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Supreme Court 19 December 2019

Bazouni v R

[2019] NSWSC 1884

Fraud & dishonesty
CRIMINAL LAW WHETHER APPEAL MOST LIKELY TO SUCCEED

Citation: Bazouni v R [2019] NSWSC 1884
Court: Supreme Court of New South Wales
Date: 19 December 2019
Judge: Fagan J

Background

The applicant, a former bank manager, was convicted after a four-week trial on five counts of obtaining financial advantage by deception and one count of attempting to do so, contrary to s 192E(1)(b) of the Crimes Act 1900 (NSW). The Crown alleged that he submitted fraudulent loan applications inflating both property purchase prices and borrower incomes, resulting in loan advances exceeding purchase prices by approximately $200,000 per property. Three substantial payments, ranging from approximately $67,500 to $83,000, were made directly to the applicant.

The applicant was remanded in custody following the verdicts, having previously been on bail for over four years without incident. He subsequently filed a notice of intention to appeal against conviction, relying principally on a claimed misdirection in the trial judge's written jury directions concerning the element of dishonesty.

The applicant applied first to the trial judge for bail pending appeal under s 62 of the Bail Act 2013 (NSW), and that application was refused. He then brought the present application to the Supreme Court.

  • Whether "special or exceptional circumstances" existed under s 22(2) of the Bail Act 2013 (NSW) sufficient to justify the grant of bail pending appeal.
  • Whether the proposed appeal ground, namely that the trial judge erroneously directed the jury that dishonesty could be proved by mere recklessness, was "most likely to succeed" in the sense of resulting in the quashing of the convictions.
  • Whether the proviso in s 6(1) of the Criminal Appeal Act 1912 (NSW) would likely be applied by the Court of Criminal Appeal, notwithstanding any misdirection, so as to prevent a substantial miscarriage of justice.

Decision

Fagan J accepted that the trial judge's written directions contained an error. Paragraph [3] of the directions on "Element 1" told the jury that the accused must have known, "or was reckless," that his conduct was dishonest by the standards of ordinary people. This formulation was inconsistent with the definition of "dishonest" in s 4B of the Crimes Act, which requires both objective dishonesty by community standards and subjective knowledge by the defendant that the conduct was so dishonest. Recklessness does not satisfy that subjective limb.

However, Fagan J noted that the trial judge separately and correctly stated the s 4B definition in paragraph [1] of the same directions. A second passage in the written directions, which told the jury that recklessness could be sufficient "as to whether he or others involved in the agreement were engaging in deception," was found not to assist the applicant's appeal. That aspect of the direction correctly reflected s 192B(2) of the Crimes Act, which permits proof of the deception element by recklessness, even if the words "acting dishonestly" were erroneously added to that passage.

The critical question for bail purposes was whether the appeal was "most likely to succeed," not merely arguable. Fagan J concluded that this threshold was not met. The evidence of the applicant's elaborate fraudulent conduct, his senior position of responsibility at the bank, and his detailed knowledge of the bank's systems and interests meant that the jury's finding of objective dishonesty would almost inevitably have carried with it the inference that he knew his conduct was dishonest by ordinary standards. The Court of Criminal Appeal could readily conclude, applying Kalabasi v Western Australia (2018) HCA 7, that despite the misdirection no substantial miscarriage of justice actually occurred.

Accordingly, the applicant failed to demonstrate the special and exceptional circumstances required under s 22(2) of the Bail Act 2013, and bail was refused.

Orders Made

  • Bail refused.

Key Takeaways

  • Under s 22(2) of the Bail Act 2013 (NSW), bail pending appeal will not be granted unless special or exceptional circumstances exist; where the applicant relies solely on the strength of the proposed appeal, the appeal grounds must be "most likely to succeed," not merely arguable.
  • The definition of "dishonest" in s 4B of the Crimes Act 1900 (NSW) requires both that the conduct was dishonest by the standards of ordinary people and that the defendant subjectively knew it to be so; a direction permitting the jury to find dishonesty by recklessness alone misapplies that definition.
  • Recklessness remains relevant to the separate "deception" element of an offence under s 192E(1)(b), by operation of s 192B(2), which provides that a deception may be established if it was intentional or reckless.
  • A misdirection as to an element of an offence will not necessarily lead to a quashed conviction; the Court of Criminal Appeal may apply the proviso in s 6(1) of the Criminal Appeal Act 1912 (NSW) where the evidence is sufficiently strong that no substantial miscarriage of justice occurred, as confirmed in Kalabasi v Western Australia.
  • In cases involving elaborate, commercially sophisticated frauds, the subjective knowledge component of s 4B dishonesty may follow almost as a matter of necessity once the jury finds the objective element satisfied, particularly where the accused held a position of significant professional responsibility.

Legislation and Cases Referenced

Legislation:
- Bail Act 2013 (NSW), ss 18(1)(j), 22(2), 62
- Bail Act 1978 (NSW) (repealed)
- Crimes Act 1900 (NSW), ss 4B, 192B(2), 192E(1)(b)
- Criminal Appeal Act 1912 (NSW), s 6(1)

Cases:
- Obeid v R (No 2) [2016] NSWCCA 321
- Kalabasi v Western Australia (2018) HCA 7
- Peters v The Queen (1998) 192 CLR 493
- R v Love (1989) 17 NSWLR 608
- R v Khoo [2013] NSWSC 1518
- R v Smith (1983) 7 A Crim R 437
- R v Brow [1981] VR 783
- R v Bonollo [1981] VR 633
- R v Salvo [1980] VR 401