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nsw_caselaw:549fd4fa3004262463befedd:37
nsw_caselaw:549fd4fa3004262463befedd
197 Once again, there is considerable force in the Defendant’s submissions on this point. Even if the Plaintiff had established forgery on the Defendant’s part, very substantial hurdles lay ahead of him in the present proceedings before a verdict and an award of damages would have been made in his favour. Costs 198 Mr Bell SC made written and oral submissions that, if a verdict was found in the Defendant’s favour, an order should be made that the Plaintiff pay the Defendant’s costs on an indemnity basis: s.98(1)(c) Civil Procedure Act 2005; Part 42.5 UCPR. 199 It was submitted that the Plaintiff had made an allegation of criminal conduct against the Defendant on the flimsiest of evidence and without any rational foundation. Either the Defendant was guilty of a criminal offence or the Plaintiff had deliberately propounded a grave allegation which he knew to be false for the collateral purpose of avoiding, or delaying, a bankruptcy order against him. The case depended on the account of the Plaintiff, an admitted liar, and Item 33 in his diary, which was thoroughly discredited in the Federal Court. The expert handwriting evidence tendered in his favour was, at best, inconclusive. Mr Ireland QC acknowledged that the expert evidence was equivocal. In bringing the case to trial, the Plaintiff can be taken to have known of the rigorous standard of proof he needed to discharge before his allegations could be accepted. The Defendant submitted that it must always have been clear, or ought to have been clear, to the Plaintiff that the evidence would not reach that standard. 200 It was submitted that the case as advanced by the Plaintiff was appropriately characterised by Bryson JA in the Court of Appeal at paragraph 54 as being “in the realm of the fantastic” and “a fairy tale”. 201 Mr Bell SC referred to the judgment of Sheppard J in Colgate-Palmolive Co v Cussins Pty Limited (1993) 46 FCR 225 at 233 and submitted that an indemnity costs order was appropriate in this case having regard, inter alia, to the Plaintiff making allegations of fraud knowing them to be false, the commencement and continuation of proceedings for an ulterior motive and a wilful disregard of known facts. It was submitted that the particular facts and circumstances of the present case warrant the making of an order for costs on an indemnity basis. 202 It was submitted that where a litigant advances an allegation of serious criminal conduct without strong evidence to support it and that case fails, it is appropriate for the Court to consider ordering the Plaintiff to pay the Defendant’s costs on an indemnity basis: White Constructions (ACT) (In Liquidation) v GB White and Ors [2004] NSWSC 303. An order for indemnity costs is also appropriate, it was submitted, where a litigant advances a claim that he knows is false: Zaravinos v Houvardas [2004] NSWCA 421 at paragraph 76. Mr Bell SC submitted that these propositions have application to this case and that an order for indemnity costs ought be made. 203 Mr Ireland QC accepted that, if the submissions of the Defendant adverse to the Plaintiff were accepted at their highest, then the Court would probably accede to an order for indemnity costs (T271.50). He submitted, of course, that those findings ought not be made. In the event that the Plaintiff’s claim failed on a basis which did not involve complete acceptance of the Defendant’s submissions, Mr Ireland QC submitted that an opportunity might be given to make submissions as to costs following the delivery of judgment. 204 The findings made by me involve, in essence, complete acceptance of the submissions made on behalf of the Defendant. Not only have I rejected the Plaintiff’s claim of forgery by the Defendant, but I have found that the Plaintiff himself wrote the disputed signature on the guarantee.
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null
nsw_caselaw:549fd4fa3004262463befedd:24
nsw_caselaw:549fd4fa3004262463befedd
120 Mr Ireland QC developed an argument in submissions arising from the Bank’s internal memoranda (Exhibits E and L) and cross-examination of the Defendant that the Defendant had failed to comply with requirements of the Bank in a number of respects on 3 June 1998 and thereafter had made misleading statements to his superiors concerning aspects of the Holloways Beach Project. It was submitted that these aspects provoked fear in the Defendant which motivated him to forge the Plaintiff’s signature on or before 24 June 1998. 121 Mr Ireland QC submitted that the Defendant had failed to comply with the Bank’s written procedures in the manner in which he had Mr Bruce sign his guarantee on 3 June 1998. The Defendant explained his position in his affidavit of 10 March 2006 (paragraphs 20-22) to place in context his approach to Mr Bruce as a “vulnerable guarantor”. I accept the Defendant’s account on this issue. 122 The Plaintiff submitted that misleading statements were made by the Defendant in a memorandum to his superior, Mr Roams, on 10 June 1998. It was submitted for the Plaintiff that, amidst a series of procedural irregularities, the Defendant discovered that the Plaintiff had not signed the guarantee and determined then to forge his signature. Mr Ireland QC submitted that this course was taken through fear of the internal consequences within the Bank and the large borrowings which had been advanced by that stage on an unsecured basis. 123 Mr Ireland QC emphasised in submissions the Bank’s internal inquiry commenced in July 1998 concerning the Holloways Beach Project. A memorandum was prepared by Mr Starkey of the Bank’s Compliance and Monitoring Department and his report was critical of the Defendant. Criticisms were made of the Defendant’s written response of 4 August 1998 to Mr Starkey’s memorandum. The Plaintiff submitted that the Defendant was in deep trouble with the Bank and that this provided a barometer of the climate in which he had determined, in June 1998, to forge the Plaintiff’s signature. By September 1998, advances in excess of $2.3 million had been made to Deangrove without the formal discount facility having been actioned within the Bank. All of this, it was submitted for the Plaintiff, shed light upon the Defendant’s thought processes at critical times and supported the Plaintiff’s case that the Defendant had forged his signature on the guarantee by 24 June 1998. 124 Mr Bell SC submitted that the Plaintiff’s contention that the Defendant’s fear pressured him to forge the Plaintiff’s signature lacked logical foundation. Firstly, the proposition was squarely rejected by the Defendant himself. Secondly, it was common ground that the Plaintiff had signed page 13 of the guarantee on 3 June 1998, that by 24 June 1998, Deangrove had drawn down $1.47 million only out of the total facility of $7. 55 million (Exhibit L, page 56) and that, if at any time between 3 and 24 June 1998, the Defendant had realised that page 12 of the guarantee had not been signed, he could have simply asked the Plaintiff to sign it (Defendant’s affidavit, 10 March 2006, paragraph 25; T154. 33). It would have been obvious to the Defendant that the Plaintiff would have signed it, because if he did not, the Bank would have refused to advance any more money under the facility. 125 It was submitted that no rational proposition had been advanced or put to the Defendant about what it was that he was so afraid about that he would commit a criminal act and forge the Plaintiff’s signature. 126 Insofar as the Plaintiff criticised procedural deficiencies on the part of the Defendant identified in the Bank’s internal inquiry, Mr Bell SC submitted that the Defendant was not on trial for negligently implementing a loan.
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nsw_caselaw:549fd4fa3004262463befedd:0
nsw_caselaw:549fd4fa3004262463befedd
New South Wales Supreme Court CITATION : Jeans v Cleary [2006] NSWSC 647 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 13 June 2006, 14 June 2006, 15 June 2006, 19 June 2006 JUDGMENT DATE : 28 June 2006 JUDGMENT OF : Johnson J at 1 DECISION : 1. Verdict for the Defendant against the Plaintiff; 2. Plaintiff to pay the Defendant’s costs of the proceedings on an indemnity basis. CATCHWORDS : DECEIT - claim of forgery of signature on guarantee - whether forgery proved - expert handwriting evidence - claim of forgery rejected - element of reliance in tort of deceit Evidence Act 1995 LEGISLATION CITED : Imperial Acts Application Act 1969 (NSW) Civil Procedure Act 2005 Deangrove Pty Ltd v Commonwealth Bank of Australia [2003] FCA 268 Deangrove Pty Ltd v Commonwealth Bank of Australia [2003] FCA 470 Jeans v Commonwealth Bank of Australia (2003) 204 ALR 327 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Jeans v Cleary [2004] NSWSC 1245 Cleary v Jeans [2006] NSWCA 9 Commonwealth Bank of Australia v Jeans [2006] FCA 693 Tresize v National Australia Bank Limited (2005) 220 ALR 706 Integral Energy Australia v EDS (Australia) Pty Limited [2006] NSWSC 600 Derry v Peek (1889) 14 App Cas 337 Banditt v The Queen (2005) 80 ALJR 421 Gould v Vaggelas (1985) 157 CLR 215 Clark v Urquhart (1930) AC 28 Toteff v Antonas (1952) 87 CLR 647 Briginshaw v Briginshaw (1938) 60 CLR 336 Helton v Allen (1940) 63 CLR 691 CASES CITED : Rejfek v McElroy (1965) 112 CLR 517 Bannister v Walton (1993) 30 NSWLR 699 Neat Holdings Pty Limited v Karajan Holdings Pty Limited (1992) 67 ALJR 170 Director of Public Prosecutions v Hester (1973) AC 296 Doney v The Queen (1990) 171 CLR 207 R v E (1996) 39 NSWLR 450 R v Baskerville (1916) 2 KB 658 R v Whitehead (1929) 1 KB 99 Gawne v Gawne (1979) 2 NSWLR 449 R v Doney (2001) 126 A Crim R 271 R v Hannes (2000) 158 FLR 359; [2000] NSWCCA 503 Empirnall Holdings Pty Limited v Machon Paull Partners Pty Limited (1988) 14 NSWLR 523 Colgate-Palmolive Co v Cussins Pty Limited (1993) 46 FCR 225 White Constructions (ACT) (In Liquidation) v GB White and Ors [2004] NSWSC 303 Zaravinos v Houvardas [2004] NSWCA 421 Oshlack v Richmond River Council (1998) 193 CLR 72 Rosniak v Government Insurance Office (1997) 41 NSWLR 608 PARTIES : John Anthony Jeans (Plaintiff) Stephen Thomas Cleary (Defendant) FILE NUMBER(S) : SC 20049/04 COUNSEL : Mr JM Ireland QC (Plaintiff) Mr AG Bell SC; Mr DA McLure (Defendant) SOLICITORS : Moloney Lawyers (Plaintiff) JK O'Sullivan (Defendant) LOWER COURT DATE OF DECISION : --- LOWER COURT MEDIUM NEUTRAL CITATION : --- IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Johnson J 28 June 2006 20049/04 John Anthony Jeans v Stephen Thomas Cleary JUDGMENT 1 JOHNSON J: The Plaintiff, John Anthony Jeans, claims damages from the Defendant, Stephen Thomas Cleary, for the tort of deceit. He alleges that the Defendant forged the Plaintiff’s signature on a personal guarantee in June 1998.
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null
nsw_caselaw:549fd4fa3004262463befedd:14
nsw_caselaw:549fd4fa3004262463befedd
I made notes to take further notes, because what would happen is and what I found happened, is that people would ring you up and they would say something to you, and you would say - fine, just let me write that down - and then later they would call back or something would turn up and what they told you earlier was substantially different, and you’d say - that’s not what he said, I’d better go and check that and you’d write a note to the effect of what you understood the position to be at that time. So I would go and do that. So some of the notes that appear in your day books, and are transcribed annexure A, virtually could have been made months after the date that they purport to bear? --- If there was need for me to refer to them, certainly. It’s like a file. Can you identify which of the notes transcribed in annexure A were made months after the event? --- Well I have no idea. I’ve got diaries going back over 20 years. It follows from that, does it, that his Honour couldn’t rely upon these day books as being contemporaneous notes made on the date that they purport to bear? --- I couldn’t sit here and tell you that every single note was fully completed on that date that it was written, because I might have written it the next day, I might have written it - it’s a file, it’s like having a file. So you agree with my question, do you? --- I don’t agree --- HIS HONOUR: You had better repeat the question. MR BELL: His Honour therefore, can’t rely upon the notes which are transcribed in annexure A as being contemporaneous notes made at the time of the meetings and conversations to which they refer? --- That’s correct, absolutely.” 81 The Plaintiff was still under cross-examination by Mr Bell SC on 24 March 2003 when his attention was drawn to the original diary (Exhibit B). The Plaintiff was asked (Exhibit A, T252.15): “Now I want to show you your original day book so described for the period starting 3 June 1998. HIS HONOUR: Mr Jeans, you agree that is your day book covering that period, is that correct? --- That’s correct, your Honour. MR BELL: The diary starts at 3 June 1998, correct? --- That’s correct. Item 15 under the date 3 June 1998 states Steve Cleary. There is then a phone number? --- That’s correct. Do you agree with me so far? --- That’s correct. Then it says, doesn’t it, ‘Docs ready in about 15 minutes, come in 2.00 pm’, correct? --- That’s correct. Item 16 says, ‘Steve Cleary meeting 2.00 pm’, correct? --- That’s correct. It says, ‘That you’re to sign or signing up, get Wendy Cull to call’? --- Correct. Then item 33 on 3 June 1998 says, ‘Signed up, docs in reception, Steve Cleary them [sic] there for his girl on front desk. Will get him to witness later’. Is that correct? --- That’s correct. There’s two further entries marked 34 and 35, correct? --- Yes. Now you see, don’t you, that the entries marked 33, 34 and 35 are made with a different pen to the preceding entries, aren’t they? --- That’s correct. Entries 33 to 35 were made by you a long time after 3 June 1998, weren’t they? --- They wouldn’t - I don’t think they were made on the day. I couldn’t tell you when but they - I don’t think they were made on the day. You can’t say how much later they were made? --- Not off the top of my head, no. I don’t know. You certainly don’t suggest they were made on 3 June 1998? --- No, not with a different pen. But going back to entries 15 and 16 you say they were made on 3 June 1998, do you? --- Yes absolutely. It was all the same pen. That what’s happened, isn’t it, that you met Mr Cleary at 2.00 pm on 3 June to sign documents, including your guarantee, correct? --- Well, I can’t say I did meet Mr Cleary. It’s not my recollection of it. I went there to sign these documents but I’m not sure which documents or the content. I knew there was documents [sic] in that bundle but which exact documents I couldn’t tell you.
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null
nsw_caselaw:549fd4fa3004262463befedd:29
nsw_caselaw:549fd4fa3004262463befedd
The Concurrent Evidence of Mr Westwood and Mr Dubedat 148 Mr Dubedat was commissioned to provide an opinion for the Plaintiff concerning the disputed signature and he provided a report dated 28 October 2004 (Exhibit G). Mr Westwood was commissioned on behalf of the Defendant to provide an opinion concerning the disputed signature and provided a report dated 10 March 2006 (Annexure A, affidavit of Mr Westwood, 10 March 2006). Mr Dubedat provided a further report dated 24 May 2006 responding to a number of issues raised by Mr Westwood (Exhibit H). 149 A joint report dated 8 June 2006 was prepared by Mr Westwood and Mr Dubedat following a joint conference directed under Part 31 r 25 Uniform Civil Procedure Rules (“UCPR”). With the consent of the parties, an order was made that Mr Westwood and Mr Dubedat give concurrent evidence for the purposes of Part 31 r 26 UCPR. 150 The joint report (Exhibit K) indicated areas of agreement and disagreement between the experts. Following the joint report, Mr Westwood prepared a supplementary report dated 12 June 2006 and Mr Dubedat reviewed that report in his further report dated 14 June 2006 (Exhibit J). The reports of 12 and 14 June 2006 were prepared after each expert had an opportunity to examine the original guarantee document containing the disputed signature (Exhibit 4). 151 Both Mr Westwood and Mr Dubedat are well qualified to give expert evidence with respect to document examination. Mr Westwood has undertaken questioned document examination for more than three decades. He served as officer-in-charge in the Document Examination Bureau of the Commonwealth Police/Australian Federal Police from 1973 to 1983. Between 1984 and 1987, he served with other federal departments in the area of document examination. Since 1987, he has been engaged in private practice in the field of document examination. He frequently gives evidence in criminal and civil proceedings with respect to questioned documents. Mr Dubedat commenced formal training in the field of forensic document examination in 1987 whilst with the New South Wales Police Service. Since 1998, he has been in private practice as a document examiner. He has given evidence in a number of criminal and civil proceedings with respect to questioned documents. 152 The original reports of Mr Dubedat and Mr Westwood reflected significantly different conclusions. Mr Dubedat concluded that it was more probable than not that the disputed signature was written by someone other than the Plaintiff. Mr Westwood concluded that it was very probable that the disputed signature was written by the Plaintiff. The two experts have maintained those positions through the process of the joint conference for the purpose of preparing a joint report, and during their concurrent evidence in these proceedings. 153 The opinions of Mr Westwood and Mr Dubedat appear at paragraphs 40 and 41 of the joint report of 8 June 2006: “40. Mr Dubedat does not dismiss the possibility that the questioned signature may have been written by Mr Jeans but he believes this to be unlikely. Mr Dubedat is of the opinion that there is insufficient evidence in the questioned signature to implicate Mr Jeans as the author. 41. Mr Westwood is still firmly of the opinion that the questioned signature was very probably written by Mr Jeans in a somewhat distorted manner. He cannot determine if the distortion was intentional, an extreme variant or accidental.” 154 In circumstances where the Plaintiff bears the onus of proof with the Briginshaw gloss, this conflict in reputable expert evidence does not assist him. This issue is not to be resolved in isolation and the conclusions to be reached ought have regard to my findings concerning the reliability and credibility of the evidence of the Plaintiff, the Defendant and Mr Bruce.
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null
nsw_caselaw:549fd4fa3004262463befedd:31
nsw_caselaw:549fd4fa3004262463befedd
“53. Both Mr Dubedat and Mr Westwood agreed that in a forgery where the forger has a specimen signature, one would usually expect: (a) minimal if any prominent deviations from the usual signature of the person whose signature is being forged [T 190.54; 191.49]; (b) the replication of most if not all of the gross features of the usual signature of the person whose signature is being forged [T 191.8; 191.57]; (c) the forger not to have replicated any or many of these subtle features of the usual signature of the person whose signature is being forged [T 191.16; 192.23]; (d) those replicated features not to have been produced with speed and fluency [T 191.24; 192.34]. 54. Against those agreed principles, Mr Dubedat and Mr Westwood agreed that the signature on page 12 of the guarantee [T 192.40-194.11]: (a) exhibits a prominent feature not usually present in Mr Jeans’ usual signature, namely, the large anticlockwise circular movement at the beginning; (b) exhibits a number of features of Mr Jeans’ usual signature (listed at paras 2(c) - (h) of the joint report, exhibit K); (c) appears to have been written with speed and fluency. 55. Both Mr Dubedat and Mr Westwood agreed that the above factors were more consistent with Mr Jeans being the author of the signature, rather than it being a forgery by someone else [T 193.33-45; 194.11; 199.51]. 56. Both Mr Dubedat and Mr Westwood agreed that the presence of a rare feature in both specimen and questioned signatures may indicate common authorship, because it would be unlikely that a forger would be aware of and introduce such a feature [T 197. 56; 198.57]. Mr Dubedat said that as a general principle, the more rare or subtle features that are found in a questioned signature, the less likely it is to be forgery [T 198.22].” 163 In their joint report of 8 June 2006 (Exhibit K), Mr Westwood and Mr Dubedat identify 10 features of the disputed signature which are the subject of comment: “(a) The anti-clockwise elliptical introduction to the main body of the questioned signature; (b) the inflection in the line that crosses through the pencil drawn “x” and goes on to form the top of the first peak in the questioned signature; (c) the retracing of approximately half the length of the right hand side of the first peaked element; (d) the ratio of the lengths of the left sides of the second and third peaked elements is approximately 1:1; (e) the combination of retraced and open valleys between the peaked elements; (f) the lower right hand sides of peaked elements become progressively shorter; (g) the close horizontal spatial relationship between the top of the first and bottom of the second peaked elements, whereas the top of the second and bottom of the third peaked elements are horizontally offset; (h) the rising baseline alignment of the questioned signature falls within the range of variation of the baseline alignments of the specimen signatures; (i) the absence of a large circular movement at the end of the questioned signature is a feature of the specimen signatures; and (j) the tapered subtle anti-clockwise terminal spur.” 164 Mr Westwood and Mr Dubedat agreed on features (c), (d), (e), (f), (g) and (h). It was also agreed that the disputed signature was written with speed and fluency. However, Mr Dubedat said that features (c)-(h) relate to a relatively simple back-and-forth stroke. Mr Westwood joined issue with this characterisation and emphasised that the relationship between subtle features was significant. 165 Mr Westwood and Mr Dubedat did not agree on features (a), (b), (i) and (j). 166 Mr Westwood maintained that there were rare and subtle features of the Plaintiff’s signature visible in the disputed signature, but Mr Dubedat disagreed with this (T199.8).
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null
nsw_caselaw:549fd4fa3004262463befedd:35
nsw_caselaw:549fd4fa3004262463befedd
184 It is the Plaintiff’s case that the Defendant’s conduct amounted to a representation on which the Plaintiff and his lawyers relied. The conduct alleged is the Defendant’s forgery of the Plaintiff’s signature and his falsely signing as a witness to the forged signature. That conduct is said to constitute a representation that the Plaintiff had signed the guarantee witnessed by the Defendant. It is alleged that the Plaintiff and his legal advisors relied upon the representation by making no enquiry into the genuineness of the signature (ASC, paragraph 20B). 185 It will be recalled that Handley JA held at paragraph 31 of the judgment of the Court of Appeal that, if the Plaintiff proves that he and his solicitor assumed, without carefully checking, that his signature on the guarantee was genuine because it had been attested by the Defendant, any carelessness on their part in failing to check his signature will not be an answer. 186 Mr Bell SC submits that there is no evidence that the Plaintiff or his lawyers relied on the Defendant’s alleged conduct. The Plaintiff swore that he did not look closely at the guarantee until his attention was drawn to it in the witness box (affidavit, 22 September 2005, paragraph 26). Mr Butler said that his attention was not directed by anyone to the issue of the signatures on the guarantee and he did not question the Plaintiff about it (affidavit, 4 May 2006, paragraphs 5-7). Mr Butler said that, if any question had arisen concerning the signatures, he would have recommended that a handwriting expert be retained and would also have recommended that pleadings be filed challenging the validity of the guarantee and the Plaintiff’s execution of it (affidavit, 4 May 2006, paragraph 6). 187 Mr Bell SC submits that this is not a case where reliance can be simply inferred. Clear evidence ought to have been adduced in the Plaintiff’s case as to how he relied on the Defendant’s alleged conduct and how that led to the Federal Court determining the case in the Bank’s favour. The Defendant submits that this has not been done by the Plaintiff. The Defendant submits that the reliance case is further undermined by the fact that the Plaintiff admitted that he signed the guarantee in his affidavit of 13 March 2000 and in his Statement of Claim of 26 October 2000, at a time when he did not have the guarantee in his possession. In doing so, the Defendant submits that the Plaintiff was not relying upon any alleged representation by the Defendant, rather he was relying on his own recollection of the events of 3 June 1998. 188 Mr Ireland QC submits that there was ample evidence of reliance in the Plaintiff’s case in the form of Mr Butler’s affidavit referred to above. 189 Given the significance of the reliance issue to the decisions of Mathews AJ in 2004 and the Court of Appeal in 2006, it must be said that the actual evidence of reliance adduced in this hearing by the Plaintiff is thin. There is much to be said for the Defendant’s submission that the course of conduct of the Plaintiff in admitting that he signed the guarantee was based upon his own belief that he had done so on 3 June 1998 and not any alleged representation of the Defendant. However, given my findings on the primary issue, it is not necessary to consider this issue further. Anshun Estoppel and Abuse of Process 190 The Defendant formally relied on the pleadings of Anshun estoppel and abuse of process in the Defence. Although these contentions were dealt with by the Court of Appeal, Mr Bell SC submits that it is important to recognise that the outcome of the appeal was directly linked to the Plaintiff’s pleading (which was necessarily taken at its highest) that he had relied on the Defendant’s conduct. The Defendant points again to the absence of evidence from the Plaintiff that he relied on the Defendant‘s conduct.
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null
nsw_caselaw:549fd4fa3004262463befedd:33
nsw_caselaw:549fd4fa3004262463befedd
and has inexplicably introduced a gross error by locating the anti-clockwise circular movement at the beginning of the signature - an error which Mr Westwood claims was bound to invite close scrutiny. ” 173 The Defendant submits that a critical feature is that the disputed signature is so significantly different from the signature on page 13 of the same document, and all of the Plaintiff’s other signatures, that it is highly improbable that it is the product of someone attempting to forge his signature. This reasoning underlines Mr Westwood’s conclusion which is adverse to the Plaintiff. 174 I have observed earlier in this judgment that the expert handwriting evidence is but one part of the body of evidence to be considered in resolving the factual questions calling for resolution in these proceedings. In my view, the detailed explanation of Mr Westwood for his opinion is persuasive and his conclusion is that which I favour. I do not doubt that the opinions of Mr Dubedat are honestly held by him. However, there are areas of detail where Mr Dubedat made concessions which point to a conclusion that the Plaintiff was the author of the disputed signature. The analysis of the handwriting evidence set out above supports the conclusion which has been reached by Mr Westwood. 175 I do not accept that Mr Westwood was, in some way, an advocate in support of the Defendant’s case and not an objective witness. His discussions with Mr Dubedat during the joint conference concerning an inconclusive opinion does not, in my view, detract from Mr Westwood’s opinion and his reasons for it. Mr Westwood’s thorough analysis explains a conclusion which, in my view, ought be preferred. Conclusion Concerning Allegation of Forgery 176 It is appropriate that I draw together the findings which I have made in the course of this judgment. In reaching a conclusion as to whether the Plaintiff has demonstrated, to the requisite standard, that the disputed signature is a forgery and that the Defendant is the forger, it is necessary that I have regard to the totality of the evidence in the case. That evidence is constituted by: (a) oral evidence from persons directly involved in the relevant events - the Plaintiff, the Defendant and Mr Bruce; (b) documentary evidence, including contemporaneous commercial documents; (c) documentary evidence in the form of affidavits of the Plaintiff, the Defendant and Mr Bruce in the Federal Court proceedings and the transcript of evidence of these witnesses in those proceedings; (d) the reports and oral evidence of the handwriting experts, Mr Westwood and Mr Dubedat. 177 Although the expert handwriting evidence forms an important part of the evidence in the proceedings, it ought not be treated as decisive or determinative. It forms one part of the larger body of evidence which throws light upon probability or improbability of the Defendant forging the Plaintiff’s signature. 178 Having considered the totality of the evidence before me in the proceedings and the submissions of the parties, I make the following findings of fact: (a) a face-to-face meeting took place soon after 2.00 pm on 3 June 1998 at the Business Banking Centre premises of the Bank in Sydney at which were present the Plaintiff, the Defendant and Mr Bruce; (b) the purpose of the meeting was to obtain the signatures of the Plaintiff and Mr Bruce on a range of documents which the Bank required to be executed as part of the loan facility to be extended to Deangrove for the purpose of the Holloways Beach Project; (c) the Plaintiff and Mr Bruce knew that this was the purpose of the meeting and the Plaintiff brought with him the common seal of Deangrove to facilitate the execution of documents; (d) after some discussion, Mr Bruce signed his guarantee and his signature was witnessed by the Defendant; (e) Mr Bruce left the meeting at about 3.00 pm with the Plaintiff and the Defendant remaining following his departure;
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null
nsw_caselaw:549fd4fa3004262463befedd:3
nsw_caselaw:549fd4fa3004262463befedd
17 In a separate judgment agreeing with Handley JA, Young CJ in Eq said at paragraphs 68-69: “[68] In the instant case, the kernel of the plaintiff's case is that Mr Cleary's alleged fraud caused the plaintiff loss in bringing about the plaintiff's conduct in making an admission which directly caused him to suffer a verdict in the Federal Court. [69] In this sense there is not really a collateral attack on the Federal Court judgment at all.” 18 In his dissenting judgment, Bryson JA concluded that the Plaintiff’s case was so fantastic as to be scandalous and an abuse of process (paragraphs 56-57). His Honour would have allowed the appeal and ordered that the present proceedings by summarily dismissed. 19 I have referred in some little detail to the judgments of Mathews AJ and of the Court of Appeal given that a number of issues considered in those judgments remain alive in the present proceedings. Pending Proceedings Before the Federal Court of Australia 20 Reference should be made to a further limb of the litigation between the Plaintiff and the Bank. Following the delivery of judgment in the Federal Court proceedings, the Bank commenced bankruptcy proceedings against the Plaintiff in the Federal Court of Australia. I was informed that the bankruptcy petition, which is the subject of those proceedings, was extended by order of Hely J and will expire on 9 July 2006. 21 The bankruptcy proceedings are listed for hearing before Rares J on 5 July 2006. If the bankruptcy petition remains undetermined prior to its expiry on 9 July 2006, the Bank will lose the benefit of any relation-back period based on the occurrence of the act of bankruptcy which founds the petition: Commonwealth Bank of Australia v Jeans [2006] FCA 693 at paragraph 12. I was informed that the sole basis upon which the Plaintiff could resist the bankruptcy petition at the hearing before Rares J would be a judgment in his favour in the present proceedings. 22 Given the relationship between the proceedings, it is appropriate that I determine the present proceedings expeditiously so that the issues raised in the present proceedings are resolved before 5 July 2006. 23 The present proceedings involve the final hearing of the Plaintiff’s claim for relief. It was common ground that I was to determine the present claim on the evidence before me and that I was not bound by any findings made by Sackville J in the proceedings between the Plaintiff, Deangrove and the Bank (T245.38; T258.1; s.91 Evidence Act 1995). The Tort of Deceit 24 The essential elements of the tort of deceit may be summarised in the following way (Tresize v National Australia Bank Limited (2005) 220 ALR 706, at 716 [38]; Integral Energy Australia v EDS (Australia) Pty Limited [2006] NSWSC 600 at paragraph 3): (a) a representation of fact (which can be as to the representor’s opinion or intention or the law) that is conveyed to the claimant by the representor’s words or conduct; (b) knowledge on the part of the representor that the representation is false or, failing that, (a) the absence of a genuine belief that it is true or (b) recklessness as to whether it is true or false: Derry v Peek (1889) 14 App Cas 337; Banditt v The Qu e en (2005) 80 ALJR 421 at 422-3 (paragraph 2); (c) an intention on the part of the representor that the claimant (or a class including the claimant) should act upon the representation; (d) actions by the claimant in reliance upon the representation that were induced by the representation: Gould v Vaggelas (1985) 157 CLR 215; and (e) damage as a result of that reliance. 25 The measure of damages in deceit will be based on the actual damage directly flowing from the fraudulent inducement: Clark v Urquhart (1930) AC 28 at 67-68.
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null
nsw_caselaw:549fd5333004262463bf0c3f:18
nsw_caselaw:549fd5333004262463bf0c3f
In those circumstances, it would not, in my opinion, on an application for separate determination of particular questions, be appropriate to seek to determine, on the facts in evidence, whether or not a reasonable excuse in fact and in law existed in respect of the actions or conduct said to have been carried out pursuant to the relevant authorities. 113 The Crime Commission, as earlier noted, submitted that all relevant persons had a reasonable excuse for their actions concerning the cocaine. Whether, as a matter of final determination, that is so, is a question that may arise for later determination, either in the proceedings in this Court or during the course of the criminal proceedings that have been instituted in the District Court of New South Wales. On the basis of the analysis to which I have referred concerning the concept of “a reasonable excuse”, it is sufficient to state that in my opinion activities involving possession or supply of prohibited substances undertaken pursuant to and in accordance with a controlled operation authority granted under the State Act is capable of constituting a reasonable excuse within s. 233B(1AAB), that is, if the authorised activities in question were established as:- • activities that were engaged in by participants in an “authorised operation” ; • the activities were undertaken in the course of, and for the purposes of, the operation; • the activities were authorised by and were engaged in, in accordance with, the relevant authority for the operation; • the authority was one properly granted in accordance with the provisions of Part 2 of the State Act. 114 By reason of the plaintiff’s submissions on the role or conduct of “Tom”, I note that, if all the matters referred to in the preceding paragraph were established, then, by reason of the definition of “participant” and “civilian participant” in s.3 of the Act, s.16 would apply to activities covered by the relevant authorities. (ii) The Criminal Code Act 1995 (Cth) 115 The plaintiffs assert s.109 inconsistency by reason of the claimed operation of s.400.3, s.400.4, s.400.5, s.400.6(1), s.400.6(2), s.400.7(1), s.400.8 and s.400.9 of the Criminal Code (Cth) in the Schedule to the Criminal Code Act 1995 (Cth) (the money laundering provisions) upon the basis of the facts contained in the statement of agreed facts, documents etc. 116 In relation to this submission, it is necessary to have regard to the provisions that govern the operation of Part 10.2 – Money laundering in Chapter 10 of the Criminal Code. 117 In order for there to be a breach of the provisions relied upon, it is necessary, inter alia, that the money in question be the “proceeds of crime” within the meaning of s.400.1(1). That provision defines “proceeds of crime” as follows:- “… means any money or other property that is derived or realised, directly or indirectly, by any person from the commission of an offence that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence).” 118 In the dictionary to the Code “offence” means an offence against a law of the Commonwealth. It is, alternatively, necessary that it be established that the person in question intends (or is reckless or negligent regarding the risk) that the money will become an “instrument of crime”. That expression is defined in s.400.1(1) of Part 10.2 as:- “… money or other property is an instrument of crime if it is used in the commission of, or used to facilitate the commission of, an offence that may be dealt with as an indictable offence (even if it may, in the circumstances, be dealt with as a summary offence).” 119 Accordingly, it is necessary in either case that there be established an offence against a law of the Commonwealth. 120 The plaintiffs in their “supplementary submissions on the constitutional question” identify the relevant “offence” as that said to arise under s.233B(1)(a)(iv), (v) and (vi) of the Customs Act 1901 (Cth).
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What is the definition of "proceeds of crime" under the Criminal Code Act 1995 (Cth)?
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nsw_caselaw:549fd5333004262463bf0c3f:27
nsw_caselaw:549fd5333004262463bf0c3f
167 It is clear that an authority to conduct a controlled operation may not be granted unless the chief executive officer has given consideration to each of these matters in s.6(4)(a), (b) and (c) and, in light thereof, he or she must be satisfied as to the matters in s. 6(3)(a),(b), (c) and (d). The provisions of s.6, in other words, are first order issues that are foundational to the exercise of the power conferred by the Act. That does not, however, mean that that constitutes them jurisdictional facts (as to which see below). Section 7 – certain matters not to be authorised 168 Section 7 is more confined in its focus and subject matter than s.6(3). That section focuses upon the type or nature of activity or conduct that may be authorised under s.6. Its terms prohibit the granting of an application that involves activity or conduct amounting to entrapment in the terms stated in s. 7(1)(a) and, also prohibiting in terms of s.7(1)(b), conduct that “… is likely to seriously endanger the health or safety of that or any other participant, or any other person, or to result in serious loss or damage to property”. 169 The provisions of s.7(2) and (3) each require the chief executive officer to undertake an evaluation or assessment (denoted by the phrase in each subsection “… the chief executive officer is satisfied …”). Section 7(2) is directed to the requirement for a person to have the appropriate skills to participate in the operation whilst s.7(3) states the conditions to be satisfied before civilian participants may participate in a controlled operation. 170 Section 7(1)(a) and (b) employ the language of prohibition but do not contain references to the mental state of the decision-maker as found in s.7(2) and (3). This raises a question as to whether the different form in which s.7(1) is expressed is significant in determining whether the matters arising under s.7(1)(a) and (b) are jurisdictional in nature. Are matters in s.7(1)(b) jurisdictional facts? 171 Mr. Stratton, SC. with Mr. Robinson on behalf of the plaintiff, Mr. Dowe, and Mr. Robinson on behalf of the plaintiffs, Messrs. Pavan, Zaiter and Gedeon, contended that s.7(1)(b) refers to “a jurisdictional fact” and that, accordingly, this Court should determine the factual question for itself on the evidence adduced before it. It was contended, accordingly, that the “jurisdictional” fact question is a threshold one and hence appropriate to be separately determined. Considerable reliance was placed upon the argument that s.7(1)(b) is properly characterised as “a statutory prohibition on the chief executive officer lawfully granting an authority pursuant to a s.5 application to conduct a controlled operation”. 172 Mr. Stratton and Mr. Robinson also contended that s.7(1)(b) is a necessary pre-condition to the valid exercise of power under s.6(1)(a) to grant an authority for a controlled operation. They contended that this must be so by reason of three matters:- (a) the mandatory language of the section; (b) the structure of the section in the context of Part 2 of the Act and the Act as a whole; and (c) the scope and objects of the Act as evidencing Parliament’s intention. 173 They also argued that the Crime Commission’s position on the issue effectively seeks to render the issue under s.7(1)(b) immune from judicial review. On this approach, it was emphasised the Court would be limited in its ability to review or go behind the decision-maker’s decision so as to exercise its supervisory role over the lawfulness of executive decisions. 174 Before embarking on an examination of the detail of the arguments presented on behalf of the parties, it is, as well to examine two separate matters. The first concerns the relevant principles that determine what is a jurisdictional fact in relation to the exercise of a statutory power. The second concerns the nature of the provisions in s.7(1) of the State Act and the particular import of the subject matters with which they are concerned.
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Are matters in s.7(1)(b) of the Act jurisdictional facts?
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nsw_caselaw:549fd5333004262463bf0c3f:1
nsw_caselaw:549fd5333004262463bf0c3f
is performed as an intrinsic part of the process of evaluation of an application for a controlled operation authority - EVIDENCE – admissibility of expert evidence as to illicit drugs for the purposes of the judicial review hearing – whether the expert evidence is relevant – expert evidence proceeds on the basis not merely of supply but upon the “potential” that the drugs supplied will cause harm “for some users” – the expert evidence goes beyond the fact in issue and therefore goes beyond the scope of the controlled operation authorities – the evidence is not relevant to or admissible in the proceedings. Law Enforcement (Controlled Operations) Act 1997 (NSW) Customs Act 1901 (Cth) Criminal Code Act 1995 (Cth) Crimes Act 1914 (Cth) Judiciary Act 1903 (Cth) Australian Federal Police Act 1979 (Cth) LEGISLATION CITED : Police (Special Provisions) Act 1901 (NSW) Drugs (Misuse & Trafficking) Act 1985 (NSW) Interpretation Act 1987 (NSW) Practices Act 1974 (Cth) Crimes Legislation Amendment (Telecommunications Offences and Other Measures) Act Supreme Court Act 1970 Environmental Planning and Assessment Act 1979 (NSW) Development Act 1993 (SA) Victoria v. Commonwealth (1937) 58 CLR 618 Australian Mutual Provident Society v. Goulden (1986) 160 CLR 330 Telstra Corp. Limited v. Worthing (1999) 197 CLR 61 Apla Limited v. Legal Services Commissioner (NSW) (2005) 79 ALJR 1620 Medina (1995) 84 A. Crim. R. 316 Love & Peters v. Attorney-General (NSW) (1990) 169 CLR 307 Re Credit Tribunal; ex parte General Motors Acceptance Corp. (Australia) (1977) 137 CLR 545 at 463-464 Ridgeway v. The Queen (1995) 184 CLR 19 Regina v. Giaccio [19970 SASC 6103 Regina v. Credit Tribunal ex parte General Motors Acceptance Corporation (1976-1977) 137 CLR 545 Ganin v. NSW Crime Commission (1993) 32 NSWLR 423 Regina v. Tawill [1974] VR 84 He Kaw Te v. The Queen [1984-1985] 157 CLR 523 Taikato v. The Queen [1996] 186 CLR 454 Pidoto v. Victoria (1943) 68 CLR 87 CASES CITED : Sportodds Systems Pty. Limited v. New South Wales (2003) 133 FCR 63 Regina v. Stevens (1991) 23 NSWLR 75 Regina v. Winneke ex parte Gallagher (1982) 152 CLR 211 George v. Rockett (1990) 170 CLR 104 Coprporation of City of Enfield Development Assessment Commission [1999] 199 CLR 135 Woolworths Limited v. Pallas Newco Pty. Limited (2004) 61 NSWLR 707 Colonial Bank of Australasia v. Willan (1874) LR 5 PC 417 Amalgamated Society of Carpenters & Joiners v. Haberfield Pty. Limited (1907) 5 CLR 53 Ex parte Hulin re Gillespie (1965) 65 SR (NSW) 31 Timbarra Protection Coalition Inc. v. Ross Mining NL (1999) 46 NSWLR 55 Regina v. Sloane (1990) 49 A. Crim. R. 270 Regina v. Latif [1994] 1 WLR 104 Regina v. Looseley [2001] 1 WLR 2060 The Warehouse Group (Australia) Pty. Limited v. Woolworths Limited [2005] NSWCA 269 Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223 Parisienne Basket Shoes Pty. Limited v. Whyte (1938) 59 CLR 369 Smith v. Regina [2001] 206 CLR 650 PARTIES : DOWE, David Darley v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR; PAVAN, Robert v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR; GEDEON, Gilbert v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR; ZAITER, Joe & ANOR v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR
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Is expert evidence as to illicit drugs admissible in judicial review hearings under the Law Enforcement (Controlled Operations) Act 1997 (NSW)?
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nsw_caselaw:549fd5333004262463bf0c3f:40
nsw_caselaw:549fd5333004262463bf0c3f
256 Serious danger to health or safety from a drug such as cocaine results from conduct involving the administration or ingestion of the drug. Whilst the supply of a drug such as cocaine may be a first step in a chain of events that could lead to danger to health and safety, supply alone is insufficient to fall within the terms of s.7(1)(b). 257 I, accordingly, am unable to accept the submission made on behalf of the plaintiffs as to the construction of s.7(1)(b) and that the authorities in question authorised conduct in contravention of that provision. 258 Section 7(1)(b), in my opinion does not in terms address the issue of the potential for the usage and harm resulting. The section addresses a direct relationship between the “conduct” and the concept of causing serious danger to health or safety to participants or any other person. The conduct authorised under the six authorities, as earlier stated, did not involve or envisage both the supply as well as the injecting or administration of the seven kilograms of cocaine or any part thereof. 259 The opinion in the reports, Exhibits C and D, accordingly are based not merely on supply, but are premised upon additional conduct involving the usage of the drugs. The authorities being limited only to the former, Dr. Degenhardt’s opinion goes well beyond the fact in issue (the authorised supply of cocaine) to express an opinion based on drug usage which was not the conduct authorised. On that basis, the opinions expressed in the reports do not, in my opinion, relate to a fact in issue within the meaning of s.55(1) of the Evidence Act and are therefore not relevant to or admissible in the proceedings. Answers to the separate questions for determination 260 On the basis of the above stated reasons, I answer the questions for separate determination as follows:- “Q1. Are ss.5 to 20 of the Law Enforcement (Controlled Operations) Act 1997, or any of those section, alone or in combination, ultra vires or invalid by reason of s.109 of the Commonwealth Constitution? (the “constitutional question”). A. No . Q2. Does the jurisdiction of this Court extend to determining whether or not any conduct proposed to be authorised (or that was authorised) pursuant to s. 6(1)(a) of the Law Enforcement (Controlled Operations) Act 1997 is (or was) likely to seriously endanger the health or safety of any participant or any other person, or to result in serious loss or damage to property, within the meaning of s.7(1)(b) of that Act? (the “jurisdictional fact question”). A. No . Q3. Is the report of Louisa Degenhardt (undated), being part of Annexure C to the affidavit of Stephen Dack sworn 18 August 2006, relevant to, and admissible in, the proceedings upon the Summons? A. No . Q.4 Is the report of Louisa Degenhardt (dated 31 July 2006), being part of Annexure AC to the affidavit of Stephen Dack sworn 18 August 2006, relevant to and admissible in, the proceedings upon the Summons? A. No . Orders 261 The provisions of Part 28, Division 2 – Separation of Questions of the Uniform Civil Procedure Rules 2005, in particular, those in Part 28.4 allow for the making of orders or the granting of other relief consequent upon a decision of a question under that Division. 262 The questions posed for separate determination having been answered above, it remains to consider the nature of any other order the nature of the case requires in accordance with the provisions of Part 28 Rule 3(b). 263 The questions as answered substantially disposes of those parts of the proceedings in which the plaintiffs claim declaratory relief as set out in paragraphs [1] and [3] of the amended summonses and the grounds relating thereto. 264 The orders otherwise sought in the amended summonses rely upon additional grounds including those set out in paragraph [2(e)] thereof.
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Does the jurisdiction of the Court extend to determining whether or not any conduct proposed to be authorised (or that was authorised) pursuant to s.6(1)(a) of the Law Enforcement (Controlled Operations) Act 1997 is (or was) likely to seriously endanger the health or safety of any participant or any other person, or to result in serious loss or damage to property, within the meaning of s.7(1)(b) of that Act?
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nsw_caselaw:549fd5333004262463bf0c3f:26
nsw_caselaw:549fd5333004262463bf0c3f
161 The power to authorise an application for an authority to conduct a controlled operation arises under the provisions of s.6 of the Act. By reason of the significance of this section, it is necessary to examine its provisions. Section 6 – determination of applications 162 Section 6(1) states that an application for a controlled operations authority may be granted, either unconditionally or subject to conditions or it may be refused. 163 Section 6(3) contains provisions that are fundamental to the statutory scheme. The matters to which they are directed are all matters that the chief executive officer of the relevant law enforcement agency is required to consider and who must in relation to each form the requisite state of mind as indicated by the phrase “is satisfied as to the following matters”. Section 6(3) then identifies four specific matters:- (a) The first is the requirement for there to be a proper basis for the conduct of a controlled operation. This is expressed in terms of there being, to the satisfaction of the chief executive officer, “… reasonable grounds to suspect that criminal activity or conduct, is being or is about to be conducted in relation to matters within the administrative responsibility of the agency” . Such a statutory formulation requires the existence of facts which are sufficient to induce that state of mind in a reasonable person: George v. Rockett (1990) 170 CLR 104, 112. (b) The second concerns the justification for the conduct of a controlled operation in terms of “… the nature and extent of the suspected criminal activity or corrupt conduct …” . This provision plainly directs attention to the need for the suspected criminal activity or corrupt conduct to be of such a nature that it warrants investigation by means of a controlled operation. (c) The third requires that the chief executive officer be satisfied that the controlled activity (meaning an activity that, but for s.16, would be unlawful) is appropriate to , that is, suitable, proper or fitting to the suspected criminal activity or corrupt conduct. This also involves an issue as to proportionality. (d) The fourth is directed to ensuring accountability in that the proposed controlled activities must be capable of being accounted for “… in sufficient detail to enable the reporting requirements of this Act to be fully complied with” . 164 The decision-making to be undertaken by the chief executive officer of the relevant law enforcement agency under s.6(3) in relation to each of the above four mentioned matters is not an unstructured exercise. Section 6(4) directs that in respect of all of the matters referred to in s.6(3), the chief executive officer is required to have regard to the matters in s.6(4)(a), (b) and (c). The provisions in (a) in requiring the chief executive officer to consider the reliability of any information as to the nature and extent of the suspected criminal activity or corrupt conduct would require an evaluation of the reliability of available information, having regard, inter alia, to the source and quality (including the specificity) of the information, corroborative material and other matters that bear upon the level of confidence that may be placed in it. 165 The provisions in (b) require an assessment to be made of the proposed controlled operation in terms of the likely prospects of success based upon a comparison with the likelihood of success of any other law enforcement operation that would be reasonably practical to conduct for the same purposes. Such an assessment will be relevant to, in particular, the issue of justification under s.6(3)(b) and to the appropriateness of the proposed controlled activities. 166 The provisions in (c) indicate the need for a finite and not an indefinite period for the proposed controlled operation and for an assessment to be made as to what is considered to be reasonably necessary in terms of duration.
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null
nsw_caselaw:549fd5333004262463bf0c3f:21
nsw_caselaw:549fd5333004262463bf0c3f
(ii) Section 16 of the State Act in that it applies, inter alia, to controlled operations under a law of the Commonwealth (see definitions in s.3 of “authorised operation” , “corresponding law” and to Federal agencies (the Australian Federal police, the Australian Crime Commission and the Australian Customs Service in the definition of “a enforcement agency” ). 131 The plaintiffs submitted that Part 1AB of the Crimes Act 1914 (Cth) covers the field in relation to authorities for “controlled operations” relating to:- (a) “serious Commonwealth offences” ; (b) “serious State offences that have a federal aspect” ; or (c) “Commonwealth offences” (within the meaning of those expressions in s.15H and s.15HB and s.3AA of the Crimes Act 1914 (Cth) ). 132 Mr. Robinson, in his written and oral submissions, supported the Part 1AB “covering the field” submission by reference to a number of interlocking provisions to be found in Parts 1 and 1AB of the Crimes Act 1914 (Cth). In this respect, s. 15H expressly provides that a controlled operation is one, the purpose of which is the obtaining of evidence that may lead to the prosecution of a person for a “serious Commonwealth offence or a serious State offence that has a federal aspect”: s.15H(b). 133 Section 15H(b)(2) defines, for the purposes of Part 1AB “serious State offence that has a federal aspect” as meaning “… a State offence that has a federal aspect and that has the characteristics of a serious Commonwealth offence”. 134 Mr. Robinson then referred to certain provisions in Part 1 of the Crimes Act 1914 (Cth), including, in particular, the provisions of s.3AA, State offences that have a federal aspect. The stated object of that section is to identify State offences that have a federal aspect either by reason of the fact that they potentially fall within Commonwealth legislative power by reason of the elements of the State offence, or the circumstances in which the State offence was committed or by reason of the fact that the Australian Federal Police were investigating such offences as incidental to the Australian Federal Police investigating an offence against a law of the Commonwealth or a Territory: s. 3AA(1A). 135 Attention was also drawn, in particular, to the provisions of s.3AA(1)(c) and, in this respect, s.3AA(3) of the Crimes Act 1914 (Cth). 136 By reference to these provisions, Mr. Robinson submitted that, in the field of illegally imported cocaine, the Commonwealth Act covers the field of regulation of potential criminal activity to the extent that such conduct involves a Commonwealth offence or a State offence that has a federal aspect or in relation to “serious Commonwealth offences” (the latter, it being submitted, covering offences under to s. 25 of the Drugs (Misuse and Trafficking) Act 1985 (NSW) (the supply of prohibited drugs)). 137 Mr. Robinson submitted that, in the present proceedings, the six authorities issued under the State Act, against the background of the scope and operation of Part 1AB, revealed “a real conflict between the schemes” and he relied, in particular, in this respect on the fact that there were more “checks and balances” under the Commonwealth scheme than the State. The two particular aspects emphasised were, firstly, the more stringent conditions in s. 15I(2A)(b) (whereby the exemption from criminal responsibility under s.15I(1) does not apply to a person who is believed to have been involved, other than for law enforcement purposes, in the criminal activity in respect of which the controlled operation was authorised). Secondly, the provisions of s.15M(e) of Part 1AB whereby the authorising officer must, inter alia, be satisfied that:- “(e) The operation will be conducted in a way that ensures that, to the maximum extent possible any illicit goods involved in the operation will be under the control of an Australian law enforcement officer at the end of the operation.”
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null
nsw_caselaw:549fd5333004262463bf0c3f:15
nsw_caselaw:549fd5333004262463bf0c3f
96 The argument put on behalf of the plaintiffs, accordingly, was that the State Act purports to, in effect, declare “lawful” the same conduct declared to be unlawful by the abovementioned Commonwealth laws. There being a direct and impermissible inconsistency, according to the submission, the State Act must be held to be invalid to the extent of such inconsistency. Alternatively, it was contended, the State Act must be read down so as to hold that it does not cover conduct which would otherwise constitute a breach of Commonwealth laws (if such a reading down were possible). 97 The Crime Commission’s response was essentially two-fold:- (a) By reason of the “reasonable excuse” provisions in s.233B(1AAB) of the Customs Act , on the relevant facts in the proceedings, there was and could be no breach of s. 233B by any participant named in the controlled operation authorities, they all having a reasonable excuse for all actions taken concerning the cocaine from the time that it was dug up until the time it was allegedly supplied to the plaintiffs. That reasonable excuse was described as “the execution of a policing operation calculated to gather evidence of serious offences (the existence of the authorities enhances the excuse, but the authorities were not necessary for the excuse to be valid” : Medina (1995) 84 A. Crim. R. 316. (b) That on no reasonable construction could the State Act be construed as providing for the authorisation of breaches of Commonwealth laws. Even if the provisions of the State Act taken alone could be so construed, then s.31 of the Interpretation Act 1987 (NSW) would require a “reading down” of the State Act, so that such a construction would be avoided. 98 It was submitted on behalf of both the Crime Commission and the Attorney General that, properly construed, the State Act establishes a scheme whereby breaches of New South Wales law can be authorised for the purposes of a controlled operation. In the context of the present matter, it was implicit in the submission that the State Act and the authorities in question exempted the authorised participants in the controlled operations from the operation of the Drug (Misuse and Trafficking) Act 1985 (NSW). The Crime Commission contended that on no reasonable construction could the State Act be construed as providing authorisation for breaches of Commonwealth laws, as did the Attorney General. The Attorney submitted that the authorities granted under the State Act could not be construed as authorising anything that would be beyond State constitutional power. 99 Alternatively to the submission that the State Act provisions do not authorise the breach of any Commonwealth laws, it was contended that, even if they could lend themselves to such a construction, s. 109 of the Constitution would only invalidate the State Act “to the extent of any inconsistency”, leaving intact the authority to breach State laws, in particular, the Drug (Misuse and Trafficking) Act 1985 (NSW) (which is the Act under which the plaintiffs have each been charged), and ensuring that evidence obtained pursuant to such authorities was not unlawfully obtained. 100 It was, accordingly, submitted that the actual authorities granted and in question in these proceedings, were “instruments” within the meaning of s.32 of the Interpretation Act (but not s.109 “laws”) and were to be construed as authorising nothing more than activities that fell within the scope of the provisions of the State Act. (i) The Customs Act 1901 (Cth) - the provisions of s.233B(1AAB) Reasonable excuse 101 Section 233B(1AAB) of the Customs Act was inserted by the Crimes Legislation Amendment (Telecommunication Offences and Other Measures) Act (No. 2 of 2004) (No. 127 of 2004). That section was inserted by Schedule 5 to the amending Act. The date of assent to the amendment was 31 August 2004 and the same became effective on 28 September 2004.
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null
nsw_caselaw:549fd5333004262463bf0c3f:28
nsw_caselaw:549fd5333004262463bf0c3f
Jurisdictional facts: relevant principles 175 A primary proposition in resolving the question as to whether s.7(1)(b) raises a jurisdictional fact is that the answer to that question is essentially to be ascertained by a proper construction of its provisions in its statutory setting. 176 In the joint judgment of the High Court in Corporation of the City of Enfield v. Development Assessment Commission [1999] 199 CLR 135 (Gleeson, CJ., Gummow, Kirby and Hayne, JJ.), the High Court observed:- (a) The term “jurisdictional fact” (which may be a complex of elements) is often used to identify the criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion (at [28]). (b) It is important to assess the position which the particular statutory provision in question occupies in the relevant statutory scheme and to determine its nature, having regard to that occupied by other provisions (at [32]). (c) A provision which mandates circumstances in which, for example, an authority must either give or refuse a consent (as distinct, in that case, from issues that go to planning merits) is likely to be jurisdictional in nature (at [32]). (d) The text of a particular provision may also indicate that the relevant criteria specified in the provision is not a matter for the relevant authority itself to determine as a matter of opinion (at [33]). 177 In Woolworths Limited v. Pallas Newco Pty. Limited (2004) 61 NSWLR 707, the following principles and propositions were formulated by Spigelman, CJ:- (a) The case law and legal literature contains a great deal of terminological confusion about the concepts of “jurisdiction” and “jurisdictional facts” . The issue is one of statutory construction. What is required is a careful analysis of the statute which confers the jurisdiction. Consideration must be given to the language of the power under consideration and to the total context of the legislative scheme in which the power is conferred, including the scope and nature of the jurisdiction and of the fact said to be jurisdictional (at [5] and [6]). (b) The Court is required to determine whether the repository of a statutory power has acted, or proposes to act, in a manner which transgresses the limits upon the exercise of the power that Parliament has conferred (at [9]). (c) It is necessary to identify, in a particular case, the “indicators” of jurisdictional facts, including the scope and purpose of the legislative scheme and the terminology of “prohibition”. (d) There is a distinction to be made between a fact that is an “essential preliminary to the decision-making process” and a “fact to be adjudged upon in the course of the inquiry” : Colonial Bank of Australasia v. Willan (1874) LR 5 PC 417 at 442-443. The Chief Justice identified as examples, Amalgamated Society of Carpenters and Joiners v. Haberfield Pty. Limited (1907) 5 CLR 33 at 53; ex parte Hulin ; re Gillespie (1965) 65 SR (NSW) 31 at 32. (e) The word “preliminary” does not, in this context, refer to a chronological sequence of events, but to a matter that is legally antecedent to the decision-making process . A decision-maker may well determine whether or not he or she has jurisdiction at the same time as he or she carries out the substantive decision-making process (at [47]). (f) The extrinsic or ancillary or preliminary nature of the relevant fact makes it more likely that the fact is jurisdictional (at [48]). (g) Particular facts and matters may exist which determine whether a matter is within power but do not inevitably arise in the course of considering the exercise of the discretionary power in question. The matter may be both distinct and also extrinsic to the decision-making process and be properly therefore regarded as jurisdictional in nature (at [50]).
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null
nsw_caselaw:549fd5333004262463bf0c3f:35
nsw_caselaw:549fd5333004262463bf0c3f
In the context of law enforcement, it was observed that questions often arise after the event by reason of the fact that what is done is done covertly, not leaving room for any contemporaneous challenge. The extent of inconvenience arising from the contemporaneous challenge was less than in those cases where there may exist scope for challenging long after the event. In the latter case, it was suggested very considerable inconvenience could arise from a relatively broad categorisation of jurisdictional facts. 216 A finding that the provisions of s.7(1)(b) relate to non-jurisdictional facts does not, of course, in any way diminish their importance in the statutory scheme for controlled operations. Where, as stated by Spigelman, CJ. in Timbarra (supra) at [41] the process of construction leads to the conclusion that Parliament has intended that the primary decision-maker authoritatively determine the existence or non-existence of the fact, then, whether as a rule or law of statutory construction as to the intent of Parliament, or as the application of a rule of the common law to the exercise of a statutory power, a Court with a judicial review jurisdiction will inquire into the reasonableness of the decision by the primary decision-maker (in a Wednesbury sense): Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223, but not itself determine the actual existence or non-existence of the relevant facts. 217 In the required analysis, the approach to be taken is that applied by Spigelman, CJ. in Pallas Newco (supra) by identifying the indicators that are for and those that are against the existence of the claimed jurisdictional fact. Further, in the statutory context of the State Act, it is necessary:- • As in Pallas Newco (supra) to identify “the position” , s.7(1)(b) occupies in the statutory scheme and whether it operates as a precondition to the very power to grant an authority. • To determine whether it could be said that the element or matter in s.7(1)(b) operates as a criterion that enlivens the power of the Commissioner to grant an authority or whether it was a condition that qualifies the way in which that power, the existence of which depends upon other criterion, could or could not be exercised. • To bring to account the objects of the legislation and its evident purpose. An important primary objective of the statute is to facilitate the use of controlled operations as a method in particular investigations for the purpose of obtaining evidence of criminal activity and the other purposes referred to in paragraph [151] above. 218 In applying the above matters to this case and giving full weight to the terms of s.7(1)(b) including its prohibitory terminology, I am of the opinion that that provision is not a gateway criterion in a jurisdictional sense. It is, in other words, not a criterion satisfaction of which enlivens the power of the Commissioner to exercise the discretionary power under s.6 of the Act. 219 As to the “jurisdictional fact question”, I have concluded:- (a) The State Act specifies the essential prerequisites to the making of an application for a controlled operation authority in s.5 and the matters upon which a chief executive must be satisfied in terms of s.6. (b) Although s.7 is not expressed by reference to the chief executive’s state of mind in terms of his or her “satisfaction” or “opinion” , both s.7(1)(a) and s.7(1)(b) plainly require expert assessment and judgments to be made. (c) On the particular question as to whether a proposed operation would or would not require a participant to engage in conduct that is likely to seriously endanger the health or safety of that participant, that is a matter that requires a close and detailed analysis of the particular facts of the proposal that are potentially productive of risk.
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null
nsw_caselaw:549fd5333004262463bf0c3f:11
nsw_caselaw:549fd5333004262463bf0c3f
67 In relation to the federal and State Act provisions regulating controlled operations, Mr. Temby also submitted that the fact that conduct may be authorised under two pieces of legislation arising under two heads of power, or arising under statutes enacted by different Parliaments, does not, in light of the nature of the provisions, give rise to an inconsistency. He submitted that on no reasonable construction could the State Act be construed as providing for the authorisation of breaches of Commonwealth laws. Even if it could, s.31 of the Interpretation Act 1987 (NSW) would require the State Act to be “read down” so that any such construction would be avoided. (c) Submissions of the Attorney-General intervening 68 Dr. Renwick submitted that the only constitutional issue before the Court was whether the provisions of the three Commonwealth statutes in question, the Customs Act, the Crimes Act 1914 and the Criminal Code 1995 were directly or indirectly inconsistent with the State Act such that, by operation of s. 109 of the Constitution, the provisions of the latter Act were invalidated. Dr. Renwick emphasised that the case was to be decided on the basis of the agreed facts and for the purposes of answering the separate questions. 69 The Attorney-General submitted:- (a) “In relation to sub-section 233B(1)(a)(iv), (v) and (vi) of the Customs Act 1900 (Cth) (i) There is no direct inconsistency between the Act and the above provisions of the Customs Act as, properly construed, the State Act simply immunises the controlled operation from New South Wales law (relevantly the Drug Misuse and Trafficking Act 1985 (Cth) ) and not Commonwealth law: Interpretation Act 1987 (NSW) ; Love & Peters v. Attorney-General (NSW) (1990) 169 CLR 307. The authorities granted under the State Act will not be construed as authorising anything which would be beyond State constitutional power. (ii) Even if that were not so, acts done pursuant to the authorities confer a ‘reasonable excuse’ within the meaning of the relevant provisions of the Customs Act so that there is no actual basis to argue inconsistency based on the asserted impossibility of dual obedience, nor a diminution or removal by the State law of a right, privilege or entitlement conferred by the Commonwealth law.” (b) Part 1AB of the Crimes Act 1914 (Cth) (i) There is no indirect inconsistency because, by s.15GA of the Crimes Act 1914 (Cth) , the controlled operations provisions of that Act expressly do not “cover the field”, and that statement of intention should be treated as determinative: Re Credit Tribunal; ex parte General Motors Acceptance Corp. (Australia) (1977) 137 CLR 545 at 463-464 per Mason, J. (ii) There is no diminution or removal by the State law of a right, privilege or entitlement conferred by Part 1AB of the Crimes Act 1914 (Cth) as the State Act deems operations authorised under that Part of the Crimes Act to be authorised under the State Act. (iii) It is irrelevant that there may be different pre-conditions to the granting of authorisations under the Crimes Act 1914 (Cth) as compared to the State Act. 70 In relation to the money laundering provisions in s.400 of the Criminal Code Act 1995 (Cth), Dr. Renwick submitted that those provisions were premised upon the establishment of an underlying criminal offence and that the only one nominated in these proceedings was s.233B of the Customs Act. Analysis of the “constitutional question” 71 The issues in relation to the “constitutional question” are considered below in terms of the following:- (a) The statutory federal and State schemes for the authorisation of controlled operations. (b) The issue of “direct inconsistency”:- (i) Customs Act 1902 (Cth); (ii) Criminal Code Act 1995 (Cth). (c) The issue of indirect inconsistency . (d) The “covering the field issue” and s.109 inconsistency. (a) Statutory schemes for controlled operations
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null
nsw_caselaw:549fd5333004262463bf0c3f:9
nsw_caselaw:549fd5333004262463bf0c3f
58 It is also an offence for a person to deal with money and the monies either are proceeds of crime or there is a risk that the money or property will become an instrument of crime and the person is “negligent” (within the meaning of s.5. 5) as to the fact that the money or proceeds is proceeds of crime or the fact that there is a risk that it will become an instrument of crime and at the time of the dealing the value of the money is as specified in the relevant sections (ss.400.3(3), 400.4(4), 400.5(3), 400.6(3) and 400.7(3) of the Code). 59 Other relevant provisions of the Code include those concerned with attempts to commit an offence, the offence of incitement, the offence of conspiracy to commit an offence and an offence in respect of aiding, abetting, counselling or procuring the commission of an offence by another person (respectively ss.11.1, 11.4, 11.5 and 11.2 of the Code). 60 Section 11.3 of the Code extends criminal liability for an offence where a person who has, in relation to each “physical element” (within the meaning of s.4.1) of an offence, a “fault element” within the meaning of s.5. 1 (applicable to that physical element) and who procures conduct of another person that, whether or not together with conduct of the procurer, would have constituted an offence on the part of the procurer if the procurer had engaged in it, is taken to have committed that offence and is punishable accordingly. (1) THE “CONSTITUTIONAL QUESTION” 61 Detailed written and oral submissions were made on behalf of the plaintiffs, the defendants and the Attorney-General for New South Wales. I set out in the paragraphs that immediately follow the essential contentions and submissions in summary form. They will then be considered in greater detail later in the judgment. (a) The plaintiffs’ contentions on the “constitutional question” 62 The plaintiffs’ contentions may be summarised in the following terms:- (a) That the possession and conveyance of some or all of the cocaine mentioned in the Authorities by the named “law enforcement officers” and/or the “authorised civilian participant” in accordance with the Authorities issued under the Act, amounted to the commission (whether as principals or accessories) by the particular officers and/or participants of breaches of s. 233B(1)(a)(iv), (v) and (vi) of the Customs Act 1901 (Cth) . (Section 233B was repealed and replaced by new provisions of the Criminal Code 1995 (Cth) relating to import – export offences (see ss.307.1 to 307.7 and 314.1 and 314.4). The new provisions commenced on 6 December 2005.) (b) That the proposed and actual dealing with money paid for the said cocaine was capable of constituting or constituted offences under ss.400.3, 400.4, 400.5, 400.6(1) and (2), 400.7(1), 400.8 and 400.9 of the Criminal Code 1995 in the Schedule to the Criminal Code Act 1995 (Cth) (whether as principals or accessories). (c) That the authorities could not have been authorised pursuant to Part 1AB of the Crimes Act 1914 (Cth) . (d) That in the premises stated in the agreed statement of facts, ss.6, 7, 13, 16, 17, 18 and 19 of the Act were inconsistent with s.233B(1)(a)(iv), (v) and (vi) of the Customs Act and with Part 1AB of the Crimes Act 1914 and thus invalid by operation of s.109 of the Commonwealth Constitution. 63 The plaintiffs relied upon five primary submissions:- (a) Firstly, they contended that the State Act is invalid insofar as it is inconsistent with Commonwealth provisions as follows:- (i) section 233B(1)(a)(iv), (v) and (vi) of the Customs Act (possession or conveyance of narcotic goods); and (ii) sections 400.3, 400.4, 400.5, 400.6(1), 400.6(2), 400.7(1), 400.8 and 400.9 of the Criminal Code 1995 in the Schedule to the Criminal Code Act 1995 (Cth) dealing with money and property; (iii) section 11.1 to 11.5 of the Criminal Code (ancillary offences); (iv) Part 1AB of the Crimes Act 1914 (Commonwealth controlled operations provisions).
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null
nsw_caselaw:549fd5333004262463bf0c3f:13
nsw_caselaw:549fd5333004262463bf0c3f
Subject to what is said below, s.15GA may, in my opinion, be seen as a provision that makes it clear that Part 1AB is not intended to cover the field and that its provisions leave room for the operation of the State Act insofar as it does not conflict with that Part: see generally, Regina v. Credit Tribunal ex parte General Motors Acceptance Corporation (1976-1977) 137 CLR 545 at 562-563 per Mason, J. 80 In that case (at 563), it was held that the provisions of s.75(1) of the Trade Practices Act 1974 (Cth) (the “TPA”) which provides “except as provided by sub-section (2), this Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory” was a provision which eliminated any suggestion of inconsistency otherwise arising. The Attorney General in the present proceedings submitted that the provisions of s.15GA, in providing that “it is the Parliament’s intention that a law of a State or Territory should be able to operate concurrently with this Part unless the law is directly inconsistent with this Part” is an even stronger statutory provision than are the provisions of s.75(1) of the TPA. 81 The wording of s.15GA, in my opinion, may be considered to be an affirmative statement of Parliament’s intention that Part 1AB is to have a significant measure of concurrent operation and in that respect it is more emphatic in its terms than s.72(1) of the TPA. It is to be observed that s.15GA was not inserted as or expressed to be an ancillary or miscellaneous provision in Part 1AB. Instead, it takes its place in Division 1 – Objects of Part – and is clearly intended to reflect that the concurrent operation of State and Territory laws was one of the objectives in the establishment of the federal controlled operations scheme. The requirement for and the increasing formation and use in recent times of federal and State law enforcement partnerships in the investigation of serious crime reflects the need for complementary rather than conflicting federal, State and Territory laws in this area of law enforcement. 82 Part 1AB, accordingly, in my opinion, may be seen as giving expression to a legislative intent to establish a framework of accountability and control for controlled operations authorised in accordance with the Act and to do so concurrently, within expressed limits, with statutory schemes of a similar nature established under State and Territory legislation. 83 The inconsistency claimed by the plaintiffs should also be examined by reference to the provisions of the State Act. (ii) Law Enforcement (Controlled Operations) Act 1997 (NSW) 84 The Act is designed to facilitate investigative operations in the nature of controlled operations authorised either under its provisions or under the provisions of a law of the Commonwealth (see the definitions of “authorised operation” and “corresponding law” in s.3 of the State Act). The expression “authorised operation” is defined in s.3 as meaning “a controlled operation for which an authority is in force and, in Part 3 and 5, includes any operation in the nature of a controlled operation that is authorised by or under the provisions of a corresponding law”. 85 The expression “corresponding law” is defined in s.3 as meaning “a law of the Commonwealth or of another State or Territory, referred to in Schedule 1”. 86 The State Act provides, in Part 2 (in particular in ss.6 and 8) for the granting of an authorisation for a controlled operation, including the engagement by law enforcement participants and/or civilian participants in “controlled activities” which are defined in s.3 of the State Act as including activities that, but for s.16, would be unlawful. 87 The exemption provided for in s.16 of the State Act is expressed to apply to an “authorised operation” and operates so as to apply to New South Wales agencies as identified in s.
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null
nsw_caselaw:549fd5333004262463bf0c3f:14
nsw_caselaw:549fd5333004262463bf0c3f
3 of that Act and to prescribed federal law enforcement agencies (the Australian Federal Police, the Australian Crime Commission and the Australian Customs Service – see the definition of “law enforcement agency” in s.3 of the State Act) in respect of activities that would otherwise constitute an offence under “… any other Act or law …”: s.16. 88 The latter provision is in the nature of a statutory exemption. It operates to immunise from criminal liability the authorised participants in a controlled operation who undertake activities in accordance with an authority granted under the State Act. (b) The direct inconsistency issue 89 The constitutional question requires consideration of two matters:- (i) Whether inconsistency is manifested by the provisions of the State Act. (ii) Whether an authorisation granted under the State Act is itself capable of giving rise to an inconsistency for the purpose of s.109 of the Constitution. 90 The provisions of the State Act do not, in terms, expressly authorise the doing of an act rendered unlawful by Commonwealth law including the Customs Act or the Crimes Act 1914 (Cth). At most, it could only purport to have that effect indirectly through the medium of an authority granted under the provisions of Part 2 of the State Act. 91 I have proceeded upon the basis that the contentions and arguments advanced on behalf of the plaintiffs embraced both an alleged inconsistency arising from the terms of the State Act and indirect inconsistency through the medium of the authorisations granted under the State Act, the subject of these proceedings. 92 Although, on their face, those authorities could be interpreted as purporting to authorise what could otherwise be a breach of Commonwealth law, consistently with the High Court’s approach in Love & Peters v. Attorney-General (1990) 169 CLR 307, it is necessary to construe each of them by reference to the terms and width of the enabling statutory provisions in the State Act. 93 Mr. Robinson placed reliance upon what he referred to as the actual and practical operation of the Commonwealth laws referred to in paragraphs [47] and [49]. Each of those Commonwealth created offences are punishable by periods of imprisonment or monetary penalties or both. The submission was that one cannot, at the same time, “obey” a purportedly valid controlled operation authority granted under the State Act (which it was said allows one to “act with impunity”) and at the same time seek to “obey” the Commonwealth criminal laws by not breaching them. 94 Accordingly, so the argument ran, the possession or conveying of illegally imported cocaine within Australia would contravene ss.233B(1)(a)(iv), (v) and (vi) of the Customs Act 1901 in the absence of a “reasonable excuse” for doing such acts within the meaning of that expression in s.233B(1AAB). 95 It was contended that conduct that would constitute a contravention of these last mentioned provisions “may”, however, be undertaken within New South Wales under the purported cover of a controlled operation authority under the State Act. It was asserted that the State Act is not in terms limited in its expressed scope or operation so as to exclude such conduct in its “practical or legal operation”. Reliance was placed upon the provisions of s. 7 of the State Act which purportedly “authorises” the conduct and s.16 which declares it “not unlawful” and that it “does not constitute an offence”. Reference was also made to the provisions of s.18 of the State Act which make lawful “ancillary activities” such as aiding and abetting. (The plaintiffs also relied upon the fact that there did not exist appropriate authorities in respect of the conduct in question granted under the provisions of Part 1AB of the Crimes Act 1914 (Cth)).
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null
nsw_caselaw:549fd5333004262463bf0c3f:31
nsw_caselaw:549fd5333004262463bf0c3f
“Parliament’s intention as to the Act and, in particular, s.7, was therefore plain. The s.7 mandatory prohibition was to operate as a blanket prohibition on the valid grant of any authority in circumstances of entrapment or health and safety. They are dealt with as paramount matters and were expressly not included as part of the decision-making or determination process of the chief executive officer. There is no provision for a ‘balancing’ of these considerations by the chief executive officer. Parliament has already undertaken that task in the Act, and in respect of these two matters, it has provided for a prohibition. The chief executive officer is simply prevented from granting a certificate. He is bound to comply with the Act.” Analysis of the jurisdictional fact question 192 In order to determine the position the provisions of s.7(1)(b) occupy in the scheme of the State Act and their nature, attention should first be given to the nature and the content of the “matters” to which the prohibitions under s.7 relate. In that respect, the following are noted:- (a) The nature of the “matter” specified in s.7(1)(b) (from engaging in conduct that is likely to seriously endanger the health or safety of specified persons) needs to be considered in light of the whole of s.7(1), that is both subparagraphs (a) and (b) of that section:- (i) Section 7(1) is essentially concerned with marking out limits or boundaries on the proposed activities or conduct of participants under a controlled operations authority which a chief executive officer of a law enforcement agency otherwise considers should be granted. (ii) The nature of the “matters” under s.7(1)(a) and (b) are not in the nature of self-evident facts. They necessarily involve and require an evaluation or assessment of a proposed controlled operation by a person (the chief executive officer of the relevant law enforcement agency) who is presumed to hold the requisite knowledge and operational expertise to undertake those tasks. (iii) The assessment, in particular, under s.7(1)(b) involves matters of fact and degree when determining its application. As stated by Spigelman, CJ. in Pallas Newco (supra), at [56]:- “Where issues of fact and degree arise, it will often be the case that these are matters which a decision-maker is intended by Parliament to determine and, accordingly, any error is an error within jurisdiction rather than an error going to jurisdiction.” The fact that a judgment involving matters of fact and degree is not, of course, necessarily conclusive: Pallas Newco (supra) per Spigelman, CJ. at [60], [61]. However, in the present proceedings, apart from the prohibitory terms of s.7(1)(b), the overall statutory context does not, in my opinion, offset the point made by Spigelman, CJ. as quoted above. (iv) A process of assessment is required under s.7(1)(a). That provision is not expressed in a way that employs a “reasonable person” test. The “person” referred to in s.7(1)(a) is to be taken as the person who is the or a target of a proposed controlled operation as part of a particular investigation. As discussed below, the assessment that is required to be undertaken under s. 7(1)(a) in relation to the target or targets is necessarily both an informed and an expert one in order for a judgment to be made on whether or not authorised activities would induce or encourage that person or persons to engage in criminal activity or corrupt conduct “of a kind” that he or she could not reasonably be expected to engage in unless induced or encouraged. (v) The provisions of s.7(1)(b) also involve and require an objective evaluation or assessment of procedural or operational risk and a judgment to be made in relation to it. That risk is to be assessed in terms of a likelihood “… likely to seriously endanger the health or safety …” ). An assessment of a potential or future risk may be a matter upon which different minds may differ.
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null
nsw_caselaw:549fd5333004262463bf0c3f:7
nsw_caselaw:549fd5333004262463bf0c3f
(i) Nature of controlled activities by law enforcement participants Possess 750 grams of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”. (ii) Nature of controlled activities by registered informer Take possession of 750 grams of cocaine and supply this cocaine to Gilbert Gedeon and/or persons attending with him or introduced by him, in return for payment of $120,000 to be collected by Tom at a later date. The $120,000 is to be retained by Tom and handed to Shayne Hatfield, at the time and place nominated by Hatfield. 37 On each of the occasions on which “Tom” supplied cocaine purportedly as a ”civilian participant” and as part of the controlled operations, he was visually observed by joint taskforce officers. 38 Subsequently, “Tom” was granted indemnities by both Commonwealth and New South Wales authorities covering all acts done by him under the Authorities. 39 It is agreed that the matters the subject of the authorities were not the subject of any permissions or authorisations under Part 1A of the Crimes Act 1914 (Cth) or of any order under s.39RA of the Drugs (Misuse and Trafficking) Act 1985 (NSW). 40 On various dates in May 2005, the five plaintiffs were arrested and charged in respect of alleged supply of a prohibited drug contrary to the Drugs (Misuse and Trafficking) Act. They were committed for trial in April 2006. 41 The criminal proceedings against each of the plaintiffs in respect of these matters were listed before the District Court on 27 October 2006 for the purposes of setting a trial date in 2007. The proceedings are due to be relisted before the District Court for the purpose of setting them down for trial. 42 All of the charges in relation to each of the plaintiffs concerning the cocaine referred to in the agreed statement resulted from the controlled operations undertaken pursuant to the Authorities. THE COMMONWEALTH PROVISIONS: CRIMINAL LIABILITY 43 The issue concerning on the “constitutional question” in the present proceedings and discussed below is whether the State Act, by its terms and/or in its operation per medium of the authorities purportedly granted under it by the first defendant, conflicts with the abovementioned provisions of Commonwealth law that create criminal liability and/or with the provisions of Part 1AB of the Crimes Act 1914 (Cth). 44 The relevant Commonwealth laws that are said by the plaintiffs to lead to invalidity are identified in the statement of agreed facts and have been referred to in paragraph [21] above. 45 In that statement, the following is recorded:- “The plaintiff contends (and the defendants deny) that ss.13, 16, 17 and 18 of the [State] Act were inconsistent with subparagraphs 233B(1)(a)(iv), (v) and (vi) of the Customs Act, and Part 1AB of the Crimes Act 1914, and thus invalid by operation of s.109 of the Commonwealth Constitution.” 46 The plaintiffs’ supplementary submissions additionally raised the question of claimed inconsistency arising by virtue of the operation of certain money laundering provisions in Division 400 of the Criminal Code (Cth). The relevant provisions are set out below. (a) The Customs Act provisions 47 Section 233B, as it stood at the relevant period, provided as follows:- “(1) A person commits an offence if:- (a) The person:- (i) possesses goods on board a ship or aircraft; or (ii) brings goods into Australia; or (iii) imports goods into Australia; or (iv) possesses goods that have been imported into Australia in contravention of this Act; or (v) conveys goods that have been imported into Australia in contravention of this Act; or
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null
nsw_caselaw:549fd5333004262463bf0c3f:30
nsw_caselaw:549fd5333004262463bf0c3f
185 He also submitted that, unlike the reference in s.5(1) which he asserted related to a jurisdictional fact, namely, that there be an application by a law enforcement officer - a matter “preliminary” to the exercise of the power conferred by s. 6 - the factual reference in s.7(1)(b) was a matter that occurs as part of the “statutory formulation of [the] power to be exercised by” the chief executive officer. The submission was that in this respect the evaluation of the likelihood (or otherwise) of serious danger to health or safety was “integral to the task that must be performed by the chief executive when making a decision pursuant to s. 6” (written submissions, 9 October 2006, [16]). It was submitted in this respect that the decision necessarily arises in the course of the consideration of the relevant power and was, accordingly, a non-jurisdictional fact. 186 In further submissions, Mr. Temby contended that other considerations which support this conclusion include:- • The fact that the issue posed by s.7(1)(b) must be addressed by the chief executive and is unlike that contained in s.5 (which is directed at the applicant). • The fact that the factual issue raised by s.7(1)(b) is intrinsic to the chief executive’s decision and cannot be avoided by him or her also suggests that the fact is non-jurisdictional. • The fact that the issue as to whether a proposed operation would be likely to endanger health and safety is located in s.7 rather than, for example, s.5, indicates that it involves a non-jurisdictional fact being part of the decision-making process rather than a part of the application process or otherwise antecedent to the decision-making. 187 Reliance was also placed by the Crime Commission in its submissions upon the purpose of the legislative scheme and of s.7(1)(b), in particular, and the nature of controlled operations and the role or function of controlled operation authorities. The Commission also placed reliance upon the proposition that unnecessary inconvenience would flow from a finding that s.7(1)(b) refers to a jurisdictional fact. The submission as to “inconvenience” will be addressed separately below (paragraph [212] to [213] and [219]). 188 In the extensive written submissions on behalf of the plaintiffs dated 24 October 2006 and in oral submissions, Mr. Stratton, SC. and Mr. Robinson relied, inter alia, upon the structure of the section in its immediate statutory context in Part 2 of the Act submitting that s.7(1) was in terms “… in stark contrast to s.6(3) & (4) and 7(2) & (3) …”. 189 Reliance was placed upon the fact that the last-mentioned provisions provided for the decision-maker to be “satisfied” as to certain matters. Section 7(1), on the other hand, as noted above, makes no such reference. In this respect, it was contended there was no need for the decision-maker to be satisfied as to anything. If the relevant facts exist (as to entrapment or risk to health and safety), then an authority cannot be granted. 190 Whilst the plaintiffs’ written submissions acknowledged that the decision-maker “may have to have regard to the s.7(1)(b) question, it is notably not a factor that was provided for in the legislation as to whether an application should be granted. It is specially absent as such a factor. If the factor exists, the decision-maker must not grant an authority. It is a “compliance issue” (paragraph [17] of the written submissions). 191 It is not possible to do justice to the very detailed and well-constructed submissions made on behalf of the plaintiffs in providing, as I have, reference to some only of the principal aspects of the submissions. I have, of course, closely examined the submissions in their entirety. I do, however, specifically record the substantive submission in paragraph [31] of the written submissions as follows:-
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null
nsw_caselaw:549fd5333004262463bf0c3f:39
nsw_caselaw:549fd5333004262463bf0c3f
In determining the application of that expression, not only ultimate issues, but other issues as to facts that are relevant to facts in issue may be considered to be “relevant evidence”. See generally, Smith v. The Queen [2001] 206 CLR 650 at [6] per Gleeson, CJ., Gaudron, Gummow and Hayne, JJ. 249 The evidence of Dr. Degenhardt is sought to be relied upon as proof of the existence of a fact in issue in the proceedings, namely, as proof that the conduct authorised was “… likely to seriously endanger the health or safety …” of a participant or another person. As discussed earlier, that is a matter involving the proper construction of s.7(1)(b). 250 The phrase in s.7(1)(b) “… engaging in conduct that is likely to seriously endanger the health or safety …” is one, in my opinion, that involves the following concepts:- (a) It is particular “conduct” within the meaning of s.3 of the State Act (which is defined to include any act or omission) to which the section relates. (b) The conduct must itself be such that it is likely to produce a consequence, namely, to seriously endanger health or safety of persons referred to in the subsection. (c) Conduct which carries only the potential or possibility of causing serious danger to health or safety depending upon the existence of other independent facts later in time is not conduct within s.7(1)(b). This is particularly so, given the inclusion of the phrase “likely to” in the expression “likely to seriously endanger …” . 251 Dr. Degenhardt’s report (Exhibit D) is principally directed to identifying the potential effects of cocaine usage and related issues such as the availability of cocaine in the Australian market, the epidemiology of cocaine use and the epidemiology of “harms”. Reference, in this latter respect, is referred to research into “the nature and extent of harms related to cocaine use” identifying issues related to cocaine dependency and overdose. The report, Exhibit D, also deals with the symptoms associated with sustained use of the drug as well as toxic reactions to it from short term usage. 252 An examination of the reports establishes that they together address the following:- (a) The nature of cocaine and its capacity, when ingested, of producing “harms” (including cocaine dependence and overdose). (b) The relationship between drug supply and drug usage. (c) Methods of cocaine use – injecting cocaine and intranasal method of administration. 253 The opinion expressed, in essence, is to the effect that, to the extent that seven kilograms of cocaine represents an increase in supply, then it is likely to have the potential to cause an increase in “harms” for some users. This opinion, of course, takes as its premise that the seven kilograms of cocaine supplied (or part thereof) is, after supply, administered or ingested in one or other of the ways referred to in the reports. 254 On the ordinary construction of s.7(1)(b), I am of the opinion that the conduct proscribed by s.7(1)(b) is conduct which in itself, or of its nature, is likely to produce the result or consequence referred to, namely, to seriously endanger health or safety. 255 The construction which the plaintiffs contend for proceeds upon the basis that the mere supply of cocaine is, itself, conduct that is likely to seriously endanger health or safety. I am unable to accept that that is the correct interpretation of the provision. Something more is required than mere supply. If an authority granted under the Act to conduct a controlled operation authorised conduct in the course of an operation which involved the active encouragement or inducement or persuasion of a person to consume a prohibited drug or it involved conduct involving the administration of a prohibited drug, then such conduct, in my opinion, would more than likely fall within the terms of s.7(1)(b).
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nsw_caselaw:549fd5333004262463bf0c3f:8
nsw_caselaw:549fd5333004262463bf0c3f
(vi) possesses goods that are reasonably suspected of having been imported into Australia in contravention of this Act ; or (vii) … (b) The goods are a prohibited import to which this section applies . (1AAB) Subparagraph (1)(a)(i), (ii), (iv), (v) or (vi) does not apply if the person proves that the person had a reasonable excuse for doing the act referred to in that subparagraph. …” (emphasis added) 48 Section 233B of the Customs Act 1901 (Cth) provided that the prohibited imports to which s.233B applies are “… prohibited imports that are narcotic goods and the prohibited exports to which this section applies are prohibited exports that are narcotic goods”. 49 “Narcotic goods” are defined in s.4 of the Customs Act as goods consisting of a narcotic substance. “Narcotic substance” is in turn defined by s.4 as any substance named in Schedule VI to the Act. That Schedule includes the substance cocaine. 50 The remaining provisions of s.233B are not relevant to the present proceedings. (b) The Criminal Code Act (money laundering) provisions 51 Part 10.2, Money laundering, Division 400 of the Criminal Code Act 1995 (Cth) contains a number of provisions to be found in ss.400.1 to 400.16. 52 For the purposes of the present proceedings, attention may be confined to the following. 53 Section 400.2 deals with the meaning of dealing with money or other property. Attention may be confined to the provisions of s.400.2(1)(a)(i) and (b) of the Criminal Code:- “400.2(1) For the purposes of this Division, a person deals with money or other property if:- (a) the person does any of the following:- (i) receives, possesses, conceals or disposes of money or other property; … (b) the money or other property is proceeds of crime, or could become an instrument of crime, in relation to an offence that is a Commonwealth indictable offence or a foreign indictable offence. 54 The expression Commonwealth indictable offence is defined in s.400.2(3) as follows:- “ Commonwealth indictable offence means an offence against a law of the Commonwealth, or a law of a Territory …, that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence).” 55 The expression “deals with money or other property” is defined in s.400.2(2)(a)(i) and (b)(i) of the Criminal Code as follows:- “400.2(2) For the purposes of this Division, a person deals with money or other property if:- (a) the person does any of the following:- (i) receives, possesses, conceals or disposes of money or other property; … (b) the person does any of the matters referred to in paragraph (a):- (i) in the course of or for the purposes of importation of goods into, or exportation of goods from, Australia; or …” 56 Sections 400.3(1), 400.4(1), 400.5(1), 400.6 and 400.7(1) of the Criminal Code make it an offence (defined in the Dictionary of the Criminal Code to mean an offence against a law of the Commonwealth) for a person to deal with money (as defined in s.400. 2) and the money is, and the person believes it to be, proceeds of crime or the person intends that the money will become an instrument of crime, and at the time of the dealing the value of the money is as specified in one or other of the last mentioned sections of the Code. 57 There are other provisions of the code that make it an offence for a person to deal with money and the money is proceeds of crime or there is a risk that the money or property will become an instrument of crime and the person is reckless as to the fact that the money is proceeds of crime or the fact that there is such a risk and at the time of the dealing the value of the money is as specified in the relevant provisions (ss. 400.3(2), 400.4(2), 400.5(2), 400.6(2) and 400.7(2) of the Code.
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null
nsw_caselaw:549fd5333004262463bf0c3f:3
nsw_caselaw:549fd5333004262463bf0c3f
In reliance on the authorities, cocaine was alleged to have been supplied to the plaintiffs and money received in exchange for the cocaine supplied. 6 A question has been raised in the present proceedings as to whether the State Act is invalid on the basis that it is said to be inconsistent with certain provisions of the Customs Act 1901 (Cth), of the Criminal Code Act 1995 (Cth) and the provisions of Part 1AB of the Crimes Act 1914 (Cth) (Commonwealth controlled operations provisions) and by reason of the impact of s. 109 of the Commonwealth Constitution. 7 The plaintiffs contended that:- (a) the provisions of the State Act (which was assented to on 17 December 1997 and operative from 1 March 1998) are directly inconsistent with such laws of the Commonwealth. (b) The provisions of the State Act “alter, impair or detract from” or “qualify, impair, undermine or negate” the operation of the above Commonwealth laws within the meaning of the tests enunciated by the High Court in the relevant cases. (c) That the “controlled operations” provisions of Part 1AB of the Crimes Act 1914 (Cth) cover the field and that the State Act is, to that extent, inconsistent with the said provisions of the Commonwealth Act (Part 1AB was inserted into the Crimes Act 1914 (Cth) by Act No. 28 of 1996 and commenced on 8 July 1996). 8 The plaintiffs in the alternative, also submitted that the New South Wales Parliament does not have legislative power to make laws in respect of controlled operations that purport to make lawful that which would otherwise constitute a Commonwealth offence in the absence of a corresponding Commonwealth law that expressly permits it. 9 Mr. J. Stratton, SC., with Mr. M.A. Robinson of counsel appeared on behalf of the plaintiff, David Darley Dowe. Mr. Robinson of counsel also appeared on behalf of the plaintiffs, Robert Pavan and Joe Zaiter and with Mr. A. Djemal of counsel for the plaintiff, Gilbert Gedeon. 10 Mr. I. Temby, QC., with Mr. P. Singleton of counsel appeared on behalf of the New South Wales Crime Commission and its Commissioner, Mr. Phillip Bradley, whilst Dr. J. Renwick of counsel with Mr. C. Lenehan of counsel appeared on behalf of the Attorney General for New South Wales, intervening pursuant to s.78A of the Judiciary Act 1903 (Cth) in the proceedings. SEPARATE QUESTIONS FOR DETERMINATION 11 On 22 August 2006, the second defendant filed a notice of motion for the separate determination of two questions. On 18 September 2006, I made orders the following questions be determined separately from the rest of the proceedings:- (a) Are ss.5 to 20 of the Law Enforcement (Controlled Operations) Act 1997, or any of those sections, alone or in combination, ultra vires or invalid by reason of s.109 of the Commonwealth Constitution? (the “constitutional question”). (b) Does the jurisdiction of this Court extend to determining whether or not any conduct proposed to be authorised (or that was authorised) pursuant to s. 6(1)(a) of the Law Enforcement (Controlled Operations) Act 1997 is (or was) likely to seriously endanger the health or safety of any participant or any other person, or to result in serious loss or damage to property, within the meaning of s.7(1)(b) of that Act? (the “jurisdictional fact question”). 12 An order was made that the hearing of the above questions be expedited. 13 On 25 October 2006, an order was made for the solicitors for the plaintiff to file and serve notices under s.78B of the Judiciary Act 1903 (Cth). On 6 October 2006, the Crown Solicitor wrote to the Registrar of the Court advising that the Attorney General for New South Wales had instructed the Crown solicitor to intervene in the proceedings. On 25 October 2006, the solicitors for the plaintiff were directed to file and serve by 4.00 pm on Tuesday 24 October 2006 any amended notices under s.78B of the Judiciary Act. Such notices were provided by notices and covering letters dated 26 October 2006.
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null
nsw_caselaw:549fd5333004262463bf0c3f:25
nsw_caselaw:549fd5333004262463bf0c3f
“(a) in relation to New South Wales Police, the Commissioner of Police; and (b) in relation to the Independent Commission Against Corruption, the Commissioner for that Commission; and (c) in relation to the New South Wales Crime Commission, the Commissioner for that Commissioner; and (d) in relation to the Police Integrity Commission, the Commissioner for that Commission; and (e) in relation to a law enforcement agency prescribed by the regulations, the Chief Executive Officer (however described) of that agency, and, in relation to an authorisation operation, means the Chief Executive Officer of the law enforcement agency on whose behalf the operation has been, is being, or is proposed to be conducted.” 155 It is apparent from these provisions that the legislature has determined that, unlike much legislation concerning the issue of search warrants and listening device warrants, under which it is common to find that an “authorised justice” is the issuing authority for such warrants, the legislature has determining that applications under Part 2 of the State Act are best granted by the chief executive officer of the law enforcement agency on whose behalf the operation is proposed to be conducted. The chief executive officer is taken as the person who holds the necessary operational experience for the making of such determinations. The importance or significance of the chief executive officer in question being satisfied as to the existence of “reasonable grounds to suspect” is emphasised by the provisions of s. 6(5) which state that the chief executive officer must keep a written record of the reasons for which he or she “is satisfied” as to the matters referred to in s.6(3)(a). Section 5 – applications for authorities 156 Section 5 of the State Act prescribes important procedural and other matters in relation to applications for an authority to conduct a controlled operation. The section is clearly directed to ensuring the establishment of a system that ensures that informed assessments of applications are made and accountability exists with respect to those applying for and those who approve such applications. 157 Section 5(2) deals with the initiating process whereby an authority may be made and s.5(2A) provides, with some specificity, the requirements for an application for such an authority. These are all matters antecedent to (and in the nature of conditions precedent) to any consideration of an application for authorisation of a controlled operation by the relevant chief executive officer of the agency in question. 158 It is evident that non-compliance with s.5(2) and s.5(2A) would carry the consequence that no authority could be validly granted. In that sense, the requirements set out in those sections may be seen as essential matters that precede any inquiry or examination and more readily construed as being jurisdictional facts. Mr. Temby, on behalf of the Crime Commission, also submitted that the provisions of s.8 of the Act were of a qualifying nature but prescribed the matters with which an authority issued under the Act must comply. Absent compliance, he contended, there can be no lawful authority. 159 The matters specified in s.5(2) and s.5(2A) are plainly matters of objective fact that are preliminary to the decision-making process. In that sense, they are of an extrinsic nature and depend upon establishing objective facts. They are to be contrasted with the factual references arising in, or in relation to, the conduct of the decision-making processes arising under s.6 and s.7 of the State Act. 160 In the contention of the Crime Commission, the provisions of s.6 and s.7 of the State Act provide directions by the Parliament as to how or as to the way in which the relevant chief executive is to exercise the power to grant or not to grant an authority under the State Act or whether to grant an authority only upon specified conditions.
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null
nsw_caselaw:549fd5333004262463bf0c3f:20
nsw_caselaw:549fd5333004262463bf0c3f
127 Insofar as, contrary to the conclusion I have earlier stated, the authorities granted by the first defendant could themselves be construed as authorising contraventions of s. 233B, any suggested inconsistency would be resolved by the application of the “reasonable excuse” provision, on the same assumption earlier stated, namely, that the evidence established the necessary facts to support such an excuse in each case. 128 I, accordingly, am of the opinion that it has not been established that activities of the law enforcement and civilian participants in the possession and/or conveyance of prohibited goods that had been imported into Australia for the purposes of a controlled operation would necessarily constitute contraventions of the provisions of s. 233B(1)(a)(iv) or (v) of the Customs Act. Accordingly, the claimed direct or indirect inconsistency has not, in my opinion, been established. (d) “Covering the field” – s.109 of the Constitution 129 In relation to the contention made on behalf of the plaintiffs that Part 1AB of the Crimes Act 1914 (Cth) “covers the field”, the following general matters are noted:- (a) Where the Commonwealth Parliament’s intention to cover the field is in issue, it is to be resolved as a matter of statutory construction: Re Credit Tribunal; ex parte General Motors Acceptance Corp. (Australia) (1977) 137 CLR 545, 562 per Mason, J. (b) In that respect, it is necessary to consider any provision in the relevant Commonwealth statute which throws light on the intention of the statute to make exhaustive or exclusive provision on the subject with which it deals: Re Credit Tribunal (supra) at 562 per Mason, J. (c) It is necessary, in particular, for the Court in the course of such examination as to whether this Act manifests an intention to cover the field, to evaluate the significance to be attached to a provision such as s.15GA of the Crimes Act 1914 (Cth) (Concurrent operation of State and Territory laws). Such a provision is, at least, consistent with the fact that it is Parliament’s intention that the State Act should operate concurrently with the provisions of Part 1AB unless it is shown to be “directly inconsistent” with that Part. 130 The following general observations are noted at this point:- (a) The provision of Part 1AB and the State Act both represent legislative responses to the High Court’s judgment in Ridgeway . (b) Each is directed to similar ends – the provision, inter alia, of a legislative base for controlled operations by specified law enforcement agencies for the investigation of major or serious criminal activity and, for that purpose, to confer a statutory exemption upon participating law enforcement officers and other authorised persons from criminal responsibility for conduct undertaken in the course of an operation as well as an indemnity in respect of any civil liability. (c) The provisions of the State Act (enacted later in time) in many respects mirrors or reflects the provisions of Part 1AB. (d) The federal provisions and the State Act contain provisions (referred to in paragraphs [79] and [84] to [87]) which reflect a legislative intent by both federal and State (New South Wales) Parliaments that the two statutory schemes should operate in a complementary or harmonious fashion. This is to be expected, given the inter-jurisdictional nature of much organised crime, including the illicit trafficking in prohibited drugs and other multi-jurisdictional offences. (e) Provisions in the State Act which reflect the policy adverted to in the preceding paragraph include:- (i) The abovementioned provisions of s.15GA in Part 1AB, concurrent operation of State and Territory laws :- “It is the Parliament’s intention that a law of a State or Territory should be able to operate concurrently with this Part unless the law is directly inconsistent with this Part.”
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null
nsw_caselaw:549fd5333004262463bf0c3f:38
nsw_caselaw:549fd5333004262463bf0c3f
239 I do not, with respect, see these examples as assisting the construction of s.7(1). Issues such as the physical handing over of a dangerous object could come within s.7(1)(b) if the object, in terms of the danger to which it could give rise, was a self-activating or self-executing one without intervening conduct by third persons. On the other hand, conduct involving the handing over of a loaded gun to a suspected killer in the second example would be a matter requiring careful consideration in the application, not in terms of s.7, but of s.6(3)(c). 240 A further example was advanced in the plaintiffs’ written submissions. It was said that on the defendant’s argument, had “Tom” cut the subject cocaine with a harmful or corrosive substance which could result in death if consumed, would mean that he would be protected. I consider, however, as was argued by Mr. Temby on behalf of the Crime Commission, that in that circumstance the danger to the health or safety of the persons consuming the substance would be properly considered to be the consequence of the unlawful activities of the person who added the harmful ingredient and not to the activity of handing over the cocaine before that occurred. 241 Mr. Robinson further contended that the terms of s.7(1) were unambiguous and that there was support for a broader construction to be given by reference to the second reading speech. 242 Mr. Robinson argued that the release of seven kilograms of cocaine in February/March 2005 where there was no provision whatever in the application or the authority or the operational plan to recover it meant that the plan involved the unrestricted release of the cocaine to members of the general public. Attention was drawn, in this regard, to Dr. Degenhardt’s opinion that such a release of cocaine would be likely to cause harm to “some members of the Australian public”. 243 Dr. Degenhardt, a clinical psychologist and a senior lecturer at the National Drug and Alcohol Research Centre, University of New South Wales, has conducted considerable research examining the use and harm related to the consumption of drugs in Australia. Her Ph.D. qualifications involved research into the associations of drug use problems and mental health problems in Australia. 244 There is, of course, no issue but that Dr. Degenhardt holds the requisite qualifications and experience and therefore, “specialised knowledge” within the meaning of s. 79 of the Evidence Act and that the opinions expressed in her reports, Exhibits C and D, are wholly or substantially based on that knowledge. The real question is whether or not those opinions are relevant to the issue under s.7(1)(b). 245 In her report of 31 July 2006, Dr. Degenhardt states that it is “highly likely that harm would be caused to some members of the Australian public by the release of seven kilograms of cocaine onto the ‘market’”. 246 Dr. Degenhardt advances, inter alia, this opinion upon the basis of evidence which suggests that when drug supply is increased, so too does drug usage. She states that the release of seven kilograms onto the Australian market, which had already been removed from circulation by law enforcement operatives, would constitute such an increase in supply and usage. On that basis, Dr. Degenhardt expresses the opinion that the supply is likely to have had “the potential to cause increases in harms for some users” (p.2). 247 The admissibility of Dr. Degenhardt’s reports turns on the provisions of s.55(1) of the Evidence Act 1995 (NSW). That section provides that evidence is relevant in a proceeding if it is evidence which could “… rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings”. 248 The expression “a fact in issue”, it may be taken as one which refers to issues in the proceedings, defined by substantive law and the pleading.
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null
nsw_caselaw:549fd5333004262463bf0c3f:4
nsw_caselaw:549fd5333004262463bf0c3f
14 Pursuant to directions made on 19 September and 25 October 2006, extensive written submissions were filed on behalf of the parties. These submissions are identified and particularised in the schedule to this judgment. 15 On 21 November 2006, I granted leave to the second defendant to file a notice of motion seeking the separate determination from the rest of the proceedings of two further questions as follows:- “(a) Is the report of Louisa Degenhardt (undated), being part of Annexure C to the affidavit of Stephen Dack sworn 18 August 2006, relevant to, and admissible in, the proceedings upon the Summons? (b) Is the report of Louisa Degenhardt (dated 31 July 2006), being part of Annexure AC to the affidavit of Stephen Dack sworn 18 August 2006, relevant to and admissible in, the proceedings upon the Summons?” 16 An order was made on 21 November 2006 that these additional questions be separately determined together with the questions set out in paragraph [11]. 17 The hearing of the separate questions proceeded on 2 and 21 November 2006. GROUNDS 18 In support of the orders sought, the plaintiffs relied upon two principal grounds. 19 The first ground asserted that the authorities impermissibly purported to authorise or make lawful conduct which would otherwise constitute serious criminal offences under Commonwealth law or was in breach of that Commonwealth law. Consequentially, Parts 2 and 3 of the Act or, alternatively, ss.6, 13 and 16 of that Act, were said to be ultra vires or invalid as being inconsistent with a law of the Commonwealth within the meaning of s.109 of the Commonwealth Constitution. 20 The second ground asserted that the first defendant failed to identify the fact that the proposed conduct was likely to seriously endanger the health or safety of another person or persons, namely, members of the public who purchased or were given the subject cocaine for personal use or consumption. STATEMENT OF AGREED FACTS, DOCUMENTS, ISSUES AND CONTENTIONS 21 On 27 October 2006, a Statement of agreed facts, documents, issues and contentions on the separate questions was finalised between the parties. That document was subsequently tendered in the proceedings (Exhibit B). The introductory section of the Statement entitled “General”, set out relevant facts concerning the constitution of the Crime Commission, the office held by the first defendant as chief executive officer of the Crime Commission and the status and role of the Assistant Director of that Commission, who, at all relevant times, was a “law enforcement officer” within the meaning of s. 3 of the Act, a “special member of the Australian Federal Police” (within the meaning of s.4 of the Australian Federal Police Act 1979 (Cth) and a “special constable” (within the meaning of Part 4 of the Police (Special Provisions) Act 1901 (NSW). 22 Mr. Robinson of counsel, in his oral submissions on 2 November 2006, stated that the only relevant facts before the Court in relation to this question were those concerning the issue of the six controlled authorities under the State Act. He contended that they were the only relevant documents on the constitutional question, the authorities being either a “statutory decision” or an “instrument” under that Act. The only other relevant facts, according to Mr. Robinson, was that the individual plaintiffs had been arrested, charged with a number of offences under the Drugs (Misuse & Trafficking) Act 1985 (NSW) and the fact that the criminal trials concerning each of them were pending in the District Court of New South Wales. Mr. Robinson contended that the balance of the evidentiary material was only relevant to the third question (discussed below). THE FACTS 23 On 8 October 2004, approximately 10 kilograms of cocaine was unlawfully imported into Australia. None of the parties to the present proceedings was involved in, or aware of, the importation at the time it occurred.
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null
nsw_caselaw:549fd5333004262463bf0c3f:0
nsw_caselaw:549fd5333004262463bf0c3f
New South Wales Supreme Court CITATION : DOWE v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR; PAVAN v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR; GEDEON v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR; ZAITER & ANOR v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR [2006] NSWSC 1312 HEARING DATE(S) : 2 November 2006; 21 November 2006 JUDGMENT DATE : 12 December 2006 JURISDICTION : Administrative Law JUDGMENT OF : Hall J at 1 DECISION : The questions posed for separate determination pursuant to the provisions of Part 28 of the Uniform Civil Procedure Rules 2005 are answered as follows:- "Q1. Are ss. 5 to 20 of the Law Enforcement (Controlled Operations) Act 1997, or any of those section, alone or in combination, ultra vires or invalid by reason of s.109 of the Commonwealth Constitution? (the “constitutional question”). A. No. Q2. Does the jurisdiction of this Court extend to determining whether or not any conduct proposed to be authorised (or that was authorised) pursuant to s. 6(1)(a) of the Law Enforcement (Controlled Operations) Act 1997 is (or was) likely to seriously endanger the health or safety of any participant or any other person, or to result in serious loss or damage to property, within the meaning of s.7(1)(b) of that Act? (the “jurisdictional fact question”). A. No. Q3. Is the report of Louisa Degenhardt (undated), being part of Annexure C to the affidavit of Stephen Dack sworn 18 August 2006, relevant to, and admissible in, the proceedings upon the Summons? A. No. Q. 4 Is the report of Louisa Degenhardt (dated 31 July 2006), being part of Annexure AC to the affidavit of Stephen Dack sworn 18 August 2006, relevant to and admissible in, the proceedings upon the Summons? A. No. In relation to other relief sought in the amended summonses and foreshadowed in the document entitled "Second Further Amended Summons", the appropriate order in the circumstances is to re-list the proceedings for the purpose of: (a) Enabling the parties to consider the judgment and to apply for any orders under Part 28 Rule 4(2); (b) Issuing further directions. The proceedings are, accordingly, to be re-listed on Thursday 14 December 2006 at 9.45 am. CATCHWORDS : CONSTITUTIONAL LAW – Restrictions on Commonwealth and State legislation – claimed inconsistency of Commonwealth and State controlled operations legislation – whether Parts 2 and 3 Law Enforcement (Controlled Operations) Act 1997 (NSW) (“the LECO Act”) is invalid as being inconsistent with laws of the Commonwealth within the meaning of s 109 of the Commonwealth Constitution (“the constitutional question”) – the terms of the State Act do not directly or expressly purport to make lawful contraventions of the Commonwealth law – the terms of the State Act are to be construed as operating so as not to exceed the legislative power of State Parliament – the State Act does not purport to operate to remove liability under Commonwealth law. Part 1AB of the Crimes Act 1914 (Cth) with respect to controlled operations does not make exhaustive provision with respect to such operations and does not "cover the field" of regulation for the same - ADMINISTRATIVE LAW – judicial review at common law – whether the Court has jurisdiction to determine the question whether any conduct proposed to be authorised and engaged in pursuant to controlled operation authorities issued under the LECO Act is/was likely to seriously endanger the health or safety of any participant or any other person, or to result in serious loss or damage to property, within the meaning of s 7(1)(b) of the LECO Act (“the jurisdictional fact question”) – s 7(1)(b) does not constitute a jurisdictional fact satisfaction of which is an essential prerequisite to the making of an application for a controlled operation authority – consideration of s 7(1)(b)
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null
nsw_caselaw:549fd5333004262463bf0c3f:16
nsw_caselaw:549fd5333004262463bf0c3f
102 Whilst s.233B contains statutory defences as, for example, in s.233B(1A) and s.233B(1C), the provisions of s.233B(1AAB) are not expressed to constitute a defence provision as such. That subsection simply states that sub-paragraph (1)(a)(i), (ii), (iv), (v) or (vi) “does not apply” if the person proves that the person had a reasonable excuse for doing an act referred to in that sub-paragraph. Accordingly, wherever a reasonable excuse is established, the provisions of s.233B have no application whatsoever to the conduct that could otherwise have fallen within the conduct referred to in any of the abovementioned provisions of s.233B(1)(a). 103 There is no definition in the Customs Act 1901 as to what, for the purposes of s.233B, constitutes “a reasonable excuse” for the doing of an act referred to in s.233B(1)(a)(i), (ii), (iv), (v) or (vi). 104 Relevant authorities in which the concept of “reasonable excuse” has been considered have established a number of propositions and principles. Although these have arisen in a variety of statutory contexts, they may be taken as providing a guide to what was comprehended by that expression in s.233B(1AAB). They may be summarised as follows:- (a) A “reasonable excuse” provision, being cast in general terms, is one, which in accordance with orthodox canons of construction, should not be given a narrow meaning: Ganin v. NSW Crime Commission (1993) 32 NSWLR 423, 435 and 436 per Kirby, P. (as he then was); Regina v. Tawill [1974] VR 84 at 88. (b) The wide import of the phrase “without reasonable excuse” which, for present purposes may be taken as sufficiently similar to the phrase “a reasonable excuse” , has been held to be sufficiently wide to embrace defences, answers, justifications or excuses recognised by the established principles governing criminal responsibility, such as an absence of mens rea, mistake, insanity, infancy or duress: Tawill (supra) at 84. (c) A “reasonable excuse” may also be taken as including cases involving the possession or conveying of prohibited goods where there is legitimate justification for doing so. In the context of the former provisions of s.233B(1)(c) of the Customs Act , Gibbs, CJ. in He Kaw Te v. The Queen [1984-1985] 157 CLR 523 at 539 provided illustrations or examples when he stated:- “… since possession imports knowledge, ‘a reasonable excuse’, which falls to be considered only after possession has been proved, does not include mere lack of knowledge. Such a construction does not make the reference to ‘reasonable excuse’ meaningless or nugatory. A person may have narcotic goods in his possession because he has taken them from an addict and is about to destroy them, or because he has found them and is taking them to the police, or because he is an officer of Customs who has confiscated them, and these circumstances may provide him with reasonable excuse …” In the same case, Brennan, J. (as he then was) observed at 588:- “The third factor mentioned is the provision for proof of a reasonable excuse. Such an excuse is needed to exempt, inter alia, police and customs officers who have such prohibited imports in their possession from time to time in the course of their duty and innocent people who find themselves in possession of narcotic goods either by accident or in consequence of the actions of others.” Later in the same judgment (at 589), Brennan, observed:- “It follows that an exempting provision is needed to protect persons who, in the course of duty or otherwise acting with innocent motives, would have the mental state required to convict them of an offence under part (c) …” (d) Where legislatures enact defences such as “reasonable excuse” it has been held, at least in some statutory settings, that they effectively give, and are intended to give, to the courts the power to determine the content of such defences. Defences in that form are categories of indeterminate reference that have no content until a court makes its decision: Taikato v.
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null
nsw_caselaw:549fd5333004262463bf0c3f:37
nsw_caselaw:549fd5333004262463bf0c3f
228 For that purpose, it was submitted, it is essential that there be a precise identification of the conduct authorised under each authority and to then determine whether or not that conduct was likely seriously to endanger someone’s health or safety. 229 The relevant conduct was said, on behalf of the Crime Commission, to involve, firstly, the supply of cocaine by the law enforcement officer (Mark Standen) to “Tom” and, secondly, by way of specific example, conduct allegedly involving the supply of cocaine by “Tom” to the plaintiff Gedeon. As to the first, it is said that there was no likelihood whatever of any danger to anyone’s health or safety. The supplying of cocaine did not, of itself, endanger health or safety. Had “Tom” thereupon (or later) consumed the cocaine then his conduct (of consumption) may have endangered “Tom’s” health but the authorities did not purport to authorise “Tom” to engage in such unlawful conduct. 230 So far as the alleged supply by “Tom” is concerned, it is said again that there was no likelihood at all that that particular conduct would endanger anyone’s health or safety. 231 A similar argument was put that, had, for example, a person to whom “Tom” supplied cocaine later consumed it, then once again, whilst such consumption may have endangered that person’s health or safety, the authorities in question did not purport to authorise consumption of the cocaine. 232 It was further contended (written submissions, paragraph [10]):- “The possibility, or even the probability, that some unauthorised, illegal conduct may occur after the completion of the controlled operation does not prevent the granting of an authority and does not attract the operation of s.7(1)(b) …” 233 It was also contended by the defendants that the legislative purpose and the history and the words of s.7(1)(b) could not be taken as indicating Parliament’s intention to give the provisions of that section such a wide meaning as to make Dr. Degenhardt’s reports relevant. 234 Finally, it was argued by the Crime Commission that s.6 required a variety of factors to be taken into account including the consequences of a controlled operation as part of the balancing exercise called for by s.6. Such matters were not relevant, however, to s.7. Accordingly, the evidence in Dr. Degenhardt’s reports could have been relevant if the authorities had in fact authorised a person to consume cocaine but it was emphasised none of the authorities did so. 235 On this basis, the Crime Commission argued, the evidence had no relevance to the prohibition contained in s.7(1)(b). Accordingly it was submitted the evidence being irrelevant, meant that the reports of Dr. Degenhardt were inadmissible. 236 The preliminary point raised on behalf of the plaintiffs was that, as the outcome of the notice of motion is necessarily tied to the outcome of the “jurisdictional fact” question, it is premature to the judicial review hearing and was unnecessary. 237 Mr. Stratton and Mr. Robinson submitted that the construction contended for on behalf of the Crime Commission was “impermissibly narrow”. The plaintiffs, in effect, submitted that the authorities were to be construed as not merely limited to the physical act of “handing over” cocaine to “Tom” and the handing over of that cocaine to a third person for money. It was submitted that the conduct envisaged by the “s.7 prohibition” was significantly wider than that when understood in the context of the powers in the Act and the regulations made under it and from the terms of the six authorities themselves. 238 It was put that, if the defendant’s construction of s.7 were to be accepted, then it would permit law enforcement officers pursuant to a controlled operation authority:_ “… to hand a ticking bomb over to a person or persons known or suspected to be terrorists. Similarly, it would be the equivalent of them handing over a loaded gun to a person they know or suspect to be a killer.”
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null
nsw_caselaw:549fd5333004262463bf0c3f:41
nsw_caselaw:549fd5333004262463bf0c3f
265 On 21 November 2006, leave was granted to the plaintiff Dowe to file a Notice of Motion dated 21 November 2006 in which leave was sought to further amend the Amended Summons in terms of a document entitled “Second Further Amended Summons”. That document seeks to raise, inter alia, additional grounds of substantive and procedural ultra vires (paragraphs (ca) and (cb)). The notice of motion was stood over pending the determination of the separate questions. 266 The appropriate order in the circumstances is to re-list the proceedings for the purpose of:- (a) Enabling the parties to consider the judgment and to apply for any orders under Part 28 Rule 4(2). (b) Issuing further directions. 267 The proceedings are, accordingly, to be re-listed on Thursday 14 December 2006 at 9.45 am. SCHEDULE OF WRITTEN SUBMISSIONS (a) Plaintiffs’ written submissions on the constitutional question (i) The plaintiffs’ summary submissions on the constitutional question dated 6 October 2006. (ii) The plaintiffs’ supplementary submissions on the constitutional question dated 23 October 2006. (iii) The plaintiffs’ additional submissions on the constitutional question dated 6 November 2006. (iv) Plaintiff’s further supplementary submissions on money laundering offences dated 25 October 2006. (b) The submissions of the New South Wales Crime Commission on the constitutional question (i) Submissions for the Crime Commission dated 30 October 2006. (c) The submissions of the Attorney-General (NSW) (intervening) (i) Submissions dated 26 October 2006. (ii) Submissions dated 27 October 2006 on money laundering offences (d) Plaintiff’s reply submissions on the constitution question dated 31 October 2006. (e) The plaintiffs’ submissions on the jurisdictional fact question (i) Plaintiff’s summary submissions on the “jurisdictional fact” question dated 24 October 2006. (ii) Crime Commission’s submission on separate question dated 9 October 2006. (f) Plaintiff’s summary submissions on the “third question” (g) Submissions for the New South Wales Crime Commission (in relation to the two reports of Louisa Degenhardt) dated 1 November 2006. (h) Plaintiff’s summary submissions on the “third question” dated 30 November 2006. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
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null
nsw_caselaw:549fd5333004262463bf0c3f:36
nsw_caselaw:549fd5333004262463bf0c3f
(d) The judgment on the matters referred to in s.7(1)(b) cannot be performed other than as an intrinsic part of the process of evaluation of an application for a controlled operation authority. In particular, the matter referred to in s.7(1)(b) can only be considered and determined in the light of s.6(3)(c) matters – the nature and extent of the proposed controlled activities. (e) The fact that s.7(1)(b) is not framed in terms of the “satisfaction” of the chief executive officer and the prohibitory terms of the section are matters, in my opinion, that are outweighed by those identified above which, in my opinion, plainly establish s.7(1)(b) as related to matters that are not jurisdictional in nature. (f) Section 7(1)(b) does not, for reasons stated above, constitute a jurisdictional fact. (3) THE THIRD QUESTION: ADMISSIBILITY IN EVIDENCE OF THE REPORTS OF DR. LOUISE DEGENHARDT 220 The third question arises from the Notice of Motion filed in Court at the hearing on 2 November 2006. The motion was filed by the second defendant in the proceedings concerning Mr. Gedeon only. Mr. Robinson, in his oral submissions, stated that all of the plaintiffs wished to rely upon the expert evidence and that they all, in the judicial review hearing, also wished to rely on a report entitled “Illicit Drugs Reports”, particularly in respect of the jurisdictional fact issue. 221 Mr. Temby, on behalf of the Crime Commission, contended that there was no necessity for notices of motion to be filed on each of the proceedings raising the third question. The purpose of the notice of motion raising the question in the Gedeon matter was to have the issue determined upon the basis that the answer to the third question would be regarded as an answer for the purpose of the other proceedings. The third question has been dealt with on that basis. 222 The reports of Dr. Louise Degenhardt were admitted and marked as Exhibits C, D and E. In addition, a report entitled “Illicit Drugs Report” was tendered and marked as Exhibit F in the judicial review proceedings. 223 The Crime Commission applied for an order that the Court determine as a separate question whether or not the two reports of Louise Degenhardt dated 1 November 2006 are relevant and admissible in the proceedings on the plaintiffs’ amended summonses. 224 The authorities granted by the first defendant were given in circumstances in which it was anticipated and expected that the cocaine in question would likely not be recovered by the law enforcement officers involved in the controlled operations and therefore the cocaine (or some of it) could ultimately be consumed by either the persons to whom it was sold or other unknown persons. 225 Dr. Degenhardt’s reports essentially state that the consumption of cocaine can seriously endanger the health or safety of a person who consumes it. The question as to the admissibility of her reports, in turn, depends upon the construction of s.7(1)(b) and its application to the facts established on the agreed facts and agreed documents (Exhibit B). 226 In the written submissions on behalf of the Crime Commission dated 1 November 2006, it is asserted that the words of s.7(1)(b) are unambiguous. However, notwithstanding, reference was made to the historical context in which the Act was enacted, including, in particular, the High Court’s decision in Ridgeway (supra). Against the background of that case, it was submitted that the essential point for the purposes of the third question was that the State Act was calculated to allow, amongst other things, law enforcement officers authorised under an authority granted under that Act to engage in the illicit drug trade for the purposes of gathering evidence of drug trafficking offences. It was contended that s.7(1)(b) should accordingly be construed to facilitate that purpose. 227 The Crime Commission contended that in order to attract the prohibition prescribed by s.7(1)(b), the proposed operation must be one which involves conduct that is likely seriously to endanger someone’s health or safety.
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null
nsw_caselaw:549fd5333004262463bf0c3f:29
nsw_caselaw:549fd5333004262463bf0c3f
178 Spigelman, CJ. in Pallas Newco (supra) at 719 identified the indicators that were relevant in that case – which involved a zoning provision in an environmental planning instrument made under the Environmental Planning and Assessment Act 1979 (NSW) – to a determination as to whether particular facts were jurisdictional in nature. In this respect, the propositions may be identified from the Chief Justice’s analysis:- (a) Where issues of fact and degree arise, it will often be the case that these are matters which a decision-maker is intended by Parliament to determine and, accordingly, any error is an error within jurisdiction rather than an error going to jurisdiction (at [56]). (b) However, it is not always the case that matters of judgment involved in determining the existence of facts, let alone matters of fact and degree, mean that the fact is not jurisdictional (at [60]). (c) The overall statutory context may be determinative as to whether or not Parliament intended the existence of the fact in question to both objectively exist and be essential, notwithstanding the existence of elements of fact and degree, or even of judgment, that was required in the process of determining whether or not the relevant fact existed (at [61]). 179 In Timbarra Protection Coalition Inc. v. Ross Mining NL (1999) 46 NSWLR 55, Spigelman, CJ. referred to the concepts of “objectivity” and “essentiality” as two inter-related elements in the determination of whether a factual reference in a statutory formulation is a jurisdictional fact. In that context, the Chief Justice stated that Parliament can make any fact a jurisdictional fact in the relevant sense, namely, that it must exist in fact (objectivity) and that the legislature intends that the absence or presence of the fact will invalidate action under the statute (essentiality). 180 The Chief Justice stated (at p.65):- “The authorities suggest that an important, and usually determinative, indication of Parliamentary intention, is whether the relevant factual reference occurs in the statutory formulation of a power to be exercised by the primary decision-maker or, in some other way, necessarily arises in the course of the consideration by that decision-maker of the exercise of such a power. Such a factual reference is unlikely to be a jurisdictional fact. The conclusion is likely to be different if the factual reference is preliminary or ancillary to the exercise of a statutory power …” 181 In that case, Spigelman, CJ. also observed that a factual reference in a statutory formulation relating to the instigation of a statutory decision-making process, is more likely, by reason of its extrinsic nature, to turn on an objective fact, than is a factual reference arising in, or in relation to, the conduct of the decision-making process itself. The contentions of the parties on the “jurisdictional fact” question 182 Mr. Temby, QC., on behalf of the Crime Commission, adverted to and relied upon the enactment of the State Act as having occurred in the wake of Ridgeway (supra) and that it was designed to facilitate the fight against crime and corruption by the statutory scheme which it establishes. 183 In his oral submissions, Mr. Temby formulated the issue arising as to whether the judgment to be made pursuant to s. 7(1)(b) of the Act is a judgment that is reserved for the chief executive officer of the agency in question, which is reviewable by this Court only on administrative law grounds (the Crime Commission’s submission) or whether it is a judgment which this Court may, in the event of challenge, make for itself on the basis of evidence, including fresh evidence, which is admitted before it. 184 Mr. Temby formulated a number of “points” enunciated by Spigelman, CJ. in Timbarra (supra) and contended that the important principle referred to by the Chief Justice in that case (at p.65, [44]) strongly militated in favour of concluding that the factual reference in s.7(1)(a) of the Act is a reference to a non-jurisdictional fact.
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nsw_caselaw:549fd5333004262463bf0c3f:2
nsw_caselaw:549fd5333004262463bf0c3f
FILE NUMBER(S) : SC No. 30048 of 2006; No. 30050 of 2006; No. 30052 of 2006; No. 30088 of 2006 Dowe: J. Stratton, SC./M. Robinson Pavan/Zaiter: M. Robinson COUNSEL : Gedeon: M. Robinson/A. Djemal Defendant: I. Temby, QC./P. Singleton Attorney-General: Dr. J. Renwick/C. Lenehan Plaintiffs: Legal Aid Commission SOLICITORS : Defendant: NSW Crime Commission Attorney-General: NSW Crime Commission IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HALL, J. TUESDAY 12 DECEMBER 2006 No. 30048 of 2006 No. 30050 of 2006 No. 30052 of 2006 No. 30088 of 2006 DAVID DARLEY DOWE v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR ROBERT PAVAN v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR GILBERT GEDEON v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR JOE ZAITER & ANOR v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR JUDGMENT 1 HIS HONOUR: The plaintiffs commenced proceedings in this Court by way of summonses filed on 11 April 2006 in which they sought to set aside or have declared void decisions of the Commissioner of the New South Wales Crime Commission (the first defendant) and seeking orders in the nature of certiorari quashing six authorities purportedly granted by the first defendant on various dates in February and March 2005 pursuant to the provisions of the Law Enforcement (Controlled Operations) Act 1997 (NSW) (the State Act). 2 Subsequently, amended summonses were filed on 19 July 2006 (Dowe), on 14 July 2006 (Pavan), on 17 July 2006 (Gedeon) and on 24 July 2006 (Zaiter). In the amended summonses the plaintiffs, inter alia, claimed a declaration in the following terms:- “1. A declaration that Parts 2 and 3 of the Law Enforcement (Controlled Operation) Act 1997 (NSW) (‘the LECO Act’) or alternatively sections 6, 13 and 16 of the LECO Act is ultra vires or invalid as being inconsistent with laws of the Commonwealth within the meaning of section 109 of the Commonwealth Constitution to the extent that the said provisions purport to authorise and/or make certain conduct ‘not unlawful’ and not ‘an offence’ which conduct would otherwise be in breach of Commonwealth laws or would constitute serious criminal offences under Commonwealth law.” 3 The four amended summonses are in identical terms, apart from references to the individual authorities in respect of controlled operations relevant to each proceedings. 4 On 21 July 2006, notices pursuant to s. 78B of the Judiciary Act 1903 (Cth) were served on behalf of the plaintiffs on the Attorneys-General for the Commonwealth, States and Territories in relation to the second defendant’s notice of motion dated 22 August 2006 seeking expedition of what was referred to as the “constitutional question” and the “jurisdictional question” raised in the proceedings on the summonses filed in this Court. 5 Copies of the six authorities were included in Exhibit B (documents numbered 8, 16, 24, 31, 39 and 47). Each Authority to Conduct a Controlled Operation is an authority purportedly granted by the first defendant as Commissioner and Chief Executive Officer of the New South Wales Crime Commission (referred to in this judgment as the “Crime Commission”). Each bore an operation number and an operation name and set out in paragraphs 1 to 5 the relevant matters required to be considered in terms of Part 2 of the State Act. The nature of the controlled activities are identified in the next paragraph. In general terms, the authorities purported to authorise “Tom” and named law enforcement officers to possess quantities of the said cocaine, to supply quantities of the cocaine to various people (alleged to have included the plaintiffs) and to deal with the money paid in exchange for the cocaine supplied.
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null
nsw_caselaw:549fd5333004262463bf0c3f:6
nsw_caselaw:549fd5333004262463bf0c3f
35 The authorities purported to authorise “Tom” and named law enforcement officers to possess quantities of the said cocaine, to supply those quantities to the persons named in the authorities, and to deal with the money paid in exchange for the cocaine supplied. The Crime Commission alleges that the cocaine was supplied in accordance with the authorities and that money was received in exchange. 36 Reproduced below are the terms of the authorities, insofar as the particular controlled activities specified are concerned:- (a) Authority (Operation No: 05/0056) granted on 8 February 2005 (i) Nature of controlled activities by law enforcement participant Possession and supply of 2 kilograms of cocaine to Informer 719. (ii) Nature of controlled activities by civilian participant Possession and supply of 2 kilograms of cocaine to Gilbert Gedeon or any agent acting on his behalf in return for payment of $340,000 cash. Hand $340,000 in cash, representing the proceeds of the sale of the cocaine, to Shane Hatfield or any agent of his. (b) Authority (Operation No: 05/10038) granted on 22 February 2005 (i) Nature of controlled activities by law enforcement participant Possess 1 kilogram of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”. (ii) Nature of controlled activities by civilian participant Possess 1 kilogram of cocaine and supply that cocaine to Robert Pavan, and/or persons acting on his behalf or at his request, at Newtown, in exchange for $160,000. Of the $160,000 received, hand $110,000 to Pavan, and the remaining $50,000 to Shayne Hatfield. (c) Authority (Operation No: 05/01068) granted on 24 February 2005 (i) Nature of controlled activities by law enforcement participant Possess 250 grams of cocaine and supply that 250 grams of cocaine to Commission informer 719, code-named “Tom”. (ii) Nature of controlled activities by registered informer 719 Possess 250 grams of cocaine and supply that 250 grams of cocaine to Steve Sevastapoulos, Mario Alexandridis and another person known only as Joe, in return for the payment of $40,000. Of the $40,000 received, hand $1,000 to Steve Sevastapoulos and hand the remaining $39,000 to Shayne Hatfield. (d) Authority (Operation No: 05/01109) granted on 28 February 2005 (i) Nature of controlled activities by law enforcement participant Possess one kilogram of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”. (ii) Nature of controlled activities by registered informer Take possession of one kilogram of cocaine and supply this cocaine to Robert Pavan and/or persons attending with him or introduced by him, in return for payment of $160,000. Retain the $160,000 received and hand it to Shayne Hatfield, at the time and place nominated by Hatfield. (e) Authority (Operation No: 05/01373) granted on 4 March 2005 (i) Nature of controlled activities by law enforcement participant Possess one kilogram of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”. (ii) Nature of controlled activities by registered informer Take possession of one kilogram of cocaine and supply this cocaine to Robert Pavan and/or persons attending with him or introduced by him, in return for payment of sum of money expected to be $170,000. Of the money received, Pavan is expected to retain $5,000 as a commission and the remainder is to be retained by Tom and handed to Shayne Hatfield, at the time and place nominated by Hatfield. (f) Authority (Operation No: 05/01792) granted on 31 March 2005
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null
nsw_caselaw:549fd5333004262463bf0c3f:19
nsw_caselaw:549fd5333004262463bf0c3f
121 The conclusions earlier expressed, namely, that on the basis of the agreed facts it has not been established, for the purposes of present proceedings, that there was a breach of s. 233B of the Customs Act authorised by authorities issued under the State Act, the plaintiffs’ contention that there has been a breach of one or other of the money laundering provisions referred to above cannot be sustained. The reasons set out earlier in relation to “direct inconsistency” accordingly are relevant to this issue and need not be repeated. The agreed facts utilised for the purposes of the present proceedings would, in my view, if ultimately accepted by a tribunal of fact, constitute the authorities as authorising New South Wales and not Commonwealth offences. 122 I should add that the plaintiffs did not identify any specific offences of which the money might have become an instrument within the meaning of the money laundering provisions. I have, accordingly, also concluded that neither the State Act nor the authorities issued pursuant to that Act were inconsistent with the abovementioned provisions of the Criminal Code concerned with dealing with money and property. (c) Indirect inconsistency 123 Many of the observations made in relation to direct inconsistency have application to the claim of indirect inconsistency between the State Act and Commonwealth law. Additionally, the Commonwealth laws that create criminal offences and that are here in question do not cover the same field as State laws. Further, as discussed below, the provisions of Part 1AB of the Crimes Act 1914 (Cth) do not, in my opinion, purport to “cover the field” with respect to controlled operations. 124 The possession and conveying of a prohibited substance such as cocaine could constitute federal and State offences under the former provisions of s.233B of the Customs Act 1901 (Cth) and as well offences under s.25 and s. 26 of the Drug Misuse and Trafficking Act 1985 (NSW) which criminalise possession and use of such drugs. The plaintiffs, in the present proceedings, as noted earlier, have been charged with offences under the last-mentioned Act. 125 In Regina v. Stevens (1991) 23 NSWLR 75, the New South Wales Court of Criminal Appeal (Lee, CJ. at CL., Carruthers and Sharpe, JJ.) held that the Customs Act 1901 (Cth), in particular, former s.233B, and the provisions of the Drug (Misuse and Trafficking) Act, s. 25 and s.26, may, in some instances, overlap and apply to the same set of circumstances. The clear purpose of s.233B was stated to be to facilitate the prohibition of the importation of narcotic goods into Australia whereas that of s. 25 and s.26 of the Drug Misuse and Trafficking Act 1985 was to control the use of prohibited drugs and plants within New South Wales irrespective of their origin. It was held there was, accordingly, no inconsistency between the enactments. (See, in particular, Lee, CJ. at CL. at 82). Section 233B at the material times in these proceedings was not materially different to the form that the section took when considered by the Court of Criminal Appeal in that case. 126 The State Act is plainly intended to facilitate the investigation of State offences, including offences under the Drug Misuse and Trafficking Act 1985 (NSW). There is no prima facie presumption that a Commonwealth statute, by making it an offence to do a particular act, evinces an intention to deal with that act to the exclusion of any other law: Regina v. Winneke ex parte Gallagher (1982) 152 CLR 211, 224 per Mason, J. (as he then was). Just as it has been established that there is no inconsistency between the Commonwealth and State law with respect to the possession of a prohibited drug such as heroin, so in my opinion, there is no inconsistency between the State Act, which facilitates the investigation of offences of possession and conveyance of cocaine and such Commonwealth law.
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null
nsw_caselaw:549fd5333004262463bf0c3f:17
nsw_caselaw:549fd5333004262463bf0c3f
The Queen [1996] 186 CLR 454 at 466 per Brennan, CJ., Toohey, McHugh, Gummow, JJ. As observed above, however, whilst s.233B(1AAB) is not strictly a “defence” , the last mentioned observations are, in my opinion, instructive in its application. 105 Before dealing with the issue of “reasonable excuse” in the context of the present proceedings, I will separately state my conclusions with respect to the issues of inconsistency. In determining those issues, it is necessary to bring to account the evident policy behind the State Act, the Ridgeway “background” to which reference has earlier been made and to the actual terms of the legislation. 106 By reference to all of these matters, I am of the opinion that, properly construed, the State Act does not purport to authorise breaches or contraventions of the Commonwealth laws as claimed by the plaintiffs. The provisions of that Act do not, by their express terms, authorise such contraventions. 107 The same conclusion, in my opinion, may also be reached by application, as necessary, of the provisions of s.31 of the Interpretation Act 1987 (NSW) which would require a “reading down” of the State Act to the extent necessary to avoid the construction contended for on behalf of the plaintiffs. 108 In the application of s.31 of the Interpretation Act 1987 to the construction of the provisions of the State Act (including, in particular, those in s.6, determination of application, and s. 16, lawfulness of controlled operations), it is necessary to identify indicia within the statute itself, the legislative purpose and the historical background to the legislation: Sportodds Systems Pty. Limited v. New South Wales (2003) 133 FCR 63. 109 I am of the opinion that the provisions of s.31 of the Interpretation Act 1987 (NSW) would require and operate such that the State Act is construed as operating to the full extent of, but so as not to exceed, the legislative power of the New South Wales Parliament. It would, of course, be beyond power for a State statute to purport to directly authorise the contravention of a Commonwealth Act or to make lawful the very thing that a Commonwealth Act stipulates as a criminal offence: see, by way of example, Love & Peters v. Attorney General (NSW) (1990) 169 CLR 307. 110 In particular, s.16 may, in accordance with the provisions of s.31 of the Interpretation Act, be construed as restricting exemption from criminal liability to that which could otherwise arise under any New South Wales Act or law. Such a construction would achieve the evident intention of Parliament in enacting the State Act, namely, the establishment of a statutory scheme that has as one of its objectives the protection of participants in an authorised controlled operation from criminal responsibility arising under State law concerning conduct undertaken in accordance with an authority granted under the State Act. 111 The subject matter of the State Act, as so understood, in my opinion, undoubtedly is one within the power of the New South Wales Parliament. It is legislation that clearly can be regarded as made for the peace, order and good government of the State. There is no difficulty in limiting it by construction so as to treat it as applying only to that part of its subject matter which is within power and with which Parliament clearly intended to deal as it could lawfully do so: Pidoto v. Victoria (1943) 68 CLR 87 at 110 per Latham, CJ. See also Sportodds Systems Pty. Limited v. New South Wales (2003) 133 FCR 63. 112 Alternatively, the provisions of s.233B(1AAB) may, depending upon the facts of a case, ensure that no conflict arises. In the present proceedings, the grounds relied upon in the amended summonses include allegations of “bad faith” and “impropriety”.
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null
nsw_caselaw:549fd5333004262463bf0c3f:10
nsw_caselaw:549fd5333004262463bf0c3f
(b) Secondly, in the alternative, the relevant provisions of the Act “alter, impair or detract from” or “qualify, impair, undermine or negate” the operation of the abovementioned Commonwealth laws within the meaning of the test set out in Victoria v. Commonwealth (1937) 58 CLR 618 at 630 per Dixon, J.; Australian Mutual Provident Society v. Goulden (1986) 160 CLR 330 at 337.5 and 339. 7; Telstra Corp. Limited v. Worthing (1999) 197 CLR 61 at 76 [27]-[28] and 78 [31]-[32] per Gleeson, CJ., Gaudron, McHugh, Gummow, Kirby, Hayne, Callinan, JJ. and Apla Limited v. Legal Services Commissioner (NSW) (2005) 79 ALJR 1620 at [41]-[43] per Gleeson, CJ. and Heydon, J., [192]-[209], per Gummow, J., [298]-[304] per Kirby, J. in dissent on application of the principles and [485] per Callinan, J. (c) Thirdly, in the alternative, Part 1AB of the Crimes Act 1914 (“Controlled operations for obtaining evidence about Commonwealth offences”) “covers the field” (notwithstanding the declaration of an “intention” in s.15GA for the concurrent operation of State and Territory laws) in relation to:- (i) “serious Commonwealth offences” ; (ii) “serious” State offences that have a federal aspect; (iii) “commonwealth offences” within the meaning of those expressions in ss.15H and 15HB and s.3AA of the Crimes Act 1914 . (d) Fourthly, in the alternative, the New South Wales Parliament does not have legislative power to make laws in respect of controlled operations that purport to make lawful that which would otherwise constitute a Commonwealth offence in the absence of a corresponding Commonwealth law that expressly permits it. (e) Fifthly, in the alternative, if the relevant provisions of the Act are not held invalid, they must be read down so as to avoid conflict with or detraction from any Commonwealth laws. The said provisions must be read as not authorising the undertaking of certain criminal conduct, which conduct would otherwise constitute a breach of Commonwealth laws or would constitute a Commonwealth offence. (b) Submissions of the New South Wales Crime Commission 64 The Crime Commission responded first, on the aspects of claimed direct and indirect inconsistency and, secondly, that even if there could be said to have been a breach of the provisions of s.233B by reason of activities carried out during the controlled operations, the “reasonable excuse” provisions (discussed below) would apply. 65 Mr. Temby, QC., for the Crime Commission, submitted that the alleged inconsistency with Commonwealth law is not such that it would be concluded that the State Act (or any provision of it) must be invalid for all circumstances. There would, he noted, be many cases in which no Commonwealth law could have a role to play. An authority granted under the State Act in such cases could only provide authorisation for a breach of New South Wales law. Any inconsistency as claimed in the present proceedings could not result in invalidity in the State Act for all purposes. It was further contended that s.109 of the Constitution does not invalidate s.13 and s.19 of the State Act to the extent that those sections remove liability under New South Wales law. 66 The Crime Commission also relied upon a submission based upon the provisions of s.233B(1AAB) which provided that s.233B(1)(a)(vi), (v) and (vi) did not apply if the person in question proved that he or she had “a reasonable excuse” for doing the act in question. The Commission contended that in the present case, all relevant persons had a reasonable excuse for all of their actions regarding the cocaine from the time that it was dug up until the various times that it was supplied. This was said to have consisted of the execution of a policing operation calculated to gather evidence of serious offences. The existence of the authorities enhanced the excuse, but it was contended the authorities were not necessary for the excuse to be valid: Medina (1995) 84 A. Crim. R. 316.
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null
nsw_caselaw:549fd5333004262463bf0c3f:5
nsw_caselaw:549fd5333004262463bf0c3f
A person code named “Tom” had the primary role of selling the cocaine and he took possession of it. Some time after 8 October 2004, “Tom” buried the cocaine in bushland near Wahroonga. Later, he sold three kilograms of the cocaine and re-buried seven kilograms of it. 24 In consequence of information provided to the Crime Commission by “Tom”, he, on 14 December 2004, was registered as a Commission informer. A joint taskforce of New South Wales Police, Australian Federal Police was then established and the Crime Commission investigated the information provided by “Tom” and sought to obtain evidence regarding offences against Commonwealth and State law. 25 On 2 February 2005, a meeting was held between officers of New South Wales Police and the Crime Commission to discuss the potential sale of up to seven kilograms of the cocaine through the informer “Tom”. It is a fact of some significance that this occurred in a context in which “Tom” had earlier advised the Commission of two planned importations of significant quantities of cocaine proposed for February 2005. 26 At the meeting on 2 February 2005, the Assistant Director of the Commission gave a briefing. No Australian Federal Police were present on that occasion. In order to advance the investigation and, in order to maintain “Tom’s” credibility with a particular person and with other subjects of the investigation, the meeting approved in principle the supply of up to seven kilograms of cocaine in circumstances in which it was unlikely that the cocaine would be recovered by law enforcement officers. 27 The Statement of agreed facts set out the circumstances in which the six authorities were purportedly granted pursuant to s.6 of the Act by the first defendant for the conduct of six controlled operations. The authorities were granted on 8 February 2005, on 22 February 2005, 24 February 2005, 25 February 2005, 4 March 2005 and 17 March 2005. 28 The statement of agreed facts also established that late on 6 February 2005, “Tom” was allegedly instructed by a person who was suspected of being both the importer and distributor of the cocaine to retrieve and supply two kilograms of it to a named person. On 7 February 2005, the joint taskforce officers from the Crime Commission, New South Wales Police and Australian Federal Police went with “Tom” to the bushland near Wahroonga and retrieved seven kilograms of cocaine. It was sealed in several Australian Federal Police evidence bags and taken to the National Measurement Laboratory at Pymble apparently for weighing and testing for analysis. 29 On that date and some days later, all of the cocaine was delivered to the Assistant Director of the Crime Commission who placed it in a safe. 30 The agreed statement also sets out the facts concerning supply of cocaine to “Tom” for the purposes of enabling him to supply it to others and the facts concerning transactions involving such supply. The statement also records the facts concerning money received by “Tom” in exchange for the cocaine. 31 Each of the first, second, third, fifth and sixth authorities purported to permit, according to their respective terms:- (a) One or more specified “law enforcement officers” (within the meaning of the Act) to possess and supply stated quantities of cocaine. (b) An “authorised civilian participant” (within the meaning of the Act) identified in the Authorities to possess and supply stated quantities of cocaine. 32 The details of the activities authorities are set out in paragraph [36]. The first authority related to the supply of the two kilograms of cocaine. 33 Each of the authorities listed the Assistant Director of the Commission as a law enforcement officer. 34 The first defendant, in each authority, identified by name the relevant law enforcement officer to conduct the controlled operation and the identity of the civilian participant by reference to an informer number. An authority was purportedly granted in each case for such persons to engage in the controlled activities specified in a table set out in paragraph 6.
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null
nsw_caselaw:549fd5333004262463bf0c3f:33
nsw_caselaw:549fd5333004262463bf0c3f
201 It has been observed that, on the basis of the particular provisions of s.7(1)(a), evidence of a particular target’s criminal predisposition would be relevant: Controlled Operations, Controlled Activities and Entrapment by Professor Eric Colvin (2002) 14 Bond LR 227 at 238 (footnote 54). That, of course, must, with respect, be correct. Accordingly, an assessment under s.7(1)(a), requires a chief executive to evaluate, as earlier discussed, known facts about the “person”, the target of the proposed operation. 202 In the light of the evaluation made, an appropriate judgment must then be formed. In terms of s.7(1)(a), the relevant matters would include those concerning the issues of intent and predisposition of the target(s). As part of a predisposition based analysis, the chief executive would need to consider any information that indicated that the target(s) already possessed the intent to commit a crime of the same or similar kind to the criminal activity proposed for a proposed controlled operation or that the target(s) was/were already presently disposed to commit such a crime should the opportunity arise. (b) The matter arising under s.7(1)(b) – conduct likely to seriously endanger health and safety 203 Mr. Stratton, in his oral submissions, referred to “features” of s.7(1)(b) which contrasted with aspects of s.6, emphasising that s.7(1)(b), unlike s.6, is not framed in terms of the chief executive officer being “satisfied” and that the former is framed in terms of absolute prohibition. Mr. Stratton suggested in this respect a parallel between the provisions of s.7 of the State Act and s.35(3) of the Development Act 1993 (SA) which was the subject of decision in Enfield (supra). He observed that s.35(3) was not framed in terms of a person’s satisfaction or belief and it also was expressed in terms of an absolute prohibition. 204 Mr. Stratton, contended between the provisions of s.7(1)(b) and the provisions of s.6(3) (which does refer to the satisfaction of the chief executive officer), must be taken as an indication that the legislature intended the difference in order to make it clear that there was a prohibition on the matters proscribed by s.7(1)(b). 205 It was also submitted on behalf of the plaintiffs that the matters to which s.7(1)(b) are directed are “extrinsic” matters, that is, not one of the matters to be considered in the “weighing up process”. He contended that it comes into operation “… before we get to the weighing up process because it is an absolute prohibition”. 206 He also contended that the structure of the Act favours the contention that s.7(1)(b) is directed to a jurisdictional fact. The relevant “dichotomy”, he contended, was not between s.5 and s.7, but between s.6 and s.7. 207 Mr. Stratton referred to the joint judgment in Enfield (supra) at [32], [33] and [34], it being contended that the observations in those paragraphs were supportive of the plaintiffs’ argument in relation to the jurisdictional fact question. The judgment in that case, it was contended, supported the submission that s.7(1)(b) related to a jurisdictional fact. 208 Mr. Stratton also relied upon the matters and the approach taken to them in Pallas Newco (supra). There, the provisions of s.76B of the Environmental Planning and Assessment Act 1979 (NSW) employed the terminology of “prohibition”. Particular reliance was placed upon the observations of Spigelman, CJ. at [32] and [44]. Reference was also made to the judgment of Handley, JA. in The Warehouse Group (Australia) Pty. Limited v. Woolworths Limited [2005] NSWCA 269, with the observation that clause 51 of the Local Environmental Plan there in question imposed a restriction on the granting of consent but in terms that were not as strongly worded as the terms of s.7(1)(b) of the State Act.
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null
nsw_caselaw:549fd5333004262463bf0c3f:23
nsw_caselaw:549fd5333004262463bf0c3f
This was argued on the basis that the proposed operations involved a civilian participant in the controlled operations engaging in conduct that was likely to seriously endanger the health or safety of another person or persons, namely, members of the public that were to purchase or were to be given the subject cocaine for personal use or consumption. 144 The “jurisdictional fact” question was therefore advanced as a threshold question to be separately determined. 145 In terms of jurisdiction, it was contended on behalf of the plaintiffs, that it cannot be doubted that the Court’s judicial review or, supervisory jurisdiction pursuant to ss. 65 and 69 of the Supreme Court Act 1970, has been properly invoked in the proceedings. Additionally, declaratory relief has been sought. It was contended that the Court should be permitted to exercise that supervisory and general law jurisdiction. 146 Section 7(1)(b) of the State Act is said to be properly characterised as a statutory prohibition on the “chief executive officer” (as defined in s.3 of the Act) lawfully granting an authority pursuant to a s.5 application to conduct a controlled operation. 147 In these proceedings, it was contended that s.7(1)(b) commands that a controlled operation must not be granted in relation to a proposed operation that involves any participant in the operation engaging in conduct that is likely to seriously endanger the health or safety of that or any other participant, or any other person. This was said to be a “jurisdictional fact”. The structure of the State Act 148 The provisions of Part 2, Authorisation of Controlled Operations, prescribe the procedure to be applied and followed for applications for authorities to conduct controlled operations on behalf of a law enforcement agency. That Part also contains provisions concerning the matters governing the determination of such applications as well as the restrictions or prohibitions on the conduct to which an authority relates (s.7). It is necessary to construe the provisions of s.7(1)(a) and (b) but this should be done, with due regard to the provisions of the Act as a whole, including, in particular, those in Part 2. 149 Section 5(1) of the State Act provides that a law enforcement officer for a law enforcement agency may apply to the chief executive officer of the agency for an authority to conduct a controlled operation on behalf of the agency. The application must provide particulars in relation to matters referred to in s.5(2)A. Section 6 and s.7 are key provisions and, accordingly, are reproduced in full:- “(6) Determination of applications (1) After considering an application for authority to conduct a controlled operation, and any additional information furnished under section 5 (3), the chief executive officer:- (a) may authorise a law enforcement officer for the law enforcement agency concerned to conduct the operation, either unconditionally or subject to conditions, or (b) may refuse the application. (2) An authority to conduct a controlled operation on behalf of a law enforcement agency may not be granted unless a code of conduct is prescribed by the regulations in relation to that agency. (3) An authority to conduct a controlled operation may not be granted unless the chief executive officer is satisfied as to the following matters:- (a) that there are reasonable grounds to suspect that criminal activity or corrupt conduct has been, is being or is about to be conducted in relation to matters within the administrative responsibility of the agency, (b) that the nature and extent of the suspected criminal activity or corrupt conduct are such as to justify the conduct of a controlled operation, (c) that the nature and extent of the proposed controlled activities are appropriate to the suspected criminal activity or corrupt conduct,
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0.019486160948872566 ]
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nsw_caselaw:549fd5333004262463bf0c3f:32
nsw_caselaw:549fd5333004262463bf0c3f
193 The power in a law enforcement officer for a law enforcement agency to grant an authority to conduct a controlled operation is to be found in s.6 and not s.7 of the Act. On the making of an application under s. 5(1) (which application must conform to that section and provide the particulars specified including a plan of the proposed operation etc.) the chief executive officer of the agency in question may then proceed to undertake a “determination” of that application. The matters fundamental to such a determination are those earlier discussed – the need for reasonable grounds to suspect, justification for a controlled operation having regard to the nature and extent of the suspected criminal activity or corrupt conduct, the appropriateness of the proposed controlled activities to the suspected criminal activity or corrupt conduct and the capacity for reporting so that the requirements of the Act may be fulfilled. 194 All of these matters require consideration and determination before a chief executive officer can be “satisfied” as to each matter. In many, if not most cases, it is only by undertaking an inquiry of those matters that the issues in s.7(1)(a) and (b) will then, in light of such inquiry and not divorced from it, be capable of assessment. 195 An analysis of the decision-making process in relation to both s.7(1)(a) and (b) warrant close examination. That process requires an exercise of judgment built upon an analysis of material facts. The question ultimately to be resolved is whether s. 7(1) is directed to matters that must objectively exist before the statutory power may be exercised or whether the legislature intended that s.7(1) matters were for the chief executive, as the relevant authority, to determine as a matter of opinion. (a) The matter arising under s.7(1)(a) – entrapment 196 Section 7(1)(a), generally speaking, is directed to preventing what is commonly referred to as “entrapment”, a term, Gaudron, J. in Ridgeway (supra) noted, is not a term of art nor one with any precise meaning (at p.70). Her Honour also observed that the critical consideration in characterising police conduct as “entrapment” was whether an offence was in fact the result of the criminal acts of law enforcement agents or of those acting on their behalf (at p.77). 197 In Regina v. Sloane (1990) 49 A. Crim. R. 270 at 272, Gleeson, CJ., in a passage cited by Brennan, J. in Ridgeway (supra) at 49-50 stated:- “The concept of entrapment involves as a necessary element the idea that an accused person has been induced to commit a crime which he or she otherwise would not have committed or would have been unlikely to commit …” 198 In contrast, Gaudron, J. observed that in cases of “mere opportunity”, the accused person is fairly regarded as wholly responsible for his own actions (Ridgeway (supra) at 77). Cases that went beyond the provision of mere opportunity involved state-manufactured crime:- “There is a crucial distinction, one which is not easy to draw … between the police or their agents – acting on reasonable suspicion or in the course of a bona fide enquiry – providing an opportunity to a person to commit a crime and the State actually creating a crime for the purpose of prosecution. The former is completely acceptable …” ( Regina v. Mack at 917) 199 The principle underlying s.7(1)(a) is not difficult to identify. Police conduct which brings about what has been referred to as state-created crime is unacceptable and improper. To prosecute in such circumstances would be an affront to the public conscience: Regina v. Latif [1994] 1 WLR 104, 112 per Lord Steyn referred to by Lord Nicholls of Birkenhead in Regina v. Looseley [2001] 1 WLR 2060, 2068. 200 Accordingly, s.7(1)(a) requires that there be an assessment, inter alia, as to whether the person or persons who is/are to be the target(s) of a proposed controlled operation, is/are a person(s) reasonably suspected of being ready to engage in a particular form of criminal activity.
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null
nsw_caselaw:549fd5333004262463bf0c3f:22
nsw_caselaw:549fd5333004262463bf0c3f
138 The agreed facts in the present proceedings, it was said, involved controlled operations involving “Tom” selling in large quantities cocaine to seek to have his standing in the alleged criminal community established or improved, but that was not a purpose but was a lawful purpose under the Commonwealth controlled operation provisions. Additionally, the operations in question could not have been issued under the Commonwealth scheme in circumstances in which it was envisaged that the cocaine supplied would not be recovered at the end of the operations. 139 In summary, Mr. Robinson contended that the provisions of s.15I in Part 1AB which apply to a Commonwealth offence or an offence against the law of a State or Territory are extremely broad. He also emphasised the onerous reporting conditions under the federal scheme for controlled operations, emphasising that these aspects were distinctive and significant matters in the “covering the field” argument. I do not, with respect, consider that the more stringent conditions in Part 1AB of themselves in context of the other provisions of the Crimes Act 1914 (Cth) provide support for the contention that the federal Parliament thereby has evinced an intention to provide exhaustively for the authorisation of controlled operations. 140 As to the “constitutional question”, I have, accordingly, concluded:- (a) Section 16 of the State Act is directed to providing a statutory exemption from criminal liability that would otherwise arise under State law to participants authorised to undertake controlled activities under an authority granted under the State Act. (b) The terms of the State Act do not directly or expressly purport to make lawful contraventions of Commonwealth law. (c) The terms of s.16 of the State Act must be construed as operating to the full extent of, but not to exceed the legislative power, of the State Parliament: s.31 Interpretation Act 1987 (NSW) . Section 31, accordingly, ensures that s. 16 of the State Act is to be construed and restricted to apply to State law. As the State Act does not purport to nor has the effect of authorising breaches of Commonwealth law it does not purport to operate to remove liability under Commonwealth law. Accordingly, there is no inconsistency. (d) Insofar as the above stated position in (a), (b) and (c) were held not to be so, I am of the opinion that, an authority duly granted under the State Act for controlled operation activities undertaken in accordance with such an authority, is capable of being or constituting a “reasonable excuse” within former s. 233B(1AAB) of the Customs Act . Whether an authority and activities purportedly carried out in accordance with that authority do constitute a reasonable excuse in a particular case will fall to be determined on the facts of that case. (2) THE “JURISDICTIONAL FACT” QUESTION 141 The second question for separate determination is set out in paragraph [11] above. 142 The relevant statutory provision arising in respect of the “jurisdictional fact” question is s.7(1)(b) of the State Act. The plaintiffs stated that they will contend at the final hearing together and, in the alternative, that:- (a) section 7(1)(b) is a jurisdictional fact and the Court must determine the factual question for itself on the evidence adduced before it; and (b) in any event, the decision made by the first defendant Commissioner was not reasonably open to him on administrative law grounds. 143 The plaintiffs, in particular, contended in their respective summonses, that the relevant authorisations, each of which involved the sale of cocaine to the plaintiffs, was in excess of the powers of the first defendant to authorise pursuant to the State Act or, at all, as they were said to be issued in breach of the prohibition contained in s.7(1)(b).
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null
nsw_caselaw:549fd5333004262463bf0c3f:24
nsw_caselaw:549fd5333004262463bf0c3f
(d) that the proposed controlled activities will be capable of being accounted for in sufficient detail to enable the reporting requirements of this Act to be fully complied with. (4) In considering the matters referred to in subsection (3), the chief executive officer must have regard to the following:- (a) the reliability of any information as to the nature and extent of the suspected criminal activity or corrupt conduct, (b) the likelihood of success of the proposed controlled operation compared with the likelihood of success of any other law enforcement operation that it would be reasonably practicable to conduct for the same purposes, (c) the duration of the proposed controlled operation. (5) The chief executive officer must keep a written record of the reasons for which the chief executive officer is satisfied as to the matters referred to in subsection (3) (a). (7) Certain matters not to be authorised (1) An authority to conduct a controlled operation must not be granted in relation to a proposed operation that involves any participant in the operation:- (a) inducing or encouraging another person to engage in criminal activity or corrupt conduct of a kind that the other person could not reasonably be expected to engage in unless so induced or encouraged, or (b) engaging in conduct that is likely to seriously endanger the health or safety of that or any other participant, or any other person, or to result in serious loss or damage to property. (2) A person must not be authorised to participate in a controlled operation unless the chief executive officer is satisfied that the person has the appropriate skills to participate in the operation. (3) A civilian participant:- (a) must not be authorised to participate in any aspect of a controlled operation unless the chief executive officer is satisfied that it is wholly impracticable for a law enforcement participant to participate in that aspect of the operation, and (b) must not be authorised to engage in a controlled activity unless it is wholly impracticable for the civilian participant to participate in the aspect of the controlled operation referred to in paragraph (a) without engaging in that activity.” 150 Parts 2, 3 and 4 of the State Act are directed to the three objectives of the legislation – the authorisation of controlled operations (Part 2), the conduct of controlled operations (Part 3) and monitoring of controlled operations (Part 4). 151 The stated purposes of the State Act are to be found, not in any of these parts of the legislation but in the definition of “controlled operation”. That expression is defined in s.3 as meaning an operation which is conducted for the purpose of:- (a) obtaining evidence of criminal activity or corrupt conduct; or (b) arresting any person involved in criminal activity or corrupt conduct; or (c) frustrating criminal activity or corrupt conduct; or (d) carrying out an activity that is reasonably necessary to facilitate the achievement of any purpose referred to in paragraph (a), (b) or (c); being an operation that involves, or may involve, a controlled activity. 152 The expression “controlled activities” is defined in s.3 as meaning “… an activity that, but for s.16, would be unlawful”. 153 As to the provisions of Part 2 of the State Act concerned with the authorisation of controlled operations, it is necessary to examine in some detail the provisions of ss.5, 6 and 7. 154 The legislature has determined that applications for authorities under the Act are to be determined by “the chief executive officer of the agency”. “Chief executive officer” is defined in s.3 as meaning a person for the time being holding office or acting as:-
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null
nsw_caselaw:549fd5333004262463bf0c3f:34
nsw_caselaw:549fd5333004262463bf0c3f
In paragraph [6] of his Honour’s judgment, Handley, JA. referred to clause 51 as one which “imposes a condition precedent to the existence of the Council’s power to grant consent to a relevant development application and compliance with this condition is a jurisdictional fact …”. 209 Section 7(1)(b), plainly, requires an assessment be made as to the likelihood or otherwise of serious danger to the health or safety of participants by examining the nature of the proposed controlled activities and other matters that form part of the plan of the proposed operation. These are all matters in which information, expertise and judgment combine for the purposes of making a prospective assessment. Of their nature, issues of risk to matters of health and safety often can only be properly assessed once the matters referred to in s.6(3)(a), (b), (c) and (d) have been fully assessed. In this way, and for this reason, the s.7(1) “matters” can hardly be regarded as extrinsic to or ancillary to the inquiry to be undertaken as part of the assessment process. 210 In terms of the dichotomy identified by the Privy Council in Colonial Bank of Australasia v. Willan (supra), the matters arising under s.7(1)(b) should not, in my opinion, be considered to be matters that are “essential preliminary to the decision-making process” but rather as facts “… to be adjudicated upon in the course of the inquiry”. The fact that such matters are not of an extrinsic or ancillary or preliminary nature, makes it less likely that those facts are jurisdictional in nature: see Pallas Newco (supra) at [48], [49] and [50]. 211 A degree of flexibility accorded by a particular statute to the relevant factual reference may be taken as an indicator against the relevant facts being regarded as jurisdictional. Retrospective authority may be granted for conduct as referred to in s.14 of the State Act. Such conduct, in a life-threatening situation, may, contrary to s. 7(1)(b), seriously endanger a person but be considered by the chief executive of the relevant agency, acting on an application under s.14, to fall within the circumstances in s.14(5) – that is, as conduct engaged in for the purpose of protecting a participant or any other person. 212 However, I do not consider that the issue of inconvenience greatly assists in the resolution of the question as to whether s.7(1)(b) relates to a jurisdictional or non-jurisdictional fact. That is a matter better determined upon the factors referred to in the discussion in this judgment. 213 Mr. Temby relied upon principles whereby questions of inconvenience may be relevant to statutory construction. In this respect he cited the dicta of Spigelman, CJ. in Timbarra (supra) at 72 wherein the Chief Justice stated:- “Another factor, relevant to determining the intention of parliament, is the inconvenience that may arise from classifying a factual reference in a statutory formulation as a jurisdictional fact. Statutes are construed on the basis that parliament did not intend to cause inconvenience, although it can do so, and often has. Was it the intention of parliament to validate a development application which was not accompanied by a species impact statement when, on an objective test, it should have been?” 214 Reliance was also placed upon the Warehouse Group (Australia) Pty. Limited v. Woolworths Limited & Anor [2005] NSWCA 269 wherein Basten, JA. at [134] referred to the same principle in the context of dicta of Dixon, J. in Parisienne Basket Shoes Pty. Limited v. Whyte (1938) 59 CLR 369 at 391, albeit in relation to the determination of a fact by an inferior Court. Basten, JA. observed that no doubt the strong presumption referred to in that case is significantly diminished in relation to administrative tribunals. 215 Emphasis was also placed in Mr. Temby’s submissions on the question of context. In the context of town planning legislation, matters are commonly done on notice with requirements as to advertising or dissemination of information.
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null
nsw_caselaw:549fd5333004262463bf0c3f:12
nsw_caselaw:549fd5333004262463bf0c3f
72 The enactment of legislation for controlled operations at the Federal level and, in some States (New South Wales, Queensland and South Australia) occurred as a direct response to the High Court’s decision in Ridgeway v. The Queen (1995) 184 CLR 19. Part 1AB of the Crimes Act 1914 (Cth), “Controlled Operations for Obtaining Evidence about certain offences relating to Narcotic Goods” was inserted by Act No. 28 of 1996 and commenced on 8 July 1996. 73 In Ridgeway (supra), Mason, CJ., Deane and Dawson, JJ. at 43-44, observed:- “… if it be desired that those responsible for the investigation of crime should be freed from the restraints of some provisions of the criminal law, a legislative regime should be introduced exempting them from those requirements. In the absence of such a legislative regime, the courts have no choice but to set their face firmly against grave criminality on the part of anyone, regardless of whether he or she be a government officer or ordinary citizen. To do otherwise would be to undermine the rule of law itself.” 74 The provisions of Part 1AB (and the same observation may be made in relation to comparable State legislation) have a circumscribed field of operation. They do not prohibit law enforcement officers or agencies (or other participants) from engaging in undercover operations unless an approval under the provisions of Part 1AB is first obtained. See, in this respect, Regina v. Giaccio [1997] SASC 6103 (29 April 1997 at [49]). They are directed, inter alia, to establishing a legislative base for authorisations to be given to controlled operations (see discussion below). (i) Part 1AB – Controlled operations for obtaining evidence about Commonwealth offences 75 In general terms, Part 1AB of the Crimes Act 1914 (Cth) establishes a scheme for the authorisation of law enforcement officers and, in some instances, civilian participants to engage in what otherwise would be unlawful conduct undertaken during the course of the investigation of serious offences. As the title to Part 1AB indicates, the scheme is directed to obtaining evidence in relation to Commonwealth offences. The provisions of s.15G state that the objects of Part 1AB are to exempt from criminal liability and to indemnify from civil liability law enforcement officers and certain other specified persons who, in the course of a controlled operation, take an active part, or are otherwise involved, in the commission of a Commonwealth offence or an offence against a law of a State or Territory: s.15G(1). 76 There are a number of similarities between the provisions of Part 1AB and those in the State Act, although there are also some significant points of distinction. Mr. Temby, QC. acknowledged that the federal scheme is somewhat more stringent one than that established under the State Act. He contended, however, that that does not carry any consequence so far as the question of inconsistency is concerned. I agree. 77 The submission made on behalf of the Crime Commission was that the provisions of Part 1AB and those in the State Act were so drafted as to be complementary – and not to conflict with one another. This position, as discussed below, is reinforced by reason of the provisions of s.31 of the Interpretation Act 1987 (NSW). 78 Given that Part 1AB envisages that the laws of a State or Territory should operate concurrently, unless any such laws are directly inconsistent with that Part, there is, at least prima facie, difficulty in accepting a contention that Part 1AB was intended as a complete statement of the law governing the establishment and conduct of controlled operations for law enforcement purposes. 79 Just as a Commonwealth statute may evince an intention to make exhaustive and exclusive provision on a subject, so a Commonwealth law may also provide that it is not intended to make such exhaustive or exclusive provision with respect to the subject with which it deals. In the latter case, Commonwealth law permits State laws that are not inconsistent with Commonwealth law to operate.
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0.010412312112748623 ]
null
nsw_caselaw:549fd55a3004262463bf14df:75
nsw_caselaw:549fd55a3004262463bf14df
His Honour ruled that the transcripts were not admissible in the trial of the Accused, applying the relevance test in s.55 Evidence Act 1995. His Honour did not determine that there was an absence of collusion between the Accused, Mr Panos and Mr Strong for the purpose of devising answers to questions to be asked of them by police. The transcripts tend to support that description. 294 I was further informed by the Crown that Mr Panos and Mr Strong did not respond to written requests that they attend for a conference with the Crown representatives. In these circumstances, the Crown concluded that they would not be called in the Crown case at trial. This was the approach foreshadowed in February 2005 to Sully J. 295 The Crown submitted that the question whether Mr Panos and Mr Strong ought be called in the Crown case involved the exercise of prosecutorial discretion. In accordance with the procedures proposed in R v Kneebone at 460-461 [49]-[52], 462 [60]-[61], the Crown had invited these two persons to attend for a conference to allow an assessment to be made of their veracity and independence. Both persons declined to attend such a conference. Having regard to the information available to the Crown concerning their collusion with the Accused during the investigation, it was determined that they not be called in the Crown case. 296 The Crown submits that it was open to the Accused to call Mr Panos and Mr Strong in his case. Both persons are solicitors and, the Crown submitted, would no doubt be capable of giving coherent evidence in chief so that there was no prejudice by reason of the Accused not being able to cross-examine them. It may be taken, the Crown submitted, that Mr Panos and Mr Strong were articulate and intelligent persons. In these circumstances, there was no unfairness to the Accused. 297 The Crown submits that, apart from Mr Panos and Mr Strong, the defence during the course of submissions produced a list of names of almost every officer who had dealt with the Accused when he was in the ATO but was not called as a witness. No prior request had been made that these witnesses be called. 298 Sully J gave the jury written directions with respect to the absence of evidence from Messrs Panos, Strong, McLaren and Gray (MFI 105, Document 3, page 4). His Honour directed the jury that they must not speculate about why any of these persons was not called as a witness. His Honour repeated this direction in the summing up (SU46-47). His Honour declined to give a direction to the jury in terms of the rule in Jones v Dunkel (1959) 101 CLR 298. 299 In Dyers v The Queen (2002) 210 CLR 285, Gaudron and Hayne JJ said at 291 [6]: “Further, as a general rule, a trial judge should not direct the jury in a criminal trial that the prosecution would be expected to have called persons to give evidence other than those it did call as witnesses. It follows that, as a general rule, the judge should not direct the jury that they are entitled to infer that the evidence of those who were not called would not have assisted the prosecution. A direction not to speculate about what the person might have said should be given. Again, exceptions to these general rules will be rare and will arise only in cases where it is shown that the prosecution's failure to call the person in question was in breach of the prosecution's duty to call all material witnesses.” 300 I am not satisfied that the Crown’s failure to call Mr Panos and Mr Strong constituted a breach of the prosecutor’s duty to call all material witnesses. The Crown sought to confer with these witnesses in accordance with the practice referred to in R v Kneebone. It may readily be inferred that Mr Panos and Mr Strong were unwilling to attend a conference with the Crown representatives. Their telephone conversations with the Accused in October 1999 were such as to support a view that they were not at arm’s length from the Accused.
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What is the general rule regarding directions to the jury in a criminal trial about the prosecution's failure to call certain witnesses?
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nsw_caselaw:549fd55a3004262463bf14df:36
nsw_caselaw:549fd55a3004262463bf14df
134 Against this background of extensive appellate consideration of the way in which the Crown may seek to establish the element of deprivation in the first count, the trial proceeded before Sully J and a jury. In broad terms, the Crown relied principally upon documents summarised in the judgment of Mason P in the Court of Criminal Appeal. No expert evidence was adduced by the Crown in the manner identified, as a possible approach, in the judgments of the Court of Criminal Appeal. A number of senior ATO officers with considerable experience in the field were called as Crown witnesses for various purposes. The Crown did not seek to adduce expert evidence from any of these witnesses on the arguable case issue. 135 A number of the ATO officers called by the Crown were cross-examined on behalf of the Accused with respect to issues which may bear upon the deprivation element. For example, Mr Lowman Chow, the author of several memoranda written in 1998, was cross-examined with the view to demonstrating that he had limited knowledge in the field and that he relied upon a number of sources in preparing his papers which he appears to have misunderstood and misquoted. This cross-examination, to which I was taken during submissions on the present application, was said by the Accused to undermine, if not destroy, any objective foundation for a suggested arguable case which the Commissioner of Taxation may have had. 136 Mr Clelland SC submitted, in summary, before me that the jury was not informed of the objective state of the law and that, accordingly, they were not in a position to assess the strength or otherwise of the arguable case which the Crown submitted existed in this case and of which it had been deprived. According to the defence submission, all the jury was left with was a series of ATO documents (some of which were written by the Accused) containing arguments which could not be assessed in any meaningful way by the jury. 137 I was informed that there was no mention in the presence of the jury of the line of authority commencing with Essenbourne in the Federal Court of Australia. The relevance or otherwise of Essenbourne was touched upon during submissions made in the absence of the jury. At one point, Mr Clelland SC foreshadowed an intention to cross-examine Mr Chow by reference to the decision in Essenbourne, but the topic was placed to one side (T577). The Crown closed its case without any reference to Essenbourne or any agreement as to the way in which any statements or principles emerging from Essenbourne might be placed before the jury. Sully J’s Judgment of 27 June 2005 138 At the close of the Crown case, the Accused sought a directed verdict of acquittal on the first count. On 27 June 2005, Sully J refused the application. With respect to the element of deprivation, Sully J said at 19.5: “The decision of the Court of Criminal Appeal essays authoritative guidance as to the principles underpinning this element of the current charge. Insofar as the essential reasoning of the Court is clear, then that reasoning is now binding upon me. From that point of departure, it is convenient to note particulars N(iv) and N(v) in the Crown case statement. Those particulars are: ‘(iv) In each case, the revenue of the Commonwealth was at risk because of the prejudice to the right or advantage of the Commissioner of Taxation to otherwise act without restriction to assess and recover any tax payable. (v) The PBRs [private binding rulings] and AOs [advance opinions] issued at the direction of Petroulias were arguably wrong.’ It was submitted for the accused, as I followed the submission, that those two particulars require that the Crown prove, first, a ‘lost opportunity’ case in order to make good the particular N(iv) thought and, secondly, an additional ‘arguably wrong’ element in order to make good the particular N(v). I do not agree.
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What did Sully J decide with respect to the element of deprivation in the first count on 27 June 2005?
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nsw_caselaw:549fd55a3004262463bf14df:35
nsw_caselaw:549fd55a3004262463bf14df
Some cases apply settled law, some others settle the law, others unsettle the law. In the present case the critical point of time is when the rulings were issued, because they are the events said to have put revenue at risk. It also needs to be borne constantly in mind that the relevant imperilment under the present formulation of the count is the prejudice to the capacity of the ATO to act contrary to the position of the rulings against ‘Rulees’ who received the favourable rulings. That prejudice stemmed from the law and practice touching private rulings. It existed unless the rulings were incontrovertibly correct when given. I have come down on the legal side of the fence in the sense that I consider it to be a matter for the trial judge to make up his or her mind on the legal issue as I have sought to explain it. But the legal issue is a very narrow one: there are critical and associated factual issues that must be left to the jury, along with the ultimate issue of finding the matters averred in the count beyond reasonable doubt. This does not mean that the judge can necessarily avoid explaining to the jury the legal issues canvassed in the ATO emails, especially the Chow opinion. An understanding of these matters may be important in evaluating the respondent’s role in procuring the rulings as well as assessing the separate dishonesty factor. This will not however entail asking the jury to form their own view about the correspondence between the rulings and the true tax position at the time.” 132 At 694 [140], Mason P adverted to the decisions of the Federal Court of Australia in Essenbourne, Walstern, Spotlight Stores and Pridecraft and observed: “It may be going too far to say that these cases show that the position advanced by the ATO to the Federal Court in those cases was ‘arguable’, whether or not it was accepted. But it would be fallacious to infer that an ATO-adverse decision in the Court established that the propositions there advanced by the Commissioner were untenable and unarguable then or at an earlier point of time.” 133 After citing portions of the judgment of the Court of Appeal, Mason P continued at 696-697 [146]-[149]: “This extract from Petroulias (No 2) established that: 1. Essenbourne does not preclude the Crown in limine from proving that the respondent’s private rulings put the revenue at risk; and 2. Factual issues needing to be explored at trial may distinguish the scheme considered in Essenbourne and the schemes covered by the respondent’s private rulings. The appellant submits that the Court of Appeal concluded that Essenbourne ‘established that the issues were arguable and that the primary judge was in error in reaching a different conclusion’. In my opinion, this misstates the reasoning of the Court of Appeal in Petroulias (No 1) and Petroulias (No 2) . In Petroulias (No 2) the Chief Justice said that Essenbourne did not justify the conclusion that the Commissioner had lost the deductibility issue (see at [34]-[47]). But this did not entail the contrary conclusion that Essenbourne overtook the evidence at committal, removed the need to consider the impact of that evidence or prevented the trial judge from considering ‘arguability’ at an earlier point of time. This becomes crystal clear in pars [49] and [67] of Petroulias (No 2) . It is true that Essenbourne was not the knock-out blow that Simpson J had perceived. But it is equally true that the Court of Appeal was flagging that the Crown had to lay the groundwork at committal to show that the rulings had the requisite character as regards either or both of the deductibility or FBT arms. I would therefore reject the Crown submission that Sully J erred in failing to treat Essenbourne as ‘relevant and sufficient [evidence] ’ to warrant the accused being put on his trial (Crown Outline at par 8).” The Trial Proceeds
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What did the Court of Appeal decide in Petroulias (No 2) regarding the impact of Essenbourne on the deductibility issue?
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nsw_caselaw:549fd55a3004262463bf14df:61
nsw_caselaw:549fd55a3004262463bf14df
The Crown case, as I understand it, rests upon five bases: first, the direct evidence of Mr Morgan; second, the direct evidence of Mr Aivaliotes; thirdly, the direct evidence of each of Messrs Chow, Targett and Charles as to the issue by them of the advance opinions which are numbered 1, 2 and 3 in exhibit C94; fourthly, things said by the accused himself in intercepted telephone conversations and in conversations with the arresting police; and, fifthly, a circumstantial case constituted by a number of individual facts and circumstances. ” 203 Mr Clelland SC submitted that his Honour should have directed the jury, on the causation issue, to confine their attention to the evidence of the four ATO officers. I do not accept this submission. It involves an artificial limitation upon the approach to evidence which is capable of bearing upon the element of causation. 204 Sully J proceeded to remind the jury of features of the evidence relating to the five bases upon which the Crown relied with respect to causation. Reference was made to the evidence of Mr Morgan (SU80ff) and Mr Aivaliotes (SU98ff). Reference was then made to the evidence of Mr Chow (SU113ff), Mr Targett (SU122ff) and Mr Charles (SU125ff). Reference was made to evidence concerning things said by the Accused in intercepted telephone conversations and in conversations with the arresting police (SU129ff). His Honour then moved to the fifth basis relied upon by the Crown on causation being a circumstantial case constituted by some 12 individual facts and circumstances (SU133ff). His Honour reminded the jury of the way in which the Crown relied upon this material (SU133.8): “I think a fairer way of putting this collection of material would be this: that you should understand that the Crown asks you to look at it as a circumstantial case which establishes - if you accept it, of course - that there were on foot at material times activities which really do not bear any other rational explanation than that the background to them was the original concluding of arrangements exactly of the kind that Mr Morgan alleged had been concluded in the evidence that he gave you. ” 205 I have set out in some detail extracts from the evidence and the judgment and summing up of Sully J at the first trial. It is necessary, however, once again to keep in mind the relatively narrow issue which I am presently considering. The question is whether the first count is foredoomed to fail, in accordance with the principles set out earlier in this judgment, with respect to the element of causation. 206 I have considered, as part of my independent assessment, the transcript and exhibits from the first trial to which my attention was drawn in the course of submissions. In addition, I have considered carefully the judgment of Sully J of 27 June 2005 in which his Honour found a prima facie case on causation. The evidence relied upon by the Crown at the first trial supports a prima facie case on this element. In forming this view, I have kept in mind the concept of “substantial or significant cause” referred to in Royall v The Queen. Although Sully J did not use this precise phrase in directions to the jury, I consider that the directions which were given involved the same concept. 207 I am not satisfied that the concept of innocent agency has application to this case. The wording of the first count is significant in this respect. It is not alleged that the Accused himself issued the rulings or opinions. It is alleged that he caused them to be issued. Even if the concept of innocent agency did have application to this case, however, I am satisfied that the evidence of Mr Aivaliotes and the other evidence at the first trial identified by Sully J which bears upon the issue of causation supported a prima facie case in this respect.
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What is the concept of causation referred to in the judgment of Sully J in R (Cth) v Petroulias (No. 1) [2006] NSWSC 788?
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nsw_caselaw:549fd55a3004262463bf14df:57
nsw_caselaw:549fd55a3004262463bf14df
The Accused concealed from the ATO his relationship with these promoters. The Crown contended that this was an appropriate starting point from which to consider evidence touching upon the element of causation. 187 The Crown submitted that it is artificial and unrealistic to examine the evidence of the four ATO officers without acknowledging the broader picture of the conduct of the Accused. It was necessary to do this to allow a proper appreciation of the evidence available to a jury bearing upon the element of causation. In this context, the Crown points to the statement by the Accused in Exhibit C199 set out above as providing some understanding of his actions with respect to relevant rulings and opinions. 188 The Crown submitted that the evidence revealed the following matters. At about the time the Accused commenced employment in the ATO, he drafted and settled applications to be submitted by Mr Panos to the ATO for Advance Opinions. The Crown alleged that the Accused so acted pursuant to an agreement with Mr Morgan and Mr Panos, revealed in the evidence of Mr Morgan and, according to the Crown, confirmed by available circumstantial evidence, whereby the Accused would devise tax schemes to be marketed by Mr Morgan and others. The Crown alleged that the purpose in obtaining favourable Advance Opinions for the promoters’ companies was to give them a marketing advantage and to establish precedents for taxpayers who may want their own Private Binding Ruling. The applications were directed by Mr Panos to named officers in the ATO, although Mr Panos had had no prior dealings with any of them. The Crown submitted that these ATO officers were nominated by the Accused as appropriate points of contact because they would, or could be persuaded to, issue favourable rulings. 189 The Crown submitted that, throughout the same period, the Accused had taken steps to make it known in the ATO that he had expertise in the area of tax law involved in the rulings. He did not disclose to any person that he had an association with the applicants for the rulings and that he had, indeed, played a part in drafting the applications to the ATO. The Crown submitted that each of the ATO officers to whom the applications for Advance Opinions were sent were in communication with the Accused who provided varying degrees of assistance to ensure that favourable opinions were issued for the tax schemes with which he was involved. 190 Once the precedents had been established by the issue of the favourable Advance Opinions to the promoters’ entities, the Crown submitted that Mr Morgan started to market the schemes. At about the same time, the Accused was appointed Officer-in-Charge of the Strategic Intelligence Assessment Unit within the ATO. He proceeded then to recruit Mr Aivaliotes to his area, and entrusted him with the task of processing the applications for Private Binding Rulings for the schemes with which the Accused was associated. 191 The Crown pointed to the evidence of Mr Aivaliotes that he had never handled an application for a ruling previously and knew nothing about the areas of tax involved. The Strategic Intelligence Assessment Unit had the responsibility of gaining information concerning market trends. The Crown submitted that it was not a function of this Unit to issue rulings and that the Accused did his best to conceal the number of rulings issued. 192 The Crown submitted that, when the schemes were sold and the taxpayer wanted his own ruling, Mr Panos posted or had delivered the application exclusively to the attention of Mr Aivaliotes. The Accused drafted the template used by Mr Aivaliotes so as to enable him to format and provide the initial favourable rulings. From time to time, Mr Panos sent correspondence seeking clarification of various issues. On each occasion, he directed the correspondence to Mr Aivaliotes. Except for one occasion when Mr Aivaliotes replied to Mr Panos of his own initiative, the Crown submitted that all other responses were approved or settled by the Accused.
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What was the purpose of the Accused in obtaining favourable Advance Opinions for the promoters' companies, according to the Crown's submission in R (Cth) v Petroulias (No. 1) [2006] NSWSC 788?
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nsw_caselaw:549fd55a3004262463bf14df:11
nsw_caselaw:549fd55a3004262463bf14df
“The rulings made by the Judge were as to the admissibility of evidence at the trial before her. After announcing them she remanded the respondent for trial on a future date. When the respondent’s trial comes on for hearing it may proceed before another judge. The ruling made by the Judge as to the admission of evidence has not become final as between the Crown and the respondent by the entry of a conviction or an acquittal: Rogers v The Queen (1994) 181 CLR 251; R v GK [2001] NSWCCA 413; 53 NSWLR 317; R v Edwards [1998] 2 VR 354. The judge presiding at the respondent’s trial is not bound to adopt evidentiary rulings made at an earlier aborted trial: R v GK per Mason P at [4] and [5] and Sully J at [74]. It is to be noted that Sully J observed that a ruling excluding evidence under s 137 of the Act made at one trial should be followed at a subsequent trial if the earlier trial had resulted in a verdict that had not been set aside on appeal and if there was no proper basis for distinguishing it: at [77].” 42 Reliance was also placed upon the decision of the Court of Criminal Appeal in R v Georgiou and Harrison where Hidden J (Spigelman CJ and Sully J agreeing) said at 296 [39]: “In this Court, Mr Wendler acknowledged that Greg James J was not bound by the ruling of Dowd J because, the verdicts in the first trial having been set aside on appeal, that ruling was not final as between the Crown and the appellant: Rogers , per Deane and Gaudron JJ at 278 – 9; R v GK (2001) 53 NSWLR 317, per Sully J at 335 - 6. Mr Wendler relied upon the more flexible approach in Rogers of Mason CJ, based upon notions of abuse of process and public confidence in the administration of justice. That was not the approach of the other members of the Court. Nevertheless, Greg James J referred to the judgment of the Chief Justice in considering the reasons of Dowd J but, having concluded that Dowd J’s decision was ‘plainly wrong’, determined that public confidence in the administration of justice would not be served by adhering to it. His Honour referred to the review of relevant authority to be found in the judgment of Buddin J, sitting as a trial judge, in R v Pettersen (unrep, 6 June 2002) at [7] - [14]. It was clearly open to his Honour to examine the matter afresh, and no error has been shown in his doing so.” 43 In substance, the Crown submitted that, although Sully J did not use the term expressly, the rule of judicial comity (in a form summarised in paragraphs 76 and 77 in R v GK) had application to the process of decision making where application is made at a second trial of a type which was determined at an earlier trial and where there has been no intervening verdict. There was direct authority for this proposition in the context of criminal pre-trial rulings in R v El Hassan (2001) 126 A Crim R 477 where the Court of Criminal Appeal (Howie J, Stein JA and Hidden J agreeing) said at 478 [4]: “Notwithstanding that the judge before whom the trial will next be listed would not strictly be bound to determine any of the issues which were before Judge McGuire in the same way as his Honour did, the present matter gives rise to a discrete question of law and comity between judges of the District Court would generally require that the trial judge not embark upon a further consideration of the matter unless there was a good reason to do so. Further, the question raised by the application is fundamental to the issues that will arise on the trial of the applicant and the defence upon which he seeks to rely. If answered unfavourably to the applicant, it may well have some bearing upon the course that the proceedings take thereafter. In my opinion leave should be granted to the applicant to appeal against his Honour's ruling.” 44 The Crown submitted that such an approach was entirely consistent with the application of the rule of comity in proceedings generally.
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What is the approach of the Court of Criminal Appeal in relation to evidentiary rulings made at an earlier trial?
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nsw_caselaw:549fd55a3004262463bf14df:59
nsw_caselaw:549fd55a3004262463bf14df
198 Sully J referred to evidence in chief of Mr Aivaliotes concerning requests for Private Binding Rulings after January 1998 (T824.39): “Q. Thereafter did you receive further requests for private binding rulings in the course of your duties? A. Yes, I did, sir. Q. In what circumstances did they come to you? A. They either came to me via Mr Petroulias handing them to me; Mr Petroulias saying there were requests on my desk for me to do; or when arriving at the office at the security desk I would be told by the security officers that there was mail for me; or I was handed such requests by Mr Petroulias’ secretary, Lisa Jifkins. Q. When it came to responding or considering whether you would issue a ruling or not, what process was followed in relation to those additional applications that you received? A. I would, of course, read the applications and the accompanying documentation. I would then consult with Mr Petroulias. I would again, having read them, look up the law to the extent of my abilities at the time. I would then prepare the rulings and show them to Mr Petroulias before applying the signature stamp and sending them out.” 199 Sully J continued, in the judgment of 27 June 2005, to summarise the evidence of Mr Aivaliotes (page 10.4): “Mr Aivaliotes said that he had retained in lever-arch folders copies of any ruling issued by him together with the relevant documentation. Toward the end of 1998, probably in October, the accused took Mr Aivaliotes’ files saying that, ‘He wished to store them in his office safe or cabinet, which was in the form of a safe’. Thereafter, whenever Mr Aivaliotes had additional such material to be filed, ‘I would give it to Mr Petroulias to file’. In February 1998, Mr Aivaliotes had referred to him by the accused a Private Binding Ruling application which had been made by a firm of chartered accountants acting on behalf of a particular client. The application was addressed to the attention of the accused. It is clear that Mr Aivaliotes prepared a draft ruling using his available precedents, and that he faxed the draft to the accused ‘for approval’. The accused directed an alteration. The alteration was made by Mr Aivaliotes and a Private Binding Ruling issued accordingly: see exhibits C111, C113, C114.” 200 Sully J set out in full in the Judgment of 27 June 2005 (pages 11-12) the following evidence given by Mr Aivaliotes towards the end of his examination in chief (T869.8): “Q. I touched on this matter yesterday, Mr Aivaliotes, concerning the system by which you received applications for rulings and dealt with them. We touched this morning on the physical location that you occupied within the Tax Office, I think you said some metres from where Mr Petroulias worked? A. Some 50 metres, yes. Q. Just in relation to the series of rulings that were issued for the Productivity Incentive Trust Plan which commenced with those which you have dealt with in some detail which are, I think, 4, 5, 6 and 7, as they were duplicated because of the date issue, through to somewhere around about 51 which was the last of the Productivity Incentive Trust Plan rulings, how did the system work whereby you received the applications and proceeded to deal with them? A. I would either get the applications upon arrival - at the security desk I'd be told there was correspondence for me, or I'd find ruling requests on my desk. Mr Petroulias would usually have said to me, ‘There are some rulings for you to do on your desk’ or Mr Petroulias would give them to me, or his secretary, Lisa Jifkins, would give them to me. Q. Presumably, after the first few that you did, there was a degree of repetition, was there- A. Yes, there was. Q. --in the applications that followed in respect of the Productivity Incentive Trust Plan? A. Yes. Q. What process did you follow when it came to responding to the applications?
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What process did Mr Aivaliotes follow when responding to applications for Private Binding Rulings?
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nsw_caselaw:549fd55a3004262463bf14df:34
nsw_caselaw:549fd55a3004262463bf14df
the respondent’s stated opinion that these had adverse tax consequences in those two aspects is also available as evidence or material out of the respondent’s own mouth that the rulings he was procuring in support of ‘favoured’ taxpayers did not represent the true tax position at the time. It will ultimately be a matter for the jury to decide if there was the necessary imperilment of the revenue. In my view, the material that has been identified indicates that it would be open for a properly instructed jury to be satisfied of this. For this reason the charge is not foredoomed to failure. In other words, the rulings were ‘arguably wrong’ in at least the first of the two ways that this issue intrudes into the case. I prefer to state the matter negatively: since the rulings were not incontrovertibly correct (on this evidence and the legal principles to which it points), the count is not foredoomed. If, however, Particular N(v) states an additional part of the positive Crown case it will throw up the question whether and how the jury are to be directed on an allegation that something was ‘arguably wrong’ (in law). This particular matter vexed the primary judge. It is not easy of resolution.” 130 Mason P noted at 690 [115]-[118] the observation of Sully J that expert evidence might not be admissible as to whether private rulings were arguably wrong. Mason P observed that no such evidence was led at the committal proceedings nor was it foreshadowed in the Crown Case Statement. As will be seen, the Crown did not adduce expert evidence at the trial which proceeded before Sully J and a jury. 131 Mason P said at 693-694 [133]-[139]: “I have already indicated that the putative vice of the respondent’s private tax rulings was that they restricted the Commissioner’s capacity to act against the taxpayers concerned otherwise than as represented in the rulings (cf Petroulias (No 1) at [64]). Viewed this way, the risk or imperilment was the tying of the Commissioner’s hands in 1998, restricting his capacity to contend against favoured ‘Rulees’ that the situation was other than as represented in their rulings. It follows from what I have already written that it would be open to the trial judge to inform himself of the state of tax law as it stood when the rulings were issued. If that state of law permitted the Commissioner genuinely to advance a tax outcome in either or both of two tax issues otherwise than as embodied in the taxpayer-favoured rulings promoted by the respondent, then the judge could so direct the jury. The jury would then be directed that, if the factual elements of the Crown case were established, it would be open for them to find the necessary imperilment of the revenue of the Commonwealth. This is the ultimate fact in issue (along with dishonesty). This approach avoids using ‘arguably wrong’ as part of the direction to the jury. But it does mean that the ‘aggravated’ Crown case goes to the jury if the judge has the requisite satisfaction that an aggravated case as alleged is open in law and on the facts. If it is, the judge may craft a direction addressing the elements of the count itself. As indicated above, the ATO internal emails and memoranda summarised above are capable of being read as containing admissions by the respondent that are at least arguably consistent in 1998 with ‘the law’ applied to the facts hypothesised as the judge may be persuaded to find it. Indeed, the judge may be assisted by the ‘chapter and verse’ about the critical issue of the meaning of ‘associate’ in s 26AAB(14)(a)(iv) of the Income Tax Assessment Act in the Chow memorandum, apparently adopted as correct by the respondent. The judge may also draw assistance from case law both before and after the rulings in question (see further below as to Essenbourne ). Of course, everyone knows that it is easy to be wise after the event, even in matters legal.
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How can a trial judge inform himself of the state of tax law as it stood when private tax rulings were issued, in order to direct the jury on the issue of imperilment of revenue?
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nsw_caselaw:549fd55a3004262463bf14df:43
nsw_caselaw:549fd55a3004262463bf14df
19. For the whole of the foregoing reasons I have come to the conclusion that, as to the deductibility and the FBT issues now relevant, there is available to the Crown a plausible argument for the propositions that the relevant employer contributions are not deductible, and that the contributions are liable to FBT. I am unpersuaded that any of the countervailing considerations upon which the present application rests constitute more than arguments which the jury can consider in connection with the ultimate issue for them, namely, whether the plausible arguments upon which the Crown relies satisfy them beyond reasonable doubt that the Commissioner, representing the Commonwealth, having been prevented by the relevant PBR's from litigating those arguments against the rulees of those PBR's, has been deprived thereby of something of value. ” 144 For the detailed reasons reproduced above, Sully J refused the second application for a directed verdict of acquittal on the first count. Directions to Jury Concerning Element of Deprivation 145 On 21 July 2005, Sully J commenced his summing up to the jury. His Honour provided written directions to the jury concerning a number of issues including an 11-page document containing directions of law on the first count (MFI105, Document 5). The written directions concerning the element of deprivation were in the following terms (pages 5-10): “3. That the consequence of the issue of the relevant rulings and opinions was that the Commissioner of Taxation was deprived of something of value . The Crown does not say, and does not therefore have to prove, that there was an actual loss to the revenue. The Crown case is that the contingent effect of the rulings and opinions was such as to imperil, that is to say to put at real risk, the revenue of the Commonwealth; and that the Commissioner has lost something of value in that the rulings deprive him of the means of avoiding that risk. The contingent effect of the rulings and opinions depends upon their legal force and effect. It is not controversial in this trial that at all material times: (a) a private binding ruling was recognised formally by certain provisions of the Income Tax Assessment Act of the Commonwealth. That formal recognition entailed that a tax payer to whom a ruling had been given by the Commissioner of Taxation could arrange aspects of his financial affairs so that they fell four-square within the terms of the rulings. In such a case the Commissioner of Taxation had to assess the tax payer's liability to taxation in conformity with the ruling. If the Commissioner tried to assess the tax payer's liability as though the ruling did not exist, and so tried to assess at a sum greater than would be payable according to the ruling, then the tax payer could resist the Commissioner's assessment, claiming the protection of the ruling. In that event the Commissioner would have to assess the tax payer's liability at an amount less than would have been proper had there been no ruling. (b) A private binding ruling although issued to the particular applicant for the ruling, and in connection with a particular financial arrangement put forward by that applicant, would be regarded by the Commissioner, in the interests of fairness and consistency, as applying also to any other substantially similar financial arrangement entered into by a tax payer other than the particular applicant for the ruling. (c) An Advance Opinion is not regarded by the Commissioner as binding him in the same way as a PBR. The Commissioner will normally regard himself bound as between himself and the particular taxpayer to whom the AO has been given. The Commissioner will not regard himself as bound as between himself and any other taxpayer. Even in the case of the particular taxpayer to whom the AO has been given, the Commissioner will regard himself as being free to depart from his AO in certain circumstances which are set out in relevant notifications issued from time to time by the Commissioner. Ex.C1 is an example of such a notification.
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nsw_caselaw:549fd55a3004262463bf14df:4
nsw_caselaw:549fd55a3004262463bf14df
5 On 27 March 2004, Ms Sweeney, Magistrate (as her Honour then was), committed the Accused for trial in terms of the s.29D count as reformulated by the Crown as a result of the proceedings in the Court of Appeal. 6 On 16 August 2004, Sperling J dismissed an appeal with respect to the order for committal on the s.29D count: Petroulias v Wills (2004) 56 ATR 608. 7 On 7 February 2005, the trial of the Accused was fixed to commence before Sully J on an indictment containing three counts as set out in paragraph 1 of this judgment. Three applications were made by the Accused: (a) an application for a permanent stay of the proceedings on all three counts contained in the indictment; (b) in the alternative, an application for a permanent stay of the first count on the indictment; (c) as a further alternative, severance of, and thereupon the separate trial of, the first count on the indictment. 8 After the hearing of the applications had proceeded for some days, the Accused did not press the first and third applications referred to above, but maintained the application for a permanent stay of the first count only. In due course, on 21 February 2005, Sully J ordered that the proceedings on the first count under s.29D be stayed permanently. Other grounds, including the submission that the first count was bad for duplicity, were dismissed by Sully J. 9 The Crown appealed under s.5F Criminal Appeal Act 1912 against the order of Sully J made on 21 February 2005 permanently staying proceedings on the s.29D count. The Court of Criminal Appeal (Spigelman CJ, Mason P, Hunt AJA) upheld the appeal and set aside the permanent stay: R v Petroulias (2005) 62 NSWLR 663. On 27 May 2005, the High Court of Australia refused special leave to appeal from the judgment of the Court of Criminal Appeal. 10 A number of other pre-trial applications were made by the Accused which were heard and determined by Sully J on days prior to 26 April 2005. On that day, the Accused pleaded not guilty to each of the three counts on the indictment, a jury was empanelled and the trial commenced before Sully J and the jury. The trial proceeded until 16 August 2005 when the jury was discharged without reaching a verdict with respect to any of the counts on the indictment. 11 During the course of the trial, a number of applications were made by the Accused which led to decisions by Sully J. At the close of the Crown case, the Accused sought a directed verdict of acquittal on the first count of the indictment, which application Sully J refused in a judgment delivered on 27 June 2005. No application of this type was made with respect to the second and third counts on the indictment. 12 The Accused did not give evidence or call witnesses in the defence case. 13 The Crown Prosecutor addressed the jury over a number of days between 28 June and 5 July 2005. Mr Clelland SC, for the Accused, addressed the jury over a number of days between 7 and 14 July 2005. 14 On 15 July 2005, Mr Clelland SC indicated a desire to advance further submissions in support of a directed verdict of acquittal on the first count with respect to the single element of deprivation. It was this aspect which had occupied the Court of Appeal in 2003 and the Court of Criminal Appeal in 2005 in the course of appellate consideration of the s. 29D count. Argument was developed by Mr Clelland SC by reference to the 2005 judgment of the Court of Criminal Appeal and the evidence which had been adduced by the Crown at trial in support of the first count. On 19 July 2005, Sully J refused the application and the first count was left to the jury which, as noted, failed to agree upon a verdict. 15 On 4 November 2005, the Court was informed that the Commonwealth Director of Public Prosecutions had determined to proceed further against the Accused with respect to the same three counts which were the subject of the first trial.
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null
nsw_caselaw:549fd55a3004262463bf14df:10
nsw_caselaw:549fd55a3004262463bf14df
(a) Sully J considered that the formula of Moore DCJ that he should “pay full deference to the ruling of his Honour Judge Ford unless …” was “ambiguous” - the correct formula was that Moore DCJ “should follow the ruling” of Ford QC DCJ: R v GK at 336 [76]; (b) even if the judge at the subsequent trial thinks that the ruling at the earlier trial is “clearly wrong” , the better view is that the earlier ruling should be nevertheless followed ( R v GK at 337 [77]): (i) if there is no proper basis for distinguishing it, (ii) if the earlier trial has resulted in a verdict that has not been set aside on appeal, (iii) and if, therefore, a refusal to follow the earlier ruling would have the practical result of promoting the notion that a criminal trial is, in significant respects, a lottery. 38 The Crown submitted that a proper understanding of paragraph 77 in R v GK required subparagraphs (i)-(iii) above to be regarded as alternative and not cumulative propositions. It was submitted for the Crown that paragraph 77 could only have sensible application when so read. If a ruling had been made at an earlier trial which had resulted in a verdict which had not been set aside on appeal, then the principles in Rogers v The Queen would have direct application and it would be those principles which would govern any application at a later trial. Sully J referred to this situation expressly at 335 [74] (5) and (7). The proposition contained at 336 [74](7) represented the only qualification to the proposition in [74](5) which reflected the principles in Rogers v The Queen. 39 The Crown submitted that paragraphs 75-77 of the judgment of Sully J should be understood as applying solely to the circumstances raised by the first question posed to the Court of Criminal Appeal. This question related to circumstances where an application is determined by a trial judge, the trial is aborted and the same application is made to the second trial judge. The Crown submitted that paragraphs 75-77 had direct application to the present case. Viewed in this way, the Crown submitted that I should follow the decisions of Sully J at the first trial even if I were satisfied that a decision was clearly wrong, if there was no proper basis for distinguishing it (for example, because of fresh evidence in the second application) and that a refusal to follow the earlier ruling would have the practical effect of promoting the notion that a criminal trial, in significant respects, a lottery. The Crown submitted that this construction of paragraph 77 must be correct because R v GK was not a case where the first trial had resulted in a verdict which had not been set aside on appeal. It was not a case where the principles in Rogers v The Queen had direct application. In these circumstances, the Crown submitted that it would be a puzzling and superfluous addition to impose a cumulative element involving a requirement that the decision in the earlier trial had occurred where a verdict followed which had not been set aside on appeal. 40 Mr Clelland SC submitted that paragraph 77 ought be taken to mean what it says. An approach is proposed in paragraph 77 which incorporates, as an ingredient, the requirement for an undisturbed verdict following the first trial. Unless this approach is taken, Mr Clelland SC submitted that no sensible meaning can be given to the concept accepted by Sully J at paragraph 74(6) of “the whole slate [being] wiped clean”. If the correct approach involves a blank slate from the first trial, Mr Clelland SC submitted that a restricted approach of the type referred to in paragraphs 76 and 77 would have no logical operation. Rather, it was submitted that those paragraphs should be understood as having application only where the earlier trial had resulted in a verdict which had not been set aside on appeal. 41 In this respect, Mr Clelland SC relied upon the formulation of the principle in R v GK by Bell J (Howie and Hislop JJ agreeing) in R v ELD at paragraph 23:
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null
nsw_caselaw:549fd55a3004262463bf14df:58
nsw_caselaw:549fd55a3004262463bf14df
193 On the one occasion when Mr Aivaliotes replied without checking with the Accused, the Accused had Mr Aivaliotes rescind the opinion he had expressed and respond with a letter then drafted by the Accused (T860-861). When applications were submitted to the ATO by Mr Panos for Advance Opinions for variations on the EBA schemes, they were also directed to Mr Aivaliotes, whose replies were drafted or settled by the Accused. At one point, according to Mr Aivaliotes, the Accused gave him a bundle of applications for rulings and asked him to “do them quickly” (T872.54). 194 The Crown acknowledged the evidence given by Mr Aivaliotes in cross-examination in which he said that he had acted professionally and in accordance with the law. The Crown submitted that it could not be expected that Mr Aivaliotes would say anything else. It was the Crown submission, however, that this misses the point. Mr Aivaliotes had been influenced substantially by the Accused by a process involving his initial selection, the direction of applications for rulings to him by Mr Panos, the close role of the Accused in drafting and settling responses to the rulings including a direction to rescind an opinion given. All of this, the Crown submitted, supported the argument that the Accused caused Mr Aivaliotes to issue the relevant rulings. 195 The Accused, according to the Crown, cleverly orchestrated a situation in which he controlled the responses to the applications submitted by Mr Panos in relation to the schemes in which the Accused was involved. Given the evidence of the involvement of the Accused in the preparation for the applications for Advance Opinions and Private Binding Rulings, and the evidence of Mr Morgan of an agreement that he would participate in sharing the profits in the sale of the scheme, the Crown submitted that, as a matter of commonsense, there was an irresistible inference that the ATO officers to whom the applications were sent were selected by the Accused because they provided the best opportunity for securing a favourable ruling. Given the Accused’s proprietary interest in the schemes, which the Crown submitted he had blatantly concealed from the ATO and its officers at all times, it is illogical that the Accused would leave to chance the outcome of the applications. 196 The Crown submitted that, at the very least, there was sufficient evidence in support of the element of causation so that the present application by the Accused ought be rejected. The Crown submitted that the doctrine of innocent agency does not apply to this case. The first count does not allege that the Accused issued the relevant opinions and rulings. Rather, the indictment alleges that the Accused caused the issue of the rulings and opinions by others. The Crown maintained the submission that the evidence supported a conclusion that Mr Aivaliotes was a “puppet” of the Accused. 197 In the course of finding that a prima facie case existed with respect to the element of causation in the judgment of 27 June 2005, Sully J referred in some detail to the evidence of Mr Aivaliotes (pages 6-14). His Honour referred to the position of the Accused as “a person of real standing, authority and influence in the ATO” (page 7.9). Sully J summarised the evidence of Mr Aivaliotes concerning his recruitment by the Accused and the allocation to him of the task of giving rulings although, as Sully J observed “Mr Aivaliotes then had no experience whatsoever with the processing of such applications” (page 8. 9). In January 1998, Mr Aivaliotes received an email from the Accused which provided a sample ruling on the employee benefits trust (Exhibit C106). Sully J continued (page 9.5): “Mr Aivaliotes said that he read the attachments to the email and used the draft as a precedent for issuing two Private Binding Rulings. He showed the rulings to the accused, who affixed to them, using a stamp of which he then had legitimate possession, the signature of the Commissioner’s delegate, Mr Killaly. Thereafter, Mr Aivaliotes received further Private Binding Ruling applications.”
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null
nsw_caselaw:549fd55a3004262463bf14df:62
nsw_caselaw:549fd55a3004262463bf14df
208 In circumstances where I am satisfied, based on the evidence adduced at the first trial, that a prima facie case exists on this element, I am not satisfied that the first count is foredoomed to fail by reference to this element. I reject the application of the Accused based on this contention. The Element of Dishonest Means 209 The Accused submits that the first count is foredoomed to fail with respect to the element of dishonest means. Mr Clelland SC submits that there was an absence of evidence capable of supporting this element and that Sully J erred in directions of law given to the jury on this issue. 210 The written directions provided to the jury referred to dishonesty (MFI105, Document 5, pages 4-5): “2. That his act (or acts), as you find them on the evidence was (or were) dishonest The guiding principle of law is that you, as the chosen representatives of the community, must apply what you understand to be the current standards of ordinary, decent people. If any particular act is dishonest when tested against those standards, then that act is dishonest in the sense required for the proof of this, second, essential element of the charge. Bearing always in mind that governing principle, then: • The Crown must prove beyond reasonable doubt that the act or acts of the accused, said to have caused the rulings to issue, was (or were) dishonest. It is relevant to look at any act of the accused that is said to have caused the rulings to issue at all. It is relevant to look, also, at any act of the accused that is said to have caused the rulings to issue in the form in which they did in fact issue. • In considering the act or acts of the accused in the sense explained in the preceding paragraph, you would be entitled to take the view that whatever you are satisfied the accused did in order to cause the rulings to issue, would be dishonest in the relevant legal sense if it in effect asserted to be true something that was in fact false, and if the accused, when doing the particular act(s), either actually knew that what he was thereby asserting to be true was in fact false; or did not believe that what he was thereby asserting was true. • similarly, and when considering those causative acts, you would be entitled to take the view that an act would be dishonest In the relevant legal sense, if the accused either did the act knowing that he had no right to do it; or did the act not believing that he had a right to do it.” 211 Although the Accused does not challenge the terms of the direction with respect to dishonesty, it is submitted there was no linking of the concept of dishonesty with the acts said to be causative of the issue of the rulings. The first count alleged that the Accused had caused the rulings and opinions to issue “by dishonest means”. 212 Mr Clelland SC submitted that the law requires a distinction to be made between general evidence of dishonesty and evidence that the Accused caused the rulings to issue by dishonest means. It was submitted that the directions of Sully J failed to require that such a distinction be made by the jury in circumstances where the prosecution is unable to prove dishonest means in the way that term is to be understood. It was submitted that the first count requires proof beyond reasonable doubt not only that the Accused acted dishonestly, but also that his dishonest acts caused the rulings to issue in the form in which they did. 213 Mr Clelland SC relied upon the decision of the Court of Criminal Appeal in R v Iannelli (2003) 56 NSWLR 247 in which reference was made at 258 [65] and 271-272 [116]-[119] to the distinction between proof of dishonest means in the perpetration of the fraud alleged and proof of a dishonest state of mind. Reference was also made to Peters v The Queen at 509-510 [33] and Spies v The Queen (2000) 201 CLR 603 at 633-634 [87] and 635 [92].
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0.010717948898673058 ]
null
nsw_caselaw:549fd55a3004262463bf14df:76
nsw_caselaw:549fd55a3004262463bf14df
There is nothing to indicate that these persons were not available to be called by the Accused in his case at the trial if he so wished. I see no basis for the grant of a stay arising from the Crown’s failure to call Mr Panos and Mr Strong at the first trial. 301 It was not until closing addresses that the defence identified other persons whom it was submitted that the Crown should call and in relation to whom a direction under Jones v Dunkel ought be given. In circumstances where the request to call such witnesses was left until that point in the trial, I do not see how this aspect weighs in the Accused’s favour on the present permanent stay application. 302 I am not satisfied that the failure of the Crown to call the nominated witnesses at the first trial provides a foundation for the relief sought by the Accused in this application. Impact of the Passage of Time Since 1997 303 The Accused points to the passage of time between the events of 1997-1999 and the present time and the suggested adverse impact upon non-documentary evidence of conversations said to have been had with the Accused and, in relation to which, oral evidence is relied upon by the Crown. The Accused submits that this feature is of significance to the present permanent stay application. 304 It is not submitted by the Accused that actual evidence has been lost or that there is some other form of actual prejudice resulting from the effluxion of time. 305 The Accused was arrested and charged in March 2000. He had been aware since 1999 that his activities were under investigation. There was an opportunity for the Accused to test Crown witnesses at the committal proceedings which extended over some 36 days. Of course, those witnesses were called in the first trial and there was an opportunity to cross-examine them. 306 Apart from Mr Morgan, the Crown case appears to be largely a documentary case. As Sully J observed at the first trial, the evidence of Mr Morgan is under strong challenge from the Accused and there is a contest as to conversations alleged by him to have taken place with the Accused and also as to the payment of money to the Accused with respect to the alleged arrangement. 307 It may be taken that memories may fade, to an extent, in the passage of time between 1997 and 2006. However, it is not uncommon in criminal trials for significant factual contests to arise with respect to events which allegedly occurred years, and often many years, prior to trial. I see nothing in the present case which suggests that this aspect gives rise to particular difficulty or unfairness to the Accused. Indeed, apart from Mr Morgan, the heavy dependence of the Crown case upon documents would suggest that memory may pose less of a problem in this case than in many others. 308 A permanent stay should be ordered only in an extreme case and the making of such an order on the basis of delay alone will accordingly be rare: Jago v District Court (NSW) at 33-34; R v Johnson (2001) 125 A Crim R 564 at 568-569 [17]. I am not satisfied that the delay in this case, or any consequences which may flow from it with respect to the quality of evidence, is such as to warrant a permanent stay of the proceedings. An Unmanageable and Unfair Trial? 309 It was submitted for the Accused that I should have regard to the size and complexity of the proceedings as part of the weighing process referred to in Walton v Gardiner at 396, although it was submitted that it was not necessary for me to determine that it was beyond the capacity of a jury to understand and follow the case. 310 I have already referred to the observations of Mason P in R v Petroulias at 690 [118] that the complexity of a trial cannot be the touchstone of whether the trial takes place at all.
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null
nsw_caselaw:549fd55a3004262463bf14df:21
nsw_caselaw:549fd55a3004262463bf14df
The income of the trust would enure to the benefit of nominated employees. The eligibility of the employees to receive returns on the units would depend on continued service with the employer and the attainment of productivity or performance standards. The corpus would eventually vest in favour of the employee. The purpose of these arrangements was said to be to encourage employees to remain with their employer and also to act as an incentive for such employees to become more productive. 6 As is usually the case, the taxation treatment of the cash flows was of critical significance to the commercial viability of the arrangements. It was always accepted that each employee would be assessable on his or her share of income of the trust. Four issues arose: · Would the employer's contributions be deductible at the time they were made? · Would the employer be liable for fringe benefit tax under the Fringe Benefit Tax Assessment Act 1986 (Cth) with respect to its contributions? · Would the general anti-avoidance provisions found in Pt IVA of the Income Tax Assessment Act apply to the scheme? · Would the employee be assessable on the value of the units in the trust that each acquired? 7 The Crown case was that the Opponent used his position to ensure that officers under his direction issued favourable rulings with respect to applications made by the joint venture in which he had a financial interest. This was in contrast with the Opponent's intervention with respect to applications by other promoters of similar schemes, in the case of which he allegedly intervened to ensure that favourable rulings were not given. Indeed, the Crown contended that the Opponent was involved in the preparation and publication of a Public Ruling in which the ATO indicated a view opposed to the efficacy of the EBAs.” 87 At the risk of oversimplification, the evidence adduced by the Crown at the first trial fell into the following broad categories: (a) the evidence of Mr Richard Morgan of the arrangement said to have been entered into between the Accused, Mr Morgan, Mr Panos, Mr Strong, Mr McLaren and Mr Gray including evidence of benefits allegedly received by the Accused for his part in the arrangement; (b) evidence of a number of ATO officers concerning the issue of Advance Opinions and Private Binding Rulings - the principal witnesses in this class included Mr Lowman Chow, Mr Michael Charles, Mr James Targett and Mr Emmanuel Aivaliotes; (c) documentary evidence obtained from a number of sources, including a storage area in Melbourne leased by the Accused in a false name - the Crown relied upon documentary material as evidencing the existence of the arrangement alleged by Mr Morgan and the steps taken by the Accused in drafting applications and otherwise assisting applicants and promoters and, on the ATO side, supporting applications made by those promoters for Advance Opinions and Private Binding Rulings and not supporting applications by competitors in this respect; (d) a body of documentary evidence which the Crown relied upon in support of the element of deprivation in the first count - this included documents directed to the Accused or prepared by him which, according to the Crown, demonstrated an arguable case in support of the element that the Commonwealth had been deprived of something of value by the acts of the Accused. 88 Other witnesses were called (including investigators and other ATO officers) and other classes of documents were tendered at the first trial. 89 A primary factual issue involved proof of the arrangement alleged by Mr Morgan to have involved the Accused. The credibility and reliability of Mr Morgan was a central issue at the first trial. He was described by Sully J as “a cardinal witness in the Crown case”. The Crown submitted that, in various respects, the documentary evidence corroborated the evidence of Mr Morgan.
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null
nsw_caselaw:549fd55a3004262463bf14df:71
nsw_caselaw:549fd55a3004262463bf14df
261 His Honour gave the jury directions concerning the elements of the offence contained in the third count in the indictment (SU228ff). The present ground advanced by the Accused that no reasonable jury could accept the evidence of Mr Morgan does not extend to the third count on the indictment. 262 A significant challenge was made by the Accused to the credibility and reliability of Mr Morgan at the first trial. It is not necessary, for present purposes, to amplify the various bases of attack upon Mr Morgan. They were identified in the submissions made to the jury at the first trial and referred to by Sully J in the summing up. 263 It was a matter for the jury to assess the evidence of Mr Morgan. The Crown submitted at the first trial, and again before me on this application, that the evidence of Mr Morgan was corroborated in a number of important respects by documentary evidence. 264 In argument, Mr Clelland SC confined the way in which the Accused pressed this ground, although he maintained that the suggested deficiencies in the evidence of Mr Morgan ought be taken into account in the weighing process (PT265.53, 2006). I am not satisfied that any question concerning the credibility and reliability of the evidence of Mr Morgan founds the grant of a permanent stay of these prosecutions as an abuse of process. It was a matter for the jury at the first trial to assess the evidence of Mr Morgan and to determine what weight to attach to it. It will be a matter for the jury at the retrial to undertake a similar task. 265 It has been observed that a judge should not stray into the area reserved for the jury: Doney v The Queen at 215. That principle, which applies to the determination of an application for a directed verdict at the close of the Crown case, has greater application when an Accused seeks to bring to an end the processes of justice applicable to him in criminal proceedings: R v Smith at 25, 30. 266 This head of argument does not provide a basis for a permanent stay of these criminal proceedings. Conduct of the Crown in Persisting to Prosecute Various Versions of s.29D Charge 267 The developing history of the s.29D count has been referred to earlier in this judgment. The count has been in the same form since April 2004 when the Accused was arraigned. The present form of the first count was considered by Sully J and the Court of Criminal Appeal in 2005. 268 The Court of Criminal Appeal was alive to the developing history of this count. It is fair to observe that the technical features of this count and, in particular, the element of deprivation have been identified and developed in the judgments of the Court of Appeal and the Court of Criminal Appeal to which reference has been made. As the judgments of the Court of Appeal and Court of Criminal Appeal demonstrate, the matter is not without complexity. Despite the history of amendments, the Court of Criminal Appeal allowed the appeal from Sully J and set aside the permanent stay with respect to the first count. 269 Following the decision of the Court of Criminal Appeal in March 2005, the first count as pleaded in the indictment was left to the jury which could not agree on a verdict. At the time of the appeal before the Court of Criminal Appeal in March 2005, the Crown had not indicated an intention to adduce any expert evidence with respect to the element of deprivation. The Court did not rule that the calling of such evidence was a prerequisite to the first count proceeding to a trial on the merits. The suggestion was made in the judgment of the majority that such evidence would be admissible. However, the Crown did not seek to adduce such evidence. 270 The Crown maintained the case on the element of deprivation as identified, in broad terms, by Mason P at 680-682 [68]. The Crown sought to rely upon additional evidence to that referred to by Mason P.
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null
nsw_caselaw:549fd55a3004262463bf14df:51
nsw_caselaw:549fd55a3004262463bf14df
that such a finding on facts would well and truly cover the issue of whether the rulings were arguably wrong. If their level of satisfaction is that they are correct then the accused is entitled to have a direction to the jury that they should find as a result of that that the Commissioner did not suffer any deprivation. I am asking your Honour to redirect them in those terms. HIS HONOUR: I gather that. Yes, I refuse that application. I refuse it because I consider that the directions both written and oral that have been given to the jury correctly crystallised the questions that they do have to decide and in particular they crystallise, so far as one can do it, the vexed and difficult question of what it is that they have to analyse and decide on the topic of ‘an arguable case’. The application is of course recorded for any necessary future reference, but I refuse it.” 155 On 16 August 2005, the jury sent a note to the following effect (TA103): “Your Honour we cannot reach a verdict. We have tried and tried and again but we have failed. We have reconsidered and reviewed the evidence with both views becoming myopic. We understand the time, expense and human emotion that has been expended on this case and every juror has done their best in a very complex scenario. We have genuinely tried to reach a unanimous verdict but we cannot. I am sorry.” 156 Thereafter, Sully J took evidence form the foreperson in accordance with s.56 Jury Act 1977 (TA104-105). The jury was discharged without verdict (TA105). Is the First Count Foredoomed to Fail on the Element of Deprivation ? 157 In the course of submissions, both written and oral, I was taken to a range of exhibits and parts of the transcript of evidence of witnesses in support of the defence argument that the first count was foredoomed to fail with respect to the element of deprivation. 158 In broad terms, the submissions made to Sully J in support of the application for a directed verdict of acquittal which was refused on 19 July 2005 were repeated and amplified before me. It was submitted that Sully J erred in not upholding that submission. It was submitted that, properly understood, the judgment of the majority in the Court of Criminal Appeal at 670-671 [27]-[28] required objective evidence of the law, preferably coupled with expert evidence, to support the Crown case on the element of deprivation. It was submitted that the Crown had not adduced evidence, or placed information before the jury in any permissible way, which would leave it open to the jury to be satisfied that this element of the first count had been made out. It was submitted that Spigelman CJ and Hunt AJA at 670-671 [27] had determined that such evidence as may constitute out-of-court admissions of the Accused was incapable of establishing this element of the crime. 159 Mr Clelland SC submitted that the evidence of Mr Chow, properly understood, could not support this element of the first count. The evidence contained in other documents, including draft rulings and emails from the Accused to Mr Ackhurst and Mr Strong, were incapable of supporting the Crown case on this element. The Accused submitted that the Crown case as presented fell short, in various respects, of that summarised by Mason P in R v Petroulias at 680-682 [68]. 160 In these circumstances, Mr Clelland SC submitted that the Crown case with respect to the element of deprivation was hopeless and was foredoomed to fail. He contended that the element of deprivation relied upon by the Crown had become so refined as to be a “detriment of quite [a] nebulous kind” involving a hypothetical opportunity to run a hypothetical case (PT299. 40, 2006). He noted that the Crown had acknowledged that it was proposed to rely upon the same evidence at the retrial and that the Crown was not indicating any intention to supplement the evidence already adduced at the first trial.
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null
nsw_caselaw:549fd55a3004262463bf14df:53
nsw_caselaw:549fd55a3004262463bf14df
the Crown submits that an admission by the Accused with respect to a question of law is admissible, especially given his substantial legal and technical expertise with respect to tax matters. The Crown submits that the evidence is admissible to prove the objective fact as to the state of the law as part of the arguable case test: Lustre Hosiery Ltd v York (1935) 54 CLR 134 at 138-139; Anglim and Cooke v Thomas (1974) VR 363 at 370-372; Director of Public Prosecutions v Parsons (1993) 1 VR 1 at 5; s.81(1) Evidence Act 1995. 165 In determining this ground, I must keep clearly in mind the test to be made out by the Accused. It is, in truth, an exceptional ground in support of an already exceptional remedy. 166 From time to time, some arguments advanced for the Accused in support of this ground had the flavour of submissions made to the Court of Criminal Appeal following a verdict. Of course, I am not exercising an appellate function of determining whether a type of notional verdict of guilty arising from the evidence relied upon by the Crown in support of the first count would render such a notional verdict unreasonable or such that the verdict of a jury could not be supported having regard to the evidence: s. 6(1) Criminal Appeal Act 1912; M v The Queen (1994) 181 CLR 487 at 492-495; MFA v The Queen (2002) 213 CLR 606 at 614-615, 623-624. Nor am I exercising the function of a trial judge to whom an application is made for a directed verdict of acquittal in accordance with the principles in Doney v The Queen. 167 The application requires the Accused to satisfy the stringent test identified in Walton v Gardiner, R v Smith, R v Tolmie and R v Jasper and it requires that test to be satisfied before the trial has commenced. It is true that there is available the evidence called by the Crown at the first trial. It is also true that the Crown has indicated that it does not propose to supplement this evidence in any relevant way. That, however, does not make easier the task confronting the Accused in seeking to demonstrate that this exceptional relief ought be granted. 168 I have had regard to the exhibits and transcript to which I was taken during detailed argument by both Mr Clelland SC and the Crown. I have given consideration to the judgment of the Court of Criminal Appeal (against the background of the judgments of the Court of Appeal) and the application of that judgment by Sully J in the context of the trial. I have had regard to the judgments of Sully J delivered on 27 June 2005 and 19 July 2005 rejecting applications for a directed verdict of acquittal with respect to the first count. The latter judgment, in particular, is of importance to the arguments concerning the element of deprivation. 169 I have made an independent assessment of the matters of fact and law touched upon in submissions. I have found the judgments of Sully J, and in particular the judgment of 19 July 2005, persuasive in their reasoning. I have reached the same conclusion as those expressed by Sully J on these issues. 170 I agree with Sully J that the majority judgment of the Court of Criminal Appeal did not hold that evidence of admissions of the Accused was incapable of establishing the deprivation element. The cases relied upon by the Crown support the admissibility of the Accused’s admissions, including his opinions concerning issues which were familiar to him and as to which he possessed relevant expertise. Out-of-court admissions of issues of law or mixed fact and law have been held to be admissible: Pitcher v Langford (1991) 23 NSWLR 142 at 147A-B, 160B-E. I stress that I a not, at this point, ruling on the admissibility of this evidence for the purpose of the retrial. I am addressing a defence argument that the first count is foredoomed to fail so that the proceedings should not continue to allow arguments to be advanced in support of the tender of the admissions.
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null
nsw_caselaw:549fd55a3004262463bf14df:77
nsw_caselaw:549fd55a3004262463bf14df
311 It is true that the first trial extended over some months, with ongoing debate and the need for resolution by Sully J of certain arguments concerning, in particular, the element of deprivation in the first count. The Crown and the Accused have had the benefit of hearing the totality of the evidence adduced at the trial and the arguments advanced with respect to the evidence by both sides. Mr Clelland SC submitted that the retrial may take longer than the first trial because of the additional evidence and material available from the first trial (PT296.24, 2006). The Crown submitted that having had an opportunity to observe the evidence and the manner in which it was approached by the parties, the “Crown case would in fact be better the second time around” (PT305.8, 2006). 312 I note that the Accused had the benefit of senior and junior counsel, together with at least one instructing solicitor, throughout the first trial and during the proceedings to date before me. The Accused’s legal team has demonstrated a capacity to advance detailed arguments, written and oral, before Sully J and before me. The Accused and his legal representatives have acquired an additional understanding of the case from the first trial which ought allow an efficient and expeditious approach to the resolution of issues falling for determination in advance of and at the retrial. Mr Clelland SC acknowledged that the just and expeditious determination of the matter was in the Accused’s interests (PT52.16, 2006). 313 I do not underestimate the challenge posed by this retrial. Some complex issues are involved. It will be my responsibility to manage the trial and to give the jury appropriate directions as required by law. I will look to counsel for the Crown and the Accused for assistance in this regard: R v Wilson and Grimwade at 165. As the Victorian Court of Criminal Appeal observed in that case (at 176), juries can deal with long and complex trials and have been known to do so satisfactorily when given appropriate opportunity and assistance. 314 I am not satisfied that the volume and complexity of the issues and materials will result in an unmanageable and unfair trial. Stress and Hardship for Accused 315 Mr Clelland SC pointed to the ongoing stress and hardship experienced by the Accused resulting from the continuation of these criminal proceedings. I have referred earlier (at paragraph 67) to some of the features relied upon in this respect. 316 It is a common, if not universal, feature of criminal proceedings that the Accused is subjected to stress whilst the proceedings are on foot. Many persons are remanded in custody until the trial is complete. The present Accused has been on bail. The Accused has not adduced evidence on this application concerning his personal circumstances or any subjective factors said to be relevant to the application. Accepting as I do that the Accused is under stress whilst these proceedings are on foot and that there are associated demands upon him by way of cost and inconvenience, I do not consider that these factors weigh heavily in the present application. Public Interest Considerations 317 The cases have made clear that there is a strong public interest in the determination by the criminal courts on the merits of prosecutions for serious crime: Jago v District Court (NSW) at 33. The Crown submitted that it would bring the administration of justice into disrepute if a permanent stay was granted with respect to these prosecutions. The Accused submits, on the other hand, that the continuation of these proceedings, given their history, would tend to bring the administration of justice into disrepute. 318 In Wills v Petroulias (No. 2), Spigelman CJ at 626 [49] observed that “important public interests are involved in these prosecutions”. The allegations are serious involving, as they do, a claim of serious misconduct on the part of a person holding a very senior rank within the ATO. 319 In my view, there is a strong public interest in these prosecutions being heard and determined on their merits.
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null
nsw_caselaw:549fd55a3004262463bf14df:15
nsw_caselaw:549fd55a3004262463bf14df
58 It has been emphasised that the power to stay permanently a criminal prosecution will be used only in most exceptional circumstances: Jago v District Court (NSW) (1989) 168 CLR 23 at 31 (Mason CJ). If permanent stay orders were to become common place, it would not be long before courts would forfeit public confidence: Jago at 50 (Brennan J). The power is exercisable only in exceptional cases or sparingly and with the utmost caution: Jago at 76 (Gaudron J). 59 In R v WRC (2003) 59 NSWLR 273, Spigelman CJ (Dunford and Hidden JJ agreeing) said at 282 [55]-[56]: “A permanent stay of criminal proceedings is a wholly exceptional intervention into the processes of the criminal law. The public interest in ensuring that persons charged with crimes are tried is entitled to significant weight in the necessary balancing process. (See, for example, Jago (at 30 and 49–50).) Because of this, as Mason CJ said in Jago (at 34): ‘a permanent stay should be ordered only in an extreme case …’.” 60 The onus of satisfying the Court that there is an abuse of process lies upon the party alleging it and the onus is a heavy one: Williams v Spautz at 529. It is the defence that assumes the high burden of seeking to establish irredeemable abuse of process so as to preclude a fair trial: R v Petroulias (2005) 62 NSWLR 663 at 688 [103]-[104]. 61 The Accused submits that the approach to be taken in determining the broader abuse of process ground involves the weighing process referred to by Mason CJ, Deane and Dawson JJ in Walton v Gardiner at 395-396: “As was pointed out in Jago , the question whether criminal proceedings should be permanently stayed on abuse of process grounds falls to be determined by a weighing process involving a subjective balancing of a variety of factors and considerations. Among those factors and considerations are the requirements of fairness to the accused, the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime, and the need to maintain public confidence in the administration of justice.” 62 The circumstances that may constitute oppression or an abuse of process are various and the discretionary considerations that may be relevant in dealing with them cannot be rigidly confined: The Queen v Carroll (2002) 213 CLR 635 at 650-651 [47] (Gleeson CJ and Hayne J). 63 The jurisdiction to stay proceedings as an abuse of process is wide ranging, but not without limits. It has been said that the discretion cannot be exercised to stop proceedings because the evidence against the accused is weak or because the Bench disapproves of the prosecution: R V Chairman of London County Sessions; Ex parte Downes (1953) 37 Cr App R 148 at 152; Pattenden, Judicial Discretion and Criminal Litigation, 2nd edn, 1990, Clarendon Press, page 33. 64 The fact that the jury could not agree at the first trial and that the Crown wishes to proceed by way of retrial is not an uncommon event in the criminal justice system. It is not, of itself, capable of constituting an abuse of process: Bowe v The Queen [2001] UKPC 19. 65 It may be taken that the Commonwealth Director of Public Prosecutions has exercised his prosecutorial discretion in determining that retrial should proceed on all three counts contained in the indictment. There are published guidelines for the making of decisions contained in the Prosecution Policy of the Commonwealth. Paragraph 5. 23 of the Prosecution Policy makes express provision for the Director to have regard to a range of factors where a jury has disagreed at a trial and consideration is given to whether a retrial should proceed. In Island Maritime Limited v Filipowski, Kirby J at paragraph 81 adverted to the significance of prosecutorial discretion in explaining why a stay of criminal proceedings was most exceptional: “Generally speaking, courts exist to quell the controversies brought to them by the parties. Their powers, of their own initiative, to institute or terminate proceedings are exceptional. Such powers are kept in firm check.
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null
nsw_caselaw:549fd55a3004262463bf14df:7
nsw_caselaw:549fd55a3004262463bf14df
27 Although the applications made to Sully J and to me are different in nature, the conclusion is open that the accused faces a more demanding task in satisfying the high threshold required for a permanent stay which would have the effect of preventing the operation of the ordinary processes of justice which exist for the purpose of determining criminal proceedings. 28 Upon this basis, the Accused faced a less onerous test in 2005 in his unsuccessful applications made to Sully J in the course of a criminal trial than he does in the application to me to prevent a criminal trial proceeding with respect to the first count. 29 Against this background, I sought submissions from the parties concerning the role of Sully J’s judgments. Put shortly, Mr Clelland SC submitted (PT20-27, 137-144, 160-169, 2006): (a) that, as the jury in the first trial had been unable to agree and had been discharged without verdict, the principles in Rogers v The Queen (1994) 181 CLR 251 had no application to confine or restrict the ability of the Accused to advance applications previously rejected by Sully J; (b) that I was not bound to follow the decisions of Sully J made at the first trial: R v GK (2001) 53 NSWLR 317 at 335-336 [74]; R v ELD [2004] NSWCCA 219 at paragraph 23; R v Georgiou and Harrison (2005) 153 A Crim R 288 at 296 [39]; (c) that, as no verdict was delivered at the first trial, “the whole slate is wiped clean” and I should approach the determination of the present applications afresh and without regard to the decisions of Sully J: R v Edwards (1998) 2 VR 354 at 356; R v GK at 335-336 [74]-[76]; (d) that the principle of judicial comity has no application to the present case except, perhaps, to the extent to which a question of law was determined by Sully J and I am asked to consider the same question of law. 30 In summary, the Crown submitted (PT133-136, 145-160, 169-172, 2006): (a) that I was not bound by the decisions of Sully J made at the first trial: R v GK at 335-336 [74]; (b) that, however, I should follow the decisions of Sully J, even if I was of the view that the decisions were clearly wrong, if there is no proper basis for distinguishing them and if, therefore, a refusal to follow the earlier rulings would have the practical effect of promoting the notion that a criminal trial is, in significant respects, a lottery: R v GK at 336 [77]; (c) that I should follow the decisions of Sully J unless there are different circumstances in the application of the discretion in the present case, or there is fresh evidence in the present case - in either of those two circumstances, it being such as would require a real redetermination of whether the relevant discretion should be exercised: R v GK at 336 [76]; (d) that the principle of judicial comity has application in this case and that the statement in R v GK at 336 [76]-[77] ought be understood as an expression of the practical operation of this principle in the context of repeated interlocutory applications in a criminal trial. 31 Given that both parties relied upon R v GK in support of conflicting propositions, it is appropriate to examine the decision. In R v GK, Ford QC DCJ limited the use to which certain DNA evidence could be put at a sexual assault trial. The trial proceeded, the jury could not agree and were discharged. Prior to the retrial before Moore DCJ, the Crown sought to tender the DNA evidence for purposes extending beyond those allowed by Ford QC DCJ at the first trial. Moore DCJ declined to allow the Crown to lead this evidence for these additional purposes. The second trial proceeded but was aborted. A third trial proceeded before Moore DCJ and the jury acquitted the accused on all counts. Thereafter, the Crown submitted a number of questions of law to the Court of Criminal Appeal under s.5A Criminal Appeal Act 1912, the first of which was in the following terms:
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null
nsw_caselaw:549fd55a3004262463bf14df:54
nsw_caselaw:549fd55a3004262463bf14df
171 I agree with Sully J’s observation that the evidence adduced by the Crown accorded in substance with that referred to by Mason P at 680-682 [68] and accepted by the majority at 671 [29] as being sufficient to warrant refusal of the permanent stay application then made by the Accused. I accept the Crown submission that the judgments of the Court of Criminal Appeal did not require the Crown to adduce expert evidence to establish this element. I am satisfied that the approach taken by Sully J at the first trial accorded with the decision of the Court of Criminal Appeal. In my view, the evidence adduced at the first trial supports a prima facie case with respect to this element. I am satisfied that the first count is not foredoomed to fail by reference to the evidence adduced at the first trial in support of the legal element of deprivation. 172 I am not satisfied that Sully J erred in the approach taken at the first trial with respect to the line of authority commencing with Essenbourne. As the majority in the Court of Criminal Appeal stated at 667 [13]: “ [I] t is not the function of the relevant tribunal to determine whether either the Commissioner’s argument or the taxpayer’s argument is correct or even which is more plausible or the more apparently reasonable arguable.” 173 The issue for the jury was not whether the argument of the Commissioner was correct nor whether the ruling was correct. For the same reason, I do not consider that any error was involved in Sully J’s answer to Questions 5 and 6 from the jury on 9 August 2005. Accordingly, I am not satisfied that the Accused lost a substantial prospect of acquittal by reason of the approach taken by Sully J to those questions. Although that issue is not relevant to the resolution of the present ground, it does relate to the second way in which this issue is raised in support of the broad abuse of process ground, to which I will turn later in this judgment. 174 I refuse the application for a permanent stay based on this ground. The Element of Causation 175 The Accused submitted that the first count was foredoomed to fail with respect to the element of causation. 176 In the course of refusing an application for a verdict by direction on 27 June 2005, Sully J determined that there was a prima facie case with respect to the element of causation (pages 6-15). Mr Clelland SC submits that the direction given to the jury with respect to causation was erroneous in law and that, in any event, there was an absence of evidence to support this element. 177 A convenient starting point is the written direction given to the jury by his Honour with respect to causation (MFI105, Document 5, pages 3-4): “1. That the accused did some act or acts which caused the relevant rulings and opinions to issue . The guiding principles of law are: 1.1 Whatever the accused did does not have to be the sole cause of the issue of the relevant rulings and opinions. 1.2 Neither does it have to be a direct cause. An indirect cause is a sufficient link. 1.3 But whatever the accused did must be something of substance and not something that is merely trivial; or a mere item of historical background, unconnected in any real way with the issue of the relevant rulings and opinions. 1.4 You must keep steadily and clearly in mind that in deciding whether the Crown has proved beyond reasonable doubt this element of causation, you are not answering a question either of philosophy or of science. You are using your common sense in order to reason to a practical conclusion about a practical question, always bearing carefully in mind that the purpose of what you are doing is to decide an essential aspect of the alleged responsibility of the accused for a serious criminal offence.”
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null
nsw_caselaw:549fd55a3004262463bf14df:50
nsw_caselaw:549fd55a3004262463bf14df
“Your Honour, we are struggling. We have split into two camps and have been so for some time. Both are becoming increasingly intransigent. Where do we go from here?” 151 Sully J then gave the jury a direction in accordance with the principles in Black v The Queen (1993) 179 CLR 44 (TA55-59). 152 On 9 August 2005, further questions were received from the jury in the following terms: “Question 1: If the rulings are correct at law, can the Commissioner strike them down? Question 2: If the PBR is incorrect in law can the Commissioner strike it down? (Part IVA) Question 3: If a ruling is a blatant tax avoidance mechanism can the Commissioner invoke Part IVA? Question 4: Could we have a brief outline of Part IVA? Question 5: If the rulings are correct, does that mean the Commissioner did not suffer any deprivation? Question 6: If the Commissioner did not suffer deprivation does that mean acquittal on count 1?” 153 Submissions were made to Sully J concerning the manner in which these questions should be answered (TA59ff). Before me, Mr Clelland SC placed particular emphasis upon Questions 5 and 6. He submitted that correct answers to these questions would have provided the Accused with a substantial prospect of acquittal on the first count. In responding to the questions generally, Sully J provided the jury with an explanation of Part IVA (TA65ff) and distinguished between tax avoidance schemes and Private Binding Rulings (TA69). His Honour took the jury back to the written directions provided with respect to the element of deprivation in the first count (MFI105, Document 5) (TA69.5). Thereafter, Sully J returned to the questions posed by the jury (TA74.2): “Now let me take you back against that background to your first second and fifth questions and say that those questions in the form in which you have asked them seem to me, with respect, to be misconceived because they seem to me to proceed upon the basis that it is part of your task to consider whether the rulings ought to be held to be correct at law. But that is not the question for you. The question for you is: Does the Commissioner have an arguable case that the rulings are wrong; he being unable to test that case in Court because of the effect of the rulings? Ladies and gentlemen, is that much clear? JURY NODDED THEIR ASSENT Think about that and if there are other supplementary things that you need to ask in order to clarify anything that is not entirely clear, of course you are free to do it and I urge you to do it, but I think that is the best that I can do for you in relation to those particular matters. It remains for me only to thank you once again for your hard work during the day and to excuse you until 11 o’clock tomorrow morning. CLELLAND: I think there is a final question that the jury asked that I don’t think your Honour has responded to. HIS HONOUR: I thought in fact that I had responded to it in terms. May I read again the last two paragraphs of the supplementary sheet of directions: ‘If you are satisfied beyond reasonable doubt that the fair and reasonable answer to that question is: Yes, then the Crown has established the essential element of deprivation. If you are not so satisfied, then the Crown has not established that essential element, and you should thereupon acquit on count 1.’ Is that all clear? JURY NODDED THEIR ASSENT” 154 In the absence of the jury, Mr Clelland SC sought further directions in response to Questions 5 and 6 which Sully J declined to give (TA75.6): “CLELLAND: Your Honour, in our submission the jury are entitled to have the question answered - that is the fifth question answered in this way: If they have reached a level of satisfaction on the evidence that the rulings are correct then they are entitled to be told that that means on the Crown case and as a matter of law that the Commissioner did not suffer any deprivation;
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null
nsw_caselaw:549fd55a3004262463bf14df:64
nsw_caselaw:549fd55a3004262463bf14df
222 The Crown submitted that the conflict of interest persisted at a practical level until the end of the issuing of the rulings by Mr Aivaliotes, with the Accused directing Mr Aivaliotes to write letters to the PIC promoters designed to protect their schemes from the effects of the Draft Public Ruling, in a way which was intended to maximise the fraud on the Commonwealth by doing his best to ensure that taxpayers who had purchased these schemes but had not been issued with their rulings, were protected by the rulings. In these ways, the Crown submitted that the evidence revealed actions of the Accused flowing from his conflict of interest which supported a conclusion that he caused the rulings to issue by dishonest means. 223 The second component of dishonest means relied upon by the Crown concerned the allegation that the Accused had approved the use of a policy within the ATO to EBAs which required the application of fringe benefits tax in a way which effectively put the schemes out of business, but did not apply that policy to the PIC schemes in which he had an interest. The Crown pointed to the formulation of Mr Chow’s position paper which the Accused said would be the position to be applied in the ATO (T392; Exhibit C41). Thereafter, the Accused promoted a Draft Public Ruling to that effect which was to apply to all EBAs. Notwithstanding that process, the Crown submitted that the Accused continued to use his position in the ATO to ensure that Mr Aivaliotes continued to issue favourable rulings to the PIC schemes without requiring fringe benefits tax to be paid. In this way, the Crown submitted that the dishonesty in his conflict of interest between his role as part of the PIC group selling the scheme and his role in the ATO, directly related to his capacity to ensure that Mr Aivaliotes continued to issue favourable rulings to the PIC schemes regardless of the policy which was otherwise being advocated by the Accused through the agency of Mr Chow. In this way, the Crown submitted that the acts of the accused were capable of constituting dishonest means for the purpose of the first count. 224 The third component relied upon by the Crown is related to the second. The Crown submits that the evidence revealed that the Accused, while encouraging Mr Aivaliotes to issue favourable rulings to the PIC schemes, had Mr Chow intervene in applications for similar schemes by other promoters in order to ensure that the officers processing the applications applied the policy approved by the Accused and issued unfavourable rulings requiring fringe benefits tax to be paid in relation to those schemes. According to the Crown, this aspect of the evidence demonstrates the dishonest character of the conduct of the Accused in using his position in the ATO to protect the interests of the PIC schemes by frustrating the opposition. Had ATO officers known that the Accused had an involvement in an opposition scheme, the Crown submitted that they may well have queried why the PIC scheme received favourable rulings when they were being asked to issue unfavourable rulings to the opposition. 225 With respect to the fourth and fifth components, the Crown pointed to evidence of the actions of the Accused in concealing the number of rulings issued in favour of the PIC schemes and in deceiving any officers who sought that information. It was submitted that these were further acts of dishonest conflict of interest which were intended to contribute to the continuation of the issue of the rulings. The ATO had a system of peer review which was thwarted by the actions of the Accused in concealing the rulings. The only officer who was aware of the rulings being issued in favour of the PIC schemes was Mr Aivaliotes.
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null
nsw_caselaw:549fd55a3004262463bf14df:9
nsw_caselaw:549fd55a3004262463bf14df
[3] The answering of each of the foregoing four questions does not depend upon any discretionary judgment, still less any merely intuitive response. It depends upon the reaching of a rational conclusion drawn from facts admitted or proved. [4] A particular ruling that some tendered piece of evidence either is, or is not, required by the operation of s 137 of the Evidence Act to be excluded can be re-visited by the trial Judge at any time until the Crown and the accused have finally closed their respective cases. [5] Thereafter, when the jury has returned a verdict, the particular evidentiary ruling is final as between the Crown and the accused for as long as the verdict remains on foot. [6] Should the verdict be set aside on appeal, then as Batt JA put the point in Edwards (at 356): ‘the whole slate ....... (is) .......wiped clean’. One consequence of that will be that in the event of a re-trial, the Judge presiding at the re-trial will not be bound to adopt the ruling given in the earlier trial, for the issues of law and of fact determined in the earlier trial in connection with the ruling will be at large, the verdict which previously gave them finality having no continuing legal effect. In my opinion the same result must follow in a case where the jury at the earlier trial did not reach a verdict at all. [7] The proposition [5] above is subject to the qualification that in any subsequent trial of the particular accused, the evidentiary ruling will not bind the subsequent trial Judge: (a) If it is shown that the ruling was in some way tainted by fraud; or (b) If it is shown that there is fresh evidence, the acceptance of which will change the findings fundamental to the earlier ruling. 75 As has been earlier noted, Moore DCJ proceeded upon the basis of two stated criteria. 76 As to the criterion stated in paragraph 27(b) of his Honour's reasons, I would respectfully agree in general with what is said by his Honour, but subject to two matters: 1. The reference to a ‘discretion’ is, in my respectful opinion, misconceived in a case where it is the proper application of s 137 of the Evidence Act that is in point; and 2. The notion of ‘pay (ing) full deference’ to the earlier ruling is ambiguous. If his Honour meant to say ‘should follow’, then I would agree with the principle stated in paragraph 27(b) as thus understood. 77 As to the criterion stated in paragraph 27(a) of his Honour's reasons, I respectfully disagree with his Honour to the extent necessary in order to maintain the propositions numbered 1 through 7 as previously herein stated. Even if the Judge in the relevant subsequent trial thinks that the ruling in the relevant earlier trial is ‘clearly wrong’, I think that the better view is that the earlier ruling should be, nevertheless, followed if there is no proper basis for distinguishing it; if the earlier trial has resulted in a verdict that has not been set aside on appeal ; and if, therefore, a refusal to follow the earlier ruling would have the practical result described by Brennan J in Rogers as that of ‘(promoting) the notion that a criminal trial is, in significant respects, a lottery’. " (emphasis added) The effect of the underlined words at 336 [77] attracted submissions before me. 37 It was common ground before me that the decision in R v GK meant that I was not bound to follow the decisions of Sully J at the first trial. Controversy arose, however, as to the role to be played by the decisions of Sully J in my decision making. Attention was focused upon paragraphs 76 and 77 in Sully J’s judgment. At that point, his Honour addressed directly the approach of Moore DCJ at first instance. The extract from the judgment of Moore DCJ, to which Sully J referred, is set out above in paragraph 33. For present purposes, the following observations are pertinent:
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nsw_caselaw:549fd55a3004262463bf14df:3
nsw_caselaw:549fd55a3004262463bf14df
OF NEW SOUTH WALES COMMON LAW DIVISION CRIMINAL LIST Johnson J 8 August 2006 2002/93 Regina v Nikytas Nicholas Petroulias (No. 1) JUDGMENT (on pre-trial applications for permanent stay of all counts on Indictment and to quash first count on Indictment) 1 JOHNSON J: The Accused, Nikytas Nicholas Petroulias, has made a number of applications in advance of his trial upon the following counts: (a) Count 1 - Between about 1 September 1997 and 27 February 1999, Nikytas Nicholas Petroulias did defraud the Commonwealth, in that while an officer of the Australian Taxation Office, he did put the revenue of the Commonwealth at risk by causing Private Binding Rulings and Advance Opinions to issue to taxpayers, by dishonest means (s. 29D Crimes Act 1914 (Cth) - maximum penalty - 10 years’ imprisonment); (b) Count 2 - Between about October 1997 and February 1999 at Sydney, New South Wales and elsewhere, Nikytas Nicholas Petroulias, then a Commonwealth officer with the Australian Taxation Office, did agree to receive a benefit for himself, namely money, on an understanding that the exercise by him of his duty as a Commonwealth officer would be affected (s. 73 Crimes Act 1914 (Cth) - maximum penalty - two years’ imprisonment); (c) Count 3 - Between about June 1998 and April 1999 at Sydney, New South Wales, Nikytas Nicholas Petroulias, then being a Commonwealth officer with the Australian Taxation Office, did publish to Richard Llewellyn Morgan, a person to whom he was not authorised to publish, documents which came into his possession by virtue of him being a Commonwealth officer, and which it was his duty not to disclose (s. 70 Crimes Act 1914 (Cth) - maximum penalty - two years’ imprisonment). The Present Applications 2 The Accused has applied for the following orders: (a) that the first count be quashed pursuant to s.17 Criminal Procedure Act 1986 upon the basis that the Crown case as particularised, and the evidence to be presented in proof of the Crown case, is not sufficient to make out the elements of the offence charged; (b) that the first count be stayed permanently as an abuse of process of the Court upon the basis that it is foredoomed to fail; (c) that the first count be quashed pursuant to s.17 Criminal Procedure Act 1986 upon the basis that it is bad for duplicity; (d) in addition to the grounds for a permanent stay of the first count referred to in paragraph (b) above, an order that all counts on the indictment be stayed permanently as an abuse of process of the Court upon a number of bases which will be referred to later in this judgment. History of Proceedings 3 The criminal proceedings brought against the Accused have been the subject of considerable judicial attention since his arrest and charging in March 2000. Following committal proceedings which extended over 36 days between November 2001 and July 2002, the Accused challenged the decision committing him for trial with respect to each of the three counts: Petroulias v Wills (2002) 174 FLR 258; Petroulias v Wills (No. 2) (2003) 138 A Crim R 182. Simpson J allowed an appeal by the Accused with respect to the first count under s.29D Crimes Act 1914 (Cth) but dismissed an appeal with respect to the second and third counts under s.73 and s.70 respectively of that Act. 4 Thereafter, appellate consideration has been confined to the first count under s.29D of the Act. An appeal by the prosecutor against Simpson J’s order upholding the appeal on the first count was successful and the Court of Appeal, on 3 October 2003, set aside her Honour’s orders: Wills v Petroulias (2003) 58 NSWLR 598. Thereafter, the Accused advanced further arguments in the Court of Appeal concerning the first count which led to the Court varying its judgment and orders on 22 December 2003: Wills v Petroulias (No. 2) (2003) 58 NSWLR 618.
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null
nsw_caselaw:549fd55a3004262463bf14df:6
nsw_caselaw:549fd55a3004262463bf14df
the Court of Criminal Appeal allowed an appeal from this decision and set aside the order permanently staying the first count - the Accused has advanced arguments before me, a number of which are based upon the judgment of the Court of Criminal Appeal, submitting once again that the first count is foredoomed to fail; (c) in judgments delivered on 27 June 2005 and 19 July 2005, Sully J refused an application for a directed verdict of acquittal on the first count - the Accused has repeated the arguments made in support of those applications before me on the application that the first count be quashed or stayed permanently upon the basis that it is foredoomed to fail; (d) in the judgment of 21 February 2005, Sully J (although permanently staying the first count) declined to stay that count upon the basis of abuse of process by reference to the unmanageability of the Crown case (pages 13-16), unfairness said to arise from the apparent intention of the Crown not to call certain witnesses (pages 17-19), and delay (pages 26-27) - the Accused has repeated these arguments in support of the application that all counts on the indictment should be stayed permanently as an abuse or process. 22 In circumstances where Sully J and the Court of Criminal Appeal had delivered judgments on these matters in the context of the first trial, I sought submissions from senior counsel for the Crown and the Accused concerning the role of those judgments in the determination of the applications before me. 23 It was common ground, of course, that I was bound by the ratio decidendi of the judgment of the Court of Criminal Appeal with respect to the element of deprivation in the first count and the refusal of a permanent stay on that count. The debate concerned what precisely had been decided by the Court of Criminal Appeal in that respect. 24 Sully J had twice rejected applications for a directed verdict of acquittal on the first count at the first trial. His Honour’s first judgment (27 June 2005) was given following argument at the close of the Crown case. The second judgment (19 July 2005) was delivered following an application made after closing addresses to the jury and before the commencement of the summing up. In substance, the same arguments were advanced to me on the foredoomed to fail ground as were made to and rejected by Sully J in these judgments. The submissions to Sully J, of course, referred in some detail to the evidence which had been adduced in the Crown case at the trial. The submissions before me referred to the same evidence in support of the foredoomed to fail ground. 25 The submissions made to Sully J arose in the context of applications for a verdict by direction with respect to the first count, an application to be determined by reference to the principles in Doney v The Queen (1990) 171 CLR 207 at 214-215. 26 The arguments before me were made in support of an application that the first count be quashed or stayed on the basis that it was foredoomed to fail: Walton v Gardiner (1992-1993) 177 CLR 378 at 393, 411; R v Smith (1995) 1 VR 10; R v Tolmie (NSW Court of Criminal Appeal, 7 December 1994, unreported at 6-7); R v Jasper (2003) 139 A Crim R 329 at 335. To succeed in an application for a permanent stay on this basis, it is necessary for the accused to show that the proceedings “can be clearly seen to be foredoomed to fail” (Walton v Gardiner at 393) or that they will “inevitably and manifestly fail” (Walton v Gardiner at 411). A likelihood that the prosecution will fail is not the same thing as saying that it is doomed to failure: Tolmie at 7. The threshold to be met on such an application is high given the exceptional nature of the judicial power which is sought to be engaged: Jasper at 335.
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null
nsw_caselaw:549fd55a3004262463bf14df:1
nsw_caselaw:549fd55a3004262463bf14df
Essenbourne Pty Limited v Commissioner of Taxation (2002) 51 ATR 629 Walstern Pty Limited v Commissioner of Taxation (2003) 138 FCR 1 Spotlight Stores Pty Limited v Commissioner of Taxation (2004) 55 ATR 745 Pridecraft Pty Limited v Commissioner of Taxation (2004) 213 ALR 450 Black v The Queen (1993) 179 CLR 44 M v The Queen (1994) 181 CLR 487 MFA v The Queen (2002) 213 CLR 606 Royall v The Queen (1991) 172 CLR 378 R v Franklin (2001) 3 VR 9 Pinkstone v The Queen (2004) 219 CLR 444 R v Iannelli (2003) 56 NSWLR 247 Peters v The Queen (1998) 192 CLR 493 Spies v The Queen (2000) 201 CLR 603 R v Cohen, UK Court of Appeal, 28 July 1992, unreported) Whitehorn v The Queen (1983) 152 CLR 657 Richardson v The Queen (1974) 131 CLR 116 The Queen v Apostilides (1984) 154 CLR 563 R v Kneebone (1999) 47 NSWLR 450 Houston v Crannage (1989) 42 A Crim 446 Barton v The Queen (1980) 147 CLR 75 R v Harry; Ex parte Eastway (1985) 39 SASR 203 Jones v Dunkel (1959) 101 CLR 298 Dyers v The Queen (2002) 210 CLR 285 R v Hamzy (1994) 74 A Crim R 41 R v Moussad (1999) 152 FLR 373 Director of Public Prosecutions v Merriman (1973) AC 584 R v Johnson (2001) 125 A Crim R 564 R v Wilson and Grimwade (1995) 1 VR 163 Lustre Hosiery Ltd v York (1935) 54 CLR 134 Anglim and Cooke v Thomas (1974) VR 363 Director of Public Prosecutions v Parsons (1993) 1 VR 1 R v R (1989) 44 A Crim R 404 Walsh v Tattersall (1996) 188 CLR 77 Carcosa Pty Limited v Czerwaniw (1977) 93 A Crim R 287 Pitcher v Langford (1991) 23 NSWLR 142 PARTIES : Regina (Commonwealth) (Crown) Nikytas Nicholas Petroulias (Accused) FILE NUMBER(S) : SC 2002/93 COUNSEL : Mr P Hastings QC; Mr C Hoy (Crown) Mr N Clelland SC; Mr G Livermore (Accused) SOLICITORS : Commonwealth Director of Public Prosecutions (Crown) Coadys (Accused) LOWER COURT DATE OF DECISION : --- LOWER COURT MEDIUM NEUTRAL CITATION : --- i Index Paragraph(s) The Present Applications 2 History of Proceedings 3-16 Evidence on the Present Pre-Trial Applications 17-20 The Role of the Judgments of Sully J from the First Trial 21-54 General Principles of Abuse of Process 55-70 Principles Concerning the “Foredoomed to Fail” Ground 71-85 The Crown Case 86-91 The First Count - Section 29D Crimes Act 1914 (Cth) 92-95 · A Defence Concession 96-99
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null
nsw_caselaw:549fd55a3004262463bf14df:72
nsw_caselaw:549fd55a3004262463bf14df
However, the evidence was of the same broad type - documents prepared by ATO officers, including the Accused, which bore on the question of an arguable case that the rulings were wrong. In disposing of an earlier ground in support of the present application, I have held that the evidence adduced by the Crown at the first trial, supported a prima facie case on the element of deprivation. 271 I am not satisfied that the developing history of the s.29D count since 2000, and the manner in which the Crown approached this issue at the first trial, provides a foundation for the grant of relief presently sought by the Accused. The Submission that the Number, Variety, Extent and Duration of the Proceedings Renders Their Continuation Oppressive and Vexatious 272 Following the arrest and charging of the Accused in March 2000, the case proceeded by way of committal proceedings and a trial before Sully J and a jury at which the jury could not agree. There have been a number of appeals brought by the Accused or the Crown between 2002 and 2005. There has been a measure of success on both sides in those appeals. The ultimate appellate determination of the Court of Criminal Appeal in March 2005 was that the first count ought be allowed to proceed to trial. 273 Between February and August 2005, a number of pre-trial applications were made by the accused followed by a trial by jury during which a number of additional objections to evidence were made by the Accused. Sully J was called upon to deliver a significant number of judgments prior to and during the trial. 274 The jury was unable to agree at the first trial and the Crown has determined, in the exercise of discretion (Island Maritime Limited v Filipowski at [81]; R v Smith at 28-29, 41-42) to proceed by way of retrial on the same indictment. 275 Mason P observed in R v Petroulias at 690 [118] that the complexity of a trial cannot be the touchstone of whether the trial takes place at all. The Victorian Court of Criminal Appeal has observed that juries can deal with long and complex trials and have been known to do so when given appropriate opportunity and assistance: R v Wilson and Grimwade (1995) 1 VR 163 at 176. 276 I am not satisfied that the number, variety, extent and duration of the proceedings against the Accused render the continuation of these prosecutions oppressive and vexatious. It might be expected that the conduct of the first trial will assist the parties in preparation for a retrial. The Crown and the Accused ought be in a better position to appreciate the significance of evidence in the context of the overall case. The Submission that the Accused Lost a Substantial Prospect of Acquittal Because of Erroneous Directions at First Trial 277 In the course of considering the submissions of the Accused concerning the elements of deprivation, causation and dishonest means, I adverted to submissions asserting that Sully J had erred in various respects in directions given to the jury. 278 I have concluded that there was evidence at the first trial to support a prima facie case with respect to each of these elements of the first count. 279 The principal submission of the Accused under this heading was that a substantial prospect of acquittal was lost because of directions given, or not given, at the trial in response to Questions 5 and 6 asked by the jury on 9 August 2005 which related to the element of deprivation. For reasons given earlier in this judgment, I am not satisfied that the approach taken by his Honour with respect to those questions was erroneous. The questions asked by the jury were not the issues which the Crown was required to establish in support of the element of deprivation on the first count.
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null
nsw_caselaw:549fd55a3004262463bf14df:49
nsw_caselaw:549fd55a3004262463bf14df
I should pause and say this to you for the sake of fairness and completion. He had given evidence that the draft tax ruling, in his view, as somebody experienced in FBT matters, was - my paraphrase - not a happy document because it was too narrowly focused. He said that he felt that simply to concentrate in the way that he thought the draft ruling did on the narrow associate issue - which you will remember was Mr Chow's basic position also - really did not engage, not so much matters of theory as matters of practice, the matters of practice, practicality, let me rather say, to which he had referred in those passages I read to you a moment ago from cross-examination where he was saying, in effect, ‘It's important for FBT not to be lost in a fog of theory because it's the kind of tax which, depending upon where and how and when in the relevant chain you impose it, can cause more problems than it solves. ’ So you need to be careful about the practicable and the practical aspects of it as well as the mere theory. That is my paraphrase, but that, I think, is a fair summary of what he was trying to say; and it was in that setting that he said that he thought you could really say of the draft ruling that it was holding up something in the nature of a stop sign to the relevant market and saying, ‘Just don't become too enthusiastic about these things without remembering that we are looking at them and that there are real problems in particular about FBT.’ So, against that background, he was asked that question that I just read to you, and he was asked: ‘But then you went on to say that your point is that that could have been done in a number of other ways. Do you remember saying that?’ He said he did. He was asked what he meant by that, and he said: ‘Well, I just felt that something more comprehensive in terms of indicating where the Commissioner had problems other than the associate test, indicating a desire to argue deductibility, to test the deductibility, basically saying to the scheme promoters that ‘If you don't already have a private ruling, you're not going to get one. ’ That sort of thing would have been a more holistic policy and would have been a clearer indication that we were actually going to argue their particular fact circumstances." He continued: ‘By concentrating on ‘associate’ I felt it caused us difficulties in other places and interpretation difficulties. We had a long history in FBT of, I guess, trying to avoid the problems we had in 1995. That was what I was told, anyway. We really didn't want to tax the contribution under FBT except where we had to, if you like, because it caused us other difficulties in other areas. He was asked: ‘When you say 'we', to whom are you referring?’’ He said: ‘The cell-type approach. I mean, the law is the law, but, as you can appreciate, when you get into some of these areas, there are alternate taxing points and the Commissioner sometimes has to pick between alternate arguments and go with the one that produces the closest outcome that the law intends. So there is some scope to interpret it.’ That, of course, is not by any means the whole of Mr Forsyth's evidence, and, as I told you when I began the summing-up, if in due course, you want the whole of it read back to you, it is yours for the asking, but on this question of FBT, I think those excerpts put - I hope, at any rate, that they put - with fair comprehensiveness what, in the end, his position seems to have been on that issue. That is as much as I want to say to you on that particular topic.” 149 On 26 July 2005, the jury retired to consider the verdicts (SU344). Response to Certain Jury Questions 150 On 8 August 2005, after several days’ deliberation, a note was received from the jury in the following terms (TA47):
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null
nsw_caselaw:549fd55a3004262463bf14df:37
nsw_caselaw:549fd55a3004262463bf14df
It is, I believe, quite clear that all three Judges in the Court of Criminal Appeal thought that the two particulars could not stand individually and independently because any attempt so to stand would introduce an impermissible ambiguity into the true nature and scope of the offence that has actually been charged. That potential problem was resolved by the Court's holding that the two particulars must be read together; and that when so read they particularise only one relevant type of defrauding, namely, what has come to be termed an ‘imperilment’ type of case. A second submission which was put for the accused drew attention to a number of expressions in the joint judgment of the Chief Justice and Hunt AJA, of which a representative example occurs as followed in [12]: ‘[12] The arguable case to be put by the Commission must first demonstrate the possibility that the Commissioner would win a case in which he was allowed to dispute the private rulings. Is the case which the Commissioner wishes to put one which is capable of success ?’ (emphasis added).’ It was submitted that the italicised sentence was ‘presupposing proof that there was a position taken and wishing to be put by the Commissioner’. It was submitted that there is no evidence in hand that is capable of affording that proof. It seems to me that the answer to that submission is provided by Mason P in [89] of his Honour's judgment: ‘89 For the purpose of the s29D charge now proffered, the search is for a way of determining whether there was anything of value in the Commissioner's rights to assess and recover tax as affected by the rulings and the way rulings operate in law. If the true legal position at the time was that nothing touching the revenue was lost by issuing the rulings then the charge is not capable of being made out and should be withdrawn from the jury. This would be so whether or not Particular N(v) were included.’ Turning from those particular submissions to the broader question of the capacity of the evidence which is now in hand to establish - if accepted by the jury - the element of deprivation, I propose to proceed upon the basis of the process of reasoning of Mason P as explained in [106]-[113], inclusive, of his Honour's judgment: [Sully J here set out paragraphs [106-[113] in the judgment of Mason P which are set out above] Mason P was assessing, of course, evidence which had been foreshadowed rather than actually adduced, but it seems to me that the evidence now in hand is not materially different from the foreshadowed evidence which Mason P discussed. I see nothing in the joint judgment that is incompatible with the cited portion of Mason P's reasoning. That being so, I am of the opinion that there is a case fit to go to the jury on the deprivation element of the charge.’ Sully J’s Judgment of 19 July 2005 139 Senior counsel for the Crown and the Accused then addressed the jury over a number of days. On 15 July 2005, Mr Clelland SC made a further application for a directed verdict of acquittal on the first count. On 19 July 2005, Sully J refused the application. The application related solely to the element of deprivation. Sully J adverted to the decision of the Court of Criminal Appeal and said at paragraphs 28-29: “28 The principal issue in Petroulias was whether the practical implementation of that approach was one entailing the resolution by the trial Judge of a question of law; or one entailing the resolution by the jury of a question of fact. The latter alternative is the ratio, or at the very least a ratio, of the decision. No more need now be said, therefore, upon that topic. 29 The logical issue that thereupon arose, namely how a jury is to be directed in such a type of case, received close attention in the majority judgment. I take myself to be bound by the following propositions, each of which I take from the discussion that is found in paragraphs [16] — [20] of the joint judgment:
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null
nsw_caselaw:549fd55a3004262463bf14df:12
nsw_caselaw:549fd55a3004262463bf14df
In Segal v Waverley Council (2005) 64 NSWLR 177, the Court of Appeal (Tobias JA, Beazley and Basten JJA agreeing) adverted at 193 to the practice, as a matter of judicial comity, of a judge at first instance following an earlier decision of a judge of co-ordinate jurisdiction. In this respect, Tobias JA said at 193 [57]: “The primary judge stated the relevant principle in [16] of his judgment. The most cited statement of the principle is that of Holland J in Michael Realty Pty Limited v Carr [1975] 2 NSWLR 812 where at 820 his Honour said (omitting citations): ‘I do not think that I am relieved by the decision of Needham J of my duty to bring my own judgment to bear on the point in question. There is no rule of law which binds a judge to abide by the decision of another judge of co-ordinate jurisdiction, but a judge of first instance will, as a matter of judicial comity, usually follow the decision of another judge of first instance in the same jurisdiction, unless convinced that the judgment was wrong’.” 45 The principle of judicial comity is well recognised and is applied as between judges of the same or co-ordinate jurisdictions. The relevant authorities are summarised by Collier J in Indooroopilly Children’s Services (Qld) Pty Limited v Commissioner of Taxation (2006) FCA 734 at paragraphs 49, 52, a decision upon which the Accused relies for other purposes in the present applications. In Valentine v Eid (1992) 27 NSWLR 615, Grove J held that the Local Court is not bound by a decision of the District Court in criminal proceedings, but that the principle of comity applies. His Honour said at 622: “I emphasise that I am not suggesting that a Local Court may not be considerably advantaged by reference to a relevant judgment of the District Court and I would expect that, except on rare occasions, such judgment would be compellingly persuasive and I hold no more than that a binding precedent has not been created. I refer to Lord Goddard's statement of principle in Police Authority for Huddersfield v Watson (1947) KB 842 that a judge of first instance of the High Court will follow a decision of another judge of first instance, unless he is convinced that that judgment is wrong, as a matter of judicial comity— a principle now extended to apply to divisional courts in Britain: R v Greater Manchester Coroner; Ex Parte Tal [1985] QB 67 at 81. As comity is required between courts of equal rank, co-ordinate decision must also exist between the Local Court and District Court and a magistrate should not depart from following any decision of the District Court unless after earnest consideration and for good reason he or she became convinced that the decision was wrong.” 46 The Crown referred to the statement of Mason P, with respect to civil interlocutory applications, in Nominal Defendant v Manning (2000) 50 NSWLR 139 at 142 [10]: “A long line of authority attests to the practice of courts hearing interlocutory applications on matters of substance declining to allow a second contested run at the target where the only change of circumstances is an applicant coming forward with new evidence. …” 47 The Crown submitted that, in effect, I was being asked to sit on appeal from a number of the decisions of Sully J given at the first trial and, in a sense, from the decision of the Court of Criminal Appeal of 11 March 2005. Further, it was submitted that Sully J had the advantage of considering the various applications which were the subject of judgments during the trial having heard the evidence unfold over several months, and with an understanding of the totality of the evidence adduced at the trial. The Crown submitted that this was an advantage which I did not have at the hearing of the present applications. According to this submission, the Crown’s construction of the decision in R v GK supported an approach whereby a confined test might be adopted to the resolution of the present applications.
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nsw_caselaw:549fd55a3004262463bf14df:46
nsw_caselaw:549fd55a3004262463bf14df
The Crown argument, as I have followed it, is that really you do not have to go much, if any, further than that very document in order to see established out of the accused's own mouth an arguable case, in the sense that we discussed on Friday, on each of the two issues of deductibility and of FBT liability. There is, of course, a defence response to that proposition to which I will come in just a moment when I have finished with the Crown material.” 147 The final piece of evidence upon which the Crown relied was an email dated 27 May 1999 from the Accused to Mr Strong (Exhibit C219). Sully J directed the jury in the following terms with respect to this document (SU206.5): “You might think when you read it that it is clear enough that it is conveying to Mr Strong advice about how he, Mr Strong, should deal with some ATO queries about certain employee benefit trust arrangements in which he, Mr Strong, had been involved. The Crown's point is that - is that it is clear on the face of the document that the purpose of the accused so advising Mr Strong was, in effect, to attempt to close off arguments seen as being reasonably open to the Commissioner on both of the issues of FBT and deductibility. That is a matter for you to assess as the judges of the facts when you have a look at the whole of that document. It's not easy to read because a lot of it is manuscript corrections, so you will need to take your time and read it carefully, but then it will be a matter for you to judge whether you think that is or is not a fair inference to draw as to the purport of the document. So far as concerns the accused's own involvement in that emerging debate within the ATO about these two issues, I have already spoken about his participation and his attitude as expressed in the relevant minutes in the Moonee Ponds group. I have spoken already about his endorsement of the Chow position. I have spoken about his involvement with Mr Ackhurst. You must keep in mind, or you should keep in mind also the matters to which I took you on Friday when we were looking at those half dozen cases, of which the Ackhurst matter was one, in which in connection with various private binding rulings applications the accused had taken and notified a particular point of view on either or both of the two relevant issues. So drawing all of that together, the Crown case, as I understand it, really comes down to this: that if you look at what the accused was saying and doing in connection with the developing point of view about those two issues, and if you take into account that he was not simply some administrative assistant but was an official of standing and influence and learning and repute in the relevant parts of the ATO, then the overwhelming inference, so the Crown would argue, is that what he says in his various communications, but in particular in that email to Mr Ackhurst, has to be taken as a serious expression of views seriously entertained by him. That if that is the inference that you are content to draw, then you would be justified, on the Crown argument, in concluding that you had there in black and white a case on each of the two controversial issues, being a case that could satisfy the description that we discussed last week of an arguable case; that is to say, the case moving forward from a stated premises by a series of logical stages to a rational conclusion. ” 148 Sully J reminded the jury of the defence response to the Crown case with respect to the deprivation element (SU208.5): “The defence response to a Crown case structured in that way takes a number of different approaches. The first is to emphasise consistently that it is important to be careful not to jump too readily to the conclusion that arrangements of the kind which were being discussed in particular in those half dozen or so matters, of which Mr Ackhurst was one, are necessarily the same kinds of matters as are reflected in the Productivity Incentive applications.
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null
nsw_caselaw:549fd55a3004262463bf14df:69
nsw_caselaw:549fd55a3004262463bf14df
This is so even where evidence has been adduced by the Crown at a trial and the Crown has indicated an intention to rely upon the same body of evidence at a retrial. 253 It is the primary responsibility of the Commonwealth Director of Public Prosecutions to exercise prosecutorial discretion and to determine whether a retrial should proceed: Island Maritime v Filipowski at [81]; R v Smith at 28-29. Of course, it remains open to the Court to exercise powers to control the processes of the Court. However, absent a successful foredoomed to fail argument, the processes of the Court which apply are the ordinary trial processes which exist for the determination of criminal proceedings against a citizen. This involves trial by jury: s. 131 Criminal Procedure Act 1986. The power of the Court to prevent abuse of process does not provide a basis for enlarging the powers of a trial judge at the expense of the traditional jury function: Doney v The Queen at 215; R v R (1989) 44 A Crim R 404 at 414-415. 254 Given the breadth of factors which may be relevant to abuse of process (Batistatos at [9]), it may be that the strength or otherwise of the Crown case may be taken into account, in conjunction with other factors, in support of a permanent stay application. 255 It is sufficient for the moment for me to record my conclusion that I am satisfied that a permanent stay should not be granted based upon the suggested insufficiency of evidence to support the first count on the indictment. The Submission that No Reasonable Jury Could Accept the Evidence of Mr Morgan 256 There can be no doubt that Mr Morgan is a critical witness in the Crown case. In the course of the judgment of 27 June 2005 refusing the application for a directed verdict of acquittal on the first count, Sully J observed with respect to the role of Mr Morgan in the Crown case (page 17.4): “Learned Queen’s Counsel leading for the Crown opened to the jury that the Crown case was largely ‘a documents case’, and that the evidence of Mr Morgan was ‘the icing on the cake’. Where the particulars A and B [concerning the alleged arrangements] are concerned, I think that Mr Morgan’s evidence constitutes much more of the substance of the cake than its icing.” 257 Sully J characterised Mr Morgan in summing up to the jury as “a cardinal witness in the Crown case” (SU45.2): “Mr Morgan, I suggest to you, is a cardinal witness in the Crown case. And he is. He’s cardinal, because it is his evidence, basically, which supports the proposition that there were, to begin with, concluded arrangements of the kind that he described and that caught up himself, Panos and the accused, with those other variations bringing in Gray, Strong and McLaren. His evidence, really, is the evidence that has to be accepted in order to support that conclusion.” 258 Sully J made clear to the jury that acceptance of the evidence of Mr Morgan concerning the arrangement was critical to the Crown case on the first count (SU56.2): “I think it would be fair to say that most of the evidence in the trial touching upon this particular question has concentrated upon the arrangement (a); that is to say, the arrangement which is said to have caught up the accused, Mr Panos and Mr Morgan. In a sense that is logical enough because Mr Morgan was actually called to give evidence; and so, I suppose, it was natural that things would tend to concentrate on that particular alleged arrangement. I think it would be fair to say that if you are not prepared to accept Mr Morgan's evidence as to the alleged arrangement catching up himself, Mr Panos and the accused, there is no evidence, at least none to which I can point you, which would induce you to accept that the other arrangements had been concluded;
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null
nsw_caselaw:549fd55a3004262463bf14df:23
nsw_caselaw:549fd55a3004262463bf14df
Secondly, his dishonesty was shown by applying a policy which the accused was said to regard as being contrary as to what he thought the policy should be, that is, the ATO policy in relation to the applicability of fringe benefits tax at the time of contribution. Thirdly, it was said he acted dishonestly because he discriminated between the Productivity Incentive Group and other promoters who sought rulings that was said to be other arrangements. Fourthly, it was said that he concealed what he was doing by ensuring that Mr Aivaliotes did not put the rulings on the internal system and in that way, he was able to limit the knowledge within the Tax Office of the rulings being issued by Mr Aivaliotes. Finally, that Mr Petroulias was deceptive when it came to others trying to find out precisely how many rulings had issued. There was, as a result of a review being conducted by Mr Petroulias's successor, an internal enquiry of sorts which, from time to time, sought to establish just what rulings had issued. The Crown case was that Mr Petroulias had been deceptive in his dealings with those investigators just as to how many rulings that issued. The Crown said, although there was some overlap in those issues and a number of facts that are common between them, particularly in relation to what the accused regarded the ATO policy as that was essentially the way they put it. We would say in no way did those elements or suggested categories of dishonest conduct go to the issues of deprivation, causation and, relevantly, as I will come to, the concept of dishonest means. HIS HONOUR: The concession, which was made at page 61 of the transcript of this hearing, involves a concession that there was evidence of those matters which you have just articulated as being the Crown case with respect to dishonesty? CLELLAND: Yes.” 98 The Accused submits that the first count is foredoomed to fail with respect to the elements of deprivation, causation and unlawful means. 99 The Crown submits, in my view correctly, that it is necessary to consider the submissions advanced by the Accused against the background of all the evidence adduced in the Crown case. It would be erroneous to confine attention in an artificial way to limited categories of evidence to determine whether there is an absence of evidence with respect to particular elements of the offence. That said, the process of examination of the totality of the evidence adduced by the Crown is to be undertaken with the view to an assessment whether, for the limited purpose of the present applications, there is evidence with respect to each of the three identified elements. The Element of Deprivation 100 It is appropriate to commence with the element of deprivation. It is this element which has been subjected to the intense level of judicial scrutiny referred to earlier in this judgment. To understand the arguments of the Accused, it is necessary to refer to statements made in the judgments of the Court of Appeal and the Court of Criminal Appeal. 101 The appeal which came before Simpson J in 2002 related to the order of committal for trial. At that time, the first count was worded differently to its present form. It is not necessary, for the purpose of this judgment, to set out the wording of earlier versions of the first count. 102 On 17 December 2002, Kiefel J gave judgment in Essenbourne Pty Limited v Commissioner of Taxation (2002) 51 ATR 629, a decision which bears upon both the deductibility and the goods and services tax issues in a manner which is said to be relevant to the present case. Since then, there have been a number of other decisions in the Federal Court of Australia in which Essenbourne has been followed: Walstern Pty Limited v Commissioner of Taxation (2003) 138 FCR 1 (Hill J); Spotlight Stores Pty Limited v Commissioner of Taxation (2004) 55 ATR 745 (Merkel J); Pridecraft Pty Limited v Commissioner of Taxation (2004) 213 ALR 450 (Ryan, Sackville and Sundberg JJ) and Indooroopilly Children’s Services (Qld) Pty Limited v Commissioner of Taxation (Collier J).
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null
nsw_caselaw:549fd55a3004262463bf14df:5
nsw_caselaw:549fd55a3004262463bf14df
16 On 20 July 2006, the hearing of the pre-trial applications referred to at paragraph 2 above commenced before me. Detailed written submissions had been furnished on behalf of the Accused and the Crown prior to the commencement of the hearing. Evidence on the Present Pre-Trial Applications 17 In the course of this judgment, I will refer from time to time to the transcript of evidence and the exhibits in the first trial. For ease of reference, I will use the following descriptions in referring to transcripts and exhibits: (a) with respect to the pre-trial hearing before Sully J between 7 February and 26 April 2005 (1,404 pages) - for example (PT28, 2005); (b) with respect to the trial before Sully J and a jury which commenced on 26 April 2005 and continued until 21 July 2005 (3,190 pages), after which the trial transcript was freshly paginated - for example (T1476); (c) with respect to the freshly paginated trial transcript which commenced on 21 July 2005 and continued until the discharge of the jury on 16 August 2005 (111 pages) - for example (TA58); (d) with respect to the summing up of Sully J which commenced on 21 July and continued until 26 July 2005 (351 pages) - for example (SU143); (e) all exhibits from the first trial will retain their exhibit numbers, with Crown exhibits commencing with Exhibit C and defence exhibits commencing with Exhibit D; (f) the written directions provided to the jury by Sully J in the course of the summing up (MFI105) will continue to be so identified; (g) the transcript of the pre-trial hearing which commenced before me on 20 July 2006 (412 pages) - for example (PT168, 2006). 18 The Crown and the Accused agreed that the pre-trial applications should be heard together (PT16-17, 2006). Given a degree of overlap between the various applications, there was no useful purpose in the separate determination of any of the applications. Accordingly, I proceed in this judgment to determine each of the pre-trial applications, the hearing of which commenced on 20 July 2006. 19 The arguments advanced on behalf of the Accused and the responses of the Crown referred to evidence given at the trial before Sully J and a jury between 26 April and 16 August 2005. The Crown indicated an intention to proceed at a future trial on the same indictment (PT1-2, 2006) and to seek to adduce the same evidence led in the Crown case at the first trial (PT375-376, 2006). Accordingly, the transcript and exhibits of the first trial were placed before me on the hearing of the present applications, together with the judgments of Sully J concerning applications made before and during the trial and his Honour’s summing up to the jury. The argument before me proceeded upon the basis that it was that material which was relevant to the present applications. No additional evidence was tendered before me by the Accused or the Crown on the present pre-trial applications. 20 For ease of reference, a schedule identifying the trial exhibits to which I was taken by Mr Clelland SC during argument on these applications is Exhibit D1 before me (PT411, 2006). Schedules listing the exhibits to which I was taken by the Crown during submissions is Exhibit C1 on these applications (PT411, 2006). The written submissions of the Accused in support of the present applications (MFI1) and the Crown submissions in reply (MFI2) were likewise given specific identifiers for the purpose of these applications. The Role of the Judgments of Sully J from the First Trial 21 Some, but not all, of the issues raised by the present pre-trial applications were the subject of judgments by Sully J and the Court of Criminal Appeal prior to and during the first trial. In particular: (a) in the judgment of 21 February 2005 (pages 11-13), Sully J rejected an argument that the first count was bad for duplicity - the same argument has been repeated before me in the present hearing; (b) in the judgment of 21 February 2005 (pages 27-42), Sully J permanently stayed the first count on the basis that it was foredoomed to fail - on 11 March 2005,
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null
nsw_caselaw:549fd55a3004262463bf14df:67
nsw_caselaw:549fd55a3004262463bf14df
(a) the Crown case as particularised, and the evidence to be led in proof of its case, is not sufficient to make out the elements of the offence charged in the first count - the Accused relies upon the arguments advanced on the foredoomed to fail ground and submits that, even if that onerous test is not satisfied, the Crown case on the first count is so weak that it ought not be permitted to proceed to trial; (b) no reasonable jury could accept the evidence of Mr Morgan to the extent required to found a conviction in respect of both the first and second counts; (c) the conduct of the Crown in persisting to prosecute the various versions of the charge under s.29D Crimes Act 1914 (Cth) ; (d) the number, variety, extent and duration of the proceedings against the Accused make the continuation of the proceedings oppressive and vexatious; (e) the Accused lost a substantial prospect of being acquitted on the first count at the first trial because of suggested erroneous directions given to the jury with respect to the elements of deprivation, causation, dishonest means and intention; (f) the failure of the Crown at the first trial to call competent and compellable witnesses to give evidence as to relevant facts in issue; (g) the impact of the passage of time since the alleged events of 1997-1999 on the capacity to provide a fair trial, in circumstances where much of the non-documentary evidence is of conversations said to have been had with the Accused, but of which no notes were taken by the witnesses; (h) the volume and complexity of the issues and materials will result in an unmanageable and unfair trial, not only in the sense of the capacity of the jury to determine guilt or non-guilt upon evidence which “they are able as humans both to comprehend and remember” ( R v Cohen , UK Court of Appeal, 28 July 1992, unreported, page 30G - the Blue Arrow Case ), but also in the sense of the defence being unable to cope with the volume of evidence that has been marshalled by the combined resources of the ATO, the Australian Federal Police and the Commonwealth Director of Public Prosecutions. 237 Mr Clelland SC submits that all of these factors ought be taken into account for the purpose of the weighing process involving, as it does, a subjective balancing of these factors and considerations: Walton v Gardiner at 396. It is submitted that the “oppressive” arm of the abuse of process ground does not rely for its success solely on the proposition that there is no possibility of a fair trial for this Accused, although it is contended that, in all the circumstances, the Court is unable to secure a fair trial for this Accused. 238 Mr Clelland SC submits that an assessment of all the circumstances of this case demonstrates that the prosecutorial process has become an instrument of oppression against the Accused. It is submitted that the maintenance of public confidence in the administration of justice outweighs any public interest in the continuation of the proceedings. It is said that the continuation of the trial will result in “unacceptable injustice and unfairness” (Walton v Gardiner at 392) of a kind which is incurable, either by the making of rulings as to admissibility or discretionary exclusion of evidence or directions to the jury. 239 The Accused points to the history of the charges since the time of his arrest and charge in Melbourne on 24 March 2000. At that time, the Accused was charged with one count of conspiracy to defraud contrary to s.86 Crimes Act 1914 (Cth). This charge was withdrawn on 2 June 2000 and was replaced, not with a s.29D charge, but with three substantive charges under ss.30, 70 and 73(2) Crimes Act 1914 (Cth), in relation to which the Accused was returned to New South Wales under the Service and Execution of Process Act 1992 (Cth). 240 On 12 December 2000, the Accused was charged with defrauding the Commonwealth contrary to s.29D Crimes Act 1914 (Cth). Particulars of the s.29D charge were provided on 14 February 2001. Committal proceedings followed.
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null
nsw_caselaw:549fd55a3004262463bf14df:60
nsw_caselaw:549fd55a3004262463bf14df
A. Well as I'd done more and more of them and they were of the same type, having spoken with Mr Petroulias on the previous occasions, I'd look at them again. I'd look to find whether there were any differences at all and, if there were no differences, I would then proceed to use the previous model of ruling. Q. How were you able to do that? A. Electronically on my computer I could cut and paste or copy and paste into a new document. Q. There is evidence of the computer system in operation in the Tax Office at the time which had various fields or databases including the CASES reporting system. Had you used that? A. I wasn't familiar with that system. At one point I think in trying to do these first rulings I attempted to put it on to the CASES reporting system and a Miss Belinda Treatt said to me it was a very cumbersome system, and I would therefore proceed with doing it on the ordinary computer system. Q. Who was Miss Belinda Treatt? A. She was a person senior to me in the office and part of the team that I was part of. Q. So in relation to any of the rulings in the schedule from beginning to end, did you make any entries on the CASES reporting system? A. No, I didn't. Q. Did you endeavour to? A. Yes, I tried again and in this particular instance Mr Petroulias came to my work point and asked me what I was doing. He wanted me to get the rulings out quickly or to get work out very quickly, and I said I was attempting to put it on to the CRS system. Mr Petroulias said words to the effect to me of ‘Don't worry about that. It's just a waste of time. Just carry on doing the rulings’. Q. Do you remember when that was? A: I think it was quite early in the doing of these rulings. Q. There was another system known as Grapevine. Did you use that either to record what you were doing or to research what you were doing? A. No, I didn't. I wasn't familiar with the system at the time and I had also heard that it was also very hard the use and cumbersome. Q. When you produced a ruling or draft ruling, was part of that process the utilising of various precedents? A. Yes. Q. What did you do then in terms of achieving a final document and sending it out? A. Having produced what I considered to be a good final version, I'd take it to Mr Petroulias and I'd show it to him. Mr Petroulias would look at it and then say words to the effect of, ‘This is all right’ or ‘This is okay. This looks all right. Go ahead and issue it’. Then I would go through the procedure of getting the signature stamp of Jim Killaly, Deputy Commissioner, from Mr Petroulias' desk and applying it to that finding. I would then photocopy or have a copy of that particular ruling which I filed in lever arch binder folders and send the original out to the Rulee.” 201 Sully J adverted to parts of the cross-examination of Mr Aivaliotes (pages 12-14). His Honour then concluded (page 14.7): “The whole of the preceding discussion, if tested with practical commonsense and in conformity with the Towers guidance, seems to me to afford ample warrant for a conclusion that there is in hand evidence capable of supporting a finding by the jury that the accused did cause, in the requisite legal sense, the issue of the Aivaliotes rulings. That resolves in favour of the Crown the question whether there is a prima facie case in the element of causation.” 202 Sully J gave the jury a number of directions on the element of causation and the evidence adduced in support of that element during the course of the summing up (SU77ff). Directions were given in accordance with the written directions to which reference has already been made. His Honour continued (SU79.2): “With those guidelines and those directions all in place, let us have a look at how, to begin with, the Crown structures its case on causation.
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null
nsw_caselaw:549fd55a3004262463bf14df:19
nsw_caselaw:549fd55a3004262463bf14df
The rarity of the success of such an application as that presently under consideration may be gauged by the fact that counsel were unable to cite a single instance of such an application succeeding on grounds such as those argued here.” 78 Accordingly, on this ground, the Accused seeks the most exceptional type of an already exceptional remedy. If the application succeeds, the operation of the criminal justice system will not proceed further with respect to the first count. There will be no trial on that count at which I may be called upon, as the trial judge, to determine whether the Accused has a case to answer applying the principles in Doney v The Queen. Assuming that there was such a case, there will be no opportunity for a jury, as representatives of the community, to hear the evidence and return a verdict according to law on that count. 79 In Doney v The Queen, the High Court emphasised the importance of the traditional jury function in a criminal trial. The Court made express reference at 215 to the important role of the jury when a trial judge is asked to exercise the power to stay proceedings as an abuse of process at the expense of the traditional jury function: “It is necessary only to observe that neither the power of a court of criminal appeal to set aside a verdict that is unsafe or unsatisfactory (as to which see Whitehorn , Chamberlain v. The Queen (No.2) (1984) 153 CLR 521 and Morris v. The Queen (1987) 163 CLR 454) nor the inherent power of a court to prevent an abuse of process (as to which see Jago v. District Court (N.S.W.) (1989) 168 CLR 23) provides any basis for enlarging the powers of a trial judge at the expense of the traditional jury function. The power of a court of criminal appeal to set aside a verdict on the ground that it is unsafe or unsatisfactory, like other appellate powers, is supervisory in nature. Its application to the fact-finding function of a jury does not involve an interference with the traditional division of functions between judge and jury in a criminal trial. Nor does the existence in a trial judge or a court of powers to stay process or delay proceedings where the circumstances are such that the trial would be an abuse of process.” 80 It is submitted for the Accused that this case is more susceptible to a foredoomed to fail argument because the Crown adduced all its evidence at the first trial and has indicated that the same evidence will be adduced, and be relied upon, at a retrial. There is no foreseeable area in which the Crown anticipates adducing additional evidence at a further trial (PT376, 2006). 81 In these circumstances, which the Accused submits are exceptional in themselves, it is said to be appropriate to examine the case against the Accused on the first count by application of the foredoomed to fail test. The Accused submits that this process is facilitated further by the decisions of the Court of Appeal in 2003 and the Court of Criminal Appeal in 2005 which identified relevant principles in the context of this very case. Following the delivery of those judgments, the Crown has adduced the evidence at the first trial upon which it will seek to rely once again at a retrial in support of the first count. The Accused submits that the difficulties of predicting evidence to be called at a future trial, referred to in cases such as Smith and Tolmie, do not arise in this case. 82 As will be seen, the Accused contends that the first count is foredoomed to fail by reference to three elements - unlawful means, causation and deprivation. It was the issue of deprivation which attracted judicial attention in the Court of Appeal in 2003 and the Court of Criminal Appeal in 2005. It is that issue which became the focal point of the present application.
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null
nsw_caselaw:549fd55a3004262463bf14df:63
nsw_caselaw:549fd55a3004262463bf14df
214 It was submitted for the Accused that there was no evidence upon which a reasonable jury could conclude that the Accused caused the rulings to issue by dishonest means and that Sully J should have directed an acquittal on the first count. 215 The Accused submitted that the Crown must prove that causation was by dishonest means and not simply throw up a generalised body of evidence about dishonest conduct or point to acts which might be thought to be dishonest. Mr Clelland SC submitted that the mere non-disclosure of an association between the applicants for the rulings and the Accused did not satisfy the requirement for the rulings to have been issued by dishonest means. The content or terms of the rulings would have to be shown to be the result of dishonest means or dishonest conduct that caused the rulings to issue in the form in which they did. The Accused submitted that, even if the association had been disclosed, there is no evidence and no basis for concluding that it would have altered the form of the advice or ruling as it was the duty of each officer to issue the rulings in the form they did applying the established ATO view. 216 Criticisms were made by the Accused of parts of the summing up of Sully J with respect to this element. It was submitted that the evidence adduced by the Crown was incapable of proving the element of dishonest means. 217 The Crown acknowledged before me that more elaborate directions ought probably have been given with respect to dishonest means than those which were given to the jury (PT381.47, 2006). However, the Crown submitted that there was ample evidence to support this element and that it cannot be concluded that the first count is foredoomed to fail on this basis. The formulation of appropriate directions to the jury with respect to this issue is a matter for future submissions in the context of a determination by me, as the trial judge, as to the terms of directions to be given to the jury. 218 I accept that the question, for present purposes, is whether the first count is foredoomed to fail with respect to this element because of an absence of evidence capable of supporting the element. 219 The Crown referred to five categories of dishonesty of the Accused which bear upon this question being: (a) conflict of interest; (b) the application of a policy contrary to what the Accused regarded the policy should be; (c) discrimination between the schemes of the PIC group and the schemes of other promoters; (d) concealment of the rulings being issued; (e) the deception of officers as to the rulings being issued. 220 I have noted earlier in this judgment (paragraphs 96 and 97) the concession made by Mr Clelland SC concerning the availability of evidence relating to dishonesty on the part of the Accused. That concession touches upon a number of the topics referred to in the preceding paragraph. 221 The first category relates to conflict of interest. The Crown submitted that the materiality of conflict of interests to the question of the issue of the favourable rulings cannot be dismissed on the basis of a mere failure to inform the ATO officers with whom the Accused dealt of his interest in the schemes. The Crown submitted that the issue involves the exploitation by the Accused of his knowledge and contacts within the ATO in order to ensure that the applications for Advisory Opinions and Private Binding Rulings were likely to be successful, as they indeed were. The success of these applications, the Crown submitted, is to be contrasted with the failure of applications from other promoters for similar schemes which did not have similar patronage. According to the Crown, the issue of conflict of interest embraces the same matters identified in the context of causation, being the elaborate steps taken by the Accused within the ATO to contrive a situation in which the applications were not only dealt with expeditiously, but also had the maximum chance of success.
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null
nsw_caselaw:549fd55a3004262463bf14df:18
nsw_caselaw:549fd55a3004262463bf14df
The intent of these emphasised words is indicated by the cases cited by the court in support of those passages: Metropolitan Bank Ltd v Pooley (1885) 10 App Cas 210 at 220-1; Cox v Journeaux (No. 2) (1935) 52 CLR 713; Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 84, 91-2; General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125. These are all civil proceedings where it is emphasised by the court that the power should be exercised sparingly and only in a clear case. … The application of these principles to a criminal proceeding poses further difficulties. First, there are no pleadings properly so called. This means that the practice of determining the prospect of success of the prosecution with little or no reference to the available evidence cannot be adopted. Secondly, it cannot be ignored that the Crown in a criminal trial does not stand in exactly the same position as a plaintiff in civil litigation. The wisdom of a decision to prosecute or to prosecute for a specific offence is not, properly speaking, a matter for the court: Barton v R (1980) 147 CLR 75. Furthermore, the decision to prosecute will normally have been made only after a preliminary determination of a magistrate following a committal and a re-assessment of the evidence by an experienced prosecutor upon whom lies special responsibility to ensure that proceedings are instituted only where there is a case apparent on the material. The court traditionally respects the judgment of the Crown in the conduct of the prosecution: R v Apostilides (1984) 154 CLR 563. This is, of course, not to say that the court should abdicate its responsibility to the prosecutor, but rather that regard should be had to these factors in determining the fate of a stay of application. In my view, in a case such as the present, the power to order a permanent stay of a criminal proceeding before the court should be limited to the case where it is plain beyond argument that the prosecution case suffers from some incurable vice. Such a vice must be readily apparent and clearly fatal to the prospect of success of the prosecution. I cannot readily imagine that such a vice could arise out of some insufficiency of evidence relied on by the Crown unless a matter such as an incurable absence of admissible evidence on some essential element.” 77 Eames J at 41-42 said with respect to the test to be satisfied in support of foredoomed to fail ground: “The real question is whether the passage in Doney , to which I have made reference and which relates to the principles relevant to a submission of ‘no case’, embraces the concept of the case being ‘so clearly untenable’ that the prosecution cannot possibly succeed, as stated by Barwick CJ in General Steel , or the concept of the case being ‘foredoomed to fail’ stated in Walton where the application before the court is for a stay of proceedings. In my opinion it does not and, accordingly, his Honour has applied the wrong test in determining the application for a permanent stay. The tests are very similar but, in my opinion, the very considerable emphasis given in the decided cases to the exceptional care which must be given to any such application, and the expected rarity of the success of such an application, suggests a test more onerous than that which would apply to a no case submission. Having had the advantage of reading the judgment of Brooking J, I am content to adopt the formulation of the test as proposed by his Honour, namely, that it must be clear beyond argument that the Crown is unable to make out a case to answer, having regard to the evidence available to it. A test stated in such stringent terms would be consistent with the often stated acknowledgment that the courts are not to interfere with the discretion residing in prosecuting authorities to determine which trials are to be prosecuted in the courts: Connelly v Director of Public Prosecutions [1964] AC 1254 at 1304; Jago at 39 per Brennan J; cf Mason CJ at 28.
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nsw_caselaw:549fd55a3004262463bf14df:2
nsw_caselaw:549fd55a3004262463bf14df
· The Element of Deprivation 100-102 · The 2003 Court of Appeal Judgments 103-111 · Sully J’s Judgment of 21 February 2005 112-113 · The 2005 Court of Criminal Appeal Judgment 114-133 · The Trial Proceeds 134-137 · Sully J’s Judgment of 27 June 2005 138 · Sully J’s Judgment of 19 July 2005 139-144 · Directions to Jury Concerning Element of Deprivation 145-149 · Response to Certain Jury Questions 150-156 · Is the First Count Foredoomed to Fail on the Element of Deprivation? 157-174 · The Element of Causation 175-208 · The Element of Dishonest Means 209-233 · Conclusion on Foredoomed to Fail Ground Concerning First Count 234-235 The Broad Abuse of Process Ground 236-249 · The Submission that the Crown Case on the First Count is Insufficient 250-255 · The Submission that No Reasonable Jury Could Accept the Evidence of Mr Morgan 256-266 · Conduct of the Crown in Persisting to Prosecute Various Versions of s.29D Charge 267-271 · The Submission that the Number, Variety, Extent and Duration of the Proceedings Renders Their Continuation Oppressive and Vexatious 272-276 · The Submission that the Accused Lost a Substantial Prospect of Acquittal Because of Erroneous Directions at First Trial 277-286 · Failure of the Crown to Call Competent and Compellable Witnesses 287-302 · Impact of the Passage of Time Since 1997 303-308 · An Unmanageable and Unfair Trial? 309-314 · Stress and Hardship for Accused 315-316 · Public Interest Considerations 317-319 · Accumulating the Various Factors 320-321 · Conclusion on Application on Broad Abuse of Process Grounds 322-324 The Duplicity Argument 325-334 Conclusion 335-337 IN THE SUPREME COURT
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null
nsw_caselaw:549fd55a3004262463bf14df:56
nsw_caselaw:549fd55a3004262463bf14df
184 The written submissions of the Accused before me (MFI1, pages 39-40, paragraph 120) set out the direction which the defence sought at the trial, but which his Honour declined to give. It was submitted before me that the acts of the Accused did not bring about the issue of the rulings and opinions - it was the intervening acts of the officers who had issued the relevant rulings and opinions. 185 The Crown approached this issue at trial, and before me, upon the basis that there was evidence in the Crown case which touched the element of causation extending beyond the bounds of that given by the four ATO officers. The Crown submitted that light was shed on the activities of the Accused, and his motivation for those activities, by statements made by him in the course of a recorded interview with Federal Agents on 24 March 2000. In the course of that conversation, the following was said (“DW” is Federal Agent David Wildman and “NP” is the Accused) (Exhibit C199, pages 8-9): “DW: Do you have a relationship with PIC? Either PICs? NP: What do you mean, how many? Oh Hong Kong it is..OK DW: The other one? NP: Yes I do know the one, yes I know the one. You interviewed my exwife Regina? DW: She was spoken to this morning. NP: I helped her doing her HR, she was doing her masters degree so I helped her write her masters degree as a result I learnt a lot about HR and my philosophy is this is going to be a growing area, a growing market DW: Right NP: If you defer money into a trust you get a tax deduction that you don't have to pay for much later DW: Yep OK NP: That wasn't really a tax scheme, now then the offer came to go to the ATO so I mean I was really interested in going along with all of this as a business, I thought it was a fantastic business, urn then I went to the ATO. I went to the ATO and asked them the ATO view and this is all in the ATO internal memos, I was asking around, `is this thing, do we still have this position ' DW: The position for? NP: Oh the technical, legal position, is the way we treat the law DW: Righto OK NP: Now if this is the way we treat the law and we've done it since 1992 DW: Right NP: Then it doesn't matter if I give one, a million or sixteen million advanced opinions or rulings, to my father my brother or anybody else, because if that's how we treat the law then that is the law, as far as the ATO is concerned, so why should my brother be treated any disadvantageously, or Nick Panos or anybody else so I had no problem with that , DW: OK NP: But I had no problem with that at all but I also understood the advantage of having them tell me information about what was going on in the market . So you know, did I get a benefit, well what benefit did I get, cup of coffee? A drink? When we met and they told me what was going on. Did I receive any cash at any point in time, was any account ever opened in my name, was any trust ever created in my benefit, was anything ever created in earth. Nothing has ever been done that I have received a red cent. If this was going to happen I wish that, you think to yourself shit at least if you have that benefit or money it would have been (inaudible) What I was afraid of covering my arse is shit and it does look like shit um yeah.” (emphasis added) 186 The Crown relied, in particular, upon the underlined portions in this interview. This was said to reflect the development of the Accused’s thoughts on this question at a time when he assisted his ex-wife with her studies. Thereafter, in his capacity as a consultant to the ATO and then as First Assistant Commissioner, the Accused had an opportunity, which he acted upon, to advance the interests of promoters associated with himself by causing steps to be taken within the ATO.
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null
nsw_caselaw:549fd55a3004262463bf14df:20
nsw_caselaw:549fd55a3004262463bf14df
83 In my view, the approach articulated by Brooking, Byrne and Eames JJ in R v Smith informs the process to be undertaken in determining the foredoomed to fail ground in this case. The approach of Hunt CJ at CL in Tolmie is consistent with this approach. It is for the Accused to demonstrate clearly that the first count is doomed to failure. A likelihood that the prosecution will fail is not enough. It is for the Accused to establish that it is manifestly clear that the evidence is incapable of supporting at least one essential element of the offence contained in the first count. I will approach the resolution of this ground with this test in mind. 84 If the Accused succeeded in establishing the foredoomed to fail ground with respect to the first count, he would be entitled to a permanent stay of that count. Even if the Accused cannot discharge the heavy onus in that respect, Mr Clelland SC contends that the strength, or lack of strength, of the Crown case on the first count may be called in aid in support of the permanent stay application on the alternative basis contained in the broad abuse of process ground. The Accused submits that this is but one factor which may be taken into account with a range of other factors to demonstrate that the further prosecution of the first count constitutes an abuse of process. 85 At this point, it is as well to emphasise the functions which I am presently exercising. Consideration of the arguments advanced by the Accused concerning the first count will involve a detailed examination of parts of the judgments of the Court of Appeal and the Court of Criminal Appeal, the evidence adduced at trial before Sully J and several judgments of his Honour during the trial together with aspects of the summing up to the jury. I am not making rulings on admissibility of evidence for the purpose of the retrial. Nor am I determining whether the Accused has a case to answer for the purpose of the retrial. Rather, I am considering evidence relied upon and submissions advanced in support of the foredoomed to fail ground and the broad abuse of process argument. The Crown Case 86 A broad statement of the Crown case against the Accused is contained in the following extract from the judgment of Spigelman CJ in Wills v Petroulias at 600-601 [3]-[7]: “3. Between 1997 and 1999 the Opponent [Mr Petroulias] held office in the Australian Taxation Office ("ATO"). In September 1998 he became First Assistant Commissioner. The Crown alleges that at the time of such employment the Opponent was also involved in the planning, promotion and implementation of tax schemes with certain other persons and that he used his position as an officer of the ATO to facilitate favourable Advance Opinions and Private Binding Rulings issued by the ATO. 4 Private Rulings are issued under Pt IVAA of the Taxation Administration Act 1953 (Cth). The scheme of Private Binding Rulings is as follows: · A person may apply to the Commissioner for a ruling as to how a tax law would apply to the person in relation to an arrangement (s14ZAF). · The Commissioner is obliged to comply with an application for such a ruling, subject to certain exemptions (s14ZAL(1) and s14ZAN). · There are circumstances, not presently material, in which a Commissioner may decline to make a ruling (s14ZAQ). · A ruling given in this manner is binding by force of statute (s170BB of the Income Tax Assessment Act 1936 (Cth). 5 The Opponent and his partners established a business known as the Productivity Incentive Corporation ("PIC") which, inter alia, applied for Private Binding Rulings with respect to tax schemes described as Employee Benefit Arrangements ("EBAs"). In general terms the EBAs involved the payment by an employer of monies into a trust fund. The trust would lend money to individual employees for the purpose of purchasing units in the trust.
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null
nsw_caselaw:549fd55a3004262463bf14df:32
nsw_caselaw:549fd55a3004262463bf14df
This submission led to debate as to whether the material was capable of supporting these propositions. The respondent submitted that the material rose no higher than evidencing discussion within the ATO, what Sully J described as ‘no more than that the rulings were controversial within the Taxation Office’.” 127 At 686-687 [88]-[89], in a passage which the Accused relies upon in the present applications, Mason P said: “A ruling that is incontrovertibly correct in its statement and application of the tax law could not be the instrument of defrauding the revenue, regardless of the dishonesty of the ATO officer involved. As Simpson J put it ([2002] NSWSC 1190 at [43]): ‘It cannot be said that a ruling which correctly acknowledges that, in a particular set of circumstances, a taxpayer is not liable for the imposition of a particular tax, confers any benefit upon that taxpayer, or any corresponding disadvantage upon the Commonwealth’. For the purpose of the s29D charge now proffered, the search is for a way of determining whether there was anything of value in the Commissioner’s rights to assess and recover tax as affected by the rulings and the way rulings operate in law. If the true legal position at the time was that nothing touching the revenue was lost by issuing the rulings then the charge is not capable of being made out and should be withdrawn from the jury. This would be so whether or not Particular N(v) were included.” 128 Mason P said 687-688 [96]-[101]: “Now that the count has reached its ‘final’ form it is useful to remind oneself that the relevant matter for ultimate proof is whether the respondent’s conduct in causing the private rulings to issue ‘put the revenue of the Commonwealth at risk’. This allegation of the actus reus is itself a gloss on s29D (albeit well supported by authority). It is potentially misleading to gloss the gloss by focussing on an ‘arguably wrong’ test. However, the ‘arguably wrong’ issue must be addressed, for two reasons. The first stems from the proposition I stated earlier, that an incontrovertibly correct ruling could not be an event that puts the revenue at risk. To say that only arguably incorrect rulings have this consequence is an attempt to capture this idea. I perceive that this may be the thinking behind Particular N(v). The second and possibly different way in which some kind of arguability issue intrudes is that the Crown has elected to make it part of the case, through Particular N(v). This may have been unnecessary (see par [58] above). But so long as the particular remains as an aggravating feature of the conduct charged it will require attention at trial, not necessarily by way of express jury direction. It may be dangerous or misleading to use the same label (‘arguably correct’) in these two senses, at least without confirming the prosecution’s intention in averring Particular N(v) as an aggravating feature and also confirming the meaning sought to be advanced by the Crown in this particular. If all that is involved is arguability of the first type then it seems to me that one is only dealing with whether the count may go to the jury. If the ruling is incontrovertibly correct in law in both its tax aspects there is simply nothing capable of making out the Crown case on the s29D charge. The count should therefore be withdrawn from the jury. But, absent this situation appearing to the trial judge, the count should simply go to the jury according to its terms, without concern about directing the jury to find the rulings were ‘arguably wrong’ (itself a mere particular). If, however, an allegation that the rulings were arguably wrong is intended as an aggravating feature of the Crown case (ie if the Crown wants to use the concept otherwise than just in the first sense I have proposed) then an additional issue will be thrown up at the trial. How (if at all) is the jury to be instructed in this particular matter? Is it really another way of looking at the first type of arguability issue?”
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null
nsw_caselaw:549fd55a3004262463bf14df:68
nsw_caselaw:549fd55a3004262463bf14df
The Accused sought leave to appeal against the order of committal with the appeal being determined, favourably to the Accused, by Simpson J. The Crown appealed to the Court of Appeal which confirmed aspects of Simpson J’s findings, but set aside a number of the orders made by her Honour. 241 On 22 March 2004, the Accused was committed for trial again on a s.29D charge in a different form to that originally laid. In August 2004, Sperling J dismissed an appeal by the Accused against his committal for trial on the s.29D charge. 242 The Accused was arraigned on 2 April 2004 upon an indictment in the form relied upon by the Crown before Sully J and again before me. In circumstances identified earlier in this judgment, on 21 February 2005, Sully J permanently stayed the s.29D count, taking the view that “enough is enough”. 243 The Crown appealed to the Court of Criminal Appeal which, on 11 March 2005, allowed the appeal and overturned the order granting a permanent stay of the first count on the indictment. 244 The Accused submits that the Crown did not take up the course proposed in the majority judgment of the Court of Criminal Appeal concerning the manner in which the Crown could seek to establish the element of deprivation in the first count. 245 Mr Clelland SC points out that the Accused was 29 years of age when he commenced employment as a consultant with the ATO in 1997. It is now nearly six-and-a-half years since the Accused was first arrested and charged. Since that time, it is submitted that he has spent nearly 12 months of his life “effectively undergoing periodic detention” by attending various court proceedings with many further hours engaged in preparing his defence and in conferring with his lawyers. 246 The proceedings against the Accused now occupy some 4,000 pages of transcript. Material disclosed to the Accused includes more than 20,000 documents. At the first trial, the Crown tendered 18 lever-arch folders of documentary exhibits and the defence, one folder. There were a further six folders of documentary material marked for identification. 247 Mr Clelland SC submits that the Accused is an individual who has to privately fund his defence, including being required to pay tens of thousands of dollars to obtain transcripts of the evidence in the first trial. He points to the stress to the Accused arising from the institution and continuation of the proceedings. 248 No evidence was adduced by the Accused on the present application concerning any subjective factors touching the Accused with might be relevant to the application. 249 Against this general background, I turn to consider the factors which the Accused submits ought be taken into account in support of the broad abuse of process ground. The Submission that the Crown Case on the First Count is Insufficient 250 I have considered, in some detail, and have rejected the defence submission that the first count is foredoomed to fail. I have accepted that there is a prima facie case with respect to the elements of deprivation, causation and unlawful means based upon the evidence adduced at the first trial. The Accused concedes the existence of a body of evidence going to the general issue of dishonesty. 251 The Accused submits that, even if the foredoomed to fail ground was rejected, I am entitled to have regard to the strength or otherwise of the Crown case on the first count in determining whether to grant a permanent stay on the broad abuse of process ground, either on its own or in combination with other factors. No authority was cited in support of this proposition. 252 In circumstances where an Accused has failed to satisfy the foredoomed to fail ground (a recognised category of abuse of process) it is difficult to see that the Court would be entitled to grant a permanent stay of a criminal prosecution based upon the strength, or lack of strength, of the Crown case in support of the prosecution.
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null
nsw_caselaw:549fd55a3004262463bf14df:70
nsw_caselaw:549fd55a3004262463bf14df
and the converse is equally true: if you are prepared to accept Mr Morgan's evidence as satisfying you beyond reasonable doubt that there was, in fact, some such arrangement concluded between himself, Mr Panos and the accused as he, Mr Morgan, alleged, then for myself, I can see no evidence that would indicate that you should come to any other conclusion about the other three particular arrangements. Whatever might be the technicalities and the hyper-refinements of it all, as a practical matter, the Crown case on these arrangements stands or falls on the evidence of Mr Morgan and, if it falls on one, it falls on all; if it stands on one, it stands on all. That seems to me, at any rate, to be the practical cast of the evidence as it stands. That, of course, is simply to pose a critical question - and it is a critical question in this trial - of the extent to which you are prepared to accept Mr Morgan's evidence at all; but certainly upon that fundamental proposition as to the coming into existence of arrangements of the kind alleged by the Crown.” 259 In effect, Sully J directed the jury that it would not come to consider the elements of deprivation, causation and unlawful means in the first count unless the evidence of Mr Morgan was accepted on the foundational issue of the arrangement. 260 I have, so far, not referred to any argument directed to the second count on the indictment. His Honour directed the jury with respect to the elements of the second count (SU224ff). It was apparent, from the directions of Sully J to the jury, that the Accused could not be convicted of the second count unless the jury accepted as having being established beyond reasonable doubt, the basic agreement of which Mr Morgan gave evidence (SU226.4): “The understanding which is basic to this count could not be established except as a characteristic of an agreement, being an agreement of the kind that we noticed in our discussion recently about count 1. In other words, the same understanding, the same basic arrangement or understanding or agreement which is basic to count 1 is just as basic to count 2, for there is no allegation that the accused agreed in some kind of vacuum to receive a benefit for an improper consideration. The case made against him is that he did agree to receive such a benefit upon an improper basis as an incident of the foundational agreement which, according to Morgan, was struck between the accused, Morgan, Panos, and the variants of that arrangement that I discussed with you the other day involving Gray, McLaren and Strong. If you accept what Morgan says about the formation of the agreements, and in particular what he says about the constant references of the accused to the paramount importance of having the PIC schemes covered by advance - advisory opinions and private binding rulings not available for competing schemes, then it would be open to you to infer that the co-venturers did have, indeed, an understanding that the accused would do what he is charged in this count with having done as an incident of his earning his one-third share in the profits. But I have to say with the greatest emphasis that analysis simply won’t stand at all unless you are prepared to find beyond reasonable doubt that Morgan is to be accepted in what he says about the nature of the basic arrangement which he says was struck among himself, Panos and the accused. There is really very little - in fact there is practically nothing - that I can usefully say to you about count 2. The issue is as stark as that. If you accept Morgan, then you might - it would be open for you to find that the other elements were in place. It’s not in dispute, for example, that Mr Petroulias was a Commonwealth officer at the various times. Everything comes back to whether or not you agree - ‘agree’ is hardly the way to put it - whether or not you accept as having been established beyond reasonable doubt that the basic agreement of which Morgan gave evidence.”
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null
nsw_caselaw:549fd55a3004262463bf14df:42
nsw_caselaw:549fd55a3004262463bf14df
A. The cell-type approach. I mean, the law is the law, but as you can appreciate, when you get into some of these areas, there are alternate taxing points and the Commissioner sometimes has to pick between alternate arguments and go with the one that produces the closest outcome that the law intends. So there is some scope to interpret it.’ [T 728 (10) - (37)] 14. [sic] It seems to me that the upshot of the whole of this evidence is that Mr. Forsyth, notwithstanding what he had said about the Productivity Incentive Trust Plan arrangements, did not regard his view about deductibility as being in any sense definitive; but saw that issue as providing a more practical focus for challenging EBA's than was provided by focusing on FBT liability. 15. I make the additional observation concerning Mr. Forsyth's evidence that, even were the jury to be instructed that Mr. Forsyth should be regarded by them as an expert witness whether in the FBT area and in the deductibility area, or only in the FBT area, it would still be necessary to instruct the jury that they were not to be simply and uncritically overborne by expert evidence so as in effect to abdicate their own exclusive province and prerogatives as sole judges of any disputed question of law. 16. As to the submissions summarised at 5.2, I do not think that Mr. Chow's position papers can be fairly dismissed with the pejorative tag of ‘amalgam’; albeit they drew undoubtedly upon other expressed opinions. Even without recourse to those other opinions, Mr. Chow's papers expose a process of reasoning as to which I am not persuaded that it is so manifestly untenable that it could not be reasonably propounded by the Commissioner in an appropriate test case. I do not believe that a fair reading of Mr. Forsyth's evidence entails necessarily that he thinks that Mr. Chow's analysis of the ‘associate test’ is wrong in principle. Mr. Forsyth's problem seems to be, rather, that whether Mr. Chow's position be correct or not in principle, its practical application would entail such difficulties in the FBT area as would more than warrant a search for an alternative method of dealing with EBA's that are seen to require some tightening up of the ATO approach to them. I think that there is force in the submissions summarised at 5.3 and 5.4 above; but I do not believe that they alter the substance of what I have written otherwise in the present paragraph. 17. I accept, too, that there is force in the submissions summarised at 5.5 and 5.6 above, but subject to what I have said earlier about Mr. Forsyth's evidence. 18. Mr. d'Ascenzo, the Second Commissioner of Taxation, gave evidence of the Public Rulings Panel discussions that preceded the draft Taxation Determination earlier herein mentioned, Mr. d'Ascenzo said that there had been a panel view to the effect that a trustee was an associate, a conclusion pointing towards the applicability of FBT. I agree with the submission that the opinion thus expressed by Mr. d'Ascenzo was said by him to be one step along the way towards a final resolution of the question of the applicability of FBT to employee benefit schemes. I do not see, however, why that qualification cuts down the availability, in aid of the general position which the Commissioner would wish to take in a test case, that FBT is in fact payable upon the relevant kind of employer contributions. It seems to me that a reasonable jury might well take the view that if it is looking to see what evidence there is either supportive of or unsupportive of the Commissioner's basic argument that there is a lawful liability to FBT, the jury could find some support for the Commissioner's position in the fact that a very high level and high powered public rulings panel thought that, in principle at any rate, the thrust of Mr. Chow's view about the ‘associate’ test was correct.
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null
nsw_caselaw:549fd55a3004262463bf14df:52
nsw_caselaw:549fd55a3004262463bf14df
In these circumstances, Mr Clelland SC submitted that the note of caution often sounded when it is submitted that a criminal prosecution is foredoomed to fail (for example, Tolmie) does not apply in this case. It was submitted that I am in a position, at the present time, to assess the Crown case at its highest and that the present application should be measured by reference to the body of evidence already adduced by the Crown at the first trial. 161 The Crown submits that the approach adopted by it at the first trial to the evidence to be adduced in support of the element of deprivation was consistent, and certainly not inconsistent, with the judgment of the Court of Criminal Appeal. That judgment, it was submitted, did not purport to mandate or prescribe the categories of evidence which the Crown could rely upon to establish the element of deprivation. It was acknowledged in both the joint judgment at 671 [28] and the judgment of Mason P at 690 [115] that the Crown had not relied upon expert evidence at the committal proceedings and had not indicated an intention to do so at the trial. If the Court of Criminal Appeal had intended that expert evidence was a mandatory part of the Crown case on this issue, then the Court would have said so. Furthermore, the Crown submits, if expert evidence was essential, the Court of Criminal Appeal would have dismissed the appeal given the absence of an indication from the Crown of an intention to adduce such evidence. 162 The Crown submitted that the judgment of the majority in the Court of Criminal Appeal at 668 [16]-[17] was significant in identifying matters which the trial judge was not required to explain to the jury. It was submitted that the statements of the majority at 671 [29] formed another critical part of the judgment. There, the majority noted, without the need for repetition, the evidence relied upon by the Crown to establish the proposition that the “arguably wrong” test could be satisfied. According to Spigelman CJ and Hunt AJA at 671 [29], it was sufficient to say that, for the purposes of an application for a permanent stay, the material referred to by Mason P was sufficient to give rise to a real issue as to whether or not the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. By this statement, the Crown submitted that the majority endorsed the outline of evidence contained in the judgment of Mason P at 680-682 [68] as being sufficient to give rise to a real issue on this element. 163 The Crown submitted that it had adduced evidence at the first trial in accordance with the summary set out by Mason P at 680-682 [68]. The Crown submitted that the arguments of the Accused criticising features of the evidence of Mr Chow, Mr Ackhurst and others and advancing arguments arising from the cross-examination of Crown witnesses (including Mr Forsyth) represented nothing more than jury arguments on the facts. The Crown submitted that those arguments were advanced to the jury at the first trial. The jury could not agree upon a verdict on the first count. Whatever may be made of these defence arguments, the Crown submitted that they were far removed from demonstrating that the first count was foredoomed to fail by reference to the element of deprivation so as to constitute an abuse of process warranting a permanent stay. 164 The Crown submitted that the evidence of out-of-court admissions of the Accused as contained, inter alia, in his emails to Mr Ackhurst and Mr Strong were relevant and admissible in support of the element of deprivation on the first count. To the extent that the Accused relied upon the statement in the majority judgment of the Court of Criminal Appeal at 670-671 [27] to the effect that “that objective fact [the state of the law] has nothing to do with any state of mind on the part of the accused which may be relevant to his mens rea”,
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