New South Wales Supreme Court CITATION : R (Cth) v Petroulias (No. 30) [2007] NSWSC 1119 HEARING DATE(S) : 2 October 2007, 3 October 2007, 4 October 2007, 5 October 2007 JUDGMENT DATE : 8 October 2007 JUDGMENT OF : Johnson J at 1 DECISION : The applications for verdicts by direction with respect to the first and second counts are refused. CATCHWORDS : CRIMINAL LAW - trial by jury - application for verdict by direction - first count alleges defrauding the Commonwealth contrary to s.29D Crimes Act 1914 (Cth) - elements of causation, dishonest means and deprivation - Crown case that revenue put at risk - what is required for Crown to establish that revenue was put at risk - second count alleges agreeing to receive benefit on understanding that exercise of duty would be affected contrary to s.73 Crimes Act 1914 (Cth) - application for verdicts by direction refused - counts under s.29D and s.73 left to jury Crimes Act 1914 (Cth) Evidence Act 1995 LEGISLATION CITED : Income Tax Assessment Act 1936 (Cth) Fringe Benefits Tax Assessment Act 1986 (Cth) Jury Act 1977 Doney v The Queen [1990] 171 CLR 207 R v JMR (1991) 57 A Crim R 39 Director of Public Prosecutions (Cth) v Neamati [2007] NSWSC 746 R (Cth) v Petroulias (No. 1) [2006] NSWSC 788 R (Cth) v Petroulias (No. 29) [2007] NSWSC 1005 Royall v The Queen (1991) 172 CLR 378 Wills v Petroulias (2003) 58 NSWLR 598 R v Petroulias (2005) 62 NSWLR 663 Peters v The Queen (1998) 192 CLR 493 CASES CITED : Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Limited [2007] FCAFC 16 Wai Yu-Tsang v The Queen [1992] 1 AC 269 Pearce v R (2005) 216 ALR 690 Petroulias v R [2006] NSWCA 415 R v Allsop (1976) 64 Cr App R 29 CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397 Essenbourne Pty Ltd v Commissioner of Taxation [2002] FCA 1577 Walstern Pty Ltd v Commissioner of Taxation [2003] FCA 1428 Spotlight Stores Pty Ltd v Commissioner of Taxation [2004] FCA 650 Pridecraft Pty Ltd v Commissioner of Taxation [2004] FCAFC 339 PARTIES : Regina (Commonwealth) (Crown) Nikytas Nicholas Petroulias (Accused) FILE NUMBER(S) : SC 2002/93 COUNSEL : Mr P Hastings QC; Mr C Hoy (Crown) Mr R Sutherland SC; Mr G Walsh (Accused) SOLICITORS : Commonwealth Director of Public Prosecutions (Crown) Coadys (Accused) LOWER COURT DATE OF DECISION : --- LOWER COURT MEDIUM NEUTRAL CITATION : --- IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION CRIMINAL LIST JOHNSON J 8 October 2007 2002/93 Regina (Cth) v Nikytas Nicholas Petroulias (No. 30) JUDGMENT (On application by Accused for verdict by direction on First and Second Counts) 1 JOHNSON J: At the conclusion of the Crown case, the Accused sought a verdict by direction with respect to two of the three counts upon which he stands trial. The indictment contains the following counts: (a) Count 1 - Between about 1 September 1997 and 27 February 1999, Nikytas Nicholas Petroulias did defraud the Commonwealth, in that while an officer of the Australian Taxation Office, he did put the revenue of the Commonwealth at risk by causing Private Binding Rulings and Advance Opinions to issue to taxpayers, by dishonest means (s.29D Crimes Act 1914 (Cth) - maximum penalty - 10 years' imprisonment); (b) Count 2 - Between about October 1997 and February 1999 at Sydney, New South Wales and elsewhere, Nikytas Nicholas Petroulias, then a Commonwealth officer with the Australian Taxation Office, did agree to receive a benefit for himself, namely money, on an understanding that the exercise by him of his duty as a Commonwealth officer would be affected (s.73 Crimes Act 1914 (Cth) - maximum penalty - two years' imprisonment); (c) Count 3 - Between about June 1998 and April 1999 at Sydney, New South Wales, Nikytas Nicholas Petroulias, then being a Commonwealth officer with the Australian Taxation Office, did publish to Richard Llewellyn Morgan, a person to whom he was not authorised to publish, documents which came into his possession by virtue of him being a Commonwealth officer, and which it was his duty not to disclose (s.70 Crimes Act 1914 (Cth) - maximum penalty - two years' imprisonment). 2 Application was made for a verdict by direction with respect to the first and second counts. No application was made concerning the third count. 3 On 5 October 2007, I announced orders refusing the application concerning both the first and second counts (T3495). This judgment contains my reasons for those orders. 4 Both the Accused and the Crown furnished detailed written submissions concerning the application. In addition, extensive oral submissions were made by counsel on 2, 3 and 4 October 2007 (T3337-3494). For the purpose of this judgment, reference will be confined to the matters which are critical to my determination. Relevant Legal Principles 5 The test to be applied by a trial judge on an application for verdict by direction in a criminal jury trial is not in doubt. It is the duty of a trial judge to direct a verdict of not guilty if the evidence cannot sustain a guilty verdict or if there is no evidence upon which a jury could convict: Doney v The Queen [1990] 171 CLR 207 at 212. If there is evidence (even if tenuous or inherently weak or vague) which can be taken into account by the jury in its deliberations and that evidence is capable of supporting a verdict of guilty, the matter must be left to the jury for its decision. A verdict of not guilty may be directed only if there is a defect in the evidence such that, taken at its highest, it will not sustain a verdict of guilty: Doney v The Queen at 214-215. 6 In a case based on circumstantial evidence, at the close of the prosecution case, the Crown need only show that an inference consistent with guilt reasonably arises on the evidence. The Crown does not have to prove that this was the only inference that arose or that there was no inference arising from the evidence inconsistent with guilt: R v JMR (1991) 57 A Crim R 39 at 43-44. It does not matter at this point how tenuously that inference arises provided that it was reasonably open on the evidence: Director of Public Prosecutions (Cth) v Neamati [2007] NSWSC 746 at [14]. First Count - The s.29D Crimes Act 1914 (Cth) Charge 7 The Accused submits that a verdict of acquittal ought be directed concerning the first count by reason of the failure of the Crown to adduce evidence to satisfy the relevant legal test concerning the elements of causation, dishonest means and deprivation. 8 In R (Cth) v Petroulias (No. 1) [2006] NSWSC 788, I rejected an application by the Accused for a permanent stay of the first count upon the basis that it was foredoomed to fail by reference to the elements of causation, dishonest means and deprivation. The present application falls to be considered by reference to the evidence adduced in the trial which commenced on 13 June 2007. That said, a number of submissions made on this application repeat arguments advanced for the purpose of the stay application refused in R (Cth) v Petroulias (No. 1). Some reference will be made to that judgment in that which follows. The Element of Causation 9 The Accused makes a short submission on this application concerning the element of causation. The Accused points to the Crown case that the Accused caused private rulings and advance opinions to issue and to the Crown submission at the 2005 trial that Mr Emmanuel Aivaliotes had, in effect, been the "puppet" of the Accused in this respect. Mr Sutherland SC refers to evidence of Mr Aivaliotes at the present trial of his professional background and qualifications, and his express disavowal of the concept of being a "puppet" of the Accused. Mr Sutherland SC submits that Mr Aivaliotes asserted in evidence that he was responsible for issuing the relevant rulings and opinions. 10 In order for the Crown to succeed on this element, Mr Sutherland SC contends that the Crown must invite the jury to reject the sworn testimony of its own witness and that, in these circumstances, the evidence is not capable of supporting a finding beyond reasonable doubt on the first count. 11 The Crown submits that the evidence points to a course of conduct on the part of the Accused inside and outside the Australian Taxation Office ("ATO") which demonstrates a clear evidentiary foundation for the element of causation. It is said that the essential indicia of causation in this case is control exercised by the Accused. Detailed written and oral submissions were made pointing to evidence upon which the Crown relies on the element of causation. 12 Given the short submission advanced by the Accused on this element, I may dispose of this part of the application briefly. I am satisfied that the evidence identified in paragraphs 1-11 of the Crown's written submissions dated 2 October 2007 establishes a clear foundation whereby the jury could be satisfied beyond reasonable doubt that the Accused caused the relevant advance opinions and private rulings to issue. 13 With respect to the evidence of Mr Aivaliotes relied upon by the Accused, it is relevant to note that, given significant changes in his evidence from that given at earlier times, the Crown was granted leave under s.38 Evidence Act 1995 to cross-examine Mr Aivaliotes on a number of topics, including his evidence concerning the extent to which he exercised his own independent judgment in issuing relevant advance opinions and private rulings or acted, in effect, at the direction of the Accused: R (Cth) v Petroulias (No. 29) [2007] NSWSC 1005 at [29]-[43], [45]-[62], [81]. 14 The evidence relied upon by the Crown concerning this element includes direct evidence and circumstantial evidence. As I observed in R (Cth) v Petroulias (No. 29) at [81], the evidence given by Mr Aivaliotes at the 2005 trial is capable of demonstrating a process whereby the Accused, in effect, directed action favourable to those with whom the Accused had an association, using Mr Aivaliotes as the formal face of the ATO. He has been cross-examined by the Crown concerning this evidence at the present trial and it will be for the jury to determine which evidence it accepts. 15 Applying the principles referred to at [5]-[6] above, I am satisfied that the evidence is capable of demonstrating beyond reasonable doubt that the actions of the Accused amounted to a substantial or significant cause of the issue of the favourable rulings and opinions: Royall v The Queen (1991) 172 CLR 378 at 411. It will be a matter for the jury to determine whether it is so satisfied. 16 I reject the submissions of the Accused concerning the element of causation. Element of Dishonest Means 17 The Accused submits that the first count should be withdrawn from the jury because there is no evidence of dishonest means upon which the jury could convict the Accused. 18 The Accused submits that a distinction is to be made between general evidence of dishonesty and evidence that the Accused caused the rulings and opinions to issue by dishonest means. It is submitted that dishonesty cannot be dishonesty in a general sense (involving any conflict of interest with the Accused's employer) but must relate to the issuing of the impugned rulings and opinions. 19 Mr Sutherland SC submits that there is no evidence that the fact of issuing, or the contents of any issued ruling or opinion, would have been different if the fact of any association between the Accused and Mr Panos and others had been declared to the ATO. The Accused points to evidence of Mr Charles, Mr Forsyth and Mr Aivaliotes to the effect that it was known that the Accused was acquainted with Mr Panos. 20 Further, the Accused submits that the failure by the Crown to adduce any evidence that any relevant factual statement, opinion of the law or the decision to issue a ruling or opinion would have been different constitutes a fatal defect regarding this element. With respect to the alleged concealment of the fact of rulings and opinions being issued, the Accused submits that the schedule (Exhibit C94) demonstrates that almost all of the issued rulings were retained on the ATO computer system or within copy files retained within the ATO. 21 With respect to rulings concerning non-complying superannuation funds ("NCSF"), the Accused submits that rulings were consistent with the ATO view at the time. 22 The Crown submits that there is ample evidence, in the Doney v The Queen sense, to support the element of dishonest means in the first count. The Crown relies upon submissions advanced and accepted in the first pre-trial application (R (Cth) v Petroulias (No. 1) at [219]-[225]) which, the Crown submits, remain applicable to the evidence adduced in the present trial. 23 In answer to the specific submission advanced in the present trial concerning the existence of some knowledge on the part of persons within the ATO of an association between the Accused and Mr Panos, the Crown emphasises that none of the witnesses indicated any knowledge of the involvement by the Accused in the marketing of the Productivity Incentive Corporation ("PIC") schemes. Insofar as the Accused relies upon the evidence of Mr Aivaliotes on this issue, the Crown points to the fact that Mr Aivaliotes has changed his account in this trial in a manner which attracted a grant of leave to the Crown to cross-examine him under s.38 Evidence Act 1995 (R (Cth) v Petroulias (No. 29) at [64]-[67], [83]). 24 The Crown submits that the jury would be entitled to find on the evidence that a fundamental conflict of interest existed between the Accused and the ATO in connection with the issue of the rulings and opinions which are subject to the first count. Further, the Crown submits that there is ample evidence of concealment of the rulings by the Accused and his deception of ATO officers who approached him, in due course, seeking knowledge of the rulings and opinions. The Crown submits that the concealment of the rulings was of practical significance because it enabled the Accused to continue to have them issued without queries arising from other areas of the ATO. 25 The Crown submits that it is not relevant to this ingredient of the offence to consider whether the rulings were correct. 26 The submissions of the parties on this element were brief and my conclusions may likewise be stated shortly. 27 The Crown case concerning this element is based upon direct evidence and inferences to be drawn from the evidence. My conclusions in R (Cth) v Petroulias (No. 1) at [226]-[227], [231]-[232] remain applicable in this application. Having applied the test referred to in [5]-[6] above, I am satisfied that there is evidence capable of establishing the element of dishonest means. In my view, it would be open to the jury, on the evidence, to reason in the following way (R (Cth) v Petroulias (No. 1) at [231]): "There was evidence of dishonesty on his [the Accused's] part. The acts pointing to dishonesty did not exist in a factual vacuum. The context in which it occurred involved the Accused having a significant interest on both sides of the fence of the relevant applications. On one side of the fence, he was assisting the applicants in the drafting and preparation of relevant documents. On the other side of the fence, he was playing a direct supervisory role with respect to Mr Aivaliotes, with evidence adduced at the first trial capable of supporting a submission that he exercised a significant influence over Mr Aivaliotes with respect to the issuing of the rulings. He did so at a time when he occupied a most senior position within the ATO. The existence of a conflict of interest and the non-disclosure of that interest is pertinent. The functions being exercised by Mr Aivaliotes, under the Accused's supervision, related directly to the subject matter of that conflict of interest. It is capable of constituting the type of evidence of dishonest means identified in Peters v The Queen [at 529 [84]] , Spies v The Queen [at 631 [80]] and R v Iannelli [at 249 [7]] . This is not a case where there was a technical or theoretical conflict of interest between the Accused's formal position within the ATO and the tasks being carried out by persons in a remote part of the ATO far removed from the Accused. The functions of the ATO which were being exercised under the supervision of the Accused related directly to his private and undisclosed interest." 28 It is open to the jury to conclude that the Accused caused the relevant rulings and opinions to issue by dishonest means. Whether the jury is so satisfied to the criminal standard is, of course, a question of fact for the jury to decide. 29 I do not consider that the Accused's submission concerning the NCSF rulings bears upon the element of dishonest means. 30 I reject the Accused's submission concerning the element of dishonest means. The Element of Deprivation 31 Once again, the element of deprivation is a focal point for submissions in the criminal proceedings against the Accused. In R (Cth) v Petroulias (No. 1) at [100], I observed that this element had been subjected to an "intense level of judicial scrutiny" by the Court of Appeal and the Court of Criminal Appeal. That process of judicial scrutiny continues on the present application. 32 In R (Cth) v Petroulias (No. 1) at [100]-[174], I considered and rejected a defence submission that the first count was foredoomed to fail by reference to the element of deprivation. 33 In a series of written submissions, the Accused has developed an argument that the first count ought be withdrawn from the jury's consideration and a verdict of acquittal directed by reference to the element of deprivation. The Crown submits that a clear foundation in fact and law exists for this count to be left to the jury. 34 The detailed arguments for the Accused and the Crown appear in the written and oral submissions made on the present application. For present purposes, I will reduce to their essential elements the arguments advanced on behalf of the Accused and the Crown. Submissions of the Accused 35 Mr Sutherland SC emphasises that the first count alleges a substantive fraud under s.29D, and not an attempt or conspiracy to defraud. A complete, and not inchoate, fraud is alleged. Accordingly, it is necessary for the Crown to prove that someone was defrauded, in this case it being said that the Commonwealth (through the Commissioner of Taxation) was defrauded: Wills v Petroulias (2003) 58 NSWLR 598 at 601 [8]; R v Petroulias (2005) 62 NSWLR 663 at 676 [45]-[46]. 36 Mr Sutherland SC acknowledges that the Crown need not prove actual loss. The Court of Criminal Appeal identified the Crown's allegation of deprivation against the Accused as being that he put the money or property of another person at risk (actual risk of loss of revenue), being fraud under the so-called second category in Peters v The Queen (1998) 192 CLR 493 at 508 [30]: R v Petroulias at 667 [11]. 37 Mr Sutherland SC points to my observations in R (Cth) v Petroulias (No. 1) at [94]-[95] that a criminal trial is conducted as adversarial litigation, involving an accusatorial process, and that it remains for the Crown to prove the element of deprivation in the first count and to formulate that count, and to adduce evidence in support of that element, whatever stance is adopted by the Accused. 38 Mr Sutherland SC submits that certain passages in the Crown's opening address in the present trial indicate that the Crown is fluctuating between a fraud case based upon the second and third Peters categories. Moreover, it is submitted that the Crown seeks to depart from particulars provided in advance of the 2005 trial and seeks to advance a different case on the element of deprivation on this application to that considered by the Court of Criminal Appeal in 2005. The Accused submits that the decision of the Court of Criminal Appeal assists the Accused, and not the Crown, on the present application. 39 In the circumstances of this case, the Accused submits that the Crown must establish, in support of the element of deprivation: (a) that the Commissioner was bound by the rulings; (b) that the Commissioner was thereby precluded from pursuing an arguable case to the contrary of the views of the law expressed in the rulings; and (c) that the revenue of the Commonwealth was thereby put at risk. 40 The Accused submits that a finding that the Commissioner was bound by the rulings is not open on the evidence in the trial because of one or more of the following: (a) before a ruling issued under s.170BB Income Tax Assessment Act 1936 (Cth) binds the Commissioner of Taxation, it is necessary that arrangements actually be put in place in accordance with the ruling, and that it be demonstrated that the law applies to the rulee in respect of the relevant year in relation to that arrangement in a different way for the purposes of s.170BB(3) - in the present case, the evidence does not establish that arrangements were put in place nor that the law would apply to the rulee in a different way - thus no binding ruling had been made; (b) if the ruling had not issued bona fide, it was not valid and therefore could not bind the Commissioner of Taxation; (c) the evidence indicated that an arrangement which was the subject of a s.170BB ruling could still be the subject of tax audit and the issue of an amended assessment - the issue of a ruling did not preclude these administrative and investigatory steps on the part of the ATO and, as a result, the Commissioner was not bound by the ruling; (d) the general anti-avoidance provisions in Part IVA Income Tax Assessment Act 1936 (Cth) (and their equivalent in s.67 Fringe Benefits Tax Assessment Act 1986 (Cth) ) were capable of applying to a s.170BB private ruling - accordingly, the ruling did not bind the Commissioner of Taxation in circumstances where Part IVA (or s.67) was applicable. 41 Mr Sutherland SC points to the ATO media release dated 19 May 1999 (Exhibit D87) in support of this submission. By that time, an ATO investigation had been underway for some months. Although the Commissioner, in that release, stated that the ATO was legally bound to stand by the rulings and administratively bound to adhere to advance opinions, it was said that the rulings and opinions were unlikely to have practical application because the arrangements which had been seen had not been implemented according to the facts presented. Mr Sutherland SC submits that this evidence supports the submission that the Commissioner was not bound by the rulings (and opinions) so that the revenue was not put at risk. 42 Mr Sutherland SC submits that it was wrong in law and fact to assert that a private ruling bound the Commissioner of Taxation. He submits that the Crown falls at the first hurdle in its attempt to establish actual risk of loss of revenue. Rather than being bound by a private ruling, the Accused submits that the Commissioner of Taxation could take steps, at a number of points, to overcome the existence and operation of the private ruling. Reference was made to the evidence of several Crown witnesses concerning audit (and the issue of an amended assessment), possible action under Part IVA (or s.67) and challenge to validity of rulings. Mr Sutherland SC points to the Crown's characterisation of the private rulings, opening to the jury in this case, as being not bona fide, or being made for the purpose of tax avoidance, as demonstrating that the rulings were always vulnerable to challenge by the ATO and thus not binding on the Commissioner of Taxation. This argument was developed in a number of different ways, all of which culminated in the same proposition. 43 Even if the rulings could be said to bind the Commissioner of Taxation, Mr Sutherland SC submits that there is no evidence to demonstrate that the Commissioner was precluded from pursuing an arguable case to the contrary of that contained in the rulings. 44 With respect to any arguable case concerning fringe benefits tax, Mr Sutherland SC submits that the line of authority culminating in the decision of the Full Federal Court in Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Limited [2007] FCAFC 16 (Exhibit D74) demonstrated that no arguable case was available to the Commissioner on this issue. Further, Public Ruling TR1998/5 (Exhibit D66) was withdrawn on 27 June 2007 (Exhibit D82). In these circumstances, the Accused submits that no available argument with any possibility of success could be advanced by the Commissioner in support of the applicability of fringe benefits tax. 45 With respect to deductibility, Mr Sutherland SC submits that the question of deductibility cannot be dealt with in a general or generic sense and needs to be examined on a case-by-case basis. In circumstances where the Crown has adduced no evidence pointing to deductibility following a case-by-case examination of the relevant rulings, the Accused submits that the Crown has failed to adduce any evidence of the existence of an arguable case on this aspect. 46 With regard to NCSF rulings, the Accused submits that the evidence points to rulings having issued which were consistent with the ATO view which did not change until March 1999. 47 To the extent that the Crown sought to rely upon Wai Yu-Tsang v The Queen [1992] 1 AC 269 (and the authorities cited therein) and Pearce v R (2005) 216 ALR 690, Mr Sutherland SC emphasises that these cases involved charges of conspiracy to defraud or offences other than a charge of substantive fraud as is alleged here. In these circumstances, he submits that care must be taken before reliance is placed upon them in considering the element of deprivation, by means of putting the money or property of a person at risk, in a complete fraud offence. 48 Mr Sutherland SC submits that there is no evidence capable of satisfying the jury that the Commissioner of Taxation was deprived of anything and, as a result, the first count should be withdrawn from the jury by way of a directed acquittal. 49 During the course of oral submissions on this application, I raised with Mr Sutherland SC the written directions of Sully J at the 2005 trial concerning the element of deprivation. That direction of law was given by his Honour to the jury in writing, together with other directions of law, pursuant to s.55B Jury Act 1977. That written direction was in the following terms: "3. That the consequence of the issue of the relevant rulings and opinions was that the Commissioner of Taxation was deprived of something of value . The Crown does not say, and does not therefore have to prove, that there was an actual loss to the revenue. The Crown case is that the contingent effect of the rulings and opinions was such as to imperil, that is to say to put at real risk, the revenue of the Commonwealth; and that the Commissioner has lost something of value in that the rulings deprive him of the means of avoiding that risk. The contingent effect of the rulings and opinions depends upon their legal force and effect. It is not controversial in this trial that at all material times: (a) a private binding ruling was recognised formally by certain provisions of the Income Tax Assessment Act of the Commonwealth. That formal recognition entailed that a tax payer to whom a ruling had been given by the Commissioner of Taxation could arrange aspects of his financial affairs so that they fell four-square within the terms of the rulings. In such a case the Commissioner of Taxation had to assess the tax payer's liability to taxation in conformity with the ruling. If the Commissioner tried to assess the tax payer's liability as though the ruling did not exist, and so tried to assess at a sum greater than would be payable according to the ruling, then the tax payer could resist the Commissioner's assessment, claiming the protection of the ruling. In that event the Commissioner would have to assess the tax payer's liability at an amount less than would have been proper had there been no ruling. (b) A private binding ruling although issued to the particular applicant for the ruling, and in connection with a particular financial arrangement put forward by that applicant, would be regarded by the Commissioner, in the interests of fairness and consistency, as applying also to any other substantially similar financial arrangement entered into by a tax payer other than the particular applicant for the ruling. (c) An Advance Opinion is not regarded by the Commissioner as binding him in the same way as a PBR. The Commissioner will normally regard himself bound as between himself and the particular taxpayer to whom the AO has been given. The Commissioner will not regard himself as bound as between himself and any other taxpayer. Even in the case of the particular taxpayer to whom the AO has been given, the Commissioner will regard himself as being free to depart from his AO in certain circumstances which are set out in relevant notifications issued from time to time by the Commissioner. Ex.C1 is an example of such a notification. (d) Neither an advance opinion nor a private binding ruling, but particularly a private binding ruling, makes the law. That is the prerogative of Parliament and not of the Commissioner of Taxation. (e) Neither an advance opinion nor a private binding ruling, but particularly a private binding ruling, establishes what the relevant law actually is. The resolution in a particular case of a dispute about what the law actually is, is the prerogative of the Courts, and not of the Commissioner of Taxation. (f) What is done by the issue of an advance opinion or a private binding ruling, but particularly a private binding ruling, is to record a view of the Commissioner as to the way in which, in his opinion, the current state of taxation law requires him to assess to taxation the particular proposal that a particular tax payer has submitted as the subject matter of a requested advance opinion or private binding ruling. (g) If the Commissioner so records an opinion or a ruling that is, as it happens, plainly correct as a matter of law; and would be so characterised by a Court in the event of any dispute about the opinion or ruling; then the issue of the opinion or the ruling, even if obtained by dishonest means, does not cause the Commonwealth a loss of revenue, because the Commonwealth's entitlement to tax the particular tax payer was the same with the correct opinion or ruling as it would have been without the correct ruling or opinion. (h) If, to take the polar opposite view, the Commissioner states on the public record an opinion or a ruling that is, as it happens, plainly incorrect as a matter of law; and would be so characterised by a Court in the event of any dispute about the opinion or ruling; then the issue of the opinion or ruling, whether obtained honestly or dishonestly, has caused a risk of loss to the Commonwealth revenue. What is more, the risk of loss is a real risk; because the relevant and incorrect opinion, or the relevant and incorrect ruling, compels the Commissioner to assess the protected tax payer's liability to tax at a figure which is lower, because of the binding effect of the ruling or opinion, than it should be, and than it would be were it not for the binding effect of the opinion or the ruling. (i) In the present trial the facts and circumstances upon which the Crown relies do not raise a case falling within either of (g) or (h) above. The present trial concerns private binding rulings and advance opinions of which the Crown argues that they are neither plainly correct in law — as in (g); nor plainly incorrect in law — as in (h). The Crown argues for an intermediate position . The definition of that intermediate position, and your approach to the assessment of that intermediate position, should focus upon the following sequence of questions and associated directions: 1 are you satisfied beyond reasonable doubt that the Commissioner, if he were allowed to dispute the relevant PBRs in Court, would have an arguable case to put on either the deductibility issue; or the FBT issue; or both of those two issues? 2. what is 'an arguable case'? It is a case for which there is some supporting argument; the argument being apparently reasonable on its face. 3. what is meant by the expression 'apparently reasonable on its face'? The expression means that the particular argument proceeds by a process of logical reasoning from one relevant fact to the next relevant fact, and so on until a logical conclusion has been reached. 4. should you not be satisfied that the answer to question 1 above is: yes; then the Crown would have failed to establish the first necessary step in making out a case of deprivation; and you should thereupon acquit the accused. 5. should you be satisfied that the answer to question 1 above is : yes; then you should ask what evidence there is, if any, that either strengthens, on the one hand; or weakens , on the other hand, the arguable case that you have found to be available to the Commissioner. 6. you should then look again, in an overall way, at the arguable case that you have found in your answer to 1 above; taking into account any strengthening, on the one hand; and any weakening, on the other hand, that you have identified in dealing with the matters raised in 5 above. In the light of that overall assessment, made exclusively by you as the sole judges of any disputed question of fact, you should answer this question: 7. is any arguable case which you found, when answering the question at 1 above, to be available to the Commissioner of such strength, in your overall assessment of it, as to satisfy you beyond reasonable doubt that the effect of the relevant rulings and opinions, by depriving the Commissioner of the right to make his arguable case in an appropriate Court, has deprived the Commonwealth, in the person of the Commissioner, of something of value? 8. should you answer the question at 7: yes; then the Crown will have established the essential element of deprivation. Should you answer the question at 7: no; then the Crown will have failed to establish an essential element of count 1, and you should thereupon return a verdict of not guilty on that count." 50 Although Mr Sutherland SC initially resisted my invitation to indicate areas of agreement or disagreement with this direction, he proceeded in due course to frame a variation of this direction which he submitted was appropriate. The direction of law advanced by the Accused was in the following terms: "That the consequence of the issue of the relevant private rulings was that the Commissioner of Taxation was deprived of something of value. The Crown does not say, and does not therefore have to prove, that there was an actual loss to the revenue. The Crown case is that the effect of the private rulings was such as to imperil, that is to say to put at real risk, the revenue of the Commonwealth. The effect of the rulings depends upon their legal force and effect. The evidence in the trial establishes that: (a) A private ruling is recognised formally by certain provisions of the Income Tax Assessment Act of the Commonwealth. The evidence establishes that a private ruling will not bind the Commissioner unless other factors apply. These include: i) The ruling must comply with procedural formal requirements. ii) The facts must be fully disclosed by the taxpayer. iii) The arrangement ruled upon must be implemented upon all fours with the ruling. iv) Part IVA must be determined as not applying. v) The ruling needs to have been issued bona fide. vi) The taxpayer needs to have lodged a return and claimed a deduction. (b) Sec 170BB of the Income Tax Assessment Act further requires the Crown to prove beyond reasonable doubt that the relevant income tax law 'applies' to the relevant taxpayer 'in a different way' than the way in which it has been ruled in the ruling. This requires positive proof that the ruling is wrong in order to satisfy the legislative provision. (c) A private ruling does not make the law. That is the prerogative of Parliament and not of the Commissioner of Taxation. (d) A private ruling does not establish what the relevant law actually is. The resolution in a particular case of a dispute about what the law actually is, is the prerogative of the Courts, and not of the Commissioner of Taxation. (e) What is done by the issue of a private ruling is to record a view of the Commissioner as to the way in which, in his opinion, the current state of taxation law requires him to assess for taxation the particular proposal that a particular taxpayer has submitted as the subject matter of a requested private ruling. (f) If the Commissioner so records a ruling that is, as it happens, plainly correct as a matter of law; and would be so characterised by a Court in the event of any dispute about the ruling; then the issue of the ruling, even if obtained by dishonest means, does not cause the Commonwealth a loss of revenue, because the Commonwealth's entitlement to tax the particular taxpayer was the same with the correct ruling as it would have been without the correct ruling. (g) If, to take the diametrically opposite view, the Commissioner states on the public record a ruling that is, as it happens, plainly incorrect as a matter of law; and would be so characterised by a Court in the event of any dispute about the ruling; then the issue of the ruling, whether obtained honestly or dishonestly, has caused a risk of loss to the Commonwealth revenue. (h) In the present trial the facts and circumstances upon which the Crown relies do not, according to the Crown, raise a case falling within either of (f) or (g) above. The present trial concerns private rulings in respect of which the Crown argues that they are neither plainly correct in law - as in (f); nor plainly incorrect in law - as in (g). The Crown argues for an intermediate position. (i) Before dealing with that intermediary position for which the Crown contends it should be noted that the Defence contends that the private rulings are incontrovertibly correct on both the question of FBT and deductibility such that there was never any risk to the revenue. The definition of that intermediate position, and your approach to the assessment of that intermediate position, should focus upon the following sequence of questions and associated directions: 1 Are you satisfied beyond reasonable doubt that the Commissioner was bound by the rulings? In other words, are you satisfied that he was prevented from putting an arguable case to the contrary on either the FBT issue, or the deductibility issue, or both, to a court? 2. What is 'an arguable case'? It is a case for which there is some supporting argument; the argument being apparently reasonable on its face. 3. What is meant by the expression 'apparently reasonable on its face'? The expression means that the particular argument proceeds by a process of logical reasoning from one relevant fact to the next relevant fact, and so on until a logical conclusion has been reached. 4. Should you not be satisfied that the answer to question 1 above is: yes; then the Crown would have failed to establish the first necessary step in making out a case of deprivation; and you should thereupon acquit the accused. 5. Should you be satisfied that the answer to question 1 above is: yes; then you should ask what evidence there is, if any, that either strengthens, on the one hand; or weakens, on the other hand, the arguable case that you have found to be available to the Commissioner. 6. You should then look again, in an overall way, at the arguable case that you have found in your answer to 1 above; taking into account any strengthening, on the one hand; and any weakening, on the other hand, that you have identified in dealing with the matters raised in 5 above. In the light of that overall assessment, made exclusively by you as the sole judges of any disputed question of fact, you should answer this question: 7. Is any arguable case which you found, when answering the question at 1 above, to be available to the Commissioner of such strength, in your overall assessment of it, as to satisfy you beyond reasonable doubt that the effect of the relevant rulings, by depriving the Commissioner of the right to make his arguable case in an appropriate Court. and thereby put the revenue of the Commonwealth at risk? 8. If you are satisfied that the answer to question 7 is yes, are you satisfied beyond reasonable doubt that the revenue of the Commonwealth was thereby put at risk? 9. Should you answer the question at 7 and at 8: yes in both cases, then the Crown will have established the essential element of deprivation? Should you answer the question at either 7 or 8: no, then the Crown will have failed to establish an essential element of count 1, and you should thereupon return a verdict of not guilty on that count." 51 The formulation of the relevant direction of law concerning the element of deprivation in this case is necessary as much for the determination of the present application as for any direction to be given to the jury as part of the summing up should the first count be left to the jury. In considering the application for a verdict by direction on the first count, I must formulate the directions of law to be applied by me in determining that application. I will return to this topic later in this judgment. Crown Submissions 52 The Crown submits that the Accused's argument overlooks the true nature of the Crown case. On the element of deprivation, the Crown advances a case based on risk of loss of revenue, and not loss. The Crown submits that the concept that the revenue was put at risk lies at the heart of the Crown case, and that the case advanced by the Crown in this trial accords with the approach endorsed as being viable by the Court of Criminal Appeal in 2005. The Crown notes that the Court of Criminal Appeal refused leave to appeal from my judgment in R (Cth) v Petroulias (No. 1) (Petroulias v R [2006] NSWCA 415), providing further support for the approach maintained by the Crown in this trial. 53 The Crown submits that it is not necessary for the prosecution to prove that taxpayers who received favourable rulings actually implemented the arrangements. The risk to the revenue was created when the rulings were issued because the taxpayers could then implement the arrangements with the protection created by s.170BB. Even if the effect of the rulings in creating a risk to the revenue is limited to those specific taxpayers who received rulings for their particular arrangements, the Crown submits that the first count is capable of being made out. 54 The Crown points to evidence that payments were made by taxpayers to Mr Morgan and Mr McLaren for the marketing of these schemes. It would be open to the jury to conclude that taxpayers intended to implement arrangements in accordance with the rulings. They were prepared to invest monies because of perceived benefits under s.170BB in obtaining the rulings which would be implemented, in terms, by the taxpayers. The Crown submits that the undoubted purpose in taxpayers entering into the arrangements, and in requesting favourable rulings and opinions, was to provide taxpayers who entered into the PIC schemes with a level of protection (under s.170BB) from the Commissioner seeking to recover additional revenue from them. The risk to the revenue was real as it would be unlikely that taxpayers would fail to implement the arrangements in accordance with the rulings. Taxpayers who parted with a substantial fee would be most unlikely to forego the benefits of the protection available from the rulings by entering into different arrangements. 55 The Crown points to evidence that plans were sold on the basis that standard documentation would be utilised. The Crown submits that inferences are available, from documentary evidence, that the Accused himself perceived a significant financial advantage for taxpayers, from a revenue perspective, for rulings obtained under the PIC scheme. 56 Likewise, the Crown submits that the fact that advance opinions would be regarded as administratively (but not legally) binding was perceived by the Accused as being advantageous to taxpayers. Although advance opinions did not have a statutory foundation, the Crown submits that their issue was capable of giving rise to an actual risk of loss to the revenue because of the commitment of the Commissioner to honour their effect. 57 The Crown submits that the issuing of the rulings themselves created an actual risk of loss to the revenue. The fact that later extended ATO and Australian Federal Police ("AFP") investigations in 1999 and 2000 revealed the complete circumstances surrounding these rulings, so that it could then be contended that they were not made bona fide, and had been issued for the purpose of tax avoidance, did not mean that the Crown was not capable of establishing actual risk of loss of revenue. 58 The Crown acknowledges that neither the issue of an advance opinion nor a private ruling had the effect of precluding the ATO from conducting an audit upon taxpayers. The Crown points to evidence, however, that there was less likelihood of an audit in those cases. 59 Likewise, the Crown acknowledges that rulings did not have the formal effect of protecting taxpayers from the application of Part IVA (or s.67). The Crown points to evidence whereby the Accused did his best to limit the opportunity of the application of Part IVA by the terminology of the rulings. The Crown submits that the revenue was at risk by the issuing of the rulings, even though Part IVA might remain available to the Commissioner. Even then, the revenue was still at risk by the difficulties which the Commissioner would face in having to resort to Part IVA, involving the proving of facts to support an opinion of the dominant purpose, other than that presented by documentation. 60 The theoretical possibility that an arrangement supported by a private ruling might be defeated by invoking Part IVA (or s.67) did not, the Crown submits, mean that the revenue was not put at risk. 61 The Crown submits that the reference by the Accused to the media release of 19 May 1999 (Exhibit D87) is misleading. Firstly, the statement of the Commissioner indicated that he had not made a decision as to whether the rulings would be binding. Secondly, the statement was made without full knowledge as it was made early in the AFP investigation and before Mr Brown had located the substantial number of additional rulings on the "back of LAN" system and before search warrants were executed in March 2000 leading to the recovery of the original documentation in the Melbourne storage unit utilised by the Accused. The Crown submits that the complete set of rulings relied upon by the Crown (Exhibits C94 and C95) were not all known and identified at the time when the media release issued on 19 May 1999. Taking the media release at its highest, it could not extend to that which was not then known to the Commissioner. 62 The Crown submits that the evidence is capable of proving that the Commissioner was bound by the rulings in the sense endorsed by the Court of Criminal Appeal, and that the first count should accordingly be left to the jury. 63 Insofar as the Accused points to evidence of Mr Ingersoll concerning private rulings, the Crown refers to the cross-examination of Mr Ingersoll where an analogy is drawn between the issue of a private ruling and the obtaining of an insurance policy (T413, 437). The Crown submits that an insurance policy procured by fraud would put at actual risk the insurer's financial affairs from the time that the insurance policy issued. It may be that no loss is actually sustained because of, amongst other things, discovery of the fact that the insurance policy ought not have issued. The Crown submits, however, that the element of deprivation would be demonstrated in those circumstances without more. The Crown submits that this is the approach endorsed by the Court of Criminal Appeal in 2005. 64 The Crown refers to the decision of the Privy Council in Wai Yu-Tsang v The Queen in emphasising the distinction between fraud involving the money or property of a person being put at risk. The Crown also relies upon the decision of the Court of Criminal Appeal of Western Australia in Pearce v R with respect to the concept of putting at risk the revenue of the Commonwealth in a tax setting. 65 The Crown acknowledges that the decision of the Court of Criminal Appeal requires it to establish, as part of the element of deprivation, that the Commissioner had an arguable case that the rulings were wrong. The arguable case must be one which is supported by an argument which is plausible or apparently reasonable on its face. The Crown submits that ample evidence has been adduced to demonstrate the existence of an arguable case concerning both fringe benefits tax and deductibility. 66 With respect to the Federal Court decisions in evidence culminating in Indooroopilly, the Crown submits that the actual outcome of the various cases is not especially significant. Rather, the greater significance is the fact that it was only because taxpayers in those proceedings did not have rulings in their favour that the Commissioner was able to litigate the issues and seek to recover revenue. According to the Crown, the decisions are also significant for the fact that, regardless of the result, the Commissioner had arguments available on the issues of fringe benefits tax and deductibility which were plausible and apparently reasonable on their face. The fact that the Commissioner of Taxation may have lost a number of the fringe benefits tax cases does not mean that the Commissioner did not have an arguable case to put. The Crown submits that the withdrawal of Public Ruling TR1999/5 on 27 June 2007 (Exhibit D82) does not mean that the evidence is not capable of demonstrating that the Commissioner had an arguable case to advance in support of the applicability of fringe benefits tax. 67 The Crown points to an arguable case on the issue of fringe benefits tax based upon the view promoted by the Accused and adopted within the ATO. The fact that different views may have existed within the ATO concerning the fringe benefits tax issue did not lead, for the purpose of this application, to a conclusion that the Crown had failed to adduce evidence of an arguable case on this issue. 68 The Crown submits that the Federal Court decisions do not preclude an arguable case for the application of fringe benefits tax to the PIC arrangements. The point of the Indooroopilly line of authority is that where employees cannot be identified at the time of contribution, fringe benefits tax is not applicable. However, the Crown submits, in most of the private rulings for the Productivity Incentive Trust Plan, the beneficiaries were identified by name and amount. Accordingly, the Crown submits, Indooroopilly may be distinguished and the ATO would not be caught by the principles established by that line of authority. 69 The Crown points to the majority of Productivity Incentive Trust Plan rulings involving small companies with employee beneficiaries who were also owners of the employer company. In this respect, a clear arguable case would exist that such arrangements would be subject to fringe benefits tax. The Crown points to evidence that PIC plans were "mass marketed" in the sense that they were standard arrangements with pro forma documentation to be executed, rather than one-off arrangements for particular employers as had been the case with the Arthur Andersen applications for Leightons and SOCOG. The Crown submits that those circumstances provided a further basis upon which the Commissioner would have been able to argue that the deduction should not have been allowed, and fringe benefits tax should have been payable, but for the rulings which had been issued. 70 With respect to NCSF schemes, the Crown submits that it is not correct that the ATO did not change its position until 1999. Draft Ruling TR98/12 (Exhibit C72), which issued on 28 October 1998, was an expression of an arguable case that fringe benefits tax was payable, and was certified as correct by the Accused, although he had just issued a series of opinions and rulings to the contrary a few days earlier (Exhibit C95, Tabs 65-75) and another opinion and ruling after the Draft Ruling was published (Exhibit C95, Tabs 74 and 75). The Crown submits that an arguable case is demonstrated with respect to NCSF schemes. 71 In relation to fringe benefits tax, the Crown contends that the jury may find a certain degree of hypocrisy in a situation in which the Accused put himself forward in 1997-1999 as an expert in the ATO, certified the Public Ruling as correct and describing it as a "silver bullet", but now claims in this trial that it is incontrovertibly wrong. 72 Concerning deductibility, the Crown points to the argument advanced by the Accused concerning deductibility (Exhibit C52), which argument was used as a model for refusing applications for rulings for employee benefit arrangements sought by non-PIC applications (Exhibits C150 and 151). The Crown submits that this arguable case concerning deductibility was and remains a viable one. The Commissioner has succeeded in Federal Court cases on the issue of deductibility. The Crown submits that there is clear evidence that the Commissioner had an arguable case on that issue in relation to the arrangements of taxpayers who received favourable rulings. 73 The Crown submits that there is evidence capable of satisfying the jury that the Commissioner had an arguable case on either or both of the issues of deductibility and fringe benefits tax. 74 The Crown submits that the first count should be left to the jury. Resolution of Competing Submissions 75 The submissions of the Accused and the Crown both rely upon the decision of the Court of Criminal Appeal in support of differing (and opposite) conclusions concerning the element of deprivation. The Accused submits that the first count ought be withdrawn from the jury because the Crown has failed to demonstrate a case capable of being left to the jury in accordance with the approach endorsed by the Court of Criminal Appeal. The Crown, on the other hand, submits that its case is supported by evidence and accords with that foreshadowed in the Court of Criminal Appeal, and endorsed by that Court. 76 In a substantive charge of fraud, the Crown must establish that someone was defrauded: Wills v Petroulias at 601 [8], R v Petroulias at 676 [45]-[46]. 77 The issue for determination at this point is whether in accordance with the principles at [5]-[6] above, the evidence is capable of satisfying the jury beyond reasonable doubt of the element of deprivation. It is necessary to keep firmly in mind the nature of the case alleged by the Crown against the Accused. The Crown must establish that the Accused put the revenue of the Commonwealth at risk by causing the rulings and opinions to issue. What must be established is an actual risk of loss of revenue. It must be a real risk and not a fanciful or remote risk. 78 The Crown must establish not only that rulings issued under s.170BB, but that the Commissioner had an arguable case to put that the rulings were wrong and that, accordingly, the risk to the revenue was such that the Commonwealth was in fact deprived of something of value (R v Petroulias at 667 [11]). 79 The Crown case could be made out if the jury determined that the Crown case was of sufficient strength on either the fringe benefits tax issue or the deductibility issue, and it is not necessary for jurors to be unanimous as to which of the two were of such strength: R v Petroulias at 669 [18]. 80 It is not the function of the jury to determine whether either the Commissioner's argument or the taxpayer's argument is correct, or even which is the more plausible or the more apparently reasonable argument. The arguable case to be put by the Commissioner must demonstrate the possibility that the Commissioner would win a case in which he was allowed to dispute the private rulings. An arguable case is a case supported by an argument which is plausible or apparently reasonable on its face: R v Petroulias at 667 [12]-[13]. 81 A fraud count alleging that a person's property or money was put at risk or imperilled may be founded upon an "ephemeral and not lasting, or potential and not actual" loss: R v Allsop (1976) 64 Cr App R 29 at 31; Wai Yu-Tsang v The Queen at 278. The risk does not have to be a perpetual or open-ended risk. The element of deprivation may be established by the revenue being put at risk for a period, even though, as a result of discovery of the relevant conduct, the actual risk of loss is closed down. 82 I am satisfied that the Court of Criminal Appeal approached the element of deprivation upon the basis that it was open to the Crown to seek to establish that the Commonwealth was deprived of something of value, which put the revenue at risk, by establishing that rulings issued under s.170BB which had the capacity to prevent the Commissioner from advancing an arguable case that the rulings were wrong. 83 This did not require that the Crown establish that the rulings were immune from audit or possible Part IVA action. In Wills v Petroulias at 605 [26], Spigelman CJ pointed to the "comfort" given with respect to the application of Part IVA by an example ruling placed before the Court. It was apparent to the Court of Appeal that Part IVA action remained theoretically available, although perhaps less likely in practice because of the "comfort" in the ruling (which stated essentially the Part IVA statutory test). It is necessary to read the decisions of the Court of Appeal in Wills v Petroulias and the decision of the Court of Criminal Appeal in R v Petroulias together. The continued theoretical availability of Part IVA to the rulings was known to the Court. 84 Nor do I read the judgment of the Court of Criminal Appeal as requiring that an arrangement must be implemented before the revenue is capable of being put at risk by the issue of a ruling. It is the statutory advantage which the taxpayer obtains by the issue of the ruling itself which is capable of putting the revenue at risk. 85 The Court of Appeal (at 600-601 [4]) and the Court of Criminal Appeal (at 685 [85]ff) referred to the private ruling scheme under s.170BB. In CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397 Gummow J (at 401-402) and Hill J (at 423-426), in separate judgments, referred to the history and operation of the private rulings system introduced in 1992. AT 401-402, Gummow J outlined the operation of the statute to bind the Commissioner to the tax liability in accordance with the favourable ruling despite the law otherwise applicable at the time of assessment. 86 I do not accept the submissions for the Accused that, for the revenue of the Commonwealth to be capable of being put at risk, the Crown must establish that relevant arrangements had been implemented and that some other law was applicable to the ruling under s.170BB. There is evidence that taxpayers paid money for PIC schemes. It may be inferred that it was their intention to put in place arrangements in accordance with the rulings. To do so would give the rulees the statutory benefit under s.170BB identified by Gummow and Hill JJ in CTC Resources NL v Commissioner of Taxation. This is the first step which the Crown must establish to prove that the revenue was put at actual risk. 87 I accept that an audit process could be undertaken (so as to allow the Commissioner to issue an amended assessment) or Part IVA (or s.67) could be invoked by the Commissioner at a later time, despite the rulings. However, an audit would determine whether the arrangement had been implemented in accordance with the ruling. If it had, there was no scope for an amended assessment to issue (Ingersoll, T261). The theoretical availability of Part IVA action did not mean that the revenue was not capable of being put at risk. So much is clear from the decision of the Court of Appeal (see [83] above). 88 Mr Sutherland SC points to events occurring after February 1999 which, so he submits, had the effect that the revenue could not be put at actual risk. He disputes the Crown submission that it was only because of the investigation by the ATO and the AFP (extending from March 1999 and into 2000) that the true position was exposed, and that the Accused cannot now seek to rely upon that exposure to contend that the revenue was not put at risk. 89 Mr Sutherland SC submits that the revenue never was at actual risk, and that this does not depend upon a type of retrospective examination of events disclosed during the investigation. I do not accept the Accused's submission in this respect. I am satisfied that the defence submission does, in reality, involve a type of retrospective application of knowledge obtained in the investigatory phase. This is not the correct approach to a fraud based upon putting the money or property of a person at risk. 90 I accept that the Accused's characterisation at [40] above constitutes one example of how the revenue could be placed at risk. I do not accept, however, that the Accused's formulation represents the essential requirements, or the only permissible way in which the revenue may be placed at risk in the circumstances of this case. I accept that it is open to the jury, on the evidence, to be satisfied that the rulings did bind the Commissioner of Taxation by operation of the private ruling system. 91 I accept that the issue of advance opinions, given the administrative binding practice in this respect, was also capable of putting the revenue at risk in the manner referred to by Sully J in the written directions to the 2005 jury extracted at [49] above. 92 In R v Petroulias at 666 [9], Spigelman CJ and Hunt AJA observed that the three Peters categories of fraud descend in order of seriousness, and consequently in the nature of a punishment to be imposed. A fraud of the type characterised in the Accused's submission may lie at the more serious end of the spectrum as either a first category (actual loss) fraud or an aggravated form of second category (actual risk of loss of revenue) fraud. The fraud alleged by the Crown in this case may lie further down the spectrum within the second category, but I am satisfied that it lies nevertheless within that category. 93 I am satisfied that the legally binding effect of the rulings and the administratively binding effect of the opinions is sufficient, for the purposes of this application, to satisfy the relevant test. The circumstances in which the rulings issued support an inference that the purchasers intended to implement the arrangements in accordance with the rulings to obtain the statutory benefit and level of protection offered by the private rulings' scheme. Although rulings did not constitute complete protection or guarantees for the future with respect to revenue, the possession of a ruling assisted the taxpayer and limited the Commissioner. 94 I do not accept the defence submission that the Indooroopilly line of cases leads to the conclusion that the Commissioner does not have an arguable case on the fringe benefits tax issue. I accept the Crown submission that an examination of the particular rulings in this case may allow the Indooroopilly line of authority to be distinguished. I note, in any event, that a number of the Federal Court decisions upon which the Accused relies (Essenbourne Pty Ltd v Commissioner of Taxation [2002] FCA 1577; Walstern Pty Ltd v Commissioner of Taxation [2003] FCA 1428; Spotlight Stores Pty Ltd v Commissioner of Taxation [2004] FCA 650; Pridecraft Pty Ltd v Commissioner of Taxation [2004] FCAFC 339) were considered by the Court of Criminal Appeal (at 694-697 [140]-[148]). The existence of this line of authority did not lead to the view that the Commissioner was not capable of advancing an arguable case on the fringe benefits tax issue. In my view, the addition of Indooroopilly to this list does not mean that an arguable case is not capable of being advanced. 95 In my view, there is a case to be left to the jury on the fringe benefits tax issue in the manner identified by the Crown. I accept the Crown submission that many of the rulings for the Productivity Incentive Trust Plan identified beneficiaries by name and amount in a way which would permit an argument that fringe benefits tax applied. 96 To the extent that the Federal Court decisions in evidence touch upon deductibility, they assist the Crown case. 97 The submission for the Accused is based upon the proposition that the question of deductibility must be considered on a case-by-case basis. The Accused contends that no arguable case with respect to deductibility is demonstrated in the evidence because a case-by-case examination has not been undertaken. I do not accept this submission. In my view, an arguable case on deductibility appears in the evidence which may be applied to the rulings in evidence (Exhibit C95). 98 The jury will have before them the range of documents in evidence, including the relevant rulings and decisions of the Federal Court of Australia. I am satisfied that, in the relevant legal sense, the evidence is capable of satisfying the jury that an arguable case for deductibility could be advanced had the rulings not issued. 99 I am satisfied that the Crown case advanced at this trial does not depart from the case particularised before trial and opened by the Crown, and identified as a viable one by the Court of Criminal Appeal in 2005. 100 As I have rejected the submissions for the Accused with respect to the three elements relied upon in support of the verdict by direction on the first count, I decline to withdraw that count from the jury and decline to direct a verdict of acquittal on that count. 101 The Crown submits that the written direction given by Sully J remains appropriate in the circumstances of this trial, with the exception that the term "private ruling" should appear in place of "private binding ruling" consistent with the statutory terminology. 102 Having considered the form of the directions given by Sully J and the form proposed by the Accused in this trial, I am satisfied in principle (and subject to any submissions not advanced on this application) that the appropriate directions are those given by Sully J at the first trial with the substitution of the term "private ruling" for "private binding ruling". Second Count - The s.73 Crimes Act 1914 (Cth) Charge 103 Mr Sutherland SC advanced short submissions in support of a verdict by direction on the second count. He submitted that it is incumbent upon the Crown to establish that the Accused did something different than he would have been obliged to do, absent the receipt of the benefit which is alleged. Accepting for the purpose of the present submission that there is evidence capable of being accepted by the jury that an agreement to receive money existed, the Accused submits that there is no evidence that the decision to issue rulings by Mr Aivaliotes was thereby affected. Mr Sutherland SC repeats, in this context, the submissions concerning causation made with respect to the first count. 104 With respect to the requirement that it be established beyond reasonable doubt that the Accused's duty was "improperly affected", Mr Sutherland SC submits that the Crown must prove beyond reasonable doubt that the rulings were wrong at law in order to succeed on the second count. He submits that, upon receipt of an application for a private ruling, the ATO was obliged to deal with it in accordance with the requirements of the legislation and in accordance with the Taxpayers Charter. He submits that the issue of the rulings was not affected by any agreement to receive a benefit. 105 The Crown submits that the allegation in the second count is that the Accused agreed to receive a benefit on an understanding that the exercise of his duty would be affected. The Crown continues to assert that it is necessary to show that the agreement extended to the Accused exercising his duty in a manner which was affected improperly. That is sufficient to warrant the second count being left to the jury. 106 The Crown submits that it is not necessary for the prosecution to show that the rulings were wrong. The Crown points to the same particulars of dishonesty as for the first count in alleging impropriety in the exercise of the duty of the Accused. Those particulars include acting in a position of a conflict of interest, concealing the rulings and deceiving officers about the number of rulings, as well as improperly disclosing lists of clients and information about other products which could be used for marketing by the PIC Group. The Crown submits that there is ample evidence on those issues to enable the jury to be satisfied of the ingredients of the offence. 107 The Crown submits that all of these features provide evidence of the improper exercise of the Accused's duty as a tax officer with the evidence of the Accused's participation in the arrangement with Mr Morgan constituting evidence of a flagrant breach in this respect. 108 I accept the Crown submissions with respect to the second count. The Crown case on this count involves a combination of direct evidence (including Mr Morgan's evidence) and inferences available from other evidence, including documentary evidence. In my view, it is not necessary for the Crown to establish for the purpose of the second count that the rulings were wrong. I am satisfied that the evidence with respect to the second count is capable of supporting a finding beyond reasonable doubt that the Accused agreed to receive a benefit on an understanding that the exercise of his duty as a tax officer would be affected improperly. That is sufficient to warrant the second count being left to the jury. 109 I decline the application for a verdict by direction on the second count. Conclusion 110 The applications for verdicts by direction with respect to the first and second counts are refused. Those counts will be left to the jury, together with the third count in relation to which no application was made. ********** 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. 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