Director of Public Prosecutions v Katsabis
[2014] VCC 1101
•9 July 2014
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL DIVISION
Case No. CR-13-01727
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| BILL KATSABIS |
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JUDGE: | Her Honour Judge Hampel | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 March 2014, 14 March, 2014, 11 April 2014, 30 June 2014 | |
DATE OF SENTENCE: | 9 July 2014 | |
CASE MAY BE CITED AS: | ||
MEDIUM NEUTRAL CITATION: | [2014] VCC 1101 | |
REASONS FOR SENTENCE
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr G. Schubert | OPP |
| For the Accused | Mr D. Hancock (7 March 2014) Mr R Van der Wiel QC | Comlaw Solicitors Rickards Legal |
HER HONOUR:
1 Bill Katsabis, in June 2004 you became one of three directors of PG & N Enterprises Pty Ltd. It operated and traded as Degani at Botannica café, in Richmond.
2 In December 2007, one of the directors, Nicholas Mitsios, resigned as a director. He had no involvement or stake in the business operated by the company after that, although he continued to act as the company’s external accountant. Mr Mitsios was also a director of Kavla Corporation Pty Ltd (Kavla), the owner of the premises at Swan St where the company’s business operated.
3
In 2009, the company was experiencing financial difficulties. Turnover had dropped as a result, amongst other things, of the loss of a major client which was itself decimated by the global financial crisis. The company was behind in payments to the tax office, Kavla, the landlord and other creditors. In December 2009, Mr Mitsios met with you and your co-director, Paul Volteas, to discuss his concerns about the company’s solvency. In March 2010,
Mr Volteas resigned. That left you as the sole director and stakeholder in the company and the Degani at Botanica business. You decided to try to trade out of the company’s difficulties. I was told you had invested $240,000 in the business when you had become a director in 2004, and wanted to try to recoup your stake, or at least not to lose it. Although I was told the business was beginning to turn around in late 2010, the company continued to be in arrears with the tax office, the landlord and other creditors.
4 In March 2011, you put the business on the market, but had not received any offers by 25 April 2011. On that day, a fire substantially damaged the premises and the business never operated again.
5 An insurance claim was promptly lodged, and promptly paid. Wesfarmers General Insurance paid the company a total of $580,000. That was paid into a new account opened by you with the Commonwealth Bank after the fire, and after the café stopped trading. You were the sole signatory on this account. The material in the depositions indicates that the company’s business account before the fire was with the National Australia Bank. The first insurance payment of $80,000 was made into the new account on 6 June 2011, and about 2 months later on 3 August a further $500,000 was paid into it.
6
Over the following four and a half months, between 7 June 2011 and
25 November 2011, you withdrew a total of $536,418.53 from that company account, for purposes unrelated to the business of the company. At the time of the fire and in the period of your offending that followed, the company was being pursued by creditors, as it had been in the period from 2009 up until the time of the fire.
7 By October 2011, a winding up application had been lodged by one of your creditors, a supplier, and on 23 November 2011 a winding up order was made. The last withdrawal was made by you two days after the appointment of the liquidators.
8 You employed a variety of means to withdraw that large sum of money from the company account:
o You wrote over 29 cheques on the company account to cash totalling $286,700. The last of these was to the value of $9,900. It was withdrawn on 25 November, that is after the appointment of the liquidator, and was returned to the liquidator by you at his request the following day;
o You made a transfer of $40,000 to a bank account in your name and controlled by you;
o You made transfers from the company account into accounts in your wife’s name, or accounts that were for the benefit of your young children. In respect of the children's accounts you or your wife were authorised signatories to those accounts. Those transactions to your wife and children totalled $180,000;
o You purchased four wrist watches at a cost of $20,600.80;
o You wrote a cheque in the amount of $23,000 in favour of ‘Bib Stillwell’; and
o You authorised two transactions totalling $59,964.34 to an account held by Australian Coin and Bullion Exchange Pty Ltd.
9 It is those circumstances, the transfers or withdrawals of those moneys paid by the insurer into the company account and transferred or withdrawn by you, that give rise to your guilty plea to Charge 1, a rolled up charge of dishonestly using your position as a director by taking that $536,418 from the company account, reckless as to whether that would result in detriment to the corporation, namely an inability to pay its creditors.
10 You first met with the liquidators on 26 November, three days after the making of the winding up order and a day after the final withdrawal had been made by you from the account into which you had directed the insurance payment. On that day you handed over, on request, the $9,900 cash you had withdrawn the previous day from the account. At that stage you told the liquidator you were a gambling addict and that the moneys which you had withdrawn were all lost gambling.
11 On 13 December 2011, you signed and adopted a ‘Questionnaire for Directors’ in which you declared that in your estimation the company had no assets, that is you said the value of the assets, or you estimated the value of the assets of the company as $0. You estimated the debts to be around $400,000.
12 In January 2012, you provided the liquidator with a written explanation for some of the withdrawals of the insurance payout. Two transfers, of $40,000 each, you said had gone to an account in your wife’s name. Two transfers, of $50,000 each, to an account in the name of your infant son, and account to which, as I have said, you and your wife were signatories. Two transfers, of just under $30,000 each, for the purchase of gold bullion. Of the $286,700 withdrawn in cash, you said that most had been spent on “living expenses”, save for $49,100 of that cash which you said had been used to purchase more gold bullion.
13 A month later, you told the liquidator some of the bullion had been sold for living expenses and the rest stolen when your house was burgled.
14 The liquidator’s investigations identified debts from unsecured creditors of the company to a value of $461,661.78. This comprised moneys owing for rent, outstanding tax, accounting fees, electricity and the supply of food and produce for the business. As can be seen from this amount, the insurance payout would have covered the moneys owing to the creditors and left the company with a balance in excess of $100,000.
15 At the first day of the plea hearing, 7 March 2014, I was told it was agreed between the parties that the unrecovered amount of funds depleted by your actions stood at $325,418.53.
16 By the resumed date of the plea hearing, 3 July 2014, Mr Timothy Holden, a registered liquidator of the firm Foreman’s Business Services, had been retained to review the quantification of the amount sought as reparation. Correspondence between the liquidator and Mr Holden confirmed the following sums had been applied to reduce the amount still unrecovered to that sum:
Cash returned by you at that first meeting with the liquidator 9,900.00 Funds recovered from company bank account by the liquidator at the time of liquidation 23,270.80 Amount paid to the National Australia Bank following assignment of security held by it to your wife, and subsequent relinquishment of a claim for proof of debt in respect of that by her against the company 75,000.00 Amount agreed to be repaid by your wife, Lisa, to the liquidator in settlement of the claim for the return of the $180,000 paid into accounts in her name or that of your infant son 105,000
17 On the resumed plea hearing, I was also told you also claimed an amount of $42,000 should be deducted from the outstanding amount, and so, from the reparation order sought, for unpaid wages. You asserted that you were entitled to wages of $1,200 per week for the 27 weeks from the date of the fire until the date of the appointment of the liquidator, and a further eight weeks of accrued annual leave, again at $1,200 per week. The liquidator rejected that claim, noting, amongst other things, that you had not made any claim for unpaid wages in the report as to affairs filed with the liquidator, and that the claim covered the period when the business had ceased to operate, and when you were, as your guilty plea to Charge 1 acknowledged, dealing with company funds in a manner which left it unable to pay its creditors. Ultimately it was agreed an amount of $4,200 was payable to you by way of unpaid wages, and that now has also been deducted from the net reparation amount.
18 No other funds have been recovered. I was told the cash cheques were applied to living expenses or gambling. Nothing was put about the use to which the moneys paid into the accounts in the names of your wife and children had been put, save for being told that $105,000 of the $180,000 had since been paid to the liquidator in settlement of a full claim against Ms Katz, by her. Nor was I told what the payment to Bib Stilwell, which had been traced to SMG European Cars, was for. I was told that the bullion that was not on-sold was, along with the wrist watches, stolen in a burglary on your home and that an insurance claim for those items had been rejected.
19 There was no evidence put before me to support what was put to me in respect of the application of the proceeds of the cash cheques to living expenses and gambling. It is certainly an extraordinary amount of money to spend over a four month period. That is, there was no evidence. There was repetition to me in various forms of your assertions to your lawyers, your character witnesses and your treating psychiatrist to that effect. Nor was there any evidence to support your instructions about the sale of the bullion and the loss of the watches and remaining bullion in a burglary.
20 By the time of the resumed plea hearing, you had paid $80,000 to the liquidator. The upshot of all this is that the company’s unsecured creditors have not been paid what they were owed. You have now accepted that you are not entitled to the claim for 27 weeks wages and accrued leave in respect of the period following the fire and have accepted the liquidator’s position that your maximum wages entitlement is $4,200. You have agreed to a reparation order being made in the respect of the outstanding or unrecovered amount, which, taking into account the $80,000 reparation and the $4,200 claim or offset for wages, comes to $241,218.00.
21
Charge 2 relates to the undisclosed transfer of the company car on
9 September 2011. The car, a Lexus RX350 wagon, was the subject of a hire purchase agreement between the company and the NAB. After the company had stopped trading, and during the period that you were applying the insurance payout to your own ends, you drew a cheque from the company account for $36,166.42 to pay out the finance, and directed that the ownership of the car be transferred to your wife’s name. No cash consideration was paid to the company for the transfer. I was told the business your wife and her father own, a Degani café in Chadstone, had previously directed payments for services provided by it to a third party into the company account and those payments had then been offset against the book value of the Lexus after the hire purchase had been paid out. Thus your family retained the benefit of the Lexus.
22 When completing the ‘Questionnaire for Directors’ in December 2011, that I referred to earlier, you identified the Lexus as a company asset, in response a requirement to identify assets of the company that in that in the last year had been ‘subject to a specific charge such as a hire purchase item’. You asserted that all items identified by you as subject to a charge, including the Lexus, were damaged in the fire. In response to another question in the questionnaire, you specifically denied that you or ‘any member of your family during the two years prior to liquidation owned or had in your possession any property originally purchased by the company.’
23 Failure to disclose a transaction such as this denies a liquidator the true picture of a company’s position at the time of winding up and so hampers the liquidator’s ability to ascertain the true circumstances of the company’s assets and debts, to determine what action to take and whether to take appropriate recovery action.
24 By the time the circumstances surrounding the transfer of the Lexus to your wife had occurred the finance contract had been paid out, legal ownership had been transferred to her and consideration for the transfer had been identified (by the offset of moneys said to be held by the company of behalf of the business operated by your wife and father-in-law in lieu of cash payment for the Lexus). The lease payout amount was unable to be recovered and the car could not be reclaimed and realised to contribute to meeting the company’s debts.
25 It is this conduct that gives rise to your plea of guilty to Charge 2, one charge of failure by an officer of the company to disclose all property of the company to the liquidator.
26 ASIC sought to interview you on 20 September 2012. You declined to answer questions. You were ultimately charged and indicated your intention to plead guilty to these two charges at a committal 12 months later, that is in September 2013. I accept this as a plea of guilty entered at an early stage and you are entitled to the benefit of that.
27 A thorough and competent plea was presented by Mr Hancock on the listed day, 7 March 2014. He relied on your early plea of guilty, the delay in the finalisation of the matter, from 2011 (the time of the fire) through to 2014 (the time of the plea), your absence of prior convictions and positive evidence of good character. He detailed your background and education, your employment history, your family and social circumstances, the circumstances leading up to the offending and existing during the period of offending and the change in your circumstances since then. All of these matters, he submitted, showed that the offending was out of character and demonstrated your excellent prospects for rehabilitation. In support of that, he also relied upon the circumstances of the offending and your expressions of remorse. When I say the circumstances of the offending, the peculiar circumstances that obtained at the time. Finally, he relied upon a report from Dr Richard Baker, your consultant psychiatrist. You had first consulted Dr Baker in July 2013, and according to his report you had attended “about 10 sessions” with him up to the time of the original hearing of the plea. Mr Hancock, in reliance on the report of Dr Baker, submitted that all six Verdins[1] principles were applicable and thus operated so as to significantly reduce the sentence otherwise appropriate.
[1] R v Verdins; R v Buckley; R v Vo [2007] VSCA 102.
28 A large bundle of testimonials attesting to your otherwise good character, and the belief of the testimonial providers that this was out of character offending, was provided. Your 20 year history of successful endeavour in the hospitality industry was detailed. Your background, as the loved and loving son of hardworking Greek immigrant parents, as a good and caring brother and as a devoted husband and father to two young boys, was also detailed. All of this was supported by the testimonials and the presence of family members, friends and business associates at court.
29 It was put on your behalf that the offending occurred at a difficult time for you. In addition to being left the only remaining of the three original participants in the Degani at Botanica business at a time that it was struggling under a double burden of increasing debt and reduced turnover, your father was becoming increasingly frail. Over a period of about ten years you had seen him decline as his Alzheimer's progressed. Then serious physical illnesses supervened. Diagnosis was slow and treatment uncertain. It was put the combination of the fire destroying the business, on top of these other matters, led to a destructive cycle of gambling and depression.
30 Dr Baker diagnosed you as suffering from major depressive disorder, dysthymic disorder and gambling disorder. In his opinion, and based on your account to him, you had suffered from dysthymic disorder for many years, since your late teens or early 20s and you were suffering from that and major depressive disorder and gambling disorder at the time of the offending. In his opinion by the time of the writing of the report, you still had some symptoms of dysthymia and depression. He was of the view your gambling disorder was under control, as your wife had imposed financial limitations on you, but you were at risk of relapse.
31 In response to a specific question about the effect of the diagnosed conditions at the time of the offending on your ability to understand the wrongfulness of your actions, to think clearly and make calm, reasonable decisions, appropriate judgements or to control your emotions and faculties, Dr Baker said:
"It is possible that at the time he did not understand the wrongfulness of his actions and his ability to make calm reasonable decisions with appropriate judgment would have been clouded. His impulses to try to counteract the inner distress would not have been under control."
32 I was concerned about this, and other parts of Dr Baker’s report, and raised it with Mr Hancock. This particular passage suggested that you were not criminally responsible for your actions. Dr Baker offered his opinion generally on your prospects for rehabilitation, but provided no support for that opinion. Understandably perhaps for a treating doctor, he had no information other than your retrospective self-report about the gambling and about the severity of your symptoms at the time of the offending.
33 The evidence in the depositions in relation to the extent to which the insurance funds were spent on gambling was contradictory. So too was the material put on the plea. In any event, as Court of Appeal in Grossi[2] has made clear, the need to obtain money to support a gambling addiction or disorder is no mitigator. When that was raised by Mr Schubert, Mr Hancock in reply submitted that he did not place a heavy emphasis on the gambling, relying instead on the diagnosis of serious depressive illness at the time of the offending. However, that made it even harder to work out what reliance to place on Dr Baker’s opinion, as he had acted on the history that he had been given that the funds were essentially used for gambling and his diagnoses were intertwined.
[2] R v Grossi [2008] VSCA 51.
34 Mr Schubert submitted that Dr Baker's opinion was also limited by the fact that it was based on retrospective self-report, now partly disavowed, that there was no connection between the diagnosed major depressive disorder and the offending. He also submitted that the weight to be given to remorse should be limited, as it went no further than regret for the position that you now found yourself in, and suffered from the defects identified in Barbaro and Zirilli,[3] namely that the expressions of remorse were contained in an unsworn statement by you, in the hearsay accounts of character witnesses and a treating doctor.
[3] Barbaro; Zirilliv R [2012] VSCA 288.
35 The matter was adjourned for sentence the following week and I remanded you in custody. The day before I was due to sentence you I was told you had retained new lawyers, that you considered matters had not been put as they should have been in accordance with your instructions and that you wished to make further submissions, particularly about the amount outstanding and to amplify and support the matters in Dr Baker’s report.
36 Although an unusual request and although the original plea appeared to me to have been well prepared, competently presented and presented on instructions, I did not proceed to sentence and adjourned the matter. I ultimately granted further adjournments at your request to allow more time to compile the additional materials on which you sought to rely.
37 And so it was that the matter came back on last week, four months after the original plea had been presented.
38 Mr Van de Wiel, who had appeared for you from the time that I was asked to vacate the first sentencing date, told me that Dr Baker had refused to provide a further report, or to agree to attend court and submit to questioning about his opinions, asserting that he was a treater. That as he should know, is no basis for refusing to attend. His refusal to provide a further report or to attend and the decision not to subpoena him, means that I am left in a position where I take the view that he was not prepared to submit to questions or to explain or justify his opinions.
39 A further report was commissioned from and provided by Dr Lester Walton. He did not support the opinion of Dr Baker that you did not, or possibly did not understand the wrongfulness of your actions, or that your ability to make calm reasonable decisions with appropriate judgment would have been clouded. He did not diagnose you as suffering from a gambling disorder. He in fact excluded that as a diagnosis.
40 His observations of you, when he assessed you in custody, were consistent with Dr Baker’s diagnosis that you were suffering major depressive disorder. Although, in his opinion, you were not suffering a gambling addiction or disorder, there had been, he considered, a compulsive aspect to your gambling at times. Based on your account to him, he considered it to be a desperate and forlorn attempt to offset a depressed mood, with excitement, and he said that is something symptomatic of depression, not an indicator of an independent addictive disorder.
41 He went on to say in paragraph 2 of his opinion:
"To the best of my knowledge there has never been a case where major depression in the absence of psychotic disturbance has been accepted as a disease of the mind and formed the basis for a defence of mental impairment. That would seem to automatically preclude the proposition but, furthermore, in my opinion Mr Katsabis at no stage reached a point where he could be said to have been unable to reason with a moderate degree of sense and composure as to the wrongfulness of his actions, especially so given that the offending occurred over an extended period of time. If anything, it seems that Mr Katsabis was guiltily aware of his wrongdoing which further compounded his depression, despite his increasingly desperate attempts to offset that.
That said, it is a well-recognised phenomenon that persons suffering from major depressive disorders may engage in out of character behaviour of a dishonest nature. The classic example is the middle aged female shop thief but similar dynamics operate in other contexts, especially the fruitless and rather frantic acquisition of material goods or pursuing what would otherwise be pleasurable activities, to try and offset the depression. Furthermore, there may be an element of self-destructiveness where the person engages in offending which is likely to be detected, a deliberate seeking of punishment to try and assuage pathologically-based guilt. Of course, I cannot assert with authority that these phenomena were occurring with Mr Katsabis but they are well recognised and therefore his behaviour conforms to a well-established psychiatric scenario. The situation might be best encapsulated by describing it as impaired judgment but short of deprivation of the ability to reason about wrongfulness."
42 Mr van de Wiel expressly disavowed reliance on Dr Bakers’s opinion in relation to inability to appreciate the wrongfulness of your actions and placed reliance on Dr Walton’s opinion in this regard. He also expressly disavowed reliance on the gambling disorder diagnosed by Dr Baker. Accepting those disavowals and having regard to the matters generally put, I accept those matters of Dr Walton’s opinion that I have just recited.
43 A large bundle of testimonials was again provided on the resumed plea. Many were simply copies of those originally tendered on the first day of the plea hearing. In others the referee had added particular examples to illustrate your kindness or your history of hard work or your devotion to your family. Some had added information about the author’s response to seeing you in custody, or seeing the impact of your remand upon your wife.
44 There were a number of new ones and a number of the referees, both those who had provided references originally and the new ones, were called to give evidence on the resumed plea.
45 The sum total of the written and oral evidence is impressive. You are a well-regarded, well respected man whose offending is seen by all who wrote or gave evidence, to be out of character. A respected solicitor and two reputable accountants gave evidence that, notwithstanding this offending, they would have no hesitation in doing business with you. That illustrates the high regard in which you are held by your broad circle of family, friends and business associates and confirms the evidence and the opinions put by the referees, that the offending is to be regarded as out of character.
46 I accept that you are a man of otherwise good character, that this is out of character offending and that you are entitled to have that weighed in your favour. I must balance the evidence of your otherwise good character with the statements of principle about the reduced weight to be given to good character in cases such as these.
47 The next additional matter relied on was the impact on your wife of your remand. Normally when a plea is presented, if there has not been a period of remand pending sentence, this is prospective in anticipation of the effect. Here there is actual evidence of the impact because you have been remanded since the original plea hearing. Ms Katz, I am told, is not coping. She now has to run the café business that she and her father own, although neither of them has experience in hospitality. She is a teacher by training. The business is not profitable and she and her father feel that they need your expertise if it has any prospect of being turned around. They have a long lease and the outgoings of the business exceed the takings. I was told that they want you home to run the business.
48 On a personal level, your wife is finding it difficult without you. She finds it difficult to care alone for your two young sons and to attend the business seven days a week. She is fortunate to have family support. Her mother is available to look after the children while she is at the business, but she is distressed, depressed, cries a lot and is concerned at the impact of her distress and the time she must spent at the business on the children. She has not told them that you are in gaol, they have been told you are in Sydney, working. Until your remand you had been very much a hands on father, I was told and they therefore notice and miss your absence and involvement in their lives.
49 I accept the distress that your wife is suffering and the difficulties that she is experiencing in running the business are properly to be regarded as hardships. I do not consider that the hardship that was identified falls into the category of exceptional hardship, as that term is explained and applied by the Full Bench of the Court of Appeal in Marcovic[4]. I accept however that the hardship your wife is suffering will make any sentence upon you more burdensome and has made the time that you have served already more burdensome.
[4] Markovic v R [2010] VSCA 105
50 I accept too that imprisonment has been a shock to you and that you have gone from expressing disbelief that the conduct to which you have pleaded guilty could result in imprisonment, to a growing awareness of the seriousness of your wrongdoing. In that sense, I accept imprisonment has already served the needs of specific deterrence.
51 Similarly, I accept the sentence that you have already served and any further sentence will be more burdensome, because I accept you are still suffering from the major depressive disorder diagnosed by Dr Baker after the offending and confirmed by Dr Walton. I am not satisfied on the evidence that you were suffering major depressive disorder at the time of the course of conduct offending. I accept the information provided particularly by your sister and that what you said to Dr Walton that you have a tendency when under stress to go in for comfort spending and I accept the opinion about that that Dr Walton expressed. Whether that comfort spending was on consumer goods or gambling is really not to the point. I accept that it provides some insight into your offending. The reduction of the weight to be given to moral culpability in those circumstances and in reliance on those matters is, in my view, limited. So, too, is the reduction to be given to general deterrence. I rely in reducing but to a moderate degree the weight to be given to moral culpability and to general deterrence on the passage that I have already quoted from Dr Walton's report and also to this passage from Dr Walton's report:
"I believe it is probable that this man’s depressive condition has made at least some contribution to his offending. The proceeds of crime were used towards offsetting his despair in an ill-considered fashion."
52 That seems to me to relate to the diagnosis of an underlying dysthymic disorder or lowered mood throughout most of your life.
53 Although the correspondence between your accountant and liquidator has not changed the position from the first presentation of the plea in respect of the amount recovered up to time of the plea, you have made significant restitution by payment of an amount of $80,000 between the first date of the plea hearing and the resumed date. You have again indicated that you accept your responsibility, your moral and legal responsibility to repay the balance and indicated a preparedness to pay the balance when you can. Given what I was told about the level of debt that you and your wife have, about $800,000, that may be at this stage no more than a fond hope, but I accept that it is a genuine expression of acceptance of responsibility, despite the limited means to be able to discharge that responsibility.. I accept both the payment of the $80,000 and the acceptance of responsibility to pay the balance, evidenced in part by your consenting to the restitution order, is evidence of a genuine desire to make amends in the sense that that phrase was used in Barbaro and Zirilli and that the $80,000 is a significant contribution to that and a significant dollar value to that genuine desire to make amends.
54 This is serious dishonesty by a director. The fire put what was an ailing and loss making business, which you had unsuccessfully tried to revive and then to sell, out of operation. The insurance funds were more than enough to pay out the creditors and leave you with a substantial sum left over. In that sense, the insurance payment was a windfall. By your conduct, your dishonesty as a director, you denied creditors the moneys they were owed and used the company’s funds and assets for your own benefit and that of your family.
55 It is clear therefore that, notwithstanding those significant matters personal to you which count in your favour, denunciation, just punishment and deterrence must carry considerable weight. People who assume the role of a director and enter into business transactions with third parties must understand that they must act honestly and honourably in the discharge of their responsibility as directors and that if they do not that there are consequences.
56 I have come to the view, as I indicated from the first day of the plea hearing, that no sentence other than one with a component of imprisonment immediately served was appropriate, balancing the matters that counted in your favour with the need to reflect denunciation, just punishment and deterrence. I have come to that view having regard to the fact that imprisonment is a last resort and to the other guiding principles set out in the Crimes Act1914 and to which I must adhere.
57 The total sentence that I have arrived at is such as to allow for your release upon a recognisance release order and that is what I propose to do. I have come to the view that although this is in a sense overall offending, that they are two separate offences, the rolled up count relating to the withdrawal of the insurance funds and the dealings with the Lexus and therefore that the wrongdoing should be reflected in separate sentences. The sentence for the Lexus charge is to be served cumulatively upon the sentence in respect of the charge relating to the insurance funds. That still brings me to a total effective sentence of under three years. I have come to the view that the time that you have served is close to but still not sufficient to be the time that must be served before your release upon a recognisance release order.
58 I will tell you what the actual effect of it is before I ask you to stand and formally pass sentence on you. I am going to sentence you to a period of imprisonment of two years in respect of Charge 1, and three months in respect of Charge 2. That means a total sentence of two years and three months. I am going to direct that you must serve six months of that before being released on a recognisance to be of good behaviour for the balance of the period, that is for a further 21 months. I have got to fix a sum for the recognisance and that will be in the sum of $1,000. The only other condition is that you are to be of good behaviour for that period. The sentence that I pronounce will also direct that the 124 days that you have spent in pre-sentence detention be counted and reckoned as part of the sentence already served. That, in rough terms, requires you to serve a further two months before your release.
59 On the two charges to which you have pleaded guilty, you are convicted:
60 On Charge 1, you are sentenced to be imprisoned for a period of two years.
61 On Charge 2, you are sentenced to be imprisoned for a period of three months.
62 I direct that the sentence on Charge 2 is to commence on the day following the day on which the sentence on the first charge will end. That makes a total sentence of two years and three months. I direct that you serve six months of that sentence and then be released upon a recognisance, fixed in the amount of $1000, to be of good behaviour for a period of 21 months, so that is from the date of release to the expiry of the balance of the sentence.
63 I declare, pursuant to s.6AAA of the Sentencing Act1991 that but for your pleas of guilty I would have sentenced you to a period of imprisonment, a total effective term of three years and six months and I would have fixed a period of 18 months as the time that you would have had to have served before being eligible for parole.
64 I declare that that 124 days that you have spent in pre-sentence detention be counted and reckoned as part of the sentence already served.
65 I make an order for reparation in the amount of $241,218 in favour of PG and N Enterprises Pty Ltd, (In Liquidation), 165 Camberwell Road, Hawthorn East.
66 Does the sentence I pronounce comply with the Act?
67 MR SCHUBERT: I do not see any difficulty, Your Honour. The sentence on Charge 1 commences today and the sentence on Charge 2 commences the day after the end of the sentence on Charge 1?
68 HER HONOUR: That is right.
69 MR SCHUBERT: I do not see any difficulties with that, Your Honour.
70 HER HONOUR: I followed Mr Pedley's guide.
71 MR SCHUBERT: Reliable guide, Your Honour.
72 HER HONOUR: Yes. Mr Katsabis, I must explain to you the effect of the order. I have it explained in terms of the amount of time of the overall sentence, the time you are required to serve and the fact that after that time you will be released if you give a promise to be of good behaviour for the balance of the sentence. I must also advise you that if you fail without reasonable excuse to comply with the conditions of this order that it may be discharged or varied and that you would then come back for resentencing. Do you understand that? I will ask Mr van de Wiel to accompany my associate down to the dock so that you can sign that recognisance, acknowledging that you understand its effect
73 (Recognisance release order signed and acknowledged.)
74 MR VAN de WIEL: Mr Katsabis has signed that recognisance order, Your Honour.
75 HER HONOUR: Thank you, Mr Van de Wiel. As you know, Mr Van de Wiel, we are required to remain on the Bench for the period that Mr Katsabis is in court. I am prepared to remain on the Bench briefly whilst his wife and family speak to him. They cannot touch him, but they can speak to him
76 VOICE (from body of court): Thank you.
77 HER HONOUR: Mr van de Wiel, while that is happening, there has been a request through the court communications officer by The Age for a copy of my reasons for sentence.
78 MR VAN de WIEL: Yes.
79 HER HONOUR: You may want to explain that to Mrs Katz so that she can consider that in relation to the position of the children, given that I was told they do not know, but if this is reported it is best that she and they are prepared for that.
80 MR VAN de WIEL: Thank you. Thank you, Your Honour.
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