a —_— CATCHWGRDS - Administeative law - application for review of decision of Magistrate made in the course of a committal oroceeding - discretionary remedy - speciai circumstenmces - applicants ' charged with conspiracy to defraud the Commonwealth and conspiracy to prevent or defeat the execution cf the laws of the Commonwealth - the element of "dishonesty" in conspiracy to defraud the Commonwealth - distinction between evidence sutficient to put the accused on trial anc svidence raising a strong or probable presumption of quilt. , Administrative Decisions (Judicial Peview}] 2ct 19377 ss.7 and 16.. ' Magistrates (Summary Proceedincs) Act 1975 ss.56(1}(b) and t 59(7). Crimes Act 1914 (Cwth.) ss.86(1)(b) and B86Cie). Sales Tax Assessment Acts 1930-1973. JOHN STPANCTS EDWAPDS v. IAN VON EINEM and ROBERT RICHARD McDONALD (VG No. 66 of 1983) ' IAN GRANT v. TAN VON EINEM and ROBERT RICHART McDONALD (VG Mo. 75 of 1983) TAN DAVID STAFFORD COLLIE -7. TAN VON EINEM and ROPEPT RICHARD McDONALD (VG No. 80 of 1983) Smithers 7. BS, x "; > 8 June 1984. j : & , Melbourne. RE \ SATE Serre nace penance en regener = me eae wre ee et me ee ee ™ we ree ee meee es IN THE FEDERAL COURT OF AUSTRALIA } ) VICTORIA DISTRICT REGISTRY } } ) GENERAL DIVISTON dJudqge Making Order:- Date of Order: Where Made: Between: VG NOS. 66,75 and BO OF 1983 JOHN FRANCIS Between: And: - EDWARDS (Applicant) IAN VON EINEM and ROBERT PICRARD McDOWALD (Respondents) (VG No, 66 of 1983) TAN GRANT Between: (Applicanr)- TAN VON EINEM and ROBERT PRICHARD McDONALD (Respondents) (VG No. 75 of 1983) TAN DAVID STArTOPD Smithers J. 8 dune 1984 Melbourne ed Au COLLIE (Applicant) TAN VOt EINEM and ROBERT FICHARD McDGNALD (Respondents) (VG No. 80 of 1983) wanton A ei . -—— he ome ere re ee etna mente enema ene tnt — Soee ORDER . THE COURT ORDERS THAT: 1. Each of the applicants' applications 'be dismissed. 2. Costs be reserved. Aree en ete ont ae re eee Be en em eee tee Se re 8 ee ete va ne oF ——— oe — ~. a re et a ee rn ee te ae oe IN THE FEDERAL COURT OF AUSTRALTA VG NOS. 66,75 and ' VICTORIA DISTRICT REGISTRY 80 OF 1983 ' wwe eww GENERAL DIVISTON Between: JOHN FRANCIS EDWARDS (Applicant) And: TAN VON EINEM and . . ROBERT RICHARD - McDONALD - (Respondents) (VG No. 66 of 1983) -Bettzeen: - IAN GRANT - (Applicant) And: IAN VON EINEM and ROBERT RICHARD (Respondents) (VG No. 75 of 1983) Betweens TAN DAVID STAFFORD COLLIE (Applicant) Ands TAN VON EINEM and . ROBERT RICHARD McDONALD (Respondents) (VG No. 80 of 1983) Coram: Smithers J. 8 June 1924 Melbourne. tn? or ere ee - mS eee 8 ee a — --- - - ne ee REASONS FOR JUDGMENT Before the Court are proceedings brought separately by .John Francis Edwards (Edwards), Tan Grant (Grant), and Ian David Staffora Collie (Collie) (aiternativeiy referred to as the applicants) against the respondents pursuant to the provisions of s.7 of the Administrative Fecisions (Judicial Review) Act 1977 (ADJR Act). In each of the applications of Edwards and Grant relief is sought under s.i6 of .the ADJR Act, inter alia, by way of an order quashing ocr setting aside the decisions that there was sutficient evidence to put the applicants om trial, and that there was a strong or probable wpresumpticn of quilt on the part of the applicants and that the arriicants should he cautioned pursuant to s.56(1)(b) of the Mearistrates (Summary Proceedinas)} Act 1975 ° (the Act) in respect of the charges brought against them. In the appiication of Collie the relief ultimately sought was a declaraction as to the law relevant to the charges against him. The relief sought is discretionary. Although a Magistrate's decision to cautidn an accused person under $.56(1) of the Act is a decision subject t5 review under the ADJR Act. it is 'to be recognized that such a review is an aunterference with the administration of the criminal law. This is an important consideration in th exercise of the Court's discretion. It was said in Lamb w. Moss and Another (1983) 49 ALR 533 at p. 564 that the power to make an order of review under the Act in respect of cammittal proceedings shouid be exercised only in most exceptiona&= cases, especially in respect of a decisicn in the course a= the proceedings. Additional considerations might intrude at the final stage, for example in respect of committal for trial or commitment to prison pending trial. In this case I have taken into account three considerations.- The first is the allegatiom of the applicants ~ , that the first respondent (the Magistrate being concerned ta consider whether the conduct alleged against the applicants was engaged test rather d not nave formed Q Q i Magistrate. properly directing himself, the opinion either that there was sufficient evidence to put the applicants on triai or that there was a strong or probable Presumption of quilt of the applicants. The third is that this case, having taken eight weeks before the Magistrate, is expected to occupy between three and six months and perhaps longer in the Supreme Court if a trial is cedered. It appeared to me that if the first or particularly the second of these allegations were made out a case for the exercise of the Court's discretion might arise. I entertained this application for review having in mind that the magnitude we doo of the proceedings and the interests of both the Crown and the accused justify consideration of submissions which if valid might have brought the proceedings toa clese. On 4 October, 1982 an Information For An Offence was laid and sworn by the second respondent Saainst Edwards in which the second respondent allecad:- (a) that the said John Francis Edwards a= Melbourne, Perth, Sydney and other places, Between IL July 1979 and 18 R March 1982 did conspire with Steven Jonn Baker, William Leaver, Peta Jov Fisher,- Colin Haile rR Coghil Tan "<q fu et Grant, Tan David Stafford Collie arma other Persons-to defraud the Commonwealth comtrary ta section 86(1)(e) of the Crires -Act 1914; - {b} that the sazd John. Francis Edwards <t Melbourne, Perth. Sydney and other places, between I July 1979 and 18 Maren 1982 did conspire with Steven eshn Baker, William Leaver, Peta Joy Fisher, Coiin Hailey Coghill, Ian Grant, Tan David Stafford Collie and other wersons to prevent oc defeat the execution or entorcement of a law of Commonwealth mamely section ¢ (of the Sales Tax Assessment Sct (No. 3) 1930 contrary to s.86(1)(b) of 7 the Crimes Act 1914; (c} that the said John Francis Edwards at Melbourne, Perth, Oe A TR Re pe Ae a me were re a — ae ve ——— ~ oe re Sydney and other places, between 1 July 1979 and 18 March 1982 did conspire with Steven John Baker, William Leaver, Peta Jovy Fisher, Colin Hailey Coghill, Tan Grant, Ian David Stafford Collie and other persons to prevent or defeat the execution or enforcement of a law of the Commonwealth namely s.9 oF the Sales Tax . Assessment Act (No. 7) 1930 contrary to s.86(1)(b) of the Crimes Act At thes same time charges of haying similarly conspired were laid against the applicants Grant and Coliie. On 11 April, 1983 in the Macqistretes' Court at Mel- bourne, before the Magistrate, the applicants were charged with the aiorementioned offences. The vraceedings before the Magistrate were by way of preliminary examination conducted Pursuent to the provisions of 5.56(1) of the Act and s.68 of the Judiciary act 1903-1973 (Commonwealth). At all material times the Magistrate was exercising jurisdiction pursuant to an Act of the Commonwealth, that is. the Judiciarv Act 1903-1973 and any decision made in the course of the said proceedings was made pursuant to that jurisdiction and under that enactment. At the conclusion of the Crown case and in order to exercise his jurisdiction in accordance with law and pursuant to s.51(1)(a) and (b) of the Act the Magistrate was required:- tt tn ete (a) (B) if the evidence was not sufficient in his opinion to put the accused person on kis trial for an indictable offence - order him to be discharged out of custody as to the information then under enquiry; or ' if*in his opinion the evidence was sufficient to put the accused upon his trial for the indictable offence with which he was charged or if, in his opinion the evidence aiven for - the prosecution raised a strong or probable presumption cri quilt of the accused person in respect of that charge, read the charge to-him again and say to him the words set forth in s.56(1)ib) of the Act and call upon him to plead guilty or not guilty as the case may be. On 27 April 1983 and after the conclusion of the - evidence qiven for the prosecution, Calin Halley Coghill (Coghill) and Edwards submitted to the Magistrate :- (a) (b) "that the evidence before hin was noc sufficient to put them upon his trial; that the evidence before the Magistrate did not constitute a prima facie case against them or raise a strong or probabie presumption of his quilt such as to permit the Magistrate to put them upon their trial; a ee ee te er Seren Fat Ce) that Coghill and Edwards ought to be discharged out of custody as to the information then under enquiry. The applicant Grant made no submissions and as yet has called no evidence. The applicant Collie made no submission but he has given evidence. After hearing Coghill and Edwards the Magistrate gave reasons for Judgment on 29 April 1983 which judgment was applicable to'all the accused including the applicants in this case. The Magistrate, having formed the opinions that the evidence was surficient to put the applicants upon their trial and that thsre was a strona or prebable presumption of their quilt, did not discharce the applicants. The Madistrate ul proceeded to caution the apslicants in terms of s.56(1i)(b) of the Act and the applicants were called upon to plead to the charges. Fach of the applicants announced a plea of "not quilty" to each of the said charges. At the time of announcing his opinions and deciding to caution the accused the Magistrate gave reasons therefor in the following terms:~ "In this case the prosecution has proceeded by way of the hand-up brief provisions which are set out in sections 45 and 46 of the Magistrates (Summary Proceedings) Act 1975. A large number of witnesses' statements have been tendered togethes with a voluminous number of exhibits. (The word voluminous is a statement from Mr. Judd). In accordance with sub-section (9) oF section 45a significant number of witnesses have' attended for ee ~ tn ee re ae er ee ee -——- Be etn nt nee ee re . Each of che cross-examination. Additional exhibits have also been tendered through the witnesses that have been called. The prosecution has now closed its case and after a qood ¢2al of discussion Mr. Smith, Coumsel appearing for Coiin Haliey Coghill indicated that he wished ta make a submission as to why I client. Mr. Judd who appears as should not caution his junior counsel to Mr. Merkel one of Her Majesty's counsel (who nas not as yet attended these proceedings) wished to take a similar course. throuth their respective unformed me that he remaining defendants have indicated counsel that they did not want o make a submission at this stags but would do so after all the oral evidence in this case had been completed. I have should take. albeit, without any wey which I believe would not unfa isky law authori itv to quide me. Ho "the datendants. indicated a procedural course that this case taturory or common ee, it is a course isadvantage any of A @ m It should of course be realised that these proceedinas are at this stage governed by s.56(13(b) of the Magistrates 'Summary Proceedings) Act. This section ' provides the criteria to be applied by a court when considering whether or not an accused person should be cautioned i.e. - (I) whether the evidence indictable offence charaed; or . (ii) if the evidence civen yaises a strong or pro the quilt of the accus to that charge is suffic the accused person upon his €& with wry jent to put vial for the icn he is by the prosecution obable presumption of ed person in respect A strong or probable presumption of guilt appears to be established by evidence or -circumstances that point to the commission of a crime persons as the criminals, which completely explained and ciéared the accused. Edition pp.ti-42) I think it aiso follows froma (See Irvine's dustices of and to the accused circumstances are not up by the evidence of the Peace 2nd decision In re Robers C19673 1 WER at 474 that an accused person should be discharged where no reasonable jugy could convict on the present state of the evidence. ne pn rn en rere ene a a te ares oe ae eee vv eee ~ Ne ee _ ee However it should be remembered that this court is not required to determine the quilt or immccence of each of the defendants but has the task cf determining whether or not there is sufficient evicence to warranr sending the accused persons for trial before a jury. Applying these principles I have decided at this stage that there is sufficient evidence to place each of the accused on his trial for each of the offences that they have been charged with. I wil eventualiv caution each accused however because c= the lenathy submissions that have been made on Eshalf of Me. Cochill ana Mr. Edwards I consider that I should rake a few observations of the evidence as it now stands. In doing so I will be brief because I &9 not want to unnecessarily traverse the facts in view or the course that is to be followed by each af the accused. Indeed, I do not believe in committal proceedings that the facts should be canvassed at length by ths court when committing an accused person for crial - the veason for tnis belief are I think cbvicus. Each of the accused are charged with three st offences cf conspiracy under section 86(1)( 86(1)(e) of the Commonwealth Crimes Act. The first question that I snould 2s5k in these procesdings is - was there an agreement between each of the applicants? In answering that question I have noted that it is not necessary that persons who are involved =n an alleqed conspiracy join together at the same time. In sucha Charce anv one of the parties may nat know ail the other parties but only that others are involved. He may not know the full extent of the scheme to wnich ne attaches himself but he must understand that his invoivement is part of a larger scheme. The overall question in conspicacies of this kind =s5 not whether the number of persons have a common umiawful purpose but 'whether any of them either knows ac has reason to believe that his activities are part of a larger design . It has been put to me on behalf of Mr. Ceanill and Mr. Edwards thac they were not part of sny agreement althougn I think it is conceded that ther= may be some evidence that Coghili and Edwards played a small oc Miner role. In my view it is irrelevant the extent of @ach person's role as long as they wer= part of the agreement. In any event Tam of the apinian that on the evidence as it now stands including the evidence in the hand-up brief the oral evidence of various rn ee 10. witnesses and the documentary evidence that both Mr. Coghill and Mr. Edwards played an important part in the agreement between each of the defendants. Having found that there was "an agreement the next question is whether that agreement was to do an unlawful act, i.e. (i) to defraud the Commonwealth; (ii) to prevent or defeat the execution or enforcement of section 9 of the Sales Tax Assessment act (No. 3); and (iii) to prevent or defeat the execution or enforcement of section 9 of the Sales Tax assessment Act (No. 7). The evidence in this case as it presently stands shows that each of the defendants agreed to promote a scheme Whereby sales tax would not be- paid. Whether the scheme involved an avoidance er an evasion of sales tax is in my visw irrelevant. The question is whether the non-payment of sales tax was unlawful. In my view, such non-payment of sales tax was a clear breach of the Sales Tax Assessment Act. It has been correctly conceded by both defence counsel who made submissions to me that a defendant cannct excuse himself by saying, that, owing to his ignorance of the law he did not realise such an act was uniavwful. Although it has not been conceded by either counsel that section 9 has been breached there has been no substantial arqument put forward to support this contention except that the goods concerned do not fali within the categories set out in section 3 of the No. 3 and Wo. 7 Acts. In my view the evidence does not support this arqument. Except for some observations that I will make later I think it follows from what I have said that a case to answer lies against each of the defendants in respect to count 2 and 3 on the informations. Insofar as the charge of conspiracy ta defraud the Commonwealth is concerned, it has been pur to me that I could not be satisfied that such a charde was open because no element ef dishonesty or deceit was present. Mie. Smith referred me to a decision of Wellham gd. reported in 1961 A.C. 103 and also the latest addition cf Arcnboid whereby 1t is said that - to defraud is "dishonestly to prejudice or take the af risk of prejudicing another's right tmowing thac a ne et ne ne nee a eed ee wee ee en re ee ene ree eee eee eee ee ee eee ~— oe mee ——— = ae oh te tt ae rc a Ben en stn Ae il. you have no right to do so". Mr. Judd has referred me to a Court of Appeal decision of R. v. Landy which is reported at (1982), 1 WLR page 355 where it was said at page 365 - "What the prosecution had to prove tms a conspiracy to defraud wnich is an agreement diskcnestiy to doe something which will or may cause loss or prejudice to another. Tne offence is one of dishonesty." earing for the informant also referred age of this decision where it was said "Bue if the jury, appiving their cxun notions of what is honest and wnat 15 not, comciude that he could not have believed that he was acting honestly, then the elements of dishonesty will have been established". His Honour also said that 1t would be permissible for a jury co say - "We are sure he was acting dis can se2 no season wry a man or his int experience would noc have ADDE: cight-nminded peorl=s would have done, was doing was dishonest." T have come to the firm conclusion thac if I were to apply any of these tests, and in particuiar the last, there is a strong or, orobable presumption that the S@lement of dishonesty nas been satisfred. I therefore Tc fa) find that there is surficient evidence =o place the accused person upon their trial. In view of the suSmissions put to me I think it necessary to make some general observatiens. 1. T have been referred to a decision cf Churchill v. Walton (1967), 1 Al] E.R. 497 at 503 amd a decision of Camara v. DPP (1974), App. Cas. 1G1 which in my view more succinctly puts the proposition (that) "a Sincere belief ina state of facts which if true would rander the illegal conduct leqai would be a good answer to any charge of conspiracy". However in this case I have not been referred to any state of facts which are capable of being used to support the proposition and these decisions are therefore inacplicable. 2. It has been put to me that if the transactions were ' Tr 12. a sham then entity C would never be Iiable to sales tax and the liability whnolesaier. r submissicsn as to whether whether the believe there majority. if not In saying this criminal charges determin= the between th circumstances Some ' suggest opinion cr how 4, It has Eeen put to various - ° peymissible- to took not oniy but . which indicates the attemot has that thev Mr. Forsyth 0.C. Perth firm of solicitors, T am nov exactly ° such ¥ ieverthele uu s who had read che ; : fyemain with the last relevance in this would can see no (which I believe to be correct in law) there has been transactions is a consmiracy. As to constitut]= a sham I strona inference that the ali the transactions were a sham. T am reminded thst these are and as such it rernissible to real relationshi which existed entities. Zt is also at he surrounding t the evidence 4=Tendants. is also to look 4 intention of the been made by the defence to were entitled ta rely on the and an efivice froma ffassrs Stone James & ure how this arqument is woulke@ provide a mould crint cut thar that they were nov liability (or by = &. Band C. i.e. nr, fe y f i) ou a f=) cl a pa i ul M i cl a tr mm cr ee ae ee ' PoeuUaeO I cf pe el < a i. fe Le to each of 2 that they ence without the legal ar provide themseives m2 by Mr. Judd that certain ' assurances and undertakings given to Fis client and . others by Mr. upon. In my would have thought immediately made have Baker could view that 1s logically tmvossible. I in some ways be relied assurance would wary or the that such an a participant efficacy of the scheme. Me. Judd nas Court of the v. Cahili i referred me Supreme Court of New South Wales in R. fo a decisicn of the Full which is reportesi in (1978), 2 NSALR 4252 only reportec of the principles agreement which were to the involving each bearing on Cahill's cas to ae which he Gecision involving Commonweaith Crimes enunciated achieve a not unlawful but concepts of morality. 9f he principles «hich were explained in tells me. and I accept, is the section 86(1)(b) Act. However the that case involved an lawful purpose by means were merely repugnant In my view the case me has no in the defendants before re en nr en ete ee cree me we wk , a ' ee ay 13. Whilst I am obviously not prepared te accede to the submissions put by Mr. Smith and Mr. Judd, I thank you both for the way you have arqued your clients' cause and your courtesy in allowing me to have your submissions in writinad. The only further observations I have to make before cautioning each of the accused is that tne criteria to be applied by a court when considering whether or not an accused person should he cautioned. i.e. pursuant to secticn 56(1)(b)) appears tc be the same as that redauired under section 59(7) (i.e. when I have REsard ali the evidence in the case including any evidence which may be given by the accused person) ani I then have to decide whether an accused persen should be committed for trial. Two avenues of attack heave bee foliswed. Furst, thac cted himself as to the law, and second, =I fo the Magistrate misdir ( inte that there was no evidence before him on which he could have that the b ny ian re furo) | wD re Ny formed either of the opinions which fF evidence was sufficient to put the applicants upon their trial, or that there was a strong or probable presumption of On behalf of each of the applicants it was submitted that tne Magistrate misdicected himself to the effect that although dishonesty on the part of the applicants was an element of the offence under s.86(1)(e) of the Crimes Act 1914 Gishonesty was relevantly established if en the conduct and knowledge and other facts proved against the applicants, looked at objectively, a breach of the Jaw was involved. Reliance is placed on the passage above in which the learned Magistrate, having found that there was a relevant agreement er ere eee ee ee -——— —.. aes ee He en. ae ee ee a ne ee ar tl a tact ert between the alieged comspirators, said "the next question is whether that agreement was to do an unkawrul act i.e. to defraud the Commonwealth or to prevent or G@sfeat the execution or enforcement of s.9 c= the Sales Tax Assessment Act or s.5 of the -Sales Tax Assessment Act No. 7", and solved this question by saying that -the evidence showe3 that each of the applicants agreed to promote a scheme whersdv sales tax would not. be paid and that - non-payment of sales tax in the circumstances was unlawful. It was not contested that a fraudulent purpose could be ) - said to be established where an agreement operated to the detriment of the Commonwealth and was enter#t into dishonestly in that respect. It is said that the passages referred to reveal that the Magistrate tock the view that the relevant mens rea was established once it appeared that the agreement was to bring about a state cf affairs in which non-paymext of sales tax was unlawful. In this contezt emphasis was placed on the sentence - "Whether the scheme involved an avoidance or an evasion of sales tax is inmy view irrelevant". This sentence might indicate some error in the Magistrate's approach if, as is alleged by ths applicants, it related to the matter of mens rea. But on & correct reading of the reasons it is related solely to the issue of the unlawfuiness of non-payment of sales tax. eo ee ee ee ere SL. ee wee ee - -- ee i5. The Magistrate dealt with the' matter of mens rea in those passages in which he discusseé the element of -dishonesty. On a fair reading of the reasons it is apparent that the Magistrate was well 'aware and accepted that dishonesty was an essential element in the offence of conspiracy to defraud the Commonwealth. I consider -that the Magistrate is tc be understood as indicating that - dishonesty on the part of an accused person had to he proved by _the Crown and thet that element of dishonesty would be established where a fury looking at the facts proved, and applying their own notions of what is honest 'and what is not, concluded that the accused could net have believed that he was acting honestly. If the accused was a person of sufficient intelligence and experience to realize that what he was doing was" dishonest according to the standards of right minded people then in the absence of evidence to the contrary dishonesty on the gart of the accused might be found to exist. He went on to sey that in his view, Ix4 and applying this test, the element of dishonesty had been - satisfied by the evidence before hin. Accordingly, it is. my view that the contention that the Magistrate erroneousiv applied an obiective test to the element of dishonesty is not established. At the hearing before me there was considerable discussion as to the nature or constitute dishonesty. To my mind it would be unsound to tae ene ne anes ee eee te se tet 16. quality of the state of mind of an accused whicn will attempt a definition. It is sufficient to accept what was said in RB. vw. Gnosh £1982] 2 All ER 689 at 596:- er mere tetera ee ee ee ee ee en eee ew — "This brings us to the heart of the problem. Is _"dishonestiv" in s.1 of the 19368 Act intended to characterise a course of conduct? Or is it intended to describe a state of mind? If the former, then we can well understand that it could be established independently of the knowledge or belief of the accused. But if, as wa think, it is the latter, then the knowledge and belief of the accused are at the root of the problem. wee . There remains subjective test he objection that to adopt a to abandon all andards but that of the accu himsel=t, and te >ring about 4 state of aifairs 1 which "Rebin Hacad would be no robber" (See R. v. Greenstein). This objection misunderstands the nature of the sudjective test. It is no defence for aman to sav, "Zi knew that what i was coing is generally regarded as dishonest; but I do not regard it as dishonest myselz. Therefore I am not quilty." What he is, however, entitled to sav is, "I did not know that anvbody would vegard what I was doing as dishonest." He may not be believeé:; just as he May not be believed 1f he sets up "a claim of right" under s.2(1) of the 1968 Act, or asserts that he believe in the truth of a Misreprasentation under 5.15 of the 21968 Act. But if he is believed, or raises a reai doubt about the matter, the jury cannot be sure that he was dishcnest. Ju Sct oh In determining whether the prosecution has proved that the defendant was acting dishaomestly, a jury must first cof all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. Tf it was not dishonest by those standards, that is the end of the matter and the prosecution fails. If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing wes by those standarés dishonest. In most cases where the —— ne nn aa, Sr ener ee ee ce ae a DOSS OOO] actions 17. are obviously dishonest by ordinary ' standards, there will be no doubt about it. It will be obvious that the defendant himself knew that he for a ordinary people consider to be dishonest, even if asserts or qenuinely believes that he is he moraliyv example, Robin Hood ...". was acting dishonestly. EE is dishonest defendant to act in a way which he knows justified in acting as he did. For On this basis there is in my view nao fault to be found with the elements approach of the Magistrate in. identifying the or the offence of conspiracy to defraud th Commonwealth under s.86{1)(e) of the Crimes Act 1914, . The stated reasons of the Magistrate were also attecked geouné that they reveal an =rror as to the circumstances in which it would be proper Zor him to conclude that a strona or probable presumpticn of guilt was : established. Attention was focussed on the passage "A strong or probable presumption of guilt appears to be established by { crime and the evidence of clause. 1 evidence or It to circumstances that point toa the commission of a the accused person as the criminal, which circumstances are not completely explained or cleared up by the accused". Considerable emphasis was placed on the final adjectival was said that its presence indicated that the maqgistrate's view was that the necessary strong or probable presumption circumstances guilt was established where evidence or pointed to the commission of acrime by the ee a eee — = rte ne ee ee ee ee ee en te S -— a te ee oer Pe ent mantra genera at . . 18. accused, no matter how waveringly, unless the implication of the accused arising therefrom was completely neqatived by evidence of, or called by, the accused. It appears to me, however, that the Magistrate is to be understood as saying that, where the question whether there is a strong or probable presumption of quilt arises for decision, an affirmative answer may be given where the evidence of the prosecution or the circumstances point to the commission of a crime by the accused unless the implication of the accusad in the crime arising from such evidence or circumstances is explained away by evidence of, or called by, the accused. The word i "completely" in the passage under discussion is inaptly inciuded. The uitimate question would not be whether the evidence for the accused completeiy rebutted the imvlication of the accused arising from the evidence of the Crow, but whether it so weakened that implication that it could no , longer be said to be sufficient either to yequire that the accused be put upon his trial or to support the existence of a ! strong of probable presumption of quilt. Reading the reasons as a whole I am not persuaded that the Magistrate did not so understand the problem before hin. It is to be observed that it is only where in his opinion the evidence is sufficient to put the accused person upon his trial for the relevant offence or, in his opinion the evidence given for the prosecution raises a strong or probable presumption of guilt of the accused person, that it is the were eR RS I eR fe ee — a _ nr eee eee ak ee ta ee een a a — a a he A nl Hcl, 19. duty of the Magistrate under s.56(1)(b) af the Act to caution the accused. And where the question arises under s.59(7), after evidence has been- given by the accused or his witnesses, if any, whether the accused shall be directed to be tried for the offence in question, the duty so ta direct arises cniy where the Magi ate holds the opinion either that the uifice fjent to put the accused person upen his evidence is trial or raises a strong or probable prestmption of guilt. The word ""presunotion" in these context= may introduce a perplexity. Wosat is involved is a process of drawing inferences. A -veesumption is something. that does not necessarily proceed by inference or even by legic. However, an this context a relevant presumption only exists where tiri d. i iD inference is fu In each situation the opinion referrea to is of course that formed on 'the — whole .of the evidence. From the observations of Lord Reid in Armah v. The Government of Ghana £19683 3C 152 at 229, it would appear that hefore the Magistrate would contemplate cautioning or committing an accused by veterence to an opinion that the evidence was sufficient to put the accused on_his trial he would weigh it to see whether in his opinion twelve reascnable men and women could ali progeriy think it sufficiently ccmvincing to satisfy them beyond reasonable doubt of the guilt of the accused or, alternatively. whether a case had been magd= out fit for later consideration by a jury. The expression "fit for the v ¥ is eee tte eee ee me eee fe ant eee me ee $e Se eee ne eee re ne ae a oe a ne ee ee! 20. consideration of a jury" would appear to mean fit to be considered by a jury on the question of whether on the evidence it is satisfied beyond reasonable doubt of the guilt of the accused. But it would seem that on this latter test also, the opinion is one to be formed by the Magistrate on the evidence and would normally be an opinion to the effect that the evidence could be thought by a jury to be adequate to support a conviction. But when one considers action to caution or commit upon an opinion of the Magistrate that the evidence raises a strong or probable presumption of quilt, what is involved is that the Magistrate, considering and weighing all the evidence fox himself, should be of the ovinion that there is.a& stroma o¢ probable presumption cf guiit. In that case, as Lord Reid savs at p.229 he must "decide whether he, not a hypothetical fury, thinks it probahle chat the accused committed the offence. and "probable" dces not mean certain or nearly _cerfain, and on the--other hand it does not mean a mere possibility." See also Lord Pearce in the same case at p.253. Thus there is to be a warning at a committal where the evidence is such that the Magistrate is af the opinion that a jury could be satisfied of quilt beyond reasonable doubt, or the Magistrates himseif is of the opinion that there is a strong or prokable presumption arising from the evidence that the accused is quilty. It is in the light of these observations that the Magistrate had to form his opinion on we re 21. the evidence and I have to consider whether there was evidence upon which -he could form the opinion he did. The statement of the Magistrate that there is a strong or probable presumption of guiit where the evidence or circumstances "point to" the commission of the offence by the accused was criticised and does raise a question whether the Magistrate had in mind evidence of implication of the accused sufficient to support - strong or'probable presumption that the accused was quilty or that the evicence was sufficient to put the accused on trial as exnlained by Lord Reid, or something iess. I think, however, reading his reasons as a whole that he is to be understcod as referring to evidence sufficient to o r 's support both of the opinions ref ed to. He pointed cut that the accused should be discharged where mo reasonable jury could convict on the evidence, and that it was not for him to determine guilt or innocence but. rather, acting on the principles to which he referred, to decide at the then current tage whether there was sufficient evidence to place the accused on trial for each of the offences. He then devoted a his attention to the elements of the offences: was there an agreement? Was it for an unlawful purpcese? Did the accused play a part in the relevant agreement? Was there dishonesty? After discussing the tests by reference to which a finding of dishonesty might be made, he stated that he had come to the conclusion that applying any of the tests to which he referred there was a strong or probable presumption that the element of ree ee oe ee ~—«-— ee re - ——o — ——— —_— —--- kine 22. dishonesty has been satisfied. The reasoning of the Magistrate is challenged also on the ground that in discussing the relevance of reliance on legal opinions given by Mr. Forsyth Q.C. and Messrs Stone, dames & Co., solicitors of Perth W.A., he stated, "I am not exactly sure how this argument is put, or 'how such reliance would provide a difference.". This is a rather puzzlina statement because reliance on legai opinions would be relevant to the existence of dishonesty in the mind of the accused. According to circumstarices a learned opinicn that & cértain course was ilawrul could be significantiy material in an assessment of the credibility of a statement by an accused that he really believed that kis course of action was, according to the tests mentioned above, an honest one. If the Magistrate is to be understecd to say that in forming his cpinion he considered that the existence of a c@levant legal opinion was of no significance that would be an error. However, the Magistrate did look et the matter on the basis that the opinions might he taken imto account on the issue of dishonesty. He took the view that on the issue of the accused's belief that his conduct was not dishonest because of the contents of relevant teqal opinions his statement to that effect would have to ke examined in the light of the actual opinion given. - In this respect the knowledge and experience of the accused in the area of sales a tre Se ee ee ee cr er rere ome: 23. tax liability and business generally, and the likelihood that the person might seek further assurances as to the lawfulness of the actual conduct to be engaged in tmder the agreement were relevant considerations. In the light of the foregoing I am not satisfied that the Magistrate misdirected himself in any respect. The Evidence Generally The © general situation disclosed sadainst all the applicants is that a Mr. Baker haé conceived a scheme which would operate in a situation where a wholesaler desired to sell qoods by wholesale to a retailar. Under the scheme the ownership of those goods was to be transferssi to the retailer through a series of intermediate transactions. The goods were to be sold wholesale by the wholesaler ta 2 company called company A and dealt with in dealings between company A and two other companies, called Band C, and as between B and C, in such a way that C would ultimately be ensblec to and would sell those qoods to the retailer. It agcsars that in that series of transactions sales tax. was not, according to law, payable by the wholesaler or the retailer. The wholesaler was able to sell to the retailer at a considerasle discount and at the same time enjoy a reduction of his outqcings. For this he was to remunerate the author and manager of the scheme. It appears that Baker, the author cf the scheme, was eye a - eee -- - -—— wn eee a 24. ' secretive about the nature of the dealinces between companies A, 8B, or C. The theory was that those brought into the operation of the scheme, the promoters, could rely on the . assertion of Baker that such was the nature of the dealings that the legal result was that sales tax was mot payable by the wholesaler or the retailer and that no iiability for sales tax attached to companies A, B or C, Baker sought and obtained learned leaal advice. This advice was to the effect that under the scheme the wholesaler and the retailer incurred no liability for sales tax. Advice as ta whether A, B or Cc - Might be liable was not | sought oc given. However, the advice by Stone James & Co., did contain a statement "It is our view that none of you A, 2B, C, wholesaler and vetaizter is involved in a fraud." The Evidence Concerning Edwards It is not clear how far Edwards was aware of the nature of the transactions between A, B and C. He did know, however, that the scheme did involve sales by a wholesaler to A and dealings between A, B and C and ultimately a sale by wholesals 1 by C to the retailer. As secretary of a company called Lowanna Securities Pty. Ltd. he communicated with potential customers of the scheme in tne following terms:- "SALES TAX PROPOSAL Further to our telephone conversations, I enclose a copy of the Proposal. A een eae a re ee nee en ——. od ee - _ = re ome me op eo eee ate ee _ es tne ee ee ee . — re a re 25. Implementation of the Proposal involves the position of A, Band C, (referred to in the Qpinion contained in the proposal enclosed), being occupied by three Victorian incorporated companies, ownership and control of which is vested in a person living in Perth, Western Australia. The marketing of the Proposal in-Melbourne is being handled for and on behalf of the Perth interests by Lowanna Securities Ptr. Ltd. of the above address and Corporate Structures Pty. Ltd., or Level 9, City Mutual Building, 459 Collins Street, Melbourne. We are assured by our principal, (Who will be named provided you decide to procesd with the Proposal), that together the two companies mentioned above are solelv rescoensible for implementing the Proposal in the Fastern States. You may rest assured that marketang or the Proposai will proceed solely on the hasis of personal references and introductions through Lowanna Securities Pty. Ltd. and Corporate Structures Pty. Ltd. Our principal has advised:- 1. That none of the companies A, Bor C are collapsed. 2. That there is no reduction of price between A, Bore C. 3. That either our Principal or A, B and C will be responsible for any leqali costs in defending "Wholesaler" or "Retailer" against actions or assessments or collection of sales tax arising from transactions entered into by "Wholesaler", "Retailer", A, B or C. 4, Qur Principal undertakes to "Wholesaler" and "Retailer" to pay any sales tax assessed to A, Bor C provided that the assessment is upheld upon final appeal and previded also that A, B or C do not pay the amount assessed. . 5. That the invoice from C to "Retailer" will bear the words "Price includes any sales tax payable". ——* end —- -—-— - — a - 26. : ? I look forward to discussing the Proposal with you at a later date." He knew that sales tax was not to be paid by any party involved in the scheme. It appears also that he had access to an opinion given by Mr. Forsyth 0.C. in which it was said:- "Like my instructing solicitors, I am not asked to There is evidence analyse the dealings betwee A, B and C nor the question of whether any of them is liable to vay sales tax. And indeed I have not reached anv concluded view upon that question. it is enough for present purposes to make the very worst assumption, namely- that A and/or B and/or C does become iiable to pay sales tax, and that the liability is concealed, or at-least withheld, from the sales tax authorities by the failure to make any return (as required by éach of the Ass ssment Acts, @.9. section 7 of the Sales Tax Assessment Act (No.3)). I must stress that this is merely an assumption for the purposes of considering the position of Retailer and Wholesaler in the worst possible licht, It is not to say that I know or have reason to suspect that this is what will actually occur. But if that is in fact what does happen, nonetheless in my opin her Retarler nog Whelesaler incurs any ili eee In s9 far as the actions of A, B and C canscitute leqal and honest avoidance, in my opinian it is clear that no possible secondary liability could attach to Wholesaler or Retailer. ... But if one adds, to measures thought to be effective hy exploiting a "loophate" or inconsistency in the Act, or some subtle distinction ort the law, deliberate concealment or non-disclosure (in circumstances in which the law requires disclosure to be made - @.q. by waking sales tax 'returns), the avoidance ceases to be "legal avoidance" amd becomes a criminéi offence if, according to the view of the law that is finally upheid by the Court, a Liability did exist to pay sales tex and/or make the return as the case may be. Where there is concealment or misrepresentation ef that kind, there will 'usually be a criminal cffence. That goes beyond "leqal avoidance", ..." = = Fw that under the scheme the intention was that seen eee me 27. sales tax would not be paid by wholesaler or retailer or by — companies A, B or C, that C would not register as a wholesaler peescribed under s. 11 of the Sales Tax Assessment Act (No. 1) . 1930-1973 and would make no returns ef sales by it hy wholesale to retailers under s. 7. of the Geies Tax Assessment Bet (No. 3) 1930-1973. Edwards was to be yvemunerated hy way of commission according to his part in business done in accordance with the scheme. It is apparent even on these facts thet, if by law sales tax was payable by C then, by conducting the transactions in a Manner that they would not come to the notice of the Sales Taz Department, altnough there was a risk thak they might, sales "tax would not be paid. In that event the scneme involved the commission of unlawful conduct to the datriment of the Commonweaith. The justification for conducting the transactions in this wavy was that there was gmenuine acceptance of the assurance of Baker that the nature of the transactions between A, 3 and C and the wholesaler and retailer concerned were such as to absolve them all from liabiitaty for sales tax. Such conduct was therefore intrinsically immocent and would be so regarded by any reasonable man. But the view might well be taken that the "possibility" that there was an avenue of tax immunity in the Act which could be exploited by Baker's secret formula would be likely to be questioned by any honest man iallyv an accountant, as Edwards was. Would an honest man Ng a ye] )) invited to enter into the schema and parcicipate in it for ON ee i ate re ee ee er ety ee ee a re ee ee ~~ — . = Tr 28. profit have wanted to know more about the scheme. What could there be in the nature of the transactions which would absolve C, who sold by wholesale toa retailer, from liability to pay sales tax on his sales? He might have wanted to know why. while learned opinions were being sought as to the liability of whclesaler and retailer, an opinion was not sought as to the sales tax liability of A, B and C. What could be the "magic" of the nature of the transactions between A, B and C which could have the legal effect alleaqed? How could Baker's claim to secrecy. even against those joining in the scheme, be rR wel a accepted without question? The difficulty is that it ma be thought to be bayond the wit of an ordinary professional man to contemplate a basis upon which the interposition of intermediaries between the wholesaler and retailer would ur re} a exempt all the parties from iiability to saies tax 2 cially as it must have been clear that the transaction between C and the retailer was pliainly a sale by a wholesalers to a retailer. In my view it is unnecessary to proceed further to come to a conclusion that in the absence of credible evidence from Edwards as to his real state of mind the Magistrate could well form the opinions which he did concerning the case against Edwards. The Evidence concerning Grant The evidence shows that Grant was introduced into the 29. scheme by Collie. He became the administrative and executive manager of the scheme in Melbourne. He was at the material times secretary of companies occupying the positions in the scheme of A, B and C. He handied the wreceipt from the yetailer of the purchase price for the goods scld to it. He took out of the sum so received 25%, being Raker's commission, kept 10% of that for his own fees, and divided the balance between the promoters.. He controlled the banking flowing fron money transactions arising from the the purchese by C of a one half interest in the ownership of the qoods from A and the other half interest from B, the purchase by 3 from A of one half interest and ths purchase of the good= b fro the me a B& original wholesaler. That distribution of funmas left A, B and C without money. Gn completion of each distributicn none of them could have said any amount due by any of them for sales tax. The intention of all parties was, to Geant's knowledge, that no sales tax shoulé be paid by anyhoa@;. It is also inherent in the scheme that all the transactions were artificial, in the sense that none of A, B og C entered into the transaction for any commercial reason. 'They were in no sense traders for commercial reward. Ther were mere legal entities interposed between the wholesaler and the retailer to enter into the transactions for the purrecs of avoiding payment of sales tax otherwise payable on che saie by the wholesaler to the retailer on the simple transaction between them. The relevant documents were created in Perth and transmitted to Grant. They were prepared in bulk. ON OI rt ete rep eer anit ee a ty re ee een a ee tee ar ne A a ge a ~: —— _ Rn a ee = 30. Unconnected transactions were conceived of and documented as all taking place at the one time. The artificiality of the transactions was inevitably apparent to any person implementing the scheme. It was not intended that A, BorC should be redistered as wholesaiers under the Sales Taz Assessment Acts or that they should submit any returns under those Acts. - It was said that these features were all consistent with honesty and there were na sign posts in the evidence suagesting that Grant did not honestly believe that Sales tax was not payable by the entities participating in the scheme. I think there were sign posts autside the general nature of the scheme. But- for the purposes of the issues before me I de not think it necessary to examine that matter. The current critical issue before me is whether with relation to the charge against Grant under s.86(1){e) of the Act there was evidence ci dishonesty upon which the Magistrate might form the opinions which he did. I do not doubt that there was. Of course, if Grant, or' indeed any of the applicants, give evidence - that they believed their participation in the scheme would be redarded as honest by right minded people and if that evidence is accepted, or if the effect of the evidence is 'such that on consideration of the whole of it the Magistrate ceases to hold either of the opinions expressed by him in his statement of reasons for decision then, no doubt, he will qive ezfect to that state of affairs. Coane i tt a a a Pa bey compere 31. Collie's Application In the proceedings before the Magistrate the statement of the reasons of the Magistrate for issuing the caution pursuant to s.56(1)(b) of the Act were stated in the presence of the applicant Collie. Collie then gave lengthy evidence. No decision has yet been made by the Magistrate as toa whether this applicant should_ be directed to stand trial or . be discharged. - In these circumstances Collie can hardly claim relief in respect of the Magistrate's decision. He has accepted it and entered upon a4 course of action cn the basis that the decision that was made should stand. Thus he has advanced the proceedings before the Magistrate to a stage at which a duty has arisen in the Maqistrate '%o make a decision under s.59(7) of the Act. The application of this applicant must therefore be dismissed. However, no objection was taken to Mr. Cummins on behalf of Collie making submissions as to the law. Mr. Cummins 2) contended that it was to be gathered from the Magistrate's statement of reasons that he had asked himself whether there was anagreement between the promoters of the scheme that sales tax be not paid and had answered that question in the affirmative. He said that the Magistrate had omitted to ee ne Qe ae ne a ee -" . - _. mr re eee ee ee om ke ae ents ae ee a a a a pt el Ate Lela en te" nh earn" 32. observe that the aqreement proved might have been to take steps to bring about a situation in which sales tax would not be pavable. Pe contended that an agreement of this latter kind would be quite lawful. It would be an agreement in which although the parties intended sales tax not to be paid such - non~payment would occur in circumstances in which they did not know or believe that it was payable. This it was said was critical on the question of mens rea. If the Magistrate had put to himself in categorical terms the question- "did the participants agree to operate a scheme under which sales tax would lawfully not be payable...?", then, according to the cr opinions arrived at by the Magistrate, ne answer would have been that, believing that sales tax might be payable, they agreed to operata a scheme under which hocerfully sales tax would lawfully not be payable but whether tax was or was not payaDle, in either event, tax would not bs paid. As was recognized by Mr. Cummins in this case "ail roads lead to dishonesty, that is wnat this case is all about". Accordingly, in ny opinion it may be of minor siqnificance as to which of the two questions the Magistrate asked hinself. However, the mature and content cf the agreement between the promoters was a question of fact. And if there was evidence to support the opinion that the agreement which was made was an agreement that sales tax be not paid then the Magistrate T L was entitled to form the opinion he did. And Iam not persuaded that there was not such evidence. et rr tr ee ee ee o— a _ rd ee ee ee eee 33. Charges Under Section 86(1)(b) In respect of these charges there was considerable debate at the hearing before me as to the nature of the conspiracy with which s.86(1)(b)? of the Crimes Act 1914 is concerned. The Maqistrate formed the opinion that in respect of the 'chargés against the applicants under s.86(1)(b) there he accused on trial for each cr was sufficient evidence to vlace mr fl of the offences. He took the view that the agreement which the applicants had made with each otHer was that sales tax be not paid the circumstances being, however. chat sales tax was legalivy payabie. Having regard to' his views of the appropriate test as to presence of dishonesty ina transaction, which he expressed in relation to the charges under s.86(1)(e) and to his views as to the evidence of the presence of dishonesty in relation to those charges, and whether or not he considered that dishonesty was an element in the charges under 5.26(1)(b), there was a sufficient basis for an opinion that it would be open to a jury to find beyond reasonable doubt that each of the applicants entered into the agreement believing, at least, that sales taz might be payable according to law, but intending that it should not be paid, whether or not that was the case, and intending that the vendor company ""C", veferred to above, shauid not register as a wholesaler or make returns of its sales pursuant to the mt Acts. The conspiracy arising from that uf 2s ta uy) Sales Tax As agreement wouic inevitably be one to prevent or defeat the t -——- te 2 ae — execution or enforcement of the Sales Tax Assessment Acts. - Accordingly, the applications must be dismissed. relevant provisions of the of each of the applicants _ ~ a ' —- 4 . . I certify thas this ani ti- 33 : - precedins pi lc ts ot tras Lou cr - oo Bensons for ye l. lek lle neue Tuo. Justecd Ls. SRR : ( 1 ™"N { to INL ate : —v~ ~ : . : H 4 Teed: fle ityerent ma entero nn oer Hae Hn