Dickson v R

[2016] NSWCCA 105

Court of Criminal Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Dickson v R [2016] NSWCCA 105
Hearing dates:	11, 12 February 2016
Date of orders:	10 June 2016
Decision date:	10 June 2016
Before:	Macfarlan JA at [1] Schmidt and Wilson JJ at [2]
Decision:	1. Leave to appeal in relation to grounds 1 and 2 of the conviction appeal is refused. 2. The conviction appeal is otherwise dismissed. 3. The sentence appeal is upheld and the sentences imposed by Beech-Jones J are set aside. 4. The appellant is re-sentenced as follows: a. For count 1, being an offence contrary to s 135.4(5) of the Criminal Code, the appellant is sentenced to a term of imprisonment of 9 years, commencing on 22 December 2014 and expiring on 21 December 2023. b. For count 6, being an offence contrary to s 11.5(1) of the Criminal Code, the appellant is sentenced to a term of imprisonment of 12 years, to date from 22 December 2016 and expiring on 21 December 2028. c. Pursuant to s 19AB(1) of the Crimes Act 1914 the Court fixes a single non-parole period of 9 years and 3 months, expiring on 21 March 2024.
Catchwords:	CRIMINAL LAW – appeal – appeal against conviction complex tax fraud – money laundering – question of whether change in Crown case – whether appellant’s conviction inconsistent with asserted innocence of co-conspirator – whether plea in bar exists for a count on indictment – whether criminality of one count on indictment considerably different to a second count on indictment – whether count duplicitous – whether trial judge failed to adequately put the appellant’s case to the jury – conviction appeal dismissed   CRIMINAL LAW – appeal – Crown appeal against sentence – whether sentence manifestly inadequate - whether misapplication of principle – aggregate sentence unreasonable or unjust – residual discretion - appeal against sentence upheld – appellant re-sentenced
Legislation Cited:	Copyright Act 1968 (Cth) Crimes (Sentencing Procedure) Act 1999 (NSW) Crimes Act 1900 (NSW) Crimes Act 1914 (Cth) Criminal Appeal Act 1912 (NSW) Criminal Code 1995 (Cth) Criminal Procedure Act 1986 (NSW) Financial Transaction Reports Act 1988 (Cth)
Cases Cited:	Ansari v R [2007] NSWCCA 204; (2007) 70 NSWLR 89 Aravena v R [2015] NSWCCA 288 Barbaro v The Queen [2014] HCA 2; (2014) 253 CLR 58 Bugmy v The Queen [2013] HCA 37; (2013) 249 CLR 571 Cahyadi v The Queen [2007] NSWCCA 1; (2007) 168 A Crim R 41 Calleija v Regina [2012] NSWCCA 37; (2012) 223 A Crim R 391 Carroll v The Queen [2009] HCA 13; (2009) 254 CLR 259 Chen v R [2009] NSWCCA 66 Chen v R [2010] NSWCCA 224 Cheung v The Queen [2001] HCA 67; (2001) 209 CLR 1 Chia Gee v Martin [1905] HCA 70; (1905) 3 CLR 649 CMB v Attorney General for NSW [2015] HCA 9; (2015) 317 ALR 308 Dela Cruz v R [2010] NSWCCA 333 Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321 Director of Public Prosecutions (Cth) v Gregory [2011] VSCA 145; (2011) A Crim R 147 Director of Public Prosecutions v Shannon [1975] AC 717; (1974) 59 Cr App Rep 250 El-Chaar v R [2007] NSWCCA 16 Elias v The Queen; Issa v The Queen [2013] HCA 31; (2013) 248 CLR 483 Green v The Queen; Quinn v R [2011] HCA 49; (2011) 244 CLR 462 Griffiths v The Queen [1977] HCA 44; (1977) 137 CLR 293 Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 House v The King [1936] HCA 40; (1936) 55 CLR 499 JM v R [2014] NSWCCA 297 Jones v The Queen [1997] HCA 56; (1997) 191 CLR 439 Kentwell v The Queen [2014] HCA 37; (2014) 252 CLR 601 Li Wan Quai v Christie [1906] HCA 42; (1906) 3 CLR 1125 Libke v The Queen [2007] HCA 30; (2007) 230 CLR 559 M v The Queen [1994] HCA 63; (1994) 181 CLR 487 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 MFA v The Queen [2002] HCA 53; (2002) 213 CLR 606 Milne v R [2012] NSWCCA 24 Mulato v R [2006] NSWCCA 282 Nahlous v R [2010] NSWCCA 58; (2010) 77 NSWLR 463 O'Meara v R [2009] NSWCCA 90 Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 R v Anthony James Dickson (No 18) [2015] NSWSC 268 R v Darby [1982] HCA 32; (1982) 148 CLR 688 R v Dickson; R v Issakidis (No 1) [2014] NSWSC 1068 R v Dickson; R v Issakidis (No 9) [2014] NSWSC 1460 R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595 R v Dickson; R v Issakidis (No 15) [2014] NSWSC 1861 R v Dunn (No 9) [2014] WASC 61 R v Huang; R v Siu [2007] NSWCCA 259; (2007) 174 A Crim R 370 R v Ly [2014] NSWCCA 78 R v MAK; R v MSK [2006] NSWCCA 381, (2006) 167 A Crim R 159 R v Moussad [1999] NSWCCA 337; (1999) 152 FLR 373 R v Pham [2015] HCA 39; (2015) 90 ALJR 13 Redfern v R [2012] NSWCCA 178; (2012) 228 A Crim R 56 Savvas v The Queen [1995] HCA 29; (1995) 183 CLR 1 Schembri v The Queen [2010] NSWCCA 149; (2010) 78 ATR 159 Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573 SKA v The Queen [2011] HCA 13; (2011) 243 CLR 400 Subramanian v R [2013] NSWCCA 159 Thorn v R [2009] NSWCCA 294; (2009) 198 A Crim R 135 Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584
Category:	Principal judgment
Parties:	Anthony Dickson Regina
Representation:	Counsel: Ms R Seiden SC with Mr P Lowe and Ms T Davy (Appellant) Mr M McHugh SC with Mr S Flood (Crown)   Solicitors: Tully & Chiper Lawyers (Appellant) Commonwealth Director of Public Prosecutions (Crown)
File Number(s):	2012/140639
Publication restriction:	Restricted to the parties pending the finalisation of the trial of Michael Issakidis
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Criminal Law Citation: R v Anthony James Dickson (No 18) [2015] NSWSC 268 Date of Decision: 20 March 2015 Before: Beech-Jones J File Number(s): 2012/140639

Judgment

1. MACFARLAN JA: I agree with the orders proposed by Schmidt and Wilson JJ and their Honours' reasons.

2. SCHMIDT AND WILSON JJ:

The appeal against conviction

3. After a trial before Beech-Jones J and a jury of 12 in the Supreme Court of New South Wales, between 21 August and 22 December 2014, Anthony Dickson, referred to for convenience throughout as the appellant (although he is also the respondent to a Crown appeal against sentence, as will be seen below), was convicted of two offences, being counts 1 and 6 of the indictment presented against him. As counts 2 – 5 were substantive charges brought in the alternative to count 1, no verdict was taken on those counts and they are not discussed further. Counts 1 and 6 were in the following terms:

Count 1: that he between about 15 November 2005 and 2 December 2011 at Sydney in the state of New South Wales and elsewhere, did conspire with Michael Issakidis to dishonestly cause a loss, or to dishonestly cause a risk of loss, to a third person, namely the Commonwealth, knowing or believing that the loss would occur or that there was a substantial risk of the loss occurring, contrary to s 135.4(5) of the Criminal Code (Cth).

Count 6: that he between about 15 November 2005 and 26 June 2012 at Sydney in the state of New South Wales and elsewhere, did conspire with Michael Issakidis to deal with property of a value of $1 million or more believing it to be the proceeds of crime, contrary to ss 11.5(1) and 400.3(1) of the Criminal Code (Cth).

4. Count 1 involved a complex ‘tax fraud’ with net losses to the Commonwealth in excess of $100 million, whilst count 6 related to a money laundering offence wherein large sums of money were sent across the globe disguised as financial transactions, with funds later returned to Australia.

5. The appellant was sentenced in relation to each offence on 20 March 2015. In relation to count 1, a sentence of imprisonment for 7 years and 6 months was imposed, to date from 22 December 2014 and expiring on 22 June 2022. For count 6, a sentence of 9 years imprisonment was imposed, to date from 22 December 2016 and expiring on 22 December 2025. A single non-parole period of 7 years expiring on 22 December 2021 was fixed, pursuant to s 19AB(1) of the Crimes Act 1914.

6. The appellant appeals and, insofar as it is necessary to do so, seeks leave to appeal against his conviction for each of the offences, advancing six grounds:

1. The prosecution changed its case during the trial which occasioned a miscarriage of justice.

2. The trial miscarried because there was unreasonable evidence to convict Michael Issakidis.

3. The trial judge erred in deciding in R v Dickson; R v Issakidis (No 1) [2014] NSWSC 1068 that count 6 ought not to have been stayed.

4. Count 1 is duplicitous.

5. His Honour failed to direct the jury in relation to count 1 that the Crown had to prove that there was a causal nexus between the element of dishonesty and the intention to cause a loss/ risk of loss.

6. The trial judge erred in failing to direct the jury that it was an indispensable intermediate fact to be proved beyond reasonable doubt before the jury could convict the appellant that they be satisfied that:

1. Neumedix did not have the intention to pay for the acquisition of intellectual property; and

2. Neumedix did not have the capacity to pay for the acquisition of intellectual property.

7. The Crown appeals against the asserted inadequacy of the sentences imposed upon the appellant. That appeal is addressed below.

The Facts of the Offences

8. The factual circumstances surrounding the offences are complex. It is necessary to set out the details of them prior to turning to consideration of the appeal proper. Both the appellant and the Crown agreed that the trial judge provided a comprehensive summary of the evidentiary basis upon which the jury had found the appellant guilty of the two charges in his Honour’s remarks on sentence (R v Anthony James Dickson (No 18) [2015] NSWSC 268). It is thus convenient to commence with that summary, which provides a succinct account of the complex arrangements which lay at the heart of the Crown’s case.

9. After noting the charges found proven and that the appellant’s co-conspirator, Michael Issakidis, had been discharged during the trial (for the reasons given in R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595), his Honour turned to the background to the charges. He began by noting that Neumedix Health Australasia Pty Ltd (“Neumedix” or "NHA"), of which the appellant and Mr Issakidis were the two directors, was incorporated on 9 March 2006. His Honour described the essence of the Crown case as follows:

“9    … [O]n count 1, as accepted by the jury, was that the offender and his co-conspirator agreed to cause NHA to make false depreciation claims in its tax returns of many hundreds of millions of dollars. The depreciation claims were in respect of the alleged cost of acquisition by NHA of certain medical technologies, even though it was agreed that no such cost was to be incurred. The offender and his co-conspirator agreed to this so as to enable NHA to avoid incurring tax liabilities on income it was deemed to have received as the owner of units in a number of trusts…

10   … [O]n count 6, as accepted by the jury, was that the offender and his co-conspirator agreed to deal with the "proceeds of crime" being the amounts standing in various bank accounts that represented the cash distributions from the trusts to NHA. The jury accepted the Crown's contention that these funds were the "proceeds of crime" because they were derived from the conspiracy the subject of count 1. This was so because, to the knowledge of the offender and his co-conspirator, the funds would not be required to meet NHA's tax liabilities as they would be eliminated by false depreciation deductions and the funds would not be required to make payments on the agreements the subject of the claims for depreciation as no genuine obligation to make those payments would be incurred (see R v Dickson (No 16) [2014] NSWSC 1862 at [19]). The offender and his co-conspirator agreed to cause the funds to be distributed offshore to various accounts controlled by entities associated with the offender and then repatriated to Australia, largely for their own enrichment.”

10. His Honour then turned to the circumstances of the offences by reference to the facts which were either not in issue, those necessarily found by the jury, or matters of which he was satisfied beyond reasonable doubt, and which were consistent with the jury's verdict. He commenced with count 1, describing, at [12], the “…financial transactions that generated assessable income for NHA, NHA's dealings with the inventors of medical technologies, the events surrounding the lodgment of NHA's tax returns and the audit by the Australian Taxation Office ("ATO"), and aspects of the offender's case.” His Honour found:

“The financing transactions

13   The offender is a highly experienced tax and finance professional. During the course of 2005 and 2006 he pursued negotiations with the ANZ to pursue a financing transaction that had the following essential features. One of the ANZ's clients sold an asset to a partnership consisting of the trustee of a unit trust, namely ANZ Investment Holdings Ltd, and the client. The ANZ provided debt financing to fund the purchase. The asset was leased back for use in the client's business. The trust generated assessable income from the lease payments although most of that income was used to pay debt, interest and fees. NHA acquired 100% of the units in the unit trust. Under the relevant taxation legislation all of the net income of the trust was to be treated as taxable income of NHA although it did not receive a distribution of those amounts as they were used to pay down the ANZ's debt. Instead NHA received a cash distribution from the trust of 9% of the taxable income of the trust.

14   The result of each such transaction was that ANZ's clients received an injection of cash from selling their asset. The client paid rent to use the asset, however those payments were tax deductible. The rental cost was lower than it otherwise would have been because NHA was effectively contributing part of its tax losses to make the transaction more commercially attractive. ANZ received interest on its loan to the trustee which was paid by the lease payments and fees for facilitating the transaction.

15   As noted, it was agreed that, in return for it acquiring the obligation to declare the entirety of the taxable profit of the trust in its tax return, NHA received cash payments representing 9% of each trust's taxable profit. In order for its participation in these transactions to make any commercial sense for NHA it had to have available to it very large amounts of tax losses to offset the taxable income it was required to declare. The offender repeatedly assured the ANZ that those deductions had been, or would be, generated by NHA assuming obligations to pay very large amounts to acquire certain medical technologies. ANZ was assured that NHA was in effect selling tax losses arising from large depreciation expenses on medical technology to acquire funding. As I will explain, the true position was that no such obligations were intended to be incurred and none were incurred. Instead the offender and his co-conspirator agreed to use the bulk of the cash distributions for their own purposes.

16   In total four such transactions were arranged involving three of the ANZ's clients, Bluescope Steel, Gunns and Incitec. The relevant trust deeds were executed on 30 August 2006, 17 December 2006, 1 August 2008 and 21 September 2009. The first cash distribution to NHA was made on 26 October 2006 when $14.3 million was sent to NHA. Overall a total of $68,405,000.00 was distributed to NHA by the four trusts between that date and 24 December 2009. As the ratio of cash distributed to deemed tax income was 9:100 it follows that it was envisaged that in excess of $750 million in assessable income would be notionally distributed to NHA and declared in its tax returns over time. As I will explain, just over $378 million was so "distributed" in the financial years 2007 to 2010, and declared in NHA's tax returns.

The medical technologies

17   Throughout the period of the two conspiracies NHA presented itself as a business involved in the acquisition and exploitation of medical technology. It employed staff and had office premises. The evidence revealed that the offender, his co-conspirator and other staff employed by NHA had a number of dealings with various inventors of medical technology. It was not the Crown case that the entirety of NHA's business was a facade or that the medical technologies were not genuine. Instead the Crown case concerned the means by which NHA was alleged to have acquired three particular medical technologies as they were the subject of the depreciation claims in NHA's tax returns for the financial years 2007 to 2010.

18   The first medical technology was a cancer vaccine known as "Genvax". It was developed by Dr Stephen Ralph. Throughout 2006 the offender and his co-conspirator met with Dr Ralph and discussed the terms upon which the technology might be acquired and exploited. At the trial a variety of executed and unexecuted agreements which purported to transfer the rights to this technology to various entities were tendered. With the exception of those that were signed by Dr Ralph, the Crown case was that it could not and did not have to demonstrate when they were executed as the offender was engaged in the process of manufacturing agreements from time to time to suit his and his co-conspirator's purposes. I will return to address this, but it suffices to state that the Crown succeeded in establishing that proposition beyond reasonable doubt.

19   On or about 9 January 2007, Dr Ralph and his company, Genvax Pty Ltd, executed an agreement assigning the intellectual property rights in Genvax to Athena Health Patents Incorporated ("Athena") for 50% of the gross revenues on commercialisation. This is not the relevant assignment the subject of the false depreciation claims that were later made in NHA's tax returns. On or about 15 January 2007 a loan agreement was executed in which Athena agreed to lend to Genvax Pty Ltd up to $1.8million on a non-recourse basis for the development of Genvax. A project deed concerning the development and exploitation of Genvax was executed on or about the same day.

20   Athena was incorporated in the Cayman Islands. It was originally named Neumedix Biotechnology International Limited but it changed its name to Athena in January 2007. At the trial there was a dispute over the origins of this company and who controlled it. The offender said it was formed by his brother, John Dickson, in 2005 and that John Dickson owned the shares. In contrast, John Dickson stated that he never negotiated for, worked for or was involved in the day-to-day management of Athena.

21   There was a sustained attack on John Dickson's credit and his evidence generally. On this issue and the other matters noted in this judgment I have no doubt the jury accepted his evidence. I am otherwise satisfied that it should be accepted. It accords with the balance of the evidence at the trial. For example on 12 January 2007 the offender sent an email to the firm in Cayman Islands that acted as the registry for Athena directing that its name be changed and that two corporate entities be added as directors. Later in 2007 the offender and his co-conspirator prepared and amended drafts of correspondence on Athena's letterhead. I am satisfied beyond reasonable doubt that at all relevant times the offender controlled Athena.

22   The assignment from Dr Ralph and Genvax Pty Ltd to Athena was executed on behalf of Athena by a solicitor purporting to act under a power of attorney executed by one of Athena's corporate directors, Flying Dragon Group International Ltd ("Flying Dragon"). John Dickson was a director of Flying Dragon but he denied that he executed the power of attorney. I am satisfied beyond reasonable doubt that he did not and that his signature was forged and placed on the document.

23   The second item of medical technology was a device placed on the upper part of the spine during surgery known as the "CG Surgical Clip" ("CGS"). It was developed in New Zealand. On or around 2 March 2007 a representative of CG Surgical Limited executed an assignment of the intellectual property in CGS to Athena in exchange for 50% of the proceeds of commercialisation. On or about the same date he signed a loan agreement on behalf of CG Surgical with Athena under which the latter agreed to advance up to NZD$825,000.00 for the development of the technology. Shortly after these documents were executed a commercial dispute broke out so that in the end result only a small portion of the funds were advanced and there was almost no further development of the CGS.

24   The third item of technology was a diagnostic test for colorectal cancer known as "Cologene". It was developed by Dr Jenkins from the United Kingdom. Dr Jenkins gave evidence via videolink. In his evidence Dr Jenkins was shown various assignment agreements bearing his name and the name of his company, Armedillo Health Ltd ("Armedillo") which he produced but which were unsigned. He said that he recalled he signed various documents on or about 2 November 2007 at his lawyer's offices. I am satisfied that he signed them sometime in November 2007. Four of these documents are of particular relevance.

25   One of the agreements produced by Dr Jenkins was an assignment of the rights in Cologene from Armedillo to Athena in exchange for 40% of the proceeds of commercialisation. Another was a loan agreement between Athena and Armedillo under which an amount of up to 1.3 million pounds sterling was agreed to be lent for the development and exploitation of Cologene.

26   The other two agreements were assignments by Athena. They were not the subject of much attention in the trial but, as I am required to make some additional findings, it is appropriate to note them at this point. Under one of these agreements Athena purported to assign the rights for Cologene to NHA for the territory of Europe (other than the United Kingdom), USA, Mexico, Brazil and South Africa for a consideration of 200 million pounds sterling. Under the other agreement Athena purported to assign the rights to Cologene for the rest of the world to Neumedix Health New Zealand Ltd for 200 million pounds sterling. The significance of these agreements is that they are fundamentally inconsistent with the assignment agreement for Cologene provided to the ATO which was said to justify the depreciation claims for the purported acquisition of Cologene by NHA.

The tax returns and the tax audit

27   NHA's tax return for the 2007 financial year was lodged on 26 February 2009. It was signed by the offender. The return disclosed $47,837,698.00 in income from the unit trusts. However this was offset by various expenses the largest of which was a claim for $76,071,054.00 in depreciation expenses. The overwhelming bulk of that claim consisted of depreciations expenses in respect of the cost of the alleged acquisition by NHA of the intellectual property in Genvax and CGS from Athena.

28   NHA's tax return for the 2008 financial year was lodged on 17 September 2009. It was also signed by the offender. The return disclosed $77,229,906.00 in income from the unit trusts but claimed $98,470,850.00 in depreciation expenses. The overwhelming bulk of the latter claim consisted of claims for depreciations expenses in respect of the cost of the alleged acquisition by NHA of the intellectual property in Genvax, CGS and Cologene from Athena.

29   The lodgement of these returns led to the automatic generation of tax assessments which accepted the claims that were made. As NHA recorded a tax loss it did not incur any tax debt. However the returns attracted the attention of officers of the ATO. The ATO commenced an audit.

30   In February 2010 the ATO wrote to NHA making a very broad request for the production of documents. On 15 February 2010 the offender wrote to the ATO seeking an extension of the time for compliance. Shortly afterwards there was a telephone conversation between the offender and an ATO officer, Mr Chris Harvey. The offender claimed he told Mr Harvey that he did not have executed versions of some transaction documents as they were overseas. He claimed Mr Harvey agreed to the offender's suggestion that the latest version of the transaction documents be printed off his computer and provided to the ATO. Mr Harvey denied this. The significance of this aspect of this conversation, if it occurred, is it provides an explanation for why the offender did not provide the ATO with executed copies of the assignment agreements and how it was that he was able to supply them in his case at the trial although there were material differences.

31   I have no doubt the jury accepted Mr Harvey's evidence. To the extent necessary I am satisfied beyond reasonable doubt that Mr Harvey's denial should be accepted. Amongst other matters it is supported by his file note of the conversation. The offender's version of the conversation is not supported by a subsequent email sent by him on 15 March 2010.

32   Between March and May 2010 the offender caused to be provided to the ATO fourteen folders of documents said to be responsive to the ATO's request and supportive of the amounts stated in NHA's 2007 and 2008 tax returns including the large depreciation claims. Included in this material were three unsigned agreements each of which purported to record an assignment of the intellectual property in one of the three medical technologies from Athena to NHA (the "Genvax Assignment Agreement", the "CGS Assignment Agreement" and the "Cologene Assignment Agreement"). Each of them had a handwritten annotation on the front indicating that it represented the executed copy. I will return to address the terms of these agreements later in this judgment but the combination of the provision of these agreements with their annotations, the contents of the tax returns and various unsigned minutes of NHA that were provided to the ATO recording the entry into of the agreements, amounted to an unambiguous assertion to the ATO that NHA had acquired the three technologies on the terms set out in those agreements.

33   The ATO's letter of 10 February 2010 requested NHA provide, amongst other documents, any valuations of the relevant medical technologies that supported the amounts claimed for depreciation in NHA's tax returns. Included in the material supplied to the ATO were three documents purporting to be valuations of the medical technologies by the Karkalla Biotechnology Group ("KBG"). Those valuations stated that the value of Genvax was USD$627 million as at December 2005, the value of CGS was between USD$103 million and USD$119 million as at February 2006 and the value of Cologene was USD$2.541 billion as at November 2007. Each of the reports had a signature and underneath that the name "Peggy Wong, President Karkalla". Elsewhere in each document she was described as "Peggy Wong PHD President Karkalla".

34   The Crown contended, and the offender strenuously denied, that these valuation reports were concocted by, or at the direction of, the offender and that the Dr Peggy Wong referred to either did not exist, or if she did, she had no connection to the reports. There was a vast amount of documentary material to support the Crown's contention. This included computer records pointing to the documents and their logo being created well after the dates referred to in the reports; documents indicating that the offender controlled various companies named "Karkalla"; the hosting of a contact email address for Peggy Wong by NHA in Australia, although it was alleged that she was based overseas; and numerous other documents allegedly signed off by Peggy Wong that inconsistently attributed to her a multitude of titles and job descriptions. In support of his case the offender gave evidence of his dealings with Peggy Wong and called two witnesses including the offender's other brother, Paul Dickson, who said they had met her. The jury clearly accepted the Crown's contention. To the extent necessary I am also satisfied beyond reasonable doubt that the reports were concocted by, or at the direction of, the offender. The use by the offender of false identities was one aspect of his modus operandi in carrying out the two conspiracies that he was convicted of.

35   On or about 17 May 2010 the offender caused NHA's tax return for the 2009 financial year to be lodged electronically. The return declared $123,841,532.00 in assessable income from the unit trusts and claimed $106,689,541.00 in depreciation expenses. On 1 September 2011 NHA's tax return for the 2010 financial year was lodged. It was signed by the offender. The return declared $129,474,513.00 in assessable income from the unit trusts and claimed $109,021,139.00 in depreciation expenses. The overwhelming bulk of the depreciation claimed in each return was referable to the alleged cost of the acquisition of the three medical technologies under the assignment agreements that I have referred to. Further, when those depreciation claims were combined with carried forward losses from prior years which were in turn attributable to depreciation claims in those years, it meant that the tax assessments that were automatically generated did not create a tax debt in favour of the Commonwealth.

36   On 15 February 2012 the offender caused NHA to lodge amended returns for each of the financial years 2007 to 2010. The income declared in the returns was $18,550,000, $77,229,906, $30,868,000 and $129,474,513 respectively. The first and third of these figures were erroneous. The correct amounts were in the order of those disclosed in the 2007 and 2009 initial returns respectively. The amount of deprecation claimed in each amended return was $76,888,893, $118,570,332, $104,042,825 and $102,825,040 respectively. The total of these amounts is just in excess of $402 million. An exhibit tendered in the offender's case attributes approximately $386 million of the total amount claimed for depreciation as referable to the assignment agreements. While there are reasons to doubt the calculations in that exhibit, the difference between that and the total of $402 million is immaterial for the purposes of sentencing. As I have stated, an amount in excess of $378 million was declared as income earned by NHA from the unit trusts.

37   In or around March or April 2012 search warrants and notices under s 263 of the income Tax Assessment Act 1936 (Cth) ("ITAA 1936"), were executed on the offender's premises as well as a number of other places (see R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595 at [16]ff). He was arrested in April 2012. Since that time the ATO has issued amended taxation assessments for NHA, and proceedings under the Proceeds of Crime Act 2002 (Cth) have been commenced against the offender.” [Footnotes omitted]

11. His Honour then turned to the appellant’s evidence that he was an employee of Rand Stone Private Equity Partnership ("Randstone"), a consultant to an entity known as the "HFAC Harmony Biotechnology Private Equity Partnership" ("HFAC"), with HFAC standing for "Health for all Children". The appellant said that HFAC was a Cayman Islands based private equity partnership, originally formed between two wealthy entrepreneurs, which invested in medical technology and similar initiatives designed to improve the health of all children worldwide. He acted as HFAC’s "steward" for various medical technologies.

12. The appellant also said that Athena had acquired intellectual property rights for the three technologies as the undisclosed agent for HFAC; that the recipient of funds from NHA, Dampier Finance Asia Pacific Ltd ("Dampier Finance"), was HFAC's nominated receiving agent for the payment of the amounts owing by NHA under the three assignment agreements with Athena; that NHA moved funds overseas in order to meet its obligations under those agreements; and that the subsequent routing of those funds, through Hong Kong and back to Australia, occurred as a result of HFAC directing him to transfer those funds, and "invest" them in Australia, by allegedly lending various amounts to Mr Issakidis and otherwise paying the appellant his remuneration, under his arrangements with Randstone.

13. His Honour then dealt with various documents tendered by the appellant, said to evidence these arrangements, including executed versions of the Genvax assignment agreement and the Cologene assignment agreement provided to the ATO and which referred to HFAC as a party. His Honour observed, at [41], that none of the assignment agreements provided to the ATO referred to HFAC. His Honour noted:

“42   The Crown submitted to the jury that this evidence was false and the documents said to support it were fabricated after the offender's arrest. I will not repeat all the points made by the Crown but they included the fact that none of the documents provided to the ATO or seized during the execution of the search warrants provided any support for this evidence, save for one deed that bore the date March 2006 but which appears to have been prepared well after. Critically none of the assignment agreements between the inventors and Athena that were retained by the inventors or the assignment agreements between Athena and NHA provided to the ATO referred to HFAC. In any event the jury were instructed, inter alia, that, if there was a reasonable possibility that the version presented by the accused was true, then the Crown case failed. It follows from the jury's verdict that it rejected even the reasonable possibility that the accused's version was true and otherwise accepted that the supposedly corroborative documents were fabrications.”

14. His Honour made further findings in relation to the assignment agreements, including noting that the jury had been given directions as to circumstantial evidence, in accordance with Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573. The jury was also directed that they could not be satisfied beyond reasonable doubt of the existence of the agreement, the subject of count 1, unless they were first satisfied beyond reasonable doubt that NHA "did not incur any obligation to pay for the intellectual property assignment under at least one of the agreements ... which was the basis [for] the depreciation claimed in NHA's tax returns” (T246: 16/12/2014). His Honour also outlined the directions of law given to the jury in relation to the principles concerning sham agreements (at [44] – [46]).

15. His Honour noted that the Crown case on sentence was that the Court should find that all three agreements were shams and that the appellant’s case was that the Court should find that only the CGS Assignment agreement was a sham. He concluded that having found that Athena was under the effective control of the appellant, the relevant subjective intentions to consider were those of the appellant and Mr Issakidis as they were on both sides of the transaction (at [48]).

16. At [49], his Honour considered an “especially powerful part” of this aspect of the Crown case to be various handwritten and typed documents which had passed between the appellant and Mr Issakidis sometime in late 2006 and then in July and September 2007. The documents concerned the distribution of certain interest earned by NHA on amounts received from the trusts, with the underlying assumption that they had agreed to divide up the bulk of the funds received from the trusts between themselves, with a portion to be paid to a third person and to NHA, to pay its various expenses, but not the amounts allegedly required to be paid under the assignment agreements with Athena. At [50] his Honour found the significance of this material to be that:

“… in 2007 and 2008 a number of installments were allegedly due under those assignment agreements. The only source of funds that NHA had to pay for them was the cash distributions from the trusts yet these communications suggest that neither the offender nor his co-conspirator contemplated using them for that purpose. These communications strongly support an inference that that was so because they knew that those installments were not payable.”

17. His Honour also observed:

“51   Otherwise, the Crown contended that the fundamental assumption of these documents was that NHA would not only have no tax liabilities, it would also not have any liability to pay the amounts said to be owing under the assignment agreements which gave rise to the depreciation claims that avoided those liabilities. This material was powerful evidence in support of the Crown case on count 1 because while NHA might legitimately achieve one of those aims it could not legitimately achieve both.”

18. His Honour then noted that there were two relevant versions of the Genvax assignment agreement from Athena to NHA dated 15 January 2007. The first had been provided to the ATO and the version that included HFAC as a party had been tendered in the appellant’s case. Given his earlier findings, his Honour concluded that the second version could be ignored. The first agreement purported to record, at [52]:

“.... the worldwide sale of the rights to Genvax from Athena to NHA for approximately $190 million payable over five years as well as for payment of the "fair market value" for the period thereafter. The first three payments required were $27.15million on 13 April 2007, $2.46 million on 30 June 2008 and $12.77 million on 1 July 2008. The agreement was structured so that NHA could elect to avoid the assignment at the end of each installment period and in doing so only assume the obligation to pay the installments referable to that period.”

19. His Honour identified six matters about this agreement:

“53   …First there is the point I have just referred to, namely the communications between the offender and his co-conspirator in 2006 and 2007 concerning the division of the funds distributed from the trusts point to there being no intention to pay the amounts allegedly owing under the Genvax Assignment agreement. Otherwise the amounts payable under this agreement (and the other agreements) were very large yet NHA had not even the remotest prospect of obtaining access to that level of funding in the short term while the Genvax technology was still at an early stage of development.

54   Second, clause 14.5.2 of the Genvax Assignment agreement contained a clause disclaiming any common ownership of Athena and NHA and asserting that the agreement was negotiated on an arm's length basis. This clause was clearly false, and false to the knowledge of the offender, in that he was both sides of the transaction.

55   Third, between 6 and 8 February 2007 the offender's personal assistant sent a number of facsimiles to Barclays Bank enclosing a number of agreements including a signed agreement in which Athena purported to sell to NHA the worldwide rights for Genvax for $18 million and another agreement in which Athena purported to lend $18 million to Dampier Finance. The documents were sent to Barclays because it was querying the true source of the funds that Dampier Finance had received from NHA and was reluctant to act on instructions it had received to send the funds to Hong Kong. The offender effectively represented that the funds were the proceeds of a loan from Athena to Dampier Finance and that Athena was entitled to the funds because it had sold Genvax to NHA for $18 million. Those assertions were fundamentally inconsistent with the terms of the Genvax Assignment agreement provided to the ATO.

56   Fourth, in late 2007 the offender retained Walsh & Walsh accountants to prepare accounts for NHA. A memorandum and an assignment agreement for Genvax that emanated from the offender's email address was sent to the accountants for the purpose of their preparing the accounts. [30] This material advised Walsh & Walsh that the entity that assigned the intellectual property to NHA was not Athena but another company, Karkalla International Holdings ("KIH"), and that it did so on different terms to those set out in the Genvax assignment agreement even though the latter bore a date eleven months prior.

57   The offender denied that he sent the emails. He claimed they were sent by another person in his office. His denials were unbelievable and no doubt had a devastating effect on his creditability in the eyes of the jury. The emails were clearly drafted by him. He later prepared and signed accounts for NHA that reflected the effect of those agreements.

58   Fifth, the Genvax Assignment agreement was created much later than the date stated on the agreement, namely 15 January 2007, but it was backdated. If the agreement had been created on or about the date it bore it would have been sent to Walsh & Walsh. Instead, just prior to lodging NHA's tax return for the financial year 2007, the offender caused NHA's accounts to be completely rewritten to remove the effect of the agreements previously sent to Walsh & Walsh, and substituted the effect of the Genvax Assignment agreement and the CGS Assignment agreement. This appears to represent the most likely time at which those agreements, or some draft thereof, was first created.

59    Sixth, the other findings noted above point to the absence of any intention on the part of the offender to make NHA legally obliged to pay Athena the amounts stated in the Genvax assignment agreement. In particular his submission of concocted valuations to the ATO reflects a dishonest and fraudulent intent on his part.”

20. His Honour then turned to the CGS assignment agreement which had been provided to the ATO, which was also unsigned, observing:

“60 … [I]t bore the date 5 March 2007. It purported to record an assignment of the worldwide rights to the intellectual property in CGS for a total consideration of $60 million payable over four years, together with an agreement to pay the "fair market value" thereafter. A payment of $2.25 million was due on 15 April 2007, and a payment of $4,235 million was due on 1 July 2008. This agreement also purported to enable NHA to avoid the assignment at the end of the instalment periods. The first, second and fifth to sixth points made in relation to the Genvax Assignment agreement also apply to this agreement. In relation to the fourth point, the memorandum sent to Walsh & Walsh in November 2007 advised them that the intellectual property in CGS had been assigned on completely different terms to those set out in the CGS Assignment agreement. The combination of the material sent to Walsh & Walsh suggested that it had been assigned by KIH to NHA and not by Athena[.]

61   Otherwise I note two further points in relation to the CGS Assignment agreement. First, as noted, shortly after March 2007 when the representatives of CG Surgical signed the assignment to NHA a dispute broke out, and the development of the technology ceased. Despite this, NHA apparently continued to incur obligations to pay the instalment amounts under the CGS Assignment agreement.

62 Second, a signed agreement similar to the CGS Assignment agreement was sent to Walsh & Walsh at the time NHA's accounts were re-written in early 2009 [33]. This version did not include clause 14.5.2 discussed above. Its inclusion in the version sent to the ATO is consistent with the offender seeking to deceive the ATO into accepting that the CGS Assignment agreement was negotiated at arm's length.” [Footnotes omitted]

21. His Honour then turned to the Cologene assignment agreement presented to the ATO, which was also unsigned and bore the date 30 November 2007, observing:

“63   …It purported to record an assignment of the worldwide rights to the intellectual property in Cologene for a total consideration of USD$160 million payable over a period of three years together with an agreement to pay the "fair market value" thereafter. The first three payments required were $5.75 million on 1 July 2008, $15 million on 15 December 2008 and $5 million on 15 February 2009. The first, second and fifth to sixth points made in relation to the Genvax Assignment agreement apply to this agreement.

64   With the fourth point (at [56]), the agreements sent to Walsh and Walsh in early 2008 included a Deed of Option dated 6 March 2007 which purported to enable NHA to acquire the intellectual property for Cologene from KIH at its election. This was inconsistent with the Cologene Assignment agreement under which NHA purported to acquire the intellectual property in Cologene from Athena in November 2008.

65   Further, included in the documents tendered on behalf of the offender was a signed version of the Cologene Assignment agreement which referred to HFAC as a party. As noted it follows from the jury's verdict that this version is a concoction. Further, it should be noted that the Cologene Assignment agreement presented to the ATO was completely inconsistent with the two assignment agreements concerning the sale of rights to Cologene previously noted (at [26]).”

22. His Honour then turned to the loss, or risk of loss, resulting from count 1. He considered that two distinct inquiries were required to be undertaken. The first concerned the extent of the loss or risk of loss which the appellant intended to be caused in giving effect to the agreement the subject of count 1. The second concerned the extent of the loss, if any, in fact caused by the appellant’s conduct the subject of this count.

23. His Honour concluded, at [68], as to the extent of the loss or risk of loss intended to be caused, that the appellant’s conviction evidenced that the jury was satisfied beyond reasonable doubt that he and Mr Issakidis intended to dishonestly cause a loss or a risk of loss to the Commonwealth pursuant to the agreement they had formed, and that each knew or believed that the loss would occur, or that there was a substantial risk of the loss occurring. His Honour considered that, in assessing the criminality involved in count 1, it was necessary to consider the scope of their agreement and an adoption of the hypothesis that their agreement was successfully implemented.

24. As to the extent of the loss in fact caused by the appellant’s conduct, which arose to be considered on sentence pursuant to s 16A(2)(e) of the Crimes Act 1914 (Cth), his Honour said that this:

“70 … involves an inquiry into the loss or damage that was in fact occasioned by the commission of count 1. As is evident from what I have stated, the completion of the agreement the subject of count 1 was ultimately frustrated by its detection by the ATO and the Australian Federal Police ("AFP"). Their actions ameliorated the occasioning of loss to the Commonwealth in that tax returns for the financial years after 2010 claiming false deductions were not lodged, amended tax assessments have been raised and some of the proceeds of the money laundering have been seized. An assessment of the loss that has in fact resulted from the commission of count 1 must take into account those facts. However those matters are irrelevant to the first inquiry…”

25. After referring to the directions which the jury had been given in relation to the concepts of “loss”, which had reflected the applicable tax legislation and the evidence as to NHA’s tax returns, and “tax debts”, which he observed, at [72], was “…a form of property being a chose in action. If no such debt arose because of a false depreciation claim then the Commonwealth did not obtain property it might otherwise ‘get’.” His Honour went on to say that:

“73   The agreement entered between the offender and his co-conspirator was to claim false depreciation deductions. It follows from the jury's verdict and the above findings that false claims were contemplated in respect of the three technologies. Thus the offender and his co-conspirator intended NHA to claim false depreciation expenses in respect of those technologies, intended they would be accepted and that, as a consequence, no tax debt would arise in favour of the Commonwealth because the false depreciation expenses would be more than sufficient to offset any tax debt that might otherwise arise from NHA's deemed receipt of income from the trusts.”

26. His Honour then noted that under the agreement the subject of count 1, between $386 million and $402 million in false deductions was claimed and that the total amount payable for the first three to five years was approximately $450 million. For reasons there given, he did not take into account further provision made as to “fair market value”. His Honour, at [74], was, however, satisfied beyond reasonable doubt that the remainder of the instalments under the assignment agreements was intended to be claimed, other than the amounts said to be payable for fair market value.

27. His Honour also observed that:

“75   Given that the object of the conspiracy was to eliminate NHA's tax liabilities from its receipt of income from the trusts, it may be that the true scope of the intended loss or risk of loss was the elimination of any liability on the entirety of the anticipated distributions from the trusts; ie $750 million. However, in the absence of the Crown pointing to material that suggested that deductions based on either the alleged obligation to pay fair market value or other sham agreements were contemplated, I am not satisfied beyond reasonable doubt that the scope of the agreement between the offender and his co-conspirator extended that far.

76   Given that the anticipated total income from the four trusts was $750 million I am satisfied that, over time, it was intended that NHA would be able to apply the entirety of the approximate $450 million in false deductions to offset declared income. As the corporate tax rate was and is 30% it follows that I am satisfied beyond reasonable doubt that the extent of the loss or risk of loss that was intended to be caused to the Commonwealth was 30% of approximately $450 million or approximately $135 million. Clearly the fraud sought to be perpetrated was a very large one.”

28. His Honour then turned to the actual loss to the Commonwealth resulting from count 1, following the ATO’s issue of the amended tax assessments for NHA for the relevant financial years, which he noted NHA had objected to and could lead to a review application in the Administrative Appeals Tribunal or the Federal Court. He concluded, at [80], that:

“80   Leaving aside the possibility that NHA's applications for review might yield a reduction in the size of the amended assessments, a matter I will return to, it follows that the relevant loss or damage occasioned to the Commonwealth from count 1 is a temporary delay in obtaining a tax debt of $104,152,053. The object of the conspiracy was to claim false tax deductions. False deductions were claimed and as a result no tax debt was raised in favour of the Commonwealth. The false deductions have now been reversed and the Commonwealth now has a tax debt in its favour that it was entitled to at an earlier time. Whether that delay was or will ultimately prove to be productive of an actual loss in revenue was not explored in the evidence.”

29. After dealing with a number of other arguments as to the quantification of the loss, which it is not necessary to outline at this point, his Honour observed, at [87], that a number of the submissions made by the appellant on this topic “…were either predicated on an acceptance of the offender's case or sought to reargue it even though it was emphatically rejected by the jury.”

30. His Honour then turned to count 6.

31. His Honour began, at [88], by explaining the evidence as to the fate of the funds totalling $63,715,000.00, which had been transferred by NHA in five tranches to accounts in the United Kingdom and then in Hong Kong, the bulk of which were then distributed back to Australia and New Zealand. His Honour found that the funds were used to pay amounts owing to the inventors by Athena and paying NHA’s expenses, but that the bulk were used for the personal enrichment of the appellant, Mr Issakidis, and another person who had some involvement in the scheme.

32. His Honour noted that while the amount distributed from the trusts to NHA was in excess of $68 million, the Crown had only sought to prove that the conspiracy which was the subject of count 6 resulted in the dealing in proceeds of crime of $63 million, for reasons explained at [89]. His Honour also noted that the jury instructions (at [90]):

“…identified the Crown case as alleging that the amounts standing in the various bank accounts constituted the proceeds of crime being the proceeds of the conspiracy that is count 1. [35] The basis for that contention has already been explained (see [10]). As part of those instructions the jury were told that if they acquitted the offender on count 1 then they had to acquit him on count 6. The jury were also instructed that, if they did not unanimously find the agreement the subject of count 1 was formed prior to 12 January 2007, then they had to acquit the offender of count 6. The significance of that date was that it was the date of the first movement of funds overseas by NHA being the first of the relevant dealings the subject of the conspiracy charged by count 6. If the agreement the subject of count 1 had not been formed prior to that time then the proceeds of the accounts that were distributed overseas on 12 January 2007 could not have been the proceeds of crime and there could not have been any conspiracy to deal with those monies as proceeds of crime.”

33. At [91] his Honour explained why this aspect of the instructions were favorable to the appellant, opining that it was possible for the jury to conclude that he and Mr Issakidis had entered into the agreement, the subject of count 1, sometime after 12 January 2007 and from that point conspired to deal with a lesser amount as the proceeds of crime. His Honour said that it was not put to the jury that way principally in order to avoid an already complicated case being further complicated. He found that:

“91 The end result is that the jury's verdict means that they necessarily accepted that the agreement the subject of count 1 was formed prior to 12 January 2007, that all the funds moved overseas from NHA's account thereafter were the proceeds of crime and that those movements gave effect to the agreement the subject of count 6. Thus it necessarily follows from the jury's verdict that the amount that was dealt with in giving effect to that agreement the subject of count 6 was $63,715,000.”

34. At [92] his Honour noted that the appellant had admitted that it was he who had caused the transfer of this $63,715,000.00. His Honour explained this admission, observing:

“92 … [T]he accounts in the United Kingdom belonged to Dampier Finance. Dampier Finance was incorporated in Samoa in July 2006 at the instigation of the offender. At the time of its incorporation the offender received assurances that the details of its ownership and control were not available to foreign regulators. The offender was the sole director of Dampier Finance for a number of years. It had an unusual ownership structure in that the owner of the company was the person that had possession from time to time of certain bearer debentures. The offender claimed that his brother, John, held these debentures. John denied that and stated that the control of the company was exercised by the offender. On that topic I am satisfied beyond reasonable doubt that John Dickson's evidence should be accepted.

93   The bank accounts in Hong Kong were held by two companies incorporated in Hong Kong in respect of which all the relevant legal indicia of control and ownership rested with John Dickson. However his evidence was that he would act on the direction of the offender. As I have said at least so far as the movement of the relevant funds was concerned that was not in dispute. Further it was not in dispute that instructions were given by the offender using a code and also by his using the pseudonym "Ronnie Wang". In his evidence the offender stated that these were all security measures designed to avoid persons such as criminal gangs becoming aware of the transfers. This was a specious assertion. I am satisfied beyond reasonable doubt that it was undertaken in an attempt to avoid scrutiny by tax regulators.”

35. His Honour then discussed the significance of a falling out between the appellant and his brother in early 2010 after NHA had filed its first two tax returns, around the same time as the ATO's audit was commencing. His Honour found, at [94]:

“94 … Subsequently John Dickson provided a number of documents to the Australian Consulate in Hong Kong. It was the receipt of those documents that enabled the ATO to follow the money trail after funds left Australia. Either through that source or through the execution of search warrants or both, the email communications between the offender and John Dickson became available. In the scheme of what was otherwise a sophisticated tax fraud some of those emails are amateurish in that they suggest blatant dishonesty. I am satisfied beyond reasonable doubt that the offender never envisaged they would become available to Australian regulators.”

36. His Honour found, at [95], that the result of the scheme that he had described was that $19,616,966.37 had been distributed back to the appellant and entities associated with him, the jury having rejected the appellant’s evidence that these amounts represented sums invested on behalf of HFAC or his receipt of remuneration from Randstone. Some of that money had been used to make land purchases and for the purchase of a shopping centre.

37. His Honour then turned to sentencing considerations, to which it will be necessary to return.

The Grounds of Appeal Against Conviction

38. It is proposed to deal with each of the six grounds of appeal advanced by the appellant in turn.

Ground 1: The prosecution changed its case during the trial which occasioned a miscarriage of justice

39. By this ground the appellant argues that the case that the Crown left before the jury at the close of the evidence was materially different to that upon which it opened, having “shifted” in nature and emphasis during the course of the trial. It is contended that, in opening the case at the commencement of the trial, the Crown outlined a case wherein it was accepted that legal title or property in the medical technology patents was transferred from Athena to NHA, with the “sham” being the inflated purchase price. At the close of the Crown case, the appellant argues that the case against him had fundamentally changed, in that the Crown argued that it was the assignment of the technologies, rather than the price paid, which was the sham.

40. It is submitted that, because of the late change to the Crown case, evidence was admitted which should not have been admitted or which should have been limited. Additionally, evidence which may have been relevant to the issue of sham acquisition was not placed before the jury.

41. The appellant relies upon both a statement of particulars for count 1 provided to him by the Crown prior to the commencement of the trial, in which reference was made to the assignment of medical technologies by Athena to Neumedix at “…falsely inflated costs of acquisition”, and to the Crown Prosecutor’s opening address, and references therein to falsely inflated costs of acquisition. The appellant additionally points to exchanges between the trial judge and the Crown Prosecutor on days 32, 33, 42, 43 and 44 of the trial concerning the nature of the Crown case as indicative of confusion as to precisely what the Crown case was.

42. The Crown contends that there was no change to its case at trial, its case always having been one of conspiracy to cause loss to the Commonwealth (via the Australian Taxation Office).

43. Having considered the opening address by the Crown Prosecutor, and the evidence subsequently led, we do not agree that there was a fundamental change to the nature of the Crown’s case such as to lead to a miscarriage of justice.

44. The Crown’s case, when pared back to the basic allegation, was that the appellant was part of a conspiracy to defraud the Commonwealth by falsifying expenses claimed in company taxation returns. The conspiracy was not alleged to rest solely in making claims based upon falsely inflated acquisition costs for the relevant medical technologies, but rather, that the assignments the subject of the claims more broadly, were a sham. The cost of the acquisitions was a particular of the conspiracy, but it was not the whole of the case alleged by the Crown.

45. That conclusion is clear if regard is had to the whole of the Crown Prosecutor’s opening address – which occupied some days at the commencement of the trial – wherein there were repeated references to the overall acquisition of the technologies as an elaborate sham to dishonestly deprive the revenue of legitimate taxation through fraudulent deductions claimed against income. The Crown Prosecutor also made reference to falsely inflated acquisition prices, but this was in the context of the fraudulent nature of the assignments overall.

46. The exchanges between the trial judge and the Crown Prosecutor extracted by the appellant do no more than evidence the sort of exchanges that might be expected in a trial of this nature, where the details of directions to the jury were discussed with counsel prior to being given to the jury. That such inquiries occurred does not indicate that the Crown’s case was in flux and confused, and a jury must also, therefore, have been confused. His Honour appears to have sought clarification of some points in the Crown case, clarification which was provided without any expression of concern by the appellant’s counsel at trial.

39. Had there been such a fundamental shift, and consequent confusion as to the Crown case, it might be expected that trial counsel would have raised that issue before the trial judge and made some sort of complaint about it. Although the appellant was represented by experienced Queens Counsel at trial, no such complaint was made, a feature of the case to which this Court is entitled to have regard, since it suggests that trial counsel saw nothing in the conduct of the case, in this regard, to complain about.

40. That the appellant’s counsel at trial did not raise any complaint about a “shift” in the Crown’s case of such significance as to affect the admissibility of evidence tendered or, conversely, not tendered, strongly suggests that counsel did not perceive there to be such a shift. It suggests that counsel understood that the Crown’s case was that it was the assignments that were asserted to be the sham, and not just the falsity of purchase prices for the medical technologies.

41. The absence of any complaint by trial counsel is consistent with a conclusion that there was no change in the Crown’s case. The full detail of both the particulars provided to the appellant by the Crown, and the Crown Prosecutor’s opening address read as a whole, make it clear that the Crown’s case was never, as the appellant contends, confined to an assertion of a conspiracy based upon falsely inflated purchase prices for the medical technologies assigned by Athena to NHA. It was always more widely cast than that, and that is the basis upon which the parties dealt with the evidence placed before the jury.

42. On that basis, the appellant’s contention that evidence inadmissible to the “changed” Crown case was admitted, and evidence that could have been led was not, falls away, and is not further addressed.

43. This proposed ground of appeal is without merit.

44. Since this ground raises questions of fact as well as law, the leave of the Court is required to advance it: s 5(1)(b) Criminal Appeal Act 1912 (NSW). We would not grant leave.

Ground Two: The trial miscarried because there was unreasonable evidence to convict Michael Issakidis

53. The framing of this ground appears to argue that, had the case against Mr Issakidis gone to the jury, it would not have been open to the jury to convict him, and any verdict of guilty would have been unreasonable. That being the case, the appellant’s trial miscarried, as this Court could not conclude that it was open to the jury to be satisfied, beyond reasonable doubt, as to the appellant’s guilt. It is submitted that there is a significant possibility that the alleged co-conspirator is innocent and the verdicts against the appellant must therefore be set aside since, in effect, he could not have conspired with an innocent person.

54. The jury was discharged with respect to the trial against Mr Issakidis, the trial judge granting his application in that regard: R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595. The appellant did not join the application.

55. It should be recalled that there is no longer a general principle of law to the effect that a conspirator’s conviction can only stand in circumstances where the co-conspirator is also convicted. Whilst such was historically the case, that was at a time when the grounds for challenging a conviction were limited to errors on the face of the record, and the apparent inconsistency of the record showing one conspirator found guilty, and the other acquitted, was regarded as a miscarriage of justice.

56. This rule has been held to have:

“…long since outlived its usefulness and should now be swept away, together with the anomalies and absurdities from which it is inseparable.” (Director of Public Prosecutions v Shannon [1975] AC 717, at 771 per Lord Salmon)

57. That position was considered and accepted as correct and to be applied in Australia by the High Court in R v Darby [1982] HCA 32; (1982) 148 CLR 668. At 678, Gibbs CJ, Aickin, Wilson and Brennan JJ held that:

“In the light of the wealth of both academic and judicial consideration that has been devoted to this topic in recent years, we have no doubt that this Court should now redirect the common law of Australia onto its true course. It should determine that the conviction of a conspirator whether tried together with or separately from an alleged co-conspirator may stand notwithstanding that the latter is or may be acquitted unless in all the circumstances of the case his conviction is inconsistent with the acquittal of the other person. In our opinion such a determination will focus upon the justice of the case rather than upon the technical obscurities that now confound the subject.”

58. The question for this Court then, is not whether the alleged co-conspirator is, or may be innocent, but whether the appellant’s conviction is inconsistent with the asserted innocence of Mr Issakidis and whether, upon assessing the evidence, for itself, this Court considers that it was open to the jury to conclude, beyond reasonable doubt, that the appellant was guilty: M v The Queen [1994] HCA 63; (1994) 181 CLR 487 at 493; Jones v The Queen [1997] HCA 56; (1997) 191 CLR 439; MFA v The Queen [2002] HCA 53; (2002) 213 CLR 606; Libke v The Queen [2007] HCA 30; (2007) 230 CLR 559; SKA v The Queen [2011] HCA 13; (2011) 243 CLR 400.

59. To some extent, the Court is placed in a difficult position in conducting this assessment since the jury was discharged in relation to Mr Issakidis, and he is proceeding to re-trial. The reason for the discharge of the jury was the revelation very late in the trial of a quantity of further documentary evidence which may alter the case to be presented against the alleged co-conspirator at any further trial.

60. At the joint trial, prior to the discharge of the jury relevant to Mr Issakidis, the Crown did not allege that Mr Issakidis’ role in the conspiracy was the same as the appellant’s asserted role and, consistent with the differing roles of each, the evidence led against each differed. It may further differ when Mr Issakidis again faces trial. It is a moot point as to whether this Court can properly assess the case against the alleged co-conspirator in those circumstances, in order to determine the validity of the appellant’s conviction.

61. The evidence placed before the jury in the joint trial was, in our view, sufficient to establish that Mr Issakidis entered an agreement with the appellant to cause NHA to file income tax returns claiming depreciation expenses for the asserted cost of acquisition of medical technologies where no costs had in fact been incurred, to the loss of the Revenue.

62. In R v Dickson; R v Issakidis (No 9) [2014] NSWSC 1460, which dealt with a no case to answer submission made by Mr Issakidis (and joined by the appellant) at the close of the Crown case, the trial judge, in refusing the application, summarised what the evidence against the alleged co-conspirator was capable of establishing. His Honour concluded that there was sufficient evidence to establish that:

1. Mr Issakidis knowingly provided documents to Walsh & Walsh that falsely asserted an obligation incurred by NHA to pay for the acquisition of medical technologies from Karkalla.

2. The documents were provided in the knowledge that they would be used to prepare financial accounts, and with full awareness of the financial accounts to be produced and their relevance to the preparation of tax returns for NHA.

3. Mr Issakidis was aware that NHA would claim depreciation against the costs of the acquisitions in the context of assessment of tax payable by NHA.

63. The trial judge made these findings on the basis of a considerable volume of largely documentary evidence that is clearly capable of establishing the participation of the alleged co-conspirator in the conspiracy with the appellant. The documentary evidence was capable of establishing Mr Issakidis’ knowledge of matters connected with the aims of the conspiracy, and acts done in furtherance of it, including:

1. Knowledge that it was Athena which had acquired the intellectual property for Genvax and CG Surgical, and the terms on which the acquisitions were made;

2. Acting to settle relevant correspondence in furtherance of the acquisition by Athena of CG Surgical;

3. Knowledge that Genvax and CG Surgical were to be purportedly assigned to NHA through a Cayman Islands company;

4. Involvement in the negotiations with the inventors for the acquisition of Genvax and Cologene;

5. Involvement in due diligence inquiries by the ANZ relevant to the structured finance;

6. Knowledge that the amount NHA was to pay Karkalla for the technologies did not represent a true value;

7. Executing an assignment agreement between NHA and Athena in relation to the Genvax technology that was not consistent with the Karkalla assignment agreement;

8. Involvement in the creation of a false assignment agreement of Genvax from Athena to NHA to satisfy inquiries by Barclays Bank;

9. Knowledge that NHA was claiming high depreciation expenses arising from the asserted acquisition of the medical technologies;

10. Knowledge that NHA was to receive substantial cash distributions in accordance with the terms of the structured finance transactions;

11. Knowledge that Athena, Karkalla and KIH were all controlled by the appellant;

12. Acted to sign the 2007 financial report claiming a loss of over $97 million, and later (in 2009) signed another version of the report claiming losses at in excess of $82 million, with knowledge of the connection between the reports and taxation returns to be prepared by the appellant and filed with the ATO;

13. Undertook a number of the international financial transactions, moving money between NHA bank accounts in Australia, and overseas accounts;

14. Participated in building correspondence about communicating with Peggy Wong and Jay Corbett, knowing each was the appellant; and

15. Was aware that his participation in the scheme would provide substantial financial benefits to him, receiving monies in excess of $12 million.

64. Although the Crown’s case against Mr Issakidis is a circumstantial one, there is a significant body of highly probative evidence which was (and will be) available to any jury in determining his alleged participation in the conspiracy. In our view, it is well open to a jury, acting reasonably and in accordance with proper direction, to accept the guilt of Mr Issakidis beyond reasonable doubt.

65. In his written submissions the appellant referred to the late disclosure of documents by the Crown to him and the alleged co-conspirator, and referred to error by the trial judge in allowing cross-examination of the appellant with reference to some of that material. Since there is no ground of appeal that raises the issue of late disclosure by the Crown, and the use subsequently made of the documents, it has no apparent relevance to ground 2 as framed. It is not further considered.

66. Leave is required to argue this ground, as it raises questions of fact and law. We would not grant leave.

Ground 3: The trial judge erred in deciding in R v Dickson (No. 1) that count 6 ought not to have been stayed

67. Prior to the empanelment of a jury to hear his trial, the appellant filed a notice of motion seeking to have count 6 of the indictment permanently stayed. It was argued that count 6 was an abuse of process because it did not raise any different allegations of criminality to those which were essential elements of count 1. Having heard the relevant evidence and submissions, the trial judge refused to stay count 6: R v Dickson; R v Issakidis (No 1) [2014] NSWSC 1068. The appellant contends that his Honour was in error in refusing a stay on that count.

68. Citing Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 at 395 as authority for the argument, the appellant submits that the issue goes beyond one of whether the appellant had available to him a plea in bar, also encompassing a situation where the court’s processes and procedures are used as instruments of injustice or unfairness.

69. In his judgment on the stay application, the trial judge concluded that, although there was one overarching scheme, each conspiracy dealt with a separate aspect of that scheme, and involved separate criminality. The first conspiracy was identified as the series of steps preparatory to the filing of the tax returns, and the second as the receipt and dissipation of income, including by concealing it in various transactions.

70. The appellant submits that his Honour was in error.

71. The Crown argues that there was no plea in bar available to the appellant in relation to count 6, as the elements of the two offences were different. Neither was there an artificial division of the conduct alleged against the appellant, as the two offences involved separate and distinct criminality.

72. In determining whether a plea in bar exists, consideration must be given to those matters raised in Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 (“Pearce”), and to whether the evidence necessary to establish count 6 would have been sufficient to sustain a guilty verdict for count 1: Chia Gee v Martin [1905] HCA 70; (1905) 3 CLR 649; Li Wan Quai v Christie [1906] HCA 42; (1906) 3 CLR 1125. This necessarily means considering the elements of each offence to see if there is complete correspondence between them.

73. To prove count 1, an offence contrary to s 135.4(5) of the Criminal Code 1995 (Cth) (“the Code”) the Crown had to prove, beyond reasonable doubt that:

1. The appellant conspired (that is, entered into an agreement) with Michael Issakidis to intentionally and dishonestly cause a loss or risk of loss to a third person;

2. The appellant knew or believed that the loss would occur or that there was a substantial risk of loss occurring;

3. The third person is the Commonwealth; and

4. The appellant or Mr Issakidis committed an overt act in furtherance of the agreement.

74. To prove count 6, an offence contrary to ss 11.5 and 400.3 of the Code, the Crown had to prove beyond reasonable doubt that:

1. The appellant conspired with Michael Issakidis to “deal with” money or other property which is the proceeds of crime;

2. The appellant believed the money or property to be the proceeds of crime, or he believed it would become an instrument of crime; and

3. The money or other property was valued at or in excess of one million dollars.

75. “Deal with” means receiving, possessing, concealing or disposing of money or property; importing money or other property to, or exporting it from, Australia; or engaging in a banking transaction relating to money or other property.

76. As that outline of the elements of each of the two offences makes clear, the elements required to be proved are different, and quite separate.  

77. A plea in bar is not available to prevent a person being prosecuted for different offences arising out of the same set of facts. Its availability is confined to cases in which the elements of the offences charged are identical or in which all of the elements of one offence are wholly included in the other: Pearce at [24] per McHugh, Hayne and Callinan JJ.

78. No plea in bar could arise here based upon the sameness or commonality of the elements of the offences since each of the offences with which the appellant was charged required proof of a fact which the other did not.

79. The appellant’s broader argument is that the division by the Crown of the charged conduct into two offences was an abuse of process which should have led to count 6 being stayed. That argument, however, is no more meritorious than is the argument for the availability of a plea in bar.

80. It is open to a trial judge to stay the prosecution of a particular charge where a separate charge on the indictment arising from the same conduct readily encompasses the criminality of that charge: Thorn v R [2009] NSWCCA 294. In such circumstances there is a basis to conclude that the addition of a separate charge is oppressive.

81. However, that is not the situation that arises in the present matter.

82. In R v Dickson (No 1) the trial judge correctly concluded that there was an overall scheme put in place by the appellant, being an agreement to obtain a finance deal to derive income which would not be subject to taxation because it would be offset by false tax deductions. That conduct was reflected by count 1. Count 6 reflected the steps taken by the appellant, acting in agreement with Mr Issakidis, to conceal and “launder” the proceeds derived from the conduct the subject of count 1, by a series of involved international banking transactions.

83. The criminality of count 6 was quite separate to that of count 1, and the criminality of the latter did not reflect the former.

84. It is a matter for the prosecuting authority to frame charges against an accused person that adequately reflect all relevant criminal conduct, thus enabling a sentencing court to impose a punishment that fits the crime. That may involve charging separate offences carrying differing maximum penalties, albeit that each charge arises from the same set of facts.

85. In Pearce, where an indictment charging offences contrary to s 33 and s 110 of the Crimes Act 1900 (NSW), both arising from one incident, was under consideration, it was held at [31] that:

“There was, however, no abuse of process in charging this appellant with both counts 9 and 10. The short answer to the contention that the charging of both counts was an abuse of process is that because the offences are different (and different in important respects) the laying of both charges could not be said to be vexatious or oppressive or for some improper or ulterior purpose. To hold otherwise would be to preclude the laying of charges that, together, reflect the whole criminality of the accused and, consonant with what was held in R v De Simoni would require the accused to be sentenced only for the offence or offences charged, excluding consideration of any part of the accused's conduct that could have been charged separately.” [Footnotes omitted]

86. The appellant relies upon the authority of Nahlous v R [2010] NSWCCA 58; (2010) 201 A Crim R 150 (“Nahlous”) in support of his contention that it was oppressive to charge both counts against him, but the facts in that case are very different to those pertaining here. In Nahlous the charges were brought pursuant to the Copyright Act 1968 (Cth) and related to the sale of unauthorized decoder machines. Having sold a number of machines, the applicant was arrested with the cash received from the sale in his possession. He was additionally charged with a Code money laundering offence relating to that cash.

87. Factually, the offender in that case had done nothing with the proceeds of his crime other than receive the monies in exchange for the unauthorised machines. He had not taken steps to conceal the funds, or to deal with them in any way. Of that situation, the Court said (at [17]):

“We appreciate that a person can by the one act commit two offences and, where the two offences address different aspects of the criminal conduct, there is nothing wrong with prosecuting the two offences. But in our view the receipt of the money as a result of the sale did not result in a separate act of criminality that warranted a separate charge and a separate penalty… We believe that in the circumstances of this case it was oppressive to charge the applicant with both the sale of the decoders and the receipt of the money as a result of the sale. That is because in our view the offence of sale encompassed the criminality of possessing the proceeds of the sale.”

88. Of some significance in the present case, the Court went on, at [18]:

“…The Code offence was intended to punish the possession of the proceeds of crime however they are obtained and the fact that the proceeds of the crime were in the public domain and could be dealt with or passed on to others. We accept that this may be a justification for the prosecution of such an offence particularly where the source of the funds is unknown, or where the proceeds were derived from the criminal act of another person or where the person is in some way dealing with the proceeds in order to hide their source or change the nature of the proceeds…”

2.    The offences are broken down into the mental element of the offender: belief/intention or recklessness or negligence. The prescribed maximum penalty depends upon the culpability of the offender's mental state concerning the source of the money for offences involving proceeds of crime or what is to become of it, for offences involving an instrument of crime: R v Huang; R v Siu [2007] NSWCCA 259; 174 A Crim R 370 at [28].

3.    The amount of money involved is a highly significant matter and is the primary identifier of what is the maximum penalty for an offence: R v Huang; R v Siu at [34]; R v Ansari [2007] NSWCCA 204; 70 NSWLR 89 at [122]; R v Li at [41].

4.    The number of transactions and the period over which they occurred are also significant matters as they indicate the extent of an offender's criminality. Generally speaking, a number of transactions involving small amounts of money will be more serious than a single transaction of a larger amount, for the latter may be seen as an isolated offence: R v Huang; R v Siu at [35].

5.    The offences are not only concerned with the source of the money or property dealt with, but also its ultimate use. The offences cover money obtained illegally or to be used for illegal purposes or dealt with in a manner that is illegal: Sentencing Bench Book, Judicial Commission of New South Wales, at [65-205].

6.    The serious criminal activity of money laundering warrants severe punishment not the least in order to reflect general deterrence of a very significant degree. When the activity is engaged in for profit over a significant period of time and with a large number of transactions, the prior good character of the offender is of less significance than might otherwise be the case: R v Huang; R v Siu at [36].

7.    Knowledge as to the illegality of the conduct is clearly a matter that increases the seriousness of the offence.”

184. Given these considerations, it is apparent that this offence also involved very serious offending, as his Honour found. The sentence imposed was 9 years. The maximum penalty was 25 years.

185. Before January 2007 the appellant and Mr Issakidis had agreed to deal with $63,715,000.00, knowing that these funds were the proceeds of crime, albeit not contemplated to be used for other illegal purposes. At [105] his Honour observed that none of the cases drawn to his attention had such a large amount. His Honour took into account the appellant’s control of the movement of these funds and that the money which finally came to him, the predominant conspirator, as the result of the steps pursued for his personal enrichment, was $19,616,996.37.

186. His Honour thus rightly concluded that this was a very serious example of a s 400.3(1) conspiracy offence under s 11.5.

187. His Honour also considered the circumstances of Chen v R [2009] NSWCCA 66 where, although $20 million of stolen funds were transferred to an account, the fraud was discovered and the funds were not released. Some $3.5 million was otherwise lost through the fraud. The offence under s 11.5(1) and s 400.3(2) of the Code there involved recklessness as to the fact that the money was the proceeds of crime. The maximum penalty was imprisonment for 12 years. The applicant entered a plea and was sentenced to imprisonment for 6 years with a non-parole period of 3 years and 7 months, after a starting point of 8 years and a 25% discount. The sentence appeal was dismissed, it being observed:

“33    His role in the conspiracy involved making arrangements for access to over $20 million in stolen funds. The Judge found that the applicant was aware that the activity in which he was involved related to “a very large sum of money”. In R v Huang and Siu [2007] NSWCCA 259, this Court said:

[34] The amount of money involved is clearly a highly significant matter because the legislation uses it as the principal means of dividing the offences into categories and it is the primary identifier of what is the maximum penalty for an offence. The only difference between an offence falling within s 400.3(a), and carrying a maximum penalty of 25 years, and an offence falling within s 400.4(a), and carrying a maximum penalty of 20 years, is the amount of money or the value of the property with which the offender dealt.

34    There was no suggestion that the Judge erred in finding that the offence was above the middle range of seriousness, and I would have thought that it was well above. It has been made abundantly clear by the decisions to which I have referred that this type of activity is to be considered as serious criminal conduct whatever the role undertaken by persons involved in it. Where, as here, the offender is “at mid level in the organisational hierarchy of the conspiracy” to deal with these funds, the criminality warranted a very severe sentence having regard to the amount of money involved and what the applicant did in an attempt to make the funds available to the persons involved in its theft.”

188. His Honour concluded at [126] that the appellant’s offending compared unfavourably to the offender in Chen v R [2009], given the higher maximum penalty which applied to his offending; the absence of a plea; the larger amount agreed to be laundered; the larger number transactions involved; the more sophisticated scheme; and that the offence had involved belief, rather than recklessness.

189. Chen v R [2010] NSWCCA 224 was also referred to by his Honour at [124], but its circumstances were not considered. This case, the Crown submitted on appeal, was an appropriate “yardstick” for comparison in this sentencing exercise, particularly given the magnitude of the appellant’s profit from his offending.

190. There an appeal against sentence was dismissed, the offender having been found guilty of an offence under s 31(1) of the Financial Transaction Reports Act1988 (Cth) and s 400.3(1) of the Code, committed between about 14 January and 4 November 2003, when the offender dealt with $3,088,311, intending that the money become an instrument of crime. The maximum penalty was 25 years and/or a fine of 1500 penalty units. The offender was sentenced to 16 years and 6 months with a non-parole period of 10 years and 6 months.

191. A difference to the appellant’s offending was that in Chen v R [2010], the money was intended to become the instrument of a crime, rather than already being proceeds of crime, and so the sentencing judge could not say what benefit had flowed to the offender, for his involvement. Here, of course, the huge personal gain which the appellant achieved was established.

192. The sentence imposed for the appellant’s offence was, however, 9 years. That was 7 years and 6 months less than that imposed in Chen v R [2010], where the maximum penalty was also 25 years, but three years more than the head sentence imposed in Chen v R [2009], where the maximum penalty was only 12 years.

193. When these comparisons are considered together with the aggregate sentence imposed on the appellant of 11 years for his offending as reflecting the totality of conduct, it must be accepted that this ground of appeal has also been established.

Ground 3:   The overall effective sentence was manifestly inadequate by reason of insufficient accumulation.

194. The appellant’s case on sentence was that the evidence revealed a unique combination of features which called for a sentence below the norm to be imposed upon him.

195. While his Honour did not accept this submission and concluded at [132] that a significant degree of accumulation in the two sentences was warranted, he came to the view that the sentences had to be made largely concurrent, lest they otherwise have a crushing effect on the appellant.

196. The appellant’s case on appeal, that this approach was open as a matter of discretion, may not be accepted. The result of such an approach here to accumulation, concurrency, and totality was an overall sentence which was manifestly inadequate, given the criminality found to have been involved in the appellant’s offending.

197. The sentence did not achieve the stated purpose of ensuring that the combined effect of the sentences reflected the total criminality of the appellant’s conduct (at [132]).

198. Care unarguably had to be taken in the application of the totality principle, to ensure that a crushing sentence was not imposed on the appellant, that is, one which would induce a feeling of hopelessness and destroy any expectation of a useful life after release (see R v MAK; R v MSK [2006] NSWCCA 381; (2006) 167 A Crim R 159 at [97]). That undoubtedly required the imposition of some concurrency (see Cahyadi v R [2007] NSWCCA 1; (2007) 168 A Crim R 41 at [27]).

199. Application of the totality principle also had to result, however, in a sentence reflective of the overall criminality involved in the appellant’s entire offending, one which ensured that there was no suggestion that there had been a discount for multiple offending (see R v MAK at [18]).

200. The appellant contended, nevertheless, that his Honour’s conclusions involved no error, given the approach discussed in authorities such as Thorn v R [2009] NSWCCA 294; (2009) 198 A Crim R 135 ; Nahlous v R [2010] NSWCCA 58; (2010) 77 NSWLR 463; Schembri v The Queen [2010] NSWCCA 149; (2010) 78 ATR 159; Redfern v R [2012] NSWCCA 178; Subramanian v R [2013] NSWCCA 159 and Dela Cruz v R [2010] NSWCCA 333. These, however, are considerably different cases to this one.

201. In Subramaniam v R [2013] NSWCCA 159 it was observed that the money laundering offences there in question (at [34] – [36]):

“34   … came within the type of "highly technical" category of this offence that was identified by Howie J (Campbell JA and Rothman J agreeing) in Thorn v R [2009] NSWCCA 294 at [31]. As in Thorn, the applicant was doing no more than "merely transferring the money obtained by the fraudulent claims from the company accounts to [her] personal account ...... so that [she] could use it to [purchase property]. [She] was doing nothing to hide the source or to change the nature of the funds. [She] was simply gaining access to them."

35    The criminality represented by the money laundering offences was of a low order for this reason and there ought to have been very little, if any, accumulation on the sentences imposed for the obtain benefit by deception offences in groups (ii) and (v). It is not possible to say whether that occurred or whether the sentence for the offences in (vi) added materially to the sentence for group (ii) and/or (v).

36    It is appropriate in my view to approach re-sentencing on the basis that the obtain financial benefit offences involving the transfer of funds of a similar order ought be grouped together. The greater the amount comprehended by each group of offences, the greater the penalty, both with respect to each offence within the group and with respect to the aggregate sentence for the combination of offences. The penalties for the money laundering offences ought be wholly concurrent with the sentences for the s 178BA offences. This does not signify that there is no additional criminality inherent in the money laundering offences (albeit at the low end of the scale), but it recognises that partial accumulation of the sentences imposed for each of the proposed groups is sufficient for the purposes of totality.”

202. Subramaniam involved a string of offences involving the fraudulent transfer of money used to purchase properties, which were the subject of the money laundering offences.

203. In Thorn v R [2009] NSWCCA 294, sentences imposed for one count of dealing with the proceeds of crime contrary to s 400.4(1) of the Code, 11 counts of dishonestly obtaining a financial advantage contrary to s 134.2(1) of the Code and one count of attempting to obtain a financial advantage arose to be dealt with. There it was observed that (at [30] – [31]):

“30    In sentencing for the money laundering offence the Judge referred to a number of decisions of this Court including Ansari v R [2007] NSWCCA 204; 70 NSWLR 89 and R v Huang and Sui [2007] NSWCCA 259; 174 A Crim R 370. But those cases involved money laundering of a completely different character to that involved in the offence before his Honour. Ansari concerned persons who were intimately involved in dealing with money that was the result of some other person’s criminal activity so as to hide its source. That is money laundering in the true sense of that term and clearly the type of activity that the legislature had in mind in creating the offence. Similarly Huang and Sui were involved in money laundering as it is generally understood but at a lower level of criminality than in Ansari. They were involved in taking sums of money at the behest of another and depositing it in various accounts under false names to hide the source of the funds.

31    But here the applicant was merely transferring the money obtained by the fraudulent claims from the company accounts to his personal account or drawing it from an ATM so that he could use it to gamble. He was doing nothing to hide the source or to change the nature of the funds. He was simply gaining access to them. The activity came within the scope of the offence under s 400.4, because the offence is so widely drawn. But it was a highly technical version of the offence.”

204. The appellant argued that in the result in his case, “it is appropriate to impose a sentence substantially cumulative upon the predicate offence of fraud when the very money laundered involved concerns the gaining of access to the funds the product of the fraud.”

205. Each case must turn on its own facts. While, as his Honour found, there was an overlap between the elements of counts 1 and 6, the result of the successful conspiracy that was the subject of count 1, which the appellant and Mr Issakidis first pursued in relation to the funds involved of over $63 million, was that they were put in the position where they were able to pursue the other sophisticated steps the appellant largely devised, in order that they could implement the second conspiracy, which was the subject of count 6. Thereby the appellant was able to achieve the result that he and those associated with him came into possession of over $19 million.

206. Offending of such a significant nature cannot justly be sentenced on the basis that the second offence involved “merely gaining access” to the funds obtained as the result of the first offence, or a conclusion that the penalty for that further offending, which attracted a maximum penalty of 25 years, could be substantially subsumed in the penalty imposed for the first conspiracy, which carried a maximum penalty of only 10 years.

207. The Crown has met the onus falling upon it to demonstrate that the overall sentence imposed resulted from the errors earlier discussed and that, in the circumstances which arose for consideration in this sentencing exercise, the overall sentence imposed was unreasonable and plainly unjust.

208. In the result this ground of appeal must also be upheld. As discussed in Hili at [58] - [62] appellate intervention is warranted, because misapplication of principle has been established.

Residual discretion

209. The Crown has also established that the Court’s residual discretion not to interfere in the sentence should not be exercised.

210. The overall sentence imposed on the appellant reflects error in principle. Given the serious offences for which the appellant was being sentenced, the nature of the errors identified, and their result, it is necessary for this Court to intervene to correct the sentence in order to maintain adequate standards of punishment for offences of this kind.

211. The appellant must thus be sentenced afresh in order that “principles for the governance and guidance of courts having the duty of sentencing convicted persons” may be given (see Griffiths v The Queen at [54]).

Re-sentence

212. As his Honour observed, sentences imposed in cases of serious revenue fraud such as this must reflect the need for denunciation, as well as general and personal deterrence (see Milne v R [2012] NSWCCA 24 at [297]). There reference was made to Director of Public Prosecutions (Cth) v Gregory [2011] VSCA 145; (2011) A Crim R 147 where the Victorian Court of Appeal explained at [57]:

"A sentence imposed for fraud upon the taxation revenue is intended to re-affirm basic community values that all citizens according to their means should fairly share the burden of the incidence of taxation so as to enable government to provide for the community, that the revenue must accordingly be protected and that the offender should be censured through manifest denunciation. When these considerations are not reflected in the responses of the courts, the criminal justice system fails to achieve its objectives."

213. The appellant’s criticism of his Honour’s approach to fact finding on sentencing cannot be accepted. A sentencing judge may form his or her own view of the facts, so long as it does not conflict with the jury’s verdict (see Savvas v The Queen [1995] HCA 29; (1995) 183 CLR 1 at 8). While facts found must be arrived at beyond reasonable doubt, there is no general requirement that a sentencing judge must sentence an offender upon the basis of the view of the facts, consistent with the verdict, which is most favourable to the offender (see Cheung v The Queen [2001] HCA 67; (2001) 209 CLR 1 at [14]).

214. As earlier discussed, no error in his Honour’s fact finding has been established.

215. The appellant submitted that on re-sentence account would be taken of the fact that any fraud after the 2010 tax year depended on NHA exiting the tax audit notified in 2010 without the depreciation claims being assessed as being based on shams. That did not happen given what the Commissioner came to know. However, this consideration would have been obvious to his Honour and, no error has been shown in his Honour’s finding as to the extent of the loss.

216. The appropriate sentence for the s 135.4(5) offence is one of 9 years, and for the offences under s 11.5(1) and s 400.3 of the Code, 12 years. The overall sentence which is of a severity appropriate for the appellant’s offences and provides a minimum period that he must spend in custody appropriate to all the relevant elements of punishment, including rehabilitation, the objective seriousness of his offences and his subjective circumstances is 14 years imprisonment, with a non-parole period of 9 years and 3 months.

217. This means that the appellant’s sentence will commence on 22 December 2014 and will expire on 21 December 2028. The non-parole period will expire on 13 March 2024, the appellant’s earliest date of release on parole. If released on parole the appellant will then spend the balance of the sentence in the community, subject to conditions then imposed upon him by the relevant parole authority, which may later be amended or revoked. If the appellant fails, without reasonable excuse to comply with such conditions, his parole may be revoked, in which event he will be returned to custody to serve the balance of his sentence.

Orders

218. For the reasons given, we propose the following orders:

1. Leave to appeal in relation to grounds 1 and 2 of the conviction appeal is refused.

2. The conviction appeal is otherwise dismissed.

3. The sentence appeal is upheld and the sentences imposed by Beech-Jones J are set aside.

4. The appellant is re-sentenced as follows:

1. For count 1, being an offence contrary to s 135.4(5) of the Criminal Code, the appellant is sentenced to a term of imprisonment of 9 years, commencing on 22 December 2014 and expiring on 21 December 2023.

2. For count 6, being an offence contrary to s 11.5(1) of the Criminal Code, the appellant is sentenced to a term of imprisonment of 12 years, to date from 22 December 2016 and expiring on 21 December 2028.

3. Pursuant to s 19AB(1) of the Crimes Act 1914 the Court fixes a single non-parole period of 9 years and 3 months, expiring on 21 March 2024.

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Amendments

11 August 2017 - Mr Issakidis’ trial has now concluded and he has been convicted.

The decision in Dickson can therefore now be uploaded onto Caselaw.

Decision last updated: 11 August 2017