Rural & General Insurance founder Charles Pratten is free after the NSW Court of Criminal Appeal quashed his convictions over tax fraud and ordered a retrial.

The three appeal judges found the trial judge erred in directions given to the jury at Mr Pratten’s 53-day trial in 2012.

They say that except for this error, “it would not be dangerous to allow the verdict of guilty to stand”.

Mr Pratten was convicted in June 2012 on seven counts of dishonestly obtaining a financial advantage by deception, relating to tax returns between 2003 and 2009.

The Commonwealth alleged he knowingly understated his taxable income by about $5 million, and that some of that money was paid from Vanuatu accounts to third parties and used to pay for private school fees, a helicopter, a boat and property.

However, when Mr Pratten was sentenced in March this year the judge said $2.77 million was undeclared income resulting in a financial advantage.

Mr Pratten was sentenced to three years and six months in jail, backdated to March last year, plus six months to be served concurrently and 750 hours of community service.

The court ordered he be released on September 29 this year on a two-year good-behaviour bond.

He had denied the charges and appealed against the decision.

Mr Pratten told insuranceNEWS.com.au he is considering an appeal to the High Court.

The Commonwealth Director of Public Prosecutions has already appealed against the sentences, arguing they were “manifestly inadequate”.

The appeal judges did not deal with this because they ordered a new trial. The Appeal Court handed down its decision on July 1 after a hearing last month.

The court says that after Rural & General Insurance ceased business in Australia in 2002, a company called Rural & General International Insurance was incorporated in Vanuatu, later changing its name to Commercial Pacific Insurance (CPI). 

Mr Pratten became a director of another company, Rural & General Insurance Broking, which placed commercial insurance with CPI.