Director of Public Prosecutions v Dalton

[2019] VCC 1507

IN THE COUNTY COURT OF VICTORIA Revised
Not Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR-17-02276

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

v

ALLAN DALTON

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JUDGE:	HIS HONOUR JUDGE HIGHAM
WHERE HELD:	Melbourne
DATE OF HEARING:	16 September 2019, 9 July 2019, 22 May 2019
DATE OF SENTENCE:	16 September 2019
CASE MAY BE CITED AS:	DPP v Dalton
MEDIUM NEUTRAL CITATION:	[2019] VCC 1507

REASONS FOR SENTENCE
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Subject:  CRIMINAL LAW

Catchwords:  Sentence - dishonestly obtain financial advantage by deception - attempting to dishonestly obtain financial advantage by deception.

Legislation Cited: s 134.2(1) Criminal Code (Cth), s 11.1(1) Criminal Code (Cth)
Cases Cited:

Sentence:Total effective sentence of 6 years 9 months imprisonment, with non-parole period of 4 years and 9 months.

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr J. Robins	Solicitor for Public Prosecutions
For the Accused	Mr D. Sala	Emma Turnbull Lawyers

HIS HONOUR: 

1Allan Rae Dalton. On 25 February 2019, following a trial, you were found guilty by a jury of 16 charges of dishonestly obtaining financial advantage by deception from the Commonwealth, and one charge of attempting to dishonestly obtain financial advantage by deception from the Commonwealth.  The maximum penalty in respect of each charge is a term of imprisonment of 10 years.

2Tendered on the plea and marked as Exhibit 1 was the trial summary of prosecution opening.  I annex a copy of that document to these sentencing reasons.  The circumstances of your offending, briefly stated, are as follows:

3Greenhills Grange Property Limited was a company established in January 2006 to develop a residential development site in Greensborough.  The project involved the building of 25 townhouses.  Various individual companies were shareholders of Greenhills, each bringing to the enterprise their own expertise.  Helen and Aiden Gifkins took on the financial risk of the venture, although they had no prior experience of development projects on such a scale.

4Their business partners included builders who had relevant experience.  The project was funded by Suncorp-Metway Ltd in the sum of $3.9m, secured by a mortgage over the property.  The Gifkins provided a 10% deposit from their own resources.  They and the other business partners acted as guarantors for the Suncorp loan.  The settlement date was subject to the usual conditions, such as infrastructure and builder's terms, and was not to occur until around September or October 2007.

5The development encountered difficulties and by early 2009, the time and cost overrun was such that intervention was required in order to save the project.  In around July 2009 an estate agent by the name of Alan Ward, who had been engaged by Greenhills to sell the townhouses that were being constructed, became aware that the project had run into financial difficulties.  In consequence, he spoke to a number of people about becoming involved in the project.  You were one of those.  Ward provided you with plans of the development and estimated costs to completion.  You were then introduced to the Gifkins as a person who might be able to save the project and get it completed.

6At a meeting in September 2009, you represented to the parties that you were experienced in both property development and accounting.  Acting upon your representations, and no doubt influenced in part by financial pressure, the Gifkins agreed that you and your apparent business partner, Darryl Burns, should take on a management role in the project.  Over the ensuing weeks you secured the resignation or standing down from the project of other directors, in part by emphasising the need to avoid stamp duty. 

7Thus, by representing yourself as a man who could make the project happen, you were permitted to take over the entire management of the project to completion.  You undertook to bear the risk of any cost overruns, thus relieving the Gifkins of that financial burden.  In return, you would be entitled to any and all profits once the units were sold. 

8Suncorp-Metway meanwhile had sought to protect their investment, by the appointment of a firm called Charter Keck Cramer (CKC) to both assess the cost of completion of development and provide a current valuation of the property.  Following the obtaining of a report from CKC, Suncorp agreed to continue financing the project, but insisted upon a number of conditions being met by the directors. 

9These conditions included the appointment of both a project manager and a quantity surveyor approved by Suncorp, who would then provide a monthly progress report of work done on the Greenhills site, costs relating to outstanding work, and invoices authorised for payment by Suncorp for that progress report period.  There would be weekly meetings reviewing expenditure and reconciling invoices.  Presented invoices would be paid by Suncorp upon authorisation by the CKC project manager or quantity surveyor. 

10During one of these weekly meetings, you told Aiden Gifkins that you had an accountant who would be able to handle the Greenhills BAS accounts at no cost.  That accountant was Kenneth Tobias of Rigby Tobias Associates (RTA), whom you had met through Burns.  Aiden Gifkins readily accepted this offer of assistance.  He then provided you with the documents faxed to him by Suncorp, listing the approved drawdowns and payments to suppliers, for the purpose of preparation of the BAS statements. 

11Thus, from October 2009 you had assumed responsibility for all Greenhills bookkeeping and for the lodging of the company BAS statements.  You provided, either in person or by email to Tobias or another member of his staff, the figures for the BAS statement.  Those figures would then be used to prepare the relevant statement, which would be electronically lodged through the tax agent portal.  The first such statement was lodged by RTA on 25 November 2009, for the month of October 2009.  Monthly claims were made thereafter.  GST refunds resulting from the submitted claims were remitted by the ATO into the RTA trust account and then disbursed by RTA, according to the instructions that you had provided to Tobias.

12At no time did you ever provide Tobias with any supporting documentation, despite Tobias' asserted frequent requests for invoices.  Nonetheless, Tobias continued to lodge the business activity statements and continued to disburse the refunds according to your instructions.  I note that Tobias, who gave evidence at your trial, no longer practises as an accountant.  You deliberately and falsely overstated the expenditure of Greenhills, thereby obtaining a greater GST refund from the ATO than that which was due. 

13The offending of which you were convicted, relates to the lodgement of 16 false business activity statements for the period from March 2010 to June 2011, and consequent payment of refunds by the ATO (Charges 1–16) and the submission of a false business activity statement for the period July 2011, in respect of which no refund was issued (Charge 17). 

14The ever-compliant Tobias transferred the refunds at your direction into accounts owned or controlled by you: a Commonwealth Bank passbook account in your name; a Bank of Queensland Greenhills Grange Property Limited account opened on 26 June 2010, using false documents and listing Burns as the sole director and you as the signatory; or into a family trust account opened in May 2011, of which the signatories were you and your son.  The total amount dishonestly obtained from the Commonwealth was $479,714.84.  All GST refunds should have gone to Suncorp. 

15In November 2010 a cheque payment for $104,000 was deposited by Tobias into the Suncorp loan account.  $50,000 was paid by you to Helen Gifkins, in part repayment of a loan made by her to you, for the purchase of an excavator.  The rest of the moneys were used by you in satisfaction it seems, of your personal expenditure.  The Greenhills project fell into receivership and in September 2011 the ATO commenced an audit of the company. 

16On 14 October 2011, Mr Ernest Payet from the ATO met with you and Mr Tobias.  During the course of that meeting, you represented that the figures that you had provided to Tobias, had in turn been provided to you by others.  You sought in particular to lay blame on Mr Brian Poljakovic, one of the earlier shareholders in the project.

17I turn now to your personal circumstances.  You were born in Melbourne on 12 January 1954 and are now 65 years of age and were aged between 55 and 57 at the time of this offending.  Your father was a wool broker who travelled constantly for work and your mother devoted herself to caring for you and your two older sisters.  Your childhood was free from abuse or serious conflict and you now look back on it with affection. 

18After completing Year 12 you commenced a course at Pharmacy College, leaving after one year.  You then worked as a trainee accountant and between 1973 and 1990 worked in accountancy roles for various businesses.  In more recent years you have mostly been involved in property development.  In 1990 you began working in the construction industry for a demolition firm. 

19You have had two long-term relationships, marrying at the age of 22, which union produced two sons now aged 42 and 39 years of age.  You divorced in 1990 and have been with your current partner for around 12 years.  In December 2007 you suffered a heart attack and you have an ongoing cardiac condition.  You suffer from Type 2 diabetes, skin cancer on your left ear and a further chronic skin condition.  The basal cancer requires surgery which is scheduled for the near future.

20Prior to your sentence, you disclosed to your counsel that you have been the victim of childhood sexual abuse at the hands of a teacher at Scotch College.  I adjourned matters to enable a report to be prepared and a report from Mr Ian Mackinnon, consultant psychologist dated 7 September 2019 was tendered on the adjourned plea as Exhibit 7-AD.  Regarding your self-report of abuse, Mr Mackinnon's clinical summary was that in his opinion you were 'probably suffering with a mild / residual Post-Traumatic Stress Disorder'. 

21Mr Mackinnon continued that he was unable to propose this diagnostic opinion with a high degree of confidence, as it was largely based on your self-report and absent any corroborating evidence, and further, you had never reported the abuse to police or to other authorities.  Noting this, Mr Mackinnon continued, ‘I am persuaded “on the balance of probability” as Mr Dalton was clearly emotionally overcome and wept openly as he attempted to recount the essential details of the abuse…'. 

22Mr Mackinnon then stated the symptoms that are associated with post- traumatic stress disorder, although on my reading of his report, he did not identify which of the list of diagnostic symptoms had application or were manifest in your case.  Mr Mackinnon did not posit any, or any sufficient connection between your PTSD and your offending.  He concluded:[1]

In the absence of serious engagement in psychological therapy, Mr Dalton's PTSD (and EPC)[2] are unlikely to change for the better, if indeed they are truly manifested in him, and he is likely to continue to reoffend. 

[1] Footnotes not present in original quotation.

[2] enduring personality change.

23It was not suggested that such treatment would not be provided within a custodial setting.  He continued:

Based on the history provided by Mr Dalton, should he face a term of imprisonment for the current matters he will probably continue to cope well enough with the prison environment (although I note his physical health issues are serious and require ongoing treatment).

24You have a prior criminal history going back to 1978, in which year you received a sentence of four years imprisonment for offences of theft and obtaining financial advantage by deception.  Through the 1980s and 90s there were further offences and many court appearances for offences of dishonesty, comprising, amongst others, theft, obtaining a financial advantage by deception and forgery.  You have been dealt with by means of further and significant terms of imprisonment and by community supervision orders, which orders you have breached. 

25Whilst you are not of course to be punished again for matters for which you have already been dealt with by the courts, your prior history is of direct relevance to my assessment of your prospects for rehabilitation, to the need for specific deterrence, and the need for the community's protection from you.  In this latter regard, I note that in May 2012 you were convicted of going equipped to cheat and theft, and on a separate occasion you were convicted of obtaining property by deception, attempted obtaining property by deception, and dealing with property suspected of being the proceeds of crime.

26Of particular note, is that in September 2014 you were sentenced in this court by his Honour Judge Tinney following a trial, to a term of imprisonment of two years and three months for your part in a failed joint venture development of a 30-acre block of land in Truganina, set up by you in 2011.  The theft related to the appropriation by you of moneys paid into trust accounts in considerations of options arising under the development project.  It would seem on any view, that the criminal enterprise for which you were sentenced in September 2014, began very shortly after the money had dried up from the criminal enterprise for which you fall to be sentenced today.

27You were further sentenced in December 2014 to a term of imprisonment of 18 months for another offence of theft and using a false document.  I repeat, whilst you are not of course to be punished again for matters for which you have already been dealt with, your criminal history to date is of direct relevance to my assessment of your prospects for rehabilitation and the need for specific deterrence and the need to protect the community from you.

28Mr Pirrie, learned counsel on behalf of the prosecution submitted that this was serious offending.  In support of that submission he pointed to the amount obtained, $479,714.84 and to the period of 17 months over which your offending took place.  He characterised your offending as both sophisticated and cunning.  He rightly emphasised the importance of general deterrence and denunciation for offences committed against the revenue, and the need for specific deterrence in light of your criminal history to date.  He submitted the objective gravity of your offending was such as to call for a significant and substantial term of imprisonment with a period on parole.

29On your behalf, learned counsel, Mr Sala reminded me that the hallmarks of gravity of such offending are to be found in the period of time over which the offending was committed, the value of the property dishonestly obtained, and the role of the particular defendant.  He urged upon me consideration of your age and consideration of your ill health.  He further submitted that by its very nature, your offending was bound eventually to be detected.  It continued up to detection and not beyond.  He also submitted that your offending was absent that predatory behaviour so often encountered by the Court, where individuals often in their later years, are effectively consigned to penury by the dishonest practices of those who might prey upon the gullible.

30He pointed to the delay between the offending and the eventual trial and sentence.  However, no evidence was placed in front of me of any adverse impact upon you of such delay, nor in light of your subsequent criminal matters could it be contended that you had used the intervening period to rehabilitate yourself.  He urged me to accept that your initial involvement in the development project was benign and well intentioned, and that only later did you see the prospect for self- enrichment.  He accepted that your attempts to blame others went directly to the absence of remorse, rather than to aggravating the offending and I accept that submission.

31He submitted that the trial was run on a discreet and settled basis, with much of the evidence being agreed, thereby shortening what might have been a very long trial and saving additional costs to the public purse.  He urged me to accept the narrative of sexual abuse recorded in the report of Mr Mackinnon, and he finally submitted that prison would be more burdensome for you.

32Allan Dalton, you practiced a fraud upon the revenue, which has been rightly characterised by the prosecution as both sophisticated and cunning.  You had inserted yourself into a development project by representing that you had proven abilities in the field.  As such, the Gifkins, who were financially exposed, readily accepted the purported professional assistance that you offered.  In fact, it was a sham.  On the evidence in front of me, I cannot find to the requisite standard that your intention from the outset of your involvement was one of dishonest self- enrichment. 

33However, I am satisfied that having created for yourself a role in the lodgement of the business activity statements, you saw an opportunity to dishonestly profit from the fact that no one involved in the project was cross- checking the figures lodged.  You created accounts using the identities of others, and false if not forged documents, to provide a veneer of legitimacy to your dishonesty.  The accounts were, I find, created by you for the express purpose of the receipt of moneys dishonestly so obtained.  By email, telephone or dropping into the offices for a chat, you provided figures for the business activity statement. 

34You were in addition, confident that you could charm the aged and I am sure gullible Mr Tobias, so as to avoid having to show him any documentation in support of the provided figures.  I have already noted that Mr Tobias no longer practices as an accountant.  In this you were successful and in consequence you dishonestly obtained $479,714.84.  You were the sole architect and the sole beneficiary of the scheme, which was entirely of your own devising.  Once you were aware that the fraud had been detected, you sought to blame others for your wrongdoing. 

35At interview with the ATO audit team, you blamed Mr Brian Poljakovic, an earlier shareholder and partner in the enterprise, who was moved aside in part by your influence.  During the trial you sought to shift blame onto your erstwhile partner, Darryl Burns, maintaining that it was he, rather than Mr Poljakovic who had provided you with the information.  You presented yourself as the innocent dupe of others;  that you were deceived, just as had been the ATO.  It seems that neither ties of blood nor of longstanding friendship could stand in the way of your practised, almost professional, dishonesty. 

36Now I make clear, Mr Dalton, you are not to be punished for exercising your right to a trial, and for the manner of its conduct.  Nor do I punish you for absconding during the course of the trial.  However, I find that you have shown not one shred of remorse throughout the entire proceedings.  There is thus an absence of such mitigation as might otherwise have been available to you.

37You are in my view, entrenched in your dishonesty.  This is shown by the fact that within a short time of the conclusion of this dishonest enterprise, you embarked upon another.  In my view, your prospects of rehabilitation are guarded at the very best.  The community needs protection from you and from your dishonest endeavours.  Mr Dalton, a fraud on the revenue is a crime against the community at large.  It is a basic and fundamental duty of all citizens to pay their tax liabilities.  This is a fundamental part of the social contract of being a member of the community. 

38Tax revenues are used to make provision in essential areas such as health, education and transport infrastructure for those who do not have the means to make such provision for themselves.  It is a basic contract which binds us all and that is why any fraud upon that revenue is a crime against our community.  Because the tax system within Australia relies heavily upon self-assessment and self-report of the individual taxpayer’s affairs, it is a system that is built upon trust.  And as the scheme which you devised made clear, it is a system which is open to abuse. 

39Tax evasion is not a game, nor is it a victimless crime.  It is rather a form of corruption which debases the community at large and this principle applies to an even greater extent to those such as you, who steal from the common purse by practicing a deceit upon it. 

40Mr Dalton, in sentencing you I must have regard to a range of different factors.  I must give effect to the principle of general deterrence, that is to deter others from behaving as you did, and I must give effect to the principle of specific deterrence, that is to deter you from any repeat of such offending.  I must express the community's denunciation of your conduct.  I must give consideration to the need to protect the community from you.  I must have regard to the statutory maximum penalties for the offences to which you have pleaded guilty.  And I must have regard to current sentencing practices.  I must have regard to your prospects for rehabilitation as I find them to be. 

41In short, I must try to balance your personal circumstances with the circumstances of your offending, and I am required by law to pass no longer a sentence than is necessary.  Principles of general and specific deterrence, denunciation and protection of the community are primary sentencing considerations in your case.  I have had regard to the matters urged upon me by your counsel, to your age, and to your health concerns.  I give such weight as I can to the matters raised in Mr Mackinnon's report, however I find they do not enliven any proposition of the well-known case of Verdins.

42As your counsel conceded and as you must be only too well aware, the only appropriate disposition is a lengthy and significant term of imprisonment.  If you would be so good as to stand please, Mr Dalton?

43On Charges 1 to 17, you are sentenced to an aggregate term of imprisonment of six years and nine months.  I declare that you must serve a period of four years and nine months before you become eligible for parole.

44Pursuant to s.18(4), I declare that you have served 152 days of the sentence that I have passed upon you and direct that this be entered into the records of the court.  Now Mr Sala, custody management issues, I note that there is hopefully surgical intervention that is scheduled quite soon, but that obviously is something which is in the ‑ ‑ ‑

45MR SALA:  One would say they are under control.  One would say they are under control, Your Honour.

46HIS HONOUR:  ‑ ‑ ‑ they are all being addressed?

47MR SALA:  Yes, Your Honour.

48HIS HONOUR:  All right then.  Thank you very much.

49MR SALA:  Your Honour, before Your Honour rises, I think my learned friend has an application.

50MR ROBINS:  Just with regards to the reparation order, Your Honour.

51HIS HONOUR:  Now, are we at risk of setting Mr Dalton up to fail?  Is it a pure - I mean, I will do what I am told.

52MR ROBINS:  No, I do not think so, Your Honour.

53HIS HONOUR:  Because I am only the judge, but ‑ ‑ ‑

54MR ROBINS:  It is not a matter that, how that payment is made is an issue between Mr Dalton and the tax office, the Commonwealth.

55HIS HONOUR:  Yes.

56MR ROBINS:  So, whether that, that is, that has been assuaged.

57HIS HONOUR:  I mean reparation orders usually follow, do they not?

58MR ROBINS:  They do.  So how that agreement takes place is a matter for them.  The order itself is a separate issue but we do seek that order.

59HIS HONOUR:  Mr Robins, I will sign that in Chambers.

60MR ROBINS:  As Your Honour pleases.

61HIS HONOUR:  All right.  Thank you, Mr Dalton.  You can go with the officer.

62(At this stage the accused left the Court.)

63HIS HONOUR:  So, thank you, Mr Robins.  Thank you, Mr Sala.  We concluded in fairly decent time.  Mr Robins, do tell Mr Pirrie he was missed.

64MR ROBINS:  I will do, Your Honour.

65HIS HONOUR:  All right.  Thank you for your assistance, particularly you, Mr Robins for all the assistance and preparation you have brought to bear during the course of the trial.

66MR ROBINS:  Thank you, Your Honour.  I appreciate that.

67HIS HONOUR:  All right.  Have a good evening to both of you.

68MR ROBINS:  Thank you.

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