Director of Public Prosecutions v Brudenell

[2024] VCC 186

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CRIMINAL DIVISION

 Revised
Not Restricted
 Suitable for Publication

Case No. CR-21-00887

DIRECTOR OF PUBLIC PROSECUTIONS

v

ROBERT CLIVE BRUDENELL

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JUDGE:	HER HONOUR JUDGE CHAMBERS
WHERE HELD:	Melbourne
DATE OF HEARING:	12 April 2023, 19 December 2023
DATE OF SENTENCE:	27 February 2024
CASE MAY BE CITED AS:	DPP v Brudenell
MEDIUM NEUTRAL CITATION:	[2024] VCC 186

REASONS FOR SENTENCE
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Subject:Criminal law – sentence  

Catchwords:              Plea of guilty – two charges of obtaining a financial advantage by deception – offending related to dishonestly obtaining credit in the form of a receivable finance facility from the CBA in order to operate a timber milling business – credit obtained was substantial - $3.7 million between June-August 2010 and $3.77 million between September 2010 and March 2011 – receivers appointed to business in 2011 -  full admissions made – significant delay – not charged until December 2019 – no prior criminal history – impact of delay – 61 years old – co-operation – excellent rehabilitation prospects - general deterrence and denunciation paramount sentencing considerations – totality.

Legislation Cited:      Crimes Act 1958; Sentencing Act 1991, Sentencing (Suspended Sentences) Act 2006.

Cases Cited:The Queen v Doran [2005] VSCA 271; DPP v Dalgliesh [2017] HCA 41; DPP v Caulfield [2019] VSCA 131; DPP v Munn [2019] VSCA 267; DPP v Blackberry [2019] VSCA 269; Leimonitis v The Queen [2018] VSCA 198; Mendoza-Cortez v The Queen [2016] VSCA 302; Mao & Another v The King [2022] VSCA 211; Porcaro v The Queen [2015] VSCA 244; The Queen v Kinnear [2009] VSCA 104; Kenyeres v The King [2023] VSCA 25; Di Coccio v The Queen [2013] VSCA 74; Poursanidis v The Queen [2016] VSCA 164; DPP v Penny [2012] VSCA 203; Shiel v The Queen [2017] VSCA 359; Worboyes v The Queen [2021] VSCA 169; R v Merrett, Piggott & Ferrar [2007] VSCA 1,

Sentence:                  Total effective sentence of 4 years’ imprisonment with a non-parole period of 12 months’ imprisonment.

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr R. Barry with Mr P. Botros	Office of Public Prosecutions Victoria
For the Offender	Mr A. Halphen with Ms J. Willard	Aughtersons Lawyers Pty Ltd

HER HONOUR:

1Robert Clive Brudenell, you have pleaded guilty to two charges of obtaining a financial advantage by deception contrary to s 82 of the Crimes Act 1958.  The maximum penalty for this offence is 10 years’ imprisonment.

2You were born in Healesville in December 1961 and are now 62 years of age. You have no prior criminal history.

3You have worked in the timber industry most of your life, obtaining your first job in a sawmill at the age of 17. You established your own timber yard in Dandenong at the age of 20 with financial assistance from your father, who had mortgaged the family home to fund the venture. You sold this business for a profit three years later and used the proceeds to purchase a 50 per cent share in sawmill treatment plant in Monbulk. When that business wound up after three years you relocated to Geelong and started your own timber treatment plant, which you ran for nine years with varying degrees of success.

4Then, in 2006 you and a business partner established Ballarat Timber Processors Pty Ltd (BTP) and began operating a sawmill treatment plant in Ballarat. Together you borrowed a significant amount of money from the Commonwealth Bank of Australia (CBA) to establish the business.

5On 6 November 2006, the CBA provided BTP with its first receivable finance facility (RFF) in the sum of $1.5 million.  By June 2009, the credit facility had been increased from $3.5 million to $4 million.

6However, by 2009 BTP suffered a substantial downturn in its profitability, in large part due to the strength of the US dollar which made imported timber more attractive to customers. BTP began selling timber at a loss to stay in business.

7Following the dissolution of your business partnership, in June 2010 you became the director of BTP and assumed sole responsibility for the CBA loan facility. It is in this context that your offending occurred, whereby you began to generate false invoices in order to demonstrate to the CBA that the business was still profitable. In doing so, in August 2010 you dishonestly received credit through the RFF in the sum of $3.7 million (Charge 1), and in March 2011 you dishonestly obtained an extension of the RFF in the sum of $3.77 million (Charge 2). You were aged 49-50 at the time of the offending.

Circumstances of offending

8The background and circumstances of your offending are detailed in the prosecution opening for plea dated 6 April 2023, which is the agreed basis upon which you are to be sentenced.

9Under the credit facility, between 6 November 2006 and 6 October 2011, the CBA provided finance to BTP equivalent to approximately 80 per cent of BTP’s creditor invoices. The RFF was secured by a charge over BTP’s property and was guaranteed by you and initially your business partners, Laurence and Leonie Matheson (the Mathesons).

10As stated, the RFF is a line of credit of up to 80 per cent of the value of invoices presented by the business. In practice, the credit was obtained by BTP submitting an 'offer statement' to the CBA that included a summary of the company’s sales register extracted from BTP’s MYOB accounting program. The offer statement was then forwarded to the CBA by email.

11The BTP account into which payment was made by the CBA was secured by a fixed and floating charge over BTP, which included real property and a guarantee and indemnity in favour of the CBA.

12Under the terms of the RFF, BTP was then responsible for collecting the outstanding monies owed by its customers within a specified timeframe and repaying the bank the value that had been advanced.

13The CBA undertook monthly checks of the company’s debtors and the ages of the invoices to ensure compliance with the terms and conditions of the credit facility. This information was recorded in periodic field reports (PFR) maintained by the CBA.

14By 2006, the company’s assets consisted of two sawmills, a timber treatment plant, a timber drying plant and a timber chipping plant. As BTP’s business grew, the limit of the RFF increased over time. On 30 June 2009 the limit of the RFF was increased to $4 million. The balance owing on the RFF as at 1 July 2009 was a little over $3.5 million.

15By this time, the Mathesons were no longer involved in the daily financial operations of BTP and you had assumed control of the financial management of the business. The financial activities you controlled included invoicing debtors for timber material ordered, or providing offer statements to the CBA, based on which you would receive approval from the CBA to draw down on the RFF.

16However, as the business hit financial difficulties, from 9 July 2009 you began generating false debtor invoices on BTP’s MYOB accounting program, which then formed part of the regular offer statements sent by you to the CBA. Each offer statement included an acknowledgement that the invoices were genuine, although you knew they were not.

17Around the same time, you began withdrawing various amounts from the BTP (or other) accounts and used those funds to purchase bank cheques payable to BTP. You would then deposit the bank cheques into the debtor clearing account and record it as payment for the false debtor invoice.

18You continued to engage in this fraudulent process throughout 2009. In January 2010, Laurence Matheson asked his personal accountant to conduct an audit of BTP. This audit revealed that unsubstantiated sales invoices generated by BTP were being created on the MYOB program during part of 2009.

19Following the audit, and given BTP’s ongoing financial difficulties, the Mathesons reached an agreement with you to leave the business. They retained the Ballarat timber mill, while you retained the trading name 'BTP' along with a timber mill in Birregurra and associated machinery. The fact the audit had revealed the unsubstantiated sales invoices was not reported to the CBA.

20To enable BTP to continue in operation with you as the sole director, you sought to restructure the terms and conditions of the RFF with the CBA in June 2010, and the security derived from the Mathesons was removed.

21A senior banker for the CBA, Mr Ian Luehman, headed the restructure. In undertaking that role, Mr Luehman relied on the current account information provided by you, including the debtor and creditor ledgers and PFRs. This is the background to your offending, to which I now turn.

Charge 1 – Obtain financial advantage by deception ($3.7 million)

22The first charge of obtaining a financial advantage by deception relates to the credit you obtained through the restructured RFF in the sum of $3.7 million on 4 August 2010. You obtained this credit facility by falsely representing that the debtor information on the PFR dated 4 June 2010 related to genuine debtor invoices and that the goods invoiced had actually been delivered.

23Mr Luehman and another credit officer, Peter Morrish, from the CBA’s Credit Risk Assessment unit, reviewed the financial information provided by BTP before authorising the restructured RFF. In particular, the financial information reviewed by the CBA included the PFR dated 4 June 2010.

24The PFR listed the account balance of BTP's debtors as at 4 June 2009, including outstanding balances exceeding 90 days. Of the 13 debtors listed, the PFR included four debtors later found to be companies in respect of which you had generated false invoices, with an account balance of $1.605 million for those four companies. The PFR also included a record of false debtor payments from three of those four companies, comprised of:

·        Australian Timber Treatment - six false debtor payments with dates spanning 23 July 2009 to 19 March 2010 totalling $594,083;

·        HJT International - seven false debtor payments with dates spanning 6 November 2009 to 12 April 2010 totalling $815,088.03; and

·        Simmonds Lumber Dandenong - five false debtor payments with dates spanning 6 November 2009 and 22 February 2010 totalling $477,021.97.

25As part of their review, the credit risk assessment team also checked to confirm that the goods invoiced by BTP had been delivered. Within the list of 23 individual debtor invoices referred to in the PFR, two were false invoices attributable to HJT International. These had a signed delivery docket attached to the April 2010 invoices totalling $56,404.54.  The two invoices were later found to be false as were the delivery dockets.

26At the time the CBA reviewed the PFR, it had no reason to believe you had engaged in a practice of falsifying invoices and providing false debtor amounts. The CBA relied upon this information when it assessed and approved the restructured RFF on 4 August 2010, enabling BTP to continue to draw on a line of credit of $3.7 million after you became the sole director.

27The letter of offer contained an acknowledgment that the law prohibits the provision of false or misleading information or documents in the provision of financial services which you signed on 12 August 2010.

28The business transfer was then finalised, giving you full financial control of BTP.

29After gaining full financial control of BTP you continued to provide false information for the remainder of 2010 and into 2011. False information was contained in the regular Offer Statements. You also continued with the 'round robin' transfer of monies out of accounts, into the BTP Debtor Clearing Account, and falsely recording the deposits and debtor payments.

30In January 2011, the Ballarat office of BTP sustained flood damage, causing a loss of many of the financial records for BTP. Moreover, in January 2011, the BTP mill at Birregurra was damaged due to vandalism. The damage to the equipment was substantial and resulted in BTP ceasing all wood milling, and only sold limited stock through January and February 2011. You never informed the CBA that the mill was no longer in operation.

Charge 2 – Obtain financial advantage by deception ($3.77 million)

31The second charge of obtaining a financial advantage by deception relates to the renewal of the RFF in March 2011, valued at $3.77 million.

32One of the recommendations arising from the restructure of the RFF in August 2010 was that BTP’s financial viability be reviewed. The CBA conducted this review in early March 2011. In doing so the CBA relied upon five PFR’s compiled between August 2010 and March 2011. These each contained false invoices generated by you.

33The PFR for September 2010 listed the account balance of BTP's debtors including false account balances attributable to two companies, Australian Timber Treatment and Australian Treated Pine, totalling $801,005.14. False debtor payments were recorded against Australian Timber Treatment totalling $198,443.00.

34Of the 22 individual debtor invoices recorded in the 'proof of delivery' section of the report, four were false invoices for goods valued at $120,931.62 signed off as having been delivered. No such goods had been delivered.

35The PFR for October 2010 included false balances, again attributed to Australian Timber Treatment and Australian Treated Pine, totalling $299,051.67. Three false debtor payments were recorded against Australian Timber Treatment on four occasions totalling $510,011.58 and one for Australian Treated Pine valued at $1,719.42.

36Five of the 20 individual debtor invoices recorded in the October 2010 PFR as having been delivered were false. The false deliveries were each attributed to Australian Timber Treatment with the goods said to be valued at a total of $119,193.84.

37The PFR for December 2010 included a false account balance attributed to Australian Timber Treatment totalling $756,248.04, with false debtor payments recorded up to 24 December 2010 in the value of $391,433.54. Of the 18 debtor invoices recorded as having had goods delivered, four were false. The total value of the goods fraudulently claimed to have been delivered was $96,804.84.

38The PFR conducted on 28 January 2011 included false account balances for Australian Timber Treatment and Australian Treated Pine valued at $996,396.12, with false debtor payments attributable to these two entities totalling $608,069.84 for the period between 24 December 2010 and 28 January 2011. Four of the 20 invoices recorded as delivered were false with the value of the false invoices totalling $142,227.76.

39Finally, the PFR for February 2011 included five false invoices out of 22 debtor invoices attaching false delivery documentation representing that goods valued at $166,497.34 had been delivered, when they had not.

40These five PFR’s were relied upon by the CBA when the credit risk assessment team reviewed the RFF in March 2011. The assessors were not aware that between September 2010 and February 2011 you had continued to falsify invoices and to make 'payments' against those invoices by transferring monies into the CBA debtor clearing account and falsely recording these as debtor payments. Based on these deceptions the CBA approved the continuation of the RFF on 11 March 2011 including a variation increasing the facility to $3.77 million.

BTP - Receivers and managers appointed

41On 5 October 2011 the CBA appointed Deloitte as Receivers and Managers of BTP. At that time the balance of the CBA facility was in debit consisting entirely of fraudulent debtors.

42On 11 March 2011 you met with the Director of Restructuring Services within Deloitte, Ms Julie Thatcher. In that meeting you advised Ms Thatcher that BTP had ceased trading by December 2010. You admitted that all debtor balances on BTP’s ledger with the exception of those relating to Ballarat Timber Products had been falsely raised by you and were not collectable. You told Ms Thatcher that you had been doing this for several years; that you started with small amounts but that it soon became a pattern of behaviour.

43In that meeting you detailed the way in which you had engaged in this pattern of fraudulent conduct stating that the sales recorded against a customer would be a combination of genuine and false invoices. You told Ms Thatcher that you would use funds from a related entity to pay the fraudulent invoices, so the customer only received a statement with the correct invoices. You admitted you repeated this process each month.

44At a further meeting with Deloitte in November 2011 you admitted providing false invoices 'from time to time' between 2009 and 2011, stating this included false sales invoices prepared by you for the purpose of obtaining debtor financing from the bank. You also detailed the process whereby you would deposit bank cheques into the CBA debtor account to give the false impression that the debtors were paying the invoices.

45You told Deloitte that you had ceased milling wood in December 2010 but had continued to sell the remaining stock through January and February 2011. However, you confirmed that by December 2010 you had formed the view that BTP was no longer viable.

46On around 17 February 2012 the CBA wrote off the sum of approximately $3.826 million referrable to the BTP debtor clearing account.

Police investigation

47On 29 October 2012,  Deloitte gave Victoria Police your laptop, external hard-drive and the financial documents that remained after most of the company's financial accounts were destroyed by the flood damage to BTP’s Ballarat office.

48The first informant allocated to investigate the matter was re-assigned in October 2012. Another informant then assumed responsibility for the investigation in October 2014.

49It was not until 12 August 2015 that you were interviewed by police in relation to these matters. In accordance with your rights you provided no comment to the questions asked of you by police investigators.

50A forensic accountant analysed the available records and confirmed how you were able to facilitate the 'round robin' payment of fraudulent invoices between accounts. The forensic analysis ultimately confirmed the methodology you detailed to members of Deloitte at the meetings held in 2011.

51You were not charged with these offences until 20 December 2019, some eight years after you detailed your dishonest conduct to officers of Deloitte. At the committal hearing the informant explained the length of time passing between the interview and the charge date was largely due to the 'complexity of the investigation',[1] but also conceded that the matter was not given priority 'in relation to other matters [he] was doing'.[2] I return to the relevance of the significant delay in the prosecution of this matter later in my reasons.

[1] Transcript of Committal Hearing conducted on 29 April 2021, at page 92, line 1.

[2] Ibid, at page 92, line 15.

Procedural history

52I turn now to the procedural history of this matter. Following various committal mentions throughout 2020 a contested committal proceeded in April 2021 at which six witnesses were called. You were committed to stand trial on 27 April 2021.

53Following further directions hearings in this court a four-week trial was fixed for February 2023. The matter then resolved to a guilty plea on 25 January 2023 and the trial date was vacated.

54The plea was first listed before me on 12 April 2023. On that date, I was advised that the quantum of loss claimed by the prosecution was disputed and the matter was adjourned for the prosecution to obtain a further statement from the CBA detailing its calculated loss. A statement from Mr Jon Lee, Manager Group Credit Structuring Risk Management with the CBA, was then obtained on 9 May 2023.[3]

[3] Exhibit 2 on Plea, 19 December 2023.

55The plea was further adjourned on a number of occasions at the request of the parties and ultimately proceeded before me on 19 December 2023. On that date defence counsel advised that the quantum of loss was no longer disputed but that submissions would be made on your behalf about the relevance of the loss in assessing the gravity of your offending.

Nature and gravity of offending

56The offence of obtaining a financial advantage by deception is a serious one, marked by the maximum penalty of ten years’ imprisonment. In this case the gravity of your offending is borne out by a number of aggravating features.

57Firstly, this was not spontaneous offending or a momentary lapse of judgement. I accept that your offending arose in circumstances where BTP was struggling financially, placing you under significant stress. Your counsel explained that you were determined to keep BTP operating until either the market recovered or you were able to sell the business. However, neither eventuated, the market did not recover and you were unable to sell the business. Whilst this may explain the motivation behind your offending, you had ample opportunity to reflect on your dishonest conduct and cease, but you did not do so. Instead, you continued to engage in ongoing deceptions over a protracted period involving repeated acts of deception in the provision of false invoices for the purpose of obtaining an ongoing credit facility from the bank.

58The charges span a period of approximately nine months.  However, the charges arise in the context of the fraudulent transactions which enabled the charged conduct to occur spanning from November 2009 to February 2011.

59Secondly, your deceptions involved a degree of planning. You would enter false invoices into BTP’s accounting system, knowing that they were being accepted by the CBA as representing genuine sales. To maintain the fraud you would then withdraw funds from the RFF and use these funds to purchase bank cheques which you then deposited into the BTP clearing account in purported payment of the fraudulent invoices. While this was not overly sophisticated offending, it was deliberate and considered offending.

60By your conduct you concealed your deceptions from genuine debtors who were only invoiced for genuine sales. You falsely recorded goods as having been delivered. You engaged in these calculated deceptions repeatedly, mixing genuine and false invoices and in varying amounts to minimise the risk of detection. You caused dozens of 'round robin' transactions to occur in order to maintain the fraud. You did so for the purpose of representing to the CBA that BTP was financially viable so as to secure ongoing credit when you knew the business was struggling.

61Thirdly, the quantum of the credit facility you obtained by your deceptive conduct was significant, being $3.7 million in August 2010 and $3.77 million in March 2011. In addition you repeatedly proffered false invoices that were substantial ranging in the tens or hundreds of thousands of dollars.

62The quantum of offending is a significant, but not determinative, factor in sentencing for this type of offence.

63In this case, counsel appearing on your behalf argued that some weight should attach to the fact that the balance owing to the CBA credit facility as at 1 July 2009 was $3.503 million. It was submitted that in circumstances where the balance of the credit facility at the time of Deloitte’s appointment was $3.867 million, the quantum of the credit facility had only increased by approximately $364,000 and that this should be recognised in assessing the gravity of the offence.

64In my view, however, this argument ignores the deception that lies at the heart of the charged offences and must be rejected. The balance of $3.503 million owing on the RFF as at 1 July 2009 comprised only genuine BTP debtors. Under the terms of the RFF, credit based on 80 per cent of the genuine invoices was advanced by the CBA, but 100 per cent of the invoice was fully recoverable.

65However, by the time Deloitte was appointed in October 2011, the RFF balance of $3.867 million comprised only the fraudulent debtors fabricated by you. This amount could not be recovered because the financial base of the RFF had been eroded over time by your dishonest conduct. By 2011 no genuine invoices could be called upon. As a result the CBA sustained a financial loss of $3.826 million when it wrote off the debt.

66Your counsel also relied on the statement obtained from Mr Lee, the CBA Manager of Group Credit Restructuring,[4] to argue that regard should be had to the re-payments applied to another CBA loan when considering the issue of loss. Mr Lee’s statement makes clear that BTP held two loans with the CBA: one referable to a bills matured account with an outstanding balance of $3.77 million as at 17 June 2011 and the other being the RFF with the outstanding balance of $3.826 million.[5] The CBA held securities for its loans, including registered mortgages over two properties, one being a property in Curlewis which was sold in June 2011 for $900,000.[6] Net proceeds of that sale were then applied to the debt referrable to the bills matured account. On 16 December 2011 the receivers sold the other property at Fyansford for $3.26m.[7] The net proceeds were again applied to the bills matured account. The bank then wrote off the residual balance of approximately $609,000 in the bills matured account.[8] The BTP loan referrable to the bills matured account forms no part of these dishonesty charges.

[4]Ibid.

[5]         Ibid, [16].

[6] Ibid, [9].

[7] Ibid, [11].

[8] Ibid, [12].

67On your behalf it is argued that you played no role in the allocation of the funds recovered to the other loan facility, that this was done at the election of the CBA or the receivers. As such, it is submitted that the loss sustained by the CBA referrable to the RFF should take these recovered monies into account when assessing the CBA’s loss.

68Mr Lee was not called to give evidence about the allocation of these funds and there is no evidence before me about the basis of the distribution. However, in respect of the RFF, the credit facility was established to operate on the basis that it is inherently secured by genuine invoices that can be recovered. These invoices are the assets that are generally available to meet the outstanding debt from such a loan facility. It is undeniable that the fraudulent invoices eroded that asset base, giving rise to the CBA’s loss.  

69I accept and have regard to the fact that across the two loans, one legitimate and one fraudulent, significant funds were recovered by the CBA from the sale of the properties and assets held by BTP but it does not alter the fact that the bank sustained a significant loss as a result of your deceptions.

70I also accept that there is no evidence that you engaged in these deceptions out of greed or to fund an extravagant lifestyle. To the contrary, you continued to engage in this deceptive pattern of behaviour in the forlorn hope that you could turn the business around or sell it. This did not eventuate and you were declared bankrupt in 2013.

71Nonetheless, the deceptive conduct over the period of your offending was objectively serious. Your moral culpability for this offending is significant, however, my assessment is also informed by your personal circumstances to which I now turn.

Personal circumstances

72You are the eldest of three children, all of whom grew up in Yarra Glen. Your father is now aged 81 and your mother is 78. Your father worked for Melbourne Metropolitan Water until suffering a back injury at work when he was 33 years old, requiring several surgeries. He was never able to work again but received compensation that was invested into properties in the Healesville area. After your father’s accident your mother cared for the family before returning to work as a nurse. She has now been retired for the past eight years.

73You attended the local high school before joining the workforce after completing Year 11.

74As discussed, you soon began working in the timber industry, opening your own timber yard at the age of 20 before purchasing a 50 per cent share in a sawmill treatment plant in Monbulk which dissolved three years later due to the recession and you lost a considerable amount of money.

75You met you wife, Niki Brudenell, around the time you were operating the treatment plant in Monbulk. She fell pregnant with your first child after six months and you married shortly thereafter when you were 24 years old. Together you have four children who are all now adults and who remain supportive of you.  

76By the time you were 30 you had established your own timber treatment plant in Geelong. You purchased acreage in Fyansford where you ran the treatment plant and sales yard. You operated this business under the trading name 'Australian Treated Pine' for nine years.

77In 2006 you and the Mathesons borrowed a substantial amount of money from the CBA to establish an operational sawmill treatment plant in Ballarat. BTP then commenced its operations.

78As stated, in 2009 BTP sustained a substantial downturn in its profitability due to the strength of the US dollar. BTP was unable to match international pricing and began to sell timber at a loss.

79You wanted to sell the business at this time but report that the Mathesons did not share this view. Instead you and the Mathesons entered into share sale and purchase agreement and you assumed sole responsibility for the business and took over the CBA loan facility debt.

80It was at this time you began to generate the false invoices to demonstrate that the business was viable. You then used bank cheques obtained from the funds available, depositing these in the CBA debtor clearing account, in purported payment of the false invoices.

81Further challenging circumstances placed you under additional stress during this period. In December 2010 flood damage caused the loss of the majority of BTP’s financial records. Then, in January 2011 the timber mill and some machinery were damaged by vandalism. As a result BTP ceased all timber milling and sold only its remaining stock through January and February 2011.

82In late December 2020, you met with the CBA together with your accountant, advising you had no capacity to repay the loan but intended to work out a solution. You sold the family property for $900,000 with the proceeds provided to the CBA in part-satisfaction of credit owed to the bank. Another property remained on the market.

83By the time Deloitte was appointed the RFF balance was $3.867 million  in debit.

84You were placed into bankruptcy for a period of six years in 2013. You were unable to repay the debt to the CBA and were left humiliated by the experience. It was at this point that your marriage collapsed under the strain, after 27 years. You relocated to the Gold Coast and were able to gain employment with an export business.

85Your status as a bankrupt ended in 2019. You then embarked upon a different business venture, opening a Vietnamese restaurant in Surfers Paradise with a business partner which has since expanded to two other locations. The business now employs 30 people.

86Your business partner, Tai Tan Nguyen, has written a reference on your behalf.[9] He states that you both worked hard to establish the business and have developed a close working relationship. He says that you have been generous in the assistance you have given his family, both when they relocated to Surfers Paradise and in organising schooling for his young son. Mr Nguyen manages the day-to-day operations of the business and you are responsible for the finances and business development. You propose to transition to a franchise operation with the aim of establishing 35 restaurants. Mr Nguyen says he is concerned about the viability of the business if you are not around.

[9]Exhibit 1 on Plea – Reference of Tai Tan Nguyen dated 1 April 2023

Matters in mitigation

87Having discussed the objective gravity of your offending, I turn now to address the various matters that operate in mitigation of your sentence.

88First and foremost, you pleaded guilty to both charges on 25 January 2023. Although yours was not an early plea there is still considerable utility in your plea. This was a large case and by pleading guilty you saved the court and the community the time and resources associated with a lengthy trial. Additionally, at the time you entered your plea there remained a backlog of trials in the wake of the pandemic. A guilty plea entered at that time has heightened utility.[10] You are entitled to a demonstrable amelioration of your sentence in these circumstances.

[10] Worboyes v The Queen [2021] VSCA 169

89There is remorse inherent in your guilty plea but beyond that fact I also have regard to the comprehensive admissions you made to the receivers at Deloitte regarding your fraudulent activities prior to any police investigation. You have long acknowledged your wrongdoing and your co-operation with the receivers and the admissions you made at that time, are a further reflection of your remorse.

90On your behalf it was further argued that a Doran discount applies to the admissions you made to Deloitte in 2011.[11] The forensic financial analysis undertaken by investigators ultimately confirmed the means by which you engaged in the 'round robin' deceptions, as you described them, to Deloitte.

[11]R v Doran [2005] VSCA 271

91I fully accept that your extensive voluntary admissions made prior to the police investigation reduce the need for the sentence to deter you. Further, that as an indication of remorse the fact you made the admissions increases your prospects of successful rehabilitation. You are entitled to have this taken into account. However, it could not be said that without your voluntary admissions the offending would never have come to light, it was inevitable that the receivers would discover that the credit facility was comprised entirely of fraudulent transactions by February 2011.

92Nonetheless, you are entitled to, and will receive, a significant sentencing discount in light of your guilty plea, co-operation and demonstrated remorse.

93Secondly, at the age of 61 you have no prior criminal history and have otherwise lived a law-abiding life, characterised by a strong work ethic and providing for your family.

94In this context a number of character references were tendered on your behalf from your former wife, friends and work colleagues.[12] Those who have known you a long time speak of you as a respected and dependable colleague and friend; someone who is caring and compassionate to others and contributes to the community more broadly. The references speak of the strong bond you have with your children and their ongoing support.

[12] Exhibit 1 on Plea – Bundle of Character References, 19 December 2023.

95Your former wife, Niki Brudenell, describes you as a good person who has given much of your time to clubs, fundraisers and charities over the years.[13] In her character reference Ms Brudenell speaks frankly about being apprehensive when asked to write a testimonial on your behalf but says she did so because she was uniquely positioned to reflect on the impact of the work stress you experienced over those years, commenting that you were never one to seek help but bore the pressure alone.[14] The authors of the character references uniformly express the opinion that your fraudulent acts were out of character, observing that you are otherwise regarded as an honest and altruistic individual.

[13] Exhibit 1 one Plea – Undated character reference of Niki Brudenell, 19 December 2023.

[14] Ibid.

96While the unqualified references to your honesty and integrity in some of this material sits at odds with your dishonest conduct, the absence of any offending over the past 13 years lends support to my conclusion that this offending was out of character.

97You are entitled to have your previous good character reflected in mitigation of your sentence.

98Finally, the extraordinary delay associated with these proceedings is a highly relevant sentencing consideration. The mitigating effect of this delay, none of which was attributable to you, was appropriately conceded by the prosecution.

99As stated, you made full admissions to your fraudulent conduct when interviewed by Deloitte in October and November 2011. Although material was provided to police by Deloitte in October 2011 you were not interviewed by police until almost four years later, in August 2015. You were not charged until 2019, some eight years after you disclosed the nature and method of your offending to Deloitte. While some of the delay is associated with the forensic analysis undertaken by Victoria Police, the extent of the delay could not be explained by the prosecution.

100Delay can be relevant to sentence in two ways.[15]

[15] R v Merrett, Piggott & Ferrari [2007] VSCA 1, at [35]-[36]

101Firstly, from the time your offending was first discovered you have been left in a state of 'uncertain suspense' as to your fate. This uncertainty is a form of punishment in itself. I accept that having this very serious matter hanging over your head for so many years, not knowing what might happen, would inevitably be a source of stress and anxiety for you and moderates the sentence I will impose.

102Secondly, delay affords an offender an opportunity to demonstrate actual rehabilitation. In this case your offending ceased in early 2011. Since this time, you have not offended. Having come out of bankruptcy in 2019 you have continued to work hard, establishing a new business enterprise in Queensland in addition to lending support to create a local sporting club in the Inverleigh area.

103Thirteen years is a long time over which you have taken the opportunity to demonstrate that you have reformed. I find that your offending was aberrant behaviour for a man with no prior criminal history who is otherwise of good standing in the community. I assess that you are unlikely to reoffend. Given your excellent prospects of rehabilitation and the salutatory experience of your six years in bankruptcy, I consider that specific deterrence has little, if any, role to play in sentencing you.

Other sentencing considerations

104While deception offences vary widely in seriousness, offending that involves large amounts over an extended period of time normally attracts a significant sentence of imprisonment. Viewed objectively, your offending falls into this category. Through your deceptions, over a nine-month period you obtained a financial advantage from the CBA of $3.7 million in August 2010 and an extension of the credit facility in March 2011 of $3.77 million. The financial loss sustained by the bank was considerable. In cases such as this paramount consideration must be given to the sentencing principles of general deterrence and denunciation. Others must be deterred from dishonest offending of this kind by the sentence I impose.

105The prosecution submits that these sentencing considerations require the imposition of an immediate term of imprisonment with a non-parole period to be fixed.

106The defence submits that the prominence normally attached to general deterrence and denunciation is to be moderated due to the inordinate delay associated with the prosecution of this case. In submissions that highlighted your rehabilitation and the punitive effect of the delay, it was argued that the powerful mitigating factors relied upon could properly be reflected in a wholly suspended sentence of imprisonment. The defence acknowledge that such a sentencing disposition is available only if the sentence to be imposed does not exceed three years' imprisonment.[16]

[16]Section 27(2) of the Sentencing (Suspended Sentences) Act 2006.

107On your behalf, I was referred to a number of Court of Appeal decisions where sentences for the offence of obtaining financial advantage by deception have been considered. It was conceded that there are no truly comparable cases to yours. Current sentencing practices are one of many sentencing considerations, however, they neither dictate nor control the sentence to be imposed. [17] They are no more than a guide. Ultimately, each case falls to be decided on its own facts and circumstances.

[17]DPP v Dalgliesh [2017] HCA 41

108I have considered the cases to which I was referred. In broad terms these cases fall into two categories. The first category is where the quantum of the financial benefit obtained is much lower, in the range of $200,000 to $500,000. In those cases, sentences below three years have been imposed even where the offending involved a breach of trust (an aggravating circumstance that does not apply here).[18] In one case, that of Mao & Anor,[19] the quantum of the deception was considerably higher, being loans totalling $9 million but in that case the loan repayment had been met and no loss suffered. The second category of cases are more egregious, involving deceptions where the quantum is in the millions but the offending involved multiple charges (and multiple victims), course of conduct charges, significant financial loss and significant victim impact.[20] Your case does not have many of these aggravating features. I do not consider your offending falls comfortably within either end of the spectrum of cases to which I was referred.

[18]DPP v Caulfield [2019] VSCA 131; DPP v Munn [2019] VSCA 267; DPP v Blackberry [2019] VSCA 269; DPP v Leimonitis [2018] VSCA 198; Mendoza-Cortez v The Queen  [2016] VSCA 302;

[19]Mao & Anor v The King [2022] VSCA 211

[20]Porcaro v The Queen [2015] VSCA 244; The Queen v Kinnear [2009] VSCA 104; Kenyeres v The King [2023] VSCA 25; Di Coccio v The Queen [2013] VSCA 74; Poursanidis v The Queen [2016] VSCA 164; DPP v Penny [2012] VSCA 203; Shiel v The Queen [2017] VSCA 359.

109Taking into account all relevant sentencing considerations, I have concluded that a sentence of imprisonment is the only available sentencing disposition for this offending. I also consider that a sentence exceeding three years' imprisonment is warranted given the quantum and duration of your repeated fraudulent conduct. However, I accept your counsel's submission that there are powerful mitigating features in this case, most particularly the significant delay to which I have referred, your guilty plea and your positive rehabilitation prospects.

110Your personal and mitigating circumstances are relevant to my determination of the individual sentences to be imposed on both charges but are especially relevant to the fixing of a non-parole period. In this case, I consider the combination of mitigating factors and the weight I attach to delay, in particular, warrants the imposition of a significantly lower non-parole period than I would otherwise have considered appropriate. To be clear, I have given weight to the inordinate delay and other mitigating factors in imposing a head sentence and a non-parole period that I do not consider would otherwise be appropriate.

111Finally, I have had regard to the sentencing principle of totality in sentencing you for both offences, noting that the two charges arise from your ongoing dishonest conduct in proffering false debtor invoices for the purpose of obtaining an ongoing credit facility, one in August 2010 and the other in March 2011.  I have taken this into account in determining the appropriate level of cumulation as between the two charges.

Sentence

112Balancing the matters to which I have referred while having regard to the maximum penalty for the offence of obtaining financial advantage by deception, I now sentence you as follows:

113Mr Brudenell, could you please stand.

114On Charge 1, you are convicted and sentenced to three years, six months' imprisonment. This is the base sentence.

115On Charge 2, you are convicted and sentenced to three years, six months' imprisonment.

116I direct that six months of the sentence imposed on Charge 2 be served cumulatively upon the sentence I impose on Charge 1.

117This gives a total effective sentence of four years' imprisonment.

118I fix a non-parole period of 12 months' imprisonment. This is the minimum period you must serve before you become eligible for parole.

119I make the forfeiture order sought by the prosecution, noting that it is not opposed.

120Finally, I am required to indicate the sentence I would have imposed had you not pleaded guilty. Pursuant to s6AAA of the Sentencing Act 1991, I indicate that I would have imposed a sentence of five years' imprisonment with a non-parole period of two years, six months' imprisonment but for your guilty plea.