R v Reid [1999] VSCA 98

102. SCA also banked with WBC and had accounts in Melbourne and Brisbane. The SCA trading account No. 10-7415, was opened in Melbourne in August 1989. In 1992 the SCA "Float Trust Account", No. 862912, was opened in Melbourne; and in August 1992 Account No. 860464 was opened with WBC in Brisbane. When the Brisbane account was opened the trading account No. 10-7415 in Melbourne was closed.

105. The initial signatories to the SCA trading account 10-7415 were the applicant, Heard and Falconer. However on 5 March 1992, WBC received a change of signatory notification which authorized the applicant alone or Elizabeth Collins (the applicant's secretary) and Helen Andrews (the applicant's book-keeper) jointly to operate the account.

108. The bank manager at WBC in Melbourne responsible for SCA's accounts and the applicant's private accounts was Robert Tingiri who, so the Crown alleged, was privy to the applicant's repeated manipulation of the accounts, and who was ultimately dismissed by the bank following the crash of SCA

111. It is also relevant to note that the well known firm of Arthur Andersen was appointed as the accountants, by the applicant, of the Decer Ceder Group; the firm was also appointed as the auditors to SCA. Mr. Gary Hounsell was the partner of Arthur Andersen who was actively involved in maintaining the accounts of both SCA and the applicant.

114. It was the Crown's allegation that the criminal conduct of the applicant, as represented by the counts on the indictment, was broadly divided into two separate phases, each of similar duration. The first phase, which covered the period from December 1991 until approximately mid July 1992 alleged deceptions which were targetted not only at SCA and members of its board of directors, but also at the company's bankers, its underwriters and sub-underwriters. These deceptions, so it was alleged, were motivated by what was said to be an almost obsessive desire on the part of the applicant to ensure that the public share offering would be successful, thereby enabling him the means by which he could recover, in the form of shares, loans advanced to the company during its formative stages. The second phase, so the prosecution alleged, encompassed deceptions practised by the applicant upon the company, its board, investors, the auditors and the Stock Exchange. These deceptions were said to have taken place between August 1992 and March 1993 and were motivated by a concern on behalf of the applicant to conceal the parlous financial condition of the company to which it had been reduced as a result of the deceptions which had occurred during the first phase.

117. To better appreciate the arguments addressed to the Court on behalf of the applicant, we think it is necessary to summarize, on a count by count basis, the evidence advanced at the trial in respect of each of these "phases of deception".

123. Each of these counts alleged an offence contrary to s.83 (1) Crimes Act 1958 (Vic.); namely, "dishonestly falsifying a document made or required for an accounting purpose with a view to gain". In each instance the document alleged to have been falsified was one addressed to WBC.

126. In counts 1, 3 and 6 the prosecution alleged that letters addressed to WBC, on 16 December 1991, 18 March 1992 and 11 June 1992 respectively, had been drafted by the applicant and that he had deliberately and dishonestly falsified them by affixing or causing to be affixed the apparent signatures of Heilscher and/or another director of the company. In each case it was alleged that the applicant had done so for the purpose of extending time for repayment of overdrafts on his private accounts and for which WBC was pressing. In each case the impugned document purported to signify the company's confirmation of previous arrangements which the applicant had made with WBC in which he had pledged, as security, moneys which he alleged were owing to him by SCA.

129. The issue on each count was confined and went to the "dishonest falsification" of the letter in each instance; the prosecution alleging that the signatures were forged and the contents of the stated "arrangements" false, whilst the applicant alleged that the "arrangements" were legitimate and the letters were signed in fact by the persons whose signatures they bore. He therefore contended that there was no falsification and that his conduct was not dishonest.

132. Count 2 alleged that, on or about 5 March 1992, the applicant had forwarded to WBC a "signature authority form" with respect to the operation of the SCA trading account No. 10-7415 in which he had dishonestly and falsely represented to the bank that, by a resolution of a legally constituted meeting of SCA's board of directors, either he alone, or both his personal staff members Elizabeth Collins and Helen Andrews, were authorized to operate and draw cheques upon the company's said account.

135. Once again, the issue was confined. Indeed, it would seem that there was no issue. The applicant conceded that there was no such resolution of the board giving such authority. The applicant said that he was concerned at the "liberality" with which cheques were being drawn by the previous duly authorized signatories and that he wished to control the expenditure of the company. He said that the document was not required for "an accounting purpose" and that, because he could already "control" the accounts there was no relevant "dishonesty".

139. Count 4 alleged a dishonest appropriation, between 31 March 1992 and 17 July 1992, of $462,703.93 belonging to SCA by means of a fraudulent scheme which the applicant implemented and, by means of which, so the prosecution contended, he secured for himself those moneys at the expense of the company.

142. It was not in dispute that, in March 1992, the Queensland Government had committed itself to provide financial assistance to SCA in the hope or expectation that it would receive benefits from having a third national airline competing with the existing two. The assistance was limited to stated purposes, including the training of pilots in the operation of McDonnell Douglas aircraft which SCA proposed to take on lease and use. The "financial assistance" agreement had been entered into between SCA and the Queensland Government on 26 March 1992, and on 30 March 1992 the applicant and Heard had signed a request on behalf of SCA, seeking an advance of US.$351,793 (Australian equivalent A.$462,703.93) supported by a McDonnell Douglas invoice, No.J7825, for "pilot training".

145. On 31 March 1992 the Queensland Treasury responded to that request by transferring the stated amount to SCA's account No.10-7415 at WBC. These funds were never used for the purposes for which they were forwarded and no payment was ever made by SCA on invoice J7825.

148. On the same day as the funds were transferred by the Queensland Government, the applicant drew a cheque on his Decer/Ceder account at WBC for precisely the same amount, namely A.$462,703.93, and used it to purchase a bank cheque for that amount, which was made out to the Deputy Commissioner of Taxation in part payment of a larger amount which the applicant or his private companies owed to the Deputy Commissioner and for which the applicant was being pressed for payment.

151. Janet O'Meara, who was an accountant employed by Arthur Andersen, said that she was responsible for collecting information in the course of preparing relevant financial statements for the applicant and SCA Between April and June 1992 she had been in the Jolimont offices of SCA and the Decer/Ceder Group gathering information to enable the preparation of the companies' accounts for the financial year ending 30 June 1992. She said that, on or about 16 June 1992, she had made a query of the applicant as to the purpose for which the cheque for $462,703.93 had been used and that he had told her that he had paid that amount on behalf of SCA to McDonnell Douglas for "training expenses". As a result of this information she designated the amount in the books of SCA as a loan owing by the company to the applicant.

154. It seems not to have been in contest that the board of SCA, on or about 15 July 1992, gave its approval for payment of the stated sum to the applicant in repayment of the "loan" as designated in the books of account. The total amount approved was something in excess of $481,000 of which the major portion was the $462,706.93 allegedly paid to McDonnell Douglas. On 17 July 1992, when shares were allotted to the public, SCA paid these moneys to the applicant.

157. It was, thus, contended by the Crown that, at the time when the applicant received these moneys from SCA, he dishonestly appropriated them because he was well aware that he was not entitled to them and had "engineered" a scheme to make it appear to the company that he was. In support of its contention the Crown also relied upon the evidence of Ms. Wendy Burge, an audit manager for SCA employed by Arthur Andersen. During September 1992 she sent a series of queries to the applicant, one of which related to payments to McDonnell Douglas. The applicant responded to those queries in writing and enclosed invoices including J7825 which included the notation "paid 31/3/92".

160. Once again, the issues before the jury in respect of this count were confined. The applicant did not deny that the money had come to him in July 1992, but he contended that the series of transactions through which that had occurred was in no way the result of his conduct but through the accountants placing the wrong construction upon what had occurred. He denied having told O'Meara that he had paid the account on behalf of SCA and asserted that the entry of the payment in the books of the company as a loan to him was the consequence of misinformation given by others or a misconstruction by the accountants. He said that, at the relevant times, he and his staff were extremely busy and that the treatment of this payment in the books of the company was not the consequence of any dishonesty on his part.

164. It was the conduct alleged in these counts which the Crown contended was the high-water mark of the applicant's criminality; and was so regarded by her Honour when imposing sentence. The evidence led in support of these counts traced the dealings between the applicant and one of the sub-underwriters of the public share float; namely AFG. It was in respect of these counts that the evidence of the "American witnesses" became significant, because much of the correspondence tendered was correspondence to which Coats (in his capacity as C.E.O. of SCA) and Cosse and Gould, as directors of AFG, were parties. At the trial, the applicant made a spirited attack on the credit of these three men, alleging that their construction of the events which had occurred was fashioned so as to cast blame on the applicant, whereas the truth was that their own sharp practices had been employed to exploit the gullibility of the applicant in order to "feather the nest" of AFG at the expense of SCA. Because the evidence of these witnesses was tendered pursuant to the provisions of the Foreign Evidence Act and because, accordingly, there was no opportunity, at trial, to test it by cross-examination, it is necessary to set out, with some care, the case which the prosecution made in respect of these counts and the evidence relied upon to support it. By doing so the foreign evidence can be placed in its proper perspective.

167. The case which the Crown made was largely documentary, something which, in itself, gave rise to difficulty because there was dispute as to which documents were genuine and which were fabricated by the applicant. This, in its turn, gave rise to differing views between so-called "handwriting experts" whose expertise, in these days of electronic wizardry, travels beyond a comparison of hand-writing to determining whether signatures have been superimposed on false documents by electronic "cut and paste" methods. In the long run, however, it seems to us that the jury would not have found it difficult to determine which of the disputed documents were genuine, and which were not, because of the existence of other independent material which pointed up inconsistencies in documents asserted by the Crown to be false.

170. At the heart of the prosecution case in respect of these critical counts lay the proposition that, at an early stage in its history, SCA had decided to lease aircraft through overseas brokers, rather than buy aircraft. It was this decision which led the company to the conclusion that it was only necessary to seek from the public, in the form of share capital, $50 million, an amount which, as it turned out, the public was not prepared to subscribe, and which subsequent events proved would have been, in all probability, too small. The two companies through which SCA negotiated to lease aircraft were AFG, an American based corporation, and Guiness Peat Aviation (GPA), an Irish based organization. Each of AFG and GPA was prepared to procure leases of suitable aircraft for SCA but, in return, each wanted substantial "security deposits" to offset the risk. AFG, whose parent company was the Dutch Airline "KLM", had access to McDonnell Douglas aircraft owned by Scandanavian Airlines System (SAS). Each of AFG and GPA had made arrangements with SCA, negotiated by the applicant and Coats, both to secure aircraft for the company and to accept sub-underwriting commitments. AFG had procured for SCA three aircraft from SAS and had made it clear to SCA that it would only undertake a sub-underwriting commitment conditional upon its engagement as a procurer of aircraft. Negotiations between SCA and AFG had proceeded upon that basis, but both parties clearly had it in mind that such an arrangement might "spell trouble" because of laws which prohibited SCA from financing the purchase of its own shares.

173. The Crown case was that the applicant was not concerned with the risks involved in agreeing to "compensate" AFG for undertaking a sub-underwriting commitment. It was its contention that the applicant was desperate for the company's public share offer to succeed, else the money which he had put into the company would be lost to him. Thus the applicant, so the Crown contended, negotiated deals with AFG, without the authority of the Board of SCA, which deals had as their objective the end result that the share offer would succeed and that the company would commence to trade in spite of its parlous financial position. This conduct, it alleged, took place over a period of some 2 ½ months between mid-April and early July 1992. The Crown case traced this conduct through documentary evidence admitted without objection, to which we will now refer. In doing so we will also refer to the exhibit number which each document received at the trial:

(a) On 14 April 1992, Cosse of AFG wrote to Were informing it that, in accordance with arrangements made between AFG, on the one hand, and the applicant and Coats, on the other, it agreed "in principle" to participate as a sub-underwriter to the SCA public share offer to the extent of US.$10 million. The agreement to participate was said to be conditional upon, inter alia:

(i) SAS and SCA concluding a lease agreement relating to certain aircraft in "a manner satisfactory to [AFG]".

(ii) The execution of a "satisfactory sub-underwriting agreement".

(b) On 4 May 1992, SAS informed the applicant by "fax" (document A129) that it was not prepared to lease the three MD-82 aircraft to SCA pursuant to a lease agreement which required SAS to guarantee AFG's sub-underwriting commitment to the SCA public share offer. SAS confirmed that it would be prepared to enter into a "clean lease" of the aircraft to SCA.

(c) In a letter written to Coats, copy of which was sent to the applicant, on 5 May 1992 (document A58), AFG put a new proposal to SCA involving the following:

(i) SCA "look exclusively to GPA" to locate the additional four aircraft beyond the three aircraft to come from SAS; and also look to GPA for a US.$5 million sub-underwriting commitment.

(ii) AFG to sub-underwrite the public share offer of SCA to the extent of US.$5 million and "inter-position itself as a lessee/sub lessor" of the three SAS aircraft with KLM guaranteeing its sub-underwriting commitment. AFG proposed that in its sub-lease of the SAS aircraft to SCA, it would receive by way of rental payments US.$20,000 more per aircraft per month than it would pay to SAS pursuant to the head lease.

(iii) SCA was to remunerate AFG for "all out of pocket expenses".

(d) On 11 May 1992 AFG sent a "letter of intent" to the applicant (A.60) setting out the terms upon which it was prepared to offer the three MD-82 aircraft to SCA. The terms required SCA to place security deposits of US.$195,000 per aircraft upon accepting the proposal and a further deposit of similar amount upon the signing of the proposed lease agreement. The proposal was also made conditional upon the execution by AFG of a sub-underwriting agreement between it and Were. SCA was given until 13 May 1992 to accept this proposal.

(e) On 13 May 1992 the Managing Director of AFG (David Gould) wrote to the applicant advising of "latest developments" (A.65). He advised that AFG had received from Were copies of the sub-underwriting agreement which Were required both AFG and GPA to sign. He informed the applicant that GPA had agreed that its solicitors, Messrs. Allen Allen & Hemsley, would represent both GPA and AFG in advising on the propriety of the sub-underwriting agreement. He also advised the applicant that, if AFG were to participate as a sub-underwriter, it would have to be done through an "off-shore company" whom he nominated to be "AFG-SCROSS Ltd", incorporated in the Netherland Antilles. Gould also advised the applicant that AFG could not execute the sub-underwriting agreement unless and until:

(i) Allens had reviewed the sub-underwriting agreement and "signed off on it".

(ii) The Board of SCA had passed a resolution resolving or acknowledging that the "commercial offer as outlined in the Letter of Intent represents the `best' offer available to SCA". He advised the applicant that a "draft resolution" would be prepared by Allens and faxed by them to the applicant.

(iii) SCA had executed the Letter of Intent and forwarded the security deposits.

(f) On 14 May 1992 the applicant "faxed" to AFG the signed Letter of Intent which purported to be "accepted and agreed" by SCA and notified that "security deposits" of US.$585,000 had been transferred to AFG's account (A.67).

(g) On 14 May 1992, Allen Allen & Hemsley "faxed" to the applicant a letter (A.176) in which they advised him that GPA had authorized them to act for AFG. They enclosed with the letter a draft of what they suggested would be a suitable "certified Board minute".

(h) On 14 May 1992 Gould of AFG wrote to the applicant enclosing a "new form of Commitment Letter" which he said was to be "a binding commitment as opposed to a revocable letter of intent" (A.66).

(i) On 15 May 1992 the applicant sent by "fax" to Gould the "new form of Commitment Letter which I have signed" (A.69). The signature which he affixed records that the agreement has been signed on behalf of SCA.

(j) On 19 May 1992, the applicant sent to AFG, by facsimile, (A.70) a letter in the following form:

I hereby certify that the attached pages are a true copy of extract of minutes of the regular Board of Directors meeting held earlier today.

Attached to the transmission was a document purporting to be "minutes of Meeting of the Board of Directors" of SCA, held on Tuesday 19 May 1992 "at 12 noon at 140 Jolimont Road Jolimont". The "minutes" followed the form of the Allens' prototype which had been previously forwarded to the applicant. The "minutes" purported to be signed and initialled as "a true and correct record" by Sir Leo Heilscher as "Chairman".

The Crown alleged that these minutes were false, that there had never been a meeting of the Board of Directors of SCA on 19 May 1992, that no resolution of the type alleged to have been recorded in the "minutes" had ever been passed by the Board, and that the signature of Heilscher as chairman was a forgery. These facts were the subject of count 5 on the Indictment, which alleged that the applicant "being an officer of [SCA] falsified books relating to the affairs of [SCA]".

Once again the issue in relation to this count was confined. The applicant said the minutes had been typed in advance of the Board meeting which was in fact held on 20 May and that Sir Leo had signed it on that day. He said that Sir Leo and Coats both knew that the minute was required urgently by AFG so that the sub-underwriting agreement could be transmitted to Were by 20th May. He had arranged for Collins to type the first part of the minutes on the 19th. He then held it for Sir Leo to sign on 20th. He "believed" that Sir Leo had signed it. Sir Leo said that he had not signed the document and there was evidence that the signature was affixed by "cut and paste" methods. The applicant also told the jury that the Board had agreed not to include the full contents of the minutes in the "Minute Book" because it was too long and had authorized an abbreviated reference. In the Minute Book produced at the trial there was, in fact, no such resolution recorded.

The other directors who were said to have participated in the resolution and who were called at the trial denied knowledge of the minute, the content of which, they said, was a matter of some importance to them because there was concern about breaches of s.205 of the Corporations Law.

In respect of this count, the Crown alleged that the applicant was prepared to falsify the true minutes of the company because he was desperate to secure AFG's participation as a sub-underwriter and he knew that he would not secure it without a "certified" board resolution of the type which AFG required. The Crown thus alleged that the applicant was unable to satisfy the jury that he had acted "honestly", the offence being one against a section of the Corporations Law in which the onus in this respect shifted to the accused.

(k) On or about 20 May 1992 Coats went to London to negotiate aircraft leases with AFG and SAS in accordance with the arrangements which had been made between AFG and the applicant. In his evidence, admitted pursuant to the provisions of the Foreign Evidence Act (Cth.), Coats said that he was aware of the proposals for AFG to be a sub-underwriter and he thought that SCA had executed a letter of intent with AFG in respect of the leasing of aircraft from SAS through AFG. In London, he said he met with Peter Rudzitis from AFG and officials from SAS in the offices of Clifford Chance, solicitors for SAS. Representatives of GPA were also there. Coats said that SAS refused to enter into a lease which involved AFG as a sub-lessor but would only agree to lease the three MD-82 aircraft directly to SCA. As a consequence Coats said that he negotiated leases of the three aircraft direct with SAS. He believed that Mr. Rudzitis was unhappy with this result and that he, Coats, believed that SCA would be required to compensate AFG for the loss which it would suffer as a result of it losing its "sub-lessor's entitlement". He said that he had told the applicant about the result of the meeting and his belief that it was appropriate to compensate AFG for the loss which it would suffer.

(l) On 9 June 1992 AFG wrote a letter to SCA calling upon it to finalize matters relating to the arrangements between AFG and SCA. Rudzitis, who wrote the letter, said that AFG was not prepared to release SCA or SAS from their obligations and also suggested that it was not prepared to release the US.$585,000 which SCA had advanced to AFG by way of security deposits on 14 May 1992.

(m) On 9 June 1992, the applicant transmitted, by facsimile, a letter to Cosse & Gould of AFG (A.85) in which he informed them that "Bill Ranken (of Were) will try and call you this evening". He also advised that there was doubt about the Queensland Government accepting a sub-underwriting commitment of A$10 million but that, even if it did not, "Your exposure will be US.$3.9 million, so we need to discuss how we can make this figure sound commercial in such an agreement". The applicant concluded the letter by saying:

"I would appreciate that you don't seem concerned by this amount when Ranken calls you. It just means that we will have to fund you for more than we would like to do and you in turn will have to invest somewhat more than you would prefer."

(n) On 11 June 1992 a letter was sent by Rudzitis of AFG to the applicant and Coats which the Crown alleged triggered a series of events which went to the heart of the applicant's frauds against SCA. The letter (identified as A.82) followed the break-down of the aircraft leasing arrangements which had been proposed for the lease of the three SAS aircraft.

The letter referred to "our conversations with Mr. D. Reid" and enclosed "attached letters" which were to be signed, if acceptable, and returned to AFG by the following Friday. The "attached letters" outlined a commercial agreement between AFG and SCA entirely different from the one which had been previously agreed in the "commitment letter" of 14 May 1992. The proposed agreement contained an acknowledgment by SCA that it should compensate AFG for the "lost income stream" which the direct lease arrangement between SAS and SCA of the 3 MD-82 aircraft had occasioned to AFG. AFG was prepared to release SCA from its obligations under the "commitment agreement" on the basis that SCA agreed to pay to AFG "an amount equal to the present value of the difference between the rental stream SCA proposed to pay to [AFG] and the rental stream [AFG] proposed to pay to SAS". This was called the "present value amount" (PVA) and was to be calculated according to a formula which was set out in the letter and which was designed to produce a lump sum the equivalent of US.$20,000 payable monthly over a 72 month period in respect of each aircraft. So calculated, the PVA came to US.$3,793,476.77 (about A$5 million).

(o) On 13 June 1992 the arrangements referred to in the preceding paragraph were formalized in the form of a "letter agreement" (A.3) signed by Coats on behalf of SCA and Rudzitis on behalf of AFG. By this agreement SCA bound itself to pay the PVA "on or before 23 June 1992" unless the agreement was "terminated by mutual consent" before that date. In addition, SCA agreed to pay AFG its "out of pocket expenses" incurred by it in procuring the SAS aircraft for SCA.

It was the Crown's allegation at trial that this agreement placed SCA in a hopeless financial position. SCA did not have the means by which to pay such a capital sum. The negotiation of the so-called "PVA agreement", so the Crown alleged, was the trigger for a series of frauds which the applicant perpetrated on the company. For his part the applicant contended that the negotiation of the agreement was entirely a "frolic" of Coats and that he knew nothing about it until the commitment had been made. The measures which he thereafter took to cope with the problem were, he said, taken with the authority of the Board and were in the interests of the company.

(p) On the same day as the "PVA agreement" was signed, namely 13 June 1992, AFG, through Gould, presented an alternative arrangement to SCA. In a letter addressed to the applicant and Coats (A.4) Gould said that AFG would be prepared to release SCA from its obligation to pay the PVA on condition that SCA, by 23 June 1992, could find an alternative sub-underwriter "to assume all of the obligations of AFG-SCROSS Ltd pursuant to the agreement entered into between [that company] and [Were]". This offer was made on the further condition that SCA procured from Were an unconditional release from AFG-SCROSS Ltd's obligations under the sub-underwriting agreement. As a further price of being relieved from its PVA commitment, SCA was to agree to enter into a Financial Services Agreement (FSA) with AFG. This alternative offer made by AFG was labelled by it as "Scheme B" and, so the Crown alleged, was the scheme which the applicant preferred.

(q) Nothing happened until 22 June 1992 when AFG sent an invoice to the applicant calling upon SCA to pay the PVA of approximately US.$3.793 million (A.5). Receipt of that invoice prompted a telephone conversation between the applicant and Gould because on 23 June 1992, Gould wrote a letter (A.88) to the applicant, referring to the conversation which they had earlier had and informing him that AFG was:

"indifferent to either `Scheme A' or `Scheme B' as were defined during our conversation."

He then went on to describe "Scheme A" as the PVA agreement which involved the payment by SCA of the US.$3.79 million, pursuant to which AFG would retain its reduced sub-underwriting commitment. "Scheme B" required SCA to find an alternative sub-underwriter; to procure a release from Were; to compensate AFG for its "out of pocket expenses" and to enter into the FSA, which was to be for a period of five years and pursuant to which SCA was to retain AFG for all transactions involving the acquisition and/or disposition of aircraft and spare parts and also the financing of aircraft.

(r) On 26 June 1992 the applicant wrote a letter (A.225) to Gould and Cosse of AFG in which, so the Crown contended, he opted for "Scheme B". He referred to "recent telephone conversations" and, having confirmed that the "underwriting shortfall" would be 65% of the amount underwritten, he concluded:

"I will let you know on Monday ... the actual amounts which are being taken up by your replacement underwriters and which companies are involved because each of the companies are nominating more than one subsidiary to undertake their respective proportions of the underwriting commitment."

The evidence of Cosse, admitted pursuant to the Foreign Evidence Act, was to the effect that AFG had been told by the applicant that he had arranged for a group of "institutional investors" to take up the sub-underwriting commitment of AFG-SCROSS Ltd.

(s) As the Crown contended, AFG was adamant, once the applicant had indicated that SCA wished to pursue "Scheme B", that it should enter into the FSA. On 26 June 1992 Gould wrote to the applicant enclosing a "form of the [FSA]" which AFG proposed (A.89). He also alluded to the fear that Were might not be prepared to release AFG-SCROSS Ltd. from its sub-underwriting commitment and suggested that the problem might be overcome by a "back to back" sale and purchase agreement of the shares constituted by the shortfall. In other words AFG was suggesting that the replacement sub-sub-underwriters ("the investment group") pay the amount of the shortfall (estimated at A$4.462 million) to AFG-SCROSS Ltd. which would then immediately remit the same amount to Were with directions to issue the shares to the brokers for the "investment group", whom the applicant had nominated as Bell Buckle Securities Ltd. Ultimately, so the Crown alleged, this was the scheme agreed to by the applicant, purporting to act on behalf of SCA, to "buy out" the underwriting commitment of AFG. It was implemented by means of a draft "sale and purchase" agreement which had been sent by AFG to the applicant on 1 July 1992 (A.93) pursuant to which the brokers for the sub-sub-underwriters agreed to forward to AFG-SCROSS Ltd. the sum of US.$3,346,875 (the equivalent of A.$4.462 million) in payment for 8,925,000 shares in SCA. Upon receipt of the purchase price AFG-SCROSS Ltd. bound itself to use the proceeds to pay for the said shares which it was obligated by its sub-underwriting agreement to buy, and upon such payment to Were to deliver the shares, or direct delivery of them, to the brokers for the sub-sub-underwriters.

This agreement was returned to AFG-SCROSS Ltd. under cover of a letter written by the applicant to Gould (A.92) on 2 July 1992. The agreement purported to have been executed by "AFG-SCROSS Pty. Ltd. " and was signed by a "H.W. Black - Director".

(t) The Crown alleged that there never were any "substitute sub-underwriters", whether taking the form of "institutional investors" or "AFG-SCROSS Pty. Ltd." or "H.W. Black". This was, so the Crown contended, an elaborate fraud conceived by the applicant to avoid the immediate threat of the PVA agreement (Scheme A) whilst at the same time ensuring that the public offer of shares proceeded by deceiving Were and the ASC into believing that the sub-underwriting commitment of AFG was still extant. According to the Crown the applicant was able to perpetrate these frauds by gaining access to and using moneys held in the "float account" of SCA.

(u) On 30 June 1992 the applicant contacted Robert Tingiri from WBC. A file note of Tingiri of that date, exhibited at trial (doc.657) recorded that the applicant had called on that day to "discuss (the) possibility of a temporary increase in his facilities:", the reason given being that "he wishes to make certain payments on behalf of SCA totalling $5.00 M.". The file note also recorded that in support of this "temporary" accommodation the applicant would "deposit an NCD for $5 million". Tingiri gave his authority for the temporary excess on the basis that the Negotiable Certificate of Deposit was lodged.

On the same day, the applicant wrote to Tingiri (doc.39) confirming the conversation "whereby you agreed to advance me the sum of $5M. for a short term only ... against which you will hold a Negotiable Certificate of Deposit for a similar amount ...".

(v) Again, on 30 June 1992, a letter on SCA letterhead, and purporting to be signed by the applicant and Coats was sent to Tingiri authorizing him "to purchase on our behalf three Negotiable Certificates of Deposit for the undermentioned amounts, and for you to hold as security for advances to D.E. Reid in return for moneys owing to him from this company ...". The first of the NCD's authorized was for $5M. This letter was exhibited as Exhibit 656 in the trial. It was specifically the subject of count 7 on the indictment/presentment ("false accounting"). The Crown alleged that the signature of Coats was a forgery and further alleged that it was false in its substance because the company did not owe $5M to the applicant as the letter suggested.

The applicant said that Coats signed the document and was well aware that the money was to be obtained to enable the PVA to be paid to AFG. He claimed that the PVA was still owing and Coats knew it. The transaction was thus not undertaken with a view to gain for himself and was not dishonest.

(w) On the faith of the purported instructions given by SCA, WBC purchased a bank bill for $5M (discounted to $4.998 million) with a maturity date of 2 July 1992. The purchase was debited to the SCA Trust Account. However, before the "temporary accommodation" was advanced to the accounts of the applicant, Tingiri's superior, one Alexander, intervened and refused to approve such a loan to the applicant against security provided by the company.

(x) On 1 July 1992 the applicant went to a John Woods, a senior officer with the Commonwealth Bank. Woods gave evidence that he had spoken to the applicant on the morning of 1 July in the course of which the applicant had sought a loan of $5M from the Commonwealth Bank for the ostensible purpose of funding a payment to GPA. According to Woods the applicant told him that he was owed $5M by SCA and that he held in excess of 14 million shares in the company. Woods told the applicant that his bank would require a board resolution of SCA before the matter could proceed.

(y) On 1 July 1992, AFG wrote to the applicant enclosing an advice from their attorney, a Mr. Jack Miles of Messrs. Kelly, Drye & Warren, which confirmed that the "simultaneous purchase - resale structure" involving the sub-underwriting shortfall was an appropriate method of achieving what had been agreed. The letter (document A93) stated:

"it is acceptable to have our sub-sub-underwriters to wire the necessary funds to a U.S. account."

AFG enclosed with the letter the form of stock purchase agreement, to which we have previously referred, wherein the sub-sub-underwriters agreed to purchase the SCA stock held by AFG-SCROSS Ltd. for A.$4,462,500. AFG proposed, on receipt of that sum, to fund an identical amount to Were. AFG requested the applicant "to have the sub-sub-underwriters execute the stock purchase agreement tomorrow and to wire the funds immediately". It assured the applicant that, upon the receipt of the $4,462,500 from the sub-sub-underwriters, it would immediately forward a cheque for a similar amount to Were with the necessary instruction to issue the shares to Bell Buckle Securities or their nominee.

It was the Crown contention, in the light of this correspondence, that "Scheme B" was clearly in operation. It was further its allegation that the applicant desired to avoid payment of the PVA amount at all costs, but to engender the appearance that AFG-SCROSS Ltd was still underwriting the public share offer. The advice received from Kelly Drye & Warren confirmed that their instructions were that the applicant:

"had identified a group of Australian institutional investors willing to purchase" all the SCA stock held by AFG.

(z) On 2 July 1992 the applicant had a further discussion with Woods to which the latter deposed. Woods said that he was told by the applicant that he owned 14.876 million shares in SCA. The Crown allegation was, on the basis that this evidence was accepted, that the applicant was "counting" the AFG shares as his own. Woods said that the applicant had told him that A.$5 million had already gone to AFG and that he wanted an additional A.$5 million to pay to GPA. Woods said that he told the applicant that he would not be able to get Commonwealth Bank authority for such an advance for at least two weeks.

(aa) On 2 July 1992 the applicant gave a direction to WBC, on SCA letterhead, and purporting to be signed by Coats and Heard, as follows:

"You are instructed to redeem the Bank bill due today which you hold as security for temporary advances to D.E. Reid, and credit the proceeds to clear his obligations to your Bank." (document 658)

This direction was addressed to Tingiri. On the same day the applicant sent another letter, on his own private letterhead (part of 658) to Tingiri as follows:

"Please redeem the maturing Bank bill today 2 July 1992 and deposit the proceeds to my account as drawn in settlement of prior arrangements."

Tingiri did as he was instructed by these documents. The Bank bill referred to was for A.$5M and was the "Negotiable Certificate of Deposit" which had previously been drawn against the SCA Trust account.

The Crown asserted that this was a theft of SCA moneys. The signatures of Heard and Coats, it alleged, were forgeries. No Board authority was given for the payment and, it was said, no money was owed by SCA to the applicant. The money went to the applicant's private account to reduce the overdrafts which were then owed to WBC. This was count 9 on the indictment, which alleged that the applicant, "on 2 July 1992, stole a bank bill to the value of $5 million belonging to [SCA]".

The applicant, in his evidence, did not deny that the $5 million had gone to reduce the overdrafts in a number of his or his companies' private accounts with WBC. He said, however, that he had made the arrangements through Tingiri to get the $5 million so that he could pay AFG the PVA amount which Coats had foolishly and without authority, obliged SCA to pay. He said that Tingiri's file note (see para (u)) confirmed his stated intention. He had intended the money to be forwarded to AFG on 30 June 1992 and that he had asked Tingiri on that day whether the amount had been forwarded and had been told that the payment had been "queried" by Tingiri's superior officer but that it would be sent on the following day. Thus, he said, at the time when he instructed WBC to redeem the NCD and credit the proceeds to his accounts, he believed that those accounts had already been debited with the $5 million PVA which he had agreed to pay on behalf of SCA. He did not discover until 11 July 1992 that the amount had not been sent and that, by then, the proceeds of the maturing bank bill had been credited to his private accounts. He said he had tried to get Tingiri to reverse the arrangements but had been unsuccessful. He had then taken steps to sell some of his overseas properties to repay SCA but all steps had failed. He agreed that the letters of direction (658) had been typed by his secretary, Collins, but that Coats had signed it and forwarded it to Brisbane for Heard to sign. He said that he did not forge the signatures to the document. Accordingly he said that there was no "theft" of the SCA bank bill because he had not acted dishonestly and, at the time when he directed the payment of the proceeds to his account, he had no intention of permanently depriving SCA of those proceeds.

The Crown contended that this evidence was patently false. By 30 June the PVA was no longer owing, as he knew, because he had "opted" for Scheme B. The Crown pointed out that he had never repaid the money and, indeed, had thereafter asserted to the Board that the money had been paid to AFG as "security deposits". Furthermore he had agreed that, on 30 June 1992, he was obliged to repay to WBC $5 million, for which WBC had been pressing.

(bb) In support of count 9 and, independently in support of count 8 on the presentment, the Crown also alleged that, on 2 July 1992, the applicant had forwarded to WBC a "document of authority" (document 661) signed by himself, and purporting to contain the signature of Heard, in the following form:

"By resolution of a properly constituted meeting of the Directors of the Company, the Company's banker [namely WBC] was irrevocably authorized at any time or times, without notice to the Company of the Bank's intention so to do, to appropriate the whole or any part of any balance for the time being standing to the credit of any one or more of the Company's accounts (present or future) with the Bank against the debt balance of any other account or accounts of the Company (present or future) with the Bank upon which occasions and in such proportions as the Bank may think fit - in express pursuance of the resolution, the Bank is hereby formally notified of the above authority and hereby irrevocably authorized accordingly. By Order of the Board."

This authority was signed by the applicant, as "Deputy Chairman of Directors", and purported to be signed by Heard, as director, of SCA.

The Crown asserted at the trial that this document was a total fabrication engineered by the applicant to "unlock the vault" of the only account of SCA which stood in credit; namely the Float Trust account. There was, so the evidence revealed, no such Board resolution and Heard denied that he had ever signed such authority. That evidence was supported by a hand-writing expert. It was the Crown's contention that the applicant had fraudulently created such authority in order to fulfil the arrangements he had made with AFG and GPA. Some $5 million was owing to GPA for "security deposits" and, so the Crown asserted, the applicant needed the $4.462 million which he had agreed to pay AFG for the "back to back" stock purchase.

The applicant's defence to count 8 (which alleged "false accounting') was that he had created and signed the document, but that Heard had also signed it. He said that Heard had agreed to sign the document because it would "save the company a great deal in bank interest". He further said that the Trust Account was still under the control of Coopers & Lybrand and could not be used. He said that although there had been no formal Board resolution, Heard was aware of the direction which was designed to "give comfort" to WBC that when the "float moneys" did become available, it would be entitled to draw on the account. There was therefore no dishonesty.

(cc) Again, on 2 July 1992, the applicant wrote a letter (doc 659) on SCA letterhead, signed by himself as "Executive Deputy Chairman" and his secretary, Collins, as "cheque signatory to the account of [SCA]", to Tingiri of WBC. Inter alia, the letter stated:

"I would be grateful if you would receive from us, the undermentioned irrevocable authorities, and debit our account number 10-7415 for the cost of same. 1. Telegraphic transfer of AUD 4,462,500 (equivalent of US dollars) to be sent to [AFG], the Chase Manhattan Bank N.A. ... A Number 021 000021 Account Number 039-1160181 Reference AFG-SCROSS. 2. Telegraphic transfer to Chase Manhattan Bank, New York, Swift Code CHAUS 33 for US.$3,600,000 - for account of: Allied Irish Bank plc, account No.001-1-067899 for credit to Irish Aerospace Limited Account No. 01-94335-37."

These sums of money, the Crown alleged, were, first, the sum which the applicant had agreed to pay to AFG to "buy it out of its underwriting role" and, secondly, the amount agreed to be paid to GPA for security deposits.

The letter, in the form which we have described, was not found in the SCA files. In its stead there was to be found another document, purporting to be a copy of the letter (doc 2685) omitting the reference in paragraph 1 to "AFG-SCROSS". The Crown alleged that the latter document had been "doctored" by the applicant to support his contention that the money advanced to AFG was for "security deposits" and to conceal any reference that it was a sum being paid to purchase the company's own shares.

(dd) Again on the same day, 2 July 1992, the applicant wrote, in his capacity of Executive Deputy Chairman of SCA, to Gould of AFG (A92), informing him that "we did not get all the proceeds in from the various sub-underwriters in time for the Bank to remit same today" and further informing him that he would get them "for value Friday 3 July".

Clipped to this document was a copy of the last page of the "Share purchase agreement" which had previously been sent to him by AFG for signature by the sub-sub-underwriters. This document represented the purchaser to be "AFG-SCROSS PTY Ltd" over the name of "H.W. Black; director".

The Crown alleged, as we have previously stated, that there was no such company and no "H.W. Black", and that the applicant was using the company's money to buy the shares effectively for himself. This was the theft alleged in count 11. The Crown asserted that this was the fulfilment of "Scheme B" and made a mockery of the applicant's claim in defence to count 9 that the PVA was still owing to AFG. The deceit of the applicant, the Crown said, was indicated by the claims which he was making to others that he owned more than 14 million shares in SCA.

The applicant's defence to the theft alleged in count 11 was that AFG, through its subsidiary AFG-SCROSS Ltd remained as a sub-underwriter of the float and that he was not responsible for the document describing the purchaser as AFG-SCROSS Pty. Ltd. or the name of "H.W. Black" as director. He pointed to the fact that AFG had thereafter dealt in the shares through Bell Buckle (count 18) He agreed that the $4.462 million had been paid to AFG but said that the amount was paid as "security deposits" for aircraft. He said that AFG wanted a "dollar for dollar" equivalent of the underwriting commitment to cover its risk in undertaking that commitment and also to indemnify SAS in the event that SCA breached its lease agreements. It was Coats who told him that AFG was entitled to these moneys and it was because of Coats' duplicity that the $4.462 million was sent to AFG. He agreed that he had approached Woods of the Commonwealth Bank for $5M but "it could not be done". He said that AFG wanted to use an off-shore entity for their sub-underwriting commitment but also wanted an Australian based nominee company "for tax purposes". He said that "they" had tried to replace AFG as sub-underwriter but had been unable to do so and, therefore, the "simultaneous sale and purchase" agreement did not proceed. He said that he and Coats had both signed the letter (2685) of 2 July 1992 authorizing the transfer of the A.$4.462 million. He could not recall signing what the Crown suggested was the "real authorizing letter" (659) but "presumed" that he had. He denied that he had stolen the $4.462 million to purchase SCA shares but he agreed that under "Scheme A" AFG would not "underwrite" unless they were paid the PVA amount. He also agreed that he had written to AFG on 26 June telling them that he "had found replacement underwriters". In further cross-examination, the applicant agreed that, on his account, by 2 July 1992, both the PVA and the $4.462 million security deposits had to be paid to AFG. He also agreed that none of the letters passing between AFG and himself called for the payment of a security deposit in the amount of $4.462 million. He also agreed that the correspondence, to which we have referred, suggested that "Scheme B" was on foot, and that there was no claim for the PVA until later when AFG claimed it because SCA had not entered into the FSA. The applicant continued to blame Coats for the predicament in which the company found itself, although he agreed that he was responsible for most of the correspondence.

(ee) The evidence admitted under the Foreign Evidence Act, generally supported the case made by the Crown on counts 9 and 11. Cosse said that, between 13 and 23 June 1992 the applicant told him that he "had put together an investment group" to relieve AFG of their sub-underwriting commitment; that the AFG lawyers had prepared the "sale and purchase agreement" which he had received back from the applicant in the name of "AFG-SCROSS Pty. Ltd., H.W. Black director"; that he believed that company was a holding company for the "institutional investors"; it was not a subsidiary of AFG. AFG had received the transfer of $4.462 million and that sum was "immediately turned around" and sent to Were. AFG had never received a "deposit". He said that AFG had received from Were, in July 1992, a "substantial shareholder notice" and, when he queried the applicant he had said it was an "administrative problem" and not to "worry about it". He said that SCA had consistently failed to honour the FSA agreement which it had undertaken to do as part of "Scheme B" and that, in November 1992, he had instructed Kelly Drye & Warren to make a demand for the PVA. The applicant had come to New York following that demand and agreed to sign the FSA if AFG would withdraw its demand for the PVA. On 1 December 1992 AFG instructed its lawyers to write to SCA withdrawing the demand (A425). We refer further to these matters hereafter.

(ff) Following the transfer of the $4.462 million to AFG on 3 July 1992 (count 11), AFG wrote to the applicant on 6 July (A10) confirming that it had wired the same amount back to Were. In that letter the author said:

"I would be personally grateful if you could sign and facsimile to me the [FSA] between AFG and [SCA] sent to you last week ... ."

Again, on 17 July 1992, Gould of AFG wrote to the applicant (A239) saying, inter alia:

"... Rick [that is Cosse] has informed me that [SCA] have not as of yet executed the [FSA]. Could you please arrange to have the document duly executed ... I do not believe it is necessary to remind you that until the [FSA] is executed, the operative document existing between [AFG] and [SCA] remains the Letter Agreement dated June 8."

On 20 August 1992 Gould wrote a further letter to the applicant (A18) again calling for the execution of the FSA and stating:

"All of our efforts have been consistently rebuffed by [SCA] through a process of continual deferment on your part ... . Please remember that pursuant to the Agreements, [SCA] presently owes [AFG] an amount approximating US.$3.75 million." (that is, the PVA).

Further correspondence was sent from AFG to the applicant calling for the FSA until, finally, on 23 November 1992 the formal letter of demand was sent claiming the PVA in default of the execution by SCA of the FSA (this correspondence will be referred to in the context of summarising later counts on the presentment).

266. This was the fourth and final count of theft on the presentment and involved negotiations between the applicant and another group of supporters (FOC) who had agreed to assume sub-underwriting commitments with Were. The count alleged a theft of $1,013,500 belonging to SCA.

269. FOC was a group of people, who had previously been employed by the failed Compass Airlines, who wished to back the new venture of SCA. Their spokesperson was one Geoff Lockley. Lockley gave evidence that the applicant had asked FOC, in April 1992, to sub-underwrite the public share offer to the extent of $1.7 million. FOC had thought they would be able to do so and signed a sub-underwriting agreement with Were. As time progressed they found that they were unable to do so and, in May and June 1992, Lockley informed the applicant that FOC could not meet its commitment. The applicant assured them that he would personally meet it on behalf of FOC. On 1 July 1992, Were advised FOC that there was a shortfall and Lockley wrote to the applicant on 10 July and advised him that, as FOC had been able to raise some of the moneys due under its commitment, the shortfall owing to Were was $1,013,500.

272. On 17 July 1992, the applicant drew a cheque for that amount on the SCA account with WBC. He went to Heard and requested him to counter-sign the cheque, telling him that the sum was owing for a bank guarantee of $1 million required by Melbourne Jet Base to secure its agreement to perform maintenance services on SCA planes. The remaining $13,500, so the applicant told Heard, was for "stamp duty". Heard said that he was induced to sign the cheque as a result of these representations. The applicant, so the Crown alleged, then used the cheque to buy SCA shares for himself and members of his family.

275. An officer of Melbourne Jet Base gave evidence that, although the company had required security from SCA, it was not required in cash. They had in fact, received a bank guarantee from SCA on 6 August 1992.

278. The applicant said in evidence that he had not made the representations which Heard said that he had. The day of 17th July was, he said, a "frantic day" because it was the day for allocation of shares to the public subscribers. He said the Board was aware that they were "$1 million short" and without it, the venture would have failed. A cheque, therefore, had to be written "then and there". He had spoken to Sir Leo in Heard's presence. He said Coats spoke to Melbourne Jet Base to see if they would take up shares. They said they would not although Coats said they would "later". None of these matters was put in cross-examination to Sir Leo, Heard or the officer from Jet Base. The applicant said:

"So we wrote a cheque out for that amount of money for the float, and I asked Mr. Coats if he could put them in his name temporarily and he said yes ... but he could not do it in Brisbane - so in the end I had to hold those shares in my name."

He agreed that the company's money was used and not refunded because the shares never traded "at par". However he said that he had insisted that they be held in a "separate tranche" so that they could be "replaced". He said that what he had done was "stupid" but not dishonest.

The Second Phase; August 92 to January 93, Counts 13-23

284. It was the Crown case that the remaining counts on the presentment (13 to 23 inclusive) represented a course of deceitful conduct on the part of the applicant which was, in large part, motivated by the applicant's desire to conceal from the company, its auditors, the stock exchange and others the various frauds which he had already committed and the parlous financial state in which the company had been left as a consequence of those frauds.

288. These counts, so the Crown alleged were a series of frauds perpetrated by the applicant upon the Stock Exchange, SCA, its directors and auditors, in order to conceal the true nature (as the Crown alleged it to be) of the transactions through which the applicant had secured the payment of $5 million to his own accounts on 2 July 1992 (count 9) and had directed the payment of $4.462 million to AFG for the purchase of SCA shares (count 11). Counts 13, 15 and 17 alleged offences against the Corporations Law of furnishing information relating to the affairs of SCA knowing that it was false or misleading in material particulars. Count 14 alleged an offence of "false accounting" contrary to s.83 (1) Crimes Act (Vic.).

292. On 3 August 1992, the applicant sent a "Notice of Interest of Substantial Shareholder" (document 2180) to Ms. Kate Kidson of the Australian Stock Exchange representing that it was sent on behalf of AFG to declare its substantial shareholding interest of 8,925,000 fully paid shares in SCA. The covering letter (document 2008) stated, inter alia:

"We are enclosing herewith a copy of Form 603 Notice of Interest of Substantial Shareholder, which we received from [AFG] with the request that we forward it to you."

Inter alia, the form 603 Notice stated that AFG had become aware on 29 July 1992 of being a substantial shareholder. It further stated that:

"P.P.P. Nominees is holding the shares as nominee of AFG-SCROSS Pty. Ltd. which is a wholly owned subsidiary of [AFG]."

This document purported to be on the letterhead of AFG which, so the Crown alleged, had been "cut and pasted" onto the top of the document. It also purported to bear the signature of Cosse as "director" of AFG which, again, the Crown alleged was forged.

299. The issue in respect of the count was simple: Did the applicant forge Cosse's signature and was the notice false and misleading in material particulars?

302. The statement of Cosse (an American witness) asserted the signature was not his, nor was the document. AFG, he said, had divested itself of the shares in favour of "the replacement investment group" pursuant to the "share sale and purchase agreement". There was also evidence from a hand-writing expert that the affixed signature of "Richard Cosse" was a forgery.

305. In his defence, the applicant said that he had requested his secretary, Collins, to type up the document and had "cut and pasted" the AFG letterhead onto it. He said, however, that Collins had "faxed" the completed document to AFG where Cosse had signed it and returned it. He repeated his assertion that AFG remained the owner of the shares. There are, and were, however no indications on the relevant document that it has been sent by facsimile.

309. This count alleged that, on 26 August 1992, the applicant had dishonestly falsified a document (document 909) required for an accounting purpose by sending to Louise Sullivan (the company's accountant), in response to a request from her, a document indicating that SCA had paid A.$4,462,500 to AFG on 3 July 1992 as a security deposit. Sullivan said that she was told by the applicant that that was what the payment was for and the Crown alleged that the applicant gave the information, knowing it was false, to ensure that that was how it would be represented in the accounts of SCA. It was furnished, the Crown said, to ensure that the company and its board of directors would not know that, in fact, the sum had been used to purchase the company's own shares. It was the applicant's case that the money had been sent to AFG as a "security deposit", and accordingly the document was not false nor had he acted dishonestly. The issue was again a confined one.

(iii) Count 15 (furnishing false information to auditor)

313. On 14 September 1992, Ms. Wendy Burge of Arthur Andersen, who was the audit manager for SCA, raised some queries with the applicant in the course of completing the audit report and statutory accounts of the company for the financial year ending 30 June 1992. In the course of completing her work she was often in contact with the applicant. She was, in particular, interested in a payment of A.$4,998,178.75 which was recorded in the books of the company as "lease payments". (This was the sum alleged, in count 9, to have been stolen by the applicant - that is the sum which the applicant claims was the PVA due to AFG.) The queries which Burge made were in a handwritten document (document 713) intituled "Outstanding audit queries at 14 September 1992". One of the queries was in respect of the sum of A.$462,707, which was the subject of count 4. Another related to the sum of A.$4,462,500 which was the subject of count 11. A third one was in respect of the aforesaid sum of A.$4,998,179.00, which was the so-called PVA amount of A.$5 million less the bank charge for the transfer. In respect of this last amount Burge said that she was told by the applicant that the sum had been paid to AFG as compensation for profits which it had lost when SAS refused to lease their aircraft to SCA via a sub-lease through AFG. Burge was concerned to know whether the sum was "refundable or not" because, depending upon the answer, it would be treated differently in the accounts. She was then given by the applicant a copy letter, dated 8 September 1992, purporting to have been written and signed by John Hayes of AFG and directed to the applicant stating, inter alia, that AFG was "willing to consider re-funding this pre-payment which we received from you on 30 June last on the basis that you would pay the amount of US.$20,000 per month for each aircraft leased direct to [AFG] for the period of the lease".

316. In a further letter written by the applicant to Burge on 15 September 1992 (document 627) the applicant stated in respect of this same matter:

"There have been numerous telephone discussions with [AFG] and I requested a letter from them which does not advance the matter very much further. Principals from the company (that is, AFG) plan to be in Australia early October for further discussions in this regard."

320. The Crown, of course, alleged that all of this information was false and misleading because the applicant knew very well by September 1992 that the amount of $5 million, which was being queried, had been paid by WBC, at the applicant's direction, into his various bank accounts where it had remained. The Crown was able to support its assertions by reference to the evidence of Collins, the applicant's secretary, and her shorthand notes (document 2178), which demonstrated that she had typed the letter dated 8 September 1992, on 15 September.

323. Burge also gave evidence in relation to the query which she had made in relation to the payment of A.$4,462,500 which had been made by SCA to AFG on 3 July 1992. She explained why she had made the inquiry even though the payment was said to have been made after the end of the financial year in respect of which she was conducting the audit. In his letter dated 15 September 1992 (document 627) the applicant had explained this payment as follows:

"b. Aircraft security deposits Attached is correspondence from [AFG] regarding security deposits of US.$3.3 million, which the Australian equivalent was $4,462,500, and we have requested likewise details on the security deposit from G.P.A. but, at the present time, have not had a response. We are following up on this."

327. The "attached correspondence" which the applicant gave to Burge was a letter (document 709) purporting to have been written by Gould of AFG to the applicant on 1 July 1992. Collins, the applicant's secretary, said that she typed this letter on 15 September 1992, when the applicant was responding to Burge's queries. So far as relevant that document stated:

"As per clause 25 of the Letter of Intent executed on May 13, we hereby give notice that we require from [SCA] additional security of US.$3,300,010. This money will be held by [AFG] until such time as [AFG] negotiates final agreement with [SAS] in relation to the agreement entered into with them on February 20, 1992 in relation to the three McDonnell Douglas MD-82 aircraft which are the (sic) subject to the separate leases which [SCA] have entered into with S.A.S. Once [AFG's] obligations in relation to these aircraft with SAS have been extinguished, which we expect to be early October, we would then as previously advised return to you the said deposit plus interest."

331. Once again the Crown alleged that this information was entirely false and misleading because, so it alleged, the sum of $4,462,500 had been paid to AFG as a consequence of the "share sale and purchase" transaction by means of which AFG had been relieved of its "sub-underwriting commitment". The Crown supported its contention that the letter was a forgery, not only by the evidence of Collins, but also by the evidence of Mr. Dick, the expert, who said that the signature of Gould was a forgery.

334. As a result of the information which she had received, Ms. Burge said that she had dealt with the two payments of $5 million and $4.462 million dollars in the audit report in accordance with that information. She said that she would have treated this payment quite differently if she had been told that the payment of $5 million had not gone to AFG at all, and the one of $4.462 million was a non-refundable payment.

337. The applicant's response to the Crown's allegations in respect of this count was, in essence, this. In respect of the sum of $5 million, he agreed that he knew that such amount had never gone to AFG and that he had acted dishonestly every time he had furnished information to the board or to the auditors suggesting that the PVA amount had been paid to AFG and/or that it was "refundable" by that company or that AFG had any obligations in respect of it. He agreed that he had caused Collins to "prepare" the letter dated 8 September 1992 but said that he had sent it to AFG and that Hayes had signed it. He said he could not remember giving the letter to Burge. Nor could he recall giving the "Gould letter" to her. He denied affixing the signatures of either Hayes or Gould.

341. Again this count alleged that the applicant, as an officer of SCA, had furnished false and misleading information to the SCA Board in respect of the aforesaid payments to AFG by giving such information to Clayton Utz, solicitors, with the intention that they should be influenced by it in their report to the SCA Board.

344. Evidence was given by various directors of ASC, namely Heilscher, Tucker, Masel and Guilfoyle, that they were becoming concerned by September 1992 that what they believed to be security deposits on aircraft, which they believed were held by AFG, were not being refunded. Heilscher said that he had been told by the applicant that the deposits would be returned in two parts, the first in October and the second in December. When no part of the deposits had been returned by October, the board decided to institute an inquiry through an "independent" solicitor who was to be asked to furnish an opinion about possible breaches of s.205 of the Corporations Law and the return of security deposits. Mr. McDonald of Clayton Utz was asked to enquire.

347. McDonald said that he had received documents from the applicant and Coats. One of these documents was a letter (document 489) "faxed" by the applicant to McDonald on 2 December 1992, sent in response to queries raised by McDonald on the previous day. Two of these responses, contained in paragraphs 6 and 7 of the applicant's letter were:

"6. The security deposits were paid to [AFG] on 3 July 1992. 7. The amount of the security deposit paid to [AFG] was approximately AUS.$8,500,000 and was based on their assessment of the risk they were undertaking by indemnifying SAS for any loss they may incur as a result of breach by SCA in the performance of its obligations under the lease."

Additionally, in his letter, the applicant "confirmed" that:

"1. ... there is no other correspondence touching on the circumstances of this matter. 2. There was certainly no arrangement or understanding that the entry by [AFG] into the sub-underwriting agreement was conditional upon entry by SCA into the lease arrangements. 3. The security deposit monies paid to [AFG] were from an overdraft account of SCA and not monies raised by the Prospectus."

The Crown alleged that this information was false, and led McDonald into giving to the board a false opinion.

354. Furthermore the applicant furnished to McDonald two further documents (numbered 2682 and 2683) purporting to be letters, respectively dated 22 June 1992 and 26 June 1992. The first of these documents purported to be on AFG letterhead and to contain an agreement signed by Gould, on behalf of AFG, and the applicant on behalf of SCA. The second document purported to be a letter from Gould to the applicant, again on AFG letterhead.

357. The Crown alleged that each of these documents was a forgery created by the applicant to mislead McDonald and, through him, the board of SCA. The first document (2682) referred to the letter of commitment of 14 May 1992 in respect of the proposed leasing of aircraft by SAS to SCA, through AFG, and went on:

"In order to accommodate the wishes of both SAS and SCA, [AFG] hereby releases SCA from its obligations to [AFG] ... provided that SCA agrees to pay and does pay to [AFG] the Security Deposit as referred to in paragraph 25 of the Commitment Agreement."

"pursuant to such Commitment Letter, SCA is required to remit to [AFG] a Security Deposit on or before 30 June 1992. Please accept as formal notification and invoicing of such payment amounts, SCA should remit to [AFG] US.$7,003,660 ... ."

365. There was a third document (No.485) furnished by the applicant to McDonald which the Crown alleged, and the defence accepted, was a forgery. It purported to be a facsimile letter sent to the applicant on 2 December 1992 by a Simon Tudor-Price, a partner in the firm of Clifford Chance whom, as we have previously noted, were the London based solicitors of SAS. This letter purported to advise, inter alia, that:

"... in relation to your query, regarding indemnity arrangements, that AFG and its parents have given separate indemnities to SAS against any loss, consequential or otherwise, that SAS may suffer in the event that `there is any default under the leases or there is any breach by [SCA] of any obligation, covenant or warranty ...'."

369. There appears to be no dispute that McDonald was influenced by these documents to report to the Board on 4 December 1992 that there was no breach of s.205 Corporations Law and that the "Security Deposit would at least be repayable at the expiry of the lease".

372. The applicant's defence to the Crown allegations in respect of this count conceded that he had furnished some false information in his letter of 2 December 1992 (489) to McDonald. Again he said that Coats was at fault for negotiating the agreement with AFG which bound SCA to the PVA. The applicant said he continued to conceal the facts relating to the PVA because Coats had requested it. The applicant said he did not "create" the forged letter from Clifford Chance despite the fact that he had sent it to McDonald and it purports to be addressed to him. He further agreed in cross-examination that he had produced document 2682 "some time after 22 June 1992" but that he had asked Gould to clarify for him some points concerning the leasing of the aircraft and to clarify the "security deposit" of $4.462 million. He said that he directed Collins to type the letter on AFG letterhead, and backdated it. Gould however agreed to the letter and he, the applicant, signed it. Again he said he had acted "stupidly" but not dishonestly to protect Coats.

376. This count also alleged an offence against s.1309 of the Corporations Law in that, between 23 November 1992 and 4 December 1992, the applicant had, as an officer of SCA, furnished information to Coats, a director of the corporation, which related to the affairs of the corporation and was known to him to be false or misleading in a material particular.

379. The Crown alleged, in support of this count, that the applicant gave to Coats a letter from AFG's lawyers which he had "doctored" to make it appear that AFG was unconditionally withdrawing the demand for payment of the PVA of approximately $5 million. As we have previously noted there had been, following the "simultaneous purchase and sale" of AFG shares, a series of acrimonious letters sent by AFG to the applicant reminding him that it was part of the agreement between AFG and SCA that SCA would, in consideration of AFG foregoing its claim to the PVA, enter into the financial services agreement (FSA). Ultimately, on 23 November 1992, AFG instructed Kelly Drye & Warren, its attorneys, to write to SCA (through the applicant) calling upon it to pay the PVA. This letter was signed by William A. Escobar of Kelly Drye & Warren and was referred to at the trial as "the Escobar letter". Having referred to the history, the letter (A424) concluded:

"On behalf of [AFG] we demand that SCA wire-transfer the sum of US $3,793,476 by 3 p.m. New York time on November 30, 1992 ... . If [AFG] does not receive full payment as requested, we will initiate legal action to recover the foregoing amount together with interest at the rate of 9% per annum from 23 June 1992 ... ."

383. The prosecution alleged that the letter of demand placed the applicant in a difficult position. He knew that the PVA amount had not been sent but had been representing to the company that it had been; but as a refundable "deposit", the return of which was "imminent".

386. A copy of the "Escobar letter of demand" had been sent to Coats. He said, in his evidence admitted under the Foreign Evidence Act that he had queried the "demand" with the applicant and that the applicant had told him that AFG was "sabre rattling". Accordingly the applicant said that he was going to the US to speak with them.

389. The applicant in fact went to New York on 25 November 1992, almost immediately after the Escobar letter had been received. Coats had instructed Robert Townsend, the Finance and Administration Manager of SCA, to accompany the applicant to the meeting with AFG. Townsend said that, at the "last minute" the applicant told him that he was not to come as AFG "requested that he (the applicant) alone should go".

392. Following the meeting between AFG and the applicant on 25 November, another letter (A425) was sent by Escobar of Kelly, Drye & Warren on 1 December 1992. It was addressed to the applicant in his capacity as Deputy Chairman of SCA and, insofar as material, stated:

"In light of your discussions with Messrs. Gould & Cosse at [AFG] on November 25, 1992 [AFG] has asked me to withdraw the demand in our letter to you of November 23, 1992. [AFG] will not initiate legal action at this time on the agreement that good faith negotiations to arrive at a settlement prior to December 31, 1992 will continue. [AFG], of course, reserves all its rights if a satisfactory arrangement is not reached by December 31, 1992." (emphasis added)

396. The Crown alleged, in support of count 16, that the applicant created a falsified version of this document by deleting the words which we have italicized and had sent the altered copy to Coats in order to alleviate the concern which he had expressed following the receipt of the previous demand on 23 November. According to the evidence of Coats, the applicant informed him that AFG would be returning the "deposits" in "late December, early January". He said that, before the Board meeting in early December, the applicant had sent him a copy of the second Escobar letter (dated 1 December), as a result of which he was not aware that [AFG] was only "conditionally withdrawing" its demand for the PVA until the end of December. At the meeting of the SCA Board on 4 December 1992, the applicant had reported on his meeting with AFG and said that he expected a resolution of the "deposits" dispute "quite soon".

399. In his defence the applicant denied that he was responsible for the edited version of the second "Escobar letter" of 1 December. He further denied that he had "faxed" an edited version of the letter to Coats before the meeting of the Board. He said that a copy of the letter had been sent to Coats and that he, Coats, must have been responsible for the "editing".

403. This count alleged that the applicant had, contrary to s.232 (2) of the Corporations Law, failed to act honestly as a director of SCA, with intent to defraud the company, in that, between 24 December 1992 and 18 January 1993, he endeavoured to conceal the true source of a payment of AUD $1,033,112 to SCA.

406. The Crown allegation was that the evidence supporting the count was linked to count 11 because the explanation given by the applicant to the company in respect of the said $1.033 million (approximately) was designed to assure the Board that it was a part payment by AFG of the $4,464,500 which the applicant was asserting was a refundable "security deposit". In fact, as the Crown alleged, the money was realized from the sale of a parcel of SCA shares held by Bell Buckle Securities on behalf of AFG-SCROSS Pty. Ltd., being some of the shares which had been issued to AFG-SCROSS Pty. Ltd. following the "sale and purchase" transaction which had occurred in early July 1992 to relieve AFG of its sub-underwriting commitment. When a portion of these shares was sold to an organization called Advent Management Group, in the circumstances later described, part of the proceeds was remitted to SCA at the direction of the applicant, following which he represented that the sum was a part re-payment of "security deposits" which were owed by AFG. The motive for this, so the Crown alleged, was the desire by the applicant to lend credence to his assertions to the Board, in response to its repeated requests, that there were refundable security deposits owing by AFG to SCA. Indeed, so the Crown alleged, the applicant had, by October 1992, painted himself into an almost inextricable corner as he was striving to conceal the frauds which he had perpetrated upon a number of entities. On the one hand he was seeking to keep the Board of SCA at bay by representing to it that the "refundable deposits" in the hands of AFG would soon be returned; at the same time he was seeking to represent to AFG that it had no obligation to SCA. Indeed, it was alleged, he knew the converse to be the truth because he was doing what he could to stop AFG from demanding the PVA. Additionally he was in trouble with WBC which was calling for repayment of overdrafts. To this end, so the Crown asserted, he was telling the bank he would soon be in funds through sales of SCA shares and other assets. However, when dealing with SCA and others, it was the Crown allegation that he continued to represent that AFG, through its subsidiary AFG-SCROSS Ltd, still held a large number of shares in SCA. Thus, so the Crown alleged, the applicant "was, with a limited amount of money, playing one off against the others".

409. It was in this context that it was alleged that the dishonest conduct, asserted in this count, occurred. In April of 1992, a Ronald Finkel, the investment manager of an organization called Advent Management Group, had met with the applicant and shown some interest in taking up shares in SCA. In the upshot Finkel had indicated that his Group would wait until SCA became operational, at which time it would re-consider its position.

412. Finkel did eventually agree to purchase shares in SCA; but not until 15 December 1992. In the meantime, and knowing of Advent's interest, the applicant, so the Crown alleged, had dictated fictitious letters on Advent letterhead purporting to display Advent's earnest desire to take up shares in the company. These letters were, according to Collins, dictated to her by the applicant in late October and early November 1992 but back dated to 12 June 1992 and 2 October 1992 respectively. Collins said she was instructed to type the letters over the name of "Ron Finkel" but to add a "p.p. signature" of her choice (these letters were documents 461 and 2062 respectively).

415. Document 461, the letter which bore the date of 12 June 1992 purported to be addressed by Finkel to the applicant. Having referred to the fact that Advent would "hold off investing until you have had your shares listed", the letter continued:

"As we will be looking to take a considerable parcel we welcome the opportunity to discuss making such an investment by way of private placement. ... We look forward to continuing our discussion regarding the purchase of your company's stock by way of a private placement over the next 3 or 4 months, at which our tourism investment fund will be fully established."

Document 2062, the letter bearing date 2 October 1992, again was addressed to the applicant and stated:

"Just a personal note to let you know that we have now received all the necessary internal approvals to invest in [SCA] ... ."

Neither of these letters, according to Finkel, was authorized or sent by him. The applicant, in his evidence, suggested that Tingiri of WBC must have dictated them to Collins to support a facility in favour of the applicant.

422. In fact, as we have said, it was not until 10 December 1992 that the Advent board approved an investment in SCA. By this time the applicant had told the SCA Board on 4 December that AFG would be refunding one of the security deposits in January 1993. This, so the Crown alleged, led the applicant to devise a scheme to sell some of the AFG shares which he had secured following the "sale and purchase" of those shares in July.

425. Finkel was aware that GPA had a parcel of SCA shares. He also believed that AFG held the shares which they were bound to take up pursuant to the sub-underwriting commitment. Because Finkel wished to negotiate a private sale he requested the applicant to provide him with "contact details" of AFG and GPA. The applicant provided only the details of AFG (doc.2057). Finkel however wrote to Townsend to secure the details of GPA; and approached them both.

428. The approach which was made to AFG surprised Cosse who contacted the applicant to ask why it was happening. Cosse said that the applicant explained that it was a "mistake" caused by a failure to remove the name and details of AFG as a sub-underwriter from the record. The applicant, according to Cosse, requested AFG to assist him in disposing of the shares because he was "embarrassed" by his apparent conflict of interest. Cosse agreed to do so. The Crown suggested that the AFG willingness to participate was driven by a desire to "keep on side" in the hope that it could settle the "PVA dispute" which was still extant. The applicant alleged that the AFG participation occurred because it still held the shares.

431. On 17 December AFG in fact offered shares to Advent on the terms dictated by the applicant; that is 34.5 cents per share.

434. On 21 December there was a further meeting of the Board of SCA. At this meeting the applicant told the Board that AFG would be refunding some $4.9 million in security deposits on the following day and the balance in January. He had explained that he had negotiated a settlement of outstanding claims with AFG. He produced an agreement (doc. 106) which the Crown contended was false.

437. On 22 December, Cosse of AFG sent a facsimile to the applicant's broker, Messrs. Bell Buckle, authorizing the applicant to negotiate a sale of 4,863,000 SCA shares to Advent at 34.5 cents per share. On the following day Advent purchased two parcels of shares; a parcel of 3.903 million for Advent Tourism Development Fund for $1,333,112.93; and a parcel of 960,000 shares for Austin Venture Capital at $331,200. Settlement of the first parcel was to take place on 24 December; and settlement of the second parcel on 4 January 1993.

440. The applicant directed Bell Buckle as to the manner in which the $1,333,112.93 was to be distributed. He directed that a cheque for $1,033,112.97 was to be drawn in favour of SCA and lodged in its Brisbane account. The balance of $300,000 was to be paid into his own account. Bell Buckle did as they were instructed. With regard to the second settlement sum of $331,200 which was received on 4 January 1993 the applicant directed the moneys to be paid into his account.

443. Townsend queried the applicant as to the provenance of the $1,033,112.93 which had been paid into the company accounts. He said that he was told by the applicant that this was the first of the part re-payments of the security deposits coming from AFG. Townsend said that they would need supporting documentation, but none was forthcoming.

446. The Crown contention was that the conduct of the applicant was dishonest and done with intent to defraud the company. He knew, so it was contended, that there were no refundable security deposits owing to SCA by AFG. In his desperation to conceal that fact from the Board, he had continued to sell shares, over which he had control, and which had been purchased with company money, to make it falsely appear to the Board that security deposits were in the course of being repaid.

449. The applicant's defence to this count were "straight denials". He denied that he had dictated the "Advent letters" as Collins had said he had. He persisted in the claim that the shares were AFG shares. He denied that he had told Townsend that the $1.033 million was a part re-payment of security deposits. He said that he had given directions for some of the moneys to go into his accounts because he was negotiating a deal on behalf of SCA with another company and he therefore paid the moneys which he had received back into the SCA accounts. He agreed, however, that he had not told the Board the truth about the PVA which had never been forwarded to AFG.

453. This was the one count on the indictment/presentment which alleged an offence of "dishonestly obtaining, by deception, property belonging to another".

456. The count alleged a fraud committed by the applicant upon a Western Australian company called Asia Pacific Ltd. in mid January 1993. At this time, so it was alleged, SCA was facing a liquidity crisis from which, as was shortly to be seen, it could not escape. On 15 January 1993 the applicant had written a letter to his "fellow directors" on the board of SCA (document 668), in which he had said that:

"This cash shortage has only been further escalated by the non return of the [AFG] deposits caused by that Company not being able to gain relief from SAS of its obligation in connection with our aircraft leases from SAS."

Having referred to further matters of history, which the Crown alleged were distorted in his own favour, he went on to say that he had "once again" agreed to assist the Company by way of the following support (inter alia):

"(b) Lend or procure the lending to the Company an amount of $8.427 million representing the balance outstanding from [AFG]. This advance would be repayable under the terms proposed in the Loan Agreement to be tabled at the Board Meeting."

462. The Crown alleged that this was another self-serving document designed to conceal from the Board of SCA the true state of affairs concerning SCA and [AFG]. The Board in fact accepted the applicant's offer.

465. At or about the same time Charles Kovess of Barker Gosling, solicitors for the applicant, contacted Ronald Woss, Chairman of Asia-Pacific Ltd, asking if Woss would be prepared to invest in SCA. Woss said that Kovess had told him that he was representing the applicant whom, he said, was a major shareholder and Deputy Chairman of SCA. Woss said that he was told that SCA was undergoing a temporary liquidity crisis and wanted some "bridging finance" pending the consummation of a substantive loan from WBC to the applicant. Woss told Kovess that his company would be prepared to provide such finance if it was satisfied that WBC was in fact extending a loan to the applicant, that SCA was solvent and that the applicant was prepared to give his guarantee.

468. On 3 February 1993, Kovess sent to Woss a letter (document 898) dated 29 January 1993 on SCA letterhead and signed by the applicant. The letter which was addressed to Kovess stated (inter alia):

"As you are aware my bankers - [WBC] - have approved ... a facility amounting to $14 million which is currently awaiting approval ... . This funding is required in order that I can make two secured loans to the Company totalling $14 million dollars in line with the documentation you are currently preparing."

The letter also asserted that SCA needed the funds because (inter alia) of the failure to repay security deposits of $10 million.

473. On 9 February 1993 Kovess sent a letter to Woss, a document (number 881) purporting to be on WBC letterhead and addressed to the applicant, setting out facilities which the bank was prepared to offer to the applicant. This letter was dated 25 January 1993, purporting to be signed by Robert Tingiri and "confirmed" that, "following the latest reduction in your facilities", the bank was pleased to offer a new facility of $16,650,000. Woss said that he accepted this letter, and the offer which it contained, as "authentic". Collins said that she had typed this letter upon the applicant's instructions.

476. On the faith of the representations made, Woss' company agreed to advance $1.7 million to SCA through a Barker Gosling Trustee company called "400 Lonsdale Street Pty. Ltd.".

479. The Crown alleged that the representations through which the advance by Australia-Pacific had been secured were false; that WBC had never agreed to provide the applicant with a facility of $14 million or $16.5 million; that the document purporting to come from Tingiri was forged and had been prepared by Collins; and that there was no "liquidity crisis" due to failure by others to refund "security deposits". Mr. Habgood, the Institutional Banking Manager of WBC said that the letter from WBC purporting to grant the applicant a facility of $16.5 million was not a WBC document and was not on the file of WBC. He also said that WBC had never given approval of a loan to the applicant of such an amount and, in the circumstances of his accounts in January 1993 would not have.

482. The applicant's defence to this count was that the WBC letter to him (document 881) was a genuine letter written by Tingiri. He said that Tingiri had told him that he was taking it to the Institutional Banking branch of WBC in Sydney for approval. He agreed that the reference to $10 million as "security deposits" was false but referred to the $5 million which was paid to his account (count 9) and the $4.462 million which went to AFG. He said that he honestly expected that WBC would approve the facility because he proposed to marshal all his assets to provide security. It was also put on the applicant's behalf that the evidence of Collins, who was an accomplice, should not be accepted because she had not asserted in her statement initially made to the ASC that this letter had been typed by her. Once again, the issues on this count were confined.

486. These three counts charged the applicant with making a false document with the intention of using it to induce another person to accept it as genuine and, by reason of so accepting it, to induce that other person to do an act to his or her or its prejudice (s.81A (1) Crimes Act 1958).

489. The counts all related to letters which the applicant presented to the SCA board at its final meeting held on 2-4 March 1993. The primary purpose of that meeting was to decide whether SCA could continue to trade given its liquidity crisis and, to that end, the applicant's progress in obtaining the facility which he had promised was to be a subject of discussion.

492. The Crown case was that the applicant presented to the Board three letters, respectively the subjects of these counts, which were false and which had been manufactured by him shortly before the meeting. The letter which was the subject of count 20 purported to be a letter from WBC signed "John Morris" and dated 1 March 1993 (document 849). Count 21 related to a further letter addressed "to whom it may concern" again purporting to come from "John Morris" of WBC (document 848). Count 22 related to a facsimile on the letterhead of "Coutts & Co" (document 847) purporting to be signed by its "Financial Manager" - one "G.N. Humphries". The effect of the "WBC letters" was to represent that the bank had approved a facility in favour of the applicant for $14 million ; and the impact of the letter from "Coutts & Co." was to make it appear that that bank was prepared to provide a guarantee to the applicant of more than two million pounds.

495. Collins gave evidence that she was instructed by the applicant to fabricate each of the letters. In an affidavit from Humphries, accepted in evidence, it was stated that he did not sign the document which was the subject of count 22. Habgood, from WBC, gave evidence that on 18 February 1993, the bank had considered a credit review application made by the applicant seeking an extension of his loan facilities. The document had been prepared by Tingiri. The application was not approved by Tingiri's superior and shortly afterwards Tingiri was suspended by the bank from his duties.

498. In his evidence the applicant conceded that each of these documents was a fabrication but that he wanted to "buy time". He said that he was hopeful that something could be done to rescue the airline and that "in desperation" he had asked Collins to prepare the letters from others that were on file. He agreed that they were "absolute lies", but he said that he was depressed at the time. He called psychiatric evidence as to his condition and, on the basis of that evidence, it was put on the applicant's behalf that he did not have the capacity to form the necessary intent.

502. This count alleged an offence of "furnishing to the Board false and misleading information" contrary to the Corporations Law. It, too, arose out of events which occurred at the Board meeting on 2-4 March 1993. The Crown alleged that the applicant furnished to the Board a copy of a letter received from Greg. Nankin of the Stock Exchange, which had been materially altered. Nankin had raised queries with SCA as a result of the substantial differences between SCA's forecast loss and the actual loss reported in its half yearly report which had been forwarded to the Exchange on 23 February 1993. In his letter dated 25 February 1993 (document 2001) addressed to the applicant, Nankin had expressed the concern of the Exchange that "your company has not provided sufficient information to the market prior to the announcement of the Half Yearly Report, that it would not be achieving the results as forecasted in the prospectus". He went on:

"In addition, we request that your company provide reconciliation of the Half Year Accounts to 31 December 1992, with the Accounts referred to in the prospectus, together with appropriate commentary on the differences." (our emphasis)

506. On 2 March 1993, the applicant sent Nankin a reply (document 2002) in which, inter alia, he said:

"[SCA] is completing a reconciliation of those results with the results forecast in its prospectus, and that reconciliation should be provided to the [Stock Exchange] by tomorrow morning."

510. On 4 March 1993, the Board of SCA which had been in meeting in Brisbane since 2 March 1993, became aware, from newspaper reports, of the Stock Exchange query and called for a copy of the letter from the Exchange. The applicant, who was then in Melbourne, was said to have facsimiled a copy of the letter which he had received from Nankin on 25 February 1993 (document 2005). This copy letter omitted the italicized paragraph to which we have referred in paragraph 110 in which the Stock Exchange had asked for a reconciliation. Coats who was present at the Board meeting telephoned Nankin and, as a result of their conversation, Nankin sent a copy of the full version of the letter to the Board. Heilscher said that this occurred after Nankin had called during the Board meeting calling for a reply to the Exchange queries. Coats had taken the call at the Board table and it had become apparent that there was one query of which the Board was unaware.

513. When the Board discovered that the letter sent to them by the applicant had been tampered with, it then moved to have a receiver appointed, and the company stopped trading.

516. In his defence to this count, the applicant said that he had given a copy of the Stock Exchange letter of 25 February 1993 to Coats and that he, personally, had not sent the copy up to the Board on 4 March. He denied having "doctored" the letter. He was unable to explain how a copy of the "doctored letter" had been found by the ASC on search of his home. He said, however, that he had no reason to "doctor" the letter because it was well known that he was dealing with the matter of "reconciliation" referred to in the omitted paragraph. In his evidence, Nankin had said that Coats had mentioned "reconciliation" in his conversation with him and it was clear, said the applicant, that Coats was aware of the missing paragraph. It was the applicant's contention that Coats had "set him up".

521. Much of the argument addressed to us in support of the grounds of appeal was underscored by the proposition that the trial was extremely complex; that the nature and number of counts and the evidence led to prove them would have been too difficult for the jury to comprehend; it was said that not only were the legal concepts raised by the charges difficult but matters relating to duties of directors, financing of aircraft, banking arrangements and company "floats" were calculated to compound the jury's difficulty of comprehension. It was further submitted that the trial judge's directions insufficiently related the evidence to the offences charged and the legal ingredients of those offences; that accordingly it was unfair to the accused to have tried him upon such a complex presentment without further severance; and that, in such circumstances, it was unfair for the judge to have admitted the evidence of the American witnesses in the form which it took when that evidence was so crucial to the proof of the more serious offences alleged. In short, it was submitted that the combination of these factors made it impossible for the jury to fairly try the applicant and arrive at verdicts in accordance with the evidence.

524. We will consider these submissions when dealing with the individual grounds of appeal; but we consider that we should state at the outset that we regard these propositions as overstating the complexities with which the jury were confronted. The summary of the evidence and issues which we have given illustrates that, although the trial was a lengthy one, the issues which arose in respect of each count were confined and, to an attentive jury, could scarcely have been confusing. As we have earlier stated, the evidence, particularly the documentary evidence, was given to the jury on a count by count basis and counsels' addresses and her Honour's charge approached the evidence on a similar basis. The jury had the benefit of the evidence of the applicant, again given on a count by count basis, which no doubt further assisted them in isolating the issues. As the summary demonstrates, the evidence which he gave in respect of several of the counts revealed scarcely a defence at all; in respect of others he admitted the essential underlying facts but denied dishonesty. No complaint was, or is, made in respect of her Honour's directions of law in relation to the essential ingredients of the offences which the Crown had to prove. Indeed no complaint could have been made because her Honour prepared written directions on the law to be applied, and these were accepted by counsel as being accurate. The jury had these written directions before them. What has been contended on this appeal is that her directions failed to sufficiently relate the evidence to the law; that they were insufficient to warn the jury against the misuse of Tingiri's diary notes and against the misuse of Collins' evidence on count 19; and that she failed to adequately direct the jury, in respect of count 9, that before they could convict the applicant of the theft of the $5 million, they would need to be satisfied that the applicant's intent was contemporaneous with the appropriations alleged.

527. It is against this background that we now turn to the grounds of appeal.

531. The evidence led by the Crown at the trial included the testimony of five witnesses taken in New York pursuant to a request made under s.12(1) of the Mutual Assistance in Criminal Matters Act 1987 of the Commonwealth, which provides that Australia may request the appropriate authority of a foreign country to arrange for evidence to be taken there in accordance with the law of that country for the purpose of a proceeding relating to a criminal matter in Australia and to arrange for the evidence to be sent to Australia.

534. The witnesses whose testimony was taken pursuant to the request were the erstwhile chief executive officer of SCA (Coats), two former managing directors (Cosse and Hayes) and a former employee of AFG (Rudzitis) and a New York attorney. Coats deposed to the forging of his signature to documents, the limits of the authority given to the applicant to transact business on behalf of SCA and his knowledge of the actions of the applicant. The testimony of the other witnesses principally concerned the financial arrangements and transactions between SCA on the one hand and AFG, SAS and the sub-underwriters of the float of SCA on the other hand.

537. The testimony of the witnesses was recorded in transcript and on video film, and in that form was supplied to the jury pursuant to the provisions of the Foreign Evidence Act 1994 of the Commonwealth. Section 24(1) of the Act provides that testimony obtained as a result of a report made by the Attorney-General to a foreign country "... may be adduced in a proceeding to which this Part applies." However, the foreign material is not to be adduced as evidence if the witness is in Australia and is able to attend the hearing or the evidence would not have been admissible had it been adduced from the witness at the hearing. See s.24(2). Thus the Act does no more than modify the hearsay rule in respect of foreign material, which remains subject to all the other rules as to admissibility of evidence. The "proceedings to which this Part applies" are described in s.20 of the Act. The section provides:

"20(1) This Part applies to a proceeding, in any Australian court, that is:

(a) a criminal proceeding for an offence against the law of the Commonwealth; or

(2) This Part also applies to a proceeding, in any court of a State or Territory specified in the regulations, that is:

(a) a criminal proceeding for an offence against the law of that State or Territory;

(b) a related civil proceeding of a kind specified in the regulations in respect of that State or Territory."

Victoria was among the States and Territories specified in the regulations made under the Act. Section 25 of the Act gives the Court a discretion to prevent foreign material being adduced in evidence.

548. A number of the grounds of appeal relate to the foreign evidence. In the first place it is contended that insofar as s.20(2) of Foreign Evidence Act authorizes a State court hearing criminal offences against the laws of that State to admit evidence obtained overseas (notwithstanding that the Court is also hearing offences against Commonwealth laws), it is beyond the constitutional power of the Commonwealth. Secondly, it is contended that the evidence should not have been admitted because the witnesses "could not be cross-examined". Finally, it is contended that the trial judge erred in a number of respects in failing to exercise her discretion under s.25 of the Act to exclude the foreign evidence.

551. The Solicitor-General, who appeared on behalf of the Attorney-General for the Commonwealth as an intervener, and whose submissions were adopted by the respondent, contended that the source of power to enact s.20(2) of the Foreign Evidence Act was s.51(xxix) of the Constitution, "the external affairs power". The evidence was gathered outside Australia, and the method of its collection concerned relations between Australia and other countries. The provisions of the Foreign Evidence Act, of which s.20(2) was part, were enacted at least partly to improve the effectiveness of the mutual assistance arrangements by enabling the evidence gathered pursuant to those arrangements to be used in proceedings in Australia. It was submitted that if the section was not squarely within the external affairs power, it was justified as a law with respect to matters incidental to the execution of the external affairs power, within s.51(xxxix).

554. We did not understand counsel for the applicant to contest that, were it not for the provisions of Chapter III of the Constitution, s.20(2) would be justified by the external affairs power and possibly the incidental power, which was perhaps a recognition of the scope of "an enduring power [framed] in broad and general terms enabling the Parliament to legislate with respect to all aspects of Australia's participation in international affairs and of its relationship with other countries in a changing and developing world ..." The Tasmanian Dam Case [1983] HCA 21; (1983) 158 C.L.R. 1 at 127 per Mason, J. However, the applicant did contend that the provisions of Chapter III of the Constitution exhaustively provided for the power of the Commonwealth to legislate with respect to State courts. The Commonwealth could not legislate, so it was said, to prescribe the rules of evidence to be applied in a State court dealing with a State matter for no such power was found in Chapter III of the Constitution. The only source of power of the Commonwealth to legislate with respect to State courts was to be found in s.77 of the Constitution, which does no more than empower the Commonwealth to invest State courts with Federal jurisdiction and define the extent to which the jurisdiction of any Federal court is to be exclusive of the jurisdiction of State courts. Of course the Commonwealth can pass laws within one of the heads of power in s.51 which determine the substantive laws applied in State courts. The applicant contended, however, that the rules of evidence which were applied in State courts to State matters were sacrosanct.

557. The decisions relied upon by the applicant do not establish the wide proposition required to invalidate s.20(2), namely, that the Commonwealth cannot pass laws affecting the rules of evidence or procedure applied in State courts in respect of State offences as no such powers are to be found in Chapter III of the Constitution.

560. The provisions of Chapter III do have an inhibiting effect upon the powers of the Commonwealth conferred by s.51 of the Constitution. However, the inhibitions extend no further than confining the Commonwealth, in investing jurisdiction upon State courts, to s.77 as the sole source of power, thus preventing the Commonwealth, in conferring Federal jurisdiction on State courts, from reconstituting those courts on which it is conferring Federal jurisdiction and preventing the Commonwealth destroying or curtailing the existence of a State or its capacity to function as a government. In our opinion the cases relied upon by the applicant establish only those limits. None of those cases establishes the proposition that unless a power in the Commonwealth to direct State courts as to the manner in which those courts are to exercise their non-federal jurisdiction is found in Chapter III, no power to do so can be derived from s.51 of the Constitution.

563. The only jurisdiction which the Commonwealth can confer on State courts is that authorized by Chapter III of the Constitution. As Knox, C.J., Rich and Dixon, JJ. said in Le Mesurier v. Connor (1929) 42 C.L.R. 481 at 496:

"Sec.77 of the Commonwealth Constitution expressly confers upon the Parliament power to make laws investing the Court of the States with Federal jurisdiction. But the provisions of sec.77 and sec.79, which explicitly give legislative power to the Commonwealth in respect of State Courts, make it plain that the general powers of the Parliament to legislate with respect to the subjects confided to it, like the similar powers of Congress, must not be interpreted as authorizing legislation giving jurisdiction to State Courts."

However, it is not inconsistent with that limitation that the Commonwealth pursuant to a head of power contained in s.51 can legislate as to the proof of a matter in a State court.

568. When the Commonwealth legislates with respect to investing judicial power in a State court, it is bound by the limitations imposed by the grant of power found in s.77 of the Constitution. In R. v. Federal Court of Bankruptcy; Ex parte Lowenstein [1938] HCA 10; (1938) 59 C.L.R. 556 at 586, Dixon and Evatt, JJ. said:

"The sole source of power to confer Federal jurisdiction on a State court lies in sec.77(iii).

The legislative power in respect of bankruptcy and insolvency is ample enough to enable the Parliament to regulate all matters which fairly fall within that subject and its comprehensive nature needs no elaboration. Further, like every other legislative power over a subject matter, its extent is amplified by the principle that everything incidental to the main purpose of the power is contained within the ground itself. But, however far this particular head of legislative power might otherwise have been considered to go towards authorizing the Parliament to create courts of bankruptcy and to invest them with judicial power, an examination of the explicit grant of judicial powers contained in the judicature chapter shows that for such a purpose the Parliament cannot go outside the latter powers and must conform to whatever limitations they import."

It does not follow that in legislating pursuant to one of the heads of power in s.51 the Commonwealth lacks power to make laws directing the way in which a State court exercises State jurisdiction.

575. Again, State courts are an essential branch of the government of the States and the Commonwealth has no legislative power to prohibit them from exercising their functions. Thus the Defence Forces Discipline Act 1982 of the Commonwealth, which provided that a person acquitted of an offence against the Act could not be tried in a federal court or a court of a State or Territory for an offence in that court that was substantially the same offence, was beyond power to the extent that it interfered with the exercise by State courts of their general criminal jurisdiction. Re Tracey; Ex parte Ryan [1989] HCA 12; (1989) 166 C.L.R. 518. See also Re Australian Education Union; Ex parte Victoria [1995] HCA 71; (1995) 184 C.L.R. 188 at 229. However, again it does not follow that the Commonwealth cannot direct State Courts as to the proof of matters within their State jurisdictions if it is within the head of power found in s.51 or incidental to such a power to do so. (See, for example, s.400 of the Navigation Act 1912.)

578. Finally, the Commonwealth cannot alter the organization, structure or nature of a State court when it invests the court with Federal jurisdiction. In Russell v. Russell (1976) 134 C.L.R. 495, it was held that a provision of the Family Law Act requiring matrimonial proceedings in State courts be heard in closed courts was invalid, for "To require a court to invariably to sit in closed court is to alter the nature of the court", per Gibbs, J. at 520, or "to turn that court into a different kind of tribunal" per Stephen, J. at 532. In providing for the reception in a State court of material gathered overseas and, in so doing, modifying the rule against hearsay, the Foreign Evidence Act in our opinion does not purport to alter the nature of State courts or to turn them into different tribunals. The Act does no more than modify the hearsay rule in an area within a head of Commonwealth power.

581. There are limitations upon the power of the Commonwealth to legislate with respect to State courts. However, in our opinion no decided case goes as far as the applicant requires. Chapter III of the Constitution is not the sole source of power of any Commonwealth law which touches or affects proceedings in State courts.

584. In our opinion s.20(2) of the Foreign Evidence Act is a valid exercise of the power found in s.51(xxix) of the Constitution.

588. It is convenient to consider together paragraphs 1 and 9 of the grounds of appeal, namely that the foreign material should not have been admitted in evidence because the witnesses could not be cross-examined (ground 1) and the applicant's complaints arising from the rejection of his application for a direction that the foreign material not be adduced as evidence in the trial (ground 9).

591. On 8 February 1995 Coadys, the former solicitors for the applicant, were advised formally that a request would be made for the taking of evidence in New York, and on 16 February 1995 the Commonwealth Director of Public Prosecutions offered to pay the reasonable costs of a barrister and solicitor to attend the taking of the evidence and cross-examine the witnesses on behalf of the applicant. There ensued a vigorous debate about the amount of the "reasonable costs". The final claim by the applicant's solicitor was $1,500 per day and daily expenses of $100, which was met by an offer of $1,000 per day and $100 for daily expenses. The offer was refused. Instead the applicant commenced proceedings in the Federal Court seeking an injunction to restrain the Director from obtaining the evidence. The cost to the applicant of the proceedings amounted to some $10,000. An application for an interlocutory injunction was refused. During the hearing of the application the applicant was advised that the Crown would pay full fees for counsel and solicitor for all the days of the hearing and for days spent travelling or waiting in New York for the hearing to proceed. Upon receipt of that offer Coadys wrote to the applicant stating that the firm could not afford Mr. Coady being absent for the time required for the hearing, and expressing concern as to the "open-ended" nature of the time to be spent taking the evidence. The letter said:

"We consider the offers made completely inadequate to enable a proper defence response and we believe that it is justifiable for us to decline to go along with the Director's conduct."

Coadys suggested that the applicant seek other legal advice and that he might consider representing himself at the hearing in New York.

596. On 2 November 1995 Coadys informed the Director that they would not attend the hearing. As his solicitor would not go to New York on the terms offered by the Director, the applicant applied for a visa to enable him to travel to New York and cross-examine the witnesses. However, his application for a visa was refused by the American authorities because of the charges the subject matter of these proceedings. Neither the applicant nor any representative of the applicant attended the gathering of the foreign material in New York which took place between 13 and 21 November 1995.

599. Before the commencement of the trial the applicant applied to the trial judge pursuant to the provisions of s.25 of the Foreign Evidence Act for a direction that the testimony of the witnesses taken in New York not be adduced as evidence in the trial. The section provides:

"(1) The court may direct that foreign material not be adduced as evidence if it appears to the court's satisfaction that, having regard to the interests of the parties to the proceeding, justice would be better served if the foreign material were not adduced as evidence.

(2) Without limiting the matters that the court may take into account in deciding whether to give such a direction, it must take into account:

(a) the extent to which the foreign material provides evidence that would not otherwise be available; and

(b) the probative value of the foreign material with respect to any issue that is likely to be determined in the proceeding; and

(c) the extent to which statements contained in the foreign material could, at the time they were made, be challenged by questioning the persons who made them; and

(d) whether exclusion of the foreign material would cause undue expense or delay; and

(e) whether exclusion of the foreign material would unfairly prejudice any party to the proceeding."

609. The applicant gave evidence in support of the application. He deposed that Coadys were furnished with some $219,000 to conduct his defence to the charges. He described the steps he took to go to New York and his ultimate failure to obtain a visa. He said that he contemplated engaging a lawyer other than Coady "... but really it was decided that the time that would have been taken for someone to become aware of the vast amount of documents, there just wasn't time", even though the Crown would have provided the necessary funds.

612. The application was refused. Her Honour found that the absence of cross-examination was "due to a deliberate decision of the accused, a businessman of very considerable experience, with the most competent advice available to him."

615. Ground 9 in the notice of appeal attacks that ruling. It is alleged that in making the ruling:

"a) the Learned Trial Judge erred in finding as a fact that Applicant instructed his legal advisers not to attend to cross-examine witnesses in US.

b) the Learned Trial Judge erred in finding that Applicant and/or his legal advisers made a deliberate tactical decision not to attend US to cross-examine witness.

c) the Learned Trial Judge misdirected herself as to the relevant issues to be considered when deciding whether to admit US evidence, in that she gave undue weight to the circumstances surrounding the failure of applicant and/or his legal representatives to attend US and failed to consider whether the admission of evidence would result in unfairness to applicant in the trial before the jury by

ii) leading the jury to place undue weight on the evidence

iii) denying the defence an opportunity to challenge the US evidence at the appropriate point in the proceedings and to put its case before the jury fully in running rather than in the final address."

624. The trial judge accepted the submissions of the Director that the applicant could not rely on most of the factors set out in s.25(2) of the Act. There was no other source of the material sought to be adduced as evidence, the probative value of the material was high in that it was critical to a large number of counts, the exclusion of the material would cause undue delay and expense, and its exclusion would unfairly prejudice the Crown given its significant probative value. Counsel for the applicant expressly did not challenge those submissions. Accordingly the application turned upon paragraph (c) of the sub-section which entitled the Court to have regard to "the extent to which statements contained in the foreign material could, at the time they were made, be challenged by questioning the persons who made them".

627. According to Wigmore on Evidence, vol. 5, para 1367:

"For two centuries past, the policy of the Anglo-American system of evidence has been to regard the necessity of testing by cross-examination as a vital feature of the law. The belief that no safeguard for testing the value of human statements is comparable to that furnished by cross-examination, and the conviction that no statement (unless by special exception) should be used as testimony until it has been probed and sublimated by that test, has found increasing strength in lengthening experience. ... [I]t is beyond any doubt the greatest legal engine ever invented for the discovery of truth."

631. However, cross-examination, while a useful device to secure greater accuracy and completeness and on occasion to expose fraud or honest error, is not indispensable. The statement of a witness who has not been cross-examined is not so fatally lacking in reliability that it is not even worth hearing in court. The fact that the witnesses whose testimony was taken in New York were not cross-examined does not of itself bar the admission of the testimony as evidence in the proceeding. Otherwise a litigant could prevent the admission of testimony taken overseas by the simple expedient of refusing to attend to cross-examine the witnesses. The question is not whether the witnesses were cross-examined, but whether an adequate opportunity was afforded to the applicant to procure their cross-examination. The importance of the right to cross-examine witnesses may be considered in evaluating the adequacy of the opportunity afforded to the applicant. In the present case the utility of cross-examination was reduced by the explicit terms of the contemporary correspondence dealing with the events with which the foreign evidence was concerned. The terms of the correspondence presumably played a large part in confining the issues arising from the foreign evidence to those which we have identified. The admission of the correspondence was not challenged on this appeal.

634. In finding that "the absence of cross-examination is due to the deliberate decision of the accused" we do not understand her Honour to have found that the applicant had made a tactical decision to allow the testimony to be collected without any cross-examination in order to strengthen the case against its admission in evidence at the trial. If that was so, the applicant must have taken the steps he did to attend at the hearing in New York and himself cross-examine the witnesses in the cynical belief that they would be unavailing. It was not suggested in cross-examination of the applicant or in her Honour's reasons that the applicant had engaged in any such charade. Further, the applicant could have had no confidence he would be successful in preventing the admission of the testimony in evidence at the trial. He was advised by his solicitors in the letter dated 26 October 1995 that "... exception could be taken [to the admission of the testimony] and if the issue before the Court is our conduct and our refusal to accept the costs offered, we have to say that we have little confidence in the courts accepting our argument based on current experience."

637. In our opinion the trial judge's statement means that the applicant's decision not to accept the Director's offer of financial assistance deprived him of his best opportunity of obtaining the cross-examination of the foreign witnesses and the decision was made consciously. The applicant did not forego the opportunity to cross-examine the witnesses as a result of oversight or incapacity on his part. The Director submitted that the decision not to attend the New York hearing was a tactical decision, but we do not understand her Honour to have gone so far, notwithstanding paragraph 9(b) of the grounds of appeal.

640. Her Honour identified the significant issue as whether the applicant could have procured the cross-examination of the witnesses. She said:

"... I am satisfied on the balance of probabilities, that the defence was given a proper opportunity to cross-examine, which the accused did not accept. There were resources available to the defence at the time which could have supplemented the offer made, if the adequacy of the fees had been the only consideration. Some of those resources were expended on the injunctive proceedings rather than on supplementing any perceived deficiencies in the amount of costs and expenses offered by the Crown."

644. We think her Honour was correct in proceeding on the basis that the critical issue on which the application turned was whether the applicant was afforded an adequate opportunity to cross-examine the foreign witnesses. The matters set out in s.25(2), which the court may take into account in deciding whether to direct that foreign material not be adduced as evidence, are revealing. The matters referred to in paragraphs (a) and (b) are to be established by the party seeking to adduce the material. In the present case they were conceded by the defence. Paragraphs (d) and (e) are concerned with the prejudicial effect of the exclusion of the material, not its admission. Again, the defence conceded that those matters could not be used as the basis to refuse the admission of the foreign material. The remaining matter specified in paragraph (c) is the extent to which statements in the foreign material could have been challenged by cross-examination. We think that means whether there were statements in the foreign material that were susceptible of being tested by cross-examination and, if so, whether there was an opportunity to do so.

647. We also consider that her Honour was correct in holding that the applicant was afforded an adequate opportunity to test the foreign material by cross-examination. The communications between the Director and the applicant's solicitors display a determination not to be satisfied with the Director's offers of financial assistance. The applicant's solicitors do not appear to have considered that if the witnesses were to give evidence in Australia, the entire cost of preparing for and performing the cross-examination would have been borne by the applicant. When the point as to the adequacy of the costs was exhausted by the Director meeting the solicitors' requirements, the offer was refused on the fresh ground that Mr. Coady could not spare the time that might be required to be spent overseas. The refusal has a hollow ring in that it does not appear that any effort was made to engage another barrister or solicitor to conduct the cross-examination or to seek to adjourn the hearing to suit the convenience of the applicant's solicitors. We also bear in mind that the applicant did not respond to the Director's offer to supply written questions to be put to the witnesses by counsel for the Director or the commissioner before whom the testimony was to be taken, or to even explore the possibility of cross-examination of the witnesses by video link.

650. In our opinion no error has been disclosed in the exercise of the trial judge's discretion under s.25. That disposes of ground 9 of the grounds of appeal and also ground 1, for the latter depends upon the conclusion that the foreign witnesses "could not be cross-examined".

653. On 3 March 1999, when the hearing resumed with argument on the question of the constitutional validity of s.20(2) of the Foreign Evidence Act and submissions in reply by the applicant personally, Mr. Coady, by then a former solicitor for the applicant, sought leave to appear and present further argument in support of ground 9. The arguments were contained in written submissions forwarded to the Court on 1 March 1999. Although the submissions were limited to the exercise of the discretion attacked in ground 9, Mr. Coady sought leave to amend the grounds of appeal to reflect the new arguments which he sought to advance. The submissions challenged the trial judge's ruling to admit the foreign evidence on bases which were not relied upon before her Honour. It was submitted that the matter now sought to be relied on "may not have been in knowledge of trial counsel" because of the "late time" at which he had been briefed. It was also suggested that counsel for the Crown were in possession of "relevant material" which should have been put before her Honour, but was not.

656. The Crown objected to the application to amend the grounds of appeal and also to Mr. Coady putting further submissions when counsel for both the applicant and the respondent had addressed arguments to the Court in respect of ground 9. We refused leave to amend the grounds of appeal, but we have considered the submissions and further documents put forward by Mr. Coady. In our opinion the submissions and the material supporting them do not disclose any basis for impugning the trial judge's decision. In particular there is nothing in the submissions or material which suggests that her Honour was not made aware of all matters which were relevant to the exercise of her discretion; nor is there anything to suggest that the prosecution failed to put forward all matters relevant to the exercise of the discretion which were within its knowledge.

660. Finally, by ground 8, the applicant complained that "The trial judge erred in refusing to admit evidence of the reasons given by the U.S. witnesses for their unwillingness to attend to give evidence at the trial."

663. Section 24(2)(a) of the Foreign Evidence Act provides that testimony obtained as a result of a request by the Attorney-General to a foreign country that the testimony be made available is not to be adduced as evidence if it appears to the Court's satisfaction that the person who gave the testimony is in Australia and is able to attend a hearing. At the trial evidence was given by Lucia Bolkas, a solicitor employed by the Commonwealth Director of Public Prosecutions, in the absence of the jury, that she believed that none of the foreign witnesses were in Australia. In the case of Coats, Cosse and Hayes, her belief was based upon communications she received from solicitors acting for the witnesses. In the course of her evidence Ms Bolkas quoted from letters written to her by the solicitors for the witnesses. The letters from the solicitors for Coats and Hayes stated their clients' reasons for refusing to travel to Australia to give evidence at the trial. Ms Bolkas' evidence was given without objection.

666. Counsel for the applicant requested that Ms Bolkas repeat before the jury the evidence she gave before the trial judge in order to inform the jury of the reasons given by the foreign witnesses for not travelling to Australia to give evidence. Counsel wished the jury to be aware of the stated reasons of the witnesses so that if the defence demonstrated the real reasons for their failure to travel to Australia to give evidence, the jury would see that the stated reasons were false.

669. The trial judge ruled that the statements were hearsay and thus were not to be admitted. Her Honour said it could not be assumed that the solicitors were authorized by their clients to state the reasons for their clients refusing to travel to Australia.

672. While the statements by the solicitors might have been equated with statements by the witnesses themselves if the solicitors had been authorized to make them, there was no evidence of any authority given by the witnesses to their solicitors to make the statements. We think her Honour was correct in declining to infer that the solicitors were acting on instructions in stating the reasons as distinct from proffering their own opinions. Counsel for the applicant submitted that if Ms Bolkas' evidence was hearsay, it ought not to have been admitted to establish the witnesses were not in Australia, and thus it was only fair that he should be able to rely upon it for his own purposes. It is not clear to us why it was thought that it was incumbent upon the Crown to prove that the witnesses were not in Australia. Be that as it may, no objection was taken to the evidence of Ms Bolkas. We do not think that circumstance precluded the Crown objecting to the evidence when the applicant sought to lead it before the jury.

675. In any event we are of the opinion that the evidence of the reasons why the witnesses would not travel to Australia to give evidence did not relate to any issue in the trial. The witnesses might have been cross-examined as to their reasons for not travelling to Australia if that had been a matter affecting their credit. It appears that, having failed to cross-examine the witnesses, the applicant was attempting to mount a collateral attack on their credit.

Grounds 2 and 4 - Failure to sever counts 8-12, 16, 17

679. In support of these grounds which were argued together, counsel for the applicant submitted that:

(a) The presentment did not comply with the Presentment Rules because the above counts and the remaining counts did not form a series of transactions within the meaning of those Rules.

(b) In any event, her Honour should have exercised her discretion to sever the counts because the hearing of all the charges would unduly prejudice the applicant and would result in a miscarriage of justice.

(c) Developments at the trial were such as to constitute a miscarriage of justice which could have been avoided by the severance of the counts in question.

685. Before examining these submissions, it is desirable to analyse the application that was made by Mr. Lincoln to her Honour for severance of the presentment that was filed.

689. Mr. Lincoln made only one application to her Honour for severance. The application was made in the course of pre-trial hearings and at a time when the presentment contained 29 counts. Essentially, he submitted to her Honour that there should be severance of:

- counts 18-20, being three counts of theft and one count of falsifying documents (known as the Body Shop counts which related to a discrete set of transactions)

695. Her Honour accepted Mr. Lincoln's submissions for the severance of the former count 17 and the Body Shop counts but refused to sever counts 19-23. No criticism was made during the hearing of the appeal of her Honour's decision not to sever the latter counts.

698. It follows that at the time of his application for severance, Mr. Lincoln accepted that the counts he now says should have been severed could have been properly tried together with counts 1-6, 13, 15 and 18, and made the tactical decision to seek only the severance of the counts referred to earlier. Moreover, as we have already mentioned, Mr. Lincoln did not seek to argue before us that her Honour erred in exercising her discretion not to sever counts 19-23. In those circumstances, subject to one qualification to which we will refer shortly, it is now too late for the applicant to contend that counts 8-12, 16 and 17 should have been severed - see R. v. Wakim [1998] 2 V.R. 46, Ashley, A.J.A. at 50-1 and Winneke, P. at 53; R. v. Osland [1998] 2 V.R. 636, 651-2; Gleeson, C.J. in R. v. Birks (1990) 19 N.S.W.L.R. 677, 685. The qualification to which we have referred is this. The convictions may be set aside, even if the discretion of the trial judge in refusing severance has not miscarried, if the court is satisfied that having regard to the events which developed during the course of the trial, there has been a miscarriage of justice which could have been avoided by ordering a separate trial in relation to the counts in question (R. v. Demirok [1976] VicRp 19; [1976] V.R. 244 at 251-4). For the reasons we give later, however, there is no basis for contending that such a miscarriage of justice has occurred in this case. Consequently, these appeal grounds must fail.

701. Notwithstanding this conclusion, if we are wrong in our view that it is now too late for the applicant to seek to complain that there has been a failure to sever the grounds in question, we proceed to consider the arguments put on his behalf in support of that contention.

705. Section 371 of the Crimes Act 1958 provides that, subject to the Rules under that Act, charges for more than one indictable offence may be joined in the same presentment. Rule 2 provides that charges for any offences may be joined in the same presentment if they are founded on the same facts or form or are part of a series of offences of the same or similar character. In our view, each of the requirements contemplated by the Rule has been made out in this case (although it would have been sufficient if only one had been satisfied).

708. Before analysing the two requirements, it is desirable to mention that it has long been accepted that the Rule should receive a liberal interpretation consistent with the policy underlying it, namely, to enable the joinder of charges which may be "properly and conveniently" dealt with together. This involves the striking of a balance between on the one hand, the need to ensure that by charging the accused with separate offences in the one presentment he or she is not thereby unduly prejudiced or embarrassed at trial by reason of evidence being led in respect of each of the charges and, on the other, the interest of the public in the efficient allocation of judicial resources, consistency in verdicts and expeditious and final litigation as well as with the convenience of witnesses (R. v. Demirok, at 254-255; Ludlow v. Metropolitan Police Commissioner [1971] A.C. 29; R. v. Kray [1970] 1 Q.B. 125, 130-1; R v. Collins (1994) 76 A.Crim.R. 204, 208).

711. The requirement that the charges are to be founded on the same facts does not mean that the facts in relation to the charges must be identical in substance or be virtually contemporaneous. It is sufficient if the charges have a common factual origin (Barrell v. Watson (1979) 69 Cr.App. 250, 252-3), or if there is a sufficient connection or nexus between them (R v. Collins, at 208). In order to determine if the relevant nexus exists, one has regard to the charges and, broadly, the evidence that is to be led in relation to them by the parties. In the present case, it is fairly plain that the charges have the same factual origin. Put briefly, on the prosecutor's case, the factual origin of the charges and the nexus between them was the applicant's endeavour to keep his bank at bay and prevent it from pressing him to repay the large debt he owed it. In pursuit of that end, he falsely represented to it that he was owed substantial sums by SCA. A successful float of SCA was a necessary condition precedent to the appellant gaining funds to repay the bank so that his actions in relation to it including theft of money belonging to SCA and the false documentation and information he provided in connection with that transaction in order to hide the true position, are all inter-connected. In turn, they gave rise to the cover up during the second phase of his deceitful conduct which we have previously summarised. In the circumstances, therefore, the charges were founded on the same facts within the meaning of Rule 2.

714. It is also plain that the offences in question form a series of transactions (or offences) which are of the same or similar character within the meaning of Rule 2. It is the presence of a nexus or connection between the charges that establishes they constitute a series of such transactions or offences (De Jesus v. R [1986] HCA 65; (1986) 22 A.Crim.R. 375, 389; Ludlow v. Metropolitan Police Commissioner, at 39-40; R. v. Kray, at 130-1; R v. Collins, at 208, R. v. Clayton-Wright [1948] 2 All E.R. 763, 765). That the counts form part of a series of interconnected transactions or that there is a sufficient nexus that exists between them in this case can be seen from the fact that these counts and the evidence led in respect of them, are so closely interwoven that it would not have been appropriate to sever them. The offences charged in counts 5, 6, 7 and 8 were closely related to the events charged in counts 9-11. Those events gave meaning to the "cover up" counts charged in counts 13-23. Similarly, counts 1-4 and 6 go to the applicant's motive in respect of the offences charged in counts 9 and 10 and to counts 5, 8, 11 and 12 which are concerned with the applicant's need to ensure that the float succeeded. They are also relevant to the "cover up" counts.

717. It follows from what has been said that the amended presentment complied with the requirements of Rule 2, so that the applicant's submission to the contrary must be rejected.

721. It was submitted on behalf of the applicant that her Honour should have exercised her discretion to sever the counts because the hearing of all the counts would produce a miscarriage of justice. We have already mentioned that no such submission was put to her Honour in respect of the counts which Mr. Lincoln now says should have been severed, but in our view, even if such a submission had been put, we are satisfied that it should have been rejected. We accept, of course, that the court has the ultimate discretion under s.372(2) of the Crimes Act to sever the presentment notwithstanding its compliance with the Act if it comes to the view that a miscarriage of justice could result which would be avoided by an order for separate trials. In exercising its discretion, it should take into account and balance the entitlement of the accused person to a fair trial without embarrassment or prejudice on the one hand, and the entitlement of the public in the efficient allocation of judicial resources, consistency in verdicts, final and expeditious litigation and witness convenience, on the other (R. v. Demirok, at 254, 255).

724. It was submitted on behalf of the applicant that having regard to the complexity of the factual and legal issues raised by the counts, there was a real risk that the jury would not have properly understood the evidence or dealt with each count only on the evidence that was admissible in relation to it. In support of that contention, the appellant pointed to R. v. Smart [1983] VicRp 22; [1983] 1 V.R. 265. In that case, the Full Court held that the trial judge erred in refusing to exercise his discretion under s.372(2) of the Crimes Act 1958 to sever the presentment which contained 63 counts involving commercial fraud. Issues and evidence adduced at the trial were too complex to justify all counts being tried together. At 282, the Full Court said that while the fact that the appellant was presented on 63 counts was not of itself a conclusive reason for severance, it strongly suggested an oppressive proceeding and the Crown should justify the course which it had taken. It concluded at 289, that the evidence adduced at the trial was simply too complex to justify the counts being tried together.

727. We do not accept the submission that an excessive number of charges have been joined so as to make the trial oppressive. We also reject the contention that the issues raised by the counts were so complex that a miscarriage of justice would result if they were to be the subject of one trial. The present case is materially different from Smart. First, the number of counts on the amended presentment is but a fraction of the number contained in the Smart presentment. More importantly, however, the complexity of the issues and the evidence in Smart was substantially greater than it was or was likely to have been in this case. In Smart, the jury had to be taken in some detail through numerous books of account to trace the various financial transactions which constituted the alleged fraud. In those circumstances, it is understandable that a presentment consisting of 63 counts, nearly all of which required such an examination of a very large amount of the documentary evidence, could be characterised as oppressive. There are no such circumstances present here. The summary of evidence we have already given shows that the issues were remarkably confined and, to an attentive jury, would not have caused any confusion or difficulty.

730. It was also contended that having regard to the number and complexity of the counts which the jury had to consider, there was an unacceptable risk that they would draw an inference from the evidence in relation to them that the applicant had a propensity for dishonesty. We are of the view that this submission has no merit having regard to the full and proper separate consideration direction given by her Honour to which no exception was taken.

733. Consequently, even if the appellant had sought to have her Honour exercise the discretion under s.372(2) of the Crimes Act 1958 to sever the relevant counts on the grounds referred to earlier, such an application was bound to fail.

737. We have already said that it was made clear in Demirok at 251-4 that even if the trial judge was not in error in exercising the discretion not to sever the counts in question, it may appear that developments at the trial were such as to constitute a miscarriage of justice which could have been avoided by ordinary separate trials. It was submitted on behalf of the applicant that as events turned out, the trial did involve such a miscarriage of justice. Mr. Lincoln, however, could not point to any aspect of the trial which resulted in a miscarriage of justice which could have been avoided by the severance of the counts in question. In our view, for the reasons already given, no such miscarriage of justice occurred in this case.

741. It follows from what we have said that in our view, this appeal ground must fail.

745. In support of this ground, applicant's counsel submitted that, in her directions to the jury, the trial judge had failed to sufficiently relate the evidence to the legal elements of the various offences which the Crown had to prove and that her failure to do so had denied the applicant a fair trial. Mr. Lincoln submitted that it was particularly important in this trial for the judge to clearly identify the issues arising from the evidence and to relate those issues to the legal ingredients of the offences charged because the jury had to cope with an indictment containing 23 counts comprising 7 different Commonwealth and State offences to the elements of which the evidence applied differentially and which accordingly raised discrete issues in respect of different counts.

748. Although counsel made no complaint about the sufficiency and accuracy of the trial judge's directions of law upon the elements of the offences charged (they were, as we have previously noted, agreed by counsel), he submitted that the trial had, nonetheless, become unfair because the lack of assistance given to the jury in relating that law to the issues in the trial had put it beyond their competence to comprehend how those issues were to be applied to the legal elements which the judge had given to them.

751. The unfairness in the trial, so counsel contended, was largely the consequence of the structure of the charge in the course of which the judge had, first, given instructions to the jury upon the legal elements of the offences, then summarized at some length (counsel said selectively) the evidence relating to the respective counts; and finally had given a synopsis of the issues raised by the prosecution and defence in respect of the counts. Whilst Mr. Lincoln contended that this was the "basic structure" of the charge, he did not suggest that they were the only components of her Honour's directions. It was not disputed that she had given to the jury full and, as it seems to us, accurate directions to the jury on a number of matters which were relevant to its task in this trial. These included such ineluctable directions as to onus and standard of proof, division of functions between judge and jury, the need for separate consideration of counts, the manner in which the jury should approach the evidence, and so on. In addition, her Honour had given full directions, to which no complaint had or has been directed, upon matters which were specifically relevant to the issues in this trial. These included directions as to the use which the jury could make of the recorded transcript of the evidence of the "American witnesses", warnings as to the care with which the jury should approach the evidence of Collins, who was conceded to be an accomplice, and other witnesses in the trial who might be thought to have a conflict of interest; and directions as to the manner in which the jury should approach the evidence of the applicant.

754. However, and notwithstanding the accepted adequacy of these directions, it was the essence of the applicant's submission in support of this ground that the so called "basic structure" of the charge, as counsel termed it, was so formulaic and non-specific that, in a trial where the jury had to consider so many different counts, they would have been unable to discern what the issues were in respect of the individual counts and how they should relate those issues to the legal elements of the offences charged in those counts. Indeed, counsel went so far as to contend that the fact that the jury had convicted the applicant on all counts upon which they had been asked to return a verdict was, in itself, confirmation of his proposition that there had been no proper application of the facts to the law because there were some counts, notably count 23, upon which it could reasonably have been anticipated that the applicant would have been acquitted.

757. Counsel sought to draw support for his submissions from the fact that, during the course of her Honour's charge, exception had been taken to the form of the directions both by him and senior counsel for the prosecution. Whilst her Honour was summarizing the evidence in respect of the individual counts, applicant's counsel had said:

"Your Honour has given them the elements of the charges and you are relating the facts to the charge(s) but I felt that your Honour also has to relate the facts of each count to the law on each count."

761. Her Honour indicated that she was intending to do what counsel was suggesting when she came to deal with how counsel had put their respective cases in respect of the issues which had arisen in the case. However, before she had the opportunity to do that, senior counsel for the prosecution took exception to the charge on the same basis as defence counsel, but in a more forthright manner. Inter alia, he complained about the speed at which her Honour was charging the jury, and suggested that her Honour should:

"send the jury away for a number of days so that your Honour can re-structure the charge in such a way that you do, on a count by count basis, relate the admissible evidence to the particular elements of the charges."

765. The prosecutor said that the judge has spent such a short time, and had travelled at such speed, that there was a danger that the jury might think that she was performing a mere procedural function instead of lending her authority to the assistance of the jury in identifying the evidence relevant to the various offences. Counsel did, however, acknowledge that her Honour still had some way to go to "rectify the situation".

768. After further discussion between the judge and counsel, her Honour declined to send the jury away but continued to charge the jury in the manner in which she had stated she proposed to do.

771. At the conclusion of the charge defence counsel raised certain specific exceptions, but did not persist in the argument that her Honour had failed to identify the issues or sufficiently relate the evidence to the legal ingredients of the individual counts. Indeed he said:

"I think really those are the major complaints that I have in this. Your Honour has put the defence as we put it on each count, so that in relation to each count its covered, and I suppose I put much more additional material, but your Honour has covered the basis of the defence on each count. I think that is really all I'm concerned about at this stage, your Honour."

775. Prosecuting counsel took a number of exceptions based largely on the proposition that the judge should have told the jury directly that some of the defences raised on behalf of the applicant were not "defences" at all. In respect of the matter which he had previously raised he conceded that the judge had "gone some way" but queried whether she had gone "far enough". However he said that it was a matter with which he did not have to concern himself; rather it was a matter for defence counsel.

778. Her Honour then proceeded to re-direct the jury in respect of matters to which specific exception had been taken. Defence counsel raised no further exception to the structure of the charge.

781. Although it is not possible for this Court to determine for itself the impact which the manner of delivery of the charge had upon the jury, we cannot agree with the proposition that the structure of the charge was deficient in the sense now contended for by the applicant. Needless to say, counsel for the respondent who advanced argument to this Court, and who was junior counsel for the prosecution at trial, disclaimed any suggestion that the structure of her Honour's charge was deficient, ultimately, in relating the evidence to the law relevant to the respective counts. To be fair to her she submitted that, although the prosecution "camp" had doubts about the adequacy of the charge at the time when senior counsel had complained, the latter part of her Honour's directions had remedied the defects which had been thought to exist.

784. It is, of course, true that it is the duty of a trial judge to give directions to a jury which will not only direct them on the applicable law but will assist them to apply that law to the facts of the case before them by telling them what, in the light of the directions of law, are the issues raised in the case. As has often been said, it is of little use to explain the law to the jury in general terms and then leave it to them to apply the law so explained to the facts of the case before them. The judge's task is to isolate the issues which have been raised and explain how those issues relate to the relevant principles of law (Alford v. McGee [1952] HCA 3; (1952) 85 C.L.R. 437 at 446; R. v. Jellard [1970] VicRp 98; [1970] V.R. 802 at 804; R. v. Anderson [1996] VICSC 17; [1996] 2 V.R. 663 at 666-7).

787. It is equally true that it is for the judge to determine, in the circumstances of the case at hand, what is the most appropriate manner to structure the charge so that the jury can be adequately informed as to what the issues are in the case and how the law which he or she has given them impacts on those issues.

790. We have read her Honour's charge as it appears on the transcript. It does not seem to us that she has failed in the basic duty which we have described. Although the trial was lengthy and the evidence was voluminous, the issues were remarkably confined, as we have sought to demonstrate in the summary we have given. On many of the counts the sole issue was whether a particular document had been fabricated by the accused. The answer to that question would itself determine whether the document was false and whether the applicant had acted dishonestly. Likewise, in respect of the four counts of theft, the issue was whether there had been a dishonest appropriation, with the relevant intent, of the amount of money in question. In counts 4, 9 and 12 there was no question that moneys belonging to SCA had ended up with the applicant. The only issue was whether, at the time of the appropriation, he had the necessary dishonest intent. In respect of count 11, there was no dispute that the applicant was at least one of the persons who had authorized the payment of the $4.462 million to AFG. The issue was whether he had dishonestly appropriated the moneys with the intention of avoiding the payment of the PVA and securing the company's shares for himself or whether he had done so to pay a legitimate debt owed by SCA to AFG; namely as security for the due performance by SCA of its lease agreements with SAS. That was the way in which the issue was left to the jury.

793. In like fashion, it seems to us that each other count on the indictment raised a similarly confined issue. One of the difficulties confronted by her Honour was that evidence relating to one count also gave colour to others. Counts 5, 7, 8, 9 and 11 were typical examples. Furthermore, the evidence on those counts impacted upon the remaining counts. It became necessary for her Honour to marshal the evidence, both oral and documentary, in order to provide a narrative which would place the conduct alleged against the applicant in its proper context, thereby enabling the jury to appreciate the full impact of that conduct. That, no doubt, is the reason why the judge chose to structure her charge in the way in which she did, intending to draw the issues together and explain them in the context of the applicable law towards the end of her charge. That is why, as it seems to us, it was somewhat premature for the prosecutor and defence counsel to have made the complaints which they did during the course of the charge. The jury does not appear to have been led into confusion by the way in which the charge was structured during their lengthy deliberations. The redirections which they sought, through questions, appear to us to have been sensible and do not reflect confusion as to where the issues lay or how the law was to be applied to them. They asked to be further directed about the ingredients of the 5th count, but that, no doubt, was because it was the only count on the presentment which involved "reverse" onuses and standards of proof. Nor does it seem to us that the "confusion" which the applicant alleges, is to be found in the fact that the jury returned guilty verdicts on all counts. The evidence which we have summarized reveals a very strong case against the applicant on each count. The "defences" or "explanations" raised by the defendant were likely to have been regarded by the jury as unbelievable in the light of the contemporary documentation which was before them. Mr. Lincoln asserted that a "not guilty" verdict could have been expected on count 23. With respect we do not see why that should be so.

796. In the long run, when considering a ground of appeal such as this, it is not the function of an appellate court to subject the summing up to fine scrutiny to see whether the trial judge could have expressed himself or herself in better terms. It is necessary to look at the charge as a whole and consider whether, in the context in which the trial was conducted and the evidence which was before the jury, the charge was sufficient to bring to the minds of the jury the issues raised and the manner in which those issues impacted upon the law which had been given to them. When this charge is looked at as a whole, it was clearly, in our view, an adequate discharge of the judge's function.

799. We are, accordingly, not satisfied that this ground of appeal has been made out.

803. It will be recalled that under cover of this ground the applicant contends that her Honour should have warned the jury of the danger of relying upon Tingiri's diary notes for the purpose of determining whether the applicant was under considerable pressure from WBC to repay or substantially reduce his debt to it. It was submitted that it was a key plank of the Crown case that the applicant was under such pressure from WBC and that it relied on the Tingiri notes to establish that contention, yet failed to call him as a witness because of his unreliability. It was contended that in those circumstances, the jury should have been given the above-mentioned warning and her Honour's failure to do that led to a miscarriage of justice in a sense that it has deprived the applicant of a real chance of acquittal. In making that submission, Mr. Lincoln relied on R. v. Faure [1993] VicRp 87; [1993] 2 V.R. 497.

806. In our view, however, there was no requirement that the jury be given the warning contended for by the applicant. It is clear from the material that both parties regarded Tingiri as a person who lacked credit and it seems plain enough that this was made clear to the jury. It was common ground, for instance, that Tingiri admitted to his superiors that he had misled them and falsified relevant documents and destroyed others and that he had otherwise acted in breach of his obligation to the bank in his handling of the Reid accounts and those of SCA. The jury had before it letters subpoenaed by the applicant from the bank in which Tingiri admitted his deception and to the premature destruction of bank records. It seems from the evidence that Tingiri, like the applicant, became caught up in a web of deceit and each of them no doubt hoped that if the float succeeded, the relevant moneys would be repaid to WBC and the account would thus be put in order. As events transpired, this did not occur.

809. There is also little doubt that the jury appreciated that the Tingiri notes were tendered in support of the Crown's contention that the applicant was under intense financial pressure from the bank to repay or substantially reduce his debt to it. The notes were admitted by consent, although they were in any event admissible as business records pursuant to s.55(2) and (5) of the Evidence Act 1958. The reliability or otherwise of the notes was a matter for the jury to resolve on the evidence before them.

812. In her charge, her Honour dealt with the issue of credibility and with matters relating to the Tingiri notes. She told the jury, inter alia, that in assessing the credibility of a witness they could take into account any evidence which indicated that the witness had told lies or done dishonest things or had acted irresponsibly which the jury may regard as reflecting upon the reliability of the witness's evidence. She told them to use their commonsense and experience of the world.

815. Her Honour also explained to the jury that it was the applicant's case that they should not be satisfied beyond reasonable doubt that the contents of the bank files kept by Tingiri were true. She reminded them further that the defence case was that no document had been produced in which any officer of the bank had sought from the applicant a repayment or a substantial reduction in his overdraft. The applicant also contended that Tingiri was not honest in what he wrote and concocted the file notes which were in evidence in order to attempt to conceal what he was doing from his superiors. He was seeking to obtain the business of SCA and in the process, was not pressing the applicant for payment. Her Honour also referred specifically to the letter from a senior executive of WBC stating that Tingiri had admitted to the deception and to the premature destruction of bank records.

818. The jury were also told that it was for them to consider whether the applicant was in fact being pressured to reduce his overdraft and that they may consider that there was no evidence that Tingiri was acting in the way suggested by the applicant's counsel and that in his own evidence, the applicant had accepted much of what was in the diary notes.

821. Mr. Lincoln was not critical of the charge as such, but argued that her Honour should have given the jury a warning in relation to the Tingiri notes similar to an accomplice warning. In this respect he relied on Faure. In our view, however, what was said by the Full Court in that case does not apply to the present situation. In Faure the Crown case was conducted on the basis that the deceased was killed either by the applicant or his wife and the most relevant witness called by it was the applicant's wife who gave evidence of, inter alia, the applicant's admission to her that he had killed the deceased. It was clear that she had a vested interest in inculpating the applicant while denying that she was responsible for the death. The Full Court concluded that in the circumstances, namely, her special and direct interest as a witness in the outcome of the trial, her stormy relationship with the applicant and her desire to be rid of him and even have him killed, the trial judge should have given a warning to the jury about her evidence similar to that given in respect of accomplices.

824. In the present case, however, Tingiri did not have the direct interest in the outcome of this trial that Mrs. Faure had in respect of the trial of her husband. Secondly, although Tingiri's notes were obviously an important item of evidence led by the Crown they were by no means the only evidence on the issue of whether the applicant was under financial pressure from WBC to reduce his debt to it. In addition to documentary evidence from the bank, the Crown called evidence from Gary Hounsell, a partner of Arthur Anderson, who had advised the applicant on his business for some years. He gave evidence, inter alia, that from about 1990 he became concerned about the applicant's financial position and that his income did not significantly cover the cost of his borrowing. He gave evidence about various discussions between himself and the applicant concerning the applicant's shareholding in SCA and his need for funds as well as the applicant's visit in early 1993 to see John Morris at WBC Private Bank because of his concern that Tingiri was retiring or was about to be transferred. There was also evidence of the applicant telling Hounsell that he would like to make an additional borrowing of $11m to $12m for the purpose of on-lending that money to SCA and that Hounsell expressed his concern that the applicant was already overdrawn with WBC. The Crown also called evidence from Raymond John Habgood, who was a manager at Institutional Banking at WBC, to whom in early 1993 the bank delegated the task of reviewing the applicant's banking affairs with WBC. He gave detailed evidence about the applicant's indebtedness to the bank and his failure to repay or reduce loans as was required. These matters have already been dealt with by us in our summary of the evidence. Further, the Crown called John Abberley Woods, a senior bank officer at the Commonwealth Bank who supervised the account of the Reid family. He gave evidence of borrowings sought by the applicant from that bank. The Crown also relied on the answers the applicant gave in cross-examination concerning his financial affairs and the growth rather than the reduction of his indebtedness to WBC.

827. There are recognised categories of cases where the law requires the trial judge to warn the jury that it would be dangerous to convict the accused on the evidence of a witness unless that evidence is corroborated. It is common ground that the present case is not one of those cases. But there are, nevertheless, instances where the justice of the situation requires that the trial judge explain to the jury the potential unreliability of the evidence of a witness, such as one who has a mental disability. The same requirement may arise if there is a risk that the jury might not understand why the evidence of a witness is unreliable. In Bromley v. The Queen [1986] HCA 49; (1986) 161 C.L.R. 315, Gibbs, C.J. (with whom Dawson, J. agreed) approached the question of whether a warning should be given in cases outside the recognised category where warnings are required, on a common sense basis. His Honour said, at 319:

"If it appears that a witness whose evidence is important has some mental disability which may affect his or her capacity to give reliable evidence, common sense clearly dictates that the jury should be given a warning, appropriate to the circumstances of the case, of the possible danger of basing a conviction on the testimony of that witness unless it is confirmed by other evidence. The warning should be clear and, in a case in which a lay juror might not understand why the evidence of the witness was potentially unreliable, it should be explained to the jury why that is so. There is no particular formula that must be used; the words used must depend on the circumstances of the case."

831. In our view, as we have said earlier, there was no real prospect that the jury in this case would not have understood the basis on which the applicant contended that Tingiri's notes were unreliable. In the circumstances, therefore, her Honour was not required to give the jury the warning contended for by the applicant.

834. It follows that this appeal ground also fails.

Ground 6 - Contemporaneity of intent and appropriation

838. This ground is concerned principally with the applicant's complaint that her Honour failed properly to direct the jury that before they could convict the applicant of the theft alleged in count 9 they had to be satisfied that the necessary guilty intent was contemporaneous with the appropriation. In that context, it was also claimed that her Honour failed adequately to remind the jury of:

(a) the applicant's evidence that he did not learn about the failure of Tingiri to transmit the $5m to AFG until about 11 July 1992, some nine days after he believed the funds had been sent;

(b) Collins' evidence that the applicant was very angry that the funds had not been sent to the US. It was contended that this evidence was capable of corroborating the applicant's evidence of his belief as to the fate of the funds.

843. It was submitted on behalf of the applicant that her Honour's failure to put clearly to the jury the above matters in the context of the applicable law deprived the applicant of an opportunity of an acquittal on those two counts.

846. The relevant transactions were constituted by the instruction given by the applicant (in his own right and purportedly on behalf of SCA) to WBC to redeem the bank bill which belonged to SCA and to deposit the proceeds into his account and by the notional receipt by him of those moneys when they were paid into his account. We have briefly set out in our summary of evidence, the evidence relating to these counts and the contentions of the respective parties in relation to them.

849. In our view, there is no substance to the complaint that the charge was so inadequate as to amount to a miscarriage of justice. It is true that when her Honour first charged the jury in relation to the transactions, she did not in terms associate the necessary intent of the applicant with his appropriation of the funds. Mr. Lincoln requested her Honour to redirect the jury on this point and she did so. So far as is relevant, her Honour told the jury:

"I have said to you that you must consider the intent of the accused in relation to any specific count as it was at the time to which the count relates. There may, of course, be evidence of matters occurring outside that time which you may consider throw light on the intent of the accused at that time."

853. No doubt, the matter may have been put to the jury more fully, but in our view the direction was adequate in the circumstances and in any event, no further direction was sought. It seems fairly clear that given the context, the second sentence of the reproduced passage from her Honour's charge was a reference to the monetary transactions between 30 June and 2 July 1992 and to the applicant's evidence and that of Collins going to the question of whether he believed until 11 July 1992 that the moneys had been sent to AFG in early July of that year.

856. It should be borne in mind that her Honour had explained to the jury the offence of theft and told them that they must be satisfied beyond reasonable doubt of the existence of each element of the offence before they could find the applicant guilty of the relevant counts, including count 9. In the course of so doing, her Honour explained to the jury the meaning of "dishonesty" and "appropriates". Also, in that context she told the jury that the Crown must prove that the appropriation was done dishonestly in the sense that the accused had no legal right to take the property and knew that he had no legal right to do so.

859. On the following day, her Honour summarised the evidence in relation to count 9 and essentially dealt with the conflict between the applicant and others as to how the SCA letter of directions to WBC of 2 July 1992 was produced. She also dealt with the applicant's contention concerning Heard's signature on that letter.

862. Mr. Lincoln did raise with her Honour his concern that she did not sufficiently explain to the jury that the applicant's explanation that it was not until 11 July 1992 that he discovered that the money had not gone to AFG (and Collins' evidence) were relevant to the issue of his intention to appropriate the money. As we have said in the context of analysing ground 3, the charge must be looked at as a whole and in our view, her Honour sufficiently directed the jury on the law which requires contemporaneity of intent and appropriation. She also referred sufficiently to the relevant evidence of the applicant and Collins. There is no requirement that the trial judge must recount every item of evidence. In our view, there is much to be said for the Crown's submission to her Honour in response to Mr. Lincoln's complaint that he was complaining about matters of detail and no doubt both sides had some complaint that not all details were mentioned to the jury. But in relation to this particular count, it was not in contest that at some stage shortly after he had directed the $5m to be paid to his accounts he had become aware that no similar sum had been transferred by the bank to AFG. Furthermore, it was not in contest that thereafter he had concealed the truth of the matter from SCA and its board and had persisted in his explanation that $5m had gone to AFG in the form of refundable securities. In those circumstances further directions relating to the question whether the appropriation was dishonest and made with the necessary intent to permanently deprive SCA would, we think, have been of no benefit to the applicant.

865. We also note that her Honour had reminded the jury that she was summarising the evidence only to stimulate their memory but that they had to form a judgment upon all the evidence that they had heard. She had also reminded them that they were the judges of the facts and it is for them alone to decide which pieces of evidence are important.

868. In the circumstances, we repeat that there is no merit in this complaint and consequently, this appeal ground must also fail.

Ground 7 - Failure to direct properly on Collins' evidence

872. We have mentioned in our summary of evidence that Collins gave evidence that she prepared the forged letter of 25 January 1993 (Ex.881) making it appear that WBC had confirmed that it would provide a line of credit to the applicant of $16.6m. This letter was used by him to lure Asia Pacific into giving a short-term advance of $1.7m to SCA. Collins said that she prepared that false document upon his instructions. Thus, it seems clear that she acted as the applicant's accomplice in producing the forged document. The applicant, on the other hand, maintained that the letter was genuine and was written by Tingiri. Thus, there was a head-on conflict between his evidence and that of Collins on this issue. One of Mr. Lincoln's complaints under cover of this ground was that her Honour failed to direct the jury as to the potential unreliability of Collins as a witness when she charged them in relation to count 19. He submitted that her evidence was critical to the outcome of count 19 in the sense that if it was accepted by the jury, they would be bound to convict the applicant on that count. Hence, it was argued, the above-mentioned direction should have been given at the time when the jury was charged in respect of that count and her Honour's failure to do that resulted in a miscarriage of justice. Mr. Lincoln also submitted that her Honour wrongly failed to remind the jury of the evidence that came from his cross-examination of Collins.

875. We agree that there was a basis on which the defence could properly seek to cast doubt on the credibility of Collins. For instance, when she made her statement to the authorities approximately 4½ years prior to giving her evidence at the trial, she had not mentioned that she typed Ex.881 or that the applicant was the effective author of it. She could also not recall whether Ex.881 was shown to her prior to coming into court or whether she was questioned about it prior to giving evidence. In cross-examination, however, she was adamant that she had prepared the letter.

878. In charging the jury on this count, however, her Honour summarised the evidence in relation to it and in the course of so doing reminded the jury that Collins had said in her evidence that she typed Ex.881 and that she created it from another Westpac letter and did so on the applicant's instructions. Her Honour also reminded the jury that Collins had on at least one other occasion been wrong in her evidence because she could not remember a particular matter. Some time before she charged the jury in relation to count 19, however, her Honour gave them an accomplice warning in respect of all of Collins' evidence and directed them as to prior inconsistent statements made by her. Her Honour repeated some of those matters at a later stage. Her Honour also told the jury that when she made her statement to the ASC, Collins was concerned about receiving an indemnity from prosecution in respect of the matters pertaining to the charges brought against the applicant.

881. Mr. Lincoln took exception to her Honour's charge on count 19 making the principal point that her Honour had not put or summarised to the jury his cross-examination of Collins. No re-direction was sought in relation to the accomplice warning. Her Honour eventually redirected the jury reminding it that Collins agreed in cross-examination that in her original statement she made no mention of Ex.881. Mr. Lincoln complains, inter alia, that the redirection was inadequate.

884. In our view, her Honour was not required to repeat the accomplice warning in relation to Collins when she came to deal with count 19. She had given it earlier and no complaint is made about it. It is not a requirement for a fair trial that such a warning must be given again and again in respect of every count which is dealt with by the trial judge in his or her charge. In our opinion, her Honour's warning was appropriate and nothing further along that line was required in the context of this case.

887. We are also of the view that it was unnecessary for her Honour to redirect the jury further than she did in respect of Mr. Lincoln's cross-examination of Collins in relation to Ex.881. The jury was reminded by the redirection of a critical part of the cross-examination, namely, that Collins had not previously mentioned Ex.881 to the authorities and there was no need for her Honour to go beyond that.

890. Furthermore, we do not accept the underlying assumption to this ground of appeal that the evidence of Collins was critical to the evidence supporting the offence charged in count 19. The count alleged that the applicant dishonestly obtained property belonging to another, namely, Asia Pacific by deceptive conduct. The conduct alleged was that the applicant had represented to Woss of Asia Pacific both personally and through his solicitor that it could safely advance funds to SCA upon the security of advances which WBC was intending to make to the applicant. Quite apart from the fact that Ex.881 was passed to Woss by the applicant's solicitor, no doubt with the applicant's authority, there was ample other evidence before the jury from which they could conclude that WBC had no intention of advancing $16.6m to the applicant.

893. In the circumstances, in our opinion there has not been a failure by her Honour properly to direct the jury in relation to the evidence of Collins. It follows that this appeal ground must also fail.

Grounds 10, 12, 13 - Verdicts on counts 4, 16, 23 unsafe and unsatisfactory

897. Although these grounds were argued together, since each involved a different transaction and despite some commonality between them, it is necessary to consider each of the grounds separately.

901. This ground concerns count 4. We have summarised the evidence and the competing contentions relating to it in paragraphs 32-39 of this judgment. The applicant submitted that although the Crown relied substantially on Janet O'Meara's evidence to establish that he had dishonestly appropriated the money in question, her Honour failed to deal with that evidence in her charge and she also failed to link the relevant law with the relevant facts. Hence, it was contended, the jury's verdict on count 4 was unsafe and unsatisfactory.

904. We have already dealt in the context of examining ground 3, with the issue of whether her Honour sufficiently related the relevant law to the relevant facts when charging the jury. In our view, there is no basis for this aspect of the complaint. The remaining question, therefore, is whether her Honour failed adequately to deal in her charge with O'Meara's evidence and if there was such a failure, whether that rendered the verdict in relation to count 4 unsafe and unsatisfactory.

907. In our view, the transcript of her Honour's charge makes it clear that she dealt with the evidence of O'Meara and with that of the applicant and with his contention that it was all an innocent mistake on his part. There is no basis, in our opinion, for contending as Mr. Lincoln has that her Honour's charge in relation to the evidence of O'Meara was inadequate.

910. There was clearly a conflict between the applicant's version of events and that given by O'Meara and Burge and what emerged from the documentation. As we have said in our summary of the evidence, the issues before the jury in respect of this count were confined and were essentially concerned with the credit of the witnesses and the drawing of inferences. The resolution of these matters was clearly a matter for the jury and it was open to them to reach the conclusion they did. We will not repeat here the evidence which we have already summarised but it is clear enough to us that the jury could have quite properly rejected (as it must have done) the applicant's account of the events and concluded that they were satisfied beyond reasonable doubt that he had appropriated the funds dishonestly. We cannot discern any merit in Mr. Lincoln's contention that the verdict of the jury on this count was unsafe or unsatisfactory.

918. This ground relates to count 16. We have earlier summarised in paragraphs 73-80 the allegations made in that count and the evidence which has been led in relation to it. On or about 1 December 1992, the applicant gave Coats a letter dated 1 December 1992 which purported to be an original from AFG's lawyers in which it was stated that AFG had unconditionally withdrawn its claim for the payment of the PVA of approximately $5m. The principal issue was whether the applicant had produced that letter from its original, but deleted in the process the sentence which stated that the withdrawal of the AFG claim was not unconditional so as to deceive Coats on the matter. In his evidence Coats said that he received a copy of the forged letter from the applicant. The applicant denied that he had transmitted the letter to Coats by facsimile transmission because, inter alia, it was not the usual practice to forward documents to the Brisbane office in that manner. The applicant also denied having produced the forged letter. He claimed that Coats must have done it because the original letter from the US attorneys had been faxed to him (although it was addressed to the applicant).

921. Mr. Lincoln argued that in view of this conflict, the jury could not have been satisfied beyond reasonable doubt that it was the applicant who had forged the letter and forwarded it to Coats for the purpose of deceiving him as to the true claim by AFG on SCA.

924. In our view, however, it was open for the jury to accept Coats' evidence that he received the "doctored" letter in Brisbane and to reject the applicant's denial that he was involved in falsifying it and forwarding it to Brisbane.

927. Accordingly, there is no basis for contending that the jury's verdict in relation to this count was unsafe and unsatisfactory. Consequently, this appeal ground must fail.

932. This ground relates to count 23. The allegation and the evidence relating to it have been summarised by us in paragraphs 110-114. Again, the principal issue was whether the applicant "doctored" a document, on this occasion the letter from Nankin of 25 February 1993 by making a copy of it and omitting from it the requirement of the Stock Exchange for reconciliation of SCA's accounts with the forecast in its prospectus.

935. In his submissions in support of this ground, Mr. Lincoln effectively repeated the reasons he put to the jury as to why they should return a verdict of not guilty on count 23. In particular, he contended that given the lack of credibility of Sir Leo's evidence and having regard to the evidence of Nankin that Coats used the word "reconciliation" during their conversation at a time when Coats claimed that word had been removed from the five-paragraph letter which he said he had not received, the jury should have accepted the applicant's version that he had given the original version of the letter to Coats and, therefore, did not intentionally or otherwise mislead the board about the Stock Exchange enquiry. Hence, Mr. Lincoln contended, the jury's verdict on this count was unsafe and unsatisfactory.

938. Again, as with the case of grounds 10 and 12, the essential issue in relation to count 23 was one of credibility. That was a matter for the jury. We agree with the Crown's submission that the jury was entitled to accept the Crown's evidence and reject that of the applicant. In particular, it was for the jury to determine:

(a) whether Sir Leo's evidence as to the events in the boardroom when there was a telephone discussion between Nankin and Coats, were undermined by his initial recollection that the board meeting took two days and not three and that Nankin rang Coats and not the other way around;

(b) how it used Nankin's evidence about Coats' use of the word "reconciliation";

(c) whether Coats was the person who tampered with the letter.

944. Moreover, the jury was entitled to find that the applicant had a strong motive to keep from the board the request from the Stock Exchange for a reconciliation of the actual loss with that projected in the prospectus. During the hearing of the appeal, Mr. Lincoln agreed with the President that there was evidence before the jury that entitled it to find that the applicant was desperate to keep SCA afloat and that the jury could take that into account against the applicant in determining whether he "doctored" the letter.

947. In the circumstances, therefore, in our view it could not be sensibly said that the jury's verdict on count 23 was unsafe or unsatisfactory. Consequently, this appeal ground fails, and with it, the application for leave to appeal against the convictions.

951. The primary contention of the applicant is that the sentence imposed by the judge was manifestly excessive. As we have earlier indicated, the sentence of 10 years, with an 8 year minimum, was entirely influenced by the sentences imposed on counts 9 and 11; namely the respective thefts of $5 million and $4.462 million. At the time of sentence the offences of theft carried a maximum penalty of 10 years imprisonment. In respect of each of counts 9 and 11, the learned judge imposed a sentence of 8 years imprisonment and directed that two years of the sentence imposed on count 11 should be served cumulatively upon the sentence imposed on count 9.

954. In her carefully crafted sentencing remarks, which were delivered some two weeks after the jury's verdict, her Honour traced the course of conduct which had been engaged in by the applicant in respect of each of the offences of which he had been found guilty. She noted that he was, at the time of sentence, aged 61 years. She traced his history in the world of commerce leading to a receipt by him of some $18 million in 1988/9 as a result of the "management buy out" of the "Chemplex arm" of Monsanto. She further noted the assets in which the applicant had invested these moneys which, on the evidence, had proved to be anything but satisfactory. By 1993 he had become a bankrupt, having entirely lost his "fortune". Her Honour accepted that the applicant had no prior convictions and had made significant contributions to charitable aspects of the community.

957. Her Honour said that she accepted that she "should not impose a crushing sentence, but rather one which would allow [the applicant] to come back into society again and build a new life". This, she said, was the submission of the applicant's counsel and the prosecutor alike. Her Honour said that, in view of his age, it was unlikely that any significant opportunities would be available to the applicant. Nevertheless, she said:

"I accept that it is important that you should be able to rebuild a personal life in retirement as a member of the community to which you have contributed in the past. This is the only matter which I am able to take into account in mitigation to any significant extent."

961. Her Honour then turned her attention to the gravity of the offences and the degree of criminality of the applicant's conduct which those offences reflected. She noted that, in effect, he had stolen some $11 million from SCA. She said:

"The whole story from beginning to end is one of greed of a wealthy man who wished so much to become more wealthy and later as time went on at least to preserve what he had, that he was prepared to forge and to steal and then to lie and deceive and forge again in order to conceal his forgeries and thefts."

His victims were many but, in the long run, were substantially the shareholders and creditors of the company. Her Honour concluded that the applicant had no feelings of remorse for what he had done, which was in gross breach of the trust which he owed to the company. She accepted that the applicant was unlikely to offend again but that it was:

"of overriding importance that other people in authority and positions of trust are made to understand what will be the result of behaviour such as yours ..."

967. Counsel for the applicant contended that the sentence imposed was manifestly excessive and did not fulfil the purposes which her Honour had set out to achieve; namely that the sentence imposed should not be "crushing" and that it should be of such proportions as would enable the applicant to resume a useful function in the community of which he had been a contributing member for most of his life. It was also put by Mr. Lincoln that her Honour was in error to regard "greed" as the entire motivation for the applicant's conduct. It was put that the applicant would be 70 years of age when released from gaol and that 10 years was simply far too great for a man of his years, notwithstanding the gravity of the frauds which he had committed.

970. The respondent submitted that the sentence which her Honour imposed was "within the range of her discretion" for offences which she regarded, correctly, as a systematic breach of trust. It was, so the respondent contended a case of theft "of the worst sort" (cf. R. v. Bond (1997) 95 A.Crim.R. 246). Her Honour was therefore entitled, so the Crown submitted, to impose sentences of 8 years for the offences of theft alleged in counts 9 and 11, even though the statutory maximum was 10 years.

973. It has often been said that whether a sentence is manifestly excessive in all the circumstances is a question which does not admit of much argument. In our view, the sentence of 10 years imprisonment which her Honour imposed on the 61 year old applicant is manifestly excessive. It is a sentence which, we think, fails to achieve the purposes which her Honour, quite properly, set out to achieve; namely to impose a sentence which would not be "crushing" to a man of the applicant's age and which, because of his prior good conduct, would be consistent with the prospect that he should have useful time left to re-establish himself within the community. In our view the sentence imposed, whether fully served or served to the point of eligibility for parole, will leave the applicant little or no opportunity to re-instate himself in the manner which her Honour intended.

976. In taking the view which we have, we are not unconscious of the gravity of the crimes of which the applicant has been convicted. They constituted, as her Honour said, a systematic and premeditated fraud on a number of people and were frauds committed in breach of the trust which the applicant owed. This Court has recently said that frauds of this type, which not infrequently are committed by persons of hitherto good character, should be met by stern punishment in which the element of general deterrence will play a prominent part (see, for example, Director of Public Prosecutions v. Bulfin [1998] 4 V.R. 114, particularly per Charles, J.A. at 131-2; R. v. Brian Edward Quinn, Court of Appeal, unreported, 10 October 1997, per Brooking, J.A. at 34-5).

979. Those purposes were, as it seems to us, fulfilled by the sentences which her Honour imposed on counts 9 and 11. However accepting that the sentences which her Honour imposed in respect of the individual offences were not themselves disproportionate to the gravity of the relevant crimes, we are of the view that it was not appropriate in the circumstances to cumulate two years of the sentence imposed on count 11 upon the sentence imposed on count 9. Her Honour gave no specific reason for ordering the measure of cumulation. By ordering cumulation, it appears to us that the total effective sentence has gone well beyond what courts in this State have been prepared to impose for frauds of this character upon persons of similar age and in similar circumstances. Although her Honour characterized the frauds committed by the applicant as motivated by pure greed and with the desire to achieve more wealth, the circumstances suggest to us that it might be equally true to say that the offences were fuelled by a desperation to bring into existence a national air-line which he sincerely, but misguidedly, believed would be successful. It may be that there is not much difference between the motives which her Honour ascribed to the applicant and the one which we have suggested. The fact is, however, that unlike many of the fraudsters with whom the courts have been confronted, the applicant has lost his personal fortune in pursuing his "dream". This fact will make it even more difficult for him to re-establish himself in the community if he has to serve the full sentence which her Honour imposed.

982. If the sentences on counts 9 and 11 are to be served concurrently, the total effective sentence of 8 years is still a substantial sentence, but one which in our view will more readily achieve the purposes which her Honour proposed, whilst at the same time giving principles of general deterrence ample scope.

985. In accordance with the reasons we have given, we would allow the application for leave to appeal against sentence. We would however do so only for the purposes of removing the order for cumulation, but otherwise we would confirm the individual sentences which her Honour imposed.

988. We direct, pursuant to s.11 (1) of the Sentencing Act 1991 that the applicant serve a minimum period of 6 years before becoming eligible for parole.