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Court of Criminal Appeal 20 December 1999

R v. Boskovitz

[1999] NSWCCA 437

Fraud & dishonesty
CRIMINAL LAW FALSE IMPRESSION CREATED ADEQUACY OF SUMMING UP SENTENCING OVERWHELMING CROWN CASE

Citation: R v Boskovitz [1999] NSWCCA 437
Court: NSW Court of Criminal Appeal
Date: 20 December 1999
Judge(s): Wood CJ at CL, Hidden J, Smart AJ

Background

The appellant was a senior executive and director of Linter Group Ltd (LGL), a large Australian textile business. Her primary role involved dealing with banks to obtain and maintain credit facilities for LGL and related companies. The directing force behind LGL's corporate strategy was a controlling entrepreneur; the appellant's role was to implement his directions and those of senior executives.

Between August and November 1989, the appellant made separate statements to three banks (Bank of Tokyo of Australia, Westpac Banking Corporation, and Chase AMP Bank) about a $240 million cash entry recorded in LGL's financial statements for the year ended 31 March 1989. Each statement offered a different and false explanation for that entry, and each was made in the context of seeking or maintaining a credit facility for LGL or a related entity.

The appellant was convicted by a jury of three counts under s 178BB of the Crimes Act 1900, which criminalises knowingly making a false statement with intent to obtain a financial advantage. She appealed against both conviction and the sentences imposed, which comprised concurrent minimum terms of three years and additional terms of two years.

  • Whether evidence given by a witness (Mr Travers) about the appellant's knowledge and involvement was admissible, given its potentially prejudicial effect
  • Whether the trial judge's summing up adequately put the defence case to the jury on each count
  • Whether the trial judge impermissibly allowed a finding of guilt on one count to carry over to the jury's consideration of the other counts
  • Whether the evidence was sufficient to support the jury's verdicts
  • Whether the sentences imposed were excessive, and how general deterrence should be weighed against subjective mitigating factors

Decision

Admissibility of evidence: The Court held that evidence from Mr Travers, which demonstrated the appellant's knowledge and involvement in the relevant transactions, was properly admitted. Its probative value outweighed any danger of unfair prejudice. Because the evidence was directly relevant to a fact in issue, the tendency and coincidence evidence provisions in ss 97 and 101 of the Evidence Act 1995 did not apply.

Summing up and directions: The Court found no inadequacy in the trial judge's summing up. The defence case on each count was put sufficiently, having regard to the particular facts in dispute. The trial judge also correctly directed the jury that any conclusion of guilt on one count could only be used to inform the assessment of the appellant's state of mind on the other counts, not as direct proof of guilt on those counts.

Sufficiency of evidence: The Court found ample material to support each of the three verdicts. The Crown case was thoroughly prepared and involved substantial oral and documentary evidence. The jury also had the benefit of the appellant's own dock statement, in which she admitted a significant proportion of the Crown's allegations, materially narrowing the issues at trial.

Sentencing: The Court accepted that the offences were serious and warranted substantial sentences, given the scale of the credit facilities involved and the importance of general deterrence in corporate fraud matters. However, the Court found the original sentences slightly excessive. The case fell just short of the worst category of this type of offending. The Court also noted strong subjective factors, including the appellant's lack of prior convictions, her absence of personal financial benefit, and the dominance exercised by senior figures above her. Concurrent sentences of four years, with a minimum term of two years and three months, were substituted.

Orders Made

  • Appeal against conviction on each count dismissed
  • Leave to appeal against sentence granted
  • Appeal against sentences allowed; original sentences quashed
  • In lieu of the sentences imposed, the appellant was sentenced on each count to a minimum term of 2 years 3 months commencing 2 October 1998 and ending 1 January 2001, and an additional term of 1 year 9 months commencing 2 January 2001, with sentences to be served concurrently

Key Takeaways

  • A conviction under s 178BB of the Crimes Act 1900 can be established by proof that a false impression was created, not only by proof of a directly false statement; the court confirmed that causing a bank to hold an inaccurate view of a company's financial position is sufficient.
  • Evidence that is directly relevant to a fact in issue remains admissible even where it carries prejudicial effect, provided that danger of unfair prejudice does not outweigh probative value; in those circumstances, the tendency and coincidence provisions in ss 97 and 101 of the Evidence Act 1995 are not engaged.
  • In dismissing the conviction appeal, the Court of Criminal Appeal confirmed that a trial judge may direct a jury to use a finding of guilt on one count to inform consideration of the defendant's state of mind on other counts, provided that use is clearly confined and does not operate as direct proof of guilt on those other counts.
  • General deterrence carries significant weight in the sentencing of company directors and executives for dishonest conduct toward financial institutions, but must be balanced against subjective factors including the absence of personal gain, good character, and the degree of personal culpability relative to others in the corporate hierarchy.
  • The Court issued a firm warning that individual corporate responsibility cannot be displaced by reference to instructions from superiors; executives who implement directions that involve dishonesty or false statements to banks bear personal criminal responsibility regardless of their position in the corporate hierarchy.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), s 178BB
- Evidence Act 1995 (NSW), ss 56, 97, 101, 137

Cases:
- Lock (1997) 91 A Crim R 356
- AH 98 A Crim R 71
- Fraser (CCA, unreported, 10 August 1998)
- Domican (1992) 173 CLR 555
- Zorad (1990) 19 NSWLR 91
- Piazza (1997) 94 A Crim R 459
- Maslen v Shaw (1995) 79 A Crim R 199
- Kylsant [1932] 1 KB 442
- Aaron's Reefs Ltd v Twiss [1896] AC 273
- McDonald (FCA) (1994) 71 A Crim R 370
- Corbett (1991) 52 A Crim R 112
- Pantano (1990) 49 A Crim R 328
- Hawkins (1989) 45 A Crim R 430