R v Zotos [2008] VSCA 82

1 The respondent acknowledged at the commencement of the appeal that there were specific errors made in the sentencing process which would necessitate the re-sentencing of the appellant. For the reasons advanced by Osborn AJA, I agree that the appeal should be allowed and the appellant re-sentenced as his Honour's proposes.

2 I have had the opportunity to read the judgment of Osborn AJA in draft and for the reasons stated therein I agree that the appellant should be resentenced as proposed by him.

**3 On 17 April 2007 the appellant was arraigned before the County Court at Melbourne on four counts of obtaining financial advantage by deception, one count of attempting to obtain financial advantage by deception, two counts of using false documents, two counts of making false documents and two counts of possessing a drug of dependence.

4 He pleaded guilty to each count and was sentenced on 20 April 2007 to a total effective sentence of 52 months' imprisonment with a minimum of 34 months before becoming eligible for parole.

5 The appellant was also charged with two summary offences namely, possession of a regulated weapon and engaging in the business of a crowd controller without holding a licence. He pleaded guilty to the summary offences and was fined $1,000 on each.**

**6 He now appeals against the Court's sentence other than that imposed with respect to the summary offences.

7 The circumstances associated with the offences were as follows. The first count arises out of an application made by the appellant in the name of Christopher Zotos, to obtain an American Express Gold credit card, in support of which he provided fraudulent information. In particular, he stated that he owned residential premises in Northcote, was employed as a manager at Bar 148 in Morwell and had been so employed for three and a half years. He also stated that his gross annual salary was $72,000. Each of these claims was untrue.

8 On the basis of that application, American Express issued the appellant with a credit card which was used from 3 December 2002 until 2 February 2003 to purchase goods and pay accounts. The accused incurred credit card debts to the value of $46,693.46.

9 In his record of interview the accused admitted:**

He changed his name in order to start a business after leaving gaol and make a living. He used the card to buy supplies for his shop and to buy furniture for a house he was renting in Northcote.

He also used the card to purchase household groceries and fishing equipment for an interstate holiday.

He mostly used the card to buy supplies for the shop but when he was reimbursed for these purchases, he did not use the money to pay off the credit card but diverted it to other uses and "things got out of hand".

He used the card to buy things such as computer equipment located at his house and a digital camera.

**10 Count 2 involves a similar offence. On 3 March 2003, the appellant submitted an electronic application in the name of Chris Sottos to the National Australia Bank in support of which he provided fraudulent information relating to his credit history, previous names, employment history and income. The appellant also failed to disclose outstanding credit card debts. The bank issued a Visa card to the appellant on 4 March 2003, with a credit limit of $8,000. He commenced using this card on 12 March 2003 to purchase goods and pay accounts up until 10 April 2003. He obtained funds to the value of $8,339 (including fees and interest). He made no repayments on this account and it was subsequently cancelled.

11 In his record of interview the appellant admitted:**

He used the credit card while on holiday in Thailand where he purchased a Sony video camera using the card and stayed at a top class hotel. He subsequently resold the camera for $800 and applied the proceeds to the costs of his wedding reception.

**12 Count 3 continued the sequence of fraudulent dealings with respect to credit cards. On 2 April 2003 the appellant submitted an electronic application for a National Australia Bank Visa card. It was again supported by false information. The appellant failed to disclose outstanding credit card debts or other adverse matters. He provided a false history and false employment and income details. The card was issued but cancelled on 8 April 2003, before any loss was incurred by the bank.

13 Count 4 continues the history of the appellant's dealings with credit cards into the subsequent month of May 2003. On 15 May 2003 he submitted an electronic application for a Commonwealth Bank Visa card, giving false information as to his name, residence, employment history, assets and annual income. He again failed to disclose outstanding credit card debts. He was issued with a credit card having a limit of $8,000. He then incurred a debt of $9,045 including fees and interest. No payments were made on that card. As with count 2, it may be observed that although the sum in issue is less than count 1, it effectively represented the full credit available under the card. In his record of interview the appellant stated that he applied for the loan because he was falling deeper into debt.

14 Count 5 involved an attempt on 19 May 2003 to obtain a personal loan for the purchase of a boat valued at $51,000. The loan application was made in the name of Christopher Stavropoulos and was supported by a Victorian driver's licence which the appellant forged using his computer, a false Victorian birth certificate and a false Australian Tax Office tax assessment. The loan was conditionally approved but did not proceed as the appellant was not able to satisfy a requirement to pay a deposit or provide adequate proof of current income.

15 Count 6 is one of using false documentation with the intention of obtaining a tenancy agreement in respect of a residential property in Greensborough. As a result of the production of the false documents, the appellant obtained a tenancy agreement. He and his wife and first child moved into the property on 7 December 2004, for a 12 month term. During this period he did not default in the payment of rent.

16 Counts 7 and 8 relate first to the making and secondly to the use of false documents, with the intention of inducing the Football Federation of Australia to accept the documents as genuine and rely on them to provide an Australian Soccer Association coaching accreditation. The documents in issue comprised a suite of relatively sophisticated forgeries purporting to be European and English Football Association coaching licences, three certificates of relevant English qualifications and a Nottingham Forest Football Club award for coaching services.

17 As a result of the supply of this information the appellant was given a probationary coaching letter from the Football Federation of Australia, which he used to obtain a Victorian coaching licence. It appears he did not in fact obtain a coaching position.

18 In his record of interview he said he was applying for a job as a coach because the pension he was on was inadequate. He claimed to have engaged in soccer coaching previously and coached with North Coburg United. On further questioning he said that he did not want police to make inquiries of this club because 'they're going to make a big deal out of this, they're going to make [me] look like an idiot'. Further, the coaching he had done there for the under 10's was unpaid. He also claimed to have done a coaching course with Nottingham Forest Soccer Club when he was still at school. I do not regard any of his claims to coaching expertise as credible.

19 Count 9 is a similar count to count 7. In June 2005 the appellant submitted a written rental application to estate agents in respect of premises in Churchill Avenue, Tullamarine. He supplied false information in support of that application relating to his employment status, his assets and previous rental history. As a result he obtained a lease of the premises in Tullamarine. He did not default with respect to the payment of rent relating to these premises.

20 In September 2005, the appellant's course of conduct since November 2002 came under investigation, and on 20 September 2005 police attended at his home in order to arrest him. When the premises were searched, he was found to be in possession of a prohibited weapon, a small quantity of methylamphetamine (Count 10) and of a small quantity of cannabis seeds ( Count 11).

21 When the matter came before the County Court, the learned sentencing judge took the view that the principal offences in which the appellant was involved constituted a series of sophisticated and considered frauds. I agree with this characterisation. I also agree with his Honour's observations that there can be no doubt that the offences were deliberate and intentional. They took some preparation. The appellant knew exactly what he was doing and he knew what the consequences would be if he were found out.

22 His Honour also took particular account of the appellant's criminal history, to which I shall return, and of his family circumstances, a factor upon which substantial emphasis was placed in submissions before us and to which I shall also return.

23 Ultimately, his Honour imposed the following sentences:**

His Honour directed that a total of 28 months be served cumulatively with the sentence imposed on count 1.

**24 This resulted in the total effective sentence of 52 months' imprisonment, to which I have already referred, of which his Honour directed that the appellant serve a minimum term of 34 months before being eligible for parole.

25 Unfortunately, it is apparent that in so sentencing, his Honour transposed the sentences which he intended to impose with respect to counts 10 and 11. As a result, the sentence of 6 months imposed in respect of count 11 was imposed in respect of possession of cannabis. It is conceded that such sentence was unlawful in that it exceeded the maximum penalty of a fine of five penalty units.[1]

26 The respondent further concedes, and I accept, that the sentence intended to be imposed for possession of methylamphetamine was itself excessive having regard to the quantity in issue (0.2 grams); the plea of guilty; and the lack of prior convictions for drug offences.

27 In the circumstances, and having regard to the orders made for cumulation, it follows that the appellant must be resentenced by this Court. The respondent did not contend otherwise.**

28 The appellant was born on 17 January 1970, and is thus now 38 years of age. He comes before the Court with some 130 prior convictions, and it is this history which is the essential basis justifying a sentence of the order imposed in the County Court. In my view, that history demonstrates consistent and repeated fraudulent conduct which is such as to:

• demonstrate pervasive, continuing and serious dishonesty throughout the appellant's adult life;
• demonstrate a serious need for specific deterrence;
• raise serious questions as to any realistic possibility of rehabilitation;
• raise significant issues of general deterrence; and
• raise a real question as to the need to protect the community from his ongoing depredations.

**29 I should add that the appellant's criminal history is also such that I would have serious reluctance in accepting any uncorroborated statements made by him as to exculpatory matters.

30 The learned sentencing judge summarised the most relevant of the appellant's prior convictions as follows:**

... You were first before a Magistrates' Court at Northcote in August 1987 when you were 17 years, on counts of burglary and theft.

You were again before a Magistrates' Court on 14 March '89 on counts of theft and failing to answer bail.

More relevantly, for current purposes, you were again before a Magistrates' Court on 22 March 1990 on multiple counts of burglary, attempted burglary, obtaining financial advantages by deception, obtaining property by deception, theft, going equipped to steal, and other offences, and for the first time a term of imprisonment was imposed. It was wholly suspended but by reason of subsequent offending the sentence was reinstated.

Notwithstanding that you were again before the Magistrates' Court at Heidelberg on 9 August 1991 on no fewer than nine counts of obtaining property by deception, attempting to obtain property by deception, theft and two counts of failing to answer bail. You were sentenced to terms of imprisonment.

In 1992 you were again before the Court on no fewer than 31 counts of obtaining property by deception, four counts of attempting to obtain property by deception, nine charges of obtaining a financial advantage by deception and driving a car whilst your licence was suspended. You were sentenced to be imprisoned for a period of 16 months.

You were before the Court again in August 1994 on a count of being in possession of a regulated weapon. It is unrelated to the principal counts presently before me but it is, rather surprisingly, a similar offence to one of the summary matters to which you have pleaded guilty.

In February 1995, you were again before the Magistrates' Court on a count of obtaining property by deception and failing to answer bail. You were sentenced to be imprisoned for 42 days on each charge suspended for 12 months. (And were fined).

In February 1995 you were before the Court on a count of attempted theft and other matters.

In December 1995, three counts of theft, four counts of obtaining property by deception, a count of making a copy of a false document, handling stolen goods and other counts. You were sentenced to 12 months' imprisonment with a minimum of four months to be served before being eligible for parole.

On 26 June 1996 on a count of obtaining property by deception, you were sentenced to 6 months wholly suspended, which sentence was subsequently reinstated as a result of other offending, although on appeal it was further suspended but increased.

On 25 November 1996 you were before the Magistrates' Court at Preston, on two counts of obtaining property by deception, making a false document to the prejudice of another and using a copy of a false document. (And on appeal to the County Court received suspended sentences).

In March 1997 you were before the Heidelberg Magistrates' Court on counts of obtaining financial advantage by deception, obtaining property by deception and other similar offences. (And on appeal to the County Court received suspended sentences).

You had other unrelated appearances and then before this Court on 2 August 1999 you appeared on 11 counts of obtaining property by deception, six counts of attempting to obtain a financial advantage by deception, seven counts of obtaining a financial advantage by deception and two counts of attempting to obtain property by deception. You were sentenced to a total effective sentence of 4 years' imprisonment with a minimum term of two years before being eligible for parole.

You were again before the Magistrates' Court on similar charges in December 1999 and most significantly before this Court again on 20 March 2000 on 10 counts of obtaining a financial advantage by deception and five counts of obtaining property by deception. You then had other appearances on, basically, unrelated matters in 2003, no fewer than four of them. One of them, however, was operating as a crowd controller without a licence. In 2000 the total effective sentence was two years and six months and you were ordered to serve 22 months before being eligible for parole.

**31 It appears that the offences now before the Court commenced immediately after the appellant satisfactorily completed the period of parole last granted to him.

32 Mr Croucher's submission on behalf of the appellant focussed upon the appellant's circumstances at the time of the offences now in issue and in the period leading up to his arrest. He did not assay a personal history that might better inform some notion of the appellant's personal development over his full adult life. A similar course was taken in the County Court, and it is plain that on each occasion the course adopted was taken because in the light of the appellant's criminal history there was little positive that could be said. Nevertheless, the absence of background material other than the appellant's criminal history places the Court in a difficult position in terms of forming any positive prognosis as to the appellant's future behaviour. I turn then to the principal matters advanced on behalf of the appellant.**

**33 In my view the principal factors mitigating in favour of the appellant are, simply, the fact of his admissions to police and his subsequent plea of guilty at the earliest opportunity.

34 His co-operation and pleas were also accompanied by some repayment of the moneys he had obtained by deception (approximately $1,200).**

**35 It was also submitted that the penalties imposed for the appellant's offences of dishonesty should reflect the total loss suffered by others in each instance. More particularly, it was submitted that count 1 was an offence of greater culpability than counts 2, 3 and 4 and that the sentences imposed in the County Court with respect to the latter counts were excessive.

36 Whilst I accept that the extent of such loss is a relevant factor,[2] the reality is that the appellant's credit card offences constituted a series of rolling acts of dishonesty. Not only was the obtaining of each credit card sequential but the use of each credit card involved repeated acts of dishonesty as the record of interview makes clear.

37 The applications for American Express, National Australia Bank and Commonwealth Bank credit cards each involved deliberate fraud of essentially the same character. It is difficult to avoid the inference that the losses were only limited in respect of particular cards by reason of the credit limit upon them, and in one instance the cancellation of the card. The appellant used three of the cards to obtain a series of financial advantages. The losses suffered as a result of his use of the American Express card were more substantial than as a result of the use of the other cards, but those other losses were themselves not insignificant.**

**38 After release on parole prior to the commencement of the offences now in issue, the appellant became involved in the operation of a bar in Morwell in partnership with a former policeman. In his record of interview, he stated that this business generated an income in the order of $8,500 per month, but nevertheless financial pressures associated with it led him into offending.

39 Whilst working in Morwell the appellant met his wife who was working as a track rider. Subsequent to their marriage his wife was injured as a result of an accident and remains disabled. At a point in time which is unclear, he became her principal carer and obtained a carer's pension. He also worked successfully for a period of time as a night filler in a supermarket. It appears that this occurred after the birth of the couple's first child. Subsequently he sought to move to Queensland with his family and continue working in the supermarket business. In the event, this employment was terminated after a relatively short period when his employer discovered his criminal record.

40 The appellant and his wife now have three children under the age of 3 (the third having been born since he was imprisoned). It is intended that upon his release from imprisonment he will seek to obtain employment with a relative of his wife who has a building business.

41 I accept that the separation of the appellant from his family must be mutually difficult and the fact that he has a family to return to is a factor tending to favour his prospects of rehabilitation.**

**42 Mr Croucher further submitted on behalf of the appellant, that a pattern can be discerned in the appellant's behaviour in recent times which encourages the view that the Court should maximise the opportunity for his rehabilitation.

43 More particularly, he submitted that the earlier offences of dishonesty now in issue, were committed in circumstances where funds were required to fund an ongoing business in which the appellant was involved.

44 He further submitted that the later offences were committed in circumstances where the appellant was seeking to provide for a new partner who became his wife and to provide for their infant children.

45 In turn, it was submitted that the fact the appellant did not offend during the relatively extensive period between his arrest and his sentence in the County Court materially added to a picture of someone whose conduct was increasingly responsible.

46 Insofar as the initial dishonesty offences are concerned, I do not accept that the evidence establishes that they were simply committed by reason of business pressure. Rather, it is apparent from a detailed examination of the appellant's record of interview (including some of the answers I have quoted above) that the appellant's fraudulent conduct was in large part motivated by a desire to fund his personal lifestyle. The fraudulent attempt to obtain finance for a $51,000 boat perhaps exemplifies this best.

47 Furthermore, it is evident from the answers given in his record of interview that the appellant lacks insight into the significance of his offending, which, in light of his extensive history of similar offending, does not encourage a positive view to be taken of his prospects for rehabilitation.

48 Insofar as the latter period of offending is concerned, I accept that falsification of documents for the purposes of obtaining accommodation for the appellant's family was motivated by a desire to accommodate them and not simply the appellant. I also accept that it is likely the appellant may have had difficulties in obtaining appropriate references in the absence of false documentation, and that it cannot be inferred that the appellant's conduct was accompanied by any intention to cause the respective landlords actual loss. Nor is there any evidence that this has occurred. These considerations support the view that his conduct with respect to these matters can be regarded as somewhat less culpable than the other offences of dishonesty.

49 The falsification of documents for the purposes of obtaining accreditation as a soccer coach was, however, a deliberate attempt not only to deceive others, but also to pass off on them an unqualified coach with the intention of obtaining personal gain. I do not accept that the fact the appellant had a family at the time somehow excuses this dishonesty. Nor do I accept that it has been established the appellant had any bona fide belief that he was in fact a person possessing the skills which he purported to have. Those playing soccer within a regulated competition are entitled to expect that coaches entrusted with their sporting aspirations are qualified in the manner they purport to be.

50 Reliance was also placed on the lack of offending by the appellant between his arrest in 2005 and his sentencing in April 2007. It was submitted the cessation of offending helps to support the conclusion that the appellant had changed his behaviour pattern for the better in latter years as a result of his commitments to his wife and young children.

51 It is difficult to accept that the appellant has in fact materially changed in his behaviour patterns, however, when it is observed that the offending which brings him before the Court occurred immediately after he had successfully completed an extended parole period and the full extent of his criminal record is considered. It appears that the appellant does have the capacity to control his behaviour when he wishes to and that interruptions in his offending do not form a reliable indicator of his future behaviour. If anything, the appellant's lack of offending during the period between his arrest and sentencing in the County Court might be taken to demonstrate, simply, the positive deterrent effect of impending imprisonment upon the appellant's conduct.

52 No evidence was adduced which would support any informed view as to the appellant's character development during the period in issue. I am not persuaded that the pattern of his offending justifies a conclusion that there had been some change in his character prior to the commencement of his current sentence of imprisonment.**

**53 It was also submitted that the difficult personal circumstances under which the appellant's wife and children labour, because of his wife's injuries, are an additional factor supporting the early release of the appellant.

54 Again, no evidence was called as to the detail of those circumstances. It appears that the appellant's wife does have some support from her family but her situation is otherwise unclear.

55 It is apparent from his record of interview that a number of the appellant's offences were committed after his wife was injured. It does not seem to me that this circumstance is one which in itself encourages the view that the appellant will refrain from future offending.

56 Further, it has not been established that the appellant's family are in fact in such extreme circumstances as to warrant any reduction in an otherwise appropriate sentence.[3]**

**57 Whilst due weight must be given to the appellant's co-operation with police and to his pleas of guilty, it is incumbent on the Court to denounce the continuing persistence of seriously dishonest conduct in a man of the appellant's maturity. It was not suggested that the appellant was of limited intelligence and the nature of his offences suggest otherwise. It was not suggested that he lacks the capacity for honest employment, although it is apparent he will not readily obtain employment in any position of trust because of his criminal record.

58 It was submitted that his offending occurred in part from a desire to better fund the care of his family, but there is no evidence justifying the conclusion that he was in exceptionally necessitous circumstances and it is clear that the proceeds of his conduct were also applied to less meritorious purposes.

59 In my view the appellant's sentence must be influenced by the need for specific deterrence having regard to the extent and seriousness of his prior convictions.

60 The appellant's sentence must also reflect the need for general deterrence that responds to the implicit attack upon the economic fabric of society which offending of this character constitutes.

61 I would respectfully adopt the statement of Charles JA in R v Kostikidis and Mpehelevanas:[4]**

... the provision of credit by financial institutions, in the belief that repayment will be made in due course, is at the very foundation of our economic system. In extending credit, these institutions have little alternative but to rely to a substantial extent on the truthfulness of statements made in applications for finance and the honesty of applicants. Credit and other checks imposed by such institutions to attempt to avoid losses caused by such frauds increase the cost of lending and are reflected in higher charges made by the institutions and borne by the borrowing community.

**62 In the context of the appellant's recidivism, the offences are such, by reason of their protracted nature and the extent and deliberateness of his dishonesty, that there is a need for substantial punishment and protection of the community.

63 I do not accept that any change in the pattern of the appellant's offending or the fact that he now has a wife and three young children sufficiently encourages the view that he has good prospects of rehabilitation. Nevertheless, I am encouraged by these circumstances and by his previously successful completion of periods of parole to allow for a not ungenerous parole period.

64 In formulating the appropriate sentences, the Court must also have regard to the principle of totality and the need to avoid a crushing sentence by reason of inappropriate cumulation.

65 In all the circumstances the sentences of the Court should in my view be as follows:**

**66 I would direct that 6 months on count 2, 4 months on count 3, 6 months on count 4, 3 months on count 5, 1 month on count 6, 3 months on each of counts 7 and 8 and 1 month on count 9 be served cumulatively with the sentence upon count 1. I would further order that the sentence on count 10 be served concurrently with that on count 1.

67 This results in a total effective sentence of 51 months' imprisonment and I would direct that the appellant serve a minimum term of 34 months before being eligible for parole.

68 Pursuant to s 18 of the Sentencing Act 1991, I would declare that the appellant has served 402 days pre-sentence detention.

[1] Drugs, Poisons and Controlled Substances Act 1981 (Vic), s 73(1)(a).

[2] Section 5(2)(daa) and (db) of the Sentencing Act 1991.

[3] See R v Yates (1998) 99 A Crim R 483; R v Maslen (1995) 79 A Crim R 199.

[4] (Unreported, Court of Appeal, Winneke P, Charles and Callaway JJA, 12 September 1996.)