Liu v R

District Court of NSW|2021-07-29

Judgment

HIS HONOUR: This is an appeal against three convictions recorded by Magistrate Huntsman sitting in the Downing Centre Local Court on 27 November 2020. The appellant pleaded not guilty to three offences alleged to have been committed contrary to s 225(3) of the National Consumer Credit Protection Act 2009 (Cth). In chronological order, the first offence was known as sequence 3. It alleged that on or about 30 November 2016 the appellant made a statement in a document knowing the statement was false in a material particular contrary to s 225(3) of the National Consumer Credit Protection Act 2009 (Cth). The document was an Australian Credit Licence ("ACL") application made by Aus Mortgage Pty Ltd. The second offence is known as sequence 1. It alleged that on or about 10 January 2017 the defendant made a statement in a document knowing the statement was false in a material particular contrary to the same statutory provision. The document was in fact an ACL annual compliance certificate lodged on behalf of Wealth Investment Milestone Pty Ltd. The third offence in time is known as sequence 2. That alleges that on or about 14 December 2017 the defendant made a statement in a document knowing the statement was false in a material particular, contrary to the same statutory provision. That document was in fact an ACL annual compliance certificate dated 14 December 2017 lodged on behalf of Wealth Investment Milestone Pty Ltd.
Her Honour convicted the appellant of each of those offences.
When I enquired of the solicitors for the parties yesterday what the real issues were, I was told that the first issue was whether the accused knew when he lodged the statements that the statements contained a false material particular, and secondly whether the material particulars were known by the appellant to be false. However, logically, since it is common ground that the accused did lodge the completed forms, the real issue is whether the appellant knew that he had completed each of the documents falsely in a material particular.

Appellant's background

To understand the nature of the arguments and the eventual disposition of them it is necessary to consider the biographical details of the appellant. The appellant was born in June 1978 in Tianjin in the People's Republic of China. I know nothing about his background in his native land. On Thursday 5 July 2018 the appellant participated in a voluntary interview with two officers of the Australian Securities and Investment Commission ("the ASIC"). There is a transcript of that interview which is in evidence. It contains some further biographical details.
It is unclear when the appellant came to Australia. He is an Australian citizen. He had lived in Sydney at the time he was interviewed for either 13 or 14 years. That indicates that he had been living in Sydney since either 2004 or 2005. He said that when he came to Australia he studied for three years including studying in English. He said that he has a master's degree in commerce from the University of Central Queensland. He completed those studies in 2007 or around about that time. After completing his studies he worked for the Westpac Banking Corporation. In an interview in which he participated on 29 April 2016, a synopsis of which is in evidence, the appellant said that he worked for Westpac for two years processing loans and "supporting the back office".
In an application for an ACL made on behalf of Wealth Investment Milestone Pty Ltd on 6 November 2012 the appellant said that between 1 March 2009 and 1 April 2011 he had worked as a consultant for an employer identified as Award Mortgage. The same document tells me that his next employment was with an employer known as Shining Crown International Pty Ltd for whom he worked as a consultant from 1 April 2011 until 2 July 2012. In the same document he advised that he had obtained a Diploma of Finance and Mortgage Broking Management Program in 2012.
On 22 November 2011 the appellant was accredited as a mortgage broker in his personal capacity with the Australian and New Zealand Banking Group Corporation Limited ("the ANZ"). His identification number was 4140-612.
On 2 July 2012 Wealth Investment Milestone Pty Ltd was registered. Its sole director and sole shareholder were the appellant. That company is referred to in the evidence generally as WIM and I shall continue that practice. WIM did not obtain accreditation as a broker with the ANZ. Rather, when the appellant was dealing with the ANZ he used his personal accreditation and his personal identity number with that bank.
The evidence identifies a company known as FAST which is an abbreviation for Finance and Systems Technology Pty Ltd. A recital in an agreement between FAST and WIM tells me this about FAST: "FAST maintains a broker platform that approved finance brokers can use to originate applications or refer applicants for credit products, financial products or financial services to a panel of credit product, financial product and financial service suppliers". In the jargon of the finance world FAST is known as an "aggregator".

ACL application of 6 November 2012

Antecedent to reaching any agreement with FAST, WIM lodged an application with the ASIC. That application was made on 6 November 2012. The application itself tells me that the key contact person for the applicant WIM was in fact the appellant. The application form asks a number of questions which have been filled out in this fashion: "What activities best describe the applicant's intended business under this Australian credit licence? Answer: Mortgage broker. Please indicate the types of credit contracts and consumer leases to which the credit activities the applicant intends to engage in will relate? Answer: Home loans (first mortgage), home loans (subsequent mortgage), vehicle loans. Indicate the range in which the sum of the four amounts falls? Answer: Less than $100 million". The form then asks the applicant to nominate "fit and proper people". The only "fit and proper" person proposed on this application is the appellant. It nominates the appellant as the managing director, an executive officer involved in finance/mortgage broking. It then gives the qualification of having a Diploma of Finance and Mortgage Broking Management Program. It lists the earlier employment to which I have referred. As a result of that application ASIC issued an Australian credit licence to WIM. It bears date 7 December 2012.

FAST

On 31 January 2013 an agreement was reached between FAST and WIM. The document bears a title "FAST Broker Agreement" and is in evidence. It is signed on behalf of WIM by the appellant, both in English and in Chinese ideograms. I have already cited the first recital in that agreement. The further recitals are these: "B. The broker conducts a finance broking business. C. The broker has applied to FAST for approval to use the FAST finance broker platform. D. FAST has approved the broker's application and agrees to make finance broker platform services available to the broker on the terms of this agreement."
On Friday 1 April 2016 an officer of the ANZ sent to Mr Robert Ryan, who was identified elsewhere as being the head of FAST Northern Region, an email which states this: "We confirm that effective immediately ANZ's approval of the broker listed below as an Authorised Officer under the Originator Agreement between ANZ and [FAST] has being suspended: - Guodong Liu While the suspension remains in place, the broker is not authorised to submit loan applications to ANZ under the Originator Agreement. This suspension remains in effect unless and until ANZ notifies you that it has been lifted. We appreciate your cooperation and agreement to this course of action." The opening verb of that communication clearly indicates that there had been some earlier discussion by an officer of the ANZ with Mr Ryan about the appellant. One does not confirm something that has not previously occurred. The officer of the ANZ who sent that communication to Mr Ryan described himself as the State Manager Broker NSW/ACT, which would appear to be a senior position in the hierarchy of the bank. There is no evidence of any direct communication between the ANZ and the appellant, however, it is known that on the following day, Saturday 2 April 2016, the appellant's ability to access the computer link to the bank from his own computer was revoked. In other words from 2 April 2016 he was physically unable to make any electronic communication to the bank. That would have drawn his attention to the fact that there was something amiss in his relationship with the bank.
In evidence is a letter from FAST to the appellant bearing a date 21 April 2016. The first line of the address is the personal name of the appellant, the second line of the address is WIM. The street address is of an office in George Street, Sydney, which was occupied by both the appellant and WIM. There is then a title "Suspension letter" and after greeting the appellant by his given name as distinct from his family name there is then another title referring to WIM. The substance of the letter is this: "I refer to the broker agreement dated 19 December 2014 (the sub-originator agreement) between FAST and Wealth Investment Milestone Pty Ltd. ANZ Bank has suspended Wealth Investment Milestone Pty Ltd's accreditation to submit applications to ANZ Bank due to the quality of documents supporting certain loan applications to ANZ Bank. As a result, FAST is exercising its rights until clause 2.5 of the Brokers FAST Broker Agreement to suspend that brokers right to originate applications for any products under the agreement. During the period of the suspension, Wealth Investment Milestone Pty Ltd must not submit further applications for credit. FAST will continue to pay commissions during the suspension period, subject to the agreement terms. FAST will contact the broker in the short-term to review the broker's performance of the agreement. FAST will seek to resolve the matter as soon as reasonably practicable." There is a final paragraph which merely invites contact with Mr Ryan should the appellant wish to discuss the matter further. The letter is signed not by Mr Ryan but by Ton Truong, the Partnership Support Officer of FAST.
Following upon that letter there was obviously contact with the appellant to review his performance of the agreement with FAST. In evidence is an internal memorandum of FAST which appears to have been made by Mr Patrick Clarkson. The memorandum concerns a meeting held on 28 April 2016 at 105 Miller Street, North Sydney. Those in attendance were Mr Robert Ryan, the appellant and Hien Nguyen whose position was Partnership Manager NSW, and also Mr Clarkson who had the same title as Mr Nguyen.
The memorandum commences with a preamble saying that the meeting was called in response to the ANZ's suspending accreditation due to possible anomalies with loans that WIM had lodged. It would appear that FAST was unaware that the accreditation with ANZ was of the appellant personally and not of his company WIM. That is an understandable error but an error that ought to have been known to the appellant.
The memorandum then goes on to list 14 files that the ANZ had asked to be reviewed. The name of the applicant on each appears to be in the name of somebody either in China or from China or having a Chinese background. The largest loan sought was for $1,536,000 and the applicant for that loan also sought another loan of $500,000. The memorandum then says this: "Files were reviewed and in particular, letters of employment, Bank statements and pay slips when held as well as Compliance documents with the focus on declared living expenses. Anomalies were found in files. The major issues were: - documents were mix of English and Chinese - pay slips were similar and were in English - letters of employment were all similar - application forms did not have details regarding Borrowers living expenses and costs detail in majority of files." At the interview a number of things were discussed. It appears that the appellant said that at that time he had an office in China and an office in Sydney. He had a loan writer Nin Liu, who was a Credit Representative of WIM based in China. Certain biographical details of the appellant were then recorded. Then is recorded that 60% of his business came from mainland China and 40% of his business came from Australia. The document then contains thus: "Dealing with client - does not meet all clients face-to-face, some are however, some are interviewed over the phone. Lin Liu meet some in Shanghai where China office is located. No mention of Skype which is an allowed methodology." There was then discussion about the documents within the files reviewed and the comments seem to suggest that the officers of FAST were not impressed with what was contained in the files. The importance of this memorandum is to record what was said and what was discussed at the meeting.
On 27 May 2016 two letters were generated by FAST. The first is headed "Letter of Separation". Again it is addressed to the appellant as director of WIM. The substance of the letter is this: "We hereby recognise that the sub-originator agreement between FAST and [WIM] will be terminated with effect from 27 June 2016 and that Guodong Liu is free to transfer current lender accreditations." The second and lengthier letter from FAST is headed "Letter of Termination". Again it is addressed to the appellant as a director of WIM. It contains this matter: "I refer to the broker agreement dated 31 January 2013 (the Broker Agreement) between [FAST] and [WIM]. FAST refers to suspending the broker agreement due to action by ANZ Bank with respect to the accreditation ANZ issued to you. Due to that action, FAST has decided to exercise its rights under clause 16.2 of the Broker Agreement to terminate the Broker Agreement on giving you at least 30 days' notice. The termination of the Broker agreement will take effect on 27 June 2017. From that date WIM must: (a) cease submitting applications for making referrals under the Broker Agreement; (b) cease holding itself out as a contractor to FAST; (c) not do anything that may cause loss or damage to FAST; (d) review and maintain membership of an external dispute resolution scheme, in accordance with clause 5.7 of the Broker Agreement, until the date that is six years from the termination date; (e) maintain professional indemnity insurance in respect of performing the Broker Agreement, in accordance with the requirements set out in clause 8 of the agreement until the date that is seven years from the termination date; and (f) immediately return to FAST or destroy all forms, documents, brochures and application forms FAST supplied to WIM. FAST will continue to pay commissions to WIM, subject to terms of the Broker Agreement. FAST will continue to pay you commissions after termination." Again FAST appears to have been unaware that the broker accredited by the ANZ was not WIM but the appellant personally, but that ought to have been well known to the appellant.

Aus Mortgage Pty Ltd

On 25 November 2014 Aus Mortgage Pty Ltd was incorporated. Its sole director, secretary, and sole shareholder, was the appellant. Originally its registered office was the appellant's personal residence, but from 1 August 2017 its address was at a suite in 405 Sussex Street, Sydney.
On 30 November 2016 an ACL, signed by the appellant, was provided to ASIC, that is the subject matter of the charge known as sequence 3. That provided as the address of Aus Mortgage Pty Ltd the residential address of the appellant, in accordance with the documentation on the corporate register. When asked what activities best describe the applicant's intended business under the ACL, the activity stated was "mortgage broker". When asked what types of credit contracts and consumer leases the applicant intended to engage in, this matter was inserted: "Home loans (first mortgage), vehicle loans, boat loans." This application listed two fit and proper people. The first was Wei Lin, the last of those names being the family name. I understand that this person is female, I shall refer to her as Ms Lin. If I have stated the incorrect sex, I apologise to Mr Lin. Her date of birth was March 1990. Her city of birth was Fujian in the People's Republic of China. Her job was as an employed senior manager in finance and broking. Her educational qualification was alleged to have been issued by ACOP, course name was FNS50315 which had been completed in 2016. Her employment is stated to be by WIM. She was working for WIM as an Underwriter. She had been so employed since 1 January 2013. The second "fit and proper person" was the appellant. That describes him as a "general manager" but also "a non-executive officer".
Part of the form relates to "Professional Memberships, Accreditation and Indemnity Insurance". Under that side heading is this question: "Within the last ten years, within Australia and/overseas has he/she ever had his/her accreditation cancelled or suspended by a lender, mortgage manager or mortgage insurer, other than for volume reasons, or had his/her membership of an aggregator or franchise group terminated or is similar action pending against him/her?" The answer to that question was "no". The simple fact is from what I have already cited that within ten years prior to 3 November 2016 the appellant's accreditation was suspended by a lender, namely the ANZ Bank other than for volume reasons. It is accepted that the statement is untrue. The statement was clearly made by the appellant as director of Aus Mortgage Pty Ltd. His name appears on the electronically filed document as the signatory on the date, signing of 3 November 2016.
This application received many "requisitions" from ASIC. The first was made on 7 December 2016. The following requests were made: "Details of the applicant's credit assessment of a consumer, in particular how a decision (preliminary or final assessment) is made to determine they are 'not unsuitable' for the proposed credit product. I have attached a copy of RG209: Credit licensing; Responsible lending conduct. I suggest you read through this guide paying particular attention to section C to assist you preparing a response to this request. A copy of Wei Lin's qualification from ACOP (FNS50315). A copy of the applicant's membership certificate/proof of registration with an external dispute resolution scheme. A certificate of currency for a professional indemnity insurance policy held by the Applicant." On the following day those requisitions were answered. A copy of the answer is not before me.
On 21 December 2016 ASIC raised two further requisitions. They are these: "In relation to Nominated responsible manager Wei Lin's experience as it relates to consumer credit, further supporting information is requested in relation to the duties and responsibilities Ms Wei performed in the role as Underwriter. Given [WIM] and the Applicant have the same director and licence authorisation, please explain why a further licence is required when the Applicant can engage in credit activities on behalf of Wealth Investment Milestone Pty Ltd." The first requisition was answered by providing supporting documentation which is not before me. The second of those requisitions was answered in this fashion: "[WIM] will change company structure. Also, the company will upgrade the licence authority for lending business later."
On 9 January 2017 further "points" were raised on behalf of ASIC with the appellant concerning this application but there is no further evidence before me as to what subsequently occurred. ASIC appears to have believed that what Ms Lin actually did was inconsistent with her being an "Underwriter" and questions were raised about the appellant's office in Shanghai and the personnel who staffed that office and of the failure of the application to mention that office and those office workers.

WIM Annual Compliance Certificate 10 January 2017

WIM had an "annual compliance date" of 7 December in each calendar year. That is the anniversary of the granting of the ACL initially to WIM on 7 December 2012. It would appear that ASIC required each holder of an ACL to file an annual compliance certificate probably on or shortly after the date of the initial grant. An ACL annual compliance certificate was filed on 10 January 2017 on behalf of WIM. It was signed electronically by the appellant. This is the subject matter of the offence known as sequence 1. That document listed as the fit and proper person, as at the annual compliance date, the appellant. Under the heading "Professional Memberships, Accreditation and Indemnity Insurance" there are a number of questions. Those questions are under a chapeau which is this: "Does the licensee certify that it has no reason to believe that any of its fit and proper people have:" The fourth question underneath that chapeau is this: "within Australia or overseas, being denied accreditation, or had accreditation cancelled or suspended by a lender, mortgage manager or mortgage insurer, other than for volume reasons or had their membership with an aggregator or franchise group terminate, or is similar action pending against them?" The answer recorded to that question is "yes". The first thing to observe is that the question is, to put it politely, ungainly. In the chapeau the licensee is referred to using the singular number and the neuter gender, which gender is appropriate for a company. However in the balance of the question the plural number is used, referring to the licensee, and that is grammatically impermissible. Furthermore if the chapeau and the fourth question are put together one can see that it contains this: "Does the licensee certify that it has no reason to believe that any of its fit and proper people have... being denied accreditation or had accreditation cancelled or suspended by a lender... or had their [sic] membership with an aggregator... terminated, or is similar action pending against them?" The final clause should be, "or that similar action is pending against them." However the meaning of the question, albeit poorly expressed, is clear and is discernible by anybody with a proper knowledge of English. Again it is the answer to that question that involves the charge known as sequence 1.

WIM Annual Compliance Certificate 14 December 2017

There was a further ACL annual compliance certificate for WIM issued after the annual compliance date of 7 January 2017. That document bears date 14 December 2017 and has been made by the appellant. Yet again it lists as the only fit and proper person at the annual compliance date, the appellant. Again the same question is asked as in the document completed on 10 January 2017 and that has been answered in exactly the same way, that is "yes" has been answered to the: "Does the licensee certify that it has no reason to believe that any of its fit and proper people have within Australia or overseas, been denied accreditation, or had accreditation cancelled or suspended, by a lender, mortgage manager or mortgage insurer, other than for volume reasons, and had their membership with an aggregator or franchise group terminated, or is similar action pending against them?" That is the essence of the charge known as sequence 2. Like sequence 3 it is common ground that the answer to each of the questions is erroneous or untrue.

Local Court Proceedings

In the Local Court the case was presented by calling by audio visual link from Adelaide an officer of ASIC essentially to formally prove voluminous documentary evidence, most of which is before me in a lever-arch binder. The parties provided written submissions. The written submissions for the prosecution are pp 68 to 72 of exhibit 1 before me, and the defence submissions are pp 73 to 78 of exhibit 1 before me. I have scrutinised the closing submissions on behalf of the defence to see whether the point taken in this appeal was taken below. The final paragraphs of the defence submissions in the Local Court contain this: "[23] The prosecution submissions address at some length the accused's competency in English. In terms of those submissions it is important to remember the accused came to Australia in 2004, had mostly Chinese customers and required an interpreter in part when interviewed. When asked in interview 'how fluent are you in English?', the accused responds: 'That's all right. Yeah, as long as not some very, I speak, and the complex sentence, I think it's normal talking' [Ex 2, p 129]. However, beyond the accused's competency it is submitted the questions subject to sequences 1 and 2 contained a degree of complexity (absent language difficulties). The relevant question, the subject of sequences 1 and 2 contain within the Australian credit licence annual compliance certificate is as follows: 'Does the licensee certify that it has no reason to believe that any of its fit and proper people have within Australia or overseas, been denied accreditation, or had accreditation cancelled or suspended, by a lender, mortgage manager or mortgage insurer, other than for volume reasons, or had their membership with an aggregator or franchise group terminated, or is similar action pending against them?' [24] The accused answered each question with a 'yes'. The alternative is 'no' which would result in the following statement being made: 'The licensee does not certify that it has no reason to believe that any of its fit and proper people have within Australia or overseas, been denied accreditation or had accreditation cancelled or suspended by a lender, mortgage manager or mortgage insurer, other than for volume reasons...' [25] The alternative answer containing a double negative even in the absence of language difficulties offers a degree of complexity. It is submitted that some accommodation of this complexity together with language difficulties should be afforded to the accused."

Language Difficulties

The written submissions on behalf of the appellant deal extensively with language difficulties.
The fourth element for the falsity of the material is knowledge, not merely recklessness. At [21] of the appellant's written submissions the appellant conceded that there may have been a failure to take reasonable steps to prevent a false or misleading statement being made or evidence of recklessness but that did not amount to evidence of an intention to make a false statement. Attention was then turned to the transcript of the interview conducted by officers of ASIC with the appellant on 5 July 2018. I turn to that interview.

Interview 5 July 2018

ASIC was represented by Mr Peter Marchese who was the officer of ASIC who gave evidence to the Local Court. In identifying himself to the Local Court Mr Marchese gave his name completely in Italian as Pietro Marchese. The other officer present was Ms Marissa Mackie who described herself as a "lawyer at ASIC". Also present was Mr Sydney Ye, an interpreter. He was an interpreter in the Mandarin language which I understand to be the form of Chinese spoken by appellant. However most of the questioning did not go through Mr Ye and most of the answers did not go through Mr Ye. On p 5 of the 77 pages of the transcript of the interview these questions and answers were given: "Q. How fluent are you in English? A. That's all right. Yeah, as long as some very, I speak, and the complex sentence, I think it's normal talking [indistinct]. Q. [Indistinct] we have the assistance of Sydney here, so if at any stage you need assistance either explaining yourself or understanding a question, please utilise Sydney's services? A. Yeah. Q. So what we'll do is I'll go through the questions. Would you like for Sydney to interpret every question I ask or are you happy to just wait until you need help? What would you like to do? A. If I need help, maybe I ask. Q. It might be quicker that way and we can see how it goes, all right? Give Sydney a bit of rest sometimes. Now before we go into your credit business, Louis, we'll just get to some other companies. I've done some searches on our systems and according to our records you're the sole director and shareholder of Aus Mortgage Pty Ltd. Is that correct? A. Yeah." Accordingly the appellant believed that he could understand most of the questions asked of him, and most of his answers were given in English.
The appellant's written submissions take me to p 54 of the transcript where the following questions and answers are given: "Q. So, I mean, what were you reading in the questions? Do you understand the questions when you were reading the compliance certificate? A. To be honest, some, when I renew, when I renew the compliance, the credit licence... Q. Yes, what was that, sorry? A. When I renewed the credit licence, I really don't read through all of the questions. Sometimes [indistinct] if before you renew, sometimes I think I remember the answer will be showing there and I just quickly..." The appellant says that this is evidence consistent with negligence, oversight, presumption, recklessness but not evidence of intention.
Large slabs of the interview have been cited in the appellant's submissions. Commencing on p 8 of those submissions is an extract from pp 57 to 61. At the end of p 10 commences a citation from p 61 of the transcript and on p 11 there is a lengthy citation from pp 70 to 72. At p 12 the following is stated in the written submissions: "[24] The above extracts from the voluntary ASIC interview also demonstrate that he did not knowingly make each false statement - ie., by respectively responding 'yes' or 'no', which meant - on the prosecution case he failed to disclose his lender accreditation status was terminated, this is because: (a) he did not read the questions properly at all; (b) his English was imperfect and even when taken to the question multiple times in the ASIC interview, his responses indicated he found it confusing." This submission then quotes those paragraphs of the defence submissions in the Local Court that I have already quoted. The appellant's submissions continue thus: "(c) Even if it were assumed, or proven, that the only available or rational inference was that the appellant read the questions properly and must have understood them when he answered as he did ('yes' or 'no') the evidence relied upon by the prosecution fails to prove beyond reasonable doubt that the appellant knew (as opposed to being reckless or negligent) 'that [his] accreditation was cancelled or terminated...other than for volume reasons'. It is convenient to address by repeating again below, in tabular form, her Honour's findings (as summarised above at par 15) as to why it was the case he knew this when making each false statement."

Consideration

I shall not recite the table set out by the solicitor for the appellant. The problem with the submissions is that they accept everything that was said by the appellant in the interview with ASIC. The appellant did not give evidence in the Local Court or in this Court. He has not stated on oath at any time that his ability to read English is imperfect, that he found the questions confusing and mis‑answered them, that he had difficulty in reading the form and merely filled it out as he thought it ought be filled out or that he was not aware that his licence had been suspended by ANZ, his personal licence had been suspended by ANZ, and that his relationship with the aggregator, FAST, had been terminated. This is not to invert the onus of proof.
The matter was the subject of a decision of the High Court of Australia in Mule v The Queen [2005] HCA 49. That was that rara avis, a unanimous joint judgment of five judges of the High Court of Australia, Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ. The appellant had been found guilty of having in his position a prohibited drug with intention to sell or supply it. He had participated in what in New South Wales would be called an ERISP in which he admitted that he had the drug on him but maintained that it was for his own personal consumption and not for distribution to others. At [3] their Honours pointed out this: "[3] In his summing-up to the jury, the trial judge referred to the use that the jury could make of the evidence of what was said in the interview. In the course of doing so, he contrasted the admissions made by the appellant with the exculpatory assertions of the appellant and his solicitor. What he said in that respect did not lead to any complaint, or request for re-direction, by senior counsel for the appellant at trial. Nevertheless, it became the subject of the sole ground of an appeal against conviction." The appeal to the West Australian Court of Appeal was dismissed [2004] WASCA 7. Commencing at [20] their Honours in the High Court of Australia said this: "[20] The primary argument must be rejected. The Criminal Code, in s 638, empowered the trial judge to make such observations on the evidence as he might think fit to make. The prosecution tendered (relevantly) the whole of the videotape of the police interview. On it, the jurors saw and heard the appellant's solicitor, with occasional support from the appellant himself, assert that the drugs were for personal use. They heard no sworn testimony from the appellant. What were they to make of that? The judge was bound to instruct them (as he did, in orthodox fashion) about the appellant's right to silence. He also instructed them that the whole of the contents of the interview amounted to evidence to which they could pay regard. It was legally correct for him to tell them that they were not obliged to give the same weight to everything that was said in the interview. Indeed, if he had not told them that, it is possible that they might have assumed the contrary, or at least they might have been left uncertain as to their capacity to discriminate between different parts of the evidence. [21] Jurors are commonly told that they may approach the evidence selectively and in a discriminating fashion, that it is for them to decide what evidence they accept and what evidence they reject, and that the law does not require them to give all evidence the same weight. An instruction of that kind, put as an abstract proposition, is an instruction of law. When related to the facts of a particular case, it may have the character both of an instruction of law and of an observation upon the facts. It is the duty of a trial judge to relate instructions of law to the facts, and, in the result, what is said to a jury may involve both instruction and observation. An observation by the trial judge that the appellant's out of court assertions, although disclosed in evidence by the prosecution's tender of the videotape, were not sworn testimony, that, unlike the admissions, they were not against the appellant's interests, and that the jury could give them less weight than the admissions, was proper. To a lawyer, it might seem to be a statement of the obvious, but it is understandable that a trial judge might make it. Some jurors could have been puzzled about the consequences of the prosecution having, in effect, put the defence case before the jury. In the circumstances of this trial, if the judge had not explained to the jurors that they were entitled to attach different weight to different things that were said during the interview, they might have felt obliged to give everything that was said in the interview equal value. [22] It was not a derogation from the appellant's right to silence for the trial judge to point out that the statements made in the course of the interview were not on oath. The expression 'right to silence' is used to refer to a number of distinct legal rules. It is a useful shorthand expression but it is a general description which does not always provide a safe basis for reasoning to a conclusion. In the present case what is important is that the appellant did not give evidence at his trial. In the days when, in most Australian jurisdictions, accused persons were entitled to make unsworn statements in court, it was not regarded as a derogation from their rights for judges to direct juries that what an accused said in these circumstances was to be regarded as 'a possible version of the facts' and that jurors should 'consider it with the sworn evidence, giving it such weight as it appears to be entitled to in comparison with the facts clearly established by evidence'. Nor was it regarded as such a derogation for a judge to comment that a statement was not on oath, and was not tested in cross-examination, and might not be considered as weighty as the evidence of witnesses under oath. The trial judge had already, uncontroversially, referred to the fact that the appellant had elected not to give evidence in court. It is difficult to explain the right to silence without drawing attention to the silence. Furthermore, as the judge pointed out, the appellant's silence was not complete. Having referred to the fact that the appellant did not testify on oath in court, having explained that it was his right to remain silent in court, and having warned the jury against inappropriate reasoning, the judge, when he came to deal with the out of court statements made by or on behalf of the appellant, could well have thought it proper to tell the jurors that it was open to them to evaluate those statements in that light. They could also evaluate those statements in the light of the fact that they were self-serving. As a matter of law, it was correct to tell the members of the jury that they were not obliged to attach the same weight to all the statements made in the interview, and that it was for them to decide the weight to be given to particular statements. As an observation on the facts, in the circumstances of this case, it was not inappropriate to point out that, while the admissions of possession were accepted by both sides at the trial to be true, the assertions about purpose were in dispute, that they were not supported by any sworn testimony and that they were self-serving. It would also not have been inappropriate to point out that the jury might think them to be of less weight than the admissions."
The problem that I, as the tribunal of fact, face is this, I know that the appellant has a master's degree in commerce from the University Of Central Queensland. He said that in the interview with the officers of ASIC. His knowledge of English must be good for him to obtain such a high academic qualification. University lectures in Australia are not conducted in Mandarin. The appellant has been in Sydney since 2004 or 2005 and I assume he may have been elsewhere in Australia prior to that time. In any event when giving the interview to officers of ASIC the appellant had been in Australia for at least 13 years, running a business involved in dealing with banks. The appellant's English could not be described as rudimentary.
It is easy to feign or profess ignorance of language if the language of which one claims ignorance or lack of facility is not one's native's language, I accept that the appellant's native language is Mandarin. However he has been in Australia for at least 13 years and obtained a master's qualification from a university in Queensland. He has been dealing since probably 2007 with banks initially working for Westpac and subsequently taking on since probably 2011 work as a mortgage broker dealing initially with the ANZ. His submissions about his inability with English have not been supported by any sworn evidence and an inability with English is inconsistent with the appellant's background, objectively. The Court is not required to give weight to self-serving protestations of being unable to comprehend the questions involved.
Furthermore, there is no suggestion that any of the other questions asked by the forms, either the ACL application or the ACL annual compliance certificates, any other question that was answered incorrectly or any other question that the appellant did not understand. He may have filled in ACL annual compliance certificates before that bearing the date 10 January 2017, but that should have made him familiar with the sort of questions that were asked and what must firmly have been in his mind was the fact that his licence, his ability to deal with the ANZ had been suspended, and his relationship with FAST had been suspended.
Indeed the overwhelming inference to be drawn from the ACL application on behalf of Aus Mortgage Pty Ltd dated 30 November 2016 is that the application was made because of the difficulties he had experienced with WIM. The fact he put Ms Lin in as the first of the fit and proper persons also speaks to the same effect, when it appears to be clear that Ms Lin was in fact someone that was working for him. If he were not accepted by ASIC as a fit and proper person then no doubt ASIC might still accept Ms Lin as a fit and proper person and therefore allow WIM to continue to deal with organisations other than the ANZ and FAST.
In the circumstances, I am not persuaded that the conviction recorded by the magistrate was incorrect. Indeed, I found her remarks compelling, albeit that I have not canvassed them because the authorities now make it clear that merely accepting what the Local Court did as being correct and lawful, I must conduct the appeal using my own approach to the evidence. Subject to the form of relief sought by the appellant, the appeal against the conviction is unsuccessful.

Submissions on sentence

I have now heard the submissions of the solicitors for the parties on the question of the severity of the sentence. The learned magistrate in the Local Court imposed an aggregate sentence. She fined the appellant $9,000. The appellant, through his solicitor, asks me to make an order under s 19B of the Crimes Act 1914 (Cth). The section is in terms familiar to those who practice law in this State. Section 19B(1) is this: "19B Discharge of offenders without proceeding to conviction (1) Where: (a) a person is charged before a court with a federal offence or federal offences; and (b) the court is satisfied, in respect of that charge or more than one of those charges, that the charge is proved, but is of the opinion, having regard to: (i) the character, antecedents, age, health or mental condition of the person; (ii) the extent (if any) to which the offence is of a trivial nature; or (iii) the extent (if any) to which the offence was committed under extenuating circumstances; that it is inexpedient to inflict any punishment, or to inflict any punishment other than a nominal punishment, or that it is expedient to release the offender on probation; the court may, by order: (c) dismiss the charge or charges in respect of which the court is so satisfied; or (d) discharge the person, without proceeding to conviction in respect of any charge referred to in paragraph (c), upon his or her giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he or she will comply with the following conditions: (i) that he or she will be of good behaviour for such period, not exceeding 3 years, as the court specifies in the order; (ii) that he or she will make such reparation or restitution, or pay such compensation, in respect of the offence or offences concerned (if any), or pay such costs in respect of his or her prosecution for the offence or offences concerned (if any), as the court specifies in the order (being reparation, restitution, compensation or costs that the court is empowered to require the person to make or pay): (A) on or before a date specified in the order; or (B) in the case of reparation or restitution by way of money payment or in the case of the payment of compensation or an amount of costs - by specified instalments as provided in the order; and (iii) that he or she will, during a period, not exceeding 2 years, that is specified in the order in accordance with subparagraph (i), comply with such other conditions (if any) as the court thinks fit to specify in the order, which conditions may include the condition that the person will, during the period so specified, be subject to the supervision of a probation officer appointed in accordance with the order and obey all reasonable directions of a probation officer so appointed."
The first matter that needs to be considered is one of the matters that might enliven the Court's ability to grant relief under s 19B(1) in accordance with the subparagraphs in par (b). The appellant relies upon his prior good character, his antecedents and his age. Of course his age is relevant to the question of his prior good character. The longer one lives in society as an adult and stays out of the criminal justice system, the more firmly one shows one's good character. At the current time the appellant is 43 years old. At the time of the first offence, I have identified, the sequence 3 offence, he was 38 years old.

Appellant's Background

His background I have described in part from the material to which I was taken on assessment of the appeal against the conviction. However I have now been taken to other matter relating to sentence. Counsel who appeared for the appellant in the court below, Mr Warr, told her Honour this: "Your Honour, following school, [he] completed a mechanical engineering degree over four years at university, then commenced studying for six months in Beijing, studying English. He then returned home, worked for his parents for approximately two years, came to Australia as a student on a student visa in 2003, continued to study English before doing a certificate of civil engineering at the University of New South Wales. He thereafter studied IT in the University of Queensland but in the Sydney campus here. After doing all that education he struggled to find appropriate employment. He worked at 7-Eleven, he also worked at a gift shop at Sydney Airport and also worked as a delivery driver. After doing that for a period of time, he eventually found employment at Westpac as a loan officer, worked there for two years. Left and then worked for a Chinese mortgage company as a consultant for approximately 12 months. He then started his own mortgage company, Shining Crown, for approximately one to two years, and then of course in 2012, as your Honour has heard evidence, he started [WIM]. In terms of his personal circumstances, he met his wife whilst working at Westpac. They have a ten year old boy. She still works part-time there in administration and earns approximately $45,000 per year and they live together in a two-bedroom unit in Rhodes." Mr Warr went on to point out to her Honour that once WIM's accreditation with FAST ended in mid-2016 the business deteriorated and the value of the company was greatly diminished. A similar submission has been put before me today.
That establishes this about the appellant's antecedents, that he is an intelligent man who has worked hard and despite initially finding it difficult to obtain employment in this country, did so and built up his business as a mortgage broker. The suspension of his accreditation as a broker with ANZ and the termination of the agreement between WIM and FAST clearly caused financial detriment to the appellant's company and it in essence diminished greatly the value of that company. In those circumstances it appears to me to be rather contradictory to impose a significant fine upon the appellant.

Extent of the criminality

There is no way in which I could find that the extent of the offence itself was trivial, other than to point out that there could be many greater misrepresentations made by an applicant for an ACL made in the process of completing an ACL annual compliance certificate. For example, the cases referred to by Ms Martinez, for the appellant, refer to a case where a man forged an educational certificate and provided a table referring to educational qualifications that he did not have. Such would be more significant breach of s 225(3) of the National Consumer Credit Protection Act 2009 (Cth).

Purposes of the legislation

There are a number of purposes served by ACL's. There is firstly the protection of lenders and secondly the protection of the consumer of the Australian credit. To do that requires persons to be of good character and integrity and competence, a point made validly by the learned magistrate. Here there is no evidence that the false statements made by the appellant caused any detriment to a lender, nor is there any evidence that they caused detriment to any consumer of credit. Rather, the offences relate to the providing of information by the holders of ACL's, essentially a system relying on self‑reporting, as does the system employed for regulating other trades and professions, including the law, medicine, pharmacy, dentistry and similar occupations.

Relevant matters

There are a number of matters which are pertinent. The first of course is the ability of a person such as the appellant to pay a substantial fine. There is no suggestion that he could not pay the fine. Rather, what is relied upon essentially by the appellant is the fact that a recording of a conviction may have other consequences, such as inability to be the director of a company or inability to obtain a fresh ACL. The material before me tells me that the appellant has surrendered the ACL granted to WIM and it would appear that, if he wish to re‑enter the market as a mortgage broker, he would need to make a fresh application to ASIC. If no conviction be recorded it might make it theoretically possible for the appellant to make a further application but no doubt ASIC would scrutinise such an application extremely carefully.
Another matter which needs to be taken into account is this. After getting into difficulty the appellant attended the Australian Colleague of Professionals and obtained a Diploma of Financial Planning, a copy of that accreditation is exhibit 2 before me. He has also attended Financial Services and Responsible Managers Masterclass, and Responsible Manager Compliance Training: the documents in exhibit 4 before me relate to such training. That training was undertaken in 2018. In other words the appellant has done his best to rehabilitate himself, to increase his range of training, to increase his qualifications, to try to make him a better mortgage broker should he be readmitted to that occupation. Rehabilitation is always something to be considered in any sentencing exercise.

Delay

The other matter that I take into account is this. It is now five years since the appellant's ability to deal with the ANZ was suspended and it is now five years since the agreement between WIM and FAST was suspended and then cancelled, and the matter has been hanging over the appellant's head for some considerable time. A submission was made in the Court below about delay which gained this observation by Ms Nunn, who appeared for the Commonwealth Crown in the Court below: "Your Honour, just in relation to the submission as to the passage of time since the offending, in my submission there is no delay, the record of interview was conducted in July 2018 and the CAN was served in November 2019."
In MFI 3 Ms Martinez for the appellant points out that the matter was referred by ASIC to the Commonwealth Director of Public Prosecutions on 9 May 2019 and the charges were laid on 19 November 2019. It is clear to me however from reading those parts of the interview between the appellant and the officers of ASIC on 5 July 2018 that they were well aware of the matter which constitutes the offences at the time of the interview. It is true that they may have wished to explore other matters as well as the matters that are currently before me, but the prosecution could have been launched much earlier than it was and conducted earlier than it was. I also must not take into account any time spent since the commencement of the hearing in the Local Court on 17 August 2020 and today, a period of less than a year, because that delay was caused by the offender pleading not guilty, the matter going to trial, his conviction and then his appeal to this Court which has been unsuccessful. Accordingly there was delay of some four years which, with the upmost respect to the Crown, has not been adequately explained. That has provided some form of "punishment" in that the matters were hanging over the appellant's head.

Victim?

Returning then to s 19B it can be seen that the only established victim, and by established victim I mean identifiable victim of the appellant's criminal conduct, was himself.
I have reached the view in light of the accused's age and antecedents, that it is inexpedient to inflict any punishment other than a nominal punishment.

Relevant Authority

The Crown has drawn my attention to the decision of the Federal Court of Australia in Matta v Australian Competition and Consumer Commission [2000] FCA 729. In that case the primary judgment was delivered by Kiefel J (as she then was). At [8] her Honour said this: "[8] In his reasons, [Dowsett J] identified the following factors as relevant: That the absence of the required warning on the sunglasses posed a safety threat to persons whilst driving and could affect other persons; his serious view of the offences; that those who manufactured and supplied sunglasses had both a legal and moral duty to comply with Australian standards which were designed to meet real needs; that the appellant was aware that the sunglasses did not comply with the relevant standards and were supplied notwithstanding non-compliance; that the offences were motivated by commercial considerations, and that a punishment must be such as to pose a deterrent to others who may be minded to ignore the standards. On the other hand, his Honour took into account the appellant's age and the fact that he would be faced with a substantial bill for legal costs. This was influential in particular with respect to the extent of the fine, the prosecutor having pressed for a larger penalty. His Honour also took into account that, to an extent, the appellant had been overborne by his business partner. As against that, the appellant was found by his Honour to have been aware of the standards of his profession as an optician and the relevant legal requirements." The appellant in that case was complaining about the failure of the trial judge to make an order under s 19B of the Crimes Act 1914. The appeal was unsuccessful. As her Honour said at [13]: "It is clear that his Honour was not inclined to exercise the discretion under s 19B because of the serious view he took of the offences, which involved aspects of safety for the public, that the appellant was aware of the standards to be applied and what they required, and that he was motivated by commercial and financial considerations." Her Honour pointed out that it was not possible to point to any improper exercise of the trial judge's sentencing discretion.
The Crown relied in particular upon a dictum of French J (as his Honour then was). His Honour's judgment commences thus: "[1] I agree for the reasons given by Kiefel J that the appeal should be dismissed. In Lanham v Brake (1983) 13 A Crim R 293, Cox J said of s 19B of the Crimes Act 1914 that: '...the exercise of a s 19B discretion requires more than the mere establishment of one of the par (b) conditions.' (at 300) [2] Quoting Windeyer J from Cobiac v Liddy (1969) 119 CLR 257, he said: 'Its, or their, existence must, it seems to me, reasonably support the exercise of the discretion the statute gives. They are not mere pegs on which to hang leniency dictated by some extraneous and idiosyncratic consideration.' [3] The exercise of the discretion under s 19B is exceptional. For the reasons given by Justice Kiefel, his Honour, in my opinion, properly exercised his discretion in that regard. Even had it been demonstrated that he approached that task with the unduly narrow focus asserted on behalf of the appellant, that would not have led the Court necessarily to intervene - R v Johnston (1987) 45 SASR 482 at 485-486. [4] This was not an appropriate case for the invocation of s 19B when proper regard is had to all the factors which his Honour identified including the seriousness of the offence and the want of remorse on the part of the appellant. The appellant was not able to enjoy the benefit of a plea of guilty in the submission in mitigation and had the burden of an adverse finding as to his credit in relation to evidence given by him at the hearing."
Whilst great weight ought be given to any pronouncement by a judge who ultimately became the Chief Justice of the nation, it is hard to accept that s 19B of the Crimes Act 1914, like s 10 of the Crimes (Sentencing Procedure) Act 1999, could only be applied in exceptional circumstances. Here, of course, there is no reason to extend any leniency to the appellant, after all he pleaded not guilty, was found guilty, and persisted with his protestation of a lack of guilt by bringing the appeal to this Court which led me to find that the finding of guilt should not be disturbed. However, as I pointed out on a positive note, there have been attempts made by the appellant to improve his qualifications so that should he be permitted to re‑join the occupation of mortgage broker, he would do a better job in the future than he had done in the past.
In the circumstances I have come to the view that it is inappropriate to record a conviction for a man who has until recent times led an unblemished life and to impose a fairly nominal punishment as provided by s 19B.
For those reasons I set aside the convictions recorded and the sentence passed by the Downing Centre Local Court on 27 November 2020. I find each of the three charges proved. Without proceeding to conviction the appellant is discharged on his giving security of $1,000 by recognizance to the satisfaction of the registrar that he will comply with the following conditions: 1. that he will be of good behaviour for a period of two years; 2. that he will appear before the Court at any time if called upon to do so at any time during the term of the recognizance.
That ruling is in respect of each offence. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 March 2022

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