Regina v George Adler

[2002] NSWCCA 180

CITATION:	Regina v George Adler [2002] NSWCCA 180
FILE NUMBER(S):	CCA 60005/01
HEARING DATE(S):	11 March 2002
JUDGMENT DATE:	20 May 2002
PARTIES :	George Adler (Appellant) Crown (Respondent)
JUDGMENT OF:	Spigelman CJ at 1; Barr J at 2; Bergin J at 3

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	98/11/0107
LOWER COURT JUDICIAL OFFICER :	Shadbolt DCJ

COUNSEL :	Mr C Jeffreys, Solicitor (Appellant) Mr R Hulme (Respondent)
SOLICITORS:	Jeffreys & Associates (Appellant) S E O'Connor (Respondent)
CATCHWORDS:	Appellant convicted of 11 counts of dishonestly obtaining by deception cheques totalling $69,380 (s.178BA Crimes Act 1900(NSW)) - An essential element of offences charged was an alleged representation that the money was for an investment in shares - Trial Judge directed the jury to entirely dismiss from their minds any thoughts of the money changing hands as a result of a loan - Whether the jury should have been able to consider a loan as a possible rational alternative hypothesis.
LEGISLATION CITED:	Criminal Appeal Act 1912 (NSW)
CASES CITED:	Barca v The Queen (1975) 133 CLR 82 Festa v The Queen (2001) 76 ALJR 291 Gilbert v The Queen (2000) 201 CLR 414 KRM v The Queen (2001) 75 ALJR 550 R v Al-Khair, unreported NSWCCA, Gleeson CJ, Priestley JA and Wood J, 20 June 1994. Whittaker v The Queen (1993) 68 A Crim R 476
DECISION:	See para 138

- 1 -IN THE COURT OF

60611/01
SPIGELMAN CJ
BARR J
BERGIN J

20 MAY 2002

R v George ADLER

JUDGMENT

1 SPIGELMAN CJ: I agree with Bergin J.

2 BARR J: I agree with Bergin J.

3 BERGIN J: The appellant, George Adler, appeals from convictions and sentences on 11 counts of dishonestly obtaining by deception cheques totalling $69,380 (178BA Crimes Act 1900). The deception in each count was that the appellant represented to Vera Antonia Konsuo (Ms Konsuo) that the money would be used to purchase shares in a company, Natfibre Limited (Natfibre), and at the time the appellant made such representations he knew them to be false because shares in Natfibre were not available for sale to the public.

4 On 24 August 2000 the appellant pleaded not guilty to each count. The evidence concluded on 8 September 2000 and the trial judge summed up on 11 and 12 September 2000. The jury retired on 12 September and returned verdicts of guilty on each count on 13 September 2000.

5 On 24 September 2000 the appellant was sentenced to four years imprisonment on each count to be served concurrently but cumulatively upon the sentence the appellant was then serving. It was ordered that the sentence commence on 31 May 2002 and expire on 30 May 2006, with a non-parole period to expire on 30 May 2005.

6 During the period between 1 October 1996 and 1 November 1996 when each of the offences were committed the appellant was a prisoner in the John Moroney Correctional Centre (JMCC).

7 The Crown case was that the appellant obtained the benefits by the deception of Ms Konsuo in telephone calls made from JMCC in October and November 1996. The telephone calls, the subject of the convictions, were made on 1, 8, 11 and 15 October, two calls on each of 17 October and 25 October, one call on each of 29 and 30 October and 1 November 1996.

8 The Crown case was that the appellant met Ms Konsuo in 1994 when he made arrangements for her travel agency, Intermedia Travel Consultancy Pty Ltd (Intermedia), to send money by MoneyGram to his son, Rodney Adler, and a Mr Bailey, in various countries including Israel and Portugal. The appellant attended Intermedia’s office, then situated at Rushcutters Bay, on five or six occasions when he met with Ms Konsuo. At these meetings he provided the details of the amount that he wished to transmit overseas and the recipient to whom the money was to be sent. Ms Konsuo then provided those details to her business partner, Ms Janice Clay, to complete the transfer.

9 On another occasion the appellant spent approximately 10 to 15 minutes with Ms Konsuo while she attended to some changes for the appellant’s son’s overseas flights. On a further visit the appellant spent 5 to 10 minutes with Ms Konsuo in relation to the planning of a holiday to the Queensland Sunshine Coast. Ms Konsuo made hotel bookings for the appellant and Gail Ferrugia or Gail Ferraria, described in evidence as the apellant’s girlfriend. Ms Konsuo also spoke to the appellant on the telephone to confirm bookings. She described his voice as a “well-educated, distinctive Australian voice”, which she said was “easy to recognize”.

10 On another occasion Ms Konsuo spoke with the appellant on the telephone when he informed her that he was unable to be present at his son’s twenty-first birthday party and he wanted to organize a gift for him. He asked Ms Konsuo to organize a first-class around-the-world ticket to be delivered to his son that evening. The appellant provided two addresses for delivery, 169 Hall Street, Bondi Junction, and 539 New South Head Road Double Bay. Ms Konsuo prepared the ticket, attended the Double Bay address and left the ticket in the letterbox.

11 Ms Konsuo gave evidence of the telephone calls that she received in 1996 and 1997 from the appellant including the calls the subject of the convictions. She also made diary entires in relation to the telephone calls in the 1996 and 1997 diaries.

The Telephone Calls and Diary Entries

12 Ms Konsuo claimed that in mid-1996 she received a telephone call from a person identifying himself as the appellant requesting a quote and booking for his brother-in-law, identified as Colby Smozanov, to travel from Tel Aviv to Sydney.

13 Ms Konsuo received a number of calls between 18 September 1996 and 30 September 1996 from a person she identified as the appellant. It was during a call on 18 September 1996 that the appellant first asked Ms Konsuo whether she would be interested in investing $15,000 in shares for a return of $4.82 for every $1.00 invested. Ms Konsuo claimed that she informed the appellant she would require a prospectus but that she did not have any money to invest. Ms Konsuo’s diary entry of that date is: “George Adler phoned re invest into shares approx 15K with return of $4.82 per $1”.

14 On 19 September 1996 Ms Konsuo’s diary records: “R Adler re: booking for Smozanov TLV/SYD and Hyatt for 5-6 nights”.

15 Ms Konsuo received another telephone call from the appellant on 20 September 1996 who asked her what she thought about the investment. She informed the appellant once again that she did not have any money and that she would require more details. Ms Konsuo’s diary entry for 20 September is: “George phone what I think.”

16 A further call was received on 24 September 1996 from the appellant in which he asked Ms Konsuo what she thought about the investment, adding that she had nothing to lose and that it was an extremely good offer. The appellant informed her that “it’s safe, it’s Australian” and that he was involved in it. Ms Konsuo claimed she once again informed the appellant that she did not have any money at that stage. The diary entry for that day is: “George phoned again what I think. He said, ‘nothing to lose’”.

17 On the following day, 25 September 1996, the appellant telephoned Ms Konsuo again and it was during this conversation that Ms Konsuo claimed the appellant informed her that the investment was in “Netfibre, an Australian product” and that a prospectus would be delivered to her the following week. The appellant informed Ms Konsuo that there were Australian, Indonesian and American investors and that $15,000 needed to be paid to an account titled “A C V D Heul”. The diary entry for this date is: “Net-fibre water filtration produced in Aust with Indonesian and American investors over and above (Australians). He said that A C V D Heul. It’s only 15K”. Ms Konsuo claimed she informed the appellant yet again that she did not have any money to invest. There is a further entry in the diary for this day which records: “George again.”

18 On 26 September 1996 the appellant telephoned Ms Konsuo and said, “Trust me, this is big, we can make lots of money.” Ms Konsuo once again informed the appellant that she did not have any money to invest and the appellant suggested that she try to borrow money from friends and “we can both become rich.” He said, “I will make you rich.” The diary entry for that day is: “George called back re investment. Trust me as this is big. ‘I will make you rich’. But I don’t have any money to invest. Try to borrow from friends to invest in this as I promise we’ll become rich.”

19 On 27 September 1996 the appellant telephoned Ms Konsuo and asked whether she had any further thoughts on the investment and how much she would like to invest. Ms Konsuo once again asked for a prospectus but the appellant informed her that he was busy and would deliver it the following week. Ms Konsuo claimed that she probably once again informed the appellant that she had no money to invest. The diary entry for that date is: “George phoned. Have I any further thoughts about investments in shares with him in his company.”

20 On 30 September 1996 the appellant telephoned Ms Konsuo on two occasions and asked her what she thought about the investment. She informed the appellant that she was rather busy but that she was unsure what to think about the investment, and said, “This is all too much, I need more information.” It was during one of these conversations that Ms Konsuo informed the appellant that she would invest $5,000 but that she would need some documentation. The appellant informed Ms Konsuo that his son Rodney would collect the funds from her and that she need not do anything. The diary entry for 30 September is: “George phoned. What I think and how much? I don’t know at this stage as this is all too much. At end I said I will invest but need documentation to read. $5K. R. Adler will collect I don’t need to do anything.” A further entry on the same page simply records: “George.”

21 During September 1996 Ms Konsuo had a short telephone conversation with her business partner, Ms Clay, who was in England at that time. Ms Konsuo claimed she informed Ms Clay of the possibility of an investment in “Netfibre”. Ms Clay asked Ms Konsuo whether she had a prospectus and was informed it would be provided. Ms Clay gave Ms Konsuo the “go - ahead” to make an investment in Intermedia’s name.

22 On 1 October 1996 the appellant telephoned Ms Konsuo and informed her that she would need to begin investing from that day. He requested a cheque of $3,000 payable to A C D Heul and advised Ms Konsuo that his son Rodney would collect the cheque that afternoon. That afternoon a person identifying himself to the reception staff as Rodney Adler visited Intermedia’s office, then situated in Kings Cross, and informed them that he was Rodney Adler and that George Adler had sent him to see Vera.

23 Rodney Adler gave Ms Konsuo a bank cheque to pay for the airline ticket of Colby Smozanov and Ms Konsuo gave Rodney a cheque in the amount of $3,000 drawn on Intermedia’s account. The diary entry for 1 October is: “George”, and also: “R Adler to collect cheque $3K.” There is a further entry on this day: “Send payment to Jet World (Smozanov) by courier.”

24 On 2 October 1996 the appellant telephoned Ms Konsuo and thanked her for the cheque, saying it was “all done.” The appellant informed Ms Konsuo that the price of the shares was greater than $4.00. On 3 October 1996 Ms Konsuo received a further call from the appellant, the specific details of which she was unable to recall, but said it was “similar to previous conversations, how extremely good the product was and that they cannot lose money.” The diary entry for this day is: “George Adler.”

25 On 4 October 1996 the appellant telephoned Ms Konsuo again and informed her that a further $2,000 should be given to Rodney. Ms Konsuo issued a further cheque in the amount of $2,000 which was collected by Rodney that day. The diary entry for this date is: ”George is asking for more money to invest in Net-Fibre” and also “R Adler collected chq $2K”.

26 On 7 October 1996 the appellant telephoned Ms Konsuo and informed her that the cheque that she had written on 4 October was wrong. He asked her to issue another cheque made out to cash and that Rodney would collect it. When the appellant was asked why the cheque had to be written out to cash he replied that it had to be cashed on the same day and could not wait for clearance. Ms Konsuo telephoned her bank and stopped payment on the cheque written on 4 October. The diary entry for 7 October is: “George phoned. Chq of Friday wrong. Can I do stop payment and give new chq to R Adler?” Ms Konsuo wrote another cheque dated 8 October drawn on Intermedia’s account, which was collected by Rodney Adler on that day. At the time of collection Ms Konsuo asked Rodney if he had any documents to deliver to her, but he informed her, “No my father didn’t give me any documents.” The diary entry for 8 October is: “Rodney collected new chq issued cash. But no papers to sign. His father did not give him documents this time.”

27 On 9 October 1996 the appellant telephoned Ms Konsuo again and informed her that the shares were doing well. He also told her there was an option to purchase 55,000 shares that was able to be kept alive for 2 years. The appellant informed Ms Konsuo that she was required to invest a further $15,000 by 24 October if the option was to be kept open. Ms Konsuo again requested a prospectus and more details about the company. Ms Konsuo asked what the price of the shares was and the appellant informed her that it was over $5.00, but that he would let her know the following day. The diary entry for 9 October is: “George phoned and said share are gone up. I have option to purchase on old price up to $55K. This option will last for 2 years. But must purchase now before 24 Oct. Another $15K. How much are shares? $5 let you know tomorrow.”

28 On 10 October 1996 the appellant telephoned Ms Konsuo and informed her that he needed a further $10,000 by the following day. She informed the appellant that she did not have that amount of money and he urged her to borrow money from friends or to advise her friends to invest with her. The appellant said that he would telephone Ms Konsuo the following day. The diary entry is: “George phoned.”

29 On 11 October 1996 the appellant telephoned Ms Konsuo again and asked whether she wished to keep the investment going. He also advised her that her investment was safe. Ms Konsuo asked about a prospectus. She said that she was a little bit worried that she did not have any documents but by the end of the conversation had agreed to place another $10,000 into shares. The appellant asked Ms Konsuo to provide the $10,000 in cash because there was no time for clearance of a cheque. He said it was important otherwise she may lose the money that she had already invested. The appellant informed Ms Konsuo that his son Rodney would collect the cash that afternoon. Later that day Rodney Adler arrived and was handed $10,000 cash in an unsealed envelope. He opened the envelope and flicked through it quickly. He thanked Ms Konsuo and departed. The diary entry for that date is: “George” and later, “R Adler picked up $10K cash.”

30 On 14 October 1996 the appellant telephoned Ms Konsuo, thanked her for the cash and informed her that Rodney had deposited the money in the bank. Ms Konsuo requested documentation. The appellant informed her that he was unable to purchase any more shares in his or his family’s name as he had reached his quota. He requested her to ask her friends to invest with her in order to avail themselves of the “opportunity of a lifetime.” Ms Konsuo agreed to do so. The diary entry for this date reads: “George. He cannot purchase any more shares in his name or his family can I ask some of my friends for money. ‘This is opportunity of a lifetime’.”

31 On 15 October 1996 the appellant telephoned Ms Konsuo and asked her whether she wanted to make a further investment and whether she had spoken to her friends about investing their funds. Ms Konsuo responded that both she and her friends would require documentation of their investments. The appellant asked for a cheque for $3,000 and Ms Konsuo issued a cheque in that amount that day drawn on the Intermedia account. A diary entry for that day records: “G. A. We need documents.”

32 The appellant telephoned Ms Konsuo twice on 16 October 1996 and in each conversation asked Ms Konsuo for further funds. In response, Ms Konsuo asked the appellant for documentation in relation to the money that had been invested and asked when she would receive a share certificate. The appellant said that he was too busy and that he would bring them down the following week. The diary entry for that date is: “Adler. When will you come in with paper-work? Don’t worry I am busy now but at end of next week we will come in for you to sign and give you share certificate”, and, later in the day: “George.”

33 On 17 October 1996 the appellant telephoned Ms Konsuo and asked her for a further $11,000. He said that the sum needed to be made up by two separate cheques as one was going to the company and the second cheque was required to pay stamp duty. Ms Konsuo wrote out two cheques both of which were to cash, one in the amount of $5,000 and one in the amount of $6,000. On 18 October 1996 the appellant telephoned Ms Konsuo, thanked her for the cheques and informed her that, “Rodney had taken care of it”. The appellant informed Ms Konsuo that he would call her the following day. The diary entry for that date is: “George.”

34 On 21 October 1996 the appellant telephoned Ms Konsuo and informed her that the shares were doing extremely well and that they had closed at $5.61 the previous Friday. He told Ms Konsuo that she would receive a return in excess of $128,000. In a second call on the same day the appellant asked Ms Konsuo to find more money to invest. He informed her there were approximately 100,000 shares left and that he required more investors. He mentioned that an individual, “Elliot”, would purchase 50,000 shares which left a further 50,000 shares that the appellant had to sell. Ms Konsuo said that she certainly did not have sufficient funds to purchase those shares. The two diary entries on that date record: “George. Shares are doing very well. Fri closing $5.61. You should get $128K+” and, “Shares are doing well. Can I find more money as there is some left approx. 100K. But he (Elliot) will purchase 50K and the other 50K need to be sold.”

35 On 22 October 1996 the appellant telephoned Ms Konsuo and informed her that the remaining 50,000 shares had to be sold. Ms Konsuo said that she required paperwork from the appellant. The appellant said that the shares would be sold on 4 December and that Ms Konsuo would then receive all of her investment plus a profit. He informed her that the proceeds of the sale would be deposited into her account if she invested more money. The diary entry for that date is: “George. Must have paperwork. Shares will be sold 4 Dec and on that day we will deposit into your account, with all profits.”

36 On 24 October 1996 the appellant telephoned Ms Konsuo and asked her to make a further investment informing her that all the money that was invested would be telegraphically transferred to Intermedia’s account the following week and all the profit would be transferred on 4 December when the shares were sold. The diary entry for that day is: “George. TT to our account all of money next week but profit on 4/12 when share are sold.”

37 On 25 October 1996 the appellant telephoned Ms Konsuo and asked her for a further investment in the amount of $10,380. The appellant informed Ms Konsuo that $8,000 or $9,000 was to be invested in Netfibre and the balance was to pay stamp duty. Ms Konsuo wrote a cheque for that amount and Rodney Adler collected the cheque that afternoon. The appellant telephoned again on 25 October 1996 and requested that Ms Konsuo deposit $5,000 into the ACVD Heul account. The appellant said the money had to appear in the books of ACVD Heul by 4:00 p.m. that afternoon and provided the account details to Ms Konsuo.

38 An employee of Intermedia, Lois Job, took a cheque from Ms Konsuo and cashed it at the Kings Cross branch of the National Australia Bank. She was given $5,000 in $50 notes from the National Bank and deposited them into the account, the details of which had been given to Ms Konsuo by the appellant. The diary entry for 25 October is: “Netfibre 10,380.” That is crossed-out and a second entry records: “George. We don’t want to purchase any more shares. Decision made at the meeting that Intermedia Travel look after all of travel arrangements.” A further entry on the date reads: “R Adler.” The bank deposit slips are also attached to that page in the diary.

39 On 29 October 1996 the appellant again telephoned Ms Konsuo and informed her that he required a cheque for $13,000, otherwise Ms Konsuo would lose all the money that she had invested. Ms Konsuo drew a cheque for that amount which was collected by Rodney Adler that afternoon.

40 On 30 October 1996 the appellant telephoned Ms Konsuo and informed her that his son Rodney had paid $2,000 in stamp duty. He asked Ms Konsuo to repay Rodney for that expenditure and provided a Commonwealth Bank account number which he claimed was Rodney’s account number. Ms Konsuo deposited $2,000 into the nominated account. The diary entry for that day is: “George R Adler has paid stamp duty of $2K. Can we repay?” The deposit slip and a piece of paper identifying the account name are also attached to this page in the diary.

41 On 31 October 1996 the appellant telephoned Ms Konsuo and informed her that she had to purchase a further $10,000 worth of shares and if she failed to do so she would lose her investment. The appellant supplied Ms Konsuo with an account number into which the $10,000 was to be paid. The diary entry for that day is: “George. Must purchase another 10K or we will be at lose.” On 1 November 1996 Ms Konsuo wrote a cheque to cash in the amount of $10,000, which was cashed at the National Australia Bank at Kings Cross and then deposited the cash into the account specified by the appellant. Pieces of paper with references to the account and the amount are taped into the diary on that date.

42 On 4 November 1996 the appellant telephoned Ms Konsuo and informed her that the $10,000 was not in the nominated account. Ms Konsuo informed the appellant that she had deposited the money as requested and that she had a receipt for that deposit. The appellant asked Ms Konsuo to check with the bank, and provided her with the account number into which the money should have been paid. Ms Konsuo checked with the bank and was informed that it had been deposited.

43 Ms Konsuo received a number of telephone calls from the appellant between 5 November and 21 November 1996. In a number of these conversations the appellant promised Ms Konsuo that money would be telegraphically transferred to Intermedia’s account. That did not occur. The appellant informed Ms Konsuo that he would chase up what was happening with the transfer and promised again that money would be paid into the account. It is apparent that he also informed her that the shares had risen to $6.38 and that she would receive all of her money on 4 December 1996.

44 On 22 November 1996 the appellant telephoned Ms Konsuo and informed her that $15,000 had definitely been placed into her account on that day and that the rest of the money would be present the following week, with a profit of $337,000 to be paid to her on 4 December. On 22 November $15,000 was credited to the Intermedia account, but was debited on 27 November 1996 as a result of the cheque bouncing. The cheque was drawn on the account “G J & L Boys”.

45 On 29 November the appellant telephoned Ms Konsuo and informed her that he had personally transferred $65,000 to her account and complained about the amount of paperwork involved. That amount was credited to Intermedia’s account on 29 November 1996 but was debited on 5 December 1996 once again because the cheque was dishonoured. This cheque was also drawn on G J & L Boys’ account.

46 On 12 December 1996 the appellant telephoned Ms Konsuo and in response to an inquiry as to where the money was, informed her that he would visit Ms Konsuo’s office the following week. He informed her that other directors would accompany him, including John Elliot, Richard Pratt and Messrs Wong and Bennett. The appellant also promised that the directors would bring some documents for her to sign. The diary entry for that day is: “George. Will time come that we will get this documents. I must have money.”

47 On 13 December 1996 the appellant telephoned Ms Konsuo and informed her that he had received three separate drafts for money to be distributed. During this conversation Ms Konsuo accused the appellant of lying to her, to which he responded, “Trust me, I never lied to you.” The diary entry for this day records: “George. Money send in 3 separate drafts and from Dec 4 on all interes will be paid.”

48 Ms Konsuo was in New Caledonia from approximately 14 December to 22 December 1996. On 23 December 1996 the appellant telephoned Ms Konsuo on three occasions. He informed her that his father-in-law, identified as “Morris Lees”, had died and said, “That bastard, I need his signature but it will be okay the others will sign.” He also informed Ms Konsuo that some documents would be delivered to her and that money would be transferred to her. He said that the money would take between two to three days to clear. In the last conversation of the day, he informed Ms Konsuo that the documents that required her signature had been ready in her office when she was away but because of her absence they had been taken away. The appellant said that he would “chase them”.

49 It was during the last conversation on 23 December 1996 that Ms Konsuo informed the appellant that she was going to consult a solicitor. The appellant told her that the transactions had been classed as “insider trading” and that they were not legal transactions. He advised Ms Konsuo not to consult a solicitor because “these guys know.” He informed her that she should not do “anything silly.” There are three diary entries on this day that record: “George. Money transferred but it will take 2-3 days. It took time to trace documents. Where are they?” and, “George. If you were in Syd last Monday all of documents were ready for your signature. Now all taken back. Please wait til next week” and, “Father-in-law. Morris Lees. Dead. Richard Prett. Friend - John Elliot, 22, 23, 24 Dec. Doc Tue 31 Dec.”

50 During the balance of December the appellant made a number of further telephone calls to Ms Konsuo providing her with variations on previous promises to pay her money. On one occasion he mentioned the “Bennett Trust” and on another occasion when Ms Konsuo said she was going to see her solicitor if she did not get the money by the end of the following week, the appellant said, “The shareholders are not to be played with.” The appellant, when asked for documentation, informed Ms Konsuo that he would send them with a person, “Eric”, because he was too busy.

51 There were numerous telephone calls between 1 January 1997 and 22 May 1997. On 3 January the appellant informed Ms Konsuo that “Mr Wong” from Natfibre would attend her office with a letter of credit which the shareholders intended should be used by her to arrange all of Natfibre’s travel arrangements. The appellant informed Ms Konsuo that $66,815 would be transferred to her account, $65,000 was her investment money and the remaining $1,815 was intended to pay for the alteration of an airline ticket for Rodney Adler to New York.

52 On 9 January 1997 Intermedia’s account was credited with $6,815. Ms Konsuo believed that $5,000 was a return of her investment and the remainder was intended to be credited to Rodney Adler for the alteration of his airline tickets.

53 In a telephone conversation on 23 January 1997 the appellant informed Ms Konsuo that a person, Eric Chen, would attend Intermedia’s office that week with a “draft” for $106,187 and that such would be provided by Icon Properties. That did not happen. During a number of other telephone conversations in late January 1997 the appellant promised transfers of money but they never eventuated. On one occasion when Ms Konsuo once again threatened to go to her solicitor, the appellant said that she was not to consult her solicitor because it would be a “stupid move” and “these guys know you, don’t get harmed.”

54 Ms Konsuo did attend her solicitor in January 1997 and provided him with an envelope which she requested he was not to open until either she or Ms Clay contacted him again. In February 1997 the appellant mentioned the name “John Elliot” to Ms Konsuo and informed her that she was not to see her solicitor because John Elliot would get someone to “fix her up.”

55 Further unfulfilled promises of payment were made in a number of calls in March, April and May of 1997. On one occasion the appellant put Ms Konsuo in touch with a person by the name of Terry Dogherty from whom it was promised she would receive $80,000. On 13 May 1997 the appellant telephoned Ms Konsuo and asked her to stop any dealings she had commenced with her solicitor. He asked her to send a fax to Graham Boys of Concrete Constructions listing all the money that Intermedia had invested in Natfibre. This request was repeated in a further telephone call from the appellant on 14 May in which he also informed Ms Konsuo that she would receive $40,000 on 16 May in the form of a bank draft or a bank cheque.

56 On 16 May 1997 a person claiming to be Graham Boys telephoned Ms Konsuo. By 20 May 1997 the appellant informed Ms Konsuo that Mr Boys was experiencing financial difficulties and asked her to “sit tight”, and he would call her back the following morning. On 21 May 1997 Ms Konsuo sent the fax to the address the appellant had provided which she understood to be that of Mr Boys. That fax was on an Intermedia letterhead addressed to Mr Boys, care of Concrete Constructions and was dated 15 May 1997. It was headed “Statement of Investment with George Adler”.

57 The fax listed the cheques and cash paid to Ari Cornelius van der Heul and the dates that the cheques were presented. The fax also detailed “deposited refunds” referring to the $15,000 from Graham John Boys on 22 November 1996 and G I & L Boys of $65,000 on 29 November 1996, both of which were listed as “returned cheque dishonoured”. The fax also referred to the “total amount invested into shares $69,380.” It listed a “direct deposit” of $5,000 on 9 January 1997 as a deposited refund. There was also a claim that the amount outstanding was $64,380, less stamp duty of $4,380, “plus profit of shares sold 4th December 1996 $1.00 = $6.38, plus daily interest (as per CTB Bank on full money as from 4th December 1996) plus all bank charges. “

58 Mr Boys telephoned Ms Konsuo on 21 May 1997 after she had forwarded the fax to him, however Ms Konsuo did not give evidence of the detail of that conversation.

59 The appellant also telephoned Ms Konsuo on 21 May 1997 and suggested that it was all her fault that she had not been paid the moneys because of her delay in faxing the statement to Mr Boys. The appellant promised that the money would be delivered to Ms Konsuo at 9:30 the following morning. During this conversation, Ms Konsuo also asked the appellant why he had not told her that he was in gaol. He then suggested that he had informed her that he was in gaol.

60 On 22 May 1997 Ms Konsuo received the final telephone call from the appellant in which she claimed he informed her that he was in his office. The appellant claimed that if Ms Konsuo proceeded with what she had “started” it would cause him great difficulties. He asked Ms Konsuo to be sensible because it could harm her. There was a discussion about a deposit to Intermedia’s account of $10,000 in March and Ms Konsuo denied any knowledge of that transaction. Later in the day a deposit slip recording that $10,000 had been deposited into Intermedia’s account was faxed to Ms Konsuo. She did not hear from the appellant again.

Cross-examination of Ms Konsuo

61 In cross-examination Ms Konsuo gave the following evidence:

· Although her accountant was present at Intermedia’s premises on 21 and 30 September 1996 auditing Intermedia’s books Ms Konsuo did not discuss the proposed investment with the accountant (tr. 153 -155);

· The discussions with the accountant on 30 September included discussion about other Intermedia investments (tr. 164);

· Although she did not receive the prospectus for which she had asked “dozens and dozens of times” she continued to pay moneys to the appellant (tr. 160);

· She read the newspapers and knew there was a section reporting upon the stock market and although she found it difficult to believe that the shares were always going up, she did not read the share pages in the newspaper (tr. 172 – 173);

· She did not know why she did not check the price of the shares in the newspaper – although she knew it was there, she did not look at it (tr. 174);

· She claimed she wrote the details on the cheque butts on the day or the day after she wrote the cheque. The cheque butts for payment to the appellant were all written in two colours with those entries referring to the appellant and the investment in the same colour (tr. 213 – 217; 264 – 265);

· She had been required by order to attend court and to produce the cheque butts and informed the court she had given various documents to ASC and that other documents had been destroyed in a flood (tr. 219 – 226);

· She met with ASC investigators on 12 May 1996 and although the investigator’s note of the meeting recorded “the shares George Adler stated were in Icon Properties” she denied she had said this;

· When she received Intermedia’s bank statement for the period including 7 March 1997 she underlined the credit of $10,000 and made enquiries with American Express but had no idea where the $10,000 came from until 27 May 1997 (tr. 361 – 363).

62 At trial the appellant relied upon evidence from an expert, Michelle Novotny, to argue that the details on the cheque butts that referred to the investment were written at a much later time than the rest of the entries on the cheque butts and all at the same time. Reliance was also placed upon the lateness of production of the cheque butts with a suggested inference that the production was delayed so that Ms Konsuo could write the details on the cheque butts.

63 Ms Konsuo gave evidence that when she was in a hurry or when she did not want her staff to see what she was doing she would write on the cheque butt to the cheque for payment to the appellant “see Vera” or “Amatrav”, the name of her company which held a 50% shareholding in Intermedia. She also gave evidence that she would complete the details on the cheque butt later in the day or the following day.

64 Ms Konsuo wrote “see Vera” or “Amatrav” on a number of cheques butts of the cheques that were paid to the appellant. In cross-examination she agreed that she made such entries on cheque butts to convey that it was for personal expenditure or that the person who was writing up Intermedia’s books should discuss with her how it should be coded in the computer (tr.141,145). It was suggested to Ms Konsuo that her claim about being asked about an investment was something that she had “thought of afterwards” (tr. 169). Ms Konsuo denied this. It was also suggested to her that the money that she had paid was for a “loan” (tr. 383). Ms Konsuo also denied this.

Ms Clay’s evidence

65 Ms Clay was a director and 50% shareholder of Intermedia and her role at the time of these offences was Intermedia’s sales director. She met the appellant in 1994 when he came in to arrange the transfer of money overseas and book a holiday.

66 Whilst Ms Clay was in England in September/October 1996 she received telephone calls from Ms Konsuo in which they discussed a possible investment by Intermedia in a company Ms Clay understood Ms Konsuo to refer to as “Netfibre”. Ms Konsuo informed Ms Clay that the investment was “through” the appellant and that it was “a good proposition”. Ms Clay said that she did not get too involved in the transactions as that was Ms Konsuo’s role on the “financial and accounting” side of the business whist Ms Clay concentrated on the “sales” side of the business. However Ms Clay gave Ms Konsuo the “go-ahead” for the investment during these telephone calls.

67 When back in Sydney in 1996 and 1997 Ms Clay also received a number of telephone calls at Intermedia’s office from a person identifying himself as the appellant and on request transferred those calls to Ms Konsuo. There were other occasions when Ms Konsuo was not in the office at the time of the appellant’s telephone call. On these occasions Ms Clay asked if Ms Konsuo could call him back but was always informed that he would call Ms Konsuo back. Ms Clay also observed Rodney Adler attend Intermedia’s office and collect an envelope.

68 It was suggested to Ms Clay in cross-examination that “this concept of an investment is something that you and Ms Konsuo have come up with well after the event, isn’t it?” to which Ms Clay responded “no”.

Payments on behalf of the appellant

69 In 1996 Rosemary Dora Tomasella was employed as a bookkeeper for the appellant’s solicitor Stewart Levitt of Stewart Levitt & Co., later to become L & G Solicitors and Attorneys. Ms Tomasella gave evidence that in October and November 1996 Rodney Adler paid various amounts to the firm for payment into the solicitor’s trust account for the benefit of the appellant.

70 Those payments were $5,000 in cash on 17 October 1996, $10,000 in cash on 25 October 1996, $13,000 cash on 29 October 1996. The trust account was debited for legal work performed by Mr Levitt in the following amounts: $2,406 on 18 October 1996, $3,000 on 5 November 1996, $10,000 on 8 November 1996, $7,500 on 15 November 1996 and $3,594 on 15 November 1996.

The Appellant’s Access to Telephones

71 A number of witnesses were called at the trial to give evidence of the telephone access available to prisoners of JMCC. The systems in place at the relevant time in 1996 and 1997 were the Homelink system, the Program Phonecard System and, in 1997, the Arunta system. There was also evidence from a Welfare Officer in relation to access to the use of her office telephone.

72 Two telephones were allocated to each unit of prisoners. There were additional telephones in the office of the Corrective Services Officers on duty in the units and at other locations within JMCC. There was evidence that officers could permit a prisoner to use the telephone located in the Unit Office and if that were to occur the call would be monitored and a log entry made in the officer’s diary.

73 The Program Phonecard system required a prisoner to complete a purchase slip by recording upon it the numbers that he wished to telephone. A Unit Officer would then authorize the purchase slip and confirm that the numbers recorded were those of the people specified by the prisoner on the slip. Each Phonecard was only capable of being used to telephone the numbers programmed into it. Such calls were limited in duration by the value of the Phonecard and were not monitored. One of the numbers programmed on the appellant’s Phonecard was that of Concrete Constructions.

74 The Arunta system was introduced in April 1997. Under this system prisoners filled out a purchase slip listing the chosen telephone numbers which were then programmed into the system following approval. The Arunta system established a six or seven minute time limit excluding calls to legal advisers which were limited to ten minutes. The prisoner was able to access the system by keying in various identification numbers and then selecting the particular phone number that had been programmed into the card. Under this system officers of the Corrective Services were able to listen to the prisoner’s telephone calls, which were apparently monitored at random. A warning sound was audible one minute prior to the expiration of the time limit.

75 Under the Arunta system the recipient of a call would hear a message informing the recipient that the call was from a prisoner of the JMCC with a suggestion that the recipient should hang up if they did not wish to take the call. Under this system, the appellant obtained approval for telephone numbers which included those for Graham Boys and Concrete Constructions.

76 The Homelink system was operational throughout the entire period 1996 and 1997. Under this system, a prisoner would dial zero to access an outside line, then dial the appropriate 1800 number and key in an identification number. The cost of such a call would be billed to the number that the prisoner telephoned. Once again the prisoner was able to obtain approval for particular numbers that could be used on the Homelink system.

77 Kathleen Stewart was a Welfare Officer at JMCC during 1996 and 1997. She gave evidence that the appellant would come into her office two or three times a week to make use of her telephone and would make a number of calls on those occasions. Ms Stewart would at times place the calls for the appellant and at other times the appellant would be permitted to dial the telephone numbers for himself.

78 When Ms Stewart placed the telephone calls for the appellant she would dial the number, inform the recipient that the appellant was a prisoner at JMCC and request confirmation that the recipient would accept the call. On occasions the appellant would continue to use Ms Stewart’s telephone but would dial for himself the number he had identified to Ms Stewart that he was calling. On these occasions Ms Stewart did not make her introductory announcement.

79 Ms Stewart recalled that on one occasion when the appellant made a telephone call he was insistent that the recipient of it should not be aware that the call was originating from the JMCC. Ms Stewart said that the call was made to a female named “Vera” and a possible “foreign sounding name”. Ms Stewart also recalled the appellant using the phone to arrange airline tickets and travel arrangements. The appellant discussed some shares with Ms Stewart stating how good they were and suggesting that if she had some money she should buy them. Ms Stewart informed the appellant that she had enough shares in Mastercard.

80 In early 1997 after Ms Stewart notified her superiors of the appellant’s use of her telephone a recommendation was made that her telephone should only be used in emergencies. After this recommendation the appellant continued to use Ms Stewart’s telephone but with significantly less regularity.

81 In 1997 Phillip Caffrey, a Senior Assistant Superintendent and Intelligence Officer at JMCC, monitored a telephone call made by the appellant on the Arunta system. Mr Caffrey observed that the appellant telephoned Mr Boys’ number and asked to be put through to “Vera” on a phone number that he nominated in a conversation with a person to whom he referred as “Joy”. That phone number, minus one digit, was the telephone number of Intermedia. Mr Caffrey gave evidence of the conversation he heard the appellant have with Vera concerning $80,000 and how the appellant was planning to forward it to her that day. It was apparently the monitoring of this call that led to the ASC investigation that resulted in the appellant’s prosecution.

82 Evidence was also given by Jason Wattie, employed by the Corrective Services Department, who observed a number of calls made by the appellant on the Arunta system. He too heard the appellant ask to be put through to a different number when the telephone call had been made to Mr Boys’ telephone number.

Meetings with the ASC

83 The ASC investigation into the appellant’s telephone call monitored by Mr Caffrey commenced in May 1997. Two ASC officers, Mr Grant Jackson and Mr Dunlop, conducted the investigation. Mr Jackson interviewed Ms Konsuo on 8 May 1997 and Mr Jackson and Mr Dunlop interviewed Ms Konsuo on 12 May 1997. There is no mention of Natfibre or Netfibre in the notes made at these meetings by the ASC officers. In the notes of the meeting on 12 May 1997 there is an entry “the shares Adler stated were in Icon Properties”. After Ms Konsuo obtained legal advice she met again with the ASC officers on 16 May 1997 and provided to them her bank statements and her 1997 diary. Ms Konsuo informed the officers that she had invested $65,000 as a consequence of the appellant’s representations to her.

84 Ms Konsuo informed the ASC officers that the appellant had represented that the company into which her funds were invested was developing water filtration systems and that he would obtain for her the necessary certification of her investment. Ms Konsuo also informed the ASC officers that the appellant had mentioned both the ADT Trust and the Bennett Trust. There was no mention of Natfibre or Netfbre in the ASC officers notes of this meeting. However the 1997 diary of which the ASC officers took photocopies recorded “Net Faibre” in the 3 January 1997 entry.

Mr Boys’ Evidence

85 Graham Boys was an architect who had enjoyed a business relationship with the appellant for twenty - five years. His company, Graham Boys Pty Ltd, provided consulting services to businesses including Concrete Constructions. Mr Boys had an office in Alexandria during 1996 and 1997 in which he employed a bookkeeper by the name of Joy Campbell. One of Ms Campbell’s duties was to answer the telephone in the Alexandria office. Evidence was given that the telephone in the Alexandria office was not one that permitted the transfer of incoming calls to another number.

86 Mr Boys also had an office at Concrete Constructions. The Concrete Constructions receptionist/switchboard operator during 1996 and 1997 was Rosemary Glover. Mr Boys instructed Ms Glover that if the appellant telephoned the call was to be transferred to him either in his office or on his mobile phone.

87 Ms Glover gave evidence that in 1996 she received approximately fifty telephone calls from a person identifying himself as the appellant. At the commencement of the calls a recorded message would announce the call originated from the JMCC and that it would be monitored. Ms Glover gave evidence that in approximately two-thirds of these calls she was asked to transfer the call to Mr Boys, and less frequently, to Rodney Adler or the appellant’s solicitor.

88 On 22 November 1996 the appellant telephoned Mr Boys and requested that he write a cheque in favour of Intermedia for $15,000. On the understanding that the appellant would pay $15,000 into Mr Boys’ account the following Monday or Tuesday, Mr Boys wrote a cheque in the amount requested by the appellant and deposited it into the Intermedia account the details of which were provided by the appellant.

89 On 29 November 1996 a further telephone conversation took place between the appellant and Mr Boys which included the appellant’s apology for not repaying the $15,000 and a request for Mr Boys to deposit $65,000 into Intermedia’s account that day. The explanation given to Mr Boys by the appellant was that such funds were required to ensure Intermedia did not lose its IATA accreditation. Once again the appellant promised Mr Boys that the funds that he advanced to Intermedia would be placed back into his account on the following Monday or Tuesday. Mr Boys then wrote a cheque for $65,000 payable to Intermedia and deposited it into Intermedia’s account that day.

90 As a result of the appellant’s failure to repay the amounts as promised Mr Boys cancelled the two cheques that he had deposited into Intermedia’s account.

91 In May 1997 the appellant telephoned Mr Boys and asked him to make contact with Ms Konsuo. He asked Mr Boys to obtain from Ms Konsuo a list of “moneys that were outstanding to her” from the appellant so that “he could repay the debt” (tr. 445). Mr Boys gave evidence that when he telephoned Ms Konsuo he informed her that he had received a telephone call from the appellant who was “desirous of settling his outstanding debt with her”. He informed Ms Konsuo that the appellant had requested him to ring her to obtain a list of the moneys that she believed the appellant owed her (tr. 446 and 448).

92 Although the details are not clear from the evidence it is apparent that Intermedia sued Mr Boys sometime after May 1997 in relation to the dishonoured cheques. After discussion with the appellant Mr Boys settled the proceedings by payment of an amount to Intermedia. Mr Boys gave evidence that he has not received reimbursement for that payment from the appellant.

Dr Chen’s evidence

93 Dr Franklin Siu Yui Chen, a general practitioner, was introduced to the appellant in 1989 by an acquaintance. He also met the appellant’s son Rodney in the early 1990s. Dr Chen had been to the appellant’s office on several occasions and had spoken to him on numerous occasions on the telephone between 1989 and 1997.

94 In early March 1997 the appellant telephoned Dr Chen and asked him for a $10,000 loan. The appellant informed Dr Chen that he needed to pay the money to Intermedia and that he needed the money quickly. Dr Chen initially refused the appellant’s request but said that the appellant wore him down by his persistence and he ultimately agreed to lend him $10,000.

95 The appellant gave instructions to Dr Chen to make the cheque payable to Intermedia and to deposit it into an account the number of which the appellant gave to Dr Chen. The appellant wrote the cheque on 7 March 1997 and it was deposited into Intermedia’s account on that day. On 22 June 1997 the appellant telephoned Dr Chen and asked him to fax a copy of the deposit slip to Vera at Intermedia and provided Intermedia’s fax number to him. Dr Chen then attended the Bankstown Post Office and faxed a copy of the deposit slip to Intermedia’s fax number, marked attention to Vera.

Mr Sinclair’s Evidence

96 Andrew Bruce Sinclair gave evidence that he was a director of Ankal Pty Ltd (Ankal), a company that developed a process for the commercial utilization of a crop, kenaf, in the manufacture of paper and pulp.

97 Natfibre Products Ltd was incorporated in Queensland in 1994 but never functioned. It was apparently deregistered in 1996. In June 1994 Natfibre Ltd was incorporated in New South Wales with a plan for public flotation to provide funding for the commercial development of the process. This was abandoned in April 1996 when financial support could not be secured.

98 Mr Sinclair had known the appellant for some years and for a period in 1989 and 1990 the appellant was also a director of Ankal. Subsequent to this involvement the appellant’s cousin became a director with Mr Sinclair. In 1990 the appellant borrowed some money from Mr Sinclair and asked him to pay the amount borrowed into an account styled Ari Cornelius van der Heul. The appellant informed Mr Sinclair that van der Heul was his agent managing his offshore investments. The appellant and Mr Sinclair were in contact at the time the plan to publicly float Natfibre was abandoned. Mr Sinclair informed the appellant of such abandonment.

99 On 9 January 1997 Mr Sinclair received a telephone call from the appellant in which he asked Mr Sinclair for a loan. Mr Sinclair obliged and wrote a cheque for $6,815 drawn on his family company account, Castlemax Pty Ltd, payable to Intermedia. As requested by the appellant Mr Sinclair deposited that cheque into Intermedia’s account on 9 January 1997, the details of which the appellant had given him. On the following day, at the appellant’s request, Mr Sinclair sent a fax to Intermedia confirming the deposit the previous day with a copy of the deposit slip.

100 On 17 January 1997 Mr Sinclair received a further telephone call from the appellant in which the appellant said that Mr Sinclair would receive a telegraphic transfer for the $6,815 paid to Intermedia. Mr Sinclair gave evidence, over objection, that he did not receive the telegraphic transfer and that in a further conversation some weeks later the appellant informed him that the funds had been required for another purpose and that he would sort it out when he was released from gaol. Mr Sinclair gave evidence of a further telephone conversation with the appellant in May 1997 in which the appellant referred to a trust which was about to be settled.

101 The telephone calls received by Mr Sinclair in 1996 and 1997 were all initiated by the appellant. There were occasions on which the announcement was made that the call was emanating from JMCC but there were other occasions when no such announcement was made and the appellant was immediately on the line. On two occasions when the appellant telephoned Mr Sinclair he informed him that his time was limited and that he would have to call him back. In cross-examination of Mr Sinclair the appellant’s solicitor stated that there was no issue that the person to whom Mr Sinclair was speaking on the phone was the appellant.

The appellant’s case at trial

102 The appellant did not give evidence at the trial. Evidence was called from a document examiner, Michelle Elena Novotny, and a professor of linguistics, Bernard Kilmour Martin. Ms Novotny’s evidence was led to establish that the cheque butts were completed at a much later time than that claimed by Ms Konsuo in support of a submission that Ms Konsuo had only thought of the “investment” claim at a much later time and that the money paid was really by way of a loan. Professor Martin’s evidence was led to challenge the veracity of the Crown’s witnesses’ identification of the appellant’s voice on the telephone.

103 Ms Novotny made initial observations of the ink used on the cheques and cheque butts using a magnifying glass and confirmed those findings by the use of a video spectral comparator. Further analysis of the cheque butts was carried out with the use of electrostatic detection apparatus . Ms Novotny gave evidence that the patterns identified on the cheque butts were consistent with the writer filling in a small amount of detail on a cheque butt and, after writing the following cheque and completing the butt for that cheque, returning to the prior cheque butt and adding more detail.

104 Ms Novotny concluded that in a number of instances the details on the cheque butt which referred to “AVD Huel” “fibre” and “investment” were all in the same coloured ink and were written in a different pen to the other details on the cheque butts. She was not able to make any finding in respect of the amount of time that had elapsed between the writing of the entries in one colour and the writing of the entries in the other colour.

105 Professor Martin gave evidence that there were tens of thousands of people, who in one way or another, approximate to the appellant’s level of organising speech and his fashion of speaking. He expressed the opinion that there was nothing individually distinctive in relation to the appellant’s voice. However after some study he identified what he described as “a slight tinge of a language other than English” in the appellant’s voice. Professor Martin accepted that auditory recognition is a complex matter and “some people might recognise” the appellant’s voice and “some people might not”.

Summing Up

106 At the commencement of his summing up the trial judge dealt with the different functions of judge and jury and then said:

One other matter I would like to draw your attention to is questions which are asked by the lawyers at the Bar table. If such a question is answered in the negative then the question just lies where it falls. It is not evidence of anything at all. It is sometimes difficult, and particularly in a long case, to appreciate that and always bear it in mind. You recall that Mr Jeffreys asked Ms Konsuo or rather put it to her that the money that she arranged to be paid on behalf of Mr Adler was a loan to which Ms Konsuo replied, ‘Sorry, you’ve got that totally wrong.’ There the questions ends. There is no other evidence throughout this trial that the moneys were a loan. That is not evidence and in consequence of which you can entirely dismiss from your mind any thoughts of the money changing hands as a result of a loan.

107 The appellant’s solicitor, Mr Jeffreys, sought a re-direction in relation to this matter and submitted that it was a question of fact for the jury. He also submitted that there were a number of matters in evidence from which the jury might infer that the moneys were not paid for an investment in shares and that one rational alternative was that they were paid as a loan.

108 The matters to which Mr Jeffreys referred included the notations made by Ms Konsuo on the record of payment and the cheque butts recording Intermedia’s payments as “see Vera” and “Amatrav” which it was submitted were consistent with an explanation of personal expenditure or a loan; the peculiar features to the cheque butt entries and the delay in the production of the cheque butts; the detailed diary entries for a “non-diarist”; the ASC investigator’s note that the shares were in Icon Properties; the lack of Ms Konsuo’s investigation in relation to shares in the newspaper; the lack of discussion with a solicitor, broker or accountant; the non-receipt of a prospectus and the astuteness of Ms Konsuo as a businesswoman.

109 The trial judge expressed the view that a loan, with the attributes of borrower, lender and an amount, may have been able to be established if the appellant had given evidence but that he could not see how the “negatives” referred to could make a “positive”. He concluded that these matters could cast reasonable doubt on the advances being for an investment but that a loan could not be constructed out of the circumstances to which Mr Jeffreys had referred. His Honour said “in consequence I removed it from (the jury’s) view” and refused to redirect the jury.

Grounds of Appeal

110 The three grounds pressed on the appeal are:

1. That the trial judge erred in law in allowing the evidence that Mr Sinclair had not been repaid by the appellant (Ground 4);

2. That the trial judge erred in law in directing the jury that they could entirely dismiss from their minds any thoughts of the money, the subject of the charges, changing hands as a result of a loan. This was a question of fact for the jury and it was wrong to effectively withdraw this question of fact from their consideration (Ground 6); and

3. That there has been a miscarriage of justice in that, the verdicts of the jury are unsafe and unsatisfactory, as it was not upon the whole of the evidence, open for the jury to be satisfied beyond reasonable doubt that the accused was guilty (Ground 8). Ground 4

111 It was submitted that the evidence that the appellant had not repaid the money borrowed from Mr Sinclair was not relevant and that there was no issue to which this evidence related. It was submitted that the question for determination in deciding whether the evidence was relevant was whether it could rationally directly or indirectly affect the assessment by the jury of the probability of the existence of a fact in issue, namely that the appellant telephoned Ms Konsuo.

112 The appellant’s case at trial was that it was not the appellant that made the calls to Ms Konsuo and that whoever made the calls was merely arranging a loan for the appellant. During the period that Ms Konsuo was receiving promises of repayment from the person she claimed was the appellant, the appellant arranged for Mr Sinclair to make a payment to Intermedia. During the subsequent months Ms Konsuo received further promises of repayment and there was discussion that she would take the matter up with her solicitor.

113 At around the time the appellant was discussing the possible repayment of Mr Sinclair’s loan the appellant arranged a loan from Dr Chen. If the appellant had chosen, he could have used part of the loan from Dr Chen to repay Mr Sinclair. He did not do that and asked Dr Chen to pay the whole of the $10,000 to Intermedia on 7 March 1997.

114 The jury were entitled to consider that the payment of $10,000 to Intermedia was given priority to the repayment of Mr Sinclair because the appellant wanted to try to appease Ms Konsuo and dissuade her from going to her solicitor. The fact that the appellant informed Mr Sinclair that the money had to used for something else and that he could not be repaid until the appellant got out of goal was a fact, if accepted, that could rationally affect the jury’s assessment of a fact in issue, namely whether they were satisfied that it was the appellant who made the calls to Ms Konsuo.

Ground 6

115 It was submitted that the hypothesis of a loan was an available inference from the evidence. The appellant relied upon the following portion of R v Al-Khair (unreported, NSWCCA, 20 June 1994, Gleeson CJ, Priestley JA and Wood J) at p 38:

There is no doubt that it is legitimate for an argument to be put to the jury on behalf of an accused, in final address, that the evidence before them is as a whole susceptible of a reasonable explanation other than that the accused committed the crime, and that this is so whether or not there is evidence before the jury upon which the jury could conclude that the reasonable explanation was in fact the explanation. It is not incumbent on the defence to establish the explanation; all that is necessary is that the explanation is, as a matter of reason consistent with a version of the facts open to the jury to find, upon the whole of the evidence: see Barca v The Queen (1975) 133 CLR 82, especially at 105, per Gibbs, Stephen and Mason JJ. It would be wrong for a trial judge to direct a jury not to consider the possibility of such a rational alternative hypothesis, if it was not inconsistent with what it was open to the jury to find the facts to be, simply because there was no positive evidence of it.

116 The appellants in Al Khair had been convicted of supplying and knowingly taking part in the supply of heroin that was inside a teddy bear in the possession of one of the appellants when arrested. The Crown case included numerous tapes of telephone conversations between the appellants and others that the Crown alleged were in code or cryptic language related to drugs. These calls included reference to the expectation of the arrival by bus of a woman and her two children. The appellant who was arrested with the heroin was a woman who had travelled by coach to Sydney from Melbourne with her two children.

117 That appellant gave evidence at the trial. The starting point for the alternative hypothesis put on behalf of the appellant was her evidence that her boyfriend had wanted her to make the trip to Sydney on two occasions and had informed her that he had arranged for her to be met in Sydney by two young men. The overall alternative hypothesis, which it was said was consistent with the evidence, was that the jury could accept that the appellant had been in Sydney on those two occasions for two purposes, one being masterminded by her boyfriend and relating to the heroin in the teddy bear and the other to visit one of the other appellants with a view to talking to her about her husband who had left her and perhaps having the other appellant accompany her back to Melbourne.

118 An ingredient of the hypothesis was that the appellant had not made a trip in a taxi on her visit to Sydney. However the appellant had given evidence that she had made a trip in the taxi and it had not been suggested to her in cross-examination by either the other appellants’ counsel or the Crown, that such evidence was inaccurate or false. When dealing with this ingredient of the alternative hypothesis in his summing up the trial judge directed the jury that there was no basis in the evidence to support this ingredient and that they should not speculate about it. The ground of appeal was that the trial judge had erred in directing the jury to ignore the alternative hypothesis proposed by the appellants.

119 The Court of Criminal Appeal rejected ground of appeal on the basis that the trial judge had only directed the jury in a manner which took the particular ingredient away from their consideration, which it found was justified in the circumstances, but had left for the jury’s consideration the overall alternative hypothesis, minus that particular ingredient. The particular ingredient was against the evidence rather than not inconsistent with what it was open to the jury to find, and thus appropriately taken away from the jury’s consideration.

120 In Al Khair the direct evidence included the finding of the heroin in the possession of the appellant on arrest, however, there was heavy reliance upon circumstantial evidence including the taped conversations. In the present case the direct evidence of the proof that the appellant made the calls and made the deceptive representations was the oral evidence of Ms Konsuo. The circumstantial evidence included the appellant’s dealings with Ms Konsuo some three years prior to the offences, the nature of the entries in the books of Intermedia including the cheque butts, the entries in the diaries, Ms Konsuo’s conversations with the ASC officers, the payments back into Intermedia’s bank account and the conversations between the appellant and others including Mr Boys and the conversations between Mr Boys and Ms Konsuo. The circumstantial evidence was of importance or substantial.

121 In Barca v The Queen Gibbs, Stephen and Mason JJ said at 104:

When the case against an accused person rests substantially upon circumstantial evidence the jury cannot return a verdict of guilty unless the circumstances are, such as to be inconsistent with any reasonable hypothesis other than the guilt of the accused: Peacock v The King (1911) 13 CLR 619 at 634. To enable a jury to be satisfied beyond reasonable doubt of the guilt of the accused it is necessary not only that his guilt should be a rational inference but that it should be “the only rational inference that the circumstances would enable them to draw”: Plomp v The Queen (1963) 110 CLR 234 at 252; see also Thomas v The Queen (1960) 102 CLR 584 at 605 – 606. However, “an inference to be reasonable must rest upon something more than mere conjecture. The bare possibility of innocence should not prevent a jury from finding the prisoner guilty, if the inference of guilt is the only inference open to reasonable men upon a consideration of all the facts in evidence” ( Peacock v The King (1911) 13 CLR at 661).

And at 105:
However, although a jury cannot be asked to engage in groundless speculation, it is not incumbent on the defence either to establish that some inference other than that of guilt should reasonably be drawn from the evidence or to prove particular facts that would tend to support such an inference. If the jury think that the evidence as a whole is susceptible of a reasonable explanation other than that the accused committed the crime charged the accused is entitled to be acquitted.

122 The appellant’s rational alternative hypothesis in this case was that the money paid by Ms Konsuo could have been by way of loan and not as a result of any deception about an investment in shares of any company. The appellant accepted the correctness of the statement made to the jury by the trial judge that the suggestion of the loan to Ms Konsuo was not evidence. However it was submitted that the decision as to whether the money was paid by way of a loan was a matter for the jury to decide on the whole of the evidence and that such decision was wrongly taken out of their hands by the direction, “you can entirely dismiss from your mind any thoughts of the money changing hands as a result of a loan”.

123 On appeal the Crown, also in reliance upon R v Al Khair, submitted that the possibility that the money might have been advanced by way of loan was not as a matter of reason consistent with a version of the facts open to the jury to find upon the whole of the evidence. It was submitted that consideration of such an explanation would be to engage in fanciful speculation.

124 The appellant submitted that the evidence relevant to the consideration of this alternative was:

· the business/commercial experience of Ms Konsuo and the inexplicable continuation of payments when there was no prospectus delivered as requested and no share certificate issued to her;

· the absence of discussion of the proposed investment with the accountant who was on the premises on the day a decision was made to invest and at a time when other investments were discussed with the accountant;

· that Ms Konsuo did not check the share market section in the newspapers notwithstanding her knowledge that the prices of shares were listed in the newspaper and at a time when the price of the shares was discussed with the appellant;

· that the entry in the cheque butts had initially recorded “see Vera” or “Amatrav” with no mention of an “investment”, the appellant’s name or the company name into which the proposed investment was to be made;

· the writing on the cheque butts referring to the investment, the appellant and the company into which the proposed investment was to be made was in a different pen to the entries on the cheque butts recording the dates and the words “see Vera” and/or “Amatrav” and the amount of the cheque;

· that on each of the cheque butts on which there was recorded a reference to the appellant, the investment and “Netfibre” the same pen with purple ink was used whereas the pen used to record the entries including the amount, “see Vera” and Amatrav” and the date were written in a pen with blue ink;

· the claim by Ms Konsuo that she was colour blind with the suggestion of the unlikely chance of a selection on different days of a pen with the identical coloured ink to write the entries that referred to the appellant and the investment;

· the arrangement with Mr Boys for the deposit into Intermedia’s account of the cheques for $15,000 and $65,000 in November 1996 that were subsequently dishonoured;

· the only detailed diary entries related to the calls from the appellant and that a number of these detailed entries were on days when Ms Konsuo claimed that she was not interested in an investment and did not have money available for an investment;

· the payments of $5,000 in January 1997 and $10,000 on 7 March 1997 into Intermedia’s account;

· Mr Boys evidence of his conversation with Ms Konsuo in which he informed her that the appellant was desirous of repaying “the debt”;

· The ASC officers evidence that Ms Konsuo had suggested that the appellant had said the shares were in “Icon Properties”.

125 In refusing to redirect the jury the trial judge said that reasonable doubt may be cast on the payments being advances for an investment and that he had put that to the jury and “as many of its variations as he could note”. In this regard in his summing up (at 18) the trial judge referred to a number of the above matters and said:

It was put on behalf of the accused that the problem with voice identification, the problem with the diary notations of those telephone calls and the problems with the cheque butts, would give rise to reasonable doubts on all counts.

126 On the appeal Mr Jeffreys informed the Court that he had put a submission to the jury at trial that the payments made by Ms Konsuo “could be a loan”. There was no positive evidence that it was a loan. However a version of the facts “open” to the jury was that the initial cheque butt entries “see Vera” and “Amatrav” were consistent with a personal financial arrangement; that the entries on the cheque butts and other records referring to the appellant, and the “investment” were not written until a later time and perhaps a much later time and were written all at the one time; that the diary entries, particularly in the 1996 diary, were written at a later time and at the same time; that as an astute business woman Ms Konsuo would not invest without a prospectus; that if there was an investment in shares, the price could be checked in the newspaper and Ms Konsuo did not do so and could not explain why she did not do so; that $65,000 had been paid into Intermedia’s account in November 1996 before Mr Boys cancelled the cheques; that $5,000 and $10,000 had been repaid in January 1997 and March 1997 respectively; that Mr Boys informed Ms Konsuo that the appellant “was desirous on settling his outstanding debt with her” and had asked him to telephone her to obtain a list of moneys she believed the appellant “owed her”.

127 From this evidence a loan was a rational alternative hypothesis the possibility of which was not inconsistent with a version of facts that was open to the jury to find. The consideration of the possibility of such an hypothesis or explanation would not amount to the jury engaging in groundless speculation.

128 I am satisfied that the trial judge fell into error in directing the jury to “dismiss from their minds any thoughts of the money changing hands as a result of a loan”. Rather than directing them to dismiss those thoughts from their minds the appropriate course to adopt was to inform the jury that although there was no positive evidence that Ms Konsuo paid the money by way of a loan they should consider all the evidence and weigh up whether, on the evidence, there was a reasonable explanation other than that the accused committed the crime, including the consideration of whether the payments could have been a loan.

129 The Crown submitted that this is an appropriate case for the court to reach the conclusion that notwithstanding that the point raised on the appeal in Ground 6 is decided in the appellant’s favour, no substantial miscarriage of justice has actually occurred (the proviso): s.6, Criminal Appeal Act 1912 (NSW).

130 The test for the application of the proviso is whether it is clear that a jury properly instructed would necessarily have returned guilty verdicts. In this regard the Court should consider whether such a jury could rationally have entertained a reasonable doubt about the appellant’s guilt. The test has also been expressed in terms of “inevitability” of guilty verdicts: Gilbert v The Queen (2000) 201 CLR 414 per Gleeson CJ and Gummow J at 422. There may be less inclination to apply the proviso in an otherwise very strong Crown case where misdirection has been shown upon an important ingredient of the law applicable to the trial: Whittaker v The Queen (1993) 68 A Crim R 476 at 484.

131 An important ingredient of the law applicable to the trial was the appellant’s entitlement to have put to the jury on his behalf that the evidence before them was as a whole susceptible to a reasonable explanation other than that the appellant had obtained the money by the charged deception that it was for an investment. It was put to them in the trial judge’s summing up that the appellant’s case was that the evidence as a whole may cause them to have a reasonable doubt, but with the stricture that they must put out of their minds the appellant’s argument that the evidence as a whole was susceptible to a reasonable explanation, that it could have been for a loan rather than a deceptive investment.

132 The major part of the Crown case depended upon the jury accepting Ms Konsuo’s evidence (a) that the person who made the calls was the appellant; (b) that the alleged representations in relation to the investment were made by the appellant and (c) that the moneys were paid by Ms Konsuo as a result of the representations. The nature of the representation in terms of an investment in shares was an essential element of the offences as charged.

133 The Crown case that it was the appellant who made the calls was very strong. The evidence from the Corrective Services Officers together with the evidence of the arrangements the appellant made with Mr Boys, Mr Sinclair and Dr Chen to pay money into Intermedia’s account would in my view lead inevitably to the finding that it was the appellant who made the calls.

134 Ms Konsuo’s evidence that the appellant had represented that the money was for an investment was supported to some degree by Ms Clay’s evidence that Ms Konsuo had referred to an investment “through” the appellant in the telephone conversation with her whilst she was in England in September 1996. Otherwise it was the evidence of Ms Konsuo as to what was said in the telephone conversations between herself and the appellant and the documentary evidence such as the cheque butts and the diaries. There was also the fax to Mr Boys in which reference was made to “shares” without reference to any company. This fax was sent after Ms Konsuo’s interviews with the ASC officers.

135 The fact that the jury were directed to “dismiss from their minds any thoughts” of the alternative hypothesis meant that they were left with the task of considering the attack on Ms Konsuo’s version of events without the capacity to consider whether the payments could have been induced by something other than a criminal deception, such as a loan. The exclusion of that capacity would very likely have impacted upon the jury’s consideration of Ms Konsuo’s evidence and any doubts they may have had in relation to her evidence would have been given very much less weight.

136 It may well be that with the benefit of the observation of Ms Konsuo giving her evidence together with the capacity to consider the alternative that it could have been for a loan a properly instructed jury, acting reasonably, would not return guilty verdicts and thus the appellant would have lost a real chance of acquittal: Festa vThe Queen (2001) 76 ALJR 291; KRM v The Queen (2001) 75 ALJR 550. I am not satisfied that a properly instructed jury would have inevitably or necessarily returned guilty verdicts.

137 In these circumstances it is unnecessary to consider Ground 8.

138 I propose the following orders:

1. The appeal is allowed:

2. The convictions on the eleven counts in the indictment are quashed;

3. There is to be a new trial.

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