R v Patniyot & Dailakis [2000] VSCA 55

Court of Appeal (Vic)|2000-04-04|Before: WINNEKE, P., CHARLES and CALLAWAY, JJ.A.

The applicant Dailakis, who was born on 10 September 1962, and the applicant Patniyot, who was born on 7 April 1970, were presented, together with a co-accused, Nick Magnisalis, on 14 July 1999 in the County Court at Melbourne on three separate presentments.

Dailakis pleaded guilty to nine counts of obtaining property by deception (counts 1 to 8 and 10), three counts of attempting to obtain property by deception, (counts 9, 11 and 12) and two counts of perjury (counts 13 and 14) and guilty to a summary offence of unlawful possession of a motor car.

Patniyot pleaded guilty to three counts of obtaining property by deception (counts 1 to 3) and two counts of perjury (counts 4 and 5). Dailakis admitted 28 prior convictions arising from 13 court appearances, whereas Patniyot had no prior convictions.

A plea in mitigation was heard on 14 and 15 July during which evidence was given for Dailakis by a consultant forensic psychologist, Timothy Watson-Munro, and Nazario Mancini. In relation to Patniyot, Detective Senior Constable Joseph McGill of the Stolen Motor Vehicle squad gave sworn evidence on her behalf, as also did her husband, George Kostis. A substantial volume of documentation was tendered during the plea, including a victim impact statement by John Findlay, a victim in relation to the perjury charges, and various charts, summaries and transcripts concerning the police investigation of the charges against all three accused. Character references were also tendered in relation to both applicants.

On 3 September the judge also heard applications for compensation made on behalf of a number of insurance companies and ordered that Dailakis pay compensation as follows: (1) $114,881.18 to RACV Insurance Company, (2) $53,951.01 to FAI Insurance Company, (3) $109,701.15 to GIO Insurance Company, (4) $25,596.26 to Hallmark General Insurance Limited, (5) $5,247 to AAMI Insurance Limited.

On 3 September 1999, the judge sentenced Dailakis on count 1 to three and a half years' imprisonment, on each of counts 2, 7, 9 and 10 to two years' imprisonment, on each of counts 3 and 4 to four years' imprisonment, on count 5 to two and a half years' imprisonment, on count 6 to two years and three months' imprisonment, on count 8 to three years' imprisonment and on each of counts 11, 12, 13 and 14 to 18 months' imprisonment. On the summary offence his Honour sentenced Dailakis to six months' imprisonment. The only order for cumulation made by his Honour was that six months of the sentence imposed on count 14 be served cumulatively on the four year sentence imposed on count 4, making the total effective sentence four years and six months' imprisonment. His Honour fixed a non-parole period of three years.

On the same day, the judge sentenced Patniyot to imprisonment for six months on each of counts 1 and 2, for 12 months on count 3, for 18 months on count 4 and for two years and three months on count 5. The total effective sentence was two years and three months' imprisonment. His Honour ordered that 18 months of this sentence be suspended for a period of three years.

The facts giving rise to these offences were as follows. Dailakis operated a panel-beating business, Exotic Body Works, in Reservoir. His co-accused, Nick Magnisalis, was a trained spray painter and worked at Exotic Body Works. Dailakis moved from the Reservoir premises and opened a panel-beating business, Evans Body Works, in Coburg. In October 1994, Magnisalis paid $20,000 to buy a 50 percent share in Evans Body Works. Dailakis was the dominant partner and attended to the finance of the business.

Prior to Magnisalis joining Evans Body Works, Dailakis had commenced a fraudulent scheme making false claims on insurance companies through his business. Magnisalis became an integral part of the "scam", primarily by preparing false quotations for submission to the insurer.

Upon leaving school, Patniyot commenced a relationship with Dailakis when they were 18 and 26 years old respectively, having met through the Greek community. Patniyot was not involved in the panel-beating business. She assisted Dailakis in making fraudulent insurance claims by making and signing various false documents. From time to time, without Patniyot's knowledge, Dailakis used Patniyot's name, representing her to be a vehicle owner on fraudulent insurance claims.

The period of offending involving Dailakis spanned from July 1992 to December 1994 and for Patniyot from July 1992 to January 1995. In all, some 47 motor vehicles were made the subject of false and fraudulent claims on insurance companies in relation to misrepresented repairs and some 34 persons were involved in these crimes of dishonesty, many connected in one way or another with Dailakis.

In relation to claims for damages made on insurers, the damage present on vehicles the subject of claims was caused in circumstances other than the accident which was represented to the relevant insurance company as having occurred. The damage, in fact, was either pre-existing or deliberately caused by ramming the vehicle with other vehicles, the extent of that damage ranging from relatively minor, but nonetheless expensive dents and scrapes, to damage sufficient to render the vehicles a write-off. There were occasions when a given amount of damage on a vehicle was made the subject of an initial fraudulent claim accepted by the insurer, the vehicle, however, not being repaired as represented in repair invoices which were raised by Evans Body Works. The pattern was such that the damage on that vehicle either remained the same or was added to and the vehicle made the subject of further claims against other insurance companies where the damage was represented as having occurred in an unrelated accident.

It was accepted during the plea that on a number of occasions it was Dailakis who was the major player in the planning and execution of the false claims, who actively solicited and secured the participation of owners of cars, the inducement offered being having the cost of their repairs met by the proceeds of false claims. On a number of occasions Dailakis selected a suitable vehicle and a suitable location for the bogus accident and specified what the vehicle movements would be. He prepared a drawing of the accident scene and briefed the owners in relation thereto against the possibility that they were questioned by insurance investigators.

Deliberate steps were taken to avoid detection. On occasions, vehicles with damage the subject of fraudulent claims were sent to other panel-beaters for the preparation of repair quotations and vehicle assessments, this being done to separate the vehicles in a given accident and thereby avoiding incompatible damage patterns being noticed by insurance assessors. Use was also made of addresses to retrieve mail and cheques from insurance companies. The addresses used for third party claimants fell into one of two categories. In the first, where the third party was a living co-offender, their actual address was used. On the other hand, if the identity of the third party was false, an address where mail could be retrieved was used.

The fraudulent scheme first came to police attention as a result of a joint complaint being made from the RACV and GIO insurance companies concerning a vehicle registered with personalised plates, "XCUSME". The owner of the vehicle made a "no comment" interview as to the involvement of this vehicle in any accidents or the reason for it ever being at Evans Body Works. The vehicle had been used in two fraudulent claims.

The judge said of the whole fraudulent scheme, which caused insurance companies to pay out in excess of $330,000, that it involved dishonesty of a very high order. I agree.

Of the two counts preferred against Patniyot in relation to these fraudulent insurance claims, count 1 related to a letter to FAI Insurance which was written out and signed by Patniyot, and a release which was signed by her, the balance of the document not being in her handwriting. Count 2 related to Patniyot signing a statutory declaration and a release before a police officer, in each case the balance of the document not being in her handwriting. In both cases, Patniyot acted as she did to assist Dailakis in making a fraudulent claim but herself received no financial gain for doing so.

The perjury claims against both applicants arose in the following circumstances. On 15 March 1994, John Findlay was driving a vehicle in Sydney Road, Brunswick, his wife travelling as a passenger with him. Findlay had a collision with a BMW vehicle driven by Patniyot. Later that day Patniyot went to the Thomastown police station and reported the accident. She complained about Findlay's driving and an investigation was commenced. Findlay was interviewed and a penalty notice sent to him for diverging across the centre line of the road when it was unsafe to do so. Findlay, however, contested the matter.

Between March and July 1994, Patniyot made a false statutory declaration in pursuance of a claim for property damage to her vehicle against CIC Insurance Company, Findlay's motor vehicle insurer. In the declaration, Patniyot referred to the existence of two independent witnesses, Dailakis and Magnisalis, who supported her version of the accident. On the basis of the declaration made by Patniyot, Findlay's insurance company paid her the moneys claimed by her.

On 30 July 1994, Dailakis made a false statutory declaration in support of Patniyot's claim against CIC Insurance Company, falsely stating that he was an independent witness to the motor vehicle accident and that Patniyot's driving was not negligent. Magnisalis made a similar false statutory declaration.

On 2 August 1994, Dailakis made a further false statement to the police in a statutory declaration, that he and Magnisalis were witnesses to the motor accident at Brunswick, that Patniyot was not previously known to them and that the accident was not the result of negligence on Patniyot's behalf.

On 25 January 1995, Findlay was prosecuted at the Magistrates' Court at Preston, contesting the matter and representing himself. Patniyot and Magnisalis gave sworn evidence at the hearing to the effect that Dailakis and Magnisalis were independent witnesses to the motor vehicle accident which was not the result of Patniyot's negligence. The magistrate was, however, not satisfied that the case made against Findlay had been proved and the information was dismissed. Dailakis did not attend court.

I turn then to the application of Dailakis. Ground 2 claims that the judge erred by failing (a) to accept the evidence of remorse or give adequate reasons for not doing so, and (b) accurately to state the evidence of remorse. His Honour found only "great difficulty in accepting the genuineness of any true remorse" and gave no reasons for his conclusion. Mr Just, who appeared for Dailakis in this Court, submitted that remorse was a matter of mitigation and, as such, was to be found either made out or not so on the balance of probabilities. Accordingly he submitted that when evidence of remorse is put the court should either accept the evidence or give adequate reasons for not doing so. He submitted that this was the effect of R v. Storey [1998] 1 V.R. 359 and R v. Ridsdale (1995) 78 A.Crim.R. 486 at 496.

I do not accept that Storey requires a judge to give reasons for not accepting a prisoner's claimed remorse. In Ridsdale, Southwell, J. at 496 said only that he was troubled by the question whether the evidence of the applicant's remorse and rehabilitation was of such a nature and cogency as to oblige the sentencing judge either affirmatively to accept that evidence or give adequate reasons for not doing so. On the other hand, Mr Just sought to distinguish (not I think successfully) R. v. Virgona [1999] VSCA 213, where the finding of the sentencing judge that he was unpersuaded of any real remorse on the part of the applicant was found to contain no error.

In my view, no error is to be found in the judge's reasoning in relation to remorse. Dailakis had a long history of offending commencing in 1980 when at the age of 18 he was convicted of two charges of theft. In 1987 he was found guilty of damaging property and in 1988 was convicted of theft and failing to answer bail. From then on, his offending escalated with convictions, or Dailakis at least being found guilty, in each of the next seven years, including for offences of dishonesty and violence. In 1990, he was sentenced to be imprisoned for a crime of violence for 18 months, a minimum term of 12 months being fixed.

The offences to which Dailakis pleaded guilty spanned a period from July 1992 to August 1994, by which time Dailakis was aged 34. Accordingly, I think the judge was perfectly entitled to state in his sentencing reasons that from 1987, when aged about 25, to 1994, over a period of some nine years, Dailakis had been a persistent offender and "committed a smorgasbord of serious offences and quite obviously displayed a blatant contempt for the law".

The dishonesty offences to which Dailakis pleaded guilty were, again, as the judge said, quite premeditated and well-planned, and involved his active participation and the participation of others he encouraged to be involved, some of whom had no prior criminal history. Dailakis was the architect and main player in the fraudulent schemes and the dishonesty involved was of a very high order.

I have read the evidence of remorse relied on by the applicant and, in my view, the judge was, in all the circumstances, perfectly entitled to state that he found great difficulty in accepting the genuineness of the remorse claimed on behalf of Dailakis as opposed to discomfiture arising from detection and its consequences. Dailakis, of course, did not give evidence himself during the plea. This ground fails.

Ground 3 claims that the judge erred by failing to distinguish sufficiently the significance of the prior convictions from the significance of the offences before the court for sentence. The argument runs that, having referred to these prior convictions in the manner previously stated, the prior offences in fact were of different and much more limited significance; that in practical terms prior offences can be considered by the sentencing judge only as a matter militating against leniency which might otherwise be afforded by reason of considerations personal to the prisoner and not as in any sense aggravating the crimes for which the applicant is being sentenced and therefore the sentence.

It is sufficient, in my view, to say that no error of consequence is shown in the treatment by the judge of the applicant's prior record. There was, as Mr Just submitted, some overlapping of the period of the prior convictions with the time of the offending. Some of the prior offences did not result in convictions and some were trivial. But consideration of the applicant's record was a necessary and most relevant consideration in relation to the submissions made by the applicant's counsel during the plea, that he was remorseful, that he was a strong candidate for rehabilitation and that the long delay in the investigation of the offences and the bringing of charges against the applicant had caused him great depression and that, accordingly, the delay in itself should result in substantial mitigation of penalty.

I think the judge was entitled, having regard to the arguments put by the applicant's counsel, to take into account the cumulative effect of the prior convictions and to describe them as he did during his reasons. This ground also fails.

Ground 4 of the application claims that the learned judge erred in finding that it was (a) relevant and (b) properly before the court that the applicant had skill in kick-boxing. The judge did indeed state during sentencing reasons that, "It appears you attained some skill in kick-boxing", the issue having been raised by the prosecutor in cross-examination of a witness who gave no evidence of the fact. There is nothing in this point. Although the matter was mentioned by his Honour, it was simply as one of the individual circumstances relating to Dailakis and apparently arising out of his service in the army in Greece in a two and a half year period. There is no suggestion in the sentencing reasons of this most experienced judge that this fact was used to the disadvantage of Dailakis for the purposes of sentencing him, no matter what intention the prosecutor may have had in using it in cross-examination. This ground also fails.

The final ground is a claim that the sentence imposed was manifestly excessive. Mr Just properly conceded that the offending was serious and that the financial impact on the victim institutions was large. He submitted, however, that the gain to the applicant was less, being only a share of the payments remaining for work done after costs had been deducted. He accepted that the perjury had a personal effect on the victims, although the applicant Dailakis, by declining to give curial perjury, had restricted the harm arising from his own actions.

Mr Just submitted that the applicant was a relatively young man to be engaged in small to medium-sized business. That business was itself legitimate and the applicant had lacked appropriate qualifications or the experience to conduct it. There had been a delay of four or five years in bringing these offences to court and the judge had correctly found that the delay caused distress to the applicant. His Honour had accepted also that during the delay the applicant had formed a relationship with a responsible and accomplished woman and had the ongoing support of his family. The applicant had committed no subsequent offences and, following the closure of his panel-beating business, had sought to re-establish himself and been gainfully employed for some time.

Mr Just accepted that the judge had correctly determined to take into account the pleas of guilty offered at the committal proceedings and that such pleas had saved what would otherwise have been a very long and expensive trial involving many witnesses and had saved Mr and Mrs Findlay further stress and worry. His Honour, Mr Just agreed, had plainly been correct in saying he "certainly did not intend to shut the door" on rehabilitation. He submitted that the only prior conviction reasonably to be regarded as serious was that for violence. All the other convictions, he argued, were for relatively minor offences against a person or of dishonesty or concerned with driving and all were within the summary jurisdiction. Accordingly it was put that the head sentence and non-parole periods were both manifestly excessive and that the sentence on count 4, the base of the head sentence, was manifestly excessive. He submitted that a number of the individual sentences were also manifestly excessive, especially those on counts 2, 7, 10, 12, 13 and 14.

An examination of the transcript of the plea over a period of two days shows that all these matters were argued at length and considered in detail by the sentencing judge. Having heard Mr Just's careful arguments and having scrutinised his Honour's reasons, I am not able to find any matter to which exception could be taken in them. His Honour took great care to set out in his reasons all matters which could be put in favour of Dailakis while setting against them the various matters demonstrating his persistence in offending over a lengthy period and his central position in the serious and continuing frauds in which he was the main player. Although Dailakis's counsel at the plea had put it that the investigation was bungled, tardy and inefficient and that this had prejudiced Dailakis by causing the delay which had taken place between the offending and the matter being brought to court, his Honour's conclusion, in my view an entirely justifiable one, was that these arguments were "sheer humbug" and to be rejected.

The losses caused to the insurance companies involved were plainly very substantial. The handling of claims made on insurance companies inevitably involves, indeed requires, an assumption that claimants will honestly disclose the relevant facts supporting their claims. Investigation of offences such as these usually will be lengthy and expensive and detection of the offenders no easy process. General deterrence was, as his Honour recognised, very important and specific deterrence would plainly have been relevant having regard to the circumstances of the offences and Dailakis's record.

The perjury offences were not committed on the spur of the moment or in panic. They were made in circumstances likely to lead to the launching of a prosecution against Findlay. These offences are also very serious ones. It suffices to say in rejecting this ground that, in my view, each of the sentences imposed was plainly within range.

Mr Just sought this morning to add a further ground by amendment, but the Court rejected the application as having insufficient substance. It follows that I think Dailakis's application should be rejected.

I turn then to Patniyot's application. The first ground of the application is that in all the circumstances of the offences and of the applicant the sentences imposed were manifestly excessive. The particulars given of this ground are that the judge failed to give sufficient weight to the applicant's rehabilitation and prospects of further rehabilitation, the significant stress and anxiety suffered by her awaiting the finalisation of proceedings, the adverse influence the co-accused Dailakis exerted over her and the scant financial benefit she received, her youth at the time of the offences, her plea of guilty and remorse, the crushing effect imprisonment would have upon her and the provisions of s.5(4) of the Sentencing Act 1991.

During the course of the hearing of this application, a second ground was added by amendment claiming that the judge had erred in sentencing this applicant on an erroneous factual basis, namely that she committed perjury to secure the conviction of a person whom she believed to be innocently charged. I shall deal first with this second ground.

The two perjury charges relating to this applicant, counts 4 and 5, were carefully confined in each case insofar as false swearing was alleged. Count 3, obtaining money by deception from CIC Insurance Limited, alleged that the applicant falsely represented that there were two independent witnesses to the Brunswick accident. Count 4 alleged that she falsely swore to a police sergeant that Dailakis and Magnisalis were not known to her before 15 March 1994, the date of the accident. Count 5 alleged that Patniyot falsely swore in court that Dailakis and Magnisalis had witnessed the accident in Brunswick and were not previously known to her.

In this Court it was conceded by Mr McArdle, who appeared for the Crown, that the facts proved by the prosecution at the plea did not go beyond the allegations actually made. In other words, the Crown proved only that Patniyot falsely swore that there were two independent witnesses to the accident, both being previously unknown to her. If and insofar as she swore either in a statutory declaration to the police or in court that John Findlay was at fault in the accident and that she was not, there was no allegation that she had given false evidence on oath.

The sentencing reasons show that the judge said the following:

"Counts 3, 4 and 5 relate to an accident that occurred between a motor car driven by you and a motor car driven by John Lesley Findlay. In short compass, although the accident was caused by your negligent driving John Findlay was charged by police with a traffic offence as a result of your false statements in declaration form supported by false declarations by the two accused."

Later, his Honour, after correctly stating the facts of the curial perjury alleged against Patniyot, said:

"It really goes without saying that most people do not like being falsely accused and in this case that certainly applied to Mr Findlay who was not prepared to go down without a fight." (Emphasis added)

It follows, with great respect to the very experienced judge, that his Honour appears to have sentenced this applicant on the basis that she negligently caused the accident. The plea was long and complicated. It involved a very large quantity of documentary evidence and many individual charges, particularly against Dailakis and Magnisalis. In the circumstances, the distinction to which I have referred may well have appeared of little consequence to his Honour.

There is in my view a difference in degree between the matters alleged and the basis upon which sentence appears to have been imposed, although both situations disclose a serious offence. In other words, the judge appears, with great respect, to have taken into account as an aggravating circumstance an important matter which was not in issue on the plea, which the prosecutor had implicitly invited him not to take into account and which the judge himself had not raised with the parties.

In these circumstances I think that ground 2 has been made good and that the sentences should be set aside and the applicant re-sentenced.

Mr Grace took us to the evidence establishing the applicant's rehabilitation, her prospects of further rehabilitation and, indeed, each of the matters to which attention was directed by the particulars of ground 1. The judge accepted the evidence of rehabilitation, the applicant's youth, that she pleaded guilty and was remorseful, the stress and anxiety she had suffered over the long delay between offending and the passing of sentence and that she had acted, at least in relation to counts 1 and 2, under the influence of Dailakis. I have no doubt that his Honour accepted all the mitigatory evidence put by Mr Grace in the course of the plea and it is against this background that I turn to consider re-sentencing.

Insofar as counts 1 and 2 are concerned, the applicant had no financial interest in the panel-beating business. She had fallen, when still young, under the influence of Dailakis and she did not benefit financially from the frauds alleged in these two counts. The other persons charged in relation to them, other than Dailakis, were dealt with in summary proceedings, in each case being fined without a conviction being recorded. Patniyot had no prior convictions.

More serious issues are raised by counts 3, 4 and 5. The applicant provided the false information referred to in count 3 to the insurer for the purpose of obtaining money for herself. It was in support of that purpose that the applicant made the false statement that formed the basis of count 4 and, as his Honour said, it was "a quantum leap to actually give false evidence on oath at the Preston Magistrates' Court".

There are several matters upon which the applicant is entitled to place strong reliance. Four and a half years had passed between the curial perjury, the last of this applicant's offences, and the hearing of the plea on 14 and 15 July 1999, the offences now being more than five years old. In the intervening period it is clear that substantial rehabilitation has taken place and I would accept that the applicant is most unlikely to re-offend.

On the other hand, the giving of false sworn evidence in court is a very serious criminal offence. As the judge correctly put it, it can strike at the very foundation of the legal process. It would be a wholly exceptional case where such an offence did not warrant an immediate custodial sentence. In the present case, the applicant's making of a false statutory declaration led to the CIC Insurance Company paying the amount of her claim and to the police pursuing criminal proceedings against John Findlay. The giving of perjured evidence in court must have been intended by the applicant to lead to Findlay's conviction on the traffic offence and could well have had this consequence. It is a serious example of a very serious offence, notwithstanding that the applicant may have believed Findlay to have been at fault in the accident and so guilty of the offence with which he was prosecuted.

In relation to counts 4 and 5, we had drawn to our attention by Mr Grace, R v. Westphal, unreported, Court of Appeal, 28 March 1996, in which Brooking, J.A., dealing with a case of curial perjury, observed at 4 that the maximum penalty for perjury had been reduced from 15 to 12 and a half years' imprisonment and that, going back to 1982, the highest sentence of imprisonment imposed for the offence before the abolition of remissions was two years and six months and, after abolition, 18 months. A sentence of 21 months' imprisonment was upheld in that case, where the accused had falsely sworn that he had not made a telephone call in breach of an intervention order obtained by his former partner after their relationship came to an end.

In all the circumstances, I would sentence the applicant on counts 1 and 2 in each case to three months' imprisonment, on count 3 to six months' imprisonment, on count 4 to 12 months' imprisonment and on count 5 to 18 months' imprisonment. The total effective sentence would then be 18 months' imprisonment. I would suspend 12 months of the sentence for a period of three years, the period of suspension commencing on 3 September 1999 when the applicant was first sentenced.

For the reasons given by Charles, J.A., I agree that these applications should be disposed of in the manner which he has proposed.

The formal orders of the Court will be that the application by Dailakis for leave to appeal against sentence is dismissed. In respect of the applicant Patniyot, the application for leave to appeal against sentence is allowed. The appeal is treated as having been instituted and heard instanter and is allowed. The sentences imposed by the sentencing judge will be quashed and, in lieu thereof, the following sentences are imposed.

On count 1, a sentence of three months' imprisonment; on count 2, a sentence of three months' imprisonment; on count 3, a sentence of six months' imprisonment; on count 4, a sentence of 12 months' imprisonment and, on count 5, a sentence of 18 months' imprisonment. The total effective sentence will therefore be one of 18 months' imprisonment. We order that 12 months of that sentence will be suspended for a period of three years.

Although this sentence speaks from the date upon which the initial sentences were imposed by the sentencing judge on 3 September 1999, because the applicant Patniyot has been on bail since 29 October 1999, she will be required to serve the six months unsuspended portion of the term of imprisonment imposed, save for 41 days which has already been spent in custody. In respect of those 41 days, we declare them to be a period served pursuant to the sentences imposed and we direct that the terms of that declaration and the fact that it was made be entered in the records of the Court.

Miss Patniyot, do you understand that we have changed the sentences which have been imposed upon you from those which the learned judge imposed to a term of 18 months, of which we have suspended 12 months, which means that you will have to serve the six months of that unsuspended term less the 42 days that you have already spent in custody. Do you understand that?

And when the six months has been served, that is six months from today effectively less the 42 days, you will be released, but you will be released on condition that you will not commit any further offences punishable by imprisonment for a period of three years starting last September, 3 September. Do you understand that?

And if you do not comply with those conditions you will be liable to be brought back and dealt with by the Court for the offences in respect of which the term has been suspended and, effectively, prima facie the Court will be required to order that you serve the suspended term which you will not by then have served. Do you understand that? So, as long as you understand that, we would hope to hear no more from you once you have been released.

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