R v O’Dwyer

[2024] NSWDC 11

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

R v O’DWYER [2024] NSWDC 11

Hearing dates:

07 December 2023 and 12 December 2023

Date of orders:

02 February 2024

Decision date:

02 February 2024

Jurisdiction:

Criminal

Before:

Anderson SC DCJ

Decision:

Aggregate sentence of 4 years with a non-parole period of 2 years and 4 months

Catchwords:

CRIME – sentencing – fraud – objective seriousness

Legislation Cited:

Crimes Act 1900 (NSW), s 192E(1)(b)

Crimes (Sentencing Procedure) Act 1999, s 3A, s 5, s 21A(2), s 21A(2)(m), 21A(2)(n), 21A(3), 21A(3)(a), 21A(3)(e), 21A(3)(f), 21A(3)(g), 21A(3)(h), 21A(3)(i), s 53A

Cases Cited:

R v Ho (1989) 39 A Crim R 145

R v Hawkins (1989) 45 A Crim R 430

R v Mungomery [2004] NSWCCA 450

R v Woodman [2001] NSWCCA 310

R v Finnie [2002] NSWCCA 533 R v Todorovic [2008] NSWCCA 49

R v Pont [2000] NSWCCA 419

R v Mears (1991) 53 A Crim R 141

R v Hill [2004] NSWCCA 257

R v Murtaza [2001] NSWCCA 336

Stevens v R [2009] NSWCCA 260

R v El-Rashid (unrep, 7/4/95, NSWCCA)

Ralan St Leonards v Construction, Forestry, Mining and Energy Union [2014] FCA 431

Bugmy v the Queen [2013] HCA 37

DS v R; DM v R [2022] NSWCCA 156

R v Qutami (2001) 127 A Crim R 369

R v Palu (2002) 134 A Crim R 174

Lloyd v R [2022] NSWCCA 18

Devaney v R [2012] NSWCCA 285

Apulu v R [2022] NSWCCA 244

Aslan v R [2014] NSWCCA 114

Hartman v R [2011] NSWCCA 261

Texts Cited:

Nil

Category:

Sentence

Parties:

William O’Dwyer (Offender)
Commonwealth Director for Public Prosecutions (Crown)

Representation:

Counsel:
Ms D New (Crown)
Mr G Brady SC, with Ms Ghabrial and Mr Deppeler (Offender)

Solicitors:
Commonwealth Director for Public Prosecutions (Crown)
Michael Ayache – One Group Legal (Offender)

File Number(s):

2023/205738

Publication restriction:

(1) Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), the parts of these reasons for judgment which are marked as redacted on the file copy of the judgment initialled by Anderson SC are not to be published (other than to the parties and their legal representatives) until further order of the Court.

(2) Order (1) is made on the ground specified in s 8(1)(c) and 8(1)(e) of the Act.

JUDGMENT

1. The offender is before the Court after pleading guilty to six counts of dishonestly obtaining a financial advantage by deception, contrary to s 192E(1)(b) of the Crimes Act 1900 (NSW). The offender entered this plea of guilty in the Local Court on 22 August 2023 and maintained his plea before me. He is entitled to a discount of 25% for the utilitarian value of the timing of entry of guilty plea and I have taken that into account in setting his sentences.

2. The maximum punishment for an offence committed pursuant to s 192E(1)(b) is 10 years’ imprisonment. There is no standard non-parole period.

3. It is worth stating at the outset that an offence under section 19 2E(1)(b) can occur either because a person has, by any deception, dishonestly obtained a financial advantage OR causes any financial disadvantage. Here, the offences involve the offender dishonestly obtaining a financial advantage by deception NOT that he caused any financial disadvantage.

4. The obtaining of the financial advantage must be the result of the offender’s deception, but it is not necessary to show that the person deceived actually suffered the loss: R v Ho [1] . In other words, a financial advantage can be obtained by an offender even when there is no financial disadvantage suffered by any victim, as is the case here.

   1. (1989) 39 A Crim R 145.

Facts

5. The Court was presented with a detailed Statement of Facts which, notwithstanding its length, did not actually address the six specific offences for which the offender had pleaded guilty. At my request a supplementary document specifically addressing the six offences was prepared. That document became Exhibit C. I have taken both documents into account in preparing my reasons. Between them the Statement of Facts and Exhibit C run to over 27 pages or about 15,000 words and I do not propose to summarise it all in the judgement.

6. The six charges cover a period between April 2015 and June 2018 and relate to loans advanced to the offender’s companies:

1. Ralan Arncliffe Pty Limited;

2. Ralan Cecil Street Pty Limited; and

3. Ralan Lamond Pty Limited (‘the Development entities’)

which were involved in residential development projects in the Sydney suburbs of Arncliffe, Turramurra and Gordon. The Lenders were Wingate Pty Limited and St George Bank Limited, which I will refer to as ‘the Lenders.’

7. The simplest explanation of the dishonest conduct undertaken by the offender is that he deceived the Lenders in two ways. Firstly, he deceived the Lenders into believing that the 10% pre-sale deposits which were received from purchases (‘the pre-sale deposits’) were held in a trust account, known as the Ralan Property Services Trust Account, when in fact, the deposits had been loaned by the purchasers back to the offender’s development companies for use as working capital for a fee as part of a side agreement.

8. Secondly, during what is described as the Second Phase or Audit phase, the offender deliberately concealed from the Lenders the existence of the side agreements with the purchases. The side agreements with purchases were that purchases could agree to release the deposit money that they provided to the offender, and which should have been held on trust as security for the Lenders, but was in fact released out of the trust account as loans to offender’s companies.

9. To expand on this second aspect, a standard minimum 10% deposit was required to be paid by each purchaser to the relevant development entity. That amount was to be held in trust. Around the time that contracts were exchanged for the purchase of the units off the plan, the offender, or his agent, would approach the purchaser and ask whether they would be prepared to consent for that deposit to be used as an unsecured loan towards the development. Interest would be paid to the purchaser, typically at 15%, and that money would be credited towards the purchase price of the unit at the time of the settlement.

10. If the purchaser agreed to release their presale deposit, a release agreement was signed by the offender and the purchaser. The offender personally guaranteed the unsecured loans. The release of the deposits was properly recorded in the balance sheet of each of the three development entities. Once the presale deposits had been released to the development entity, they were used as working capital by that or other companies controlled by the offender.

11. Prior to the loan facilities being finalised and the finance made available by the Lenders, the Lenders undertook due diligence to verify the preconditions were being met. The Statement of Facts refers to this as the audit phase. This phase involved the Lenders obtaining from the offender a schedule of pre-sales deposits which was to state the fact and amount held in trust in respect of each exchange purchase contract and where the funds were held. These schedules were connected to trust account ledgers showing the movement of funds with the developments. The offender knew that the Lenders required these documents for the purpose of ensuring the preconditions were being met and knew that they would rely upon them.

12. The trust ledgers provided by the offender to the Lenders were misleading in that they recorded the receipt of deposit funds, but not their subsequent withdrawal by the offender. The offender knew this. Similar deception occurred with respect to the schedule of pre-sales deposits, which listed a series of purchaser deposits, but not their release. At all times, the offender was responsible for the documents provided to Lenders.

13. The offender’s deception and dishonesty involved:

1. signing Warranties and Irrevocable directions in relation to two of the developments and for the third, certifying presale certification levels with attached irrevocable directions and authorisations that the presale deposits were to be held in trust accounts with no side agreements. These are referred to as the pre-conditions.

2. certifying the accuracy of schedules presented to the Lenders setting out presale deposits in circumstances where he knew they were false because the deposits which the schedules said were held in the trust accounts were not in fact held and had been released via a separate side agreement between the relevant development company and the purchaser.

3. providing to the Lenders misleading trust ledgers in relation to each of the three developments. The trust ledgers were misleading in the sense that while they recorded trust account deposits, they did not record withdrawals from the accounts. I will detail this issue shortly.

4. Fourthly, by not disclosing to the Lenders the fact that there are had been a release of the presale deposits via the release agreements.

14. It is important to note that all of the amounts of money involved were either repaid or expected to be repaid to the Lenders. No purchasers have been left out of pocket either. In total, $251 million in facility agreements were in place between the offender and the Lenders. The offender was required to hold $25,831,000 in trust accounts for the three development entities, representing 10% of the total value of presales of $258,837,000. The three development projects were valued at a combined $376,550,000.

15. A total of $132,369 million was drawn down to finance construction.

16. Just as an aside, I note that there is no suggestion that but for the dishonesty, the offender would not have been able to obtain finance from these or any other Lenders. This observation will become relevant when I discuss Dr Lianos’s psychiatric report.

17. As a result of the deception, the Lenders believed that their required preconditions regarding the manner in which the purchasers deposits had been satisfied and of that basis, agreed to advance monies to the offender.

In relation to the specific sequences:

Sequence 1

18. The date range is between about 17 April 2015 and about 17 January 2017. This related to the Ralan Cecil Street Pty Ltd development and St George Bank. This represented the longest individual period.

19. The offender obtained a financial advantage of $17.42 million, in that that he had the ability to draw down that amount, although in fact the drawdowns paid was $9.53 million.

Sequence 2

20. The date range is between about 24 April 2015 and about 3 July 2015.

21. This also related to Ralan Cecil, but the lender was Wingate Finance.

22. The financial advantage obtained was $4.65 million, being the amount, the offender had the ability to draw down. In fact, $3.6 million was used.

Sequence 3

23. The date range is between about 26 June 2015 and about 24 September 2015.

24. This involved Ralan Lamond Pty Ltd, being the obtaining of, and ability to drawdown on, a loan facility from St George Bank Limited. The financial advantage obtained by way of the total drawdowns available was $30.3 million, but the actual drawdown was $27.67 million.

Sequence 4

25. The date range is between about 14 July 2015 and about 19 September 2015. This involved Ralan Lamond Pty Ltd, being the obtaining of, and ability to drawdown on, a loan facility from Wingate. The financial advantage obtained was the total drawdown available of $7.95 million, but the actual drawdown was $6 million.

Sequence 5

26. The date range is between about 19 February 2018 and about 4 June 2018. This was for the Ralan Arncliffe development.

27. The financial advantage obtained was $95.1 million, but the drawdowns paid was substantially less, at $16.65 million.

Sequence 6

28. The date range is between about 5 April 2018 and about 6 June 2018. This was also for the Ralan Arncliffe development. The financial advantage obtained from Wingate was the ability to draw down $96.1 million, but the drawdowns paid: $68.9 million. This represented the largest single loan facility.

29. The Statement of Facts is silent as to when purchasers were approached about the releasing their deposits to be used by the offender or how many purchasers were involved.

30. At paragraphs 101 to 112 of the Statement of Facts, there is reference made to the fact that in July 2019 what was known as the Ralan Group, which I interpret to mean companies in addition to those involved in this fraud, entered into administration.

31. The liquidator of the Ralan Group identified that the offender had long-standing shareholder loans with entities in the Ralan Group totalling over $19,000,000. It is not alleged that the funds drawn down as part of that amount or anything to do with any shareholder loans, forms any part of the offending conduct. I merely mention it by way of background, noting that in September 2019 the voluntary administration of the Ralan Property Group occurred. The offender was subsequently pursued for that amount of money by the liquidator. The amount was not forthcoming. In July 2021, the offender was declared bankrupt.

32. The Australian Securities and Investment Commission (ASIC) began its investigation into the offender on 4 November 2019 and I understand from the Statement of Facts that all times, Mr O’Dwyer was prepared to cooperate with ASIC in its investigations and resolution of this matter. I will take that into account shortly on sentence.

SENTENCING PRINCIPLES

33. I have taken into account the maximum penalty for the offence and considered the factors set out in s 3A of the Crimes Sentencing Procedure Act. I accept the offender’s submission that this is NOT a matter where specific deterrence is of great importance. I accept that given the fact that at 58 years of age and has no criminal record.

34. However, the application of the principles of punishment, general deterrence, accountability, and denunciation of his conduct remain important and I will take all those matters into account.

35. I accept the Crown’s submission that the difficulty in detection and the ease on which offences such as these can occur is such that the court must send a message that the punishment outweighs the potential financial benefit of the crime and that the community now views white-collar crime seriously, having regard to the fact that it is easy to commit and difficult to identify.

OBJECTIVE SERIOUSNESS

36. The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending.

37. While there is no single appellate case setting out all of the considerations the Court is to take into account when considering the objective seriousness of an offence under s 192E(1)(b) of the Crimes Act 1900 (NSW), cases such as R v Hawkins, [2] R v Mungomery, [3] R v Woodman, [4]  R v Finnie, [5] R v Todorovic, [6] R v Pont, [7] R v Mears, [8] R v Hill, [9] R v Murtaza, [10]  Stevens v R, [11]  and R v El-Rashid [12]  make it clear that the following considerations are relevant to the assessment of objective seriousness for offences of this nature:

    2. (1989) 45 A Crim R 430.

    3. [2004] NSWCCA 450.

    4. [2001] NSWCCA 310.

    5. [2002] NSWCCA 533.

    6. [2008] NSWCCA 49.

    7. [2000] NSWCCA 419.

    8. (1991) 53 A Crim R 141.

    9. [2004] NSWCCA 257.

    10. [2001] NSWCCA 336.

    11. [2009] NSWCCA 260.

    12. (unrep, 7/4/95, NSWCCA).

1. The advantage obtained by the offender;

2. whether the loss is retrievable;

3. the length of time over which the deception occurs;

4. motive;

5. the planning and sophistication; and

6. whether there is a breach of trust.

38. Although the offences were committed by the offender as part of a course of conduct spanning just over three years, that does not detract from the requirement to assess each offence individually, hence the Court’s request for what became Exhibit C.

39. Before addressing the six individual charges and making an assessment as to the objective seriousness of each of them, I will make some overall findings which apply to all of the charges as part of my determination of what the appropriate level of objective seriousness is.

40. The Crown submits that the offender’s conduct was intentional, rather than reckless, making his conduct more objectively serious. This was accepted in oral submissions by Senior Counsel for the offender and I agree with that characterisation.

41. In April 2015, when the offender first negotiated the loan facilities and began negotiating with purchasers regarding accessing, their deposits, the offender was in a position of control over the deals with the Lenders and purchasers. He was well aware that his conduct in entering into the side agreements with purchasers was contrary to his contractual obligations with the Lenders. Not only was he aware of the requirements for purchasers’ deposits to be held on trust, but he also actively deceived the Lenders into believing his companies had complied with that requirement during the audit phase.

42. Central to the deception was the presentation to Lenders by the offender during that audit phase of documents purporting to demonstrate that the buyers’ deposits were being held in a trust account as required. The documents presented by Mr O’Dwyer to the lenders was deliberately false and was both generated to provide false information and thus facilitating the deception.

43. The Crown described the documents as having been doctored. For reasons that were more semantic than anything else, the offender took issue with that description. It is hard to understand why. The reality was that the documents were ‘doctored’ by the Offender in order to present a false picture to the Lenders by deliberately omitting transaction schedules the fact that purchaser’s deposits had been withdrawn from the Ralan Group trust accounts. This is the heart of the criminality and presumably why Mr O’Dwyer pleaded guilty.

The Advantage obtained by the offender

44. On one view, the benefit obtained by the offender is the total sum involved in the loan facilities, being $251 million, but it was $132,369 million which was actually drawn down to finance the developments. Of course, the criminality related to the improper release of $25.831 million in trust accounts for the three developments.

45. Both parties addressed whether the offender’s conduct created a level of risk to the Lenders, a risk which was something the Lenders had sought to minimise, hence the requirement for purchaser’s deposits to be held on trust. The Crown submitted the court must send a message that risky and deceptive business practices must be deterred. Further, that this was a systemic fraud designed to deceive lenders of over $251 million, risking unsecured creditors and the benefit received by the offender was that he continued to have access to credit which allowed the business to continue.

46. In its written submissions, the Crown referred to the offender obtaining an indirect benefit of wages and earning totalling $19 million via the Ralan Group of companies. The fact that the Group was placed in liquidation “is an example of the risk that existed for businesses of this type”, was a submission made by the Crown.

47. Senior Counsel for the offender submitted that the fraudulent transactions did not result in any material benefit that flowed directly to the offender, rather the money was used towards the development costs. In oral submissions, Senior Counsel made the point that not only did the offender not make a material benefit, but that the Lenders were never truly exposed to any real risk of losing their investments due to the level of pre-sale purchases on the properties. Senior Counsel for the offender made much of the fact that no party has suffered any loss and that Lenders had either been repaid their loans or soon will be. Further, that the purchasers who lent their deposits on favourable commercial terms were all repaid. In summary, the offender’s position was that the Lenders and purchasers were satisfied, which again, is an important point when it comes to Dr Lianos’s psychiatric report.

44. The issue of whether there was a risk to the Lenders is, in my view, largely irrelevant when it comes to assessing the objective seriousness of the offending. The nature of these six offences is that the offender has dishonestly obtained a benefit. The reality is that the Lenders required certain steps to be taken before they would advance funds. Whether, as a matter of practicality, that requirement was unnecessary because of the level of deposits and presales, is irrelevant. The simple fact was that the offender gave undertakings to the Lenders and then dishonestly represented his compliance with that requirement, knowing full well that he was non-compliant.

45. The benefit received by the offender was that his businesses were able to undertake and complete the three developments. That is clearly a significant personal benefit to him, as well as well as the Lenders and the purchasers.

46. I accept the Crown’s submission that it was a figure of $132.3 million drawn down from the loan facilities and used by the offender, which was the direct financial advantage that he obtained. Often in fraud cases the size of the advantage or disadvantage in dollar terms becomes the focus of assessment for objective seriousness. However, while that is the ‘headline’ figure of the dishonesty, the offender did not personally obtain any advantage beyond simply allowing the developments to reach completion, which benefited himself, the Lenders, and purchasers.

47. In my view, the quantum of the benefit does not by itself automatically place the matter at the absolute highest end of objective seriousness, but clearly plays a substantial role in the Court’s ultimate conclusion that these are very serious offences.

Whether the loss is retrievable

52. There was no loss, so this consideration is irrelevant with respect to these offences. Had there been a loss, it would have been another charge.

Time

53. The length of time can be relevant to indicate the degree of planning and to show it was not an impulsive offence. The period of offending here was over three years from April 2015 until the last relevant conduct in June 2018, but the periods of criminality for each offence are substantially less. I will assess the objective seriousness of each offence based on the particular period for each sequence.

Motive

54. Often fraud offences are approached from the perspective of whether the offence was done for need or greed. This conduct is really neither. The Crown submitted that the offences were undertaken to keep the business running, preferring to risk the Lenders’ and purchasers’ interests over his own benefit. I do not accept that submission. While I agree the money was used to keep the developments going, the successful completion of the developments was in everyone’s interest, particularly the offender, the lenders and the purchasers. The motive was one of the offender wishing to see the completion of the developments.

Sophistication and planning

55. The fraud certainly involved on-going deception to the Lenders regarding the use of the deposits. The Crown submitted that the offender planned this particular fraud from the commencement of negotiations in around April 2015, the first date on sequences 1 and 2. That submission is not supported by the Statement of Facts and I do not find that fact proved beyond reasonable doubt.

56. However, given the offences at sequences 1, 2, 3 and 4 were complete before sequence 5 and 6 were committed, this does indicate to me, consistently with the Crown submission, that by the time the offences at sequence 5 and 6 were committed, the offender was confident that his dishonest conduct in sequences 1, 2, 3 and 4 could continue and that at that point, he deliberately entered into the contractual arrangements with the Lenders knowing he would breach them with respect to the use of purchaser deposits. His conduct at sequences 5 and 6 is therefore, in my view, more objectively serious.

57. Overall, though, the offences were unsophisticated as the criminality was as simple as giving an undertaking to Lenders not to do something, then breaching that undertaking with the purchasers via the manipulation of the ledgers during the audit period. I do not regard the level of sophistication and planning as particularly high.

Breach of trust

58. The Crown submits that the offender abused a relationship of trust that he had with the Lenders and that this is a matter the court would take into account when assessing the objective seriousness of his conduct. The Statement of Facts does not necessarily support this submission as there is no evidence regarding the nature of the relationship between the offender and the Lenders beyond what could be regarded as a normal client / banker relationship. The cases where, traditionally, a breach of trust has been regarded as exacerbating criminality, are where the victim of the offence has imposed trust on the offender. For instance, a client on his or her accountant, or solicitor, or someone defrauding an employer. In my view, there was no breach of trust in this matter along those lines.

59. Having dealt with those discrete considerations, I will now deal with objective seriousness for each of the offences.

60. The overall level of dishonesty and deception is the same for Counts 1, 2, 3 and 4 but slightly more serious for 5 and 6, because I find that of a time those offences occurred the offender did so knowing that he would ultimately breach the arrangements he had entered into with the lenders. The other distinguishing features between the sequences is the length of time over which they occurred, and the differing level of financial advantage obtained.

61. I make the following findings with respect to objective seriousness with respect to each of the six offences taking into account my earlier general findings about the offences.

Sequence 1

62. The offending conduct in this case was the longest, at 21 months, running between 17 April 2015 and 17 January 2017. He used $9.53 million in drawdowns. I find this offence falls above the mid-point of objective seriousness because of the length of time over which the offence occurred and the amount of money involved.

Sequence 2

63. The offending conduct in this case was the equal shortest at 2 months, running between 24 April 2015 and 3 July 2015. The amount involved of the drawdowns was $3.6 million. I find this offence falls below the mid-point of objective seriousness and is the least serious of the offences because of the short period of time involved and because of the small amount, relatively speaking, of this particular drawdown.

Sequence 3

64. The offending conduct in this case was for three months, running between 26 June 2015 and about 24 September 2015. In this instance the offender used $27.67 million in drawdowns towards the development, all of which was repaid, as it was with the others. I find this offence falls at the mid-range of objective seriousness because of the short period over which the offence occurred, but taking into account the fact that it was a larger amount of money used as the drawdown.

Sequence 4

65. The offending conduct in this case was just two months, running between 14 July 2015 and 19 September 2015. The amount involved was $6 million in drawdowns, all of which was repaid. I find this offence falls below the mid-point of objective seriousness because of the short period over which the offence occurred and again, relatively speaking, being one of the smaller amounts of the drawdowns.

Sequence 5

66. The offending conduct in this case was three and a half months, running between 19 February 2018 and 4 June 2018. By this point in time the first four offences had been successfully completed without consequence. In this instance, the offender used $16.65 million in drawdowns towards the development. Again, it was repaid. Taking into account matters I have already addressed and the specifics for sequence 5, I find this offence falls above the mid-point of objective seriousness. This is because it was over short period of time, but for a larger amount of money.

Sequence 6

67. The offending conduct in this case was only two months, running between 5 April 2018 and 6 June 2018. Again, by this point in time the first four offences had been successfully completed without consequence. This was the largest of the drawdowns at $68.9 million, all of which was repaid butI find this offence falls above the mid-point of objective seriousness because, while it was over short period of time, it is by far the largest amount of money relative to the other offences.

68. I have considered Mr O’Dwyers’ moral culpability in the circumstances of these offences and I do find that it is reduced due to either his mental health issues or childhood deprivation. I will deal with those issues in detail shortly.

AGGRAVATING CIRCUMSTANCES

69. With respect to the statutory aggravating facts at s 21A(2) of the Crimes (Sentencing Procedure) Act, the Crown submitted that the offending was a series of criminal acts as per s 21A(2)(m) and thus aggravated the offender’s conduct. The aggravating factor in s 21A (2)(m) is concerned with the situation where a single offence contains multiple criminal acts or victims. In my view that is not the territory the offender is in, in this situation because there is only one “victim” per sequence and while each sequence has multiple acts of dishonesty, each of those acts was facilitated only one benefit to the offender, and only obtaining one particular financial advantage per offence. On that basis, I do not accept the Crown’s submission with respect to that aggravating element.

70. The Crown submits that the conduct was part of a planned activity as an aggravating factor to be taken into account under s 21A(2)(n). I do not find this to be an aggravating factor because the very nature of the offence incorporates conduct of that nature.

STATUTORY MITIGATING FACTORS

71. With respect to the statutory mitigating factors as section 21A(3) Crimes (Sentencing Procedure) Act, the offender refers to the fact that there was no loss occasioned as a result of the offending conduct, a consideration under s 21A(3)(a). I accept that is a mitigating factor for these specific offences even though if there had been a loss, it would have been a different offence, i.e., causing a financial advantage. In my view, the two are not mutually exclusive. The offender in this situation could have obtained a financial benefit while also causing a loss but in this instance, he only obtained a benefit, so I accept the offender’s submissions in this regard.

72. I accept the offender does not have a prior criminal record and is a person of good character as per s 21A(3)(e) and (f). I also accept that the offender is unlikely to re-offend which is relevant to s 21A(3)(g), and that he has good prospects of rehabilitation and that he has shown remorse.

[REDACTED]

73. [redacted]

74. [redacted]

75. [redacted]

76. [redacted]

77. [redacted]

78. [redacted]

79. [redacted]

80. [redacted]

81. [redacted]

SUBJECTIVE MATERIAL

82. The offender placed before the court the following material relevant to his subjective case:

1. Report of Dr George Lianos, psychiatrist, dated 3 November 2023;

2. Affidavit of Joanne O’Dwyer sworn 7 December 2023;

3. Affidavit of Rachel O’Dwyer sworn 7 December 2023;

4. A letter of apology of offender written by the offender;

5. Testimonial of David Brook dated 6 November 2023;

6. Testimonial of Professor Matthew Kiernan dated 26 September 2023;

7. Testimonial of Vincent Del Zio dated 26 September 2023 and associated documents; and

8. Letter of assistance from liquidator Said Jahani, dated 1 March 2023.

83. The Court was also provided with a Sentencing Assessment Report dated 22 November 2023. I note the Sentencing Assessment Report is very positive and demonstrates that the offender has taken full responsibility for his criminal conduct and is assessed as a low risk of reoffending.

84. It was disappointing that Mr O’Dwyer did not give oral evidence at his sentence hearing. Obviously, I cannot use that fact against him in any way. While I have had regard to his letter to the court, and the other subjective material, his decision not to give evidence, even by way of affidavit, in which he expressed his remorse and contrition, his personal circumstances at the time the offences were committed and to give the Court the opportunity to learn more about his plans for the future, was a significant missed opportunity.

85. The three testimonials speak of the offender’s love of his family, his hard work, his integrity and, interestingly, his honesty. Conspicuous by its absence, is any reference to the six dishonesty offences before the Court or even an acknowledgement that the testimonials were being written in the context of a criminal sentence which was going to be imposed upon him. I do not place much weight on the letters, but I accept the offender is a person of good character and I will be taking that into account as part of the instinctive synthesis in sentence.

86. The offender wrote a letter to the Court which, amongst other things, addresses his remorse and embarrassment at the situation he finds himself in. The letter contains a number of facts upon which I will place some significance.

87. By way of background, Mr O’Dwyer was born in November 1965, making him 58 years of age now and between 50 years and 53 years at the time of the criminal conduct occurred. The letter refers to the fact that he and his wife, Joanne, moved from Ireland to Australia in 1990. It seems that his career in real estate began immediately as he obtained a job with a real estate and marketing company selling off the plan property to enable developers to obtain funding for their projects. Between 1993 and 2005 the offender and his wife had three daughters.

88. In 1996, he started his own real estate marketing company, which ultimately became the Ralan Group. Again, he was selling properties off the plan, enabling the developer to obtain funding from its banks to build their projects. This business was an enormous success and was eventually employing 20 people.

89. In 2008, the Ralan Group began its own developments and between 2008 and 2014, it completed 30 developments.

90. It was after 2014 that things began to go badly for the offender. He traces this to a development in St Leonards, where a builder known as Steve Nolan Construction went into administration, leaving many subcontractors out of pocket. This led to the Construction, Forestry, Mining and Energy Union (‘CFMEU’) becoming involved in a combination of intimidation, threats and public humiliation of the offender. I was taken to the case of Ralan St Leonards v Construction, Forestry, Mining and Energy Union [13] which set out the nature of the dispute and the orders which the offender obtained against the CFMEU on 6 May 2014. I will refer to this background as the ‘St Leonards development issues.’

    13. [2014] FCA 431.

91. The offender’s letter refers to the Ralan Group acquiring land on the Gold Coast to build six tower blocks in 2015. The first tower was pre-sold and construction of that tower was completed and delivered to its purchasers. The offender states that by 2017 and 2018, Ralan Group was in a position where, subject to financing, the second tower could be built.

92. The offender’s letter goes onto to refer to the fact that in 2019 he placed Ralan Group into voluntary administration and “had a complete breakdown.” The period of time during which the Gold Coast development was occurring overlaps with the time of the offending before the Court. The offender’s letter is completely silent about the three developments in Sydney which are now the subject of these criminal proceedings, and it is also silent regarding his state of mind at the time of the offences.

93. The letter goes on to state, “The last five years of my life have been torture.” Given the letter is dated December 2023, he is presumably referring to the period from 2018 onwards, not the period from 2015 to 2018 when the three Sydney developments and Gold Coast developments were proceeding. He goes on to state:

“I feel so much guilt and regret for the failing of Ralan. I tried to do everything within my power to prevent Ralan from failing, including engaging in the conduct that I have been charged with…”

and later,

“I know that my anxiety and depression had a lot to do with my decision to engage in the conduct I did.”

94. I have real trouble accepting either of those statements in the absence of sworn evidence. While I have no difficulty accepting that witnessing his successful business empire collapse would be enormously stressful and upsetting and that he would have done everything he could to save it, I do not accept that he could suffer anxiety and depression leading to these offences, while simultaneously successfully commencing and completing a substantial new development on the Gold Coast.

95. The offender’s letter also makes no connection between the events at the St Leonards development and this criminality.

96. I accept he is genuinely contrite and remorseful, which is consistent with the fact that he pleaded guilty at the first opportunity and cooperated with resolution of this matter with the authorities. Those matters establish that he is well on the way to successful rehabilitation which is, of course, in the community's interests.

97. With respect to the affidavit of Ms Joanne O’Dwyer, it refers to the enormous stress in 2014 associated with the St Leonards’ development that her husband was under. Ms O’Dwyer also refers to the Gold Coast development in 2015. Her chronology then jumps over the offending period and re-commences in 2019. Ms Joanne O’Dwyer states that it was 2019 when the offender’s mental health drastically deteriorated. I observe that this coincided with the Ralan Group entering administration. This observation by Ms O’Dwyer did not occur in 2014, nor during the period up until 2019. It was only after the Ralan Group’s administration.

98. The affidavit of Ms Rachel O’Dwyer, the offender’s 30-year-old eldest daughter, refers to her father becoming more subdued and spending more time in his room in 2014. She understood his business was struggling. Again, the chronology of events jumps the offending period and re-commences in 2019, when Ralan went into administration and at that point Ms O’Dwyer observes the significant stress its collapse caused the offender, including his talk of suicide.

99. The offender relied on the report of psychiatrist Dr George Lianos dated 3 November 2023. The report states that Mr O’Dwyer had no previous psychiatric history and that the first time he spoke to Dr Lianos was of 24 October 2019, which would place it three months after Ralan Group went into administration and a month after he received a demand to pay $19 million to the liquidator of that group.

100. Unusually for an expert report, this report discloses the fact that the doctor and the offender had met previously, prior to developing a professional relationship. They had met at functions organised by the school their daughters attended. Dr Lianos’s report refers to the fact that as at October 2019, the offender no longer presented as well as when he had seen him previously at those functions. He was now slightly dishevelled, thinner, and presenting like, “a desperate man” with “embarrassing dark thoughts.” Given that by September 2019 the offender was being pursued for $19 million, those observations are in my view hardly surprising. There were 179 sessions of psychotherapy between the pair.

101. With respect to the offender’s background, Dr Lianos states that the offender grew up in a family with alcohol abuse problems and with “chronic neglect and violence.” The offender expressed his remorse to Dr Lianos. Dr Lianos refers to the difficult financial circumstances that the offender found himself after 2014 with the St Leonards development issues.

102. At page 1 of his report, Dr Lianos refers to the offender’s actions were:

“driven by a strong need to minimise the losses to his clients.”

103. At page 4, Dr Lionis states Mr O’Dwyer felt distraught because of the unravelling of his business and states:

“the clients who had invested significant amounts of money in his project...He recognised that they would feel “bad” that he had let them down.”

104. At page 6 of the report, he refers to the CFMEU’s bullying and intimidation and states:

“Against a background of loss and trauma Mr O’Dwyer made six fraudulent representations to two financial institutions without being able to give proper consideration to the consequence of such actions.”

105. At page 7, Dr Lianos states that at the time the offences were committed:

“…Mr. O’Dwyer was suffering from severe complex post traumatic stress disorder dominated by overwhelmingly paralytic anxiety, severe panic attacks and the imminent threat of losing everything, including his business, his good reputation, his integrity and his ability to meet the expectations that people had of him whilst being the object of gross intimidation public humiliation extortion and threats to his own life the lives of his family and the life of his pet dog…notwithstanding how Mr O’Dwyer appeared to others, at the time when the offences were committed he was suffering from a severe mental illness that robbed him of his normal capacity to exercise, reason and [make] rational decision making. He was in a frozen terrified state attempting to prevent the unravelling of his life's work post up his mind was in trauma and in survival mode.”

106. He diagnoses the offender with post-traumatic stress disorder, with amongst other things, chronic anxiety, panic attacks, feelings of hopelessness, depression, recurrent intrusive thoughts and oceans of despair.

MORAL CULPABILITY

107. There are two paths to a reduction in moral culpability. One is that commonly referred to as “Bugmy factors”; by which the effects of profound childhood deprivation are to be given full weight in the exercise of the sentencing discretion, because such deprivation “may leave its mark on a person throughout life”, and “may compromise the person’s capacity to mature and learn from experience”. [14]

     14. Bugmy v the Queen [2013] HCA 37 at [43].

108. The additional path to reduction of moral culpability is where an offender’s mental health condition has a causal connection with the offence. In those circumstances it may affect both an assessment of moral culpability and objective seriousness. [15] The nature of the impairment, the nature and circumstance of the offence, and the degree of connection between them must all be considered. In such a case, objective seriousness might be reduced substantially, indicative in the conduct not being planned, premeditated nor without malice.

     15. DS v R; DM v R [2022] NSWCCA 156 at [96].

MENTAL HEALTH

109. Aside from issues of moral culpability, an offender’s mental health may be relevant on sentence. It may mean the offender is an inappropriate vehicle for general deterrence; custody may weigh more heavily and be more onerous; it may reduce or eliminate specific deterrence or conversely, such a person may present more of a danger to the community.

110. In reaching the conclusions I am about to set out, I have had regard to what the Court of Criminal Appeal has said in cases such as R v Qutami [16]   and R v Palu [17] , and I do not overlook what was said in Lloyd v R [18]  about Qutami. I also have regard to what was said in Devaney v R [19]  about not lessening the effect of the opinion of a professional psychiatrist, simply because they have not been cross-examined. 

     16. (2001) 127 A Crim R 369.

     17. (2002) 134 A Crim R 174.

     18. [2022] NSWCCA 18 at [43]-[47].

     19. [2012] NSWCCA 285 at [88].

111. As noted in Apulu v R [20]  when it comes to assessing mental illness and its role in the offender’s conduct, it requires the sentencing Court to make a discretionary decision in the light of the circumstances of the individual case, and in the light of the purposes to be served by the sentencing exercise. In Aslan v R [21] , Simpson J, as her Honour was then, stated at [34]–[35]:

“Too often, the mere fact of mental illness is advanced to this Court as necessarily calling for a more lenient sentence…There is, however, no presumption. It remains necessary for the sentencing court to examine the relevant facts in order to determine whether, in the specific case, the mental condition has the consequence contended for.

A central question (but not the only question) is whether the mental illness or other condition had a causative role to play in the commission of the offence or offences for which the offender is to be sentenced. Counsel who appeared for the applicant accepted that this was the principal issue in this case. If it is concluded that there was a causal connection, then the offender’s moral culpability may be reduced (see principle 1). That connection may also warrant lesser attention being paid to the need for the sentence to reflect considerations of general deterrence (principle 2)”

20. [2022] NSWCCA 244 at [125]–[126]

21. [2014] NSWCCA 114

112. I have closely scrutinised the doctors’ conclusions closely because they do not sit easily with the other evidence before the Court.

113. Notwithstanding Dr Lianos’s conclusion about a causal connection between the offending and the offender’s mental health, I do not find that the offending occurred at a time when the offender was suffering the degree of mental impairment now identified and referred to in the report. I say that for the following reasons.

114. Firstly, Dr Lianos only began seeing the offender after the collapse of the Ralan Group. He is not in a position to assess the offender’s state of mind in 2015 to 2018. I do not accept that he can retrospectively diagnose a condition which was causative of the offences, particularly when it is contradicted by other evidence. The fact is that the offender deliberately represented to Lenders a particular state of affairs concerning how purchaser deposits would be held by his companies commencing in April 2015. He gave undertakings not to create any side arrangements with other parties on six occasions over three years.This was no mere aberration. Not only is it not an aberration, it very much appears to be a highly rational and considered business model designed to access funds he was not otherwise entitled to access.

115. A case such as Hartman v R [22] was referred to by Senior Counsel of the offender as an example of the fact that an offender’s mental health can be taken into account in a mitigating way, despite the offence occurring over a long period of time. In Hartman, that period of time was 18 months. I have no difficulty accepting that broad proposition but the problem with Dr Lianos’s conclusions is that it flies in the face of the objective evidence.

     22. [2011] NSWCCA 261.

116. Several portions of Dr Lianos’ report refer to Mr O’Dwyer feeling concerned for investors, which I have set out, but this simply makes no sense in the context of the Statement of Facts and does not appear to relate to these offences at all. The Statement of Facts makes no reference to disgruntled investors, on the contrary, the developments were all successful, with the Lenders receiving their money and no purchasers out of pocket. Not only is the Statement of Facts silent regarding any potential loses to investors, the fact that the Lenders and purchasers were all satisfied at the end of the development was a significant part of the offender’s submissions before the Court. In other words, the references made by Dr Lianos which I have set out above do not appear to relate to the matters before me.

117. Further, the Crown submitted, and I accept, the chronology does not support Dr Lianos’ conclusions that the illegality only commenced due to pressure placed on the offender because of the St Leonards development. Paragraph 9 of Ralan St Leonards v Construction, Forestry, Mining and Energy Union [23] states that Steve Nolan Constructions went into liquidation in March 2014. However, paragraph 60of the Statement of Facts reveals the offender was accessing depositors’ funds at the end of December 2013. While the accessing of funds in December 2013 is outside the charge period, it demonstrates that using purchasers’ deposits was not something which only occurred after the St Leonards development issues, as Dr Lianos’s report would have the Court believe.

     23. [2014] FCA 431.

118. Further, the significant mental health decline described by both Mr O’Dwyer’s wife and daughter occurs in 2019, after the collapse of the Ralan Group, not during the charge period.

119. Dr Lianos places great weight on the 2014 CFMEU’s threats and intimidation. I have absolutely no difficulty accepting that that could cause post-traumatic stress disorder which could last for years, but I cannot reconcile the “severe mental illness that robbed him of his normal capacity to exercise, reason and [make] rational decision making” which Dr Lianos describes and in his view leads Mr O’Dwyer to dishonestly obtain a benefit from the Lenders, with the man who simultaneously successfully commences the developments of Ralan Cecil and Ralan Lamond, who bought enough land on the Gold Coast to build six tower blocks, commenced and completed one tower prior to 2017 and who in 2018 successfully undertook the construction of Ralan Arncliffe.

120. I have no difficulty in accepting Dr Lianos’ diagnoses and the account of a person who has gone from being a highly successful property developer to the absolute depths of despair due to the situation he found himself in and who suffer a large range mental health issues such as described, but I do not accept that those issues robbed the offender of his ability to exercise reason and make rational decisions with respect to the offences.

121. I reject the offender’s submission that his moral culpability and its role in the assessment of objective seriousness be reduced because of his mental illness that is now described. I will, however, take his current mental health conditions into account in finding that he will find custody more onerous. General deterrence remains critical in this matter, although as a discrete consideration, it is mitigated to some degree because of the offender’s on-going mental health problems as is specific deterrence.

CHILDHOOD DEPRIVATION

122. The offender submitted that his social circumstances were akin to the background of social deprivation and social disadvantage as a child. Notwithstanding his age and that the issues relied upon by the offender are now many decades ago, I certainly accept that it is well established that the disadvantaged background of an offender may mitigate the sentence that would otherwise be appropriate no matter how old they are.

123. In this instance, the offender relies upon his untested hearsay statements to Dr Lianos. Those statements are limited to his apparently having grown up in a family with alcohol abuse problems and “chronic neglect and violence.” I should say that is the extent of the description of the offender’s childhood deprivation set out in any of the subjective material. It is not mentioned in the offender’s letters, nor his family affidavits.

124. I place no weight on Dr Lianos statement that the offender had a “troubled family with significant deprivation, abuse and trauma” in the absence of sworn evidence from the offender to that effect. I do not accept that there has been childhood deprivation such as to lessen the offender’s moral culpability.

125. The offender has run a series of highly successful businesses since 1996, including a property development business since 2008. In his letter the offender stated, “…by 2014, things in my life were going extremely well.” The offender’s wife, Ms Joanne O’Dwyer, refers to the offender growing a successful business which allowed the family to live comfortably. Dr Lianos describes him as a man who had, “forged a path where he had become a significant participant in the property development arena in NSW and Queensland.”

126. The fact that he now finds himself in a position where he is convicted of fraud does not appear to me to have any connection with any issues of childhood deprivation which he may have suffered, and in my view it does not reduce his moral culpability.

DELAY

127. I have been asked to take into account the delay between the offences occurring, noting the last date is 14 June 2018 and the charging during June 2023. I accept that he was under a “state of uncertain suspense” experienced as a result of the delay. A delay of five years, even with the considerations set out in Exhibit 2, being ASIC’s email with the chronology of certain events, is lengthy.

128. Where an offender experiences a delay, and the “uncertain suspense” is a matter that an offender is entitled to have taken account of on sentence. The offender must, of course, have established that fact on the balance of probabilities. In this instance, I do accept that the offender has established the fact he has suffered uncertain suspense based on a combination of his letter provided to the Court, the psychiatrist’s report and the affidavit from his wife and eldest daughter.

REHABILITATION

129. The offender is supported by his wife and daughters and has demonstrated by the references, he has a network of prosocial peers. He obviously has an excellent work history which bodes well for his prospects of rehabilitation. This experience has been a humiliating one and the offender is not currently working. I have also taken into account the Sentencing Assessment Report. In my view, he has excellent prospects of rehabilitation.

EX CURIAL PUNISHMENT

130. The Court has been asked to take into account “extra-curial punishment”, that is, some detriment experienced by an offender outside the court process. Here the offender relies on public humiliation.

131. It is accepted in New South Wales that where public outrage over a matter has a physical or psychological effect on the person, it may properly be considered by the sentencing court. The offender was obviously vilified by the CFMEU, that was in 2014 and not because of the criminal offences that are now before the Court. No other evidence was placed before the Court on this point, so I reject this as a basis for mitigation. In any event, for general deterrence to have any meaning, there must be some public knowledge of the offence and its outcome which could adversely affect the offender.

SPECIAL CIRCUMSTANCES

132. I am going to find special circumstances on the basis that this is the offender who is already suffering from a mental condition. I also take into account his age and the fact that it is his first offence. I will impose a non-parole period of 60%.

TOTALITY

133. I have had regard to the fact that there will be a large measure of accumulation reflected in the aggregate sentence I am going to impose. This is because, although, each offence was committed over a discrete period, with separate documents and fraudulent conduct and across three projects, the offences involved identical methodology and the same two Lenders. In determining the extent of accumulation, I have had regard to the principle of totality.

DETERMINATION

134. The Court has been referred to sentences imposed in a number of other cases by both the Crown and the offender which I have read and considered. I am not going to summarise them, but of course it is necessary to bear firmly in mind the limitations which are placed on material of that kind. The range of sentences that have been imposed in past cases do not fix the boundaries for sentence. Fundamentally, consistency is what is being sought in sentence and the application of relevant legal principles, not numerical or mathematical equivalents.

135. It was conceded by Senior Counsel for the offender that section 5 of the Crimes (Sentencing Procedure) Act had been crossed. Senior Counsel’s submission was that once all of the matters before the Court had been considered, particularly available sentence discounts, the sentence imposed should be three years or less and an intensive correction would be appropriate. I have certainly given that submission significant consideration. Ultimately though, I have rejected it.

136. In my view, these are offences which do warrant the offender to actually serve time in custody. This is because of the objective seriousness of the offences, taking into account the enormous size of the financial advantage received by the offender, even when consideration is given to the fact that the money was spent appropriately on construction costs and there was no loss to any party. The reality is that the Lenders were entitled to believe that the offender would honour his contractual undertakings and, rely on the documents provided to them by the offender. The offender’s conduct was an ongoing, deliberate and calculated fraud designed to benefit himself through deliberately misrepresenting his companies trust account to its Lenders, not once but on six occasions over three years.

137. The head sentence I am going to impose exceeds 3 years, so an intensive correction order is not available. I am of the opinion that this is an appropriate matter for the Court to invoke s 53A of the Crimes (Sentencing Procedure) Act and impose an aggregate sentence in relation to all of the sequences. With respect to the indicative sentences, the sentences I would impose with some rounding is as follows:

1. Sequence 1: the indicative sentence is 2 years and 7 months' imprisonment. But for the discount, the sentence would have been 4 years, 6 months.

2. Sequence 2: the indicative sentence is 1 year and 5 months' imprisonment. But for the discount, the sentence would have been 2 years, 6 months.

3. Sequence 3: the indicative sentence is 2 years and 3 months' imprisonment. But for the discount, the sentence would have been 4 years.

4. Sequence 4: the indicative sentence is 2 years and 3 months' imprisonment. But for the discount, the sentence would have been 4 years.

5. Sequence 5: the indicative sentence is 2 years and 8 months' imprisonment. But for the discount, the sentence would have been 4 years, 9 months.

6. Sequence 6: the indicative sentence is 3 years and 1 months' imprisonment. But for the discount, the sentence would have been 5 years and 6 months.

138. I impose an aggregate sentence of 4 years imprisonment. Taking into account my finding of special circumstances, the non-parole period will be 60% of this, being a non-parole period of 2 years and 4 months.

139. I make the following orders:

140. Mr O’Dwyer, for each of the six offences for which you entered pleas of guilty you are convicted.

141. That sentence is to commence today, 2 February 2024 and expire on 1 February 2028. The non-parole period expires on 1 June 2026, which is the first date you are eligible for release.

142. The offender will be eligible for release to parole at the expiration of the non-parole period. The non-parole period is 60% of the total sentence, which indicates a finding of special circumstances. 

143. I am satisfied the sentence imposed is the least period I consider the offender should serve and ensures proper consideration of the objectives of sentencing, the objective gravity of the offence and all matters personal to him.

144. Mr O’Dwyer, whether you are released to parole is a matter for the Parole Authority. No doubt it will take into account how you conduct yourself whilst in custody in determining the appropriate release date.

**********

Endnotes

Amendments

20 February 2024 - Coversheet – corrected case name

Paragraph 69 - removed hyperlink

Decision last updated: 20 February 2024