Cay v The Queen
[2010] VSCA 292
•21 October 2010
SUPREME COURT OF VICTORIA
COURT OF APPEAL
| MICHAEL CAY | S APCR 2008 0961 |
| Appellant | |
| v | |
| THE QUEEN | Respondent |
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JUDGES: | NETTLE, NEAVE and HARPER JJA |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 21 October 2010 |
DATE OF JUDGMENT: | 21 October 2010 |
MEDIUM NEUTRAL CITATION | [2010] VSCA 292 |
JUDGMENT APPEALED FROM: | R v Cay (Unreported, County Court of Victoria, Judge Hogan, 12 December 2008) |
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CRIMINAL LAW – Sentence – Appellant convicted of multiple rolled up counts of obtaining property and financial advantage by deception – Whether a rolled up count encompassing individual offences falling within the definition of continuing criminal enterprise offence can constitute a single continuing criminal enterprise offence – Sentencing Act 1991, ss 6H, 6I – R v Beary (2004) 11 VR 151, applied – Total effective sentence not manifestly excessive – Limited evidence of remorse – Appropriate weight given to guilty plea, delay and prospects of rehabilitation – Appeal dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr C G Mandy | Victoria Legal Aid |
| For the Crown | Mr D Gurvich | Commonwealth Director of Public Prosecutions |
NETTLE JA:
I invite Neave JA to deliver the first judgment.
NEAVE JA:
The appellant, Michael Cay, pleaded guilty to four counts of obtaining property by deception (counts 1, 2, 4 and 5) and one count of obtaining financial advantage by deception (count 3). The maximum penalty for both these offences is 10 years’ imprisonment.[1] After hearing a plea in mitigation of sentence, the learned sentencing judge sentenced the appellant as follows:
[1]Except where the court is sentencing a continuing criminal enterprise offender for a continuing criminal enterprise offence in which case Sentencing Act 1991, s 6I applies. That issue is discussed below.
Count
Description
Term
Cumulation
1
Obtaining property by deception
15 months’ imprisonment
10 months
2
Obtaining property by deception
27 months’ imprisonment
Base sentence
3
Obtaining financial advantage by deception
9 months’ imprisonment
5 months
4
Obtaining property by deception
3 months’ imprisonment
2 months
5
Obtaining property by deception
6 months’ imprisonment
4 months
This amounted to a total effective sentence of 4 years’ imprisonment. The judge directed that the appellant serve a period of 3 years before being eligible for parole. Orders were also made under s 86 of the Sentencing Act 1991 (‘Act’) requiring the appellant to compensate the victims for their loss.
The appellant now appeals against the sentence imposed on count 2 and against the total effective sentence.
The circumstances of the offending
The five counts related to funds obtained by the appellant, as the operator of a loan broking business, Jewel Financial Services Pty Limited (‘JFS’).
Although the appellant was not a director of JFS, he was, at all relevant times, the effective manager of the company’s affairs. The company had four directors. Each of them was appointed following an approach by the appellant, who was disqualified from holding the position of director. Her Honour said that she was satisfied that the appellant ‘gave instructions to the Directors who were unaware of their legal obligations, that [he] met with clients and that all of the essential financial dealings of the company occurred under [his] direction’.[2]
[2]R v Cay (Unreported, County Court of Victoria, Judge Hogan, 12 December 2008) (‘Reasons’), [3].
Count 1 was a rolled up count comprising 11 transfers of moneys totalling approximately $60,000 in all. The funds were advanced by Ibrahim and Perihan Boztepe to the appellant for the purpose of making a loan to a Mr Barisik. The appellant had introduced Mr Barisik to the couple and told them that the money lent would be secured by a caveat on the title of property owned by Mr Barisik. Upon repayment of the sum by Mr Barisik on 19 January 2005, the appellant used the money repaid for personal purposes rather than repaying the couple.
Count 2, another rolled up count, related to purported loans of $200,000, $50,000 and $20,000 made by Peter and Jennifer Whitty between April and June 2005. The appellant represented that the moneys were to be lent to a client and secured against property. To induce the couple to make the money available for a $20,000 loan, the appellant produced a false document, purportedly written by the borrower’s accountant in support of the loan. The request for that loan was made in spite of the appellant’s knowledge that the Whittys were facing cash flow problems and that the loan was being made from a credit card. The moneys advanced were not lent to clients of JFS but to ATS Financial Services Pty Ltd, another company operated by the appellant. The funds were also spent to repay other loans and business expenses and on one occasion, the appellant’s wife’s credit card bill.
Count 3 related to a further $70,000 advanced by the Whittys in similar circumstances in May 2005. The appellant again spent the money for his own purposes, repaying another loan and making various cash withdrawals. Of the total sum of $340,000 advanced by the Whittys, only $73,400 had been repaid during the appellant’s business operations.
Count 4 related to a sum of $25,000 being placed into JFS’s ‘trust account’ in July 2005 for the purposes of obtaining a loan from another lender. The appellant convinced Ingrid Fox to deposit the sum, to give the impression that the money had been invested for some time and so to improve her chances of obtaining a loan. While there was no trust account, the appellant’s efforts did result in the other lender making a conditional offer. Instead of communicating this to Ms Fox, the appellant told her that her application had been declined and refused to return her money, which he used to repay another loan and pay other expenses.
Count 5 arose out of similar circumstances to count 4. In July 2005 Jay McLean deposited $50,000 into JFS’s ‘trust account’ to obtain a loan from another lender. To gain his trust, the appellant told Mr McLean that he was a member of the Mortgage Industry Association of Australia, which was a lie. A conditional offer was made by the other lender but not accepted by Mr McLean because of the excessive interest rate. He asked for the return of his money but by August 2005, only $20,000 had been repaid. The balance was disbursed to the appellant’s own bank account and numerous other accounts held by JFS.
The total amount obtained dishonestly was $475,000. Although some of that sum was repaid during the running of the business, an amount of $381,000 was still outstanding.
The appellant was 35 during the period of offending and 39 at the date of sentencing. He admitted 10 prior convictions arising from four court appearances. Most of these convictions were for driving offences but the appellant had been convicted of two charges of obtaining property by deception, for which he was sentenced to pay an aggregate fine of $2,000.
After being sentenced for these offences, the appellant was convicted of a further four charges of obtaining property by deception on 15 August 2005 and sentenced to a total effective term of imprisonment of 3 months. The charges related to offences committed in 2000 and 2001 (ie, before the current offences) when he was an employee of a pharmaceutical company. The appellant obtained a sum of approximately $37,000 by making fraudulent misrepresentations to clients of his employer for the purposes of inducing cheques to be issued. The appellant then used the amounts obtained for his own purposes. He ceased working for the company in April 2001 but was not charged until September 2004.
The judge treated the fact that the offences for which the appellant was being sentenced were committed only four months after the appellant had been charged with the four earlier offences as an aggravating feature. The offences also constituted a breach of a wholly suspended sentence of one month’s imprisonment imposed by the Magistrates’ Court for driving offences.
Ground 1
This ground complains that
the Learned Sentencing Judge erred at law in treating count two as a continuing criminal enterprise offence pursuant to Part 2B of the Sentencing Act 1991.
In her sentencing reasons her Honour noted that both counts 1 and 2 were rolled up counts. She then said that:
I also note that Counts 2, 3 and 5 each come within the definition of a continuing criminal enterprise offence within the meaning of Part 2B of the Sentencing Act 1991. Pursuant to s 6I of that Act, you qualify to be sentenced as a continuing criminal enterprise offender in relation to Count 5, such that you are liable to a maximum term of imprisonment of two times the maximum term of ten years prescribed for that offence. Appropriately in my
view, the Crown does not submit that I should apply this Provision in your case.As far as Counts 2, 3 and 5 are concerned, in sentencing you I do not consider that the fact of there being a continuing criminal enterprise alone warrants the imposition of a higher sentence than would otherwise be imposed, the sentence on Count 2 is arrived at by having regard to the fact that it is a rolled up count involving $270,000, and took place over a protracted period from 1 April 2005 to 23 June 2005. Count 3 has an aggravating feature to it, in that it involves the same victim as Count 2 in circumstances where you knew that he had already extended himself financially, almost to the limit, by obtaining cash advances on credit cards in relation to the transactions in Count 2.
In relation to Count 5, I have sentenced in accordance with the quantum of money involved, together with all of the other circumstances of breach of trust, hardship to the victim, to which I have already referred.[3]
[3]Reasons, [35]–[38].
Later in her reasons the judge said that it was to be recorded in the records of the court that in sentencing the offender on count 2, 3 and 5 ‘you have been sentenced for a continuing criminal enterprise offence’.
Part 2B of the Act applies when the court sentences a ‘continuing criminal enterprise offender’ for ‘a continuing criminal enterprise offence’. Continuing criminal enterprise offences are defined in Schedule 1A[4] and include an offence against s 81(1) (obtaining property by deception) and an offence against s 82(1) (obtaining financial advantage by deception) of the Crimes Act 1958, where the value of the property or financial advantage obtained is $50,000 or more.[5]
[4]Sentencing Act 1991, s 6H.
[5]Sentencing Act 1991, Schedule 1A, s 1(d), (e)
Section 6H(1) defines ‘continuing criminal enterprise offender’ as meaning:
an offender who is found guilty of—
(a)a continuing criminal enterprise offence and who in another trial or hearing or more than one other trial or hearing had been found guilty of 2 or more relevant offences;
(b)2 continuing criminal enterprise offences and who in another trial or hearing had been found guilty of a relevant offence;[6]
[6]For the definition of ‘relevant offence’, see s 6H. Whether the individual offences constituting the rolled up count were relevant offences was not at issue in this appeal.
(c) 3 or more continuing criminal enterprise offences.
Under s 6I(1):
A continuing criminal enterprise offender is liable, for a continuing criminal enterprise offence, to a maximum term of imprisonment of 2 times the length of the maximum term prescribed for the offence or 25 years, whichever is the lesser.
In her sentencing reasons her Honour said that counts 2, 3 and 5 were continuing criminal enterprise offences and that the accused fell to be sentenced as a continuing criminal enterprise offender in relation to count 5, where the relevant amount was $50,000. Her Honour’s statement that s 6I was relevant only to count 5 appears to have been based on the decision of this Court in R v Grossi[7] that a continuing criminal enterprise offender who fell within s 6H(1)(c) because he or she was found guilty and fell to be sentenced for three or more continuing criminal enterprise offences at the same time, was to be sentenced as such only in respect of the third and subsequent continuing criminal enterprise offences.
[7](2008) 183 A Crim R 15 (‘Grossi’).
In R v Roussety[8] a bench of five held that where the offender falls within s 6H(1)(c), the higher maximum penalty of double the maximum term or 25 years, applies to all counts of which the offender is found guilty at a trial. It follows that, if her Honour correctly held that count 2 was a continuing criminal enterprise offence, she wrongly held that the offender qualified to be sentenced as a continuing criminal enterprise offender only in relation to count 5. So much was conceded by counsel for the appellant.
[8](2008) 192 A Crim R 32 (‘Roussety’).
The issue raised by ground 1 is whether count 2, which was a rolled up count comprising three criminal acts, two of which involved sums exceeding $50,000, was a continuing criminal enterprise offence. If it was not, the appellant had been found guilty of only two continuing criminal enterprise offences when he was sentenced on count 5 and, contrary to her Honour’s statement, he was not a continuing criminal enterprise offender, to whom s 6I applied, when he was sentenced on count 5.
Counsel for the appellant submitted that her Honour had erred in treating count 2 as a continuing criminal enterprise offence. Both s 6H and Schedule 1A of the Act refer to ‘an offence’ and a rolled up count is not ‘an offence’ but rather a ‘collection of offences bundled together into a single count, a procedure which can only occur by agreement with the defence and only for the purpose of a plea of guilty’.[9]
[9]R v Jones [2004] VSCA 68, [13] (Charles JA).
Thus, it was said, despite the fact that count 2 included two offences covering amounts in excess of $50,000, it could not constitute a continuing criminal enterprise offence, and indeed, a rolled up count could never constitute a continuing criminal enterprise offence even if all of the individual transactions related to amounts in excess of $50,000. It followed therefore that her Honour had incorrectly declared that the offender was sentenced for a continuing criminal enterprise offence in relation to counts 2, 3 and 5.
Counsel relied on remarks made by Charles JA in R v Ralphs[10] in which his Honour accepted a Crown concession that ‘in circumstances where offences are charged as a “rolled up” count, that count does not qualify as a Schedule 1A offence by virtue only of the “rolled up” value’.[11]
[10][2004] VSCA 33 (‘Ralphs’).
[11]Ibid [10] (emphasis added).
Counsel submitted that the practice of presenting an accused on rolled up counts simplifies the sentencing process and benefits both the alleged offender and the Crown, because it encourages offenders to plead guilty on the basis that they will be sentenced for a single offence, rather than for multiple offences. It was submitted that the utility of rolled up counts would be threatened if offences constituting a rolled up count could be treated as separate offences, for the purposes of sentencing continuing criminal enterprise offenders.
Counsel further submitted that it was not an answer to this complaint that the judge said that the Crown has not asked her to apply s 6I. If s 6I of the Act applied in sentencing the offender on count 5, it was a sentencing error for her Honour to treat that provision as discretionary, rather than mandatory.
In reply, counsel for the Crown submitted that the appellant was convicted of three offences which were properly characterised as continuing criminal enterprise offences (ie, counts 2, 3 and 5). Ralphs was distinguishable because in that case the issue was whether the Crown could aggregate separate offences involving amounts of less than $50,000 into a combined amount exceeding $50,000.[12]
[12]Grossi (2008) 183 A Crim R 15, 25–6 (Redlich JA).
The purpose of Part 2B of the Act was as applicable to a rolled up count involving one or more transactions exceeding $50,000 as it was applicable to single counts. That purpose was explained by Vincent JA in R v Arundell[13] as follows:[14]
[13][2003] VSCA 69.
[14]Ibid [19]–[20] (Vincent JA, Phillips CJ and Cummins AJA agreeing).
Parliament has, through the enactment of Part 2B, expressed an intention to deter those who demonstrate preparedness to engage in repeated predatory behaviour, affecting through the commission of offences of the kind presently under consideration, the economic welfare of individual victims and the general community.[15]
[15]Ibid [22].
Counsel submitted that to exclude a rolled up count encompassing one or more transactions of $50,000 or more from the definition of continuing criminal enterprise offence would be to defeat the purpose of Part 2B because it would mean that an offender sentenced on such a rolled up count could never be sentenced under Part 2B. The consequences of accepting the appellant’s submission would be that the Crown would cease to charge offenders with rolled up counts. This would complicate the sentencing process and ultimately disadvantage offenders.
Further, counsel submitted that the judge had not imposed a higher sentence on count 5 because the appellant was a continuing criminal enterprise offender. This was apparent from her Honour’s comment that the Crown had not submitted that the section should apply and the absence of any mention of an increased maximum penalty from the list of matters the judge said she took into account in sentencing on count 5.[16] Regarding the appellant’s allegation that the judge was under the ‘mistaken impression’ that s 6I was not mandatory, counsel submitted that the judge did not fail to recognise that s 6I was mandatory but merely refused to exercise her discretion to impose a greater sentence than that which would have been imposed had the lower maximum sentence applied.[17]
[16]Count 5 was the only count which attracted the increased maximum penalty, as it was decided before Roussety [2008] VSCA 259.
[17]Grossi (2008) 183 A Crim R 15, 41–2.
Conclusion
In my opinion ground 1 is not made out. Where relevant offences are charged as a single rolled up count and the count comprises at least one transaction which involves an amount of $50,000 or more, the rolled up count should be regarded as a continuing criminal enterprise offence falling within Schedule 1A.
The remarks of Charles JA in Ralphs,[18] do not assist the appellant. In that case the appellant’s counsel submitted that ‘it could not be the case that an offender is subject to the greater maximum penalty provided for in s 6I of the Sentencing Act if two or more transactions each of which involved less than $50,000[19] were rolled up in one count’.[20] The Crown conceded this point and all members of the Court agreed that the concession was properly made. However this is not such a case.
[18](2004) VSCA 33, [10].
[19]Emphasis added.
[20](2004) VSCA 33, [9].
In R v Beary[21] Callaway JA pointed out that a rolled up count is a single offence for the purposes of sentencing.[22] The offender is therefore advantaged by the fact that the count attracts only one sentence. In this case count 2 comprises at least one transaction relating to an amount of $50,000 or more. I would accept the submissions of counsel for the Crown that to hold that Part 2B of the Act does not apply in this situation would subvert the purpose of the continuing criminal enterprise provisions.
[21](2004) 11 VR 151.
[22]Ibid 157.
Even if I am wrong in that view, her Honour’s reasons and the sentences she imposed show that the higher maximum penalty imposed by s 6I was given no weight at all in sentencing the offender. Whilst an error as to the maximum penalty applicable to an offence will vitiate the exercise of the judge’s sentencing discretion, it will only do so if it is a material error.[23] I would accept the Crown’s submission as to what was meant by Her Honour in commenting on the lack of a request to impose a higher sentence. This was made absolutely clear by Her Honour in the following paragraph of her reasons, in which she said that ‘I do not consider that the fact of there being a continuing criminal enterprise alone warrants the imposition of a higher sentence than would otherwise be imposed’.
[23]R v RJE [1999] VSCA 79; R v Beary (2004 ) 11 VR 151, 157 (Callaway JA).
Grounds 2 and 3
Ground 3 was that the total effective sentence is manifestly excessive. Ground 2 was a particular of that ground and claimed that:
The Learned Sentencing Judge erred in failing to give sufficient weight to the Appellant’s plea of guilty and his remorse.
Counsel for the appellant acknowledged that ground 3 was misconceived as it should also have alleged that the individual sentences and orders for cumulation were manifestly excessive.[24] I approach ground 3 on that basis.
[24]R v Boucher [1995] 1 VR 110, 116.
In considering these grounds it is necessary to refer to the personal circumstances of the appellant, which were taken into account by her Honour.
The appellant migrated to Australia with his family from Turkey in 1975, when he was five years old and was brought up in a close and loving family. He attended a technical school till Year 11 and then worked for mortgage brokers before undertaking a cadetship as an electronics engineer with Fujitsu Australia. He worked in that role for 10 years, during which time he also studied part-time to obtain TAFE qualifications in electronic engineering and technology management. He then commenced working for the pharmaceutical company described above and later became a taxi driver before commencing in his role at JFS.
The appellant married in 1991 and has three children, aged 15, 11 and 8 at the date of sentencing. The marriage ended in 2004 but he saw his children frequently and was regarded as a good father.
At the plea hearing, various references were tendered which said that the appellant’s family was held in high regard by the Turkish community and the appellant was known as a family man willing to help others. The judge said that she had ‘difficulty in accepting’ a reference in which the appellant was described as having built his life on the principles of ‘honesty, truth, courage and integrity’, given the nature of the offences for which he fell to be sentenced.
At the plea hearing defence counsel submitted that the offences were committed in the context of the difficulties the appellant was having raising a young family and paying bills after suffering a period of illness. While it was conceded that the offences were premeditated, defence counsel said that the funds obtained were spent on legitimate business expenses. The judge accepted this to an extent but also pointed to payments made to meet the appellant’s debts and payments made to directors in priority to other creditors. Her Honour rejected the descriptions of the appellant’s conduct as ‘unsophisticated’ and instead found that the appellant preyed upon the ignorance of his victims and made deliberate misrepresentations.
Counsel for the appellant submitted that insufficient weight was given to the appellant’s guilty plea and his remorse. He relied on the judge’s statement that although the judge gave credit for the guilty pleas she was ‘not satisfied that they are pleas driven by any great remorse’.[25] He said that in the context of the findings made by the judge as to the appellant’s character witnesses, it was clear that insufficient weight had been given to this matter.
[25]Reasons, [29].
In addition to the above matters, counsel placed reliance on the following matters to support the allegation of manifest excess:
(a) the appellant’s guilty plea;[26]
[26]R v Taing [2004] VSCA 46, [25] (Coldrey AJA).
(b) his use of the funds to support the business rather than for personal use;
(c) the explanation that the funds were obtained because of the failure of directors to make good their promises to invest in the company; and
(d) the long delay between commission of the offences and the date of sentencing.
Counsel also submitted that the three year non-parole period was stern, having regard to:
(a) the fact that this was the appellant’s first sentence of imprisonment of substantial length;
(b) the judge’s acknowledgement that the appellant’s service of a previous term of imprisonment had the desired ‘deterrent’ effect;[27] and
[27]Reasons, [34].
(c) the absence of any subsequent offending.
In reply, counsel for the Crown submitted that the judge had given some weight to remorse, had accepted defence counsel’s submissions about the appellant’s pleas of guilty and accorded due weight to the fact that, although they were entered late in the proceedings, they were nonetheless significant because they saved the cost of a trial of not less than two weeks and saved the victims from having to give evidence.[28]
[28]Ibid [27].
In my opinion the complaint of manifest excess is not made out. So far as remorse was concerned, defence counsel at the plea hearing put it no higher than that there was ‘evidence of some remorse’. Her Honour remarked that the two witnesses called on behalf of the appellant had not said that he was sorry for the effects of his offending on the victims. In these circumstances it was open to her Honour to conclude that the appellant’s remorse was limited. It is apparent from the s 6AAA declaration made by her Honour that the appellant’s guilty plea was given some weight in sentencing him. Although her Honour did not expressly refer to delay, she was aware that three and a half years had passed since the commission of the last offence.[29] Further, the judge took account of the lack of subsequent offending as evidence of the appellant’s prospects of rehabilitation[30] and as moderating the need for specific deterrence.[31]
[29]Ibid [34].
[30]Ibid [39].
[31]Ibid [34].
The judge also gave detailed consideration as to whether a shorter than usual non-parole period was justified, referring to the likely effects on the appellant’s young family and the appellant’s prospects of rehabilitation.
The appellant was also advantaged by the fact that Her Honour followed the approach in Grossi, although the result of Roussety is that the higher maximum penalty applied in sentencing him on counts 2, 3 and 5.
Sentencing statistics reveal that between 2003–04 to 2007–08, the median term of imprisonment for obtaining financial advantage by deception was 1 year and
8 months[32] and for obtaining property by deception, 1 year and 6 months.[33] Only one of the individual sentences imposed by her Honour, the sentence imposed on count 2, exceeded those medians. Count 2 involved a total amount of $270,000.
[32]Sentencing Advisory Council, Sentencing Snapshot 77: Sentencing trends in the higher courts of Victoria 2003–04 to 2007–08 (June 2009) 5.
[33]Sentencing Advisory Council, Sentencing Snapshot 78: Sentencing trends in the higher courts of Victoria 2003–04 to 2007–08 (June 2009) 5.
Having regard to the nature of the offending and the circumstances of the offender, I consider that the individual sentences were lenient, as were the orders for cumulation, and that the non-parole period was not manifestly excessive. All of those sentences fell within the scope of her Honour's sentencing discretion. The case involved repeated and premeditated offending. The appellant heartlessly took advantage of investors and clients who trusted him and who were seriously affected by their financial loss. The offending occurred while he was already on bail for other offences involving dishonesty. The circumstances were such as to require weight to be given to both general and specific deterrence, although the appellant’s recent history showed that he had some prospects of rehabilitation.
For these reasons none of the grounds of appeal are made out.
NETTLE JA:
I agree. I add in relation to count 3 that one of the arguments advanced orally in support of the contention of manifest excessiveness was that the judge had cumulated more than the usual proportion of the individual sentences imposed on counts 1, 3, 4 and 5 on the base sentence imposed on count 2.
It was conceded that the individual sentences imposed on counts 1, 3, 4 and 5 were merciful but it was said that the higher than usual proportion of cumulation was nevertheless emblematic of error.
The argument was based on observations of the kind made in DPP v
Grabovac[34] that, where a sentencing judge is faced with the task of sentencing an offender for multiple offences, the judge should strive to impose individual sentences proportionate to the nature and gravity of each of those offences, and reduce if necessary the extent to which individual sentences are cumulated, rather than impose lesser than usual individual sentences in order to comply with the principle of totality.
[34][1998] 1 VR 664, 677–79.
In my view, the argument is not persuasive. Although the sentencing objectives adumbrated in Grabovac are correct, and sentencing judges ought strive to observe them, it is not to be thought that the mere fact that a sentencing judge may from time to time approach the sentencing task differently is necessarily a sentencing error; especially if the total effective sentence and non‑parole period are within range.
It follows that I too would dismiss the appeal.
HARPER JA:
I agree with both the learned presiding judge and with Neave JA. I too would dismiss the appeal.
NETTLE JA:
The order of the Court is that the appeal is dismissed
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