R v Chalabian (No. 1)

1. [1]

   JOHNSON J: By Notice of Motion filed 4 September 2020, the Crown applies for the trial of the Accused, Sevag Chalabian, fixed to commence on 12 October 2020, to be vacated.

2. [2]

   The legal representatives for Mr Chalabian (who is on bail) have indicated that he consents to the Crown application.

3. [3]

   It remains a matter for the Court to determine whether the trial of Mr Chalabian should be vacated.

Background to the Application

1. [4]

   Mr Chalabian is to stand trial upon an indictment charging two offences under the Criminal Code (Cth):

2. [5]

   On 6 December 2019, Fullerton J, as Criminal List Judge, listed the trial of Mr Chalabian to commence on 12 October 2020 with an estimate of four weeks. Her Honour indicated that I would be the trial Judge.

3. [6]

   Also on 6 December 2019, Fullerton J listed the trial of Stephen John Barrett to commence on 15 June 2020 with an estimate of four weeks. Her Honour indicated that I would be the trial Judge in that matter as well.

4. [7]

   Mr Barrett is charged with blackmail under s.249K(2) Crimes Act 1900 (NSW). The indictment against him alleges that, on or about 1 February 2017, at Sydney in the State of New South Wales, he did make an unwarranted demand with menaces with intent to obtain a gain by an accusation or a threatened accusation, that Adam Cranston, Jason Onley and Dev Menon had committed serious indictable offences, namely fraud and money laundering.

5. [8]

   Because of the inability to conduct a jury trial in June 2020 as a consequence of the COVID-19 pandemic, the trial of Mr Barrett was vacated and a new trial date has been fixed for 6 April 2021: R v Barrett (No. 1) [2020] NSWSC 793 at [2].

6. [9]

   Although Mr Chalabian and Mr Barrett are to be tried separately, there is some factual overlap between their trials. The Crown alleges that between March 2004 and May 2017 a number of individuals, including Adam Cranston, Jason Onley and Dev Menon, committed a major tax fraud described as the Plutus tax fraud. It is not necessary to outline the details of that alleged fraud in this judgment. The Crown alleges that Mr Barrett, along with Mr Hausman and Mr Rostankovski, blackmailed the alleged tax fraud conspirators on or about 1 February 2017. The Crown alleges that Mr Chalabian dealt with the proceeds of this blackmail demand, and also a second blackmail demand, alleged to have been made between February and May 2017.

7. [10]

   The trial of Adam Cranston and others, listed to commence in August 2020 before Payne J (sitting as a Judge of the Common Law Division) was itself vacated for a number of reasons.

8. [11]

   As a result of the adjournment of the trial of Adam Cranston and others and the trial of Mr Barrett, the trial of Mr Chalabian was to be the only trial to proceed in 2020 arising out of the Plutus investigation and prosecutions.

9. [12]

   A pretrial hearing proceeded before me in June 2020 concerning Mr Barrett with respect to the status of a draft incomplete and unsigned statement from Daniel Hausman which had been taken by officers of the Australian Federal Police (“AFP”) in 2019 before the view was formed that Mr Hausman would not be called by the Crown at the trial of Mr Barrett. Mr Hausman is pleading guilty to the charges brought against him.

10. [13]

    In R v Barrett (No. 1), I determined that the Crown was not obliged to disclose the draft incomplete and unsigned statement of Mr Hausman pursuant to the prosecution duty of disclosure, but that Mr Barrett and his legal representatives should be granted access to Mr Hausman’s draft statement under subpoena subject to conditions. That judgment was delivered on 24 June 2020 with a copy of the judgment being made available to the Crown and the legal representatives for Mr Barrett. In accordance with usual practice, given the pending jury trial of Mr Barrett (and the other Plutus trials), the judgment in R v Barrett (No. 1) was not published on Caselaw.

11. [14]

    The proceedings involving Mr Chalabian came before me for the first time on 19 June 2020 when I made a number of orders to progress the matter ahead of the trial date of 12 October 2020.

12. [15]

    On 5 August 2020, Mr Chalabian’s matter was mentioned once again before me, at which time there was no suggestion that an application would be made to vacate the trial. As the transcript of that day will reveal, discussion took place with Senior Counsel for the Crown and Senior Counsel for Mr Chalabian concerning the practical arrangements for a jury trial to proceed in the Supreme Court in October 2020 whilst restrictions brought about by the COVID-19 pandemic were still in place. The Crown informed the Court on that day that the Notice of Prosecution Case under s.142 Criminal Procedure Act 1986 (NSW) was to be filed and served by 24 August 2020.

13. [16]

    On 6 August 2020, at my suggestion, the legal representatives for the Crown and Mr Chalabian inspected the potential trial courts in the King Street Complex of the Supreme Court in company with myself, the Executive Director and Principal Registrar of the Supreme Court and my staff. Following that inspection, the parties agreed (as did the Court) that Court 3 in the King Street Complex was the most appropriate court to utilise for the purpose of Mr Chalabian’s trial. Administrative arrangements were put in place to secure Court 3 for the trial, together with the adjacent Court 2 which would be used by the jury in accordance with the special arrangements to operate during the COVID-19 pandemic.

14. [17]

    On 24 August 2020, the Crown filed and served the Notice of Prosecution Case under s.142 Criminal Procedure Act 1986 (NSW). This document was a detailed one containing a series of annexures including schedules of civilian evidence, Australian Tax Office evidence, AFP evidence and bankers’ evidence to be adduced by the Crown at the trial, together with schedules of electronic evidence in the form of telephone intercept recordings and surveillance device recordings to be relied upon by the Crown at the trial. Attachment H to the Notice of Prosecution Case contained a list of witnesses in those different categories.

15. [18]

    In accordance with directions previously made, the matter came before me again on 26 August 2020. In the course of discussion concerning the Notice of Prosecution Case, I noted the categories of witnesses proposed to be called by the Crown. Having regard to my experience in R v Barrett (No. 1), I observed, for more abundant caution, that the Crown did not propose to call any witness who was charged arising from conduct involved in this alleged criminal enterprise. To my surprise, the Crown indicated the following in the course of that discussion (T3.48-4.23, 26 August 2020):

16. [19]

    I listed a pretrial hearing for 1 and 2 October 2020 so that any pretrial issues could be argued and determined before the empanelment of a jury on 12 October 2020 for the purpose of a trial.

The Crown Application to Vacate the Trial

1. [20]

   On 4 September 2020, the Crown emailed to my Associate a Notice of Motion which had been filed that day which sought that the trial listed to commence on 12 October 2020 be vacated. The Notice of Motion was supported by an affidavit of Suzanne Therese Martinez affirmed 4 September 2020.

2. [21]

   Put shortly, the affidavit of Ms Martinez revealed that, by the afternoon of 2 September 2020, the Crown had formed the view that it intended to call Mr Hausman as a witness at the trial of Mr Chalabian. The affidavit stated that the AFP had been requested to prepare a further statement from Mr Hausman and that the “AFP has estimated that this process will take up to 12 weeks”. Also attached to the affidavit of Ms Martinez was a copy of my judgment in R v Barrett (No. 1).

3. [22]

   As the parties were aware, I was on leave between 31 August 2020 and 28 September 2020. The Crown application by Notice of Motion was drawn to my attention. In accordance with paragraph 15 of Practice Note SC CL 2 (Criminal Proceedings), the application should have been made to the Criminal List Judge. However, after consultation with R A Hulme J, the Criminal List Judge, given my knowledge of the matter, I determined to progress the application by way of email communications with the parties. At my request, my Associate sought an indication of the defence response to the Crown application. By email dated 9 September 2020, the solicitor for Mr Chalabian (Ms Maxine Malaney) stated:

4. [23]

   This email was referred to me and I requested my Associate to communicate with the parties in the following terms in an email dated 9 September 2020:

5. [24]

   In response to the email from my Associate of 9 September 2020, an affidavit of Hamish John Williams affirmed 11 September 2020 was furnished by the Crown by email sent that day. Mr Williams provided the following explanation as to why a 12-week period had been estimated for the taking of a statement from Mr Hausman (paragraphs 6-8 of affidavit):

6. [25]

   In explanation for the delay in deciding to call Mr Hausman as a witness in the Crown case, Mr Williams stated (paragraphs 9 and 10 of the affidavit):

7. [26]

   In further explanation of the Crown application, Mr Williams stated (paragraphs 11-14 of the affidavit):

8. [27]

   In response to an email sent on 15 September 2020 by the Crown as to the status of the Crown application to vacate the trial, an email was sent by my Associate to the parties on 18 September 2020 which stated:

9. [28]

   Today, I have heard further submissions from the Crown and Senior Counsel for Mr Chalabian concerning the Crown application. In the course of those submissions, the Crown indicated that she and her junior, as the counsel briefed in Mr Chalabian's trial only, made clear that they wished to interview Mr Hausman themselves for the purpose of forming a view as to whether he should be called by the Crown. That interview took place, as indicated in the affidavit of Mr Williams, and the view was formed that the Crown wished to call Mr Hausman. That Crown view was communicated promptly to the legal representatives for Mr Chalabian.

10. [29]

    The Crown has expressed regret at the timing of this application and understands the inconvenience and other practical consequences flowing from the application being made at this late stage.

11. [30]

    The Crown informed the Court that it was now expected that the statement from Mr Hausman will be completed in late October 2020. The Court was also informed that Mr Hausman's sentencing proceedings are now listed in the District Court on 23 March 2021.

12. [31]

    In response to a question from the Court (asked for more abundant caution) the Crown indicated that it was not proposed to call Mr Rostankovski as a Crown witness in the trial of Mr Chalabian.

13. [32]

    Senior Counsel for Mr Chalabian indicated that the defence position in consenting to the application flowed from the necessity for a statement to be taken from Mr Hausman and served upon the defence, and for Mr Hausman to be sentenced before coming to give evidence. The position of the defence, faced with the Crown application, is an understandable one.

Decision on Application to Vacate the Trial

1. [33]

   I come now to explain, after that lengthy chronological narrative, my decision on the application to vacate the trial.

2. [34]

   At the outset, it is appropriate to observe that, so far as the Court is concerned, it was ready to proceed with the trial of Mr Chalabian on 12 October 2020, with the Court having made special arrangements to secure a courtroom at the request of counsel for the parties for the trial to proceed.

3. [35]

   It is a notorious fact that the impact, in this State and elsewhere, of the COVID-19 pandemic upon the criminal justice system has been substantial, including the system of jury trials in the Supreme and District Courts. As the vacation of Mr Barrett’s trial illustrates, it was simply not possible for a jury trial to proceed in the Supreme Court in June 2020 given restrictions at that time upon community life brought about by the COVID-19 pandemic.

4. [36]

   The trial of Mr Chalabian was to proceed in October and November 2020 effectively as a special fixture.

5. [37]

   The Court has a significant responsibility to facilitate the holding of criminal jury trials in a timely fashion. There is a strong public interest that, once fixed for hearing upon the basis that the parties were ready to proceed, a criminal trial should ordinarily proceed with expedition: R v Alexandroaia (1995) 81 A Crim R 286 at 291; Slotboom v R [2013] NSWCCA 18 at [36]. Delay is to be avoided having regard to the particular vices flowing from the passage of time.

6. [38]

   In June 2020, the Court was informed, in the context of the pretrial hearing leading to R v Barrett (No. 1), that Mr Hausman was not to be called as a Crown witness. That position had been adopted following an extended period in 2019 when AFP officers spoke to Mr Hausman for the purpose of obtaining from him a draft induced statement. What occurred in 2019 was summarised in R v Barrett (No. 1) at [29]-[34]:

7. [39]

   The sentencing proceedings in the District Court concerning Mr Hausman were adjourned from August 2020 to December 2020. As I have noted, the Court has been informed today by the Crown that the proceedings have been further adjourned until March 2021.

8. [40]

   I note that the Crown has briefed different counsel to prosecute Mr Chalabian from those who appear for the Crown in Mr Barrett's case and the case of the other persons (including Mr Adam Cranston) whose trial will proceed in due course before Payne J.

9. [41]

   It is not clear on the evidence why it took until early September 2020 for counsel briefed by the Crown, for the purpose of Mr Chalabian's trial, to be requested to advise as to whether Mr Hausman should be called as a Crown witness, with Mr Hausman to be interviewed by Crown counsel for that purpose.

10. [42]

    It appears that what had occurred in the context of R v Barrett (No. 1) was not communicated to counsel briefed to prosecute Mr Chalabian. It might be thought that there was ample opportunity, if there was to be reconsideration of the question of whether Mr Hausman should be called as a witness at the trial of Mr Chalabian, for that issue to be addressed in the period after 24 June 2020 when I delivered judgment in R v Barrett (No. 1). As I have said, it is not clear why nothing was done in the months of July and August 2020 in that respect, which, if done, may have raised the possibility of the trial date for Mr Chalabian being retained.

11. [43]

    I accept what has been said by Senior Counsel for the Crown, that she and her junior in the Chalabian case were not informed of the matter, nor asked to undertake this function until a time in late August 2020.

12. [44]

    However, this is not a case where Mr Hausman indicated for the first time in 2020 a willingness to assist the Crown, so that the process of taking a statement commenced only from that time. There had been an extended period in 2019, when AFP officers spoke to Mr Hausman and took a draft but incomplete statement from him, before determining that the process should be discontinued.

13. [45]

    In my view, there is still no satisfactory explanation as to why, with appropriate expedition, AFP officers (advised by representatives of the Commonwealth Director of Public Prosecutions) could not have undertaken this process prior to August 2020, having regard to the commencement of the taking of the statement from Mr Hausman in 2019. I accept that this process would take some time. However, in circumstances where there was a trial fixed, there was an element of urgency and a need for expedition. This was an obligation that extended on the prosecution side through the Commonwealth Director of Public Prosecution to AFP officers undertaking the investigation. I note that it is now said that the statement of Mr Hausman will be completed by late October 2020, a process certainly less than the period of up to 12 weeks indicated to the Court on 4 September 2020.

14. [46]

    Both the Crown and the defence are subject to statutory duties to take steps to reduce delays in proceedings on indictment in accordance with s.134 Criminal Procedure Act 1986 (NSW). An important provision in this respect concerns mandatory pretrial disclosure by the prosecutor and the accused person in accordance with ss.141-144 Criminal Procedure Act 1986 (NSW). Section 142(1)(c) requires the prosecution notice to contain “A copy of a statement of each witness whose evidence the prosecutor proposes to adduce at the trial”. In rejecting a defence submission in R v Barrett (No. 1) that the Crown was under an obligation under s.142 to disclose Mr Hausman’s draft and incomplete statement to the defence, I said at [89]-[92]:

15. [47]

    As outlined earlier in this judgment, the Crown took a considerable time before furnishing a settled prosecution notice under s.142 on 24 August 2020. The s.142 notice had been prepared, filed and served for the purpose of a trial scheduled to commence less than two months later on 12 October 2020. That notice did not indicate in any fashion that consideration was being given to calling Mr Hausman as a Crown witness at the trial of Mr Chalabian.

16. [48]

    An incidental observation made by me on 26 August 2020 led to the surprising revelation by the Crown that consideration was being given to the calling of a co-accused of Mr Chalabian as a Crown witness (see [18] above). That indication crystallised into the application made by the Crown in the Notice of Motion filed 4 September 2020.

17. [49]

    I have given serious consideration to refusing the Crown application to vacate the trial of Mr Chalabian. The trial has been fixed for some months and special arrangements have been made for the trial to proceed in the challenging conditions posed by the COVID-19 pandemic. Other trials were not listed in this period in the expectation that the trial of Mr Chalabian was to proceed. Until 26 August 2020, the common position of the parties as expressed consistently to the Court, was that the trial would proceed on that day.

18. [50]

    It is relevant, but not decisive, that Mr Chalabian consents to the Crown application to vacate the trial. I am not in a position to make any assessment as to whether the evidence of Mr Hausman may, in some way, assist Mr Chalabian. I am left in the position that this is an unopposed application to vacate the trial.

19. [51]

    It would be a grave step for the Court to force the trial on in circumstances in which both the Crown and Mr Chalabian seek that the trial be vacated and that Mr Hausman give evidence at the trial. It is apparent from the Crown Case Statement that relevant events involving Mr Chalabian are closely intertwined with actions and words of Mr Hausman.

20. [52]

    There is a powerful argument, based on the Court’s statutory obligations to avoid delay, that the resources of the Court should be utilised, and the parties who are otherwise ready to proceed to trial without Mr Hausman being called, should go forward with the trial proceeding. However, given the common position of the Crown and Mr Chalabian on the present application, I do not think that forcing the trial on would accord with the interests of justice. Accordingly, I have determined to accede to the Crown application.

21. [53]

    It is appropriate to observe that this outcome is a frustrating one for the Court and the community in circumstances where other persons who are waiting for their trials to proceed in the Supreme Court, many of whom are in custody, have lost the opportunity to have their trial proceed in this period because of the very late and surprising application by the Crown to alter its position concerning Mr Hausman after months in which a contrary position had been indicated to the Court in related proceedings.

22. [54]

    I will not fix a new trial date for this matter. It is appropriate that the matter be placed in the Arraignments List on 6 November 2020 so that the Criminal List Judge can determine a new trial date in accordance with other priorities in the Criminal List including, as I have observed, persons who are in custody awaiting their trials.

23. [55]

    I make the following orders: