Court of Criminal Appeal Supreme Court New South Wales Medium Neutral Citation: Chang v R [2016] NSWCCA 296 Hearing dates: 29 November 2016 Decision date: 16 December 2016 Before: Macfarlan JA at [1]; Johnson J at [101]; Schmidt J at [102] Decision: (1) Grant leave to appeal against sentence. (2) Dismiss the appeals against conviction and sentence. Catchwords: CRIMINAL LAW – conviction appeal – conspiracy with intention of dishonestly causing loss to Commonwealth – s 135.4(3) Criminal Code (Cth) – whether agreement to lodge false GST returns based on inflated or false inter-group invoices – whether directions to jury concerning conspiracy's object, means of achievement and overt acts sufficiently clear – whether verdict uncertain CRIMINAL LAW – sentence appeal – conspiracy with intention of dishonestly causing loss to Commonwealth – s 135.4(3) Criminal Code (Cth) – agreement to lodge false GST returns based on inflated or false inter-group invoices – whether findings as to offender's role adequate Legislation Cited: Criminal Appeal Rules 1952 Criminal Code (Cth) Cases Cited: Filippou v The Queen (2015) 256 CLR 47; [2015] HCA 29 Papakosmas v The Queen (1999) 196 CLR 297; [1999] HCA 37 Pratten v R [2014] NSWCCA 117 R v Aziz [1982] 2 NSWLR 322 R v Walsh (2002) 131 A Crim R 299; [2002] VSCA 98 Category: Principal judgment Parties: Song Chang (Appellant) Regina (Respondent) Representation: Counsel: Mr P Bruckner / Mr R Johnson (Appellant) Mr K Ginges (Respondent) Solicitors: Hardinlaw (Appellant) Commonwealth Director of Public Prosecutions (Respondent) File Number(s): 2014/34517 Decision under appeal Court or tribunal: District Court Jurisdiction: Criminal Date of Decision: 26 November 2015 Before: Lakatos DCJ File Number(s): 2014/34517 Judgment 1. MACFARLAN JA: In 2015 the appellant, Song (Peter) Chang was tried in the District Court before a judge and jury on a charge that: "Between about 1 January 2002 and about 30 June 2006 at Sydney, New South Wales and elsewhere [he] did conspire with Li ZHANG and Simon Chee-To CHAN with the intention of dishonestly causing a loss to a third person, namely the Commonwealth. Contrary to section 135.4(3) of the Criminal Code (Law Part Code 41505)." 1. After a 10 week trial, the jury returned a verdict of guilty. On 26 November 2015 the trial judge convicted the appellant of the offence of which the jury had found him guilty and imposed a sentence of 5 years imprisonment to date from 10 June 2015, with a non-parole period of 3 years commencing on the same date. 2. The Crown case at trial was that the intended loss was to be caused to the Australian Taxation Office ("ATO") by an accrual-basis GST reporting entity, JKC Developments Pty Ltd ("JKC"), claiming and receiving GST refunds to which it was not entitled on the basis of it receiving invoices from other entities within the same corporate group which were inflated or false. Those other entities were High Trade Constructions Pty Ltd ("HTC") and Lobbyfit Design & Cons Pty Ltd ("Lobbyfit"). JKC later changed its name to Protons National Pty Ltd. 3. The group of companies of which these companies were members was effectively owned and controlled by Mr Li Zhang, one of the alleged co-conspirators. Mr Simon Chee-To Chan, the other alleged co-conspirator, was an internal accountant employed by the group. The appellant was an employee of the group who, on the Crown case, had an intimate knowledge of, and involvement in, the preparation and lodgement of GST returns by JKC and invoicing within the group. 4. JKC was a property developer. Prior to 2002 it engaged HTC to construct residential units on a property at Chippendale in Sydney. Other companies in the group, including Lobbyfit, worked on the project and issued invoices to JKC. 5. The Crown's case was that the conspiracy charge involved two schemes. The first related to the construction phase of the Chippendale project, during which HTC invoiced JKC for considerably more than the true value of the work undertaken by HTC. JKC lodged GST returns claiming credits or refunds in respect of the inflated invoices. As a result JKC, according to the sentencing judge's finding on sentence, received $1,260,189 from the ATO in excess of its entitlement. 6. The second scheme related to the period after the Chippendale project was certified to be ready for occupation, at a time when the sales of units were in the process of being completed. In this period, reliance upon further inflated invoices from HTC was alleged to have resulted in JKC receiving another $217,482 in GST refunds to which it was not entitled. As well, the Crown case was that in this period Lobbyfit issued false invoices which enabled JKC to obtain $1,517,319 in GST refunds to which it was not entitled. 7. The Crown contended that when JKC was placed into administration, and then later into liquidation, the ATO loss became irreversible because JKC became unable to repay to the ATO the funds which it had wrongly obtained. 8. The appellant appealed to this Court against his conviction and sought leave to appeal against his sentence in the event that his conviction stands. THE GROUNDS OF APPEAL AGAINST CONVICTION 1. The appellant relied upon the following Amended Grounds of Appeal: "1. The trial miscarried because the Crown submissions (in opening, closing and on trial directions) left the conspiracy undefined and included elements which were incorrect, elided or unclear. 2. Alternatively, the offence for which the appellant was convicted is an offence unknown to the criminal law and therefore the conviction should be set aside and verdict of acquittal entered. 3. Further or alternatively, the verdict is unreasonable and constitutes a substantial miscarriage of justice because the written directions and summing up were internally inconsistent and confusing. 4. The charge on the indictment was latently duplicitous or alternatively the verdict is uncertain. 5. The verdict is unsafe and cannot be supported by the evidence insofar as it required proof of intention by the appellant that loss would be crystallised on liquidation. 6. The combination of errors and defects in the trial gave rise to a miscarriage of justice, even though any one of them considered in isolation may not yield that result." LEGISLATIVE PROVISIONS 1. The appellant was charged with an offence contrary to s 135.4(3) of the Criminal Code (Cth). That provision and other presently relevant parts of the Criminal Code are in the following terms: "Division 135 – Other offences involving fraudulent conduct 135.1 General dishonesty … Causing a loss (3) A person is guilty of an offence if: (a) the person does anything with the intention of dishonestly causing a loss to another person; and (b) the other person is a Commonwealth entity. Penalty: Imprisonment for 5 years. (4) In a prosecution for an offence against subsection (3), it is not necessary to prove that the defendant knew that the other person was a Commonwealth entity. … 135.4 Conspiracy to defraud … Causing a loss (3) A person is guilty of an offence if: (a) the person conspires with another person with the intention of dishonestly causing a loss to a third person; and (b) the third person is a Commonwealth entity. Penalty: Imprisonment for 10 years. (4) In a prosecution for an offence against subsection (3), it is not necessary to prove that the defendant knew that the third person was a Commonwealth entity. (5) A person is guilty of an offence if: (a) the person conspires with another person to dishonestly cause a loss, or to dishonestly cause a risk of loss, to a third person; and (b) the first-mentioned person knows or believes that the loss will occur or that there is a substantial risk of the loss occurring; and (c) the third person is a Commonwealth entity. Penalty: Imprisonment for 10 years. (6) In a prosecution for an offence against subsection (5), it is not necessary to prove that the defendant knew that the third person was a Commonwealth entity. … General provisions (9) For a person to be guilty of an offence against this section: (a) the person must have entered into an agreement with one or more other persons; and (b) the person and at least one other party to the agreement must have intended to do the thing pursuant to the agreement; and (c) the person or at least one other party to the agreement must have committed an overt act pursuant to the agreement." THE COURSE OF THE TRIAL 1. In the transcript extracts which follow, passages that refer to GST claims, refunds, credits or business activity statements and therefore have particular relevance to the grounds of appeal have been highlighted. Prior to empanelment of the jury 1. Before empanelment commenced, the Crown Prosecutor gave the jury panel the following outline of the Crown's case: "Ladies and gentlemen of the jury panel this is a fraud trial or fraud related trial. It's alleged that the accused Mr Peter Song Chang conspired with two other people, namely Li Zhang and Simon Chan to dishonestly or rather with the intention of dishonestly causing a loss to the ATO. It's a complex way of saying that it's alleged that he had an agreement with these other two people over a period of time between 2002 and 2006 intending to cause a loss to the ATO. Broadly speaking Mr Chang was employed by a company called the High Trade or a group of companies known as the High Trade Group within which there was the High Trade Company, the High Trade Construction Pty Limited. You'll be concerned with a [company] called JKC Constructions Pty Limited and some other companies one of which is called Lobby Fit. In broad terms it is the Crown case that Mr Chang agreed with these other two people whom I've mentioned to attempt, or rather intend, to defraud or cause a loss to the ATO by lodging inflated GST returns, and this was done on the Crown case during two what the Crown calls schemes. The first was whilst a property was being developed down in Chippendale, and I'll get to the address shortly, a development of some 56 residential units was built and during the course of that the builder, High Trade Constructions, sent the developer JKC Developments a number of invoices for the work that was being done. It's the Crown case that those invoices were grossly inflated such that when JKC claimed its GST returns it received a lot of money some $2.994 million in a benefit from the ATO, monies that on the Crown case it was not entitled to do. So what this case is concerned with is whether or not there was an agreement by the accused, Mr Peter Song Chang with two other people, Simon Chan and Li Zhang intending to cause a loss to the ATO. That's what the issue is going to be. There will be some documents in this case. There are as you might expect business activity returns. There will be officers from the ATO to explain to you how all that operates and it's expected that this case, in terms of court time, will take about six or seven weeks." 1. The trial judge then added: "Ladies and gentlemen, you have heard a very brief outline of the Crown case, as I understand from what the Crown said the allegation is that there was an agreement between Mr Chang, the person presently before the court, and two other named individuals in relation to I suppose, to put it bluntly, defrauding the tax office in relation to GST returns. That's very much in substance as I understand the allegation." The Crown opening 1. The Crown opening to the jury included the following statements: "In a nut shell, it's the Crown case that in the period between 1 January 2002 and 30 June 2006 the accused willingly conspired with the intention of dishonestly causing a loss to the Australian Taxation Office, which I'll refer to as the ATO. It is the Crown case that the accused did this in respect of a property development located at 12-26 Regent Street in Chippendale and I'll refer to that as 'the Chippendale project' or the 'the Chippendale site'. And whilst there was only one agreement or one conspiracy, the Crown says it was carried out over the course of two separate schemes. I will return to discuss the details of the two schemes later in my address. It's the Crown case that as a result of the conspiracy between the accused and two other persons, you've already heard me mention their names, Lee Zhung and Simon Chito Chan, the ATO suffered a loss of some 2.994 million dollars. I'll also say something more about Simon Chan and Lee Zhung later. … The first and second scheme which I've mentioned are really different stages of the same development. It's the Crown case that the first scheme, in general terms, occurred in the period January 2004 through to July 2005. That was during the construction stage of the Chippendale project and that involved High Trade Constructions invoicing JKC and you'll see the arrow there, for significantly more than the true value of the cost of the works undertaken by High Trade Constructions on that project. Because of the inflated costs of the invoices, JKC lodged GST returns to the ATO for greatly inflated figures than it had, in fact, spent and was entitled or would have been liable to pay for developing the Chippendale project. It claimed for much more money than it would have been able to claim, the Crown says, based on how much the Chippendale project actually cost to build. That led JKC to claim for GST refunds well beyond what it was entitled, such that in that period of time, that is January 2004 through to July 2005, JKC received from the ATO GST refunds of $2,633,668.55, which was not entitled to receive $1,260,189. Now, as the trial proceeds, you will receive the evidence regarding these figures. In short, during that period of time, that is January 2004 to July 2005, the Crown says that JKC received $1.26 million in GST returns it was not entitled to. I will say something about the GST system shortly. … In the period August 2005 to May 2006 Lobby Fit issued invoices for fixtures, fittings and furniture for the Chippendale project, at a time when not only had the construction completed but most of, if not all, of the 56 units had been or were being sold off. In that time Lobby Fit issued invoices totalling $16,690,550 in respect of which JKC, later Protons as it changed its name to, claimed and received the benefit from the ATO of $1,517,319, so about 1.5 million dollars. In total, it's the Crown case that during the course of the two schemes JKC/Protons National lodged business activity statements containing inflated claims in order to obtain GST refunds totalling 2.994 million dollars and that was, what the Crown says, about what it was entitled to receive. Now, that is the loss that the Crown says the ATO has suffered by reason of the conspiracy between Mr Chang, Simon Chan and Lee Zhung. … It's the Crown case that Mr Chang was a knowing participant with Mr Lee Zhung and Simon Chan in agreeing or conspiring with the intention of dishonestly causing a loss to the ATO. As I expect you will later be advised by his Honour, the Crown does not have to prove that Mr Chang actually caused any loss to the ATO or that he made any gain for himself or anybody else. What the Crown must prove is that the accused Mr Chang conspired with Mr Lee Zhung and Simon Chan with the intention of dishonestly causing a loss to the ATO. The Crown says that the fact, on the Crown case, that the ATO did suffer a loss of some $2.994 million is a significant matter in the case because it goes some way to show the existence of the conspiracy having been carried out. … Whether a person is acting dishonestly at a given time depends on his or her state of mind. It is the actual state of mind of the accused person at the time of claiming or intending to claim the inflated GST returns that is in question when an allegation is made that the person acted dishonestly. Clearly enough you cannot read a person's mind but you can look to their actions and words to infer what their state of mind was at that time, which is a way of using circumstantial evidence, and again his Honour will give you very specific directions about this, if not at the end of the trial beforehand. You would also have to be satisfied that Mr Chang, the accused, knew that at the time that it was intended to claim inflated GST returns that he knew that to do so would be dishonest. As I say you will receive more directions about that. The third and final element is that the third person was a commonwealth entity, namely the ATO. I do not expect there to be any real dispute about this, nor that the ATO was at the relevant time a commonwealth entity." The evidence at the trial 1. It is unnecessary for present purposes to say any more about the evidence adduced at the trial other than that it was extensive and, as would have been expected in light of the terms of the Crown opening, focussed upon the circumstances of the invoicing between companies in the group in relation to the Beaconsfield project, the preparation and submission of GST returns for JKC and on the appellant's knowledge of and involvement in those activities. The evidence included that of the appellant who gave evidence in his own case. Formulation of written directions to the jury 1. Draft "Directions of Law" prepared by the trial judge described the second offence element of which the jury had to be satisfied beyond reasonable doubt as follows (the emphasis being in the original document): "2nd Element The subject of the agreement must be to do an act with the intention of dishonestly causing a loss to a third person, namely the Commonwealth (Australian Taxation Office). The jury must all agree (i.e. the decisions must be unanimous) that the agreement was to do the same act/acts – it might be the issue of inflated invoices or the issue of invoices in respect of non-existent goods or goods which were not destined for the Chippendale project. It is not sufficient that a half of the jury's number decide that the agreement involved inflated invoices and the remainder decide that the agreement involved non-existent goods" (emphasis in original). (Exhibit A on appeal) 1. In response to questions from the trial judge asked in the course of discussions with counsel concerning this document (in the absence of the jury), the Crown Prosecutor identified the conspiracy agreement alleged as follows: "The agreement was to issue invoices and to cause JKC to obtain refunds, or the benefit of input tax credits, to which it was not otherwise entitled, and whether that was to suit a budget, whether it was for some collateral purpose, the effect of that is that it was also intentionally and dishonestly causing a loss to the ATO." 1. The appellant's counsel objected to the inclusion in the draft of the words "to do an act" under the heading "Second Element", noting that those words do not appear in s 135.4(3) of the Criminal Code which created the subject offence (Transcript p 1757-9). After discussion with the judge, counsel said that he sensed that the trial judge was against him on the objection (p 1758.30) and indicated that, if words to this effect were to remain in the document, he would prefer the word "act" to remain rather than it being changed to "something". 2. In the course of that discussion the appellant's counsel made the following statement which is not entirely clear, at least as it appears in the transcript, but seems to have been directed to the references to "invoices" in the second part of the "2nd Element": "[The intention] must be, mustn't it – that must be to dishonestly cause a loss, that must be the – within the mind, that's the issue. It must be within the mind to dishonestly cause the loss. It's not simply let's – and this is the difficulty with the manner in which your Honour's, with respect, present element 2 reads. It shatters that fundamental intention to cause a loss in all of the circumstances of the case into tiny little fractures, such as, well, let's over-inflate this invoice and that causes a loss. The substance must be, in the context of this case, let's engage in a scheme that dishonestly causes a loss through all of the facts and circumstances that the Crown have alleged, and that's the difficulty." 1. This interpretation of what counsel said is reinforced by the request that he made shortly after (p 1759.30) that the judge refrain from giving an example under the "2nd Element" heading. The judge accepted that request and the example (relating to invoices) does not appear in the final form of the directions (see the "3rd Matter" referred to in [31] below). 2. After a short adjournment, the trial judge made a further draft of the directions available to counsel. One matter raised by the appellant's counsel in response was as follows: "I should say that I'm not in favour of, in the present seventh element, your Honour had given consideration to inserting 'to make false GST claims' on the second line. I'm not in favour of that for a number of reasons, but that needn't stop my learned friend from closing." It seems that the "seventh element" to which counsel referred was expressed in the draft in the same, or similar, terms to the "7th Matter" in the final form of directions to which I refer below ([31]). Counsel did not later say anything further about that objection. 1. During the course of the appellant's counsel's address to the jury, the trial judge gave both counsel a further draft of the written directions and invited their comments. The appellant's counsel took some objections to the form of the document but none that are presently relevant. It is likely that the document contained the material that appears in the final form under the heading "3rd Matter" (see [31] below). 2. Further discussion about the draft directions occurred later, with one presently irrelevant change being agreed between counsel (Transcript p 1926). Defence counsel did not take any other objection. The Crown's closing address 1. At the commencement of his closing address, the Crown Prosecutor referred a number of times to the need for the Crown to prove beyond reasonable doubt that the appellant and at least one other conspirator had the dishonest intention of causing a loss to the ATO. He continued: "You would also have to be satisfied that Mr Chang, the accused, knew that at the time it was intended to claim, what the Crown says, inflated GST returns for JKC, or Protons as it was later known, that to do so would be or was dishonest. And I'll in turn come to discuss the evidence, including the evidence of Mr Chang himself, from which the Crown says you would be satisfied beyond reasonable doubt that Mr Chang knew that the object of the conspiracy was to do things with the intention of dishonestly causing a loss to the ATO." 1. After a luncheon adjournment, the Crown Prosecutor continued: "Prior to lunch, ladies and gentlemen, I was taking you through what the Crown says are some of the important matters about which you must be satisfied beyond reasonable doubt and you will recall that one of the things I said was that the Crown alleges that Mr Chang was part of a conspiracy to do something with the intention of dishonestly causing the ATO a loss. So now turning to something that it is said the conspiracy was to do, the Crown says that such things include the preparation and creation of invoices from High Trade Construction to JKC; the preparation and creation of invoices from Lobbyfit to JKC or Protons, as it was later known; the involvement in the preparation of business activity statements for JKC Protons and the signing of business activity statements for JKC and Protons. But before you could find Mr Chang guilty of conspiring with Simon Chan and Li Zhang to do something, you must be unanimous, the Crown says, as to the something said to have been the object of the conspiracy. I will say something about that later, but in effect it means that if seven of your number think that Mr Chang was involved in doing only the business activity statements for a particular period and five of your number think it was only related to another period, that although all 12 of you might have thought he was involved in doing business activity statements, if you don't actually agree as to at least one thing on those then you couldn't be unanimous. But, again, I hope not to confuse matters. His Honour will give you some directions about that and I will give you an example later, perhaps tomorrow." 1. Later, the Crown Prosecutor said: "The general object of the conspiracy, so as between the two schemes, the Crown says, was for JKC Protons to receive invoices that were either inflated or were for furniture, fixtures and fittings that it never actually received or used – I might call those the phantom fixtures, fittings and furniture – and then for JKC or Protons to claim GST input tax credits for the invoices received. … So, in total, it's the Crown case that during the course of the two schemes, JKC or Protons National lodged business activity statements containing inflated claims or false claims totalling $2.994 million; that is, $2.994 million above what it was entitled to claim in respect of the development of the Chippendale Project. Because JKC never paid the inflated aspect of HTC's invoices, nor did it, does it appear, pay for the invoices of the phantom furniture, fittings and fixtures, but it did receive the GST credits and refunds relating to these invoices, when JKC was placed into administration and then later into liquidation it caused the ATO a loss which the ATO could not recover. That loss was crystallised when HTC was also placed into liquidation and then further crystallised when the third tier companies were either liquidated or were simply deregistered, there being no way then of the ATO ever recovering the almost $3 million worth of GST. So that's how the loss, the Crown says, has occurred. It's the Crown case that this is how the conspiracy to do things with the intention of dishonestly causing a loss was intended to operate and how indeed it was carried out. It's the Crown case that each of [S]ong Chang, Simon Chan and Li Zhang worked closely with each other, particularly in respect of issuing invoices between different related companies and preparing GST returns for lodgement with the ATO." 1. Later again the Crown Prosecutor said: "In the present case it will be seen that after changing its GST accounting model to the non-cash or accruals basis, JKC made numerous and significant claims for GST refunds based on invoices it received from High Trade Construction. Having heard this now for nine weeks, you probably think this much is obvious. Had it been operating under the cash basis, JKC could only have made GST claims for input tax credits when it actually paid High Trade Construction. But by using the non-cash or the accruals basis, JKC was able to make what the Crown says were knowingly inflated and false GST refunds or claims based on the liability – that is, the paper liability – JKC said arose from receiving those invoices. … All that you must find beyond reasonable doubt is that Mr Chang was a knowing participant in an agreement with Simon Chan and Li Zhang to do something with the intention of dishonestly causing the ATO a loss. Someone of the three of them must've done an overt act in furtherance of the conspiracy, and Mr Chang, with at least one of the other co-conspirators must have intended to do the something, and that is all. If you find that all three were knowingly in a common agreement as the Crown has alleged, then Simon Chan's instructions to Jamie Maston to prepare the GST returns based on the invoices, and based on JKC's accounting records, will be sufficient to be an overt act. Likewise, in the emails, Song Chang's revising of Simon's draft business activity statement spreadsheets will also be sufficient to be an overt act. Most of the emails between them would also be sufficient to constitute an overt act. As would Song Chang's signing of the JKC business activity statements themselves. All of these things would be sufficient, the Crown says, to be an overt act if you find that all three were knowingly in the common agreement as the Crown as [sic] alleged." Defence counsel's address 1. In the course of his address, defence counsel posed the question of why the alleged conspirators would have intended that the group companies go into liquidation. He contended that there would have been no sense in constructing the home units if it was intended all along that the group companies go into liquidation (Transcript pp 1839-40). The written directions to the jury 1. The written directions that the trial judge gave to the jury included an identification of the matters that constituted the "legal ingredients" that the Crown was required to prove beyond reasonable doubt. 2. Having referred to the need for the Crown to prove that the appellant made an agreement with Mr Zhang and Mr Chan, and did so intentionally, the directions continued: "3rd Matter The subject of the agreement must be to do something with the intention of dishonestly causing a loss to a third person, namely the Commonwealth (Australian Taxation Office). The jury must all agree (i.e. the decision must be unanimous) that the agreement was to do the same thing/things – it is not sufficient that a half of the jury's number decide that the agreement involved a thing: 'A' and the remainder decide that the agreement involved a thing 'B'. It must be the unanimous decision that the agreement involved 'A' or 'B' or both. … 7th Matter The Accused or one other party to the agreement, intentionally committed an overt act in pursuance of the agreement i.e. did something in putting the agreement to make false GST claims with the intention of dishonestly causing a loss to the Australian Taxation Office, into effect. The jury must all agree (i.e. the decision must be unanimous) that the same overt act/acts was or were done pursuant to the agreement – it is not sufficient that a half of the jury's number decide that a party to the agreement did act: 'X' and the remainder decide that the party to the agreement did act: 'Y'. It must be the unanimous decision that the party did either act 'X' or 'Y' or both" (emphasis of "all agree" as in original). 1. Other directions in the document included the following: "Necessary Knowledge of Co-conspirators For a person to be guilty of a criminal conspiracy, he must know the facts that make the act or acts dishonest and with the intention of causing the loss. In the present case, the Crown must prove beyond reasonable doubt that the Accused knew the following facts: a. the agreement related to GST claims made on behalf of JKC Developments Pty Ltd; and b. the claims were false in that they were based upon invoices which were not legitimate; c. the Accused knew the invoices were not legitimate; and d. the Accused was acting dishonestly." The Summing-Up 1. With reference to the "3rd Matter" identified in the written directions, the trial judge said: "Thirdly the jury must all agree that the agreement was to do the same thing or things. Let us take an example. If some of you think that there was an agreement between two of the persons involved in this alleged conspiracy if I can put it that way without meaning to suggest anybody was, but who had a plan to say well look, this is really not about GST for us, we want to make sure that one or other company gets more money for whatever purpose. And the third person said, look I also agree with that but in my view the plan is to defraud the Tax Office. Now that is not the same act, you might find that both are wrong but for you to find this accused guilty you must agree that the three of them agreed upon the same thing or things." 1. In referring to the "7th Matter" listed in the document, the trial judge said: "The seventh matter is as follows, that the accused or one other party to the agreement intentionally, and that is to be contrasted to accidentally – I will just talk about intention again – committed an overt act in pursuance of the agreement. That is to say, in terms of this particular allegation one or other of the parties to the agreement did something in putting [into effect] the agreement to make false GST claims with the intention of dishonestly causing a loss to the Australian tax office into effect." 1. The trial judge again referred to the relevant agreement as one to make false GST claims at p 38 of the summing-up. 2. In turning to "general categories of facts for the Crown to prove", the trial judge said: "Firstly, that the agreement related to GST claims made on behalf of JKC Developments – so that is the first matter – because this is said to be an illegal agreement relating to GST claims. … The Crown does not have to prove that the overt act or acts were done by the accused, so there is no requirement that the accused person needed to have done that, it can be the act of any person who is a party to the criminal agreement. So in this case again, and I am not suggesting any overt act in particular, but at the end of your considerations you determine that there was, to put it colloquially, a scheme to defraud the Tax Office of GST rightly due to it – I will put this very colloquially – and you determine that Mr Chan, the accused, and Mr Zhang were party to such an agreement, and you determine that you are all satisfied that Mr Li Zhang, for example, took one of the false claims down to the Tax Office and handed it to the Tax Office and got the refund, if that is the only overt act that would be sufficient to discharge the Crown's obligation to prove an overt act. It does not have to be by the accused, it does not have to be by Mr Chan, it has to be by one of the three of them in this case." 1. In the course of summarising the Crown's submissions his Honour said: "The Crown's submissions, and with no disservice to them, were these as I understood them. He argued to you that the conspiracy, so the Crown case established, was to do certain things including; the creation of invoices from High Trade Construction to JKC, the creation of invoices from Lobby Fit to JKC, the preparation of business activity statements for JKC and the signing of such statements. That he said was the conspiracy to do those, were the things he relied upon. … The Crown said to you that it was never intended that JKC would actually pay for the inflated parts of the High Trade invoices or from the Lobby Fit. So the argument is, you understand it, inflated invoices all submitted to the Tax Office to get GST credits or benefits if I can put it loosely that way, all the while it was never intended that JKC would actually pay for the inflated parts of those invoices. … [The Crown Prosecutor] said to you that when JKC was placed into administration and later into liquidation it caused the loss to the Australian Taxation Office which it could not recover. He argued that the loss was crystallised when High Trade constructions was also placed into liquidation and further crystallised when the third tier companies were either liquidated or deregistered. Ultimately, he said by all of those mechanisms the result was the Tax Office was unable to recover something less than $3 million, the $2.994 million, which he contended the evidence showed it was owed." 1. In referring to the appellant's counsel's submissions, the trial judge said that a number of questions had been posed, as follows: "Why did High Trade Constructions go into liquidation? Is there a broad scheme which involved necessarily the liquidation of JKC? Is there any evidence of anybody knowing about a proposed liquidation prior to it taking place? 'Why bother', he asked 'building a building if the only purpose to the thing' was the scheme? Why pay somebody millions of dollars relating to the construction of the building 'if the scheme was only about extracting some GST funds'. And finally, 'Why sell the units at heavy discounts towards the end of the Chippendale project if you could sell them for full price?'" 1. At the conclusion of the summing-up, both counsel raised limited points with the trial judge, none being of present relevance. As a result, his Honour gave some further directions to the jury. DISPOSITION OF THE APPEAL AGAINST CONVICTION GROUND 1: WHETHER THE CROWN SUBMISSIONS AND TRIAL DIRECTIONS LEFT THE CONSPIRACY UNDEFINED AND INCLUDED ELEMENTS WHICH WERE INCORRECT, ELIDED OR UNCLEAR 1. The essence of the appellant's submissions in relation to this ground of appeal is encapsulated in the following paragraphs of his written submissions: "65 In the written directions, the '3rd matter' … which was made over objection of the appellant's counsel, suffered from the [following] vices: i it elided the agreement with an overt act pursuant to the agreement, leaving the agreement undefined, instead myriad possible agreements were provided for and it was left to the jury to define the agreement; ii it was ambiguous as to whether the agreement: i) was only to do a thing or things; ii) included one or more steps to cause loss, being: (a) that invoices issued were never to be paid; (b) liquidation of entities. iii it was ambiguous as to who needed to have an intention of dishonestly causing the loss …; iv it suggested that the jury did not need to be unanimous about the intended means to cause loss. … 70 As to the conflation of overt acts and the agreement, and propounding multiple agreements, the case left to the jury enabled a conviction based on an agreement to prepare a single BAS or an agreement to write an email in relation to the issuance of a particular invoice, that is, separate and distinct agreements. The directions given by the Court were for an agreement with potentially a multitude of specific objects, which was to do some things with the intention of causing a loss. This, it is submitted, creates uncertainty as to the verdict (and, as submitted below, involves latent duplicity)." 1. I accept that neither the Crown's submissions nor the trial judge's written directions were as clear as they should have been. At times the distinction between the terms of the agreement the subject of the conspiracy, the means by which the object of the conspiracy was intended to be achieved and overt acts done pursuant to the agreement was not maintained. Nevertheless, I do not consider that the jury would have been under any misapprehension as to the conclusions at which it had to arrive, beyond reasonable doubt, if it was to convict the appellant. 2. The written direction under the heading "3rd Matter" (see [31] above) exemplifies the lack of clarity. This direction stated that the Crown had to prove that the conspiracy agreement was "to do something" with the requisite dishonest intention. The appellant's counsel objected at trial to the inclusion of these words (see [19] above) and his counsel on appeal (who did not appear at the trial) initially submitted that their inclusion amounted to a misdirection because they did not reflect the language of the offence provision, s 135.4(3), there being no words to that effect in that provision. 3. In carefully reasoned written submissions in response, the Crown contended otherwise, submitting that sense could only be made of the provision if such words were notionally read into it. It pointed out that in any event their inclusion in the direction did no more than erect an additional hurdle for the Crown to surmount and that their inclusion was therefore favourable to the appellant. However, ultimately the appellant did not press his complaint about the inclusion of those words in the direction, with the result that it is appropriate for this Court to assume that they were properly included and not to express a view as to the merits of the argument not now pressed. 4. There remained the fact that the "something" to which the direction referred was undefined, at least to that point in the document. Nevertheless, in my view a fair reading of the document taken in the context of the trial as a whole indicates that the "something" that the parties had to be found to have agreed to do was "to make false GST claims" (with the requisite dishonest intention). This was the agreement referred to in the "7th Matter" by the Crown in its description of its case to the jury panel and in opening and closing (see the emphasised portions of [13] to [28] above). 5. There was the potential for confusion when in closing address the Crown referred to its case as being that the conspiracy agreement included the preparation of invoices (see [26] above), this reference occurring in the course of the Crown's discussion of the "3rd Matter" in the written directions. These submissions were reflected in the trial judge's summing-up (see [37]). 6. In my view these references resulted in the Crown assuming the additional burden of satisfying the jury beyond reasonable doubt that the parties to the agreement intended the agreement to be implemented by particular means, namely the preparation of inflated or false invoices. As opened, the agreement was simply one to make false GST claims with the requisite dishonest intention. On that basis, the jury would have had to be unanimous in concluding that that agreement was made but there would have been no requirement of unanimity about any further agreement that the parties may have made as to the means by which the object of the conspiracy was to be achieved. Allegations as to these means would have amounted only to particulars of the Crown case. 7. This is demonstrated by the decision in R v Walsh (2002) 131 A Crim R 299; [2002] VSCA 98, a case to which the trial judge was not referred. In that case, Count 1 of the indictment alleged a conspiracy to defraud the victim "by dishonestly inducing [a trust] to invest money in a purported investment scheme proposed by" the alleged co-conspirators. The Crown's case at trial suggested that there were different means by which the conspirators contemplated that their object might be achieved. In that context, Phillips and Buchanan JJA said: "When the charge is obtaining property by deception by means of misrepresentation, the making of the misrepresentation has been regarded as an essential ingredient of the crime charged. It is otherwise, however, where the crime is conspiracy to defraud and the means agreed upon by the conspirators to achieve that end is the making dishonestly of false representations. The agreement to make any particular representation is not regarded as an essential element of the crime, but merely a path to arriving at the objective of the conspirators, namely, obtaining an advantage by fraud" (at [57]). 1. In adopting these observations, and in referring to other decisions in which Walsh was followed, this Court said in Pratten v R [2014] NSWCCA 117: "46 The Court [in Walsh] concluded that a direction was not required because the crime alleged was a conspiracy to defraud and the means agreed upon by the conspirators to achieve that end was the dishonest making of false misrepresentations. In such a case the agreement to make any particular representation was not an essential element of the crime and accordingly not appropriately the subject of any specific direction as to unanimity. That is not this case." 1. The Crown's reference in the present case to an intention to use inflated or false invoices (and the trial judge's repetition of that reference in the summing-up) would not in my view have diverted the jury from the clear understanding that it must have had that, whatever else it had to find, it was necessary for it to conclude unanimously and beyond reasonable doubt that the appellant had agreed with Mr Zhang and Mr Chan to make false GST claims (with the intention of dishonestly causing a loss to the ATO). That was how the case was opened and what the nine weeks of trial was all about. There were repeated references throughout the trial to false GST claims and it was made abundantly clear to the jury that the relevance of the production of inflated or false invoices was that they would facilitate the making of false GST claims. That is, they were the means by which the object of the agreement was to be achieved. 2. As noted above ([42]), the appellant's counsel at trial took an objection to the inclusion in the directions under the heading "3rd Matter" of the words "to do something". He did not however make the complaint which is now made in support of this ground of appeal. Counsel argued on appeal that the reference at trial to shattering the "fundamental intention to cause a loss in all the circumstances of the case into tiny little fractures" ([20] above) constituted such an objection but I do not accept that it did. Rather, it was made to support the successful point I have identified in [21] above. It did not make the points now made. 3. In these circumstances, I consider that r 4 of the Criminal Appeal Rules 1952 is applicable and the appellant requires the Court's leave to challenge on appeal directions that were not relevantly challenged at trial. To preclude "armchair" appeals based on alleged errors of law which are not reflective of injustice to an accused person when considered in the context of the trial as a whole, the Court needs to be cautious in granting leave. It will only do so where a substantial injustice has, or at least may have, arisen from the error (Papakosmas v The Queen (1999) 196 CLR 297; [1999] HCA 37 at [72]-[73]). For the reasons I have given, I do not consider that there was any relevant error of law in the directions but, even if there was, no substantial injustice flowed from it as the jury was well aware of the task before it. 4. The absence of relevant objection by the appellant's counsel at trial was a strong indication that in the context of a long trial in which competent counsel vigorously defended his client's rights, the jury would not have been left with any relevant misunderstanding or doubt as to what it had to find. The following passage quoted in R v Aziz [1982] 2 NSWLR 322 at 331 from an earlier authority is in point: "What is important to be borne in mind is that the absence of objection by counsel, in particular to matters involving criticism of the form, content or balance of the summing-up, furnishes a basis for concluding that, in the context of the atmosphere as it existed at the trial, and in the contemporary awareness of the manner in which the summing-up was spoken, there was not apparent at the time of the trial any reasonable ground for concern regarding the adequacy and fairness of the summing-up. The Court of Criminal Appeal, no matter how experienced its members, and no matter how comprehensive the written record may be, can never hope to recapture the full texture of the atmosphere in which the question of the accused's guilt was submitted to the jury in the concluding stages of the trial. It is for this reason that, at an appellate level, there is a well recognised hesitance in entertaining grounds of appeal challenging the form, content or balance of a summing-up when those matters have not been adverted to by counsel at the proper time during the trial. This it is that Rule 4 enshrines." 1. I return then to the terms of this ground of appeal. Contrary to the assertions in them, the conspiracy was not "undefined" and did not include elements which were "incorrect, elided or unclear". As I have said, the conspiracy alleged was clear: it was to make false GST claims (with the requisite dishonest intention). The means by which that object was to be achieved was the production of inflated or false invoices. An intent to use those means was not one of the essential ingredients of the offence. However by reason of the Crown's submissions about the written directions under the heading "3rd Matter" and the trial judge's reference to them in the summing-up, the Crown assumed a burden that it would not otherwise have had of satisfying the jury, unanimously and beyond reasonable doubt, that the means by which the conspiracy was to be effected was the production of inflated or false invoices. 2. The assumption of this additional burden worked in the appellant's favour and therefore did not prejudice him. The position was similar to that which Phillips and Buchanan JJA described in Walsh at [61]: "Nor did that form of pleading lead to uncertainty in the verdict. Indeed it might be that the judge's direction as to the need for unanimity among the jury if they chose between the two ways in which the Trust might have been defrauded was not necessary, but if that was an error it was an error in favour of the applicant." 1. Contrary to the appellant's submission (see [40] above), the written directions to the jury did not elide the conspiracy agreement with an overt act done in furtherance of the agreement. That the distinction between the two concepts was maintained is apparent from a comparison of the "3rd Matter" with the "7th Matter" (see [31] above). 2. Moreover, again contrary to the appellant's submissions, the "3rd Matter", when read in the context of the addresses and summing-up, was not relevantly ambiguous. The reasons I have given above indicate why the jury's task would have been clear to it. 3. Further, contrary to the appellant's submission, the Crown did not put that the jury had to be satisfied that the conspirators intended that group entities be liquidated. It was sufficient for the Crown to allege and prove that the conspirators had the dishonest intention of causing a loss. The means by which that loss was intended to come about were not ingredients of the offence. Whilst the Crown unnecessarily assumed the burden of satisfying the jury unanimously and beyond reasonable doubt that, in an immediate sense, the loss was to be brought about by JKC relying upon inflated or false invoices, it did not assume such an unnecessary burden in respect of any intended ultimate means by which that loss would be caused, for example, by the liquidation of group entities. 4. Again contrary to the appellant's submissions, the "3rd Matter" in the written directions was not "ambiguous as to who needed to have the intention of dishonestly causing the loss" (see [40] above). It is clear that when the "3rd Matter" is read in conjunction with the "6th Matter" (which is as follows) the jury was told that the appellant and at least one other party to the agreement had to be proved to have had the dishonest intention. "6th Matter The Accused and at least one other party to the agreement intended or meant that an act be done pursuant to the agreement, with the intention of dishonestly causing loss to the Australian Taxation Office." 1. The appellant further submitted that the "3rd Matter" in the written directions suggested that the jury did not need to be unanimous about the intended means to cause loss ([40] above). This submission must be rejected. The directions stated, in terms, that the jury had to be unanimous about the "something" the subject of the agreement. This was to make false GST claims and, because of the Crown submissions to which I have referred above (see [45]), it also included the intent that this be achieved by means of inflated or false invoices. GROUND 2: WHETHER THE OFFENCE OF WHICH THE APPELLANT WAS CONVICTED IS AN OFFENCE UNKNOWN TO THE CRIMINAL LAW 1. The appellant submitted in relation to this ground that the trial judge's written directions to the jury under the heading "3rd Matter", that the "subject of the agreement must be to do something" (with the requisite intention) did not reflect the terms of s 135.4(3) which created the offence of which the appellant was convicted. As noted above ([43]), in oral argument the appellant however withdrew that submission. As a result, this ground of appeal was impliedly abandoned. GROUND 3: WHETHER THE WRITTEN DIRECTIONS AND SUMMING-UP WERE INTERNALLY INCONSISTENT AND CONFUSING 1. This ground of appeal is sought to be supported by submissions to the same effect as those put in support of Ground 1. They should be rejected for the reasons I have given in relation to Ground 1. GROUND 4: THE CHARGE ON THE INDICTMENT WAS LATENTLY DUPLICITIOUS OR ALTERNATIVELY THE VERDICT IS UNCERTAIN 1. The concepts of duplicity and uncertainty of verdict referred to in this ground were described in Walsh by Phillips and Buchanan JJA (with whom Ormiston JA agreed) at [40] as follows: "As we apprehend it, a count is bad for duplicity if it charges more than one offence; on the other hand, if the count charges but one offence and evidence is led of more than one instance of such offending, then the verdict, if against the accused, will be uncertain. This last is sometimes called latent uncertainty because it depends, not so much upon the terms of the count, as upon the case sought to be made by the Crown." 1. The appellant submitted that the charge in the indictment in the present case was "latently duplicitous because there are a number of agreements (or, a number of 'somethings') which could have formed the basis for conviction and therefore the indictment alleges a number of different offences" ([88]). 2. In my view the present is a case to which the following observations in Walsh apply: "64 But again, this seems to mistake the nature of the charge. Count 1 charges conspiracy between 1 October 1991 and 31 December 1992 and it was the Crown case that there was a continuing, or ongoing, conspiracy of the nature described. There was not to be but one investment, but a first investment and further investments of money in the scheme being propounded. The conspiracy was to induce the Trust to make those investments, from time to time, and to induce it to do so by dishonest means. The dishonest means thus related not only to the capacity of those involved and the nature of future investments; they related also to what had been done with early investments when further investments were under consideration. Concealment of the facts involving what had happened was part and parcel of the dishonest means, and these were alleged in paragraph (b) under count 1. We see no difficulty in the form of count 1 in that regard: the charge is not bad for duplicity, nor is there uncertainty in the verdict. The jury had to be satisfied that the applicant had been party, between 1 October 1991 and 31 December 1992, to a conspiracy to defraud the victim by inducing it, dishonestly, to invest money in the scheme being advocated. That was the charge, and the only charge. The rest described the dishonest means allegedly adopted and, to the extent that those means were adopted, the overt acts done in furtherance of the conspiracy." 1. As in Walsh, there was here, for the reasons that I have given in relation to Ground 1, only one conspiracy alleged. That was a conspiracy to have false GST claims lodged. References in the evidence, and in the trial judge's instructions to the jury, to the preparation of invoices were to the means by which the dishonest object was to be, and was, achieved and to overt acts done in furtherance of the conspiracy. 2. In the alternative in relation to this ground of appeal, the appellant submitted that the charge against him was "latently duplicitous by alleging 2 separate schemes, described as scheme 1 and scheme 2, which were described as 2 separate conspiracies" (paragraph [89]). 3. However, the two schemes were not alleged by the Crown to constitute separate conspiracies but were referred to simply to distinguish chronologically between different stages of the Chippendale project. 4. In relation to this ground, the appellant also relied upon the Crown's submissions concerning the "3rd Matter" in the then proposed written directions (see [26] above). As I have concluded, however, insofar as those submissions referred to the preparation of invoices, they related to the means by which the conspirators intended to effect their dishonest agreement to have false GST claims lodged. The fact that the Crown, and then the judge, unnecessarily indicated that the jury needed to agree unanimously in relation to those means simply constituted a further hurdle that the Crown had to surmount to obtain a conviction. The jury remained well aware that it needed also to conclude, unanimously and beyond reasonable doubt, that the alleged conspirators agreed (with the requisite dishonest intention) to have false GST claims lodged. 5. Additionally, because the points sought to be made by this ground of appeal were not taken at trial, the comments I have made above in relation to r 4 of the Criminal Appeal Rules (see [51] above) apply equally in relation to this ground of appeal. GROUND 5: WHETHER THE VERDICT WAS UNREASONABLE BECAUSE THE CROWN CASE REQUIRED A CONCLUSION THAT THE APPELLANT INTENDED THAT LOSS WOULD BE CRYSTALLISED ON LIQUIDATION AND THERE WAS NO EVIDENCE TO SUPPORT SUCH A CONCLUSION 1. The passage from the Crown's closing address cited by the appellant in support of his assertion that the Crown case was that the conspiracy charged included an agreement of the conspirators ultimately to put relevant group companies into liquidation (see [27] above) does not assist the appellant. In that passage it was asserted that it was part of the Crown case to prove that JKC and HTC were placed into liquidation, thereby crystallising the ATO's loss. It was, however, not contended that an intention to liquidate formed part of the conspiracy agreement. It was the fact, as the Crown told the jury (Transcript p 1776.20), that to obtain a conviction the Crown did not have to prove that loss was actually caused. However, that it was caused was a relevant factual matter which may have assisted the jury in finding that the conspiracy to lodge false GST claims was proved beyond reasonable doubt. 2. The appellant further submitted that it was part of the Crown case that the conspiracy agreement included an agreement that JKC would never pay the HTC and Lobbyfit invoices. 3. He relied on the following passage from the Crown closing address: "It's the Crown case that it was never intended that JKC would actually pay for the inflated aspects of HTC's invoices, nor … the invoices from Lobbyfit relating to the phantom fixtures, fittings and furniture" (Transcript p 1774). 1. This Crown submission did not have the effect that an agreement or intention that the inflated or false invoices not be paid was a constituent part of the conspiracy agreement it alleged. As I have said earlier ([49] above), the jury were clearly apprised of what that agreement was alleged to have been (that is to lodge false GST claims, with the requisite intention). What was to occur concerning invoices was a part of the means, and indeed the principal means, by which the object of the conspiracy agreement was to be achieved. GROUND 6: WHETHER A COMBINATION OF THE ERRORS AND DEFECTS ALLEGED IN THE EARLIER GROUNDS OF APPEAL GAVE RISE TO A MISCARRIAGE OF JUSTICE 1. For the reasons that I have given, leave under r 4 of the Criminal Rules to rely on Grounds 1 and 4 should be refused and the remaining grounds should be rejected. The submissions in support of the grounds of appeal do not identify any errors or defects which, either alone or in combination, gave rise to a miscarriage of justice. THE SENTENCE LEAVE APPLICATION The sentencing judgment 1. Due to the limited nature of the proposed grounds of appeal to be relied upon if leave to appeal is granted, it is unnecessary to summarise or quote many aspects of the sentencing judgment. As will be apparent from those grounds (identified below), the principal issues that the appellant (as I will continue to call him notwithstanding that he requires leave to appeal) seeks to raise relate to his involvement in the conspiracy, the extent to which invoices were inflated and whether the appellant was aware of the amount of that inflation. The following references to the sentencing judgment accordingly focus on those matters. 2. The sentencing judge found that JKC received GST refunds of $2.994 million beyond those to which it was entitled, comprising $1,260,189 in respect of invoices received from HTC during the first part of the Chippendale project, $217,482 in respect of invoices received from HTC during the second part of that project and $1,517,319 in respect of invoices received from Lobbyfit (ROS 2.3). 3. The judge's principal findings concerning the appellant's role in and knowledge of the conspiracy were as follows: "I make the following findings of fact. Consistent with the verdict of the jury I find and conclude beyond reasonable doubt that the offender knew that the agreement related to GST claims made on behalf of JKC the developer. Secondly, that the claims were false in that they were based upon false invoices. Thirdly, the offender knew the invoices were false and fourthly, that he was acting dishonestly when he took part in this particular scheme. So much, in my view, is supported by the documentary evidence including that the offender had witnessed the fixed price building contract which specified a contract price of about 12.65 million. That the offender had had access to the project feasibility analysis of which the computer analysis nominated him as the author and which estimated the construction costs of the project at $12 million. The fact that he had sent the first progress claim giving an estimate of a construction cost as a little over $12 million. That the offender had provided to Mr Chan a co-conspirator to be sent the external accountant, an estimate in March 2004 that the construction cost was $14 million and most importantly, emails which support the proposition that this offender had knowledge of the construction costs claimed which were significantly more than those assessed by the quantity surveyor. I conclude that the offender knew of the GST status of JKC and other companies in the group, and that he was involved in the issuing of inflated or false invoices and knew of the amount of the GST to be claimed by the respective companies. The evidence established and I accept that the offender worked on the business activity spreadsheets and emails which were the subject of extensive evidence showed that he produced the figures and reviewed such figures. In addition, the evidence showed that he instructed Mr Chan to issue invoices and specified amounts. The offender also signed a number of business activity statements on behalf of JKC in the period September 2004 until February 2006. The evidence disclosed and I also accept to the relevant degree that is beyond a reasonable doubt that the offender was connected to Lobby Fit and that he was appointed a sole director of that company as well as secretary and shareholder when it was registered in January 2005 and that he resigned from those positions in May of 2005 and was replaced by a person which the evidence established had not been in this country since January 2002. The offender was also the nominated addressee to receive bank statements from the St George Bank on behalf of that company in the period April 2005 to July 2006 and in July of 2005, he signed a business activity statement on behalf of Lobby Fit. In late June 2006 he signed a cheque which was to pay for company tax for Lobby Fit and finally that his computer user name was listed as the last author to save that particular company's general ledger on the High Trade computing system. The evidence disclosed that he was also connected to other third tier companies which were said to be subcontractors on the Chippendale project. The Crown has included in his extensive and comprehensive written submissions on sentence extracts from a number of significant emails between February 2003 and April 2006 which evidenced the offender's role in the scheme and his relationship with his co-conspirators. In summary there was constant contact between them. His role was shown as reviewing the relevant monthly business activity statements. On occasion he provided instructions for the issuing of invoices. His co-conspirator Mr Chan often sought his advice and instructions as to the appropriate invoices to be issued and generally emails show that the offender demonstrated a comprehensive knowledge of the GST status of JKC and the High Trade companies, as well as the true position in relation to the cost of the Chippendale project. In addition the offender was sponsored to come to Australia by his co-conspirator Mr Zhang. At times he communicated with Mr Zhang about the liabilities to the Australian Taxation Office and conveyed instructions to Mr Chan about that matter." (ROS 5-7) 1. Later, his Honour recorded a finding that the appellant "had a complete knowledge, perhaps not the most complete knowledge but a comprehensive knowledge of the scheme and what it was designed to achieve" (ROS 11). 2. His Honour continued: "I accept the Crown's submissions that this offender had an important role in implementing the scheme, although Mr Li Zhang was clearly the controlling mind of the group of companies and of the conspiracy. So much is common between the parties, as counsel has expressed the position, including Mr O'Connor, on behalf of the offender. The offender continued to put the scheme into operation even when Mr Zhang was overseas, and was also involved in the June Australian Taxation Office audit of JKC. Some emails confirm that he offered 'solutions' in relation to the GST position of JKC. I conclude that this offender and Mr Chan were active participants in carrying out the criminal conspiracy and that this offender had the relevant knowledge of the existence and scope of the fraud and assisted in implementing that fraud, the most significant contributions being assisting in the issue of inflated or false invoices. (ROS 14) … In relation to the emails, counsel submitted that the offender was merely a messenger for Mr Zhang. He did not confide in him and the relationship was that of an employee/employer. Again, support is derived for this proposition, or these propositions, from the evidence of the offender. For similar reasons I do not consider that the offender was a witness of truth, at least in regards to his connection with the crime of which he has been found guilty by the jury." (ROS 16) 1. The sentencing judge rejected the appellant's contention that the evidence did not establish his knowledge of the construction costs of the project and that there was no evidence of his knowledge of Lobbyfit's invoices (ROS 14-16). 2. Later, his Honour returned to the appellant's role in the conspiracy. His Honour acknowledged that the appellant may well have regarded himself as having "limited choice in the matter if he was to retain his employment" but found that "it was the offender's decision to be party to the conspiracy and to undertake the steps established by the evidence" (ROS 23). His Honour also acknowledged that the appellant was not the "master mind" and took that into account as a significant matter (ROS 24). 3. In his concluding remarks, the sentencing judge said: "In my opinion the offender's role was significant and important and it could not have been carried out without the relationship of trust that existed between him and Mr Zhang. In short, not only were his accounting/mathematical skills required to supply appropriate figures for the invoices and the like but also his trust and confidentiality were important for the success of the scheme." (ROS 27) 1. As indicated earlier, his Honour sentenced the appellant to a term of 5 years imprisonment to date from 10 June 2015, with a 3 year non-parole period to date from the same date. Ground 1: Whether the sentencing judge erred by failing to make findings as to the extent of dishonesty of the appellant and the appellant's involvement in the carrying out of the conspiracy 1. This ground of appeal was not advanced by the appellant in the unqualified way in which it is expressed. To have done so would have been untenable as the sentencing judge made extensive findings concerning the appellant's involvement in the conspiracy. These appear in the extracts in [77] to [79] above. 2. Instead, the appellant sought to support the ground on two more limited bases. 3. First, the appellant contended that, for the full amount of the loss to be relevant to his sentencing, the sentencing judge would have to have found that the conspiracy agreement to which he was a party involved an agreement or intention that relevant group companies would ultimately be liquidated. However, as I pointed out earlier ([70]), it was not necessary for the appellant's conviction that this be found and such a case was not put by the Crown. Moreover, it was not necessary for the amount of the loss to be relevant to the appellant's sentencing that there had been any such agreement or intention. The sentencing judge did not suggest that there had been but, quite properly, took the amount of the loss in fact suffered into account in sentencing. 4. Secondly, the appellant contended that it was "open to his Honour to find the appellant believed the tax would ultimately be paid, in respect of at least some of the invoices", and that the loss to the ATO as a result of those invoices being relied upon for GST refund claims was simply a cashflow loss. 5. This submission should not be accepted. The sentencing judge did not find that, when conspiring, the appellant knew or intended that a loss of the magnitude of $2.994 million would be suffered. Rather, he found, consistently with the jury verdict that, first, the appellant conspired with the co-conspirators to have false GST claims lodged, dishonestly intending to cause loss to the ATO, and secondly that the loss was in fact $2.994 million. A finding that the appellant believed that some or all of the invoices would in fact ultimately be paid would have been a finding in the appellant's favour on sentence. As a result, the appellant would have had to satisfy his Honour of that proposition on the balance of probabilities (Filippou v The Queen (2015) 256 CLR 47; [2015] HCA 29 at [64], [66]). However the only evidence in support of the proposition was the appellant's own evidence, and the sentencing judge, and by inference the jury, rejected him as a witness of truth, at least as to the extent of his involvement in the alleged conspiracy (ROS 16). In these circumstances, the appellant stood no realistic prospect of such a finding being made. 6. I add that it was by no means clear to this Court that this second argument put to it in relation to this ground of appeal was put to the sentencing judge. The appellant was asked to demonstrate that it had been put (Transcript p 40) but did not do so. Ground 2: Whether the sentencing judge erred by finding that invoices were "inflated" by a total $2.994 million 1. As the Crown pointed out on appeal, the sentencing judge relied upon a concession at the sentencing hearing by counsel for the appellant that the loss occasioned by the conspiracy was $2.994 million (ROS 17). The concession was contained in paragraph [23] of the appellant's Outline of Submissions on Sentencing. 2. The appellant argued on appeal that the concession was implicitly conditional on the whole of the Crown case succeeding. However the Crown case was in fact fully successful, although the case was as I have described it and not as the appellant has contended on appeal that it was. I do not consider that any relevant condition attached to the concession, certainly not one that was not satisfied. 3. The sentencing judge was in my view entitled to rely upon the concession. Accordingly, this ground of appeal must be rejected. Ground 3: Whether the sentencing judge erred by finding that the appellant was aware that invoices were "inflated" by a total of $2.994 million 1. The appellant submitted that this finding was made at two points in the sentencing judgment. The first was in the following passage: "Consistent with the verdict of the jury I find and conclude beyond reasonable doubt that the offender knew that the agreement related to GST claims made on behalf of JKC the developer. Secondly, that the claims were false in that they were based upon false invoices. Thirdly, the offender knew the invoices were false and fourthly, that he was acting dishonestly when he took part in this particular scheme." (ROS 5) Secondly, his Honour later said that he rejected "the proposition that the offender did not know the invoices were fraudulent" (ROS 24). 1. Neither of these statements amount to findings that the appellant was aware of the inflation or falsity of each and every invoice reflected in the total loss of $2.994 million. Rather, his Honour was finding that the appellant was aware in a general sense of the inflation or falsity of the invoices. In contrast, when his Honour dealt with the quantum of loss in his sentencing judgment, he did not include a finding that the appellant was aware of the precise amount of the loss. Accordingly no such conclusion was taken into account on sentence and this ground of appeal must accordingly be rejected. Ground 4: If the Indictment is duplicitous the sentencing court is to sentence on the conspiracy that occurred first in time 1. This ground of appeal does not arise as I have not found the charge in the indictment to be duplicitous. Oral address 1. In oral address, the appellant based his application for leave to appeal against his sentence on the following three points. 2. First, he submitted that the sentencing judge had not made, but ought to have made, a finding as to what the scheme was to achieve, including whether it involved an attempt to liquidate group companies or whether it involved simply an intention to obtain a deferment of payment to the ATO. His second point was that there was no express finding that the conspiracy extended to the second scheme described by the Crown, that is, that involving Lobbyfit. 3. I do not consider there to have been any deficiency in the sentencing judge's findings. His Honour found that the conspiracy was to have JKC obtain GST refunds beyond its entitlement by relying upon inflated or false invoices. He expressly stated (ROS 2) that the conspiracy involved two schemes, one of which was the second scheme as described by the Crown. Consistently with what I have found was the way in which the Crown's case was put to the jury, his Honour did not find on sentence, nor need to find, that the conspiracy agreement involved an intention to liquidate group companies. 4. The third point was an elaboration of the point referred to in [87] above, namely, that it was open to the sentencing judge to find that the appellant and his co-conspirators intended only to obtain a temporary advantage. There is nothing that need be added to what I have already said in relation to that point. ORDERS 1. For the reasons that I have given, the following orders should be made: 1. Grant leave to appeal against sentence. 2. Dismiss the appeals against conviction and sentence. 1. JOHNSON J: I agree with Macfarlan JA. 2. SCHMIDT J: I agree with Macfarlan JA. ********** 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: 16 December 2016