Court of Appeal (WA)|2004-08-03|Before: Smith J

Tieleman v The Queen [2004] WASCA 164 (3 August 2004)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : TIELEMAN -v- THE QUEEN [2004] WASCA 164

Criminal law and procedure - Bail - Application for bail pending appeal - Exceptional reasons why applicants should not be held in custody - Prospects of success on appeal - Anticipated delay before hearing and judgment - Financial and other effects of applicants' incarceration on family, business and other persons

Bail Act 1982 (WA), cl 4, Pt C, Sch

Respondent : Commonwealth Director of Public Prosecutions

Avis v The Queen [2002] WASCA 45

Bernt v The Queen (1994) 70 A Crim R 1

Caratti v The Queen [1999] WASCA 91

Chamberlain (No 1) v The Queen [1983] HCA 13; (1983) 153 CLR 514

Clark v The Queen [2004] WASCA 91

Davis v The Queen (1990) 50 A Crim R 55

Draper v The Queen [2000] WASCA 160

Kabadanis v Panagiotou [1980] FCA 80; (1980) 30 ALR 374

Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666

Marotta v The Queen [1999] HCA 4; (1999) 73 ALJR 265

Mullally v The Queen [2000] WASCA 26

Naylor v The Queen, unreported; CCA SCt of WA; Library No 960147; 20 March 1996

Parsons v The Queen (1998) 72 ALJR 1325

Peters v The Queen [1998] HCA 7; (1998) 151 ALR 51

R v Kastratovic (1985) 19 A Crim R 28

Robinson v The Queen (1991) 65 ALJR 519

Russell v The Queen, unreported; SCt of WA; Library No 930741; 23 December 1993

Stalker v The Queen [2002] WASCA 364

United Mexican States v Cabal [2001] HCA 60; (2001) 183 ALR 645

Wilson v The Queen (1994) 73 A Crim R 532

Duke v The Queen [1999] WASCA 215

Ex parte Maher [1986] 1 Qd R 303

In re Cooper's Application for Bail [1961] ALR 584

Macleod v The Queen [2003] HCA 24; (2003) 197 ALR 333

Peters v The Queen (1996) 71 ALJR 309

R v Southgate [1960] NSWR 477

Willers v The Queen, unreported; SCt of WA (Parker J); Library No 950284; 7 June 1995

1 ROBERTS-SMITH J: These are two applications for bail pending appeal.

2 In the Supreme Court at Perth on 1 July 2004, after trial of some nine weeks, the applicants and one Wharton were convicted of one offence of conspiring to defraud the Commonwealth, contrary to s 29D of the Crimes Act 1914 (Cth).

3 The applicants were sentenced to 5 years imprisonment with an order for their conditional release after serving 18 months.

4 The applicant Tieleman's ("Tieleman") notice of application for leave to appeal was filed on 16 July 2004. There are 16 grounds of appeal against conviction and one ground of appeal against sentence.

5 Tieleman's application for bail was filed on 20 July 2004. It is supported by an affidavit of Joy Tieleman sworn 19 July 2004, Andrew David Watson sworn 20 July 2004 and of the applicant Tieleman himself sworn 21 July 2004.

6 The applicant Pearce ("Pearce") filed a notice of application for leave to appeal against conviction and sentence on 15 July 2004. His proposed grounds of appeal are the same as those filed by Tieleman.

7 Also on 15 July 2004 Pearce filed an application for bail pending appeal. His application is supported by three affidavits sworn on 15 July 2004, they being of Wendy Ann Pearce, Nigel John Patrick Kingston and Robert Walter Fahey Sceales.

8 As will be seen, both applicants raised personal circumstances and to a great extent rely on the same or very similar financial and business circumstances. They also rely on the same grounds of appeal. Although there are naturally some differences in their personal and family circumstances, even those raise similar issues. As their applications therefore really fall to be determined on the same basis, it is convenient to deal with both applications together in single reasons for judgment.

9 These applications are to be dealt with in accordance with cl 4 of Pt C of Sch 1 of the Bail Act 1982 which stipulates that:

"In deciding whether or not to grant bail to a defendant who is in custody ... awaiting the disposal of appeal proceedings, the judicial officer shall, subject to clauses 5 and 6, consider whether -

(a) ...

(b) ... there are exceptional reasons why the defendant should not be kept in custody,

and shall only grant bail to him if he is satisfied that -

(c) ... the reason mentioned in paragraph (b) exists; and

(d) he may properly do so having regard to the provisions of clauses 1 and 3 ..."

10 Clauses 1 and 3 of the Bail Act are provisions which apply to any application for bail.

11 The threshold test is the need to show exceptional reasons why bail should be granted. One does not get to the point of considering the general considerations relevant to an application for bail, such as the availability of sureties, the likelihood of the applicant absconding, the conditions which might be imposed on an applicant and the like, unless and until the applicant has satisfied the court there are exceptional reasons why he should not be kept in custody. "Exceptional" means unusual or extraordinary or special, a reason not ordinarily to be seen, out of the ordinary.

12 As Brennan J pointed out in Chamberlain (No 1) v The Queen [1983] HCA 13; (1983) 153 CLR 514 at 518, the verdict of a jury is not to be treated as provisional or contingent upon being upheld through the appeal process. I discussed what his Honour said there and examined related authorities on the point in Stalker v The Queen [2002] WASCA 364. I adhere to what I said there, without repeating it.

13 So too, for obvious reasons, the presumption of innocence no longer applies when considering an application for bail pending appeal after conviction.

14 So far as the prospect of success on appeal is concerned, I take the test to be as I explained in Stalker (at [26] - [40]) concluding that it must be shown, without detailed argument, that the appeal is most likely to succeed. It is therefore not enough to show even that the appeal may succeed; more is required.

15 The basis upon which it is asserted in this case that there are exceptional reasons sufficient to justify the grant of bail following conviction and pending appeal, is what is said to be a high probability the appeal will succeed combined with the likely delay in the hearing of the appeal and delivery of judgment, together with the particular effect of the applicants' incarceration on the family, their business and other people.

16 In his affidavit Tieleman deposes that he was born on 31 October 1956 and is 47 years old, has been married for 21 years and has three children aged 11, 17 and 19. If granted bail he would live with his wife and children at an address in South Perth. His business and all his assets are located in Western Australia. He is a chartered accountant and a Fellow of the Australian Institute of Chartered Accountants. By reason of his conviction it is possible that he may lose his professional qualifications. If granted bail he would be able to work at McKessar Tieleman Pty Ltd ("McKessar Tieleman") as an accountant. He states that his reasons for requesting bail pending the hearing of his appeal are:

(a) the time it is expected to take before the appeal is heard and judgment is delivered;

(b) the potential severe economic damage to his professional practice which may result in the possible loss of his practice, and

17 He deposes that his solicitors have informed him that the appeal will require approximately five days hearing time, that the earliest it would be listed for hearing is December 2004, and that given the complexity of the matter and the length of the trial, a decision on the appeal may not be handed down until a few months after the hearing of the appeal, possibly April 2005 or later. If a decision upholding his appeal is handed down in April 2005, he would by then have served more than half the custodial portion of his sentence.

18 As to the impact on his professional practice, Tieleman deposes that he is one of four shareholders in McKessar Tieleman, an accounting practice. The other three shareholders are Pearce, Stephen Lowe and Nigel Kingston.

19 Tieleman deposes that in the 2004 financial year he generated fees of over $400,000, even though much of his time was taken up in defending the charges against him. The fees he generated represented over 14 per cent of the total practice fees. Pearce and he are directly responsible for about 25 per cent of the gross fee income of McKessar Tieleman. Pearce and he are in turn directly responsible for an additional 40 to 50 per cent of other fee income. He refers to a memorandum from Kingston in which there is an estimate that the fee income of McKessar Tieleman would be reduced by at least 50 per cent should Pearce and he not be available to work in the business.

20 It is put that if he is unable to continue to work while the appeal is being heard and determined, the income to the company would be greatly reduced. The cost structure of the practice relies on a certain level of fees being generated. Thus, if he is not working to generate fees, the ability of the firm to meet its expenses will be compromised.

21 He deposes further that it is also important that he is able to keep in contact with important clients of the firm. If he is not able to keep in touch with them and meet their needs, the clients may be lost to the firm. The fees received from the larger clients are a very significant percentage of the total practice income.

22 Tieleman deposes that he has particular expertise and experience in certain technical areas of accounting which no-one else in the firm has. He states that if he is unable to work, clients requiring this type of expertise will go elsewhere. He says there are currently a few projects on which he was working prior to his incarceration of which only he has an intimate knowledge and the specialist expertise to deal with. McKessar Tieleman, together with its associated entity MKT Consulting Pty Ltd, employs 16 persons including the applicants and Messrs Lowe and Kingston.

23 According to Tieleman he has been informed by Kingston and believes that the value of the assets of the firm as at 30 June 2004 is $2.4 million. Of that, $1 million is the book value attributed to intellectual property when the partnership was rolled over into a company with its present operating structure so that in the circumstances, the intellectual property has a nil value. Further, he says, an amount of $675,007 has been accounted as a capital asset in respect of legal fees. He and Pearce expected that amount would have been recovered from the firm's professional indemnity insurer had they been acquitted, however recovery now seems unlikely. The assets of the firm are therefore not worth more than $1 million.

24 The tangible assets of McKessar Tieleman are trade debtors of $4,000 and plant and equipment of approximately $120,000. The firm has liabilities of $1,489,137, primarily as a result of the funding of Tieleman and Pearce's defence.

25 Tieleman deposes that he considers that the impact on McKessar Tieleman would be so severe that it may have to be wound up and liquidated or merged with another accounting firm in order to continue in business.

26 There is a shareholders' agreement between the shareholders in McKessar Tieleman. Tieleman says that as a result of his conviction he is entitled to call upon Messrs Lowe and Kingston to purchase his shares. He does not believe they would wish to purchase his shares given the damage to the business caused by his and Pearce' convictions, but in any event he does not know if they have the funds to do so.

27 He says that if McKessar Tieleman was wound up, then all employees would have to be dismissed. Two employees who provide bookkeeping services are over 50 years of age and he believes their prospects of finding alternative employment are not good because of their age and specialised skills.

28 He says Kingston has informed him that three other accounting firms in Perth have already approached the professional staff of McKessar Tieleman with offers of employment. The staff in question have so far rebuffed these approaches. Kingston has also informed Tieleman that he has received an invitation to merge the firm with another firm but has rejected that as being premature and out of loyalty to Tieleman and Pearce.

29 According to Tieleman, if he is released on bail pending the hearing of his appeal, he will be able to work to keep the business going and limit the loss of income as a result of his conviction and if his appeal is successful would have a professional practice to which to return. If he is not able to work until a decision is made on his appeal he believes the prospects of McKessar Tieleman and its practice continuing to exist at the time a decision is made on the appeal would be remote.

30 He refers to an annexure to his affidavit indicating Lowe and Kingston have only recently acquired their interest in McKessar Tieleman and borrowed money to do so. He deposes that if the fee income of the firm falls because he and Pearce are unable to work pending the outcome of the appeal, Lowe and Kingston will themselves be in severe financial difficulties to the extent to which they may face bankruptcy which in turn would have a severe effect on their professional qualification and tax agent status.

31 So far as the effect on his family is concerned, Tieleman says he is the sole breadwinner. His two eldest children are studying full-time and derive some minimal income from part-time work but that goes towards their personal expenses and university fees.

32 His two younger children are at school. His only income is derived from McKessar Tieleman and during the time he is not working he is not being paid.

33 Two of his children attend private schools. A daughter is currently studying for her TEE. Her school fees are in excess of $6,000 for the remainder of the year. If he cannot pay the school fees to keep her at that school she will be forced to change schools at this late stage of TEE preparations which would be extremely disruptive to her studies and chances of achieving a good TEE score.

34 He has other financial obligations including mortgage payments and other outgoings on the family home of approximately $4,500 a month. He deposes that with no income they may have to sell the home to meet expenses.

35 Tieleman says he attends to all domestic financial matters and has a large role in looking after and bringing up his children. In particular he helps his son with homework each evening. Because his wife is studying full-time, Tieleman is also responsible for driving his daughter to rowing training, work and social commitments. She has rowing training four to five times a week with 5.30 am starts twice a week.

36 He performs general maintenance and work around the family home, in particular maintaining the swimming pool and believes his wife would have great difficulty in performing these tasks. His parents are elderly with his father being 80 and with a medical problem currently in remission. His mother is 72 and also has a medical condition. Prior to his imprisonment, Tieleman would visit his parents every week to monitor their health and care for them.

37 He deposes he is able to obtain a surety from his sister-in-law who provided a surety in the sum of $50,000 whilst he was bailed pending trial. He would report to police as often as deemed necessary and would abide by any other conditions which might be imposed.

38 Mrs Tieleman deposes that during their marriage of 21 years they have never been apart for more than a few days. She depends on her husband for support and encouragement to get her through the day and keep her focused on what she needs to do. Since her husband's case started she began to have "panic attacks" and felt anxiety when around crowds and public places. Her husband also used to suffer from these attacks so he understands what she is going through and is able to help her overcome this fear. She says that only her husband can give her this support.

39 She says she is currently in full-time studies to renew her qualification as a registered nurse, her qualifications having lapsed when she ceased working to care for their children. From 19 July 2004, as part of her course, she needs to perform four weeks of unpaid medical work experience.

40 Her husband is the only income earner in the family, although two of the children have minimal income from part-time jobs. The family needs to pay the usual household and living expenses such as mortgage payments and utility bills. Mrs Tieleman deposes that if her husband remains in prison pending the outcome of his appeal, she will need to abandon her own studies and work to support the children.

41 She says Tieleman plays a huge role in raising the children. He is a mentor for their eldest son and would spend time every night taking their youngest son through his homework. He is teaching their daughter to drive and Mrs Tieleman cannot take over this role. Whilst her husband is in prison they do not have the money to pay for driving lessons. The daughter has rowing training a few times a week. Her husband used to drive the daughter to training but now Mrs Tieleman needs to do that leaving the other children at home. The eldest son is often not home from work at times and therefore the youngest son who is 11 years old may be alone in the house.

42 Mrs Tieleman deposes to the emotional effect of the verdict on the youngest son and says that if her husband was released the son would recover his confidence.

43 Finally, Mrs Tieleman says she is able to provide her husband a surety in the sum of $50,000 which she could access from a pre-approved banking facility and her parents would also provide sureties on the equity of their home.

44 Mr Andrew Watson is an articled clerk in the employ of Wojtowicz Kelly, Tieleman's solicitors. He deposes that he spoke to the Listings Officer in this Court on 20 July 2004 who informed him that the first available dates for a five day appeal before the Court of Criminal Appeal are in December 2004.

45 I turn now to the evidentiary material in support of Pearce's application.

46 The following appears from what is deposed to by Sceales.

47 Pearce was born on 8 January 1965 and so is 39 years of age. If granted bail he would live with his wife and two children aged 5 and 2 years old in Floreat.

48 Pearce's parents live in Mandurah. They are elderly and not able to care for his children. His wife is obliged to seek employment, as she would have to do if Pearce were not to be granted bail. Pearce's wife's mother lives in Scarborough, Western Australia. She is infirm and has a severe heart condition. She is not physically able to care for the children on a full-time basis if Pearce's wife were to seek employment.

49 Until the time of Pearce's conviction he had been a certified practicing accountant and a company director of McKessar Tieleman, a member of the Australian Society of CPAs and the Institute of Chartered Accountants in Australia. He has been a Fellow of the Tax Institute of Australia and a registered tax agent. As a result of his conviction these professional qualifications are liable to cancellation or surrender, as the case may be.

50 If he were granted bail he would continue to work in the offices of McKessar Tieleman as an accountant, although he would not be able to practice as a tax agent or public accountant.

51 The reasons why bail is said to be necessary pending appeal are the same as those given by Tieleman.

52 Likewise, it is said that if Pearce were to be unable to continue work pending the hearing and determination of his appeal, he and his co-shareholders consider there is a strong likelihood that McKessar Tieleman would be wound up and liquidated, or would have to merge with another accounting firm in order to continue in business.

53 Attached to the affidavit is a memorandum from Kingston dated 13 July 2004 ("the Kingston memorandum") describing the structure of the firm, the work it does, the role played by the applicants, their contribution to the derivation of fee income, the costs which the firm has incurred in relation to the proceedings and the time cost associated with preparation and trial. It also summarises the financial commitments of the firm and the status of Pearce and Tieleman as guarantors in respect of finance lease facilities. The matters set out by Sceales in his affidavit essentially reflect those to which I have already referred in the context of Tieleman's application.

54 The Kingston memorandum asserts that Tieleman and Pearce have specialised knowledge and/or expertise that simply cannot be assumed by other employees or replaced by the addition of new ones and accordingly their availability is essential in order for the firm to offer the full range of services required to ensure it remains a viable tax consulting firm. It also refers to an informal accounting network of approximately 120 practitioners with whom the firm provides advice on referral. It is said the network has primarily been established by Pearce and as such his availability is essential to its continuation. There is reference to McKessar Tieleman's education programme of which it is again said Pearce is the driving force, with his presence integral to the continued success of it.

55 With respect to the effect on Pearce's family, it is said that if he is not granted bail, the effect on his young family in dealing with his complete absence as the sole breadwinner would be devastating. His family is entirely dependant on him for income and the welfare of his wife and sons. He also supports his mother-in-law financially. If he were required to remain in gaol pending the hearing of his appeal his family would have no source of income. His liabilities exceed his assets and it is unlikely that he would have any income stream from McKessar Tieleman. It is said that Pearce believes that his wife and family would be obliged to look to the State for financial support. The only asset apart from the interest in McKessar Tieleman is a vacant block of land in Floreat, which is mortgaged as security for payment of the balance of purchase price on an interest-only loan with a repayment of $1,500 per month and as security for Pearce's obligations to Bankwest for financial facilities to the firm and his own overdraft facility. The family is living in rented accommodation at a cost of $1,664 per month. Mrs Pearce has no tertiary qualifications and is not employed. She is a full-time mother to her two young children. According to Pearce she has suffered considerable stress as a result of the prosecution, losing more than 9 kilograms in weight in the two weeks following his conviction, and is not able to eat or sleep properly. She is receiving medical treatment for stress. There is reference to other matters which it is not necessary for me to detail here.

56 According to Pearce, the children have begun to show signs of emotional withdrawal. In the past, Pearce has always been at home in the evenings to bath the children, to help with the feeding of them and to lead them in prayers before bed.

57 It is said that if Pearce were granted bail he would be able to obtain substantial sureties.

58 In his affidavit, Kingston confirms the details and facts set out in the Kingston memorandum and what is deposed to in Sceales' affidavit as to the developments in relation to McKessar Tieleman since the applicants were convicted. He deposes that Lowe and he are both deeply concerned as to their ability to continue to operate the firm successfully and, in particular, as to their ability to continue to service the financial obligations relating to financial, overdraft and leasing facilities, obligations to staff, continued payment of legal fees and expenses and their personal financial obligations in respect of the money they have paid to acquire their interest in McKessar Tieleman. He further deposes that if they are unable to do this, Lowe and he almost certainly face recovery proceedings, and possibly bankruptcy.

59 Wendy Ann Pearce deposes that her mother is now aged 55 and suffers from a severe heart condition and is not physically able to look after the children should Mrs Pearce be obliged to seek work in order to derive income to maintain the children and herself pending the hearing of her husband's appeal.

60 According to Mrs Pearce, her mother requires a five part heart by-pass. Her doctors have unsuccessfully treated her condition which resulted in severe loss of blood and it could be 12 months before they could attempt the surgery. She is on a wide range of heart medication. She is on a disability pension. Mrs Pearce and her husband support her financially because of her severe ill-health. She relies heavily on the applicant Pearce to do chores around the house for her.

61 According to Mrs Pearce, she has not worked through her married life because it was agreed it would be appropriate for her to bring up the children and to attend to their educational, sporting and extra-curricular activities. She has no tertiary qualifications, having left school in year 11. Between that time and her marriage she worked for a bridal shop. Her pay was low. If she is obliged to seek work pending the outcome of the appeal, she does not expect she would be able to find work easily, because she has no qualifications, nor does she anticipate the rate of remuneration would be high enough to enable her to pay the current monthly commitments for her and the children.

62 Shortly before the criminal proceedings commenced in December 2002, she and the applicant Pearce purchased a block of land in Floreat for $395,000, with the intention of building on the property. When the proceedings commenced, they agreed it would be inappropriate to incur a greater financial commitment and so have been living in rented accommodation for which the monthly rent is $1,664. The block in Floreat is registered in her name and they borrowed to purchase the block on an interest free loan for which the monthly commitment is $1,500.

63 Mrs Pearce estimates that on-going monthly expenses for her and the children will be between $6,000 to $9,000. She states she has no means of paying such expenses and would be obliged to liquidate the block of land in Floreat and to acquire cheaper accommodation for her and the children. She would have to use the capital to keep going.

64 Her son commenced pre-primary school at the beginning of 2004. She does not expect that in her present circumstances she would be able to pay the on-going fees pending the hearing of her husband's appeal other than by liquidating the land and by attempting to recover from the McKessar Tieleman the loan balance due to him.

65 The younger son is by virtue of his age largely unaffected by the proceedings and does not readily grasp that his father is in gaol. The other son on the contrary is extremely close to his father and it is said simply cannot understand why his father has been taken away from him. He has become very withdrawn and frightened, is very labile and distressed and cries frequently. She says that if her husband is required to remain in gaol pending the hearing of his appeal, she strongly believes the child will require medical treatment and counselling. She fears that by reason of the adverse publicity regarding this matter, the son will be targeted by other children which would not necessarily be the case if her husband were on bail pending the hearing of the appeal (she does not say why this would be so). She says they are a deeply religious family.

66 She further deposes that she has suffered extreme stress since her husband's conviction, she has taken medical advice and has been prescribed anti-depression medication.

67 In his affidavit the applicant Pearce confirms the matters deposed to by the other deponents.

68 I come now to the application of the legal principles to the evidentiary material outlined above.

69 In the search for principle, the fact is that difficult, sad, unfortunate, or even devastating consequences may flow to a convicted offender or to that offender's family, dependents, business, business associates or other people as consequences of the offender's conviction. It is necessary that it be recognised that the consequences flow because of the conviction - which is to say, because of the offender's offending.

70 That is why, following conviction, it is necessary to show exceptional reasons why an offender should not be kept in custody pending their appeal and it is also why the most significant factor which must be demonstrated to establish such an exceptional reason, is that the appeal is most likely to succeed. That must inevitably be so, because if the appeal does not succeed, the applicant's conviction will stand and all those consequences, unfortunate or devastating as they may be to the applicant and others, must flow, not as the result of any discretionary (or erroneous) decision in law, but as the consequence of the applicant's own offending.

71 So far as the situation of the applicants' families is concerned, the consequences of the applicants' continuing incarceration are and will clearly continue to be substantial. The circumstances elicit considerable sympathy. The difficulties are and will continue to be very real. The deprivation of a husband and father from the family and the effect of that on the members of the family, is unfortunate and a very sad thing. But none of that is out of the ordinary and nor is it unusual. On the contrary, these consequences of the incarceration of an offender are ordinarily to be expected. The fact that whilst the applicants remain in prison their families will have no source of income is again a very sad circumstance, but it is unfortunately a not uncommon result of the incarceration of an offender.

72 Whilst particular personal and familial circumstances naturally differ from case to case, the unhappy consequences described by the deponents here are not an unusual result of incarceration whether pending trial or pending appeal (see Russell v The Queen, unreported; SCt of WA; Library No 930741; 23 December 1993 per Owen J; Stalker v The Queen, supra at [16]-[17]) and there is nothing about them which would elevate them into an exceptional reason for releasing the applicants from custody. Nonetheless, they remain circumstances to be taken into account.

73 I turn to the issue of the effect upon the applicants' business, their partners and their employees.

74 Much of what is deposed to by Sceales, Kingston and the applicants is speculative and hypothetical. Even accepting it as likely though, there are difficulties with it as constituting exceptional reasons.

75 I am inclined to accept the submission of the respondent that the fact that McKessar Tieleman chose to fund the defence of Pearce and Tieleman at their trial is not a matter relevant to bail. It was a matter for the firm that it chose to incur costs described as "extraordinary" on behalf of Pearce and Tieleman. Those making such a decision must have been aware that incurring such a burden would have an adverse effect on the finances of the firm, with possible or indeed probable repercussions for the business and its employees.

76 Kingston and Lowe chose to acquire an additional interest in McKessar Tieleman which increased their total interest to one of in excess of $310,000 at a time when they were aware that Pearce and Tieleman were to stand trial on an indictment alleging conspiracy to defraud. Indeed, Mr Maidment SC submits it was always manifestly part of the Crown case that McKessar Tieleman was used by the applicants as the vehicle by which they carried out the fraudulent scheme. He contends the status of the firm was used by them to lend weight to the false representations underpinning the dishonest means. The fact that such a decision by Kingston and Lowe may, in light of the subsequent convictions, be seen as rash or foolhardy does not enable Pearce and Tieleman to rely upon it in support of a bail application. That submission must, I think, be accepted.

77 So too, the fact that Tieleman is said to have expended 923 hours of time in relation to the prosecution of him for an offence of conspiring to defraud the Commonwealth and Pearce 612 hours, is wholly immaterial. The fact that Kingston and Lowe apparently chose to spend 118 hours observing the trial is also entirely irrelevant to any question of bail pending appeal.

78 The potential consequences to the firm McKessar Tieleman may be devastating, but again the fact that an offender's business is dependent largely or entirely upon him and is likely to suffer substantially or fail altogether should he be kept in custody, is unfortunately not an unusual circumstance. I would have some difficulty with a proposition that an offender whose business is substantial should for that reason be entitled to greater consideration than an offender whose business is also critical to his livelihood and that of his family, but not so substantial. If a family may lose everything, it really does not matter that it is more or less than others may stand to lose.

79 Whilst I am prepared to accept that the applicants have particular financial and business expertise upon which the firm depends, I am not satisfied they are irreplaceable; nor that much of what it is said they do could not be done by someone else. But in any event, whether that be so or not, I am not persuaded these aspects of the application constitute an exceptional reason for granting bail pending appeal.

80 The availability of substantial sureties is certainly relevant to the ordinary considerations relating to an application for bail under cl 2 and cl 3 of Pt C of Sch 1 of the Bail Act, but as I have said, one does not get to that until exceptional reasons have been shown.

81 As to the issue of potential delay in the context of both the concerns to which I have referred about the family and business circumstances and about the potential position on the successful outcome of the appeal, I note that no application has been made for an expedited hearing of the appeal. The applicants accordingly come before me on this application on the basis that should bail not be granted they are apparently content to await the hearing of the appeal in the ordinary evolution of the Court list.

82 Again, the prospect that an applicant will probably have served most of their sentence before the hearing of the appeal will not necessarily alone be enough to constitute exceptional circumstances where the appeal is against conviction. The applicant will still have to show the appeal has real prospect of success in the sense I have described (Mullally v The Queen [2000] WASCA 26, Toomath v The Queen [1999] WASCA 213 and Bernt v The Queen (1994) 70 A Crim R 1 at 3).

83 Senior counsel for Pearce relied particularly upon the decision of Callinan J in Marotta v The Queen [1999] HCA 4; (1999) 73 ALJR 265. However, Callinan J there emphasised that it was the combination of the matters and the facts of the cases before him which demonstrated sufficiently exceptional circumstances to warrant bail pending appeal to the High Court and noted that a grant of special leave alone certainly would not do so - although that was one of the circumstances to which his Honour there referred as being present in that case. Others included the fact that substantial parts of the custodial sentences were likely to have been served, and possibly completed in one case, by the time the court's decisions were published, the appeals raised an arguable point which may have real substance and which were it to succeed would probably justify a retrial and there was a carefully reasoned dissenting judgment in the Court of Criminal Appeal.

84 In the case before me, the factor of special leave having been granted does not arise and nor of course is there any reasoned judgment supporting the grounds of appeal.

85 Indeed, Callinan J noted (at [15]) that the imminence of the end of a custodial period of a sentence has not usually of itself been regarded in the High Court as a special circumstance justifying a grant of bail pending appeal, referring to Parsons v The Queen (1998) 72 ALJR 1325 and Robinson v The Queen (1991) 65 ALJR 519.

86 In Robinson v The Queen Gaudron J noted the application was substantially based on the consideration that a substantial part of the sentence would have been served by the time the matter came on for hearing and it was likely that but a small part of the custodial sentence would then remain to be served before the applicant was released to parole. In her Honour's view that did not itself constitute exceptional circumstances. She observed that by the time the matter was likely to be heard, it was likely that in any event the applicant would be released to employment and on any view a substantial amount of the sentence would remain to be served either in custody or on parole by the time the matter came on for hearing.

87 In this case it is suggested the decision on the applicants' appeal may not be handed down until April 2005, by which time they would have served a substantial part of their custodial term. That, of course, is an assumption. It ignores the possibility of an expedited hearing (should an application for such be made). It also ignores the possibility that if the grounds of appeal do have such positive prospects of success as the applicants claim, the Court of Criminal Appeal, having heard full argument, might then order their release on bail pending delivery of judgment. It also overlooks the fact that the overall sentence was one of 5 years imprisonment.

88 In United Mexican States v Cabal [2001] HCA 60; (2001) 183 ALR 645, Gleeson CJ, McHugh and Gummow JJ in a joint judgment, dealt with the power of the High Court to give bail in criminal cases saying at [39]-[43]:

"[39] In determining whether to stay an order of imprisonment and give bail to the applicant or appellant, the court must consider not only the position of the applicant or appellant but also the position of the Crown. To stay an order of imprisonment before deciding the appeal is a serious interference with the due administration of criminal justice. As Thomas J pointed out in Ex parte Maher [1986] 1 Qd R 303 at 310, to allow bail pending the hearing of an appeal after a person has been convicted and imprisoned:

• makes the conviction appear contingent until confirmed;

• places the court in the invidious position of having to return to prison a person whose circumstances may have changed dramatically during the period of liberty on bail;

• undermines respect for the judicial system in having a 'recently sentenced man walking free';

• undermines the public interest in having convicted persons serve their sentences as soon as is practicable.

[40] Consequently, the doctrine of this court is that in a criminal case an order granting bail will only be made if there are exceptional circumstances ...

[41] The history of decisions of this court shows that ordinarily it will grant bail in criminal cases only if two conditions are satisfied. First, the applicant must demonstrate that there are strong grounds for concluding that the appeal will be allowed. The grant of special leave will often - perhaps usually - indicate that there are strong ground for so concluding. Second, the applicant must show that the sentence, or at all events the custodial part of it, is likely to have been substantially served before the appeal is determined. Thus, in Marotta v R [1999] HCA 4; (1999) 160 ALR 525; 73 ALJR 265 Callinan J granted bail after special leave had been granted. His Honour thought that substantial parts of the custodial sentences were likely to have been served and possibly completed in one case by the time the court gave its decision on the appeal. Furthermore, the grant of special leave indicated that the applicants had at least reasonable prospects of succeeding in their appeals.

[42] However, a very strong case is required for the grant of bail in a criminal case before the court has granted special leave to appeal. As Dawson J pointed out in Peters v R (1996) 71 ALJR 309 at 310:

'[S]ince an application for special leave to appeal against conviction or sentence or both will ordinarily be made after an appellate court has considered the case and found no error, the occasions on which this Court will grant bail are rare indeed.'

[43] Ordinarily, a person will be admitted to bail before the grant of special leave in a criminal case only where the court is satisfied there are very strong grounds for concluding that leave will be granted. The applicant will also need to show that it is likely that the custodial sentence or the greater part of it will have expired before the application for leave is heard. ..."

89 In Clark v The Queen [2004] WASCA 91, Barker J observed (at [16]) that while to some extent it may be said those two conditions were set on the understanding that an appellate court will have considered a case before an application for bail is heard in the High Court, it is also plain enough, having regard to the authorities referred to in the joint judgment, that the same conditions should be considered generally relevant to the question whether exceptional reasons to justify a grant of bail have been established under the Bail Act.

90 It follows from what I have said above that the determinative question on these applications is whether or not the applicants have demonstrated that their appeals are most likely to succeed.

91 The first ground is that the learned trial Judge erred in failing to uphold the submission of no case to answer at the end of the Crown case. That ground is followed by just over two pages of particulars. The ground may be quickly dealt with. The authorities clearly establish that a ground that a submission of no case to answer should have been upheld is not a proper ground. The appeal must be against the conviction, not an interlocutory ruling (Davis v The Queen (1990) 50 A Crim R 55 at 56; Naylor v The Queen, unreported; CCA SCt of WA; Library No 960147; 20 March 1996; Draper v The Queen [2000] WASCA 160; Avis v The Queen [2002] WASCA 45 at [7]; Stalker v The Queen, supra at [12]).

92 As Miller J pointed out in Caratti v The Queen [1999] WASCA 91 (at [10]) in relation to the assessment of the applicant's prospect of success on appeal, only a tentative or prima facie view can be formed by a single Judge sitting on a bail application. It is neither possible nor appropriate for such a Judge to sit as a preliminary court of appeal, as it were.

93 The same point was made by the New South Wales Court of Criminal Appeal in Wilson v The Queen (1994) 73 A Crim R 532. At 536 Kirby P (as his Honour then was) (and with whom Sheller JA agreed) said it is important that on such an application the court should not pre-judge the arguments which the applicant intends to advance before the Court of Criminal Appeal. His Honour said that to show special or exceptional circumstances to justify a grant of bail, the applicant had to demonstrate the appeal must be most likely to succeed and he had not done that.

94 Hunt CJ at CL also agreed, adding (at 538) that what must be established is a ground of appeal which is certain to succeed - and one which can be seen without detailed argument to be certain to succeed.

2 The trial judge failed to direct the jury either adequately or at all that in order to convict the Appellant they must be satisfied beyond a reasonable doubt that there was an agreement between the Appellant and another alleged conspirator to cause taxpayers to make a false statement or representation to the ATO, and, in particular, failed to direct them that they must find beyond a reasonable doubt what that statement or representation was, or as to the evidence (or more particularly the complete lack of any evidence) as to the statement or representation that was to be made pursuant to the alleged agreement, or as to the evidence (or more particularly the complete lack of any evidence) as the statements or representations that were in fact made by taxpayers to the ATO (the Crown case having been opened and put on the basis that the alleged conspiracy was carried forward into effect).

3 The trial judge erred in failing to direct the jury that in order to convict the Appellant they must be satisfied beyond a reasonable doubt that claims by taxpayers for the deduction of franchise service fees were not allowable deductions under the provisions of the ITAA, but instead erroneously directed the jury that it was not necessary that they make such a finding but rather that it was sufficient if they were satisfied that there was a risk that the financial interests of the Commonwealth were imperilled pursuant to the alleged agreement, when if the deductions were in fact and law allowable under the ITAA (and they either were or they weren't), there could not have been any such risk, and therefore no unlawful conspiracy to defraud the Commonwealth.

4 The trial judge erred in failing to direct the jury that on the evidence adduced they should conclude that the claims for the deduction of franchise service fees were allowable deductions pursuant to s8.1 of the ITAA (1997).

5 The trial judge erred in failing to direct the jury that in assessing the dominant purpose to be ascribed to a particular participant in a scheme coming within s177D of the ITAA having regard to the matters specified therein, they should have regard to and evaluate the other possible purposes of any such participant in order to objectively assess which was the dominant purpose.

6 The trial judge erred in failing to direct the jury as to the proper meaning and application of s177D of the ITAA to the facts they might find established by the evidence, and in particular failed to direct the jury adequately or at all as to the meaning and application of the provisions of that section concerning the difference between the form and substance of the scheme, and in that context failed to direct them that there was no evidence from which they could be satisfied that any of the agreements in evidence before them were a sham (in the legal sense of not having been intended by the parties to create the rights and obligations specified therein) and in so doing failed to correct the Crown opening in which it was asserted that the loan agreement between lender and franchisee was a sham, and that it was unenforceable at law, when there was no evidence capable of sustaining either conclusion.

7 The Trial judge erred in failing to direct the jury that in order to convict the jury would have to be satisfied beyond reasonable doubt that the Federal Commissioner of Taxation would have exercised the powers conferred on him by s177F of ITAA 1936, and failed to direct the jury as to the evidence, or more particularly the complete lack of evidence relating to that issue.

8 The trial judge erred in failing to direct the jury that in order to convict they must be satisfied beyond a reasonable doubt that the Appellant and another alleged conspirator with whom he had agreed each knew that claims by taxpayers for the deduction of franchise fees were not allowable deductions pursuant to the provisions of the ITAA, and failed to provide any or any adequate direction as to the evidence relating to that issue (or more particularly the lack of any evidence capable of supporting such a finding and the overwhelming evidence to the contrary).

9 The trial judge erred in failing to direct the jury that in order to convict they must be satisfied beyond a reasonable doubt that the Appellant and another alleged conspirator with whom he had agreed, each knew and intended and agreed that the statement or representation which they had found were to be made by taxpayers to the ATO would be false when made, and failed to give any or any adequate direction as to the evidence (or more particularly the complete lack of any evidence) on that issue.

10 The trial judge erred in failing to direct the jury that in order to convict they must be satisfied beyond a reasonable doubt that the false statement or representation that they were satisfied was to be made by taxpayers to the ATO pursuant to an agreement between the Appellant and another alleged conspirator would cause the ATO to take some action which it would otherwise have taken, or fail to take some action which it would otherwise have taken, and that such act or omission would imperil the financial interests of the Commonwealth of Australia, and failed to give any direction as to the evidence (or more particularly the complete lack of any evidence) on that issue.

11 The trial judge erred in failing to direct the jury that in order to convict they must be satisfied beyond a reasonable doubt that the Appellant and another alleged conspirator with whom he had agreed each knew and intended that that false statement or representation which the jury had found was to be made by taxpayers to the ATO pursuant to their agreement would cause the ATO to take some action which it would not otherwise have taken, or to fail to take some action it would otherwise have taken, which act or omission would imperil the financial interests of the Commonwealth of Australia, and failed to give any direction as to the evidence on that issue (or more particularly the complete lack of any evidence capable of sustaining such a finding, and the overwhelming evidence to the contrary).

12 The verdict of the jury should be quashed on the ground that it is unsafe and unsatisfactory, because of the lack of evidence capable of establishing beyond a reasonable doubt each or any of the issues referred to in Grounds 2, 3, 7-11 above, each of which had to be established before the jury could properly convict the Appellant.

13 The trial judge erred in directing the jury that it was entitled to consider the evidence of the franchisees to see whether it established a conspiracy to defraud the Commonwealth by arming taxpayers with false information under the guise of a legal scheme, and to use this evidence in evaluating the matters in s177(sic) of the anti-avoidance provisions, and s8 as to whether the Commissioner was defrauded, when such evidence was not logically relevant to any of those issues, and further erred in failing to direct the jury with respect to the failure of any franchisee to give any evidence with respect to any representation or statement that either was or was to be made by any such franchisee to the ATO.

14 The trial judge erred in directing the jury that the Crown's failure to ask its witnesses O'Connor QC whether the detail about the loan arrangements would have been material to his opinion because Mr O'Connor QC's views on that subject were irrelevant, when such views were obviously relevant to the Crown case, which was to the effect that Mr O'Connor QC had in fact been misled in a material respect which was never identified.

15 The trial judge erred in law in failing to direct the jury that the Crown, having chosen not to lead evidence from its witnesses, may not thereafter affirmatively put the propositions to the jury as being reasonable inferences open to them.

A The trial judge failed to direct the jury that it should be cautious before concluding that Mr O'Connor QC had been misled as to any material aspect of the instructions he received concerning his opinion, as Mr O'Connor QC was never asked that question by the Crown, and never gave evidence in that regard.

B In the absence of any evidence from Mr O'Connor QC that he had been misled in respect of any relevant matter, the learned trial judge erred in permitting the jury to draw any adverse inference or to form any opinion adverse to the Appellant in coming to its verdict, in that there was no evidence that the Appellant withheld any relevant matters known to him in providing or settling instructions to Mr O'Connor QC.

C The trial judge failed to direct the jury that they should be cautious before concluding there was any agreement between the Appellant with either Wahby or Aistrope either to commit an unlawful act, to conceal anything from the ATO or to prepare a tax effective investment scheme which did not comply with all the legal requirements applicable to such schemes, where the Crown never put those propositions to those Crown witnesses.

16 The trial judge imposed a sentence upon the Appellant that was excessive having regard to all the facts of the case.

A The trial judge erred in imposing a sentence based on finding that it was implicit in the jury's verdict that the Appellant had been subjectively dishonest rather than objectively dishonest.

B The trial judge erred in sentencing the Appellant on the basis of several factual errors.

C The trial judge erred in sentencing the Appellant to a sentence of immediate imprisonment rather than a non custodial disposition."

96 I expressly make it clear that I do not pre-judge any of these grounds of appeal. My consideration of them is confined by and limited to the purpose of assessing whether they (or any of them) demonstrate that degree of likely success as would constitute an exceptional reason for granting bail.

97 No argument was addressed to me on these applications that the proposed appeal against sentence would constitute an exceptional reason. That course was clearly appropriate.

98 Senior counsel for the applicants dealt with certain of the grounds together. In deference to the principle that an application for bail is not a preliminary hearing of the appeal, senior counsel dealt only with those grounds he submitted could be succinctly advanced without detailed reference to the evidence. They were ground 2 (and related ground 9), ground 3 (and related ground 8), ground 7 (and related grounds 10 and 11) and grounds 14 and 15. I shall do likewise.

99 Grounds 2, 9, 10 and 11 turn upon a proposition that the Crown case as disclosed in particulars prior to trial ("the particulars") and the Crown opening at trial, was that the dishonest agreement alleged was an agreement to cause taxpayers to make false representations to the Australian Taxation Office ("ATO"). It is submitted that is how the case was opened for the Crown and that the defence was conducted on that basis. It is said to be important because there is no evidence to sustain a finding there was an agreement to procure taxpayers to make any particular false statement to the ATO.

100 The point was taken before the learned trial Judge after the close of the Crown case and again immediately prior to his Honour's directions to the jury.

101 For the applicants it is said that during the course of legal argument after the Crown had closed its case, it appeared the Crown was advancing its case on the basis of deductions being claimed on a "false factual scenario" and that it had been immediately submitted on their behalf that was a fundamentally different case to one which had been particularised and opened. The point sought to be made was that a claim for deduction is just that, a claim that a particular amount from the otherwise assessable income of the taxpayer and it does not carry with it any particular representation of fact. Because a taxpayer has no duty of disclosure, an omission to disclose facts at a time a claim is made is not a contravention of the law and could not give rise to a fraud on the Commonwealth. This proposition was advanced in reliance upon R v Iannelli [2003] NSWCCA 1; (2003) 139 A Crim R 1.

102 It is complained that no clear direction was given to the jury to the effect that they had to be satisfied beyond reasonable doubt that each applicant was a party to an agreement with another alleged conspirator to cause a taxpayer to make any particular representation to the ATO let along a representation that was false.

103 Mr Maidment SC contends these grounds are based on a false premise. He submits that the case as opened was that particularised and it was closed on the same basis.

104 According to the particulars the conspiracy charged was to defraud the Commonwealth by depriving the Commonwealth of monies to be paid by the ATO as tax refunds to franchisee participants in what became the "Servcom scheme" ("the scheme") and/or by putting such monies at risk and/or by prejudicially affecting the Commonwealth in relation to its lawful rights concerning those monies.

105 The parties agreed that the defrauding would be achieved by procuring taxpayers to enter into franchise agreements and, pursuant to the scheme, (innocently) to file income tax returns containing false claims for deductible expenditure, totalling (as it transpired) $38,000 per franchise, purportedly incurred in the 1998 financial year in the discharge of genuine obligations under a business franchise agreement thereby to trigger the ATO self assessment system to issue tax refunds of up to $18,810 per franchise, $10,193 of which the taxpayer recipients were then to remit to the franchisor under the scheme. The parties further agreed that the taxpayers were to be given only such false or misleading information about the scheme (by positive assertion and/or by concealment of material facts) as would cause them to deceive the ATO into accepting the false claims as properly founded and allowable claims for expenditure actually incurred by the taxpayer in the 1998 financial year in the discharge of genuine obligations under a business franchise agreement and thereby incurred by the taxpayer in gaining assessable income or necessarily incurred in carrying on the franchise business for the purpose of gaining or producing such income.

106 The particulars assert that to that end, the parties agreed to provide the taxpayer franchisees so procured, with false or misleading information designed at once:

• to sell the scheme (by convincing them and their advisors that the scheme was lawful and effective), and

• to equip and induce the said franchisees to maintain the said deception in the face of scrutiny from the ATO.

107 The conspirators agreed to structure the scheme so that PAYE taxpayers, who had earned sufficient taxed income during the 1998 financial year (about $40,000 or more) to generate a refund from the ATO of more than $10,193 by participating in the Servcom scheme as franchisees, were to be procured to make the following false representations:

• That claims in their income-tax returns for deductible expenditure in relation to the Servcom scheme totalling $38,000 per franchise were well founded in fact and law and should properly cause the ATC to allow (and not to disallow) them in full and to refund tax accordingly.

• That the deductions claimed were in respect of funds that flowed in their entirety to the franchisor to be used by the franchisor solely to perform its obligations under the franchise agreement during the 1998 and 1999 financial years.

• That information contained in documents supplied or to be made available to each such taxpayer, including but not limited to:

c. an opinion letter from McKessar Tieleman, Chartered accountants:

was accurate and provided a reliable and proper basis for the ATO to determine whether or not the claims should be disallowed.

108 In essence, the representations to be made by the franchisees under the scheme were, to the knowledge of the accused, false or misleading in that:

• $29,500 of the $38,000 to be so claimed (per franchise) was based on ostensible obligations of the franchisee taxpayers under an agreement for a loan of $29,000 that was fictitious and none of the said $29,500 was to be available to the franchisor in the 1998 or 1999 financial years, or at all, to enable the franchisor to discharge its purported obligations under the franchise agreement.

• None of the balance of the $38,000 (per franchise) to be claimed was genuinely to be incurred in the 1998 financial year (or at all) in that the purported obligations of the taxpayer franchisees were not ones to which they were to be definitively committed in the 1998 financial year but were to be conditional upon their receipt (necessarily after 30 June 1998) of a tax refund of at least $10,193 (being the amount they were required to pass on to the franchisor in full discharge of their ostensible financial obligations and risks under the scheme).

• The capacity of the franchisor to honour its purported obligations under the franchise agreement and thereby to generate assessable income as represented in the Information Memorandum was non-existent, speculative and unfunded as at 30 June 1998 and was reliant upon such funding as could be extracted from the ATO after 30 June 1998 through the operation of the scheme pursuant to the conspiracy charged. There was no "business" in existence as at 30 June 1998.

• The $10,193 component of the tax refunds to be generated under the scheme was to be applied by the franchisor to meet expenses inherent in or incidental to the scheme other than and in priority to those arising from its obligations under or disclosed in the franchise agreement (and other than those disclosed, adverted to or implied in the Information Memorandum or otherwise revealed to the franchisees), including substantial commissions to agents for selling the scheme to franchisees (about $2.5 million), fees to the accused Wharton for providing the franchisor with protection from liability to income-tax (depending on projected sales of between 1,000 and 1,430 franchises) of between $15 million and $20.55 million on paper income generated notionally by the scheme of between $38 million and $54.14 million (at the rate of 7 per cent of the income protected but apparently capped later by agreement at $2.5 million) and fees and performance related commissions to the accused Pearce and Tieleman (up to about $599,000).

• Thus, on a projected sales range of between 1,000 and 1,430 franchises, instead of the deductions to be claimed under the scheme as represented in the Information Memorandum producing a cash-flow to the franchisor of between $38 million and $54.14 million, whether or not the said claims for deductions were allowed, as the accused were aware, the franchisor could expect to have available to discharge its obligations under the franchise agreement for the 1998 and 1999 financial years a net cash-flow (sourced from the ATO) of between $5.59 million and $8.96 million, but only if the tax refunds were successfully obtained from the ATO in each case.

109 The particulars further asserted that to the knowledge each of the accused, the information in the documents supplied to each franchisee did not provide a true and proper basis for the ATO to determine whether or not the claimed deductions should be disallowed. Rather they were designed by the accused to conceal the true nature of the scheme beneath a gloss of propriety in order prejudicially to affect the rights of the Commonwealth in relation to tax refund monies paid by or claimed from the ATO under the scheme.

110 Thus, it was said that with the intent of each accused, funds belonging to the Commonwealth represented by the refunds claimed under the scheme were to be (and were) put at risk and the rights of the Commonwealth concerning those refunds that would automatically be triggered under the self-assessment system by the lodgement of tax returns containing claims for deductible expenditure, were to be (and were)prejudiced at two levels:

• By causing refunds to made in response to the claims and thereby placing Commonwealth funds outside the control of the ATO.

• By ensuring that, in the event of scrutiny by the ATO, the franchisee taxpayers revealed in response only the false or misleading facts with which they had been fed under the scheme.

111 The particulars added that the Crown could not provide full particulars of what false representations may have been made by individual taxpayers as a result of the agreement beyond saying that all of those taxpayers who were induced to lodge tax returns containing claims for deductions in relation to the scheme falsely claimed, by implication, that there was a proper basis, in fact and law, for such claims to be allowed by the ATO and not to be disallowed.

112 (The emphasis above is mine, it does not appear in the particulars as provided).

113 It can be seen that although there is an assertion that the conspirators agreed franchisees were to be procured to make certain false representations, that was in a context in which it had already been said the false and misleading information which the accused agreed to provide to the franchisees was designed first to sell the scheme to them and secondly, to equip and induce them to maintain the deception "in the face of scrutiny from the ATO". That was subsequently further explained as occurring in the context of a self-assessment tax system whereby refunds would automatically be triggered by the lodgement of tax returns containing claims for deductible expenditure. The particulars then went on to allege the rights of the Commonwealth were thereby prejudiced at two levels. The first by causing refunds to be made in response to the claims and thereby placing Commonwealth funds outside the control of the ATO. The second was by ensuring that in the event of scrutiny by the ATO, the taxpayers revealed in response only the false or misleading facts with which they had been fed under the scheme.

114 The qualification that the franchisee taxpayer would reveal the false or misleading facts "in the event of scrutiny" by the ATO would contemplate as a matter of the ordinary meaning of the words, that if there was no such scrutiny, there would be no need for the taxpayer to reveal those details - although the funds of the Commonwealth would still have been (dishonestly) put at risk.

Tieleman v The Queen [2004] WASCA 164

At a glance

Court

Decision date

Before

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Judgment (261 paragraphs)

Tieleman v The Queen [2004] WASCA 164 (3 August 2004)

Parties

Cases Cited (15)