction for dishonesty against an employer, even one dating back almost thirty years, remained relevant to both specific deterrence and the assessment of rehabilitation prospects.
- Under section 192E(1)(b) of the Crimes Act 1900 (NSW), the maximum penalty is ten years' imprisonment and there is no standard non-parole period, leaving the sentencing court with considerable discretion in calibrating the sentence to the facts.
Legislation and Cases Referenced
Legislation:
- Crimes Act 1900 (NSW), s 192E(1)(b) (dishonestly obtaining a financial advantage by deception)
- Crimes Act 1900 (NSW), s 178B(1) (obtaining money by deception)
Cases:
No cases were cited in the provided judgment text.