R v Sigalla

Supreme Court of NSW|2016-11-22|Before: Adamson J, Link Partners P

Judgment

On 22 November 2016 following a trial by jury Andrew Sigalla was convicted of 24 counts of dishonestly using his position as a director to gain a benefit for himself or a third party contrary to s 184(2)(a) of the Corporations Act 2001 (Cth). The maximum penalty for each offence is five years' imprisonment.
The first charge on the indictment was that the offender: "On or about 8 December 2006 at Sydney and elsewhere in the State of New South Wales did use his position as a director, as defined in s 9 of the Corporations Act 2001, of TZ Ltd (TZ) dishonestly with the intention of directly gaining a benefit for ZMS Investments Pty Ltd (ZMS) and himself in that he caused $300,000 of funds of TZ to be transferred to ZMS."
The remaining charges were in similar terms, save as to the date, nature, quantum and recipient of the benefit. ZMS Investments Pty Ltd (ZMS) and BZI Pty Ltd (BZI) are private companies controlled by the offender. BZI is the trustee of his family trust. The offender and his wife Melissa were, at the relevant times, directors of BZI and ZMS. Melissa was the only shareholder of ZMS.

The facts

As sentencing judge, I may not take facts into account in a way that is adverse to the interests of the offender unless the facts have been established beyond reasonable doubt. However, if there are circumstances which I propose to take into account in favour of the offender, it is sufficient that they be proved on the balance of probabilities: The Queen v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at [27], per Gleeson CJ, Gaudron, Hayne and Callinan JJ. There are other matters which can be taken into account in sentencing, or which form part of the narrative, which do not fall into either category: Weininger v The Queen (2003) 212 CLR 629; [2003] HCA 14 at [19]-[24].
In order to place the offending conduct in context I propose to summarise the genesis of TZ Ltd and its predecessor and the various capital raisings which funded its business.

The genesis of the business

In about 1999 Dickory Ruddock, an inventor, wanted to commercialise his inventions which included remote fastening technology. He approached the offender and Linda Lau to try to raise funds for this purpose. The first company incorporated for the business was a private company known as Telezygology Pty Ltd. Ms Lau was a founding shareholder and John Wilson became the first Chief Executive Officer. The offender became a director of Telezygology Pty Ltd. He was involved in raising capital but not in the day-to-day running of the business. In 2001 Telezygology Inc was incorporated in the state of Delaware in the US. On 14 February 2002 it applied to be registered in Australia as a foreign corporation. At that time its directors included the offender and Ms Lau.

The Initial Public Offer through prospectus issued on 4 March 2004

In October 2003 there was a reverse takeover of Telezygology Pty Ltd by CED Australia Ltd, a listed public company on the Australian Stock Exchange (ASX). CED Australia Ltd changed its name to TZ Ltd on 9 January 2004. Thereafter TZ Ltd operated as the capital raising entity of the group in Australia while TZ Inc continued to operate the business and develop the technology in the United States.
On 4 March 2004 a prospectus was issued by TZ Ltd in which 26,667,000 fully paid ordinary shares in TZ Ltd were offered at an issue price of 45c per share. As a result of the Initial Public Offer (IPO), $12 million was raised.
The offender's remuneration for his work in the reverse takeover and the IPO was disclosed in the prospectus as follows: "The Board has approved, subject to shareholder approval, to issue 6m shares to ZMS Investments Pty Ltd in consideration for services rendered in relation to the Company's restructure and the capital raising under this Prospectus. ZMS Investments Pty Ltd is an entity controlled by Mr Andrew Sigalla, director of the Company."
At the time of the prospectus the offender's remuneration was also governed by a consultancy agreement with TZ Inc dated 1 January 2003 (the 2003 Consultancy Agreement). The agreement provided for the offender, through ZMS, "to provide services to TZ Inc, as required" for three years commencing 1 January 2003 at a rate of $16,666 per month or as otherwise agreed. The 2003 Consultancy Agreement was extended and performed until further agreements were entered into which commenced on 25 January 2007.
Initially, TZ Ltd's board was constituted by Tony Leibowitz, as Chair; Chris Kelliher; Mr Wilson; Mr Ruddock; the offender; and Martin Hadaway. John Falconer was the company secretary. On 19 April 2004, at a board meeting of TZ Ltd, the offender suggested that the size of the board be reduced to three directors, being the minimum number required for a listed company.
A shareholders meeting was held on 15 July 2004 and approval was obtained for the issue of 6 million shares in TZ Ltd to ZMS. On that day Mr Falconer was appointed a director; Mr Leibowitz and Mr Kelliher remained on the board; and the other directors resigned. Two years later Mr Leibowitz was replaced on the board by Mr Otten and, on 29 January 2007, Mr Kelliher was replaced by the offender. Mr Falconer remained on the board for the entire period covered by the indictment.
The jury's verdicts on counts 1 and 2 indicate that it was satisfied that the offender fell within the extended definition of director in s 9 of the Corporations Act at least in December 2006 when the conduct the subject of those counts occurred. I am satisfied that, in the intervening period between 15 July 2004 and 29 January 2007 the offender not only acted as a director, but he was also a person in accordance with whose wishes and directions the other directors were accustomed to act. For example, the offender required Mr Leibowitz to resign from the board on 7 July 2006. The correspondence between the offender and Mr Falconer regarding the invoice from Chyron Services Ltd (Chyron) referred to below also evidenced the offender's control over Mr Falconer.

Sale of Golf Link business

Before the reverse takeover, CED Australia Ltd owned various businesses, of which one, Golf Link, was profitable. Golf Link provided software to the Australian Golf Union which permitted golfing handicaps to be calculated. After the takeover, TZ Ltd decided to sell this business, which did not fit within the operations of the TZ group, to raise cash. The offender was responsible for conducting the sale on behalf of TZ Ltd. He negotiated a sale price of $2 million to a consortium of four buyers, which included Golf Link Partners Pty Ltd, of which Jeff O'Donnell was the principal, and Simbient Golflink Pty Ltd.
A defect in the software led to TZ Ltd agreeing to grant the purchasers a rebate on the purchase price to reflect the cost of rectifying the software which was to be borne by the purchasers. The rebate was paid to Simbient Golflink Pty Ltd as it was the entity which performed the rectification work. The offender contended at trial that these matters were relevant to counts 4, 6 and 7.

Capital raising of $8.5 million for purchase of Product Development Technology in late 2004

In late 2004, it was proposed that TZ Ltd purchase a consulting engineering company, Product Development Technology, to enable it to commercialise its own inventions. The offender was called upon to assist in raising $8.5 million, which was required for the purchase. No arrangement was made for the offender to be paid anything in addition to his usual remuneration under the 2003 Consultancy Agreement in respect of this capital raising. The amount of $8.5 million was raised, at a cost of $1.4 million in fees and other expenses. As a result of the exercise of options granted earlier, 1.6 million shares were issued at 34c.

Capital raising of $20 million through issue of convertible notes to Oasis in 2006 (relevant to counts 1-3)

Prior to March 2004, TZ Inc granted an exclusive licence to Textron Fastening Systems Inc (TFS), a major US company known for its fastening technology. The licence permitted TFS to use TZ's intellectual property for marketing and selling purposes and develop and distribute products for TZ Inc. TFS called this aspect of its business, "Intevia". At the end of 2005, TZ learned that TFS was to be sold by its parent company, which left TZ vulnerable to TFS being purchased by an entity which had no interest in developing the intellectual property which TZ had transferred to TFS.
Ms Lau sought the assistance of a Hong Kong business associate, Andy Lai, to raise funds from a company known as DKR Soundshore Oasis Holding Fund Ltd (Oasis) so that TZ Ltd could develop its own technology. She introduced the offender to Mr Lai. Ms Lau and Mr Lai set about obtaining the investment by Oasis in TZ Ltd, which ultimately lent TZ Ltd $20 million secured by 200 convertible notes of $100,000, which entitled Oasis to obtain shares in TZ Ltd at a strike price of 59c.
Mr Lai and Ms Lau each came to an agreement with TZ Ltd for payment of a commission for the raising of $20 million from Oasis. Ms Lau negotiated a fee of 0.5% and Mr Lai negotiated a fee of 6% (of which he privately agreed to pay Ms Lau 1%) to be paid to his company, Yorkshire Capital Ltd.
The issue of convertible notes to Oasis was finalised in November 2006; approved by shareholders at the annual general meeting (AGM) of TZ Ltd on 30 November 2006; and was the subject of an announcement to the ASX on 4 December 2006.
Following the AGM Ms Lau sent an email to Mr Lai informing him that the offender wanted him to submit his invoice for 6%. She also mentioned that the offender had told her that he (Mr Lai) had agreed to take half of his 6% commission in cash and the other half in shares issued at 59c per share. In his response to Ms Lau, Mr Lai insisted that he was to be paid his 6% in cash only. Ms Lau defended Mr Lai's position in a subsequent email to the offender in which she also requested payment of her own invoice for 0.5% commission amounting to $100,000. Both Mr Lai's and Ms Lau's invoices were eventually paid by TZ Ltd on 28 December 2006.
In the background, the offender had been communicating with Mr Falconer with a view to their obtaining secret commissions from the capital raised from Oasis. These communications were recorded by Mr Falconer in a summary he retained on his computer in a file entitled "Andrew Sigalla".
The relevant entries are: "13/11/06: Oasis note deal is 6% to Andy [Lai] and 6% to Linda split 4 ways (AL [Andy Lai] -LL [Linda Lau] -AS [Andrew Sigalla] - JF [John Falconer]) - 50% shares at 59c and 50% cash- JF needs HK [Hong Kong] entity to take up 6% and distribute." 28/11/06: AJS [the offender] confirmed HK is 50/50 4/12/06: He [the offender] now says the split is 6% to Andy [Lai] and the other 6% is ½ to Linda and the balance 50/50 [between the offender and Mr Falconer]. Andy will not now take his 6% in shares and cash. Only cash."
There was ultimately an agreement between the offender and Mr Falconer, as recorded in the last entry, whereby they would divide 5.5% of the capital raised between themselves.
On 8 December 2006 Mr Falconer sent a facsimile to Mr Navarro, TZ Ltd's then bank manager at National Australia Bank (NAB), requesting that $300,000 be paid to ZMS from TZ Ltd's Share Placement account. Although the facsimile appears to have been signed by Mr Kelliher, he was in Chicago at the time and did not authorise his electronic signature to be used on the document. At that time Mr Falconer and Mr Kelliher, who were both directors, were authorised signatories on TZ Ltd's accounts. The transfer was effected on that day. This payment was the subject of count 1.
On 11 December 2006 Mr Falconer sent an email to the offender saying, "Delete the one I just sent and use this one". The invoice attached to the email, dated 12 December 2006, appeared to be from Chyron. The offender knew that Mr Falconer was the beneficial owner of Chyron. Chyron had an account at the Bank of East Asia in Hong Kong. The invoice claimed: "success fee for convertible note issue as per agreement" of 6% of $20 million and provided that it was due in cash ($700,000) and shares (847,457 at 59c, worth $500,000). The cash component of $700,000 comprised: $300,000 to ZMS, which was the subject of count 1; a further payment of $300,000 to Chyron for Mr Falconer, which was the subject of count 2; and a payment to Ms Lau of $100,000 as per the agreement that she would be paid 0.5%. The issue of shares to Joyeagle Ltd (Joyeagle) was the subject of count 3.
Although the address on the invoice was Ms Lau's address in Hong Kong she had never heard of Chyron, had nothing to do with the invoice and had no association with the bank account identified at the foot of the invoice.
On 26 December 2006 the offender sent an email to Mr Falconer in the following terms: "Clearly you don't listen. Do you think she would accept ½ a % and us 5.5%. What she was supposed to do was bill us for 6.5% on Chyron invoice and then there is Yorkshire Capital one and a Chyron one and you pay them accordingly. I will ring her today to tell her what to do AGAIN."
Mr Falconer responded on the same day by email asserting that the deal was a total commission of 12%, of which 50% would be paid in cash and 50% in shares, and that it would be split four ways. His email concluded: "I cannot pay anything until I have appropriate documentation."
On 27 December 2006 the offender sent an email to Mr Falconer which said, "Please find attached Linda's invoice." The invoice was substantially similar to the one sent by Mr Falconer to the offender on 11 December 2006 although there were some additions. The invoice concluded "yours sincerely Linda Lau". Although I accept the offender's evidence that he was personally incapable of attaching a document to an email, I am satisfied that he was responsible for causing the email and the attached invoice to be sent.
On 27 December 2006 a facsimile, signed by Mr Falconer and apparently signed by Mr Kelliher (who did not recall signing it), was sent to Mr Navarro requesting the transfer of $1.2 million to Yorkshire Capital Ltd; $100,000 to Mr Chan (Ms Lau's son) and $300,000 to Chyron. Each of these payments was recorded in the general ledger of TZ Ltd as "share issue costs" by Farouk Fagredin, TZ Ltd's book-keeper, at the direction of Mr Falconer. Thus, the illegitimate payments to ZMS and Chyron were grouped with the legitimate payments to Mr Lai and Ms Lau to conceal their illegitimacy.
On 9 January 2007 Mr Falconer, as secretary of TZ Ltd, sent an email to Computershare Registry Service requesting that it issue 847,458 shares in TZ Ltd to Joyeagle. The offender knew Joyeagle to be an entity associated with, and controlled by, Mr Falconer. Rusdem Ltd owned 100% of Profit Pearl Holdings Ltd and held its registered share in Profit Pearl Holdings Ltd on trust for Mr Falconer. Joyeagle was a director of Rusdem Ltd. Mr Falconer used these companies in various transactions, including investments he made on behalf of one of his Australian clients.
On 2 February 2007 the shares were allotted to Joyeagle. TZ Ltd announced to the ASX that the shares had been allotted to "external advisors" in respect of the Intevia acquisition in lieu of final payment. This explanation was false as neither Joyeagle nor Mr Falconer had any entitlement to the shares.
The offender instructed Fiona Wilkie, his accountant, that the payment to ZMS of $300,000 was to be recorded as "income fees received Joyeagle $300,000" in the ZMS general ledger. He later confirmed that the sum was for "consulting fees". The payment to ZMS of $300,000 was described in the accounts for ZMS submitted to the Australian Taxation Office on 28 November 2008 as "Joyeagle commission".
As at December 2006 the offender knew that his entitlement to be remunerated was governed by the 2003 Consultancy Agreement. Neither he nor Mr Falconer had an entitlement to any commission as a result of the Oasis capital raising. Although there had been some "corridor discussions", involving Mr Leibowitz and Mr Kelliher, about how the offender would be remunerated for capital raising, no agreement was made until 6 June 2007 when two agreements, referred to below, which commenced on 25 January 2007 were made.
On 29 January 2007, not long after the Oasis capital raising, Mr Kelliher resigned from the board of TZ Ltd, as he was troubled by the lack of available information about the accounts. He became President of TZ Inc. and lived in the United States. He was replaced on the board of TZ Ltd by the offender.
From 29 January 2007 until 18 June 2009 (when the whole board was replaced) the offender (who had replaced Mr Kelliher), Mr Falconer and Mr Otten (who had replaced Mr Leibowitz) were the only directors of TZ Ltd. After his reappointment to the board, the offender entered into two further agreements for his remuneration, which superseded the 2003 Consultancy Agreement, an Executive Services Agreement and a Consultancy Agreement.

Executive Services Agreement between the offender and TZ Ltd dated 25 January 2007

The Executive Services Agreement between the offender and TZ Ltd dated 25 January 2007 (the 2007 Executive Services Agreement) provided for the offender's remuneration by way of salary and superannuation contributions (amounting to $120,000 per annum). Clause 8 contemplated that bonuses might be approved by the board from time to time. The offender's key responsibilities were listed in Annexure A and included ensuring that controls and reporting were in place to meet regulatory and statutory compliance. The 2007 Executive Services Agreement commenced on 25 January 2007 although it was not executed until 6 June 2007.

The 2007 Consultancy Agreement

The Consultancy Agreement between TZ Ltd, the offender and ZMS dated 25 January 2007 (the 2007 Consultancy Agreement) was also executed on 6 June 2007. ZMS was defined as "the Consultant" and the offender was included in the definition of "the Consultant's Personnel". Under cl 4 ZMS was to provide services to TZ Ltd as required, including capital raising and corporate advisory services. Clause 5.1 provided for remuneration of $25,000 per month. Clause 6 provided for a one-off bonus to be paid to the offender upon the successful listing of TZ Ltd on the NASDAQ, equivalent to 5% of the premium over the TZ Ltd's market capitalisation in January 2007 and the market capitalisation of the listed entity at the time of listing. Clause 21 provided that the agreement constituted the entire agreement between the parties and superseded all prior agreements and understandings in respect of matters dealt with under the agreement.

The 2008 Executive Services Agreement

In 2008 John Egan of Egan Associates was asked by the board of TZ Ltd to review the offender's total remuneration package for the purposes of advising whether the arrangements were reasonable for the directors to enter into, on behalf of the company, such that they would not require approval of the shareholders of TZ Ltd: ss 208 and 211 of the Corporations Act 2001 (Cth). On 23 April 2008, Mr Egan advised the board of TZ Ltd in writing that the cash component of any bonus payment to the offender for listing on the NASDAQ (cl 6 of the 2007 Consultancy Services Agreement) ought be limited to $7.5 million, with the balance provided in the form of equity. A new agreement, dated 1 August 2008 (the 2008 Executive Services Agreement) was entered into which reflected Mr Egan's advice. The offender's usual annual entitlement remained at $120,000.

Golf Link transaction and loan to Mr O'Donnell (relevant to counts 4, 6 and 7)

As referred to above, in 2004 TZ Ltd agreed to sell the Golf Link business to a buyers' consortium which included Golf Link Partners Pty Ltd, of which Mr O'Donnell was principal. By arrangement with the offender, Mr O'Donnell invested funds in the TZ group. He had difficulty in obtaining proof of his shareholding from the offender, despite repeated requests. By about June 2007, Mr O'Donnell, who needed cash urgently, again demanded proof of his shareholding from the offender. The offender, who was unable to comply with the demand as he had apparently used the shares as security, ultimately offered to lend Mr O'Donnell some money to tide him over. Prior to 22 June 2007 the offender lent Mr O'Donnell $200,000. On 22 June 2007 the offender offered to lend a further $300,000 to Mr O'Donnell, who readily accepted his offer.
On 5 July 2007 Mr Falconer signed a facsimile to Mr Navarro requesting that $300,000 be transferred from the TZ Ltd Share Placement account to a nominated account, which was said to be in the name of Ms Lau. The account was in fact a Golf Link Partners Pty Ltd account. The TZ Ltd bank statement recorded the transfer on 5 July 2007 of $300,000 to "Linda Lau", which was the false description given to NAB by Mr Falconer.
On 5 July 2007, Mr O'Donnell transferred the $300,000 from Golf Link Partners Pty Ltd's account to his own account on the basis that it was money that the offender had lent to him personally.
Mr Falconer directed Mr Fagredin to describe the payment of $300,000 in the TZ Ltd general ledger for the NAB Share Placement account as "Linda Lau" and to insert the corresponding entry in the category "Consulting fees". These were false descriptions designed to conceal the true nature of the payment.
On 14 February 2008, the offender, through ZMS, advanced $200,000 to Mr O'Donnell, which he covered by a transfer of $200,000 from TZ Ltd's NAB account (count 6). On 20 February 2008 the offender transferred a further amount of $500,000 from TZ Ltd to BZI, of which $300,000 was advanced to Mr O'Donnell by way of further loan. The balance of the funds was used for the offender's own purposes, including to invest in shares with Berndale Securities Ltd, an online share broking house (BBY).
On 17 October 2008 the offender entered into an agreement entitled Deed of Acknowledgment of Debt with Mr O'Donnell's company, Luik Holdings Pty Ltd (Luik), and Mr O'Donnell. The Deed recorded in recital (A) that Luik owed the offender $1 million. I accept Mr O'Donnell's evidence that the $1 million was advanced in four lots: $200,000 in June 2007 (which is not the subject of a charge); $300,000 transferred to Golf Links Pty Ltd and withdrawn by Mr O'Donnell on 5 July 2007 (count 4); $200,000 to Mr O'Donnell on 14 February 2008 (count 6) and then $300,000 on 20 February 2008 (count 7). I reject the offender's explanation that the payments to Mr O'Donnell were related to the rebate paid as a result of the software being defective.

Purchase of shares in Reader China Group (relevant to count 5 (as amended))

Ms Lau and Mr Lai conducted a business in China through Reader China Group Ltd. Ms Lau invited the offender to invest in the company. They negotiated a share subscription agreement which, in a draft dated 3 July 2007, specified that the offender and ZMS would subscribe to the shares. When Ms Lau met with the offender in Hong Kong for the purposes of executing the agreement, the offender told her that the shares would be subscribed in the name of Profit Pearl Holdings Ltd. Ms Lau arranged for the transaction documents to be amended to reflect the identity of the new subscriber. The executed agreement, dated 20 July 2007, nominated Profit Pearl Holdings Ltd as the subscriber. The consideration for the share subscription, which was expressed in HK dollars, was equivalent to AU$300,000.
On 19 July 2007 the offender caused $400,000 to be transferred from TZ Ltd to Ms Lau's bank account. On that day Mr Falconer and Mr Fagredin (who was by this time an authorised signatory of TZ Ltd's accounts) requested an international transfer to Ms Lau of $400,000. Mr Falconer instructed Mr Fagredin to record the payment of $400,028 ($28 being for bank fees) as "consulting fees" in TZ Ltd's general ledger. This description was false as $300,000 of this amount was for the purchase of shares in Reader China Group Ltd.

The remaining counts

The factual circumstances of counts 1-3 (Oasis fund-raising); 4, 6 and 7 (loan to Mr O'Donnell); and 5 (purchase of shares in Reader China Group Ltd) have been set out above. The factual basis for the remaining counts is more straightforward and involved transfers of funds from TZ Ltd to the offender, his companies, or his creditors. The creditors who were paid in this way fell into two categories: those associated with the offender's interest in an industrial property at Ingleburn; and gambling creditors, principally the Waterhouse interests.

The property at Ingleburn: counts 10, 17 and 21

On 5 June 2006 ZMS borrowed over $10 million from Perpetual Trustee Company Ltd (Perpetual) for an industrial property at Ingleburn. ZMS defaulted on interest payments on 31 August 2007, 30 September 2007, 31 October 2007, and 30 November 2007. On 20 December 2007 Perpetual filed a statement of claim seeking possession of the Ingleburn property and payment of $8,992,894.71 against ZMS (as mortgagor) and the offender and Melissa Sigalla (as guarantors). Ms Cable, a partner of Heidtman & Co. (the solicitors for Perpetual), corresponded with Mr Calabria (the offender's solicitor) about the arrears and the refinancing of the loan.
On 12 February 2008 the offender wrote in an email to Mr Falconer: "I really need to pay perpetual asap so they stop from suing me".
Ultimately on 20 March 2008 the offender sent an email to Mr Fagredin, which was copied to Mr Falconer, requesting that $300,000 be transferred to Heidtman & Co. on behalf of ZMS. A Real Time Gross Settlement (RTGS) form requesting the payment was signed by Mr Fagredin and Mr Falconer. The transfer, which was the subject of count 10, was effected on 20 March 2008.
On 13 October 2008 Gadens, Perpetual's new solicitors, sent a letter of demand and a notice under s 57(2)(b) of the Real Property Act 1900 (NSW) to ZMS and its solicitors, which claimed the immediate payment of $4,665,285.99 being the amount due under the Perpetual loan as at 9 October 2008. In correspondence between the solicitors, it was agreed that recovery action would be deferred as long as $300,000 in cleared funds was paid forthwith.
On 15 October 2008 BZI paid $300,000 by cheque to Perpetual. The cheque was dishonoured by NAB as there were insufficient funds in BZI's account. On 16 October 2008 the offender transferred $400,000 by internet transfer from TZ Ltd's business management account to BZI (count 17). The offender was the only person authorised to transfer funds from TZ Ltd's bank accounts using the internet. He included the description "etrade" in the transfer. The $400,000 was described in TZ Ltd's general ledger account as "BZI-Oasis", although it had nothing to do with Oasis. On the same day, BZI paid $300,000 to Perpetual's account for the benefit of ZMS.
Throughout 2008, ZMS tried to refinance the Perpetual loan for the Ingleburn property. On 11 December 2008 ZMS's solicitors made a "without prejudice" offer proposing a payment of $500,000 the following day in return for Perpetual's agreement that it would extend the deadline for any recovery action from 12 December 2008 to 31 January 2009. Perpetual accepted the offer. As at 11 December 2008 BZI's bank account was $86,022.59 in credit and the offender's bank account was $3,424.27 in credit. That day, Mr Falconer and Mr Fagredin signed a request to Mr Sommerlad, who succeeded Mr Navarro as TZ Ltd's bank manager at NAB, asking for prepayment of $500,000 from a nominated TZ Ltd term deposit. NAB transferred the money into TZ Ltd's business management account.
On 15 December 2008 the offender used internet banking to transfer $782,000 from TZ Ltd's business management account into the account of BZI (count 21). On receipt BZI paid Perpetual the sum of $500,000 by cheque for the benefit of ZMS. The remaining funds were used to reduce BZI's indebtedness to BBY from $473,721.17.

The offender's gambling: counts 8, 9, 11, 12, 13, 14, 15, 16, 18, 19, 20, 22, 23 and 24

The offender engaged in gambling with several bookmakers, including Tom Waterhouse. At least part of each of the payments which are the subjects of counts 8, 9, 12, 13, 14, 15, 16, 18, 19, 20, 22, 23 and 24 were made to Mr Waterhouse or a company associated with him. Gambling is also relevant to count 11 since $200,000 was paid into the offender's account with Betstar. The offender had a credit agreement with the relevant Waterhouse entity which enabled him to continue to bet when his account was in debit. At times, when the amount outstanding was adjudged to be too high, Mr Waterhouse stopped the offender betting on the account until he had made a part-payment of the amount owing. In 2009 Mr Waterhouse stopped taking bets from the offender.
The evidence revealed that the offender placed significant bets and, at least for a period, was afforded considerable credit by Mr Waterhouse. For example, before races began on Saturday 18 October 2008 the offender's account with Mr Waterhouse was $1,614,680 in debit. On that day he placed bets on his account with Mr Waterhouse in various races at Caulfield, Eagle Farm and Randwick, as a result of which he won $1,439,500 and lost $1.6 million, leaving a closing balance of $1,775,180 in debit. Mr Waterhouse required the offender to reduce his indebtedness before betting again. On 21 October 2008 he made a payment of $300,000 by cheque drawn on his personal account in favour of Tom Waterhouse Pty Ltd on 17 October 2008. The offender had no funds to cover the cheque until he transferred $300,000 by internet transfer from the TZ Ltd Business Management account on 20 October 2008 (count 18).
Each of the payments in the counts where the monies went to gambling was made from the Business Management Account of TZ Ltd with NAB, with the exception of the payment of $50,000 in count 24 which came from the TZ NAB Visa account. Because of the similarity between these payments, it is not necessary to do more than summarise them in the following table: Count in indict-ment Date Amount False descriptions in TZ Ltd's general ledger Direct recipient of payment Immediate effect of payment Mechanism of transfer 8 25.2.08 $68,000 Allocated to "Share Issue Costs" and described as "balance of sub underwriting" BZI (which on-paid monies to ZMS) Bring ZMS account into credit after overdrawn through cheque paid to Tom and Bill Waterhouse P/L RTGS signed by Falconer and Fagredin 9 3.3.08 $300,000 Allocated to "Sundry DD" [debtors] and described as "DD" [debtors]. BZI Bring BZI account into credit after overdrawn through cheque paid to Berndale Securities Ltd (BBY) and permitted $100,000 to be paid to Tom and Bill Waterhouse. RTGS signed by the offender and Fagredin 11 17.7.08 $500,000 Allocated to "Kasbank Investment Account". BZI Enabled BZI to pay $200,000 to Betstar and $87,780 to BBY for the purchase of shares in Kingsgate Consolidated. RTGS signed by Falconer and Fagredin 12 21.7.08 $167,783.37 Allocated to "Kasbank Investment Account". BZI Partially covered cheque for $200,000 already drawn by BZI in favour of Tom and Bill Waterhouse P/L RTGS signed by Falconer and Fagredin 13 23.7.08 $600,000 Allocated to "Kasbank Investment Account". BZI Covered cheque for $250,000 already drawn by BZI in favour of Tom and Bill Waterhouse P/L; also used to pay BBY RTGS signed by Falconer and Fagredin; requested in writing by the offender 14 18.8.08 $525,000 Allocated to "Kasbank Investment Account". BZI (which on-paid monies to the offender's account) Covered cheque for $500,000 already drawn by the offender on 15.8.08 in favour of Tom and Bill Waterhouse P/L. RTGS signed by Falconer and Fagredin 15 24.9.08 $500,000 Allocated to "Kasbank Investment Account". BZI (which on-paid $400,000 of the monies to the offender's account) Sufficient to enable the offender to transfer $400,000 to Tom and Bill Waterhouse P/L. RTGS signed by Falconer and Fagredin 16 13.10.08 $300,000 Allocated to "Kasbank Investment Account". The offender's own account with NAB Sufficient to enable the offender to cover cheque of $300,000 to Tom and Bill Waterhouse P/L. Internet transfer effected by the offender himself who described the payment as "etrade". 18 20.10.08 $300,000 Allocated to "Kasbank Investment Account". The offender's own account with NAB Covered cheque for $300,000 which had been drawn on offender's personal account on 17.10.08 in favour of Tom and Bill Waterhouse P/L. Internet transfer effected by the offender himself who described the payment as "bby". 19 26.11.08 $200,000 Cheque account shows debit of $200,000 described as "BZI-share trading"; corresponding entry allocated to "Kasbank Investment Account". BZI Provided funds for cheque to be drawn in favour of Tom and Bill Waterhouse P/L in sum of $200,000. Internet transfer effected by the offender himself who described the payment as "bby shares". 20 10.12.08 $669,534.89 Cheque account shows debit of $669,534.89 described as "BZI-share trading"; corresponding entry allocated to "Kasbank Investment Account". BZI Provided funds for cheque to be drawn in favour of Tom and Bill Waterhouse P/L in sum of $200,000. Also provided funds for cheque to be drawn in favour of BBY in sum of $382,540.01 to reduce BZI's indebtedness to BBY from $751,419.47 to $368,879.46 Internet transfer effected by the offender himself who described the payment as "bby/bzi". 22 23.1.09 $307,000 Allocated to "Kasbank Investment Account". BZI (which on-paid the monies to the offender's account) Provided funds for transfer to Tom and Bill Waterhouse (Vic) P/L in sum of $300,000. Internet transfer effected by the offender himself who described the payment as "bby/bzi/ vpg". 23&24 2.3.09 $250,000 (count 23) Allocated to "Kasbank Investment Account". BZI Provided funds to cover cheque drawn by BZI in favour of Tom and Bill Waterhouse P/L in sum of $300,000. Internet transfer effected by the offender himself who described the payment of $250,000 as "as/tz inc bell pott" and the payment of $50,000 as "as". $50,000 (count 24)

The reference in the table to Kasbank Investment Account is a reference to a category in the general ledger of TZ Ltd. Mr Falconer told Mr Fagredin to allocate certain items to that category, which Mr Fagredin did, without understanding to what it referred. Because of the description in the general ledger, Mr Taylor, who had been TZ Ltd's auditor since his appointment in April 2004, believed the amount to be equivalent to a term deposit in a bank and recorded it as such in his worksheet for the half yearly accounts to 31 December 2008. The description in the general ledger was false and designed to conceal the true nature of the payment.

The period up until the offender's resignation from the board of TZ Ltd

In the months leading up to the offender's resignation from the board, TZ Ltd and TZ Inc were becoming increasingly short of funds, in part because the Global Financial Crisis (GFC), which became apparent in September 2008, made it more difficult to raise cash. The GFC destroyed the chances, at least for the foreseeable future, of a TZ entity listing on the NASDAQ. As referred to above, the plan had been to list a TZ entity on the NASDAQ by the end of 2008. The Appendix 4C document which was to be lodged for the quarter ending 31 December 2008 showed, by comparison with the quarter immediately preceding it, that TZ Ltd would only have another six months' worth of cash.
On 31 December 2008 TZ Ltd failed to make an interest payment of $2.2 million, due under a Convertible Note and Option Subscription Deed, which it had entered into with QVT Fund LP and Quintessence Fund LP (together QVT) in December 2007 to raise $24 million. On 20 February 2009 the offender was asked by the board of TZ Ltd (of which he was still a member) to approach QVT to try to renegotiate the terms of the deed. The board also resolved to authorise the offender to try to raise a further $5 million by the issue of an appropriate number of shares at $1.75 each.
On 24 April 2009 a Substantial Shareholder Notice in respect of TZ Ltd was lodged with the ASX calling for a general meeting to consider resolutions to remove the current directors and appoint new directors of TZ Ltd. The offender resigned from the board of TZ Ltd on 18 June 2009, as did the other directors.

The period after the offender's resignation from the board of TZ Ltd

The new board of TZ Ltd

Following its appointment on 18 June 2009, the new board of TZ Ltd began to make enquiries about funds that had been transferred out of TZ Ltd to the offender and his companies, ZMS and BZI. On 7 August 2009 Landerer & Co., TZ Ltd's new lawyers, wrote to the offender, who was in The Bahamas at the time, asking him to explain particular payments.

The commencement of the ASIC investigation

On 10 August 2009 Landerer & Co. wrote to the Australian Securities and Investments Commission (ASIC), on behalf of TZ Ltd, to request a meeting to discuss allegations that members of the previous board, including the offender, had engaged in fraud. On 14 August 2009 ASIC formally commenced its investigation and issued notices to various entities, including banks with which the offender held accounts. On seven occasions, as new evidence came to light, the investigation was expanded to incorporate additional suspected contraventions.

The preparation of the mandate agreement

During August 2009 Mr Falconer prepared a document on his computer which purported to be a mandate agreement between the offender, ZMS and TZ Ltd by which TZ Ltd agreed to pay to the offender 8% of all capital raisings for a five-year period from 22 July 2004. Despite the date it bore, the document was created using a form of ZMS letterhead which had first been generated on 20 February 2006. Further, although the agreement appeared to have been signed by both Mr Falconer and Mr Leibowitz, Mr Leibowitz did not ever sign the letter. The signature on the document, which appeared to be his, was a digital image which was created on 22 August 2009 using a particular version of Adobe Photoshop which was first released in August 2008.
When the offender returned to Australia on 30 August 2009, he obtained a copy of the mandate agreement from Mr Falconer. After 15 September 2009, the offender showed the mandate agreement to his accountant, Mr Fornasaro, and asked him to redo his accounts and those of his companies on the basis of invoices previously produced for the offender by Mr Falconer but never submitted to TZ Ltd, which claimed payments which the offender then sought to justify by reference to the mandate agreement which Mr Falconer had recently manufactured.
The offender's attempt to use the counterfeit mandate agreement to justify payments to himself demonstrated a consciousness of guilt of the offences charged in the indictment.

Asset preservation orders and contempt proceedings

On 26 August 2009, this Court made asset preservation orders on ASIC's application, including against the offender. These orders were extended from time to time. Ultimately, they were dissolved on 22 August 2011 in respect of the offender's assets and those of his company, BZI, as a result of a settlement reached between TZ Ltd and the offender of various civil proceedings in the Equity Division of this Court. The settlement resulted in the execution of two deeds, one of release and one of settlement, and the payment by Melissa Sigalla, the offender's wife, of $250,000, inclusive of costs, to TZ Ltd.
During this period, on 18 February 2011, the offender was found guilty of contempt of Court in respect of nine charges. Ultimately, on 28 February 2012, he was ordered to perform 120 hours of community service.

The continuation of the ASIC investigation

ASIC's investigation into the offender's conduct and the conduct of others associated with TZ Ltd was complex, time-consuming and expensive. It issued over 200 notices to produce documents; and about 29 notices to attend for examination. It liaised with the Hong Kong Securities and Futures Commission and the International Criminal Police Organization. It obtained statements from 52 different witnesses and undertook detailed forensic accounting analysis of the flow of funds. ASIC seized Mr Falconer's laptop on 16 September 2009 and arranged for forensic document analysis of various documents to ascertain the time of their creation and their provenance. Such documents included the invoices relied on by the offender to support the payment of the monies referred to in the counts in the indictment as well as the mandate agreement. The brief of evidence which ASIC provided to the Commonwealth DPP consisted of 35 volumes of hard copy material. This brief of evidence was subsequently supplemented.
Charges were laid against the offender on 15 May 2013. Further charges were laid on 21 November 2013. The committal proceedings were originally listed on 16 July 2013. It was not until 12 November 2014 that the paper committal proceeded. As appears from the unchallenged affidavit evidence of Paul Whittaker, Senior Manager of ASIC's Corporations and Corporate Governance Enforcement Team, which was read without objection at the sentence hearing, there were several occasions on which the offender sought adjournments of the committal proceedings, which ultimately proceeded on 12 November 2014, after the refusal of the offender's application for a stay. The offender was committed to stand trial in this Court on 18 December 2014.
During the period between the first mention of the matter in the arraignments list in this Court and the first day of trial, 19 October 2016, the offender made several applications for adjournment, including of previously fixed trial dates, in part on the basis of changes in his legal representation.
Following the return of the jury's verdicts on 22 November 2016, the Crown's detention application was granted and the offender was taken into custody where he has remained since. The matter was stood over to 3 February 2017 for the sentence hearing to enable a pre-sentence report to be obtained.

Pre-sentence report

The offender was interviewed by Gareth O'Rourke, a Community Corrections Officer, who prepared a pre-sentence report dated 23 January 2017. As the offender did not give evidence at the sentence hearing, I place little weight on his statements to Mr O'Rourke except to the extent to which they were reflected in his evidence at trial, were against his interest, or were corroborated by his daughter, Zoe, who gave evidence at the sentence hearing.

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

I must have regard to the totality of the offender's criminal behaviour for the 24 offences to determine the appropriate sentences for all offences as well as the effective total term: s 16A(2)(a), (b) and (c); s 16B of the Crimes Act 1914 (Cth) and Johnson v The Queen (2004) 78 ALJR 616; [2004] HCA 15.
The nature and circumstances of the offences have largely been addressed above. I regard the conduct underlying counts 1-3 as a single course of conduct which came about as a result of the offender procuring a commission for himself and Mr Falconer for the Oasis capital raising, to which they were not entitled. I also consider it appropriate to regard the conduct underlying counts 4, 6 and 7 as a single course of conduct as each count comprised an advance to Mr O'Donnell for the same purpose.
I am not persuaded that it is appropriate to characterise the conduct underlying the remaining counts as a course of conduct, since, in my view, each offence was a discrete act with its own separate criminality.
The 24 counts differ in the timing of their commission since the conduct in count 24 occurred about two years and four months after the conduct in count 1. The quantum of the amounts taken is a further distinction between counts. While there is no direct numerical relationship between the amount of money (or value of shares) taken and the seriousness of each offence, the amount is a relevant factor in assessing gravity of the offence.
Notwithstanding these differences, the conduct underlying the 24 offences comprised criminal acts of the same or a similar character. Each of the offences committed by the offender took place when he occupied a position of trust which gave him access to monies that, by and large, had been raised from the public.
As a de facto director (from 15 July 2004 to 29 January 2007) and a legal director of TZ Ltd (after 29 January 2007), the offender owed TZ Ltd a duty to act in the interests of the company. Like the gamekeeper who poaches, he helped himself to over $8.6 million of the company's funds and shares, as and when it suited him, in gross dereliction of his duties to the company and its shareholders. His offending conduct is objectively very serious.

Circumstances of the victim: injury, loss and damage

The offender breached his duties to TZ Ltd and its shareholders by dishonestly using his position as a director to rob the company of substantial cash. Of the $8.6 million he took (around $7.5 million for his own benefit and the balance of $1.1 million apparently for Mr Falconer's benefit), only $250,000 was recovered (by way of payment under the deeds referred to above). There is no evidence as to whether the $250,000 represented any restitution of the monies taken as opposed to some reimbursement of TZ Ltd's costs of the civil proceedings.
It was not only TZ Ltd and its shareholders who were harmed by the offender's conduct; the investing public was also affected. Private investment in public companies is a significant aspect of the market economy. If potential investors fear that the directors of public companies will misuse their positions to their own advantage, they will be loath to invest and the market will be deprived of capital which would otherwise have been available. The importance of safeguarding and restoring investor confidence in the ASX is a significant reason for criminalising the dishonest use of the position of a director and also bears on the sentences to be imposed.

Degree of contrition and making reparation

In his evidence at trial, the offender gave a series of explanations to justify the payments in the counts in the indictment, including: the mandate agreement; proceeds of share trading; non-recourse loans; rebate for Golf Link sale; and the doctrine of quantum meruit. Each was false and reflected the offender's wholly unjustified sense of entitlement.
Throughout his evidence at the trial the offender displayed significant hubris which was entirely at odds with any remorse. He boasted about his capital-raising skills, as the following statements in his evidence demonstrate: "You keep failing to realise that TZ earnt no income. That's why every deposit into its accounts were [sic] from capital raisings made by me." "Without my capital‑raising efforts the company would have had nothing." "TZ wouldn't exist if I didn't raise the money." "Any money that I raised and put into the company, right, didn't belong to TZ, it belonged to me, right, to deal with in purchasing shares, or the end recipient who was the ‑ I should start again, the people who placed the money into TZ or if I placed the money into TZ. The money didn't belong to TZ."
The offender appeared to consider that the ends justified the means. For example he said in cross-examination: "I don't think you understand. This is a very fluid and chaotic company. I'm raising money all of the time for a company that's losing money all of the time and the company owes me a commission. I don't and can't recall exact dates as to when it happened, only ‑ but the fact is, and no one has ever denied it, I raised the money."
The offender's lack of remorse was reiterated in the pre-sentence report which recorded: "He [the offender] did not countenance any feelings of remorse, believing he has nothing to be remorseful about."
It would, in my view, be inappropriate to regard the settlement of the civil proceedings between the offender and TZ Ltd by the payment by Mrs Sigalla of $250,000 as an act of "reparation". The payment is consistent with a tactical or pragmatic settlement of commercial proceedings on the basis of no admissions and which was inclusive of costs.
Throughout the trial, the offender, in his evidence and through his counsel, continued to blame extrinsic factors for his predicament and bemoaned what he regarded as the ingratitude of the shareholders of TZ Ltd, whom he saw as the beneficiaries of his talent for capital raising.

Extent of co-operation with the authorities

The offender did not co-operate with ASIC during the investigation of the offences. Indeed, from the outset he thwarted its endeavours to ascertain what had occurred by asserting that he was entitled to the monies by reason of the mandate agreement, which he knew had been created after the event to cloak the payments with unwarranted legitimacy. His indignant and intransigent attitude at least partly contributed to the length and cost of the investigation.
I note that Mr Brewer, who appeared in the trial on behalf of the offender, conducted the trial in an efficient and co-operative manner, which substantially shortened the time and cost of the trial to the public. I take this matter into account on sentence in favour of the offender.

Specific deterrence

A custodial sentence will prevent the offender from re-offending during the period of any incarceration because of the restrictions of being in gaol. Upon release the offender will be automatically prohibited from acting as a director for a period of five years: s 206B of the Corporations Act. The period may be extended by a court on ASIC's application to a maximum period of 15 years: s 206BA of the Corporations Act. Under s 206G a court may grant leave for a disqualified person to manage a corporation. Although the offender does not accept that he has done anything wrong, the damage to his reputation and the limits imposed by the law on his being appointed as a director may curtail his opportunity to re-offend in the future.

General deterrence

General deterrence is an important consideration. Offences such as these are notoriously difficult to detect and prosecute. The offender went to extraordinary lengths, both at the time and subsequently, to conceal his wrongdoing from the shareholders, the new board and ASIC, by disguising the true nature of the transactions and relying on the fake mandate agreement to justify the payments. One of the purposes of incorporating an element of general deterrence in a sentence is to deter others from similar wrongdoing. Another purpose is to ensure that public confidence in the administration of justice is maintained: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [82] per McHugh J.

Punishment

Punishment is an important purpose of sentencing. The sentences for the 24 offences must also take this purpose into account. A substantial sentence, which includes a significant period in custody, is, in my view, necessary to ensure that the offender is adequately punished for the offences.

The character, antecedents, age, means, and physical and mental condition of the offender

The offender was born in 1965 and is now aged 51. His upbringing was privileged, at least in material respects. He was educated at Sydney Grammar School from preparatory school and remained there until he completed his Higher School Certificate. He obtained his tertiary education at Sydney University where he studied Economics and Law. He graduated in Economics. In 1988 his younger sister died at the age of eight. The offender did not complete his law degree as his parents were so distraught at the loss of their daughter that he was required to run the family business. A year later his father died of a heart attack. Subsequently, in the 1990's, the offender spent about two years in Tucson, Arizona on what he described as an extended vacation.
On the offender's return to Australia he learned that the family solicitor had committed suicide after embezzling the fortunes of many of his clients, including the offender's family's. It became necessary for the offender to earn a living. He first worked as a consultant in corporate finance for Deloitte Touche Tohmatsu for about three years. He used his connections with people whom he described as "high net worth individuals", whom he had met at school and who were in his late father's circle of friends, to build a client base. He was later paid on commission as a consultant for an investment firm. In 1998 the offender became involved in Consolidated Gaming Group and played a part in its being listed on the ASX. When it was taken over, he began to do some capital raising for Mr Ruddock, initially for Telezygology Pty Ltd and subsequently for TZ Ltd. He put a substantial amount of his own funds into the business in order to persuade others to do the same.
The offender's education, connections and intellect placed him in a position to use his undoubted talents and opportunities to raise considerable sums of money for a company that was, at all material times, loss-making, as it was engaged in substantial product development for the purpose of eventual profit.
There is no evidence that the offender suffers from any mental illness or disorder. He distinguished himself from uncontrolled punters in the thrall of gambling addictions and described his own gambling as a professional activity which was a "churning business where a lot of bets covering a lot of outcomes allowing you to win a percentage on turnover over the years". As recorded in the pre-sentence report, he told Mr O'Rourke that his "involvement in bookmaking and horseracing was a mixture of business and recreation".
It emerged at trial that the offender is diabetic and has been managing his diabetes with insulin injections for over a decade. There is no evidence that his diabetes would render his period of incarceration materially more onerous.
According to Zoe Sigalla, the offender's daughter who gave evidence at the sentence hearing, he has lost 40 kgs since being admitted to custody on 22 November 2016. Notwithstanding his substantial weight loss the offender remains overweight, although to a considerably lesser extent. No evidence has been adduced to link his weight loss to a medical condition and there is no mention of this being an issue in the pre-sentence report.
The offender has, with a minor exception, no criminal record. On this basis he is entitled to be treated as of prior good character. However, this matter is of limited weight in the present context for two reasons. First, had he not been of good character he would not have been placed in such a position of substantial trust with access to such significant funds. Secondly, the offending conduct took place over a period of more than two years in circumstances which demonstrated considerable deception, ingenuity, opportunism and greed.

Prospects of rehabilitation

The Crown did not make any submissions on the offender's prospects of rehabilitation. Mr Spencer, who appeared for the offender at the sentencing hearing, accepted that the offender did not consider that he had done anything wrong. In order for there to be prospects of rehabilitation, it is necessary for there to be some acknowledgement of wrongdoing, which is entirely absent in the present case.

The probable effect that any sentence under consideration would have on any of the person's family or dependants

The offender is married and has three daughters, aged 18 to 26. For some time, he has lived separately from his wife, who resides with her parents and children. His wife and daughters support him and continue to visit him regularly in custody. I accept that the offender's custody has a significant, but not exceptional, effect on his family. Undoubtedly, the offender's family will suffer from his being in gaol. However, although I take that matter into account, I do not consider that, in all the circumstances, it materially affects the sentence.

Delay

The offender has raised delay as a mitigating factor on sentence. Through his counsel, the offender submitted that it was a "long time" between 2009, when Landerer & Co. reported the matter to ASIC, and when the trial began on 19 October 2016. In the narrative of facts I have set out, in summary form, what occurred of relevance during that period.
Having considered the unchallenged evidence of Mr Whittaker, I am not satisfied that there was any relevant delay which cannot be satisfactorily accounted for, either by the nature of the offending (which led to, and required, a complex and time-consuming investigation) or by the offender's own conduct in delaying the committal hearing and the commencement of the trial.
At least in respect of some counts, the offender engaged in substantial subterfuge. The conduct underlying counts 1-3 in particular was such as to make it appear that the monies paid to him were actually commission paid to Ms Lau as a result of the Oasis capital raising. I am satisfied, on the basis of Mr Whittaker's evidence, that what was presented at trial in a clear, ordered and distilled fashion was the result of substantial and time-consuming investigation and analysis.
In any event, there is no evidence that the offender suffered any significant detriment as a consequence of the delay. He continued to work, including throughout the trial and, as I have said above, his conduct after proceedings had been commenced in the Local Court and he had been arraigned in this Court also contributed substantially to the delay.

Extra-curial punishment/ disqualification from holding office

I accept that the offender has lost whatever good reputation he enjoyed before he was convicted. One would expect such a consequence to flow from the conduct of which he has been found guilty, which involved substantial dishonesty and which conferred a considerable material benefit on the offender personally.
As referred to above, the offender will, on his release, be disqualified from managing corporations for a period of five years, unless leave is granted by a court. The protective purpose of the disqualification does not deprive it of its penal effect, which must therefore be taken into account in sentencing.

Other matters

The Crown has drawn my attention to sentences imposed for similar or analogous offences although it does not contend that any are strictly comparable. There are limits on the value to the sentencing process of previously decided cases: Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [54]-[55]. I have, however, taken into account the authorities to which I have been referred. The maximum penalty of five years is a relevant matter and indicates the term which would be appropriate for the most serious category of case: Markarian v The Queen at [31] per Gleeson CJ, Gummow, Hayne and Callinan JJ.

Whether a custodial sentence ought be imposed

In all the circumstances, and having considered all other available sentences, I am satisfied that no sentence other than a sentence of imprisonment is appropriate: s 17 of the Crimes Act. My reasons are those given above as to the seriousness of the offending conduct, the importance of punishing the offender and denouncing his conduct, and the need for general deterrence.

Time in custody

The offender has been in custody since 22 November 2016. The sentence will commence from that date.

The imposition of a non-parole period

Where a sentence exceeds three years in the aggregate, a single non-parole period must be fixed: s 19AB of the Crimes Act. For Commonwealth offences, there is no statutory or judicially determined "normal" ratio between the non-parole period and the total sentence. Accordingly, my discretion to determine the total sentence, the non-parole period and the parole period is not constrained by any formula or norm. The non-parole period is to be determined by what, in all the circumstances of the case, ought be the minimum period of actual incarceration: Power v The Queen (1974) 131 CLR 623 at 627-629; R v Simpson [2001] NSWCCA 534; 53 NSWLR 704 at [59] per Spigelman CJ; Hili v The Queen; Jones v The Queen at [44]. Although the purposes to be served by the sentence are many, I regard the purposes of punishment and general deterrence to be of particular significance in the present case.
When the offender is released to parole, he is unlikely to require assistance to reintegrate him into the community. However, the period on parole may prove salutary in that it may incline him not to re-offend, since, were he to do so, he may be required to serve the balance of his term in custody.
I note Mr Pigott's undertaking to explain to the offender the purposes and consequences of fixing the non-parole period: s 16F of the Crimes Act.

Conviction

The jury returned unanimous verdicts of guilty in respect of each of the counts. Accordingly, I order that the offender is convicted of each of the 24 counts on the indictment.

Sentence

Andrew Sigalla: 1. For count 1, I impose a sentence of imprisonment of 3 years commencing on 22 November 2016. 2. For count 2, I impose a sentence of imprisonment of 3 years commencing on 22 January 2017. 3. For count 3, I impose a sentence of imprisonment of 3 years commencing on 22 March 2017. 4. For count 4, I impose a sentence of imprisonment of 3 years commencing on 22 July 2017. 5. For count 5, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 October 2017. 6. For count 6, I impose a sentence of imprisonment of 3 years commencing on 22 December 2017. 7. For count 7, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 February 2018. 8. For count 8, I impose a sentence of imprisonment of 1 year commencing on 22 May 2018. 9. For count 9, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 September 2018. 10. For count 10, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 January 2019. 11. For count 11, I impose a sentence of imprisonment of 4 years commencing on 22 May 2019. 12. For count 12, I impose a sentence of imprisonment of 2 years commencing on 22 September 2019. 13. For count 13, I impose a sentence of imprisonment of 4 years commencing on 22 January 2020. 14. For count 14, I impose a sentence of imprisonment of 4 years commencing on 22 May 2020. 15. For count 15, I impose a sentence of imprisonment of 4 years commencing on 22 September 2020. 16. For count 16, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 January 2021. 17. For count 17, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 May 2021. 18. For count 18, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 September 2021. 19. For count 19, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 January 2022. 20. For count 20, I impose a sentence of imprisonment of 4 years commencing on 22 May 2022. 21. For count 21, I impose a sentence of imprisonment of 4 years commencing on 22 September 2022. 22. For count 22, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 January 2023. 23. For count 23, I impose a sentence of imprisonment of 3 years 6 months commencing on 22 May 2023. 24. For count 24, I impose a sentence of imprisonment of 1 year commencing on 22 September 2023. 25. The overall effective sentence I impose consists of a total term of 10 years commencing on 22 November 2016 and expiring on 21 November 2026. 26. I fix a non-parole period of six years, expiring on 21 November 2022.

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: 10 February 2017

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