A copy of Mr Richardson's memorandum of 21 March 2000 was attached to this memorandum.
51 The memorandum, which was sent to Mr Williams at the instigation of the prisoner and in the drafting of which he had participated, was clearly intended by the prisoner to deceive Mr Williams into believing that the Vision Publishing sponsorship claim of $1.2m was still outstanding.
52 After receiving the facsimile transmission, Mr Williams wrote a letter to Mr Howard. In the letter Mr Williams gave Mr Howard a short history of the Vision Publishing sponsorship matter, as Mr Williams knew it. It is obvious from the terms of the letter that Mr Williams was quite unaware that the Vision Publishing sponsorship claim had already been satisfied. In his letter Mr Williams advised Mr Howard "clearly we cannot pay over a sponsorship fee, without the full details of what is now proposed and, most importantly, when the event will be staged".
53 On 5 January 2001 the prisoner and Mr Howard purported to settle the Vision Publishing sponsorship claim for $750,000. Both the prisoner and Mr Howard knew that the claim had already been settled but they engaged in the charade of purporting to settle the claim for part of the amount claimed by the prisoner. Some attempt was made to make it appear that the claim was a genuine claim, separate from the claim by Vision Publishing which had already been settled, by describing the claim as being a claim by the Goodwill Group Pty Limited.
54 On 8 January 2001 a facsimile transmission was sent on behalf of the prisoner on the letterhead of the Goodwill Group Pty Limited. I am satisfied that this facsimile transmission, like all other facsimile transmissions or letters from the prisoner's office, whether or not they were signed by the prisoner, was sent with the prisoner's authority.
55 Enclosed with this facsimile transmission was an invoice dated 27 December 2000 for "the full amount of the sponsorship package and consultancy fees for the years 2000 and 2001". The amount of the invoice was $825,000, which was made up of $750,000 plus GST at 10 percent. The invoice stated that $450,000 was immediately payable and that the balance of $375,000 was payable within four months.
56 In the facsimile transmission with which the invoice was enclosed it was stated "since this amount is extremely overdue, could you please make the necessary arrangements to transfer the funds directly into our bank account".
57 This statement that the amount of the invoice was extremely overdue was false, in that the amount of the invoice was not overdue or due at all. This false statement was the subject of the ninth count in the indictment.
58 Mr. Howard arranged for the amount of $412,500, being half of $825,000, to be promptly paid by HIH C&G to the Goodwill Group Pty Limited.
59 In a memorandum of 12 January 2001 to the prisoner Mr Howard said that HIH might make the final payment earlier than in four months, if the prisoner was prepared to accept a discounted amount.
60 On 15 January 2001 the prisoner sent a memorandum to Mr Howard. The memorandum began "I have received your letter confirming the amount of $375,000 owing by HIH to me". This statement was false, in that no money at all was owing. This false statement was the subject of the tenth count in the indictment.
61 The prisoner agreed that the final payment to be made could be discounted, provided that it was paid immediately. Mr. Howard arranged for a discounted final payment of $325,000 to be made by HIH C&G to the Goodwill Group Pty Limited.
Counts 11 and 12
62 For some years up to September 1998 a mutual association Credit Reference Australia provided to its members information about the credit standing or credit worthiness of persons with whom members proposed to do business.
63 In about September 1998 Credit Reference Australia demutualised , that is, converted itself into a company limited by shares, which was called Data Advantage Limited.
64 Shares in Data Advantage Limited were allocated to persons or companies who had been members of Credit Reference Australia. There was a basic allocation of 500 shares in Data Advantage Limited to every person or company who had been a member of Credit Reference Australia. Further shares were allocated to persons or companies who had been members of Credit Reference Australia, on the basis of one share for every dollar a member had been invoiced by Credit Reference Australia over the three years between 1 October 1994 and 30 September 1997.
65 A total number of 290,363 shares in Data Advantage Limited were allocated to FAI Insurances. 217,009 of those shares were referable to amounts for which FAI Finance Corporation had been invoiced by Credit Reference Australia between 1 October 1994 and 30 September 1997.
66 The prisoner claimed that some of the shares in Data Advantage Limited which had been allocated to FAI Insurances should have been received by FAI Home Security, on the grounds that between 1 October 1994 and 30 September 1997 shares in FAI Finance Corporation had been held by FAI Home Security.
67 In early January 2001 the prisoner asked Mr Howard why his Data Advantage claim had not yet been settled.
68 On 7 January 2001 the prisoner was staying at Hayman Island. He was not on holidays; he was working.
69 On or about 15 January 2001 Mr Howard was flown up to Hayman Island at the prisoner's expense. At Hayman Island the prisoner demanded to know why his Data Advantage claim had not been settled. Mr Howard said that he would need to see documentation in order to assess the claim. The prisoner said that he was having the whole file on the Data Advantage claim forwarded up to him from Sydney and, in particular, he was trying to find a letter from Mr Rodney Adler, which he said confirmed the entitlement of FAI Home Security to a large proportion of the shares in Data Advantage Limited which had been allocated to FAI Insurances. Mr Howard returned to Sydney.
70 The prisoner sent a facsimile transmission to Mr Howard dated 15 January 2001, which had many attachments. In the facsimile transmission the prisoner claimed that 85 per cent of the shares allocated to FAI Insurances were the property of HSI, "because we owned the company (FAI Finance Corporation) for 85 per cent of the period that the benefit was gained". In this facsimile transmission the prisoner was not seeking to draw any distinction between HSI and FAI Home Security. In the facsimile transmission the prisoner claimed that he had spoken to Mr Adler and that Mr Adler was in total agreement with the prisoner.
71 After Mr Howard returned from his holiday at Noosa the prisoner told him in a telephone conversation that the prisoner had "retrieved from archives the letter from Rodney Adler confirming that the Data Advantage shares should have been transferred to FAI Home Security".
72 On 30 January 2001 the prisoner sent a facsimile transmission to Mr Howard. The facsimile transmission commenced:-
"The attached letter retrieved from archives… completes your file… the file and all correspondence clearly confirms HIH have an asset in Data Advantage shares of which 80 per cent belongs to HSI".
73 The attached letter said to have been retrieved from archives was a letter bearing a date 2 August 1999, signed by Mr Rodney Adler. The letter was in the following terms:-
"Further to our telephone conversation to-day, I have, as requested, reviewed the entire file in regard to FFC (FAI Finance Corporation) and the Data Advantage issue. It is as I thought, without question, an oversight on our part.
Understanding that this is a material issue to HSI, I am pleased to once again re-confirm that FAI Insurance should have reallocated a large percentage of the value of the Data Advantage shares that were issued to FAI (Insurances), not redistributed back to FFC and per the activity report from Data Advantage which clearly confirms that these shares were the property of FFC and based on pro rata activity HSI should have immediately received the value of this asset. This is an internal error but obviously self-explanatory when one looks at the file.
Please feel free to include the above in your audit or end of year profit calculations. This should resolve the issue for once and for all as it previously, and still does, have my full approval".
74 It is convenient to refer to this letter as "the Adler letter".
75 At the trial the Crown proved that the only reasonable conclusions to be drawn from a number of circumstances were that the Adler letter, so far from being a genuine letter brought into existence on or about 2 August 1999 and retrieved from archives, had been created at the instance of the prisoner in January 2001; that on 24 January 2001, on the instructions of the prisoner, the letter had been faxed by a personal assistant of the prisoner to Mr Adler for signature by Mr Adler; that the letter had been signed by Mr Adler and returned on 29 January 2001; that the signed letter had been copied, with care being taken to mask a fax imprint so as not to disclose that the letter had only just been received from Mr Adler; and that the copy of the letter had then been forwarded to Mr Howard with the facsimile transmission of 30 January 2001.
76 The statement in the facsimile transmission of 30 January 2001 to Mr Howard that the attached letter had been retrieved from archives was false and is the subject of the eleventh count in the indictment.
77 The prisoner sought legal advice in relation to the Data Advantage claim from Mr Simon Rofe, solicitor, of Browne and Co Solicitors. Instructions were given to Mr Rofe on 7 February 2001 and a written advice was received from Mr Rofe the same day. Unsurprisingly, in view of the instructions Mr Rofe was given about the facts, Mr Rofe's advice was favourable to the prisoner. On 7 February 2001 a copy of Mr Rofe's advice was sent by the prisoner to Mr Howard.
78 In his written advice of 7 February 2001 Mr Rofe said inter alia:-
"On 2 August 1999 agreement was reached between yourself and Rodney Adler (representing FAI Insurances) that 80 per cent of the gross value of these shares would be paid by FAI Insurance to FHS (FAI Home Security) to rectify this situation and in recognition that FHS ought to have received its pro rata share of the value of the Data Advantage shares when initially allocated".
79 The statement that on 2 August 1999 agreement had been reached between the prisoner and Rodney Adler was false, because no such agreement had been reached.
80 This statement was, of course, contained in an advice by Mr Rofe and not in a letter or facsimile transmission from the prisoner. However, by sending a copy of Mr Rofe's advice to Mr Howard, the prisoner published to HIH and HIH C&G the statement in the advice.
81 Mr Rofe, obviously, did not have any independent knowledge of whether such an agreement had been made between the prisoner and Mr Adler. In stating in his advice that such an agreement had been made Mr Rofe was simply repeating instructions he had received, directly or indirectly, from the prisoner.
82 This false statement in Mr Rofe's advice, which was published by the prisoner to HIH C&G, is the subject of the twelfth count in the indictment.
83 Just before Mr Howard left on an overseas business trip to the United States on 14 February 2001 the prisoner and Mr Howard had a conversation in which it was agreed that the Data Advantage claim would be settled for $1m. When Mr Howard arrived at his hotel in San Francisco, there was a fax from the prisoner waiting for him, demanding payment of the $1m by the end of the week. Mr Howard gave instructions to a member of the HIH staff in Sydney to arrange payment of $1m and the payment was made.