Sigalla v R

1. [1]

   HOEBEN CJ at CL: I agree with Brereton JA and the orders which he proposes.

2. [2]

   BRERETON JA: On 22 November 2016, following a trial in the Supreme Court before Adamson J and a jury, the applicant Andrew John Sigalla was convicted, on an indictment presented by the Commonwealth Director of Public Prosecutions, of 24 counts of dishonestly using his position as a director of TZ Limited with intent to gain a benefit for himself or a third party, in contravention of s 184(2)(a) of the Corporations Act 2001 (Cth) (“Corporations Act”). On 10 February 2017, the applicant was sentenced to an effective total term of imprisonment of ten years, commencing on 22 November 2016 and expiring on 21 November 2026, with a non-parole period of six years expiring on 21 November 2022. The applicant appeals from the conviction, and seeks leave to appeal from the sentence.

3. [3]

   Although originally the conviction appeal arguably raised questions of fact, it is now confined to questions of law and so lies as of right, save for two matters. First, it requires an extension of time because it was filed significantly out of time. [1] Although the chronology is not entirely clear, it appears that a notice of intention to appeal was filed within time on 1 March 2017. An extension of time was granted until 1 September 2017, but a further extension was refused. The Notice of Appeal was ultimately not filed until 19 December 2019. However, while drawing attention to the delay, the Crown did not oppose an extension of time. Secondly, because the remaining grounds of appeal are complaints about directions to which objection was not taken at trial, they require leave. [2] This issue is addressed below, in the context of the relevant grounds of appeal.

The company and its officers

1. [4]

   The applicant became a founding shareholder and director of Telezygology Inc (“TZI”) (a company incorporated in the United States, and not the company referred to in the indictment) after being approached by an inventor who wanted to commercialise his inventions. On 14 February 2002, TZI applied to be registered in Australia as a foreign corporation, with the applicant as a director.

2. [5]

   The company of direct relevance to the offence, TZ Limited (“TZL”), had been incorporated in Australia as a public company in 1996, but was relevantly relisted on the Australian Stock Exchange in early 2004, when it acquired 100% of TZI. TZL’s main function was to raise funds for the operations of its wholly owned subsidiary TZI, which continued to operate the business and develop technology in the United States.

3. [6]

   The applicant was a director of TZL between 2004 and 2005, and from 29 January 2007 until 18 June 2009. The conduct the subject of the charges of which the applicant was convicted occurred between 8 December 2006 and 2 March 2009 or thereabouts. For the period between 2006 and January 2007, during which the conduct the subject of the first two counts occurred, he was not formally appointed as a director, and the Crown relied on the extended definition of a director in s 9 of the Corporations Act. Although in issue at the trial, the jury’s verdict resolved that question adversely to the applicant, and it is not in dispute in this Court. Thus it is no longer in dispute that the applicant was a director of TZL, whether by formal appointment or via the extended definition, at all relevant times.

4. [7]

   Other directors of TZL at relevant times included Mr Kelliher, Mr Leibowitz, and Mr Falconer. Falconer was a chartered accountant at Dunbar Associates Pty Ltd (“Dunbar Associates”), and the company secretary, as a well as a director of TZL throughout the relevant period. Dunbar Associates provided accounting and corporate secretarial services to TZL from about 2004. Dunbar Associates employed one Mr Fagredin as an intermediate accountant from 2004, and he performed day-to-day banking and bookkeeping functions for TZL from 2004 to May 2009, reporting directly to Falconer, who finalised and approved all of Fagredin’s reports drafted for TZL. Fagredin simply followed instructions given to him by Falconer and, at times, the applicant. Fagredin required authorisation from Falconer for any transactions which he undertook, including when he became an authorised signatory on TZL’s accounts at some time in 2006.

5. [8]

   In a separate proceeding, [3] Falconer pleaded guilty to six offences: five contrary to s 184(2) of the Corporations Act and one contrary to s 1309(1) of that Act. Most of the offences to which Falconer pleaded guilty involved a series of transactions and, save for two counts, the matters to which he pleaded guilty reflected several, though not all, of the counts of which the applicant was ultimately found guilty. Falconer was a beneficiary of three of the transactions in respect of which the applicant was charged and convicted. On the Crown case, Falconer performed the ministerial acts which implemented the relevant transaction in several of the counts which alleged that the applicant had, directly or via related entities, received a benefit.

The alleged offences in overview

1. [9]

   As ultimately amended and left to the jury, the charges in the indictment, all of which resulted in convictions, were that the applicant, contrary to subsection 184(2)(a) of the Corporations Act:

   1. (1)

      on or about 8 December 2006 at Sydney and elsewhere in the State of New South Wales, did use his position as a director (as defined in s.9 of the Corporations Act 2001) of TZ Limited ("TZ") dishonestly with the intention of directly gaining a benefit for ZMS Investments Pty Ltd ("ZMS") and himself in that he caused $300,000 of funds of TZ to be transferred to ZMS;

   2. (2)

      on or about 28 December 2006 at Sydney and elsewhere in the State of New South Wales, did use his position as a director (as defined in s.9 of the Corporations Act 2001) of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for Chyron Services Ltd (“Chyron”) and John Falconer in that he caused $300,000 of funds of TZ to be transferred to Chyron;

   3. (3)

      on or about 2 February 2007 at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited ("TZ") dishonestly with the intention of directly gaining a benefit for Joyeagle Ltd (“Joyeagle”), John Falconer and/or himself in that he caused to be issued by TZ to Joyeagle 847,458 fully paid ordinary shares in TZ without payment of any subscription for the said shares;

   4. (4)

      on or about 5 July 2007 at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (''TZ") dishonestly with the intention of directly gaining a benefit for Golf Link Partners Pty Ltd ("Golf Link") and himself in that he caused $300,000 of funds of TZ to be transferred to Golf Link;

   5. (5)

      on or about 19 July 2007 at Sydney and elsewhere in the State of New South Wales did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for Linda Lau, Profit Pearl Holdings Ltd (“Profit Pearl”) and John Falconer in that he caused $400,000 of funds of TZ to be transferred to Linda Lau of which $300,000 was for the purchase of certain shares in Reader China Group Ltd;

   6. (6)

      on or about 14 February 2008 at Sydney and elsewhere in the State of New South Wales did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for ZMS Investments Pty Ltd (“ZMS") and himself in that he caused $200,000 of funds of TZ to be transferred to ZMS;

   7. (7)

      on or about 20 February 2008 at Sydney and elsewhere in the State of New South Wales did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI") and himself in that he caused $500,000 of funds of TZ to be transferred to BZI;

   8. (8)

      on or about 25 February 2008 at Sydney and elsewhere in the State of New South Wales did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI”) and himself in that he caused $68,000 of funds of TZ to be transferred to BZI;

   9. (9)

      on or about 3 March 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Limited (“BZI") and himself, in that he caused $300,000 of funds of TZ to be transferred to BZI;

   10. (10)

       on or about 20 March 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (''TZ") dishonestly with the intention of directly gaining a benefit for ZMS Investments Pty Ltd ("ZMS") in that he caused $300,000 of funds of TZ to be transferred to Heidtman & Co Lawyers on account of a creditor of the said ZMS;

   11. (11)

       on or about 17 July 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd ("BZI") and himself in that he caused $500,000 of funds of TZ to be transferred to BZI;

   12. (12)

       on or about 21 July 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI”) and himself in that he caused $167,783.37 of funds of TZ to be transferred to BZI;

   13. (13)

       on or about 23 July 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI”) and himself in that he caused $600,000 of funds of TZ to be transferred to BZI;

   14. (14)

       on or about 18 August 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI*) and himself in that he caused $525,000 of funds of TZ to be transferred to BZI;

   15. (15)

       on or about 24 September 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ") dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI”) and himself in that he caused $500,000 of funds of TZ to be transferred to BZI;

   16. (16)

       on or about 13 October 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for himself in that he caused $300,000 of funds of TZ to be transferred to himself;

   17. (17)

       on or about 16 October 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd ("BZI") and himself in that he caused $400,000 of funds of TZ to be transferred to BZI;

   18. (18)

       on or about 20 October 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited ("TZ") dishonestly with the intention of directly gaining a benefit for himself in that he caused $300,000 of funds of T2 to be transferred to himself;

   19. (19)

       on or about 26 November 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI") and himself in that he caused $200,000 of funds of TZ to be transferred to BZI;

   20. (20)

       on or about 10 December 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI”) and himself in that he caused $669,534 of funds of TZ to be transferred to BZI;

   21. (21)

       on or about 15 December 2008, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited ("TZ") dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd ("BZI") and himself in that he caused $782,000 of funds of TZ to be transferred to BZI;

   22. (22)

       on or about 23 January 2009, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI") and himself in that he caused $307,000 of funds of TZ to be transferred to BZI;

   23. (23)

       on or about 2 March 2009, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI") and himself in that he caused $250,000 of funds of TZ to be transferred to BZI; and

   24. (24)

       on or about 2 March 2009, at Sydney and elsewhere in the State of New South Wales, did use his position as a director of TZ Limited (“TZ”) dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd (“BZI") and himself in that he caused $50,000 of funds of TZ to be transferred to BZI.

2. [10]

   In respect of each count, the Crown case was that the applicant used his position as director of TZL dishonestly by causing funds to be transferred (or, in the case of count 3, shares to be issued), to the benefit of himself or a third party, when he knew that he was not entitled to do so, with that knowledge rendering the conduct dishonest.

3. [11]

   As is apparent, the alleged beneficiary of the charged transactions varied between the counts. In all but two of the charged instances (counts 2 and 5, in which Falconer was the sole alleged beneficiary), it was alleged that there was a benefit for the applicant, either directly and/or via private companies controlled by him, namely ZMS Investments Proprietary Limited (“ZMS”) or BZI Limited (“BZI”). The applicant’s wife was the only shareholder in ZMS, and he and his wife were the directors. BZI was the trustee of the Sigalla Family Trust; at all relevant times, the applicant and his wife were the only shareholders in BZI; both were directors, and the applicant was the secretary.

4. [12]

   In short, the Crown contended that the applicant caused the charged transactions, in some cases by using his own position to authorise the transaction, either directly via internet transfer, or by using his own signature (which generally required another authorised signatories’ signature); and in others by agreeing with or generally directing Falconer to induce an authorised signatory (often Fagredin) to approve the transaction or use another authorised signatories’ signature without their authorisation. In many instances, the transfer of funds to the applicant coincided with him having a pressing obligation to a third party – most notably arising from betting transactions – and the proceeds of the transfer to the applicant were immediately applied to meet that obligation.

5. [13]

   At trial, the applicant did not dispute the occurrence of any of the transactions alleged by the Crown, but he denied that he acted dishonestly. As will appear below, at the trial, some issues other than dishonesty were raised, including whether the applicant came within the extended definition of a director under s 9 of the Corporations Act, whether he could be said to have caused certain transactions which had apparently been implemented by others (in particular, it was said that he was unable to cause certain transfers of funds, or to cause shares to be issued in TZL), and whether the Golf Link transaction was part of an agreed rebate.

6. [14]

   However, the dominant issue at trial was whether the applicant acted dishonestly while a director. His case was that he was entitled to receive the money he received. The applicant gave evidence that it was an industry standard that people who raise capital charge a commission, and that he had always been paid commissions outside of his consultancy agreements for capital raising. He said that he was owed the money, on account of past commissions earned for capital raising, or by way of the return of money deposited in the TZL bank account by his clients, or both. He at times referred to a "claim of right" in respect of these payments.

The circumstances of the offences

1. [15]

   The circumstances the subject of the offences charged in the indictment fall into five categories, as follows:

   1. (1)

      secret commission for capital raising through issue of convertible notes to Oasis (Counts 1, 2 and 3);

   2. (2)

      Golf Link transaction and loan to Mr Jeff O’Donnell (Counts 4, 6 and 7);

   3. (3)

      purchase of shares in Reader China Group (Count 5);

   4. (4)

      property at Ingleburn (Counts 10, 17 and 21); and

   5. (5)

      gambling debts (Counts 8, 9, 11, 12, 13, 14, 15, 16, 18, 19, 20, 22, 23 and 24).

2. [16]

   The following summary is largely based on that contained in the respondent’s written submissions. There was not, at least in this court, significant controversy as to the facts.

3. [17]

   In the latter part of 2006, Andrew Lai, a Hong Kong resident, introduced Linda Lau, also a Hong Kong resident, to DKR Soundshore Oasis Holding Fund Limited (“Oasis”). Each played a part in negotiations that culminated in Oasis purchasing, on 1 December 2006, 200 convertible notes issued by TZL for $20 million (“the Oasis Transaction”). TZL agreed to pay to Lai’s company Yorkshire Capital Ltd a commission of 6% (or $1.2 million) (of which he privately agreed to pay Lau 1%), and to Lau a commission of 0.5% (or $100,000). Lai issued an invoice to TZL for his commission of $1.2 million on 1 December 2006, and Lau issued an invoice to TZL for $100,000 on 12 December 2006. [4]

4. [18]

   On 8 December 2006, Falconer sent a facsimile to Mr Navarro, TZL's then bank manager at the National Australia Bank (“NAB”), requesting that $300,000 be paid to ZMS from a bank account of TZL. The same day, an amount of $300,000 was transferred out of a bank account of TZL and credited to ZMS’s account with NAB. Although the facsimile appeared to have been signed by Kelliher, his evidence was that he was in Chicago at the time and did not authorise his electronic signature to be used on the document. The receipt was recorded in the ledger of ZMS, by the applicant's accountant, Fiona Wilkie of William Buck, on instructions from the applicant, as "income fees received Joyeagle $300,000". This transaction conferred a benefit of $300,000 on the applicant and his company ZMS, and was the subject of Count 1.

5. [19]

   On 27 December 2006 a facsimile, signed by Falconer and apparently signed by Kelliher (who did not recall signing it), was sent to Navarro, requesting the transfer of $1.2 million to Yorkshire Capital Ltd, $100,000 to Mr Chan (Ms Lau's son), and $300,000 to Chyron Services Ltd (“Chyron”), a company incorporated in the British West Indies and beneficially owned by Falconer. On 28 December 2006, an amount of $300,000 was transferred from TZL and credited to a bank account for Chyron. This conferred a benefit of $300,000 on Falconer and his company Chyron, and was the subject of Count 2.

6. [20]

   On 9 January 2007 Falconer, as secretary of TZL, sent an email to Computershare Registry Service, requesting that it issue 847,458 shares in TZL to Joyeagle Ltd (“Joyeagle”), a company incorporated in the British Virgin Islands and beneficially owned by Falconer. The accompanying documentation announced to the ASX that the shares were to be issued "to external advisers in respect of the recent capital raising and acquisition of the Intevia Business Unit announced yesterday". On or about 29 January 2007, TZL issued 847,458 shares in TZL, worth $500,000, to Joyeagle. This transaction was recorded in the TZL General Ledger as an "issue of shares in lieu of final payment to external” [sic]. It conferred a corresponding benefit on Falconer and his company Joyeagle, and was the subject of Count 3.

7. [21]

   The transactions were not disclosed to TZL's shareholders or auditor, or to the ASX, as related party benefits.

8. [22]

   The Crown case was that the applicant caused each of the three transactions to be made by agreement with Falconer, and that they communicated to obtain secret commissions from the capital raising, by way of liquidated sums and a share issue. Arrangements between the applicant and Falconer to take these benefits (in addition to the legitimate commissions payable to Lai and Lau) were recorded by Falconer in a diary note, as follows (AS referring to the applicant and JF to Falconer):

9. [23]

   Between 11 and 27 December 2006, the applicant and Falconer exchanged emails about an invoice, purportedly from Lau, for $1.2 million, which was sent from the applicant's email account to Falconer on 27 December 2006, claiming payment of AUD$700,000 in cash payable to Chyron, and AUD$500,000 payable in shares (874,457 shares at $0.59) to be issued to Chyron, for a "success fee for convertible note issue as per agreement as per our mandate agreement: 6.0% of AUD twenty million (20M)". Lau gave evidence that she had not had any discussions with the applicant or Falconer about any arrangements pursuant to which they would receive a commission or fees for their work; she was not party to a deal in which 12% was split between her, Lai, the applicant, and Falconer; she did not know of, nor did she have any involvement with, Chyron; and she had no knowledge of, nor any involvement in, the invoice from Chyron for $1.2 million in respect of the Oasis Transaction. The Crown case was that the invoice was fabricated to account for the benefits taken by the applicant and Falconer, and that the $700,000 cash payment claimed in the invoice concealed the $300,000 payments illegitimately made to ZMS and Chyron.

10. [24]

    The applicant denied that he was a director of TZL at the time of counts 1 and 2, stating that his only role at that time was to assist with capital raising. His case was that:

    1. (1)

       the transaction the subject of Count 1 represented a payment that was due to him for the successful Oasis Transaction;

    2. (2)

       in respect of Count 2, he was unable to cause the transfer of any funds as he was not a signatory on any bank account; he only later found out that Chyron was one of Falconer's clients; and on the date of the transaction, he was overseas with his family; and

    3. (3)

       in respect of Count 3, he was unable to cause shares to be issued in the company, as the only person with that ability was Falconer; and that he understood Joyeagle was a company associated with Stephen Harvey, a client of Falconer.

11. [25]

    In October 2003, TZI effected a reverse takeover of CED Australia Ltd (CED), a public company listed on the ASX. Following the takeover, CED changed its name to TZ Limited. Before the reverse takeover, CED owned various businesses, including Golf Link, which provided software to the Australian Golf Union that facilitated the calculation of handicaps. After the takeover, TZL decided to sell the Golf Link business, in order to raise funds. The applicant, who was responsible for conducting the sale on behalf of TZL, negotiated a sale price of $2 million to a consortium of four buyers, which included Golf Link Partners Pty Ltd (Golf Link Partners), of which O'Donnell was the principal.

12. [26]

    By arrangement with the applicant, O'Donnell invested in the TZ group. However, despite repeated requests, the applicant did not produce to him proof of his shareholding. In June 2007, O'Donnell and the applicant exchanged several emails about this issue, culminating in an offer by the applicant to lend O'Donnell $300,000. On 5 July 2007, on written instructions of Falconer, $300,000 was transferred from a TZL bank account to a Golf Link Partners account. O'Donnell then transferred the $300,000 from Golf Link Partners' account to his own account, on the basis that it was money that the applicant had lent to him personally.

13. [27]

    The transfer of $300,000 to Golf Link Partners, in satisfaction of the applicant’s personal obligation to advance that sum to O’Donnell, conferred a benefit of that amount on the applicant, and on Golf Link Partners. It was the subject of Count 4. The written instruction from Falconer to Navarro stated that the transfer was to an account in the name of Linda Lau, but the account details provided were those for an account in the name of Golf Link Partners. The transaction was recorded in the ledger of TZL by Fagredin, on the instruction of Falconer, as a consulting fee to Lau.

14. [28]

    On 14 February 2008, $200,000 was transferred from the TZL bank account to the ZMS bank account, on written instructions signed by Falconer and Fagredin. The relevant bank statement for the ZMS account shows that the $200,000 received on 14 February 2008 placed the account in funds to meet a cheque for $200,000 in favour of O'Donnell. O'Donnell's evidence was that this was an additional amount lent to him by the applicant because he still had not received all his share certificates.

15. [29]

    The payment of $200,000 to ZMS conferred a benefit of that amount on the applicant and his company ZMS, and was the subject of Count 6. This transfer followed a series of communications between the applicant and Falconer. On 14 February 2008, the applicant sent an email to Fagredin and Falconer, instructing Fagredin that "[t]he $300,000 needs to be transferred to ZMS account first thing in the morning. John will confirm." A copy of this email bears a handwritten note from Fagredin "less $100k for credit cards". The payment was recorded in TZL's ledger as a consulting fee paid to Yorkshire Capital.

16. [30]

    On 20 February 2008, $500,000 was paid from a TZL bank account to an account in the name of BZI, on written instructions signed by Falconer and Fagredin. The transfer of $500,000 to the BZI account placed it in funds to meet a cheque in the amount of $104,370 in favour of "Berndale", which was deposited into a bank account for Berndale Securities Ltd, the trust account for BBY Limited (BBY), a company through which ZMS and BZI operated share trading accounts. An amount of $300,000 was transferred from BZI to ZMS, placing it in funds to pay a cheque in the amount of $300,000 in favour of the applicant. That cheque was deposited into the applicant's bank account and placed it in funds to pay a cheque of $300,000 in favour of O'Donnell. O'Donnell's evidence was that this was a further amount lent to him by the applicant because he still had not received all his share certificates. Part of the balance of the $500,000 was transferred, by way of electronic transfers on 22 February 2008 of $20,000 and $22,000, to the applicant's bank account and his NAB Gold Rewards Visa card.

17. [31]

    The transfer of $500,000 to BZI conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 7. It had been the subject of email correspondence dated 20 February 2008 between Navarro, Fagredin, and Falconer, copied to the applicant. In one of the emails, Navarro recorded that he "[j]ust spoke to Andrew as well, as he is trying to have $500k transferred to BZI. You can include instructions for such on the same written request [...]". In the final email, Falconer (copying the applicant) instructed Fagredin to complete the written instructions required by NAB for the transfer to BZI, which he described as a "payment for sub-underwriting fees." The transaction was recorded in TZL's ledger as a fee paid to an unidentified entity for sub-underwriting services, and in the general ledger of BZI as a loan from the applicant.

18. [32]

    On 17 October 2008, the applicant, O'Donnell, and Luik Holdings Pty Ltd (“Luik”), a company associated with O'Donnell, entered into a Deed of Acknowledgement of Debt, which recorded that Luik was indebted to the applicant in the sum of $1 million. By a Deed of Mutual Release dated 27 April 2009, each of the parties discharged the others from their respective obligations.

19. [33]

    The applicant accepted that he had caused the $300,000 referred to in Count 4 to be transferred to Golf Link, but said that the transaction was part of a rebate that TZL had agreed to pay Golf Link Partners, as a partial refund for the sale price of the business on account of defective software. He said that the payment the subject of Count 6 was either commission owing to him or the return of money deposited in the TZL bank account by his clients, or both; and that the payment the subject of Count 7 was on account of commission owed to the applicant by TZL in respect of capital raising.

20. [34]

    Lau invited the applicant to invest in Reader China Group Ltd (“Reader”), a company through which Lau and Lai conducted a business in China. They negotiated a share subscription agreement which, in a draft dated 3 July 2007, specified that the applicant and ZMS would subscribe for shares. When Lau met with the applicant in Hong Kong to execute the agreement, the applicant told her that the shares would be subscribed in the name of Profit Pearl Holdings Ltd (“Pearl”), a company beneficially owned by Falconer. Lau arranged for the transaction documents to be amended to reflect the identity of the new subscriber, and the executed agreement, dated 20 July 2007, nominated Pearl as the subscriber. The consideration for the share subscription, which was expressed in HK dollars, was equivalent to AU$300,000.

21. [35]

    On 19 July 2007, on written instructions signed by Falconer and Fagredin, an amount of $400,000 was transferred out of a TZL bank account into an HSBC account of Lau. Of the amount received by Lau, approximately $300,000 was for the share subscription in Reader. Falconer instructed Fagredin to record the payment of $400,028 ($28 being for bank fees) as "consulting fees" in TZL's general ledger, and in an email to the applicant dated 21 July 2007, Falconer described the transfer to Lau as an amount to pay consultant fees. In a subsequent email dated 7 September 2007 to Lau, the applicant stated "[d]on't tell John about reader he won't be happy". In her evidence, Lau denied having received the funds as payment for consultant fees, and said that the amount was for the subscription for the shares. The transaction conferred a benefit of $100,000 on Lau and $300,000 on the applicant, being the price for the subscription for the shares in Reader.

22. [36]

    The applicant’s evidence in chief was that the payment the subject of Count 5 was on account of commission owed to the applicant by TZL for capital raising. In cross-examination, however, he said that the money was owed to him in respect of an overpayment from the Golf Link transaction.

23. [37]

    On 5 June 2006, ZMS borrowed $10,006,201 from Perpetual Investment Management Limited (“Perpetual”), for the purpose of developing an industrial estate at Ingleburn (“Perpetual Loan”). Under the loan agreement, ZMS was obliged to pay interest on the loan each month. In the second half of 2007 and the first months of 2008, ZMS was incurring interest on the Perpetual Loan of approximately $90,000 to $100,000 per month. As at February 2008, ZMS had defaulted in respect of several months of interest payments, and was in arrears to the extent of $600,000.

24. [38]

    Heidtman & Co Lawyers (“Heidtman”) acted for Perpetual. Where a Perpetual client was in arrears and Heidtman was in communications with a client about the arrears, Heidtman would obtain payment on behalf of Perpetual.

25. [39]

    On 12 February 2008, the applicant sent an email to Falconer stating "I really need to pay perpetual asap so they stop from suing me. The CB funds are released on Friday, can I get an advance before then?". Later that day, Falconer sent an email to Fagredin, instructing him to transfer $300,000 to Heidtman and to “[m]ark the payment 'Sigalla' as he authorised it". The applicant subsequently instructed Fagredin to hold off on making the transfer, but on 20 March 2008, sent an email to Fagredin instructing him to transfer $300,000 to Heidtman on behalf of ZMS, stating "John as ok please do ASAP and send me a copy". On the same day, $300,000 was transferred from the TZL account to a bank account of Heidtman, on instructions signed by Falconer and Fagredin which stated that the transaction was on "behalf of ZMS Investment". Upon Heidtman receiving the $300,000 into its trust account, the funds were transferred to Perpetual and recorded in the ZMS Perpetual account as "Interest Receipt”. This effected a reduction in ZMS’s indebtedness to Perpetual, and thus a benefit to the applicant’s company ZMS, in that amount, and was the subject of Count 10.

26. [40]

    As at 30 September 2008, ZMS was in arrears by at least $150,000. On 13 October 2008, Perpetual issued a Default Notice to ZMS. ZMS responded that it would pay $300,000 within the next few days. Perpetual’s agreement to this proposal was communicated by an email to the applicant dated 14 October 2008, asking "can you arrange the bank cheque asap". On 15 October 2008, BZI paid $300,000 by cheque to Perpetual; however, the cheque was dishonoured by NAB, as there were insufficient funds in BZI's account. On 16 October 2008, $400,000 was transferred electronically, by someone using the applicant's internet access details, from TZL to BZI. On the same day, written instructions were sent to NAB to transfer $300,000 from the BZI account to Perpetual, and a $300,000 payment, described as "Interest Receipt”, was recorded in Perpetual’s account for ZMS. The transfer of $400,000 on 16 October 2008 conferred a benefit of that amount on the applicant and his company BZI, and was the subject of Count 17.

27. [41]

    On 13 November 2008, Perpetual stipulated a deadline of 12 December 2008 for ZMS to refinance the Perpetual Loan. On 11 December 2008, an email was sent to Perpetual advising that ZMS proposed to pay $500,000 the next day, being $43,802.85 for interest in arrears, and the remainder as a principal reduction, on condition that Perpetual agree to extend the deadline to 31 January 2009. Perpetual agreed. On 15 December 2008, $782,000 was transferred electronically, by someone using the applicant's internet access details, from TZL to BZI. The $782,000 transferred to BZI was used to fund a cheque for $500,000 to "Pay Cash"; a deposit slip indicated that it was used to credit the Perpetual account for ZMS. On 15 December 2008, two payments totalling $500,000 were recorded in the Perpetual account for ZMS – $43,802.85 as “Interest Receipt", and $456,197.15 as "Principal Decrease". The transfer of $782,000 to BZI on 15 December 2008 conferred a benefit of that amount on the applicant and his company BZI, and was the subject of Count 21.

28. [42]

    The applicant said that the payment the subject of Count 10 was on account of commission owed to the applicant by TZL in respect of capital raising, and that the payments the subject of Counts 17 and 21 were either commission owing to him or the return of money deposited in the TZL bank account by his clients, or both.

29. [43]

    The Crown case was that this category reflected transactions in which amounts of money were transferred from TZL for the benefit of the applicant (either to his personal bank account or to BZI), to place him in funds to make on-payments to Tom and Bill Waterhouse Pty Ltd (“Waterhouse”) (with which he had a credit betting agreement under which he had a set credit limit for racing bets on account), or, in the case of Count 11, another gambling platform. Tom Waterhouse gave evidence that while most client accounts were required to be settled weekly, some clients who were known for a long period of time, including the applicant, were afforded greater flexibility, so that for example an account might be required to be settled once it reached a certain amount, rather than on a weekly basis. From time to time, as his account reached a certain level of debt, the applicant was required to pay off a portion of the account, in order to be permitted to continue to place bets.

30. [44]

    On 25 February 2008, on written instructions signed by Falconer and Fagredin, an amount of $68,000 was transferred from TZL to BZI. Immediately before this transfer was effected, the applicant sent an email to Fagredin and Falconer stating "John [Falconer] can you please get Farook [Fagredin] to transfer the last 68,000 to zms account for the sub underwriting today." The transaction was described on the TZL General Ledger as "balance of sub underwriting”. The money was then transferred to ZMS, with the description in the BZI ledger of "loan as" [‘as’ referring to Andrew Sigalla], thereby placing the ZMS account in funds to meet a cheque for $110,000 in favour of Waterhouse, which was used to reduce the applicant's gambling debt to that company. As at 23 February 2008, his debt to Waterhouse was $347,500. The transfer of $68,000 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 8.

31. [45]

    On 3 March 2008, on written instructions from the applicant and Fagredin, $300,000 was transferred from TZL to a BZI account. On the last business day preceding this transaction, Friday 29 February 2008, the BZI account had been overdrawn, and the inward transfer permitted a number of cheques to be met, including one for $109,888.57 in favour of "Berndale Securities", which was deposited into a bank account of Berndale Securities Ltd, the trust account for BBY; and one for $100,000 to "Tom and Bill Waterhouse", which reduced the applicant's gambling debt to Waterhouse. On or about 3 March 2008, the applicant's debt to Waterhouse was $355,150. The transfer of $300,000 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 9.

32. [46]

    On 17 July 2008, on written instructions signed by Fagredin and Falconer, $500,000 was transferred from TZL to BZI. The $500,000 placed BZI in funds to pay:

    1. (1)

       a cheque for $87,780.15 to Berndale Securities, the trust account for BBY, which was credited to BZI's account with BBY;

    2. (2)

       a cheque for $200,000 to Eskanders Betstar Pty Ltd (Betstar), to meet gambling debts owed by the applicant. As at 17 July 2008, the applicant's betting account with Betstar was in debit to the extent of $230,839.75.

33. [47]

    On 21 July 2008, on written instructions signed by Falconer and Fagredin, $167,783.37 was transferred from TZL to BZI. This followed an email sent on 20 July 2008 by the applicant to Mr Sommerlad of NAB, explaining that the BZl account was overdrawn because Fagredin could not transfer funds from TZL to BZI until a drawdown from the TZL term deposit had cleared. The applicant advised that TZL now had cleared funds, and that Fagredin would email the relevant request for a transfer (from TZL to BZI). The $167,783.37 placed the BZI account in funds to meet a cheque for $200,000 in favour of Waterhouse, which reduced the applicant's gambling debt to Waterhouse. As at 19 July 2008, his debt to Waterhouse was $863,599. The transfer of $167,783.37 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 12.

34. [48]

    On 23 July 2008, $600,000 was transferred from TZL to BZI. on written instructions signed by Falconer and Fagredin, which were forwarded by email from the applicant to Sommerlad with a note "James [Sommerlad]. This will be quicker. Please confirm when completed". The $600,000 placed the BZI account in funds to meet a cheque for $250,000 to Waterhouse, which reduced the applicant's gambling debt to Waterhouse. As has been noted, at 19 July 2008, his debt to Waterhouse was $863,500. The balance of the $600,000 was used by BZI for cheques in the amount of $69,932.53 and $77,850.84, both in favour of Berndale Securities, the trust account for BBY, which were credited to BZI's account with BBY. The transfer of $600,000 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 13.

35. [49]

    On 18 August 2008, the applicant sent an email to Fagredin, instructing him to transfer $525,000 to BZI “for share purchase". The same day, on written instructions signed by Falconer and Fagredin, $525,000 was transferred from TZL to BZI; and $500,000 was transferred from the BZI account to the applicant's personal bank account, which placed his personal account in funds to meet a cheque for $500,000 to Waterhouse, reducing his gambling debt to Waterhouse. As at 16 August 2008, his debt to Waterhouse was $1,943,280. The transfer of $525,000 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 14.

36. [50]

    Early on the morning of 24 September 2008, the applicant sent an email to Fagredin and Falconer, instructing Fagredin to transfer $500,000 to BZl "first thing this morning". Later on 24 September 2008, the applicant sent an email to Sommerlad, advising that Fagredin had faxed the funds transfer request and requesting that Sommerlad process this request "straight way", because the applicant was about to fax another transfer request that he needed "actioned ASAP." The same day, on written instructions signed by Falconer and Fagredin, $500,000 was transferred from TZL to BZI, and $400,000 was then transferred from the BZI account to the applicant's personal account, and then, on written instructions signed by the applicant, to Waterhouse, reducing the applicant's gambling debt to Waterhouse which, as at 20 September 2008, was $1,604,430. The transfer of $500,000 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 15.

37. [51]

    On 13 October 2008, $300,000 was transferred electronically, by someone using the applicant's internet access details, from TZL to the applicant's personal bank account. The transfer placed the applicant's account in funds to meet a cheque for $300,000 to Waterhouse, reducing the applicant's gambling debt to Waterhouse which, as at 13 October 2008, was $1,947,580. On 14 October 2008, Falconer sent an email to the applicant, stating "[p]lease tell me why you took $335k out of the TZL cheque account without any proper signed authority. This is not going to work if this continues. I am contacting the bank tomorrow to see what I can do to limit your ability to withdraw funds at your leisure. This is bullshit." The applicant replied "[y]ou told me not to use Farouk cause he was busy. It was for share purchase." The transfer of $300,000 conferred a benefit on the applicant of that amount, and was the subject of Count 16.

38. [52]

    On 20 October 2008, $300,000 was transferred electronically, by someone using the applicant's internet access details, from TZL to the applicant's personal bank account. The $300,000 payment placed the applicant's account in funds to meet a cheque in the amount of $300,000 to Tom Waterhouse Pty Ltd, reducing the applicant's gambling debt to Waterhouse which, as at 15 October 2008, was $1,614,680. The transfer of $300,000 conferred a benefit on the applicant of that amount, and was the subject of Count 18.

39. [53]

    On 26 November 2008, $200,000 was transferred electronically, by someone using the applicant's internet access details, from TZL to BZI. The $200,000 placed the BZI account in funds to meet a cheque for $200,000 in favour of Waterhouse, reducing the applicant's gambling debt to Waterhouse which, as at 26 November 2008, was $1,586,780. The transfer of $200,000 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 19.

40. [54]

    On 10 December 2008, $669,534.89 was transferred electronically, by someone using the applicant's internet access details, from TZL to BZl. In part, the $669,534.89 funded a cheque in the amount of $382,540.01 to Berndale Securities, the trust account for BBY, which was credited to BZI's account with BBY. It also funded a cheque in the amount of $200,000 to Tom Waterhouse, reducing the applicant's gambling debt to Waterhouse which, as at 10 December 2008, was $841,220. The transfer of $669,534.89 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 20.

41. [55]

    On 23 January 2009, $307,000 was transferred electronically, by someone using the applicant's internet access details, from TZL to BZI. On the same day, an amount of $300,000 was transferred electronically, by someone using the applicant's internet access details, from BZI to the applicant's personal bank account; and an amount of $300,000 was transferred from the applicant’s account to an ANZ account in the name of “Tom & Bill Waterhouse (Vic) Pty Ltd”, reducing the applicant's gambling debt to Waterhouse which, as at 26 January 2009, was $1,328,970. The transfer of $307,000 conferred a benefit on the applicant and his company BZI of that amount, and was the subject of Count 22.

42. [56]

    On 2 March 2009, $250,000 was transferred electronically, by someone using the applicant's internet access details, from TZL to BZI. On the same day, $50,000 was transferred electronically, by someone using the applicant's internet access details, from the TZL credit card assigned to the applicant to BZI. These two transfers placed the BZI Account in funds to meet a cheque for $300,000 in favour of Tom Waterhouse, reducing the applicant's gambling debt to Waterhouse which, as at 28 February 2009, was $1,782,470. The transfers of $250,000 and $50,000 conferred a benefit on the applicant and his company BZI of those amounts, and were the subject of Counts 23 and 24 respectively.

43. [57]

    The applicant's evidence in chief was that:

    1. (1)

       from around mid-2007, shareholders and clients of the applicant had deposited money into the TZL bank account for the applicant to use when Oasis was ready to redeem a note, or to combine with other shareholders to purchase those notes. The applicant considered that he held the money deposited into the TZL bank account by his clients on trust to purchase shares, off-market. The transactions in which money was transferred from TZL to Berndale Securities were in this category, as BZI's account with BBY was used to conduct the share trading;

    2. (2)

       the payments the subject of Counts 13, 14, 15, 16, 18, 19 and 22 were on account of commission owed to the applicant by TZL in respect of capital raising;

    3. (3)

       the payments the subject of Counts 9, 11, 12, 16, 17 and 21 (as well as 6 and 17) were either commission owing to the applicant, or the return of money deposited in the TZL bank account by his clients, or both;

    4. (4)

       the payment the subject of Count 8 was referable to a transaction in the USA, and was a reimbursement of sub-commissions that had been paid by the applicant personally on behalf of TZL;

    5. (5)

       in September 2008, there was a redemption of the Oasis notes. In the course of this transaction, the directors of TZL were given a non-recourse loan, with which they purchased shares in TZL or "mopped up" the shares from the redemption of the Oasis notes. The transaction the subject of Count 20 related to this non-recourse loan; and

    6. (6)

       the transactions the subject of Counts 23 and 24 were reimbursements of the applicant's relocation expenses when he moved to Chicago to become chairman of the company, as well as a reimbursement of money owed to him.

44. [58]

    In cross-examination, in respect of Count 14 (which, in chief, he had said was commissions owing to him), the applicant stated that the money was "either commission owing to me or moneys that have been deposited into TZL's account for me to use ... to use to purchase shares for the clients who deposited the money in”. In respect of Counts 15 to 19, he proffered a new explanation, namely that the money might have related to a second non-recourse loan issued by TZL to the directors to purchase TZL shares.

45. [59]

    As to the coincidence of timing between the applicant having pressing debts due and payable and the occurrence of transfers to him, it was submitted on his behalf that this did not render the transactions dishonest, as the requirement to pay a pressing obligation would simply provide an occasion for him to draw down what he was entitled to by way of commission, which had accrued earlier when capital had been raised.

46. [60]

    As he claimed that the moneys transferred were, at least in substantial part, remuneration to which he was entitled, the applicant’s remuneration arrangements were relevant. The applicant’s remuneration arrangements with TZL may be summarised as follows:

    1. (1)

       the 2003 Consultancy Agreement: From 1 January 2003 to 25 January 2007, the applicant’s remuneration was governed by a consultancy agreement with TZI, which provided that he, through ZMS, would provide services to TZI for three years, at a rate of $16,666 per month or as otherwise agreed;

    2. (2)

       the 2007 Consultancy Agreement: From 25 January 2007 to 31 July 2008 the applicant’s remuneration was governed, in part, by this agreement, which provided for TZL to pay ZMS $25,000 per month (plus other benefits) for consultancy services;

    3. (3)

       the 2007 Executive Services Agreement: This agreement operated in tandem with the 2007 Consultancy Agreement from 25 January 2007 to 31 July 2008, and provided for TZL to pay the applicant $120,000 per annum for his services as an executive director; and

    4. (4)

       the 2008 Executive Services Agreement: This agreement provided for TZL to pay the applicant $120,000 per annum, plus US$400,000 per annum for services as executive chairman of TZL and president of TZL subsidiaries from 25 January 2007 onwards.

47. [61]

    None of these agreements authorised any such “commissions” as the applicant claimed, although the executive services agreements made specific provision for a bonus payment if TZL was successfully listed on the NASDAQ. The 2007 Consultancy Agreement included a clause permitting additional “bonus plans” to be entered in to, but stated that any payment or other benefit paid to the applicant shall be governed entirely by the rules of such plans.

48. [62]

    After he ceased to be a director of TZL in 2009, in the context of inquiries made by the new directors of the company, the applicant produced a document dated 22 July 2004 from ZMS to TZL which, on its face, might have justified at least some of the payments made to him (“the Mandate Letter”). The Mandate Letter was as follows:

49. [63]

    The letter was purportedly signed by Leibowitz and Falconer on 26 July 2004. However, Leibowitz gave evidence that he did not recall having signed the letter; he did not believe that he had attended any board meeting which approved the terms of the Mandate Letter; he did not believe he had discussed the Mandate Letter with anyone, including Kelliher, Falconer or the applicant; and he had not given any authorisation for his electronic signature to be affixed to the document.

50. [64]

    The Crown case was that the existence of the Mandate Letter was inconsistent with the applicant's consultancy agreements with TZL, which included capital raising in the scope of work and purported to constitute the entirety of any arrangement between the applicant and TZL. Although the letter, if authentic, led to many millions of dollars being paid to the applicant, there was no evidence of any correspondence between the directors about it, and none of the directors – including Leibowitz, Kelliher and Wilson – nor Fagredin, nor the accountants for ZMS, had any knowledge of it.

51. [65]

    Moreover, there was evidence of a forensic computer expert, Rodney McKemmish, who analysed the metadata on the hard drive of Falconer's computer on which the Mandate Letter was found, that the signatures on the document were embedded images, and the letter to which the signatures were attached was created in August 2009.

52. [66]

    The applicant said that the Mandate Letter came about after he had resigned from the board, in the context of a TZL board meeting in July 2004, following a discussion about the applicant's ongoing role in relation to capital raising. At the time, Leibowitz, Falconer and Kelliher were on the board. He gave the Mandate Letter to Falconer following the July 2004 board meeting, and asked him to give it to the other directors. There were no further discussions about the letter. Throughout the period between 2004 and 2006, he submitted invoices to TZL for reimbursement in relation to his role raising capital for TZL. To the extent that it was suggested by the Crown that the Mandate Letter was a recent invention that post-dated the transactions, the applicant’s response was that anything that occurred on Falconer's computer in 2009 had nothing to do with him.

Grounds of appeal

1. [67]

   Originally, the notice of appeal raised the following grounds:

   1. (1)

      the trial judge misdirected the jury as to the elements of an offence contrary to s 184(2)(a) of the Corporations Act;

   2. (2)

      the trial judge erred in admitting evidence of the Perpetual Loan and the applicant’s gambling-related activities because that evidence was not relevant or was otherwise inadmissible;

   3. (3)

      the trial judge erred in refusing to admit evidence that supported the applicant’s case at trial; and

   4. (4)

      the applicant was denied a chance of acquittal that was fairly open to him on one or more of the 24 counts on the indictment, as a result of the conduct of the trial as a whole.

2. [68]

   However, the grounds of appeal were amended, at a late stage, with one new ground (1A) being added, and grounds (2) and (3) being abandoned. The Crown did not oppose leave being granted to amend to add the new ground. The surviving grounds of appeal are that:

3. [69]

   Moreover, ground (4) was relied on only insofar as it is related to new ground (1A). Thus the conviction appeal now involves only the adequacy of the directions given by the primary judge, as identified in amended grounds (1) and (1A) above.

Ground 1 – misdirection as to elements of offence

1. [70]

   As has been noted, Ground 1 contends that the trial judge misdirected the jury as to the elements of an offence contrary to s 184(2)(a) of the Corporations Act. That section relevantly provides:

2. [71]

   At the conclusion of the summing up, the trial judge, without objection, provided to the jury a document entitled “Direction as to the elements of the offence”, which relevantly stated:

3. [72]

   In Kwok v R, the following directions which had been given by the trial judge were seemingly accepted as appropriate by this Court:

4. [73]

   The applicant submitted that the directions given in the instant case were inadequate, in distinction to those given in Kwok, “because they erroneously conflated the physical element (use of position as a director) with the mental element of dishonesty, and that the failure to indicate to the jury that these were independent elements which required separate consideration was exacerbated by the absence of any reference at all in the summing up to the “use of position” element.” It was submitted that the appropriate direction was one to the effect that, for each of the 24 counts, the jury could convict only if satisfied beyond reasonable doubt:

   1. (1)

      that the applicant actually did the acts alleged by the Crown to have ‘caused’ the relevant transfer of funds or issue of shares;

   2. (2)

      that doing those acts constituted a use of his position as a director of TZ; and

   3. (3)

      that such use of position was dishonest and with the relevant intent.

5. [74]

   The essential complaint was that the directions given did not adequately identify and direct attention to the second of those elements. It was submitted that the Crown failed to specify the particular act or omission said to constitute a ‘use’ of the applicant’s position as director of TZL, beyond the general proposition that he ‘caused’ the relevant transactions, and that no attention was paid to the nexus between his directorship and the alleged conduct. It was submitted that the possibility could not be excluded that the applicant might have been convicted on all counts, merely because the jury was satisfied that he was dishonest, notwithstanding that he denied anything to do with the transactions the subject of Counts 2 and 3, and even on the Crown case, had no involvement with the actual mechanism used to effect the transfers referred to in Counts 1 to 8 and 10 to 15.

6. [75]

   It was not an issue at trial that the transactions did not involve a use by the applicant of his position as a director; as has been noted, the predominant issue was that of whether the use was a dishonest one. The applicant’s status as a director was not contentious (except in respect of the first two counts, in respect of which it was resolved adversely to him and is not the subject of appeal). The Crown case on ‘use of position’ was a circumstantial one, based upon the applicant’s role in TZL, his relationship with those who directly implemented relevant transactions where he did not do so himself (in particular, Falconer and Fagredin), and the accrual of benefits to him as a result. It was relevantly encapsulated in the following part of the Crown’s address:

7. [76]

   The applicant had no relationship with TZL other than as a director. This was not a case in which he had multiple roles and relationships, such that it might be said that some of his conduct did, but other did not, involve a use of his position as director. Although he did not directly implement some of the transactions, there was evidence of his influence: for example, Falconer’s diary note in relation to the transactions referred to in Counts 1, 2 and 3; the applicant’s execution of the subscription agreement for the shares in Reader China and subsequent email of 7 September 2007 to Lau, "[d]on't tell John about reader he won't be happy", in respect of Count 5; and the applicant’s involvement in procuring, and receipt of benefits from, the transactions in Counts 10, 11, 12, 13, 14 and 15. Even if the directions were theoretically deficient, they were not practically so in the context of this trial, as it was conducted. The inference that the transactions were a manifestation of a use by the applicant of his position was inescapable, from the circumstance that his only role in and connection with the company was as a director, and from the flow of funds to the benefit of him or his companies.

8. [77]

   Moreover, no issue was taken with these directions at the trial, although there were several opportunities to do so. [6] Criminal Appeal Rules 1952 (NSW) r 4 is therefore engaged. Rule 4 is not a prophylactic where there has been a miscarriage of justice. However, its requirements are not mere technicalities: an accused who has been convicted on the basis of the issues agitated at trial is not entitled as of right to a new trial on issues which could and should have been, but were not, raised at that trial. As Bathurst CJ observed:

9. [78]

   These considerations have even more force where, as here, the directions in question were reduced to writing and there was ample opportunity to dispute their sufficiency at the trial. In circumstances where the inference that the transactions involved a use of the applicant’s position as a director was practically inescapable, and the focus of the defence was a denial of dishonesty (the force of which might be prejudiced by pursuit of a ‘false issue’ about ‘use of position’), it is little surprise that no such objection was taken at the trial: no-one considered that there was an issue about ‘use of position’. Leave under r 4 should be refused in respect of this ground, which would in any event fail.

Ground 1A – absence of direction as to claim of right

1. [79]

   Two days prior to the hearing of this appeal, the applicant sought leave to add an additional ground (1A), as follows:

2. [80]

   The Crown did not oppose the applicant being permitted to amend to raise that ground, but submitted that it should fail, on the merits and also because it too would require leave under r 4, not having been raised at the trial.

3. [81]

   At trial, the applicant’s defence was in the nature of a ‘claim of right’, in that he maintained that he was entitled to the money and shares in question, as remuneration for his fund-raising endeavours for the company. At times he even invoked the formula ‘claim of right’.

4. [82]

   The judge gave the following written directions relevant to the element of ‘dishonesty’ (emphasis added):

5. [83]

   In the course of summing-up, her Honour said:

6. [84]

   Numerous other passages, in the Crown opening, the Crown closing, and the summing-up, emphasised that the dishonesty relied on by the Crown was that the applicant knew that he was not entitled to the funds or shares.

7. [85]

   However, the trial judge did not give a specific direction that the applicant could only be convicted if the jury were satisfied beyond reasonable doubt that the applicant did not genuinely believe he had a claim of right. This was the gravamen of Ground 1A.

8. [86]

   The course adopted by the judge was consistent with the position stated by the High Court in MacLeod v The Queen (“MacLeod”), [8] that in the context of an offence of which dishonesty is an element, a direction about the ‘claim of right’ defence is unnecessary and inappropriate. In question in that case was s 173 of the Crimes Act 1900 (NSW), which provided:

9. [87]

   The offence was thus one of which, by reason of the word ‘fraudulently’, dishonesty was a specific component. Of the relevance of a defence of ‘claim of right’ in that context, it was said:

10. [88]

    The applicant submitted that this position no longer obtained, by reason of the amendment of the Criminal Code (Cth) (“the Code”) in 2001 by the insertion of s 2.2, with the consequence that, with effect from 15 December 2001, Chapter 2 of the Code, including s 9.1 (defence of mistake of fact) and s 9.5 (defence of claim of right), applies to all offences, including those under the Corporations Act, thus rendering the defences of ‘claim of right’ and ‘mistake of fact’ now applicable to an offence under Corporations Act s 184(2)(a).

11. [89]

    Mr Stratton SC, for the applicant, submitted that the Crown case was founded on various deceptions by the applicant – including in particular the retrospective mandate letter – as being the dishonesty charged; and that if the applicant had a bona fide claim of right in respect of the money (and shares) in question, the fact that he may have acted deceptively in obtaining them did not render him guilty. It was submitted that even if MacLeod and Peters v The Queen [10] were authority for the proposition that once the appropriate direction for the test of honesty was given, there was no room for directions as to a ‘claim of right’, that could not survive the extension of Chapter 2 of the Code to all Commonwealth offences.

12. [90]

    I accept that there may be in some cases a distinction between deception and dishonesty, and that in theory it may be possible to obtain, by deception, something to which one has a bona fide claim of right. [11] In such a case, the bona fide claim of right negates dishonesty. However, it is not correct that the dishonesty relied on by the Crown was “various deceptions by [the applicant]”; the dishonestly alleged was that the applicant knew that he was not entitled to the relevant shares and moneys. The charge and the case, so articulated, if accepted, was incompatible with a defence of ‘claim of right’. The jury were in effect directed that the Crown had to establish that the applicant knew that he was not entitled to cause the transfer of funds (or issue of shares). The jury’s verdict implicitly rejected the applicants’ justification for the funds transfers and share issue. If the jury were satisfied that he knew that he was not entitled to the relevant shares and moneys, as they must have been, there could be no bona fide claim of right. In the way in which the case was left to the jury, it was not necessary to superadd a direction about ‘claim of right’. In the way in which the case was conducted, there was no scope for the jury to be satisfied that the applicant, while in fact having no entitlement to cause the transfers of funds, nonetheless honestly believed that he had. A direction that even if satisfied that he knew he was not entitled to the money or the shares, the jury must still consider that he might have had an honest belief that he was, would have been illogical, nonsensical, and confusing.

13. [91]

    Moreover, dishonesty was a specific element of the offence. I do not accept that the position stated in MacLeod is altered by the extension of Chapter 2 of the Code to all Commonwealth offences. In the context of an offence of which dishonesty is a specific element, proof of dishonesty negates a bona fide claim of right. The relevance of a ‘claim of right’ is, as explained in MacLeod, potentially to raise a reasonable doubt with respect to the overall persuasive burden on the prosecution of proving that there had been dishonesty as alleged. An adequate direction as to dishonesty will suffice.

14. [92]

    This view is supported by authorities on the Criminal Code 1899 (Qld) s 22(2), which is similar in effect to s 9.5 of the Commonwealth Code, and provides:

15. [93]

    The Queensland Court of Appeal has held that there is no need to direct the jury as to s 22(2) in cases of offences of which dishonesty is a specific element. In R v Perrin, Morrison JA said:

16. [94]

    In R v Dale, it was said (citations omitted):

17. [95]

    These cases, in the context of statutory provisions closely analogous to those under consideration here, do not deny that the defence of ‘claim of right’ is technically available in a case in which dishonesty is a specific element. However, they illustrate that in such a case, logic will, at least ordinarily, dictate that there is no need to superimpose a “claim of right” direction on an adequate “dishonesty” direction, because a finding of dishonesty typically negates a bona fide claim of right. That was clearly so in this case, where the Crown case was put on the basis that the dishonesty alleged was that the applicant knew that he was not entitled to the money or shares that he caused to be transferred to him or third parties. There is a logical incompatibility between on the one hand accepting that he knew that he was not entitled to transfer the money or issue the shares, and on the other accepting that he had a bona fide claim of right to do so. The jury could not logically accept the Crown case as it was put and left to them, yet leave open the possibility of a genuine claim of right.

18. [96]

    Moreover, again, in circumstances where the directions in question were reduced to writing and there was ample opportunity to dispute their sufficiency at the trial, and where a ‘claim of right’ direction was effectively encapsulated in the directions as to dishonesty that were given, and where such a direction would have been illogical, nonsensical, and confusing, it is unsurprising that none was sought: the jury could not have failed to understand that they could convict only if satisfied beyond reasonable doubt that the applicant knew he was not entitled to the money and shares transferred, which was incompatible with a genuine claim of right. Leave under r 4 should be refused in respect of this ground, which would in any event fail.

Ground 4 and conclusion

1. [97]

   Ultimately, the applicant pressed ground (4) (applicant denied a chance of acquittal that was fairly open) only insofar as ground 1A was sustained. As no appellable error has been established, this ground requires no further consideration. The appeal against the conviction therefore fails.

The sentence

1. [98]

   As her Honour observed, the maximum penalty for each offence was five years’ imprisonment. [14] The sentence was constructed as follows: [15]

   1. (1)

      for Count 1, imprisonment of three years commencing on 22 November 2016;

   2. (2)

      for Count 2, imprisonment of three years commencing on 22 January 2017;

   3. (3)

      for Count 3, imprisonment of three years commencing on 22 March 2017;

   4. (4)

      for Count 4, imprisonment of three years commencing on 22 July 2017;

   5. (5)

      for Count 5, imprisonment of three years and six months commencing on 22 October 2017;

   6. (6)

      for Count 6, imprisonment of three years commencing on 22 December 2017;

   7. (7)

      for Count 7, imprisonment of three years and six months commencing on 22 February 2018;

   8. (8)

      for Count 8, imprisonment of one year commencing on 22 May 2018;

   9. (9)

      for Count 9, imprisonment of three years and six months commencing on 22 September 2018;

   10. (10)

       for Count 10, imprisonment of three years and six months commencing on 22 January 2019;

   11. (11)

       for Count 11, imprisonment of four years commencing on 22 May 2019;

   12. (12)

       for Count 12, imprisonment of two years commencing on 22 September 2019;

   13. (13)

       for Count 13, imprisonment of four years commencing on 22 January 2020;

   14. (14)

       for Count 14, imprisonment of four years commencing on 22 May 2020;

   15. (15)

       for Count 15, imprisonment of four years commencing on 22 September 2020;

   16. (16)

       for Count 16, imprisonment of three years and six months commencing on 22 January 2021;

   17. (17)

       for Count 17, imprisonment of three years and six months commencing on 22 May 2021;

   18. (18)

       for Count 18, imprisonment of three years and six months commencing on 22 September 2021;

   19. (19)

       for Count 19, imprisonment of three years and six months commencing on 22 January 2022;

   20. (20)

       for Count 20, imprisonment of four years commencing on 22 May 2022;

   21. (21)

       for Count 21, imprisonment of four years commencing on 22 September 2022;

   22. (22)

       for Count 22, imprisonment of three years and six months commencing on 22 January 2023;

   23. (23)

       for Count 23, imprisonment of three years and six months commencing on 22 May 2023; and

   24. (24)

       for Count 24, imprisonment of one year commencing on 22 September 2023.

2. [99]

   The overall effective sentence imposed amounted to a total term of 10 years commencing on 22 November 2016 and expiring on 21 November 2026, with a non-parole period of six years, expiring on 21 November 2022. [16]

3. [100]

   Addressing the factors relevant to sentencing, her Honour regarded the conduct constituting Counts 1, 2 and 3 as a single course of conduct, as was that which constituted Counts 4, 6 and 7. Her Honour found that save for these counts, each offence was “a discrete act with its own separate criminality”:

4. [101]

   Her Honour observed that the 24 counts differed in the timing of their commission (the conduct in Count 24 occurring about two years and four months after the conduct in Count 1), and that the quantum of the amounts taken was a further distinction between them (the amount or value being a relevant factor in assessing gravity of the offence). The underlying conduct nonetheless comprised criminal acts of the same or a similar character, in that each offence took place when he occupied a position of trust which gave him access to monies that had been raised from the public, when he owed TZL a duty to act in the interests of the company. “Like the gamekeeper who poaches, he helped himself to over $8.6 million of the company’s funds and shares [around $7.5 million for his own benefit and the balance of $1.1 million apparently for Falconer’s benefit], as and when it suited him, in gross dereliction of his duties to the company and its shareholders. His offending conduct is objectively very serious”. [18] It harmed not only TZL and its shareholders, but also the investing public, by undermining investor confidence in the ASX. [19]

5. [102]

   As to contrition and reparation, her Honour observed that the applicant had given a series of explanations to justify the payments, each of which was false and reflected his “wholly unjustified sense of entitlement. Throughout his evidence at the trial the offender displayed significant hubris which was entirely at odds with any remorse”. [20] His lack of remorse was repeated in the pre-sentence report, which stated:

6. [103]

   As to co-operation with the authorities, her Honour remarked that the applicant did not co-operate with ASIC during the investigation of the offences, but thwarted its endeavours to ascertain what had occurred, and his “indignant and intransigent attitude at least partly contributed to the length and cost of the investigation”. [21] Nonetheless his counsel conducted the trial in an efficient and co-operative manner, which substantially shortened the time and cost of the trial to the public, and this was taken into account in the applicant’s favour. [22]

7. [104]

   As to specific deterrence, her Honour note that a custodial sentence would prevent re-offending during the period of any incarceration, and that upon release the applicant would automatically be prohibited from acting as a director for a period of five years: s 206B of the Corporations Act, which may be extended by a court on ASIC’s application to a maximum period of 15 years: s 206BA of the Corporations Act, which may curtail his opportunity to re-offend in the future. [23]

8. [105]

   Her Honour gave considerable weight to general deterrence, observing that such offences are notoriously difficult to detect and prosecute. [24] Her Honour considered that a substantial sentence, including a significant period in custody, was necessary to ensure that the applicant was adequately punished for the offences. Her Honour rightly observed that the maximum penalty of five years was a relevant matter and indicates the term which would be appropriate for the most serious category of case. [25]

9. [106]

   In respect of subjective considerations, her Honour remarked that the applicant was born in 1965 and aged 51, enjoyed a privileged upbringing at least in material respects, and was well-educated (to a tertiary level), and well-connected. There was no evidence of any mental illness or disorder. He distinguished himself from uncontrolled punters in the thrall of gambling addictions, describing his own gambling as a professional activity which was a “churning business where a lot of bets covering a lot of outcomes allowing you to win a percentage on turnover over the years”. The pre-sentence report recorded his statement that his “involvement in bookmaking and horseracing was a mixture of business and recreation”. His diabetes is managed with insulin injections. Despite significant weight loss since going into custody on 22 November 2016, he remained overweight. [26]

10. [107]

    With a minor exception, he had no criminal record, and was entitled to be treated as of prior good character, but this matter was of limited weight in the circumstances for the reasons that first, had he not been of good character he would not have been placed in a position of substantial trust with access to such significant funds, and secondly, the offending conduct took place over a period of more than two years in circumstances which demonstrated considerable deception, ingenuity, opportunism and greed. [27]

11. [108]

    As to prospects of rehabilitation, her Honour said:

12. [109]

    Her Honour noted that the applicant is married and has three daughters, aged 18 to 26, and that though he had for some time lived separately from his wife, she and their daughters support him and continue to visit him regularly in custody. While accepting and taking into account that his custody has a significant, but not exceptional, effect on his family, and that his family would suffer from his being in gaol, this did not materially affect the sentence. [29]

13. [110]

    Her Honour rejected the applicant’s contention that delay was a mitigating factor, pointing out that the applicant had contributed to it, and that there was no evidence that he suffered any significant detriment as a consequence. [30]

14. [111]

    Her Honour accepted, and took into account, that by way of extra-curial punishment, the applicant had lost whatever good reputation he previously enjoyed, and would on his release, be disqualified from managing corporations for a period of five years, unless leave is granted by a court. [31]

Grounds of appeal

1. [112]

   The grounds of appeal were that:

   1. (1)

      the sentencing judge erred in applying the totality principle in two ways:

   2. (2)

      the sentence imposed on the applicant’s co-offender Falconer for the conduct giving rise to Counts 1-7 (Falconer Counts 1-3) gives rise to a justifiable sense of grievance; and

   3. (3)

      her Honour erred in finding that the applicant’s failure to acknowledge wrongdoing prevented a finding that he had any prospects of rehabilitation.

Ground 1 – Totality

1. [113]

   When turning to the “Factors relevant to sentencing”, and in particular “The nature and circumstances of the offences and whether they constitute a course of conduct adopted by the offender”, her Honour said (emphasis added):

2. [114]

   The applicant submitted that this passage reveals error, in that her Honour should not have had regard to the totality of the conduct in determining appropriate sentences for each offence, but rather should first have determined the appropriate sentence for each offence, and only then had regard to the totality of the applicant’s criminal behaviour to determine the total term. Such an approach is the conventional application of the ‘totality’ principle, as explained by the High Court in Mill v The Queen (“Mill”):

3. [115]

   In Pearce v The Queen (“Pearce”), McHugh, Hayne and Callinan JJ said (citing Mill):

4. [116]

   In Thorn v R, Howie J, with whom Campbell JA and Rothman J agreed, said:

5. [117]

   The rationale for this approach was illuminated in R v Tadrosse, in the context of Crimes (Sentencing Procedure) Act 1999 (NSW) s 21A(2)(m), as to whether it was open to a sentencing judge to take account of multiple offences, each of which was separately charged, in assessing the objective seriousness of each. Holding that it was not, Howie J (with whom Grove and Hall JJ agreed) said:

6. [118]

   In the passage in the remarks on sentence the subject of this complaint, her Honour referred to s 16A(2) of the Crimes Act 1914 (Cth) (“the 1914 Act”), [37] which relevantly requires the Court to take into account (a) the nature and circumstances of the offence, (b) any other offences that are required or permitted to be taken into account, and (c) if the offence forms part of a course of conduct of a series of criminal acts of the same or similar character, that course of conduct. While those provisions may, in an appropriate case, permit account to be taken of offences other than those charged, they do not displace the common law principle of ‘totality’ discussed in Mill. [38] In particular, sub-s (b) contemplates provisions that correspond with those which, in the State context, permit offences to be taken into account on a Form 1, as distinct from other offences which have been separately charged and for which the offender is to be separately sentenced.

7. [119]

   Section 16B, also referred to by her Honour, [39] was irrelevant: it requires a sentencing court to take into account any sentence already imposed on the person for any other offence which the person has not served, or is liable to serve because of the revocation of parole; at the time of sentencing, the applicant was not subject to any other sentence for the purposes of s 16B. Johnson v The Queen (“Johnson”), also referred to by her Honour, does not stand for the proposition that the multiplicity of offences is to be taken into account in determining the individual sentences for each as well as the total sentence; rather, it affirms the principle in Mill and Pearce that the question of totality arises only after the individual sentences are determined. Gummow, Callinan and Heydon JJ, with whom Gleeson CJ agreed, said (citations omitted):

8. [120]

   There is nothing in Johnson which suggests that the conventional approach authorised by Mill and Pearce does not to continue to apply to sentencing for a Commonwealth offence.

9. [121]

   Her Honour’s remarks on sentence do not explain the impact of ‘totality’ when determining the sentence for each individual offence, and in particular whether it operated to aggravate or mitigate the sentence which would otherwise be imposed for each offence; however, the reference to s 16A(2)(b) and (c) of the 1914 Act suggests that the impact would be aggravating. Yet the principle of totality is a mitigating principle, as described by King CJ in R v Rossi, [41] in a statement which was cited by McHugh J in Postiglione v The Queen:

10. [122]

    The view that her Honour treated ‘totality’ as aggravating the individual sentences is also supported by the following passage in the remarks:

11. [123]

    As to the second limb of this ground, it has already been noted that her Honour regarded the subject matter of Counts 1, 2 and 3 as a single course of conduct, and likewise the conduct the subject of Counts 4, 6 and 7, whereas each other offence was “a discrete act with its own separate criminality”. The sentence imposed for each of Counts 1, 2 and 3 was three years. That for Count 2 was accumulated, to the extent of two months, on that for Count 1; and that for Count 3 was accumulated by a further two months. The sentence imposed for each of Counts 4 and 6 was three years, and for Count 7 three years and six months. That for Count 6 was accumulated by two months on the sentence imposed for Count 5, and that for Count 7 by two months on that for Count 6.

12. [124]

    For the other 18 counts, the extent of accumulation was typically four, though in some cases three, months.

13. [125]

    The extent of concurrency or accumulation was a matter for the sentencing judge’s discretionary judgment, informed by the principle of totality, [44] and is reviewable only in accordance with the principle in House v The King. [45] While it is a highly relevant consideration whether the conduct involved two separate incursions into criminal activity, or one multi-faceted course of criminal conduct, [46] the circumstance that a number of offences arise out of the same course of criminal conduct does not dictate that concurrent sentences must be imposed. [47]

14. [126]

    The applicant acknowledged that a finding that offending conduct constitutes a single course of conduct does not mandate an outcome of wholly concurrent sentences, but submitted that the limited remarks without further explanation were suggestive that this consideration was overlooked by her Honour, thus amounting to error. However, the circumstance that, for those offences which were found to constitute a single course of conduct, there has been a significantly lesser degree of accumulation than for the other offences, tells against the submission that this was overlooked. Indeed, it indicates that her Honour has given careful consideration to the period of each sentence that should be exclusively referable to the offence for which it was imposed. Moreover, overall, there was a very substantial degree of concurrency: the total of the individual sentences was 78 years, but the effective sentence only 10 years. While there might have been no error in not accumulating those sentences at all, it was within her Honour’s discretion to partially accumulate them.

15. [127]

    Error is established in respect of this ground only insofar as her Honour took into account the ‘totality’ of the offending in fixing sentences for each individual offence.

Ground 2 – Parity

1. [128]

   Falconer was arrested in Thailand and extradited, after the applicant had been sentenced on 10 February 2017. He pleaded guilty to a number of charges, including charges which corresponded with the same conduct of which the applicant had been convicted.

2. [129]

   The first count to which Falconer pleaded guilty encapsulated the same conduct which was the subject of Counts 1, 2 and 3 against the applicant. The applicant had been sentenced to three years imprisonment on each of those counts, largely concurrent, to provide a total effective sentence of three years and four months. Falconer received a sentence of two years and three months, implying a starting point of three years before a 25% discount for his plea of guilty.

3. [130]

   The second count to which Falconer pleaded guilty encapsulated the same conduct which was the subject of Counts 4, 6 and 7 against the applicant. The applicant had been sentenced to three years imprisonment on each of Counts 4 and 6, and three years and six months on Count 7, partially accumulated to produce a total effective sentence of three years and 10 months. Falconer received a sentence of two years, implying a starting point of two years and eight months before a 25% discount for his plea of guilty.

4. [131]

   The third count to which Falconer pleaded guilty encapsulated the same conduct which was the subject of Count 5 against the applicant. The applicant had been sentenced to three years and six months imprisonment. Falconer received a sentence of one year and 10 months, implying a starting point of two years and three months before a 25% discount for his plea of guilty.

5. [132]

   The total effective sentence received by the applicant for Counts 1 to 7 was four years and nine months; while the total effective sentence received by Falconer was two years and six months – implying a starting point of three years and four months.

6. [133]

   The parity principle requires that any difference between sentences imposed on co-offenders for the same offence not be such as to give rise to a justifiable sense of grievance on the part of the offender with the heavier sentence, or to give an appearance that justice has not been done. [48] Equal justice requires that there should not be any marked disparity of sentence as between co-offenders such as to give rise to a justifiable sense of grievance. [49] As explained by Johnson J in R v Pan:

7. [134]

   It may be accepted that the application of the principle is not relevantly affected by reason that the applicant was charged with seven counts while Falconer was charged with only three, encapsulating the same conduct: formal identity of charges is not a necessary condition of its application. [51]

8. [135]

   Although it is preferable for co-offenders to be sentenced by the same judge at the same time, that is by no means an absolute requirement. In this case, they were sentenced by the same judge, albeit at different times. “Considerable obstacles” confront an applicant contending for error based on parity where the sentencing judge is fully aware of the sentences imposed upon co-offenders and the reasons for them, and provides reasons for the disparity. [52] This is such a case.

9. [136]

   In sentencing Falconer, her Honour made these observations concerning parity:

10. [137]

    At first, the applicant submitted that these findings were made in circumstances where the applicant was not present and not given the opportunity to call evidence, cross-examine Falconer’s witnesses or make submissions on the issue. This curious submission was abandoned during oral argument: the applicant had no standing to be heard in respect of Falconer’s sentencing proceedings.

11. [138]

    Otherwise, the applicant invoked the following matters:

    1. (1)

       that it was not clear that the applicant could properly be described as the ‘principal architect’ of the conduct the subject of Counts 1 to 7;

    2. (2)

       that Falconer’s share of the benefits was not “much smaller than [the applicant’s]”, at least in respect of Counts 1, 2 and 3;

    3. (3)

       that at the time of Counts 1 and 2, the applicant was not formally a director (his liability depending on the extended definition), whereas Falconer was;

    4. (4)

       that while the applicant transferred the funds the subject of Counts 6 and 7 to O’Donnell, Falconer directed the implementation of the transactions the subject of Counts 1, 2, 3, 4 and 5; and

    5. (5)

       that the applicant derived a benefit of $300,000 from Count 1; Falconer derived benefits of $1.2 million from Counts 2, 3 and 5; and the benefit to the applicant from Counts 4, 6 and 7 was nominal in the sense that it merely placated a third party by making the applicant his creditor.

12. [139]

    However, although Falconer may have benefitted more than the applicant from the transactions involved in Counts 1, 2 and 3, that is far from the exclusive comparator. The detriment to the company – preventing which is after all the chief object of the provision – is at least equally significant. There is a strong inference, from Falconer’s diary note, that (as her Honour found) the applicant was the principal architect of the transaction. As to Counts 4, 6 and 7, the effect of the payments was to discharge an obligation of the applicant to advance the loan to O’Donnell; there was no benefit to Falconer. The circumstance that Falconer may have performed the ministerial acts that implemented the transactions the subject of Counts 1, 2, 3, 4 and 5 does not elevate his responsibility above that of the applicant, who instigated and asked Falconer to implement them. That he was a director only by reason of the extended definition does not significantly affect his criminality. From the seven counts in question, the applicant received benefits amounting to approximately $1.7 million, while Falconer received some $800,000.

13. [140]

    There were also the subjective considerations noted by her Honour: Falconer had expressed contrition; he had been in custody in Thailand in onerous conditions for three months pending his extradition; he had a lifelong history of depressive symptoms meeting the diagnostic criteria for Persistent Depressive Disorder, which, combined with his personality traits, provided some explanation for his engaging in irresponsible behaviours; and he was 70 years of age and suffered from physical ailments which would make custody more onerous for him.

14. [141]

    Her Honour was entitled to conclude that there were differences between the applicant and Falconer, both as to their respective criminality, and in their subjective circumstances. The disparity in the sentences they received is amply explicable by those differences, and does not give rise to a justifiable sense of grievance on the part of the applicant. This ground fails.

Ground 3 – Rehabilitation

1. [142]

   Her Honour’s observations about the applicant’s prospects of rehabilitation, and in particular that for there to be prospects of rehabilitation, it is necessary for there to be some acknowledgement of wrongdoing, which was entirely absent in the present case, have been set out above.

2. [143]

   The prospects of rehabilitation are a mandatory consideration. [54] No doubt an acknowledgement of wrongdoing may be a significant element in rehabilitation. However, while the absence of true remorse may reduce the weight that can be given to prospects of rehabilitation, it does not necessarily nullify them. [55] Remorse is not a prerequisite to an assessment that an offender has some prospect of rehabilitation, and a plea of not guilty does not disentitle an offender from a finding that he or she has prospects of rehabilitation:

3. [144]

   In MLP v R, Bellew J (with whom Macfarlan JA and Adamson J agreed), said:

4. [145]

   The same view has been eloquently expressed, in the somewhat different context of professional regulation, by Tauro CJ of the Supreme Judicial Court of Massachusetts, in Re Hiss:

5. [146]

   With reference to that passage, Mason P said in Zaidi v Health Care Complaints Commission: [59]

6. [147]

   Her Honour’s statement, that “[i]n order for there to be prospects of rehabilitation, it is necessary for there to be some acknowledgement of wrongdoing, which is entirely absent in the present case”, was incorrect in principle. Although the respondent submitted that the conclusion that there could be no finding that there were prospects of rehabilitation was not in error in the circumstances of the case, given the findings about lack of remorse, hubris, sense of entitlement, and that he believed that the ends justified the means, there were contrary indicators: the applicant was of prior good character, having no relevant criminal record; he was well-educated, connected and intelligent; he is married with three daughters, and his wife and daughters continue to visit and support him in custody; and as her Honour accepted, he is unlikely to require assistance to reintegrate into the community notwithstanding a lengthy non-parole period. Those factors point to some prospect that he will one day be able to resume a worthwhile role as an honourable citizen.

7. [148]

   Error in this respect is established.

Conclusion

1. [149]

   I have concluded that the sentence was infected by two errors of principle, namely:

   1. (1)

      insofar as her Honour considered the ‘totality’ of the offending in fixing sentences for each individual offence; and

   2. (2)

      in failing to have regard to the applicant’s prospects of rehabilitation on the basis that there could be none without there being some acknowledgement of wrongdoing.

2. [150]

   It does not follow, however, that the appeal must succeed: the Court must consider that some other sentence is warranted in law. As Sully J said in R v Simpson:

3. [151]

   I have referred, above, to the obviously great weight which her Honour gave to considerations of totality, in imposing a total effective sentence of only 10 years in the context where, if accumulated, the sentences would have totalled 78 years. That has given considerable cause to pause before deciding to proceed to resentence the applicant. Nonetheless, it seems to me inescapable in logic that the two errors identified have resulted in the applicant receiving sentences which, albeit only to a slight extent, exceeded those which would otherwise have been imposed. In other words, had the totality of his conduct not been used to aggravate the offending for individual offences, and had he been regarded as having some if modest prospects of rehabilitation, a slightly lesser sentence would, and ought to have been, imposed in each case.

4. [152]

   But for those matters, her Honour’s statement of the relevant considerations, which has been summarised above, was not impugned, and I would adopt it. I would reduce, by between three and six months, each of the sentences imposed by her Honour which exceeded two years. However, I see no reason to depart from the approach to concurrency adopted by her Honour, and in particular the periods attributable exclusively by reference to each offence, which is reflected in the accumulation.

5. [153]

   On that basis, I would resentence the applicant, as follows:

   1. (1)

      for Count 1, imprisonment of two years and nine months commencing on 22 November 2016;

   2. (2)

      for Count 2, imprisonment of two years and nine months commencing on 22 January 2017;

   3. (3)

      for Count 3, imprisonment of two years and nine months commencing on 22 March 2017;

   4. (4)

      for Count 4, imprisonment of two years and nine months commencing on 22 July 2017;

   5. (5)

      for Count 5, imprisonment of three years commencing on 22 October 2017;

   6. (6)

      for Count 6, imprisonment of two years and nine months commencing on 22 December 2017;

   7. (7)

      for Count 7, imprisonment of three years commencing on 22 February 2018;

   8. (8)

      for Count 8, imprisonment of one year commencing on 22 May 2018;

   9. (9)

      for Count 9, imprisonment of three years commencing on 22 September 2018;

   10. (10)

       for Count 10, imprisonment of three years commencing on 22 January 2019;

   11. (11)

       for Count 11, imprisonment of three years and six months commencing on 22 May 2019;

   12. (12)

       for Count 12, imprisonment of two years commencing on 22 September 2019;

   13. (13)

       for Count 13, imprisonment of three years and six months commencing on 22 January 2020;

   14. (14)

       for Count 14, imprisonment of three years and six months commencing on 22 May 2020;

   15. (15)

       for Count 15, imprisonment of three years and six months commencing on 22 September 2020;

   16. (16)

       for Count 16, imprisonment of three years commencing on 22 January 2021;

   17. (17)

       for Count 17, imprisonment of three years commencing on 22 May 2021;

   18. (18)

       for Count 18, imprisonment of three years commencing on 22 September 2021;

   19. (19)

       for Count 19, imprisonment of three years commencing on 22 January 2022;

   20. (20)

       for Count 20, imprisonment of three years and six months commencing on 22 May 2022;

   21. (21)

       for Count 21, imprisonment of three years and six months commencing on 22 September 2022;

   22. (22)

       for Count 22, imprisonment of three years commencing on 22 January 2023;

   23. (23)

       for Count 23, imprisonment of three years commencing on 22 May 2023; and

   24. (24)

       for Count 24, imprisonment of one year commencing on 22 September 2023.

6. [154]

   This results in sentences which, if accumulated, total 69 years and nine months, as distinct from the 78 years imposed by her Honour. The overall effective sentence amounts to a total term of nine years and six months, commencing on 22 November 2016 and expiring on 21 May 2026, as distinct from the 10 years imposed by her Honour. Maintaining approximately the 60% proportionate non-parole period fixed by her Honour, the non-parole period would be five years and nine months, expiring on 21 August 2022.

7. [155]

   I propose the following orders:

   1. (1)

      extend time for instituting the appeal to the date upon which it was filed;

   2. (2)

      dismiss the appeal against the convictions on all counts;

   3. (3)

      grant leave to appeal against the sentences, and allow the appeal;

   4. (4)

      quash the sentences imposed by Adamson J and in lieu thereof the applicant is sentenced as follows:

8. [156]

   CAVANAGH J: I agree with the orders proposed by Brereton JA in respect of both the conviction and sentence appeals. I make the following further comments in respect of the sentence appeal.

9. [157]

   Whilst I generally agree with the reasons of Brereton JA, I interpret the sentencing judge’s remarks (in relation to the totality principle) at [77] of her Honour’s judgment somewhat differently.

10. [158]

    As Brereton JA identifies, Johnson v The Queen [61] does not support an approach that involves determining the total effective sentence prior to determining the individual sentence for each offence.

11. [159]

    Further, whilst s 16B of the Crimes Act 1914 (Cth) would seem to be irrelevant, there is nothing in ss 16A(2)(a), (b) or (c) which would tend to suggest that the proper approach is to have regard to the totality of the criminal conduct in fixing the appropriate sentence for each of the offences.

12. [160]

    Indeed, [77] of her Honour’s judgment is in similar terms to the final sentence of the description of the totality principle in DA Thomas, Principles of Sentencing (2nd ed, 1979, Heinemann) at 56–57, cited in Mill v The Queen, [62] which is as follows: “[The Court] must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences.” This description of the principle and its approval in Mill v The Queen were specifically noted by Gummow, Callinan and Heydon JJ in Johnson v The Queen at [18]. As Brereton JA has discussed, their Honours then went on to affirm the approach taken in Mill v The Queen.

13. [161]

    Rather than interpreting her Honour’s reference to s 16A of the Crimes Act and Johnson v The Queen as supporting the incorrect approach, I consider that her Honour’s reference to Johnson v The Queen demonstrates an intention to state and apply the principle correctly. Indeed, if not for the use of the plural (“sentences” rather than “sentence”) as highlighted in Brereton JA’s judgment, there could be no complaint. The use of the plural may be misplaced but it must be considered in the context of the paragraph as a whole.

14. [162]

    I would thus interpret her Honour’s reference to Johnson v The Queen as an acknowledgment of the correct approach rather than an indication that her Honour was adopting a contrary approach.

15. [163]

    Having said that, I agree with Brereton JA’s observations in respect of the prospects of rehabilitation and there must be resentencing. I thus agree with the orders proposed by Brereton JA.