R v Jost [2002] VSCA 198

2. I will invite Chernov, J.A. to give the first judgment in this matter.

6. The applicant, Jakob Hans Jost, who is now aged 65, was presented for trial in the County Court at Melbourne on 19 February 2001 on one count (count 1) of conducting a banking business between 9 June 1994 and 18 November 1998 contrary to s.7 of the Banking Act 1959 (Cth.) and on 47 counts (counts 2 to 48) of obtaining property by deception between 14 December 1990 and 22 October 1998 contrary to s.81(1) of the Crimes Act 1958. The applicant pleaded not guilty to all the counts. On 26 March 2002, after a trial occupying some 23 sitting days, the applicant was found guilty on all counts except one count of obtaining property by deception (count 44).

9. The sentencing judge heard a plea for leniency made on behalf of the applicant, who had no prior convictions, and on 27 April 2002 sentenced him to pay a fine of $7,000 in respect of his conviction on count 1 and to a total effective sentence of four years and six months' imprisonment in respect of the remaining counts on which he was convicted. His Honour directed that the applicant serve a minimum term of three years' imprisonment before becoming eligible for parole.

12. On 5 May 2001 the applicant applied for leave to appeal against his conviction. The grounds on which he then relied in support of his application were amended by leave of the Registrar granted on 23 October 2002. As a consequence, the three grounds on which he now relies are that the judge erred in the directions he gave to the jury in relation to "any intention to permanently deprive for counts 2 to 48"; that the verdicts were unsafe and unsatisfactory because his Honour failed in his charge sufficiently to "identify and relate the defence of the applicant to the circumstances in general, to particular counts and to particular elements of the offences"; and thirdly, that the verdict in relation to count 1 was unsafe and unsatisfactory as it was a "between dates" count, and there were two legal definitions

16. Before dealing with these grounds, it is necessary to describe broadly the circumstances in which the offending took place. For some years prior to 1990 the applicant had been involved in a number of business ventures including the operation, in partnership with another, of a restaurant in Balaclava known as Famous Fritz which specialised principally in German food and promoted a German theme as part of its operation. The applicant was also involved in providing financial services and was appropriately licensed to pursue that activity. He regarded himself, inter alia, as a philosopher and incorporated the Guild of Philosophers Ltd ("the Guild of Philosophers") to which further reference will be made later. He also styled himself "doctor" on the basis that he had secured a doctorate in Sacred Philosophy from an institution known as World University of America. This he achieved by paying a mere US$150 for a certificate to that effect.

20. It seems that in around 1990 the applicant conceived a plan to develop approximately 77 hectares on Flinders Island, which then included an airstrip and some rudimentary buildings, as a tourist resort which he planned to call "Philosopher's Hill". In fact, he caused one of his companies, Eagle Interlink Pty Ltd ("Eagle Interlink"), to purchase the property on 28 February 1991 for $150,000. The money borrowed for that purchase was secured by two interest only mortgages over the property and a personal guarantee from the applicant. It was admitted by him in his records of interview, to which further reference will be made later, that before buying the property (or thereafter) he had not obtained an independent valuation of it or had undertaken a feasibility study of the development project.

23. It was common ground that the applicant did not have sufficient assets to finance the construction of the resort, so he turned his efforts to raising funds for that purpose, and for the purpose of funding his other activities, through an apparent banking structure. It seems apparent that during the relevant period the applicant gained some familiarity with banking controls in this country. For example, when police raided his premises on 19 November 1998, as will be mentioned later, they there found a copy of the Banking Act, some sections of which were highlighted by him. As will also become apparent, he corresponded with the Reserve Bank about his allegedly proposed banking activities and received advice on that subject from a solicitor experienced in that field. On 12 November 1990 he sought permission from the Reserve Bank to use the word "bank" in the name of the institution Eagle Bank which he then proposed to establish, but after permission for him to do this was effectively denied, he caused a company called Eagle Bank Inc ("Eagle Bank") to be incorporated in Nauru. In his records of interview he said that Eagle Bank was established for the purpose of obtaining finance for the proposed Flinders Island development. He controlled the company and was its President. He also secured a banking licence for the company in Nauru. The licence contained conditions which, so far as is relevant, included the condition that the licence would be "ipso facto...cancelled" if, inter alia, "operations of the bank are not conducted as in-house operations" or if Eagle Bank failed to submit to the Registrar of Banks (in Nauru) its properly verified accounts within six months after the end of each financial year. It seems on the evidence that no relevant accounts were ever submitted by Eagle Bank to the Registrar in Nauru and therefore, it would appear that its Nauru banking licence lapsed sometime in 1992 or thereabouts.

Applicant's procurement of funds from "investors".

27. It was the Crown case that during the period in question the applicant dishonestly obtained money from the 17 complainants named in the presentment ("the investors") in order to fund the development of the proposed resort and a number of his other personal and business activities. The deposits that were so placed with the applicant ranged from as little as $20 to over $100,000 and most were for short periods such as 60 or 90 days. The applicant's modus operandi in procuring those moneys, although varying in detail in relation to some of the investors, had a common thread. Many of the investors were either his friends or acquaintances or were otherwise known to him through his business dealings or through the Guild of Philosophers. Thus, the applicant approached a number of people whom he had befriended at the Famous Fritz restaurant and coaxed them into depositing funds with him, especially on the basis that they would be invested with his bank. He used various devices to obtain the confidence of his victims. For example, he established a rapport with some of them, who, like the applicant, had come to Australia from a particular area of Germany. They often frequented his restaurant where they were able to converse with him, in their Schwaben dialect. In his discussions with them, the applicant built up their confidence in his business skills by making frequent mention of "his bank" and his role in it as "president". He offered them and other investors interest at a considerably higher rate than that which was available in the market. In some cases interest was promised at 21 per cent and he gave various reasons why the rate was substantially higher than that prevailing in the market. An explanation that he often gave was that his smaller operation and lower overheads enabled him to offer a more attractive rate. Another device which he used to give credibility to his operations was the production to investors of elaborate certificates which acknowledged their investments. He also used the title "doctor" or "philosopher" or drew upon his credentials as "founder" of the Guild of Philosophers to engender confidence in would-be investors, and would at times deliver their monthly interest payments in cash in order to ingratiate himself to them and persuade them to invest further funds. In order to illustrate how the applicant dealt with investors, his dealings with Mr and Mrs Ribstein (who are the complainants in respect of counts 2 to 9) can be considered briefly. Hans Ribstein and his wife Helga met the applicant at the Famous Fritz restaurant in 1986. They came from the same area of Germany as he did and spoke the Schwaben dialect of that area. In 1992, the applicant went to Ribstein's home in Albury and told him that he was a licensed finance broker and that he was establishing or had already established a small bank which would look after his customers individually and offer better returns than normal. Ribstein had just retired and was looking for means to enhance his financial position. In early April 1992 Ribstein gave the applicant a cheque payable to Eagle Interlink, drawn on his company account for the sum of $12,000. This cheque was paid into the Eagle Interlink account on 6 April 1992. Prior to this deposit, there was a net balance of $764 in the account. After the deposit of the cheque into that account, various cheques were drawn on it and by 10 April 1992 the balance of that account was $126 credit. Some months later the applicant gave Ribstein a cheque for $12,000 dated 1 October 1992, drawn on the account of Schwaben International Australia, an account controlled by him as purported security for the investment. On 2 October 1992 the applicant again visited Ribsteins' house and spoke of his bank. The Ribsteins signed an application to open an account with Eagle Bank which showed that they wished to invest funds for a period of three years at an interest rate of 11 per cent per annum. They gave the applicant a cheque for $20,000 and received from him an Eagle Bank certificate showing that this sum was invested on 2 October 1992 for a minimum period of three years with an interest rate of 11 per cent per annum. A statement purportedly from Eagle Bank, dated 9 October 1992, showed a credit in the account of $20,000.

30. Eagle Bank did not have a bank account in Australia so that, although the investors generally believed that their money was being deposited with it, the funds were in fact placed in other accounts that were controlled by the applicant or they were otherwise disbursed at his direction. The money was then used by him for various purposes, none of which was disclosed to the investors. During the period in question, the applicant obtained over $1 million from the investors, nearly all of which was lost to them. Of that amount, approximately $400,000 was spent by the applicant on the Flinders Island development. The physical "development" of the project was undertaken by one Stanley, a bricklayer, who was engaged by the applicant to carry out building works at the proposed resort for which he was paid in excess of $280,000 primarily through Eagle Interlink. All or nearly all of the payments to Stanley and the interest on the mortgage over the Flinders Island property, although made by Eagle Interlink, originated from the investors. It seems that Eagle Interlink was funded from time to time by Eagle Bank pursuant to facility agreements, one dated 16 May 1991 for $1 million at an interest rate of 17 per cent and the other, dated 30 June 1995, for a further $2 million at an interest rate of 16.5 per cent. Under the agreements, however, the interest was to be capitalised so that it was obviously contemplated by the applicant that Eagle Interlink would not pay any interest on those loan moneys until completion of the project which was planned for some time in 2008.

33. Another use to which the applicant put the investors' money was to pay interest on the investments themselves and to repay them when they were called up. Because the applicant did not place the funds in income-generating investments, his only source of funds for paying interest to the investors or repaying the capital sums was the money which he procured from other investors. Yet another use to which the applicant put the money in question was to fund his TAB telephone account through which he participated in a betting scheme known as TAB Operations Program. Investors' funds were also utilised by the applicant to settle his many other personal outgoings.

36. It was the Crown case that the deception which the applicant practised on investors was by conduct in the sense that, although he did not in terms tell them that their money would be deposited in Eagle Bank, he created the impression by his references to "his" bank and to his own position at it and to its operation, that the money would be deposited with his bank and would be invested in bank guaranteed investments.

40. At all relevant times s.7 of the Banking Act relevantly provided that a person other than a body corporate "shall not carry on any banking business in Australia". It was clear on the evidence at the applicant's trial, and he admitted as much in his records of interview, that neither he nor any of his companies ever held a licence or authority to carry on banking business in Australia. Moreover, the evidence at the applicant's trial showed that, in about mid-1995, he was advised by a solicitor, Peter MacSporran, who had assisted him in a number of transactions including the registration of Eagle Bank in Nauru, that it was impermissible for him to use the deposits obtained from the investors for the purpose of developing the Flinders Island project unless the money was specifically lent for that purpose, which was not the case. The solicitor said that, in any event, a deposit that was on call for three months could not be loaned out to a project that had no cash flow and was unable to repay on demand. He emphasised that the applicant "must not, in effect, carry on Eagle Bank business here...". The applicant received similar advice from a finance broker, Steven Burrows.

43. That the applicant must have been aware that he could not lawfully conduct banking business in Australia without a relevant licence seems apparent from his following correspondence with the Reserve Bank in about mid-1995. In a letter dated 7 June 1995 to the Reserve Bank of Australia in relation to establishing a representative office of Eagle Bank in Australia, the applicant said:

"We are aware of the provisions of the Australian Banking Act & Regulations and understand that the bank must not directly conduct any banking activities, but only transactions necessary for and incidental to the maintenance of the Australia in Australia."

The applicant again wrote to the Reserve Bank on 17 July 1995 stating:

"We are aware of the provisions of the Australian Banking Act & Regulations. We understand that the representative office will be required to confine its business to the conduct of purely liaison activities and it will not engage in any form of banking business such as: receiving deposits, granting loans...".

49. The applicant claimed, however, that he lawfully circumvented the prohibition on him and Eagle Bank to conduct banking business here by the device of confining his banking operations to "in-house" transactions. More specifically, he limited the investors with whom he dealt to those who were either members of the Guild of Philosophers or those to whom he had caused Eagle Bank to issue (worthless) shares in its capital. In that context, the applicant promoted his bank investments to others, hoping to induce them to become members of the Guild or to take shares in Eagle Bank and thus "qualify" to deposit money with his bank. For example, at the investment expo held at the Melbourne Convention Centre in October 1998, as representative of the Guild of Philosophers, he promoted "investments in Eagle Bank" to those who were willing to join the Guild or receive shares from Eagle Bank.

Charges under Banking Act, Crimes Act.

53. On 19 November 1998 the police executed a search warrant at the applicant's premises. They later conducted two lengthy interviews with him, one on 19 November 1998 and the other on 28 April 1999, and in the result he was charged with breaches of s.7 of the Banking Act and s.81(1) of the Crimes Act. It is convenient to mention now that, in the course of his records of interview, he maintained the position, which became the foundation of his defence at the trial, that it was always his belief that because he received money from the investors as banker, he was entitled to use it as he saw fit, including investing it in the Flinders Island project (although he acknowledged that, as banker, he or Eagle Bank remained liable to repay the capital and pay the agreed interest). He also claimed in the records of interview that he always intended to repay the investments from the development of the Flinders Island project.

56. It is appropriate to mention at this point the relevant terms of the Crimes Act and the essential elements of the offence with which the applicant was charged under it. Section 81(1) relevantly provides that "a person who by any deception dishonestly obtains property belonging to another, with the intention of permanently depriving the other of it, is guilty of an indictable offence...". Section 81(3) essentially incorporates into s.81, the provisions of s.73(12) and (13) which are in the following terms:

"(12) A person appropriating property belonging to another without meaning the other permanently to lose the thing itself is nevertheless to be regarded as having the intention of permanently depriving the other of it if his intention is to treat the thing as his own to dispose of regardless of the other's rights; ... (13) Without prejudice to the generality of sub-section (12) where a person, having possession or control (lawfully or not) of property belonging to another, parts with the property under a condition as to its return which he may not be able to perform, this (if done for purposes of his own and without the other's authority) amounts to treating the property as his own to dispose of regardless of the other's rights."

Thus, as his Honour told the jury, for the purposes of counts 2 to 48, the offence of obtaining property by deception comprised five essential elements:

(c) The use of deceit by the applicant in obtaining the property;

(d) The intention by the applicant permanently to deprive the owner of the property; and

66. I now turn to consider the applicant's submissions in support of the grounds of his application for leave to appeal. Grounds 1 and 2 can be conveniently dealt with together. The applicant's essential case on appeal under cover of these grounds was that his Honour did not sufficiently explain to the jury the fourth element of the offence, namely, the intention permanently to deprive the victims of the property. Moreover, it was said, the judge failed in his charge to relate the law concerning the elements of the offence, particularly the elements of intention and dishonesty, to the evidence and the issues in the case and he failed sufficiently to explain to the jury the applicant's defence. Consequently, it was claimed, the applicant was denied a fair trial and the verdicts of guilty must therefore be set aside.

69. It is clear enough that, given that the applicant was unrepresented and that the case involved matters of some complexity, his Honour was under an obligation to instruct the jury fully as to the relevant elements of the offence and to relate the law to the evidence and the issues in the case including the applicant's defence. Failure to do so would result in the applicant having been denied a fair trial and necessitate the quashing of the verdicts. See, for example, Alford v. Magee[1]; R v. Lawrence[2], cited with approval in Holland v. The Queen[3]; RPS v. The Queen[4]; R v. Anderson[5]; R v. Franks (No.1)[6]; R v. Crockett[7]. On the other hand, it must be borne in mind that the judge's charge did not have to be a general treatise on the law. His Honour was only required to explain so much of the law relating to the elements of the offence as was necessary to give the jury sufficient guidance to enable them to resolve the issues in the case - see, for example, Alford v. Magee[8]; Melbourne v. The Queen[9]; Zoneff v. The Queen[10]; Pope v. R.[11]

73. The real question, therefore, is whether, looking at the charge as a whole, the jury were sufficiently directed on the elements of the offence relating to intention and whether his Honour sufficiently put the applicant's defence to the jury and whether he related the law to the evidence and the issues to which I have referred. Before analysing his Honour's charge, it should be noted that, although the applicant did not give evidence, it seems plain enough that, as I have already mentioned, his principal defence at the trial was based on what he told the police in his two records of interview concerning his belief that he received funds as banker and that he intended to repay them from the Flinders Island project. The Crown, on the other hand, claimed that this was nonsense and that the jury should not accept this explanation. It argued that, not only was there no real prospect on the evidence of the project being successful so as to enable the applicant to refund the investments, but also, given the use to which the applicant put the investors' money, they should be satisfied that he treated it as his own without regard to the owners' rights and effectively appropriated it for his own use and thus, intended at all relevant times permanently to deprive them of their property for the purposes of s.81(1) of the Crimes Act.

77. I now turn to consider briefly what his Honour said in his charge in relation to the elements of the offence under s.81(1) of the Crimes Act and, in particular, what was said concerning the elements of intention and dishonesty and about the other matters in respect of which the applicant complains. At the outset of his charge, the judge emphasised with some care and on a number of occasions that, in relation to the elements of the offence with which the applicant was charged, the onus was on the Crown to establish them and that it was required to do so beyond reasonable doubt. He then carefully explained to the jury the five elements of the offence, to which I have already referred, and told them that there was no issue in respect of the first two elements because it was common ground that the applicant received or obtained the cheques and the money in question from the investors and that they constituted "property" for the purposes of the Crimes Act. His Honour then explained with some particularity what constitutes "deception" for the purposes of the third element of the offence. In that context, the jury's attention was drawn to the fact that the alleged deception was effectively particularised in each count on the presentment which they had before them. By way of example, the judge took the jury through the terms of count 2 and explained that the thrust of the Crown's case on that issue was that the deception was perpetrated by the applicant by his conduct in relation to the victims rather than by any particular oral communication with them. His Honour noted that it would be sufficient for the purpose of the third element of the offence if the Crown established any one of the alleged false representations contained in the presentment. The learned judge emphasised, however, that it was important that the jury should look carefully at each count and its set of particulars and stressed that the Crown had to establish that the lie or deception was believed by the victim and that the victim passed over the cheque or the money to the applicant as a result of the deception.

80. As to the requirement of dishonesty, his Honour essentially explained that it really meant that the Crown had to establish that the property was obtained by the applicant in circumstances where he had no legal right to it and knew or believed that he had no right to appropriate it to his own use. The judge further said that if the jury were satisfied that the applicant had obtained the property by deception, they should not have much difficulty in also concluding that the cheques and the money were obtained by him dishonestly.

83. When he first dealt in his charge with the fourth element of the offence, namely the intention permanently to deprive the victims of the property, the judge simply said: " ... this is not really an issue here". Shortly before the luncheon of the day on which his Honour commenced his charge, however, the jury asked the judge to explain "why [the question] of intention to permanently deprive is not an issue in this case?" It seems clear enough from his Honour's discussion with the parties about his proposed answer to that question that his observation to the jury that the fourth element was not an issue in the trial was made on a wrong premise. Nevertheless, after some discussions and a helpful submission from the prosecutor, his Honour effectively redirected the jury on that issue. He told them essentially that the question whether the applicant had the requisite intent was in fact an issue before them and that they should disregard his earlier "off the cuff" statement to the contrary. His Honour then explained the meaning and contents of the fourth element of the offence and he did so essentially by reference to the terms of s.73(12) and (13) of the Crimes Act (copies of which were later provided to the jury at their request). His Honour also told them of the applicant's defence.

86. It should be borne in mind that the evidence before the jury was quite extensive and there were 47 relevant counts which had to be addressed, so that his Honour had to cope with the practical difficulty of attempting to summarise this evidence in a meaningful way and to put it in the context of the issues at the trial, including the applicant's defence. It is appropriate to note that it is apparent from the transcript that the trial judge and the prosecutor were conscious of the fact that the applicant was unrepresented and that the case was not without its complexities, some of which were brought about by the applicant being unrepresented and his broad brush defence and that, in the circumstances, it was imperative that the jury were given full instructions on the matters to which I have referred earlier.

89. Before he dealt with the evidence relating to each count, the judge gave the jury an overview of the evidence in so far as it related to the financial and other transactions in which the applicant participated in respect of the investors and the Flinders Island development. The judge pointed out, as was the case, that there was not much dispute between the parties about most of the transactions. His Honour observed, for example, that there was no dispute as to the circumstances in which the money was received by the applicant from the investors or how it was used by him thereafter. To a large extent, said his Honour, the many documents in the case spoke for themselves and evidenced the transactions. The judge then took the jury through the documents and the evidence that related to the development of the Flinders Island project, including the evidence of Ms Peek, the administrative officer of Flinders Island Shire Council who spoke of the council's involvement in the applicant's project and of the lack of any real progress in its development, notwithstanding the planning and other permits that he had obtained in relation to it and his elaborate proposals for the resort. He also referred the jury to her evidence about the problems the project encountered with lapsed permits, difficulties with the local water supply and the contravention notices that were issued by the council in respect of some of the buildings on the site. His Honour also summarised to the jury the evidence of the valuer, Mr McQueen, whose opinion was that the project had little value given the remoteness of the site, its poor soils and lack of outstanding natural features. His Honour also reminded the jury that Mr McQueen valued the development in its unfinished state at $245,000, notwithstanding that the estimated cost of the works that had been carried out was over $375,000.

92. Similarly, in the context of dealing with count 1, and, in particular, whether the applicant carried on a banking business in Australia during the relevant period without authority, his Honour directed the jury to the evidence that showed that Eagle Bank had no authority to use the word "bank" in its name and that neither the applicant nor Eagle Bank had authority to conduct banking business in Australia. His Honour also summarised the evidence relevant to whether the applicant knew he was conducting a banking business without authority.

95. The judge then referred to the relevant parts of the applicant's records of interview in which he maintained the position which became his defence at the trial and to which reference has been made earlier. In the end, he summarised, with some care, over 600 or so pages of transcript, the evidence relating to each count which charged the applicant with breach of s.81(1) of the Crimes Act. Furthermore, shortly before the jury retired to consider their verdict, the judge again reminded them of the substance of the Crown case and that of the applicant.

98. Not long after the jury retired to consider their verdict, they asked his Honour whether repayment (by the applicant) of any deposit to the investors would negate any intention he might have had permanently to deprive the victims of their money. After discussing his proposed answer to this question with the parties, his Honour effectively explained to the jury (in the context of sub-ss.(12) and (13)) that the question whether there was a relevant intention was to be determined at the time of the appropriation so that any subsequent repayment of the deposit would not negate any relevant intention that the applicant may have had at the time he received it from the investors.

101. A little later the prosecutor raised with his Honour his concern that sub-s.13 may have no relevance to the case and, after considering the matter in context of discussions with the prosecutor, his Honour directed the jury to disregard sub-s.(13) because it was not "appropriate" to the situation before them. He told them to "focus" only on sub-s.(12) and decide whether, at the relevant time, the applicant had the requisite intent to treat the relevant property as his own regardless of the rights of the investors. In order to make that decision, said his Honour, they should examine all of the evidence and consider all the circumstances, including what the applicant claimed he did with the money and the use to which he in fact put it.

105. I now turn to consider whether the applicant's criticisms of his Honour's charge have been made out. First, in my view, notwithstanding his Honour's initial error as to whether the element of intent was an issue for the purposes of the trial, he sufficiently identified for the jury all the critical issues that were required to be resolved on the evidence before them, namely, whether the applicant obtained the funds by deception; whether they were so obtained by him with the intention to permanently deprive the investors of those funds, or, put another way, with the intent to treat the property as his own regardless of the owners' rights in relation to them; and whether he had obtained the funds dishonestly, and he did so in the context where it had been clearly explained to the jury that the Crown had the obligation to establish those matters beyond reasonable doubt.

108. It is also apparent that the jury were sufficiently directed as to the contents of the Crown case and that of the applicant. It was in that context that his Honour provided the jury with a helpful summary of the evidence and, in those circumstances, in my view, it cannot be said that there was a failure by the judge to relate the evidence to the issues before them.

111. In my opinion, there is no real likelihood that the jury were confused by his Honour's change of instructions as to whether the issue of intent was extant, given that the redirection was in clear terms and was made shortly after his Honour's error, and given that the jury were obviously attentive to his Honour's directions and gave due consideration to the matters before them as is evidenced by the clarifications they sought through their questions and by their decision not to convict the applicant on count 44.

114. I also cannot accept the claim made on behalf of the applicant that the judge did not sufficiently explain what the applicant said in his record of interview which effectively constituted his defence at the trial. It is true that, as Mr Thomas for the applicant submitted, the judge did not take the jury to the specific questions and answers in his records of interview to remind them of what he then said by way of defence to his position, but, in my opinion, it is abundantly clear that the essence of what the applicant relevantly said in his records of interview was sufficiently conveyed by his Honour to the jury.

117. Similarly, I would reject counsel's submission that his Honour did not sufficiently draw the attention of the jury to the evidence, particularly that of Ms Peek, as to the applicant's various activities that were directed towards developing the Flinders Island project and to its increase in value since 1991. It was counsel's contention that this evidence was supportive of the applicant's claim that he intended to repay the funds in question through that project and this fact should have been drawn to the jury's attention. In my view, however, it is quite apparent from what I have already said that the judge sufficiently summarised the evidence of Ms Peek and the other material pertaining to the applicant's project. It is true that his Honour did not in terms say that this evidence supported the applicant's stated intention to repay the investors from this development, but such an inference would have been difficult to draw from the totality of the evidence relating to the Flinders Island project which showed, inter alia, that the "development" had barely progressed in relevant terms, was overcapitalised and that there was no realistic prospect of the project generating, through its sale or otherwise, sufficient funds in the foreseeable future to pay out the investors.

120. Mr Thomas, nevertheless, contended that the very fact that the jury asked his Honour whether the repayment of the deposit would negate any intention that the applicant may have had to permanently deprive the victims of it, showed that they considered it relevant whether the applicant intended to pay the investments out of the Flinders Island project. Thus, it was said, when answering this question his Honour should have highlighted to the jury the evidence which showed that he had taken a number of steps, such as obtaining permits and engaging a builder, to develop the proposed resort, all of which were consistent with his stated intention to repay investors through that asset. But, as I have already indicated, in my view, his Honour did draw the jury's attention to the evidence concerning the Flinders Island development including the above matters. In my opinion, the question asked by the jury did not call for a repetition of this summary of the evidence or for the observation by the judge that it could be regarded as supportive of the applicant's case on this issue.

123. It was also submitted by counsel that, in answering the jury's question, it was inappropriate and prejudicial to the applicant for his Honour to have used the example of a person stealing $10, gambling with it, and then using the winnings to repay the stolen money. Mr Thomas argued that the example was not only logically inappropriate because it had no sensible analogy with the facts of the case or the issues raised by the jury's question, but it was materially prejudicial to the applicant. In my view, however, although it may be accepted that the example chosen by his Honour was inappropriate for a number of reasons, given the context in which it was used, there was no sensible risk that it would be productive of a mis-trial.

126. It was also claimed by counsel that when his Honour told the jury to disregard the provisions of sub-s.(13), he should have at the same time emphasised to them that, before they could find that the applicant had the requisite intent and that he had obtained the funds dishonestly, they had to be satisfied beyond reasonable doubt that, contrary to his assertions, the applicant did not intend to repay the investments in the manner claimed by him, namely, from the "proceeds" of the Flinders Island development. In my opinion, however, neither his Honour's effective withdrawal of sub-s.(13) from the jury's considerations, nor any other aspect of the trial, necessarily called for such a direction from his Honour. The judge had already instructed the jury, in sufficient terms, as to the onus and standard of proof in relation to all the elements of the offence. He had also pointed out to them the applicant's defence and it was not essential to a fair trial that his Honour should repeat in terms this aspect of his charge with an emphasis, as Mr Thomas would have it, that the Crown had to establish the negative, namely, that the applicant did not hold the intention to repay the investments out of the Flinders Island development. It seems to me that, in any event, it must follow from his Honour's charge to which I have referred that before the jury could be satisfied that the applicant had engaged in deceit or had obtained money dishonestly or had the requisite intent at the relevant time, the jury would have to be satisfied beyond reasonable doubt that the applicant did not believe that he could or would repay the investments out of the tourist project.

129. Thus, in my view, the applicant's claim that his Honour's charge was deficient as contended for must fail. But even if I am wrong in that conclusion and his Honour should have directed the jury as Mr Thomas has claimed, no substantial miscarriage of justice for the purposes of the proviso to s.568 of the Crimes Act arose by reason of his Honour's failure to do so. The applicant was not thereby deprived of a fair chance of acquittal. The Crown case against him was overwhelming. To put the matter briefly, even if the jury had been directed as Mr Thomas contends, it is difficult to see how a reasonable jury could have concluded otherwise than that they were satisfied beyond reasonable doubt that the applicant deceived the investors into parting with their cheques and money and that he did so dishonestly and with the intention of permanently depriving them of their property .

132. For these reasons, I am of the opinion that grounds 1 and 2 must fail.

135. I am also of the view that there is nothing in ground 3 under cover of which it was argued that count 1 was bad for duplicity. This submission was based on the premise that "banking business" in s.7 of the Banking Act had different meanings during the period covered by that count. A definition of that term was inserted into the Banking Act by the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 and came into effect on 1 July 1998. It was said for the applicant that this meaning of "banking business" differed from that which had been ascribed to it prior to the introduction of the statutory definition. In my view, however, this claim is

without foundation. The statutory definition of "banking business" for the purposes of the Banking Act merely re- states the meaning which the courts had earlier given to it - see PP Consultants Pty Ltd v. Finance Sector Union of Australia[12]. That case effectively applied the well-known dictum of Isaacs, J. in Commissioners of the State Savings Bank of Victoria v. Permewan Wright & Co Ltd[13] as to what constitutes the essential function of a bank[14].

139. Thus, in my view, the application should be dismissed

151. The formal order of the Court is that the application for leave to appeal against conviction is dismissed.

[1] [1952] HCA 3; (1951) 85 C.L.R. 437 at 466 per Dixon, Williams, Webb, Fullagar and Kitto, JJ.

[2] [1892] A.C. 510 at 519 per Lord Hailsham of St. Marylebone.

[3] (1993) 67 A.L.J.R. 946 at 951-952 per Mason, C.J., Brennan, Deane and Toohey, JJ.

[4] [2000] HCA 3; (2000) 199 C.L.R. 620 at 637 per Gaudron, A.C.J., Gummow, Kirby and Hayne, JJ.

[5] [1996] VICSC 17; [1996] 2 V.R. 663 at 666-668 per Winneke, P.

[6] [1998] VSCA 110 at [17], [25] per Winneke, P.

[7] [2001] VSCA 95 at [9] per Ormiston, J.A. And [12] per Winneke, P.

[9] [1999] HCA 32; (1999) 198 C.L.R. 1 at 53 per Hayne, J.

[10] (2000) 200 C.L.R. 234 at 256 per Kirby, J.

[11] [2000] VSCA 108; (2000) 112 A.Crim.R. 588 at 592 per Callaway, J.A.

[12] [2000] HCA 59; (2000) 201 C.L.R. 648 at 655-656 per Gleeson, C.J., Gaudron, McHugh and Gummow, JJ.

[13] [1914] HCA 83; (1914) 19 C.L.R. 457 at 470-471.

[14] See also First Chicago Australia Ltd v. Yango Pastoral Co Pty Ltd [No.2] [1977] 2 N.S.W.L.R. at 187-188 per Sheppard, J.