(b) The evidence
1140In her evidence Ms Skoulos said she first met the appellant at the end of 1999. She said she asked him to do her tax return and look after all the expenses that she had.
1141Ms Skoulos said that when she met the appellant she had a business. She described it as a picture framing business which operated from premises at Marion Street, Bankstown. She stated that she did not have income from any other source when she met the appellant.
1142She stated that prior to operating the picture framing business she was operating a takeaway shop, Tasty Cravings, from the same premises. She said this business operated from late 1998 until Christmas 1999. She said she then closed it down and in the new year she started Décore.
1143She said that very little money was made from Tasty Cravings, about $300 per week. She said she earned very little money from Décore, perhaps even less than from Tasty Cravings. It may be Ms Skoulos was mistaken as to when she changed from the Tasty Cravings business to Décore. This is because she stated she closed Décore at the beginning of 2000 and that she carried on the business of Tasty Cravings in 1998 and Décore in 1999.
1144Ms Skoulos said she owned the property at Marion Street with her brother. She carried on her business at that property. She stated she never asked the appellant to lend her any money in respect of the businesses but in 2000 she asked the appellant to assist her in obtaining two loans, one for $250,000 to pay out her brother's interest in the Bankstown property and the other in respect of her home for $350,000. She said these were arranged through St George Bank. She said the appellant was going to charge her around $18,000 which she paid him. She said the appellant wrote the cheque out of her chequebook and she signed it. She said the money was withdrawn from her account. Ms Skoulos said that the appellant told her that she would get the $18,000 back from a tax refund. She stated that she got the money back around the end of 2002.
1145On being shown the tax return lodged she denied any knowledge of the Canley Vale PO Box, or of Mr Lopez, Mr Campos or Mr Filocamo. She said she thought that the appellant was preparing the tax returns.
1146Ms Skoulos denied she was employed by One Shop. She stated that she did not earn $38,000 from any source in 1997 or 1998 and she did not tell the appellant that she earned anything like that. She stated in the years 1997 to 1998 she was only working two days a week and was in receipt of a single parent pension. She said she earned about $300 from work and about $200 a fortnight from her pension. She said in the first part of 1997 she was working as a shop assistant at Bankstown. She was not aware if anyone was paying tax on her behalf during that time.
1147Ms Skoulos denied any knowledge of tax deductions for the 1998 year in an amount a little over $17,900. She claimed the appellant never showed her a tax return disclosing income from One Shop in an amount of $38,000.
1148Ms Skoulos also said she knew nothing of a business loss of $36,425. She said she never incurred such a loss.
1149Ms Skoulos was shown the notice of assessment for the 1998 year showing a credit amount of $17,928.62. She said the number was familiar but the date did not match. She said the appellant gave her this amount of money but she believed it was given to her in 2002. She said she did not receive this amount in the year 2000.
1150Ms Skoulos was shown the replacement group certificate relating to her purported employment with One Shop during the year ended 30 June 1998. She denied again that she worked for One Shop at an address at Harris Street, Pyrmont. She said the handwriting on the document was not hers and during the period of employment shown on the document, 5 August 1997 to 30 June 1998, the only employment she had was with a sandwich shop. She denied she signed the replacement group certificate.
1151On being shown the loss for that year said to have been incurred from the carrying on of the business Tasty Cravings, Ms Skoulos said that Tasty Cravings was opened in October or November 1998. She stated she had no business by that name in late 1997 or early 1998. She said that she had no business during the financial year ended 30 June 1998 and that she did not tell the appellant that she had. She denied that she had any business which obtained the income or incurred any of the expenses claimed. In particular, she denied that any business which she conducted at Marion Street paid rent as she owned the building. She stated that in fact she purchased the Marion Street building with her brother and they carried on the business together. Ms Skoulos denied the appellant told her he had received a refund notice stating she had a credit for $17,900. She accepted that it was her signature on the notice of appointment of tax agent which, as the summary disclosed, was in the appellant's possession.
1152Ms Skoulos was shown the tax return for the year ended 30 June 1999, the subject of Count 47. She stated during that time she carried on the business Décore. She again denied that the appellant ever told her that somebody else would be preparing her tax return and in particular that any of Mr Campos, Mr Lopez, Mr Gonzalez or Mr Filocamo would be involved. She denied that she was employed by One Shop or earned any income from that company. She claimed she was paying tax in relation to Décore but said she paid nothing like $32,000. She said it was significantly less.
1153She denied that Décore incurred a loss of $70,665 as shown on the 1999 return.
1154She was then shown part of what appeared to be a 1999 STAC return form which showed business income from a business of picture framing of $114,170 with total expenses of $74,751. She recalled that Bankstown Décore Picture Framing was the name under which she carried on the picture framing business, but she said that she was not involved in picture framing until after 30 June 1999. However, she denied deriving total business income of $114,000 from any source in the year ended 30 June 1999. In relation to the expenses shown on that document she denied that she incurred rental payments of $22,000 or that she ever told the appellant that she had made such payments.
1155As with the return for the year ended 30 June 1998, she denied knowledge of the replacement group certificate and repeated that One Shop did not employ her. She stated she was never told that she had an entitlement to a refund for that year in an amount of $32,000 or that the appellant had received a total refund for the 1998/1999 tax years of $49,958. She stated that she did not authorise the appellant to keep a cheque in that amount.
1156She was shown the authority to deposit form but denied that it was her signature on the document. She said that she knew nothing about the figure of $50,397.71, being the amount the subject of the authority.
1157Ms Skoulos acknowledged that she signed the electronic lodgement declaration for the 1999 income tax year. She stated it was one of the documents the appellant asked her to sign for her tax. She also acknowledged that she signed the declaration for the 1998 year. She was referred to the fact that the portion under the heading "Income: Salary & Wages" was completely blank. She stated that the appellant usually said "I'll fill it in later because I am busy" and she believed he made that comment in relation to that document.
1158Ms Skoulos gave further evidence concerning the 1998 tax return. She was shown a handwritten document headed "Personal details". She denied that she ever gave the appellant the details recorded in the form. Although she stated she knew nothing about what appeared at the foot of the page "Distribution from unit trust Skoulos Family Trust", she said that when her husband died there was a family trust from which she received money from time to time and the figures of $2,996 and $1,004 for the 1999 and 1998 years respectively, seemed correct.
1159Ms Skoulos was taken to a profit and loss statement for Tasty Cravings for the period December 1997 to June 1998. This was one of the documents in the possession of the appellant. She denied the rental expenses on the document were correct and said she knew nothing about the document.
1160Ms Skoulos was then asked about a further tax return for the year ended 30 June 1999 showing a taxable income of $61,856, comprising income of $71,713 from a business less a loss on rental property of $9,857. This was one of the returns found in the possession of the appellant. She acknowledged that she signed that document and dated it 7 September 1999. She was referred to the fact that the contact name was the appellant and said that it was a document he requested her to sign and that she understood that it was the income tax return he was going to lodge. However, she said she knew nothing about the reference to taxable income of $61,856 and did not look at those details. She said she just signed the document. She gave similar information in relation to the rental property schedule shown on the return which showed no income received but expenses of $9,857 leading to a loss in that amount.
1161Ms Skoulos denied that she ever borrowed money from the appellant or that he told her his fees would be $49,000.
1162In cross-examination Ms Skoulos acknowledged that you could not state that a document was true and correct until you read it. However, she said she trusted the appellant. She agreed that she went to the appellant to ask him if she could borrow some money and have a line of credit in order to invest that money and that the appellant told her that to borrow money it was necessary to have tax returns. She also agreed that the appellant told her she would have to get the returns completed because the lenders would need to assess them to see how much she could borrow. She agreed that she then asked the appellant to do the returns for her.
1163However, she denied that the appellant said he would have Mr Campos of Marrickville Accounting Services prepare the returns.
1164Ms Skoulos agreed that two or three weeks after the initial conversation with the appellant she brought her records into his office and he said that he would put them on his accounting system to determine her income. She denied that she told the appellant that she had investment properties through which she had run two businesses in the preceding year, although she stated she had run the businesses of Tasty Cravings and Décore.
1165She denied that the appellant took her through her investments in the unit trust.
1166Ms Skoulos admitted that she deposited money with Ramace and got regular payments. She said that when the appellant obtained the $350,000 on the security of her home he said that he would take the money, invest it and she would get a good income every month.
1167It was put to Ms Skoulos and she agreed that in 1998 she was earning income from Tasty Cravings. She agreed there were bank loans at the time in respect of which repayments were about $2,000 a month. She said that between her and her brother they were earning about $700 a week. In that context she acknowledged she earned $38,000 in 1998 gross.
1168It was put to her and she did not agree that she was familiar with the accounts of the business.
1169So far as her financial relationship with the appellant was concerned, Ms Skoulos rejected a proposition that she had a loan from Ramace and the appellant for about $90,000. It was put to her that these borrowings took place between 1999 and 2001.
1170Ms Skoulos also denied that in September 1999 she paid loan fees and accounting fees of about $38,000 to the appellant. She said the $38,000 was her trust monies. She agreed that she paid the appellant $18,200 in September 1999 and received $3,000 from him in October 1999, with further amounts totalling $4,000 in November and December 1999.
1171She denied that in October 2000 she and her brother jointly borrowed $10,000 from the appellant. She stated that she did not know if her brother borrowed that amount.
1172She also denied that she borrowed $6,000 from the appellant in December 2000, $3,000 in February 2001, $15,000 in September 2001, and $10,000 in May 2001. She did agree that for two years from June 1999 she was getting about $1,800 a month from her investment with the appellant.
1173It was put to Ms Skoulos that in 1998 she did not work for One Shop and she agreed. She also agreed she worked for Tasty Cravings. In relation to 1999, she agreed she did not work for One Shop but she worked for Décore.
1174She admitted that when she worked for Tasty Cravings and Décore she did not fill out employment declarations but stated she thought she received group certificates. She said her brother looked after the accounts.
1175It should be noted that these questions were based on the entirely false premise that a person conducting a business as a self-employed person is required to fill out an employment declaration.
1176It was put to Ms Skoulos that her evidence was that she earned $700 per week from Tasty Cravings in the 1998 year. Counsel was corrected by the trial judge who pointed out that Ms Skoulos' evidence was that she and her brother earned $700 per week. She was then asked about this and said the $700 was split between her and her brother. She denied the $38,146 was the gross wage she received from Tasty Cravings in the financial year ended 30 June 1998. It should be noted that the only wages referred to in the income and expenses statement lodged with the return comprised an amount of $28,052 for casual wages.
1177In relation to the 1999 year she stated that she earned about the same amount from Décore as she had in the previous year. It was suggested to her (incorrectly) that that amounted to $700 per week. It was suggested to her and she agreed that that amounted to $68,148 gross. The question was not objected to but it is impossible to see how Ms Skoulos could have given that evidence. In any event she denied that was how much she earned from Décore. She did agree that money was not paid to the ATO on a regular basis.
1178So far as the authority to deposit was concerned, Ms Skoulos again denied in cross-examination that she knew she was getting a refund cheque of about $50,000 which she agreed to deposit into the account of Ramace.
1179In re-examination Ms Skoulos reiterated that she got about $350 a week before any tax was paid from Tasty Cravings and less than $300 a week from Décore.
1180Further cross-examination was allowed on this matter by leave and it was put to Ms Skoulos that she represented to St George Bank that her weekly gross income was $1,500. She said that the appellant completed the document containing that representation and that she never went to St George Bank, the appellant did everything for her. In re-examination she agreed that there was no signature on the page where $1,500 per week appeared and there was nothing to that effect on the pages which she signed. She said she had no recollection about signing the document.
1181In his evidence in chief the appellant acknowledged that Ms Skoulos was not employed by One Shop in the 1998 year, contrary to what was stated on the replacement group certificate. He said, however, the wages and tax instalments were correct. The appellant stated that he calculated the gross wage from the net wage that he was told by the correct employer. When asked who that was he said "It was either Tasty Cravings or Décore, but she was with another employer as well which I can't recall the name".
1182The appellant stated that the replacement group certificate was signed by a Mr Antonios Nissirios, a director of One Shop. He stated that once it was signed he called in Ms Skoulos and together with her other information advised, her that the material would be given to Mr Campos because she wanted to "do her taxes through us".
1183The appellant stated that Ms Skoulos did work for Tasty Cravings. He said that she gave him the books and records of the business in 1998 or 1999 from which he prepared a profit and loss statement based on the records and verbal information. He said the figure of $34,539 for December 1997 to June 1998 was correct.
1184The appellant said that at the time he came into contact with Ms Skoulos she had a commercial property on Marion Street, Bankstown. She stated that she wanted to purchase the property from her brother and also that her brother should be entitled to receive rents from that property. This was because she was operating her business from the premises and she wanted to pay him rent because the property was jointly owned during the years the subject of the tax returns. He also said that she had a family trust with about $200,000 from which she received a very small income.
1185The appellant said he prepared a rental schedule for the property based on the books and records provided to him and advice from Ms Skoulos. He also said he prepared a loan application on her behalf.
1186He was shown the document "Personal details" to which I have referred above. He acknowledged the document was in his handwriting. It should be noted that the document had written alongside the word "occupation" "(One Shop - Sales) G Certificate". The appellant stated the document was to be given to Mr Campos for him to have personal information of Ms Skoulos. He said he would have written the document after his meeting with Ms Skoulos. He said that the notes were similar to the notes he took at the meeting with her, except for the reference to One Shop. He said that was a mistake made by him; he had "done a schedule for One Shop" which included Ms Skoulos and that was the reason it was written.
1187He was referred to a document dated 25 August 1999 which he identified as notes he took during his initial conference with Ms Skoulos. The note stated that the picture framing business commenced in March 1999 whilst Tasty Cravings had closed in January 1999.
1188The appellant stated he loaned Ms Skoulos money in 1998 or early 1999. He said he could not remember the exact date. He said there was a loan agreement but he did not know where it was. He claimed it was last seen before the seizure of his folder "Pagona Skoulos". He said initially the loans were in small amounts from $3,000 to $5,000 to $15,000, but he believed the maximum loan may have been $240,000 or $340,000.
1189The appellant identified the records he received from Ms Skoulos as receipts, bank statements, chequebooks and expenses and also information she gave him verbally, especially about the rent.
1190The appellant stated with reference to the tax return that it was incorrect that Ms Skoulos worked for One Shop, stating she had her own business and she worked for another company as well. He said he could not remember the exact name of the company. He said he recalled that Ms Skoulos had a picture framing business but he could not remember whether that or the business of Tasty Cravings came first.
1191The appellant said income tax returns were required in connection with the application by Ms Skoulos for a loan and she asked that he complete them for her. He claimed he told her that he worked with Mr Campos of Marrickville Accounting Services who could complete her return.
1192The appellant then said the total amount advanced to Ms Skoulos was about $350,000 because he did a valuation on her property. He stated that after he advanced her funds, he also refinanced her property and then she paid him back all the money that was owing to him and she kept funds with Ramace as an investment. He said Ms Skoulos paid interest on the loans made to her.
1193The appellant stated that he presented Ms Skoulos with paper tax returns to sign. He said the electronic lodgement declaration for the 1998 tax year was signed at the same time as the tax return. He stated the only part of the electronic lodgement declaration which was in his handwriting was the name (Pagona Skoulos) and the year. He said the document was signed and dated by Ms Skoulos and the writing stating the total income or loss and the amount of tax instalments was that of Mr Campos.
1194The appellant was shown the authority to deposit $50,397.71 into the account of Ramace. He claimed that it was signed by Ms Skoulos in his presence. He said that Ms Skoulos was notified when the tax refund cheque was received. He said at the time the authority to deposit was signed Ms Skoulos would have owed him roughly $170,000 to $220,000. He said she owed him money for accounting and bookkeeping fees, of about $18,000 or $22,000 in total.
1195In cross-examination the appellant acknowledged he knew all about Ms Skoulos' finances. He agreed he knew she owned the Marion Street property with her brother and that she did not work for One Shop.
1196The appellant also acknowledged that he knew at the time that she was working in her own business, Tasty Cravings, but denied that it was her only source of income, stating she worked for another company as well. He said it was a shop but he could not recall its name.
1197In cross-examination the appellant stated that he believed that Ms Skoulos closed Tasty Cravings and started the picture framing business in the 1999 financial year. He stated he believed in that year she was working for another company to supplement her income because it was not enough. He said he could not remember the name of the company.
1198The appellant stated that he believed Ms Skoulos could have commenced the business of Tasty Cravings in 1997. It was suggested to him it was late 1998 but he said he could not recall. He was referred to Ms Skoulos' evidence that Tasty Cravings opened after 30 June 1998 and he accepted if that was correct it would have been impossible for her to have earned income from that business in the 1998 year. It was put to him in those circumstances the figures relating to Tasty Cravings showing a loss of $34,539 were incorrect as Tasty Cravings was not operating in that year. He stated that according to his records, it was. It should be noted that the appellant was not taken to his handwritten notes which do tend to suggest that the Tasty Cravings business was bought in 1997 and closed in January 1999.
1199The appellant was asked about the profit and loss account prepared by him for Tasty Cravings for the period from December 1997 to June 1998. He was referred in particular to the expenses for rent of $24,000. He stated this was divided between Ms Skoulos and her brother. He claimed that Ms Skoulos paid her brother $10,000 in rent by cheque. He then said it was in cash. He was asked whether he recalled Ms Skoulos saying the claim for rental expenses was nonsense because no one paid rent, as she owned the building. He agreed he recalled that and acknowledged he did not tell his counsel to put to her that she paid $10,000 rent to her brother. This was another question which gave rise to the Browne v Dunn direction.
1200It was put to him that his evidence regarding the rental expenses was a fabrication, which he denied. He also denied that the 1998 figures were fabricated to generate the highest return.
1201He repeated his evidence that Mr Nissirios signed the 1998 One Shop replacement group certificate. He said at that time the name Pagona Skoulos was on it but Mr Nissirios did not ask why he was signing it when he did not know of Ms Skoulos. He was asked about the employment dates 5 August 1997 to 30 June 1998 and said he could not recall from where he obtained them. It was put to him that he made them up but he denied it. He denied he had Mr Nissirios sign a group certificate in blank.
1202The appellant acknowledged that Ms Skoulos' evidence to the effect that she paid $18,000 by cheque was correct. He stated that that money was in repayment of the loan fee and not for accounting work. He said that he kept the income tax refund because she wanted to invest it with Ramace. He insisted that he had loaned Ms Skoulos much more than $36,000.
1203The appellant on the second day of his cross-examination of this count was referred to the rental schedule he prepared which showed gross rent for Marion Street, Bankstown, as $7,800, a net loss for the property of $5,782 apportioned equally between Ms Skoulos and her brother Mr Venakis. He sought to explain the discrepancy in the following terms:
"I think this is the amount that was charged to the business, and I'm not sure if the other amount through the journal entry was for her not owning or them not owning a property prior to then."
He then said the rent was paid to the previous owner of the property. He claimed that some of the rent would have been paid to the previous owner but he could not say how much it was. It was put to him that he was making it up and he denied it.
1204It was put to the appellant that a fee of $18,000 was excessive for the accounting work he did which he denied. He claimed his invoices for that work were on his file but he did not know where they were at the time of his cross-examination. He acknowledged they were not on his computer.
1205The appellant was also asked about a tax return on his file for 1999 which disclosed business income of $71,713 with a rental loss of $9,857. He stated it was an interim return based on information from Ms Skoulos. He said he sometimes had interim returns signed if the bank wanted them.
1206He acknowledged that a return for the 1998 year gave his postal address but disagreed it would give the appearance that he was a tax agent for Ms Skoulos. He agreed he had Ms Skoulos sign every page. He agreed the tax return showed no employment income but showed a profit of $59,000 from Ms Skoulos' business. He explained the difference between the $34,000 loss on the profit and loss statement by reference to the fact that the former were interim figures. The appellant then said that was what Ms Skoulos had told him she earned from Tasty Cravings. It should be noted that there is nothing in his handwritten notes to confirm this.
1207The appellant was asked about the differences in amounts of individual expense items on the statement of income and expenditure lodged with the tax return and the one contained in the signed tax return showing the net income of $59,040. He said they were adjustments made when he went through the books and records. He acknowledged the difference in costs of sales between $68,000 referred to in the statement of income and expensed lodged with the tax return and $15,000 on the signed return in his possession, which showed a difference of about $90,000 in profit.
1208The appellant acknowledged that he sent the tax return showing a net income of $59,040 to St George Bank, stating he told them that it was an interim tax return not fully reconciled with the books and records. He did not agree that sending the return represented it as a final return. He was referred to the fact it was dated and he said it was normal practice to date interim returns.
1209The appellant was shown a fax he sent to St George Bank concerning an application for a line of credit for Ms Skoulos in an amount of $350,000. He acknowledged this was one of the applications for which a significant component of the amount of $18,000 was charged. He agreed that there was attached to that fax the signed tax return showing income of $59,000. It was put to him and he agreed that the alternatives were that there was either a fraud on the St George Bank or a fraud on the ATO. His only explanation was that they were interim figures and he said he could not suggest any other alternative. The appellant said he did not amend the signed tax return when he got the correct figures because the tax return was to be put through Mr Campos. He said this was his normal practice. He acknowledged that in some cases he had tax returns lodged in paper form and said there was no reason why he did not do that for Ms Skoulos.
1210The appellant was then shown a further hardcopy return which he acknowledged was seized from his office. He agreed this was the final version and that it reflected the information lodged with the ATO for the 1998 year. He stated that the document did not have Ms Skoulos' signature on it because he would have copied it before it was signed. He denied that he did not ask Ms Skoulos to sign it.
1211The appellant was referred to the difference in signature between the signature of Ms Skoulos on the electronic declaration for the 1998 tax year and on the authority to deposit. He was also referred to the evidence of Ms Skoulos to the effect that the signature on the electronic declaration was hers whilst it was not her signature on the authority to deposit. He agreed that the "P" on each signature seemed different but affirmed that he believed they were both her signatures and signed in his presence.
1212In relation to the 1999 tax year, the appellant said that as Ms Skoulos was self-employed she should have given herself a group certificate. He stated he made no inquiries as to whether any tax had been deducted. He was asked in relation to 1999 why some of her income for Décore was shown as business income and some by mistaken reference to One Shop shown as income from employment. He stated that he believed someone who is self-employed can give themselves a group certificate in respect of part of the income received. He said he spoke to Ms Skoulos about that, but did not tell her that as a result she would be paying tax at the highest rate.
1213The appellant agreed that he knew that the picture framing business was not making much money. He stated it was his honest evidence based on documents that Décore had grossed $89,000 before expenses for the 1999 tax year and that gross sales for Tasty Cravings of $93,000 for that year sounded right. He agreed this meant gross sales for both businesses for the year totalled about $180,000 but denied that this was inconsistent with Ms Skoulos' evidence that she was earning $350 per week before tax from Tasty Cravings whilst it operated and $300 per week from Décore.
1214The appellant agreed that he knew that the picture framing business opened after Tasty Cravings closed but denied that he was aware that the picture framing business opened in early 2000. He also said he did not know that Tasty Cravings opened in October or November 1998 and closed in Christmas of 1999.
1215In relation to the 1999 year, he acknowledged that the tax return lodged only referred to data in relation Décore and not Tasty Cravings. He said the rental expenses of $22,000 in the statement of income and expenses lodged with the tax return was created in part by a journal entry. The appellant was referred to the replacement group certificate for the 1999 year and said as with the certificate for the 1998 year, it was signed by Mr Nissirios. He stated he did not draw Mr Nissirios' attention to the fact that the person named on the certificate was Pagona Skoulos and he did not realise there was a mistake when he sent the document to Mr Campos.
1216The appellant was also shown a statement of income and expenses for Tasty Cravings prepared for the 1999 financial year which showed a loss of $53,502 for the period July 1998 to February 1999. He stated he could not recall why he prepared a profit and loss statement for a completely different business to Décore. He said he believed it was a mistake. He was shown an income and expense statement for Décore prepared by him for the period March 1999 to June 1999. He acknowledged that when the gross income disclosed in the income and expense statements for both businesses were added the gross income was equal to that disclosed as the gross income of Décore in the profit and loss statement attached to the tax return.