R v TOMAIUOLO - [2007] SASC 34

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Criminal Appeal)
R v TOMAIUOLO
[2007] SASC 34
Judgment of The Court of Criminal Appeal
(The Honourable Chief Justice Doyle, The Honourable Justice Debelle and The Honourable Justice Sulan)
6 February 2007
CRIMINAL LAW - APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - APPEAL BY CONVICTED PERSONS - APPLICATIONS TO REDUCE SENTENCE
Appeal against sentence - appellant pleaded guilty to four counts of forgery contrary to s 235 of the Criminal Law Consolidation Act 1935 and four counts of uttering under the Common Law - for these offences, the appellant was sentenced to three years imprisonment with a twenty one month non-parole period - the appellant also pleaded guilty to five counts of making a false statement contrary to s 1308(2) of the Corporations Act 2001 and to one count of acting in contravention of a disqualification from managing a corporation, contrary to s 206A(1)(b) of the Corporations Act 2001 - for the offences contrary to s 1308(2) of the Corporations Act 2001 the appellant was sentenced to two weeks imprisonment for each offence, and for the offence contrary to s 206A(1)(b) the appellant was sentenced to three months imprisonment - the appellant argued that the sentences were manifestly excessive and the factual findings upon which he was sentenced were incorrect - appeal dismissed - held, the sentence imposed for contravening s 235 of the Criminal Law Consolidation Act 1935 and for the offences of uttering were within the range of penalties for these offences considering the planned, premeditated and repeated nature of offending and the sentences imposed for contravening s 1308(2) and s 206A(1)(b) of the Corporations Act 2001 were well within the sentencing discretion of the sentencing court given the appellant's conduct and antecedents.
Criminal Law Consolidation Act 1935 s 235; Corporations Act 2001 (Cth) s 1308(2), s206A(1)(b); Criminal Law (Sentencing) Act 1988 s 18A; Crimes Act 1914 (Cth) s 4J(2), s 19(1)(b), referred to.
R v Davies (1996) 88 A Crim R 226; R v DuBois (2004) 88 SASR 304; R v Cavanagh [1999] SASC 418; R v Suri [2004] SASC 80, considered.

R v TOMAIUOLO
[2007] SASC 34
Court of Criminal Appeal: Doyle CJ, Debelle and Sulan JJ

DOYLE CJ: I would dismiss the appeal against sentence. I agree with the reasons given by Sulan J.
DEBELLE J: I agree with the substance of the reasons of Sulan J. I too would dismiss the appeal. The sentence was in all the circumstances very fair, if not merciful, particularly as the appellant’s victims were often unsophisticated and vulnerable. While the amounts involved were not unduly large, there is a need for general as well as personal deterrence when sentencing for offending of this kind. The errors to which the appellant pointed were not of a kind which requires this Court to interfere with the sentence, which was well within the bounds of a proper sentence for this conduct.
SULAN J
Introduction
The appellant pleaded guilty to four counts of forgery, contrary to s 235 of the Criminal Law Consolidation Act 1935 (“the CLCA”) and four counts of uttering, under the Common Law. The maximum penalty for the offence of forgery is fourteen years’ imprisonment. The maximum penalty for the offence of uttering is at large.
The appellant acknowledged a breach of bond. On 14 August 2001, at the Holden Hill Magistrates Court, he had been sentenced to four months’ imprisonment for the offence of assault. The sentence was suspended upon him entering into a bond to be of good behaviour for twelve months. The offences of forgery and uttering all took place between 19 November 2001 and 7 August 2002 and, therefore, constituted a breach of bond. The bond was estreated and the sentencing Judge revoked the suspension of the sentence.
On 26 September 2006, the appellant was sentenced by a District Court Judge, pursuant to s 18A of the Criminal Law (Sentencing) Act 1988 (“the CLSA”) to three years’ imprisonment for the offences of forgery and uttering. The sentencing Judge ordered that the four months’ imprisonment for assault be served cumulatively upon the sentence of three years. The sentencing Judge imposed a non-parole period of twenty one months, the sentence to be served from 30 June 2006, the time at which the appellant was taken into custody.
The appellant also pleaded guilty to five counts of making a false statement contrary to s 1308(2) of the Corporations Act2001 and to one count of acting in contravention of a disqualification from managing a corporation, contrary to s 206A(1)(b) of the Corporations Act 2001. In respect of these offences, the District Court Judge imposed the sentences sitting as a magistrate. The maximum penalty for a breach of s 1308(2) of the Corporations Act 2001 is a fine of $11,000 or two years’ imprisonment, or both. However, because the District Court Judge was sitting as a magistrate, the maximum penalty was reduced to $6,600 or twelve months imprisonment, or both.[1] The maximum penalty for a breach of s 206A(1)(b) of the Corporations Act 2001 is a fine of $5,500 or one years’ imprisonment, or both.
[1] Section 4J(3) of the Crimes Act 1914.
The appellant was sentenced under the Crimes Act 1914. In respect of the acts which breached s 1308(2), he received a sentence of two weeks’ imprisonment for each offence and, in respect of the offence which was contrary to s 206A(1)(b), he was sentenced to three months’ imprisonment. All the sentences for breaches of the Corporations Act were to be served concurrently. Section 19(1)(b) of the Crimes Act 1914 provides that where a Court has imposed a sentence or sentences for a State offence or offences and has stipulated a non-parole period, then any sentence imposed for a Federal offence or offences is to commence at the end of the non-parole period. The concurrent sentences for breaches of the Corporations Act were to commence at the expiration of the non‑parole period of twenty one months imposed for the State offences. The appellant has appealed against all the sentences imposed.
Grounds of appeal
The grounds upon which the appellant appeals are that the Judge made errors regarding the factual circumstances relevant to the offences, and that the sentences imposed were manifestly excessive.
Background facts
The State offences relate to four occasions on which the appellant forged and uttered a statutory declaration to support an application for a bank loan.
The appellant was the sole director of two companies, Tommy Nominees Pty Ltd (“TNL”) and Power Marketing Options Pty Ltd (“PMO”). The companies dealt in real estate and provided financial brokering services.
The appellant had met and become friends with a Mr John Silcock, who wanted to purchase a property. In mid-November 2001, PMO contracted to buy a property at 17 Third Avenue, Ascot Park, for a sum of $145,000. The contract was signed in the name of PMO and/or Nominees.
The appellant persuaded Silcock that the property was a good investment and Silcock, therefore, agreed to purchase it. Silcock did not have sufficient funds. The appellant informed him that he would arrange the finance. The appellant had suggested to Silcock that Silcock subdivide the property and, from the proceeds of sale of the subdivision, they would share any profit between them equally.
A loan application was made by Silcock to the Commonwealth Bank of Australia (“the CBA”) in Melbourne on 19 November 2001. The appellant completed a loan application form seeking a loan of $169,200.00 which was then signed by Silcock. The property had been sold by PMO to Silcock for an amount of $169,000. The loan application indicated that the property was being purchased by Silcock through Greenwith Real Estate. That representation was false. The application also stipulated an inflated purchase price of $211,500, and that no contract had been signed and no formal settlement date existed. The application indicated that the purchase of the property by Silcock would be partly financed by a gift of $52,000. These statements were false.
On 5 December 2001, the appellant presented a contract for the purchase of the property for $211,500, to Silcock, who signed it. The appellant informed Silcock that, although he would only be paying $169,000 for the property, it was necessary for the bank that the contract stated that the purchase price was $211,500. Silcock, who did not have any background in commercial dealings, accepted the appellant’s representation that what was occurring was acceptable.
The appellant forged a statutory declaration in the names of Bernard and Joyce Withers, indicating that they had agreed to provide Silcock with a non-repayable gift of a minimum of $42,000, plus all government fees and the cost of searches for the purchase of the property. This document was a forgery. Silcock did not know any people by the name of Bernard and Joyce Withers. The address on the statutory declaration was false.
The document was submitted to the CBA, which approved the application on 19 December 2001. The bank would not have approved the loan had it known the correct contract price. The lending guidelines of the CBA did not permit a loan to be given for an amount which exceeded 80 per cent of the purchase price.
At settlement, a cheque in the sum of $169,200 was received from the CBA. Of that amount, $145,000 was paid on account of the original purchase price. After payment of all fees and expenses, the amount of $21,401.74 was paid to the appellant.
The appellant told Silcock that those monies would be used to subdivide the block. The block was subdivided. The costs associated with the subdivision were paid by the purchaser of the subdivided land. The appellant had received the additional sum of $21,401.74 without accounting for it to Silcock. He told Silcock that the monies would be used to pay for the subdivision of the block. Although a profit was made from the transaction, it was only made possible by the forgery and uttering of a statutory declaration by the appellant. Although it did not lose any money, the CBA had been placed at an unacceptable financial risk.
The second series of transactions occurred in October 2001. Ms Baugh read a notice in the newspaper advertising houses for rent, with an option to buy. She made contact with the appellant who informed her that his name was John, and encouraged her to purchase a property at Hope Valley. She told the appellant that she did not have a deposit for a house. He indicated that there was a way that he could do it. The appellant gained Ms Baugh’s confidence and told her that he could inflate the purchase price to the bank, which would then lend the full amount of the actual purchase price. Ms Baugh did not fully understand the implications of this proposal. The property in question had been purchased by PMO for $125,000.
The appellant sent an application for finance to Ms Baugh, who signed it and returned it to him. He then completed the application, which indicated that the purchase price was $224,500, which was false. The application sought a loan of $179,600. The appellant advised Ms Baugh that it would be necessary for her to obtain a statutory declaration from a member of her family which evidenced a gift of $45,500, being the difference between the $179,000 and $224,500, the later being the amount the bank had been told was the purchase price. She was not prepared to do as he asked, and he eventually told her that he had a family member who could sign the declaration. He gave a somewhat convoluted explanation to her about how the loan would be treated. He forged a statutory declaration in the name of a Miriam Peters, which indicated that she would gift $45,000 to Ms Baugh for the purchase of the property. Ms Baugh did not know anyone by the name of Miriam Peters, nor did she receive a gift in that amount.
The CBA initially approved the loan, but later refused it, as they did not think the property was worth the stated purchase price. Ms Baugh spoke to the appellant, who then procured Ms Baugh to sign an application for a loan from AMP Banking (“AMP”). He provided a finance broker with a copy of the forged statutory declaration, and told the broker that the money was coming from Ms Baugh’s mother in the United Kingdom. AMP approved a loan in the sum of $179,000. The loan would not have been approved if AMP had known the statutory declaration was forged. The settlement occurred on 22 February 2002, with the result that Ms Baugh was left with a mortgage for $179,000.
The next series of events occurred in 2002, when a Ms Lynch, who was living in Sydney, was introduced to the appellant, who advised her that he would be able to arrange finance for the purchase of an investment property, and that the entire purchase price could be borrowed. Although she had money for a deposit, he advised her that it would be unnecessary.
The appellant arranged for Ms Lynch to complete a PMO loan details document. He explained to her that she and her father should enter into a contract on a property for the advertised purchase price, the property to be purchased in her father’s name, and she could then enter into a contract with her father for a higher price, which would enable her to borrow the full amount of the loan. She and her father inspected a property at Salisbury North. Her father signed a contract in the sum of $78,000. He had no intention to purchase the property himself. Ms Lynch then signed a second contract, purchasing the property from her father for the sum of $102,000.
Ms Lynch returned to Sydney. She eventually received a telephone call from a bank, which initially indicated that the loan had been approved but later advised that it had not been approved. She advised the appellant, who suggested that they try another financier. Ms Lynch did not wish to proceed and she made her own arrangements for financing.
In the course of making the application, the appellant had forged Ms Lynch’s signature on an application form in her name. The application proceeded on the basis that the purchase price for the property was $102,000 when, in fact, it had been purchased by Ms Lynch’s father for $78,000. Ms Lynch had paid the appellant a sum of $700 in relation to the application fee. This money was never returned to her.
The next series of transactions occurred when a Ms Hefford met the appellant through personal columns in the newspaper. He was then describing himself as “Keith”.
The appellant arranged for Ms Hefford to sign a PMO form authorising him to act as her agent in any loan negotiations. On 5 August 2002, PMO signed a contract for premises at Gilles Plains for $145,000. He advised Ms Hefford that PMO had purchased the property for $140,000, and offered to on-sell it to her. She then entered into a contract to purchase the property. She wrote a cheque to the appellant for $7,000 deposit.
The appellant had forged Ms Hefford’s signature on a second contract showing the purchase price to be $175,550. That contract was submitted to Australian Central Credit Union (“ACCU”) to obtain finance. It was a forged contract. Had ACCU known that the signature was forged, or that the contract price had been grossly inflated, they would not have entered into the transaction. For other reasons, the transaction did not proceed. There is some dispute about how much profit the appellant made from this transaction, but it was at least $3,500.
The Commonwealth offences
The appellant pleaded guilty to five counts of making a false statement, contrary to s 1308(2) of the Corporations Act 2001.
The first of three statements were made on 9 August 2002. The appellant lodged with the Adelaide office of the Australian Securities and Investments Commission (“ASIC”) two forms signed by him notifying a change of address, and a third form, being the annual return of a company. These forms contained false information.
On 14 October 2002, a further two forms were completed, one notifying a change of director of the companies, TNL and PMO and another notifying a change of address. The person shown to be the director turned out to be a fictitious person.
The offence of contravening s 206A(1)(b) relates to the appellant managing the company TNL whilst an undischarged bankrupt, by purporting to purchase a residential property, on behalf of TNL, for $87,000.
The appeal
Counsel for the appellant submits that the sentencing Judge made factual errors. She submits that the Judge erred in concluding that, in respect of the Silcock transaction, the appellant had shared in the profit of the subdivision. The State DPP agrees that this was an error. The error was contained in the outline of facts put before the sentencing Judge. The error was ascertained by counsel, and a letter was prepared which outlined the error. Counsel intended to tender the letter to the sentencing Judge, but it was overlooked and the sentencing Judge relied on the erroneous factual summary provided to him.
As to the Hefford transaction, the sentencing Judge referred to a profit of $7,000 being made by the appellant by not returning the $7,000 deposit. There is no evidence that that was so, and it is claimed by the appellant that that profit was not made. The appellant admits that he received approximately $3,000 from Ms Hefford for fees and costs, which was never returned to Ms Hefford. The respondent does not accept the error. The respondent concedes that Ms Hefford, in her victim impact statement, refers to having paid $3,000 to the appellant for the purchase of searches and to speed up the loan, but makes no mention of not having had the $7,000 deposit returned to her. There is doubt about what occurred. There is no evidence which establishes that it was not returned. On the material before the sentencing Judge, there was insufficient evidence for the Judge to have so concluded. I accept that Ms Hefford lost approximately $3,000 as a consequence of the appellant’s conduct, and the appellant should have been sentenced on that basis.
The third allegation is that the sentencing Judge was in error by concluding that the profits over the difference in purchase price by the appellant were fraudulent. The sentencing Judge said that the transactions and profit that the appellant made were only made possible by the appellant’s fraudulent conduct in forging and uttering the statutory declaration. The characterisation of the transaction was correct. The profit made from the Silcock subdivision was made possible only because the original purchase was completed by the provision of funds from the CBA, these funds having been approved based upon false and forged documentation. I reject the submission in respect of the third error.
Were the sentences manifestly excessive?
Counsel for the appellant submits that, having regard to the factual errors, and having regard to the overall circumstances, the sentences were manifestly excessive. I agree that the sentencing Judge was in error in respect of the profit made on the subdivision of the Silcock property. As to the loss suffered by Ms Hefford, I accept that the appellant should have been sentenced on the basis of a loss of $3,000, not $7,000.
Counsel for the appellant submits that there was very little actual loss caused as a result of the appellant’s conduct. She submits that the amount of loss suffered by victims of a fraud is a significant factor in the determination of penalty. She submits that the sentencing Judge gave too much weight to the loss, or potential loss, suffered by victims. It is further put on behalf of the appellant that an important factor in any case of fraud is the relationship between the offender and the victim. If the offender is in a position of trust, or has a fiduciary duty to the victim, or where the victim is vulnerable or is not in a position to protect themselves, that will aggravate the conduct.

In this case, it was put that lending institutions have the ability, and are required, to carefully assess values and to have in place systems which identify over-inflated values. That submission overlooks a number of matters. First, the fact that a victim is a lending institution is not a mitigating factor. Secondly, the appellant’s conduct involved unsophisticated and vulnerable persons who did not understand the workings of the commercial world. They relied upon the appellant, who advised them. In their naivety, they signed either blank or false documents, thinking that this kind of conduct was acceptable. The appellant misled them and put them at risk through them borrowing an amount which might exceed the value of the property purchased. If the lending institutions had called in the loans and the properties were sold and there was an outstanding debt remaining, then the buyers who the appellant misled could be liable for any shortfall. Thirdly, the appellant’s conduct created an unacceptable risk to the financiers. This was known to the appellant. Fourthly, the clients of the appellant were, at the very least, embarrassed and could themselves have been investigated and even prosecuted for their role in the transaction.
Counsel for the appellant pointed to the fact that little loss had been suffered and, in one case, the person who dealt with the appellant had profited. In my view, that is not a factor of mitigation. Any actual loss suffered from fraudulent conduct is, of course, relevant.
The appellant has poor health. He has a history of depression and suffers symptoms of anxiety. The appellant has prior convictions dating back to 1990. He has convictions for dishonesty offences, although he has not been convicted of a dishonesty offence since 1991. He is 47 years old, and has accounting qualifications. He was working as a financial broker at the time of the offending.
The State offences are serious offences. Financial institutions must be able to rely on documents submitted by financial advisers. The presentation of forged documents and false statutory declarations is serious offending.
In considering penalties for this type of offending, the Court must have regard to general and personal deterrence.[2] Those who deal professionally with finance providers must be aware that the use and presentation of false documentation will result in severe penalty.
[2] R v Davies (1996) 88 A Crim R 226; R v DuBois (2004) 88 SASR 304; R v Suric [2004] SASC 80; R v Cavanagh [1999] SASC 418 [21].
The gravamen of the offence of forgery and uttering is in the forgery and use of documents to gain a financial advantage. The ongoing impact of the document and the nature of the document forged are relevant when considering the gravity of the offence. Forging a statutory declaration, which is a document upon which people involved in commerce rely, is a serious breach of the law.
This offending was planned and pre-meditated. The appellant took advantage of vulnerable people to convince them to assist him in perpetrating a systematic fraud upon various financial institutions. The offending was repeated. It was not isolated. In my view, the sentence of three years’ imprisonment for the offences was well within the range of penalties for this offending. I would not interfere with the sentence, even having regard to the errors identified.
The Federal offences
Counsel submits that a sentence of imprisonment for the offending was manifestly excessive, and that fines are an appropriate penalty for the offences.
The offence of managing a corporation whilst being disqualified from so doing related to the appellant purchasing a property on behalf of TNL. The company defaulted by not paying the deposit.
The purpose of the section is to ensure that persons who are undischarged bankrupts do not manage corporations or cause corporations to enter into arrangements with third parties. The section was enacted for the protection of individuals or bodies corporate which enter into commercial transactions with corporations. Commercial dealings rely on the trustworthiness of those who enter into transactions and upon the ability of those who enter into the transactions to be able to meet their obligations. A person who is an undischarged bankrupt is unable to enter into transactions because his affairs are in the hands of a trustee in bankruptcy. The conduct of the appellant was a deliberate breach of the probation. He ignored the restrictions placed upon him. There were no mitigating factors. Given the appellant’s conduct and antecedents, a sentence of imprisonment is well within the sentencing discretion of the sentencing court.
As to the breaches of s 1308(2), the provision of accurate information to ASIC is fundamental to ensure that those who deal with corporations can do so in the knowledge that they have current and accurate information about the directors and officers of the company, and the address of the company with which they deal. Failure to provide accurate information is serious offending. There is no suggestion that the failure to provide accurate information was inadvertent or due to negligence. The inference to be drawn is that the appellant deliberately misled ASIC by filing false returns.
It cannot be said that a sentence of imprisonment for these offences is manifestly excessive. A sentence of two weeks’ imprisonment was well within the sentencing range for these offences. Imprisonment for these offences is not common but is appropriate in some cases, of which this is one.
Conclusion
The overall sentence and non-parole period were appropriate in the circumstances.
I would dismiss the appeal.