King v Regina

[2008] NSWCCA 101

Reported Decision: 184 A Crim R 304

New South Wales

Court of Criminal Appeal

CITATION:	KING v REGINA [2008] NSWCCA 101
HEARING DATE(S):	6 March 2008
JUDGMENT DATE:	13 May 2008
JUDGMENT OF:	Mason P at 1; Simpson J at 95; Latham J at 96
DECISION:	Appeal dismissed.
CATCHWORDS:	CRIMINAL LAW – Jurisdiction, practice and procedure – summing up – whether failure to properly identify issues to the jury – whether failure to properly put defence case to jury – where defence case confusing or not an answer to crown case - CRIMINAL LAW – Particular offences – property offences false pretences and other frauds and impositions – obtaining loan from a bank – where loan documents identify 144 specific buses – where the specific buses do not exist – where defendant knows the specific buses do not exist – where other buses exist
LEGISLATION CITED:	Crimes Act 1900
CATEGORY:	Principal judgment
CASES CITED:	Basto v The Queen (1954) 91 CLR 628 Domican v The Queen (1992) 173 CLR 555 Donald (1983) 11 A Crim R 47 Kastratovic (1985) 19 A Crim R 28 Patten v Thomas Motors Pty Ltd (1965) 66 SR(NSW) 458 Peters v The Queen [1987] HCA 7, 192 CLR 493 R v Lawrence (1980) 32 ALR 72 R v Negline, NSWCCA, Hunt, Enderby, Loveday JJ, 5 December 1990 R v Smart [1963] NSWR 706 Spies v The Queen [2000] HCA 43, 201 CLR 603
PARTIES:	Anthony Patrick King v Regina
FILE NUMBER(S):	CCA 2007/2796
COUNSEL:	P Davis SC (Applicant) G Rowling (Crown)
SOLICITORS:	Ryan & Bosscher S Kavanagh - Solicitor for Public Prosecutions
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	5/11/0986
LOWER COURT JUDICIAL OFFICER:	Murrell DCJ
LOWER COURT DATE OF DECISION:	8 February 2007

CCA 2007/2796

MASON P
SIMPSON J
LATHAM J

Tuesday 13 May 2008

Anthony Patrick KING v REGINA

JUDGMENT

1 MASON P: The appellant was convicted in the District Court on an Indictment charging that:

Between 17 and 20 December 2000 at Sydney in New South Wales being then a director of a body corporate named King Bros Holdings Pty Ltd, defrauded the National Australia Bank Limited in its dealings with the said body corporate by representing that the body corporate owned the 144 used Mercedes Benz buses identified to, and purportedly sold to, the National Australia Bank Limited for $44,011,144 when to his knowledge the said buses did not exist.

2 He was sentenced to 5 years imprisonment with a non-parole period of 3 years.

3 The appellant’s co-accused (his brother and fellow director) was charged in identical terms but the jury failed to agree on a verdict in his case.

4 The Crown case against the appellant (which was, in my view, clearly established on the evidence) was a very simple one. In essence:

• The National Australia Bank (NAB) agreed to advance $100m to King Bros Holdings Pty Ltd (KBH) subject to a slew of contractual arrangements and securities. One of them was a Deed of Sale under which 144 buses identified by chassis and engine number in a Tax Invoice were sold from KBH to NAB at an agreed price of $44,001,144.

• The appellant was a shareholder and director of KBH and the primary organiser of the transaction on behalf of the company. He caused the Tax Invoice to be prepared for the sale of the 144 buses and made a statutory declaration as to KBH’s ownership of them.

• The Bank relied upon the truth of those representations in paying over the agreed sum of $44,001,144 on 19 December 2000. It needed title to the buses so that it could in turn lease them back to KBH as part of the ongoing financial arrangement between banker and customer.

• Buses with the nominated chassis and engine numbers never existed, to the knowledge of the appellant. The details in the Tax Invoice were pure fabrication.

5 I shall outline the facts in a little more detail.

6 KBH and its several subsidiaries operated a large fleet of buses on the North Coast of New South Wales.

7 There were meetings in late 2000 between representatives of KBH and representatives of NAB.

8 The essence of the arrangement that emerged was that NAB would lend KBH up to $100m to discharge existing debts to the Commonwealth Bank Finance Corporation (CBFC) and Esanda Limited (Esanda), to enable the purchase of additional buses and/or bus companies, and to provide working capital.

9 The appellant was one of KBH’s shareholders and directors and he played a leading role in the discussions with the NAB.

10 There was a “road trip” by NAB officers in October 2000 in which they visited a number of bus depots and were shown an apparently busy, efficient organisation with buses plying between various depots. Many but not all of the buses were made by Mercedes Benz. No attempt, however, was made by the officers to count the buses, to inspect them individually or to check their registration or other details.

11 An internal NAB record of 8 November 2000 describes the proposed facility as follows:

Master Lease/Lease Purchase Facility to; a) take existing 114 buses $100,000,00 under finance to CBA, Esanda & Mercedes Benz & b) finance remainder of fleet up to 300 buses – Purchase Price $325k each.
Facility to be revolving initially with a two year review period notwithstanding individual lease/lease purchase contracts.

12 On 28 November 2000 the Bank submitted its formal offer “for an Asset Finance Facility of $100m to assist with the financing of part of existing Bus Fleet and planned additional Buses”. The offer stated that:

A Master Lease/Lease Purchase facility … of $100,000,000 (one Hundred Million Dollars) has been approved for the purchase of 300 Buses.

13 The letter of offer referred to the need to “have a specific clause prepared and included in the approval documentation to ratify clear title on the sale of stock being second hand buses for MB Sales Australia Pty Limited”. (This company was a member of the King Bros Group of Companies.)

14 The NAB’s offer was accepted on 4 December 2000 when the appellant and his brother endorsed the letter dated 28 November 2000. Portion of that letter listed the securities that the Bank proposed to obtain.

15 The main security documents were signed at Port Macquarie on 12 December 2000. They included a Master Lease Agreement, a Master Purchase Agreement, a Guarantee & Indemnity, a Deed of Subordination and a Mortgage Debenture.

16 On 16 December 2000 a document variously entitled “Tax Invoice” or “Equipment Schedule” was prepared on instructions from the appellant. It is addressed to the NAB and is of a list of 144 Mercedes Benz buses itemised by reference to chassis and engine number. The Tax Invoice purports to record the sale of the buses from KBH to NAB. Each bus is identified as:

ONE (1) ONLY 2000 MERCEDES BENZ O405, 57 PASSENGER, CUSTOM COACH BUS BODY
The price for each item is shown as $277,785 plus GST of $27,778.50. The total sum for the 144 buses including GST is $44,001,144.

17 There is no evidence to show why the number of buses in the existing fleet had apparently risen from the 114 recorded in the NAB record of 8 November 2000 to the 144 buses in the Tax Invoice. Nor is there anything in the evidence about how, if at all, KBH discharged any finance arrangement with Mercedes Benz itself.

18 The “2000” reference in the Tax Invoice would, I infer, have been a warranty that the bus was “Year 2000 compliant” (see the Year 2000 Acknowledgement executed on 19 December 2000 (Ex M) which also had a copy of the Tax Invoice dated 16/12/00 annexed).

19 The list makes no reference to RTA registration particulars. The only information that distinguishes one bus from the other in the Tax Invoice are the details referable to Chassis No and Engine No. Thus, for the first of the 144 listed buses the information stated is:

Chassis no: WEB 35700621091780
Engine no: 44795520073214.

20 The Chassis No is the same as the “VIN” (Vehicle Identification Number) referred to below.

21 The Tax Invoice was also designed to perform double duty as an Equipment Schedule that identified the initial batch of buses that were to be subject to the leasing arrangements between the NAB and KBH under the Master Lease Agreement (see Ex G, cl 2).

22 The prosecution led evidence from Mr Hilliar, an accounts clerk with KBH at the relevant time. He said that the Tax Invoices were prepared by him with information supplied by the appellant in his own handwriting. That information contained the details that included the engine and chassis numbers (Tr p240). After the appellant had checked the invoices, Mr Hilliar was instructed by him to give them to Mr Hadfield at the NAB, Port Macquarie. The appellant told him they were required to arrange the settlement (Tr p242).

23 When the borrowing was being arranged the KBH fleet of buses were represented to be then leased by KBH (or possibly one of its subsidiaries), some were from CBFC and others were from Esanda. A substantial part of the money to be advanced by the NAB to KBH was to be used to pay out those institutions with the intent that KBH would acquire title to the existing buses in the fleet which it in turn would pass to the NAB. The NAB was then to lease the buses back to KBH thereby ensuring both that the NAB retained title to them and that the KBH group could to continue using them as part of the operating fleet.

24 Various documents executed in December 2000 were designed to give effect to this particular aspect of the wider NAB transaction.

25 One of them was a Deed of Sale dated 18 December 2000 with copy of the Tax Invoice annexed (Ex O). It expressed itself as a sale by KBH to NAB of:

“144 USED MERCEDES BENZ BUSES – REFER ANNEXURE ‘B’ HERETO FOR FULL DESCRIPTION”

The consideration is stated as $44,001,144.

26 On 18 December 2000 the appellant made a statutory declaration that was handed over to the NAB and upon which it was shown the NAB relied in completing the loan transaction. The appellant declared that:

[KBH] is the absolute owner of 144 USED MERCEDES BENZ BUSES – REFER ANNEXURE ‘A’ HERETO FOR FULL DESCRIPTION … and the same is its own sole and bona fide property.
Mr Huey, a senior NAB officer involved in the transaction said that he relied on the Tax Invoice as passing title to the Bank (Tr pp226, 230).

27 The statutory declaration asserted that the company had been the owner of the goods since 15 December 2000 having acquired ownership from CBFC and Esanda by cash.

28 By 19 December 2000 the NAB officers had come to understand that CBFC and Esanda would only be relinquishing their respective interests in the KBH bus fleet (whatever they were) when paid out with the money that the NAB was about to advance that day. Mortgage Debentures held by CBFC and Esanda over the relevant companies in the KBH group were discharged on 19 December 2000 (Tr p58). The backdating in the Deed of Sale and statutory declaration to 18 December 2000, deceived no one and would not have been a problem having regard to the legal principles of feeding title by estoppel (see Patten v Thomas Motors Pty Ltd (1965) 66 SR(NSW) 458 at 461-2). The critical matter was, however, KBH’s representation (to which the appellant was privy) that it had title to the 144 identified Mercedes Benz buses, subject only to the discharge of the CBFC and Esanda claims over those same buses. KBH was implicitly representing that these particular buses had been the subject of finance leasing arrangements with its earlier financiers and that, subject to paying them out, KBH was in a position to assign title in the buses to the NAB for the purpose of securing the new financial arrangements.

29 The bank officers involved in the transaction believed that the buses listed in the Tax Invoice corresponded with the buses (or at least the Mercedes Benz buses) that formed the fleet of which they had a general knowledge arising from what they had been told by KBH representatives and what they had observed during the October “road trip”. This, in a sense, was the very fraud practiced upon them.

30 The first drawdown of the NAB transaction occurred on 19 December 2000 when the NAB transferred the stated sum of $44,001,144 to KBH’s bank account at the Colonial State Bank. This enabled cheques to be drawn that day by KBH (signed by the appellant) in favour of CBFC ($27,814,288.47) and Esanda ($25,522,291.91) as well as cheques in favour of the NAB totalling over $16m representing the first rental payments under the new financing arrangements with the NAB.

31 The materiality of the Tax Invoice was manifest from the stipulation in the letter of offer, the very nature of the document as an invoice for sale and from the evidence of the Bank witnesses (see eg Mr Nicholson at Tr p271). The Invoice was annexed to the Deed of Sale upon which the Bank relied to acquire title to the buses in the fleet. The Tax Invoice and the Deed of Sale to which it was annexed were also critical to the NAB’s capacity to bring the particular buses into the contractual regime set out in the Master Lease Agreement.

32 The exact size of the actual fleet of Mercedes Benz buses operated by the KBH group in December 2000 is unclear. But what was proved, in spades, was that (with one possible exception) none of the 144 buses listed in the Tax Invoice ever existed, let alone were the property of the KBH or of its earlier financiers. That was the gravamen of the fraud pleaded in the indictment.

33 The prosecution proved the “non-existence” of the 144 buses referred to in the Tax Invoice by evidence from:

• Mr Meehan, who was involved in the importation of Mercedes Benz buses. He said that each bus is allocated a unique vehicle identification number (VIN) during the manufacturing process. The configuration of the VIN numbers in the Invoice did not appear on his company records, with one exception (the bus with VIN WEB 35700521092294).

• Mr Benfield, a clerk employed by the Roads and Traffic Authority (RTA). Buses driven on public streets in New South Wales are required to be registered. Mr Banfield said that the RTA registration database (DRIVES) contained no records of vehicles with the VIN or the Engine number of the buses listed in the Tax Invoice, with one partial exception. The records showed a bus registered MO 5266 that had the abovementioned VIN, but not the Engine number referred to for that VIN, in the Tax Invoice.

• Mr Moore, manager of the National Exchange Vehicles and Driver Information System (NEVDIS). NEVDIS tracks vehicles by VIN from the time of their manufacture or importation. Mr Moore said that (with the single exception referred to above) none of the 144 vehicles referred to in the Tax Invoice had been registered in Australia. 94 of the VINs were not even in a format that NEVDIS recognised. Mr Moore concluded that the numbers in the Invoice were imaginary.

• Mr McCarthy, a chartered accountant engaged by the receivers of the KBH group who were appointed in April 2003 and who was instructed to identify the buses in the KBH fleet as at that time. His task involved visiting nine depots and sighting and valuing the buses there. He also worked off a list given to him by the fleet controller, Mr Abela. Mr McCarthy and two valuers working with him prepared an inventory. He was unable to locate any bus with VIN or Engine numbers listed in the Tax Invoice with the single exception of the bus with the abovementioned VIN. Other Mercedes Benz and Iris brand buses bearing King Bros logos were located but none of them corresponded with the VINs appearing in the Tax Invoice. Mr McCarthy saw about 300 buses and he agreed with the cross-examiner that 208 of them were Mercedes Benz buses (Tr p418). But none of them had the identification features stated on the NAB document (Tr p432).

• Mr Abela, the KBH fleet controller from 9 November 2000 and onwards. Mr Abela was too sick to be called as a witness and his statement was read to the jury. He said that there were approximately 126 buses and coaches in the fleet when he started. On 19 December 2000 when, according to his belief, KBH took over three more bus companies, the fleet was increased by approximately 97 buses and coaches. (I would infer that the takeover was financed with the proceeds of the NAB advance.)

34 Neither accused gave evidence.

35 The addresses to the jury are transcribed.

36 The Crown Prosecutor emphasised that the Crown case was about the non-existence of the 144 buses specifically identified in the Deed of Sale. It was accepted that KBH operated a bus business, but the Crown case was that no buses other than those referred to in the schedules to the Tax Invoice were relevant to the charge before the jury.

37 The prosecutor continued (Tr pp489, 491):

No other buses in this trial are relevant. The fact that the King Bros bus companies was a bus company, the fact that it was in the business of transporting people, neither of those two propositions tell you anything about whether the buses the NAB thought it was purchasing existed. In other words that proposition answers the question that is not asked by the Crown in the trial and I’d ask you to keep in mind that particular thing, that they are not issues in the trial.
The other thing that was referred to in the opening by counsel for Anthony King was this: “The bank knew there were plenty of buses”. “The bank knew there were plenty of buses”. Once again that is not a proposition that enters into the Crown case. There were plenty of buses. If there were 10 buses, a thousand buses, a million buses, the relevant point is did the 144 buses that the accused represented to the NAB, did they exist?
It is not in issue in this trial one way or the other whether the company or companies had plenty of buses ...
Now you’ve heard quite a bit of evidence in this trial which generically I put under the title “which buses”. What I mean by that is that while the Crown case is concerned with 144 specific buses there has certainly been quite a bit of evidence about all sorts of other buses, mostly Mercedes but certain references to other brands of buses. Again I emphasise to you that the issue in this trial is the 144 that the NAB believed it was purchasing.

38 The balance of the prosecutor’s address concentrated upon the (ample) evidence showing that the 144 specific buses never existed. He submitted that the appellant’s participation in preparing documents representing that they did exist should be inferred to have been dishonest.

39 Mr Wallach, who represented the appellant at the trial, told the jury (Tr pp504-5p5):

The Prosecution says to you in this case the NAB didn’t get value for money, the buses didn’t exist. What we know is those buses existed all right, the NAB knew the buses existed all right, and they knew which buses existed. True it is – and I make this concession right at the start, true it is that the vehicle identification numbers on the schedule of tax invoices were incorrect.
It is to be said from that that the NAB did not know what it was getting? Did not know what it was buying? That the NAB got nothing? The answer using our common sense has got to be no, it knew exactly what it was buying. What it was buying was the 144 Mercedes Benz buses that were part of the King Bros bus fleet. They’re the buses everyone is talking about. To have the NAB effectively through the prosecution saying we did not get buses because the numbers were wrong, let me not pull punches here ladies and gentlemen. Is absolute nonsense. It’s absolute nonsense.

40 Defence counsel took the jury through the history of the transaction. He emphasised that “everybody knew, including the NAB” that the buses in the fleet were owned by two other finance companies, CBFC and Esanda, that “… the NAB knew that it was buying the Mercedes Benz component or getting the Mercedes Benz component of the King Bros fleet. That’s what it was getting.” The NAB officers (Mr Bird, Mr Hadfield and Mr Huey) who went on their road trip in October 2000 “knew they were getting the buses” that they inspected. Mr Wallach continued (Tr p506, 507):

They knew it. They inspected. They saw. They saw them on the streets everyday. Mr Bird was clear, as far as he was concerned the NAB was buying those Mercedes Benz buses that were going up and down the streets of towns on the north coast and on the Pacific Highway, one or the two. That’s what they knew they were getting as part of this transaction. Mr Hadfield said the same thing and Mr Huey on his limited exposure to it on that overnight trip said effectively the same thing. They knew what they were getting, they knew the terms of the buses, that’s what the daily [sic] was, that’s what the transaction was about. Those buses…
The startling thing about the claim ladies and gentlemen of the prosecution that the buses didn’t exist is the fact that everybody in the case says one thing. We saw buses, what we saw of the buses was consistent with our investigations into the King Bros business which was a large business with plenty of buses and was consistent with, at 19 December, the King Bros group owning 144 Mercedes Benz buses.

41 Defence counsel urged the jury to consider the capacity of the NAB to “have fought them all the way and … asserted their rights over the buses” that formed the actual fleet (Tr p508). “The fact that the numbers were wrong doesn’t mean the deal fell through or the deal was ineffective” (Tr p509).

42 It was not put to the jury that the two accused men had in some way themselves been mistaken that the buses in the actual fleet were those identified in the Tax Invoice. Neither accused had given any evidence and such a positive case would have lacked any evidentiary support.

43 It can be seen that the cases being put to the jury by prosecution and defence counsel were in one sense like ships passing in the night. The main dispute involved the relevance of evidence about an operating fleet that contained a large (though unspecified) number of Mercedes Benz buses. The prosecution contended that this was entirely irrelevant. The defence case was that the law in some unstated way armed the Bank with rights that could have, perhaps would have, enabled the Bank to assert a claim to the Mercedes Benz buses in the operating fleet. There was, however, no attempt to explain how that hypothesis impacted upon proof of the objective and subjective aspects of the particular offence charged. Any such attempt would have been fraught with danger.

44 At one stage defence counsel went a step further. He put to the jury that when the receivers went in in April 2003 the Bank “relied on all their documents and all their rights and they got what they bargained for. No suggestion that they didn’t get the buses that were in the possession of the company at that time” (Tr p515).

45 In the absence of the jury, the Crown Prosecutor took objection to this submission. There was, he submitted, no evidence of that matter (Tr p517).

46 Her Honour quizzed defence counsel as to what he meant by the statement that the Bank got what it bargained for. Counsel said that he had conceded that “the numbers were wrong. That is quite clear. However, that does not mean, your Honour, and it is something that I would certainly press, that the buses did not exist. That is the Crown argument. It is not the only argument.” (Tr p517).

47 Her Honour indicated that she was troubled because she did not know how she could sum up the defence arguments to the jury because she did not understand them. She put to counsel that proof that there were a lot of King Bros buses going up and down the North Coast “doesn’t take you anywhere”.

48 The Crown Prosecutor maintained his stance that there was no evidence that the Bank “got the buses in the end”. This had never been put to any witness. The defence argument ignored the particular event pleaded as constituting the fraudulent act in the indictment (Tr p519).

49 There was the following exchange (Tr p519):

HER HONOUR: Mr Crown, I have some sympathy with what you are putting to me. If you want to put something specific to me, please do so. At the moment my inclination is to just leave the whole thing and leave it to the jury to sort out, whether the arguments are or are not based on the evidence.
CROWN PROSECUTOR: That doesn’t bother me. Quite frankly I’m yet to be convinced that submissions in closing address really help the jury much anyway. But I will leave that to your Honour. I want to be clear in my view there is no factual basis for the submissions put by my friend.
HER HONOUR: My inclination is to say nothing about the addresses for the reasons I have given, and to say nothing by way of correction or anything of that nature. If anybody wants me to do anything different they should say so. When we resume – I think we will come back at ten past two – then if you want to say anything further about the summing up you should say so.

50 Mr Wallach reiterated that he did not agree with the Crown submission as regards the lack of evidence. He pointed to the testimony of Mr Bird who had been of view that the buses which were to be the subject of the transaction were the buses he had seen on the road (Tr p519, when read with the passage at Tr p518 lines 10-19).

51 Mr Wallach said that he did not want to take the matter any further other than to put it on the record.

52 Pausing there, the evidence of Mr Bird to which defence counsel referred really went no further than showing that the Bank had been defrauded in the manner charged. Its officers had been led to believe that the 144 buses specified in the Tax Invoice formed the Mercedes Benz component of the actual operating fleet.

53 After the luncheon adjournment the Crown Prosecutor reiterated his objection to defence counsel having suggested to the jury that the Bank ultimately got its hands on “the buses”. He asked the judge to tell the jury that there was no evidence of this.

54 Mr Wallach responded by pointing to the evidence that the Bank appointed receivers in April 2003.

55 A little time later, the judge told defence counsel that she did not think that the evidence in any way supported the assertions that were made to the effect that the NAB lost nothing from this arrangement. She added (Tr p522):

But I don’t think that it would be very desirable for me to buy into it in any direct way. What I am thinking of doing is in the course of my summing-up I normally just make some observations about counsels’ addresses. Normally I say that [sic] , counsel have referred to in relation to the evidence – I might cross that out and instead just say that obviously the jury should consider when [sic] counsel have put. I just think of something along the lines that counsel’s arguments are important or something but the case must be decided on the evidence and in so far as counsel may have strayed from the evidence it’s important that they decide the case on the evidence as presented to them, something like that?

56 There was further discussion in the course of which both counsel agreed to the following direction being put to the jury in the present context:

I now turn to the role of counsel. What counsel said to you is not itself evidence. You must decide the case on the evidence. You should consider the evidence you may disagree with their arguments, you may disagree with them, you make take a totally different approach to the evidence and approach it as being suggested by none of the counsel.

57 It will be seen that this became in effect what is recorded in §13 of the summing up.

58 Mr Wallach then resumed his address to the jury and put submissions in relation to the appellant’s good faith and good character. He continued (Tr p524-5):

This was a business, a real business. Every person who was involved in it at the time in December 2000 saw the business. They saw buses, they saw people being transported by buses to school, to work, up and down the north coast. There is no doubt about that. To say the buses didn’t exist, because on paper it didn’t exist, it simply flies on the fact of reality. They were there and the NAB knew what it was that was going to be the subject of this transaction, it was Mercedes Benz buses of Kings Bros group. Anthony King was confident enough of the deal. He certainly put his own assets on the line as well in relation to all of that. That is your best gauge, the best indication of what was happening.
Ladies and gentlemen, when you take all of those things into account, and when you consider that no way would the NAB allow this transaction to fall over because of errors on paper, when you take into consideration that had King Bros Holdings tried to repudiate that arrangement after 19 December, the NAB would have been there in a flash to exercise its rights. And that was the real thing that happened, and they exercised its rights with its assets over the company, and that is the real world that exists not on paper.
On all of those things, ladies and gentlemen, I say on behalf of Anthony King that you would not find the charges against him proved beyond reasonable doubt, and that is really the cornerstone of everything that you would believe. Thank you.

59 Three grounds in the Amended Grounds of Appeal are pressed:

1. The trial judge failed to properly identify the issues to the jury.

2. The trial judge failed to properly put the defence case to the jury.

3. The conviction is unsafe and unsatisfactory as, on all the evidence, it was not open to the jury to be satisfied beyond reasonable doubt of the appellant’s guilt.

60 Senior counsel for the appellant began submissions in this Court with the statement that there was a single point in the appeal. That point was then stated, reformulated, narrowed and refined in the socratic hothouse of a well-argued appeal.

61 The nub of the complaint was that the defence case was not put to the jury in the summing up and/or that it ought to have occasioned a properly instructed jury to have a reasonable doubt as to guilt.

62 The case that was urged in this Court tracked the one advanced to the jury in the closing address of defence counsel although some variants of it tended to stray into new territory. As at the trial, the case was erected upon facts that were largely common ground, although their relevance was not.

63 The submission was that at all material times KHB (and/or its subsidiaries) operated a large transport enterprise involving buses in the “King Bros” livery plying between several depots on the north coast. Bank officers visited some of the depots in October 2000 and saw buses, many of them Mercedes Benz buses, operating as part of the enterprise.

64 It is, I think, common ground in the appeal that the appellant and other agents of KBH had represented to the NAB officers negotiating the loan facility that the actual buses in the fleet, along with any other substantial assets of the group, would form part of the NAB security through one or more of the forms of secured lending being negotiated and drawn up. The appellant seeks in effect to embrace this fact as a springboard for arguments that the Tax Invoice involved no more than a mere misdescription; alternatively, that the Crown did not establish the appellant’s bad faith with regard to it.

65 There were hints in the submissions in this Court that the prosecution may not have excluded to the requisite standard the possibility that the appellant might have been an innocent agent. These carry no weight, in my view. The appellant played an active role in the preparation of the Tax Invoice and its proffering to the Bank. He made the statutory declaration. As a shareholder, director and guarantor of the debts of KBH he had a personal stake in and derived an indirect benefit from procuring the money advanced by the Bank. He was the active organiser of the whole transaction from the KBH point of view. He gave no evidence suggesting mistake or some other exculpatory factor.

66 Cross-examination of the NAB officers Hadfield, Bird and Huey elicited from them that they had satisfied themselves that KBH was operating a fleet of Mercedes Benz buses from various depots along the north coast of New South Wales, as indeed was the case. The officers were also aware (as was the fact) that CBFC and Esanda each had an interest as lessor over an unspecified number of buses forming part of the fleet.

67 Whenever the cross-examiner endeavoured to press the NAB officers as to the actual size of the operating fleet, the officers stated that they had not counted the buses on the ground nor conducted their own enquiries to determine what buses were the subject of the existing arrangements with CBFC and Esanda. The picture that clearly emerged was that they depended on what had been represented to them by the KBH representatives, including the appellant, about these matters. The schedules were part of the information that led the officers to assume the existence of the buses referred to in them (see eg Mr Bird at Tr p186, Mr Huey at Tr p231, 232-5).

68 The appellant argued that the NAB always intended to acquire the actual fleet and that all that had happened was that there was a “misdescription” of the buses in the security documents. It was submitted that one of the bank securities was a fixed and floating charge and that this would have given the bank a claim over the company’s buses, a claim that was asserted in 2003 when the receivers were appointed. There was, the submission went, no fraud because title to the actual fleet passed. It was further submitted that the totality of the evidence suggested that title to the fleet was vested in CBFC and Esanda up until the time when it passed to the NAB upon discharge of the CBFC/Esanda debts.

69 Alternatively, senior counsel for the appellant submitted (in the broadest of terms) that the principles of the common law and equity were adequate to ensure that the NAB was able to get title to the Mercedes Benz buses in the operating fleet that were implicitly represented as having been sold to it. Attention was also drawn to a clause in the Master Lease Agreement (cl 2.3) empowering the Bank as lessor to amend incomplete or inaccurate descriptions in the Equipment Schedule. But these longstops do not negate the fraud that was practised, in my opinion. The right to rectify a mistaken VIN number in the Tax Invoice really depends on the “true” vehicle existing in the first place and it being capable of identification (see Mr Bird at Tr pp175-6).

70 These submissions failed to confront the gravamen of the offence charged and the legal elements of the crime established by s176A of the Crimes Act 1900.

71 Senior counsel for the appellant ultimately accepted that a deception that causes someone to get a poor title rather than a good title may still be a fraud. This concession was properly made and it shows why the argument about an actual fleet was a red herring.

72 The deception practised upon the Bank was that it was led to part with a large sum of money on the understanding that it was acquiring title to 144 Mercedes Benz buses with the chassis and engine numbers represented in the Tax Invoice. Those buses never existed. The fact that an uncertain number of different buses did exist as part of the KBH operating fleet would have been little comfort had any attempt to enforce a right to possession over the existing fleet been challenged by a third party capable of showing a better title to the buses in that fleet.

73 In a prosecution under s176A it is sufficient to establish the possibility of loss in the sense that the victim has been prejudiced in some aspect of its proprietary rights or the enforcement of those rights (Kastratovic (1985) 19 A Crim R 28 at 30-31; R v Negline, NSWCCA, Hunt, Enderby, Loveday JJ, 5 December 1990; Peters v The Queen [1987] HCA 7, 192 CLR 493 at 508[30]; Spies v The Queen [2000] HCA 43, 201 CLR 603 at 628[72]).

74 If the jury had been given a disquisition about the law of rectification and induced mistake the trial judge would have been entitled (I think required) to have pointed out the inherent difficulties and delay associated with equitable claims of that nature, and the ultimate irrelevance of the defence arguments.

75 Senior counsel for the appellant pressed the point that the defence case, weak as it may have been, ought to have been put to the jury and that the judge’s failure to have done so occasioned a miscarriage.

76 The following portions of the summing up are relevant to this particular complaint:

13. I now turn to the role of counsel, that is to say the barristers sitting at the bar table. What counsel said to you in their closing arguments, and indeed in opening argument, is not itself evidence. You must decide the case on the evidence. You should consider the arguments which counsel have put to you. You may agree with their arguments. You may disagree with them. Having considered the evidence, you may take a totally different approach to the evidence, an approach which has been suggested by none of the counsel. In this trial, you are the sole judges of the facts.
…
20. As a matter of practical reality, in this trial you must be satisfied beyond reasonable doubt that each accused deliberately defrauded the NAB by causing it to part with $44 million to purchase 144 buses from King Bros Holdings Pty Ltd when, to the knowledge of that accused, those buses did not exist.
21. That concept can be broken down into two matters. It would involve you being satisfied beyond reasonable doubt, first, that the specific 144 buses referred to in the transaction did not exist. The second matter that you will have to be satisfied of beyond reasonable doubt is that, if the buses did not exist, that each accused knew at the time that the company applied for and obtained the $44 million from the NAB that the buses did not exist. So it is – the buses did not exist and that the accused knew that at the time of the transaction. That is just my view on what you would find the real practical issues to be.
…
33. In considering what, if any, inference should be drawn about an accused’s intention at a particular time you should look at all of the circumstances, particularly what the accused said and did. In this trial, the intention of each of the accused is an element of the offence. It is central to the second element of the offence and it is something which the Crown must prove beyond reasonable doubt. The issue is whether you are satisfied beyond reasonable doubt that, at the relevant time, that is in the period – the indictment says 17 to 20 December, but we are talking about 17 to 19 December when the NAB paid the money over – whether you are satisfied beyond reasonable doubt that, at that time, 17 to 19 December, each accused intentionally acted dishonestly so as to cause detriment or loss to the NAB. In other words so as to cause the NAB to part with its $44m.
…
35. … So the Crown case then, in relation to those dealings, is that each accused must have known that the specific 144 buses described in the documents did not exist and directly and dishonestly pretended that they did exist so as to extract $44m from the NAB and inject those funds into King Bros Holdings Pty Ltd.
36. The Crown case is that the accused, each of the accused, deliberately persuaded the NAB to pay $44m for something that each of them knew did not exist. The Crown case is that such conduct is deliberately and obviously dishonest according to normal community standards. The Crown did not present any direct evidence of the intention of each accused but the Crown says that you would infer, you would draw an inference that each accused must have intended to dishonestly deprive the NAB of $44m.
37. Each of the accused argue that the Crown has not established beyond reasonable doubt that the buses did not exist. Each accused goes on to argue that the Crown has not proved beyond reasonable doubt that either accused intended to dishonestly deprive the NAB of $44m. The accused say that you will not draw the inference beyond reasonable doubt that that was the intention of either accused. In other words, you would not infer beyond reasonable doubt that either accused had the intention of dishonestly depriving the NAB of $44m.

77 Several points can be made at once:

(1) The addresses and the bulk of the summing up (including the portions quoted) occurred on the same day.

(2) No presently relevant redirections were sought at trial.

(3) Paragraph 13 is to all intents and purposes the agreed direction that was thrashed out in the discussion that took place in the absence of the jury towards the end of the address by counsel representing the appellant at trial. It was in one sense the compromise agreed upon as an appropriate judicial response to defence counsel’s submission that the Bank ultimately got “the buses”.

(4) The mental element put to the jury required them to be satisfied that the accused knew that the buses did not exist and intended to deprive the NAB of the $44 million on the basis of that knowledge. By omitting reference to reckless indifference the summing up was favourable to the appellant.

(5) There is no suggestion that the defence case was misstated or disparaged by the trial judge in the summing up. The complaint is that it was not adequately developed.

78 Subsequently, following a lengthy discussion with counsel, her Honour provided the jury with the following written direction about the mental element of the offence:

R v King
Element 2 – Intention to Defraud
Re each accused, the Crown must establish these matters beyond reasonable doubt.
1. The specific 144 buses did not exist.
2. The accused knew/believed that they did not exist.
3. In all of the circumstances as at 19 December 2000, the accused knew/believed that the NAB’s financial interests were – at least – placed at risk in that it was paying $44m for buses which did not exist.
4. By the standards of ordinary people, it was dishonest of the accused to represent to the NAB that the buses did exist.

These directions were agreed upon and it was confirmed that no counsel wished anything further on the matter of the requisite intent (Tr 14/09/06 p17).

79 In this Court, senior counsel for the appellant argued in particular that the direction in para 37 of the summing up failed to provide an adequate outline of the defence case. This complaint appears to assume that, if her Honour had reminded the jury of the “defence” as I have summarised it, she would not have pointed to its inadequacies and ultimate irrelevance.

80 In Domican v The Queen (1992) 173 CLR 555 six Justices of the High Court said (at 561, citations omitted):

… it is hardly necessary to say that as a reason for granting a new trial, after a conviction in a criminal case, it is not enough that the presiding judge has not mentioned to the jury all the matters which were set up on behalf of the accused as affecting probabilities. Whether the trial judge is bound to refer to an evidentiary matter or argument ultimately depend upon whether a reference to that matter or argument is necessary to ensure that the jurors have sufficient knowledge and understanding of the evidence to discharge their duty to determine the case according to the evidence. Consequently, the conduct of the case necessarily bears on the extent to which the judge is bound to comment on or discuss the evidence. Discussion or comment which is justified or required in one case may be neither required nor justified when a similar case is conducted in a different way.

81 This passage emphasises the need to examine a particular summing-up in the context of the particular trial.

82 There are statements in the authorities to the effect that a failure to state and/or elaborate factual arguments raised by the defence is different to a failure to present the legal framework of the prosecution and defence cases respectively (see Basto v The Queen (1954) 91 CLR 628 at 637-8, R v Smart [1963] NSWR 706, R v Lawrence (1980) 32 ALR 72 at 125). The failure to remind a jury of an aspect of the factual arguments relied upon by the defence may not necessarily entail miscarriage, particularly if closing addresses would be fresh in the minds of the jurors and if no redirection was sought.

83 R v Smart is instructive. The accused was convicted of misappropriating three cheques and the key issue was whether or not he acted with the authority of the main prosecution witness, Jordan. Jordan’s cross-examination ranged over a wide field of transactions involving other cheques; and the complaint on appeal was that the trial judge had failed to analyse, for the benefit of the jury, the questions of fact relating to them. The Crown case was that these matters were no more than “red herrings” that cast no light upon the issue of misappropriation of the three cheques that were the subject of the indictment. The summing up directed the jury as to the elements of the Crown case. The jury were reminded that the defence case was that the accused acted with Jordan’s authority when he appropriated the three cheques to his own use. On appeal it was argued that the summing up was inadequate.

84 In dismissing the appeal, the Full Court held that the trial judge’s decision not to analyse and dissect in detail the evidence on various particular issues of fact stemmed from the decision that those matters had been canvassed by counsel in lengthy addresses. The submission that the judge had, by silence, in effect endorsed the Crown argument that the matters relied on by the defence were mere “red herrings” was rejected (at 713). The judge had invited the jury to give the comments of counsel such weight as they thought they merited.

85 The Court (Evatt CJ, Sugerman and Walsh JJ) said that (at 713-4):

… it is a matter within the discretion of the presiding judge, as to whether he should put to the jury arguments upon particular issues of fact, as to give them “a weight and a dignity and importance” which otherwise they would not have. He must, of course, explain what are the essential matters that have to be proved and he must put what is the accused’s defence or contention as to the essential matters. In our opinion this was done in the present case, as appears from the passages we have quoted. The critical questions for decision were the arrangement and the terms under which the appellant took the cheques and banked them, and whether his dealings were dishonest or innocent. These matters were adequately explained.

86 Towards the conclusion of the relevant portion of the judgment, their Honours said (at 715, emphasis added):

We wish to guard against being taken to express the opinion that it is never desirable that a judge should address himself to details of the evidentiary facts. In some cases, and perhaps in most cases in which the facts are complex, it may be of very great assistance for the judge to review and comment upon the more important parts of the evidence, notwithstanding that this has already been done by counsel. For it may often be that the addresses of counsel have put matters in a way which has over-emphasized or even distorted some aspects of the case, and has failed to relate these to other aspects or, in some other way, has so put the case to the jury as to make it desirable that there should be an objective treatment of these matters by the judge in the interests of justice and of the ascertainment of the truth. In many cases such a treatment of the case by the judge may assist the Crown case rather than that of the accused. The object of it should be, of course, to seek to put the different aspects of the evidence in proper perspective.

87 Applying these principles, I am satisfied that there was no miscarriage in the present case.

88 There is no complaint in the present case about the directions the jury were given as to the matters which the Crown needed to prove and as to the onus and standard of proof.

89 The conviction rested upon clearly established facts that were barely challenged at trial. I have analysed and summarised the evidence earlier in these reasons. To the extent that the appellant presses a free-standing ground of appeal to the effect that the conviction was unreasonable having regard to the evidence and that the jury ought to have held a reasonable doubt as to guilt, I would also reject such complaint.

90 I consider the appellant fortunate that her Honour did not respond to the arguments in the summing-up with directions that they were in part unsupported in the evidence and in substance irrelevant to the issue tendered in the indictment. There was no evidence to support the idea that the NAB ever obtained title to, let alone possession of, the 144 buses referred to in the Tax Invoice. And the idea that the entries were a “mere misdescription” was quite untenable.

91 The so-called defence case to the effect that the NAB obtained title to whatever were the Mercedes Benz buses in the fleet as at December 2000 simply failed to address the fraud practised by the Tax Invoice, supported by the appellant’s statutory declaration, in representing that the buses in the fleet were those identified in the invoice.

92 For the judge to have spelt out the forensic difficulties facing the Bank in consequence of the false Tax Invoice would have done untold harm to the defence. One is minded of the observation by Wells J in Donald (1983) A Crim R 47 at 56 that “the defence was probably well served by the omission, because the learned judge could hardly have mentioned the argument without drawing attention to the gaps in the evidence that rendered it inconsequential”.

93 Defence counsel made an informed and understandable decision not to seek a redirection that would have involved her Honour elaborating, if she could understand it, the defence case as propounded in the closing address. Counsel negotiated and agreed upon the direction found in para 13 of the summing up.

94 The appellant gave no evidence at the trial or (it appears) in the sentencing proceedings. To this day one can only speculate as to his motives in proffering the patently false invoice. But such matters go, at most, to mitigation. They do not address the allegation of fraud that was proffered and proved.

95 The appeal should be dismissed.

96 SIMPSON J: I agree with Mason P.

97 LATHAM J: I agree with Mason P.

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