Issakidis v R [2019] NSWCCA 302 | Case summary

Court of Criminal Appeal (NSW)|2019-09-02|Before: Bathurst CJ, Hoeben CJ, Gleeson JA, Harrison J

Background facts - Crown case at trial

The summary below is taken from the judgment of Beech-Jones J in sentencing Mr Dickson (R v Anthony James Dickson (No 18) [2015] NSWSC 268) and from that of Harrison J in sentencing the applicant (R v Issakidis [2018] NSWSC 378). The background facts were not contested on the appeal, nor insofar as they involved the activity of Mr Dickson at the trial before Harrison J.
On 9 March 2006, Neumedix Health Australasia Pty Ltd (NHA) was incorporated. The two directors of NHA were the applicant and Mr Dickson. The applicant was described in the Crown's submissions as "a former practising lawyer, turned property developer". Mr Dickson an accountant was a former principal at Ernst & Young.
In essence, the Crown case on Count 1 was that the applicant and Mr Dickson agreed to cause NHA to make false depreciation claims in its tax returns. The depreciation claims were largely referable to the alleged cost of acquisition by NHA of three medical technologies, even though it was agreed by the applicant and Mr Dickson that no such cost was to be incurred. The Crown case was that the applicant and Mr Dickson agreed to make the false depreciation claims to enable NHA to avoid incurring tax liabilities on income that it was deemed to have received as the owner of units in a number of trusts which had been arranged between Mr Dickson, the ANZ Banking Group (ANZ) and some of ANZ's clients.
In essence, the Crown case on Count 2 was that the applicant and Mr Dickson agreed to deal with the amounts in various bank accounts that represented the cash distributions from the trusts to NHA. These amounts were the 'proceeds of crime' because they were derived from the conspiracy the subject of Count 1, and the applicant and Mr Dickson knew that the funds would not be required to meet NHA's tax liabilities as NHA's taxable income would be offset by false depreciation deductions and the funds would not be required to make payments on the agreements the subject of the claims for depreciation as no genuine obligation to make those payments would be incurred. Instead, the applicant and Mr Dickson agreed to cause the funds to be distributed offshore and then repatriated to Australia, largely for their own purposes.

The financing transactions

Between 2005 and 2006, Mr Dickson negotiated financing transactions with ANZ whereby one of ANZ's clients sold an asset to a partnership consisting of the client and the trustee of a unit trust, namely ANZ Investment Holdings Ltd. ANZ provided debt financing to fund the purchase. The asset was subsequently leased back for use in the client's business. NHA acquired 100 per cent of the units in the unit trust.
The result of each such transaction was that the client received an injection of cash from selling its asset. The client subsequently paid rent to use the asset. These rental payments were tax deductible. The rental cost was lower than it would have otherwise been because NHA was effectively contributing part of its tax losses to make the transaction more commercially attractive. The trust generated assessable income from the lease payments, although the majority of that income was used to pay the debt, interest and fees owing to ANZ.
Pursuant to the relevant taxation legislation, all of the net income of the trust was to be treated as taxable income of NHA (it was common ground that this was correct although the legislation which led to this conclusion was not identified). In return for NHA assuming the obligation to declare all of the net income of the trust in its tax return, NHA received a cash distribution from the trust of 9 per cent of the trust's taxable income. For this arrangement to make commercial sense for NHA, it had to have available to it significant amounts of tax losses to offset the taxable income it was required to declare. Mr Dickson assured ANZ on multiple occasions that NHA had generated, or would generate, such deductions by NHA paying large amounts to acquire particular medical technologies. Mr Dickson assured ANZ that NHA was in effect "selling tax losses" arising from the large depreciation expenses on medical technologies to acquire funding.
The Crown case was the applicant and Mr Dickson agreed that NHA would not incur such obligations to acquire particular medical technologies, and no such obligations were in fact incurred. Instead, the applicant and Mr Dickson used the majority of the cash distributions representing 9 per cent of each trust's taxable income for their own purposes.
Four such transactions were arranged involving three of ANZ's clients: Bluescope Steel, Gunns and Incitec. The relevant trust deeds were executed on 30 August 2006, 17 December 2006, 1 August 2008 and 21 September 2009. Overall, $68,405,000 was distributed to NHA by the four trusts between 26 October 2006 and 24 December 2009. As these cash distributions represented 9 per cent of each trust's taxable income, it follows that it was envisaged that over $750 million in assessable income would be notionally distributed to NHA and declared by NHA in its tax returns.
However, just over $378 million was notionally distributed and declared in NHA's tax returns during the 2007 to 2010 financial years.

The medical technologies

During the period of the two conspiracies between 2005 and 2012, NHA portrayed itself as an acquirer and exploiter of medical technologies at least in an amount sufficient to generate the tax losses which were offset against the income received from the lease transactions. NHA employed staff and had office premises. The Crown case at trial was not that the entirety of NHA's business was a façade, rather the Crown was concerned with the means by which NHA was alleged to have acquired three medical technologies that were the subject of the depreciation claims in NHA's tax returns during the 2007 to 2010 financial years.

The first medical technology: 'Genvax'

The first of the three medical technologies was a cancer vaccine, known as Genvax. During 2006, the applicant and Mr Dickson met with the developer, a Dr Stephen Ralph, to discuss the terms upon which Genvax might be acquired and exploited.
During the trial, the Crown tendered various executed and unexecuted agreements which purported to transfer the intellectual property in Genvax to various entities. With the exception of the agreements signed by Dr Ralph, the Crown case at trial was that it could not, and was not required to demonstrate when the various agreements were executed as Mr Dickson manufactured agreements from time to time to further his and the appellant's interests.
On or about 9 January 2007, Dr Ralph and his company, Genvax Pty Ltd, executed an agreement assigning the intellectual property rights in Genvax to Athena Health Patents Incorporated (Athena) for 50 per cent of the gross revenues on commercialisation.. The assignment was executed on behalf of Athena by a solicitor purporting to act under a power of attorney executed by one of Athena's corporate directors, Flying Dragon Group International Ltd. This is not the relevant assignment the subject of the false depreciation claims in NHA's tax returns.
Athena was incorporated in the Cayman Islands and was initially named Neumedix Biotechnology International Limited. Its name was changed to Athena in January 2007.
On or about 15 January 2007, a loan agreement was executed in which Athena agreed to a non-recourse loan of up to $1.8 million to Genvax Pty Ltd for the development of Genvax. On or about the same day, a project deed was executed concerning the development and exploitation of Genvax.

The second medical technology: 'CG Surgical Clip'

The second medical technology was the 'CG Surgical Clip' (CGS). CGS is a device developed in New Zealand that is placed on the spine during surgery. On or around 2 March 2007, a representative of CG Surgical Limited executed an agreement assigning the intellectual property rights in CGS to Athena for 50 per cent of the proceeds of commercialisation. On or about the same date, CG Surgical Limited signed a loan agreement with Athena in which Athena agreed to advance up to NZD $825,000 for the development of CGS.
Ultimately, only a small portion of the funds were advanced by Athena to CG Surgical Limited and there was almost no further development of CGS due to a commercial dispute arising shortly after these documents were executed.

The third medical technology: 'Cologene'

The third medical technology was a diagnostic test for colorectal cancer developed by Dr Jenkins from the United Kingdom known as 'Cologene'.
An agreement was produced whereby Dr Jenkins' company, Armedillo Health Ltd, assigned the intellectual property rights in Cologene to Athena in exchange for 40 per cent of the proceeds of commercialisation. A further agreement was produced whereby Athena agreed to lend up to £1.3 million GBP for the development and exploitation of Cologene.
In a further agreement, Athena purported to assign the rights for Cologene to NHA for the territory of Europe (excluding the United Kingdom), USA, Mexico, Brazil and South Africa for consideration of £200 million GBP. In another agreement, Athena purported to assign the rights to Cologene for the rest of the world to Neumedix Health New Zealand Ltd for £200,000,000 (GBP). These agreements are significant due to their inconsistency with the assignment agreement for Cologene provided to the ATO which was said to justify the depreciation claims for the purported acquisition of Cologene by Neumedix.

Walsh & Walsh accountancy firm

In late 2007, Mr Dickson retained the accountancy firm, Walsh & Walsh, to prepare accounts for NHA. A memorandum and an assignment agreement for Genvax was sent from Mr Dickson's email address to Walsh & Walsh for the purpose of preparing NHA's accounts. The Crown case was that these documents "advised Walsh & Walsh that the entity that assigned the intellectual property to NHA was not Athena but another company, Karkalla International Holdings, and that it did so on different terms to those set out in the Genvax assignment agreement even though the latter bore a date eleven months prior". It was not contended that the applicant wrote the emails. It should be noted that Mr Dickson denied sending the emails.
A memorandum was sent to Walsh & Walsh in November 2007 advising them that the intellectual property in CGS had been assigned on different terms to those set out in the CGS Assignment agreement. The Crown case was that the combined effect of the material sent to Walsh & Walsh suggested that the entity that had assigned the intellectual property to CGS to NHA was Karkalla International Holdings not Athena.
Just prior to lodging NHA's tax returns for the financial year 2007, Mr Dickson "caused NHA's accounts to be completely rewritten to remove the effect of the agreements previously sent to Walsh & Walsh, and substituted the effect of the Genvax Assignment agreement and the CGS Assignment agreement".
The agreements sent to Walsh & Walsh in early 2008 included a Deed of Option dated 6 March 2007 which purported to enable NHA to acquire the intellectual property in Cologene from Karkalla International Holdings at its election was inconsistent with the Cologene Assignment agreement under which NHA purported to acquire the intellectual property in Cologene from Athena in November 2007.

NHA's tax returns and the tax audit by the ATO

On 26 February 2009, NHA lodged its tax return for the 2007 financial year. Although signed by Mr Dickson, the tax return was not signed by the applicant. The tax return disclosed $47,837,698 in income from the unit trusts which was offset by various expenses. The largest of the expenses claimed to offset the taxable income was a claim for $76,071,054 in depreciation expenses, which largely consisted of claimed depreciation expenses in respect of the alleged cost of NHA acquiring the intellectual property rights in Genvax and CGS.
On 17 September 2009, NHA lodged its tax return for the 2008 financial year. As with NHA's tax return for the 2007 financial year, the tax return was signed by Mr Dickson, but not by the applicant. The tax return disclosed $77,229,906 in income from the unit trusts which was offset by $98,470,850 claimed in depreciation expenses. The claimed depreciation expenses largely consisted of the alleged cost of NHA acquiring the intellectual property in Genvax, CGS and Cologene from Athena.
Tax assessments which accepted the depreciation claims were automatically generated following NHA lodging its tax returns for the 2007 and 2008 financial years,. As NHA was recorded as making a tax loss, it did not incur any tax debt. However, the tax returns attracted the attention of officers of the ATO and the ATO subsequently commenced an audit.
On 10 February 2010, the ATO wrote to NHA broadly requesting the production of documents, including any valuations of the relevant medical technologies that supported NHA's depreciation claims. On 15 February 2010, Mr Dickson sought an extension of the time to comply with the ATO's request.
Between March and May 2010, Mr Dickson provided the ATO with fourteen folders of documents in response to the ATO's request. The documents were said to support the amounts stated in NHA's tax returns for the 2007 and 2008 financial years, including the depreciation claims. Three unsigned agreements which each purported to record an assignment of the intellectual property in one of the three medical technologies from Athena to NHA were included in these documents. Each of the three agreements had a handwritten annotation indicating that it represented the executed copy.
The Crown contended at trial that the content of the three agreements and their annotations, the contents of the tax returns and various unsigned minutes of NHA provided to the ATO that recorded NHA entering into these agreements amounted to an unambiguous assertion to the ATO that NHA had acquired the three medical technologies on the terms provided in those agreements.
Mr Dickson also provided to the ATO three documents purporting to be valuations of the medical technologies by the Karkalla Biotechnology Group. The valuations stated that the value of Genvax at December 2005 was USD 626 million, the value of CGS at February 2006 was between $103 million USD and $119 million USD and the value of Cologene at November 2007 was $2.541 billion USD. The valuations were each signed with the name "Peggy Wong, President Karkalla" printed beneath the signature. Each valuation also mentioned her as "Peggy Wong PhD President Karkalla".
The Crown's contention was that these valuations were concocted by, or at the direction of, Mr Dickson and that Dr Peggy Wong either did not exist, or if she did, she had no connection with the valuations. This supporting material included computer records indicating that the documents and their logo were created significantly after the dates referred to in the valuations; documents demonstrating that Mr Dickson controlled various companies named 'Karkalla'; NHA hosting a contact email address for Peggy Wong in Australia, despite it being alleged that she was based overseas; and various other documents purportedly signed by Penny Wong whereby she was attributed with a number of inconsistent titles and job descriptions.
On or about 17 May 2010, Mr Dickson caused NHA's tax return for the 2009 financial year to be lodged. The return declared $123,841,532 in assessable income from the unit trusts and claimed $106,689,541 in depreciation expenses. On 1 September 2011, Mr Dickson caused NHA's tax return for the 2010 financial year to be lodged. The return declared $129,474,513 in assessable income from the unit trusts and claimed $109,021,139 in depreciation expenses. The bulk of the depreciation expenses claimed in each return related to the alleged cost of NHA acquiring the three medical technologies. When the depreciation claims were combined with carried forward losses from previous financial years attributable to depreciation claims in those years, the tax assessments automatically generated did not create a tax debt in favour of the Commonwealth.
On 15 February 2012, Mr Dickson caused NHA to lodge amended tax returns for each of the 2007 to 2010 financial years. The income declared in the amended returns was $18,550,000 in 2007, $77,229,906 in 2008, $30,868,000 in 2009 and $129,474,513 in 2010. The trial judge stated at [34] that "[t]he first and third of these figures were incorrect" as "[t]he correct amounts were in the order of those disclosed in the 2007 and 2009 initial returns". The amount of depreciation claimed in each amended return was $76,888,893 in 2007, $118,570,332 in 2008, $104,042,825 in 2009 and $102,825,040 in 2010. The total of the amount of income declared from the unit trusts was in excess of $378 million and the amount of depreciation was just over $402 million.
Following an audit, the Federal Commissioner of Taxation issued amended assessments for income tax for NHA which after disallowing all the depreciation expenses, assessed the taxable income of NHA for the 2007 financial year at $66,036,667, for the 2008 financial year at $76,886,420, for the 2009 financial year at $123,772,390 and for the 2010 financial year at $128,711,314. The tender of this material (Exhibit M) is the subject of ground 2 of the grounds of appeal.

The applicant's case at trial

The applicant denied any involvement in the creation of the false material and that he knew that it was not genuine.
The applicant's case effectively was that he believed that Athena was a company backed by international investors and he knew nothing of the financial activities of Mr Dickson. His case was that his primary role was liaising with investors, negotiating the medical deals and monitoring ongoing expenditure concerning them. He stated the material sent to Walsh & Walsh was generated by Mr Dickson and merely passed through him. He stated he had no knowledge of Mr Dickson's fraudulent activities and indeed sought to distance himself from Mr Dickson by emphasising the latter's fraudulent conduct. Thus, during this address to the jury his counsel made the following remarks: "Now let me be crystal clear on what the defence position is in relation to Anthony Dickson. He is a liar. He is a deceiver. He has, you would conclude, committed very serious criminal offences against the Commonwealth of Australia and in all likelihood the Internal Revenue Department of New Zealand. But just because Anthony Dickson is a liar, a deceiver, and a criminal, do not presume Michael Issakidis is. … If Anthony Dickson was in the witness box right now and told you the sun was up, I would think you would all look outside., He is pathologically dishonest and he is a deceiver, and this is where you use your common sense, and when you assess the evidence Michael Issakidis gives, and he gives evidence that he was deceived, and I don't know if any of you have ever in your personal life or professional life has been deceived by someone, but there is that horrible moment when you realise you have been deceived, that you look back in hindsight and you might realise that all of a sudden they were always deleting messages on their phone or they always had late business meetings. You look back in hindsight and you feel like a fool because it is so obvious in hindsight you were deceived. And I will make some submissions about that later on."

The jury deliberations

The jury was sent out to deliberate at 1pm on Day 3 of the trial judge's summing up, being Thursday, 25 May 2017. At this time, the trial judge told the jury: "Now I can't emphasise enough that it is vital to both the accused and to the community at large that when you begin your deliberations you do so calmly and carefully. There is absolutely no time pressure on you to reach a verdict by any particular time or date and you should not at any time feel that there is. We'll be here for as long as necessary. You may take as long as you want and there will be no need for us to interrupt you unless you want to be interrupted for some more helpful information to assist you. Obviously the stakes at large in this trial are very high and they are simply too high for you to feel any pressure to produce your conclusions, your verdict, in any particular short time. I cannot emphasise enough you should take your time and be thorough and attend to what is not an easy task, no one suggests that it is."
The jury was sent home at 4pm that day.
On Day 4, Friday 26 May 2017, the jury commenced deliberations and were sent home at 12.55pm.
On Day 5, Monday 29 May 2017, the jury commenced deliberations at 10am and were sent home at 3.55pm.
On Day 6, Tuesday 30 May 2017, the jury commenced deliberations at 10am. At 3.50pm, Court resumed in the absence of the jury. The trial judge read out the following jury note sent that day: "Re Friday a juror has a commitment for the afternoon of Friday the 2nd of June. If we are still deliberating we propose to finish at 1pm on Friday but we will be starting earlier on Thursday and Friday with shortened breaks to compensate".
Subsequently, the trial judge stated in the presence of the jury: "Thank you for your note. I have discussed that with the parties and we have no difficulties at all with that. It obviously bears witness to the fact that you have all been working very hard, a fact for which everybody is appreciative."
After making reference to the following day, Wednesday 31 May 2017, being a "lay day" where the jury would not deliberate due to one juror attending a funeral, the trial judge stated: "You should also not feel under pressure from the Court to speed up, and certainly not to rush your decision. I do understand, however, that after 30 or 31 or more days it is likely or at least possible that one or some of you may be feeling pressure from one or other source extraneous to the Court. That is just the nature of service as a juror. It is not something which I or people in my position are unaware. We are fully aware that you will be, possibly, if you like, to use the vernacular, being pulled in more than one direction. You should, however, do the best you can to ensure that the major pull on your time and resources is the decision in this case and I have no doubt that this is how you approach the matter."
On Day 7, Thursday 1 June 2017, the jury commenced deliberations at 10am and were sent home at 3.55pm.
On Day 8, Friday 2 June 2017, the jury commenced deliberations at 10am. Court resumed at 12.50pm in the absence of the jury and the trial judge stated: "I have received a jury note requesting effectively letters that they might be able to use to appease their employers. I anticipate some are getting a bit of flack. I have given you the terms of the jury note. … And I have prepared a letter which I think you are agreed should be given to each of the jurors".
Subsequently, in the presence of the jury the trial judge said: "I have your jury note and I have prepared a letter which I will just distribute to each of you. In brief those letters are addressed 'to whom it may be concern' and they describe you as the bearer. There are protections in the Jury Act for jurors against the prospect that employers may become disgruntled with them. If those letters aren't in terms adequate and anybody encounters ongoing problems then my name and address is there and if they want to take it up they can come to this Court and I will have a discussion with them about it. That generally has never occurred in my experience for reasons that I am never able to understand. As I said if there are any other problems just let me know. Now obviously we know from your letter and from the fact that we haven't concluded that you will be back on Monday. But I do say, again, no discussions with anybody. If employers give you any problems just refer those matters to me and we will take care of it. You are entirely protected in the sanctifying task that you are required to carry out".
The jury was sent home at 1pm.
On Day 9, Monday 5 June 2017, the jury commenced deliberations at 10am and were sent home at 4pm.
On Day 10, Tuesday 6 June 2017, the jury commenced deliberations at 10am. Prior to the jury being sent home, the trial judge noted in the presence of the jury that a jury note had been received requesting a copy of the Crown and Defence closing submissions. The trial judge granted the request.
On Day 11, Wednesday 7 June 2017, the jury commenced deliberations at 10am and were sent home at 3.30pm after the trial judge granted the requests in two jury notes received that day: first, to adjourn at 3.30pm that day, and second, to allow a juror access to his or her phone at lunch time.
On Day 12, Thursday 8 June 2017, the jury commenced deliberations at 10am and were sent home at 4pm after the trial judge stated that he trusted that the jury had received the testimony of Dr Ralph pursuant to a request in a jury note sent that morning.
On Day 13, Friday 9 June 2017, the jury commenced deliberations at 10am and were sent home at 1.35pm. Prior to being sent home, the trial judge thanked the jury for their "persistent attention to matter" and stated that jury deliberations would resume on Tuesday due to a long weekend.
On Day 14, Tuesday 13 June 2017, the jury commenced deliberations at 10am. In the absence of the jury, the trial judge noted the receipt of two jury notes; Jury Note 21 and Jury Note 22. Jury Note 21 requested a calculator and then stated: "On Tuesday could we please finish at 1.30pm. A juror has a job interview that they have tried to postpone at [a] later date in time and this is the only time available for the interview. Thank you."
In response to Jury Note 21, the trial judge stated: "Subject to what anybody says my present inclination is to tell the jury, and necessarily the particular juror, that I do not propose to adjourn at 1.30. I suppose there is an adjunct to that; that juror ought to have access to his or her phone to indicate to that prospective employer what the position is".
The trial judge subsequently read the content of Jury Note 22 in the absence of the jury: "I understand that you provided all of us with a letter, however my work requires further documentation saying that the case has gone into the tenth week and will continue until the jury comes to a verdict. I apologise for the inconvenience".
The trial judge subsequently stated: "That is the end of that note. I think I will tell the jury in response to that note and in parallel with the request in the previous one that if any employer, present or prospective, has any difficulty with the fact that a juror either cannot attend an interview or cannot attend work then he or she will have to come along and tell me about that here in court. The case is in its eleventh day of jury deliberation at the moment and I think the case has to take precedence".
The Crown and trial counsel for the applicant agreed with the course of action proposed by the trial judge. At 10.30am, the jury was returned to Court and the trial judge made the following remarks to the jury: "The balance of the first note from Friday and the substance of the note from this morning are to the same effect. To be clear about it, I am not prepared to adjourn at 1.30 today for a job interview. If a juror has difficulty arranging an interview out of time then the prospective employer can come along to court there and talk to me about it. If that juror needs a phone when we adjourn to speak to that prospective employer then access for that purpose is all right. I am not prepared to give you another letter. I thought the letter in terms made it clear that as jurors you had an obligation to complete this case. The fact that the estimate of 10 weeks was given does not mean your obligation as a juror or the public's expectation of your duties as a juror will immediately come to an end when the ten weeks expires. Once again, if any of you are having difficulty with an employer you should tell him or her once again that you are involved in very important business and I say, not facetiously or in terrorem, if that employer continues to give anyone a hard time then tell them to come to Court 2 at Darlinghurst at any time to suit them, I will be here and I will tell them what the position is. Without debasing the currency this is the Supreme Court of New South Wales, it is not a tv quiz show and it is very important. I will not have people giving people a hard time as employees because the case has run slightly longer than expected. As I say I will give you the calculator. The employee who has the job interview will have the phone and can telephone that person. I appreciate the sensitivity of that but that is just as may be. If you have any other questions when you resume your deliberations that arise out of anything I have had to say please let me know and I will deal with it."
After these remarks, the jury continued their deliberations at 10.35am. The jury returned with a verdict of guilty to both counts on the indictment at 2.35pm.

The applicant's submissions

The applicant sought leave pursuant to r 4, to raise this ground of appeal.
In written submissions filed on behalf of the applicant, the applicant submitted that the trial judge's refusal of to adjourn at 1.30pm to allow the juror to attend his or her job interview (Jury Note 21) and the refusal to grant a second letter to a juror's employer (Jury Note 22) "put impermissible pressure on the jury which had not at any stage indicated that they were having difficulties with or in relation to their deliberations". The applicant referred to the fact that no Black direction had been considered or given, and that no jury note indicating that the jury was having problems in deliberating had been received. In written submissions, the applicant submitted that "[t]he thrust of both jury notes was a request for more time to deliberate".
At the hearing, counsel for the applicant accepted that in essence, the Constitutional contention was that pursuant to s 80 of the Constitution a person charged with a Commonwealth offence is entitled to a trial by a jury and according to law, and that because of the trial judge's interference with the free deliberations by the jury, the applicant did not have a trial according to law.
Counsel for the applicant accepted that if Ground 1 is made out, the constitutional contention becomes otiose and conversely, that if the applicant fails on Ground 1, he must also fail on the constitutional contention.
Counsel for the applicant, referring to a decision of this Court, Phan v R [2018] NSWCCA 225 at [140]-[141], submitted that there are no legislative fetters on the length of time that a jury may deliberate and that no judicial officer can limit jury deliberations where there was no attempt or no indication from the jury that they had any difficulty deliberating.
Counsel for the applicant submitted that Jury Note 21 "indicated a wish to continue deliberating", and was "not an indication of any dissension or any disharmony". He submitted that it was "a reasonable request" by the juror and "entirely appropriate in today's social and economic setting". He referred to the necessity of being "aware that in long running trials of this nature the sort of people who may well be sitting are going to be people who are on welfare, could be public servants… and people who are retirees".
Counsel for the applicant submitted that the remarks by the trial judge that he was "not prepared to adjourn at 1.30 today for a job interview" and that "the prospective employer can come along to court" if the interview could not be re-arranged put pressure on that juror. He accepted that this was speculative but submitted that speculation is "all we can do … in a situation like this".
Counsel for the applicant accepted that there was no mention of any dissention on the part of the jury during their 11 days of deliberation, however, he submitted that Jury Notes 21 and 22 indicated that the jury wished to continue deliberating. He submitted that the refusal by the trial judge to allow the juror to attend the job interview and write a second letter deprived the jury of the opportunity to continue deliberating. He submitted that the jury returning a verdict a couple of hours after the remarks by the trial judge "seems to be contrary indicated by the jury notes".
Counsel for the applicant submitted that the refusal of the trial judge to grant the "reasonable request" in Jury Note 22 to provide a second letter to the juror's employer also put improper pressure on the juror. In written submissions, the applicant submitted that the trial judge stating that the prospective employer could attend the Supreme Court to speak to him was "unreasonable and unnecessary and, in its effect, applied improper and undue pressure on the jury". He also referred to the fact that no attempt was made by the trial judge to ascertain whether there were any problems with the jury's deliberations.
Counsel for the applicant submitted that it was "a highly complex case" and "there was much for the jury to consider in coming to a true verdict". He submitted that when looking at the jury notes, "improper pressure has been placed on the jury" giving rise to "impropriety within State law or under State jurisdiction as well as under the Commonwealth jurisdiction".
In written submissions, the applicant referred to R v Tangye (1997) 92 A Crim R 545 ('Tangye') submitting that "inconvenience and expense should not be measured against justice" and that the failure by the trial judge to grant the reasonable requests may have "created a real risk of interfering with the jury's freedom to deliberate without pressure being imposed upon them".
The applicant further submitted that there was "a real risk that the jury could have viewed the trial judge's actions as indicating that no further time was required to deliberate and that, in consequence, the perception being that the judge considered the proper verdict to be guilty".
In written submissions, the applicant further submitted that for the reasons advanced in support of Ground 1, the trial judge was "in breach" of s 80 of the Constitution which requires that the trial on indictment of any offence against a law of the Commonwealth be by a jury. The applicant submitted that a jury, for the purposes of s 80, "has as its essential feature the requirement that it be provided such means as enables freedom to deliberate so that a true verdict according to their oath can be delivered". The applicant submitted that "the trial judge's interference with the free deliberation by the jury to which the accused and the community (including individual jurors) were entitled was in breach of s 80 of the Commonwealth Constitution". He further submitted that consent given to the proposed action by the applicant's solicitor advocate and the Crown Prosecutor could not provide a basis to waive the right of freedom to deliberate for the purpose of s 80.
In reply, counsel for the applicant submitted that there was a history of the jury communicating issues of convenience to the trial judge and for those requests to be given appropriate weight and reasonable requests satisfied.

The Crown's submissions

The Crown submitted that the appellant's contention of improper pressure being placed on the jury was "speculation heaped on conjecture" and that there was "no evidence of improper interference with a jury's deliberations".
In written submissions, the Crown submitted that the decisions by the trial judge to refuse the requests in Jury Notes 21 and 22 did not violate "the fundamental principle that the jury must be free to deliberate without any pressure being brought to bear on them", referring to Black v R (1993) 179 CLR 44 at 40; [1993] HCA 71 ('Black'). Instead, the Crown submitted, the refusals were "reasonable and entirely appropriate directions" in the circumstances, and were "prudently discussed with the parties beforehand and no objections were taken".
The Crown also referred to the regular reminders by the trial judge to the jury that they were under no pressure to reach a verdict by a certain time and that they could deliberate for as long as they needed.
The Crown, referring to Tangye, submitted that the applicant had not established that the trial judge's actions created a "real risk" of the jury failing to give the issues free deliberation. The Crown submitted that in fact the refusal to grant the request in Jury Note 21 allowed the jury to continue its deliberations and could not be construed as communicating to the jury that it must conclude its deliberations, particularly given the numerous past directions given by the trial judge. The Crown further submitted that the refusal was reasonable given that it is possible for a job interview to be conducted outside Court hours and avoided a delay in the trial that could have created more time for other issues to arise that threatened the continuation of the trial. The Crown further submitted that it cannot be inferred from the trial judge declining the request in Jury Note 21 that the juror who made the request, or any juror, compromised their verdict in any way so that a juror could attend the job interview.
In regards to Jury Note 22; the Crown submitted that the refusal to provide a second letter could not be construed as communicating to the jury that it must conclude its deliberations and was reasonable given the jury had already been provided with a letter from the Court that informed their employers that the trial was continuing and provided the Court's contact details should the employer have any further enquiries.
The Crown further submitted that the fact that there had been no previous indication by the jury that they were having difficulties reaching their verdicts supported the conclusion that the conduct of the trial judge did not have the prejudicial effect contended for by the applicant.
The Crown submitted that Jury Notes 21 and 22 were not, as the applicant submitted, a request for more time to deliberate. Instead, the Crown submitted that they were "two specific requests from two individual jurors". The Crown further submitted that there was no evidence to support the applicant's submission that there was a "real risk" that the jury perceived that the trial judge considered the proper verdict to be guilty.
In regards to the Constitutional contention, the Crown disputed that the conduct of the trial judge was "in breach" of any such principle in s 80 for a jury to be free to deliberate without any pressure. The Crown further submitted that due to a lack of factual basis, this was "not an appropriate vehicle to consider any wider implications for jury 'freedom' under s 80".

Consideration

The applicant conceded that as the issue the subject of this ground was not raised on appeal, r 4 of the Criminal Appeal Rules (NSW) applied and it was necessary for him to be granted leave to argue this ground.
We have some doubt whether this concession was correct as the ground does not relate to a "direction", an "omission to direct" or a "decision as to the admission or rejection of evidence". However, as the matter was not argued and we are of the view that the matter can be conveniently disposed of on the merits, it is appropriate to grant leave to the extent necessary.
A trial can miscarry when a trial judge puts undue pressure on a jury to conclude their deliberations or to reach a particular result.
In Black the plurality stated that "[a] jury should not be instructed that public inconvenience or expense would be incurred if they were not to agree or that there must be 'give and take and adjustment' in reaching a verdict". They stated at 51 that such a direction will result "in the jury failing to give the issues that free deliberation to which both the accused and the Crown were entitled":
In Tangye, the trial judge was told by the jury they could not reach a verdict. Before giving a Black direction, he told the jury that it was in the interests of everyone that the trial be concluded and a probable consequence of disagreement was a retrial. Referring to Black, Hunt CJ at CL at 550-551 stated that "the fundamental principle [was] that a jury must be free to deliberate without any pressure being imposed upon them, so that individual jurors are not pressured to join in the view taken by the majority against their personal views". He noted that it was said in Black that "in exhorting a jury to reach agreement, the trial judge must not refer to the inconvenience and expense incurred in the event of a disagreement". He stated, however, at 551 that what occurred in the case then before the Court did not infringe the principle.
In Director of Public Prosecutions Reference No 1 of 2017 [2019] HCA 9; (2019) 93 ALJR 424, the issue was whether it was appropriate in a trial to which the reference related to give what is referred to as a Prasad direction (R v Prasad (1979) 23 SASR 161 at 163) to the effect that it was "open to the jury at any time after the close of the case for the prosecution to inform the judge that the evidence which they have heard is insufficient to justify a conviction and to bring in a verdict of not guilty without hearing more". The Court disapproved such a direction in a trial of legal or factual complexity or in trials of more than one accused. One of the reasons noted at [52] was the danger that "the jury will react adversely to the perceived [judicial] pressure to acquit or that they will be influenced by the perception that the judge considers the proper verdict to be not guilty":
The question in the present case is whether the course taken by the trial judge, in particular his refusal to grant an adjournment to permit a juror to go to a job interview and provide a second letter to a juror's employer, put improper pressure on the jury to reach a verdict and thereby interfered with their free deliberation.
We do not think that the course taken by the trial judge had that effect. At the outset of his directions, the trial judge stated that "[t]here is absolutely no time pressure" on the jury "to reach a verdict by any particular time or date". He accepted the request on 30 May to adjourn early on Friday 2 June if the jury was still deliberating. He again emphasised that the jury should "not feel under pressure from the Court to speed up" or rush their decision. On 2 June he gave a letter to the jurors which he said they could supply to their employers stating that they were "entirely protected in the sanctifying task" they were carrying out. He indicated that if there were difficulties the employers could come to Court to discuss it with him.
We have set out the events of 13 June 2017 at [67]-[72] above. As can be seen, the trial judge refused to adjourn early that day to allow a juror to go to a job interview, concluding that the case had "to take precedence". He again offered to discuss the matter with an employer (or prospective employer).
We do not think that the trial judge's refusal to grant the adjournment put pressure on the jury to reach a verdict. The jury had been deliberating apparently without difficulty for 13 days and the judge was entitled to conclude that the case had "to take precedence". His insistence on the case taking precedence did not seem to me to place any pressure on the jury to reach a verdict one way or the other or to constrain them in their deliberations. Indeed, counsel for the applicant conceded that to state that it did was speculation.
Irrespective of the application of r 4, we are fortified in this view by the fact that the trial judge adopted the course he took after consultation with both the Crown and the accused's representatives who agreed with the approach. They were familiar with the course of the trial and would have been in a position to judge the pressure put on the jury by the refusal to grant the adjournment.
There seems, with respect, no basis for the suggestion that the refusal to supply a second letter to be delivered to the juror's employers in some way pressured the jury to reach a verdict. The judge had given a letter which was not suggested by the parties to the appeal to be inadequate and had invited any employer who had further concerns to come to Court. This could not be said to be placing pressure on the jury.
In those circumstances, this ground of appeal has not been made out.

The applicant's submissions

In oral submissions, counsel for the applicant submitted referring to Pratten v R [2014] NSWCCA 117 at [100] that the opinion of the Commissioner of Taxation was "strictly irrelevant and should not have been admitted in the first place". In written submissions filed for the applicant, he submitted that the evidence was irrelevant because the Commissioner of Taxation's decision to amend such assessments is a matter of opinion which could not rationally affect the assessment of a fact in issue.
At the hearing, counsel for the applicant accepted that the solicitor advocate for the applicant, Mr Shields, did not object nor attempt to limit the admissibility of the evidence. He accepted that r 4 of the Criminal Appeal Rules (NSW) applied and sought leave to raise this ground of appeal.
Counsel for the applicant stated that "[a]ll the jury had to determine was that the depreciation expenses that had been claimed were disallowed" and they did not "have to make a determination about the quantum of the tax that was owing". He submitted that the Commissioner's opinion "could infect" the jury's deliberations. He submitted that Exhibit M "would certainly impact on a jury's assessment of the overall fraud and dishonesty" as the jury would fail to consider the applicant's evidence that he had no knowledge, instead relying on the Commissioner's opinion.
He submitted that Exhibit M would not "have escaped their attention" as they had it before them and the Crown referred to Exhibit M in its closing submissions.
Counsel for the applicant accepted that Exhibit M showed that if the depreciation expenses were dishonestly claimed, there resulted in an advantage accruing to the Commonwealth, and that the issues in the trial were whether the applicant had any knowledge about the dishonestly claimed depreciation expenses, and whether they were in fact dishonestly claimed.
Counsel for the applicant accepted that if the depreciation expenses were disallowed, the Commissioner's Notice of Assessments after the tax audit in Exhibit M accurately represented the tax position.

The Crown's submissions

The Crown submitted that leave should be refused under r 4 as the applicant's consent to the admission of Exhibit M can be seen to have been a considered forensic decision by Mr Shields that must be binding in the circumstances. The Crown referred to the fact that the same document (with some minor, irrelevant edits) had also been admitted by consent at the applicant's two previous trials at which Mr Byrne QC appeared for the applicant instructed by Mr Shields.
The Crown further submitted that leave should also be refused because there was no conceivable prejudice to the applicant resulting from the admission of Exhibit M for four reasons. First, the Crown submitted, Exhibit M did not disclose if the ATO was of the opinion that the applicant or his co-offender had committed the alleged offences, rather it simply showed that the ATO had found that the depreciation expenses were not deductible. Second, the Crown submitted that no witness gave any evidence about Exhibit M. The Crown noted that whilst the ATO Officer Chris Harvey was shown Exhibit M, he was not asked any questions about these entries. Third, the Crown submitted that the Crown Prosecutor did not submit to the jury in its closing address that it should take into account or give any weight to the ATO's finding that the depreciation expenses were not deductible. Fourth, the Crown submitted that "it would have been no surprise to the jury that the ATO's findings were similar to the Crown's allegation at trial".
The Crown submitted that Exhibit M is relevant and prima facie admissible. In written submissions, the Crown submitted that Exhibit M merely showed that the ATO had issued notices of amended assessment for NHA's returns for the 2007 to 2010 financial years.
In oral submissions, the Crown referred to the closing address by the Crown Prosecutor, submitting that the key issue in the case was about the applicant's knowledge. The Crown referred to the following portion of the Crown Prosecutor's closing address: "Now you recall at the start the Crown had spoken about knowledge, the knowledge of Mr Issakidis and indeed the defence has said that is really the main issue and the Crown would agree."
The Crown pointed out that the solicitor advocate for the applicant had been the instructing solicitor in the applicant's previous two trials and "knew it [the case] backwards" and "took all the right points".
The Crown also referred to remarks in the closing address for the applicant at trial emphasising that the relevant issue at the trial was the appellant's knowledge of the fraud.
At the hearing, the Crown submitted that it was assumed that the amended tax assessments were correct and that the only issue was whether or not the applicant knew that the deductions were false. He referred to the portion of the Crown closing address which referred to Exhibit M submitting that the Crown Prosecutor did not refer to the Commissioner's opinion or the amended tax assessments except as set out below: "You will have the exhibits with you. They will include Exhibit M. I don't think we need to go through them but they may be of assistance. Exhibit M is a summary of income tax returns and that is for NeuMedix Health Australasia for Mr Dickson, his wife, Mr Issakidis, his wife, the Thistle Unit Trust, the Walter Unit Trust, the Sulphco Unit Trust and the Phosco Unit Trust. Also these documents, in fact you probably want to stay away from them, but there is real detail in the evidence of Mr Harvey, so this is exhibit N which set out analysis of the tax returns and also at O was an analysis of the amended tax returns".

Consideration

As was conceded, leave under r 4 of the Criminal Appeal Rules (NSW) is required.
In Papakosmas v The Queen (1999) 196 CLR 297; [1999] HCA 37 McHugh J made the following remarks at [72] with respect to r 4: "There is no case for the grant of leave under r 4 unless the Court of Criminal Appeal is satisfied that the appellant has an arguable case that the trial judge has made an error of law or is satisfied that the appellant's conviction is otherwise a miscarriage of justice. Satisfying the Court that there is an arguable case is extremely difficult where the appellant has failed to object to evidence or failed to ask for a direction concerning evidence. In such cases, the trial judge has made no error of law because he or she has not been asked for a ruling. Consequently, an appeal can only succeed if the Court of Criminal Appeal is satisfied that the admission of the evidence or the failure to give the direction has caused a miscarriage of justice, proof of which lies on the appellant."
In ARS v R [2011] NSWCCA 266 Bathurst CJ made the following comments concerning r 4 at [148] (James and Johnson JJ agreeing): "The requirements of r 4 are not mere technicalities. The Criminal Appeal Act does not exist to enable an accused who has been convicted on one set of issues to have a new trial under a new set of issues which could or should have been raised at the first trial: R v ITA [2003] NSWCCA 174; (2003) 139 A Crim R 340 at [94], citing with approval R v Fuge [2001] NSWCCA 208; (2001) 123 A Crim R 310, 319. See also Darwiche v R [2011] NSWCCA 62 at [170]. The appellant must establish that he or she has lost a real chance (or a chance fairly open) of being acquitted: Picken v R [2007] NSWCCA 319 at [20]-[21]." See also Roach v R [2019] NSWCCA 160 at [40]-[42].
We have indicated the way that the applicant conducted its case at trial. It was clearly not in issue that if the depreciation expenses were in fact fraudulent then the returns lodged by Mr Dickson grossly underestimated the net income derived by NHA in the years in question. That is why, as the Crown pointed out, it was not necessary for the jury to go to the tax returns or the assessments in any detail.
In these circumstances, the applicant has not shown that he suffered any injustice whatsoever by the admission of Exhibit M, much less lost a chance of acquittal fairly open to him.
Leave to raise this ground should be refused.

Conclusion

In the result, we would make the following orders: 1. Grant the applicant leave to appeal on ground 1 of the notice of appeal. 2. Refuse the applicant leave to appeal on ground 2. 3. Dismiss the appeal.

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: 20 December 2019

HEADNOTE [This headnote is not to be read as part of the judgment] Michael John Issakidis (the applicant) has appealed against his conviction for two offences contrary to the Criminal Code (Cth), namely conspiring to dishonestly cause a loss to the Commonwealth (Count 1) and conspiring to deal with property of a value greater than $1,000,000 believing it to be the proceeds of crime (Count 2). The applicant and his co-conspirator, Mr Anthony Dickson, were the directors of Neumedix Health Australasia Pty Ltd (NHA). The Crown alleged in respect of Count 1 that the applicant and Mr Dickson agreed to cause NHA to make false depreciation claims in its tax returns during the 2007 to 2010 financial years to avoid NHA incurring tax liabilities on income that it was deemed to have received as the owner of units in a number of trusts. The false depreciation claims were largely referable to the alleged costs of NHA acquiring three medical technologies; however, no such acquisition costs were incurred. The Crown case on Count 2 was that the applicant and Mr Dickson agreed to deal with the 'proceeds of crime', being the amounts that represented the cash distributions from the trusts to NHA, as they were derived from the conspiracy the subject of Count 1 for their own purposes. During the trial, the amended assessments of NHA for the 2007 to 2010 financial years issued by the Federal Commissioner of Taxation were admitted (Exhibit M). The jury commenced their deliberations at 1pm on Day 3 of the trial judge's summing up. At this time, the trial judge stated that "[t]here is absolutely no time pressure on you [the jury] to reach a verdict by any particular time or date". On Day 8, the trial judge received a jury note requesting a letter by the trial judge which the jurors could distribute to their employers. The trial judge provided the jurors with such a letter which stated that an employer was invited to attend court if there were any difficulties. 0n Day 14, the trial judge received two jury notes, the first requesting that the jury be allowed to adjourn their deliberations at 1.30pm that day to enable a juror to attend a job interview and the second requesting that the trial judge provide an additional letter to a juror's employer stating that "the case has gone into the tenth week and will continue until the jury comes to a verdict". In the absence of the jury, the Crown and trial counsel agreed with the course of action proposed by the trial judge, namely to refuse both requests. At 10.30am, the jury was returned to Court and the trial judge stated that he was "not prepared to adjourn at 1.30 today for a job interview" and not prepared to provide a second letter to a juror's employer, concluding that the case had "to take precedence". The jury continued their deliberations at 10.35am. The jury returned with a verdict of guilty on both counts at 2.35pm. There were two main issues on appeal. First, whether the trial judge improperly applied pressure to the jury thereby interfering with their free deliberation. Second, whether Exhibit M was "irrelevant and inadmissible as it involved the Commissioner of Taxation's opinion that tax was payable". The Court held: Improper pressure (i) The refusal by the trial judge to grant an adjournment to permit a juror to attend a job interview and provide a second letter to a juror's employer did not put improper pressure on the jury to reach a verdict or constrain the deliberations of the jury: [95]-[107] (The Court). Black v R (1993) 179 CLR 44; [1993] HCA 71; R v Tangye (1997) 92 A Crim R 545; Director of Public Prosecutions Reference No 1 of 2017 [2019] HCA 9; (2019) 93 ALJR 424; R v Prasad (1979) 23 SASR 161 referred to. Admissibility of Exhibit M (ii) The applicant has not shown that he suffered any injustice whatsoever by the admission of Exhibit M, much less lost a chance of acquittal fairly open to him: [121]-[126] (The Court). Papakosmas v The Queen (1999) 196 CLR 297; [1999] HCA 37; ARS v R [2011] NSWCCA 266; Roach v R [2019] NSWCCA 160

History of the proceedings

On 24 April 2012, the applicant was arrested and charged for the matters the subject of the current proceedings.
The applicant was first tried (the first trial) jointly with the co-accused, Mr Dickson before Beech-Jones J in a jury trial commencing on 4 August 2014. On 10 November 2014, an application by the applicant was made and granted that the jury be discharged with respect to the trial against the applicant (see R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595). This application was granted in consequence of the late disclosure of documents by the Crown throughout the trial, including after the close of the Crown case.
Mr Dickson did not seek to have the jury discharged and his trial continued. On 22 December 2014, the jury returned verdicts of guilty of the same two offences as the applicant subsequently was in 2017 (R v Anthony James Dickson (No 18) [2015] NSWSC 268). A conviction appeal against his conviction was dismissed and his sentence increased on appeal (see Dickson v R [2016] NSWCCA 105).
The applicant stood trial for a second time (the second trial) commencing on 9 March 2016 before Beech-Jones J. The jury was discharged on 14 March 2016 because of a concern that a juror had contravened a direction not to undertake research pertaining to the applicant and had mentioned the outcome of that research to other jurors..
The applicant stood trial for a third time (the third trial) commencing on 16 March 2016. On 7 June 2016, the jury was discharged because they were unable to reach a verdict (see R v Issakidis [2016] NSWSC 1102).
The applicant stood trial for a fourth time (the fourth trial) commencing on 10 April 2017. The jury returned guilty verdicts on 13 June 2017.

Issakidis v R

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