Bangaru V R 2012 NSW CCA 204

Court of Criminal Appeal New South Wales

Medium Neutral Citation

Bangaru v R [2012] NSWCCA 204

Hearing Dates

16 April 2012

Decision Date

20/09/2012

Before

Beazley JA at [1]
Hall J at [2]
Beech-Jones J at [3]

Decision

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

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

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

Catchwords

CRIME - appeal against conviction - obtain money by deception - obtain money by false or misleading statements - whether charges on indictment consistent with offence in respect of which appellant surrendered for extradition - whether trial judge should have directed acquittal - whether miscarriage of justice - whether trial judge failed to direct jury on limb of indictment - whether jury verdicts unreasonable, unsafe or unsatisfactory - whether tendency direction should have been given - s 97(1) Evidence Act - appeal against sentence - whether non-parole period uncertain - whether failure to consider special circumstances - whether allowance for rehabilitation - whether manifestly excessive - totality principle.

Legislation Cited

- Corporations Act 2001 (Cth) - s 200, s 292 s 299
- Crimes Act 1900 - s 178A, s 178BA, s 178BB,
- Criminal Appeal Act 1912 - s 5, s 6(1)
- Criminal Procedure Act 1986 - s 20
- Evidence Act 1995 - s 97(1), s 110
- Extradition Act 1988 (Cth) - s 10(2), s 42
- Trade Practices Act 1974 (Cth) - s 52

Cases Cited

- Browne v Dunn ((1893) 6 R 67
- Dao v R [2011] NSWCCA 63; 278 ALR 765
- DSJ v R; NS v R [2012] NSWCCA 9; 259 FLR 262
- House v R [1936] HCA 40; 55 CLR 499
- Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886; 106 FCR 51
- M v R [1994] HCA 63; 181 CLR 487
- MFA v R [2002] HCA 53; 213 CLR 606
- Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611
- Morris v R [1987] HCA 50; 163 CLR 454
- MWJ v R [2005] HCA 74; (2005) 80 ALJR 329
- O'Donoghue v Ireland [2009] FCAFC 184; 263 ALR 392
- Prasad v R (1979) 23 SASR 161
- QBE Insurance Group Ltd v Australian Securities Commission (1992) 38 FCR 270
- R v Fletcher [2005] NSWCCA 338; 156 A Crim R 308
- R v PWD [2010] NSWCCA 209; 205 A Crim R 75
- R v Zhang [2005] NSWCCA 437; 158 A Crim R 504
- Rasic v R [2009] NSWCCA 202
- Shrimpton v The Commonwealth [1945] HCA 4; 69 CLR 613
- SKA v R [2011] HCA 13; 243 CLR 400
- Truong v R [2004] HCA 10, 223 CLR 122
- United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; 157 CLR 1
- Warren v Coombes [1979] HCA 9; 142 CLR 531

Texts Cited

- R.P. Austin, A.J Black Annotations to the Corporations Act (2010) LexisNexis
- Australian Corporation Law - Principles and Practice LexisNexis

Category

Principal judgment

Parties

Kovelan Bangaru (Appellant)
Crown (Respondent)

Representation

Solicitors:
Oliveri Lawyers (Appellant)
Commonwealth Director of Public Prosecutions (Respondent)

Counsel:
Mr A.J. Bellanto QC, Mr M. Sahade (Appellant)
Ms P.E. McDonald SC (Respondent)

File Number(s)

2008/022138
2008/022139
2008/103208
2008/144991
2008/148519

DECISION UNDER APPEAL

Court/Tribunal

District Court

Before

Lakatos DCJ

Date of Decision

17/12/2010

Index

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

Judgment

1BEAZLEY JA: I agree with Beech-Jones J.

2HALL J: I agree with the reasons of Beech-Jones J and the orders proposed by his Honour in [332].

3BEECH-JONES J: On 24 August 2010 the appellant was found guilty by a District Court jury of four counts under former s 178BB of the Crimes Act 1900, and nine counts under former s 178BA of the Crimes Act. On 17 December 2010 he was sentenced to terms of imprisonment for each offence. He has appealed to this Court against his conviction and, to the extent necessary to appeal questions of fact, seeks leave to do so (s 5 of the Criminal Appeal Act 1912). He also seeks leave to appeal against his sentence.

The Conviction Appeal

4At all relevant times the appellant was the managing director of a group of companies known as the Streetwise or Colosseum Group. He was the sole director of Colosseum Investments Holdings Pty Ltd ("Colosseum Holdings") from 8 June 2001 until he placed that company into administration on 18 July 2005. Through a series of shareholdings he was the ultimate controller of that company. The appellant was also the director of Streetwise Property & Projects Pty Ltd ("Streetwise") from 17 March 1998 until 8 June 2005. This company was placed in administration on 18 July 2005.

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

6The Crown further alleged that, during the period from approximately January 2004 to July 2005 when the appellant was the director of the companies referred to above, he obtained or retained approximately $19.8 million in loan and finance facilities from various financial institutions by making statements with reckless disregard as to whether they were false or misleading in a material particular. The Crown alleged that the false and misleading statements were to the effect that the financial statements of companies within the group that were provided to the financial institutions were drawn to present a "true and fair view" of the financial state of those companies, when that was not the case. This conduct was the subject of counts 1 to 4 in the indictment being the s 178BB offences.

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

7The appellant was extradited from the United States of America to face trial in New South Wales. Prior to his trial, the appellant applied to Lakatos DCJ to quash, inter alia, what ultimately became counts 6 to 13 of the indictment. He contended that his trial on those counts was contrary to s 42 of the Extradition Act 1998 (Cth). His Honour rejected the application. Ground one of the appeal repeats that contention before this Court. In summary, the appellant complains that he was extradited to face charges under former s 178A of the Crimes Act, whereas he was placed on trial for offences under former s 178BB.

8Section 42 of the Extradition Act is a formulation of the so-called "specialty rule" which requires a degree of correlation between the offences in which a person's extradition is sought from the extraditing country, and the offences in respect of which they are to be tried in the receiving country. It provides:

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

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

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

9In addition, s 10(2) of the Extradition Act provides:

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

10Section 42(a)(i) enables a person to be tried in Australia for an offence in respect of which they were surrendered by the United States of America. The section also permits the extradited person to be tried for any other offence in respect of which they could have been convicted on proof of "the conduct constituting any such offence" so long as that other offence does not carry a longer maximum period of deprivation of liberty.

11The High Court considered s 42 in Truong v R [2004] HCA 10; (2004) 223 CLR 122. The appellant in Truong was extradited from the United Kingdom. He had been surrendered to Australia on charges of conspiracy to kidnap and conspiracy to murder, but was later tried and convicted in Victoria on the substantive charges of murder and kidnapping. It was contended that his trial was conducted contrary to s 42. The conspiracies that the appellant had been accused of participating in as described in the material placed before the British court went beyond mere planning for the offences and alleged that the proposed target of the conspiracies was in fact kidnapped and then murdered.

12By a majority, the High Court held that Mr Truong's trial did not contravene s 42 (per Gleeson CJ, McHugh, Hayne and Heydon JJ; contra Gummow, Kirby and Callinan JJ). Gleeson CJ, McHugh and Heydon JJ held that the comparison exercise contemplated by s 42(a)(i) between the offence in respect of which a person was surrendered and the offence in respect of which they were tried was one that went beyond a mere consideration of the elements of each offence (Truong at [29]). It was a process that was to be conducted "at a level of abstraction between a formal statement of the elements of the offence, on the one hand, and an account of the evidence relied on to prove the relevant conduct, on the other". That process had to be undertaken "by reference to the actual conduct alleged against the person in question" (at [29]). Thus, in Truong's case, as the alleged conspiracies were said to have involved the continued performance of the agreement up to and including the kidnapping and killing of the victim, it followed that the conduct constituting the offence in respect of which he was surrendered embraced the conduct the subject of the charges he was tried for, namely murder and kidnapping (Truong at [37]).

13To similar effect, Hayne J held that what was required was consideration of what had been alleged against the appellant in support of his application in the United Kingdom for his extradition to Australia. The "material advanced in support of the request for extradition" not only alleged that he conspired to kidnap and murder the victim, but also contended that the conspiracy had been carried into effect (Truong at [196]). Accordingly, the conduct alleged against him was such that it could have led to his conviction on the substantive charges of murder and kidnapping (Truong at [196]; contra, Gummow and Callinan JJ at [89] and Kirby J at [127]).

14As already noted, what ultimately became counts 6 to 13 on the appellant's indictment charged him with offences under former s 178BA. The gravamen of what each of these counts alleged is illustrated by count 6 which concerned the investors Stephen and Jane Fassos:

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

15For present purposes the relevant part of s 178BA and these counts is the allegation that the appellant obtained a benefit in the form of an investment by reason of an alleged "deception" on his part as to how the funds invested would be utilised.

16Consistent with the majority decision in Truong, the extradition request material put before the United States District Court for the Central District of California (the "American Court") was tendered before his Honour on the application to quash counts 6-13. The material included the arrest warrants issued for various offences alleged against the appellant, an affidavit of an "investigator", being Timothy John Kelly and an affidavit of a "prosecutor" being Ms Joanne Philipson, a solicitor employed by the Director of Public Prosecutions for the Commonwealth. It is necessary to compare the facts alleged in the material presented to the American Court with count 6 on the indictment to determine whether the latter is an "other offence" on which the appellant "could [have been] convicted" on proof of the conduct constituting "the offences in respect of which he was surrendered" so as to satisfy s 42(a)(i) of the Extradition Act.

17The offence corresponding to count 6 was specified in warrant A14 placed before the American Court. This was described as an offence under former s 178A of the Crimes Act, the terms of which are reflected in the charge in the arrest warrant, as follows:

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

18Mr Kelly's affidavit addressed the facts surrounding the offence the subject of warrant A14. He described the appellant as having "induced" Mr and Mrs Fassos to "invest in a "Streetwise joint venture property development". He recounted the applicant making a number of oral representations to Mr Fassos, including that "the property we have in mind for you is Seaforth" and "a trust will be set up for that specific project. I will be putting my own money into this project. It will be me, you and a maximum of two other investors". Mr Kelly noted that none of the $262,501.00 invested by Mr and Mrs Fassos was used in the Seaforth development.

19Ms Philipson's affidavit recorded that, according to Mr Fassos, he and his wife were "induced" to invest in a "Streetwise joint venture property development" on the "understanding" that the money would be invested in a joint venture. In the concluding part of her affidavit, she addressed this count, and all the counts the subject of this ground of appeal. She stated:

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

...

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

...

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

20The appellant's written submissions in respect of this ground contended, inter alia, that it was "not alleged in the investigator's affidavit or the prosecutor's affidavit ... that the appellant lied to the investors at the point of receiving the monies - but rather, that after receipt of the monies, the appellant did not use those monies appropriately". This is incorrect. The prosecutor's (i.e. Ms Philipson's) affidavit expressly alleged that the appellant "induced" investors to invest by reason of various "false representations".

21At the time the extradition request was made to the American Court, the representations said to have been made by the appellant were relied upon as identifying the "terms" upon which money was collected and later misappropriated for the purposes of charges that had been formulated by reference to s 178A of the Crimes Act. Counts 6 to 13 of the indictment relied upon these representations as the foundation for the allegation that monies were obtained by "deception". The nature of the conduct alleged did not alter. As I have stated, the material presented in the extradition request expressly alleged that the appellant had uttered representations which were false at the time that they were made. Moreover, given that the allegations related to what was proposed to occur with the funds in the future, the suggestion that they were "false" necessarily implied that he knew they would not be so applied; ie that they were false to his knowledge.

22It follows that the relevant conduct said to constitute the offence under s 178A in warrant A14 in respect of which he was surrendered, was conduct that he could have been convicted of on count 6 of the indictment for the purposes of s 42(a)(i) of the Extradition Act. There was a difference between the charges that he was surrendered for and then later tried on. An important element of the former was the existence of a dishonest state of mind at the time he misappropriated the investors funds. The latter alleged a dishonest state of mind at the time he induced the investors to part with their funds. However Truong establishes that such differences are not determinative for the purposes of s 42(a)(i). Instead the conduct alleged in the material placed before the court of the surrendering country must be considered in order to identify the conduct alleged. In this case a consideration of that material confirms that the conduct alleged against the appellant was such that, if established, it could have supported his conviction on count 6.

23The same analysis is applicable to counts 7 to 13 of the indictment. The difference between the counts is addressed below in relation to ground seven, but for present purposes the only material differences concern the identity of the investor, the amount invested, the date of the deception, the identity of the property, and the precise form of the misleading representation that was made as to the manner in which the funds would be applied. The extracts from Ms Philipson's affidavit (set out above at [19]) make it clear that with each and every one of those counts an allegation of a false representation by the appellant to induce the investor to part with funds was included in the material in support of the extradition request provided to the American Court. This allegation formed part of the conduct constituting the offence for which the appellant was surrendered. It specified the "terms" on which the monies were received for the purposes of s 178A, and was thus an aspect of the conduct forming the basis for the allegation that there was a fraudulent misappropriation. It was also capable of supporting the allegation that the investors for each of those counts were induced to part with funds by reason of a false representation by the appellant.

24It follows from the above that his Honour was correct to reject the application to quash what became counts 6 to 13. If anything, in his reasons, his Honour was generous to the appellant in that his Honour resorted to drawing inferences from the extradition material as to what was alleged against the appellant (see O'Donoghue v Ireland [2009] FCAFC 184; 263 ALR 392 at [46]). There was no need to consider any such inferences other than perhaps whether the false representations that he was alleged to have made were false to his knowledge. In my view the conduct expressly alleged against the appellant sufficed.

25I reject ground one of the appeal.

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

26It is convenient to consider grounds two to five together. They concern counts 1 to 4. As noted above, those counts allege offences under former s 178BB of the Crimes Act in relation to the provision of financial statements to various lending institutions. Ground two contends that the trial judge should have directed an acquittal on counts 1 to 3 at the conclusion of the Crown case. Ground three makes the same complaint in relation to count 4. Grounds four and five contend that a miscarriage of justice arose from the manner in which his Honour directed the jury in respect of these charges.

27Before considering the submissions made in support of these grounds it is necessary to consider the form of these counts, the relevant "statement" made by the appellant that was relied on by the Crown, the manner in which the Crown conducted its case on these charges and the evidence called by the Crown concerning the accuracy of the two sets of accounts the subject of these charges. As outlined below, there was a significant gulf between how the Crown put its case and how the defence sought to characterise the Crown case both before his Honour and on appeal.

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

28Former s 178BB of the Crimes Act relevantly provided:

"Obtaining money etc by false or misleading statements

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

(2) ..."

29Count 1 of the Indictment was in the following terms:

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

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

31The relevant "statement" the subject of each of counts 1 to 3 was said to have been made at the time the accounts were provided to the relevant finance provider. The financial statement was an eight page document which on its face purported to describe the financial affairs of only Colosseum Holdings. It included a director's report of the kind contemplated by s 299 and s 300 of the Corporations Act 2001 (Cth) and a "Director's Statement" signed by the appellant. The relevant part that was the subject of count 1 stated:

"In the opinion of the director:

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

(b) ...

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

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

32In so far as count 1 refers to "a statement by him that the financial statements were drawn up so as to give a true and fair view of the company's state of affairs" it correctly records the effect of this statement. The above statement is at the very least an expression of opinion by the appellant about the accuracy of the accounts. Such a statement of opinion would be false if that opinion was not bona fide held. A reckless disregard on the part of the appellant as to its accuracy would suffice for that purpose. In this case the Crown could have demonstrated this by simply pointing to the evidence of what the appellant was told by the various accountants, to which I will refer. In summary they advised the appellant that proper accounts could not be prepared. Instead, as I have stated, the Crown framed an indictment that assumed the burden of proving objectively that the accounts did not present a true and fair view, not merely that the appellant did not, or could not, subjectively hold that opinion. Presumably for this reason, the appellant did not complain of the form of the indictment either before his Honour or on appeal. Nor did the appellant complain about the presentation of the Crown case or the summing up in so far as the relevant statement could be characterised as one concerning only the opinion of the appellant concerning the accuracy of the financial statements and not their objective accuracy.

33Counts 2 and 3 of the indictment also concerned the provision of the 2003 accounts for Colosseum Holdings which included the Director's Statement signed by the appellant. Leaving aside the date of its provision and the identity of the financial institution, the only relevant difference in the form of those indictments compared with Count 1 is they did not contain the words "by him". This is most likely a slip. In view of the complaints made on appeal it is of no consequence.

34Count 4 concerned the 2004 consolidated financial accounts for Colosseum Holdings. The Director's declaration was signed by the appellant. It relevantly stated:

"The director of the company declared that:

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

2. ...

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

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

35Count 4 of the Indictment stated:

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

36On its face the Director's declaration conveys the effect of a meeting of a Director of the company on 15 March 2005 when a resolution was apparently passed approving the accounts. The indictment takes it a step further by alleging that the act of the appellant in causing the accounts to be provided to the financier some time between 1 April 2005 and 3 May 2005 was a restatement of the accuracy of point 1 of the declaration. Again this statement is capable of being characterised as an expression of opinion but no point was taken by the appellant to that effect and, for the reasons outlined, it would be unlikely to assist him if it was. In any event the indictment alleged that the handing over of the accounts constituted a statement as to the accuracy of the substance of resolution 1 and that that statement was false or misleading in a material particular in that "the financial statements did not present fairly the company's financial position as at 30 June 2004". As with counts 1 to 3, this meant that the Crown had to prove, inter alia, as an objective fact that the financial statements did not fairly present the company's financial affairs as at 30 June 2004.

True and fair view

37It is necessary to briefly explain the operation of the provisions of the Corporations Act that require accounts to represent a "true and fair view" of a company's financial affairs even if only to demonstrate their lack of relevance to the charges against the appellant.

38During the period 2003 to 2004, s 292(1) of the Corporations Act required all disclosing entities, public companies, "large proprietary companies" and all "registered [managed investment] schemes" prepare a "financial report" and a "directors' report". Other entities, such as a "small proprietary company", were required to prepare them in the limited circumstances stated in ss 292(2). It is not known into which of these categories the various companies in the Streetwise group fell.

39A "financial report" consists of the financial statements, the notes to the financial statements and the "directors' declaration" about the statements and notes (s 295(1)). Section 297 specified the following concerning the content of the financial statements and notes:

"True and fair view

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

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

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

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

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

40Sub-section 295(4) addressed the content of the directors' declaration. Amongst other matters it provided that the "directors'" declaration is a declaration by the directors ... (d) whether, in the directors' opinion, the financial statement and notes are in accordance with [the Act], including: (i) section 296 (compliance with accounting standards); and (ii) section 297 (true and fair view) ...".

41As I have stated it is not known whether the financial statements the subject of counts 1 to 4 were ones that the various companies were required to prepare by s 292 of the Corporations Act. Clearly there was an attempt to provide accounts in conformity with the statutory scheme. In particular the statement of the appellant which is the focus of counts 1 to 4 was something that purported to conform with the requirements for a directors' declaration in s 295(4). However, even that provision only required a director to certify "whether", in his or her opinion, the financial statements presented a true and fair view. It would be open to a director to qualify or even deny that the accounts presented such a state of affairs.

42The phrase "true and fair view" in s 297 is not defined. Its meaning and interaction with the requirement in s 296 that the financial report comply with the accounting standards has been a matter of some debate (see R.P. Austin, A.J Black Annotations to the Corporations Act (2010) LexisNexis at [2M.297]; Australian Corporation Law - Principles and Practice [3.6.0020] LexisNexis; QBE Insurance Group Ltd v Australian Securities Commission (1992) 38 FCR 270). Even if the phrase "true and fair view" was defined it would not have mattered. The appellant was not charged with offences under the Corporations Act. The term "true and fair view" arose in the appellant's trial because it was a phrase in a document that the appellant presented to a financial institution. It follows that its meaning in this case was a matter of fact for the jury. Further, as explained below, the manner in which the Crown presented its case meant that many, if not all, the areas of potential dispute that might arise as to what entries in a set of financial accounts must be "accurate" (within materiality limits) for them to constitute a "true and fair" view did not arise.

The Crown opening

43In light of the grounds of appeal, it is necessary to identify how the Crown sought to prove that the relevant statement in counts 1 to 4 was objectively false or misleading in a material particular.

44In her opening the Crown Prosecutor identified the statement in the 2003 accounts for Colosseum Holdings the subject of count 1. The Crown Prosecutor referred to the evidence to be given by an accountant, Mark Gray, who was employed as an accountant by the group during the period June to August 2004. She stated that it was anticipated Mr Gray would give evidence about the importance of having proper accounting records in order to prepare accounts and that when he commenced he found that there were no such records. The Crown stated:

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

45The Crown Prosecutor then outlined how in the latter part of 2004 the Australian Securities and Investments Commission ("ASIC") commenced a review of the Streetwise group and required the production to it of various financial statements. She stated that by October 2004 Mr Gray had left and was replaced by another accountant, Patrick Yuen. The Crown Prosecutor outlined how Mr Yuen prepared accounts for various companies within the group, including Colosseum Investments for the year ended 30 June 2003. She contrasted the entries in those statements with the statements the subject of counts 1 to 3 that the appellant provided to the financial institutions.

46The Crown Prosecutor then referred to the evidence of the group's external accountant, Mr Phil Cohen. This is described below. The Crown Prosecutor concluded her opening on counts 1 to 3 by stating that the Crown case was that the accused was reckless as to whether his statement that the accounts represented a "fair and true representational picture of the financial health" of the group. In particular, the Crown Prosecutor referred to:

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

47The Crown Prosecutor then addressed count 4 concerning the 30 June 2004 accounts and concluded by making reference to "the difficulties with the financial records, the paper trail, the building blocks, et cetera of the company's records".

48Thus, although in her opening the Crown Prosecutor pointed to the discrepancy between the entries in the accounts provided to ASIC and those provided to the financiers, she made it clear that the basis for contending that the relevant statements in the accounts were false or misleading was the absence of source accounting records from which proper accounts could be prepared.

The Accounts

49In relation to counts 1 to 3, the Crown led evidence that in support of certain applications for finance the appellant provided signed versions of the 2003 accounts for Colosseum Investment Holdings which included the director's statement that I have extracted above. These accounts contained a compilation report purportedly signed by Mr Cohen as principal for his accounting firm. The balance sheet specified net assets of $31,836,909.00 mainly consisting of $23,705,046.00 in "property stock at cost" and $3,305,276.00 cash at bank. Net profit was recorded as $11,705,533.00 including $79,219,249.00 in revenue from "Commissions/ Project management fees/Underwriting Fees/Construction Development". In his evidence the appellant contended that these were consolidated accounts for the group. There is nothing in the accounts to support this assertion. For example, the word "consolidated" is not deployed nor are the subsidiary companies listed.

50The financial statements the subject of count 4, being the signed accounts for the financial year ended 30 June 2004, described themselves as consolidated financial statements. They specified a net profit before tax of $10,876,340.00 and total equity of $46,661,826.00. They bore the appellant's signature and what purported to be that of Mr Cohen. Included in the accounts between the balance sheet and the notes to the accounts was a spreadsheet printout of the group's consolidated financial position. Mr Yuen's evidence in relation to the spreadsheet is described below.

51As indicated in the Crown's opening, evidence was adduced that accounts for seven companies in the group for the year ended 30 June 2004 were provided to ASIC in the latter part of 2004 in response to compulsory notices. Included in that material was a set of accounts for Colosseum Investment Holdings. Those accounts listed its net assets as at 30 June 2003 as $383,156.00 and it having incurred a net loss in this financial year of $282,450.00. For 30 June 2004 its net assets were $3,006,846.00 and it was said to have incurred a net loss of $378,007.00. The improvement in its position was said to be attributable to an increase in valuations of its property reserves. A consolidation of the seven companies for the financial year indicated a total equity of negative $261,827.00 and total loss of $1,125,667.00. Neither of these figures is even remotely reconcilable with the accounts the subject of counts 1 to 3 that were provided to the various financiers. A consolidation of the seven companies for the financial year ended 30 June 2004 indicated a total loss of $1,078,267.00 and net assets of $20,671,317.00. Again these figures are not reconcilable with the accounts the subject of count 4.

The Accountants

52As foreshadowed in the opening, the Crown called evidence from the two internal accountants employed by Streetwise, Messrs Gray and Yuen, and its external account, Mr Cohen.

53Mr Gray commenced working with the Streetwise Group in June 2004 as an accountant. He ceased in August 2004. From June 2004 he commenced reviewing the financial accounts and searched for supporting evidence for the various entries. He said that in "a lot of cases" he did not find any. He stated that in his opinion he "could not determine the state of affairs of the company". He explained:

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

54Mr Gray stated that the accounts for the financial year ended 30 June 2004 were prepared after he left. However, from his period of employment he could be expected to have knowledge of the general state of affairs for the company for the period reported on. He stated that he was not aware of any evidence that could justify the cash at balance figures or the property valuations. He stated that the company's records were not in a state to enable those accounts to be generated.

55Mr Gray did not prepare the accounts for the year ended 30 June 2003, but stated that his knowledge of the financial records gained during his employment was such that they were not sufficient to enable a statement for the financial performance for the year ended 30 June 2003 to be produced. He stated that there were a number of mis-postings including the incorrect treatment of investor funds as income. He recalled the appellant stating that "... it was probably a little bit immoral the way we sort of recorded transactions ...".

56Mr Yuen was employed as an accountant by the Streetwise Group for the period October 2004 to August 2005. When he commenced there was only one other member of the accounting staff employed by the group. He stated that there had been an attempt to "migrate" accounting data from a MYOB brand accounting system to another system called "Attache" but it had been a "failure". He also stated that the bank accounts had not been reconciled and that he was only able to reconcile "one or two major accounts". He conducted a review of the financial accounts when he first commenced. He described them as a "mess". He explained that this was because the bank accounts had not been reconciled. He said the general ledger had a "suspended account" (i.e. a suspense account) with a $500,000.00 entry, i.e. an unreconciled entry: "It is like sort of an under the carpet account".

57Mr Yuen was instructed by the appellant to prepare accounts following correspondence from ASIC in late 2004. He said he advised the appellant that the accounts were "not in order" and he could not fix them by himself. Some temporary staff were recruited and they attempted to reconcile the various accounts. They provided the material to Mr Cohen to prepare the financial accounts that were provided to ASIC.

58In relation to the accounts for the year ended 30 June 2004 Mr Yuen stated that, at the appellant's direction, he prepared a spreadsheet showing the consolidated position for all the companies based on the "Attaché" system. He presented it to the appellant who he says abused him and told him of "a lot of things that need to be changed" including the cash balance and property values. He told the appellant:

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

59However, under instruction from the appellant, Mr Yuen did change the cash figures and property values in the spreadsheet. He then attended a meeting with the appellant and Mr Cohen at which the appellant directed further changes to the cash at bank and property values. Mr Yuen then created a third version of the spreadsheet.

60Mr Yuen was shown the 2004 accounts the subject of count 4. As I have explained, part of those accounts included a spreadsheet. Mr Yuen stated that this was based on the spreadsheet he produced following the meeting with the appellant and Mr Cohen. He said the balance of the figures were obtained from Mr Cohen. In the body of the accounts he identified the entries for current assets as coming from his spreadsheet, which contained entries as directed by the appellant. He confirmed that the cash at bank figure was incorrect, saying "no way we have $8 million".

61Mr Cohen stated that he met the appellant in the middle of 2003. He said his firm was engaged to provide business, accounting and taxation services to the entities within the Streetwise group. He said that from time to time he was provided with various figures and accounting information. He described the record keeping systems as "chaotic" with "records everywhere, in filing cabinets, in boxes, all over the place". He stated that "every time I asked for figures I got different figures. Every time a new accountant was put in there the figures were different again". Mr Yuen said that he raised the record keeping with the appellant, who stated "everything is in a mess, I intend to sort it out". He also advised the appellant that the "figures were all over the place", referring to the constantly changing figures and the appellant stated that he would get it fixed. He also raised with the appellant the state of the inter-company loan accounts, none of which "seemed to balance".

62Mr Cohen denied preparing the 2003 accounts the subject of grounds one to three and denied that he signed them even though they bear a signature which purports to be his. Mr Cohen stated that he prepared the financial accounts that were provided to ASIC in the latter part of 2004. Mr Cohen denied that he prepared the financial accounts for the year ended 30 June 2004 the subject of count 4 or that he signed them. Mr Cohen stated that he had little recollection of the meeting that Mr Yuen referred to in late November 2004 but reiterated that from his earliest dealings with the appellant he complained to the appellant that the figures he received were continually changing.

63Mr Cohen's credit was challenged in cross examination. It was put to him that he prepared the 2003 and 2004 accounts and that he signed them. He denied the suggestion. In cross examination he was invited to comment on the accuracy of the figures in the accounts. He stated that "I probably would say they weren't very accurate at all".

64The Crown also called one of ASIC's senior investigators, Paul Rowland. Mr Rowland had accounting qualifications. Mr Rowland had traced the appellant's dealings with the funds provided by the various investors. In his submissions before this Court the appellant placed emphasis on the following part of his cross examination:

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

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

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

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

65In re-examination Mr Rowland stated that it was not possible to do such an audit in the absence of proper records from the various companies.

No case submission to final address

66After Mr Rowland's evidence, the Crown closed its case. Counsel for the appellant sought a directed acquittal on counts 1 to 4 and, in the alternative, a Prasad direction (Prasad v R (1979) 23 SASR 161; (1979) 2 A Crim R 45). His Honour rejected both applications. During argument on this application his Honour summarised the Crown case as involving a contention that "no true and fair view could have been constructed if one accepts the evidence of the internal accountants on the source materials". Counsel for the appellant referred to the Crown case as asserting that: "On this evidence properly understood you could not produce accurate reports".

67The appellant gave evidence denying that he was advised of any problems with the accounts or the accounting records and asserting a belief that the accounts he signed represented a true and fair view of the group's financial affairs. He was cross examined on differences between the accounts and tax returns he signed on behalf of the group as well as discrepancies between the accounts provided to ASIC and those provided to financiers.

Addresses and debate prior to the summing up

68In her address concerning these counts, the Crown Prosecutor specifically stated that it was not the Crown's case that a particular figure in the accounts was false. Instead she described the Crown case as follows:

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

69The Crown Prosecutor then referred to the evidence of Messrs Yuen, Gray and Cohen. She also pointed to the discrepancies between the accounts provided to ASIC and the accounts provided to the financiers the subject of the charges.

70After counsel for the appellant concluded his address to the jury, and in their absence, the Crown Prosecutor raised a number of points concerning his address with his Honour. One complaint was that the appellant's counsel had wrongly characterised the Crown case on counts 1 to 4 as requiring proof that a "particular entry" in a financial statement was wrong. This led to a debate about what was required by the last two lines of the indictment that I have discussed above at [30]. At one point the Crown appeared to contend that the phrase "true and fair" had an aspect of "process" that could not be divorced from the content of the financial statements. In responding to the complaints about his address, counsel for the appellant submitted that the last two lines of the indictment did not enable the Crown to introduce notions of "process". It is unnecessary to analyse that further because his Honour summarised the Crown case in a manner that did not encompass any procedural aspect. This was reflected in the summing up which is addressed below.

Conclusion as to the conduct of the Crown case

71At no point in the trial did the Crown assume for itself the burden of proving that any particular entry in the accounts was correct or incorrect, whether within the limits of materiality as allowed by the accounting standards or not. Instead, the Crown always contended that the state of the business records was such that it was not possible to draw up accounts representing a true and fair view of the company. It also relied on the dramatic inconsistencies between the accounts provided to the financiers and the accounts provided to ASIC the subject of counts 1 to 4. It led evidence casting doubt on a number of important entries in the accounts such as cash at bank, treatment of investor contributions as income, property valuations and inter-company loans. However, those matters were put forward as only confirmatory of what the absence of proper records was said to demonstrate.

72Although the Crown case did not require it to prove that any specific entries were false, an acceptance of its case led to an overwhelming likelihood that that many, if not all, of the figures were materially inaccurate. For a company the size of Colosseum Holdings which engaged in the range of transactions it did, the chance of constructing accounts that represented a true and fair view from source accounts that were as woeful as the Crown contended, was extremely remote.

Grounds two and three - Failure to direct acquittal

73Ground two of the appeal contended that his Honour erred in not directing an acquittal on counts 1 to the 3 of the indictment. Ground three of the appeal contends that his Honour erred in not directing an acquittal on count 4.

74A number of contentions are made in support of these grounds. First it is asserted that the Crown case changed. The appellant asserts that the Crown initially opened its case by pointing to the difference between the accounts provided to ASIC and the financial institutions but this was abandoned when it was asserted that the former were accounts for individual companies and the latter were consolidated accounts. It was said that the Crown then proceeded to rely on the "shabby accounting practices" of the group. While it is not clear how this complaint supports these grounds of appeal, in any event this submission is incorrect. From beginning to end the Crown case was that the group's accounting records were so inadequate that it was not possible to prepare proper accounts. The Crown pointed to the differences between the two sets of accounts but only as an illustration of that broader proposition.

75Second, in his written submissions the appellant asserts that his Honour erred in finding that the accounting evidence was such that the "inference open to the jury was that if the financial reports were to be correct then there would be adequate paper trails and proper accounting practices and that each accountant said that such systems were not in place". This submission does not reflect the Crown case or his Honour's summing up. Instead the Crown case was that, based on the accountants' evidence, it was not possible to prepare proper accounts.

76Third, the appellant's principal submission on these grounds concerned the inability of the Crown to point to the inaccuracy of any particular figure in the accounts much less demonstrate the degree of any such inaccuracy. This argument started from the premise that the indictment required the Crown to prove that the relevant accounts did not give a true and fair view of the company's state of affairs as at 30 June 2003, and a "fair" view of the company's financial position as at 30 June 2004. I agree with that point. However, I do not agree that in order to do so the Crown was required to demonstrate that any particular figure or combination of figures in the accounts was inaccurate. Conversely, even if the Crown had been able to demonstrate that specific entries were inaccurate, it would not necessarily lead to a conclusion that the accounts in an overall sense did not represent a "true and fair" view or a "fair" view of the company's position. In this case at least, it would have been a difficult and unproductive exercise to determine what figures in the financial statements had to be "accurate" (within materiality limitations) in order to justify the conclusion that they represented a "true" or "fair" view. A conclusion that they were not was more likely to be safely drawn from a serious defect in the source information rather than any attempt to reconstruct the true financial position of the company in an effort to facilitate some comparison exercise.

77I have described the evidence of Messrs Gray, Yuen and Cohen above. The end result of their evidence was that none of the accountants was prepared to accept that they drafted the accounts the subject of counts 1 to 4. Those accounts are consistent with an established tradition in cases of corporate misfeasance in that they are another example of a critically misleading corporate document that drafted itself. Leaving that aside, the evidence of the accountants, if accepted, justified a conclusion that there was a complete absence of any reliable accounting records and systems that were necessary to compile proper financial statements.

78For the 30 June 2003 accounts, Mr Gray's evidence points to such records being absent. While Mr Gray only commenced work in June 2004, he appeared to have inherited a state of disarray that had existed for some time. Mr Cohen's evidence, if accepted, dispelled all doubt about this. The difficulties he described spanned from mid-2003 to mid-2005, including the date the 2003 accounts were apparently signed by the appellant and the date they were provided to the financial institutions.

79The evidence of Mr Yuen and Mr Cohen confirmed the inadequacy of the systems in place to prepare the 2004 accounts. The inadequacies in the accounts were confirmed by the discrepancies between them and the accounts provided to ASIC. Those discrepancies were so stark they were sufficient to confirm an absence of confidence in the financial reports.

80The other evidence before the jury revealed that the companies were involved in numerous transactions. Given the size and complexity of the company's business, it followed that the likelihood that the accounts prepared on the basis of such deficient source material provided a true or fair view was extremely remote.

81The appellant sought to illustrate his contention that the Crown's inability to demonstrate that any particular figure was incorrect was fatal to its case on these counts by linking the Crown's inability to do this to the necessity for the relevant statement to be misleading in a "material particular". He submitted that:

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

82Given the context in which these accounts were prepared, the likelihood that they materially understated the position is equally as remote as the likelihood that they represented a reasonably accurate state of the company's financial affairs. In any event, this submission wrongly assumes that the only matter relevant to a hypothetical reader of the accounts including a financier is whether they overstate the company's financial position. If the director's attestation is false or misleading even because it understates the position, it can still have serious implications for the degree of confidence of external parties in the management and reporting systems within the company. An understatement of the company's position is material to persons within the company or external to it in other ways. For example, an understatement could affect a pricing decision of a lender or supplier and thereby harm the company because it will be charged too much. It could cause those within the company to make wrong decisions about resource allocation.

83The appellant's written submissions provided three particulars for each of grounds two and three. The second particular was expanded upon in those submissions and has been addressed. The third particular concerned the concession by Mr Rowland that "no forensic audit had been undertaken which would be necessary to determine the actual state of affairs of the Company as at 30 June 2004". I have described Mr Rowland's evidence above. That "concession" did not require a directed verdict on these counts. It did not undermine the Crown case. Properly analysed, all Mr Rowland conceded was that he could not construct a true and fair view of the company's state of affairs without undertaking a forensic audit, which could not occur as the records were incomplete. This answer was entirely consistent with the evidence of Messrs Gray, Yuen and Cohen. It only begs the question that if Mr Rowland could not determine a true or fair view, how did Colosseum Holdings purport to do it? Mr Rowland's evidence only undermined the Crown case if it had to prove what in fact a "true and fair" or "fair" view was. It did not. It only had to prove that the relevant accounts did not represent a true and fair view.

84The first particular for each ground was that the "evidence was insufficient to enable the jury to be satisfied beyond reasonable doubt as to whether the appellant made a statement with reckless disregard as to whether the financial statements were false or misleading in a material particular". The balance of the written submissions do not address this contention and it was not referred to orally. The conversations deposed to by Mr Yuen and Mr Cohen and, to a lesser extent, Mr Gray, were more than sufficient to demonstrate this element.

85I reject grounds two and three

Grounds four and five - Failure to give direction

86Grounds four and five complain that there was a miscarriage of justice by reason of the trial judge's failure to direct the jury that the Crown was required to prove beyond a reasonable doubt that "in fact the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003" in respect of counts 1 to 3 and that "in fact the financial statements did not present fairly the company's financial position as at 30 June 2004'" in respect of count 4.

87To address this ground it is necessary to consider what directions his Honour gave and what directions, if any, his Honour was asked to give on this topic.

88As is to be expected in the first part of the summing up his Honour gave the jury the standard direction concerning the onus of proof and the need for the Crown to prove every element of the charge beyond reasonable doubt. Later his Honour came to what were described as the "legal ingredients for the finance counts" and reminded the jury that the Crown had to prove each of them beyond reasonable doubt. He identified six. The first four were said not to be in issue namely: (i) the accused intended to obtain; (ii) for another company or person; (iii) a financial advantage; and (iv) the accused made a statement in writing.

89His Honour then stated that the next two were contentious, namely: (v) "that the statement is false or misleading in a material particular"; and (vi) that the "accused made that statement with reckless disregard as to whether it was false or misleading in a material particular".

90For count 1 and element (v), his Honour identified the relevant statement from the Director's declaration extracted in [31] above. His Honour then stated:

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

91His Honour then identified the corresponding statements for counts 2, 3 and 4. In relation to count 4 his Honour stated:

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

...

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

92Later, after referring to the "mental element" of the offence, his Honour told the jury:

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

...

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

...

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

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

93A number of matters should be noted about these extracts.

94First and most importantly, the context of these comments was that his Honour had already identified each element of the offence, including element (v) identified in [89], and directed the jury of the need to be satisfied of each such element beyond reasonable doubt.

95Second, on occasions his Honour referred to the statement in the accounts as an "opinion" or "warranty" by the appellant. I have referred to this in [32] to [36] above. In my view nothing turns on this. His Honour's references to that were merely a means of identifying which statement was the relevant one to consider, ie the director's statement of the appellant in the accounts and not any particular figures.

96Third, the statement in the extract from the summing up in [90] that the "the allegation the Crown bases counts 1 to 4 [on] is not that the numbers are false in these documents" but that it "is the acknowledgement of the correctness which is alleged to be false" read literally is not correct. The Crown case was that accounts representing a true and fair view were not capable of being prepared from the poor source material that was available. If that proposition was accepted it necessarily meant that at least some of the figures in the accounts had to be false. The Crown's case was that at least some of the numbers had to be false but it did not have to prove, nor could it, that any particular entry was false.

97However, I do not consider that this literal reading was conveyed by these passages when considered in context. His Honour subsequently referred to the consequence for the entries in the financial statements from the absence of supporting material as contended for by the Crown ("no such precise statements of financial position could be made"; "the accused either knew that the figures generally in the accounts were false or misleading" etc).

98The effect of the summing up was that the jury had the relevant statement relied on brought to their attention and were instructed that the Crown had to prove beyond reasonable doubt, inter alia, that the relevant statement was false or misleading in a material particular. They were instructed as to the method by which the Crown sought to prove that element namely by demonstrating that the source material was such that it was not possible to prepare accounts that matched the description in the relevant statement (ie that they gave a true and fair view). The Crown case on that aspect was consistent with the concluding words of the charge namely that "the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003". In those circumstances I do not see how the appellant was disadvantaged by the jury not being specifically instructed that the Crown was required to prove beyond reasonable doubt that "the financial statements did not give a true and fair view of the company's state of affairs as at 30 June 2003". Any elaboration of this issue would have simply brought the jury back to the discussion of the Crown case and the appellant's response that his Honour in fact provided to them.

99At the hearing of the appeal the Court invited Senior Counsel for the appellant, who did not appear at the trial, to identify in the transcript the point where the direction the subject of this ground was sought. The Court was referred to an exchange between Counsel and his Honour that occurred after addresses and prior to the summing up. I have referred to this exchange above at [70]. It only involved trial counsel responding to the Crown Prosecutor taking objection to his address to the jury on counts 1 to 4 and characterising the Crown case in the course of doing so. Although the appellant's counsel reminded his Honour of the last two lines of the charge no direction of any kind was sought at that time. Moreover, after his Honour finished summing up, no redirection or further direction was sought on this issue.

100I am not satisfied that his Honour erred in failing to give the direction sought much less that any such failure amounts to a miscarriage of justice.

101I reject grounds four and five.

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

102Ground six of the appeal complains that his Honour erred in allowing the evidence on each of counts 5 to 13 as "tendency evidence" on the other counts. I will defer consideration of that ground and address ground seven first.

103Ground seven of the appeal contends that the jury's verdict in respect of counts 6 to 13 on the indictment was unsafe and unsatisfactory. The appellant seeks to invoke that part of s 6(1) of the Criminal Appeal Act 1912 which enables this Court to intervene "if it is of the opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported having regard to the evidence" (see MFA v R [2002] HCA 53; 213 CLR 606 at [58]. He implicitly seeks a grant of leave under s 5(1)(b) to raise grounds of appeal involving questions of fact or questions of mixed law and fact (Rasic v R [2009] NSWCCA 202 at [12]). I would grant such leave.

104This ground requires this Court to "ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty" (M v R [1994] HCA 63; 181 CLR 487 at 493). In doing so this Court must undertake its own "independent assessment of the evidence both as to its sufficiency and its quality" (Morris v R [1987] HCA 50; 163 CLR 454 at 473). Thus it must consider any competing evidence to that presented by the Crown and weigh the conflicting evidence (SKA v R [2011] HCA 13; 243 CLR 400 at [24] per French CJ, Gummow and Kiefel JJ).

105In relation to the advantages enjoyed by the jury in hearing and observing witnesses compared to this Court in SKA at [13] French CJ, Gummow and Kiefel JJ stated:

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

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

106It follows that it is necessary to analyse each count and the evidence presented by the Crown and the appellant concerning that count in detail. However, I will describe in general terms the appellant's submissions in relation to this ground of appeal.

107With the possible exception of count 12, each of counts 6 to 13 had a common element, namely that the appellant made a specific representation to the investors that the money would be applied towards a specified purpose, being either a joint venture or a particular property development or construction project. This representation was said to amount to a deception in that it was not intended that the monies were to be so applied. The appellant's case at trial was that he had not made any such representation. As I will explain, his case was that the monies were received after he "sold the investors a share in a project which entitled the investor to a certain percentage share of the proceeds of the sale". He asserted that he and Streetwise were entitled to use the funds for their own purposes, they being the proceeds of a sale or a "buy in" price for the alleged percentage share of the proceeds of sale.

108The appellant submits that the verdicts on these counts were unsafe and unsatisfactory in this respect because, although some of the investors testified in chief that a representation amounting to that pleaded in the relevant counts on the indictment was made, he contends that none of them adhered to the representation when cross examined. He went further and said that some of them testified to the contrary and that "all of them conceded they were purchasing a share in the project".

109These propositions will be considered in the context of the evidence concerning each count. However, at the outset two points should be noted.

110First, contrary to the premise of these submissions, I do not accept that there is a necessary inconsistency between an investor being led to believe they were "purchasing" a share of profits in a development and that their funds would only be used to further or promote that development. For example, and by way of analogy, a person may subscribe for shares or units. In ordinary parlance, they might, if pressed in cross examination, agree that they "purchased" those shares or units but that would not be inconsistent with there being a reasonable expectation on the investor's part that the receiving company or the trustee would only apply their funds to promote that investment, consistent with the company or trustee's duties under the Corporations Act. Of course, the position would be different if the shares or units were purchased on an open market and they were being bought and sold between participants in that market. In that case, a purchaser could not have a realistic expectation that there were would be any restrictions on the vendor in dealing with the proceeds of sale. This directs attention to the precise context in which the relevant statements took place.

111In this case a critical component of the context for all bar one of the counts (count 12) was that what was being promoted was an investment in a "joint venture" for an ongoing project namely the residential development of a specific parcel of land. While the phrase "joint venture" may not have a settled common law meaning (United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; 157 CLR 1, at 10 per Mason, Brennan and Deane JJ), its repeated use in this case strongly suggests that the capital contributions of the investors would only be applied to the furtherance of that undertaking. This conclusion becomes overwhelming when the evidence is considered more closely.

112Second, the supposed inconsistency that the appellant points to was not taken up directly with any of the investor witnesses. With the possible exception of Mr O'Donnell, it was never suggested to the investor witnesses that they understood that they were purchasing a share of the profits of the relevant development with the consequence that the vendor was free to treat the money they paid for any purpose. Further, when the appellant gave evidence he denied a number of the conversations attributed to him to by those various investors and asserted that he said something different. This evidence was given even though, for the most part, the appellant's counsel did not challenge the investors' evidence, either by suggesting that the appellant did not make the statements they testified to, or by suggesting that the statements he did make were as he described in his later evidence in chief.

113It is not necessary to explore the extent, if any, of the application of the so called rule in Browne v Dunn (1893) 6 R 67 to the accused in a criminal trial nor what consequences follow for the appellant from any failure to comply with it (see MWJ v R [2005] HCA 74; (2005) 80 ALJR 329 at [18] to [19], [38] to [41]). It is only necessary to note that that in this case the jury did not have the benefit of hearing the response of a number of the investor witnesses to the suggestion that they were only purchasing a share of the profits in the relevant venture and that there were no limits placed on the money they contributed. The jury also did not have the benefit of hearing the response of a number of the investor witnesses to the appellant's version of the conversations that led to their investment. These were clearly matters relevant to the jury's assessment of their evidence and that of the appellant (MWJ at [19], per Gleeson CJ and Heydon J).

114This Court this does not have the benefit of considering the responses of the investor witnesses to those matters either. Consistent with MWJ at [19] that is a matter relevant to our assessment. It makes the task of the appellant in persuading this Court that it was not open to the jury to be satisfied beyond reasonable doubt that the accused was guilty of these counts that much harder.

115During argument Senior Counsel for the appellant nominated the strongest count (from the Crown's perspective) as being count 10 concerning Mr Falzon and the weakest as being count 7 concerning Mr and Mrs O'Donnell. In deference to that selection I will address those counts first although I do not share that assessment. In summarising the evidence concerning each count I will focus on that part of the evidence relevant to each count that relates to the point raised by the appellant in relation to this ground as summarised above in [107] to [108].

Count 10: Falzon

116Count 10 of the indictment charged the appellant as follows:

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

117The deception pleaded by this count involves a representation by him as to what the funds would be applied "to", namely a joint venture, which was "misleading and deceptive" because "the funds were not to be applied for the specific purposes of any such joint venture". This latter aspect is a reference to either the appellant's intentions or understanding at the time he made the statement as to how the funds were to be applied.

118The Crown sought to prove that the appellant did not intend or understand that the funds would be "applied for the specific purposes" of a joint venture by proving that they were not in fact used for that purpose. Given the complete control exerted by the appellant over the affairs of the Streetwise group the inference was available that the application of the funds reflected his intention or understanding as to how the funds were to be applied at the time the relevant investor was induced by the appellant to part with them.

119To this end the Crown called evidence from Mr Rowland whom I have referred to above. For each count he explained what became of the funds provided by each investor. In relation to count 10, Mr Rowland stated that the $771,000.00 invested by Mr Falzon was deposited directly into the mortgage overdraft account of Colosseum Investments in reduction of its overdraft, and that approximately $100,000.00 of that amount was sent overseas.

120At no point in his evidence did the appellant assert that he either intended to use the funds for the purposes of any joint venture, or that they were in fact used for that purpose. As I will explain, the focus of his defence was a denial that he made the representation alleged by count 10 (and the balance of counts 6-13).

Mr Falzon's evidence

121Mr Falzon and a number of the other investors the subject of counts 6 to 13 entered into what were described as joint ventures with Streetwise for the development of a property at 7A Battle Boulevard, Seaforth (the "Seaforth property"). It appears that exchange on the Seaforth property took place in January 2003 and the purchase was completed in about June 2003. At the time of purchase there was an outstanding development application. There was no further work done on the property until around September 2004 when there was an application to modify the development consent. Another pair of investors, Mr and Mrs Di Benedetto, inspected the property in early 2006, well after Streetwise was in administration and their investment had turned sour. They found the same building on the property that they had seen in early 2003 prior to making their investment.

122In September 2002 Mr Falzon applied for a position as a construction manager with the Streetwise Group. During his employment he acquired some familiarity with the proposed development projects at Panania and Seaforth. He prepared estimates and budgets. At that time work had commenced on the site at Panania, but work had not commenced on the site at Seaforth. He left the employment of the Streetwise Group in June 2005.

123Some time around April 2003 Mr Falzon became concerned about his financial position and spoke to the appellant. He had a number of different properties, each with separate mortgages, leases on a number of cars and, in his words, "stacked up credit card debt". He stated that the appellant reviewed his position and told him:

"You've got equity in your property. I believe we could get a loan to pay off all the debts in one ... You'll probably have a bit left over to invest in a joint venture."

Mr Falzon said that he asked the appellant:

"What is a joint venture?"

The appellant replied:

"That's where we both invest into a development and we develop it, we sell it off and we share the profit".

124Mr Falzon stated that the appellant then assisted him in obtaining finance. They discussed using Mr Falzon's personal building company, Angel Constructions Pty Ltd ("Angel") as a builder on one of the projects.

125On or about 18 June 2003, a document described as a "joint venture agreement" was signed by Mr Falzon in his own capacity and on behalf of Angel, and by the appellant on behalf of Streetwise. The joint venture agreement was a three page document, of which only two pages set out written terms. It included the following provisions:

"Background

 Streetwise Property and Projects Pty Ltd is a Property Development & Construction Management company

 Mr Richard Falzon & Angel Constructions Pty Ltd wish to enter into a joint venture with Streetwise Property and Projects Pty Ltd to acquire and develop residential property for the purpose of resale ultimately resulting in profit.

Framework

 Properties for development known as [address] Seaforth and [address] Panania.

 Mr Richard Falzon and Angel Constructions Pty Ltd are to raise capital via a mortgage (refinance/redraw) from the equity of their properties:

[address] Gladesville NSW and [address] Rozelle NSW

 The sum of Seven Hundred and Fifty Thousand Dollars ($750,000.00), (capital).

 The Trustee and/or the Director(s) should be duly authorised, notwithstanding the Corporations Act, to negotiate, acquire, encumber, pledge and/or develop property and/or invest/ borrow monies for and on behalf of the Investment Vehicle at his/her sole discretion acting in the best interest of the Investment Vehicle and/or the stakeholder(s).

 A minimum commitment of 24 months is agreed to ensure maximum realisation of the Investment(s) however, this may vary by mutual agreement in writing by the parties.

 Angel Constructions Pty Ltd shall be the appointed builder to develop the two investment properties.

Agreement

This Deed outlines the intention of the parties. It is intended to be legally binding in accordance with its terms on execution of this document by the Parties.

1. The joint venture vehicle shall be responsible for servicing the interests on the capital raised, less Five Hundred Dollars ($500.00) per month, until the project is completed or the capital returned, whichever is the sooner.

2.1 Streetwise, acting as Project Managers, shall be entitled to a Professional Fee of 10% + GST on the Gross Realisation of the Proposed Project(s) and/or Development(s) as per Annexure "A".

2.2 The Profession Fee shall be payable as follows: ..."

There was no Annexure "A" to the agreement.

126Mr Falzon said that around the time of the execution of the joint venture agreement he had a discussion with the appellant about the money that he was contributing. He said the appellant said "words to the effect that the money would be used in the joint venture".

127Until Mr Falzon left the employment of Streetwise in June 2005 it paid the interest payments on his loan facilities. After he left, the appellant told him that he could not meet the full interest payment. A couple of months later, they ceased altogether. After Streetwise went into liquidation he was left with a mortgage on his house. He sold all his properties to pay it off.

128Not one of the specific statements that Mr Falzon attributed to the appellant, including those set out in [123] and [126] above, was taken up in his cross examination. It was suggested to him that he knew that half the money that he was investing "was to go to Panania and the other half to Seaforth", but he stated that was not clear. He was asked as follows:

"Q. I'm suggesting to you that you invested $375,000.00 in Seaforth and that purchased you a 12.6% share in the Seaforth -

A: I believe the figures, yeah.

Q. Whatever the percentage was it was your understanding that you were purchasing a certain share of the project yourself?

A: Yes, yes.

Q. And the purchase cost was the amount of money that you invested for Seaforth?

A: Yes.

Q. And similarly, there was a purchase cost for a share on the Panania project?

A: Yes, but I wasn't clear whether my money was going to be the purchase cost or the overall end part of the building cost too?"

129In re-examination Mr Falzon stated that no one from Streetwise advised him of any percentage he would receive of the profit from the joint venture.

The appellant's case on count 10

130In his evidence in chief the appellant produced a chart which broke up the acquisition and development costs on the Seaforth project and the contributions towards that project from Mr and Mrs O'Donnell (count 7), Mr and Mrs Di Benedetto (count 8), Mr Falzon and Mr Fassos (count 6). He attributed a particular percentage share to each.

131The appellant stated that he had a discussion with Mr Falzon and the latter had stated: "I want to split my $750,000 to buy a share in Seaforth and a $375,000 share in Panania". He was asked:

"Q. What do you say about the allegation made against you that you represented that that money would be used for the purpose of development?

A. That's not correct because Mr Falzon and Angel Construction, as you can see in the framework, has been appointed the builder [referring to the joint venture agreement].

...

A. ... So the suggestion on that, the money was going to be used for construction, doesn't make sense simply because if the money was going to be used for constructing the property I wouldn't need to take the money from him only to pay it back to him again."

132In cross examination, the Crown prosecutor took up with the appellant the various statements attributed to him by Mr Falzon, notwithstanding that they had not been challenged by his own counsel, nor specifically addressed by him in his evidence in chief. Amongst other matters, the appellant denied suggesting to Mr Falzon that he would have sufficient funds "left over to invest in the joint venture" or explained to him that a joint venture was where they both "invested into a development, develop it, sell it off and we share the profit". He denied arranging the finance on behalf of Mr Falzon.

133The appellant called character evidence (see s 110 of the Evidence Act 1995). The appellant's sister, Somakanth Manickun, was four years his senior and worked for the Uniting Church as an administrative clerk. She was aware that he had been charged with fraud offences which involved misleading people, but was not aware of the specific allegations. She described the appellant as someone who would "deliberately not mislead anybody" and as a "totally honest person".

134Ms Rita Smith, the general manager and director of a cosmetics company, stated that she had known the appellant for eleven years, having lived near him in Milsons Point. She and her husband had become friendly with his family. She described him as having a "good strong character" and as a man with a "really good character and great morals and is very kind hearted as well". In cross examination she agreed that they had only lived in the same building for four years, although they kept in contact afterwards. She did not have any detailed knowledge of the charges.

135The appellant also called Anthony Khouri, a property developer and the Consul General for the People's Republic of Bangladesh. He said that he had met the appellant in 2000 or 2001 at a Macquarie Bank function and they had become friends. He described the appellant as an "honest man, ... a family man, a straight shooter" and he was "amazed" that he had been charged with fraud offences. In cross examination he stated that he had lost contact with him around 2005 or 2006 and that he had never been involved in any business dealings with the appellant.

Consideration

136The evidence in chief of Mr Falzon was on its face a cogent narrative. The statements he attributed to the appellant (see [123] and [126]) clearly conveyed that the moneys Mr Falzon was borrowing would be "applied to the joint venture" as alleged in count 10 of the Indictment.

137Mr Falzon's evidence was barely challenged in cross examination. I have already addressed the consequence of that at [113] to [114]. The concession, if it can be called that, that he understood that he was "purchasing a certain share of the project" ([128]) was not inconsistent with his evidence in chief and did not undermine the Crown case. For the reasons I indicated at [110], in and of itself an understanding by a person in Mr Falzon's position that he was "purchasing a certain share of the project" is neutral. It is not inconsistent with a belief that his funds were to be applied for the purpose of furthering that project. Whether they were or not depends upon the context. The context as testified to by Mr Falzon clearly suggested that the funds he borrowed would be "used in the joint venture". Further, it was not suggested that, by virtue of his position as an employee of Streetwise, Mr Falzon was aware how his funds would be applied.

138The appellant's denials of the statements attributed to him by Mr Falzon were only extracted from him in cross examination by the Crown Prosecutor. The evidence given by the appellant in chief that he did not represent that the moneys would be used in the joint venture, because Angel had already been appointed the builder makes little sense. There was debate about whether Angel had in fact been appointed the builder at the time the agreement was signed. On any view Angel had not been paid and, even if it was, there were still other costs associated with the development to which Mr Falzon's funds could have been applied.

139One matter of considerable importance in considering the competing evidence of Mr Falzon and that of the appellant is the "joint venture agreement" described above. It was clearly a flawed document. Amongst other failings, it refers to a number of different entities, none of whom are defined including the "trustee", the "director(s)", the "Investment", the "Investment Vehicle", the "Stakeholder(s)", and the "joint venture vehicle". The operation of the "joint venture" is not explained and many of the obligations and rights of the parties are only hinted at. However, even with those deficiencies, the document provides substantial support to the various representations referred to by Mr Falzon. The description of the transaction i.e. "joint venture" does not support the appellant's case. The document does not suggest that there was any "sale" of a portion of the profits nor is the percentage of the ultimate profit stipulated. Instead, what the document contemplates is that Mr Falzon would contribute capital of $750,000.00 via a mortgage the interest of which was to be paid by a "joint venture vehicle", which was presumably an entity owned and controlled by both parties to the joint venture. It suggests that the money that is to be contributed is not to merely purchase a "share" of the profits but instead is to be contributed for the furtherance of the joint venture.

140The terms of that document are completely consistent with the various statements that Mr Falzon attributes to the appellant and inconsistent with the appellant's case. Although the appellant's character evidence was to his credit it does not in my view add much weight to either his denials or the contention that he was less likely to have committed the offences. None of the character witnesses had business dealings with the appellant which were even remotely similar to those described by the investor witnesses. The appellant's case was weak. The transaction provided very little security to Mr Falzon for his investment. However, at the very least he was entitled to believe that the funds he was investing in the joint venture would be used to add value to the property in question.

141The above analysis does not address the use of the evidence on the other counts in considering this count (ie the tendency evidence). Leaving that material aside for the present I am satisfied that, upon a consideration of the whole of the remaining evidence, it was open to the jury to be satisfied beyond reasonable doubt that the appellant was guilty of count 10. The only matter the appellant put against this conclusion was the allegedly fatal inconsistency in Mr Falzon's evidence arising from the extract set out in [128] above. In reality it was no such thing.

Count 7: John and Gillian O'Donnell

142Count 7 of the indictment charged the appellant with the following, namely that:

"In about February 2003 by a deception, [he] did dishonestly obtain from John and Gillian O'Donnell, a financial advantage for Streetwise Property and Projects Pty Limited, namely funds of approximately $489,652.00, in that he did represent that funds provided by John and Gillian O'Donnell would be applied towards the purchase of a property at Narre Warren and towards a joint venture between them and Streetwise to develop a particular property in Seaforth that had been purchased by Streetwise, which representation was misleading and deceptive because the funds were not to be applied for those specific purposes."

143By reference to source records Mr Rowland explained to the jury that an amount of $489,651.82 representing the proceeds of funds raised by John and Gillian O'Donnell were deposited into an account in the name of Streetwise Property Group Pty Ltd. Those funds, along with other funds deposited into that account, were in most part disseminated within the next seven days. The disbursements included a $90,000.00 cheque payable to Star City Casino, a $130,000.00 cheque payable to BMW Dealership, and a $275,000.00 cheque payable to a "Mithiandhan (or Allan) Bangaru", presumably being a relative of the appellant.

Mr and Mrs O'Donnell's evidence

144Mr John O'Donnell stated that in around September 2002 he was walking through Warringah Mall when he was given a Streetwise brochure. The brochure promoted Streetwise's ability to provide low interest home loans. It indicated that for "small property developments", Streetwise would offer "a complete service" which would include locating suitable sites, undertaking a feasibility analysis, commissioning builders, arranging construction finance and arranging the marketing and sale of the developed property.

145Mr O'Donnell and his wife attended two meetings with various Streetwise personnel. A third meeting was arranged for 23 October 2002 at which the appellant attended. During that meeting the appellant suggested that they borrow $500,000.00 which "would be used to act as a deposit on [the] investment property in Melbourne and the rest would be used as a development of a joint venture project between Streetwise and ourselves". The appellant referred to a property at Botany.

146Mr and Mrs O'Donnell executed a two page document entitled "Irrevocable Authority to act as Co-ordinator & Project Manager" on the day of that meeting. It described itself as a formal agreement between Streetwise and Mr and Mrs O'Donnell and included the following:

"Streetwise, acting upon our behalf and in joint interest, will locate and purchase a "suitable" property in the greater Sydney area (NSW Australia) with the view of developing that site and selling for a profit.

...

Streetwise are to manage and coordinate the entire project on behalf and in joint interest with John and Gillian O'Donnell.

...

Streetwise will, whether through Streetwise Home & Investment Loans Pty Ltd or through an external financier, obtain necessary finance for the original purchase and construction of the proposed development.

...

All external costs including government statutory charges, legal, finance, construction costs as well as the financing of the borrowed funds, will be the responsibility of John and Gillian O'Donnell." (emphasis added)

147Consistent with what was stated in the letter, Mr and Mrs O'Donnell signed an irrevocable letter of intent and authority to act on 30 October 2002 conferring on Streetwise authority to obtain finance on their behalf. The letter recites that they would be proceeding with the purchase of a property at Narre Warren in Victoria with a purchase price of $261,000.00. Streetwise then procured finance on their behalf.

148On 10 January 2003 Mr and Mrs O'Donnell attended another meeting with the appellant. The appellant indicated that there were problems with the property at Botany. Instead he promoted the Seaforth development. Mr O'Donnell said the appellant stated the following:

"That the project would go ahead. All the monies were to be used for a joint venture development. [The appellant] gave us a project feasibility for a property in [address] in Seaforth."

(emphasis added)

149At the meeting they were provided with a project analysis for the property at Seaforth specifying the acquisition, development and construction costs together with the expected profit. The appellant advised them they "would have a share of 30 per cent" of the profit for the Seaforth development. The appellant stated that the loan monies would be transferred to Streetwise. Mr O'Donnell was then asked whether there was a discussion about what the loan monies would be used for and replied:

"Yes, the majority of the loan monies would be used for the joint venture development in Seaforth and some of it would be used towards the deposit as of the investment property in Melbourne (sic)."

150Not surprisingly, Mr O'Donnell stated that his (and his wife's) belief was that their money "was to be utilised in the joint venture project and also as a deposit for the investment property in Narre Warren near Melbourne".

151Mr O'Donnell stated that for a year or so after these transactions settled, Streetwise made the payments on the mortgage that he and his wife had taken out. After May 2003 they did not receive any written reports or updates concerning the Seaforth property and by early 2005 there still had not been any progress on the development of the site. It appears that they were advised that some of their funds had been applied towards a holding deposit on the Narre Warren property, but the purchase of that property was never completed. Ultimately they could not afford to make the repayments on the mortgage which was secured over their family home. They became embroiled in litigation with the lender.

152The appellant emphasised two parts of the cross examination of Mr O'Donnell. First, Mr O'Donnell agreed that he understood that "the money [he was] paying to Streetwise was in respect of a certain percentage share of the Seaforth property, apart from the $50,000.00 that went to Narre Warren". This is submitted as evidence of the proposition that he was aware that he was purchasing a share in the project. It does establish that. However, for the reasons I have already addressed, it takes the appellant nowhere.

153Second, the appellant points to the following passage as supposedly strong evidence that the appellant did not make any representation that funds applied by the investors would be applied towards the development of any property:

"Q. Now of the $489,000.00 odd that was paid to Streetwise, $50,000 was to be allocated to the property at Narre Warren?

A. Yes.

Q. Would you agree with this proposition; the balance of those funds was for the purpose of building the Seaforth property?

A. I believe so.

Q. All right. Now there was no representation made to you by [the appellant] which prevented him from using other funds of his to build the Seaforth property?

A. No.

...

Q. Now I need to be a little bit more specific with you, so I will ask you to assume that the money you paid for the Streetwise, sorry, for the Seaforth project, assume it was paid into a Westpac Bank account just to delineate it from other funds. Can you assume that?

A. I have really no idea where that money went.

Q. The money was put into a bank account of Streetwise?

A. Presumably, yes.

Q. Let's call that bank account X?

A. Yes.

Q. There was no representation made to you by [the appellant] which prevented him from using funds out of bank account Y?

A. No.

...

Q. And the entire project could have been funded from bank accounts Y and Z of Streetwise, that is not in breach of any representation made to you by [the appellant]?

A. I don't believe so.

Q. And if that is the case, the monies which were put into bank account X was available to Streetwise for other purposes?

A. I've really no idea about that.

Q. But it is not to the contrary to any representation made to you by [the appellant] that would prohibit him from having access to the funds in bank account X for other purpose?

A. That's right, yes.

Q. That is right?

A. Mmmmm.

Q. Now I do need to be a bit more specific, so you say 'other purposes'. Do you agree with me that that means other purposes unrelated to the Seaforth property venture?

A. It is possible, yes.

Q. For example, buying babies shoes?

A. Yes.

Q. Or paying school fees?

A. Yes.

...

Q. Or a box of champagne?

A. Champagne, yes.

Q. That wasn't contrary to any representations made to you by [the appellant]?

A. No."

(emphasis added)

154The Crown returned to this point in re-examination:

"Q. You remember being asked those questions, to assume that your money went into bank account X, assume the bricklayers for Seaforth were paid out of bank account Y, and that your money in bank account X was then used for other purposes unrelated to the Seaforth joint venture such as baby shoes and school fees. Now what I'm interested in, in giving the answer that you did, did you make any other assumptions?

A. No. I would expect that the monies we put into the project would have been used for that project.

Q. Did you ever have any discussion with the accused that the funds that you put into the project may have been used for purposes unrelated to the Seaforth joint venture?

A. No."

155As was the case with Mr Falzon, at no point during the cross examination of Mr O'Donnell was he ever challenged on the specific conversations that he attributed to the appellant that I have referred to at [148] to [149] above.

156The Crown also called Mrs Gillian O'Donnell. Her evidence was consistent with her husband's, although she did not give evidence of any of the specific statements attributed to the appellant that Mr O'Donnell did. It was clear, however, that she understood that she and her husband were pursuing a joint venture. She recounted how some weeks after the meeting on 10 January 2003 during which the appellant had raised the development of the Seaforth property she saw the property being advertised for sale. She contacted the appellant and asked him: "The Battle Boulevard property is in the Manly Daily for sale. How come you can offer us this as a joint venture when you don't even own it?" The appellant responded: "Oh is it? ... there is nothing to worry about you will see a sold sign going up next week".

157In cross examination the proposition that the monies would be used to purchase a share in the joint venture was taken up with her:

"Q. And you understood that your money would be applied towards purchasing a share in that project [i.e. the Seaforth joint venture]?

A. Yes, it was a joint venture.

...

Q. And you understood, did you not , that you were to share in a certain percentage of the proceeds of sale after development?

A. Yes."

158In re-examination she explained that she thought "[the appellant] would get a share and we would get a share [of the profits]".

The appellant's case on count 7

159In his evidence in chief the appellant agreed that he had shown Mr and Mrs O'Donnell a feasibility study concerning the Seaforth property outlining the costs and expenses involved. He agreed that their funds had not in fact been "applied" towards a deposit on the property at Narre Warren or the "Seaforth venture". He denied that he had made any representation that the funds would be so applied. He said that he told Mr and Mrs O'Donnell "they are buying a share in the Seaforth project and for their $500,000, that would be the buy-in price off the project". He stated that he did not consider they were obliged to use the money to develop the property. Further, he or Streetwise treated the sale of the "shares" in the projects as "income to us" (i.e. Streetwise).

160In cross examination the appellant asserted that the O'Donnells had in fact entered into a joint venture agreement similar to that of the Falzons and denied that he told either Mr or Mrs O'Donnell that they could expect to receive 30% of the profit. He denied he told the O'Donnells that 10% of their $500,000.00 would be used as a deposit on the investment property in Melbourne, and the rest would be used in the development of the joint venture project at Seaforth.

Consideration

161There are only two relevant differences between the evidence on this count and that concerning count 10. First it does not appear that there was a joint venture agreement (although the appellant asserted there was) of the kind entered into by Mr Falzon. However the "Irrevocable Authority" they entered into that I have extracted at [146] was strongly supportive of the Crown case. It clearly conveyed that the finance they were providing would be used to fund "the original purchase and construction of the proposed development". The appellant did not sign that document but it was presented to Mr and Mrs O'Donnell during a meeting he attended as the managing director and made the final pitch for their funds.

162The second difference is the answers that Mr O'Donnell gave concerning the application of the funds that I have set out in [153] above. Presumably it is because of those answers that the appellant considers this count is the strongest for him on this ground of appeal. The passage commences with Mr O'Donnell conceding that whatever he was told it did not prevent the appellant from using other funds to "build the Seaforth property". Next he agrees that the "entire project could have been funded" from funds in bank accounts "Y" and "Z" even though his funds were placed in bank account "X". He was then asked "if that is the case" then Streetwise could use the monies in bank account "X" for "other purposes". Mr O'Donnell then agreed that their use for "other purposes" such as school fees and baby shoes would not be contrary to any representation from the appellant.

163The phrase "if that is the case" qualifies those answers given by Mr O'Donnell regarding the school fees and baby shoes. "The case" is a reference to the assumption in the previous question that the "entire project could have been funded from bank accounts 'Y' and 'Z'. Thus Mr O'Donnell only agreed to a proposition that, if the Streetwise group had in fact applied funds to complete the "entire project", then it would not be contrary to any representation for Streetwise to apply his funds to other purposes. Of course the premise of this questioning was not made good. Streetwise did not apply funds to complete the entire project. It hardly got off the ground. These alleged concessions do not advance the appellant's case. They only highlight the misuse of Mr and Mrs O'Donnell's funds.

164Even if this is not the correct analysis of this extract from Mr O'Donnell's evidence and there was a flat contradiction between his evidence in chief and re-examination on the one hand and his cross examination on the other, I cannot overlook the advantages the jury enjoyed in hearing his evidence, especially the context in which these answers were given. The jury had the opportunity to do so against the backdrop of the documentary evidence relevant to this count and their own assessment of whether Mr O'Donnell simply handed over almost $490,000.00 to the appellant with no limitations on the manner in which the funds could be used. If I had a doubt about this count, which I do not, it would only be a doubt of a kind that would be resolved by the "jury's advantage in seeing and hearing the evidence" (M v R at 491).

165Even allowing for his character evidence and leaving aside the tendency evidence of other investors, I am satisfied that it was open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt on count 7.

Count 6 - Mr and Mrs Fassos

166I have set out count 6 of the Indictment in [17] above. Mr Rowland explained that the $262,501.00 invested by Mrs Fassos was transferred on 23 April 2003 into the account of Colosseum Holdings. It operated to reduce its substantial overdraft. Other funds were deposited into the account at the same time. Mr Rowland identified transfers from that account over the next seven days, including $122,705.01 in overseas telegraphic transfers. The bulk, if not all, of the payments had nothing to do with the Seaforth property.

167Mr Fassos commenced work with Streetwise in 2002 as a client advisor. He marketed house and land packages. At some point the appellant told him that a new form of investment was to be promoted in the form of joint venture projects. He assisted in the sending of promotional material of the kind distributed to Mr O'Donnell to other clients.

168Mr Fassos' family home was in his wife's name. He approached the appellant in early 2003 in relation to investment opportunities. He said the appellant "suggested that we could possibly look at getting into a joint venture". He outlined that Streetwise had established relations with different lenders that "allowed Streetwise to get people into that sort of investment" (i.e. a joint venture) and then after costs were taken out "whatever was left would be distributed amongst the investors". The appellant identified an area of land at Seaforth and told him that "it would be up to three to four people in total including [the appellant] that would be involved with the joint venture" concerning Seaforth. The appellant then arranged for loan finance for Mr Fassos' wife on the security of the family home.

169On 22 May 2003 Mrs Fassos executed a document entitled "Deed of Investment Joint Venture". The document is in similar form to that described above in relation to Mr Falzon, although there is no reference to any company associated with Mr and Mrs Fassos being the builder. It records that "Mrs Fassos wish to enter into a joint venture with Streetwise Property & Projects Pty Ltd to acquire & develop residential property for the purpose of resale ultimately resulting in profit", and that Mrs Fassos was to raise capital via a mortgage of $262,501.00.

170As with Mr Falzon's deed, under the heading "Agreement" clause 1 referred to there being a "property investment vehicle" which was responsible for servicing the interest on the capital raised. Mr Falzon recalls the appellant explaining that it "would be structured as a trust" and that within that trust there would be "up to three to four investors maximum partaking in that investment" including the appellant, and the appellant would be the "executive of the trust or the director and the person calling all shots".

171In November 2003 a further version of the agreement was sent to Mrs Fassos signed by the appellant. It nominated the development property as the Seaforth property. The phrase "property investment vehicle", being the body responsible for servicing the interest on the capital, was replaced by the phrase "property development vehicle". It also records that Mrs Fassos "would share on a pro rata basis of the profit or loss of the respective development".

172Mr Fassos left the employment of Streetwise at some time in 2003. After he left he contacted the appellant requesting the preparation of further documentation concerning his wife's investment. At some point he requested a personal guarantee from the appellant, which was provided.

173In 2005 the contributions by Streetwise to the interest payments on the mortgage ceased. Mr and Mrs Fassos subsequently became embroiled in litigation with the lender which sought possession of their home.

174In cross examination, Mr Fassos volunteered that he believed that the funds that were being contributed would go into a "trust with the other investors". The appellant referred the Court to part of his cross examination in which Mr Fassos was referred to the flyer concerning joint ventures that was distributed to Streetwise clients. Mr Fassos confirmed his understanding that it was Streetwise's responsibility to pay for such matters as commission, to retain a reputable builder, and arrange construction finance. None of this advances the appellant's case in any respect whatsoever. Neither his answers nor the contents of that flyer are inconsistent with the proposition that the monies contributed to the joint venture would be used for the purposes of the joint venture.

175Similarly, the appellant drew the Court's attention to part of Mr Fassos' cross examination in which he agreed that the effect of the transaction was that his "wife was putting money in and therefore acquiring a share in the project and could share in the profits based on her shareholding". Again, this does not advance the appellant's case.

176In re-examination Mr Fassos confirmed, if confirmation was necessary, that it was his understanding "that the funds were going to be executed for the ongoing costs of the development, of the joint venture" at Seaforth.

177Mrs Fassos did not give evidence. No complaint was made to the trial judge or to this Court concerning this and it is unnecessary to consider it further.

178The specific statements attributed to the appellant by Mr Fassos were not taken up with him in his evidence in chief nor in cross examination. However the Crown prosecutor pressed the appellant to identify where in the "Deed of Investment Joint Venture" there was any reference to Mrs Fassos buying a share in any project. He conceded that there was none.

Consideration

179In one respect the evidence presented appears to have not supported one aspect of count 6. As Mrs Fassos was the sole owner of the family home and the sole lender then the funds that were invested appeared to be hers and not "funds provided by Stephen and Jane Fassos" as alleged in the indictment. No point to that effect was taken at trial or before this Court. If it had, and even if the Crown conceded its correctness, it is difficult to see how an application to amend the indictment under s 20 of the Criminal Procedure Act 1986 could have been resisted. Leaving aside that point then the observations made above in relation to counts 7 and 10 apply with equal force to this count. The statements made to Mr Fassos and the terms of the joint venture document all pointed to the moneys invested being applied to pursue the development envisaged by the joint venture. In particular the references by the appellant to there being a "trust" that would hold the funds makes the position stronger. Even with the benefit of the character evidence the appellant's assertions to the contrary were implausible. Leaving aside the tendency evidence of other investors, I am satisfied that it was open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt on count 6.

Count 13 - Tavares and Rowe

180Count 13 charged the appellant with the following:

"In or about June 2003, by a deception, [he] did dishonestly obtain from Jose Tavares and Kim Rowe a financial advantage for Colosseum Investment Holdings Pty Limited, namely funds of approximately $352,824.53 and that he did represent that the funds provided by Jose Tavares and Kim Rowe would be applied to the development of a particular property at Kellyville Ridge through a company in which they would be the directors, which representation was misleading and deceptive because the funds were not to be applied for the development of this property through such a company."

181Mr Rowland explained that Mr Tavares and Ms Rowe drew down an amount in excess of $400,000 from their mortgage from a loan facility on or about 2 June 2003, of which $50,873.00 was used to discharge an existing mortgage, and $352,824.53 was deposited into the overdraft account of Colosseum Holdings. The latter amount operated to reduce Colosseum Holdings' substantial overdraft. Cheques were then paid out of Colosseum Holdings' account for various expenses concerning the Streetwise group and other expenses, including the payment of fees to a private girls' school. None of the payments were referable to the property development the appellant discussed with Mr Tavares and Ms Rowe.

182Mr Tavares stated that at around Christmas 2002 he gave his name to a "spruiker" in a shopping centre who was promoting investment properties. Subsequently he received a telephone call from someone associated with Streetwise. Mr Tavares and Ms Rowe were visited at home by represent-atives of Streetwise.

183On 6 February 2003 he and Ms Rowe attended a meeting at Streetwise offices in the city. The appellant attended. Mr Tavares recalled the discussion concerned "our role in a joint venture" and the appellant said words to the effect that: "We would build a property and then later sell it and split the profits". He said the appellant described a transaction in which they would take their "equity from our house to finance the project", and that a company would be set up of which they and the appellant would be directors and they would "build the property through that". They were provided with a project analysis by the appellant. They attended another meeting at which the appellant again promoted the transaction, including telling them that Streetwise would arrange for a loan.

184Subsequently they received a number of documents to sign, including a document entitled "Deed of Investment/Joint Venture" dated 22 May 2003. The Deed is not relevantly different to the deed concerning Mr and Mrs Fassos. It recites the wishes of Mr Tavares and Ms Rowe to enter into a joint venture to acquire and develop residential property. It refers to there being a "property investment vehicle" of which they would be shareholders. They were required to raise capital via a mortgage of $355,000.00. In fact, no such company was ever established.

185The loan was arranged. For a period Streetwise made the interest payments. A property for development was identified in Kellyville. During the period from May to Christmas 2003, Mr Tavares observed that no work was being done on the property but then later saw some building materials on the site. He did not receive any reports concerning the progress of the joint development. By the middle of 2004 he noticed that the work on site had ceased. Mr Tavares commenced sending e-mails to the appellant, but to not much avail. By the middle of 2005, the two year period contemplated by the joint venture document had expired and Mr Tavares was seeking the return of his capital. By this time Streetwise was in administration. The interest payments ceased. Mr Tavaras and Ms Rowe became embroiled in litigation with the lender.

186In cross examination Mr Tavares reiterated that his understanding was that the money that he and Ms Rowe were contributing was to be used for "building purposes as part of the joint venture". He stated that the money was "effectively quarantined for joint venture purposes". He also agreed that the money referred "to in the deed of investment, is a purchase of a share in a project".

187In his evidence in chief the appellant asserted that he sold Mr Tavares and Ms Rowe a 16.8% share in the project at Kellyville (and that Mr and Mrs Hardy had also bought a 23.7% share). Again, in cross examination the Crown prosecutor directed the appellant's attention to the terms of the joint venture and the absence of any reference to a share in a project being purchased in that document. The appellant denied that the effect of that document and what he had told Mr Tavares and Ms Rowe was that the funds would be applied to the property development at Kellyville.

Consideration

188The above observations concerning counts 10, 7 and 6 apply with equal force to this count. There was no real challenge to Mr Tavares evidence. His "concession" that he and Ms Rowe were purchasing a share in the development project took the appellant nowhere. He maintained that the money was "quarantined" for the development. The joint venture deed with the features identified in [184] strongly confirmed that. The only possible conclusion from the terms of that document and the statements attributed to the appellant was the capital they raised was to be used by the "property investment vehicle" to fund the development. Leaving aside the tendency evidence of other investors and even taking into account his character evidence, I am satisfied that it was open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt on count 13.

Count 8 - Mr and Mrs Di Benedetto

189Count 8 charged the appellant as follows:

"In about February 2003, by a deception [he] did dishonestly obtain from Maria and Lawrie Di Benedetto, a financial advantage for Streetwise Property and Projects Pty Limited, namely funds of approximately $487,660.00 in that he did represent that funds provided by Maria and Lawrie Di Benedetto would be applied towards a joint venture between them, another investor and Streetwise to develop a particular property in Seaforth, which representation was misleading and deceptive because the funds were not to be applied for the specific purposes of any such joint venture."

190Mr Rowland explains that $487,660 from Mr and Mrs Di Benedetto was deposited into the account of Streetwise Property Group Pty Ltd. Those funds together with other funds in that account were distributed amongst the bank accounts of other companies within the group. None of this money was applied to develop the Seaforth joint venture.

Mr and Mrs Di Benedetto's evidence

191Towards the end of 2002, Mrs Di Benedetto was approached by a woman at Warringah Mall who said she was a representative of Streetwise. Mrs Di Benedetto provided her name and contact number. She was later contacted by another representative of Streetwise. Mrs Di Benedetto and her husband attended a meeting at their office in Clarence Street in January 2003. They were introduced to the appellant. They returned for another meeting with the appellant about a week later. The appellant showed them the Seaforth property. He described it as a joint venture which involved the demolition of the existing duplex and the erection of a new one. They enquired of the appellant how much was needed to invest and he told them $500,000.50. He described the investment as a "joint venture and that means that it's between yourself, Streetwise and another couple, another investor. And we pay your interest each month and he went into more detail about that ...". They returned to Streetwise's offices in Clarence Street. They were given a project analysis which showed a likely healthy return.

192The appellant then arranged for their loan application and had them sign various documents. The loan was settled at some time around mid-February 2003 and they were notified that an amount of $487,645.41 had been distributed to Streetwise.

193Mrs Di Benedetto said that she became concerned that she had nothing in writing recording their investment in the property at Seaforth, and followed it up with the appellant. Eventually he produced a "Deed of Investment Joint Venture". They and the appellant signed. This Deed was not relevantly different to the document signed by Mrs Fassos, except in the following respects: the "Background" section refers to the property at Seaforth; the "Framework" section refers to the amount of capital to be contributed as $487,660.41; and the name of the "property investment vehicle" is identified as a company called Bentley East Pty Ltd ("Bentley East"). Mrs Di Benedetto stated that it was her understanding that their money was "going to be used to develop Seaforth ... to purchase and develop it".

194In 2003 Mrs Di Benedetto became concerned about the progress of the development, especially in light of some poor publicity surrounding the appellant. Eventually the appellant gave her a letter guaranteeing the investment amount. Around June or July 2005 Streetwise ceased payments on the mortgage. Mrs Di Benedetto, her husband and the lender litigated. As noted above, in 2006 they visited the Seaforth property and discovered there had been little progress in over three years since they made their investment.

195The appellant pointed to two parts of Mrs Di Benedetto's cross examination. First, she agreed that if the development had proceeded by way of Streetwise funding the development from its own resources, including its own loan facilities, it was her understanding that it could reimburse itself for those costs and for the amounts that she and her husband had contributed. Second, she agreed that in 2004 when she was seeking a personal guarantee from the appellant she did not complain to him that the monies she and her husband had contributed should have been placed into a special purpose account and repaid because no building works had been on the site. In re-examination, the Crown clarified with Mrs Di Benedetto that her agreement to Streetwise's right to reimbursement itself was limited to such costs as were incurred that were referable to the joint venture and did not extend to payment of such costs as school fees, cars or other expenses not associated with the Seaforth property.

196Mr Di Benedetto's evidence in chief was not relevantly different from that of his wife. He stated that on the day that the appellant took him and his wife to see the Seaforth property and then returned to Streetwise's office the appellant told him that their contribution of $500,000.00 was "to go for - towards the purchase of the property".

197In cross examination it was put to Mr Di Benedetto and agreed by him that at the meeting in January the appellant had stated: "Would you be interested in doing something different? We have a property at Seaforth that we are developing into two duplexes. You can go into a joint venture with us and another investor". He also agreed that the appellant had told him that the property had already been bought and agreed with the proposition that he and his wife were "purchasing from Streetwise your share of the Seaforth venture. You and your wife's share?".

The appellant's case on count 8

198In his evidence in chief the appellant asserted that he told Mr and Mrs Di Benedetto that:

"... we are developing this project at Seaforth and we can sell them a share them in the project and at that time we were talking $500,000.00 round figure."

199The pie chart that he produced showed Mr and Mrs Di Benedetto having a 16.4% interest in that project. By reference to the Deed of Investment he asserted that Mr and Mr Di Benedetto were "buying a share in the project" and "they were entering into a joint venture to develop the property by buying a share in the project".

200The appellant asserted that the "property investment vehicle", Bentley East, was only to be handed over to Mr and Mrs Di Benedetto at the completion of the joint venture but that prior to then "we owned the company, we were in control of the company and we could decide when we hand the company over to them". He stated that their contribution was their "buying price". He was asked:

"Q. When you say that was their buying price or cost of the share, what was your understanding at the time as to what you could do with that money?"

He answered as follows:

"A. Well since we were selling a share in the project we treated that money as income. It was income to us and we could use that money for development costs, construction, working capital, any company expenses that we saw fit."

201In cross examination he agreed that the Deed did not suggest that Bentley East would only be handed over at the completion of the project. He denied that he told Mr and Mrs Di Benedetto that the "property investment vehicle" would receive their funds and apply them to the joint venture. He denied the various statements attributed to him by Mrs Di Benedetto when she was seeking information concerning the progress of the development.

Consideration

202Mrs Di Benedetto gave very clear evidence as to the statements made by the appellant as to how the funds were to be applied. The statements were entirely consistent with both the terms of the "Deed of Investment Joint Venture" and any common sense understanding of a joint venture development in which capital was being raised by one of the parties. The discussion at [162] to [164] is equally applicable to the "concessions" of Mrs Di Benedetto as to Streetwise reimbursing its costs incurred in pursuing the development. Leaving aside the tendency evidence of other investors and even taking into account his character evidence, I am satisfied that it was open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt on count 8.

Count 9 - Mr and Mrs Hardy

203Count 9 of the indictment charged the appellant as follows:

"Between about February 2003 and 19 November 2003, by a deception, [he] did dishonestly obtain from Mitchell and Tricia Hardy a financial advantage for Airilie Pty Ltd, namely, funds of approximately $494,225.00 in that he did represent that the funds provided by Mitchell and Tricia Hardy would be applied to a joint venture between them and Streetwise Property and Projects Pty Limited to develop a particular properties at Sanctuary Lakes and Kellyville, which had already been purchased, through an incorporated company in which they would be shareholders, which representation was misleading and deceptive because the funds were not to be applied for the specific purposes of any such joint venture."

204Mr Rowland's analysis demonstrated that out of the proceeds of a mortgage of $500,000.00 taken out by Mr and Mrs Hardy on their home, $494,225.00 was deposited into an account in the name of Airilie Pty Ltd (a Streetwise company, sometimes spelt "Airlie") on or about 12 May 2003. On 26 June 2003 the balance of a mortgage taken out by Mr and Mrs De Silva, the investors the subject of count 11, was also deposited into Airilie's account. Between May and November 2003 the combined proceeds of their contributions were distributed out of this account and into accounts in the name of Colosseum Holdings, Cherrington (Asia Pacific) Pty Ltd and Streetwise. Mr Rowland traced what became of those funds. In summary, little if any of those funds was utilised to develop either of the properties as Mr and Mrs Hardy and Mr and Mrs De Silva understood they would be.

Mr and Mrs Hardy's evidence

205In 2003 Mr Hardy was approached at Hornsby shopping centre by representatives of Streetwise promoting investments in property. This approach led to them having two meetings at his home with a representative of Streetwise. He and his wife owned their home free of any mortgage. The representative provided him with a project feasibility document for what was described as "property trust" for him and his wife concerning the development of properties at Kellyville and Sanctuary Lakes.

206On 18 March 2003, Mr and Mrs Hardy attended a meeting with representatives of Streetwise, including the appellant. The appellant introduced himself as the managing director of the company. He explained that Streetwise was involved in property development, and that it built "houses on already acquired sites for the purposes of investments and profit on investments". He said that Streetwise had acquired sites in Sanctuary Lakes and Kellyville Ridge. He encouraged them to "come on board where we will be allocated sites in each of those two areas". Mr Hardy said the appellant described the investment as follows:

"We would put a sum of money into a joint venture. A company would be created where we'd be sole shareholders of the company and our money would be put towards the building of those properties, and on completion of the building, then they'd be sold to prospective buyers that he said that he had already lined up for various properties he had acquired." (emphasis added)

207The appellant advised them that the amount that they were required to invest was $500,000.00. Mr Hardy said he was "shocked" by the amount required and that he and his wife offered to invest a smaller amount of $200,000.00. He recalled the appellant reaffirmed that it had to be $500,000.00, but indicated that Streetwise had sources of finance which could provide that loan. They signed a loan application at that meeting.

208At this meeting on 18 March 2003, Mr and Mrs Hardy were presented with a joint venture document which they signed. It was in similar form to the one used by Mr and Mrs Fassos and Mr Falzon. Under the heading "Framework" it referred to their investment vehicle being "either a Property Trust or a Limited Liability Company" which was to be incorporated with the "Stakeholder(s) being Mr & Mrs Hardy or as determined by Mr & Mrs Hardy".

209In relation to this part of the deed, Mr Hardy said that the appellant stated:

"... the investment vehicle would be a company by the name of Airlie Pty Ltd and that would be the joint venture company, and that myself and wife would be the sole stakeholders of that company and that he would be the acting director."

210Mr Hardy said the appellant referred to the $500,000.00 noted in the joint venture document and said that: "... the $500,000.00 was to be put towards ... the buildings on the two properties that he had acquired at Sanctuary Lakes and Kellyville Ridge".

211As I have stated, the loan was drawn down on 12 May 2003. On 26 June 2003, Mr and Mrs Hardy received a letter from Streetwise advising that Airlie would pay the monthly interest payments on the loan less $500.00 per month. Mr and Mrs Hardy paid the balance. The letter also advised that land had been purchased for and on behalf of Airlie at Sanctuary Lakes and Kellyville and that Streetwise would begin developing those properties for the purposes of resale. The letter promised to notify them at the stages of Council approval, completion of building works, completion of respective projects and sale.

212On 21 October 2003, they received a further letter advising that Streetwise was negotiating with builders in relation to the Kellyville site and that the "Sanctuary Lakes development is also progressing".

213On 31 May 2004, the appellant wrote to Mr and Mrs Hardy advising them that Council approval for construction of the Kellyville property had been received and that plans for the Sanctuary Lakes project were in the "final stages of preparation", with building permits being sought. No further written updates were received on the progress of the investments.

214In July 2004, Mr and Mrs Hardy refinanced their loan through the Commonwealth Bank. In March 2005, they had a meeting with the appellant at their home, who told them that the Sanctuary Lakes project would not be developed, and that they would have to wait until July 2005 until the property at Kellyville would be sold. Despite efforts to contact Streetwise and the appellant, they heard nothing further after that meeting.

215Eventually Streetwise went into administration and they were left to service their loan of $500,000.00. They had to sell their family home to meet their obligations. Mr Hardy undertook a company search on Airlie. He discovered it had changed its name to Colosseum Property and Developments Pty Ltd. Neither he nor his wife were listed as directors or shareholders.

216In cross examination Mr Hardy did not accept that the appellant told him that he would be "purchasing" a certain percentage of the project. He maintained that he was told that he would "share in a certain percentage of the proceeds". The appellant referred the Court to a part of Mr Hardy's cross examination in which Mr Hardy agreed that a Streetwise representative (not the appellant) said to him, in relation to construction costs, etc, "Streetwise takes cares of all that". This answer was clearly a reference to Streetwise's responsibility in administering the joint venture. In re-examination Mr Hardy confirmed that it was his understanding that the $500,000.00 that he and his wife were contributing would be provided to Airlie. Otherwise, it was not suggested to Mr Hardy that any of the statements that he attributed to the appellant that I have referred to at [206] to [210] above were not said.

217Mrs Hardy's evidence in chief was consistent with that of her husband. She recalled the appellant telling her and her husband at the meeting when they decided to invest their $500,000.00 that "would be spent on the buildings, on the particular - on the land". She also stated:

"Okay. [The appellant] said that the limited liability company called Airlie was the vehicle where the, when the loan was drawn down the $500,000 would go into that particular company and then the funds would be withdrawn from there for the buildings.

Q. For the building?

A. Yeah, for the construction of the buildings on Sanctuary Lakes and Kellyville Ridge"

218None of the statements that she attributed to the appellant were taken up with her in cross examination.

The appellant's case on count 9

219In his evidence in chief the appellant did not address any of the statements attributed to him by Mr and Mrs Hardy. Instead he asserted that Streetwise had bundled four properties (the property at Kellyville and three properties at Sanctuary Lakes) to form one project and that he had effectively sold Mr and Mrs Hardy and Mr Tavaras and Ms Rowe a percentage share of that project (23.7% and 16.8% respectively). He stated that it was proposed to develop the Kellyville property first and once it had a buyer they would proceed with the development of the Sanctuary Lakes properties. This assertion was inconsistent with the appellant's letter of 31 May 2004 (see [213]).

220In cross examination the appellant denied that he had made any statement to Mr and Mrs Hardy to suggest that their contribution of $500,000.00 would be given to Airlie and then used for building the properties. He denied that he nominated Airlie as the property investment vehicle. As with Mr and Mrs Di Benedetto, he indicated that he only referred to a shelf company in which they would obtain an interest when the project was completed. He agreed that the Deed did not suggest that they would only acquire an interest in the property investment vehicle after construction of the project. He agreed that assertion was inconsistent with the letter from Streetwise of 26 June 2003 which referred to them as the "sole stakeholders" of Airlie.

Consideration

221The Crown case on this count was very strong. Mr and Mr Hardy's evidence in chief was completely consistent with the documentary material that emanated from Streetwise. Both sources of evidence pointed overwhelmingly to the suggestion that the money they invested was to be applied for the purposes of the joint venture. No real attempt was made to challenge their evidence. The appellant's assertion that they in effect handed over money with no strings attached was implausible. His assertion that the "property investment vehicle" was only to be handed over at the completion of the development was inconsistent with the Deed and correspondence from Streetwise. The clear import of that material was that it was the vehicle that would pursue that development and it would use their funds to do so. Leaving aside the tendency evidence of other investors and even taking into account his character evidence, I am satisfied that it was open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt on count 9.

Count 11 - De Silva

222Count 11 charged the appellant as follows, namely that:

"Between about April 2003 and 19 November 2003, by a deception [he] did dishonestly obtain from Laknath and Jane De Silva a financial advantage for Airilie Pty Ltd, namely, funds of approximately $397,438.67, in that he did represent that the funds provided by Laknath and Jane De Silva would be applied to a joint venture between them and Streetwise Developments Pty Limited to purchase and develop a particular property at Punchbowl, which representation was misleading and deceptive because the funds were not to be applied for the specific purposes of any such joint venture."

223I have already summarised the evidence of Mr Rowland concerning the use that was made of the monies that were raised by Mr and Mrs De Silva from a mortgage over their home (see [204]).

Mr and Mrs De Silva's evidence

224Mr De Silva stated that at some time in April 2003 he and his wife received a visit from a Streetwise representative at their home. They owned their home. It was subject to a mortgage with a balance owing of $150,000.00. Following that meeting they attended a meeting at the offices of Streetwise in Clarence Street on 24 April 2003. The appellant and two other persons from Streetwise attended. Mr De Silva recalled the appellant explaining the approach that others had taken to investing in Streetwise, including some prominent cricketing identities. He suggested they invest $500,000.00. This became $400,000.00 after allowance was made for what they could borrow and what was necessary to discharge their existing mortgage. Mr De Silva was asked:

"Q. And what was the investment with Streetwise, what was the $400,000 going to do?

A. According to [the appellant] he explained to us he will invest that for property development, a housing project and that was for investment. And after two years we will get our return of $77,000 or something."

At that meeting Mr and Mrs De Silva agreed to make an investment and they completed a loan application form.

225Sometime in April or May 2003 the appellant came to Mr and Mrs De Silva's home. He presented them with a disbursement authority for the loan that was being arranged. Mr De Silva was asked:

"Q. ... Did he say anything to you about what the money - what use the money was going to be made of?

A. Yes he said is going to give us sorry not giving us, he is going to put up townhouses in Punchbowl. I can't remember the street name. I think Broadway or something. So this money will be invested on that housing project, and once they sell the townhouses, then we will be paid our profit share plus the capital."

Mr De Silva recalled the appellant specifying a two year time frame in which they would receive their money.

226As noted above, monies were drawn down from that loan against the security for the house on 26 June 2003. Around that time, they executed a "Deed of Investment Joint Venture". This Deed was in a form similar to that used for Mr Falzon and Mr and Mrs Fassos. The section headed "Background" recited their wish to enter into a joint venture with Streetwise to "acquire & develop residential property". The section headed "Framework" identified the properties for development as an address in Punchbowl; the fact they were raising capital from a mortgage; and that they would "share on a pro-rata basis of the profit or loss of the respective development". There was recorded an understanding that their capital was locked in for a minimum period of twenty-four months and an agreement to appoint Streetwise as project managers and co-ordinators of the development.

227The section of the Deed headed "Agreement" recorded amounts payable for fees and that the unnamed "property development vehicle" would service the interest on their capital less $500.00 per month.

228In November 2003 Mr and Mrs De Silva received a letter from Streetwise stating that it enclosed "details of the proposed joint venture for your perusal". It attached a one page "project feasibility" for the construction of ten townhouses at Punchbowl and some plans.

229In January 2005 Mr and Mrs De Silva commenced sending emails to the appellant seeking confirmation that at least a portion of their capital would be repaid in June 2005. They received no reply. They eventually secured a meeting with the appellant in April 2005 at which he made a commitment to repay some amounts. After receiving one payment of $10,000.00, they received no further communication from the appellant. By the middle of 2005 Streetwise's contributions to their interest payments stopped. They were left to service the loan. Around this time they visited the site at Punchbowl and discovered that no development work had been undertaken.

230The only aspect of Mr De Silva's cross examination that the Court was referred to was a portion in which it was suggested to him that he understood that he was "purchasing a certain share of the profits". He replied that "what I understood was that once the properties sold, the profit is shared according to our invested amount".

231Mrs De Silva's evidence was generally consistent with that of her husband. At the meeting she attended with the appellant in April 2003. Ms De Silva recalled:

"What he said was he's going to buy land in good areas and build houses. That he will sell these houses and pay our loan of $400,000 and we will get a profit of at least $70,000 within two years."

232The only part of her cross examination that the Court was referred to was a passage in which she agreed that there was no conversation about which Streetwise company their money would be transferred into. This takes this matter nowhere. It does not address her understanding that the money would be used to buy land and build houses.

The appellant's case on count 11

233In his evidence in chief the appellant did not address the statements attributed to him by Mr and Mrs De Silva. He asserted that he told them "I can sell you a share in this project for $500,000.00". In cross examination he denied the statement attributed to him by Mr De Silva, namely, that he told them that their money was to be applied to building townhouses in Punchbowl. The appellant was taken to the terms of the joint venture deed. He denied that it contemplated the creation of a property development vehicle into which Mr and Mrs De Silva's capital would be contributed and applied towards the joint venture.

Consideration

234The observations I have made above in relation to counts 8 (Mr and Mrs Di Benedetto) and 9 (Mr and Mrs Hardy) apply with equal force to the evidence concerning this count. The statement Mr De Silva attributes to the appellant that I have extracted in [224] to [225] were more than sufficient to establish the representation pleaded in count 8. This evidence was not challenged at all in Mr (and Mrs) De Silva's cross examination and the appellant's denial of the conversation was only extracted from him in cross examination. Mr and Mrs De Silva's evidence was completely consistent with the documentary material and common sense. Leaving aside the tendency evidence of other investors and even taking into account his character evidence, I am satisfied that it was open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt on count 11.

Count 12 - Barnes

235Count 12 charged the appellant with the following:

"In about June 2003, by a deception, [he] did dishonestly obtain from Katya and Grant Barnes a financial advantage for Colosseum Investment Holdings Pty Limited, namely, funds of approximately $160,000.00 in that he did represent that the funds provided by Grant and Katya Barnes would be applied towards the purchase of two particular properties at Shell Cove and Sanctuary Lakes which had been purchased by Streetwise Property and Projects Pty Limited and which would be developed by them within 12 months, which representation was misleading and deceptive because the properties were not at that time owned by Streetwise and the funds were not to be so applied."

236In circumstances which I will describe, on or about 24 June 2003 Mr and Mrs Barnes refinanced their existing mortgage of almost $500,000.00 of which $160,000.00 was "invested" with Streetwise. Mr Rowlands explained that this amount was placed into the overdraft account of Colosseum Investments. Mr Rowlands' analysis reveals that at least part of those funds, along with other funds in that account, were transferred to one of the appellant's overseas companies, used to make various employee payments; and put towards the purchase of the Seaforth property. Mr and Mrs Barnes did not invest in the Seaforth property.

Mrs Barnes' evidence

237Mrs Barnes gave evidence that in early 2003 she contacted Streetwise and spoke to the appellant about pursuing an investment. On 24 March 2003 she and her husband attended a meeting with the appellant and other employees of Streetwise at its offices in Clarence Street. The appellant stated that he was a property developer and that he could develop a "home and land package" for her and her husband. He offered to sell them two blocks of land that Streetwise would develop by building a house on each one. They were told that after the properties had been built Streetwise would provide a tenant with their rent guaranteed for a year.

238Mr and Mrs Barnes attended a further appointment on 11 April 2003. They were shown two blocks of land at Shell Cove. They then flew to Melbourne. They were shown a development site at Sanctuary Lakes. They returned to Sydney and went straight to Streetwise's offices at Clarence Street where they spoke to the appellant. The appellant told them that they could have an option to purchase on each property exercisable by paying a deposit of $80,000.00, and that Streetwise would assist them in refinancing their home and paying their deposit.

239On that day they executed two option agreements as did the appellant on behalf of Streetwise. Each of the option agreements recited that Streetwise was the registered proprietor of a property in Shell Cove and Sanctuary Lakes respectively. They provided for the payment by Mr and Mrs Barnes of an option fee of $2,000.00 which is recorded as being received. The agreements provided that if they paid the balance of the option fee which in one case was $87,600.00 and in the other was $77,800.00, then the option fee would form part of the deposit payable under the "contract". The agreements provided that, upon such exercise the grantor, i.e. Streetwise, would be bound to sell and they would be bound to purchase the property on the terms set out in the contract. The "contract" was defined as being the "attached agreement for sale of land", although no agreement was attached to either option agreement. They were provided with some house plans and a description of the inclusions that were part of the house that was to be built.

240Mrs Barnes also stated that she discussed with the appellant her concern about paying the balance of the option fees without having a contract for sale of land drawn up. The appellant said that if the monies were paid over they would be paid into an "interest bearing trust account".

241On or around 24 June 2003, Mr and Mrs Barnes' finance application had been approved and the balance of the option fees was due to be paid. Mrs Barnes stated that she advised the appellant that she was not prepared to sign the disbursement authority for those funds as they had not received any plans or specifications for the property or any contract. On 24 June 2003, a letter dated 23 June 2003 from the appellant was faxed to them advising that the specifications for the properties were being finalised and stating, inter alia, that "you are forwarding Streetwise Property & Projects the amount of $160,000.00 to secure the respective properties" and advising that the appellant personally guaranteed the repayment of the $160,000.00 with interest "should you not be happy with our product at completion".

242In Easter 2004 Mr and Mrs Barnes drove to Shell Cove and inspected the sites they had seen previously. They noted there was no development occurring. This led to an e-mail exchange with the appellant. They sought confirmation that their deposits had been paid into an interest bearing trust account. On 16 April 2004 they received a letter from Streetwise denying that they had made any assurance about depositing the money in an interest bearing trust account but advising that Streetwise had entered into fixed price contracts for the construction and development of the two properties. Streetwise offered to pay the monthly interest on the deposit.

243By 30 August 2004, Mr Barnes had discovered that Streetwise was not the registered proprietor of the land at the time the option agreement was signed. He sent an e-mail to the appellant complaining that they had only become the registered proprietors in January and March of that year, and seeking a refund of their deposit plus interest and costs. The appellant attended at their home and persuaded them to agree to buy the land on condition that they pursued the development of the houses on each block.

244On 23 November 2004, Mrs Barnes sent an e-mail to the appellant complaining that this proposal had not been developed. From this point the transaction went the way of the joint venture agreements the subject of other investor accounts. They heard nothing from Streetwise. Streetwise ceased making the interest payments on the deposit. They did not receive any money back. In the end result, they provided $160,000.00. Under the option agreements, it was meant to convert into the deposit under a contract for the sale of land. However, they did not exchange on any contract. The $160,000.00 was dissipated by Streetwise.

245In cross examination it was suggested to Mrs Barnes that the appellant did not agree to place the deposit monies into an interest bearing trust account. She was pressed on why she did not pursue the issue when the letter from Streetwise in April 2004 confirmed that it had not put the money into an interest bearing account. She said that the appellant's personal guarantee had operated as a "pacifier".

246Mr Barnes was not called to give evidence by the Crown. No complaint was made to the trial judge or to this Court concerning this. It is unnecessary to consider it further.

The appellant's case on count 12

247In his evidence in chief the appellant briefly addressed the transaction concerning Mr and Mrs Barnes. He denied that he stated that the monies were going to be placed into a trust account. He asserted that he told them that the monies instead were going to be paying "an option fee". In cross examination the appellant was referred to the option agreements that he had signed. He agreed that, as at the date of those option agreements, Streetwise was not the registered proprietor of the land although he asserted that it was held by a trustee for Streetwise. He agreed that he did not tell them that those properties were held on trust for a Streetwise company. He denied that Mrs Barnes had sought that the monies be retained in an interest bearing trust account because there was no contract for the purchase of the block or any other documentation concerning the contract for the purchase of land. He agreed that they were never provided with any contracts for sale and agreed that he did not tell them that their monies had been deposited into Colosseum's overdraft account.

Consideration

248The transaction that Mr and Mrs Barnes entered into was in some respects different to that the subject of the other "investor counts". They sought to enter into a straightforward "house and land package" with Streetwise. The transaction envisaged by the Option Agreement was one whereby, at the time they provided the full option fee, the parties would become bound by a contract for sale for the property with the option fee being the deposit. In the ordinary course completion would occur when Streetwise had finished the development on the properties but, at least in the meantime, Mr and Mrs Barnes would have some security from the fact that they had exchanged on a contract for sale. Instead what occurred was that the deposits were paid over but no contract for sale came into existence. For that reason Mrs Barnes sought an assurance from the appellant that the monies would be placed into an interest bearing trust account. Given the context of the transaction her request makes complete sense. She sought to have the deposits secured pending the exchange of contracts for sale.

249Two misleading representations were pleaded by count 12, namely that the Streetwise was the registered proprietor of the land and that the moneys would be "so applied", i.e. they would be applied to the purchase of the properties in question. The first aspect was clearly made out in that the Option Agreements represented that Streetwise was the registered proprietor and it was not. The appellant knew that. The fact that it might have been held on trust for Streetwise was not a mere technicality in a transaction such as this. It meant that Mr and Mrs Barnes did not have any directly enforceable rights under the Option Agreement against the true registered proprietor, even though they had paid over $160,000.00. The extent to which they could have ultimately enforced such rights would depend, inter alia, on the terms of any such trust which are not known.

250The second aspect of count 12 was made out if Mrs Barnes evidence was accepted. The statement she attributed to the appellant that the deposits would be held in an interest bearing account pending exchange (and possibly settlement) amounted to the representation pleaded in count 10 that the monies would be "so applied" towards the purchase of the properties. She sought and obtained an assurance that the monies would be held for that purpose. As I have said her evidence makes complete sense. I have no doubt that it was open to the jury to accept it.

251The appellant's written submissions did not refer the Court to any part of the evidence of Mrs Barnes even though it challenged his conviction on this count. Further the submissions that he made concerning this ground generally that I have summarised above at [107] to [108] have little, if any, relevance to this count. Despite the lack of any submission directed to this count, I have reviewed the evidence concerning this count. Leaving aside the tendency evidence of other investors and even taking into account his character evidence, I am satisfied that it was open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt on count 12.

Conclusion on ground seven

252The above analysis addresses the evidence on each count separately. Based on that material the complaint that the jury's verdict was unsafe and unsatisfactory is not made out in relation to any of the counts. I address the complaint about tendency evidence next. I conclude that his Honour did not err in giving the jury a "tendency direction" in relation to the investor counts, namely, that if they were satisfied beyond reasonable doubt that the appellant acted in the way alleged in one of those counts then they could use that fact (or those facts) in considering whether he committed the other investor counts.

253Considered discretely, the jury's verdicts were not unsafe or unsatisfactory on any of counts 6 to 13. My conclusion on ground 6 regarding the correctness of the tendency direction only reinforces my conclusion on these counts.

254I reject ground seven.

Ground six - Tendency Direction (Counts 5 to 13)

255Ground six of the appeal contends that his Honour erred in giving a tendency direction to the jury in respect of each of the investor counts (5 to 13).

Background

256Prior to the trial the Crown served a tendency notice specifying that the evidence listed in the schedule to the notice would be adduced to prove that the appellant "has or had a tendency (whether because of the person's character or otherwise) to act in a particular way or to have a particular state of mind". The evidence listed in the schedule was that of each of the investors the subject of counts 5 to 13. The tendency in question was not specified.

257The question of whether the material was admissible as tendency evidence was not addressed prior to the trial commencing. Instead the trial proceeded and the Crown called its witnesses, including the investors. As I have noted the appellant gave evidence and was cross examined. At the conclusion of the appellant's evidence and just prior to the Crown Prosecutor's address, she applied to "lead tendency evidence". This was inaccurate in that the evidence had already been led. In substance the Crown Prosecutor was seeking a direction from the trial judge concerning the use the jury could make of evidence concerning the remaining investor counts when considering a particular investor count and that she be allowed to address the jury accordingly. It was accepted that this required satisfaction by the Crown of ss 97 and 101 of the Evidence Act 1995.

258During the course of argument the Crown identified the "tendency" that it submitted was established by the evidence in relation to these counts as being a tendency of the appellant "to make misleading and deceptive representations to potential investors as to the application of their investment funds". Immediately prior to the commencement of the Crown Prosecutor's address, his Honour gave judgment concerning the application. His Honour found that the Crown was entitled to address the jury "on the basis that the tendency evidence it seeks to lead, if they are satisfied to the requisite extent, can be a matter they can take into account on the other counts". In his summing up his Honour identified the tendency contended for by the Crown that I have just referred to. With the investor counts, his Honour directed them that if they were satisfied beyond reasonable doubt that "the accused did the act in this way, for example, in relation to count 5, then [they] may use that fact in considering whether the accused committed the offences in counts 6 to 13".

259As framed, ground six of the notice of the appeal contends that there was a miscarriage of justice as a result of his Honour's directions to the jury in respect of tendency evidence so far as concerns counts 5 to 13 (the investor counts). The appellant's written submissions did not identify any particular features of the direction that were erroneous and no complaint about the content of the direction was made at the trial. In substance the complaint is that a tendency direction should not have been given at all in that it is said that the evidence did not have "significant probative value" within the meaning of s 97(1)(b) of the Evidence Act. The complaint was formulated by Senior Counsel for the appellant during the hearing of the appeal that, "as the conversations that gave rise to the passing of funds were individual and somewhat unique", they were "incapable of identifying enough unifying features to show that there was significant probative value vis-à-vis one to the other".

Tendency evidence

260Sections 97 and 101 relevantly provide:

"97 The tendency rule

(1) Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person's character or otherwise) to act in a particular way, or to have a particular state of mind unless:

(a) the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party's intention to adduce the evidence, and

(b) the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.

(2) Subsection (1) (a) does not apply if:

(a) the evidence is adduced in accordance with any directions made by the court under section 100, or

(b) the evidence is adduced to explain or contradict tendency evidence adduced by another party.

101 Further restrictions on tendency evidence and coincidence evidence adduced by prosecution

(1) This section only applies in a criminal proceeding and so applies in addition to sections 97 and 98. 

(2) Tendency evidence about a defendant, or coincidence evidence about a defendant, that is adduced by the prosecution cannot be used against the defendant unless the probative value of the evidence substantially outweighs any prejudicial effect it may have on the defendant.

(3) This section does not apply to tendency evidence that the prosecution adduces to explain or contradict tendency evidence adduced by the defendant.

(4) This section does not apply to coincidence evidence that the prosecution adduces to explain or contradict coincidence evidence adduced by the defendant."

261At the outset an issue arises as to the standard of review that this Court should apply to his Honour's determination and, in particular, whether this Court should determine this ground on the basis of the principles stated in House v R [1936] HCA 40; 55 CLR 499 or in accordance with those stated in Warren v Coombes [1979] HCA 9; 142 CLR 531. In Dao v R [2011] NSWCCA 63; 278 ALR 765, a five member court considered this issue when hearing an application for leave to appeal under s 5F of the Criminal Appeal Act 1912 from a decision of a trial judge to refuse to sever three counts of an indictment. The trial judge's decision had followed from a ruling that the evidence from each complainant concerning each count would be admissible as tendency evidence on the other counts. All five members of the Court agreed that such a decision was to be reviewed on House v R principles (at [70] per Spigelman CJ; at [81] per Allsop P; at [157] and [171] per Simpson J; at [211] per Kirby J and [212] per Schmidt J). Spigelman CJ left open the position following a conviction based on tendency evidence (at [45]). Allsop P held that the principles in House v R were applicable at the point at which leave was being sought under s 5F (Dao at [81]). However to the extent that appellate review was to be conducted of a determination under s 97(1) of the Evidence Act his Honour held that it was to be conducted in a manner analogous to that discussed in Shrimpton v The Commonwealth [1945] HCA 4; 69 CLR 613 at 620 and Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611 at 651-654 (per Gummow J). Allsop P described this approach as whether the trial "judge approached the question by reference to correct principles and whether it was open for him or her to draw the (limited) evaluative conclusion that was drawn" (Dao at [100]). His Honour stated that "[i]n practice, there is likely to be little difference between this approach and the application of House v R" (Dao at [100]). Simpson J held that determinations under s 97(1) are only reviewable on House v R principles (at [157] and [171]). Kirby J agreed with the comments of Spigelman CJ and Allsop P "concerning the nature of the appeal" (Dao at [211]). Schmidt J agreed with Simpson J's analysis (Dao at [212]).

262Thus at least three members of the Court, Allsop P, Simpson and Schmidt JJ, and it appears a fourth (Kirby J) rejected the proposition that appellant review of a determination under s 97 is to be conducted in accordance with Warren v Coombes principles, even on an appeal after a conviction. In terms of the approach to be adopted nothing in this case turns on the theoretical differences between the formulation of Allsop P based on Shrimpton and the principles stated in House v R. In this case the appellant did not assert that his Honour acted on wrong principle, took into account any irrelevant matter or failed to take into account any relevant matter. The appellant's complaint can only be characterised as a contention that that it was not "open to [his Honour] to draw the ... evaluative conclusion that was drawn" that the tendency evidence had substantial probative value (to use the phraseology of Allsop P) or was in that respect "unreasonable or plainly unjust" (to use the phraseology of House v R [1936] HCA 40; (1936) 55 CLR 499, 504).

263In DSJ v R; NS v R [2012] NSWCCA 9; 259 FLR 262 at [62] a five member Court considered the proper construction of s 98 of the Evidence Act which concerns the tender of coincidence evidence. Their Honours approved four propositions that had been distilled by Simpson J in R v Zhang [2005] NSWCCA 437; 158 A Crim R 504 at [139] concerning coincidence evidence, and reformulated a fifth proposition (at [72] per Whealy J with whom Bathurst CJ at [1], Allsop P at [11], McClellan CJ at CL at [135] and McCallum J at [136] agreed).

264Simpson J's analysis in Zhang was in turn based upon her Honour's earlier analysis in R v Fletcher [2005] NSWCCA 338; 156 A Crim R 308 at [33]-[35] concerning tendency evidence, the relevant part which was as follows:

"[33] It is also useful to articulate the exercises involved in a decision to admit or reject evidence tendered as tendency evidence under s 97(1). Some precision in that analysis, also, is required. It is necessary to bear in mind:-

(i) the actual probative value to be ascribed to a particular piece of evidence is committed to the tribunal of fact (in this case, the jury);

(ii) even where the judge is the tribunal of fact, it is not ordinarily possible finally to determine the actual probative value of any piece of evidence until the evidence in the case is complete. This is explicitly recognised in s 97(1)(b), which envisages that the evaluation of the probative value of the evidence in question is to be made having regard to other evidence "to be adduced", and implicitly by the use of the subjunctive "would not" in s 97(1)(b).

(iii) whether a particular piece of evidence is capable of being ascribed probative value is to be determined by the trial judge; this is to be done by reference to the test prescribed in the definition of "probative value" contained in the Dictionary and involves an assessment of the extent to which that evidence could rationally affect (ie is capable of rationally affecting) the probability of the existence of a fact in issue;

(iv) the task that a trial judge undertakes under s 97(1) involves a two-step process: firstly, the assessment of the extent to which the evidence in question has the capacity rationally to affect the probability of the existence of a fact in issue; and, secondly, (where the judge concludes that the evidence has that capacity) an assessment and prediction of the probative value that the jury might ascribe to the evidence. The evidence is not to be admitted if the judge concludes that the evidence, either alone or in conjunction with other evidence already adduced or to be adduced, would not have significant probative value, ie if the judge concludes that the jury would not regard the evidence as having probative value, and to a significant degree (in the sense explained by Hunt CJ at CL in Lockyer (1996) 89 A Crim R 457). If the determination is that, notwithstanding that the evidence would have probative value, its probative value would not be significant, then the evidence is not admissible. (Emphasis in original)

[34] I have not, to this point, said anything about the identification of the 'fact in issue', the probability of the existence of which is said to be affected by the evidence under consideration. In some cases precise identification of that fact, or those facts, might be critical to the process. In this case, no attention was paid to that identification. It must be assumed that the fact (or facts) in issue to which the evidence was directed was (or were) whether the appellant had, on each or any occasion, conducted himself as alleged by the complainant."

[35] Two things emerge from the above. One is that the s 97(1) exercise is predictive and evaluative, and is not a scientific exercise with a clear or rigid answer, or with only one correct answer - reasonable minds will, on occasions, arrive at different results following the evaluative and predictive exercise. The other is that, where evidence 'to be adduced' is relevant to the exercise, the exercise must be undertaken on the assumption that that evidence will be given substantially as anticipated."

265In DSJ at [72] Whealy JA reformulated the coincidence equivalent of the fourth proposition noted in Fletcher at [33]. Although DSJ concerned coincidence evidence, his Honour's formulation is equally applicable to tendency evidence:

"... if a hypothetical jury would think it unlikely that the evidence were important in relation to the facts in issue then the trial Judge might the more readily conclude that the evidence lacks the capacity required for admissibility. Simpson J's formulation recognises that the trial Judge has no part to play in the evaluation of the actual weight to be given to any of the evidence or to its ultimate assessment. The substance of her Honour's formulation is that the trial Judge is required to take the evidence at its highest, and to determine whether it has the capacity to be of importance or of consequence in establishing the fact in issue. In undertaking that task, the statute also requires, as her Honour recognised, that the evidence may be examined on its own account, or by having regard to other evidence adduced or to be adduced by the tendering party. As I have said, the trial Judge does not make any evaluation of the actual weight of the evidence nor does he or she make any prediction about the weight that will actually be assigned to the evidence by the jury in the trial. As stated in Mundine , what must be assessed is the role that the evidence, if accepted, would play in the resolution of the disputed fact - its capacity to contribute to that resolution." (emphasis added)

266In R v PWD [2010] NSWCCA 209; 205 A Crim R 75 at [79] Beazley JA reviewed the authorities concerning tendency evidence and concluded that "the authorities are clear that for evidence to be admissible under s 97 there does not have to be striking similarities, or even closely similar behaviour". PWD was a Crown appeal from a rejection of tendency evidence. The respondent was charged with a number of indecent assaults upon male teenage students at a boarding school. The Crown did not allege that there were "striking similarities" in his conduct but rather contended that there was "a pattern of behaviour, modus operandi, system or pattern and common threads ... in the respondent's conduct" (PWD at [35]). Her Honour found error on the part of the trial judge at first instance and then concluded that the evidence had significant probative value:

"[87] The evidence sought to be relied upon, if accepted by the jury, would demonstrate that the respondent was a person who was sexually attracted to young male students and acted upon that predilection in various ways and at different times, but in a setting where the students to whom he directed his sexual attentions were boarders, who were homesick, did not fit in with the normal pattern of school life in various ways, for example, by not developing friendships or by having discipline problems, and who were thus vulnerable.

[88] In my opinion, the evidence of the four complainants and the other two tendency witnesses is capable of rationally affecting the assessment of the probability of the respondent having engaged in the conduct alleged and had a sexual interest in doing so. So much was found by the trial judge. That evidence has significant probative value in the determination of the question whether the individual allegations should be accepted. The likelihood that such conduct occurred in relation to the other complainants and tendency witnesses would make it more likely that the respondent acted in the way alleged in respect of each particular complainant. It is evidence which also has significant probative value in rebutting the suggestion that the respondent's relationship with each of the complainants was innocent."

Consideration

267At the point in this case at which his Honour had to determine the issue raised by s 97, all of the evidence the subject of the application had been tendered and the appellant's case had closed. With the exception of count 5, I have described that evidence and the appellant's case when addressing ground seven of the appeal.

268It is necessary to briefly note the evidence concerning count 5. The investors the subject of count 5 were Mr and Mrs Panicker. The form of representation pleaded by count 5 was similar to counts 6 to 11 and 13, namely, a representation that "funds would be applied to a joint venture between them and Streetwise to develop a particular property at Terrey Hills" when the funds "were not to be applied". This representation was said to have been made between 1 November 2001 and 30 April 2002.

269Mrs Panicker gave evidence that in late 2001 she approached the appellant about an investment. She said the appellant showed them a vacant site at Terrey Hills and the appellant suggested they invest in its development. Mr Panicker gave similar evidence. He recalled the appellant referring to the development of the land and saying, inter alia, that "... if he would put the rest of the money in and develop it within a year we would see some good profit out of the venture". The clear implication is that Mr and Mrs Panicker would contribute the initial funds to develop it. This was later confirmed by a one page document entitled "Deed of Investment" that Mr and Mrs Panicker received on 30 April 2002. The document referred to Mr and Mrs Panicker "participat[ing] as an investor in a development project" being undertaken by Streetwise and that they would be "entering into a joint venture" with Streetwise pursuant to which they contributed $300,000.00. Their investment was said to be "limited to this particular project".

270An inconvenient fact for the appellant was that Streetwise never owned the property at Terrey Hills. In his evidence he stated that he advised Mr and Mrs Panicker that their funds would be treated as a loan until such time as the property at Terrey Hills could be acquired and thereafter they could buy a share in the "project". Thus, consistent with his defence on other counts, he claimed that Streetwise was entitled to use their funds as it pleased and he did not make any representations to suggest otherwise.

271Thus by the time his Honour came to rule on the Crown's application, the critical issue common to all of counts 5 to 13 had been distilled to whether the appellant had represented to each of the investors that their funds would be applied in a particular manner. The evidence did not reveal any striking similarities in the statements that he was said to have made. However, accepting the evidence on each count at its highest, there were clearly a number of common features between the counts. Each of the investors approached Streetwise seeking financial assistance or advice. The appellant and Streetwise took on the role of adviser and finance arranger with no suggestion that any investor should obtain legal advice. The finance transaction arranged by Streetwise involved a mortgage over the investor's family home which in each case was their only substantial asset. The form of "investment" offered for counts 5 to 11 and 13 was not relevantly different, being some form of joint venture with Streetwise. With the exceptions of counts 5 (Panicker), 6 (Mr and Mrs Fassos) and 10 (Mr Falzon), each transaction proceeded in a broadly similar manner with there being an initial meeting with a representative of Streetwise before they were introduced to the appellant as managing director who in effect "sealed the deal" and secured their signatures on a document requiring them to contribute finance. With counts 6 and 10 (Mr Fassos and Mr Falzon) there was no initial meeting with a representative of Streetwise as those investors worked for the company, but the balance of those transactions proceeded in the same way as the others. Even in their cases, the appellant's assurances at the time of sign off were critical as they were with count 5.

272Each of these investors were in a position of some vulnerability or dependence vis a vis Streetwise and the appellant. They were placing trust and confidence in Streetwise and the appellant and putting their financial future at risk. They each had an interest in having some assurance that their funds would be utilised in furthering the joint ventures and the appellant had an obvious interest in providing that assurance to access their funds. The evidence of the investor witnesses, if accepted, was capable of establishing that the appellant had a "tendency" or modus operandi of falsely reassuring such investors that their funds would be utilised in building and developing the property the subject of their investment. In my view it was open to his Honour to find that an acceptance by the jury that the appellant told one set of investors that their funds would be applied towards the joint venture was capable of being "of importance or of consequence in establishing the fact in issue" (DSJ at [72]) on one or more of the other counts namely that he provided a similar false assurance to another set of investors pursuing the same or a similar transaction with Streetwise.

273Although no specific submission was directed to these counts, it is necessary to make further mention of count 5 concerning Mr and Mrs Panicker and count 12 concerning Mr and Mrs Barnes.

274With Mr and Mrs Panicker the relevant representation was alleged to have been made between late 2001 to April 2002 whereas all the other counts concerned representations between April and November 2003. This is one matter weighing against its inclusion in the tendency direction that was given, although it does not appear that any invitation to that effect was made to his Honour. Nevertheless in the context of this case, I do not consider that this factor is of such significance that it can be concluded that it was not open to his Honour to conclude that the evidence on this count was capable of having substantial probative value on the other counts and vice versa. The modus operandi of the appellant as described by Mr and Mrs Panicker for their transaction was in all other respects the same as counts 6 to 13. An acceptance of Mr and Mrs Panicker's evidence was capable of being considered as the first manifestation of the appellant's "tendency" to provide false assurances about the use that would be made of funds contributed to joint ventures which later played itself out in 2003 with the other counts. Equally, an acceptance of the evidence on one or more of the other counts was capable of being considered to be "of importance or of consequence in establishing" (DSJ at [72]) that at an earlier time he was spruiking joint ventures in the same way in otherwise identical circumstances.

275As I have explained above, Mr and Mrs Barnes "invested" in what was described a "house and land package". They entered into two option agreements under which it was envisaged that upon exercise by them they would pay the option fees which would become deposits under a contract for sale and development of two properties. In fact the option fees were handed over prior to any exchange and no such exchange took place. The alleged misleading representations were said to be that Streetwise was the owner of the lands and that the option fees would be applied towards the purchase of the property by them. This latter aspect was a reference to an assurance said to have been given by the appellant that the monies would be held in an interest bearing account, which they were not. Even though this representation did not relate to the use of the funds for the purposes of a joint venture, its remaining features were sufficiently similar to the other counts to leave it open to his Honour to conclude that the evidence on this count was capable of being "of importance or of consequence in establishing the fact in issue" on other counts and that the evidence on the other counts had the same character in relation to this count. The tendency alleged by the Crown contemplated the appellant providing misleading assurances to investors concerning the application of their funds so that he and Streetwise could obtain access to those funds.

276Given its apparent factual similarity to this case it is necessary to refer to the decision of the Full Court of the Federal Court (Whitlam, Sackville and Mansfield JJ) in Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886; 106 FCR 51. In Jacara, the Full Court dismissed an appeal from a judgment dismissing a civil claim for damages for misleading and deceptive conduct contrary to former s 52 of the Trade Practices Act 1974 (Cth). The appellant pleaded that a representative of the respondent had induced it to enter into a lease to occupy premises in a shopping centre (Jacara at [14]). At the trial the appellant had sought to read affidavits from other tenants to the effect that the same representative had made misleading representations to them on similar topics to the pleaded representations (Jacara at [26] to [27]). As in this case, there were variations between the deponents as to the particular statements they attributed to the respondent's representative. The trial judge had rejected their evidence (see Jacara at [29] to [34]) and the Full Court upheld that rejection (Jacara at [83]).

277For present purposes two matters should be noted about Jacara. First the Full Court applied House v R principles in reviewing the trial judge's refusal to admit the evidence (Jacara at [75]). Thus one reason for any perceived differences between the outcome in that case and this one are the different determinations by the judges at first instance and a standard of scrutiny on appeal that accommodates different first instance assessments provided they are undertaken in accordance with correct principle and do not lead to unreasonable outcomes.

278Second, critical to the outcome in Jacara was the nature of the facts in issue. The representations pleaded by the appellant in that case were precise (see Jacara [14]) Thus, for example, it was pleaded that the respondent represented that following the redevelopment the number of visitors to the centre would increase "by at least 50%-60%". This precision reflected the particular conversations that the appellant attributed to the respondent's representative. No doubt, the pleaded representations were drafted and the particular conversations were relied upon having regard to reliance, causation and damage issues which were a necessary part of the appellant's case. However, once the appellant in Jacara had set itself the task of demonstrating the making of representations or statements with that level of precision it became that much more difficult for it to demonstrate that the evidence of other lessees had significant probative value given the variances in the versions of the conversations that they deposed to. Hence the trial judge in Jacara emphasised the significance or lack of it of the alleged tendency evidence to establishing the "representations alleged" (at [31]) and the Full Court referred to it not having "significant probative value on the facts and issues" (at [81]), the latter of which are, of course, defined by the pleadings.

279By contrast in this case the representations pleaded in the various counts of the indictment were either identical or very similar. They were not fixed by reference to any precise words or figures said to have been uttered by the appellant, but instead referred to the overall effect of his spruik of the transaction to be entered into by the various investors. As I have said by the time his Honour came to decide this question the issues between the Crown and the appellant had been distilled to whether the appellant had falsely represented to each of the investors that their funds would be only applied to further the joint venture or purchase they were entering into. The evidence of the investor witnesses on one count was clearly capable of being significantly probative of whether the appellant acted in that same way on another count. If, however, the critical fact in issue for each count was whether the appellant had uttered certain specific words, as was the case in Jacara, then a different outcome may have resulted. This analysis does not necessarily advantage the Crown by permitting it to include a count specifying a representation pitched at a very high level of generality. Amongst other matters, the less specific the representation in a particular case, the harder it may be to prove its falsity beyond reasonable doubt.

280The appellant did not contend that there was any error on his Honour's part in being satisfied under s 101(2) that the "probative value of the evidence substantially outweigh[ed] any prejudicial effect" it may have had on the appellant. His Honour noted all tendency evidence has some prejudicial effect. However in this case his Honour also noted that the jury had already heard the evidence and would be directed that before they could use the evidence concerning one count as evidence on another count they would have had to have already concluded that "the tendency matter [had been] established beyond a reasonable doubt". His Honour considered that these matters "serve to reduce the prejudicial effect upon the accused". I see no error in this approach (see Dao at [172] per Simpson J).

281I reject ground 6 of the appeal.

282It follows that I would dismiss the entirety of the appeal against the appellant's conviction on all counts.

Sentence Appeal

283On 24 August 2010, the jury returned guilty verdicts on counts 1 to 13. On 17 December 2010, his Honour sentenced the appellant to terms of imprisonment for each count. The sentencing structure that his Honour adopted was to divide the 13 counts into three groups. Within each group the same sentence was imposed and they were wholly made concurrent with one another. The three groups of sentences were then cumulated.

284On counts 1 to 4 (the finance counts), his Honour sentenced the appellant to fixed terms of imprisonment of two years and six months each to be served concurrently and backdated to commence from 27 March 2009. The appellant had been taken into custody following his conviction on 24 August 2010. However, his Honour backdated the sentences to a time prior to then, representing the time he had spent in custody, both in the United States of America prior to being extradited to Australia and then before being released to bail after he returned.

285In relation to counts 5 to 8 on the indictment (i.e. the investor counts involving Panicker, Fassos, O'Donnell and Di Benedetto), his Honour sentenced the appellant to four concurrent fixed term sentences of two years and six months. This group of sentences was fixed to commence upon the expiry of the sentence for the first group of offences. These sentences commenced on 26 September 2011 and, if not disturbed, will expire on 25 March 2014.

286In relation to counts 9 to 13 (i.e. the investor accounts involving Hardy, Falzon, De Silva, Barnes and Tavares/Rowe), his Honour sentenced the appellant to five concurrent sentences of three years and six months each comprised of a non-parole period of one year and four months and a balance of term of two years and two months. The non-parole periods for this group of sentences were fixed to commence on the expiry of the sentences for counts 5 to 8. Thus, if not disturbed, they will commence on 25 March 2014, and expire on 24 July 2015 and the balance of term for each will expire on 24 September 2017.

287The effect of the sentences was that the appellant was sentenced to an overall period of imprisonment of eight years and six months to date from 27 March 2009, with a minimum period in custody of six years and four months.

The Sentencing Judgment

288I note the following nine points concerning his Honour's sentencing judgment.

289First, His Honour made findings as to the value of the benefits obtained by the appellant's dishonest statements and the financial losses he occasioned.

290In relation to counts 2 to 4, the false statements made by the appellant concerning the state of the accounts were made to obtain credit facilities totalling in excess of $8 million. In relation to count 1, the false statement concerning the financial accounts was made for the purpose of obtaining a continuation of a loan facility from the NAB in the amount of $11 million. With that count, his Honour considered that the measure of loss is "limited to any extensions of the amount of the line of credit". This meant that only "part of the value of the facility of approximately $11 million" was the value of the loss. Accordingly, for counts 1 to 4 his Honour found that the value of the monies fraudulently obtained as the result of the appellant's conduct was "somewhere between $19 and $8 million". Later in the judgment his Honour concluded that the amount obtained was between $8 million and $10 million. Taking into account enforcement action undertaken by the financial institutions, the outstanding amount was just in excess of $4 million.

291In relation to counts 5 to 13, the investor accounts, his Honour found that the amounts received from the investors totalled $3,716,022.10 but this figure had increased to $5,504.576.50 by reason of the various legal fees and other costs incurred in connection with the various civil proceedings that arose of those transactions. Thus, his Honour concluded that the resulting loss was in excess of $5.5 million.

292Second, his Honour summarised the appellant's subjective circumstances as follows. The appellant was born in South Africa. He was the middle child of three. His Honour recorded that he had a "difficult childhood due to the apartheid regime and the racism inherent in that regime", but he had the benefit of caring parents and a supportive relationship with his family. At age seven he sustained a head injury which had affected his behaviour and schooling. He attended some special classes throughout his schooling in South Africa, but was able to complete the equivalent of the HSC in South Africa and achieved average results. After he left school he worked in his father's insurance brokerage company, initially as a clerk, before becoming an insurance salesman in the family business.

293The appellant was married in South Africa in 1988 and emigrated to Sydney with his wife and two young children in 1996. He obtained permanent residency in this country in 2001. He gained employment in the real estate industry before starting his own business in 1997.

294In July 2005, after his company ran into difficulties subsequent to these offences, he and his family received death threats. Fearing for their safety, they moved overseas.

295Third, his Honour described the effect of the appellant's predicament on his family. His wife gave evidence of having received threatening calls, and their children's respective schools raising concerns about their ability to protect them. His Honour accepted her evidence that these events left their children "traumatised, depressed and scared". The appellant's wife and son returned to Australia some time after the appellant's extradition. His Honour noted that they were supportive of their father and were doing the best they could to rebuild their lives. The appellant's daughter had remained in the USA to pursue her education.

296Fourth, the material before his Honour recorded the absence of any significant contrition or acceptance of responsibility for his actions on the part of the appellant. Tendered before his Honour were two probation and parole reports, one prepared in May 2008 soon after his extradition and another prepared in November 2010 while he was awaiting sentence. The first report suggested that the appellant had given consideration to pleading guilty to the offences. It recorded a denial by the appellant of any personal gain or intention to defraud but an acceptance that his actions resulted in the collapse of the Streetwise companies and the subsequent hardship caused to others. The second report recorded an acceptance by the appellant that he was reckless in signing the balance sheets, but noted that he "attributed responsibility to the fact that he employed a young accountant". This report recorded that the appellant took little responsibility for his offending behaviour.

297Fifth, His Honour found that a specific aggravating circumstances of the offences was the substantial injury, emotional harm and loss and damage caused by the offences (s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999 (the "Sentencing Act"). I have already described his Honour's findings in relation to the level of financial loss occasioned. In relation to the investor counts, his Honour found that it was a "severe loss for each and every [victim]". His Honour accepted the Crown's description of the investors as "mum and dad investors" and concluded that there had also been a "significant emotional cost to them" and that "their loss and the subsequent legal battles that they have to go through have exacted an emotional toll on them". This is a significant matter and one to which I will return.

298Sixth, his Honour found that a further aggravating circumstance was that the offences were part of a "planned or organised criminal activity" (s 21A(2)(n)). His Honour characterised the appellant's involvement as follows:

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

299Seventh, his Honour accepted as a mitigating factor (s 21A(3)(f)) that the appellant did not have a previous criminal record and that he was a person of good character. However, his Honour considered that the relevance of good character is of less significance in white collar crimes "since it is that factor which normally places an offender in a position where he or she is able to commit the offence" (R v Rivkin [2004] NSWCCA 7; 59 NSWLR 284 at [410]; R v Williams [2005] NSWSC 310; 152 A Crim R 548 at [61]).

300Eighth, His Honour declined to make any finding that the appellant had good prospects of not re-offending or of rehabilitation (cf s 21A(3)(g) and (h)):

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

301Ninth, his Honour characterised the appellant's conduct as being at the very serious end of the scale for these type of offences.

302In relation to the finance counts (1 to 4), His Honour concluded that the amount of money obtained by the appellant was "... extremely high and marks those four counts as extremely severe in terms of objective gravity".

303In relation to the investor counts (5-13), his Honour found:

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

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

304Not surprisingly, His Honour concluded that both general and specific deterrence were of particular importance in sentencing the appellant.

Ground one - unclear non-parole period

305Ground one complains that his Honour's discretion miscarried in that his Honour failed to "clearly articulate the appropriate non-parole period".

306At the commencement of the sentencing judgment his Honour stated that he proposed to impose a sentence with a combined non-parole period of six years and four months and an overall sentence of eight years and six months. At the conclusion of the sentencing judgment his Honour stated:

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

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

307The allegation of uncertainty in the statement of the combined non-parole period arises from the apparent discrepancy between the figure of "four years and six months" in the first paragraph of this extract, and the figure of "six years and four months" in the second paragraph. In my view there is no substance in this ground. His Honour's reference to "four years and six months" was clearly a slip. This is apparent from the comments at the beginning of the judgment, the clarification at the end of the judgment, and the words which immediately follow the phrase "four years and six months" which specifies that the combined non-parole period commenced on 27 March 2009 and "will first expire on 24 July 2015", being a period of six years and four months. His Honour accidentally transposed the words "four" and "six" in the first paragraph of the above quote. His Honour recognised the slip and immediately fixed it.

308I reject ground one.

Ground two - special circumstances

309Ground two of the application for leave to appeal in respect of the sentence alleges that his Honour erred in failing to expressly consider whether there were "special circumstances" for the purposes of s 44(2) of the Sentencing Act which warranted the imposition of a sentence in which the balance of the term exceeded one-third of the non-parole period.

310The appellant contended that this was warranted by reason of his good character, the support he had from his family, the fact that the original business model he adopted had been successful, that the sentencing structure involved a significant degree of accumulation, and that he had not previously been imprisoned prior to the commission of these offences.

311To address this ground it is first necessary to discuss the overall structure of the sentences imposed by his Honour. Sub-section 44(2) specifies that the balance of term of the sentence "must not exceed" one-third of the non-parole period unless the Court determines that there are special circumstances for that ratio being greater. Although the one-third ratio is expressed as a maximum, it is a figure commonly adopted for individual sentences absent special circumstances being made out.

312Sub-section 44(2) is directed to the sentences imposed for individual offences. However it is also common for sentencing judges dealing with multiple offences to strive to structure their sentences so that the ratio of the effective balance of term to the combined non parole period approximates to the one-third referred to in s 44(2). If an offender was to receive two cumulative sentences, each of which had a non-parole period and balance of term that reflected the statutory ratio, there can be a dramatic reduction in the proportion that the effective balance of term represents to the combined non-parole period. This is illustrated by an example in which an offender is sentenced for two offences, with the sentence for offence A consisting of a three year non-parole period and a one year balance of term, and the same sentence being imposed for offence B with the non-parole period for offence B commencing upon the expiry of the non-parole for offence A. The effect of two such sentences would be that the offender would serve a combined non-parole period of six years and a balance of term of one year. The balance of term for the sentence for offence A would be subsumed into the non-parole period for the sentence for offence B. In this example the combined non-parole period represents over 85% of the total effective sentence and operates to frustrate the sentencing judge's intentions. A common method of avoiding this difficulty is to rely on s 44(2) to reduce the non-parole period that would otherwise be imposed for offence B so as to ensure that the ratio for the balance of term to the combined non-parole period is approximately equal to the maximum statutory ratio for individual sentences, i.e. one-third (see R v Street [2005] NSWCCA 139 at [37] to [39]).

313In this case his Honour adopted that approach. Further, to facilitate a sentence which overall reflected the statutory ratio for individual offences provided for in s 44(2), his Honour imposed fixed terms for the first two sets of offences which were individually concurrent and then cumulative. I will return to consider the significance of fixed term sentences when addressing grounds three and four.

314It follows that ground two of the appeal, as expressed, is misconceived. His Honour implicitly did consider whether there were "special circumstances" for the purposes of s 44(2) of the Sentencing Act to warrant a variation. However, his Honour determined that only a variation to the sentences for the third group of offences was warranted and only to the extent necessary to ensure that the combined non-parole period (40 months) bore a ratio to the overall sentence (54 months) including the balance of term (14 months), that was approximately equal to the statutory ratio for individual sentences (74% and 75% respectively).

315To the extent that the ground of appeal can be taken as a complaint that his Honour did not go further in varying the statutory ratio for some or all of the offences, then it has no substance. No submission was made to his Honour that a variation in the statutory ratio was warranted by reason of any special circumstance pertaining to the appellant. It is conceivable that the fact that an offender had not been previously imprisoned, might warrant a finding of special circumstances in a particular case. However, it does not compel that conclusion in this case. In R v Fidow [2004] NSWCCA 172 at [22], Spigelman CJ stated:

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

316This is illustrated by the approach of the High Court in Muldrock v R [2011] HCA 39; 244 CLR 120 at [58], where the Court considered that the desirability of the applicant in that case undergoing suitable rehabilitative treatment was a special circumstance that justified a departure from the statutory proportion between the non-parole period and the balance of term. In that case, in circumstances where the other factors relevant to sentencing such as general and specific deterrence had diminished significance (Muldrock at [59]), the objective of rehabilitation was served by varying the statutory ratio.

317By contrast in this case, nothing in any of the matters pointed to by the appellant when considered against the relevant objectives of sentencing as specified in s 3A of the Sentencing Act , warranted or required any such variation. In particular, in the absence of any positive finding concerning his prospects of rehabilitation, that objective of the sentencing process did not warrant any such variation.

318I reject ground two.

Ground three - no meaningful allowance for rehabilitation

Ground four - sentences overall manifestly excessive

319Ground three of the appeal alleges that his Honour's discretion miscarried in that he made no meaningful allowance for rehabilitation as said to have been required by s 3A(d) of the Sentencing Act. It is convenient to consider this with ground four which contends that the sentences overall were excessive.

320The appellant's submissions in relation to ground four did not contend that the sentences imposed for any of the individual offences per se were excessive. Instead, the appellant complained of his Honour's approach to accumulation, having regard to the application of the totality principle (Mill v R [1988] HCA 70; 166 CLR 59). That said, it is appropriate to address these grounds within the discipline stated in Pearce v R [1998] HCA 57; 194 CLR 610 at [45], namely by first considering the sentences imposed for the individual offences before considering questions of totality.

321As noted for each of counts 1 to 4 his Honour imposed a fixed term of imprisonment of two years and six months. As I have already explained, his Honour only varied the statutory ratio in s 44(2) to the extent necessary to specify a ratio between the balance of term and the combined non-parole period which reflected the usual ratio of one-third. In Ruttley v R [2010] NSWCCA 118 at [43] Simpson J stated that "[o]rdinarily, where a fixed term is imposed, it equates to what would have been a non-parole period had one been fixed." It follows that the fixed term sentences of two years and six months (thirty months) each equates to overall sentences of three years and four months (forty months) each.

322The same reasoning applies to counts 5 to 8, i.e. those sentences equate to an overall sentence for each offence of forty months. This analysis is consistent with the forty-two month total sentence his Honour imposed for each of counts 9 to 13, as there was little reason to differentiate between the criminality involved in any of counts 5 to 13. The two month discrepancy between the effective sentence imposed for each of counts 5 to 8 (forty months) compared with those imposed for each of counts 9 to 13 (forty-two months) is of no moment.

323The maximum penalty for each of these offences was five years. In relation to counts 1 to 4, his Honour found that the appellant's criminality was "extremely severe". The monetary amounts involved in each offence were very large. The appellant was the directing mind of the Streetwise group and orchestrated the preparation of misleading accounts. His subjective case was very weak. To the extent that there was a finding of good character, the authorities in relation to white collar crime diminished the significance that is attached to it. There was no evidence of contrition and no finding that he had any positive prospects of rehabilitation. The only matter that operated in his favour was the suffering that had been imposed upon his family. This was in significant part a result of his own conduct. The authorities suggest that such suffering has little weight unless the circumstances are exceptional (R v Edwards (1996) 90 A Crim R 510). No submission to that effect was made before his Honour or before this Court, nor would it be well founded.

324In these circumstances an effective sentence which represented two-thirds of the maximum penalty for each of counts 1 to 4 was, in my view, not outside the range.

325In relation to each of counts 5 to 13, the analysis does not differ. It is true that the amounts involved were less than the sums the subject of counts 1 to 4. However, any such difference was more than balanced, and indeed exceeded, by the limited capacity those victims had to bear such losses and the emotional toll the appellant's outright lies caused them. They were people of modest means. Their only substantial asset was their house. The financial and emotional hardship imposed upon all of them by the appellant's calculated lies will affect them and their families for many years to come. The appellant engaged in this conduct on a systematic basis over a number of years. He showed callous indifference to the likely harm that would be caused to people who were placing significant trust and confidence in him. Given the very high criminality involved and his weak subjective case, the individual sentences imposed for each offence were, in my view, not excessive.

326As noted, ground three complains that his Honour made "no meaningful allowance for rehabilitation". I have already described the finding that his Honour made in relation to the appellant's prospects of rehabilitation above. Given the underwhelming nature of that finding, I can discern no error in the approach that his Honour took.

327The remaining complaint concerns the approach his Honour took to accumulation in light of the totality principle. In the sentencing judgment his Honour stated:

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

328Clearly his Honour did take into account the totality principle. Thus the true complaint is the manner of its application. The appellant complains that, contrary to what his Honour stated, there was, in effect, "total accumulation and not partial cumulation in respect of any of the sentences that apply to the three groups". This may be so, but it ignores the otherwise generous approach his Honour adopted towards the appellant of providing for complete concurrency of the sentences within the three groups. In my view had his Honour made the three groups of sentence wholly concurrent but only made provision for partial accumulation between the groups then the outcome would not have fully reflected the totality of the appellant's conduct.

329There was no doubt an element of pragmatism in the approach that his Honour adopted. It would have been open to his Honour to only partially accumulate the sentences within the three groups, but if that course was embarked upon, then the otherwise generous approach of allowing complete concurrency of the sentences within the groups would have to have been reconsidered. A more doctrinaire approach would have involved a series of partial accumulations of all thirteen counts. The adoption of that approach would have led to an overall sentence being imposed upon the appellant which was much greater than the one which he received and which would not otherwise be erroneous.

330In any event, our task is to discern error and, apart from one matter, I see no error in his Honour's approach. The only error is the statement in the passage set out above at [327] that the second group of offences comprising counts 5 to 8 occurred between February and May 2003. That statement is correct for counts 6 to 8. However count 5 occurred between November 2001 and April 2002. In view of that, it is difficult to see how the sentence for that offence could have been made concurrent with the sentence for counts 6 to 8. Not surprisingly, this is not an error which the appellant complains of. It is certainly not a matter that warrants any interference with the sentences his Honour imposed in a manner favourable to the appellant.

331I reject grounds three and four.

Orders

332Accordingly, the orders I propose are:

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

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

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

**********

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Last updated 1 November 2011