Grounds 4, 5 and 7
186These grounds assert that the verdicts of the jury were unreasonable. In relation to count 1, it is said the verdict was unreasonable because, on the whole of the evidence, it was not open to the jury to be satisfied beyond reasonable doubt that on 3 February 2005 the appellant, on behalf of Barat, disposed of the Admerex shares by way of a swap. In particular, it was again asserted that it was not open to the jury to be satisfied beyond reasonable doubt that in 2004 the beneficial interest in the Admerex shares had not been transferred to the five overseas companies.
187In relation to the second count, the verdict of the jury was claimed to be unreasonable for the same reasons. If Barat had passed the beneficial ownership in June 2004, the share swap in February 2005 was incapable of being a disposal for the purpose of the charge in the indictment. Additionally, the verdict was unreasonable on the basis that it was not open to the jury to be satisfied beyond reasonable doubt that there had been, in any event, a change of ownership of the 48 million Admerex shares in the financial year ended 30 June 2005. Any disposal, it was argued, occurred in the following financial year.
188These grounds require an appreciation of the broad nature of both the Crown and defence case. They require also some attention to the detail of the trial, including a number of the competing arguments, although we propose, in that regard, to outline those matters in summary form.
189We have earlier set out the broad nature of the Crown case. It is unnecessary to repeat the detail here. An examination of the conduct alleged in relation to counts 1 and 2 demonstrated, according to the trial judge in his remarks on sentence, two distinct periods of dishonesty, albeit with some degree of overlap. The underlying intention of the appellant throughout, according to the Crown case, was to avoid paying tax on any capital gain. In the first period, the intention was to use the Admerex shares in a criminal manner. The second period involved the lodgement of a tax return, accompanied as it was by associated dishonest behaviour and deceit in the appellant's dealings with his accountants.
190The Crown case relied on the flow chart (exhibit A). This graphically demonstrated the involvement of the appellant in a controlling capacity throughout the entire period between 2003 to 2006. The Crown case, as we have said, critically raised two issues:
(a) Did Barat Advisory retain beneficial ownership of the shares after the transfer of the legal ownership in June 2004, with the appellant being throughout the controlling mind of all the relevant entities, and with Mr Meisterhans acting effectively as his agent in carrying out his instructions? Put in another way, was it the appellant's intention to disregard the strict legalities of the Stichting Group structure so that he could, when the opportunity presented itself, dispose of the Admerex shares, thereby making a capital gain and keeping it without paying tax?
(b) Was there a disposal of Admerex shares on or about 3 February 2005 so as to constitute a CGT event in the financial year ending 30 June 2005?
191These two questions were interwoven: if Barat Advisory did not retain the beneficial ownership in 2004, there could not have arisen a CGT event in February 2005. If that were the situation, the verdicts on count 1 and 2 could not stand. There was, however, as earlier indicated in relation to the ground 1 particulars, a further issue that focused on count 2. This was whether the conversation between the two men on 3 February 2005 had evidenced a contract for the disposal of the shares. There was a related question whether the September 2005 "disposal" of the shares by Mr Goodall to a third party meant that any capital gain event occurred in the 2006 financial year rather than in the preceding financial year. This second question, however, only arose if the beneficial ownership of the shares had been retained by Barat Advisory at the time of the June 2004 transactions.
192The Crown case had been that the appellant, at all relevant times, was deeply focused upon the issue as to how he could avoid paying tax on the Admerex shares. The Crown case asserted that, in the appellant's mind, the principal reason for the establishment of the overseas Stichtings and their associated companies was a need to defer tax and, if it could be achieved, to avoid the payment of Capital Gains Tax altogether. It was in this sense that the Crown argued at trial that the appellant had been guilty of dishonesty throughout the two periods of activity we have described, even though the dishonesty took different forms at different times.
193The defence case, in some respects, operated in something of a parallel universe to all this. Throughout the trial, defence counsel had suggested that what was happening was altogether different from the perspective advocated by the Crown. This became a point of fundamental difference between the parties, a difference which it was necessary for the jury to resolve.
194The focal point of the defence case was this: the 2004 arrangements involving Ms Harley, Mr Meisterhans and others came about as a consequence of the appellant's plans and preparation for corporate activity intended to bring about the takeover of Temenos. This was to be achieved by utilising the significant shareholding held by Goodall in that company. The defence urged the jury to find that in March 2004 Ms Harley had examined the takeover law in Switzerland at the appellant's request because he was giving consideration to a possible takeover by Admerex of Temenos. The appellant placed particular reliance on the evidence of Ms Harley where she agreed in cross-examination that the shares were transferred to the five overseas companies "as part of getting ready to do something great with Temenos". This became the central defence theme before the jury and, indeed, in this appeal.
195Mr Robberds outlined a series of facts which he suggested supported this proposition. For example, in May 2004 the appellant met Mr Goodall in Singapore. At this meeting they decided to go ahead with their pursuit of Temenos. To that end, Mr Goodall telephoned a Mr Koukis who was the chairman of and a major shareholder in Temenos. Arrangements were made for the three men to meet in Geneva in the week commencing 7 June 2004. The defence case was that the reason for this proposed meeting was to enable the appellant and Mr Goodall to explore the possibility of coming to some arrangement with Mr Koukis so that Admerex could obtain the benefit of his shares and thus increase the possibility of a takeover of Temenos.
196The appellant returned to Australia and, between 31 May and 6 June 2004, with the assistance of Ms Harley, the five Stichtings were established with the intention that they would hold one share each in five newly incorporated companies. These were incorporated in St Vincent and the Grenadines on 3 June 2004. The defence case was that the urgency in these arrangements arose because of the need for the structures to be in place before the appellant saw Mr Koukis in Geneva on 7 June.
197Ms Harley had asked Mr Meisterhans, with whom she had worked before, to incorporate the five overseas companies. On 6 June the appellant and Ms Harley flew overseas and, during that week, met employees of Citco to finalise arrangements. Prior to leaving Australia, Ms Harley told the appellant that if the 55 million Admerex shares were sold by Barat to the five overseas companies, he would no longer have any beneficial interest in the shares. She told him, however, that he would have a financial interest pursuant to the Master Investment Futures Agreement and protected by a Deed of Charge.
198It was common ground that on 11 June 2004 Barat Advisory sold and transferred the 55 million Admerex shares to the five companies, each of the companies receiving a specified number of those shares. Although no money was paid, it was contemplated that there would be loans in place in the nature of vendor finance.
199Ms Harley gave evidence that she sought to achieve, by the documentation she had prepared, the consequence that the beneficial interest in the shares would be transferred to each of the five companies. She said that, as far as she was concerned, she had successfully achieved that objective. Thus it was the defence case, first, that the purpose of establishing the overseas structures was to enable the Admerex shares to be used so that "something great" could be done with Temenos, namely the advancement of a possible takeover or a merger. Secondly, that the beneficial ownership of the 55 million shares had, in any event, passed to the five overseas companies and that accordingly the events of February 2005 could not have resulted in a CGT event.
200An alternative aspect of the defence case was that, even if the jury were to accept that the beneficial ownership of the Admerex shares had been retained by Barat Advisory after June 2004, the so-called "share swap" did not pass the beneficial ownership in February 2005. Rather, if that event occurred, contrary to the defence case, it did not occur until September 2005 when Mr Goodall arranged for the transfer of the shares to a third party.
201It is necessary to say something in a little more detail in the context of the evidence relied upon for the purpose of the more detailed defence submissions. These highlighted a number of matters that may be summarised as follows:
(a) All of the documentation prepared by Ms Harley asserted in express terms that the beneficial ownership of the Admerex shares was passed or had been passed: for example, the terms of the transfers themselves, the Master Futures Investment Agreement and each of the Deeds of Charge.
(b) Given the evidence as to the integrity of Ms Harley and her favourable experience with Mr Meisterhans in the past, if the beneficial and legal ownership of the shares did not pass in June 2004, it must have been the situation that the whole structure was a sham and Meisterhans, and the other persons undertaking duties in relation to the Stichting Groups, must have entirely abdicated their responsibilities and duties.
(c) While there had been certification tendered before the jury in which the appellant was stated to be the beneficial owner or ultimate beneficial owner, these were of no value and were completely explained by the evidence of Ms Harley. She had said that, in the case of Citco and the EFG Bank, she had effectively been placed in a situation where the certification were required even though she did not agree with their contents. It was "non-negotiable". There was no suggestion during the trial that Ms Harley was not fully truthful about these matters. Indeed, there was no attack upon her integrity in any real sense at all.
(d) Mr Robberds submitted, both before the jury and this Court, that the "most important evidence" in the case was that of Ms Harley. She had prepared the documentation in complete good faith; she believed that it passed the beneficial ownership, and she had explained to the appellant various aspects of the proposed structure that would govern the transfer of the Admerex shares. She explained, for example, that the downside of the arrangement would be that the appellant "would cease to have ownership of the shares". If he went ahead with the arrangement, he would not have any beneficial ownership of the shares but his "interests would be protected through the Master Investment Futures Agreement and the Deeds of Charge". She told him that if he went ahead with the proposal the consequences would be that "the shares would not be Barat Advisory shares any longer".
(e) In relation to the conversation on 3 February 2005, it was Goodall's evidence that there was no share swap because he "denied" that he agreed to the swap - "he did not accept the 48 million Admerex shares". On the basis of this evidence, the change in ownership did not occur until the end of September 2005 when Goodall arranged for the transfer of the shares.
(f) Mr Meisterhans, during the period July 2004 to February 2005, had made a number of investment decisions in relation to the affairs of Challinor Equities. During this period he bought and sold other shares, currency, and invested money into fiduciary deposits. He made and repaid loans. The defence pointed to evidence that the sale of the Admerex shares during the latter half of 2004 resulted in the proceeds being placed in the Challinor Equities account. Apart from a payment for legal fees, these amounts remained in the account until later in 2005.
202It is necessary now to briefly summarise the Crown response to the defence case and its response to many of the arguments we have briefly touched upon. Once again, we shall undertake this task in summary form. The thrust of the Crown response may be stated as follows:
(a) The Crown accepted that there may have been, and undoubtedly was, some parallel corporate activity in 2004 involving the use of the Temenos shares owned by Goodall. However, that activity did not affect the appellant's intention to take steps in order to minimise, defer and, as it turned out, to avoid CGT on the disposal of the 55 million Admerex shares issued in April 2004 at no real cost to Barat Advisory.
(b) The flaw in the defence case was that there was no demonstrable connection between any Temenos takeover activity and the transfer of the Admerex shares in five parcels to the foreign companies owned by the Stichtings. Nor was there any connection between Temenos takeover activity (such as it was) and the swap of the 48 million Admerex shares for Goodall's one million Temenos shares. It was never suggested, for example, that the Admerex shares acquired by the appellant through Barat Advisory in satisfaction of the original debt had any significant part to play in any proposed takeover or merger with Temenos.
(c) The reference to Ms Harley's evidence in which she agreed with the proposition that shares were transferred to the five companies "as part of getting ready to do something great with Temenos" (whatever that might mean) carried negligible weight in the light of the more detailed evidence of the sequence of events concerning the failed venture involving Temenos. Importantly, however, this prospect had never involved the Admerex shares owned by Barat Advisory. In other words, the Crown response to the Temenos-based case sought to be made by the defence was that, upon examination, it had no substance whatsoever.
(d) The Crown examined the evidence relating to Mrs Harley's advice. It suggested that the evidence clearly showed that the appellant had consulted Ms Harley for tax advice, not for corporate takeover advice, prior to her recommendation to set up the Stichtings. She had eventually given the appellant advice in writing in a draft document dated 4 August 2004. It was 18 pages in length and almost entirely dedicated to taxation issues concerning the most tax effective means of disposal of the Admerex shares. True it was that it contained a relatively small section dealing with compliance with the requirements for substantial shareholder notices. This, however, was in the context of an analysis of the "associate" provisions in the Income Tax Assessment Act . It had no express connection with any takeover activity concerning Temenos.
(e) The prosecution case throughout was that, whatever Ms Harley's intentions were, she had been deceived by the appellant as to the basis upon which the shares would be traded. For example, the tax advice recited instructions that the Stichting Group Companies would acquire the Admerex shares from the appellant "on an independent basis". It recited that they would have acquired "our clients shares in Admerex from any entity if their expectations as to price were met". The Crown submitted that this was simply not the case. The Stichting Group of Companies were specifically set up in the context of the appellant "off loading" the Admerex shares to them. There was never any evidence of independent advice, nor was there evidence of the prospect of the purchase of the Admerex shares from any other vendors.
Similarly, the Crown argued that Ms Harley's recited instructions in her advice that each of the foreign companies would "make separate and independent decisions in relation to the holding and disposal of the share parcels etc" demonstrated the same point. This was never going to be the case. The Stichtings and the foreign companies were directly controlled by the appellant. All decisions were made by him concerning the acquisition and disposal of the Admerex shares collectively, rather than by reference to any considerations or individual decisions made independently by each Stichting and foreign company.
(f) That the purpose of the appellant consulting with Ms Harley, and that the object of her suggested arrangements, were tax driven was supported by the detail of her firm's bill of costs for the relevant period. It was plainly not the case that these arrangements related to a takeover. Clearly the entire situation was "tax driven".
(g) The Crown did not dispute Ms Harley's evidence that she and Mr Meisterhans had been, in effect, obliged to provide both Citco and the EFG with the bank certifications as to beneficial ownership. However, the Crown submitted before the jury that this might properly be seen as a recognition of the fact that all the arrangements were for the appellant's ultimate benefit. The certifications provided material that went circumstantially to the issue of the appellant's de facto control in the period between June 2004 and the end of the financial year 2005.
(h) The evidence that the beneficial ownership remained with Barat Advisory and hence under the control of the appellant included the following. First, the shares, after transfer, were controlled through five EFG Swiss bank accounts established by Mr Meisterhans for which he had identified the appellant as the beneficial owner. Secondly, the early sales of the Admerex shares commenced on 1 July 2004 and continued until 18 November 2004. On that date the appellant sent an email to Mr Meisterhans directing him to "stop" because the quantities advised were "putting pressure on the market and bringing the price down". Thirdly, Mr Meisterhans acquiesced in this direction. Fourthly, between those dates over 6 million Admerex shares were sold out of the EFG bank account in the name of Challinor Equities, and on 13 July 2005 some $509,000 from the proceeds of sale was transferred to a UBS Zurich account also in the name of Challinor Equities. From this account, in 2005, payments were made to the CBA account in Australia in the name of Barat Advisory, and other payments were made for the personal benefit of the appellant. The Crown submitted that this evidence could easily satisfy the jury that the appellant had been the beneficiary from the outset of the proceeds of the initial sale of the 6 million or so Admerex shares sold between July and November 2004.
Moreover, it was argued that the swap itself and the subsequent dealings with the proceeds of the sale of the Temenos shares demonstrated that it was the appellant who made the initial decision that the shares would be exchanged. He took all the initiatives in this regard, and he was the person behind Mr Meisterhans in causing all the subsequent arrangements to be made.
There was also the fact that, in the events that happened, the appellant completely ignored the obligations imposed on him under the careful documentation presented by Ms Harley. The appellant ignored the obligation to make an annual payment in each year in respect of the shortfall equivalent to 10 per cent of the committed capital of the company in each case. He ignored the elaborate provisions relating to the obligations of the Stichtings on the termination date of 1 July 2005. Indeed, there was no effort made to wait for the termination date before any payment was made by each company to the Stichting. No effort was made to calculate the amounts payable in accordance with the terms of the agreements. The Crown submitted that, as soon as the swap was made, the Temenos shares were sold off and the proceeds returned ultimately to Barat Advisory's accounts without any regard whatsoever to the obligations of the Stichting structure. Effectively, the appellant tore up Ms Harley's advice and ignored her careful arrangements.
(i) Finally, the Crown disputed the interpretation of Mr Goodall's evidence that was said to deny the existence of a CGT event. Reference was also made to emails passing between Mr Meisterhans and Ms Harley which confirmed that a contract for the swap had taken place on 3 February 2005.
203We turn now to resolve these competing submissions.
204The task of the Court of Criminal Appeal in an "unreasonableness" appeal has recently been restated by the High Court of Australia in SKA v R [2011] HCA 13; 85 ALJR 571. In the plurality judgment of French CJ, Gummow and Kiefel JJ, it was stated at [11]-[14]:
"11 It is agreed between the parties that the relevant function to be performed by the Court of Criminal Appeal in determining an appeal, such as that of the applicant, is as stated in M v R (1994) 181 CLR 487 at 493 by Mason CJ, Deane, Dawson and Toohey JJ:
Where, notwithstanding that as a matter of law there is evidence to sustain a verdict, a court of criminal appeal is asked to conclude that the verdict is unsafe or unsatisfactory, the question which the court must ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty.
12 This test has been restated to reflect the terms of s 6(1) of the Criminal Appeal Act. In MFA v R ( 2002) 213 CLR 606 at [58], McHugh, Gummow and Kirby JJ stated that the reference to "unsafe or unsatisfactory" in M is to be taken as "equivalent to the statutory formula referring to the impugned verdict as 'unreasonable' or such as 'cannot be supported, having regard to the evidence'."
13 T he starting point in the application of s 6(1) is that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, and the jury has had the benefit of having seen and heard the witnesses. However, the joint judgment in M went on to say (at 494):
In most cases a doubt experienced by an appellate court will be a doubt which a jury ought also to have experienced. It is only where a jury's advantage in seeing and hearing the evidence is capable of resolving a doubt experienced by a court of criminal appeal that the court may conclude that no miscarriage of justice occurred.
....
14 In determining an appeal pursuant to s 6(1) of the Criminal Appeal Act , by applying the test set down in M and restated in MFA , the court is to make "an independent assessment of the evidence, both as to its sufficiency and its quality" ( Morris v R (1987) 163 CLR 454 at 473). In M , Mason CJ, Deane, Dawson and Toohey JJ stated (at 492-493):
'In reaching such a conclusion, the court does not consider as a question of law whether there is evidence to support the verdict. Questions of law are separately dealt with by s 6(1). The question is one of fact which the court must decide by making its own independent assessment of the evidence and determining whether, notwithstanding that there is evidence upon which a jury might convict, "none the less it would be dangerous in all the circumstances to allow the verdict of guilty to stand'."
205In the present matter, having regard to the grounds of appeal relied on by the appellant, it is this court's task to make an independent assessment of the whole of the evidence, paying special attention to those matters relied upon by the appellant in its submission, to determine whether the finding of guilt by the jury can be supported.
206In making it own assessment, this Court must, however bear in mind the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence and, in that regard, the jury will have had the benefit of having seen and heard the witnesses: M v R (1994) 181 CLR 487 at 493. The only witness whose credit or reliability was attacked was Mr Goodall. We bear in mind this qualification in relation to our examination of his evidence.
207We have given careful consideration to the submissions advanced by Mr Robberds QC but we have concluded that, in our assessment, the verdicts of the jury were not unreasonable. We shall briefly state our reasons.
208Although the defence sought to place considerable reliance on Ms Harley's evidence, we do not consider it carries the weight sought to be attributed to it. There can be no doubt that Ms Harley acted bone fide in establishing a tax deferral structure that required, for its effective operation the transfer of the legal and beneficial ownership of the Admerex shares. There can be no doubt that Ms Harley genuinely believed that the scheme she organised and arranged had achieved that result. We do not accept, however, that the scheme was driven by Ms Harley or that it was her initiative. Nor do we accept that its primary purpose, in the appellant's mind, was to enable the appellant "to do something great with Temenos".
209It is true that in March 2004 Ms Harley sent an email to the appellant providing advice concerning the takeover law applicable in Switzerland. However, the appellant's attendance upon Ms Harley shortly before early June 2004 related to the 55 million Admerex shares. Although pushed in cross-examination by Senior Counsel for the appellant, Ms Harley resisted the notion that she had been the person driving either the advice or the transaction. At transcript 168 Ms Harley said:
"I didn't tell him how it should be done. That is, um, I was asked to give some input in terms of how the investment could be structured on the basis that it was quite likely that a buyer for the shares would not be an Australian entity and there would be a value to such a person, buyer, if they could buy it in a way which didn't trigger some corporation issues or taxation law issues. But I was not driving the investment in that way ..."
210Earlier she had told the Crown Prosecutor, concerning her advice, that the appellant's view of the company was that in the future it would be of "greater value" than it was at the time of their discussion. She discussed structuring the investment "so as to on the one hand have tax advantages, or at least not tax disadvantages, but also to prepare the share parcels for sale to someone who may not be an Australian resident" (Transcript 115). The advice, in short, was that the appellant should transfer the shares to an off shore entity that was not an entity connected with the appellant, and that he should continue to have a financial interest in the assets without having an ownership interest (Transcript 115, 25-30). It was in that context that the use of a Dutch entity called a Stichting was discussed.
211We have [at 37 above] provided a summary of Ms Harley's advice to the appellant. We should repeat the thrust of it here. Ms Harley advised:
(a) there would be tax payable on the initial disposal of the shares, but during the term of the arrangement there would be no tax liability;
(b) the appellant would not be entitled to any asset of any Stichting Group until after the determination of the Stichting Group structure;
(c) for both company law and taxation purposes, neither the Stichtings nor the Stichting Group companies were associated;
(d) none of the Stichting Group companies was required to lodge a substantial share holder notice and subsequent disposal of Admerex shares by the Stichting Group companies would, so long as Admerex remained listed on the Australian Stock Exchange, be free of Capital Gains Tax;
(e) any payment the appellant would receive upon the termination of the Stichting Group structure would be subject to Capital Gains Tax in Australia if that payment represented a capital gain on the value of the assets which had been held in that Stichting Group; and
(f) the Stichting Group companies were required to act independently of the appellant and independently of each other.
212Contrary to the submissions of the appellant, it seems overwhelmingly to be the case that the major thrust of Ms Harley's advice was tax driven. This appears plainly enough from the terms of the advice itself (Exhibit C1) and from the firm's Bill of Costs for the relevant period. The advice was some 18 pages in length. As the Crown submitted, it was almost entirely devoted to issues related to the most tax effective means of disposal of the Admerex shares. It is particularly significant that no part of the advice had any express connection with any takeover activity concerning Temenos. The topic was simply not mentioned. There was a relatively brief section dealing with compliance with the requirements for substantial shareholder notices. This was, however, in the context of an analysis of the "associate" provisions in the Income Tax Assessment Act. The Bill of Costs contains some nine items relating to "tax advice" during the period 7 June to 11 June 2004 when the Stichtings arrangements were put in place. There is no reference to any other type of advice being given during that period. There is no mention of any proposal to takeover Temenos.
213It cannot be gainsaid, however, that there was some evidence suggesting a possibility of some parallel corporate activity in 2004 involving the use of the Temenos shares owned by Goodall. In his evidence, Mr Goodall agreed that he had arranged for the appellant to meet Mr Koukis in Geneva but he was emphatic that there was no established plan for a takeover or merger. Rather, he said, this was simply a preliminary meeting well prior to any takeover discussions. There was no tangible outcome to the meeting. The concept remained on foot but it was "still in the embryonic stage" (Transcript 247).
214As was submitted, the weakness in the defence case was that there was no real connection between the Temenos takeover possibility and the transfer of the Admerex shares to the foreign companies owned by the Stichtings. Nor was there any connection between "doing something great with Temenos" and the swap of the 48 million Admerex shares for Mr Goodall's 1 million Temenos shares. There was no evidence to suggest, for example, that the Admerex shares acquired by the appellant through Barat Advisory in satisfaction of the original debt had any significant part to play in any possible takeover or merger with Temenos. Eventually, the possibility of a Temenos type venture failed completely, but at no time did it feature or rely upon the Admerex shares owned by Barat Advisory.
215This conclusion is also made clear when regard is had to the swap of the Admerex shares for the Temenos shares on 3 February 2005. This transaction was, as the Crown argued, revenue neutral in that the respective parcels of shares had approximately the same value. There was, it must be said, a much more compelling explanation for the swap, namely that it was the final step in a scheme which had included the establishment of the Stichting Group structure for the purpose of diverting attention from the Admerex shares and thus enabling their ultimate disposal in a manner that would help avoid the detection of a capital gain.
216The issue as to whether the appellant intended to retain the beneficial ownership of the shares is clearly resolved in the Crown's favour when regard is had to his activities after June 2004. It is these circumstances which compel the conclusion that the appellant intended to and did retain the beneficial ownership. There is no doubt that the concepts of a financial interest and a beneficial interest in the shares involve a real distinction. The appellant's actions, however, ignored that distinction. Of special significance were those actions which demonstrated that the appellant did not regard himself as bound by the advice he had been given by Ms Harley. Contrary to the defence submissions, Ms Harley's arrangements represented a genuine structure and could not be classified as a sham. The appellant's actions, however, demonstrated that he intended to ignore the structure and intended to treat himself (through Barat Advisory) as the beneficial owner.
217It is necessary to digress to say something briefly about the role of Mr Meisterhans. The evidence from Ms Harley was that she had introduced the appellant to Meisterhans in June 2004. However, it is clear that the appellant had earlier commercial dealings with Mr Meisterhans. They were not without significance. The arrangements between Sinitus and Clairmont in 2003 included the Mandate Agreement. By its terms Sinitus was to act as directors/or officers of Clairmont but was required to act exclusively on instructions received from the appellant or his Attorney. Whether or not the two men had met face to face before, it was clear that Mr Meisterhans had, in these previous commercial transactions, acted effectively as agent for the appellant whilst acting as a director for one of his companies. It is true that no Mandate Agreement operated in the June 2004 structure. However, Mr Meisterhans was well used to taking instructions from the appellant. He was well used to acting as his agent in commercial transactions. The circumstances following June 2004 demonstrated that this type of relationship continued to operate between them, notwithstanding the absence of a Mandate Agreement or its equivalent.
218Ms Harley intended, of course, that the Stichting Group companies would acquire the Admerex shares from the appellant "on an independent basis". As we have said earlier, however, there was no evidence of independent advice nor was there the prospect of the purchase of Admerex shares from any other vendor or vendors. Moreover, the Stichting Group companies were specifically set up to enable the appellant to transfer the shares to them with a tax deferral scheme in mind. None of this made the scheme bogus. But it reinforced, as later events showed, that the appellant did not intend to be bound by the structure. Quite to the contrary, he controlled the disposal of the shares throughout and gave instructions to Mr Meisterhans which were readily carried out on his behalf. This extended to the disbursement of the proceeds of the sale of the Admerex shares.
219There were at least three matters of significance in 2004. The first was the appellant's signing of the declaration as to the source of funds for Citco's purposes. This document had identified the appellant as the beneficial owner of funds used to establish the Stichtings, and the funds which might from time to time be transferred into the names of the Stichtings. Ms Harley gave evidence that she was obliged to have this done even though she herself did not think that it was correct. Similarly, the appellant was identified as the beneficial owner of assets in the paperwork which opened accounts on 15 June 2004 in the name of each of the Stichting Group companies with EFG Bank. Mr Meisterhans opened these accounts, he being the sole signatory. Once again, Ms Harley's evidence was that this was an obligatory requirement by the bank rather than the statement of the true position. However, it was evidence, we accept, that supported the notion that, from the appellant's perspective, he saw himself as the person who had the ultimate control over the practical operation of the structures. Events to which we now refer demonstrate that he carried this belief into practice.
220Between 1 July 2004 and 18 November 2004 there was a spate of selling of the Admerex shares. On 18 November, the appellant emailed Mr Meisterhans from his Blackberry. He gave him peremptory instructions to revoke current orders for the sale of Admerex shares. The language and tone of the email made it quite clear that he was simply ordering Mr Meisterhans to carry out the directions and that is precisely what happened. There were various arguments advanced by Mr Robberds to suggest that this interpretation should not be put on the terms of the email. We regard its terms, however, and more significantly the response by Mr Meisterhans as indicating clearly that both men treated the appellant as beneficial owner and in control of the disposal of the shares. This was much more than the protection of an investment by a person with a financial interest.
221Secondly, between July and 18 November 2004 some 6 million Admerex shares had been sold. It is clear that, although the monies were not immediately transferred over to the benefit of Mr Milne, they remained available to him until they were ultimately transferred to a UBS Zurich account in the name of Challinor Equities from which payments were thereafter made to a CBA account in Australia in the name of Barat Advisory.
222Thirdly, there was the share swap itself. Although the Admerex shares were not transferred at the request of Mr Goodall until September 2005, it is clear that the actions of Mr Meisterhans in February 2005 recognised both the instructions given to him by the appellant and the implications of the swap. Mr Meisterhans' actions in transferring 1 million Temenos shares into the Challinor Equities SwissFirst Bank account, the subsequent sales and the disposal of the consequent funds to or for the benefit of the appellant, was a recognition that, in accordance with the appellant's instructions, the Admerex shares had been disposed of without any independent or separate consideration being given to the transaction by the Stichtings Group companies. Moreover, the direction given to Mr Meisterhans indicated a decision that had been made by the appellant to pass the benefit of the Admerex shares to Mr Goodall.
223Mr Meisterhans' email to Ms Harley (copy to the appellant) on 8 September 2005 referred to the events of 2 and 3 February 2005:
"On 2 February 2005 the termination agreement for the letter of intent was signed between Admerex (Ireland) Limited and SwissFirst Bank AG under which Admerex (Ireland) Limited continued to retain a total of 3 million T shares (originally 5 million). One million T shares were consequently returned by SwissFirst to EFG in favour of Kim while 1 million shares were swapped against 48 million shares in Admerex Limited: that 1 million shares were transferred to Challinor's account with SwissFirst while the 4 St. Vincent companies continued to hold 48 million Admerex shares with EFG on behalf of Kim".
224In the email Mr Meisterhans confirmed that it was his understanding at the time that "all conditions for the swap had been met". He sought instructions from both Ms Harley (and the appellant) to make delivery of the 48 million Admerex shares to Mr Goodall. Presumably, clearance was given because, as we have mentioned, Mr Goodall then proceeded to arrange for the transfer of the shares to a third party.
225We conclude that the appellant intended to and did retain beneficial ownership of the shares following the June 2004 transfers and that thereafter he gave instructions to Mr Meisterhans from time to time in relation to the disposal of shares. In relation to all those instructions, Mr Meisterhans complied and acted as if he were bound to do so. The appellant's deliberate contraventions of the structures set up by Ms Harley further evidence the true situation.
226We turn then to the conversation between the appellant and Mr Goodall. The terms of the conversation, it must be said, were rather unusual. In one sense, the appellant's remarks were more in the nature of a direction or a command to Mr Goodall. However, there was nothing in the language used by Mr Goodall to suggest that he did not accept the statement that he (Goodall) would get a million Temenos shares back and that the appellant would take a million Temenos shares for his 49 million Admerex shares. The conversation refers to the "renegotiation" of a deal. It seemed to be common ground between the parties, however, that this was a reference to the re-arrangements of the finance facility with SwissFirst. It was not a reference to the swap. Mr Robberds submitted that Mr Goodall's evidence demonstrated that there was no share swap because he had "denied" that he agreed to the swap. This appears to be a reference to Mr Goodall's evidence at Transcript 235 lines 25-50:
"Q. In the time between Mr Milne ringing you to say that he would take a million of your Temenos shares and you would have 49 million of the Admerex shares and the occasion when Mr Milne said to you 'I want you to look at a document', had you done anything or had anything been done, to your knowledge, in relation to transferring shares either your Temenos shares or the Admerex shares?
A. I had suspected that something may have happened to the ...
Q. Rather than what you suspected, could you tell us what had happened or what you had observed in relation to the shares?
A. A number of transactions took place. My banker had advised me one million shares had gone back to my bank and at that time it appeared that somebody else had control of the Admerex (Ireland) bank account.
Q. Who was your banker?
A. Robert Mehm of EFG Bank in Geneva.
Q. When did he inform you about the shares going back to the bank?
A. I don't know, I don't remember the dates.
Q. Before the meeting you had spoken about with Mr Milne?
A. Yes
Q. Had you done anything in relation to accepting 48 or 49 million Admerex shares?
A. No I had not.
Q. Had you done anything yourself about transferring or assigning 1 million Temenos shares to Mr Milne or anyone associated with him?
A. No sir."
227At Transcript 236, Mr Goodall said that eventually he arranged for the transfer of the 48 million Admerex shares to a third party. He asked Mr Mehm at EFG Bank to find a third party. He said that he had "more than enough Admerex shares ... didn't want any more Admerex shares".
228At Transcript 237, in relation to the 1 million Temenos shares he said he had not done anything to assign them or transfer them "... it was just done".
229We do not consider that this evidence represents a denial by Mr Goodall that a share swap occurred. Rather, it seems a recognition on his part that the Admerex shares remained to be used by him whenever he chose to do so, whereas the 1 million Temenos shares had been transferred to the appellant without anything being done on his (Goodall's) part - "it was just done".
230The final issue relates to the proposition that no CGT event occurred on 3 February 2005 and that, if there were such an event, it did not occur until September 2005. We do not accept on the facts that this is what happened. Section 104.5 of the ITA Act 1997 makes it clear that a CGT asset is disposed off when the disposal contract is entered into or, if none, when the relevant entity "stops being the assets owner". We consider that the circumstances we have outlined plainly show that there was a disposal contract entered into on 3 February 2005. For example, the actions of the appellant, in instructing Mr Meisterhans to transfer the 1 million Temenos shares for his benefit demonstrate that, from his perspective, Barat Advisory had ceased to be the owner of the Admerex shares. There could be no clearer admission on his part that this was the case. There was no suggestion he would hold both parcels of the shares. Equally, Mr Goodall's passivity in allowing the transfer of the 1 million Temenos shares for the benefit of the appellant demonstrated his tacit acceptance that he had ceased to be the owner of those assets.
231In addition to the tax direction the trial judge gave to the jury, there was a separate direction given at the conclusion of the summing up. This was described as a direction to address "the contract issue". This further direction was in these terms:
"Now, with respect to the contract issue, I want to give you this further direction. In the circumstance of the case, it is necessary for the Crown to prove beyond reasonable doubt that the 48 million Admerex shares were disposed off on or around the 3 rd of February 2005 because the accused, on behalf of Barat Advisory, entered into a contract with Mr Goodall to transfer the shares to him. And as I have said just a moment ago, there are various ways in which a contract may come into existence. It does not have to be only in the form of a document, described as a contract which contains the terms of the contract. A contract may arise from words spoken, as well as the contents of documents, or a combination of the two. A contract does arise if there is an offer, and an acceptance of the offer, so that it can be said there is a settled agreement between the parties, even if parts of the contract are to be performed at a later time".
No criticism has been made of this direction. We are satisfied on our own independent examination of the evidence that there was a CGT event on 3 February 2005 and that consequently it occurred in the financial year ending 30 June 2005. This is so, notwithstanding that the shares were not transferred to the third party until September 2005.
232Having made an independent assessment of the evidence, and having examined with care the submissions of Mr Robberds on these grounds, we conclude that we have no doubt as to the guilt of the accused. For that reason, we conclude, as a matter of fact, that it was well open to the jury to be satisfied beyond reasonable doubt of the appellant's guilt in relation to both counts 1 and 2. We would dismiss these grounds of appeal.