Grimm v The King
[2025] VSCA 11
•19 February 2025
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCR 2024 0192 |
| BRADLEY GRIMM | Applicant |
| v | |
| THE KING | Respondent |
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| JUDGES: | PRIEST, KENNEDY and T FORREST JJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 07 February 2025 |
| DATE OF JUDGMENT: | 19 February 2025 |
| MEDIUM NEUTRAL CITATION: | [2025] VSCA 11 |
| JUDGMENT APPEALED FROM: | [2024] VCC 1360 (Judge O’Connell); (County Court, Judge Todd, 27 June 2024) |
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CRIMINAL LAW – Appeal – Conviction – Applicant pleaded guilty to aiding and abetting dishonest conduct in the course of carrying on a financial services business contrary to s 1041G of the Corporations Act 2001 (Cth) (the ‘Act’) – Where refusal of application to change plea – Whether substantial miscarriage of justice by reason that applicant could not in law be convicted – Whether complete defence because the disclosure requirements in the fundraising provisions in ch 6D were complied with by reason of s 708 of the Act – Whether plea attributable to genuine consciousness of guilt where applicant believed he had a defence by reason of s 708 – Leave to appeal refused.
CRIMINAL LAW – Appeal – Sentence – Whether sentence manifestly excessive – Whether reference to DPP v Bulfin [1998] 4 VR 114 appropriate – Leave to appeal refused.
Corporations Act 2001 (Cth) ch 6D ss 703, 704, 705, 708, 727; ch 7 ss 760A, 1041G; s 1311, considered – Criminal Procedure Act 2009 ss 276, 280, applied.
GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 414 ALR 635; Moore (a pseudonym) v The King (2024) 419 ALR 169; Gurappajiv The Queen [2018] VSCA 187; Peters v The Queen (No 2) [2019] VSCA 292; R v A2 (2019) 269 CLR 507; Leimonitis v The Queen [2018] VSCA 198, applied – Gore v Australian Securities and Investments Commission [2017] FCAFC 13; R v Donaldson & Poumako [2009] SASC 31; Bell v The Queen [2001] WASCA 174; Weston v The Queen [2015] VSCA 354, considered – DPP v Kawecki [2020] VCC 1751, distinguished.
| Counsel | |||
| Applicant: | Mr S Gillespie-Jones with Mr S Andrianakis | ||
| Respondent: | Mr S Ginsbourg with Mr N Barron | ||
Solicitors | |||
| Applicant: | Neill Ogge Lawyers | ||
| Respondent: | Commonwealth Director of Public Prosecutions | ||
PRIEST JA
KENNEDY JA
T FORREST JA:
The applicant was an Australian financial services licensee, and worked as a licensed financial advisor for Ostrava Equities Pty Ltd (‘Ostrava’), a company he controlled. Between February and November 2015, he advised three clients to set up self-managed superannuation funds in which they deposited their retirement savings. The applicant obtained control of the bank accounts of those funds. He then transferred money, shares, and convertible notes from those bank accounts to other companies he controlled without making relevant disclosure, inter alia, about his control.
The applicant was subsequently charged with three counts of aiding, abetting, counselling, or procuring the commission of an offence by Ostrava in engaging in dishonest conduct in the course of carrying on a financial services business contrary to s 1041G(1) of the Corporations Act 2001 (Cth) (the ‘Act’).
On 20 January 2023, the applicant was arraigned and pleaded guilty to the charges. He subsequently made an application to change his plea of guilty, which was refused on 27 June 2024.
On 5 September 2024, the applicant was sentenced to a total effective sentence of 18 months’ imprisonment, but was to be released after service of 9 months’ imprisonment upon giving a recognisance of $5000 that he be of good behaviour for 18 months. The individual sentences, total effective sentence and recognisance are described in the table set out below:
Charge
Offence
Maximum
Sentence
Cumulation
Indictment CR-19-01752 1 Aid, abet, counsel or procure the commission of an offence contrary to s 1041G(1) of the Corporations Act 2001 (Cth) by engaging in dishonest conduct 10 years’ imprisonment 9 months’ imprisonment To commence 6 months after commencement of sentence on charge 3 2 Aid, abet, counsel or procure the commission of an offence contrary to s 1041G(1) of the Corporations Act 2001 (Cth) by engaging in dishonest conduct 10 years’ imprisonment 9 months’ imprisonment To commence 9 months after commencement of sentence on charge 3 3 Aid, abet, counsel or procure the commission of an offence contrary to s 1041G(1) of the Corporations Act 2001 (Cth) by engaging in dishonest conduct 10 years’ imprisonment 12 months’ imprisonment Base Total Effective Sentence: 18 months’ imprisonment Recognisance After service of 9 months’ imprisonment be released upon a recognizance of $5000 that he be of good behaviour for 18 months. Section 6AAA Statement: The sentence that would have been imposed if the applicant had been convicted of this offence after a trial would have been 2 years 6 months’ imprisonment, with the applicant becoming eligible for parole after serving eighteen months of that sentence.
The applicant seeks leave to appeal the conviction and sentence.[1]
[1]An application for bail was also made, but not pressed, at the hearing of these applications.
The single proposed ground of the application for leave to appeal the conviction is that a miscarriage of justice occurred by the County Court failing to allow the application to change the plea.
The application for leave to appeal the sentence advances the following two proposed grounds:
(a)a miscarriage of justice occurred by the County Court imposing a sentence that was manifestly excessive in all its aspects;
(b)a miscarriage of justice was occasioned by the application of the reasoning for sentencing in DPP v Bulfin (‘Bulfin’)[2] to the facts of this case.
[2][1998] 4 VR 114 (‘Bulfin’).
For the following reasons, we have refused the application for leave to appeal both the conviction and sentence.
Charges
The three charges relate to three individuals:
(a)BT, a 74 year old retired hospital cleaner who sought assistance from the applicant on the recommendation of a nurse at her workplace;
(b)PK, a 60 year old office manager who contacted the applicant through an online referral website looking for help to manage her retirement finances; and
(c)JW, a 60 year old switchboard operator who sought advice from the applicant on the recommendation of a friend.
Each charge alleges that the applicant aided, abetted, counselled or procured the commission of an offence by Ostrava by engaging in dishonest conduct in relation to a financial product or a financial service in the course of carrying on a financial services business.
In the case of the first two charges the alleged dishonest conduct occurred during February and March 2015 and was constituted by the transfer of funds, while in the case of charge 3, the alleged conduct occurred in November 2015 and was constituted by the transfer of shares and convertible notes.
The relevant particulars of dishonesty were as follows:
Charge 1Transferring a total of $20,000 from BT’s superannuation fund bank account to Trade BTC Pty Ltd (‘Trade BTC’) to pay for shares in Trade BTC and to Thrive Lending Pty Ltd (‘Thrive Lending’) to pay for shares in Thrive Lending without telling BT that those companies:
(i)were companies wholly controlled by the applicant by reason of him being their sole director and company secretary; and
(ii)had little market value.
Charge 2Transferring a total of $30,000 from PK’s superannuation fund bank account to Trade BTC to pay for shares in Trade BTC, Thrive Lending to pay for shares in Thrive Lending, and Beta Pharmacology Pty Ltd (‘Beta Pharmacology’) to pay for shares in Beta Pharmacology without telling PK that those companies:
(i)were companies wholly controlled by the applicant by reason of him being their sole director and company secretary; and
(ii)had little market value.
Charge 3Transferring shares and convertible notes held by the W superannuation Fund to Equity Capital Partners Hedge Fund Pty Ltd (‘Equity Capital Partners’) without adequately advising JW:
(i)that Equity Capital Partners Hedge Fund was a company wholly controlled by the applicant by reason of him being its sole director and company secretary;
(ii)that Equity Capital Partners Hedge Fund was a company in which he had a personal interest and by which he would personally benefit from any investment into the Equity Capital Partners Hedge Fund;
(iii)that ASIC had sought the winding up of Ostrava and related entities; and
(iv)that he was restrained from providing financial services by reason of an order made by the Federal Court on 20 October 2015.
Nature of offending[3]
Charge 1 – BT
[3]This summary of offending is largely derived from the helpful summary provided by the sentencing judge: DPP v Grimm [2024] VCC 1360, [2]–[48] (Judge O’Connell).
In 2014, BT retired from her job as a hospital cleaner. She was 73. She was entitled to $92,000 from her savings in her superannuation fund. Ordinarily her financial affairs had been managed by her husband, LT. However, he had become unwell from asbestosis so BT began to look into her finances herself.
BT heard about the applicant from a friend who told her that he was prepared to come to BT’s house to provide financial advice. BT was attracted to that idea because LT was sick at home and she was reluctant to leave him. She told LT about the applicant and LT contacted him.
After speaking with LT, the applicant visited the home of BT and her husband at the end of 2014. They told the applicant that they wanted to make sure that BT would receive a regular pension. The applicant told BT that she could make better money with him than with her superannuation fund. She could receive a pension of $500 a week and some of her money should be put into an Ostrava account to be invested with other clients’ money. BT and her husband agreed and she signed a number of documents which she did not read. She was not provided with copies. LT was too ill to read the documents.
The applicant gave BT a document titled ‘Ostrava Asset Management and Superannuation Investment Summary BT’, but the applicant did not go through the document with her. He did not discuss alternatives to investing with Ostrava or fees or benefits she might receive if she did so. BT did not recall the applicant mentioning a self-managed superannuation fund.
A few weeks later, the applicant met with BT and her husband again. LT was very sick and on oxygen. He asked them both to sign further documents. He did not go through the documents with either of them or explain what they were. BT signed the documents as the applicant requested because she trusted him. He did not give them copies of these documents. BT thereby gave the applicant authority to move her money into Ostrava which she believed was a superannuation fund. She did not recall the applicant mentioning a self-managed superannuation fund.
In January 2015, the applicant arranged for a bank account to be opened with Bank of Western Australia (‘BankWest’) in the name of the T superannuation fund. BT did not recall the applicant advising her that the applicant was going to open that account and that he would have authority to operate it.
LT died on 25 January 2015.
On 30 January 2015, BT’s existing superannuation savings were rolled over into the account which the applicant had set up.
On 18 February 2015, the applicant transferred $10,000 from the T superannuation fund to the account of Trade BTC to purchase 10,000 shares in Trade BTC.
Other than sending the email extracted below on 11 February 2015, the applicant did not consult with BT about the transfer of those funds. Indeed, apart from the ‘Trade Notice’ in the email she never received documents about the transfer or share purchase until investigators brought it to her attention.
The email of 11 February 2015 relevantly advised the following:
Trade Notice UNITS DETAILS LIMIT MISC BUY 45000 OST 100 OSTRAVA FUND 10000 PMC 100 PMC 10000 TBTC 100 TRADE BTC 10000 TL 100 THRIVE LENDING SELL *Please note the above trade. If you do not wish to proceed, please let us know within 48 hours of receipt of this email
On the same day, the applicant transferred $10,000 from the T superannuation fund to the account of Thrive Lending. Other than sending the extracted email the applicant did not consult BT about that transfer either.
Trade BTC was registered on 11 February 2015 with the applicant as its sole director and secretary. Its registered office was the same as Ostrava’s. In February 2015, Trade BTC had no legally protected intellectual property, no cash flow, no assets, no employees and, in the liquidator’s opinion, there was no identifiable plan for the future of the business. In reality, it had no real market value.
Trade BTC reported that it had issued 197,600 preference shares, however all but 20,000 of those shares were issued for free. The only shares purchased were those bought by the T superannuation fund and the K superannuation fund (described under Charge 2). Each superannuation fund acquired 10,000 shares at $1 per share. Trade BTC’s bank account was opened on 13 February 2015. Its only income was $20,000 — $10,000 from the T superannuation fund and $10,000 from the K superannuation fund. Within five weeks of opening, almost all of the money in the account had been paid to an Ostrava related company for various services and for rent of the office.
Thrive Lending was incorporated on 11 February 2015 with the applicant as its sole director and company secretary. Again, the registered address was the same as Ostrava’s. Just as in the case of Trade BTC, Thrive Lending had no legally protected intellectual property, no cash flow, no assets, no employees and, in the liquidator’s opinion, no identifiable plan for the future of the business. In reality, it also had no real market value.
Thrive Lending purported to have issued 255,000 shares of the same class, however all but 20,000 of those shares were issued for free. The only shares purchased were those bought by the T superannuation fund and the K superannuation fund — 10,000 shares each at $1 per share. Its bank account was opened on 13 February 2015 and the only income received was the $20,000 paid by the K superannuation fund and the T superannuation fund. Within five weeks of opening, almost all of the money in the account had been paid out to an Ostrava related company for various services and for rent of the office. The account was closed on 15 July 2015.
Had BT been informed by the applicant of his personal interest in Trade BTC or Thrive Lending or their market value, she would not have agreed to have invested in them.
Charge 2 – PK
In mid-2014, PK was working as an office manager and about to turn 60. She was concerned that she did not have a retirement plan in place and so made online enquiries with financial services referral websites seeking advice as to how to maximise her retirement income. She indicated that her available funds consisted of $100,000 together with $55,000 in superannuation and no other assets.
The following day, as a result of those inquiries, an employee from Ostrava contacted PK and arranged for her to meet with the applicant on 5 December 2014.
On that day, PK went to the Ostrava office and was introduced to the applicant. The applicant informed her that he was a financial adviser and director of Ostrava. He told her that he established self-managed superannuation funds for his clients in order to invest in shares on their behalf. PK recalled the applicant saying words to the effect that they were ‘blue chip’ shares. PK recalled the applicant telling her that if he was to buy shares on her behalf he would notify her first and only buy them once she had given permission. She believed the applicant said that it would be as secure as having money in the bank.
PK informed the applicant that she had previous financial setbacks, that she had no other assets to rely on and needed low to medium risk investments for safety but with some growth because this was her life savings. The applicant told her that was exactly what would happen and PT believed that the applicant also told her that the money would triple in five years no matter which way the market went.
PK agreed to become a client of Ostrava and to meet with the applicant again on 21 January 2015 in order to sign the necessary paperwork.
On 21 January 2015, the applicant met with PK and she signed a range of papers the applicant provided to her. The applicant told her these were standard documents to set up the superannuation fund. The applicant did not give her copies. She did not read them because she trusted his explanation of the documents. The applicant explained that it would be useful for the applicant to be authorised to operate the account and on that basis the applicant was provided with that authorisation.
On 12 February 2015, a large part of PK’s savings was transferred to the new K superannuation fund bank account.
On 18 February 2015, the applicant emailed PK a ‘Trade Notice’ that related to buying 10,000 shares in each of Trade BTC, Thrive Lending and another company. PK took this as a request for instructions to purchase these shares and so she contacted the applicant. The applicant told her words to the effect ‘I have chosen the shares as I have investigated the companies and they show promise … the shares are a perfect fit to hold for the medium to long term of 3 to 5 years’. Pursuant to that representation she agreed to purchase the shares believing they were companies listed on the Australian Stock Exchange.
On the same day, the applicant transferred $10,000 from the K superannuation fund to the account of Trade BTC and $10,000 from that same superannuation fund to Thrive Lending. The applicant did not tell PK about his personal interest in these companies or their real value. Had she known those details she would not have agreed to the purchases.
On 11 March 2015, the applicant sent PK another Trade Notice relating to buying 10,000 shares in Beta Pharmacology for $10,000. PK contacted the applicant about the notice and asked the applicant if the reasons for the notice were the same as that which the applicant had provided in the 18 February 2015 notice. The applicant said the reasons were the same. PK took this to mean that Beta Pharmacology was a company listed on the Australian Stock Exchange and so she approved the purchase. That same day the applicant transferred $10,000 from the K superannuation fund to the bank account of Beta Pharmacology.
Beta Pharmacology was registered as a company by the applicant on 23 February 2015 with the applicant as sole director and company secretary. Its business plan, which was dated November 2014, indicated that it proposed to participate in the medicinal cannabis industry if and when it became legalised in Australia. In particular, it was to operate a website of information about medicinal cannabis. As at March 2015, there was no such website.
Beta Pharmacology had no legally protected intellectual property, no cash flow and, in the liquidator’s opinion, there was no identifiable plan for the future of the business. Like Trade BTC and Thrive Lending it had no market value. It purported to have issued 346,225 preference shares, but all but 30,000 of them were issued for free. The only money invested in the company was $30,000 (30,000 shares at $1) of which $10,000 was from PK’s superannuation fund. By the end of March 2015, Beta had only $1,110 in the bank. In that month the applicant had paid $25,300 to other Ostrava companies for ‘professional services’. Its bank account was closed in July 2015 in debt.
The applicant did not tell PK that the applicant had a personal interest in the company or the real details about its market value. If the applicant had done so she would not have approved the purchase of the shares.
Charge 3 - JW
Around 2012, JW who was in her late 50s, decided she needed to review her retirement finances and seek some professional advice. The applicant was recommended to her by her friend. JW had undergone major surgery in 2012 and wanted some support payments during her recovery. She also had a $10,000 credit card debt which she needed to repay.
The applicant met with JW a couple of times in late 2012, and in May 2013 she decided to accept his advice to set up a self-managed superannuation fund that the applicant would administer through Ostrava. The applicant provided her with a number of documents which she signed in May 2013. She did not read the documents and the applicant did not give her copies of those documents. She told the applicant that she did not want to invest a lot of money in shares, but that she needed her investment to remain available to her as cash to allow for contingencies such as needing to pay for medical expenses.
In May 2015, JW travelled overseas with a friend; a trip which she had been planning for some months. During the planning she had become concerned about her ability to pay for her travel expenses. She contacted the applicant about using a portion of her superannuation to cover those expenses. The applicant told her that would be fine and, just before she left the country, the applicant visited her and asked her to sign some papers telling her that she had shares invested that would pay for her trip.
For a period of about six months after JW had returned from overseas she attempted to contact the applicant through emails and by visiting his office to discuss paying off expenses of $10,000.
On 5 November 2015, the applicant visited her at her home and told her that she could obtain the money she needed by selling her shares. In order to do this the applicant asked her to sign some documents and she did so. The applicant told her that the documents related to cashing in shares that would enable her to meet her outstanding credit card debt. The applicant did not otherwise explain what those documents meant. In fact, those documents were ‘off market transfer forms’ related to shares and convertible notes owned by the W superannuation fund valued at $72,427.83. In signing the transfers rather than cashing them in, the ownership of those shares and convertible notes was transferred to Equity Capital Partners.
That hedge fund was wholly controlled by the applicant as its sole director and company secretary. Initially its principal place of business was listed as the Ostrava office, but was subsequently changed to the applicant’s home address. At no stage between 5 November and 11 November (when the transfers of shares and convertible notes was completed) did the applicant tell JW that the applicant controlled Equity Capital Partners; that the applicant had a personal interest in that entity and would personally benefit from any investment in that entity; that ASIC had sought the winding up of Ostrava and its related entities; or that the applicant had been restrained from providing financial services by an order made by the Federal Court on 20 October 2015.
After the meeting, the applicant transferred shares worth more than $72,000 to the hedge fund and gave JW $10,000 for payment of her credit card and shares in the hedge fund. However, the shares in the hedge fund were ultimately of no value and she was out of pocket $62,000.
One of the documents JW signed was the second page of a two-page investment application form relating to the hedge fund. The fine print on the first page of that document set out an extensive range of ways in which the applicant and his wife would have personally benefited from any investment in the hedge fund. JW was not shown that first page nor was she told of its substance.
The hedge fund itself was dormant until early November 2015 and had no operations. It was only with the transfer of shares from the W superannuation fund and other like transfers in November that it started to operate. The applicant did not tell JW anything about this. The shares transferred into the hedge fund were sold between November 2015 and January 2016.
As indicated earlier, ASIC sought the winding up of Ostrava and related entities in August 2015. On 20 October 2015, the Federal Court ordered, by consent, the appointment of provisional liquidators to Ostrava and that the applicant be restrained from providing financial services until further order. The applicant also spoke to the liquidators in October 2015. None of that was disclosed to JW.
Procedural history[4]
[4]This procedural history is derived from the helpful chronology set out in DPP v Grimm (County Court of Victoria, Judge Todd, 27 June 2024), [19]–[48].
The procedural history of this matter is extensive and unfortunate. However, in the light of the limited scope of these applications it may be summarised briefly.
After being first charged in November 2018, the applicant was committed to stand trial on 30 August 2019. The applicant’s trial was first listed to commence on 5 October 2020, but was adjourned on account of the suspension of jury trials during the pandemic. During 2021, nine procedural hearings took place, with a trial listed to commence on 16 March 2022. However, between 7 March 2022 and December 2022, the applicant made a number of applications to adjourn the trial.
When the trial ultimately commenced on 18 January 2023, some preliminary argument unfolded and a jury panel was arranged to be made available the following day. On that day, counsel for the applicant informed the court that the case had resolved, and there had been ‘an agreement as to certain particulars of dishonesty’ which were yet to be incorporated into the indictment. The parties sought time to prepare an indictment to reflect that agreement.
A plea indictment with particulars was prepared, and on 20 January 2023, the applicant was arraigned and entered pleas of guilty to the three charges we have identified.
Subsequently, on 8 June 2023, the plea commenced. The Further Amended Opening (‘FAO’) was read aloud in court. Counsel for the applicant stated: ‘there’s certainly no issue with the indictment or Opening’. Moreover, the court was advised that there would be no contest on the plea. Counsel for the applicant also confirmed that the FAO would form the factual basis of the plea. The plea was then adjourned to 23 June 2023.
A number of further adjournments of the plea took place thereafter. It appears that Mr Rattray, who had appeared for the applicant from January, was in the process of taking ethical advice, and that the applicant ultimately withdrew his instructions from Mr Rattray.
The applicant subsequently made application to change his plea which proceeded over a number of days during the first half of 2024 and was ultimately refused by Judge Todd on 27 June 2024.
The final plea then took place at a hearing on 24 July 2024 and the applicant was sentenced on 5 September 2024.
Application for leave to appeal conviction
Legal framework
Section 276(1)(c) of the Criminal Procedure Act 2009 relevantly provides that, on an appeal under s 274, the Court of Appeal must allow the appeal against conviction if the appellant satisfies the court that there has been a ‘substantial miscarriage of justice’ for a reason which is not the result of an error or irregularity in relation to the trial.
There is one uniquely right answer as to whether the applicant would be subject to a substantial miscarriage of justice if he was held to his plea. It follows that the ‘correctness’ standard is the applicable standard of appellate review in this case.[5]
[5]GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 414 ALR 635, 642 [16] (Kiefel CJ, Gageler and Jagot JJ, Gleeson J agreeing); [2023] HCA 32; Moore (a pseudonym) v The King (2024) 419 ALR 169, 174 [15] (Gageler CJ, Edelman, Steward, Gleeson and Beech-Jones JJ); [2024] HCA 30.
In Gurappajiv The Queen, this Court stated:
At the outset, it should be noted that the language of s 276 of the Criminal Procedure Act 2009 departs from that found in the common form criminal appeal statutes (under which the majority of cases in this area have been decided). Pursuant to s 276(1), this Court is required to allow an appeal against conviction if the appellant satisfies the Court that as the result of an error or an irregularity in, or in relation to, the trial, or for any other reason, there has been a substantial miscarriage of justice. Many cases decided under the common form statutes have held that an appeal against conviction after a guilty plea will be entertained only in exceptional circumstances. In our opinion, those cases will continue to provide a useful guide to the kinds of situations in which appellate intervention is warranted in a case such as this, notwithstanding that s 276 departs from the language of the common form statutes.
Forde is generally regarded as being the seminal case in this area of discourse. Avory J observed:
A plea of guilty having been recorded, this court can only entertain an appeal against conviction if it appears: (i) That the appellant did not appreciate the nature of the charge, or did not intend to admit that he was guilty of it; or (ii) that upon the admitted facts he could not in law have been convicted of the offence charged.
It has been held that the propositions formulated by Avory J ‘will be found to provide a sound guide to be followed in most, if not all, cases’, but they are not exhaustive.[6]
[6]Gurappajiv The Queen [2018] VSCA 187, [5]–[7] (Priest, Beach and Weinberg JJA) (citations omitted). The Court went on to cite R v Murphy [1965] VR 187, 190 (Sholl J) and Meissner v The Queen (1995) 184 CLR 132, 157 (Dawson J).
In Peters v The Queen (No 2) (‘Peters’), this Court also cited R v Forde,[7] stating:
The test for determining whether a conviction should be set aside following a plea of guilty is whether the applicant has established a substantial miscarriage of justice, in accordance with s 276(1) of the Criminal Procedure Act2009. Although most cases in this area have been decided under earlier criminal appeal provisions, those cases remain a useful guide to the kinds of circumstances that will tend to satisfy the modern test.
Although the categories of miscarriage of justice are of course not closed, two kinds of situation have emerged repeatedly in the cases. As articulated by Avory J in R v Forde, they are, first, where the applicant did not appreciate the nature of the charge, or did not intend to admit that he was guilty of it, and secondly, where the applicant could not in law have been convicted of the offence charged on the facts alleged.
The first of these cases can be described as challenging the integrity of the plea in the sense that it was not really attributable to a genuine consciousness of guilt. Of itself, that will ordinarily only suffice to warrant a new trial if, in addition to doubt attaching to the integrity of the plea, it is shown that there was an ‘issuable question of guilt’, meaning a genuine issue as to the guilt of the accused.
The second kind of circumstance does not involve merely an arguable case as to the guilt or otherwise of the accused. It involves a relatively narrow class of case in which the material relied upon by the Crown was insufficient at law to sustain a conviction on the charge in question. In this situation, the focus is not on the integrity of the plea but on the conviction itself. The conviction involves a miscarriage of justice because the facts alleged simply could not support a conviction, or the charge in question was not known to the law.[8]
Applicant’s submissions
[7][1923] 2 KB 400.
[8]Peters v The Queen (No 2) [2019] VSCA 292, [37]–[40] (Maxwell P, Kaye and McLeish JJA) (citations omitted) (‘Peters’).
The applicant’s primary submission was that the disclosure requirements contained in ch 6D of the Act[9] were complied with by reason of the application of s 708 (particularly s 708(12)). He submitted that s 708 avoided the need for any disclosure to investors under the Act and also operated to limit the circumstances in which a failure to disclose could constitute dishonest conduct for the purpose of s 1041G of the Act. Section 708 thereby provided a complete defence to the charges alleging a breach of s 1041G.
[9]The parties agreed that the form of the Act which was applicable was Compilation No. 139, as compiled on 19 December 2014.
The applicant submitted that s 708(12) excluded the application of s 1041G by reason of the maxim of statutory interpretation, ‘generalia specialibus non derogant’, which implied that ‘failing to disclose’ cannot be the actus reus of an offence in situations covered by s 708.
The applicant also submitted that, because there was compliance with s 708, the applicant was ‘not guilty’ of an offence for the purposes of s 1311(1)(e).
He also sought to rely on s 703 which prevented the contracting out of the provisions contained in ch 6D. He submitted that the complainants and ASIC ‘cannot require the applicant to make disclosure according to the contract on account of his compliance with s 708(1)’.
In support of these contentions, the applicant cited Gore v Australian Securities and Investments Commission (‘Gore’),[10] R v Donaldson & Poumako (‘Donaldson’),[11] and Bell v The Queen (‘Bell’).[12]
[10][2017] FCAFC 13.
[11][2009] SASC 31.
[12][2001] WASCA 174.
The applicant therefore submitted that s 708 operates as a complete defence to the dishonest conduct alleged against him, such that he could not be convicted of the offences as a matter of law.
Although the applicant initially made a number of complaints about his counsel, he ultimately abandoned reliance on this part of his case in circumstances where he accepted that the advice generally concerned the application of s 708. This was an appropriate stance to take. Even if, as claimed, some of the advice to the effect that s 708 did not provide a defence was ‘robust’, it did not assist the applicant if his submission about s 708 was incorrect.
However, the applicant did maintain that his plea of guilty was not attributable to a genuine consciousness of guilt. He submitted that he ‘did not think he was doing anything dishonest or unlawful, and he understood his conduct was in compliance with the Act’. The applicant submitted that he was never happy with the plea opening and relied on a finding made by Judge Todd as follows:
Notwithstanding my findings about [the applicant’s] credibility more generally, I will give [the applicant] the benefit of accepting the possibility he then may have subjectively believed, and perhaps even still believes, he is not guilty.[13]
[13]DPP v Grimm (County Court of Victoria, Judge Todd, 27 June 2024), [97].
In making these submissions, the applicant relied upon a passage from Weston v The Queen (‘Weston’), which cited a decision of the High Court in Maxwell v The Queen,[14] as follows:
Integrity of plea challenged before conviction and sentence
…
9. Consistent with the reasoning in the joint judgment in Maxwell and Kumar, even if the plea was free and voluntary it will also be within a sound exercise of the discretion to allow the applicant to change his plea before conviction and sentence if the applicant establish [sic] that he did not believe himself to be guilty at the time of the plea but pleaded guilty in order to gain some technical advantage.[15]
Respondent’s submissions
[14](1996) 184 CLR 501; [1996] HCA 46.
[15]Weston [2015] VSCA 354, [109.9] (Redlich JA) (‘Weston’).
The respondent submitted that s 708 did not provide a defence to a charge of dishonest conduct contrary to s 1041G of the Act because it proceeded on a misunderstanding of the relationship between s 708 and s 1041G. It also misunderstood the factual basis for the charges which were concerned with the conduct of Ostrava, not the start-up entities. Ostrava did not make an offer of securities for sale or issue which would be the subject of the disclosure requirements contained in chapter 6D.
In relation to the submissions concerning consciousness of guilt, the respondent contended that any belief in innocence is relevant but not determinative. Any belief also appeared to have stemmed from the applicant’s position that s 708 proved a complete defence to the charges. Given such a belief was misplaced, it could not prevent a plea of guilty from being attributable to a genuine consciousness of guilt.[16]
Consideration
(1) Statutory provisions
[16]Given that we have largely accepted the respondent’s approach, it is unnecessary to reproduce the respondent’s submissions in any further detail.
Section 708 is contained in ch 6D which is entitled ‘Fundraising’.
Part 6D.1 makes provision for the general application of the fundraising provisions in relation to the making of an offer of securities for sale or issue. Section 700(2) provides that offering securities for sale or issue includes the making of invitations. Section 700(4) provides that the chapter applies to offers of securities received in the jurisdiction regardless of whether any resulting issue, sale or transfer occurs. Section 703 (cited by the applicant) provides:
A condition of a contract for the sale or issue of securities is void if it provides that a party to the contract is:
(a)required or bound to waive compliance with any requirement of this Chapter; or
(b)taken to have notice of any contract, document or matter not specifically referred to in the disclosure document for the offer
Part 6D.2 than makes provision for when disclosure to investors about securities is required, as well as the types of disclosure required to be made. Thus, s 704 provides that various provisions in pt 6.2 div 2 (including ss 706, 707 and 708) say when an offer of securities needs disclosure to investors ‘under this Part’, while section 705 makes provision for the content of that disclosure, also ‘under this Part’.
In terms of when the relevant obligation arises, ss 706 and 707 provide that offers of securities for issue or sale need disclosure ‘under this Part’ unless s 708 or s 708AA says otherwise. Sections 708 and 708AA then make provision for offers that do not need disclosure to investors ‘under this Part’. The applicant in this case cited s 708(12) which provided:
Offers that do not need disclosure
…
(12)An offer of a body’s securities does not need disclosure to investors under this Part if it is made to:
(a)a senior manager of the body or a related body or their spouse, parent, child, brother or sister; or
(b)a body corporate controlled by a person referred to in paragraph (a).
…
In terms of the content of the disclosure obligation, s 705 provides a table which shows the types of ‘disclosure documents’ which are to be used if an offer of securities ‘needs disclosure to investors under this Part’. Those documents include prospectus documents and other documents as specified. The requisite content of those disclosure documents is then detailed further in divs 3 and 4 of pt 6D.2.
Part 6D.3 makes provision for sanctions and remedies. In particular, s 727(1) provides:
Offer of securities needs lodged disclosure document
(1)A person must not make an offer of securities, or distribute an application form for an offer of securities, that needs disclosure to investors under Part 6D.2 unless a disclosure document for the offer has been lodged with ASIC.
However, as indicated already, the applicant was not charged in respect of a breach of s 727, but rather a breach of s 1041G. This latter provision concerns ‘financial services and markets’ and is contained in a different chapter of the Act, ch 7, to which we now turn.
The object of ch 7 is expressed in s 760A which provides:
Object of Chapter
The main object of this Chapter is to promote:
(a)confident and informed decision making by consumers of financial products and services[17] while facilitating efficiency, flexibility and innovation in the provision of those products and services; and
(aa)the provision of suitable financial products to consumers of financial products; and
(b)fairness, honesty and professionalism by those who provide financial services; and
(c)fair, orderly and transparent markets for financial products; and
(d)the reduction of systemic risk and the provision of fair and effective services by clearing and settlement facilities.
[17]Part 7.1 contains detailed provisions concerning the meaning of ‘financial products’ and ‘financial services’. The application was conducted on the basis that there was no dispute that Ostrava was carrying on a financial services business in relation to a financial product or service.
Section 1041G is contained in pt 7.10 div 2 which identifies a series of ‘prohibited conduct’ relating to financial products and financial services and reads:
Dishonest conduct
(1)A person must not, in the course of carrying on a financial services business in this jurisdiction, engage in dishonest conduct in relation to a financial product or financial service.
(2)In this section:
dishonest means:
(a)dishonest according to the standards of ordinary people; and
(b)known by the person to be dishonest according to the standards of ordinary people.
The conduct of Ostrava (which the applicant allegedly aided and abetted) was alleged to be contrary to both s 1041G(1) and s 1311(1). The latter provision is a miscellaneous provision contained in ch 9 concerned with offences generally and provides:
(1)A person who:
(a)does an act or thing that the person is forbidden to do by or under a provision of this Act; or
(b)does not do an act or thing that the person is required or directed to do by or under a provision of this Act; or
(c)otherwise contravenes a provision of this Act;
is guilty of an offence by virtue of this subsection, unless that or another provision of this Act provides that the person:
(d)is guilty of an offence; or
(e)is not guilty of an offence.
(2) Analysis
The applicant’s submissions about s 708 are without merit.
First, even if the disclosure provisions contained in ch 6D have relevant application, the provisions do not purport to exhaustively define the range of circumstances in which conduct may be dishonest under s 1041G. Secondly, the provisions of ch 6D are irrelevant, given the conduct charged concerns the aiding and abetting of the conduct of Ostrava, which did not make an offer of any shares.
Turning to the first point, the relevant provisions should be construed according to the usual principles, namely, by reference to the ordinary meaning of the words used, taking into account both context and legislative purpose.[18]
[18]R v A2 (2019) 269 CLR 507, 520–22 [32]–[37] (Kiefel CJ and Keane J), 545 [124] (Bell and Gageler JJ); [2019] HCA 35.
As indicated already, the provisions contained in pt 6D.2 make detailed provision as to when certain disclosure must be made, as well as the relatively narrow content of that obligation to disclose, in the specific context of a sale or issue of securities.
The confined operation of pt 6D.2 is underscored by the language. Hence, s 704 makes provision for when an offer of securities needs disclosure ‘under this Part’. The phrase, ‘under this Part’, is also repeated in numerous places. It suggests a narrow operation which does not purport to regulate conduct the subject of other parts of the Act. The content of the duty to disclose is also confined to a specified range of documents as identified in s 705 and does not purport to be exhaustive as to the concept of disclosure more generally.
The evident purpose of ch 6D is therefore to provide for certain minimum documentary disclosure requirements in the case of an offer of securities for sale or issue. In this context, s 708 merely defines a set of circumstances in which such disclosure need not occur. There is nothing to suggest that it is intended to have some wider application.
This confined focus may also be compared with the very different focus of ch 7, which self-evidently appears in a completely different chapter in the Act. It also deals with a very different subject matter, namely, the conduct of those engaged in the financial services business.
It may be immediately observed that there is nothing in the language of s 1041G, specifically, the definition of ‘dishonesty’ in s 1041G(2), to suggest that the ‘dishonesty’ concept should be limited to only certain types of non-disclosure which arise from non-compliance with the provisions of pt 6D.2.
Any such limitation on the dishonesty concept would also be contrary to the evident purpose of the provision. Hence, the ‘main object’ of ch 7 includes the broad purpose of promoting ‘fairness, honesty and professionalism’ by those who provide financial services. As was said in Braun v The Queen (‘Braun’):
Section 1041G of the Corporations Act, accordingly, can be seen as one of several provisions in Ch 7 directed to reinforcing the requirement for integrity in the financial services industry by imposing criminal and civil penalties for conduct which is “dishonest” as defined in the section.[19]
[19]Braun v The Queen (2008) 68 ACSR 539, 553 [74] (Hall J); [2008] NSWCCA 269 (‘Braun’).
The evident purpose of s 1041G is hence to prohibit dishonest conduct, including by way of omission, in the provision of financial services. Such purpose would be undermined if the concept of dishonesty was to be so limited that a person’s obligation to be honest was exhausted by the provision of a specified disclosure document under pt 6D.2 — no matter how dishonest they were in other respects.
The language, context and purpose of the relevant provisions therefore do not provide any foundation for the applicant’s submission that s 708 would operate as a defence.
A number of the other submissions of the applicant may be disposed of more briefly.
First, the principle of generalia specialibus non derogant does not assist the applicant. The two sets of provisions (contained in ch 6D and ch 7) deal with very different subject matters and are not relevantly inconsistent. There is nothing to suggest that the disclosure of requisite documents in offering securities for sale or issue was intended to exhaustively cover the concept of dishonesty in the financial services industry. The only possible qualification to this proposition might be if the dishonest conduct was concerned with a failure to disclose a requisite prospectus document. However, it is unnecessary to consider this scenario further as it did not arise in this case.
Nor does s 1311(1)(c) assist the applicant. The relevant proviso relied upon only operates if another provision of the Act provides that the person ‘is not guilty’ of the relevant offence. Compliance with pt 6D.2 says nothing about whether the applicant was dishonest in every respect, more particularly, it does not say that the applicant was ‘not guilty’ of an offence under s1041G. It merely provides that he will not be taken to have contravened ‘this’ pt 6D.2 if he lodges the relevant disclosure documents.
Next, the fact that parties may not contract out of the requirements in ch 6D under s 703 says nothing about the content of those requirements, the requirements of s 1041G, nor any interaction between the two.
Finally, the cases cited are of no assistance to the applicant. The decisions in Gore[20] and Donaldson[21] were concerned with a breach of s 727, and not the dishonesty offence the subject of this application. The decision in Bell[22] was also concerned with the specific offence of offering securities without lodging a prospectus contrary to a disclosure provision then contained in s 1018(1) (which was later repealed and replaced by pt 6D.2). The case says nothing about whether the provisions of pt 6D.2 would operate to limit the concept of dishonesty in other cases of non-disclosure.
[20][2017] FCAFC 13.
[21][2009] SASC 31.
[22][2001] WASCA 174.
We therefore reject the applicant’s submission to the effect that pt 6D.2 exhaustively defines the range of circumstances in which conduct may be dishonest by reason of omission. More particularly, we reject the submission that the ‘failure to disclose’ alleged could not form the actus reus of the dishonesty offence under s 1041G solely because there had been compliance with ch 6D by reason of s 708.[23]
[23]We have presumed, in favour of the applicant, that the provisions of ch 6D have application despite the fact that:
(a) the respondent submitted that there was not in fact any offer of securities for sale in respect of charges 1 and 3;
(b) it was unclear whether s 708 would apply to this case given that any offer of securities was made to a self-managed superannuation fund held by each investor. For the purposes of this application, however, we have accepted that s 708(12) might apply by reason of the applicant’s ‘control’ as defined in s 50AA (as the applicant contended), or because some other part of s 708 was applicable, for example, s 708(1).
As indicated already, however, there is another flaw in the applicant’s submissions. Thus, even if s 708 somehow limited the concept of dishonesty for the purposes of s 1041G, this could only be in relation to the making of an offer of securities to investors. But the conduct the subject of these three charges is directed to the aiding and abetting of the conduct of Ostrava. Ostrava did not engage in any capital raising, but instead transferred funds and securities to other entities associated with the applicant. It was not subject to any obligation under ch 6D in doing so. Rather, that obligation was imposed on the completely different ‘start-up’ entities.
It follows that, even if s 708 could somehow limit the concept of dishonesty in s 1041G it is inconsequential and irrelevant given that s 708 was not even engaged in respect of the actions of Ostrava. Put another way, pt 6D.2 could not limit the disclosure that s 1041G required of Ostrava.
For the reasons given, then, the applicant has not established any substantial miscarriage of justice by reason of the application of s 708.
It remains to deal with the applicant’s submission that he had a subjective belief that he was innocent, which may be disposed of more expeditiously.
First, any such belief (even if accepted) may only be relevant, but is not decisive.[24]
[24]Weston [2015] VSCA 354, [109.12] (Redlich JA).
Second, the passage cited from Weston concerned a challenge to the integrity of the plea prior to conviction, rather than after conviction as in this case. Moreover, to impugn the integrity of the plea, whether before or after conviction, the applicant would ordinarily need to show an ‘issuable question of guilt’.[25] For reasons expressed above, no such issue arises.
[25]Ibid [109.5]. See also Peters [2019] VSCA 292, [37]–[40] (Maxwell P, Kaye and McLeish JJA).
Finally, and perhaps most importantly, the basis for any subjective belief was that the applicant understood his conduct was ‘in compliance with the Act’ because s 708 provided some general immunity against prosecution for dishonest conduct under s 1041G. The applicant’s understanding is hence based on his construction of s 708, which, for reasons given already, is wrong at law. In circumstances where the applicant’s subjective belief is founded on a fundamental error of law and does not dispute the essential elements giving rise to the charges, that belief does not undermine the integrity of the plea. Nor does it prevent that plea from being attributable to a genuine consciousness of guilt in respect of the offence as charged.
Application for leave to appeal sentence
Judge’s reasons
The judge observed that the seriousness of these offences was underlined by the fact that they are punishable by a maximum term of imprisonment of 10 years.[26]
[26]DPP v Grimm [2024] VCC 1360, [73] (Judge O’Connell).
He considered that the facts spoke for themselves and that the applicant well understood the personal circumstances of each of these victims and must have appreciated that any loss to their limited retirement funds would be felt acutely. The applicant’s actions constituted a culpable breach of their trust and professional responsibilities. To have engaged in further such dishonesty when he was restrained from providing financial services by court order, as in the case of Charge 3, aggravated the offending.[27]
[27]Ibid [77].
The judge also stated:
It is paramount that when people seek professional assistance in making decisions which materially affect their financial security that they feel they can trust and rely upon the advice they receive. In each of the three instances constituting these charges you betrayed that trust. Whilst the sums of money lost were relatively modest, that money meant a great deal to these victims and they trusted you to keep that money secure. I therefore have no hesitation in assessing your moral culpability as high.[28]
[28]Ibid [78].
Ultimately the judge accepted that, despite the relatively lower quantum involved, the objective criminality of the offending was ‘high’.[29]
[29]Ibid [79].
The judge accepted the submission of counsel for the applicant that other decisions tended to involve greater criminality and their comparative utility was therefore limited. Even so, those authorities showed that behaviour of this kind generally attracted heavy sentences.[30]
[30]Ibid [80].
The judge recorded that the applicant had made restitution to the first two victims, albeit belatedly. He considered that this was to his credit, despite its lack of timeliness.[31] However, he noted that the applicant maintained that he was not guilty of the offences. Restitution aside, it was therefore difficult to discern any other basis on which to infer remorse for what he had done. The judge nevertheless allowed some reasonable reduction in sentence for the utilitarian value of the plea. That reduction would flow in spite of the denial of the offending and the protracted procedural history, a significant proportion of which was of the applicant’s own making.[32]
[31]As the judge also noted, an external agency compensated JW.
[32]DPP v Grimm [2024] VCC 1360, [82]–[83] (Judge O’Connell).
With respect to delay, the judge had regard to the applicant’s rehabilitation subsequent to this offending as mitigating the sentence. He also took into account the punitive effect of delay flowing from the uncertainty felt waiting for the matter to be resolved. That last consideration, however, was qualified by the period of time during which the applicant had control over the length of the delay.[33]
[33]Ibid [84].
The judge accepted that the applicant was otherwise a person of good character and that his conduct subsequent to this offending demonstrated that he has very good prospects for rehabilitation. He also accepted that any term of imprisonment would be extremely difficult for his partner and family.[34]
[34]Ibid [87].
However, in crimes of this kind, the judge considered that personal considerations tended to be subsidiary to the need for general deterrence. He referred to Bulfin[35] and, after extracting a passage from the judgement of Charles JA,[36] stated:
Much, though not all, of what was there said is apposite to your offending. In essence, others in positions of trust similar to yours must understand that their privileged position cannot be abused lest it result in significant punishment. Moreover, not only should that punishment deter, it should also serve to strongly denounce dishonesty of this kind.[37]
[35][1998] 4 VR 114.
[36]Ibid [131]–[132].
[37]DPP v Grimm [2024] VCC 1360, [89] (Judge O’Connell).
The judge went on to note that s 16A(1) of the Crimes Act1914 (Cth) stipulates that a court must impose a sentence that is of a severity appropriate in all of the circumstances of the case. He also cited s 17A which requires that a sentence of imprisonment cannot be imposed unless the court, after considering all of the available sentences open, is satisfied that no other sentences are appropriate.[38]
[38]Ibid [90].
The judge rejected the submission that the offending should be dealt with by way of a monetary penalty on the basis that the applicant’s offending was simply too serious. He expressly considered whether or not it might be possible to sentence the applicant to a term of imprisonment with immediate release upon a recognisance release order. Again, however, because of the findings he had made with respect to the nature and gravity of the offending and the high degree of moral culpability involved, he was not satisfied that such a sentence would adequately reflect the emphasis on general deterrence and denunciation required.[39]
[39]Ibid [92].
Ultimately, he formed the view that no other sentence other than a term of actual imprisonment was appropriate.[40]
Proposed ground one
(1) Applicant’s submissions
[40]Ibid [93].
The applicant submitted that the only person to have lost money as a result of the offences was the applicant and that his moral culpability ought to be assessed by reference to his motivation. The applicant highlighted his qualifications and experience and that the industries in which the money was invested (bitcoin, medicinal cannabis and non-bank lending) have subsequently seen significant growth. His submission was that he had a true belief that the investments would ‘succeed’.
The applicant also submitted that other factors established that the sentence was plainly manifestly excessive:
(a)the applicant is a first time offender of 56 years of age;
(b)the offending is out of character;
(c)the applicant has no subsequent convictions;
(d)the applicant has excellent prospects for rehabilitation;
(e)the applicant made full restitution to BT and PK and JW was fully compensated with the assistance of the Financial Ombudsman;
(f)the sums obtained were relatively modest and the offences themselves were not protracted;
(g)the plea of guilty carried significant utilitarian value given the potential complexity of a trial;
(h)there was significant delay;
(i)the authorities, save for the County Court sentence in DPP v Kawecki (‘Kawecki’),[41] involve criminality of a much higher order.
[41][2020] VCC 1751 (Judge Lauritsen) (‘Kawecki’).
In oral submissions, the applicant highlighted that in Kawecki, the judge imposed a fine, rather than a sentence of imprisonment.
(2) Respondent’s submissions
The respondent submitted that the sentence imposed was not manifestly excessive given the judge was entitled to assess as ‘high’ both the moral culpability and objective criminality of the applicant’s offending, which arose from a gross breach of trust. The offences involved six dishonest transactions over a period of seven months and had a net value of some $112,000, while the amounts were a substantial portion of the victims’ retirement savings.
The sentencing judge was also entitled to give particular emphasis to general deterrence and the need for adequate punishment in imposing the sentence. The respondent cited Braun, in which the New South Wales Court of Appeal emphasised that ‘[the] real bite of general deterrence, it has been observed, takes hold only when an actual custodial sentence is imposed’.[42]
[42]Braun (2008) 65 ACSR 519, 555 [85].
In relation to the applicant’s submission that he held a bona fide view that the investments would succeed, the respondent cited the observations of Spigelman CJ in Higgins v The Queen that:
[p]ersons who commit frauds and misappropriate moneys for various purposes often have the belief that they will rectify the situation before they are caught. That does not mean that this is a factor entitled to any substantial weight in the sentencing exercise.[43]
[43][2006] NSWCCA 38, [29].
The respondent highlighted that the applicant dishonestly failed to disclose or properly advise his victims about important aspects of the investment of assets held in their superannuation funds. This prevented the victims from making an informed decision about the investment of their retirement savings. The judge found that, if the applicant had acted honestly, the victims would not have made those investments. Thus, the only reasonable explanation is that the applicant was motivated by his own interests, because he would have otherwise provided proper disclosure.
It was also clear from the victim impact statements, as was accepted by the sentencing judge, that the impacts upon the three victims were profound. The consequences suffered by the victims were not addressed by the belated repayment of the funds. One victim was forced to sell her home, live insecurely, and endure a long battle with the Financial Ombudsman Service to access compensation.
The respondent also submitted that the credit extended to the plea was properly confined to its utilitarian value given it was not entered into early and was accompanied by little to no remorse. The effects of delay were also appropriately taken into account, especially in circumstances where the applicant himself contributed to that delay.
In oral submissions, counsel also referred to the fact that s 1041G(2)(b) included a requirement of conscious dishonesty and the applicant was thus sentenced on the basis that he was consciously dishonest.
In view of all of these circumstances, the respondent submitted that the sentence imposed on the applicant was not manifestly excessive. In fact, it was moderate having regard to the high moral culpability and criminality involved.
(3) Consideration
In Leimonitis v The Queen, Priest JA stated:
As has been observed more than once, manifest excess is a conclusion which does not depend upon the attribution of identified specific error. Moreover, it is a conclusion that ordinarily does not admit of much elaboration or sustained argument, since excess is, or is not, plainly apparent, and a sentence is, or is not, unreasonable or plainly unjust. The sentence may be excessive because the wrong type of sentence has been imposed, or because the sentence imposed is manifestly too long. A judge of an appellate court will approach the task of assessing whether a sentence is manifestly (as opposed to simply arguably) excessive in much the same way that a sentencing judge approaches the imposition of sentence at first instance; that is, by instinctively synthesising all relevant factors in order to determine whether he or she considers the impugned sentence to be just and appropriate. But it is not enough for appellate intervention to be warranted that the judges of the appellate court regard the impugned sentence as stern, or that they would not themselves have passed the same sentence. Intervention is justified only if the sentence is wholly outside the range of those open in the sound exercise of discretion.[44]
[44][2018] VSCA 198, [32].
First, it may be accepted that there were a number of factors which could be taken into account in favour of the applicant. However, the judge generally considered the relevant matters, including the applicant’s personal circumstances, the utilitarian value of the plea and the issue of delay. The applicant can point to no error in the way the judge weighed these various factors in circumstances where the judge’s reasons are careful and comprehensive.
We also reject the submission that the applicant’s moral culpability ought to be reduced because of his alleged belief that the investments would succeed. The judge found that if the victims could have made an informed choice there could be little doubt they would not have permitted the applicant to use their money in the way he did. In such circumstances, the applicant must be taken to have acted in his own interests.
Finally, there is limited utility in considering other cases which turn on their own unique circumstances. Kawecki was concerned with different offending wherein Mr Kawecki made dishonest statements so as to meet listing requirements. The sentencing judge found that the offending fell towards the lower end of offences contemplated by s 1041G of the Act.[45] By way of contrast, the judge correctly found that the objective criminality was high in this case.
[45]Kawecki [2020] VCC 1751 (Judge Lauritsen) [47]–[48].
Overall, then, the applicant’s submissions on this proposed ground are without substance. Having regard to the serious objective criminality and degree of moral culpability involved, there is simply no basis for the suggestion that the sentence was ‘wholly outside the range’. Rather, we consider it to be lenient.
Proposed ground two
(1) Applicant’s submissions
The applicant submitted that the sentencing judge’s reliance on Bulfin was inappropriate. The applicant highlighted that the applicant paid compensation, whereas the benefits received by Bulfin were substantial.
The applicant also criticised the sentencing judge’s statement that ‘much, though not all, of what was said in quoting Bulfin at [88] is apposite to your offending’, given the following distinguishing features:
(a)offences pursuant to s 1041G of the Corporations Act 2001 are few and far between, unlike the offence of ‘obtain financial advantage by deception’ or “make/use false document” which formed the bulk of Bulfin’s charges;
(b)the offences in Bulfin were described as ‘of leviathan proportions over a period of years’, with ‘repeated deliberate acts of dishonesty’ unlike the confined period and modest amounts in this case;
(c)the charges Bulfin pleaded guilty to involved a large number of individual deceptions on a number of different people.
(d)Bulfin received secret commissions in the millions;
(e)the victims in the present matter were financially ‘made whole again’.
Consideration
The frequently cited passage from Bulfin extracted by the sentencing judge was as follows:
The motivation to engage in conduct of the kind here under consideration may spring from many sources: the position of trust and the easy ability to abuse it; the enormous rewards that may be available; a position of high authority in some substantial enterprise and the offender’s assumption the discovery or proof of wrongdoing can be avoided; greed or the burden of funding an extravagant lifestyle; weakness in succumbing to outside pressures to use deceitful means for business ends; and personal or corporate ambition, to name but a few. Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money, and, frequently, losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. Detection is difficult, the investigation of the crime usually lengthy and very expensive, and the problems of trial and proof will frequently be extreme… The result of such considerations, in my view, is that the element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period; together with the requirement for strong denunciation by the sentencing court.[46]
[46][1998] 4 VR 114, 131–132 (Charles JA).
The judge did not suggest that all the factors cited in the above passage had application. Rather, he stated that ‘much, though not all’ of what was said was ‘apposite’ to the applicant’s offending. As highlighted by the respondent, this included that the applicant was in a position of trust, that there were repeated acts of dishonesty spanning more than seven months, that the offending impacted heavily on small investors given the monies represented their life savings, that the applicant’s position enabled him to disguise his offending, and that detection, investigation and trial issues all raised difficulties.
In these circumstances, although the actual facts in Bulfin may be distinguishable, the judge was correct to find that ‘much’ of what was said in the relevant passage was apposite. He certainly made no error in doing so. Moreover, even if the judge had somehow misapplied the passage, there is no reasonable prospect that we would have imposed a less severe sentence.[47]
[47]Criminal Procedure Act 2009 s 280.
Proposed ground 2 is also without merit.
Conclusion
The application for leave to appeal the conviction and sentence will be refused.
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