Judgment Suppressed
[2010] WASC 56
•18 MARCH 2010
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CRIMINAL
CITATION: THE STATE OF WESTERN AUSTRALIA -v- POLLOCK [2010] WASC 56
CORAM: EM HEENAN J
DELIVERED : 18 MARCH 2010
PUBLISHED : 23 MARCH 2010
FILE NO/S: INS 82 of 2008
BETWEEN: THE STATE OF WESTERN AUSTRALIA
Prosecution
AND
KEVIN TREVOR POLLOCK
Defence
Catchwords:
Sentencing after retrial - Significance of sentences imposed after first trial - Large scale commercial fraud - Need for deterrence - Lack of proof of eventual financial loss - Creditors' access to other securities to assist recovery
Legislation:
Criminal Code (WA), s 409
Bankruptcy Act 1966 (Cth), s 149, s 139
Sentencing Act 1995 (WA), s 6, s, 7, s 8, s 39, s 76
Result:
Three sentences of 5 years 4 months' imprisonment concurrent
Six sentences of 2 years' imprisonment, partially concurrent and partially cumulative
Aggregate head sentence of 5 years 4 months' imprisonment with eligibility for parole
Category: B
Representation:
Counsel:
Prosecution : Mr D G Staehli SC and Ms J E Edis
Defence: Mr M J McCusker QC and Mr A J Mason, and (on 18 March 2010) Ms C L Di Russo
Solicitors:
Prosecution : Director of Public Prosecutions (Cth)
Defence: Gadens Lawyers
Case(s) referred to in judgment(s):
ASIC v Vizard [2005] FCA 1037; (2005) 145 FCR 57
Cheung v The Queen [2001] HCA 67; (2001) 209 CLR 1
Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321
Hladin v The State of Western Australia [2005] WASCA 50; (2005) 156 A Crim R 176
Hull v The State of Western Australia [2005] WASCA 194; (2005) 156 A Crim R 414
Latham v The Queen [2000] WASCA 338; (2000) 117 A Crim R 74
Mason v The State of Western Australia [2005] WASCA 125; (2005) 30 WAR 205
McPharlin v The Queen (Unreported, WASCA, Library No 970665, 10 October 1997)
Pak v The Queen (Unreported, WASCA, Library No 950407, 11 August 1995)
R v Chen [1993] 2 VR 139; (1993) 66 A Crim R 154
R v Gilmore (1979) 1 A Crim R 416
R v Isaacs (1997) 41 NSWLR 374; (1997) 90 A Crim R 587
R v McKay [2007] NSWSC 275; (2007) 61 ACSR 470
R v Pisciuneri [2007] NSWCCA 265; (2007) 48 MVR 437
R v Rivkin [2004] NSWCCA 7; (2004) 59 NSWLR 284
R v Williams [2005] NSWSC 315; (2005) 152 A Crim R 548
RH McL v The Queen [2000] HCA 46; (2000) 203 CLR 452
Skipworth v The State of Western Australia [2008] WASCA 64
Stickland v The State of Western Australia [2005] WASCA 115
The Queen v Kite (Unreported, WASCA, Library No 950659, 1 December 1995)
The Queen v Sivandran (Unreported, WASCA, Library No 960154, 22 March 1996)
The State of Western Australia v BLM [2009] WASCA 88; (2009) 256 ALR 129
The State of Western Australia v JWRL [No 4] [2009] WASC 392
The State of Western Australia v Pollock [2009] WASCA 96
Turner v The Queen [2002] WASCA 189
Universal Permanent Building Society v Cooke [1952] Ch 95, [1951] 2 All ER 893
Williams v The Queen (No 2) [1982] WAR 281; (1982) 5 A Crim R 81
EM HEENAN J: After a trial lasting 11 days before a jury, Mr Kevin Trevor Pollock was convicted of nine charges of fraud contrary to s 409(1)(d) of the Criminal Code and remanded for sentence. Submissions on issues relating to the sentences to be imposed were heard on 18 February 2010 and again on 18 March 2010 when supplementary evidence was adduced. It is now necessary to pass sentence for each of these offences. These convictions result from a retrial of Mr Pollock on each of the nine charges. He had earlier been tried, upon a different indictment but for the same charges, before McKechnie J and a jury in the Supreme Court at Perth between 13 and 31 October 2008. At the conclusion of that trial he was convicted on all of those nine charges but appealed from those convictions to the Court of Appeal which, on 3 June 2009, allowed the appeal, quashed the convictions and ordered a retrial ‑ The State of Western Australia v Pollock [2009] WASCA 96 per Martin CJ, Wheeler and Miller JJA.
This retrial has, in a number of respects, been different to the first trial. Not all the witnesses who gave evidence at the first trial gave evidence at the retrial. Some witnesses who gave evidence at the retrial did not give evidence at the first trial. At the retrial Mr Pollock himself did not give evidence although he had given evidence at the first trial. Part of his evidence at the first trial, both in examination‑in‑chief and cross‑examination, was tendered in evidence at the retrial on the basis that it constituted admissions against interest. The same charges were advanced at the retrial and were determined by verdicts of guilty reached unanimously by the jury.
Following the first trial, but on 4 November 2008, McKechnie J sentenced Pollock to 3 years 4 months' imprisonment on each of counts 1 to 3 (the same as those numbered 1 ‑ 3 on the current indictment) but suspended those sentences for 2 years. On the remaining counts, numbered 8, 13, 14, 15, 16 and 17 in the first indictment (counts 4 ‑ 9 inclusive in the present indictment) his Honour imposed a fine in a total amount of $60,000. It has been submitted on behalf of Mr Pollock that no greater or more severe sentences should be imposed for the present convictions than were imposed after the first trial. However, counsel for the prosecution submits that these convictions deserve and require more severe sentences and that the sentences imposed after the first trial were manifestly inadequate. The prosecution points out that the State appealed to the Court of Appeal against the alleged inadequacy of the sentences imposed after the first trial but that, because it quashed the convictions, the Court of Appeal did not deal with the State's appeal against sentences and that, in all the circumstances, different and more severe sentences should now be imposed. This requires an examination of the authorities and principles relating to sentencing after a retrial where a sentence had been imposed after the first trial. Those questions are dealt with more fully later in these reasons.
The convictions
Mr Pollock has been convicted, following verdicts of the jury, of the following nine offences:
(1)between 25 August 1999 and 31 August 1999 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $405,000 paid by that bank in respect of a hire purchase agreement entered into between that bank and Westgroup Pty Ltd contrary to s 409(1)(d) of the Criminal Code;
(2)between 25 August 1999 and 31 August 1999 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $405,000 paid by that bank in respect of a hire purchase agreement entered into between that bank and Westgroup Pty Ltd contrary to s 409(1)(d) of the Criminal Code;
(3)between 25 August 1999 and 31 August 1999 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $405,000 paid by that bank in respect of a hire purchase agreement entered into between that bank and Westgroup Pty Ltd contrary to s 409(1)(d) of the Criminal Code;
(4)between 22 September 2000 and 26 September 2000 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $302,500 paid by that bank in respect of a hire purchase agreement entered into between that bank and MM Developments Pty Ltd contrary to s 409(1)(d) of the Criminal Code;
(5)between 13 February 2001 and 16 February 2001 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $198,000 paid by that bank in respect of a hire purchase agreement entered into between that bank and All Terrain Aust Pty Ltd contrary to s 409(1)(d) of the Criminal Code;
(6)between 13 February 2001 and 16 February 2001 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $198,000 paid by that bank in respect of a hire purchase agreement entered into between that bank and All Terrain Aust Pty Ltd contrary to s 409(1)(d) of the Criminal Code;
(7)between 14 May 2001 and 17 May 2001 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $478,500 paid by that bank in respect of two hire purchase agreements entered into between that bank and Westgroup Pty Ltd contrary to s 409(1)(d) of the Criminal Code;
(8)between 4 June 2001 and 7 June 2001 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $176,000 paid by that bank in respect of a hire purchase agreement entered into between that bank and Westgroup Pty Ltd contrary to s 409(1)(d) of the Criminal Code; and
(9)between 25 June 2001 and 27 June 2001 he, with intent to defraud, by fraudulent means, caused a detriment to National Australia Bank Ltd ('that bank'), namely $434,500 paid by that bank in respect of three hire purchase agreements entered into between that bank and MM Developments Pty Ltd contrary to s 409(1)(d) of the Criminal Code.
The Pollock Group
From before August 1999 until March 2003 Mr Pollock was effectively the managing director of a group of companies collectively referred to as the 'Pollock Group' which included all the companies referred to in the charges, namely Westgroup Pty Ltd, MM Developments Pty Ltd, All Terrain Aust Pty Ltd and several others. Through the various corporate members of this group, a number of businesses were carried on upon a large scale. Companies in the group undertook earthmoving and clearing operations with heavy machinery; other companies conducted recycling, soil processing, concrete crushing and other recycling of discarded building products, material emerging from demolitions and like sources; associated companies gathered and treated soils with various nutrients for supply to a variety of horticultural and gardening purposes; other companies supplied and maintained heavy haulage, excavation and crushing equipment for the mining and exploration industries; and still other companies in the group undertook the acquisition of used machinery for maintenance, refurbishment, resale or hire. It was a very large combined series of operations and a common feature of the business was that most, if not all, of the companies in the group needed and used heavy machinery, bulldozers, crushers, loaders and comparable equipment.
The group of companies conducted the business from various sites. There was a head office with associated facilities in Welshpool Road, Kewdale. There were sites at which soil mixing, recycling of building materials, crushing of concrete and steel reclamation were carried out in Hazelmere ‑ two sites in Talbot Road were used for this purpose. There was also a large machinery maintenance workshop, also located in the metropolitan area, with a staff of 60 or 70 employed men managed by Mr Gregory Mellor, who was a witness in the case.
For these operations the Pollock Group needed large quantities and varieties of heavy machinery of many different types. These were either purchased outright, acquired on hire purchase or on commercial finance by lease from a bank or lending institution, which in turn had purchased the machinery from a machinery supplier, or on lease or rent. There were hundreds of different items of machinery in use by the several companies in the group.
Although the operations of the Pollock Group were large, diverse and on a major scale, the control of the operations was centralised in the Welshpool Road office from where Mr Kevin Trevor Pollock presided over the operations as the chief executive and manager. He was assisted by his son, Mr Jamie Kevin Pollock, and by two of his brothers, Mr Noel John Pollock and Mr Wayne Peter Pollock, who were directors of some of the companies but whose roles were largely, if not entirely, confined to operative or supervisory roles in the field. Significantly, Mr Noel John Pollock, followed by his brother, Mr Wayne Peter Pollock, had been in charge of operations at the Hazelmere recycling sites in Talbot Road from 1999 to 2003 in succession while other members of the Pollock family were, to some degree, involved in administrative and management activities of the group.
All major decisions, and especially all major financial transactions, were referred to and decided upon by Mr Kevin Pollock. It is the case, and it follows from the verdicts of the jury, that he was directly and knowingly concerned in each of the transactions which are the subject of the several convictions.
To conduct business on this scale the Pollock Group needed a variety of forms of financial accommodation. It banked chiefly with the National Australia Bank Ltd (NAB) and it dealt principally with the Kewdale banking centre. It was a very prominent and major customer of the bank and was well‑known to the various banking officers at Kewdale from time to time. For much of the material period Mr Pollock dealt with Mr Viv Jenaway, who was an assistant manager of the Kewdale branch seconded to the management of the Pollock Group affairs. The full extent of the financial accommodation and services provided by NAB to the Pollock Group did not emerge in the evidence but it is clear that large scale financial accommodation was made available in the shape of loans to the various companies in the group secured by interconnecting charges in the form of debentures, mortgages and other securities. Individual financial accommodation for the acquisition of machinery was the subject of hire purchase agreements with one or other of the individual companies and, often, guaranteed by one or more of the Pollock brothers personally or by associated companies. It seems that all the assets of the group companies were subject to floating charges granted to the bank.
The Pollock Group continued to trade on this large scale until March 2003 when, because of an event of default, NAB appointed joint receivers to all the companies in the group under the provisions of various security documents. The receivers closed down the operations of the companies and proceeded, over a period of months, to try and identify, take possession of and realise all the assets of the companies to satisfy the indebtedness. This involved the identification and collection of a large number of items of different machinery from many different locations and the eventual sale of the various items by auction or tender. In some cases, other financiers had an interest in some of the machinery under hire purchase agreements or other securities and the receivership necessarily had to accommodate third party interests or securities arising in those ways. Most of the machinery was auctioned in or about September 2003. According to the receiver's reports there was an amount of $10.35 million owing to NAB at the date of appointment of the receivers on 27 March 2003 and by 26 September 2009 that had been reduced to $565,116. During the receivership the receivers had received and paid out slightly more than $10.73 million. Some of the group companies were then placed into liquidation.
Although the detail is not material, it seems to be accepted that some of the companies in the Pollock Group were discharged from the receivership to the original management and that one or more members of the Pollock family or associated interests reacquired control.
Nothing turns on this. It is also the case that NAB called upon guarantees by individual members of the Pollock companies for various liabilities, where sales under the securities or repossession and sale of the equipment had not fully satisfied the outstanding liabilities. Some payments were made under these guarantees and a lump sum or sums were eventually paid to secure their discharge. Two such payments can be mentioned specifically. In October 2006 $1,250,000 was paid to NAB to secure the release of Mr Jamie Pollock from guarantees and indemnities given by him for the debts of Westgroup to NAB. However, Mr Jamie Pollock had not personally guaranteed any of the three HPAs Westgroup had entered into with NAB in respect of the three Samsung loaders the subject of counts 1 ‑ 3. On the same date a further sum of $1,250,000 was paid to NAB to secure the release of Mr D B Green from guarantees and indemnities given by him to NAB for the debts of All Terrain Aust Pty Ltd. The liabilities of Westgroup to NAB included liabilities under the HPAs in respect of counts 1 to 3 and counts 7 to 8, and the liabilities of All Terrain Aust Pty Ltd included those under the HPAs in respect of counts 5 and 6. All these payments went quite some way to satisfying the liabilities of the bank but exactly how much of the liabilities were discharged and what remained outstanding has not emerged and need not be pursued.
Bankruptcy
As a result of the collapse of the group and his own personal liabilities, Mr Pollock was made bankrupt on 13 September 2003. His bankruptcy was on the petition of the Australian Taxation Office (ATO). Proofs of the debts lodged by the ATO and NAB assert debts owing totalling more than $27.54 million but these have not yet been admitted to proof by the trustee and there is the prospect that they do not yet take into account off-sets and other recoveries.
Although more than six years has now elapsed since his bankruptcy, he has not been discharged from bankruptcy. He has been assessed by the bankruptcy trustee as liable to pay part of his income from post‑bankruptcy exertions to his trustee for the benefit of his creditors. It is apparent that Mr Pollock enjoys a substantial earning capacity and the income which he presently derives is in the order of about $150,000 per annum. As yet no contribution of income has been made by the bankrupt to his bankrupt estate.
A sequestration order was made against Mr Pollock in the bankruptcy jurisdiction and a registered private trustee, Mr G F Totterdell was appointed his trustee in bankruptcy. Evidence submitted by counsel for the prosecution includes a letter from the trustee in bankruptcy dated 9 March 2010 which discloses that Mr Pollock's bankrupt estate was the subject of an objection pursuant to Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) s 149B to automatic statutory discharge after three years lodged with the official receiver in bankruptcy on 6 March 2009. The grounds for the objection were:
(a)pursuant to s 149D(e), the failure of the bankrupt to disclose income or expected income to the Trustee as required by the Bankruptcy Act;
(b)pursuant to s 149D(f), the failure of the bankrupt to pay to the Trustee an amount of assessed income contributions which the bankrupt was liable to pay pursuant to s 139ZG of the Bankruptcy Act; and
(c)the failure of the bankrupt to set up a 'supervised account' for the purpose of depositing income as required by the Trustee pursuant to s 139AIE of the Bankruptcy Act.
As a consequence of that objection, Mr Pollock is not eligible for discharge from bankruptcy until 24 April 2016 unless the objection by the Trustee is removed.
These facts should not, in my view, be regarded as circumstances of aggravation of any kind for the purposes of the present sentencing but the events do show that Mr Pollock has not in the recent past fully recognised his responsibilities and has acted in a way which may potentially prejudice the interests of his former creditors. This has occurred in a situation where, since his bankruptcy, he has been in the position where he has been able to earn, and has earned, substantial amounts of income. The present position is that he informed the officer preparing the pre-sentence report that he currently earns about $150,000 per annum in fees as an earthworks consultant and it seems that, at present, some of that income should be paid to the trustee in bankruptcy, under arrangements in accordance with Div 4B of the Bankruptcy Act. Obviously, for a bankrupt with such considerable present earning capacity it is a matter of importance that he should comply with the provisions of the Bankruptcy Actin disclosing income, or expected income, and in paying the assessed amount of income contributions to the Trustee. That Mr Pollock has been the subject of objection to an earlier discharge from his bankruptcy on these grounds is a more recent indication that he is not a person prepared fully to recognise and observe his financial obligations.
Determination of facts for the purposes of sentencing
The proper approach to the determination of facts for the purpose of imposing sentence after convictions following verdicts of a jury is well established. I recently collected some of the authorities in The State of Western Australia v JWRL [No 4] [2009] WASC 392. They include R v Isaacs (1997) 41 NSWLR 374, 377 ‑ 378; (1997) 90 A Crim R 587, Cheung v The Queen [2001] HCA 67; (2001) 209 CLR 1 [14]; R v Pisciuneri [2007] NSWCCA 265 [57]; (2007) 48 MVR 437 and Mason v The State of Western Australia [2005] WASCA 125 [3]; (2005) 30 WAR 205. These establish the following principles, namely:
(1)where, following a trial by jury, a person has been convicted of a criminal offence, the power and responsibility of determining the punishment to be inflicted upon the offender rests with the Judge, and not with the jury…;
(2)subject to certain constraints, it is the duty of the Judge to determine the facts relevant to sentencing. Some of these facts will have emerged in the evidence at the trial; others may only emerge in the course of the sentencing proceedings…;
(3)the primary constraint upon the power and duty of decision‑making referred to above is that the view of the facts adopted by the Judge for the purposes of sentencing must be consistent with the verdicts of the jury;
(4)a second constraint is that findings of fact made against an offender by a sentencing Judge must be arrived at beyond reasonable doubt;
(5)there is no general requirement that a sentencing Judge must sentence an offender upon the basis of the view of the facts, consistent with the verdict, which is most favourable to the offender… however, the practical effect of (4) above, in a given case, may be that, because the Judge is required to resolve any reasonable doubt in favour of the accused, then the Judge will be obliged, for that reason, to sentence upon a view of the facts which is most favourable to the offender.
This is the approach which I adopt in undertaking the determination of the facts upon which Mr Pollock must now be sentenced.
The offences and the transactions
The charges and convictions can be subdivided into two main groups. Charges 1 to 3 can be referred to as the IMAP offences, or the Samsung front‑end loader offences. Charges 4 to 9 may be called the Curran Invoice Charges. All nine convictions relate to hire purchase transactions entered into between NAB and one or other of the Pollock Group companies at the request and direction of Mr Pollock.
The three IMAP transactions
On 31 August 1999 one of the companies in the Pollock group, Westgroup Pty Ltd entered into three separate hire purchases agreements with NAB to hire three new 1999 Samsung front-end loaders (serial number QBY0087, engine number 11878677; serial number QBY0088, engine number 11878691 and serial number QBY0089, engine number 11878695). The cash purchase price for each of the three machines was $405,000 but with finance term charges the total liability under each hire purchase agreement was $487,118.24, payable by 48 monthly instalments of $9,731.63. Each of the three hire purchase agreements was guaranteed by Mr Noel John Pollock.
Each of these three hire purchase agreements was in respect of a designated front-end loader specified in an invoice, or proposed contract of sale, from a machinery supplier known as IMAP (Imported Machinery and Parts) of 3 Midland Road, Hazelmere, dated 31 August 1999. Each invoice specified that the machinery to be sold to NAB was for delivery to Westgroup Pty Ltd and identified the Samsung front-end loader by make, model (SL330 front-end loader), serial number, engine number and year of manufacture - 1999.
At the material time IMAP was, indeed, a firm engaged in the sale and importation into Western Australia of heavy machinery for resale. It was controlled by Mr Geoffrey Stevenson, since deceased. New Samsung front-end loaders of this type were, at that time, manufactured by the Samsung company, in Korea, and from there sold or distributed in that country and elsewhere throughout the world. Companies in the Pollock group had, indeed, purchased five other Samsung SL330 loaders earlier in 1999 through a different Western Australian machinery dealer - Filmarc Australia Pty Ltd trading as CFC Equipment - a company operated by a Mr Cardaci.
The three invoices for the three new Samsung SL330 front-end loaders said to be available for sale via IMAP were duly submitted to the NAB office at Kewdale in order for the bank to purchase the three machines and then let them on hire purchase to Westgroup Pty Ltd. The documentation was duly completed, the three hire purchase agreements executed on behalf of Westgroup Pty Ltd by Mr Noel John Pollock and by him as guarantor. The money, for the purchase of the machines by the bank ($405,000 x 3 = $1,215,000) was paid out by the bank. There was no evidence that Mr Kevin Pollock saw the three IMAP invoices, submitted them to the bank or signed or saw any of the three resulting hire purchase agreements. Nevertheless, the evidence established, and I am satisfied, that these three transactions were organised with his knowledge and approval and that it was his decision to have the IMAP invoices submitted to NAB, as evidence of the availability of the machinery for sale and in support of the proposal that the bank should acquire the machinery and then let it on hire purchase to Westgroup. The involvement of Mr Noel John Pollock in signing the agreements was no more than implementation of the decisions which had been made in this respect by his brother, Mr Kevin Pollock.
Once the three hire purchase agreements had been executed and the money from NAB became available, a single warrant was issued by the NAB office at Kewdale to forward the $1,215,000 to the credit of a Commonwealth Bank account in the name of Soil and Garden Suppliers Pty Ltd (another Pollock company). The NAB warrant for $1,215,000 was credited to that account on 31 August 1999 and by a series of cheques debited to that account from 31 August to 3 September 1999 almost all of the moneys were paid out to various creditors of Soil and Garden Suppliers Pty Ltd or other creditors of the members of the Pollock Group and to Westgroup Pty Ltd. The largest single payment of $581,399.40 was paid to the NAB account at Kewdale to a manager's suspense account (cheque number 2818).
The NAB warrant for the payment of the $1,215,000 from the Kewdale branch to Soil and Garden Suppliers Pty Ltd was authorised by Mr Jenaway and I am satisfied that the subsequent payment of part of that money, namely the cheque for $581,399.40 to the Kewdale manager's suspense account must also have been known to Mr Jenaway. Because of his untimely death there is no evidence to establish why the bank authorised the distribution of the purchase moneys for the three front-end loaders in this way rather than pay the money to the vendor of the machinery, IMAP, or at its direction as one would ordinarily have expected to have occurred. One of the witnesses on the staff of the Kewdale branch of NAB at the time said that it was the standard policy of the bank to make payment for the purchase price of goods acquired by the bank which were to become the subject of a hire purchase agreement between the bank and one of its customers, direct to the supplier of the goods in question - in the case of these three loaders, that would be to IMAP. Other witnesses from the bank said that they had never known there to be instances where proceeds financed by the bank on hire purchase had not been paid direct to the supplier of the goods. However, the first bank witness, an experienced assistant Ms Stephanie Regan, said that she was aware that on some occasions Mr Jenaway authorised the bank to make payments to some person or corporation other than the supplier of the goods and had queried Mr Jenaway about that being told, in response that, in those cases, the goods had already been paid for. Whether in fact that was true or whether that was information which had been given to Mr Jenaway which he accepted as being true could not, in this case, be established. However, there was no evidence of any payment of $1,215,000 or any sum or sums which might be recognisable as parts of such payments ever being made by a Pollock company, or any other entity, to IMAP in respect of these three transactions.
None of the three Samsung front-end loaders was ever seen or inspected on behalf of NAB. The evidence on behalf of Mr Pollock and from his two brothers was that the three new, or near new, Samsung front-end loaders were delivered to the Talbot Road site at Hazelmere in the latter half of 1999 and, thereafter, were used continuously in the heavy operations conducted at that site before being retired and, presumably, disposed of when they were no longer economically fit for that after about three years or so. This evidence meant that the machines were removed from regular daily use before the end of the four year period of each hire purchase agreement but there was no evidence that the machines had been surrendered to the bank, or that the hire purchase agreements had been paid out or otherwise completed.
The financial position was that apparently regular hire purchase agreement instalment payments were made by or on behalf of Westgroup Pty Ltd to NAB from September 1999 onwards. These continued until mid‑2001, well before NAB appointed receivers to the Pollock Group.
Officers or agents of the receivers then set about identifying and taking possession of all the Pollock Group assets including the vast inventory of heavy machinery. This process took several months but these three front-end loaders were never found nor any trace of them discovered. Other front-end loaders which had been acquired for or on behalf of the Pollock Group through CFC Equipment were located; that is the five other Samsung SL330 loaders (see exhibit 34) and these were sold or disposed of under the supervision of the receivers.
Much, but not all, of the Pollock Group heavy machinery was, from time to time, serviced or repaired by the Pollock Group workshop staff under the supervision of the workshop manager, Mr Gregory Mellor. Mr Mellor designed an elaborate system to identify and number all the various items of machinery, plant or equipment which he or his staff ever worked on, whether at the workshop or on other sites so that the cost of labour, parts and fuel could be recorded and allocated appropriately. He had assembled a comprehensive list of all such machinery running to some 20 pages (exhibit 5) but there is no record of any of these three IMAP Samsung SL330 front-end loaders ever being serviced, repaired, fuelled or tabulated by Mr Mellor or his staff. That, in itself is not conclusive because Mr Mellor made it clear that he or his staff did not attend to every piece of machinery owned or operated by companies in the Pollock Group and that at some sites fuelling, maintenance and servicing was done either through other workshops or by the men at the particular site. Mr Pollock's brothers maintained in their evidence that the three IMAP front-end loaders at the Talbot Road site had always been fuelled and maintained in the small machinery workshop at that location by the men working at Talbot Road and that there was never any occasion for Mr Mellor or his staff to be involved in their servicing or repairs.
After the receivership and when it became apparent that these three Samsung front-end loaders could not be found, further inquiries were conducted by ASIC about their source and supply. This led to direct enquiries being made of the Samsung manufacturer in Korea, then a subsidiary of the Volvo Group of Companies. A representative of Samsung/Volvo from Korea, Mr Yeo Kwon Yoon, gave evidence by videolink from Korea that three Samsung SL330 front‑end loaders with serial numbers matching those set out in the three IMAP invoices had in fact been manufactured in Korea in mid 1999 but that each of those three machines had been sold and delivered to a Korean company and had not been exported from that country. Mr Yoon produced Samsung documents to confirm that each of these three particular machines had later in 2000 been brought into the Samsung Korean factory for servicing which had been recorded on the company's records. Mr Yoon's evidence was that the only Samsung front-end loaders which had been exported from the manufacturer in Korea to Australia were three machines which were identified as having the same serial numbers as three of the earlier Samsung front-end loaders purchased by the Pollock Group from Mr Cardaci's company, CFC Equipment, in 1999. Perhaps not insignificantly, those three serial numbers were in a numerical sequence immediately preceding the serial numbers shown on the three IMAP invoices.
Mr Yoon's evidence was not disputed and the trial proceeded on the basis that the three machines with the serial numbers shown in the IMAP invoices had never been imported into Western Australia from Korea but at all material times remained in Korea. As for the engine numbers shown on the IMAP invoices, these did not correspond with the engine numbers on the three machines known to have been manufactured in Korea and which remained there. The appearances were, and I am satisfied that it is the case, that whoever prepared the IMAP invoices attempted to make an informed guess of the engine numbers likely to apply to those three machines, and in doing so, had some knowledge of Samsung front-end loader engine numbers sufficient to make the number chosen plausible and to be accepted by the casual reader in the absence of actual inspection and verification of the engine number on the machine.
This trial, therefore, proceeded on the basis that the information in the three IMAP invoices, insofar as it applied to the serial numbers and engine numbers listed for each of these machines must have been erroneous, that is, was false. However, the case for Mr Pollock was that neither he nor any of his staff had ever inspected or recorded the serial numbers or engine numbers of the three machines which did arrive and that there was simply no occasion for that ever to be done. The defence case was that the machines were delivered, ostensibly having been supplied by IMAP, and that they were new or near new SL330s which were afterwards used without question at the Hazelmere site.
Evidence was adduced on behalf of Mr Pollock, by cross‑examination of Mr Mellor and Mr Cardaci that, because of depressed economic conditions in Asia in the late 1990s, there was a glut of machinery for sale in Indonesia and elsewhere and that enterprising machinery dealers, like Mr Geoffrey Stevenson, travelled to Indonesia to avail of this opportunity, to buy up such machinery and to bring it to Australia for resale. The suggestion was that Mr Stevenson must, therefore, have acquired the three Samsung front-end loaders from Indonesia, arranged for their importation into Australia, and for their sale, in new or near new condition, to Westgroup Pty Ltd via the hire purchase agreement arrangements made with NAB. Part of this case was that, if this occurred, it occurred entirely without the knowledge of Mr Pollock, who always believed that the three machines which did arrive, and which were subsequently used at the Talbot Road site as described, matched the descriptions in the IMAP invoices and had been imported from Korea.
One problem with this approach was that Mr Yeo Kwon Yoon, the Samsung factory officer from Korea, whose evidence was not challenged in this respect, said that apart from the three Samsung SL330s which had been exported from Korea to Australia and sold via Mr Cardaci's firm to the Pollock Group earlier in 1999 the only other Samsung SL330 front-end loader manufactured in Korea at about that time, which was exported from that country, had been exported to Puerto Rico.
A critical issue of fact which the prosecution had to establish to the satisfaction of the jury before any conviction could be recorded in relation to each of the IMAP charges was that no Samsung SL330 front-end loaders in fact were imported to Western Australia or were delivered to any of the Pollock Group operations in 1999 as claimed. If that were to be established, to the criminal standard of proof, it would follow that Mr Pollock's explanation of how these invoices came to be submitted to the bank and the bank entered into the three hire purchase agreements and then paid out $1,215,000 would have been caused by Mr Pollock, with intent to defraud, and by fraudulent means, causing a detriment to NAB by causing it to pay out $405,000 in respect of each agreement. The fraudulent means was the submission of the false invoice to the bank for the purpose of inducing the bank to enter into the hire purchase agreement, the detriment caused to the bank was the action of the bank paying out the $405,000 X 3 - $1,215,000 in the belief that the invoices were genuine; that this was done and caused by Mr Kevin Pollock would be established by his knowledge of the transaction and his authorisation of the company to enter into each of the hire purchase agreements, for the company to receive the proceeds from the bank and to distribute them as they were distributed. That this was done with an intent to defraud is to be inferred from Pollock's alleged knowledge that the machines did not exist, and that money was being obtained from the bank under the guise of the hire purchase agreements which was not paid to any vendor of the machinery but which was distributed to the use or advantage of the Pollock group of companies.
Those were the issues which the jury were called upon to decide and, by their verdicts on counts 1 to 3, the jury was obviously satisfied, beyond reasonable doubt, that the three particular Samsung SL330 front-end loaders had never been imported to Western Australia, were not available for sale by IMAP, that the IMAP invoices were false, that Mr Kevin Pollock knew that no such machines were being delivered or would be delivered to Westgroup or to any of the Pollock group of companies and that the bank was being induced to act in the belief that the IMAP invoices were genuine when, in fact, they were false.
I consider that the evidence clearly establishes beyond reasonable doubt all of those matters and that no such Samsung front-end loaders, whether matching the descriptions contained in the IMAP invoices, or constituting three other machines which might be taken as resembling those descriptions, were every imported into Western Australia or delivered to Westgroup or to any of the Pollock Group of companies.
As already observed, the case for Mr Pollock at the trial was that three such machines, or three machines which closely resembled the description in the IMAP invoices, had in fact been delivered to the Talbot Road site and were used there regularly until sometime in late 2002 or early 2003 when they were discarded because they were no longer of economic use. In the course of the trial much reliance was placed on behalf of the defence upon a series of photographs (Exhibits 8A, 8B, 8C and 8D) of a front-end loader identified as being a Samsung SL330 which was said to have been taken while that machine was actually in use at the Talbot Road site. The source of that photograph, when, where and by whom it was taken was never established. However, both Mr Pollock's brothers said that the background in the photograph was the background of the Talbot Road site and that this was one of the three machines which had arrived there in late 1999. The machine depicted in this photograph bore no identification number or manufacturer's or supplier's markings, which led Mr Cardaci to observe that he did not think that it could have been one of the five Samsung SL330s which CFC Equipment had previously sold to the Pollock Group. Mr Mellor pointed out features of the photograph which, to him, indicated that this particular machine had never been serviced, fuelled or repaired by him or by his staff.
It was the prosecution case that this particular photograph had no provenance and, therefore, no credibility and that it could be of any Samsung SL330 front-end loader at any site at any time. For the prosecution case to succeed it was necessary that the jury be satisfied, beyond reasonable doubt, that this photograph could not have been of one of the three Samsung SL330s deriving from the IMAP invoices said to have been delivered to the Talbot Road site in the latter part of 1999. By their verdicts the jury was obviously satisfied that the machine shown in the exhibits 8A to 8D was not one of the IMAP invoice machines nor one of any of the three machines said to have been acquired via IMAP by NAB or subject of any of the three hire purchase agreements in August 1999. This means that the jury must have been satisfied, beyond reasonable doubt, that the evidence of Messrs Noel John Pollock, Wayne Peter Pollock and the transcript of the earlier evidence of the accused, Mr Kevin Pollock (exhibit 38), asserting the existence of such machines at the Talbot Road site was not true and that the prosecution case had established, beyond reasonable doubt, that no such machines had ever been imported into Western Australia, supplied by IMAP or delivered to the Talbot Road site. That finding was one which the jury was specifically invited to make by the prosecution and is one which I also consider is supported by the evidence and on the criminal standard of proof.
In the end, therefore, the practical effect of these three hire purchase agreements which NAB entered into with Westgroup Pty Ltd on the faith of the IMAP invoices was that the bank paid out $1,215,000 without ever obtaining ownership of the goods which were to be the subject of the hire purchase agreements and, which was, therefore, unsecured. The jury's verdicts also establish, and I am satisfied, that the bank would not have paid out those moneys when it did had the true position about the absence of the front-end loaders been disclosed. Nevertheless, the bank did get a contractual commitment from Westgroup Pty Ltd, guaranteed by Mr Noel John Pollock to pay 40 monthly instalments in the designated amounts which, if fully discharged, would repay the bank for the moneys financed together with agreed service charges by way of a financial return on the transaction. Under the agreements, monthly payments of instalments were made fairly regularly until about June 2001. After that the payments ceased, no moneys were recovered by the bank and, because the machines never existed and could not be realised, there was nothing for the bank or the receivers to sell to defray outstanding liabilities to the bank.
The evidence led on the sentencing submissions by the prosecution established that the 'shortfall' to the bank under each of the three hire purchase agreements was, respectively $262,716.04, $262,692.58 and $262,720.31 making a total of $788,129.93. However, counsel for Mr Pollock submits that this should not be accepted as a measure, or even as an indication, of losses suffered by the bank. According to the submission this is because guarantors were called upon to make payments pursuant to their guarantees, relating to these and other transactions.
In addition, counsel for Mr Pollock submits that NAB had additional securities in the way of debentures creating floating charges over all the assets in all the Pollock Group of companies to secure advances by the bank to all or any of the companies in the group. There were also mortgages of land to the NAB for the same purpose. This system of cross‑charges resulted, so the submission advanced for Mr Pollock goes, in the bank being a secured creditor in respect of all assets of companies in the Pollock Group, involving many other assets beyond those intended to be the subject of these three hire purchase agreements, with the result that the bank had access to these additional securities to satisfy, or to contribute to the satisfaction of, these liabilities. The submission is that such is the complexity of the receivership of the Pollock Group, the realisation by NAB of its various charges and to subsequent liquidations of certain of the Pollock Group companies that it is almost impossible to ascertain whether, in the end, the NAB actually suffered any loss as a result of these three frauds.
I accept that any mathematical dissection of the practical monetary effect of these three frauds on NAB is almost impossible to achieve in the light of the evidence adduced in this case. It might, theoretically, be possible to ascertain with reasonable reliability the extent or existence of any alleged loss due to these HPAs but that would require a financial investigation well beyond the scope of this trial or sentencing exercise and even then, the attempt might prove inconclusive. There is evidence, however, that even after resort to other securities and sources of recovery, NAB has experienced a shortfall of some $743,249 in recovering debts due by Westgroup and a much greater shortfall of debts due to NAB from the larger Pollock group of companies.
However, for reasons which will appear I do not consider that these difficulties in ascertaining whether NAB actually did make a loss as a result of these three frauds and, if so the actual extent of the loss, bear very significantly on the task which I must discharge in imposing sentence. The fact of the matter is that these are serious frauds, that the amounts of money involved are large, and that the bank was placed in a situation of jeopardy which it would not have experienced had Mr Pollock dealt with it honestly in these transactions.
Whichever way one looks at the transactions, it is clear that Westgroup Pty Ltd received financial accommodation from NAB to the extent of $1,215,000 which was only granted because the bank believed that it would be purchasing and then letting on hire purchase identifiable machinery which had an intrinsic value which would provide some security for the moneys financed. In fact there was no such security and what the bank was, in essence, lured into doing was to grant an unsecured loan for $1,215,000, the proceeds of which were immediately paid away by other companies in the Pollock Group for operating expenses or other liabilities.
In return NAB received an income stream in the form of monthly instalments which only lasted until mid‑2001. Because none of these three machines existed and there was no security for these loans it meant that even though the bank had floating securities over all the Pollock Group assets, for all the various financial accommodations provided by the bank, there were fewer assets to support that aggregate accommodation in the event of a default and the necessity for the bank to realise the securities. Even if the bank did, by reason of its other securities and the obligations of the guarantors, succeed in recovering all the moneys outstanding it remained in a situation of jeopardy and doubt until that was eventually achieved ‑ if it ever was. Even if it were, it would mean that more of the assets of the companies in the Pollock Group would have been realised to satisfy the bank's secured liabilities than would have been the case had these three machines been available for seizure and resale. The consequence of that is that the secured creditors, including the bank, would have absorbed more of the assets of the companies to satisfy their own entitlements than would otherwise have been the case so that the cost of the absence of the front-end loaders as security would fall upon unsecured creditors of the group. There has been no attempt made to identify who the unsecured creditors are or what the extent of exposure to unsecured creditors was but, even if the submissions for Mr Pollock could be made out, it must mean that the loss would have fallen upon the unsecured creditors.
In a company group collapse of this magnitude it is somewhat artificial to attempt to isolate and measure the loss or losses resulting from the absence of certain particular securities, namely three Samsung front-end loaders, but that does not mean that no loss exists. What is important is that these frauds resulted in NAB acting to its detriment and advancing large sums of money which were applied, at the direct knowledge of Mr Pollock, for purposes not disclosed or contemplated by the bank. In my view, each of these is a serious fraud and its implementation shows planning, attempts at subtlety and deception, and a degree of deliberation and dishonesty which are all very serious. I consider each to be a very serious fraud and one which strikes at the heart of commercial retail finance.
The Curran invoices
Counts 4 to 9 (inclusive) in the indictment relate to frauds committed by Mr Pollock as a result of the utilisation of invoices in the name of Curran Holdings Pty Ltd (Curran Holdings) being submitted to NAB in support of apparent sales of machinery by that company to the bank which, in turn, would become the subject of hire purchase agreements for the hiring of that machinery by the bank to one or more of several Pollock Group companies.
The evidence clearly established that by the use of these six invoices, apparently issued by an independent supplier of machinery, Curran Holdings, to NAB, the bank entered into six separate hire purchase agreements with one of several Pollock Group companies on commercial terms for the hiring of that machinery, which was then used by the particular Pollock Group company in the course of its business operations. The nominated sale prices of the machinery, in each invoice, was:
Count 4 $302,500
Count 5 $198,000
Count 6 $198,000
Count 7 $478,500
Count 8 $176,000
Count 9 $434,500
Total $1,787,500
In each case the invoice included GST on the sale price of the machinery the subject of the apparent sale from Curran Holdings to NAB. The above figures show the sale prices plus the applicable GST in each of the six instances.
The ensuing HPAs between the bank and the particular Pollock Group company which nominally agreed to hire the goods included commercial finance charges and provided for the total amount financed to be paid by regular monthly instalments of rent over the life of the HPA which, in each case, was four years. Once the respective hire purchase agreements had been entered into, in reliance on invoices submitted in the name of Curran Holdings, the bank would pay the purchase price (inclusive of GST) to the apparent vendor, Curran Holdings, in each case and, from that time on, one or more of the Pollock companies, or another Pollock company in the group, would make the monthly instalment payments due to the bank on or about the appointed dates. This pattern of repayments continued again until mid or late 2001.
Again, in respect of each of the hire purchase transactions the subject of counts 4 to 9 (inclusive) there was no inspection or physical examination of the subject goods by or on behalf of the bank but, in contrast to the situation applying in relation to counts 1 to 3, goods as described in each of the invoices did, in fact, exist, matched the descriptions given and were, apparently, worth the values attributed to them by the respective invoices ‑ at least there was no suggestion to the contrary at any point during this trial.
At the material times Curran Holdings was a comparatively small supplier of mining construction equipment dealing largely, but not entirely, in second‑hand or refurbished machinery. Its director and principal officer, Mr Peter Curran, had had many dealings with the Pollock Group companies over the years and had sold or supplied machinery to banks, finance corporations or other companies for hire purchase, lease or delivery to one or more of the Pollock group of companies on many occasions. Exhibit 30 contains a bundle of Curran Holdings invoices for such transactions during 2000 and 2001 totalling no less than 79 such invoices, although that includes the six which are the subject of these charges and some duplicates. It is correct to say that there was a long history of machinery sales or supplies from Curran Holdings, via third person financiers, to one or more of the Pollock Group companies.
In many of these instances the machinery or the equipment which was being sold by Curran Holdings to the financier, for subsequent hire purchase or lease to the particular Pollock Group company had been owned at the time by the same, or another, Pollock company and had been offered for sale by that Pollock Group company to Curran Holdings with a view to it being sold by Curran Holdings to the financier and then let on hire purchase or lease to the same or another Pollock company. These sales were not all to NAB. They included sales to other financiers but there were a number to NAB and that number is more extensive than the six which are the subject of counts 4 to 9 in the indictment.
According to the evidence, the officers of NAB were not informed and were not aware that the machinery which was being offered for sale to the bank to form the subject of the subsequent hire purchase agreement between the bank and a Pollock Group company had, very recently beforehand, already been owned by the same or another Pollock Group company. The evidence from the bank officers was that the bank would not ordinarily have entered into such a transaction, at least not in the form of a hire purchase agreement. According to the bank's policy documents and practice at the time, the standard banking procedure was for hire purchase finance of the kind provided to be offered only in the case of machinery or equipment supplied by an independent reputable supplier, that is, not in respect of equipment already owned by the customer. There were, however, possibilities for NAB to provide financial accommodation in respect of machinery already owned by the customer but this would be done, if it were approved, in a different way. For example, by a purchase with a lease back and then usually only for financial accommodation less than the then market value of the equipment.
So far as the evidence from the bank officers in the present case is concerned, the bank was not aware that these six sets of machinery or equipment, the subject of counts 4 to 9, were in respect of machinery or equipment which was, at the time, owned by a Pollock Group company. I accept that evidence notwithstanding that there was some suggestion that the late Mr Jenaway at Kewdale may have been aware of the reality of the position in relation to these Curran Holdings/Pollock Group transactions. That possibility was not the subject of any investigation in the course of the trial and it was not relevant for a consideration of the verdicts nor, I am satisfied, is it relevant for this sentencing. That is because it was never submitted by the prosecution, nor was it the subject of any complaint by or on behalf of NAB, that these transactions were, in fact, in respect of machinery owned by the Pollock Group rather than by Curran Holdings.
The point of the case, accepted as proved by verdicts of the jury and, in my view, amply supported by the evidence, was that none of the six Curran Holdings invoices was genuine but, rather, was an invoice prepared by an officer or officers of a Pollock Group company, with the knowledge of, and at the direction of, Mr Pollock on the letterhead of Curran Holdings stationery in such a way as to resemble a genuine Curran Holdings invoice and was then passed off as such by the officer of the Pollock Group company to NAB as a genuine Curran Holdings invoice. The fraudulent means, therefore, constituted the preparation of the false Curran Holdings invoice and its submission to the bank in support of a transaction for the proposed hire purchase agreement which later eventuated. Of course, it was necessary to establish that this was done with the knowledge or at the direction of Mr Pollock and the jury's verdicts established that this was proved to the requisite degree.
At this point, it is necessary to go into the background to appreciate more fully the significance and purpose of these arrangements and, in particular, these identified frauds. At various times one or more of the Pollock Group companies owned valuable machinery which was used in the business of that company or for other companies in the group and which was unencumbered ‑ that is, it was owned outright by the particular Pollock Group company and was not the subject of any hire purchase agreement, hiring or lease agreement. It is not to the point of this examination, and nothing turns on the fact, that at the material times such equipment was subject to the floating charges which the Pollock Group companies had given to NAB because nothing had occurred at the relevant times to crystallise those charges. This being the case, it was obviously the purpose of the Pollock Group, and I am satisfied appreciated and intended by Mr Pollock, to utilise the value in some of this machinery to obtain further financial accommodation.
This was done by agreeing to sell an item or items of unencumbered machinery to Curran Holdings at a price which must be regarded as being the then current market price of the particular item or items, but on the clear understanding that Curran Holdings would then offer to sell the same equipment at the same price (but plus GST) to a financier ‑ in these six cases to NAB, which in turn would purchase the equipment from Curran Holdings and then let it on hire purchase to the same or another Pollock Group company at the price purchased, inclusive of GST plus finance charges. This would result in the financier, in the present instances NAB, paying the market price for the machinery to Curran Holdings which, because of the understanding which Mr Peter Curran had with Mr Pollock, would then be paid on directly to a company in the Pollock Group and used for whatever purposes he wished, often for general expenditure, but in two of these cases for loans to related companies by the Pollock Group. The loans to related companies occur in relation to counts 5 and 6, the acquisition of four Terex dump trucks for a total amount of $396,000 for apparent delivery to All Terrain Pty Ltd ‑ a Pollock Group company. It is unnecessary to go into the details of these two transactions, except to say that their purpose was to provide capital by one company in the Pollock group to another associated company, All Terrain Pty Ltd, which needed capital to undertake a business development programme which was then still in its early stages.
It is necessary to analyse the effects of these arrangements on those occasions (not these six instances) where genuine sales from a Pollock Group company to Curran Holdings, then to a financier, followed by a hire purchase agreement to a Pollock Group company, did in fact occur. Dealing with those instances, an analysis of what actually, and lawfully, took place is as follows.
First, there was a conditional sale by a Pollock Group company to Curran Holdings of a specified and existing item of machinery at market value. The sale included a condition to the effect that the sale would only proceed, and Curran Holdings acquire ownership of the property, if and when a second sale of the same equipment to a bank or financial institution by Curran Holdings was agreed upon for the purpose of allowing that machinery to be let on hire purchase by the bank or financial institution to the same or another Pollock Group company. Once this conditional sale agreement had been reached between the first Pollock Group company and Curran Holdings, often it seems but not always with little or no written documentation, Curran Holdings would issue an invoice for the proposed sale of the machinery to a designated bank or financial institution, in this case NAB, at the same price, but plus GST, at which it had agreed conditionally to purchase the goods from the Pollock company. On the bank or financial institution agreeing to acquire the machinery at that price and to let it under a hire purchase agreement to the same or another Pollock Group company, and then entering into that hire purchase agreement the series of transactions would be completed. The bank would then pay the purchase price to Curran Holdings, Curran Holdings would remit the purchase price to the original Pollock Group company, which would use the funds for whatever purposes had prompted the transaction in the first place.
By this means, the title to the goods in question would pass from the first Pollock Group company to Curran Holdings, from Curran Holdings to the bank, which would retain the ownership of the goods then let under the hire purchase agreement to the same or another Pollock Group company. Those changes in title would occur not upon delivery of the machinery or goods the subject of the invoices, because in all cases they remained in the possession of the Pollock Group and never passed into the possession of Curran Holdings or of the bank. These were cases where the title passed on appropriation of the moneys. The result was that the Pollock Group received financial accommodation from the bank in respect of machinery which, up until that point, it had owned unencumbered but which, by the transactions had been sold by the first Pollock Group company to Curran Holdings and then to the bank, and in respect of which Pollock Group companies retained possession but now had a liability to meet the hire purchase instalments, including the finance charges.
This description of events fully explains what happened in each of the transactions where there were genuine sales via Curran Holdings but it also reveals that Curran Holdings derived no financial benefit from any of the transactions. There was, however, other compensation. Mr Pollock had agreed with Mr Curran that a payment, in effect, a commission, of approximately $1,000 per transaction would be paid by the Pollock Group to Curran Holdings in respect of each such transaction. There was evidence that of the six transactions which are the subject of counts 4 to 9 in the indictment a total of $5,000 remuneration was paid by the Pollock Group to Curran Holdings, which represented the latter's return for its involvement in the transactions. Again there was no suggestion in the course of the case that any of this was unlawful or a fraud.
There was evidence from a former NAB officer that, in the course of a series of meetings which occurred over a two-day period between Mr Pollock, Mr Jenaway and this senior NAB officer involving a review by the bank of the Pollock Group operations, that Mr Pollock had raised with the bank the possibility of obtaining financial accommodation which might be regarded as resembling what eventually took place in these transactions. I have already observed that, as part of its varied business activities, the Pollock Group was involved in the acquisition and refurbishment of second-hand heavy machinery with a view to selling that machinery into the trade in its refurbished condition. This was carried on on a large scale at at least one of the larger machinery workshops operated by the group. In financial terms, the Pollock Group needed to be able to finance the cost of the acquisition of the machinery to be refurbished, pay for the refurbishment, which might be expensive, and then recoup its outlays and derive a profit on the eventual sale of the machinery in its completed but refurbished state. These eventual sales would usually be to the trade and involve a commercial lease or hire purchase agreement by which the ultimate purchaser would finance its acquisition of the refurbished machinery through the accommodation of a financier such as NAB or other well-known financiers offering accommodation for these types of transactions. Only when the eventual sale took place and the financier provided funds would the Pollock Group company be able to recoup its outlays and make the profit.
This meant that the Pollock Group company or companies had to carry the capital cost of the acquisition of the machinery and the refurbishment for some time until the eventual sale. Mr Kevin Pollock was, however, keen to secure some form of financial accommodation from NAB which would allow the Pollock Group, in effect, to borrow against the machine which had been acquired for refurbishment and for the cost of refurbishment before the ultimate sale of the refurbished equipment. He inquired about this in his tour with Mr Jenaway and the senior NAB official. The result of that discussion was that the senior officer of the bank indicated that this might be possible but explained that detailed proposals would need to be prepared and submitted to the bank for consideration and it was left on the basis that Mr Pollock and/or Mr Jenaway would arrange for this to be done. However, this did not occur and no such proposal for NAB, in effect, to finance the acquisition of machinery for the purpose of refurbishment and resale by a member of the Pollock Group was ever actually approved or implemented. What was happening with the Curran Holdings series of transactions, however, was, to a degree, a practice which fulfilled in part, but not entirely, the objectives which had been outlined by Mr Pollock to the bank during the course of the tour which I have described. Again, however, it is important to stress that there was never any suggestion that what occurred by the legitimate Curran Holdings transactions involved any fraud or element of unlawful conduct in the present cases.
By contrast, the six transactions which are the subject of counts 4 to 9 in the indictment involve situations where Mr Pollock caused one or more of his staff to prepare false invoices on Curran Holdings letterhead for the apparent sale of actual equipment then owned by one or more of the Pollock group of companies to NAB, with a view to NAB purchasing that equipment and then financing it on an HPA to the same or another Pollock Group company. This would occur without prior consultation with, or authority of, Mr Curran but, on completion of the transaction, the money paid by the bank would go to Curran Holdings, as was the practice under the genuine arrangements already described, and then be sent on by Curran Holdings to the Pollock Group and a commission of $1,000 or so would be paid by the Pollock Group to Curran Holdings. What occurred involved the bank receiving an invoice, apparently genuine, from Curran Holdings for the sale to it of equipment from Curran Holdings for the purpose of being financed on an HPA to a designated Pollock Group company. Accepting the invoice as genuine, the bank agreed to the transaction, prepared and entered into an HPA with the Pollock Group company designated, and paid the purchase price to Curran Holdings. At all times the possession of the machinery in question remained with the original Pollock Group company.
It was the evidence of the NAB bank officers that the bank would not have paid out under each of the six hire purchase agreements had it known the true position, at least without further investigation and, that by doing so, had suffered a detriment. The fraudulent means was the submission of the false Curran Holdings invoice to the bank for the purposes of securing the bank's acquisition of the property and then financing it on an HPA to the designated Pollock Group company. The intention to defraud by Mr Pollock was to be inferred from his knowledge of the falsity of the invoice, in causing it to be submitted to the bank as if it were genuine, and for the purposes of securing HPA finance and accommodation under the guise that this was a genuine sale from Curran Holdings. The verdicts of the jury establish that the jury was satisfied beyond reasonable doubt that all this had been proved and I am satisfied that the evidence amply bears that out.
The practical result, therefore, is that by these frauds Mr Pollock caused the bank to pay out the amounts of each of the six false Curran Holdings invoices in the amounts already mentioned in circumstances where it would not have done so, or would not have done so in the form it did, had the true position been disclosed. It is also the fact that the Pollock group of companies thereafter continued to pay to NAB the monthly instalments due under each of the six hire purchase agreements until mid or late 2001. Later, when the receivers moved in, possession of these items of machinery was obtained by the receivers and they were all sold as part of the realisation of the Pollock Group assets and the proceeds of sale were credited to the indebtedness of the various Pollock Group entities to NAB.
This has led to the submission on behalf of Mr Pollock that the bank did not suffer a loss equal to the entire amounts financed for each of these transactions and that, indeed, the losses actually suffered by the bank, if any, were no more than the losses which would have been suffered in any event had the transactions been genuine in the sense that they had originated with authentic Curran Holdings invoices. There are a number of issues which first need to be identified and addressed to be able to consider those submissions.
The effect of the Curran Holdings' transactions
The starting point is that, as a result of these six transactions, the bank purported to purchase property offered for sale by Curran Holdings, when Curran Holdings did not own that property and was not offering it for sale. This meant that no title to the goods could be acquired by NAB from Curran Holdings. Nevertheless, the Pollock Group company which entered into the HPA with NAB, by the very fact of doing so and binding itself to observe the covenants of that agreement and to take the property on hire, must be taken to have acknowledged the title of the bank to the goods ‑ this is a variation on the species of estoppel by which a tenant is deemed to have accepted his landlord's title: Universal Permanent Building Society v Cooke [1952] Ch 95, [1951] 2 All ER 893, 896 ‑ 897. That acceptance of title would bind the hirer under the HPA in the event that the hirer was the company which originally owned the equipment which had fictionally been sold, to the bank via Curran Holdings, it creating an acknowledgement of title, if the hirer had been the true former owner of the equipment. However, it would also bind the true owner which had purportedly participated in the fictional sale to the bank via Curran Holdings in the event that that true owner was a privy of the hirer or a party to the fraud perpetrated by Mr Pollock. In this case, I am satisfied that Mr Pollock should be treated as having knowledge and control of all the companies in the Pollock Group so as to render the hirer unable to dispute the title of NAB to the goods, acquired by estoppel, even if the original owner and the fictional vendor to Curran Holdings and NAB was another company in the Pollock Group.
All this means that, despite the frauds, the Pollock Group companies which entered into the hire purchase agreements with NAB would be deemed to have accepted the bank's title to those goods, notwithstanding the frauds. On the other hand, the frauds left NAB in the position where, upon discovery of the frauds, it could had it so elected, have taken action to rescind the hire purchase agreements and pursue one or both of the Pollock Group companies involved for damages. Alternatively, NAB could, with knowledge of the fraud, have affirmed the transaction by accepting the title acquired by estoppel and then seeking to enforce or rely upon the terms of the hire purchase agreements and the ownership of the equipment given to the NAB by this process of estoppel.
In the events which have happened, that is, involving the receivers going into possession, seizing this and other equipment and selling it to defray indebtedness due to the bank, I consider that the proper view to take is that by doing so NAB has affirmed each of the hire purchase agreements, accepted the title to the goods and relied on that ownership to defray the liabilities owing by the hirer to it. The result of all of this is that by this somewhat complicated process and despite the right of rescission being available to it, NAB did acquire title to each of these goods, but not through Curran Holdings. The complexity of the position and the potential jeopardy to its title and NAB's rights of recourse to the equipment so involved, is another reflection of the consequences of these frauds for the bank.
Again the submission from Mr Pollock in relation to the Curran Holdings invoice transactions, has been that it is not possible to ascertain the existence of, let alone the extent of, any loss which the bank has suffered as a result of these frauds and that, there is no basis upon which to conclude that any such loss was actually suffered. Again, this is because of the ability of the bank to resort to its other securities to realise these assets. Once more, even if this be so, it still leaves the position that the Pollock Group received financial accommodation from NAB, in a manner in which the bank may not otherwise have been prepared to grant. Even if the submissions of counsel for Mr Pollock be correct in this regard, these transactions resulted in the overall indebtedness of the Pollock Group being increased. It is not necessary, in my opinion, to ascertain whether in fact an actual loss was suffered by NAB in relation to any one of these six Curran Holdings invoice transactions. Each was for a large amount of money, each was false and fraudulent and each resulted in NAB making payments at a time and in a manner which it would not have done if the true position had been disclosed. The fabrication of the false invoice, and the submission of this to NAB to represent a sale of a chattel for a hire purchase agreement is, on any view, a serious and deliberate fraud and one which strikes against proper commercial dealings. If one were to suppose that no loss in fact occurred in this case that should not, at least in my view, be regarded as any significant reduction or mitigation of the seriousness of these offences.
It is necessary to make some observations about how Mr Pollock sought to explain these Curran Holdings invoice transactions. While initially suggesting that Mr Curran's evidence was unreliable or lacked credibility and that, therefore, the prosecution could not establish that the particular invoices concerned were frauds, in the sense that they had not been prepared by Mr Curran or by a member of his staff, Mr Pollock's defence was that, as a result of the pattern of dealings over the years, he had the authority of Mr Curran to prepare invoices of the kind involved in these six charges, without actual reference to Curran Holdings or any of its staff, and to submit them in the name of Curran Holdings to the bank.
Mr Pollock, by the conduct of his defence and the evidence given at the previous trial, set out to explain that, inevitably, the knowledge of the preparation of these 'false invoices' had come to the notice of Mr Curran and that he thereupon issued fresh replacement invoices in respect of some of these transactions and kept these in his records without making any strenuous complaint to Mr Pollock and without notifying NAB about the truth of what happened. There were some replacement invoices issued by Mr Curran but his explanation, and one which I am satisfied that the jury accepted and which I also accept, was that this was necessary on his part to keep his GST records and accounting in order. He may be open to criticism for not protesting in stronger terms to Mr Pollock and perhaps for not notifying NAB, but there was no suggestion that his conduct in this case was unlawful. Mr Curran himself explained that it was his experience of these transactions which led him to cease having dealings with the Pollock Group and that seems to be a credible and ultimate sanction demonstrating his disapproval.
Clearly, however, the jury, by its verdicts, concluded that the prosecution had established beyond reasonable doubt that Mr Curran had not authorised Mr Pollock to act as he did in preparing these false Curran Holdings invoices or to submit them to the bank as if they were genuine. The jury's verdicts also necessarily involved findings that the prosecution had established beyond reasonable doubt that Mr Pollock had no honest belief in the existence of any authority from Curran Holdings or Mr Curran for him, or any of his group of companies, to prepare such false invoices. The approach adopted by Mr Pollock in relation to this aspect of the case, therefore, in the view of the jury and in my view, amounts to a deliberately false explanation of the true nature of these transactions.
For these reasons, I have reached the view that each of the six offences of fraud, the subjects of counts 4 to 9 in the indictment, constitutes a serious fraud. It was deliberate, contrived and in respect of a substantial financial transaction. It placed NAB in a position of potential jeopardy as to title but, most significantly, it involved serious dishonesty in the course of a major commercial transaction. The commercial activities of banks, finance institutions and large companies work to a large degree on trust and, if people were dishonest, the expense of more thorough investigations, more extensive scrutiny and cross‑referencing would add another layer of complexity, cost and delay to the administration of a financial system in which a premium is placed on speed and efficiency. Equally, if fraud of this kind reached major proportions, the cost of supplying credit would inevitably increase (because of losses inevitably caused by fraud), and the entire community would suffer. Honesty is not only desirable, expected and required by law, but it conduces to improved and more comprehensive availability of credit, and to speed and efficiency in the financial world. All these advantages are threatened by frauds of this kind.
Significance of sentences and penalties imposed after first trial
The three sentences for concurrent periods of imprisonment to be suspended for a period of 2 years for convictions after the first trial on charges equivalent to counts 1 to 3 in the present indictment have already been mentioned. Similarly, I have already also described the aggregate fine of $60,000 imposed by McKechnie J for the convictions on the other six charges after the first trial, being those reflected by counts 4 to 9 on the present indictment. Counsel for Mr Pollock submits that no more serious penalties or sentences should be imposed in the event of these convictions resulting from Mr Pollock's re‑trial on these charges, following the quashing of his earlier convictions by the decision and orders of the Court of Appeal.
The submission for Mr Pollock in this respect is that ordinarily an offender should not receive a longer sentence after conviction on a retrial than he or she received at the original trial. If the sentencing judge at the retrial considers that the original sentence was 'manifestly inadequate', it is open to that judge in the exercise of the sentencing discretion, to give a sentence higher than that imposed on the first occasion. But an exercise of a discretion by a sentencing judge that increases the original sentence given to the accused is necessarily 'rare' ‑ RH McL v The Queen [2000] HCA 46; (2000) 203 CLR 452, 457 ‑ 475. The policy reasons for this principle are to avoid discouraging appeals and to avoid any public perception that the administration of justice involves a retributitive element. Accordingly, as the submissions progressed, the court imposing the second sentence must have regard to the first sentence, to the policy considerations mentioned in R v Gilmore (1979) 1 A Crim R 416, applied in R H McL v The Queen (supra) and to all other relevant facts. The submission is that the second court should not go beyond the 'ceiling' of the first sentence unless there has been a significant change in the facts, which is not suggested is the case at present, or unless the court is of the opinion that the first sentence was 'inadequate or inappropriate' ‑ Williams v The Queen (No 2) [1982] WAR 281, 283 ‑ 284; (1982) 5 A Crim R 81; R v Chen [1993] 2 VR 139; (1993) 66 A Crim R 154.
Counsel for the prosecution has submitted that, in accordance with Williams v The Queen (No 2) (supra) and RH McL v The Queen (supra), it is open to the court to impose a higher sentence if truly satisfied that the first sentences passed were inadequate or inappropriate, in which case the sentencing judge must act on that opinion. Reference was made to the endorsement of that principle in Stickland v The State of Western Australia [2005] WASCA 115 ‑ a decision refusing leave to appeal from the imposition of a more severe sentence after a retrial and in respect of which a subsequent application of special leave to appeal to the High Court of Australia was refused: Stickland v The State of Western Australia [2005] HCA Trans 882 (26 October 2005).
Whenever a hire purchase agreement was entered into by NAB it was given a distinctive number which then became the bank's reference number for that account and future transactions on the account. So, accordingly, when it comes to records of repayments, ultimate disposals of the machine or sales in the event of a default various debit and credit entries are found in running accounts kept by the bank bearing the distinctive number for the particular hire purchase agreement. Those accounts are mentioned later because it is from reference to these that the losses or write-offs for the particular account were recorded by the bank. However, as explained, those accounts do not necessarily show the final position of loss or otherwise by NAB arising from that transaction because of recoveries from other sources such as guarantees and from more general securities. Those accounts are to be found in exhibit 2 of the documents submitted in the course of the sentencing hearing.
Defaults under the various hire purchase agreements
The submissions in sentencing and during the course of the trial were that the Pollock Group companies kept up the monthly instalments due under the several hire purchase agreements until shortly before the appointment of receivers in March 2003. However, this is not borne out by NAB's customer statements (exhibit 2). They show that the last payments made under the three HPAs for the IMAP front-end loaders were made on 6 July 2001 with the only subsequent credits being for the rebate of terms charges credited on 26 September 2003 before eventual write-off on 21 June 2004. The last payments under the other hire purchase agreements were as follows:
Contract 491907554 Last payment 26 June 2002, but that and earlier monthly payments dating back to 26 September 2001 had all been dishonoured
Contract 526796031 Last repayment 17 June 2002, but that and all payments dating back to 17 September 2001 had all been dishonoured
Contract 526796066 Last payment 17 June 2002, but that payment and all instalments back to 17 September 2001 had been dishonoured
Contract 529601519 Last payment 17 June 2002, but that and all payments dating from 17 August 2001 had been dishonoured
Contract 529986471 Last payment 17 June 2002, but that and all previous monthly payments dating back to 17 August 2001 had been dishonoured
Contract 531315247 Last payment 7 June 2002, but that and all but one payment dating back to 7 August 2001 had been dishonoured
Contract 531847278 Last payment 28 June 2002, but that and all previous payments but two dating back to 30 July 2001 had been dishonoured
Contract 532022040 Last payment 28 June 2002, but that and all but one previous payment dating back to 30 July 2001 had been dishonoured
Contract 531841247 Last payment 28 June 2002, but that and all but one previous repayment dating back to July 2001 had been dishonoured
Accordingly, as opposed to the suggestions made during the trial and the submissions on sentencing that monthly payments under the various hire purchase agreements in question were made more or less regularly until shortly before the insolvency in March 2003, the evidence shows that from about July 2001 the Pollock Group companies were in default under most of the hire purchase agreements. From then on a number of regular monthly payments were made but mostly dishonoured. In relation to the three hire purchase agreements arising from the IMAP transactions, no payments were made after July 2001. This suggests that the Pollock Group was experiencing severe liquidity problems from the middle of 2001 onwards.
It is necessary to recall and give weight to the submissions advanced on behalf of Mr Pollock that these statements cannot be accepted as giving a true or reliable indication of the existence or extent, if any, of any ultimate loss to the NAB from any or all of these transactions. What they do show is the amount owing to NAB under each hire purchase agreement upon its termination by the insolvency of the company and after credit was given for the net proceeds from the sales of any of the machinery recovered. What they do not show is whether, additionally, the amounts then owing on the termination of the hire purchase agreements were recovered in part or in full by NAB by action taken against guarantors and/or by resort to other securities which the bank had over other property of the constituent members of the Pollock Group.
It is known that NAB did have resort to the guarantors and to other securities but the extent, if any, to which those other avenues of recovery were successful in reducing the amounts owing after the termination of the hire purchase agreements cannot be ascertained on the evidence available. However, the potential for those losses to be reduced to a significant degree by resort to the creditors' other powers should must be acknowledged. That is why the learned sentencing judge after the first trial observed that he could not and did not draw any inference as to the ultimate effect of Mr Pollock's actions. In the present case, however, the prosecution has adduced this additional evidence of the losses sustained but it is still not possible to make any definite finding as to the existence or quantum of any such losses.
However, in my view, this is not a factor of major significance. Even had there been no loss because the Pollock group of companies which entered into these hire purchase agreements had prospered and eventually paid all of the obligations under each of the hire purchase agreements, there would still have been offences of fraud committed. To embezzle money from an employer's account but then proceed to pay it back in full does not mean that there has not been a serious crime committed, although such restitution is obviously a factor to be taken into account.
In this case, although it is not possible to determine whether there were in the end losses sustained by NAB due to these particular transactions, and if so how great they were, that is only because of the complexity of the ultimate insolvency of the Pollock Group. There was, however, much delay and difficulty in the recoveries which NAB actually achieved. The level of deception was serious, the magnitude of the financial obligations which were entered into by NAB on the faith and the reliability of the information which had been supplied to it were also great and, as I observed before, the consequences of the fraud were to put the bank's interests in jeopardy and uncertainty for quite some time.
The learned sentencing judge on the first occasion said, and in this respect, I entirely and respectfully agree with his observations:
But what I am satisfied of is quite a high degree of dishonesty on your part. You obtained on behalf of your companies over $3 million. These were no merely technical offences, they are serious examples of fraud occurring over a period and involving a great deal of money. There is no mitigation in the fact that they were part of hundreds of similar transactions during the period. Financial institutions are entitled to expect honesty from their customers in their dealings. In this case your actions fell well short of the honesty required. The first three counts involving IMAP invoices are grave frauds, as (counsel) very properly acknowledged in conceding that a term of imprisonment was required. There never was any security for the bank because the machinery was never in Australia.
Then, after addressing observations to a number of other factors which now remain very much in issue in the present proceedings, his Honour went on to observe:
There are other factors to be taken into account. Unusually, the prosecution case was not based on any ultimate loss to the bank. This is not in any way a criticism. The case was properly run on the basis that the detriment caused to the bank was that it advanced money without knowing the true circumstances. Had it known the true circumstances it would have investigated. It may or may not have continued with the arrangement.
His Honour then went on to observe that he was unable to quantify the loss to the bank as the result of Mr Pollock's frauds and that, despite the passage of some seven or eight years since the offences, Mr Pollock had not committed further offences. His Honour, as I do, disregarded Mr Pollock's earlier convictions before coming to a conclusion that an appropriate sentence, for the IMAP offences, was a period of imprisonment but that it should be suspended. His Honour decided to suspend the term of imprisonment because of 'the somewhat unusual nature of the frauds and their effect on the bank and the fact also that you do not appear to have personally benefited. The money you gained seems to have been ploughed back into the businesses, albeit businesses in which you were greatly concerned.'
The maximum penalty for each of the offences is 7 years' imprisonment but, in November 2008 when the sentences were imposed, they were to be adjusted by virtue of the transitional provisions of the Sentencing Act1995 (WA) to a maximum of 4 years and 8 months' imprisonment. His Honour concluded that before the 2003 transitional proceedings amendment to the Sentencing Act an appropriate sentence for counts 1 ‑ 3 would have been 5 years' imprisonment which, reduced by a third, would become 3 years 4 months on each count. His Honour ordered that they should be served concurrently, made a parole eligibility order, and then suspended those sentences for a period of 2 years. In respect of the remaining six counts, his Honour imposed a global fine of $60,000.
Since November 2008 when those sentences were imposed the Sentencing Act has been further amended to modify the effect of the Transitional Provisions Act. However, as a result of the decision of the Court of Appeal in The State of Western Australia v BLM [2009] WASCA 88; (2009) 256 ALR 129, a sentencing judge should proceed on the basis that the pre‑2003 sentence should be reduced by a factor of one‑third, effectively resulting, in practical terms, in adopting the same approach as the first learned sentencing judge but based on the principles contained in BLM (supra).
Having given attention to the principles outlined in RH McL v The Queen (supra) and Williams v The Queen [No 2] (supra) I consider that immediate terms of imprisonment for these offences are necessary and unavoidable. I have reached these conclusions after giving what I hope is due deference to the different approach taken by the first learned sentencing judge but I consider that immediate terms of imprisonment should be imposed because the seriousness of the offences in their particular setting is such that only imprisonment can be justified, and also because the proper protection of the community, including its reliance upon well accepted and established methods of commercial finance require this. A reliable, secure and dependable system of commercial finance for a community is part of the essential structure of society and must be vindicated and protected in the collective interests of the members of society generally.
Accordingly, I would impose sentences of immediate imprisonment for each of the convictions on counts 1, 2 and 3. In selecting the period of imprisonment, I consider that a period of 3 years and 4 months for each offence should be imposed. I have reached this conclusion for the same reasons given by the first sentencing judge, and it follows that I agree with that aspect of the former decision. Furthermore, I consider that consistently with the principles in RH McL v The Queen I should not impose a longer period of imprisonment for those offences unless I was satisfied that those periods were manifestly inadequate or inappropriate and I certainly do not consider that to be the case. What I do consider, with all respect to his Honour, is that the decision to suspend those sentences was inappropriate and I therefore decline the submission to suspend these sentences. In reaching that decision, I am aware of the necessity to consider, as it were for an additional and final time, the desirability or otherwise of suspending a term of imprisonment which is essential in conformity with the principles explained in Dinsdale v The Queen (supra). I have done that but I remain of the view that the sentences should not be suspended and that they should be served by immediate imprisonment.
This raises the issue of the fact that from the imposition of the suspended sentences by McKechnie J on 4 November 2008 until those convictions were quashed by the decision of the Court of Appeal on 3 June 2009, a period of some seven months, Mr Pollock was subject to the suspended terms of imprisonment and, to that extent, had his liberty impaired or subject to potential revocation in the event of a breach of any of the terms of the suspended sentence orders, in a way that his usual freedom would not be so constrained. For this reason, it was submitted by his counsel that some credit or reduction in any period of imprisonment should be made to take into account that degree of restriction or threat to his liberty during that seven-month period. There was, however, no suggestion that Mr Pollock's liberty, in any tangible or practical sense, was restricted or his freedom of action curtailed by that period during which the suspended sentences stood and, accordingly, I do not consider that that factor requires or should receive any specific reduction in the terms of the imprisonment which I have selected, but I am taking it into account in structuring the partially concurrent effects of sentences which follow and in regard to the overall question of totality.
Because the three offences relating to the IMAP vehicles all occurred from the same set of transactions, although they involved additional impositions upon NAB, I also consider that those sentences should be served concurrently and that there should be an order for eligibility for parole.
With regard to the six offences for fraud arising from the Curran Holdings invoices, counts 5 and 6 can be regarded as part of the same series of transactions (the sale of the four Terex dump trucks involving All Terain Aust Pty Ltd entering into hire purchase agreements with the bank for those vehicles) but count 4 relates to an entirely separate and earlier transaction, and counts 7, 8 and 9 each also relate to separate and subsequent unrelated transactions, each occurring on different dates.
I regard each of these transactions as a serious fraud, notwithstanding that the particular items of equipment did exist and in respect of which title was ultimately capable of being passed to the bank, as I am satisfied it eventually was. Here again, it is not possible to quantify with any precision the existence or extent of any losses suffered by NAB but, for the same reasons as before, these were serious impositions motivated by dishonesty and designed to secure financial accommodation which would not have been forthcoming, or forthcoming in the same form, had the true position been disclosed. Each was, in its essential elements, an application to NAB based on false representations which the applicant believed would be acceptable to the unsuspecting bank, but knowing or believing that the bank would not be prepared to advance the same kind or degree of financial accommodation had the true circumstances been disclosed.
Again, after considering the principles set out in RH McL v The Queen (supra) and giving full consideration to the reasons given by the learned judge who sentenced for these offences after the first trial, I consider that sentences of immediate imprisonment for these offences are warranted. They represent a succession of serious frauds, they were planned and deliberate, they were designed to deceive and to take advantage of a relationship built up with the bank over time and they were successful until eventual discovery in the course of the insolvency of the Pollock group of companies. They strike seriously at the heart of commercial dealing and the integrity of our commercial financing and credit systems. There is no scope for misunderstanding or mistaking the position and there does not appear to be any significant remorse. That Mr Pollock himself did not personally profit does not seem to me to be particularly significant. The offences were committed for commercial advantage and the advantage was for the corporate group which constituted and reflected in large measure his own interests. Having said that, they were not as blatant or as serious as the IMAP offences because the machinery and equipment the subject of the hire purchase agreements did in fact exist but they showed a persistent pattern of seriously dishonest conduct.
In my opinion, an appropriate sentence for each of those counts is a period of 2 years' imprisonment. This is based on my view that an appropriate period of imprisonment for each of those offences, before the operation of the transitional provisions legislation and the decision in BLM would have been 3 years' imprisonment but, having regard to subsequent developments, that has been reduced by a factor of one‑third to 2 years' imprisonment, and that is for each offence.
Once again, I have specifically considered whether, despite this initial conclusion, one or more of these sentences should be suspended, but I am satisfied that this should not be done. This is because of the seriousness of the offences and the persistence in that dishonest behaviour.
I have already indicated that I regard the offences comprised in counts 4 to 9 inclusive as constituting, in effect, five separate and distinct series of unlawful acts, these being:
(1)the offence under count 4;
(2)the offences under counts 5 and 6;
(3)the offence under count 7;
(4)the offence under count 8; and
(5)the offence under count 9.
This gives rise to the question of whether or not the sentences should be served cumulatively, concurrently or partially concurrently and, if so, whether partially concurrently with the sentences imposed under counts 1, 2 and 3. Because they are separate offences, committed on the five separate occasions which I have mentioned, I consider that there should be some degree of cumulation but one which takes into account the overall principle of proportionality so as to avoid an aggregation which would result in a crushing sentence. This is a case in which the principle of totality comes into application.
In my view, a period of 2 years' imprisonment should be imposed in respect of each of the charges under counts 4 to 9 inclusive. To take into account the separate nature of the offences and the persistence in serious illegal conduct over time, I consider there should be some degree of cumulation. Accordingly, I consider that the sentence of 2 years' imprisonment on counts 5 and 6 should be made partially concurrent and partially cumulative upon the sentence imposed under count 4, so making an effective sentence for counts 4, 5 and 6 an aggregate of 3 years. I am satisfied that, in other circumstances, there should ordinarily be a degree of cumulation for the sentences imposed for the subsequent offences but doing this would, in my view, offend against the principles of totality. Accordingly, I consider that the sentences of 2 years' imprisonment on counts 7, 8 and 9 should all be served concurrently with each other and concurrently with the sentences imposed for counts 4 to 6 inclusive. That leaves the aggregate head sentence for offences on counts 4 to 9 (inclusive) as 3 years.
This brings me to the point of considering whether or not the sentences imposed on counts 4 to 9 should be cumulative upon, concurrent with or partly cumulative upon the sentences imposed on counts 1 to 3 (inclusive). Again I am satisfied that there is reason for a degree of cumulation but once more principles of totality come into play. For this reason, I consider that the sentences on counts 4 to 9 (inclusive) should be partly cumulative and partly concurrent with the sentences imposed in respect of counts 1 to 3. I consider that the sentences under counts 4 to 9 should be cumulative upon the sentences imposed on counts 1 to 3 for a period of 2 years but otherwise should be concurrent. This means that taking into account the aggregate effect of all the sentences there will be an effective aggregate head sentence of 5 years 4 months. Again in respect of each of the sentences imposed on counts 4 to 9, there should be orders for eligibility for parole.
Therefore, the sentences imposed are:
Count 1 3 years and 4 months
Count 2 3 years and 4 months (concurrent)
Count 3 3 years and 4 months (concurrent)
Count 42 years (cumulative upon counts 1, 2 and 3 but for 1 year only and concurrent for the remaining 1 year)
Count 52 years (cumulative upon counts 1, 2, 3 and 4, for 1 year, concurrent for the remaining 1 year
Count 62 years (concurrent with count 5)
Count 72 years (concurrent with counts 5 and 6)
Count 82 years (concurrent with counts 5, 6 and 7)
Count 92 years (concurrent with counts 5, 6, 7 and 8)
9
3