Director of Public Prosecutions v Pavlovski
[2019] VCC 1442
•4 September 2019
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-15-01471
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| PAUL PAVLOVSKI |
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JUDGE: | HER HONOUR JUDGE BRIMER | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 18 July 2019 | |
DATE OF SENTENCE: | 4 September 2019 | |
CASE MAY BE CITED AS: | DPP v Pavlovski | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 1442 | |
REASONS FOR SENTENCE
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Subject: CRIMINAL LAW
Catchwords: Sentence – obtain financial advantage by deception from financial institutions – delay between offending and sentencing – application of Verdins principles 5 & 6 to offender’s mental health – continuing criminal enterprise offender
Legislation Cited: Sentencing Act 1991
Cases Cited:Verdins; Buckley; Vo (2007) 16 VR 269 – Boulton v The Queen [2014] VSCA 342 – Merrett, Piggot & Ferrari [2007] VSCA 1
Sentence: Community Correction Order made for 18 months, with conviction
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APPEARANCES: | Counsel | Solicitors |
| For the Director of Public Prosecutions | Mr B. Nibbs (plea & sentence) | OPP Victoria |
| For the Accused | Mr J. Dounias (plea & sentence) | MST Lawyers |
HER HONOUR:
1 Paul Pavlovski, you have pleaded guilty to one charge of attempt to obtain financial advantage by deception contrary to s.321(M) of the Crimes Act 1958, one charge of obtain financial advantage by deception contrary to s.82 of the Crimes Act 1958 and one charge of recklessly deal with proceeds of crime contrary to s.194 (3) of the Crimes Act 1958.
2 Pursuant to s.6H of the Sentencing Act, you are to be sentenced as a continuing criminal enterprise offender. Section 6(I) of the Sentencing Act applies to all charges on the indictment and has the effect of doubling the maximum penalty for each charge. Accordingly, the maximum penalties are terms of imprisonment of 10 years, 20 years and 20 years respectively.
3 The circumstances of your offending are set out in the Summary of Prosecution Opening dated 16 July 2019. I have also had regard to the oral submissions made by your counsel, to the written Outline of Submissions on your behalf dated 16 July 2019 and to the exhibits tendered on your plea.
Circumstances of the offending
4 The circumstances of your offending are set out in detail in the Summary of Prosecution opening tendered on your plea. I have had regard to the full summary, however I will refer to the circumstances here in short compass.
5 At the time of this offending, you worked at TCB Security, a business involved in alarm monitoring and installation. You were the secretary and director of TCB Trading Australia Proprietary Limited from 2012. You were also a real estate agent (subagent) with an association with Ray White Carrum Downs.
6 On 27 November 2013 you contacted Peter Burnley, a self-employed finance broker who you met through your mutual involvement with Ray White Real Estate, for help to refinance a loan held by Ilieva Proprietary Limited (the trustee of the Pavlovski family trust of which your wife Mara Pavlovski was the principal beneficiary). The loan was in the sum of $700,000, to which I will refer as the (ASL loan). You lodged a loan application and supporting documentation with La Trobe Financial Services (La Trobe). On 5 December 2013, La Trobe advised it would refinance part only of the loan (80% of the value of the security for the loan). The application was withdrawn.
7 On about 21 February 2013, Mr Burnley lodged an application with Westpac on behalf of Mara Pavlovski/Ilieva Proprietary Limited for two loans, one for $720,000 and the other for $460,000.
8 A number of documents in support of the loan application were provided by Mr Burnley to Westpac which were false or contained false representations. Ultimately, Westpac declined to approve the loan application due to an apparent inability on the part of the borrowers to service the loan. This is the basis of Charge 1.
9 In early 2014, William Jordanou and Robert Zaia took office space upstairs at TCB security in return for Mr Zaia, a qualified accountant, doing the books for TCB Security.
10 On or about 26 March 2014 at your request, Mr Burnley lodged a loan application with La Trobe in the name of Mara Pavlovski. In response, La Trobe reactivated the original loan application for $720,000 in the name of Mrs Pavlovski/Ilieva Proprietary Limited. A number of documents in support of the loan application were provided to La Trobe which were false or contained false representations. La Trobe assessed the application favourably and on 12 May 2014 a loan in the amount of $720,000 was approved. This is the basis of Charge 2.
11 The funds were used to discharge the ASL loan.
12 La Trobe would not have funded the loan had it known the representations and the materials provided to it in support of those representations were false.
13 In March 2014 you provided Mr Burnley with the contact details of Mr Jordanou. With the assistance of Mr Burnley, Mr Jordanou applied to Westpac to refinance a property owned by his wife, Suzanne Jordanou. Two loan applications were supported by false representations. Westpac was deceived into authorising and funding the loans to Mrs Jordanou. Mrs Jordanou withdrew the proceeds of the loan, $500,000 of which was a bank cheque payable to Tambro Pty Ltd. She deposited the funds into the account of Tambro Pty Ltd. You were the director of Tambro Pty Ltd and controlled the bank account. On 18 June 2014, you provided a statement to the police in which you claimed this money was the repayment of a loan made to Mr Jordanou about 10 years previously. This is the basis of Charge 3, recklessly dealing with proceeds of crime.
Arrest and interview
14 On 13 February 2015 by prior arrangement, you attended the Fraud and Extortion Squad office where a record of interview was conducted. You gave selective answers but made no admissions in relation to the charges. You were charged and bailed to appear in the Melbourne Magistrates' Court on 16 February 2015.
Plea of guilty
15 Although there were discussions with a view to resolving the matter with the prosecution at committal, the matter did not resolve. A resolution was reached after the matters of Mr Jordanou and Mr Zaia were resolved. Mr Dounias submitted that although your plea of guilty was late, given you were 'waiting in the wings' for the resolution of their matters, you ought be afforded the mitigatory benefit of an early plea of guilty for its utilitarian value and as an indication of remorse.
16 I have had regard to the reasons for the delay in your plea of guilty and consider that you ought be afforded the benefit of the utilitarian value of the plea, avoiding a 7 day trial. I accept that the plea is also indicative of remorse.
Prior convictions
17 You have no prior convictions of a similar nature. You appeared in the Melbourne County Court in October 1998 in relation to possession of a drug of dependence and received a suspended gaol sentence. There are no other prior matters.
Objective gravity of the offences
18 These are serious offences, which is evident from the maximum penalties specified. Mr Nibbs submitted that financial institutions are reliant on receiving honest material and these offences go to the heart of financial matters faced by society generally. Mr Dounias conceded that general deterrence has a significant role to play.
Circumstances of the offending
19 Mr Dounias submitted on your behalf that your offending occurred when you were introduced to Mr Burnley, who was not your usual financial broker. You had not known him for long. Mr Burnley said he could get things done; he knew what documents were required. The ASL loan was a solicitor's mortgagee practice loan at a higher interest rate. You were keen to refinance the ASL loan at a lower interest rate. You accept responsibility for your conduct however, Mr Dounias submitted, you were guided and coached by Mr Burnley. I note in the prosecution summary, to which you have agreed, that you contacted Mr Burnley in November 2013 and you provided Mr Burnley with the contact details of Mr Jordanou. In all of the circumstances, I place little weight on the assertion that you were guided and coached by Mr Burnley.
20 Mr Dounias submitted that no party suffered loss in respect of these transactions. Although not an element of the offence, the court ought be cognisant that the security that was provided for the loan safeguarded the money. In relation to the loan the subject of Charge 2, repayments have always been made and are continuing to be made. On 11 June 2019, you received an email from a customer service officer at La Trobe regarding a reduction in interest rates. The letter concluded with the statement thanking you for your custom. Mr Dounias submitted that it seems that the victim is content with the way in which things are going.
21 In relation to Charge 3, the relevant property was sold, and the lending financial institution was paid in full.
Personal circumstances and background
22 Your personal circumstances are set out in detail in the report of Mr Cummins. I have had regard to the report in full. In summary, you were born in Macedonia on 23 August 1956. You came to Australia when you were 8 years old. Your family bought a house in North Fitzroy, later building a house in Reservoir. You went to Fitzroy High School up to Year 11 but changed in Year 12 to a local high school in Reservoir. You did not settle in and left school without completing Year 12.
23 You have a diverse track record in the work force. You have held positions as a storeman in a warehouse; as an owner with cartage contracts for papers, magazines and food stocks; as a licensee for licensed premises; as an owner and operator of hotels including the Newport Hotel Williamstown, the Old Lion Hotel in Adelaide; working in security and in real estate. During this time, you provided employment to many people.
24 You are presently employed by Buy Wine Online Pty Ltd as a marketing manager. The present criminal charges have prevented you from continuing work in the security industry as your security license has been cancelled.
25 You married your first wife in 1983 and have two children. In September 1994 your wife took the children to Adelaide. The marriage was over. You sought custody of the children. It was during this time that you got caught up with a person the police had targeted, and you were arrested on drug charges.
26 You married your second wife, Mara in June 1998. You have three children. The two youngest are in Years 12 and 8 respectively. In 2011, you and Mara divorced but have an amicable and flexible arrangement with respect to the children. You support your ex-wife Mara and the children including financially. Your mother is 89 years old and is blind in one eye and has a number of medical needs. Your brother, Michael lives with your mother, but is on a disability pension due to a chronic back condition and is, himself not well. You assist your mother and your brother in caring for your mother. You complete round trips from Blairgowrie, of about 200 kms 3 times per week, otherwise your mother suffers additional stress and anxiety. On Sunday morning, you drive your mother to church and every second or third week, to your father's grave. Your father died in 2011. Your mother needs your assistance particularly when your brother is away. You promised your father that you would look after your mother.
Relevant sentencing principles
27 Mr Dounias submitted that your genuine remorse is evidenced by the references that have been tendered in support of your plea. You are embarrassed by what you have done and have expressed deep regret for your behaviour.
28 Further, there is minimal likelihood of you reoffending, you have learnt your lesson. Your character is attested to by those who have provided references. For example, you attend and participate in raising funds for football players who have fallen on hard times. You have sponsored Richmond Football Club Legends games to help raise funds for former players who need help paying for medical operations, utility bills, funeral costs, et cetera.
29 Since your arrest you have travelled overseas on a number of occasions. You have always returned to answer to what you accept you have done. You cooperated and adhered to your obligations.
30 According to Chris Kovac, KP Partners Tax and Financial Advisors, in the 30 years that the firm has acted for you, you always behaved professionally in attending to your necessary legal and taxation requirements as and when they fell due. You are up-to-date with all your income tax return requirements and have no outstanding liabilities with the ATO.
31 Mr Dounias submitted that you have a condition which may mean that a sentence of imprisonment will weigh more heavily on you than it would on a person in normal health. Further, there is a serious risk of imprisonment having a significant adverse effect on your mental health and these are factors tending to mitigate punishment. Mr Dounias referred to (Verdins; Buckley; Vo (2007) 16 VR 269 at [32] principles 5 & 6). Mr Cummins, consultant forensic psychologist, in his report dated 17 July 2019 expresses an opinion that you are suffering from a trauma related disorder in the form of an adjustment disorder with mixed disturbance of emotions and conduct. This adjustment disorder was triggered as a result of your belief that you have been repeatedly mis-treated by banks. This is against the backdrop of having been incarcerated in 1995 for a period of 6 weeks, which was a very traumatic experience for you. Based on his assessment, your mental health would inevitably deteriorate if you are incarcerated.
32 Mr Nibbs responded that a person facing imprisonment is often depressed and anxious and your situation is nothing more than a normal person experiences as a result of incarceration. The material contained in paragraphs 50 to 52 of Mr Cummins' report is generalised material and does not give the depth necessary for a significant discount. The treatment you received after your incarceration in 1995 was for a period of two years only. If weight is to be given to this consideration, it ought be minimal only.
33 I accept Mr Nibbs' submission that the material relied upon in Mr Cummins' report is general rather than cogent evidence establishing how the impairment is affecting you such as to engage Verdins principles 5 and 6. I nevertheless accept and have had regard to Mr Cummins' assessment that your mental health would inevitably deteriorate if you are incarcerated in fixing the appropriate sentence in your case.
34 It has been just over five years since your offending conduct. The matter has been adjourned and trial dates vacated on a number of occasions. This was due largely to the expectation that your trial would follow the trials of Mr Jordanou and Mr Zaia. Mr Dounias submitted on your behalf that the delay is a significant mitigating factor in this case, in particular, focussing attention on issues of rehabilitation and fairness. Mr Dounias referred to Merrett, Piggot & Ferrari [2007] VSCA 1 at [35] per Maxwell P that 'The relevance of delay lies rather in the effect which the lapse of time – however caused - has on the accused. Delay constitutes “a powerful mitigatory factor…”'.
35 Mr Dounias submitted that the sword of Damocles has been hanging over your head in the sense that you have lived with the uncertainty of what may happen for the past four years. In that time you have remained gainfully employed and unsurprisingly, there are no matters pending.
36 Mr Nibbs submitted that there has been no significant delay between investigation and being charged. It is not unusual for fraud matters to take time to go through the courts. Although there was some delay because of the need to have Mr Zaia's and Mr Jordanou's trial heard first, given the nature of the delay, less mitigatory weight ought be afforded to it.
37 I accept there has been significant delay between your arrest in February 2015 and your sentencing for these offences (the delay). Consistent with the observations of Maxell P in Merrett, together with the presence of the indicia of rehabilitation in that time as referred to by Mr Dounias, and as accepted by me, I have had regard to the delay as a significant mitigatory factor.
Current sentencing practice
38 I am obliged to have regard to current sentencing practices in determining the sentence, though I note the guidance of the High Court in DPP v Dalgliesh (a pseudonym) (2017) HCA 41 that current sentencing practices are one of the many factors that must be taken into account in sentencing.
39 Mr Dounias referred me to DPP v Tu Cam Thai [2014] VCC 177, a matter involving an assistant mortgage broker who prepared false documents or made false representations on application forms to enable customers to obtain loans. There were three charges relating to a total obtained in excess of $1.25m. The defendant was 36 years old with no prior convictions. A total effective sentence of 10 months' imprisonment fully suspended for two years was imposed. The main offender, the person who ran the mortgage business, was dealt with in the Supreme Court of Victoria by His Honour Justice Dixon in The Queen v Kieu Thi Huynh [2014] VSC 53. There were 27 charges of obtaining financial advantage by deception with loans totalling more than $9 m. A total effective sentence of four years with a minimum non-parole period of two years was imposed.
40 Mr Dounias referred me to the Sentencing Advisory Council sentencing trends for obtaining a financial advantage by deception (2013-14 to 2017-18), to which I have had regard as an indication only of the sorts of sentences imposed.
41 Mr Nibbs submitted that the matter of Tu Cam Thai involved a very different set of circumstances to this one. I have had regard to the cases provided to me; to their similarities and to their differences.
42 Every case is different, and the court must have regard to the individual circumstances of each case. That includes the particular circumstances of this offending, your personal circumstances and the relevant sentencing principles that arise for consideration. This is what I have done.
Submissions
43 Mr Dounias relied on the R v Boulton & Ors [2014] VSCA 342 in support of a submission that even in cases of relatively serious offences an appropriately fashioned community correction order (CCO) may be appropriate. He submitted that in all of these circumstances a CCO which is suitably fashioned can be both punitive and therapeutic and is well within my sentencing discretion.
44 Mr Nibbs contended a term of imprisonment ought be imposed. It is what is required properly to give effect to the principle of general deterrence.
45 You were assessed as suitable for a CCO on 18 July 2019. The author of the report notes that you were expansive with the information regarding the details of the events in the circumstances pertinent to those offences. You demonstrated remorse for your actions and were reduced to tears throughout. At no point did you engage in a victim stance, shift blame or dismiss the severity of the offences. You identified yourself as socially isolated and experiencing extreme shame for your involvement. I note Mr Nibbs' submission made on the further plea, in relation to your reporting to the author of the report, that for you personally, there was no financial gain obtained. Mr Nibbs' submitted that in relation to Charge 3, you did obtain a benefit. However, it was noted by the author of the report that you demonstrated insight into your behaviour and are likely to benefit from engagement with CCS.
46 I have considered carefully, balanced and weighed all of the matters referred to on your plea. I have had regard to the need for general deterrence to be a significant sentencing consideration in relation to this sort of offending. Financial institutions should be able to rely on information provided to them as being honest and accurate. Providing false or misleading information strikes at the integrity of the loan application system. I note the observation of Dixon J in Huynh at [10] 'That it is not to the point that the lenders have not suffered any loss.'
47 However, I am required to balance the need to denounce this offending conduct with the factors in mitigation put by your Counsel on your plea in determining a sentence which I consider is just in all the circumstances.
48 Please stand. I consider that a CCO with a significant community work requirement will satisfy the necessary punitive imperative and is just punishment. The imposition of a term of imprisonment, taking into account your personal circumstances and the matters raised on your plea, would I consider, result in a sentence which is skewed too far towards retribution and deterrence.
49 I will make a community correction order of 18 months to commence today. Because you must agree before I can release you on a community correction order, I will tell you what the conditions are. The core conditions attached to every community correction order are that you must report to and receive visits from Corrections Victoria; must notify Corrections Victoria of any change of address or employment; must not leave Victoria without permission of Corrections Victoria and must comply with any direction given by Corrections Victoria to ensure compliance with the order.
50 I will also order that you comply with other conditions during the 18 months:
51 You are to perform 240 hours of unpaid community work. I also attach to the order the following treatment and rehabilitation condition. I order that you undergo any mental health assessment and treatment that may include psychological, neuropsychological, psychiatric or treatment in a hospital or residential facility as directed by the Secretary. Pursuant to s.48CA of the Sentencing Act, I determine that 40 hours satisfactorily undertaken for treatment and rehabilitation are to be counted as hours of unpaid community work for the purposes of the unpaid community work condition. You are to be supervised, monitored and managed as directed by the Secretary.
52 Do you agree to being released on a community correction order with those conditions attached?
53 ACCUSED: Agree.
54 HER HONOUR: If you do not complete any condition of the community correction order you will be brought back before me to be resentenced and also to be dealt with for not doing what you are ordered to do under the CCO. Do you understand what will happen if you do not complete any condition of the order?
55 ACCUSED: Yes, I do.
56 HER HONOUR: If your circumstances change you may apply to the court for a variation or cancellation of the order. In either case you must notify the Community Correction's officer and you should get legal advice.
57 Pursuant to s.6J, I direct that there be entered into the records of the court the fact that I have sentenced you in respect of Charges 1,2 and 3 as a continuing criminal enterprise offender.
58 Mr Dounias, do you need to explain the conditions to - - -
59 MR DOUNIAS: I would appreciate that, Your Honour.
60 HER HONOUR: Yes, of course. I will wait while you do that.
61 MR DOUNIAS: Might I be excused for a moment?
62 HER HONOUR: Yes, you may.
63 MR DIOUNIAS: Thank you, Your Honour. No issue.
64 HER HONOUR: Yes, thank you. Mr Nibbs, is there a s.464ZF application?
65 MR NIBBS: I think there has been one made, and I think I have got the draft orders, but there is also the 6AAA.
66 HER HONOUR: My understanding is with a community correction order, under two years 18 months, there is no need to make a declaration.
67 MR NIBBS: I am happy with that, Your Honour. I think these were previously sent through but I have got the hard copies.
68 MR DOUNIAS: We have been provided with that, Your Honour.
69 HER HONOUR: Yes. And what is your attitude?
70 MR DOUNIAS: Our position is it is, we just day it is a matter for Your Honour. We do not take it any further.
71 HER HONOUR: Yes, all right. I understand there is the need, Mr Nibbs, for an amendment to a date on the order.
72 MR NIBBS: I know that it has certainly been e-Filed, so that can be done in Chambers.
73 HER HONOUR: So perhaps if that could be attended to, and then I will sign the amended order.
74 MR NIBBS: Yes, Your Honour.
75 HER HONOUR: But I will, I note there is no opposition. The order is not opposed in the sense that it has been left as a matter to me, so I will make that order. Mr Pavlovski, I am required to inform you that if at the time of the making of the request, that is the request for a forensic sample to be taken, I will just pause there. Mr Dounias, have you explained to Mr Pavlovski that this - - -
76 MR DOUNIAS: He is aware of the buccal swab, Your Honour - - -
77 HER HONOUR: Yes.
78 MR DOUNIAS: - - - of the inside of the mouth with the stick and he has no issue with it.
79 HER HONOUR: Yes, thank you. That at the time of the request, you do not consent to the taking of a mouth scraping under the supervision of an authorised member of the police force, then the sample to be taken will be a blood sample, and police may use reasonable force to enable that forensic procedure to be conducted. Do you understand that?
80 ACCUSED: Yes, I do.
81 HER HONOUR: Yes, thank you. We are just printing out the order now so I will sign it and (indistinct).
82 MR NIBBS: Thank you, Your Honour.
83 HER HONOUR: Mr Pavlovski, you may come forward to the Bar table to sign the order.
(Community-based order signed and acknowledged.)
84 MR DOUNIAS: Thank you. Can Mr Pavlovski remain?
85 HER HONOUR: You may be seated just there, yes.
86 MR DOUNIAS: Thank you, Your Honour.
87 HER HONOUR: You may be seated behind Mr Dounias. If you wait after I leave the Bench, Mr Bastianon will make copies of the order. Are there any other matters?
88 MR NIBBS: No, Your Honour.
89 MR DOUNIAS: No, Your Honour.
90 HER HONOUR: Thank you.
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