ZA CATCHWORDS Administrative law - judicial review - decision of stipendiary magistrate in extradition proceedings - decision that the applicant be returned from Victoria to Queensland to appear before the Brisbane Magistrates' Court to answer charges brought against him in Queensland - applicant a resident of Victoria - whether application for extradition made "in qood faith in the interests of justice" - whether it would be unjust or oppressive to return the applicant to Queensland - whether error of law - whether s.9 of the Administrative Decisions (Judicial Review) Act 1977 operates to divest State courts of jurisdiction to hear an application for review under 3.19 of the Service and Execution of Process Act 1901 ~ discretion and duty of Maqistrates and Justices of the Peace under para.18(6)(c) of the Service and Execution of Process Act 1901 - whether different considerations apply where defendant is charaqed with an offence aqainst Commonwealth law - the proper test to be applied under para.18(6)(c) of the Service and Execution of Process Act 1901. Administrative Decisions (Judicial Review) Act 1977, s.9(1) Crimes Act 1914, para.86(1)(e) Service and Execution of Process Act 1901, 3.18, s.19(1) ALEXANDER SILBERSHER v. MAURICE W. GERKENS AND PHILLIP G. CURRY VG 214 of 1984 LOCKHART J. SYDNEY 14 SEPTEMBER 1984 IN _THE FEDERAL COURT OF AUSTRALIA VICTORIAN DISTRICT REGISTRY GENERAL DIVISION BETWEEN : JUDGE MAKING ORDER: LOCKHART J. WHERE MADE: SYDNEY DATE OF ORDER: 14 SEPTEMBER 1984 THE COURT ORDERS THAT: l. No. VG 214 of 1984 ALEXANDER STLBERSHER Applicant MAURICE W. GERKENS and PHILLIP GEORGE CURRY Respondents The application be dismissed with costs. IN_THE FED! COURT OF AUSTRALIA ) ) VICTORIAN DISTRICT REGISTRY ) No. VG 214 of 1984 ) ) GENERAL DIVISION BETWEEN : ALEXANDER SILBERSHER Applicant AND: MAURICE W. GERKENS and PHILLIP GEORGE CURRY Respondents CORAM: Lockhart J. 14 September 1984 REASONS FOR JUDGMENT LOCKHART J. The applicant in this matter, Alexander Silbersher, brings this application pursuant to the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act") seeking an order of review of a decision made by the first respondent, Maurice W. Gerkens S.M. ("the Magistrate") on 27 June 1984 that the applicant be returned to Queensland to appear in the Brisbane Magistrates' Court to answer charges brought against him in Queensland. The applicant has been charged with the indictable offences of conspiring with certain persons in 1977 and 1978 to defraud the Commonwealth in contravention of para. 86(1)(e) of the Crimes Act 1914. Other persons have been similarly charged. The charges were made following years of intensive investigation into the affairs of Brian James Maher and others and many companies controlled by them or in which they have interests. The applicant is a qualified solicitor who carried on business in Victoria from which he derived experience in tax avoidance schemes. 2. Following the making of complaints against the applicant in Queensland, a warrant (perhaps there was more than one warrant, but the evidence before me is unclear on this aspect) was issued out of the Brisbane Magistrates' Court for the apprehension of the applicant to bring him before that Court to answer the complaints. As the applicant resides in Victoria the warrant could not be executed without first being endorsed by a magistrate in Victoria pursuant to sub-s. 18(1) of the Service and Execution of Process Act 1901 ("the Service and Execution of Process Act"). It is necessary to set out the relevant provisions of the Service and Execution of Process Act to understand the issues in this case. " 18. (1) Where a Court, a Judge, a Police, Stipendiary or Special Magistrate. a Coroner. a Justice of the Peace or an officer of a court has, in accordance with section sixteen or the law of a State of part of the Commonwealth, issued a warrant for the apprehension of a person, a Magistrate, Justice of the Peace or officer of a court who has power to issue warrants for the apprehension of persons under the law ofanother State or part of the Commonwealth, being a State or part of the Commonwealth in or on his way to which the person against whom the warrant has been issued is or is supposed to be, may, on being satisfied that the warrant was issued by the Court, Judge, Magistrate, Coroner, Justice of the Peace or officer (after proof on oath, in the case of a warrant issued by a Magistrate, Coroner, Justice of the Peace or officer of a court. of the signature of the person by whom the warrant was issued), make an endorsement on the warrant in the form, or to the effect of the form, in the Second Schedule to this Act authorizing its execution in that other State or part of the Commonwealth. (2) A warrant so endorsed is sufficient authority to the person bringing the warrant, to all constables and persons to whom the warrant is directed and to all constables and peace officers in that other State or part of the Commonwealth to execute the warrant in that other State or part of 3. the Commonwealth, to apprehend the person against whom the warrant was issued and to bring that person before a Police, Stipendiary or Special Magistrate or a Justice of the Peace who has power to issue warrants for the apprehension of persons under the law of that State or part of the Commonwealth. (3) Subifect to this section. the Magistrate or Justice of the Peace before whom the person is brought may - (a) by warrant under his hand, order the person to be returned to the State or part of the Commonwealth in which the original warrant was issued and, for that purpose, to be delivered into the custody of the person bringing the warrant or of a constable or other person to whom the warrant was originally directed; or (b) admit the person to bail, on such recognizances as he thinks fit, on condition that the person appears at such time, and at such place in the State or part of the Commonwealth in which the original warrant was issued, as the Magistrate or Justice specifies to answer the charge or complaint or to be dealt with according to law. (4) A warrant issued under paragraph (a) of the last preceding sub-section may be executed according to its tenor. (5) The Magistrate or Justice of the Peace before whom the person is brought has, for the purposes of this section, the same power to remand the person and admit him to bail for that purpose as he has in the case of persons apprehended under warrants issued by him. (6) If, on the application of the person apprehended, it appears to the Magistrate or Justice of the Peace before whom a person is brought under this section that - (a) the charge is of a trivial nature; (b) the application for the return of the person has not been made in good faith in the interests of justice; or (c) for any reason, it would be unjust or oppressive to return the person either at all or until the expiration of a certain period, the Maqistrate or Justice of the Peace may - (dad) order the discharge of the person: 4. (e) order that the person be returned after the expiration of a period specified in the order and order his release on bail until the expiration of that period; or (f) make such other order as he thinks just. 19.(1) Where - (a) a person apprehended is dissatisfied with an order made under sub-section (3) or (6) of the last preceding section: or (b) a Maaistrate or Justice of the Peace has made, under sub-section (3) or (6) of the last preceding section, an order for the discharge of an apprehended person, or an order for the return or admittance to bail of such a person under the terms of which the person is not, or may not be, required to return or be returned within three months after the date of the order to the State or part of the Commonwealth in which the original warrant was issued, the apprehended person or the person bringing the warrant, as the case requires, may apply to a Judae of the Supreme Court of the State or part of the Commonwealth in which the person was apprehended, sitting in chambers, for a review of the order, and the Judge may review the order." The warrant was endorsed in accordance with sub-s. 18(1), and the applicant was duly apprehended and brought before a magistrate in Melbourne. He was remanded to appear at the Melbourne Maqaistrates' Court on 28 May 1984 when it was foreshadowed that an application would be made for the extradition of the applicant to Brisbane. The applicant was released on bail. Subsequently, the extradition proceedings were heard by the Maqistrate. The applicant was represented by counsel. Application was made on behalf of the applicant, pursuant to sub-s.18(6) of the Service and Execution of Process Act, for an order discharging the applicant on the ground that the application for his return to Queensland "had not been made in 5. good faith in the interests of justice" (para. 18(6)(b)) or. alternatively, that "it would be unjust or oppressive" to return the applicant to Queensland (para. 18(6)(c)). On 27 June 1984 the Magistrate held that neither ground had been established and he made orders that the applicant be returned to Queensland and that bail be fixed in the sum of $10,000, with a surety of $10,000, to appear in the Brisbane Magistrates' Court on 16 July 1984. Certain special conditions relevant to bail were imposed by the Magistrate. I should say at this stage that during the course of argument before me I drew the attention of counsel to the fact that the Magistrate's orders of 27 June, as recorded ina document in evidence before me entitled "Certificate of Summary Conviction or Order" were: "Current bail discharged. Order that defendant be returned to the State of Queensland. Bail is fixed in the sum of $10,000 with a Surety of $10,000 to appear in the Brisbane Maaqistrates' Court on 16.7.84..." Also the Magistrate's reasons for his decision conclude with the words "I propose to bail Mr. Silbersher for appearance before an appropriate court in Queensland." It appears to me that paras. (a) and (b) of sub-s. 18(3) of the Service and Execution of Process Act provide alternatives; yet the Magistrate, if his orders were correctly recorded, had possibly both ordered the return of the applicant to Queensland and admitted him to bail, so that the orders were arquably bad. After some discussion it was agreed by all parties before me that in substance the Magistrate had acted only under para. 18(3)(b) i.e. he had admitted the applicant to bail on certain conditions. I therefore proceeded on that basis. The prosecution tendered before the Magistrate a document entitled "Statement of Facts Re Charges of Conspiracy to Defraud the Commonwealth" which set out the facts upon which the prosecution relied in support of the charges of conspiracy to defraud the Commonwealth. I annex to my reasons for judgment a copy of that document so that the issues raised in the application before the Maqistrate and before this Court may be properly understood. The committal proceedings in Brisbane were originally scheduled to be heard earlier than 16 July; but, as the applicant had applied to the Magistrate under sub-s. 18(6) for an order that he be discharged, the committal proceedings in Brisbane were adjourned to 16 July. They have in fact been adjourned again to October this year pending the outcome of the litigation in this Court and certain litigation in the Supreme Court of Victoria. On 3 July 1984 the applicant applied, pursuant to sub-s.19(1) of the Service and Execution of Process Act, to the Supreme Court of Victoria for a review of the Maqistrate's orders of 27 June 1984. The applicant requested the Supreme Court to adjourn the proceeding before it pending the hearing of the application to this Court under the Judicial Review Act. I was told from the Bar table that the ground for the adjournment application was that sub-s.9(1) of the Judicial Review Act, which limits the jurisdiction of State courts in certain matters, was said to apply to the proceeding before the Supreme Court so that it was without jurisdiction to hear it. The Supreme Court declined to adjourn the proceeding, whereupon the applicant withdrew it. It was not disputed before this Court that the decision of the Magistrate under challenge in this case is a decision to which the Judicial Review Act applies and that the applicant is a person aggrieved by that decision. The applicant's principal submissions arose from the following passage from the Magistrate's reasons for decision: "The suggested grounds of injustice and oppression are:- (i) that the defendant would become involved in lengthy committal proceedings and possibly a longer trial in a State in which he does not reside; and/or (ii) that the evidence upon which the Crown intends to rely does not disclose an offence. "It is clear that I am entitled to take into account (and I do so) the fact that extradition of the respondent to Queensland will involve him in very substantial inconvenience and expense. Indeed, it is not difficult to imagine that the cost of accommodation over many months and the disruption of his means of livelihood would be ruinous. Balanced against these factors must be the gravity of the allegations and the right of the community to expect that offenders will be brought to justice. It is not in dispute for the purpose of this proceeding that the public purse has been 8. defrauded of revenue amounting to some $16,900,000.00. The allegations then are very serious indeed and, albeit that he will suffer greatly as a result, it is my view that the respondent should be extradited unless he can succeed on ground (ii). I turn to that question." It was submitted by the applicant that this passage revealed a fundamental misconception by the Maqistrate of his function under para. 18(6)(b) in that he treated the matters described in paras. (1) and (ii) of his reasons as raising separate and independent issues rather than one issue with two limbs, both relating to the question whether it would be unjust or oppressive to return the applicant to Queensland. Then it was submitted that this particular passage from the Maqistrate's reasons, whether read alone or in the context of his reasons as a whole, demonstrated that the Magistrate overlooked a basic matter namely, that as the offences with which the applicant has been charged are offences against Commonwealth law, the prosecution can prosecute the applicant in whichever part of Australia it chooses, not only Queensland. The prosecution is entitled now to charge the applicant in Victoria with the same offences with which he has been charged in Queensland. Victoria is said to be the more appropriate forum because the applicant resides and carries on business there and his alleged involvement in the matters the subject of the charaes against him occurred in, or primarily in, Victoria. It was arqued that it would obviously be more convenient to the applicant if he were charged in Victoria, and if the committal proceedings and any subsequent trial were heard there. It was asserted that the Magistrate should have balanced against the inconvenience and expense to the applicant of the committal proceedings being conducted in Queensland, not the right of the community to expect that offenders will be brought to justice, but the right of the prosecution in a conspiracy trial to proceed in the piace of its choice. If these matters had been weighed by the Magistrate it was asserted that he may have concluded that, as the prosecution could choose to prosecute the applicant in Victoria, in all the circumstances it would be unjust or oppressive to return him to Queensland. The circumstance referred to by the Magistrate namely: "The gravity of the allegations and the right of the community to expect that offenders will be brought to justice" was said to be essentially irrelevant because it would be present as a consideration wherever the prosecution chose to lay its information against the applicant. This summarises briefly the principal argument advanced by counsel for the applicant. The circumstances in which a Magistrate or Justice of the Peace may find that it would be unjust or oppressive to return a person to the State or part of the Commonwealth in which the original warrant was issued have been considered in various cases including O''Donnell v. Heslop (1910) V.R. 162; Re Alstergren and Nosworthy (1947) V.L.R. 23; Aston v. Irvine (1955) 92 C.L.R. 353; In the Matter 10. of Jack Mandel (1958) V.R. 494: Walker v. Duncan (1975) 6 A.L.R. 254; Skwes v. Veen Hujzen (1978) 22 A.L.R. 101 and White v. Cassidy (1979) 40 F.L.R. 249. In Aston v. Irvine the judgment was that of all seven members of the High Court. Their Honours overruled a challenge to the validity of ss. 18 and 19 of the Service and Execution of Process Act and said of para. 18(6)(c) at pp. 366 and 367: "It would be unjust or oppressive to return the accused to Adelaide if the facts as they are alleged or appear make it clear that there was no indictable conspiracy. On this ground it is urged that we should decide in favour of their immediate discharge. To refuse to give effect to this contention means no more than that the men must be remanded to Adelaide. For a decision at this stage for their return does not, of course, mean that we hold that there was a conspiracy. That is essentially a matter of fact depending upon proof beyond reasonable doubt at the trial. Indeed such a decision ought not to foreclose the accused even upon a point of law that might otherwise be raised upon the committal proceedings in Adelaide or at the trial. All that it means is that upon the facts suggested for the prosecution, if made out, what in law may amount to an indictable conspiracy may reasonably be found. [t is not enough that the information as laid is open to criticism, as very likely it is. In the circumstances of this case it must appear that upon the suggested facts the charge of conspiracy is misconceived." The Legislature has conferred a wide discretion upon Magistrates and Justices of the Peace under para. 18(6)(c). It is not desirable that I should attempt to do what other courts have consistently declined to do namely, to lay down precise rules as to what is included within the scope of the words: "for any reason it would be unjust or oppressive". But the court whose assistance is sought to return a person to a part of the Commonwealth in which the oriqinal warrant for his apprehension issued does not examine disputed ll. questions of fact or determine doubtful or difficult questions of law. The exercise of the power conferred by para. 18(6)(c) is called for if it is clear that there is no reasonable prospect of any case being made out against the defendant should he be returned or that the charge is misconceived or without foundation. The question of the guilt or innocence of the defendant is not to be dealt with by the court whose assistance is sought. However, if it is a clear case that there is no substance in the charage brought against the defendant, then the court exercising furisdiction under para. 18(1)(c) should interfere. It is true that it does not appear from any of the reported cases to which counsel for the applicant referred me that the question arose whether different considerations might apply under para. 18(6)(c) where the defendant was charged with an offence against Commonwealth law so that the prosecution could charge him and proceed against him in any State or part of the Commonwealth. But the prosecution has apparently decided in the present case that charges should be brought against the applicant and various other persons in Queensland. I was told from the Bar table that some defendants have been extradited from Western Australia where they reside. I do not know why the prosecution chose to proceed in Queensland. The defendant Maher and other defendants reside, so I was told, in Queensland. This may have some bearing on the prosecution's decision. But it was not suggested that the charges should not have been brought in Queensland. The prosecution may have very good reasons for proceeding there. Even if it had been a relevant consideration for 12. the Magistrate in the present case that the prosecution could proceed against the applicant in Victoria, it cannot in my opinion be suggested that he failed to consider it merely because he did not refer to it. But if the Magistrate did fail to consider this matter (assuming its relevance). although a ground of review may then have been made out (paras. 5(1)(e) and 5(2)(b) of the Judicial Review Act), I am not persuaded that his decision would have been in any way different from the one which he in fact made. Indeed, I think it unlikely that he would have reached a different conclusion. I would not therefore have granted relief to the applicant in those circumstances. I leave open the question whether it was relevant for the Magistrate to consider the fact that the prosecution could have charged the applicant and proceeded against him in Victoria. All the Magistrate said in the portion of his reasons presently under consideration was that, on the one hand, he took into account the considerable inconvenience and expense that would attend the applicant if the committal proceedings were heard in Queensland but, on the other hand, he considered the very serious nature of the charges involved and the public interest in the proper enforcement by the Crow of the criminal law. In my view, these were matters which the Magistrate was entitled to consider and evaluate in the process of balancing the various elements in the case before hin. Nor is there any substance in the submission that the Magistrate severed impermissibly the considerations numbered (i) and (11) in the portion of his reasons extracted above. Ail he was doing, 13. as I read his reasons, was to consider two submissions put to him by counsel for the applicant and, for convenience, to deal with them separately. He was not suqgesting that they were two discrete matters. The applicant then submitted that the Magistrate posed the wrong question when he said, in the course of his reasons: "The question therefore becomes - does the statement of facts (Ex. C) as clarified by the concessions made by Mr. Flood, justify me in finding that there is an arguable case against the respondent so that, to use the words of Madden C.J. (supra), he is not being 'sent back to be tried on an alleged issue which does not really exist'?" It was submitted that the correct test to be applied under para.18(6)(c) is not whether the Magistrate is satisfied that there is "an arguable case" against a defendant but whether, in the words of the High Court in Aston v. Irvine (at p.366): "It would be unjust or oppressive to return the accused to ... if the facts as they are alleged or appear make it clear that there was no indictable conspiracy." It was suggested in argument that Q'Donnell v. Heslop was inconsistent with the later judgment of the High Court in Aston v. Irvine and that the Magistrate erred in applying the earlier case. It is hardly suprising that the two judgments are couched in different language; but I see no difference of substance between the two. If the Magistrate had referred to Aston v. Irvine rather than 0'Donnell v. Heslop, he would not in my view have posed a test that differed 14. except in verbiage from the one which he expounded. Aston v. Iryine dealt only briefly with the proper test to apply under para. 18(6)(c) because the judgment was principally concerned with constitutional questions. O'Donnell v. Heslop, and some of the other cases which I cited above, analyse in more detail para. 18(6)(c). I reiect this submission. Another attack on the Magistrate's reasons was founded upon the following words towards the end of those reasons: "If I were asked, as indeed I am, to evaluate the inferences arising from the alleged facts, I would adopt the words of Hood J. in In re Marshall [19011 26 V.L.R. 816 at 820: 'I think there is enough evidence, although if the prisoner were brought to trial before me, and I had to deal with him upon no more evidence than is here given I should advise the jury to acquit him, but I should certainly not withdraw the case from them.'" It was submitted that this passage, whether read alone or as part of the reasons as a whole (especially the passage the subtect of the lastmentioned submission), demonstrates that the Maqistrate applied the wrong test. I was told from the Bar table that the case before the Magistrate was conducted by counsel for the applicant on the basis that the alleged conspiracy, to which the applicant was said to be a party, involved three phases:- 15. Phase 1, which included the sale by the target company of its assets to the new company; the payment by the new company to the target company of the purchase price of those assets; the transfer of the issued shares in the capital of the target company from its shareholders (the vendor shareholders) to the acquisition company; and the payment of the purchase price for those shares by the acquisition company to the vendor shareholders. Phases 2 & 3, which included a loan by the target company to the banker company of an amount representing the sale price of the target company's assets to the new company; a loan by the banker company to the acquisition company of the money necessary to enable the acquisition company to purchase the shares in the target company from the vendor shareholder; the transfer by the target company to the acquistion company of the shares in its capital and of its books and records. The applicant asserted that any involvement on his part was in the steps contemplated in Phase 1, not those included in the other two phases. The applicant asserted that the steps involved in those two phases were carried out without his knowledge. The prosecution alleqed that, even if there were no evidence of any express knowledge by the applicant of the steps in phases 2 and 3, in all the circumstances that knowledge should be imputed to him by reason of the matters asserted in the statement of facts, in particular paragraph 13. 16, The applicant submitted to this Court that, in the passage from the Magistrate's reasons presently under consideration, he was saying that, if he were considering the material before him as a trial Judge on a criminal trial of the applicant, he would advise the jury to acquit the applicant because it could not be satisfied beyond reasonable doubt of the applicant's knowledwe of the elements of phases 2 and 3; but he would not withdraw the case from them. There was some discussion before me about the meaning of the word "advise" in the context of Hood J.'s judgment in Re Marshall and I was referred in this connection to the judgment of the Full Court of the Supreme Court of Victoria in Attorney-General's Reference (No. 1 of 1983) (1983) 2 V.R. 410 (at p.414). I do not find it necessary to add my voice to this discussion because, in my opinion, the Magistrate, in this concluding portion of his' reasons, undertook a task which he was not required to undertake namely, his own assessment of the guilt or innocence of the applicant. The Magistrate was dealing with a submission apparently put to him on the applicant's behalf that he should "evaluate the inferences arising from the alleged facts". However, this was a task of supererogation. No error on the part of the Magistrate has been established. In the course of argument some other points were relied upon by counsel for the applicant; but they were there disposed of sufficiently and I see no useful purpose in reiterating them here. 17. It has not been shown that the Magistrate erred in any respect relied on by the applicants. It is not necessary therefore for the Court to consider the interesting question, argued on both sides, whether 8.9 of the Judicial Review Act operates to divest State courts of jurisdiction to hear an application for review under s.19 of the Service and Execution of Process Act. The application should be dismissed with costs. | certify that this and the "6 preceding pages are a true copy of the Reasens for Judgment herein of his Honour Mr Justice LB Associate ~ ~ated (4A September, (994 This 1s the annexure referred to in the reasons for judgment of the Honourable Mr. Justice J.S.Lockhart in A, Silbersher v. M.W. Gerkens and P.G. Curry, No. VG214 of 1984 dated /4fh ae er 1984 ALEXANDER SILBERSHER STATEMENT OF FACTS RE CHARGES OF CONSPIRACY TO DEFRAUD é Lascnck THE COMMONWEALTH The 2 charges of conspiracy relate to the defendant's involvement with the the organisation headed by Brain James MAHER based in Southport, Queensland whose principals were BRIAN JAMES MAHER, JOHN PATRICK DONNELLY, LLOYD ERROL FAINT, LEE GABRIEL HURLEY and ALAN ROY PALMER and which operated under the name of Commercial Securities Ltd Between 1972 and 1978 this organisation put into effect an arrangement involving some 900 companies (target companies) with substantial current year profits which 1t ais alleged defrauded the Commonwealth in the form of the Cormissioner of Taxation of many millions of dollars income tax revenue. As well Cormercial Securities Ltd marketed and operated other tax avordance schemes with which the present charges are not concerned 2. The allegations against the defendant Silbersher are that he acted jointly with RONALD WARREN WOSS as the Victorian agent for Commercial Securities Ltd between June 1977 and July 1978. W2SS was based in Perth ducing this period and attended at the Victorian office periodically but the day to day operations of the office were conducted hy SILBERSHER 3 The current year profit stripping activities involved initially the seeking out and acquisition by the MAHER organisation of target companies which had derived substantial profits during a year of incone. When agreement was reached as to the acquisition of a target company 1t was put unto a cashed up condition by converting its net assets to cash This was normally done by selling the business of the target company to a new entity controlled by the original vendor shareholders of the target company. The target company then loaned to a MAHER organisation ertity (the banker company) the amount of its net assets. This entity retained the MAHER organisation fee for the arrangement usually calculated on the basis of 10%-12% of the current year profit and on loaned the balance being the purchase price of the target company's shares to the MAhER organisaticn acquisition company. The acquisition company then paid the vendor shareholders the amount of the purchase price of the shares in the target company. All these transactions were carried out by means of a round robin of cheques which required no actual cash by the MAHER organisation to acquire the shares in the target company. The fee retained in the banker corpany was removed and dispersed among those sharing it within a few days 4, The purchase price paid for the target company's shares was calculated at an amount which took no account of that company's prospective income tax liability on its current year profits e.g. a target company with a urrent year profit of $100000 would be purchased for say $90000 and 10% or $10000 and no other assets would be charged by way of fee to the MAHER organisation with no provision for the approximately $46000 income tax which would be payable on the current year profit of $100000. The result was that at _.e conclusion of the transactions described the target conpany's cash had been removed and it was intrinsically valueless. 2 : 5 At this stage the MAHER organisation acquisition entity owned the now stripped target company and would have become responsible for the target company meeting its income tax liability on its current year profit 1f nothing further occurred. 6. To avoid this unacceptable situation a second phase was implemented. In this there was a purported arms length sale on of the target company prior to the end of the financial year in which the current year profit was derived. In fact this sale on was a sham transaction to a straw company fitted to a person procured on behalf of the organisation as a straw director. The steps involved in this phase were. (1) The purchase from company brokers of a shelf company which would be fitted to a straw director and used as a sham pucchaserc. (2) The recruitment of persons to act as straw directors The criterea used in selecting persons for this role were as follows (1) resident outSide Queensland. (11) lack of commercial knowledge and experience (iat) poor financial circumstances (iv) a transient lifestyle with an ability to disappear if necessary (3) The attendance of the straw directors at the organisation's Southport office to sign masses of documents previous:y prepared by the MAHER organisation. ? Those persons selected to be straw directors were offered an all expenses paid trip plus payment to travel to the Southport office and sign documents. The stated purpose of the signing of these documents was said to make the straw directors secretaries of conpanies as a secretary resident in the State of the companies' registration was required. 8 In fact and unbeknown to the straw directors the signed docuwrents had the effect of making them directors and controllers of the straw companies which had purchased the on-sold target companies. Thus the straw directors assumed ownership and control of a large number of target companies which had been stripped of their current year profits and all their funds but which still had an impending incove tax liability in respect of the current year profit, 9. The on sale transactions were effected by means of a round robin of cheques which did not require the input of any funds by the straw directors or the respective purctasing straw companies to which they had been fitted. 10. The Victorian office was conducted by SILBERSHER and WOSS from June 1977 to June 1978. It was operated through Neetoe Pty Ltd, a company incorporated on 21 June 1977 and controlled by SILBERSHER and WOSS and was situated in leased premises on the 5th Floor, 461 Bourke Street, Melbourne. SILBERSHER and WOSS were remunerated on a commission basis receiving between them 40% of the net commission on a transaction until 24 Apcil 1978 when following a change in the Head Office structure their proportion of the commission was reduced to 30% of the net discount. They shared their proportion of the cormission equally ll Seventy-seven current year profit cases have been identified as having been processed by the Victorian office while 1t was operated by SILBERSI-ER and WOSS. The total amount of current year profits involved in these cases was $n 36.6 on which income tax of some $M16 9 could not be collected due to the transactions implemented The total gross commission attributable to these 77 current year profit cases was approximately $M3.5 12 The Head Office of Commercial Securities Ltd in Southport exercised control over the operations of the Victorian Office Prior to taking over the office SILBERSHER travelled to Southport for discussions with the principals of Commercial Securities Ltd as to the modus operandi of the Victorian office under his management. There was constant contact between the Head Office personnel and the Victorian Office by telephone, telex, letter and vocadex MAHER and DONNELLY attended the Victoria office regularly 11 reiation to the business operations. Employees of the Victoria office Battaglini and Lopes travelled to Head Office to check that files forwarded there were in order Head Office was involved in each acquisition supplying particulars of the purchasing company the office holders on acquisition and the address of the registered office on acquisition and organising the banking arrangerents the commission received by SILBERSHER was paid by Head Office 13 The activities of the Victoria office in respect of current year profit companies while under SILBERSHER'S control were 1 to obtain target companies to be acquired which was done by advertising in the financial press and contacting accountants. 2. Negotiate the purchase price in accordance with the guidelines laid down by Head Office on the basis of the fincneiral accounts supplied by the accountants for the compa-y being acquircd 3 Prepare the documentation in respect of the acquisition in accordance with advice from Head Office as to the acquisition entity the new office holders and the new registered office for the target company being purchased. 4 Prepare and forward a company acquisition form detailing the acquisition to Head Office for implementation of the transactions relating to settlement 5 Attend settlement and pay to the vendor shareholders the purchase price being the value of the target company's net assets less the commissicn charged obtained by way of a telegraphic transfer fron the Head Office on receipt of a cheque in favour of the organisation's banker company representing the cashed up value of the net assets of the target company This cheque was deposited at the bank where the settlement took place and telegraphically transferred 1ummediately to the Head Office branch. 6 Obtain and forward the target company's books and accounts to "ead Office. 7. Lodge the relevant documents required as a result of the acquisition at the Corporate Affairs Office and the Taxation office 14 At the end of these transactions the target company had been purchased by a MAHER organisation acquisition company and had been placed in a position where it could not meet its tax obligations. It had no funds Its only asset was a loan to an in-house banker company The loan was never repaid in any case and in fact the bank company was not in a financial position to be able to repay the loan. The target company was thus effectively worthless although 1t had an impending income tax liability in respect of 1ts current year profit. The MAHER organisation did not put the target company through any acrangement designed to annihilate the prospective income tax lurability on 1ts current year profit but simply purported to on sell the company by means of the sham transactions described in paragraphs 6-8 above The facts known by or apparent to SILBERSHER demonstrate that he acted dishonestly, knowing that the tax liability of the target company would not be paid 15 The 2 separate charges of cospiracy reflect the fact that the principals of Commercial Securities Ltd changed in approximately June 1977 when Lee Gabriel Hurley ceased to be an equity holder in the organisation Maher Donnelly Faint and Palmer of the Head Office organisation have bcen charged with the offences of conspiracy to defraud and face cormittal proceedings in the Brisbane Magistrates Court commencing on lé July 1984 HURLEY has been convicted and sentenced WOSS and 2 other West Australians SNOw and TOLHURST have been charged in Perth with offences of conspiracy to defcaud the Commonwealth and an application for their extradition to Queenslanusu on these charges has been listed for hearing in the Perth Magistrates' Court on 20 June 1980 0250G.DF'ds