D’MONTE J A L

STATE OF TASMANIA v JASON AARON LEE D’MONTE 9 APRIL 2020

COMMENTS ON PASSING SENTENCE PORTER AJ

Mr D’Monte, the defendant, has pleaded guilty to six counts of fraud as a clerk or servant and one count of stealing. These crimes were committed over about a five year period from 1 July 2009 to the end of October 2014. From 2001 the defendant was employed as the secretary/financial controller of the Ulverstone Returned Services Club Inc and after 1 July 2004, carried out the role without assistance. He has tertiary qualifications in commerce and accounting and was a member of the National Institute of Accountants. He was responsible for the day to day financial management of the Club, including reporting the Club’s financial position to the committee. He was also responsible for managing the cash streams from bar sales, TOTE, Keno and electronic gaming machines, and banking the takings from those sources. At the end of each financial year he had to prepare the annual financial statements and provide them to the Club’s auditor for assessment and review. Once audited, he had to include the auditor’s report with the annual financial statements and present all information to the committee at annual general meetings. At the 2014 AGM held in September, when the defendant was presenting the annual financial statements, a member of the Club raised concerns about discrepancies that he had found. It was noted that the financial statements were not accompanied by an auditor’s report. The defendant was not able to explain the discrepancies but undertook to clarify and rectify them. The AGM was suspended indefinitely. The Club president and treasurer met with the auditor. Among other things, it was discovered that the audit reports presented to the AGMs for the financial years 2011, 2012, and 2013 purporting to have been done by an auditor, Mr Smith, had not been completed by Mr Smith as he died in August 2010. After further enquiries and getting advice, the Club reported the matter to police. On 13 October 2014 the committee held a special meeting for the purpose of having the defendant explain identified discrepancies in the financial records. The defendant said he was still working on it. On 23 October 2014 the committee determined the defendant would be suspended on full pay, that decision being notified to him on the following day; 24 October 2014. On that day police went to the Club, spoke to the defendant, and took him to the Devonport Police Station where he was interviewed.

The facts relating to count 1 are that between 25 September 2014 and 24 October 2014, the defendant destroyed a large number of business and accounting records of the Club, with the intention of preventing the Club’s committee from being able to accurately substantiate the amount of money that had been stolen by him. In that period, the defendant had been seen on two occasions dumping a shopping trolley full of lever arch binders into a skip at the rear of the Club. In addition, when police went to the Club on 24 October 2014, they discovered there were no banking records for the financial year ended 2014. This included daily banking reconciliations and supply invoices. It was also discovered that electronic accounting records for all periods before July 2013 had been deleted. Counts 2 to 6 inclusive primarily involve falsification of net profit figures. In each of the financial years ended 2010 to 2014 inclusive, the defendant falsified the entry of net profit in the “Statement of Financial Position”, with the intention of preventing the Club’s committee from knowing the Club’s true financial position. He overstated the net profit in each of those five years in order to conceal his theft of cash. The overstated net profit figures ranged between $30,000 and $50,000, mostly at each end of that range, and the audits conducted showed that the accused overstated profits for the five year period by a total amount of $148,730. For each annual report, the defendant attached an unsigned one page document containing a purported auditor’s opinion for the falsified financial statements. Further, relevant to counts 5 and 6, the defendant was a signatory to an investment account of $50,000 held with Tasmanian Perpetual Trustees Ltd. The money was not to be used without prior authorisation of the Club’s committee. On six separate occasions between March 2013 and March 2014, the defendant transferred amounts from the investment account into the Club’s business account. The committee did not give permission for this to occur. The total amount was $162,204.15. At the AGMs in September 2013 and 2014, the defendant presented the financial statements. He represented that the Club had significant funds available in the Tas Perpetual Trustees investment account, on each occasion falsifying the information by failing to disclose the amounts that he had transferred in the relevant periods. The defendant falsified these figures with the intention to prevent the Club’s committee from knowing that the investment monies had been withdrawn. The Crown suggests that the transfer of the funds was to prop up the Club’s business bank account, so that ongoing debtors could be paid, and, more relevantly, to conceal the defendant’s thefts of cash from the Club. The Club’s committee did not become aware of the fact that there was no money in the Tas Perpetual Trustees account, until they spoke with the auditor in early October 2014.

Count 7 alleged the theft of $247,710.87. This figure was established by a forensic accounting process focussing on the four income streams. Two separate reviews were completed. The amount in the Club’s business account dwindled as a result of the amounts stolen by the defendant, and there were limited funds available to pay ongoing liabilities. As a result, between 2010 and August 2014 the defendant used his own funds to pay some of the Club’s expenses without informing the committee. Once there was sufficient money in the Club’s business account, the defendant drew a cheque on that account, reimbursing himself for the amounts he had paid on behalf of the Club. The total was $178,788.51. The defendant did this without the Club’s authorisation or knowledge. This is not the subject of a charge but provides context in relation to the defendant’s conduct. The defendant disputed the amount stolen as alleged in the count. I heard evidence from a large number of witnesses. The defendant accepted that he stole $122,106. The Crown bore the onus of proving the difference of $125,604.87. For the reasons that I published to the parties on 8 April and which will be attached to the written comments when published, I am satisfied that the defendant should be sentenced on the basis he stole approximately $170,000.

Lastly, as to the facts, I should refer to the defendant’s interview with police. In that interview, he said he was solely responsible for the day to day running of the Club, including the finances and the banking. He said he had got behind in the financial reporting workload and had not been entering all the transactions as he should have. He admitted stealing $2,000 on two occasions and smaller amounts of $50 or so. As to the TPT account, he admitted responsibility for transferring the funds. He agreed that he had overstated profits to make himself look better. He admitted falsifying the figures in the annual financial statement but said it was not in order to disguise his theft, claiming it was only due to his financial mismanagement. He claimed that the staff of the Club were taking money from the bank bag before the money was banked as the safe was unlocked, but said that he had not reported this to the committee. That last assertion was not persisted in during the disputed facts hearing. In November 2015 after a forensic accounting investigation was completed, the defendant was arrested. He was given an opportunity to participate in a further interview but declined. He was charged and bailed, and before being remanded in custody by me on 20 March 2020, he has spent no time in custody on the matter. After the defendant’s employment was terminated, the Club sought assistance to assess its financial situation. It was found to be quite dire and it was initially thought that it would have to close. Debts were discovered in the region of $100,000 which included superannuation and tax liabilities owed to the Australian Taxation Office. The RSL eventually lent the Club some money and, combined with significant contributions from 10 Club members, the Club was able to pay its liabilities and to continue to trade. Police obtained records from gambling organisations which revealed that the defendant engaged in a significant amount of gambling during the relevant period. Between June 2011 and October 2013, he was a member of a syndicate which owned three racehorses. From June 2014 that was extended to a small percentage share in another horse. The Club has recouped $111,355.19 by virtue of its insurance policy. The conduct represented in the counts is of course to be viewed in a very serious light given the defendant’s position, the length of tine involved, the scale of offending and its actual and potential consequences.

The defendant is now 53, a married man with two teenage children aged 17 and 14. He has a number of traffic offences against his name, but no prior convictions of any significance. Recently he has been employed on a casual but full-time basis on a farm and in receipt of a modest income. A letter from his employer speaks highly of him. In about August 2010 the defendant’s wife became suddenly and seriously unwell with a brain tumour. He took some time off work but I am told, that when he returned “things fell apart” from there. He was not able to cope with his role and was not prepared to reach out. That, in part, led him to embarking on a course of conduct of taking money and falsifying records so that the Club would think he was capable of carrying out the job which, it is said, clearly he was not. It is submitted that there was no significant gambling problem, but the money taken was spent on day to day expenses. It seems then to have simply been frittered away. I am told that the defendant initially felt a feeling of relief when his wrongdoing was discovered. That quickly turned to despair and then suicidal ideation. He consulted a general practitioner and was referred to counselling. I have a report from the counsellor, Mr Waddington. The defendant initially reported frequent panic attacks, high levels of anxiety and paranoia, nightmares, dissociation, anhedonia and worthlessness. Suicidal ideation remains a significant concern. He was commenced on anti-depressant medication by his GP and continued to undertake extensive psychotherapy. Mr Waddington notes the defendant often isolated himself from the other workers on the farm due to anxiety and hypervigilance. There is a level of emotional distress produced through continual rumination of self-imposed shame and remorse. Mr Waddington says that the defendant has displayed a deep level of remorse and shame for his actions and failures. He said the defendant meets the criteria for chronic adjustment disorder with anxiety and depression, displaying symptoms of low self-esteem and social phobia, among others. As to the question of remorse, counsel referred to the police interview in October 2014 in which the defendant, when asked whether he was certain he had revealed everything about his misconduct, expressed concern that he had let people down; that they were too good for him. In the context of the whole of the interview that was in evidence, I am not satisfied that that is a true expression of remorse as to the extent of his criminal conduct. I have already noted that he was not completely forthcoming about what he had done, often referring to his carelessness and lack of attention as being the cause of apparent problems. When established, remorse is relevant to specific deterrence and prospects of rehabilitation. I am prepared to accept the defendant now has genuine regret and an acceptance of his wrongdoing, but the factors to which that relates do not have a great deal of prominence in this case in any event. Of significance in this context is that the defendant has made restitution to the Club of the sum of approximately $111,350. I am also told that there is not likely to be any difficulty in seeking a compensation order in favour of the Club. Restitution does not diminish criminal culpability but is an important factor: see Williams v Tasmania [2000] TACCA 2 at [11]-[13]. I take into account the guilty pleas. Although a hearing was necessary to resolve the dispute on count 7, there remains some practical value to the pleas, and they can be taken as a willingness to facilitate the course of justice. Fraud trials before juries are often long and complex. I turn to the question of delay between being charged and the resolution of the matter. There is a period of delay in having the matter resolved which is not attributable to the defendant in any relevant way, nor, it seems, to the prosecution I should say. He was first charged on complaint in November 2015 with one count of stealing to the extent of in excess of $400,000. That period might be ascribed to the lack of candour in the interview but in any event that complaint was first listed in March 2016. A second complaint containing charges more akin to those contained in the indictment was then filed. On that complaint he first appeared in August 2016. Discussions were then had in relation to obtaining documentation and with a view to resolving the matter. In November 2016 he was committed to appear in this Court on 14 March 2017. The matter remained unresolved and the defendant’s advisors made a number of continuing requests for documentation with delays being encountered, particularly on the part of the Australian Taxation Office. The first report relating to the dispute about the amount stolen was prepared on behalf of the defendant in January 2019. In mid-2019 pleas of guilty were indicated and the defendant advised that he would not seek bail. The Crown advised that no time was available in the rest of that year and the matter was adjourned until this. The considerable period before resolution no doubt contributed to the defendant’s stress and anxiety. During the period, the defendant has not been convicted of any further offence, and he has engaged in employment. For those reasons the additional time that has been taken beyond what ordinarily might occur should be taken as mitigatory. Next, I also take into account that the defendant’s mental health issues will make imprisonment a little harder for him to bear. I have also been asked to take into account the additional burden of being imprisoned during the present COVID-19 emergency. No personal visits are allowed, although phone contact is. I think it is appropriate to take that into account. The defendant’s counsel raised with me the possibility of home detention, but I do not think that is an appropriate sanction in all of the circumstances.

Mr D’Monte, this was a sustained course of dishonesty and high level deception which included falsifying financial statements and the destruction of records to disguise your ongoing theft of money. As an employee, what you did amounted to a serious breach of trust. Being an employee in a management position, in my view the breach is made more serious. The committee and its members relied on your for the proper financial management of the Club. Your conduct over a little in excess of five years substantially contributed to a critical financial situation of your former employer and put its future and the interests of Club members and those of its employees at risk. Attempting to deter others who might be tempted to do the same sort of thing is the predominant factor in these types of cases. I have set out the matters which operate in your favour. They entitle you to some leniency, but in all of the circumstances a lengthy term of imprisonment remains appropriate. You are sentenced to two years and three months’ imprisonment to commence on 20 March 2020. Given your personal circumstances, it is appropriate that you be given the full benefit of parole, and I order that you not be eligible for parole until you have served one half of that sentence. I make a compensation order in favour of the Ulverstone RSL Inc for $68,745.81*.

*This was the amount sought by the Crown on 8 April 2020 and not disputed.

On 15 April 2020, on the application of the defendant and with the Crown’s consent, the amount was amended to $58,644.81.

ATTACHMENT

File No 419/2016

TASMANIA v JASON AARON LEE D’MONTE

REASONS FOR DETERMINATION PORTER AJ

9 April 2020

Count 7 on the indictment alleges the defendant stole the sum $247,710.87. The defendant disputes the amount. He accepts that he stole $122,106. The Crown’s figure is based on a comparison between all monies received as shown by records of various income streams, and the amount of money banked. These comparisons were done by Mr Ricky Anderson, an accountant and himself a Club member, and Mr David Palmer, an accountant. There was some disagreement about how to arrive at the figure of $247,710.87, but it is agreed to be the starting point. The defendant has identified a number of explanations for parts of the deficit, as well as areas where he says cash was used for legitimate or benign purposes, those uses also explaining parts of the deficit. The difference at stake is therefore $125,604.87. To resolve the dispute. I heard evidence from a number of witnesses including the defendant, who also called witnesses.
Of course, the Crown carries the burden of proof in relation to the amount in respect of which the defendant is to be sentenced. I need to be satisfied beyond reasonable doubt of the ultimate figure, although not to a precise extent. A downward adjustment to the Crown’s figure needs to be made if I consider a reasonable doubt exists about its validity; that is, I consider it reasonably possible that the amount was not stolen.
Among the witnesses from whom I heard was Mr Gregory Blashki, an expert forensic accountant, called by the defendant. His list of adjustments was used as the guide and is as follows:
Losses while the defendant was on leave.
Bar trading – till variances.
Gaming float variances.
Staff loans paid in cash.
Expenses paid in cash.
I will deal with each in turn. Before doing that I will make some general observations. For some of these items the question of whether I have a reasonable doubt rests to large extent on the defendant’s credibility. The figures are based entirely on information provided by him. The defendant also called Mr Rodney Cairnduff, an accountant who is also the defendant’s brother-in-law. Mr Cairnduff accepted the defendant on a client basis. The evidence of both Mr Blashki and Mr Cairnduff provides some support for the defendant in relation to some of the items. In relation to some items, the credibility and reliability of seven former employees called by the Crown is also an issue.
I have reservations about the defendant’s credibility. One matter relevant to this is that in his police interview on 24 October 2014, in which he only admitted to stealing “small amounts of money”, $2,000 on two occasions and smaller amounts of $50 or so. He agreed that he had overstated profits to make himself look better but did not agree to falsifying the figures in the annual financial statement in order to disguise his theft, claiming it was only due to his financial mismanagement. They were lies, and no reason for lying at that point other than to downplay his involvement has emerged.
He also suggested to police that other staff members were taking cash from the bank bags. In evidence, was asked whether, in light of this suggestion to police, he agreed he was not asking me to accept as a fact that other people were stealing money. He replied in the affirmative. In any event, I thought the defendant to be an unconvincing witness at times due to being non-responsive and evasive.
I found Mr Blashki to be an impressive independent witness. I also accept Mr Cairnduff as an honest witness when giving evidence about the things of which he had direct personal knowledge. Otherwise of course, he was relying on what the defendant had told him. I have no reason to doubt Mr Cairnduff’s integrity. I will deal with the other witnesses as and when I come to them.

Losses while on leave

The first item relates to periods when the defendant was on leave. It is a claimed set off in respect of amounts recorded as shortfalls as between documented takings and monies banked. The total amount is $11,853.70 as detailed in Appendix 8 to Mr Blashki’s report dated 28 February 2020 ( Ex D9). There are five periods involved. The Crown did not dispute that the defendant was on leave for the period specified. Put simply, the defendant’s argument is that for these periods, he could not have been responsible for shortfalls, as he was not there. The periods fall into two separate categories: those when the defendant was out of the State and those when he was on leave but at home.
Mr Blashki’s analysis deals with each separate period. For some leave periods there is a surplus at the end; for some a shortfall. The case was conducted by reference only to the specific leave periods where there was a shortfall. The analyses show the daily takings for each day, giving a credit for that amount, and then comparing the takings on the last day before banking occurred against the amount banked. This invariably resulted in a credit. It is the running totals in relation to each period that create the relevant figure. Additionally, all amounts, both surplus and deficit, do not involve whole dollars, but numbers of cents. However, I note the Crown’s allegation is that the defendant stole an amount specified beyond whole dollars, to 87 cents.
First, I need to deal with the question of who was responsible for the banking. Seven former employees were called to give evidence. Each said that they did not do the banking but that it was done by the defendant. There were two essentially full time employees, Mr Lee Gillard and Ms Alison Whitehead. Mr Gillard specifically said that when the defendant was on leave, no one did the banking; it was left until he returned. Plainly, that is not right. (I note that Mr Gillard had suffered from a brain tumour and he had some difficulties in speaking. I have no reason to doubt his honesty, but I approach the reliability of his evidence with a degree of caution.)
Ms Whitehead said that when the defendant was on leave, he would come in to do the banking; they did not do it. In cross-examination she said that during one long period of leave, it was possible a committee member did the banking, and she agreed that at least on two occasions when the defendant was overseas, he did not do the banking, someone else did. She agreed that during a leave period from 9 August 2010 to 6 September 2010, she completed the daily banking summaries on 11 and 12 August. In his evidence though, the defendant acknowledged he completed the banking summary for 10 August 2010.
In his police interview on 24 October 2014, the defendant said that over a two week holiday period, he would probably go back into work three to four times and that during leave periods he was always contactable. In cross-examination in these proceedings he said that generally he would go to the bank on Mondays and Fridays. He agreed that when he was on leave (and inferentially, still in the State) he would go in to do the pays on the Mondays but “didn’t specifically go back to do the banking“. He agreed that he what he told police was correct. When it was suggested to him that while he was there perhaps he looked in the safe, saw that banking was required and then did it, he gave a lengthy answer which was not directly responsive to the propositions. I felt at this point the defendant was being evasive.
The first period is from 21 February 2011 to 27 February 2011 inclusive. The amount of the claimed set off is $2,014.33. The defendant says he does not know where he was during the period, and there is no other evidence about this. The records show no banking was done in the period. The banking was done on 28 February 2011, the first day the defendant was back at work. For that reason and more broadly based on my assessment of the defendant’s credibility, I am satisfied beyond reasonable doubt that he was responsible for the shortfall.
The second period is from 28 December 2011 to 16 January 2012 inclusive. The amount of the claimed set off is $1,734.44. The defendant said he did not know where he was. There were four occasions of banking within the period of leave, and one on the day after. In the absence of any evidence that the defendant was out of the State, I proceed on the basis of the combined effect of the evidence of Mr Gillard and Ms Whitehead and my view of the defendant’s evidence. I am satisfied beyond reasonable doubt the defendant was responsible for the shortfall during this period.
The next period is from 2 April 2012 to 15 April 2012 inclusive. The amount is $4,098.96. There were two bankings in this period; one on Wednesday, 11 April, the second on Monday, 16 April, the defendant’s first day back. The defendant said he was in Fiji. Ms Whitehead agreed that for one period of leave that is where the defendant was. I am not satisfied that the defendant was taking leave at home. The amount which ought to have been banked on 16 April is only approximately $260 less than what was in fact banked. In the circumstances, the defendant should have the benefit of a reasonable doubt.
The next period is 25 May 2012 to 12 June 2012 inclusive. The amount is $3,064.86. The defendant does not know where he was. There were four bankings during the period and one on the day after his return. For the reasons I gave in relation to the first and second periods I am satisfied this amount should not be set off.
The last period is from 23 December 2013 to 13 January 2014 inclusive. The amount is $941.14. The defendant says he was in Thailand. Although Mr Cairnduff did not give evidence of the precise dates, he said that some of the leave periods outlined to him by the defendant he knew to be correct, as the defendant was with him. One of these was a family trip to Thailand. Accordingly, I am not satisfied beyond reasonable doubt that the defendant should be held responsible for the shortfall during this period.
In relation to this item as a whole, I am therefore not satisfied that the defendant should be held responsible for the amount of $5,040.10.

Bar trading – till variances/gaming float variances

These two items can be dealt with together. The quantum of the first item is $5,705; that of the second item is $13,411. These claims are based on analyses of the banking summaries provided to the defendant by the prosecution. They cover the relevant period: 1 July 2009 to the end of October 2014. The claim to set off the amounts is based on the fundamental premise that small variances between what ought to be on hand according to the records and what is actually there is a “natural feature” – to use Mr Blashki’s words – of business which operate using cash.
As to the till variances, the banking summaries on their face identify such variances. The defendant said that he did not have all of them. For those days where a summary did not exist, he left them out. Mr Cairnduff said that he checked that the defendant had accurately entered the data and that the arithmetic was correct. He said he was satisfied that the summaries of each year that the defendant had produced were completely correct. Mr Blashki was given the summaries prepared by the defendant and proceeded on those documents.
The same situation exists in relation to the item of gaming till variances except that the reports of recorded income from the various gambling agencies were also used. In respect of this item, Mr Blashki was given the defendant’s summaries but reformatted them for the purposes of his report. He relied on the information provided.
Mr Blashki has extensive expertise in valuing businesses and providing accounting reports, including reports for criminal investigations. His experience includes looking at businesses where there is said to be “a lot of cash in the business”. Mr Blashki’s opinion is that the total amount of in excess of $18,000 represents an average loss of approximately $9 per day for the relevant period, and from his experience with businesses involved with cash takings, that is not unusual. He said it was very common to see in business involved in cash, to have an expense item called “till variances”. He agreed that it could work either way – that is a surplus or a shortfall – but said he thought the quantum compared to the size of the business was within a reasonable tolerance. “If I was managing a business like I don’t believe that I would be overly concerned with a variance of that quantum.”
Mr Blashki rejected a suggestion made by the defendant and Mr Cairnduff that there should be a further reduction of recorded bar sales by 0.75% ,or $32,091, to allow for an overstatement due to cash register data input errors. He said he could not see a reason why there would be a biased error in ringing up the tills amounting to that amount, and he did not agree with it. The defendant does not now argue the point.
On the basis of Mr Cairnduff’s evidence, I accept that the summaries prepared by the defendant were accurate. I note that Mr Cairnduff agreed that there were no source figures for bar takings for the period 1 July 2013 to 12 December 2013. By source figures I mean a report from H & L Australia which provides a software program to record bar till entries. Mr Cairnduff said he could not understand why that was so, but he had looked at the banking summaries which had the till figures on them. The Crown did not address this issue in closing submissions. In any case, taking into account Mr Blashki’s evidence, I have a reasonable doubt about these amounts.
It follows that I am not satisfied beyond reasonable doubt that the amount of $19,116 should be attributed to the defendant’s criminal conduct.

Staff loans paid in cash

This item relates to the practice of the defendant of lending small cash amounts of Club money to staff members, and then deducting payments from their wages. The evidence generally establishes that the defendant paid the wages by direct bank transfer. The amount at stake over the period of five years and four months is $52,199. That amount is the total for the whole of the relevant period, and is the difference between the totals for net wages as shown in the BAS documents and the amounts shown as wages in the bank statements. The annual figures for the period 1 July 2009 to the end of October 2014 are set out in Mr Cairnduff’s report dated 21 January 2019 (D8) and in the Blashki report at par 2.2.10. Some employees who were called to give evidence agreed that they were lent money, with repayments being deducted from their wages.
Appendix 7 to Mr Blashki’s report is a table prepared by the defendant, primarily for part of the next item – cash payments to staff. In it, the defendant identifies 26 employees of the Club. Of those, 11 are said to have participated in the cash loan scheme. Neither in the table nor in his evidence did the defendant say to what extent the identified employees participated. Of the 7 witnesses who gave evidence, all but one – Mr Pearson – is in that 11. I should here point out that contained within Mr Cairnduff’s report is an earlier report done by Camerons Accountants which was a review of the Club’s superannuation liabilities. It is dated 6 October 2014. The Camerons report contains a list of 22 employees.
The defendant’s list of 26 in Appendix 7 does not contain all of the 22 identified in the Camerons report. Five of the 22 are not on the defendant’s list and are additional ones. I mention this because there seems to have been some delay by the Crown in attempting to locate former employees and have them give evidence. Constable Mark Johnson is the original investigating officer. He gave evidence that in January of this year he looked for 12 former employees, only two of whom he could not find. This hearing commenced on 17 March. Const Johnson gave evidence on 18 March that the day before he was making enquiries in relation to seven former employees, three of whom he said had been located and spoken. They were not called. I turn to the evidence of those who were.
Mr Gillard said he borrowed some money once when his car needed repairing. That was repaid by way of $50 out of his pay each week. Once it was paid off, the defendant, with his agreement, kept withholding $50 as a form of forced savings. It seems he would withdraw on that from time to time. He said the amounts were recorded in a book and when the new manager took over from the defendant, he was paid out what was owing.
Ms Rachel Lee is in the defendant’s table as a participant in the scheme. In evidence she said she was not aware of the loan system operating in the Club amongst staff, but on one occasion was given an advance on her pay of $200. She thought she still owed $80 of that amount. In cross-examination, she agreed that it had been repaid by deductions from her wages. She was sure that this had only happened once.
Ms Lindsey Ansell is also in the defendant’s table as a participant in the scheme. But in evidence she said that although she knew about the cash loan system operating among staff, she did not ever use it: “Not my style.” She was not cross-examined about this.
Ms Whitehead said she used the cash loan system. She borrowed $50 or $100 at a time, but it would always be paid back the next week. She said she did that a few times, but was not able to provide an estimate of the number. She said she borrowed money when bills came in and “ends were a bit short”. She gave examples of bills such as power bills or veterinarian bills. She could not remember the first time that she used the system, nor the last time. She was sure that other staff members took similar cash loans but she could not remember which particular ones.
Ms Lisa Langmaid said that she obtained a loan of $500 from the defendant. She said the defendant wrote something on letterhead but she could not remember what it was. The defendant told her the money was his own personal money. When she left the Club the money had not been repaid. In cross-examination, she said she independently approached the defendant and asked him for a loan, unaware of the practice that was in place. She said the agreement was for her to make payments by instalments, not by way of money being withheld from her pay. However, she went on to agree that she was aware of the ability of staff to get advances on their pay, which she distinguished from loans as such. She agreed that she had obtained advances on two or three occasions. A note was made and would go in the change till drawer. Those $50 advances were repaid by the money being taken out of her pay. I note the defendant terminated Ms Langmaid’s employment. All in all, there is no reason not to treat those things she described as falling within the staff loan scheme.
Mr Dean Pearson said he was aware of the loan system but did not use it. He thought it was more for patrons, so that if someone left their wallet behind or was a bit short of money from week to week they would be given money out of the till. He thought a note was made of that. He did not explain how such loans were repaid. Plainly enough, they could not have been repaid in the same way as the staff loan system ordinarily worked.
The defendant’s table has Mr Christopher Coad involved in the practice, but his evidence was that although he was aware of the “staff loans system”, he did not use it. He said there was a “register” where the staff loans were recorded. He could not remember the names. He agreed that he told the police when interviewed that he believed the amounts involved were in the hundreds and not in the thousands, adding that to him, “thousands is a significant amount of money“. If it was, he would have paid more attention; his memory was that it was just in the hundreds.
A rather unsatisfactory state of affairs exists in relation to the evidence about this item. As I have said, the Cairnduff/Blashki figure comes from a comparison of the Club’s BAS statements with the bank account records. The BAS statements reveal gross wages, tax deductions and net pay figures, while the bank statements show the wages actually paid to the individuals. There is a difference between the net pay shown for tax purposes and wages actually paid. The defendant says the explanation for this is the deductions made from wages actually paid for loan repayments. Significantly, the Crown did not dispute that the existence of the staff loan scheme as I have outlined it. It is the extent of it that is in issue.
Mr Anderson gave evidence in the Crown case. He said he had recently checked the figures in the Blashki report for the period 1 July 2014 to October 2014. He said he had been too busy to look at the previous four years. The figures for that period in the Blashki report are “Net pay” – $63,560, and “Wages per bank” – $56,130, with the difference being $7,430. Mr Anderson’s evidence was that the figure of $56,130 was incorrect; the correct figure being $63,429.62.
Mr Anderson’s evidence as to how that figure is arrived at is not entirely clear. First, as a starting point, he said the correct wages per bank figure is $61,611.62. He obtained that figure from Xero records, Xero being an accountancy software program. He did not produce the records nor directly explain the difference. He said the last wages paid for the quarter were not paid by direct bank transfer but by cheque. The difference between the Cairnduff/Blashki wages figure and Mr Anderson’s wages figure is $5,481.62. That may be explained by Mr Anderson’s evidence of wages paid by cheque $3,432 at the “transitional” very end of the period, a payment to employees of $250 instead of $1,250, and other payments for wages which are mixed up with business expenses.
However, a critical part is that Mr Anderson said that to the $61,611.62, there should be added an amount of $670.61 for an unpresented wages cheque and amounts he described as deductions or amounts being withheld attributable to employee loans. He was not asked to quantify the amount of those deductions, nor did he offer the figure in his description of the records. On one view, the amount of loan repayments might be in the order of $1,147, arrived at by deducting from $62,429.62 cents the sum of $61,611.62 and the amount of the unpresented cheque.
Significantly, he also said that he had Xero records going back to 1 June 2013 which recorded amounts of loan repayments. Neither he nor any other Crown witness produced those records, nor did Mr Anderson give any evidence of what those records showed. The evidence of the defendant and of Mr Cairnduff is that the Xero records were requested of police but not provided.
There may well be an explanation for this, but on the face of it I find the situation rather extraordinary. At the same time, I should note that there does not appear to have been any application made by the defendant at any time in relation to outstanding documents, nor was one made during this hearing. Counsel for the defendant suggested that I take this situation into account. I take the view that a hearing before a judge alone about disputed facts upon a plea of guilty, attracts the same principles as a jury trial determining the issue of guilt.
The undoubted principle is that the Crown has the responsibility of ensuring a case is presented with fairness in relation to the evidence adduced. Where there is a question about the failure of the prosecution to call a witness or adduce material evidence, the issue is not whether the tribunal of fact may properly reach conclusions about matters of fact, but whether in the circumstances, a reasonable doubt should be entertained: RPS v The Queen [2000] HCA 3, 199 CLR 620 at [29]; Dyers v The Queen [2002] HCA 45, 210 CLR 285. I should note that accounting records before 1 July 2013 are not available as they were destroyed by the defendant.
Mr Blashki accepted that adjustments would have to be made for the types of issues identified by Mr Anderson. The defendant seemed to accept that a reconciliation between the bank statements and other records would be more accurate. The evidence of the employees involved is relevant to an assessment of the extent of the amounts involved. I can really only approach this issue from a broad perspective. Crown counsel submitted that the defendant’s approach to the calculations assumes the correctness of the amounts shown in the bank statements, and that the defendant was wholly responsible for processing the pays. That should be looked at in the light of the situation I have described above. The defendant’s counsel suggested that the total amount claimed as an offset was not unreasonable when broken down across the whole period.
It needs to be borne in mind that the real issue is what amounts were being lent in cash so as to explain the total cash shortfall. What may have been taken out of wages on a weekly basis is an indication of that. Averaging the total amount of $52,199 over the whole of the period gives a figure of about $815 a month. It seems that during the relevant time, over 20 people were employed for various periods and on various bases. Of the seven who gave evidence, four borrowed money. On the whole of the evidence I do not think it is reasonably possible that the loan scheme operated to the extent where on average, about $800 or so was being withheld each month for the repayment of employee loans. That equates to say four employees repaying $50 per week constantly for the entire period.
On the other hand, for the four month period in 2014, on Mr Anderson’s figures the difference between net wages per BAS records and wages actually paid is about $130. That is 0.75% of the $7,430 claimed by the defendant. I take the view that this figure of $130 per month is not truly representative of amounts withheld. The calculation includes a transitional ‘one off’ payment of staff wages by cheque.
To say the least, the evidence does not allow for precision. I am comfortable with the general proposition that a few employees borrowed cash every few weeks or so. Translating that into a monthly figure is difficult. Doing the best I can with the evidence as it is, and bearing in mind who bears the onus, I think it is reasonably possible that averaging things out, about $250 per month was lent to employees throughout the whole of the relevant period. Accordingly, the amount of $16,000 should not be included in the figure for which the defendant is criminally responsible.

Expenses paid in cash

There are four components of this item. The common aspect is that they involve the use of cash by the defendant to make payments properly payable by the Club. The components as set out in the report are:
Cash payments to staff $38,180
Stock purchases by cash $17,550
General maintenance expenses $6,750
Cost of updating Club bistro $2,500

Total $64,980

The cash payments to staff involves cash wages paid to various employees for additional shifts, weekend or public holiday work and the like. The details of the claimed payments appear in a table prepared by the defendant. That table relates to 17 employees to each of whom he says he paid wages in cash. In the table, the defendant has given a short explanation and an “estimate” of cash wages paid to each. Of the seven employees who gave evidence, this issue arises in respect of five of them. In evidence-in-chief each was asked about the defendant’s explanation and the amount alleged. Each employee denied receiving cash either at all or in the amount suggested.
I think it appropriate to proceed with some caution as to this evidence. There are obvious reasons why a person may wish to deny, in open court, receiving cash payments that were not properly recorded.
The defendant says Mr Gillard was paid cash for extra shifts on several occasions over a five year period and a cash bonus on one occasion. The total is $6,500. Mr Gillard denied receiving any cash wages or bonus. He maintained this denial in cross-examination. He agreed telling police that on public holidays he would get $100 for an eight hour shift but said he did not remember having those amounts paid in cash. He said it would have just been paid in his normal wage. He did not accept the possibility that he was paid in cash, but agreed it might have happened in relation to someone else. He did agree that every now and again he would get a carton of beer for working extra hours, saying he was happy with a carton rather than cash.
The defendant says that Ms Lee was paid cash on maybe 8 to 10 occasions. She was advanced $80 which was not repaid; the total is $1,680. Ms Lee said in evidence that the only cash she received was the sum of $200 when she queried the defendant about her superannuation. The defendant gave her the money, saying she did not need to worry about it. She denied getting cash wages in the vicinity of $1,600.
In respect of Ms Ansell the suggestion is that she was probably paid cash six times a year over a five year period, on average $100 to $150 a time; the total is $3,750. Ms Ansell agreed that she was paid cash on occasions. She said sometimes she was asked to wash the tablecloths after a function for which she was paid $100 to $150. She said that happened once or twice a year, possibly twice, although it did not happen for every year she was employed but for three or four of those years. She said that on other occasions she was paid cash when one of the other staff was sick or needed time off, and the defendant would ask her to come in and offer to pay cash. The amount depended on the hours worked. Again, it was between $100 and $150. This did not happen very often; probably four or five times a year. She said she could not disagree with the proposition that the total amount involved was $3,750.
The defendant says that Ms Whitehead was paid the same amount in cash as was Mr Gillard; that is, $6,500 being cash for extra shifts, and a cash bonus on one occasion. Ms Whitehead said that she was paid cash for extra shifts on several occasions over the relevant period. She first denied receiving any cash bonus, then suggested that there was a bonus in either cash or ‘grog’, later reverting to the original answer. In cross-examination she said she doubted “very much” that she received a $500 cash bonus one Christmas. When it was suggested to her that she had received $6,500 in cash in the relevant period she said, “Definitely not“, but accepted that the figure was less. She said she was paid in cash when the defendant had a day off or if a casual worker was sick, and she went in for a couple of hours. She was not able to recall a specific occasion. She doubted “very much” that she was given a cash bonus of $500 one Christmas.
In relation to Mr Coad, the defendant in his table suggests he was paid cash, but there is no detail or amount provided. However, in his evidence Mr Coad said that he sometimes helped out working behind the bar when it was very busy, for which he would be given about $50 “or something like that”. He said that would have been quite rare.
The defendant says that Mr Dean Pearson would only work on the basis that he was paid cash. He worked on weekends and was paid $200 cash for the nights on which he was called in. As this “would have happened on 20 odd occasions”, the amount is $4,000. Mr Pearson said that most of the time he worked he was paid through bank transfer but agreed that there were quite a few times when he was paid in cash. He thought it was somewhere between 10 and 30 times, but he could not be sure. The amount depended on the hours he worked. If it was two or three hours, probably $70 or $80, $100 to $150 if it was five or six hours, up to $200 if he did an eight hour shift. He agreed that $4,000 in cash over the time he was employed would be “a roundabout figure”.
The defendant gave evidence that he put the information about these employees in a table from what he could remember and the practices of the staff. In cross-examination, he said that he was not suggesting the former employees who had given evidence were lying. He said that there were just differences in their recollections. He maintained the correctness of what he had put in the table.
Mr Blashki was asked whether in his experience he had an occasion to identify where small business had been paying employees in cash. He said he had had a number of cases where he had become aware that employees had been paid in cash. In those instances he had suggested to the employer that he did not think it was very smart and they should not do it: “Having said that, I think it’s – I suspect it’s not uncommon.” He said it was probably more like with a casual employee who comes in from time to time, but not always. He said it can sometimes be permanent employees who ask for overtime to be paid in cash; that happens quite often where there is difficulty in keeping staff or retaining staff, or getting them to work longer hours. “It’s not legal, … but it happens.”
I am not satisfied beyond reasonable doubt that the defendant did not make cash payments to employees. Again, the difficulty is in settling on an amount which I can say may have been paid as a reasonable possibility. On the whole of the evidence I reject the defendant’s assertions as to the extent of the payments. I have already mentioned Mr Gillard’s difficulties. In light of the other evidence, I am not comfortable accepting his assertion that he was never paid in cash. I think it was reasonably possible that he was. Given the evidence of Ms Whitehead, the other full-time employee, I think it is reasonably possible that he was paid in the order of $3,000.
I accept Ms Lee’s evidence that she was only paid the sum of $200 in cash when she raised the issue of her superannuation. I found her evidence persuasive in that respect. The circumstances are likely to be something she remembered. Next, given Ms Ansell’s evidence, I think it is at least reasonably possible that she was paid the sum of $3,750 in cash. As to Ms Whitehead, there is good reason to treat her evidence with some caution given her prevarication. But I am satisfied beyond reasonable doubt that she was not paid $6,500. Doing the best I can with her evidence, I think it reasonably possible that she was paid about $3,000. Next, looking at Mr Coad’s evidence, I think it is reasonably possible he was paid about $300. Lastly, I think it is at least reasonably possible that Mr Pearson was paid about $4,000, as he says he was.
It follows that I am not satisfied beyond reasonable doubt that the sum of $14,250 should be included in the amount stolen by the defendant.
The next component is stock purchases by cash. The defendant has made an “estimate” of $75 per week for the “4.5 year” period. That period was used in the report but sometime after the hearing was corrected to five years and four months. The total is now $21,060. In evidence the defendant said the Club did not hold a great deal of stock, and for instance, when they needed, say, a bottle of scotch on a busy Friday or Saturday night, “you’d run down to the bottle shop or the local hotel, or wherever it was, purchase it.” He said they would go to supermarkets and buy things like soft drinks and snacks, along with general items such as batteries for remote controls or cleaning products. He admitted to not having any source documents in relation to his estimate. He was going entirely on his memory. He said the majority of the purchasing was done by him, but if he was not there, then other staff members would do the same thing.
In cross-examination he accepted that the figure was an average. When it was put that he could not remember with absolute certainty how much he had paid over the period. He said he had a good recollection because he was the one who was basically responsible for the purchases. He suggested he had a good memory of it because it happened every single Friday night. “Every single Friday I … we had run out of something. We didn’t carry a great deal of stock.” Sometimes he obtained a receipt; sometimes he did not. When he did, he did not keep them. “You just grabbed the cash, go and get the job done“. He did not think to record the amounts paid as they were always small amounts. He admitted that was a shortcoming in how he did his job.
Mr Blashki was asked whether he could make any comment on whether the amount claimed for stock purchases in cash were reasonable or not, bearing in mind the annual turnover of the Club. He said he could not comment on whether it was reasonable or not because “frankly” he did not know, but he said probably the best way to characterise it is to say it is unsurprising. He said it was quite common for something like a restaurant to run out of something and “send someone around the corner” to buy small items. In his experience it was quite a common situation, with the money being taken out of the till. He said that rarely those sorts of things were accounted for meticulously. Some people keep a track of it, others tend to be less diligent.
On the whole of the evidence, I am not satisfied beyond reasonable doubt that cash payments for stock were not made as the defendant suggests. The quantum is the issue. I bear in mind that this is an estimate only provided by the defendant. There are and were no records. I have already expressed my reservations about the defendant’s credibility generally. Of course, it is in his interests to inflate the figure. I think it is reasonably possible that $50 a week was expended in this way, meaning the sum of $12,800 is not to be included in the amount stolen.
The next component relates to general maintenance expenses over the “4.5 year” period, again belatedly corrected to five years and 4 months. The defendant says he made cash payments for maintenance to Mr Nick Reyenga, the approximate figure being $8,000. The defendant’s evidence was that Mr Reyenga was on the committee and used to do general maintenance around the Club. If something needed to be fixed or changed, Mr Reyenga would do it; for example, a broken skirting board or recovering a stool, and cleaning the air conditioning units. Once a month or once a quarter he would present to the defendant a list of the jobs he had done and how much he thought was owed. There were short notes of what he had done and a single figure which “was never a big number“. The defendant always paid him in cash from the Club’s money. No official records were ever kept.
The defendant accepted that the figure of $6,750 (then wrongly advanced) was an estimate, not exactly accurate but around the mark. It was put to him that he was basically guessing about the estimate. He said it was based on what he remembered paying, whether it was $400 or $450 a quarter, or $100 a week, he thought what he put was a fair estimate.
Generally, the defendant’s evidence when cross-examined about this was not entirely satisfactory. There were instances of evasion or non-responsive answers. When asked where the lists were the defendant said, “Mr Reyenga wanted to be paid in cash. So, I would pay Mr Reyenga cash.” When I pointed out what the question was, he said that the lists had been thrown out. He went on to say that most of the time they were written on scrap pieces of paper. Again, when it was put to him that he still had to properly account for expenses, he said that this was something he did wrong, he did not keep proper records. His reasoning for throwing the pieces of paper out were that Mr Reyenga was part of the committee, “committee are [sic] supposed to be paid, so that was my reasoning behind throwing it out“.
When he was asked whether Mr Reyenga was doing maintenance every single month of every single year, his answer was that Mr Reyenga came into the Club every single day. The question was put again, the answer was that there would be some months when Mr Reyenga did not come in, but then he would give him an invoice for maybe $250 to $275. Counsel for the Crown suggested the defendant might not be understanding the question, asking whether the defendant’s evidence was that he paid Mr Reyenga maintenance for every month. The effect of his evidence was that he averaged out the amount over the period bringing it back to a monthly figure, a figure he obtained from “basically looking at the things Mr Reyenga did for the Club over that 4½ [sic] year period“. He later said it was more based on Mr Reyenga coming in every three months or every couple of months with his little piece of paper which “was always $300, $450.”
Mr Coad gave some evidence relevant to this issue. In cross-examination, he said that Mr Reyenga did work around the Club and it would be a fair description to call him a handyman or the maintenance man for the Club. He said he did not know how Mr Reyenga was paid. Constable Johnston gave evidence that he made attempts to find Mr Reyenga on 17 March 2020, the day before the constable gave evidence. He discovered that Mr Reyenga was then in Holland and not returning until April.
The last piece of evidence relevant to this component is that of Mr Blashki. His remarks concerning the stock purchases in cash included reference to tradespeople. He said it was quite a common situation for someone like a plumber to come in when the fridge needs fixing; “he gets paid in cash“. I accept his evidence. I note that the Crown did not call or adduce any evidence about maintenance expenses being paid in any other manner. Over the period involved, the amount is $125 a month. From the evidence, I have some appreciation of the nature of the Club and the extent of its operations. I exercise some care with this point, but in the absence of evidence about other maintenance expenses, that monthly figure does not strike me as being unreasonable. I say that notwithstanding my view of the defendant’s evidence. I am not satisfied beyond reasonable doubt that the $8,000 should form part of the amount for which the defendant is criminally liable.
The last component is the cost of updating the Club bistro. The defendant says he paid $2,500 in cash to Mr Brian Brooks. Mr Brooks died some time before January this year. The defendant’s evidence is that the committee decided to update the benches and tables in the bistro. Mr Brooks used to do odd jobs and heard about what was happening and offered his services. Mr Brooks told the defendant the cost would be between $2,000 and $3,000, and he needed to find out how much the material was. He later gave him a list of the materials to be used and said the cost would be $2,500. The defendant said his response was that as it was half way between the two figures, he agreed. Mr Brooks recovered the benches.
In cross-examination, the defendant said the work was done earlier in the relevant period than later; that it was closer to 2009 than 2014. He said Mr Brooks was retired and on a pension, and needed to be paid in cash. The defendant said he did not keep the piece of paper that Mr Brooks gave to him. He said he did not want to get Mr Brooks into trouble and did not want to keep any official record of it. When it was put to the defendant that he was simply relying on his memory of the amount that was paid, the defendant said he truly remembered because there were problems with the quality of the work.
I note that it was not put to the defendant that the upgrade did not occur. There is no other evidence about this matter. Notwithstanding my reservations about the defendant’s evidence in general, he seemed clear in the detail of this matter. The Crown called no evidence to the contrary, and the scenario does not seem inherently implausible. I accept counsel for the defendant’s submission that there is an air of authenticity about it. At the least, it is reasonably possible that the cash payment was made in the circumstances outlined. I am not satisfied beyond reasonable doubt that this amount is to be included in assessing the sum stolen.

Conclusion

It follows that the total amount alleged to have been stolen but about which I have a reasonable doubt, is $77,676.10. It further follows that I am satisfied beyond reasonable doubt that the defendant should be sentenced on the basis that he stole approximately $170,000. Looking at the matter overall and from a broader perspective, I am satisfied it is appropriate to proceed accordingly.
Given the nature of the exercise which I had to undertake, I should add that if in arriving at the total I have erred one way or another by $5,000 or so, that error will not, particularly having regard to the scope of the offending alleged in the whole indictment, materially affect the sentence I impose.