FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (No 3) [2013] FCA 984

THE COURT ORDERS THAT:

1.    The proceeding is adjourned to 10.15 am on Thursday 24 October 2013 for the hearing of submissions as to the form of orders to give effect to the reasons for judgement published today and in respect of penalties and costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 2 September 2005, Lander J made the following orders in these proceedings in respect of the fourth respondent, Mr Peter Clarence Foster - Australian Competition and Consumer Commission v Chaste Corporation [2005] FCA 1212:

I declare that:

23.    The fourth respondent, having controlled and directed the operations of the first respondent (Chaste), being a corporation engaged in the supply or possible supply in trade or commerce, through distributors (area managers) of a purported weight loss aid named TRIMit, by making on behalf of Chaste, or causing or permitting to be made on behalf of Chaste:

23.1    a representation in documents provided to area managers and potential area managers that Chaste would promote TRIMit by extensive national television, radio and magazine campaign with a forecast expenditure of over $1.5 million in the first year of sales and would further provide a national team of marketing, management and advertising experts to assist area managers when in fact and to his knowledge Chaste had no such plans or arrangements in place, had no apparent means of executing them, had not engaged the represented marketing, management and advertising experts, and to the fourth respondent’s knowledge had no financial means to fund the represented expenditure;

23.2    representations to area managers that delays in commencement of the said campaign were due to the actions of persons other than Chaste and its officers when in fact and to his knowledge that campaign had not proceeded because it had not been arranged or agreed to by Chaste and Chaste at his direction continually refused to pay deposits or other payments required for aspects of the campaign to proceed;

23.3    a representation to area managers and potential area managers that if they wished to discontinue their distribution arrangement with Chaste, Chaste would, upon ninety days notice, repurchase all unsold stock and point of sale material supplied to the area manager and arrange a new area manager for the distribution area when in fact and to his knowledge during the period when Chaste was making the representation, Chaste and the fourth respondent had no intention of making good the representation but wrote correspondence to area managers who sought to terminate their agreements, requiring them to continue to perform their obligations under the agreements, or refusing to refund their deposits in full, until such time as their agreements were re-sold;

23.4    representations that:

23.4.1    TRIMit was a thoroughly researched and scientifically tested product;

23.4.2    TRIMit’s efficacy as a weight loss product was without question;

23.4.3    TRIMit (or an equivalent product) had been successfully launched in the United States and had been scientifically tested at eleven universities;

when in fact and to the knowledge of the fourth respondent TRIMit was a new and unique formulation and none of those matters were true;

23.5    representations that:

23.5.1    clinical studies had shown the combination of ingredients in TRIMit were 700% more effective than hydroxycitric acid alone;

23.5.2    Chaste had the results of independent research into, scientific testing of, or independent clinical trials of TRIMit (or an equivalent product) which proved it was a quality product, safe to use and effective as a weight loss aid;

when in fact and to the knowledge of the fourth respondent, Chaste did not have such results, and such clinical trials as were conducted for Chaste were conducted without scientifically accepted protocols or design, without scientifically controlled conditions, and largely involved subjects who had an interest in the business of Chaste;

23.6    representations that claims made by Chaste as to TRIMit’s potency, use and effectiveness had a scientific basis and Therapeutic Goods Act approval, when in fact and to the knowledge of the fourth respondent, the claims did not have a scientific basis, and such approval as was obtained under the Therapeutic Goods Act did not provide verification of the product’s efficacy;

23.7    a representation to area managers and the public that Chaste was a genuine business conducted on an ordinary commercial basis and that the opportunity offered by it to area managers was a genuine business opportunity when:

23.7.1    it was the fact that the fourth respondent had extensive involvement in the management and marketing of Chaste which involvement was, at the direction of the fourth respondent, deliberately concealed from the public and area managers;

23.7.2    it was the fact that the fourth respondent had convictions in relation to the unlawful sale and promotion of weight loss products, and a reputation as the instigator of dubious and failed schemes for profit for the conduct of businesses promoting and selling or purporting to sell purported slimming or weight loss products, and that Chaste and the fourth respondent were deliberately concealing the involvement of the fourth respondent in Chaste because the public and potential area managers of Chaste would be unlikely to buy its weight loss products or become its distributors if they knew of the involvement of the fourth respondent in Chaste;

23.7.3    it was the fact and he knew, but did not inform area managers or the public that it was his intention and the intention of the second respondent as the controllers of Chaste that gross income from sale of distributorships and goods by Chaste would be distributed to, or at the direction of the second and fourth respondents, and Chaste would not retain adequate funds to make good on the representations of future expenditure by Chaste;

23.7.4    it was the fact and he knew, but did not inform area managers or the public that gross income from sale of distributorships and goods by Chaste had been distributed to, or at the direction of the second and fourth respondents, and Chaste did not retain adequate funds to make good on representations of future expenditure by Chaste;

23.7.5    it was the fact, and the fourth respondent knew, that Chaste was operated by him and others for the purpose of:

23.7.5.1    extracting the maximum revenue from area managers and purchase TRIMit only so that Chaste would receive money from those persons;

23.7.5.2    inducing persons to become area managers and purchase TRIMit so that Chaste would receive money from those persons;

23.7.5.3    distributing the fourth respondent and others the maximum possible gross income of Chaste necessary for Chaste to maintain the appearance in the short term of conducting a genuine business;

23.8    representations to potential area managers that Chaste was a good business opportunity, while deliberately not revealing the involvement of the fourth respondent to area managers and potential area managers, and thereby misrepresenting the risks associated with Chaste’s business opportunity’ has, in respect of each representation, been directly knowingly concerned in a corporation engaging in conduct that was misleading and deceptive in contravention of section 52 of the Trade Practices Act 1974 (Cth).

24.    The fourth respondent by, between December 1999 and November 2001, knowingly permitting, assisting and authorising a corporation in trade or commerce to enter into agreements for the supply of goods, namely weight loss tablets, together with point of sale material and other related products, under an agreement, one of the terms of which was that area managers to whom the goods were supplied would not sell the said goods at a price less than the price specified from time to time by Chaste, which term was drafted by the fourth respondent, has been directly knowingly concerned in Chaste engaging in the practice of resale price maintenance in contravention of s 48 of the Act.

25.    The fourth respondent by, between December 1999 and November 2001, knowingly permitting, assisting and authorising a corporation to use in trade or commerce in relation to goods supplied by that corporation to area managers for resale, the statements:

(a)    ‘… the company will be solely responsible for fixing, from time to time, the recommended retail price and the price at which the area manager purchases stock’;

(b)    ‘… it is most important that a regulated price policy be adhered to in the interest of all parties involved.’

(c)    ‘… we have therefore established the following as the costing structure to be applied in all markets

PROFIT STRUCTURE TRIMitTM
Area Manager Cost	$19.50
Profit	$10.00	51%
Retailer Cost	$29.50
Retailer Profit	$20.45	70%
Recommended Retail	$49.95

(d)    ‘15. Who determines the price at which I sell my stock?

The company will set the recommended retail price and wholesale price that must be adhered to by all area managers. There must be no discounting or price cutting without the written permission of the company. This ensures everyone is protected from unnecessary price wars.’

(e)    ‘Cost to You…

being statements of prices that were likely to be understood by area managers as the prices below which the goods were not to be sold, has been directly knowingly concerned in Chaste engaging in the practice of resale price maintenance in contravention of s 48 of the Trade Practices Act 1974 (Cth).

Orders that:

26.    The fourth respondent pay to the Commonwealth of Australia, within 45 days of the date of this order, a penalty of $150,000 in respect of his being knowingly concerned in the conduct of a corporation engaging in the practice of resale price maintenance in contravention of section 48 of the Trade Practices Act 1974 (Cth), as alleged in paragraphs 106 and 113(c) of the statement of claim.

27.    The fourth respondent be restrained, for five years from the date of this order, from being directly or indirectly knowingly concerned in the promotion or conduct by a corporation of any business relating to weight loss, cosmetic or health industry products or services of any kind.

28.    The fourth respondent be restrained, for five years from the date of this order from being directly or indirectly knowingly concerned in or party to, or aiding, abetting, counselling or procuring, a corporation, which supplies to another person products said to have health, weight loss or cosmetic benefits:

28.1    inducing or attempting to induce that other person not to sell those products at a price less than the price specified by that corporation; or

28.2    using in relation to those products a statement of price likely to be understood by that other person as a price below which the products are not to be sold.

29.    The fourth respondent be restrained for a period of five years from the date of this order from in any manner being knowingly concerned in any corporation in trade or commerce, making, or permitting to be made, any representation as to the nature, quality, fitness for any purpose, testing, history, composition, standard, approval by any person, performance characteristics, uses or benefits of any good or service unless, prior to making the representation:

29.1    he believes the representation to be true and accurate;

29.2    the corporation informs the representee in writing of all information of which he is aware that refutes, qualifies or contradicts any part of the representation; and

29.3    the corporation provides the representee with a copy of these orders or informs the representee of the existence of these orders and gives the representee the address of the Federal Court website, namely www.fedcourt.gov.au, from which a copy of these orders can be obtained.

30.    The fourth respondent be restrained for five years from the date of this order from being knowingly concerned in any corporation in trade or commerce making any representation as to the future payment by it of any sum to any person or the future by giving by it of any benefit to any person unless:

30.1    he has made all necessary enquiries to satisfy himself that the corporation intends to make the payment or give the benefit and has reasonable grounds to believe it can make the payment or give the benefit; and

30.2    he has fully recorded in writing the details of all matters he has relied upon in so satisfying himself (including the source of the information and the time it was obtained) and has retained copies of all documents relied upon.

31.    The fourth respondent shall retain the records and copies of documents prepared by or relied on by him pursuant to order 30 above for at least six years from the date of this order and shall produce a complete and true copy of such material to the applicant upon request within seven days of receiving such a request.

32.    The fourth respondent pay the applicant’s costs of and incidental to these proceedings as against him, such costs to be taxed if not agreed within 28 days of the date of this order.

2    The Australian Competition and Consumer Commission (Commission), which secured those orders, alleges that Mr Foster has breached orders 27 and 29. It alleges that the breaches constitute a contempt. The Commission’s statement of charge is as follows:

Charge 1

1    In the period from December 2009 to 2 September 2010 you were directly or indirectly knowingly concerned in the promotion or conduct of the business of SensaSlim Australia Pty Limited (SensaSlim) which was a business relating to weight loss and thereby breached order 27 of the orders made by the Honourable Justice Lander of the Federal Court of Australia, dated 2 September 2005 in proceeding number QUD 252 of 2001.

Particulars:

1.1    On 2 September 2005, Justice Lander made an order in the following terms:

“The fourth respondent be restrained, for five years from the date of this order, from being directly or indirectly knowingly concerned in the promotion or conduct by a corporation of any business relating to weight loss, cosmetic or health industry products or services of any kind.”

(Order 27)

1.2    SensaSlim conducted a business which involved, amongst other things:

(a)    manufacturing and supplying an intra-oral solution administered as a spray marketed and distributed by it as a weight loss aide (SensaSlim Solution);

(b)    entering into franchise agreements with distributors (Area Managers) for the supply of the SensaSlim Solution to Area Managers, for resale by them to retailers;

(c)    supplying services to Area Managers, including training, marketing and sales support;

(d)    the licensing and the promotion of the SensaSlim Solution.

1.3    In the period from at least sometime in December 2009 until 2 September 2010, the Fourth Respondent:

(a)    prepared some or all, or caused to be prepared, a promotional DVD about SensaSlim and the SensaSlim Solution which was shown to prospective Area Managers;

(b)    prepared some or all, or caused to be prepared and approved, and caused to be published newspaper advertisements advertising the opportunity to become an Area Manager for the distribution of the SensaSlim Solution;

(c)    prepared some or all, or caused to be prepared and approved, a document entitled “Area Manager Proposal” (Area Manager Proposal) and disclosure documents for provision to prospective Area Managers;

(d)    engaged in conversations with prospective Area Managers to encourage entry by them into franchise agreements with SensaSlim for the distribution of the SensaSlim Solution;

(e)    engaged in email correspondence with prospective Area Managers regarding the business of SensaSlim, to encourage entry by them into franchise agreements with SensaSlim and sale of the SensaSlim Solution;

(f)    prepared some or all, or caused to be prepared and approved, newsletters circulated by email by SensaSlim to potential Area Managers and Area Managers (Newsletters).

(g)    controlled and directed the process for engagement by SensaSlim with potential Area Managers, and entry by SensaSlim into franchise agreements with Area Managers.

Charge 2

2    In the period from December 2009 to 2 September 2010 you were knowingly concerned in SensaSlim in trade or commerce, making, or permitting to be made, representations as to the particular standard or quality of the SensaSlim Solution, without, prior to making the representation, SensaSlim providing the representee with a copy of the orders made by the Honourable Justice Lander of the Federal Court of Australia dated 2 September 2005 in proceeding number QUD 252 of 2001, or informing the representee of the existence of the orders and giving the representee the address of the Federal Court website, and thereby breached order 29 of those orders.

Particulars:

2.1    On 2 September 2005, Justice Lander made an order in the following terms:

“The fourth respondent be restrained for a period of five years from the date of this order from in any manner being knowingly concerned in any corporation in trade or commerce, making, or permitting to be made, any representation as to the nature, quality, fitness for any purpose, testing, history, composition, standard, approval by any person, performance characteristics, uses or benefits of any good or service unless, prior to making the representation:

29.1    he believes the representation to be true and accurate;

29.2    the corporation informs the representee in writing of all information of which he is aware that refutes, qualifies or contradicts any part of the representation; and

29.3    the corporation provides the representee with a copy of these orders or informs the representee of the existence of these orders and gives the representee the address of the Federal Court website, namely www.fedcourt.gov.au, from which a copy of these orders can be obtained.” (Order 29)

2.2    The particulars in set out in paragraphs 1.2 are repeated.

2.3    From about mid March 2010, SensaSlim provided potential Area Managers with the Area Manager Proposal and showed a promotional DVD to those potential Area Managers.

2.4    On or about 30 July 2010, SensaSlim circulated a newsletter (Newsletter 5) to potential Area Managers and Area Managers.

2.5    On or about 13 August 2010, SensaSlim circulated a newsletter (Newsletter 7) to potential Area Managers and Area Managers.

2.6    On or about 20 August 2010, SensaSlim circulated a newsletter (Newsletter 8) to potential Area Managers and Area Managers.

2.7    In the Area Manager Proposal (at p 20), the promotional DVD (at 28:03 to 30:54) and Newsletters 5, 7 and 8 SensaSlim represented that the SensaSlim Solution was the subject of a large world wide clinical trial and that the trial established the efficacy of the SensaSlim Solution, being a representation that the SensaSlim Solution was of a particular standard or quality, namely that its efficacy had been established by a large world wide clinical trial.

2.8    Area Managers who were provided with the Area Manager Proposal, were shown the promotional DVD or who received Newsletters 5, 7 or 8 were not provided with a copy of the Orders or made aware of the Orders by SensaSlim.

[sic]

3    The Commission seeks a declaration that Mr Foster is guilty as charged, the imposition of penalties and an order in respect of its costs.

4    Mr Foster denies each charge of contempt made against him in the statement of charge.

5    It is common ground that, at all material times, Mr Foster was aware of the terms of orders 27 and 29. There is no doubt on the evidence that a company by the name of SensaSlim Australia Pty Ltd existed in Australia during the period from December 2009 to at least (and after) 2 September 2010. I term that company SensaSlim in these reasons, except where it is necessary to distinguish it from a foreign incorporated, related company, SensaSlim International Limited, in which case I use the terms SensaSlim Australia and SensaSlim International respectively. I also term the product used in the business “SensaSlim”, except where context alone is not sufficient to indicate that the term is being used to refer to the product, in which case I use the term SensaSlim product.

6    By the time of trial of the charges, SensaSlim was in liquidation.

7    It is for the Commission to prove that Mr Foster is guilty of contempt as alleged. It was common ground between the parties, a position with which I concur, that the Commission must do so beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525 (Witham v Holloway) at 534.

8    Each charge alleges that Mr Foster was directly or indirectly knowingly concerned in particular conduct. As to this and as Mason ACJ and Wilson, Deane and Dawson JJ observed in Yorke v Lucas (1985) 158 CLR 661 at 670:

There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention.

Thus, in this case, there can be no question that Mr Foster is guilty of contempt as alleged unless the Commission not only proves beyond reasonable doubt the facts constituting the alleged contempt but also that Mr Foster had knowledge of them. Mr Foster contends that the Commission has failed to prove the elements of the charges made against him.

9    Before turning to the evidence led in the present case and the facts which I find, it is desirable to make reference to events more distant in time concerning Mr Foster and to their role, if any, in the present case. Why that is so will be apparent from what follows.

10    In the course of interlocutory proceedings, I disclosed to the parties that, when in practice at the Bar, I had appeared in cases in which Mr Foster was a party; one a bankruptcy proceeding in which I had conducted a public examination of him when briefed for his then trustee in bankruptcy, the other an international extradition matter, proceedings in which culminated in an unsuccessful appeal by Mr Foster to the High Court of Australia in which I appeared for the Minister for Justice and Customs. Mr Foster expressly did not take objection to my hearing the case. The Commission also did not object.

11    I mention this at the outset because other aspects of Mr Foster’s past, quite apart from the subject of whether he was or was not knowingly concerned in particular conduct as charged, were raised, or sought to be raised, in these proceedings.

12    I admitted, as part of the Commission’s case and over the objection of Mr Foster, a recording of an interview which he gave to the Australian Broadcasting Corporation’s Ms Monica Attard as a sample of his voice (the Attard interview). Later, in both affidavit and oral evidence, Mr Foster came to admit that he was he was the interviewee in this recording. In the course of that interview Mr Foster made general admissions as to his past crimes and notoriety.

13    Prior to Mr Foster’s giving evidence, the Commission applied for leave to cross-examine Mr Foster about particular past criminal convictions. A convenient summary of these past convictions was said by the Commission to be found in the Queensland Court of Appeal’s judgment in R v Foster [2009] 1 Qd R 53 (R v Foster).

14    The Commission’s application was made under s 103 of the Evidence Act 1995 (Cth) (Evidence Act) or, further or alternatively, s 104. The application was made in the alternative because the Commission apprehended that it was moot as to whether the contempt proceeding was civil or criminal in character.

15    The basis upon which leave was sought was that Mr Foster’s cross-examination of two witnesses called by the Commission, Dr Christopher Waters and Mr David Scott Emerton (also known as Scott Waller) but most especially the latter, had entailed serious imputations as to their character. Mr Foster objected to leave being granted.

16    In the result, I declined to grant leave to the Commission to cross-examine Mr Foster about the particular past convictions. I gave brief reasons for that ruling at the time and indicated that I would enlarge upon these when delivering final judgment.

17    Whether s 103 alone or additionally s 104 of the Evidence Act were applicable depended upon whether the present proceeding could be classed as civil or criminal in character. If the latter, then s 104 was additionally applicable and, if the former, then s 103 alone was applicable.

18    There is a longstanding distinction between civil and criminal contempt but that distinction has been described as of an “unsatisfactory nature”: Witham v Holloway at 531, referring to Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 107. Disobedience of a court order is, without more, a civil contempt but is criminal if it involves deliberate defiance of that order: Witham v Holloway at 530. The Commission’s case was cast on the basis that Mr Foster knew the terms of orders 27 and 29 made by Lander J and was knowingly concerned in conduct in breach of those orders. That, in my view, is an allegation of a criminal contempt.

19    That what is charged is a criminal contempt, which must be proved beyond reasonable doubt, might be thought to suggest that the proceeding is criminal in character. Yet in Witham v Holloway at 534 the High Court observed, “to say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge”. The High Court pointed to procedural differences, of which the most obvious was that a trial in respect of the latter usually involves trial by jury, whereas that in respect of a contempt charge does not. In Australian Securities and Investments Commission v Reid (No 1) [2006] FCA 699 Lander J noted that the practice and procedure adopted under this Court’s then rules of court in respect of the hearing of a contempt charge was (as it remains) civil rather than criminal. That led his Honour to rule that the respondent, who was without legal representation and indigent, was not entitled to a stay of proceedings based on the principle in Dietrich v The Queen (1992) 177 CLR 292, because that only applied in respect of a criminal proceeding.

20    In the face of this authority, I considered that I was bound to conclude that the proceeding was, strictly, civil in character. That being so, s 104 of the Evidence Act was not applicable, only s 103. That required a decision to be made as to whether the “credibility rule” (as defined in s 102 of the Evidence Act in respect of “credibility evidence”, as defined in s 101A) should not apply to Mr Foster’s cross-examination in respect of these particular offences on the basis that the evidence could substantially affect the assessment of his credibility. Subsection 103(2) sets out, in a non-exhaustive way, considerations which are relevant in this regard.

21    Even if there were circumstances warranting the inapplicability of the credibility rule I was invited to exercise a discretion under s 135 or s 137 of the Evidence Act to exclude that evidence. It was correctly conceded on behalf of Mr Foster that s 137 would not apply if the proceeding were not criminal in character. For the reasons given, the proceeding is civil in character such that s 137 of the Evidence Act is not applicable.

22    As to s 103 and s 104 of the Evidence Act, I was referred by counsel to the judgment of Simpson J in R v El-Azzi [2004] NSWCCA 455 (El-Azzi) at [173] et seq in respect of then like provisions in the Evidence Act 1995 (NSW). It is necessary to add the qualification, “then” because, after El-Azzi was decided, s 103 and s 104 of the Evidence Act were amended to the form in which they took at the time of this trial. Even if s 104 were applicable and, for the reason given, it is not, the later amendment means that care must be taken in the use of what was said of that section in El-Azzi. Care must likewise be taken in relation to the observations made as to s 103.

23    A derivative of the word “substantial” remains a qualifying feature in s 103(1). Instead of “substantial probative value” the test now is “substantially affect the assessment of the credibility of the witness”. The change might be thought to take up what was said of the former s 103 by Hunt CJ at CL, with whom Gleeson CJ and Hidden J agreed in R v RPS, unreported, NSWCCA, 13 August 1997 (RPS), referred to by Simpson J in El-Azzi at [181]:

Evidence adduced in cross-examination must therefore have substantial probative value in the sense that it could rationally affect the assessment of the credit of the witness. Such an interpretation accords with the intention of the Law Reform Commission. The addition of the word ‘substantial’ nevertheless imposes a limitation upon the common law, when almost anything was allowed upon the issue of credit unless it clearly had no material weight whatsoever upon that issue. That limitation is an important one.

[emphasis in original]

24    As noted by Simpson J in El-Azzi, RPS was the subject of a successful appeal to the High Court, RPS v The Queen (2000) 199 CLR 620, but on matters unrelated to the question in that case or the present question. As also noted by his Honour, the interpretation of the then s 103 in RPS was endorsed by the Full Court of this Court in Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51 at 71-72, per Sackville J, with whom Whitlam and Mansfield JJ agreed.

25    Also relevant are two further views expressed by Simpson J in El-Azzi. Referring to the question of a grant of leave under s 104(2), Simpson J, at [177], considered that considerations raised by s 135 and s 137 did not fall for separate determination but instead intrude into the question of whether to grant leave under s 104(2) of the Evidence Act. I consider that the same may be said of a decision under s 103(1) as to whether particular credibility evidence should be permitted to be adduced in cross-examination. Apart from the open-ended nature of what is relevant to such a decision, a reason for this arises from an enduringly apt observation which his Honour made, at [178] in relation to s 135, s 137 and s 192 of the Evidence Act:

178    A common theme, expressed in slightly different ways and prescribing slightly different tests, runs through s135(a), s137, and s192(2)(b). That theme is unfairness.

26    The criminal history referred to in R v Foster dated back to 1987. The age of many of the offences noted was such as to raise a question as to whether some were spent or, if otherwise spent, had been revived by reason of the operation of the Criminal Law (Rehabilitation of Offenders) Act 1986 (Qld) (Rehabilitation of Offenders Act), as applied in this proceeding by s 79 of the Judiciary Act 1903 (Cth). Resolving that would have required a considerable investment of time in respect of a hearing where availability of time was at a premium. Further and at a more general level of detail, Mr Foster, as I have mentioned, made no secret of his having a criminal past. Yet further, his admission in that regard was an inherent feature of a proven sample of his voice as contained in the Attard interview. Thus, insofar as the contents of the Attard interview were concerned, those contents fell outside the definition of “credibility evidence” in s 101A of the Evidence Act, because the Attard interview was not relevant only because it affected the assessment of Mr Foster’s credibility. Additionally, that he was at the time of key alleged events bound by orders of this Court and on parole in respect of the offence with which R v Foster was concerned formed part of the defence case that he was not involved but was vulnerable to and had been subjected to a form of blackmail by Mr Emerton.

27    In these circumstances, it struck me that resolution of whether and to what extent the Rehabilitation of Offenders Act applied so as to permit reference at all to particular convictions would be an “undue” waste of time: s 135(c) of the Evidence Act. Further, evidence as to the detail of the past criminal history was not said by the Commission to be admissible as tendency evidence in its case in chief; it was sought only to lead it in cross-examination as credibility evidence. In the face of what was admitted by Mr Foster in any event, albeit at a general level and its role as so admitted in the defence case, it struck me that to permit cross-examination on the detail of the criminal history would be unfairly prejudicial to him in a case where identity, his knowing concern in the conduct alleged, was a critical issue. In this case, the onus is always on the Commission to prove the contempt and to do so beyond reasonable doubt. Mr Foster is in no way obliged to prove his innocence.

28    As I remarked at trial in relation to having necessarily been made aware of the detail of the past history as set out in R v Foster for the purposes of making a ruling, there is a necessary discipline involved in this case for a judicial officer performing the function of tribunal of fact and law. The Commission most emphatically does not discharge to the requisite standard the onus which falls on it by showing that Mr Foster has a lengthy criminal history. As I disclosed, I already knew something of Mr Foster’s past from practice. He has a notoriety, which he frankly acknowledged in the Attard interview. I expect that most members of this Court, and the State courts in Queensland for that matter, would, to a greater or lesser extent, be aware of that.

29    In not objecting to my hearing the case, Mr Foster was not just waiving any issue as to apprehended bias, he was expecting that the serious allegations made against him in this case would be heard and determined with an objective detachment he was entitled to expect from a person exercising the judicial power of the Commonwealth. If I had felt that I could not undertake that task in that way, given my prior knowledge, I should have been duty bound to disqualify myself, even though no objection was taken. I considered when making the ruling at trial, and still do, that permitting cross-examination about the detail of the past convictions would, in the circumstances, not only be an undue waste of time but apt to intrude upon the necessary discipline to which I have referred and thereby be unfairly prejudicial to Mr Foster. The Commission’s forensic interest in testing his own credibility, after a singular assault by him in cross-examination on the credibility of Dr Waters and Mr Emerton, insofar as it was not already served by Mr Foster’s frank admission in the Attard interview, was, I considered, met in a way that was not unfairly prejudicial to him by permitting cross-examination on the subject of his past at the level of abstraction already otherwise found by admission, as opposed to the detail disclosed in R v Foster. It necessarily follows from this that, in reaching my conclusions of fact in this case, I have, very deliberately, excluded that detail from my consideration.

30    What then of the evidence and my findings in respect of the evidence?

31    The following findings are based on the evidence of Dr Waters, whose evidence I accept.

32    Before setting out these findings it is necessary to say something of Dr Waters and why I accept his evidence.

33    Dr Waters is a dentist. He has practised as a dentist since 2003 and managed his own dental practice on the Gold Coast in Queensland since 2007.

34    As the events which I relate based on his evidence prove, Dr Waters has not been content just to practise his profession and to derive income accordingly. He sought to enhance his income by investing in a business. This hardly makes him unique amongst the ranks of those practising a learned profession. Sometimes such additional activities prosper; sometimes, in hindsight, all they prove is that it is better just to practise the profession for which one is trained. The latter proved to be Dr Waters’ experience. That is because Dr Waters chose to invest in SensaSlim’s business.

35    That Dr Waters chose to invest in SensaSlim means that he was not a disinterested observer of the business which SensaSlim came to conduct. He is one of the Commission’s informers as to that business and his, Mr Foster’s (so he says) and others involvement in it. He gave evidence after entering in to a “co-operation agreement” with the Commission whereby, in return for his evidence, he was given a limited immunity from proceedings against him personally. This does not make his evidence inadmissible. Nor does it mean that his evidence cannot be relied upon unless corroborated: s 164 of the Evidence Act. Nor even, because, for reasons already given, this is not a criminal proceeding and because Dr Waters is not a prison informer does it mean that I am bound by s 165 of the Evidence Act to approach his evidence on the basis that it may be unreliable. Nonetheless, Dr Waters is a particular kind of informer. I have approached the assessment of his evidence on the basis that, both because of his investment and involvement in the business, his entry into a co-operation agreement with the Commission and the cessation of a relationship which he had with Mr Foster’s niece, Miss Arabella Foster (Arabella), his evidence may be unreliable. I have therefore assessed his evidence with particular caution.

36    I have an enduring memory of Dr Waters, assisted by particular notes of his appearance and demeanour which I took in the course of his oral evidence. To observe him in the witness box was to see a slim, youthful looking man, well dressed in a dark blue suit, white shirt and conservative tie. He was softly spoken and possessed, I thought, of a wistful sense of humour relating to his involvement with SensaSlim and the Foster family.

37    I illustrate that perception of his wistfulness in this way. In the course of a searching cross-examination as to the veracity of his affidavit evidence it was put to him, inter alia, that an account which he gave of a conversation with Mr Foster over a dinner in or about December 2010 was not true. As related by Dr Waters, the tenor of that conversation was directed to the SensaSlim business and to the events of the preceding few months concerning that business. That period was, as will be seen, a period over which the business came to unravel. Dr Waters recalled a conversation to the following effect between him and Mr Foster:

I said:    Just take my money, I don’t want it back and leave me alone.

Mr Foster:    I think you should stay with the company.

Dr Waters recalled that Mr Foster had then handed him his (Mr Foster’s) telephone so as to speak with (Mrs) Louise Foster (known to Dr Waters as and in fact Mr Foster’s mother). He recalled that she had said to him (inferentially about his no longer having involvement with SensaSlim):

You are definitely not doing that. Things will get better.

When it was put to him that his account of his conversation with Mr Foster was not true, Dr Waters replied, simply and definitely, “It’s true.” In so doing, he smiled, I thought wistfully, the result, so it struck me, of a combination of a very distinct recollection of the event and conversation, his investment and all that had later entailed for him, including his giving evidence in court.

38    Another way of illustrating that perception is derived from a much earlier exchange in the course of Dr Waters’ cross-examination, when he was being questioned as to the negotiations which led up to his entering in to the co-operation agreement with the Commission. The following exchange occurred:

And you would remember how all of this came about? -- To be honest, I’ve tried to delete most of it from my mind.

All right. So we can’t be sure on parts of your evidence; is that right? -- I’m sure on my evidence.

Dr Waters’ reference to “trying to delete most of it from my mind” was, I thought, a wistful reference not only to a business investment but also to a romance which was no more but which had once meant much to him, his romance with Arabella. Dr Waters indeed proved, I thought, to be “sure of his evidence”. His answers under cross-examination were spontaneously and definitely given.

39    A yet further way I illustrate that perception is by reference to an excerpt from an email of 23 November 2010 which I find Dr Waters sent to Mr Foster at one of the alias based email addresses used by Mr Foster (willam.e.duffy@hotmail.com - William Duffy email address):

[Reference to ordering and going through bank statements and to amounts invested]

To say everything involved has left me feeling badly would be a massive understatement. Still, I don’t blame anyone. Arabella is, as you say, too young, she has no idea nor comprehension of the stress I endured throughout the year. Also the commitment I had made in my head, wallet and heart through this. I am suffering the concomitant amount for the efforts I put in. I know you all wanted the best for me and for that I am truly grateful.

I know you say business is business and relationships are different, but the line was blurred here for me.

I will be OK but truly need space to move on.

…

hope [sic] you’re all well, and happy birthday to luigina from me, give her a big hug and kiss from her wounded grandson and let her know that I am OK. …

To this Mr Foster, the following day and using the William Duffy email address, replied to Dr Waters, stating, amongst other things:

Thanks Chris.

Ok when you get your bank statements can you give me exact dates and exact amounts so I can ensure that everything matches up at both ends.

Also will need you to confirm the funds that you did receive from SensaSlim back ... so we are all aware of how we account for everything to minimise tax.

… I am always available 24/7 to talk or meet so don’t hesitate. … [sic]

It is to be remembered that that exchange occurred about a year before Mr Foster’s arrest in respect of the Commission’s contempt charge and Dr Waters’ entry into the co-operation agreement with the Commission. Dr Waters’ note is not that of a man with bitterness towards anyone in the Foster family, only that of a man dealing with emotional turmoil and with an interest in receiving what he had invested in SensaSlim back and getting on with his life. The reply is not that of a third party named William Duffy, but of a man who understands all of this and is sympathetic to Dr Waters; it is Mr Foster’s reply. As will be seen, there are also reasons other than just Dr Waters’ say so and inferences to be drawn from the contents of emails why the author of emails from the William Duffy email address and other email addresses not comprising a variant of his personal name is nonetheless Mr Foster.

40    Dr Waters’ investment in and involvement with SensaSlim was a sequel to his involvement with Arabella. He met Arabella through friends and associates on the Gold Coast in or about June 2008. They began a romantic friendship shortly thereafter that meeting. At first, though Dr Waters knew that Arabella’s surname was “Foster”, he did not know that she was related to Mr Foster. Arabella is Mr Foster’s niece, the daughter of his sister, Ms Jill Foster (Jill).

41    Dr Waters’ romantic friendship with Arabella came to an end in about October 2010. That they were once such friends and are no more is, as I have already observed, another factor to take into account when weighing up Dr Waters’ credibility. In effect, though rather more delicately put in submissions, I was invited on behalf of Mr Foster to conclude that the adage “Hell hath no fury like a woman scorned” was not gender specific either in its application or its accuracy and, in this case, that the scorn was directed by Dr Waters at the Foster family generally and at Mr Foster in particular. I well accept that the adage is not gender specific. I have taken this prospect into account but the contemporaneous and also enduring impression which I had and have of Dr Waters in this regard is, as I have stated, of wistfulness, not animosity.

42    Further, and as will be seen, Dr Waters’ evidence is not uncorroborated in particular respects. In making the latter observation, I do not just refer to the evidence of Mr Scott Emerton. In examining whether there existed corroboration for any of Dr Waters’ evidence, I have first and foremost sought an answer to that in evidence other than that given by Mr Emerton. That is why the reference to Mr Emerton’s evidence appears in these reasons for judgement only after a survey of other evidence led by the Commission.

43    The findings then which I make, based on my acceptance of Dr Waters’ evidence, are these. It necessarily follows from them that, to the extent that Mr Foster’s evidence or that of Mr Robert Reichelt, who was also called in the defence case, differs from these findings, I do not accept their evidence.

(a)    Dr Waters first met Mr Foster in or about May 2009 at the home at Amalfi Drive at the Isle of Capri on the Gold Coast (Amalfi Drive property) to which Mr Foster had come to reside following his release from prison that year. The Amalfi Drive property was the then residence of Mr Foster’s mother, Mrs Luigina Foster, known as Louise Foster (Louise) and Jill. Arabella then lived in a separate residence at Mermaid Beach. Dr Waters’ first meeting with Mr Foster was brief, little more than an introduction.

(b)    Dr Waters had earlier come to know Louise via his relationship with Arabella and then, as a result of that initial social contact, also as a patient in his dental practice. He had also earlier briefly spoken socially with Mr Foster by telephone in late 2008 when Louise had passed him the telephone in the course of a conversation which she was having with her son, inferentially while he was then incarcerated.

(c)    Probably in early 2009 and certainly after he had returned from an overseas trip in late 2008 and before May 2009, Dr Waters expressed to Arabella an interest in pursuing a business opportunity and a need for advice. She, in turn, suggested that he should talk with Mr Foster. By that stage Dr Waters knew that Arabella was Mr Foster’s niece. He had also had, by May 2009, several conversations with Louise about the Foster family and various past family business activities.

(d)    During the winter of 2009 Dr Waters met Mr Foster for dinner at Michael’s Restaurant at Tedder Avenue, Main Beach on the Gold Coast. Dr Waters cannot now recall how this meeting came about but I infer that it was a sequel to his having mentioned to Arabella his interest in a business opportunity and his need for advice and her suggestion that he ought to talk to Mr Foster. In the course of this dinner Dr Waters put to Mr Foster some of the business ideas which he had. Mr Foster then said words to this effect:

There is only one good industry: diet products. The market is such that even if you take a tiny percentage of the market share, you are made.

Mr Foster then gave Dr Waters a general account of the diet industry, which included his making the statement, “It’s a multi-billion dollar industry.” Mr Foster also said words to this effect to Dr Waters:

I have a product at the moment. It is called SensaSlim. It is a weight loss product. I intend to sell franchises which can on-sell the product to stores and business across Australia. We have conducted a world-wide trial. Here are some materials.

This (or words to this effect) said, Mr Foster then handed to Dr Waters a document entitled, “Intercontinental Research Institute - The SensaSlim Trial” (Ex CW-2 - The Trial Document). The Trial Document purported to be from a Geneva, Switzerland based body called the Intercontinental Research Institute and to contain details of the proposal by the developers of a diet product known as SensaSlim for a worldwide trial of that product before bringing it to market in 2010. It detailed how the product had been discovered and its properties, dosage and delivery method.

(e)    Dr Waters made no commitment to invest in SensaSlim at this winter 2009 dinner, stating only that he would, “think about it”.

(f)    Over the next few weeks, Dr Waters had a number of conversations with Mr Foster, Arabella and Louise about the SensaSlim business opportunity as related to him at that dinner with Mr Foster. I infer from his detailing some of these conversations that they were variously with either or each of Mr Foster, Arabella and Louise.

(g)    One such conversation concerning SensaSlim occurred at Mavis’s Kitchen and Cabins at Mount Warning, New South Wales between mid-June and August 2009, inferentially after the dinner meeting with Mr Foster. Dr Waters went there with Arabella, Mr Foster and a man introduced to Dr Waters as Kevin McMullan. Given that Dr Waters does not expressly mention Arabella in his account of the brief conversation which he had with Mr Foster and Mr McMullan about business issues including SensaSlim, I infer that the introduction of Mr McMullan to Dr Waters was made by Mr Foster rather than by Arabella.

(h)    By late August 2009 Louise, Jill and Mr Foster had moved to a large, white house at Norseman Court on the Gold Coast (the Norseman Court house).

(i)    Dr Waters is and has been since their high school days a friend of a Mr Michael Boyle. They are close friends. As at the end of 2008, Mr Boyle was a stockbroker working for Macquarie Bank. He later came to work for the investment bank and asset manager, UBS.

(j)    In the latter part of 2009, inferentially after the week-end at Mavis’s Kitchen and Cabins and the move to the Norseman Court house, Dr Waters went with Mr Boyle to the Norseman Court house for dinner. By that stage, Dr Waters had mentioned SensaSlim to Mr Boyle but not at any length. I infer that the subject had just occurred in the course of passing conversation between close friends as something which had come to Dr Waters’ attention, nothing more. I also infer, based on the whole of Dr Waters’ evidence, that, at that stage, Dr Waters was on very good terms with Louise and was a welcome guest at the Norseman Court house, considering himself virtually to be family. I likewise infer that this visit was in the nature of a call with a close friend on Louise by someone who was then dating a beloved granddaughter. Accepting as I do Dr Waters’ evidence, I find that Dr Waters did not go to Norseman Court on this occasion for the particular purpose of discussing SensaSlim.

(k)    Mr Foster was present on the occasion of this call for dinner at the Norseman Court house by Dr Waters and Mr Boyle. At some stage during the course of the evening, he spoke separately with Dr Waters and Mr Boyle, i.e. only Mr Foster, Dr Waters and Mr Boyle were parties to this conversation. Mr Foster said words to the following effect to them:

I’ve got the rights to represent SensaSlim in Australia. You know, people would give their left arm to buy SensaSlim. They are dying to buy it. But I’d rather work with you. I don’t want to be associated with those people.

You would be buying a 50% share in the Australian arm of SensaSlim. I would retain a 50% share and all profits would be shared between us

Mr Foster then said words to this effect:

I can’t be involved in the business. My reputation is mud so I cannot be connected to a weight-loss product

(l)    Mr Foster then gave Dr Waters some further documents:

(i)    a document titled “SensaSlim REGIONAL OWNER PROPOSAL – A private offer to obtain exclusive rights for Australia” (Ex CW-3). Attached to the front of the document as handed to him by Mr Foster was a post-it note with the words “Read me First”; and

(ii)    a document titled “SensaSlim THE OFFER AND FINANCIAL PROJECTIONS”, (Ex CW-4). Attached to the front of the document as handed to him by Mr Foster was a post-it note with the words “Read me Second”.

When handing Dr Waters these documents, Mr Foster said to him and Mr Boyle words to this effect:

You are smart guys, read it on your own. My figures are accurate. I pride myself on my figures.

The conversation between Mr Foster, Mr Boyle and Dr Waters then turned to the subject of money. As to this, Mr Foster initially said to them: “I want to sell the Australian rights to the SensaSlim business for $1 million”. Later, he said “I’ll sell it for $250,000”. To this Dr Waters replied, “I can probably get that”.

(m)    During the course of the evening, a conversation between Dr Waters and Mr Foster to this effect also took place:

Dr Waters said:    I’m a bit worried about going into business.

Mr Foster said:    Family is everything to me and I wouldn’t do anything to harm my family.

I would never do anything to jeopardise Michael’s reputation or jeopardise my family.

I would never do anything to jeopardise Arabella.

Dr Waters did not expressly place Mr Boyle as present at this particular conversation. Given that Dr Water’s recollection was that Mr Foster’s reference to Mr Boyle [“Michael’s”] was in the third person and the particular reference to Arabella, it seems to me inherently likely that this particular part of the conversation that evening was between Mr Foster and Dr Waters alone.

(n)    Neither Dr Waters nor Mr Boyle made any commitment at this dinner to invest in SensaSlim.

(o)    Shortly after the dinner and in August 2009, Dr Waters decided that he would invest in SensaSlim. He had a discussion with Mr Foster to the following effect:

Dr Waters said:    How do you want me to pay the $250,000?

Mr Foster said:    Pay it to a company called “Satori Properties”.

(p)    On 11 August 2009, Dr Waters made an initial payment of $20,000. He transferred this money by way of electronic funds transfer to a Satori Properties bank account. Mr Foster provided him with the account details. At or about this time, Dr Waters had a discussion with Mr Foster in which he was informed by Mr Foster that the initial payment was to be used for the setting up of the SensaSlim business by an accounting firm called “Jordans International”.

(q)    This discussion was related to a lengthy exchange of emails between Mr Foster (using the William Duffy email address) and Dr Waters commencing on 11 August 2009. In this exchange Mr Foster gave details to Dr Waters of arrangements which he was making for the establishment, with the assistance of Jordans International Limited, an incorporated chartered accounting practice (the same as the “Jordans International” to which Dr Waters referred in recounting conversations with Mr Foster), of a limited liability partnership in the United Kingdom and a structure of companies and of the opening of a business account with Lloyds Bank on the Isle of Man (the latter inferred from the reference to “Douglas, I.OM” in Lloyds email of 12 August 2009 to the William Duffy email address).

(r)    There are internal indications in this email exchange that the author of the emails from the William Duffy email address is Mr Foster. In particular in an email of 11 August 2009 to Dr Waters (commencing, “Hello Chris”):

    the email is concludes, “Best, P”, the “P” being unlikely to be a person whose real given name is “William” but not if one’s given name is “Peter”;

    the “PS” reference in the email to keeping “Michael” up to date is a reference to Mr Boyle, which is consistent with Dr Waters’ evidence as to bring Mr Boyle to dinner at Norseman Court and as to the conversation they had there with Mr Foster.

(s)    It was Mr Foster who undertook the correspondence with Jordans International and Lloyds Bank using the name William Duffy and the William Duffy email address.

(t)    On 31 August 2009 Dr Waters made a payment of $180,000 by way of electronic transfer to the bank account for Satori Properties. He financed this payment by way of a draw down from his home loan.

(u)    At the time, Dr Waters’ understanding was that he was purchasing from Mr Foster the right to sell SensaSlim franchisees in Australia.

(v)    During September 2009 and in the context of the email exchange he continued to have with Dr Waters and which Mr Foster was in turn conducting with Jordans International and Lloyds Bank using the alias “William Duffy”, Mr Foster said words to the following effect to Dr Waters:

We’re going to set-up SensaSlim International to sell franchises all around the globe. I want to see the international rights to you. We will set up a company in England that will sell the business all around the world.

You are too close to the Foster family name so you have to be an investor only. You can’t be the face of the company in Australia. You can buy the international rights through a trust, and Mike can participate in the Australian business as the face of the Australian business. Money will be paid to the company in England to pay for the Australian arm of SensaSlim.

The customers and trading partners will only do business with the England company.

Mr Foster’s reference to “Mike” in this conversation was a reference to Mr Boyle. Dr Waters also recalls having a conversation to this effect with Mr Foster:

Mr Foster: I own SensaSlim Suisse and we will set up you up with SensaSlim International we will use these companies to sell the distribution rights for SensaSlim internationally.

Dr Waters said:    What is the additional cost for the international rights to SensaSlim?

Mr Foster said:    The total price is about $360,000.

Inferentially from its contents, this conversation occurred in or about August 2009 at or about the time when Dr Waters’ email exchange with Mr Foster commenced on 11 August 2009 and when Dr Waters made his initial payment.

(w)    As a sequel to this conversation and to the email exchange and related setting up of a structure of SensaSlim related companies, an agreement was made between SensaSlim International, signed by Dr Waters and SensaSlim Suisse, signed by Mr Foster for the sale of distribution rights internationally. Under this agreement, the profits of the sale of distribution rights were to be broken down such that Dr Waters interests received 10% and Mr Foster’s interests received 90%.

(x)    Dr Waters relayed the various statements made by Mr Foster to him concerning an investment in SensaSlim to Mr Boyle.

(y)    Mr Boyle and Dr Waters came to form what Dr Waters at least regarded as a 50/50 “partnership” between themselves with respect to investing in SensaSlim. They had no written agreement between themselves.

(z)    From about late 2009 to November 2010 Dr Waters and Mr Foster had numerous discussions about the SensaSlim business in the course of which Mr Foster said words to the following effect to him as to what SensaSlim franchisees paid for a franchise and what they received:

(i)    franchisees paid an initial $30,000 for the right to operate a SensaSlim franchise;

(ii)    franchisees paid a further $30,000 was to be paid on the launch of the business; and

(iii)    at or around the time of the SensaSlim product launch, franchises would be given point of sale material, sales and marketing support, an advertising campaign would be undertaken and a list of retailers they could approach to sell the SensaSlim product.

(aa)    Dr Waters did not have a role in the day-to-day operation of SensaSlim. He remained practising as a dentist. His role was that of a passive but interested investor and, via that status and also his relationship with the Foster family, observer of operations. As to the latter, Mr Foster and Arabella kept him regularly updated with what was happening. Dr Waters spoke to Mr Foster a few times a week about the SensaSlim business and what was happening. He also visited the Foster family home at the Norseman Court house about four times a week, often staying overnight. He remained a regular visitor when the Foster family moved in 2010 to another residence. His conversation during these visits to Louise, Jill, Arabella and Mr Foster during these visits was by no means confined to SensaSlim but the affairs of that business invariably came up in conversation.

(bb)    The Foster family moved from the Norseman Court house to a house at Witt Avenue Carrara (the Carrara house). [In his affidavit evidence, Dr Waters placed this move in early 2010. In this regard, his recollection was mistaken as evidence as to rental payments in respect of the Norseman Court house introduced via the evidence of its owner, Mr Batley, discloses that Louise continued to pay rent in respect of that house until September 2010 with Mr Batley then having to take steps to remove the Foster family from that house.]

(cc)    In the period between September 2009 and November 2010, Dr Waters observed various activities being undertaken in relation to the SensaSlim business at the following locations:

(i)    the Norseman Court house (until the Foster family moved from it);

(ii)    an apartment in Southport Central which was rented and used for the purposes of the SensaSlim business on and from early 2010; and

(iii)    the Carrara house.

(dd)    Over this period, he observed the following occurring at one or the other of these locations:

(i)    identification of sales areas and creation of related maps;

(ii)    preparation of distribution materials for the sales team;

(iii)    activities related to the advertising of the business in newspapers; and

(iv)    liaison with potential franchisees.

(ee)    These activities were directed to the undertaking of a product launch of the SensaSlim product in November 2010.

(ff)    The activities commenced at the Norseman Court house in 2009, shortly after Dr Waters made his initial investment in SensaSlim. Initially, the business was conducted from an open area in that house with a number of computers.

(gg)    Dr Waters observed Mr Foster working in such activities at the Norseman Court house.

(hh)    Arabella worked in the SensaSlim business. She used the alias “Alli Loretti” when working in the business. This was because she did not want people dealing with the business to know that she had any connection with Mr Foster. She performed administrative work and general office duties for SensaSlim, including the copying of maps and liaison with newspapers for the placing of advertisements. She was also responsible for arranging disbursements (e.g. travel costs) for people such as Mr Scott Emerton.

(ii)    Mr Emerton was known to Dr Waters as someone who sold franchisees for SensaSlim and who used the name “Scott Waller”.

(jj)    Much SensaSlim business related work was transferred from the Norseman Court house to the Southport Central apartment in early 2010 as SensaSlim franchises began selling. Mr Foster remarked to Dr Waters that the work venue was changed “to get the work out of the house”. Nonetheless, some SensaSlim related work did continue to be performed at the Foster family homes at Norseman Court and then when they moved to the Carrara house. There were two houses at these premises: one was a residence and the other was a guest house, which was used for business purposes.

(kk)    Just before the launch of the SensaSlim product in November 2010, Dr Waters was at the Carrara house. He observed a lot of SensaSlim related work going on there, for example “franchisee packs” which included copies of documents with the SensaSlim logo being put together.

(ll)    During the period between September 2009 and November 2010 Dr Waters observed Mr Foster to undertake the following activities in relation to SensaSlim:

(i)    Dictation of the SensaSlim newsletters on a dictaphone at the Norseman Court house. He also observed Arabella typing the newsletters at the Southport Central apartment whilst Mr Foster was dictating the newsletter over Skype from the Norseman Court house. I infer that Dr Waters placed Mr Foster at the Norseman Court house during the Skype transmission because he was well familiar with that location and could see something of it in the background when viewing the Skype transmission. Dr Waters observed that after the selling of SensaSlim franchises commenced in early 2010, newsletters were regularly sent to all the franchisees.

(ii)    Mr Foster ordered the payment of, and controlled, the accounts of the SensaSlim business. As between Dr Waters, Mr Boyle and Mr Foster, Mr Foster was the only one who had the details for the main SensaSlim account.

(iii)    Mr Foster liaised (on the phone) directly with persons Dr Waters took to be franchisees or potential franchisees. Mr Foster’s practice, as observed by Dr Waters during such conversations, was just to answer as “Peter”, without specifying a last name. Dr Waters took the other parties to the telephone conversations he observed to be franchisees or potential franchisees because of the content of his conversations. For example, he heard Mr Foster saying:

That area has gone but other areas are still available, if you are act quickly you could get another area.

The opinion formed by Dr Waters based on hearing Mr Foster state words to this effect over the telephone does not, of course, prove that the other party to these telephone conversations was a franchisee or potential franchisee. However, it was Dr Waters’ further evidence and I accept that it frequently occurred that he, Mr Foster and, I infer, at least also Louise and Arabella would have dinner “as a family” after Mr Foster finished speaking on the telephone. On such occasions, Dr Waters heard Mr Foster say: “I can’t meet with the franchisees because of my reputation. People wouldn’t invest if they knew I was involved.” Further, Mr Foster also spoke to Dr Waters about the conversations he was having with potential franchisees. Although Dr Waters cannot remember the precise words used by Mr Foster, he recalls (and I find) that Mr Foster made statements to him to the following effect:

I have to speak with them because none of the sales managers could close.

or

We just sold another one.

or

Another franchisee just called.

Based on what Dr Waters heard Mr Foster state on the telephone and the admissions made by Mr Foster to him, I find that, between September 2009 and November 2010, Mr Foster frequently spoke by telephone with potential franchisees from the Norseman Court house and thereafter from the Carrara house.

(mm)    Dr Waters’ overall observation of Mr Foster over the period from September 2009 to November 2010 either at the Norseman Court house or the Carrara house was that he “appeared to be in control of everything” and to have a “hand and say in everything that I saw occurring in relation to SensaSlim”. Dr Waters’ observation at each of these places from which the SensaSlim business was conducted was that those working there invariably came to Mr Foster for direction on any issue of significance. All instructions of significance that Dr Waters saw being given at these locations came from Mr Foster.

(nn)    Whilst at the Southport Central apartment Dr Waters saw drafts of franchise advertisements which were placed in local papers. He also often saw the advertisements when perusing the local papers. His recollection is that they generally said things like “Want to earn $4000 per week?” but never mentioned the SensaSlim name and that there was then simply a phone number to call.

(oo)    Based on Dr Waters’ observations, I find that the SensaSlim business was controlled by Mr Foster.

(pp)    Persons involved in the SensaSlim business to Dr Waters’ observation, apart from Mr Foster and Arabella, were:

(i)    Louise - but only as a source of strategic advice to her son, not in the day-to-day operations of SensaSlim;

(ii)    Leea Kenny - on and from about September 2009. Ms Kenny used the name “Layla” when dealing with people in relation to the SensaSlim business. Ms Kenny also used a false surname but Dr Waters cannot now recall what it was. Ms Kenny had the same role as Arabella: administration and general office duties.

(iii)    Scott Emerton. Dr Waters was introduced to Mr Emerton by Mr Foster at a lunch at the Norseman Court house early in 2010. He was introduced as the “head of sales”. The attendees at this lunch were Louise, Arabella, Mr Emerton, his wife Vikki Emerton, Mr Foster, Dr Waters and Mr Boyle. The purpose of the meeting was a general introduction for Dr Waters and Mr Boyle. As I have mentioned, Dr Waters knew that Mr Emerton used the alias “Scott Waller”.

(iv)    Kevin McMullan. Mr McMullan was involved in the setting up of the SensaSlim franchise network prior to the launch. His main job was the allocation of franchises into areas and related preparation of franchise area maps. He worked at the Norseman Court house from about September 2009.

(v)    Norm Covich. Mr Covich was a SensaSlim franchisee who ran errands for Mr Foster and worked around the Norseman Court house doing things like cleaning windows.

(vi)    Adam Adams. Dr Waters was introduced to Mr Adams by Mr Foster at a breakfast at a local cafÉ called “D-Lish” in 2009. Thereafter, he observed that Mr Foster and Mr Adams began to socialise on a regular basis. He saw Mr Adams come to the Norseman Court house regularly in around late 2009, Mr Foster said to Dr Waters: “I’m giving Mr Adams advice with respect to a business he has in relation to the selling of food called ‘Direct Gourmet’”. Dr Waters often saw Mr Adams wearing a shirt on which appeared the words “Direct Gourmet” at the Norseman Court house. Mr Adams became the operations manager of SensaSlim. Dr Waters observed that he dealt with franchisee issues. After that initial meeting, Dr Waters’ observations of Mr Adams were confined to the Norseman Court house. He did not see Mr Adams working in the Southport Central Apartment which was set up as an office for SensaSlim.

(qq)    In or about late September 2009, while Dr Waters was at the Norseman Court house, Mr Foster handed him a document which Dr Waters, not inaccurately, described as a “To-Do list” (Ex CW-5) for certain of the people referred to above. When so doing, Mr Foster said words to the following effect:

Things are progressing and are going well.

This is what we are up to in the business. Have a look.

Mr Foster did not run through the items of the To-Do list with Dr Waters at the time. The list assigns tasks to various persons naming them by abbreviation or alias. Dr Waters gave an explanation, which I accept, of these. Thus, on the “To Do List”:

(i)    “IMOM” means Mr Foster. [Based on general discussions (to which I infer Dr Waters and members of the Foster family, including Mr Foster were parties) at the Norseman Court house, Dr Waters understood “IMOM” to mean “International Man of Mischief”. He also knew that Mr Foster referred to himself as the “International Man of Mischief” on his website www.peterfoster.com. Further, apart from receiving emails from Mr Foster via the William Duffy email address, Dr Waters also received emails from him via the sender address bill.imom@gmail.com.

(ii)    LA means Layla (Leea Kenny).

(iii)    Allie means Arabella Foster.

(iv)    Joseph means Kevin McMullan.

(v)    CWMB means Dr Waters and Mr Boyle.

Dr Waters did not note at the time when Mr Foster handed him the list that he had been assigned tasks on it.

(rr)    Yet another email address used by Mr Foster to correspond with Dr Waters was pobrien@sensaslim.com.au (Peter O’Brien email address).

(ss)    William Duffy and Peter O’Brien are not just alias names used by Mr Foster. Dr Waters knew persons of that name to be friends of the Foster family.

(tt)    Dr Waters met Mr O’Brien at the Amalfi Drive house before Mr Foster was released from jail. He understood Mr O’Brien to be an old friend of the family. Early 2010, Mr Foster said to Dr Waters: “Mr Peter O’Brien is one of the directors of SensaSlim”. Based on his observations and understanding of the SensaSlim business, Mr O’Brien did not seem to Dr Waters to have any day-to-day control of the business and or to play any active role. I find he had no such roles. His was a name used as an alias by Mr Foster for email correspondence and in telephone conversations which he conducted on behalf of SensaSlim. The shared given name “Peter” was also of advantage to Mr Foster in relation to this alias.

(uu)    Dr Waters knew Mr Duffy as a friend of Louise. Dr Waters observed that Mr Duffy came to the Norseman Court house for general discussions. He never saw him do anything in relation to the SensaSlim business. I find that he did not. The name “William Duffy” (or Bill Duffy) and the William Duffy email address was just another alias of convenience for Mr Foster.

(vv)    There are many examples in evidence of Mr Foster’s use of the alias William Duffy email address and the Peter O’Brien email address.

(ww)    As to the William Duffy email address, I have already referred to those exchanged with Dr Waters concerning Mr Foster’s dealings, also using that email address, with Jordans International and Lloyds Bank. Another example of Mr Foster using this email address is in his email correspondence dated 13 October 2009 with Harvest Pharma when requesting a copy of their TGA (Therapeutic Goods Administration) approval (Ex CW-1 Series 1 page 71/74).

(xx)    Mr Foster at times used the Peter O’Brien email address to communicate with Dr Waters (Examples of this are found in the emails at Ex CW-1 Series 2 pages 8-9/12 and Series 3 pages 19-21/40);

(yy)    Apart from exchanging email correspondence with Mr Foster, Dr Waters, as his telephone records disclose, had frequent telephone and text dealings with Mr Foster.

44    These findings cover a period beyond that specified in the statement of charge. The SensaSlim related events in the period specified in the charge and findings or inferences to be made or drawn as to Mr Foster’s knowledge of those events must necessarily be seen in the context of how those events and any involvement of Mr Foster in them came to unfold before that period and their sequel after that period.

45    The payments of $20,000 and $180,000 respectively made by Dr Waters on 11 and 31 August 2009 to, as he recalled it, Satori Properties were, as evidence in the form of Westpac bank statements exhibited to an affidavit of the commission’s Mr Smith disclosed, credited to an account at that bank’s Bundall, Queensland branch in the name of William Duffy trading as Satori Properties. The bank’s postal address for this account was in the name of William Duffy at PO Box 6932 Gold Coast Mail Centre.

46    On and from mid-2010, Dr Waters became increasingly concerned about the SensaSlim business. Initially, this was a sequel to an inspection of the accounts of SensaSlim by Dr Waters and Mr Boyle and to their noting in this inspection of inflows and outflows from the main SensaSlim account.

47    During the winter of 2010 Mr Boyle and Dr Waters had a meeting with Mr Foster. Arabella was also present. Although Dr Waters could not recall the specific words used, he recalled (and I find) that during this conversation either Mr Boyle or he said to Mr Foster “KMB is concerned about the accounts. They need to do the quarterly BAS but don’t have any proper accounts” [KMB was a firm of accountants engaged by Mr Boyle after he became an investor in August 2009 for the purpose of managing the accounts of SensaSlim and preparing taxation and regulatory returns.] In response, Mr Foster “flew off the handle” (Dr Waters’ description, the accuracy of which I accept), yelling at Mr Boyle and Dr Waters words to this effect:

You’re attacking my integrity.

It doesn’t matter – we’re doing things my way.

It is under control. Don’t question what I’m doing. Leave it to me. It is my business.

This behaviour by Mr Foster had, I thought, an uncanny resemblance to behaviours of Mr Foster related by Mr Emerton when he came to question Mr Foster’s business method and by Mr Evans in relation to the possibility that persons might attend the product launch before payment in full for a franchise.

48    Also in mid-2010, inferentially at the same meeting, Mr Boyle said to Mr Foster: “The reference to UBS needs to be removed”. Mr Foster said: “Yes we’ll amend the document”.

49    Following this meeting, Mr Boyle expressed to Dr Waters that he wanted to get out of the SensaSlim business.

50    On a number of occasions, in or around September 2010, Dr Waters had a conversation with Mr Foster about Mr Emerton to the following effect:

Dr Waters said:    What are you doing about Emerton?

Mr Foster said:    Emerton is a crook and a lowlife. He is just extorting Mike.

I’ll get my friends from Melbourne involved.

I infer that the reference to “Mike” in this conversation was a reference by Mr Foster to Mr Boyle.

51    In or around September or October 2010 but after this conversation, Dr Waters met a Mr Mick Gatto and a Mr John Khoury at the Carrara house. Mr Foster later stated to Dr Waters words to the following effect, “The problem has been dealt with. Scott will leave Mike alone.”

52    Dr Waters was copied in to various emails which passed between Mr Boyle and Mr Foster (via the Peter O’Brien email address) in or about October 2010 on the subject of Mr Boyle’s withdrawal from investment and involvement with SensaSlim. He was thus aware, as was Mr Foster, of an increasing concern on the part of Mr Boyle as to a conflict of interest between his principal employment with UBS and his involvement with SensaSlim and a related desire on his part to divest himself of any interest in SensaSlim.

53    Also in or about October 2010, Dr Waters’ romantic friendship with Arabella ended. Inferentially, the concerns that Dr Waters by then had about the SensaSlim business and Mr Foster’s involvement in it and the fact that Arabella worked in that business contributed to his break up with Arabella.

54    On 10 November 2010, Dr Waters wrote to Mr Foster to advise him that he wanted nothing more to do with SensaSlim. He forwarded this email to Mr Boyle. A product launch of the SensaSlim product was due to occur later in November 2010.

55    In November 2010, prior to the launch, Dr Waters and Mr Boyle together went to the Carrara house to discuss Mr Boyle’s resignation from SensaSlim with Mr Foster. Mr Foster was there, together with Louise and a man introduced to Dr Waters as Richard Cooper. In the course of the conversation which followed, words to this effect were said:

Mr Boyle said:    “I need to resign from the company”.

Mr Foster said:    Hang in there. We’ll transfer the shares after the launch. We really need you for the launch. You can do what you want after that.

56    Just before the launch in November 2010, Dr Waters had a further conversation with Mr Foster in which words to the following effect were said:

Dr Waters said:     I’ve broken up with Arabella. Given what has happened recently, I want out of the business.

Mr Foster said:    Relationships are relationships and business is business.

This was the last conversation which Dr Waters and Mr Foster had before the launch about Dr Waters ceasing involvement with SensaSlim.

57    Though they had no further conversation on the subject before the launch, Dr Waters did send Mr Foster (at the William Duffy email address) the email of 23 November 2010 which I have set out above.

58    Dr Waters did not attend the SensaSlim product launch.

59    In December 2010, Dr Waters came to have the conversation over dinner with Mr Foster which I have set out above during the course of which he also had a brief telephone conversation with Louise.

60    At some point in December 2010, Mr Foster caused Dr Waters to be refunded about $200,000. Dr Waters came in 2011 to engage in email correspondence with Mr Cooper and Mr Reichelt about the placement of funds in off-shore accounts.

61    In or around mid-2011 and as a sequel to Mr Boyle’s informing him that he was to be the subject of what Mr Boyle put to him as a “section 155 examination” by the Commission, Dr Waters came to have a telephone conversation with Mr Foster in which the latter said words to this effect to him:

Tell him he is not to mention my name.

This isn’t child’s play; people will go missing.

Leave it with me.

62    What then of other evidence led by the Commission?

63    Linda-Jane Stainstreet came to work as a sales manager (and also a franchise area manager) for SensaSlim, that is SensaSlim Australia Pty Ltd, in the SensaSlim business from early May 2010 to November 2010. She is a middle-aged woman who holds a tertiary qualification in medical laboratory technology.

64    Over the decade prior to her taking up her position with SensaSlim, Ms Stainstreet followed a variety of employments - “sustainability assessor” for the Commonwealth government, sole trader in a distribution business and real estate agent. I found Ms Stainstreet to be a credible witness.

65    In particular, I thought that Ms Stainstreet’s confirmation in oral evidence that the voice on the Attard interview was one and the same as the voice of the “Peter O’Brien” with whom she had had frequent telephone contact while employed in the SensaSlim business was given definitely, frankly and honestly. Her evidence in this regard is relevant. It could rationally affect the existence of a fact in issue in these proceedings namely, whether or not Mr Foster was knowingly concerned as charged. Relevance is, first and foremost, the test, for it governs admissibility: s 55 of the Evidence Act; Smith v R (2001) 206 CLR 650 at [6]. This evidence is a species of voice recognition evidence and, in the circumstances of this case, is admissible: Bulejcik v The Queen (1996) 185 CLR 375 at 381-382; Neville v The Queen (2004) 145 A Crim R 108. It is evidence from a participant in material conversations as to what was, as heard and recollected, the voice of another participant in those conversations.

66    Ms Stainstreet’s opinion as to the identity of the other participant’s voice was not based on either training or study but rather gained by experience, the product of the frequent telephone contact mentioned. In the six month period from May to November 2010 when she ceased sales manager duty, Ms Stainstreet was in regular contact with the person she took to be “Peter O’Brien”. She spoke to that person at least twice a day, and for at least 5 to 10 minutes in each instance. Her recollection is that the “Peter O’Brien” to whom she spoke was interested to know what leads she had and what she thought of the people she had met and that he was very pleasant to talk to. That frequency of contact gave her a form of specialised knowledge of the “Peter O’Brien voice”.

67    There is a general risk with Ms Stainstreet’s evidence not just from her employment in the SensaSlim business but also from the fact that she came to sell SensaSlim franchises to her two best friends that it may not be reliable.

68    Further, there are risks that she has just come, because of Mr Foster’s notoriety, or because no other voice sample was offered to her, to associate the voice on the Attard interview with the “Peter O’Brien voice” which she frequently heard on the telephone. This type of evidence does call for careful scrutiny even where, as here, there is apparent certainty of identification in a witness’s evidence: Pitkin v R (1995) 130 ALR 35.

69    I have taken such risks into account in deciding to accept her evidence. Based on her evidence, I find that the person with whom she frequently spoke on the telephone and who was known to her as Peter O’Brien was in fact Mr Foster.

70    Ms Stainstreet related (and I find) that she came to invest and be employed in the SensaSlim business as a result of sighting an advertisement in The Courier Mail in April 2010. That advertisement canvassed interest in earning $4,000 per week amongst the over-50’s. In all likelihood, this advertisement was of the same kind that Dr Waters related seeing at the Southport Central apartment. The advertisement named a “Scott Waller” as a contact, specifying a mobile telephone number.

71    On 29 April 2010, having made an appointment by telephoning the nominated mobile telephone number, Ms Stainstreet met two men at a serviced apartment at Spring Hill. One of the men introduced himself to her as “Scott Waller”, the National Sales Manager of SensaSlim. The man who introduced himself to Ms Stainstreet was “Scott Waller” was, on the evidence, Mr Emerton. He, in turn, introduced the other man to her as Brendan Roach, a person starting out with SensaSlim. At the apartment, Ms Stainstreet was shown a SensaSlim promotional DVD, which ran for about 40 minutes. Messrs Emerton/Waller and Roach left the room while she watched this. When the DVD finished Mr Emerton/Waller returned to the room. He gave and then spoke to a number of documents which he handed to Ms Stainstreet:

(a)    a letter from KMB Business Advisers of 16 April 2010, generically addressed, “To whom it may concern” concerning the SensaSlim business in which, inter alios, it was stated that the business had been started by Michael Boyle in November 2009;

(b)    a letter from Robinson Legal (a firm of Sydney solicitors) of 24 March 2010, also generically addressed, “To whom it may concern” and also concerning the SensaSlim business. In that letter it was stated, inter alios, that the firm were the solicitors for SensaSlim Australia and that:

(i)    the firm held on file a copy of a distribution agreement between that company and SensaSlim International Limited (SensaSlim International) giving SensaSlim Australia exclusive distribution rights in Australia for 20 years commencing on 16 November 2009;

(ii)    the firm also held on file a copy of a letter from SensaSlim International of 19 March 2010 confirming that SensaSlim Australia had placed an order for 1.5 million units of the SensaSlim product for the first year with the initial order being for 500,000 units of that product;

(iii)    the firm held instructions that SensaSlim Australia was registered with the Therapeutic Goods Administration (TGA) and that the manufacturer for the SensaSlim product is “Good Manufacturing Compliant and is a licensed factory approved by the TGA;

(iv)    SensaSlim Australia had filed an application with IP Australia for the registration of the trade mark “SENSASLIM”.

(c)    an Area Manager Proposal;

(d)    a Disclosure Statement;

(e)    a “Frequently Asked Questions” explanatory document; and

(f)    copy of the Franchising Code of Conduct.

72    The Area Manager Proposal represented (pages 19 and 20) that:

(a)    SensaSlim had elected in late 2007 to conduct the world’s largest clinical trial before bringing the SensaSlim product to market in 2010; and

(b)    as a result of this trial, the SensaSlim product, is unquestionably the most effective weight loss product available in the world today”.

The SensaSlim promotional DVD as shown to Ms Stainstreet (and other prospective franchisees, as related below) contains like representations. As represented both in the Area Manager Proposal and in the promotional DVD, the SensaSlim product was an orally delivered spray to be administered before meals which controlled appetite and led to weight loss.

73    In the course of speaking to the documents described above Mr Emerton/Waller made particular reference to Mr Boyle and to the position which he also held with UBS. It was Ms Stainstreet’s later experience that Mr Boyle was “hardly involved in the business of SensaSlim at all”. Rather, based upon her observations in the roles which she came to assume as a sales consultant and franchisee, the “key players” in the day-to-day running of SensaSlim were Adam Adams, “Peter O’Brien”, and two administrative employees, Layla and Allie. Inferentially, based on Dr Waters’ evidence and that of Ms Stainstreet, the Layla to whom Ms Stainstreet refers was Ms Kenny and the “Allie” to whom she refers was Arabella. It is a highly improbable coincidence that there would have been two other such persons so named working in the SensaSlim business.

74    As to the person known to her as “Peter O’Brien”, Mr Emerton/Waller informed Ms Stainstreet towards the conclusion of the meeting on 29 April 2010 and after she had expressed interest in becoming a franchisee that he would get “Peter O’Brien” to telephone her so that she could discuss that subject further with him. Thereafter, Ms Stainstreet had a separate conversation with Mr Roach which it is not necessary to set out in detail. Suffice it to say, he canvassed with her the prospect of her additionally assuming a sales manager role in respect of the SensaSlim business.

75    That same evening, Ms Stainstreet received a call from a man who identified himself to her as Peter O’Brien. Based on her evidence, I find that it was Mr Foster, assuming the pseudonym “Peter O’Brien” who telephoned her. That finding also accords with Dr Waters’ description of roles undertaken by Mr Foster, as well as the use by Mr Foster in email correspondence with him of that name. It also accords, as will be seen, with the evidence given by Mr Emerton as to an approach to the selling of franchises adopted by him and by Mr Foster.

76    In the course of the telephone conversation on the evening of 29 April 2010, Mr Foster, using the pseudonym “Peter O’Brien”, claimed to be a director of SensaSlim. He and Ms Stainstreet had a general conservation about SensaSlim. Mr Foster said to her words to this effect:

“I’ve never been as excited about anything as I am about this opportunity.”

and

“This is all about giving back, it’s an opportunity to make a difference.”

During the conversation, an exchange in words to this effect occurred:

Mr Foster (as O’Brien) said:     “What do you think of Brendan?”[Inferentially, a reference to Mr Roach]

Ms Stainstreet said:    “He seems quite able”.

Also during this telephone conversation, Mr Foster said to Ms Stainstreet words to the effect: “I’d like to offer you a franchise and also a position as a sales manager”. To this she replied: “Thank you, I’ll take you up on both.” By that stage, she knew about the commission structure from reading the disclosure documents.

77    Overall, the impact of this telephone conversation on Ms Stainstreet was that she found the person known to her as Peter O’Brien to be “a very engaging person” with whom she “felt an instant rapport”. Her conversation with Mr Foster (O’Brien) confirmed a decision to which she was already inclined as a result of her dealings with Messrs Emerton/Waller and Roach earlier in the day, which was to invest in the SensaSlim business.

78    As a result of the conversations which she had with Mr Emerton/Waller and, by telephone, with Mr Foster on 29 April 2010 (and she cannot recall who of them it was mentioned the matter), Ms Stainstreet’s then understanding was that the SensaSlim product would be launched around 19 July 2010.

79    On 1 May 2010, Ms Stainstreet signed a SensaSlim Franchise Area Manager Agreement and paid a deposit. In so doing, she relied on the representations in the Area Manager Proposal, the Disclosure Document and the Frequently Asked Questions document, as well as representations separately made to her on 29 April 2010 by Mr Emerton/Waller and Mr Foster (O’Brien) respectively.

80    On 5 May 2010 and as a result of the separate offer of a sales manager position put to her by Mr Foster (as O’Brien) on the evening of 29 April 2010 (after it had initially been raised with her earlier that day by Mr Roach), Ms Stainstreet returned to the same serviced apartment in which she had met Messrs Emerton/Waller and Roach for training. There she met Mr Emerton/Waller. He demonstrated for her a couple of presentations to prospective customers and provided her with a list of “leads” (names and contact details of people who had expressed interest following seeing the same kind of newspaper advertisement in the paper to which she had responded) He also provided her with a complete sales manual to guide her in her presentations. Mr Emerton/Waller’s instruction also included (and this sales manual also specified) the direction that potential franchisees were to be provided with the like documents to those given to Ms Stainstreet on 29 April 2010 as well as the following further documents:

(a)    Retail Business Opportunities for Franchised Area document (Ms Stainstreet was instructed by Mr Emerton/Waller that potential franchisees were to be shown this at the presentation but only to get to keep a copy if they had signed up);

(b)    Price and Potency Document.

81    Also on 5 May 2010 Ms Stainstreet received an email from Mr Foster, using the alias Peter O’Brien and the Peter O’Brien email address. Attached to this email were maps and a summary of retail outlets for Cairns and Townsville. In the email, Mr Foster wished her luck and concluded, “Let me know if I can help with any of your clients - I am only ever a phone call away.” Neither the timing nor the content of this email was, I find, coincidental. Mr Foster was, inferentially, well aware that Ms Stainstreet was being trained by Mr Emerton/Waller that day to the end of being about to embark upon SensaSlim franchise sales duty. Following her training on 5 May 2010 and her receipt of the email from Mr Foster, Ms Stainstreet began to travel extensively selling franchises on behalf of SensaSlim.

82    Employment arrangements with SensaSlim in relation to Ms Stainstreet’s sales manager position with the company came to be formalised by way of a proposal put to her by Mr Boyle by an email to her of 6 June 2010 (copied by him to the Peter O’Brien email address, and thus to Mr Foster) and then by way of an email from Mr Foster, using the Peter O’Brien alias and email address of 8 June 2010.

83    During her time as a sale manager for SensaSlim, Ms Stainstreet sold around 20 SensaSlim franchises in Queensland and Victoria. These included the sale of franchises to each of her brother and her two best friends, Andre Buck and Chris Shearer.

84    During the course of her involvement with SensaSlim, Ms Stainstreet received weekly newsletters by email. Copies of these emailed newsletters are in evidence as identified by Ms Stainstreet. There are 45 such newsletters, each consecutively numbered, covering a period from 1 July 2010 (Newsletter No 1) to 20 May 2011 (Newsletter No 45). The newsletters included Newsletter No 5 of 30 July 2010, Newsletter No 7 of 13 August 2010 and Newsletter No 8 of 20 August 2010.

85    Ms Stainstreet recalls and the fact is that the SensaSlim product launch did not occur in July 2010. In that month, Ms Stainstreet had a telephone conversation to the following effect with Mr Foster (then known to her as Peter O’Brien) concerning the product launch:

Ms Stainstreet said:    “Areas managers want to know when the launch is going to be”.

Mr Foster (using the O’Brien alias) said:    “We are having trouble flying liquids out of China because of the expo and limitations placed on the transport of liquids by air freight so it will be delayed until August”.

86    Later in July 2010, Ms Stainstreet had a further telephone conversation with Mr Foster (then known to her as Peter O’Brien) in which Mr Foster said words to the following effect to her:

“We have some exciting news and we have now decided to manufacture the product in Australia”.

In the course of this telephone conversation they also had a general discussion about why the product was now going to be manufactured in Australia with Mr Foster offering her an explanation in words to this effect:

There were problems manufacturing in China and we were better off manufacturing it here in Australia. Then we won’t get held up by customs, and won’t have to worry about it having to be manufactured by one of the three Chinese factories that has TGA approval to Ferngrove.

87    In mid October 2010, Ms Stainstreet had a telephone discussion with Mr Foster (then known to her as Peter O’Brien) to the following effect:

Ms Stainstreet said:    “It will be beneficial if we have the Area Managers Conference so that the Area Managers have a 2 week window in which to supply the retail outlets before the national launch. This will have to be in November in order to approach retailers before Christmas”.

Mr Foster said:    “That’s a good idea.”

88    In November 2010, prior to the launch, Ms Stainstreet had a telephone conversation with Mr Foster (then known to her as Peter O’Brien), to the following effect:

Ms Stainstreet said:    “We should fly a small group of area managers down to the factory to see it all in production so we can satisfy other area managers enquiries in order that the seminar runs smoothly”.

Mr Foster said:    “That’s a really good idea, we should do that.”

Despite several follow up phone calls from Ms Stainstreet to Mr Foster (O’Brien) and Adam Adams the trip to the factory (which by then Ms Stainstreet understood to be Ferngrove Pharmaceuticals factory in South Granville) never eventuated. By November 2010, Ms Stainstreet had stopped selling SensaSlim franchises. She did this because she was concerned about the length of time away from her daughter that this duty entailed.

89    On 29 and 30 November 2010 Ms Stainstreet attended the launch of SensaSlim at the Palazzo Versace on the Gold Coast. She had dinner there (I infer on the evening of the 29th) with her brother and the friends, Andre Buck and Chris Shearer, to each of whom she had sold franchise areas. Also having dinner there at the same time, but at a different table, were Adam Adams, Richard Cooper from SensaSlim International and Robin Reichelt, each of whom she had by then come to know. Her understanding was that Mr Cooper and Mr Reichelt had come from the United Kingdom for the launch.

90    At the launch, Ms Stainstreet briefly introduced herself to Michael Boyle. She did not there meet anyone called “Peter O’Brien” although she did see a man resembling a man who had been described in a SensaSlim photo as “Peter O’Brien”. She exhibits a copy of that photo to her affidavit evidence in chief. The photo is not captioned. There are two men depicted in it, neither of whom is Mr Foster. Although by then she had spoken by telephone with the person she understood to be “Peter O’Brien” (in reality Mr Foster) many times Ms Stainstreet had yet to meet that person and wanted to. She hoped to do this at the launch. At the launch, she telephoned the number with whom she customarily made contact with “Peter O’Brien”. That person (in fact Mr Foster), said to her words to the effect: “I am busy in negotiations with Oprah’s people”.

91    Ms Stainstreet recalls and I find that Messrs Adams, Cooper and Reichelt were present at the launch. The launch did not entail what Ms Stainstreet describes as a “meet and greet” (which I understood to mean there was nothing in the nature of a receiving line or a round of introductions in which delegates on arrival were individually met by and introduced to senior SensaSlim or SensaSlim International officers). Instead, Mr Boyle gave a general welcome speech and announced the promotion of Mr Adams to General Manager. This limited role played by Mr Boyle and the handover to Mr Adams accords with Mr Foster’s entreaty of Mr Boyle in Dr Waters’ presence earlier that month to “Hang in there” until the launch.

92    On 1 December 2010, Ms Stainstreet sent by facsimile to Brenda Bishop of KMB Business Advisors a payment authority for the balance of the monies she owed under the Area Manager Agreement. The following month, she received 20 cartons of the SensaSlim spray but decided not to place any stock with retailers until the start of a promised advertising programme. In the result, that advertising never eventuated. In our about January 2011, Ms Stainstreet had a further telephone conversation with the person she knew as Peter O’Brien (in reality, Mr Foster). That was a sequel to a conversation which she had had with another SensaSlim franchisee, Mr Jim Evans. Her telephone conversation with Mr Foster included an exchange to this effect:

Ms Stainstreet said:    “Peter, Jim [a reference to a Jim Evans, another SensaSlim franchise holder and sales manager] spoke to someone who had a product called Slimmist and said it’s the same as SensaSlim.”

Mr Foster said:    “That’s not true. We have come across this before. There is no connection between Slimmist and SensaSlim.”

93    In early March 2011 Ms Stainstreet handed her franchise to another area manager to run and, in her words, “just walked away from the business”. Since then and save for what I infer were casual conversations with a number of area managers, she has not been in contact with anyone from SensaSlim Australia or SensaSlim International. Having been shown a copy of the orders made by Lander J on 2 September 2005, she confirmed in her evidence that at no stage prior to or during her involvement with SensaSlim had she ever been provided with a copy of these orders by any representative of SensaSlim or by any other person.

94    The “Jim Evans” mentioned by Ms Stainstreet in her evidence is Mr James Walter Evans who also gave evidence in the proceedings both by affidavit and orally. Mr Evans is a middle aged man who came to work both as a sales manager (from June to November 2010) for Sensaslim in a role akin to that of Ms Stainstreet and then (December 2010 to April/May 2011) as the area manager of a SensaSlim franchise.

95    Mr Evans, also, was drawn initially to SensaSlim by the same kind of advertisement which had interested Ms Stainstreet. In late April 2010, having responded to the advertisement by telephoning the number it specified, Mr Evans and his wife came to an apartment in central Brisbane. Initially, they met there a gentleman whose name Mr Evans only recalled as “John”. He showed them the like promotional video in respect of SensaSlim and its product and then went through with them the same documentation as had been shown to Ms Stainstreet. Toward the end of this meeting, Mr Emerton came to the apartment and, using the alias “Scott Waller”, introduced himself to Mr Evans and his wife. Mr Evans made no commitment to take up a franchise at this initial meeting.

96    On 1 May 2010 Mr Evans received a follow up telephone call from Mr Emerton (who used the alias Scott Waller). In the course of this call Mr Evans expressed dissatisfaction with the manner in which “John” had conducted the initial presentation. Mr Emerton’s response was to “Leave it with me”. Mr Evans’ recollection is and I find that, “almost immediately” thereafter he received a telephone call from a “Peter O’Brien” who introduced himself as the director of SensaSlim Australia with the conversation then including an exchange to the following effect:

“Peter O’Brien” said: Sorry about John. We’ll get rid of him, but what do you think about the business?

Mr Evans said: “I was quite encouraged. There is a lot of potential I think and I have lots of things to sort out.”

97    This was the first of what proved to be many, many telephone conversations between Mr Evans and “Peter O’Brien”. That was, particularly, because Mr Evans came to take up a sales manager position with SensaSlim and also because he came to take up a SensaSlim franchise and to attend the SensaSlim launch at the Palazzo Versace on the Gold Coast in November 2010. Later, in February 2011, Mr Evans was prompted to access the Attard interview. He related in evidence that, “As soon as he [Mr Foster] spoke, I was 100% positive it was the voice I had spoken to numerous times, the person I knew as Peter O’Brien”. In respect of Mr Foster’s voice as evidenced in the Attard interview, Mr Evans pointed to “pitch, tone and inflection and the way he pauses and says ‘uh’” as defining characteristics of his voice. I took from his adamant expression of opinion in relation to Mr Foster’s voice being one and the same as that of the person he knew as “Peter O’Brien” that Mr Evans detected these same characteristics in the “O’Brien” voice. For like reasons to those given in respect of Ms Stainstreet’s evidence, I am satisfied that Mr Evans is entitled to express the opinion that Mr Foster’s voice as exemplified in the Attard interview is one and the same as the “Peter O’Brien” voice so well known to him.

98    It was put to Mr Evans in the course of his cross-examination that he was mistaken in this conclusion but he was adamant that this was not so. He further stated that he had played the Attard interview many times. Mr Evans, like Ms Stainstreet, was not a disinterested observer. He, too, was a disappointed franchisee and he, too, had actively engaged in the promotion and sale of SensaSlim franchises which had proved a disappointment to others. I have expressly taken these considerations into account as well as the possibility that he has genuinely come to believe that the two voices are the same because of a notoriety surrounding Mr Foster. The end result though, as a result of an impression formed at the time when observing him under cross-examination and which, on reflection, I still hold, is a conclusion that Mr Evans was genuinely trying hard to give accurate evidence. That is the overall impression I formed of him as a witness. I accept his evidence generally. More particularly, the “Peter O’Brien” with whom he repeatedly spoke in the course of deciding whether to take up a SensaSlim franchise and thereafter was, as he stated, Mr Foster.

99    Mr Evans’ conversation with, as I find, Mr Foster (using the alias Peter O’Brien) on 1 May 2010 concluded with an inquiry made by Mr Evans of the person he took to be Peter O’Brien as to which franchise areas were still available. To this Mr Foster responded, “I’ll email them to you.” Shortly thereafter and not, I find coincidentally, Mr Evans received on 1 May 2010 at the email addressed by him and his wife an email from the Peter O’Brien email address stating the following, “Please find attached the maps and summary of outlets for Area 3.” This is a franchise area entitled “North Lakes” encompassing bay side and other areas to Brisbane’s immediate north. The addressing, timing and content of the email is such that it could only have been responsive to the request made of Mr Foster by Mr Evans. That plus the use of the Peter O’Brien email address, so often used by Mr Foster in his communications with Dr Waters, leaves me in no doubt that Mr Foster was the author of this email.

100    This email and the preceding telephone conversation with Mr Evans are a useful example of the intimacy of Mr Foster’s association with the SensaSlim business, his deliberate use of an alias to camouflage that involvement and the keenness of his interest in promoting the sale of franchises and in the related receipt of sale proceeds.

101    After 1 May 2010, Mr Evans received follow up telephone calls from, I find, Mr Foster, using the alias Peter O’Brien, canvassing whether or not he wanted to take up a SensaSlim franchise. In one of these Mr Foster stated to Mr Evans that he would, “get an area manager who also has a scientific background to give you a call”. It was as a result of this that Mr Evans came in early May 2010 to meet Ms Stainstreet, newly trained and appointed as a sales manager and who had just acquired a SensaSlim franchise area. She also gave him a presentation in relation to SensaSlim. After further dealings by telephone with Mr Foster (using the Peter O’Brien alias) and, in person, with Mr Emerton (as Scott Waller), Mr Evans came on 12 May 2010 to sign up for a SensaSlim franchise (Bulimba area in the result) and to pay an initial deposit via his credit card. He paid the balance of the deposit, again via his credit card, on 17 May 2010. The approval for him to pay the deposit in two instalments was given to him by Mr Foster by telephone (using the Peter O’Brien alias).

102    By 12 May 2010, Mr Evans was “so convinced” about the SensaSlim product and business that he raised with Mr Emerton (Waller) at the time of signing the franchise acquisition agreement the possibility of his becoming a sales manager. He had by then become aware that there were many areas available for sale and encountered Ms Stainstreet in her sales manager role. Mr Emerton told Mr Evans that he would “speak with Peter about it”.

103    Thereafter, in May 2010, Mr Evans had many telephone conversations with Mr Foster (Peter O’Brien to him) on that subject. Later, in May 2010, he came to take up such a position with SensaSlim with Ms Stainstreet undertaking his training in Brisbane. The following month, he and Ms Stainstreet flew to Melbourne following up those who had responded to newspaper advertisements of the kind that had drawn each of them to make a telephone inquiry. Mr Evans recalls, and I find, that it was his practice most days while undertaking sales manager duty to telephone Peter O’Brien (then unbeknown to him, Mr Foster) to update him as to how sales were going. He recalls that Peter O’Brien (i.e. Mr Foster) made a point on several occasions that he should create a sense of urgency in relation to sales, “If you take it away from them, they’ll want it more.” Mr Evans also illustrated this preference by Peter O’Brien (ie Mr Foster) for a promotion of a sense of urgency by referring to emails sent from the Peter O’Brien email address to one Mark Lim on 27 August 2010 and copied to Mr Evans email address. In an email to Mr Lim, “Peter” (beyond doubt in the circumstances Mr Foster) states, “Mark, we have applications in on several areas …”. Reading the email exchange, I thought that Mr Evans’ illustration was apt.

104    Over the course of his time as a sales manager for SensaSlim Mr Evans came to travel to Sydney (with Mr Emerton) and also to South Australia selling and promoting the sale of SensaSlim franchises. All the while, he kept in daily telephone contact with the person he knew as Peter O’Brien (in reality, Mr Foster). For this purpose he used the following telephone numbers to contact Mr Foster on a variety of mobile telephone numbers.

105    In early November 2010, Mr Evans contacted “Mr O’Brien” (Mr Foster) by telephone to pass on to him that some area managers (franchisees), “wanted to see the product”. He also put to “Mr O’Brien” the suggestion that area managers pay the balance of monies owing in respect of franchises after the launch. He recalls that “Mr O’Brien” (Mr Foster) “blew his top” at this suggestion, stating, “No way. Everybody will have to pay before they can go inside.” I infer from this that Mr Foster’s intention was that the balance of monies owed in respect of area franchises had to be paid before those managers would be permitted to attend the launch of the SensaSlim product on the Gold Coast in November 2010. This was another pressurising technique adopted by him to garner in funds.

106    Shortly after this telephone conversation Mr Evans received by email from the person he understood to be “Mr O’Brien” a copy of what was said to be his passport photo and also a copy of a photo depicting two men, one standing; the other seated with a computer screen in the background with the SensaSlim logo and what appear to be bottled SensaSlim products near the screen. One of the men was said to be Mr O’Brien and the other Adam Adams. The latter is the same photo which was sent to Ms Stainstreet.

107    It is desirable here to interpolate that a copy of this same photo was shown to Mr Edward John Hansen, a self-employed computer technician who has known Mr Foster since the 1980’s. Since about 2007 and in the course of his business he has provided computer related services to Mr Foster and to his family, including his mother. Mr Hansen gave both affidavit and oral evidence. I thought that he gave honest, reliable evidence about events which had occurred and observations which he had made in the course of his business. His evidence concerned computers which he had supplied and installed at Mr Foster’s request at particular locations I shall shortly relate as well as persons present at those locations.

108    At the Norseman Court house in either late April or early May 2010 Mr Hansen was introduced to Mr Adam Adams and informed by Mr Foster that he was the General Manager of SensaSlim. Mr Hansen was attending there, as he had the previous year, to provide various computer related services at the request of Mr Foster. In his evidence, Mr Hansen identified and I find that the person standing in the photo to be and is Adam Adams. Moreover, Mr Hansen, who had every reason based on attendances in the course of his business to be familiar with the location, identified its background. He recognised “from the blinds, desk, lights and lamp” that, “the photo was taken in Peter Foster’s office at the main property at [the Carrara House]. Mr Hansen had been in this room 3 or 4 times to speak with Mr Foster. He recalled it “as an office as it is where Peter Foster appeared to be working, kept his desk, computers, some files and papers”. Moreover, Mr Hansen identified in the photo the two “Viewsconic” screens which he had supplied to Mr Foster in August 2009 (Invoice 49331 from Best Computers of 27 August 2009 refers) and which were originally placed in the Norseman Court House. He also recalled that there was another desk in this office at which Mr Adams kept his computer.

109    Mr Hansen supplied computers, other equipment and related services at Mr Foster’s request at the Norseman Court house, the Carrara house and the apartment at Southport Central. Exhibited to his affidavit evidence in chief are three invoices directed to SensaSlim (in March, April and June 2010). He does not place Mr Foster as the author of any direction to make invoices out to SensaSlim. In one instance, he recalls that such an instruction came from a lady at the Southport Central apartment. I found Mr Hansen’s evidence corroborative of Dr Waters’ evidence as to the three venues where he had observed SensaSlim related activity, of Mr Foster’s presence at the Norseman Court house and the Carrara house for business purposes and also telling, via his observation of Mr Foster’s sharing an office with Mr Adams, that Mr Foster was not, as he claimed, just an occasional, informal adviser to a business run by others. Mr Hansen’s evidence also corroborated the evidence given by Mr Emerton of the SensaSlim business use of the Norseman Court house and later also of the Southport Central apartment and of Mr Foster’s presence at the Norseman court house during that business use.

110    I return now to Mr Evans’ evidence. He was another attendee at the SensaSlim launch at the Palazzo Versace on the Gold Coast in November 2010. To his disappointment, he did not meet Mr O’Brien there and expressed that in an email of 1 December 2010 to the Peter O’Brien email address. A response of that same date came to him from that email address. The email response makes reference to a “very busy day” in which “Mike (inferentially intended to be understood as a reference to Michael Boyle) and I worked upstairs most of the day on giving the Oprah people all the comfort and reassurances they need”. The reference to “Oprah” (inferentially intended to be understood as a reference to the American talk show hostess, Oprah Winfrey) in this email was not coincidental. It corresponds, precisely, with the reason for absence from the launch given by Mr Foster (using the Peter O’Brien alias) to Ms Stainstreet in the course of a telephone conversation related above. Based on this correspondence and his general use of the Peter O’Brien email address, I find that this email, too, came from Mr Foster.

111    Mr Evans received SensaSlim product in January 2011. This confirms that, by this time, SensaSlim had caused the much delayed manufacturing of product to occur. Inferentially from the evidence as to the product launch at the Versace and from Ms Stainstreet’s reference to her receipt of SensaSlim product in December 2010, some product had been manufactured and distributed to some franchisees by late 2010 but this initial product distribution to franchisees continued into early the following year.

112    Mr Evans placed SensaSlim product at retail outlets in his franchise area. The returns were not as he expected. It is not my task to determine whether he was misled as to likely returns. That he was disappointed in the returns and is also, as he said, owed commission money by SensaSlim in respect of his sales manager activities and is thus now an unsecured creditor in the liquidation are, however, factors which I have taken into account in assessing his credibility.

113    Mr Evans was another who, as an area manager, received by email the SensaSlim newsletters covering a period from 1 July 2010 (Newsletter No 1) to 20 May 2011 (Newsletter No 45). Like Ms Stainstreet, he confirmed in his evidence that at no stage prior to or during his involvement with SensaSlim had he ever been provided with a copy of the orders made by on 2 September 2005 Lander J by any representative of SensaSlim or by any other person. He did so after a copy of those orders was shown to him for the purpose of his giving affidavit evidence in chief.

114    Another who responded to the same kind of advertisement as had Ms Stainstreet was Michael Shaun Driscoll. Mr Driscoll gave affidavit evidence and also oral evidence. His initial information concerning a SensaSlim franchise was provided in Brisbane by Ms Stainstreet (in her newly assumed sales manager role) on 25 May 2010. She provided him with the same suite of documents as she herself had received not long earlier (as related by me above). In June 2010 Mr Driscoll completed an online application for a SensaSlim franchise area. He recalled that the application process included seeking his response as to whether he would like a telephone call from a director of SensaSlim and nomination of a time for that purpose. Mr Driscoll requested such a telephone call. On 9 June 2010 Mr Driscoll received a telephone call from a person who identified himself as “Peter O’Brien”. This was the first of what Mr Driscoll recalled were a number of telephone conversations which he had with the same person of this name. In the initial telephone conversation, Mr O’Brien inquired of Mr Driscoll whether or not he had made a decision concerning taking up a franchise and, upon being told by him that he was “still checking things out” replied that he “thought the same” and that “When Michael Boyle came to see me I was very sceptical.” The person called O’Brien went on to for some 30 minutes to relate his experience and impressions of SensaSlim. On 28 June 2010 Mr Driscoll came to sign up an area manager agreement with SensaSlim and to pay his deposit of $29,975.00. Mr Driscoll worked as a SensaSlim area manager from August 2010 to May 2011.

115    Mr Driscoll, too, attended the SensaSlim launch at the Palazzo Versace on the Gold Coast in November 2010. He met there Adam Adams but neither Mr Boyle nor Mr O’Brien. Mr Driscoll did not mention any introduction of Mr Adams by Mr Boyle at the outset of the launch but does recall a statement made by Mr Adams after morning tea that, “Michael Boyle and Peter O’Brien have flown back to Sydney to meet the PR people for Oprah”. I did not find it surprising or a cause for disbelief of their evidence that different attendees at this launch had slightly different recollections as to events. There was much that was consistent, e.g. the use of overseas trips as prizes, payment of the balance of monies owing before entry permitted and, most significantly, an inability to speak personally and face to face with Mr “Peter O’Brien”.

116    Mr Driscoll also received SensaSlim newsletters sent to area managers (in his case, Nos 4 to 48, covering the period 23 July 2010 to 24 June 2011). Having been made aware of the same by being shown a copy, he too, confirmed in his evidence that at no stage prior to or during his involvement with SensaSlim had he ever been provided with a copy of the orders made by Lander J on 2 September 2005 by any representative of SensaSlim or by any other person.

117    By mid-April 2011, Mr Driscoll had become sceptical about SensaSlim and its business. The following month he received from Ms Stainstreet via email a link to the Attard interview with the suggestion “listen to this and you will be surprised”. He did so and recognised Mr Foster’s voice in that ABC interview as one and the same as the “Peter O’Brien” voice which he had heard so many times by telephone. He reached this same conclusion having listened to the Attard interview again for the purposes of giving evidence in chief by affidavit. In the course of his oral evidence Mr Driscoll was closely cross-examined about both the occasion of his listening to the Attard interview for the purpose of giving his affidavit as well as the accuracy of his opinion. I thought that Mr Driscoll gave careful and reflective attention to the evidence which he gave under cross-examination, especially in relation to these subjects. He readily acknowledged that the Commission had not supplied him with a range of voices to consider. He was very definite in his answer that he was not mistaken as to Mr Foster’s voice on the Attard interview being one and the same as that of the person known to him as “Peter O’Brien”.

118    Mr Driscoll is another who might aptly be termed a disappointed SensaSlim investor. I have taken this into account as well as the possibility that his answers, which I thought were honestly given, might nonetheless be the product of coming to believe that the voice was Mr Foster’s as a result of the way the question of identification was both initially and then by the Commission put to him. In the result though, the impression which I formed of Mr Driscoll was not just that his evidence was honest but also that it was reliable. He related having two telephone conversations of up to 30 minutes with “O’Brien (the initial one and Mr Driscoll related another in April 2011), four or five telephone conversations of about 10 minutes in length and a number of others. This was sufficient, in my view, to give substance to his opinion that “O’Brien” had a distinctive voice and one which was the same as that as Mr Foster in the Attard interview. Mr Driscoll was therefore another with whom Mr Foster spoke both to encourage them to take up a SensaSlim franchise and also then to encourage their ongoing participation in SensaSlim’s business.

119    One further aspect of Mr Driscoll’s evidence requires comment. Mr Driscoll related that, upon his request by telephone of “Peter O’Brien” (in reality and unknown to him at the time, Mr Foster, I find), he had come on 12 May 2011 to meet a person by that name at a lunch on the Gold Coast also attended by Adam Adams, a Mr Norm Covich (said to be an old friend of “O’Brien”, a solicitor, Mr Jeff Horsey, acting for “O’Brien” and Mr Darren Bubb (known to him as SensaSlim’s national sales manager). Mr Driscoll’s exchange of conversation at this meeting with “O’Brien” was very brief, nothing more than an exchange of greetings. He was not asked in evidence at all about whether the person he met that day called “O’Brien” was the same as a person depicted in the photo taken in the office or, for that matter, the same as the man interviewed by Ms Attard. Much less was he shown a photoboard containing a photo of Mr Foster and others randomly selected and asked whether the man “O’Brien” he met that day appeared on such a compilation. Further, his reference to “conversations described above (affidavit, para 40) in his identification of the O’Brien voice with which he was familiar as that of Mr Foster was not, as I read and understood the same, intended to be a reference also to the very brief conversation he and had on 12 May 2011 with “O’Brien”. It is therefore no part of the conclusions I draw from Mr Driscoll’s evidence that Mr Foster was present at the lunch on 12 May 2011.

120    Another who came to take up a SensaSlim franchise and who gave affidavit and, briefly, oral evidence was Stephen John Cook. He, too, responded to an advertisement of the kind which had attracted the interest of Ms Stainstreet and others. As a result, he came to telephone and then, on 27 August 2010, to meet with a person who introduced Mr Scott Waller (unquestionably on the evidence, Mr Emerton). At this meeting, Mr Cook was shown the same DVD presentation concerning SensaSlim and given the same documentation as had Ms Stainstreet been. An offer to telephone a director of SensaSlim was also extended to him. On 31 August 2010 Mr Cook received a telephone call from a person who introduced himself as “Peter O’Brien” and who mentioned that he was telephoning about SensaSlim and that he had spoke with “Scott” (inferentially, a reference to “Scott Waller”/Emerton and intended to be understood as such by Mr Cook).

121    Mr Cook did not venture an opinion that the person with whom he spoke by telephone that day was Mr Foster. This was the only occasion when Mr Cook spoke with “O’Brien”. On 10 and 11 February 2011, by which time he had become disillusioned with SensaSlim and wanted to have his franchise bought back from the company, he exchanged emails with “Peter O’Brien” at the Peter O’Brien email address. This apart, Mr Cook dealt with Adam Adams and Michael Boyle after he came on 2 September 2010 in another meeting with “Scott Waller” (Emerton) to take up and pay a deposit for a SensaSlim area franchise. He also dealt by telephone with “Ally” (inferentially, Arabella) in relation to product orders.

122    The contents of the telephone conversation which Mr Cook relates he had with “Peter O’Brien” disclose the employment of a technique of stating that a desired franchise area [Lane Cove in Mr Cook’s case] had gone but that other Sydney areas were available. Further, the call from “Peter O’Brien” followed the initial contact with Mr Cook as a prospective franchisee by “Mr Waller” (Emerton). There is a circumstantial inference, having regard to Mr Emerton’s evidence and to the employment of a similar sales technique and a telephone call as a sequel to an initial interview on occasions when Mr Foster’s voice has been identified by others who became franchisees that it was Mr Foster was the “Peter O’Brien” with whom Mr Cook spoke. I am not in any doubt about the drawing of that inference in this instance. The use of the Peter O’Brien email address and the very nature and tone of the language employed by the author of the emails from that address does not, on the whole of the evidence, leave me in any doubt that it was Mr Foster who authored the emails to Mr Cook.

123    Mr Cook attended the SensaSlim launch at the Palazzo Versace on the Gold Coast. He states that he arrived and checked in at the Palazzo Versace on 30 November 2010 and that the launch occurred on 1 December 2010. Others place the launch as having occurred on 30 November. I did not regard this discrepancy as detracting from the overall reliability of Mr Cook’s evidence. By early in the new year, as a result of the non-arrival of the sales DVD and other materials promised in a newsletter Mr Cook came to be concerned about SensaSlim. In January he had occasion to follow up a product order he had placed but not received. These experiences prompted him to make further inquiries about SensaSlim and it was these that disillusioned him with the company and prompted his seeking to terminate his franchise by having SensaSlim buy it back. It was in the latter context that Mr Cook exchanged emails with “Peter O’Brien” or, as I conclude, Mr Foster at the Peter O’Brien email address.

124    Mr Cook received by email SensaSlim weekly newsletters between 17 September 2010 (Newsletter 12) and 27 May 2011 (Newsletter 46). He also received by email on 17 September 2010 those weekly newsletters which had issued prior to his becoming an area manager (Nos 1 to 11 inclusive). He ceased operating his SensaSlim franchise in May 2011. After having sighted them for the purpose of his giving evidence, Mr Cook, too, confirmed that at no stage prior to or during his involvement with SensaSlim had he ever been provided with a copy of the orders made on 2 September 2005 by Lander J by any representative of SensaSlim or by any other person.

125    Yet another who came to take up a SensaSlim area franchise who gave affidavit and (briefly) oral evidence in the Commission’s case was Jeremy Rohan Dhamaratne. In the case of Mr Dhamaratne, his interest may be traced to his being shown by his father in July 2010 a copy of an advertisement that had attracted the interest of Ms Stainstreet and others mentioned above. This led to his meeting in late July or early August 2010 at Parramatta a person known to him as Scott Waller (in reality, I find, Mr Emerton). At this meeting he was shown the promotional DVD as well as taken through various documents giving information about SensaSlim and its product. Via Mr Waller, Mr Dhamaratne was, at his request, put in touch with existing SensaSlim franchisees prior to his making any decision as to whether to acquire a franchise himself. As it happened, one of those with whom he was put in touch and spoke was Ms Stainstreet. Thereafter, on 2 September 2010 Mr Dhamaratne returned to another meeting at Parramatta with “Mr Waller” (again, in fact, Emerton). Here, he signed an agreement for an area franchise and paid the deposit (half the price in fact, $29,975.00) for a franchise. Mr Dhamaratne stated and I find that he was not, either prior to or during his involvement with SensaSlim ever been provided with a copy of the orders made on 2 September 2005 by Lander J by any representative of SensaSlim or by any other person. A few days after singing up for a SensaSlim franchise, Mr Dhamaratne recalls receiving a congratulatory telephone call from a “Peter O’Brien”. It is not possible, on the strength of this brief reference to conclude that the caller was in fact Mr Foster. Mr Dhamaratne did not claim in his evidence that it was. He attended the launch at the Palazzo Versace on the Gold Coast in November 2010 but did not claim to have met Mr Foster there. In June 2011, having become by then I infer disillusioned with SensaSlim, Mr Dhamaratne transferred his franchise interest to his father and brother-in-law for the purpose of their attending creditors’ meetings and thereafter ceased to have any involvement with the company.

126    Mr Dhamaratne’s affidavit evidence in chief, like that of other witnesses called in the Commission’s case, contains an expression of opinion, sourced in hearsay, sourced and unsourced, as to a supposed involvement by Mr Foster in SensaSlim. I make it plain that I do not regard this as admissible and deprecate its inclusion. I have completely disregarded it and other statements of opinion like it in reaching conclusions as to Mr Foster’s involvement with SensaSlim.

127    Another witness called by the Commission who gave both affidavit and oral evidence was Mr Peter Anthony Frare. Mr Frare is, in terms of preferential employment, a freelance camera-man who, over a lengthy career in the television industry has also gained skill and experience in other film production tasks such as editing, and sound recording. It is necessary to put matters that way because, since his decision to quit Sydney to move to the New South Wales north coast in 2005, he has found only episodic freelance work in television and film production and had to work as a nursery labourer to support himself.

128    On 10 December 2009, as a result of an initial contact made of him by a longstanding television industry work colleague, Ms Tracey Hannaford, and follow up dealings with Ms Hannaford’s partner, Mr Kevin McMullan, Mr Frare was introduced to Mr Foster at the same restaurant, Mavis’ Kitchen at Uki in northern New South Wales, the same venue as used by Mr Foster for discussions, related above, in August 2009. Also present at the meeting was another longstanding television industry colleague of Mr Frare’s, Mr Richard Woolley.

129    Mr Frare related in his evidence his subsequent dealings with Mr Foster in relation to the production of a promotional video for the SensaSlim product from newly filmed and existing material. The answers which Mr Frare gave in his oral evidence were, I thought, direct, spontaneous and thoughtful. I also thought that he had a good memory of the events which he related and that he was a reliable historian. I have no hesitation in accepting his evidence.

130    I should also emphasise that, though I have chosen to relate Mr Frare’s evidence at this point in these reasons for judgment, the events which he described occurred before the appearance of advertisements, as seen by Ms Stainstreet and others, relating to what proved to be SensaSlim franchises. I have found it very instructive, in terms of reaching conclusions as to the credibility of other witnesses called in the Commission’s case and of those called in the defence case, to view the evidence of these witnesses through the prism of the dealings which Mr Frare especially, but also Mr Woolley and Mr Hansen, related having with Mr Foster. It is important to recall that both Mr Frare, Mr Woolley and Mr Hansen were not investors in SensaSlim or one of its franchises but third party contractors. One feature which emerges strongly from their evidence is that the Norseman Court house was an initial base of operations for the SensaSlim business and that Mr Foster was the person in operational control at that base of operations. These two themes, related at greater length and in greater detail because of his greater length and intimacy of association, also formed part of Dr Waters’ evidence and that of Mr Emerton. The corroboration thus offered of his evidence was another factor which influenced me in deciding to accept his evidence.

131    At the December 2009 meeting at Mavis’s Kitchen it was Mr Foster who gave Mr Frare a copy of the proposed shooting script. Mr Foster also pointed out to Mr Frare those parts of the script that referred to pre-existing film material. Mr Foster showed Mr Frare that material on a lap top computer which Mr Foster had brought to the meeting. In so doing, he remarked:

“I want this part of the script to look like this part of the DVD I’m showing you.”

The script shown to Mr Frare that day by Mr Foster concerned the SensaSlim product. Both Mr Frare and Mr Woolley spent time reading and discussing the script at the Mavis’s Kitchen location. They had brought camera and recording equipment with them in anticipation.

132    The Mavis’s Kitchen site includes accommodation cabins, as well as a restaurant. Having read and discussed the script, Messrs Frare and Woolley walked around the site scouting locations for shooting scripted segments for the video. They shot some segments at the property with scripted roles being performed by yet others persons, not engaged by them, who were present already at the site in anticipation of shooting. Inferentially, the attendance of these persons had been arranged either by or at least with the knowledge of Mr Foster. Shooting occurred at the site during both the morning and the afternoon, interrupted by some shooting at a chemist shop at Murwillumbah during the middle of the day. Mr McMullan, but not Mr Foster, accompanied Messrs Frare and Woolley to that location for that shoot. Inferentially, Mr Foster remained at the Mavis’s Kitchen site.

133    After the completion of shooting that day and while still at the Mavis’s kitchen site Messrs Frare, Foster and McMullan had a conversation concerning the day’s filming in the course of which Mr Frare remarked to those present that:

“I don’t believe we’re going to be able to make this talent work. We’re wasting our time. You should really find new talent and reschedule.”

To this Mr Foster replied, “I agree”. “Talent” is, as Mr Frare related a film and television industry term for persons, be they actors or extras, engaged for the purposes of a particular production.

134    As a sequel to this, Messrs Frare and Woolley came to undertake a reshoot of material for use in a SensaSlim DVD at the Norseman Court house in late December 2009. Mr Foster and Mr McMullan greeted them at the door. At those premises, Mr Frare was introduced to a young woman called Arabella and to another called Layla. He recognised Arabella as a person he had seen in one of the accommodation cottages at the Mavis’s Kitchen site earlier that month. Her name particularly stuck with him because he has a daughter with that same name. Inferentially, on the whole of the evidence, the “Arabella” he met was Arabella Foster and the “Layla” he met was Leea Kenny who used the name “Layla” in conjunction with the SensaSlim business. Mr Frare had a tour for the purposes of scouting shooting locations. He noticed that there were many computers onsite.

135    It was Mr McMullan, not Mr Foster, who stayed during the shoot which occurred at the Norseman Court house that day. He who introduced various persons present to Mr Frare. Mr Foster appeared again at the house about 3.30 pm at the end of the shoot and asked Mr Frare how it had gone. Also at this time at the house Mr Frare was introduced to Mr Foster’s mother. While with Mr Foster Mr Frare handed him an invoice for his services in relation to the shooting. Mr Foster replied, “We’ll get this paid tomorrow.” Before they left the Norseman Court house, Mr Foster gave to each of Messrs Frare and Woolley a bottle of Moet champagne and said to them words to the effect, “Happy Christmas and thanks for the job.”

136    When about a week later payment had not been received in respect of the invoice, Mr Frare corresponded with Mr Foster by email querying payment. For this purpose, he used for Mr Foster an email address, wiiliam.imom@gmail.com (the William Imom email address). Mr Frare could not recall how or by whom he came to be provided with this email address but, having regard to the contents of the emails (each refers to an “Arabella”, for example) and context there is no doubt in my mind that the email exchange which occurred over the period 29/30 December 2009 was between Messrs Foster and Frare. The use by Mr Foster of an email address incorporating an alias on this occasion is quite consistent with his use of other email addresses incorporating an alias.

137    A further exchange of emails between Mr Foster (using the William Imom email address) occurred over the course of January 2010.

138    On 4 January 2010, Mr Foster queried Mr Frare by email about when he would commence editing as, “I just want to make sure I send through the editing notes beforehand”. When informed by email by Mr Frare later that day that editing was to occur on Wednesday (6 January 2010) Mr Foster responded that he would “email thoughts tomorrow” and “If during editing you have any issues, call me on 0458 000 669”. The mobile telephone number specified was separately acknowledged by Mr Foster to be one used by him, having been provided by his niece, Arabella (email of 23 February 2012 to Mr Richard Flitcroft, solicitor, of Corrs Chambers Westgarth, the solicitors for the Commission - Ex RJF 3 in respect of property seized at the time of his arrest). That same number is listed in that telephone’s directory memory under the description, “imom”. Mr Foster was questioned about this listing in cross examination. He described the listing under this description of the number which he himself used as “illogical”. I thought that he was dissembling when giving this answer. “Imom” or “imom” is a self-description which he uses, as his mobile telephone indicates. I did not find it “illogical” that a person would, as an aide memorie, store the number of a particular mobile telephone that person used on that number. It is especially not “illogical” to do this if one has or has the use the use of a number of mobile telephones.

139    Yet another indicator of Mr Foster’s involvement in the production of the SensaSlim promotional DVD is his use of the 0458 000 669 mobile telephone number in the alias William Imom email address. The specification in the email from the William Imom email addressed to Mr Frare of Mr Foster’s mobile telephone number is a reliable and compelling pointer not just that the email is from Mr Foster but that the exchange of which it forms part, which includes the provision of editing notes, was indeed between Mr Foster and Mr Frare. It follows from this and my acceptance of Mr Frare’s and Mr Woolley’s (see below) evidence as to Mr Foster’s involvement with the production of the SensaSlim promotional DVD that I reject Mr Foster’s statement in his evidence that the William Imom email address was that of William Duffy.

140    The following day, Mr Foster sent through a further email to Mr Frare enclosing 10 pages of editing notes. These notes are in evidence. The notes disclose a sophisticated, cynical plan for the integration and adaptation of existing footage with new footage, including, at paragraph 20 this observation by Mr Foster:

Page 13 of the script is Nicholas talking about weight loss trials there were parts where we were going to cut to the website, if you wanted to do that the address is www.sensaslim.com and then you go to “Research and Trials” and scroll down to “2008/2009” Trial site please click here” and that will bring you down to the SensaSlim weight loss trial …

At paragraph 22 of the notes, Mr Foster makes reference to existing footage of a laboratory which is marked at the top “SantÉ de Suisse” and suggests the alternative of cutting out the top of the frame or reframing this footage in a way that would place SensaSlim “up there”.

141    Further email exchanges disclose Mr Foster’s continuing editorial control over content, including, on 10 January 2010 directing Mr Frare to put under the name of people shown in a scene on the DVD, “Sensaslim Suisse - Europe (or SensaSlim Suisse - Geneva) whatever you think looks better”.

142    As Mr Frare’s work progressed and was sent to Mr Foster, Mr Foster sent on 12 January 2010 further editorial notes to him. Once again, these notes display a sophisticated, cynical plan for the overall content of and message to be conveyed by the finished DVD. A concern to include footage, out of content from an Oprah Winfrey show is evident, as is a desire that the footage does not include enough time on famous magazines and personalities. In voicing this to Mr Frare in these further notes, Mr Foster remarks, “It’s all about the sizzle.”

143    On 18 January 2010, using the William Imom email address, Mr Foster sent through final changes to be made to the SensaSlim DVD. He specifically requested that the DVD end with the appearance of SensaSlim logo and the slogan “Nothing tastes as good as SensaSlim feels”.

144    On 22 January 2010, the name “Peter O’Brien” came to Mr Frare’s attention for the first time. Before then, he had neither met nor in any other way dealt with a person by that name in relation to the production of the SensaSlim promotional DVD. The name came to him in the form of the name of the sender of an email to Richard Woolley in relation to the production of the DVD which, in turn, Mr Woolley copied to Mr Frare. The email address used was the Peter O’Brien email address. Once again, content and context make it plain that it is Mr Foster who was the author of the email exchanges which occurred on 22 January 2010 in relation to the DVD. Their subject concerned the delivery of the DVD to Mr Foster. Mr Frare advised him that the files would be too large for the “Drop Box” envisaged by Mr Foster. Instead, a plan was arranged whereby the DVD would be collected by Mr Foster’s sister.

145    Later, on 27 January 2010, using the William Imom email address again, Mr Foster requested that Mr Frare send another version of the DVD addressed to Arabella Foster at a post box at the Gold Coast Mail Exchange. The post box address which Mr Foster specified was PO Box 6932 Gold Coast Mail Centre, the very same post box as specified in the Westpac Bank account for William Duffy trading as Satori Properties. Mr Foster used (see the footer to the letter) this same PO Box number in personal correspondence of 8 February 2011 (exhibited to his affidavit) with his parole supervisor in the Commonwealth Attorney-General’s Department in relation to the seeking of approval for his taking up a consultancy with Mr Reichelt’s company, Continental Pacific Group Limited (CPG).

146    These uses of the same post office box were not coincidental.

147    One explanation in relation to the appearance of this PO Box number on the Satori Properties account and in the email to Mr Frare, flowing from that given by Mr Foster, might be that a separate person, Mr William Duffy had an interest in SensaSlim and its business and that Arabella worked in that business. Mr Foster was adamant that he did not control the Satori Properties account and had not received funds from it.

148    I do not accept that William Duffy had any interest in SensaSlim or its business. More particularly, I do not accept that he was the author of any of the emails from the William Imom email address. I do accept that Mr Duffy was a friend of the Foster family, including Mr Foster and a visitor to their homes, including the Norseman Court house.

149    Mr Foster did acknowledge in evidence that Arabella attended the Southport Central apartment, although he put that as but one of two used by Peter O’Brien (one residential, the other used for business). He denied dictating via Skype from the Norseman Court house to Arabella at this apartment, claiming the Arabella was “the worst typist in the world”. I thought that he was dissembling when he gave that answer. Another explanation as to the coincidence of the post office boxes, which I find compelling on the whole of the evidence, is that Mr Foster did control the Satori Properties bank account. Further, it was only natural for him to specify Arabella with that post office box as an addressee, because she worked in the SensaSlim business, as I find he well knew, because he controlled that business.

150    Mr Frare had to press Mr Foster both directly by telephone (in or about March 2010) and indirectly (via Mr McMullan) to receive payment for the additional work which he undertook in respect of the production of the SensaSlim DVD in January 2010 but did receive payment in full via Mr McMullan in or around March 2010.

151    The SensaSlim DVD produced by Messrs Frare and Woolley is one and the same as that which came to be shown to Ms Stainstreet and other prospective SensaSlim franchisees.

152    Later in 2010, Mr Frare came to act as sound recordist for Mr Woolley in the filming of the product launch of SensaSlim at the Hotel Versace on the Gold Coast. He recalls that the launch was attended by about 200 people, including Mr Adam Adams. Mr Frare identified Mr Adams as the person standing in the photo showing two men taken at the Norseman Court house. A name which caught Mr Frare’s attention at the launch was “Peter O’Brien”. It did so because he was not aware that there was a real person of that name, the name hitherto having been nothing more than part of one email address with which he corresponded with Mr Foster. He saw a person by that name take the stage at the product launch. It was not Mr Foster but another man whom Mr Frare had not seen before. Mr Frare did not see Mr Foster at the launch. Given the recording task which Mr Frare was performing that day and his earlier association with Mr Foster, I infer that it is inherently likely that, had Mr Foster been in attendance, he would at least have noticed him.

153    Shortly after the SensaSlim product launch at the Versace and following a request made of him by Richard Woolley, Mr Frare came to meet Mr Foster again at a cafÉ on the Gold Coast. There they discussed with him a film script for a film which was to feature sets of twins, one of whom in set was to have taken the SensaSlim product and one of whom was not to have taken that product. The film was to highlight that it was the one who had taken SensaSlim was the one who had lost weight. A feature of the script was to be that, in each set, the twins were competitive about their appearance.

154    Immediately following this meeting with Mr Foster, Messrs Frare and Woolley went to an apartment (inferentially, also on the Gold Coast) where they met Adam Adams and Ms Tracey Hannaford, as well as two sets of twins, one a set of girl, the other a set of boy twins (inferentially, young man and women). The script entailed Ms Hannaford’s asking the twins questions off a script. From the content of the questions, Mr Frare recognised the script used as one and the same as that which Mr Foster had discussed with him and Mr Woolley shortly beforehand that day. The girl twins were filmed and interviewed at the apartment. After shooting interview footage at that location, Messrs Frare and Woolley accompanied Mr Adams and Ms Hannaford to a beach location near Seaworld where footage of each set of twins was taken. The day’s filming concluded with some further filming of the twin boys at a Broadwater location near Southport on the Gold Coast.

155    This was the last SensaSlim related film production work that Mr Frare undertook.

156    What emerges from Mr Frare’s evidence is the intimate control exercised by Mr Foster over the content of the initial SensaSlim product DVD and of further promotional material. He was no mere adviser. Further, save to the extent that it was an alias assumed for the purpose of email communication by Mr Foster, no person by the name of Peter O’Brien had any role in relation to the initial SensaSlim product DVD or the production of further promotional material.

157    Mr Foster gave a quite different account in his evidence of the film production, placing this as a concern of real persons by the name of William Duffy and Peter O’Brien. He denied being involved in or in charge of the production. His explanation of the emails from the Wiiliam Imom and Peter O’Brien email addresses to Mr Frare (as for that matter from those and the William Duffy email address to others) was that the internet access at the Norseman Court house was not secure and that Messrs Duffy and O’Brien were frequent visitors to the house. I accept that Messrs Duffy and O’Brien were persons who visited the Norseman Court house (Mr Emerton notably recalls this and, as set out below, I generally accept his evidence). I reject Mr Foster’s account that Messrs Duffy and O’Brien authored the emails concerned. I find that his account of his role (or rather absence of role) was not merely mistaken but knowingly false.

158    Mr Richard Woolley was another called by the Commission who gave affidavit and oral evidence. I thought that the answers which Mr Woolley gave in oral evidence were definite, careful and thoughtful. Like Mr Frare, I found him to be a reliable historian with a good memory of events. His evidence corroborated that of Mr Frare. He was definite that the person with whom he dealt in relation to the production of the SensaSlim DVD and thereafter both in person and by email was Mr Foster. I accept his evidence. He expressly and I thought honestly denied that it was only Mr McMullan, not the latter and Mr Foster, who had met him and Mr Frare at the door of the Norseman Court house when they had attended there in December 2009 to undertake filming. He likewise denied having any discussion with a Peter O’Brien in relation to the production of that video. I accept each of these denials. It was Mr Foster who met him at the Norseman Court house with Mr McMullan that day and Mr Woolley had no discussions with a Mr O’Brien. Like Mr Frare’s evidence, I found that of Mr Woolley of particular assistance not just in terms of the insight it offered in relation to the personal control exercised by Mr Foster but also to the use of pseudonym email addresses by him with respect to dealings in relation to SensaSlim and its business. His evidence, too, was a useful prism through which to view and measure the evidence of events which followed the completion of the SensaSlim product DVD in late January 2010.

159    The owner of the Norseman Court property, Mr Peter Batley, also gave evidence. Though he attended to give oral evidence in addition to his affidavit evidence, the evidence in chief which he gave by affidavit and confirmed in the witness box was not challenged in cross examination. He came to rent the property to Mrs Louise Foster in August 2009. That same month he met Mr Peter Foster at the property. On meeting, Mr Foster suggested that the two go to lunch. They did, later that month, at Shuck’s restaurant on the Gold Coast. There Mr Batley met not just Mr Foster but also three other men whom he took to be friends of Mr Foster, each of whom was introduced to him only by their Christian names - another “Peter”, “Norm” and “Kevin”. On the whole of the evidence, the persons Mr Batley met that day with Mr Foster were, inferentially, Mr Peter O’Brien, Mr Norm Covich and Mr Kevin McMullan. During the course of the occupancy of the house by the Foster family, Mr Batley attended the Norseman Court house regularly to perform maintenance and to maintain the pool. He saw each of the men to whom he had been introduced by Mr Foster at the lunch coming or going from the property on occasion, along with others. He also noticed that a room at the Norseman Court house seemed to have been set up like an office with a table and a number of computers.

160    In the office photo, Mr Batley identified the person sitting down to be the person introduced to him by Mr Foster as “Peter” at the lunch. For the reasons given, I find that the person so identified by him is Mr Peter O’Brien. It necessarily follows from this that I do accept that a person by the name of “Peter” other than Mr Foster had some association with the SensaSlim business.

161    I have expressly considered whether, in light of this, I ought reasonably to doubt whether Mr Foster was involved in the commission of a contempt as charged by the Commission on the basis that it was the real Mr O’Brien, not Mr Foster, who authored emails from the Peter O’Brien email address and who, using his Christian name, “Peter” otherwise dealt with various persons. I do not entertain a doubt that it was Mr Foster who authored the emails and who spoke, as related above, with various persons by telephone using the name “Peter”. The conclusion which I have reached in relation to the real Mr O’Brien is that he was an associate of Mr Foster who was willing to lend his name and presence to the SensaSlim business and perform tasks as requested by Mr Foster.

162    The real Mr O’Brien did not give evidence in the defence case. I draw no adverse inference against Mr Foster on the basis of his absence. It is just that the defence case falls for consideration in the absence of any evidence from Mr O’Brien, nothing more than that.

163    Before turning to the evidence of Mr Emerton and his wife, Mrs Vicki Emerton, it is desirable to refer to evidence which was tendered in the Commission’s case from Dr Catriona Storey-White, a specialist in forensic voice analysis. I am satisfied that Dr Storey-White is well qualified both by formal study and practical experience to give expert opinion evidence in that field.

164    Dr Storey-White compared the recording of Mr Foster’s voice in the Attard interview with another audio file called “00120110529073104_Sensaslim” (the questioned specimen).

165    The questioned specimen comprised a telephone conversation between a Mr Christopher Coffey, his wife, Mr Robin Reichelt (who Mr Coffey understood to be from SensaSlim International) and another male person whom Mr Coffey then understood to be a Mr Peter O’Brien. The conversation was recorded by Mr Coffey on 29 May 2011 on his iPad. The conversation concerned the proposed purchase of the master franchise for New Zealand for the SensaSlim business by Mr Coffey and a Mr Andy James and the latter’s wife. Mr Coffey made the recording because Mr James was unable to participate in the conversation and he wanted to use the recording for the purpose of later updating Mr James. Mr Coffey came later to give his iPad to the Commission’s Mr Smith who, in turn, engaged Mr Zoran Iliev, a specialist electronic and computer forensic examiner to extract from the iPad the audio file of the telephone conversation recorded on 11 May 2011. As extracted, the audio file was a “cat” type created with an application called “QuickVoice”. Mr Iliev converted this file into an mp3 type of file. He did this so that the file could be played with commonly used media players such as Windows media player. This conversion did not change the audio content of the original file. Mr Iliev then stored the mp3 file on a USB storage device and provided that to Mr Smith. This file is the audio file called “00120110529073104_Sensaslim”. In turn, Mr Smith caused Dr Storey-White to be briefed with this audio file, which I have termed the questioned specimen. Dr Storey-White termed the questioned specimen “Voice Recording A” in the reports which she provided to the Commission in November and December 2011 (the latter made some corrections to her initial report).

166    Dr Storey-White is, by formal study and experience, an expert in forensic linguistics and auditory and acoustic analysis. She carries on a practice in that field under the name “Audiolex” from Knighton Powys in the United Kingdom. Having compared Mr Foster’s voice with on the Attard interview (which she referred to as the “Control Sample”) with the male speaking voice known to her as “MS2” on the questioned specimen, Dr Storey-white expressed the following opinions:

(a)    “the voice of the male speaker in the Control Sample is consistent with the voice of the male speaker identified as MS2 in Voice Recording A” [i.e. Mr Foster’s voice in the Attard interview is consistent with the male voice identified as MS2 on the questioned specimen]; and

(b)    The distinctiveness of the consistencies between these two voices was “Highly Distinctive” or point 3 of 4 points on the positive side of a scale of distinctiveness employed in her specialty field.

167    The scale to which Dr Storey-White referred ranges from “0”, which is a “Not Distinctive” designation through four positive points to “4”, which designates “Exceptionally Distinctive”, a designation employed where the possibility of features being shared by other speakers is remote. In expressing her opinion, Dr Storey-White used “consistent” to mean that all points of comparison between the two male voices to which she referred matched.

168    Dr Storey-White remarked of the Control Sample that it, “provided an excellent reference sample for relevant aspects of the voice and speech habits, in terms of duration, quality and comprehensiveness, of the target male speaker” (ie Mr Foster). As to the questioned specimen, “Voice Recording A”, she remarked that it “provided an excellent sample for phonetic analysis in terms of duration and comprehensiveness, and a fair sample in terms of quality”. She took these features of the two recordings into account in forming her opinions.

169    For the purpose of forming her opinions, Dr Storey-White initially conducted an auditory analysis of the recordings by carefully listening to the recordings as a whole. She then digitally re-recorded sections of speech from each sample repeated many times and then played and listened to these side by side for direct comparison. She made an associated study of patterns of pronunciation and the voice of the target male speaker. She then conducted further auditory analysis, finding “close auditory similarities (she gave examples of these in her evidence) between the voice and speech patterns of the target male speaker MS2 on Voice Recording A and those of the male speaker in the Control Sample”. In her next stage of voice analysis, Dr Storey-White used Spectrograms and fundamental frequency measurements to compare the target male speakers.

170    Mr Coffey’s evidence established that the “MS2” voice on the questioned specimen was that of the person he knew by the name “Peter O’Brien”.

171    Over the objection of the Commission, I admitted into evidence a report prepared by Dr Morrison, senior researcher and Director, Voice Comparison Laboratory at the University of New South Wales together with his oral evidence (the later given by video link from Vancouver). The Commission’s objection was based on the fact that Dr Morrison had not himself conducted a comparison of the Foster voice on the Attard interview and the question specimen. What Dr Morrison did do was to offer a critique of the methodology employed by Dr Storey-White in her reports. He also sounded a cautionary note in relation to the reliability of the lay voice identification evidence admitted.

172    Dr Morrison’s evidence was a species of opinion evidence to which s 79 of the Evidence Act applied. He had both by formal qualification and experience an expertise in relation to forensic voice identification. The opinions which he gave both in his written report (adopted in oral evidence) and in his oral evidence were based on his specialised knowledge in that field. It was submitted that, while his opinions might serve as a basis for cross-examination of Dr Storey-White, his evidence adopting and expanding upon them was not admissible because it could only to an issue of credit. This though does not provide a basis for an outright refusal to receive his evidence, having regard to s 108C of the Evidence Act, which materially provides:

Exception: evidence of persons with specialised knowledge

(1)    The credibility rule does not apply to evidence given by a person concerning the credibility of another witness if:

(a)    the person has specialised knowledge based on the person's training, study or experience; and

(b)    the evidence is evidence of an opinion of the person that:

(i)    is wholly or substantially based on that knowledge; and

(ii)    could substantially affect the assessment of the credibility of a witness; and

(c)    the court gives leave to adduce the evidence.

(2)    … .

Dr Morrison’s evidence could substantially affect the assessment of the credibility both of Dr Storey-White as well as those who gave lay voice identification evidence. In a case where identity was very much at issue, I considered that the interests of justice favoured the admission in the defence case of Dr Morrison’s evidence.

173    A principal criticism made by Dr Morrison of Dr Storey-White’s analysis framework was that it did not use representative databases. This may though be a counsel of perfection. For Dr Morrison’s further evidence was that such databases are underdevelopment (“[We] are still busy collecting it.”) with the result yet to be published, although Dr Morrison himself was starting to use it in forensic voice analysis. Dr Morrison also acknowledged that the use of such databases also involved a degree of selectivity in the inclusion of particular voices in the database. He readily conceded that there was no such thing as absolute objectivity but opined that the use of such a database nonetheless offered a more objective than that employed by Dr Storey-White. Dr Storey-White was cross-examined on this same subject of the alleged benefits of a comparison against samples of other speakers. Her answer, which struck me as telling, was “[By] choosing that population you’ve already made some judgment about it which may or may not be relevant to what you’re doing.”

174    Overall, Dr Morrison’s evidence was not that the method employed by Dr Storey-White was completely unreliable but rather that it did involve subjective elements which would be reduced in the event that the databases he and colleagues were developing were employed for comparative purposes. The question then is one of weight and Dr Storey-White struck me as a witness who was genuinely striving to offer the Court the benefit of a dispassionate employment of her considerable knowledge and experience in expressing an opinion as to the voice on the Attard interview and the MS2 voice. That knowledge and experience was much on display in the course of her cross examination. She readily conceded that the conclusions which she reached were a combination of the subjective and the objective. They were, in essence a combination of the employment of a tuned ear and the resultant ascertainment of distinctive voice features and, to a lesser extent, the employment of spectrogram analysis as something of a reality check.

175    Dr Morrison was also critical of the circumstances of the recording of the questioned specimen. Yet Dr Storey-White took into account her view as to the quality of the recording in forming her opinions. Unlike Dr Morrison, she had the benefit of listening to the Attard interview and the questioned specimen.

176    I accept Dr Storey-White’s evidence. Her evidence persuades me that the voice MS2 on the questioned specimen is that of Mr Foster.

177    I note that expert acoustic analysis has been accepted in the United Kingdom where, in R v Flynn [2008] EWCA Crim 970 (Flynn), Gage LJ, delivering the judgment of the Court of Appeal, Criminal Division observed:

As appears from the above we have been dealing in these appeals with issues arising out of voice recognition evidence. Nothing in this judgment should be taken as casting doubt on the admissibility of evidence given by properly qualified experts in this field. On the material before use [sic] we think it neither possible nor desirable to go as far as the Northern Ireland Court of Criminal Appeal in O'Doherty which ruled that auditory analysis evidence given by experts in this field was inadmissible unless supported by expert evidence of acoustic analysis. So far as lay listener evidence is concerned, in our opinion, the key to admissibility is the degree of familiarity of the witness with the suspect's voice. Even then the dangers of a mis-identification remain; the more so where the recording of the voice to be identified is poor.

178    I should add that, as far as the lay identification evidence is concerned, I have taken into account Dr Morrison’s cautionary note as well as that sounded in the passage quoted from Flynn, in particular the degree of familiarity which each had with what each knew as the O’Brien voice. Yet more particularly, I have taken into account the defence submission that none of the witnesses, be they lay or Dr Storey-White “spoke to the Defendant in person”. This submission is true in so far as it goes. The lay witnesses who gave voice identification evidence spoke frequently, some very frequently indeed, with a person each knew as Peter O’Brien. It was the familiarity thus gained that each employed in relation to the male voice on the Attard interview. Dr Storey-White never claimed to have spoken in person with Mr Foster, instead engaging in the analytical process that led to the formation of the opinions which she gave in evidence by reference to the Attard interview and the questioned specimen.

179    The Defence urged me in submissions that I listen to the Attard interview as well as to the questioned specimen. I was reminded that the trial was one by judge, not expert. That is axiomatic. I have therefore, as requested, listened to the two. To me, the Attard interview discloses that Mr Foster has a very distinctive voice. I heard that same distinctive voice on the questioned specimen when Mr O’Brien spoke. For that matter, I heard that same distinctive voice when Mr Foster gave his oral evidence. I do not in any way regard these impressions as decisive as they suffer from many limitations. There is the risk of contextual suggestion, as well as the fact that I have no familiarity with either of the voices recorded. What I can state is that undertaking the task requested by the Defence did not cause me to change an opinion already formed about the reliability of Dr Storey-White’s evidence or that of the lay witnesses.

180    Mr Reichelt confirmed in his evidence that he had been a party to the conversation recorded by Mr Coffey. He opined in his evidence that the voice concerned was that of the person Peter O’Brien whom he knew and had met when in Australia for the SensaSlim product launch at the Versace in late 2010. His evidence was also that Mr Foster did not have anything to do with SensaSlim and, indeed, had told him that he could not be involved with it. I accept that Mr Reichelt was present at the SensaSlim product launch at the Versace and that he did there meet a person other than Mr Foster by the name of Peter O’Brien. He placed Dr Waters at the launch whereas Dr Waters denied that. I regard Dr Waters as the more reliable historian. Further, I prefer the evidence of Dr Storey-White to that of Mr Reichelt as to the O’Brien voice in the conversation recorded by Mr Coffey. Overall, save where his evidence was corroborated by a witness other than Mr Foster and necessarily including my observation of him in the witness box, I formed the impression that Mr Reichelt was not a reliable witness.

181    The conversation as recorded by Mr Coffey discloses an intimacy of knowledge of SensaSlim’s business on the part of Mr Foster, who is employing the alias Peter O’Brien. One example of this intimacy of knowledge revealed is the reference which he makes to Therapeutic Goods Administration approval process. It also highlights an intimacy of SensaSlim business association between him and Mr Reichelt which is at odds with the evidence which each of them gave.

182    I turn then to the evidence of Mr David Scott Emerton.

183    Of all of the witnesses called by the Commission, Mr Emerton was a witness whose evidence required, I thought, very particular scrutiny. That was not just because Mr Emerton was an informer who enjoyed the benefit of an agreement with the Commission. Mr Emerton sent an email to Mr Foster in July 2011 in which he put to Mr Foster the following:

Justin Armsden from ACA expressed great interest in the box of bits and pieces he cast his eye over here in the last few days, particularly that it implicates more than one member of a certain family, along with some of their very close associates. Do I let him take this any further, or are you depositing, by close of business tomorrow, the remaining $9,000 from our agreement [Commonwealth Bank account number specified]. Respond by return email this afternoon.

184    There were follow up emails to Mr Foster of a similar ilk, one of 6 August 2011 being entitled, “Off you go to jail, Ha, Ha”.

185    Mr Emerton denied that he had tried to blackmail Mr Foster in this fashion, asserting that he was “trying to get money that was owed”. I rather thought that this was an admission of the proposition but that he cared not to acknowledge how it might be characterised. That he was trying to get money from Mr Foster was certainly the case. I formed the strong impression both from his own evidence, those emails and the evidence of those who had dealt with him, including in that regard the evidence given by Mr Foster, as well as various witnesses called in the Commission’s case, that there was an “end justifies the means” dimension to Mr Emerton’s character, especially in matters of self interest. The emails he sent to Mr Foster in July 2011 were one example of this; his use of the alias, David Waller, as a “cut out” and emails which he sent to Mr Boyle so as to obtain what he saw as monies owed to him by SensaSlim were others.

186    Mr Emerton attributed his use of the alias to reputational damage he had sustained as a result of adverse publicity concerning his prior involvement with a betting software system business known as “Profit Runner”. I accept that this was a motivating factor for him but it was not the only one. He found it convenient, given the role which he undertook with SensaSlim, not to use his real name. Even on the evidence I have thus far accepted, such conduct hardly made him unique in that company.

187    To my direct observation, Mr Emerton disliked Mr Foster. In the course of his evidence and looking at Mr Foster, who was present in court, he twice referred to him as “old mate over there”. Shortly thereafter, in the course of his cross examination on one of his affidavits, he became agitated to the extent that I found it necessary to counsel him about decorum in court. Mr Emerton had plainly fallen out with Mr Foster over matters of money.

188    There is then every reason to be cautious about accepting Mr Emerton’s evidence. Yet there was much to corroborate it. Mr Emerton’s description of the use of the Norseman Court house as a base of operations accorded with Mr Hansen’s description of what he observed there, as it did of what Dr Waters in greater detail and with greater frequency observed there.

189    In giving his account of his preliminary meetings with Mr Foster in December 2009, Mr Emerton recalled Mr Foster’s saying to him that he was waiting for a promotional DVD to be produced which he was editing. His recollection of Mr Foster’s making this statement is consistent with the evidence given by Messrs Frare and Woolley as to Mr Foster’s then involvement in the production and editing of a promotional DVD for SensaSlim. Mr Emerton’s very antagonism towards Mr Foster in relation to money struck me also as completely consistent with a sense of entitlement arising from a business association with Mr Foster in the SensaSlim business and much less explicable just by his exploitation of a vulnerability which Mr Foster had arising from his then status as a parolee. A role Mr Emerton attributed in evidence to Mr Foster, that of dealing by telephone with prospective franchisees is quite consistent with the role he took under the alias of Peter O’Brien when speaking with Mr Coffey. Further, I formed the strong impression when observing Mr Emerton give oral evidence that he was giving truthful evidence. For example, I noted at the time that his answers to the following in cross examination were emphatic:

I’m suggesting to you that Mr Ryan, in late 2009 or towards 2010, introduced you to Mr Peter O’Brien and Mr William Duffy? --- No

And they were the ones that employed you as national sales manager at SensaSlim? --- Totally incorrect.

I thought that these were honest answers.

190    Mr Emerton supplied many emails to the Commission, which he said were in fact email exchanges with Mr Foster. He was closely cross examined about these, the form in which they had been presented to the Commission and when they were presented. I found his account of the provision of the emails honest.

191    All in all, notwithstanding the risks associated with evidence from such a source, I formed the view that Mr Emerton gave generally reliable evidence.

192    What emerges from Mr Emerton’s evidence is that he was approached by Mr Michael Ryan in about October 2009 about a forthcoming opportunity he might care to explore. Mr Ryan had been the sole director of the “Profit Runner” business. Mr Emerton had been the manager of that business. That business was then in the throes of shutting down as a sequel to adverse media publicity. Mr Emerton was looking for work.

193    It is convenient to interpolate here that Mr Ryan was to give oral evidence for the Defence at the trial. Mr Foster’s solicitors obtained an affidavit from him. The Commission gave notice that it wished to cross-examine Mr Ryan. He attended for that purpose at the Commonwealth Law Courts in Adelaide so as to give evidence by video link. As a result of a misunderstanding, and without any fault on the part of those acting for Mr Foster, Mr Ryan was, while waiting at the court building in Adelaide to give his evidence, afforded access to a bundle of documents which had been pre-positioned at the court building so as to be opened and put to him in the course of cross-examination. It was found that, when Mr Ryan was called to give evidence by video link that he had left the court building. Information from the Court’s Adelaide registry staff was relayed to me to the effect that Mr Ryan had decided that he needed to seek legal advice and had left the court building with the documents. Endeavours were made by those acting for Mr Foster to have him return to give evidence later that day but this proved impossible. Later in the proceedings, arrangements were made for Mr Ryan to give evidence by video link from The Philippines but Mr Ryan failed to attend as and when arranged. In the result, I did permit his affidavit to be used, over the objection of the Commission, notwithstanding his failure, twice, to attend for cross-examination. I draw no adverse inference against Mr Foster arising from Mr Ryan’s failures to attend. Equally, though, I do not find Mr Ryan’s evidence in any way persuasive. His evidence, if it is to be accepted, supplies reasons, already apparent, why Dr Waters’ evidence ought to treated with caution - the break up of his relationship with Arabella and disappointment with Mr Foster in relation to (his (Dr Waters’) investment in SensaSlim. I had the benefit of observing Dr Waters; I did not have that benefit in relation to Mr Ryan. I regard Dr Waters as an honest and credible witness. Beyond this, Mr Ryan does not suggest in his affidavit that he worked in SensaSlim’s business and neither does he place Mr Duffy in the overall control of that business. The statement made in Mr Ryan’s evidence as to a particular telephone number is inconsistent with contemporary communications and records to the contrary. His statement that Mr Foster was not involved in SensaSlim is at odds with what I regard as overwhelming evidence to the contrary.

194    After some follow up conversations, Mr Emerton came to be introduced to Mr Foster by Mr Ryan on the Gold Coast in December 2009. He had not met him before but understood him to have a “colourful past”. At the first meeting, Mr Foster put to Mr Emerton that he was looking for a National Sales Manager for a health and beauty product business that he was setting up and also inquired of him as to what he knew about franchises. A further meeting in December 2009 between Messrs Ryan, Emerton and Foster followed in the course of which Mr Emerton raised the possibility of his wife’s working in the proposed business. After follow up telephone conversations between Messrs Emerton and Foster, yet another meeting between them on the Gold Coast occurred, on this occasion also attended by Mr Foster’s mother, Louise and Mr Emerton’s wife, Vicki. Mr Emerton recalls that this lunch was more a social affair than one directed to the detail of the proposed business.

195    That detail came in mid-January 2010 when Mr Emerton and his wife attended on Mr Foster’s invitation, a lunch at the Norseman Court house. Present at the house apart from Mr Foster were Louise and Arabella. After lunch, Mr Emerton and his wife were shown by Mr Foster what he described as an early edition of a promotional DVD for a slimming product called SensaSlim. Mr Foster, had, as I have mentioned, made reference to a DVD being under production during one of the conversations which he had with Mr Emerton in December 2009. Mr Emerton recalls (and I accept) that neither Louise nor Arabella watched the DVD with them although Louise did, with Mr Foster, participate in some general discussion with them about the venture Mr Foster was proposing. Mr Emerton noticed from his observation of surroundings that some of the footage on the DVD had been shot at the Norseman Court house. In the course of discussing the venture, Mr Foster put to Mr Emerton:

I’ve done the overseas trials. This one’s different to what I’ve done in the past. Go and look SensaSlim up on Google.

196    Later in January 2010, Mr Emerton returned with his wife to the Norseman Court house for morning tea and so as to watch another version of the SensaSlim DVD. Again, apart from Mr Foster, Louise and Arabella (who made the tea and coffee) were present. Another person present but who did not participate in the meeting which transpired concerning SensaSlim was a woman whom Mr Emerton came to know as Rosemary Ahmet who ran a delicatessen business. At either this or one of their earlier meetings, Mr Foster said to Mr Emerton words to this effect:

I have previously been in jail and I am on parole and I can’t be a director of a company or involved in a business until [a particular date which Mr Emerton could not recall].

197    Either later that month or early the following month, Mr Foster nominated to Mr Emerton the William Imom email address as an email address via which to communicate with him. In March 2010 Mr Foster received an email from Mr Foster from a separate email address, bill.imom@gmail.com (Bill Imom email address). In that email, Mr Foster stated that he had had trouble with the William Imom email address and requested that the Bill Imom email address be used by addressees (of which Mr Emerton was one) from then on. It is not a coincidence that the Bill Imom email address was one of those used for communications with Dr Waters. That absence of coincidence is because it was Mr Foster who was using that email address.

198    Mr Emerton’s experience in communicating with Mr Foster by email was that Mr Foster did not sign emails in his own name or even at all, with just occasionally the signature “P” being used. His experience was also that Mr Foster used what I would describe as alias email addresses. Those used by Mr Foster and encountered by Mr Emerton over time in communicating with him by email were:

(a)    the William Imom email address;

(b)    the Bill Imom email address; and

(c)    the Peter O’Brien email address.

199    As the SensaSlim business evolved, Mr Foster also occasionally used more generic SensaSlim business related email addresses to communicate with Mr Emerton such as sales@sensaslim.com.au or admin@sensaslim.com.au.

200    Mr Emerton also communicated with Mr Foster via a suite of mobile telephone numbers which he detailed in evidence. These included, but only on the first occasion (as Mr Foster told him never again to use it), 0458 000 669, the same number given to Mr Frare with which to contact Mr Foster. Mobile telephone records are in evidence. These disclose that, in the period between 5 January 2010 and 16 July 2010 there were 144 SMS or telephone calls made between these mobile numbers and mobile telephone numbers used by Mr Emerton. On the whole of the evidence, there is, I find, an overwhelming inference that Mr Foster was the author of the SMS or telephone calls that were made from the mobile telephones concerned to Mr Emerton.

201    In March 2010, Mr Emerton requested of Mr Foster and on 10 March 2010 Mr Foster sent to him, using the Bill Imom email address, a formal letter offering Mr Emerton employment with SensaSlim. Mr Emerton took up this offer. By that stage, he had, on his evidence, already been performing tasks at the Norseman Court house in relation to SensaSlim’s business for about 3 weeks, i.e. since mid to late-February 2010. His taking up such work was a sequel to a lunch meeting that month at the Norseman Court house attended by Mr Foster, Michael Boyle, Louise, Arabella and Dr Waters. Mr Boyle was introduced to Mr Boyle at this meeting. Mr Boyle was introduced to Mr Emerton as a director of SensaSlim and longstanding friend of Dr Waters. Notwithstanding Mr Boyle’s position, it was to Mr Foster that Mr Emerton looked for directions in relation to SensaSlim’s business.

202    Mr Emerton then embarked on a programme of travel to Brisbane, to various Queensland regional and interstate centres canvassing prospective SensaSlim franchisees. These visits were co-ordinated with a prior programme of advertisements designed to entice interest. Such advertisements were of the kind described by Ms Stainstreet in her evidence.

203    Between March 2010 and October 2010 Mr Emerton travelled as follows:

(a)    North Queensland, Brisbane, Mackay, and Bundaberg in March and April;

(b)    Sunshine Coast in April;

(c)    Brisbane (again) in April and May;

(d)    Sydney and Wollongong in May;

(e)    Newcastle, Sydney (again) and Wollongong (again) in July;

(f)    Coffs Harbour and Sydney (more particularly this time Parramatta and Chatswood) at various times in June, July and August; and

(g)    Perth in September and early October.

204    Before embarking on this visits programme Mr Emerton made frequent (3 to 4 times per week) visits to the Norseman Court house to assist in a variety of tasks associated with the starting up of SensaSlim’s business - preparation of sales and promotional material for presentation to franchisees, assisting in developing the sales presentations to be made to prospective franchisees, obtaining, at Mr Foster’s request, alternative office space for the business in Southport Central (also known as Southport Centro) and putting together, at Mr Foster’s request (including via his use of the William Imom and Bill Imom email addresses), various credit card applications.

205    During his visits to the Norseman Court house, Mr Emerton saw or dealt with the following:

(a)    Mr Foster;

(b)    Louise;

(c)    Arabella;

(d)    Liana Emberg (Mr Foster’s then girlfriend);

(e)    Leea Kenny;

(f)    Mr Norm Covich;

(g)    Mr Kevin McMullan;

(h)    Mr Peter O’Brien;

(i)    Adam Adams;

(j)    Rose Ahmet (previously mentioned) and Hasan Ahmet, who were friends of Louise and Mr Foster; and

(k)    On one or two occasions, Mr William (Bill) Duffy.

206    Mr Emerton detailed in his evidence, based on his intimate participation in and direct observations of the conduct of SensaSlim’s business, including its conduct at the Norseman Court house, the roles, if any undertaken in that business by Mr Foster and by some of the above named. I accept the evidence that he gave on that subject and, based on it, make the following further findings as to roles and tasks undertaken in SensaSlim’s business.

207    Mr McMullan established various Gmail accounts which were used by various persons working for SensaSlim and which were required for Skype communication. He also accompanied Mr Emerton on the latter’s first franchise sales trip to Cairns in March 2010. These roles post-dated the earlier role of assisting in the production of the SensaSlim promotional DVD undertaken by Mr McMullan.

208    Mr Covich was a person who undertook “handyman” tasks around the Norseman Court house for Mr Foster. He did not participate in the sale of SensaSlim franchises but did purchase such a franchise via finance obtained using multiple credit cards. Mr Emerton assisted in the preparation of applications for these cards. Mr Covich also performed some minor clerical assist roles for SensaSlim such as arranging for the payment of advertisements canvassing interest in franchises.

209    Arabella and Ms Kenny (Layla) each checked, at Mr Foster’s direction if Mr Foster were present at the Norseman Court house at the time, the Peter O’Brien email address when a query arose about information to be provided to or information received from a prospective franchisee. They also performed such tasks there when Mr Foster was absent. Mr Emerton’s description of their performing such tasks accords with other evidence, referred to above, as to administrative support roles undertaken by each of these women in SensaSlim’s business. I find that they performed such roles as subordinates of Mr Foster.

210    Mr Emerton recalls Mr Peter O’Brien as one of the persons for whom he completed credit card applications at Mr Foster’s request in the February/March 2010 period. Mr Foster told him at that time that Mr O’Brien was or would become a director of SensaSlim (Mr Emerton could not recall which). This appointment became a matter of public record. Mr Emerton was definite and I accept that it was Mr Foster, not Mr O’Brien, with whom he dealt on an almost daily basis in relation to SensaSlim’s business. He further related and I find that Mr Foster adopted the practice of assuming the identity of Peter O’Brien when dealing with prospective SensaSlim franchisees and with those who came to take up such franchises.

211    Another task which Mr Emerton undertook in the February/March 2010 “start up” period was to review at Mr Foster’s request a draft of what became the SensaSlim Area Manager’s Proposal. Mr Foster handed this draft to him at his office at the Norseman Court house, saying words to this effect, “I’ve been working on this. Have a look - what do you think?” He and Mr Foster also discussed the “sales pitch” which was to be made to prospective franchisees. This included Mr Foster’s annotating the copy of the Area Manager’s Proposal which was to be used by SensaSlim sales staff with green dots for those which were to be read word for word and red dots for those parts which they need not read word for word. The sales staff version was also annotated with an indication as to which parts could be skipped in the course of a presentation to a prospective franchisee. During this period, Messrs Emerton and Foster also engaged in role plays with one or the other adopting the role of the prospective franchisee and the other the sales representative so as to rehearse and develop sales promotional techniques.

212    Mr Foster followed such sales guidance up in emails to Mr Emerton (from the Bill Imom email address) of 18 March 2010 (in which Mr Foster stated that large flat screens were to be used for the playing of the SensaSlim promotional DVD rather than laptops) and of 26 March 2010 in which Mr Foster gave instructions as to the content of presentations to prospective franchisees.

213    Mr Emerton regularly observed Mr O’Brien entering Mr Foster’s office at the Norseman Court house either when Mr Foster was on the telephone in relation to SensaSlim’s business or when Mr Foster was undertaking paperwork in respect of that business. On one occasion while Mr Emerton was at the Norseman Court house, Mr Foster said to him words to this effect in relation to Mr O’Brien:

I won’t know what to do with him if the media get interested. I suppose I’ll have to buy him an expensive suit and dress him and get him to front the media, but he won’t be able to open his mouth.

I accept this evidence. Mr O’Brien had a subordinate role in SensaSlim’s business, subordinate to Mr Foster. Inferentially, he was prepared, at Mr Foster’s request, to lend his name to use in the business and also to attend a SensaSlim related function if occasion required, most notably the launch at the Versace. He was, literally, a “front man”.

214    Mr William Duffy was not a person to whom Mr Emerton reported in relation to SensaSlim’s business. Mr Emerton did though observe (and I find there were) a number of cheque books and automatic teller machine cards (ATM) in Mr Duffy’s name lying around the Norseman Court house which were used by Mr Foster and Louise. Further, in the context of the preparation of a credit card application for Arabella, Mr Foster informed Mr Emerton that Arabella’s employer had been identified as Satori Properties. This evidence of Mr Emerton, taken in conjunction with Dr Waters’ evidence as to the account Mr Foster nomination for the making of payments and the correspondence between the post office box used for Satori Properties Westpac bank account and the post office box that Mr Foster nominated to Mr Frare leads to an inference that Mr Foster had some arrangement with Mr Duffy whereby he could access funds relating to SensaSlim’s operations.

215    Adam Adams was a person initially met casually by Mr Emerton in Mr Foster’s office at the Norseman Court house in late March or early April of 2010. Later that week, Mr Foster mentioned to Mr Emerton over a lunch with Mr Adams that Mr Adams would be joining SensaSlim so as to relieve some of the pressure on him (Mr Foster), liaise with franchisees and handle any complaints, “so not as many people will be asking for Peter O’Brien”. Later, on and from May 2010, Mr Adams came to supplant Mr Emerton as SensaSlim’s national sales manager. This plus a perception by Mr Emerton that he was not being allowed by Mr Foster a free hand in training of staff or other autonomies in operational managerial decisions, as well as delays in payment of his remuneration and that of those with whom he worked in SensaSlim’s business and delays in the holding of the product launch led to an increasing disenchantment by Mr Emerton with Mr Foster personally and with SensaSlim.

216    Mr Emerton left SensaSlim’s employ on 17 October 2010 following an exchange of emails which he had with Mr Boyle and after a meeting held on 17 October 2010 on the Gold Coast attended by Messrs Adams, Covich, O’Brien as well as Mr Mick Gatto and Mr Mike Khoury. I find that this is the meeting to which Mr Foster referred when he told Dr Waters in conversation that. “The problem has been fixed. Scott will leave Mike alone.” Mr Foster’s knowledge of this meeting is consistent with and indicative of the degree of control which he exercised over SensaSlim’s operations. Before that meeting on 17 October 2010 Mr Emerton had been endeavouring to secure via communication with Mr Foster and then Mr Boyle, payment of what he saw were arrears of money owed to him by SensaSlim.

217    Mr Emerton confirmed in his evidence the existence of a routine or standardised practice which followed within SensaSlim in relation to canvassing for franchises and related dealings with prospective franchisees. The practice which he described accords with the experience of the franchisees whose evidence I have related above.

218    The practice and the nature and extent of Mr Foster’s involvement in it, as disclosed by Mr Emerton’s evidence was as follows:

(a)    Initially, advertisements canvassing general interest were placed in local and regional newspapers for a selected region. The advertisements were paid for on either Arabella’s or Mr Covich’s credit cards in (the applications for which cards Mr Emerton had assisted). They did not name SensaSlim. The advertisements nominated a 1800 number which connected to a marketing service in New Zealand favoured by Mr Foster in the past, MEP Services Limited (MEP). Upon calling this number, basic contact information in respect of the person concerned was obtained by the MEP receptionist who would inform the person that they would receive a call “as soon as Mr Waller is free”. The inspiration for these advertisements came from old newspaper advertisements provided to Mr Emerton in March 2010 by Mr Foster who then asked Mr Emerton for his comments about whether these could be used in relation to SensaSlim. Later in March 2010 (on 25 March) Mr Foster sent through by email to Mr Emerton a proposed advertisement for area managers. He sent a similar advertisement to Mr Emerton by email on 19 August 2010.

(b)    The MEP receptionist would then forward the person’s contact details through to a SensaSlim email address such as recruitment@SensaSlim.com.

(c)    The email received from MEP was then forwarded to Mr Emerton. The MEP email was forwarded either by Mr Foster directly, using the Bill Imom email address or by persons whom Mr Emerton described as “One of the girls” (inferentially either Arabella or Ms Kenny). There was a practice in place within SensaSlim’s office whereby these two support staff were not permitted to forward contacts to Mr Emerton until those contacts had been vetted by Mr Foster. I infer this from remarks made to Mr Emerton by Mr Foster on several weekends while, inferentially, Mr Emerton was absent on a sales trip and which Mr Emerton described as “quiet”. On such weekends he telephoned Mr Foster requesting additional leads for him to follow. To these requests Mr Foster replied in words to this effect:

I’ll just check them against the list in the PC of my previous sales before SensaSlim

After saying this, Mr Foster then supplied Mr Emerton with further contacts. A further basis for the inference I draw as to vetting by Mr Foster are a series of emails from him (using the Bill Imom email address) to Mr Emerton included in the latter’s evidence in which, in respect of a particular inquirer, he directs Mr Emerton to “burn” that person and to state to them that the organisation is “Anti Age Me” so as to conceal the existence of SensaSlim from an inquirer to be rejected.

(d)    Prior to Mr Emerton’s arrival in a sales destination, Arabella or Ms Kenny sent by post or courier a supply of SensaSlim promotional DVDs, Area Manager Proposals and related documentation.

(e)    Mr Emerton got in touch with the contacts supplied and asked them a series of questions to determine whether or not they were “qualified”. The questions concerned were settled by Mr Foster.

(f)    If, as a result of the answers given to these questions the contacts were “qualified”, they were then prospective franchisees. If so, Mr Emerton then arranged to meet them at the hotel or apartment in which he was staying when on a sales trip. When they arrived and after introductions, Mr Emerton then put on the SensaSlim promotional DVD and left the prospective franchisees to watch that. Once the DVD had finished playing, Mr Emerton then gave them an explanation about SensaSlim, emphasising particular content of the DVD, using a procedure settled by Mr Foster but sometimes adapted by him (Mr Emerton). Prospective franchisees were given the option of either sending through a hard copy franchise application or submitting the application electronically via SensaSlim’s website. The website was structured so as to allow a prospective franchisee to select an option requesting that they be contacted by a SensaSlim director.

(g)    The SensaSlim office practice was to direct applications received either in hard copy by facsimile or electronically via the website to Mr Foster. In turn, Mr Foster usually forwarded the applications directed to him to Mr Emerton, sometimes with a commentary about that prospective franchisee.

(h)    Upon these being forwarded to and read by Mr Emerton, he, in turn, sometimes had a discussion with Mr Foster about whether the applicant concerned was a prospect. Mr Emerton spoke with Mr Foster not only about prospective franchisees where he had undertaken the initial sales contact but also about those where another had undertaken that role.

(i)    Mr Foster then telephoned the prospective franchisee, using the Peter O’Brien alias. While Mr Emerton was never physically present when Mr Foster made such a call, he did on several occasions ring in to Mr Foster on the latter’s mobile telephone and then listen in, with Mr Foster’s acquiescence, while he finished such a call. After such telephone calls, it was Mr Foster’s usual practice either to discuss the prospective franchisee with Mr Emerton and to provide an overview of the discussion which he had had with them or to send Mr Emerton an email on such subjects and whether, in his (Mr Foster’s) view they would proceed with the taking up of a franchise. For this purpose, Mr Foster used either the Bill Imom or the Peter O’Brien email addresses. Numerous examples of such emails were included in Mr Emerton’s evidence.

(j)    If a prospective franchisee did sign up and pay SensaSlim’s practice was to send them what Mr Emerton described as a “welcome” letter, signed by Mr Boyle. A directive to send such a letter in accordance with that practice was sometimes given by Mr Foster by email using the Bill Imom email address. Examples of such emails formed part of Mr Emerton’s evidence, e.g. email of 20 June 2010 to “Layla” (i.e. Ms Kenny). In such emails, it was Mr Foster’s practice to maintain the fiction that the real Peter O’Brien had spoken with the prospective franchisee. Thus, the email of 20 June 2010 from Mr Foster (using the Bill Imom email address) to Ms Kenny states:

Welcome letter please

He impressed Scott and POB

He bought two areas

You can get the names and areas off the master list

Thanks

References in emails to POB or to Peter O’Brien formed part of a concerted endeavour in cross examination and then in related submissions to discredit Mr Emerton’s evidence on the basis that he was falsely stating that the Peter ‘O’Brien (or abbreviated versions of that name) were Mr Foster when in fact they were, and to Mr Emerton’s knowledge were, the real Mr O’Brien. Viewed in isolation, I may have had doubts about such apparent third party references. Viewed against the whole of the evidence of Mr Foster’s intimate involvement from inception with and control of SensaSlim’s operations, the conclusion to which I have come is that such third party references are indeed, as Mr Emerton stated, the maintenance of a fiction by Mr Foster.

219    On 1 July 2010 Mr Foster, using the Peter O’Brien email address, sent by email to Mr Emerton for his editing and revision a draft of the first SensaSlim newsletter. Mr Emerton also recalled in his evidence (and I accept) that there were occasions when he called Mr Foster so as to arrange for him to call a prospective franchisee and that Mr Foster responded to him in words to this effect, “I can’t speak with them now; I’m too busy; I’ve got to get this newsletter out.” Mr Emerton was unable to be specific as to when such occasions arose.

220    Taken in conjunction with Dr Waters’ evidence on the subject of Sensaslim newsletters, I do not doubt that Mr Foster was involved in the drafting or settling of more than just the first SensaSlim newsletter. That finding is sufficient for the particular 1.3(f) in charge 1 but it does not show that the Commission has proved beyond reasonable doubt that Mr Foster was knowingly concerned in the circulation of SensaSlim Newsletters 5, 7 and 8 as particularised in paragraphs 2.4, 2.5 and 2.6 under charge 2. The evidence as to Mr Foster’s involvement in the production and circulation of newsletters does not descend to that degree of particularity. The evidence discloses that the newsletters were circulated to franchisees using a generic SensaSlim email address rather than, for example, via the Peter O’Brien email address. Thus, while there is neither doubt on the evidence that the newsletters were circulated to franchisees, nor that the content of these newsletters contained a representation, that the efficacy of the Sensaslim product had been established by a large worldwide clinical trial, Mr Foster’s knowing involvement in the making of that representation by the circulation of those particular newsletters is not established. I have expressly considered whether or not I ought to regard these particulars as necessarily established by inference. I do not consider that the evidence permits the drawing of an inference to the degree of particularity of knowing involvement on his part in respect of those nominated newsletters. To this extent, I am not satisfied that all of the particulars given under charge 2 are proved beyond reasonable doubt. I consider later in these reasons for judgment the ramifications of that particular failure of proof in respect of charge 2.

221    Another feature of Mr Foster’s management and control of SensaSlim’s business, related by Mr Emerton, was a concern that those responding to canvassing advertisements not be made aware that the business was operated from the Gold Coast. It was to this end that the registered office of SensaSlim was in Sydney at a serviced office. It was for a like reason that the information pack for prospective franchisees included a letter from a Sydney based firm of solicitors.

222    Mr Emerton received no instruction from Mr Foster to draw to the attention of prospective franchisees or to those whom he signed up the existence of the order made by Lander J in this proceeding or where a copy of those orders could be obtained nor did he ever draw that order or where it could be obtained to the attention of any such person.

223    Mr Emerton’s wife, Vicki also gave affidavit and oral evidence. In that evidence she gave a substantially similar account to that of her husband as to the course of the initial meetings in late 2009 and early 2010 between Mr Foster, her husband and her. She also corroborated her husband’s receipt and editing of the first draft of the SensaSlim newsletter. I found her a credible witness, a finding which expressly includes my impressions of her under cross-examination.

224    The evidence given by Mr Foster and Mr Reichelt attested to a quite different situation in relation to the management and control of SensaSlim. I found neither of them to be a credible witness. I remind myself that such a finding does not at all prove the Commission’s case, much less prove it beyond reasonable doubt. The onus of proof remains on the Commission and it must still discharge that onus by the proof of the charges beyond reasonable doubt. All that discounting the evidence given by Messrs Foster and Reichelt (and, for that matter and as explained above, Dr Morrison), does is to require that the Commission’s evidence satisfy me that the charges have been proved beyond reasonable doubt.

225    Mr Foster’s account was that, after his release from jail in May 2009, he worked on his autobiography during the course of 2009 and 2010. For about 8 or 9 months after his release, that work constituted, he said, his full time job. Towards the end of 2009 Mr Foster said that he was contacted by Mr Adams, a friend of an ex-girlfriend of his. The contact occurred, Mr Foster said, because Mr Adams wanted advice from him about the marketing in the United Kingdom of a microwavable food product under the name “Direct Gourmet” to be manufactured in Australia and exported to the United Kingdom. Accepting as I do Dr Waters’ evidence, I do accept, as related above, that Mr Adams also had an association with a business unrelated to SensaSlim known as “Direct Gourmet” and that Mr Foster did provide advice to Mr Adams in relation to that business. It is just that this conclusion does not cause to me doubt that Mr Foster was knowingly concerned in the conduct of SensaSlim’s business.

226    Mr Foster related that he was aware that Mr Reichelt, a longstanding (about 30 years) friend of his, who was then resident in the United Kingdom, owned a business which manufactured pies and exported them for sale in the United Kingdom. The query made of him by Mr Adams prompted Mr Foster, so he stated, to get in touch with Mr Reichelt and apprise him of Mr Adams product. In turn, this led Mr Reichelt, some time later, so Mr Foster related, to put to him (Mr Foster) that they “were seeking an agent in Australia for the SensaSlim product”. Mr Foster said that, on internet searches, he found “100s” of blogs from January 2008 to July 2008 as to a worldwide trial of this product. He confessed in his evidence that he knew that he could not be involved in the product because of this Court’s order and that he told Mr Reichelt this when he reverted to him. He stated that he suggested to Mr Reichelt that “Billy Tracey” and Mr Ryan might wish to be involved.

227    Later, according to Mr Foster, Arabella’s then boyfriend, Dr Waters asked him for advice about a safety product on which he and Michael Boyle were working. Mr Foster stated that he informed Dr Waters that there was no money in safety products and that the only products which made money were diet and beauty products. He stated that he then mentioned to Dr Waters Mr Reichelt’s SensaSlim product and that Dr Waters expressed interest in this.

228    Mr Foster was adamant that he did not become involved in SensaSlim. Rather, he stated that he “continued with the Direct Gourmet issue” and agreed to become a consultant to CPG in the United Kingdom with respect to all of that company’s food products. CPG, he explained, was a company owned by Mr Reichelt and his partner (i.e. business partner), Mr Richard Cooper. He stated that he sought approval from his parole supervisors for such an appointment. Documents from his probation and parole supervisor confirm that such approval was sought by him. Mr Foster stated that CPG “also was involved with Sensaslim International which licensed SensaSlim Australia” so he had some knowledge of “what SensaSlim was doing but I deliberately did not involve myself with SensaSlim”.

229    Mr Foster stated that, in 2010, CPD “wanted to buy a resort in NSW’ and that, because his parole officers were “very concerned about my being involved in real estate” he ended up quitting CPD in early 2011. Instead, he stated, he “decided to sit on the beach” until his parole expired.

230    Mr Foster stated that Mr Reichelt and Mr Cooper came to Australia in late 2010 and that he had dealings with them in relation to Direct Gourmet.

231    Mr Foster stated that he had met Mr Emerton in December 2009 in company with Mr Ryan. The purpose of the meeting, so Mr Foster stated, was that, “Scott had a scheme with an EFTPOS machine which could be sold to retailers”. Inferentially, if Mr Foster’s evidence is to be believed, they discussed that scheme, for Mr Foster also stated that he told Messrs Emerton and Ryan that he did not think it was a very good scheme and “That was the end of that”. Mr Foster later gave in evidence a convoluted account of Dr Waters coming to him in about October 2010 “in tears” so as to tell him that Mr Emerton had had a bad falling out with Peter O’Brien, was claiming to be owed $140,000 and that, if not paid, would go to “A Current Affair” and state that he (Mr Foster) owned SensaSlim. He related conversations with Messrs Duffy and O’Brien in 2011 and emails from Mr Emerton in relation to further demands for payment by Mr Emerton. Mr Foster comprehensively addressed and denied in oral and affidavit evidence the evidence given by Mr Emerton.

232    In the face of the contact which he admitted having with Mr Emerton in January 2009 in respect of an unrelated product I found Mr Foster’s account of the background to Mr Emerton’s threat to go to “A Current Affair” and later to the Commission fanciful. The conclusion which I reached in relation to this was that here, too, Mr Foster was dissembling. Because it was convenient so to do when dealing with other evidence on a particular topic, I have highlighted above other examples of what I concluded was dissembling on his part in the course of his evidence. That was my overall impression of his evidence, both given by affidavit and orally.

233    That dissembling extended to the explanation which he gave as to internet connections at the Norseman Court house being able to be used by others because “there was an unsecure wireless connection at the house”. Mr Foster mentioned that there were many visitors to the Norseman Court house, conveniently, I find, then mentioning in particular Mr McMullan, Mr O’Brien, Mr Adams and Mr Duffy. He also mentioned that Arabella and “Liana” (inferentially, Liana Emberg) worked for SensaSlim. He stated that, “People used smart phones, iPads and computers all the time.” I found this explanation contrived and not credible. I reached the same conclusion in relation to an explanation which he gave as to the Carrara house - it was “previously wired to an extraordinary degree because the occupant had some sort of contract with the Australian military” and “There was no password on the system”.

234    It was convenient to detail Mr Foster’s account and my findings as to the production of the SensaSlim DVD when relating Mr Frare’s and Mr Woolley’s evidence. I should additionally record that Mr Frare did concede that there had been a need to reshoot scenes in the DVD because of the death during the course of production of the narrator, a Mr Thornton. He had not mentioned this in his evidence in chief. I thought that his recollection of this was quite genuinely prompted in cross-examination. It did not cause me to discount Mr Frare as a credible witness.

235    At the time when Mr Reichelt gave his evidence, he was under sentence of imprisonment in the United Kingdom for an offence unrelated to SensaSlim. That sentence included periods of day release. It was during one of these that Mr Reichelt gave, via video link from the United Kingdom, the oral portion of his evidence. It was a necessary and unavoidable feature of my case management of the proceeding pre-trial, as well as undertaking the trial itself, that I became aware that Mr Reichelt was under sentence of imprisonment. As with Mr Foster, I considered that it was a necessary discipline to put that awareness to one side when assessing Mr Reichelt’s credibility and I have done so.

236    Mr Reichelt was once a solicitor practising in Australia. In the course of his practice here he came to know Louise and her son, Mr Foster. In 1992, Mr Reichelt moved to the United Kingdom. Between 1992 and 2003, his main business there was acting as a consultant for a law firm based on The Strand and, in that capacity, acting as an agent for Australian companies which wished to do business in the United Kingdom. In 2006, in partnership with another Australian lawyer who had moved to the United Kingdom, Mr Richard Cooper, Mr Reichelt established (caused to be incorporated) CPG. CPG provided marketing and agency services to clients many of whom were contacts which Mr Reichelt had made during his earlier consultancy work.

237    All of this background evidence I accept.

238    Mr Reichelt related that, in 2009, “we” (inferentially intended to be a reference to CPG) were contacted via an accountant and asked to act as a consultant to SensaSlim International, which he stated was a subsidiary of SensaSlim Suisse. SensaSlim International, he stated, had been set up by the firm “Jordans”.

239    Mr Reichelt stated that, in late 2009 or early 2010, he and Mr Cooper (inferentially CPG) were contracted to assist SensaSlim Suisse in seeking investors to buy the rights in various countries to sell its diet product. As a result and knowing that Mr Foster had been involved with diet products in the past he came to contact Mr Foster only to be told by him that he was prohibited from engaging in the diet industry in Australia. Mr Reichelt further stated that Mr Foster had said to him that he would refer the investment to friends or contacts which he had who might be interested. In this fashion, Mr Duffy came to get in contact with him and then, through Mr Duffy, Mr Boyle and Dr Waters.

240    He stated that the instructions to CPG came via Jordans, the accountant and via discussions with and emails from Mr William Duffy and Mr Peter O’Brien. Mr Duffy, he stated, he had met in Australia previously. Mr O’Brien, he stated, he had not met before and did not meet until a visit to Australia in 2010. Mr Reichelt deposed to “frequent communication” mainly with Messrs Duffy and O’Brien but also occasionally with Mr Boyle and Dr Waters in relation to SensaSlim.

241    Mr Reichelt stated that Mr Foster was not involved in SensaSlim to his knowledge. As to Mr Foster, Mr Reichelt related a discussion which he had with him in late 2009 or early 2010 about taking up a consultancy assisting CPG by finding further clients in Australia who would wish to use its services in relation to the facilitation of product export to the United Kingdom.

242    Mr Reichelt deposed that Mr and Mr Cooper had attended, at the request of Messrs Adams and O’Brien, the SensaSlim product launch on the Gold Coast in, as he recalled, about December 2010. He placed Dr Waters at that product launch. In this I find he was mistaken. I prefer Dr Waters’ evidence that he did not attend that launch. Dr Waters is the more reliable historian as to the operations of SensaSlim and, in particular, Mr Foster’s involvement in its business. His account is substantially corroborated by that of Mr Emerton. I have related above other evidence which points inexorably to a conclusion that Mr Foster was involved in the SensaSlim business.

243    Mr Reichelt admitted to being a party to a telephone conversation about New Zealand rights to the SensaSlim product in the terms Mr Coffey (although he did not in evidence recall Mr Coffey by name as a party to that telephone conversation). He listened to a DVD containing an audio file of the recording made by Mr Coffey. Mr Reichelt expressed the belief that it was Mr O’Brien’s voice on the recording on the basis of his having spoken with Mr O’Brien both in Australia (at the launch) and by telephone from the United Kingdom.

244    Mr Reichelt’s explanation as to how he came to contact Mr Foster was, I thought, contrived. Once again, I prefer Dr Waters’ evidence. Overall, Mr Reichelt’s evidence as to a lack of involvement by Mr Foster was at odds with what I consider to be an overwhelming case derived from the evidence led by the Commission, to which I have referred above, that Mr Foster was involved, and deeply involved at that, in SensaSlim’s business. Quite apart from the evidence given by Dr Waters and Mr Emerton, Mr Reichelt’s evidence as to Mr Foster’s having no involvement is at odds with that of Messrs Hansen, Frare and Woolley. Of course, it might be that Mr Reichelt could not have known of this type of involvement by Mr Foster, because Mr Reichelt was in the United Kingdom. Mr Reichelt was though a party to the conversation with Mr Coffey. His opinion that it was Mr O’Brien’s voice does not cause me to doubt the opinion given by Dr Storey-White as to the identity of the “MS2 voice” on the recording. It is that opinion which is consistent with the whole of the evidence, not that of Mr Reichelt. Mr Reichelt’s opinion that the voice was not that of Mr Foster is not to be relied upon.

245    I accept that Mr Reichelt did have dealings with Dr Waters. I do so because this is corroborated by Dr Waters. However, the nature and extent of those dealings was as stated by Dr Waters, not Mr Reichelt.

246    Drawing this disparate account of the evidence and of related findings together, I conclude that the Commission has proved, beyond reasonable doubt the following in respect of charge 1:

(a)    The Court (Lander J) did make an order in these proceedings on 2 September 2005 as alleged.

(b)    Mr Foster was aware of the terms of that order in the period from December 2009 to 2 September 2010 (“the material period”).

(c)    During the material period, SensaSlim conducted a business relating to weight loss.

(d)    During the material period, that business involved, amongst other things:

(i)    The manufacture and supply to franchisees for placement in retail outlets in an allotted franchise area of an orally administered spray promoted as a weight loss aide.

(ii)    The entering into franchise agreements with franchisees for the distribution for reward by them to retailers in their allotted franchise area of that product - the SensaSlim product.

(iii)    The SensaSlim business also involved, in terms of the agreements made with Area Managers, the supply of services to those managers such as training, marketing and sales support.

(iv)    Again in terms of such agreements, that business also entailed the granting of a licence to the Area Manager, within an allotted franchise area, of the right to distribute the SensaSlim product and use its logo and its trade mark, “Nothing tastes as good as slim feels”.

(e)    During the material period, Mr Foster, by the editing and supply of a script and some raw footage, prepared some of, and by the commissioning of Messrs Frare and Woolley on behalf of SensaSlim, caused to be prepared, the SensaSlim promotional DVD.

(f)    During the material period, Mr Foster prepared some at least and approved some at least and by necessary inference flowing from the evidence of Dr Waters and Mr Emerton caused to be published newspaper advertisements which, though they did not state the same in terms, advertised what was in fact an opportunity to become a franchised Area Manager for the distribution of the SensaSlim product.

(g)    During the material period, Mr Foster prepared some at least of the Area Manager Proposal and, inferentially, also prepared or caused to be prepared the related documents for disclosure to prospective franchisees. He did this in consultation with Mr Emerton.

(h)    During the material period and under the alias “Peter O’Brien”, Mr Foster engaged in conversations by telephone with prospective area managers so as to encourage them to enter into franchise agreements with SensaSlim for the distribution of its product.

(i)    During the material period, Mr Foster, using the alias email addresses mentioned above, engaged in email correspondence with prospective franchisees regrading SensaSlim’s business to encourage them to enter into franchise agreements.

(j)    During the material period, Mr Foster prepared, in consultation with Mr Emerton, some at least of the newsletters distributed to Area Managers. He was undoubtedly involved in the preparation of other newsletters than the first but it is not possible on the evidence to conclude with the preparation of which particular later newsletters he was involved.

(k)    During the material period, Mr Foster controlled and directed the process for engagement by Sensaslim with potential Area Managers and the entry by SensaSlim of franchise arrangements with Area Managers. This control and direction is directly proved via the evidence of Mr Emerton and Ms Stainstreet.

247    I therefore find charge 1 proved. Mr Foster was directly knowingly concerned in the conduct of this business of SensaSlim.

248    As to charge 2, I conclude that the Commission has proved, beyond reasonable doubt, that, in the material period, Mr Foster was knowingly concerned in SensaSlim, in trade or commerce, making representations as to a particular standard or quality of the SensaSlim product without, prior to the making of that representation, SensaSlim providing the representee with a copy of the order made by the Court on 2 September 2005, or informing the representee of the existence of those orders and giving the representee the address of the court’s website.

249    The evidence establishes, to the requisite standard, that the Court (Lander J) on 2 September 2005 made the order alleged in charge 2 and that Mr Foster was aware of the terms of that order during the material period.

250    As to other particulars given in respect of charge 2, the evidence establishes, beyond reasonable doubt, that, during the material period:

(a)    SensaSlim conducted the business as alleged and found proved in respect of charge 1.

(b)    From about mid-March 2010, SensaSlim provided prospective Area Managers with the Area Manager Proposal and showed those prospective managers the SensaSlim promotional DVD.

(c)    In that promotional DVD there is a representation that the SensaSlim product was the subject of a large world-wide clinical trial and that the trial established the efficacy of the SensaSlim product for weight loss purposes. That representation was a representation that the Sensaslim product was of a particular standard or quality namely, that its efficacy had been established by a world-wide clinical trial.

(d)    Those prospective Area Managers who were provided with the Area Manager Proposal and who were shown the promotional DVD were not provided with a copy of the Court’s orders of 2 September 2005 or made aware of those orders.

251    It follows that my further conclusion is that those particulars given in paragraphs 2.4, 2.5, 2.6 and, to the extent that they refer to Newsletters 5, 7 and 8, those given in paragraphs 2.7 and 2.8, are not proved to the requisite standard. This does not mean that Mr Foster must be found not guilty in respect of charge 2. Rather, it means that the charge is proved only to the extent otherwise particularised in that charge.

252    Given Mr Foster’s intimate involvement in the formulation of the Area Manager Proposal, to the extent of highlighting those parts to be read out and those which could be omitted from reading out to prospective Area Managers, his intimate involvement in the content of the DVD and his knowledge of the terms of the Court’s orders of 2 September 2005, I am also satisfied that the omission of any reference to those orders in the Area Manager Proposal or in the DVD or in instructions otherwise given to sales staff was a deliberate decision on Mr Foster’s part. That deliberate omission was but part of a deliberate course of conduct on Mr Foster’s part, evidenced by his assumption in telephone conversation and emails of aliases, to conceal his involvement in Sensaslim’s business from the outside world in general and prospective Area Managers in particular.

253    If only to highlight that the submission has not been overlooked, I record that, in reaching my conclusion that the charges are, to the extent indicated, proved, I have not, as I was invited to do on the part of the Commission, drawn any adverse inference on the basis that, for example, William Duffy and Arabella did not give evidence. For any such inference to be drawn, the evidence of such witnesses, the facts in respect of which such witnesses might give evidence must be additional to those already given in evidence by those witnesses who were called: Azzopardi v The Queen (2001) 205 CLR 50 at [64] (emphasis in original). As was there stated by Gaudron, Gummow, Kirby and Hayne JJ:

Mere contradiction would not be evidence of any additional fact. In an accusatorial trial, an accused is not required to explain or contradict matters which are already the subject of evidence at trial. These matters must be assessed by the jury against the requisite standard of proof, without regard to the fact that the accused did not give evidence.

[Emphasis in original]

I have judged Mr Foster on the basis of all of the evidence which was led, not that which was not. Further, it was never for Mr Foster to prove his innocence. It bears repetition that it was always for the Commission to prove the charges made against him and to do so beyond reasonable doubt. Mr Foster was not obliged to give evidence himself or to call any other evidence. As it happens, evidence was led on behalf of the Defence, including from Mr Foster himself. Also as it happens, I did not find the evidence given by Messrs Foster, Reichelt or Ryan credible and neither did that given by Dr Morrison cause me to reject the probative value of the opinions expressed by Dr Storey-White. As I have stated, these conclusions did not prove the Commission’s case. Rather, on the whole of the evidence and for the reasons given above, I am satisfied that the Commission has, to the extent indicated, proved beyond reasonable doubt the charges which it brought.

254    The charges being, to the extent indicated, proved, it will be necessary to hear from the parties as to the form of orders which ought to be made to give effect to these reasons for judgement and in respect of penalties and costs. I propose to fix 24 October 2013 as the date for the hearing of such submissions and to make related, consequential directions. It may also be necessary to receive submissions today as to what variation, if any, should be made, pending a further hearing in respect of these issues, to the existing order governing Mr Foster’s present release from custody.

Associate:

Dated:    27 September 2013