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R v Silver QCA 102
SUPREME COURT OF QUEENSLAND
R v Silver  QCA 102
SILVER, Bradley Keith
CA No 267 of 2019
DC No 1602 of 2018
Court of Appeal
District Court at Brisbane – Sentence: 6 September 2019 (Richards DCJ)
12 May 2020
7 April 2020
Sofronoff P and Boddice and Williams JJ
CRIMINAL LAW – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE – GROUNDS FOR INTERFERENCE – SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE – where the applicant pleaded guilty to seven counts of fraud under section 408C of the Criminal Code (Qld) and six counts of using his position dishonestly with the intention of gaining financial advantage under section 184(2)(A) of the Corporations Act 2001 (Cth) – where the amount involved in the fraud counts was $2,383,000 – where the amount involved in the other counts was $1,635,000 – where the applicant was sentenced to eight years’ imprisonment for the fraud offences and a parole eligibility date was set after he had served two and a half years of that sentence – where the applicant was sentenced to three years’ imprisonment for each of the other counts and a non-parole period of two and a half years was imposed on those counts – where the applicant applies for leave to appeal against sentence on the ground that the sentences were manifestly excessive – where the applicant was aged 19 to 21 years at the time of the offending – where the applicant did not have any criminal history – where the applicant was involved in two unregistered managed investment schemes – where the moneys received by the schemes were deposited into accounts controlled by the applicant or his father – where the dissipation of the funds from the scheme benefited either the applicant or his father – where the applicant provided a statement to the Australian Securities and Investments Commission – whether the sentence imposed was manifestly excessive
Corporations Act 2001 (Cth), s 184(2)(A)
Crimes Act 1914 (Cth), s 19AC
Criminal Code (Qld), s 408C
Penalties and Sentences Act 1992 (Qld), s 13A
Markarian v The Queen (2005) 228 CLR 357;  HCA 25, cited
R v Heiser & Cook; Ex parte Attorney-General (Qld)  QCA 14, cited
R v Henderson  QCA 12, cited
R v Kelly  QCA 293, cited
R v Pham (2015) 256 CLR 550;  HCA 39, cited
R v Ripper  QCA 474, cited
R v Wallace  QCA 62, cited
J Crotty (sol) for the applicant
J Hunter QC, with S J Cartledge, for the respondent
Crotty Lawyers for the applicant
Director of Public Prosecutions (Commonwealth) for the respondent
- SOFRONOFF P: I agree with Boddice J.
- BODDICE J: On 28 March 2019, the applicant pleaded guilty to seven counts of fraud (section 408C of the Criminal Code (Qld)) and six counts of using his position dishonestly with the intention of gaining financial advantage (section 184(2)(A) of the Corporations Act 2001 (Cth)). The amount involved in the fraud counts was $2,383,000. The amount involved in the other counts was $1,635,000.
- On 6 September 2019, the applicant was sentenced to an effective head sentence of eight years imprisonment for the fraud offences. A parole eligibility date was set after he had served two and a half years of that sentence. The applicant was sentenced to three years’ imprisonment for each of the other counts. As they were Commonwealth offences, a non-parole period was imposed on those counts. That period was also two and a half years.
- The applicant seeks leave to appeal those sentences. The ground of appeal, should leave be given, is that the sentences imposed were manifestly excessive.
- The applicant was born on 13 January 1989. He was aged 19 to 21 years when committing the offences. He was aged 30 years at sentence. The applicant did not have any prior criminal history.
- All of the offences arose out of the applicant’s involvement in two unregistered managed investment schemes by which members of the public provided borrowed funds which were lost through calculated dishonesty, manipulation and deception. The schemes were strikingly similar to an earlier scheme operated by the applicant’s father, who was a driving force in the schemes the subject of these offences.
- Central features of the schemes were the provision of false documentation for the purposes of having clients obtain bank loans, the proceeds of which loans were invested in the schemes operated by the applicant. A consequence of that false documentation was that a total of $2,763,000 was loaned to seven investors. Of that amount, $2,383,000 was invested in the applicant’s schemes.
- The loan processes were undertaken by the applicant engaging an experienced loans manager, who had access to the banks internal systems. As a consequence of this arrangement, there was generally no separate substantiation of the information by the bank. This loans manager undertook the process of having the customers sign the appropriate loan offer and mortgage documentation, and undertook the subsequent dispersal of the money in accordance with the customers’ instructions.
- The investors were unable to service those loans upon liquidation of each scheme. All but one of those investors were recipients of pensions. As a consequence, slightly less than $300,000 of the sums loaned was recovered by that bank.
- The applicant was a director of one scheme and a shadow director of the other. He was, in respect of both schemes, the principal decision-maker and in complete control of the movement of the investment moneys. The moneys received by the schemes were deposited into accounts controlled by the applicant or his father.
- The dishonest use of his position counts related to the applicant’s dishonest dissipation of funds for purposes other than those for which the investors made the investment, and contrary to the representations made to those investors. Investors were provided with false monthly investment statements purporting to show the growth of their investments. Their content was prepared on the applicant’s instructions.
- The dissipation of the funds benefited either the applicant or his father, or was used to pay employees or interest payments to other investors. Funds were used to purchase properties in the name of the applicant, family or friends. No properties were purchased in the names of the companies operating the scheme.
- Between 6 February 2009 and 14 February 2012, the applicant contracted to sell properties that had been purchased and developed using those funds. A total of $4,178,761.55 in net settlement funds were deposited into bank accounts belonging to the applicant during that period.
- The offending came to the attention of authorities as a consequence of a senate enquiry into the lending practices of the banking institution. On 20 September 2012, the Australian Securities and Investments Commission (ASIC) commenced investigations. A compulsory examination of the applicant took place on 15 July 2013. Investigations continued thereafter until 2017.
- Criminal proceedings were commenced against the applicant on 18 July 2017. An indictment was presented on 18 July 2018. The counts were listed for trial, to commence on 23 April 2019. The trial’s duration was estimated at three weeks.
- On 21 and 22 March 2019, the applicant attended ASIC. He provided a detailed statement and an undertaking to give evidence in accordance with that statement. It was accepted at sentence that the statement represented significant cooperation with the authorities.
- On 28 March 2019, the applicant pleaded guilty to the offences. The sentence hearing proceeded on the basis the applicant was to be sentenced pursuant to the provisions of section 13A of the Penalties and Sentences Act 1992 (Qld) (“the Act”).
- The Crown submitted that the applicant’s conduct involved serious examples of dishonesty and of breaches of his director’s obligations. The offences resulted in the loss of a substantial amount of funds. The majority of those funds had been used by the applicant for his own financial advantage.
- The Crown accepted that the applicant’s plea of guilty was a mitigating factor, demonstrating willingness to facilitate the course of justice. Further, the applicant’s statement and undertaking to give evidence represented significant cooperation with the administration of justice. That level of cooperation was more than moderate.
- The Crown accepted there had been delay, between the offending and sentence. However, the period of delay was reasonable in the circumstances, having regard to the difficulties in detecting, investigating and proving offences of this nature.
- The applicant submitted that, notwithstanding the serious nature of the offending, there were significant mitigating factors. The applicant was very young at the time of the offences. There was a lengthy hiatus between the commission of the offences and sentence. There was cooperation shown by the pleas of guilty and further cooperation by the provision of a statement and the giving of an undertaking to give evidence. The applicant had no prior criminal record, had used his time in custody well and would undertake custody in tougher circumstances as he had no family or friends in Queensland. There was also the significant impact on his relationship with his father, following the provision of a statement by way of cooperation.
- A psychologist report was tendered, referring to the applicant’s borderline intelligence, anxiety and complicated relationship with his father. The applicant had also provided restitution in the sum of approximately $100,000.
- The sentencing Judge observed that investors were approached to invest in the schemes, with a promise of returns between 12 and 15 per cent. The investors generally owned their own homes but had poor income stream. The applicant provided to the home finance manager a false document that these people already had money invested and were receiving a regular income stream, as a consequence of which, loans were approved and the funds paid to the scheme. Investors were given monthly statements purporting to show growth in their investments. Those statements were prepared at the applicant’s direction. However, the funds were not invested as promised but were dissipated inconsistently with the applicant’s representations and duties as a director.
- The sentencing Judge observed that the offending amounted to over $4,000,000. Impact statements spoke of the trauma occasioned to investors, with families torn apart and people being left with serious mental health issues.
- The sentencing Judge observed the significant matters in mitigation, including the pleas of guilty, the applicant’s youth and the level of influence of his father. However, the sentencing Judge observed that the applicant was a person used to business, living independently at the time, who knew he was acting dishonestly. The sentencing Judge did not accept that the applicant’s role was minor. He was a director and had personally created false documents. An aggregate of over $4,000,000 in net settlement funds was deposited into bank accounts belonging to the applicant during the period. The applicant had also contracted to sell property purchased and developed using the investment funds.
- The sentencing Judge had regard to the contents of a psychologist’s report. It established there was no underlying mental condition that induced the applicant’s behaviour. Whilst testing showed the applicant had borderline intellectual functioning, the sentencing Judge observed that the applicant was able to function well within the community and was currently running a successful business. The sentencing Judge noted a suggestion of possible bipolar disorder and depression.
- The sentencing Judge accepted that the applicant had expressed genuine remorse and had provided significant cooperation. Whilst his pleas of guilty were late, they had saved the time, expense and stress associated with a trial. The sentencing Judge accepted that, having regard to the applicant’s lack of prior convictions, he was unlikely to reoffend in the future. The offending had also occurred some years ago when the applicant was very young. He had not reoffended since. The applicant had also paid $100,000 compensation. The sentencing Judge observed, however, that the applicant had his own successful debt-free business and there was no further offer of compensation “so your remorse does not extend to attempting to make good the financial loss of others”.
- The sentencing Judge noted that the applicant had been in custody for two months and was coping well with his incarceration, although he was removed from family and friends, which made his incarceration difficult. The sentencing Judge found that, even allowing for the mitigating factors, the applicant had engaged in a very large fraud committed over a significant period of time, involving calculated dishonesty and a sophisticated scheme, rendering general deterrence important. Further, the crime was not a crime of passion but a crime that involved planning, building trust, callous manipulation and deception.
- Prior to imposing, in open Court, the sentences the subject of this application, the sentencing Judge stated in closed Court proceedings that, but for the applicant’s cooperation pursuant to section 13A of the Penalties and Sentences Act 1992, the applicant would have received an effective head sentence of 10 years’ imprisonment for the fraud offences with a parole eligibility date after serving four years of that sentence. Lesser, concurrent terms of imprisonment would have been imposed for the remaining counts.
- The applicant submits that the sentences imposed were manifestly excessive, in that they were so “unreasonable or plainly unjust” that it can be inferred there had been a failure to properly exercise the sentencing discretion. Whilst the sentencing Judge made mention of mitigating factors, the sentencing Judge failed to give appropriate weight to the combined factors of the applicant’s youth, impressionability and vulnerability, as well as the circumstances of his involvement, namely, that he was operating schemes of which his father, a man of sophisticated dishonesty, was a driving force.
- The applicant further submits that the sentencing Judge failed to make a determination as to a dispute as to the factual circumstances of the applicant’s involvement; failed to give appropriate weight to the applicant’s significant cooperation by the provision of the statement and undertaking to give evidence; and failed to give proper weight to the contents of the psychological report, including the applicant’s borderline intellectual functioning and remorse. The level of cooperation was doubly significant as, not only did it involve significant assistance in the prosecution case against the applicant’s father, it necessitated personal hardship due to the subsequent family dysfunction from that cooperation.
- The respondent submits that the sentences were not manifestly excessive. The sentencing Judge took into account the applicant’s youth, cooperation, remorse, lack of prior convictions and lack of subsequent offending, as well as the unlikelihood of reoffending and the limited attempts at compensation. Those mitigating factors, however, had to be balanced against the serious nature of the offending, including the very large fraud committed over a significant period of time, with calculated dishonesty and as part of a sophisticated scheme.
- The respondent submits that a consideration of comparable authorities supports the conclusion that the head sentences imposed for the offending properly reflected the balance between deterrence and rehabilitation. Those sentences also properly reflected the significant cooperation provided by the applicant, including his undertaking to give evidence in future proceedings.
- The respondent submits there was no relevant factual dispute at sentence unresolved by the sentencing Judge. The sentencing Judge accepted that the applicant had provided significant cooperation but noted there were significant aggravating features, including the fact that the applicant created false documents and was the person who benefited directly from the fraudulent conduct.
- The respondent submits there was an error in the sentencing structure in respect of the dishonest use of position counts. As those offences were Commonwealth offences, there was no power to order a non-parole period for sentences of three years’ imprisonment. The sentences on those counts should be varied to order that the applicant be released on recognizance after serving 2.5 years.
- An assertion that a sentencing Judge failed to give appropriate weight to various factors in the sentencing process, absent specific error, is insufficient to establish that a sentence imposed was manifestly excessive. A sentencing process involves the exercise of discretion. There is no one single correct sentence.
- The ground of appeal that a sentence was manifestly excessive will only succeed if the sentence imposed is so unreasonable or plainly unjust as to give rise to an inference that there had been a failure to properly exercise the sentencing discretion or where the appellate Court, having regard to all relevant factors, is satisfied that “the degree to which the impugned sentence differs from sentences that have been imposed in comparable cases” gives rise to the conclusion that there must have been some misapplication of principle.
- The reasons of the sentencing Judge establish that the sentences were imposed after consideration of all relevant factors, both aggravating and mitigating in nature. Regard was had for the applicant’s youth and vulnerability, as well as the circumstances that the offending occurred against the background of the applicant’s father’s involvement in earlier dishonest schemes and the current schemes. There is no basis to conclude that the sentencing Judge failed to have regard to those factors.
- There is also no basis to conclude that the sentencing Judge failed to determine relevant disputes of facts. The sentence proceeded on the basis of an agreed statement of facts. The sentencing Judge recognised the influence of the applicant’s father but properly noted the applicant’s integral involvement in the offending conduct.
- The applicant’s significant cooperation, evidenced by not only the applicant’s pleas of guilty, but also the provision of a statement and an undertaking to give evidence in pursuant to section 13A of the Act, was also expressly acknowledged by the sentencing Judge.
- The sentencing Judge had regard to the findings of the psychological report. The testing evidencing borderline intellectual functioning was taken into account. However, the sentencing Judge rightly observed that that finding must be viewed in the context of a sophisticated scheme, where the applicant was himself actively involved in key aspects of that offending, including the preparation of false documentation and the dishonest use of his position as a director. The applicant also significantly benefited financially from that dishonest conduct.
- A consideration of comparable authorities supports a conclusion that the notional sentence, before allowance for the applicant’s substantial cooperation pursuant to section 13A of the Act, was neither unreasonable nor plainly unjust. The applicant’s involvement over an extended period of time, in a sophisticated scheme by which multiple investors were defrauded of large sums for his benefit, warranted, prior to his cooperation pursuant to section 13A, an effective head sentence of 10 years’ imprisonment, even allowing for the applicant’s youth, lack of criminal history, relationship with his father, psychological factors and his pleas of guilty. Such a sentence was in accord with comparable authority.
- Whilst the sentence imposed on Heiser in R v Heiser & Cook; Ex parte Attorney-General (Qld) was less than 10 years’ imprisonment, that sentence was imposed in the context of an Attorney’s appeal. Significantly, Cook received a sentence substantially in excess of 10 years’ imprisonment. Similarly, while R v Kelly involved a sentence of less than 10 years’ imprisonment, that case concerned significantly less money, with the scheme operating for a substantially shorter period of time.
- Once it is concluded that the notional head sentence was in accordance with a proper exercise of the sentencing discretion, there is no basis to conclude that the sentences imposed, having regard to the applicant’s additional section 13A cooperation, were manifestly excessive. Those sentences resulted in an effective reduction of 20 per cent in respect of the head sentence and an even greater reduction in respect of the non-parole period. Those reductions evidenced a proper reflection of the extent of the applicant’s cooperation, whilst also ensuring that the sentences did not constitute an affront to society.
- The sentences were neither unreasonable nor plainly unjust. There was no misapplication of sentencing principles. The sentences were not manifestly excessive.
- There is, however, substance to the respondent’s contention that the structure of the sentences, on the counts of dishonest use of his position, was not in accordance with the provisions of the Crimes Act 1914 (Cth) (“Crimes Act”). That error is to be corrected by ordering that, in respect of each of those counts, the applicant be released on recognizance after serving 2.5 years of those sentences of imprisonment.
- I would order:
- (1)Leave to appeal be granted.
- (2)The appeal against sentence be allowed.
- (3)The sentences imposed in respect of Counts 8 to 13 inclusive be varied, such that the applicant is sentenced to three years’ imprisonment on each count, with an order that he be released on recognizance under s 19AC of the Crimes Act, after serving 2.5 years of each sentence. The applicant is to give security, without surety, after he has served that period of imprisonment, in the amount of $2,000.
- (4)The sentences otherwise be confirmed.
- WILLIAMS J: I have read the reasons of Boddice J and agree with those reasons and the orders his Honour proposes.
- Published Case Name:
R v Silver
- Shortened Case Name:
R v Silver
 QCA 102
Sofronoff P, Boddice, Williams JJ
12 May 2020