R v Chalabian (No. 13)

1. [1]

   JOHNSON J: The Accused, Sevag Chalabian, is standing trial before a jury upon an indictment charging money laundering under s.400.3(1) Criminal Code (Cth).

2. [2]

   On 6 April 2022, the jury retired to consider their verdict. Jury deliberations continued on 7 April 2022. On 8 and 11 April 2022, the jury did not continue deliberations because jurors were absent having tested positive for COVID-19. The trial was adjourned until 19 April 2022 for the resumption of jury deliberations: R v Chalabian (No. 12) [2022] NSWSC 432. The 11 remaining jurors attended on 19 April 2022 and the jury resumed their deliberations.

3. [3]

   This judgment concerns an issue which arose in the course of closing addresses and before summing up, and a second issue which arose after the jury had retired to consider their verdict.

4. [4]

   The first issue concerns an application on behalf of the Accused for a direction to the jury in accordance with Mahmood v Western Australia (2008) 232 CLR 397; [2008] HCA 1 (“Mahmood”) at [27] arising from the Crown not calling Reece Walsh to give evidence at the trial.

5. [5]

   The second issue concerns directions given to the jury during the summing up with respect to available alternative verdicts and an associated “no compromise” direction given in that context.

Application for a Mahmood Direction Concerning Reece Walsh

1. [6]

   On the afternoon of 5 April 2022, the Court heard submissions in support of the application by the Accused for a Mahmood direction concerning Reece Walsh (SU25-28).

2. [7]

   On the morning of 6 April 2022, in the absence of the jury, I gave the following ruling on this application (SU30):

3. [8]

   What follows constitutes my reasons for this ruling.

4. [9]

   At the outset, I observe that a Mahmood direction was sought initially with respect to a number of persons not called by the Crown. In a judgment of 5 April 2022, I indicated that a ruling concerning applications for Mahmood directions would be considered after closing addresses: R v Chalabian (No. 11) [2022] NSWSC 384 at [5]-[8].

5. [10]

   As it happens, the application for a Mahmood direction was confined to Reece Walsh. In his closing address for the Accused, Mr Brady SC said to the jury concerning the Crown’s failure to call Mr Walsh (T1758-1759):

6. [11]

   The Crown opposed the giving by the Court of a Mahmood direction concerning Reece Walsh (SU25-27) with Mr Brady SC advancing submissions in support of that application (SU27-28). In addition to the oral submissions made, the Court considered written submissions made for the Crown (MFI49) and the Accused (MFI44 and MFI50) on the topic of Mahmood directions, some of which were pertinent to the particular application concerning Reece Walsh.

7. [12]

   In Mahmood, Gleeson CJ, Gummow, Kirby and Kiefel JJ said at [27] (my emphasis):

8. [13]

   There is some tension between a direction that the jury is not to speculate or guess as to what evidence an absent witness might or might not have given and a direction that the jury may take into account the absence of the witness in determining whether the Crown has proved the guilt of an accused person.

9. [14]

   In a sense, the second step must involve (to some extent) the jury considering what subject matter would have been touched upon if the person had given evidence. It may be that a person is not called to give evidence on what was, at best, a peripheral issue in the trial so that a Mahmood direction would be inappropriate: R v Barrett (No. 3) [2021] NSWSC 543 at [5]-[10].

10. [15]

    It is a matter for the Court, in the exercise of discretion, to determine whether a Mahmood direction should be given in circumstances where the Crown does not call a person to give evidence in a criminal trial.

11. [16]

    It is relevant to a decision as to whether a Mahmood direction should be given to consider the importance or centrality of the person who did not give evidence. At the same time, it is necessary to keep in mind the critical direction, which forms part of a Mahmood direction, that a jury is not to speculate or guess as to what a person would have said if the person was called as a witness in the trial. The jury should be directed that they should not attempt to predict whether the evidence of the person would assist the Crown or assist the Accused.

12. [17]

    As noted above, there is some tension between that direction and the possible direction that a jury can take into account the absence of evidence from a particular person when determining whether the Crown has proved the guilt of the Accused beyond reasonable doubt.

13. [18]

    It is the case that Reece Walsh was referred to, from time to time, in evidence at the trial. There was some evidence that a statement was taken from him by the Australian Federal Police concerning events which occurred some years before the events in late 2016 and the first half of 2017 which were relevant to the trial of the Accused.

14. [19]

    No request was made on behalf of the Accused that Reece Walsh be called by the Crown as a witness at the trial.

15. [20]

    I took the view that the circumstances of this trial did not require the Court to give a Mahmood direction to the jury concerning Reece Walsh. Senior Counsel for the Accused had addressed the jury on this topic with a submission which culminated, in somewhat tentative terms, that the jury “might be able to take [his absence as a witness] into consideration in determining whether or not the Crown have proved this beyond reasonable doubt” (see [10] above).

16. [21]

    In my view, Reece Walsh was an incidental participant in events which had relevance to the trial. It would have overstated the position for the Court to give a Mahmood direction arising from his not giving evidence in the trial.

17. [22]

    The appropriate balance was to leave, without criticism or comment, the argument advanced on behalf of the Accused with respect to Reece Walsh. That is the course which I took, thereby declining the application by the Accused for a Mahmood direction with respect to him.

Issues Relating to Directions to Jury Concerning Alternative Verdicts

1. [23]

   The Accused is standing trial upon a single count under s.400.3(1) expressed in the following terms:

2. [24]

   The Crown foreshadowed in opening to the jury (T230), that reference would be made, as well, to statutory alternative verdicts under s.400.14 Criminal Code (Cth), involving lesser tiers of offences based (instead of belief) upon recklessness (s.400.3(2)) or negligence (s.400.3(3)). In taking this course, the Crown complied with the procedural requirement noted in R v Pureau (1990) 19 NSWLR 372 at 376-377, where alternative verdicts may arise in a criminal trial. After the Crown opening address and before the opening address for the Accused, the Court informed the jury that directions would be given later in the trial concerning the alternative verdicts mentioned by the Crown (T231).

3. [25]

   In due course, written directions were settled by the Court concerning alternative verdicts (MFI60). These written directions were provided to the jury before closing addresses, together with a document entitled “Elements of the Offence Charged in the Indictment” (MFI70). This was an expanded version of a document provided to the jury before opening addresses which set out the elements of the offence charged against the Accused (MFI3).

4. [26]

   The written directions in MFI70 explained the concepts of “recklessness” and “negligence” based upon, respectively, definitions contained in s.5.4(1) and 5.5 Criminal Code (Cth).

5. [27]

   After taking the jury through the written directions concerning alternative verdicts in MFI60, I said (SU19-20):

6. [28]

   This direction was an orthodox “no compromise” direction given to juries in criminal trials when alternative verdicts arise for consideration. The direction which I gave, in this respect, was based upon the suggested direction contained in paragraph [2-210] of the Criminal Trial Courts Bench Book issued by the Judicial Commission of New South Wales.

7. [29]

   The summing up to the jury proceeded for about an hour on the afternoon of 5 April 2022. On the morning of 6 April 2022, when the jury entered the courtroom for the continuation of the summing up, I was handed a note from the jury which led to the following being said to the jury (SU33-34):

8. [30]

   The directions given to the jury concerning alternative verdicts, including the “no compromise” direction, were not challenged or criticised by the Crown or counsel for the Accused. It was clear that the parties agreed that these were appropriate directions to give to the jury in the circumstances of this trial.

9. [31]

   Near the conclusion of the summing up, the jury were provided with a document entitled “Return of Verdict” (MFI73). The jury were taken to that document (SU97-98):

10. [32]

    The jury retired to consider their verdict on the afternoon of 6 April 2022. Deliberations continued on Thursday, 7 April 2022 with the jury seeking, and being provided with, a copy of the summing up (MFI81) together with a copy of the transcript of closing addresses on behalf of the Crown and the Accused (MFI80).

11. [33]

    As noted earlier, on the morning of 8 April 2022, as a result of illness affecting two jurors, the trial was adjourned until 10.00 am on 11 April 2022.

12. [34]

    I had been giving further consideration to the terms of the “no compromise” direction given to the jury. In these circumstances, on the afternoon of 8 April 2022, at my request, my Associate emailed the parties in the following terms (MFI84):

13. [35]

    As noted earlier, on the morning of 11 April 2022, the trial could not proceed because of three jurors testing positive to COVID-19 with the trial being adjourned, on the joint application of the parties, until 10.00 am on 19 April 2022: R v Chalabian (No. 12).

14. [36]

    In accordance with the request of the Court, the Crown provided a written submission concerning the operation of s.5.4(4) Criminal Code (Cth) in the context of the alternative verdict directions (MFI85). Counsel for the Accused indicated by email that he agreed with the submissions made for the Crown and had nothing to add (MFI86).

15. [37]

    The Crown submission was that the directions given to the jury were correct and that no proper basis existed for any amendment to the directions on this topic. In this respect, the Crown referred to authorities including Stanton v The Queen (2003) 77 ALJR 1151; [2003] HCA 29 and King v The Queen (2012) 245 CLR 588; [2012] HCA 24.

16. [38]

    Accordingly, the joint position of the Crown and the Accused was that the jury had been given correct directions and that there was no occasion to amend directions given to the jury concerning the alternative verdicts, including the “no compromise” direction.

17. [39]

    In light of the joint position of the parties in this respect, I made clear that the Court would not amend the directions given to the jury on this aspect (SU138-140). I indicated, however, that I would publish reasons explaining why this issue had been raised with the parties as against the possibility that it arose again as an issue in the context of this trial or a later trial.

18. [40]

    In this respect, I was conscious that a charge of money laundering under s.400.3(1) Criminal Code (Cth) had been brought against one or more of the accused who are to stand trial before Payne J and a jury after the trial of the present Accused is complete (R v Adam Cranston and Ors). What follows constitutes exposure of my reasoning for raising this issue with the parties in the way that occurred on 8 April 2022.

19. [41]

    The Accused is standing trial for a “Tier 1” offence under s.400.3(1) Criminal Code (Cth) which provides (my emphasis):

20. [42]

    Section 400.3(2) provides for a “Tier 2” offence involving recklessness (as opposed to belief). That provision states (my emphasis):

21. [43]

    Section 400.3(3) provides for a “Tier 3” offence based upon negligence (as opposed to belief or recklessness). That provision states (my emphasis):

22. [44]

    Section 400.14 provides for alternative verdicts:

23. [45]

    Sections 3.1 and 3.2 lie within Part 2.2 of the Code concerning the elements of an offence. Those provisions state:

24. [46]

    Section 4.1 provides for the physical elements of an offence:

25. [47]

    Sections 5.1 to 5.6 of the Code concern fault elements for offences under the Code. Those sections state:

26. [48]

    The Crown submitted that, as recklessness is not “a fault element for a physical element” of the offence on the indictment, the application of s.5.4(4) does not arise in respect of the jury’s consideration of the charge on the indictment, which is based on the fault element of belief.

27. [49]

    It was submitted that s.5.4(4) operates to prevent the situation where the charge on the indictment is recklessness, but the jury is divided between those who find that the Accused knew, and those who find the lesser fault element only as proven. It would be irrational that there was a hung jury in those circumstances. The purpose of s.5.4(4) is, it was submitted, to deal with that possible irrational result.

28. [50]

    The Crown submitted that the potential application of s.5.4(4) does not arise at all in this prosecution, and the jury will not be able to apply that subsection if they find the Accused not guilty of the offence on the indictment and move to return a verdict on the first alternative offence based on recklessness.

29. [51]

    It was submitted that, whilst s.5.4(4) operates where the trier of fact is considering an offence where there is the fault element of recklessness (such as the first alternative verdict in this trial), the jury can only do that once they have unanimously found the Accused not guilty of the offence on the indictment. If they find him not guilty of the charge on the indictment, there would be no occasion for s.5.4(4) to operate when considering the recklessness offence, given that they would have already found that his belief is not proved to the criminal standard, and given that this is the single issue for determination in this trial.

30. [52]

    The Crown submitted that the jury is not able to return a verdict of guilty on the first alternative verdict unless they are satisfied unanimously that he is not guilty of the charge on the indictment. In this regard, reliance was placed upon the judgment of the majority (Gleeson CJ, McHugh and Hayne JJ) in Stanton v The Queen at [27]. Although Gummow and Callinan JJ dissented in the outcome, the Crown noted that their Honours (at [69]) agreed with the approach of the majority on this issue, so that a jury ought be directed that it will be only if the jury reach a verdict of not guilty on the principal charge (in that case, wilful murder) that they would be asked to return another or other verdicts.

31. [53]

    It was submitted that the alternative verdicts provision in s.400.14 Criminal Code (Cth) was similar to that considered by the High Court in King v The Queen. It was noted that the majority (French CJ, Crennan and Kiefel JJ) said (at [56]) that a jury has no power to return an alternative verdict unless first satisfied that the person is not guilty of the offence as charged in the indictment. Although noting that what was said in this respect in King v The Queen may not form part of the ratio decidendi of the case, the Crown noted that all Judges agreed that unanimity was required as a condition precedent to the jury’s power to return an alternative verdict provided by the statute so that the decision is highly persuasive.

32. [54]

    The Crown submitted that s.5.4(4) does not operate so as to permit a unanimous verdict of guilty for the recklessness offence if some jurors are satisfied beyond reasonable doubt of the belief element and the balance of the jury are satisfied beyond reasonable doubt of the recklessness element. The jurors are not able to resolve a state of disagreement between them in relation to the charge on the indictment by applying s.5.4(4). The Crown submitted that this is because s.400.14 does not allow a hung jury to move to consider the first alternative verdict.

33. [55]

    The Crown submitted that the directions given to the jury to the effect that they cannot find the Accused guilty of an alternative charge, unless they have reached a unanimous verdict of not guilty on the primary charge, are correct.

34. [56]

    As noted earlier, counsel for the Accused agreed with the Crown submission (contained in MFI85) and had nothing to add (MFI86).

35. [57]

    In R v Saengsai-Or (2004) 61 NSWLR 135; [2004] NSWCCA 108, Bell J (Wood CJ at CL and Simpson J agreeing) explained the scheme of the Criminal Code (Cth) in the following way (at [37]-[43]):

36. [58]

    Later in R v Saengsai-Or, Bell J referred to recklessness at [70]:

37. [59]

    In R v Ansari (2007) 70 NSWLR 89; [2007] NSWCCA 204, the Court of Criminal Appeal considered provisions of the Criminal Code (Cth) in the context of a prosecution for an offence of conspiracy to money launder (based on recklessness) under s.400.3 of the Code. Simpson J observed (at [22]) that in the circumstances of that case, s.5.4(4) was significant as it permitted recklessness to be established by proof, not only of recklessness, but also intention or knowledge.

38. [60]

    In R v Ansari, Howie J (Hislop J agreeing) said at [88]-[89]:

39. [61]

    In Ansari v The Queen (2010) 241 CLR 299; [2010] HCA 18, the High Court considered the relevance and operation of s.5.4(4) in an appeal from the decision of the Court of Criminal Appeal. French CJ observed at [7]:

40. [62]

    A little later, French CJ said at [26] (my emphasis):

41. [63]

    In Ansari v The Queen, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ said at [59]:

42. [64]

    The Crimes Act 1900 (NSW) makes provision for money laundering offences under New South Wales law with cascading alternatives being available. The provisions were explained, in a sentencing context, by the Court of Criminal Appeal in Humphreys v R [2020] NSWCCA 144 where, with the agreement of Simpson AJA and Hamill J, I said at [114]-[121]:

43. [65]

    It will be noted that s.193E Crimes Act 1900 (NSW) makes provision for alternative verdicts in a form which is broadly analogous to s.400.14 Criminal Code (Cth).

44. [66]

    As explained in Humphreys v R (at [115]), the accused person in that case stood trial for offences under s.193B(3) Crimes Act 1900 (NSW) based on recklessness. He was not charged with s.193B(2) offences involving knowledge as an element.

45. [67]

    The indictment in this trial contains a single count alleging a Tier 1 offence under s.400.3(1) Criminal Code (Cth). The only way in which the jury may consider alternative verdicts for Tier 2 and Tier 3 offences under s.400.3 is if the jury “is not satisfied that [the Accused] is guilty of the offence charged” in the indictment: s.400.14 Criminal Code (Cth). The language of s.400.14 is similar to the provision considered in King v The Queen (at [12]) so that the power to deliver an alternative verdict of guilty under s.400.14 is conditional upon the jury not being satisfied of the guilt of the Accused on the s.400.3(1) offence charged in the indictment. See also Bouch v R (2017) 80 MVR 85; [2017] VSCA 86 at [55]-[65] (Redlich and Weinberg JJA).

46. [68]

    In Stanton v The Queen, Gleeson CJ, McHugh and Hayne JJ outlined the applicable principles where a jury is considering alternative verdicts (at [23]-[27]) (my emphasis):

47. [69]

    To the extent that reference was made in Stanton v The Queen at [26] (see [68] above) to a special verdict in accordance with the principles in Gilson v The Queen (1991) 172 CLR 353; [1991] HCA 24, it should be observed that no such special verdict is available here. The operation of s.400.14 Criminal Code (Cth) is clear (see [44], [67] above).

48. [70]

    In Blackwell v R (2011) 81 NSWLR 119; [2011] NSWCCA 93, Beazley JA (James J agreeing) said at [88]:

49. [71]

    The need for a “no compromise” direction to be given to a jury where alternative verdicts are under consideration has been emphasised: R v Currie [2002] NSWCCA 126 at [13], [96]. The “no compromise” direction in the Criminal Trial Courts Bench Book received specific endorsement in Blackwell v R at [89]-[90]. As noted earlier (at [28]), it was this model direction that was used by the Court in the present trial.

50. [72]

    Importantly, in Stanton v The Queen, Gleeson CJ, McHugh and Hayne JJA said at [35]-[36] (my emphasis):

51. [73]

    After considering those aspects of the trial, their Honours held that the trial Judge’s direction to the jury did not involve error.

52. [74]

    Arising from Stanton v The Queen at [35] (see [72] above), Courts have also emphasised the importance of the trial Judge not dictating a sequence of deliberations to the jury where alternative verdicts are under consideration.

53. [75]

    The decision in Stanton v The Queen at [35] (see [72] above) makes clear that the jury is free to undertake its task and deliberations in any order it considers appropriate: Abdallah v R [2016] NSWCCA 275 at [46]-[47].

54. [76]

    In Simms v R (2004) 148 A Crim R 433; [2004] WASCA 237, Jenkins J (Le Miere J agreeing) said at [50]:

55. [77]

    This summary by Jenkins J has been referred to, with approval, in later cases including Bouch v R at [43]-[45].

56. [78]

    The importance of a trial Judge guarding against the fettering of a jury’s approach to deliberations has been emphasised in a number of decisions.

57. [79]

    In LLW v R (2012) 35 VR 372; [2012] VSCA 54, Maxwell P, Weinberg JA and Williams AJA said at [5] (my emphasis):

58. [80]

    After referring to Stanton v The Queen, their Honours said in LLW v R at [11]-[15] (my emphasis):

59. [81]

    In Mourkakos v R [2018] VSCA 26, Whelan, Santamaria and Kyrou JJA summarised the relevant principles at [22]-[25] (my emphasis):

60. [82]

    The practical concern which moved me to invite submissions from the parties on 8 April 2022 involved the possibility that some of the jurors might be satisfied to the criminal standard of the belief element in the charged offence and others were not, but they were satisfied to the criminal standard of the recklessness element. Unless resort could be had to a mechanism which would allow the return of a verdict of not guilty of the charged offence and guilty of the first alternative offence based on recklessness, the outcome would be a hung jury and an aborted trial.

61. [83]

    I accept the Crown submissions (at [48]-[55] above), supported by counsel for the Accused, that s.5.4(4) Criminal Code (Cth) does not assist to allow the jury in this trial to find the Accused guilty of the first alternative offence based on recklessness in those circumstances. Section 400.14 Criminal Code (Cth), and general law principles, do not permit this approach. It would be necessary for the jury to acquit the Accused on the offence charged in the indictment, before it would be open to the jury to find him guilty of an alternative offence by operation of s.400.14.

62. [84]

    I accept the Crown submission that s.5.4(4) only operates when the accused person is standing trial for an offence involving alleged recklessness under s.400.3(2) Criminal Code (Cth).

63. [85]

    In these circumstances, it is not necessary to consider whether the different pathways to conviction (if this approach was available) would trigger the requirement for an extended unanimity direction in any event, in accordance with the principles in Pratten v R [2014] NSWCCA 117 at [45]-[47] and Country Care Group Pty Ltd v Director of Public Prosecutions (Cth) [2020] FCAFC 30; (2020) 387 ALR 225 at [76]-[83].

64. [86]

    The submissions of the parties have assisted in clarification of the possible role of s.5.4(4) Criminal Code (Cth) in this trial, with the Court accepting the joint position of the parties that this provision has no role to play in the jury reaching a verdict at the trial, so that no amendment is required to the directions given to the jury concerning the alternative verdicts including a “no compromise” direction.

65. [87]

    In this context, I have also considered the appropriateness of the directions given to the jury so as to guard against an approach which may dictate the approach of the jury in its deliberations.

66. [88]

    Applying the principles in Stanton v The Queen and subsequent decisions referred to in this judgment (at [72]-[81]), and subject to any further application which may be made by the parties, I do not consider that directions given to the jury prevent them from considering the concept of recklessness until there is an acquittal on the charged offence. Rather, when considering the single live issue in the trial concerning the state of mind of the Accused, the jury is likely to consider the difference between “belief”, and the concepts of “recklessness” and “negligence”, which have been explained to the jury, in the context of possible alternative verdicts.

67. [89]

    Subject to any further submission that may be made by the parties, I do not consider that the directions given to the jury concerning the alternative verdicts (see [25]-[31] above) operate to fetter the jury’s ability to conduct its deliberations in such a way as the jury sees fit. I observe that no submission has been made by the parties that the directions given to the jury involve any error. Indeed, the joint submission of the parties is that the directions given to the jury are correct.

Conclusion

1. [90]

   It was for the reasons contained in this judgment that: