Appeal - Conviction for obtaining financial advantage by deception - Criminal Code (Cth) s 134.2(1) - Whether magistrate's finding that element of 'recklessness' was proved beyond reasonable doubt amounted to miscarriage of justice in light of appellant's conduct

Criminal Appeals Act 2004 (WA), s 30(3)(a)

1 LE MIERE J: The appellant was convicted, after a trial before a magistrate, that he, on or about 11 July 2002, by deception, dishonestly obtained a financial advantage from another person, the Australian Taxation Office, a Commonwealth entity, contrary to s 134.2(1) of the Criminal Code (Cth). The appellant seeks leave to appeal against his conviction. This court ordered that the application for leave to appeal be heard at the same time as the appeal. The respondent does not contest the applicant's application for leave to appeal.

2 On 11 July 2002 the appellant signed an electronic lodgement declaration for his 2001 income tax return in which he declared that the information in the return was true and correct. It was not. The return failed to disclose income totalling $47,205.08.

3 The appellant is a barrister. The undeclared income was comprised of six cheques paid by a client, Mr ConwayCook, in partial satisfaction of the appellant's fees for acting for Mr ConwayCook in civil litigation in this court. Five of the cheques were, at the request of the appellant, made payable to third party creditors of the appellant. The sixth cheque, which was for $5,000, was made payable to the appellant personally. It was deposited into a bank account held exclusively in the name of the appellant's wife. Accordingly, none of the funds paid by these six cheques were ever deposited into the appellant's bank accounts.

4 To facilitate the preparation of the appellant's income tax return for each year, his wife prepared spreadsheets of his income and expenses. She derived the income from the appellant's bank statements. None of the six cheques appeared in the spreadsheet. The appellant delivered, or caused to be delivered, to his accountant the spreadsheets and a volume of accompanying bank records, invoices, accounts and other documents, including the invoices to which the fees of $47,205.08 related. The accountant prepared the 2001 return but did not include the income of $47,205.08. The appellant checked the returns and then signed the declarations.

5 The six cheques were as follows. The first was for $7,253.80 payable to the Australian Taxation Office and credited against the appellant's tax liability. The second was for $2,940.38 payable to National Australia Bank visa. The third was for $1,910.90 payable to ANZ visa. The fourth was for $2,800.00 payable to the Commonwealth bank and was deposited into the Commonwealth Bank visa account in the name of the appellant's wife. The fifth was for $27,300 payable to Melville Toyota which was used to purchase a car in the name of the appellant's wife. The sixth cheque was for $5,000 payable to the appellant and was deposited into his wife's Commonwealth bank account.

6 The appellant was also charged with a similar offence in relation to a cheque for $4,811.88 paid by a client, Miss Huupponnen during the 2000 financial year. The appellant was acquitted of the charge in relation to that undeclared income.

134.2 Obtaining a financial advantage by deception

(a) the person, by a deception, dishonestly obtains a financial advantage from another person; and

(2) Absolute liability applies to the paragraph (1)(b) element of the offence.

8 In her opening submissions counsel for the prosecution outlined the elements of the offence charged. The first is that the appellant induced a person to believe that a thing is true. In this case the appellant signed the declaration and intended to sign it. The element is satisfied.

9 The second element is that the thing is false. The physical element is not in dispute. The return and the declaration were false. What is in dispute is the fault element. The fault element is either intention or recklessness. Section 133.1 defines deception to mean an intentional or reckless deception. The prosecution case was that the deception was intentional or alternatively reckless.

10 The third element of the offence is that, as a result, the appellant obtained a financial advantage from another person. That element is satisfied and is not in dispute. The fourth element is that the other person is a Commonwealth entity. Again, that element is satisfied and is not in dispute.

11 In opening before the magistrate, counsel for the prosecutor said that the real issue in dispute goes to the second element, that is, whether the deception involved in the false declaration was intentional or reckless.

12 The magistrate's reasons for decision are as follows. Mr ConwayCook, who, like the magistrate, I will refer to as Mr Conway, gave evidence of conversations with the appellant. The conversations were a significant part of the prosecution case. Mr Conway alleged that the appellant had requested payment of his fees by cheques to third parties and had said to Mr Conway that it was to minimise his income so that he did not have to pay child support. Mr Conway also alleged that the appellant had proposed that Mr Conway deposit fees in a bank in the United Kingdom. Mr Conway had ill will towards the appellant arising from disputes about the amount and payment of the appellant's fees. There are significant doubts about the veracity of Mr Conway's evidence. No reliance is placed on his evidence.

13 Approximately two weeks before the appellant signed the declaration on 11 July 2002 the appellant was aware that Mr Conway had threatened to urge the ATO to investigate him. Furthermore, a letter from Mr Conway to the appellant of 29 May 2001 was reasonably perceived by the appellant as a threat to inform the ATO that the appellant was seeking to avoid tax.

14 The prosecution alleged, but it was not established, that the appellant was in financial difficulty at the relevant times. It was not established that the child support issues between the appellant and his former wife were of such a nature that it could be said that the appellant had a motive for deceiving the ATO. It was not established that a barrister seeking payment of his fees in the form of a cheque in the name of a third party was at the time highly unusual.

15 The next plank of the prosecution case concerned the preparation and provision of information to the appellant's accountant. There are six parts to that aspect of the prosecution case. First, the appellant's wife prepared the spreadsheets of income and expenses that were to be provided to the appellant's accountant. She worked from bank statements and credit card accounts. The system was that the appellant would check the spreadsheets before they were delivered to his accountants. The appellant's practice in relation to expenses was to check what should not have been included but in relation to income he failed to check what should have been there.

16 Secondly, the income tax return was prepared by the appellant's accountant, Mr Eckerman. The appellant sent to the accountant the spreadsheets together with source documents which included the invoices to which the fees of $47,205.08 related.

17 Thirdly, the appellant was advised by Mr Eckerman against putting money into odd accounts. Mr Eckerman said '[t]here was always advice given to [the appellant] whether it was verbal or not, you know, operate your business account, all business, you know, all income banked make it simple for everyone concerned'.

18 Fourthly, there were a number of prompts that would have alerted the appellant to the payments that were not declared. Mr Conway was a significant client and would have been in the appellant's mind, not least because of the pursuit of his fees. The spreadsheet recorded an amount of fees received that was well short of the amount actually received. The payments made on the credit cards would have made a positive impact on credit card balances. The cheque for $27,300 had gone to the purchase of a new car. Those prompts or reminders form part of the circumstantial case against the appellant.

19 Fifthly, the taxation system is one of selfassessment. None of the cheques to which the undeclared income related were disclosed in the spreadsheet. All of the cheques were raised as third party cheques except the one in favour of the appellant that was banked into his wife's bank account.

20 Sixthly, the appellant said that he sought payment by way of third party cheques because it was more convenient than asking for a cheque in the whole amount to be made payable to him. However, the recourse to that method of payment could not have been for convenience.

21 The three following matters advanced by the defence were made out. First, at the time the appellant signed the declaration he was aware that Mr Conway had threatened to urge the ATO to investigate him. That suggests that the appellant would not have signed the declaration had that act been in effect the culmination of a scheme to deceive the ATO.

22 Secondly, the appellant conducted his business in an open and transparent manner, leaving a trail of correspondence, invoices and handwritten notations on the invoices that disclosed the fees he had received.

23 Thirdly, the appellant expected the accountants to do their job and find the source of things that have led to the charge against him. It was the appellant's belief that the accountants reconciled the spreadsheet with the source documents provided to them which included the invoices with handwritten notations of payments received.

24 The prosecution cannot exclude a reasonable inference that it was not the appellant's actual intention to deceive the ATO when he signed the declaration.

25 The appellant may be guilty if he was reckless notwithstanding that he had no actual intention to deceive the ATO. The following matters were established beyond reasonable doubt. First, the appellant did not keep a cashbook or journal at the relevant time. Secondly, the records kept were not contemporaneous, that is the actual accounts were not recorded in appropriate journals or a spreadsheet as they were received but only when preparing a file for the accountant. Thirdly, the spreadsheet was prepared from the bank statement. Fourthly, the appellant knew that some income was not going into his bank account and therefore the bank statement that his wife worked from when preparing the spreadsheet. However, the appellant kept no sufficient record of the payments by way of third party cheques. Fifthly, when the appellant checked the spreadsheets, he was looking for what should not have been there when he should have been looking for what should have been there such as the undeclared income. Sixthly, the appellant had no right to abdicate to his accountants his obligation that was inherent in the declarations that he signed. Seventhly, the appellant's expectation of his accountants cannot amount to a reasonable expectation that they would check amongst the source documents for receipt of fees not disclosed by the spreadsheet.

26 The prosecution has established beyond reasonable doubt that the appellant was reckless. That is so for the following reasons. The appellant was aware when he signed the declaration of the risk resulting from introducing payment by way of cheques to third parties into an accounting system that he would have known was quite rudimentary at best. The appellant knew the substantial risk of this course and took it. The appellant knew of that risk, of the advice of his accountant, his obligations as a tax payer and the limits of the reasonable expectations he was entitled to have in regard to his accountants identifying particular transactions. Taking the risk was unjustifiable.

27 There is only one ground of appeal that the magistrate's finding that the element of 'recklessness' was proved beyond reasonable doubt in light of the appellant's conduct amounted to a miscarriage of justice where the evidence did not support such a finding. The ground of appeal is supported by the following particulars.

(A) (1) There was no evidence from the witness Mr Eckerman as to when any advice had been given to the Appellant 'not to put money into odd accounts or he would lose it', in particular, whether any advice had been given on or before 11 July 2002 when the inaccurate tax declaration was executed by the Appellant.

(2) There was no basis for the finding that the actions of the Appellant in depositing money into different accounts in March/April 2001 represented a 'significant departure from that advice'.

(3) There was no attempt to contradict, through crossexamination, the evidence of the Appellant that no such advice had been given until 2003 after the ATO audit had commenced.

(B) (1) The finding that the 'Appellant's expectation of his accountants' (namely of crosschecking the spreadsheet against the copy tax invoices for accuracy) was not reasonable, or, amounted to an abdication of the Appellant's responsibilities, in light of the evidence of Mr Eckerman, namely 'What would I have been checking?' and 'How did I know and how would I source that all of the tax invoices were in the arch lever file to tick them off against the income that was in the spreadsheet?' was unsupported by the evidence.

(2) There was no basis for rejecting the Appellant's belief that, if his accountant had conducted a simple checking of the payment information recorded on the duplicate tax invoices for his practice income against the spreadsheet, as he believed they had done, this would have revealed some or all of the deficiencies in the income statement portion of the spreadsheet, and, at very least allowed further inquiry to be made as to the accuracy of the return before the tax declaration was signed, where:

(a) the learned Magistrate was not satisfied that the Appellant had failed to provide to the accountants, as per their request of him, all the relevant copy tax invoices for his practice income, notated with relevant payment information on them for that tax year, in addition to all other tax invoices and statements, bank and credit card statements and all source documents;

(b) evidence was led through Mr Eckerman that he had not told the Appellant that there had been no checking of the copy tax invoices against the spreadsheet until after the ATO audit had commenced in 2003;

(c) the witness Mr Eckerman gave evidence that when asked by the Appellant to complete the crosschecking process in 2003 he was able to complete this from records of the same nature as were available to him in 2002 without any difficulty, and, there was no attempt to contradict, through crossexamination, the evidence of the Appellant that this crosschecking had revealed deficiencies in the spreadsheet which were then able to be returned as income; and

(d) there was no attempt to contradict, through crossexamination, the evidence of the Appellant that he did not know the tax declaration was inaccurate when he signed the declaration.

(C) The finding that there 'were reminders readily available' to the Appellant (that there may be amounts 'missing' from the spreadsheet) including the 'references in the spreadsheet to amounts actually received from Mr Conway during the same tax year' was non sequitur as it was as equally probable that these did not remind the Appellant of anything, or, reminded the Appellant that amounts paid by Mr Conway had been recorded.

(D) The finding that 'in the ordinary course of business' the Appellant 'would have been aware that his accounting system would not initially track those amounts through to the spreadsheets' was a finding unsupported by any evidence, where, there was no attempt to contradict, through crossexamination, the evidence of the Appellant that he had only realised in 2003 (after the ATO audit process had commenced) how the recording of the payments into the spreadsheet had come to have been missed, and, that he did not know the tax declaration was inaccurate when he signed it.

28 The appellant's written submissions refer to the Criminal Appeals Act 2004 (WA) s 30(3)(a). However, this appeal is made under the Criminal Appeals Act pt 2, not pt 3 in which s 30 appears. Unlike s 30, s 8, which appears in pt 2 and provides the grounds for appealing against the decision of a magistrate to a single judge, does not include the ground that the Court of Appeal must allow the appeal if in its opinion the verdict of guilty on which the conviction is based should be set aside because, having regard to their evidence, it is unreasonable or cannot be supported. Section 8(1) provides that an appeal may be made on one or more of the following grounds :

(i) made an error of law or fact, or of both law and fact;

(b) that there has been a miscarriage of justice.

29 I understand the submissions of Mr Grace QC for the appellant to be that the magistrate made errors of fact and that there was a miscarriage of justice because the verdict was unreasonable or could not have been supported by the evidence. A miscarriage of justice will occur where a guilty verdict was unreasonable or could not have been supported by the evidence: Thakrar v Hull [2013] WASC 447 [19] (Corboy J); Hunt v Callaghan [2011] WASC 10 [150] (Jenkins J).

30 In deciding whether a miscarriage of justice has occurred because the guilty verdict was unreasonable or could not have been supported by the evidence, the court must decide the question by making its own independent assessment of the sufficiency and quality of the evidence, having regard to the fact that the magistrate is entrusted with the primary responsibility of determining guilt or innocence and has had the benefit of having seen and heard the witnesses: Ska v The Queen [2011] HCA 13; (2011) 243 CLR 400 [11] [14] (French CJ, Gummow & Keifel JJ); Weiss v The Queen [2005] HCA 81; (2005) 224 CLR 300 [39] [41] (Gleeson CJ, Gummow, Kirby, Hayne, Callinan & Heydon JJ); MFA v The Queen [2002] HCA 53; (2002) 213 CLR 606 [58] (McHugh, Gummow & Kirby JJ); M v The Queen (1994) 181 CLR 487, 493 (Mason CJ, Deane, Dawson and Toohey JJ).

31 In The State of Western Australia v Rayney [2013] WASCA 219 [374] Weinberg, Whealy & Buddin AJJA at [374] referred with approval to the part of the judgment of Buss JA in Ascic v Bedworth [2013] WASCA 174 where his Honour discussed the role of an appellate court dealing with an appeal from a verdict in a trial before a magistrate. His Honour said:

Where there has been a trial before a judge alone or a magistrate, the reasoning of the court which is based on a credibility determination must be distinguished from the reasoning of the court which is based on inferences drawn from facts that were undisputed or found by the court.

Normally, the court's credibility-based conclusions will not be reversed on appeal unless it is demonstrated that such conclusions are flawed by reference to incontrovertible facts or uncontested testimony. However, as Kirby J observed in CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458:

'Even in the case of expressed credibility findings, the statutory duty to conduct a real 'rehearing' remains. It may sometimes justify reversal of a decision by a primary judge who has 'failed to use or has palpably misused his advantage' or where 'incontrovertible facts or uncontested testimony' demonstrates the findings to be erroneous; or where they are 'glaringly improbable' and 'contrary to compelling inferences' [21] (footnotes omitted).

Although an appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance' (Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549, 561 (Isaacs J)), it must necessarily observe the 'natural limitations' that exist where the appellate court proceeds wholly or substantially on the record. See Dearman (561); Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [23] (Gleeson CJ, Gummow & Kirby JJ). In Dearman, Isaacs J said:

'The mere words used by the witnesses when they appear in cold type may have a very different meaning and effect from that which they have when spoken in the witness box. A look, a gesture, a tone or emphasis, a hesitation or an undue or unusual alacrity in giving evidence, will often lead a Judge to find a signification in words actually used by a witness that cannot be attributed to them as they appear in the mere reproduction in type. And therefore some of the material, and it may be, according to the nature of the particular case, some of the most important material, unrecorded material but yet most valuable in helping the judge very materially in coming to his decision, is utterly beyond the reach of the Court of Appeal (561).'

In Fox v Percy, Gleeson CJ, Gummow & Kirby JJ said in relation to the 'natural limitations' of an appellate court proceeding wholly or substantially on the record:

'These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole [23] (footnotes omitted)' [64] [67].

32 There is only one ground of appeal but the particulars to that ground advance four reasons why the evidence does not support a finding of guilty. I will consider each of those reasons.

A. Mr Eckerman's advice against money in odd bank accounts

33 In considering the prosecution case the magistrate considered aspects of the preparation and provision by the appellant of information to his accountant. The magistrate found that Mr Eckerman had advised the appellant 'against putting money into odd accounts'. When the magistrate expressly considered the issue of recklessness he said that he was satisfied the prosecution had proved seven matters beyond reasonable doubt. The magistrate said the seventh matter was:

[T]he course [the appellant] took in seeking cheques payable to third parties was contrary to advice that he received from Mr Eckerman about accounts, opening various accounts.

34 The magistrate expressly stated that one of his reasons for finding that the deception involved in the appellant's false declaration was reckless was 'the advice of his accountant'.

35 The magistrate's finding was based on the following evidence of Mr Eckerman:

Do you accept that it was in April 2003 that you discovered that the ATO was auditing Mr Stephenson?I thought it was sooner but if that's my statement, I can only stand by it.

Okay, but in any event, given what the subject matter that I'm asking you questions about 1999 to 2000, 2000 to 2001, and that the tax returns were prepared in 2002, it must have been after that, that he was being audited?Yes. I believe that the 2001 sorry, I had knowledge of the impending audit prior to the 2001 tax return being completed.

Right, okay. Did you what I'm suggesting to you is what happened is that you discovered that there appeared to be a misunderstanding as to what Mr Stephenson thought you were doing and what was actually happening in terms of the preparation of the reports - of his tax returns - not reports?I don't think there was ever a misunderstanding. There was always advice given to Timothy whether it was verbal or not, you know, operate your business account, all business, you know, all income banked.

Right?Make it simple for everyone concerned.

36 The appellant's evidence was that in 2003 or thereabouts, after the tax office audit had commenced, Mr Eckerman said 'don't put money into odd accounts because you won't be able to find it' and he never did it after Mr Eckerman had given him that advice. Counsel for the respondent, Ms Fogliani, submitted that Mr Eckerman made the statement that advice had been given to the appellant to 'operate your business account ..., all income banked' in the context of it having been put to him that he discovered that the appellant was being audited in April 2003 but that Mr Eckerman rejected that proposition and stated that he was aware of the impending audit prior to the 2001 tax return being completed. Accordingly, it was submitted that the magistrate was entitled to find that Mr Eckerman's words '[t]here was always advice' refer to there having been advice given to the appellant to that effect prior to the appellant signing the declaration that gave rise to his conviction.

37 The magistrate's finding that Mr Eckerman's advice, which the appellant paraphrased as not to put money into odd bank accounts, was given before the appellant signed the declaration was open on the evidence. The magistrate made no error of fact or law in making that finding.

B. Appellant's expectation of his accountants to check spreadsheets

38 The magistrate found that one of the matters that supported the prosecution case of recklessness and which he found to be proved beyond reasonable doubt was that the appellant's expectation that his accountants would crosscheck the spreadsheet against the tax invoices 'cannot amount to a reasonable expectation of their obligations to him'. The magistrate said that that finding was based on the following evidence of Mr Eckerman:

I want to put a proposition to you. Because Mr Stephenson had provided a spreadsheet that was termed income, you didn't check any of the primary documents he provided to see whether all income in fact was included on the document?For 2000, I cannot be sure whether and, you know the practice may have changed after that but again, I'll ask the question, what would I have been checking? How did I know and how would I ever source that all the tax invoices were in the Lever Arch file to tick off against the income that was in the spreadsheet?

Well, because what I'm suggesting to you is that there were a bundle of invoices, certainly in the 2000 to 2001 which showed his workings that he had received payments on those invoices that were not included in his spreadsheet?Well, I

Can you dispute that?No, I can't dispute that.

39 The magistrate thereby fell into error. The appellant's expectation was not that the accountant would check to see that all of the tax invoices were amongst the source documents provided to the accountant. The appellant's expectation was that the accountant would check to ensure that all of the payments received noted on the tax invoices in the source documents provided to the accountant were entered in the spreadsheet. The accountant could have done that.

40 The respondent submitted that Mr Eckerman made a distinction between preparing a business schedule for a tax return on the one hand and a balance sheet and profit and loss on the other and that his evidence is to the effect that his practice was to require primary documents for the latter. That is not an answer to the point made by the appellant in this appeal. Whatever Mr Eckerman's practice was in relation to requiring primary documents, the fact is that the appellant provided the primary documents to him. Mr Eckerman did not tell the appellant that he was not having regard to those primary sources or that he had not checked the spreadsheet against the payment received noted on the tax invoices. The appellant's evidence is that he expected and relied upon the accountant to make that crosscheck. The magistrate did not reject that evidence. The magistrate appears to have accepted that evidence but found that the appellant was not justified in expecting and relying on Mr Eckerman to make that crosscheck because of the matters stated by Mr Eckerman in his rhetorical questions set out in the evidence above. As I have said, the magistrate erred in doing so.

41 'The limits of the reasonable expectations [the appellant] was entitled to have in regard to the identifying of these particular transactions by the accountants' was a matter expressly taken into account by the magistrate in finding that the appellant had signed the false declaration recklessly. The magistrate thereby erred.

42 One part of the prosecution case was that the prompts that would have alerted the appellant that he had received payment by cheques to third parties not recorded on the spreadsheets. The prosecution said that Mr Conway was a significant client and would be in the forefront of the appellant's mind. The spreadsheet recorded an amount for fees received that was well short of the amount actually received and that would have been obvious. The positive impact on credit card balances would have been a daily reminder and there was the daily reminder that the fees had gone to the purchase of a brand new car for the appellant's wife. The appellant's evidence was that those matters did not prompt him to check that the spreadsheet gave a true account of his income. The magistrate found that 'those prompts or reminders as they were characterised existed and form part of the circumstantial case against [the appellant]'. Later in his reasons the magistrate said '[t]here were reminders readily available to [the appellant] particularly the references in the spreadsheets to amounts actually received from Mr Conway during the same tax year and the new car purchased for his wife'. The magistrate found that the appellant was 'aware of the risk that existed in relation to introducing a number of cheques all but one of which was payable to a third party into an accounting system that he would have known was quite rudimentary at best'. The magistrate then stated his conclusion:

I have listed the other matters that I find define the awareness that he had of the situation and once more he find he pressed on. I find beyond reasonable doubt that he knew the substantial risk of this course and took it.

43 A fair reading of the magistrate's reasons is that 'the other matters [I have listed] that I find define the awareness that he had of the situation' include the prompts and reminders which the magistrate had referred to earlier in his reasons.

44 I find that the magistrate erred in finding that amongst other things the 'prompts' and 'reminders' referred to established that the appellant was aware of the risk that the spreadsheets did not include all of the income he had received.

Section 5.4(1) of the Criminal Code (Cth) provides that a person is reckless with respect to a circumstance if:

(a) he or she is aware of a substantial risk that the circumstance exists or will exist; and

(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

The magistrate found that there were reminders available to the appellant that there may be amounts missing from the spreadsheet. However, the appellant submits that those facts were 'intractably neutral'. I accept that argument. The facts that constituted the 'prompts' or 'reminders' were not of themselves matters that gave rise to a risk that income received might not be included in the spreadsheets. The appellant's evidence, which the magistrate appears to have accepted, is that those matters did not prompt him when he signed the declaration, to check that the spreadsheet gave a true account of his income.

It would have been clear to [the appellant] ... that in the ordinary course of events he would have been aware that his accounting system would not initially track those amounts to the spreadsheet that he was in the practice of supplying to his accountants.

The magistrate reached that conclusion based on his earlier findings, as follows:

(a) For each financial year, the appellant provided his accountants with a spreadsheet in relation to income and another for expenses.

(b) The appellant's wife prepared the expenses spreadsheet working from bank statements and credit card accounts.

(c) The appellant would check through the expense spreadsheet.

(d) In relation to the income spreadsheet the appellant's wife input data from deposit books and bank statements.

(e) It was not the appellant's wife's role to consult any primary document other than the bank deposit book and bank statements when inputting income.

46 Each of those findings was supported by evidence. The magistrate's finding that the appellant would have been aware that his accounting system would not initially track the checks to third parties through to the spreadsheet was open to him.

47 The magistrate found that the appellant was aware of the risk that the income tax return did not declare the income in respect of the six cheques in favour of third parties and it was unjustifiable to take the risk because of 'his system, the advice of his accountant, his obligations as a tax payer and the limits of the reasonable expectations he was entitled to have in regard to the identifying of these particular transactions by the accountants'. I find that 'the reasonable expectations [the appellant] was entitled to have in regard to the identifying of those particular transactions by the accountants' is insufficient to support the magistrate's finding.

48 The magistrate found that the source documents delivered by the appellant to his accountant included the tax invoices on which the appellant had noted payments received relating to the six payments. The appellant gave evidence that he expected his accountant to check the income spreadsheets against the source documents, including the tax invoices on which he had noted the payments received. The appellant said that he did not check the tax return against any records he held because he 'assumed that Mr Eckerman had got it correct'. He believed 'the only reason why the invoices were provided was as a cross reference check'. The appellant said:

Because of the crosschecking that ought to have and what I understood was to check for mistakes, things that were obvious. That to my understanding alleviated the risk. ... It would have been a risk if I did not expect or understand that crosschecking was going on. That's obvious ... I accept that it's a risk without that. But once you expect and understand that crosschecking was going on, then I will say that whatever risk was inherent in that practice had been removed.

49 In the course of his reasons the magistrate said:

I find that the transparency that was evident in the accused's request for cheques payable for third parties was evident during the course of the accused's evidence particularly during crossexamination. I permitted crossexamination in relation to the child support issue. I have found the issue did not advance the prosecution case but I find that the accused was transparently honest when going into the details of the issues that had arisen. He was clearly under some emotional strain but I find provided a forthright account.

That appears to be a finding that the appellant was transparently honest in all of his evidence. Even if the finding is limited to some aspects of the appellant's evidence the magistrate did not disbelieve the appellant or reject his evidence that he expected the accountant to check the income spreadsheet against the source documents which disclosed the income received and relied upon the accountant to do so. The magistrate found that the appellant's expectation and reliance was not justifiable because the accountant could not have made the crosscheck. Mr Eckerman's evidence provided no basis for the magistrate's finding that the accountant could not have made the crosscheck which the appellant relied upon the accountant to do. The accountant could have made the crosscheck.

50 When the findings about the prompts and reminders and that the limits of the reasonable expectations the appellant was entitled to have in regard to the identifying of these particular transactions by the accountants are removed from the case found by the magistrate against the appellant, the verdict of guilty is unreasonable or cannot be supported.

51 The appellant relied upon the accountant to crosscheck the income spreadsheet against the income received recorded on the tax invoices. The accountant could have done so. There was no other reason for the primary source documents to be provided to the accountant. The accountant was not going to prepare a balance sheet. The accountant did not tell the appellant that he had not checked the income spreadsheet against the primary source documents. Having regard to those circumstances known to the appellant, the magistrate should not have been satisfied beyond reasonable doubt that it was unjustifiable for the appellant to take the risk that the return did not include income in respect of the six cheques and hence that the declaration was false.

52 Leave to appeal should be granted in respect of the ground of appeal, the appeal should be allowed, the conviction should be set aside and a verdict of acquittal substituted.