R v Reid [1999] VSCA 98

R v Reid [1999] VSCA 98 - VSCA 1999 case summary — Zoe

[101]

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.

[167]

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".

[320]

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.

[330]

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.

At a glance

Court

Decision date

Before

Source

Judgment (391 paragraphs)

Parties

Cases Cited (2)