1.To make tomato sauce; heat oil in a medium frying pan, over medium heat; cook onion, celery, capsicum and garlic, stirring, 3 minutes or until onion softens. Add tomatoes, sugar, paste and stock; bring to the boil. Reduce heat; simmer, covered, 30 minutes. Uncover; simmer until sauce thickens. Stir in herbs.
2.Using a meat mallet, gently pound veal, one piece at a time, between sheets of plastic wrap until 5mm (¼-inch) thick.
3.Whisk egg and the water in a shallow bowl. Place breadcrumbs in another shallow bowl. Coat veal pieces, one at a time, in flour; shake off excess. Dip into egg mixture, then coat in breadcrumbs. Cover; refrigerate 10 minutes.
4.Preheat oven to 180°C (160°C fan-forced).
5.Heat butter and half the oil in a large frying pan over medium heat; cook veal, in batches, until browned both sides. Place veal in a large shallow ovenproof dish; top with mozzarella, tomato sauce and parmesan. Drizzle with remaining oil.
6.Bake veal parmigiana for 20 minutes or until browned. Serve topped with basil leaves.
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