R v Mackrae-Bathory [2006] VSCA 179

CRIMINAL LAW - Sentencing - Dishonestly causing a loss to the Commonwealth in the sum of $10,574.91 - Sentence of nine months' imprisonment with a minimum custodial period of three months' imprisonment confirmed.

1 The applicant, Zachary Aaron Mackrae-Bathory, was arraigned before the County Court of Victoria at Melbourne on an indictment preferring four counts that contrary to s.135.1(5) of the Criminal Code Act 1995 (Cth) ("the Criminal Code") he did between February 2002 and March 2003 dishonestly cause a loss to a Commonwealth entity, namely, the Department of Family and Community Services, totalling $27,319.78.[1] His wife and co-accused, Doan Phuong Trang Nguyen ("Nguyen"), was arraigned with him on two counts of aiding and abetting. Following a trial that occupied 35 sitting days, on 22 January 2006 the jury convicted the applicant of Count 1: causing a loss of $10,574.91, and Count 2: causing a loss of $16,744.87, but found him not guilty of Counts 3 and 4. The applicant had no prior convictions and, after hearing a plea in mitigation of sentence on 3 March 2006, on 10 March 2006 the judge sentenced the applicant on each of Counts 1 and 2 to a term of imprisonment of nine months,[2] thus producing a total effective sentence of nine months, and ordered, pursuant to s.20(1)(b) of the Crimes Act 1914 (Cth), that the applicant be released after serving a period of three months of the sentence. His Honour also made reparation orders in favour of the Commonwealth. By notice dated 14 March 2006 the applicant seeks leave to appeal against his conviction on both counts.

2 In brief substance, the circumstances leading to the prosecution of the applicant and, in particular, those relating to Counts 1 and 2 were as follows.

The facts

3 The applicant commenced employment at Centrelink in 1992 and was transferred to its Richmond branch as a customer service operator in June 1999. His duties included the assessment of applications for social security payments and granting such applications as complied with Centrelink guidelines. By 1999, he had become a very experienced senior claims officer.

4 At relevant times, the Centrelink system for recording each client's claim for benefits and the payment of benefits to the client comprised a hard copy paper file as well as a computerised record. In the scheme of things, the paper file was intended to contain original claim forms, supporting documents, photocopies of supporting documents and other relevant material. In this case, however, the paper files relating to the impugned payments could not be found after the applicant left the employ of Centrelink in circumstances later to be described. The computerised record contained personal information, including names, addresses, basic claim information and details of payments and actions in respect of the claim, and payments to claimants were generated by that means principally through the computerised Centrelink system by authorised Centrelink staff. For that purpose each authorised staff member was allocated a unique "log-on" identification, and a personally set password that had to be entered on each occasion that the staff member sought access to the system.

Count 1 evidence

5 The applicant first met Nguyen in Vietnam in 1999 and saw her from time to time there. On 21 March 2001, the couple were married in Vietnam. She was also known as Trang Nguyen and her date of birth was 4 August 1982. On 29 November 2002, Nguyen was granted permanent residence in Australia and, according to the information that she provided for immigration purposes in July 2003, her home address at that time was the same as that of the applicant, namely, 13/150 Alma Road, St Kilda East. The records kept at Centrelink showed that, from 10 June 1999, the applicant's postal address was PO Box 167, East Melbourne and that, from 1 May 2001, his permanent address was 13/150 Alma Road, St Kilda East.

6 On 31 October 2001 the applicant created a computer record in the name of Trang Nguyen ("Trang") and, as was later discovered, issued her with a Health Care Card. In his evidence he said that he did so because she claimed that she required the card to qualify for an intensive course in English for immigrants. He recorded her date of birth as 4 August 1982 but listed her place of residence as being the non-existent address of 202 Gipps Street, Collingwood. In his evidence he said that he did so in order to avoid attracting attention to the fact that he and Nguyen shared a common address. His fear, he said, was that the common address would alert Centrelink officers to the fact that he and Nguyen were married and therefore to the fact that he was acting in breach of Centrelink policy that its officers not be involved in processing claims of family or friends.

7 On 27 April 2002, the applicant accessed the Centrelink computer record of Trang and changed the particulars relating to her name and date of birth to Dieu Trang Nguyen ("Dieu") and 8 April 1982, respectively. It was the Crown's case that Dieu was a fictitious identity. Evidence was given that the Victorian Registry of Births, Deaths and Marriages could find no record of a birth certificate or change of name relating to Trang or Dieu. Searches of VicRoads, Health Insurance Commission, Australian Electoral Commission and Department of Immigration, Multi-Cultural and Indigenous Affairs data also failed to locate any record for Dieu. Even the applicant said in his evidence that he was unable any longer to locate her.

8 On 28 May 2002 the applicant granted Dieu an entitlement to Youth Allowance and payments commenced. The first payment was issued by cheque and mailed to PO Box 167, East Melbourne, which was the applicant's postal address as recorded in the Centrelink records.

9 From 1 July 2002, payments of Youth Allowance to Dieu were credited to Account No. 116941774 at the 303 Collins Street Branch of the Bendigo Bank which was held in the name of Nguyen (as Trang Nguyen). The Crown case was that the account was controlled by Nguyen. Thereafter, until about March 2003, the only source of deposits into that account was the Youth Allowance paid to Dieu. Most of the deposits were withdrawn within a few days and on several occasions the withdrawal occurred on the same day as the deposit. The relevant records of the Bendigo Bank show that Nguyen (in the name of Trang Nguyen) made 11 ATM withdrawals from the above account between June and November 2002.

10 The applicant was injured in a motorcycle accident on 20 March 2003 and consequently was absent from work for some time. During his absence he did not have access to the Centrelink computer system. In that period, payment of benefits to Dieu was stopped in accordance with Centrelink's ordinary procedures. Despite the cessation of payments, however, there was no record of Dieu making any contact with Centrelink as to why her payments had ceased.

11 The total amount paid by Centrelink to Dieu from 27 April to 18 March 2003 was $10,574.91.

Count 2 evidence

12 On 22 February 2002, the applicant created a Centrelink computer record in the name of Thi Trang Nguyen ("Thi"), wherein the date of birth was shown as 1 August 1981. Later the same day, he caused Thi's identity in the computer records to be changed to "T. Trang Nguyen ("T.Trang"). He then granted her a Youth Allowance.

13 The first payments to T. Tran Nguyen were issued in late February 2002 and included benefits backdated to 26 November 2001. The applicant told the jury that T. Trang was his wife and that he believed that she was entitled to the payments. He said that the payments were backdated to the date of lodgement of the application for benefits in accordance with what he believed to be her entitlement.

14 The Crown's case was that T. Trang was a fictitious identity, just like Dieu, and it was contended that the applicant had accessed the Centrelink computer system on a number of occasions between 22 February 2002 and 18 February 2003 in order to create the appearance that the transactions were genuine; recording, amongst other matters, that he had processed review forms and assisted T. Trang with general enquiries in relation to social service benefits.

15 The payments to T. Trang were first mailed to PO Box 214, Richmond. The records of RMIT showed that to be the postal address of Nguyen (in the name of Doan Phuong Trang Nguyen). Thereafter, the payments were credited to account No. 10291353 at the Hawthorn Branch of the Commonwealth Bank, in the name of Trang Nguyen. The postal address for that account in the records of the bank was PO Box 214, Richmond. The account was opened by Doan Phuong Trang Nguyen on 30 January 2002. Apart from a cash deposit of $100, the only deposits to the account were the Centrelink payments. Each payment was withdrawn shortly after deposit, generally through an ATM.

16 On 22 July 2003 Australian Federal Police officers executed a search warrant at the applicant's residential address at 13/150 Alma Road, St Kilda East. They located numerous Centrelink hard copy documents and customer records in the name of Dieu and T. Trang. The dates on those documents indicated that many of them were issued by Centrelink some time after the applicant's last working day at the Richmond office in March 2003. In his record of interview, the applicant said that the "post-dated" Centrelink documentation found at his premises belonged to him but that he did not know why that sort of documentation would be in his possession. The applicant was then arrested and charged.

17 The total amount paid by Centrelink to Thi from 22 February 2002 to 29 March 2003 was $16,744.87.

Overview of applicant's case

18 A significant part of the applicant's case [3] was that it was his general practice to make payments available to a claimant as quickly as possible after he had concluded that the claimant was entitled to benefits and, for that reason, he often disregarded Centrelink policies and criteria for payment which he considered to be unrealistic, bureaucratic and inconsistent with the law as he understood it. Thus, he said, when he was satisfied that a person was legally entitled to a benefit, but the computer system would not allow him to give effect to his decision to process the payments, he would simply put into the computer such information as he deemed appropriate to enable the payment to be effected.

19 It was also said that, in order to assist his "clients", the applicant was in the habit of disregarding Centrelink policy on document security and, on occasions, taking relevant hard copy files to his home. He had followed those practices in connection with the payments which were the subject of Counts 1 and 2.

Applicant's defence to Count 1

20 The applicant's defence to Count 1 was that when he provided his wife with a Health Care Card in the circumstances already mentioned, he did so knowing that his actions contravened Centrelink rules - that is, knowing that it was "totally wrong to do that" - and it was for that reason that he used the name "Trang Nguyen" instead of his wife's name. Similarly, it was said he entered the non-existent address of 202 Gipps Street, Collingwood as Trang Nguyen's residential address in order to hide the fact that the client was living with him, and thereby to avoid the risk of it being discovered that he had provided a Health Care Card to his wife. As defence counsel put it to the jury in the course of final address, the applicant created "a file for his own wife and issued her with a Health Care Card to which she might or might not have been entitled, and if that had been discovered he would probably have been sacked."

21 As the story went then, a few days after creating the file the applicant advised Nguyen to make a claim for social security benefits because he thought she was entitled to them. He based that belief, he said, on the fact that he was no longer supporting her. He told her to lodge her claim at Centrelink's Windsor office. A short while later, however, a social worker passed Dieu's application for social security benefits to the applicant for processing. At about that time, the applicant said, it dawned on him that, because his wife was receiving social service benefits (or at least because he then believed she was receiving benefits), a file must have been created for his wife at the Windsor office, and therefore that there must now be two files for his wife - the original file which he created at the Richmond office for the purposes of issuing the Health Care Card, and a later one which he assumed would have been established at the Windsor office for the purpose of making payments to her. As the defence then went, the applicant became concerned about that state of affairs because it was contrary to Centrelink policy to have more than one file per claimant, and so, in order to ensure that it was not revealed that he had created a file for his wife, he effectively converted his wife's original file at the Richmond office into one for Dieu: by changing the name to Dieu and the date of birth, while leaving the fictitious address of 202 Gipps Street, Collingwood as if it were now Dieu's address. So far as he was concerned, he said, payments were then duly made to Dieu.

22 It was then said that some time later the applicant discovered that Nguyen's claim form had not been processed at the Windsor office and, therefore, that she had not been receiving any social security benefits. Consequently, he took it upon himself to create a new computer file for Nguyen at the Windsor office; albeit, according to him, that in so doing he incorrectly recorded her as Thi Trang Nguyen.[4] He said that when he then realised that he had mistakenly put the word "Thi" into the computer, he sought to delete it, but the computer program would not permit him to do so. All that he could delete, he said, were the letters "hi" leaving the whole name as "T. Trang Nguyen."

23 Thus, in summary, the applicant's case in respect of Count 1 was that Dieu was a real person who received the Youth Allowance in accordance with the computer file created by him (as a substitute for that which originally he created in the name of Trang Nguyen for the purpose of issuing a Health Care Card to his wife).

Applicant's case on Count 2

24 The applicant's case in respect of Count 2 was that he believed that Nguyen was lawfully entitled to receive special benefits at Youth Allowance rates and that the computer file he created for authorising social security payments to T. Trang was really to authorise payment of special benefits at Youth Allowance rates to Nguyen in accordance with what he believed to be her entitlement.

25 The applicant conceded that the computer file showed that T. Trang was being paid Youth Allowance - as opposed to special benefits - and he conceded that Nguyen was not entitled to Youth Allowance, as such. But he said that the reason the computer showed Youth Allowance, rather than special benefits at Youth Allowance rates, was because the computer was incapable of accommodating a full description of the payments. He claimed that the true nature of the payments was recorded in the hard copy file, which he contended was the only way in which it was capable of being done, albeit that the alleged hard copy file could not be found.

26 The applicant said that he believed Nguyen satisfied both the legislative criteria for special benefits and also the Centrelink requirements for special benefits, of which the most relevant for present purposes was hardship. It was his belief, he said, that Nguyen was experiencing hardship because she had no assets of her own and because, as a result of their strained relationship, he was in effect no longer supporting her.

27 In the end, the applicant went to the jury on Count 2 on the basis that the real issue for resolution was whether the Crown had proved beyond reasonable doubt that he did not believe that Nguyen was "in a situation of financial hardship, defined to mean absence of assets which can be realised, [and] absence of income or financial support" and his evidence in that regard was that he "never financially supported her".

Grounds of appeal

28 We turn now to the grounds of appeal. It is convenient to deal first with Grounds 1, 2, 4 and 5, which bear on both Count 1 and Count 2, and then with Ground 3, which bears on Count 2 alone.

Ground 1 - dishonesty

29 Under cover of Ground 1, it was contended that the judge erred by failing to explain to the jury adequately the concept of "dishonesty" as that term is used in s.135.1(5) of the Criminal Code Act 1995.

30 So far as is relevant, s.131.1(5) is in the following terms:

"(5) A person is guilty of an offence if:

(a) the person dishonestly causes a loss, or dishonestly causes a risk of loss, to another person; and

(b) the first-mentioned person knows or believes that the loss will occur or that there is a substantial risk of the loss occurring; and

(c) the other person is a Commonwealth entity."

Section 130.3 of the Criminal Code relevantly defines "dishonesty" to mean:

"(a) dishonest according to the standards of ordinary people; and

(b) known by the defendant to be dishonest according to the standards of ordinary people."

Section 130.4 stipulates that "[i]n a prosecution for an offence against this Chapter, the determination of dishonesty is a matter for the trier of fact."

31 Counsel for the applicant submitted that, although the trial judge referred the jury to the relevant sections of the Criminal Code, his Honour failed to provide clear directions as to what the Crown had to establish in order to make out that the applicant had acted dishonestly within the meaning of those sections. The essence of the complaint was that the judge only summarised each of the sections for the jury and that the judge should have "quoted" the sections to them or at least "quoted" s.130.3 of the Criminal Code.

32 In our view, there is no merit in that complaint. The judge was not required to "quote" the terms of the provisions. It was sufficient, and indeed in our view it was preferable, for his Honour to summarise the essential requirements and meaning of the provisions, as his Honour did.

33 The judge was of course also required to explain that the burden was on the Crown to establish that the applicant, by his conduct, dishonestly caused a loss to the Commonwealth, and that the applicant knew or believed that the loss would occur. It was incumbent on the judge too to explain what it was that constituted dishonesty for the purposes of the offence in the circumstances of the case. But in our view his Honour did just that**;** indeed several times.

34 To begin with, his Honour told the jury that they could not find the applicant guilty unless they were satisfied that he caused the payments to be made by Centrelink to fictitious identities and that at the relevant time he knew or believed that what he was doing would result in loss to the Commonwealth and that what he was doing was dishonest**.** A little later, following an exception, his Honour told the jury that, in order to satisfy the requirement that the applicant "dishonestly" caused the loss to the Commonwealth, the Crown had to establish that the applicant's impugned conduct was dishonest by the standards of ordinary people and that the applicant was aware at the relevant time that the conduct was dishonest according to the standards of ordinary people. Later, his Honour repeated that formulation.

35 It was next argued under cover of ground 1 that the judge erred in preventing defence counsel from tendering a copy of the legislation and thereby wrongfully depriving the applicant of the opportunity to demonstrate that there was legitimate support for the reasonableness of his alleged belief as to Nguyen's entitlement.

36 We do not consider that there is a great deal of merit in that argument either. It is true that his Honour said at one point early in the trial that he did not think it permissible for defence counsel to tender the legislation. But the judge allowed the applicant to state in evidence what he said he believed to be the effect of the legislation and, as Mr Pirrie for the respondent pointed out, no ruling as to proof of the legislation was then, or later, sought or made. The matter was left on the basis that counsel for the applicant could come back to it and raise it with the judge again when and if he wished to do so. He never did.

37 In the circumstances, we would not uphold ground 1.

Ground 2 - evidence of good character

38 Under cover of ground 2, it was submitted that because dishonesty was an element of the offence, as to which credibility was critical, and, given that the applicant led evidence of his good character, the judge should have directed the jury that they were required to have regard to the evidence concerning the applicant's good character when assessing the applicant's credibility. We do not find that argument persuasive. Evidence of good character may in some cases be so important as to demand the sort of direction which the applicant has in view. But that is usually where the evidence of good character is led from witnesses other than the accused. In such a case, a trial judge might need to direct the jury as to how they may use the evidence in their deliberations.[5] But, even then, the question whether a direction about the applicant's good character should be given and the form which it should take is largely one for the judge alone.[6] Where the only evidence of good character is given by the accused himself, it is less likely that there will be any need for direction as to how that evidence might be used in assessing the accused's credibility as a witness. The process is really self evident.

39 Here, his Honour explained to the jury that evidence of good character was led in disproof of guilt and that it bore directly on the probability of the accused having committed the crime with which he was charged. The jury were then told that such evidence had the potential to raise a presumption that the accused was incapable of committing the crime. In our view, such a direction was favourable to the applicant, and certainly sufficient. In any event, no exception was taken on the point and we think that it is significant that the applicant's experienced trial counsel did not think it important.

40 Under cover of ground 2, it was also claimed that the judge erred by failing to give the jury a propensity direction along the lines that, because the applicant admitted in evidence to discreditable sexual conduct with two of his Centrelink clients, they were not to reason that he was the kind of person likely to commit the crimes of dishonesty with which he was charged.

41 We do not accept that submission. The evidence of discreditable sexual conduct was given by the applicant himself. In the course of his evidence in chief he said that he had had a sexual relationship with two Vietnamese women who were his "clients" at Centrelink. They were considerably younger than he was and arguably vulnerable and so, depending upon one's point of view, that evidence demonstrated a degree of sexual and professional immorality. But, even allowing that was so, there is no logical connection between propensity to take sexual advantage of vulnerable young women and propensity to steal. In the context of this case, we think there is no real risk that the jury might have reasoned from the applicant's disposition to engage in acts of sexual impropriety with his "clients" to the conclusion that the applicant was the sort of man who would commit the offences with which he was charged. In the circumstances, in our view, there was no need to warn the jury against the risks of making such a connection.[7]

42 It may be that the revelation of the applicant's sexual indiscretions was enough to create some prejudice in the minds of the jury. But the judge warned the jury that they were not to allow themselves to be affected by prejudice or sympathy or any other such emotion and that they were to decide the issues dispassionately and impartially on the basis only of the evidence which was placed before them.[8] In our view, the judge was not required to do anything more than that, if indeed there was anything more effective which could have been done.

43 We add for the sake of completeness, however, that it might have been different if there were evidence of offences of a similar nature to that with which the applicant was charged. In that event, it most probably would have been necessary for the judge to give a propensity direction of the Best[9] and TJB[10] kind. The circumstances in which such a direction needs be given are comprehensively essayed in the judgment of Callaway, J.A. in R. v. DCC.[11] But, plainly, this was not such a case.

44 The applicant further complained under cover of Ground 2 that the judge erred by failing to give the jury a direction as to the need to avoid using evidence admitted in support of one count as evidence which supported another count.

45 We reject that claim. The Crown did not contend that evidence on one count could be relied upon as supporting another. And his Honour gave the jury a conventional direction that each count must be considered separately in light of the evidence which applied to it and that they had to ask themselves, as to each count separately, whether they were satisfied beyond reasonable doubt by the evidence applicable to that count that the applicant was guilty of the particular offence. No exception was taken on the point and in our view none was justified.

46 In the result, Ground 2 fails.

Ground 4 - failure to relate the facts to the law

47 Under cover of ground 4, the applicant's counsel submitted that the judge erred in three respects:

• First, by failing to put the applicant's case adequately to the jury and, in particular, by summarising the applicant's case in only a little over one page of transcript after a trial lasting 35 sitting days;

• Secondly, inasmuch as the case was a circumstantial case and, therefore, required close examination of primary and secondary facts and the inferences to be drawn from them, by failing to undertake such an exercise;

• Thirdly, by failing to relate the law to the facts in the fashion explained, for example, in R. v. Yusuf.[12]

48 We reject those contentions. In our view, a fair reading of the charge makes plain that his Honour sufficiently put the applicant's case to the jury. It is apparent that the judge devoted a substantial portion of his charge to summarising the evidence of the applicant, his witnesses and the arguments put by defence counsel.

49 The judge also left the jury in no doubt that the Crown's case was a circumstantial case, and his Honour outlined to the jury the evidence to which they needed to have regard in assessing the case. As part of that process, his Honour gave the jury specific directions on the drawing of inferences and explained the technique in a fashion which related it to the issues.

50 We accept that the judge spent less time relating the law to the facts than would usually be the case after such a lengthy trial. But his Honour still spent a number of pages of the transcript upon the task, and in circumstances where the jury had been supplied with a transcript of the evidence and taken notes, after counsel had agreed with the judge that, in those circumstances, it was preferable to keep the charge as brief as possible.

51 At least so far as Count 1 is concerned, therefore, we think that what the judge did in the particular circumstances of this case was enough to comply with his Honour's duty[13] as a trial judge to assist the jury to apply the law to the facts and to tell them, in this context, what were the relevant issues in the trial.

52 We add that the applicant's experienced trial counsel took no exception on the point, and in a case like this that is significant. As Phillips and Buchanan, JJ.A. pointed out in R. v. Walsh:[14]

"Trial counsel enjoys advantages not shared by his successors and it is important to observe that counsel now advocating these grounds was not counsel at the trial and therefore cannot be alive to all the nuances at trial, any more than can we as the appellate tribunal. To some degree at least, the challenges now made impugn the conduct of counsel at trial and, as in cases where a challenge is made more directly to the conduct of counsel at trial, it seems to us that we should proceed with caution, mindful of the difficulties facing us in reconstructing what must have been a difficult and complex proceeding: see the comments made by this Court in Challoner and in Camilleri and in the High Court in Crampton." (Citations omitted)

53 Similarly, in R. v. Wright[15] the then Chief Justice and Charles, J.A. observed that failure to take exception would almost necessarily be taken by the appellate court as an indication that counsel saw no injustice or error in what was done, and in Zoneff v. The Queen[16] Kirby, J. said that:

" ... it is always important to consider the judicial directions complained about in the context of the issues that were fought at the trial, the addresses that have preceded it and the requests (if any) for redirection. There could be few developments more destructive to the character of a jury trial, as it has been conducted for centuries, than a minute and pernickety attention to the words of the judge's charge, divorced from their context and expressed purposes. Legal accuracy is demanded. But in most cases, particular verbal formulae are not. The judge is speaking to a jury. The regurgitation of a fixed form of words, read out to render the directions appeal-proof, would significantly alter the character of a jury trial. It would distort effective oral communication with the jury." (Citations omitted)

54 Count 2 raises separate considerations with which it will be more convenient to deal when we come to Ground 3. But subject to what is there said, we think that Ground 4 fails.

Ground 5 - jury deliberations

55 Much of the complaint made under cover of Ground 5 was made in the context of the argument advanced in support of Ground 4. The thrust of it was that, given the length and circumstances of the trial, there was a need for the judge to deliver an appropriate charge. For the reasons already given we consider that, at least so far as Count 1 is concerned, the judge did give an appropriate charge.

56 But there were two additional arguments advanced under cover of Ground 5. It was contended that his Honour applied undue "pressure" in the conduct of the trial by stating to counsel in the absence of the jury that unless he cut back the length of the charge, it would take several days "and we don't have several days". It was also said that his Honour put undue pressure on the jury to have them reach a verdict, most particularly by failing to give the jury a Black direction[17] after they had deliberated for approximately 13 hours.

57 We reject both arguments. As to the first, it is to our way of thinking not in the least surprising, nor questionable, that the judge should discuss with counsel the idea of limiting the length of the charge in the circumstances of this case. The idea that counsel may have been "pressured" by such a suggestion strikes us as fanciful. In the course of a trial as long and complex as this one was it is only to be expected that there should be frequent communication between bench and bar about such matters. It is one of the means by which complex litigation may be controlled and directed while ensuring that the accused receives a trial that is not unfair. And, unsurprisingly, counsel agreed with the course which the judge proposed because it made good sense in the circumstances.

58 Equally, we see no fault in the fact that the judge did not give the jury a Black direction after they had been deliberating for 13 hours. Generally speaking, such a direction should only be given when the jury has indicated that they are having difficulty in reaching a unanimous verdict.[18] The purpose of the direction is to encourage the jury to persevere with the process. The giving of such a direction is a precondition to the acceptance of a majority verdict pursuant to s.46 of the Juries Act 2000.[19] But whether a direction is appropriate is essentially a question of discretion of the trial judge; as the applicant's trial counsel rightly recognised.

59 In any event, in this case defence counsel actually submitted to the judge that his Honour should not force the jury to continue sitting because there was a prospect that they would return a verdict simply to bring the matter to an end. That submission was made after the jury had deliberated for approximately 10 hours and after the foreman had indicated that the jury were having difficulty in reaching a verdict and that there was something of an impasse amongst some jury members. Subsequent to counsel's submission, the jury was brought back to court after the jury had appointed a new foreman and he indicated to his Honour that progress was being made in the deliberations. In that context, his Honour told counsel that he was not going to give the jury a Black direction at that point in time and counsel for the applicant agreed with that course. In effect, therefore, his Honour was prepared to give a Black direction when it appeared that the jury might be deadlocked but when they showed that they were making progress he determined not to intervene, and counsel agreed with that course.

60 In the result, Ground 5 also fails.

Ground 3 - expert evidence

61 We turn last to ground 3, which relates to Count 2 alone. The applicant contends that a miscarriage of justice occurred in relation to Count 2 because of evidence, given by Renato Colaianni, that Nguyen was not entitled to special benefits, and because of the way in which the judge dealt with that evidence in the course of the charge. We accept that contention.

62 In order to establish that the applicant was guilty of Count 2, the Crown had to satisfy the jury beyond reasonable doubt that the applicant was acting dishonestly and was aware that he was acting dishonestly. In effect, therefore, the Crown needed to persuade the jury, beyond reasonable doubt, either:

a) that the recipient of the payments the subject of Count 2 was a fictitious person (as the Crown alleged); or

b) if the jury were not satisfied beyond reasonable doubt that the recipient was not Nguyen (the applicant alleged she was):

(i) that Nguyen was not as a matter of law entitled to the special benefits; and

(ii) that the applicant knew or believed that Nguyen was not entitled to special benefits.

63 Difficulties began early in the trial when the Crown set out to prove the lack of entitlement. Instead of providing a copy of the Social Security Act 1991 and tendering the relevant regulations, the Crown called Mr Colaianni, a Departmental analyst, to give this evidence in chief, as follows:

"In relation to your understanding of - if I could just speak to you generally, do you have any understanding of qualification for special benefits? --- Yes, I do.

Are you familiar with the circumstances of Ms Trang Nguyen?---Yes.

From your understanding of your knowledge of Centrelink special benefits, are there any circumstances, from your knowledge, in which Ms Trang Nguyen [the applicant's wife] would, on her entry into Australia, qualify for any Centrelink benefits? --- Special benefits basically are payment where Centrelink offers to claimants where no other payment or mainstream payment would be payable to these people, Your Honour, and special benefit is basically used as a last resort. However, in this particular case special benefit would not be applicable because of the - the fact that Ms Nguyen was a full time student. That would not qualify her for special benefit.

...

To your knowledge in the circumstances of Miss Trang Nguyen under the legislation as it then applied, will she be eligible for any special benefit, Centrelink benefit? --- No, she would not."

64 At first, defence counsel did not object to that evidence and the judge allowed it to pass without comment. But the next day it emerged that defence counsel did object and that the reason he had not taken objection sooner was because he had not understood that the witness took his answer in chief from an opinion expressed by another departmental officer. That appeared when defence counsel asked Mr Colaianni the following questions and received the following answers:

"Do you agree that what you read out yesterday of itself does not mean that visa class 309 holders can't get special benefit? --- Yes.

Thank you. So perhaps you'd be good enough to tell us where there is a legal provision which says a category 309 visa holder who is a full time student can't get special benefit? --- The qualification for special benefit is - is listed there on my statement, dated 16 March 2005.

The jury don't have the benefit of that statement and I'm asking you now to tell the jury where is there a legal disqualification from getting special benefit for a visa class 309 holder who is a full time student. What legal document, what section of an Act of Parliament or regulation says if you're a full time student holding a 309 visa you can't get a special benefit? --- The qualification for special benefit states that under legislation a customer is aged 18 or over - - -

No, but please just don't quote to me from a document that you're looking at. In fact put your document away, please. If you want to refer to it, explain why and ask for leave? --- I did yesterday didn't I?

Yes. I'm now suggesting to you - I'm asking for a direct answer. What legislative provision, what bit of law says if you're a 309 holder, visa holder, and a full time student you can't get special benefit? --- Under the special benefit qualification provision in the Social Security Act.

...

Have you ever looked at the actual provisions of the Social Security Act which you say provide that a 309 visa holder, who's a full time student, can't get special benefit? --- No, ...

...

You have looked instead at internal Centrelink documents? --- I have and I've seeked [sic] advice from a specialised officer who deals with visa sub-category claims."

65 Shortly after the witness gave those answers, the judge made the observation that the witness could not give evidence as to the "legal provisions of the Act ... he can give evidence only as to practice, he can't give evidence as to what the legal position is." And, with respect, that was obviously right. Mr Colaianni could give evidence about relevant practices and procedures at Centrelink but he was not entitled to give evidence as to whether Nguyen was entitled to receive special benefits under the legislation. That was a matter of law and, although strictly speaking Mr Colaianni's evidence may have gone no further than his opinion as to whether Nguyen was legally entitled to special benefits, his opinion was irrelevant.

66 Then, however, following further cross-examination in which defence counsel produced to the witness a number of departmental guides and extracted concessions that the contents of the guides were not inconsistent with Nguyen having an entitlement to special benefits, there was another exchange between the judge and defence counsel, in the absence of the jury, as follows:

"HIS HONOUR: I have to say I'm unsure of the situation but I'm uncomfortable with the situation where laypersons are in effect asked to give a legal opinion as to the state of legislation and the effect of legislation. I think that someone in the situation of the present witness is limited to really what he's been told, and he's applying what he's been told...

...

DEFENCE COUNSEL: "Yes, but in so doing it turns out to be, although it's obviously not clear on the face of the original documents or otherwise I would've objected. But it turns out to be not only opinion evidence about the state of the law but hearsay opinion evidence about the state of the law.

HIS HONOUR: Yes, that's right. It's something that he's been told and he's just adopted it, and so he's expressing a view on the basis of information he's obtained from what he believed to be a reliable source within the department.

DEFENCE COUNSEL: Yes, which unfortunately is not a matter which appears from his statements or otherwise, as I say, there would've been at least one, probably two bases for objection to the reception of the evidence in the first place. Your Honour, I was more concerned with your Honour appearing to be speculating about the possibility of getting some legal expert.

...

HIS HONOUR: No, I see what you mean. No, I think that's right, I think the unfortunate situation might be that it's the obligation of the trial judge after hearing appropriate submissions to direct the jury as to the law, and that is the case, unfortunately. I was just thinking of ways of avoiding that but I don't think it can be avoided.

DEFENCE COUNSEL: Yes, I thought that's what your Honour was directing your mind to, and I think that with respect the ---...---conclusion you have just enunciated is the correct one.

...

HIS HONOUR: Yes, at the end of the day I'm going to have to so far as it may be relevant to my charge to give them [scil. the jury] proper directions as to the relevant law, and if part of the relevant law happens to be some of that legislation, then the duty falls upon me, I think. However, if it does come to that - and I'm not sure that it has yet but it might - I'll be more than happy to entertain submissions.

DEFENCE COUNSEL: Thank you, your Honour. In those circumstances, your Honour, I'll make sure that it's not relevant to your charge."

67 Thereafter, defence counsel did not ask Mr Colaianni any more questions about the entitlement of the applicant's wife to special benefits and he concluded the cross-examination briefly with just a few questions about the mechanics of the Centrelink system and the details which it records.

68 Had the matter of Mr Colaianni's opinion as to entitlement been allowed to rest there, it is unlikely that it would have caused much harm. It was irrelevant and inadmissible, and for that reason potentially prejudicial, but such effect as it may have had to that point had been emasculated by defence counsel's cross-examination and it appeared that the judge would give the jury proper directions on the content of the relevant social security provisions as part of the charge. If his Honour had done so, the jury would no doubt have followed his directions in preference to Mr Colaianni's opinion.

69 But regrettably that is not what happened. Instead, the prosecutor returned to Mr Colaianni's evidence in the course of his final address to the jury and sought to rely on it as establishing that Nguyen was not entitled to special benefits:

"...[Ms Jeacle's] understanding of the Centrelink legislation and policy requirements, is that [the applicant's wife] would not qualify for a youth allowance, and in particular, that is to be married with the evidence of M[r] Colaianni, who also referred to issues of qualification, taking into account the circumstances of the spouse, and here we have a situation from the evidence, it's very clear, that in those circumstances a person would not qualify for Centrelink benefits in relation to a youth allowance if that person is in the circumstances of Ms Nguyen as then known by [the applicant].

...

You also had, in the evidence of Mr Colaianni, a level of criticism directed to him in relation to what was said to have been deliberately omitting certain aspects of information from his evidence. And if I could take you, ladies and gentlemen, to - you will recall there was - in terms of whether a person would qualify for a special benefit at all or not, or payments under Centrelink's special benefits, there was omitted from Mr Colaianni's evidence reference to the letters NARWP, where it's said that holders may be exempt from the special benefit NARWP if they are family members of an Australian citizen or an Australian permanent resident with more than two years continuous residence in Australia.

Now, the reason why that was omitted, and Mr Colaianni gave evidence to say that, was that it wasn't relevant. And it wasn't relevant in terms of the way he was hearing. But what was even more important is that nobody who's in receipt of benefits as granted by [the applicant], the Youth Allowance, the Newstart Allowance, nobody receives a special benefit. Special benefits are not relevant to this particular claim. To this particular trial.

...

... I asked ... in ... re-examination of Mr Colaianni, I referred to him being asked a series, or being subject to cross-examination almost entirely in relation to questions of special benefit. And I said, Question: 'As far as the special benefit is concerned they're a completely different type of benefit that one would expect to be paid in relation to a Youth Allowance?' Answer: 'Yes.' 'Or a Job-seeking Allowance, is that right?' 'Yes.' 'Or a search or Newstart Allowance?' Answer: 'Each payment type have their own eligibility criteria attached to them.' 'That's right, and it would be like comparing apples with pears, would it not, if you wanted to compare a Special Benefit with, say, an Austudy Allowance?' 'That's one way of putting it,..."

70 Not surprisingly, that led to defence counsel taking up the matter in his final address to the jury, as follows:

"Remember I asked you to remember the particular way the question was asked by the prosecutor, at p.530, 'Do you have any understanding of the qualification for special benefits?' 'Yes I do', was the answer. And maybe I was slow on the uptake, but it didn't occur to me when the prosecutor asked that question that the only understanding that Mr Colaianni might have had is that somebody else had prepared a template statement for him, which he then adopted, and that Mr Colaianni in fact had no personal understanding or knowledge of those matters, at all. And the evidence which he gave about it was not really his evidence, but him reciting parrot fashion what somebody else had told him. That fact became evident to the defence, during cross examination, when it was known to the prosecution that the prosecution's own witness was simply not entitled to give the evidence that he did.

...

I have dealt with Mr Colaianni, in particular I dealt thereafter with the question of special benefit, and how the Crown had utterly and totally failed to provide any witness who could of their own knowledge speak of the qualifications for obtaining a special benefit. And how the only effective evidence on that point was from [the applicant], and how the real issue was not so much whether [the applicant] was right or wrong in his interpretation of whether [his wife] was entitled to special benefit, but what his belief was. Because, who knows, it would at least theoretically be possible for [the applicant] to be completely wrong in relation to whether [his wife] was entitled to special benefit, and still not be guilty of fraud or dishonesty if he held a genuine belief that what he had done was correct, and that she was in fact entitled to it. In fact there's no real evidence at all controverting either his interpretation of the actual legal qualifications and most certainly not contradicting his statement of his belief. And you will recall that apart from the fact that he's the only person who testified they actually had looked at the legislative provisions and the guide to the Social Security Act in relation to that matter, he also said that he relied on his previous experience in relation to the East Timorese refugees.

...

... the Crown has provided no evidence whatsoever to contradict either the proposition that [the applicant's wife] was actually entitled, as a matter of law, to Special Benefit, and in particular, nothing to contradict [the applicant's] belief that she was entitled to Special Benefit, and at the end of the day it's his honest belief which matters as far as these offences are concerned."

71 That led in turn to the prosecutor complaining to the judge about defence counsel's address, as follows:

"...yesterday my learned friend [defence counsel] addressed the jury in respect of the question of special benefits, and the entitlement that the - the question of whether the reasonableness of the belief in relation to [the applicant], about his wife's entitlement to Commonwealth benefits if they were characterised as a special benefit. I'm just paraphrasing, in essence, the thrust of his submission. My recollection, and that of my instructing solicitor, was that Mr Colaianni's evidence, which was not challenged on this particular point, was that the Commonwealth Act, as it provided for special benefits, was one where if there was an entitlement to special benefit that special benefit was measured against the combined income of both the person who is the intended recipient, and that of their partner or the spouse, that is a higher test, the dollar for dollar.

The reason why I raise that, your Honour, is that [it] is important in terms of the mind of the jury, that the jury if it escaped them, that oh, well she would qualify as you would normally qualify for a youth allowance or a new start allowance, that would then translate into the equivalent of a special benefit.

Now that is not the case, because a special benefit there is a different test and Mr Colaianni wasn't challenged to my recollection, strong recollection, in that regard.

My instructing solicitor raised that this morning and if your Honour could give some consideration to that in the course of your charge." (Our emphasis).

72 On any analysis, the prosecutor's complaint was misdirected. As has already been observed, Mr Colaianni's evidence established nothing about entitlement, and in point of detail Mr Colaianni's evidence was disputed in cross-examination and shown convincingly to be wanting. When, however, defence counsel endeavoured to remind the judge that Mr Colaianni's evidence was irrelevant and inadmissible, the judge rejected his submission out of hand, as follows:

"DEFENCE COUNSEL: In relation to that matter there's two comments: firstly, it's the general comment that applies to all of Mr Colaianni's evidence in relation to these qualifications; firstly, he has no personal knowledge, he acknowledged that he had not read the Social Security Act to see what the qualifications were, he acknowledged that he in fact had not even himself read the Social Security guide ---

HIS HONOUR: Any reference to his evidence obviously is subject to any legitimate criticisms that might be made of it.

DEFENCE COUNSEL: That's correct, but in relation to the particular passages to which attention has been drawn where he's talking about a person who is married - - -

HIS HONOUR: The problem...with the Special Benefits argument is that it seeks to be supported by an extreme example of people who came into this country as - very much refugees, pushed out of their own country. There hasn't been, from your side, any proper evidence about Special Benefits.

DEFENCE COUNSEL: With the greatest of respect, your Honour, I disagree in a most fundamental way with that - - -

HIS HONOUR: You might disagree but I'm telling you that's my view. It's been left in a pretty unsatisfactory state. If you had called someone who could have given some independent evidence, independent of your client, about Special Benefits you'd be in a stronger position."

73 Defence counsel protested, respectfully but with a degree of force which we think was justified in face of the judge's apparent misconception that Mr Colaianni's evidence went any distance to establishing the law on entitlement to special benefits. But he was silenced by the judge with this:

"HIS HONOUR: Anyway, I'm not inviting you to carry on now. I'm not going to engage in that discussion with you, I'm just indicating my view."

74 Defence counsel pushed on with the second of the points which he had earlier said that he wished to make, as follows:

"DEFENCE COUNSEL: The second aspect of the matter is that Mr Colaianni's references to a person being married, your Honour might recall in my cross-examination of him I asked him whether - it was in relation to him saying that he had looked at the passport which indicated that it was a spousal Visa and that he therefore drew the conclusion that these people were married and I ---

HIS HONOUR: Which they were.

DEFENCE COUNSEL: Yes, of course, and I specifically asked him whether - because he had said I am aware of these people's [sic] circumstances and I said, well, are you aware, for example, and would it be relevant to a decision, if it was the case that they were in fact separated, in fact not living together, in fact not getting financial support one between the other, and he agreed that that would be relevant, he simply didn't know anything about it. Now, that's the distinction which is a crystal - - -

HIS HONOUR: I think that Mr Colaianni really wasn't able to comment on that issue.

DEFENCE COUNSEL: No, except to say that he agreed that would be a relevant factor - - -

HIS HONOUR: It might be a [relevant] factor, yes - - -

DEFENCE COUNSEL: And that really is the critical aspect here.

75 The judge, however, terminated that exchange by saying that:

HIS HONOUR: My view of the Special Benefits treatment here is it's been pretty unsatisfactory and I accept Mr Colaianni wasn't the greatest witness to give expert evidence. But there it is, I don't want to engage in further discussion about it..."

76 With respect, his Honour's approach at that point is difficult to understand. The fact was that the Crown had done nothing to identify the legislative provisions which were said to establish that Nguyen was not entitled to special benefits, and Mr Colaianni's evidence on the point was not only irrelevant and inadmissible but also unconvincing. If the position were to be altered in favour of the Crown it could only properly be altered by reference to the law, and that was a matter for the judge in the course of the charge by identifying for the jury the relevant provisions, explaining the effect of those provisions to the jury, and identifying for the jury the evidence of the facts which were relevant to application of the provisions.

77 In a sense the judge was correct in his observation that the state of the evidence as to the entitlement of the applicant's wife to special benefits was unsatisfactory. But so far from that being something for which defence counsel was to be criticised, it was to defence counsel's credit that it was so. By cross-examination of Mr Colaianni, and by his submissions to the judge, defence counsel had demonstrated that Mr Colaianni's evidence on the point was irrelevant and inadmissible and that the Crown had otherwise established nothing about Nguyen's entitlement. In effect, the Crown was bound to fail on the point unless it identified the statutory provisions on which it relied and adduced evidence to prove beyond reasonable doubt that Nguyen's circumstances were such that she was disentitled by those provisions.

78 But instead of accepting defence counsel's submission and acting in accordance with it, as the judge should have done,[20] his Honour dismissed it. Indeed, as it appears from the terms in which the judge responded to defence counsel's argument, his Honour was of the view that it was somehow for the applicant to prove that the applicant's wife was entitled to the benefits which she had received and that the unsatisfactory nature of Mr Colaianni's evidence was something which rebounded to the disadvantage of the applicant.

79 Of itself that might not have been fatal. The exchange was in the absence of the jury and there was still time for the judge to identify the relevant provisions of the Social Security legislation and in the course of his charge to the jury to explain the provisions and identify the evidence of Nguyen's circumstances upon which the Crown relied as disentitling to her to Special Benefits. But instead of doing that, the judge went on to compound the error by directing the jury as follows:

"[Mr Colaianni's] view was that no special benefits would apply and if [the applicant's wife] was married, then her entitlement would be income tested dollar for dollar and there was no record of any income test and if there were a spouse, then the spouse would need to be interviewed. He referred - and again this is not in conflict - the practice where people did not have a bank account where they could pick it up at a Centrelink box. We have heard other evidence about that say it is not a very convenient procedure [sic].

He considered that [the applicant's wife] would not, if she was over 18, even if she was separated from her husband, she would not qualify. I do not think that matter was gone into in his evidence in more detail..."

80 In the end, the jury were not instructed as to the legal prerequisites for special benefits. They were not provided with any direction as to the evidence relevant to determine whether the applicant's wife satisfied those prerequisites. And they were not directed to consider both of those matters in determining whether the applicant was aware that the applicant was not entitled to receive special benefits. In effect, the judge simply told the jury that they could act on the basis of Mr Colaianni's opinion that the applicant's wife was not entitled to Special Benefits.

81 Consequently, the applicant's guilt of Count 2 was not determined in accordance with law, but in accordance with inadmissible evidence of departmental opinion as to the meaning of the law, and that is a miscarriage of justice.

82 We do not think that it is open to apply the proviso; for we find it impossible to say from the record that the applicant was proved to be guilty on Count 2 beyond reasonable doubt on the basis of evidence properly before the jury. Our examination of the Social Security Act and the relevant regulations suggests that Nguyen was not entitled to special benefits, and the elaborate and improbable nature of the applicant's defence excites considerable suspicion. But success for the Crown depended upon satisfying the jury not only that Nguyen was not entitled to special benefits but also that the applicant knew or believed that she was not entitled to receive them, and assessment of the applicant's belief depended to a large extent on assessment of the applicant's credibility as a witness. Without seeing the applicant in the witness box and hearing him give his evidence, we do not consider that we are in a position to make that assessment. This is a case in which the "natural limitations" that exist in the case of an appellate court proceeding wholly or substantially on the record require us to conclude that we cannot reach the necessary degree of satisfaction.[21]

Conclusion

83 For the reasons which we have given, the application for leave to appeal against conviction on Count 1 should be refused.

84 The application for leave to appeal against conviction on Count 2 should be allowed and the appeal should be treated as having been instituted and heard instanter. The conviction on Count 2 should be quashed and a new trial of Count 2 should be ordered to be had.

85 We see no reason, however, to vary the head sentence or the minimum custodial period which were imposed below. They strike us as being extremely lenient and, accordingly, they are confirmed.

[1] Count 1 alleged a loss of $10,574.91, and Count 2 alleged a loss of $16,744.87.

[2] The maximum custodial term prescribed for the offence is five years.

[3] As the applicant's counsel explained it to the jury in his final address**.**

[4] He said that "Thi" was a reference in Vietnamese to young lady or "female".

[5] See, for example, R. v. Arundell [1998] VSCA 102; [1999] 2 V.R. 228 at 250-251 per Callaway, J.A., R. v. Warasta (1991) 54 A. Crim. R. 351 at 354 and 356, Melbourne v. The Queen [1999] HCA 32; (1999) 198 C.L.R. 1 at [30]- [31] per McHugh, J. and by Gummow, J. at [77] and Hayne, J. at [157], R. v. TSR [2002] VSCA 87 at [63] per Chernov, J.A.

[6] See Melbourne v. The Queen [1999] HCA 32; (1999) 198 C.L.R. 1 at [14]- [15] and [29] per McHugh, J. and at [57] per Gummow, J.

[7] R. v. Best [1998] 4 V.R. 603 at 606.

[8] Webb v. The Queen [1994] HCA 30; (1994) 181 C.L.R. 41 at 56.

[9] [1998] 4 V.R. 603.

[10] [1998] 4 V.R. 621.

[11] [2004] 11 V.R. 219.

[12] [2005] VSCA 69; (2005) 153 A. Crim. R. 173 at 181 per Winneke, P.

[13] Which is articulated in cases like R. v. Anderson, [1996] VICSC 17; [1996] 2 V.R. 663 at 666-667 per Winneke, P.

[14] [2002] VSCA 98; (2002) 131 A. Crim. R. 299 at 301.

[15] [1999] VSCA 145; [1999] 3 V.R. 355 at 356 per Phillips, C.J. and Charles, J.A.

[16] (2000) 200 C.L.R. 234 at 256.

[17] Black v. The Queen [1993] HCA 71; (1993) 179 C.L.R. 44.

[18] Ibid at 51.

[19] R. v. Muto and Easey [1996] VicRp 21; [1996] 1 V.R. 336 at 342; R. v. Di Mauro [2001] VSCA 52; (2001) 3 V.R. 62 at 64.

[20] And indeed had previously showed signs of being disposed to do, when the issue first arose in the course of Mr Colaianni's cross-examination: see [72] above.

[21] Weiss v. R. [2005] HCA 81; (2005) 80 A.L.J.R. 444; 158 A. Crim. R. 133 at [41].