Court of Criminal Appeal Supreme Court New South Wales Medium Neutral Citation: Rundle v R [2013] NSWCCA 200 Hearing dates: 13 December 2012; 12 February 2013; 13 February 2013 Decision date: 28 August 2013 Before: Simpson J at [1]; Fullerton J at [118]; Davies J at [146] Decision: Appeal against conviction be dismissed. Catchwords: CRIMINAL LAW - appeal - conviction - appellant convicted following trial of two offences pursuant to s 178BB(1) of the Crimes Act 1900 - whether jury verdicts unreasonable or cannot be supported by the evidence - ample evidence on which jury could find charges proved - charges proved beyond reasonable doubt - materiality of statements known to appellant - appeal dismissed Legislation Cited: Crimes Act 1900 Category: Principal judgment Parties: Graeme John Rundle (Appellant) Regina (Respondent) Representation: Counsel: M Thangaraj SC/I McLachlan (Appellant) P McDonald SC/J Single (Respondent) (13/12/12) P McDonald SC/Y Shariff (Respondent) (12/02/13-13/02/13) Solicitors: Lemonis Tantiprasut (Appellant) Commonwealth Director of Public Prosecutions (Respondent) File Number(s): 2009/218704; 2009/218711 Decision under appeal Jurisdiction: 9101 Date of Decision: 2011-09-09 00:00:00 Before: Bozic DCJ File Number(s): 2009/218704; 2009/218711 Judgment 1SIMPSON J: On 24 June 2011, following a six week jury trial in the District Court, the appellant was convicted of two counts on an indictment. He now appeals against the convictions. He does not seek leave to appeal against the non-custodial sentences subsequently imposed. 2Both counts on the indictment were laid under s 178BB(1) (since repealed) of the Crimes Act 1900. At the time the offences are alleged to have been committed, that sub-section provided as follows: "178BB Obtaining money etc by false or misleading statements (1) Whosoever, with intent to obtain for himself or another person any money or valuable thing or any financial advantage of any kind whatsoever, makes or publishes, or concurs in making or publishing, any statement (whether or not in writing) which he knows to be false or misleading in a material particular or which is false or misleading in a material particular and is made with reckless disregard as to whether it is true or is false or misleading in a material particular shall be liable to imprisonment for 5 years." 3Each count alleged that the appellant, on or about 31 May 2004, with intent to obtain a financial advantage for Scots Church Development Pty Ltd [one of a group of companies of which the appellant was an employee], published a statement that he knew to be false or misleading in a material particular. Both charges arose out of a letter written by the appellant on 31 May 2004, which the Crown alleged contained two statements that were false or misleading in a material particular. The charges came to be referred to, respectively, as "the mezzanine charge" and "the profit charge". 4The appellant did not give or call evidence. His response to the charges relied upon analysis of the extensive documentation in the Crown case. The appellant's case was and is that neither statement was, when properly read in the context of the voluminous correspondence and dealings that pre-dated the letter, proven to have been false or misleading, and that, even if either statement were to be so construed, it was not proven to have been false or misleading to the knowledge of the appellant. Critically important to the appellant's case is the context of previous correspondence and dealings between relevant participants. 5An issue also arises concerning the materiality of each of the two statements. 6The sole ground of appeal upon which the appellant relies is that the verdicts of the jury are unreasonable or cannot be supported by the evidence. In order to deal with the ground, it is necessary to set out a good deal of background. A very large quantity of documentary material was in evidence. Background 7In 2004, the appellant had for some time held the position of Chief Financial Controller of a group of companies known as "The Westpoint Group" ("Westpoint") of which the principal was Mr Norman Carey. One of the companies in the group was Scots Church Development Pty Ltd ("SCD"). In July 2001 SCD purchased land in York Street, Sydney, on which stood a church (the Scots Church). SCD proposed to redevelop the site into a mixed commercial/residential complex to be called "Portico". From late 2002 Mr Luke Gregory was employed, on a contract basis, by Westpoint. His title was "Senior Finance Manager" or "Senior Manager, Finance" (T 424). 8It was the task of the appellant and Mr Gregory to secure finance for the project. It was proposed that this be achieved by two means. The first was funds advanced by a financial institution, secured by first mortgage on the real estate. This was called "senior debt". In fact, $10 million had been advanced, by Colonial First State Investments Ltd and Perpetual Nominees ("Colonial/Perpetual"), for the purchase of the property. The second means of obtaining finance proposed was the raising of funds by invitation to the public to subscribe to an issue of fixed term promissory notes of not less than $50,000 each, which would be unsecured, but offered at an attractive interest rate. This was referred to as "mezzanine debt". Funds for mezzanine debt were to be raised by York Street Mezzanine Pty Ltd ("York Street Mezzanine"), a member of Westpoint, of which the appellant was secretary, and lent to SCD. 9In addition, Westpoint had contributed some funds. The $10 million purchase price incurred a GST of $865,000. The raising of the mezzanine funds, which commenced in 2002, incurred commissions payable to the fundraising agents, and interest which was payable monthly. There were also potential payments, known as "kicker payments" to be made in the event that SCD sought to extend the terms of the promissory notes. Other costs were also incurred in the preparation for the development, such as consultants' fees, council and other regulatory agency fees, and legal fees. These had been paid or were payable by SCD/Westpoint. 10It is necessary at this stage to set out a chronology of relevant events leading up to the letter of 31 May 2004, the foundation for the charges. Chronology 2002 11Some time before 30 June 2002 (see AB 762) SCD released an "Information Memorandum" (Ex C64), outlining its proposal to raise funds totalling $80 million for the Scots Church development. This was said to be made up of $60 million "currently being arranged" (senior debt), and $20 million by the issue of promissory notes (mezzanine debt). The Information Memorandum invited subscription to the promissory note issue. Although the document was not, and did not purport to be, a prospectus, it was at times referred to as such. 12The invitation to investors was successful and significant sums were contributed by the members of the public. 13In late 2002 the appellant and Mr Gregory approached a number of lending institutions with a view to obtaining senior finance for the project. Eventually, at Mr Gregory's suggestion, the appellant made contact with Mr Brett Lennane of Capital Finance Australia Ltd ("CFAL"). CFAL was an unlisted public company based in NSW that provided commercial finance for property development and investment. It was a subsidiary of the Halifax Bank of Scotland plc ("HBoS"), which supervised CFAL's operations. Mr Lennane was the State Manager, Property and Finance in CFAL. He answered to Mr Rod O'Neill, the head of CFAL's Property and Finance Division. Ultimate decisions with respect to finance applications of the kind here in question lay with HBoS in Scotland. Mr Charles Maclaren was the Senior Director of Credit Risk in HBoS, and reviewed all finance applications from CFAL in Australia. 14On 19 November 2002 a meeting took place between the appellant and Mr Lennane. What the appellant sought to do was have CFAL advance the sum of $70 million, $10 million of which would be applied towards discharging the existing debt to Colonial/Perpetual, which would then become incorporated in the single advance from CFAL. Following the meeting, Mr Lennane raised a number of queries about the proposal. 15As a consequence, on 25 November 2002, the appellant wrote to Mr Lennane, answering various of those questions, and attaching what he called a "Static Analysis" which, he said, he believed provided "an accurate estimate of the current project feasibility for the project" (Ex D14, italics added). The "Static Analysis" was the first of a number of documents of similar format. It will be necessary in due course to have regard to some of the later like documents. 16Essentially, in the Static Analysis, the appellant attempted to demonstrate to Mr Lennane how the project would be funded, if CFAL acceded to the finance application. The important issue for CFAL at that time was the relative contributions of SCD/Westpoint to the costs of the project - that is, of the total anticipated cost of the project, what would be funded by "debt" (that is, from the CFAL loan, assuming that it eventuated) and what would be funded by "equity" (that is, by SCD/Westpoint). The Static Analysis showed that the appellant proposed that cost items such as GST on the acquisition costs (purchase), construction costs of $11.7 million, consultants' fees and various others, would be paid by SCD/Westpoint. To be paid out of any CFAL loan was the $10 million acquisition (purchase) price, $53 million plus construction costs and contingencies, and interest of $5.4 million - a total of $70 million (an increase on the $10 million that had been signalled as borrowings in the Information Memorandum). It seems reasonably plain that "Equity" to be provided by SCD/Westpoint included the funds raised by mezzanine debt. 17The Static Analysis showed that the total anticipated costs for the project were $93 million, of which $23 million would be contributed by SCD/Westpoint, and that costs of $20 million had already been paid or were payable. That figure included $1.6 million of the total anticipated construction costs of $65 million, $11.7 million of which were attributed to equity - ie to be paid by SCD/Westpoint. 18On 27 November Mr Lennane replied (Ex C61), pointing out that the Static Analysis break up of costs was substantially different to "the last break up" (which is not in evidence), and observing that the issue was important "as it has implications for viability". He also said: "Two of our primary issues are subscription of equity and 'cost to complete'. We need to be clear on these matters, for example you say in your break up that you will fund $11.7m of construction costs, but at close you have only funded $1.6m meaning that we have an immediate cost to complete problem of $10.1m." He invited the appellant to call to discuss the matter further. 19In December 2002 the appellant made a PowerPoint presentation to Mr Lennane, with a document entitled "Scots Church Development 'Portico' Capital Finance" (Ex D13, AB 885-924). The presentation provided information to Mr Lennane concerning the proposal to develop. It named the builder as "Broad Constructions". It included one page headed "Agreed Project Cost Budget" and another headed "Agreed Project Profit Budget". (The word "Agreed" in each of these documents represented an aspiration on the part of the appellant and SCD/Westpoint. Mr Lennane made it clear in his evidence that, at that point, he had not reached any agreement as to the provision of a facility, nor, if any facility were granted, to what costs of the project it would be directed.) The Cost Budget replicated the Static Analysis (part of Ex D14). This made clear that the funding sought from CFAL was $70 million (consistently with the Static Analysis, but inconsistently with the Information Memorandum). 20On 6 December Mr Lennane sent to the directors of SCD (marked for the attention of the appellant and Mr Gregory) an "indicative offer", which was non-binding, but stated the terms on which CFAL may be prepared to provide a loan facility (Ex C38). The facility amount specified was $71,172,000, of which $1,172,000 was attributable to GST. A number of "special conditions" were identified. One of these was nomination of a builder approved by CFAL. Another was that the development proceed in accordance with an attached "Equity/Facility Table". The attached "Equity/Facility Table" was in similar format to the Static Analysis and the "Agreed Project Cost Budget", although the line items were not identical, and the amounts varied. However, it is clear that the document was designed, like the Static Analysis, to identify individual costs of the project, and to identify those to be paid by SCD/Westpoint ("Equity"), and those to be paid out of any loan funds advanced ("Facility"). 21Thereafter was a considerable volume of correspondence and interchange between the appellant and Mr Gregory on behalf of SCD/Westpoint, and Mr Lennane on behalf of CFAL. I will attempt to confine references to those communications which have significance for the purpose of the single ground of appeal. That, however, involves a substantial amount of the correspondence. 22On 16 December Mr Lennane sought further information (Ex C39) to which Mr Gregory (after consultation with the appellant) replied (Ex C41). One of the questions raised by Mr Lennane concerned how the mezzanine finance had been raised. 23On 20 December Mr Gregory emailed Mr Lennane (copied to the appellant) confirming that SCD was "not drawing out profit from the front end", and itemising "costs incurred to date or paid prior to financial close", a total of $22.4 million (Ex C71). (The evidence explained "financial close" to be the date of draw down of any loan fund made available.) The denial that SCD or Westpoint were "drawing out profit from the front end" anticipated a suspicion expressed in writing two days later by Mr O'Neil (Ex C63), and may well have reflected some discussion between the appellant, Mr Gregory and Mr Lennane. 24On the same day (20 December), Mr Lennane (or somebody in CFAL) prepared a "Project Analysis" (Ex D15). (In his oral evidence, Mr Lennane described this as "a very complicated cash flow development feasibility model" (T 659/20).) This document, consisting of five pages, contained, inter alia, a list of "Detailed Costs", a "Project Outcome", and an Equity/Facility Table that appeared under a heading "CFAL Loan Structure", and a "CFAL Risk/Reward Analysis". 25Mr Lennane submitted the application to Mr O'Neill, who raised a number of queries and concerns about the proposal (Ex C63). He drew attention to the discrepancy in the amount stated in the "prospectus" (the Information Memorandum) as being raised by way of senior debt ($60 million), and the amount stated in the application ($71 million). He noted that the promissory notes were repayable on 31 March 2004, but that the anticipated completion date of the project was August 2004, meaning that the moneys repayable on the promissory notes would be due prior to completion (and, therefore, presumably, receipt of revenue). He asked if CFAL was in any way at risk (even "reputational risk") if the "prospectus" was false or incorrect or "materially at odds with project fundamentals". In respect of this last query, he required a "formal reply". 26Mr O'Neill commented adversely on another Westpoint project in Melbourne, and required information about it. He noted that Mr Lennane's summary of SCD's 2002 accounts was "at odds with the rest of the numbers" and asked about specific items. He specifically asked where the interest costs (for the mezzanine finance, which he estimated to be $4 million) was coming from, as those costs were not reflected in any of the "numbers presented". 27He expressed the suspicion mentioned above that SCD/Westpoint were taking "up front cash" out of mezzanine funds. 2003 28As a consequence of Mr O'Neill's concerns, Mr Lennane took advice from solicitors (Gadens) and, on their advice, proposed that a special condition be incorporated into any loan agreement, in the following terms: "CFAL is to be satisfied that the mezzanine finance of $20m supported by the promissory notes is upon terms and conditions satisfactory including satisfactory expiry dates of the notes (or other evidence of ability to repay on expiry date) and that all documentation relating to the promissory notes including any information memorandum and supplementary memorandum is also acceptable." 29In respect of Mr O'Neill's concern about discrepancies between the accounts and other information, Mr Lennane on 7 January (Ex C66) advised Mr O'Neill: "The accounts reflect the project costs to balance date and the impact of the Promissory Notes receipts on both sides of the Balance Sheet. The client's Financial Controller did advise me that, at balance date, the Note issue was oversubscribed and that surplus funds had been returned/reapplied towards other projects." 30In respect of Mr O'Neill's expressed suspicion that SCD/Westpoint were siphoning off mezzanine funds, Mr Lennane proposed adding another special condition, in the following terms; "The Project Auditor is to verify to the satisfaction of Director, Property that project costs of $22.1m (refer below) have been incurred by the Borrower prior to the Initial Advance (refer equity/facility table), and that those costs are not included in remaining project costs as set out in the equity/facility table ..." (The word "incurred", referred to in the proposed special condition above, was crossed out and replaced by the handwritten word "expended".) Mr Lennane then set out a list of costs totalling $22.1 million. This list appears to have been drawn from the list of costs provided by Mr Gregory in December 2002 (Ex C71), with minor deletions, and some rounding of the figures. 31On 8 January, Mr Lennane prepared a "Credit Application Report" for HBoS (Ex C67). It included, under the heading "Trading Highlights", the following: "The assets and liabilities of the company [SCD] relate solely to the subject project, comprising site costs other inventories and related funding. Mezzanine funds of $27m were raised to year-end and since balance date the surplus ($7m) has been repaid and rolled into other Westpoint Group ventures. The funds are currently reflected as inventories in the balance sheet. In accounting terms, the company made a small profit for the year ..." Under the heading "Initial Funding $1.722m", Mr Lennane wrote: "Colonial First State and Perpetual Nominees provided funding to purchase the site and meet subsequent expenses. These liabilities will be replaced by funds from CFAL's loan facility and $20m of mezzanine debt that [SCD] raised through a prospectus, to be secured by a second mortgage over the site and due for repayment after completion of the project." [There followed a list of costs, including, by way of example, land and acquisition costs of $10.9 million, legal fees and so forth, totalling $22.1 million.] 32Mr Lennane attached as an annexure special conditions he proposed in the event that the loan was approved. This included the following: "1. The following conditions must be complied with before the initial advance is made. (a) ... (b) The Project Auditor is to verify to the satisfaction of Director, Property that project costs of $22.1m (refer below) have been expended by the Borrower prior to the Initial Advance (refer Equity/Facility Table), and that those costs are not included in the remaining project costs as set out in the Equity/Facility Table: [There followed the list of costs set out previously under 'Initial Funding'.] (c) CFAL is to be satisfied that the mezzanine finance of $20m supported by the promissory notes is upon terms and conditions satisfactory including satisfactory expiry dates of the notes (or other evidence of ability to repay on expiry date) and that all documentation relating to the promissory notes including any information memorandum and supplementary memorandum is also acceptable." 33There was then a series of emails (Ex D9), commencing 8 January 2003, in which Mr Lennane sought, and the appellant and/or Mr Gregory supplied, further information. Mr Lennane told the appellant: "The base issue is the mezzanine finance and how it then affects Scots financials." He noted that the notes issue had been oversubscribed by $7 million and that some funds had been returned and "rolled" into other ventures. 34On 10 January the appellant replied. He advised that the current expiry date of the majority of the promissory notes on issue was March 2004. He wrote of a program to extend the expiry date of notes in the event of delays. In respect of the oversubscription issue, he wrote: "3. The funds raised pursuant to the York Street Mezzanine raise have been received progressively over the last 12-18 months. The rollover process explained above has been used recently to roll investors into similar mezzanine investments with our other projects which has and will continue to address any oversubscription." [C42] 35On 10 January the appellant again emailed Mr Lennane (Ex D9) saying, inter alia: "1. The list of costs incurred to date sent to you by Luke [Gregory] on 20 December 2002 which totalled $22,394,322 represents a subset of the costs shown in the balance sheet as at 30 June 2002 under the heading inventories. The difference relates primarily to costs incurred in relation to the mezzanine raising (upfront commissions plus interest paid) as well as the profit recognised for the year to 30 June 2002 of $3.2m ..." The "list of costs" to which he referred was the list of costs contained in Mr Gregory's email to Mr Lennane on 20 December (Ex C71). 36On 14 January, on behalf of CFAL, Mr Lennane wrote to the directors of SCD offering a loan facility in the amount of $71,172,000 (Ex C43) (of which $1,172,000 was GST provision) on stated terms and conditions (Ex C43). Special conditions specified included conditions as set out in the draft of Mr Lennane [C67] - ie 1(b) (satisfactory verification that costs of $22.1 million had been expended, and were not included in the remaining project costs) and 1(c) (ie satisfactory verification that the mezzanine funds of $20 million had been issued on satisfactory terms). Attached to the letter of offer was an "Equity/Facility Table", giving estimates of how the funds advanced were to be expended, and what was to be contributed by "Equity", but reserving the right to vary or depart from that programme. 37A condition of the offer was that the initial advance under the facility be drawn within 90 days of the date of offer, failing which the offer would lapse (unless other agreement was reached with CFAL) [C43]. 38On 28 January SCD accepted the offer (Ex C70). 39On 30 April Mr Gregory wrote to Mr Carey and the appellant setting out a revised funding strategy for the project (Ex C45). 40No draw down having been made within 90 days of the offer by CFAL, in accordance with the specified terms and conditions, the offer lapsed. 41On 30 June, acting as secretary of York Street Mezzanine, the appellant wrote to the directors of SCD advising that the balance of the loan owing by SCD to York Street Mezzanine was $39,326,190 and that the loan was interest bearing and unsecured. He made no mention of any proposal to redirect funds in excess of the $20 million initially proposed, and subject of advice to CFAL (Ex C59). 42SCD's June 2003 accounts showed Work in Progress to the value of $54,626,192. Since the sole purpose of SCD was the development of the church and the construction of the Portico project, this amount had to be referable to that project. That contrasted starkly with the incurred costs shown in CFAL's letters of offer (Ex C43), and Mr Gregory's list of incurred costs as at December 2002 (Ex C71) - respectively, $22.1 million and $22.394 million. 2004 43On 23 January, the appellant, in his capacity as Chief Financial Controller of Westpoint, wrote to Mr Lennane seeking to reactivate the loan application (Ex C46, T 653). He advised that, since the approval of finance had been given, the project had progressed significantly and "Westpoint Constructions" had taken over from Broad Constructions the responsibility for delivery (ie as builder) and had commenced early works. He also advised that Westpoint Constructions had undertaken a complete revision of the programme and pricing which had resulted in changes to the timing and cost, in such a way as to affect information previously provided to CFAL which formed the basis for the original finance approval. He attached a Revised Project Cash Flow which showed that it was anticipated that $57,457,495 was needed to complete the project, and that, on completion, SCD would hold as cash $26,230,075, a return on the project of 30.43 percent. He also provided a revised Equity/Facility Table. He identified various changes in the figures previously supplied. He asked for confirmation that CFAL would accept the revised Equity/Facility Table for the purpose of permitting drawdown of the loan facility previously approved (Ex C46). 44On 17 February Mr Lennane recommended that, notwithstanding substantial delays in the project, CFAL accept and approve the appointment of Westpoint Constructions as the substitute builder, and otherwise approve the loan in the same terms as previously (Ex C72). By this time, however, the amount of costs expended by SCD/Westpoint mentioned in proposed special condition 1(b) was $32.6 million (see Ex C49). 45On 24 February (Ex D5) the appellant prepared answers to further queries of Mr Lennane, which included the following: "A number of the costs included in the 30 June 2003 Work in Progress balance represent 'soft' costs not included in the makeup of the equity required by the finance approval. Costs in this category include mezzanine debt raising and interest costs, previous 'land' debt establishment fees and interest, marketing and project management costs. In addition, in accordance with accounting standards as signed off by our auditors, the Work in Progress balance includes an accrual of project profit which is recognised on a percentage of completion basis. The important point to note here is that once the project is completed, taking account of timing differences and profit accruals, the profit per the revised cash flow given to CFAL on 23 January 2004 and the overall project profit (excluding equity/mezzanine costs) disclosed in the accounts of Scots Church Development Ltd will be the same. The other important point to note is that as set out in the revised Cash Flow project given to CFAL on 23 January 2004, costs to complete as at 31 December 2003 were $57.5m which will be independently certified by CFAL's quantity surveyor ensuring that there are always sufficient funds remaining in the facility limit to complete the project" These answers were an explanation for the discrepancy between the costs incurred shown in Mr Gregory's letter of December ($22.394 million) and CFAL's information in January as compared with what appeared in the June 2003 accounts ($54.6 million). They were forwarded by Mr Gregory to Mr Lennane. 46On 25 February Mr Lennane sent Mr Gregory a facsimile (Ex D8) which commenced: "Following are a preliminary summary of the project's outcome and an equity/facility table, which are based on my initial understanding of the information provided to date. Please contact me after you have reviewed the summary and table." (bold added) This was followed by two tables. The first was headed "Project Outcome", showing projected revenue of $109,288,000, a total project cost of $89,203,000, and a profit of $20,085,000, or 23 percent of total cost. The second table was a "Proposed Equity/Facility Table" which included costs under various categories, apportioned as to Equity and Facility. The list included items such acquisition costs, and construction, similar to previous lists of the same kind, and also "Other Costs". Mr Lennane placed an asterisk against this entry. 47Handwritten on the document was a note to Mr Gregory in the following terms: "Luke, this is the outstanding item to be clarified. Also though, I would like an update of development costs to date. Refer Condition 1(b) as discussed." The reference to "Condition 1(b)" was a reference to the Special Condition contained in the letter of offer, requiring that the Project Auditor verify, to the satisfaction of CFAL, that project costs of $22.1 million had been expended by Westpoint prior to the initial advance and were not included in the remaining costs set out in the Equity/Facility Table. 48Mr Lennane's oral evidence about this Equity/Facility Table was that it was "cut and pasted" from CFAL's Project Analysis, an earlier example of which is D15. (The Project Analysis from which this Table was taken was not in evidence.) Mr Lennane said that the Project Outcome section, also cut and pasted into the document (Ex D8), was irrelevant to the purpose of his then communication with Mr Gregory, and was included by inadvertence. 49On 27 February Mr Lennane prepared a fresh Credit Application Report (Ex C73) for HBoS. Included in this report, under the heading "Trading Highlights", was the following: "The assets and liabilities of the company relate solely to the subject project. Assets substantially comprise the cost of the site ($10m), capitalised development costs ($30.7m, including 'construction' expenditure, project soft costs and internal management fees), borrowing costs ($9.6m) and profit recognised to date in accordance with Australian Accounting Standards ($4.3m). Debt is made up of first mortgage site funding $12.5m and mezzanine funding of $39.3m. Surplus mezzanine funding was to be rolled over into other Westpoint ventures but remains on foot because of project delays. These delays have had a significant effect on project profits, however they have no impact on project viability from this point forward ... He then provided a list of project costs totalling $32.6 million. Mr Lennane recommended approval of the revised proposal. 50It is to be observed that mezzanine funding had almost doubled, from $20 million in 2002-2003, to $39.3 million, from the previous such report. 51On 27 February Mr Lennane wrote to Mr Rogers (head of the CFAL Credit Risk Department) (Ex C74), answering questions raised by Mr Maclaren. He advised that the outstanding debt to York Street Mezzanine was $39.3 million (as at 30 June 2003), and that the cost to complete the project at present, "but ignoring the $16m construction progress made ..." was $69.705 million. 52On 3 March Mr Lennane reported (Ex C75) to HBoS on the updated finance application made by SCD. He included a section headed "Viability", under which he appears to have forecast a profit (or surplus), of $4.35 million. He arrived at this figure by deducting the CFAL debt ($71 million) and mezzanine debt ($39.33 million) from anticipated gross revenue ($113.684 million net of GST). However, he noted that that figure ignored several identified "profit items". These appear to represent amounts paid or payable between different Westpoint companies (eg the builder's profit component, the Westpoint building company having taken over the construction) that would on completion of the project, sound in profit to Westpoint. He made the following observation: "2(b) When we first looked at this deal the project returns were obviously better and there is no question that delays and other issues ... have eroded the returns. However, last year we received a substantial establishment fee for the deal and we have a prima facie obligation to continue to support the client notwithstanding the reduced project returns, but only on the basis that our risk position is acceptable. In this regard our maximum exposure of $71.2m is supported by back end equity of $42.5m, which is supported by a largely presold project with sound physical fundamentals." (bold in original) 53On 10 March SCD sought to refinance the mezzanine debt. A new Information Memorandum was published which showed the then current mezzanine funding as $30 million. The appellant sent this to Mr Tony Hazell, a finance broker with whom Westpoint was dealing, with a view to refinancing (T 467) (Ex C47, AB 581). 54At some time in March 2004, and notwithstanding Mr Lennane's support, HBoS rejected SCD's application (see Ex C48). During March or April, on the evidence of Mr Gregory, he had discussions with the appellant. Mr Gregory's evidence was that the appellant said, with respect to the mezzanine funding: "... something like 'Look, we can't tell Capital [CFAL] that we're above 40 million, because that's going to cause them some concerns. I'm concerned that they won't fund the project. So we'll need to consider a strategy around keeping it at 40 million and rolling out investors'." (T 474) Although, in cross-examination, this evidence was touched upon (T 527-8), Mr Gregory's account of the communication was not directly challenged, and no contradictory evidence was called. 55Notwithstanding that rejection, at some stage in or prior to May 2004 SCD renewed its application for finance from CFAL. That application also was supported by Mr Lennane. 56Mr Lennane proposed special conditions in similar terms to those previously recommended, with a variation to special condition (b) so that the mezzanine finance level referred to was $39.3 million (Ex C76). 57On 13 April a Westpoint internal document (Ex C2) showed that the then current level of mezzanine subscription for York Street Mezzanine was $40 million, of which $10.9 million represented "Agreed Rollovers Currently in Progress". 58On 11 May the "Summary of Position" (Ex C3) showed for York Street Mezzanine a total investment of $40 million, with "Agreed Rollovers Currently in Progress" at $15.1 million. The corresponding document for 18 May (Ex C4) continued to show York Street Mezzanine subscriptions as $40 million with "Agreed Rollovers Currently in Progress" at $16 million. 59On 19 May a "Project Reporting Summary" (Ex C14) of Westpoint projects was prepared. It contained a detailed Profit and Loss Analysis of all then current Westpoint projects. It showed actual mezzanine costs for York Street Mezzanine as at that date of $60.9 million, a total project cost of $125.8 million, net end value of $112.4 million and an overall loss of $13.4 million (AB 305). Also contained in the document was a project profit and loss table, showing a similar anticipated loss (AB 308) and a page entitled "Internal Cash Flow Impact on Westpoint Group), also showing a negative anticipated cash flow of $13.4 million. The appellant's initials appear on the distribution list (T 111-114). 60On 26 May a Funds Report (Ex C55) prepared with respect to the various companies under the Westpoint umbrella showed "York St" promissory notes to have reached a level of $61,317,169. Almost $4 million of these had been subscribed since the beginning of 4 May. 61On 27 May, in response to a request by Mr Gregory, Mr Patrick Nguyen, an accountant within Westpoint, provided a detailed list of investors holding promissory notes in York Street Mezzanine as at 26 May 2004, with an expiry date of 30 November 2005. These were to the value of $43,852,780.26 (Ex D7). 62On 28 May a (Westpoint) Group Treasury and Cash Flow Report (Ex C24) showed that promissory notes totalling $61,629,169 had been issued by York Street Mezzanine (ie the level of mezzanine debt for SCD was $61,629,169). This was one of a series of documents issued on a weekly basis within Westpoint. It revealed an intention to "roll" $21.1 million of these funds from York Street Mezzanine to another Westpoint project. The report also showed an anticipated loss on the project of $9,891,439. 63On 28 May Mr Nguyen wrote to Mr Gregory in the following terms: "Further to the spreadsheet that I had provided to you on Wednesday, please find attached a revised copy. Grant has requested that we remove the most recent investors from the list (30 November 05 expiry  balance as at 26 May 2004) to achieve an investor balance of approximately $39,330,730." Grant Dodd was the person in Westpoint to whom Mr Nguyen reported. Mr Nguyen gave evidence that towards the end of May in 2004, Mr Dodd asked him to provide a list of all investment in York Street Mezzanine. Mr Nguyen did so. The list showed a total of $61 million. Mr Dodd then instructed him to remove some investors, which Mr Nguyen did, so that the list showed an investment of about $40 million. Mr Dodd then asked him to remove some more names, to bring the figure down "to just below 40". Mr Dodd told Mr Nguyen to remove the names of those who had most recently invested. Mr Nguyen did so, and emailed the list to Mr Gregory. 64On the same day Mr Gregory forwarded the email to the appellant, asking which of them was to forward it on (presumably to CFAL). The new spreadsheet showed investor funding of the mezzanine debt at $39,321,780.26 (Ex C35). 65Mr Lennane prepared another Credit Application Report (Ex C76). It repeated the paragraph from the previous (February 2004, Ex C73) report under "Trading Highlights" that referred to the "surplus mezzanine funding" (ie mezzanine funding in excess of $39.3 million). The table of costs that followed now totalled $38.5 million. 66On 31 May the appellant's secretary, acting on his instructions, sent the letter the subject of the charges, with the attachment (Ex C1). The letter was in the following terms: "Dear Brett, SCOTS CHURCH - RESPONSE TO RECENT QUERIES I refer to the telephone conversation with Luke Gregory and myself on Friday, 28 May 2004. During the conversation you raised a number of queries which you sought answers to, in order for you to finalise and submit the revised credit submission to Scotland for the senior debt financing of the above mentioned project. These queries, together with answers are outlined below. 1. Reconciliation of project costs to date [There followed a table showing that project costs to the date of the letter totalled $38.5 million, and that these costs had been fully funded as at that date. The costs referred to included land and acquisition, legal fees, project management fees, marketing costs, and others.] ... 2. Mezzanine finance from York Street Mezzanine Pty Ltd Please refer to the letter annexed as Attachment 1 from York Street Mezzanine Pty Ltd which details a current listing of promissory notes on issue with their relevant expiry date. Please note that the earliest date of expiry is currently 30 November 2005. [Attachment 1 was headed "York Street Mezzanine Pty Ltd - Investor Listing as at 31 May 2004". It extended over eight and a half pages, in tabular form, containing columns for "Investor name", "PCode" (presumably postcode), location of investor, "Funds invested", and "Expiry date". The investors' names were, in fact, deleted and the words "Withheld due to Privacy" inserted. The "Funds Invested" column showed a variety of amounts, from $50,000, to $500,000. The "Expiry" date in each case was 30 November 2005. The total investment shown was $39,321,780.] 3. Reconciliation of project costs to 30 June 2003 financial statements Based on our discussions, I understand there are two components to this query ... The second component of your query is whether the project is still profitable. The answer to this question is that the project is definitely still profitable, and based on the most recent forecast to the end of the project we expect the project to achieve a profit of over $13m as per the following analysis: [There followed another table, containing identified items and costs forecast for each item on completion of the project. This showed a projected revenue of $119.1 million, and project expenses of $105.2 million, with a "forecast project profit" of $13.9 million.] I trust the above satisfactorily answers your queries. Should you have any further queries please do not hesitate to contact either Luke Gregory or myself." (italics added) 67On 8 June Mr O'Neill submitted a very positive report to HBoS (Ex C77) concerning the updated report. 68On 16 June Mr Lennane sent to Mr Maclaren at HBoS International a spreadsheet prepared by either the appellant or one his staff, headed: "SCOTS CHURCH PROJECT - PROFIT & FUNDING ANALYSIS" It contained a list of "Project Expenses". With one minor exception, this replicated the "Project Table" provided by the appellant on 31 May (Ex C1). The document finished with the entry "Project Costs to be Funded" totalling $102.2 million. It forecast a net project profit of $13.9 million. 69On 21 June the credit application was approved by letter of offer (Ex C51) with special conditions again presupposing mezzanine finance of $39.3 million. Advances began in August. The Crown case 70It was the Crown case that the letter of 31 May contained two statements, each of which was, to the knowledge of the appellant, false or misleading in a material particular. These were (i) that the mezzanine debt level was, as at the date of the letter, $39.3 million (as shown on the table that constituted the attachment); and (ii) the statement that the project was "definitely still profitable" and was expected to yield a profit in excess of $13 million. The first of these was the "mezzanine statement" that gave rise to the "mezzanine charge". On the Crown case, the statement concerning mezzanine investor funding significantly understated the level of mezzanine debt, which was, as at 26 May 2004, in excess of $61 million (Ex C55, AB 670), and was therefore false and misleading. It was further the Crown case that the expenses associated with the project exceeded the projected revenue so that the project was not, and was known to the appellant not to be, profitable. On the Crown case therefore, the "profit statement" was, and was to the knowledge of the appellant, false and misleading. The mezzanine charge The Crown case 71The basis upon which the Crown puts its case with respect to the mezzanine charge can be stated with relative simplicity and brevity. It is that: * the Table annexed to the letter of 31 May 2004 clearly conveyed that, as at the date of the letter, the level of mezzanine debt (or promissory note debt) was $39,321,780. Particular emphasis was placed by the Crown upon the word "current" and the heading to the Table, showing "Investor listing as at 31 May 2004"; * the true position, as revealed by Westpoint documents (Ex C55, Ex C14) was that, at that date, mezzanine debt was in excess of $60 million; * the appellant, as Chief Financial Controller of Westpoint, was privy to those documents and therefore well aware of the true position concerning the level of mezzanine debt; * the evidence of Mr Nguyen concerning directions to him to revise the list of mezzanine investors (see above [63]-[65]) is evidence from which an inference could be drawn that he knew and intended that the information conveyed would be false and misleading; * similarly, the evidence of Mr Gregory concerning the conversation in which the appellant categorically stated his intention of not informing CFAL of the true position was also evidence that demonstrated clearly that the information conveyed was false and misleading, and that the appellant knew that to be the case; * it was therefore false and misleading for the appellant to convey to CFAL that the mezzanine debt was, as at 31 May 2004, under $40 million. The appellant's case 72The appellant's case with respect to the mezzanine charge relied upon the evidence that there had been an acknowledged oversubscription of the promissory note issue, and that a program was in place to "rollover", into other Westpoint projects, the excess; and that the word "current", as used in the letter of 31 May, ought to be read as "current as at the time of (proposed) settlement or draw down of loan". 73The written submissions provided on behalf of the appellant included the following: "107 ... (i) the letter [of 31 May] stated that the attached list of promissory note holders was a 'current' listing. The uncontroverted evidence at trial was that in the context of a commercial loan application, current referred to the position as at the time of settlement/draw down." No transcript reference was included in this submission. 74The submissions also characterised the evidence of Mr Gregory about the conversation with the appellant as "unacceptable and unreliable". Consideration 75I have been unable to locate any evidence to the effect of the submission extracted above. Mr Gregory was cross-examined (T 524-5). This cross-examination was directed to an entirely differently document - Ex C47, in March 2004, regarding the0 finance proposal. In that context, Mr Gregory accepted that the word "current" represented "a future based position", a "current funding plan". 76There is no basis upon which Mr Gregory's evidence of the conversation with the appellant ought to be discarded as "unacceptable and unreliable". He was not directly challenged on that evidence. The nearest the cross-examination came to challenging his assertion lay in drawing attention to its omission from statements he had made during the course of the investigation and preparation for the trial. In the absence of any evidence about what issues were discussed, or what he was asked to turn his mind to, there is no reason to draw adverse inferences from any such omission. 77The evidence is damning. It establishes, in my opinion conclusively, that the appellant did falsify the mezzanine funding figures. 78Further, it is necessary to appreciate the context in which the letter of 31 May was written. It was a final, almost desperate, attempt by Westpoint to secure large scale funding from CFAL. The reference to "current listing" cannot reasonably be read as a reference to anything other than the position as at the date of the letter. The heading of the Table is unequivocal - "Investor listing as at 31 May 2004". 79Had the position been as is now contended on behalf of the appellant, it would have been a very simple matter to have shown the actual mezzanine borrowings as at the date of the letter, and included reference to the proposed "rollover programme". 80In my opinion there was ample evidence on which the jury could find that this charge was proved, and, for my own part, I am amply satisfied that it was proved beyond reasonable doubt. The profit charge The Crown case 81In the first instance, the basis on which the Crown puts its case with respect to the profit charge can also be stated with relative simplicity and brevity. It is that, in ordinary and generally accepted language, "profit" is what remains after the total costs of a project are deducted from the total revenue of the project. The Crown contention was: * that that was the way in which the words "profitable" and "profit" were used by the appellant in the letter of 31 May, and the way in which the calculation of profit was made by him for the purpose of that letter; * that the documentary evidence (that is, Westpoint's own records, especially Ex C14) established that as at the date of the letter, Westpoint recognised that the project would make a loss; * that the appellant, as Chief Financial Controller of Westpoint, was privy to those records and therefore well aware that a loss was anticipated; and * that it was therefore false or misleading to say that the project was still profitable (with a profit of over $13 million anticipated). 82Both at trial and on appeal the Crown placed heavy reliance upon Ex C14. This was a Westpoint "Project Reporting Summary" dated 19 May 2004, covering various Westpoint projects then under way. The summary relevant to SCD showed a forecast revenue of $112,393,791, with total costs of $125,801,778, and a forecast loss of $13,407,987. 83Exhibit C14 was the last of a series of such reports issued, usually fortnightly, commencing (so far as the evidence goes) with a report dated 7 January 2004 (Ex C7) showing a then projected loss of almost $10 million. Each successive report (Ex C8 - Ex C13) showed an increase in the projected loss. 84Also relevant was Ex C24, a Westpoint weekly group treasury and cash flow report dated 28 May 2004. It predicted a shortfall, after "total project outflows" were deducted from anticipated total revenue, of just under $10 million. 85On that simple analysis, the Crown argued, the appellant's statement in the letter of 31 May 2004 (Ex C1), that the project was "definitely still profitable" and expected to achieve a profit of $13.9 million, was demonstrably false and misleading. The appellant's case 86The appellant's case with respect to the profit charge cannot be stated so simply or concisely. In short, it was that the appellant and Mr Gregory, representing Westpoint, and Mr Lennane, representing CFAL, had, throughout their negotiations, dealt with one another on the common understanding that profit was to be measured, not by the simple expedient of deducting total costs from total revenue, but by deducting only certain costs from revenue, and that this approach permeated the whole of the communications between the two organisations, and can be discerned, in particular, from the various documents in which project costs were itemised. Invariably omitted from those lists was a category of costs labelled "sunk" costs or "soft" costs. 87The appellant argued, in respect of the "profit statement", that there existed different legitimate accounting methods for calculating profit, and that the course of correspondence and dealings demonstrates that he and Mr Lennane took a common approach to the method used. The two alternative methods can be shortly stated in this way: (i) "profit" is determined by deducting the total costs of the project from the total revenue derived ie profit = revenue - total costs. (This is the method of calculation which the Crown contends is correct); (ii) "profit" is determined by deducting only certain specific costs of the project, and excluding certain other costs - called "sunk" costs or "soft" costs ie profit = revenue - specific costs only. (This was the method of calculation the appellant contends to be correct. It will be considered in more detail below.) For the moment, it is sufficient to note that, in general, the costs said to have been excluded were the costs of raising the mezzanine finance (commissions paid to agents and interest payable to investors and potential costs to be incurred in the event that it became necessary to provide an incentive to investors to defer redemption of their promissory notes) and interest costs already incurred with respect to the original loan from Colonial/Perpetual. 88Senior counsel for the appellant pointed to a number of documents which, he argued, gave rise to the inference that he and Mr Lennane proceeded on a common understanding of what was meant by "profit" in the context of what SCD/Westpoint could expect to make on the project. 89The starting point of the appellant's submission was that a number of costs had been incurred prior to his approach to CFAL, some of which were ongoing, and that this was clearly known to CFAL, or at least to Mr Lennane. These costs included the establishment and interest costs associated with the Colonial/Perpetual loan facility, agents' commissions in raising the mezzanine finance, and interest on the mezzanine finance (calculated by Mr O'Neill to be $4 million), and the potential additional costs of extending the terms of the promissory notes constituting the mezzanine debt. 90Senior counsel for the appellant pointed to a number of the documents which have been outlined above. These were: * Ex D14 (25 November 2002, the Static Analysis); * Ex D13 (December 2002, the Power Point presentation containing a project cost budget); * Ex D15 (20 December 2002, the CFAL "Project Analysis"); * Ex C46 (23 January 2004, the Revised Project Cash Flow provided by the appellant in support of the reactivated finance application); * Ex D8 (25 February 2004, the CFAL facsimile containing an Equity/Facility Table drawn from a project analysis of the kind seen in Ex D15). Each of these documents contained a list of accumulated and/or anticipated costs of the project. Nowhere to be found in any of those lists was any reference to the costs mentioned above. This applies equally to lists prepared by Mr Lennane, or CFAL, as to those prepared by the appellant or his colleagues in SCD/Westpoint. Cross-examination of Mr Lennane was directed to establishing that he was aware that such costs had been incurred. 91Senior counsel also referred to a further three documents. These were: * Ex D9: the email from the appellant to Mr Lennane of 10 January 2003, in which, in response to a query from Mr Lennane, he explained an apparent discrepancy between the costs of the project shown in the SCD 2002 accounts (in excess of $45 million) and the costs itemised in Ex C71 (Mr Gregory's December 2002 letter to Mr Lennane). The explanation given by the appellant was that these costs: "... represent a subset of the costs ... the difference relates primarily to costs incurred in relation to the mezzanine raising (upfront commissions plus interest paid) as well as the profit recognised ..."; * Ex D10: the email dated 25 February 2004, in which Mr Gregory agreed with the funding table set out in Mr Lennane's email (Ex D8) of the same date; and * Ex C75: an internal CFAL facsimile (3 March 2004), in which Mr Lennane analysed the "viability" of the project. This he did by assuming revenue of $113,684 million (taken from information provided by the appellant) and deducting the proposed CFAL debt of $70 million net of GST, and mezzanine debt of $39.33 million. That calculation left $4.35 million. Mr Lennane added that the calculation ignored certain "profit" items that would enhance the viability of the project to Westpoint. (These were items such as the Westpoint Constructions profit costs, which would, in the end, benefit Westpoint (ie the Westpoint Group).) Consideration 92A good deal of the factual material relied upon by the appellant is incontrovertible. Two aspects of the correspondence in particular make it clear that the appellant did not conceal the existence of some additional costs. These are Ex D9, the email to Mr Lennane of 10 January 2003 explaining the discrepancy between the list of "Costs incurred to date" sent by Mr Gregory on 20 December 2002 (Ex C71) and what appeared in the 2002 SCD accounts, describing Mr Gregory's list as "a subset of costs", and explicitly attributing the difference to the costs of raising mezzanine finance (as well as accounting policies within SCD). 93The other was the email of 24 February 2004 (Ex D5) in which the appellant referred to "soft" costs "not included in the make up of the equity required for finance approval". 94Thus, it may be accepted that the appellant was not then engaging in any deceptive practice with respect to the mezzanine costs. But those documents, and the inquiries they were directed to answering, were not concerned with questions of profitability. 95However, that is far from determinative of the issues. The first issue is whether the appellant's statement to CFAL that the project was "definitely still profitable", was false or misleading. (I leave materiality to a later point in these reasons.) 96The various documents called "Equity/Facility Table", sometimes referred to as "funding tables", were concerned with the apportionment of costs of the project between SCD/Westpoint and CFAL. For example the Equity/Facility Table in the letter of offer of 14 January 2003 (Ex C43) opened with the words: "The following table contains estimates of how the funds are to be expended on the Development. This table is an indication only of how the Development will be funded. It imposes no obligation on CFAL to fund in accordance with the table." 97Of particular importance to CFAL was clarity on what SCD/Westpoint was to contribute by way of "equity". This was clear as early as 27 November 2002, where Mr Lennane wrote to the appellant saying: "Two of our primary issues are subscription of equity and 'cost to complete'. We need to be clear on these matters" (Ex C61). It was also made clear by the incorporation of special condition 1(b) in the letter of offer. It is not to the point that Mr Lennane was aware that additional costs had been incurred in the raising of mezzanine funds, or in the initial borrowing from Colonial/Perpetual. 98One difficulty with the approach taken on behalf of the appellant is that nowhere was any attempt made to specify what costs were included in "soft" or "sunk" costs, or what characterised or defined particular cost items as "soft" or "sunk" costs. In his evidence in chief, Mr Gregory threw some (although modest) light on the question: (T 441) he spoke of costs that had, in the initial stages, been paid by Westpoint, for preparatory work - initial design work, by way of example. He said: "... the confusion here can be what the bank, in this case Capital Finance, would be prepared to lend against, what costs they're lending to and are happy to pay, versus other costs which we generally define as 'soft costs', or equity provided by the owner that goes into the construction. So there's a bit of room for negotiation with the financier on that basis, but typically the financier would only fund 'hard costs', which are costs of the land, and claims against the fixed price building contract." (T 441/5-10) and, "Typically all the costs under the Facility for the most part are hard costs. The confusion might be arising around other costs. I can't recall exactly what that $1.3 million comprised, but there may have been an interpretation that that might have been soft, but, you know, clearly Capital were happy to fund that component." (T 442/45) 99In his opening submissions (T 12 December 2012, p 10/20-30) senior counsel for the appellant appeared to define "soft" costs as: "... interest repayments for the first senior lender, interest in the past on the mezzanine, commissions on the mezzanine." 100This means that there is no clear rationale for the omission of any of the costs that had, in fact, been incurred. It means that Mr Lennane and CFAL, although it is true that they (Mr Lennane at least) knew of additional costs, were in the dark as to what they were for, or their quantum. 101More importantly, however, the emphasis in the communications was on what it was proposed would be funded by SCD/Westpoint, and what would be funded by the CFAL facility, if it eventuated. The various funding tables do not disclose projected profit. It is true that, in some of the documents, anticipated "profit" is mentioned - for example, in the PowerPoint presentation (Ex D13), in CFAL's Project Analysis (Ex D15), and in SCD's Revised Project Cash Flow (Ex C46). This was invariably incidental to the main purpose for which each of those documents was created and used. 102The appellant relied heavily on Mr Lennane's facsimile of 25 February 2004 (Ex D8), which contained a "Project Outcome" table (showing a projected profit of more than $20 million) and a "Proposed Equity/Facility Table". Three things diminish the importance that is sought to be placed on the reference to "profit". Mr Lennane gave evidence that that part of the facsimile had been included inadvertently. (I have some reservations about that evidence: the introductory part of the communication expressly refers to the Project Outcome as being included.) The second is that Mr Lennane made his purpose in sending the message plain - he wanted Mr Gregory to identify the "Other Costs" mentioned in the table, and to provide an "update of development costs to date". The third is that Mr Lennane made it plain that, in compiling the document (which was itself drawn from another internal CFAL document) he relied on information provided to him by the appellant (or SCD/Westpoint). 103No evidence was identified that indicated that, at any time prior to the conversation of 28 May 2004, referred to in the letter of 31 May, the project profit was a focus of discussion between Mr Lennane and the appellant, or a determinative factor in CFAL's consideration of SCD's finance application. It cannot, therefore, be the case that the appellant and Mr Lennane proceeded on a common understanding of what or how profit was to be calculated, and that certain project expenses were to be excluded from the calculation. 104There is in my mind another matter of some significance. There was in evidence no contemporaneous note of the conversation of 28 May, and neither Mr Gregory nor Mr Lennane had any clear recollection of the conversation. The only evidence of what Mr Lennane had asked on that occasion is to be found in the appellant's letter of 31 May, written only three days later. What he then perceived he had been asked was "whether the project is still profitable". That is, it was the appellant who articulated the question that he then proceeded to answer. This was a question that was different from any that had previously been the subject of discussion or attention. He answered it unequivocally. 105This Court was not referred to the oral evidence of any witness who acknowledged that, in the context of the discussions and negotiations, "profit" might have a meaning different from that ordinarily attributed to it - that is, what remains after all costs have been deducted from all revenue. 106In my opinion, the Crown established, to the criminal standard, that the profit statement was false and misleading. 107The next issue is whether the profit statement was, to the knowledge of the appellant, false or misleading. 108The analysis above applies equally to that question. The appellant was initially involved in the negotiations with CFAL. He himself participated in the majority of the communications and he closely supervised those in which he was not a direct participant. The clear inference is that he was well aware of the purpose of the funding tables, and equally well aware of the different issues raised by the question of profitability. There was no evidence to undermine that clear inference. Materiality 109Submissions on behalf of the appellant also raised the question of materiality. The submission was two pronged - first, that the Crown had not established that either statement was false or misleading in a material particular, and, second, even if it were, the Crown had not established that the appellant knew of its materiality. 110In respect of the first, the submission was made that the ultimate determination on Westpoint's loan application lay with Mr Gordon Grieve, in HBoS, to whom (it was said) profit to Westpoint was "apparently irrelevant". Reference was made to Ex C80, an email from Mr Grieve to Mr Maclaren, dated 17 June 2004, in which he gave conditional support for the loan - but made no mention of profit. 111I do not draw from the absence of any reference to profit that the issue was irrelevant to Mr Grieve. Far more important is that the letter of 31 May begins with reference to the issues on which Mr Lennane had sought clarification - one of which was profit. It is apparent from early communications that CFAL and HBoS were concerned not to be seen to be involving themselves in an unsuccessful venture. They were conscious of "reputational damage" that might result. 112In my opinion, the profit statement was clearly material. 113In framing the letter as he did, the appellant plainly knew of the materiality of the issue to CFAL and HBoS. 114Similarly, the mezzanine statement was material. The course of correspondence shows clearly that CFAL was interested to understand the breakdown of the financing of the project or what SCD/Westpoint was contributing, and what CFAL was asked to contribute. 115Its materiality is sufficiently established in the first paragraph of the letter of 31 May - the appellant was responding directly to queries made of him by Mr Lennane. It cannot have been other than material. It is not to the point that, as preferred lender, CFAL's position was protected by its mortgage over the real estate. Mr Lennane, representing CFAL, had asked a question in the context of the application for finance. It was not for the appellant, and it is not for this Court, to ask why CFAL wanted that information. 116In my opinion the sole ground of appeal raised in relation to each count fails. 117The order I propose is that the appeal against conviction be dismissed. 118FULLERTON J: I have read the draft judgment of Simpson J and the consideration her Honour has given to the first ground of appeal in relation to the mezzanine charge. I agree that it was open to the jury to find that charge proved beyond reasonable doubt and that the appeal, so far as it concerns that count, should be dismissed. 119However, after giving the necessary separate consideration to the profit charge and for the reasons which follow, I am of the view that the evidence led at trial concerning that charge, in particular the lengthy course of communication between officers of CFAL and Westpoint in the negotiations that preceded the issue of Ex C1 (and some of the correspondence that followed it), left open the reasonable possibility that the profit statement was not to the knowledge of the appellant false or misleading and, for that reason, the appeal should be allowed in respect of that charge. 120I gratefully adopt Simpson J's summary of the facts including the chronology of relevant events at [1]-[69] of her Honour's judgment. I also adopt the nomenclature her Honour used when referring to and analysing the complex accounting records and the related and voluminous business records of both Westpoint and CFAL tendered at trial. 121In my focus on the profit charge however, I have found it necessary to refer in greater detail to some of the documents upon which senior counsel for the appellant placed reliance, both at trial and on the appeal. It is principally by reference to those documents, and the evidence from a number of witnesses about them, that I have come to the view that there is a reasonable possibility that the appellant's reference to "profit" and "profitability" in the profit statement was not as those terms or concepts are understood in common business parlance, namely profit = revenue less total project costs - the underlying premise in the Crown case at trial - but a reference to the way those terms were used from time to time in the course of the negotiations and dealings between CFAL and Westpoint, namely profit = revenue less specific project costs - the appellant's case - and that the verdict on the profit charge cannot stand for that reason. 122The profit statement in Ex C1, particularised in the profit charge as being false and misleading to the knowledge of the appellant, is as follows: ... the project is definitely still profitable, and based on the most recent forecast to the end of the project we expect the project to achieve a profit of over $13m as per the following analysis: Item Note Forecast on Completion of Project $'M Revenue Sale of Apartments & Retail Net of commission and GST 1. 119.1 Project Expenses Land purchase & incidentals 12.6 Design & Construct (incl $3.0m contingency) 65.0 Rates & Taxes 0.9 Project Management 1.2 Marketing & Advertising .5 Display Apartment .3 Heritage floorspace .6 DA Expenses .8 Sundry project expenses .1 Interest - senior debt 4.0 Mezzanine financing costs 19.2 105.2 Forecast Project Profit 13.9 123It was the Crown case that, properly understood, the reference "the recent forecast to the end of the project" in the profit statement could bear no other meaning than a reference to Ex C14, one in a succession of profit and loss reports, issued by Westpoint on a fortnightly basis throughout the course of negotiations and showing a progressive increase in the predicted project loss (see Ex C8 - Ex C14) and a projected loss of $13.9 million within a week of the appellant making the profit statement. 124Counsel for the appellant submitted that the analysis in Ex C14, as with the profit and loss reports generally, was undertaken by Westpoint for its internal accounting purposes only and that it was not an analysis with which CFAL was concerned when considering whether, as lenders, they would extend finance to complete the project. He submitted that "profitability" from CFAL's perspective was understood to mean the "viability or feasibility" of the project on a "risk for reward" basis, their primary focus as lenders being whether the project would generate a project surplus sufficient for the senior debt of $70 million to be discharged on completion of the project, irrespective of whether from Westpoint's perspective there would be a profit (to them) from the project. 125If the references to "profit" and "profitability" in the profit statement might reasonably be viewed in the way contended for by the appellant, it follows that Ex C14 was neither determinative of the question whether the profit statement was false and misleading nor of any significant weight on that question. On the other hand, it seems to me to follow that if the references to "profit" and "profitability" in the profit statement were as contended for by the Crown (there being no reasonable possibility on all of the evidence of any other construction) then the appellant's knowledge of the projected project loss to Westpoint in Ex C14 contrasted with his treatment of the figures in Ex C1 was of overwhelming weight in proof of guilt. 126CFAL's focus on a "risk for reward" analysis of the project is supported by Ex C75, a facsimile of 3 March 2004 sent by Mr Lennane to Mr O'Neill where, after referring to what Mr Lennane describes as the "Scots Church and Westpoint Constructions accounts", he identifies the following matters under the subheading "Viability": "(a) For simplicity the difference between GR [gross revenue] net of GST and CFAL and Mezz debt at 30 June 2003 is $4.35m ($113.684m - $70m (net of GST provision) - $39.33m). This ignores the following "profit" items: i)Payments for procurement, and building & development services of $11.535m recorded in the accounts (note 17). ii)Profit recognised to date of $4.288m (note 6). Greg, while this is a non-cash item it is still a profit that will become a cash item once the Mezz facility is repaid. iii)Builder's profit component of preliminaries budget. iv)Construction contingency of $3m, which will become profit if costs are sufficiently controlled. v)Return of a $1m security deposit relating, I believe, to the State Rail situation." 127Mr Lennane was referred to "profit" in items (i) - (v) in his evidence. Despite some ambiguity in his evidence as to whether the analytical exercise involved in considering these factors would reveal a "profit" or a "surplus" (having used one term when asked questions by the Crown and another when asked questions by defence counsel) in cross-examination at T890 he agreed these were items which should be added to the viability of the project because they would be "added back" to "work out the profit". He went on to say: "When we first looked at this deal the project returns were obviously better and there is no question that delays and other issues (eg State Rail) have eroded the returns. However, last year we received a substantial establishment fee for the deal and we have a prima facie obligation to continue to support the client notwithstanding the reduced project returns, but only on the basis that our risk position is acceptable. In this regard our maximum exposure of $71.2m is supported by back-end equity of $42.5m, which is supported by a largely presold project with sound physical fundamentals." 128In the same facsimile he concluded by saying: "While I appreciate there are some concerns with this deal on the grounds of viability, the deal still stacks up for CFAL on a risk for reward basis." 129A not dissimilar analysis was undertaken by Mr O'Neill (Head of the Property Finance Division of CFAL) on 8 June 2004 in Ex C77, an internal memorandum sent to officers in the credit risk management division of HBOS International and copied to Mr MacLaren as Senior Director for credit risk management. In that memorandum Mr O'Neill also spoke of the fact that certified pre-sales of the units in the project represented "120% debt cover" and that with construction 35 per cent complete it had passed beyond the "critical risk phase" which was (from CFAL's perpective) "...almost too good to be true". He went on to say, "I can't recall putting up a fully priced project finance deal that has been de-risked to the extent that this one has". 130He also agreed in cross-examination that the various matters he alluded to in Ex C77 were the important features under consideration in a credit risk sense and that there was nothing in the memorandum that referred to "profit" in the sense contended for by the Crown. 131In the cross-examination of Mr O'Neill at T846-7, and after counsel had taken him to Ex C73 (the February 2004 Credit Funding Application), he was invited to confirm that with the projected project revenue at $113 million as at February 2004, and with the senior debt to CFAL assumed to be at $71 million and total mezzanine debt funding (again as at that date) $39 million (that figure representing a layer between Westpoint's equity and the proposed senior debt funding), he "...always saw [the] facility protected by something like 40-odd million in project surplus" as a buffer between CFAL's exposure and gross revenue. 132Accepting that Mr MacLaren and other Crown witnesses (including Mr Lennane and Mr O'Neill) were interested in Westpoint's profit prediction as negotiations progressed (see in particular Mr MacLaren's evidence in chief at T994 where he made it clear that HBOS had "no appetite for loss-making projects"), and even if they had applied the formula profit = total revenue less total project costs for that purpose (the accounting approach taken in Westpoint's profit and loss reports), that did not, in my view, make out the Crown case on the profit charge to the criminal standard. Not only was there no document produced by CFAL which calculated profit for credit approval purposes on that basis, it was also conceded by some of the Crown witnesses (including Mr MacLaren) that there was another legitimate way of looking at or assessing the issue of "profit" in a commercial banking context, namely by excluding particular project expenses in the calculation of a project surplus/profit. 133To my understanding the phrase "soft costs" or "sunk costs", being the costs excluded for this purpose, is simply a shorthand way to describe a past cost that is ignored as not adding value to the project when an assessment is made for the purposes of forecasting a profit figure. My understanding is drawn principally from the evidence of Mr Lennane at T725-6 where, in the course of being cross-examined by defence counsel as to the apparent contradiction between his evidence for the Crown at trial and his statements to ASIC officers when he was initially questioned about Ex C1 some years earlier: "Q. Then you're asked this question, the same page. I just want to read out a little passage, and then I'll come back and ask you some questions about it, all right? A. Okay. Q. "Q. Do you consider it relevant in a loan application to you that they've made representations that it's a project that's going to run a $13 million profit? A. I don't really understand the time that's passed here. I don't know what costs. It says that there have been some costs incurred, but I don't necessarily understand what those costs are. I mean, to my way of thinking, if they present to me information the valuation says the land is worth a certain amount of money, I suppose some developers would see the profit as being the profit they make from that point forward, not necessarily reflecting previous costs, you know, perhaps viewing them as sunk costs." A. Right. Q. You are telling ASIC yourself what I've just read out, and you mention sunk costs, and you mention that some developers look at profit from that point forward. I'll keep going. Perhaps they didn't like the answer, and they say: "Q. Again, take it step by step. From representations made to you as of that point in February 2004 from Westpoint that a project is going to make a $13 million profit, it would appear from the memos that that's a factor that you passed on to the credit risk team. A. That would appear to be what they've told me the profit would be at that time. Q. And it's fair to say that you've accepted it on that basis." They're telling you must have thought, "A. I don't recall the information that led up to, you know, the provision of that number." That's correct, isn't it? A. That I don't recall the lead up or ... Q. Those questions and answers - firstly you agree that they're the questions and answers that you were asked? A. Yes. Q. First of all, going back, you talk about how some developers regard profit. Then you say sunk costs, and when you say sunk costs, you're talking about something that doesn't add value to the project, aren't you? A. That would be what I'd call soft cost, not a sunk cost. Sunk cost is something that's simply spent. Q. In the past. A. Yes." (Emphasis added) 134Again, as the appellant's counsel submitted and not without force, if the most that emerges from Mr Lennane's evidence is that he misunderstood, or did not fully appreciate the basis upon which issues of profit and surplus might be calculated for different accounting purposes from the different perspectives of lender and developer, and this misunderstanding underpinned his communication with other CFAL officers through to Mr MacLaren, this does not advance the Crown case that the appellant's profit statement was knowingly false and misleading. 135"Sunk" or "soft costs" was also the subject of express mention in Ex D5, an email sent by the appellant to Mr Gregory in February 2004 in response to a number of queries Mr Lennane had raised with Mr Gregory, the answer to which was then forwarded to Mr Lennane. 136The appellant placed considerable reliance on Ex D5, together with Ex D8, Ex D9 and Ex D10. As to the first of these documents in time, namely the email from the appellant to Mr Gregory on 10 January 2003 which was then forwarded to Mr Lennane on the same date (Ex D9) in answer to the questions raised by him, the appellant's counsel submitted that in the explanation for a difference in a list of costs incurred on the project to date and sent to CFAL (which apparently totalled $22.3 million) and a much lower figure in the costs shown in the balance sheet of Westpoint at 30 June 2002, the appellant gave the following explanation: "The list of costs incurred to date sent to you by Luke [Mr Gregory]...represents a subset of the costs shown in the balance sheet...under the heading inventories. The difference relates primarily to costs incurred in relation to the mezzanine raising (upfront commissions plus interest paid) as well as the profit recognised for the year to 30 June 2002 of $3.2m..." This, it was submitted, made patent that the costs of the project between the two accounting approaches was different because in the one forwarded to CFAL not all costs were included and, specifically, costs in relation to raising the mezzanine debt were not included. 137When negotiations between the parties resumed in early 2004, a number of additional queries were raised by CFAL as reflected in Ex D4 and Ex D5. The appellant's counsel submitted that if there were doubt up until that time as to the accounting methodology being used by Westpoint (even after Ex D9 was sent), this correspondence addressed it specifically. Significantly, the explanation for the difference in figures in the funding table attached to the CFAL January 2003 letter of offer (Ex C43), representing costs funded by Westpoint's equity and a greater figure shown in the notes to the accounts of Westpoint, was explained as follows: "● A number of the costs included in the 30 June 2003 Work in Progress balance represent "soft" costs not included in the make up of the equity required by the finance approval. Costs in this category include mezzanine debt raising and interest costs, previous 'land' debt establishment fees and interest, marketing and project management costs. In addition, in accordance with accounting standards as signed off by our auditors, the work in progress balance includes an accrual of project profit which is recognized on a percentage of completion basis. The important point to note here is that once the project is completed, taking account of timing differences and profit accruals, the profit per the revised cashflow given to CFAL on 23 January 2004 and the overall project profit (excluding equity/mezzanine costs) disclosed in the accounts of Scots Church Development Limited will be the same." (Emphasis added) 138The following day, after receiving the explanation bearing upon the costs figures in Ex D5, Mr Lennane sent a facsimile to Mr Gregory (Ex D8) which contained an Equity/Facility table in the same format as Ex D15 - a project analysis prepared by CFAL for the purposes of considering the application for finance in 2002 which, as counsel emphasised in submissions, adopted a formula for the calculation of profit of the very kind contended for by the appellant. Specifically, it did not include the costs identified in Ex D5, identified as including "mezzanine debt raising and interest costs, previous 'land' debt establishment fees and interest, marketing and project management costs". 139The Crown accepted that the accounting approach of excluding some project costs (in particular mezzanine debt and associated costs) was employed in the course of negotiations, as reflected in various documents called "Equity/Facility Tables", but submitted that it was directed to allowing CFAL to verify the amount of equity Westpoint had contributed or would contribute to the project, together with allowing for an appreciation of how the funds CFAL advanced under the facility would be expended and how the draw down on those funds would be timed relative to completion of the project, not to a calculation of the "profit" that would be generated from the project. 140The Crown also submitted that Ex D8 was not concerned with an analysis of profit properly so described, but as part of CFAL's indicative offer and that it was, in any event, the result of different documents having been cut and pasted together which, according to Mr Lennane's evidence at T763-65, while accurate for some purposes, misrepresented the effect of the document. (I agree with Simpson J's reservations about that explanation at [102] of her Honour's judgment.) 141Counsel for the appellant submitted that the analysis revealed in both documents, separated in time by some months, showed a consistent approach by the parties to the assessment of "total project costs", in the sense that relevant future costs are those which are factored or assessed against future revenue and that other past costs (well known to CFAL, including mezzanine interest and upfront sales commissions - see Mr Lennane's cross-examination at T720) were ignored for the purposes of assessing total project cost. 142On my own analysis, a comparison between the analysis undertaken on Ex C14 and the analysis in Ex C1 shows some similarities in the accounting approach to the calculation of "profit" but also significant differences: (a) Both concern a forecasted profit on completion of the project. (b) Both refer to the projected revenue from the sale of the apartments and revenue net of commission and GST. (While the projected revenue on Ex C14 as at 19 May 2004 is assessed at $112.3 million and on Ex C1 it is $119.1 million, this would appear to be accounted for by an increase in revenue by retail sales over the intervening twelve days - but nothing turns on this.) (c) Under the subheading "Project Expenses" on Ex C1 is a line item entitled "Design and Construct" reported at $65 million and a separate line item "Land Purchase and Incidentals" at $12.6 million. On Ex C14 is a line item "Total D &C" (design and construction) at $65.2 million and development of the land, including its purchase and incidentals at $13.4 million. (Again, nothing appears to turn on the discrepancy.) NB Those items which are common to both Ex C1 and Ex C14 are "rates and taxes", "project management costs", "marketing and advertising", "DA expenditure", "display unit", "heritage floorspace" and "interest bank/senior debt". Ex C1 also makes an allowance of $1 million for sundry project expenses with no corresponding line item on C14 - this would also appear to be immaterial. (d) The critical distinction between the two documents is that on Ex C14 there is a separate line item altogether entitled "Other" - (being other project "costs") - which include some but not all of the balance of the project "expenses" on Ex C1. * The following items, listed as "Other Costs" on Ex C14, are NOT included on Ex C1 as identifiable line items (I exclude reference to interest (Vendor/Bridging Finance) of $4 million for present purposes since it appears to be irrelevant to the competing analyses or accounting methodologies in issue at the trial): Sales commission (upfront) 3.1 million Mezzanine raising costs 12.1 million Interest (Mezzanine + Kicker) 17.9 million Total 33.1 million * However, on Ex C1 there is included as the last item under the subheading of "project expenses" an item entitled "Mezzanine Financing Costs" reported at $19.2 million. This is the only line item on Ex C1 referable to costs associated with the mezzanine debt. In reliance on Mr Gregory's evidence, the appellant's counsel submitted that this is explained on the basis that mezzanine financing costs reported at $19.2 million on Ex C1 relate not to past costs associated with raising the mezzanine debt (for which Westpoint was responsible) but an allowance for costs associated with financing the mezzanine debt as a forward estimate. The Crown submitted that this accounting method resulted in an understatement of the total amount attributable to that debt by $13.9 million (that is, $33.1 million less $19.2 million) and that this had the related effect of falsely overstating profit (in the sense contended for by the Crown). * In contrast, as is obvious on Ex C14, there are two line items referable to the same subject matter - a line item of "Mezzanine Raising Costs" reported at $12.1 million and "Interest (Mezzanine + Kicker)" at $17.9 million. It is only the latter on Ex C14 that makes any allowance for forward costing projects and which is fixed at $5 million (that is, actual cost at $12.9 million plus projected costs at $5 million). In Ex C85, an email from Mr Lennane to Mr MacLaren on 16 June 2004 attaching a document headed "Profit and Funding Analysis" prepared by the appellant, it would appear that the line item "Mezzanine Financing Costs" at $19.2 million (a repetition of the same line item in the analysis of "Forecast Project Profit" in Ex C1) is expressed to include an allowance of $6 million for the servicing of the mezzanine interest through to the end of the project. That would tend to suggest that mezzanine raising costs at $12.1 million as at the date of Ex C14 were all past costs and, on the appellant's case, of no interest to CFAL in the calculation of a project surplus. 143Where Simpson J regarded it as significant that there was no contemporaneous note of the conversation of 28 May 2004 which led to the drafting and forwarding of Ex C1, and that neither Mr Gregory or Mr Lennane had any clear recollection of the conversation in which the question of "profit" was raised, I do not see that this casts any light on the question whether, assuming that the appellant was asked whether the "project was still profitable", that "profit" was being used in the sense contended for by the Crown. What is of significance is that when Mr Lennane was reporting to HBOS on the viability of the project in March 2004 in Ex C75, he was aware that the outstanding and significant interest on the mezzanine debt was excluded as a cost item from his own calculations, being something that he conceded he did not consider relevant at that time (T666). It is difficult to see how there can be an attribution of dishonest behaviour to the appellant in May 2004 while Mr Lennane was excluding the same cost items in his own cost analysis in March 2004. 144In further support of the appellant's case on the appeal counsel submitted that on any review of the voluminous material CFAL was furnished with from time to time over the course of their extended negotiations with Westpoint, they could have been in no doubt (and in fact were in no doubt) that there would be little if any profit for Westpoint on the project after they had recovered their equity, and that the appellant's assertion that the project is "still profitable" must be (or might reasonably be) taken to refer to other considerations. I consider that there is force in that submission. (See Ex C75 and Ex C85 and the cross-examination of Mr O'Neill at T852-854 where he conceded that from the prospective of Westpoint the project was going to generate a loss and the cross-examination of Mr MacLaren at T1005-1008 to the same effect). 145In the result, and despite the fact that there was no document which declared, in terms, that the approach to the calculation as profit = revenue less specific project costs was adopted by the appellant on behalf of Westpoint on the one hand and Mr Lennane from CFAL on the other, and despite the fact that Mr Lennane gave evidence that he understood "profit" in Ex C1 in the way contended for by the Crown, I am satisfied that the evidence allows for the drawing of a reasonable inference that in various of the dealings between Westpoint and CFAL, ultimately culminating in the correspondence that was Ex C1, that this was an approach which they both considered appropriate, or, at the very least, one that the Crown was unable to exclude may possibly have informed discussions about "profit" and "profitability" in May/June 2004 including, critically, in Ex C1 such that the profit statement could not be proved to be false and misleading to the knowledge of the appellant beyond reasonable doubt. 146DAVIES J: I have read the draft judgments of Simpson J and Fullerton J. I agree with Simpson J's judgment in respect of both counts. 147In deference to the view expressed by Fullerton J I wish to note a few matters that I consider significant in agreeing with Simpson J that the profit ground is made out. 148First, as Simpson J has pointed at [105] there was no evidence of any witness who accepted that "profit" might have a meaning different from that ordinarily attributed to it. Significantly, Mr MacLaren's evidence was to the contrary. In the passage referred to by Fullerton J at [144] where Mr MacLaren was being cross-examined about exhibit C85 this exchange occurred: Q. So in fact the 12.8 figure - the methodology is okay that he's employed, isn't it, as far as - one way of working out profit, as I said, is you take away, ultimately, the 70 million loan. That's all spent, that's a cost. The 40 million is all spent, that's a cost. So you can work out a profit figure that way if you want to, right? A. That's no (sic) the way I would work it. (emphasis added) 149Mr MacLaren's view was significant because it was he who ultimately made the decision on the loan application and it was to him, and perhaps others in Scotland, to whom the information in the letter of 31 May 2004, or the letter itself, would ultimately go - a matter known to the Appellant as expressed in the first paragraph of the letter. 150Secondly, as Simpson J says at [103], there was no indication prior to the conversation on 28 May 2004 that led to the writing of the letter of 31 May 2004 that project profit was a focus of discussion between Mr Lennane and the Appellant although, as the word "still" makes clear in what must have been the question ("whether the project is still profitable"), there had been passing reference to it in some of the documents, exhibits D8 and D15 being some examples. 151It was a concern of Mr MacLaren as he made clear in his evidence at T993 - 994. He there explained his reasons for not wishing to be involved in a loss-making project. It was also a matter of importance for Mr O'Neill as he explained at T 804. That may very well have been the reason the question was asked in the conversation of 28 May. 152The significant thing in this regard is that the Appellant knew that the queries raised in the conversation of 28 May were raised in the context of the submission of the credit application to Scotland. His answer was unqualified particularly by reference to any prior understanding of the way it was contended on his behalf that he and Mr Lennane had used the term in their oral and written exchanges prior to that time. 153Thirdly, Fullerton J suggests at [126] that CFAL's focus was on risk for reward. The Appellant contended in this regard that CFAL's only concern was to ensure that its debt was repaid. However, in 2002 when this application for finance was first being considered Mr O'Neil sent a fax to Mr Lennane on 22 December 2002 expressing his concerns about the deal and the project where he said: Is CFAL in any way at risk (even reputational risk) if the prospectus is false/incorrect or materially at odds with project fundamentals? 154That fax went on to note his suspicions that Westpoint were taking some upfront cash and that there was double counting in Mr Lennane's reconciliation in the funding table. 155That concern, when considered with both Mr MacLaren's and Mr O'Neill's evidence of not wanting to be involved in a loss-making project generally, is strong evidence against CFAL's only being concerned that it would be repaid its loan, something that was very likely in any event given the way the funding for the project was structured. 156Noting the test as stated in M v The Queen (1994) 181 CLR 487 at 493 I consider upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the Appellant was guilty in relation to both counts. ********** Amendments 29 August 2013 - Correction to counsel representation Amended paragraphs: Coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 August 2013