R (Cth) v Petroulias

Such a vice must be readily apparent and clearly fatal to the prospect of success of the prosecution. I cannot readily imagine that such a vice could arise out of some insufficiency of evidence relied on by the Crown unless a matter such as an incurable absence of admissible evidence on some essential element." 77 Eames J at 41-42 said with respect to the test to be satisfied in support of foredoomed to fail ground: "The real question is whether the passage in Doney , to which I have made reference and which relates to the principles relevant to a submission of 'no case', embraces the concept of the case being 'so clearly untenable' that the prosecution cannot possibly succeed, as stated by Barwick CJ in General Steel , or the concept of the case being 'foredoomed to fail' stated in Walton where the application before the court is for a stay of proceedings. In my opinion it does not and, accordingly, his Honour has applied the wrong test in determining the application for a permanent stay.

The tests are very similar but, in my opinion, the very considerable emphasis given in the decided cases to the exceptional care which must be given to any such application, and the expected rarity of the success of such an application, suggests a test more onerous than that which would apply to a no case submission. Having had the advantage of reading the judgment of Brooking J, I am content to adopt the formulation of the test as proposed by his Honour, namely, that it must be clear beyond argument that the Crown is unable to make out a case to answer, having regard to the evidence available to it. A test stated in such stringent terms would be consistent with the often stated acknowledgment that the courts are not to interfere with the discretion residing in prosecuting authorities to determine which trials are to be prosecuted in the courts: Connelly v Director of Public Prosecutions [1964] AC 1254 at 1304; Jago at 39 per Brennan J; cf Mason CJ at 28. The rarity of the success of such an application as that presently under consideration may be gauged by the fact that counsel were unable to cite a single instance of such an application succeeding on grounds such as those argued here." 78 Accordingly, on this ground, the Accused seeks the most exceptional type of an already exceptional remedy. If the application succeeds, the operation of the criminal justice system will not proceed further with respect to the first count. There will be no trial on that count at which I may be called upon, as the trial judge, to determine whether the Accused has a case to answer applying the principles in Doney v The Queen. Assuming that there was such a case, there will be no opportunity for a jury, as representatives of the community, to hear the evidence and return a verdict according to law on that count. 79 In Doney v The Queen, the High Court emphasised the importance of the traditional jury function in a criminal trial. The Court made express reference at 215 to the important role of the jury when a trial judge is asked to exercise the power to stay proceedings as an abuse of process at the expense of the traditional jury function: "It is necessary only to observe that neither the power of a court of criminal appeal to set aside a verdict that is unsafe or unsatisfactory (as to which see Whitehorn , Chamberlain v. The Queen (No.2) (1984) 153 CLR 521 and Morris v. The Queen (1987) 163 CLR 454) nor the inherent power of a court to prevent an abuse of process (as to which see Jago v. District Court (N.S.W.) (1989) 168 CLR 23) provides any basis for enlarging the powers of a trial judge at the expense of the traditional jury function. The power of a court of criminal appeal to set aside a verdict on the ground that it is unsafe or unsatisfactory, like other appellate powers, is supervisory in nature. Its application to the fact-finding function of a jury does not involve an interference with the traditional division of functions between judge and jury in a criminal trial. Nor does the existence in a trial judge or a court of powers to stay process or delay proceedings where the circumstances are such that the trial would be an abuse of process." 80 It is submitted for the Accused that this case is more susceptible to a foredoomed to fail argument because the Crown adduced all its evidence at the first trial and has indicated that the same evidence will be adduced, and be relied upon, at a retrial. There is no foreseeable area in which the Crown anticipates adducing additional evidence at a further trial (PT376, 2006). 81 In these circumstances, which the Accused submits are exceptional in themselves, it is said to be appropriate to examine the case against the Accused on the first count by application of the foredoomed to fail test. The Accused submits that this process is facilitated further by the decisions of the Court of Appeal in 2003 and the Court of Criminal Appeal in 2005 which identified relevant principles in the context of this very case. Following the delivery of those judgments, the Crown has adduced the evidence at the first trial upon which it will seek to rely once again at a retrial in support of the first count. The Accused submits that the difficulties of predicting evidence to be called at a future trial, referred to in cases such as Smith and Tolmie, do not arise in this case. 82 As will be seen, the Accused contends that the first count is foredoomed to fail by reference to three elements - unlawful means, causation and deprivation. It was the issue of deprivation which attracted judicial attention in the Court of Appeal in 2003 and the Court of Criminal Appeal in 2005. It is that issue which became the focal point of the present application. 83 In my view, the approach articulated by Brooking, Byrne and Eames JJ in R v Smith informs the process to be undertaken in determining the foredoomed to fail ground in this case. The approach of Hunt CJ at CL in Tolmie is consistent with this approach. It is for the Accused to demonstrate clearly that the first count is doomed to failure. A likelihood that the prosecution will fail is not enough. It is for the Accused to establish that it is manifestly clear that the evidence is incapable of supporting at least one essential element of the offence contained in the first count. I will approach the resolution of this ground with this test in mind. 84 If the Accused succeeded in establishing the foredoomed to fail ground with respect to the first count, he would be entitled to a permanent stay of that count. Even if the Accused cannot discharge the heavy onus in that respect, Mr Clelland SC contends that the strength, or lack of strength, of the Crown case on the first count may be called in aid in support of the permanent stay application on the alternative basis contained in the broad abuse of process ground. The Accused submits that this is but one factor which may be taken into account with a range of other factors to demonstrate that the further prosecution of the first count constitutes an abuse of process. 85 At this point, it is as well to emphasise the functions which I am presently exercising. Consideration of the arguments advanced by the Accused concerning the first count will involve a detailed examination of parts of the judgments of the Court of Appeal and the Court of Criminal Appeal, the evidence adduced at trial before Sully J and several judgments of his Honour during the trial together with aspects of the summing up to the jury. I am not making rulings on admissibility of evidence for the purpose of the retrial. Nor am I determining whether the Accused has a case to answer for the purpose of the retrial. Rather, I am considering evidence relied upon and submissions advanced in support of the foredoomed to fail ground and the broad abuse of process argument.

The Crown Case 86 A broad statement of the Crown case against the Accused is contained in the following extract from the judgment of Spigelman CJ in Wills v Petroulias at 600-601 [3]-[7]: "3. Between 1997 and 1999 the Opponent [Mr Petroulias] held office in the Australian Taxation Office ("ATO"). In September 1998 he became First Assistant Commissioner. The Crown alleges that at the time of such employment the Opponent was also involved in the planning, promotion and implementation of tax schemes with certain other persons and that he used his position as an officer of the ATO to facilitate favourable Advance Opinions and Private Binding Rulings issued by the ATO.

4 Private Rulings are issued under Pt IVAA of the Taxation Administration Act 1953 (Cth). The scheme of Private Binding Rulings is as follows: · A person may apply to the Commissioner for a ruling as to how a tax law would apply to the person in relation to an arrangement (s14ZAF).

· The Commissioner is obliged to comply with an application for such a ruling, subject to certain exemptions (s14ZAL(1) and s14ZAN).

· There are circumstances, not presently material, in which a Commissioner may decline to make a ruling (s14ZAQ).

· A ruling given in this manner is binding by force of statute (s170BB of the Income Tax Assessment Act 1936 (Cth).

5 The Opponent and his partners established a business known as the Productivity Incentive Corporation ("PIC") which, inter alia, applied for Private Binding Rulings with respect to tax schemes described as Employee Benefit Arrangements ("EBAs"). In general terms the EBAs involved the payment by an employer of monies into a trust fund. The trust would lend money to individual employees for the purpose of purchasing units in the trust. The income of the trust would enure to the benefit of nominated employees. The eligibility of the employees to receive returns on the units would depend on continued service with the employer and the attainment of productivity or performance standards. The corpus would eventually vest in favour of the employee. The purpose of these arrangements was said to be to encourage employees to remain with their employer and also to act as an incentive for such employees to become more productive.

6 As is usually the case, the taxation treatment of the cash flows was of critical significance to the commercial viability of the arrangements. It was always accepted that each employee would be assessable on his or her share of income of the trust. Four issues arose: · Would the employer's contributions be deductible at the time they were made?

· Would the employer be liable for fringe benefit tax under the Fringe Benefit Tax Assessment Act 1986 (Cth) with respect to its contributions?

· Would the general anti-avoidance provisions found in Pt IVA of the Income Tax Assessment Act apply to the scheme?

· Would the employee be assessable on the value of the units in the trust that each acquired?

7 The Crown case was that the Opponent used his position to ensure that officers under his direction issued favourable rulings with respect to applications made by the joint venture in which he had a financial interest. This was in contrast with the Opponent's intervention with respect to applications by other promoters of similar schemes, in the case of which he allegedly intervened to ensure that favourable rulings were not given. Indeed, the Crown contended that the Opponent was involved in the preparation and publication of a Public Ruling in which the ATO indicated a view opposed to the efficacy of the EBAs." 87 At the risk of oversimplification, the evidence adduced by the Crown at the first trial fell into the following broad categories:

(a) the evidence of Mr Richard Morgan of the arrangement said to have been entered into between the Accused, Mr Morgan, Mr Panos, Mr Strong, Mr McLaren and Mr Gray including evidence of benefits allegedly received by the Accused for his part in the arrangement;

(b) evidence of a number of ATO officers concerning the issue of Advance Opinions and Private Binding Rulings - the principal witnesses in this class included Mr Lowman Chow, Mr Michael Charles, Mr James Targett and Mr Emmanuel Aivaliotes;

(c) documentary evidence obtained from a number of sources, including a storage area in Melbourne leased by the Accused in a false name - the Crown relied upon documentary material as evidencing the existence of the arrangement alleged by Mr Morgan and the steps taken by the Accused in drafting applications and otherwise assisting applicants and promoters and, on the ATO side, supporting applications made by those promoters for Advance Opinions and Private Binding Rulings and not supporting applications by competitors in this respect;

(d) a body of documentary evidence which the Crown relied upon in support of the element of deprivation in the first count - this included documents directed to the Accused or prepared by him which, according to the Crown, demonstrated an arguable case in support of the element that the Commonwealth had been deprived of something of value by the acts of the Accused. 88 Other witnesses were called (including investigators and other ATO officers) and other classes of documents were tendered at the first trial. 89 A primary factual issue involved proof of the arrangement alleged by Mr Morgan to have involved the Accused. The credibility and reliability of Mr Morgan was a central issue at the first trial. He was described by Sully J as "a cardinal witness in the Crown case". The Crown submitted that, in various respects, the documentary evidence corroborated the evidence of Mr Morgan. 90 The Accused made a series of formal admissions on a range of factual matters upon which the Crown relied at trial. 91 The Accused did not give evidence at the trial nor were any witnesses called in the defence case.

The First Count - Section 29D Crimes Act 1914 (Cth) 92 The Crown's written submissions (MFI2, paragraph 1.2) observe that it is difficult to identify any other prosecution in which the formulation of the indictment has received the level of judicial scrutiny, particularly at the appellate level, as has occurred with the first count on the present indictment. I agree with this observation. 93 Of course, Mr Clelland SC submits that the Crown has brought much of this upon itself. The wording of the first count has changed on more than one occasion. It was the Crown which appealed to the Court of Appeal from the decision of Simpson J relating to the committal proceedings and to the Court of Criminal Appeal from the decision of Sully J staying the first count. Mr Clelland SC contends that the body of jurisprudence which has emerged surrounding the first count in the indictment has arisen largely from the Crown's changing positions. 94 It was submitted for the Crown before me that much of what has occurred since the committal proceedings has involved the Crown responding to points taken by the Accused. I bear in mind, however, that a criminal trial is conducted as adversarial litigation (Whitehorn v The Queen (1983) 152 CLR 657 at 682; Nudd v The Queen (2006) 80 ALJR 614 at 618 [9]) and that an accusatorial process is involved in which the prosecution bears the onus of proving the guilt of the Accused beyond reasonable doubt and in which the prosecution must put its case fully and fairly before the Accused is called on (The Queen v Carroll at 643 [21]; R v Ronen (2004) 62 NSWLR 707 at 722-3 [63]; Weiss v The Queen (2005) 80 ALJR 444 at 455 [43]). 95 At any trial, it will be for the Crown to establish the element of deprivation for the offence under s.29D contained in the first count. It has always been a matter for the Crown to formulate that count and to adduce evidence in support of that element. It is, of course, for the Crown to undertake that burden whatever stance is adopted by the Accused.

A Defence Concession 96 Before embarking on matters relevant to the first count, it is as well to identify what is, and is not, in issue for present purposes. In the course of submissions, Mr Clelland SC made the following concession (PT61.1, 2006): "We are willing to concede that there was evidence of a conflict of interest, of a non disclosure of that interest indeed, a concealment of that interest, and evidence of a lack of fidelity by Mr Petroulias to the Australian Tax Office. That was evidence on which the jury could have concluded that Mr Petroulias acted dishonestly. It was no answer, though, and no proof of the elements of deprivation or causation or dishonest means, or that he had been party to the arrangement as alleged." 97 During the course of submissions, I invited Mr Clelland SC to outline the material which founded that concession. Mr Clelland SC responded in some detail (PT209.35ff, 2006). At the commencement of proceedings on 26 July 2006, Mr Clelland SC returned to this topic (PT231.26-232.23, 2006): "CLELLAND: Your Honour asked me to inform you in a very general way about the Crown case of dishonesty in view of the concession that I made on day 1. I identified some of the matters, but what I didn't do was to perhaps tell your Honour the framework in which the Crown put the dishonesty. It was essentially this. They said the dishonesty was constituted by the accused's conflict of interest, firstly, and it was that conflict of interest because of his connection, the Crown said, in a business with persons such as Panos and the other solicitors who I have already mentioned; Mr Strong, Mr McLaren, Mr Gray and, indeed, Mr Morgan.

Secondly, his dishonesty was shown by applying a policy which the accused was said to regard as being contrary as to what he thought the policy should be, that is, the ATO policy in relation to the applicability of fringe benefits tax at the time of contribution.

Thirdly, it was said he acted dishonestly because he discriminated between the Productivity Incentive Group and other promoters who sought rulings that was said to be other arrangements.

Fourthly, it was said that he concealed what he was doing by ensuring that Mr Aivaliotes did not put the rulings on the internal system and in that way, he was able to limit the knowledge within the Tax Office of the rulings being issued by Mr Aivaliotes. Finally, that Mr Petroulias was deceptive when it came to others trying to find out precisely how many rulings had issued. There was, as a result of a review being conducted by Mr Petroulias's successor, an internal enquiry of sorts which, from time to time, sought to establish just what rulings had issued. The Crown case was that Mr Petroulias had been deceptive in his dealings with those investigators just as to how many rulings that issued.

The Crown said, although there was some overlap in those issues and a number of facts that are common between them, particularly in relation to what the accused regarded the ATO policy as that was essentially the way they put it. We would say in no way did those elements or suggested categories of dishonest conduct go to the issues of deprivation, causation and, relevantly, as I will come to, the concept of dishonest means.

HIS HONOUR: The concession, which was made at page 61 of the transcript of this hearing, involves a concession that there was evidence of those matters which you have just articulated as being the Crown case with respect to dishonesty?

CLELLAND: Yes." 98 The Accused submits that the first count is foredoomed to fail with respect to the elements of deprivation, causation and unlawful means. 99 The Crown submits, in my view correctly, that it is necessary to consider the submissions advanced by the Accused against the background of all the evidence adduced in the Crown case. It would be erroneous to confine attention in an artificial way to limited categories of evidence to determine whether there is an absence of evidence with respect to particular elements of the offence. That said, the process of examination of the totality of the evidence adduced by the Crown is to be undertaken with the view to an assessment whether, for the limited purpose of the present applications, there is evidence with respect to each of the three identified elements.

The Element of Deprivation 100 It is appropriate to commence with the element of deprivation. It is this element which has been subjected to the intense level of judicial scrutiny referred to earlier in this judgment. To understand the arguments of the Accused, it is necessary to refer to statements made in the judgments of the Court of Appeal and the Court of Criminal Appeal. 101 The appeal which came before Simpson J in 2002 related to the order of committal for trial. At that time, the first count was worded differently to its present form. It is not necessary, for the purpose of this judgment, to set out the wording of earlier versions of the first count. 102 On 17 December 2002, Kiefel J gave judgment in Essenbourne Pty Limited v Commissioner of Taxation (2002) 51 ATR 629, a decision which bears upon both the deductibility and the goods and services tax issues in a manner which is said to be relevant to the present case. Since then, there have been a number of other decisions in the Federal Court of Australia in which Essenbourne has been followed: Walstern Pty Limited v Commissioner of Taxation (2003) 138 FCR 1 (Hill J); Spotlight Stores Pty Limited v Commissioner of Taxation (2004) 55 ATR 745 (Merkel J); Pridecraft Pty Limited v Commissioner of Taxation (2004) 213 ALR 450 (Ryan, Sackville and Sundberg JJ) and Indooroopilly Children's Services (Qld) Pty Limited v Commissioner of Taxation (Collier J). It is not necessary to pause to consider these decisions in detail. The relevance of them was touched upon in the judgments of the Court of Appeal and the Court of Criminal Appeal to which I will turn shortly.

The 2003 Court of Appeal Judgments 103 The Prosecutor appealed to the Court of Appeal against the decision of Simpson J in which error was found on the part of the Magistrate with respect to the s.29D count. The Court of Appeal (Spigelman CJ, Handley and Santow JJA agreeing) allowed the appeal from Simpson J on 3 October 2003 (Wills v Petroulias (2003) 58 NSWLR 598) although, following an application made by the Accused, the Court varied aspects of its judgment delivered on that day in a subsequent judgment delivered on 22 December 2003 (Wills v Petroulias (No. 2) (2003) 58 NSWLR 618). It is necessary to keep in mind that the s.29D count was in a different form to that contained in the present indictment when the matter was before the Court of Appeal in 2003. 104 After outlining the nature of the Crown case against the Accused on the s.29D count, Spigelman CJ observed at 601 [8]: "There were a number of indicators of dishonesty, which is an essential element of an offence against s29D. The element of dishonesty was not in issue before Simpson J or in this Court. These proceedings did not focus on the mental element of an offence against s29D of the Crimes Act. The focus of these proceedings is the element of 'loss' or 'disadvantage' in the offence of 'defrauding the Commonwealth'. I will refer to this as the element of deprivation. It is not enough to establish a fraud. Someone must have been defrauded." 105 The Chief Justice said at 611 [54]: "The proposition that a charge of defrauding can be made out by putting the property or rights of a person at risk or imperilling them or prejudicing them in some way is well established. (See, for example, The Queen v Kastratovic (1986) 42 SASR 59 at 62; Peters v The Queen at [30], [73]-[74], [84] and [138]; Spies v The Queen at [79]-[81]; MacLeod v The Queen (2003) 77 ALJR 1047 at [35]. See also R v Scott [1975] AC 819 at 839; Wai Yu-tsang at 280)." 106 At 614 [72]-[74], Spigelman CJ said: "It is, in my opinion, sufficient for purposes of the element of deprivation, to establish that a lawful right, interest or opportunity which had not previously been resolved one way or another has been resolved, so that its very resolution constitutes the relevant detriment. That will be sufficient so long as there is a bona fide claim which, if correct, would be of value.

To use the terminology of King CJ in Kastratovic at 65, the Crown must establish a 'genuine dispute'. To use the terminology of Toohey and Gaudron JJ in Peters at [25], the Crown must establish that it was 'genuinely asserting' a position. It is enough for that purpose to establish that a particular position was being taken by the Commissioner of Taxation with respect to these matters. It is not, in my opinion, necessary to establish that the position is in some sense a justifiable or correct or even arguable position, although it is likely that in the course of establishing what the belief is, some of the argument supporting the position will appear in the relevant evidence. It may be what Simpson J had in mind was no more than a way of determining that a 'dispute' was in fact a 'genuine dispute' or that an assertion was a "genuine assertion". In my opinion, establishing in a positive manner that a Private Ruling was arguably wrong is not the only way which the element of 'genuineness' of a dispute or assertion can be determined." 107 Spigelman CJ at 614-615 referred to an analogous issue arising in contract law. Having done so, his Honour continued at 615 [77]-[78]: "Although such cases on the civil law must be treated with care before applying them to the criminal law, nevertheless they do support the proposition that the loss of a right to adjudicate a genuine dispute is a thing of value.

In my opinion, there was evidence before the magistrate which established that there was a 'genuine dispute', to use the language of King CJ in Kastratovic , or that the Commissioner was 'genuinely asserting' a position, to use the language of Toohey and Gaudron JJ in Peters . The element of 'genuineness' was established on the basis of the contrary opinions expressed, the contrary rulings made and the circumstances and manner in which they were made."

On this basis, Spigelman CJ concluded that there was material before the Magistrate which was capable of satisfying the statutory tests for committal for trial. 108 The application that the Court of Appeal vary its judgment in a number of respects related to references in the judgment of 3 October 2003 to the decision of Kiefel J in Essenbourne. It is not necessary, for present purposes, to set out in detail what was said by Spigelman CJ in the judgment of 3 October 2003 in this respect nor in the arguments advanced to the Court seeking variation of that judgment. It is sufficient to note the statement of Spigelman CJ (Handley and Santow JJA agreeing) to the following effect at 624 [40]: "I do not resile from the conclusion that Essenbourne indicates that there was an arguable case on the fringe benefits tax issue. I also concluded at [84] that Essenbourne establishes that the deductibility issue was 'strongly arguable'. In view of the subsequent submissions, I would withdraw the word 'strongly' but reaffirm the basic proposition."

109 Senior counsel for the Accused made submissions to the Court of Appeal concerning the effect of Essenbourne and Walstern. In this regard, Spigelman CJ said at 625 [46]-[48]: "The proposition that the outgoing was of a capital nature remains distinctly arguable under the PIC scheme. It is a matter which par [1] of the Private Ruling could prevent the Commissioner contesting. The deductibility question is generally a question of mixed fact and law. The rulings determined that the facts submitted and assumed in the application for a ruling entitled the taxpayer, as a matter of law, to the tax treatment set out in the ruling. The Commissioner was deprived by the ruling of the opportunity to argue otherwise.

Accordingly, the Commissioner in the schemes presently before the Court, has been deprived of the opportunity of arguing that a scheme complying with the application - which was handed up to this Court - for the purpose of both 'retaining key employees' and 'increasing employee productivity and profitability' with the possibility of annual contributions, was expenditure of a capital nature. Accordingly, par [1] of the Ruling was capable of having an impact constituting the element of defrauding.

I would reach no different conclusion to that of the first judgment." 110 At 626 [49], Spigelman CJ observed that "important public interests are involved in these prosecutions". This observation is pertinent to the permanent stay application. 111 The Court of Appeal varied its orders, remitting the case to the Magistrate to make the order of committal authorised by law and to amend the order for committal accordingly. On 24 March 2004, the Accused was committed for trial. On 16 August 2004, Sperling J dismissed an appeal against that committal order: Petroulias v Wills (2004) 56 ATR 608.

Sully J's Judgment of 21 February 2005 112 By the time the pre-trial hearing commenced before Sully J on 7 February 2005, the first count was in the form contained in the present indictment. In the judgment delivered on 21 February 2005, staying the first count, Sully J recited the history of earlier proceedings before Simpson J and the Court of Appeal and arguments advanced by reference to the decision in Essenbourne. Sully J observed at 37.5: "I mean not the slightest disrespect either to the Essenbourne decision itself, or to what was said about it in the two judgements of the Court of Appeal, when I say, as I do, that I cannot see how that decision assists me in any way to decide the particular topic of present discussion." 113 Having outlined the approach to the element of deprivation, the manner in which it might be proved and the role of the judge and the jury concerning that element, Sully J continued at 40.8: "In the present case, the trial Judge is to be faced with a requirement, not to instruct the jury as to the actual state of the relevant law; but to form an opinion as to what the law might be supposed to have been at the relevant time, so as to proceed to a further conclusion that the relevant contra arguments were arguably correct; and then to instruct the jury that the opinion of the Judge upon that highly controversial question is to become their opinion.

I have considered whether the conundrum might be resolved by the calling of expert evidence. It seems to me, however, that the provisions of the Evidence Act (supra) are to the contrary, for those provisions are directed to the proof of questions of fact. There is a specific exception in the case of foreign law: s 174; but even that exception does not extend to the admission of allegedly expert evidence as to the correct application to the relevant facts of the particular case of the foreign law as proved by the permitted means.

I have kept in mind throughout this discussion the observation of the Chief Justice that important public interests are involved in the applicant's prosecution. I have been similarly mindful, too, of his Honour's reminder that it is not for a trial Judge to settle, or to seek to influence the formulation of, or otherwise to dictate the form of, a proposed count in an indictment.

Because of those considerations I am, to speak frankly, reluctant to stay the proposed proceedings on the projected first count. But the more I have thought about the practical problems as I have been discussing them, the more I have come to the conclusion this is a case in which a stay should be ordered.

It seems to me that it cannot be correct in principle to allow a trial to proceed, when something essential to the proof of the Crown case entails the making of a value judgment which raises neither a true issue of fact for the jury, nor a true question of law for the Judge. It is regrettable that the situation of the present matter has come to such a pass; but in my opinion that is the case, and, given the troublesome history to date of the formulation of a s 29D charge, it seems to me that it is time to say, with whatever feeling of dissatisfaction, that enough is enough.

I order therefore that the proceedings on the proposed count based upon s 29D of the Commonwealth Crimes Act be stayed permanently."

The 2005 Court of Criminal Appeal Judgment 114 The Crown appealed against the permanent stay order under s.5F Criminal Appeal Act 1912. The Court of Criminal Appeal allowed the appeal and set aside the permanent stay: R v Petroulias (2005) 62 NSWLR 663. The Court was unanimously of the view that the appeal should be allowed, but separate judgments were delivered by Spigelman CJ and Hunt AJA on the one hand, and Mason P on the other hand. As will be seen, at the trial which followed before Sully J, consideration was given, from time to time, to the proper construction of statements made by the Court of Criminal Appeal in these judgments. Similar arguments have been advanced before me. It is appropriate to set out portions of these judgments to which particular attention has been given in submissions. 115 Spigelman CJ and Hunt AJA at 665 [1] agreed with Mason P, for the reasons given by the President, that the decision of Sully J to grant a permanent stay should be set aside. However, their Honours stated that the view which they had formed as to how the trial should be conducted in relation to the s.29D count differed sufficiently from that proposed by Mason P that it was necessary to set out their own reasons as to the nature of the issue posed and how it should be put to the jury. 116 Their Honours observed at 665-666 [4]-[5] that the Crown put its case in terms of the second (risk of loss of revenue) of the three categories of fraud identified in Peters v The Queen (1998) 192 CLR 493 at 508. To fall within the second category, there must be the possibility that the Commissioner of Taxation, were he not bound by the rulings made, would win a case by demonstrating the rulings were wrong. In order to support the first count, the Crown must establish that the private rulings were arguably wrong (666 [6]). Spigelman CJ and Hunt AJA stated at 666 [8]: "There was some discussion in Wills v Petroulias as to what had to be established in a case alleging that the private rulings procured by the accused constituted an actual risk that the revenue of the Commonwealth was imperilled, but only tentative views were expressed. We agree with Mason P that the time has come for this Court to express a concluded view. If this Court adopts the need to prove that the private rulings were arguably wrong (or any variation of that formulation), a second issue must then be determined - whether that issue is one of law for the judge to decide or whether it is one of fact (or mixed law and fact) for the jury to determine." 117 Spigelman CJ and Hunt AJA observed that a number of statements made in the earlier Court of Appeal judgments must be understood in the context of the s.29D count as it was then framed. Their Honours continued at 667 [11]: "In our opinion, the issue which arises in a second category (actual risk of loss of revenue) case would be expressed more clearly if it were made clear on its face just why the issue arises and if it were couched in a positive rather than a possibly negative way. In this way, the difficulties which Sully J saw in the 'arguably wrong' formulation would largely disappear. In our view, to say that the private rulings are arguably wrong is really saying no more than that the Commissioner of Taxation has an arguable case to put that the rulings were wrong and, accordingly, that the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. There is no difference in substance in stating the issue in this way. But stating the issue in this way leads immediately to a consideration of the approach to be taken in determining the issue, be it by the judge or the jury." 118 Their Honours then continued at 667-669 [12]-[20]: "One issue of law for the judge

12 The arguable case to be put by the Commissioner must first demonstrate the possibility that the Commissioner would win a case in which he was allowed to dispute the private rulings. Is the case which the Commissioner wishes to put one which is capable of success? That is clearly an issue of law for the judge. The ruling would be given in the way that every such ruling is given as to whether the Crown case can go to the jury - before counsel address the jury, and after argument in the absence of the jury. In the event that the judge rules that the arguable case the Commissioner wishes to put forward is capable of success, no further mention of the ruling should be made to the jury, as jurors may well be misled as to its effect upon the issues which they have to determine.

13 An arguable case is (by definition) a case which is supported by an argument which is plausible or apparently reasonable on its face. A plausible or apparently reasonable argument is one which can be reasoned logically from one step to the next step to its conclusion. It is not the function of the relevant tribunal to determine whether either the Commissioner's argument or the taxpayer's argument is correct, or even which is the more plausible or the more apparently reasonable argument. It may be that each of those parties has an arguable case. That is not unusual in litigation. Even though the taxpayer may have an arguable case, it does not mean that the relevant tribunal may not be satisfied beyond reasonable doubt that the Commissioner also has an arguable case. If so satisfied that the Commissioner has an arguable case, the relevant tribunal has resolved the issue posed by a second category fraud case, subject to the mens rea component identified in par 3, supra.

14 Whatever conclusion is reached on this question, the primary issue which must ultimately go to the jury is whether the Commonwealth has suffered a detriment as a result of the private rulings given. That detriment is to be established in this case by demonstrating, according to our suggested formulation, that the Commissioner has an arguable case that the private rulings were wrong. The parties (for quite different purposes) agreed before Sully J and this Court that the predecessor of this issue (whether the private rulings were arguably wrong) was an issue of law for the judge. We have already accepted that the capacity of the Commissioner's arguable case to succeed is an issue of law for the judge (par 12, supra). But we do not agree that the remaining issue is a question of law to be determined by the judge. In our opinion, that issue, despite its obvious legal character, is a fact in issue in the trial to be determined by the jury.

15 A trial judge must direct the jury as to, inter alia, the manner in which the jurors are to carry out their functions and the elements of the crime charged. The contents of such directions are accepted as being matters of law for the trial judge to decide. But the issue of whether or not the Commissioner has an arguable case that the private rulings given were wrong is not an element of the crime of defrauding the Commonwealth. It is what the Crown puts forward as establishing that the actual risk that the revenue of the Commonwealth was imperilled amounts to the deprivation necessary for a charge of defrauding the Commonwealth. The relevant element of the crime is deprivation. Whether the Commissioner has an arguable case that the private rulings were wrong is, therefore, a fact in issue relevant to the deprivation element of the crime charged.

16 The requirement that the trial judge direct the jury on the applicable law in relation to the elements of the crime charged does not require the judge to direct the jury as to what the law is in relation to Fringe Benefits Tax, the meaning of the term 'associate' in s 26AAB(14)(a)(iv) of the Income Tax Assessment Act 1936, or whether the employer's payments under the relevant scheme were deductible. Nor is it appropriate that the judge direct the jury that the arguments put forward in the Crown case in this regard are 'arguable'.

17 The directions which the judge will be required to give in this case will be such as are required for the jury to determine for themselves whether the Crown has established an arguable case on either of the two issues that have been raised - fringe benefits tax and deductibility - so that the jury are satisfied beyond reasonable doubt that the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. Subject to the course of the trial, the judge will probably be required to outline the relevant provisions of the statute and identify in the material admitted into evidence the arguments in favour of the liability to fringe benefits tax and those against deductibility, together with the evidence that supports or detracts from the strength of those arguments. The assessment of the evidence - whether in terms of 'arguable case' or 'arguably wrong' - is a matter for the jury.

18 The issue for the jury to determine is whether or not the arguments propounded on either of the two issues identified in the previous paragraph are of sufficient strength to justify the conclusion beyond reasonable doubt that the Commonwealth was in fact deprived of something of value by reason of the issue of the private rulings. It should be noted that the Commonwealth's case in this regard could be made out if the members of the jury determined that the Crown case was of sufficient strength on either the fringe benefits tax issue or the deductibility issue. It would not be necessary for jurors to be unanimous as to which of the two were of such strength.

19 The approach to be taken, already identified in par 13, supra, will constitute the basis for the directions to be given to the jury. It would not be appropriate for the trial judge to direct the jury that, depending on the view they have formed of certain factual matters, the Australian Tax Office did lose something of value - or even that the rulings did put the revenue of the Commonwealth at risk. Such a direction may well be subject to various permutations and combinations of the factual matters, and the direction could lead to confusion. The more usual form of directions to a jury - and the infinitely safer one - is to define the issue which the jury must determine, then explain to them the arguments of both parties in relation to the relevant factual material, and finally conclude that, if the Crown has satisfied them that it has established that particular issue, they may move on to the next issue.

20 In order to produce directions in terms which can easily be assimilated by the jury, their contents should in our view be debated by the parties and tentatively determined by the judge at or before the trial, and reduced to writing for the jurors to use during the summing-up and in their deliberations. Those tentative directions can always of course be revisited before the summing-up in the light of what happens during the trial. Additional assistance by way of elaboration or comment may also be given by the judge during the course of giving the directions which are in writing." 119 Spigelman CJ and Hunt AJA concluded at 670 [26] that the question whether an arguable case exists that the private rulings were wrong is a fact in issue in the trial to be determined by the jury. 120 Their Honours then turned to the question of evidence which was admissible in relation to that issue. Their Honours said at 670-671 [27]-[29]: "Evidence admissible in relation to this issue

27 Related to this issue as to whether the decision is one for the judge or the jury is the admissibility of evidence upon which the decision is to be based. In our opinion, but subject to the Crown being permitted to enlarge its particulars in the light of the decision now given by the Court of Criminal Appeal, there is no bar to the admission of relevant statements by courts or others as to the interpretation of these provisions merely because they may have come into existence after the time when the private rulings were made. What the law was at that time is an objective matter which the Crown must prove. That objective fact has nothing to do with any state of mind on the part of the accused which may be relevant to his mens rea. There is therefore no need to restrict the admissible material to material which was in existence at that relevant time. The issue as to what the law was at the relevant time may be proved by reference to what has since been held to be the law, provided that there has been no change in the relevant statutory provisions in the meantime. It is presumed to have been the law all along.

28 Although the Crown, on its particulars, does not propose to rely on expert evidence concerning this fact in issue, such would be admissible. The ultimate issue rule has been abolished by s 80 of the Evidence Act 1995, and the jury may be greatly assisted by such evidence. There is one caveat to the use to be made of opinion evidence on this issue. That evidence should, so far as is possible, be expressed as being that the Commissioner's case on deductibility and/or fringe benefits tax was or was not correct, rather than that it was or was not arguable.

29 Mason P has outlined the evidence relied upon by the Crown to establish the proposition that the 'arguably wrong' test could be satisfied. It is unnecessary to repeat the material here. It is sufficient to say that, for the purposes of an application for a permanent stay, the material referred to is sufficient to give rise to a real issue as to whether or not the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. We do not, however, intend by these remarks to suggest that the trial judge - particularly in the light of such evidence to the contrary on which the accused may wish to rely in this regard - would not be entitled to form his own judgment on the issue of law we have identified in pars 12 and 17, supra, namely whether or not the case to be put by the Commissioner is sufficiently arguable to demonstrate the possibility that the Commissioner would win a case in which he was allowed to dispute the private ruling." 121 Mason P observed at 673 [35] that the s.29D count had undergone several transformations, both as to its form and the case sought to be proved under it. 122 Mason P touched upon the decision in Essenbourne at 679 [62]: "I discuss Essenbourne below. But it should be stated at the outset that (the reasons for) a Federal Court decision are not themselves evidence. Nothing to the contrary was stated in Petroulias (No 1) or (No 2) , which went no further than pointing to that decision as a well from which to draw ideas that might become the basis of admissible evidence." 123 Mason P then turned at 680 [66]-[67] to certain particulars contained within the Crown Case Statement and then, at 680-682 [68], summarised the evidence which was said to support certain particulars. Given the submissions advanced before me, it is appropriate to set out this part of Mason P's judgment at 680 [68]: "The evidence said to support sub-particulars H(i) and H(v) was placed before Sully J and we were taken to it. It discloses the following (in summary):

(i) On 16 January 1998 a letter was sent to the Commissioner on behalf of Morgan H R Pty Ltd (MHR) requesting a private ruling in relation to the taxation implications associated with a Productivity Incentive Trust Plan which MHR proposed to establish. The letter outlined the structure of the Plan. It asserted the belief: (a) that MHR would be entitled to an immediate deduction for the amounts contributed by it to the unit trust in respect of participating employees; and

(b) no FBT liability to MHR would arise in respect of the issue of units in the trust. This application is said to be typical of 74 applications all of which resulted in identical favourable treatment at the respondent's hands.

(ii) MHR was a company associated with Mr Morgan. The prosecution will seek to prove that Mr Morgan was an associate of the respondent and that the respondent's dishonesty was evidenced by the steps he took to obtain a favourable private ruling in favour of MHR and other associates willing to enter into dishonest arrangements with him. The prosecution will also seek to establish that 'competitors' were given unfavourable rulings at the respondent's instigation in circumstances where there was no legitimate basis for distinguishing between the schemes laid before the Commissioner by the respective applicants for the rulings (see Particulars I and J above). (iii) On 25 March 1998 Mr Lowman Chow, who was an officer of the ATO, provided the respondent with a written opinion in relation to Employee Benefits Trusts (see Particular H(i) above). The opinion refers to the steps of 'a typical EBT' (Employee Benefits Trust). The Crown will seek to prove that the matters summarised by Mr Chow are in fact indistinguishable from those placed before the Commissioner of Taxation in MHR's application for a private ruling. Mr Chow expressed the view that FBT liability would arise. This opinion was supported by detailed legal reasoning and reference to the opinion of a professor set out in detail in the memorandum.

(iv) An email from the respondent dated 15 April 1998 to another officer in the ATO expressed the respondent's own views as to the tax effects of a scheme which was the subject of an application for a private ruling. The applicant in this case was not an associate of Morgan or the respondent, on the Crown case. However, the basic elements of the scheme were identical to those outlined in the MHR proposal, according to the prosecution. The respondent expressed himself as having reached a 'conclusion' that fringe benefits tax was payable and that there were 'also problems with deductibility'. The respondent's reasons for each view are set out. They included express incorporation and adoption of the opinion of Mr Chow.

(v) The Crown also relies on an internal email from the respondent dated 1 June 1998. It is addressed to another officer within the ATO. Once again it is said to concern an application for a ruling on behalf of a 'promoter of [a] similar EBT scheme', not being one of the respondent's associates. The Crown will seek to show that the circumstances of that 'competitor' scheme are indistinguishable from those of the MHR scheme.

(vi) At various dates in 1998 the respondent is said to have assisted in the issuance of several rulings favourable to taxpayers on both the deductibility and FBT issues (Particulars H (iv) - (vii)).

(vii) This Court was informed that the Crown will seek to establish that 74 taxpayers were given favourable private rulings due to the respondent's intervention. It is said that the information on which each ruling was given was identical in substance. In each instance the ruling was favourable to the taxpayer as regards the deductibility and FBT issues. The rulings enabled the taxpayers to claim the avoidance of tax, this in effect being the actual risk to which the Revenue was subjected by virtue of the respondent's conduct.

(viii) There is also evidence to the effect that these particular rulings favourable to taxpayers had a certain 'precedential' effect, at least in favour of persons associated with particular schemes for which favourable rulings emerged. If necessary, the tax advantages claimed or obtained by these persons are also part of the 'actual risk to the revenue' case that the prosecution will seek to prove." 124 Mason P observed at 682 [69]-[70] that the Accused had not advanced a Notice of Contention seeking to uphold grounds which had been rejected by Sully J (including duplicity). 125 Mason P observed at 684 [76] with respect to the reasons of Sully J for granting the permanent stay of the first count: "It may be observed that this did not address the issue earlier stated by the judge as to whether the charge was foredoomed to fail. The nub of the dispositive reasoning was that a fair or just trial could not take place because of the inability to direct the jury that the 'arguments in favour of incorrectness [of the private rulings] were at least arguably correct in law'." 126 Mason P said at 685 [83]-[84] with respect to a Crown submission as to the manner of proof of the deprivation element: "It was alternatively submitted on behalf of the appellant that the Crown could establish that the rulings were 'arguably wrong' by relying on the evidence of the Chow memorandum and the other material referred to above. That material reveals the opinion of officers within the ATO that, with respect to schemes said to be similar to those addressed by the respondent, the respondent's private rulings were wrong, or at least arguably so, as regards both the deductibility and FBT issues. These documents are also said to show that the respondent himself held that view, communicating it to more junior officers in the ATO and applying it to ensure that 'competitor' schemes were given rulings adverse to the taxpayer on the two tax issues.

This submission led to debate as to whether the material was capable of supporting these propositions. The respondent submitted that the material rose no higher than evidencing discussion within the ATO, what Sully J described as 'no more than that the rulings were controversial within the Taxation Office'." 127 At 686-687 [88]-[89], in a passage which the Accused relies upon in the present applications, Mason P said: "A ruling that is incontrovertibly correct in its statement and application of the tax law could not be the instrument of defrauding the revenue, regardless of the dishonesty of the ATO officer involved. As Simpson J put it ([2002] NSWSC 1190 at [43]): 'It cannot be said that a ruling which correctly acknowledges that, in a particular set of circumstances, a taxpayer is not liable for the imposition of a particular tax, confers any benefit upon that taxpayer, or any corresponding disadvantage upon the Commonwealth'. For the purpose of the s29D charge now proffered, the search is for a way of determining whether there was anything of value in the Commissioner's rights to assess and recover tax as affected by the rulings and the way rulings operate in law. If the true legal position at the time was that nothing touching the revenue was lost by issuing the rulings then the charge is not capable of being made out and should be withdrawn from the jury. This would be so whether or not Particular N(v) were included." 128 Mason P said 687-688 [96]-[101]: "Now that the count has reached its 'final' form it is useful to remind oneself that the relevant matter for ultimate proof is whether the respondent's conduct in causing the private rulings to issue 'put the revenue of the Commonwealth at risk'. This allegation of the actus reus is itself a gloss on s29D (albeit well supported by authority). It is potentially misleading to gloss the gloss by focussing on an 'arguably wrong' test.

However, the 'arguably wrong' issue must be addressed, for two reasons. The first stems from the proposition I stated earlier, that an incontrovertibly correct ruling could not be an event that puts the revenue at risk. To say that only arguably incorrect rulings have this consequence is an attempt to capture this idea. I perceive that this may be the thinking behind Particular N(v).

The second and possibly different way in which some kind of arguability issue intrudes is that the Crown has elected to make it part of the case, through Particular N(v). This may have been unnecessary (see par [58] above). But so long as the particular remains as an aggravating feature of the conduct charged it will require attention at trial, not necessarily by way of express jury direction.

It may be dangerous or misleading to use the same label ('arguably correct') in these two senses, at least without confirming the prosecution's intention in averring Particular N(v) as an aggravating feature and also confirming the meaning sought to be advanced by the Crown in this particular.

If all that is involved is arguability of the first type then it seems to me that one is only dealing with whether the count may go to the jury. If the ruling is incontrovertibly correct in law in both its tax aspects there is simply nothing capable of making out the Crown case on the s29D charge. The count should therefore be withdrawn from the jury. But, absent this situation appearing to the trial judge, the count should simply go to the jury according to its terms, without concern about directing the jury to find the rulings were 'arguably wrong' (itself a mere particular).

If, however, an allegation that the rulings were arguably wrong is intended as an aggravating feature of the Crown case (ie if the Crown wants to use the concept otherwise than just in the first sense I have proposed) then an additional issue will be thrown up at the trial. How (if at all) is the jury to be instructed in this particular matter? Is it really another way of looking at the first type of arguability issue?" 129 Having referred to the exceptional nature of the relief by way of permanent stay, Mason P turned to consider whether the foreshadowed evidence was capable of supporting the first count. The President said at 688-670 [105]-[114]: "Sully J did not have to decide what directions to give the jury. Nor does this Court. Naturally, any directions will have to adapt to the case as it develops in the evidence and submissions of counsel. This said, I think it is incumbent that this Court come off the fence on which the primary judge rested when posing his either/or 'conundrum'.

It is productive first to go to the evidence to consider whether it is capable of supporting the particular charge. If it is, then one major plank of the stay conundrum is removed.

That evidence shows that there was, to say the least, uncertainty about the tax effects of employee benefit trust schemes throughout the time of the private rulings issued through the respondent. The application of the law relating to deductibility and FBT to these schemes was a matter of discussion within the ATO. On a clearly available view of the evidence, the ATO (to the respondent's knowledge) had certainly not given up the ghost on these matters. Taxpayers were also apparently uncertain about the issues, evidenced by the many applications for private rulings on these very matters.

Key uncertainties were whether this type of scheme had each of the two benefits of tax deductibility of employer contributions and freedom from FBT. Mr Chow and the respondent thought not, on available readings of the respondent's email of 15 April 1998 and of the proposals in his emails of 15 April and 1 June 1998 to give taxpayer-adverse rulings to 'competitor' schemes. The legal reasons for such outcomes were canvassed in the memoranda, with citation of statute and caselaw.

This was more than an internal ATO debate about the response to give applicants for private rulings. The arguments adverse to the taxpayers' interests that were canvassed in the internal memoranda were about the then current state of the law, its application to the facts hypothesised, and whether the ATO should accept the taxpayer-favourable views advanced by prospective 'Rulees'. In my view, the documents are also evidence (if evidence is required) that the rulings issued at the respondent's instigation had a tax impact in the sense contended for in Particulars A(ii), N(i) and N(ii).

If it is established that the respondent caused the issuance of the private rulings favourable to associate taxpayers on the deductibility and FBT matters, he was arming the 'Rulees' with the practical and legal advantages conferred by s170BB and described by Simpson J in the passage set out above. For favoured Rulees, matters that were debatable or doubtful achieved the status of being 'legally binding on the Commissioner', with favourable tax consequences that the jury could easily conclude likely to happen. For those Rulees, the ATO was henceforth prejudiced in its capacity to otherwise act without restriction to assess and recover any tax payable (cf Particular N(iv)).

This material or evidence is capable of supporting the offence charged unless the rulings were incontrovertibly correct when issued. It is material capable of showing that the opinion was held within the ATO at the relevant time (ie, throughout 1998) that schemes arguably similar to those in question did not carry income tax deductibility for employer contributions and did carry FBT liabilities. The legal chapter and verse on FBT is set out in the email of 25 March 1998, the contents of which the respondent adopted in his email of 15 April 1998 (cf Lustre Hosiery Ltd v York (1935) 54 CLR 314). Given that perception or belief, there was in my view ample evidence or material that the ATO was giving up something of value in issuing taxpaper-favourable rulings.

If a jury accepts the evidence that the 'competitor' schemes were indistinguishable as regards either or both of their deductibility or FBT aspects, the respondent's stated opinion that these had adverse tax consequences in those two aspects is also available as evidence or material out of the respondent's own mouth that the rulings he was procuring in support of 'favoured' taxpayers did not represent the true tax position at the time.

It will ultimately be a matter for the jury to decide if there was the necessary imperilment of the revenue. In my view, the material that has been identified indicates that it would be open for a properly instructed jury to be satisfied of this. For this reason the charge is not foredoomed to failure. In other words, the rulings were 'arguably wrong' in at least the first of the two ways that this issue intrudes into the case. I prefer to state the matter negatively: since the rulings were not incontrovertibly correct (on this evidence and the legal principles to which it points), the count is not foredoomed.

If, however, Particular N(v) states an additional part of the positive Crown case it will throw up the question whether and how the jury are to be directed on an allegation that something was 'arguably wrong' (in law). This particular matter vexed the primary judge. It is not easy of resolution." 130 Mason P noted at 690 [115]-[118] the observation of Sully J that expert evidence might not be admissible as to whether private rulings were arguably wrong. Mason P observed that no such evidence was led at the committal proceedings nor was it foreshadowed in the Crown Case Statement. As will be seen, the Crown did not adduce expert evidence at the trial which proceeded before Sully J and a jury. 131 Mason P said at 693-694 [133]-[139]: "I have already indicated that the putative vice of the respondent's private tax rulings was that they restricted the Commissioner's capacity to act against the taxpayers concerned otherwise than as represented in the rulings (cf Petroulias (No 1) at [64]). Viewed this way, the risk or imperilment was the tying of the Commissioner's hands in 1998, restricting his capacity to contend against favoured 'Rulees' that the situation was other than as represented in their rulings.

It follows from what I have already written that it would be open to the trial judge to inform himself of the state of tax law as it stood when the rulings were issued. If that state of law permitted the Commissioner genuinely to advance a tax outcome in either or both of two tax issues otherwise than as embodied in the taxpayer-favoured rulings promoted by the respondent, then the judge could so direct the jury. The jury would then be directed that, if the factual elements of the Crown case were established, it would be open for them to find the necessary imperilment of the revenue of the Commonwealth. This is the ultimate fact in issue (along with dishonesty).

This approach avoids using 'arguably wrong' as part of the direction to the jury. But it does mean that the 'aggravated' Crown case goes to the jury if the judge has the requisite satisfaction that an aggravated case as alleged is open in law and on the facts. If it is, the judge may craft a direction addressing the elements of the count itself.

As indicated above, the ATO internal emails and memoranda summarised above are capable of being read as containing admissions by the respondent that are at least arguably consistent in 1998 with 'the law' applied to the facts hypothesised as the judge may be persuaded to find it. Indeed, the judge may be assisted by the 'chapter and verse' about the critical issue of the meaning of 'associate' in s 26AAB(14)(a)(iv) of the Income Tax Assessment Act in the Chow memorandum, apparently adopted as correct by the respondent.

The judge may also draw assistance from case law both before and after the rulings in question (see further below as to Essenbourne ). Of course, everyone knows that it is easy to be wise after the event, even in matters legal. Some cases apply settled law, some others settle the law, others unsettle the law. In the present case the critical point of time is when the rulings were issued, because they are the events said to have put revenue at risk. It also needs to be borne constantly in mind that the relevant imperilment under the present formulation of the count is the prejudice to the capacity of the ATO to act contrary to the position of the rulings against 'Rulees' who received the favourable rulings. That prejudice stemmed from the law and practice touching private rulings. It existed unless the rulings were incontrovertibly correct when given.

I have come down on the legal side of the fence in the sense that I consider it to be a matter for the trial judge to make up his or her mind on the legal issue as I have sought to explain it. But the legal issue is a very narrow one: there are critical and associated factual issues that must be left to the jury, along with the ultimate issue of finding the matters averred in the count beyond reasonable doubt.

This does not mean that the judge can necessarily avoid explaining to the jury the legal issues canvassed in the ATO emails, especially the Chow opinion. An understanding of these matters may be important in evaluating the respondent's role in procuring the rulings as well as assessing the separate dishonesty factor. This will not however entail asking the jury to form their own view about the correspondence between the rulings and the true tax position at the time." 132 At 694 [140], Mason P adverted to the decisions of the Federal Court of Australia in Essenbourne, Walstern, Spotlight Stores and Pridecraft and observed: "It may be going too far to say that these cases show that the position advanced by the ATO to the Federal Court in those cases was 'arguable', whether or not it was accepted. But it would be fallacious to infer that an ATO-adverse decision in the Court established that the propositions there advanced by the Commissioner were untenable and unarguable then or at an earlier point of time." 133 After citing portions of the judgment of the Court of Appeal, Mason P continued at 696-697 [146]-[149]: "This extract from Petroulias (No 2) established that:

1. Essenbourne does not preclude the Crown in limine from proving that the respondent's private rulings put the revenue at risk; and

2. Factual issues needing to be explored at trial may distinguish the scheme considered in Essenbourne and the schemes covered by the respondent's private rulings.

The appellant submits that the Court of Appeal concluded that Essenbourne 'established that the issues were arguable and that the primary judge was in error in reaching a different conclusion'. In my opinion, this misstates the reasoning of the Court of Appeal in Petroulias (No 1) and Petroulias (No 2) .

In Petroulias (No 2) the Chief Justice said that Essenbourne did not justify the conclusion that the Commissioner had lost the deductibility issue (see at [34]-[47]). But this did not entail the contrary conclusion that Essenbourne overtook the evidence at committal, removed the need to consider the impact of that evidence or prevented the trial judge from considering 'arguability' at an earlier point of time. This becomes crystal clear in pars [49] and [67] of Petroulias (No 2) .

It is true that Essenbourne was not the knock-out blow that Simpson J had perceived. But it is equally true that the Court of Appeal was flagging that the Crown had to lay the groundwork at committal to show that the rulings had the requisite character as regards either or both of the deductibility or FBT arms. I would therefore reject the Crown submission that Sully J erred in failing to treat Essenbourne as 'relevant and sufficient [evidence] ' to warrant the accused being put on his trial (Crown Outline at par 8)."

The Trial Proceeds 134 Against this background of extensive appellate consideration of the way in which the Crown may seek to establish the element of deprivation in the first count, the trial proceeded before Sully J and a jury. In broad terms, the Crown relied principally upon documents summarised in the judgment of Mason P in the Court of Criminal Appeal. No expert evidence was adduced by the Crown in the manner identified, as a possible approach, in the judgments of the Court of Criminal Appeal. A number of senior ATO officers with considerable experience in the field were called as Crown witnesses for various purposes. The Crown did not seek to adduce expert evidence from any of these witnesses on the arguable case issue. 135 A number of the ATO officers called by the Crown were cross-examined on behalf of the Accused with respect to issues which may bear upon the deprivation element. For example, Mr Lowman Chow, the author of several memoranda written in 1998, was cross-examined with the view to demonstrating that he had limited knowledge in the field and that he relied upon a number of sources in preparing his papers which he appears to have misunderstood and misquoted. This cross-examination, to which I was taken during submissions on the present application, was said by the Accused to undermine, if not destroy, any objective foundation for a suggested arguable case which the Commissioner of Taxation may have had. 136 Mr Clelland SC submitted, in summary, before me that the jury was not informed of the objective state of the law and that, accordingly, they were not in a position to assess the strength or otherwise of the arguable case which the Crown submitted existed in this case and of which it had been deprived. According to the defence submission, all the jury was left with was a series of ATO documents (some of which were written by the Accused) containing arguments which could not be assessed in any meaningful way by the jury. 137 I was informed that there was no mention in the presence of the jury of the line of authority commencing with Essenbourne in the Federal Court of Australia. The relevance or otherwise of Essenbourne was touched upon during submissions made in the absence of the jury. At one point, Mr Clelland SC foreshadowed an intention to cross-examine Mr Chow by reference to the decision in Essenbourne, but the topic was placed to one side (T577). The Crown closed its case without any reference to Essenbourne or any agreement as to the way in which any statements or principles emerging from Essenbourne might be placed before the jury.

Sully J's Judgment of 27 June 2005 138 At the close of the Crown case, the Accused sought a directed verdict of acquittal on the first count. On 27 June 2005, Sully J refused the application. With respect to the element of deprivation, Sully J said at 19.5: "The decision of the Court of Criminal Appeal essays authoritative guidance as to the principles underpinning this element of the current charge. Insofar as the essential reasoning of the Court is clear, then that reasoning is now binding upon me.

From that point of departure, it is convenient to note particulars N(iv) and N(v) in the Crown case statement. Those particulars are: '(iv) In each case, the revenue of the Commonwealth was at risk because of the prejudice to the right or advantage of the Commissioner of Taxation to otherwise act without restriction to assess and recover any tax payable.

(v) The PBRs [private binding rulings] and AOs [advance opinions] issued at the direction of Petroulias were arguably wrong.' It was submitted for the accused, as I followed the submission, that those two particulars require that the Crown prove, first, a 'lost opportunity' case in order to make good the particular N(iv) thought and, secondly, an additional 'arguably wrong' element in order to make good the particular N(v). I do not agree. It is, I believe, quite clear that all three Judges in the Court of Criminal Appeal thought that the two particulars could not stand individually and independently because any attempt so to stand would introduce an impermissible ambiguity into the true nature and scope of the offence that has actually been charged. That potential problem was resolved by the Court's holding that the two particulars must be read together; and that when so read they particularise only one relevant type of defrauding, namely, what has come to be termed an 'imperilment' type of case. A second submission which was put for the accused drew attention to a number of expressions in the joint judgment of the Chief Justice and Hunt AJA, of which a representative example occurs as followed in [12]: '[12] The arguable case to be put by the Commission must first demonstrate the possibility that the Commissioner would win a case in which he was allowed to dispute the private rulings. Is the case which the Commissioner wishes to put one which is capable of success ?' (emphasis added).' It was submitted that the italicised sentence was 'presupposing proof that there was a position taken and wishing to be put by the Commissioner'. It was submitted that there is no evidence in hand that is capable of affording that proof.

It seems to me that the answer to that submission is provided by Mason P in [89] of his Honour's judgment: '89 For the purpose of the s29D charge now proffered, the search is for a way of determining whether there was anything of value in the Commissioner's rights to assess and recover tax as affected by the rulings and the way rulings operate in law. If the true legal position at the time was that nothing touching the revenue was lost by issuing the rulings then the charge is not capable of being made out and should be withdrawn from the jury. This would be so whether or not Particular N(v) were included.'

Turning from those particular submissions to the broader question of the capacity of the evidence which is now in hand to establish - if accepted by the jury - the element of deprivation, I propose to proceed upon the basis of the process of reasoning of Mason P as explained in [106]-[113], inclusive, of his Honour's judgment: [Sully J here set out paragraphs [106-[113] in the judgment of Mason P which are set out above] Mason P was assessing, of course, evidence which had been foreshadowed rather than actually adduced, but it seems to me that the evidence now in hand is not materially different from the foreshadowed evidence which Mason P discussed. I see nothing in the joint judgment that is incompatible with the cited portion of Mason P's reasoning. That being so, I am of the opinion that there is a case fit to go to the jury on the deprivation element of the charge.'

Sully J's Judgment of 19 July 2005 139 Senior counsel for the Crown and the Accused then addressed the jury over a number of days. On 15 July 2005, Mr Clelland SC made a further application for a directed verdict of acquittal on the first count. On 19 July 2005, Sully J refused the application. The application related solely to the element of deprivation. Sully J adverted to the decision of the Court of Criminal Appeal and said at paragraphs 28-29: "28 The principal issue in Petroulias was whether the practical implementation of that approach was one entailing the resolution by the trial Judge of a question of law; or one entailing the resolution by the jury of a question of fact. The latter alternative is the ratio, or at the very least a ratio, of the decision. No more need now be said, therefore, upon that topic.

29 The logical issue that thereupon arose, namely how a jury is to be directed in such a type of case, received close attention in the majority judgment. I take myself to be bound by the following propositions, each of which I take from the discussion that is found in paragraphs [16] - [20] of the joint judgment: [1] I am not required to direct the jury as to what the law is in relation to FBT; in relation to the issue of deductibility as that expression is used in the present trial; or in relation to what has come to be described in the present trial as 'the associate test'.

[2] I am to take as the relevant point of departure an outline of the evidence which, if accepted by the jury, identifies arguments favouring the position of the Commissioner upon each of the FBT and the deductibility issues.

[3] If there is evidence which, if accepted by the jury, would strengthen the arguments to which [2] above refers, then I am to tell the jury what that evidence is. If there is evidence which, if accepted by the jury, would weaken those arguments, then I am to tell the jury what that evidence is.

[4] I am in no way to intrude into the assessment of the evidence to which [2] and [3] above apply. That task is exclusively one for the jury.

[5] Having thus explained the relevant evidence, I am to direct the jury: 5.1 that the issue for them is whether the arguments mentioned in [2], as either strengthened or weakened by any available evidence of the kind mentioned in [3] above, justify the conclusion, reached beyond reasonable doubt, that the issue of the relevant PBR's has in fact deprived the Commonwealth of something of value;

5.2 that they do not necessarily have to answer that question affirmatively on both of the questions of FBT and deductibility before they can return a verdict of guilty on Count 1. It would suffice for them to answer 'yes' to both questions; for them to answer 'yes' to either question; or for some of them to answer 'yes' on one of the two questions, and for the rest of them to answer 'yes' on the other of the two questions." 140 Sully J turned to summarise the submissions made on behalf of the Accused in support of the application. As these submissions were, in substance, repeated before me it is appropriate to set them out in this judgment. Sully J said at paragraph 30: "These have been recorded at T 3093 (30) - 3096 (18). I take the essential propositions there advanced to be these:

The basic question to be decided is whether the Commissioner had an arguable case to put that the relevant PBR's were wrong.

An arguable case is one which satisfies the description given in paragraph [13] of Petroulias . I have quoted it previously herein.

Paragraphs [14], [15] and [17] of Petroulias establish that in the present context a reference to a plausible or apparently reasonable argument is a reference to 'an argument of law that must be proven by the evidence'.

On the deductibility issue: 4.1 The only evidence 'pointed to by the Crown in their final address' was an email: Exhibit C 52.

4.2 There is no evidence capable of establishing that the arrangement that was being considered in Exhibit C52 was relevantly identical with the arrangements covered by the PBR's.

4.3 Insofar as Exhibit C52 evidences a point of view on the part of the accused, that point of view goes only to 'the state of mind on the part of the accused which may be relevant to his mens rea'. It cannot tend to the proof of the relevant objective fact.

4.4 No Crown witness was asked by the Crown to express a view as to the correctness of the accused's point of view as expressed in Exhibit C 52.

4.5 One Crown witness, Mr. Forsyth, was asked whether he thought that the relevant PBR's were correct on the issue of deductibility. He said that he thought they were correct. He was giving expert opinion evidence; and that evidence is both unchallenged and uncontradicted.

On the FBT issue: 5.1 The Crown case relies upon the opinion of Lowman Chow.

5.2 That opinion is 'an amalgam' of opinions expressed separately by a Miss Nadia Potas; a Professor Deutsch; and a Mr. Carnovale of counsel.

5.3 The opinion of Miss Potas dealt with a situation which was fundamentally different from that with which Mr. Chow was dealing.

5.4 The opinions of Professor Deutsch and of Mr. Carnovale were quoted by Mr. Chow selectively and in a way that misrepresented what they actually said.

5.5 Mr. Forsyth, previously mentioned herein, confirmed Mr. Carnovale's opinion, which was that FBT did not apply.

5.6 Mr. Forsyth gave, otherwise, evidence that the Productivity Incentive Trust Plan arrangement could not logically attract FBT. This was unchallenged and uncontradicted expert evidence.

5.7 Mr. d'Ascenzo gave evidence to the same general effect.

It is a fatal flaw in the Crown case that the Crown did not adduce evidence from any witness who was called specifically to give properly qualified expert evidence. It turned out, as a result of cross-examination only, that Mr. Forsyth was so qualified; and his evidence undermines the very foundations of the Crown argument on the FBT issue." 141 His Honour then turned to his reasons for decision and set out his views and conclusions concerning the deductibility and FBT questions (paragraph 31): "30. As to the deductibility and the FBT questions, my views and conclusions are as follows: 1 The Crown case depends upon a combination of two categories of evidence namely: 1.1 Evidence said to justify the drawing of an inference that throughout the material times there was evolving within the ATO a body of experienced opinion to the effect that the emerging tax-planning technique of EBA's was generating real questions about both the immediate deductibility of the employer's initial contributions, and the applicability to those contributions of FBT.

1.2 Out-of-Court statements of the accused of which the Crown argues that they evidence admissions by the accused that the Commissioner did have a logically plausible case to put on each of the deductibility and FBT issues." 142 Sully J then identified the body of evidence described in sub-paragraphs 1.1 and 1.2 (pages 13-21) comprising the evidence of Mr Gardiner, Mr Smith, Mr Chow, Mr Ackhurst and emails and documents written by the Accused.

143 Sully J then proceeded to consider and reject each of the submissions advanced on behalf of the Accused in support of the application (paragraph 31, subparagraphs 11ff):

"11. As to the submissions noted at 4.2, I do not agree that the arrangement which Mr. Ackhurst considered, and resolved in terms of which the accused explicitly approved, has not been shown to be substantially the same as the arrangements to which the relevant PBR's apply. A comparison can be made readily by the jury of the arrangement, the relevant documents of which comprise Exhibit C 149; and the arrangement, being a representative example of the Productivity Incentive arrangements, the relevant documents of which comprise Exhibit C 28. It is, of course, true that the two applications are not identical in wording; but in my opinion, if one looks at annexures 'W' and 'X' to Exhibit C 149, and sets the substance of annexure 'W' beside the corresponding case report in Exhibit C 28, then it would be well open to a reasonable jury to find that there was no difference of substance between the two schemes. And yet, Mr. Chow, with the accused's encouragement, ruled that in the one case the contributions were deductible and there was no FBT liability; while Mr. Ackhurst, with the emphatic support and encouragement of the accused, gave a diametrically opposed ruling in the other case.

I do not accept the submissions summarised at 4.3 above . First, there could be no rational doubting that the accused expresses in this email, - variously Exhibit C 52, and annexure 'R' in Exhibit C 149, - a decided point of view, and a carefully reasoned one, in support of the non-deductibility of contributions, and of the applicability of FBT. The submission that these expressions of reasoned viewpoints, which are plainly intended to be taken seriously by Mr. Ackhurst, have no relevance save as to the accused's possible mens rea, is in my opinion unsound. It is unsound because it skates over the reality of the accused's own position as at 15 April 1998, the date of the email. Admission 10 of the accused's `Admissions' has him, notwithstanding some obvious self-serving glosses, as being at that time directly responsible for the strategic intelligence operations then conducted by what was then the Strategic Research & Analysis segment of the ATO. In addition to that material, there is an abundance of evidence from which the jury could find reasonably that the accused was, in Public Service terms, a high flyer who was seen as having significant professional qualifications, and experience and contacts, in the relevant areas of taxation law. It would certainly be open to a reasonable jury to find, in my opinion, that the accused was, and was known in the ATO to be, vigorously and forthrightly concerned in the evolution of departmental policy in the area of EBA's.

The submission 4.4 as summarised ties in with the accused's broader complaint about the absence from the Crown case of specially and specifically called expert opinion evidence. The submission appears to be that there are things said in the joint judgment in Petroulias that indicate a view on the part of the Chief Justice and of Hunt AJA that the absence of such evidence must be fatal to the Crown case. I do not agree. First, that is not a proposition that can be found anywhere in the relevant paragraphs of the joint judgment: see [27] - [29] inclusive. I accept, of course, that it is stated in terms in [27] that, ' (w) hat the law was at that time is an objective matter which the Crown must prove'. Their Honours are not, however, prescriptive, or indeed restrictive as to the permissible means of that required proof. I see no reason to read into the joint judgment a proposition that relevant admissions by the accused himself; or, indeed, relevant opinions falling short of admissions but made by someone with high, and highly relevant, qualifications could not be so admissible. I accept, of course, that paragraph [28] of the joint judgment holds that expert opinion evidence would be admissible. That is said, however, not in the sense of absolutely mandating such evidence; but in the sense, rather, of expressing disagreement with the view, expressed in the first instance judgment, that such evidence would not be admissible.

The submission 4.5 as summarised, raises the topic, crucial to the present application, of the effect of evidence given in the Crown case by Mr. Stuart Forsyth. Mr. Forsyth was not called by the Crown as an expert witness; but he presented as a well qualified and very experienced ATO official, especially in the field of FBT. He was head of a specialist FBT cell. It is undoubtedly the case that Mr. Forsyth said in cross examination that the Productivity Incentive Trust Plan, as he had understood it, had been seen by him as permitting a proper deduction of employer contributions; and as not giving rise to any FBT liability on those contributions. It would be appropriate for the jury to be reminded of this evidence, and to take it into account as detracting from the Commissioner's preferred position on those two issues. It is, I think, also clear that Mr. Forsyth, having a particular practical engagement with the area of FBT, saw real practical problems arising from a decision to levy FBT on employer contributions of the relevant kind; and thought that the approach which was ultimately propounded in the draft Taxation Determination which is in evidence as Exhibit C 72, did not really advert to, let alone resolve, those practical problems. Mr. Forsyth's position on the issues of deductibility and of FBT seems to have been that they were related in a way that is explained in the following excerpts from his cross-examination: 'Q Firstly, the FBT cell disagreed with the analysis contained in Mr. Lowman Chow's various issue papers? A. Yes.

Q. Was it the case that the FBT cell was taking this stance: if what you're trying to capture are these abusive arrangements, why don't you go to deductibility? Have a look, for example, at whether the contribution is unreasonable? A. That was certainly the view we pushed. There was a different view. I mean, there's scope for different views on these topics.

Q. Can I suggest in these various discussions, cell meetings and so forth between FBT and SRA, the essential topic was how are you going to come up with a solution that permits the legitimate employee benefit trust arrangements to be maintained, and yet strikes down the abusive arrangements? A. We were - I don't recall dealing with quite those terms but we were certainly keen not to go to a position where contributions of that nature had to be subject to FBT because of our history and the fact that we knew it could cause unintended consequences in other areas whenever an employer put money into any form of trust for the long term trust benefit of employees, and we were right because it has caused other difficulties in other areas of law.

Q. What the Fringe Benefits Tax cells were promoting was either: have a look at the deduction and see, for example, is it truly a deduction in accordance with, it would have been 8 - 1 of the Act at that time, is it truly incurred in gaining or producing your assessable income? A. Yes.

Q. Rather than dumping the year's profits into a Trust? A. And essentially we would have said, argue 8 - 1, argue Part IVA, they're in the same cases but don't assume you are going to win on the 8 - 1 and don't assume you're going to lose either. There is some authority in the case of Gandy Timbers. I can't remember which Court it was, it may have been Federal Court, that said a payment of that type was not deductible in those facts.' [T 719(5) - (45) ]

In re-examination Mr. Forsyth gave the following evidence, which seems to me to amplify further, and significantly for present purposes, the reasons for his dissatisfaction with what he saw as an unduly narrow focus of the draft taxation determination on the 'associate' test: 'A. Well, I just felt that something more comprehensive in terms of indicating where the Commissioner had problems other than the associate test, indicating a desire to argue deductibility, to test the deductibility, basically saying to the scheme promoters that 'If you don't already have a private ruling you're not going to get one'. That sort of thing would have been a more holistic policy and would have been a clearer indication that we were actually going to argue their particular fact circumstances. By concentrating on 'associate' I felt it caused us difficulties in other places and interpretation difficulties. We had a long history in FBT of, I guess, trying to avoid the problems we had in 1995. That was what I was told. We really didn't want to tag the contribution under FBT except where we had to, if you look, because it caused us other difficulties in other areas. Q. When you say 'we' to whom are you referring? A. The cell-type approach. I mean, the law is the law, but as you can appreciate, when you get into some of these areas, there are alternate taxing points and the Commissioner sometimes has to pick between alternate arguments and go with the one that produces the closest outcome that the law intends. So there is some scope to interpret it.' [T 728 (10) - (37)] 14. [sic] It seems to me that the upshot of the whole of this evidence is that Mr. Forsyth, notwithstanding what he had said about the Productivity Incentive Trust Plan arrangements, did not regard his view about deductibility as being in any sense definitive; but saw that issue as providing a more practical focus for challenging EBA's than was provided by focusing on FBT liability.

I make the additional observation concerning Mr. Forsyth's evidence that, even were the jury to be instructed that Mr. Forsyth should be regarded by them as an expert witness whether in the FBT area and in the deductibility area, or only in the FBT area, it would still be necessary to instruct the jury that they were not to be simply and uncritically overborne by expert evidence so as in effect to abdicate their own exclusive province and prerogatives as sole judges of any disputed question of law.

As to the submissions summarised at 5.2, I do not think that Mr. Chow's position papers can be fairly dismissed with the pejorative tag of 'amalgam'; albeit they drew undoubtedly upon other expressed opinions. Even without recourse to those other opinions, Mr. Chow's papers expose a process of reasoning as to which I am not persuaded that it is so manifestly untenable that it could not be reasonably propounded by the Commissioner in an appropriate test case. I do not believe that a fair reading of Mr. Forsyth's evidence entails necessarily that he thinks that Mr. Chow's analysis of the 'associate test' is wrong in principle. Mr. Forsyth's problem seems to be, rather, that whether Mr. Chow's position be correct or not in principle, its practical application would entail such difficulties in the FBT area as would more than warrant a search for an alternative method of dealing with EBA's that are seen to require some tightening up of the ATO approach to them. I think that there is force in the submissions summarised at 5.3 and 5.4 above; but I do not believe that they alter the substance of what I have written otherwise in the present paragraph.

I accept, too, that there is force in the submissions summarised at 5.5 and 5.6 above, but subject to what I have said earlier about Mr. Forsyth's evidence.

Mr. d'Ascenzo, the Second Commissioner of Taxation, gave evidence of the Public Rulings Panel discussions that preceded the draft Taxation Determination earlier herein mentioned, Mr. d'Ascenzo said that there had been a panel view to the effect that a trustee was an associate, a conclusion pointing towards the applicability of FBT. I agree with the submission that the opinion thus expressed by Mr. d'Ascenzo was said by him to be one step along the way towards a final resolution of the question of the applicability of FBT to employee benefit schemes. I do not see, however, why that qualification cuts down the availability, in aid of the general position which the Commissioner would wish to take in a test case, that FBT is in fact payable upon the relevant kind of employer contributions. It seems to me that a reasonable jury might well take the view that if it is looking to see what evidence there is either supportive of or unsupportive of the Commissioner's basic argument that there is a lawful liability to FBT, the jury could find some support for the Commissioner's position in the fact that a very high level and high powered public rulings panel thought that, in principle at any rate, the thrust of Mr. Chow's view about the 'associate' test was correct.

For the whole of the foregoing reasons I have come to the conclusion that, as to the deductibility and the FBT issues now relevant, there is available to the Crown a plausible argument for the propositions that the relevant employer contributions are not deductible, and that the contributions are liable to FBT. I am unpersuaded that any of the countervailing considerations upon which the present application rests constitute more than arguments which the jury can consider in connection with the ultimate issue for them, namely, whether the plausible arguments upon which the Crown relies satisfy them beyond reasonable doubt that the Commissioner, representing the Commonwealth, having been prevented by the relevant PBR's from litigating those arguments against the rulees of those PBR's, has been deprived thereby of something of value." 144 For the detailed reasons reproduced above, Sully J refused the second application for a directed verdict of acquittal on the first count.

Directions to Jury Concerning Element of Deprivation 145 On 21 July 2005, Sully J commenced his summing up to the jury. His Honour provided written directions to the jury concerning a number of issues including an 11-page document containing directions of law on the first count (MFI105, Document 5). The written directions concerning the element of deprivation were in the following terms (pages 5-10): "3. That the consequence of the issue of the relevant rulings and opinions was that the Commissioner of Taxation was deprived of something of value . The Crown does not say, and does not therefore have to prove, that there was an actual loss to the revenue. The Crown case is that the contingent effect of the rulings and opinions was such as to imperil, that is to say to put at real risk, the revenue of the Commonwealth; and that the Commissioner has lost something of value in that the rulings deprive him of the means of avoiding that risk.

The contingent effect of the rulings and opinions depends upon their legal force and effect.

It is not controversial in this trial that at all material times: (a) a private binding ruling was recognised formally by certain provisions of the Income Tax Assessment Act of the Commonwealth. That formal recognition entailed that a tax payer to whom a ruling had been given by the Commissioner of Taxation could arrange aspects of his financial affairs so that they fell four-square within the terms of the rulings. In such a case the Commissioner of Taxation had to assess the tax payer's liability to taxation in conformity with the ruling. If the Commissioner tried to assess the tax payer's liability as though the ruling did not exist, and so tried to assess at a sum greater than would be payable according to the ruling, then the tax payer could resist the Commissioner's assessment, claiming the protection of the ruling. In that event the Commissioner would have to assess the tax payer's liability at an amount less than would have been proper had there been no ruling. (b) A private binding ruling although issued to the particular applicant for the ruling, and in connection with a particular financial arrangement put forward by that applicant, would be regarded by the Commissioner, in the interests of fairness and consistency, as applying also to any other substantially similar financial arrangement entered into by a tax payer other than the particular applicant for the ruling. (c) An Advance Opinion is not regarded by the Commissioner as binding him in the same way as a PBR. The Commissioner will normally regard himself bound as between himself and the particular taxpayer to whom the AO has been given. The Commissioner will not regard himself as bound as between himself and any other taxpayer. Even in the case of the particular taxpayer to whom the AO has been given, the Commissioner will regard himself as being free to depart from his AO in certain circumstances which are set out in relevant notifications issued from time to time by the Commissioner. Ex.C1 is an example of such a notification. (d) Neither an advance opinion nor a private binding ruling, but particularly a private binding ruling, makes the law. That is the prerogative of Parliament and not of the Commissioner of Taxation. (e) Neither an advance opinion nor a private binding ruling, but particularly a private binding ruling, establishes what the relevant law actually is. The resolution in a particular case of a dispute about what the law actually is, is the prerogative of the Courts, and not of the Commissioner of Taxation. (f) What is done by the issue of an advance opinion or a private binding ruling, but particularly a private binding ruling, is to record a view of the Commissioner as to the way in which, in his opinion, the current state of taxation law requires him to assess to taxation the particular proposal that a particular tax payer has submitted as the subject matter of a requested advance opinion or private binding ruling. (g) If the Commissioner so records an opinion or a ruling that is, as it happens, plainly correct as a matter of law; and would be so characterised by a Court in the event of any dispute about the opinion or ruling; then the issue of the opinion or the ruling, even if obtained by dishonest means, does not cause the Commonwealth a loss of revenue, because the Commonwealth's entitlement to tax the particular tax payer was the same with the correct opinion or ruling as it would have been without the correct ruling or opinion. (h) If, to take the polar opposite view, the Commissioner states on the public record an opinion or a ruling that is, as it happens, plainly incorrect as a matter of law; and would be so characterised by a Court in the event of any dispute about the opinion or ruling; then the issue of the opinion or ruling, whether obtained honestly or dishonestly, has caused a risk of loss to the Commonwealth revenue. What is more, the risk of loss is a real risk; because the relevant and incorrect opinion, or the relevant and incorrect ruling, compels the Commissioner to assess the protected tax payer's liability to tax at a figure which is lower, because of the binding effect of the ruling or opinion, than it should be, and than it would be were it not for the binding effect of the opinion or the ruling. (i) In the present trial the facts and circumstances upon which the Crown relies do not raise a case falling within either of (g) or (h) above. The present trial concerns private binding rulings and advance opinions of which the Crown argues that they are neither plainly correct in law - as in (g); nor plainly incorrect in law - as in (h). The Crown argues for an intermediate position .

The definition of that intermediate position, and your approach to the assessment of that intermediate position, should focus upon the following sequence of questions and associated directions:

1 are you satisfied beyond reasonable doubt that the Commissioner, if he were allowed to dispute the relevant PBRs in Court, would have an arguable case to put on either the deductibility issue; or the FBT issue; or both of those two issues?

what is 'an arguable case'? It is a case for which there is some supporting argument; the argument being apparently reasonable on its face.

what is meant by the expression 'apparently reasonable on its face'? The expression means that the particular argument proceeds by a process of logical reasoning from one relevant fact to the next relevant fact, and so on until a logical conclusion has been reached.

should you not be satisfied that the answer to question 1 above is: yes; then the Crown would have failed to establish the first necessary step in making out a case of deprivation; and you should thereupon acquit the accused.

should you be satisfied that the answer to question 1 above is : yes; then you should ask what evidence there is, if any, that either strengthens, on the one hand; or weakens , on the other hand, the arguable case that you have found to be available to the Commissioner.

you should then look again, in an overall way, at the arguable case that you have found in your answer to 1 above; taking into account any strengthening, on the one hand; and any weakening, on the other hand, that you have identified in dealing with the matters raised in 5 above. In the light of that overall assessment, made exclusively by you as the sole judges of any disputed question of fact, you should answer this question:

is any arguable case which you found, when answering the question at 1 above, to be available to the Commissioner of such strength, in your overall assessment of it, as to satisfy you beyond reasonable doubt that the effect of the relevant rulings and opinions, by depriving the Commissioner of the right to make his arguable case in an appropriate Court, has deprived the Commonwealth, in the person of the Commissioner, of something of value?

should you answer the question at 7: yes; then the Crown will have established the essential element of deprivation. Should you answer the question at 7: no; then the Crown will have failed to establish an essential element of count 1, and you should thereupon return a verdict of not guilty on that count." 146 The written directions concerning the first count (MFI105, Document 5) were handed to the jury (SU75) and Sully J proceeded to give the jury directions concerning the elements of the s.29D offence alleged in the first count. Detailed oral directions were given with respect to the element of deprivation (SU179ff). Sully J took the jury to the categories of evidence with respect to the deductibility and FBT issues to which reference had been made in the judgment of 19 July 2005 refusing the second application for a directed verdict of acquittal on the first count. Reference was made to the evidence of Mr Gardiner (SU198), Mr Smith (SU200), Mr Chow (SU202) and Mr Ackhurst (SU203) (Sully J described this evidence as the "high point of the Crown argument"). The "high point" was an email sent by the Accused to Mr Ackhurst on 15 April 1998 (Exhibit C149). His Honour directed the jury with respect to this document (SU204.8): "You will remember it's the lengthy and very carefully reasoned email strongly endorsing Mr Chow's argument as to the applicability of FBT and adding arguments of the accused's own in further support of that conclusion. You will remember that it quotes relevant statute and case law. It's not, so to speak, something just plucked out of the air, or cobbled together in some obviously hit-and-miss kind of fashion, if I may so describe the matter.

You might consider, but it's a matter for you, that it has all the hallmarks of a carefully thought through and reasoned out point of view on both of the issues which are of concern to you in the present context.

You will notice when you read it carefully that not only does it strongly support Mr Chow's arguments as to the applicability of FBT, but it expresses a view in connection with the deductibility issue where, once expressed this way: 'The way I read the authorities on this point, the initial contribution to establish a trust is an affair of capital and not deductible. It may be different where the expenditure is recurrent.'

You will notice that the email ends with a proposition which you might think could hardly be clearer. It says to Mr Ackhurst: 'It is suggested that the Commissioner must rule against the allowance of the deduction and must state that FBT will apply to the contribution.'

You will remember from our discussion last week, and at any event you will see in annexure S, the relevant material, that Mr Ackhurst did in fact issue a ruling in accordance with the accused's suggestion and that the accused signed off, as it were, on the report with the records: 'Excellent job on this. Yes, I will sign off on this.'

The Crown argument, as I have followed it, is that really you do not have to go much, if any, further than that very document in order to see established out of the accused's own mouth an arguable case, in the sense that we discussed on Friday, on each of the two issues of deductibility and of FBT liability. There is, of course, a defence response to that proposition to which I will come in just a moment when I have finished with the Crown material." 147 The final piece of evidence upon which the Crown relied was an email dated 27 May 1999 from the Accused to Mr Strong (Exhibit C219). Sully J directed the jury in the following terms with respect to this document (SU206.5): "You might think when you read it that it is clear enough that it is conveying to Mr Strong advice about how he, Mr Strong, should deal with some ATO queries about certain employee benefit trust arrangements in which he, Mr Strong, had been involved. The Crown's point is that - is that it is clear on the face of the document that the purpose of the accused so advising Mr Strong was, in effect, to attempt to close off arguments seen as being reasonably open to the Commissioner on both of the issues of FBT and deductibility. That is a matter for you to assess as the judges of the facts when you have a look at the whole of that document.

It's not easy to read because a lot of it is manuscript corrections, so you will need to take your time and read it carefully, but then it will be a matter for you to judge whether you think that is or is not a fair inference to draw as to the purport of the document.

So far as concerns the accused's own involvement in that emerging debate within the ATO about these two issues, I have already spoken about his participation and his attitude as expressed in the relevant minutes in the Moonee Ponds group. I have spoken already about his endorsement of the Chow position. I have spoken about his involvement with Mr Ackhurst. You must keep in mind, or you should keep in mind also the matters to which I took you on Friday when we were looking at those half dozen cases, of which the Ackhurst matter was one, in which in connection with various private binding rulings applications the accused had taken and notified a particular point of view on either or both of the two relevant issues.

So drawing all of that together, the Crown case, as I understand it, really comes down to this: that if you look at what the accused was saying and doing in connection with the developing point of view about those two issues, and if you take into account that he was not simply some administrative assistant but was an official of standing and influence and learning and repute in the relevant parts of the ATO, then the overwhelming inference, so the Crown would argue, is that what he says in his various communications, but in particular in that email to Mr Ackhurst, has to be taken as a serious expression of views seriously entertained by him. That if that is the inference that you are content to draw, then you would be justified, on the Crown argument, in concluding that you had there in black and white a case on each of the two controversial issues, being a case that could satisfy the description that we discussed last week of an arguable case; that is to say, the case moving forward from a stated premises by a series of logical stages to a rational conclusion." 148 Sully J reminded the jury of the defence response to the Crown case with respect to the deprivation element (SU208.5): "The defence response to a Crown case structured in that way takes a number of different approaches. The first is to emphasise consistently that it is important to be careful not to jump too readily to the conclusion that arrangements of the kind which were being discussed in particular in those half dozen or so matters, of which Mr Ackhurst was one, are necessarily the same kinds of matters as are reflected in the Productivity Incentive applications.

The difference it is said, the differences it is said, are such that one can speak of comparing apples or oranges, or apples and pears - I have forgotten which one it was, but one of the two. But, in the end, there is nothing that I can say usefully about that except to say that you will have to do a comparison in the way that I suggested last week and see what you think, bearing in mind that it is futile to try to do the comparison on the basis of an absolute identity of language as between the Productivity Incentive applications and non-Productivity Incentive applications.

You will have to do the comparison allowing for the differences in language and keeping your eyes fixed all the time on those fundamental criteria which I discussed with you last week.

The second thrust of the defence case, I believe it can be said fairly, brings you back again to the argument which the defence puts consistently upon the absence of what the defence has described consistently as opinion evidence; that is to say, expert evidence called from independent third parties in order to give you assistance of a detached and technical kind on these two particular issues of deductibility and FBT liability.

Leaving aside Mr Forsyth, to whom I will come in a moment, I think it would have to be said that there is no expert opinion evidence in that sense; but I remind you of what I said on Friday on the topic of opinion evidence. It applies equally here as it applied when I spoke in a different context about it last week. And that does bring us to Mr Forsyth, upon whose evidence the defence places a great deal of reliance, and asks you to place a great deal of reliance.

Mr Forsyth was not qualified, if one wants to be technical about it, as a detached expert witness, but there is no doubting that he presented as somebody with, I think, 24 years of continuous experience in the ATO.

I am not sure, as I read his evidence, that he pretended to any particular expertise on the deductibility issue, but he certainly, you might think, spoke with some authority on the FBT issue - he having himself been a tax counsel and head of an FBT cell.

I want to remind you, if I may, of just some particular passages out of his evidence. There are not many of them, but his evidence is important to the defence case which I am trying to canvass for you and I would prefer to let him speak for himself. Page 710 and following. He was asked - this is his last question in examination-in-chief by the Crown - this question: 'Q. At any time prior to the release of the draft public ruling in late October 1998 did Mr Petroulias inform you that other favourable rulings had been issued out of SIA concerning fringe benefits tax issues on other employee benefit arrangements such as non-complying super funds, et cetera.'

He answers: 'A. I don't believe so. I certainly don't recall that happening. I recall being surprised when I discovered that in 1999.'

His cross-examination began immediately with this question: 'Q. On that last point, if I might, Mr Forsyth, when you went to SIA in early 1999, was there. an occasion when Mr Petroulias provided you with three folders of advance opinions and rulings?'

He said there was. He was asked whether the rulings and advance opinions related to an entity, either Productivity Incentive Australia or Productivity Incentive Corporation. Mr Forsyth said that some of them did. Some of them, he said, related to other entities. He said there was a lot of rulings in the folders.

He was asked whether some of the rulings in the folders were in relation to Incentive Trust plans. He said they were together with a range of other things. He was asked whether he reviewed those rulings - that is to say, the Incentive Trust Plan rulings - and he said he had done, along with the other rulings about other matters that he had found in the folders, and he was asked this: 'After having reviewed them, did you come to a conclusion as to whether, in your opinion, there was anything problematical about them in the sense of whether they conformed with the Australian Tax Office view?'

He replied: 'They seemed to be following on from the trend in the views that had previously been released that I knew about. The issue at least in some cases was they seemed to continue to issue. After Lowman Chow, for example, was putting out letters saying FBT did apply, we were still issuing rulings saying FBT didn't apply.'

A little later in his cross-examination at page 719, he gave this evidence. He was asked: '...Firstly, the FBT cell disagreed with the analysis contained in Mr Lowman Chow's various issue reports.'

He said, 'Yes.' He was asked this question: 'Was it the case that the FBT cell was taking this stance: if what you're trying to capture are these abusive arrangements, why don't you go to deductibility? Have a look, for example, at whether the contribution is unreasonable?' He answered:

'That was certainly the view we pushed. There was a different view. I mean, there's scope for different views on these topics.'

You might bear that in mind in connection with the instructions that I gave you earlier this morning by way of supplement to those written directions in the jury document number 5, and in particular to the definition in the jury document number 5 of what is meant in the relevant context by 'an arguable case'. The cross-examination continued: 'Can I suggest in these various discussions, cell meetings and so forth between FBT and SRA, the essential topic was how are you going to come up with a solution that permits the legitimate employee benefit trust arrangements to be maintained, and yet strikes down the abusive arrangements?'

Mr Forsyth replied: 'We were - [pause] I don't recall dealing with quite those terms but we were certainly keen not to go to a position where contributions of that nature had to be subject to FBT because of our history and the fact that we knew it could cause unintended consequences in other areas whenever an employer put money into any form of trust for the long-term trust benefit of employees, and we were right because it has caused other difficulties in other areas of law.'

He was asked: 'What the Fringe Benefits Tax cell were promoting was either: have a look at the deduction and see, for example, is it truly a deduction in accordance with, it would have been 8-1 of the Act at that time, it is truly incurred in gaining or producing your assessable income?' He answered simply, 'Yes'. He was asked: 'Rather than dumping the year's profit into a trust?' He answered: 'And essentially we would have said, argue 8-1--' That is the section of the Act as it stood at the time that gave you an entitlement to deduct against assessable income expenditures in earning income -- 'argue part IVA--' That is the Part, you will recall, that had the overarching provision of power in the Commissioner to strike down any arrangement-the real objective of which was simply rampant tax avoidance -- 'They're in the same cases, but don't assume you are going to win on the 8-1 and don't assume you're going to lose either. There is some authority in the case of Gandy Timbers. I can't remember which Court it was, it may have been Federal Court, that said a payment of that type was not deductible in those facts.' In due course, and in re-examination, he was brought back to the topic in these terms:

'...when you were asked about the draft tax ruling...you were asked whether you agreed that it was saying to the industry that there were problems with fringe benefits tax and employee benefit trusts. I think your words were that you saw it as holding up a stop sign?' He said, 'Yes'. I should pause and say this to you for the sake of fairness and completion. He had given evidence that the draft tax ruling, in his view, as somebody experienced in FBT matters, was - my paraphrase - not a happy document because it was too narrowly focused. He said that he felt that simply to concentrate in the way that he thought the draft ruling did on the narrow associate issue - which you will remember was Mr Chow's basic position also - really did not engage, not so much matters of theory as matters of practice, the matters of practice, practicality, let me rather say, to which he had referred in those passages I read to you a moment ago from cross-examination where he was saying, in effect, 'It's important for FBT not to be lost in a fog of theory because it's the kind of tax which, depending upon where and how and when in the relevant chain you impose it, can cause more problems than it solves.' So you need to be careful about the practicable and the practical aspects of it as well as the mere theory.

That is my paraphrase, but that, I think, is a fair summary of what he was trying to say; and it was in that setting that he said that he thought you could really say of the draft ruling that it was holding up something in the nature of a stop sign to the relevant market and saying, 'Just don't become too enthusiastic about these things without remembering that we are looking at them and that there are real problems in particular about FBT.'

So, against that background, he was asked that question that I just read to you, and he was asked: 'But then you went on to say that your point is that that could have been done in a number of other ways. Do you remember saying that?' He said he did. He was asked what he meant by that, and he said: 'Well, I just felt that something more comprehensive in terms of indicating where the Commissioner had problems other than the associate test, indicating a desire to argue deductibility, to test the deductibility, basically saying to the scheme promoters that 'If you don't already have a private ruling, you're not going to get one.' That sort of thing would have been a more holistic policy and would have been a clearer indication that we were actually going to argue their particular fact circumstances." He continued:

'By concentrating on 'associate' I felt it caused us difficulties in other places and interpretation difficulties. We had a long history in FBT of, I guess, trying to avoid the problems we had in 1995. That was what I was told, anyway. We really didn't want to tax the contribution under FBT except where we had to, if you like, because it caused us other difficulties in other areas. He was asked: 'When you say 'we', to whom are you referring?''

He said: 'The cell-type approach. I mean, the law is the law, but, as you can appreciate, when you get into some of these areas, there are alternate taxing points and the Commissioner sometimes has to pick between alternate arguments and go with the one that produces the closest outcome that the law intends. So there is some scope to interpret it.' That, of course, is not by any means the whole of Mr Forsyth's evidence, and, as I told you when I began the summing-up, if in due course, you want the whole of it read back to you, it is yours for the asking, but on this question of FBT, I think those excerpts put - I hope, at any rate, that they put - with fair comprehensiveness what, in the end, his position seems to have been on that issue. That is as much as I want to say to you on that particular topic." 149 On 26 July 2005, the jury retired to consider the verdicts (SU344).

Response to Certain Jury Questions 150 On 8 August 2005, after several days' deliberation, a note was received from the jury in the following terms (TA47): "Your Honour, we are struggling. We have split into two camps and have been so for some time. Both are becoming increasingly intransigent. Where do we go from here?" 151 Sully J then gave the jury a direction in accordance with the principles in Black v The Queen (1993) 179 CLR 44 (TA55-59). 152 On 9 August 2005, further questions were received from the jury in the following terms: "Question 1: If the rulings are correct at law, can the Commissioner strike them down?

Question 2: If the PBR is incorrect in law can the Commissioner strike it down? (Part IVA) Question 3: If a ruling is a blatant tax avoidance mechanism can the Commissioner invoke Part IVA?

Question 4: Could we have a brief outline of Part IVA? Question 5: If the rulings are correct, does that mean the Commissioner did not suffer any deprivation? Question 6: If the Commissioner did not suffer deprivation does that mean acquittal on count 1?" 153 Submissions were made to Sully J concerning the manner in which these questions should be answered (TA59ff). Before me, Mr Clelland SC placed particular emphasis upon Questions 5 and 6. He submitted that correct answers to these questions would have provided the Accused with a substantial prospect of acquittal on the first count. In responding to the questions generally, Sully J provided the jury with an explanation of Part IVA (TA65ff) and distinguished between tax avoidance schemes and Private Binding Rulings (TA69). His Honour took the jury back to the written directions provided with respect to the element of deprivation in the first count (MFI105, Document 5) (TA69.5). Thereafter, Sully J returned to the questions posed by the jury (TA74.2): "Now let me take you back against that background to your first second and fifth questions and say that those questions in the form in which you have asked them seem to me, with respect, to be misconceived because they seem to me to proceed upon the basis that it is part of your task to consider whether the rulings ought to be held to be correct at law. But that is not the question for you. The question for you is: Does the Commissioner have an arguable case that the rulings are wrong; he being unable to test that case in Court because of the effect of the rulings? Ladies and gentlemen, is that much clear? JURY NODDED THEIR ASSENT Think about that and if there are other supplementary things that you need to ask in order to clarify anything that is not entirely clear, of course you are free to do it and I urge you to do it, but I think that is the best that I can do for you in relation to those particular matters. It remains for me only to thank you once again for your hard work during the day and to excuse you until 11 o'clock tomorrow morning. CLELLAND: I think there is a final question that the jury asked that I don't think your Honour has responded to. HIS HONOUR: I thought in fact that I had responded to it in terms. May I read again the last two paragraphs of the supplementary sheet of directions: 'If you are satisfied beyond reasonable doubt that the fair and reasonable answer to that question is: Yes, then the Crown has established the essential element of deprivation. If you are not so satisfied, then the Crown has not established that essential element, and you should thereupon acquit on count 1.' Is that all clear? JURY NODDED THEIR ASSENT" 154 In the absence of the jury, Mr Clelland SC sought further directions in response to Questions 5 and 6 which Sully J declined to give (TA75.6): "CLELLAND: Your Honour, in our submission the jury are entitled to have the question answered - that is the fifth question answered in this way: If they have reached a level of satisfaction on the evidence that the rulings are correct then they are entitled to be told that that means on the Crown case and as a matter of law that the Commissioner did not suffer any deprivation; that such a finding on facts would well and truly cover the issue of whether the rulings were arguably wrong. If their level of satisfaction is that they are correct then the accused is entitled to have a direction to the jury that they should find as a result of that that the Commissioner did not suffer any deprivation. I am asking your Honour to redirect them in those terms. HIS HONOUR: I gather that. Yes, I refuse that application. I refuse it because I consider that the directions both written and oral that have been given to the jury correctly crystallised the questions that they do have to decide and in particular they crystallise, so far as one can do it, the vexed and difficult question of what it is that they have to analyse and decide on the topic of 'an arguable case'. The application is of course recorded for any necessary future reference, but I refuse it." 155 On 16 August 2005, the jury sent a note to the following effect (TA103): "Your Honour we cannot reach a verdict. We have tried and tried and again but we have failed. We have reconsidered and reviewed the evidence with both views becoming myopic. We understand the time, expense and human emotion that has been expended on this case and every juror has done their best in a very complex scenario. We have genuinely tried to reach a unanimous verdict but we cannot. I am sorry." 156 Thereafter, Sully J took evidence form the foreperson in accordance with s.56 Jury Act 1977 (TA104-105). The jury was discharged without verdict (TA105).

Is the First Count Foredoomed to Fail on the Element of Deprivation ? 157 In the course of submissions, both written and oral, I was taken to a range of exhibits and parts of the transcript of evidence of witnesses in support of the defence argument that the first count was foredoomed to fail with respect to the element of deprivation. 158 In broad terms, the submissions made to Sully J in support of the application for a directed verdict of acquittal which was refused on 19 July 2005 were repeated and amplified before me. It was submitted that Sully J erred in not upholding that submission. It was submitted that, properly understood, the judgment of the majority in the Court of Criminal Appeal at 670-671 [27]-[28] required objective evidence of the law, preferably coupled with expert evidence, to support the Crown case on the element of deprivation. It was submitted that the Crown had not adduced evidence, or placed information before the jury in any permissible way, which would leave it open to the jury to be satisfied that this element of the first count had been made out. It was submitted that Spigelman CJ and Hunt AJA at 670-671 [27] had determined that such evidence as may constitute out-of-court admissions of the Accused was incapable of establishing this element of the crime. 159 Mr Clelland SC submitted that the evidence of Mr Chow, properly understood, could not support this element of the first count. The evidence contained in other documents, including draft rulings and emails from the Accused to Mr Ackhurst and Mr Strong, were incapable of supporting the Crown case on this element. The Accused submitted that the Crown case as presented fell short, in various respects, of that summarised by Mason P in R v Petroulias at 680-682 [68]. 160 In these circumstances, Mr Clelland SC submitted that the Crown case with respect to the element of deprivation was hopeless and was foredoomed to fail. He contended that the element of deprivation relied upon by the Crown had become so refined as to be a "detriment of quite [a] nebulous kind" involving a hypothetical opportunity to run a hypothetical case (PT299.40, 2006). He noted that the Crown had acknowledged that it was proposed to rely upon the same evidence at the retrial and that the Crown was not indicating any intention to supplement the evidence already adduced at the first trial. In these circumstances, Mr Clelland SC submitted that the note of caution often sounded when it is submitted that a criminal prosecution is foredoomed to fail (for example, Tolmie) does not apply in this case. It was submitted that I am in a position, at the present time, to assess the Crown case at its highest and that the present application should be measured by reference to the body of evidence already adduced by the Crown at the first trial. 161 The Crown submits that the approach adopted by it at the first trial to the evidence to be adduced in support of the element of deprivation was consistent, and certainly not inconsistent, with the judgment of the Court of Criminal Appeal. That judgment, it was submitted, did not purport to mandate or prescribe the categories of evidence which the Crown could rely upon to establish the element of deprivation. It was acknowledged in both the joint judgment at 671 [28] and the judgment of Mason P at 690 [115] that the Crown had not relied upon expert evidence at the committal proceedings and had not indicated an intention to do so at the trial. If the Court of Criminal Appeal had intended that expert evidence was a mandatory part of the Crown case on this issue, then the Court would have said so. Furthermore, the Crown submits, if expert evidence was essential, the Court of Criminal Appeal would have dismissed the appeal given the absence of an indication from the Crown of an intention to adduce such evidence. 162 The Crown submitted that the judgment of the majority in the Court of Criminal Appeal at 668 [16]-[17] was significant in identifying matters which the trial judge was not required to explain to the jury. It was submitted that the statements of the majority at 671 [29] formed another critical part of the judgment. There, the majority noted, without the need for repetition, the evidence relied upon by the Crown to establish the proposition that the "arguably wrong" test could be satisfied. According to Spigelman CJ and Hunt AJA at 671 [29], it was sufficient to say that, for the purposes of an application for a permanent stay, the material referred to by Mason P was sufficient to give rise to a real issue as to whether or not the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. By this statement, the Crown submitted that the majority endorsed the outline of evidence contained in the judgment of Mason P at 680-682 [68] as being sufficient to give rise to a real issue on this element. 163 The Crown submitted that it had adduced evidence at the first trial in accordance with the summary set out by Mason P at 680-682 [68]. The Crown submitted that the arguments of the Accused criticising features of the evidence of Mr Chow, Mr Ackhurst and others and advancing arguments arising from the cross-examination of Crown witnesses (including Mr Forsyth) represented nothing more than jury arguments on the facts. The Crown submitted that those arguments were advanced to the jury at the first trial. The jury could not agree upon a verdict on the first count. Whatever may be made of these defence arguments, the Crown submitted that they were far removed from demonstrating that the first count was foredoomed to fail by reference to the element of deprivation so as to constitute an abuse of process warranting a permanent stay. 164 The Crown submitted that the evidence of out-of-court admissions of the Accused as contained, inter alia, in his emails to Mr Ackhurst and Mr Strong were relevant and admissible in support of the element of deprivation on the first count. To the extent that the Accused relied upon the statement in the majority judgment of the Court of Criminal Appeal at 670-671 [27] to the effect that "that objective fact [the state of the law] has nothing to do with any state of mind on the part of the accused which may be relevant to his mens rea", the Crown submits that an admission by the Accused with respect to a question of law is admissible, especially given his substantial legal and technical expertise with respect to tax matters. The Crown submits that the evidence is admissible to prove the objective fact as to the state of the law as part of the arguable case test: Lustre Hosiery Ltd v York (1935) 54 CLR 134 at 138-139; Anglim and Cooke v Thomas (1974) VR 363 at 370-372; Director of Public Prosecutions v Parsons (1993) 1 VR 1 at 5; s.81(1) Evidence Act 1995. 165 In determining this ground, I must keep clearly in mind the test to be made out by the Accused. It is, in truth, an exceptional ground in support of an already exceptional remedy. 166 From time to time, some arguments advanced for the Accused in support of this ground had the flavour of submissions made to the Court of Criminal Appeal following a verdict. Of course, I am not exercising an appellate function of determining whether a type of notional verdict of guilty arising from the evidence relied upon by the Crown in support of the first count would render such a notional verdict unreasonable or such that the verdict of a jury could not be supported having regard to the evidence: s.6(1) Criminal Appeal Act 1912; M v The Queen (1994) 181 CLR 487 at 492-495; MFA v The Queen (2002) 213 CLR 606 at 614-615, 623-624. Nor am I exercising the function of a trial judge to whom an application is made for a directed verdict of acquittal in accordance with the principles in Doney v The Queen. 167 The application requires the Accused to satisfy the stringent test identified in Walton v Gardiner, R v Smith, R v Tolmie and R v Jasper and it requires that test to be satisfied before the trial has commenced. It is true that there is available the evidence called by the Crown at the first trial. It is also true that the Crown has indicated that it does not propose to supplement this evidence in any relevant way. That, however, does not make easier the task confronting the Accused in seeking to demonstrate that this exceptional relief ought be granted. 168 I have had regard to the exhibits and transcript to which I was taken during detailed argument by both Mr Clelland SC and the Crown. I have given consideration to the judgment of the Court of Criminal Appeal (against the background of the judgments of the Court of Appeal) and the application of that judgment by Sully J in the context of the trial. I have had regard to the judgments of Sully J delivered on 27 June 2005 and 19 July 2005 rejecting applications for a directed verdict of acquittal with respect to the first count. The latter judgment, in particular, is of importance to the arguments concerning the element of deprivation. 169 I have made an independent assessment of the matters of fact and law touched upon in submissions. I have found the judgments of Sully J, and in particular the judgment of 19 July 2005, persuasive in their reasoning. I have reached the same conclusion as those expressed by Sully J on these issues. 170 I agree with Sully J that the majority judgment of the Court of Criminal Appeal did not hold that evidence of admissions of the Accused was incapable of establishing the deprivation element. The cases relied upon by the Crown support the admissibility of the Accused's admissions, including his opinions concerning issues which were familiar to him and as to which he possessed relevant expertise. Out-of-court admissions of issues of law or mixed fact and law have been held to be admissible: Pitcher v Langford (1991) 23 NSWLR 142 at 147A-B, 160B-E. I stress that I a not, at this point, ruling on the admissibility of this evidence for the purpose of the retrial. I am addressing a defence argument that the first count is foredoomed to fail so that the proceedings should not continue to allow arguments to be advanced in support of the tender of the admissions.

171 I agree with Sully J's observation that the evidence adduced by the Crown accorded in substance with that referred to by Mason P at 680-682 [68] and accepted by the majority at 671 [29] as being sufficient to warrant refusal of the permanent stay application then made by the Accused. I accept the Crown submission that the judgments of the Court of Criminal Appeal did not require the Crown to adduce expert evidence to establish this element. I am satisfied that the approach taken by Sully J at the first trial accorded with the decision of the Court of Criminal Appeal. In my view, the evidence adduced at the first trial supports a prima facie case with respect to this element. I am satisfied that the first count is not foredoomed to fail by reference to the evidence adduced at the first trial in support of the legal element of deprivation. 172 I am not satisfied that Sully J erred in the approach taken at the first trial with respect to the line of authority commencing with Essenbourne. As the majority in the Court of Criminal Appeal stated at 667 [13]: " [I] t is not the function of the relevant tribunal to determine whether either the Commissioner's argument or the taxpayer's argument is correct or even which is more plausible or the more apparently reasonable arguable." 173 The issue for the jury was not whether the argument of the Commissioner was correct nor whether the ruling was correct. For the same reason, I do not consider that any error was involved in Sully J's answer to Questions 5 and 6 from the jury on 9 August 2005. Accordingly, I am not satisfied that the Accused lost a substantial prospect of acquittal by reason of the approach taken by Sully J to those questions. Although that issue is not relevant to the resolution of the present ground, it does relate to the second way in which this issue is raised in support of the broad abuse of process ground, to which I will turn later in this judgment. 174 I refuse the application for a permanent stay based on this ground.

The Element of Causation 175 The Accused submitted that the first count was foredoomed to fail with respect to the element of causation. 176 In the course of refusing an application for a verdict by direction on 27 June 2005, Sully J determined that there was a prima facie case with respect to the element of causation (pages 6-15). Mr Clelland SC submits that the direction given to the jury with respect to causation was erroneous in law and that, in any event, there was an absence of evidence to support this element. 177 A convenient starting point is the written direction given to the jury by his Honour with respect to causation (MFI105, Document 5, pages 3-4): "1. That the accused did some act or acts which caused the relevant rulings and opinions to issue .

1.1 Whatever the accused did does not have to be the sole cause of the issue of the relevant rulings and opinions. 1.2 Neither does it have to be a direct cause. An indirect cause is a sufficient link. 1.3 But whatever the accused did must be something of substance and not something that is merely trivial; or a mere item of historical background, unconnected in any real way with the issue of the relevant rulings and opinions.

1.4 You must keep steadily and clearly in mind that in deciding whether the Crown has proved beyond reasonable doubt this element of causation, you are not answering a question either of philosophy or of science. You are using your common sense in order to reason to a practical conclusion about a practical question, always bearing carefully in mind that the purpose of what you are doing is to decide an essential aspect of the alleged responsibility of the accused for a serious criminal offence." 178 It was submitted for the Accused that this direction was erroneous in that a direction was not given in terms of Royall v The Queen (1991) 172 CLR 378 at 411 that the actions of the Accused must amount to "a substantial or significant cause" of the issue of favourable rulings and opinions. The Accused submitted, further, that directions should have been given with respect to the concept of innocent agency in accordance with R v Franklin (2001) 3 VR 9 and Pinkstone v The Queen (2004) 219 CLR 444 given that the rulings and opinions were not issued by the Accused himself, but by other ATO officers. 179 The Crown submitted that the directions on causation were correct in law. In any event, the Crown submitted that there was ample evidence to support the element of causation so that the present application by the Accused ought be rejected. Any argument concerning appropriate directions of law with respect to this element would be a matter for submissions, and an appropriate determination by me as the trial judge, during the course of the trial. 180 For the purpose of the Accused's foredoomed to fail argument by reference to the element of causation, it is appropriate to confine attention to the question of evidence capable of supporting that element. The Accused seeks to rely upon the suggested misdirection to the jury in support of the broad abuse of process ground to be considered later in this judgment. The Accused submits that there was a loss of a substantial prospect of acquittal at the first trial flowing from this alleged misdirection. 181 The first count alleges that the Accused defrauded the Commonwealth by putting the revenue of the Commonwealth at risk by causing Private Binding Rulings and Advance Opinions to issue to taxpayers by dishonest means. The rulings and opinions in question were issued by a number of ATO officers, namely, Michael Charles, Lowman Chow, James Targett and Emmanuel Aivaliotes. It was, in fact, Mr Aivaliotes who issued the relevant Private Binding Rulings. 182 The submission of the Accused before me focused entirely upon the evidence of Messrs Charles, Chow, Targett and Aivaliotes. It was noted that the Crown did not contend that any of these persons were involved criminally as accomplices of the Accused. It was submitted that each of these officers had given evidence at the first trial to the effect that the rulings and opinions which they issued were issued because they believed them to be correct as a matter of law and that they were in accordance with the ATO position or view on those matters. 183 Mr Clelland SC referred to the Crown closing address in which Mr Aivaliotes was said to have acted as a "puppet" of the Accused in issuing the relevant rulings. It was submitted for the Accused that the evidence of Mr Aivaliotes was entirely inconsistent with him having acted as a "puppet". Rather, it was submitted that he had legal qualifications and had conducted his own research with respect to the applications for rulings. He voluntarily issued the rulings because he believed that they were correct and in accordance with the ATO view. It was submitted for the Accused that the chain of causation was broken by the voluntary actions of Mr Aivaliotes. This was not a case where an innocent agent had been used to, for example, bank a forged or stolen cheque on behalf of the Accused. According to the Accused, Mr Aivaliotes was a properly authorised ATO officer dealing with a proper application for a ruling and he delivered a proper response to it based on ATO precedent. It was submitted for the Accused that Sully J should not have permitted the case to go to the jury, on the issue of causation as no reasonable jury properly instructed according to law, could conclude that the Crown had made out its case on causation. 184 The written submissions of the Accused before me (MFI1, pages 39-40, paragraph 120) set out the direction which the defence sought at the trial, but which his Honour declined to give. It was submitted before me that the acts of the Accused did not bring about the issue of the rulings and opinions - it was the intervening acts of the officers who had issued the relevant rulings and opinions. 185 The Crown approached this issue at trial, and before me, upon the basis that there was evidence in the Crown case which touched the element of causation extending beyond the bounds of that given by the four ATO officers. The Crown submitted that light was shed on the activities of the Accused, and his motivation for those activities, by statements made by him in the course of a recorded interview with Federal Agents on 24 March 2000. In the course of that conversation, the following was said ("DW" is Federal Agent David Wildman and "NP" is the Accused) (Exhibit C199, pages 8-9): "DW: Do you have a relationship with PIC? Either PICs? NP: What do you mean, how many? Oh Hong Kong it is..OK DW: The other one? NP: Yes I do know the one, yes I know the one. You interviewed my exwife Regina? DW: She was spoken to this morning. NP: I helped her doing her HR, she was doing her masters degree so I helped her write her masters degree as a result I learnt a lot about HR and my philosophy is this is going to be a growing area, a growing market DW: Right NP: If you defer money into a trust you get a tax deduction that you don't have to pay for much later DW: Yep OK NP: That wasn't really a tax scheme, now then the offer came to go to the ATO so I mean I was really interested in going along with all of this as a business, I thought it was a fantastic business, urn then I went to the ATO. I went to the ATO and asked them the ATO view and this is all in the ATO internal memos, I was asking around, `is this thing, do we still have this position ' DW: The position for? NP: Oh the technical, legal position, is the way we treat the law DW: Righto OK NP: Now if this is the way we treat the law and we've done it since 1992 DW: Right NP: Then it doesn't matter if I give one, a million or sixteen million advanced opinions or rulings, to my father my brother or anybody else, because if that's how we treat the law then that is the law, as far as the ATO is concerned, so why should my brother be treated any disadvantageously, or Nick Panos or anybody else so I had no problem with that , DW: OK NP: But I had no problem with that at all but I also understood the advantage of having them tell me information about what was going on in the market . So you know, did I get a benefit, well what benefit did I get, cup of coffee? A drink? When we met and they told me what was going on. Did I receive any cash at any point in time, was any account ever opened in my name, was any trust ever created in my benefit, was anything ever created in earth. Nothing has ever been done that I have received a red cent. If this was going to happen I wish that, you think to yourself shit at least if you have that benefit or money it would have been (inaudible) What I was afraid of covering my arse is shit and it does look like shit um yeah." (emphasis added) 186 The Crown relied, in particular, upon the underlined portions in this interview. This was said to reflect the development of the Accused's thoughts on this question at a time when he assisted his ex-wife with her studies. Thereafter, in his capacity as a consultant to the ATO and then as First Assistant Commissioner, the Accused had an opportunity, which he acted upon, to advance the interests of promoters associated with himself by causing steps to be taken within the ATO. The Accused concealed from the ATO his relationship with these promoters. The Crown contended that this was an appropriate starting point from which to consider evidence touching upon the element of causation. 187 The Crown submitted that it is artificial and unrealistic to examine the evidence of the four ATO officers without acknowledging the broader picture of the conduct of the Accused. It was necessary to do this to allow a proper appreciation of the evidence available to a jury bearing upon the element of causation. In this context, the Crown points to the statement by the Accused in Exhibit C199 set out above as providing some understanding of his actions with respect to relevant rulings and opinions. 188 The Crown submitted that the evidence revealed the following matters. At about the time the Accused commenced employment in the ATO, he drafted and settled applications to be submitted by Mr Panos to the ATO for Advance Opinions. The Crown alleged that the Accused so acted pursuant to an agreement with Mr Morgan and Mr Panos, revealed in the evidence of Mr Morgan and, according to the Crown, confirmed by available circumstantial evidence, whereby the Accused would devise tax schemes to be marketed by Mr Morgan and others. The Crown alleged that the purpose in obtaining favourable Advance Opinions for the promoters' companies was to give them a marketing advantage and to establish precedents for taxpayers who may want their own Private Binding Ruling. The applications were directed by Mr Panos to named officers in the ATO, although Mr Panos had had no prior dealings with any of them. The Crown submitted that these ATO officers were nominated by the Accused as appropriate points of contact because they would, or could be persuaded to, issue favourable rulings. 189 The Crown submitted that, throughout the same period, the Accused had taken steps to make it known in the ATO that he had expertise in the area of tax law involved in the rulings. He did not disclose to any person that he had an association with the applicants for the rulings and that he had, indeed, played a part in drafting the applications to the ATO. The Crown submitted that each of the ATO officers to whom the applications for Advance Opinions were sent were in communication with the Accused who provided varying degrees of assistance to ensure that favourable opinions were issued for the tax schemes with which he was involved. 190 Once the precedents had been established by the issue of the favourable Advance Opinions to the promoters' entities, the Crown submitted that Mr Morgan started to market the schemes. At about the same time, the Accused was appointed Officer-in-Charge of the Strategic Intelligence Assessment Unit within the ATO. He proceeded then to recruit Mr Aivaliotes to his area, and entrusted him with the task of processing the applications for Private Binding Rulings for the schemes with which the Accused was associated. 191 The Crown pointed to the evidence of Mr Aivaliotes that he had never handled an application for a ruling previously and knew nothing about the areas of tax involved. The Strategic Intelligence Assessment Unit had the responsibility of gaining information concerning market trends. The Crown submitted that it was not a function of this Unit to issue rulings and that the Accused did his best to conceal the number of rulings issued. 192 The Crown submitted that, when the schemes were sold and the taxpayer wanted his own ruling, Mr Panos posted or had delivered the application exclusively to the attention of Mr Aivaliotes. The Accused drafted the template used by Mr Aivaliotes so as to enable him to format and provide the initial favourable rulings. From time to time, Mr Panos sent correspondence seeking clarification of various issues. On each occasion, he directed the correspondence to Mr Aivaliotes. Except for one occasion when Mr Aivaliotes replied to Mr Panos of his own initiative, the Crown submitted that all other responses were approved or settled by the Accused. 193 On the one occasion when Mr Aivaliotes replied without checking with the Accused, the Accused had Mr Aivaliotes rescind the opinion he had expressed and respond with a letter then drafted by the Accused (T860-861). When applications were submitted to the ATO by Mr Panos for Advance Opinions for variations on the EBA schemes, they were also directed to Mr Aivaliotes, whose replies were drafted or settled by the Accused. At one point, according to Mr Aivaliotes, the Accused gave him a bundle of applications for rulings and asked him to "do them quickly" (T872.54). 194 The Crown acknowledged the evidence given by Mr Aivaliotes in cross-examination in which he said that he had acted professionally and in accordance with the law. The Crown submitted that it could not be expected that Mr Aivaliotes would say anything else. It was the Crown submission, however, that this misses the point. Mr Aivaliotes had been influenced substantially by the Accused by a process involving his initial selection, the direction of applications for rulings to him by Mr Panos, the close role of the Accused in drafting and settling responses to the rulings including a direction to rescind an opinion given. All of this, the Crown submitted, supported the argument that the Accused caused Mr Aivaliotes to issue the relevant rulings. 195 The Accused, according to the Crown, cleverly orchestrated a situation in which he controlled the responses to the applications submitted by Mr Panos in relation to the schemes in which the Accused was involved. Given the evidence of the involvement of the Accused in the preparation for the applications for Advance Opinions and Private Binding Rulings, and the evidence of Mr Morgan of an agreement that he would participate in sharing the profits in the sale of the scheme, the Crown submitted that, as a matter of commonsense, there was an irresistible inference that the ATO officers to whom the applications were sent were selected by the Accused because they provided the best opportunity for securing a favourable ruling. Given the Accused's proprietary interest in the schemes, which the Crown submitted he had blatantly concealed from the ATO and its officers at all times, it is illogical that the Accused would leave to chance the outcome of the applications. 196 The Crown submitted that, at the very least, there was sufficient evidence in support of the element of causation so that the present application by the Accused ought be rejected. The Crown submitted that the doctrine of innocent agency does not apply to this case. The first count does not allege that the Accused issued the relevant opinions and rulings. Rather, the indictment alleges that the Accused caused the issue of the rulings and opinions by others. The Crown maintained the submission that the evidence supported a conclusion that Mr Aivaliotes was a "puppet" of the Accused. 197 In the course of finding that a prima facie case existed with respect to the element of causation in the judgment of 27 June 2005, Sully J referred in some detail to the evidence of Mr Aivaliotes (pages 6-14). His Honour referred to the position of the Accused as "a person of real standing, authority and influence in the ATO" (page 7.9). Sully J summarised the evidence of Mr Aivaliotes concerning his recruitment by the Accused and the allocation to him of the task of giving rulings although, as Sully J observed "Mr Aivaliotes then had no experience whatsoever with the processing of such applications" (page 8.9). In January 1998, Mr Aivaliotes received an email from the Accused which provided a sample ruling on the employee benefits trust (Exhibit C106). Sully J continued (page 9.5): "Mr Aivaliotes said that he read the attachments to the email and used the draft as a precedent for issuing two Private Binding Rulings. He showed the rulings to the accused, who affixed to them, using a stamp of which he then had legitimate possession, the signature of the Commissioner's delegate, Mr Killaly. Thereafter, Mr Aivaliotes received further Private Binding Ruling applications." 198 Sully J referred to evidence in chief of Mr Aivaliotes concerning requests for Private Binding Rulings after January 1998 (T824.39): "Q. Thereafter did you receive further requests for private binding rulings in the course of your duties? A. Yes, I did, sir. Q. In what circumstances did they come to you? A. They either came to me via Mr Petroulias handing them to me; Mr Petroulias saying there were requests on my desk for me to do; or when arriving at the office at the security desk I would be told by the security officers that there was mail for me; or I was handed such requests by Mr Petroulias' secretary, Lisa Jifkins. Q. When it came to responding or considering whether you would issue a ruling or not, what process was followed in relation to those additional applications that you received? A. I would, of course, read the applications and the accompanying documentation. I would then consult with Mr Petroulias. I would again, having read them, look up the law to the extent of my abilities at the time. I would then prepare the rulings and show them to Mr Petroulias before applying the signature stamp and sending them out." 199 Sully J continued, in the judgment of 27 June 2005, to summarise the evidence of Mr Aivaliotes (page 10.4): "Mr Aivaliotes said that he had retained in lever-arch folders copies of any ruling issued by him together with the relevant documentation. Toward the end of 1998, probably in October, the accused took Mr Aivaliotes' files saying that, 'He wished to store them in his office safe or cabinet, which was in the form of a safe'. Thereafter, whenever Mr Aivaliotes had additional such material to be filed, 'I would give it to Mr Petroulias to file'.

In February 1998, Mr Aivaliotes had referred to him by the accused a Private Binding Ruling application which had been made by a firm of chartered accountants acting on behalf of a particular client. The application was addressed to the attention of the accused. It is clear that Mr Aivaliotes prepared a draft ruling using his available precedents, and that he faxed the draft to the accused 'for approval'. The accused directed an alteration. The alteration was made by Mr Aivaliotes and a Private Binding Ruling issued accordingly: see exhibits C111, C113, C114." 200 Sully J set out in full in the Judgment of 27 June 2005 (pages 11-12) the following evidence given by Mr Aivaliotes towards the end of his examination in chief (T869.8): "Q. I touched on this matter yesterday, Mr Aivaliotes, concerning the system by which you received applications for rulings and dealt with them. We touched this morning on the physical location that you occupied within the Tax Office, I think you said some metres from where Mr Petroulias worked? A. Some 50 metres, yes.

Q. Just in relation to the series of rulings that were issued for the Productivity Incentive Trust Plan which commenced with those which you have dealt with in some detail which are, I think, 4, 5, 6 and 7, as they were duplicated because of the date issue, through to somewhere around about 51 which was the last of the Productivity Incentive Trust Plan rulings, how did the system work whereby you received the applications and proceeded to deal with them? A. I would either get the applications upon arrival - at the security desk I'd be told there was correspondence for me, or I'd find ruling requests on my desk. Mr Petroulias would usually have said to me, 'There are some rulings for you to do on your desk' or Mr Petroulias would give them to me, or his secretary, Lisa Jifkins, would give them to me.

Q. Presumably, after the first few that you did, there was a degree of repetition, was there- A. Yes, there was.

Q. --in the applications that followed in respect of the Productivity Incentive Trust Plan? A. Yes.

Q. What process did you follow when it came to responding to the applications? A. Well as I'd done more and more of them and they were of the same type, having spoken with Mr Petroulias on the previous occasions, I'd look at them again. I'd look to find whether there were any differences at all and, if there were no differences, I would then proceed to use the previous model of ruling.

Q. How were you able to do that? A. Electronically on my computer I could cut and paste or copy and paste into a new document.

Q. There is evidence of the computer system in operation in the Tax Office at the time which had various fields or databases including the CASES reporting system. Had you used that? A. I wasn't familiar with that system. At one point I think in trying to do these first rulings I attempted to put it on to the CASES reporting system and a Miss Belinda Treatt said to me it was a very cumbersome system, and I would therefore proceed with doing it on the ordinary computer system.

Q. Who was Miss Belinda Treatt? A. She was a person senior to me in the office and part of the team that I was part of.

Q. So in relation to any of the rulings in the schedule from beginning to end, did you make any entries on the CASES reporting system? A. No, I didn't.

Q. Did you endeavour to? A. Yes, I tried again and in this particular instance Mr Petroulias came to my work point and asked me what I was doing. He wanted me to get the rulings out quickly or to get work out very quickly, and I said I was attempting to put it on to the CRS system. Mr Petroulias said words to the effect to me of 'Don't worry about that. It's just a waste of time. Just carry on doing the rulings'.

Q. Do you remember when that was? A: I think it was quite early in the doing of these rulings.

Q. There was another system known as Grapevine. Did you use that either to record what you were doing or to research what you were doing? A. No, I didn't. I wasn't familiar with the system at the time and I had also heard that it was also very hard the use and cumbersome.

Q. When you produced a ruling or draft ruling, was part of that process the utilising of various precedents? A. Yes.

Q. What did you do then in terms of achieving a final document and sending it out? A. Having produced what I considered to be a good final version, I'd take it to Mr Petroulias and I'd show it to him. Mr Petroulias would look at it and then say words to the effect of, 'This is all right' or 'This is okay. This looks all right. Go ahead and issue it'. Then I would go through the procedure of getting the signature stamp of Jim Killaly, Deputy Commissioner, from Mr Petroulias' desk and applying it to that finding. I would then photocopy or have a copy of that particular ruling which I filed in lever arch binder folders and send the original out to the Rulee." 201 Sully J adverted to parts of the cross-examination of Mr Aivaliotes (pages 12-14). His Honour then concluded (page 14.7): "The whole of the preceding discussion, if tested with practical commonsense and in conformity with the Towers guidance, seems to me to afford ample warrant for a conclusion that there is in hand evidence capable of supporting a finding by the jury that the accused did cause, in the requisite legal sense, the issue of the Aivaliotes rulings. That resolves in favour of the Crown the question whether there is a prima facie case in the element of causation." 202 Sully J gave the jury a number of directions on the element of causation and the evidence adduced in support of that element during the course of the summing up (SU77ff). Directions were given in accordance with the written directions to which reference has already been made. His Honour continued (SU79.2): "With those guidelines and those directions all in place, let us have a look at how, to begin with, the Crown structures its case on causation. The Crown case, as I understand it, rests upon five bases: first, the direct evidence of Mr Morgan; second, the direct evidence of Mr Aivaliotes; thirdly, the direct evidence of each of Messrs Chow, Targett and Charles as to the issue by them of the advance opinions which are numbered 1, 2 and 3 in exhibit C94; fourthly, things said by the accused himself in intercepted telephone conversations and in conversations with the arresting police; and, fifthly, a circumstantial case constituted by a number of individual facts and circumstances." 203 Mr Clelland SC submitted that his Honour should have directed the jury, on the causation issue, to confine their attention to the evidence of the four ATO officers. I do not accept this submission. It involves an artificial limitation upon the approach to evidence which is capable of bearing upon the element of causation. 204 Sully J proceeded to remind the jury of features of the evidence relating to the five bases upon which the Crown relied with respect to causation. Reference was made to the evidence of Mr Morgan (SU80ff) and Mr Aivaliotes (SU98ff). Reference was then made to the evidence of Mr Chow (SU113ff), Mr Targett (SU122ff) and Mr Charles (SU125ff). Reference was made to evidence concerning things said by the Accused in intercepted telephone conversations and in conversations with the arresting police (SU129ff). His Honour then moved to the fifth basis relied upon by the Crown on causation being a circumstantial case constituted by some 12 individual facts and circumstances (SU133ff). His Honour reminded the jury of the way in which the Crown relied upon this material (SU133.8): "I think a fairer way of putting this collection of material would be this: that you should understand that the Crown asks you to look at it as a circumstantial case which establishes - if you accept it, of course - that there were on foot at material times activities which really do not bear any other rational explanation than that the background to them was the original concluding of arrangements exactly of the kind that Mr Morgan alleged had been concluded in the evidence that he gave you." 205 I have set out in some detail extracts from the evidence and the judgment and summing up of Sully J at the first trial. It is necessary, however, once again to keep in mind the relatively narrow issue which I am presently considering. The question is whether the first count is foredoomed to fail, in accordance with the principles set out earlier in this judgment, with respect to the element of causation. 206 I have considered, as part of my independent assessment, the transcript and exhibits from the first trial to which my attention was drawn in the course of submissions. In addition, I have considered carefully the judgment of Sully J of 27 June 2005 in which his Honour found a prima facie case on causation. The evidence relied upon by the Crown at the first trial supports a prima facie case on this element. In forming this view, I have kept in mind the concept of "substantial or significant cause" referred to in Royall v The Queen. Although Sully J did not use this precise phrase in directions to the jury, I consider that the directions which were given involved the same concept. 207 I am not satisfied that the concept of innocent agency has application to this case. The wording of the first count is significant in this respect. It is not alleged that the Accused himself issued the rulings or opinions. It is alleged that he caused them to be issued. Even if the concept of innocent agency did have application to this case, however, I am satisfied that the evidence of Mr Aivaliotes and the other evidence at the first trial identified by Sully J which bears upon the issue of causation supported a prima facie case in this respect. 208 In circumstances where I am satisfied, based on the evidence adduced at the first trial, that a prima facie case exists on this element, I am not satisfied that the first count is foredoomed to fail by reference to this element. I reject the application of the Accused based on this contention.

The Element of Dishonest Means 209 The Accused submits that the first count is foredoomed to fail with respect to the element of dishonest means. Mr Clelland SC submits that there was an absence of evidence capable of supporting this element and that Sully J erred in directions of law given to the jury on this issue. 210 The written directions provided to the jury referred to dishonesty (MFI105, Document 5, pages 4-5): "2. That his act (or acts), as you find them on the evidence was (or were) dishonest The guiding principle of law is that you, as the chosen representatives of the community, must apply what you understand to be the current standards of ordinary, decent people. If any particular act is dishonest when tested against those standards, then that act is dishonest in the sense required for the proof of this, second, essential element of the charge. Bearing always in mind that governing principle, then: • The Crown must prove beyond reasonable doubt that the act or acts of the accused, said to have caused the rulings to issue, was (or were) dishonest. It is relevant to look at any act of the accused that is said to have caused the rulings to issue at all. It is relevant to look, also, at any act of the accused that is said to have caused the rulings to issue in the form in which they did in fact issue.

• In considering the act or acts of the accused in the sense explained in the preceding paragraph, you would be entitled to take the view that whatever you are satisfied the accused did in order to cause the rulings to issue, would be dishonest in the relevant legal sense if it in effect asserted to be true something that was in fact false, and if the accused, when doing the particular act(s), either actually knew that what he was thereby asserting to be true was in fact false; or did not believe that what he was thereby asserting was true. • similarly, and when considering those causative acts, you would be entitled to take the view that an act would be dishonest In the relevant legal sense, if the accused either did the act knowing that he had no right to do it; or did the act not believing that he had a right to do it." 211 Although the Accused does not challenge the terms of the direction with respect to dishonesty, it is submitted there was no linking of the concept of dishonesty with the acts said to be causative of the issue of the rulings. The first count alleged that the Accused had caused the rulings and opinions to issue "by dishonest means". 212 Mr Clelland SC submitted that the law requires a distinction to be made between general evidence of dishonesty and evidence that the Accused caused the rulings to issue by dishonest means. It was submitted that the directions of Sully J failed to require that such a distinction be made by the jury in circumstances where the prosecution is unable to prove dishonest means in the way that term is to be understood. It was submitted that the first count requires proof beyond reasonable doubt not only that the Accused acted dishonestly, but also that his dishonest acts caused the rulings to issue in the form in which they did. 213 Mr Clelland SC relied upon the decision of the Court of Criminal Appeal in R v Iannelli (2003) 56 NSWLR 247 in which reference was made at 258 [65] and 271-272 [116]-[119] to the distinction between proof of dishonest means in the perpetration of the fraud alleged and proof of a dishonest state of mind. Reference was also made to Peters v The Queen at 509-510 [33] and Spies v The Queen (2000) 201 CLR 603 at 633-634 [87] and 635 [92]. 214 It was submitted for the Accused that there was no evidence upon which a reasonable jury could conclude that the Accused caused the rulings to issue by dishonest means and that Sully J should have directed an acquittal on the first count. 215 The Accused submitted that the Crown must prove that causation was by dishonest means and not simply throw up a generalised body of evidence about dishonest conduct or point to acts which might be thought to be dishonest. Mr Clelland SC submitted that the mere non-disclosure of an association between the applicants for the rulings and the Accused did not satisfy the requirement for the rulings to have been issued by dishonest means. The content or terms of the rulings would have to be shown to be the result of dishonest means or dishonest conduct that caused the rulings to issue in the form in which they did. The Accused submitted that, even if the association had been disclosed, there is no evidence and no basis for concluding that it would have altered the form of the advice or ruling as it was the duty of each officer to issue the rulings in the form they did applying the established ATO view. 216 Criticisms were made by the Accused of parts of the summing up of Sully J with respect to this element. It was submitted that the evidence adduced by the Crown was incapable of proving the element of dishonest means. 217 The Crown acknowledged before me that more elaborate directions ought probably have been given with respect to dishonest means than those which were given to the jury (PT381.47, 2006). However, the Crown submitted that there was ample evidence to support this element and that it cannot be concluded that the first count is foredoomed to fail on this basis. The formulation of appropriate directions to the jury with respect to this issue is a matter for future submissions in the context of a determination by me, as the trial judge, as to the terms of directions to be given to the jury. 218 I accept that the question, for present purposes, is whether the first count is foredoomed to fail with respect to this element because of an absence of evidence capable of supporting the element. 219 The Crown referred to five categories of dishonesty of the Accused which bear upon this question being:

(b) the application of a policy contrary to what the Accused regarded the policy should be;

(c) discrimination between the schemes of the PIC group and the schemes of other promoters;

(e) the deception of officers as to the rulings being issued. 220 I have noted earlier in this judgment (paragraphs 96 and 97) the concession made by Mr Clelland SC concerning the availability of evidence relating to dishonesty on the part of the Accused. That concession touches upon a number of the topics referred to in the preceding paragraph. 221 The first category relates to conflict of interest. The Crown submitted that the materiality of conflict of interests to the question of the issue of the favourable rulings cannot be dismissed on the basis of a mere failure to inform the ATO officers with whom the Accused dealt of his interest in the schemes. The Crown submitted that the issue involves the exploitation by the Accused of his knowledge and contacts within the ATO in order to ensure that the applications for Advisory Opinions and Private Binding Rulings were likely to be successful, as they indeed were. The success of these applications, the Crown submitted, is to be contrasted with the failure of applications from other promoters for similar schemes which did not have similar patronage. According to the Crown, the issue of conflict of interest embraces the same matters identified in the context of causation, being the elaborate steps taken by the Accused within the ATO to contrive a situation in which the applications were not only dealt with expeditiously, but also had the maximum chance of success. 222 The Crown submitted that the conflict of interest persisted at a practical level until the end of the issuing of the rulings by Mr Aivaliotes, with the Accused directing Mr Aivaliotes to write letters to the PIC promoters designed to protect their schemes from the effects of the Draft Public Ruling, in a way which was intended to maximise the fraud on the Commonwealth by doing his best to ensure that taxpayers who had purchased these schemes but had not been issued with their rulings, were protected by the rulings. In these ways, the Crown submitted that the evidence revealed actions of the Accused flowing from his conflict of interest which supported a conclusion that he caused the rulings to issue by dishonest means. 223 The second component of dishonest means relied upon by the Crown concerned the allegation that the Accused had approved the use of a policy within the ATO to EBAs which required the application of fringe benefits tax in a way which effectively put the schemes out of business, but did not apply that policy to the PIC schemes in which he had an interest. The Crown pointed to the formulation of Mr Chow's position paper which the Accused said would be the position to be applied in the ATO (T392; Exhibit C41). Thereafter, the Accused promoted a Draft Public Ruling to that effect which was to apply to all EBAs. Notwithstanding that process, the Crown submitted that the Accused continued to use his position in the ATO to ensure that Mr Aivaliotes continued to issue favourable rulings to the PIC schemes without requiring fringe benefits tax to be paid. In this way, the Crown submitted that the dishonesty in his conflict of interest between his role as part of the PIC group selling the scheme and his role in the ATO, directly related to his capacity to ensure that Mr Aivaliotes continued to issue favourable rulings to the PIC schemes regardless of the policy which was otherwise being advocated by the Accused through the agency of Mr Chow. In this way, the Crown submitted that the acts of the accused were capable of constituting dishonest means for the purpose of the first count. 224 The third component relied upon by the Crown is related to the second. The Crown submits that the evidence revealed that the Accused, while encouraging Mr Aivaliotes to issue favourable rulings to the PIC schemes, had Mr Chow intervene in applications for similar schemes by other promoters in order to ensure that the officers processing the applications applied the policy approved by the Accused and issued unfavourable rulings requiring fringe benefits tax to be paid in relation to those schemes. According to the Crown, this aspect of the evidence demonstrates the dishonest character of the conduct of the Accused in using his position in the ATO to protect the interests of the PIC schemes by frustrating the opposition. Had ATO officers known that the Accused had an involvement in an opposition scheme, the Crown submitted that they may well have queried why the PIC scheme received favourable rulings when they were being asked to issue unfavourable rulings to the opposition. 225 With respect to the fourth and fifth components, the Crown pointed to evidence of the actions of the Accused in concealing the number of rulings issued in favour of the PIC schemes and in deceiving any officers who sought that information. It was submitted that these were further acts of dishonest conflict of interest which were intended to contribute to the continuation of the issue of the rulings. The ATO had a system of peer review which was thwarted by the actions of the Accused in concealing the rulings. The only officer who was aware of the rulings being issued in favour of the PIC schemes was Mr Aivaliotes. Had any other officers been aware that favourable rulings were being issued to one scheme when similar schemes were receiving unfavourable rulings, and a public ruling was to be issued to the contrary, the Crown submitted that there was an obvious risk of enquiries being made that might have the result that the favourable rulings would have to cease. Accordingly, the Crown submitted the deception of the Accused allowed the favourable rulings to continue to issue to the PIC group. 226 In my view it is necessary, once again, not to confine in an artificial way the evidence to be considered in assessing the defence submission that the first count is foredoomed to fail by reference to the element of dishonest means. The evidence adduced by the Crown involved direct evidence, and evidence from which inferences adverse to the Accused could be drawn. It is necessary to have regard to that evidence which is capable of bearing upon the element of dishonest means. 227 To prove a defrauding, the prosecution must establish that the Accused used dishonest means to achieve his object: Spies v The Queen at 630 [78]; R v Iannelli at 249 [6]. Proof of dishonest means may involve establishing that the Accused intended to prejudice another person's rights or interest by concealing facts which he had a duty to disclose: Peters v The Queen at 529 [84]; Spies v The Queen at 631 [80]; R v Iannelli at 249 [7]. Concealing facts which the Accused had a duty to disclose is capable of constituting an active step on the part of the Accused to prejudice the victim: R v Iannelli at 250 [11].

228 In the judgment of 27 June 2005, rejecting an application for a verdict by direction of the first count, Sully J considered the issue of dishonesty (pages 15-19). His Honour referred to the evidence of Mr Morgan (pages 16-17). His Honour adverted to the return of private interests completed by the Accused on 31 March 1998 (Exhibit C203) which required disclosure of any conflict of interest but, in relation to which, the Accused made no disclosure whatsoever. Sully J linked the evidence of Mr Morgan and the non-disclosure of the Accused of his conflict of interest (page 18.5): "It seems to me to be inescapable that a jury which accepted from Mr Morgan that the accused did indeed operate as an active and enthusiastic entrepreneur in the contexts particularised in items A and B of the Crown case statement would [not] have to conclude, - but would certainly been entitled to conclude, - that the failure of the accused to disclose in any way at all that he had a substantial financial interest in private binding rulings which he was causing to issue, was essentially dishonest according to the currently accepted standards of normal decent people." 229 Sully J concluded that part of his judgment dealing with dishonesty in the following way (page 18.8): "There are 228 Crown exhibits, and it is, obviously, impossible to make, on the present occasion, a detailed canvass of them. It must suffice to say that there are within that mass of material instances of conduct which seem to me to be properly available to the jury as evidence of dishonest conduct on the part of the accused as, simultaneously, a tax scheme entrepreneur and a member of the Senior Executive Service bound by the duties of disclosure and of transparently honest and impartial behaviour that are the rationale of exhibit C203. The consideration to which Mason P draws attention in [112] of his Honour's judgment in the Court of Criminal Appeal is also capable, in my opinion, of being accepted by the jury, in which event there would be, on that account, further evidence of dishonesty. In my opinion, the element of dishonesty has been sufficiently established to the extent contemplated by the Towers principles." 230 Although his Honour did not refer expressly to the concept of dishonest means in this judgment, the reasoning, in my view, supports the finding of a prima facie case with respect to that element in the first count. A more elaborate foundation in support of that element was revealed in the Crown's closing address and in the summing up to the jury.

231 The concession of the Accused (at paragraphs 96 to 97 of this judgment) is not unimportant on this question. There was evidence of dishonesty on his part. The acts pointing to dishonesty did not exist in a factual vacuum. The context in which it occurred involved the Accused having a significant interest on both sides of the fence of the relevant applications. On one side of the fence, he was assisting the applicants in the drafting and preparation of relevant documents. On the other side of the fence, he was playing a direct supervisory role with respect to Mr Aivaliotes, with evidence adduced at the first trial capable of supporting a submission that he exercised a significant influence over Mr Aivaliotes with respect to the issuing of the rulings. He did so at a time when he occupied a most senior position within the ATO. The existence of a conflict of interest and the non-disclosure of that interest is pertinent. The functions being exercised by Mr Aivaliotes, under the Accused's supervision, related directly to the subject matter of that conflict of interest. It is capable of constituting the type of evidence of dishonest means identified in Peters v The Queen, Spies v The Queen and R v Iannelli. This is not a case where there was a technical or theoretical conflict of interest between the Accused's formal position within the ATO and the tasks being carried out by persons in a remote part of the ATO far removed from the Accused. The functions of the ATO which were being exercised under the supervision of the Accused related directly to his private and undisclosed interest. What I have said, of course, does not constitute findings of fact made by me about the Accused. I express these views in the context of the foredoomed to fail ground which I am presently considering. They are expressed upon the basis of the arguments made in support of the present ground. 232 For the purposes of disposing of the present application, I am satisfied that the evidence adduced at the first trial supported a prima facie case with respect to this element in accordance with the principles in R v Iannelli and the authorities referred to therein. 233 I am not satisfied that the first count is foredoomed to fail with respect to the element of dishonest means. I reject the application of the Accused on this ground.

Conclusion on Foredoomed to Fail Ground Concerning First Count 234 I have considered the submissions and evidence relevant to the Accused's contention that the first count is foredoomed to fail by reference to the elements of deprivation, causation and unlawful means. I am satisfied, on the basis of evidence adduced at the first trial, that there is a prima facie case with respect to each element. That test may be unduly favourable to the Accused, having regard to the statements of principle in R v Smith. 235 I am not satisfied that the first count is foredoomed to fail. Having regard to that conclusion, I am not satisfied that a foundation has been established for the exceptional remedy whereby the prosecution of the first count would be terminated peremptorily.

The Broad Abuse of Process Ground 236 The Accused seeks a permanent stay of all counts on the indictment. It is submitted that it would be so unfairly and unjustifiably oppressive as to constitute an abuse of process (Walton v Gardiner at 392) to allow the prosecution of the Accused to proceed in respect of all three charges on the indictment because of one or more of the following circumstances, alone or in combination:

(a) the Crown case as particularised, and the evidence to be led in proof of its case, is not sufficient to make out the elements of the offence charged in the first count - the Accused relies upon the arguments advanced on the foredoomed to fail ground and submits that, even if that onerous test is not satisfied, the Crown case on the first count is so weak that it ought not be permitted to proceed to trial;

(b) no reasonable jury could accept the evidence of Mr Morgan to the extent required to found a conviction in respect of both the first and second counts;

(c) the conduct of the Crown in persisting to prosecute the various versions of the charge under s.29D Crimes Act 1914 (Cth) ;

(d) the number, variety, extent and duration of the proceedings against the Accused make the continuation of the proceedings oppressive and vexatious;

(e) the Accused lost a substantial prospect of being acquitted on the first count at the first trial because of suggested erroneous directions given to the jury with respect to the elements of deprivation, causation, dishonest means and intention;

(f) the failure of the Crown at the first trial to call competent and compellable witnesses to give evidence as to relevant facts in issue;

(g) the impact of the passage of time since the alleged events of 1997-1999 on the capacity to provide a fair trial, in circumstances where much of the non-documentary evidence is of conversations said to have been had with the Accused, but of which no notes were taken by the witnesses;

(h) the volume and complexity of the issues and materials will result in an unmanageable and unfair trial, not only in the sense of the capacity of the jury to determine guilt or non-guilt upon evidence which "they are able as humans both to comprehend and remember" ( R v Cohen , UK Court of Appeal, 28 July 1992, unreported, page 30G - the Blue Arrow Case ), but also in the sense of the defence being unable to cope with the volume of evidence that has been marshalled by the combined resources of the ATO, the Australian Federal Police and the Commonwealth Director of Public Prosecutions. 237 Mr Clelland SC submits that all of these factors ought be taken into account for the purpose of the weighing process involving, as it does, a subjective balancing of these factors and considerations: Walton v Gardiner at 396. It is submitted that the "oppressive" arm of the abuse of process ground does not rely for its success solely on the proposition that there is no possibility of a fair trial for this Accused, although it is contended that, in all the circumstances, the Court is unable to secure a fair trial for this Accused. 238 Mr Clelland SC submits that an assessment of all the circumstances of this case demonstrates that the prosecutorial process has become an instrument of oppression against the Accused. It is submitted that the maintenance of public confidence in the administration of justice outweighs any public interest in the continuation of the proceedings. It is said that the continuation of the trial will result in "unacceptable injustice and unfairness" (Walton v Gardiner at 392) of a kind which is incurable, either by the making of rulings as to admissibility or discretionary exclusion of evidence or directions to the jury. 239 The Accused points to the history of the charges since the time of his arrest and charge in Melbourne on 24 March 2000. At that time, the Accused was charged with one count of conspiracy to defraud contrary to s.86 Crimes Act 1914 (Cth). This charge was withdrawn on 2 June 2000 and was replaced, not with a s.29D charge, but with three substantive charges under ss.30, 70 and 73(2) Crimes Act 1914 (Cth), in relation to which the Accused was returned to New South Wales under the Service and Execution of Process Act 1992 (Cth). 240 On 12 December 2000, the Accused was charged with defrauding the Commonwealth contrary to s.29D Crimes Act 1914 (Cth). Particulars of the s.29D charge were provided on 14 February 2001. Committal proceedings followed. The Accused sought leave to appeal against the order of committal with the appeal being determined, favourably to the Accused, by Simpson J. The Crown appealed to the Court of Appeal which confirmed aspects of Simpson J's findings, but set aside a number of the orders made by her Honour. 241 On 22 March 2004, the Accused was committed for trial again on a s.29D charge in a different form to that originally laid. In August 2004, Sperling J dismissed an appeal by the Accused against his committal for trial on the s.29D charge. 242 The Accused was arraigned on 2 April 2004 upon an indictment in the form relied upon by the Crown before Sully J and again before me. In circumstances identified earlier in this judgment, on 21 February 2005, Sully J permanently stayed the s.29D count, taking the view that "enough is enough". 243 The Crown appealed to the Court of Criminal Appeal which, on 11 March 2005, allowed the appeal and overturned the order granting a permanent stay of the first count on the indictment. 244 The Accused submits that the Crown did not take up the course proposed in the majority judgment of the Court of Criminal Appeal concerning the manner in which the Crown could seek to establish the element of deprivation in the first count. 245 Mr Clelland SC points out that the Accused was 29 years of age when he commenced employment as a consultant with the ATO in 1997. It is now nearly six-and-a-half years since the Accused was first arrested and charged. Since that time, it is submitted that he has spent nearly 12 months of his life "effectively undergoing periodic detention" by attending various court proceedings with many further hours engaged in preparing his defence and in conferring with his lawyers. 246 The proceedings against the Accused now occupy some 4,000 pages of transcript. Material disclosed to the Accused includes more than 20,000 documents. At the first trial, the Crown tendered 18 lever-arch folders of documentary exhibits and the defence, one folder. There were a further six folders of documentary material marked for identification. 247 Mr Clelland SC submits that the Accused is an individual who has to privately fund his defence, including being required to pay tens of thousands of dollars to obtain transcripts of the evidence in the first trial. He points to the stress to the Accused arising from the institution and continuation of the proceedings. 248 No evidence was adduced by the Accused on the present application concerning any subjective factors touching the Accused with might be relevant to the application. 249 Against this general background, I turn to consider the factors which the Accused submits ought be taken into account in support of the broad abuse of process ground.

The Submission that the Crown Case on the First Count is Insufficient 250 I have considered, in some detail, and have rejected the defence submission that the first count is foredoomed to fail. I have accepted that there is a prima facie case with respect to the elements of deprivation, causation and unlawful means based upon the evidence adduced at the first trial. The Accused concedes the existence of a body of evidence going to the general issue of dishonesty. 251 The Accused submits that, even if the foredoomed to fail ground was rejected, I am entitled to have regard to the strength or otherwise of the Crown case on the first count in determining whether to grant a permanent stay on the broad abuse of process ground, either on its own or in combination with other factors. No authority was cited in support of this proposition. 252 In circumstances where an Accused has failed to satisfy the foredoomed to fail ground (a recognised category of abuse of process) it is difficult to see that the Court would be entitled to grant a permanent stay of a criminal prosecution based upon the strength, or lack of strength, of the Crown case in support of the prosecution. This is so even where evidence has been adduced by the Crown at a trial and the Crown has indicated an intention to rely upon the same body of evidence at a retrial. 253 It is the primary responsibility of the Commonwealth Director of Public Prosecutions to exercise prosecutorial discretion and to determine whether a retrial should proceed: Island Maritime v Filipowski at [81]; R v Smith at 28-29. Of course, it remains open to the Court to exercise powers to control the processes of the Court. However, absent a successful foredoomed to fail argument, the processes of the Court which apply are the ordinary trial processes which exist for the determination of criminal proceedings against a citizen. This involves trial by jury: s.131 Criminal Procedure Act 1986. The power of the Court to prevent abuse of process does not provide a basis for enlarging the powers of a trial judge at the expense of the traditional jury function: Doney v The Queen at 215; R v R (1989) 44 A Crim R 404 at 414-415. 254 Given the breadth of factors which may be relevant to abuse of process (Batistatos at [9]), it may be that the strength or otherwise of the Crown case may be taken into account, in conjunction with other factors, in support of a permanent stay application. 255 It is sufficient for the moment for me to record my conclusion that I am satisfied that a permanent stay should not be granted based upon the suggested insufficiency of evidence to support the first count on the indictment.

The Submission that No Reasonable Jury Could Accept the Evidence of Mr Morgan 256 There can be no doubt that Mr Morgan is a critical witness in the Crown case. In the course of the judgment of 27 June 2005 refusing the application for a directed verdict of acquittal on the first count, Sully J observed with respect to the role of Mr Morgan in the Crown case (page 17.4): "Learned Queen's Counsel leading for the Crown opened to the jury that the Crown case was largely 'a documents case', and that the evidence of Mr Morgan was 'the icing on the cake'. Where the particulars A and B [concerning the alleged arrangements] are concerned, I think that Mr Morgan's evidence constitutes much more of the substance of the cake than its icing." 257 Sully J characterised Mr Morgan in summing up to the jury as "a cardinal witness in the Crown case" (SU45.2): "Mr Morgan, I suggest to you, is a cardinal witness in the Crown case. And he is. He's cardinal, because it is his evidence, basically, which supports the proposition that there were, to begin with, concluded arrangements of the kind that he described and that caught up himself, Panos and the accused, with those other variations bringing in Gray, Strong and McLaren. His evidence, really, is the evidence that has to be accepted in order to support that conclusion."

258 Sully J made clear to the jury that acceptance of the evidence of Mr Morgan concerning the arrangement was critical to the Crown case on the first count (SU56.2): "I think it would be fair to say that most of the evidence in the trial touching upon this particular question has concentrated upon the arrangement (a); that is to say, the arrangement which is said to have caught up the accused, Mr Panos and Mr Morgan. In a sense that is logical enough because Mr Morgan was actually called to give evidence; and so, I suppose, it was natural that things would tend to concentrate on that particular alleged arrangement.

I think it would be fair to say that if you are not prepared to accept Mr Morgan's evidence as to the alleged arrangement catching up himself, Mr Panos and the accused, there is no evidence, at least none to which I can point you, which would induce you to accept that the other arrangements had been concluded; and the converse is equally true: if you are prepared to accept Mr Morgan's evidence as satisfying you beyond reasonable doubt that there was, in fact, some such arrangement concluded between himself, Mr Panos and the accused as he, Mr Morgan, alleged, then for myself, I can see no evidence that would indicate that you should come to any other conclusion about the other three particular arrangements. Whatever might be the technicalities and the hyper-refinements of it all, as a practical matter, the Crown case on these arrangements stands or falls on the evidence of Mr Morgan and, if it falls on one, it falls on all; if it stands on one, it stands on all. That seems to me, at any rate, to be the practical cast of the evidence as it stands.

That, of course, is simply to pose a critical question - and it is a critical question in this trial - of the extent to which you are prepared to accept Mr Morgan's evidence at all; but certainly upon that fundamental proposition as to the coming into existence of arrangements of the kind alleged by the Crown." 259 In effect, Sully J directed the jury that it would not come to consider the elements of deprivation, causation and unlawful means in the first count unless the evidence of Mr Morgan was accepted on the foundational issue of the arrangement. 260 I have, so far, not referred to any argument directed to the second count on the indictment. His Honour directed the jury with respect to the elements of the second count (SU224ff). It was apparent, from the directions of Sully J to the jury, that the Accused could not be convicted of the second count unless the jury accepted as having being established beyond reasonable doubt, the basic agreement of which Mr Morgan gave evidence (SU226.4): "The understanding which is basic to this count could not be established except as a characteristic of an agreement, being an agreement of the kind that we noticed in our discussion recently about count 1. In other words, the same understanding, the same basic arrangement or understanding or agreement which is basic to count 1 is just as basic to count 2, for there is no allegation that the accused agreed in some kind of vacuum to receive a benefit for an improper consideration. The case made against him is that he did agree to receive such a benefit upon an improper basis as an incident of the foundational agreement which, according to Morgan, was struck between the accused, Morgan, Panos, and the variants of that arrangement that I discussed with you the other day involving Gray, McLaren and Strong.

If you accept what Morgan says about the formation of the agreements, and in particular what he says about the constant references of the accused to the paramount importance of having the PIC schemes covered by advance - advisory opinions and private binding rulings not available for competing schemes, then it would be open to you to infer that the co-venturers did have, indeed, an understanding that the accused would do what he is charged in this count with having done as an incident of his earning his one-third share in the profits. But I have to say with the greatest emphasis that analysis simply won't stand at all unless you are prepared to find beyond reasonable doubt that Morgan is to be accepted in what he says about the nature of the basic arrangement which he says was struck among himself, Panos and the accused. There is really very little - in fact there is practically nothing - that I can usefully say to you about count 2. The issue is as stark as that. If you accept Morgan, then you might - it would be open for you to find that the other elements were in place. It's not in dispute, for example, that Mr Petroulias was a Commonwealth officer at the various times. Everything comes back to whether or not you agree - 'agree' is hardly the way to put it - whether or not you accept as having been established beyond reasonable doubt that the basic agreement of which Morgan gave evidence." 261 His Honour gave the jury directions concerning the elements of the offence contained in the third count in the indictment (SU228ff). The present ground advanced by the Accused that no reasonable jury could accept the evidence of Mr Morgan does not extend to the third count on the indictment. 262 A significant challenge was made by the Accused to the credibility and reliability of Mr Morgan at the first trial. It is not necessary, for present purposes, to amplify the various bases of attack upon Mr Morgan. They were identified in the submissions made to the jury at the first trial and referred to by Sully J in the summing up. 263 It was a matter for the jury to assess the evidence of Mr Morgan. The Crown submitted at the first trial, and again before me on this application, that the evidence of Mr Morgan was corroborated in a number of important respects by documentary evidence. 264 In argument, Mr Clelland SC confined the way in which the Accused pressed this ground, although he maintained that the suggested deficiencies in the evidence of Mr Morgan ought be taken into account in the weighing process (PT265.53, 2006). I am not satisfied that any question concerning the credibility and reliability of the evidence of Mr Morgan founds the grant of a permanent stay of these prosecutions as an abuse of process. It was a matter for the jury at the first trial to assess the evidence of Mr Morgan and to determine what weight to attach to it. It will be a matter for the jury at the retrial to undertake a similar task. 265 It has been observed that a judge should not stray into the area reserved for the jury: Doney v The Queen at 215. That principle, which applies to the determination of an application for a directed verdict at the close of the Crown case, has greater application when an Accused seeks to bring to an end the processes of justice applicable to him in criminal proceedings: R v Smith at 25, 30. 266 This head of argument does not provide a basis for a permanent stay of these criminal proceedings.

Conduct of the Crown in Persisting to Prosecute Various Versions of s.29D Charge 267 The developing history of the s.29D count has been referred to earlier in this judgment. The count has been in the same form since April 2004 when the Accused was arraigned. The present form of the first count was considered by Sully J and the Court of Criminal Appeal in 2005. 268 The Court of Criminal Appeal was alive to the developing history of this count. It is fair to observe that the technical features of this count and, in particular, the element of deprivation have been identified and developed in the judgments of the Court of Appeal and the Court of Criminal Appeal to which reference has been made. As the judgments of the Court of Appeal and Court of Criminal Appeal demonstrate, the matter is not without complexity. Despite the history of amendments, the Court of Criminal Appeal allowed the appeal from Sully J and set aside the permanent stay with respect to the first count. 269 Following the decision of the Court of Criminal Appeal in March 2005, the first count as pleaded in the indictment was left to the jury which could not agree on a verdict. At the time of the appeal before the Court of Criminal Appeal in March 2005, the Crown had not indicated an intention to adduce any expert evidence with respect to the element of deprivation. The Court did not rule that the calling of such evidence was a prerequisite to the first count proceeding to a trial on the merits. The suggestion was made in the judgment of the majority that such evidence would be admissible. However, the Crown did not seek to adduce such evidence. 270 The Crown maintained the case on the element of deprivation as identified, in broad terms, by Mason P at 680-682 [68]. The Crown sought to rely upon additional evidence to that referred to by Mason P. However, the evidence was of the same broad type - documents prepared by ATO officers, including the Accused, which bore on the question of an arguable case that the rulings were wrong. In disposing of an earlier ground in support of the present application, I have held that the evidence adduced by the Crown at the first trial, supported a prima facie case on the element of deprivation. 271 I am not satisfied that the developing history of the s.29D count since 2000, and the manner in which the Crown approached this issue at the first trial, provides a foundation for the grant of relief presently sought by the Accused.

The Submission that the Number, Variety, Extent and Duration of the Proceedings Renders Their Continuation Oppressive and Vexatious 272 Following the arrest and charging of the Accused in March 2000, the case proceeded by way of committal proceedings and a trial before Sully J and a jury at which the jury could not agree. There have been a number of appeals brought by the Accused or the Crown between 2002 and 2005. There has been a measure of success on both sides in those appeals. The ultimate appellate determination of the Court of Criminal Appeal in March 2005 was that the first count ought be allowed to proceed to trial. 273 Between February and August 2005, a number of pre-trial applications were made by the accused followed by a trial by jury during which a number of additional objections to evidence were made by the Accused. Sully J was called upon to deliver a significant number of judgments prior to and during the trial. 274 The jury was unable to agree at the first trial and the Crown has determined, in the exercise of discretion (Island Maritime Limited v Filipowski at [81]; R v Smith at 28-29, 41-42) to proceed by way of retrial on the same indictment.

275 Mason P observed in R v Petroulias at 690 [118] that the complexity of a trial cannot be the touchstone of whether the trial takes place at all. The Victorian Court of Criminal Appeal has observed that juries can deal with long and complex trials and have been known to do so when given appropriate opportunity and assistance: R v Wilson and Grimwade (1995) 1 VR 163 at 176. 276 I am not satisfied that the number, variety, extent and duration of the proceedings against the Accused render the continuation of these prosecutions oppressive and vexatious. It might be expected that the conduct of the first trial will assist the parties in preparation for a retrial. The Crown and the Accused ought be in a better position to appreciate the significance of evidence in the context of the overall case. The Submission that the Accused Lost a Substantial Prospect of Acquittal Because of Erroneous Directions at First Trial 277 In the course of considering the submissions of the Accused concerning the elements of deprivation, causation and dishonest means, I adverted to submissions asserting that Sully J had erred in various respects in directions given to the jury.

278 I have concluded that there was evidence at the first trial to support a prima facie case with respect to each of these elements of the first count. 279 The principal submission of the Accused under this heading was that a substantial prospect of acquittal was lost because of directions given, or not given, at the trial in response to Questions 5 and 6 asked by the jury on 9 August 2005 which related to the element of deprivation. For reasons given earlier in this judgment, I am not satisfied that the approach taken by his Honour with respect to those questions was erroneous. The questions asked by the jury were not the issues which the Crown was required to establish in support of the element of deprivation on the first count. 280 I am not satisfied that any error was involved in the directions given to the jury concerning the elements of deprivation and causation. I note the Crown's acknowledgement that a more elaborate direction with respect to dishonest means ought to have been given and that this issue may be considered in the course of submissions as to appropriate directions to be given to the jury at the retrial. 281 I am not satisfied that the Accused lost a substantial prospect of acquittal on the first count at the first trial because of the directions given with respect to dishonest means. There was, in my view, a sufficient linkage between his Honour's directions concerning dishonesty and the means by which the Crown alleged that the Accused caused the rulings and opinions to issue. The issues of dishonesty and dishonest means were clearly enough before the jury. 282 The Accused has submitted, in support of the present ground, that an erroneous direction was given to the jury with respect to the element of intention. The Accused conceded that there was evidence capable of supporting the element of intention, but that the jury was misdirected in this respect and that, as a result, a substantial prospect of acquittal was lost. The Accused submitted that it was an element of the offence of defrauding the Commonwealth that the Accused must be shown to have intentionally put the revenue at risk. It was submitted that it was never explained to the jury that the Crown had to prove that the Accused intended that the Commissioner to suffer a detriment as a result of the issue of the rulings and that, if the Accused believed and intended that the rulings issued were correct and/or reflected the ATO view, as then prevailing, he could not be said to have had such an intention. An argument was developed in the written submissions concerning the so-called bona fide and non-bona fide features of various arrangements. 283 The written directions of Sully J to the jury concerning the first count stated that the Crown must prove beyond reasonable doubt a number of elements, including that the Accused knew and intended that the issue of the relevant rulings and opinions would have the consequence that the Commissioner of Taxation was deprived of something of value (MFI 105, Document 5, pages 1-2). Having directed the jury as to the elements of the first count, including intention, Sully J said (SU217.5): "Whatever the bare theory of the matter may be, I have to say to you that, as a matter of a comment of fact rather than a direction of law, I should think that I would find it very difficult to see how, if all of those issues had been resolved in favour of the Crown, it would be possible to find that, somewhere or other, there was something residual left over that showed an intention other than a culpable intention of the kind that the law requires to be demonstrated by the Crown." 284 The Crown submitted that the requirement to prove that the Accused intentionally put the revenue at risk did not add a significant evidentiary burden to the prosecution case as evidence which established the use of dishonest means demonstrated that the Accused had acted intentionally to put the revenue of the Commonwealth at risk. The portion of the summing up referred to in the preceding paragraph reflected the way in which the Crown left this issue to the jury in its closing address. 285 With respect, I do not detect any error in the form of direction given by his Honour to the jury with respect to the element of intention. Further directions given by his Honour concerning this issue placed that direction in its factual context in this case. 286 I note that the submissions of the Accused under this heading relate to the first count only. I am not satisfied that the Accused has lost a substantial prospect of acquittal as a result of any allegedly erroneous directions given at the first trial with respect to the first count.

Failure of the Crown to Call Competent and Compellable Witnesses 287 The Accused submits that he is entitled to a permanent stay of the proceedings because of the failure of the Crown to call a number of witnesses at the first trial. Principal reliance was placed upon the failure of the Crown to call Mr Panos and Mr Strong. 288 Mr Clelland SC submitted that the Crown had identified the alleged arrangement between the Accused and others as being fundamental to the success of its case. On the Crown case, six people were parties to that arrangement, but only one person, Mr Morgan, was called by the Crown. 289 It was submitted for the Accused that Mr Panos and Mr Strong had made statements but were not called by the Crown at the first trial. It was submitted that no proper reason was given for failing to call those witnesses. It was submitted that Mr Panos, in particular, was central to the unfolding of the prosecution case. The Accused submitted that the Crown sought to, and were permitted to, tender documents which purported to be authored by or connected to Mr Panos, Mr Strong or other persons. The Crown invited the jury to draw inferences adverse to the Accused from the content of these documents. This, it was submitted, was unfair and oppressive. The non-calling of the witnesses, whom Mr Morgan had identified as being parties to the alleged agreement, was said to exacerbate the unfairness. 290 Mr Clelland SC relied upon statements concerning the duties of a prosecutor in relation to the calling of witnesses in Richardson v The Queen (1974) 131 CLR 116, Whitehorn v The Queen, The Queen v Apostilides (1984) 154 CLR 563 and R v Kneebone (1999) 47 NSWLR 450. It was submitted that failure to call a material witness may constitute an abuse of process justifying a stay of proceedings: Houston v Crannage (1989) 42 A Crim 446, citing Barton v The Queen (1980) 147 CLR 75 and R v Harry; Ex parte Eastway (1985) 39 SASR 203. 291 In support of the permanent stay application determined by Sully J on 21 February 2005, the Accused relied upon alleged unfairness deriving from an apparent intention on the part of the Crown not to call certain witnesses. These witnesses were Mr Panos and Mr Strong (page 17). His Honour was informed that the Crown was endeavouring to make contact with these persons for the purpose of having conferences with them. The Crown position was that the Crown would not call either of these two persons without having had a conference and having been thereby persuaded that the Crown ought to call them as witnesses (page 18). Sully J saw no basis upon which the position as it stood concerning Mr Panos and Mr Strong would strengthen the stay application then advanced. 292 I was informed by the Crown that Mr Panos and Mr Strong were not called as Crown witnesses because of the existence of evidence obtained by telephone intercepts of collusion with them by the Accused in relation to providing false explanations to any police officer who should approach them about the matter. In support of this submission, I was provided with copies of transcripts of telephone conversations between the Accused and Mr Strong on 2 and 4 October 1999 and between the Accused and Mr Panos on 3 October 1999. These transcripts were Exhibit D1 on the voir dire with respect to Pre-Trial Application No. 3 determined by Sully J on 14 April 2005. His Honour declined to admit the transcripts as evidence in the trial on relevance grounds. In my view, the transcripts disclose discussions between the Accused, Mr Strong and Mr Panos which may be characterised in the manner described in the Crown submission. 293 It was submitted for the Accused before me that the proposition put by the Crown that the telephone intercepts established a basis for not calling Mr Panos and Mr Strong was effectively rejected by Sully J when he ruled on the admissibility of the particular intercepts on 14 April 2005. I do not accept this submission. His Honour ruled that the transcripts were not admissible in the trial of the Accused, applying the relevance test in s.55 Evidence Act 1995. His Honour did not determine that there was an absence of collusion between the Accused, Mr Panos and Mr Strong for the purpose of devising answers to questions to be asked of them by police. The transcripts tend to support that description. 294 I was further informed by the Crown that Mr Panos and Mr Strong did not respond to written requests that they attend for a conference with the Crown representatives. In these circumstances, the Crown concluded that they would not be called in the Crown case at trial. This was the approach foreshadowed in February 2005 to Sully J. 295 The Crown submitted that the question whether Mr Panos and Mr Strong ought be called in the Crown case involved the exercise of prosecutorial discretion. In accordance with the procedures proposed in R v Kneebone at 460-461 [49]-[52], 462 [60]-[61], the Crown had invited these two persons to attend for a conference to allow an assessment to be made of their veracity and independence. Both persons declined to attend such a conference. Having regard to the information available to the Crown concerning their collusion with the Accused during the investigation, it was determined that they not be called in the Crown case. 296 The Crown submits that it was open to the Accused to call Mr Panos and Mr Strong in his case. Both persons are solicitors and, the Crown submitted, would no doubt be capable of giving coherent evidence in chief so that there was no prejudice by reason of the Accused not being able to cross-examine them. It may be taken, the Crown submitted, that Mr Panos and Mr Strong were articulate and intelligent persons. In these circumstances, there was no unfairness to the Accused. 297 The Crown submits that, apart from Mr Panos and Mr Strong, the defence during the course of submissions produced a list of names of almost every officer who had dealt with the Accused when he was in the ATO but was not called as a witness. No prior request had been made that these witnesses be called. 298 Sully J gave the jury written directions with respect to the absence of evidence from Messrs Panos, Strong, McLaren and Gray (MFI 105, Document 3, page 4). His Honour directed the jury that they must not speculate about why any of these persons was not called as a witness. His Honour repeated this direction in the summing up (SU46-47). His Honour declined to give a direction to the jury in terms of the rule in Jones v Dunkel (1959) 101 CLR 298. 299 In Dyers v The Queen (2002) 210 CLR 285, Gaudron and Hayne JJ said at 291 [6]: "Further, as a general rule, a trial judge should not direct the jury in a criminal trial that the prosecution would be expected to have called persons to give evidence other than those it did call as witnesses. It follows that, as a general rule, the judge should not direct the jury that they are entitled to infer that the evidence of those who were not called would not have assisted the prosecution. A direction not to speculate about what the person might have said should be given. Again, exceptions to these general rules will be rare and will arise only in cases where it is shown that the prosecution's failure to call the person in question was in breach of the prosecution's duty to call all material witnesses." 300 I am not satisfied that the Crown's failure to call Mr Panos and Mr Strong constituted a breach of the prosecutor's duty to call all material witnesses. The Crown sought to confer with these witnesses in accordance with the practice referred to in R v Kneebone. It may readily be inferred that Mr Panos and Mr Strong were unwilling to attend a conference with the Crown representatives. Their telephone conversations with the Accused in October 1999 were such as to support a view that they were not at arm's length from the Accused. There is nothing to indicate that these persons were not available to be called by the Accused in his case at the trial if he so wished. I see no basis for the grant of a stay arising from the Crown's failure to call Mr Panos and Mr Strong at the first trial. 301 It was not until closing addresses that the defence identified other persons whom it was submitted that the Crown should call and in relation to whom a direction under Jones v Dunkel ought be given. In circumstances where the request to call such witnesses was left until that point in the trial, I do not see how this aspect weighs in the Accused's favour on the present permanent stay application. 302 I am not satisfied that the failure of the Crown to call the nominated witnesses at the first trial provides a foundation for the relief sought by the Accused in this application.

Impact of the Passage of Time Since 1997 303 The Accused points to the passage of time between the events of 1997-1999 and the present time and the suggested adverse impact upon non-documentary evidence of conversations said to have been had with the Accused and, in relation to which, oral evidence is relied upon by the Crown. The Accused submits that this feature is of significance to the present permanent stay application. 304 It is not submitted by the Accused that actual evidence has been lost or that there is some other form of actual prejudice resulting from the effluxion of time. 305 The Accused was arrested and charged in March 2000. He had been aware since 1999 that his activities were under investigation. There was an opportunity for the Accused to test Crown witnesses at the committal proceedings which extended over some 36 days. Of course, those witnesses were called in the first trial and there was an opportunity to cross-examine them. 306 Apart from Mr Morgan, the Crown case appears to be largely a documentary case. As Sully J observed at the first trial, the evidence of Mr Morgan is under strong challenge from the Accused and there is a contest as to conversations alleged by him to have taken place with the Accused and also as to the payment of money to the Accused with respect to the alleged arrangement. 307 It may be taken that memories may fade, to an extent, in the passage of time between 1997 and 2006. However, it is not uncommon in criminal trials for significant factual contests to arise with respect to events which allegedly occurred years, and often many years, prior to trial. I see nothing in the present case which suggests that this aspect gives rise to particular difficulty or unfairness to the Accused. Indeed, apart from Mr Morgan, the heavy dependence of the Crown case upon documents would suggest that memory may pose less of a problem in this case than in many others. 308 A permanent stay should be ordered only in an extreme case and the making of such an order on the basis of delay alone will accordingly be rare: Jago v District Court (NSW) at 33-34; R v Johnson (2001) 125 A Crim R 564 at 568-569 [17]. I am not satisfied that the delay in this case, or any consequences which may flow from it with respect to the quality of evidence, is such as to warrant a permanent stay of the proceedings.

An Unmanageable and Unfair Trial? 309 It was submitted for the Accused that I should have regard to the size and complexity of the proceedings as part of the weighing process referred to in Walton v Gardiner at 396, although it was submitted that it was not necessary for me to determine that it was beyond the capacity of a jury to understand and follow the case. 310 I have already referred to the observations of Mason P in R v Petroulias at 690 [118] that the complexity of a trial cannot be the touchstone of whether the trial takes place at all. 311 It is true that the first trial extended over some months, with ongoing debate and the need for resolution by Sully J of certain arguments concerning, in particular, the element of deprivation in the first count. The Crown and the Accused have had the benefit of hearing the totality of the evidence adduced at the trial and the arguments advanced with respect to the evidence by both sides. Mr Clelland SC submitted that the retrial may take longer than the first trial because of the additional evidence and material available from the first trial (PT296.24, 2006). The Crown submitted that having had an opportunity to observe the evidence and the manner in which it was approached by the parties, the "Crown case would in fact be better the second time around" (PT305.8, 2006). 312 I note that the Accused had the benefit of senior and junior counsel, together with at least one instructing solicitor, throughout the first trial and during the proceedings to date before me. The Accused's legal team has demonstrated a capacity to advance detailed arguments, written and oral, before Sully J and before me. The Accused and his legal representatives have acquired an additional understanding of the case from the first trial which ought allow an efficient and expeditious approach to the resolution of issues falling for determination in advance of and at the retrial. Mr Clelland SC acknowledged that the just and expeditious determination of the matter was in the Accused's interests (PT52.16, 2006). 313 I do not underestimate the challenge posed by this retrial. Some complex issues are involved. It will be my responsibility to manage the trial and to give the jury appropriate directions as required by law. I will look to counsel for the Crown and the Accused for assistance in this regard: R v Wilson and Grimwade at 165. As the Victorian Court of Criminal Appeal observed in that case (at 176), juries can deal with long and complex trials and have been known to do so satisfactorily when given appropriate opportunity and assistance. 314 I am not satisfied that the volume and complexity of the issues and materials will result in an unmanageable and unfair trial.

Stress and Hardship for Accused 315 Mr Clelland SC pointed to the ongoing stress and hardship experienced by the Accused resulting from the continuation of these criminal proceedings. I have referred earlier (at paragraph 67) to some of the features relied upon in this respect. 316 It is a common, if not universal, feature of criminal proceedings that the Accused is subjected to stress whilst the proceedings are on foot. Many persons are remanded in custody until the trial is complete. The present Accused has been on bail. The Accused has not adduced evidence on this application concerning his personal circumstances or any subjective factors said to be relevant to the application. Accepting as I do that the Accused is under stress whilst these proceedings are on foot and that there are associated demands upon him by way of cost and inconvenience, I do not consider that these factors weigh heavily in the present application.

Public Interest Considerations 317 The cases have made clear that there is a strong public interest in the determination by the criminal courts on the merits of prosecutions for serious crime: Jago v District Court (NSW) at 33. The Crown submitted that it would bring the administration of justice into disrepute if a permanent stay was granted with respect to these prosecutions. The Accused submits, on the other hand, that the continuation of these proceedings, given their history, would tend to bring the administration of justice into disrepute. 318 In Wills v Petroulias (No. 2), Spigelman CJ at 626 [49] observed that "important public interests are involved in these prosecutions". The allegations are serious involving, as they do, a claim of serious misconduct on the part of a person holding a very senior rank within the ATO. 319 In my view, there is a strong public interest in these prosecutions being heard and determined on their merits.

Accumulating the Various Factors 320 I have considered each of the factors relied upon by the Accused in support of the application on the broad abuse of process ground. I have concluded that each ground taken individually does not call for the grant of a permanent stay of the prosecutions. 321 It is appropriate that I consider the combined effect of the various factors relied upon by the Accused for the purpose of the weighing process referred to in Walton v Gardiner at 396. I am not satisfied that these factors, taken together, call for the exceptional remedy of a permanent stay of the proceedings. In reaching this view, I have had regard to all of the factors relied upon by the Accused and the legitimate public interest in the disposition of charges of serious offences and the need to maintain public confidence in the administration of justice.

Conclusion on Application on Broad Abuse of Process Grounds 322 For the reasons given, I am not satisfied that a permanent stay should be granted with respect to any of the counts in the indictment. 323 I note that almost all the arguments advanced by the Accused on the present application were directed towards the first count. The only reference to the second count was that relating to the evidence of Mr Morgan and that was pressed somewhat faintly. No separate argument was directed to the third count on the indictment. 324 Even if some basis had been demonstrated (and it has not been) for a permanent stay of the first count, I would not have been satisfied, in any event, that any basis had been made out for a permanent stay of the second and third counts on the indictment.

The Duplicity Argument 325 As I have determined that the first count should proceed to trial, it is appropriate that I consider the Accused's argument that the first count is bad for duplicity. In this respect, I note that Sully J heard such an argument and determined it adversely to the Accused in the judgment of 21 February 2005 (pages 11-13). As Mason P observed in R v Petroulias at 682 [69]-[70], the Accused did not file a Notice of Contention before the Court of Criminal Appeal contending that the order for a stay of the first count should be upheld on other bases, including the duplicity ground. 326 The submissions of the Accused before me advance the same arguments as were made to, and rejected by, Sully J. I note that the written submissions of the Accused on this issue (MFI1, paragraphs 226-229) refer solely to evidence given in the committal proceedings by various witnesses. There is no reference, in support of this argument, to evidence given at the first trial. This observation tends to confirm the fact that the submissions of the Accused on fact and law in support of the present application reproduce those which were made to Sully J in February 2005. 327 Mr Clelland SC submits that the first count, as particularised, is patently duplicitous because the particulars indicate that the 75 Advance Opinions and Private Binding Rulings relied upon were issued by different people in different circumstances in response to different applications at different times. Reliance was placed upon Walsh v Tattersall (1996) 188 CLR 77. It was submitted that the line of authority identified in R v Hamzy (1994) 74 A Crim R 341 and R v Moussad (1999) 152 FLR 373 had no application to the present case. 328 The Crown submitted that the first count, in the circumstances of this case, involved a single criminal enterprise. Reliance was placed upon the decision of the NSW Court of Criminal Appeal in R v Moussad which accepted the concept of single criminal enterprise in rejecting a duplicity argument relating to a count alleging fraud under s.29D Crimes Act 1914 (Cth). 329 In rejecting the Accused's argument in 2005, Sully J noted that, for the argument to be upheld, it would be necessary to distinguish the line of authority in New South Wales typified by the decisions of the Court of Criminal Appeal in R v Hamzy and R v Moussad. Sully J concluded that the present case fell within the principles explained by Lord Diplock in Director of Public Prosecutions v Merriman (1973) AC 584 at 607 given that the acts alleged against the Accused could fairly be regarded as forming part of the same transaction or criminal enterprise. Sully J observed that the decision of the Court of Criminal Appeal in R v Moussad involved a careful examination of the Australian authorities which refer to the principles in Merriman. Sully J concluded that the present case had been framed and particularised as a one count enterprise and that, in this case, as in R v Moussad "what is telling … is the pattern which emerges and makes it plain that there is in existence a fraudulent enterprise … to take the individual acts one by one does not reveal the true overall situation". 330 Sully J concluded (page 13.5): "In my opinion the decision in Moussad (supra), while ever it stands as good law, approves a process of reasoning which, applied to the facts and circumstances as now alleged by the Crown against the applicant, entails that the present duplicity point cannot succeed." 331 I have had regard to the submissions advanced on behalf of the Accused and the Crown on the duplicity point for the purpose of my own independent assessment of the objection. I am satisfied that the present case is characterised appropriately as one involving an alleged course of conduct forming part of the same transaction or criminal enterprise. This is not a case where there is an individual actual loss to the revenue said to flow from each of the rulings or opinions issued. Rather, the fraud involves the risk to the revenue flowing from a course of conduct by the Accused over a period of time. 332 It is clear that the determination whether a charge offends for duplicity involves a question of fact and degree in each case and that this depends upon the particular circumstances of the case: Walsh v Tattersall at 108; Carcosa Pty Limited v Czerwaniw (1977) 93 A Crim R 287 at 296-297; R v Moussad at 383 [61]. 333 Having considered the arguments advanced on behalf of the Accused and the Crown, I am satisfied that the first count is not bad for duplicity. I have reached the same conclusion as Sully J on the duplicity point. 334 I reject the submission that the first count is bad for duplicity.

(a) I am not satisfied that the first count is foredoomed to fail;

(b) I am not satisfied that the Accused has demonstrated a basis for the grant of a permanent stay of all or any of the counts on the indictment on the broad abuse of process ground, taking the factors relied upon both individually and cumulatively;

(c) I am not satisfied that the first count is bad for duplicity. 336 Before concluding these reasons, it is appropriate to repeat an observation made during the course of the judgment. I have approached the issues and arguments advanced by the Accused (especially concerning the first count) in some detail and by reference to the evidence at the first trial and judgments and directions given by Sully J during that trial. This has involved a retrospective process. I have determined that no basis has been demonstrated to prevent the ordinary processes of justice from operating by way of trial by jury. I will proceed now to determine all outstanding pre-trial applications and objections before a jury is empanelled. The trial will proceed, of course, by reference to evidence to be adduced before the jury empanelled at the retrial. Although the Crown has indicated an intention to advance the same case, it cannot be assumed that the evidence will be an exact replica of that given at the first trial. I will consider any submissions made during the trial by reference to the evidence which is actually given at the retrial, including any submissions concerning appropriate directions to the jury. In other words, the ordinary trial processes will apply to this case. 337 I refuse the application to quash the first count on the indictment. I refuse the application for a permanent stay of all or any of the counts on the indictment. **********

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