Petroulias v R

Leave to appeal against sentence should be refused 6It is immediately apparent that there has been inordinate delay between the conviction and the imposition of sentence and hearing of this appeal. There is a partial explanation in the materials, although none for the delay over the last four years during which, so far as the materials available to the Court indicate, the Applicant has been at liberty (during that time, he has been engaged in other litigation not unrelated to the conviction, which we infer may be the reason, or part of the reason, for the delay: see in particular Petroulias v The Hon Justice McClellan [2013] NSWCA 434; (2013) 306 ALR 210). However, it is not our purpose to take any point adverse to the Applicant by reason of the delay. What matters for present purposes is merely the fact of the delay, which has led to his sentence having been wholly served. 7Notwithstanding the 20 month delay in commencing an appeal against conviction and a sentence with a non-parole period of 24 months, it appears that the Court was able to expedite it for hearing before the non-parole period expired (on 16 and 17 June 2010: see Petroulias v R [2010] NSWCCA 95 at [9]). It seems that that hearing was adjourned; there are suggestions in the materials in the appeal books that it was adjourned on the Applicant's application. 8However, it is not necessary to identify the cause or causes or to allocate responsibility for the delay, and no separate submission is advanced by the Crown on the question of an extension of time (it should be said that, at least in part, the Applicant has already been granted significant extensions of time; hence the lack of emphasis to this when the matter was heard). 9However, the Crown did submit that there is no utility in granting leave to appeal against a sentence which has long since been served and which has expired. The Crown submitted that there could only be utility in granting leave to review the sentence if there was a chance that the Applicant could have been dealt with under s 19B of the Crimes Act 1914 (Cth) by being dealt with without a conviction being recorded. The Crown contended that in view of the serious nature of the offences and the facts as found, such an outcome was never a realistic possibility and a conviction and sentence of imprisonment was inevitable. 10Senior counsel for the Applicant made no written submission nor any oral submission against that. Indeed, no oral submissions in chief on sentence were made at all. That reflects the force of the Crown's submission, and the focus of the hearing on a challenge to the convictions. 11Even if a court would otherwise reduce a sentence, the fact that it has been wholly served is good reason not to do so: see for example R v Preston [2005] NSWCCA 177 at [29] (Hulme J, Hunt AJA and Johnson J agreeing). As will be seen below from the nature of the case, there is no prospect of s 19B of the Crimes Act being satisfied. The Applicant made no submission to the contrary. There is therefore simply no utility in seeking to identify appellable error, and if error be found, determining whether some lesser sentence is warranted in law, in circumstances where counsel now appearing for the Applicant made no oral submissions in chief, and his written submissions on sentence had been prepared some four years ago, by different counsel, in materially different circumstances (namely, well before the Applicant's sentence had been served). 12It should be added that we do not mean by the foregoing obliquely to suggest that there is some error in the sentencing remarks of the primary judge (which are careful and elaborate and occupy 231 paragraphs following a five day hearing). We refuse leave because there is no prospect that any exercise of appellate jurisdiction by this Court could have any practical impact upon any person.

Conviction appeal - relationship between first and second counts 13The challenge to the jury's verdicts is quite different. The Applicant has a continuing interest in clearing his name if error be demonstrated. He practised as a lawyer, was a senior officer in the Australian Taxation Office ("ATO"), and subsequently a partner of a law firm. In order to address the grounds of appeal directed to his convictions, it is necessary to say something about the course of the proceedings at first instance, and the count on which the jury failed to reach a verdict. 14Central to the conviction appeal is the relationship between the first and second counts with which he was charged. The first count (as to which the jury was discharged without verdict) was that: (1)Between about 1 September 1997 and 27 February 1999, Nikytas Nicholas Petroulias did defraud the Commonwealth, in that while an officer of the Australian Taxation Office, he did put the revenue of the Commonwealth at risk by causing Private Binding Rulings and Advance Opinions to issue to taxpayers, by dishonest means. 15The charges in respect of which the jury returned verdicts of guilty were charges under s 73(2) and s 70(1) of the Crimes Act 1914 (Cth), formulated as follows: (2)Between about October 1997 and February 1999 at Sydney, NSW and elsewhere, Nikytas Nicholas Petroulias, then a Commonwealth officer with the Australian Taxation Office, did agree to receive a benefit for himself, namely money, on an understanding that the exercise by him of his duty as a Commonwealth officer would be affected. (3)Between about June 1998 and April 1999 at Sydney, NSW, Nikytas Nicholas Petroulias, then being a Commonwealth officer with the Australian Taxation Office, did publish to Richard Llewellyn Morgan, a person to whom he was not authorised to publish, documents which came into his possession by virtue of him being a Commonwealth officer, and which it was his duty not to disclose. 16The Applicant emphasised in oral submissions that there had been two previous trials. The first had commenced on 7 February 2005, a jury had been empanelled on 26 April 2005 which was discharged without verdict on 16 August 2005. The second commenced on 20 July 2006, with the jury empanelled on 26 March 2007 and discharged without verdict on 16 May 2007, in circumstances described in Petroulias v R [2007] NSWCCA 134. The third trial commenced on 18 May 2007 and occupied the remainder of the year. 17In addition, there has also been a suite of interlocutory and appellate litigation over more than a decade arising out of the prosecution. It is not necessary to identify all of it in these reasons and it would be tedious to do so; the flavour is conveyed by what McClellan CJ at CL said in Petroulias v R [2006] NSWCCA 415 at [13] in giving reasons rejecting an interlocutory appeal from a failure to stay the prosecution: "these proceedings have already produced a multitude of pre-trial applications, three decisions at the appellate level, one application to the High Court and one trial." 18Almost exclusively, that litigation was focussed upon the first count. For example, in R v Petroulias (No 1) [2006] NSWSC 788, the primary judge dismissed, after hearing seven days of argument, a range of submissions primarily directed to quashing the first charge, although if the "broad abuse of process" challenge which was the subject of [236]-[324] of his Honour's reasons had been accepted, the other counts would have been quashed or stayed too. 19The Applicant also emphasised that two judges had ordered that the prosecution be stayed, only for their orders to be set aside in this Court. In 2003, Simpson J quashed the magistrate's order committing Mr Petroulias, only for her Honour's order to be set aside on appeal: Wills v Petroulias [2003] NSWCA 390. Sully J granted a permanent stay of proceedings on the first count on 21 February 2005, which was promptly overturned on appeal heard on 1 March and determined on 11 March 2005: R v Petroulias [2005] NSWCCA 75; 62 NSWLR 663. 20The grounds of appeal against conviction have altered during the long gestation of this appeal. Originally, seven grounds were notified and were the subject of extensive written submissions signed by senior counsel appearing at the trial. Proposed additional grounds of appeal were supplied on 20 June 2012, and were also the subject of written submissions by the parties. To the extent that leave to amend was necessary, and in the absence of any opposition by the Crown, leave to rely upon those grounds was granted at the hearing of the appeal. 21Senior counsel for the Applicant indicated that Grounds 4 and 5 were abandoned, and that the remainder should be read in a way that reflected the additional grounds of appeal. To be precise, Ground 1, which asserted that Count 2 was bad for duplicity was, expressly, "not now assert[ed] in those terms". Ground 2, which asserted that the primary judge erred in his directions regarding causation, "we only assert as a background and context to what we assert in the additional ground". Ground 3 was described to be "merely one manifestation ... of a much wider problem relating to failure to direct sufficiently". Ground 6, which was that there was a reasonable apprehension that a miscarriage of justice had occurred, was described as "the usual omnibus ground". Senior counsel confirmed that, as reformulated, all of the grounds in the original notice of appeal which continued to be pressed in the reformulated fashion indicated above, would "stand or fall depending upon the success of the arguments on the additional ground". 22That additional ground of appeal was in these terms: "The convictions on counts 2 and 3 of the indictment amounted to a miscarriage of justice in that: 1. The nature of the Crown case on both counts lacked sufficient particularity or clarity and appeared to change from time to time during the trial so that the proceedings became affected by an unacceptable confusion. 2. The addresses and the summing-up failed to provide to the jury the necessary assistance as to the legal elements of the offences of which the appellant was convicted, the nature of the Crown and defence cases, the relevant issues and evidence so that it was left open to the jury to find guilt on a basis not asserted by the Crown. 3. For those reasons the convictions were affected by error of law or fundamental error such that the convictions should be set aside." 23Speaking generally, the Applicant submitted that the focus on the first count, both in litigation prior to the trial as well as during the trial, led to complexity and confusion, which infected the second and third counts in respect of which the jury convicted him. As it was put in oral address: "The short submission, and very short it is but it makes the point I think with some clarity to set the scene for what is to follow, is that there was such a preoccupation with the concept of defrauding the Commonwealth in respect of count 1, such that at least count 2 and to some extent count 3, more or less faded into the background to the point where their relevance to the trial until the jury failed to agree on count 1 became verging on tangential or peripheral." 24Counts 2 and 3 were very different, and it will be necessary to address the challenge which is made to each conviction separately. However, it is first necessary to say something of the nature of the Crown case.

Summary of the Crown case 25What follows is drawn from the remarks of the sentencing judge: R v Petroulias (No 36) [2008] NSWSC 626. 26The Applicant had tertiary qualifications in law and had a close interest in revenue law. In 1996, he became acquainted with Mr Richard Morgan ("Morgan") at a time when both men worked at Computer Law Services, a provider of information products to taxation-related businesses. In the same year, the Applicant became acquainted with Mr Nicholas Panos ("Panos"), Mr Andrew Gray ("Gray") and Mr John McLaren ("McLaren"). 27In about February 1997, the Applicant expressed interest in taking up a position within the ATO. On 19 February 1997, as part of that process, he signed an ATO declaration of secrecy acknowledging that he was bound by the relevant secrecy provisions of tax legislation. 28On 12 May 1997, the Applicant commenced as a consultant with the ATO. The term of his appointment as a consultant was ultimately extended until he became a permanent employee of the ATO on 24 November 1997. 29By May 1997, the Applicant had determined to go into the business of marketing schemes, including employee benefit arrangements ("EBAs"), which would be attractive, from a tax perspective, to taxpayers. When interviewed by police on 24 March 2000 the Applicant explained that he had been helping his then wife with her Masters degree and, in that context, had studied EBAs. 30The Applicant established a business during the course of 1997 involving the marketing of EBAs. It was his intention to further those private business interests in the positions which he took up within the ATO, initially as a consultant and later as a full-time employee. 31In and after June 1997, the Applicant met from to time with Morgan and Panos concerning business arrangements. In particular, a meeting took place at the Applicant's home in Campsie which was also attended by Panos. The Applicant was the prime mover of this business scheme and at this meeting he said that Panos' principal role in the business would be lodging documentary applications for advance opinions and private rulings. The Applicant explained the nature of these concepts to Morgan at the meeting. The Applicant told Panos of Mr Morgan's marketing skills of which the Applicant had become aware from their time working at Computer Law Services. At the end of the meeting, Panos had some reservations about Mr Morgan's involvement given his lack of legal knowledge, but the Applicant emphasised to Panos the marketing role which Morgan was to play. 32A general agreement was reached between the Applicant, Morgan and Panos for each to receive a third of money generated. This agreement continued in 1997 and 1998. Payment was in fact made to the Applicant. The entire business arrangement was motivated by financial gain for all, including the Applicant. 33There was documentary evidence, adduced in the trial, which provided powerful corroboration of the marketing role played by Morgan and the documentary preparation and submission role played by Panos. The Applicant entered into all of these arrangements for personal financial gain and maintained a motive of personal financial gain throughout the active life of the business arrangements from 1997 to late 1998. 34By June 1997, the Applicant had met and clearly impressed a senior ATO officer, Mr Jim Killaly ("Killaly"). Killaly provided an impressive referee's report for the Applicant dated 30 June 1997. 35In about July or August 1997, Panos introduced Mr Geoffrey Strong ("Strong") to the Applicant as part of the developing relationships being formed to advance the business. In the meantime, inside the ATO, the Applicant was cultivating associations with persons working in the area of EBAs or employee benefit trusts ("EBTs"). 36On 30 June 1997, Mr Andrew Gardiner ("Gardiner") posted a message on the ATO GrapeVine system requesting that anyone who had seen an EBT arrangement to contact him. Within a day, the Applicant emailed Gardiner, stated that he had come across "a ripper of a scheme in the high wealth projects" which he was investigating and would sit down and review. The Applicant took this step as part of a process to advance his personal business interests through acts within the ATO which would assist those interests. Before, during and after this time, the Applicant intentionally withheld from ATO personnel the true facts concerning his private business interests and relationships. Thus, a process was underway where the Applicant was utilising his position, firstly as a consultant and later as a full-time employee within the ATO, to further his private business interests. A clear conflict of interest existed and the Applicant knew that this was the case. 37Advance opinions and rulings by the Commissioner of the ATO were regarded as valuable commodities by persons who were engaged in marketing schemes and tax products in the commercial world. The holder of an opinion or ruling, which expressed the ATO view with respect to the particular circumstances, was perceived as having an advantage for marketing tax schemes and products. The Applicant explained these advantages, in a practical way, to Morgan who was to perform the task of marketing them. 38In August 1997, the Applicant engaged in email communications with ATO employees including Gardiner and a Mr James Targett ("Targett") concerning EBTs. On 4 August 1997, the Applicant attended a seminar conducted by Mr Michael Charles ("Charles") at the Dandenong office of the ATO in relation to employee share schemes. The Applicant's contact with these ATO officers was primarily for the purpose of him establishing associations, and acquiring information, to assist his own private business interests. 39On 9 September 1997, Panos sent an application for an advance opinion, marked for the attention of Charles, for the Productivity Incentive Australia Productivity Incentive Plan. This application had been drafted by the Applicant. In effect, the Applicant was operating on both sides of the tax fence at the same time. He was associating with Charles and other persons inside the ATO. At the same time, he was preparing an application to be directed to Charles concerning the same subject matter. 40At various times in 1997 the Applicant was reminded of the importance of identification of actual or potential conflicts of interest. On 18 August 1997, a written agreement was entered into between the ATO and the Applicant's company, Middleduke Pty Limited ("Middleduke"), in relation to consultancy services for the ATO High Wealth Individuals' Taskforce. The agreement prohibited the Applicant from disclosing any Commonwealth material or contract material to any other person without prior written approval of the Commonwealth. In a portion of the agreement headed "Conflict of Interest", the Applicant warranted that, at the date of signing the contract, "No conflict of interest exists or is likely to arise in the performance" of obligations under the contract and that "if, during the term of the contract, a conflict or risk of conflict arises", the Applicant undertook to notify the ATO immediately in writing of that conflict or risk. 41On 19 August 1997, a day after he signed the Middleduke contract, the Applicant was communicating by email with Targett concerning an employee benefit trust. He requested Targett to obtain a copy of the trust deed from the relevant entity. 42On 28 August 1997, a marketing document entitled "The Mechanics of the Productivity Incentive Plan" was created by the Applicant. It was indicative of the active part being played by the Applicant in the development of the scheme of marketing EBAs for commercial gain. 43On 30 August 1997, the Applicant met with Morgan and discussed marketing approaches with respect to the Productivity Incentive Scheme. In early September 1997 a question arose concerning the Applicant's use of ATO facilities for non-ATO purposes. An innocuous event triggered a meeting between ATO officers and the Applicant. A memorandum dated 2 September 1997 (Exhibit C16) was prepared following that meeting. The memorandum was entitled "Future Arrangements Regarding Nick Petroulias". It indicated that the Applicant would "focus most of his attention on the review of international issues". It said "Where Nick in his private consulting work, represents a client which involves an ATO matter, the general nature of the matter should be communicated" to nominated senior personnel and this would "avoid any potential or perceived conflicts of interest". The memorandum stated "Nick's dealings with ATO people outside the high wealth individual task force will always be in conjunction with HWI people" and that this would ensure that "other ATO staff have a proper introduction to Nick's function in HWI". As a consequence, the Applicant was on clear notice of his obligations in the area of conflict of interest. 44Within days of this memorandum, the Applicant was in contact with an ATO officer, Mr Lowman Chow ("Chow") concerning an application for an advance opinion made by Panos for Productivity Incentive Australia Pty Limited. The Applicant had social dealings with Chow on 7 September 1997. Over the next two days, the Applicant prepared a lengthy facsimile which was sent to Chow on 9 September 1997 supporting the issue of the advance opinion. 45False and misleading statements were made to Chow in September 1997 with respect to the alleged activities of Productivity Incentive Australia Pty Limited. The application of 2 September 1997 for an advance opinion had been directed by Panos to Chow. They subsequently spoke by telephone at which time Chow informed Panos that his area within the ATO related to media and communication industries. Thereafter, Panos sent a facsimile to Chow stating that the Productivity Incentive Trust Plan would be developed mainly for prospective clients in the media and entertainment industry. It was asserted that Productivity Incentive Australia Pty Limited was seeking to develop the product for entities such as News Corporation, Fairfax, Village Roadshow, the Hoyts Group, Greater Union, Video Ezy, Civic Video, Dymocks and Angus & Robertson. That was a false statement by Panos communicated for the purpose of ensuring that Chow retained the application. The Applicant wished the application to remain with Chow so that the Applicant could exercise his influence to ensure a favorable outcome. 46There were further communications between Panos and Chow with respect to the application in September-October 1997. At the same time, the Applicant was communicating with Chow supporting the issue of the advance opinion. At no time did the Applicant inform Chow of his personal business association with Panos, let alone his personal interest in the application then before Chow. On 8 October 1997, Chow issued a favorable letter of advice in response to the application. It contained what was described as a "Part IVA sign off", a reference to Part IVA of the Income Tax Assessment Act 1936 (Cth). 47On 9 September 1997, Panos made application for an advance opinion for Productivity Incentive Australia Pty Limited Productivity Incentive Plan. The application was marked for the attention of Charles. This application had been drafted by the Applicant in and after August 1997. A draft of this document was located on the Applicant's hard drive seized by police. 48The Applicant played a part in settling a favorable response by Charles to the application. On 25 November 1997, Charles issued a favorable letter to Panos, a further example of the Applicant's gross conflict of interest. He had drafted the application sent by Panos to Charles, and then involved himself in the charade where he purported to assess the application and advise Charles as to the outcome. Like his involvement in the application to Chow, the acts of the Applicant with respect to this application involved serious impropriety. 49On 11 November 1997, the Applicant and Morgan together visited an accountant, Mr Calligeros, for the purpose of marketing EBT schemes. The Applicant was still a consultant to the ATO at that time. The purpose of the visit was so that the Applicant, together with his business associate Morgan, could market schemes for personal gain. 50On 14 October 1997, the company Morgan HR Pty Limited, was registered. This was a corporate front to be utilized by Morgan for marketing purposes. At all relevant times in 1997 and 1998, Morgan operated, on his own, out of a small flat in Elizabeth Bay. He had no employees or other staff. The registration of Morgan HR Pty Limited was effected to further the private business plan of the Applicant, Panos and Morgan. 51On 24 November 1997, the Applicant commenced permanent employment with the ATO, for a fixed term of four years, at the level of Senior Executive Service Band 1, Office of Chief Tax Counsel. 52On 25 November 1997, Panos made application for an advance opinion for a Productivity Incentive Trust Plan for Morgan HR Pty Limited. The application was marked for the attention of Targett. The Applicant had been in contact with Targett for purposes relating to EBTs since at least August 1997. The Applicant told Panos to mark the application for the attention of Targett. 53Following the receipt by Targett of the application of 25 November 1997, the Applicant communicated with him with respect to the application. The Applicant spoke with him on about 15 December 1997 and told him, with respect to the application, to "let this one go ... we will be looking at these in the new year ... we are going to issue a public ruling". On 12 January 1998, Targett issued a favorable advance opinion to Panos with respect to the Productivity Incentive Trust Plan for Morgan HR Pty Limited. 54The application made to Targett on behalf of Morgan HR Pty Limited by Panos included extravagant and clearly false statements concerning that company and its alleged activities. Although it was Panos who wrote the letter in question, the Applicant had knowledge of the falsity of this information, and the fact that it was being proffered to the ATO. It was the Applicant who had introduced Morgan to Panos and who was the mastermind of the private commercial arrangements put in place between these men, and others. 55On 2 December 1997, Targett spoke to Panos concerning the application he had received for Morgan HR Pty Limited. Panos informed him that the application had been directed to Targett because Morgan HR Pty Limited was an adviser dealing mainly with Large Business and Industry and Property and Construction clients whereas the Productivity Incentive Australia Pty Limited request sent to Chow had mainly dealt with media clients. At that time, Targett worked in the Large Business & Industry (Property and Construction) part of the ATO. The Applicant had proposed that the application be sent to Targett, with whom he had been in contact on EBT issues. The false statements by Mr Panos were made at the suggestion of the Applicant to ensure that Targett retained the application. Morgan HR Pty Limited had no clients at all. The company, in effect, was Morgan operating out of his small flat in Elizabeth Bay. His sole role was to market schemes. All this served to demonstrate a level of deceit used in communications with the ATO of which the Applicant was well aware. 56On 12 January 1998, Targett issued a favorable advance opinion with respect to the Morgan HR Pty Limited Productivity Incentive Trust Plan. 57The Applicant met Mr Emmanuel Aivaliotes ("Aivaliotes") in about April 1997. Aivaliotes had commenced working at the ATO in February 1996. Before then, he had worked for some 18 years as a solicitor in private practice and in other capacities. The Applicant asked Aivaliotes to work with him in the SRA and he commenced to work there in late 1997. He had an office on the same floor as the Applicant in the ATO's Centrepoint office in Sydney. 58For a period of months after January 1998, Panos (and others associated with the business, including Morgan, Strong and McLaren) directed applications for private rulings and advance opinions for the attention of Aivaliotes. These and other related applications were made as part of the private business arrangements involving the Applicant. Some 65 private rulings or advance opinions were issued by Aivaliotes pursuant to these applications between January 1998 and October 1998. It was the Crown case that the Applicant had effectively controlled Aivaliotes over a period of time and exercised influence over him, directly and indirectly, in the issue of favorable rulings and opinions. (Although Aivaliotes was, with leave, cross examined by the Crown Prosecutor at trial (having departed from his earlier evidence given in committal proceedings and at the first of the Applicant's trials) the jury's verdict was consistent with an acceptance of that earlier evidence which demonstrated the significant controlling role of the Applicant in the issue of favorable rulings and opinions in 1998.) Aivaliotes was used by the Applicant as a means of ensuring speedy and positive outcomes for applications for advance opinions and private rulings for applicants associated with the Applicant's own private business interests. The Applicant selected Aivaliotes as the person to whom applications should be directed because he had assessed him as a compliant individual who would act in accordance with the Applicant's wishes. 59Many of the advance opinions and private rulings issued by Aivaliotes were not the product of any independent legal assessment. Rather, if the Applicant indicated to Aivaliotes that opinions or rulings should issue, Aivaliotes proceeded to act in accordance with the Applicant's wishes. The applications for rulings and opinions which received favorable outcomes were made by, amongst others, Panos, Morgan, McLaren and Strong. 60On 19 January 1998, the Applicant was appointed Acting Assistant Commissioner, SRA, within the ATO. 61As 1998 unfolded, applications for advance opinions and private rulings came in marked for the attention of Aivaliotes. The Applicant was directly involved in the favorable consideration of these applications. At no time did the Applicant reveal to Aivaliotes either the fact, or the nature, of his business association with Panos, Morgan, Strong or McLaren. 62In and after January 1998, the Applicant held the position of Acting Assistant Commissioner within the ATO. The trust and responsibility vested in him in that senior office was manifest. In breach of that trust, the Applicant continued to involve himself, and effectively control, the outcome of applications for advance opinions and private rulings processed through Aivaliotes. 63On 31 March 1998, the Applicant completed a Statement of Registration of Private Interests which required disclosure of any areas of actual or potential conflict with public duty. No disclosure was made despite the clear existence of actual conflict. 64Whilst all applications for advance opinions and private rulings by the Applicant's business associates met with favorable outcomes, with the Applicant playing an influential role in these outcomes, the evidence demonstrated a different approach was taken by the Applicant to six applications by other interests. These applications were declined in 1998, with the Applicant playing a significant role in that outcome and was evidence of favoritism by the Applicant towards his business associates. 65On 26 March 1998, notices under s 264 Income Tax Assessment Act 1936 (Cth) were directed to Morgan HR Pty Limited and Productivity Incentive Australia Pty Limited through Mr Panos. Thereafter, Morgan wrote to Aivaliotes on 14 April 1998 concerning the s 264 notice to Morgan HR Pty Limited. On 21 April 1998, letters were sent by Aivaliotes with respect to these s 264 notices indicating that material in relation to the arrangements had been examined and that the ATO agreed with the tax consequences outlined by the companies and that, accordingly, "We will not be auditing your clients as part of this current project". The Applicant was aware that the s 264 notices had been sent to the two companies through Panos, and that powers under s 264 were being utilized with respect to these companies, Morgan and Panos. This was a façade, by which the s 264 power was utilized resulting in letters being provided to Morgan and Panos which were capable of being utilized for marketing purposes. The involvement of the Applicant in this area involved a misuse of an important statutory power under tax legislation. 66In May 1998, the Applicant formed the view that documentation should be created to provide a veneer of authenticity to the process of assessment by the ATO of Productivity Incentive Corporation applications. Located in the hard drive of the Applicant's computer seized by police was a non-formatted version of a document headed "Productivity Incentive Corporation Re Meeting on Wednesday 28 January 1998 and Thursday 29 January 1998". It was a draft of a document which, in settled form, was entitled "Memorandum of Understanding Re the ATO Attitude Toward the Taxation Treatment of Incentive Structures" on the letterhead of Productivity Incentive Corporation. 67This document purported to be minutes of a meeting on 28 and 29 January 1998 attended by the Applicant, Strong, Panos and Aivaliotes. When investigations were underway in late 1998 and early 1999, the Applicant handed copies of this document to senior ATO personnel. No meeting had taken place on 28 and 29 January 1998 as alleged in this document, which was created by the Applicant. It was contrived, and created by the Applicant at a time when he held a senior position in the ATO. 68Applications for advance opinions and private rulings by the Applicant's business associates were addressed to Aivaliotes in the ATO in 1998. Some applications came in batches and favorable rulings and opinions were frequently issued in batches. For example, five applications for private rulings were made on 1 May 1998. Aivaliotes issued four private rulings on 3 June 1998 and four more on 5 June 1998. Four private rulings were issued by him on 17 June 1998. Thirteen applications for private rulings were made on 30 June 1998 and 12 rulings were issued by Aivaliotes on 8 July 1998. Five more applications for private rulings were made on 9 July 1998. Seven private rulings were issued by Aivaliotes on 10 July 1998 with two more on 15 July and three more on 16 July 1998. All of these rulings were made by or on behalf of entities associated with the Applicant's undisclosed business interests. 69On 25 July 1998, a meeting took place at the Airport Sheraton Hotel in Sydney between the Applicant, Panos, Strong, McLaren, Gray and Morgan. It was not a meeting attended by the Applicant in his ATO capacity. It was a meeting between business associates to discuss products and marketing strategies for the sale of tax schemes. The Applicant was not present for any lawful purpose. Rather, the meeting was to advance his own private business interests and those of the other persons present. 70It was about the time of the 25 July 1998 meeting that the Applicant provided to Morgan documents, being client lists, containing information which had been obtained in the exercise of the Applicant's duties with the ATO. The provision of these documents to Morgan by the Applicant founded the conviction by the jury on the third count. The documents provided by the Applicant contained summaries of taxpayers and tax agents whom the Applicant considered ought be contacted by Morgan for marketing purposes. 71The Applicant considered that there was a substantial advantage in Morgan having this material for marketing purposes given that it summarised persons and entities who were likely to be receptive targets for marketing of tax schemes. The Applicant's intention was that the information be used to exploit a marketing advantage which possession of this information gave the Applicant and his associates over their business competitors. The Applicant provided these documents to Morgan for the purpose of advancing his personal interests. The information contained in these documents had been compiled from information gathered by use of the ATO's compulsory powers. 72By this time, the Applicant occupied high office in the ATO. The information contained in the documents had been gathered by use of statutory powers, including s 264 notices. The Applicant was motivated by private financial gain in handing these documents to Morgan, although they were not subsequently used for marketing purposes. 73On 25 September 1998, the Applicant was appointed First Assistant Commissioner, Strategic Intelligence Network, within the ATO. 74On 20 October 1998, the Public Rulings Panel of the ATO met in Melbourne to discuss the forthcoming issue of a draft public ruling concerning the associate test. The Applicant attended this meeting. 75On 21 October 1998, Aivaliotes issued six advance opinions or private rulings with respect to non-complying superannuation funds, all in response to applications by Morgan or McLaren. An advance opinion and a private ruling concerning non-complying superannuation funds were issued by Aivaliotes to Strong on 23 October 1998. 76On 28 October 1998, the draft tax ruling was issued at a press conference held by Mr Carmody, the then Commissioner of Taxation. At this time, the Applicant informed Mr Carmody that there would be a reaction because of rulings that had issued. Thereafter, a process of investigation commenced during which the Applicant was asked to identify rulings and opinions which had issued. 77During this investigation, the Applicant provided incomplete and misleading explanations to ATO personnel who were seeking from him the true facts concerning what had happened. It was during these investigations that the Applicant proffered the fabricated "Memorandum of Understanding" said to have arisen from a meeting on 28 and 29 January 1998, referred to previously. The Applicant was in a position to provide, if he saw fit, a full and frank account of the opinions and rulings which had been issued. He did not provide that information to ATO personnel. 78Police seized a large number of original ATO documents and copy documents. They constituted a substantial, if not complete, record of applications by the Applicant's business associates for advance opinions and private rulings, and the opinions and rulings themselves. The Applicant retained, took away and secreted these documents. He did not produce them to ATO investigators, nor did he use them to provide a complete account of events to them. 79At the suggestion of the Applicant, a meeting took place between Aivaliotes and the Applicant at Coogee Beach on 16 March 1999. According to Aivaliotes, the Applicant was somewhat agitated. This was a consequence of his awareness that the investigation may reveal the true facts of his association and dealings with Morgan, Panos, McLaren, Strong and others associated with his business arrangements. 80At this meeting, the Applicant handed to Aivaliotes a document which identified six "problem areas" and suggested, with respect to each area, a "possible response". One of the problem areas was "Why all applications look the same". The preparation and production of this document by the Applicant evidenced his knowledge of contrivances used in 1998 with respect to applications for, and the grant of, favorable advance opinions and private rulings to persons with whom the Applicant had private business interests. 81The Applicant resigned from the ATO effective on 6 April 1999. 82On 8 April 1999, the Applicant handed to Mr Brown, an ATO investigator, a laptop computer which had been issued to him by the ATO. Technical examination of the Applicant's computer revealed a letter described in the trial as the "Nick to Nick" letter. This letter was prepared by the Applicant and was directed to Panos prior to 8 April 1999. The letter shed substantial light on the true relationship between the Applicant, Panos, Strong and McLaren and demonstrated the controlling and pivotal role of the Applicant in his secret (from the ATO) business arrangements with those persons. The letter was in the following terms: "Nick, The DPP has now become involved. They are looking at favoritism towards certain people. There are a number of loose ends that need to be sorted out. These are:- Geoff and his mates. As you know, they have been giving us the problems in what they have been saying. It is important that you sort out the position with Geoff. Further, the meeting in January - the 2 day one where you, me, Geoff and Emmanuel met in the York Street offices to discuss how PIC would operate its plans and that PIC would be sending in a number of plans. It is important that you and Geoff get familiar with those notes. These are notes prepared by either Geoff or you and sent to me. (They are very suspicious of those notes). The client lists - if Geoff has any, make sure they are destroyed. McLaren: I believe they now know about Global Growth. What is the relationship with PIC? I don't know, I am going to say that they are some sort of copycat as Geoff and McLaren swap ideas and letters. But I would not know the full story. That is for you to sort out. There is a problem with the Ashley Cain application. It is dated 25 March (as are all PIC applications - eg Co Ltd by Guarantee and ETP Plan). Further, answers questions that have not yet arisen until October. Ie the Deed of Contribution is in response to the Commissioner's ruling in October - they can't have predicted it back in March. The only answer I can suggest and please make sure that McLaren has memorized, is that because when they called in October, and I raised the FBT concerns, the [sic] amended the application but not the original date. Ie they changed their submission on the FBT point, without changing the date of the original application and faxed it a few times to the ATO to make sure that they got it. Money - This is particularly important. Everything must be accounted for, even if as loans to Geoff and others. No HK shit. It smells bad. The idea of investing in HK was to set up a major superfund as a spin off from the existing operations." This document demonstrated a number of things: (i) the Applicant was conscious that the authorities were investigating "favoritism" towards certain people and that, in that context, "a number of loose ends ... need to be sorted out"; (ii) the Applicant was acknowledging favoritism towards others in the issue of advance opinions and private rulings; (iii) the Applicant recognised the existence of a conflict of interest and the need to hide the true facts to guard against its discovery; (iv) the Applicant was directing Panos to "sort out the position" with Mr Strong "and his mates"; (v) there was reference to notes of the alleged meeting in January 1998, when no such meeting in fact took place; (vi) the Applicant recognised that there was a need for all concerned to familiarize themselves with the alleged minutes (which were a contrivance) to prepare for the investigation; (vii) the Applicant directed Panos that if Strong had any "client lists" he should "make sure they are destroyed", a direction which shed light considerable light upon the role of the Applicant with respect to the conduct of the business and bore upon the second and third counts; (viii) the reference to "money" being "particularly important" and that "everything must be accounted for, even as if loans to Geoff or others" pointed strongly towards the Applicant's involvement in a business for financial gain. 83Telephone conversations between the Applicant and other persons were recorded in September and October 1999. A number of statements of the Applicant during these telephone conversations were incriminating. During a conversation between the Applicant and McLaren on 24 September 1999, there was discussion concerning what police investigators should be told concerning Productivity Incentive Corporation. The Applicant directed McLaren not to mention Morgan to the police. The Applicant suggested to McLaren a possible explanation to police as to how he (McLaren) obtained information as the ruling requests "were exactly the same". The Applicant suggested that he tell police that he obtained them on disk from Panos, all of which demonstrated the controlling and central role played by the Applicant. 84On 23 March 2000, police seized a large number of original and copy ATO documents and the Applicant's hard drive from a storage unit rented by the Applicant. The Applicant was arrested and charged by police on the following day.

Appeal against conviction - Count 2 85To return to the challenge to the conviction on Count 2, the written and oral directions to the jury confirmed that the elements of Count 2 were distinct from those of Count 1, although the same evidence was relied upon. Much was made of the fact that the Crown had addressed on the basis that Count 2, in a practical way, was "the first count without the element of deprivation" or "effectively, the circumstances of the fraud count less the element of deprivation". That was how the primary judge put it to the jury at pages 521 and 535 of his summing up (which took some nine days, that being shorter than each of the Crown and defence closing addresses). 86Much also was made of the fact that hundreds of pages of addresses by counsel and summing up by judge were directed to the evidence particularising Count 1. The gravamen of the Applicant's submissions was that the factual and legal complexity surrounding Count 1 was, in a practical sense, imported into the conviction on Count 2 by reason of the shared approach that the latter was, effectively, the former without the element of deprivation. 87Mere complexity of issues cannot of itself, save in the most extreme case, result in a real danger that the jury fails to perform its function properly. An example of the most extreme case is R v Wilson and Grimwade [1995] 1 VR 163, and the Applicant said that the position in his trial was comparable. However, that was a very different case, which lasted around four times as long as the Applicant's lengthy trial (some two years), was punctuated by lengthy adjournments, and notable for conduct by junior counsel appearing for one of the men accused which the Court "deplored", including reading transcripts of his client's evidence in chief over some ten calendar weeks: see at 180. The principle framed by the Full Court was whether the course taken by the trial: "did not fit it for an essential purpose for which a criminal trial is by definition designed: to enable it safely to be seen that the jury has given a true verdict reached upon a proper consideration of the evidence": see at 181. 88Although the Applicant gave prominence to the total length of time in which he had been involved in litigation arising out of his prosecution, only if he can challenge the verdicts of the third jury empanelled to determine the charges can an appeal against conviction be allowed. The relevant time does not include the very substantial time preceding the third trial. The fact that the way in which the Crown case may have changed in the years preceding 18 May 2007 is not to the point; the first ground of appeal correctly confines attention to changes and resultant confusion "from time to time during the trial". 89The trial was long - some seven months. However, as the Crown pointed out, there are in most years trials in the Supreme Court and the District Court which are that long, or longer. 90The Applicant also emphasised that there were many weeks where the jury sat less than the four and a half days scheduled. No attempt was made to identify why that occurred. Although in an extreme case, a lengthy adjournment during the middle of a trial might support an inference, particularly if coupled with other features, that the jury could not perform its functions (as was noted in Grimwade), the present case is far removed from that position. 91Ultimately, the principal difficulty the Applicant faces is that there was little scope to confuse the jury in relation to the directions on Count 2. The jury had the benefit of written directions, in a form to which counsel then appearing for the Applicant agreed before they were provided to the jury. They were relatively short. The whole of the primary judge's directions on the second count were as follows: "The second count alleges: 'That between about October 1997 and February 1999 at Sydney, New South Wales and elsewhere, the accused, then a Commonwealth officer with the Australian Taxation Office, did agree to receive a benefit for himself, namely money, on an understanding that the exercise by him of his duty as a Commonwealth officer would be affected.' The essential elements of this offence, each of which the Crown must prove beyond reasonable doubt, are as follows: (a) that the accused was at all relevant times an officer with the Australian Taxation Office and, thus, an officer of the Commonwealth; (b) that the accused agreed to receive a benefit in the form of money for himself, not that he did in fact receive it but that he agreed to receive it; and, (c) that the basis upon which the accused so agreed to receive that money benefit was an understanding that he would, in return, be improperly affected in the performance by him of some duty which he owed in his capacity as a Commonwealth officer, namely, as an officer of the Australian Taxation Office. They are the essential elements. As the written direction says, the element of deprivation which the Crown must prove in the first count is not an element with respect of the second count. Before you could convict on the second count in the practical context of this case, it would be necessary for you to be satisfied beyond reasonable doubt that the accused was party to arrangement of the type to which I have adverted with respect to the first count. There is no allegation in the second count that the accused agreed, as the charge alleges, to receive a benefit for an improper consideration in some kind of vacuum. What the Crown says is that the accused agreed to receive a benefit in the form of money, in the sense that he was party to a commercial business arrangement with others; he was a member of that arrangement, or partnership, or business venture to sell schemes for the financial gain of those involved, including the accused. The case against the accused is that he did agree to receive such a benefit upon an improper basis as an incident of that agreement which, according to the Crown, was struck between the accused, Mr Morgan, Mr Panos and the variants of that arrangement, which I have mentioned earlier which refer to Mr Gray, Mr McLaren, Mr Strong. As would be apparent to you, there is substantial overlap between the first and second counts, given the necessity for the Crown to prove the arrangement before there could be a verdict of guilty with respect to the first or second count." I will, of course, return to the second count later, but that is all I wish to say about it for the moment." 92The primary judge returned to the lengthy addresses by the Crown at page 535 and said the following: "The Crown then moved to the second count and submitted to you that the second count is, effectively, the circumstance of the fraud count less the element of deprivation. The Crown submitted that you would be satisfied that the accused was party to a financial arrangement, which was foundational to the allegation in the first count as well as the second count; that you should accept the evidence of Morgan that there was an agreement to share money, including the accused and that money was, in fact, paid; that at the time that that arrangement was entered into, the accused was a consultant, but later became a full time employee of the ATO and found himself in the position where he could directly control, so the Crown says, the issue of rulings and opinions, in particular by Mr Aivaliotes, over a period of time. The Crown invites you to approach the evidence, looking at the course of events over a period of time. The second count, of course, involves different legal elements to the first. The Crown submits that, with respect to the second count, you would be satisfied that what the accused was doing was undeniably improper if you were satisfied, beyond reasonable doubt, he was party to an arrangement for financial gain. And the second count, of course, requires you to be satisfied beyond reasonable doubt that the accused agreed to receive a benefit, namely, money. It is the agreement to receive the benefit - the actual receipt of money is not an essential part of the second count, although it is part of the evidence the Crown leads. There must be an agreement to receive a benefit, namely money, for the accused to improperly act in the exercise of his duties within the ATO. The Crown submits that you would be satisfied that the accused was in a position to exercise influence over what was happening in the ATO and that this involved the improper exercise of his duty as a tax officer to act impartially, and that this was done as a result of his agreement to receive money. The Crown submits that the second count is not an alternative to the first count. Verdicts are sought on both. However, the Crown submits that if there was a reasonable doubt with respect to the element of deprivation on the first count, then the second count does not involve that element, then you would be well satisfied on the second count. The Crown, of course, contends that you would be satisfied on the first count as well." 93The Applicant submitted that the references in the written and oral directions to "arrangement of the type to which I have adverted with respect to the first count" introduced the complexity accompanying that count. We reject that submission. The reference is to a discrete aspect of the summing up in relation to the first count, which identified four permutations of partnerships or ventures between the Applicant and one or more of Panos, Morgan, Gray, McLaren and Strong. That is not only the ordinary meaning of the words, but also it is confirmed by the third last paragraph extracted above where those men's names are mentioned. 94The Applicant's submissions focussed on the element of "impropriety" in the written and oral formulations of the directions to the jury. It was said that there was a multitude of ways in which fraud was sought to be established for the purposes of Count 1, and that the complete absence of clarification as to "impropriety" in Count 2 led to an inadequate direction to the jury and subsequent miscarriage of justice when it returned a guilty verdict. To illustrate this, he asked, rhetorically, how could anyone know on what basis the jury had found, beyond reasonable doubt, the element of impropriety? 95We reject this submission. The Applicant's submission that there were a variety of ways in which the Crown contended that the jury would be satisfied beyond reasonable doubt as to Count 1, including as to fraud, may be accepted. But the element of impropriety was not an element of the offence, nor of the charge. It was added, consensually, to the formulation to the jury. To that extent, it amounted, as the Crown submitted, to a benefit to the Applicant. The answer to the Applicant's rhetorical question is that it matters not; what matters is that the jury was unanimously satisfied beyond reasonable doubt of the elements of offence in Count 2. 96In short, the Applicant has failed to show that the complexity associated with Count 1 has led to any deficiency in the conduct of the trial or more particularly its summing up such as to give rise to appellable error in respect of Counts 2 and 3. That conclusion is strengthened by the fact that this complaint was not made at trial. The difficulties in relation to r 4 of the Criminal Appeal Rules in this respect are very substantial. The written direction provided to the jury was the subject of relatively extensive debate between counsel and the primary judge in the absence of the jury, and indeed was amended in relation to Count 3 at the request of counsel for the Applicant (see transcript 4834-4836 on 22 November 2007). No complaint was otherwise made in relation to the direction. The oral summing up by the primary judge was consistent with the direction, although it elaborated upon it. Counsel for the Applicant was given an opportunity at the conclusion of the summing up to be heard as to anything that had been said. Counsel took advantage of that opportunity but not in any way sought now to be identified as giving rise to a miscarriage of justice on appeal. 97It is trite that "the requirements of r 4 do not constitute some mere technicality which may simply be brushed aside": R v Germakian [2007] NSWCCA 373; 70 NSWLR 467 at [10]. Further, as the Court added at [13] (citations omitted): "Generally speaking, leave under r 4 will only be granted where an irregularity has occurred which is such a departure from the essential requirements of the law that it goes to the root of the proceedings ... or as Mahoney JA said: '...unless there be a convincing reason why the matter was not raised at the trial and unless the possibility of real injustice appears, an accused should be held to what was done by or for him at trial level.'" 98It is also well settled that "a failure to raise objections at the close of the judge's summing up is usually a reasonably reliable indicator of the fairness and adequacy of it": R v ITA [2003] NSWCCA 174; (2003) 139 A Crim R 340 at [90] and see the cases collected in AP v R [2013] NSWCCA 189 at [29]. 99Those principles apply with especial force where, as here, the trial was very long and complex, and the accused was represented by capable counsel with a proven capacity to identify errors as and when they occurred.

Appeal against conviction - Count 3 100The challenge to this conviction was very much secondary compared to the challenge to conviction on Count 2. It was the subject of precisely one paragraph in the (extensive) written submissions: "As to Count 3 there appeared to be a lack of adequate direction on the necessity for the documents to contain information held or obtained by the ATO relating to the affairs of a person rather than content or information generally available to those with a knowledge of and interest in taxation matters. The summing up was inadequate to distinguish between these concepts and did not preclude that the appellant's role on the ATO conflicts or other improper or consciousness of guilt conduct sufficiently established the information was confidential information as to the affairs of a taxpayer thus prejudicing his defence and failing to put it adequately to the jury so as to provide a sufficient balance." 101In oral address, it was said that insufficient direction had been given in relation to the issue for which the Applicant had contended at trial, which was that the material found to be have been communicated by the Applicant did not concern "the affairs of a person", because the client lists were fictitious, or, in the words of the witnesses, "dummy documents". 102Once again, the written directions in relation to Count 3 were agreed between the parties, and were as follows: "The third count alleges an offence against the Accused in the following terms: 'Between about June 1998 and April 1999 at Sydney, New South Wales, Nikytas Nicholas Petroulias, then being a Commonwealth officer with the Australian Taxation Office, did publish to Richard Llewellyn Morgan, a person to whom he was not authorised to publish, documents which came into his possession by virtue of him being a Commonwealth officer, and which it was his duty not to disclose.' The essential elements of this offence, each of which the Crown must prove beyond reasonable doubt are as follows: (a) that the Accused was an officer of the Commonwealth within the Australian Taxation Office; (b) that the Accused obtained possession of documents which contain information respecting the affairs of any other person by virtue of him being a Commonwealth officer; (c) that the Accused was under a duty not to disclose the documents to a person to whom publication was not authorised; (d) that the Accused published the documents to Mr Morgan - in this context, to publish documents means simply to give them to Mr Morgan; (e) that Mr Morgan was not an authorised recipient of the particular documents." 103The client lists the subject of this count were in evidence. They were lists of taxpayers, with details of their tax agents, and the amounts of deductions which they had claimed pursuant to various schemes in the financial years ended 30 June 1996 and 1997. In written submissions filed after the hearing (and extending beyond the grant of leave both in terms of time and subject matter) it was suggested that there was "no evidence" that the documents included taxpayer information. That complaint goes beyond the grounds of appeal, and it is quite wrong for a party to raise by supplementary written submissions fresh points. But in any event there is nothing in the point. It was amply open to the jury to find beyond reasonable doubt that the lists included taxpayer information. The evidence touching on this point has not been summarised above, save for the "Nick to Nick" letter, but that by itself coupled with the nature of the documents is sufficient. If the lists truly were "dummy documents", why would the letter contain "The client lists - if Geoff has any, make sure they are destroyed"? It may be added that there was a summary by the judge to the jury of the Crown submissions as to the evidence supporting this count at transcript pages 536-540, including in terms the "dummy document" issue raised by the defence, and of the defence case at transcript pages 562-564, which make it plain that there was evidence (admittedly, evidence some of which pointed in different directions, but that is not to the point) supportive of the Crown case. It was incorrect for the Applicant to assert that there was no evidence that the information on the lists was genuine taxpayer information. 104Further, to the extent that this ground complained of a failure to direct in relation to the information being confidential, it is misconceived. Confidentiality is no element of the offence (although it would be relevant to the objective seriousness of the offence). 105We do not consider that it was necessary for the primary judge to give any further direction in relation to Count 3 than was given. Again, we are strengthened in that conclusion by the fact that senior counsel appearing at the trial agreed to the written formulation, and did not relevantly wish to be heard further as to the oral formulation. 106The Applicant contended that r 4 did not apply in respect of the alleged inadequacies in the direction to the jury. That is not so: see Buckley v R; R v Buckley [2012] NSWCCA 85 at [32]. If the Applicant had demonstrated a miscarriage of justice, in the sense of losing a real chance of acquittal, by reason of the alleged error, then that would be a case for granting leave: Picken v R [2007] NSWCCA 319 at [19]-[21]. For the reasons already given, we are not satisfied that any error has been shown.

Orders 107None of the Applicant's grounds of appeal as ultimately pressed raises a pure question of law. It follows that leave is required, not only under r 4 but also under s 5(1)(b) and (c) of the Criminal Appeal Act 1912 (NSW). For the reasons already given, leave should be refused. It follows that the appropriate orders are: (1)Refuse the Applicant leave under r 4 of the Criminal Appeal Rules to raise grounds challenging the summing up to the jury, in circumstances where no such objection had been taken at trial. (2)Refuse the Applicant leave to appeal against his convictions. (3)Refuse the Applicant leave to appeal against the sentences imposed on 20 June 2008.

Amendments 27 June 2014 - In the 3rd sentence, "read a verdict" has been amended to "reach a verdict" Amended paragraphs: 1 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: 27 June 2014