SUPREME COURT OF QUEENSLAND

[1]  McMURDO P:  The appellant, Glen Jackson Connelly, was charged with 12 counts of fraud with the circumstance of aggravation that the property involved was valued at more than $5,000 under s 408C Criminal Code by dishonestly applying sums of money to his own use.  He was charged jointly with Christopher James Poulson in respect of eight counts (counts 2, 3, 5, 6, 7, 9, 11 and 12).  The offences were alleged to have been committed at the Gold Coast on varying dates between November 1998 and April 1999.  Both pleaded not guilty and the trial was heard over 18 court days in the District Court at Southport in October 2004.  Poulson was acquitted on all counts.  Connelly was convicted on counts 1, 5 and 12 but acquitted on all other counts.  He was sentenced to four years imprisonment on count 5 and to lesser concurrent terms of imprisonment on counts 1 and 12.  He appeals only against his conviction, contending that the guilty verdicts were unreasonable or unsupportable on the evidence;  the summing up by the trial judge was unbalanced;  the trial judge erred in refusing to discharge the jury after the summing up;  and the trial judge erred in admitting evidence said to demonstrate a consciousness of guilt.

Were the guilty verdicts unsafe?

[2] Mr T Martin SC, who appears with Mr Chowdhury for Connelly in this appeal, contends that the guilty verdicts on counts 1, 5 and 12 were unsafe, primarily because of the verdicts of acquittal on the remaining counts.

[3] The prosecution case was that Connelly, with the assistance of Poulson in respect of counts 2, 3, 5, 6, 7, 9, 11 and 12, secured funds from each of the complainants knowing that the money would not be used for the represented purpose and then used the money contrary to that purpose.  In essence the prosecution alleged there were two fraudulent investment schemes.  The first concerned stamp duty loan investments ("the stamp duty loan scheme") and related to counts 1, 4, 5 and 12.  The second concerned the refurbishment of levels 5 and 6 of a building at 321 Pitt Street, Sydney ("the Pitt Street scheme") and related to counts 2, 3, 6, 8, 9, 10 and 11.  Counts 3, 6, 9 and 11 concerned "rollover" agreements to invest in the Pitt Street scheme.  Count 7 related to neither scheme but concerned $150,000 obtained from the complainant, Ms Beatty, by way of a bridging loan agreement over a million dollar property at Clear Island Waters.  Mr Martin does not suggest that the verdict of acquittal on count 7 in any way affects the adequacy of the guilty verdicts.  He emphasizes that the convictions on count 1, 5 and 12 cannot be reconciled with the acquittal on the only other count concerning stamp duties, count 4, and that the evidence on count 5 was particularly weak.  Mr Martin also places weight on the acquittal on count 2 which, he contends, is inconsistent with the convictions on counts 5 and 12.

[4] A conviction will only be set aside on this basis where there is no rational explanation for the inconsistency in the verdicts of a jury and the inconsistency is such that an appellate court considers intervention is necessarily required to prevent a possible injustice:  MacKenzie v The Queen.[1]  In considering this ground of appeal it is necessary to briefly review the evidence on the relevant counts.

(a)The counts resulting in conviction

(i)Count 1

[5] The complainant Ms Zoli gave evidence that in November 1998 Poulson telephoned and told her that she could invest in "stamp duties" and receive a return of 7.5 per cent interest.  Ms Zoli gave Poulson a bank cheque for $6,000 dated 19 November 1998 payable to Kentwind Pty Ltd ("Kentwind") whose directors were at the relevant time Mr Connelly and his wife Melena Connelly.  Ms Zoli understood the money was to be invested for stamp duties.  Poulson gave her a hand-written letter dated 20 November 1998 which stated that "the sum of $6,000 is also to be used for payment of stamp duties and is to remain in the Trust account until further notice which is I.C. Financial Services Pty Ltd Trust account".  Ms Zoli's $6,000 cheque was deposited on 23 November 1998 to Kentwind's account which was controlled by Connelly.  The funds were expended, not on stamp duties, but on items such as cash withdrawals and payments to Telstra and a company, Healthinvest Pty Ltd, of which Poulson and Connelly were directors.

[6] Initially this count also involved a $20,000 cash investment made by Ms Zoli which was repaid on 25 November 1998 but the prosecution abandoned its case in that respect during the trial.

(ii)Count 5

[7] In November 1998 Poulson contacted the complainant, Ms Beatty, and told her that stamp duty loan investments provided a good rate of interest in the short term.  She wished to invest $210,000 from the sale of her late husband's boat.  She provided a cheque dated 18 January 1999 for $210,000 payable to Kentwind's solicitors, Reynolds & Associates Lawyers, and handed it to Poulson to be invested for stamp duty loans.  The document dated 18 January 1999 that she signed authorizing the investment stated that Kentwind was a stamping agent which advanced monies to buyers and sellers who needed contracts stamped from a fund created for that purpose.  The cheque was deposited on 18 January 1999 into the trust account of Kentwind's solicitors but the proceeds were not spent on stamp duty loans but were used to repay Securewest Pty Ltd, a company controlled by Mr Allen Elvidge, who had previously invested with Connelly and was expecting repayment.

(iii)Count 12

[8] The complainant, Mr Taylor, gave evidence that Poulson said that he needed bridging finance for stamp duty loans for short periods and that Mr Taylor could invest money for that purpose.  Mr Taylor invested $40,000 after signing a document, in similar terms to that signed by Ms Beatty in count 5.  The document stated that the money was to be invested in a "fund from which stamp duties are advanced".  The fax copy of the document tendered at trial was dated 18 January.  Mr Taylor transferred the money to the trust account of Kentwind's solicitors on 18 January 1999.  As in count 5, the money was not used for stamp duty loans but to repay Mr Elvidge.

(b)The counts not resulting in conviction

(i)Count 4

[9] The only other count directly relating to the stamp duty loan scheme was count 4 on which the jury acquitted.  The complainant, Ms Beatty, gave evidence that on about 20 November 1998 she gave Poulson a bank cheque dated 19 November 1998 for $10,000 payable to Kentwind to be used solely for stamp duties.  Poulson told her that she could expect a 7.5 per cent return.  The cheque was deposited in Kentwind's account, which was controlled by Connelly, on 23 November 1998.  The proceeds were not invested in stamp duties but were expended on cash withdrawals, Telstra payments and payments to Healthinvest Pty Ltd.  Ms Beatty said that she signed a document which recorded that the money was to be used solely for stamp duties but she did not know the whereabouts of that document and it was not tendered at trial.  In cross‑examination she denied the suggestion that there was no such formal signed agreement about this $10,000 investment.  She received interest of $2,135 in late December 1998.

(ii)Count 2

[10]  The jury acquitted on count 2.  The prosecution case was that Connelly and Poulson dishonestly received $20,000 from the complainant, Ms Zoli (also the complainant in count 1) by telling her it was to be used in the Pitt Street scheme and that they then used her funds for other purposes.  Ms Zoli made out a cheque dated 15 January 1999 for $20,000 payable to Kentwind which was deposited into the bank account of Reynolds & Associates Lawyers on 18 January 1999.  She signed a deed on 29 January 1999 which stated that she would invest $20,000 in the Pitt Street scheme.  She gave evidence that she obtained the bank cheque made out to Kentwind on 15 January 1999 on the understanding it was to be used for the Pitt Street scheme.  She agreed that the $20,000 was to be used for the purpose stated in the deed of 29 January 1999, that is, the Pitt Street scheme.  The money was in fact used at the direction of Connelly to repay Elvidge through his company, Securewest Pty Ltd.  In late 1998 she invested in the stamp duty loan scheme and discussed with Poulson an investment in a sports clothing scheme.

(iii)The remaining counts

[11]  As to the remaining counts, like count 2, they each concerned the Pitt Street scheme (with the exception of count 7).[2]  The prosecution case was that on each count the complainant invested funds for the Pitt Street scheme at various dates in late January and early February 1999 and that Connelly dishonestly used the funds for other purposes.  On 27 October 1998 a contract was signed for the sale of the Pitt Street building to an entity connected to Connelly.  That contract did not lapse until 30 March 1999.  Connelly was attempting to arrange finance to purchase the building during this period.

A rational explanation?

[12]  It is significant that the jury did not convict Connelly on any count relating to the Pitt Street scheme.  The jury's verdicts of acquittal on these counts suggest that they considered Connelly may not have been acting dishonestly in respect of the counts relating to investments in the Pitt Street scheme, at least when he induced the complainants to invest in it.  On the prosecution case the investments in this scheme were made between 29 January and 4 February 1999.  The jury may not have been satisfied on the evidence that, at least at that time, Connelly was acting dishonestly because the refurbishment and later sale of office space in the Pitt Street building may then have been viable.  That evidence may not have provided a full answer to a charge under s 408C Criminal Code if Connelly later used the funds contrary to the stated investment purpose but it was for the jury to determine whether the prosecution established Connelly's dishonesty beyond reasonable doubt.  In any event, the prosecution case was that at the time Connelly obtained the funds he intended to dishonestly use the funds for other purposes.  This Court should be cautious before setting aside verdicts of guilty supported by the evidence simply because they may be difficult to reconcile with verdicts of acquittal on other charges if the verdicts of acquittal may have arisen from the jurors' innate sense of fairness and justice:  MacKenzie.[3]

[13]  As to count 2, on which Mr Martin places particular emphasis, unlike in counts 1, 5 and 12 on which the jury convicted, the written document stating the purpose of the investment post-dated the investment itself.  This raises a doubt as to whether Ms Zoli was solely committed to investing in the Pitt Street scheme when she gave funds to Kentwind on 15 January 1999.  She had previously invested in the stamp duty loan scheme and discussed a sports clothing investment.  The evidence was consistent with Ms Zoli not being too concerned as to where her $20,000 was invested as long as her interest return was satisfactory.  The prosecution case that Connolly dishonestly used the funds for purposes other than the stated purpose was much weaker on count 2 than on counts 1, 5 and 12.

[14]  In respect of the counts concerning the stamp duty loan scheme the jury convicted on counts 1, 5 and 12 but acquitted on count 4.  Unlike the prosecution case on counts 1, 5 and 12, the case on count 4 did not include any tendered document to support Ms Beatty's complaint that the money she gave Kentwind was to be used specifically for the stamp duty loan scheme.  This is a rational explanation as to why the jury were satisfied beyond reasonable doubt in respect of counts 1, 5 and 12 that the complainants gave specific and limited directions for the investment of funds which were dishonestly ignored by Connelly but they were not so satisfied, without supporting documentation, that Ms Beatty gave such specific directions as to the investment in count 4.

[15]  For these reasons there is a rational explanation for the verdicts of guilty on counts 1, 5 and 12 and the verdicts of acquittal on the remaining counts.  The evidence as a whole supported the jury's verdict of guilty in respect of counts 1, 5 and 12.  It follows that this ground of appeal fails.

Was the judge's summing up balanced?

[16]  The next two grounds of appeal can conveniently be dealt with together.  The appellant contends that the learned primary judge's summing up was unbalanced in that it failed to adequately summarize for the jury Connelly's case and as a result the judge should have discharged the jury on the application of Connelly's counsel at trial.

[17]  The learned primary judge commenced his summing up to the jury at 12.06 pm on the 15th court day of the trial and completed it at 4.37 pm that day.  It was then that counsel for Connelly at trial in an application for redirections submitted that the summing up was unbalanced and that the judge had not fairly put the defence case.  He also asked the judge to discharge the jury with respect to Connelly because of the unfair summing up.  The next morning the jury returned to the court room at 10.38 am when the judge gave many of the redirections sought by Connelly's barrister and Poulson's barrister, expanding on the defence case.  The jury again retired at 10.51 am, returning with their verdicts at 2.30 pm.

[18]  The transcription of the learned primary judge's final summary of Connelly's case in his charge to the jury covered about six pages of the transcript.[4]  His Honour's summary of the prosecution case was recorded in about 20 pages of transcript.[5]  The summation of Poulson's case was recorded in about eight pages of transcript.[6]  The redirections which largely dealt with issues of concern raised by both defence counsel were recorded in a further eight pages of transcript.[7]

[19]  The judge made clear to the jury that the central issue was whether the prosecution had demonstrated that Connelly was acting dishonestly in each count.  Early in the summing up his Honour stated that:

"It is a defence submission that in deciding whether the accused, Connelly, was acting dishonestly you should take into account evidence from which you can infer that at the time the relevant applying and inducing took place there was present in the mind of the accused, Connelly, an intention that the complainants would ultimately be repaid their investments plus interest.  That is certainly a matter you should take into account when deciding whether you are satisfied that the accused, Connelly, was acting dishonestly. It is a matter for you but you may find that he was acting dishonestly even though you thought that he intended to pay back the investment plus interest subsequently.

When you are considering this question you should keep in mind that an accused person is not obliged to prove anything.  The Crown must prove that Connelly was acting dishonestly to your satisfaction beyond a reasonable doubt.".

[20]  That direction fairly stated Connelly's case relating it to s 408C(3)(b) Criminal Code which provides:

"a person's act or omission in relation to property may be dishonest even though -

…

(ii)he or she intends to afterwards restore the property or to make restitution for the property or to afterwards fulfil his or her obligations or to make good any detriment; … ".

[21]  It is not surprising that his Honour spent considerable time explaining the lengthy prosecution case, which involved a consideration of the evidence of about 24 witnesses given over 12 hearing days and 149 documentary exhibits.  Poulson did not give or call evidence.  Connelly did not give evidence.  He called only two witnesses: Keith William Davies, whose brief evidence was interposed during the prosecution case to meet his convenience, and Norman Stanley Hayde, whose evidence was even shorter.  Connelly also tendered one exhibit containing five documents.  His Honour fairly summarized for the jury the effect of the evidence of Connelly's witnesses.

[22]  At the conclusion of his summing up, his Honour again made very clear to the jury that Connelly's case was essentially that the prosecution had not established that he was acting dishonestly in respect of any investments in any counts.  His Honour fairly summarized both defence counsels' submissions on each count and referred to what defence counsel contended were weaknesses in the prosecution case on particular counts or groups of counts.  This Court has not been referred to any particulars of what is said to amount to unfairness in his Honour's summing up.

[23]  The primary judge fairly and adequately put the defence case to the jury by identifying the central issue and relating that to the law and facts of the case, his Honour also outlined the main arguments of counsel.[8]  It is difficult to see what more his Honour could reasonably be expected to have done.  It follows that his Honour did not err in not discharging the jury at the extraordinary request of Connelly's counsel at trial.

Was the evidence of consciousness of guilt wrongly admitted?

[24]  In considering the appellant's contention that exhibits 137 and 138 were inadmissible it is necessary to refer to some further evidence.

[25]  As I have noted, the witness in Connolly's case, Keith William Davies, was interposed for his convenience during the prosecution case on day seven of the trial.  Mr Davies gave evidence that he joined the Contrabart Trade Exchange in 1997.  His job involved sourcing properties from developers and allowing traders to convert their trade dollars into property, normally by receiving 70 per cent cash and 30 per cent trade credits.  The Contrabart Exchange used Allan Wood of Twin Towns Conveyancing at Tweed Heads for conveyancing services.  Allan Wood also provided finance for the payment of stamp duty.  In early 1998 Davies told Connelly about Allan Wood and gave him his phone number.  Davies said that in mid-1998 Connelly told him that he had deposited a lot of money with Allan Wood for stamp duty.

[26]  On day nine of the trial the prosecution recalled Annette Maree Lee, Poulson's office administrator in November 1998.  She was also associated with Healthinvest Pty Ltd of which Connelly was a director.  Connelly and Poulson shared an office at Nerang and Ms Lee did office work for Connelly as well as Poulson at this time.  She remembered typing a letter, inferentially at Connolly's direction, to Mr Gary Davis dated 11 March 1999, signed by Connelly, and headed "Peter Riely Property Settlement".  The letter referred to a payment by Poulson of stamp duties of approximately $335,000.  This became exhibit 137.  Ms Lee also identified a fax from David & Associates, Solicitors and Attorneys Gold Coast to Connelly dated 1 March 1999 which she was given, probably by Connelly, when she typed the letter to Mr Davis.  The fax purports to be from Gary Davis.  It referred to problems for the purchaser Peter Riely with his lender Metway Bank in the purchase of a property.  This became exhibit 138.  The exhibits were tendered, over the objection of defence counsel, the learned primary judge finding them relevant and admissible.

[27]  Mr Gary Alan Davis, a retired solicitor, then gave evidence that exhibit 138 was not a document he prepared.  He did not know Connelly and had never acted for a Peter Riely.  His firm was called Davis & Associates not David & Associates, although it was misprinted as David & Associates in the telephone directory.  His firm was never involved in organizing stamp duty finance for purchasers.

[28]  The prosecution then called Allan Grant Wood who gave evidence on day 11 and again on day 12 of the trial.  He had previously been the principal of Twin Towns Conveyancing which ceased operating in August 1998.  Twin Towns Conveyancing at times advanced money to pay stamp duty on properties.  He recalled advancing Connelly money for stamp duty at various times for the purchase of properties but he did not recall ever receiving funds from Connelly, whether for Connelly personally or on behalf of other clients, for advancing on stamp duty.  In cross‑examination he agreed that he surrendered his licence to act as a conveyancer in August 1998 and an application to renew his licence in either 2001 or 2002 was unsuccessful.  He denied that Connelly had invested large sums of money for stamp duty loans with him.  He also denied telling Norman Hayde that Connelly had invested money with him for stamp duty loans.

[29]  Mr Hayde gave evidence for Connelly that he had previously had business dealings with Allan Wood of Twin Towns Conveyancing and invested money with him by way of second mortgages, debentures and stamp duty.  On one occasion in late 1997 or 1998 he and Connelly met with Wood to discuss such loans.  Wood said that Connelly was giving him money to invest in "stamp duty and second mortgages, short-term lending, that type of thing".

[30]  The appellant contends that exhibits 137 and 138 did not relate to any specific count on the indictment; that he was disadvantaged by the introduction of this new material by the prosecution for the first time on the ninth day of the trial; and that the jury could not be satisfied that he had created exhibit 138.

[31]  The prosecution case in respect of counts 1, 4, 5 and 12 was that the complainants had invested money with Connelly for stamp duty loans but that Connelly had dishonestly used the money for other purposes.  Davies' evidence, given during the prosecution case, was that Connelly told him that Connelly was investing large amounts of money with Wood for stamp duty loans.  If Connelly may have put monies into a fund specifically to be expended on stamp duty loans, on the prosecution case he may not have been guilty of the offences charged because he may not have been acting dishonestly.  The prosecution contended that Connelly fabricated exhibits 137 and 138 to falsely suggest that he was at the relevant time investing money in stamp duty loans because he knew he was guilty of the conduct charged and to avoid conviction.  The exhibits, although not direct evidence on any count, were admissible pieces of circumstantial evidence relevant to the element of dishonesty in respect of the counts relating to the stamp duty investments.  The jury was entitled to reasonably infer that Connolly was responsible for creating both exhibits and that he did so to create a false paper trail to suggest that he was intending to invest complainant's funds in stamp duty loans and that he did not act dishonestly in using the funds.  There is no complaint as to the careful directions given by the primary judge as to the use to be made of these exhibits.  This ground of appeal also fails.

[32]  The appeal against conviction should be dismissed.

[33]  JERRARD JA:  In this appeal I have read the President’s reasons for judgment, and I respectfully agree with Her Honour’s reasons and with the order she proposes.   I particularly agree that in respect of count 4, the significant difference between that count and counts 1, 5, and 12, was the absence of any written document executed by the complainant in count 4, and restricting by written direction the purposes for which that complainant’s money could be used.  I also agree that on the “Pitt Street” counts it was open to the jury to give Mr Connolly the benefit of a doubt as to an honest belief that money obtained from the various complainants for a “Pitt Street” investment would be applied for that purpose.

[34]  I also agree that exhibits 137 and 138 were admissible.  If those documents were genuine they would have established by necessary inference that there had been at least one investment in the relevant period by the two accused of a substantial sum of money in the pre-payment of stamp duty, or the payment of stamp duty, on behalf of others;[9] in a transaction or transactions in which it appeared the accused were neither the vendors or purchasers or in any way primarily responsible for the payment of stamp duty.  Proof that they had made at least one such investment of money in payment of stamp duty for other people could have been relied on by Mr Connolly for an argument that the complaints’ monies (in counts 1, 5, and 12) had not been dishonestly applied by him.

[35]  The Crown case was that this was exactly why those two documents, which the Crown alleged were forgeries, had been brought into existence.  The prosecution evidence could certainly persuade the jurors that the letter purporting to have been sent by Mr Gary Davis, the retired solicitor, was a forgery and that it described a transaction which had not taken place.  The jury were also entitled to conclude that Mr Connolly had dictated the reply to it, an apparently responsive one, to create a false paper trail suggesting the existence of at least one legitimate investment in pre‑paying stamp duties.  The prosecution proposition was that Mr Connolly could not produce or point to any evidence of any transactions in which any stamp duty had actually been paid as an investment, and for that reason he had created two false documents in an endeavour to head off charges.  The documents were relevant to the proof of dishonest application of the money received from the various complainants, purportedly for investment in “stamp duties”.

[36]  FRYBERG J:  I agree with the reasons for judgment of the President and with the order which she proposes.