EMILY JANE WALKER v THE KING [2023] SASCA 79

On Appeal from DISTRICT COURT OF SOUTH AUSTRALIA (HER HONOUR JUDGE TRACEY) DCCRM-21-506 Appellant: EMILY JANE WALKER Counsel: MR B ARMSTRONG - Solicitor: CALDICOTT AND ISAACS Respondent: THE KING Counsel: MR W SCOBIE - Solicitor: DIRECTOR OF PUBLIC PROSECUTIONS (SA) Hearing Date/s: 13/06/2023 File No/s: SCCRM-22-10142 A SUPREME COURT OF SOUTH AUSTRALIA (Court of Appeal: Criminal) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment 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 in which it was generated. WALKER v THE KING [2023] SASCA 79 Judgment of the Court of Appeal (The Honourable Justice Lovell, the Honourable Justice Doyle and the Honourable Justice David) 27 July 2023 CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - OTHER FRAUDS AND IMPOSITIONS - FRAUDULENTLY OR DECEPTIVELY OBTAINING MONEY, VALUABLE, FINANCIAL BENEFIT OR ADVANTAGE - SENTENCE The appellant and her partner, Mr Lees, pleaded guilty to a series of offences arising out of a sophisticated and large-scale computer hacking scheme. The respondent concedes that the sentencing Judge had regard to the incorrect maximum penalty for Counts 12, 14, 16 and 17. Given the outcome in Lees v The Queen [2022] SASCA 93, the appellant submits that on the separate and independent exercise of the sentencing discretion by this Court, a lower starting point for Counts 12, 14, 16 and 17 and Counts 3 to 9 should be adopted. Held, per the Court, allowing the appeal on Ground 1, setting aside the sentence and re-sentencing the appellant to three years, two months and 15 days' imprisonment with a non-parole period of one year and nine months: 1. The sentencing Judge had regard to the incorrect maximum penalty in relation to Counts 12, 14, 16 and 17. We would allow the appeal on this Ground, set aside the sentence and re- sentence the appellant. -- 1 of 10 -- 2. In relation to Counts 12, 14, 16 and 17, we would commence with a starting point of two years' imprisonment. 3. In relation to Counts 3 to 9, we would commence with a starting point of two years and nine months' imprisonment. Criminal Law Consolidation Act 1935 (SA) ss 86E(1), 86F(1), 86I, 144D, 140(4), referred to. Lees v The Queen [2022] SASCA 93, applied. Kroni v The Queen [2021] SASCFC 15, considered. -- 2 of 10 -- WALKER v THE KING [2023] SASCA 79 Court of Appeal – Criminal: Lovell, Doyle and David JJA 1 THE COURT: The appellant and her partner, Mr Lees, pleaded guilty to a series of offences arising out of a sophisticated and large-scale computer hacking scheme. Through the scheme, the appellant and Mr Lees fraudulently diverted approximately $1.15 million from the funds of at least 23 organisations. 2 The appellant pleaded guilty to a lesser number of offences (13 offences) than Mr Lees (21 offences). She was sentenced to four years, 10 months and 27 days imprisonment with a non-parole period of two years and 10 months. 3 The respondent concedes, as it did in relation to the successful sentence appeal of Mr Lees, that the sentencing Judge had regard to the incorrect maximum penalty for Counts 12, 14, 16 and 17. The approach by this Court in Lees v The Queen (Lees),1 was to set aside the sentence and resentence the appellant; we would adopt the same course. Background 4 The appellant and Mr Lees possessed customised computer software which, when deployed, would cause the automated banking transfers of organisations to be diverted to fraudulent accounts. The fraudulent accounts, created through the use of stolen identification documents, were established and controlled by the appellant and Mr Lees. 5 The circumstances of the offending have been set out in detail by this Court in Lees. Although each of the offences to which the appellant pleaded guilty was an offence to which Mr Lees also pleaded guilty, Mr Lees entered guilty pleas to a further eight offences than the appellant. It is necessary to set out the offences relevant to the appellant. Count 1: possession of computer virus with intent to commit serious computer offence2 6 The appellant and Mr Lees were in possession of specialised computer software which searched the payroll systems of organisations to locate payroll instructions. The software was able to remove the legitimate banking details of payees and replace them with the bank details of bank accounts created by the appellant and Mr Lees. 1 [2022] SASCA 93. 2 Criminal Law Consolidation Act 1935 (SA) s 86I. -- 3 of 10 -- [2023] SASCA 79 The Court 2 Count 2: possess prohibited material3 7 The appellant and Mr Lees possessed the personal details of thousands of individuals. They used the personal details to establish fraudulent bank accounts online with various banking institutions. Counts 3 to 9: dishonest dealings with documents4 8 The appellant and Mr Lees created false applications for bank accounts at various financial institutions and in various names.5 Counts 12, 14, 16 and 17: use a computer to commit or facilitate the commission of an offence outside the State6 9 The appellant and Mr Lees used a computer to cause unauthorised access and modification to the data (bank details) of third parties with the intention of committing theft. In brief, the circumstances of each Count were as follows:7 • On 3 April 2019, the appellant and Mr Lees accessed the payroll and creditor payments system of Integrity Fruit Pty Ltd, located in Victoria, and redirected payments into an account established and controlled by the appellant and Mr Lees. The company’s bank was able to recover $21,977.51 (Count 12). • On 4 July 2019, the appellant and Mr Lees gained unauthorised access into the payroll system of Kempster Commercial Refrigeration Pty Ltd, located in Queensland. They diverted $23,318.53 into an account established and controlled by them (Count 14). • On 5 November 2019, the appellant and Mr Lees fraudulently accessed the accounting software system of Atlas Event and Party Hire, located in South Australia, and modified the bank details for the payroll. On 8 November 2018, of the company’s payroll of $28,421.33, the appellant and Mr Lees diverted $20,996.96 into an account established and controlled by them. The company’s bank recovered $2,447.96 (Count 16).8 • In November 2019, Marhop Pty Ltd, located in New South Wales, suffered a number of intrusions into its computer systems. On 27 November 2019, of the company’s payroll of $38,599, approximately $37,571 was diverted 3 Criminal Law Consolidation Act 1935 (SA) s 144D. 4 Criminal Law Consolidation Act 1935 (SA) s 140(4). 5 Mr Lees entered pleas of guilty to two further offences contrary to s 140(4) of the Criminal Law Consolidation Act 1935 (SA) (Counts 20 and 21 on the Information), in addition to Counts 3 to 9. 6 Criminal Law Consolidation Act 1935 (SA) s 86F(1) (Counts 12, 14 and 17). Count 16 is an offence contrary to s 86E(1) of the Criminal Law Consolidation Act 1935 (SA) as the offending occurred within South Australia. 7 Mr Lees entered pleas of guilty to six further counts contrary to s 86F(1) of the Criminal Law Consolidation Act 1935 (SA) (Counts 10, 11, 13, 15, 18 and 19), in addition to Counts 12, 14, 16 and 17. 8 Criminal Law Consolidation Act 1935 (SA) s 86E(1). -- 4 of 10 -- [2023] SASCA 79 The Court 3 into accounts established and controlled by the appellant and Mr Lees. The company’s bank recovered about $27,522 of the stolen money (Count 17). Personal circumstances 10 The appellant was 29 years of age at the time of sentence. She moved to Australia at the age of 14 with her family and found school difficult. She left home at age 16, at which time her then partner introduced her to methamphetamine. The relationship was marred by domestic violence and drug use. 11 The appellant commenced a relationship with Mr Lees in about 2017. Both the appellant and Mr Lees were heavy users of methamphetamine and GHB. The drug use progressively escalated from the start of their relationship to about February 2020. 12 In his psychological report, Mr Richard Balfour observed that with the assistance of a supervised, structured rehabilitation program, the appellant’s prognosis to cease offending was “fair to good”. Mr Balfour considered that the “psychological problems that have contributed to [the appellant’s] current offending behaviour would respond to strict community supervision and assertive case management”. 13 The appellant completed 900 hours of unpaid voluntary community work prior to her remand in custody. She has since engaged in the OARS Smart programme and the report indicates that she has successfully completed all counselling sessions and made “considerable progress” toward her abstinence and future relapse prevention. 14 The appellant is an Australian resident but not an Australian citizen. She is at risk of deportation to the United Kingdom if her visa is cancelled. Deportation would likely result in hardship given the age that the appellant came to Australia and that the majority of her family lives in Australia. The sentence imposed 15 In her remarks, the sentencing Judge observed: Imprisonment is the only appropriate sentence for both of you given the gravity of your offending which was sustained over approximately 18 months, was not isolated and was systematic. In my view, each of the counts with which you have been charged are serious examples of that type of offence. While you are not to be sentenced for offending for which you have not pleaded guilty, it is apparent that were it not for the significant efforts by South Australian police, your offending may well have been ongoing, with greater losses to innocent victims. 16 As to the appellant’s role in the offending, the sentencing Judge remarked: With respect to you, Ms Walker, while your involvement was integral to the operation, allowing the operation to run as successfully as it did, you had less involvement, consistent with the number of offences to which you have pleaded, and you received less benefit. -- 5 of 10 -- [2023] SASCA 79 The Court 4 17 The sentencing Judge imposed a notional starting point for each group of offending before reducing the sentences on account of the applicable plea discounts. Her Honour made the sentence for Count 1 concurrent with Counts 12, 14, 16 and 17 and the sentence for Count 2 concurrent with the sentence for Counts 3 to 9. Her Honour’s approach may be tabulated as follows: Count Starting point Plea Sentence Concurrency 1 One year and eight months. 15% One year and five months. Concurrent with Counts 12, 14, 16 and 17. 2 Two years. 10% One year, nine months and 19 days. Concurrent with Counts 3 to 9. 3–9 Three years and nine months. 15% Three years, two months and eight days. 12, 14, 16, 17 Three years. 15% Two years, six months and 19 days. 18 After the application of concurrency, the head sentence was five years, eight months and 27 days. The sentencing Judge reduced the head sentence by 10 months on account of the appellant’s time served in custody and on home detention bail. The final head sentence was four years, 10 months and 27 days imprisonment with a non-parole period of two years and 10 months. 19 While the sentencing Judge considered there to be “a number of positive factors” which supported the submission that the sentence should be suspended or served by way of home detention, given the “very real importance of general deterrence”, the seriousness of the offending and the role played by the appellant, her Honour declined to suspend the sentence or order that it be served by way of home detention. Grounds of Appeal 20 The appellant appeals against the sentence imposed on the grounds that the sentencing Judge erred by applying the wrong maximum penalty to counts 12, 14, 16 and 17 (Ground 1) and that the sentence, insofar as it concerned Counts 3 to 9, was manifestly excessive (Ground 2). 21 The parties accept that should the Court allow the appeal on Ground 1 and proceed with resentencing, it is not necessary to determine the question of manifest excess for the purposes of Ground 2. Rather, the appellant submitted that on the re-exercise of the sentencing discretion, the Court should consider imposing a lower starting point for Counts 3 to 9. -- 6 of 10 -- [2023] SASCA 79 The Court 5 Lees v The King 22 As mentioned above, this appeal follows the successful sentence appeal in relation to the appellant’s co-accused, Mr Lees. Each of the offences to which the appellant pleaded guilty was an offence to which Mr Lees also pleaded guilty. 23 In Lees, this Court found that, in relation to Counts 10 to 19 as charged against Mr Lees, the starting point of five years imprisonment for this group of offences could not stand in light of the true maximum penalty for those offences. In relation to Counts 3 to 9, the severity of the starting point of four years, when viewed together with the starting point for Counts 10 to 19, contributed to the conclusion that resentencing was required. 24 The Court allowed the appeal and resentenced Mr Lees. In relation to Counts 3 to 9 and 10 to 19 the Court proceeded with s 26(1) of the Sentencing Act 2017 (SA) but indicated the starting points that would have been imposed for each offence. The Court observed:9 In relation to Counts 3 through to 9, we indicate that in respect of each offence, we would impose a sentence of 12 months’ imprisonment. In one sense, each involved a separate incursion into criminality. However, each also involved similar conduct with a similar motivation. In another sense, all were part of a broader scheme. In any event, because of the substantial overlap in the capacity of the sentence for each count to achieve the objectives of the sentencing exercise, a significant measure of concurrency is warranted. Proceeding pursuant to s 26(1) for this group of offences, we start at three years, reduced to two years, six months and 18 days. In relation to Counts 10 through to 19, we indicate that in respect of each count, we would have imposed a sentence of three years’ imprisonment. Proceeding pursuant to s 26(1), we start at four years’ imprisonment for these 10 offences, reduced to three years, four months and 24 days. (emphasis added) Contentions 25 As was the case in Lees, there is no dispute that the sentencing Judge erroneously identified the maximum penalty for Counts 12, 14, 16 and 17 as imprisonment for 10 years. Counsel had advised the judge of the incorrect maximum penalty. The correct maximum penalty for each Count is six years and eight months.10 26 In the circumstances, and given the approach adopted in Lees, the respondent conceded Ground 1 and submitted that it is appropriate for this Court to set aside the sentence and re-exercise the sentencing discretion. We would allow Ground 1. 9 Lees v The Queen [2022] SASCA 93 at [73]–[74]. 10 See Lees v The Queen [2022] SASCA 93 at [36]–[7]; for the purposes of ss 86F(1) and 86E(1) of the Criminal Law Consolidation Act 1935 (SA), the maximum penalty for attempted theft is, by operation of s 270A(3)(C) of the CLCA, two-thirds of the 10-year maximum for the completed offence, namely six years and eight months. -- 7 of 10 -- [2023] SASCA 79 The Court 6 27 In addition to the starting point for Counts 12, 14, 16 and 17, the appellant submitted that the starting point for Counts 3 and 9 also could not stand in light of the outcome in Lees. The appellant pointed to the disparity in sentences between the starting point imposed by the Court of Appeal for Counts 3 to 9 in relation to Mr Lees (three years), and that imposed by the sentencing Judge on the appellant (three years and nine months). Indeed, even after reductions, the final sentence imposed on the appellant for Counts 3 to 9 (three years, two months and eight days) was two months and eight days in excess of the three-year starting point arrived at by the Court of Appeal in relation to Mr Lees for the same counts. The two month and eight-day difference was, in the appellant’s submission, a sufficient indicator of manifest excess. The appellant submitted that this Court, given the outcome in Lees, should reconsider and reduce the sentences imposed on Counts 3 to 9 in relation to the appellant. 28 While the appellant made no specific complaint regarding the sentences imposed for Counts 1 and 2, it was submitted that this Court should, in relation to all counts, have regard to the lesser role played by the appellant when compared to Mr Lees, as well as her personal circumstances, which demonstrated her likely and realistic prospects of rehabilitation. 29 The respondent accepted the likelihood of this Court concluding that the sentence imposed for Counts 12, 14, 16 and 17 was too high and that on re- sentencing, a reduction is appropriate. The concession did not go so far as to accept that the sentence imposed for Counts 3 to 9 was also too high. The respondent contended that a consideration of the nature and objective seriousness of the appellant’s offending, as well as the impact of her offending on the numerous victims and the community, required a condign sentence of imprisonment and militated against any order of suspension or home detention. The respondent emphasised that in relation to Counts 12, 14, 16 and 17, each count was laid in respect of a different victim, and each with a maximum penalty of six years and eight months. Resentence 30 We have had regard to the appellant’s personal circumstances as discussed above. The appellant is currently 31 years of age. She completed 900 hours of voluntary community service prior to being taken into custody and has made considerable progress toward her rehabilitation and future relapse prevention. 31 There is a risk that the appellant will be deported to the United Kingdom. As observed by the sentencing Judge, deportation would likely result in hardship given the appellant’s lack of family ties to the United Kingdom and the early age at which she moved to Australia. While we accept that these considerations are to some degree relevant, given they are dependent upon the future exercise of the Minister’s discretion, they cannot materially affect the sentence to be imposed.11 11 Kroni v The Queen [2021] SASCFC 15 at [227]–[230]. -- 8 of 10 -- [2023] SASCA 79 The Court 7 32 The appellant’s offending was serious and sophisticated. 33 The maximum penalty for offences of possession of a computer virus with intent to commit an offence (Count 1) and possession of prohibited material (Count 2) is three years’ imprisonment. The programme the subject of Count 1 was used to divert automated banking transfers set up by organisations to fraudulent accounts established and controlled by the appellant and Mr Lees. The accounts had been established using stolen identification documents. The offending the subject of Count 2 related to the appellant and Mr Lees’ possession of thousands of personal details of real individuals which had been illegally obtained. 34 Counts 3 to 9 related to the appellant and Mr Lees’ false applications for accounts at various financial institutions and created in various names. The individuals whose identities were used to establish the fraudulent bank accounts were unaware of the fraudulent activity. The entire context of the offending allows an inference that the nature of the intended benefit lay in the securing of an effectively anonymised, and therefore more protected, receptable for funds the appellant and Mr Lees intended to obtain dishonestly in the future.12 These offences were part of a broad, dishonest scheme of offending. The maximum penalty for each count is imprisonment for 10 years. 35 The offending the subject of Counts 12, 14, 16 and 17 concerned the intrusions into bank accounts. The offending was complex and premeditated. At least 23 organisations were targeted. The full scale of the monetary loss and benefit was unable to be quantified, albeit an approximate $1.15 million was initially diverted from the various organisations. Some transactions were successful, and the monies never recovered. The maximum penalty for each count is six years and eight months’ imprisonment. 36 While we accept that the appellant played a lesser role in the offending than Mr Lees, for the reasons expressed by the sentencing Judge, she was nevertheless significantly involved in the criminal enterprise. 37 We have had regard to the victim impact statements tendered before the sentencing Judge. Aside from the financial losses suffered by the victims, the victims described the devastating effect the offending has had on their businesses, financial security, health and employees. Some have experienced significant embarrassment and their reputation has been damaged. As the respondent submitted, this type of technological facility with which identities can be illegally obtained and fraudulently utilised poses a significant risk of damage that can be done not just to the individual victims but across the entire community. Businesses and individuals now have to take extra measures at considerable cost to thwart this type of crime. General deterrence is a significant consideration. 12 Lees v The Queen [2022] SASCA 93 at [63]. -- 9 of 10 -- [2023] SASCA 79 The Court 8 38 In relation to Count 1, we would commence with a starting point of one year and eight months, reduced on account of the appellant’s plea to one year and five months’ imprisonment. 39 In relation to Count 2, we would commence with a starting point of two years, reduced on account of the appellant’s plea to one year, nine months and 19 days’ imprisonment. 40 In relation to Counts 3 to 9, we recognise the lesser role played by the appellant in this offending as compared to Mr Lees. We indicate that in respect of each offence, we would impose a sentence of 10 months’ imprisonment. Given the substantial overlap in the capacity of the sentence for each count to achieve the objectives of the sentencing exercise, a significant measure of concurrency is warranted. Proceeding pursuant to s 26(1) of the Sentencing Act for this group of offences, we would start at two years and nine months, reduced on account of the appellant’s plea of guilty to two years, four months and two days’ imprisonment. 41 In relation to Counts 12, 14, 16 and 17, we would again recognise the lesser role played by the appellant in respect of these offences. In respect of each count, we would have imposed a sentence of one year and six months. Proceeding pursuant to s 26(1), we would start at two years’ imprisonment for the four offences, reduced to one year, eight months and 13 days on account of the appellant’s plea. 42 For the reasons expressed by the sentencing Judge and this Court in Lees, we consider it appropriate to make the sentences for Count 1 concurrent with the sentence for Counts 12, 14, 16 and 17. We consider it appropriate to make the sentence for Count 2 concurrent with that imposed for Counts 3 to 9. 43 We would reduce the head sentence of four years and 15 days by 10 months on account of the appellant’s time spent in custody and on home detention. The resulting head sentence is three years, two months and 15 days’ imprisonment. 44 Having regard to the appellant’s lack of offending history, expressed remorse and prospects of rehabilitation, we would fix a non-parole period of one year and nine months. 45 There are no proper grounds for the sentence to be suspended or served by way of home detention. Both the head sentence and non-parole periods are to commence from when the appellant was taken into custody on 10 February 2022. Orders 46 We would allow the appeal on Ground 1. The sentence is set aside and the appellant resentenced to three years, two months and 15 days’ imprisonment with a non-parole period of one year and nine months. -- 10 of 10 --