Director of Public Prosecutions v Iliopoulos (Ruling No 1)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

CRIMINAL DIVISION

S CR 2014 0172
S CR 2014 0162
S CR 2014 0171

DIRECTOR OF PUBLIC PROSECUTIONS

STEVE ILIOPOULOS, VASILIS BARIAMIS AND PETER ILIOPOULOS

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JUDGE:	KAYE JA
WHERE HELD:	Melbourne
DATE OF HEARING:	2, 3 February 2016
DATE OF RULING:	5 February 2016
CASE MAY BE CITED AS:	DPP v Iliopoulos & Ors (Ruling No 1)
MEDIUM NEUTRAL CITATION:	[2016] VSC 32

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CRIMINAL LAW – Obtaining financial advantage by deception – Joinder of counts in one indictment – Severance.

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APPEARANCES:	Counsel	Solicitors
For the Crown	Mr D Brown and Mr P Kounnas	Acting Solicitor for Public Prosecutions
For the Accused Steve Iliopoulos	Mr M Dempsey	Lethbridges
For the Accused Vasilis Bariamis	Mr G Georgiou SC and Mr L Howson	Dribbin & Brown
For the Accused Peter Iliopoulos	Mr D Glynn	Theo Magazis & Associates

HIS HONOUR:

The three accused, Steve Iliopoulos, Vasilis Bariamis and Peter Iliopoulos, are charged on an indictment containing 16 charges. Steve Iliopoulos is charged with 13 counts of obtaining a financial advantage by deception, and one count of attempting to obtain a financial advantage by deception. Vasilis Bariamis is charged with four counts of obtaining a financial advantage by deception and two counts of attempting to obtain a financial advantage by deception. Peter Iliopoulos is charged with seven counts of obtaining a financial advantage by deception. The offences, the subject of the charges, are alleged to have been committed between December 2007 and March 2011.

Fourteen of the charges — charges 1 and 3 to 15 — relate to applications for financial facilities for companies and entities in the Viking Group of Companies, with which each of the accused were associated at the relevant time. Those charges have been described, for shorthand purposes, as belonging to two categories, namely the ‘banking charges’ and the ‘equipment charges’. The accused Steve Iliopoulos and Peter Iliopoulos each submit that the banking charges, against them, should be heard separately from the equipment charges against them. Vasilis Bariamis has only been charged with the banking charges, and not the equipment charges.

Charges 2 and 16 are against Vasilis Bariamis. They each relate to applications for finance made by Mr Bariamis for his own purposes. Vasilis Bariamis applies for a separate trial in respect of those charges.

Background

During the period relevant to the charges, the Viking Group of Companies conducted a large transport and logistics business nationally. Its head office was situated at 401 Docklands Drive, Docklands.

Steve Iliopoulos commenced working with Viking Fleet Service Pty Ltd (‘Viking Fleet Service’) in 1999. He ultimately purchased the shareholding in the company, and assumed full ownership and financial control of it. In 2006, he re-structured Viking Fleet Service. Between 2006 and 2011, the Viking Group of Companies expanded and ultimately comprised 19 separate companies or entities. One of those companies was Perth Freight Lines Pty Ltd, which Steve Iliopoulos purchased in 2008, and which operated in conjunction with the Viking Companies.

In late 2006, Loukia Bariamis (‘Loukia’), the wife of Vasilis Bariamis, commenced to work for the Viking Group. Steve Iliopoulos had previously known her through her work with an accounting firm. Loukia had been a registered auditor, but she had committed various frauds against the Australian Tax Office, by falsifying BAS statements and fraudulently receiving $1,820,939 in refunds. Subsequently, in 2013, Loukia Bariamis pleaded guilty to, and was sentenced, in respect of that offending. In 2007, Steve Iliopoulos employed Vasilis Bariamis to assist him with the financial aspects of the business.

During the relevant period, Steve Iliopoulos was chief executive officer of Viking Fleet Service, and in that capacity he managed the principal parts of the company’s business. Vasilis Bariamis was the executive general manager of the Viking Group of Companies. Peter Iliopoulos is the son of Steve Iliopoulos. In 2010, Peter Iliopoulos became a director of one of the companies in the group, Viking Asset Management Pty Ltd (‘VAM’). Loukia Bariamis was the chief financial officer of the Viking Group of Companies. The offences, that are the subject of the banking charges, are alleged to have been committed by one or more of the accused with Loukia Bariamis.

The banking charges

The charges that fall within the category described as ‘banking charges’ are counts 3, 5, 7, 8, 9 and 15. They each relate to applications made by one or more of the accused, with Loukia Bariamis, for financial lending facilities to members of the Viking Group of Companies. Charge 8, which alleges that Steve Iliopoulos and Vasilis Bariamis, with Loukia, attempted to obtain a financial advantage from Westpac Banking Corporation Limited, concerned an attempt by the Viking Group of Companies, in March 2011, to re-finance its lending facilities with Westpac. The other five ‘banking charges’ relate to applications made by one or more of the accused, with Loukia, to increase the lending facilities provided to the Viking Group by its banker, the Commonwealth Bank of Australia Limited (‘CBA’). In each case, it is alleged that the particular accused, with Loukia, provided false information to the bank about financial aspects of the business, and, in particular, provided to the bank tax documents and financial documents, purported to have been prepared by Alex Vovos (‘Vovos’) of Meridian Financial Services (‘Meridien’), but which in fact were fake documents.

The Viking Group of Companies commenced its relationship with the CBA in 2004. By July 2008, the loans to it, pursuant to the lending facilities provided by the CBA, amounted to $8.936 million. As I stated, charges 3, 5, 7, 9 and 15 relate to applications successfully made on behalf of the Viking Group to increase the borrowings by that group from the CBA under its existing or new facilities. For the purposes of this ruling, it is only necessary to summarise the basic facts relating to the charges in brief compass. For that purpose, I rely, principally, on the summary of prosecution opening that has been filed in this case.

Each of the lending facilities, that are the subject of charges 3, 5, 7 and 9, included an asset finance facility provided to Viking Asset Management Pty Ltd (‘VAM’). Under that facility, VAM was able to enter into specific hire purchase agreements with the CBA in respect of motor vehicles purchased by the Viking Group, on production of the appropriate documentation evidencing the purchase of the vehicle by the Viking Group. Charge 6, and charges 10 to 14 concern applications made by the Viking Group for hire purchase finance pursuant to the asset finance facility made available to VAM. In order to avoid what it perceives to be some duplication of the charges on the indictment, the prosecution does not rely on the increases in the asset finance facilities, in charges 3, 5, 7 and 9. However, it is expected that in the course of evidence the increases in those facilities will be inextricably connected with the evidence relating to the applications for, and negotiations in respect of, the lending facilities that are the subject of charges 3, 5, 7 and 9.

Charge 3 concerns documentation prepared by Loukia Bariamis, at the direction of Steve Iliopoulos, that was submitted to the CBA on 8 August 2008 to increase the lending facilities provided to three companies in the group by $7.5 million. The documentation included a trust return and electronic lodgement declaration, three compilation reports, and two trust tax returns and lodgement declarations, in respect of members of the Viking Group. Those documents were purported to have been prepared by Alex Vovos of Meridian. However, the documents had not been prepared by Vovos or Meridian, and each of them were fraudulent. Based on those documents and the information provided in them, CBA extended the credit facilities that were applied for.

Charge 5 concerns negotiations commenced by Steve Iliopoulos with the CBA in April 2009 in connection with an application to the CBA to provide further finance to the Viking Group. The application was supported by the six documents, purported to have been prepared by Meridian, that had been submitted to the bank in relation to charge 3. Based on the application, CBA agreed to increase the lending facilities to members of the Viking Group by $5.48 million, to a sum of $19.905 million.

Charge 7 is against Steve Iliopoulos and Vasilis Bariamis. It relates to an application for further finance to the CBA in October 2009. That application was preceded by a number of meetings that Steve Iliopoulos, Vasilis Bariamis and Loukia had with representatives of the CBA in 2008 concerning the cash flow, direction and financial health of the Viking Group of Companies. Loukia conducted most of the communications with the bank regarding the loan facilities, but both Steve Iliopoulos and Vasilis Bariamis were copied into the emails to and from the bank regarding the loan. It is alleged that in October 2009 Loukia, with the knowledge of Steve Iliopoulos and Vasilis Bariamis, provided a series of documents to the CBA in support of an application for an additional $12.15 million funding to the Viking Group of Companies. The documents included three accounting documents that overstated the amounts owed to the Viking Companies by various debtors. It also included eight compilation reports of separate members of the Viking Group that purported to have been prepared by Vovos, but were not in fact prepared by him or by Meridian. It is alleged that the financial documents, listed in the aged debtors trial balances through the companies, overstated debtors by a combined amount in excess of $5 million. Based on that information, the CBA extended the further finance facilities to the Viking Group of Companies, taking the total facilities provided by CBA to the group to $33.862 million.

Charge 9 is against each of the three accused. In June 2010, the Viking Group was experiencing further cash flow problems, and was overdrawn on its accounts by about $2 million. The companies in the group had sought and were granted temporary excesses on their credit facilities.

On 30 June 2010, the three accused, together with Loukia, had a meeting with CBA about the cash flow problems of the group. Vasilis Bariamis told bank representatives that Viking had changed its business mix, and that it was now dealing with large companies such as Linfox, Toll, TNT, Aldi, Amcor and V-Line. In fact, none of the Viking Companies did any business with Aldi or V-Line. On 22 July, Vasilis Bariamis sent to CBA a document entitled ‘Viking Group Divisional Strategic Overview 2010 to 2011’. In that document it was claimed that Viking Fleet Service had generated substantial business by putting in place larger external contracts with companies such as Aldi, Linfox and Boral. It was also claimed that Viking Fleet Service was the exclusive supplier of heavy vehicle maintenance for Aldi in Victoria. In fact, Viking Fleet Service did not conduct any business with Aldi, and it did not have any large contracts with Boral.

In September 2010, an application was made to increase the credit facilities to members of the Viking Group by $17.4 million. The application was based on three documents, which contained false or incorrect details relating to debts owing to three members of the Viking Group. It was also based on the representations relating to Viking’s association with Aldi and Boral, to which I have referred. The application was successful, and resulted in an increase in the total facilities provided by CBA to the Viking Group to $50.437 million.

Charge 15 alleges that the three accused, together with Loukia Bariamis, on 26 November 2010 dishonestly obtained financial lending facilities from the CBA to VAM by deception, by falsely representing that the aged trial balance for Perth Freight Lines Pty Ltd, the document entitled ‘Viking Fleet Services debtors aged trial balance June 10’, and the document entitled ‘Viking Transport and Logistics debtors aged trial balance June 10’, each contained true and correct debts of the particular company to which those documents related.

The charge concerns a request made by the accused to CBA for a further extension of credit of $4,000,000 to assist in expenditure being incurred in upgrading the Viking operating venue at Kororoit Creek Road, and for the purchase of vehicles. The bank was told that the capital works at the Kororoit Creek premises had placed a lot of pressure on the group’s cash flow as it had to be funded from its business revenues. Due to the recent nature of the extension of credit that was the subject of charge 9, the bank did not require any further documentation, and acceded to the application on the basis of the documents previously submitted to it.

Charge 8 alleges that, between 6 July 2010 and 30 March 2011, Steve Iliopoulos and Vasilis Bariamis, together with Loukia Bariamis, attempted to obtain a financial advantage from Westpac by deception.

During the second half of 2010, the Viking Group was falling behind repayment of the credit facilities it held with CBA. During that time Steve Iliopoulos and Vasilis Bariamis, together with Loukia, sought to re-finance the facilities with Westpac. In August 2010, Vasilis Bariamis, with the knowledge of Steve Iliopoulos and Loukia, submitted financial documents to Westpac. However, the balance sheet that was provided did not balance.

The Viking Group did not pursue its attempt to re-finance through Westpac until 7 February 2011, when Vasilis Bariamis emailed Westpac to restart the process. A series of documents in furtherance of the application for finance were sent to Westpac by Steve Iliopoulos and Vasilis Bariamis. They included representations that Viking Fleet Service was the exclusive supplier of heavy vehicle maintenance services to Aldi stores in Victoria, and that it had a substantial business with Boral, which was untrue. The documents also included nine compilation reports for separate members of the Viking Group, that purported to have been prepared by Vovos of Meridian, but that had not been prepared by him.

In April 2011, receivers were appointed to several of the Viking Group of Companies. Ultimately, the application to Westpac was not approved.

The equipment charges

The charges, that are described as the ‘equipment charges’, comprise counts 1, 4, 6, and 10 to 14 (inclusive). Charge 4 (against Steve Iliopoulos) concerns an application to the Adelaide Bank in August 2008. Each of the other charges concern applications made to CBA.

Each of the eight charges, in this category, relate to applications made for a Commercial Hire Purchase Facility purportedly to finance the purchase of vehicles or equipment purchased by the Viking Group from Knights Motors. That company was a business owned by Kon Iliopoulos, the brother of Steve Iliopoulos. The applications for finance, that are the subject of the equipment charges, included documents that purported to be Knights Motors invoices containing an LMCT number on them. Knights Motors never held an LMCT. In fact, the LMCT number on the invoices was previously held by George Iliopoulos, another brother of Steve Iliopoulos. The Knights Motors invoices were each false. In each case, the vehicles or equipment had not been purchased from Knights Motors. Steve Iliopoulos is an accused in respect of each of the eight equipment charges. Peter Iliopoulos is an accused in respect of charges 10 to 14 (inclusive). The equipment charges are not alleged to have been committed by the accused with Loukia Bariamis. As earlier stated, Vasilis Bariamis is not an accused in respect of any of the equipment charges.

Charge 1 arises from an application to Westpac which resulted in a hire purchase agreement between Viking Asset Management and Westpac relating to two vehicles, sold by that company to the bank, and hired by the bank to the company. The application was based on three false documents. The first was a Knights Motors invoice that showed the purchase of the two vehicles for the sum of $135,000. The document was false. The vehicles had not been purchased from Knights Motors, but had been purchased by Steve Iliopoulos from Pickles Auctions for $51,233. The second false document was a money transfer receipt from the CBA. The document was a fake; it was not from the CBA. The third document comprised financial reports for Viking Asset Management (‘VAM’) and Viking Fleet Service, that purported to have been prepared by Meridian, but which in fact had not been prepared by Meridian. Based on those documents, Westpac paid $135,300 to the bank account of VAM by electronic transfer.

Charge 4 relates to a finance agreement entered into by Steve Iliopoulos, as a director of VAM, with Adelaide Bank. Under the agreement the bank purchased four trucks from VAM for the sum of $282,131.90 and leased them back to VAM. The documentation supporting the application included four invoices that purported to be from Knights Motors as proof of the purchase by VAM of those vehicles. The invoices were not genuine. The vehicles had not been purchased from Knights Motors, but had been assets of a related company, Perth Freight Lines, when that company was purchased by the Viking Group.

Charge 6 concerns an application by VAM to CBA for an equipment loan of $795,000. That loan was to be secured by seven vehicles owned by VAM. The documentation provided in respect of the loan included tax invoices purporting to be from Knights Motors to VAM in respect of the purchase by VAM from Knights Motors of the vehicles included in the equipment loan schedule. Those invoices were not genuine and were falsified. The documents provided to CBA also included Westpac statements for VFS Transport (a related company), which purported to show that VFS Transport had paid Knights Motors for the vehicles. Those documents had also been fraudulently created. In addition, the documents included a statutory declaration by Steve Iliopoulos that asserted that he had never been declared bankrupt, when in fact he had been previously declared bankrupt in 1998.

Charge 10 relates to an application on 27 October 2010 to CBA for hire purchase finance in respect of two Volvo loader trucks. In support of the application, a tax invoice was submitted purporting to be from Knights Motors recording the purchase of the vehicles. The documents were false. The hire purchase schedule submitted to CBA stated that the vehicles were genuinely purchased from Knights Motors, which was not the case. A falsified contract of sale, purporting to evidence the purchase of the vehicles from Knights Motors, was also submitted. In fact, the vehicles had been purchased from a different source, and one of them was the subject of a commercial hire purchase agreement with Westpac. Based on those documents, the CBA credited an account operated by VAM in the amount of $353,265.

Charge 11 relates to another application for hire purchase finance made to CBA on the same day, 29 October 2010, in this instance for $218,350, in respect of a Volvo Loader. The CBA hire purchase schedule, signed by Peter Iliopoulos as the director of VAM, recorded that the vehicle was purchased from Knights Motors, when it was not. Peter Iliopoulos also signed a statutory declaration attached to the loan documents acknowledging there was no existing finance on the vehicle. In fact, the vehicle was subject of a commercial hire purchase agreement with Westpac.

Charge 12 relates to an application made seven days later, on 5 November 2010, to CBA to finance the purchase of two loaders for the sum of $652,850. The application was supported by a CBA hire purchase schedule signed by Peter Iliopoulos, stating that the loaders had been purchased from Knights Motors, when that was not the case. They had in fact been purchased from other sources at lower prices. In addition, a false tax invoice was also submitted purporting to evidence the purchase of the vehicles from Knights Motors.

Charge 13 relates to an application, four days later on 9 November 2010, to CBA purportedly for the finance of four items of plant and equipment for the sum of $740,850. The application was supported by false documents purporting to be from Knights Motors evidencing the acquisition by VAM of the items. In addition, Peter Iliopoulos signed a statutory declaration that one of the items of equipment (a Kalmar Reachstaker) was not otherwise financed, when in fact it was under existing finance to Toyota Finance Australia.

Charge 14 relates to an application made on 18 November to CBA to finance two pieces of machinery (an excavator and a forklift) in the sum of $279,200. The documentation supporting the application represented that the vehicles had been purchased from Knights Motors, which was not the case. Those documents were in fact false. In addition, the excavator had been previously purchased from another company at the price of $88,000, whereas the document submitted to the CBA recorded its value as $211,200.

The individual charges

As I have earlier stated, the indictment includes two charges against Vasilis Bariamis that do not relate to the obtaining of finance on behalf of the Viking Group of Companies. They are charges 2 and 16.

Charge 2 alleges that, on 26 July 2008, Vasilis Bariamis obtained a financial advantage by deception from Esanda, namely, the provision of finance to purchase a new BMW motor vehicle, in the sum of $210,356. In the application signed by Vasilis Bariamis, his monthly net income was listed at $16,000. However, at that time he was not employed, as he had just finished working for Transaction Resources. The application was also supported by tax returns for the financial years ended 30 June 2006 and 30 June 2007, that purported to have been prepared by Alex Vovos of Meridian Financial Services. The documents were false, and they had not been prepared by Vovos or Meridian.

Charge 16 alleges that Vasilis Bariamis on 16 August 2011 dishonestly attempted to obtain for himself or for another, namely, his company SSL Holdings Pty Ltd, a financial advantage, namely a leasing agreement for a motor vehicle from Esanda for a Volkswagen Touareg by deception, namely, by falsely representing that two compilation reports for SSL Holdings Trust had been prepared by Alex Vovos of Meridian Financial Services, when they had not been prepared by Vovos.

Factual issues

Each of the three accused have filed responses to the prosecution opening.

On behalf of Steve Iliopoulos, it is not disputed that the various documents, that are the subject of the charges, were submitted to the financial institutions in question, in order to obtain finance. Nor is it disputed that those documents were acted on by the financial institutions in deciding to advance credit to the Viking Group. Steve Iliopoulos does not concede that he is a signatory to all the documents that were submitted. He disputes the assertion that he knowingly created the false documents or approved or directed the use of false documents, in order to secure the financial facilities or finance that are the subject of the charges.

Peter Iliopoulos is only the subject of charges relating to applications for finance to the CBA. He does not dispute that the CBA was the victim of the deceptions charged in counts 9 to 15. He does not dispute that those deceptions were perpetrated by Loukia Bariamis and others within the Viking Group of Companies. Peter Iliopoulos does not dispute that the deceptions were carried out in the manner outlined in the opening, namely by the provision of false documents created within Viking Group and sent to CBA. Nor does Peter Iliopoulos dispute that CBA relied on those documents in determining to advance credit to various Viking Group entities. He admits that, in his capacity as director, he signed documents relevant to the finance documents, which found the deceptions charged in charges 9 and 15, but he does not admit that he signed the documents relevant to charges 10 to 14 inclusive. Peter Iliopoulos denies that he was a party to any of the deceptions that are the subject of the charges against him. He denies that he requested or participated in the requests for finance from the bank and he denies that he created any false documents or was party to their creation.

On behalf of Vasilis Bariamis, it is not disputed that the CBA provided a number of financial products to the Viking Group of Companies, including the receivable finance facility. He contends that he had no knowledge that documents provided to CBA contained false information concerning the assets and debtor lists of the Viking Companies. He did not have any input into the preparation of the accounts documents that were relied on to obtain the financial products from CBA. In respect of charge 8, he denies that he knew that false documentation or information was provided to Westpac Bank in order to re-finance the credit that the companies then received from CBA. In respect of charge 9, he does not recall mentioning each of the companies such as Aldi, Linfox and Boral as major clients of the Viking Group. If he provided that information, it was on the basis of information provided to him by Steve Iliopoulos, Loukia Bariamis or both. The central issues in dispute on behalf of Mr Bariamis are: that he acted dishonestly; that by deception he gained or attempted to gain a financial advantage; and that he knew that false information was provided to the banks or other credit institutions. In particular, it is contended that he was not aware of any fraud perpetrated by any of the accused or his wife Loukia Bariamis.

The principal witness on behalf of the prosecution, in respect of the deceptions that were perpetrated on the financial institutions that are the subject of the charges, will be Loukia Bariamis. In 2013, Mrs Bariamis pleaded guilty to three charges of obtaining financial advantage by deception. As part of her plea in mitigation in sentence, she gave an undertaking to the court to cooperate with and assist the prosecution in the present matter.

It is not necessary for me to summarise Mrs Bariamis’ evidence in any detail. Her evidence is contained in five statements that are in the depositions. It is somewhat difficult to relate significant parts of her statements to particular charges on the indictment. Nevertheless, the gist of Loukia Bariamis’ statements is that she was responsible for the compilation of the documents and information that was provided to the CBA, and (in the case of charge 8) to Westpac, in support of the applications for financial facilities for the increase in existing financial facilities. Loukia Bariamis’ evidence is that at the time the business of the Viking Group of Companies was under increasing financial demands, because of the rapid expansion of its business, and also because the directors, and others, drew on the funds of the business for personal expenses. Loukia Bariamis felt under significant pressure from Steve Iliopoulos to compile and proffer false accounting documentation in order to enable the Viking Group to obtain the financial facilities in question. In her second statement, she referred to the need for the Viking Group to provide to the bank invoices to customers in order to be able to draw down funds under the existing receivables funding facilities. The invoices that were available were not sufficient for the purposes of the business. She said:

We (Carly Hartley and Loukia) then called Steve to meet with us, and explained our dilemma and how we could ‘temporarily’ fix the problem. … Steve did not hesitate to tell Carly and I that he didn’t care how we did it, as long as we got the funding we needed to keep trading and paying the group’s expenses. He became quite animated at the time telling us that he expected us to do whatever it took and not to be waiting to consult with him about it. However both Carly and I told him that we wouldn’t have done it unless he knew what was being done. The only way that Viking could continue to obtain money at that time was through the RF facilities provided through the CBA, and by falsifying information to obtain the additional funds to be drawn down on … .[1]

[1]Statement of Loukia Bariamis 28 February 2013, para 85 (deposition page 707).

Later in the same statement she stated:

Steve’s attitude to me when I raised all the concerns I had about the cash flow was to tell me to ‘shut the f…up, and make sure the problem is being fixed’. He constantly claimed that anything to do with the financial side of the businesses was ‘my’ problem, and refused to allow me to get any additional help. He didn’t want anyone else (with the exception of Carly) knowing what we were actually doing. He always claimed to only trust Carly and me with fixing these issues, as and when they were raised or became problems that needed to be fixed.[2]

[2]Ibid, para 157 (deposition page 732).

Loukia Bariamis stated that the responsibility, for compiling and providing the false Knights Motors invoices, for the equipment finance, was that of Carly Hartley, her offsider. Ms Hartley has provided a statement, but in that statement she does not deal with the compilation or provision of those invoices to the banks.

Notices of tendency evidence and of coincidence evidence

The prosecution has served a notice of tendency evidence, pursuant to s 97(1) of the Evidence Act 2008 (‘the Act’), and a notice of coincidence evidence, under s 98(1) of the Act, on Steve Iliopoulos, but not on any of the other co-accused.

By the notice of tendency evidence, the prosecution has given notice that it intends to rely on the evidence adduced in respect of each of the charges against Steve Iliopoulos (that is charge 1, and charges 3 to 15) in respect of each of the other charges against Steve Iliopoulos. The notice states that the tendency sought to be proved is the tendency of Steve Iliopoulos to act in a particular way namely:

aTo obtain credit facilities for Viking Companies from banks by submitting false documents and making false representations in support of the applications for credit;
bRequesting or encouraging persons employed by companies in the Viking Group of Companies (in particular Loukia Bariamis) to assist to obtain credit facilities from banks by requesting or encouraging them to submit false documents or making false representations to banks in support of credit applications to a bank by a Viking Company.
cTo use the credit facilities obtained from a bank by fraudulent means to fund the operations of the Viking Group of Companies.

By the notice of coincidence evidence, the prosecution intends to adduce evidence on each of the equipment charges against Steve Iliopoulos (that is, charges 1, 4, 6 and 10 to 14) in respect of each of the other equipment charges. It is contended in the notice that, having regard to the similarities in the events pertaining to each of the equipment charges, it is improbable that those events occurred by coincidence, and in particular:

aIt is improbable that the accused’s signature would be witnessed on the finance applications the subject of charges 1, 4 and 6 unless he had in fact signed those documents in the presence of the witnesses. It is unlikely that all the witnesses were either lying or mistaken about the accused signing the finance document in his or her presence.
bIt is improbable that the accused as chief executive officer of Viking Asset Management would have been involved in obtaining all of the asset finance facilities from the various banks without knowing that the assets sought to be financed were not purchased from Knights Motors and that Knights Motors’ invoices forwarded to the banks were fabricated. Put another way, the accused defence that Viking Asset Management obtained the asset finance and that in each case he was unaware that fraudulent documentation was used to obtain that finance becomes more implausible when all the applications are considered together rather than separately and in isolation from each other. It is improbable that the accused could have been involved in so many similar fraudulent finance applications without being aware of the fraudulent documents common to each of those applications.

In the course of submissions, Mr D Brown, who appears with Mr P Kounnas on behalf of the prosecution, stated that if the banking charges and the equipment charges are heard together, the prosecution would not rely on the notice of coincidence evidence.

On behalf of Steve Iliopoulos, it is disputed that the evidence of the equipment charges is admissible as tendency evidence in respect of the banking charges against Steve Iliopoulos, and, conversely, it is disputed that the evidence of the banking charges is admissible as tendency evidence in respect of the equipment charges against him. Mr M Dempsey, who appears on behalf of Steve Iliopoulos, reserved the right to contend, at trial, that the evidence in respect of the equipment charges is not admissible as tendency evidence in respect of other equipment charges, and, similarly, that the evidence on any of the banking charges is not admissible in respect of any of the other banking charges. However it is not necessary to decide that matter for the purpose of the severance application.

The severance issues

The principal issue between the prosecution and Steve Iliopoulos is whether the evidence on the equipment charges, and the evidence on the banking charges, are mutually cross-admissible. There is a further issue as to whether, if they are not cross-admissible, the charges should, in any event, be heard together.

As noted, it is not submitted that the evidence against Peter Iliopoulos on the equipment charges and on the banking charges are cross-admissible. The particular issue in respect of Peter Iliopoulos is whether the case of Peter Iliopoulos would be prejudiced by reason of the banking charges and the equipment charges against him being heard together.

It is accepted on behalf of Vasilis Bariamis that each of the banking charges alleged against him (charges 7, 8, 9 and 15) should be heard together. The issue in respect of Vasilis Bariamis is whether the two individual charges (charges 2 and 17) should be heard separately to the trial of the banking charges against him.

Although the application for severance, in each case, is made on behalf of the particular accused, it is convenient to summarise the prosecution arguments first, as they outline the basis upon which the prosecution has sought to join the particular charges against each accused. It is also appropriate to consider the applications for severance in respect of each individual accused separately.

Prosecution submissions: Steve Iliopoulos

It is submitted on behalf of the prosecution that the tendency that the prosecution would seek to prove, in respect of each charge, is that Steve Iliopoulos had a tendency to act in a particular way, namely, that as the chief executive officer of the Viking Group of Companies, he submitted, or instructed others to submit, false invoices and other financial documents and reports to banks in order to obtain credit facilities from those banks to fund the operations of the Viking Group of Companies.

In support of the banking charges, the prosecution relies primarily on the evidence of Loukia Bariamis that she engaged in the fraudulent activities at the behest of Steve Iliopoulos and for his ultimate benefit, as he was the CEO and principal shareholder of the Viking Group of Companies. The prosecution will also rely on the presence of Steve Iliopoulos, together with Loukia and Vasilis Bariamis, at meetings with CBA representatives, at which false representations were made to the bank. The prosecution accepts that Loukia Bariamis played a more significant role in the bank charges than in the equipment charges. In her statements, Loukia Bariamis stated that while she was aware that the equipment offences were being committed, she was not directly involved in them. Rather, she suggests that the documentation and information in respect of those charges was prepared and collated by Ms Carly Hartley, who was her immediate subordinate in the Viking Group.

In this respect, it is submitted that there is evidence of some involvement by Loukia Bariamis in some of the equipment offences. The application for hire purchase finance, that is the subject of charge 1, was made to the Westpac Bank by a finance broker. The application nominated Loukia Bariamis as the ‘contact person’ for the applicant, VAM. Further, a number of emails that were sent by the Viking Group to CBA for hire purchase finance, that is the subject of charges 10 to 14, were copied (inter alia) to Loukia Bariamis. They included an email dated 27 October 2010, by Ms Hartley to Barry Heib (the area manager of CBA) attaching documents purporting to be Knights Motors invoices that are the subject of charges 10 and 12. Loukia Bariamis sent an email dated 28 October 2010 attaching Knights Motors invoices that are the subject of charges 10, 12, 13 and 14.

Notwithstanding the differences between the two sets of charges, the prosecution submits that the tendency, that is sought to be established, is not a tendency to act dishonestly in a general sense. Rather, it is a specific tendency, in that the two groups of charges possess the following common features, namely:

(a) Steve Iliopoulos was the CEO of the Viking Companies at the time each charge was alleged to have been committed.

(b) Steve Iliopoulos was in a position to instruct Loukia Bariamis to furnish documents to the banks.

(c) Each offence involved a company in the Viking Group making an application for credit to a financial institution.

(d) In each case false documents, or documents containing false information, were provided to the banks. In addition, in some cases, false representations were made orally to bank officers by Loukia Bariamis or Vasilis Bariamis in the presence of Steve Iliopoulos.

(e) In each case the false information was provided for a common purpose, namely, the financial benefit of a Viking Company, which was ultimately for the financial benefit of Steve Iliopoulos.

In particular, it is submitted that each of the offences, charged against Steve Iliopoulos, involved obtaining credit for the benefit of a Viking Company from a bank by using false representations as to some financial aspect of a company in the Viking Group.

Accordingly, it is submitted that if the jury were satisfied that Steve Iliopoulos directed Loukia Bariamis to provide false documents to a bank in respect of one charge, that evidence would have substantial probative value in relation to the other charges on the indictment. For example, it is submitted that if the jury were satisfied that Steve Iliopoulos knew that the application for finance in respect of charge 4 (an equipment charge dated 8 August 2008) was supported by false Knights Motors’ invoices, that evidence would have significant probative value in relation to the allegation in charge 3 (a banking charge of the same date) that Steve Iliopoulos directed Loukia Bariamis to provide false Vovos documents to the bank to obtain an extension of credit. In that way the evidence on charge 4 would be admissible to demonstrate conduct of Steve Iliopoulos using false documents to obtain credit from a bank for the benefit of a Viking Company, in the same timeframe, by directing Loukia Bariamis or some other Viking employee to furnish false documents to the bank.

It is further submitted that if the evidence relating to the bank charges and the equipment charges is not cross-admissible, it is in the interests of justice that the charges be heard together. It is submitted that the offences were all committed in the same common factual setting, they are all of a similar nature, and in some cases evidence in relation to an equipment offence is relevant to a bank offence.

It is submitted that the evidence in relation to the banking charges overlaps with the evidence in relation to the equipment charges to such extent that both groups of charges should be heard together.

In particular, the evidence of Roslyn Ticknell-Best, the corporate account manager of CBA, is that the CBA annually reviewed the limits for all financial facilities that the Viking Group had with the CBA, including the limits for the receivable finance facilities and the asset finance facilities. They were each reviewed at the one time on the basis of the same financial information provided to CBA by the Viking Group. Further, as I have stated, at the time that each of the limits for the receivable finance facilities were increased (in response to the applications that are the basis of charges 3, 5, 7 and 9), the asset finance limit for Viking Asset Management was also increased. The increases were assessed and granted on the basis of the same body of financial documents that Viking Group provided to the bank. Once the finance asset finance limit was increased, VAM was able to apply for asset finance for specific items of equipment, without providing any further financial documentation or information to the CBA. Rather, VAM only was required to satisfy the bank that the asset was suitable to be financed, by the provision of purchase invoices and the like. In that way, it is submitted that the bank offences and the equipment offences are necessarily interlinked to a substantial degree.

In addition, it is submitted that some of the bank offences and equipment offences are linked together in a common group of evidence. Charges 3 and 4 are each alleged to have been committed on 8 August 2008. Charge 3 relates to the obtaining of $7.5 million credit for the Viking Group of Companies from the CBA. That credit was primarily used to acquire the business and equipment of Perth Freight Lines. Steve Iliopoulos needed $156,505 in order to complete the sale. He borrowed that sum from Kathryn Barbary on 8 August. Kathryn Barbary was the wife of Darren Barbary, who had brokered many commercial hire purchase agreements on behalf of Viking. Kathryn Barbary was repaid the loan five days later from funds that Viking obtained from the Adelaide Bank in respect of the transaction that is the basis of charge 4. Thus, it is submitted that charges 3 and 4 are inextricably interwoven.

It is also submitted on behalf of the prosecution that charges 5 and 6 were closely interwoven. In particular, the increase in financial lending facilities by the CBA, that is the subject of charge 5, was granted by the bank on 22 July 2009. Charge 6 alleges that on the same day Steve Iliopoulos obtained hire purchase finance from the CBA in the sum of $795,000, that is the subject of charge 6.

It is also submitted that charge 9 is interlinked with the evidence in relation to charges 10 to 14. Each of those offences are alleged to have been committed against the CBA within a confined period of time between 5 October 2010 and 18 November 2010. At that time, the Viking Group of Companies was experiencing cash flow problems, that were the subject of a series of meetings between CBA representatives and the accuseds in June and July of 2010. In those meetings, the accuseds persuaded CBA to increase the credit facilities to the Viking Companies by $17.4 million, on the basis of information provided to them about the profitability of the Viking Companies. It is that information that is the subject of charge 9. In the course of those discussions the CBA indicated that Viking would be entitled to refinance, with the CBA, equipment that it had recently purchased from its cash reserves. As a result of those discussions, the commercial hire purchase agreements, that are the subject of charges 10 to 14, were entered into with the CBA. In each case, Viking falsely represented that the equipment was recently purchased from Knights Motors. In that way, it is submitted that charge 9, and charges 10 to 14, are significantly interlinked.

Mr Brown submitted that if the banking charges and equipment charges are not severed, any potential prejudice that might be occasioned to Steve Iliopoulos could be adequately overcome by an appropriate judicial direction. He submitted that any such direction would be relatively straightforward, and uncomplicated.

Steven Iliopoulos submissions

Mr Dempsey, on behalf of Steve Iliopoulos, submitted that the evidence on the banking charges, and the evidence on the equipment charges, are not mutually cross-admissible as tendency evidence.

In particular, he submitted that at least half of the factors, relied on by Mr Brown (and summarised in paragraph 56 hereof) are simply recitations of the background circumstances, rather than relevant similarities between the banking charges and the equipment charges. He submitted that otherwise, the matters relied on by Mr Brown do not have the effect that the two sets of offences are so similar as to cause the offending, alleged in one set of offences, to have significant probative value in respect of the other set of offences.

In particular, Mr Dempsey submitted that the tendency, sought to be proven by the prosecution, is too broad, and that it lacks the probative value that the Act requires in order that the evidence be admissible. Mr Dempsey submitted that, in the upshot, the tendency sought to be established by the prosecution was no more than a tendency by Steve Iliopoulos to produce, or to direct other persons to produce, false documentation for the purpose of obtaining finance from banks. The banking offences were committed in a particular manner, namely, by the provision of false accounting documents and information. Loukia Bariamis played a central role in the commission of those offences. The amount involved in the six offences totalled $95 million. On the other hand, it is submitted that the eight equipment offences are relevantly different. They rely on different bodies of evidence. Further, the method by which they were committed, namely, the production of fabricated Knights Motors’ invoices, was substantially different. Loukia Bariamis played a less significant role in the commission of those offences. The amount involved in relation to the eight equipment offences, alleged against Steve Iliopoulos, is $3.5 million.

It is further submitted that insofar as the evidence has probative value in evidencing a particular tendency on behalf of Steve Iliopoulos, that probative value is substantially outweighed by the prejudicial effect of the evidence, as it will convey the suggestion that Steve Iliopoulos had a tendency to be dishonest in a general sense in his business dealings. In particular, he noted that the amount of finance involved in the banking charges was considerable. He submitted that there is a substantial risk that a jury would indulge in impermissible propensity reasoning from the evidence related to the banking charges, when considering the equipment charges. In light of the amount involved in the banking charges, there is a significant risk that the potential prejudice to Steve Iliopoulos would not be offset by a judicial direction to the jury not to indulge in that form of reasoning.

It is further submitted on behalf of Steve Iliopoulos that, for the same reason, if the evidence is not mutually cross-admissible, the court should sever the charges on the basis that the case of Steve Iliopoulos might be prejudiced by the joinder of the two different sets of offences in the one trial. The joinder of the 15 charges, in the one indictment, will have the effect that the jury will be required to consider the trials of three accused, in respect of 15 charges, some of which apply to all, and some of which only apply to some, of the accused. It will be difficult for the jury to differentiate between the different charges, and the different accuseds, when considering the vast amount of oral and documentary evidence that will be adduced in the trial.

It is conceded on behalf of Steve Iliopoulos that, if the equipment charges and the banking charges are the subject of separate trials, there would be ‘some duplication’ in witnesses being called in the two trials. However, Mr Dempsey submitted that any such duplication would be limited. In particular, the presentation of the banking charges would not require the prosecution to adduce any of the evidence relevant to the equipment charges. Conversely, on the trial of the equipment charges, only a limited amount of evidence, relevant to the banking charges, would need to be called by the prosecution. Such evidence would be limited to background evidence relating to the existence of the facilities, that are the subject of the banking charges, and Loukia Bariamis.

Severance submissions: Peter Iliopoulos

As already stated, the prosecution does not seek to allege that the evidence on the banking charges and the evidence on the equipment charges, in respect of Peter Iliopoulos, are cross-admissible, as tendency evidence or coincidence evidence. Rather, the prosecution relies on the propositions that the two sets of charges, against Peter Iliopoulos, concern offences that were committed in the same factual setting, that they are all of the similar nature, and that in some cases the evidence in relation to an equipment offence is also relevant to a bank offence. It is submitted that an appropriate judicial direction would be sufficient to negate any prejudice sustained by Peter Iliopoulos arising from the joinder of the two sets of charges on the indictment against him.

Mr D Glynn, who appeared on behalf of Mr Peter Iliopoulos, accepted that he would not be able to make an appropriate application for a separate trial on behalf of Peter Iliopoulos. Thus, he accepted that he would only be able to apply for an order for severance of the banking charges from the equipment charges, if I reject the submission made on behalf of the prosecution that the evidence on the banking charges, and the evidence on the equipment charges, are cross-admissible as tendency evidence in respect of the trial of Steve Iliopoulos.

In support of the application for severance of the two sets of charges in those circumstances, Mr Glynn submitted that the bank charges and the equipment charges, while related, are separate charges. They were each committed by different means, and, to some extent, by different people. The case in relation to each set of charges is perfectly intelligible in the absence of evidence relating to the other type of charge. On the other hand, it is submitted that Peter Iliopoulos would suffer prejudice in the trial of the charges against him if they were heard together. The prejudice is particularly strong in that the allegations are similar, or related, and thus they may seem to the jury to be mutually supportive, while, as a matter of legal principle, they are not.

In addition, it is pointed out that the case will be lengthy and complicated. The complexity of the case will make it more difficult for the jury to give separate consideration to each charge, thus giving rise to a risk that the jury might be overwhelmed by the sheer volume of the evidence to be called in the case.

Severance submissions: Vasilis Bariamis

As stated, it is submitted on behalf of Vasilis Bariamis that charges 2 and 16 should be heard separately to the other charges against Mr Bariamis, namely, charges 7, 8, 9 and 15. In particular, it is submitted that charges 2 and 16 are not ‘related’ to the other charges against Mr Bariamis. The only link between them is the use of financial documents that falsely purport to have been prepared by Alex Vovos. However, that aspect is only one part of the fraudulent conduct alleged in charge 8. Charges 2 and 16 relate only to Vasilis Bariamis as the alleged perpetrator. The alleged victims are different. The advantage alleged in each charge was to Bariamis, not to the Viking Group. Charges 2 and 16 relate to applications for personal car loans for Mr Bariamis, and they are quite dissimilar to the banking offences alleged against Mr Bariamis.

In addition, it is submitted that if the two sets of offences, charged against Mr Bariamis, are related, the court should exercise its discretion under s 193 of the Criminal Procedure Act to sever charges 2 and 16. The purported connection between charges 2 and 17 on the one hand, and charge 8 on the other hand, is relatively minor. None of the evidence relating to charges 2 and 17 is cross-admissible in respect of, or common to, the other banking charges. There will be little inconvenience to the prosecution if some witnesses needed to be called twice. On the other hand, if the jury were to be satisfied that Mr Bariamis was dishonest in relation to charges 2 and 16, there is a significant risk that the jury might misuse that evidence in considering the allegation of dishonesty against him in relation to the banking charges, notwithstanding any judicial direction given to the jury in that respect.

In response, it is submitted on behalf of the prosecution that there is a common link between the two ‘equipment’ charges against Vasilis Bariamis, and charge 8, in that they both involved the use of financial documents falsely purported to have been prepared by Alex Vovos. It is submitted that the jury would be entitled to consider that it is implausible that Vasilis Bariamis would have been involved in three separate fraudulent applications for finance involving documents purported to have been prepared by Alex Vovos, without being aware of the fraudulent nature of the documents he was providing to the financial institutions. In particular, it is submitted that a jury would be entitled to consider that the ‘defence’ of Bariamis, that he was unaware of the concoction, would be implausible in light of the fact that Bariamis knew that his wife had already committed a serious fraud against the Australian Tax Office.

Mr Brown accepted that if I were to sever charges 2 and 16, it would be possible to prosecute charge 2 without reference to any of the evidence adduced in respect of the banking charges. However, he submitted that evidence on those charges would be relevant on the prosecution of charge 16. The offence that is the subject of charge 16 is alleged to have been committed in August 2011. At that time, the frauds, that are the subject of the banking charges, had been discovered, and it was common knowledge that Loukia Bariamis was implicated in those frauds. Loukia Bariamis produced the false compilation reports for SSL Holdings Trust that referred to in charge 16. By that time, it is submitted that Vasilis Bariamis must have been aware that his wife had been involved in fabricating Vovos documents for the purposes of finance applications made on behalf of the Viking Group. Thus it is submitted that that aspect of the evidence, relating to the banking charges, would be relevant to the prosecution of charge 16.

Joinder of charges — legal principles

The submissions made on behalf of Mr Bariamis raise the question as to whether the two individual charges have been validly joined in the same indictment that contains the bank charges against him. On the other hand, the submissions made on behalf of Steve Iliopoulos and Peter Iliopoulos accept that the bank and equipment charges have been validly joined in the same indictment. In their cases, the application by the accused is for severance of the indictment pursuant to s 193 of the Criminal Procedure Act 2009.

Section 159(3)(c) of the Criminal Procedure Act 2009 requires that an indictment must comply with Schedule 1 of the Act. Rule 5(1) of Schedule 1 provides that an indictment may contain charges ‘for related offences’ whether against the same accused or different accused. Section 3 of the Act defines ‘related offences’ to mean offences ‘that are founded on the same facts or form, or are part of, a series of offences of the same or a similar character’.

In that respect, the rules, which govern the joinder of separate charges in the one indictment, are expressed in the same terms as Rule 2 of the Sixth Schedule of the Crimes Act 1958, which applied to the question of joinder before the introduction of the Criminal Procedure Act.

The principles, that apply to the joinder of charges in the one indictment or presentment, have been discussed in a number of authorities. The underlying approach to joinder was expounded by Winneke P in R v Renzella.[3]In that case, his Honour rejected a submission that, in order that charges be validly joined in the one presentment, there must be complete ‘cross-admissibility’ of the evidence on each count on the presentment. His Honour stated:

It must be remembered that what is now to be found in Rule 2 of the Sixth Schedule to the Crimes Act was introduced into our statute law, as similar rules have been introduced into the statute law of other States, to overcome the rigidity which once existed in criminal proceedings, largely as a consequence of the distinction drawn by the law between felonies and misdemeanours. The flexibility which was designed to be introduced by the joinder rules would be, in my view, to a large extent set at nought if the rules were to be hedged about with inflexible principles of the type contended for by the applicant in this case. That, of course, is not to say that the rules permitting joinder of counts are intended to work prejudice to an accused person. In a sense, any joinder of counts in a presentment has the capacity to produce prejudice; but it is now a matter for the trial judge, in the exercise of the discretion invested by s.372, to ensure that unnecessary embarrassment or prejudice does not arise at trial by ordering severance where the circumstances require it.[4]

[3](Unreported, Supreme Court of Victoria, Court of Appeal, 7 August 1997 (BC9703681)).

[4]Ibid, [10]–[11].

In R v McLean,[5] the accused had been charged on a presentment containing 16 counts of receiving secret commissions and six counts of obtaining property by deception. On appeal, it was contended that some, or all, of the latter counts should not have been joined in the same presentment as the 16 counts of receiving secret commissions. The Court of Appeal rejected that submission, Tadgell JA (with whom Phillips CJ and Batt JA agreed) stated:

The cardinal criterion for the joinder of counts under our Presentment Rules, and cognate legislation, has long been accepted to be a link or other nexus that is sufficient to give effect to the underlying policy that the Rules were designed to implement. Nexus, as it is understood in this context, is or includes ‘a feature of similarity which in all the circumstances of the case enables the offences to be described as a series’. The policy was to enable the joinder of charges which may be ‘properly and conveniently’ dealt with together.[6]

[5](2000) 2 VR 118.

[6]Ibid, 129 [25] (Citations omitted).

In support of that proposition, Tadgell JA quoted, with approval, the following passages from the joint judgment of McPherson JA and Lee J in R v Collins ex parte Attorney-General[7]:

For offences to be founded ‘on the same facts’ they must have a ‘common factual origin’ … But that is a phrase which is not to be narrowly construed. In particular, it is not necessary for the offences to have arisen contemporaneously or to involve precisely the same facts. All that is necessary is for them to be traceable, either in time, place or circumstance, to common events … .[8]

[7][1996] Qd R 631.

[8]Ibid, 637.

In similar terms, Tadgell JA, earlier in his judgment, stated:

Sequential operations need not necessarily be executed identically before one may fairly infer that they were done according to a system; and they may have a common foundation of fact — a common factual basis — or be or form part of a series, in the relevant sense, without necessarily exhibiting many obviously common characteristics, provided that they have, for example, a common genesis or, on some other basis, may fairly be treated for the purposes of the trial as linked or associated, rather than separate or discrete.[9]

[9](2000) 2 VR 118, 128 [23].

In R v Gregory (No 1),[10] Whelan J summarised the relevant principles which apply for the joinder of separate charges in the one presentment. His Honour stated:
[10][2009] VSC 358.

The applicable legal principles were not the subject of significant controversy before me. They are as follows:
(1)The rule is to be given a liberal interpretation consistent with the policy underlying it, namely, to enable the joinder of charges which may be properly and conveniently dealt with together.
(2)Both the law and the facts should be taken into account in deciding whether offences are similar or dissimilar.
(3)In order for there to be a series of offences of a similar character there has to be some nexus between the offences.
(4)It is not necessary that the offences exhibit close similarities. Not infrequently in cases of commercial fraud, it is enough that offences or groups of offences have a common genesis or are otherwise linked and associated by commonality of parties or transactions.

(5) Two offences can constitute a ‘series’.
(6)A difference in time between offences might mean that what could otherwise be considered a series has become fragmented over time so as not to deserve that description.[11]

[11]Ibid, [13] (citations omitted); see also R v Magnus (No 1) [2011] VSC 340, [10] (T Forrest J).

In support of the fourth proposition, Whelan J referred to (inter alia) the decision of the Court of Appeal in R v Heinze.[12] In that case, the accused was charged on a presentment containing six charges including false accounting, obtaining financial advantage by deception, making a false document, using a false document, and perjury. The charges related, in effect, to two groups of offences. The first related to the steps taken by the accused to obtain a credit facility from the CBA. The second group of offences related to the use by the accused of false documents to draw down on that facility. Nettle JA (with whom Callaway JA and Eames JA agreed) rejected a submission on behalf of the applicant that the judge erred in refusing to sever the presentment. His Honour stated:

It is true that the two groups of offences were not the same offences and it is true that in some senses they did not exhibit a great many common characteristics. But it is not always necessary that different offences exhibit close similarities before one may say that they are or form part of a series of offences in the relevant sense. Depending on the sort of case, and not infrequently in cases of commercial fraud, it is enough that offences or groups of offences have a common genesis or are otherwise linked and associated by commonality of parties or transactions.[13]
[12][2005] VSCA 124.
[13]Ibid, [48].

Severance — legal principles

As I stated, Steve Iliopoulos and Peter Iliopoulos do not contend that the joinder of the charges against them is contrary to the provisions of the Criminal Procedure Act 2009. Rather, they apply for severance pursuant to s 193(1) and (3) of the Criminal Procedure Act. A similar application is made on behalf of Bariamis in the event that I conclude that the joinder of the individual charges with the bank charges, against Bariamis, on the same indictment, is valid.

Section 193 of the Criminal Procedure Act provides:

(1)If an indictment contains more than one charge, the court may order that one or more of the charges be tried separately.

…
(3)The court may make an order under subsection (1) … if the court considers that —
(a)the case of an accused may be prejudiced because the accused is charged with more than one offence in the same indictment; or

…
(c) for any other reason it is appropriate to do so.

A central issue, in determining whether the joinder of counts in the one indictment, would result in prejudice to an accused, is whether the evidence on each of the charges is cross-admissible in respect of the other charges. That consideration has principally informed the approach of courts on the issue of severance, under s 193 of the Criminal Procedure Act, and under its predecessor, s 372 of the Crimes Act.

In Sutton v R,[14] Gibbs CJ expressed the view that where an accused is charged with a number of sexual offences, the charges should not be tried together if the evidence on one count is not admissible on another count.[15] In De Jesus v R,[16] Gibbs CJ, having referred to that observation, stated:

This is a general statement, not limited to sexual cases, and so viewed I respectfully agree with it. Sexual cases, however, are peculiarly likely to arouse prejudice, against which a direction to the jury is unlikely to guard. For that reason, I adhere to the view which I expressed in Sutton v R.[17]

[14](1984) 152 CLR 528.

[15]Ibid, 531.

[16](1986) 61 ALJR 1.

[17]Ibid, 3.

In R v Papamitriou,[18] Winneke P, having referred to De Jesus and Sutton, stated:

… it seems to me to remain a sound approach in cases such as the present for the trial judge, in exercising the discretion given by s 372(3), to determine whether the evidence of the several complainants is cross-admissible, because such a determination will in most cases be a powerful factor influencing the discretion. The capacity to ensure a fair trial for the accused must always be the dominant consideration governing the exercise of the discretion; and the more complainants there are whose evidence is not admissible in the trials affecting other complainants, the more difficult it will be for adequate directions to be given by the trial judge to avoid prejudice occurring to the accused. To that extent, the views expressed by the High Court in De Jesus and Sutton … will remain influential in this State.[19]

[18](2004) 7 VR 375.

[19]Ibid, 388 [27]; see also CGL v DPP [2010] VSCA 26, [8] (Maxwell P, Buchanan and Bongiorno JJA); Velkoski v The Queen [2014] VSCA 121, [64] (Redlich, Weinberg and Coghlan JJA).

While the question of cross-admissibility is central to the issue of severance, nevertheless it is not decisive. If the evidence is not cross-admissible, the critical question, in each case, will be whether the admission of the evidence admissible on some of the charges joined in the indictment carries the risk of impermissible prejudice to the accused in respect of the trial of the other charges in respect of which it is not admissible.[20]
[20]Sutton v The Queen, 542 (Brennan J); De Jesus v The Queen, 5–6 (Mason and Deane JJ), 7 (Brennan J); GBF v The Queen [2010] VSCA 135, [54] (Nettle and Harper JJA, Hansen AJA).

Tendency evidence — legal principles

As stated, the principal submission made by the prosecution in respect of the joinder of the bank charges and the equipment charges against Steve Iliopoulos is that the evidence on each charge is cross-admissible as tendency evidence, pursuant to s 97(1) of the Evidence Act, in respect of the other charges.

Section 97(1) provides that evidence of (inter alia) a ‘tendency’ that a person has or had may be admissible to prove that a person has or had a ‘tendency’ to act in a particular way, or to have a particular state of mind, provided that the court considers that the evidence, either by itself or having regard to other evidence to be adduced by the prosecution, will have ‘significant probative value’. Section 101(2) provides that tendency evidence about an accused may only be adduced by the prosecution if the probative value of that evidence ‘substantially outweighs’ any prejudicial effect that that evidence might have on the accused.

Evidence as to a tendency of an accused person to act in a particular way is, in substance, circumstantial evidence. Unlike ‘coincidence evidence’, which is admissible under s 98, tendency evidence, alone, does not prove any particular fact in issue. Rather, it is a foundation for an inference that an accused acted in a particular way, or had a particular state of mind, in respect of the circumstances which are relevant to the particular case. In other words, tendency evidence, as circumstantial evidence, is directed to the probabilities of the accused acting in a particular way, or having a particular state of mind, as alleged by the prosecution.[21]
[21]Gardiner v R [2006] NSWCCA 190, [124] (Simpson J); R v Cittadini [2008] NSWCCA 256, [22]–[23] (Simpson J, with whom McClellan CJ at CL agreed).

In Elomar v R,[22] Bathurst CJ, Hoeben CJ at CL and Simpson J, in their joint judgment, stated:

As Simpson J has said on previous occasions (for example, Gardiner …), proof that a person has or had a tendency (whether to act in a particular way, or to have a particular state of mind) of itself goes nowhere. Tendency evidence is evidence that provides the foundation for an inference. The inference is that, because the person had the relevant tendency, it is more likely that he or she acted in the way asserted by the tendering party, or had the state of mind asserted by the tendering party on an occasion the subject of the proceeding. Tendency evidence is a stepping stone. It is indirect evidence. It allows for a form of syllogistic reasoning.[23]

[22][2014] NSWCCA 3.

[23]Ibid, [359].

In that way, tendency reasoning, under s 97, is relevantly different to ‘coincidence’ reasoning that is the subject of s 98 of the Evidence Act. As the Court of Appeal recently stated in Page v The Queen,[24] s 98(1) focuses on the improbability of coincidence being the explanation for the similarities in the described events or circumstances relied upon by the prosecution.
[24][2015] VSCA 357, [45].

Where, in a criminal trial, the prosecution seeks to rely on tendency evidence, the court must consider three questions, namely:

(1)Whether the evidence has probative value; that is, whether the evidence is capable rationally of affecting the assessment, by the jury of fact, of the probability of a fact in issue in the trial.
(2)If the evidence has probative value, the court must determine whether that probative value is capable of being perceived by the tribunal of fact as significant.
(3)If the evidence has such significant probative value, the court must determine whether the probative value of the evidence substantially outweighs any prejudicial effect on the accused.[25]

[25]Gardiner v R, [125] (Simpson J).

In Velkoski v The Queen,[26] Redlich, Weinberg and Coghlan JJA considered, in detail, the vast array of authorities, in this State and in New South Wales, relating to s 97. Their Honours concluded from their examination of the authorities, that in order that evidence be admissible under s 97, it must possess ‘… sufficient common or similar features with the conduct in the charge in issue so as to demonstrate a pattern that cogently increases the likelihood of the occurrence of that conduct’.[27]
[26][2014] VSCA 121.
[27]Ibid, [3].

Their Honours explained the reason for requiring a similarity of features in the following terms:

To remove any requirement of similarity or commonality of features does not … give effect to what is inherent in the notion of ‘significant probative value’. If the evidence does no more than prove a disposition to commit crimes of the kind in question, it will not have sufficient probative force to make it admissible. This view, we think, clearly represents the present position of our court reflected in the long line of authority to which we have referred.[28]

[28]Ibid [164].

Redlich, Weinberg and Coghlan JJA proceeded to outline the relevant principles applicable to tendency reasoning as follows:

[169]Neither tendency nor coincidence evidence requires proof, as a condition of admissibility, of ‘striking similarity’. Nor should a trial judge ask whether it would be ‘an affront to common sense’ to withhold evidence of that kind from the jury. Such expressions, taken from the common law, are unduly restrictive when it comes to the construction of the relevant provisions of the Evidence Act.

…
[171The features relied upon must in combination possess significant probative value which requires far more than ‘mere relevance’. In order to determine whether the features of the acts relied upon permit tendency reasoning, it remains apposite and desirable to assess whether those features reveal ‘underlying unity’, a ‘pattern of conduct’, ‘modus operandi’, or such similarity as logically and cogently implies that the particular features of those previous acts renders the occurrence of the act to be proved more likely. It is the degree of similarity of the operative features that gives the tendency evidence its relative strength.[29]

[29]Ibid, [169], [171]; see also Rapson v The Queen [2014] VSCA 216, [16] (Maxwell P, Nettle and Beach JJA; Page v The Queen [2015] VSCA 357, [65] (Maxwell P, Redlich JA and Beale AJA).

It follows from the foregoing that the critical question, in respect of the proposed tendency evidence, is whether there are sufficient common or similar features between the evidence to be adduced in respect of, on the one hand, the banking charges, and, on the other hand, the equipment charges, so as to reveal or demonstrate a pattern of conduct or modus operandi that was common to the two sets of counts. In determining that question, the greater degree of specificity with which the similarities can be identified, the more likely it is that the evidence will be probative of the relevant tendency to act in a distinctive way or to do acts of a distinctive kind.[30] Conversely, the greater the degree of generality with which the similarities are identified, the more difficult it will be to demonstrate that the evidence in question has the requisite significant probative value.[31]
[30]CGL v DPP [2010] VSCA 26, [40].
[31]CGL, [40]; GBF v DPP [2010] VSCA 135, [31].

Analysis and conclusion: severance application by Steve Iliopoulos

As I stated, the prosecution seeks to rely on the evidence on the banking charges, and the evidence on the equipment charges, as being mutually cross-admissible as evidence of a tendency by Steve Iliopoulos, as the chief executive officer of the Viking Group of Companies, to submit, or to instruct or procure other persons to submit, false documents and financial information to banks, in order to obtain finance or credit facilities from the banks for the purpose of funding the operations of the Viking Group of Companies. The first question is whether the evidence of such a tendency, contended for by the prosecution, has probative value that can be properly characterised as significant in respect of the two categories of offences.

If the jury were satisfied that Steve Iliopoulos committed the banking offences, or the equipment offences, in each case such evidence would go beyond proving a disposition by Steve Iliopoulos to be dishonest, whether generally, or in respect of the affairs of the Viking Group of Companies. In each case, the fraud, that is alleged to have been committed, was for the purpose of obtaining funds and financial facilities for the Viking Group of Companies, of which Steve Iliopoulos was the chief executive officer and the major shareholder. The frauds are not alleged to have been committed directly for his own personal benefit, or for any other person’s benefit. Rather, they were directed specifically to funding the operations of the Viking Companies.

Each of the charges alleges a fraud directed to obtaining funding from a bank or a financial institution for the Viking Group of Companies. In other words, the frauds were not committed on a diverse range of persons connected with the Viking Group of Companies, such as the group’s employees, customers, suppliers or creditors. Rather, as I stated, each fraud was alleged to have been perpetrated on a bank or financial institution, in order to obtain a financial facility, or funding under such a facility, for the Viking Group of Companies.

Further, it is not alleged that the funding by the banks was procured, or attempted to be procured, by a diverse range of methods or devices employed by Steve Iliopoulos. Rather, both the banking offences and the equipment offences are alleged to have been committed by him, or by persons instructed by him, by the production and submission to the bank or financial institution of falsified or false financial documents or false financial information.

Taking those matters into account, in my view, if the jury is satisfied that Steve Iliopoulos was implicated in the banking offences as alleged, the evidence of the commission of Steve Iliopoulos of those offences would have probative value in respect of the equipment offences; and, conversely, if the jury is satisfied that Steve Iliopoulos was implicated in the equipment offences as alleged, the evidence relating to the commission by Steve Iliopoulos of those offences would have probative value in respect of the implication of Steve Iliopoulos in the commission of the banking charges. In each case, the syllogistic reasoning, described by the Court of Criminal Appeal of New South Wales in Elomar,[32] would be open to the jury. In other words, if the jury is satisfied, in respect of the banking charges, that Steve Iliopoulos instructed or procured another person (Loukia Bariamis) to produce and submit false financial documents to the bank to obtain the lending facilities that are the subject of the charges, it is, logically, more likely that he was similarly a party to the production and submission of false documents and information to the banks for the purpose of obtaining hire purchase finance as alleged in the equipment charges. Equally, the converse proposition would apply in respect of the probative value of the evidence of the commission by Steve Iliopoulos of the equipment charges, in respect of the likelihood that he was similarly implicated in the commission of the banking charges.
[32][2014] NSWCCA 3, [359].

In that way, the evidence of the commission by Steve Iliopoulos of charges within one of the categories of offences (for example the banking charges) would have the capacity to rationally affect the assessment by the jury of whether Steve Iliopoulos was similarly involved in the commission of offences within the other category of charges (for example the equipment charges), and vice versa.

The important question is whether the evidence, in respect of each category of offence, is probative, in that way, of the commission by Steve Iliopoulos of the offences within the other category of charges, to a significant degree.

As the Court of Criminal Appeal stated in Velkoski,[33] that question depends on a consideration of the similarities of the characteristics between the two categories of offences, and, in particular, on whether those characteristics have such common features as to display a particular underlying unity, pattern of conduct or modus operandi that was common to each of the two sets of offences that are under consideration in this case.
[33][2014] VSCA 121, [169]–[171].

As I stated, in each charge, the fraud alleged to have been committed by Steve Iliopoulos was for the purpose of obtaining funds for the Viking Group of Companies, of which he was the chief executive officer and the major shareholder. Each charge concerns an application for funding, on behalf of the Viking Group, to a bank or financial institution.

In respect of each charge, Steve Iliopoulos either personally made the application for funding, or was involved in and connected with the application for funding. Steve Iliopoulos signed the relevant loan documents, on behalf of the Viking Company, that are the subject of count 1, and counts 3 to 7. He attended meetings with bank officials at which the credit applications, that are the subject of counts 8, 9 and 15, were discussed. In respect of counts 10 to 14, he was copied into the emails that members of Viking staff sent to the CBA, to which were attached the fabricated Knights Motors tax invoices.

As I stated, in each charge, it is alleged that the fraud consisted of the submission to the bank or financial institution of false financial documents or false financial information. In other words, it is not alleged that the various frauds were committed by diverse and different forms of devices. It is, of course, the case that the bank frauds were committed by the production and submission of false Vovos documents, and falsified debtor trial balances. On the other hand the equipment offences were committed by the production and submission of falsified Knights Motors tax invoices. To that extent, there is a difference in the methodology adopted in respect of the two sets of charges. However, the different methodology is explicable by reason of the different form of finance, or financial accommodation, that was the subject of the application. That difference should not obscure the fact that, in each case, the fraud was committed by, as I say, the production and submission of false financial documents and information for the purpose of obtaining the finance or the financial facility. In that way, there was an important similarity in the modus operandi employed in respect of each of the two sets of charges.

Mr Dempsey also relied on the fact that Loukia Bariamis played a central role in the commission of the banking offences, but not in the commission of the equipment offences, as an important difference in the methodology employed in the commission of those two groups of offences. That factor is , of course , a relevant consideration. However, the difference in the roles played by Loukia Bariamis in respect of the two types of offences is, again, a reflection of the different forms of finance that was the subject of the applications to the banks that are, respectively, the subject the two sets of charges, and of the different roles and responsibilities of Loukia Bariamis and Carly Hartley in the Viking Group organisation. The fact remains that, in the case of each form of funding, false financial information was produced and supplied for the direct purpose of securing that form of finance.

Further, in each case, the false documents provided to the bank or financial institution consisted of confined and specific categories. In the case of the banking charges, they largely consisted of falsified Vovos/Meridian documents, and falsified debtors trial balances. In the case of the equipment charges, they largely consisted of falsified Knights Motors tax invoices, and, on occasion, falsified banking documents proving payment of those invoices. In other words, the banking offences were, to a large extent, alleged to have been committed by the use of specific and restricted methodology. Equally, the equipment offences were alleged to have been committed by a particular specific and limited method of fraud. That is, within neither set of charges, did the perpetrator resort to a variety of different types of frauds.

In this connection, it is also noteworthy that each of the equipment offences are alleged to have been committed by the production of counterfeit documents (Knights Motors tax invoices). Charges 3, 5, 7 and 8 of the banking charges (but not charges 9 and 15) are also alleged to have been committed by the production (inter alia) of counterfeit documents, namely, falsified Vovos/Meridian accounting documents. In the case of both sets of counterfeit documents, Steve Iliopoulos or the Viking Group had a particular relationship with the party whose documents were falsified. Knights Motors was owned by Kon Iliopoulos, the brother of Steve Iliopoulos. In 2006, Alex Vovos was appointed the accountant for the Viking Group of Companies.

By reason of the above matters, there are significant common features pertaining to the banking offences and the equipment offences.

In addition, the two groups of offences were not discrete. Rather, to a significant degree, there was an interrelationship between the financial facilities, that are the subject of the banking charges, and the funding, that is the subject of the equipment charges.

As I have already noted, as part of the financial facilities, or increase in financial facilities, that are the subject of the banking charges, the Viking Group applied for, and was granted, either an asset funding facility, or an increase in an existing asset funding facility. The equipment charges, that relate to the CBA (count 6 and counts 10 to 14), each concern hire purchase finance obtained by the Viking Group under such an asset funding facility, or increased asset funding facility, that was part of the financial facilities applied for and granted by the CBA, and that are the subject of the banking charges. In other words, the equipment charges relating to the CBA (count 6 and counts 10 to 14) each relate to what might be described as ‘draw downs’ by the Viking Group on the asset financial facilities provided by the CBA, and which were part of the facilities that are the subject of the banking charges.

In this respect, there is a particular connection between the banking offence alleged in charge 9, and the equipment offences alleged in charges 10 to 14. Charge 9 concerns negotiations between the Viking Group and CBA for significant further funding ($17.4 million) undertaken between June 2010 and September 2010. As a result of the application, the further financial facilities requested, were granted on 5 October 2010. Charges 10 to 14 are alleged to have been committed between 29 October and 18 November 2010. The negotiations, that were commenced in June, arose from cash flow problems experienced by the Viking Group of Companies, as a result of which the Viking Group applied for and was granted temporary excesses by CBA. During the negotiations, it was represented to the CBA that one of the reasons for the cash flow problems was that Viking had been using its cash profits to purchase equipment, rather than buying the equipment on credit. The evidence of Barry Heib (the area manager of CBA) is that CBA agreed that Viking be entitled to re-finance with it the equipment that Viking had recently purchased from its cash reserves. In effect, CBA would purchase the equipment from Viking and then hire it back to Viking. As a result of that commitment by CBA, the commercial hire purchase agreements, that are the subject of charges 10 to 14, were entered into. In each case the hire purchase agreements were obtained by the production of false Knights Motors tax invoices.

The interconnection between the banking charges and the equipment charges is also demonstrated by the connection between charges 5 and 6. Charge 5 relates to financial lending facilities obtained from the CBA on 22 July 2009. Charge 6 concerns a large amount of hire purchase funding ($795,000) applied for and obtained by Steve Iliopoulos for VAM secured by seven vehicles that VAM owned. The application for funding was supported (inter alia) by false tax invoices from Knights Motors in respect of each vehicle.

There was also a relationship between charge 3 and charge 4. The financial facilities, that are the subject of charge 3, are also interconnected, to some extent, with the provision of hire purchase finance by the Adelaide Bank on 8 August 2008, that is the subject of charge 4, in the manner that I have outlined in paragraph described in paragraph 62 (above).

In those circumstances, there are significant and particular common features between, on the one hand, the bank offences, and, on the other hand, the equipment offences. In each case, they support the existence of a tendency to engage in a particular form of fraud (the provision of false financial documents and information) for a particular specific purpose (the funding of the operations of the Viking Group). As indicated, there are important similarities and common features in the methodology that is alleged to have been employed in respect of each group of offending. Further, the two sets of offences are not discrete. On the contrary, they are necessarily and relevantly interconnected and interwoven. In that way, I am persuaded that there is, in respect of each set of offences, demonstrated to be a common modus operandi, underlying unity or pattern of fraudulent conduct, such as to invest the evidence in respect of offences falling within one of the categories of offending (for example the banking offences), with significant probative value in respect of the offences falling within the other category (for example the equipment offences). I am, therefore, persuaded that, the tendency evidence, sought to be relied on by the prosecution, would have significant probative value in respect of each category of charges.

In light of that conclusion, the next question is whether, pursuant to s 101(2) of the Act, the probative value of the tendency evidence substantially outweighs any prejudicial effect it may have on the accused, Steve Iliopoulos. On behalf of Steve Iliopoulos, it is submitted that if the jury were satisfied that he was implicated in the commission of the bank offences, the evidence relating to those offences would convey the suggestion that he had a tendency to be dishonest, and to engage in fraudulent activities. Thus, it is submitted that there is a significant risk that if the charges are heard together, the jury might engage in impermissible propensity reasoning, notwithstanding any direction given by me to the jury.

The evidence, as to the implication of Steve Iliopoulos in the offending in each category of the charges, does reveal serious dishonesty on behalf of Steve Iliopoulos. Thus, if the jury was satisfied that Steve Iliopoulos was implicated in offences falling within one category of charges, there is a risk that the jury might be tempted to engage in the impermissible reasoning described by Mr Dempsey. It is for that reason that, in such a case, it would be necessary to direct the jury not to engage in such a form of reasoning.

It has long been the experience of the courts in this State that juries are assiduous in adhering to directions given by trial judges of the kind that I would give in this case, if the evidence were to be admitted as tendency evidence. In particular, it is common, in cases in which charges against an accused, alleging separate offending, are heard together, for there to be a risk that the evidence in relation to one or more of the charges might demonstrate the accused to be a person of bad character, either generally, or in a particular respect. In such cases, it is the experience of the courts that, provided that they are given appropriate directions, juries, by their verdicts, have tended to be quite discriminating in respect of the charges on which an accused is convicted, and the charges on which the accused is acquitted. The verdicts of the juries in those cases vindicate the confidence that the legal system places in the integrity and capacity of juries to abide by the type of direction that would be required in this case.

As I stated, the offending, alleged in respect of each category of the charges, is serious. However, as observed by Mr Brown, it does not contain the emotive or egregious overlay that is a feature of a number of cases in which tendency evidence is commonly relied upon, and, in particular, in cases involving the sexual abuse of minors. Taking those matters into account, I am satisfied that the significant probative value of the tendency evidence, sought to be relied on by the prosecution in this case, does substantially outweigh its potential prejudicial effect.

Accordingly, the evidence on the bank charges, and the evidence on the equipment charges, against Steve Iliopoulos, are cross-admissible as tendency evidence. As correctly accepted by counsel for Steve Iliopoulos, in those circumstances there is no basis upon which I should make orders for separate trials of the banking charges and the equipment charges.

It follows that the application by Steve Iliopoulos, to sever the indictment are refused.

Conclusion: severance application by Peter Iliopoulos

As I have earlier noted, Mr Glynn, on behalf of Peter Iliopoulos, correctly accepted that if the severance application by Steve Iliopoulos is refused, the application by Peter Iliopoulos for severance of the indictment should also be refused.

Conclusions on severance of charges 2 and 16 against Vasilis Bariamis

The application by Vasilis Bariamis, to sever charges 2 and 16, raises two principal issues, namely:

(a) Whether charges 2 and 16 are ‘related to’ the banking charges against Bariamis (charges 7, 8, 9 and 15).

(b) If so, whether in the exercise of my discretion, under s 193(3) of the Criminal Procedure Act, I should sever the charges, on the basis that the joinder of them in the same indictment might prejudice the fair trial of Mr Bariamis.

As I have outlined earlier, the term ‘related’, as defined in s 3 of the Criminal Procedure Act, has been given a broad connotation, in order to give effect to the underlying purpose of the rules contained in schedule 1 of the Criminal Procedure Act. Accordingly, as Mr Brown pointed out in the course of submissions, in a number of cases, charges have been characterised as being ‘related’, notwithstanding that there are important differences between them.[34] Nevertheless, as Tadgell JA pointed out in R v McLean,[35] there must be demonstrated to be a relevant nexus between the charges so that they may be properly described as ‘related’.
[34]See for example Ludlow v Metropolitan Police Commissioner [1971] AC 29; R v Clayton-Wright [1948] 2 All ER 763; R v McLean (2000) 2 VR 118.
[35]Ibid, 129 [25].

In this case, there are clear and substantial differences between charges 2 and 16, on the one hand, and the banking charges against Vasilis Bariamis, namely, charges 7, 8, 9 and 15. The first, and most significant, difference is that the banking charges all involve applications to banks or financial institutions to secure financial facilities and funds for the operations of the Viking Group of Companies. On the other hand, charges 2 and 16 arise out of applications by Mr Bariamis for hire purchase finance in respect of motor vehicles that he had acquired for his own personal use. There is no connection, at all, between the transactions that are the subject of charges 2 and 16, and the Viking Group of Companies.

The second difference is that the charges are significantly unconnected in point of time. The offence in charge 2 is alleged to have been committed by Mr Bariamis on 27 June 2008. The earliest banking offence alleged to have been committed by Mr Bariamis (in charge 7) occurred on 13 November 2009, that is, 17 months after the events the subject of charge 2. The latest banking charge alleged against Mr Bariamis (charge 15) concerns an offence committed on 26 November 2010. Charge 16 alleges an offence committed by Mr Bariamis on 16 August 2011, that is, nine months after the last banking offence to which he is alleged to be a party.

A third difference is that charges 2 and 16 allege offences that Vasilis Bariamis committed on his own. It is not alleged in the charges, or in the prosecutor’s opening, that Mr Bariamis committed those offences in a joint criminal enterprise, or with the assistance of, Loukia Bariamis or any other person. By contrast, each bank charge against Bariamis alleges offences committed by Mr Bariamis together with Steve Iliopoulos and Loukia Bariamis, and, in the case of charges 9 and 15, also with Peter Iliopoulos.

In my view, those matters, taken together, compel a conclusion that charges 2 and 16 do not have the necessary nexus with the banking charges against Vasilis Bariamis so that they can be properly characterised as being related, notwithstanding the wide connotation of that term in the context of the Criminal Procedure Act.

Indeed, as emerged in the course of submissions, if charges 2 and 16 were heard separately to the banking charges, none of the evidence, in respect of the equipment charges, would be relevant to the prosecution of the banking charges. Conversely, very little evidence, adduced in respect of the banking charges, would be relevant to the prosecution of the equipment charges. Certainly, as Mr Brown pointed out, it would be relevant, in such a case, for the prosecution to adduce evidence that, by the time of the commission of the offence charged in count 16, it was common knowledge that Loukia Bariamis had fabricated the Vovos documents that are the subject of the banking charges. However, such evidence would be given, I expect, in quite short compass. The lack of connection, of the evidence to be adduced in respect of charges 2 and 16, and the banking charges, reinforces my conclusion that the two sets of charges are not related.

The second basis, upon which the prosecution contends that the charges are related, resides in the common feature between charge 8, and charges 2 and 16, in that in respect of each charge the documents proffered to the finance company included falsified Vovos accounting documents.

In my view, that common feature between charges 2 and 16 on the one hand, and charge 8, is not sufficient to characterise those charges as related. The false representations, alleged in charge 8, also include other information provided to Westpac, as to the identity of the principal customers of the Viking Group. Further, the offence charged in count 8 occurred two and one half years after the offence alleged in charge 2, and five months before the offence alleged in charge 16. In addition, as I have already indicated, there are significant differences between charges 2 and 16 on the one hand, and charge 8, that I have already discussed. In particular, charge 8 (like all the other banking charges) concerned an application for financial facilities on behalf of the Viking Group of Companies. Charges 2 and 16 were, as I stated, based on applications by Mr Bariamis for purely personal financial purposes. Bariamis is alleged to have committed the offence charged in count 8 in a joint criminal enterprise with Steve Iliopoulos and Loukia Bariamis. He is alleged to have committed the offences, that are the subject of charges 2 and 16, alone. Taking all those matters into account, I am not satisfied that there is a sufficient nexus between charges 2 and 16, on the one hand, and charge 8, to justify a conclusion that those charges are related.

Further, if, contrary to the above, I were satisfied that charges 2 and 16 are related to charge 8, such a conclusion would not justify the joinder of charges 2 and 16 with the other banking charges against Vasilis Bariamis, namely, charges 7, 9 and 15. In R v McLean,[36] Tadgell JA, having referred to the decision of the Queensland Court of Appeal in R v Collins; ex parte Attorney-General,[37] stated that that decision:

… would appear to support the following proposition: where three charges (call them X, Y and Z) are joined, and the joinder of X and Y and Y and Z is clearly valid, the joinder of X and Z can be justified only if those two could stand had Y not been included. A conclusion that X and Z are, in the relevant sense, founded on the same facts is not precluded, however, merely because facts material to X are not material to Z, provided that there are other facts fairly material to both X and Z. Before determining that there is no appropriate nexus between X and Z, regard is to be had not only to features that differentiate or distinguish them one from another but the features that they share in common.

[36](2000) 2 VR 118, 130 [26].

[37][1996] 1 Qd R 631.

As I stated, there is not demonstrated to be a sufficient nexus between charges 2 and 16, and any of the banking charges, including charges 7, 9 and 15. Thus, if, contrary to the above conclusion, I had accepted the submission made on behalf of the prosecution that charges 2 and 16 are related to charge 8, that conclusion would not justify the joinder of charges 2 and 16 with charges 7, 9 and 15.

For the foregoing reasons, I have reached the conclusion that charges 2 and 16 were not properly joined with charges 7, 8, 9 and 15 against Mr Bariamis in the indictment. It follows that I should make an order severing charges 2 and 16 from the indictment.

That conclusion renders it unnecessary for me to decide whether, if the charges were related, I would otherwise exercise my discretion to sever the charges under s 193 of the Criminal Procedure Act. Nevertheless, it is appropriate that I indicate that, if I had concluded that the charges were related, I would have exercised my discretion to sever charges 2 and 16.

It is clear that the trial of the remaining charges on the indictment will last for at least three months, if not more. A substantial body of evidence, both viva voce, and in the form of exhibits, will be placed before the jury in relation to the charges that concern the applications for finance and funding for the Viking Group of Companies. By contrast, the evidence relating to charges 2 and 16 is relatively confined. If charges 2 and 16 were heard in the same trial as the remaining charges, there is a significant risk that a proper consideration of them, as individual and unrelated charges, could be overwhelmed by the jury’s focus on the large volume of material which it must consider in respect of the charges that concern funding for the Viking Group. In those circumstances, there is a realistic risk that, if the charges are not severed, Mr Bariamis would not be given a fair trial on charges 2 and 16.

In addition, it is appropriate to take into account that, in light of the heavy burden that will lie on the jury in any event, it is undesirable that the jury be required to consider unrelated charges. While, as I stated, the evidence in relation to charges 2 and 16 will be of relatively short compass, nevertheless the consideration of those charges will be a further, and unnecessary, burden on the jury. By contrast, as I stated, there is little evidence, to be adduced in respect of the banking charges against Vasilis Bariamis, that would be relevant to the prosecution of charges 2 and 16. In those circumstances, I do not consider that the prosecution would suffer any unfair disadvantage, prejudice or inconvenience arising out of the severance of those charges.

Summary of conclusions

For the reasons that I have stated, I have reached the following conclusions:

(1)The evidence in respect of the banking charges against Steve Iliopoulos, and the evidence in respect of the equipment charges against Steve Iliopoulos, is mutually cross-admissible as tendency evidence pursuant to s 97 of the Evidence Act.
(2)Accordingly, I refuse the application made on behalf of Steve Iliopoulos to sever the indictment.
(3)It follows that the application by Peter Iliopoulos, to sever the indictment, should also be refused.
(4)Charges 2 and 16 are not related to charges 7, 8, 9 and 15 against Vasilis Bariamis. Accordingly, those charges should not have been joined in the same indictment, and they will be severed from it.
(5)If, contrary to that conclusion, I had formed the view that the charges were related, I would have made an order, pursuant to s 193 of the Criminal Procedure Act, that charges 2 and 16 be tried separately to charges 7, 8, 9 and 15.

[2016] VSC 32

5 February 2016