Director of Public Prosecutions v Nicholls
[2015] VCC 1572
•6 November 2015
| IN THE COUNTY COURT OF VICTORIA | Revised (Not) Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL DIVISION
Case No. CR-14-00341
| THE DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| ANTHONY JOHN NICHOLLS |
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JUDGE: | HER HONOUR JUDGE PATRICK | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | ||
DATE OF SENTENCE: | 6 November 2015 | |
CASE MAY BE CITED AS: | DPP v Nicholls | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 1572 | |
REASONS FOR SENTENCE
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APPEARANCES: | Counsel | Solicitors |
| For the CDPP | Ms. L. Taylor | |
| For the Accused | Mr R. Lawrence |
HER HONOUR:
1 Anthony John Nicholls, you have pleaded guilty to three charges of using your position as a director dishonestly, with the intention of gaining an advantage, contrary to paragraph 184(2)(a) of the Corporations Act 2001 (Cth). The maximum penalty for that offence is five years’ imprisonment or a fine of 2,000 penalty units, or both.
2 The circumstances of your offending are set out in detail in the prosecution summary for plea, which was tendered as Exhibit A. In brief, the circumstances were as follows: In 2004 you and an associate, Peter Scully, became involved in a property investment scheme. You were a director of two different companies involved in this investment scheme, being Zantholls International Proprietary Limited and Peton Proprietary Limited. Zantholls was your private company. Peton was the corporation of which you and your associate were directors and joint shareholders. These and other companies were used in respect to two proposed property developments in Ballarat, being a property at Remembrance Drive, Ballarat and a property at Carngham-Ballarat Road, Ballarat, called the "La Trobe Estate."
3 A number of different types of investment were used by investors in the two schemes. Investors invested either by way of loan, or by way of a contract of sale, or put and call option, or loan agreement structure. Loan agreements provided for the obtaining of loans from investors for a period of either six months or 12 months, at interest rates of 50 per cent per annum. Other investment options also offered a 50 per cent per annum interest rate. Some investment moneys were paid into the trust account of Antunes Lawyers and Advocates. Antunes, a Sydney-based law firm, was instructed to act on behalf of the corporate entities in the property development. The moneys deposited into the Antunes trust account were to be available to be withdrawn at the direction of you or your associate. Other investment moneys were deposited in a Peton bank account. Between 2004 and 2006 Zantholls and Peton raised about $4m in various forms of investment.
4 Between 7 October 2004 and 15 October 2004, you authorised withdrawal of investment moneys totalling $136,000 from Antunes Lawyers and Advocates trust account, held on behalf of Zantholls International Proprietary Limited. Those funds were used for your own personal use and expenses. That is the subject matter of Charge 1 on the indictment.
5 Between 25 October 2004 and 10 August 2005, as a director of Peton Properties, you authorised six withdrawals of moneys totalling $255,100 from the Antunes Lawyers and Advocates trust account, held on behalf of Peton Properties Proprietary Limited, to be paid into the Zantholls bank account. Those funds were used for your personal expenses. That is the subject matter of Charge 2 on the indictment.
6 Charge 3 on the indictment relates to 39 amounts which were withdrawn on your authorisation as director of that company, from the Peton National Australia Bank account between 31 May 2005 and 15 August 2006. These amounts totalled $365,808.31 and were used by you for your personal expenses.
7 The property developments failed and the companies were not able to pay interest or repay investments. On 24 October 2007 a firm of accountants was appointed as liquidator of Peton. On 28 November 2007, a preliminary report was lodged with ASIC, that Peton had no realisable assets and had incurred liabilities totalling $1,466,733.55. Ultimately that company had a recorded deficit of over $4m.
8
An ASIC investigation commenced in September 2009. An ASIC interview was conducted on 15 December 2010. Material was forwarded to the Commonwealth Director of Public Prosecutions in Jan 2012. You were charged December 2012. Ultimately the matter came for trial on a date in May 2015. The matter resolved in late April 2015. You were arraigned on
7 May 2015 and pleaded guilty to the three charges on the indictment.
9 In sentencing you I have taken into account your personal circumstances. Your personal circumstances were outlined by your counsel and in reports that were tendered on your behalf.
10 You are 63 years old. You were born in England. You came to Australia as a child with family and grew up in Sydney. You had an unremarkable family background. You finished school then worked and travelled. You met your wife in 1986 in England. You have two children who are now young adults. You moved to Melbourne in 1997 and have since then involved in a number of relatively successful businesses over a wide range of product types. You are now bankrupt and your assets have been repossessed. You have no prior criminal history.
11 A report was tendered from Ms Carla Lechner, psychologist, dated 23 June 2015. Ms Carla Lechner says that you have symptoms of major depression and clinical levels of anxiety, related to harassment of you and your family. That harassment has apparently been conducted by some of the investors who lost money in these projects. You have expressed regret and distress that people lost money in the investments. You have said you would like to be able to repay. Ms Lechner assesses you at low risk of re-offending. She recommends further psychological treatment. She says that you are concerned in relation to your family and that your mental health problems are likely to be made worse by imprisonment.
12 Your general practitioner in letter dated 22 June 2015 outlines a number of physical conditions which should not impact on your ability to cope with incarceration. Your general practitioner does say your anxiety disorder would be quite disabling in custody.
13 In defence submissions your counsel addressed the nature of the charges. Your counsel said that you had not been charged with dishonestly obtaining money from the investors but with dishonesty using position as a director to withdraw funds. It was accepted that your role was serious and significant. It was submitted that your role was subordinate to that of Mr Scully in respect of financial matters and he was the "catalyst for the offending". Your counsel accepted you should have done more to ensure that the business was viable and accepted that the amounts you withdrew stymied Peton's chances of being viable.
14
Your counsel addressed the sentencing considerations set out in s.6(a) of the Crimes Act 1914 (Cth). You counsel relied on a number of matters including your plea of guilty, your remorse, your previous good character, your prospects for rehabilitation, the delay in the matter coming to court, the
extra-curial punishment that you have suffered, imprisonment being more onerous because of your health issues and your concern about your family. Your counsel submitted that specific deterrence need not be given weight in sentencing you and that general deterrence ought be moderated.
15 Your counsel submitted that a sentence of imprisonment was warranted but that factors in mitigation should result in a shorter than otherwise non-parole period. Your counsel submitted that the mandatory disqualification that will apply to you from managing a corporation ought also be taken into account as an additional penalty. He submitted that an aggregate sentence could be imposed.
16 The prosecutor in sentencing submissions addressed the relevant provisions of the Crimes Act 1914 and said that an aggregate sentence could be imposed. The prosecutor said that where "white collar crime" was involved there needed to be a balance between the sentencing objectives of general deterrence and matters particular to the offender. The prosecutor submitted that general deterrence was a very important sentencing consideration and ought to have particular significance in this type of offence. The prosecutor submitted that your previous good character might carry less weight in this type of offence, in view of the breach of trust involved.
17 The prosecutor submitted that there was considerable harm suffered by the victims in this matter and referred to the seven victim impact statements tendered. One of those victim impact statements was read by one of the victims. The others were read by the prosecutor.
18 The prosecutor submitted that the delay in this matter was due to difficulties in investigation of the matter and the normal operation of the justice system. She submitted that your plea of guilty was not made at an early stage. She accepted that the mandatory disqualification which will apply to you will operate as a punishment and afford some protection to the community. The prosecutor submitted that it ought to be taken into account that this type of offending is difficult to detect and difficult to prosecute.
19 Anthony John Nicholls your offending was serious offending. I accept, for the purposes of sentencing you, that your business partner had a greater role in financial matters but it is quite clear that you were actively involved in this business which patently was not able to meet its commitments to investors, including the payment of extraordinarily high rates of interest. You had considerable experience in business. Your previous businesses were of a different type and were on a relatively small scale compared to this enterprise. You should have been alert to pay much more attention to the details of the business and to properly carry out your responsibilities.
20 No doubt blame for the failure of the business ought be shared but you are the one who withdrew the funds that are the subject of these charges. You cannot shift the blame for that onto your business partner. You made frequent withdrawals on a regular basis over a considerable period of time. You did so dishonestly to support yourself and your family. This was a very significant breach of trust of the investors who thought their money would be put towards the property development project and not into your pocket.
21 Your selfish withdrawals of considerable funds constituted multiple nails in the coffin of an already terminally ill business. The financial and emotional pain felt by the people who invested with you is reflected in the victim impact statements tendered to the court. It is clear that many people who lost money lost their entire savings and ability to provide for a secure future. The offence you have been charged with covers a wide range of behaviour with a wide range of consequences. I consider this offending to be towards the higher ending of this type of offending.
22 General deterrence is a very important sentencing consideration. People who operate businesses relying on the trust of other people need to understand that there will be severe punishment if they breach that trust. This type of offending is difficult to detect and difficult to prosecute. Denunciation and just punishment are also very important sentencing considerations. The importance of these factors and the objective seriousness of the offending mean that a sentence of imprisonment to be served immediately is the only appropriate sentence. I consider you moral culpability to be high and that Verdins factors do not operate to moderate general deterrence.
23 I accept you have good prospects of rehabilitation. You have a prior good character. There were many positive comments about your character in the references tendered. You have no prior criminal history. You have been hardworking over a lifetime. There were a number of family and friends in court to support you. Those matters are relevant to your prospects of rehabilitation and the weight of that consideration and rehabilitation operates in mitigation of sentence, although I consider that weight ought be somewhat reduced because of the nature of this offending. Because of your prior good character people trusted you and invested in this business.
24 This offending involved dishonesty over a considerable period. You do have the ability to learn from this very severe lesson. I accept that it is unlikely that you will re-offend. Specific deterrence need to be given reduced weight in sentence.
25 My conclusion as to your prospects for rehabilitation remains the same, despite the attempted reliance on the "Lifegene Project Reference". I will summarise what took place over several court dates. During your plea hearing your counsel sought to tender a reference which praised your involvement in a particular medical project. The reference was unsigned except by an associate of yours. The reference had the names and signature spaces for four other people. I refused to accept the reference and expressed some scepticism about whether the other named people, of significant academic status, would have signed the reference. Your counsel said he would follow the matter up.
26 A further copy was provided to the prosecution and the court. That copy was signed by your associate and appeared to be signed by three of the other purported signatories. The fourth person was said to be overseas. Enquiries were conducted on behalf of the prosecution. The purported signatories told investigators they had not signed the reference. Your counsel advised the court that he had been given contact details and had spoken to people he thought were the signatories but accepted that they were not. Counsel sought and was granted leave to withdraw. New solicitors and counsel represented you in the further plea hearing to deal with this matter which is under investigation by police authorities. I heard submissions as to what, if any, impact this situation should have in my sentencing considerations, particularly on the questions of your prospects for rehabilitation and your remorse.
27 I have given careful consideration to the submissions and factual matters, including your presence in court during the initial discussion and your presence by video-link when your counsel sought to withdraw. It appears that the attempted tender was consistent with your instructions and you did not withdraw those instructions. That said, you were remanded in custody at the conclusion of the first day of the plea hearing which may have affected your ability to communicate with people. From material provided it appears that the person who did sign has been an associate of yours for some time and that you and he may have, in the past, met with the purported signatories. It may be that the situation has arisen because of misplaced trust by you in him.
28 Further evidence may come to light but at this stage I cannot be satisfied beyond reasonable doubt that you knew of the falsity of the reference and continued to attempt to have me rely on a false reference. Accordingly, I have put the attempted provision of that reference to one side and have disregarded it in sentencing you.
29 I accept that you have suffered a degree of extra-curial punishment. You have suffered financial loss and a degree of notoriety. There has been harassment, some of which understandably has led to feelings of fear and insecurity within your family. Such vigilante-type action is to be deplored. Anger on the part of investors is understandable but some of the behaviour set out in the materials is totally unacceptable. The processes of prosecution and coming to court have been particularly slow in this case but the legal processes must be allowed to take place and people must not take matters into their own hands. Such activities may ultimately be counterproductive if they result in mitigation of sentence as in this case.
30 You will be disqualified from managing a company and that additional punishment has been taken into account, in terms of its punishing effect on you, given your background in business and your wish to re-engage in business. That wish is evident from some of the references provided. It appears from the references provided that in last few years you have been assisting others in some type of consultancy role in business ventures, some of which appear to involve proposals for future large scale projects in Australia and overseas. That suggests that there has been some recovery in your circumstances in last few years and the extra-curial punishment has reduced to that extent.
31
The delay in this case has been unusually lengthy. I do not accept that the length of the delay can be explained adequately by the normal court processes or the complexity of the investigation of the matter. This matter has been hanging over your head for a long time. That has been very difficult.
I accept that your rehabilitation has commenced. The delay has been taken into account as a matter of mitigation in both the setting of the head sentence and the period that you must serve before being released on a recognizance release order.
32
You plea of guilty was made late but indicates some willingness to facilitate the course of justice. I accept that that is, to a degree, an expression of remorse, but I consider that that remorse is limited, due to lateness of plea.
I have taken into account in saying that, that you have expressed your regret to others for the losses suffered by the victims in this matter.
33 I accept that imprisonment will be more difficult for you because of your psychological problems. I accept that it would also be more burdensome for you because of your concerns in relation to your family and because of your age. I have taken those matters into account. I have also taken your age into account, in the sense that you have no prior criminal history, over a long period of time.
34 I have borne in mind that the maximum penalty is five years' imprisonment for each offence, rather than ten years which it would be for dishonesty offences such as theft or obtaining property by deception. The maximum penalty available has constrained the length of sentences to be imposed. I do consider it important to reflect the criminality involved in each charge, in light of maximum penalty available and that individual sentences are required to achieve this rather than an aggregate sentence. I have also applied the principles of parsimony, totality and proportionality.
35 Could you please stand, Mr Nicholls.
36 On Charge 1, you are convicted and sentenced to two years' imprisonment.
37 On Charge 2, you are convicted and sentenced to two years and six months' imprisonment.
38 On Charge 3, you are convicted and sentenced to three years' imprisonment.
39 The sentence on Charge 3 is the base sentence. Nine months of each of the sentences on Charge 1 and Charge 2 are to be served cumulatively on each other and the sentence on Charge 3.
40 The total effective sentence is four years and six months' imprisonment.
41 The sentence on Charge 3 is to commence on 6 November 2015.
42 The sentence on Charge 2 is to commence on 6 February 2017.
43 The sentence on Charge 1 is to commence on 6 May 2018.
44 I order that you be released on a recognizance release order after serving three years of these sentences.
45 The recognizance release order will be that you be released after serving three years of this sentence, by recognizance of $2,000, to comply with the condition that you be of good behaviour for 18 months. There will be no other special conditions of the recognizance release order.
46
I declare that you have served 134 days of this sentence by way of
pre-sentence detention.
47 But for your plea of guilty, I would have sentenced you to a term of imprisonment of six years, with a non-parole period of four years.
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