R v Falconer - [2018] NSWSC 1765 - NSWSC 2018 case summary — Zoe

NSWNSWSC

R v Falconer

[2018] NSWSC 1765

Supreme Court of NSW|2018-11-09|Before: Adamson J

View original source

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2018-11-09

Before

Adamson J

Source

Original judgment source is linked above.

Judgment (70 paragraphs)

[1]

Solicitors: Commonwealth Director of Public Prosecutions (Crown) Musgrave Legal (Offender) File Number(s): 2017/269483

[2]

Introduction

John Falconer (the offender) stands to be sentenced for six offences: five offences contrary to s 184(2) of the Corporations Act 2001 (Cth) (counts 1-5 on the indictment) and one offence contrary to s 1309(1) of the Corporations Act (count 6 on the indictment). The maximum penalty for the s 184 offences is 5 years and/or a fine of 2000 penalty units ($220,000). The maximum penalty for the s 1309 offence is 5 years and/or a fine of 200 penalty units ($22,000). All of the offences were committed when the offender was a director of TZ Limited ACN 073 979 272 (TZ).
Counts 1, 2, 3 and 5 allege dishonest breach of the offender's duty as a director with the intention of dishonestly gaining an advantage for himself or someone else contrary to s 184(2)(a) of the Corporations Act. Count 4 alleges dishonest breach of his duty as a director, reckless as to whether this may result in advantage for someone else, contrary to s 184(2)(b) of the Corporations Act. The offender committed the offences in counts 1-5 between 8 December 2006 and 24 September 2008.
The facts surrounding counts 1-5 are set out in more detail below. The dates, beneficiaries and amounts are summarised in the following table: Count/ section Dates of payments Beneficiaries Amount and type of benefit 1 The Oasis Transaction s 184(2)(a) 8 Dec 2006 ZMS Investments Pty Ltd (ZMS) & Sigalla $300,000 to ZMS 28 Dec 2006 Chyron Services Ltd (Chyron) & the offender $300,000 to Chyron 2 Feb 2007 Joyeagle Ltd (Joyeagle), the offender & Sigalla 847,458 shares in TZ issued to Joyeagle 2 The O'Donnell Transaction s 184(2)(a) 5 July 2007 Golf Link Partners Pty Ltd and Sigalla $300,000 to Golf Link 14 Feb 2008 ZMS and Sigalla $200,000 to ZMS 20 Feb 2008 BZI and Sigalla $500,000 to BZI 3 The Reader China Transaction s 184(2)(a) 19 July 2007 Profit Pearl Holdings Ltd (Profit Pearl), the offender and Linda Lau $400,000 to Linda Lau, of which $300,000 subject of charge 4 The Sigalla transfers s 184(2)(b) 25 Feb 2008 BZI and Sigalla $68,000 to BZI 20 March 2008 ZMS $300,000 to Heidtman on account of a creditor of ZMS 17 July 2008 BZI and Sigalla $500,000 to BZI 21 July 2008 BZI and Sigalla $167,783.37 to BZI 23 July 2008 BZI and Sigalla $600,000 to BZI 18 Aug 2008 BZI and Sigalla $525,000 to BZI 24 Sept 2008 BZI and Sigalla $500,000 to BZI 5 The Cyplex transfers s 184(2)(a) 31 Dec 2007 Cyplex Company Inc (Cyplex) $540,000 3 March 2008 Cyplex $576,000

[7]

TZ's accountants

The offender is a chartered accountant and was a director of Dunbar Associates Pty Ltd 062 305 800 (Dunbar Associates), which provided accounting and corporate secretarial services to TZ from about 2004.
In late 2005, when TZ moved its business operations to the Chicago offices of TZI, the books and records of TZ were moved to the offices of Dunbar Associates in Pitt Street, Sydney, NSW. In 2007, TZ occupied an office in Bligh Street, Sydney, NSW and Dunbar Associates moved to share that office space.
From 2004 Dunbar Associates employed Farouk Fagredin, who did the day-to-day banking and bookkeeping for TZ from 2004 to May 2009. His tasks included maintaining TZ's general ledger, arranging payments to suppliers, performing banking duties such as arranging the transfer of funds, preparing consolidated worksheets for TZ, drafting Quarterly Appendix 4C and Half Yearly Appendix 4D Financial Reports and drafting accounts for other financial reports that were required to be lodged with the ASX. Mr Fagredin reported directly to the offender, who instructed him as to what transactions to effect and how they were to be recorded in TZ's general ledger. The offender finalised and approved all of the reports that Mr Fagredin drafted for TZ.
From time to time Mr Fagredin also complied with requests from Sigalla that payments be made by TZ to certain suppliers, that funds be transferred from TZ to other parties (predominantly Sigalla-related entities) or that funds be drawn down from term deposits held by TZ. It was an agreed fact that when Mr Fagredin received such instructions from Sigalla, his usual practice was to obtain confirmation from the offender that such transactions were authorised before effecting them. As there was no evidence to suggest either that Mr Fagredin did other than follow the offender's instructions or that Mr Fagredin obtained any benefit from any of the transactions the subject of counts 1-5, I am satisfied that Mr Fagredin acted on the offender's instructions in respect of all acts done by him which are referred to below.

[22]

The unauthorised benefits

The three transactions the subject of count 1 are as follows. 1. On 8 December 2006, $300,000 was transferred out of the TZ Share Placement Account and credited to the ZMS Account. The written instructions for the transfer bore the electronic signature of Mr Kelliher, although he had not authorised it to be used for this transfer. 2. On 28 December 2006, $300,000 was transferred out of the TZ Share Placement Account and credited to a bank account in the name of Chyron. The written instructions for the transfer bore the signatures of the offender and Mr Kelliher, although Mr Kelliher had not authorised his signature to be used for this transfer. 3. On about 29 January 2007, TZ issued 847,458 shares in TZ worth $500,000 to Joyeagle. The proceeds of the sale of the shares were used for the benefit of the offender and one of his clients, Stephen Harvey, as well as to pay Intertrust's fees for its role in the sale of the shares.
The offender and Sigalla made various arrangements, set out below, to hide the fact that these transactions were for their own benefit and not for the benefit of TZ.
Their arrangements were recorded by the offender in a misleading diary note as follows: "13 Nov 06 Oasis note deal is 6% to Andy [Lai] and 6% to Linda [Lau] split 4 ways (AL-LL-AS-JF) - 50% shares at 59c and 50% cash - JF [the offender] needs HK entity to take up 6% and distribute. 29 Nov 06 AJS [Sigalla] confirmed HK is 50/50 4 Dec 06 He [Sigalla] now says the split is 6% to Andy [Lai] and the other 6% is ½% to Linda and the balance 50/50. Andy will not now take his 6% in cash and shares. Only cash."
Emails were also sent between the offender and Sigalla in December 2006 in which they discussed the creation of a false invoice for $1.2 million which would be made to look as if it had come from Ms Lau.
Further, the offender instructed Mr Fagredin as to how he should record (falsely) the payments made to Mr Lai and Ms Lau and the benefits illegitimately obtained by the offender and Sigalla in TZ's general ledger. The offender's instructions were as follows: "Debit to Share Issue Costs A/c 3-1150 8 Dec 06 ZMS Investment Pty Limited $ 300,000 28 Dec 06 Yorkshire Capital [Mr Lai's company] $1,200,000 28 Dec 06 Chyron Service $ 300,000 28 Dec 06 Linda Lui [sic] $ 100,000 Debit to Deferred acquisition cost lic A/c 1-3241 29 Jan 07 issue of shares in lieu of final payment to external $ 500,000"

[49]

The offender's departure from Australia and the laying of charges against the offender and others

On 13 March 2012, the offender left Australia. He indicated on his departure card that he intended to stay overseas for 28 days. A border alert was put in place following his departure. It was not triggered between March 2012 and September 2017 as the offender did not return to Australia during that period. Charges were laid against the offender on 21 December 2012. Between 14 March 2012 and 28 February 2014 the offender travelled out of Thailand at least once a month, usually for a period of 1-3 days. From 14 March 2012 to 15 May 2013 the offender travelled on his Australian passport and from 17 May 2013 to 28 February 2014 he travelled on his British passport.
On 19 February 2013, Mr Fagredin pleaded guilty to one offence against s 1307(1) of the Corporations Act (falsification of a company's books). On 15 May 2013 he was convicted and released, without passing sentence, on a 12-month good behaviour bond with surety of $2,000 pursuant to s 20(1)(a) of the Crimes Act 1914 (Cth).
On 16 May 2013 ASIC sent an email to the offender's last known Australian legal representative, advising that an arrest warrant had been issued against the offender and seeking confirmation as to whether he continued to act on the offender's behalf. On 20 May 2013, ASIC received a response that the solicitor had no instructions to act on the offender's behalf. On 22 May 2013, the offender contacted ASIC by email and sought details of the arrest warrant and charges. This information was provided the following day.
Between 10 June 2013 and 11 October 2013, ASIC and the offender exchanged emails on at least 12 further occasions. ASIC set out the bail conditions to which it would agree were the offender to return to Australia. The offender took exception to the proposed bail conditions on various grounds, including that he no longer had an identified residence in Australia and that he wanted to preserve his right to leave Australia while on bail. On 11 October 2013 ASIC advised the offender to instruct a lawyer in Australia to act on his behalf. Further charges were laid against the offender on 18 February 2014.
ASIC prepared an extradition brief for the Attorney-General's Department which was required to be translated into Thai at an approximate cost of $50,000. The extradition request was presented to the Ministry of Foreign Affairs of the Kingdom of Thailand on 9 December 2014. On 9 January 2015 the request was forwarded to the Thai Office of the Attorney-General, which is the central authority for extradition in Thailand.
The offender explained in his oral evidence that he decided to go to Thailand and not return to Australia because he did not want to "get bogged down in the whole mess" of Sigalla's trial and did not want to be tried jointly with him. He said that he was "broke" as a result of the settlement with TZ and would have been unable to work in Australia because of the investigation and the offences with which he had been charged. Shortly after his resignation from the board of TZ in mid-2009, the offender also resigned from the board of Kingsgate Consolidated Limited (Kingsgate), a company which operated a mine in Thailand, on the basis that he was under investigation in Australia. The offender continued to work in Thailand as a consultant, including for Kingsgate. In 2012 Kingsgate employed the offender in Thailand as he was well regarded and thought to have the appropriate skills.
The offender explained that he decided to remain away from Australia until Sigalla's trial was over to see what happened to him. He had what he described as a "forlorn and stupid hope that [Sigalla] would be found not guilty", which would mean that the charges against the offender would be likely to be dropped.
On 22 November 2016, Sigalla was convicted, after a trial by jury, of 24 counts under s 184 of the Corporations Act. The offender learned the result of Sigalla's trial on or about that date. On 3 February 2017, Sigalla was sentenced to an overall term of imprisonment of 10 years with a non-parole period of 6 years: R v Sigalla [2017] NSWSC 52. The offender became aware of Sigalla's sentence not long after it was imposed.
Notwithstanding Sigalla's convictions after trial, the offender still hoped that the Director of Public Prosecutions (Cth) (DPP) would not prosecute him for the offences with which he had been charged. However, he knew that, at some point in the future, there was a prospect that he would be arrested and brought back to Australia to be tried.
The offender did not attempt to hide his whereabouts from the Australian authorities, who knew his email address and phone number. He was also known to the Australian ex-patriate community in Thailand.
Ultimately, on 5 April 2017, the Thai Criminal Court issued an arrest warrant for the offender which was forwarded to the Thai police to be executed. The offender was arrested on 1 June 2017. On 2 June 2017, he consented to his return to Australia. On 5 September 2017, after the requisite period elapsed for revocation of consent, the offender was brought back to Australia in the custody of the Australian Federal Police. He has remained in custody and has not applied for bail.
The offender was committed to this Court on 2 May 2018 following his waiver of the right to a committal hearing in the Local Court. On the first occasion the matter came before this Court, 1 June 2018, the offender indicated that he intended to plead guilty but sought time for plea negotiations. At the sentence hearing on 9 November 2018 the offender formally entered guilty pleas to the six counts on the indictment. The statement of agreed facts, which was detailed, avoided the need for a significant amount of evidence to be adduced.

[52]

The nature and circumstances of the offences and whether they constitute a course of conduct

The relevant facts are as set out above. As a director of TZ Ltd, the offender was placed in a position of considerable trust, which he abused over an extended period. He acted in gross dereliction of his duty. The offences involved both dishonesty and greed. His offending conduct took place over a period of two years and three months. The offender's personal gain was $1,416,000, being the sum of $300,000 (count 1) and $1,116,000 (count 5). He turned a blind eye to several transactions by which Sigalla personally gained at least $2,660,783. The overall total of the impugned transactions was $6,276,783. The amount of money concerned is a relevant matter in determining the gravity of the offences: R v Hawkins (1989) 45 A Crim R 430 at 435 (Lee J, Newman and Loveday JJ agreeing).
In cross-examination, the offender said that he took the money which comprised the Cyplex transactions in order to restore funds to his clients because Sigalla had commandeered all of the TZ shares which the offender and his clients owned. The monies transferred to Cyplex were, nonetheless, for the offender's benefit. While I accept that this may have been the offender's motive for the Cyplex transactions, the duties owed by the offender to TZ and its shareholders required him to stand up to Sigalla and not, as occurred, collaborate in fraudulent transactions to the detriment of TZ. Although the offender was, in one sense, a victim of Sigalla's capacity to engineer situations which compromised others for his own benefit, the offender was also a perpetrator.
It is also significant that the offender used his position to render detection significantly more difficult by authorising the false recording of the transactions in the TZ general ledger.
Before determining the objective seriousness of the offences, it is necessary to deal with the Crown's submission that the mandate letter made the offending more serious. Leaving aside the separate principles which apply to uncharged conduct in the area of sex offences, there are substantial limits on the use to which post-offence conduct can be put in assessing objective seriousness: see the discussion in R v Wilkinson (No 5) [2009] NSWSC 432 at [61] (Johnson J). A review of the authorities indicates that post-offence conduct is typically regarded as increasing the objective seriousness where the offence is murder and the offender has disposed of the body or acted in some way which made the homicide more heinous.
The Crown relied on Einfeld v R [2010] NSWCCA 87; (2010) 200 A Crim R 1 in support of its submission that the creation of the mandate letter could be taken into account to increase the objective seriousness of the offender's criminality. In that case the appellant had told three lies in the witness box: first, that he was not driving the speeding vehicle; second, that he had been in Forster at the time; and, third, that a named American resident (who was deceased at the time) had been the driver. The appellant was charged with one count of perjury, which related to the first lie. In that case there was a direct connection between the charged conduct (the first lie) and the uncharged conduct (the second and third lies) each of which occurred within a period of minutes in the same context. The sentencing judge took the other two lies into account, not because they, of themselves, added to the objective seriousness of the first lie, but because they indicated that the charged lie was "not a spontaneous response given in the witness box, but a planned response to an expected question": Einfeld v R at [143] (Basten JA).
The present case is, in my view, distinguishable. Although the offender can be taken to have appreciated that he and Sigalla were connected in that their conduct was being investigated by ASIC and the offender's role in Sigalla's crimes was integral, the Crown accepted that they could not link the mandate letter and the invoices to the particular counts to which the offender has pleaded guilty. It would appear that the offender could have been charged with an offence for his role in the creation of the mandate letter, but he was not. Nor was Sigalla charged with creating the mandate letter; the evidence relating to Sigalla's creation of the mandate letter was relevant in his trial because of its capacity to amount to a consciousness of guilt: R v Sigalla at [69]. I do not regard the principle in The Queen v De Simoni (1981) 147 CLR 383; [1981] HCA 31 as apt since the further uncharged offence has not been shown to amount to a more serious offence than those for which the offender pleaded guilty. In my view, the reason the post-offence conduct ought not be taken into account is that it does not bear a sufficiently close connection with the subject offences such as to increase their objective seriousness.
For these reasons, I do not regard the offender's part in the mandate letter (by signing it and applying the electronic signature of Mr Leibowitz to it) as increasing the objective seriousness of the offences for which he is to be sentenced. I have not taken the mandate letter into account in assessing their objective seriousness.
I regard counts 1-5 as very serious for the reasons given above.
Count 6 concerned the filing of the reports with the ASX which the offender knew to be misleading and deceptive. The Quarterly Report failed to disclose payments to directors or related entities which amounted to a sum in excess of $2.5 million. In the Half Year Financial Report, the assets of TZ were overstated by at least $6 million (being the sum of the amounts in counts 1-5). These two matters were potentially highly germane to future investors in, and existing shareholders of, TZ. The offender's filing of these returns with the ASX which grossly overstated TZ's assets and failed to disclose significant benefits paid to directors and related parties, particularly of the magnitudes in the present case, is objectively very serious.

[54]

Degree of contrition, co-operation with the authorities and willingness to facilitate the administration of justice

The offender admitted in oral evidence that he knew that he had a responsibility, as a director of TZ, to act in the interests of the company and its shareholders and that he knew at the time of the offending that his conduct was dishonest and in breach of his duties as a director.
In October 2018 the offender admitted to Karen Burgoyne, psychologist, that his reasons for committing the offences were a combination of greed and poor judgment, which he rationalised on the basis that it was relatively common behaviour and that there was a chance that he would be able to pay the money back (presumably from the profits made if the NASDAQ listing went ahead). He told Geoffrey Galloway, the author of the pre-sentence report, that "similar conduct was commonplace amongst his peers during what he described as the 'heady days' prior to the [GFC] of 2008".
In his affidavit, the offender said that he "buried [his] head and ignored what was happening". He also deposed that he appreciates that what he did was wrong. He said: "l deeply regret the hurt I caused to others over the period of offending and now realise that my failure to step in and stop what was happening hurt the company, those associated with it, and the general confidence of the corporate system."
Prior to his departure from Australia in 2012, the offender's co-operation with authorities was required by law and cannot, therefore, be regarded as voluntary. He was required to attend the examinations pursuant to s 19 of the ASIC Act and to answer questions posed in the examinations truthfully.
The offender has expressed contrition to Ms Burgoyne, in his affidavit and in his oral evidence and has demonstrated a willingness to facilitate the course of justice since his return to Australia under the extradition process. I accept his contrition as genuine and that, from 1 June 2017, he has been willing to facilitate the course of justice. He has made some reparation to TZ by settling the claim referred to above, which is also to be taken into account in his favour. I accept the Crown's concession that the fact that the offender did not contest his extradition is a factor to be taken into account in his favour: AB v The Queen (1999) 198 CLR 111; [1999] HCA 46 at [55] (Gummow and Callinan JJ) and [91]-[100] (Kirby J).
As referred to above, the offender was in custody in Thailand from 1 June 2017 to 5 September 2017 in conditions which were significantly more onerous than those to which he has been subjected since his return to Australia. I take into account the length and the conditions of his incarceration in Thailand in the overall sentence: R v Kinch [2016] NSWSC 63 at [87] (Hidden J). He has not applied for bail since his return to Australia. I also regard his guilty plea as indicating contrition and a willingness to facilitate the course of justice and will take it into account on that basis as well as for its utilitarian value (see below).

[56]

Deterrence: specific and general

In the present case, I do not regard specific deterrence as a matter of particular weight since it is unlikely that the offender will ever be placed in a position of trust again.
However, general deterrence is of significance, especially as offences of this sort are notoriously difficult to detect: R v Pantano (1990) 49 A Crim R 328 at 330 (Wood J, Carruthers J agreeing). As the Victorian Court of Appeal said in Director of Public Prosecutions (DPP) v Bulfin [1998] 4 VR 114 at 131-132: "The motivation to engage in conduct of the kind here under consideration may spring from many sources: a position of trust and the easy ability to abuse it; the enormous rewards that may be available; a position of high authority in some substantial enterprise and the offender's assumption that discovery or proof of wrongdoing can be avoided; greed or the burden of funding an extravagant lifestyle; weakness in succumbing to outside pressures to use deceitful means for business ends; and personal or corporate ambition, to name but a few. Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money, and, frequently, losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. Detection is difficult, the investigation of the crime usually lengthy and very expensive, and the problems of trial and proof will frequently be extreme. . . . The result of such considerations, in my view, is that the element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period; together with a requirement for strong denunciation by the sentencing court."
General deterrence is also significant in the context of the offender's statements to the effect that behaviour such as his was commonplace in the lead-up to the GFC.
It is important to emphasise that the role of general deterrence (and denunciation) in sentencing is not limited to the utilitarian purpose of regulating the risks of deviant behaviour. The obligation of the state (through the sentencing court) is also to express the community's disapproval of the offending conduct: Munda v State of Western Australia (2013) 249 CLR 600; [2013] HCA 38 at [54] (French CJ, Hayne, Crennan, Kiefel, Gageler and Keane JJ).

[58]

Character, antecedents, age, means and physical or mental condition of the offender

The offender has no criminal history. He has adduced evidence that showed that, compared to Sigalla, he grew up in relatively modest circumstances. He has also adduced evidence of his good character, including from persons who worked with him in Thailand for Kingsgate who were surprised at the charges as they regarded him as an honest person of good character. In the context of offences such as the present, good character is not as significant a mitigating factor: R v El Rashid (Unreported, NSW Court of Criminal Appeal, 7 April 1995) (Gleeson CJ). It is also significant that the offending conduct occurred over an extended period: R v Kennedy [2000] NSWCCA 527 at [22] (Howie J, Simpson J agreeing).
The offender qualified as an accountant after finishing school and worked consistently for the following decades both in Australia and overseas in responsible positions, including as a director, company secretary or Chief Financial Officer for several ASX-listed companies. From 1983 he operated his own accountancy practice. The offender began the course of offending conduct at the age of 58, when he had considerable professional experience as an accountant and auditor. He is now 70 years old.
The offender adduced evidence to the effect that he has had a lifelong history of depressive symptoms. Ms Burgoyne considered that he would meet the diagnostic criteria for Persistent Depressive Disorder (Dysthymia). She opined that these symptoms combined with the offender's personality traits to result in his engaging in a range of risky and irresponsible behaviours including repeated infidelity, excessive use of both legal drugs, alcohol and illicit drugs (including cocaine) as well as the offending conduct. The offender gambled to a modest extent. He knew that Sigalla was a gambler but was not aware of the extent of Sigalla's gambling debts.
The offender admitted to Ms Burgoyne that, throughout the period of offending, he was "living the high life" with Sigalla and used cocaine at work and as part of his leisure. He said in evidence that he had used cocaine overseas more than in Australia as it was relatively inexpensive overseas. He explained that, by "high life", he was referring to travel, lunches, dinners and cocaine but said that he did not buy "Armani suits or flashy cars". He accepted in cross-examination that his depression did not cause him to offend.
The offender admitted that the depression really emerged when "everything was falling down in 2007-2008". I understood this to be a reference to the GFC, which destroyed the prospect of TZI being listed on the NASDAQ. The offender realised that this, in turn, would result in TZ's shares losing value (rather than increasing substantially, as would have occurred in the event of a successful float of TZI), and would mean that the offender would not be able to pay back the money he had been responsible for taking from TZ. This would increase the prospect that the fraudulent transactions would be revealed.
I have taken these matters into account, although I note that there is no reliable evidence to indicate that the offender did not, at any given time, appreciate the gravity of his wrongdoing or the need to disguise it because of its criminality. The instructions he gave Mr Fagredin to record the transactions in TZ's general ledger indicated a substantial level of subterfuge.
The offender's physical health is affected by various medical conditions (thrombocythemia, high blood pressure, chronic back pain, migraines, irregular heartbeat, osteoarthritis in knees and hips and depression). He is also partially deaf and suffers from sleep apnoea. I have taken these matters into account in determining the sentence to be imposed, having regard to the principles expressed in R v Achurch [2011] NSWCCA 186; (2011) 216 A Crim R 152 at [117] (Johnson J).

[63]

Delay

Delay between offending and sentence is potentially relevant in three respects. First, the "uncertain suspense in which a person may be left" for an extended period can, in some circumstances, be taken into account. Secondly, an offender may demonstrate progress towards rehabilitation in the intervening period. Thirdly, a sentence for a "stale crime" calls for a "measure of understanding and flexibility of approach": Blanco v R [1999] NSWCCA 121; (1999) 106 A Crim R 303 at [16].
In the present case, the period between the offending conduct and the charges being laid has been explained by David Flintcroft, a lawyer in the Corporations and Corporate Governance Enforcement team of ASIC, whose affidavit was read without objection and who was not cross-examined. The relevant chronology has been set out above. I do not regard the period of about three years and six months for the investigation of the offences and the formulation of charges as unreasonable in the circumstances or as indicating any lack of expedition. I reject the offender's submission that: "[H]e has not added to the complexity or the length of the investigations. The blame for that course falls squarely on Sigalla."
Such was the offending conduct and the subterfuge of the offender and Sigalla that a long and detailed investigation was necessary to reveal the nature of the transactions and their illegality. As appears from the narrative set out above, the descriptions of the transactions were themselves misleading which would inevitably have prolonged the investigation.
Ms Morgan SC, who appeared for the offender, accepted that the time the offender spent in Thailand until his extradition was "neutral" in that the offender could not say that ASIC or the DPP delayed the prosecution of the offences and the Crown accepted that the offender did not hide from the prosecutors and was entitled to wait to be extradited. I understood it to be common ground that I could not take the delay into account in favour of, or against, either the offender or the Crown. However, one consequence of the time the offender spent in Thailand is that he is now seventy years old. I have taken into account the offender's age as part of his subjective circumstances.

[64]

Parity

It was common ground that the principles of parity apply between the offender and Sigalla. Equal justice requires that, as between co-offenders, there should not be any marked disparity of sentence that gives rise to a justifiable sense of grievance: Postiglione v The Queen (1997) 189 CLR 295 at 301; [1997] HCA 26.
There are significant differences between the offender's involvement and that of Sigalla. Further, as referred to above, the manner of charging them has been different.
The offender's involvement in the Sigalla transfers (count 4) was that he was reckless as to the beneficiary of the transaction (s 184(2)(b) of the Corporations Act); whereas Sigalla himself was sentenced on the basis that the jury was satisfied that he had intended to benefit himself (s 184(2)(a) of the Corporations Act). Sigalla and his companies derived a substantially greater financial benefit from his criminality (in excess of $7.5 million) than did the offender ($1.416 million). Sigalla was not involved in the conduct the subject of counts 5 and 6 against the offender. Sigalla committed 11 further offences in respect of further transactions which were not the subject of charges against the offender. The offender played a direct role in causing the subject transactions to be falsely described in the accounts of TZ.
I accept that Sigalla was the principal architect of most of the offending conduct and that he was, as the offender and other witnesses called by the offender have deposed, a threatening and intimidating character who was bullying and abusive to those around him, including the offender. While the offender gained considerably from the offending conduct, I accept that he was not its progenitor. He appears to have been, in the context of his relationship with Sigalla, a weak man, who collaborated in Sigalla's dishonesty. Nonetheless the offender extracted considerable sums from his offending, although his share was much smaller than Sigalla's. TZ was a public company and needed more than one director. Had the offender not been willing to apply his signature, and that of other directors who had electronic signatures, Sigalla would not have been able to effect the transactions that were to his benefit.
There are also differences in the subjective circumstances of the offenders and in particular their ages, their attitude to their offending and the conviction of Sigalla following a trial as compared with the plea of guilty by the offender.

R v Falconer

At a glance

Court

Decision date

Before

Source

Judgment (70 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (24)

Cited By (1)