Gregg v R

Catchwords

[2012] FCA 1355 Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) (2015) 235 FCR 181[2015] FCA 342 Australian Securities and Investments Commission v Rich [2005] NSWSC 417216 ALR 320 Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) [2018] FCA 751(2018) 127 ACSR 110 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485[1993] HCA 15 Bank of Valletta PLC v National Crime Authority (1999) 90 FCR 565[2017] HCA 37 Coshott v Prentice (2014) 221 FCR 450[2014] FCAFC 88 Daw v Toyworld (NSW) Pty Ltd [2001] NSWCA 25 Dickson v R (2017) 94 NSWLR 476[2017] NSWCCA 78 Domican v The Queen (1992) 173 CLR 555[2004] HCA 55 Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385[2018] FCAFC 212 Fennell v The Queen [2019] HCA 37(2019) 93 ALJR 1219 Gilham v R [2012] NSWCCA 131 Hadchiti v R (2016) 93 NSWLR 671[2016] NSWCCA 63 Hamilton v Whitehead (1988) 166 CLR 121[1988] HCA 65 Hannes v Director of Public Prosecutions (Cth) (No 2) [2006] NSWCCA 37360 ACSR 1 Johnson v Miller (1937) 59 CLR 467

Judgment (111 paragraphs)

[1]

Dickson v R (2017) 94 NSWLR 476; [2017] NSWCCA 78 Domican v The Queen (1992) 173 CLR 555; [1992] HCA 13 DPP v Pinn [2015] NSWSC 1684 El Ajou v Dollar Land Holdings PLC [1994] 2 All ER 685 Environment Protection Authority v Truegain Pty Ltd (2013) 85 NSWLR 125; [2013] NSWCCA 204 Environmental Protection Authority v Sydney Water Corporation Ltd (1997) 98 A Crim R 481 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55 Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212 Fennell v The Queen [2019] HCA 37; (2019) 93 ALJR 1219 Gilham v R [2012] NSWCCA 131 Hadchiti v R (2016) 93 NSWLR 671; [2016] NSWCCA 63 Hamilton v Whitehead (1988) 166 CLR 121; [1988] HCA 65 Hannes v Director of Public Prosecutions (Cth) (No 2) [2006] NSWCCA 373; 60 ACSR 1 Johnson v Miller (1937) 59 CLR 467; [1937] HCA 77 Jones Lang LaSalle (NSW) Pty Ltd v Taouk [2012] NSWCA 342 Justins v R (2010) 79 NSWLR 544; [2010] NSWCCA 242 La Trobe Capital & Mortgage Limited v Hay Property Consultants Pty Ltd (2011) 190 FCR 299; [2011] FCAFC 4 Lewis v Condon (2013) 85 NSWLR 99; [2013] NSWCA 204 Libke v The Queen (2007) 230 CLR 559; [2007] HCA 30 Lithgow City Council v Jackson (2011) 244 CLR 352; [2011] HCA 36 M v The Queen (1994) 181 CLR 487; [1994] HCA 63. Mahmood v The State of Western Australia (2008) 232 CLR 397; [2008] HCA 1 McKell v The Queen (2019) 264 CLR 307; [2019] HCA 5 Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 Miles v Bull (1969) 1 QB 258 Montgomery v Stewart (1967) 116 CLR 220; [1967] HCA 11 Moore v R [2016] NSWCCA 185 Moulin Global Eyecare Trading Ltd (in liq) v Commissioner of Inland Revenue [2014] HKCFA 22 National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539 O'Meara v Dominican Fathers [2003] ACTCA 24; 153 ACTR 1 Pell v R [2020] HCA 12; (2020) 94 ALJR 394 Picken v R [2007] NSWCCA 319; ARS v R [2011] NSWCCA 266 R v Apostilides (1984) 154 CLR 563; [1984] HCA 38 R v Hillier (2007) 228 CLR 618; [2007] HCA 13 R v MG (2007) 69 NSWLR 20; [2007] NSWCCA 57 R v Micallef [2002] NSWCCA 480; (2002) 136 A Crim R 127 Roads and Traffic Authority (NSW) v Graincorp Operations Ltd [2010] NSWCA 317 Rockdale Beef Pty Ltd v Industrial Commission of NSW [2007] NSWCA 128; 165 IR 7 S v The Queen (1989) 168 CLR 266; [1989] HCA 66 Saffron v The Queen (1988) 17 NSWLR 395 Scott v Commissioner of Taxation (Cth) (No 2) (1966) 40 ALJR 265 Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 SKA v The Queen (2011) 243 CLR 400; [2011] HCA 13 Snook v London and West Riding Investments Ltd [1967] 2 QB 786 Tesco Supermarkets Ltd v Nattrass [1972] AC 153 The Bell Group Ltd (In liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1; [2008] WASC 239 The Queen v Baden-Clay (2016) 258 CLR 308; [2016] HCA 35 Towney v R [2018] NSWCCA 65 Walsh v Tattersall (1996) 188 CLR 77; [1996] HCA 26 Whitehorn v R (1983) 152 CLR 657; [1983] HCA 42 Wood v R (2012) 84 NSWLR 581; [2012] NSWCCA 21 Texts Cited: V Bell, "Documentary Evidence under the Evidence Act 1995 (NSW)" (2001) 5(1) The Judicial Review 1 Category: Principal judgment Parties: Peter Alan Gregg (Appellant) The Crown (Respondent) Representation: Counsel: T Game SC with J Roy (Appellant) T McDonald SC with M England (Respondent)

[2]

Solicitors: Webb Henderson (Appellant) Commonwealth Director of Public Prosecutions (Respondent) File Number(s): 2017/22547 Publication restriction: Nil Decision under appeal Court or tribunal: District Court Jurisdiction: Criminal Date of Decision: 30 July 2019 Before: Lakatos DCJ File Number(s): 2017/22547

[3]

HEADNOTE [This headnote is not to be read as part of the judgment] Peter Gregg (the appellant) was the Chief Financial Officer of the company Leighton Holdings Limited (LHL). He was convicted of two offences contrary to s 1307(1) of the Corporations Act 2001 (Cth), namely, that as an officer of LHL he engaged in conduct that resulted in the falsification of the books of the company. He was sentenced to a term of imprisonment of 12 months on count 1, and 2 years on count 2, to be served concurrently by way of an Intensive Correction Order. He appealed against both his conviction and sentence. The first count related to a payment instruction given by the appellant to the LHL treasury on 15 August 2011, authorising a payment of $15 million to be made to the company Asian Global Projects and Trading FZE (Asian Global). There were two purposes set out in the payment instruction, being $12.5 million "for marketing and advisory services" and $2.5 million for a "loan". It was alleged that the payment was not made for the stated purposes. The second count related to a "buy and sell agreement" executed on or around 19 December 2011 but dated 1 August 2011 between LHL and Asian Global. It was alleged that the buy and sell agreement was a sham agreement. LHL was the holding company of a number of subsidiary companies, including "operating companies" which worked in industries such as construction and mining. One subsidiary company was Leighton International Limited (LIL). In 2010, LIL entered into an agreement with an Indian company, Welspun Infra Projects Private Limited (Welspun Infra). The agreement (Share Purchase Agreement) was for the sale of a 35% interest in a wholly owned subsidiary of LIL, Leighton Welspun, to Welspun Infra for $100 million. Asian Global was an affiliate of Welspun Infra. The Share Purchase Agreement included a clause that $8 million of the purchase price would be "held back" by Welspun Infra and only paid to LIL if certain conditions were met. If the held back amount was released, there was also an obligation for LIL to "infuse" (or loan) an amount not exceeding about $20 million into Leighton Welspun. If agreement as to the form and manner of the infusion was not met, Welspun Infra could force LIL to repurchase the shares in Leighton Welpsun. The conditions were met for the held back amount to be paid to LIL, which triggered the infusion obligation. However, there were difficulties with meeting that obligation. On 13 August 2011 Welspun Infra waived the infusion obligation. Two days later, the appellant authorised the payment instruction the subject of count 1. Some draft documents, being an "Agreement to Buy and Sell" and a "Facility Agreement" were circulated shortly afterwards but were not signed. In December 2011, LHL's internal auditor began asking questions about the $15 million payment. A buy and sell agreement (the subject of count 2) for the value of $15 million was signed on 19 December 2011, and dated 1 August 2011 (with a Mr Khemka signing on behalf of Asian Global).

[4]

The Court held, allowing the appeal, quashing the verdicts of guilty and entering verdicts of acquittal:

[5]

Whether the trial judge erred in the admission/non-admission of evidence (i) Admission of evidence on the viability of centralised procurement of steel: The trial judge did not err in admitting this evidence. The evidence was relevant as per s 55 of the Evidence Act 1995 (NSW). Some of the evidence was not opinion evidence, since the manner in which the companies operated was a question of fact. Other evidence, which involved expressions of opinion, was given by witnesses who had the necessary experience: [336]-[344] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Bank of Valletta PLC v National Crime Authority (1999) 90 FCR 565; [1999] FCA 1099, referred to. (ii) Non-admission of the Global Business Overview Presentation document: The trial judge erred in not admitting this document. The document was relevant to the facts in issue and had a non-hearsay purpose. The case of Rusu, so far as it states that the authenticity of a document cannot be proved by consideration of the form or content of the document, was incorrectly decided: [362]-[372] (Bathurst CJ); [712] (Hoeben CJ at CL); [713]-[716] (Leeming JA). National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539, not followed. Australian Competition and Consumer Commission v Air New Zealand (No 1) (2012) 207 FCR 448; [2012] FCA 1355; Capital Securities XV Pty Ltd v Calleja [2018] NSWCA 26, referred to. Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212, considered.

[6]

Whether the jury directions on count 1 were affected by errors of law (i) Direction that the jury had to be unanimous about the falsity only one of the purposes in the payment instruction: The change to the Crown case in the Crown's closing address, that to find guilt the jury could be satisfied of the falsity of either of the purposes of the payment instruction, rather than both, was oppressive and resulted in a miscarriage of justice: [394]-[398] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Roads and Traffic Authority (NSW) v Graincorp Operations Ltd [2010] NSWCA 317, considered. (ii) The charge was not rendered duplicitous by the change in the Crown case, which contented there were alternative bases for finding guilt. Construing the statute, the offence in s 1307 of the Corporations Act focuses on conduct which produces a particular result. The relevant conduct here was the making of the two entries on the payment instruction which was said to result in the falsification of the books of the company, which was a single act of criminality: [399]-[413] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Environment Protection Authority v Truegain Pty Ltd (2013) 85 NSWLR 125; [2013] NSWCCA 204; Johnson v Miller (1937) 59 CLR 467; [1937] HCA 77; Montgomery v Stewart (1967) 116 CLR 220; [1967] HCA 11; S v The Queen (1989) 168 CLR 266; [1989] HCA 66; Walsh v Tattersall (1996) 188 CLR 77; [1996] HCA 26; Hannes v Director of Public Prosecutions (Cth) (No 2) [2006] NSWCCA 373; 60 ACSR 1, considered. (iii) Direction on recklessness: The jury direction as to recklessness was not affected by an error of law. It would be open to the jury to find that the appellant did not act dishonestly but was aware there was a substantial risk that the entries did not reflect the true purpose and he was unjustified in taking that risk: [424]-[427] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA).

[7]

Whether the jury directions on count 2 were affected by error of law (i) Definition of "false": The Crown case on count 2 was put on the basis that the buy and sell agreement was a sham. The definition of "false" in the jury directions, which included backdating and said there was no requirement to prove dishonesty, was therefore affected by an error of law, in circumstances where the definition of falsity was said to "carry over" to count 2: [443]-[448] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55; Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88, referred to. (ii) Proving sham: The jury directions on sham were not affected by an error of law. The direction given by the trial judge, including his correction that none of the listed factors taken alone or in conjunction was necessarily sufficient to establish sham, directed the jury's mind to the fact that they needed to be satisfied beyond reasonable doubt that both parties to the knowledge of each other intended the agreement to have no legal effect and acted dishonestly in entering into it: [460]-[467] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55; Snook v London and West Riding Investments Ltd [1967] 2 QB 786; Lewis v Condon (2013) 85 NSWLR 99; [2013] NSWCA 204; Scott v Commissioner of Taxation (Cth) (No 2) (1966) 40 ALJR 265; Miles v Bull (1969) 1 QB 258; Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88, referred to. Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449, considered. (iii) Leaving recklessness on count 2: In the context of the written directions, the mistaken reference in the summing up to recklessness would not have misled the jury: [473] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). (iv) Direction that Mr Khemka was the relevant party for proving sham: The jury direction that Mr Khemka was the directing mind of Asian Global was affected by error. The question for the jury was to determine who was responsible for Asian Global entering into the agreement, and then attribute that person's intension and knowledge to Asian Global: [483]-[494] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Tesco Supermarkets Ltd v Nattrass [1972] AC 153; El Ajou v Dollar Land Holdings PLC [1994] 2 All ER 685; Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, considered. Hamilton v Whitehead (1988) 166 CLR 121; [1988] HCA 65; The Bell Group Ltd (In liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1; [2008] WASC 239; Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) [2018] FCA 751; (2018) 127 ACSR 110, referred to.

[8]

Whether the jury directions reversed the onus and diminished the burden of proof (i) Yes/No Question trail: It was not necessary for the jury to be positively satisfied that an answer to any of the questions in the question trail was "no" in order to acquit the accused. The jury should have been directed that if they were not satisfied beyond reasonable doubt that the answer to any of the questions was "yes" they should acquit. The direction that if the jury was undecided as to the answer of any of the questions in the question trail, they should consider whether the answer was in the negative, diminished the onus on the Crown and placed a positive burden on the appellant to satisfy the jury that the answers to the questions should be in the negative: [503]-[511] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Moore v R [2016] NSWCCA 185; Budrodeen v R [2014] NSWCCA 332; Hadchiti v R (2016) 93 NSWLR 671; [2016] NSWCCA 63, considered. Towney v R [2018] NSWCCA 65, referred to. (ii) Direction that the jury needed only to be satisfied that the Crown case was reasonable: There was a misdirection by the trial judge, as it was not for the jury to determine whether there was "any other reasonable conclusion arising from the facts", but for the Crown to exclude all reasonable hypotheses inconsistent with guilt: [522]-[524] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Moore v R [2016] NSWCCA 185; Hadchiti v R (2016) 93 NSWLR 671; [2016] NSWCCA 63; Towney v R [2018] NSWCCA 65, referred to.

[9]

Whether the trial judge erred in refusing to give a Mahmood direction in relation to the absence of the Operating Company Chief Financial Officers from the Crown witnesses (i) It was unnecessary for the trial judge to give a Mahmood direction, as there was no reason to suggest that the CFOs of the operating companies would be material witnesses: [535]-[537] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA).

[10]

Whether the trial was affected by miscarriages of justice (i) Prosecutor's closing address: There was a substantial miscarriage of justice arising from the prosecutor's closing address. The series of rhetorical questions used tended to suggest that absent an explanation from the appellant, the jury could conclude that the payment was made for a purpose other than that stated. However, the obligation is on the prosecutor to call all witnesses relevant to the unfolding of the narrative. In the context of the rhetorical questions, the jury may have placed weight on the comment that the appellant did not give evidence. The prosecutor's reference to "no evidence" on certain matters in effect asked the jury to draw inferences against the appellant and reversed the onus of proof: [572]-[590] (Bathurst CJ); [712] (Hoeben CJ at CL); [713]-[719] (Leeming JA). Gilham v R [2012] NSWCCA 131; R v MG (2007) 69 NSWLR 20; [2007] NSWCCA 57; Wood v R (2012) 84 NSWLR 581; [2012] NSWCCA 21; Whitehorn v R (1983) 152 CLR 657; [1983] HCA 42; R v Apostilides (1984) 154 CLR 563; [1984] HCA 38, referred to. (ii) Summing up: In summing up, each of the prosecution and defence case must be accurately and fairly put to the jury, and a written summary for the jury should also present the case for each party in a fair and balanced manner. Some parts of the trial judge's written summary of the parties' cases did not provide a balanced and fair summary. [606]-[615] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Domican v The Queen (1992) 173 CLR 555; [1992] HCA 13; Justins v R (2010) 79 NSWLR 544; [2010] NSWCCA 242; Hadchiti v R (2016) 93 NSWLR 671; McKell v The Queen (2019) 264 CLR 307; [2019] HCA 5, referred to.

[11]

Whether the verdicts were unreasonable (i) The principles on which a court will set aside a verdict as unreasonable are well established. In a circumstantial case, it is important to look at the evidence as a whole in considering whether the jury reached an unreasonable verdict. In this case, it would be open to the jury to be satisfied of various matters, including that LIL was at risk of being required to repurchase the shares, and that the payment the subject of the payment instruction was made in connection with the grant of the waiver of the infusion obligation and the provision of the held back amount: [667]-[681] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). Dickson v R (2017) 94 NSWLR 476; [2017] NSWCCA 78; Fennell v The Queen [2019] HCA 37; (2019) 93 ALJR 1219; see also R v Hillier (2007) 228 CLR 618; [2007] HCA 13; Pell v R [2020] HCA 12; (2020) 94 ALJR 394; Libke v The Queen (2007) 230 CLR 559; [2007] HCA 30; M v The Queen (1994) 181 CLR 487; [1994] HCA 63, referred to. (ii) Count 2: To find sham, the jury would have to have found that each party, to the other's knowledge, was going through the charade of negotiating an agreement which was not intended to have any legal effect; however, there was no evidence about the intention and knowledge of Welspun or Asian Global. Other factors, including the lack of value obtained from the agreement, and the concern from the internal auditor about the commerciality of the agreement, did not make it a sham. While it would have been open to the jury to infer that the agreement was made to formalise the payment the subject of the payment instruction and that LHL did not expect to obtain any real benefit, in the absence of any evidence from those involved in the negotiations and the intention of Asian Global, there is a reasonable doubt that the agreement was a sham: [682]-[699] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). The Queen v Baden-Clay (2016) 258 CLR 308; [2016] HCA 35, referred to. (iii) Count 1: For the purpose of the $12.5 million payment, the Crown was not able to exclude beyond reasonable doubt the hypothesis that the parties agreed to enter into an agreement in the nature of the buy and sell agreement (and make the $2.5 million loan) in substitution for the infusion obligation. This is particularly so in the absence of material concerning the negotiations that took place. There was, however, evidence that the description of the payment being for "marketing and advisory services" was consistent with the objects of the buy and sell agreement. It was not open to the jury to conclude beyond reasonable doubt that this entry was false and that the appellant acted recklessly in making the entry: [700]-[707] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA). (iv) For the purpose of the $2.5 million payment, it would seem difficult to come to the conclusion that one entry on the payment instruction was false and made recklessly whilst entertaining reasonable doubt as to the other. In light of other evidence from which it can be inferred that it was anticipated that the infusion issue was to be resolved in part by the making of the $2.5 million loan, it was not open for the jury to find beyond reasonable doubt that the appellant did not believe it was the true purpose of the payment or was reckless in stating that was the case: [708]-[709] (Bathurst CJ); [712] (Hoeben CJ at CL); [713] (Leeming JA).

[12]

Judgment

BATHURST CJ: The appellant Mr Peter Alan Gregg (the appellant) was charged on indictment dated 9 May 2017 with the following offences: Count 1: "On or about 15 August 2011 at Sydney, New South Wales and elsewhere, being an officer of a company, namely Leighton Holdings Limited, engaged in conduct that resulted in the falsification of books affecting or relating to affairs of the company, namely, a payment instruction relating to two payments to be made to Asian Global Projects and Trading FZE in the total sum of $15,000,000 (USD). Contrary to section 1307(1) of the Corporations Act 2001". Count 2: "Between about 15 August 2011 and about 19 December 2011 at Sydney, New South Wales and elsewhere, being an officer of a company, namely Leighton Holdings Limited, engaged in conduct that resulted in the falsification of books affecting or relating to affairs of the company, namely, an Agreement to Buy and Sell between the company and Asian Global Projects and Trading FZE dated 1 August 2011. Contrary to section 1307(1) of the Corporations Act 2001".
Following a trial before a jury the appellant was convicted of each offence. He was sentenced to a term of imprisonment of 12 months on count 1, and 2 years on count 2, to be served concurrently by way of an Intensive Correction Order. He has sought leave to appeal against his conviction and sentence on the following grounds: "Conviction 1. The verdicts were unreasonable or cannot be supported having regard to the evidence. 2. The trial judge erred in admitting evidence on the viability of centralised procurement of steel. 3. The trial judge erred in rejecting the Appellant's tender of the Global Business Overview Presentation. 4. The jury directions on count 1 were affected by errors of law including: a. That the jury had to be unanimous as to the falsity of only one of the two stated purposes in the Payment Instruction; and b. That the jury only needed to be satisfied that the Appellant was reckless as to whether his conduct would result in the falsification of company books. 5. The jury directions on count 2 were affected by errors of law including: a. Defining 'false' to not require dishonesty or an intention to deceive or mislead, and to include falsity by omission and backdating; b. That 'sham' could be proved by a combination of 'factors', or 'enough' factors, without proving the intermediate fact of both parties intending the agreement not to be legally binding; c. Inadvertently leaving recklessness on count 2 contrary to the trial judge's ruling; and d. Directing that Mahesh Khemka was the relevant party, or relevant directing mind and will of the party, to the Buy and Sell Agreement for the purpose of proving sham. 6. The jury directions reversed the onus and diminished the burden of proof, including by: a. Utilising a question trail that compelled 'Yes/No' answers to essential questions, imposing a burden on the Appellant to positively persuade the jury that the answer to the essential questions was 'no' to obtain an acquittal; and b. Directing that the jury needed only to be satisfied that the Crown case on the ultimate question of guilt was reasonable and that it was not satisfied that an alternative explanation was reasonable, placing a burden on the Appellant to provide a reasonable explanation and/or diminishing the burden on the Crown to merely showing that its case 'reasonably arises', and circumventing the burden of beyond reasonable doubt that applied to essential intermediate fact. 7. The trial judge erred in refusing to give a direction that the jury could have regard, in considering whether there was a reasonable doubt about the Appellant's guilt, to the absence of the Operating Company Chief Financial Officers from the Crown witnesses (a Mahmood Direction). 8. The trial was affected by miscarriage(s) of justice arising from: a. The Prosecutor's closing address which impermissibly commented on the Appellant's silence, reversed the onus of proof and misstated the legal elements of the offences; and b. The summing up, which presented an imbalanced and incorrect summary of the parties' respective cases and permitted the Crown to put new arguments to the jury after the Appellant's closing address to which the Appellant was not permitted to respond. Sentence 9. The trial judge erred in imposing the maximum penalty for an offence of below mid-range seriousness. 10. The sentences are otherwise manifestly excessive."

[13]

The Leighton Group

In the period in question, LHL was the holding company of a number of subsidiary companies including Leighton International Limited (LIL), Leighton Asia Limited and various domestic operating companies. Leighton Contractors (India) Private Limited, subsequently renamed Leighton Welspun Contractors Private Limited (Leighton Welspun), was initially a wholly owned subsidiary of LIL.
Mr Stephen Johns was a director of LHL from December 2009 until March 2013, and was appointed Chairman of the Board on 24 August 2011. Prior to becoming Chairman of the Board he was the Chairman of the Audit Committee.
Mr Johns described LHL as having a "very unusual business model". He stated that LHL was a holding company that did not operate or run specific businesses, but delegated day-to-day business operations to the operating companies who acted independently. He stated that the operating companies competed against each other and tendered against each other for projects, leading to a lot of duplication. He stated that this model changed when Mr David Stewart and then Mr Hamish Tyrwhitt became Chief Executive Officer, when there was a move towards looking at how "synergies" and "efficiencies" could be achieved in order to make savings across the Leighton Group.
In the 2010/2011 financial year the Leighton Group had suffered a number of financial setbacks. In a media release of 14 February 2011, LHL reported a $217 million profit for the six months to December 2010, which was down 25 per cent "from $289 m[illion] last year". The media announcement indicated expectation of a net profit after tax of around $480 million for the full financial year. However, by May 2011 LHL had announced an expected loss for the financial year of $427 million.
In a report dealing with the loss, delivered to the LHL Board at a meeting on 30 May 2011, the then Chief Executive Officer, Mr Stewart stated that two of the Group's business priorities in the short and medium term were first, to ensure "no more negative surprises" and that the 2011 and 2012 results were delivered as forecast and second, to establish a sustainable operating platform for the Group which built and made use of the Group's capital and "[a]voids self-destructive intra-group competition of all kinds". The minutes of the Board meeting also record Mr Stewart's remarks that a priority was to ensure no more negative surprises and that the 2011/2012 results were delivered as forecast.

[14]

The sale of shares in Leighton Welspun

As I indicated, Leighton Welspun, then known as Leighton Contractors (India) Private Limited, was a wholly owned subsidiary of LIL. In 2010 negotiations took place with the Indian based Welspun Group of Companies in relation to a joint venture between that group and the Leighton Group in India. It was not in issue that the Welspun Group was controlled and largely owned by a Mr BK Goenka. The negotiations culminated in the sale of 35 per cent of the shares in Leighton Welspun to Welspun Infra Projects Private Limited (Welspun Infra) for the sum of approximately US$100 million. The initial agreement was entered into on 24 December 2010 and was announced to the market on 29 December 2010. The media release referred to the following comments made by Mr Stewart who at the time was Chief Executive Officer elect: "'We have been working successfully in India for 7 years and see the transaction as very important in taking our Indian business to the next stage of its development. Having a local partner clearly provides greater access to the market, particularly when Welspun has such a complementary portfolio of businesses,' said Mr Stewart. 'Operating since 1985, Welspun Group Limited has interests in infrastructure, the oil and gas sectors, steel, steel pipes, and home textiles. The Company has a global presence, operating in more than 50 countries and in 2009/10 had annual revenues of around US$1.6 billion. 'The transaction will generate US$80 million in cash and result in a one-off gain to Leighton Holdings of approximately US$200 million,' said Mr Stewart."
The transaction resulted in the revaluation of Leighton Welspun in the accounts of LHL to approximately $300 million.

[15]

The Share Purchase Agreement and associated agreements

The Share Purchase Agreement was entered into on 24 December 2010. The parties were LIL, which was described as the Seller, Leighton Welspun, described as the Company, and Welspun Infra, described as the Purchaser.
The sale shares were defined as constituting 35 per cent of the issued capital of Leighton Welspun and the purchase consideration was stated to be 470 crore. It should be noted that it was agreed that one crore was worth approximately AUD $200,000 at the relevant time. Thus the total purchase consideration in Australian dollars was approximately $94 million. However, it was common ground between the parties at the trial that it was appropriate to treat the sale price as approximately US$100 million.
Clause 2.1 of the Share Purchase Agreement provided for the sale and purchase of the sale shares. It was in the following terms: "2.1 Subject to the fulfillment of the Seller's Conditions Precedent and relying on the representations and warranties and the indemnities given by the Seller and the Company under this Agreement, the Purchaser hereby agrees to purchase and the Seller hereby agrees to sell the Sale Shares free from all Encumbrances to the Purchaser for the Purchase Consideration. Provided however that the Parties have agreed that the entire Purchase Consideration shall not be paid to the Seller on the Closing Date and the Held Back Amount will be held back. Payment by the Purchaser, of the Held Back Amount to the Seller shall be conditional upon the achievement of the EBITDA Target by the Company. In the event, the EBITDA Target is not achieved by the Company, the Purchase Consideration less the Held Back Amount paid on the Closing Date, shall be the Final Purchase Consideration for the Sale Shares and the Escrow Agent shall release the Held Back Amount to the Purchaser."
EBITDA was defined in the Agreement, and EBITDA Target was defined to mean EBITDA of 340 crore for the target period (approximately AUD $68 million).
The Held Back Amount was defined as the sum of 40 crore (approximately AUD $8 million).
Clause 6 of the Share Purchase Agreement dealt with the condition for payment of the Held Back Amount. So far as relevant it provided as follows: "6.1 The obligation of the Escrow Agent to release the Held Back Amount shall be conditional upon the Company having achieved the EBITDA Target for the period beginning July 1, 2010 and ending on June 30, 2011 ('Target Period'). 6.2 Certificate of Adjusted EBITDA: The Company Auditor shall produce a certificate evidencing the Adjusted EBITDA for the Target Period ('Company Certificate') on or before July 15, 2011 and submit the same to the Seller and the Purchaser. 6.3 Adjusted EBITDA less than EBITDA Target: If the Company Certificate states that the Adjusted EBITDA is less than the EBITDA Target, then the Seller and the Purchaser shall not later than 2 (Two) Business Days from the date of receipt of the Company Certificate, jointly instruct the Escrow Agent in the format provided in the Escrow Agreement and the Escrow Agent shall immediately release the Held Back Amount to the Purchaser. 6.4 Adjusted EBITDA equal to or more than EBITDA Target: Subject to Clause 6.8 and Clause 6.9, if the Company Certificate states that the Adjusted EBITDA is equal to or more than EBITDA Target and the Purchaser agrees with such Company Certificate, the Seller and the Purchaser shall, within a period of 2 (Two) Business Days from the date of receipt of the Company Certificate, jointly give instructions to the Escrow Agent in the format provided in the Escrow Agreement and the Escrow Agent shall release the Held Back Amount to the Seller. 6.5 Review of the Adjusted EBITDA: In the event, the Company Certificate states that the Adjusted EBITDA is equal to or more than the EBITDA Target and the Purchaser does not agree with the Company Certificate, the Purchaser shall have the right to nominate an auditor to undertake and complete a review of the Adjusted EBITDA for the Target Period, who shall deliver to the Purchaser and the Seller, a certificate evidencing the Adjusted EBITDA for the Target Period ('Purchaser Certificate') within a period of 14 (Fourteen) Business Days of receipt of the Company Certificate. 6.6 Purchaser's review confirms EBITDA Target: Subject to Clause 6.8 and Clause 6.9, if the Purchaser Certificate states that the Adjusted EBITDA is equal to or more than the EBITDA Target, the Seller and the Purchaser shall within a period of 2 (Two) Business Days from the date of receipt of the Purchaser Certificate, jointly give instructions to the Escrow Agent in the format provided in the Escrow Agreement and the Escrow Agent shall release the Held Back Amount to the Seller. 6.7 Purchaser's review does not confirm EBITDA Target: If the Purchaser Certificate states that the Adjusted EBITDA is less than the EBITDA Target, then Held Back Amount shall be retained in the escrow and an independent third auditor, being one of the Big 4 auditing firms, shall be appointed by the Seller and the Purchaser within a period of 5 (Five) days from the receipt of the Purchaser Certificate who shall review the Adjusted EBITDA and submit a certificate to the Seller and the Purchaser confirming whether the Adjusted EBITDA is less than, equal to or more than the EBITDA Target ('Independent Auditor Certificate') within 3 (Three) months from the receipt of the request for the review. Subject to Clause 6.8 and Clause 6.9, in the event the Independent Auditor Certificate states that the Adjusted EBITDA is equal to or more than the EBITDA Target, the Seller and the Purchaser shall, within a period of 2 (Two) Business Days from the receipt of the Independent Auditor Certificate give joint instructions to the Escrow Agent in the format provided in the Escrow Agreement and the Escrow Agent shall immediately release the Held Back Amount to the Seller. In the event Independent Auditor Certificate states that the Adjusted EBITDA is less than the EBITDA Target, the Seller and the Purchaser shall, within a period of 2 (Two) Business Days from the receipt of the Independent Auditor Certificate, give joint instructions to the Escrow Agent in the format provided in the Escrow Agreement and the Escrow Agent shall immediately release the Held Back Amount to the Purchaser."

[16]

Both the 21 April Agreement and the term sheet were executed on behalf of LIL and Leighton Welspun by a Ms Ameeta Chatterjee.
The evidence does not disclose the date on which the Share Purchase Agreement was in fact completed. Having regard to an email of 26 April 2011 from Mr Russell Waugh, the Managing Director of Leighton Welspun, to Mr David Kent, the General Manager of Tax of LHL, and the appellant, completion appears to have occurred on 28 April 2011.

[17]

The relevant contractual rights and obligations

Because there were some issues concerning the construction of the agreements, it is convenient that I deal with them at this point in the judgment.
The first point to note is that in each of the Share Purchase Agreement, the Business Co-operation Agreement and the Support Agreement, the Leighton counterparty was LIL. This is relevant in considering the effect of compliance with the infusion obligation or the failure to achieve the EBITDA target on the accounts of LHL. Although it was suggested that the failure to reach the EBITDA target and/or the meeting of the infusion payment would affect the accounts, there was no evidence as to how they would be affected, particularly in circumstances where the Leighton Group accounts would be prepared on a consolidated basis, the consolidated accounts presumably including Leighton Welspun which remained a subsidiary of LIL after completion of the Share Purchase Agreement.
Second, cl 5.2.3 of the Business Co-operation Agreement envisaged companies in the Leighton Group purchasing Welspun's pipes from one of the companies in the Welspun Group (see [28] above). Although described as an opportunity for Welspun and expressly providing that the Leighton Group had an unfettered discretion whether or not to purchase such pipes, it does demonstrate that the concept of group purchases for Leighton from companies in the Welspun Group was a matter within the contemplation of the parties at the outset of the relationship between them. It should be noted that in contrast to the buy and sell agreement, which was between different parties, it did not provide for preferred pricing or preferred delivery over the period of the agreement.
The third matter to note is that the Share Purchase Agreement was subject to ongoing negotiations between the date it was entered into and the date of closure. That is evident from the evolution of cl 6.9. I have referred to Recital C to the Supplemental Agreement of 24 December 2010 and the amendment to the Share Purchase Agreement effected by that agreement at [31] and [32] above which provided for the infusion of 100 crore but which, although setting out possible alternatives, left open the manner in which it was to be undertaken.
Fourth, although the second emanation of cl 6.9 of the Share Purchase Agreement and the original cl 6A of the Shareholders Agreement as originally inserted provided for agreement as to the amount and manner of the infusion within 45 days after the date LIL became entitled to the Held Back Amount, the final version of these provisions provided it had to be agreed before the release of the management accounts, which occurred no later than 15 July 2011, the date on which Leighton Welspun's auditors were required to produce the adjusted EBITDA certificate.

[18]

Communications from 14 March 2011 to 27 April 2011

Issues concerning the implementation of the Share Purchase Agreement arose prior to its completion. On 14 March 2011 Mr Parvez Umrigar, the Managing Director and CEO of Welspun Infratech, emailed Mr David Savage, the then Managing Director of LIL. The email, which was copied to Mr Stewart and to Mr Goenka, the Chief Executive of the Welspun Group, raised three issues. First, the fact that Leighton India and Welspun had not been able to make headway on how they "should get Hochtief and Welspun to come closer". The reference to Hochtief was a reference to a German group which had by that time acquired a majority interest in LHL. The second issue concerned the Support Agreement. Mr Umrigar emphasised its importance and his concern that Leighton and Welspun were not "on the same page" concerning it. The third matter raised was the potential infusion of 100 crore into Leighton Welspun. In respect to that issue Mr Umrigar made the following comments: "As we understand from the Leighton India team, the Company is sure to exceed the targeted EBITDA of Rs. 340 crore. This would mean that the Escrow Amount of Rs. 40 crore will get released to Leighton. At the same time, there is no progress on the NHAI Claim matter. Delay in initiating the Claim matter with NHAI means delay in the Company ultimately receiving the money either from NHAI or failing which from Leighton."
The concluding paragraphs of the email from Mr Umrigar stated that the Hochtief understanding and the Support Agreement were crucial as they formed the "cornerstone" of various future understandings and that it was advisable to have "absolute clarity and necessary documentation" before the remittance of the 430 crore. He said that the infusion was important as it would have commercial implications, and that it was "advisable to conclude all understandings at this juncture". The appellant was the Chief Financial Officer of LHL at the time. Although he was not copied into the email, it was forwarded to him by Mr Stewart and on 14 March 2011 he forwarded it to Mr Kent and Mr Philip Hatten, asking that they discuss it. Mr Hatten was the General Manager of Investments and Acquisitions at LHL. Mr Kent stated in evidence at the trial that his role in the sale was to co-ordinate a team from LHL to oversee the transaction. He was asked to undertake this task by the appellant.
On the same day, Mr Kent emailed Mr Chris Breen with copies to Mr Hatten and Mr Savage, and asked what progress had been made on the agreements concerning the loan of 100 crore. He indicated that he thought that the Hochtief MOU had been shared with Welspun and they were happy, and that there appeared to be a "large expectation gap" between Leighton and Welspun as to the Support Agreement. It is not clear from the evidence what precise position Mr Breen held. However, he was evidently a person involved in the negotiations concerning the agreements.

[19]

Correspondence post-closing to the payment of $15 million

On 18 May 2011, Mr Kent emailed the appellant, with copies going to among others Mr Hatten, Mr Carlos Mendes, an accountant in the employ of LHL, and Mr Travis Young, the Deputy Chief financial Officer of LHL. The email made the following statements: "EBITDA Target for LWIN 1. Target EBITDA Is 340 crores (US75m) for the Target Period 1 July 2010 to 30 June 2011 2. Held Back Amount - held in Escrow is 40 crores (US9m) 3. If Adjusted EBITDA exceeds Target then Leighton receives Held Back Amount if less then Welspun receives Held Back Amount · 4. Infusion Amount 100 crores (US22m) if a. NHAI claims are written off by Auditors; and /or b. OPAL and /or OPIL do not submit notices to NHAI invoking arbitration; or c. Arbitral award is passed against OPIL and OPAL in connection with Identified claims 5. Regardless of NHAI claim issues, if Welspun receive Held Back Amount then Infusion Amount is NOT required. 6. If EBITDA Target is not met and Welspun receives the Held Back Amount then the impact would be: a. LHL 2011 profit is reduced by US 20m (AUD 19m) (approx $25m Profit Before Tax and $5m tax expense) b. On cash negative USA 9 m (AUD 8.5m) before tax of 22%. Peter, the above is a summary. Phil H has prepared a more detailed analysis of EBITDA Target requirements - refer attached."
On 19 May 2011, Mr Kent emailed Mr Waugh with copies to the appellant and Mr Hatten. The email referred to the fact that the appellant had spoken to Mr Hatten and Mr Kent concerning issues that were raised by BK Goenka. He said it was suggested to the appellant that the documentation of the infusion of 100 crore was a difficult process and that Welspun had suggested they keep the 40 crore Held Back Amount and waive the obligation to infuse the 100 crore. Mr Kent commented this made "no sense", because pursuant to the transaction documents, the obligation to infuse the 100 crore only existed if the Held Back Amount was paid to Leighton, and that if the Held Back Amount was released to Welspun it would have a material impact on the value of the transaction and the profit already brought to account in the Leighton Group's accounts. He stated, "If we believe that the EBITDA will be met - why would we give up the Escrow?"
On the same day, Mr Waugh emailed Mr Hatten and Mr Kent with a copy to the appellant. Mr Waugh stated that he would let Mr Goenka know that Mr Hatten and Mr Kent were "looking into this". He stated that Mr Goenka "understands, and will await next week to discuss". He said that Mr Goenka was "keen to close quickly as there is nothing to negotiate the facility documents will need to be put in place during June".

[20]

The subsequent negotiations and the entry into the buy and sell agreement

On 15 August 2011 the appellant emailed Mr Waugh advising that the payment had been made and stating that he assumed that Ameeta (Ms Chatterjee) was still doing documents for the loan amount. He stated that the payment was made in two tranches, "12.5 and 2.5". Mr Waugh responded that Ameeta was working on the two documents and would have a draft done shortly.
On 16 August 2011 Mr Waugh emailed the appellant to say that the transferred funds had not been received, but subsequently confirmed that the funds had gone through.
On 17 August 2011 Ms Chatterjee forwarded to Mr Waugh a draft "Agreement to Buy and Sell", stating that the second document would be sent by the end of the day. The consideration for the buy and sell agreement was US$12.5 million and the agreement was stated to be valid for a period of two years. There were other provisions which were not included in the final agreement but they are not relevant for present purposes. Mr Waugh did not forward Ms Chatterjee's draft to the appellant but rather forwarded a different version of the agreement on 5 September 2011. The actual identity of the parties was left open but cll 2 to 7 were in the following terms: "2. For all purchase requirements from Buyer and Buyer's subsidiary companies, Seller will provide preferred and commercially beneficial pricing no matter the exact size of individual orders and will at all times view the total Buyer ordering on a collective basis, regardless of the entity or entities through which the purchase takes place. 3. Seller further commits that all Leighton orders will be given preferential status for delivery, meaning that materials will be set aside by Seller in anticipation of Buyers orders, and .will be used to assuredly supply Buyer's orders in time frames that are faster than market norms. 4. In consideration of Seller's commitments, Buyer will pay [US 12.5 million] (US Dollars Twelve and a half million only] (hereinafter referred to as 'Consideration'] on execution of this Agreement. This amount shall be non refundable or non adjustable against actual orders placed. 5. This agreement is valid for a period of 2 years from the date of Agreement. 6. The Parties agree that this Agreement shall be confidential between them, and shall not be disclosed to any third party except as may be required by law or a court of competent jurisdiction. 7. This Agreement shall be subject to the laws of the Singapore."

[21]

a Mr Philip Hatten

As I have indicated, Mr Hatten at the relevant time was the General Manager of Investments and Acquisitions at LHL. He gave evidence concerning what the appellant in his written submissions described as the "commercial viability" of the buy and sell agreement. He gave evidence he became involved in the sale of Leighton's Indian venture when Mr Kent asked him for assistance. He said the project was known internally as Project Melbourne. He said Mr Kent had been appointed by the appellant as the Project Manager. He said Mr Savage, who was the General Manager of LIL, and Ms Chatterjee were also involved in the project. He subsequently stated that Ms Chatterjee was the General Manager of Leighton India (Leighton Welspun).
Mr Hatten was referred to the email from Mr Wild of 20 April 2011: see [64] above. Mr Hatten was asked about his state of mind whilst working on the transaction. He stated that he was not surprised by the fact that "items continued to roll around". He stated that from his own experience with India he was used to "perpetual negotiations". He stated that whilst it was frustrating, it was not abnormal. Referring to the emails from Mr Kent of 18 and 19 May 2011 (see [66]-[67] above), Mr Hatten said he was told it was Mr Goenka's view that it was difficult to put the infusion obligation into the agreement, but that it was his view that it could be done. He was also referred to Mr Kent's email to which I have referred at [71] above, and stated that he thought it was only Mr Kent's view that documenting the infusion would be difficult. He stated that the inclusion in the email of Mr Mendes who was a technical accountant was significant, as he would be aware of issues that may come out of the documentation. He agreed that Mr Kent was suggesting a trade for the money in Escrow or some portion of it in return for LHL not being liable to make the loan (also called an infusion).
Mr Hatten stated that to his knowledge, the waiver letter of 13 August 2011 was the end of the 100 crore issue. He stated that he was not privy to any discussions as to how the waiver came to be provided to Leighton. He confirmed that the appellant never provided him with emails which contained correspondence with Mr Waugh or Mr Goenka in relation to the matter.
In cross-examination, Mr Hatten stated that the appellant was senior to him and that he reported to the appellant. He stated that he did not expect that the appellant would keep him informed on every material detail relating to the transaction. He confirmed that in conducting business in India, negotiations generally took longer than would be expected in Australia. He agreed that from time to time, one might experience an attempt by the other party to renegotiate a transaction even though it was thought to be resolved.

[22]

b Mr William Wild

Mr Wild was the Deputy Chief Executive Officer of LHL from 2010 to 30 June 2011. He had an extensive career in engineering. Prior to his appointment as Deputy Chief Executive Officer he was the Chief Operating Officer of LHL and before that the Managing Director of John Holland Ltd, one of LHL's operating companies.
He described the role of LHL and the operating companies in a similar manner to Mr Johns (see [13] above). He stated that LHL played a "hands off" role in terms of operations. He said that LHL tried to set policy only and lead in that direction, but not be involved at an operating level at all. He said that responsibility for each of the operating companies rested with the Managing Director or Chief Executive Officer of that company.
Mr Wild said he had not been involved in the sale of part of Leighton India to Welspun much before 31 January 2011. Mr Wild was referred to his email to Mr Stewart, the appellant and Mr Sasse of 22 March 2011 (see [56] above). He stated that there were several road projects that had outstanding unsettled contractual claims that related to the 100 crore. He stated that in the event that recovery of those claims was not 100 per cent of what was assumed, LHL had to put in 100 crore to cover that. He said it would be wise to provision against not achieving the resolution of the claims. He stated that he thought that the 100 crore matter had come up since the transaction had been entered into, referring to Mr Waugh's email of 3 April 2011 (see [60] above) and saying that Mr Waugh was suggesting that it would be dealt with later.
Mr Wild stated that in his time at LHL he was not aware of any initiative to set up a centralised procurement regime for steel or steel products, nor that he recalled being party to any discussion concerning the engagement of an external agent by LHL to source steel for the operating companies. He said that he would have expected to have known about such an initiative given his position. He stated that when Mr Stewart took over as Chief Executive Officer in January 2011 the appellant talked about setting up a group wide approach for air travel procurement. He said that he did not think that centralised procurement was a viable option across LHL, because contractors were unhappy about more than one Leighton operating company tendering for particular projects and if there was central procurement it would "cut across" a lot of protocols about tenders on projects.

[23]

c Mr David Stewart

Mr Stewart graduated with a Bachelor of Engineering and a Bachelor of Science from the University of Sydney. Prior to becoming Chief Executive Officer of LHL, he was its Chief Operating Officer, and before that had occupied senior positions within the operating companies. He was Chief Executive Officer from 1 January 2011 until 24 August 2011. He agreed that during his various roles he had a good understanding about how the operating companies operated. He stated that he recalled there being a significant gain by LHL in respect of the sale of part of the "Indian construction business".
Mr Stewart stated that LHL held Board meetings monthly. He said it was normal for the Chief Financial Officer to present to the Board regularly.
Mr Stewart was referred to remarks he made at the Board meeting of 30 May 2011 that the priorities were to ensure "no more negative surprises" and that the results be "delivered as forecast, thus rebuilding market confidence" (see [15] above). He stated that LHL had a mentality that it could handle profits or losses, but did not want to be surprised by them. He agreed that if the Leighton India sale had been unwound and LHL had to pay back the profit that it had announced, that would have been a negative surprise.
Mr Stewart's attention was also drawn to the heading "Strategic Initiatives" in the minutes of the meeting of 30 May 2011, and confirmed they were strategic initiatives in relation to the operating companies rather than LHL as a whole.
Mr Stewart was referred to the minutes of the Board meeting of 12 August 2011. He agreed that the issue of whether Leighton Welspun was on track to achieve the EBITDA target in the 2010/2011 financial period was recorded in the minutes and brought to the Board's attention because it was an important matter. He also agreed that it was an important matter that the US$8.5 million (the Held Back Amount) would be paid to Leighton rather than paid to Welspun.
Mr Stewart was shown a presentation by the appellant of August 2011 and agreed that strategies to reduce costs did not include group based procurement other than group travel. He confirmed that LHL's Business Plan for the period 2012 to 2014 did not contain any reference to procuring steel on any basis through which LHL was the initiator.
Mr Stewart said that prior to September 2014, he did not know of the entity called Asian Global, nor had he discussed with the appellant any agreement concerning that company. He also stated that he did not recall any conversation about the prospects of engaging external parties to source steel for LHL, the Group or the operating companies. He said he had never heard of Mr Khemka. He also stated that he did not recall any discussion with anyone concerning a centralised steel procurement function for the Leighton Group via an external agent. He said that he thought he would have been consulted on such an issue, but would not necessarily have been. He stated that he did not recall the appellant or anyone else suggesting at the August 2011 meeting that centralised purchasing or sourcing of steel via an agent or otherwise would or may be part of a planned cost savings initiative.

[24]

d Mr David Kent

Mr Kent was the General Manager of Tax for LHL from late 2010 to early 2012. He stated he reported directly to the appellant. In relation to the transactions involving Welspun and Leighton India, he said his role was to coordinate a team from LHL to effectively oversee the transaction and to look after Leighton's interests. He stated that his role was particularly to oversee LHL's interest in the sale process, as there was another team from LIL that looked after the project. He said Mr Hatten worked with him on the project.
Mr Kent agreed that after the signing of the transaction documents on 24 December 2010 until about 28 April 2011 there were ongoing negotiations about post-sale issues. He agreed the obligation to infuse, or loan, up to 100 crore into Leighton Welspun was a matter that concerned LHL. He stated that issue concerned both LHL and LIL. He confirmed that he dealt with Mr Umrigar.
Mr Kent was referred to the emails which I have set out at [49]-[53] above. He stated that one on his concerns was whether the company would reach its EBITDA target and that the EBITDA target was in fact met and LIL received the 40 crore in its entirety. He said the EBITDA target was of some importance and concern to LHL. He also said the other issue was that if the EBITDA target was met and the money was paid to LIL there could have been an obligation on LHL to infuse money into Leighton Welspun, because the NHAI claims might have been written off or not arbitrated. He said that once the EBITDA target had been met and the money had come back to Leighton interests, there was an issue at management level from LHL's perspective about how to resolve the issue about the infusion.
Mr Kent was referred to the media release of LHL dated 29 December 2010 to which I have referred at [16] above. He confirmed the US$200 million gain referred to in the release was booked to the 2010 calendar accounts. He was also taken to the media release of 14 February 2011 to which I have referred at [14] above. He stated that the $217 million profit for the six months to December 2010 took into account the $200 million one off gain and the $80 million cash receipt referred to in the December 2010 media release. He was referred to his statement in his email of 22 March 2011 that "[t]he profit impact on the reported half year results is a critical issue for LHL" (see [55] above) and stated he did not remember what he meant when he said that. He was also taken to the email of 20 April 2011 to which I have referred at [63] above. He stated that he remembered the tenure of the 100 crore being a live issue, with Welspun believing it should be 10 years and LHL advising they would accept five years. He stated he also recalled the NHAI claims and the 100 crore term sheet being live issues at the LHL level. Mr Kent was referred to the email from Mr Waugh to which I have referred at [65] above. He stated he was not involved in the negotiation process referred to in that email but that he had had other dealings with Mr Umrigar in respect of the infusion.

[25]

e Mr Thomas Patrick McKay

Mr McKay was the Executive General Manager of Treasury for LHL from 2008 to 2012. He stated that Treasury managed the cash position of the Leighton Group to ensure cash flow and was responsible for raising debt facilities or bank borrowings to fund the Group.
Mr McKay stated that on 15 August 2011 he received a telephone call from the appellant who told him to make an urgent payment. The appellant then sent through a note with details of the payment amounts.
Mr McKay stated that a Mr Clewett had asked him where the invoice and supporting documentation for the payments were, and he advised Mr Clewett that the appellant had mentioned it would be coming from him directly and that Mr Clewett should follow it up with the appellant. He stated that Mr Clewett was one of the chief accountants in the accounting department.
Mr McKay stated that he was not aware of any plan involving centralised procurement of steel in the Leighton Group, and that he had not heard of Asian Global other than through making the payment on 15 August 2011. He stated he had not seen the buy and sell agreement while he was working at LHL. However, he agreed in cross-examination that he would not expect the appellant to inform him of the appellant's dealings with any particular company. He agreed it was therefore not surprising that he did not have any awareness of Asian Global.
Mr McKay stated in cross-examination that the accounting department required further documentation so they could work out the accounting treatment of the payment. He stated he understood it was inevitable that the accounting department would seek to obtain the relevant documentation, as they needed to work out how to account for it. He stated that in his experience, an agreement might be reached and the documentation come into existence at a later date and the agreement would be backdated. He stated that this would occur especially where a payment had been made or services commenced.
Mr McKay agreed in cross-examination that the Leighton Group was looking to save money through procurement strategies, which was a different model to the existing model under which the operating companies were very independent. He agreed that the appellant's role as CFO was central to that.

[26]

f Mr Craig Andrew van der Laan de Vries

Mr van der Laan was employed from June 2011 to March 2012 as Chief Risk Officer and Group General Counsel for LHL. As the Chief Risk Officer, he oversaw the risk management activities and practices across the Group. As General Counsel, he was the key adviser to other members of the senior executive team in relation to legal matters.
From late August 2011, Mr van der Laan oversaw the internal audit team. At the end of November or early December 2011, Dr Christof Brixel, the head of the internal audit team, indicated to him that he, Dr Brixel, wished to carry out an audit of consulting agreements that had been undertaken out of LHL's office for a brief period earlier that year.
Mr van der Laan referred to the email from Dr Brixel to him of 14 December 2011 to which I have referred at [104]-[105] above. He confirmed that that was the first follow-up he had from Dr Brixel after he commenced the review. He said he approved Dr Brixel investigating the payment to Asian Global.
Mr van der Laan stated that he never attended a meeting with Mr Tyrwhitt, Dr Brixel and the appellant to discuss the internal audit and the subject payment. He said that Dr Brixel had attended the meeting with Mr Tyrwhitt and the appellant, and that afterwards Dr Brixel told him that both Mr Tyrwhitt and the appellant were satisfied that the transaction was appropriate and therefore Dr Brixel proposed to take no further action in relation to the matter. He confirmed that he had never seen the memorandum of 21 December 2011 from the appellant to Mr Tyrwhitt (see [121] above).
In cross-examination, Mr van der Laan confirmed that he had conducted a check in relation to Asian Global and established it was an affiliate company of the Welspun Group and that Mr Khemka was employed by or affiliated with the Welspun Group. He stated he conducted these checks independently of the investigation of Dr Brixel. He confirmed the website for Asian Global indicated it traded in steel products.

[27]

g Dr Christof Brixel

Dr Brixel worked at LHL between 2007 and 2012 as the Executive General Manager of Audit.
Dr Brixel stated he reviewed the two payments of US$12.5 million and US$2.5 million made to Asian Global. He stated he was concerned that the two payments constituted approximately half of the total expenditure made by LHL on consulting fees during the period he was reviewing, and also because the supporting documentation was only an email which contained printed details of the payee's bank details. He said he researched Asian Global and found that it appeared to be involved in the trading of steel products. He stated he was concerned because LHL had no role in the procurement of steel for its subsidiary construction companies.
Dr Brixel stated that his first contact with the appellant in relation to the payments was the email of 16 December 2011 and his response (see [106]-[108] above). He said he was given the buy and sell agreement by the appellant on 19 December 2011. He said the appellant was very co-operative. Dr Brixel said he was concerned that the buy and sell agreement was not a good economic deal because the documentation did not specify how the Group would get cheaper and quicker supplies.
Dr Brixel was referred to his email to Mr van der Laan which incorporated the questions he asked of the appellant and the appellant's responses (see [118] above). He stated he could not remember the discussion with the appellant and his exact words. He also stated he did not know how the operating companies would make use of the agreement because he did not know about the workings of the Board and how it dealt with operating companies.
Dr Brixel was referred to his email of 21 December to the appellant and Mr Tyrwhitt (see [119] above). He said he had spoken to Mr Tyrwhitt about the payments because he wanted to confirm that Mr Tyrwhitt was aware of the contents and intent of the agreement. He stated he remembered meeting the appellant and Mr Tyrwhitt and having a short discussion on the matter and that they had agreed to alleviate his original concerns about the economic deficiency. He stated that it was also agreed that to address his concern about the procedural deficiency, Mr Tyrwhitt would support the establishment of an internal approval process.
Dr Brixel stated he called the Chairman of the Board of LHL, Mr Johns, on 21 December 2011. He said he told Mr Johns about the situation and that he, Dr Brixel, was conflicted in undertaking a review because the appellant was Dr Brixel's direct report.

[28]

h Mr Michael Sasse

Mr Sasse commenced working at LHL in September 2010 as the General Manager of Organisational Strategy. The role covered a range of issues, including company governance aspects of workplace health and safety to organisational design, remuneration issues and government relations. He held the position for just over 12 months. He had previously worked in another Leighton organisation, Transfield Construction.
Mr Sasse stated that he met Mr Umrigar in India in relation to the transaction with Welspun. He said that he met BK Goenka a number of times in relation to the sale transaction of the interest in India to Welspun. He said he was placed on the Board of Leighton Welspun because David Stewart trusted his judgment.
Mr Sasse stated that his recollection was that the EBITDA target was not met by 30 June 2011, and he could not recall whether the Escrow funds were paid to LHL interests or Welspun interests.
Mr Sasse stated that his role as General Manager of Organisation Strategy involved the centralised procurement of goods and services for the Leighton Group. He said he was a member of the senior leadership team and had primary responsibility for managing all the organisational change issues. He said that anything the holding company did that the operating companies perceived to interfere with their independence had to be managed extremely carefully. He said that when Mr Stewart was nominated as the successor to Mr King, Mr Stewart and Mr Sasse entered into lengthy discussion about what needed to be done to look at the organisational structure around the way the operating companies behaved, what they did and what level of centralised services should be looked at so they had the opportunity to leverage the size and footprint of the company.
Mr Sasse stated that he finished at LHL in November 2011 and that in the period he was at LHL no-one ever discussed with him or mentioned the possibility of centralised steel procurement. He expressed the view that for it to be effective the operating companies would have to buy in. He stated that as the dominant feature of that time was the culture of independence, one would have to go through a very careful process of getting the support from managing directors and key senior executives in each operating company.
Mr Sasse stated that he had never heard of Asian Global. He said that if he had seen the buy and sell agreement in the course of his employment he would not have taken it seriously, because it contemplated the aggregation of the Group's steel procurement, which was a very complicated issue from both an organisational change and an operating perspective.

[29]

i Mr Phillip James Clewett

Mr Clewett was the Group Accounting Manager for LHL. He said Leighton Finance (USA) was primarily a US dollar funding entity which raised money in US dollars, whilst Leighton Admin Services Pty Ltd was the corporate administration entity of the Group.
Mr Clewett confirmed he received the payment instruction the subject of count 1 from Group Treasury. He stated that the payment, in comparison to other transactions that Leighton Finance (USA) dealt with, was a small transaction. Mr Clewett said that because there was no loan documentation provided he took a conservative approach and recognised the payment as an expense. He said that if they received the loan documentation down the track he could amend the treatment of the payment. He said he had no reason to investigate the payment as it had been signed off by the CFO and Mr McKay.
Mr Clewett stated he had received a copy of the buy and sell agreement on 22 December 2011, and thought he needed to change the accounting treatment of the payment of $15 million because the agreement indicated that the payment was for a service that was to be received in a future period of 24 months. He said he had to recognise the amount as an asset which LHL would write down over the remaining period of the agreement. He agreed that in any given 12 months period the asset would be written down by $7.5 million. He stated that in December 2012 the amortisation was accelerated and it was a written-off asset. He said that occurred because there was a determination to write off a number of assets of a similar nature before the December year end results. He said just prior to amortisation, the value of the asset was about $4 million.
In cross-examination, Mr Clewett confirmed that the changes in the accounting treatment of the payment occurred within one half year so did not require revision of the accounts in a formal sense. He said the accounting treatment was recorded in the books of the entities within the Leighton Group and the books were audited.

[30]

j Mr Craig Alan Laslett

Mr Laslett was the Managing Director of Leighton Contractors between September 2010 and June 2014.
Mr Laslett said that during 2010 to 2014 Leighton Contractors dealt with procurement on a project basis where the responsibility for procurement for a particular project was under the control of the Project Manager and their respective team. He said in the latter part of the period while he was Managing Director of Leighton Contractors, the company started looking at more strategic ways of thinking about procurement across the Group.
Mr Laslett was taken to the minutes of the Board meeting of LHL on 30 May 2011 where he gave a presentation. He agreed he spoke about Leighton Contractors' review of strategic procurement and said there was some work they were doing within Leighton Contractors that transitioned into the LHL team. Mr Laslett stated that the strategic procurement was looking at commodities such as external plant hire.
Mr Laslett stated that Mr Tony White was appointed around 2012 and his responsibility was to look at strategic procurement.
Mr Laslett was referred to the Group Business Plan 2012-2014 dated August 2011, and stated that as at August 2011 he was aware of other categories of strategic procurement including moving equipment with major suppliers, insurance, explosives and fuels.
Mr Laslett stated that he was not aware that LHL had entered into a centralised procurement agreement or a bulk buying agreement or a preferential pricing agreement in respect of steel. He said as Managing Director of Leighton Contractors he would have expected to have heard of it.
Mr Laslett stated that a project's specific requirements needed to be considered when decisions were made about procuring steel because steel could be used for a wide range of purposes. He stated that during the period he was Managing Director he did not know of Asian Global, and Leighton Contractors did not source any steel from it nor were invited to do so. He said he had not seen the agreement to buy and sell and was never told about its existence. He stated that having subsequently read the document, there were components that could be useful given it was not exclusive and it went to enhance a relationship between the buyer and seller.
In cross-examination, Mr Laslett agreed there was a transition period from the operating companies being operated in an independent way under Mr King which changed in direction after he stepped down. He agreed that terms like "strategic management company" started to come into vogue and management started to talk about synergies across the Group. He stated that management also agreed that in the context of procurement, the aggregation of demand of the Leighton Group gave it greater buying power. He stated that the appellant was significant in relation to the push to take advantage of synergies across the Leighton Group.

[31]

k Mr Stephen Paul Johns

Mr Johns was on the Board of LHL from December 2009 to March 2013 and Chairman between 24 August 2011 and March 2013. Prior to becoming Chairman of the Board, he was the Chairman of the Audit Committee.
Mr Johns described how the Group operated while Mr King was the Chief Executive Officer. I have set out his description of the Group's operations at [13] above. He was referred to an LHL memorandum dated 4 November 2011 which, under the heading "Cost Savings Initiatives and Review of Overheads", identified certain synergies. He stated that what was proposed was broader than in the LHL memorandum of 4 November 2011. However, he agreed that that business plan represented what the Board was concerned with in relation to synergies and strategies as of November 2011.
Mr Johns said he recalled being approached by Dr Brixel in late December 2011 whilst he was Chairman of the Board. He stated that Dr Brixel came to speak to him even though he was no longer the Chairman of the Audit Committee because there was an interim Chairman of the Audit Committee who had limited experience. He said that Dr Brixel said words to the effect that he was concerned about a consultancy fee payment of around $15 million or $16 million that did not have documentary support. Mr Johns said he did not recall what he said back to Dr Brixel but he was concerned about it. He said he immediately spoke to Mr Tyrwhitt and they asked the appellant to come and explain to them what the payments were for. He said on that day he, the appellant and Mr Tyrwhitt met in person and he said words to the effect of, "Was this payment for the proper purposes of the company and did you, Peter, get any financial benefit out of this transaction?" The appellant responded that it was for the proper purposes of the company, for the purpose of establishing a global procurement function for the Leighton Group and that he guaranteed Mr Johns personally that he did not get any financial benefit from the transaction.
Mr Johns said following that meeting he asked Dr Brixel in the presence of Mr Tyrwhitt to fully investigate the matter and report back to him as quickly as possible. He said Dr Brixel did not raise an issue about a conflict of interest but accepted the instruction, not saying anything further. In early to mid-January, Mr Tyrwhitt called Mr Johns and told him Dr Brixel had completed his investigation and that he had asked Dr Brixel to come and report to them both. Mr Johns said Dr Brixel gave a verbal report and that his memory of Dr Brixel's report was unequivocally that the payment had been made for a proper purpose of the company and for the purpose of setting up a global procurement function, and he was satisfied. Mr Johns said after the meeting he asked Mr Tyrwhitt if he was satisfied with how the investigation had been carried out and he said he was totally satisfied. Mr Tyrwhitt stated he was not happy that the appellant had not done anything to actually implement the global procurement function at the time, and that he was going to take it away from the appellant and employ someone to do that job. Mr Johns said the name of the person employed to do the job was Mr Tony White.

[32]

l Mr Anthony Wallace Young

Mr Young was a partner of KPMG, which was the lead auditor for LHL for the financial year ending on 30 June 2011. In the course of that audit, Mr Young said he recalled issues relating to the recoverability of the amount that was said to be owed by NHAI.
Mr Young was referred to a file note by Jonathan Wood, a member of the KPMG audit team that reported to Mr Young. The note was dated 13 February 2011 and concerned the recovery of the NHAI Claims. Mr Young was asked to provide his understanding of the statement in the note that "based on the above, the amount was not considered to be supportable by management". He said that meant that in LHL's management's view, and as agreed by KPMG, it was appropriate to raise a provision against the receivable on the basis it may not be recovered either in part or full. He stated that whether the amount was provided for or written off did not have an impact on the profit and loss statement.
Mr Young agreed the profit of $200 million recorded as the "Sale of India" was the most significant component of profit listed under "Composition of earnings" in the KPMG report dated 5 August 2011.
Mr Young stated he understood that if the NHAI claims were written off there would be a requirement for Leighton to infuse $20 million into Leighton Welspun. He stated that in August 2011 his understanding was that LHL had been advised by Welspun that the infusion requirement was going to be waived and they would not have to infuse the $20 million. He said he understood it was initially an oral agreement but it would ultimately be in writing. He said he did not recall seeing the agreement in writing. Mr Young stated that the obligation to infuse was a material issue and he would not have signed off on the accounts as lead auditor if there were material outstanding issues that still required resolution.
In cross-examination, Mr Young stated he worked with the appellant over the course of numerous audits at LHL. He stated that when the appellant came across to LHL, he made a change that KPMG was invited to sit through the entirety of the audit committee meetings. Mr Young stated he never received any resistance from the appellant in relation to providing access to the accounts of LHL and felt he could rely on the appellant to ensure he received the information he needed.

[33]

m Mr Bruce Alwin Munro

Mr Munro was an engineer who worked for Leighton Contractors from about 1979 to 1982, other companies for a few years and then at Thiess from February 1986 to June 2015. From August 2011 to May 2015 he was the Managing Director of Thiess.
Mr Munro confirmed the structure of the Leighton Group during 2010 to 2013 was one in which a number of operating companies would compete with each other. Some change was starting to appear between 2010 and 2013, insofar as there was an effort to integrate various parts of the Group, in relation to an attempt to get some sort of consolidation in procurement.
Mr Munro confirmed that Thiess had an interest in the Pakri Barwadih coal mine in India. He said Thiess spent a lot of time and effort pursuing the contract which eventuated. He stated he did not know if the mine eventuated, because Thiess and the client had a falling out and they cancelled the bond and it ended up in court.
Mr Munro said that Thiess appointed a Central Procurement Manager in 2010 who reported to the Chief Executive Officer of Thiess. The Central Procurement Manager's job was to start to bring more structure into procurement to trim costs for repetitious items. Mr Munro stated that LHL had some role in procuring goods and services for Thiess, including heavy earthmoving equipment and trucks. He said LHL also had responsibility for insurance and financial matters within the Group. He said travel became centralised in 2011 and fuel, explosives, vehicle purchases, IT and computer software became more centralised. He said Mr Tony White was appointed as the Procurement Manager for the whole Group.
Mr Munro, referring to the Group Business Plan 2012-2014, confirmed that as at August 2011 the three costs savings initiatives in terms of procurement were travel, human resources and information communications technology. He stated that as at August 2011 he was not aware of any other costs savings initiatives.
Mr Munro stated that Thiess sourced steel from a number of different companies. He said the main factors in sourcing steel were timeliness, quality and cost of freight. He said he was not aware of LHL entering into a centralised procurement agreement, a bulk buying agreement or a preferential pricing agreement in respect of steel. He stated he would have expected to have heard about it. He also stated he did not have a recollection of discussing the possibility of procuring steel with LHL. He said he had not heard of Asian Global or Mr Khemka and was not aware of Thiess ever directing or inviting LHL to source steel through Asian Global.

[34]

n Mr Glenn Michael Palin

Mr Palin was the Managing Director or the Chief Executive Officer of John Holland Group from 2009 to 2016.
Mr Palin stated that until 1 August 2013, John Holland was entirely responsible for its own procurement which was primarily done at a project level. He said from 2009 to 2011 John Holland did not have a Procurement Manager. He said between 2011 and August 2013 there were some initiatives to look at centralised procurement arrangements in John Holland and across the Group.
Mr Palin stated that in 2011 there were a number of business improvement initiatives with LHL, and one of those was to examine whether centralised purchasing right across the Group would add benefits to the Group's outcomes. He said the types of goods and services which were being considered were things like fuel, explosives, tyres and other indirect services which might be utilised in construction. He stated he was not aware of steel being part of what was envisaged at that time.
In relation to procuring steel Mr Palin stated it was done at project level because it could be highly technical in terms of the manufacturing to suit the particular project although he said some projects like rail used more standardised steel.
Mr Palin stated that during the period between the end of 2010 and 1 August 2013, LHL did not procure steel for the John Holland Group and he was not aware that LHL had entered into a centralised procurement agreement, a bulk buying agreement or a preferential pricing agreement in respect of steel, and if LHL had entered into any such agreement Mr Palin would have expected to have heard about it.
Mr Palin stated in the period ended 1 August 2013 he had not heard of Asian Global or Mr Khemka.
In cross-examination, Mr Palin agreed that after Mr King left LHL there was a notion of LHL transitioning to become a strategic management company. He said there would be no problem with a Project Manager liaising with someone at LHL to see if LHL could get a better deal in relation to sourcing steel. However, he said it would be unlikely that the Managing Director would not hear of such an arrangement.

[35]

o Mr Anthony James White

Mr White worked with Leighton Contractors from about June 2009 as the Strategic Procurement Manager. From early 2012 he began working as Head of Procurement for LHL, remaining in that position until around August 2014. Prior to 2009, he worked as Chief Procurement Officer for Qantas for three years.
Mr White said that during his time with Leighton Contractors, he did have dealings with Thiess and John Holland to try to look for synergies. He stated that they, as a group, banded together and ran a process to tender for fuel supply across the three companies.
Mr White stated that in 2012 the appellant asked him to perform the Procurement Manager role at LHL to deliver cost reductions and supplier improvements.
Mr White was referred to the email from Dr Brixel to the appellant to which I have referred at [125] above. He stated that Dr Brixel emailed a Value Generation Program to him on 17 February 2012. He said that he was not able to generate any value out of the buy and sell agreement. He said that prior to receiving the 17 February 2012 email, he had not spoken to the appellant about obtaining steel from Welspun, nor had the buy and sell agreement with Asian Global been brought to his attention.
Mr White stated that in or around February 2012, although he had started in his new role he was still performing his other role at Leighton Contractors. He said there were a lot of other initiatives that took his attention, so progressing the one with Asian Global was not a priority. He said the appellant's instruction was for Mr White to go to Welspun to try and find projects to use Welspun product, particularly pipe product.
Mr White stated he did not communicate with any of the Managing Directors of the operating companies in order to make them use the Asian Global agreement, but he did contact them to find out which projects would be suitable for the Welspun product. He stated he travelled with the appellant to India in March 2012 to meet with key commercial people from Welspun and to discuss how they would find opportunities to use their pipeline products in the projects.
Mr White stated he was not aware of any Leighton companies making use of the Welspun pipes. He said this was for a variety of reasons. He stated Welspun was not offering prices that were better than the retail price, and it was not the case that Welspun was offering delivery that might have been quicker than another supplier because generally, Welspun's delivery windows were longer, particularly than certain Italian providers.

[36]

p Mr Norman John Pack

Mr Pack was employed by LHL between February and August 2011 as the General Manager of Finance. He said that in that role he was tasked with discrete tasks in respect of a review of the overheads of the Leighton Group. He stated he could not recall the specific process that he went through with people to determine which cost areas could be benefitted by an aggregation but he thought it would have been through a series of discussions. He was referred to a set of PowerPoint slides headed "Cost Efficiency Review" emailed to him on 25 March 2011. He stated that during his time at LHL the review into cost savings was in the early stages, and he could not recall the four broad work streams within the cost efficiency review commencing.
Mr Pack stated that in his time at LHL, he was not asked by anyone about achieving cost saving as an initiative in respect of steel or steel products.
In cross-examination, Mr Pack said he undertook a cost efficiency review (referred to as CER). He was referred to the PowerPoint slides and said the slides appeared to be prepared with Ernst & Young's assistance.
In relation to the statement in the Cost Efficiency Review slides that one work stream would deliver on potential "quick wins" across the Group in areas such as insurance, travel and recruitment, Mr Pack stated that "quick wins" were initiatives that could be quickly identified and implemented and would help gain support for a broader Cost Efficiency Review. Mr Pack said these would achieve both a financial benefit and an engagement benefit. He was referred to various other parts of the CER slides. He was also referred to the second work stream, which was "Accelerate existing strategic sourcing initiatives in BUs [business units, meaning operating companies] by integrating them into a broader procurement transformation". He agreed that referred to sharing a procurement strategy that was effective in one operating company with another operating company.
He was also referred to the third work stream, which was "Establish shared services for activities within Finance, HR, IT, possibly Procurement, Real Estate, Commercial Affairs, Legal". He stated that referred to transactional type activities which were easy to amalgamate.
Mr Pack was also referred to the statement in the CER slides which forecast a materially lower performance in the 2011 financial year which was attributed to, among other things, "higher input costs", which he explained were the costs going into the production of whatever the organisation was producing, and would include raw materials like concrete, glass and steel.

[37]

q Mr Colin Andrew Moffitt

Mr Moffitt was the ASIC investigator who had carriage of the investigation into the appellant and Mr Waugh. He stated that he made some efforts to contact Ms Chatterjee and Mr Tyrwhitt but neither responded to the emails he sent. He said he did not attempt to contact Mr Khemka, Mr Goenka or Mr Umrigar, who he understood to be living outside of Australia. He said if they were living in Australia he would have provided them with notices to obtain information.
In cross-examination, he confirmed that he tried to contact Mr Tyrwhitt using a web inquiry form. He said he sought the identity of Mr Tyrwhitt's personal assistant because he thought she would know his contact details but he could not get in touch with her. He conceded that he did not put that information in his statement dated 10 August 2018. He also confirmed that he did not ask other people who had worked with Mr Tyrwhitt and who were interviewed by ASIC for his contact information. He confirmed he did not call any phone numbers associated with Mr Tyrwhitt and accepted it was not the case that Mr Tyrwhitt was in hiding.
Mr Moffitt confirmed he did not try to contact Ms Chatterjee through LinkedIn nor did he try to call her. He again stated he did not attempt to contact Mr Goenka, Mr Umrigar or Mr Khemka and confirmed he did not seek approval to contact any of them.
Mr Moffitt confirmed he did not obtain statements from the Managing Directors of the offshore operating companies within the Leighton Group.
Mr Moffitt confirmed that at the time he asked the Australian based operating companies about centralised procurement of steel, he did not realise there was a difference between centralised procurement and strategic procurement. He acknowledged he did not show Mr Laslett and Mr Munro the buy and sell agreement when he took their statements and could not recall if he showed it to Mr Palin.
Mr Moffitt confirmed the only Procurement Officer he spoke to was Mr White.

[38]

The appeal

Ground 1 of the grounds of appeal asserts that the verdict on each count was unreasonable. It is appropriate to deal with the other grounds relied upon prior to dealing with ground 1.

[39]

Ground 2 - The trial judge erred in admitting evidence on the viability of centralised procurement of steel

As will be seen from the outline of evidence above, a great deal of evidence was directed to the feasibility of centralising the procurement of steel for the Leighton operating companies in LHL. The primary judge in a ruling on this matter on 25 October 2018 held that such evidence was admissible.

[40]

a The judgment on admissibility

The trial judge noted the argument by senior counsel for the appellant that the evidence relating to centralised procurement was irrelevant, because the buy and sell agreement was not a centralised steel procurement agreement but an agreement to secure a price advantage and preferential treatment for the Leighton companies in the prospective acquisition of steel and steel pipes from Asian Global. He also noted the submission that the evidence of the witnesses was opinion evidence which did not fall within the exceptions to s 79 of the Evidence Act 1995 (NSW). He further noted the argument that if admissible, the probative value of the evidence was outweighed by the danger of unfair prejudice.
The trial judge rejected each of these arguments. In relation to the issue of relevance he made the following remarks: "The first question is whether that evidence is relevant, given the submission on behalf of both accused, that the agreement was not in fact to acquire steel in a centralised fashion from Asian Global and 'its contacts', but an agreement to give Leighton and/or its subsidiaries preferred status as potential customers in relation to levels of supply, price benefit, or 'preferred and commercially beneficial pricing', treating the individuals of the group on a collective basis, and ensuring supply and time frames faster than market norms. I note that the Crown does not intend to run the prosecution case by establishing what the actual purpose or intent of the agreement was. It seeks to establish that the agreement was substantially false, was never intended to provide a centralised steel supply, or a preferred customer status, or whatever the correct characterisation of the agreement is, to be taken by the jury. Whatever is the correct character, it is plain the agreement revolves around the actual or potential supply of steel and steel pipes to the Leighton Group by or under the auspices of Asian Global, or the companies controlled by Mr Goenka. In the event, the question of what the agreement sets out to do will be a question for the jury. … The Crown puts its case that whatever the characterisation, the agreement is false, except as to the parties and the execution. The Crown submits that if the two predominant interpretations are considered, namely a centralised procurement arrangement, or a preferred customer status, neither such arrangement is commercially feasible or viable, and therefore the jury would conclude that the agreement was false. The argument is that there appears to be no sound commercial basis for entering into an arrangement of either character, given the difficulties of sourcing and transporting different grades of steel products and steel pipes to various locations around the world, where the relevant projects require that material. It is not necessary to conclusively resolve the construction of the Agreement, as there are arguments which may be advanced both ways. Accepting the state of affairs, I am of the opinion that the subject matter of the portions of the statements relating to centralised steel acquisition may become directly relevant if the jury accepts the Agreement is a centralised steel acquisition supply arrangement. Even if the jury does not arrive at that conclusion, the evidence is still relevant to determine the commercial viability, and that is relevant to whether the jury is prepared to conclude that the agreement was a false preferred customer arrangement for the supply of steel from Asian Global or its sources."

[41]

(i) The appellant

In written submissions filed on behalf of the appellant, it was put that evidence on the non-viability of centralised procurement of steel "was not relevant and essentially a straw man". It was submitted that the trial judge erred in admitting the evidence for the following reasons: (i) The buy and sell agreement did not purport to be a centralised procurement agreement, nor was there any evidence or submission that it was. The trial judge erroneously concluded that the buy and sell agreement had as its underpinning or objective the centralised supply of steel. (ii) In those circumstances the appellant was forced to meet a straw man case. Where centralised procurement was a technical term and none of the Crown, the appellant nor his co-accused asserted that the agreement concerned centralised procurement, the bare possibility that the jury might come up with their own hypothesis independent of the evidence and arguments as to what the agreement purported to be was a spurious basis on which to allow the Crown to lead technical evidence and effectively set up a straw man. (iii) The basis for expert opinions had not been established. The evidence was opinion evidence and that the witnesses had no prior knowledge of the buy and sell agreement and opined that centralised procurement was not viable for Leighton Holdings based on their knowledge and experience. The evidence did not fall within the exception to the inadmissibility of opinion evidence in s 79 of the Evidence Act.
It was also submitted that although the evidence was largely able to be neutralised by establishing the buy and sell agreement did not purport to be a centralised procurement agreement and that some persons in LHL were in favour of centralised procurement, this did not render it probative or fair. It was described in the submissions as an "irrelevant and prejudicial distraction".
At the hearing, senior counsel for the appellant referred to the judgment of the trial judge on the issue. He submitted that what the Crown succeeded in doing was to lead evidence of a centralised procurement or acquisition regime, and have general managers give evidence of whether or not it could occur and whether it was feasible. He referred in particular to the evidence given by Mr Sasse on this issue to which I have referred at [209]-[210] above, describing him as an industrial relations man. He referred to the evidence which I have set out at [210] above to the effect that steel procurement was a very complicated issue and his subsequent explanation of what aggregation meant. He submitted this evidence, which he said was typical, was a combination of irrelevant opinion evidence and speculation. He referred to the extract from his cross-examination which I have set out at [216] above, stating that it was an example of general managers commenting on the viability of an agreement which was not for them to comment on, and doing so on a mistaken assumption of what the agreement meant. He submitted that the evidence was a different nature from that considered in the cases relied upon by the trial judge, Bank of Valletta PLC v National Crime Authority (1999) 90 FCR 565; [1999] FCA 1099 and La Trobe Capital & Mortgage Limited v Hay Property Consultants Pty Ltd (2011) 190 FCR 299; [2011] FCAFC 4.

[42]

(ii) The Crown

In her written submissions, the Crown submitted that the trial judge's ruling as to relevance disclosed no error and that the impugned evidence was wholly relevant to the falsity of the buy and sell agreement, in circumstances where the proper characterisation of the buy and sell agreement was a matter for the jury.
She submitted that the trial judge's ruling not to exercise the discretion in s 135 or s 137 to exclude the evidence was not erroneous, and that whilst the evidence was prejudicial to the appellant, it was not unfairly prejudicial.
The Crown also submitted that the trial judge's conclusion that the impugned evidence was not statements of opinion but statements of fact was correct, and the evidence did not involve inferences but rather facts based on the witnesses' knowledge and experience of the operating companies. It was submitted that this conclusion was supported by the cases cited by the trial judge to which I have referred at [327] above.
At the hearing, the Crown submitted there was evidence at the trial about different procurement strategies and methods, and that terminology was often used interchangeably, referring either to a centralised procurement of steel program or other forms of procurement of steel including strategic procurement. She submitted the evidence was relevant because within the context of the operational structure of the Leighton Group, the particular problems of trying to implement such schemes were raised and the witnesses gave evidence about it. The Crown pointed to the evidence of Mr Wild to which I have referred at [139]-[140] above, which she submitted demonstrated this point.
The Crown also submitted the evidence was relevant in demonstrating that because of the caution which was being exercised in the introduction of different purchasing regimes, moving to something which dealt directly with the operational cost of steel, which was a fundamental matter for the operating companies where they were competing against each other, had to be developed over time. She contrasted that with the appellant's contention that it could be unilaterally implemented by the buy and sell agreement signed in December 2011.

[43]

Consideration

The first ground of complaint is that the evidence was irrelevant. The question is whether the evidence, if accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings: Evidence Act s 55. The fact in issue in the present case to which the evidence was directed was whether the payment instruction, so far as it referred to marketing and advisory services, was false and the buy and sell agreement was a sham.
The Crown in that context sought to lead evidence of the fact that the operating companies operated independently and competed with each other to demonstrate that the buy and sell agreement had no commercial benefit to any company in the Leighton Group, which it was said supported the inference that the payment was not made for the purpose stated and the agreement was a sham. It seems to me that evidence of that nature was relevant to support the inference sought to be drawn.
Thus for example, the evidence of Mr Wild that he was not aware of any initiative to set up a centralised procurement regime for steel or being a party to any discussion concerning the engagement of an external agent to seek steel is relevant to that fact. Mr Wild was the Deputy Chief Executive Officer of LHL and in my opinion was entitled to give that evidence. Further, the evidence of the Chief Executive Officers of the operating companies on these issues was relevant. Thus Mr Munro, the Managing Director of Thiess, gave evidence that he was not aware of LHL entering into a centralised procurement agreement, a bulk buying agreement or a preferential pricing agreement in respect of steel (see [255] above; see also the evidence of Mr Palin to which I have referred at [264]-[265] above and the evidence of Mr Laslett to which I have referred at [226] above).
It was argued that the material was irrelevant because the evidence was directed to what was described as centralised procurement rather than strategic procurement. In dealing with the question of relevance I do not think that this is a distinction which should be drawn. The buy and sell agreement envisaged LHL purchasing steel on behalf of its subsidiaries (see cl 1). In that context, it involved acquisition being done through LHL irrespective of whether the label of centralised procurement or strategic procurement was placed on the agreement.

[44]

Ground 3 - The trial judge erred in rejecting the appellant's tender of the Global Business Overview presentation

The document the subject of this ground was a document entitled "Leighton Holdings - Global Business Overview". It was dated June 2011 and comprised a series of slides. Slide 10 of the document, headed "Leighton Group Structure Rationale - historic" with a sub-heading "Pre 2011", sets out the Leighton business model as described by Mr Johns at [13] above.
Slide 11 of the document refers to procurement and makes the comment "Potential for centralised approach to materials/commodities (steel, concrete, diesel …)". It is not necessary to otherwise go through the document in detail, but it does demonstrate that the person who prepared the slides had a detailed knowledge of Leighton's business model and financial position which would be difficult, if not impossible, to obtain from publicly available documents.
Evidence on the voir dire indicated that the document was provided to the solicitors for LHL by PwC Strategy&, formerly known as Booz & Company, a consulting firm used by Leighton at the time.
In his judgment delivered on 27 November 2018 the trial judge rejected the tender of the document.
The trial judge, in rejecting the document, stated that s 48(1) of the Evidence Act left untouched the need to establish authenticity. He relied in that regard on the reasoning of Bryson J (as his Honour then was) in National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309 at 314; [1999] NSWSC 539 ("Rusu").
The trial judge stated he was prepared to accept that an inference might be drawn that the document "purported to be a presentation to inform the Board of Leighton Holdings" and was prima facie therefore a business record of LHL. He stated the next question was whether the requirements of s 69 of the Evidence Act were made out, namely, did the document contain a representation made by a person who had or might reasonably be supposed to have had personal knowledge of an asserted fact.
The trial judge rejected the proposition that the tender was for a non-hearsay purpose. He stated the purpose identified was "that there were discussions", which was a hearsay purpose. Referring to Lithgow City Council v Jackson (2011) 244 CLR 352; [2011] HCA 36, he stated that to comply with s 69 it must be shown that the representations were made by a person having personal knowledge of the asserted fact.

[45]

(i) The appellant

In written submissions filed on behalf of the appellant, it was contended the document was not tendered for a hearsay purpose. It was emphasised that it was not tendered to prove the truth of the assertion that there was potential for a centralised approach to steel but simply for the fact that this had been stated in a draft Booz document at the relevant time.
It was also submitted the trial judge was incorrect in holding that the document did not fall within s 69 of the Evidence Act. It was submitted that the assertion itself proved that the author had personal knowledge of the fact that someone had made a statement that centralised procurement should be considered. It was also contended that the trial judge erred in applying Rusu to the effect that there was a need to prove that a tendered document was what it purported to be and that could not be done by merely tendering the document in the absence of any evidence establishing what the document was. The submissions pointed to the fact that Rusu had been held to be plainly wrong: see Australian Competition and Consumer Commission v Air New Zealand (No 1) (2012) 207 FCR 448; [2012] FCA 1355. It was also submitted that an examination of the document clearly established its authenticity.
In that context, the submissions also pointed to s 183 of the Evidence Act, which provides that for the purpose of determining a question about a document for the purpose of applying a provision of the Act, the court may examine the document and draw any reasonable inference from it and from other matters from which inference may properly be drawn.
It was also submitted that the effect of the Crown's submissions in closing was to suggest that there was no evidence that anyone connected with LHL was considering centralised procurement of steel during the relevant period. It was submitted this was unfair in circumstances in which the Crown had successfully opposed the tender of evidence which had the capacity to rationally affect this assessment.
At the hearing, senior counsel for the appellant submitted there was no hearsay problem as no one was intending to assert that people "at a high level are talking about a centralisation to procure steel", and the non-hearsay purpose was that the issue was a subject of discussion inside Leighton.

[46]

(ii) The Crown

In written submissions, the Crown submitted that the trial judge was correct in rejecting the proposition that the document was tendered for a non-hearsay purpose and that the document did not fall within the business records exception. She submitted that the key point which the trial judge drew from Lithgow City Council v Jackson "concerned the ambiguity in the impugned representation, which was such that it was not relevant".
The Crown submitted that Rusu had not been held to be wrong at appellate level and the trial judge's reference to it was a relatively minor aspect of the impugned judgment. She also submitted that s 183 of the Evidence Act was not sufficient to overcome the issues with the provenance of the document.
The Crown submitted that whilst authenticity was one factor in the trial judge's decision, the determinative findings were that the document was a working document for the consulting firm Booz, that there was no evidence it was raised with or considered by LHL, that it appeared to be a draft and that it contradicted information before the Board.
At the hearing, the Crown submitted that for the document to be relevant it needed to be identified that it came from LHL and that the particular representation which was relied upon was made by an appropriate person with the knowledge of the representation within LHL. She submitted it was not known whether PwC (Booz) had a role in drafting any of the representations.

[47]

Consideration

The first question is to determine the relevance of the document to the facts in issue: Australian Competition and Consumer Commission v Air New Zealand (No 1) at 92, approved by the Full Court of the Federal Court in Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212 at [64].
The appellant submitted it was tendered for the mere fact that the document stated there was potential for a centralised approach to the procurement of steel, and not to prove the truth of the asserted fact that there was such potential. I should add that it can be inferred from the document itself that the issue was considered by persons working within Booz Consulting who, as Mr Pack stated in his evidence, were involved in the cost efficiency review (see [313] above).
The trial judge concluded that the purpose of the tender related to establishing the truth of the proposition that there were discussions, which he described as a hearsay purpose. With respect to his Honour, to the extent that was what was sought to be established it did not involve reliance on the truth of any representation in the document which would involve consideration of the requirements of s 69 of the Evidence Act as distinct from drawing an inference available to be drawn from the document itself. It was a matter for the jury as to whether it would draw such an inference and the extent to which it would place weight on the inference if drawn.
As I have stated, the trial judge also concluded, relying on the decision in Rusu, that s 48(1) of the Evidence Act merely prescribes the means of adducing evidence of the contents of a document and leaves untouched questions of authenticity. It is not clear to the extent that proposition influenced the primary judge, having regard to his subsequent conclusion that the document purported to be a presentation to inform the Board of LHL and that the proposed document was a working document of a person at the consultancy firm Booz.
Rusu, to the extent it states the authenticity of a document could not be proved by consideration of the form or content of the document, has received some judicial support. In Daw v Toyworld (NSW) Pty Ltd [2001] NSWCA 25, Heydon JA, with whom Priestley JA and Sheller JA agreed, stated at [46] without elaboration that "The Evidence Act 1995 does not permit documents to authenticate themselves save in limited circumstances", citing Rusu: see also Australian Securities and Investments Commission v Rich [2005] NSWSC 417; 216 ALR 320 at [101]-[104]. However, the decision has been subjected to considerable criticism: see V Bell, "Documentary Evidence under the Evidence Act 1995 (NSW)" (2001) 5(1) The Judicial Review 1.

[48]

Ground 4 - The jury directions on count 1 were affected by errors of law including:

[49]

(a) That the jury had to be unanimous as to the falsity of only one of the two stated purposes in the Payment Instruction

[50]

a Background to ground 4(a)

The background to the first of these complaints was a contention by the appellant that the Crown particularised and opened its case on the basis that the purposes of both payments set out in the payment instruction were false. The particulars were in the following terms: "with respect to count 1, it is alleged that the purpose of the two payments totalling $15,000,000 (USD) stated in the payment instruction, namely 'marketing and advisory services' and 'a loan' were false … … … the purpose of the two payments totalling $15,000,000 (USD) stated in the payment instruction, namely 'marketing and advisory services' and 'a loan', were false, in that, the payments were not made for the stipulated purposes".
The appellant's written submissions also refer to the Crown's opening on this issue in which the following comments were made: "So far as the first count is concerned, in order for you to be satisfied that Mr Gregg's conduct in sending the payment instruction that resulted in the falsification of books relating to affairs of Leighton Holdings Ltd, you must be satisfied that the payments were not made for the stipulated purposes - which you may recall, and you'll see the document in due course - were for marketing and advisory services as for $12.5 million and as a loan for $2.5 million and, accordingly, that those stipulated purposes were false."
The appellant pointed out that although the Crown eschewed the obligation to prove beyond reasonable doubt that the payment was for the waiver, this was in fact the Crown case. The appellant pointed to the following passage from the Crown's closing address: "You can, the Crown would say, quite properly, having a look at all the evidence, draw your own conclusions. And one that you may draw, whilst it's not known for sure, is that this amount was paid so as to buy out that obligation. You might think, 'Why else would Welspun, for instance, not be seeking its 35 crore?'"
Notwithstanding, the Crown ultimately closed its case in the following manner: "So the Crown must prove - in respect of count 1 - that either or both of the stipulated purposes of that payment instruction - that is, for [marketing] and advisory services as to $12,500,000, or for a loan of $2,500,000 was false. Fairly simple proposition. The Crown has to prove either or both. But you as a jury must be unanimous, I expect his Honour will tell you, as to which or both of those that you agree to make, make it clear. For example, if five of you felt or came to the conclusion beyond reasonable doubt that the stipulated purpose of the loan was false. And second if you came to the conclusion the $12.5M aspect for advisory marketing services was false, between the 12 of you it might be said, yes we all agree it's false. But only five of you agree that it's false in one respect, and seven of you agree that it's false in another respect and therefore you won't have been unanimous. So what the law requires is that [you're] unanimous as to either [one], either the loan being a [sic] false or advisory marketing being false, and obviously you can be unanimous as well that they're both false, but the obligation is for the Crown to prove that either one of them is false, or that both of them are false but you have to unanimous most [sic] all 12 of you as to one or the other, and I expect they'll [sic] be some directions about that."

[51]

(i) The appellant

The appellant's submission on this ground raised two issues. First, putting a case for the jury which was outside the case particularised was unfair, and second, in particularising two alternatives it was bad for duplicity.
So far as the first issue is concerned, the appellant in his written submissions stated that the charges had been treated as a single act involving both items on the payment instruction sheet. It was submitted that at the trial, the evidence from Mr Johns and Mr White established that a procurement agreement like the buy and sell agreement was consistent with marketing and advisory services. He submitted the loan did not feature to the same extent in the evidence at all and no evidence was sought by the appellant from any of the Crown witnesses in relation to the range of practices in respect of loan agreements.
In regard to the second issue, in the appellant's written submission it was also contended that putting falsity in the alternative rendered the charge duplicitous. It was submitted that the trial judge was incorrect in concluding that the offence charged was a course of conduct. It was submitted that the fact that unanimity from the jury was required as to either or both of the alleged payment instructions demonstrated the latent duplicity. It was submitted the fact that in these circumstances Chiro v The Queen (2017) 260 CLR 425; [2017] HCA 37 dictated the appellant was to be sentenced on the more favourable of the possible alternatives demonstrated the duplicity.
At the hearing, senior counsel for the appellant submitted there was a question of unfairness, but that there was also a deeper problem. He asked rhetorically how it could be that there was an improper purpose in respect of one of the entries but not the other.
Senior counsel for the appellant referred to the provisions of s 1307(1) and the definition of "books" in the Corporations Act. He pointed out the definition of "books" includes a record of information and a document. He also pointed out that s 1307 refers to the engagement in conduct which results in the falsification of any books affecting or relating to the affairs of the company. He submitted that if the definition extends to any record (or document) however it appears, then at the outer limits of the offence it becomes not the piece of paper that is significant but the record, and the two different pieces of conduct that results in its falsification. He stated "the piece of paper is not the critical thing, the representation is".

[52]

(ii) The Crown

The Crown in its written submissions did not dispute the case was particularised, opened and closed in the manner submitted by the appellant.
The Crown submitted that the trial judge was correct in concluding that the alleged conduct was writing the payment instruction which was particularised as being false in two respects, and concluding that the charge as framed and prosecuted was not put on the basis the Crown undertook to prove two false purposes, but that all the Crown had to prove was that one of the two stated purposes was false and the appellant had ample opportunity to meet the Crown case.
The Crown submitted that while particulars provide an accused with fair notice of the case to be met, they are not however to be treated as if they were pleaded as part of the indictment: Saffron v The Queen (1988) 17 NSWLR 395. The Crown also submitted that while there may be circumstances in a particular case which made it unfair or oppressive to permit the Crown to depart from its particulars, what the Crown needs to establish in order to obtain a conviction are the essential facts alleged in the indictment, and a failure to establish a particular is not fatal: Environmental Protection Authority v Sydney Water Corporation Ltd (1997) 98 A Crim R 481.
The Crown also submitted that at no stage was it conceded that the falsity of the marketing and advisory services was not capable of being established on the evidence.
The Crown further submitted that the result of the conduct the subject of the charge was the falsification, and that could be proved by either of the false entries. She submitted the circumstances in Hannes and Montgomery v Stewart (1967) 116 CLR 220; [1967] HCA 11, the reasoning in which was approved in Walsh v Tattersall (1996) 188 CLR 77 at 91; [1996] HCA 26, were analogous.

[53]

Consideration

As is apparent from the submissions the complaint made by the appellant has two elements. First, that which the appellant described as a change in the Crown case created unfairness such to amount to a miscarriage of justice and second, the change rendered the charge duplicitous. It is convenient to deal with the complaints in that order.
As the Crown properly conceded, the case on count 1 was particularised and conducted up to the Crown's closing address on the basis that it was necessary for the Crown to establish beyond reasonable doubt that the purpose of both payments referred to in the payment instruction were false and that the appellant was reckless in giving the instruction.
It is correct as the Crown pointed out that particulars are not to be treated as part of the indictment. In Saffron Hunt AJA pointed out (at 446) that an indictment is not invalid because it fails to give all such particulars as may be required to enable the accused to know the case he or she is required to meet. He also emphasised (at 447) that an entitlement to particulars in a criminal case are the same as in a civil case. He made the following comments at 448: "There is no logical reason why the Crown should not be entitled in the appropriate case to lead evidence which is within the charge pleaded in the indictment but outside its particulars, in accordance with the principles discussed by the High Court in Dare v Pulham. It would in every case be advisable that the particulars be amended, but the absence of an amendment is not fatal. Of course, such departures by the Crown from its particulars should not be encouraged, and it will be more difficult for the Crown in a criminal case to persuade the trial judge that the accused has not been prejudiced by its departure from its particulars than it is for the plaintiff in a civil case in relation to his opponent. Indeed, normally the Crown would not be permitted to go outside its particulars for that reason. But the principle is the same, however different its application may be in the particular case."
The Crown also placed reliance on Environmental Protection Authority v Sydney Water Corporation Limited. In that case Gleeson CJ, with whom the other members of the Court agreed, made the following comments (at 484): "There may be circumstances arising out of the nature of the evidence in a particular case, or the manner in which the case has been conducted, which will make it unfair or oppressive to an accused person to permit the Crown to depart from its particulars. Subject to that qualification, however, what the Crown needs to establish in order to obtain a conviction are the essential facts alleged in the indictment, or the summons. Failure to establish a particular is not fatal (VHP (unreported, Court of Criminal Appeal, NSW, No 60733 of 1996, 7 July 1997))."

[54]

Ground 4 - The jury directions on count 1 were affected by errors of law including:

[55]

(b) That the jury only needed to be satisfied that the appellant was reckless as to whether his conduct would result in the falsification of company books

[56]

a Background to ground 4(b)

The requisite mental element for an offence under s 1307 of the Corporations Act is recklessness: Criminal Code Act 1995 (Cth) s 5.6(2). Recklessness is relevantly defined in s 5.4 of the Criminal Code in the following terms: "5.4 Recklessness (1) A person is reckless with respect to a circumstance if: (a) he or she is aware of a substantial risk that the circumstance exists or will exist; and (b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk. (2) A person is reckless with respect to a result if: (a) he or she is aware of a substantial risk that the result will occur; and (b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk. (3) The question whether taking a risk is unjustifiable is one of fact. (4) If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element."
The trial judge gave a written direction to the jury on the issue: "Reckless means: if a person is aware of a substantial risk that a result will occur (in this case the alleged result is the falsification of company books) and having regard to the circumstances known to him it is unjustifiable to take the risk, the person in law is reckless. The Crown can also prove that a person is reckless if he knows or intends that his conduct will result in the falsification of company books."
The trial judge also gave the following directions in his summing-up: "The fifth and final question in relation to count number 1, ladies and gentlemen, is as follows, 'Was the accused reckless as to whether his conduct would result in the falsification of books affecting' and I will leave out some words 'the affairs of Leighton Holdings Ltd?' The Crown position is set out at the bottom of page 7 and over the page it follows the accused was reckless and that he was aware that there was a substantial risk that the payments were not for the stated purposes and that signing the payment instruction and stating those purposes, would result in the falsification of Leighton Holdings' books. In the circumstances known to him or the accused it was unjustifiable for him to take that risk. The defence position in relation to that question is as follows: at the time he requested the payment Mr Gregg understood the purposes of the payment to be as recorded by him, in other words, he inserted the true purposes. He did not know nor was he aware of any substantial risk that the purposes of the payment instruction were not the purposes of the payment. The legal meaning, ladies and gentlemen, of the word 'reckless', which is italicised and in bold, in relation to question 5 is thereunder set out. Reckless means if a person is aware of a substantial risk that a result will occur - in this case the result the Crown argues for is the falsification of company books - and having regard to the circumstances known to him. In other words, to deal with this issue you have to grapple with what he knew at the time and the circumstances which confronted him. If it is unjustifiable to take the risk, the person in law is reckless. The Crown can also prove that a person is reckless if he knows or intends that his conduct will result in the falsification of books. You can prove the element of recklessness in one of two ways, by proving an awareness of a substantial risk and also combined with that, that having regard to the circumstances known to him, it was unjustifiable for him to take the risk. That is one way. Or if you are satisfied beyond a reasonable doubt that he knew or intended his conduct would result in the falsification of company books, that will also amount to recklessness in law. What then is knowledge? It is there set out and it means a person's awareness that a result exists or will exist in the ordinary course of events. Intention, ladies and gentlemen, means a person's aim or objective to bring about a result or an awareness that the result will occur in the ordinary course of events. I pause there to say, ladies and gentlemen, that to expand a little bit, and perhaps it is not needed in many respects because the PowerPoint in front of you talks a little bit about intention, it is one of those things where lawyers always put an overlay on words which often carry their normal meanings, but it is helpful sometimes."

[57]

(i) The appellant

The appellant submitted the trial judge erred in directing the jury that it needed only to be satisfied that the appellant was reckless as to whether the conduct would result in the falsification of books affecting or relating to the affairs of LHL, and in so directing erred in effectively leaving to the jury something less than statutory recklessness.
It was submitted that the directions given were likely to confuse the jury as to what they were being asked to find because on the Crown case, the appellant either intended to record the false purposes for the payment or he did not, and there was no room for him to be reckless as to his own state of mind.
It was also submitted that the trial judge's directions, to which I have referred at [417] above, left the case to the jury on the basis that the appellant was reckless because no services and no loan agreement ultimately eventuated, as opposed to this merely being evidence tending to support his state of mind as to the purposes at the relevant time. It was submitted that provided the appellant's understanding at the time he sent the instruction was consistent with the payment instruction, he could not be reckless as to whether this would falsify the relevant book even if he was aware of a risk that a deal reflective of those purposes might not eventuate, particularly when the Crown was not alleging falsity by omission.
It was submitted that the risk identified was aggravated by the fact that the jury had been directed that they only had to be satisfied as to one of the two alleged purposes for the payment being false. It was submitted that where loan documentation was not ultimately entered into, the evidence of common practice around loan documentation was not developed, the jury was directed they only needed to be satisfied of one of the two stated purposes being false, and it was illogical to think in terms of the appellant being reckless as to his own state of mind and therefore likely the jury would give some other meaning to the word reckless, it could be seen how a jury might reason that it was impermissible for the appellant to take the risk the loan would not eventuate and proceed to a verdict on that basis.

[58]

(ii) The Crown

The Crown submitted that for this ground leave to appeal was required pursuant to r 4 of the Criminal Appeal Rules (NSW). Senior counsel for the appellant did not object to the directions at the trial.
The Crown submitted the trial judge correctly stated the statutory test for recklessness and told the jury that proof of this fault element is satisfied by proof of intention, knowledge or recklessness.

[59]

Consideration

I do not think this ground has been made out.
It was first submitted there was no basis to conclude that the appellant was reckless as to his state of mind. There is some force in this argument, but it would seem to me that it would be open to the jury to find that the appellant did not act dishonestly, but from his knowledge of the negotiations surrounding the proposal was aware there was a substantial risk that the entries did not reflect the true purpose and he was unjustified in taking that risk. As will be seen in relation to ground 1 the appellant contended that he was not a party to the negotiations (see [630] below). If the jury accepted that it would also be open for them to conclude the appellant was reckless rather than dishonest.
It was next submitted that the direction to which I have referred at [417] above invited the jury to find that the appellant was reckless because no services were provided and no loan agreement was entered into, as distinct from focussing on the appellant's state of mind at the time he gave the payment instruction. I do not think this is correct. The trial judge had given a written and oral direction on the question of recklessness which correctly focused on the appellant's state of mind. In the direction complained of the judge was explaining the manner in which the Crown sought to prove that state of mind. Significantly experienced senior counsel for the appellant made no objection to this part of the direction.
It was further contended that the position was exacerbated by the fact that the jury was directed that they only had to be satisfied that only one of the two stated purposes for the payment had to be false. I have already indicated in dealing with ground 4(a) that this constituted a miscarriage of justice having regard to how the case was particularised and conducted at the trial.

[60]

Ground 5 - Jury directions count 2

This ground asserts that the jury directions in respect of count 2 were affected by a number of errors of law.

[61]

Ground 5(a) Directions as to falsity

It is asserted in this ground that the primary judge erred in defining falsity as not requiring dishonesty or any intention to deceive or mislead, and to include falsity by omission and backdating.

[62]

a The relevant directions

As this ground of appeal and ones following it include a number of complaints about both the form and substance of the written directions I have for convenience annexed these directions to this judgment. The direction as to the meaning of "false" is contained on p 7 of the written directions.
The sentencing judge in his summing-up after reading his definition of false also gave the following direction over objection: "A document is false or purports to have been created or signed on a date on which it was not created or signed, including if it has been backdated. I pause there to say there is a distinction to be made here about the backdating issue, and I will remind you of this when I speak of [senior counsel for the accused's] submissions to you. There is, of course, a difference between backdating an agreement made on date X to purport that it was made on date X minus 10. Here the distinction, ladies and gentlemen, that is put forward by or on behalf of the defence is that the agreement actually made on date X minus 10, but it was written up or formalised on date X. Ladies and gentlemen, when I am talking to you about falsity you need to keep that argument in the forefront of your thinking."

[63]

(i) The appellant

The appellant first submitted that the Crown disavowed proving falsity by omission. It was submitted that the reference in the direction to the omission of material facts left the possibility of the jury reasoning to guilt on the basis that there was a collateral purpose in making the payments and entering into the buy and sell agreement which was not disclosed. It was submitted that no such case was put at the trial.
As I indicated, objection was taken to the portion of the summing-up complained of, and the judge added the following further direction, referring to the definition of false in the written directions: "In that definition there is reference to the omission of material facts on line 4 creating a false impression, and then two lines down, 'The statement may be false' and I leave out some words 'by the omission of material, et cetera.' That is a relevant definition of falsity but I have been asked to remind you that the Crown case does not assert a falsity on the basis of omission of material, so I wonder if you would keep that in mind, please, so far as I think in relation to both charges, both counts 1 and 2 because the definition carries over."
The appellant submitted that this did not remedy the difficulty with the original direction as it did not direct the jury they could not reason in this fashion.
It was further submitted that in stating that the definition carried over to count 2, the direction contained a further error as sham requires proof of dishonesty or an intention to deceive (referring to Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88 at [64]). It was submitted that the direction that there was no requirement to prove dishonesty or intention to deceive or mislead directly traversed that element.
It was further submitted that whilst backdating may be an indication of falsification or a sham, it was incorrect to state that a document is false if it purports to be created or signed on a date on which it was not created or signed. It was submitted that an agreement is a sham only if it is intended to have no legal effect. It was further submitted that to the extent backdating was an indicia of sham there was no evidence to suggest that anyone was misled.
It was submitted that this erroneous direction provided an easy path to guilt on count 2.

[64]

(ii) The Crown

The Crown submitted that the trial judge's direction in relation to the meaning of false was correct and was not apt to mislead the jury, given the summing-up as a whole. The Crown also submitted that when senior counsel for the appellant objected to the direction the trial judge corrected it.
The Crown accepted that the trial judge's "correction" that the definition carried over into count 2 was a misstatement of the test but submitted that the slip was immaterial and not such as to give rise to a miscarriage of justice.
The Crown accepted that as a matter of law, backdating does not mean an agreement is a sham, but submitted it was another matter altogether to submit that as a matter of law, backdating does not mean an agreement is false. It was submitted that the trial judge was dealing with a discrete issue when he was addressing the meaning of false. At the hearing, the Crown submitted that when the trial judge said the definition carried over, he was referring to the fact that in respect to both counts there was no allegation by the Crown of falsity on the basis of omission of material. The Crown submitted that the trial judge was not directing the jury that the whole of the definition he referred to under count 1 should be considered in respect of count 2.
The Crown also submitted that the supplementary direction given by his Honour concerning backdating (see [431] above) mitigated any concern about the inclusion of the words "including if it has been backdated" in the definition of false.

[65]

Consideration

The written direction in respect of falsity complained of was given in the context of the written direction on count 1. Leaving aside the reference to omissions, the direction was adequate for the purpose of count 1. This is because the written direction on that count made it clear that to find the appellant guilty, the jury had to be satisfied beyond reasonable doubt that the appellant was reckless (see pp 7-9 of the written direction). The inclusion of the last section of the written direction that "a document is false if it purports to have been created or signed on a date on which it was not created or signed, including if it was backdated" has no relevance to count 1.
The trial judge corrected his reference to omission (see [433] above) and in these circumstances, taking his written direction and the summing-up as a whole into account, the direction so far as it related to count 1 was in my opinion unexceptional.
However, the real difficulty is that the direction was expressly extended to count 2. That part of the direction of falsity, "including if it has been backdated", can only relate to count 2. If there was any doubt about that issue it was made clear in the correcting comment by the trial judge that "the direction carries over" (see [433] above).
Although count 2 involves the same offence as count 1, conduct resulting in falsification of books, the Crown case was put solely on the basis that the buy and sell agreement was a sham. Although the trial judge did give directions on sham the incorporation of the definition of false into the direction on count 2, particularly the reference to backdating in the last sentence, could lead the jury to conclude it was enough to convict on that count if they were satisfied that the buy and sell agreement was not executed on 1 August 2011, rather than being satisfied beyond reasonable doubt that the buy and sell agreement was one which took the form of a legally effective agreement but which the parties intended should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55 at [46] ("Equuscorp").
Further, although in his written directions on sham the trial judge stated the jury must be satisfied that the parties intended the agreement to be a sham and the other party had the same intention, the incorporation of the definition of falsity including the absence of any requirement to prove dishonesty or an intention to mislead or deceive was erroneous in circumstances where sham requires deliberate deception (see Coshott v Prentice at [64]).

[66]

Ground 5(b) - Incorrect directions in proving sham

The written direction on this issue is contained on pp 14 and 15 of the written directions.
In his summing-up referring to that written direction, the trial judge made the following remarks: "There I record, ladies and gentlemen, that a sham is a legal term which includes an agreement which has the form or appearance of a legally effective document, but is really one which the parties intend should not have its apparent or legal consequences. So has the form of a legally effective document but one which the parties intend should not have its apparent or legal consequences. A further description is something that is intended to be mistaken for something else, a spurious imitation, a counterfeit, a disguise, a false front or something that is not genuine or true. In this context, ladies and gentlemen, the Crown must prove beyond a reasonable doubt that the time the agreement was entered into both parties - and there I note Mr Gregg on behalf of Leighton Holdings and Mr Khemka on behalf of Asian Global to the agreement - intended that the agreement should not have its apparent or any legal consequences. In other words, an agreement which is not intended by either or both them to be acted upon in any way, no legal consequences. The jury must be satisfied beyond a reasonable doubt that the agreement was not genuine but a sham in the manner which I have described, and that the parties intended it to be so, that is, intended that the agreement is a sham, and were aware that the other party had that same intention. To make it absolutely plain, you must be satisfied beyond a reasonable doubt that the agreement was a sham document, that is, apparently effective but not intended to be; secondly, that the parties intended that to occur; and, thirdly, that Mr Gregg was aware that Mr Khemka and Mr Khemka was aware that Mr Gregg had the relevant intention in order to find that there is the sham document. You may, in making that determination, ladies and gentlemen, have regard to the following matters and I list them, seven in number, on p 15. (1) whether the agreement was uncommercial or lacking commercial sense; (2) whether a party to the agreement does not fulfil its obligations; (3) the apparent artificiality of the agreement; (4) any collateral or ulterior motive or purpose for the agreement, even though an improper purpose cannot be identified; (5) the backdating of the agreement; and (6) whether any value was ever obtained from the agreement. It is important to note, ladies and gentlemen, that no-one of those factors taken only [sic], for example, you decide that number 1 has been made out, but no-one of those factors taken alone is sufficient to establish that an agreement was a sham. However, you, the jury, are entitled to take these matters into account and there is a 'take' missing there, I am sorry, 'To take these matters into account' in drawing an inference as to the actual intentions of the parties at the time the agreement was entered into."

[67]

(i) The appellant

The appellant submitted that the list of factors in the written directions came largely from a list of factors which the appellant had stated did not prove sham. It was submitted that framing these factors in terms of matters the jury could take into account rather than matters that did not alone or together necessarily prove sham gave an erroneous impression.
The appellant also referred to a subsequent direction given by the trial judge following objection to the earlier direction. In that direction the trial judge asked the jury to correct the definition of sham. He made the following remarks: "The last legal matter which I need to correct takes us back to the document yesterday which I handed to you and I wonder if you would be good enough, please, to turn up p 15. In the first italicised paragraph under the numbers you see there 'No one of these factors'. I would like you to add these words and I will explain why in a moment. At the moment it reads: 'No one of these factors taken alone is sufficient to establish that the agreement was a sham.' As they say, that is partly true. The correct analysis is this: 'No one of these factors taken alone or even in combination,' so 'alone or even in combination' you should add after 'alone necessarily is sufficient,' so it now will read: 'No one of these factors taken alone or in combination is necessarily sufficient to establish that the agreement was a sham.' The reason, you may think, is self-evident because one or other of these kinds of factors may be more powerful depending on the circumstances or not and so therefore it is a quintessentially jury question as to whether there are enough factors and whether they are of sufficient character to lead to the conclusion beyond a reasonable doubt that the agreement was a sham. The point there is no single factor is enough; all the factors may not be enough. It is a matter for you to determine whether that is the case and if so, beyond reasonable doubt."
It was submitted that this direction was erroneous in that the question was not whether there were enough factors to prove sham beyond reasonable doubt, but rather whether the parties intended the agreement to have no legal effect.
It was also submitted that a sham agreement is a purported agreement lacking legal consequences by the design of both parties. In that context the appellant criticised the inclusion in the written direction of the statement the agreement should not have "its apparent or any legal consequences". It was submitted that the inclusion of "apparent consequences" had the tendency to suggest that if there was an undisclosed underlying intention on behalf of the parties to the agreement that might be sufficient to prove sham.

[68]

(ii) The Crown

The Crown in its written submissions pointed to the opening part of the direction to which I have referred at [451] above. She submitted that the direction stated that no factor taken alone was sufficient to establish sham, and that the direction specifically referred to the jury's entitlement to take those matters into account in drawing an inference as to the actual intentions of the parties at the time the agreement was entered into.
The Crown also submitted that the trial judge's correction following objection by senior counsel for the appellant in the Court below resolved any question about the accuracy of the direction.
At the hearing, the Crown submitted that although the trial judge referred to various factors, the written directions looked at in total made it quite clear that the jury was told it was entitled to take them into account in drawing an inference as to the actual intention of the parties at the time the agreement was entered into. She also stated that it was necessary in considering this question to look at the whole of the written directions and not just cherry-pick from a particular section where certain factors were identified.
The Crown rejected the suggestion that the trial judge's oral direction made the situation worse, submitting that it emphasised the jury may take into account in determining the intention of the parties any factors which may assist them and that it was not just a matter of being satisfied of one or a combination of those factors.

[69]

Consideration

In considering this issue a number of matters concerning the concept of sham require emphasis.
The first thing to note is that for an agreement to be a sham both parties must have a common intention that the agreement is not intended to create the legal rights and obligations which it gives the appearance of creating: Equuscorp at [46]; Snook v London and West Riding Investments Ltd [1967] 2 QB 786 at 802; Lewis v Condon (2013) 85 NSWLR 99; [2013] NSWCA 204 at [58]. Thus in the present case, the jury had to be satisfied beyond reasonable doubt that both LHL and Asian Global did not intend the buy and sell agreement to create the rights it purported to create, they both knew that the other had that intention and they acted dishonestly with an intent to deceive in creating the agreement.
It does not follow from the fact that the transaction the subject of the agreement may appear uncommercial or improvident or involve a breach of duty that the agreement is a sham. In Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 454-455, Lockhart J, after describing a sham as "something that is intended to be mistaken for something else or that it is not really what it purports to be … a spurious imitation, a counterfeit, a disguise or a false front" emphasised that the fact that it was entered into for an ulterior motive does not lead to the conclusion the document was a sham: see also Beaumont J at 468-469; Scott v Commissioner of Taxation (Cth) (No 2) (1966) 40 ALJR 265 at 279; Miles v Bull (1969) 1 QB 258 at 264.
It is also important to bear in mind that what is involved is deliberate deception or dishonesty: Coshott v Prentice at [64]; Lewis v Condon at [63].
It follows the appellant was correct in submitting that the matters referred to on p 15 of the written direction do not either alone or in conjunction necessarily establish sham, but rather, it must be shown that the parties subjectively and dishonestly each intended the agreement to have no legal effect.
The trial judge in his summing-up to the jury, however, emphasised that the jury needed to be satisfied that the document was intended by the parties to be a spurious imitation or counterfeit or disguise and in his correction stated "no one of these factors taken alone or in conjunction is necessarily sufficient to establish the agreement was a sham" (see [452] above).

[70]

Ground 5(c) - Inadvertently leaving recklessness on count 2

The appellant submitted that the trial judge ruled that recklessness was not an available mental element for falsification on count 2, but inadvertently directed the jury that it was in fact an available mental element.
The direction complained of was in the following terms: "… In this case in broad compass the Crown relies upon circumstantial evidence to prove that the accused, Mr Gregg, knew that the stated purposes for the payments in the written authorisation were not as they were stated, in other words, were not the true purposes. Secondly, that the agreement to buy and sell was not a sham or was not genuine, I should say, or was a sham agreement. That is count 2. And that he knew or was reckless that his conduct would result in the falsification of company books."
The appellant submitted that there was no other direction of intention given by the trial judge to the jury in respect of count 2. However, the judge did refer in his written direction to the fact the jury had to be satisfied that the agreement was not a genuine agreement and was a sham. He also gave the definition of sham to which I have already referred.
The Crown submitted that the trial judge's "inadvertent slip" did not amount to an error of law, and submitted that the rest of the direction and the trial judge's summing-up emphasised and reiterated that the jury must be satisfied beyond reasonable doubt that the parties intended the agreement to be a sham and were aware the other party had the same intention.
The Crown also submitted that as no objection at trial was taken to the direction complained of, r 4 applied and it was necessary for the appellant to obtain leave to review it.

[71]

Consideration

The remarks made by the trial judge must be considered in the context of the written direction. Each of the written directions on count 2 was unequivocally framed in terms of intention. In particular, the last question "Did the accused intend that his conduct would result in the falsification of the books" did not introduce the concept of recklessness. In these circumstances the mistaken reference in the summing-up to recklessness in respect of count 2 would not have misled the jury as to what was necessary to establish count 2.
This ground of appeal has not been made out.

[72]

Ground 5(d) - Errors in directions as to the state of mind of the counterparty of the buy and sell agreement

[73]

a The directions

This ground of appeal related to question 5 in the written directions on count 2: "Did Mahesh Khemka intend that the agreement (which he signed 'for or on [behalf] of Asian Global…') was not a genuine agreement and was a sham?" It should be noted that consistent with that written direction, the trial judge directed the jury on a number of occasions that in considering the question of sham they had to be satisfied beyond reasonable doubt that Mr Khemka did not intend the buy and sell agreement to be a genuine agreement.
The formulation of question 5 was objected to on the basis that the counterparty to the agreement was Asian Global not Mr Khemka. The trial judge declined to give any direction as to the imputation of knowledge or intention to accompany the direction. He did not give any reason for refusing to do so.

[74]

(i) The appellant

The appellant in his written submissions contended that the trial judge should have directed the jury that Asian Global was the relevant party to the agreement, and that the Crown had to prove that Asian Global subjectively intended the buy and sell agreement to be a sham and knew that this was the appellant's subjective intention and that the appellant knew it was Asian Global's intention. It was submitted that alternatively, having directed the jury that the relevant intention was that of Mr Khemka, the trial judge erred by summarising the defence's position as being that the appellant was unaware of the knowledge or intention of Asian Global in relation to the asserted sham agreement.
The appellant submitted that the trial judge erred in law in directing the jury that Mr Khemka was a party to the buy and sell agreement, or by presuming that he was the directing mind and will of Asian Global. It was submitted that the trial judge's refusal to direct the jury that the requisite intention was that of Asian Global was an error.

[75]

(ii) The Crown

The Crown submitted that there was evidence before the jury from which it could be inferred that Mr Khemka, having been expressly identified as a director of Asian Global, had the requisite intention and authority to bind the company. It was submitted that the evidence established that Mr Goenka was the intended signatory but Mr Khemka was brought into the arrangement on the same day. It was submitted that it was an available inference that Mr Khemka, not having been involved in the negotiations at all but signing on behalf of Asian Global, was aware the agreement was a sham.
At the hearing the Crown submitted that the trial judge clearly identified the other party to the agreement as Asian Global.
She also submitted that "the law refers to the identification of an individual who is the directing mind of the corporation" and submitted "there was sufficient evidence before the jury of the person who signed the agreement, Mahesh Khemka, that on the face of the document he signed as director".
Whilst the Crown accepted that the relevant intention was that of Asian Global, it was submitted that Asian Global had to act through an individual, and the individual who was the directing mind of the company in respect of the transaction was Mr Khemka, being the person who was identified as the director and applied the company's seal. She submitted in those circumstances that would be sufficient for the intention of Asian Global to be proven through evidence relating to Mr Khemka or through evidence of Mr Khemka's intention.

[76]

Consideration

The written direction in my opinion was erroneous, in that in dealing with the intention of Asian Global, it in effect directed the jury that Mr Khemka was the directing mind of that company and that his subjective intention could be attributed to that company.
The task of the jury in determining whether or not the intention of Asian Global was that the buy and sell agreement be a sham involved a consideration of the question of who was the directing mind and will of the company for the purpose of the transaction.
What has been described as the organic approach on this issue was set out in the speech of Lord Reid in Tesco Supermarkets Ltd v Nattrass [1972] AC 153 ("Tesco"), a case involving an offence under the Trade Descriptions Act 1968 (UK). His Lordship made the following remarks (at 170): "I must start by considering the nature of the personality which by a fiction the law attributes to a corporation. A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or vicarious liability."
His Lordship also pointed out (at 171) that normally the board of directors, the managing director and "perhaps other superior officers" carry out the functions of management and speak and act as the company. He stated, however, that persons to whom functions were delegated may stand in the same position: see also Viscount Dilhorne at 187 and Lord Diplock at 199-200.
The passage cited was approved by the High Court in Hamilton v Whitehead (1988) 166 CLR 121 at 127; [1988] HCA 65.

[77]

Ground 5(e) - The trial judge erred in declining to leave the s 1307(3) defence to the jury on count 2

Leave was sought to add this ground of appeal at the hearing. The appellant accepted that the ground only arose if it was held that it was sufficient to demonstrate sham that the buy and sell agreement was backdated. Having regard to my conclusions on ground 5(a) it is unnecessary to deal with this ground.

[78]

Ground 6(a) - The jury directions reversed the onus of proof and diminished the burden of proof by utilising a question trail that compelled "Yes/No" answers to essential questions, imposing a burden on the appellant to positively persuade the jury that the answer to the essential question was "no" to obtain an acquittal

[79]

(i) The appellant

The appellant referred to the written directions given by the trial judge to the jury as to the manner in which they should use the question trail.
The appellant also referred to oral directions given by the trial judge to the effect that the Crown will have failed to establish guilt beyond reasonable doubt if the answer to any of the questions was 'no'. The appellant noted that the questions were not framed with the preface, "Has the Crown proved beyond reasonable doubt", rather it was submitted that the jury was told they had to positively answer the questions 'no' to find the appellant not guilty.
The appellant pointed out that the jury was not required to be satisfied of anything to find the Crown had not discharged its onus, not that the appellant had proved that the payments were made for the stated purposes and the agreement was not a sham. It was submitted the jury merely had to conclude that they could not be satisfied beyond reasonable doubt that any one of the questions should be answered 'yes'. It was submitted that the direction was "particularly prejudicial" in the context of the Crown's closing address, the subject of ground 8(a) which asserts that the prosecutor had repeatedly stated that the jury had to be positively satisfied of the appellant's case to find him not guilty.
At the hearing, senior counsel for the appellant described the problem as being that the proof of the elements of the offences then became answers to a series of questions which he submitted was "a flawed way" of directing the jury.

[80]

(ii) The Crown

In its written submissions, the Crown submitted that the question trail did not erroneously reverse or diminish the burden of proof as "the jury was specifically directed that each question had to be considered separately, and that it could only be answered 'yes' if the jury was satisfied beyond reasonable doubt as to the conclusion". It was noted that the trial judge also directed that the Crown would have failed to prove guilt beyond reasonable doubt if any answer was 'no'.
The Crown also submitted that the trial judge's direction that if the jury was undecided as to any of the questions, to acquit the appellant if the answer to any of the questions was 'no' was "merely reflecting the orthodox position that in a circumstantial case no one piece of evidence was to be considered in isolation, but rather that the evidence should be considered in its entirety".
At the hearing, the Crown submitted that the question trail and the written directions combined with the oral directions did not reverse the onus of proof. She submitted that "the written document in its own terms specifically directs that each question has to be considered separately and can only be answered 'yes' if the jury was satisfied beyond reasonable doubt as to the conclusion". She stated that this was supplemented by the oral direction "that the Crown has failed to prove guilt beyond reasonable doubt if any answer to the questions was no".

[81]

Consideration

This ground along with the balance of ground 6 and ground 8 raise the question whether the trial judge's directions, in conjunction with the prosecution's closing address, occasioned a miscarriage of justice. In Moore v R [2016] NSWCCA 185 Basten JA in dealing with a complaint concerning a question trail made the following observations: "[50] The materiality of the question trail (and hence the materiality of any misdirection it contained) was founded upon two separate propositions. The first proposition denied the possibility of disregarding an error contained in a document of which each juror had a copy in the jury room when deliberating. A similar issue arose in Justins v The Queen, a trial involving an early form of 'question trail', though not identified as such. In the course of considering the omission of a critical issue from written directions described as having the capacity to operate as a checklist, Simpson J gave the following assessment of the significance of written directions: 'Written directions are, in my opinion, a most useful, important, and, in some cases, crucial, development in the conduct of criminal trials. That is, in part, because of the increasing complexity and length of criminal trials. It is also a recognition that juries, in the past, were expected, in an unfamiliar environment, to absorb what amounted to a lecture on legal theory (sometimes of considerable complexity) and the facts of the particular case, and that this was unfair both to the jury and to the accused (and sometimes also to the Crown). But it must also be remembered that a jury will have the written directions in the jury room long after the oral directions have concluded. It will be written directions to which the jury will have resort, perhaps repeatedly. And the force of the written word will be likely to override the recollection the jury has of the oral directions.'"
The care that needs to be taken in the use of question trails was emphasised by this Court in Budrodeen v R [2014] NSWCCA 332. The difficulty with question trails was summarised by R A Hulme J in the following terms: "[23] Directing the jury in this way was erroneous in that it required the jury to be satisfied beyond reasonable doubt about an issue that, having regard to s 77, was entirely irrelevant. But in directing the jury as to the essential elements of the offences in the form of a question trail, the jury were given a prescriptive chain of reasoning to follow. The directions left it open to the jury to by-pass the single critical issue in the case (honest and reasonable mistake as to the complainant's age) and to convict the applicant on the basis that they were satisfied of the irrelevant fact that the complainant did not consent. [24] None of this should be seen as criticism by this Court of the practice of using the question trail approach to directing a jury as to the elements of an offence. This case simply serves to illustrate that particular care is needed when prescribing a sequential process of reasoning. It is trite to observe as well that care is required in the identification of the elements of the offence; a matter about which the trial judge was not well served by the trial advocate for the Crown and the experienced counsel who appeared for the applicant." See also Rothman J at [3].

[82]

Ground 6(b) - Directions on circumstantial reasoning which diminished the burden and reversed the onus of proof

[83]

a The directions

In his summing-up, the trial judge informed the jury that the Crown relied on circumstantial evidence. He then gave the following direction as to the manner in which the jury should reason from that evidence: "It is important, ladies and gentlemen, that you approach a circumstantial case by considering and weighing as a whole all of the facts you find established by the evidence. It is wrong to consider any fact in isolation and ask yourself does that fact, in isolation, prove his guilt or whether there was any explanation for that particular fact which is inconsistent. In other words, it would be wrong to say, 'I'll go to fact number 4 and I ask myself does that fact prove that X is guilty?' That is the wrong approach. Or I go to fact number 4 and I ask myself, 'Is there a good and reasonable explanation for that which explains it?' The process is to look at all of the facts in combination, draw back and say, 'Does that picture present to me the conclusion the Crown asks me to draw?' The correct approach then is to determine what facts you find established by the evidence. You may disagree with the Crown proposition that any number of these items, to which I have made brief reference, are a factor established by the evidence. The first step is work out what you think occurred in terms of the facts which are put before you. Those facts need not be established beyond a reasonable doubt. Then you consider all of the facts together and ask yourself as a whole and ask yourself whether you can conclude from those facts the accused is guilty of the offence charged. If such a conclusion does not reasonably arise, then the Crown's circumstantial case fails and you are not satisfied because in the event you are not satisfied of his guilt beyond a reasonable doubt, therefore the proper verdict is 'not guilty'. This is the important catch-all, ladies and gentlemen, which is very, very necessary to remember. If you find that such a conclusion is a reasonable one to draw based upon a combination of the established facts, before you can convict an accused you must determine whether there is any other reasonable conclusion arising from those facts not consistent with the conclusion the Crown you said you should draw, which is 'guilty'."

[84]

(i) The appellant

The appellant submitted that the direction omitted the passage which was said to ordinarily appear between the second last and last sentence in the Judicial Commission Criminal Trial Bench Book directions on circumstantial reasoning, namely that it is for the Crown to then "prove to you that the only reasonable inference or conclusion that can be drawn from a consideration of all of the established facts viewed as a whole is that the accused is guilty of the offence". The appellant referred to the distinction drawn by this Court in Hadchiti at [107] that there was "a critical difference between an instruction to the effect that the Crown must remove a reasonable possibility in order for a guilty verdict to be available and an instruction that turns on whether the jury has found there to be a reasonable possibility in order to avoid a guilty verdict". It was submitted that in the present case the direction fell into the impermissible latter category.
The appellant submitted that the direction "provided an invitation to find the elements" proving that the payment instruction was falsified and the buy and sell agreement a sham "to a standard less than beyond reasonable doubt".
The appellant submitted that the effect of the direction was to suggest that the Crown case on guilt, at least in relation to those questions where reliance was placed on circumstantial evidence, must only "reasonably arise" on the basis of facts not proved beyond reasonable doubt. He contended that proof beyond reasonable doubt would then follow unless the appellant was able to provide a reasonable alternative. It was submitted that the effect was to shift the burden to the appellant to provide a reasonable alternative explanation. It was also submitted that this was particularly likely when the trial judge had directed each question in the written direction be answered with a binary 'yes' or 'no'. It was also submitted that the effect of the direction was that the only question required to be proved beyond reasonable doubt was the ultimate question of guilt.
Senior counsel for the appellant made a number of criticisms of the directions. He stated that the direction did not inform the jury of what facts had to be proved beyond reasonable doubt.
Senior counsel for the appellant also referred to the following paragraph of the summing-up: "In order to satisfy you beyond a reasonable doubt of the accused's guilt, therefore, I repeat in summary, the Crown must first persuade you that the inference or conclusion it urges upon you is a reasonable one to draw from the facts, that you try find established [sic] and then must prove that that is the only reasonable inference or conclusion that can be drawn from the facts viewed as a whole. If that is so you will find the accused 'guilty'. If there is any other reasonable conclusion open on the facts that is inconsistent with what the Crown puts to you on the issue of guilt, then the circumstantial case of the Crown fails."

[85]

(ii) The Crown

The Crown submitted that as no objection was raised at trial in respect of this direction, leave under r 4 was required for this ground to be raised. It should be noted that shortly after the passage complained of, senior counsel appearing for the appellant at the trial made some complaint about the direction but it is not clear if it related to this issue.
The Crown contended that "the essential part of the direction" was that the Crown carried the onus to remove a reasonable possibility in order for a guilty verdict to be available. She submitted that the impugned direction did not fall into the impermissible second category of directions that turn on whether or not the jury found there to be a reasonable possible alternative in order to avoid a guilty verdict.
At the hearing, the Crown referred to the two cases decided since Hadchiti, Moore v R at [114] and Towney v R at [64]. I have referred to these cases at [507] above. She submitted that the present case did not have the repetition identified in Hadchiti and, in any event, the particular directions were within the category of "an instruction that the Crown must remove a reasonable possibility in order for a guilty verdict to be available". It was submitted that in those circumstances there was no error.

[86]

Consideration

This direction sits somewhat uneasily with the written direction which, subject to the difficulties to which I have referred, required affirmative answers to the questions beyond reasonable doubt. I do not think that in these circumstances the direction would be taken by the jury to mean that the only matter on which they need be satisfied beyond reasonable doubt was the ultimate question of guilt and that all intermediate facts leading to that conclusion need not be proved to that standard. Rather, in my view, in the portion of the summing-up complained of, the judge was directing the jury as to the manner in which they were to approach circumstantial evidence in dealing with the individual questions. On balance, I do not think that the jury would have been misled in the manner complained of.
However, in my opinion, the direction in the last paragraph extracted at [512] above is erroneous. It is not for the jury to determine whether there was "any other reasonable conclusion arising from the facts", but rather for the Crown to exclude all reasonable hypotheses inconsistent with guilt. This is consistent with the approach in Hadchiti. I do not consider that it was inconsistent with what was said in Moore and Towney which rather concerned the question of whether the reference to "a reasonable possibility" in the question trail was a reference to that which would be required in order to hold a reasonable doubt. In the present case, whether the word 'hypothesis' or 'possibility' is used, the difficulty is that the jury was not directed that the onus was on the Crown to exclude any reasonable hypothesis or possibility beyond reasonable doubt.
It follows that there was a misdirection. As with ground 6(a), it was not rectified by the balance of the directions, particularly having regard to the manner in which the Crown put its case to the jury. In these circumstances, this ground of appeal has been made out.

[87]

Ground 7 - The trial judge erred in refusing to give a direction that the jury could have regard, in considering whether there was a reasonable doubt about the appellant's guilt, to the absence of the Operating Company Chief Financial Officers (OCCFO) from the Crown witnesses (a Mahmood Direction)

The direction sought was of the nature of that formulated in Mahmood v The State of Western Australia (2008) 232 CLR 397; [2008] HCA 1 at [27]: "[27] It was neither necessary nor appropriate for the trial judge to direct the jury that an inference adverse to the case for the prosecution could be drawn because the presence of blood in the appellant's trouser pocket had not been the subject of evidence by the prosecution's witnesses. In the joint reasons in RPS v The Queen it was pointed out that where a witness, who might have been expected to be called and to give evidence on a matter, is not called by the prosecution, the question is not whether the jury may properly reach conclusions about issues of fact but whether, in the circumstances, they should entertain a reasonable doubt about the guilt of the accused. Similar views were expressed by Gaudron and Hayne JJ and by Callinan J in Dyers v The Queen."

[88]

(i) The appellant

In submitting that the Chief Financial Officers were relevant witnesses and the trial judge erred in failing to give the Mahmood direction, the appellant placed particular reliance on the evidence given by Mr Pack as to the work carried out by him in respect of the Cost Efficiency Review and his evidence he was dealing with the Chief Financial Officers, not the Managing Directors of the relevant operating companies.
In written submissions, the appellant noted that the Crown case was that there was no one in LHL considering the procurement of steel on a group basis and closed with the remark that the jury might think that Chief Financial Officers would have "added little, if anything to the evidence".
The appellant submitted that the sentencing judge erred in stating, based on his own experience that "if a Chief Financial Officer is doing something" (in respect of the procurement of steel), then the "managing director is likely to be aware of it". It was submitted that there was no basis on which the trial judge could take note of this factor.
At the hearing, counsel for the appellant referred to Mr Pack's evidence concerning the Powerpoint slides to which I have referred at [295]-[298] above. She noted that it was submitted at the trial that the "quick wins" could have included "the deal that was made with Mr Goenka in August".
She also referred to Mr Pack's explanation of the meaning of shared services, submitting that the Asian Global agreement was "an example of a shared service because you're going to a trading house like Asian Global to access advantageous prices on steel". She noted that Mr Pack agreed input costs would include steel. She also referred to the fact that he stated that he was obtaining information from the Chief Financial Officers.
She submitted that the effect of the cross-examination of Mr Pack was that he had had discussions at the Chief Financial Officer level with each of the operating companies.
In dealing with the Crown's closing submissions, she referred to the fact that it was put that no-one at LHL had spoken about steel procurement which she said was contrary to the evidence of Mr Pack. She said that it was in that context that the Mahmood direction was sought. She submitted that it should have been given and the failure to do so constituted a factor in what she described as "the substantial miscarriage of justice in this case".

[89]

(ii) The Crown

The Crown referred to the evidence of Mr Pack that he could not recall the four work streams referred to in the Cost Efficiency Review actually commencing. It was also submitted that Mr Pack's evidence was that "he was never asked by anyone about achieving cost saving initiatives for steel and steel products". It was also pointed out that whilst he said that by May 2011 he had spoken to the Chief Financial Officers of the operating companies, he said he did not think it included the overseas companies.
It was submitted that given that evidence, particularly that his review was limited and in its early stages, and the limited contact with Chief Financial Officers, meant that the Chief Financial Officers were not material witnesses.

[90]

Consideration

As can be seen from the submissions, reliance was primarily placed on the evidence of Mr Pack in support of the proposition that the Chief Financial Officers were material witnesses. I referred to the evidence above. It should be noted that Mr Pack stated that the Cost Efficiency Review was in its early stages. Further, he expressly stated that he was not asked by anyone about achieving cost savings as an initiative in respect of steel or steel products: see [296] above. Although he suggested his review could extend to third party costs, he did not suggest that there had been a discussion of cost savings in respect of steel procurement. Further, although the slides to which he was referred included a reference to strategic procurement including rationalisation of suppliers (see [310] above), there was no evidence that there had been any discussion with Chief Financial Officers concerning the procurement of steel or the rationalisation of steel supplies.
Further, it must be remembered that Mr White also gave evidence stating that in his position as Strategic Procurement Manager for Leighton Contractors, he had dealings with Thiess and John Holland to try to find synergies. He did not say that included steel procurement. He referred to plans for centralised procurement which were abandoned (see [276] above) but did not state the plans included procurement of steel.
In these circumstances, there does not seem to be any reason to suggest that the Chief Financial Officers would be material witnesses. In the circumstances, it was unnecessary to give a Mahmood direction. This ground of appeal has not been made out.

[91]

Ground 8(a) - The trial was affected by a miscarriage of justice arising from the Prosecutor's closing address which impermissibly commented on the appellant's silence, reversed the onus of proof and misstated the legal elements of the offences

In summary, the following matters were contended for on this ground: "[The prosecutor] a. Expressly referred to the Appellant's failure to give evidence; b. In attempting to correct this reference, repeatedly referred to the jury's speculation as to what the Appellant might have said if he had given evidence (so as to caution against this approach, but nevertheless repeatedly referring to it); c. Utilised rhetorical questions in a manner which pointed to the Appellant's silence, called for an explanation from the Appellant, and reversed the onus of proof; d. Repeatedly invoked the absence of evidence as tending to support the Crown case in a manner which further tended to reverse the onus of proof; e. Told the jury in relation to both counts that they had to determine whether they were 'satisfied' of the Appellant's case; and f. Misstated the test for recklessness on count 1 so that a finding that a loan did not exist at the time of the payment would have (erroneously) resulted in a finding the Appellant was reckless."

[92]

(i) The appellant

The appellant submitted that a prosecutor must not comment on an accused person's failure to give evidence. In his written submissions he noted that in Wood v R (2012) 84 NSWLR 581; [2012] NSWCCA 21 it was held that a prosecutor's use of rhetorical questions reversed the onus of proof as it was implied that there were matters which the applicant should explain.
The appellant submitted that in the present case, the prosecutor asked a series of rhetorical questions and expressly observed that the appellant and his co-accused had not given evidence. The questions were described as falling into two categories, some implicitly calling for an answer from the appellant personally and others calling for answers in respect of gaps in the Crown case.
The first example given by the appellant was the prosecutor's comment on the email from Ms Chatterjee to Mr Kent with a copy sent to Mr Waugh of 14 July and the email of the same day from Mr Kent to the appellant to which I have referred at [81]-[82] above. The relevant parts of the address are as follows (the sub-paragraph numbers have been inserted for ease of reference): "(a) So, at this point, for the first time, we see that there is now - at least verbally - an agreement that Welspun will be providing a waiver letter. And you might think, well, this is on 14 July, we know it had to be done by 15 July; and something has been done. But what has been done? There's nothing in the evidence that shows that those who were transparently discussing, if you like, alternative ways of dealing with this EBITDA issue and the waiver issues have been involved in what happened. What was the discussion that resulted in the bringing about of this waiver? (b) And we know you might think that the evidence shows that Welspun were very keen to hold onto their 35 crore. They were playing pretty mean, you might think. That eight or $7 million, whatever it is - all exchange rates. So why would they suddenly give up this opportunity? In fact, Welspun has offered them, you might remember, in the exchange, 20-20. You keep 20 crore, we keep 20 crore. And yet, on this email, as of 14 July, Welspun are saying, 'We're going to give you the waiver and it's not going to cost you anything' - it would seem because there's no discussion here as to what it's costing. There's no quid pro quo. So what has happened? Something has happened. But we don't know what's happened. There's a discussion by Mr Kent who says, 'Russell met with BK yesterday. BK is still looking for hard data on Pakri Barwadih.' So is it suggested that maybe the mine is still an issue or maybe something else is happening. Again, a matter entirely for yourselves, ladies and gentlemen, as the jury. You have to make all the findings as to facts. Do you make a finding that, as at 14 July, something has already been agreed, but those who are on the face of the transactions, people like Mr Kent and Mr Hatten, aren't simply brought into it, as it were. … (c) Now, by the time we get to 11 April 2011, Leighton Holdings Ltd has had to adjust its profit forecast. It says there on the second paragraph, 'The Leighton Group now expects to report a loss of $427 million for the financial year versus its previous guidance for a profit of $480 million after tax'. Now, if you do your maths, it's a swing of about $900 million and it explains that that's partly what's caused the concern. You've heard some evidence about it; the airport link in Queensland; Victorian desalination plant and so forth. But the net effect is that, by the time we get to April 2011, the company LHL is facing, already, a forecast loss of over $420 million for the end of the year. You might think it doesn't want anymore bad news. And it's already accounted for 200 million worth of profit from the sale in India plus the cash of $80 million profit from India. If that was unwound and it had pay back the cash plus the 20% IRR, you might think, how would the board of directors be seeing that? How would the people at senior management be seeing that? Well, the answer to that question really can be found in p 958. While you're getting there, these are the board minutes of 30 May 2011. Again, you were taken to these in the course of the trial. I'm not going to trawl through them. For present purposes, this is part of the key issues that are raised on p 957 What Mr Stewart, who's the CEO, says to the board - business growth, so group business priorities, one of them is them is stability as soon as possible, engaging with the shareholders and so forth - delivery ensuring no more negative surprises, and that the 2011 and 2012 results are delivered as forecast. So they've told the shareholders what the forecast is going to be. You read that in April 2011, that media release. They want to ensure that there is confidence, you might think, in LHL management by the shareholders and the market. Generally, they don't want any more negative surprises. Now, while I'm here, I might just take you also towards the top of that page. You'll see that there is an LHL business model where they say they wish to establish and implement a one group mentality across opco senior executives whilst maintaining a strong, competitive model. Then towards the bottom of that next paragraph where it says, 'Establish succession capability within all opcos, transition senior' - the last one, 'Review and implement overhead savings across the group that do not impact on the independent opco model, which include travel, IT, insurance, accounts, payroll, employment and planned acquisition.' What does the Crown say to you that's important about that? Well, as of 30 May 2011, you might think there is no reference here in the board minutes to steel procurement as one of the factors that's being considered at that level. So those are the contextual matters; they're the big issues that are happening at LHL whilst this other issue is being noted out and being dealt with. The board was concerned with a significant shift in their financial position, particularly in light of where they'd announced the good news story and they, you might think, didn't need another bad news story or a negative surprise. … (d) His Honour will give you some directions, I expect, about what circumstantial evidence is and drawing inferences, and I'll be talking about this a bit later as well. You can, the Crown would say, quite properly, having a look at all the evidence, draw your own conclusions. And one that you may draw, whilst it's not known for sure, is that this amount was paid so as to buy out that obligation. You might think, 'Why else would Welspun, for instance, not be seeking its 35 crore?' Those are all matters that you will need to consider, having regards to all of the evidence. Ultimately, the Crown says that if, in fact, it was to obtain a waiver of that obligation, then you couldn't be satisfied that it was for marketing services or for advisory services or for a loan. … [Referring to Mr Waugh's email of 8 August 2011 to which I have referred at [83] above]. (e) There's still this issue they have to get the audit approval on the EBITDA to get the money back. And so Mr Waugh is saying, you might think that this is still very important for LHL for two reasons. One, we've got out board meeting and we know that the board meeting is on 12 August and we'll get there shortly, but also goes in the market this week. So we've then got to make an announcement to the market as to how things are going. You might think he's saying we don't want to have to tell the market that there's any negative surprises because this EBITDA come through. Then, if you turn to p 78. [The email from Mr Waugh to Mr Gregg to which I have referred at [83] above] Again, on EBITDA; again, on the same day; an email from Mr Waugh to Mr Gregg saying this, 'Peter. Have spoken…with our end.' Now, there are, perhaps, a number of things that you might ask yourself when looking at this email. The first is, why aren't other people from Project Melbourne involved in this? Why isn't Mr Kent and Mr Hatten involved in this email? Secondly, what is the plan? What sort of language does that suggest to you? Again, you can draw inferences as you see fit, and you might think if this email was by itself, it would be completely innocuous and of no issue. But, you might think, having regard to what you know occurred afterwards and what was happening at the time, you might think that this speaks to a particular plan that isn't a transparent plan. Why do you think it might not be a transparent plan? When you look at the evidence, well, it speaks of 'BK not getting' - or need to get - 'Parvez in line.' What does that mean? Again, there's no positive evidence from anybody as to what this means. Mr Waugh and Mr Gregg didn't give evidence. They're not obliged to give evidence. You'll get directions about that. There's absolutely no obligation on them to do so. You can't draw any adverse inferences on them not giving evidence. You're not allowed to do that. But what you can do is look at the evidence itself and just say, what can I draw from this, if anything? What does it tell me? 'I assume we are ready with our end.' What was 'our end'? What was left for 'us' to do? The 'us'. Who's the 'us'? It was LHL who needed to receive the money. What was LHL requiring so far as Russell and Peter Gregg were concerned. Perhaps 'our end' is Peter Gregg and Russell Waugh. One doesn't know. But you might think that it, in fact, relates to getting the money organised to pay for it. You might think that it relates to something else. But the fact that it's shrouded in some form of mystery doesn't prevent you from drawing whatever inferences you think are rational inferences that you can draw from it, having regard to all the other evidence that's available. You then turn over the page and just see what's still - now, we're talking 9 August on p 79 - and you see the bottom email in line says, 'Peter, just so…getting this closed.' Discussion about KPMG…Parvez sending E&Y' - that's Ernst & Young - 'to our office…into the loop.' Well, what does that mean? What do you understand, ladies and gentlemen, that to mean? Someone brought into the loop, having regard to the email we've just read. Again, emails that don't include anybody else from Project Melbourne. And we've got discussions here about being on the plan and bringing into the loop. You can draw, of course, your own conclusions from that, but you might well think that this is talking about something that's, perhaps, outside of the knowledge of Project Melbourne. Something that's going on that concerns, really, only Mr Waugh, Mr Gregg and BK at that point. It seems Mr Parvez hasn't been brought into the loop because, as you say here, 'He is such a stickler.' The response to that email is, 'Thanks, Russell. I…to my nervousness.' Well, what's the banking details that he's referring to here on 9 August? Is that related to what's on p 8? 'I assume we're ready with our end.' Again, can you draw an inference that, on the 8th and 9 August, what Mr Gregg and Mr Waugh are talking about it trying to get the financial banking details ready so as to send some money to BK in order to pay for, if you like, the waiver of the obligation. And Mr Waugh applies, 'I'll get today. I have told BK'."

[93]

(ii) The Crown

In her written submissions, the Crown submitted that when the address is read as a whole, it did not occasion a miscarriage of justice. The Crown relied on four matters.
First, after objection was taken to the failure of the appellant to give evidence the Crown specifically addressed the issue. It was submitted that the further rhetorical questions asked were of "a different nature" to the impugned questions in Wood.
Second, the Crown referred to the prosecutor's explanation of his use of the term "no evidence" as meaning that the evidence disclosed certain things not to be the case and his emphasis that the accused did not have to prove anything which, it was submitted, was repeated on a number of occasions.
Third, it was submitted that after the weekend break which occurred in the course of the prosecutor's address, the Crown corrected its submission that where there was a conflict in the evidence, the jury would need to resolve it. She noted that the Crown stated that it was incorrect because there was no obligation on the accused to prove or disprove anything.
Fourth, it was submitted that the statements complained of did not reverse the onus of proof but were "merely invitations to the jury to draw certain inferences in a circumstantial case".
At the hearing, the Crown submitted that it was necessary to look at the address as a whole. She submitted that although the address started off in a "dangerous area", it was immediately corrected and the prosecutor moved away from the device of rhetorical questions. She submitted that the reference to "no evidence" can lead into dangerous areas but was "sufficiently divorced from the initial erroneous comments" made in respect of the failure by the appellant to give evidence.
The Crown referred to submissions made by senior counsel for the appellant to which I have referred at [561] above. She submitted that what was raised there was a matter of factual dispute between the parties and ultimately a question for the jury. In relation to a question from the bench, she submitted it was immaterial that LIL rather than LHL was the counterparty to the business co-operation agreement and submitted that to the extent it raised unanswered questions, it had been explained to the jury that the appellant did not have to prove anything.

[94]

Consideration

There was very little dispute as to the applicable principles. The Crown very properly accepted that the duty of the prosecutor was to ensure that the case was presented fairly to the accused: Gilham v R [2012] NSWCCA 131 at [383]; R v MG (2007) 69 NSWLR 20; [2007] NSWCCA 57 at [66]-[88]. The Crown also accepted that the use of rhetorical questions could deny the accused a fair trial by reversing the onus of proof: Wood at [605]. The issue in the present case is whether the prosecutor in his closing address breached these fundamental requirements.
In this context, regard must also be had to s 20 of the Evidence Act which at least impliedly prohibits the prosecutor from commenting on the failure of an accused to give evidence.
In the present case, it should first be stated that the prosecutor did not deliberately set out to deny the appellant a fair trial or to reverse the onus of proof. His attempts to correct matters complained of provided ample evidence of that fact.
Notwithstanding, I am of the view that the matters complained of denied the appellant a fair trial.
I have set out in considerable detail those portions of the summing-up in respect of which complaint was made. The first part set out at 541 above commenced with rhetorical questions concerning the waiver; "But what has been done?"; "What was the discussion that resulted in the bringing about of this waiver?".
It was then suggested there was "no quid pro quo" for the waiver (see 541 above). That is followed up by "something has happened. But we don't know what's happened" with the reference that people like Mr Kent and Mr Hatten were not "brought into it".
The suggestion conveyed in the address by that stage was that something secretive had occurred and, at least inferentially, was only known to the appellant and Mr Waugh.
There was then a series of rhetorical questions as to the impression which would be given if the transaction was unwound, "How would the board of directors be seeing that?" and "How would the people at senior management be seeing that?". That was followed by a reference to the absence of any discussion concerning steel procurement. It was open to the prosecutor to invite the jury to infer that the payment the subject of the payment instruction was made to procure the waiver. However, these questions tended to suggest that absent an explanation from the appellant or Mr Waugh, the jury should conclude that the payment was made for a purpose other than that which was stated, as distinct from telling the jury that they had to be satisfied beyond reasonable doubt on the evidence before them and any inference that could properly be drawn from that evidence that the payment was made other than for the purposes stated and the buy and sell agreement was a sham.

[95]

Ground 8(b) - The trial was affected by miscarriage of justice arising from the summing-up which presented an imbalanced and incorrect summary of the parties' respective cases and permitted the Crown to put new arguments to the jury after the appellant's closing address to which the appellant was not permitted to respond

This ground focused on the written directions to the jury which I have annexed to this judgment. In summary, there were four matters of which complaint was made. First, the judge did not adopt many aspects of the summary prepared by the appellant. Second, the summary included new or revised arguments that had not been made prior to the appellant's closing address. Third, it did not include the appellant's response to these new issues and fourth, it presented an overall summing-up of the respective cases that substantially favoured the Crown to the unfair prejudice of the appellant

[96]

(i) The appellant

The appellant's argument focused on various matters included in the written directions and omissions from the directions of matters which his counsel at the trial had requested be included.
The first complaint related to remarks in the opening summary of the directions to the effect that the Crown case was that "Mr Gregg sent the payment instruction in the context of Leighton Holdings being unable to find a way to avoid or circumvent the activation of a default provision" (presumably in the Share Purchase Agreement) and that "it can be inferred that the payment to obtain the waiver was made to Asian Global to circumvent the Indian regulatory difficulties Leightons might face in attempting to make a payment to an Indian entity".
The appellant submitted that the Crown had difficulty in proving what motivated the appellant to make the payment. He submitted that the Crown accepted that "it could not prove, not only what was provided to obtain the waiver," but also "could not prove what the true purposes of the payments were".
In these circumstances, it was submitted the trial judge "misstated and elevated the force" of the Crown case by stating LHL was "unable to find a way to avoid or circumvent the activation of a default provision". It was submitted that the activation of the default provision, if it could have occurred, had gone by the latest in the first half of July with the release of the accounts to the auditor. He also submitted that there was "no evidence it had been taken to be activated".
It was submitted that the trial judge in the passage complained of "put a new and different explanation, namely, that it was made in order 'to circumvent the Indian regulatory difficulties Leightons might face in attempting to make payment to an Indian entity'". It was submitted that whilst the Crown had "pointed to the difficulties with a loan into India, the case had been tied to the attempt to avoid trigger[ing] the buy-back provisions by failure to reach an agreement, not that Asian Global was chosen as a vehicle to accept the loan outside of India". He noted that the direction was objected to.
The appellant also noted that in the original draft of the direction, the Crown case was put as the "purposes of the payments were not as set out in the instruction". It was ultimately put that the Crown case was that "the payments as set out in the payment instruction were not for the stated purposes". It submitted that the change, rather than focusing on the appellant's purposes, shifted to whether the payment was for the stated purposes, for example, if it was shown the loan did not in fact eventuate irrespective of the appellant's purpose at the time of giving the instructions the payment could not be said to be for the stated purpose. It was submitted this would be insufficient to establish the offence.

[97]

(ii) The Crown

The Crown in its written submissions stated that whilst there was "a positive obligation on a trial judge to put the defence case accurately and fairly, and in a way that makes it clear the Crown carries the burden of proof, the trial judge is not required to put to the jury every argument advanced on behalf of the accused". It was submitted that the trial judge did put the defence case fairly.
At the hearing, the Crown submitted that it was not sufficient to consider the written directions but it was necessary to look at the addresses by counsel and the summing-up and when those matters were taken as a whole, the ground of appeal is not made out.

[98]

Consideration

I agree with the Crown that the requirement of fairness does not mean that the trial judge must put to the jury every argument put forward by counsel for the accused: Domican v The Queen (1992) 173 CLR 555 at 561; [1992] HCA 13. However, each of the prosecution and the defence case must be accurately and fairly put to the jury. In McKell v The Queen (2019) 264 CLR 307; [2019] HCA 5 the plurality stated the proposition in the following terms at [35]: "[35] A trial judge must sum up for the jury the case presented by each of the prosecution and the accused after each side has addressed the jury. In Domican v The Queen, Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ observed that 'the requirement of fairness means that ordinarily the respective cases for the prosecution and the accused must be accurately and fairly put to the jury'. In carrying out this task, it is no part of the trial judge's role to 'don[] the mantle of prosecution or defence counsel'. As Gibbs CJ said in Cleland v The Queen, '[i]t is clear in principle that a trial judge, when directing a jury in a criminal trial, must hold an even balance between the cases of the prosecution and the accused'."
Further, when as in the present case, the trial judge chooses to provide a written summary of the Crown and the defence case for the jury to take to the jury room, it seems to me that the summary itself, irrespective of what is said in the summing-up, should present the case for each party in a fair and balanced manner. As was pointed out in Justins v R (2010) 79 NSWLR 544; [2010] NSWCCA 242 at [242] and Hadchiti at [70], such a document is one which could "decisively frame the jurors' deliberations".
The first complaint related to the summary on page 2 of the directions. It appears the reference to the payment being made to Asian Global to avoid the "Indian regulatory difficulties" was first made in that document. It was not the Crown case that was the reason for the proposal. The Crown case was that it could be inferred that the payment was made to avoid the default provision in the Share Purchase Agreement. Reference to Indian regulatory difficulties was, with respect, a matter of speculation. If there were regulatory difficulties in making the infusion payment to India, the Crown could have sought to prove the fact. It made no attempt to do so. Further, as the appellant pointed out, the statement must be considered in the context of the Crown accepting that it could not prove what was provided to obtain the waiver or the purpose of the payment.

[99]

The balance of the appeal

It follows from what I have written above that ground 3, ground 4(a), ground 5(a), ground 5(d), ground 6(a), ground 6(b), ground 8(a) and ground 8(b) (in part) have been made out. The conviction must be quashed. Because of the view I have come to in respect of ground 1, it is not necessary to decide whether or not as a result a new trial should be ordered or a verdict of acquittal entered.

[100]

Ground 1 - The verdicts were unreasonable or cannot be supported having regard to the evidence

It is convenient to adopt the same course as that adopted by the appellant in his written submissions and at the hearing, namely, first to deal with this ground so far as it concerns count 2, and then to deal with it so far as it concerns count 1.

[101]

(i) The appellant's submissions on count 2

The appellant submitted that the evidence was to a large degree documentary and circumstantial and there were no real issues as to credit. It was submitted that the jury enjoyed no real advantage in these circumstances.
It was submitted that to succeed on this ground, the Crown was required to prove beyond reasonable doubt that it was the subjective intention of both parties that the agreement not create the legal rights or obligations which it had the appearance of creating, and that it was a deliberate deceit by both parties.
The appellant in his written submissions set out what he submitted were the legal elements of sham. I have dealt with this in dealing with ground 5(b) above.
The appellant submitted that the Crown could not establish beyond reasonable doubt that the subjective intention of Asian Global was that the buy and sell agreement would not create the legal rights and obligations which it appeared to create. It was further submitted that the fact that Mr Khemka was a director of Asian Global did not establish that he was the directing mind and will of that company. It was submitted that the evidence established that Mr Goenka or someone else from Welspun deliberately selected Asian Global as the counterparty, it being the same entity as received the $15 million. It was also noted that the final hold up from Welspun's side was due to consideration of the agreement by Mr Goenka's lawyers (see [110] above) which was said to be inconsistent with the agreement being a sham.
It was also submitted there was "a fatal paucity of evidence" of the appellant's intention. It was submitted that even if the appellant's motivation was to obtain the waiver (noting that the Crown acknowledged it could not prove the reason why the waiver was given), that collateral motivation, the fact that the deal may have lacked commercial sense on its face and the fact that value for LHL was ultimately not obtained from it did not prove that the agreement was a sham.
The appellant noted that the Crown case was that the whole of the buy and sell agreement was a sham. He submitted that contrary to the Crown's contention, the fact that it evolved through various drafts suggested that it was not a sham.
The appellant submitted that the evidence established that agreements are often backdated when payment occurs before documentation is finalised. It was submitted that if the whole agreement was a sham there would have been no need to backdate the document.

[102]

(ii) The written submissions on count 1

The appellant submitted that the only evidence of the appellant's intention was his email on the morning the payment instruction was given where he stated, "Russell payment made. I assume Ameeta is still doing docs for loan amount" (see [96] above) and the subsequent correspondence in respect to the loan (see [98]-[100] above) together with the indication by Mr Waugh that Mr Goenka would not sign $2.5 million (see [112] above).
It was submitted that that demonstrated that the appellant expected loan documentation, and that Mr Goenka effectively reneged on the earlier understanding and did not want to sign the loan agreement, and the appellant agreed to make the US$15 million the full consideration for the buy and sell agreement.
It was also submitted that the evidence established that the appellant was not involved in the granular details of the negotiations in relation to the waiver, and that he was pursuing strategic procurement generally across the Leighton Group and tended to make high level decisions without concerning himself with the details.
It was also submitted that the Crown particularised its case on the basis that the reason for both payments was false.

[103]

(iii) The appellant's submissions at the hearing

Senior counsel for the appellant referred to the Share Purchase Agreement and the Support Agreement, submitting that there was evidence that from Welspun's perspective, the latter agreement was the most important to Welspun, which was interested in a relationship with Hochtief, the holding company of LHL.
He referred to the infusion obligation in the Share Purchase Agreement, noting that agreement as to the form of the infusion had to take place before the management accounts were referred to the company's auditors (see cl 6.9 at [34] above). He stated that the relevant date was 15 July 2011 and submitted that there was no evidence of anyone raising the failure to agree as to the form of the infusion. He submitted that if there was a dishonest agreement, it would have had to be in place before the relevant date.
Senior counsel for the appellant also referred to the fact that contrary to what he submitted was put by the Crown, if a repurchase of the shares was required the 20 per cent IRR provision did not require an additional payment of 20 per cent of the purchase price, but 20 per cent pro-rata from the period between the closing date of the Share Purchase Agreement and the date of the completion of the repurchase. Although he suggested that would be a three month period, it could have been longer having regard to the closing date (approximately 28 April) and the uncertainty of the period during which notice could be given, with a further 30 days for completion of the repurchase from the date the notice was given.
Senior counsel for the appellant also submitted that the possibility of default (arising from the failure to reach agreement as to the form of the infusion) had come and gone by 15 July 2011. As I indicated, that was by no means clear (see [46]-[48] above). He also emphasised that the infusion obligation was only triggered if the EBITDA target was reached and Leighton International received the held back amount of $8 million. He submitted that looking at the position in a global sense, LHL would receive $8 million but be required to infuse $20 million into a company (Leighton Welspun) in which it held a two-thirds interest.
He also submitted that in the period prior to 15 July 2011, the view had been held for some time that the EBITDA target would not be met (see, for example, Mr Kent's email of 25 May 2011 to which I have referred at [71] above). He submitted, however, that if there was to be a "sinister arrangement" it would be required to be put in place before 15 July, the date the repurchase obligation arose.

[104]

(i) The Crown's written submissions on count 2

The Crown stated that at the trial reliance was placed on the following matters to establish sham: 1. No value was obtained from the agreement, none of the operating companies were invited to use it and no steps were taken to develop a relationship between the Leighton Group and Asian Global. 2. Mr White was not told that Asian Global was related to Welspun, and none of the operating companies were told of the opportunity. 3. Efficiencies in relation to steel were never brought to the Board. 4. The buy and sell agreement was entirely unsecured. 5. In contrast to other cost saving measures, the company reports did not refer to the agreement. 6. The agreement was backdated. 7. Mr Kent was not consulted about the tax implications.
The Crown also relied on Dr Brixel's concerns to which I have referred at [193]ff above and to the fact that there was no security in circumstances where Asian Global only had a net worth of $9 million. It was also part of the Crown case that any reasoning that the agreement could be for advisory services was tortuous. It was submitted in considering the evidence of Dr Brixel, the jury was entitled to give it great weight as he had no vested interest and nothing to gain from dissembling.
The Crown also submitted that there was sufficient evidence that Mr Khemka's intention was the intention of Asian Global, stating that Asian Global was bound by Mr Khemka's entering into the agreement (a proposition which on its face seems quite contrary to the agreement being a sham). It was submitted that there was compelling circumstantial evidence that at the time of signing the agreement Mr Khemka entered into it with no intention it would operate according to its terms.
The Crown submitted that Mr Khemka's post-agreement conduct in failing to respond to the appellant's or Mr White's inquiries provided powerful evidence that the agreement was a sham. It was submitted that the fact that the Crown could not prove the true purpose of the agreement did not significantly support the inference that the agreement was genuine. It was emphasised the Crown case was a circumstantial case.
In that context, the Crown submitted that the appellant's attack on individual circumstances that formed part of the Crown case involved the type of tortuous reasoning that was criticised in cases such as R v Micallef [2002] NSWCCA 480; (2002) 136 A Crim R 127 at [42], Burrell v R [2009] NSWCCA 193 at [55] and Gilham v R at [466]. It was submitted that the factors relied upon by the Crown along with the factors raised by the appellant in support of the proposition the agreement was genuine were matters to be considered by the jury which was entitled to reach the conclusion it did.

[105]

(ii) The written submissions on count 1

The Crown submitted the jury was entitled to reach the conclusion it did taking into account the following matters: 1. Welspun Infra could unilaterally force a buyback of shares in Leighton Welspun plus a 20 per cent loading if certain conditions were met, and also required the infusion if the pre-conditions to it were met. 2. LHL had announced a one off gain of $200 million resulting from the sale together with a cash receipt of about $80 million. 3. LHL was clearly aware of the need to meet the conditions of sale within agreed timeframes. 4. Leighton Welspun negotiated hard during May 2011 to keep part of the Escrow amount. 5. In August 2011, numerous emails concerning the EBITDA condition passed between Mr Waugh and the appellant to which other members of the Project Melbourne team were not party. The Crown referred to the email of 9 August 2011 from Mr Waugh to the appellant and the appellant's response to which I have referred at [85]-[86] above. 6. The coincidence in the timing of the giving of the bank details to Mr Waugh and the grant of the unconditional waiver of the infusion obligation. 7. The fact that payment occurred two days after the unconditional waiver was granted. 8. One of the key drivers for LHL was protecting its 2011 profit and resolving the Escrow situation which also had the potential to further undermine profits and cause reputational damage to the company. 9. Draft agreements were negotiated over the following three months and were only completed following internal audit pressure.
The Crown contended that the possibility that the agreement could be characterised as falling within marketing and advisory services was tortuous. It was submitted that the fact that there was a conflict in the evidence of Dr Brixel and that of Mr Johns meant the jury had to consider Mr Johns credit which may have influenced the weight given to his opinion on this question. It was submitted that even if a strategic procurement agreement could fall within the definition of marketing and advisory services, that did not mean the buy and sell agreement did so. It was submitted that was a matter for the jury.

[106]

(iii) The Crown's submissions at the hearing

At the hearing, the Crown referred to a number of factual matters which she said supported the jury verdict. She referred first to the announced loss for the 2011 year and the statement in the Chief Executive Officer's presentation to the Board in May 2011 that a key issue was to review and implement overhead savings across the Group which did not impact on the model of the independent operating companies (see [15] above). She submitted that the evidence showed that a very important part of the manner in which the Group functioned was that the operating companies were independent of and competed with each other. She submitted that was why the savings were concentrated on matters such as travel, information technology and insurance. She accepted that the presentation to the Board in August 2011 did not show the same enthusiasm for the maintenance of the independent model.
The other aspect she emphasised was the benefit obtained from the Leighton Welspun transaction and the announcement it had generated $80 million in cash and a one off gain of $200 million (see [16] above).
She referred to the provision in the Share Purchase Agreement relating to the release of the Held Back Amount, particularly the requirements of cl 6.7 (see [23] above). She emphasised that there was a potential for further delay in the provision of the Held Back Amount and its inclusion in the final statements of the Group.

[107]

Consideration

In Dickson v R (2017) 94 NSWLR 476; [2017] NSWCCA 78 I set out the principles which a Court will apply in setting aside a verdict as unreasonable in the following terms: "[84] The principles on which a court will set aside a verdict as unreasonable are well established. In SKA v The Queen (2011) 243 CLR 400; [2011] HCA 13 at [11]-[14], the court stated the approach to be adopted was that laid down in M v The Queen (1994) 181 CLR 487 at 492-494; [1994] HCA 63, namely that the court is required to make its own 'independent assessment of the evidence'. If after taking into account the primary responsibility of the jury in determining the question of guilt or innocence and the benefit of the jury having seen or heard the evidence, the court is left in doubt as to the reasonableness of the verdict, the verdict should be set aside. In M the court also stated (at 494) that '[i]n most cases a doubt experienced by an appellate court will be a doubt which a jury ought also to have experienced' and '[i]t is only where a jury's advantage in seeing and hearing the evidence is capable of resolving a doubt … that the court may conclude that no miscarriage of justice occurred': see also MFA v The Queen (2002) 213 CLR 606; [2002] HCA 53 at [59]. [85] As was pointed out by Hayne J in Libke v The Queen (2007) 230 CLR 559; [2007] HCA 30 at [113] (Gleeson CJ and Heydon J agreeing), for a verdict to be unreasonable it is not enough that a review of the evidence shows only that it was possible for a jury to reach a different conclusion. However, for a court to conclude there was no miscarriage, it is not sufficient that there was evidence on which a jury could convict. If after giving full weight to the primacy of the jury, the court is left in reasonable doubt as to the verdict, it is only where the jury's advantage in seeing and hearing the evidence is capable of resolving the doubt that the court can conclude that there was no miscarriage of justice. [86] In considering the issue in a case such as the present where the Crown relies on circumstantial evidence, it is important to bear in mind that the task of the appellate court is to consider and weigh all the circumstances in considering and deciding whether there is an inference consistent with innocence reasonably open on the evidence. The evidence is not to be looked at in a piecemeal fashion: R v Baden-Clay (2016) 258 CLR 308; [2016] HCA 35 at [46]-[48]."

[108]

Count 2

It is important to note that on the day of the payment instruction the appellant emailed Mr Waugh, advising that he assumed Ms Chatterjee was doing documentation for the loan amount and that the payment was made in two tranches, and Mr Waugh responded that Ameeta was working on two documents.
Two days later, Ms Chatterjee produced a buy and sell agreement without apparently receiving any further instructions (see [98] above). I have not set out her version of the agreement but it referred to a payment of $12.5 million. As I have indicated the agreement was headed "Agreement to Buy and Sell". That is of some significance as Ms Chatterjee, who was not called to give evidence, was directly involved in the negotiations leading up to the payment and it can be inferred she believed the document she prepared reflected the outcome of those negotiations. It is correct that Mr Waugh made certain changes (see [98] above), but as is apparent from the emails to which I have referred at [83]-[85] above, he was involved in the final stages of negotiations with Mr Goenka which led to the waiver and the payment instructions. It may be inferred that the agreement he produced reflected his view of the outcome of the negotiations. It is of some significance that the jury was not satisfied beyond reasonable doubt that he had aided and abetted the appellant in conduct that resulted in falsification of the books of the company, namely, the buy and sell agreement.
As I have pointed out, on 12 September 2011 Ms Chatterjee forwarded the first draft of the Facility Agreement which Mr Waugh stated had to be discussed with Mr Goenka to achieve closure (see [101] above). That document was forwarded to Mr Travis Young "[a]s discussed". Mr Travis Young was not called.
It is true that very little if anything was done to advance the documentation up to December, but having regard to Mr Waugh's email of 3 December 2011 it is evident he was seeking to obtain finality with Mr Goenka. This occurred before the involvement of Dr Brixel.
It is also evident that completion of the documentation became more urgent following Dr Brixel's intervention (see the email to which I have referred at [108] above). Mr Waugh indicated that one reason for the delay was that "the guy BK allocated to review legally … just got to it yesterday". I have set out the concluding portion of the negotiations at [109]-[115] above and it is unnecessary to repeat what I there set out.

[109]

Count 1

There is an initial difficulty in dealing with count 1 in that it is not clear whether the jury arrived at the verdict of guilty on the basis that one or both of the payment instructions were false and the appellant was reckless in giving the instruction. As I indicated, the judge in sentencing proceeded on the basis that only one of the stated purposes was false, namely, the $2.5 million payment said to be a loan. However unsatisfactory it may be that although the case was particularised and conducted on the basis that the stated purpose for both payments was false, having regard to the manner in which the case was put to the jury in determining whether the verdict was unreasonable, it is necessary to consider whether the jury was entitled to be satisfied beyond reasonable doubt that the stated purpose for either of the payments was false and the appellant was reckless in giving the instruction, as distinct from determining that both were false and the appellant was reckless in giving both instructions.
I have set out at [679]-[680] above the inferences that in my view the jury was entitled to draw of the importance in the appellant's mind of resolution of the issues in relation to the Held Back Amount and the infusion. Importantly, it would be open to the jury to find that the payment was made in connection with the obtaining of the waiver and the release of the Held Back Amount.
The real question in my mind, at least as to the purpose of the $12.5 million payment, is whether in the circumstances where there was an apparent inability to agree on the manner in which the infusion was to otherwise take place, the parties agreed to resolve the issue by entering into an agreement in the nature of the buy and sell agreement (and make the $2.5 million loan) in substitution for the obligation to make the infusion. If the Crown was unable to exclude that hypothesis beyond reasonable doubt the question remains even on that hypothesis whether the jury was entitled to be satisfied beyond reasonable doubt that the appellant was reckless in stating that the payment was made for marketing and advisory services.
The hypothesis is not purely speculative. The parties were evidently looking for alternatives to the infusion (see, for example, Mr Kent's email of 3 June 2011 at [75] above, Mr Kent's email of 12 August 2011 at [89] above and a possible provision of the contract in respect of the Pakri Barwadih Mine in substitution for the infusion agreement at [75]-[76] above). Further, as I indicated in dealing with count 2, Ms Chatterjee produced a version of the buy and sell agreement within a very short period of the payments being made and I have concluded that it was not open to the jury to be satisfied that the buy and sell agreement ultimately entered into was a sham.

[110]

Conclusion

In the result I would make the following orders: 1. Appeal allowed. 2. Quash the verdict of guilty on each count of the indictment dated 9 May 2017 and enter a verdict of acquittal on each count.
HOEBEN CJ at CL: I agree with the Chief Justice and the orders which he proposes. I also agree with the additional remarks of Leeming JA.
LEEMING JA: I have had the very considerable advantage of reading the reasons for judgment of the Chief Justice in draft. I agree with his Honour that not only must the appeal be allowed and the guilty verdicts quashed, but also verdicts of acquittal should be entered on each count. The following two points are by way of elaboration, and are not inconsistent with anything in the Chief Justice's reasons.
First, I agree that National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539 should be regarded as bad in law, insofar as it holds that inferences as to the authenticity of a document cannot be drawn from its form and contents. The correctness of this aspect of Rusu was doubted by Gyles and Weinberg JJ in O'Meara v Dominican Fathers [2003] ACTCA 24; 153 ACTR 1 at [85] and by Basten and Gleeson JJA and me in Capital Securities XV Pty Ltd (formerly known as Prime Capital Securities Pty Ltd) v Calleja [2018] NSWCA 26 at [99]-[102]. It was regarded as plainly wrong by Perram J in Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) (2012) 207 FCR 448; [2012] FCA 1355 at [99]-[104], by White J in Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) (2015) 235 FCR 181; [2015] FCA 342 at [94], and, at the appellate level, in Federal Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212 at [64]-[65] (Stewart J, Greenwood and Logan JJ agreeing). There have also been appellate statements that it is not necessary to determine the correctness of Rusu: see for example Jones Lang LaSalle (NSW) Pty Ltd v Taouk [2012] NSWCA 342 at [34]. Such statements also carry weight. Curial paralipsis - pointedly reminding the reader of what a decision is not authority for - is seldom accidental, and serves the useful purpose of flagging the possibility of a future change in the law.
True it is that there have also been statements, including in this Court, endorsing Rusu. Thus it was said in Daw v Toyworld (NSW) Pty Ltd [2001] NSWCA 25 at [46] by reference to Rusu that "[t]he Evidence Act 1995 does not permit documents to authenticate themselves save in limited circumstances". As the Chief Justice notes, that decision was criticised by V Bell, "Documentary Evidence under the Evidence Act 1995 (NSW)" (2001) 5(1) The Judicial Review 1 at 3. So far as I am aware, this aspect of Rusu has never been endorsed by any appellate decision which has reconciled what was said with the authority given by s 183 of the Evidence Act to draw reasonable inferences (including as to authenticity) from the document sought to be tendered.

[111]

Gregg v R - ANNEXURE - Written directions (7577260, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 September 2020

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