The Victorian Court of Criminal Appeal overturned three counts of obtaining financial advantage by deception contrary to section 82(1) of the Crimes Act 1958 (Vic), but upheld six counts of the same charge.

“The Appeal Court held that the depositional evidence of two witnesses should not have been admitted in Mr Johnston’s trial,” ASIC stated.

“It held that the medical evidence relied on by the prosecution was inadequate to establish that the witnesses were unable to give evidence at the trial.”

The Victorian Court of Criminal Appeal has ordered a retrial for the three charges on a date yet to be fixed.

The Court of Appeal will re-sentence Mr Johnston on the remaining six charges at a later date.

The Commonwealth Department of Public Prosecutions prosecuted the matter after a referral from ASIC.

Following a two-week trial in the County Court of Victoria in 2019, Mr Johnston was sentenced to six years of imprisonment for defrauding investors of approximately $815,000.

In a public statement issued at the time, ASIC said that Mr Johnston acted with his wife Maureen Johnston to secure funds from investors, lying about how the money would be used.

During the period January 2010 to November 2013, investors deposited money into a bank account of Small Business Management Pty Ltd on the basis that they would make returns on their investments.

In some cases, Mr Johnston set up SMSFs for investors, with the promise of managing the money on their behalf.

ASIC said that Maureen and Douglas Johnston were originally charged together on 20 December 2017. Mrs Johnston pleaded guilty in the County Court of Victoria and was sentenced to five years and six months of imprisonment.