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[2017] VSCA 384
General information, not legal advice.
Court of Appeal (Vic)
2017-12-20
Mr J, Maxwell P, Weinberg JA, Priest JA
Original judgment source is linked above.
CRIMINAL LAW - Appeal - Conviction - Obtaining financial advantage by deception - Applications for bank finance - False statements about amounts receivable - Documents prepared by finance manager - Whether applicants knew of falsehoods - Whether finance manager's evidence credible - Reasonably open to jury to convict - Applications refused.
CRIMINAL LAW - Appeal - Conviction - Attempt to obtain financial advantage by deception - Application for bank finance - False statements about amounts receivable - Bank detected anomaly in financial statements - Finance manager gave false explanation - No further information provided - Whether conduct merely preparatory - Application refused - R v Andreola [2002] VSCA 92; (2002) 131 A Crim R 259 followed.
CRIMINAL LAW - Appeal - Sentence - Attempt to obtain financial advantage by deception - Sentenced after trial to 5 years' imprisonment - Sentenced as continuing criminal enterprise offender - Applicable maximum penalty doubled to 10 years - Amount applied for was $53 million - Applicant was owner and controller of corporate group - Sentence reasonably open - Application refused - Sentencing Act 1991 pt 2B.
1 The first applicant ('SI')[1] was found guilty by a Supreme Court jury of 11 charges of obtaining a financial advantage by deception, and one charge of attempting to obtain a financial advantage by deception. The jury acquitted him of two other charges of obtaining a financial advantage by deception. He was sentenced to 11 years' imprisonment, with a non-parole period of 7 years.
2 The second applicant ('BB')[2] was convicted by the same jury of two charges of obtaining a financial advantage by deception, and one charge of attempting to obtain a financial advantage by deception. The jury acquitted him of one other charge of obtaining a financial advantage by deception. He was sentenced to 6 years and 5 months' imprisonment, with a non-parole period of 4 years.
3 Each applicant now seeks leave to appeal against his convictions. SI also seeks leave to appeal against the sentence imposed on the attempt charge. For reasons which follow, we would refuse each application.
4 The offences arose out of representations made to financial institutions to induce them to provide lending facilities, and hire purchase finance, to the Viking Group of Companies ('Viking Group'), of which SI was chief executive officer and BB was general manager at the relevant time. At the trial, the charges were treated as belonging to two groups. The first comprised charges relating to obtaining financial lending facilities (the 'finance charges'); and the second comprised charges relating to the obtaining of hire purchase finance in respect of equipment purchased by the Viking Group (the 'equipment charges').
5 The finance charges were founded on an alleged joint criminal enterprise involving SI, BB and BB's wife, Loukia Bariamis ('LB'). SI was alleged to have committed the equipment charges himself although, in the course of the trial, it became common ground that LB was heavily involved in the commission of those offences.
6 In 2013, LB pleaded guilty to three charges of obtaining a financial advantage by deception from the Commonwealth Bank of Australia (the 'CBA'), those charges being the equivalent of charges 6, 8 and 14 in the indictment in this case. On her plea, LB gave an undertaking to cooperate with the prosecution in this matter and to give evidence in accordance with statements made by her to the police, if and when called upon to do so. She had earlier pleaded guilty, in the County Court of Victoria, to charges arising from the tax fraud described in the next paragraph.
7 LB was a certified public accountant, a registered auditor, and a tax agent. From the early 1990s, she was a member of the accounting firm Greenfield Fox. During that time, SI became a client of hers. In 2004 and 2005, LB perpetrated an extensive fraud on the Australian Taxation Office ('ATO'). For that purpose, she entered the tax portals of a number of clients of Greenfield Fox, altered the Business Activity Statements that had been entered on those portals, and by that means obtained the payment to her of substantial taxation refunds, totalling $1.8 million.
8 SI was one of the clients whose tax portals she manipulated in that way. Her criminal activities were entirely unknown to her clients. She took elaborate steps to conceal her fraudulent activities from her husband, her family, her business partner, and her clients. Ultimately, her fraud was detected by the Australian Tax Office in June 2005. After a very lengthy investigation, she was charged with tax offences. She was sentenced by a County Court judge in 2013.
9 At all times SI remained trusting of, and particularly loyal to, LB. After her offending was discovered, she led him to believe that her wrongdoing was no more than a transgression. As an act of loyalty to her, he declined to assist the Australian Tax Office in its investigation of her.
10 In 1999, SI had commenced to work with a company called Viking Fleet Service. He is, by training, a mechanic. Viking Fleet Service was then a relatively small business, involved in the repair of trucks and prime movers. In due course, SI entered into an agreement with the owner of that business to purchase it. The process by which he completed the acquisition proceeded over a period of years. Ultimately, he completed the purchase in 2007. In the meantime, while at Greenfield Fox, LB had assisted SI to refinance with CBA the lending facilities that had been provided to that business by the Australian and New Zealand Banking Corporation.
11 In due course, the business of Viking Fleet Service expanded. During that time, LB commenced to work for SI in an accounting capacity. In 2007, SI entered into negotiations to purchase Perth Freightlines Pty Ltd ('Perth Freightlines'). That business was involved in long haul and interstate freight services. The business of Perth Freightlines was substantially larger than the business of Viking Fleet Service. The negotiations to purchase that business were quite protracted. Ultimately, the purchase was settled on 8 August 2008.
12 In order to finance the purchase of Perth Freightlines, Viking Fleet Service borrowed $5 million from the CBA. LB assisted SI to obtain that finance. The application for finance was based on accounting and tax documents prepared by LB for a number of entities associated with Viking Fleet Service. In order to conceal the fact that she had compiled those documents, LB prepared them as if they had been compiled and prepared by Alex Vovos of Meridian Financial Services. She did not have the authority or permission of Alex Vovos to prepare or proffer those documents in that way. (Although in her evidence LB claimed that SI was a party to the production of the false accounting documents to the CBA, the jury acquitted him of the charge arising out of that application for finance. That was charge 2 on the indictment.)
13 At about that time, SI assumed the title of chief executive officer of the Viking Group. He had no financial training, and limited business experience. His expertise lay in the management of a fleet of trucks, and in heavy vehicle maintenance and servicing. Accordingly, LB assumed the role of chief financial officer of the business. In that capacity, she assumed responsibility for the production of financial and accounting documents relating to the business. The sentencing judge said:
The evidence demonstrated that Loukia Bariamis regarded the accounting and financial side of the business as very much her own exclusive domain. She took particular care to ensure that other persons associated with the Viking Group only had limited access to, and familiarity with, the details of the financial documents that she was producing.[4]
14 In August 2008, shortly before the purchase of Perth Freightlines, BB joined the Viking Group as its executive general manager. His background was in transactional banking, which involved the provision of electronic and like financial services to customers of the National Australia Bank. BB had no relevant background in accounting or commercial banking. His role in the Viking Group was very much on the operational and strategic side of the business.
15 In due course, the business of the Viking Group grew and diversified very rapidly. Its business was divided among a number of different corporate entities. The principal entities were: Perth Freightlines, which had a depot at Derrimut, and which was involved in interstate transport; Viking Fleet Service, which was a heavy vehicle maintenance and service company; Viking Transport Express, which provided transport services; and Viking Transport and Logistics, which was the warehousing and containerised freight division of the Viking Group. The Group also purchased a logging business, which was incorporated within Viking Transport and Logistics, and a Tasmanian fishing business.
16 As a result of its rapid expansion, the business of the Viking Group experienced chronic cash flow shortfalls. For that purpose, the CBA granted to it a series of temporary excesses over the limit formally agreed for the Group's lending facilities. In July 2009, SI and LB applied to the CBA for the provision of further financial lending facilities to the Group. The bank acceded to that application, and increased the formalised lending facilities by a sum of $2.55 million. The application for those increased facilities was based on the same documents as the previous application for facilities for the purchase of Perth Freightlines. (That application was the subject of charge 4, which alleged that SI and LB were parties to a joint criminal enterprise to obtain the additional financial lending facilities from the CBA by deception. The jury acquitted SI of that charge.)
17 One of the facilities provided by the CBA to the Viking Group was referred to as a 'receivable finance facility'. Under that facility, the bank provided finance to three members of the Viking Group - Perth Freightlines, Viking Transport and Logistics, and Viking Fleet Service - for 80 per cent of those companies' current debtors, up to a prescribed limit. It was a condition of the facility that the bank would not provide finance in respect of debts owed to those companies by related entities in the Viking Group. In order to access finance under that facility, the relevant Viking company was required to provide a statement to the bank, setting out the invoices in respect of which it sought funding. At the end of each month, the bank reconciled that document with the debtors' ledgers of the three companies concerned. Those ledgers were referred to as the 'aged debtor trial balances'.
18 In order to deal with the increasing cash flow problems of the Viking Companies, LB conceived and implemented a system by which debts owed to the three Viking companies by related entities in the Group were, in the documentation provided to the bank, replaced by fictitious debts falsely said to be owing by unrelated third persons. In addition, when funding was available under the facility limit, LB significantly exaggerated the amounts that were owed to the Viking companies by their debtors. On some occasions, false or fictitious debtors were inserted into the aged debtor trial balances and other documentation provided to the bank.
19 In October 2009, the CBA approved a further application by the Viking Group for additional financial facilities, totalling $12.15 million. The application for those facilities was based on falsified aged debtor trial balances for Perth Freightlines, Viking Fleet Service and Viking Transport and Logistics. Those documents fraudulently inflated by $5.5 million the amounts owed by debtors to each of those three companies. In addition, the application for the financial facilities was based on falsified accounting documents for entities in the Viking Group that purported to have been prepared by Alex Vovos of Meridian Financial Services. Again, those documents had been prepared by LB herself, without the authority or permission of Alex Vovos or Meridian Financial Services. Charge 6 alleged that SI and BB, with LB, obtained a financial advantage by deception for the Viking companies arising out of that increase in the credit limits of the Viking Group. SI was convicted of that charge. BB was acquitted.
20 Notwithstanding the substantial increase in credit facilities provided by the CBA in late 2009, the Viking companies continued to suffer cash flow shortfalls. As a result, the bank allowed a number of temporary excesses over the agreed limits from April 2010. The ongoing cash flow problems of the Viking Group were the subject of three meetings with officers of the CBA, attended by SI, BB and LB, in June and July of 2010. Those meetings are discussed in detail below.[5]
21 As a result of the continuing liquidity problems of the Viking Group, the bank in October 2010 approved a further application on behalf of the Group for additional financial facilities in the sum of $13.9 million. That amount included a $9 million increase in the receivable finance facilities referred to above. That application, and the meetings which preceded it, were the basis of charge 8, of which both SI and BB were convicted.
22 That charge was based on the provision to the CBA of falsified aged debtor trial balances for Perth Freightlines, Viking Fleet Service and Viking Transport and Logistics. Those balances were falsely inflated by a sum of $7.2 million. In addition, charge 8 alleged that the increase in financial facilities was based on a false representation made to the bank that Viking Fleet Service was the exclusive supplier of heavy vehicle maintenance services to Aldi stores in Victoria. That representation was contained in a document entitled 'Viking Group - Divisional Strategic Overview 2010-2011' (the 'strategic overview'), which BB had sent to an officer of the CBA in July 2010. He spoke to that document in the course of the meeting with bank officers on 22 July 2010.[6]
23 After the provision of the credit facilities that constituted the basis of charge 8, the Viking Group still continued to experience liquidity problems. Further temporary excesses were granted to the Group by the bank. At a meeting on 17 November 2010, the bank approved a further $4 million increase in the credit facilities. That approval was based on the same documentation and information provided to the bank as formed the subject of charge 8. SI and BB were both convicted, on charge 14, of obtaining a financial advantage by deception from the bank as a result of that increase in the credit facilities.
24 Charge 7, on which both applicants were convicted, alleged that together with LB they had attempted to obtain a financial advantage by deception from Westpac Banking Corporation between 6 July 2010 and 30 March 2011. That charge arose out of an attempt to re-finance with Westpac the lending facilities provided by CBA. One of the reasons for the attempt to re-finance was that Westpac provided a more flexible and accessible receivable finance facility. That was important to the alleviation of the chronic cash flow difficulties experienced by the Viking Group.
25 The application to Westpac commenced with a preliminary meeting between SI, BB and LB and officers of the Westpac Bank on 6 July 2010. Following that meeting, and a further meeting in August 2010, a number of financial and accounting documents were provided to Westpac, principally by BB. Those documents included financial accounts of a number of entities in the Viking Group prepared by LB, which falsely purported to have been prepared by Alex Vovos of Meridian Financial Services.
26 In addition, BB provided to Westpac a copy of the strategic overview. As mentioned earlier, that document stated that Viking Fleet Services was the exclusive supplier of heavy vehicle maintenance services to Aldi stores in Victoria. It also stated that Viking Fleet Services had substantial business generated by a contract with Boral Resources (Vic) Pty Ltd and by a contract with Linfox. Each of those statements was false. Those false statements, and the falsified accounting documents purporting to have been prepared by Alex Vovos, constituted the deceptions alleged in charge 7.
27 Reviewing those financial documents, an officer of Westpac noted that there was an inconsistency between the closing balances for one year and the opening balances for the succeeding year. That inconsistency could not be resolved by LB without disclosing the fact that the documents were fraudulent. Accordingly, and notwithstanding that Westpac appeared to be interested in proceeding with the application for finance, LB persisted in stalling the provision of further financial documentation. In early 2011, steps were taken to revive the application, but they did not proceed further before a receiver was appointed to the Viking Group in early April 2011.
28 The other group of charges on which SI was convicted were the equipment charges (counts 1, 3, 5 and 9-13 on the indictment). No equipment charges were brought against BB, and there was no evidence that he was in any way implicated in the commission of those offences.
29 In the case of each equipment charge, the prosecution case was that SI had dishonestly procured the provision of hire purchase finance to a member of the Viking Group in respect of equipment purchased or owned by it. He had done so by providing to the finance company a fictitious invoice that purported to demonstrate that the Viking Company had acquired the particular piece of equipment at a price well in excess of the actual amount paid for it.
30 In each case, the false invoice was created in the name of Knights Motors, a company owned by SI's brother, George. The main function of that business was to carry out mechanical work, specialising in vehicle air-conditioning repairs. SI's brother did not give him or the Viking Group permission or authority to use the name of Knights Motors to produce those invoices, and he was not in any way implicated in the creation or production of them. In the case of each charge, the basic allegation was that the deception practised by SI consisted of a false representation to the finance company that the equipment had been purchased by the Viking company from Knights Motors at the price stated in the invoice.
31 Each charge alleged that it was SI who made the misrepresentation to the finance company. There was no evidence that he had created or produced the false invoices. Rather, the prosecution case was that that he had directed an employee or officer of Viking to create and produce them.
32 In her evidence at the trial, LB admitted that she, of her own volition, had produced and created the false invoice that was used for the purpose of obtaining the finance the subject of charge 3. It was common ground that, notwithstanding her denials, LB also was responsible for the production of the false Knights Motors invoices that were the subject of the other equipment charges. Based on the evidence, the sentencing judge was satisfied that those false invoices were created and produced by LB herself, or by a Viking employee at her specific direction.
33 In addition, it was a condition of each hire purchase agreement that the equipment that was financed under that arrangement was not subject to any other finance arrangement. On each occasion, either SI or his son Peter made a statutory declaration in support of the proposed hire purchase facility which contained a clause to the effect that the equipment was not the subject of any other such finance arrangement. Contrary to that representation, some of the items of equipment the subject of charges 5, 9, 10 and 12 were the subject of existing finance arrangements with other financial institutions.
34 There was no contest that the relevant documents contained falsehoods. The applicants conducted their respective defences on the basis that they had not been shown to have had knowledge of the falsity of the documents.
35 It will also be of assistance before addressing the grounds of appeal to set out what the judge in sentencing SI and BB said about the respective roles of the participants, as it further illuminates the nature of the prosecution case as presented to the jury. His Honour said:
At the outset, I should state that I am satisfied that you, Steve Iliopoulos, did not engage Loukia Bariamis as the chief accountant for the Viking Group for the purpose of carrying out any fraudulent activity. Rather, as I have already indicated, the evidence is clear that, as the Viking Group started to grow, you were in need of the financial and accounting expertise that you were lacking, and that she was able to provide to you. I am satisfied that you engaged Loukia Bariamis in the Viking Group, as its chief financial officer, in good faith and for honest and legitimate purposes.
I am also satisfied, and indeed it has not been in dispute, that Loukia Bariamis was very much the instigator, mastermind and architect of each of the finance frauds that were the subject of charges 6, 7, 8 and 14. It was Loukia Bariamis who initiated and developed the concept of each of those frauds. In particular, it was Loukia Bariamis who conceived the idea of devising financial accounts that purported to have been produced by Alex Vovos of Meridian Financial Services, for the purpose of the applications for the financial facilities that were the subject of the finance offences. In addition, it was Loukia Bariamis who produced those false accounts for that purpose. On her own evidence, Loukia stated that she produced the accounts in the name of Alex Vovos, in order to conceal from the bank her own involvement in the production of them. The fact that the jury acquitted you, Steve Iliopoulos, on charges 2 and 4 means that, for the purposes of sentencing you, I should act on the basis that Loukia Bariamis, on her own, perpetrated the frauds that were the subject of those charges, and that you subsequently attached yourself to her fraudulent scheme in respect of the application to the CBA for further financial facilities that were granted in November 2009, and that were the subject of charge 6.
Similarly, it is clear on the evidence, and indeed it was not in dispute, that it was Loukia Bariamis who instigated and implemented the concept of producing false aged debtor trial balances for the purpose of fraudulently manipulating the receivable finance facility provided to the Viking companies by the CBA. In her evidence, Loukia Bariamis claimed that she had developed that idea in conjunction with Carly Hartley. Ms Hartley denied any involvement in the development of the scheme. On the evidence, I am satisfied that it was Loukia alone who initiated and formulated the concept of production of the false aged debtor trial balances. I doubt that Carly Hartley had the financial expertise, or the inclination, to have instigated, or developed, the methods by which Loukia Bariamis falsely manipulated the debtor balances that were provided to the CBA. On the evidence, and based on the jury's verdict on charge 6, I am satisfied that you, Steve Iliopoulos, relevantly agreed to, and became a party to, the production of those false debtor balances to the bank, after Loukia Bariamis had initiated and developed the idea of doing so.
It is further clear that you, Steve Iliopoulos, did not have sufficient expertise to have played any significant role in implementing the details of the finance frauds, on which you have been convicted. As I stated, those frauds were the brainchild of, and implemented by, Loukia Bariamis. You have been convicted of charges 6, 7, 8 and 14 on the basis that you were a party to, and participated in, a joint criminal enterprise that was instigated and devised by Loukia Bariamis. Fundamentally, the prosecution case was that you agreed to the development and production of the false financial documents, and that you participated in the deceptions by approving of the conduct of Loukia Bariamis, and by attending meetings with the banks for the purpose of the discussion of the application for further financial facilities that were the subject of each of the charges on which you have been convicted.
I am satisfied that you, Bill Bariamis, joined the Viking Group as its executive general manager in good faith. Your role was to provide strategic and operational management focus to the Group, which was, by then, growing significantly. There was no suggestion in the evidence that you knew of the fraudulent activities of Loukia Bariamis at the Viking Group when you joined it. Nor is there any suggestion that you joined the Viking Group in order to become a party to those fraudulent activities. The effect of the verdicts of the jury is that you did not become involved in the frauds, that were practised on the banks, until mid-2010, at the commencement of the steps that were taken to re-finance the facilities with the Westpac Bank, and which were the subject of charge 7. Thus, you were not a party to, or involved in, the finance frauds that were instigated by Loukia Bariamis for the first two years during which you were working with the Viking Group. Your offending occurred over a relatively short period of time, between mid-2010 and March 2011.
Accordingly, you are to be sentenced on the basis that, approximately two years after your wife, Loukia, had instigated and commenced to perpetrate finance frauds on the CBA, you knowingly agreed to become party to an enterprise involving the frauds that were the subject of charges 7, 8 and 14, and that you participated in those frauds. In respect of charge 7, you were alleged to have participated in the frauds by providing to the Westpac Bank a number of false financial and related documents that had been prepared and produced by Loukia Bariamis, and by acting as the Viking Group's main spokesperson at meetings with the representatives of the Westpac Bank. In respect of charges 8 and 14, you participated in the joint criminal enterprise to commit the frauds that were charged by attending at, and participating in, meetings with representatives of the CBA in which the applications for further financial facilities were discussed and negotiated.
In the course of sentencing submissions, there was some discussion as to the basis upon which you, Bill Bariamis, were convicted on charge 8. As I have already indicated, I do not consider that the jury was satisfied that you made the false representation concerning Aldi, as alleged in charge 8. I am satisfied on the evidence, and by the verdicts of the jury, that you were convicted on charges 8 and 14 on the basis that you knew of, and agreed to, the production of the false aged debtor trial balances to the CBA, that are set out in the particulars to each of those charges.
In respect of the equipment charges, on which you, Steve Iliopoulos, were convicted, as I stated, there is no direct evidence as to the person who compiled and produced the false documents that were the subject of those charges, apart from charge 3. However, as I have noted, it was common ground, and in my view correctly so, that they were compiled and produced by Loukia Bariamis herself, or by an employee in her accounting division under her direction. As discussed in the course of sentencing submissions, I am unable to form any conclusion as to whether the device, of using false Knights Motors invoices, for the purposes of the deceptions that were the subject of those charges, was conceived by you or by Loukia Bariamis. I certainly could not find, beyond reasonable doubt, that it was you who initiated that concept. Equally, I could not find, on the balance of probabilities, in mitigation, that the idea was initiated by Loukia Bariamis. Nevertheless, the evidence satisfies me that both you and Loukia were, effectively, equally involved in the commission of each of the offences. I am also satisfied that you could not have committed those offences, if not for the involvement of Loukia Bariamis in them. That observation is particularly relevant to charge 3, which involved the production of a fairly complex set of documents. On the evidence, I am satisfied that the same observation applies equally to each of the equipment charges.[7]
36 SI seeks leave to appeal against his conviction on all 12 charges. There is a single ground of appeal, namely, that the verdicts are unsafe and unsatisfactory. He invokes s 276(1)(a) of the Criminal Procedure Act 2009, contending that each guilty verdict
is unreasonable or cannot be supported having regard to the evidence.
Upon the whole of the evidence it was not open for the jury to find beyond reasonable doubt that the applicant:
37 We deal first with the finance charges. According to the appeal submission, the central issue for the jury's determination was SI's knowledge as to the falsity of the documentation provided in support of applications for credit. He contends that 'the only purported direct evidence' of his state of knowledge came from LB, whose evidence 'was entirely lacking in honesty, credibility and reliability'. As his counsel expressed it in argument, the ground of appeal rested on LB's 'profound unreliability'; she was 'a spectacularly dishonest individual'.
38 The written submission identified the following matters as bearing on LB's credibility:
39 In response, the Crown conceded that there were significant issues with respect to LB's credibility and reliability. It was said, however, that when all of the evidence was considered, the doubts over LB did not constitute an obstacle to conviction. It was pointed out that, in final address, the prosecutor said he would not try to persuade the jury to accept her 'as generally a truthful and reliable witness'. He acknowledged that there were parts of her evidence which the jury would find untruthful and that they should be 'very cautious' about accepting anything she had told them. He made clear that the jury were not being invited to act on her evidence alone but that, if other evidence supported hers, she should not be disbelieved simply because she had told lies on other occasions.
40 Crucially, as senior counsel for the Crown pointed out on the appeal, there was a considerable body of independent evidence - principally from officers of the Commonwealth Bank - which demonstrated SI's business acumen and his active involvement in the financial affairs of the Group. That evidence provided strong support for LB's evidence that SI was fully aware of the frauds, and knowingly participated in their execution.
41 The essence of the defence case, both at trial and on the appeal, was that SI relied on LB and BB to manage the business for him, and that LB had taken fraudulent advantage of the opportunities this gave her. According to the appeal submission, SI
did not have the requisite skills to perform the actions himself:
42 In final address, counsel for SI highlighted evidence given by Mr Barry Heib, the CBA 'relationship executive' for Viking in the period 2008 to 2010. Mr Heib noted SI's 'seeming heavy reliance' on LB and BB, and agreed that:
for questions of business strategy and finance, the expectation was that Bill Bariamis and [Loukia] would explain the full range of meaning and consequence of various business decisions to [Steve] ... most particularly financial decisions.
43 Counsel invited the jury to conclude that LB had exploited SI's dependency on her:
It was a management style and it was an organisational structure that was easily manipulated by Loukia Bariamis.
In opening, counsel had put to the jury that LB 'committed the fraudulent activities and she did so alone'. In closing, his focus remained squarely on LB. He began his address as follows:
The story of Viking's collapse really is the story of Loukia Bariamis. It's her offending that ushers in the demise of that particular entity.
44 SI was portrayed as a 'hands-off' CEO. Although SI had told Mr Heib that he read every email he received, defence counsel emphasised that SI had never sent Mr Heib an email. He said to the jury:
Ask yourself, is he an email kind of CEO sitting in the office all day dictating letters to his receptionist taking notes, or is he more of your hands-on working to his strengths kind of guy, being at depots, being interstate, driving around?
45 As it was formulated in final address, the defence hypothesis was that SI was 'a mechanic, who built a very solid business and then picked the wrong person [LB] to help him build it, even further'. Put another way, 'Viking grew too quickly for really anyone to keep track of, and it was to some extent that growth that was exploited by Loukia Bariamis'. In other words, LB had cunningly taken advantage of SI's inattention, his lack of financial expertise and his trust in her to perpetrate the frauds entirely on her own initiative and for her own benefit.
46 Leaving aside for the moment the inherent implausibility of this theory, it failed altogether to confront the substantial body of evidence from third parties - none of which was seriously challenged - which showed SI to be commercially shrewd, financially astute and actively engaged in decision-making about the business. That evidence made clear that, from the very beginning, SI was the driving force behind the expansion of the Viking Group and was acutely aware of the cash flow difficulties. Unsurprisingly, SI needed someone with LB's technical expertise in finance to enable him to achieve his commercial ambitions. His counsel ultimately conceded that this was so.
47 One of the first witnesses in the trial was Mr Maurice MacKenzie, who was the owner of Perth Freightlines Pty Ltd when, in late 2007, SI approached him with a view to purchasing the business. Mr MacKenzie recalled a discussion in July 2008 where SI had said to him that cash flow was very important to a business and that 'a business can't operate without cash flow'. SI said, however, that he did not have the cash flow to pay the purchase price immediately. As a result, Mr MacKenzie agreed to leave the Perth Freightlines cash flow in the business, on the basis that SI would pay the purchase price in two subsequent instalments.
48 There were also detailed negotiations about the value of the assets of the Perth Freightlines business, including plant and equipment. Mr MacKenzie confirmed that, during several meetings with SI and LB, they discussed 'fair market value and auction value and insurance value and trade price valuations'. Although the detailed checking - the 'due diligence' - was left to LB, SI obviously knew what he was doing and what commercial result he wanted to achieve.
49 SI had wanted the Perth Freightlines sale settled by early 2008. In the event, the sale did not settle until August 2008, in part because of delays in CBA's approval of the $5 million loan. Unhappy with the slowness of CBA's loan approval process, SI made a complaint about the then 'relationship executive', Mr John Collins, which resulted in Mr Heib replacing Mr Collins as relationship executive. The jury were entitled to regard this as another clear example of SI exercising control of the Group's financial affairs in order to advance his objectives.
50 Mr Heib's evidence about SI's role was especially powerful:
My view was Viking was Steve's business. He established it. He formed it, established it and grew it to what it was when I became involved.
Asked how much control SI appeared to exert over the business, Mr Heib said:
I thought Steve was running a really impressive business. I recall sitting down at Steve's desk one day having a look at their systems they used to manage the trucks when they were on the road and all the GPS data that they used to measure the trucks' performance and I viewed Steve as a very capable person.
Mr Heib confirmed that it was SI who had explained the systems to him.
51 Mr Heib was then asked who at Viking had been responsible for sourcing new clients. He said:
There was, in my view, ... two parties involved which was Steve and Bill about sourcing new clients and it was a joint approach with the two of those to make sure that the client met profitability targets, the strategy that new clients could be serviced with the level of equipment that they had and so forth, that was certainly Steve and Bill's role.
Mr Heib confirmed that, if SI and BB assessed that the profitability would not be 'positive', the client would not be proceeded with.
52 Asked who set the strategic direction of the business, Mr Heib said:
The strategic direction was, I believed was run, was headed up by Bill, often spoke about the new client base, they are talking about how, there was one time I remember having a conversation with Bill about replacing contractors with company owned trucks and the profitability, extra profitability that would generate, and, but I don't think Bill would have, I think Bill would have been driving that but I also believe that Bill and Steve were jointly responsible for those things.
SI had 'the final say' on all business decisions, including strategic decisions. Mr Heib gave the following example:
If the bank presented an offer document we would present that to Bill, Bill would validate it and be happy with it prior to Bill giving that to Steve for sign-off and authorisation.
53 Counsel for SI did not challenge any of these statements in cross-examination of Mr Heib. When Mr Heib was cross-examined by counsel for BB, he confirmed that SI had been 'heavily involved' in:
All of this was done with BB's support, whom Mr Heib regarded as 'Steve's right-hand man'.
54 The evidence showed that SI was actively involved in all of the key commercial and financing decisions. When the rapid growth of the Viking Group led to chronic cash flow shortfalls, it was SI - together with BB and LB - who represented Viking at meetings with the CBA in June 2009. Again, in September 2009, the three of them met with CBA to review the structure of proposed new loan facilities, which were subsequently approved in October. The bank's approval of an additional $12.15 million was based on falsified documents. That was the basis of charge 6, on which SI was convicted.
55 Also of great significance were the bank's diary notes of three meetings between Mr Heib and SI, BB and LB, held on 17 June, 30 June and 22 July 2010 respectively. Of necessity, we refer in what follows to the part played by BB as well as by SI.
56 In relation to the first of these three meetings, Mr Heib noted:
Meeting called by the Bank to further discuss the cash flow position of the group, especially considering a request for temporary excess. I was particularly disappointed to receive this request as I sat down with the group only 2 weeks ago and there was no mention of any cash flow assistance being required.
CFO Loukia Bariamis advised that she had been informed of the need by her finance department some 2 weeks ago via email. She advised she did not read the email that this issue was completely her accountability and she should have dealt with it some time ago. Steve and Bill are clearly disappointed with this and I expect that Loukia will have to answer some difficult question [sic] following the meeting.[9]
57 The 30 June meeting also concerned the cash flow position. Mr Heib's note recorded:
After a long discussion, it became clear that they are doing all they can to collect within their preferred trading terms of 45 days, but changes to their business mix has resulted in collections being slower than what they hoped.
The major change to the business is twofold.
I have had some questions on one part of the management structure, in particular the management of the day to day financial monitoring of the cash flow. Following recent discussions with the management team, it is very clear that they have beefed up the accounting team and have 4 internal accountants dealing with the financial matters.
One of the key changes is Steve's approach to new business. In the past the finance team were not involved in the strategic decisions, usually taken by Steve and Bill based on the profitability of new opportunities. Steve advises that Loukia will be closely involved in strategic decisions. The result is that cash flow management, as well as profitability will be a key issue to be considered with any business decision.[11]
Mr Heib confirmed that these statements about 'Steve's approach to new business' had been made by SI himself.
59 Mr Heib was asked about the reference in his 30 June note to the 'significant new work' which Viking had gained from a number of 'national' companies. Of the companies listed, Aldi was the only company he could independently recall having been mentioned at the meeting. It had stuck in his memory:
because I thought it was fantastic, I thought it was such a good positive thing for the company to do. I just thought dealing with a company like Aldi, its national footprint, its growth, I just thought it was fantastic, a great opportunity for Viking Fleet.
Mr Heib also recalled following up with LB about the reference at the meeting to V/Line. He telephoned her and asked:
if this V/Line, is this the V/Line, the large entity, because I wanted to make sure that it was a good quality debtor ... and LB confirmed it was V/Line the train operator.
60 Mr Gerrit Knauth of CBA, who was the 'risk executive' in relation to the Viking facilities between November 2009 and November 2010, also attended the 30 June meeting. He recalled that it was BB who told the meeting that Viking's 'business mix' was changing, with a move towards larger clients rather than a large number of smaller clients. He specifically recalled BB mentioning Aldi and TNT, and confirmed that Mr Heib's notes accorded with his memory at the time.
61 Mr Knauth was not challenged on any of this evidence. Nor was it suggested to Mr Heib that his notes of the meeting were inaccurate. On the contrary, as Priest JA pointed out during argument, the trial was conducted on the basis that the meeting notes were accurate. The jury were therefore entitled to be quite satisfied that BB had made false statements about Linfox and V/Line. (It was common ground that V/Line was not a Viking customer at all, and that Linfox provided only a very small amount of work.)
62 LB denied that V/Line had been mentioned at the meeting. When asked to explain why she would not have mentioned V/Line herself, LB said:
Because it would have been known straightaway by Bill and Steve that I was lying.
63 The 22 July meeting was called because, once again, the Viking Group needed further assistance 'to meet very pressing cash flow issues'. Mr Heib's note said:
We recently approved a [temporary excess] of [$3 million] on the receivable finance facility to assist with cash flow, but further assistance is required.
It is clear that further investigation is required as we were of the clear understanding that the previous [temporary excess] would be sufficient. It is clear that this is not the case. One of the first issues that we need to be satisfied with is ensuring that we are dealing with a viable business. Other issues that needed clarification are, why they are experiencing cash flow issues taking into account the strong profitability, why are we always being advised late that our assistance is required, and what steps they are taking to manage the position better in the future.
64 The note also recorded that TNT had asked Viking to purchase 30 new trucks, and take over 'a significant amount of work for them'. TNT management had met with SI and BB in Melbourne to make this request but they had not been prepared to make the necessary commitment in new equipment. This was further confirmation that SI and BB were the key decision-makers on business development.
65 At the 22 July meeting, BB presented and spoke to a document entitled 'Divisional Strategic Overview 2010-2011'. According to the document, the Group was
currently conducting a banking review, and assessing its facility, product and service requirements over the 2010-2011 financial year.
As part of this review process we have prepared this paper outlining the trading background, strategic direction of each of the Group's Divisions as well as providing an indication of the likelihood capital requirements of each business unit for the coming 12 months.
66 In relation to Viking Fleet Service, the overview stated:
The Division has grown substantially over the past 12 months, with revenues and profitability having grown by over 90%. While a large part of this has been the result of increases in company owned equipment being maintained by VFS, substantial business has also been generated by larger external contracts being put in place over the period, namely:
The ALDI contract is of particular interest, as VFS is now the exclusive supplier of heavy vehicle maintenance services to the retailer for Victoria. ALDI has recently contracted VFS to provide services in Dandenong, alongside a new 100,000 square metre ALDI facility, in addition to its use of the Altona VFS facility.
67 Mr Knauth recalled that BB had 'walked us through the paper'. He had spoken to each of the points in the strategic overview and, in particular, had explained that Viking Fleet Services was establishing a connection with Aldi Dandenong and was starting to service Aldi trucks at a Dandenong facility. Not only was this evidence not challenged, but counsel for BB asked Mr Knauth in cross-examination to confirm that it was BB who had produced the document at the meeting and made those statements. The statement that VFS was 'the exclusive supplier of heavy vehicle maintenance services' to Aldi was false. Aldi had no such arrangements.
68 Under cross-examination by counsel for SI, Mr Knauth confirmed that SI had 'relied heavily on the guidance and advice of LB ... and BB'. He also confirmed that SI and BB had appeared to be operating 'in a way where [LB] wasn't included in the dialogue'. Finally, he agreed that during this period both SI and BB had offered 'a high degree of cooperation ... as to how to better assist the bank in understanding what was occurring in the Viking business'.
69 As can be seen, the picture presented by this combination of documentary and oral evidence is very different from that painted by defence counsel. In our view, the jury were entitled to be satisfied that SI and BB were fully in control of Viking's strategic direction and client development, and were fully aware of its financial requirements. As SI told the 22 July meeting, most of the strategic decision-making to that point had been done by him and BB without the involvement of LB. The 'strategic overview' was a clear illustration of the careful attention which SI and BB paid to exactly what was happening, and was likely to happen, in every division of the Group.
70 In particular, they knew perfectly well who was, and who was not, a customer or prospective customer of the Group. Even without LB's candid statement (that if she had mentioned V/Line as a customer, both SI and BB would have known it was a lie), the jury could readily have been satisfied that both SI and BB knew that the statements made about new business from Aldi and V/Line and Linfox were false. Plainly enough, LB also knew they were false, and that was the basis of her pleas of guilty. The clear identification of SI and BB as the drivers of business development, and as the decision-makers about new business, enabled the jury to reject altogether the contention that this was some secret stratagem of LB's, implemented without SI or BB having any idea of what was going on.
71 It was no part of the Crown's case that SI or BB had put the false figures in for these 'clients' in the aged debtor trial balances. That was, of course, a task for LB, given her undoubted responsibility for the preparation of financial documents. But, given the independent evidence set out above, there was no reason for the jury to doubt LB's evidence that she had acted with SI's full knowledge.
72 Both SI and BB knew perfectly well the level of detail at which the bank required to be satisfied before approving increases to facilities. They knew perfectly well that it was not enough to make assertions, in meetings or in documents, about new business from big clients. The bank would inevitably require specific figures. After all, the very nature of a receivable finance facility is that the amount advanced by the bank is a percentage of the anticipated receivables from the client(s). And Ms Hartley gave unchallenged evidence that SI was copied in on every email she sent attaching cashflows and debtor trial balances.
73 We referred earlier to the implausibility of LB having perpetrated these frauds unilaterally, and secretly, for her own benefit. It was far more plausible, in our view, that she had - in this respect as in every other - used her financial expertise to assist SI and BB to pursue their commercial objectives. As we have said, SI and BB were the driving force behind the Group's expansion and - by the practice of acquiring new equipment out of cash flow - they created the very cash flow difficulties which prompted the repeated requests to the bank for increased assistance.
74 As the sentencing judge noted, SI was the principal beneficiary of the frauds. They were directed to securing the financial viability of the Group, which he owned and controlled. LB was no doubt as keen as SI was for the business to grow and prosper. As she acknowledged under cross-examination, she was eternally grateful to SI for giving her the opportunity to work at a time when she was at 'the lowest ebb' in her life. Work gave her a sense of purpose and made her feel better about herself.
75 Before dealing with the equipment charges, of which SI alone was convicted, we turn to consider BB's application for leave to appeal against his convictions on the finance charges.
76 As noted earlier, BB was convicted on two charges of dishonestly obtaining a financial advantage by deception. He was also convicted on one charge of attempting to dishonestly obtain a financial advantage by deception. That conviction is the subject of a separate ground of appeal, dealt with below.
77 Both charges 8 and 14 were based on the false statements in the aged debtors trial balances provided to the CBA.[12] As with SI, BB relies on the unsafe ground. The key question identified in the appeal submission on behalf of BB was whether the jury could have been satisfied beyond reasonable doubt that he knew of the false statements. Reliance was placed on the absence of clear evidence that BB had been copied in on the emails sent to the bank attaching the financial documents. We note, however, that Mr Knauth, under cross-examination by counsel for BB, confirmed that BB was 'generally and mostly' copied in when LB sent emails to the bank. The position was evidently different, however, when Ms Hartley sent emails to the bank.
78 As to whether BB would have realised that the statements were false, counsel accepted that the relevant entities 'were invented entities with which this [Group] did no business'. He submitted, however, that BB might not have realised this 'because of his role within the company'. It was said that, although BB had 'some involvement' with some of the entities in the Group, he knew only 'in broad terms' with whom the Group did business.
79 In our view, this submission is unsustainable. In addition to the unchallenged evidence about BB's role set out above, there was other evidence from Viking Group employees confirming that BB was very familiar with the customer base. Mr Barry-Murphy of CBA, who had several meetings with BB, recalled clearly how knowledgeable he seemed about strategic and operational matters. 'He came across as someone who really understood the business very well'.
80 Counsel ultimately conceded that it was SI and BB who drove the expansion of the group and that they, as the people in control of the Group, made the strategic decisions about expansion and the taking on of new clients. They were the ones with the commercial acumen, and ambition, and LB performed the essential functions of managing the accounts and preparing the financial documentation.
81 The unchallenged evidence from bank witnesses showed that BB was much more closely involved in dealings with the bank than SI. According to Mr Barry-Murphy, BB spoke at meetings with the bank about the Group's cash flow, profit performance and tax position. According to Mr Heib, it was BB's role to negotiate the terms of any loan product from the bank to Viking:
Bill was always forward and the first point of call when we had to talk about facility structures and when he was satisfied it would go to Steve.
Mr Heib viewed BB 'as a real key part of the business':
I always viewed Bill highly, he always impressed me as an articulate astute individual and he certainly impressed the bank in general and me in that he knew what he was about.
[I]f there was any new business opportunities provided to the Group Bill was all over those particular issues ...
82 Ms Ticknell-Best, who assisted Mr Heib, said that:
[T]here were instances specifically around the asset finance when we were in constant contact with Bill.
She said that, when the various facility increases were being talked about, BB was copied into 'most of the important' emails. Asked whether Ms Hartley had copied BB in on cash flow reports sent to the bank, Ms Ticknell-Best said that she did not know but
would have thought Bill would have been included because the conversations had been held with meetings including Bill about said cash flow issues and I also remember Bill taking ... or making a comment that he was going to become more involved because obviously if they were using cash flow to fund equipment, the cash flow was not being used in the right method, there was conversations held where it was mentioned that not necessarily had Loukia been aware of the spending on ... equipment for the business and, therefore, the cash was not there when she went to use it.
83 As senior counsel for the Crown submitted on the appeal, the tenor of this independent evidence was consistent, clear and highly incriminating. As stated earlier in relation to SI, we consider that it was well open to the jury to be satisfied that BB knew of the false statements in the financial documents provided to the bank. It was he who made the false statements in the 'strategic overview' and orally in the meetings.[13] Given BB's knowledge that the bank required verification of where the receivables were coming from, the jury could comfortably infer that he knew about the false statements in the aged debtor trial balances.
84 As noted earlier, charge 7 arose out of the approach made by Viking to Westpac in July 2010 to refinance the Group's debt. Following an introductory meeting, Westpac requested financial information about the Group. BB subsequently provided a range of financial information, together with the strategic overview. The documents included the financial statements to 31 March 2010. BB indicated that statements as at 30 June 2010 would be provided at or before the next meeting. The statements were later provided to the bank by LB.
85 Subsequently, the Westpac officer responsible for considering the application for refinancing detected an anomaly in the accounts. When he drew that to LB's attention, she responded, falsely, that there was a software problem. No further information was subsequently provided, because it would have revealed that LB had fabricated the accounts.
86 Counsel for both SI and BB made a no case submission to the judge, contending that:
on the evidence, the jury could not conclude that the steps taken to obtain financial lending facilities from Westpac were more than preparatory to the commission of the offence of obtaining those facilities from Westpac, and that the jury could not conclude that those steps were immediately, and not remotely, connected with the commission of that offence.[14]
87 The judge rejected the submission, stating his conclusion in these terms:
Thus, it can be seen that the steps taken by Viking, to further its application up to 17 August, were quite substantial, notwithstanding that, in effect, Viking had not provided to Westpac two important pieces of financial information, which were necessary to complete its application. As I have stated, the question which I must decide is not whether I, sitting as the tribunal of fact, would hold that the steps thus far undertaken by Viking were sufficient to constitute an attempt to obtain the financial advantage from Westpac that is the basis of charge 7. Rather, the question is whether the jury, based on those facts, could lawfully conclude that those steps did constitute an attempt to obtain that financial advantage from the bank.
Ultimately, I have come to the conclusion that the steps taken by Viking, in furthering its application to Westpac, were sufficiently advanced for the jury to lawfully conclude that there had been an attempt, by those responsible for the application, to obtain the financial advantage from Westpac that is alleged in charge 7 of the indictment.[15]
88 Substantially the same submission was advanced on the appeal, but only by BB. It was said that the steps taken by Viking amounted to no more than 'preparation' for an application for finance. Counsel conceded that the false representation had been made, but contended that Viking had not provided all of the information which the bank required. Reliance was placed on the decisions of this Court in R v Tadic[16] and R v Andreola.[17]
89 Both cases concerned convictions for attempting to obtain financial advantage by deception. In Tadic, the accused had applied for a loan facility and provided supporting documentation which contained false statements. The application was provisionally approved, but the accused did not then proceed with it. The conviction was quashed on appeal because 'the evidence at trial was insufficient to show conduct beyond mere preparation'.[18]
90 In Andreola, the accused had made a number of representations to bank officers which were false, in support of applications for various credit facilities. On each occasion, however, the attempt failed
because the bank would not provide a facility or transfer funds without appropriate documentation and/or evidence that the applicant actually had the wealth he said he had.[19]
The Court rejected the applicant's submission that his conduct was merely preparatory to the commission of the offence.
91 O'Bryan AJA (with whom Callaway and Vincent JJA agreed) said:
The jury were properly instructed in the law and it was open to the jury to find on the whole of the evidence that the applicant's acts were more than merely preparatory and were immediately connected with the commission of the offence.
...
In respect of each attempt count, the offence of obtaining a financial advantage from the bank would have been completed immediately upon his being provided the financial facility he requested. The circumstance that loan documents were not brought into existence did not make the false representations preliminary or introductory. They were more than preparatory acts for they had a direct bearing on the applicant obtaining the financial facility he had sought.[20]
92 For similar reasons, we reject the submission that what occurred here was merely preparatory. On the contrary, Viking had taken all of the steps which were necessary to have its application considered. But for the query raised by the Westpac officer about the apparent anomaly in the accounts, the application would have been processed by the bank. There was nothing further for Viking to do.
94 The appeal submission with respect to SI's convictions on the equipment charges was essentially the same as that advanced in relation to the finance charges. That is, because of SI's lack of financial expertise, and LB's control of 'all aspects of finances', the jury could not have excluded beyond reasonable doubt the possibility that LB had acted alone in creating the false invoices.
The evidence led through Loukia Bariamis on the equipment charges was even less satisfactory:
96 For similar reasons to those given earlier, we consider that it was well open to the jury to exclude that possibility. Everything we have said about SI's role, and his knowledge of and involvement in the Viking Group's affairs, applies with equal force to these charges.
97 As noted earlier, the false invoices were all in the name of Knights Motors, a company run by SI's brother, George. As senior counsel for the Crown submitted, it was highly implausible that LB would have created false invoices in the name of George's company without SI's knowledge and authorisation. As we have noted, LB frankly acknowledged just how grateful she was to SI and how much she appreciated the opportunity to work in the business. A succession of witnesses tested to the very long hours she worked in the business. In those circumstances, it was inconceivable that she would have used the name of Knights Motors without SI's knowledge.
98 Further, in respect of charges 9-13, SI was copied in on email exchanges with the bank, which attached false invoices. As Weinberg JA pointed out in argument, whatever lack of understanding SI might have had about accounting, he certainly knew about the vehicles and other assets which the Viking Group purchased and, in particular, he knew very well what their true value was. In at least seven of the cases, moreover, the evidence showed that SI had either been party to, or had been aware of, the original purchase of the asset in question.
99 SI seeks leave to appeal against sentence on a single ground, concerning only one of the sentences imposed on him, namely, the sentence of five years' imprisonment imposed on charge 7. In order to understand the nature of the complaint, it is necessary first to set out the full table of sentences imposed on him.
Attempted obtain financial advantage by deception
100 It was common ground on the plea that SI was to be sentenced as a 'continuing criminal enterprise' ('CCE') offender, under pt 2B of the Sentencing Act 1991, with respect to all of the charges of which he was convicted. When those provisions apply, the maximum penalty for the relevant offence is doubled, and the Court is obliged to apply the increased maximum. At the same time, the Court must take into account all relevant circumstances in determining the sentence.[21]
101 The legislative purpose underpinning these provisions was explained by Vincent JA (with whom Phillips CJ and Cummins AJA agreed) in Arundell, as follows:
In making these statements, I am not unmindful of the differences in the provisions concerning serious violent offenders, serious sexual offenders, serious drug offenders serious arson offenders and continuing criminal enterprise offenders. To some extent those differences demonstrate the point. For example, in the case of serious sexual offences, many of the qualifying offences have not existed for many years and in relation to others, their elements have changed. There is no need to dwell upon these differences which can be seen to reflect the disparate forms of offending to which the provisions are applicable. What is evident is that a number of categories of repeat offenders, who in different ways have been perceived as constituting a special risk to the community, have been created. Persons who fall within these categories are regarded as potentially liable to the imposition of a significantly increased maximum term of imprisonment should they continue to offend in relevantly similar fashion.
...
I would add that there is clearly a broader notion of the protection of the public also underlying these sets of provisions. Persons who by the commission of the required number of relevant offences have a demonstrated propensity to engage in serious criminal activity of a designated kind have been perceived as constituting a significant threat to the community which is entitled to protection through the sentencing process should they continue to offend.[22]
102 In his reasons for sentence in the present case, the judge said:
The offending, in respect of which both of you have been convicted, is particularly serious. Because of the amounts involved in each of those offences, pt 2B of the Sentencing Act 1991 has the effect that both of you are to be sentenced as a continuing criminal enterprise offender in respect of each those charges. As a consequence, the maximum sentence, for charges 1, 3, 5, 6 and 8 to 14, is 20 years' imprisonment, and the maximum sentence, for charge 7, is 10 years' imprisonment.[23]
Because of the number of charges of which both of you have been convicted, and in particular in the case of you, Steve Iliopoulos, it is necessary to allow a significant amount of concurrency as to the sentences that I impose in respect of each of those charges, in order that the total effective sentence is not disproportionate to your offending, and that that sentence is just and appropriate in all the circumstances.[24]
103 The proposed ground of appeal contends that the judge erred 'by imposing a differential sentence' on charge 7. In this context the word 'differential' is used to mean a sentence greater than would have been imposed but for the doubling of the maximum. Initially, it appeared that the complaint was that the prosecution had not 'invited' the judge to impose a 'differential' sentence on this charge and that, as a result, the defence had not had the opportunity to argue against that course. In the course of argument, however, counsel for SI made clear that this was not a complaint about procedural unfairness, acknowledging that he and his client were at all times aware that the judge was obliged to take the increased maximum into account.
104 Ultimately, counsel accepted that this ground could only succeed if the Court was satisfied that it was not reasonably open to the judge to impose the sentence of five years' imprisonment on this charge. Counsel conceded, quite properly, that if the Court were able to discern a rational basis for the sentence, the ground would fail.
105 In our view, it was reasonably open to the judge to impose this sentence. The sentence of five years did, of course, represent 50 per cent of the increased maximum but, as was pointed out in the course of argument, the attempt to have Westpac refinance Viking's facilities involved a very large sum, namely $53 million. This was more than double the total amount obtained as a result of the frauds the subject of charges 6 and 8.[25] Had it succeeded, this would have been a fraud of major proportions.
106 SI was the CEO of the Group and his culpability was high. As the judge said in sentencing him:
In the course of submissions, it was common ground that the roles and culpability of you, Steve Iliopoulos, and of Loukia Bariamis, in the commission of both the finance offences and the equipment offences were more or less equal. In general, I agree with that approach. You, Steve Iliopoulos, as the effective owner of the Viking Group, were the principal beneficiary of the frauds. The offences were each committed in order to sustain the financial viability of the Viking Group of companies owned by you. In addition, the ongoing financial success of those companies enabled you to engage in a rather extravagant lifestyle in the manner described in the evidence of Ms Fiedler. As the effective owner, and chief executive officer, of the companies, the offences would not have been committed without your approval and participation.[26]
107 Leave to appeal against sentence must be refused.
[1] The use of initials has been used in the place of certain names throughout this judgment for ease of reference, rather than for the purpose of anonymisation.
[2] Mr Vasilis Bariamis also went by the name of Bill.
[3] It was common ground on the appeal that the factual background was accurately summarised in the reasons for sentence. Accordingly, paras [4]-[33] are based on the reasons for sentence: DPP v Iliopoulos & Bariamis [2016] VSC 447 [3]-[27] ('Reasons').
[6] The sentencing judge further stated: 'However, the evidence as to what you [BB] said at that meeting was unclear, and did not support the representation alleged in the charge ... . Based on that evidence, and consistent with the jury verdict, I would not be satisfied that either of you were convicted on the basis of the representation about Aldi alleged in Charge 8'. See Reasons [19].
[12] Charge 8 was also based on false representations to the effect that Viking Fleet Service was the exclusive supplier of heavy vehicle maintenance services to Aldi stores in Victoria and that Viking Towing and Salvage Pty Ltd had a credit balance of over $5 million with the ATO. However, as noted above, the sentencing judge was not satisfied that BB was convicted on the basis of the representation about Aldi in Charge 8. See [22] above.
[14] DPP v Iliopoulos & Ors [Ruling No 4] [2016] VSC 133 [14].
[16] [2003] VSCA 28 ('Tadic').
[17] [2002] VSCA 92; (2002) 131 A Crim R 259 ('Andreola').
[18] Tadic [2003] VSCA 28 [25].
[19] Andreola [2002] VSCA 92; (2002) 131 A Crim R 259, 261 [18].
[21] R v Arundell [2003] VSCA 69 [28] ('Arundell').
[22] Ibid [19]-[20] (citations omitted).
[23] Reasons [48] (citations omitted).