Supreme Court New South Wales Medium Neutral Citation: R v Cranston (No 21) [2022] NSWSC 1616 Hearing dates: 17 November 2022 Date of orders: 25 November 2022 Decision date: 25 November 2022 Jurisdiction: Common Law - Criminal Before: Payne JA Decision: See paragraph [127] and Annexure B Catchwords: CRIMINAL PROCEDURE — Trial — draft legal directions to jury Legislation Cited: Corporations Act 2001 (Cth) Criminal Code Act 1995 (Cth) Taxation Administration Act 1953 (Cth) Cases Cited: Naumcevski v Deputy Commissioner of Taxation [2019] NSWCA 72 R v Chalabian (No 2) [2022] NSWSC 63 R v Cranston (No 2) [2020] NSWSC 1102 R v Cranston (No 6) [2020] NSWSC 1777 R v Cranston (No 7) [2020] NSWSC 1834 R v Cranston (No 9) [2021] NSWSC 1413 R v Cranston (No 10) [2021] NSWSC 1637 R v Cranston (No 11) [2022] NSWSC 167 R v Cranston (No 17) [2022] NSWSC 1522 R v Sharp [1994] QB 261 Category: Procedural rulings Parties: Crown Adam Michael Cranston (Accused) Lauren Anne Cranston (Accused) Dev Menon (Accused) Jason Cornell Onley (Accused) Patrick Willmott (Accused) Representation: Counsel: P McGuire SC with J Paingakulam and C Tran (Crown) J Stratton SC with H Blake (Adam Cranston) TD Anderson SC (Lauren Cranston) P Bruckner (Dev Menon) WR Johnson (Jason Onley) L Brasch (Patrick Willmott) Solicitors: Commonwealth Director of Public Prosecutions (Crown) One Group Legal (Adam Cranston) Greg Willis Criminal Defence Lawyer (Lauren Cranston) Hardinlaw (Dev Menon) Pure Legal (Jason Onley) The Defenders (Patrick Willmott) File Number(s): 2017/148697; 2017/148185; 2017/148776; 2017/149208; 2020/115291 Publication restriction: Not to be published other than to the parties until after the trials of each of the accused are completed. JUDGMENT 1. The trial of the five accused, Adam Cranston, Lauren Cranston, Dev Menon, Jason Onley and Patrick Willmott, commenced on 26 April 2022. 2. During the pre-trial history I case managed these proceedings. In that time, I heard and determined numerous applications dealing with various issues including pre-trial disclosure and the admissibility of evidence proposed to be led in these proceedings: see for example R v Cranston (No 2) [2020] NSWSC 1102; R v Cranston (No 6) [2020] NSWSC 1777; R v Cranston (No 7) [2020] NSWSC 1834; R v Cranston (No 9) [2021] NSWSC 1413; R v Cranston (No 10) [2021] NSWSC 1637; R v Cranston (No 11) [2022] NSWSC 167. 3. The trial has now been proceeding for almost seven months. The Crown case is closed and one accused, Mr Menon, has chosen to give evidence. He is being cross-examined. On present estimates made by the parties my summing up to the jury will not be required until January 2023. 4. In the course of the trial, I have sought to identify the legal directions sought and, to the greatest extent possible, settle those directions in advance of my summing-up. I have circulated a draft list of issues to be dealt with in my summing-up for comment by the parties. The most recent version of that list, circulated to the parties on 26 October 2022, contains all of the legal directions sought by the parties. That list is as follows: * Burden and standard of proof * Consider each defendant separately * Consider each count separately (guilt on one count not dependent on another) * Fact of plea of guilty by others * Electronic recordings as evidence * Transcripts of evidence vs transcripts of Exhibit R (MFI 6) * Ahern direction (Cranston (No 7)) * Mr Willmott – separate direction about alleged stealing or siphoning from OMNI companies * Admissions in the transcripts of Exhibit R (MFI 6) * Fact finding, barristers' questions and issues * Inferences * Circumstantial evidence * Expert evidence (only Celona in this category) * Section 165 warnings x 5 (give as one warning) * Duties of legal practitioner relating to crime/ Client legal privilege / trust accounts * Companies and directors/ Liquidation (refer to Ex A glossary) * Prior good character – no criminal convictions. * Taxes (state and federal) – only relevant taxes PAYG and GST * PAYG operation – obligation to withhold and remit * GST operation – obligation to charge / collect and remit * Elements of conspiracy to defraud * Elements of conspiracy to launder money > $1,000,000 * Election of accused not to give evidence and accused giving evidence * Summary of Crown and defence cases * Mechanics of verdict (including unanimous verdict) 1. All of the important issues addressed in this list have been circulated in draft and refined, following submissions by the parties. 2. On 17 November 2022, I marked for identification the latest of the most important draft directions which contained mark up by the parties: 1. MFI 121: Draft direction on the elements of Counts 1 and 2; 2. MFI 122: Draft direction on Goods and Services Tax (GST); 3. MFI 123: Draft direction on Pay as You Go Tax (PAYG); 4. MFI 124: Draft direction regarding the use of the words of the accused in electronic recordings; 5. MFI 125: Draft direction regarding the use the jury can make of guilty pleas; 6. MFI 126: Draft direction regarding companies, trusts, and trust accounts; 7. MFI 127: Draft introduction to taxes; 8. MFI 128: Draft direction on solicitor's obligations. 1. For ease of reference those MFI's (121-128) are together Annexure A to these reasons. The draft directions, in the form I propose to give them as a result of my consideration of the matters addressed by this judgment, are Annexure B to these reasons. 2. The parties made submissions on the first seven of these documents and their suggested changes to these draft documents on 17 November 2022. Submissions concerning the final document (Draft direction on solicitor's obligations) were postponed until Mr Menon's cross-examination is complete. Draft direction on elements of Counts 1 and 2 1. The directions about the elements of Counts 1 and 2 proved the most controversial. The elements of these offences were settled with the parties prior to the trial and the jury were given a document (MFI 3) containing those elements at the commencement of the trial. I will address below my reasons for making the changes to each paragraph of the draft directions where a change was suggested (Annexure A) compared to the final form of the directions (Annexure B). 2. The references to paragraph numbers are references to the paragraph numbers in the document in Annexure A. Paragraph 4 1. All parties agreed that the date of the alleged conspiratorial agreement in this paragraph be amended to reflect the dates in the indictment. This change should be made. Paragraph 5 1. Mr Bruckner submitted that the names of the accused in this paragraph should be in indictment order. I agree. This change should be made. Paragraph 6 1. All parties agreed that the date of the alleged conspiratorial agreement in this paragraph and the subheading above it be amended to reflect the dates in the indictment. This change should be made. Paragraph 7 1. The draft paragraph originally provided: "Now, the crime of conspiracy, the agreement, is a continuing offence. And if you are satisfied there are at least two parties who are parties to the agreement who are intent on carrying it out, the offence of conspiracy is being committed." 2. Mr Johnson originally submitted that between the words "out," and "the offence", the following should be inserted "and at least one party has committed an overt act pursuant to that agreement". 3. The Crown disagreed with the proposed addition on the basis that it was unnecessary and overcomplicated the paragraph, the purpose of which is to lead into the issues in the following paragraph. It submitted that the addition would improperly elevate the element of committing an overt act pursuant to the conspiratorial agreement, without mentioning the remaining elements. 4. In his oral submissions, Mr Johnson agreed that the addition may render the paragraph too confusing. He suggested that the first sentence of paragraph 7 remain, that the remainder be deleted, and that it be joined with paragraph 8. 5. I conclude that that Mr Johnson's suggested change in oral submissions should be made. All but the first sentence of the paragraph should be deleted. Paragraph 9 1. All parties agreed that the date of the alleged conspiratorial agreement in this paragraph be amended to reflect the dates in the indictment. This change should be made. 2. All parties agreed that a reference to "four of the accused" participating in the agreement during a specific period, from an earlier draft, should be deleted. They also agreed to the insertion of the phrase "at various times" after the words "participated in the agreement" to illustrate that the period of participation alleged against each accused is not necessarily the same. I conclude that this change should be made. 3. Mr Bruckner submitted that a final sentence in this paragraph should be included stating "In respect of Mr Menon, the Crown alleges he became involved in about February 2015". The Crown submitted that this addition focuses unfairly on one accused without making the same point in relation to all of them. 4. I reject the proposed addition suggested by Mr Bruckner. An addition of this kind tends to emphasise particulars rather than elements of the offence, which is the purpose of this direction. Paragraph 12 1. The Crown, Mr Bruckner and Mr Johnson made various uncontroversial suggested changes to this paragraph. The only substantive change was to alter the characterisation of the alleged agreement in the first element of Count 1 from an agreement to "create" or "operate" a payroll services company, to an agreement to not remit PAYG or GST obtained from clients of that company. This change was agreed to by Mr Bruckner and Mr Johnson. The suggested changes to this paragraph should be made. Paragraph 13 1. The Crown submitted that the phrase "the case of each accused" should be amended to read "the case against each accused", to be consistent with MFI 3. I conclude that the proposed amendment should be made as it emphasises the burden of proof which rests on the Crown. Paragraph 15 1. The second sentence of paragraph 15 stated "Now in this case the Crown submits that you can infer that each of the accused intended to give effect to their agreement based upon their conduct and statements in furtherance of the agreement". Mr Bruckner submitted that the phrase "statements in furtherance of the agreement" should be replaced with "words". The proposed amendment is sensible and should be made. Paragraph 17 1. The third sentence in this paragraph stated in draft: "You must be satisfied that what the particular accused and the remaining conspirators agreed to do was dishonest according to the standards of ordinary people and that it was known by the accused to be dishonest according to the standards of ordinary people". 2. The Crown submitted that the phrase "the remaining conspirators" should be replaced with the phrase "at least one other party to the agreement". I agree, as the relevant element does not require that the requisite intention be held by all conspirators. This change will be made. 3. Mr Bruckner proposed the insertion of the following phrase in brackets after the phrase "agreed to do": "(here, allegedly, to dishonestly cause a loss to the Commissioner of Taxation)". The Crown submitted that the inclusion of the word "dishonestly" was misleading. I agree. The inclusion of "dishonestly" here would not reflect the statutory language and create a circularity, wrongly causing the jury to consider whether dishonestly causing a loss was dishonest. I otherwise agree that Mr Bruckner's suggested change should be made. 4. I will also make the suggested change to split the infinitive "to dishonestly cause a loss" as it reflects the statutory language. Paragraph 18 1. Mr Bruckner submitted that the explanation of a "loss" should be amended from "a loss in property whether temporary or permanent" to a permanent loss in property only. The Crown submitted that Mr Bruckner's proposed deletion should be rejected, because the statutory definition of "loss" in s 130.1 of the Criminal Code Act 1995 (Cth) includes the phrase "temporary or permanent". 2. There was, following submissions, general agreement that the phrase "As a matter of law", be inserted before defining "loss" and that a final sentence be included: "In this case, the Crown alleges that the accused intended to cause a permanent loss to the Commissioner of Taxation." 3. The form of the accepted changes is included in Annexure B. Paragraph 19 1. The parties agreed that the phrase "Property includes a debt. A debt is a form of property" should be amended to "Property includes money". The was because the use of the word "debt" might create confusion in the jury, and that the Crown case is about the retention of money that ought to have been paid but was not. That change should be made. 2. The Crown also suggested consequential amendments to the paragraph which explained that the offence in Count 1 speaks of intention to cause a loss, not the actual causing of a loss. The remaining consequential changes to this paragraph proposed by the Crown should be made as they better reflect the Crown case. Paragraph 20 1. Mr Bruckner submitted that the phrase "but Ms Whiting explained that none of those mechanisms were pursued by Plutus Payroll or any of the second tier companies" should be deleted. The Crown submitted that the deletion should not be made as the phrase is factually accurate and necessary to put the preceding words in proper factual context. 2. I included the references to estimates in detail in this paragraph as I had understood Mr Bruckner to have earlier submitted that he wanted it made clear to the jury that the estimates in evidence (of much greater amounts than $105 million) were not relied upon by the Crown. I will delete the passage to which Mr Brucker now objects. Paragraph 21 1. The Crown submitted that the phrase "the remaining conspirators" should be replaced with the phrase "at least one other party to the agreement", as the relevant element does not require that the requisite intention be held by all conspirators. I agree. That change will be made. 2. Mr Bruckner suggested that the following words should be inserted in brackets after the words "agreed to do": "(here, allegedly, to not pay a portion of monies due to the Commissioner of Taxation)". He submitted that this amendment would reduce the risk of the jury reasoning, incorrectly, that their focus is on conduct they might regard to be dishonest, rather than on the relevant alleged dishonesty, being an agreement to cause a loss. He referred to the case of R v Sharp [1994] QB 261 at 276G-268G, especially the submission at 268B. 3. The Crown opposed the proposed addition. It submitted that the proposed change was unnecessary and repetitive. It also submitted that it highlighted aspects of a particular element in a paragraph which is dealing with other points. I agree with the Crown. The suggested inclusion would be likely to confuse the jury. 4. Mr Bruckner further submitted that the phrase "agreed to do … was dishonest according to the standards of ordinary people", should be amended to "agreed to do … was to dishonestly cause a loss according to the standards of ordinary people". The Crown opposed this proposed addition. It submitted that the original wording is to be preferred because dishonesty is the subject of the paragraph. I agree with the Crown. The suggested change would be confusing to the jury. 5. The Crown suggested that the word "unlawful" in the words "the essence of Count 1 is an agreement to do something, something that is unlawful" should be changed to "dishonest". That change will be made. The original wording tended to conflate illegality with dishonesty. 6. Mr Bruckner suggested the deletion of two sentences. The Crown opposed the deletion in relation to the first sentence and made suggested changes to the wording of the second sentence to reflect that what was agreed to, allegedly not paying the full amount of PAYG and GST owing to the ATO, rather than the agreement itself, was dishonest. I am satisfied that the sentences, as amended, should not be deleted as they provide a better explanation to the jury of the elements. 7. Mr Bruckner suggested that the words "in the circumstances" be inserted after the phrase "whether you are satisfied beyond reasonable doubt that" the relevant conduct was dishonest according to the standards of ordinary people. The Crown opposed this change, submitting that the additional words are unnecessary. I will not make the suggested change. I will emphasise to the jury throughout my remarks that it is the facts as they find them, namely all of the circumstances, which must be taken into account. To include the phrase here tends to distract from the purpose of the paragraph. Paragraph 23 1. Mr Bruckner suggested the inclusion of the words "that is, to not pay PAYG and GST payable to the ATO" after the words "agreed to do", and the inclusion of the words "in the circumstances" before the word "dishonest". The Crown opposed the additions, submitting that they were repetitive and unnecessary. 2. I will not include the proposed additions as they are repetitive and tend to confuse rather than clarify the direction to the jury. Paragraph 24 1. The third sentence in this paragraph was originally drafted as "You are being asked to infer from what you find the particular accused you are considering said or did that he or she knew that what he or she was doing was dishonest according to the standards of ordinary people." 2. Mr Bruckner submitted that the words "what he or she was doing was" should be replaced with the words "the agreement to not pay PAYG and GST to the ATO was, in the circumstances". The Crown suggested changes to Mr Bruckner's wording, namely that the words "what he or she was doing was" should instead be replaced with the words "causing the Commissioner of Taxation loss by not paying PAYG and GST was". 3. Mr Stratton SC submitted that the original draft is preferable because it better identifies the critical element being addressed for the jury. I will not make Mr Bruckner's or the Crown's suggested change, as the changes tend to obscure the element here being addressed, but rather have adopted the simpler form of words suggested by Mr Stratton SC. 4. The Crown submitted that the words "illegal or dishonest" in the final sentence should be amended to provide simply "dishonest". The other parties did not oppose that change. That change will be made. Paragraph 25 1. Mr Bruckner suggested an addition to this paragraph in the following terms: "In other words, if after considering all the evidence, you find that the Crown has not excluded the reasonable possibility that the accused whose case you are considering did not know that what he or she was doing was dishonest, you must find that accused not guilty". The Crown submitted, rather than the words "what he or she was doing", what should be included were the words "causing loss to the Commissioner of Taxation by the non-payment of GST and PAYG". It submitted that the dishonesty needs to attach to the thing that is the subject matter of the agreement. I agree for this reason that the Crown's change should be made to Mr Bruckner's draft, which in other respects will be adopted. 2. Mr Stratton SC submitted that the simpler form of words was much to be preferred. I have chosen to adopt Mr Stratton SC's submission as the complexity of these directions is already daunting for a jury. 3. Although repetitive, I accept that this is a critical aspect of the elements from the perspective of each of the accused and for that reason it deserves repetition here. Paragraph 26 1. Mr Johnson submitted that the word "(dishonesty)" in brackets should be inserted after the words "this element of the offence". He also submitted that the word "additionally" should be placed before "be satisfied that the particular accused intended". I will make those changes. 2. Mr Bruckner suggested amending the words "an agreement to do something with the intention of" to "an agreement to not pay PAYG and GST to the ATO with the intention of". The Crown opposed this change, submitting that it was repetitive and unnecessary. I agree with the Crown submission. The suggested change makes a complex direction more difficult to understand. 3. The Crown submitted that the words "and one other party" should be changed to "and at least one other party". I did not understand there to be any opposition to that suggestion and I propose to adopt it. Paragraph 28 1. The Crown sought to amend the words "… or Daniel Rostankovski, had" to "Daniel Rostankovski or unnamed others, had". These changes were not opposed. These changes should be made. The words "at least one" will also be added to the penultimate line. I did not understand there to be any opposition to that suggestion. Paragraph 29 1. The Crown proposed that the words "a particular accused" be amended to "the particular accused". It also submitted that the words "each of the alleged conspirators" be amended to "at least one of the alleged conspirators". These changes were agreed and will be made. 2. Mr Johnson proposed that the words "then you should also be satisfied" be amended to "then you would then also need to be satisfied". This change will be made. Paragraph 30 1. The Crown proposed that the words "part of the Commonwealth, which is" be added between the words "Commissioner of Taxation is" and "a Commonwealth entity". It submitted that these words reflected the language in the Criminal Code. This change was agreed and will be made. Paragraph 35 1. The Crown suggested various changes in the final sentence of this paragraph so that it better reflects the statutory language of the relevant offence. Those changes were agreed and will be made. Paragraph 37 1. All parties agreed that the date of the alleged conspiratorial agreement in this paragraph be amended to reflect the dates in the indictment. That change should be made. 2. The Crown submitted that references to the requisite belief in Count 2 should be amended to read "would be the proceeds of crime". Mr Anderson SC, who had earlier suggested different wording, was content with the Crown change. No other party raised any objection and the change will be made. Paragraph 38 1. All parties agreed that the date of the alleged conspiratorial agreement in this paragraph and the subheading above it be amended to reflect the dates in the indictment. I conclude that this change should be made. 2. The Crown submitted that references to the requisite belief in Count 2 should be amended to read "would be the proceeds of crime". As the parties agreed this change will be made. Paragraph 40 1. All parties agreed that the date of the alleged conspiratorial agreement in this paragraph be amended to reflect the dates in the indictment. I conclude that this change should be made. 2. All parties agreed that a reference to "four of the accused" participating in the agreement during a specific period, from an earlier draft, should be deleted. They also agreed to the insertion of the phrase "at various times" after the words "participated in the agreement" to illustrate that the period of participation alleged against each accused is not necessarily the same. This change should be made. Paragraph 43 1. The Crown submitted that references to the requisite belief in Count 2 should be amended to read "would be the proceeds of crime". All parties agreed. That change will be made. Paragraph 44 1. The Crown submitted that references to the requisite belief in Count 2 should be amended to read "would be the proceeds of crime". All parties agreed. That change will be made. Paragraph 46 1. Mr Bruckner submitted that the phrase "statements in furtherance of that agreement" should be amended to read "words". This change will be made. 2. The Crown submitted that the words "formed the agreement" should be amended to "entered into the agreement" to reflect the relevant statutory language. This change was agreed and will be made. Paragraph 47 1. The Crown submitted that the words "carry out their agreement" should be amended to "enter into their agreement" to reflect the relevant statutory language. This change was agreed and will be made. Paragraph 49 1. The Crown proposed the addition of two sentences in this paragraph. It submitted that those additions were proposed out of fairness to the accused and to be consistent with the case as opened and the submissions made on a separate stay application: see R v Cranston (No 17) [2022] NSWSC 1522. Mr Johnson submitted that the words "the Crown alleges" should be inserted before the word "they" in the Crown's proposed addition to make it clear that there is an allegation. The change as amended will be made. Paragraph 51 1. The Crown suggested various amendments to this paragraph to reflect the statutory language in the Criminal Code. Most substantially, it submitted that references to "intention" should be replaced with references to "knowledge or belief". Those changes were agreed and will be made. Paragraph 53 1. The Crown proposed the addition of two sentences in relation to the meaning of a non-trivial offence. It submitted that those additions were consistent with MFI 3. These changes were agreed and will be made. Paragraph 55 1. Mr Stratton SC proposed the addition of a new paragraph between the existing paragraphs 54 and 55: "If, after considering all the evidence, you find that the Crown has not proved beyond reasonable doubt that the accused whose case you are considering knew or believed that the money to be dealt with would be the proceeds of crime, you must find that accused not guilty". That change will be made. Whilst it is repetitive, I accept that his element is critical from the perspective of each accused and they are each entitled to have this matter emphasised. Paragraph 56 1. The Crown submitted that, in the final sentence, the words "at least" should be placed between the words "committed" and "one". This was agreed and will be made. Paragraph 58 1. The Crown submitted that the words "money would be or was dealt with" should be amended to "money that would be dealt with". It also submitted that the words "what the Crown says is" should be amended to "what the Crown says was". These changes were agreed and will be made. Draft GST direction 1. I will address below those paragraphs of the draft direction where marked up suggestions for amendment were made by the parties. Paragraphs 6 to 8 1. Mr Stratton SC submitted that both paragraphs 7 and 8 should be amended to begin "'If the amount of a person's or an entity's ITC is lower than the GST which they owe". The Crown agreed that references to only "a person" or "an entity" in paragraphs 6 to 8 should be amended to read "a person or entity". It opposed any amendment to the word "higher" in paragraph 8. Mr Stratton SC agreed with this submission. Those changes will be made. Paragraph 9 1. Mr Bruckner submitted that the words ", if it has lodged a return or been assessed" should be inserted after the word "itself". I am persuaded this change should be made. 2. The Crown submitted that the words "the GST that is charged and collected to the Commissioner" should be amended to "the assessed GST to the Commissioner". It also submitted that the words "the amount of GST" should be amended to "the assessed amount of GST". These changes were agreed and will be made. Draft PAYG direction 1. I will address below those paragraphs of the draft direction where marked up suggestions for amendment were made by the parties. Paragraph 1 1. Mr Bruckner submitted that the words "the entity which makes the payment of salary or wages" should be amended to "the entity which pays salary or wages" to pick up the meaning of "pay". This change will be made. Paragraph 2 1. Mr Bruckner submitted that a final sentence should be inserted into this paragraph: "This might not necessarily be the entity from whose bank account workers are paid". Mr Bruckner submitted that these words are appropriate based principally on Naumcevski v Deputy Commissioner of Taxation [2019] NSWCA 72 and cases referred to in that decision. The Crown opposed the addition. It submitted that the cases Mr Bruckner referred to are not authority for the propositions he makes. 2. I do not propose to include the sentence. It seems to me to raise a potentially confusing issue, the relevance of a bank account used to pay a worker, which no party submitted arose in this case. The jury should not be invited to consider questions about the operation of the PAYG tax system which do not arise in this case. Paragraph 3 1. Mr Bruckner submitted that this paragraph should be deleted in its entirety. He submitted that the point it sought to make was dealt with adequately by paragraph 2. He also repeated his above submission that it is not settled law that the obligation to withhold PAYG attaches to the ultimate payer of the worker whether or not the employer employs the payee. 2. The Crown opposed this deletion and submitted that the propositions put by Mr Bruckner in relation to it are not correct. 3. I conclude that the paragraph should not be deleted. The issue raised, the relevance of the bank account used to make payment to a worker, does not arise in this case and it is likely to confuse the jury to direct attention to it. Paragraph 4 1. Mr Bruckner proposed the deletion of this paragraph in its entirety. He submitted that the Crown case is not that there was a failure to withhold, but rather a failure to pay, and that the directions are sufficient without this sentence. This change will be made as it better reflects the Crown case. Paragraph 6 1. Mr Bruckner submitted that the words "fails to comply with the law and" should be deleted because the relevant point is already made in paragraph 2. He also submitted that the words ", in respect of any unpaid and overdue amounts" should be deleted because they substantially repeat the preceding words. These changes will be made. 2. The Crown submitted that an additional sentence should be added to the end of the paragraph. This addition was not opposed and will be made. Paragraph 7 1. Mr Bruckner submitted that the words ", however, the entity may challenge the correctness of the estimate in a court or tribunal" should be deleted. This change will be made. 2. The Crown submitted that an additional sentence should be added to the end of the paragraph. This addition was not opposed and will be made. Paragraph 8 1. Mr Bruckner proposed that the first sentence in this paragraph be deleted. He submitted that the last sentence of this paragraph sufficiently states the purpose of the estimates regime, to the extent it needs to be stated. I agree. This change will be made. Draft direction regarding the use of words by the accused on electronic recordings 1. I will address below all of these paragraphs of the draft where marked up suggestions for amendment were made. Paragraph 8 1. The Crown submitted that the words "are entitled to" should be amended to the word "should". This change was not opposed and will be made. Paragraph 9 1. The Crown submitted that the word "that" should be inserted between the words "accused" and "you". This change was not opposed and will be made. Paragraph 10 1. The Crown proposed the addition of the following words in brackets after the phrase "the recorded evidence": "(except for Exhibit JJ, the record of interview with Mr Menon, which is admissible against him only)". This change was not opposed and will be made. Draft direction regarding use the jury can make of guilty pleas 1. No submission was made by any party that the amended version which had been circulated should not be adopted and I propose to do so. Draft direction regarding companies, trusts and trust accounts 1. I will address below all of these paragraphs of the draft where marked up suggestions for amendment were made. Paragraph 3 1. The Crown sought the amendment of the words "sued in this Court or one of the courts below us" to "sued in court". This change was not opposed and will be made. Paragraph 4 1. The Crown proposed the insertion of the words "conferred by legislation" after the words "special powers". This change was not opposed and will be made. 2. Mr Bruckner submitted that the words "director of the company requiring the director to pay" should be amended to read "director of the company, a person who acted in the position of a director or a person whose wishes the directors are accustomed to acting in accordance with requiring the person to pay". He referred to s 269-15(1) in Sch 1 of the Taxation Administration Act 1953 (Cth), which he submitted picks up the definition of director in s 9 of the Corporations Act 2001 (Cth). The Crown opposed this change, submitting that it is unnecessary given that in this case Director Penalty Notices were issued to the named directors only. I will not make the suggested change as it introduces unnecessary complexity in an already complex series of directions. It is unnecessary for the jury to consider the issue here. 3. The Crown proposed certain essentially formal amendments which were agreed and will be made. Paragraph 10 1. The Crown submitted that the words "at the moment," should be deleted. This change was not opposed and will be made. Paragraph 12 1. The Crown submitted that the final sentence in this paragraph should be deleted. This change was not opposed and will be made. Paragraph 14 1. The Crown submitted that a reference to its definition of a "phoenix operation" in its aide-memoire be included in this paragraph. This change was not opposed and will be made. Paragraph 15 1. Mr Bruckner proposed the insertion of a new second sentence stating "A public company requires a minimum of 3 directors, has an external auditor and can raise capital from the public by issuing shares". This insertion will be made. 2. The Crown proposed the deletion of the final sentence in the paragraph. There was no objection to this deletion and it will be made. Paragraph 17 1. The Crown submitted that the words "and these company constitution rules allow profits to be taken" should be deleted. This change was not opposed and it will be made. 2. Mr Bruckner proposed that the final two sentences of this paragraph be deleted. He submitted that the introductory language to the first sentence was problematic, and the assertion in the second sentence that Plutus Payroll and the second tier companies "had no formal connection other than to process payment" goes too far. The Crown objected to this deletion. It submitted that it relies on the appearance of an arms-length relationship between Plutus and the second-tier companies. 3. I agree with Mr Bruckner that the introductory words to those sentences, "Now, one of the features of these arguments" should be deleted. In relation to the remaining words in those sentences, the direction will remain as it addresses an issue in the case and is legally correct. Paragraph 18 1. Mr Bruckner submitted that the words "at annual general meetings by big companies" should be deleted. This change will be made. Paragraph 19 1. Mr Bruckner submitted that this paragraph should be deleted in its entirety. The Crown objected to this deletion. It submitted that the role of directors and their registration with ASIC is directly relevant and warrants explanation. 2. I conclude that this issue is relevant for the jury to understand and the paragraph should remain. Paragraph 20 1. Mr Bruckner submitted that this paragraph should be deleted in its entirety. The Crown objected to this deletion. It submitted that the role of directors and their registration with ASIC is directly relevant and warrants explanation. 2. I conclude that this issue is relevant for the jury to understand and the paragraph should remain. Paragraph 21 1. The Crown suggested some minor amendments to simplify this paragraph. These changes were not opposed and will be made. Paragraph 22 1. Mr Bruckner submitted that the words "the equitable owner or as the name suggests the person who is" should be deleted. This change will be made. 2. Mr Bruckner sought to insert the following final sentences: "A person who establishes a trust is called the Settlor. That person cannot benefit. It is often an accountant or a lawyer". I will include the first sentence but not otherwise make this change. I will address the issue in paragraph 24 to which I now turn. Paragraph 24 1. Mr Bruckner sought to include an additional final sentence in this paragraph stating "Mr Menon was Settlor, which meant he and his relatives were people who could never benefit under the trust". 2. The Crown submitted that rather than stating certain individuals "could never benefit", reference should instead be made to the specific terms of the trust deed considered here, the Sutherland Shire Property Trust. 3. I will make changes to paragraph 24 to make clear that Mr Menon and his relatives could not benefit from the Sutherland Shire Property Trust. Paragraphs 25 to 28 1. Mr Bruckner submitted that in paragraph 25 the words "named client and only with the express permission of the client" should be amended to read "named client or with the express permission of the client or someone authorised by the client". 2. The Crown proposed the deletion of the final two paragraphs, and the creation of three new paragraphs after the words "on behalf of a client" in paragraph 25. Its proposed paragraphs deleted the proposed amendment of Mr Bruckner. It submitted that its proposed paragraphs were based largely on the directions given by Johnson J in R v Chalabian (No 2) [2022] NSWSC 63. 3. I conclude that the Crown's proposed changes should be made. Johnson J's wording in Chalabian (No 2) provides the most useful guide to what is necessary for the jury to understand. Conclusion 1. For the foregoing reasons I propose to give legal directions in accordance with Annexure B to these reasons. I will, however, give the parties a final opportunity to suggest changes to these directions prior to my delivering the summing up. If I have misunderstood a submission or not correctly reflected that submission in the form of direction contained in Annexure B I will hear the parties before commencing my summing up to give them an opportunity to make a further submission on those points. Annexure A Annexure B ********** Amendments 22 March 2023 - Publication restriction lifted. Names of witnesses redacted. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 March 2023