R v Winfield, Chandler & Lipohar No. Sccrm-95-216 Judgment No. S6027

[1997] SASC 6027

R v WINFIELD CHANDLER & LIPOHAR

Lander J

The Information

The accused are charged upon information with conspiracy to defraud.  The particulars of the offence are:

“Mark Jeffrey Winfield, Ian David Chandler and Edward Lipohar between 1 November, 1991 and 7 March 1992 at Adelaide and other places, conspired together and with Roosevelt Tan and Jack Samardzija to defraud Collins Street Properties Pty Ltd of an incentive payment in the sum of about $6,500,000 by falsely representing that P T Mecosin (Australia) Ltd was an authorised representative of P T Mecosin Indonesia and that either P T Mecosin Indonesia or P T Mecosin (Australia) Ltd intended to comply with the terms of a lease agreement in relation to part of the property situated at 333 Collins Street, Melbourne, Victoria and that a Krung Thai Bank promissory note of an alleged value US$10,000,000 proffered as security was a good and valid negotiable instrument.”

When the accused were first arraigned they were also charged with a second offence of attempted false pretences. 

Previous Hearings

In October and November of 1995 I heard a number of applications on the part of each of the accused in relation to voir dire matters, and an application on behalf of all of the accused that this court lacked jurisdiction to hear this matter. I determined, on 3 November 1995, that the court did have jurisdiction and I dismissed the applications made under Rule 8 of the Supreme Court Criminal Rules 1992 for an order quashing the information on the ground that the information did not disclose an offence triable in the courts of South Australia. (R v Winfield, Chandler & Lipohar (1995) 65 SASR 212).

Trial By Judge Alone

At that time when each of the accused were arraigned they elected to be tried by Judge alone pursuant to Section 7 of the Juries Act. Subsequently a new information in the terms mentioned above was laid against each of the accused. When the matter came before me again for the trial of the matter, each of the accused, through their Counsel, made an oral application for the matter to be tried by Judge alone. So as to avoid any suggestion that the previous election, which had been made upon an earlier information, was no longer valid, I made an order under the rules made under the Juries Act dispensing with the requirements of those rules. By that order I treated the oral application as a fresh application for trial by Judge alone, and acceded to the application.

Hereafter are my reasons for reaching the conclusions which I have arrived at in relation to this charge.  They are necessarily lengthy because the trial proceeded over 7 weeks, some 2,500 pages of transcript were taken and more than two hundred and fifty exhibits were tendered, totalling more than a thousand pages.

General Directions

In arriving at my conclusions, I have directed myself in accordance with the law in relation to all of the matters which a jury would ordinarily be directed before retiring to consider its verdict.

I have had regard to the fact that all of the accused are entitled to have a fair trial according to law.  I have reminded myself that the burden of proving the charge lies wholly upon the Crown and no burden at all lies upon the accused.

If the accused makes or points to an explanation which is consistent with his innocence he does not have to prove it.  It is the Crown that has to disprove it or show that it is irrelevant, otherwise the Crown will not have proved its case.

I have not overlooked that each of the accused is presumed to be innocent until at the conclusion of the hearing the evidence establishes his guilt.  I have regard of course to the standard of proof that lies upon the Crown and that the Crown must prove each and every element of the offence beyond reasonable doubt.  Where I make a finding of a particular fact or speak of being satisfied of any matter I have reached that finding having been satisfied beyond reasonable doubt.

I may only find the accused guilty if at the end of the day I am satisfied that the Crown has proved each and every element of the charge beyond reasonable doubt.

If I am satisfied that there may be an explanation consistent with the innocence of the accused in respect of this charge, or if at the end of the day I am unsure where the truth lies then in those circumstances I must find that the charge has not been proved to the level of satisfaction required by the law and must acquit R v Calides (1983) 34 SASR 355.

Crown Opening

In opening the case Mr Boylan, who appeared with Mr Kimber, asserted that the Crown would prove its case by evidence directly relevant to the charge and by evidence in the nature of similar fact evidence in relation to two other conspiracies, which Mr Boylan asserted were of the same nature but more particularly demonstrated knowledge on the part of each of the accused (in different ways), of the falsity of representations that each of them made in relation to the subject matter of this charge.  The Crown asserted, in its opening, that there were three conspiracies each of which was to obtain cash incentives in relation to lease agreements for prestige buildings, being No. 1 O’Connell Street and the Gateway in Sydney and 333 Collins Street in Melbourne and that there were three conspirators common to each of the three conspiracies.  They were the two persons mentioned in the particulars in the information, Roosevelt Tan and Jack Samardzija and the first accused Mr Winfield.  The Crown further contended that the accused Mr Lipohar was also a conspirator in relation to the second conspiracy (the Gateway) and as well the subject matter of this charge.  It was alleged that the accused Mr Chandler was a conspirator in relation to this charge only.

Witnesses

The Crown called a number of witnesses directed to what they said were the three conspiracies.  Leaving aside the evidence of Mr Stockley, Mr Beal, Mr Peter Winfield and Mr Riebeling which I shall discuss separately, I have no reason to believe that any of the other witnesses did other than attempt to help me to arrive at my verdict.  I specifically accept all of those Crown witnesses in all respects unless I otherwise indicate in the reasons that follow.

The Crown called a forensic scientist, Mr Riebeling.  The accused, Mr Winfield also called an expert forensic scientist, Mr Gary Storey.  For reasons which I later indicate I have preferred the evidence of Mr Riebeling to that of Mr Storey.

Kenneth John Stockley and Paul Andrew Beal are former associates of the accused, Mr Mark Winfield.  Prior to October 1994 all three were close friends and all three were involved in a business which was conducted under the name of My Life Corporation Pty Ltd (My Life).  My Life Corporation was originally owned by Mr Stockley and his wife.  That business commenced in October 1991 and traded until early 1996.  As the facts will show in due course, Mr Winfield was bankrupt from February 1991 so was unable to participate in the business as an investor.

Sometime in April 1994, in circumstances which appear unusual, Mr Winfield became a fifty per cent owner of My Life.  To that point in time Mr Beal had been employed in the business.

In September/October 1994, Mr Winfield resigned from the Company after a disagreement with Mr Stockley and some employees in relation to the method of marketing the company’s product and Mr Beal became a minority shareholder in the company.

The resignation was accompanied by a good deal of acrimony and in due course there was litigation between Mr Winfield and Mr Stockley.  That litigation was settled.  It appears however that other litigation was commenced by the Trade Practices Authority and by the Federal Police.  It is probable that that litigation was instigated by Mr Winfield.  I do not conclude anything adverse to him in that respect but merely recount the fact.

In due course under the weight of investigations, litigation and prosecution My Life collapsed.  As a result of that collapse Messrs Stockley and Beal lost their investments.

I have no doubt that both of those gentlemen are antagonistic to Mr Winfield.  I think as much was established in cross examination.  Moreover, the accused Mr Winfield called Mr Mountford who gave evidence of the antagonism shown by Messrs Stockley and Beal to Mr Winfield.

The matter is somewhat more complicated, because as well as there being antagonism between Messrs Stockley and Beal and Mr Winfield, there is also a good deal of antagonism and ill feeling between Mr Mountford, who was called by Mr Winfield, and Mr Stockley and Mr Beal.

In those circumstances it is a little difficult to discern how much part ill feeling has played in the evidence of Messrs Stockley, Beal and Mountford and whether in fact any of their evidence has been coloured, influenced, exaggerated or even invented by reason of that ill feeling.

In respect of the witness Mr Stockley there is a further complication.  He declined to answer a number of questions claiming privilege against self incrimination.  Whilst he was entitled to claim that privilege in respect of the matters which he did, it means of course that some aspects of his evidence are left unexplained.

I have taken especial care in my consideration of the evidence of Messrs Stockley and Beal and I have only used the evidence for the purposes which I identify in the reasons which follow. For the better understanding of my reasons it may be noted that I have placed more reliance on Mr Beal’s evidence than that of Mr Stockley.

I am sure that their evidence may be accepted in respect of an important aspect of this matter and that is whether any payments were made to Mr Winfield, following upon the Gateway transaction.

I specifically accept both of them in relation to their evidence of the payment of moneys in August and October of 1991, and for reasons that I will make clear when dealing with that aspect I reject the evidence of Mr Winfield.

Both men also gave evidence in relation to a number of conversations which occurred after March 1992.  Mr Mountford was called by the defendant to cast doubt upon the accuracy and indeed the veracity of that evidence.  I will discuss that evidence in due course.

The accused’s brother Peter Winfield was also called.  He also became a minority shareholder in My Life in October 1994, and he, like Messrs Stockley and Beal, lost his investment upon the collapse of My Life.  I think prior to that time he and his brother were quite close.  Indeed Mr Peter Winfield lived with Mr Mark Winfield and his family in 1991.  It is clear that the collapse of My Life has interfered with the fraternal relationship and there now exists a good deal of ill feeling between those brothers.

However I have no doubt that Mr Peter Winfield was a witness of truth and I do not believe that any ill feeling which does exist between the brothers in any way coloured or influenced the evidence which he gave.  I have accepted Mr Peter Winfield in all respects.

The Evidence Of The Accused

Mr Mark Winfield gave evidence.  Of course he was under no obligation to give evidence and in giving evidence he naturally presented himself for cross examination. Mr Winfield has no onus cast upon him in relation to the proving of this charge or the proving of any defence and what I am about to say ought not to be understood to be casting any burden upon him.

Mr Winfield was an unsatisfactory witness and I cannot accept any of his evidence except where it has been corroborated either by the evidence of another witness or by a contemporaneous accurate document.

I do not use Mr Winfield’s demeanour as a reason for rejecting his evidence.  It would be unfair, in the circumstances of this case, to conclude that he is a witness that ought not to be accepted, simply by reason of the fact he appeared nervous and at other times slow to answer and perhaps at other times evasive. The facts of this case covered a very long period of time and the case was burdened with a very large number of documents.  In those circumstances any witness would find it difficult to give evidence and I can well understand that an accused person would be nervous and sometimes slow to respond because of the factual complexities of the matter.  For those reasons I have not rejected his evidence by reason of his demeanor.

I have rejected his evidence because in many respects it is opportunistic, in a number of respects it is inherently improbable and on certain aspects is simply unbelievable.

In my opinion Mr Winfield’s account of the various transactions which I shall shortly examine was tailored to suit the documentary material tendered by the Crown.  In that respect I think his evidence was opportunistic.

In many respects it was, as I have said, inherently improbable.  He denied making any profit or receiving any benefit out of the Gateway transaction.  For reasons that will become clearer, I reject that evidence as being untrue.  His case was that in 1989 his employment with a property development company terminated as a result of the failure of that company following the 1987 stock market crash.  When he left that company he was owed a substantial amount of money.  By reason of non-payment of those moneys and for other reasons, which are unimportant, he became bankrupt in February 1991.  He remained in a state of bankruptcy until February 1994.  During 1991 he was obliged to support his wife and family on unemployment benefits.  His case was that he assisted Mr Samardzija in relation to the Gateway transaction which resulted in an incentive payment being paid of $1.25 million.  Some of those moneys were withheld, and other moneys were used to discharge mortgages, but still a substantial amount of money was received in that transaction.

He claims that he carried out his aspects of the transaction which involved him flying to Sydney on a number of occasions,  meeting people and preparing documents for no fee whatsoever.  He said that in due course a sum of $30,000 was paid to Mr Stockley by Mr Samardzija, who was then his friend, so that Mr Stockley would induce him to continue to do the work.  His case then was that he received nothing but Mr Stockley received $30,000 to induce him to carry on with the transaction.  I think his explanation in relation to that matter is inherently improbable.  There are other examples which I will detail in the reasons.

On some aspects I believe Mr Winfield lied.  I do not believe his evidence in relation to the payment into Mr Stockley’s business of three cheques in August and October 1991.  I believe those moneys were paid to the benefit of Mr Winfield.  I do not believe his evidence in relation to a signature appearing on a letter of 11 February 1992 and I do not believe his evidence in relation to the meeting of 5 March 1992.  More particularly I do not believe his evidence in relation to the incorporation of P T Mecosin (Australia) Pty Ltd.

I think his answer to Detective Glenister in the record of interview (Ex 244) when he said he had met Mr Lippy once or twice in Brisbane was false and deliberately so.  So also was his claim that he did not know Edward Lipohar’s first name.  It is clear on the evidence that he met Mr Lipohar in Sydney and went to lunch with him (Ms Shortall’s evidence).  I believe he lied about these matters so as to avoid a reference to the Gateway and so also to distance himself from Mr Lipohar.

I believe in a number of respects he lied.  However I have not used all of those lies as evidence of a consciousness of guilt because there are other reasons why he may have lied apart from this charge.

Indeed in relation to the payments of moneys which he said were made for the benefit of Mr Stockley but which I will find were made for his benefit, his status as a bankrupt would have prevented him from receiving those moneys.  That may have been the reason why he was untruthful about that.

In relation to the letter of 11 February 1992 I believe he lied for the purpose of subverting the evidence of Mr Riebeling because that letter was used by Mr Riebeling as an undisputed writing for the purpose of expressing his opinion in relation to other documents. 

There is however one matter where I have no doubt Mr Winfield has lied and has done so out of a consciousness of guilt.

In due course I will find that the incorporation of the Australian entity (P T Mecosin (Australia) Ltd) which entered into the Gateway transaction, and which was proposed to enter into the 333 Collins Street transaction was a sham and was obtained by the forgery of documents.

I have concluded, because I believe the evidence is overwhelming, that Mr Winfield was the author of a number of the incorporation documents and I believe his false denials in respect to his authorship arises out of a consciousness of guilt.  He has falsely denied that he was the author of those documents because he knew that if he was to admit that he co-operated in the incorporation of a sham company it may be readily inferred that he knew that everything that happened thereafter was in fact part of that same sham and a continuation of the false pretence.  I have not only concluded that his evidence in relation to that matter is a lie but I have concluded that it was a lie told out of consciousness of guilt.

Neither Mr Chandler nor Mr Lipohar gave evidence.  Indeed the Crown did not seek to tender any statement or record of interview in relation to those two accused.  I say immediately that I infer nothing from the absence of any statement or record of interview in relation to those two accused.  I cannot even infer, and I do not, that a statement or record of interview was not given.  There is simply no evidence in relation to that.

Neither Mr Chandler nor Mr Lipohar were bound to give evidence.  They have a right, given to them by law, to remain silent and to require the prosecution to prove its own case.  The onus is always upon the prosecution to satisfy the trier of fact beyond reasonable doubt that the accused is guilty as charged.  I cannot infer guilt by reason of the failure to give evidence.  Their failure to give evidence is not of itself evidence nor an admission of guilt by conduct, because they are simply exercising the right which any accused has to put the prosecution to proof.  Therefore the absence of evidence on the part of both Mr Chandler and Mr Lipohar cannot repair any deficiencies, if there are deficiencies, in the prosecution case against them.  Failure to give evidence cannot be used as a make weight.

However in some cases the Crown case calls for explanation or contradiction because there are facts peculiarly within the knowledge of the accused. This is one of those cases. I am entitled, in those circumstances, to more readily draw inferences adverse to Messrs Chandler and Lipohar where, being in a position to deny the allegations against them, they have failed to do so. In those circumstances their failure to give evidence is to that extent capable of strengthening the prosecution case against them by allowing me to more readily draw inferences adverse to them: The Queen v Weissensteiner (1993) 178 CLR 217.

As it happens I believe the failure of Mr Chandler to give evidence stands on a different footing to that of Mr Lipohar.  I think in relation to Mr Chandler the absence of evidence critical to the Crown case explains his absence from the witness box .  He was under no obligation to make up the deficiencies in the Crown case.  On the other hand there was sufficient evidence, in my opinion, for Mr Lipohar to give evidence and his failure to do so allows me to more readily draw inferences adverse to him than otherwise would be the case.

It seems to me that I can best approach this matter by firstly detailing the background information in relation to the charge and then dealing with each of the said to be conspiracies and making findings consequential upon them.

Roosevelt Tan

Mr Roosevelt Tan, although not charged on this information is alleged to be one of the conspirators.  He was an associate of Mr Artir Haslim and was commonly in the office of P T Mecosin Indonesia in 1991.  He had access to the facilities of the company and in particular the telephone and the facsimile machine and occupied an office for the greater part of 1991 at least until September.  Apparently Mr Tan conducted business with Mr Haslim and had Mr Haslim’s permission to use the office facilities as I have mentioned.

Mr Roosevelt Tan is well known to Mr Jack Samardzija.  The Crown has established by the tendering of a good deal of material the close links between Mr Tan and Mr Samardzija. 

Early in 1991 Mr Tan negotiated with Mr Samardzija relating to a proposal for PT Mecosin Indonesia to purchase and distribute a pharmaceutical product called Curaderm.  The accused, Mr Winfield assisted Mr Samardzija with this proposal by preparing letters and other documents.  However there is no evidence that Mr Winfield played a more significant part.  In particular, I accept that he did not have any direct dealings with Mr Tan at this time either personally, by telephone or in writing.

The evidence does not establish that Mr Winfield has met Mr Tan but he has, on his own admission, spoken to Mr Tan by telephone at least three times (TX 1921, 1974) with and without Mr Samardzija being present.  He was first introduced to Mr Tan by Mr Samardzija on speaker phone just prior to his visit to Sydney to inspect No. 1 O’Connell St.  The evidence also establishes that Mr Tan and Mr Winfield communicated directly with each other (e.g. Ex 154 RED19).

The accused Mr Lipohar did not give evidence but the Crown tendered evidence from which it might be inferred that Mr Tan was known to Mr Lipohar. A letter of 21 September 1991 shows Mr Tan and Mr Lipohar enjoyed a business association of a kind.  In early 1992 Mr Tan advised Mr Beetham, an Australian business associate, to contact Mr Lipohar to travel to Indonesia with him as part of a furniture importing business.  Mr Lipohar was not able to travel at that time but whilst in Indonesia Mr Beetham said that he witnessed Mr Tan writing a letter which made references to an Edward (Mr Lipohar’s first name).  The letter was tendered in these proceedings and indicates a reasonably close association between Mr Tan and Mr Lipohar.  I will deal with this evidence later in the case against Mr Lipohar.

There is no evidence of any communication between Mr Tan and the accused Mr Chandler.

Jack Samardzija

Jack Samardzija (who sometimes went under the name of Jack Sands) appears on the information as a co-conspirator and is, on the Crown case, involved to varying degrees in all three conspiracies.  It is necessary as part of the background information to these charges to identify him with special reference to the accused.

In 1983 or 1984 Mark Winfield, who was then a real estate agent, dealt with Mr Samardzija in relation to the sale of a building and then again in 1988 as part of a leasing arrangement. Mr Winfield said that Mr Samardzija set up a number of companies over the years including Dominion Bond, to which Mr Winfield was later appointed managing director, and Swiss Securities USA, a merchant banking company incorporated by Mr Samardzija in New York.  Mr Samardzija and Mr Winfield were both directors of that company and travelled extensively together.  It is clear that their association developed over the years between 1984 and 1991.

The relationship between these two men is somewhat unusual in that Mr Winfield worked for Mr Samardzija or his companies both before and after Mr Winfield’s bankruptcy and in various capacities for little or no remuneration.  Even more remarkable is the fact that, as Mr Winfield deposed (TX 1861), after Mr Winfield became bankrupt in February 1991 and was without income at all and was trying to support a wife and three children he carried out work for Mr Samardzija for no remuneration.

Early in 1991, after Mr Samardzija ceased to be associated with Dominion Bond he became involved in the Curaderm negotiations with Mr Tan.  Mr Winfield had a small part to play in that transaction. Swiss Securities and another company, Perfumes of Australia Pty Ltd,  were to receive the proceeds from the Curaderm agreement.  Mr Samardzija was made a director of the latter company for the purpose of signing an agreement with PT Mecosin Indonesia.  For reasons that are not important the transaction did not eventuate.  At the same time he also operated a business, Brisbane Classic Cars, a car yard owned by him located at Kangaroo Point in Brisbane.  In addition to Brisbane Classic Cars, Mr Samardzija was also a director and secretary of Tavgrove Pty Ltd which was the registered proprietor of  freehold residential dwelling at 385 Kessels Road, Robertson, Queensland, which was subsequently provided as security for the cash incentive offered in the Gateway transaction.  I will return to that in my consideration of the Gateway transactions.

Mr Samardzija was an acquaintance (to use a neutral term) of both Mr Chandler and Mr Lipohar.  As neither Mr Samardzija nor Mr Chandler gave evidence their relationship must be gleaned from documents tendered by the Crown.  The first time that the documents would indicate that they were known to each other is in November 1991 in relation to 333 Collins St Melbourne.  In the absence of direct evidence I am not prepared to infer that their relationship ante dated that time.  In November and December 1991 Mr Chandler wrote a series of letters on behalf of PT Mecosin in relation to the leasing of 333 Collins St.

Mr Winfield’s evidence suggests that Mr Samardzija and the accused Mr Lipohar (who was sometimes called Mr Lippy) were known to each other prior to 1989.  Mr Winfield said that he first met Mr Lipohar in either 1988 or 1989 in the offices of a warehouse which was leased by a manufacturing company owned by Jack Samardzija (TX 1765).  He also saw him at the Dominion Bond office in Brisbane in 1989.  There is other evidence that Mr Lipohar attended at the Gateway in September 1991 and afterwards, and that he was present at the same time as Mr Samardzija (TX 1918/19).

The Accused’s Knowledge Of Each Other

As I have already said Mr Winfield’s evidence was that he first met Mr Lipohar in either 1988 or 1989.  He borrowed money from Lipohar in 1990 although he said that Mr Samardzija facilitated that loan (TX 1920/1987). Mr Winfield and Mr Lipohar also met each other in September 1991 at the Gateway.  I find that they have known each other since 1988/1989.

Mr Winfield’s evidence was that he met Mr Chandler in 1989 when Mr Chandler came to Dominion Bank’s offices (TX 1736).  Although it may be suspected that Mr Chandler and Mr Winfield met again prior to 5 March 1992 there is no evidence to support that suspicion and no finding can be made that they had met again before 5 March 1992.

There is evidence that Mr Winfield knew of Mr Chandler from about 11 December 1991 when Mr Winfield was asked by Mr Samardzija to assist in the Collins Street negotiations.  It may also be inferred that Mr Chandler knew of Mr Winfield after that date.  I repeat however I cannot find that they had met each other or spoken to each other before 5 March 1992. 

There is no evidence that Mr Lipohar and Mr Chandler ever met or even spoke to each other.

P T Mecosin Indonesia

P T Mecosin Indonesia is a company incorporated in Indonesia and carries on business in Jakarta employing about 240 persons.  It was incorporated in 1961 and its business may be loosely described as the manufacturer and distributor of pharmaceutical and therapeutic products.  The company is a family company and various members of the same family have occupied position of directorship and governorship from time to time.

The present chairman of the company is Edward Salim Suwandi who has been the chairman of the company since 13 September 1991.  Prior to that date he was one of five equal shareholders in the company, but had not for many years participated in the affairs of the company except as a shareholder.  He has three brothers Artir Haslim, Bunan Djambek and Salim Soewanto.  Before the 13 September Mr Bunan Djambek was the Chairman of the company and Mr Artir Haslim was a Director.

Prior to this time the other equal shareholder was the mother of those four brothers.  In August 1991 two of the brothers Mr Suwandi and Mr Soewanto transferred their shareholding to their mother.  On the 13 September there was a meeting of the shareholders of the company as a result of which Mr Haslim and Mr Djambek resigned from further participation in the company.  Subsequently they also transferred their shareholding to their mother who has thereafter held 100 per cent of the shares.

In simple terms the company can be considered to have been under the governance of Mr Artir Haslim and to a lesser extent Mr Bunan Djambek prior to the 13 September 1991 and under the governance of Mr Suwandi since that date.

Incorporation of P T Mecosin (Australia) Ltd

It is an important aspect of the Crown case that the circumstances leading up to the incorporation of P T Mecosin (Australia) Ltd show that the incorporation of P T Mecosin (Australia) Ltd was a sham, because the documents upon which the incorporation was based were forgeries.  Indeed two particulars of the Crown case were that P T Mecosin (Australia) Ltd was never an authorised representative of P T Mecosin Indonesia and never intended to comply with the terms of a lease agreement in relation to the property at 333 Collins Street.

P T Mecosin (Australia) Ltd was incorporated on the 30 May 1991.  It was Mr Samardzija who instructed Matthew Neibling, an employee of Australian Companies Pty Ltd, to incorporate that company.  I set out the said to be subscribers to the Memorandum of the company:

Subscribers  Shares

........... P T Mecosin Indonesia  85,000

........... Roosevelt Tann  1,000

........... Swiss Securities USA Inc  12,000

........... Allan George Rainor  1,000

........... Peter Raymond Winfield

........... 395 Lofts Road

........... West Lake, Queensland 4074  1,000

Each of the corporate subscribers was obliged to affix its common seal to the Memorandum and to the Articles of Association.  The Memorandum and Articles of Association show a seal purporting to be the common seal of P T Mecosin Indonesia upon the document.  Each of the personal subscribers signed both the Memorandum and Articles of Association.

Evidence was led from Mr Suwandi that the seal affixed to the Memorandum and Articles of Association is not that of the Indonesian company.  He identified a seal on a different document showing the form of seal of the company.  I accept his evidence that the common seal of P T Mecosin Indonesia was not affixed to the Memorandum of P T Mecosin (Australia) Ltd.

I also accept his evidence that he carried out a check of the records of P T Mecosin Indonesia to determine whether that company was at any time before or after 13 September 1991 a shareholder in any Australian company.  I accept his evidence that there is no record in the Indonesian records of an investment in the Australian company.  In the circumstances I am prepared to find established beyond reasonable doubt that, contrary to the assertion in the Memorandum of the Australian company, P T Mecosin Indonesia was not a subscriber to that memorandum and never held an investment as shareholder in that company and at no time contributed $85,000 to the capital of the Australian company.

It follows that the memorandum contains at least the untrue assertion that P T Mecosin Indonesia was a subscriber and shareholder.

I also accept the evidence of Mr Suwandi that there is no record whatsoever of the Australian company within the records of P T Mecosin Indonesia.

More particularly I accept his evidence that at least after 13 September 1991, when he became Chairman of the Indonesian company, the Indonesian company had no plans to do any business whatsoever in Melbourne or anywhere in Australia.

I also accept his evidence that there is no record within the records of the Indonesian company that P T Mecosin (Australia) Limited entered into a lease with Permanent Trustee Australia Limited (the Gateway) on 12 August 1991 and in particular no copy of the lease agreement which was tendered (Ex 8).  The common seal on that lease agreement is however the common seal of the Indonesian company and I find that the signatures accompanying the seal are these of Artir Haslim and Roosevelt Tan.

It may be the case that Artir Haslim, who was then a director, was entitled to affix the common seal of the Indonesian company.  Mr Suwandi said that any member of the directors could use the company seal.  Apart from the directors, the secretary and the manager, the marketing manager and the personnel manager can use the seal (TX 47).  I am therefore not prepared to find that that document was not regularly executed in that regard.

The document is also signed by Roosevelt Tan who is described as secretary of the Indonesian company.  I am satisfied upon the evidence of Mr Arief Sempurno, the personnel manager of the Indonesian company, that Mr Tan was a close associate of Mr Artir Haslim and that he was regularly in the offices and on the premises of the Indonesian company.  Mr Tan apparently did “business things” with Mr Artir Haslim.  He operated out of his own office and used the telephone and fax machines.  Mr Suwandi has known Mr Tan since 1974 as a friend of Mr Artir Haslim.  He met him again in 1990/91 when Mr Tan was claiming to be writing “an autobiography” of Mr Haslims.  I accept Mr Suwandi’s evidence that Mr Tan was never an office bearer of the Indonesian company before 13 September 1991 or at any time thereafter. 

In the circumstances I find that Mr Tan was not authorised to affix the company seal of P T Mecosin Indonesia to the Gateway agreement.

Both Mr Suwandi and Mr Sempurno said that Mr Tan was not on the premises of P T Mecosin Indonesia after 13 September 1991.  I am not so sure that is right.  There is evidence that Mr Tan received communications at the fax number of P T Mecosin Indonesia after 13 September 1991 and that he was on the premises, but in the end nothing turns on that.

Lastly for the sake of completeness and to avoid doubt I find that the Roosevelt Tan described in the evidence of Mr Suwandi and Mr Sempurno is the Roosevelt Tan referred to in the particulars in the information.

One of the other subscribers to the memorandum is said to be Mr Roosevelt Tann whose name is spelt differently to the Roosevelt Tan identified in the particulars, and who was the associate of Mr Artir Haslim.  Another subscriber was Allan George Rainor who was not in Australia at any time in 1991 (Agreed Fact 2: Ex 219).  Another subscriber was said to be Peter Raymond Winfield which is not the name of the accused Mr Winfield nor was the address given that of Mr Winfield.  There are however some coincidences.  Peter John Winfield is the name of the accused’s brother and the address given is similar to that of the accused and his brother which was then 395 Loffs Road, West Lake, Queensland.

Mr Peter Winfield was called to give evidence regarding writing on a number of the incorporation documents (Exs 151-153).  He identified the writing and handwritten entries, which appeared on those documents, as those of his brother Mark Winfield, whilst denying writing any of the entries himself (TX 716-719). 

He also identified the accused’s handwriting on the Memorandum and Articles of Association of P T Mecosin (Australia) Limited (Ex 2) and on numerous other letters relating to the Sydney negotiations (Ex 154).

The evidence given by Mr Peter Winfield was objected to by counsel for the accused upon the basis that he did not enjoy sufficient expertise to identify the handwriting of his brother. I however allowed the evidence to be admitted upon the basis that the evidence showed that the witness had a degree of familiarity with the handwriting of the accused which would allow him to offer an opinion, notwithstanding he was not an expert. There is no doubt that there is a long standing practice allowing for the admission of such evidence and that practice was referred to and approved by the Full Court of the Supreme Court of this State in R v Mazzone (1985) 43 SASR 330 at 337. It may be as Bollen J pointed out in R v Mazzone that the weight to be attached to the evidence of such a witness will vary from witness to witness depending upon the degree of familiarity of the witness with the hand of the handwriting, which is sought to be identified, but that is another matter.

In my opinion the evidence was admissible and, in this case, having regard to the evidence of Mr Peter Winfield there was no doubt that he was well familiar with the handwriting of his brother and was, as a lay person, well able to identify the handwriting on the various documents to which he was directed.

The evidence therefore in my opinion was admissible and I am satisfied that Mr Peter Winfield’s evidence was accurate when he identified the handwriting of his brother on each of the documents to which he was referred and to which I have referred.

He also said that between February and May 1991 he lived with his brother and his brother’s family at Loffs Road in Brisbane and that when he left to go overseas on 22 May 1991 his brother was still living at that address.  The Crown established that at the relevant times the premises known as Loffs Road was owned by Mr and Mrs Mark Winfield. The witness returned to Australia on 14 September 1991 and resumed living with his brother but at a different address from Loffs Road.

The importance of that is that the Memorandum of Association gives the name and address of a subscriber Peter Raymond Winfield of 395 Lofts Road, Westlake, Queensland 5074.  The name and address have a remarkable coincidence to that of Mr Peter Winfield.  It is also worth noting that the Memorandum and Articles were prepared and executed when the witness Mr Peter Winfield was away overseas.  At the time that the company was incorporated the accused Mark Winfield was an undischarged bankrupt.  He would not have been entitled to own shares himself. 

The other matter of coincidence is the name.  The Crown established by the tender of extracts from the Registry of Births, Deaths and Marriages that Peter John Winfield was born on 17 February 1956 but that there was no record of a birth of Peter Raymond Winfield.  The birth date in relation to Peter Raymond Winfield used on the ASC documents corresponds with the birth date of Peter John Winfield.

Whilst there is no doubt a good deal of ill feeling now between the witness Peter Winfield and his brother, which was generated as a result of the accused’s retirement from the My Life Corporation and by reason of the subsequent failure of My Life (matters to which I have referred) for whatever reasons in January 1996, I am satisfied that Mr Peter Winfield did not allow whatever ill feelings he has for his brother to interfere with the accuracy of the evidence that he gave.  I accept his evidence in all respects and in particular in relation to the identification of his brother’s handwriting on the various documents to which I have already referred.

The Memorandum and Articles of Association (Ex 2) claim that Barry John Henderson of 136 Creek Road, Camp Hill, Queensland witnessed all of the signatures of the subscribers.  So also does the application for incorporation (Ex 153) claim that that same person witnessed the signature of Peter Raymond Winfield. The Prosecution established that no-one of that name lived at that address.  It also established that Barry John Henderson, a resident of 16 Francis Street, Corinda, Brisbane did not witness those signatures.  I am satisfied that Barry John Henderson did not witness the signatures of the subscribers to the Memorandum or Articles of Association and that he did not witness the signature of Peter Raymond Winfield on the application for incorporation.

Expert Evidence

The issue of handwriting on the incorporation documents becomes vitally important if, as the Crown contends, the fact that Mark Winfield wrote anything on the documents provides proof of his knowledge of the falsity of the incorporation  of P T Mecosin (Australia) Limited, proof of his knowledge of the non-association of P T Mecosin Indonesia with the Australia company and proof of his knowledge of Mr Jack Samardzija’s guilty association at least with Mr Roosevelt Tan.

Two handwriting experts gave evidence.  The Crown called Mr Riebeling a forensic scientist, specialising in handwriting since 1988 with the Forensic Science Centre.  Mr Mark Winfield called Mr Gary Storey who was employed for nine years by the Victorian Police Force as a forensic document examiner.  Since he resigned his commission as an Inspector in that police force he has practised privately as a forensic document examiner. 

Whilst Mr Boylan submitted that the evidence of Mr Riebeling is to be preferred to that of Mr Storey he also contended that even if I were to prefer Mr Storey’s evidence, there is sufficient in his evidence to support the Crown case. 

In arriving at the conclusion as to a preference for one expert’s evidence over another I have had regard generally to the fact that both witnesses were limited by the quality of the documents they were given to examine.  I am also minded to make an allowance for the fact that Mr Storey had physical trouble in hearing questions asked by counsel.  As a result of his hearing difficulties his opinion did not always relate directly to the question asked.  I have overlooked this infirmity in assessing his evidence.

Moreover, in determining which expert ought to be preferred it is important to note that the experts were given different instructions.  For example whilst Mr Riebeling used a signature on a letter from Mark Winfield to Mr Apps (Ex 116) as an undisputed writing of Mark Winfield that same signature was put to Mr Storey as a disputed writing.  As a result that particular Ex becomes fundamental to the Crown case.  Mark Winfield, in his record of interview, (Ex 244) acknowledged that he had prepared the letter (Ex 116) as he did in his evidence.  He did not, when interviewed and when shown the letter, deny that the signature was his.  However throughout the trial he maintained that the signature on the bottom of that document was not his but that of Jack Samardzija.  If I accept Mr Winfield’s evidence on this point Mr Riebeling’s conclusion that the P R Winfield signatures on the ASC documents were probably written by Mark Winfield cannot be accepted.  However this will not affect Mr Riebeling’s evidence as to the “Brian Gretton” printed writing on the ASC Forms 207 and 215 (Exs 149 and 150).

Not only were the experts given different premises upon which they were asked to rely they were asked to give different opinions.  Mr Riebeling was simply asked to give an opinion as to whether each signature or each piece of handwriting was that of Mr Mark Winfield, but Mr Storey was asked whether any of the disputed writings were written by Mark Winfield or Jack Samardzija.

Before going to matters of conflict it would be convenient to deal with matters of agreement.

Mr Storey agreed with the Crown’s expert in relation to a number of documents.  In particular, he opined both in his report and oral evidence that the handprinting on the ASC forms 207 and 215 (Exs 149 and 150) (Notification of Allotment of Shares and Notification of initial appointment of office holders) was probably written by Mark Winfield.  However he did add a rider to that opinion.  He said because the documents were hard copies of a microfiche reduction/enlargement of the original document, he was precluded from eliminating Jack Samardzija from having been the writer.

The rider to the opinion is a curious one.  I think it means no more than there is a possibility that someone else including Jack Samardzija wrote the documents.  His opinion properly understood is that he believes the accused Mark Winfield, probably wrote the words on those exhibits.

Mr Riebeling was of the opinion that it was highly probable the accused Mark Winfield wrote the words on those exhibits.  It was also his opinion that it was probable Mr Winfield was the author of other documents to which I will refer.

When that is taken together with the evidence of Peter John Winfield it can be reasonably inferred, and I am so satisfied, that the handwriting on Exs 149 and 150 is that of the accused Mr Winfield and that the name Brian Gretton and the address on those forms were written by Mark Winfield. 

Upon that evidence alone the Crown would have me find that not only had Mark Winfield seen Forms 207 and 215 (Exs 149 and 150) but all of the other incorporation documents (consisting of Exs 149 to 153) and their contents.  It was contended that the further inference from that conclusion is that Mark Winfield would have noted the false entries in relation to his brother Peter Winfield on three of the documents (Exs 151 through to 153).  It is suggested  that Mark Winfield could not have allowed for the coincidence that there was a different Winfield from his brother or himself living at Loffs Road with a date of birth the same as his brother involved in the same transaction and consequently he must have been aware that P T Mecosin (Australia) Ltd was a sham.

Alternatively the Crown submitted I ought to accept Mr Riebeling’s evidence that not only did Mark Winfield write the entries on Forms 207 and 215 (Exs 149 and 150), but he also probably wrote the P R Winfield signatures on the other ASC documents (marked Exs 151 through to 153) (TX 1348). It was submitted that that evidence, in conjunction with the evidence of Peter Winfield provides direct evidence of the authorship of all ASC documents.  From this I should infer that Mark Winfield made the false entries on the documents from which I would inevitably infer that, to Mark Winfield’s knowledge, P T Mecosin (Australia) Ltd was a sham.

The Crown submitted that there were two reasons why I ought to prefer Mr Riebeling’s evidence to that of Mr Storey.  The first related to the letter of 11 February 1992 (Ex 116 - the App’s letter) written on the letterhead of Mecosin Corporate Affairs and ostensibly signed by the accused Mark Winfield.  Mr Riebeling assumed the App’s letter was Mr Winfield’s signature.  Mr Storey assumed, because he was asked to make that assumption, that the App’s letter was a disputed writing.  He said in relation to that exhibit:

“I am of the opinion that whilst Mark Winfield has the ability and capacity to have written the signature it is probable he did not.

Further to the above opinion, Jack Smardzija also has the degree of pen control, ability and capacity to have written the questioned/disputed entry.”

The Crown argued that if I rejected Mark Winfield’s account of how that letter came to be signed and reached the conclusion that he did sign the letter then it would follow that I would have to at least question Mr Storey’s opinions on signatures.

Secondly the Crown argued that Mr Riebeling’s evidence showed a thoroughness in relation to his investigations that was not apparent in the evidence of Mr Storey.

The first of those submissions requires me to evaluate the evidence of Mr Winfield in respect of the circumstances leading to the signature being placed on the Apps letter.  If I conclude that he did sign the Apps letter then it would follow that I would have less confidence in Mr Storey’s opinion.  If on the other hand I conclude he did not sign that letter then it must follow that I would have less confidence in Mr Riebeling’s evidence because he assumed, as he was asked, that this was an undisputed writing of Mr Mark Winfield.  For reasons which I will detail later I reject Mr Mark Winfield’s evidence in relation to the Apps letter.  I am satisfied that, contrary to Mr Winfield’s evidence, he wrote his signature on the Apps letter.  I reject his evidence that Mr Samardzija wrote Mr Winfield’s name on that document.  Consequently it follows that I believe Mr Riebeling was right to rely upon the letter for the purpose of examination.  I also accept Mr Peter Winfield’s evidence that the handwriting is that of his brother.  It follows that, in my opinion, as this handwriting was placed upon the letter by Mr Mark Winfield I reject Mr Storey’s opinion to the contrary.  I accept that in those circumstances having concluded that I cannot accept his opinion on that document I ought to pay special attention to his opinions as to other documents.

I will return to the rejection of the accused Mr Winfield’s evidence on this matter.  It is enough to say, at this stage, that on a number of matters I found the accused’s evidence quite unconvincing and on some matters that his evidence was untrue.  This is one example of the latter type.

The Crown’s second submission was that a comparison of the detailed opinions of Mr Riebeling and Mr Storey on specific features or characteristics of the writing gives rise to the conclusion  that Mr Riebeling should be preferred as a witness.  An example given by Mr Boylan is Mr Riebeling’s analysis of the upper case letter A in a variety of documents. 

Mr Riebeling placed emphasis on the distinctive upper case A in Mr Winfield’s writing.  In cross-examination Mr Storey conceded (at TX 2022) that the “A” in the words “BARRY JOHN HENDERSON” found in the Memorandum and Articles of Association (Ex 2) and ASC Form 201 (Ex 153) had the very characteristic which Mr Riebeling had identified.  This was in direct contradiction to a previous opinion given by Mr Storey that it was highly probable that Mr Samardzija wrote the printed writing on the Memorandum and Articles (Ex 2).  The Crown asks that I infer from this evidence that something so characteristic of Mr Winfield’s handwriting which, on Mr Storey’s own evidence, is not characteristic of Mr Samardzija’s writing, rules out the possibility that Mr Samardzija wrote the entries containing the words “BARRY JOHN HENDERSON” on those Exhibits (Ex 2). 

In addition Mr Boylan submitted that, in giving evidence regarding ASC Form 215, Mr Storey was not willing to rule out the possibility that Mr Samardzija had written on that document even though he had earlier acknowledged that it was as likely as “monkeys typing up Shakespeare”.  From that I can infer that Mr Storey was prepared to allow the inherently improbable to stand in the way of his opinion.  There is also the further evidence (TX 2050) that features of Mr Samardzija’s handwriting used by Mr Storey to support his opinion on the “BARRY JOHN HENDERSON” entries were not present in the important writing on Form 215 (Ex 150). 

I accept the Crown’s contentions in respect of their criticism of Mr Storey’s evidence.  I believe that in some respects Mr Storey allowed matters of almost impossibility to stand between him and an opinion (monkeys and Shakespeare); in other respects he contradicted himself and in another respect his opinion was wrong.  That of course does not make Mr Riebeling’s opinions necessarily correct.  It is not enough that I simply prefer the evidence of Mr Riebeling.  Before I can use the evidence I must be satisfied with the opinion expressed.  I am so satisfied.  Mr Riebeling not only gave his evidence in a convincing manner, the evidence itself was convincing.  I accept his evidence and necessarily reject the evidence of Mr Storey where it conflicts.

It is important to note that Mr Riebeling considered a variety of other documents and came to the conclusion that they had been written, with varying degrees of probability, by Mr Winfield.  His opinion on those other documents has not been challenged.

In conclusion, I accept Mr Riebeling’s evidence as to the degree of probability that Mr Mark Winfield wrote all of the ASC documents and was the author of other documents which I will come to in due course.

Conclusion on Incorporation

The accused Mr Winfield denied that his handwriting appeared on any of the incorporation documents.  The expert he called offered the opinion that the hand printing on two documents was probably that of Mr Winfield.  The expert called by the Crown, whom I accept, was of the opinion that his handwriting appeared on a number of documents including the Memorandum and Articles of Association.  Mr Winfield’s brother, who I also accept, offered the same opinion, albeit based on familiarity rather than scientific examination.

I disbelieve Mr Winfield.  I find it established beyond reasonable doubt that Mr Winfield was a party to the incorporation of P T Mecosin (Auistralia) Ltd and that he assisted in the compilation of the forms submitted to the ASC.  He also assisted in the forgery of the signatures on the Memorandum and Articles of Association.  Particularly he assisted in the affixing of a seal to the Memorandum and Articles of Association which was not that of P T Mecosin Indonesia.

Thereafter it follows he knew that the Australian company was a corporation based on deceit.

Conspiracy

“Conspiracy is the agreement of two or more persons to do an unlawful act or to do a lawful act by unlawful means and it is the fact of the agreement, or combination, to engage in a common enterprise which is the nub of the offence.” Ahern v The Queen (1988) 165 CLR 87 at 93.

The criminal conspiracy alleged against the accused is an agreement to defraud Collins Street Properties Pty Ltd.  I must be satisfied of course that there was an agreement between the accused and Mr Tan and Mr Samardzija as identified in the particulars and that the agreement was for an illegal purpose namely to defraud Collins Street Properties Pty Ltd.  I must also be satisfied that the parties intended the agreement be carried out and that they knew at the time of the agreement that the purpose was illegal or unlawful.  It is necessary that the Crown establish that each of the accused assented to the unlawful agreement by becoming a party to the agreement and agreed to play some part in carrying out and procuring the defrauding of Collins Street Properties Pty Ltd.

In particular the Crown must establish that at the time the parties agreed to effect the crime or the unlawful purpose that they knew that the purpose of the agreement was criminal or unlawful.  To that end the Crown must establish that there is a wrongful intent by the parties to carry out a plan they know to be unlawful.

I must also have regard to the case against each of the accused separately and in accordance with the direction in Ahern v The Queen supra at (100).

“In our view, the test adopted in Tripodi is the appropriate one.  Where an accused is charged with conspiracy, evidence in the form of acts done or words uttered outside his presence by a person alleged to be a co-conspirator will only be admissible to prove the participation of the accused in the conspiracy where it is established that there was a combination of the type alleged, that the acts were done or the words uttered by a participant in furtherance of its common purpose and there is reasonable evidence, apart from the acts or words, that the accused was also a participant.  The words “reasonable evidence” have provided a standard which has been applied without difficulty in this country for some years, at least in cases where preconcert has been the basis upon which evidence has been led in cases other than conspiracy, and there is no reason to suppose that if it has provided an appropriate test in those cases, it will not do so where conspiracy is charged.  If there is any difference between “reasonable evidence” and “a prima facie case”, which in this context we very much doubt, then the words “reasonable evidence” are to be preferred providing, as they do, a test of admissibility for which no more precise expression is needed.  The aim in limiting the use which might be made of a co-conspirator’s acts or declarations is to exclude such evidence when its admission might operate unfairly against an accused.  For this purpose, the element of discretion implicit in the term “reasonable evidence” is desirable.”

In due course I must determine the “reasonable evidence”, admissible against each of the accused, and only if satisfied that there was reasonable evidence that each of the accused were participants allow the evidence of any act or utterances in furtherance of the common purpose by any other participant to be admitted against that accused.

I turn now to consider the Crown’s allegations relating to the three conspiracies.  I will refer to the facts of each as they unfolded.  In respect of the greater part there is no dispute about the facts.  The facts which I relate may be taken to be my findings.  Where there is a matter of dispute I will discuss the dispute and endeavour to make my findings clear.

O’Connell Street

The first of the alleged conspiracies is in relation to O’Connell Street.  Sometime prior to the 31 May 1991, telephone contact was had with Duncan Overton, who was then an employee of Chestertons, which is a Real Estate firm in Sydney.  It is not clear who made the telephone call.  It was either the accused Mr Winfield or Mr Samardzija.  As a result of that telephone conversation, either Mr Overton or Matthew Ellison, who was also an employee of Chestertons prepared a list of buildings complying with the criteria identified in that telephone conversation for leasing space in a prestige building in Sydney.  Arrangements were made in that telephone conversation to meet the accused Mr Winfield at the Intercontinental Hotel in Sydney.

A meeting took place in the morning of the 31 May between Messrs Ellison and Overton and Mr Winfield.  At that meeting the list which had been previously prepared was published to Mr Winfield and there was discussion in relation to it.  It was agreed that the two gentlemen from Chestertons would show Mr Winfield a number of the buildings mentioned in the list during that day.

At that first meeting Mr Winfield told them that he was representing P T Mecosin (Australia) as a consultant.  Another person was present during the inspections which took place in the early afternoon and that man was identified to Mr Ellison and Mr Overton as Jack Sands.  A number of inspections took place and one of the buildings inspected was at O’Connell Street.

During those inspections Mr Overton and Mr Ellison were told that P T Mecosin was a large Indonesian pharmaceutical organisation specialising in the manufacture of amongst other things, cough mixture.  Further, they were told that the company was looking for offices to open a business in Australia.  Moreover they were told that the company was looking for space, in a prestige building in the Sydney city business district area, in the order of 1500 to 1800 square metres. 

Later that evening a further meeting took place at the Intercontinental Hotel at which those same persons were present, together with, for at least part of the meeting, a Mr Henry Tate.  At that third meeting for the day Mr Ellison was handed a business card by Mr Winfield which I set out:

Swiss Securities U.S.A. Inc.

INTERNATIONAL MERCHANT BANKERS
21st Floor, 237 Park Avenue,
New York, New York. Zip 10017
Ph: (212) 5511402 Facsimile: (212) 6978486

MARK. J. WINFIELD

NEW YORK . LONDON . FRANKFURT . HONG KONG

They were also told that Swiss Securities USA Inc was Mr Winfield’s previous employer and that he had not had the opportunity to have new or relevant business cards printed prior to the meeting.

It was either at this meeting or earlier in the day that Messrs Ellison and Overton were told that Mr Winfield and Mr Sands wished to pursue negotiations in respect of 1 O’Connell Street being one of the buildings inspected that day.  They were told that P T Mecosin was anxious to conclude a deal because of the nearness of the end of the financial year.  It was also said that the company wished to acquire or build a factory in the Sydney area but that that was a matter with which Chestertons could not help them. 

I should say something about the property market in 1991.  The property market at that time was sluggish.  There was an over supply of rental area in the City Business District Area.  As a result of that over supply, landlords were obliged to offer incentives to prospective tenants.  Those incentives usually took the form of a rent holiday or, alternatively a contribution by the landlord to the fitout of the building.  In unusual circumstances some landlords would pay cash, by way of incentive, to the prospective tenant.  The expected incentive was in the order of 30 to 35 per cent of the face rental of the building.  Landlords were more inclined to offer incentives rather than to lower the rental, because a lower rental would adversely affect the value of a building, because the value of a building, to a certain extent, depends upon the capitalisation of the rent.  Not only were landlords anxious not to acknowledge the potentiality of a lesser rental income, but so also were lenders to landlords because such an acknowledgment would affect the valuation of their security. It was therefore common practice in Sydney and in other parts of Australia for landlords to keep the face rental high, but to offer incentives for the purpose of attracting tenants.

At this meeting Mr Winfield and Mr Sands (as he was called) stressed that P T Mecosin was anxious to reach a concluded position in relation to the rental of a building as soon as possible.

To that end Mr Tate who was a director of Northbourne Developments Limited (Northbourne) which was the project manager of 1 O’Connell Street and 7 Macquarie Place was asked to join the meeting.  It was a function of Northbourne to acquire properties in the Sydney area and to put those properties into special purpose trusts and then arrange for the development of the property by building on the property.  It was a function of the developer to manage all of that and in particular to arrange for the leasing of the building as soon as possible, and indeed prior to final construction if possible.  As at 31 May 1991 the building at 1 O’Connell Street was nearly completed.  It was a large building of 32 storeys and the total size was about 38,000 square metres.  It was, at that date, largely tenanted although there were four floors which remained untenanted.  It was a prestige building and probably one of the best buildings in Sydney at that time.

When Mr Tate joined the meeting, he was shown the card to which I have referred and he was told that Swiss Securities were assisting P T Mecosin.  He was also told that the company was a pharmaceutical company which wanted to commence business in Australia, and it had reached a decision that it preferred to have a presence in Sydney rather than Melbourne.  Mr Winfield did most of the talking at this meeting and he gave to Mr Tate a document headed “Supplementary Documentation Submission for Australian Accommodation” dated May 1991 (Ex 9).  That document included information relating to P T Mecosin’s history in Indonesia and also information relating to Australian expansion strategy.  It was said that the company was looking for accommodation in either Sydney or Melbourne and professed no preference for either city.  It was said that the company would require a lease period of not less than ten years with a floor area of about 1,500 square metres.  It also spoke of the requirement of factory accommodation.

The document set out a profile of P T Mecosin in Indonesia describing the products it manufactured and included with it a confidential report in relation to P T Mecosin from Creative Information System of Indonesia and a document entitled recent bankers opinion.  That banking opinion was given by Bank Negara Indonesia which in fact is the banker of P T Mecosin Indonesia.  The document also set out the proposed corporate structure of the Australian company which was in accordance with the corporate structure to which I have already referred.

As I have found that the accused Mr Winfield knew that the incorporation of P T Mecosin (Auistralia) Ltd was obtained by forgery he must have known that the corporate structure in that document was false.  So also he must have known that the representation of the association of P T Mecosin Indonesia with the asserted Australian company was untrue.

During the meeting the question of rental incentives was discussed and it was put to Mr Tate that the company would expect a cash incentive which it would use for the purpose of establishing its factory.  Neither Mr Ellison nor Mr Tate can remember whether a figure was mentioned at that meeting or not.

Mr Tate left the meeting near the end of the working day and immediately compiled a letter and a proposal for lease which he sent to The Manager, P T Mecosin (Australia) Ltd, 15th Level, Brisbane Club Tower, 241 Adelaide Street, Brisbane, Queensland 4000, which was the address at which Mr Winfield had said he could be contacted.

The letter addressed a proposal to lease either levels 20 and part 21 or levels 26 and part 27.  In conformity with the professed urgency the letter said that a draft lease would be couriered to the Brisbane Office over the weekend.

The lease proposal was for a term of ten years with rentals for the 20 and 21 floor at $750 per square metre or for the levels 26 and 27 at $780 per square metre.  The proposal was for 1,832 square metres of office space.

The proposal was for a lease to commence on the 30 June 1991 but no rent would be payable for fifteen months.  The landlord proposed that it would undertake the design and construction of the lessee’s fitout and would contribute $750,000 in respect of that fitout.

Moreover the proposal said:

“In addition to the above, the Lessor is prepared to make a payment of $1,800,000 to the Lessee on the date of occupation secured under a first mortgage for five (5) years over real estate to be nominated and subject to the Lessor’s approval.”

In respect of the lessee the proposal stated:

“To be satisfactory to lessor and, presumably, with benefit of parent company guarantees.”

Mr Tate said that that was the first occasion, in his experience, when a cash incentive had been offered.  His evidence was that the proposal was structured having regard to the matters discussed at the meeting of the 31 May.

On the 4 June Mr Winfield wrote to Mr Tate and included the following:

.. “Over the weekend I have had discussions with the Mecosin group and others associated with the group who have an interest in the accommodation situation and proposal in Australia.  After reviewing the respective competitive proposals offered to Mecosin and taking into consideration the security of long term tenure required by P T Mecosin (Australia) Ltd in a suitable prestige building, it has been agreed to treat solely with Northbourne Developments Pty Ltd and their agents Chestertons, with a view to concluding an unconditional agreement to lease arrangement for level 26 and part of level 27 in the No. 1 O’Connell Street development, on the terms and conditions set out on the following offer. 

.. Further instruction has been given that unless such unconditional agreement to lease has been achieved without further amendment by 5.00 pm Friday 7 June 1991, the offer of same is to be withdrawn and the accommodation requirement is to be negotiated pursuant to other proposals forthwith.”

The letter therefore reinforced what had been said to Mr Tate at the meeting of the 31 May.  The letter contained a document headed Offer To Lease.  The rental proposed was different to that which had been proposed in Mr Tate’s proposal but that may be explained by the fact that amendments were made to the rent reviews.  The proposal required a contribution by the lessor of $750,000 to fitout.  It also dealt with the cash incentive.

In respect of that it proposed:

“... the Lessor further agrees to pay to the Lessee the sum of $1,800,000 (one million and eight hundred thousand dollars) on the earlier date being 3 days after that date when the Lessee delivers to the Lessor or its solicitors the fully executed Agreement to Lease Documentation or on the 30 June 1991.”

It further proposed:

.. “The lessee shall in exchange for the payment of the incentive grant to the Lessor First Mortgage Security over freehold property in Queensland to the combined Value (certified by a Registered Valuer) of not less than $1,800,000 (one million and eight hundred thousand dollars).  The cost of the preparation and stamping of the said Mortgage/s shall be borne by the Lessor.”

The proposal also required confidentiality which was a matter that had been stressed at the meeting of the 31 May.  In due course both Mr Tate and Chestertons were asked to execute a document ensuring confidentiality on the part of both of their companies.  Chestertons were told that negotiations had to be complete by 5.00 pm Friday 7 June 1991.

Some time after the 5 June and probably before the 22 June an agreement for lease was prepared and was submitted to Mr Winfield.

That agreement provided for a fitout sum of $900,000 and an incentive payment of $1,800,000 which was to be paid on the 28 June 1991 provided that the deed, the lease and a first mortgage security had then been signed.  The agreement to lease contemplated that first mortgage security would be over two properties the first being at Kessels Road, Robertson and the second being at Kangaroo Point in Queensland.  The agreement contemplated that it was a condition precedent of the deed that the first mortgage security be granted to the lessor on the day of payment of the amount of $1,800,000.

The document appears to have been executed on 22 June 1991 in Jakarta and the common seal of P T Mecosin Indonesia is said to have been affixed to the document by the authority of the board of directors in the presence of Artir Haslim and Roosevelt Tan.  Mr Haslim is described as a director and Mr Tan as a secretary.  The evidence is that Mr Tan was never the secretary of P T Mecosin Indonesia.  The common seal however is that of the Indonesian company.

The common seal of P T Mecosin (Australia) Ltd is also affixed to the document and that is said to have been affixed by the authority of the board of directors in the presence of Mr Georgacopoulos and a Mr Brian Gretton who were respectively secretary and director.

Notwithstanding that the lease was prepared and in fact executed by the proposed lessee on or before the 22 June 1991, Mr Tate was not satisfied with the security which was being offered to secure the payment of the $1,800,000 incentive payment.  He was provided with two valuations in respect of the properties to which I have referred.  The first from Corbetts Valuers in respect of Kangaroo Point, was dated 12 December 1990, and valued the property at $750,000.  The other from G D Brett, Valuation Consultant, in respect of Kessels Road, was dated 16 March 1990 and valued that property at $1,122,500.  Mr Tate instructed a friend of his in Queensland to do what he called an “over the wall” valuation to check up on the figures included in those valuation reports.  He was advised by the person who conducted that form of  valuation that the combined value of the properties was in the order of $1.1 million.

Mr Tate became increasingly concerned about the transaction, as a result of which he instructed Chestertons to seek some financial details, and instructed them to seek those details directly from Mr Roosevelt Tan of P T Mecosin and Mr Artir Haslim.  On the 20 June Chestertons did so.  On the 24 June Chestertons also wrote to Mr Winfield seeking audited company accounts for P T Mecosin Indonesia which Mr Ellison said in the letter written that he had been expecting since 20 June 1991.  He also sought from Mr Winfield evidence of the ownership of the Queensland assets.

On the 25 June 1991 Northbourne wrote to Mr Winfield advising him that, the failure to provide the audited company accounts for P T Mecosin Indonesia, and information explaining the company structure of that company, and evidence of the ownership of the Queensland assets, was putting in jeopardy Northbourne’s ability to complete the transaction by Friday.  That letter sought from Mr Winfield his co-operation and urged P T Mecosin to respond immediately.  On the same day Mr Winfield responded to that letter advising that the matters to which Mr Tate had referred in his letter were being attended to with haste.  The letter also stated:

“I confirm that P.T. Mecosin Indonesia, who are indeed the Guarantor of the P.T. Mecosin Australia limited lease hold 85,000 of the total allotted shares (ie 100,000) in the lessee company.  This constitutes an 85 percent ownership as previously advised to you in writing.  Evidence of this fact has also been sent to your agents in the form of copies of Australian Securities lodgment (sic) documents and can be further discovered by ASC searches should you so require.

I confirm that P.T. Mecosin Indonesia is the parent of the Mecosin group and that as stated and that it holds and controls the asset and value of all of Mecosin’s commercial activities and stands as the prime performance guarantee pursuant to these undertakings.”

Those matters were untrue and known to Mr Winfield to be untrue.  The representations were made for the purpose of inducing Northbourne into agreeing to make an incentive payment of the kind then being discussed.

Mr Tate responded to that by letter of the same date in the following terms:

“I confirm that we require accountancy and background information on P T Mecosin Indonesia to satisfy ourselves as to their capacity to finance P T Mecosin (Australia) Ltd in the undertaking of leasing space in No. 1 O’Connell Street, Sydney.”

On the 27 June 1991 Mr Winfield sent to Mr Ellison the audited accounts of P T Mecosin Indonesia.  In the letter accompanying the accounts he wrote:

.. “I have been asked to pass these on to you on the basis they are extended to you on a strictly PRIVATE and CONFIDENTIAL basis.  These accounts are for the benefit of Northbourne Developments Pty Ltd and their Bankers and Trust and should not be passed on to anyone other than those stated.”

The documents also included a communication from Mr Roosevelt Tan in the following terms:

“Please take note that the said accounts are extended under STRICTLY PRIVATE and CONFIDENTIAL cover and accordingly must be kept as such.”

It was the evidence of Mr Suwandi that the accounts did not reflect the accounts of P T Mecosin Indonesia nor were the persons who were said to be author of the accounts, Sutjipto & Rekan, the accountants or auditors of the company nor had they ever been.

Mr Tan, in my opinion well knew that the accounts were not those of P T Mecosin Indonesia, as he well knew, of course that P T Mecosin Indonesia was not in truth an investor in P T Mecosin (Australia) Ltd.  The accounts were further false representations made for that purpose of inducing Northbourne to part with an incentive payment.

The accounts were sent by Chestertons to Mr Tate who in turn submitted them to their accountants Arthur Andersen and Co.

Mr Tate because of concerns with the transaction, at or about this time, indicated his unwillingness to settle.

That drew a letter from Geoff Klooger & Associates, Solicitors who claimed to be the Solicitors for the proposed lessee to the effect that unless the lessor paid the incentive of $1,800,000 by five ‘o’ clock that day, the lessor would be deemed to be in default of the terms of the agreement, and that in those circumstances their client reserved its rights to claim compensation for substantial damages.  On 1 July 1991 Mr Winfield wrote to Mr Tate enclosing a letter from Mr Roosevelt Tan of P T Mecosin Indonesia.  Mr Winfield’s letter said that he had been given authority to recover Mecosin’s losses occasioned by Northbourne’s refusal to settle.

Mr Tate’s evidence which I accept, was that by this time he had become quite suspicious about the whole transaction and as a result made enquiries of Swiss Securities USA in the United States.  He was unable to obtain an answer on the telephone number indicated on Mr Winfield’s business card.  He wrote to Mr Winfield advising him so and asking:

“Please give background information on Swiss Securities”.

On the same day he also wrote a separate transmission to Mr Winfield saying that settlement would not proceed unless some form of satisfactory extra security was provided and that his position in respect of that was final.

In response to those communications a further letter was written by Mr Winfield and dated 5 July, a copy of which was sent to Chestertons, Austwide (which was a financier of Northbourne), Austwide’s Trust Manager, Northbourne’s London Office, The State Bank of New South Wales, Sanwa Australia Ltd and the Directors of Number 1 O’Connell Street Pty Ltd.  That letter claimed that Northbourne had changed it’s mind on the morning of settlement after all the documentation had been executed and delivered by Mecosin.  It claimed that Mecosin had been put to considerable time and expense by reason of Northbourne’s failing to settle.  Further it claimed that there was some sinister or collateral reason for Northbourne failing to settle.  The letter claimed that investigations would be made of the solvency of the lessor and the breaches which might have been committed by the directors of that company under the provisions of the Companies Code.  The letter also claimed that a valuation would be done on the building which might affect the solvency generally of the company.

Notwithstanding those wide threats no settlement took place and thereafter nothing more was heard, by Mr Tate at least, of P T Mecosin Indonesia or P T Mecosin (Australia) Ltd.

Mr Tate did not advise Chestertons of the reason why a settlement was not effected and Chestertons thereafter dealt with Mr Winfield in relation to another property.

The overt acts, in my opinion, of Mr Tan, Mr Samardzija and Mr Winfield support a finding that those parties had reached an agreement to defraud the lessor.  The agreement was that they would do that by preparing false information for the incorporation of P T Mecosin (Australia) Ltd; that that company would falsely pretend that it was associated with P T Mecosin Indonesia; and that Mr Tan, Mr Samardzija and Mr Winfield would represent, in the case of Mr Samardzija and Mr Winfield, both orally and in writing, and in the case of Mr Tan, in writing, that Mecosins (be it the Indonesian entity or the Australian entity) wished to secure premises at O’Connell Street for the purpose of carrying on business.

The agreement further provided that that pretence would be made for the purpose of securing an incentive payment of the kind discussed.  The parties agreed that neither of the corporate entities would take up occupation or comply with the terms of the lease.

In particular there was reasonable evidence in relation to Mr Winfield’s involvement in the conspiracy.  He prepared and submitted false documents for the purpose of incorporation of P T Mecosin (Australia) Ltd.  He met with Mr Ellison and Mr Tate and held himself out as authorised to negotiate.  He provided or allowed to be provided information, being the Supplementary Documentation Submission for Australian Accommodation (Ex 9), which he knew to be false.  He co-operated in the obtaining and presentation of false financial information.  On 25 June 1991 he provided corporate information which was untrue.  He wrote the letter of 5 July claiming that Northbourne was in breach and published that letter to other parties.

Those three men were participants in a conspiracy of the kind mentioned.

The Gateway

Mr Tate of Northbourne advised Mr Ellison that Northbourne did not intend to proceed with negotiations.

Mr Ellison thereafter contacted Mr Winfield to determine what Mr Winfield wished to do in light of the cessation of negotiations in relation to 1 O’Connell Street.  Mr Winfield knew that Northbourne had withdrawn from negotiations but did not advise Mr Ellison as to why that occurred.  Specifically Mr Ellison asked both Mr Tate and Mr Winfield why it was that Northbourne had withdrawn from negotiations but neither gave him a reason.   Mr Ellison introduced Mr Winfield to Mr Turner at the Gateway building which is at 1 Macquarie Place, Sydney about two weeks after negotiations had broken down in relation to 1 O’Connell Street.  After the meeting with Mr Turner, Mr Ellison assisted in the negotiations and also assisted in the re-provision of the false financial statements from Mecosin to the owners of the building, Permanent Trustee Australia Ltd (Permanent Trustees).

Mr Ellison saw Mr Winfield on a variety of occasions subsequent to introducing him to Mr Turner.  He had a number of meetings and conversations with both Mr Winfield and Mr Samardzija, whom he knew as Sands.

On the basis of what he was told by both Mr Winfield and Mr Samardzija, he believed, that Mr Winfield was an Australian property consultant for P T Mecosin and had been retained by them to advise on the acquisition of freehold premises in Australia.  He believed Mr Sands to be an employee of P T Mecosin as opposed to a consultant.  I accept his evidence in that respect, as I do in all respects, in particular that he was told by Mr Winfield that he was an Australian property consultant for P T Mecosin, on retainer, to advise on the acquisition of freehold premises in Australia.

“Re:   P T Mecosin Indonesia

Pursuant to instructions by our client, P T Mecosin Indonesia, we are issuing a Bank Promissory Note to the amount of US D10 million (United States Dollars Ten million).  We have been advised to forward the verbiage for your perusal.

Enclosed you will find the terms and conditions of our Promissory Note which is issued in accordance with the laws of ICC Paris.  Please note that in this instance the clauses 1 to 5 are not applicable.

Should any queries arise, please do not hesitate to contact the writer on fax number 66-2-5392284.

FOR AND ON BEHALF OF KRUNG THAI BANK LTD

Miss T W N Nucharee

Assistant Managing Director”

The document accompanying that communication is headed “TERMS AND CONDITIONS” and I set them out:

“1.     Evidence of The Loan

........ This Note is one of a series of Notes and ranks pari passu and ratable without preference or priority against the other Notes subject to date of maturity mentioned overleaf.

2...... Interest Rate

........ Interest is payable as directed overleaf.

3...... Payment

The payment of principal and interest in the currency of this Note shall be made in favour of the Lender at the bank mentioned on the front side of this Note who has been appointed by the Borrower as Paying Agent.

4.     Evidence of Default

........ The total principal amount of the Loan and interest accrued will immediately become repayable without prior notice if the Borrower fails for fourteen days to make a payment wholly or partly when due on any obligation for capital or interest.

5...... Financial Information

The Borrower is obligated to deliver, without demand, to the Lender within six months after the end of its business year a copy of its audited Balance Sheet and Statement of Profit and Loss together with the Annual Report.

6.     Assignment of Note

........ This Note is freely assignable or endorseable to third parties.

7...... Discharge of Note

Surrender of this Note to the Borrower against payment of its face value and interest accrued shall constitute a complete discharge to the Borrower of its obligations under said Note.

8.     Choice of Law

........ This Note shall be governed by and construed and interpreted in accordance with the laws of I.C.C., Paris.”

A reading of these terms and conditions show that they are entirely inappropriate to the transaction which was mooted.  The said to be promissory note and the terms and conditions under which it was to be issued had no relationship to the transaction of the kind predicated.  Anyone with any semblance of understanding of banking procedures could not have accepted a promissory note of the kind drawn on an international bank under the terms and conditions published in that communication.

Mr Winfield claimed in his evidence that he rang Mr Samardzija at 5.00 pm that night and spoke to Jenny Hillier and left a message for Mr Samardzija to ring him back.  He spoke to Mr Samardzija at about 9.30 pm.

He said that he yelled at Mr Samardzija but was told to shut up and to listen because Mr Samardzija had been told that Mecosin no longer wanted to lease the building in Melbourne.  Mr Winfield asked him why but Mr Samardzija refused to tell him at that stage and told him he would tell him the next morning.  The next day at about 9.30 am Mr Samardzija came to his office and Mr Winfield said that he went outside the office to speak to him.  He said that he yelled at him and told Mr Samardzija that he had absolutely wasted his time, he had been embarrassed, and made to look like a fool.

He asked Mr Samardzija why it was that Mecosin did not wish to continue with the negotiations and he was told “I can’t tell you.  It is Mecosin’s business in Indonesia, not mine and not yours” (TX 1793).  Mr Winfield was told to terminate the negotiations by letter.  He said that shortly after that he spoke to both Messrs Beal and Stockley and told them that Jack had told him to terminate the deal.

It was that communication which caused him to write the letter of 6 March 1992 (Ex 126) terminating the negotiations.  That letter read:

“Dear Gentlemen,

Thank you for taking the time to meet with myself and Mecosin representatives in Brisbane yesterday.  Matters raised at that meeting have been relayed to Mecosin in Indonesia and they have been given a total update of the situation.

Late last night I was contacted by Mecosin and asked to withdraw the offer to lease space in 333 Collins Street.  I have been given limited details of their change in direction, however believe it to be related to other initiatives they are undertaking at this time in Australia at a corporate level.  I eluded to some of these during our meeting.

Thank you for your prompt attention to date and I will advise you should the matter be given further consideration in the future.

Kind regards.”

Mr Beal said that he was at his desk at Kirkland Avenue (an office quite separate and a distance from Adelaide Street, Brisbane) on the afternoon of 5 March 1992 when Mr Winfield arrived late in the afternoon.  Mr Winfield appeared very anxious and was making quite erratic movements.  He asked Mr Winfield what was wrong and Mr Winfield said that the deal was off because “one of the gentlemen we picked up was NCA, National Crime Authority”. (TX 907)  He said that Mr Winfield then commenced to type a letter which he faxed off.  Late in the same day, Mr Beal saw Mr Samardzija at the Kirkland Avenue office.  Mr Samardzija went straight into Mr Winfield’s office and the two of them left and went out to the car park.  He watched them in the car park and it appeared to Mr Beal from the movements and their demeanour that they were having an argument.

Mr Stockley said that he saw Mark and Jack outside the premises and that they were both waving their arms at each other and they both appeared to have frowns on their faces.  They appeared to him to be arguing.  Their voices were raised but he could not hear what they said.  He said he later spoke to Mr Winfield about that matter and Mr Winfield told him and Mr Beal to say that Mr Winfield “had only found out that this transaction wasn’t a legitimate transaction, and that’s what he was arguing with Jack about”. (TX 1169)

I do not accept Mr Winfield’s evidence in relation to the events following the meeting of 5 March 1992.  I believe that he did become agitated during the meeting and his agitation arose out of concern that one or other of Mr Rehn or Mr Apps was suspicious of him and the transaction.  I do not believe Mr Winfield, in his evidence, when he said that Mr Samardzija first spoke to him at 9.30 pm on that night and advised him then that the transaction would not go ahead for reasons he would not say.  I accept the evidence of Messrs Stockley and Beal in relation to Mr Winfield having an argument with Mr Samardzija later that day.

That letter followed an the announcement that Krung Thai Banknotes had been forged.  It was announced publicly on 5 March 1992 through Reuters that Australian Police had uncovered an international fraud in Adelaide and, as a result, had detained four people in Australia, including three in South Australia, relating to forged promissory notes on Thailand’s Krung Thai Bank Limited with a face value of about $14 million.  I believe it was that announcement which precipitated the letter written by Mr Winfield on 6 March 1992 and that he was well aware at the time that he wrote that letter that Police authorities had discovered forged Kung Thai bank notes.

Mr Apps responded to Mr Winfield’s letter of 6 March 1992 by seeking the return of the lease documents which had been left with Mr Winfield.

Notwithstanding Mr Winfield’s advice to Messrs Apps and Rehn, Mr George Mackenzie of Finlaysons wrote on 10 March 1992 to the Krung Thai Bank in the following terms:

“We refer to your letter of 5 March 1992 enclosing the terms and conditions of the promissory note to be issued by you in the amount of US $10 million on the request of your client P T Mecosin Indonesia.

We would be grateful if you could forward to us details of your address and contact telephone number to enable this matter to be progressed with you.”

That drew an immediate response from the Krung Thai Bank in the following terms:

“Re: Fraudulent Promissory Notes

We refer to your fax dated March 10, 1992 regarding promissory note for USD 10 million.  Please be advised that Kung Thai Bank did not issue (sic) the said promissory note and Miss T W N Natchraree is not our bank officer.

Please do not honour the said document.  Instead, confiscate all documents and kindly send them to us in order to take necessary legal actions.

We have also enclosed the S.W.I.F.T. broadcast concerning the fraudulent promissory note and the news from Reuter for your ready reference.”

I find that the Krung Thai Promissory Notes purportedly issued on 22 November 1991 and the promissory notes the subject of Mr Tan’s communication to Mr Aiken and the promissory notes offered by Mr Winfield and Mr Samardzija as security for an incentive payment by Collins Street Properties Pty Ltd were forged, and, of course, worthless.

Evidence was led by the Crown from Mr Beal and Mr Stockley about conversations with Mark Winfield after the 333 Collins Street transaction had ended, for the purpose of establishing that Mr Winfield had made admissions.  Mr Mountford was called by the accused Mr Winfield to give evidence of comments made by Mr Beal and Mr Stockley relating to this trial for the purpose of showing that Mr Beal and Mr Stockley were unreliable witnesses in the sense that I have already explained.

Due to the ill feeling which undoubtedly exists between all these witnesses, if I was undecided as to the guilt of the accused, Mr Winfield, I would not use this evidence for the purpose of establishing his guilt.  However,  as this was a matter raised in argument it must be dealt with, but I do not propose to do any more than set out the more important aspects of this evidence as it was presented.  I have already dealt with the conversation between Mr Beal and Mr Winfield of 5 March 1992 and do not intend to deal with that further.

On the day of the police interview in 1993, Mr Beal and Mr Stockley both recall Mark Winfield asking, in the event that they were interviewed by the Police, to tell the Police that Mr Winfield was only a consultant on the 333 Collins Street deal and had nothing to do with the overall transaction.  Neither man acceded to that request because both claimed that Mark Winfield had previously told them that the transaction was a “scam” and that he was more than a leasing agent with respect to those negotiations (TXD 914, 1158).

Evidence was led from both Mr Beal and Mr Stockley about a number of conversations with Mr Winfield over the course of 12 or 13 months prior to the 1993 Police interview when Mr Winfield had told each of them that the 333 Collins Street transaction was a scam.  The conversations to which he was a party with Mr Beal took place variously at the Kirkland Avenue offices, their respective houses and when they were out socialising.  Mr Stockley said that the conversations to which he was a party had occurred in the Kirkland Avenue office but also on occasions when he drove Mr Winfield to work and during those journeys, the 333 Collins Street transaction was discussed (TX1162-1166).

He said that during those journeys Mr Winfield admitted that he and Mr Samardzija had tried to pull off a leasing deal using false bank documentation.

On other occasions Mr Winfield told Mr Stockley that 333 Collins Street was a sham and a lie.  On another occasion Mr Winfield said they had pulled the pin because the NCA was involved.

Mr Beal recalled a particular occasion when Mr Winfield, in explaining the nature of the 333 Collins Street transaction, suggested that because the Gateway deal was so successful they would try and pull the same deal again but to a larger extent (TX 916).  Security was also mentioned during this conversation.  Mr Beal’s evidence was that Mark Winfield told him they were using Krung Thai Bank promissory notes as security and that they were worthless (TX 917.29).  Mr Stockley also said that Mark Winfield had once told him he had “pulled the pin” on the transaction at the last minute due to a problem with some bank guarantee documentation from a Thailand bank (TX 1167).

Mr Mountford was called to demonstrate the unreliability of that evidence by reference to conversations he had with Mr Beal and Mr Stockley.  In particular, Mr Mountford recalled Mr Stockley saying they would have to prop up the Crown case or Mr Winfield would not go to jail (TX 2067).  Mark Winfield was also mentioned in a My Life meeting in 1995 when, according to Mr Mountford’s evidence, Mr Stockley told the meeting that Mark Winfield was responsible for the company’s problems and that they would need to “stitch him up” and prevent him from causing more problems.

Mr Mountford also claimed that Mr Beal and Mr Stockley had both admitted to him on different occasions that Mark Winfield was not guilty of the present charge and had not admitted to them that he was (TX 2075, 2076).

I think it is probable that Mr Beal and Mr Stockley spoke disparagingly of Mr Winfield in the presence of Mr Mountford.  They probably said something to the effect that they would have to stitch him up.  There is nothing sinister about that.  If in fact their evidence was true, to use their expression, it would assist “to stitch him up”.

However I have not used the evidence of Mr Beal and Mr Stockley to arrive at my conclusion.  I must say I am inclined to think that their evidence is accurate but that inclination is driven by the fact that I believe there is overwhelming evidence of Mr Winfield’s participation in a conspiracy of the kind alleged.  If it is my belief in his guilt which drives me to the conclusion that their evidence is accurate then the evidence of itself is of no assistance in determining his guilt.

Admissibility of Evidence

In Tripodi v The Queen (1961) 104 CLR1 the High Court said at 6:

“For upon a charge of conspiracy the proof of the crime may well consist in evidence of the separate acts of the individuals charged which, although separate acts, yet point to a common design and when considered in combination justify the conclusion that there must have been a combination such as that alleged in the indictment.  When that is so evidence may readily be let in of what each party to the conspiracy alleged may do or say in furtherance of the common purpose.  But when a substantive crime, not a conspiracy, is charged in the indictment it is the ingredients of the substantive crime that must be proved, not combination for a common purpose.  When the case for the prosecution is that in the commission of the crime a number of men acted in preconcert, reasonable evidence of the preconcert must be adduced before evidence of acts or words of one of the parties in furtherance of the common purpose which constitutes or forms an element of the crime becomes admissible against the other or others, that is to say of course, unless some other ground for admitting the evidence exists in the given case.”

The obligation upon the Crown is to establish an agreement between the accused and the persons named in the particulars in the information to do an unlawful act.  Because there is no direct evidence of any such agreement it may prove its case by circumstantial evidence.

None of the individual acts or utterance of any of the accused done outside the presence of any of the other accused will be admissible against those other accused unless the Crown has established that there is reasonable evidence, apart from those acts or utterances, that the other accused was also a party to the agreement which is said to constitute the conspiracy.  If there is such reasonable evidence directly admissible against an accused person of that person’s participation in the agreement, said to be the conspiracy, the acts and utterances of any other accused (who has also been established upon reasonable evidence to be a party to that agreement) done in furtherance of the common purpose will be admissible against each of them.  The basis for the admissibility  of evidence of that kind which would otherwise be inadmissible is that when the parties “are bound together in pursuit of an unlawful object, anything said, done or written by one in furtherance of the common purpose is admissible in evidence against the others”.  Ahern v The Queen (supra) 94/95.  That being the rationale for the admissibility of the evidence it is necessary that there be reasonable evidence of the participation in the agreement before the evidence otherwise inadmissible becomes admissible.

In this case, of course, only three of the alleged five conspirators have been charged.  The Crown must establish that there is reasonable evidence that each of the accused was a participant in the agreement before the acts and utterances in furtherance of the common purpose of that accused are admissible against another accused, of which there is also reasonable evidence of that accused’s participation.  In this case, if the Crown wish to reply upon the acts and utterances of Mr Samardzija and Mr Tan so also must the Crown point to the reasonable evidence of each of their participation in the conspiracy.

Reasonable Evidence Against Each Of The Alleged Conspirators

The reasonable evidence against Mr Samardzija.

He instructed Mathew Neibling to incorporate P T Mecosin (Australia) Ltd in May 1991.  He was aware that Mr Tan was not the secretary of P T Mecosin Indonesia.  He knew that P T Mecosin Indonesia was not associated with P T Mecosin (Australia) Ltd.  He assisted P T Mecosin (Australia) Ltd to seek to obtain office accommodation in Sydney.  He represented to Mr Ellison and Mr Tate that he was a representative of P T Mecosin Indonesia.  He either handed, or was present when Mr Winfield handed, the Supplementary Documentation which contained a number of false assertions to Mr Ellison.

He assisted in negotiations leading up to the lease at the Gateway.  He instructed Mr Tan to obtain false financial information in relation to P T Mecosin Indonesia and to provide that information to Permanent Trustees.  He signed a statutory declaration of 1 August 1991 and allowed the house in which he was living to be used as security.  He facilitated the settlement of 12 August 1991 and profited, both by reason of his association with Tavgrove Pty Ltd and directly, in the incentive payment of $1.25 million.

He knew that P T Mecosin Indonesia and P T Mecosin (Australia) Pty Ltd never intended to occupy the Gateway.

He knew before November 1991 that P T Mecosin (Australia) Ltd had taken the lease of premises at the Gateway and had extracted from Permanent Trustees $1.25 million.  He also knew that that sum had largely not been used for the benefit of that company. 

In those circumstances he requested and caused Mr Chandler to make contact with and write to BKF on  20 November 1991.  He spoke to Mr Winfield in the second week of December and sought his assistance in relation to negotiations.  He caused Mr Winfield to write the draft of 13 December 1991 and caused Mr Chandler to send it and the other information on 18 December 1991.  That information contained a number of false assertions.  He signed the letter of 21 January 1992.  He dealt with Chadwicks in the manner described.  He orchestrated the further events to 11 February 1992 and caused the letter of 11 February 1992 to be sent.  He arranged for the participation of a number of persons in the meeting of 5 March 1992 and caused Mr Winfield to write the letter of 6 March 1992, when it was publicly announced that Police had uncovered forged Krung Thai Promissory Notes.  He corresponded with Mr Tan in relation to some of these matters.  All of those overt acts make it clear that there is reasonable evidence of his participation in a conspiracy to defraud Collins Street Properties Pty Ltd of an incentive payment by the false pretences mentioned in the information.

The reasonable evidence against Mr Tan

Mr Tan knew that P T Mecosin Indonesia was not associated with P T Mecosin (Australia) Ltd.  He knew that he was not the secretary of P T Mecosin Indonesia and that after 13 September 1991 that company was under the governance of Mr Suwandi.  He knew that he was not entitled to hold himself out as secretary but did so falsely.  He obtained false financial information and provided the information to Mr Turner.  He signed the lease of the Gateway.  He knew that P T Mecosin (Australia) Ltd had taken a lease of the Gateway and had no need for premises in Australia and particularly in Melbourne.  He participated in the dividends from the incentive payment made to P T Mecosin (Australia) Ltd.

He falsely pretended to Mr Turner and Mr Hood in December 1991 that P T Mecosin Indonesia would take up occupancy of the Gateway.  He acted at the direction of Mr Samardzija in the correspondence in that regard.

He wrote to Mr Beetham on 6 January 1992 and to Mr Aiken on 21 January 1992.  He obtained access to Krung Thai Promissory Notes which he made available or was prepared to make available to Mr Lipohar.  He assisted in the making of arrangements for Mr Lipohar to travel to Bangkok to obtain the promissory notes.

There is reasonable evidence of Mr Tan’s participation in the conspiracy.

The reasonable evidence against Mr Winfield

Prior to May 1991 Mr Winfield was associated with Mr Samardzija.  He had borrowed money in the circumstances already described from Mr Lipohar.

He participated in the incorporation of P T Mecosin (Australia) Ltd and assisted by the provision of false documentation.  He knew thereby that the incorporation of P T Mecosin (Australia) Pty Ltd was a sham and specifically knew that it was not associated with P T Mecosin Indonesia.  After the incorporation of P T Mecosin (Australia) Ltd, he falsely represented to Messrs Ellison Tate & Turner and others that P T Mecosin (Australia) Ltd was associated with P T Mecosin Indonesia and was directed by the latter company.

He made false representations to Messrs Ellison & Tate in relation to the association with P T Mecosin Indonesia.  He either provided himself, or was present when it was provided, false information in the supplementary documentation to Mr Ellison in June 1991.  He made similar false representations to Mr Turner in relation to the association between P T Mecosin Indonesia and P T Mecosin (Australia) Ltd, and similarly provided false information to him in relation to P T Mecosin Indonesia.

He facilitated the settlement of the Gateway transaction.  On 13 August 1991 he received $48,000 out of the moneys paid by way of incentive by Permanent Trustees to P T Mecosin (Australia) Ltd.  On 29 October 1991 he received a further $25,000 out of the moneys paid by Permanent Trustees in relation to the fitout of the Gateway premises.

He visited the Gateway on a number of occasions between the date of settlement and the end of 1991.  He was aware therefore that neither P T Mecosin Indonesia nor P T Mecosin (Australia) Ltd had taken up occupation.

In or about 11 December 1991 he took instructions from Mr Samardzija in relation to 333 Collins Street and agreed to assist Mr Samardzija in negotiating that transaction for a success fee of $30,000.  He caused Mr Toussaint to send to him the letter of 11 December 1991 and, on 13 December 1991 he prepared a draft offer to lease which he provided to Mr Samardzija.  At the time that he provided that draft offer to lease he expected that document or a similar document to be published to BKF.  He was aware, on my findings, before 23 December 1991 that Mr Chandler had transmitted to BKF the information contained in the offer to lease of 17 December 1991 and the letter of 18 December 1991.  He made arrangements for a meeting to take place on 23 December 1991.

He met with Mr Samardzija in the second week of January 1991 and was aware that Mr Samardzija sent the letter of 21 January 1991.  He was also aware that Mr Samardzija had sent with that letter a document headed “Additional Terms and Conditions for Proposed Lease 2nd Floor 333 Collins Street, Melbourne, Australia”.

On 22 January 1992 he asked Mr Toussaint to nominate the person who Mecosin’s Bankers might approach.  He received BKF’s letter of 29 January 1992 and thereafter complained that the letter indicated the offer was subject to board approval.

On or about 31 January 1992 he reported to Mr Apps that Mr Toussaint had made an offer of other premises.  On 7 February 1992 he received a further letter from BKF and requested yet another letter.

On 9 February 1992 he advised Mr Apps that Mr Lippy would inspect the premises.  He signed a letter of 11 February 1992 to Collins Street Properties Pty Ltd which contained a number of false assertions including a claim that he had received a report from Mr Lippy.

He met with Mr Samardzija on 5 March 1992 and thereafter met with Messrs Tunn, Hemming, Rehn and Apps.  He provided information in relation to the security for the incentive payment and advised that the security would be a promissory note drawn on the Krung Thai Bank.

He wrote the letter of 6 March 1992.

In all of those circumstances I have no doubt that there is at least reasonable evidence of Mr Winfield’s participation in the conspiracy alleged in the information.

The reasonable evidence against Mr Chandler

There is, of course, no direct evidence that Mr Chandler was a party to the agreement alleged in the information.  The evidence, of the overt acts directly admissible against Mr Chandler from which it might be inferred that he was a party to the agreement is quite limited and falls within a narrow compass.  There is no evidence in the overt acts committed by Mr Chandler that, as at 18 November 1991, or at any time before 5 March 1992, Mr Chandler was aware of any of the following matters; the circumstances in which P T Mecosin (Australia) Ltd came to be incorporated; that P T Mecosin Indonesia was not a substantial shareholder in P T Mecosin (Australia) Ltd; that P T Mecosin (Australia) Ltd had sought to lease O’Connell Street or had entered into a lease agreement with Permanent Trustees in respect of the Gateway; the identity of Mr Tan and, of course, any association between Mr Tan and Mr Samardzija; the identity of Mr Lipohar; the fact of any promissory notes drawn on the Krung Thai Bank; and that promissory notes purportedly drawn upon the Krung Thai Bank had been forged.

There is no evidence that he had participated in any way in relation to the conspiracies relating to O’Connell Street and the Gateway.

The matters upon which there is reasonable evidence directly admissible against Mr Chandler and referable to the alleged conspiracy is demonstrated by the following overt acts; that he was associated with Mr Samardzija and took his instructions to commence negotiations with Mr Wardrop on 18 or 20 November 1991; that he lied when he told Mr Wardrop that he had walked over the site 333 Collins Street; that he sought an incentive payment for P T Mecosin in correspondence with BKF in November/December 1991 culminating in the letter of 18 December 1991 enclosing Mr Winfield’s draft of 13 December 1991 which he sent under his hand dated 17 December 1991; that he sought from BKF a commission payable to himself of $20,000; that he was present outside the meeting of 5 March 1992 and took Angelia home to change in order that she might take notes of the meeting.

Of course Mr Chandler did not give evidence.  However, in his case, as I have mentioned that might be explained by his refusal to allow his evidence to be a make weight for the Crown case. 

There is evidence of his direct participation in P T Mecosin (Australia) Ltd on and after 30 April 1992 and in particular his activities in the Gateway and in connection with his proposal to set up serviced offices in the Gateway.  In those matters his behaviour is almost so extraordinary that it suggests he could not have known the true relationship between the Indonesian Company and the company of which he held himself out to be Managing Director.  That aside, it is not possible in my opinion to infer from any of his actions after April 1992 that he was a participant in an agreement of the kind alleged.

In all there is insufficient reasonable evidence for me to conclude that the accused Mr Chandler was a participant in the agreement alleged in the information.  It follows that the Crown case has not been made out against Mr Chandler and he must be acquitted.

In respect of the charge against Ian David Chandler I enter a verdict of not guilty.

The reasonable evidence against Mr Lipohar.

The case against Mr Lipohar is sought to be established by proof of discrete overt acts.  The Crown has brought forward reasonable evidence that Mr Lipohar was an associate of the accused Mr Winfield and each of the two other men named in the information.

Mr Lipohar did not give evidence.  As such I am entitled to more readily draw inferences adverse to him in matters where he could have given an explanation.

The Crown has established, that is by reasonable evidence, that Mr Lipohar attended at the Gateway during September 1991 and there met two of the alleged conspirators Mr Winfield and Mr Samardzija.  As such he was aware, that P T Mecosin (Australia) Ltd had leased expensive and extensive accommodation in Sydney.  He was a person described on a list of contractors who had access to the Gateway premises.  He must have known that neither P T Mecosin Indonesia nor P T Mecosin (Australia) Limited had taken up occupation of the premises at the Gateway.  He corresponded with Mr Tan on 26 September 1991.  Mr Tan was known to him.  He received two sums of money from Mr Samardzija in 1991, $10,000 on 19 August 1991 and $4,950 on 2 October 1991, both payments consistent with a dividend from the Gateway transaction.

Mr Tan wrote of ‘Edward’ in connection with promissory notes and ‘Edward’ travelling to Bangkok.  Mr Lipohar flew to Thailand on 22 January 1992 in circumstances of coincidence which I have already mentioned and returned to Australia on 24 January 1992.  In the absence of an explanation it may be inferred, and I do infer, that the Edward referred to is Mr Lipohar and that the trip to Bangkok was in connection with the matters in the letter.

He telephoned Mr Apps on 9 February 1992 for the purpose of arranging a meeting to inspect 333 Collins Street.  He carried out that inspection on 10 February 1992 and told Mr Apps that he would send a report to Mr Winfield.  During that inspection he carried a clipboard and a camera and made notes and took photographs.

The Crown has established by reasonable evidence that Mr Lipohar was a party to an agreement, to defraud the owners of 333 Collins Street.

Conclusion

I find therefore that there is reasonable evidence that the two persons named in the particulars namely Messrs Samardzija and Tan participated with two of the accused, Mr Winfield and Mr Lipohar in relation to a conspiracy to defraud Collins Street Properties Pty Ltd of an incentive payment by a false representation that P T Mecosin (Australia) Ltd was an authorised representative of P T Mecosin Indonesia and that one of those companies intended to comply with the terms of a lease agreement in relation to 333 Collins Street, Melbourne and the further false representation that a Krung Thai Bank Promissory Note of an alleged value of US $10 million profit as security was a good and valid negotiable instrument.

Having made that finding the acts or words of all of the participants done or said in furtherance of the common purpose, that is the conspiracy, become admissible against the other participants.

In my opinion, the Crown has established that both of the accused, Mr Winfield and Mr Lipohar, and as well the parties named in the particulars on the information, knew of the common design or the conspiracy and knew how the conspiracy was to be carried out.  They all agreed in the conspiracy and each agreed to play a part in the furtherance of the conspiracy.  The respective parts, which each agreed to play have been set out at length.  Each participant had different parts and of course the extent of the participation varied.  Mr Lipohar had a lesser part than each of the others.  But importantly he had a part and in my opinion he agreed in the conspiracy and the part which he was to play.  He demonstrated his agreement by travelling to Bangkok on 22 January 1992 and by carrying out the inspection of 10 February 1992.  I need not detail the many ways in which Mr Winfield played his part.

Needless to say each of the participants knew that the conspiracy was unlawful and that the false representations made for the purpose of obtaining the incentive money were unlawful and each was well aware that his conduct and the conduct of each of the others was unlawful.  Each was aware of the participation of each other and each was generally aware of the part each other were to play.  In this case each knew how the fraudulent objective would be satisfied.

The four participants devised an elaborate scheme of lies and deceit with the object of fraudulently extracting some millions of dollars from the owners of 333 Collins Street by giving as security forged and thereby worthless Krung Thai promissory notes.

In my opinion the evidence establishes at least beyond reasonable doubt that each of the four persons but more particularly the two accused were guilty of the conspiracy to defraud alleged in the information.

I therefore enter a verdict of guilty in respect of Mark Jeffrey Winfield and a verdict of guilty in respect of Edward Lipohar.