R v Voyka [2006] QCA 493

SUPREME COURT OF QUEENSLAND

CITATION: R v Voyka [2006] QCA 493

PARTIES: R v VOYKA, John (appellant/applicant)

FILE NO/S: CA No 149 of 2006 / CA No 186 of 2006 / DC No 160 of 2004

DIVISION: Court of Appeal

PROCEEDING: Appeal against Conviction and Sentence

ORIGINATING COURT: District Court at Cairns

DELIVERED ON: 24 November 2006

DELIVERED AT: Brisbane

HEARING DATE: 29 September 2006

JUDGES: Jerrard and Keane JJA and Jones J / Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDER: 1. Appeal against conviction dismissed 2. Application for leave to appeal against sentence dismissed

CATCHWORDS: CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AND NEW TRIAL – PARTICULAR GROUNDS – MISDIRECTION AND NON-DIRECTION – WHERE GROUNDS FOR INTERFERENCE WITH VERDICT – PARTICULAR CASES – WHERE APPEAL DISMISSED – appellant convicted of five counts of defrauding the Commonwealth under s 29D Crimes Act 1914 (Cth) – appellant did not deduct Pay as You Earn tax from the wages of his workers and remit that to the Australian Tax Office (ATO) – appellant referred to workers as “sub-contractors” rather than employees – appellant ignored advice from ATO that workers fell within definition of “employees” under s 221A(1) Income Tax Assessment Act 1936 (Cth) – whether trial judge erred in giving any directions regarding statements said to be lies by the appellant in circumstances where the prosecution chose not to call workers from callings such as draftspersons, plumbers and electrical engineers – whether trial judge gave inadequate directions as to lies / CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AND NEW TRIAL – PARTICULAR GROUNDS – MISDIRECTION AND NON-DIRECTION – WHERE GROUNDS FOR INTERFERENCE WITH VERDICT – PARTICULAR CASES – WHERE APPEAL DISMISSED – whether trial judge erred in failing to warn jury to closely scrutinise the evidence of a particular witness in circumstances where the evidence indicated that pressure had been applied to the witness by an Australian Federal Police Officer, prior to him receiving undertaking that he would not be prosecuted on the contents of a statement subsequently given against the appellant / CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AND NEW TRIAL – PARTICULAR GROUNDS – MISDIRECTION AND NON-DIRECTION – WHERE GROUNDS FOR INTERFERENCE WITH VERDICT – PARTICULAR CASES – WHERE APPEAL DISMISSED – whether a Jones v Dunkel (1959) 101 CLR 298 direction was required / CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AND NEW TRIAL – INTERFERENCE WITH DISCRETION OR FINDING OF JUDGE – PARTICULAR MATTERS DISCHARGE OF JURY – whether trial judge erred in failing to discharge the jury when two witnesses gave inadmissible and highly prejudicial evidence regarding conversations with the appellant’s “works manager” / CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AND NEW TRIAL – PARTICULAR GROUNDS – MISDIRECTION AND NON-DIRECTION – WHERE GROUNDS FOR INTERFERENCE WITH VERDICT – PARTICULAR CASES – WHERE APPEAL DISMISSED – whether the summing up in relation to the element of dishonesty was unbalanced and focussed solely upon the prosecution assertions with no mention of the factors relied upon by the appellant / CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AGAINST SENTENCE – APPEAL BY CONVICTED PERSONS – APPLICATIONS TO REDUCE SENTENCE – WHEN REFUSED – GENERALLY – sentenced to three and a half years imprisonment for each count, to be served concurrently, to be released after giving security by recognisance in the sum of $5,000 after serving 21 months imprisonment – whether sentencing judge placed insufficient weight on applicant’s physical and mental health / CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AGAINST SENTENCE – APPEAL BY CONVICTED PERSONS – APPLICATIONS TO REDUCE SENTENCE – WHEN REFUSED – GENERALLY – whether sentencing judge was wrong to sentence on the basis that the ATO was deprived over 5 years of $640,000 – whether the figure of $640,000 is misleading / CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AGAINST SENTENCE – APPEAL BY CONVICTED PERSONS – APPLICATIONS TO REDUCE SENTENCE – WHEN REFUSED – GENERALLY – whether sentencing judge had sentenced on an incorrect basis – whether sentencing judge sentenced on the basis of a finding that “in most cases” the workers were paid more than the net rate but less than the gross wage that they could have earned working in a similar job elsewhere and that this had benefited the applicant in an amount of several hundred thousand dollars / Crimes Act 1914 (Cth), s 29D / Caratti v R [2000] WASCA 279; Appeal No 127 of 1999, 130 of 1999 and 236 of 1999, 28 September 2000, considered / Edwards v The Queen (1993) 178 CLR 193, considered / Jones v Dunkel (1959) 101 CLR 298, cited / R v Brown [2001] QCA 53; CA No 290 of 2001, 30 November 2001, considered

COUNSEL: B G Devereaux SC, with J M Wilson, for the appellant/applicant / S D Hall SC, with M J McCarthy, for the respondent

SOLICITORS: Legal Aid (Queensland) for the appellant/applicant / Director of Public Prosecutions (Commonwealth) for the respondent

1. JERRARD JA: On 9 May 2006 Mr Voyka was convicted after a trial on five counts of defrauding the Commonwealth, and on 29 June 2006 he was sentenced to three and a half years imprisonment on each count, to be served concurrently. The learned judge ordered that Mr Voyka be released from that imprisonment upon giving security by recognisance in the sum of $5,000, after he had served 21 months of those sentences. The judge declared that 51 days of pre-sentence custody between 9 May and 29 June 2006 was imprisonment already served under that sentence. Mr Voyka has appealed against all of his convictions, and has applied for leave to appeal against his sentence.

The offences

2. The five counts charged breaches of s 29D of the Crimes Act 1914 (Cth), and generally corresponded in the dates alleged to the financial years from 1995/1996 to 1999/2000. Mr Voyka was the sole proprietor of a business ABC Construction and Engineering (“ABC”), operating in and around the area of Cairns. Both before, during, and after the five year period covered by the charges ABC engaged a large number of workers to carry out a variety of work. Manufacturing was undertaken at ABC’s premises in Cairns, and ABC contracted with a number of other businesses to provide skilled workers and trade assistants at an hourly rate. The prosecution called 44 of a larger number of those workers engaged by ABC during the period covered by the charges. Those 44 workers were primarily welders and boilermakers, but included trade assistants, a crane operator, a roof plumber and a painter. The prosecution case was that Mr Voyka knew that those workers were employees of ABC, and that although he referred to them as subcontractors, he had no honest belief that that was the case. The prosecution allegation was that in each financial year in respect of each worker, Mr Voyka had dishonestly failed to deduct and remit Pay as You Earn (“PAYE”) tax to the Tax Commissioner.

3. Neither party on the appeal complained about the summary the learned trial judge gave the jury of the elements of the offence on each count, in these terms:

“[I]n respect of each count the Crown must satisfy you that apart from the date and place set out in the indictment, firstly, that the workers engaged by Mr Voyka were employees; secondly, that Mr Voyka knew that they were employees; thirdly, that Mr Voyka knew that he was required to deduct tax from employees’ wages and remit that tax to the taxation office; fourthly that Mr Voyka intentionally failed to deduct that tax and remit; fifthly, that the Commonwealth was deprived of that money; and sixthly, that Mr Voyka used dishonest means to deprive the Commonwealth of that money.”¹

Advice from the Australian Tax Office

4. The appellant’s written argument advised that only the second and sixth elements described in that direction were seriously in issue at the trial. The evidence the prosecution led included evidence of an interview between taxation officers and Mr Voyka on 20 June 1995 in which, as is conceded in the appellant’s written outline, those officers made it plain to Mr Voyka that they considered the workers were ABC employees, and that he should be deducting and remitting their tax. That interview was between a Mr Beshaw and Mr Flynn of the Australian Tax Office (“ATO”) with Mr Voyka, conducted at the office of Mr Sampson, an accountant whose services Mr Voyka engaged.

5. Mr Beshaw’s evidence included that the discussion about the capacity of the workers was based on a standard questionnaire containing about a dozen questions, and based on a ruling as to who constituted an employee. The questions included whether the person was paid at an hourly rate; whether the person tendered for the work; whether the person supplied materials; whether if the person could not perform the work himself or herself did the person have the right to hire an employee themselves and send someone out to do the work; whether if the work was not performing to a satisfactory level, was it the person or the employer who was liable to repair the defect and for its cost; and other relevant questions of that nature. Mr Flynn’s evidence included that he and Mr Beshaw had both concluded, based on the answers given by Mr Voyka (and Mr Sampson), that the workers under discussion were “straight out employees, they weren’t subcontractors at all”,² and Mr Flynn said the ATO investigators had certainly made that known that day to Mr Voyka.

6. The ATO sent Mr Voyka a letter on 12 July 1995 informing him that some 30 named persons whom Mr Voyka currently deemed to be subcontractors fell, in the ATO’s opinion, within the definition of an employee as defined in s 221A(1) of the Income Tax Assessment Act (1936) (Cth) (“the ITAA”). That definition was quoted in the letter, and it is “Employee means a person who receives, or is entitled to receive, salary or wages”; and the relevant definition of salary or wages was also quoted in the letter, that being payments made “under a contract that is wholly or principally for the labour of the person to whom the payments are made”. The letter went on to advise of the obligation in s 221C(1)A of the ITAA for the deduction of tax instalments from the salary or wages of employees at the time the salary or wages are paid, and advised that the named persons should be treated as employees and taxed accordingly from 1 August 1995. Despite receipt of that letter – and at least two of the persons named in that letter were among the 44 people the prosecution called before the jury – the evidence was that Mr Voyka did not act on that advice from the ATO.

Evidence of Mr Voyka’s instructions

7. The prosecution called a Peter Ellington, one of the people named in that letter of 12 July 1995, who described how Mr Voyka had given him a position which Mr Ellington described as works manager of ABC. Mr Ellington became works manager because of his industrial experience in the Cairns area. That position required that he approach companies telling them of “people we had available”³, and organising the supply of workers to those companies. The workers were people taken on by ABC.

8. His evidence described his initial conversations with workers signed by ABC, and how those people were required to sign an application form, given to Mr Ellington by Mr Voyka. That form describes the signatories to it as people acting as “subcontractors” for ABC. The prosecution relied on its contents as showing that Mr Voyka well understood the criteria for what constituted a subcontractor as compared to an employee, and as had been explained to him by those ATO officers. The standard application form⁴ described the people signing as:

reserving the right to employ additional labour if and when required;

entitled to weekly payments made on work completed;

obliged to quote a price, with a deduction to be made if material was provided by ABC construction and engineering;

obliged to complete in their own time and without payment any work which was unsatisfactory;

obliged to supply their own tools such as service vehicle, oxy and welding equipment;

self-employed.

The form also advises that ABC would not be responsible for workers’ compensation, insurance, et cetera.

9. Despite the terms of that document, Mr Ellington’s evidence was that in his conversations with new workers, he “basically said they were subcontractor forms for them to fill it out and sign the bottom of it.”⁵ He said that Mr Voyka had told him that “[t]hey had to be contractors and we don’t take any tax out of it.”⁶ But the remainder of his evidence was a description of his taking on people who were employees, and only employees. Those employees were paid an hourly rate, time sheets were kept, and although they provided their own hand tools, ABC, for example, supplied any needed welders and the like. Pay rates were set by Mr Voyka, and Mr Ellington negotiated those on the workers’ behalf.

10. Significantly, Mr Ellington did not suggest in evidence that he actually told any person he signed up that that person was to supply needed oxy or welding, or any other equipment, or a vehicle, or that they were to repair unsatisfactory work in their own time and without payment to them, or that they could themselves employ additional labour, and would have to pay for material provided by ABC. It was not suggested in cross-examination that he should have ever said that to any of those people, or had been instructed to say that. Mr Ellington’s evidence of the limited communications that he did have with the workers was consistent with the limited instructions he described being given, and consistent with the description of their roles given by the 44 people the prosecution called.

The evidence of the employees

11. The vast majority of those had spoken with Mr Ellington when first being taken on. Their evidence painted a consistent picture of people who thought of themselves as employees, who provided their own basic hand tools, who worked for an hourly rate, worked as and where directed by a foreman or site supervisor, who did not provide materials, who were paid cash on a weekly basis calculated on their hours of work, who did not present quotes in advance for work or invoices after, and who used only the welding equipment, vehicles, and materials, supplied to them. So overwhelming was the effect of their evidence in demonstrating that they were all employees and not subcontractors that senior counsel for Mr Voyka submitted to the jury in his closing address that:

“Blind Freddy, in retrospect, would know those people were employees.”⁷

12. The period in which those 44 people had been employed by ABC appeared in exhibit 4, a document put in by consent,⁸ and those differing periods of employment covered the five years of the five counts. Their evidence showed that Mr Ellington had been giving his very limited description of their roles to those employees over that five year period. What did emerge from the evidence of the employees, considered as a block, was that what they chiefly remembered of their initial conversations with Mr Ellington was the information that tax was not taken out of the pay they would get. Some could recall being told they were subcontractors, and some could recall signing documents.

Mr Sampson’s evidence

13. The prosecution also called the accountant Mr Sampson. Mr Sampson practised as an accountant in Cairns, and he swore he met Mr Voyka in about 1993, when Mr Voyka requested Mr Sampson’s assistance in preparing a profit and loss statement to obtain finance to purchase property. Mr Voyka had explained that he was in the business of steel fabrication, and over time Mr Sampson prepared financial statements for him. He did not prepare tax returns as Mr Voyka’s tax agent, but was asked in about 2001 to give Mr Voyka an estimate of what his tax liability might be for a number of preceding years. Mr Sampson’s preparation of financial statements for Mr Voyka in some of those earlier years had led Mr Sampson to notice that payments were recorded in cheque-butts to people described as subcontractors. Mr Sampson had queried Mr Voyka about that on several occasions over those years, on Mr Sampson’s evidence, and he said that Mr Voyka had told him that in Mr Voyka’s opinion the people were all subcontractors, and Mr Sampson was to treat them as such. Mr Sampson raised the matter of PAYE payments with Mr Voyka on some occasions and Mr Sampson’s evidence was that Mr Voyka said he relied on advice he had received in an earlier year to the effect that he was not required to deduct tax from his subcontractors.⁹

14. In mid-June 1995 Mr Voyka approached Mr Sampson, with a letter from the ATO officers advising that they would inspect records relating to the taxation affairs of ABC on 20 June 1995 at 8.30 am. Mr Voyka asked if that meeting could be held in Mr Sampson’s office, rather than Mr Voyka’s premises. Mr Sampson agreed, and the meeting described earlier took place in Mr Sampson’s office. Mr Sampson’s evidence was that Mr Voyka left immediately after the meeting, and he did not ask any advice from Mr Sampson in respect of it; the letter dated 12 July 1995 (actually mis-stamped 12 July 1985)¹⁰ was later sent to Mr Sampson’s office. Mr Sampson gave it to Mr Voyka, and told him that it appeared the ATO had given Mr Voyka the opportunity to start with a clean slate, and that Mr Voyka should do as the ATO instructed in the letter. Mr Sampson could not recall any response. Mr Sampson said that he raised the employment status of Mr Voyka’s workforce with Mr Voyka on a number of occasions after that 20 June 1995 meeting in Mr Sampson’s office, and Mr Sampson’s evidence was that Mr Voyka:

“[J]ust reaffirmed the fact that he was going to continue employing them on the same basis as he had done before the interview with the tax office.”¹¹

15. Mr Sampson said that both before and after that meeting he had told Mr Voyka what Mr Sampson thought a subcontractor was. In brief that was someone engaged to do work to produce a result and who provided a quote, and who was able to supply the materials and any support labour for the job. Mr Sampson had also told Mr Voyka of Mr Sampson’s view that an employee was a worker where there was a master-servant relationship, and where the employee was given directions and controlled by the employer. Mr Sampson said Mr Voyka had acknowledged the advice, but said he would continue to rely upon the earlier advice that he had received. Mr Voyka also told Mr Sampson that Mr Voyka classed the workers with whom he dealt as subcontractors because they were supplying their own vehicles, equipment, and tools.¹²

16. Mr Voyka showed Mr Sampson the documents upon which Mr Voyka told Mr Sampson he relied for his opinion that he dealt with subcontractors rather than employees. That was a letter dated 31 July 1991, relevantly sent by the ATO to Mr Voyka as the proprietor of a business KJ Welders, advising that manufacture of steel fabrication which did not involve any on site work such as construction, erection, or installation, would not be considered to be a prescribed activity, and that where the work involved the manufacture of steel only, the payment would not be subject to prescribed payments tax. Mr Sampson’s evidence was that Mr Voyka said that that business had ceased trading, and that Mr Sampson had suggested to Mr Voyka when shown the letter that the law might have, and probably had, changed since the date of the letter; he swore that Mr Voyka replied flippantly that Mr Voyka would simply blame the accountant and say that he was not up to date with his knowledge.¹³

17. Mr Sampson’s evidence included that he recalled having noticed on one occasion that Mr Voyka advertised in the Labour Hire section of the Yellow Pages, and that Mr Voyka simply shrugged his shoulders when Mr Sampson remarked on that. Mr Sampson identified a document, Exhibit 95,¹⁴ as one containing paragraphs which Mr Sampson had prepared for insertion by Mr Voyka in correspondence with a union. Mr Sampson swore that what he wrote was what Mr Voyka wanted to say in Mr Voyka’s reply to the union, and that Mr Voyka had provided Mr Sampson with that information, and had asked Mr Sampson to put Mr Voyka’s words into a statement that someone else could understand. The paragraphs Mr Sampson prepared read as follows:

“ABC Construction has received advice from the Prescribed Payments (PPS) section of the Australian Taxation Office that work involved in the manufacture of steel is not subject to PPS tax.

All work is carried out on a subcontract basis and payments made to subcontractors are not subject to ‘PAYE’ tax instalments.

All subcontractors are required to hold their own insurances.

Based on above no liability exists for any superannuation.

The State Office of State Revenue has investigated ABC Construction & Engineering affairs regarding the implication of payroll tax and has concluded that payments are made to subcontractors not employees.”

18. Mr Sampson’s evidence was that he had not provided any considered advice to Mr Voyka on the issues or matters asserted in those sentences, and that what he wrote relied on what Mr Voyka had told him. For example, Mr Sampson had no knowledge of an investigation by the State Office of State Revenue of ABC Construction & Engineering and its affairs, nor of any conclusions reached by that Office.

19. A handwritten note on those statements prepared for communication to a union shows that Mr Sampson wrote them on or about 1 March 1997; that was when he sent them to Mr Voyka. Mr Sampson gave evidence in similar vein about a letter on his letterhead dated 1 April 1999, sent to Mr Voyka, which read as follows:

“Further to your recent telephone request I confirm that during the last six years that I have acted as your Accountant, your books and records have been examined by several government departments and the following were the results of these reviews:-

Australian Taxation Office

1. Payments made by you were deemed subcontract payments, and as such not subject to P.A.Y.E. tax deductions.

2. As these payments were deemed not to be wages, no superannuation contributions are necessary.

3. These subcontract payments were also reviewed by the PPS section and deemed not to fall within the provisions of Prescribed Payments.

Office of State Revenue

1. An extensive review was conducted by the payroll tax section of this office and a decision was made that payments were not of a salary and wage nature.

WorkCover

1. A review conducted by this office also concluded that payments made were not subject to work cover by yourself.”¹⁵

It was signed by Mr Sampson.

20. His evidence was that he had been pestered by Mr Voyka for a considerable time to write a letter in those terms, was reluctant to do so, and that Mr Voyka wanted the letter to “enable him to get some boys, as he put it, on the job.”¹⁶ Mr Sampson said Mr Voyka told him what to put in the letter, and that none of those things were within Mr Sampson’s actual knowledge. He signed the letter to get Mr Voyka off his back. Mr Sampson said that at that time he was drinking heavily and was emotionally unstable. He swore that he had no independent knowledge of the assertions of fact in the letter, and the propositions had all come from Mr Voyka.

21. Mr Sampson also identified his signature on another document, a letter under his letterhead dated 28 February 1997 and addressed to Mr Voyka, which read:

“Dear sir,

Re: Sub-contract Agreement

Further to your request regarding the validity of the abovenamed agreement I confirm that this has been reviewed and accepted as a bona fide sub-contract agreement by both the State Government Office of State Revenue and the Australian Taxation Office.

If you require any further information please contact my office.”¹⁷

Mr Sampson did not recall writing that letter, but accepted it was his signature, and swore he had no independent knowledge of whether an agreement had been reviewed and accepted by either the Office of State Revenue or the ATO. The prosecution led evidence that the document had been found in Mr Voyka’s office.

22. Mr Sampson also identified another document, dated 10 October 2000, Exhibit 66 at the trial and headed “‘Worker’ insurance advice form for employers”. A portion of the document advises that “[i]f you would like an official decision from WorkCover about who in your workplace is considered to be a ‘worker’ after 1 July 2000, please fill out this form detailing the person’s employment arrangements.” Mr Sampson said that he had entered the handwritten answers to the various questions in the document, inserting information given to him by Mr Voyka, who had brought the form to him asking for help to fill it out. Mr Voyka signed the form. Mr Sampson’s evidence was that he had no independent knowledge of the accuracy of the answers supplied by Mr Voyka and inserted by Mr Sampson. The answers describe the nature of the business of ABC as steel fabrication, and, without identifying either the number or names of the people concerned, says of each of them that:

the contracts are not for labour only;

the person is required to provide a work vehicle specifically to complete the project;

the person is required to provide materials as part of the contract;

the person is required to provide plant and equipment specifically required to complete the contract. Handwritten details state those include service vehicles, mobile welding equipment, scaffolding and any other necessary equipment;

the contracts are with people, not partnerships or proprietary limited companies;

the person has been engaged before;

the person does not work exclusively for ABC during the period of the contract;

the person is paid progressively at completion of work stage;

ABC does not deduct tax from payments made to the person;

the person is not paid under an award or an enterprise agreement or salary package;

the person has control over how the job will be completed;

the person has to fix any defects in the work at their own cost.¹⁸

23. Mr Voyka had been faxed Exhibit 66 by an officer of WorkCover Queensland, who spoke to Mr Voyka on 10 October 2000, and Mr Voyka had advised he would have his accountant complete that form and fax it back to WorkCover. That officer’s evidence was that Mr Voyka told the officer over the telephone that the majority of Mr Voyka’s subcontractors did supply their own plant and materials, but that if a contract was a substantial one, ABC would supply the materials; the contractors were to supply their own work vehicle, welder, generator and non-substantial plant and equipment. They were also responsible for fixing any defects, and could refuse to work for ABC when it required work done. Payments to them were either on completion of the job or by progress payments. That oral advice was consistent with the answers Mr Sampson said Mr Voyka had directed Mr Sampson to complete on the form.

24. Mr Sampson’s evidence included that he had become aware in late 1999 that the ATO was investigating Mr Voyka, and that at one stage Mr Voyka had said words to the effect:

“We stick together, we’ll get through this.”¹⁹

In cross-examination it was established that an Australian Federal Police (“AFP”) officer had told Mr Sampson that he could go to prison for 25 years, but Mr Sampson claimed in re-examination to have been unmoved by that threat, and to have simply then left the office of the relevant police officer. The only challenge in cross-examination to Mr Sampson’s evidence was the suggestion that he had not told Mr Voyka that “The law may have and probably has changed by now” referring to the letter dated 1991. Mr Sampson was also reminded that in an interview with an AFP officer, he had said that Mr Voyka had told him to “tell the truth”. Mr Sampson agreed that he must have said that to the police officer, but claimed still to recall hearing Mr Voyka say that they should “stick together”. In re-examination he said he had received a letter from the Director of Public Prosecutions confirming that that entity was not interested in him in connection with the matters before the court, as he understood it.²⁰

25. Mr Voyka was interviewed by AFP officers on 19 June 2000, and in that interview he described how he provided workers for different sites, riggers, boilermakers, fitters and so forth, although he said that “...all these people that working for us is self-employed subcontractors”. He also said of them that they:

“usually supply their service vehicle the welding machine they are responsible for a job that they doing and they are responsible like you know subcontractors book that we are putting in. They are responsible to repair any faulty workmanship...”

He added that:

“[W]e pay them a gross income we don’t take any tax from that income because they are subcontractors.”²¹

26. That is a description of the evidence the prosecution led. It established that Mr Voyka had been advised before the beginning of the period covered by the five counts on the indictment, and reminded throughout that period, of the essential matters that distinguished an employee from a subcontractor. He had repeatedly represented that the workers engaged by him were independent subcontractors, consistently displaying in those representations a sharp understanding of what made a person a subcontractor.

27. But the evidence of the 44 persons was conceded by Mr Voyka’s senior counsel to be employees described an entirely different regime in which, although they may have signed documents describing themselves as subcontractors, those employees were neither asked nor expected to act as subcontractors would act, and were asked and expected to act as employees would. They were paid as employees and engaged by Mr Ellington, who did not give any evidence of having required any of those people to actually act as subcontractors would. The employment system Mr Ellington described maintained a charade that those people were subcontractors, and the jury could conclude that presenting that thin charade was all that Mr Voyka had required Mr Ellington to do.

Grounds of Appeal

28. Mr Voyka’s counsel abandoned ground 1. Ground 2 complained that the judge erred in giving directions regarding statements said to be lies by Mr Voyka, where the prosecution had not called workers such as draftspersons, plumbers and electrical engineers; and further that the directions given were inadequate. Those grounds complained that ABC had employed many workers, up to 200 per year, and that the jury could not be satisfied that the representations Mr Voyka had made – false in respect of each of the named 44 employees – were not made about other and different persons, who may have been subcontractors. An alternative complaint was that directions the judge gave fell short of the full direction required by the High Court in the judgment in Edwards v The Queen (1993) 178 CLR 193. The respondent replied that Mr Voyka’s interview with the AFP had included the claim that “all” “these people that working for us is self-employed subcontractors”, and that was consistent with the document Exhibit 66, which on its face did not except any people engaged by Mr Voyka through ABC from the description of them, in that document, as subcontractors.

29. This Court was informed that the evidence at the trial was silent as to the status of people engaged by ABC other than the identified 44, i.e. there was no evidence before the jury as to whether one, some, most, or all of those were employees or subcontractors. There was no evidence of any basis for a belief about their status different from the evidence of the basis for any belief Mr Voyka had about the status of the 44, and no evidence of any representation made by Mr Voyka distinguishing any of those other persons from any of the 44. The jury could conclude that the evidence of representations which were false in fact if made about those 44 were made indiscriminately over time by Mr Voyka about those 44 and about all other persons engaged by ABC. The evidence disclosed no basis for believing that any of them were in fact subcontractors, and positively that the 44 were not.

30. As for the complaints about the lack of an Edwards direction, senior counsel at the trial – not senior counsel on the appeal – had submitted that no such directions should be given.²² The learned judge acceded to that submission.²³ That being so, it is very difficult now for any complaint to be advanced about the manner in which the learned judge directed the jury in accordance with the submissions then made by Mr Voyka’s counsel. In any event, the statements, about which the complaint is now made that an Edwards direction was not given, were more in the nature of comments made by the learned judge, when giving the jurors directions on the second matter the prosecution had to prove, namely that Mr Voyka knew that the named persons were employees. The judge was reminding the jurors of an argument by the prosecution, that the fact that Mr Voyka knew the workers were employees could be inferred from what the prosecution claimed were deliberately false and misleading statements Mr Voyka had made over time to various people. The judge had reminded the jurors of the argument by the prosecution that the only explanation for making such false statements was to hide the truth and that the truth would reveal that the workers were employees and that he was legally liable and obliged to deduct tax from their wages.

“If you are satisfied, having considered all the conversations that the accused is said to have had with the regulatory officers – both the taxation people, the industrial people and, for that, matter, the workers’ compensation people – if you are satisfied that he told those persons deliberate lies, it is for you to decide what significance those lies have in relation to whether he knew the workers were employees and whether he was acting dishonestly. You must not, however, just follow a process of reasoning that because a person is shown to have told a lie, that person is guilty.”²⁴

32. The learned judge was perfectly justified in so directing the jury about two elements of the offence the prosecution had to prove, namely that Mr Voyka knew the employees were employees, and further that he used dishonest means to deprive the Commonwealth of taxation. Knowledge and dishonesty were critical elements of the offence, and the judge was giving directions on those elements; the fact – if it was a fact – that Mr Voyka had made false statements about the status of his employees was a very relevant consideration in respect of both of those elements. Giving an Edwards direction would be irrelevant and nonsensical when explaining the elements of the offence to the jury and when directing their attention to the evidence on which the Crown relied to establish those elements, and which elements the defence contended had not been established. The judge reminded the jurors of the submissions by the defence on those matters.

33. A separate argument was advanced on appeal that the learned judge was not directing the jurors about the dishonest conduct of Mr Voyka, relied on by the prosecution to establish both the elements of knowledge and of dishonesty, when the judge directed the jurors about Mr Voyka’s statements to the AFP in mid-June 2000. Mr Devereaux SC submitted that false statements to the AFP differed from false statements made, during the period of the charges, to the ATO and to WorkCover. That submission conceded that the judge was entitled and obliged to remind the jurors of the arguments about the latter statements, when giving directions as to the elements of the offence. The submission that the false statements to the AFP should attract a different, Edwards, variety of direction overlooks that although the period charged for the last count ended on 19 June 2000 – the date of the interview – the representations Mr Voyka made in that interview were to the same effect as the ones he made nearly four months later in the document Exhibit 66, and over the telephone, to the WorkCover Queensland official. The jury were entitled to conclude that Mr Voyka had made the same false representations for at least five years and that the ones made in late 2000, like earlier ones, were relevant because they evidenced both knowledge and dishonesty. It was unnecessary for the judge to burden the jurors with the then unwanted Edwards direction. Those grounds of appeal should be dismissed.

Ground 3

34. Ground 3 complains that the judge erred in failing to give the jury a warning to closely scrutinise the evidence of Mr Sampson, because of the evidence that he had been threatened with a 25 year jail term by a AFP Officer, prior to his being given an undertaking that he would not be prosecuted on the contents of a statement subsequently given against Mr Voyka. The contents of that letter had been read into the record by counsel at Appeal Record page 978, but it was not before the jury.

35. The problem with the submission made now is that there was simply no relevant challenge in cross-examination to Mr Sampson’s evidence of having been specifically directed by Mr Voyka to supply all of the information contained in the documents described earlier. Only the two minor challenges to his accuracy, described earlier, were made. The jurors would have hardly failed to notice the self- serving nature of what Mr Sampson said, explaining why he wrote what he did. But the ultimate issue was whether Mr Voyka had knowingly put forward the representations Mr Sampson prepared for him, proved by the evidence to be false in respect of the 44 employees, and not suggested to be accurate about anybody else. As to that, there was only one answer, irrespective of Mr Sampson’s claims that he had given Mr Voyka only limited clerical assistance. That ground of appeal should be dismissed.

Ground 4

36. The next ground complains that a Jones v Dunkel²⁵ direction was required, but not given, in respect of the prosecution having failed to call a person Martin Benson. That person had been called by the prosecution at the committal hearing, and was available to give evidence at the trial (for either party) and had not been called by the prosecution, despite urgings from the defence that he do so.²⁶ The learned trial judge did not direct that the prosecution call the witness, nor intimate that Mr Benson should be called by the prosecution.²⁷

37. It is difficult to grasp what admissible evidence Mr Benson could have given. It was common ground at the trial that Mr Benson was accepted by the ATO as a subcontractor, and that he had engaged one of the 44 employee witnesses, a Mr Furzeman. Senior counsel for Mr Voyka had objected to the Crown leading from Mr Furzeman the instructions or statements Mr Benson had made as to Mr Furzeman’s status when engaging Mr Furzeman. Mr Furzeman’s evidence plainly showed that his status was an employee. What can be gleaned is that the defence hoped to establish by cross-examination, if the prosecution called Mr Benson, that Mr Benson himself was a subcontractor, who had told between 13 to 15 other persons whom Mr Benson engaged for the ABC that those other persons were subcontractors, and responsible for paying their own tax. To that extent his evidence would have been the same as that which Mr Ellington gave in respect of the vast majority of the 44 employees, but the bonus for the defence would be that Mr Benson was named as an employee in the ATO letter of 12 July 1995. However, the evidence at the trial was silent as to the actual status of those 13 or 15 people engaged through Mr Benson; i.e. whether they were employees or subcontractors.

38. In those circumstances it would have been somewhat perplexing for the jurors if the learned trial judge had made any comments about the failure of the prosecution to call Mr Benson, about whom the jury had heard only that he engaged Mr Furzeman at $19 per hour for a 38 hour week, with some overtime as required, and that the latter did not provide any tools for the job and was provided with a computer, some books and paper work, and provided no quotes or any invoice for payment. The jury would have been mystified as to what inference they could draw about Mr Benson not being a witness, because there is no inference which they could draw. There would be no basis for a direction that the jury might infer Mr Benson’s evidence would not have assisted the prosecution. This case was not an exception from the general rule that a trial judge should not direct a jury that the prosecution would be expected to have called persons to give evidence other than those it did call as witnesses. That ground of appeal should be dismissed.

Ground 5

39. Ground 5 complains that the trial judge erred in failing to discharge the jury after inadmissible and highly prejudicial evidence had been given of conversations with Mr Ellington. One was with a person Jason Lee, who said that when taken on as a crane driver by Mr Ellington, he had been told:

“Don’t worry, we don’t tax out. What you do is your own business. If you want to pay it, you pay it. If you don’t, you don’t.”²⁹

The learned judge directed the jury to completely disregard that evidence of Mr Lee, of what he said Mr Ellington had told him about the payment of tax.³⁰ Senior counsel for Mr Voyka then established in cross-examination, after that direction was given, that what Mr Lee had said in a statement prepared for the prosecution was that Peter Ellington had told him that:

“ABC Constructions did not take tax out, and it was up to me to look after my own tax and it was up to me to pay my own tax and to make sure that I had the money to pay any tax.”³¹

I see little actual difference between the statement the cross-examiner established that Mr Ellington had made, and Mr Lee’s version of that in evidence-in-chief. It would have been an error for the learned judge to discharge the jury in those circumstances.

40. The other bit of evidence came from a Mr Cox, whose evidence-in-chief was that Mr Ellington had told him that the pay rate was $15 or $16 per hour, and that “he also said I could pay me own tax if I wanted and laughed about it.”³² Mr Voyka’s counsel applied for a mistrial by reason of that evidence, but the learned judge instead directed the jurors to disregard the evidence and to put it completely out of their minds.³³ That direction adequately responded to the situation. Mr Voyka’s arrangements with his employees did leave it to them to pay their own tax, and Mr Ellington’s views about that as revealed to Mr Cox were relevantly indistinguishable from Mr Voyka’s own views earlier revealed to the jury in Jason Lee’s evidence of a conversation he had with Mr Voyka. That was to the effect that Jason Lee had told Mr Voyka he was concerned at the number of hours he was working, because it would mean he had to cancel his social security; to which information Mr Voyka replied:

“‘Don’t worry about it. I keep no records, I keep no paper. No one even knows you exist or work for me,’ or something like that.”³⁴

41. Mr Voyka’s own statement encouraging an irresponsible attitude in another was already before the jury, prior to the evidence from Mr Cox demonstrating that Mr Ellington did likewise. Mr Voyka was already prejudiced by the probative and admissible evidence of his own statements, and the evidence of Mr Cox gave him no grounds for a mistrial, and the trial did not miscarry because of that.

Ground 6

42. Ground 6 complains that the summing up was unbalanced, in that the learned judge summarised the prosecution case but not the defence position. That submission is inaccurate because it overlooks that what the learned judge did was direct the jurors on the element of dishonesty which the prosecution was required to prove as part of the charge, and the learned judge then summed up the case for each party. In doing so, he fully and fairly set out the submissions of defence counsel.³⁵ The judge specifically identified the matters put to the jury by defence counsel in relation to those allegations of dishonesty. That ground should be dismissed, and accordingly so too should the appeal against conviction.

Sentence application

43. When imposing sentence the learned judge described the total tax liability of the 44 employees as ultimately assessed at $380,000, although the ATO had initially calculated it was deprived of taxation of $640,000 over the five year period of the counts. The difference between the two sums resulted from the fact that no taxation declaration numbers were provided by the employees, and in those circumstances tax had to be deducted at the rate of 48.5 per cent. It was subsequently reassessed on the basis of the employee’s actual tax rate. The majority of the outstanding tax had been recovered from the employees, at cost and inconvenience to the ATO.

44. When complaining of the three and a half year head sentence, with a 21 month minimum period in custody, the applicant’s senior counsel principally relied on Caratti v R [2000] WASCA 279.³⁶ In that matter there was a higher degree of criminality, in that the amount of group tax avoided by that offender was in the vicinity of $570,000; that offender’s sentence was ultimately reduced on appeal after a trial to three years imprisonment with a non-parole period of 18 months. But the applicant’s written submissions relying on that result overlook that $430,000 of the amount defrauded had been repaid, prior to sentencing, apparently by that applicant, whose role in the conspiracy to defraud had been subordinate to his father’s role. Those matters mean that the decision in Caratti does not show this sentence is excessive.

45. In a matter of R v Brown [2001] QCA 53,³⁷ this Court upheld a sentence of three years imprisonment with release after serving six months, imposed on an applicant who pleaded guilty to two offences of defrauding the Commonwealth. That applicant, over a period of about six years, had deducted group tax from the salaries of employees in an amount totalling $107,000 but had not remitted it to the Commonwealth. Mitigating factors included that all but $15,000 had been repaid, with repayments commencing during the initial investigation, and that applicant had made full admission to the AFP and thereafter co-operated in the investigation. She had pleaded guilty at the earliest opportunity, was 54 years old with no prior convictions, and had some psychiatric problems. The sentence upheld on that appeal after a plea demonstrates that this sentence after a trial was not manifestly excessive.

46. The proposition was also advanced that the learned judge had perhaps sentenced on an incorrect basis, in finding that in most cases the employees were paid more than the net rate but less than the gross rate that they could have earned working elsewhere, and that this had benefited Mr Voyka in an amount of several hundred thousand dollars. Counsel for the applicant provided the Court a schedule listing such comparisons as the witnesses had made, of what ABC paid compared to other employers. That showed that some witnesses calculated that their in-hand pay at ABC was about the same as their gross pay elsewhere, and some thought it was a little less. What is undeniable is that Mr Voyka was not paying Workers’ Compensation premiums or making superannuation contributions for his employees, did not incur the cost of holiday leave and sick pay, and was spared the administrative costs associated with those obligations and with making deductions of taxation from wages. That undoubtedly gave him a considerable advantage over competitors who did comply with workplace laws. The application for leave to appeal against sentence should be dismissed.

[48] KEANE JA: I agree with the reasons of Jerrard JA and with the orders proposed by his Honour.

[49] JONES J: I have read the reasons for judgment of Jerrard JA. I agree with them and the orders proposed.

Footnotes

1. This direction appeared at AR 939-940. ↩

2. At AR 89. ↩

3. At AR 810. ↩

4. A copy appears at AR 1329. ↩

5. At AR 812. ↩

6. At AR 813. ↩

7. At transcript page 985, supplied with the outline of submission of the respondent, and not in the appeal record. ↩

8. Reproduced at AR 1011. ↩

9. This evidence all appears at AR 849. ↩

10. See AR 852. ↩

11. At AR 853. ↩

12. This evidence appears at AR 854. ↩

13. The letter was made Exhibit 95, reproduced at AR 1346; Mr Sampson’s evidence on this is at AR 855-856. ↩

14. Reproduced at AR 1347. ↩