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All Charges Dropped in Complex $25M Fraud Case

"Through sustained cross-examination of the Crown’s witnesses, the defence teams extracted critical and material facts that had been absent in the Crown’s case."

Guest Lawyers have successfully defended one of Queensland’s largest, complex and protracted fraud proceedings heard before the District Court of Queensland at Brisbane. On 10 October 2018, following a number of court hearings, the Office of the Director of Public Prosecutions accepted a submission to discontinue all offences before the Court.

This was a “document heavy” trial, with the defence team having to review over 40,000 pages of material. These proceedings commenced in October 2013 and concluded 5 years later in October 2018, following the presentation of the Crown’s case at three separate jury trials, each of which ended as a mis-trial. After the third mis-trial, the Crown eventually withdrew all charges with no verdict entered against the client, following an intensive cross-examination of the Crown’s witnesses by the defence team.

Kris Jahnke, led the team at Guest Lawyers since 2013, defending its client Mr Rahoul Ray against charges arising from a commercial land transaction involving a property known as “Yalanga” in the Noosa area, Queensland. Guest Lawyers instructed Mr Chris Wilson and Mr Damian Walsh of the Queensland Bar for Mr Ray. Mr Ray’s co defendant in the proceedings was Mr Erwin Walter Filler, who was independently defended by Rostron Carlyle Rojas lawyers and Mr  Greg McGuire of the Queensland Bar. Vincent’s Accountants were engaged as experts for the defence.

The Crown’s multiple fraud charges related to a commercial land contract for the purchase of “Yalanga” for $25m in 2010 by a wholly owned subsidiary of Nexis Holdings PLC (a UK research and development company, recently listed on Frankfurt Stock Exchange), from Suncoast Pastoral Company Pty Ltd. Mr Ray and Mr Filler were directors of Nexis and the subsidiary company. The overall deal was arguably complex and non-conventional, perhaps reflecting commercial realities of closing large transactions in the aftermath of the Global Financial Crisis. The nub of the deal was the sale of “Yalanga” by Suncoast for $7m cash (being 50% of the bank valuation of $14m for “Yalanga”) with the balance of sale price being paid for with the issue of Nexis shares. The vendor was also required to lease back the property “Yalanga” for 5 years. During 2010 Nexis was also heavily engaged in a major global capital raising effort, in order to commercialise its technology and start building plants worldwide. As part of the Yalanga deal, Nexis agreed to sell a $4m parcel of shares issued to Suncoast in early 2011 via this capital raising on a “best endeavours basis”. This proposed sale of shares did not occur due to market conditions eventually faced by Nexis shares at the time. During 2011, Nexis shares collapsed in price on the Frankfurt Stock Exchange, Suncoast stopped making lease payments on “Yalanga” and Commonwealth Bank of Australia (being the lender to the deal) took possession of “Yalanga”, which was eventually sold during 2012 for approximately $4m.

Through sustained cross-examination of Crown’s witnesses, the defence teams extracted critical and material facts that had been absent in the Crown’s case. These presented an entirely different picture on the circumstances under which the “Yalanga” land transaction was negotiated and concluded. This resulted in the Crown withdrawing all charges against Mr Ray and Mr Filler, prior to the defence teams having to open their case in a new trial.

In commenting upon the Crown’s decision to withdraw all charges in the case, Mr Kris Jahnke of Guest Lawyers said:
“The Crown’s decision to drop all charges against Mr Ray and Mr Filler is welcomed. Our client Mr Ray, and his co-defendant Mr Filler, were in our opinion not guilty of the allegations and we were of the firm belief that a jury would return verdicts accordingly.”