Director of Public Prosecutions v Downes

[2021] VCC 572

IN THE COUNTY COURT OF VICTORIA

Revised

Not Restricted

Suitable for Publication

AT MELBOURNE

CRIMINAL JURISDICTION

CR 18-02471

DIRECTOR OF PUBLIC PROSECUTIONS

v

JOHN DOWNES and BERNARD DOWNES

---

JUDGE:	HIS HONOUR JUDGE CAHILL
WHERE HELD:	Melbourne
DATE OF HEARING:
DATE OF SENTENCE:	10 May 2021
CASE MAY BE CITED AS:	DPP v Downes
MEDIUM NEUTRAL CITATION:	[2021] VCC 572

REASONS FOR SENTENCE

---

Subject: Fraudulently induce persons to invest monies (s 191 of the Crimes Act)

Catchwords: $395,000 defrauded to purchase goats in 2010 – failed investment – reckless false promise and dishonest concealment of facts – serious offending – significant financial and psychological harm to husband and wife investors – offenders are brothers – no criminal record – utilitarian value of guilty plea – unfairness of 10 year delay in prosecution

Legislation Cited:

Cases Cited:

Sentence:     John Downes – 15 months imprisonment wholly suspended for 2 years

Bernard Downes – 12 months imprisonment wholly suspended for 2 years

---

APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr M. Cookson
For Accused John Downes	Mr S. Anger
For Accused Bernard Downes	Mr C. Thomson

HIS HONOUR:

1John Downes and Bernard Downes, you have each pleaded guilty to two charges of fraudulently inducing persons to invest money contrary to s.191 of the Crimes Act.  The circumstances of your offending are set out in the summary of prosecution opening dated 10 May 2021.

2You are brothers and were farming together at Litchfield near Donald.  In 2008, you had entered into goat farming ventures with Malaysian meat importers.  They were unsuccessful.  You owed more than $800,000 to Malaysian goat traders and more than $900,000 in your combined loan accounts.  Your accounts were overdrawn, and you were unable to pay your business expenses. 

3Between November 2009 and January 2010, you recklessly made false promises to Michael and Lexis Pichler to use their money to buy goats, fatten them, sell them for a profit, and re-pay them with interest.  You also dishonestly concealed from the Pichler's your strained financial circumstances and prior failed goat farming schemes, which were facts material to their decision whether to invest monies with you.

4Between 16 November 2009 and 7 January 2010, in four separate agreements, the Pichers invested $395,000 which was entirely lost to them.  In the first three agreements, the two of you fraudulently induced Michael Pichler and Lexis Pichler to invest $330,000 in goats.  In the fourth agreement, you,
John Downes, fraudulently induced Michael Pichler to invest a further sum of $65,000 in goats. 

5From March until July 2010, Mr Pichler had many discussions, mainly with you, John Downes, to try to recover their investment.  He was given many excuses.  On 18 August 2010, he took his own life.  While the cause or causes of his suicide are not certain, as I have read from Mrs Pichler's victim impact statement, Exhibit B, the consequences to them from your fraud were profound.

6Police commenced their investigation in May 2011.  In July 2011, they interviewed each of you.  You said some goats were purchased, but through the drought, things were tight and the Pichlers had not been repaid their money.

7The proceedings were listed for trial on 10 February 2020.  Today, 10 May 2021, the two of you were arraigned and pleaded guilty to the charges on the indictment. 

8Neither of you has a criminal record.

9You, John Downes, were born on 27 July 1958.  You are now aged 62 years.  You were 50 when you offended. 

10Bernard Downes, you were born on 21 August 1966 and are now aged
55 years.  You were 44 years old when you offended.

11You were both born and raised in Donald where your parents ran a large sheep and wheat farm.  John Downes, you are the oldest of five children, and Bernard Downes, you are the youngest.  You both describe a good childhood on the family farm.

12John Downes, after you completed Year 11, you took a job at a local bank.  When you were 18 you transferred to a Melbourne branch.  You remained with the bank for another three years and then obtained a position with a building society.  In 1998 when your father died, you returned to work on the family farm.  You had married in 1983.  You have four children.  In 2007, you separated from your wife.  You acknowledge you had put the farm ahead of your wife and children and believe this contributed to the breakdown of your marriage.  After your separation you went to live with your mother at Donald.

13The farm was lost to creditors in 2016.  You then farmed in Mildura for three years, Western Australia for three months, and for the last few years, you have been managing farms at Sunbury and Bulla. 

14You have had no significant physical or mental health issues.

15Warren Simmonds, psychologist, interviewed you on 8 April 2021 (Exhibit JD2).  You told him through the Millennium drought the farm was struggling and, in this context, you used the Pichler's money to pay farm debts.  You said you are sorry for what you had done and you were distressed to learn from police Mr Pichler had taken his life shortly after his investments with you failed.  To Mr Simmonds, you took responsibility for your actions, and you suggested you had a greater role in the investment scheme than your brother.

16You have no history of alcohol abuse or any drug use.  In Mr Simmonds' opinion, there is little probability of you offending again given the circumstances in which your offending happened are unlikely to occur again, and your age. 

17Bernard Downes, after you completed Year 11 you did seasonal farm work locally.  When you were 19 years old you obtained work as a storeman at a wool store in Melbourne.  When your father died, you returned to the family farm with your brother, John.  You married in 1997.  You have a daughter aged
22 who is a nurse, and a son aged 20 who is a carpenter.

18After the farm was sold, you rented the family home from the new owner.  For the last two years, you have worked as a truck driver in Horsham.  Your wife also works in Horsham, and the two of you plan to move there for convenience.

19You have no history of alcohol problems or drug use, and you have been otherwise healthy until July 2010, when you suffered a heart attack.  Since the insertion of a stint to clear a blocked artery, you have been
well-managed with medication.

20Your friends and neighbours, John McConville (Exhibit BD3), and Graeme Milne (Exhibit BD4), wrote you have been a contributing member of your community all your life.  You played football and tennis and were a member of the Litchfield Fire Brigade.  You are highly regarded. 

21Mr Simmonds assessed you on 8 April 2021 (Exhibit BD2).  To him, you were remorseful and also distressed when you had learnt from police Mr Pichler had taken his own life.  In Mr Simmonds' opinion, like your brother, given you are no longer running your own business, the likelihood of you reoffending is extremely limited. 

22In mitigation of penalty, Mr Anger, who appeared for you, John Downes, and
Mr Thomson who appeared for you, Bernard Downes, relied on, firstly, your guilty plea for its utilitarian value and demonstration of remorse; secondly, your lack of any criminal record; thirdly, the delay in prosecution; and, fourthly, your good prospects of rehabilitation. 

23Both counsel urged I impose upon you a non-custodial sentence.

24Mr Cookson, who appeared for the prosecution, in conspicuously fair submissions, accepted delay, which is not attributable to you, is significant, there is utilitarian value in your plea, and each of you is otherwise of good character. 

25In relation to your offending, he submitted yours was a serious breach of trust, involving a number of falsehoods and half-truths when you offended and, subsequently, to prevent detection of your crimes.  He submitted they had a significant financial and psychological impact on both Mr and Mrs Pichler.

26He submitted, while a term of imprisonment should be imposed upon you, a suspended sentence is within proper sentencing range. 

27As the maximum penalty of 15 years' imprisonment demonstrates, the offences are serious.  Yours was a serious breach of the trust that Mr and Mrs Pichler placed in you.  The loss of their monies caused them significant financial and psychological impact.  A term of imprisonment is warranted.

28However, there are strong mitigating factors.  Firstly, I accept your guilty plea has high utilitarian value and that a trial has been avoided, and it demonstrates some remorse.  Secondly, you John Downes, are 62 years old, and you Bernard Downes are 54 years old.  Neither of you has a criminal history nor offended since.  Both of you are otherwise of good character.  Thirdly, and most significantly, there has been a delay of more than 10 years not attributable to you in the prosecution of these charges.

29Police interviewed both of you in July 2011.  Charges were not laid until
9 February 2018.  There is considerable unfairness to both of you who have been left in a state of uncertain suspense as to the outcome of the police investigation.  Additionally, both of you have substantially progressed your rehabilitation by living law-abiding lives in the meantime.  It is unlikely either of you will ever reoffend. 

30In the circumstances of the case, I am satisfied all sentencing objectives can be achieved by a sentence of imprisonment that does not commence immediately.

31John Downes, your overall criminality is greater than your brother's, and I will impose respective sentences which reflect the difference.

32By the sentence I impose I must denounce your conduct, punish you, and deter you and others, from committing crimes of the same or similar kind.  I must also look to your rehabilitation.

33Considering the circumstances of your offending, your personal circumstances and antecedents, and endeavouring to produce a sentence which reflects and promotes the purposes of sentencing in a manner appropriate to you:

34You,  John Downes, you are convicted of Charges 1 and 2 of fraudulently inducing persons to invest money, and sentenced to an aggregate term of 15 months' imprisonment which is to be wholly suspended for two years from today's date. 

35You, Bernard Downes, are convicted of Charges 3 and 4 of fraudulently inducing persons to invest money, and on each charge you are sentenced to 12 months' imprisonment, which is to be wholly suspended for two years from today's date.

36Pursuant to s.86 of the Sentencing Act I order each of you pay Lexis Pichler $395,000. 

37But for your guilty plea, I would have sentenced you, John Downes, to 12 months' imprisonment, and you Bernard Downes, to 9 months' imprisonment. 

‑ ‑ ‑