New South Wales Supreme Court CITATION : R (Cth) v Petroulias (No. 29) [2007] NSWSC 1005 HEARING DATE(S) : 31 August 2007, 3 September 2007 JUDGMENT DATE : 6 September 2007 JUDGMENT OF : Johnson J at 1 DECISION : Leave under s.38 Evidence Act 1995 is granted to the Crown to question Emmanuel Dimitrios Aivaliotes, as though the Crown was cross-examining him, about evidence given by him concerning Topics 1, 2, 3, 5, 6, 7 and 9. CATCHWORDS : CRIMINAL LAW - application by Crown for leave to cross-examine witness under s.38 Evidence Act 1995 - evidence unfavourable to Crown - prior inconsistent statements made by witness - factors relevant to exercise of discretion - s.38(6) and s.192 Evidence Act 1995 - s.137 Evidence Act 1995 - application granted concerning seven specified topics LEGISLATION CITED : Evidence Act 1995 R v Le (2002) 54 NSWLR 474 R v Lozano (NSW Court of Criminal Appeal, 10 June 1997, unreported, BC9702441) R v Fowler [2000] NSWCCA 142 R v Parkes (2003) 147 A Crim R 450 CASES CITED : R v Souleyman (1996) 40 NSWLR 712 R v Ronen [2004] NSWSC 1298 Adam v The Queen [2001] 207 CLR 96 R v Hogan [2001] NSWCCA 292 R (Cth) v Petroulias (No. 16) [2007] NSWSC 506 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 6 September 2007 2002/93 Regina (Cth) v Nikytas Nicholas Petroulias (No. 29) JUDGMENT (On application by Crown for leave under s.38 Evidence Act 1995 to cross-examine Emmanuel Dimitrios Aivaliotes - see T2738) 1 JOHNSON J: In the course of examination in chief of Emmanuel Dimitrios Aivaliotes, a Crown witness, application is made by the Crown under s.38 Evidence Act 1995 for leave to question Mr Aivaliotes as though the Crown was cross-examining the witness. 2 Following submissions on the application, I announced my decision on 3 September 2007 (T2592) granting leave to the Crown under s.38 to cross-examine Mr Aivaliotes about his evidence in seven specified areas. This judgment contains my reasons for that decision. The Present Application 3 The Crown seeks leave to cross-examine Mr Aivaliotes about evidence that has been given by him, on seven specified topics, that is said to be "unfavourable" to the Crown (s.38(1)(a)) and/or, in relation to which, it is said that Mr Aivaliotes has made a prior inconsistent statement (s.38 (1)(c)). 4 During the course of the examination in chief of Mr Aivaliotes, the Crown indicated, in the absence of the jury, that application under s.38 was to be made. The Crown proposed that the examination in chief of Mr Aivaliotes proceed to a point where all topics which were to be the subject of a s.38 application had been identified (T2484-2487). This course was appropriate in the circumstances of the case. 5 Although submissions were made as part of a single application, it is necessary for the Court to consider the application with respect to each of the specified topics. In the circumstances of this case, it would not have been appropriate to consider applications for "small dollops of leave in response to repeated small-scale applications" which would produce a "stop-start approach to questions which is likely to be ineffective, likely to distract the jury as they go in and out, likely to lengthen the trial, and likely to make it more complex": R v Le (2002) 54 NSWLR 474 at 488 [73] per Heydon JA (Dunford and Buddin JJ agreeing). Relevant Statutory Provisions 6 Section 38 Evidence Act 1995 is in the following terms: "38 Unfavourable witnesses (1) A party who called a witness may, with the leave of the court, question the witness, as though the party were cross-examining the witness, about: (a) evidence given by the witness that is unfavourable to the party, or (b) a matter of which the witness may reasonably be supposed to have knowledge and about which it appears to the court the witness is not, in examination in chief, making a genuine attempt to give evidence, or (c) whether the witness has, at any time, made a prior inconsistent statement. (2) Questioning a witness under this section is taken to be cross-examination for the purposes of this Act (other than section 39). (3) The party questioning the witness under this section may, with the leave of the court, question the witness about matters relevant only to the witness's credibility. Note. The rules about admissibility of evidence relevant only to credibility are set out in Part 3.7. (4) Questioning under this section is to take place before the other parties cross-examine the witness, unless the court otherwise directs. (5) If the court so directs, the order in which the parties question the witness is to be as the court directs. (6) Without limiting the matters that the court may take into account in determining whether to give leave or a direction under this section, it is to take into account: (a) whether the party gave notice at the earliest opportunity of his or her intention to seek leave, and (b) the matters on which, and the extent to which, the witness has been, or is likely to be, questioned by another party. (7) A party is subject to the same liability to be cross-examined under this section as any other witness if: (a) a proceeding is being conducted in the name of the party by or on behalf of an insurer or other person, and (b) the party is a witness in the proceeding." 7 Section 137 Evidence Act 1995 provides: "137 Exclusion of prejudicial evidence in criminal proceedings In a criminal proceeding, the court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant." 8 Section 192 of the Act provides: "192 Leave, permission or direction may be given on terms (1) If, because of this Act, a court may give any leave, permission or direction, the leave, permission or direction may be given on such terms as the court thinks fit. (2) Without limiting the matters that the court may take into account in deciding whether to give the leave, permission or direction, it is to take into account: (a) the extent to which to do so would be likely to add unduly to, or to shorten, the length of the hearing, and (b) the extent to which to do so would be unfair to a party or to a witness, and (c) the importance of the evidence in relation to which the leave, permission or direction is sought, and (d) the nature of the proceeding, and (e) the power (if any) of the court to adjourn the hearing or to make another order or to give a direction in relation to the evidence." Relevant Legal Principles 9 Section 38 Evidence Act 1995 abrogates the common law rule relating to hostile witnesses: R v Lozano (NSW Court of Criminal Appeal, 10 June 1997, unreported, BC9702441, page 6). The intention of the Australian Law Reform Commission was to ensure (via s.38) that courts are not deprived of relevant testimony which had been excluded by operation of the hostile witness rule: R v Lozano at page 6. Subject to several discretionary considerations, s.38 permits a party, by leave, to cross-examine a witness who meets any of the criteria in s.38(1) of the Act. It is a section that needs to be applied with some care in criminal trials: R v Fowler [2000] NSWCCA 142 at [120]; R v Parkes (2003) 147 A Crim R 450 at 463 [73]. 10 Section 38 is not confined to the situation where a party calling a witness is confronted unexpectedly by evidence that is unfavourable or inconsistent with prior statements or by a witness who unexpectedly appears not to be making a genuine attempt to give evidence: R v Fowler at [121]; R v Parkes at 462 [70]. 11 The word "unfavourable" in s.38 (1)(a) of the Act does not mean "adverse"; it means "not favourable" to the party making the application: R v Souleyman (1996) 40 NSWLR 712 at 715; R v Lozano at page 6; R v Fowler at [121]; R v Ronen [2004] NSWSC 1298 at [49]. 12 Section 38 permits the applicant party to question "as though … cross-examining the witness" but only "about" the three subjects described in s.38(1)(a)-(c). As Heydon JA observed in R v Le at 486 [66]-[67], cross-examination "about" the subject should not be narrowly confined: "One purpose of a s 38 examination must be to enable counsel calling the witness to demonstrate that the evidence in chief which led to the s 38 order is false. Another must be to enable counsel to demonstrate that any prior statement inconsistent with it is true. That latter purpose is assisted by s 60, which permits a prior inconsistent statement to be considered as evidence of what is represented, not merely as a matter affecting credibility. But s 60 by itself is not wholly effectual unless the questioner is able to interrogate with a view to demonstrating the truth of the prior inconsistent statement. There would be little point in permitting s 38 examinations otherwise and no point in the existence of s 38(3). The purposes described can be assisted by obtaining concessions from the witness about matters tending to indicate the falsity of the impugned evidence. One of these is the lateness with which the impugned story is advanced. Another is the inherent improbability of the impugned story. These purposes must also be capable of being assisted by the eliciting of evidence tending to show the truthfulness of prior statements inconsistent with the impugned evidence, such as the fact that they were made under conditions conducive to accurate recollection and expression and conducive to sincerity. In my opinion, on the true construction of s 38, leave may be granted under s 38 to conduct questioning not only if the questioning is specifically directed to one of the three subjects described in s 38(1), but also if it is directed to establishing the probability of the factual state of affairs in relation to those subjects contended for by the party conducting the questioning or the improbability of the witness's evidence on those subjects. In establishing the probability or improbability of one or other state of affairs, the questioner is entitled to ask questions about matters going only to credibility with a view to shaking the witness's credibility on the s 38(1) subjects." 13 The further observations of Heydon JA in R v Le at 493 [90] are also pertinent to this question: "Section 38 permits the testing of the evidence in chief with a view to establishing the probability of the truth of the matters asserted in the prior inconsistent statement. Hence it permits examination of the witness on matters of credit with a view to the jury accepting the prior inconsistent statement and rejecting the later sworn evidence. It also permits an examination of the background at the time with which the statements are dealing, the background at the time when the prior inconsistent statement is made, and the background at the time when the witness moves to a version different from the prior inconsistent statement. It permits an inquiry into the possible reasons for the change, including the motives for the change. Judicial rulings which prevented these techniques being employed where application is made for leave to question under s 38 would not be giving full effect to the section." 14 The interests of justice, the public interest and the administration of justice may be served by the testing of the evidence of a witness by way of a s.38 examination: R v Le at 487 [68]; R v Ronen at [71]. The grant of leave may permit a truer picture of the situation to be presented to the jury than would have been the case had the Crown been refused leave to cross-examine. This is the very purpose underlying s.38: R v Parkes at 464 [81], [83]. 15 The factors which bear upon the exercise of discretion where application is made under s.38 are not confined. There are express statutory factors referred to in s.38 (6) and s.192 Evidence Act 1995. In addition, in R v Le at 493 [90], Heydon JA observed that, in a s.38 application, the Court ought give consideration to s. 137 Evidence Act 1995, whether or not the parties make submissions with respect to that provision. 16 Section 192(2)(b) requires the court to consider whether a grant of leave would be unfair to a party (the Crown or the accused) or to a witness. With respect to any suggested unfairness to an accused, it is important to note that the defence can test the evidence led in a s.38 examination by defence cross-examination of the witness: s.38(4); Adam v The Queen [2001] 207 CLR 96 at 107 [30]. To refuse a s.38 application, in some circumstances, may be unfair to the Crown: R v Ronen at [70]. 17 It is necessary to keep in mind the risk that s.38 cross-examination may convert the focus of the trial from the guilt of the accused for the crime charged to whether the witness is lying to protect the accused: R v Hogan [2001] NSWCCA 292 at [5], [76]; R v Le at 492-493 [89]; R v Ronen at [32], [72]. The Court should be alert to the risk of being sidetracked into collateral issues by way of grant of leave under s.38: R v Ronen at [32]. The Specified Topics 18 Before moving to the specific topics to which this judgment relates, it is useful to describe shortly the way in which the Crown places Mr Aivaliotes as a witness in the Crown case. At all relevant times between 1997 and 1999, Mr Aivaliotes was an officer in the Australian Taxation Office ("ATO"). It is the Crown case that the Accused effectively manipulated Mr Aivaliotes over a period of time, taking advantage of his limited experience in the areas which are the subject of these proceedings and his relative subservience (T2544-2545). 19 The Crown submits that Mr Aivaliotes has altered his evidence in a number of significant respects from that given by him at the first trial before Sully J and a jury in 2005. Put shortly, the Crown submits that, contrary to what he said at the 2005 trial, the evidence of Mr Aivaliotes in the present trial has been to the effect that much of the work was done by him and that he acted in a way which reflected his own views on matters, rather than following the views given to him in drafts which had been prepared by the Accused (T2544.54). In substance, the Crown contends that Mr Aivaliotes has altered his evidence so as to elevate his own role, in relevant respects, from that of an officer with limited knowledge and experience acting at the direction of the Accused to a person exercising his own skill, knowledge and judgment in reaching an independent view of the issues under consideration. 20 In this way, the Crown submits that there is a pattern in the evidence of Mr Aivaliotes at the present trial which differs from that given by him in the first trial in 2005. Although the Crown does not submit that the s.38 application ought be resolved in a rolled-up or global way, it is submitted that this broad change in the stance of Mr Aivaliotes underlines the applications concerning some of the specified topics. 21 It is the Crown case that the Accused had an association with (in particular) Mr Richard Morgan, Mr Nick Panos, Mr Geoff Strong and Mr John McLaren, and their associated corporate entities, and that the Accused exhibited favouritism to them as against other taxpayers not having such an association. It is contact and correspondence between the ATO and these persons and entities in 1998 and 1999 which is a central feature of the evidence of Mr Aivaliotes. 22 In support of the application, the Crown produced a schedule (MFI80) setting out the topics and relevant transcript references. Extracts from the evidence of Mr Aivaliotes at the 2005 trial and the present trial (and, in one area, the second trial in May 2007) will be reproduced in this judgment. The extracts will provide the context for the particular (emphasised) answers which are relied upon by the Crown as unfavourable evidence and/or prior inconsistent statements. As will be seen, documents have retained the same exhibit numbers at each of the three trials. Topic 1 - Whether Mr Aivaliotes Attended the Alleged Meeting on 28 and 29 January 1998 (Exhibit C146) and When Mr Aivaliotes had met Mr Geoff Strong 23 In examination in chief at the first trial, Mr Aivaliotes was asked about a document which was said to constitute minutes of a meeting at the premises of the Productivity Incentive Corporation between the Accused, Mr Nick Panos, Mr Geoff Strong and Mr Aivaliotes on 28 and 29 January 1998 (Exhibit C146). Mr Aivaliotes was asked (T882.36, 17 May 2005) (emphasis added): "Q. In what circumstances did you first see the document? A. The first time I saw this document was when Mr Petroulias handed it to me to file in the Productivity Incentive part of my binders, arch binder files. Q. It is described as a memorandum of understanding re the ATO attitude towards the taxation treatment of incentive structures and bears what seems to be the letterhead of Productivity Incentive Corporation and is said to represent minutes of a meeting involving Geoff Strong, Nick Panos, Nick Petroulias and Emmanuel Aivaliotes on 28 and 29 January 1998? A. Yes. Q. Did you attend such a meeting on those dates? A. I have no recollection of being at such a meeting ." 24 Soon after, Mr Aivaliotes was asked about a conversation between the Accused and himself during a meeting at a Coogee Beach on 16 March 1999, concerning the ATO investigation which was then underway (T886.40, 17 May 2005) (emphasis added): "Q. Just stay with what you said and what he said? A. Yes. Another thing that I mentioned to Mr Petroulias was concerning the minutes of the meeting we referred to earlier as occurring at Productivity Incentive Corporation, and I said words to the effect to Mr Petroulias that 'These minutes have been shown to me by the investigators', shortly before me meeting with Mr Petroulias, and I said to him words to the effect of 'They're a weakness to your case. Can you really say that these are minutes of two days of meeting compiled by Geoff Strong?' Mr Petroulias replied to me words to the effect of that he had completed these minutes. I then also told Mr Petroulias that I told the investigator Steve Brown that I didn't recall ever being at the premises of Productivity Incentive Corporation. Mr Petroulias then asked why, and I said, simply because I couldn't remember ever being there ." 25 Mr Aivaliotes was asked at the first trial concerning any meetings he had with Mr Geoff Strong (T883.8, 17 May 2005) (emphasis added): "CROWN PROSECUTOR: Q. You said you had no recollection of being at that meeting. Do you know or did you know in 1998 a man referred to as Geoff Strong, Productivity Incentive Corporation? A. I did meet him on an occasion, yes . Q. Do you remember the circumstances in which you met him at about that time? A. I was to give a talk on salary sacrificing to a group of people who I thought initially were from the Australian Taxpayers Association this was on the Gold Coast . I then found out that it was to be a meeting of IPT franchisees. Q. How did you come to be listed or scheduled to attend that meeting? A. Mr Petroulias directed me to go to that meeting. Q. How did that lead you to know Mr Strong? A. A Miss Barbara Smith from the Australian Taxpayers Association called me, said that an electronic ticket would be ready for me at the airport, that a Mr Geoff Strong would also be at that meeting and perhaps I could contact him, we could get a taxi together from the airport. Q. Did you do that? A. Yes, I did do that. Q. Did you meet Mr Strong? A. Yes, I did. When I arrived at the airport a gentleman introduced himself to me as Mr Strong . Q. Approximately when was that? A. I am sorry, sir, I can't recall that at the moment. Q. In what year would be a start? A. In '98. Q. Was it before or after 28 and 29 January 1998 ? A. After, sir . Q. When you met up with Mr Strong on that occasion to travel to the Gold Coast, had you met him before? Was he familiar to you? A. No, he wasn't . Q. Do you have a recollection of meeting him in any other circumstances in 1998? A. I have a vague recollection of him perhaps being at another meeting but I can't be at all definite about it . Q. What sort of meeting? A. I think was a seminar or talk ." 26 At the present trial, Mr Aivaliotes was asked by the Crown in chief (T2523.17, 30 August 2007) (emphasis added): "Q. Do you recall approximately when Mr Petroulias gave the document to you, bearing in mind it purports to refer to events of 28 and 29 January 1998? A. No sir, I don't. Q. Was it at or about that time? A. I think it was much later, sir. Q. Being approximately when? A. Um, sorry sir, I would only be guessing. I can't remember. Q. And if you have a look at the document, you will be reminded that it is quite lengthy, some 10 pages of detailed references to various discussions and is said to represent minutes of a meeting held on 28 and 29 January 1998, at which you are recorded as being present. Did you attend such a meeting on those two days, 28 and 29 January 1998? A. No, sir. Um, I attended for about an hour, the beginning, and I was introduced to Mr Strong and I sat down and I was shown some marketing promotional material. I don't know, we were discussing things for about an hour, waiting for others and Mr Petroulias said that I could go and I left . Q. Where was the meeting? A. Well, I can't remember the address but at the company's or Mr Strong's office . Q. In what suburb or part of New South Wales? A. It was in the city of Sydney, sir. Q. Who was present, to the best of your recollection? A. During the time I was there, Mr Strong and Mr Petroulias and that was it . Q. What about Mr Panos? A. No. Or, I don't know if he came, I am sorry. I just can't recall. Q. Did you know Mr Strong? A. What was the date of this meeting sir, I am sorry? Q. 28 and 29 January 1998? A. Ah, I am not sure whether I did or not, sir. I think I met him on three occasions, one was at an accountant's seminar on the Gold Coast , the other one, I think, was Parramatta, an ATA Australian Taxation Association meeting and then this one. But I am sorry, at the moment I just can't recall what the sequence was. Q. Were those events, the three events to which you have just referred, before or after 28 and 29 January 1998? A. I can't remember, sir. I think it is in one of my statements though. That is the other occasions when I met or rather came across Mr Strong." Topic 2 - Why Mr Aivaliotes Did Not Mention the Productivity Incentive Trust Plan Schemes at Meetings of the Artificial Schemes Project at Moonee Ponds in 1998 27 During evidence in chief at the first trial, Mr Aivaliotes was asked about his attendance at meetings of the ATO Artificial Schemes Project (Exhibit D18) at Moonee Ponds in 1998 (T845.48, 17 May 2005) (emphasis added): "Q. What was the purpose of the two meetings that you attended, as you understood it? A. That I was part of the group and I was to find out and get more information and experience in these sorts of arrangements. Q. As far as you could tell, what was the object of the project about which the meetings were being held? A. To uncover and discuss various arrangements and to deal with the most abusive arrangements first and then the less abusive later. Q. It's obvious from the minutes that various schemes or arrangements were being discussed, were they not? A. Yes. Q. By the time of the 9 April meeting, you had issued several rulings, had you not? A. Yes. Q. Did you refer to that fact when you were at the meeting on 9 April 1998? A. No, sir, I didn't . Q. Why not? A. I was following Mr Petroulias's lead and I considered that, if it was relevant, Mr Petroulias would have mentioned it to the meeting ." 28 At the present trial, Mr Aivaliotes was asked in chief (T2453.58, 29 August 2007) (emphasis added): "Q. By the time of that meeting on 9 April 1998, you had issued a number of rulings in relation to the productivity incentive trust plan. Did you bring that to the attention of the Moonee Ponds team as an emerging scheme? A. It wasn't an emerging scheme, it was a reasonable and acceptable scheme in line with ATO policy . Q. Did you bring it to the attention of the group? A. No. This was about a more, could I say, serious matter that we had to attend to. That was a a nothing situation . Q. When the discussion came to other promoters, as it seemed to at each of these meetings, did you mention the productivity incentive promoters in that context? A. No, sir. I had no need to . As I said, this was plainly 95 per cent Melbourne business anyway. I was there to listen and get updates on what was happening." Topic 3 - The Role of Mr Aivaliotes in Correspondence Between 24 April 1998 and 25 August 1998 Clarifying a Number of Technical Issues (Exhibits C125, C127, C129, C131, C133 and C135) 29 This topic relates to a series of ATO letters signed by Mr Aivaliotes to Mr Panos and to Richard De Bono between 24 April 1998 and 25 August 1998. Each letter involved clarification of technical issues raised in correspondence from Mr Panos and, in one case, Mr De Bono. The Crown relies upon this correspondence as revealing a pattern of favouritism by the Accused to Mr Panos. 30 At the first trial in 2005, the Crown relied upon evidence of Mr Aivaliotes to the effect that the Accused had drafted this correspondence and that Mr Aivaliotes, with one notable exception, had not exercised any independent decision making as to the content of the letters. In the one case where Mr Aivaliotes had made his own decision, and written an unfavourable letter to Mr Panos, the Crown contends that the Accused had overridden Mr Aivaliotes' view and had caused a reversal of position on the part of Mr Aivaliotes in a later letter to Mr Panos. 31 Exhibit C125 comprises two letters dated 24 April 1998 signed by Mr Aivaliotes and addressed to Mr Panos clarifying a number of technical issues. At the first trial, Mr Aivaliotes was asked in chief (T856.17, 17 May 2005) (emphasis added): "CROWN PROSECUTOR: Q. Before replying to this letter, what did you do? A. Again I considered the issues to the best I could and then I consulted with Mr Petroulias for guidance and assistance in replying . Q. Who drafted the replies to these letters? A. Mr Petroulias gave me a handwritten draft and then it was worked into a reply by me . Q. I show you two documents both dated 24 April 1998 addressed to Mr Panos. Are they the responses that you sent to the previous two letters which are in exhibits 123 and 124? A. Yes, they are, sir. EXHIBIT #C125 TWO LETTERS ADDRESSED TO MR PANOS DATED 24/4/1998 TENDERED, ADMITTED WITHOUT OBJECTION (Exhibit C125 distributed to jury) CROWN PROSECUTOR: Q. Would you look at the shorter of the two responses which are now exhibit C125? A. Yes, sir. Q. The first matter confirmed is that the Productivity Incentive Trust Plan is not a non complying superannuation fund. Was that issue one with which you were familiar? A. Not before this time sir, no. Q. The second confirmation is that division 13A of the Income Tax Assessment Act does not apply in relation to certain share situations. Was division 13A a matter with which you were familiar at that time? A. No, sir. Q. Then the third matter confirmed is that the establishment costs in respect of the Productivity Incentive Trust Plan are immediately deductible to the employer. Did you have knowledge of that issue? A. Only in the general sense of certain expenses being deductible, but not in the context of the Productivity Incentive Trust Plan. Q. Had you reached those views at the time that you wrote the letter? A. I followed Mr Petroulias' advices . Q. If you go to the second letter, the longer letter, dated the same, 24 April 1998, the first matter confirmed relates to section 108 of the Income Tax Assessment Act and refers to the proposed division 7A. Were you familiar with the issues concerning those provisions? A. No, sir. Q. And the second paragraph refers to the fact that there may not be a distribution as such when the unit holder merely becomes entitled to the corpus of the unit trust as regards distributions from the unit trusts to superannuation funds made in excess of an arms length amount, and it goes on with further detail. Was that an issue with which you were familiar at the time? A. No, sir. Q. And, finally, the third paragraph confirms that the arranger provisions of the Fringe Benefits Tax Assessment Act are not relevant. What were the arranger provisions? A. I wasn't familiar with those provisions. Q. In relation to those matters about which confirmation was provided, had you reached a view about them? A. I quickly read up on the particular issues and, again to the best of my ability at the time, they seemed to be in order. I relied on Mr Petroulias ." 32 At the present trial, Mr Aivaliotes was asked what he did as a result of receiving the letter to which Exhibit C125 responded (T2470.25, 29 August 2007) (emphasis added): "Q. What did you do, as a result of receiving that letter? A. Well, first of all I researched all the legislation and law concerned, because these were wide ranging technical issues. I discussed them also with Mr Petroulias. Q. Did you then proceed to prepare a response? A. Yes ." 33 Shortly after, Mr Aivaliotes was asked (T2473.13, 29 August 2007): "Q. What did you do about preparing a response to the request for clarification in exhibit C124? A. Well, again, because these are more wide ranging technical matters, I discussed things and spoke to Mr Petroulias about it. Q. Whose drafting is the letter which is the second in exhibit C125? A. The second one? It was a joint effort, sir . Q. Who first came up with the form of words which was used to settle the draft? A. I'm sorry, sir, I don't know, I can't recall that sort of thing as to who started and who finished . Q. In any event, both letters comprising exhibit C125 were favourable to the tax payers, were they? A. Yes, their argument's basically accepted." 34 Exhibit C127 is a letter dated 20 May 1998 from Mr Aivaliotes to Mr Panos clarifying technical issues with respect to the Productivity Incentive Trust Plan of Productivity Incentive Australia Pty Limited. 35 At the first trial, Mr Aivaliotes was asked concerning his role in this letter (T858.15, 17 May 2005) (emphasis added): "Q. What did you do upon receipt of that letter? I'm sorry, first of all do you remember in what circumstances you received it? A. Not specifically, sir, but it would have come to me in the normal way. Q. It seems to say it came via facsimile. A. I'm sorry, sir, yes, it does. Q. In any event, do you recall what you did in response to it? A. Yes. Again, I approached Mr Petroulias with it and we discussed it and I sought his views . Q. Would you have a look at this document. Is that the response to the letter of 8 May that you sent? A. Yes, sir. EXHIBIT #C127 LETTER TO MR PANOS SENT BY MR AIVALIOTES DATED 20/5/1998 IN RESPONSE TO THE LETTER OF 8/5/1998 TENDERED, ADMITTED WITHOUT OBJECTION (Exhibit C127 distributed to jury) CROWN PROSECUTOR: Q. Who drafted the reply? A. Again, it was Mr Petroulias, sir ." 36 At the present trial, Mr Aivaliotes was asked concerning this letter (T2475.6, 29 August 2007) (emphasis added): "Q. What did you do as a result of receiving this letter? A. Well, I researched the area to learn about it and looked at the particular questions being asked. Q. Did you discuss it with anybody? A. Yes. Again, I discussed it with Mr Petroulias. Q. Who drafted the reply to the letter? A. Which is exhibit 127? Q. 127? A. Let me have a look. I think, after I was satisfied as to what the answer should be, I drafted it ." 37 Exhibit C129 is a letter dated 2 June 1998 from Mr Aivaliotes to Mr Panos providing further clarification of technical issues concerning the Productivity Incentive Trust Plan. Exhibit C130 is a letter dated 9 June 1998 from Mr Panos to Mr Aivaliotes challenging the conclusion in Exhibit C129. In response to Exhibit C130, a letter dated 19 June 1998 was sent to Mr Panos by Mr Aivaliotes (Exhibit C131) in which the position adopted in Exhibit C129 was abandoned and Mr Panos' argument was accepted. 38 At the first trial, Mr Aivaliotes was asked in chief about the circumstances in which he came to sign Exhibits C129 and C131 (T859.56, 17 May 2005) (emphasis added): "Q. … Do you remember the circumstances in which you came to write two letters effectively in response to the one request? A. Sir, I actually looked at this matter in some depth and I had a bit of a debate with Mr Petroulias concerning this particular aspect . Then Mr Panos wrote the second letter and again I'm sorry. Q. I just wanted to direct your attention to -- A. I'm sorry. Q. Are you talking about the first response, which is exhibit C129 of 2 June 1998? A. Yes, sir, that's correct, yes. Q. Is that the matter which you debated with Mr Petroulias? A. Yes, it was. Q. Whose view is expressed in the response? A. Basically my view, sir . Q. Was this a view that Mr Petroulias shared? A. No, no . Q. In the first response which is exhibit C129, you have said: 'Firstly please note that the following detailed consideration by me of the arguments put by you in your letter dated 20 May 1998, that I am not in a position to confirm the view expressed by you in relation to the operation of the proposed Division 7A of Bill No. 7.,.' Et cetera. Then you say in the next paragraph: 'Secondly, please note that I cannot accept your alternative argument against the application of the proposed Division 7A to the Productivity Incentive trust plan.' A. Yes, sir. Q. And what happened as a result of those views being communicated to Mr Panos in your letter? A. The letter dated 9 June, part of exhibit C130, was forwarded to me or rather faxed to me. Q. And that asked that you reconsider your views, and then there was some further information provided? A. Yes, sir. Q. What did you do as a result of receiving that communication with Mr Panos? A. I consulted with Mr Petroulias, and this was the view that emerged . Q. By 'this', you are referring to exhibit C131 the letter of -- A. Yes, sir, that's right. Q. And whose view is set out in that letter. A. Mr Petroulias ." 39 At the present trial, Mr Aivaliotes was asked (T2477.1, 29 August 2007) (emphasis added): "Q. The document which is now exhibit C128 raises a further question about division 7A, does it not? A. Yes it does. Q. And then asks a question about some proposed legislation, does it not? A. Yes it does. Q. Were you familiar with the proposed legislation in the Bill to which reference is made in the letter? A. No, but I became familiar with it by looking it up. Q. Did you discuss the response to the letter with anybody? A. I discussed these matters again with Mr Petroulias, because they were wide ranging technical matters . Q. And if we go then to the next document behind tab C129. Is that the response that went to Mr Panos following his letter of 20 May 1998? A. Yes it is. Q. Who drafted that letter? A. I did . Q. Did you show it to anybody before you sent it? A. I think I may have shown it to Mr Petroulias . EXHIBIT #C129 LETTER DATED 2/06/1998 FROM THE ATO UNDER THE HAND OF MR AIVALIOTES TO N PANOS & ASSOCIATES HEADED 'CLARIFICATION OF TECHNICAL ISSUES PRODUCTIVITY INCENTIVE TRUST PLAN' TENDERED, ADMITTED WITHOUT OBJECTION Q. This response is not entirely favourable to the tax payer, is it? A. Well, I didn't agree with some of their arguments, no . Q. For example, in the first real paragraph you indicate, in the second line, you indicated this: 'I am not in a position to confirm the view expressed by you in relation to the operation of the proposed division 7A Bill number 7.' et cetera? A. I'm sorry, sir, this is C129? Q. Yes. A. Third paragraph? Q. First substantial paragraph. 'Firstly, please note'? A. Oh, yes, sorry. Q. I'm sorry, I jumped to the second line -- A. Okay, yes. Q. in which you said, 'I am not in a position to confirm the view expressed by you,' et cetera? A. Yes, because it still hadn't gone through Parliament and it was subject to change. Q. In the next paragraph he said: 'Secondly, please note that I cannot accept your alternative argument against the application of the proposed division 7A to the Productivity Incentive Trust Plan'? A. Yes. Q. At the end, it was not the view that was sought by the letter from Mr Petroulias? A. No, that's right. Q. And you then set out in the next paragraph why you had taken the view that you expressed. I won't read all of it but pick up the last two lines where you said: 'Nevertheless I consider that the effect of the proposed Section 109L is to require any amount paid or lent within the context of our discussion to be included as part of the assessable income for the income tax year during which such payment or loan as the case may be, as contrasted with the situation which we found ourselves as regards the Productivity Incentive Trust Plan where the amount concerned is not so included as part of the assessable income of the tax year during which the payment is made or the loan is made'. Again, was that favourable or unfavourable in the light of the questions that you had been asked? A. Well, unfavourable. It was a very complex question. Q. Yes. Did you discuss those unfavourable views with Mr Petroulias before sending out this letter on 2 June 1998? A. Yes I did. Q. Would you go to the next document that's behind tab C130. Behind the fax cover sheet there appears to be a further letter from Mr Panos dated 9 June 1998? A. Yes. Q. The effect of which, it asks you to reconsider your views expressed in the previous letter of 2 June 1998, did it not? A. Yes, sir, and we also had a few discussions on the telephone as well. Q. Right. EXHIBIT #C130 FACSIMILE TRANSMISSION DATED 10/06/1998 FROM N PANOS & ASSOCIATES TO MR AIVALIOTES ENCLOSING THE LETTER DATED 9/06/1998 FROM MR PANOS TO MR AIVALIOTES HEADED 'CLARIFICATION OF TECHNICAL ISSUES PRODUCTIVITY INCENTIVE TRUST PLAN' TENDERED, ADMITTED WITHOUT OBJECTION Q. I won't read the entire document but if one goes to the part under the heading, 'Alternative Arguments,' the tenure of it becomes apparent. It refers to your fax in which it is said you commented that you do not accept their alternative argument, accepts in your view the payment or loan would need to be included in the entity assessable income in the current year of income, et cetera. It goes on then to say, at the bottom of that page: 'We believe that the objective of this otherwise assessable rule (Section 109L) is to prevent an unfair result from arising.' and the effect, really, is to ask you to reconsider what you had expressed in your previous letter, was it not? A. Yes, and I could see that it would lead to double taxation so I was tipped over into Mr Panos's view. Q. Did you discuss the further letter which is now exhibit C130 with anybody? A. Yes, I discussed it with Mr Petroulias . Q. Did you then send a reply in the form of the document which is C131? A. Yes, that's right. Q. Whose view is expressed in this letter? A. My view. I was convinced by Mr Panos and I then, on rereading the sections with all the materials, saw that, in fact, it would lead to the same amount being taxed twice, which is obviously unfair . Q. Whose view had been expressed in the previous letter, if we can just go back to it? A. The one where I didn't agree? Q. Yes? A. Mine. Q. Who drafted the letter C131? A. I did . Q. Did you show it to Mr Petroulias before it went? A. I am not sure if it was before or after it went . EXHIBIT #C131 THE LETTER DATED 19/06/1998 UNDER THE HAND OF MR AIVALIOTES TO N PANOS & ASSOCIATES HEADED, 'CLARIFICATION OF TECHNICAL ISSUES PRODUCTIVITY INCENTIVE TRUST PLAN' TENDERED, ADMITTED WITHOUT OBJECTION Q. I'm sorry, I may have asked you this. Whose who view is set out in the letter of 19 June 1998 which is now C131? A. Mine, sir ." 40 Exhibit C133 is a letter dated 25 August 1998 from Mr Aivaliotes to Mr Panos providing further clarification of technical issues concerning the Productive Incentive Trust Plan. At the first trial, Mr Aivaliotes was asked (T861.42, 17 May 2005) (emphasis added): "Q. The response, which is exhibit C133, purports to deal with the issue of the application of division 7A. Whose view is expressed in that document? A. Mr Petroulias', sir ." 41 At the present trial, Mr Aivaliotes was asked about Exhibit C133 (T2482.5, 29 August 2007) (emphasis added): "Q. Whose view is expressed in that letter? A. My view, sir . Q. Who drafted the reply? A. I did . Q. Was that a favourable response to the question which had been posed by Mr Panos? A. Yes, because that was the only response that was open to me ." 42 Exhibit C135 is a letter dated 25 August 1998 from Mr Aivaliotes to Richard De Bono clarifying certain technical issues with respect to an application on behalf of Kane Constructions (Vic) Pty Limited. At the first trial, Mr Aivaliotes was asked (T862.25, 17 May 2005) (emphasis added): "CROWN PROSECUTOR: Q. Would you have a look at exhibit C135 when it's available, Mr Aivaliotes. Whose work is that response? A. Mr Petroulias', sir ." 43 At the present trial, Mr Aivaliotes was asked concerning Exhibit C135 (T2490.32, 30 August 2007) (emphasis added): "Q. Whose work is that response? A. It's mine sir . Q. Did you discuss it with any one before you sent it out? A. Again, going to things the way things were done in general, I may have discussed it with Mr Petroulias, I don't know ." Topic 4 - The "Snippets" Entry (MFI79) 44 During the course of submissions, the Crown withdrew its s.38 application concerning evidence of Mr Aivaliotes with respect to the "Snippets" document behind Tab C136 (MFI79). Accordingly, this topic may be placed to one side. Topic 5 - Correspondence Between 7 August 1998 and 21 October 1998 Declining to Issue Rulings (Exhibits C137, C138 and C140) 45 Exhibit C137 is a letter dated 7 August 1998 from Greenfield Fox Hansen Pty Limited, Accountants, seeking a private ruling on behalf of Four Star Tooling Pty Limited. Exhibit C138 is an ATO letter dated 21 September 1998 from Mr Aivaliotes to Greenfield Fox Hansen Pty Limited declining to issue private rulings with respect to eight companies, including Four Star Tooling Pty Limited. Exhibit C139 is a letter dated 15 September 1998 from Finance Management Corporation Pty Limited, Accountants, seeking a private ruling on behalf of Trans-West Insurance Brokers Pty Limited. Exhibit C140 is an ATO letter dated 21 October 1998 (bearing the reference details of Mr Aivaliotes) to Financial Management Corporation Pty Limited declining to issue a private ruling to Trans-West Insurance Brokers Pty Limited. 46 Mr Aivaliotes was examined concerning these documents at the first trial (T865.12, 17 May 2005) (emphasis added): "Q. Perhaps if you would have a look at exhibit C137. It seems to be a standard request, is it, for a ruling in respect of the Productivity Incentive Trust Plan? A. Yes, it does, sir. Q. What happened as a result of these applications in August 1998? A. Mr Petroulias gave me a handwritten response, draft response ." 47 Mr Aivaliotes was asked concerning Exhibit C138 (T865.39, 17 May 2005) (emphasis added): "CROWN PROSECUTOR: Q. Whose work is that response? A. Mr Petroulias', sir . Q. Did you discuss the reply with him? A. Yes, sir, I did." 48 Mr Aivaliotes was asked about Exhibit C140 (T866.49, 17 May 2005) (emphasis added): "CROWN PROSECUTOR: Q. Who drafted the response to the application? A. Again Mr Petroulias, sir ." 49 At the present trial, Mr Aivaliotes was asked about Exhibit C138 (T2493.21, 30 August 2007) (emphasis added): "Q. If you go to the document to which I directed your attention earlier which is next in the folder behind tab C138, that does appear to be the response to Greenfield Fox Hansen to the application which is now C137 and the other applications of the same date? A. Yes, it does. Q. Whose work is that response? A. That's my work ." 50 Mr Aivaliotes was asked about Exhibit C140 (T2497.40, 30 August 2007) (emphasis added): "Q. Is the reply sent that which is behind tab C140 in the folder in front of you? A. Yes, that's right. Q. Who drafted that response? A. I did sir . Q. Did you talk to any one about it before you sent it? A. I think [sic] may have spoken to Mr Petroulias, yes ." Topic 6 - Further Clarification Letters of January 1999 Concerning the Productivity Incentive Trust Plan (Exhibits C144 and C145) 51 Exhibits C144 comprises the following letters: (a) letter dated 7 December 1998 to the ATO from Mr Geoff Strong on behalf of Productivity Incentive Australia Pty Limited concerning the Productivity Incentive Trust Plan; (b) letter dated 8 December 1998 to the ATO from Mr John McLaren on behalf of McLaren Holdings Pty Limited concerning the Productivity Incentive Trust Plan; (c) letter dated 10 December 1998 to the ATO from Mr Richard Morgan on behalf of Morgan HR Pty Limited concerning the Superannuation Retirement Plan No. 1; (d) letter dated 10 December 1998 to the ATO from Mr Richard Morgan on behalf of Morgan HR Pty Limited concerning Morgan Innovations Company Solutions Plan and Morgan Innovations E-Pay Plan. 52 Exhibit C145 comprises the following ATO letters, in each case signed by Mr Aivaliotes on behalf of the Accused: (a) letter dated 13 January 1999 to McLaren Holdings Pty Limited responding to the letter dated 8 December 1998 concerning the Productivity Incentive Trust Plan; (b) letter dated 13 January 1999 to Morgan HR Pty Limited responding to the letter dated 10 December 1998 concerning the Productivity Incentive Trust Plan; (c) letter apparently dated 13 January 1999 to Productivity Incentive Australia Pty Limited responding to the letter dated 7 December 1998 concerning the Productivity Incentive Trust Plan. 53 At the first trial, Mr Aivaliotes was asked about Exhibits C144 and C145 (T881.48, 17 May 2005) (emphasis added): "Q. What did you do, if anything, about responding to that correspondence? A. Again I consulted with Mr Petroulias who provided me with a reply to be forwarded . Q. Did you personally have a view as to the position of people in the position described in the correspondence who had entered into these plans? A. No, sir, I didn't . Q. The first of the letters I referred to referred to the Productivity Incentive Trust Plan. The second from Mr McLaren referred to the Productivity Incentive Trust Plan as well. Then the third from Mr Morgan referred to the Superannuation Retirement Plan No. 1. Do you see that? A. Yes, sir. Q. Was there any difference in your view as to the position between the different types of arrangements? A. Sorry, I didn't have sufficient experience or knowledge to be able to discern . Q. Would you have a look at this document which is annexure number 7? Are they the responses that you sent to McLaren Holdings Pty Limited, Morgan HR Pty Limited and Productivity Incentive Australia Pty Limited dated 13 January 1999 in response to the previous letters? A. Yes, sir, they are. Q. Whose work is the drafting of those letters? A. Mr Petroulias ." 54 At the present trial, Mr Aivaliotes was asked about Exhibits C144 and C145 (T2520.37, 30 August 2007) (emphasis added): "Q. What did you do as a result of receiving the letters which are now exhibit C144? A. I am sure I spoke to Mr Petroulias about this, so that I could get the latest . Q. Latest? A. Well, the latest ATO view . Q. What did you do then? A. I will just look at the letter for a moment, please. Well, I got the information from him and drafted this and I think I went back to him to make sure that I had gotten it right . Q. C145 contains a letter addressed to McLaren Holdings Pty Limited dated 13 January 1999? A. Yes. Q. A letter to Morgan HR Pty Limited dated 13 January 1999 and a letter to Productivity Incentive Australia Pty Limited, I think dated the same date, although it is hard to tell. A. I think so sir, yes. Q. Did you draft each of those responses? A. Well yes, but as I said, I checked with Mr Petroulias to make sure that I had gotten it right . Q. I think each of them are in the same terms, apart from the introduction? A. Yes, but I meant the content, even though it is the same, was right. Q. The copies seem to have contained some initials in handwriting at the foot of the document? A. Yes, sir, they are my initials, 'EA per EA'. Q. Those words or, sorry, rather that writing, appears above the name of Mr Petroulias? A. Yes, sir that's the way we are asked to sign things in the ATO. For example, if something goes out under the name of Mr Carmody you put that 'per' and then you actually sign 'M Carmody' in your own handwriting. Q. Were you not entitled to write your own letters? A. Yes, but this is the protocol for how we sign letters when there is no signature stamp. EXHIBIT #C145 LETTER DATED 13 JANUARY 1999 FROM THE ATO TO MCLAREN HOLDINGS PTY LIMITED CONCERNING PRODUCTIVITY INCENTIVE TRUST PLAN; LETTER DATED 13 JANUARY 1999 FROM THE ATO TO MORGAN HR CONCERNING THE PRODUCTIVITY INCENTIVE TRUST PLAN; LETTER WHICH IS SAID TO BE DATED 13 JANUARY 1999 FROM THE ATO TO PRODUCTIVITY INCENTIVE AUSTRALIA PTY LIMITED CONCERNING THE PRODUCTIVITY INCENTIVE TRUST PLAN TENDERED, ADMITTED WITHOUT OBJECTION Q. The letters to which exhibit C145 is a response, had raised the question of the potential affect of the draft ruling on the advance opinions and private rulings which had previously been issued to those taxpayers. Did you have a view on the affect that the draft ruling would have on the previous rulings that you had issued? A. Again sir, it was a draft ruling and subject to change, discussion and modification. Q. Did you have a view yourself, when you received the letters, as to the effect of the draft ruling? A. Well, I did discuss it with Mr Petroulias and we were, we couldn't make it out. It was a change in view. It was unclear which way it would go. It didn't define the word 'associate' very well or what is a benefit very well. So it was really a first cut situation. Q. Did you personally have a view as to the position of these taxpayers in the light of the draft ruling? A. Yes, I thought that it wouldn't have any affect, that it was erroneous . Q. And that was the view which was conveyed in the replies in C145, was it not? You didn't say it was erroneous but you said -- A. Well, I am sorry sir, one thing is, the ruling does not address valuation and that goes to the benefit, and what is a benefit, and if there is a benefit how do you value the benefit? Unless it is in money, you must define it properly before you can value something." Topic 7 - Whether Two Advance Opinions and a Private Ruling Were Issued by Mr Aivaliotes (Exhibit C95, Tabs 11, 74 and 75) 55 On 4 May 2007, shortly before the second trial was aborted, I granted leave to the Crown under s.38 to cross-examine Mr Aivaliotes concerning Exhibit C95, Tabs 11, 74 and 75: R (Cth) v Petroulias (No. 16) [2007] NSWSC 506. Having regard to evidence given by Mr Aivaliotes at the present trial, the Crown makes application for leave once again to cross-examine on these matters. 56 The application relates to evidence given by Mr Aivaliotes concerning a number of documents contained in Exhibit C95, Tabs 11, 74 and 75. These documents comprise, in each of Tabs 11 and 74, an application for an Advance Opinion and the Advance Opinion given on behalf of the ATO. Tab 75 contains an application for a Private Ruling and the Private Ruling given on behalf of the ATO. 57 In each case, the Advance Opinion or Private Ruling shows, as the contact officer, the name of Mr Aivaliotes. However in Tab 11, his name is misspelt ("Aivaliotis") and appears in lower case type. In Tabs 74 and 75, his name appears in lower case type but is correctly spelt. In two of the letters, the reference area is shown as "SRA" or "SRA/LB&I" whereas it was Mr Aivaliotes' practice to include the letters "LB&I" at this point. These features are significant for the purpose of the present application. 58 At the first trial, Mr Aivaliotes was asked concerning Exhibit C95, Tab 11 (T871.45, 17 May 2005) (emphasis added): "Q. The document which constituted the application is said to be dated 16 February 1998 and the opinion granted or made was on 6 April 1998. Would you just have a look at those documents? While the exhibit is coming perhaps I can ask you to look at the copies in the copy folder behind tab 11. Does that seem to be the application for the advance opinion on the Superannuation Retirement Plan No. 1? A. Yes, it does, sir. Q. Is there behind that the advance opinion of 6 April 1998? A. Yes, that's right. Q. Were you involved in processing that application and making that advance opinion? A. No, sir, I wasn't . Q. Does it bear your name or initials? A. It does have my name as contact officer; however, it is in the lower case and my name is misspelt . Q. In relation to the lower case in which your name is printed, what is the significance of that? A. It was my habit to put my name in capital letters . Q. Are you generally in the habit of spelling your name correctly? A. Yes, that's right . Q. So do you have any recollection of any involvement in the receipt of the application and the granting of the advance opinion? A. No, sir, I don't ." 59 At the first trial, Mr Aivaliotes was asked in chief about Exhibit C95, Tabs 74 and 75 (T877.18, 17 May 2005) (emphasis added): "Q. Can I take you to the end of the schedule to item 74 and item 75. Item 74 refers to an application for an advance opinion for the Superannuation Retirement Plan No 1 by Ashley Cain Pty Limited dated 25 March 1998 and then an advance opinion on the Superannuation Retirement Plan No 1 dated 18 December 1998. Do you remember dealing with that application? A. No, sir, I don't . Q. Would you have a look at it? A. Yes. Again, I'm sorry; it's number? Q. Number 74. A. No, sir, I don't remember . Q. The advance opinion shows your name as contact officer, does it not? A. Yes, it does. Q. Is there anything about the form of that entry which is significant to you? A. Again my name is not all in capitals. The surname has lower case to it; however, the spelling is correct . Q. What does that indicate? That A. I was not the producer of this . Q. Did you become aware of the advance opinion at some stage when you were working in SIA? A. Yes, I did. Q. In what circumstances? A. Mr Petroulias came to my workstation and handed it to me and asked me to file it . Q. Then the last item on the schedule refers to an application for a private binding ruling for a non complying superannuation fund by Ashley Cain Pty Limited and the private binding ruling is dated 18 December 1998. Do you have any recollection of being involved in processing that application? A. No, sir, I don't . Q. Do the details of the contact officer on the ruling indicate anything to you? A. Again the lower case is used, and the spelling is correct, which indicates to me that it's not my work . Q. Do you have a recollection of becoming aware of the ruling during the time that you worked in SIA? A. Yes. Mr Petroulias came to my workstation, handed this to me for filing ." 60 At the present trial, Mr Aivaliotes was asked concerning Exhibit C95, Tab 11 (T2504.4, 30 August 2007) (emphasis added): "I asked you earlier in relation to the details that you normally inserted on correspondence and rulings that you issued. Are those entries in that area consistent with the format that you used? A. No, sir, usually I put my name in capitals . Q. And, as I have drawn your attention to on a number of occasions, alongside 'Our reference' your practice seemed to refer to LB&I whereas this document shows 'SIA/LB&I'? A. Yes, that's right . Q. Does that indicate to you whether you were the author of the document? A. Well, sir, it does indicate that I was the author , because I did all my work on the TaxLAN network and Mr Tang extracted the only reason why Mr Tang was able to extract this was because he searched under my user ID on the TaxLAN network, otherwise I don't know how he could have come across it. Q. Would you go across, please, to the GEMS number. Just to enlighten you, Mr Aivaliotes, the GEMS number used on these documents has a code. Prefix 261 indicates that this came from the premises of a Mr Strong? A. Yes, well, that doesn't change my mind in relation to anything. As I said, I did all my work on the TaxLAN network and Mr Tang made his extracts, as you've told me in the first trial and second trial and this trial, Mr Tang got the extracts from the TaxLAN. Q. Some of them he did? A. Well, that's the first time I'm hearing that, sir, and that schedule that he prepared was from my TaxLAN records? Q. Some were? A. Again, that's the first time I'm hearing that, sir. Q. Well, it may be, Mr Aivaliotes, but you've heard it now; this document comes from Mr Strong? A. I'm sorry, sir. I, initially I thought, because of that spelling error, because I'm not in the habit of misspelling my name, it may not have been my work but, having reflected on it, having looked at this evidence now many many times it's come to me that it must have been my work because of the language that's been used . Q. Yes? A. And the fact I did all my work on TaxLAN, and that is how the TaxLAN sets it out when you insert a letterhead, which is preprinted in blue, into the printer, or was at that time. Q. Is the spelling of your name correct? A. No, it's an error, sir, and I own up to that error . Q. I see. You were prone to spelling your name wrongly, were you? A. If I was in a rush, maybe, yes . Q. It was difficult to spell, was it? A. No, sir, but if you're in a rush and you're being pushed to get things out I may have missed it. I'm sorry, I'm not perfect . Q. And were you in so much of a rush you couldn't push the upper case button on your computer? A. Sir, are you seriously asking me to remember what I did in such detail more than nine years ago? Q. I'm asking you to -- A. No, I can't explain it, sir. I'm sorry, your Honour, I do apologise. HIS HONOUR: Mr Aivaliotes, slow down, listen to the question and answer it to the best of your ability. WITNESS: Yes. I'm sorry, your Honour. CROWN PROSECUTOR Q. Were you involved in processing that application, which is now behind tab 1 2 and which resulted in the advance opinion now in front of you, 6 April 1998? HIS HONOUR: It's tab 11, isn't it? CROWN PROSECUTOR: Tab 11, I'm sorry. Q. The one that's on the screen? A. I'm sorry, sir. Q. You can look at the application if that will assist you to answer? A. Thank you, sir. Could I have the question again, I'm sorry. Q. Were you involved in processing that application for the advance opinion which went out on 6 April 1998? A. Yes, sir ." 61 At the present trial, Mr Aivaliotes was asked about Exhibit C95, Tab 74 (T2506.8, 30 August 2007) (emphasis added): "Q. The document behind tab C74 comprises, in part, a request for an advance opinion by Ashley Cain Pty Ltd dated 25 March 1998, does it not? A. Yes, sir, it does. Q. And then behind it an advance opinion dated 18 December 1998? A. Yes, sir, that's right. Q. The application with the advance opinion is with respect to the Superannuation Retirement Plan No. 1, do you see that? A. Yes, sir, I do. Q. That was a plan about which I asked you a number of questions yesterday in relation to previous advance opinions and rulings that you had issued for a plan which was either known as the Superannuation Retirement Plan No. 1 or the Non complying Superannuation Fund Plan? A. Yes sir. Q. And, indeed, I have just taken you a few minutes ago to the documents behind tab 65 and 66, which were an advance opinion and private ruling for those plans dated 21 October 1998? A. Yes sir. Q. The draft tax ruling was published on 28 October 1998, do you remember that? A. Not specifically, sir, but yes. I mean, if that was the date, yes. Q. Do you remember the circumstances in which the application now behind tab 74 came to you for processing? A. Sorry, I don't remember the details, sir, no. Q. Do you know who issued the advance opinion dated 18 December 1998? A. Well, sir, as I've said previously, for the reasons that I've mentioned, that I did . Q. In the reference column, perhaps if you wouldn't mind extracting the opinion advance opinion from the folder, and I will have it put on the screen. HIS HONOUR: Yes. (Officer complied.) CROWN PROSECUTOR Q. Do you see that alongside 'Our reference' the initials 'SIA' appear? A. Yes sir. Q. And alongside 'contact officer' your name appears? A. Yes sir. Q. Is the spelling correct? A. Yes it is. Q. But it appears in lower case? A. Yes. Q. Unlike your normal practice of using upper case? A. That's right. Q. And 'SIA' seems to be contrary to your normal practice of using LB&I as the detail alongside 'Our reference'? A. Yes. Q. *Does that indicate to you whether or not you issued that advance opinion?* A. Well, again sir, for the reasons I've mentioned, and this particular document does not have a GEMS number so, therefore, it was taken from my user ID in TaxLAN . Q. Don't assume that. A. Sorry, sir, I shouldn't. Then, well -- HIS HONOUR: If you could just answer the question as directly as you can, Mr Aivaliotes. WITNESS: I'm sorry, I'm finding it a bit difficult. Sir, if I could have it back. (Court reporter read back question marked with an asterisk.) I think the language would indicate to me that it was my advance opinion . HIS HONOUR: So you would like to see the document? WITNESS: Yes please, your Honour. CROWN PROSECUTOR Q. You can do that but first I will, perhaps it can be returned to you, but in respect to the details to which I've just drawn your attention, at the top of the document, what does that indicate to you, if anything? A. I'm sorry, sir, you're referring now again to? Q. The reference information about SIA and your name being in lower case. What does that indicate to you? A. Nothing, sir. I'm sorry . Q. And, sorry, do you want to go ahead and look at the documents to see whether the style of it or terminology of it tells you anything? A. Yes, please. I used the plural 'We apologise' and then 'We' again. It was my habit, when I had my legal practice, to always use 'we'. Even though I was a one man practice I had gotten into that practice from when I was at Grace Brothers and other legal practice which had partners of more than one practitioner. That's one indication . Just generally the language being used, sir . Q. Such as? A. Well, it's the way I write things . Q. Such as? A. 'We apologise for the delay in finalising this opinion, as is has been a long time between the application and this.' Q. Is there something about that terminology that indicates it was your writing? A. Well, it's the way I write . I'm sorry, I don't understand what else I can point out to you. What, word by word? Q. I'm sorry, I thought you said if you can see the document you might be able to indicate from the terms in it whether you wrote it or not? A. Yes, it does indicate to me would you like me to mention every word? I'm sorry, sir, what would you like me to do? Q. You can give an example of, 'We apologise for the delay' et cetera. What else in the document assists you determining whether or not you wrote it? A. Well, the phrase, 'The fact that the trustee of the fund' this is on page 2, the sixth paragraph. 'The fact that the trustee will not be making an election,' then the next sentence, 'Accordingly, the fund will come within the definition,' is the sort of legal language that I use. Q. All right. So what do you conclude from that as to who wrote the document? A. As I said, having read all the evidence over a long time and reflected on it and having seen all of this and gone through it so many times now I would say that it's mine . Q. Do you know why there was a delay between the application dated 25 March 1998 and the response which went out on 18 December 1998? A. No I don't, sir." 62 Mr Aivaliotes was examined at the present trial concerning Exhibit C95, Tab 75 (T2511.9, 30 August 2007) (emphasis added): "Q. If you go please to the last documents in that folder behind tab 75 (witness complied). Do you see that the documents include an application by Ashley Cain Pty Limited for a private ruling for a non complying superannuation fund? A. Just one moment yes, sir. Q. The request is dated 25 March 1998? A. Yes. Q. It is addressed to your attention, is it not? A. Yes. Q. Can you remember the circumstances in which it came to your attention? A. No, sir, other than what I have already mentioned . Q. I have not asked you about it before? A. I am sorry, sir. Q. Do you recall the circumstances in which this particular document came to your attention? A. No, sir. Q. Did it come to your attention? A. Ah, well yes . Q. Would you please look at the ruling which is also behind the same tab, dated 18 December 1998? A. Yes. Q. Are you be able to say whether that ruling was issued by you? A. Yes, it was . Q. Did you note the reference details in the top of the first page of the ruling? A. Yes I did, sir . Q. (Above document placed on overhead projector) Do you note that your name appears in lower case? A. Yes, sir . Q. Does that indicate to you whether you produced the document or not? A. It doesn't indicate either way, sir . Q. The reference is shown as SIA, unlike what seems to be your normal practice of LB & I. Does that indicate to you whether you produced the document or not? A. No sir, it doesn't . Q. Do you recall the circumstances in which you issued the ruling? A. No, sir. Q. The application was dated 25 March 1998 and the ruling issued on 18 December 1998. Does that assist your recollection of the circumstances in which you either received the application or issued the ruling? A. Yes sir, the 18th December was a Friday. I looked it up on my financial calculator. Q. When? A. This morning. Q. So? A. It was very close to Christmas and I think that explains the rush and I think the ATO closes the week after that. Q. So? A. I am just saying that I was probably in a rush when I did these . Q. But I would ask you whether the dates of the application, being 25 March 1998 and the date of the ruling, being 18 December 1998, assists you in your recollection of the circumstances in which you dealt with it? A. I think it may have been from Mr Petroulias and it was delayed. Q. Do you remember when you received it from Mr Petroulias? A. No sir, I don't. Q. Had you had it for some number of months before you issued the ruling? A. I think it would have been a short period sir, I am not sure." Topic 8 - Knowledge and Experience of Mr Aivaliotes 63 Although foreshadowed, the Crown did not press a s.38 application with respect to evidence given by Mr Aivaliotes concerning his knowledge and experience. Topic 9 - Did the Accused Reveal to Mr Aivaliotes the Accused's Association with Persons Involved with the Productivity Incentive Trust Plan Including Messrs Morgan, Panos, McLaren and Strong ? 64 It is an important part of the Crown case that, at relevant times between 1997 and 1999, the Accused had a significant association with persons involved with the Productivity Incentive Trust Plan, related corporate entities and Messrs Morgan, Panos, Strong and McLaren. The Crown contends that the Accused did not disclose the existence or true nature of his association with these persons and entities to persons within the ATO at relevant times in 1997 and 1998. 65 At the first trial, Mr Aivaliotes was asked about this topic (T852.42, 17 May 2005) (emphasis added): "Q. At any time when you were dealing with Productivity Incentive Trust Plan applications or the section 264 notices that you just referred to did Mr Petroulias say anything to you about having provided legal advice to Mr Panos or anyone associated with the Productivity Incentive group and their products? A. No, sir . Q. Did you know when you were asked to deal with the rulings which you issued to Productivity Incentive Australia and Morgan HR that there was any association between Mr Petroulias and those applicants? A. No, sir . Q. Similarly when you caused the 264 notices to issue did you have any knowledge of any association between Mr Petroulias and those who responded to those notices? A. No, sir, I didn' t. Q. You continued, as I think you indicated, generally to deal with applications for rulings for Productivity Incentive Trust Plan and various variations through almost to the end of 1998, did you not? A. Yes, that's right. Q. Did you ever learn during that period of any association between Mr Petroulias and persons applying for favourable rulings in relation to Productivity Incentive Trust Plans or other products? A. No, sir, I didn't ." 66 At the second trial in May 2007, Mr Aivaliotes was asked in chief (T1272.4, 3 May 2007) (emphasis added): "Q. In due course, you issued a number of rulings to taxpayers in relation to what was described as the Productivity Incentive trust plan, did you not? A. Yes, sir. Q. And Exhibit C94, which we didn't go to, records those rulings which have been identified. At any time during your dealings with the Productivity Incentive trust plan did Mr Petroulias tell you of any association that he had with people connected with that trust plan? A. No, sir, no association . Q. And similarly, in relation to the taxpayer Morgan HR Pty Limited, at any stage did Mr Petroulias tell you of any association that he had with anyone connected with that entity? A. No ." 67 In the present trial, Mr Aivaliotes was asked (T2460.26, 29 August 2007) (emphasis added): "Q. At any stage when you were processing applications for rulings or advance opinions in relation to productivity incentive trust plans or dealing with 264 notices of the type now in front of you, did Mr Petroulias ever tell you that he had an association with people involved in the promotion of those plans? A. No. But at a meeting, I think it was, in late '97 with Mr Brooks, who had moved to banking and finance, Mr Brooks knew of the PIC and Mr Petroulias had done work for them. I think also what else? It was a long time ago. That Mr Brooks was quite comfortable with the situation. I think they had also gotten some advice from Mr Petroulias as to how they could have their plans fit in with ATO policy . Q. Did Mr Petroulias say anything to you about him having an association with those involved -- A. No, he didn't. He didn't, no . Q. How do you know about what Mr Brooks was told? A. Because I was at the meeting. Mr Brooks they were discussing PIC and Mr Petroulias was saying how he had done work for them . Q. This is you, in your presence? A. Yes . Q. All right. So something was said in your presence? A. Oh yes, but Mr Petroulias wasn't addressing me . Q. What did Mr Petroulias say on this occasion? A. Well, I can't remember the exact words, but they were discussing these sorts of plans and Mr Petroulias said something along the lines he had done work for these people before; they had been in contact with him, and he told them what the ATO's policy was now if they wanted to be compliant . Q. Where did this conversation take place? A. In Mr Brooks's office. Q. Where was that? A. I think it was on the 7th floor, and it's a separate office. He went around to the banking and finance side, which was on the other side. Sorry, I had better explain it. The floor is split into two parks [sic] . There are offices along there (indicated) and then offices along there on the other side (indicated). And it was on, if you like, the right hand side of the floor of the building. Q. What position did Mr Brooks occupy? A. Mr Brooks was Peter Brooks was head of SRA. And then when Mr Young had an argument with Commissioner Killaly and left, Mr Brooks went into Mr Young's banking and finance position. So he was head of banking and finance. Previously, he was head of SRA. That is how Mr Petroulias had that position opened up. Q. Did you know, when you were asked to deal with the rulings that you issued to Productivity Incentive Australia and Morgan HR, that there was an association between Mr Petroulias and those applicants? A. I'm sorry, what do you mean by 'association' ? Q. That he had had some involvement with, or had an association with, or some involvement or dealings with? A. I knew he had given them advice in the past at that meeting with Mr Brooks . Q. Similarly, when you issued this section 264 notice, did you have any knowledge of an association between Mr Petroulias and those who responded to the notices addressed to Productivity Incentive Pty Limited and Morgan HR Pty Limited? A. No; other than what I just said now about them being acting as a lawyer to them . Q. During the latter part of 1998, in particular in August and October, at the time when were you issuing the rulings for the company plan and the phantom plan and the non complying superannuation fund plan, did Mr Petroulias say anything to you then about him having an involvement with those, with the people behind the promotion of those plans? A. No ." Submissions of the Parties 68 The Crown made detailed submissions in support of the application (T2541-2570, 2586-2589). With respect to the seven topics which were pressed, the Crown submits that, in each case, Mr Aivaliotes has given evidence that is unfavourable to the Crown and/or has, on prior occasions, made a prior inconsistent statement so that s.38(1)(a) and/or (c) have been satisfied. The Crown submits that the Court should, in the exercise of discretion, grant leave to the Crown to cross-examine Mr Aivaliotes about his evidence concerning these topics. The Crown submits that consideration of factors relevant to the exercise of discretion in s.38(6) and s.192 of the Act should lead to the relevant grant of leave. The Crown submits that it cannot be concluded that the probative value of the evidence is outweighed by the danger of unfair prejudice to the Accused so as to warrant exclusion of evidence under s.137 of the Act. 69 Mr Sutherland SC advanced a number of submissions concerning the application (T2571-2586). 70 Mr Sutherland SC concedes relevant inconsistency with respect to Topic 1, but submits that leave should not be granted on discretionary grounds. With respect to Topic 2, Mr Sutherland SC submits that the Crown's application is based upon a false premise, namely that the Productivity Incentive Trust Plans schemes ought to have been raised at the Moonee Ponds meetings. 71 With respect to Topics 3, 5 and 6, Mr Sutherland SC made compendious submissions. He submits that the documents contained within the various exhibits under these headings raise collateral questions, whereby the Crown seeks to adduce a form of tendency evidence relating to the association between the Accused and Mr Aivaliotes. He submits that it would be unfair to Mr Aivaliotes and the Accused to grant leave under s.38 with respect to these topics. 72 With respect to Topic 7, Mr Sutherland SC relies upon the defence submissions made for the purpose of the application determined in my judgment, R (Cth) v Petroulias (No. 16). 73 In relation to Topic 8, Mr Sutherland SC submits that a number of the questions asked of Mr Aivaliotes at the first and second trial were narrow in form, enquiring whether the Accused himself had said anything to Mr Aivaliotes concerning this topic. Although a number of other questions enquired whether Mr Aivaliotes had any knowledge of the Accused's association with these persons and entities, Mr Sutherland SC submits that care should be taken to construe these questions in conjunction with the narrower questions based essentially upon what, if anything, the Accused himself had said to Mr Aivaliotes in this regard. 74 With respect to s.38(6)(a), Mr Sutherland SC acknowledges that the Accused was aware, in a general sense, that a s.38 application was likely having regard to events at the second trial in May 2007. In these circumstances, he takes no point in this trial with respect to notice by the Crown. 75 Mr Sutherland SC submits, for the purpose of s.192(2)(a), that a grant of leave would be likely to add unduly to the length of the trial given the likely explanations to be proffered by Mr Aivaliotes for his change in accounts. Reference was made to Mr Aivaliotes' evidence at the second trial when cross-examined by the Crown pursuant to leave under s.38 (T1331, 4 May 2007). 76 For the purpose of s.192(2)(b), it was submitted that it would be unfair to the Accused and to Mr Aivaliotes to grant leave to the Crown. Mr Sutherland SC points to the risk of prejudice to the Accused which may flow from s.38 cross-examination in a manner which may lead the jury to conclude that Mr Aivaliotes had altered his evidence to assist the Accused and, perhaps, that he did so at the urging of the Accused. In this respect, Mr Sutherland SC refers to statements in R v Hogan at [5], [76] and R v Ronen at [72] concerning the need for caution in this regard on a s.38 application. 77 With respect to Topics 3, 5 and, in particular, 6, Mr Sutherland SC submits, for the purpose of s.192(2)(c), that the evidence is not important to the trial being a series of collateral documents against the background of an abundance of other evidence going to the same issue. Resolution of Competing Submissions 78 With respect to each of the topics pressed by the Crown, I am satisfied that the requirements of s.38(1) have been met. Mr Aivaliotes has given evidence in the present trial that is clearly unfavourable to the Crown (s.38(1)(a)) concerning all seven topics. He has also made clear prior inconsistent statements in earlier evidence (s.38(1)(c)) with respect to each of the seven topics, with the inconsistency being stark with respect to Topics 1, 3, 5, 6, 7 and 9. 79 For the purpose of Topic 1, there has been a clear change in Mr Aivaliotes' evidence at the first trial concerning his attendance at the alleged meeting on 28 and 29 January 1998 and the occasion or occasions at which he met Mr Strong. 80 In relation to Topic 2, the issue is not whether it was reasonable to expect that the Productivity Incentive Trust Plan schemes would be mentioned at all at the 1998 Moonee Ponds meetings. The significance lies in the different explanations actually proffered by Mr Aivaliotes for his not mentioning the Productivity Incentive Trust Plan schemes at these meetings. The explanation given last week may be contrasted with that provided in 2005, and constitutes both evidence unfavourable to the Crown and a prior inconsistent statement. 81 I do not accept the submissions for the Accused that the documents relevant to Topics 3, 5 and 6 constituted collateral evidence of a type not important to this trial. It will, of course, be a matter for the jury to determine in due course the significance of these documents, viewed against the background of the totality of the evidence adduced in the trial. For present purposes, however, I am satisfied that this documentary evidence, taken with the oral evidence of Mr Aivaliotes at the first trial, is capable of demonstrating a process whereby the Accused, in effect, directed action favourable to those with whom he is alleged to have had an association, using Mr Aivaliotes as the formal face of the ATO for this purpose. I am satisfied that this evidence is important to the Crown case and to the trial generally. 82 I have had regard to the submissions made concerning Topic 7 for the purpose of my judgment, R (Cth) v Petroulias (No. 16). For the reasons contained in that judgment and the present judgment, I am satisfied that the Crown ought be granted s.38 leave in that respect. 83 There is clear inconsistency in Topic 9 concerning a most significant part of the Crown case. Mr Aivaliotes has asserted, for the first time, in the present trial that he was aware from late 1997 that the Accused had provided legal advice to persons involved in the Productivity Incentive Trust Plan and that he learned this when in the presence of the Accused. This evidence is clearly unfavourable to the Crown. Mr Aivaliotes has made clear prior inconsistent statements. Both s.38(1)(a) and (c) are triggered clearly in this respect. 84 Addressing the discretionary considerations in s.38(6), I am satisfied that the Crown gave notice to the Accused at the earliest opportunity of its intention to seek leave. As mentioned earlier, Mr Sutherland SC did not submit to the contrary. 85 With respect to s.36(6)(b), I am satisfied that the Accused will have an opportunity to cross-examine Mr Aivaliotes after the Crown has cross-examined pursuant to leave under s.38, on all specified topics and generally. 86 Consideration of these factors under s.38(6) supports the grant of leave in each case. 87 By reference to s.192(2)(a), it is apparent that the making of this application, and any consequential grant of leave, will add to the length of the trial. Section 192(2)(a) requires consideration to be given to the extent to which a grant of leave would add unduly to the length of the trial. Mr Aivaliotes is an important witness in the Crown case. In my view, the specified topics are all matters of importance to the Crown case, with some more important than others. I anticipate that any cross-examination by the Crown pursuant to a grant of leave will be focused and to the point. It is likely that explanations provided by Mr Aivaliotes for his changing accounts will extend his evidence, including any cross-examination on behalf of the Accused. In the context of the present lengthy trial, however, I do not consider that this would add unduly to the length of the trial. 88 In relation to s.192(2)(b), I do not consider that a grant of leave would be unfair to the Accused or to Mr Aivaliotes. With respect to the Accused, he will have an opportunity to cross-examine Mr Aivaliotes concerning his evidence in chief and evidence given in response to cross-examination by the Crown pursuant to s.38. With respect to suggested unfairness to Mr Aivaliotes, I am satisfied he has given markedly different accounts at this trial compared to his evidence at the first trial on the specified topics. He is an important witness in the Crown case. Mr Aivaliotes will have an opportunity to explain why his evidence has changed. Where a witness has altered his account from that given in evidence on an earlier occasion, this may pose difficulties for the witness at the later trial. If there is a risk of self-incrimination, the provisions in s.128 Evidence Act 1995 may be called in aid. In my view, no unfairness will be caused to Mr Aivaliotes from a grant of leave to the Crown to cross-examine him concerning the specified topics. 89 I have considered Mr Sutherland SC's submission concerning the risk of prejudice to the Accused, based upon R v Hogan and R v Ronen. The learned Senior Crown Prosecutor is alive to the possible prejudice which may flow to the Accused as a result of cross-examination of Mr Aivaliotes on these topics pursuant to a grant of leave under s.38. In answer to a question from me, the Crown placed on record his intended approach in this respect (T2588.10, 31 August 2007): "CROWN PROSECUTOR: I have been very sensitive to that concern and I am alert to the fact that this may have the capacity to prejudice the accused. My current inclination is to approach the matter with Mr Aivaliotes should leave be granted on the basis that his change of evidence is largely motivated by self interest rather than protection of the interests of the accused. What I have in mind in terms of rationalising his conduct is to broadly suggest to him that he may have realised that the evidence that he gave earlier exposed him as someone who made absolutely no intellectual contribution to the work which he performed and of his continuing career in the tax office, undermined his prospects, and that in large part what he now says is designed to promote himself as a more experienced and professional officer who wasn't simply a puppet of the accused at the time. In that sense I thought that that goes some way to avoiding the suggestion that what he is doing now is deliberately designed to protect the interests of the accused. I don't have any basis for putting to him that he has recently collaborated with the accused or anybody else that justifies his change of evidence. HIS HONOUR: Once again, using Ronen as the point of comparison, Mr Sutherland drew my attention to paragraph 72 in the judgment of Whealy J where his Honour noted the need for care and noted the Crown had given his Honour an assurance that [he] would tread the path carefully. What you're putting to me in a rather more detailed way is the way in which you would seek to deal with this issue if leave was granted. CROWN PROSECUTOR: On the basis that if I follow that approach it would seem to me it minimises as much as possible any risk of an adverse reaction towards the accused." 90 I am fortified in my conclusion that the risk of prejudice or unfairness to the Accused will be greatly minimised by the Crown's intended approach to cross-examination of Mr Aivaliotes. 91 As the Court of Criminal Appeal made clear in R v Parkes and R v Le, one of the purposes of s.38 is to allow a truer picture to be presented to the jury than would have been the case had the Crown been refused leave to cross-examine. This serves the interests of justice. I am satisfied that a grant of leave will advance the administration of justice in this case. Conclusion 92 I am satisfied, with respect to each topic, that the requirements of s.38(1) have been met. Having considered factors relevant to the exercise of discretion, including those under s.38(6) and s.192 of the Act, I am satisfied that leave should be granted to the Crown to cross-examine Mr Aivaliotes concerning each topic. In relation to each topic, I am not satisfied that evidence ought be excluded by application of s.137 Evidence Act 1995. Order 93 It was for these reasons that, on 3 September 2007, I granted the Crown leave under s.38 Evidence Act 1995 to question Emmanuel Dimitrios Aivaliotes, as though the Crown was cross-examining him, about evidence given by Mr Aivaliotes concerning Topics 1, 2, 3, 5, 6, 7 and 9 identified earlier in this judgment. Postscript 94 Following the grant of leave to the Crown announced on 3 September 2007, the Crown produced a more detailed form of the schedule MFI80, containing additional references to statements made by Mr Aivaliotes between 1999 and 2001 and evidence given by him at committal proceedings in 2001 (MFI82). The Crown indicated that it proposed to cross-examine Mr Aivaliotes, pursuant to the grant of leave, with respect to these additional references in statements and evidence, which were said to be further examples of unfavourable evidence or prior inconsistent statements within one or more of the seven specified topics (T2596.51). To the extent that MFI82 contained further examples of this type, and no doubt in light of my ruling, Mr Sutherland SC stated that he had no difficulty with this occurring (T2598.4). The cross-examination of Mr Aivaliotes by the Crown, pursuant to leave, proceeded accordingly. ********** 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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