Bangaru v R - [2012] NSWCCA 204

Court of Criminal Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Bangaru v R [2012] NSWCCA 204
Hearing dates: 16 April 2012
Decision date: 20 September 2012
Before: Beazley JA at [1]
Hall J at [2]
Beech-Jones J at [3]
Decision:
(1) The appeal against conviction on all counts be dismissed.
(2) The application for leave to appeal the sentence on all counts is granted.
(3) The appeal against sentence on all counts be dismissed.

Catchwords: CRIME - appeal against conviction - obtain money by deception - obtain money by false or misleading statements - whether charges on indictment consistent with offence in respect of which appellant surrendered for extradition - whether trial judge should have directed acquittal - whether miscarriage of justice - whether trial judge failed to direct jury on limb of indictment - whether jury verdicts unreasonable, unsafe or unsatisfactory - whether tendency direction should have been given - s 97(1) Evidence Act - appeal against sentence - whether non-parole period uncertain - whether failure to consider special circumstances - whether allowance for rehabilitation - whether manifestly excessive - totality principle.
Legislation Cited: - Corporations Act 2001 (Cth) - s 200, s 292 s 299
- Crimes Act 1900 - s 178A, s 178BA, s 178BB,
- Criminal Appeal Act 1912 - s 5, s 6(1)
- Criminal Procedure Act 1986 - s 20
- Evidence Act 1995 - s 97(1), s 110
- Extradition Act 1988 (Cth) - s 10(2), s 42
- Trade Practices Act 1974 (Cth) - s 52
Cases Cited: - Browne v Dunn ((1893) 6 R 67
- Dao v R [2011] NSWCCA 63; 278 ALR 765
- DSJ v R; NS v R [2012] NSWCCA 9; 259 FLR 262
- House v R [1936] HCA 40; 55 CLR 499
- Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886; 106 FCR 51
- M v R [1994] HCA 63; 181 CLR 487
- MFA v R [2002] HCA 53; 213 CLR 606
- Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611
- Morris v R [1987] HCA 50; 163 CLR 454
- MWJ v R [2005] HCA 74; (2005) 80 ALJR 329
- O'Donoghue v Ireland [2009] FCAFC 184; 263 ALR 392
- Prasad v R (1979) 23 SASR 161
- QBE Insurance Group Ltd v Australian Securities Commission (1992) 38 FCR 270
- R v Fletcher [2005] NSWCCA 338; 156 A Crim R 308
- R v PWD [2010] NSWCCA 209; 205 A Crim R 75
- R v Zhang [2005] NSWCCA 437; 158 A Crim R 504
- Rasic v R [2009] NSWCCA 202
- Shrimpton v The Commonwealth [1945] HCA 4; 69 CLR 613
- SKA v R [2011] HCA 13; 243 CLR 400
- Truong v R [2004] HCA 10, 223 CLR 122
- United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; 157 CLR 1
- Warren v Coombes [1979] HCA 9; 142 CLR 531
Texts Cited: - R.P. Austin, A.J Black Annotations to the Corporations Act (2010) LexisNexis
- Australian Corporation Law - Principles and Practice LexisNexis
Category: Principal judgment
Parties: Kovelan Bangaru (Appellant)
Crown (Respondent)
Representation: Counsel:
Mr A.J. Bellanto QC, Mr M. Sahade (Appellant)
Ms P.E. McDonald SC (Respondent)
Solicitors:
Oliveri Lawyers (Appellant)
Commonwealth Director of Public Prosecutions (Respondent)

File Number(s): 2008/022138 2008/022139 2008/103208 2008/144991 2008/148519
Decision under appeal

Jurisdiction:

9101

Date of Decision:

2010-12-17 00:00:00

Before:

Lakatos DCJ

Index

Beazley JA
[1]
Hall J
[2]
Beech-Jones J
[3]
The conviction appeal
[4]
Ground one: Section 42 of the Extradition Act 1988 (Cth) (Counts 6 to 13)
[7]
Grounds two to five: The Provision of Financial Statements to Lending Institutions (Counts 1 to 4)
[26]
The Form of the Indictments and the Relevant Statement in the Accounts
[28]
True and fair view
[37]
The Crown opening
[43]
The Accounts
[49]
The Accountants
[52]
No case submission to final address
[66]
Addresses and debate prior to the summing up
[68]
Conclusion as to the conduct of the Crown case
[71]
Grounds two and three - Failure to direct acquittals
[73]
Grounds four and five - Failure to give direction
[86]
Ground seven - Investor counts 6 to 13 - unsafe and unsatisfactory
[102]
Count 10 - Falzon
[116]
Mr Falzon's evidence
[121]
The appellant's case on count 10
[130]
Consideration
[136]
Count 7 - John and Gillian O'Donnell
[142]
Mr and Mrs O'Donnell's evidence
[144]
The appellant's case on count 7
[159]
Consideration
[161]
Count 6 - Mr and Mrs Fassos
[166]
Consideration
[179]
Count 13 - Tavares and Rowe
[180]
Consideration
[188]
Count 8 - Mr and Mrs di Benedetto
[189]
Mr and Mrs di Benedetto's evidence
[191]
The appellant's case on count 8
[198]
Consideration
[202]
Count 9 - Mr and Mrs Hardy
[203]
Mr and Mrs Hardy's evidence
[205]
The appellant's case on count 9
[219]
Consideration
[221]
Count 11 - De Silva
[222]
Mr and Mrs de Silva's evidence
[224]
The appellant's case on count 11
[233]
Consideration
[234]
Count 12 - Barnes
[235]
Mrs Barnes' evidence
[237]
The appellant's case on count 12
[247]
Consideration
[248]
Conclusion on ground seven
[252]
Ground six - tendency direction (counts 5 to 13)
[255]
Background
[256]
Tendency evidence
[260]
Consideration
[267]
Sentence appeal
[283]
The sentencing judgment
[288]
Ground one - unclear non-parole period
[305]
Ground two - special circumstances
[309]
Ground three - no meaningful allowance for rehabilitation ]
Ground four - sentences overall manifestly excessive ]
[319]
Orders
[332]

Judgment

BEAZLEY JA: I agree with Beech-Jones J.

HALL J: I agree with the reasons of Beech-Jones J and the orders proposed by his Honour in [332].

BEECH-JONES J: On 24 August 2010 the appellant was found guilty by a District Court jury of four counts under former s 178BB of the Crimes Act 1900, and nine counts under former s 178BA of the Crimes Act. On 17 December 2010 he was sentenced to terms of imprisonment for each offence. He has appealed to this Court against his conviction and, to the extent necessary to appeal questions of fact, seeks leave to do so (s 5 of the Criminal Appeal Act 1912). He also seeks leave to appeal against his sentence.

The Conviction Appeal

At all relevant times the appellant was the managing director of a group of companies known as the Streetwise or Colosseum Group. He was the sole director of Colosseum Investments Holdings Pty Ltd ("Colosseum Holdings") from 8 June 2001 until he placed that company into administration on 18 July 2005. Through a series of shareholdings he was the ultimate controller of that company. The appellant was also the director of Streetwise Property & Projects Pty Ltd ("Streetwise") from 17 March 1998 until 8 June 2005. This company was placed in administration on 18 July 2005.

The Crown case at trial was that, during the period from about November 2001 to December 2003, the appellant dishonestly obtained approximately $3.7 million from seventeen investors who had been induced to invest those funds on the basis that they would be used only for particular property developments. It alleged that the appellant, or his companies, dissipated the funds obtained from those investors on expenditure not associated with the specific property developments for which they were obtained. This conduct was the subject of what eventually became counts 5 to 13 on the indictment being the s 178BA offences.

The Crown further alleged that, during the period from approximately January 2004 to July 2005 when the appellant was the director of the companies referred to above, he obtained or retained approximately $19.8 million in loan and finance facilities from various financial institutions by making statements with reckless disregard as to whether they were false or misleading in a material particular. The Crown alleged that the false and misleading statements were to the effect that the financial statements of companies within the group that were provided to the financial institutions were drawn to present a "true and fair view" of the financial state of those companies, when that was not the case. This conduct was the subject of counts 1 to 4 in the indictment being the s 178BB offences.

Ground one: Section 42 of the Extradition Act 1988 (Cth) (Counts 6 to 13)

The appellant was extradited from the United States of America to face trial in New South Wales. Prior to his trial, the appellant applied to Lakatos DCJ to quash, inter alia, what ultimately became counts 6 to 13 of the indictment. He contended that his trial on those counts was contrary to s 42 of the Extradition Act 1998 (Cth). His Honour rejected the application. Ground one of the appeal repeats that contention before this Court. In summary, the appellant complains that he was extradited to face charges under former s 178A of the Crimes Act, whereas he was placed on trial for offences under former s 178BB.

Section 42 of the Extradition Act is a formulation of the so-called "specialty rule" which requires a degree of correlation between the offences in which a person's extradition is sought from the extraditing country, and the offences in respect of which they are to be tried in the receiving country. It provides:

"Where an extraditable person in relation to Australia is surrendered to Australia by a country (other than New Zealand), the person shall not, unless he or she has left, or has had the opportunity of leaving, Australia or, in a case where the person was surrendered to Australia for a limited period, has been returned to the country:

(a) be detained or tried in Australia for any offence that is alleged to have been committed, or was committed, before the surrender of the person, other than:

(i) any offence in respect of which the person was surrendered or any other offence (being an offence for which the penalty is the same or is a shorter maximum period of imprisonment or other deprivation of liberty) of which the person could be convicted on proof of the conduct constituting any such offence; ..." (emphasis added)

In addition, s 10(2) of the Extradition Act provides:

"A reference in this Act to conduct constituting an offence is a reference to the acts or omissions, or both, by virtue of which the offence has, or is alleged to have, been committed."

Section 42(a)(i) enables a person to be tried in Australia for an offence in respect of which they were surrendered by the United States of America. The section also permits the extradited person to be tried for any other offence in respect of which they could have been convicted on proof of "the conduct constituting any such offence" so long as that other offence does not carry a longer maximum period of deprivation of liberty.

The High Court considered s 42 in Truong v R [2004] HCA 10; (2004) 223 CLR 122. The appellant in Truong was extradited from the United Kingdom. He had been surrendered to Australia on charges of conspiracy to kidnap and conspiracy to murder, but was later tried and convicted in Victoria on the substantive charges of murder and kidnapping. It was contended that his trial was conducted contrary to s 42. The conspiracies that the appellant had been accused of participating in as described in the material placed before the British court went beyond mere planning for the offences and alleged that the proposed target of the conspiracies was in fact kidnapped and then murdered.

By a majority, the High Court held that Mr Truong's trial did not contravene s 42 (per Gleeson CJ, McHugh, Hayne and Heydon JJ; contra Gummow, Kirby and Callinan JJ). Gleeson CJ, McHugh and Heydon JJ held that the comparison exercise contemplated by s 42(a)(i) between the offence in respect of which a person was surrendered and the offence in respect of which they were tried was one that went beyond a mere consideration of the elements of each offence (Truong at [29]). It was a process that was to be conducted "at a level of abstraction between a formal statement of the elements of the offence, on the one hand, and an account of the evidence relied on to prove the relevant conduct, on the other". That process had to be undertaken "by reference to the actual conduct alleged against the person in question" (at [29]). Thus, in Truong's case, as the alleged conspiracies were said to have involved the continued performance of the agreement up to and including the kidnapping and killing of the victim, it followed that the conduct constituting the offence in respect of which he was surrendered embraced the conduct the subject of the charges he was tried for, namely murder and kidnapping (Truong at [37]).

To similar effect, Hayne J held that what was required was consideration of what had been alleged against the appellant in support of his application in the United Kingdom for his extradition to Australia. The "material advanced in support of the request for extradition" not only alleged that he conspired to kidnap and murder the victim, but also contended that the conspiracy had been carried into effect (Truong at [196]). Accordingly, the conduct alleged against him was such that it could have led to his conviction on the substantive charges of murder and kidnapping (Truong at [196]; contra, Gummow and Callinan JJ at [89] and Kirby J at [127]).

As already noted, what ultimately became counts 6 to 13 on the appellant's indictment charged him with offences under former s 178BA. The gravamen of what each of these counts alleged is illustrated by count 6 which concerned the investors Stephen and Jane Fassos:

"Between about January 2003 and May 2003, by a deception, [the appellant] did dishonestly obtain from Stephen and Jane Fassos a financial advantage for Colosseum Investment Holdings Pty Limited, namely funds of approximately $262,501 in that he did represent that the funds provided by Stephen and Jane Fassos would be applied to a trust or joint venture between them, Kovelan Bangaru and a maximum of two other investors, to develop a particular property at Seaforth, which representation was misleading and deceptive because the funds were not to be applied for the specific purposes of any such trust or joint venture." (emphasis added)

For present purposes the relevant part of s 178BA and these counts is the allegation that the appellant obtained a benefit in the form of an investment by reason of an alleged "deception" on his part as to how the funds invested would be utilised.

Consistent with the majority decision in Truong, the extradition request material put before the United States District Court for the Central District of California (the "American Court") was tendered before his Honour on the application to quash counts 6-13. The material included the arrest warrants issued for various offences alleged against the appellant, an affidavit of an "investigator", being Timothy John Kelly and an affidavit of a "prosecutor" being Ms Joanne Philipson, a solicitor employed by the Director of Public Prosecutions for the Commonwealth. It is necessary to compare the facts alleged in the material presented to the American Court with count 6 on the indictment to determine whether the latter is an "other offence" on which the appellant "could [have been] convicted" on proof of the conduct constituting "the offences in respect of which he was surrendered" so as to satisfy s 42(a)(i) of the Extradition Act.

The offence corresponding to count 6 was specified in warrant A14 placed before the American Court. This was described as an offence under former s 178A of the Crimes Act, the terms of which are reflected in the charge in the arrest warrant, as follows:

"Between about 1 January 2003 and 7 May 2003 [the appellant] received money, namely the sum of AUD$262,501.00 from Stephen and Jane Fassos upon terms requiring him to account for the whole of such money, namely for the purpose of developing and constructing a property at 7A Battle Boulevard, Seaforth NSW, which money he fraudulently misappropriated in violation of the terms he received the money in and he caused the money to be deposited into the account of Colosseum Investments Holdings Pty Ltd and to be dissipated and not expended on developing and constructing the property at 7A Battle Boulevard, Seaforth NSW." (emphasis added)

Mr Kelly's affidavit addressed the facts surrounding the offence the subject of warrant A14. He described the appellant as having "induced" Mr and Mrs Fassos to "invest in a "Streetwise joint venture property development". He recounted the applicant making a number of oral representations to Mr Fassos, including that "the property we have in mind for you is Seaforth" and "a trust will be set up for that specific project. I will be putting my own money into this project. It will be me, you and a maximum of two other investors". Mr Kelly noted that none of the $262,501.00 invested by Mr and Mrs Fassos was used in the Seaforth development.

Ms Philipson's affidavit recorded that, according to Mr Fassos, he and his wife were "induced" to invest in a "Streetwise joint venture property development" on the "understanding" that the money would be invested in a joint venture. In the concluding part of her affidavit, she addressed this count, and all the counts the subject of this ground of appeal. She stated:

"121. Between April 2003 and July 2003 Bangaru (and his agents at Colosseum) induced a number of persons to invest in Streetwise property developments by making false representations to them as to how their funds were to be invested.

...

123. In relation to warrants A9-A14 [i.e. counts 9, 11, 12, 13, 10 and 6 respectively] those investor funds were paid into the overdraft facility that Colosseum Investment Holdings Pty Ltd had with the NAB to ensure that the overdraft limit was not exceeded, rather than being invested in a specific property development which Bangaru represented they would be invested in.

...

125. In relation to warrants A15 and A16 [i.e. counts 7 and 8], Bangaru represented to those investors that their funds were to be invested in a joint venture building project at 7A Battle Boulevard, Seaforth. He represented to each investor that the existing residence would be purchased, the house demolished, a duplex would be constructed on the site, and the profit would be shared between Streetwise and each investor. Bangaru fraudulently misappropriated the investor funds as none of the money invested was directed to the Seaforth project as represented by Bangaru." (emphasis added)

The appellant's written submissions in respect of this ground contended, inter alia, that it was "not alleged in the investigator's affidavit or the prosecutor's affidavit ... that the appellant lied to the investors at the point of receiving the monies - but rather, that after receipt of the monies, the appellant did not use those monies appropriately". This is incorrect. The prosecutor's (i.e. Ms Philipson's) affidavit expressly alleged that the appellant "induced" investors to invest by reason of various "false representations".

At the time the extradition request was made to the American Court, the representations said to have been made by the appellant were relied upon as identifying the "terms" upon which money was collected and later misappropriated for the purposes of charges that had been formulated by reference to s 178A of the Crimes Act. Counts 6 to 13 of the indictment relied upon these representations as the foundation for the allegation that monies were obtained by "deception". The nature of the conduct alleged did not alter. As I have stated, the material presented in the extradition request expressly alleged that the appellant had uttered representations which were false at the time that they were made. Moreover, given that the allegations related to what was proposed to occur with the funds in the future, the suggestion that they were "false" necessarily implied that he knew they would not be so applied; ie that they were false to his knowledge.

It follows that the relevant conduct said to constitute the offence under s 178A in warrant A14 in respect of which he was surrendered, was conduct that he could have been convicted of on count 6 of the indictment for the purposes of s 42(a)(i) of the Extradition Act. There was a difference between the charges that he was surrendered for and then later tried on. An important element of the former was the existence of a dishonest state of mind at the time he misappropriated the investors funds. The latter alleged a dishonest state of mind at the time he induced the investors to part with their funds. However Truong establishes that such differences are not determinative for the purposes of s 42(a)(i). Instead the conduct alleged in the material placed before the court of the surrendering country must be considered in order to identify the conduct alleged. In this case a consideration of that material confirms that the conduct alleged against the appellant was such that, if established, it could have supported his conviction on count 6.

The same analysis is applicable to counts 7 to 13 of the indictment. The difference between the counts is addressed below in relation to ground seven, but for present purposes the only material differences concern the identity of the investor, the amount invested, the date of the deception, the identity of the property, and the precise form of the misleading representation that was made as to the manner in which the funds would be applied. The extracts from Ms Philipson's affidavit (set out above at [19]) make it clear that with each and every one of those counts an allegation of a false representation by the appellant to induce the investor to part with funds was included in the material in support of the extradition request provided to the American Court. This allegation formed part of the conduct constituting the offence for which the appellant was surrendered. It specified the "terms" on which the monies were received for the purposes of s 178A, and was thus an aspect of the conduct forming the basis for the allegation that there was a fraudulent misappropriation. It was also capable of supporting the allegation that the investors for each of those counts were induced to part with funds by reason of a false representation by the appellant.

It follows from the above that his Honour was correct to reject the application to quash what became counts 6 to 13. If anything, in his reasons, his Honour was generous to the appellant in that his Honour resorted to drawing inferences from the extradition material as to what was alleged against the appellant (see O'Donoghue v Ireland [2009] FCAFC 184; 263 ALR 392 at [46]). There was no need to consider any such inferences other than perhaps whether the false representations that he was alleged to have made were false to his knowledge. In my view the conduct expressly alleged against the appellant sufficed.

I reject ground one of the appeal.

Grounds two to five: The Provision of Financial Statements to Lending Institutions (Counts 1 to 4)

It is convenient to consider grounds two to five together. They concern counts 1 to 4. As noted above, those counts allege offences under former s 178BB of the Crimes Act in relation to the provision of financial statements to various lending institutions. Ground two contends that the trial judge should have directed an acquittal on counts 1 to 3 at the conclusion of the Crown case. Ground three makes the same complaint in relation to count 4. Grounds four and five contend that a miscarriage of justice arose from the manner in which his Honour directed the jury in respect of these charges.

Before considering the submissions made in support of these grounds it is necessary to consider the form of these counts, the relevant "statement" made by the appellant that was relied on by the Crown, the manner in which the Crown conducted its case on these charges and the evidence called by the Crown concerning the accuracy of the two sets of accounts the subject of these charges. As outlined below, there was a significant gulf between how the Crown put its case and how the defence sought to characterise the Crown case both before his Honour and on appeal.

The Form of the Indictments and the Relevant Statement in the Accounts

Former s 178BB of the Crimes Act relevantly provided:

"Obtaining money etc by false or misleading statements

(1) Whosoever, with intent to obtain for himself or herself or another person any money or valuable thing or any financial advantage of any kind whatsoever, makes or publishes, or concurs in making or publishing, any statement (whether or not in writing) which he or she knows to be false or misleading in a material particular or which is false or misleading in a material particular and is made with reckless disregard as to whether it is true or is false or misleading in a material particular shall be liable to imprisonment for 5 years.

(2) ..."

Count 1 of the Indictment was in the following terms:

"Between about 14 January 2004 and about 4 February 2004 with intent to obtain for Colosseum Investment Holdings Pty Limited and associated companies, a financial advantage, namely the continuation of banking and finance facilities, [the appellant] did make a statement with reckless disregard as to whether it was false or misleading in a material particular, in that he provided to the National Australia Bank financial statements for Colosseum Investment Holdings Pty Limited for the financial year ending 30 June 2003 which contained a statement by him that the financial statements were drawn up so as to give a true and fair view of the company's state of affairs as at 30 June 2003 and of its results for the year ended on that date, when in fact the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003." (emphasis added)

As I construe this count, the "statement" said to have been made by the appellant was that the "the financial statements were drawn up so as to give a true and fair view of the company's state of affairs as at 30 June 2003". It was pleaded that the appellant made that statement with reckless disregard as to whether it was false or misleading in a material particular. It follows from the terms of s 178BB(1) that the indictment was required to allege that that statement was objectively false or misleading in a material particular. This was done by alleging that "in fact the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003". As I will explain below, in the circumstances of this case this may have represented a heavier burden for the Crown than was necessary to establish an offence under s 178BB. In any event this form of indictment meant that the Crown had to prove as an objective fact that the financial statements did not give a "true and fair view" of the company's state of affairs as at 30 June 2003, as well as proving that the appellant was reckless as to that circumstance. The focus of these grounds of appeal concerns whether and how the Crown proved the former although the latter is attacked as well.

The relevant "statement" the subject of each of counts 1 to 3 was said to have been made at the time the accounts were provided to the relevant finance provider. The financial statement was an eight page document which on its face purported to describe the financial affairs of only Colosseum Holdings. It included a director's report of the kind contemplated by s 299 and s 300 of the Corporations Act 2001 (Cth) and a "Director's Statement" signed by the appellant. The relevant part that was the subject of count 1 stated:

"In the opinion of the director:

(a) the following financial statements are drawn up so as to give a true and fair view of the company's state of affairs as at June 30 2003 and of its results for the year ended on that date; and

(b) ...

The financial statements are drawn up in accordance with Statements of Accounting Concepts and applicable Accounting Standards.

Signed at Sydney this 1st day of November 2003 in accordance with a resolution of the director"

In so far as count 1 refers to "a statement by him that the financial statements were drawn up so as to give a true and fair view of the company's state of affairs" it correctly records the effect of this statement. The above statement is at the very least an expression of opinion by the appellant about the accuracy of the accounts. Such a statement of opinion would be false if that opinion was not bona fide held. A reckless disregard on the part of the appellant as to its accuracy would suffice for that purpose. In this case the Crown could have demonstrated this by simply pointing to the evidence of what the appellant was told by the various accountants, to which I will refer. In summary they advised the appellant that proper accounts could not be prepared. Instead, as I have stated, the Crown framed an indictment that assumed the burden of proving objectively that the accounts did not present a true and fair view, not merely that the appellant did not, or could not, subjectively hold that opinion. Presumably for this reason, the appellant did not complain of the form of the indictment either before his Honour or on appeal. Nor did the appellant complain about the presentation of the Crown case or the summing up in so far as the relevant statement could be characterised as one concerning only the opinion of the appellant concerning the accuracy of the financial statements and not their objective accuracy.

Counts 2 and 3 of the indictment also concerned the provision of the 2003 accounts for Colosseum Holdings which included the Director's Statement signed by the appellant. Leaving aside the date of its provision and the identity of the financial institution, the only relevant difference in the form of those indictments compared with Count 1 is they did not contain the words "by him". This is most likely a slip. In view of the complaints made on appeal it is of no consequence.

Count 4 concerned the 2004 consolidated financial accounts for Colosseum Holdings. The Director's declaration was signed by the appellant. It relevantly stated:

"The director of the company declared that:

1. the financial statements and notes present fairly the company's financial position as at 30 June 2004 and its performance for the year ended on the date in accordance with the accounting policies described in Note 1 to the financial statements;

2. ...

The financial statements are drawn up in accordance with Statement of Accounting Concepts and applicable Accounting Standards.

Signed at Sydney this 15th day of March 2005 in accordance with a resolution of the director."

Count 4 of the Indictment stated:

"Between about 1 April 2005 and 3 May 2005 with intent to obtain for Colosseum Investment Holdings Pty Limited, a financial advantage, namely finance in the total sum of $391,017.00, [the appellant] did make a statement with reckless disregard as to whether it was false or misleading in a material particular, namely, in support of an application for finance to V W Financial Services Australia Pty Ltd, he caused to be provided financial statements for the financial year ending 30 June 2004 which contained a statement that the financial statements and notes present fairly the company's financial position as at 30 June 2004 and its performance for the year ended on that date, when in fact the financial statements did not present fairly the company's financial position as at 30 June 2004."

On its face the Director's declaration conveys the effect of a meeting of a Director of the company on 15 March 2005 when a resolution was apparently passed approving the accounts. The indictment takes it a step further by alleging that the act of the appellant in causing the accounts to be provided to the financier some time between 1 April 2005 and 3 May 2005 was a restatement of the accuracy of point 1 of the declaration. Again this statement is capable of being characterised as an expression of opinion but no point was taken by the appellant to that effect and, for the reasons outlined, it would be unlikely to assist him if it was. In any event the indictment alleged that the handing over of the accounts constituted a statement as to the accuracy of the substance of resolution 1 and that that statement was false or misleading in a material particular in that "the financial statements did not present fairly the company's financial position as at 30 June 2004". As with counts 1 to 3, this meant that the Crown had to prove, inter alia, as an objective fact that the financial statements did not fairly present the company's financial affairs as at 30 June 2004.

True and fair view

It is necessary to briefly explain the operation of the provisions of the Corporations Act that require accounts to represent a "true and fair view" of a company's financial affairs even if only to demonstrate their lack of relevance to the charges against the appellant.

During the period 2003 to 2004, s 292(1) of the Corporations Act required all disclosing entities, public companies, "large proprietary companies" and all "registered [managed investment] schemes" prepare a "financial report" and a "directors' report". Other entities, such as a "small proprietary company", were required to prepare them in the limited circumstances stated in ss 292(2). It is not known into which of these categories the various companies in the Streetwise group fell.

A "financial report" consists of the financial statements, the notes to the financial statements and the "directors' declaration" about the statements and notes (s 295(1)). Section 297 specified the following concerning the content of the financial statements and notes:

"True and fair view

The financial statements and notes for a financial year must give a true and fair view of:

(a) the financial position and performance of the company, registered scheme or disclosing entity; and

(b) if consolidated financial statements are required - the financial position and performance of the consolidated entity.

This section does not affect the obligation under section 296 for a financial report to comply with accounting standards.

Note: If the financial statements and notes prepared in compliance with the accounting standards would not give a true and fair view, additional information must be included in the notes to the financial statements under paragraph 295(3)(c)." (emphasis added)

Sub-section 295(4) addressed the content of the directors' declaration. Amongst other matters it provided that the "directors'" declaration is a declaration by the directors ... (d) whether, in the directors' opinion, the financial statement and notes are in accordance with [the Act], including: (i) section 296 (compliance with accounting standards); and (ii) section 297 (true and fair view) ...".

As I have stated it is not known whether the financial statements the subject of counts 1 to 4 were ones that the various companies were required to prepare by s 292 of the Corporations Act. Clearly there was an attempt to provide accounts in conformity with the statutory scheme. In particular the statement of the appellant which is the focus of counts 1 to 4 was something that purported to conform with the requirements for a directors' declaration in s 295(4). However, even that provision only required a director to certify "whether", in his or her opinion, the financial statements presented a true and fair view. It would be open to a director to qualify or even deny that the accounts presented such a state of affairs.

The phrase "true and fair view" in s 297 is not defined. Its meaning and interaction with the requirement in s 296 that the financial report comply with the accounting standards has been a matter of some debate (see R.P. Austin, A.J Black Annotations to the Corporations Act (2010) LexisNexis at [2M.297]; Australian Corporation Law - Principles and Practice [3.6.0020] LexisNexis; QBE Insurance Group Ltd v Australian Securities Commission (1992) 38 FCR 270). Even if the phrase "true and fair view" was defined it would not have mattered. The appellant was not charged with offences under the Corporations Act. The term "true and fair view" arose in the appellant's trial because it was a phrase in a document that the appellant presented to a financial institution. It follows that its meaning in this case was a matter of fact for the jury. Further, as explained below, the manner in which the Crown presented its case meant that many, if not all, the areas of potential dispute that might arise as to what entries in a set of financial accounts must be "accurate" (within materiality limits) for them to constitute a "true and fair" view did not arise.

The Crown opening

In light of the grounds of appeal, it is necessary to identify how the Crown sought to prove that the relevant statement in counts 1 to 4 was objectively false or misleading in a material particular.

In her opening the Crown Prosecutor identified the statement in the 2003 accounts for Colosseum Holdings the subject of count 1. The Crown Prosecutor referred to the evidence to be given by an accountant, Mark Gray, who was employed as an accountant by the group during the period June to August 2004. She stated that it was anticipated Mr Gray would give evidence about the importance of having proper accounting records in order to prepare accounts and that when he commenced he found that there were no such records. The Crown stated:

"What he also will say is that he will look at version 1 of the 2003 accounts and I anticipate [that Mr Gray] will express the opinion, look, the state of the books and records I'm of the view that you actually couldn't create, you couldn't derive these financial statements because of the problems or disarray in the books and records of the building blocks of the company." (emphasis added)

The Crown Prosecutor then outlined how in the latter part of 2004 the Australian Securities and Investments Commission ("ASIC") commenced a review of the Streetwise group and required the production to it of various financial statements. She stated that by October 2004 Mr Gray had left and was replaced by another accountant, Patrick Yuen. The Crown Prosecutor outlined how Mr Yuen prepared accounts for various companies within the group, including Colosseum Investments for the year ended 30 June 2003. She contrasted the entries in those statements with the statements the subject of counts 1 to 3 that the appellant provided to the financial institutions.

The Crown Prosecutor then referred to the evidence of the group's external accountant, Mr Phil Cohen. This is described below. The Crown Prosecutor concluded her opening on counts 1 to 3 by stating that the Crown case was that the accused was reckless as to whether his statement that the accounts represented a "fair and true representational picture of the financial health" of the group. In particular, the Crown Prosecutor referred to:

"... his involvement with the financial records and health of the company, and that ultimately without the building block, without the paper trail, version 1 [of the 2003 accounts] was created and that he handed over version 1 to NAB ..." (emphasis added).

The Crown Prosecutor then addressed count 4 concerning the 30 June 2004 accounts and concluded by making reference to "the difficulties with the financial records, the paper trail, the building blocks, et cetera of the company's records".

Thus, although in her opening the Crown Prosecutor pointed to the discrepancy between the entries in the accounts provided to ASIC and those provided to the financiers, she made it clear that the basis for contending that the relevant statements in the accounts were false or misleading was the absence of source accounting records from which proper accounts could be prepared.

The Accounts

In relation to counts 1 to 3, the Crown led evidence that in support of certain applications for finance the appellant provided signed versions of the 2003 accounts for Colosseum Investment Holdings which included the director's statement that I have extracted above. These accounts contained a compilation report purportedly signed by Mr Cohen as principal for his accounting firm. The balance sheet specified net assets of $31,836,909.00 mainly consisting of $23,705,046.00 in "property stock at cost" and $3,305,276.00 cash at bank. Net profit was recorded as $11,705,533.00 including $79,219,249.00 in revenue from "Commissions/ Project management fees/Underwriting Fees/Construction Development". In his evidence the appellant contended that these were consolidated accounts for the group. There is nothing in the accounts to support this assertion. For example, the word "consolidated" is not deployed nor are the subsidiary companies listed.

The financial statements the subject of count 4, being the signed accounts for the financial year ended 30 June 2004, described themselves as consolidated financial statements. They specified a net profit before tax of $10,876,340.00 and total equity of $46,661,826.00. They bore the appellant's signature and what purported to be that of Mr Cohen. Included in the accounts between the balance sheet and the notes to the accounts was a spreadsheet printout of the group's consolidated financial position. Mr Yuen's evidence in relation to the spreadsheet is described below.

As indicated in the Crown's opening, evidence was adduced that accounts for seven companies in the group for the year ended 30 June 2004 were provided to ASIC in the latter part of 2004 in response to compulsory notices. Included in that material was a set of accounts for Colosseum Investment Holdings. Those accounts listed its net assets as at 30 June 2003 as $383,156.00 and it having incurred a net loss in this financial year of $282,450.00. For 30 June 2004 its net assets were $3,006,846.00 and it was said to have incurred a net loss of $378,007.00. The improvement in its position was said to be attributable to an increase in valuations of its property reserves. A consolidation of the seven companies for the financial year indicated a total equity of negative $261,827.00 and total loss of $1,125,667.00. Neither of these figures is even remotely reconcilable with the accounts the subject of counts 1 to 3 that were provided to the various financiers. A consolidation of the seven companies for the financial year ended 30 June 2004 indicated a total loss of $1,078,267.00 and net assets of $20,671,317.00. Again these figures are not reconcilable with the accounts the subject of count 4.

The Accountants

As foreshadowed in the opening, the Crown called evidence from the two internal accountants employed by Streetwise, Messrs Gray and Yuen, and its external account, Mr Cohen.

Mr Gray commenced working with the Streetwise Group in June 2004 as an accountant. He ceased in August 2004. From June 2004 he commenced reviewing the financial accounts and searched for supporting evidence for the various entries. He said that in "a lot of cases" he did not find any. He stated that in his opinion he "could not determine the state of affairs of the company". He explained:

"Well because everything I picked up needed so much work to verify every balance, every number I looked at needed substantial amount of work to investigate and determine whether the number was correctly posted into the system which would have reflected whether it was an expense, an asset, a liability or income, and in my mind it would have just taken months and months and months to determine the state of affairs."

Mr Gray stated that the accounts for the financial year ended 30 June 2004 were prepared after he left. However, from his period of employment he could be expected to have knowledge of the general state of affairs for the company for the period reported on. He stated that he was not aware of any evidence that could justify the cash at balance figures or the property valuations. He stated that the company's records were not in a state to enable those accounts to be generated.

Mr Gray did not prepare the accounts for the year ended 30 June 2003, but stated that his knowledge of the financial records gained during his employment was such that they were not sufficient to enable a statement for the financial performance for the year ended 30 June 2003 to be produced. He stated that there were a number of mis-postings including the incorrect treatment of investor funds as income. He recalled the appellant stating that "... it was probably a little bit immoral the way we sort of recorded transactions ...".

Mr Yuen was employed as an accountant by the Streetwise Group for the period October 2004 to August 2005. When he commenced there was only one other member of the accounting staff employed by the group. He stated that there had been an attempt to "migrate" accounting data from a MYOB brand accounting system to another system called "Attache" but it had been a "failure". He also stated that the bank accounts had not been reconciled and that he was only able to reconcile "one or two major accounts". He conducted a review of the financial accounts when he first commenced. He described them as a "mess". He explained that this was because the bank accounts had not been reconciled. He said the general ledger had a "suspended account" (i.e. a suspense account) with a $500,000.00 entry, i.e. an unreconciled entry: "It is like sort of an under the carpet account".

Mr Yuen was instructed by the appellant to prepare accounts following correspondence from ASIC in late 2004. He said he advised the appellant that the accounts were "not in order" and he could not fix them by himself. Some temporary staff were recruited and they attempted to reconcile the various accounts. They provided the material to Mr Cohen to prepare the financial accounts that were provided to ASIC.

In relation to the accounts for the year ended 30 June 2004 Mr Yuen stated that, at the appellant's direction, he prepared a spreadsheet showing the consolidated position for all the companies based on the "Attaché" system. He presented it to the appellant who he says abused him and told him of "a lot of things that need to be changed" including the cash balance and property values. He told the appellant:

"Look, that's not right, that is the number from Attaché that is all I can get, this is not ethical so I shouldn't be doing that."

However, under instruction from the appellant, Mr Yuen did change the cash figures and property values in the spreadsheet. He then attended a meeting with the appellant and Mr Cohen at which the appellant directed further changes to the cash at bank and property values. Mr Yuen then created a third version of the spreadsheet.

Mr Yuen was shown the 2004 accounts the subject of count 4. As I have explained, part of those accounts included a spreadsheet. Mr Yuen stated that this was based on the spreadsheet he produced following the meeting with the appellant and Mr Cohen. He said the balance of the figures were obtained from Mr Cohen. In the body of the accounts he identified the entries for current assets as coming from his spreadsheet, which contained entries as directed by the appellant. He confirmed that the cash at bank figure was incorrect, saying "no way we have $8 million".

Mr Cohen stated that he met the appellant in the middle of 2003. He said his firm was engaged to provide business, accounting and taxation services to the entities within the Streetwise group. He said that from time to time he was provided with various figures and accounting information. He described the record keeping systems as "chaotic" with "records everywhere, in filing cabinets, in boxes, all over the place". He stated that "every time I asked for figures I got different figures. Every time a new accountant was put in there the figures were different again". Mr Yuen said that he raised the record keeping with the appellant, who stated "everything is in a mess, I intend to sort it out". He also advised the appellant that the "figures were all over the place", referring to the constantly changing figures and the appellant stated that he would get it fixed. He also raised with the appellant the state of the inter-company loan accounts, none of which "seemed to balance".

Mr Cohen denied preparing the 2003 accounts the subject of grounds one to three and denied that he signed them even though they bear a signature which purports to be his. Mr Cohen stated that he prepared the financial accounts that were provided to ASIC in the latter part of 2004. Mr Cohen denied that he prepared the financial accounts for the year ended 30 June 2004 the subject of count 4 or that he signed them. Mr Cohen stated that he had little recollection of the meeting that Mr Yuen referred to in late November 2004 but reiterated that from his earliest dealings with the appellant he complained to the appellant that the figures he received were continually changing.

Mr Cohen's credit was challenged in cross examination. It was put to him that he prepared the 2003 and 2004 accounts and that he signed them. He denied the suggestion. In cross examination he was invited to comment on the accuracy of the figures in the accounts. He stated that "I probably would say they weren't very accurate at all".

The Crown also called one of ASIC's senior investigators, Paul Rowland. Mr Rowland had accounting qualifications. Mr Rowland had traced the appellant's dealings with the funds provided by the various investors. In his submissions before this Court the appellant placed emphasis on the following part of his cross examination:

"Q. Mr Rowland, no person has instructed you, have they, to conduct a forensic audit of this balance sheet to determine whether or not it is true and correct, whether or not it represents a fair view of the company's affairs as at 30 June 2003?

A. No, nobody has instructed me to do that.

Q. You would need to do that, wouldn't you, in order for you as an accountant to say whether or not this balance sheet does represent a fair view of the company's affairs as at 30 June 2003?

A. Yes, it would be an exercise that would need to be undertaken. And in saying that I can say I have formed a view and I formed a view at the time on whether this [ie the company's accounts] was true and correct."

In re-examination Mr Rowland stated that it was not possible to do such an audit in the absence of proper records from the various companies.

No case submission to final address

After Mr Rowland's evidence, the Crown closed its case. Counsel for the appellant sought a directed acquittal on counts 1 to 4 and, in the alternative, a Prasad direction (Prasad v R (1979) 23 SASR 161; (1979) 2 A Crim R 45). His Honour rejected both applications. During argument on this application his Honour summarised the Crown case as involving a contention that "no true and fair view could have been constructed if one accepts the evidence of the internal accountants on the source materials". Counsel for the appellant referred to the Crown case as asserting that: "On this evidence properly understood you could not produce accurate reports".

The appellant gave evidence denying that he was advised of any problems with the accounts or the accounting records and asserting a belief that the accounts he signed represented a true and fair view of the group's financial affairs. He was cross examined on differences between the accounts and tax returns he signed on behalf of the group as well as discrepancies between the accounts provided to ASIC and those provided to financiers.

Addresses and debate prior to the summing up

In her address concerning these counts, the Crown Prosecutor specifically stated that it was not the Crown's case that a particular figure in the accounts was false. Instead she described the Crown case as follows:

"What the Crown says in respect of that is that that statement [true and fair view etc] was either objectively false or misleading because it was impossible at that stage to create financial statements of the companies which would reflect a true and fair view."

The Crown Prosecutor then referred to the evidence of Messrs Yuen, Gray and Cohen. She also pointed to the discrepancies between the accounts provided to ASIC and the accounts provided to the financiers the subject of the charges.

After counsel for the appellant concluded his address to the jury, and in their absence, the Crown Prosecutor raised a number of points concerning his address with his Honour. One complaint was that the appellant's counsel had wrongly characterised the Crown case on counts 1 to 4 as requiring proof that a "particular entry" in a financial statement was wrong. This led to a debate about what was required by the last two lines of the indictment that I have discussed above at [30]. At one point the Crown appeared to contend that the phrase "true and fair" had an aspect of "process" that could not be divorced from the content of the financial statements. In responding to the complaints about his address, counsel for the appellant submitted that the last two lines of the indictment did not enable the Crown to introduce notions of "process". It is unnecessary to analyse that further because his Honour summarised the Crown case in a manner that did not encompass any procedural aspect. This was reflected in the summing up which is addressed below.

Conclusion as to the conduct of the Crown case

At no point in the trial did the Crown assume for itself the burden of proving that any particular entry in the accounts was correct or incorrect, whether within the limits of materiality as allowed by the accounting standards or not. Instead, the Crown always contended that the state of the business records was such that it was not possible to draw up accounts representing a true and fair view of the company. It also relied on the dramatic inconsistencies between the accounts provided to the financiers and the accounts provided to ASIC the subject of counts 1 to 4. It led evidence casting doubt on a number of important entries in the accounts such as cash at bank, treatment of investor contributions as income, property valuations and inter-company loans. However, those matters were put forward as only confirmatory of what the absence of proper records was said to demonstrate.

Although the Crown case did not require it to prove that any specific entries were false, an acceptance of its case led to an overwhelming likelihood that that many, if not all, of the figures were materially inaccurate. For a company the size of Colosseum Holdings which engaged in the range of transactions it did, the chance of constructing accounts that represented a true and fair view from source accounts that were as woeful as the Crown contended, was extremely remote.

Grounds two and three - Failure to direct acquittal

Ground two of the appeal contended that his Honour erred in not directing an acquittal on counts 1 to the 3 of the indictment. Ground three of the appeal contends that his Honour erred in not directing an acquittal on count 4.

A number of contentions are made in support of these grounds. First it is asserted that the Crown case changed. The appellant asserts that the Crown initially opened its case by pointing to the difference between the accounts provided to ASIC and the financial institutions but this was abandoned when it was asserted that the former were accounts for individual companies and the latter were consolidated accounts. It was said that the Crown then proceeded to rely on the "shabby accounting practices" of the group. While it is not clear how this complaint supports these grounds of appeal, in any event this submission is incorrect. From beginning to end the Crown case was that the group's accounting records were so inadequate that it was not possible to prepare proper accounts. The Crown pointed to the differences between the two sets of accounts but only as an illustration of that broader proposition.

Second, in his written submissions the appellant asserts that his Honour erred in finding that the accounting evidence was such that the "inference open to the jury was that if the financial reports were to be correct then there would be adequate paper trails and proper accounting practices and that each accountant said that such systems were not in place". This submission does not reflect the Crown case or his Honour's summing up. Instead the Crown case was that, based on the accountants' evidence, it was not possible to prepare proper accounts.

Third, the appellant's principal submission on these grounds concerned the inability of the Crown to point to the inaccuracy of any particular figure in the accounts much less demonstrate the degree of any such inaccuracy. This argument started from the premise that the indictment required the Crown to prove that the relevant accounts did not give a true and fair view of the company's state of affairs as at 30 June 2003, and a "fair" view of the company's financial position as at 30 June 2004. I agree with that point. However, I do not agree that in order to do so the Crown was required to demonstrate that any particular figure or combination of figures in the accounts was inaccurate. Conversely, even if the Crown had been able to demonstrate that specific entries were inaccurate, it would not necessarily lead to a conclusion that the accounts in an overall sense did not represent a "true and fair" view or a "fair" view of the company's position. In this case at least, it would have been a difficult and unproductive exercise to determine what figures in the financial statements had to be "accurate" (within materiality limitations) in order to justify the conclusion that they represented a "true" or "fair" view. A conclusion that they were not was more likely to be safely drawn from a serious defect in the source information rather than any attempt to reconstruct the true financial position of the company in an effort to facilitate some comparison exercise.

I have described the evidence of Messrs Gray, Yuen and Cohen above. The end result of their evidence was that none of the accountants was prepared to accept that they drafted the accounts the subject of counts 1 to 4. Those accounts are consistent with an established tradition in cases of corporate misfeasance in that they are another example of a critically misleading corporate document that drafted itself. Leaving that aside, the evidence of the accountants, if accepted, justified a conclusion that there was a complete absence of any reliable accounting records and systems that were necessary to compile proper financial statements.

For the 30 June 2003 accounts, Mr Gray's evidence points to such records being absent. While Mr Gray only commenced work in June 2004, he appeared to have inherited a state of disarray that had existed for some time. Mr Cohen's evidence, if accepted, dispelled all doubt about this. The difficulties he described spanned from mid-2003 to mid-2005, including the date the 2003 accounts were apparently signed by the appellant and the date they were provided to the financial institutions.

The evidence of Mr Yuen and Mr Cohen confirmed the inadequacy of the systems in place to prepare the 2004 accounts. The inadequacies in the accounts were confirmed by the discrepancies between them and the accounts provided to ASIC. Those discrepancies were so stark they were sufficient to confirm an absence of confidence in the financial reports.

The other evidence before the jury revealed that the companies were involved in numerous transactions. Given the size and complexity of the company's business, it followed that the likelihood that the accounts prepared on the basis of such deficient source material provided a true or fair view was extremely remote.

The appellant sought to illustrate his contention that the Crown's inability to demonstrate that any particular figure was incorrect was fatal to its case on these counts by linking the Crown's inability to do this to the necessity for the relevant statement to be misleading in a "material particular". He submitted that:

"... if the jury were to conclude that the financial reports were therefore wrong in some way, without any evidence to establish in what way or how the financial reports were wrong in fact, it is impossible to say whether such financial reports were wrong in a material particular. For example, the financial reports presented to the banks and financial institutions could have been wrong in the sense they were ultra conservative and only showed half the equity available."

Given the context in which these accounts were prepared, the likelihood that they materially understated the position is equally as remote as the likelihood that they represented a reasonably accurate state of the company's financial affairs. In any event, this submission wrongly assumes that the only matter relevant to a hypothetical reader of the accounts including a financier is whether they overstate the company's financial position. If the director's attestation is false or misleading even because it understates the position, it can still have serious implications for the degree of confidence of external parties in the management and reporting systems within the company. An understatement of the company's position is material to persons within the company or external to it in other ways. For example, an understatement could affect a pricing decision of a lender or supplier and thereby harm the company because it will be charged too much. It could cause those within the company to make wrong decisions about resource allocation.

The appellant's written submissions provided three particulars for each of grounds two and three. The second particular was expanded upon in those submissions and has been addressed. The third particular concerned the concession by Mr Rowland that "no forensic audit had been undertaken which would be necessary to determine the actual state of affairs of the Company as at 30 June 2004". I have described Mr Rowland's evidence above. That "concession" did not require a directed verdict on these counts. It did not undermine the Crown case. Properly analysed, all Mr Rowland conceded was that he could not construct a true and fair view of the company's state of affairs without undertaking a forensic audit, which could not occur as the records were incomplete. This answer was entirely consistent with the evidence of Messrs Gray, Yuen and Cohen. It only begs the question that if Mr Rowland could not determine a true or fair view, how did Colosseum Holdings purport to do it? Mr Rowland's evidence only undermined the Crown case if it had to prove what in fact a "true and fair" or "fair" view was. It did not. It only had to prove that the relevant accounts did not represent a true and fair view.

The first particular for each ground was that the "evidence was insufficient to enable the jury to be satisfied beyond reasonable doubt as to whether the appellant made a statement with reckless disregard as to whether the financial statements were false or misleading in a material particular". The balance of the written submissions do not address this contention and it was not referred to orally. The conversations deposed to by Mr Yuen and Mr Cohen and, to a lesser extent, Mr Gray, were more than sufficient to demonstrate this element.

I reject grounds two and three

Grounds four and five - Failure to give direction

Grounds four and five complain that there was a miscarriage of justice by reason of the trial judge's failure to direct the jury that the Crown was required to prove beyond a reasonable doubt that "in fact the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003" in respect of counts 1 to 3 and that "in fact the financial statements did not present fairly the company's financial position as at 30 June 2004'" in respect of count 4.

To address this ground it is necessary to consider what directions his Honour gave and what directions, if any, his Honour was asked to give on this topic.

As is to be expected in the first part of the summing up his Honour gave the jury the standard direction concerning the onus of proof and the need for the Crown to prove every element of the charge beyond reasonable doubt. Later his Honour came to what were described as the "legal ingredients for the finance counts" and reminded the jury that the Crown had to prove each of them beyond reasonable doubt. He identified six. The first four were said not to be in issue namely: (i) the accused intended to obtain; (ii) for another company or person; (iii) a financial advantage; and (iv) the accused made a statement in writing.

His Honour then stated that the next two were contentious, namely: (v) "that the statement is false or misleading in a material particular"; and (vi) that the "accused made that statement with reckless disregard as to whether it was false or misleading in a material particular".

For count 1 and element (v), his Honour identified the relevant statement from the Director's declaration extracted in [31] above. His Honour then stated:

"When you consider that the alleged misleading or false nature of it, it is the statement, not figures, not any one figure or a combination of figures in the statement that the Crown bases its case on. It is the, as it were, the warranty by the accused allegedly signing this document where he gives his opinion that in his opinion it is a true and fair view."

His Honour then identified the corresponding statements for counts 2, 3 and 4. In relation to count 4 his Honour stated:

"So once again the nub of the allegation is that the accused allegedly made a statement which was false or misleading by signing his name to a proposition that in his belief the statements presented a true and fair view, or that in his belief the financial statements and notes present fairly the company's financial position. Once again I reiterate, the allegation the Crown bases counts 1 to 4 is not that the numbers are false in these documents. It is the acknowledgement of the correctness which is alleged to be false.

...

Now the element as to statements which are false or misleading a material particular, the Crown as I have said, argues its case on the basis that the statements were false because at the time the accused made them he knew that the state of the corporate accounts were such that no such precise statements of financial position could be made. There being, so the Crown contended on the evidence, no supporting primary documents for the particular entries in the financial statements." (emphasis added)

Later, after referring to the "mental element" of the offence, his Honour told the jury:

"The Crown's case in this regard is that according to the evidence of the accountants, Messrs Yuen, Grey and Cohen, the state of the company's financial records was such that no accurate accounts could be drawn up, because there was a lack of the underlying or supporting documents which would allow that process to occur.

...

Accordingly, the Crown says, you would be satisfied based upon the evidence of Messrs Yuen, Grey and Cohen, that the accused either knew that the figures generally in the account were false or misleading or knew that they were unsupported by the proper building blocks and therefore was reckless as to the fact that they might be false or misleading ...

...

On the other hand, the case for the accused is that there is no evidence as to the true state of the affairs of the company, so that you could not conclude that the accounts were false and misleading. That was a submission directed to the numbers in the various accounts of which we are speaking.

The accused's case is put that you would accept the evidence of the accused that the accounts were a true and fair reflection of the company's affairs, and that any differences in the balance sheets can be explained by the failure of the accountants to have regard to ..." (emphasis added)

A number of matters should be noted about these extracts.

First and most importantly, the context of these comments was that his Honour had already identified each element of the offence, including element (v) identified in [89], and directed the jury of the need to be satisfied of each such element beyond reasonable doubt.

Second, on occasions his Honour referred to the statement in the accounts as an "opinion" or "warranty" by the appellant. I have referred to this in [32] to [36] above. In my view nothing turns on this. His Honour's references to that were merely a means of identifying which statement was the relevant one to consider, ie the director's statement of the appellant in the accounts and not any particular figures.

Third, the statement in the extract from the summing up in [90] that the "the allegation the Crown bases counts 1 to 4 [on] is not that the numbers are false in these documents" but that it "is the acknowledgement of the correctness which is alleged to be false" read literally is not correct. The Crown case was that accounts representing a true and fair view were not capable of being prepared from the poor source material that was available. If that proposition was accepted it necessarily meant that at least some of the figures in the accounts had to be false. The Crown's case was that at least some of the numbers had to be false but it did not have to prove, nor could it, that any particular entry was false.

However, I do not consider that this literal reading was conveyed by these passages when considered in context. His Honour subsequently referred to the consequence for the entries in the financial statements from the absence of supporting material as contended for by the Crown ("no such precise statements of financial position could be made"; "the accused either knew that the figures generally in the accounts were false or misleading" etc).

The effect of the summing up was that the jury had the relevant statement relied on brought to their attention and were instructed that the Crown had to prove beyond reasonable doubt, inter alia, that the relevant statement was false or misleading in a material particular. They were instructed as to the method by which the Crown sought to prove that element namely by demonstrating that the source material was such that it was not possible to prepare accounts that matched the description in the relevant statement (ie that they gave a true and fair view). The Crown case on that aspect was consistent with the concluding words of the charge namely that "the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003". In those circumstances I do not see how the appellant was disadvantaged by the jury not being specifically instructed that the Crown was required to prove beyond reasonable doubt that "the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003". Any elaboration of this issue would have simply brought the jury back to the discussion of the Crown case and the appellant's response that his Honour in fact provided to them.

At the hearing of the appeal the Court invited Senior Counsel for the appellant, who did not appear at the trial, to identify in the transcript the point where the direction the subject of this ground was sought. The Court was referred to an exchange between Counsel and his Honour that occurred after addresses and prior to the summing up. I have referred to this exchange above at [70]. It only involved trial counsel responding to the Crown Prosecutor taking objection to his address to the jury on counts 1 to 4 and characterising the Crown case in the course of doing so. Although the appellant's counsel reminded his Honour of the last two lines of the charge no direction of any kind was sought at that time. Moreover, after his Honour finished summing up, no redirection or further direction was sought on this issue.

I am not satisfied that his Honour erred in failing to give the direction sought much less that any such failure amounts to a miscarriage of justice.

I reject grounds four and five.

Ground seven - Investor counts 6 to 13 - unsafe and unsatisfactory

Ground six of the appeal complains that his Honour erred in allowing the evidence on each of counts 5 to 13 as "tendency evidence" on the other counts. I will defer consideration of that ground and address ground seven first.

Ground seven of the appeal contends that the jury's verdict in respect of counts 6 to 13 on the indictment was unsafe and unsatisfactory. The appellant seeks to invoke that part of s 6(1) of the Criminal Appeal Act 1912 which enables this Court to intervene "if it is of the opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported having regard to the evidence" (see MFA v R [2002] HCA 53; 213 CLR 606 at [58]. He implicitly seeks a grant of leave under s 5(1)(b) to raise grounds of appeal involving questions of fact or questions of mixed law and fact (Rasic v R [2009] NSWCCA 202 at [12]). I would grant such leave.

This ground requires this Court to "ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty" (M v R [1994] HCA 63; 181 CLR 487 at 493). In doing so this Court must undertake its own "independent assessment of the evidence both as to its sufficiency and its quality" (Morris v R [1987] HCA 50; 163 CLR 454 at 473). Thus it must consider any competing evidence to that presented by the Crown and weigh the conflicting evidence (SKA v R [2011] HCA 13; 243 CLR 400 at [24] per French CJ, Gummow and Kiefel JJ).

In relation to the advantages enjoyed by the jury in hearing and observing witnesses compared to this Court in SKA at [13] French CJ, Gummow and Kiefel JJ stated:

"The starting point in the application of s 6(1) is that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, and the jury has had the benefit of having seen and heard the witnesses. However, the joint judgment in M v The Queen [at 494] went on to say:

'In most cases a doubt experienced by an appellate court will be a doubt which a jury ought also to have experienced. It is only where a jury's advantage in seeing and hearing the evidence is capable of resolving a doubt experienced by a court of criminal appeal that the court may conclude that no miscarriage of justice occurred'."

It follows that it is necessary to analyse each count and the evidence presented by the Crown and the appellant concerning that count in detail. However, I will describe in general terms the appellant's submissions in relation to this ground of appeal.

With the possible exception of count 12, each of counts 6 to 13 had a common element, namely that the appellant made a specific representation to the investors that the money would be applied towards a specified purpose, being either a joint venture or a particular property development or construction project. This representation was said to amount to a deception in that it was not intended that the monies were to be so applied. The appellant's case at trial was that he had not made any such representation. As I will explain, his case was that the monies were received after he "sold the investors a share in a project which entitled the investor to a certain percentage share of the proceeds of the sale". He asserted that he and Streetwise were entitled to use the funds for their own purposes, they being the proceeds of a sale or a "buy in" price for the alleged percentage share of the proceeds of sale.

The appellant submits that the verdicts on these counts were unsafe and unsatisfactory in this respect because, although some of the investors testified in chief that a representation amounting to that pleaded in the relevant counts on the indictment was made, he contends that none of them adhered to the representation when cross examined. He went further and said that some of them testified to the contrary and that "all of them conceded they were purchasing a share in the project".

These propositions will be considered in the context of the evidence concerning each count. However, at the outset two points should be noted.

First, contrary to the premise of these submissions, I do not accept that there is a necessary inconsistency between an investor being led to believe they were "purchasing" a share of profits in a development and that their funds would only be used to further or promote that development. For example, and by way of analogy, a person may subscribe for shares or units. In ordinary parlance, they might, if pressed in cross examination, agree that they "purchased" those shares or units but that would not be inconsistent with there being a reasonable expectation on the investor's part that the receiving company or the trustee would only apply their funds to promote that investment, consistent with the company or trustee's duties under the Corporations Act. Of course, the position would be different if the shares or units were purchased on an open market and they were being bought and sold between participants in that market. In that case, a purchaser could not have a realistic expectation that there were would be any restrictions on the vendor in dealing with the proceeds of sale. This directs attention to the precise context in which the relevant statements took place.

In this case a critical component of the context for all bar one of the counts (count 12) was that what was being promoted was an investment in a "joint venture" for an ongoing project namely the residential development of a specific parcel of land. While the phrase "joint venture" may not have a settled common law meaning (United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; 157 CLR 1, at 10 per Mason, Brennan and Deane JJ), its repeated use in this case strongly suggests that the capital contributions of the investors would only be applied to the furtherance of that undertaking. This conclusion becomes overwhelming when the evidence is considered more closely.

Second, the supposed inconsistency that the appellant points to was not taken up directly with any of the investor witnesses. With the possible exception of Mr O'Donnell, it was never suggested to the investor witnesses that they understood that they were purchasing a share of the profits of the relevant development with the consequence that the vendor was free to treat the money they paid for any purpose. Further, when the appellant gave evidence he denied a number of the conversations attributed to him to by those various investors and asserted that he said something different. This evidence was given even though, for the most part, the appellant's counsel did not challenge the investors' evidence, either by suggesting that the appellant did not make the statements they testified to, or by suggesting that the statements he did make were as he described in his later evidence in chief.

It is not necessary to explore the extent, if any, of the application of the so called rule in Browne v Dunn (1893) 6 R 67 to the accused in a criminal trial nor what consequences follow for the appellant from any failure to comply with it (see MWJ v R [2005] HCA 74; (2005) 80 ALJR 329 at [18] to [19], [38] to [41]). It is only necessary to note that that in this case the jury did not have the benefit of hearing the response of a number of the investor witnesses to the suggestion that they were only purchasing a share of the profits in the relevant venture and that there were no limits placed on the money they contributed. The jury also did not have the benefit of hearing the response of a number of the investor witnesses to the appellant's version of the conversations that led to their investment. These were clearly matters relevant to the jury's assessment of their evidence and that of the appellant (MWJ at [19], per Gleeson CJ and Heydon J).

This Court this does not have the benefit of considering the responses of the investor witnesses to those matters either. Consistent with MWJ at [19] that is a matter relevant to our assessment. It makes the task of the appellant in persuading this Court that it was not open to the jury to be satisfied beyond reasonable doubt that the accused was guilty of these counts that much harder.

During argument Senior Counsel for the appellant nominated the strongest count (from the Crown's perspective) as being count 10 concerning Mr Falzon and the weakest as being count 7 concerning Mr and Mrs O'Donnell. In deference to that selection I will address those counts first although I do not share that assessment. In summarising the evidence concerning each count I will focus on that part of the evidence relevant to each count that relates to the point raised by the appellant in relation to this ground as summarised above in [107] to [108].

Count 10: Falzon

Count 10 of the indictment charged the appellant as follows:

"Between about April 2003 and July 2003, [he] by deception, did dishonestly obtain from Richard Falzon a financial advantage for Colosseum Holdings Pty Limited, namely, funds of approximately $771,721.00 in that he did represent that the funds provided by Richard Falzon would be applied to a joint venture between him and Streetwise Property and Projects Pty Limited to develop particular properties at Seaforth and Panania, which representation was misleading and deceptive because the funds were not to be applied for the specific purposes of any such joint venture."

An inconvenient fact for the appellant was that Streetwise never owned the property at Terrey Hills. In his evidence he stated that he advised Mr and Mrs Panicker that their funds would be treated as a loan until such time as the property at Terrey Hills could be acquired and thereafter they could buy a share in the "project". Thus, consistent with his defence on other counts, he claimed that Streetwise was entitled to use their funds as it pleased and he did not make any representations to suggest otherwise.

Thus by the time his Honour came to rule on the Crown's application, the critical issue common to all of counts 5 to 13 had been distilled to whether the appellant had represented to each of the investors that their funds would be applied in a particular manner. The evidence did not reveal any striking similarities in the statements that he was said to have made. However, accepting the evidence on each count at its highest, there were clearly a number of common features between the counts. Each of the investors approached Streetwise seeking financial assistance or advice. The appellant and Streetwise took on the role of adviser and finance arranger with no suggestion that any investor should obtain legal advice. The finance transaction arranged by Streetwise involved a mortgage over the investor's family home which in each case was their only substantial asset. The form of "investment" offered for counts 5 to 11 and 13 was not relevantly different, being some form of joint venture with Streetwise. With the exceptions of counts 5 (Panicker), 6 (Mr and Mrs Fassos) and 10 (Mr Falzon), each transaction proceeded in a broadly similar manner with there being an initial meeting with a representative of Streetwise before they were introduced to the appellant as managing director who in effect "sealed the deal" and secured their signatures on a document requiring them to contribute finance. With counts 6 and 10 (Mr Fassos and Mr Falzon) there was no initial meeting with a representative of Streetwise as those investors worked for the company, but the balance of those transactions proceeded in the same way as the others. Even in their cases, the appellant's assurances at the time of sign off were critical as they were with count 5.

Each of these investors were in a position of some vulnerability or dependence vis a vis Streetwise and the appellant. They were placing trust and confidence in Streetwise and the appellant and putting their financial future at risk. They each had an interest in having some assurance that their funds would be utilised in furthering the joint ventures and the appellant had an obvious interest in providing that assurance to access their funds. The evidence of the investor witnesses, if accepted, was capable of establishing that the appellant had a "tendency" or modus operandi of falsely reassuring such investors that their funds would be utilised in building and developing the property the subject of their investment. In my view it was open to his Honour to find that an acceptance by the jury that the appellant told one set of investors that their funds would be applied towards the joint venture was capable of being "of importance or of consequence in establishing the fact in issue" (DSJ at [72]) on one or more of the other counts namely that he provided a similar false assurance to another set of investors pursuing the same or a similar transaction with Streetwise.

Although no specific submission was directed to these counts, it is necessary to make further mention of count 5 concerning Mr and Mrs Panicker and count 12 concerning Mr and Mrs Barnes.

With Mr and Mrs Panicker the relevant representation was alleged to have been made between late 2001 to April 2002 whereas all the other counts concerned representations between April and November 2003. This is one matter weighing against its inclusion in the tendency direction that was given, although it does not appear that any invitation to that effect was made to his Honour. Nevertheless in the context of this case, I do not consider that this factor is of such significance that it can be concluded that it was not open to his Honour to conclude that the evidence on this count was capable of having substantial probative value on the other counts and vice versa. The modus operandi of the appellant as described by Mr and Mrs Panicker for their transaction was in all other respects the same as counts 6 to 13. An acceptance of Mr and Mrs Panicker's evidence was capable of being considered as the first manifestation of the appellant's "tendency" to provide false assurances about the use that would be made of funds contributed to joint ventures which later played itself out in 2003 with the other counts. Equally, an acceptance of the evidence on one or more of the other counts was capable of being considered to be "of importance or of consequence in establishing" (DSJ at [72]) that at an earlier time he was spruiking joint ventures in the same way in otherwise identical circumstances.

As I have explained above, Mr and Mrs Barnes "invested" in what was described a "house and land package". They entered into two option agreements under which it was envisaged that upon exercise by them they would pay the option fees which would become deposits under a contract for sale and development of two properties. In fact the option fees were handed over prior to any exchange and no such exchange took place. The alleged misleading representations were said to be that Streetwise was the owner of the lands and that the option fees would be applied towards the purchase of the property by them. This latter aspect was a reference to an assurance said to have been given by the appellant that the monies would be held in an interest bearing account, which they were not. Even though this representation did not relate to the use of the funds for the purposes of a joint venture, its remaining features were sufficiently similar to the other counts to leave it open to his Honour to conclude that the evidence on this count was capable of being "of importance or of consequence in establishing the fact in issue" on other counts and that the evidence on the other counts had the same character in relation to this count. The tendency alleged by the Crown contemplated the appellant providing misleading assurances to investors concerning the application of their funds so that he and Streetwise could obtain access to those funds.

Given its apparent factual similarity to this case it is necessary to refer to the decision of the Full Court of the Federal Court (Whitlam, Sackville and Mansfield JJ) in Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886; 106 FCR 51. In Jacara, the Full Court dismissed an appeal from a judgment dismissing a civil claim for damages for misleading and deceptive conduct contrary to former s 52 of the Trade Practices Act 1974 (Cth). The appellant pleaded that a representative of the respondent had induced it to enter into a lease to occupy premises in a shopping centre (Jacara at [14]). At the trial the appellant had sought to read affidavits from other tenants to the effect that the same representative had made misleading representations to them on similar topics to the pleaded representations (Jacara at [26] to [27]). As in this case, there were variations between the deponents as to the particular statements they attributed to the respondent's representative. The trial judge had rejected their evidence (see Jacara at [29] to [34]) and the Full Court upheld that rejection (Jacara at [83]).

For present purposes two matters should be noted about Jacara. First the Full Court applied House v R principles in reviewing the trial judge's refusal to admit the evidence (Jacara at [75]). Thus one reason for any perceived differences between the outcome in that case and this one are the different determinations by the judges at first instance and a standard of scrutiny on appeal that accommodates different first instance assessments provided they are undertaken in accordance with correct principle and do not lead to unreasonable outcomes.

Second, critical to the outcome in Jacara was the nature of the facts in issue. The representations pleaded by the appellant in that case were precise (see Jacara [14]) Thus, for example, it was pleaded that the respondent represented that following the redevelopment the number of visitors to the centre would increase "by at least 50%-60%". This precision reflected the particular conversations that the appellant attributed to the respondent's representative. No doubt, the pleaded representations were drafted and the particular conversations were relied upon having regard to reliance, causation and damage issues which were a necessary part of the appellant's case. However, once the appellant in Jacara had set itself the task of demonstrating the making of representations or statements with that level of precision it became that much more difficult for it to demonstrate that the evidence of other lessees had significant probative value given the variances in the versions of the conversations that they deposed to. Hence the trial judge in Jacara emphasised the significance or lack of it of the alleged tendency evidence to establishing the "representations alleged" (at [31]) and the Full Court referred to it not having "significant probative value on the facts and issues" (at [81]), the latter of which are, of course, defined by the pleadings.

By contrast in this case the representations pleaded in the various counts of the indictment were either identical or very similar. They were not fixed by reference to any precise words or figures said to have been uttered by the appellant, but instead referred to the overall effect of his spruik of the transaction to be entered into by the various investors. As I have said by the time his Honour came to decide this question the issues between the Crown and the appellant had been distilled to whether the appellant had falsely represented to each of the investors that their funds would be only applied to further the joint venture or purchase they were entering into. The evidence of the investor witnesses on one count was clearly capable of being significantly probative of whether the appellant acted in that same way on another count. If, however, the critical fact in issue for each count was whether the appellant had uttered certain specific words, as was the case in Jacara, then a different outcome may have resulted. This analysis does not necessarily advantage the Crown by permitting it to include a count specifying a representation pitched at a very high level of generality. Amongst other matters, the less specific the representation in a particular case, the harder it may be to prove its falsity beyond reasonable doubt.

The appellant did not contend that there was any error on his Honour's part in being satisfied under s 101(2) that the "probative value of the evidence substantially outweigh[ed] any prejudicial effect" it may have had on the appellant. His Honour noted all tendency evidence has some prejudicial effect. However in this case his Honour also noted that the jury had already heard the evidence and would be directed that before they could use the evidence concerning one count as evidence on another count they would have had to have already concluded that "the tendency matter [had been] established beyond a reasonable doubt". His Honour considered that these matters "serve to reduce the prejudicial effect upon the accused". I see no error in this approach (see Dao at [172] per Simpson J).

I reject ground 6 of the appeal.

It follows that I would dismiss the entirety of the appeal against the appellant's conviction on all counts.

Sentence Appeal

On 24 August 2010, the jury returned guilty verdicts on counts 1 to 13. On 17 December 2010, his Honour sentenced the appellant to terms of imprisonment for each count. The sentencing structure that his Honour adopted was to divide the 13 counts into three groups. Within each group the same sentence was imposed and they were wholly made concurrent with one another. The three groups of sentences were then cumulated.

On counts 1 to 4 (the finance counts), his Honour sentenced the appellant to fixed terms of imprisonment of two years and six months each to be served concurrently and backdated to commence from 27 March 2009. The appellant had been taken into custody following his conviction on 24 August 2010. However, his Honour backdated the sentences to a time prior to then, representing the time he had spent in custody, both in the United States of America prior to being extradited to Australia and then before being released to bail after he returned.

In relation to counts 5 to 8 on the indictment (i.e. the investor counts involving Panicker, Fassos, O'Donnell and Di Benedetto), his Honour sentenced the appellant to four concurrent fixed term sentences of two years and six months. This group of sentences was fixed to commence upon the expiry of the sentence for the first group of offences. These sentences commenced on 26 September 2011 and, if not disturbed, will expire on 25 March 2014.

In relation to counts 9 to 13 (i.e. the investor accounts involving Hardy, Falzon, De Silva, Barnes and Tavares/Rowe), his Honour sentenced the appellant to five concurrent sentences of three years and six months each comprised of a non-parole period of one year and four months and a balance of term of two years and two months. The non-parole periods for this group of sentences were fixed to commence on the expiry of the sentences for counts 5 to 8. Thus, if not disturbed, they will commence on 25 March 2014, and expire on 24 July 2015 and the balance of term for each will expire on 24 September 2017.

The effect of the sentences was that the appellant was sentenced to an overall period of imprisonment of eight years and six months to date from 27 March 2009, with a minimum period in custody of six years and four months.

The Sentencing Judgment

I note the following nine points concerning his Honour's sentencing judgment.

First, His Honour made findings as to the value of the benefits obtained by the appellant's dishonest statements and the financial losses he occasioned.

In relation to counts 2 to 4, the false statements made by the appellant concerning the state of the accounts were made to obtain credit facilities totalling in excess of $8 million. In relation to count 1, the false statement concerning the financial accounts was made for the purpose of obtaining a continuation of a loan facility from the NAB in the amount of $11 million. With that count, his Honour considered that the measure of loss is "limited to any extensions of the amount of the line of credit". This meant that only "part of the value of the facility of approximately $11 million" was the value of the loss. Accordingly, for counts 1 to 4 his Honour found that the value of the monies fraudulently obtained as the result of the appellant's conduct was "somewhere between $19 and $8 million". Later in the judgment his Honour concluded that the amount obtained was between $8 million and $10 million. Taking into account enforcement action undertaken by the financial institutions, the outstanding amount was just in excess of $4 million.

In relation to counts 5 to 13, the investor accounts, his Honour found that the amounts received from the investors totalled $3,716,022.10 but this figure had increased to $5,504.576.50 by reason of the various legal fees and other costs incurred in connection with the various civil proceedings that arose of those transactions. Thus, his Honour concluded that the resulting loss was in excess of $5.5 million.

Second, his Honour summarised the appellant's subjective circumstances as follows. The appellant was born in South Africa. He was the middle child of three. His Honour recorded that he had a "difficult childhood due to the apartheid regime and the racism inherent in that regime", but he had the benefit of caring parents and a supportive relationship with his family. At age seven he sustained a head injury which had affected his behaviour and schooling. He attended some special classes throughout his schooling in South Africa, but was able to complete the equivalent of the HSC in South Africa and achieved average results. After he left school he worked in his father's insurance brokerage company, initially as a clerk, before becoming an insurance salesman in the family business.

The appellant was married in South Africa in 1988 and emigrated to Sydney with his wife and two young children in 1996. He obtained permanent residency in this country in 2001. He gained employment in the real estate industry before starting his own business in 1997.

In July 2005, after his company ran into difficulties subsequent to these offences, he and his family received death threats. Fearing for their safety, they moved overseas.

Third, his Honour described the effect of the appellant's predicament on his family. His wife gave evidence of having received threatening calls, and their children's respective schools raising concerns about their ability to protect them. His Honour accepted her evidence that these events left their children "traumatised, depressed and scared". The appellant's wife and son returned to Australia some time after the appellant's extradition. His Honour noted that they were supportive of their father and were doing the best they could to rebuild their lives. The appellant's daughter had remained in the USA to pursue her education.

Fourth, the material before his Honour recorded the absence of any significant contrition or acceptance of responsibility for his actions on the part of the appellant. Tendered before his Honour were two probation and parole reports, one prepared in May 2008 soon after his extradition and another prepared in November 2010 while he was awaiting sentence. The first report suggested that the appellant had given consideration to pleading guilty to the offences. It recorded a denial by the appellant of any personal gain or intention to defraud but an acceptance that his actions resulted in the collapse of the Streetwise companies and the subsequent hardship caused to others. The second report recorded an acceptance by the appellant that he was reckless in signing the balance sheets, but noted that he "attributed responsibility to the fact that he employed a young accountant". This report recorded that the appellant took little responsibility for his offending behaviour.

Fifth, His Honour found that a specific aggravating circumstances of the offences was the substantial injury, emotional harm and loss and damage caused by the offences (s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999 (the "Sentencing Act"). I have already described his Honour's findings in relation to the level of financial loss occasioned. In relation to the investor counts, his Honour found that it was a "severe loss for each and every [victim]". His Honour accepted the Crown's description of the investors as "mum and dad investors" and concluded that there had also been a "significant emotional cost to them" and that "their loss and the subsequent legal battles that they have to go through have exacted an emotional toll on them". This is a significant matter and one to which I will return.

Sixth, his Honour found that a further aggravating circumstance was that the offences were part of a "planned or organised criminal activity" (s 21A(2)(n)). His Honour characterised the appellant's involvement as follows:

"Whilst I do not conclude that the offender commenced his business with the specific and sole intention of defrauding financial institutions and investors it appears plain that such business model as he adopted was not sound, and, furthermore, as the business began to unravel he resorted to fraud and deception to obtain funds to shore up those businesses."

Seventh, his Honour accepted as a mitigating factor (s 21A(3)(f)) that the appellant did not have a previous criminal record and that he was a person of good character. However, his Honour considered that the relevance of good character is of less significance in white collar crimes "since it is that factor which normally places an offender in a position where he or she is able to commit the offence" (R v Rivkin [2004] NSWCCA 7; 59 NSWLR 284 at [410]; R v Williams [2005] NSWSC 310; 152 A Crim R 548 at [61]).

Eighth, His Honour declined to make any finding that the appellant had good prospects of not re-offending or of rehabilitation (cf s 21A(3)(g) and (h)):

"However his failure to acknowledge his part in these offences make it difficult to predict what the future circumstances will be so far as contact with the criminal law is concerned. It is certainly true that the circumstance of the present offences indicate a weakness in his character insofar as conducting himself in a proper, honest and legal manner."

Ninth, his Honour characterised the appellant's conduct as being at the very serious end of the scale for these type of offences.

In relation to the finance counts (1 to 4), His Honour concluded that the amount of money obtained by the appellant was "... extremely high and marks those four counts as extremely severe in terms of objective gravity".

In relation to the investor counts (5-13), his Honour found:

"It is clear from these matters that for a period of approximately three and a half years the offender continued this [offending] conduct. A significant amount of money was obtained by him. The investors from whom it was obtained were not sophisticated, and, indeed, were vulnerable to a sophisticated and professional sales pitch, which the offender and/or his subordinates employed."

His Honour found that these matters reflected the "very serious objective gravity of the particular counts".

Not surprisingly, His Honour concluded that both general and specific deterrence were of particular importance in sentencing the appellant.

Ground one - unclear non-parole period

Ground one complains that his Honour's discretion miscarried in that his Honour failed to "clearly articulate the appropriate non-parole period".

At the commencement of the sentencing judgment his Honour stated that he proposed to impose a sentence with a combined non-parole period of six years and four months and an overall sentence of eight years and six months. At the conclusion of the sentencing judgment his Honour stated:

"The effect of those sentences, Mr Bangaru, is I have sentenced you to a non-parole effectively of four years and six months which commenced on 27 March 2009 and which will first expire on 24 July 2015. The sentence will fully expire on 24 September 2017.

Accordingly, just to make it clear, the sentence is one of eight years and six months with a non-parole period of six years and four months." (emphasis added)

The allegation of uncertainty in the statement of the combined non-parole period arises from the apparent discrepancy between the figure of "four years and six months" in the first paragraph of this extract, and the figure of "six years and four months" in the second paragraph. In my view there is no substance in this ground. His Honour's reference to "four years and six months" was clearly a slip. This is apparent from the comments at the beginning of the judgment, the clarification at the end of the judgment, and the words which immediately follow the phrase "four years and six months" which specifies that the combined non-parole period commenced on 27 March 2009 and "will first expire on 24 July 2015", being a period of six years and four months. His Honour accidentally transposed the words "four" and "six" in the first paragraph of the above quote. His Honour recognised the slip and immediately fixed it.

I reject ground one.

Ground two - special circumstances

Ground two of the application for leave to appeal in respect of the sentence alleges that his Honour erred in failing to expressly consider whether there were "special circumstances" for the purposes of s 44(2) of the Sentencing Act which warranted the imposition of a sentence in which the balance of the term exceeded one-third of the non-parole period.

The appellant contended that this was warranted by reason of his good character, the support he had from his family, the fact that the original business model he adopted had been successful, that the sentencing structure involved a significant degree of accumulation, and that he had not previously been imprisoned prior to the commission of these offences.

To address this ground it is first necessary to discuss the overall structure of the sentences imposed by his Honour. Sub-section 44(2) specifies that the balance of term of the sentence "must not exceed" one-third of the non-parole period unless the Court determines that there are special circumstances for that ratio being greater. Although the one-third ratio is expressed as a maximum, it is a figure commonly adopted for individual sentences absent special circumstances being made out.

Sub-section 44(2) is directed to the sentences imposed for individual offences. However it is also common for sentencing judges dealing with multiple offences to strive to structure their sentences so that the ratio of the effective balance of term to the combined non parole period approximates to the one-third referred to in s 44(2). If an offender was to receive two cumulative sentences, each of which had a non-parole period and balance of term that reflected the statutory ratio, there can be a dramatic reduction in the proportion that the effective balance of term represents to the combined non-parole period. This is illustrated by an example in which an offender is sentenced for two offences, with the sentence for offence A consisting of a three year non-parole period and a one year balance of term, and the same sentence being imposed for offence B with the non-parole period for offence B commencing upon the expiry of the non-parole for offence A. The effect of two such sentences would be that the offender would serve a combined non-parole period of six years and a balance of term of one year. The balance of term for the sentence for offence A would be subsumed into the non-parole period for the sentence for offence B. In this example the combined non-parole period represents over 85% of the total effective sentence and operates to frustrate the sentencing judge's intentions. A common method of avoiding this difficulty is to rely on s 44(2) to reduce the non-parole period that would otherwise be imposed for offence B so as to ensure that the ratio for the balance of term to the combined non-parole period is approximately equal to the maximum statutory ratio for individual sentences, i.e. one-third (see R v Street [2005] NSWCCA 139 at [37] to [39]).

In this case his Honour adopted that approach. Further, to facilitate a sentence which overall reflected the statutory ratio for individual offences provided for in s 44(2), his Honour imposed fixed terms for the first two sets of offences which were individually concurrent and then cumulative. I will return to consider the significance of fixed term sentences when addressing grounds three and four.

It follows that ground two of the appeal, as expressed, is misconceived. His Honour implicitly did consider whether there were "special circumstances" for the purposes of s 44(2) of the Sentencing Act to warrant a variation. However, his Honour determined that only a variation to the sentences for the third group of offences was warranted and only to the extent necessary to ensure that the combined non-parole period (40 months) bore a ratio to the overall sentence (54 months) including the balance of term (14 months), that was approximately equal to the statutory ratio for individual sentences (74% and 75% respectively).

To the extent that the ground of appeal can be taken as a complaint that his Honour did not go further in varying the statutory ratio for some or all of the offences, then it has no substance. No submission was made to his Honour that a variation in the statutory ratio was warranted by reason of any special circumstance pertaining to the appellant. It is conceivable that the fact that an offender had not been previously imprisoned, might warrant a finding of special circumstances in a particular case. However, it does not compel that conclusion in this case. In R v Fidow [2004] NSWCCA 172 at [22], Spigelman CJ stated:

"This research makes it necessary for this Court to state the obvious. Simply because there is present in a case a circumstance which is capable of constituting a 'special circumstance' does not mean that a sentencing judge is obliged to vary the statutory proportion. To repeat what was said in [R v Simpson [2001] NSWCCA 534; 53 NSWLR 704 at [68]], it is necessary that the circumstances be sufficiently special to justify a variation."

This is illustrated by the approach of the High Court in Muldrock v R [2011] HCA 39; 244 CLR 120 at [58], where the Court considered that the desirability of the applicant in that case undergoing suitable rehabilitative treatment was a special circumstance that justified a departure from the statutory proportion between the non-parole period and the balance of term. In that case, in circumstances where the other factors relevant to sentencing such as general and specific deterrence had diminished significance (Muldrock at [59]), the objective of rehabilitation was served by varying the statutory ratio.

By contrast in this case, nothing in any of the matters pointed to by the appellant when considered against the relevant objectives of sentencing as specified in s 3A of the Sentencing Act , warranted or required any such variation. In particular, in the absence of any positive finding concerning his prospects of rehabilitation, that objective of the sentencing process did not warrant any such variation.

I reject ground two.

Ground three - no meaningful allowance for rehabilitation

Ground four - sentences overall manifestly excessive

Ground three of the appeal alleges that his Honour's discretion miscarried in that he made no meaningful allowance for rehabilitation as said to have been required by s 3A(d) of the Sentencing Act. It is convenient to consider this with ground four which contends that the sentences overall were excessive.

The appellant's submissions in relation to ground four did not contend that the sentences imposed for any of the individual offences per se were excessive. Instead, the appellant complained of his Honour's approach to accumulation, having regard to the application of the totality principle (Mill v R [1988] HCA 70; 166 CLR 59). That said, it is appropriate to address these grounds within the discipline stated in Pearce v R [1998] HCA 57; 194 CLR 610 at [45], namely by first considering the sentences imposed for the individual offences before considering questions of totality.

As noted for each of counts 1 to 4 his Honour imposed a fixed term of imprisonment of two years and six months. As I have already explained, his Honour only varied the statutory ratio in s 44(2) to the extent necessary to specify a ratio between the balance of term and the combined non-parole period which reflected the usual ratio of one-third. In Ruttley v R [2010] NSWCCA 118 at [43] Simpson J stated that "[o]rdinarily, where a fixed term is imposed, it equates to what would have been a non-parole period had one been fixed." It follows that the fixed term sentences of two years and six months (thirty months) each equates to overall sentences of three years and four months (forty months) each.

The same reasoning applies to counts 5 to 8, i.e. those sentences equate to an overall sentence for each offence of forty months. This analysis is consistent with the forty-two month total sentence his Honour imposed for each of counts 9 to 13, as there was little reason to differentiate between the criminality involved in any of counts 5 to 13. The two month discrepancy between the effective sentence imposed for each of counts 5 to 8 (forty months) compared with those imposed for each of counts 9 to 13 (forty-two months) is of no moment.

The maximum penalty for each of these offences was five years. In relation to counts 1 to 4, his Honour found that the appellant's criminality was "extremely severe". The monetary amounts involved in each offence were very large. The appellant was the directing mind of the Streetwise group and orchestrated the preparation of misleading accounts. His subjective case was very weak. To the extent that there was a finding of good character, the authorities in relation to white collar crime diminished the significance that is attached to it. There was no evidence of contrition and no finding that he had any positive prospects of rehabilitation. The only matter that operated in his favour was the suffering that had been imposed upon his family. This was in significant part a result of his own conduct. The authorities suggest that such suffering has little weight unless the circumstances are exceptional (R v Edwards (1996) 90 A Crim R 510). No submission to that effect was made before his Honour or before this Court, nor would it be well founded.

In these circumstances an effective sentence which represented two-thirds of the maximum penalty for each of counts 1 to 4 was, in my view, not outside the range.

In relation to each of counts 5 to 13, the analysis does not differ. It is true that the amounts involved were less than the sums the subject of counts 1 to 4. However, any such difference was more than balanced, and indeed exceeded, by the limited capacity those victims had to bear such losses and the emotional toll the appellant's outright lies caused them. They were people of modest means. Their only substantial asset was their house. The financial and emotional hardship imposed upon all of them by the appellant's calculated lies will affect them and their families for many years to come. The appellant engaged in this conduct on a systematic basis over a number of years. He showed callous indifference to the likely harm that would be caused to people who were placing significant trust and confidence in him. Given the very high criminality involved and his weak subjective case, the individual sentences imposed for each offence were, in my view, not excessive.

As noted, ground three complains that his Honour made "no meaningful allowance for rehabilitation". I have already described the finding that his Honour made in relation to the appellant's prospects of rehabilitation above. Given the underwhelming nature of that finding, I can discern no error in the approach that his Honour took.

The remaining complaint concerns the approach his Honour took to accumulation in light of the totality principle. In the sentencing judgment his Honour stated:

"The Crown has argued that by reason of the number of offences principles [of] accumulation and totality need to be applied. I agree with those submissions generally. In my view, the number of offences and the period over which they occurred warrant partial accumulation of groups of offences one upon another, whilst being internally concurrent. I have grouped the offences into three. The first is the counts one to four s 178BB I have grouped in one group. The second group are the earlier offences, namely counts five to eight of the investor counts those which occurred between February and May 2003. The third group of offences had been the later counts of the investor counts, those from nine to thirteen, being those offences which occurred between June and November 2003. There is no great science in what I have done. I have attempted to fairly represent, based on the evidence that I have heard both at trial and in sentence, a cross section of the offender's criminality and to impose what I hope is a just and warranted sentence in that regard." (emphasis added)

Clearly his Honour did take into account the totality principle. Thus the true complaint is the manner of its application. The appellant complains that, contrary to what his Honour stated, there was, in effect, "total accumulation and not partial cumulation in respect of any of the sentences that apply to the three groups". This may be so, but it ignores the otherwise generous approach his Honour adopted towards the appellant of providing for complete concurrency of the sentences within the three groups. In my view had his Honour made the three groups of sentence wholly concurrent but only made provision for partial accumulation between the groups then the outcome would not have fully reflected the totality of the appellant's conduct.

There was no doubt an element of pragmatism in the approach that his Honour adopted. It would have been open to his Honour to only partially accumulate the sentences within the three groups, but if that course was embarked upon, then the otherwise generous approach of allowing complete concurrency of the sentences within the groups would have to have been reconsidered. A more doctrinaire approach would have involved a series of partial accumulations of all thirteen counts. The adoption of that approach would have led to an overall sentence being imposed upon the appellant which was much greater than the one which he received and which would not otherwise be erroneous.

In any event, our task is to discern error and, apart from one matter, I see no error in his Honour's approach. The only error is the statement in the passage set out above at [327] that the second group of offences comprising counts 5 to 8 occurred between February and May 2003. That statement is correct for counts 6 to 8. However count 5 occurred between November 2001 and April 2002. In view of that, it is difficult to see how the sentence for that offence could have been made concurrent with the sentence for counts 6 to 8. Not surprisingly, this is not an error which the appellant complains of. It is certainly not a matter that warrants any interference with the sentences his Honour imposed in a manner favourable to the appellant.

I reject grounds three and four.

Orders

Accordingly, the orders I propose are:

(1) The appeal against conviction on all counts be dismissed;

(2) The application for leave to appeal the sentence on all counts is granted; and

(3) The appeal against sentence on all counts be dismissed.

**********

Decision last updated: 20 September 2012

Medium Neutral Citation:	Bangaru v R [2012] NSWCCA 204
Hearing dates:	16 April 2012
Decision date:	20 September 2012
Before:	Beazley JA at [1] Hall J at [2] Beech-Jones J at [3]
Decision:	(1) The appeal against conviction on all counts be dismissed. (2) The application for leave to appeal the sentence on all counts is granted. (3) The appeal against sentence on all counts be dismissed.
Catchwords:	CRIME - appeal against conviction - obtain money by deception - obtain money by false or misleading statements - whether charges on indictment consistent with offence in respect of which appellant surrendered for extradition - whether trial judge should have directed acquittal - whether miscarriage of justice - whether trial judge failed to direct jury on limb of indictment - whether jury verdicts unreasonable, unsafe or unsatisfactory - whether tendency direction should have been given - s 97(1) Evidence Act - appeal against sentence - whether non-parole period uncertain - whether failure to consider special circumstances - whether allowance for rehabilitation - whether manifestly excessive - totality principle.
Legislation Cited:	- Corporations Act 2001 (Cth) - s 200, s 292 s 299 - Crimes Act 1900 - s 178A, s 178BA, s 178BB, - Criminal Appeal Act 1912 - s 5, s 6(1) - Criminal Procedure Act 1986 - s 20 - Evidence Act 1995 - s 97(1), s 110 - Extradition Act 1988 (Cth) - s 10(2), s 42 - Trade Practices Act 1974 (Cth) - s 52
Cases Cited:	- Browne v Dunn ((1893) 6 R 67 - Dao v R [2011] NSWCCA 63; 278 ALR 765 - DSJ v R; NS v R [2012] NSWCCA 9; 259 FLR 262 - House v R [1936] HCA 40; 55 CLR 499 - Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886; 106 FCR 51 - M v R [1994] HCA 63; 181 CLR 487 - MFA v R [2002] HCA 53; 213 CLR 606 - Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611 - Morris v R [1987] HCA 50; 163 CLR 454 - MWJ v R [2005] HCA 74; (2005) 80 ALJR 329 - O'Donoghue v Ireland [2009] FCAFC 184; 263 ALR 392 - Prasad v R (1979) 23 SASR 161 - QBE Insurance Group Ltd v Australian Securities Commission (1992) 38 FCR 270 - R v Fletcher [2005] NSWCCA 338; 156 A Crim R 308 - R v PWD [2010] NSWCCA 209; 205 A Crim R 75 - R v Zhang [2005] NSWCCA 437; 158 A Crim R 504 - Rasic v R [2009] NSWCCA 202 - Shrimpton v The Commonwealth [1945] HCA 4; 69 CLR 613 - SKA v R [2011] HCA 13; 243 CLR 400 - Truong v R [2004] HCA 10, 223 CLR 122 - United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; 157 CLR 1 - Warren v Coombes [1979] HCA 9; 142 CLR 531
Texts Cited:	- R.P. Austin, A.J Black Annotations to the Corporations Act (2010) LexisNexis - Australian Corporation Law - Principles and Practice LexisNexis
Category:	Principal judgment
Parties:	Kovelan Bangaru (Appellant) Crown (Respondent)
Representation:	Counsel: Mr A.J. Bellanto QC, Mr M. Sahade (Appellant) Ms P.E. McDonald SC (Respondent) Solicitors: Oliveri Lawyers (Appellant) Commonwealth Director of Public Prosecutions (Respondent)
File Number(s):	2008/022138 2008/022139 2008/103208 2008/144991 2008/148519
Decision under appeal	Jurisdiction: 9101 Date of Decision: 2010-12-17 00:00:00 Before: Lakatos DCJ

Beazley JA	[1]
Hall J	[2]
Beech-Jones J	[3]
The conviction appeal	[4]
Ground one: Section 42 of the Extradition Act 1988 (Cth) (Counts 6 to 13)	[7]
Grounds two to five: The Provision of Financial Statements to Lending Institutions (Counts 1 to 4)	[26]
The Form of the Indictments and the Relevant Statement in the Accounts	[28]
True and fair view	[37]
The Crown opening	[43]
The Accounts	[49]
The Accountants	[52]
No case submission to final address	[66]
Addresses and debate prior to the summing up	[68]
Conclusion as to the conduct of the Crown case	[71]
Grounds two and three - Failure to direct acquittals	[73]
Grounds four and five - Failure to give direction	[86]
Ground seven - Investor counts 6 to 13 - unsafe and unsatisfactory	[102]
Count 10 - Falzon	[116]
Mr Falzon's evidence	[121]
The appellant's case on count 10	[130]
Consideration	[136]
Count 7 - John and Gillian O'Donnell	[142]
Mr and Mrs O'Donnell's evidence	[144]
The appellant's case on count 7	[159]
Consideration	[161]
Count 6 - Mr and Mrs Fassos	[166]
Consideration	[179]
Count 13 - Tavares and Rowe	[180]
Consideration	[188]
Count 8 - Mr and Mrs di Benedetto	[189]
Mr and Mrs di Benedetto's evidence	[191]
The appellant's case on count 8	[198]
Consideration	[202]
Count 9 - Mr and Mrs Hardy	[203]
Mr and Mrs Hardy's evidence	[205]
The appellant's case on count 9	[219]
Consideration	[221]
Count 11 - De Silva	[222]
Mr and Mrs de Silva's evidence	[224]
The appellant's case on count 11	[233]
Consideration	[234]
Count 12 - Barnes	[235]
Mrs Barnes' evidence	[237]
The appellant's case on count 12	[247]
Consideration	[248]
Conclusion on ground seven	[252]
Ground six - tendency direction (counts 5 to 13)	[255]
Background	[256]
Tendency evidence	[260]
Consideration	[267]
Sentence appeal	[283]
The sentencing judgment	[288]
Ground one - unclear non-parole period	[305]
Ground two - special circumstances	[309]
Ground three - no meaningful allowance for rehabilitation ] Ground four - sentences overall manifestly excessive ]	[319]
Orders	[332]