R v Michael John Issakidis

1. [1]

   On 10 November 2014 the Court ordered the discharge of a jury in so far as they were empanelled to try the accused, Michael Issakidis (the “first trial”): R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595; (“Dickson (No 12)”). The first trial was in its 55th day. The trial of his co-accused, Anthony Dickson, continued. It resulted in his conviction. He was sentenced to a substantial term of imprisonment: R v Anthony James Dickson (No 18) [2015] NSWSC 268 (“Dickson (No 18)”). Mr Issakidis was privately represented at the first trial.

2. [2]

   On 27 January 2015 the Commonwealth Director of Public Prosecutions (the “CDPP”) advised Mr Issakidis’ solicitor that it intended to proceed to a further trial against his client (the “second trial”).

3. [3]

   On 19 March 2015 Mr Issakidis filed a notice of motion seeking an order that the CDPP pay the costs thrown away as a result of the discharge of the jury at the first trial. In the alternative he sought an order that his trial be stayed on the basis that he was indigent, charged with serious offences and “through no fault [of his own] is unable to obtain legal representation” (see Dietrich v The Queen [1992] HCA 57; 177 CLR 292; “Dietrich”).

4. [4]

   At the hearing of the motion Senior Counsel for Mr Issakidis, Mr B.W. Walker SC, accepted that the Court could not make the first order sought in the notice of motion. The application for the alternative order was maintained although it was accepted that, if granted, it would be framed so that it would dissipate if representation was made available. However Mr Walker SC explained that his client’s principal claim for relief was an order that the proceedings against his client be stayed unless and until the CDPP paid the costs thrown away by reason of the first trial having been aborted. The argument proceeded accordingly.

5. [5]

   At [68] below I discuss the authorities that establish the principles governing the granting of the relief sought by Mr Issakidis. To apply those principles it is first necessary to describe and make findings concerning the nature of the proceedings, the reasons the first trial aborted, which party, if any, was at fault, the costs thrown away by reason of the first trial having been aborted, and the capacity of Mr Issakidis to retain legal representation without the order(s) he seeks. These matters are addressed at [16] to [67].

6. [6]

   In summary in so far as Mr Issakidis seeks a stay of the proceedings on the basis of Dietrich then his application will be refused. He has not demonstrated that, at this point, he is unable to obtain legal representation for the second trial through no fault of his own. However the Court will make an order staying the proceedings unless and until the CDPP pays the reasonable costs thrown away by reason of the first trial having been aborted. I am satisfied that responsibility for the discharge of the jury at the first trial lies with the prosecution. In the circumstances that has occasioned a relevant form of unfairness to Mr Issakidis which justifies the granting of a temporary stay pending the payment of those costs.

7. [7]

   In early 2012 the Australian Federal Police (the “AFP”) executed search warrants on a number of premises as part of an investigation into an alleged tax fraud by Mr Issakidis and Anthony James Dickson. Following the execution of those warrants officers from the Australian Taxation Office (the “ATO”) executed notices under s 263 of the Income Tax Assessment Act 1936 (Cth) (the “ITAA”) and took copies of documents that had not been seized by the AFP. Subsequently the ATO sent a notice to the AFP under s 264 of the ITAA which resulted in the production to the ATO of the material seized by the AFP, including copies of electronic material. The ATO loaded this material onto an electronically searchable database with the material it seized under s 263 of the ITAA.

8. [8]

   Mr Dickson and Mr Issakidis were both arrested and charged. On 27 May 2013 they were committed for trial.

9. [9]

   On 26 May 2014 the Crown served on Mr Issakidis’ solicitor a notice under s 142 of the Criminal Procedure Act 1986 (the “CPA”). The notice stated that pre-trial disclosure of documents had been effected by an earlier letter dated 24 October 2013. A schedule enclosed with that earlier letter identified the ATO as a “third party” holder of documents and provided a very general description of the documents held (see Dickson (No 12) at [20]).

10. [10]

    Just prior to trial a subpoena was issued on behalf of Mr Dickson to the ATO which sought printed copies of its database concerning Neumedix Health Australasia Pty Ltd (“NHA”) for the period 15 November 2005 to 30 June 2014. The ATO applied to set the subpoena aside on the basis that it was too wide. It was withdrawn (see Dickson (No 12) at [21]).

11. [11]

    On 21 August 2014 Mr Issakidis and Mr Dickson were arraigned before a jury panel. The indictment contained six counts only two of which concerned Mr Issakidis, namely counts 1 and 6. Count 1 charged Mr Issakidis with conspiring with Mr Dickson to dishonestly cause a loss, or a risk of loss, to the Commonwealth contrary to s 135.4(5) of the Criminal Code Act 1995 (Cth) (the “Code”). The maximum penalty for an offence under s 135.4(5) is imprisonment for ten years.

12. [12]

    Count 6 charged Mr Issakidis with conspiring with Mr Dickson to commit an offence under s 400.3(1) of the Code, namely deal with property of a value of $1 million or more believing it to be the proceeds of crime, contrary to s 11.5(1) of the Code. (Counts 2 to 5 were alternative counts to count 1 and only concerned Mr Dickson). The maximum penalty for an offence under s 11.5(1) of the Code is that provided for an offence under s 400.3(1), namely imprisonment for twenty five years or 1500 penalty units or both.

13. [13]

    The trial proceeded. On 21 October 2014 the Crown closed its case. On 24 October 2014 Mr Dickson commenced giving evidence in his case. On 4 November 2014 he completed his evidence in chief. Around that time an ATO officer, who was also a Crown witness, Mr Harvey, heard Mr Dickson’s evidence and undertook various searches on the ATO’s database. Those searches revealed a number of documents that he provided to the prosecution team, who then provided them to the defence. The documents were potentially very damaging to Mr Dickson’s case. The Crown Prosecutor disclaimed any reliance on them. However, Mr Issakidis sought a discharge of the jury in his case and an order for a separate trial.

14. [14]

    Mr Issakidis’ application was argued on 7 November 2012. On 10 November 2012 the Court refused his application for a separate trial but granted the application for a discharge (Dickson (No 12)).

15. [15]

    The trial in respect of Mr Dickson continued. On 22 December 2014 the jury returned verdicts of guilty on counts 1 and 6. This rendered it unnecessary to take verdicts on counts 2 to 5. On 20 March 2015 Mr Dickson was sentenced to terms of imprisonment for each offence. Their combined effect was that he was sentenced to eleven years imprisonment with a non-parole period of seven years (Dickson (No 18)).

The Crown case

1. [16]

   The Crown case on counts 1 and 6 in relation to Mr Dickson was outlined in detail in Dickson (No 18). In summary the Crown case on count 1 at the first trial was that between 15 November 2005 and 2 December 2011 Mr Dickson and Mr Issakidis agreed to cause Neumedix Health Australasia Pty Ltd (“NHA”) to make false depreciation claims in its tax returns of many hundreds of millions of dollars. Each of Mr Issakidis and Mr Dickson were directors of NHA. The depreciation claims were in respect of the alleged cost of certain medical technologies acquired by NHA. The Crown alleges that it was agreed that no such cost was to be incurred and the agreements purporting to record their acquisition were shams. The Crown contends that this was undertaken to enable NHA to avoid incurring tax liabilities on income it was deemed to have received as the owner of units in a number of trusts. These trusts generated very large taxable profits from their participation in certain financing transactions that were arranged by Mr Dickson with the ANZ Banking Group Ltd (“ANZ”) and some of its clients. As part of these arrangements NHA received substantial cash distributions representing 9% of the taxable profits of the trusts. Mr Dickson was sentenced on the basis that the level of loss intended to be caused by this fraud was approximately $135 million (Dickson (No 18) at [76]).

2. [17]

   In relation to count 6, the Crown case was that Mr Dickson and Mr Issakidis agreed to deal with the “proceeds of crime”, being the amounts standing in various bank accounts that represented the cash distributions from the trusts to NHA. The Crown alleged that Mr Dickson and Mr Issakidis agreed to cause the funds to be distributed offshore to various accounts controlled by entities associated with Mr Dickson and then repatriated to Australia, largely for their own enrichment. Mr Dickson was sentenced on the basis that the amount so laundered was $63,715,000.00 (Dickson (No 18) at [105]) and the amount he personally received was just over $19 million. The Crown alleged that Mr Issakidis received the benefit of just over $15 million.

3. [18]

   This brief summary and the length of the first trial gives some indication of its complexity. A further indication of that is that the documentary exhibits tendered at the trial amounted to in excess of thirty lever arch folders. Each juror was given in excess of twenty folders of documents. The summing up occupied approximately four days, although it was interrupted by the terrible events on 15 to 16 December 2014 in central Sydney. The elements of the offences that Mr Issakidis is charged with are not straightforward. The instructions to the jury directed them concerning the nature and proof of a conspiracy and also included a direction as to circumstantial evidence.

4. [19]

   In an affidavit sworn in support of this application Mr Issakidis stated that, although he is admitted as a solicitor, he has not practised since 1980 and has never practised in criminal law. He recounts his belief that he does not have the knowledge or skill to defend himself. Given the complexity and size of the Crown’s case against him, I agree with his assessment.

The reason why the first trial aborted

1. [20]

   The authorities discussed below at [69ff] indicate that an important factor to consider in relation Mr Issakidis’ principal claim for relief is to determine why an earlier trial aborted, whether the Crown was at fault and, if so, the nature of its default. The reasons the first trial aborted were stated in Dickson (No 12). On this application the Crown led some evidence explaining the circumstance surrounding the disclosure of material obtained by Mr Harvey in early November 2014 and why it was not disclosed earlier. That material is only to be considered in light of the repeated statements by the Crown Prosecutor on the hearing of this application that the Crown does not “cavil” with the findings in Dickson (No 12) [1] .

2. [21]

   One of the documents revealed by the search undertaken by Mr Harvey referred to in [13] was an email chain between Mr Dickson’s brother, John Dickson, and their sister who said she was relaying messages from Anthony Dickson. The email chain was marked MFI 47A. Its contents and their significance was described in Dickson (No 12) at [50] to [53] as follows:

3. [22]

   The prejudice that was occasioned to Mr Issakidis by the late production of this material was explained in Dickson (No 12) at [56] as follows:

4. [23]

   The reference to the “other documents” in Dickson (No 12) at [57] is to the two documents marked MFI 47B and 48 which are addressed below. The reference to the “matters addressed below” in Dickson (No 12) at [56] is to what was said in Dickson (No 12) at [65] to be the “theoretical possibility” that John Dickson could be recalled from Hong Kong to give further evidence (see [30]). That possibility was described as theoretical because it was not known whether it was possible for John Dickson to return and the potential implications of that email were such that it could have occasioned the need for a significant alteration in the conduct of Mr Issakidis’ case to that time. Those matters were not considered further because of the issue raised by the disclosure of the other material.

5. [24]

   In Dickson (No 12) at [66] I found that the trial of Mr Issakidis had become unfair. I recounted two matters as demonstrating that, namely what was revealed by the disclosure of MFI 47B and MFI 48 and the failure to disclose MFI 47A to Mr Issakidis even though he was entitled to it. For the sake of clarification I record that, given the timing of the disclosure of MFI 47A and its potential significance not just to the credibility of John Dickson but to the role he may have played in assisting his brother in perpetrating a fraud on the taxation authorities, its non-disclosure warranted the aborting of the first trial in its own right.

6. [25]

   In Dickson (No 12) at [53] I found that this email chain was in the possession of the AFP but not disclosed to the defence in advance of the trial. On the hearing of this application an affidavit from a federal police officer, Ian Durrand, was read which confirmed that the email chain was seized by the AFP during its execution of the search warrants but was not provided to the CDPP and thus not provided to the defence. He has no direct knowledge of its non-disclosure but speculates that it was due to “human error”. Similarly, the solicitor with carriage of the matter, Ms Purchase, testified to a belief that the email was not disclosed due to an “oversight”.

7. [26]

   This material does not advance the matter beyond Dickson (No 12). The email was clearly material that ought to have been disclosed but was not. While there is no reason to conclude that the non-disclosure was “intentional”, in the sense that it was held back knowing that it was or could be potentially relevant or even exculpatory, the prosecution was nevertheless “at fault” for its failure to disclose this item. Neither Ms Purchase nor Officer Durrand explained the criteria that was applied by the relevant AFP officers in selecting the material seized under warrant for disclosure to the defence. Mr John Dickson was a very significant witness in the Crown case against Mr Issakidis. He gave evidence that was capable of directly implicating Mr Issakidis in Mr Dickson’s use of a bogus name that was deployed in money laundering (see R v Dickson; R v Issakidis (No 9) [2014] NSWSC 1460 at [63]). It is difficult to see on what possible basis any email containing messages between John Dickson and his brother could not be selected for disclosure to the defence.

8. [27]

   Three other documents were provided by Mr Harvey to the prosecution team in early November 2014. They were described in Dickson (No 12) at [41] to [49] as follows:

9. [28]

   Thus, in Dickson (No 12) at [44] I referred to a document known as the “more advanced version” of a draft non-competing agreement, but stated that it was not clear whether that document had previously been disclosed by the Crown to the defence. It played no part in the subsequent analysis. In her affidavit Ms Purchase stated that it was disclosed to the defence in May 2014 prior to the first trial.

10. [29]

    In relation to MFI 48 referred to in Dickson (No 12) at [45] and MFI 47B referred to in Dickson (No 12) at [48] both Mr Harvey and Ms Purchase confirmed that these documents was seized by the ATO under s 263 of the ITAA and not the AFP.

11. [30]

    In Dickson (No 12) at [57] (see [22]) I explained the use that Mr Issakidis could have made of these documents. In Dickson (No 12) at [65] and [69] I described them as “potentially exonerative”, a description that is to be taken as accepted by the Crown given that it does not “cavil” with the findings in Dickson (No 12). However their true significance was not just that they were potentially exonerative but what they revealed about the Crown’s access to them and other material held by the ATO on its database. On those issues I made the following findings in Dickson (No 12) at [60] to [67]:

12. [31]

    In his statement Mr Harvey explained that the ATO developed a database known as “Nuix” which has a reasonably sophisticated key word searching facility that is superior to that possessed by the AFP or the CDPP. In this matter the ATO had access via Nuix to material it obtained from the various sites after the AFP executed search warrants (the “s 263 material”) and the material the ATO received from the AFP (the “s 264 material”) including both hard copy paper and the images of computer drives seized by the AFP. He said that the ATO provided a “list” to the CDPP of the “ATO documents that were held at a broad level” on 22 October 2013. This list was inserted into the disclosure notice sent to the defence around the same time (see [9] above). In relation to the Nuix system Mr Harvey stated that Nuix cannot produce a “list of each electronic file describing its nature or contents”.

13. [32]

    Mr Harvey also explained that, in handing over documents to the prosecution team in early November 2014, he did not know whether or not that material was in evidence. After the first trial, on 11 March 2015 the ATO wrote to Mr Issakidis’ solicitor, Mr Shields, providing eight DVDs of material and indicating that there is further material that the ATO is proposing to provide which must be first reviewed to determine what is unrelated to the subject matter of the proceedings and for which disclosure is prohibited. In respect of that material it is proposed to provide indexes.

14. [33]

    In her affidavit, Ms Purchase explained that in October 2013 she received a “general list” of the material that had been obtained by the ATO and that was forwarded to Mr Issakidis’ solicitor on 24 October 2013. She stated that she did not personally access the ATO’s Nuix database. She said that by 2 July 2014 she had become aware that the ATO had obtained the s 264 material from the AFP and the ATO could search that material on the ATO’s database. She was absent from Court when Mr Harvey provided to the prosecution team the documents noted above in early November 2014. She said that she first learnt on 6 November 2014 that copies of the s 263 documents were on the ATO’s database and that searches could be conducted on that material (as well as the s 264 material).

15. [34]

    The findings in Dickson (No 12) at [61] and [63] about the level of access enjoyed by the CDPP to the ATO’s database were in part based on the contents of a letter sent by the CDPP to the defence in 2 October 2014 concerning MFI 33, which revealed that the CDPP had asked the ATO to provide a summary of a teleconference involving Mr Dickson, a Crown witness and the New Zealand tax authorities (Dickson (No 12) at [31]). The circumstances surrounding the making of that request were not addressed in either Mr Harvey’s statement or Ms Purchase’s affidavit. In her oral evidence Ms Purchase stated that she requested that document from Mr Harvey knowing that it was not in the AFP brief. She recalled that Mr Harvey responded promptly and indicated that the ATO had some means of searching material beyond that in the AFP brief [2] . Ms Purchase stated that she knew that the ATO had the s 263 material she but did not know one way or another whether it had that material on a database and did not ask [3] .

16. [35]

    Even if, contrary to the Crown Prosecutor’s statement, I utilised this material to “cavil” with the findings in Dickson (No 12) concerning the level of access enjoyed by the Crown to the ATO’s database, this evidence only confirms that the CDPP had access to the ATO’s database including the s 263 material, although the solicitor from the CDPP with carriage of the matter did not specifically advert to the fact that the ATO was accessing that material on her request.

17. [36]

    Mr Harvey’s statement suggests that, contrary to Dickson (No 12) at [62], there may have been a practical impediment to the ATO providing a “list” identifying all documents held by the ATO. However this does not advance the CDPP’s position. If a practical impediment to the fulfilment of the Crown’s obligations under s 142 of the Criminal Procedure Act 1986 arises then the appropriate response is to seek a waiver under s 148. No doubt such an application would then be addressed by considering alternative measures of making disclosure to the defence such as that which eventually occurred via the ATO’s letter of 11 March 2015.

18. [37]

    The critical point is that once the position was reached that the CDPP was proffered a level of access to evidentiary material that the defence did not have, then prosecutorial disclosure obligations were enlivened. It was simply not accurate to describe the ATO as a “third party” when the CDPP had access to its database, via requests of Mr Harvey, and the same facility was not offered to the defence.

19. [38]

    Dickson (No 12) at [66] identifies two bases on which Mr Issakidis’ trial had become unfair and thus warranted a discharge of the jury. I have already addressed one of them at [24] to [26]. The other reason is also one for which the Crown must bear responsibility. It accessed material from the ATO when it should have appreciated the likelihood that the ATO would search material which the defence did not have access to.

Costs thrown away from the first trial

1. [39]

   Throughout the proceedings in this Court Mr Issakidis has been represented by a Queensland based solicitor, Mr Peter Shields. Mr Issakidis lives in Queensland. Mr Shields is an experienced solicitor and practices exclusively in criminal law. He was previously a police officer.

2. [40]

   In his affidavit sworn 19 March 2015 Mr Shields stated that the costs of the preparation and conduct of the first trial until it was aborted were $918,500.00. All but $86,509.31 of that amount has been paid. These costs did not include the costs incurred from the time of Mr Issakidis’ arrest until the conclusion of committal proceedings.

3. [41]

   In his affidavit sworn 11 May 2015 Mr Shield’s expanded upon this analysis to arrive at a figure for the costs that were rendered futile by the aborting of the first trial. He stated that Senior Counsel was retained at a rate of $5,500.00 per day inclusive of GST and either his services of those of another solicitor in his firm were provided at a rate of $4,400.00 per day, which included the cost of photocopying, flights, accommodation but not Court transcript. He estimated that approximately half of the preparation of the first trial could be deployed for the second trial but the remainder has been thrown away bearing in mind the passage of time between the two trials and the likelihood that the second trial will be different to the first trial. He included those costs thrown away in the preparation, the costs involved in the trial itself and various interlocutory applications conducted on behalf of Mr Dickson to yield a figure of $734,800.00 as the costs rendered futile by the aborting of the first trial.

4. [42]

   There was no real challenge to this this analysis. Subject to the matters addressed in [89], I accept it.

5. [43]

   Mr Shields also addressed the work likely to be involved in the preparation of the second trial. On the view I take of the authorities this is irrelevant to his principal claim for relief, but against the contingency that is incorrect, I will address it. Mr Shields stated that the preparation for the second trial would require a review of the entirety of the Crown case as well as further material served by the Crown and the ATO since the first trial, the taking of instructions on that material as well as the making of a number of interlocutory applications. He estimated that an accredited specialist solicitor would need four to six months full time work to prepare for the trial. The difference between that assessment and the work done in relation to the first trial concerns the need to review the material that has since been provided by the ATO [4] .

6. [44]

   The Crown contended that this was a significant overstatement. It submitted that, as its case at the first trial occupied eight weeks it can be expected that it would only last six weeks in the absence of Mr Dickson. Mr Shields did not dispute that estimate, but added that he did not have “control over the way the Crown conducts their case” [5] .

7. [45]

   As noted in Dickson (No 12) I expect that a trial of Mr Issakidis alone will be different to the first trial given that most of the acts said to be undertaken in the pursuit of the conspiracies were undertaken by Mr Dickson. Overall I anticipate that the length of the trial before the jury will be less, however I anticipate that there may be considerable scope for pre-trial argument about, for example, the relevance of Mr Dickson’s conduct to Mr Issakidis’ involvement in the conspiracy. A conservative estimate of the length of the trial is ten weeks comprising a Crown case occupying six weeks, a defence case occupying two weeks and two weeks for submissions, summing up and verdict. A conservative estimate of the time involved in preparing for the second trial is eight weeks preparation for Mr Shields or a similar solicitor, four weeks for Senior Counsel which includes pre-trial applications, discussions with the Crown and a review of the ATO material. Adopting the charge out rates used for the first trial, this yields a rough estimate of the costs of a retrial of Mr Issakidis from this point of approximately $780,000.00 excluding transcript charges. This estimate has a conservative bias but it suffices to demonstrate that the costs thrown away from the first trial are likely to be less than the costs of a retrial.

Mr Issakidis’ capacity to retain representation at the second trial

1. [46]

   Shortly after his arrest asset forfeiture proceedings were commenced against Mr Issakidis (and Mr Dickson) under the Proceeds of Crimes Act 2002 (Cth) (“POCA” and the “POCA proceedings”). The relief sought in those proceedings includes forfeiture and pecuniary penalty orders. In the interim a number of freezing orders have been made. Annexed to one of Mr Issakidis’ affidavits is a list of the restrained property that has been provided to him by the AFP. The list includes what is described as his “interest” in various properties or companies that own various properties, a number of motor vehicles and a yacht. Their value is said to total $9,601,731. Some of the assets derive a rental stream which he also cannot access. The list also identified approximately $2 million in accounts in the name of Dampier Finance FX Solutions, which the Crown contends was under the control of either Mr Dickson or Mr Issakidis or both. Mr Issakidis denied ever having any control over those funds. No evidence was presented on this application to suggest that he does.

2. [47]

   On 5 March 2015 the solicitor for Mr Issakidis’ wife wrote to the solicitor with carriage of the AFP proceedings seeking the release of her “share” in certain properties that are the subject of freezing orders. All but one of those properties were acquired by Jodaway Pty Ltd in 2002, being three years prior to the commencement of the conspiracy alleged by the Crown against Mr Issakidis. Mr Issakidis and his wife each own 50% of the shares in Jodaway. The other property was acquired by Hildon Pty Ltd in 1999. Again each of Mr Issakidis and his wife own 50% of the shares in Hildon. The letter requested access to these properties so that Mrs Issakidis could fund Mr Issakidis’ defence.

3. [48]

   On 20 March 2015 the AFP’s solicitor responded. The request for release of assets was refused. The letter asserted that the properties in question were under the effective control of Mr Issakidis and may be required to satisfy any pecuniary penalty order made against Mr Issakidis. The letter also noted that s 24(2)(ca) of POCA precludes the release of property the subject of a restraining order for the purpose of funding legal costs “in connection with” proceedings for an offence against a law of, inter alia, the Commonwealth. (Section 293 of POCA confers a right of indemnity on the Legal Aid Commission out of the forfeited assets of an accused person for such payments as it may make for legal costs in respect of their defence.)

4. [49]

   The end result is that none of the restrained assets are available or will be available to Mr Issakidis to pay for representation at the second trial.

5. [50]

   In his affidavit sworn 11 May 2015 Mr Issakidis stated that he did not have the capacity to retain legal representation for a further trial as he had “insufficient funds”. He added that all “assets (other than those subject to restraint) of myself, companies in which I have an interest, my wife, family members and friends have been exhausted” by the first trial. He states that he does not earn an income and that he has been living on his credit card which has a balance of $40,000.00.

6. [51]

   Mr Issakidis also stated that Craxgold Pty Ltd (“Craxgold”), a company that is 100% owned by his wife, has a receivable of $149,500.00. In oral evidence he explained that Craxgold owned 25% of the units in a unit trust that had sold the intellectual property in the product “98 Alive Melacon”, to a Singapore company in 2013 for $3 million which was payable in tranches the first of which was $2.1 million. He stated that Craxgold had received its share of the $2.1 million tranche and it had been dissipated. Its share of the balance of the purchase price was the “receivable” referred to by Mr Issakidis in his affidavit. However, according to Mr Issakidis Craxgold has no present entitlement to those funds as whether and when its share of the remaining purchase price will be payable “depends on the next few years” there being no “set date” [6] and is otherwise dependent on the trustee of the unit trust making a distribution. Mr Issakidis is not the trustee and stated that he had no interest in the Singapore based purchaser [7] .

7. [52]

   The principal attack by the Crown on Mr Issakidis’ assertion of impecuniosity involved a comparative analysis of his financial position prior to the alleged conspiracy the subject of the charges against him with the position after it.

8. [53]

   In relation to the position prior, Mr Issakidis stated that, prior to March 2006, he had some success in property development but that he only participated as a principal in relatively small scale developments, including those involving Hildon and Jodaway [8] . He agreed that as at early 2006 he was “comfortabl[y]” wealthy [9] and that the net worth he controlled was “several million” [10] which included a “million and a half, maybe a million” in liquid assets [11] . He was not pressed on what several meant but in view of his years in business I take “several” to mean more than three. However, Mr Issakidis’ answers also reveal that he had an expensive lifestyle. He referred to his “love of cars” and “travel” [12] . The list of restrained assets includes six luxury vehicles with original purchase prices for five of them totalling in excess of $2.7 million as well as a yacht that had an original purchase price of $1.485 million. It appears that they were all purchased during the period of the alleged conspiracy and most likely with funds originally derived from NHA’s receipt of funds from the trusts (see [16]).

9. [54]

   The second step in the Crown’s attack on Mr Issakidis’ evidence on this topic is to point to the funds he received from NHA, and compare that with the amounts that were frozen in the POCA proceedings. The various transactions are listed on a colour chart tendered at the first trial and on this application (see Dickson (No 18) at [88]). He did not dispute the Crown’s calculation that $12.7 million was transferred to himself, his wife or entities associated with each or both of them over a period of three years between 2006 and 2009 under the ANZ transactions [13] . He also agreed that he received $3 million “at an earlier time” that was used to purchase his home [14] . I understand the reference to an “earlier time” to be a period prior to or around March 2006. The Crown compared that amount with the just under $12 million in assets and cash that were the subject of the asset freezing orders (or $9.6 million if one excludes the proceeds of the bank account that he denied any interest in) and contended that the difference was unexplained.

10. [55]

    When he was asked about this, Mr Issakidis stated [15] :

11. [56]

    The reference to the “Nana Hoshi partnership” in this answer is to an entity that the Crown alleged received funds ultimately sourced from the funds the subject of count 6. The reference to “Ashurst solicitors” is to an amount of approximately $820,000.00 paid to a firm of solicitors acting on behalf of entities associated with him who are contesting various tax assessments. The balance of this answer attributes losses to the exigencies of an expensive life style including the relatively quick loss in value that can occur through purchasing new cars and boats. Mr Issakidis stated that he had “actual expenditure on different things and living expenses” and that there is “no hidden money” [16] .

12. [57]

    It is to be remembered that the present inquiry is not whether Mr Issakidis was extravagant in his spending or prudent in managing his finances, but whether his evidence that he is now without funds should be accepted. I accept that he had an expensive life style until his arrest. Six years passed between March 2006 and Mr Issakidis’ arrest in early 2012. A further three years has passed since then. Even if one accepts that all the transactions pointed to by the Crown were ultimately for the benefit of Mr Issakidis, it is plausible that he and his wife’s lifestyle until his arrest, including his penchant for very expensive cars and boats, as well as he and his wife’s expenses since then including legal fees has consumed more than $8 million. On the Crown case Mr Issakidis had no reason to curb his spending prior to his arrest given that he had access to funds that NHA acquired from the trusts. The supposed discrepancies pointed to by the Crown do not detract from Mr Issakidis’ evidence.

13. [58]

    Otherwise, it was no part of the Crown case at the first trial that Mr Issakidis controlled funds offshore that had been derived from the transactions with ANZ. It was always the Crown case that Mr Dickson did so. Nothing was put before the Court on this application to suggest that Mr Issakidis has secreted assets or held funds either offshore or onshore.

14. [59]

    I accept Mr Issakidis’ evidence as recounted in [50] above.

15. [60]

    On 25 March 2015 Mr Shields submitted an application for legal aid for Mr Issakidis to the Legal Aid Commission of New South Wales. His covering letter explained the history of the proceedings and provided an estimate of the length of a retrial of between ten and fourteen weeks with four to six months preparation. Enclosed with the application was a completed legal aid application. Question 40 asked him to provide details of any of his bank accounts or any “person who could give you financial help”. He listed three accounts. The form requested the attachment of statements for the previous three months. No such statements were attached. The form also requested details of his expenses and assets. An attached form listed various items of real estate and cars which are all the subject of restraining orders in the POCA proceedings, as well as various expenses associated with the maintenance and upkeep of those assets.

16. [61]

    Also enclosed with Mr Shields’ letter was a copy of the indictment, a number of interlocutory judgments from the first trial, copies of orders made concerning this application, Mr Issakidis’ notice of motion and the affidavits in support sworn by Mr Shields. None of the attachments contained any material concerning Mr Issakidis’ financial affairs, other than some material concerning the POCA proceedings.

17. [62]

    On 7 April 2015 the Legal Aid Commission wrote to Mr Issakidis. The letter stated that the Commission was unable to make a decision about the application because “we need some more information”. The letter sought “full details” of a number of matters including his shareholdings and company directorships, tax returns for the companies he was associated with, copies of his bank statements and those of his wife, as well as “Statutory Declarations from all those who have funded your criminal legal proceedings to date and their capacity to pay for your future criminal legal proceedings”.

18. [63]

    No material was provided to the Commission in response. Mr Issakidis stated that he considered he had provided sufficient information to the Commission in his application and that “my answers made it very clear in that Legal Aid Application that I had no money” [17] .

19. [64]

    On 14 May 2015 the Commission notified Mr Issakidis that his application for legal aid had been refused. The Commission’s letter explained Mr Issakidis’ review rights.

20. [65]

    In cross-examination Mr Shields stated that he had not received instructions to appeal the refusal of legal aid [18] and that it was a “matter for Mr Issakidis” [19] . Mr Issakidis stated that he had not had a chance to discuss the possibility of an appeal with Mr Shields .

21. [66]

    The legal aid application was tendered in the re-examination of Mr Issakidis. The Crown did not apply to further cross-examine him in light of its contents. Instead, in written submissions filed after the hearing, the Crown contended that a review of the application establishes that Mr Issakidis did not discharge his onus of proving the facts necessary to found a Dietrich application.

22. [67]

    In considering these contentions it is important to note which party asserts what fact. Nothing in the Legal Aid Application has caused me to reconsider Mr Issakidis’ evidence that he does not have access to funds to enable him to privately fund his defence. If the Crown wished to rely on the document to attack his credit then it should have applied for leave to further cross examine him on its contents. However, the lack of financial information provided to the Legal Aid Commission with Mr Issakidis’ application and his failure to provide further information in response to the Commission’s letter of 7 April 2015, has left me unsatisfied that he has properly pursued efforts to obtain legal aid.

23. [68]

    In Dietrich v The Queen [1992] HCA 57; 177 CLR 292 (“Dietrich”) a majority of the High Court held that the trial of an indigent person charged with a serious offence who, through no fault of his or her own, is unable to obtain legal representation should, in the absence of exceptional circumstances, be adjourned, postponed or stayed until legal representation is available (at p 315 per Mason CJ and McHugh J, at p 337 per Deane J, at p 357 per Toohey J). The foundation for this principle is the Court’s obligation to ensure a fair trial as the likelihood is that any trial that ensues in such circumstances will be unfair (at p 311 per Mason CJ and McHugh J; at p 337 per Deane , at p 357 per Toohey J and at p 371 per Gaudron J).

24. [69]

    Mr Issakidis does not fall within the principle in Dietrich although he comes close. He faces a trial of serious charges. The second trial will be lengthy and complex. Even having regard to his “background” as a solicitor, such a trial is likely to be unfair if he is forced on unrepresented (Dietrich at p 311). He is relevantly indigent. However, he has not yet exhausted his efforts to obtain legal aid such that the Court is not yet satisfied that he will be unrepresented at the second trial through no fault of his own.

25. [70]

    As noted, Mr Issakidis’ principal claim for relief was for a stay pending the payment of the costs thrown from the first trial. This aspect of his application invokes this Court’s inherent powers to “prevent their processes being used in a manner which gives rise to injustice” (Jago v District Court of New South Wales [1989] HCAA 46; 168 CLR 23 at p 31 per Mason CJ; “Jago”). Dietrich is a specific example of the invocation of that power but it derives from the Court’s duty to ensure a fair trial. However, the Court’s powers are not limited to making orders that avoid a further trial becoming unfair. Rather, “orders may be made to prevent injustice notwithstanding that there is no reason to suspect that the actual trial when held, will not be fair” (Jago at p 31 per Mason CJ and at p 58 per DeaneJ; R v Fisher [2003] NSWCCA 41; 56 NSWLR 625 at [31] to [35] per Simpson J; “Fisher”).

26. [71]

    A specific example of such an order is demonstrated by a line of authority in this State which is to the effect that a Court exercising criminal jurisdiction with no relevant power to award costs against the prosecution can nevertheless order a temporary stay of proceedings “effective until the Crown has paid the reasonable costs an accused has thrown away in previous proceedings, in circumstances where it has been demonstrated that an injustice or unfairness would result from the Court’s processes being used to put an accused on trial a second or third time without some redress” (R v Selim [2007] NSWSC 154 at [51] per Fullerton J; “Selim”). In Petroulias v The Queen [2007] NSWCCA 154 at [23] Ipp JA held that “practically speaking, unfairness [of this kind] cannot be established without proof or fault on the part of the prosecution”. Proof of fault on the part of the prosecution is not necessary to obtain a stay in accordance with Dietrich.

27. [72]

    The origin of this line of authority is R v Mosely (1992) 28 NSWLR 735 in which an order for costs was made by the District Court against the prosecution when it sought and obtained an adjournment of a criminal trial because two police witnesses could not attend as they were diverted to other duties. The Court of Criminal Appeal overturned the costs order on the basis that the District Court had no power to grant it but substituted an order that the proceedings be stayed until the costs thrown away by reason of the adjournment were paid (at p 741 per Gleeson CJ with whom Kirby P and Mahoney JA agreed). According to Gleeson CJ the adjournment “caused unfair prejudice to the respondent unless [he] could by some means be given protection in respect of costs” (at pp 740 – 741).

28. [73]

    Mosely has been followed by the Court of Criminal Appeal on a number of occasions including R v Beeby (1999) 104 A Crim R 142; R v Bucksath [2000] NSWCCA 135; 114 A Crim R 1 (“Bucksath”); Fisher and Petroulias. It has been applied by the Full Court of the Supreme Court of South Australia (R v Ulman-Naruniec [2003] SASC 437; 143 A Crim R 531) and at first instance in the Australian Capital Territory (R v Bui [2011] ACTSC 102).

29. [74]

    In its written submissions the Crown boldly contended that Mosely (and presumably every case that has applied it) was wrongly decided because it was supposedly inconsistent with Dietrich. Three matters should be noted.

30. [75]

    First, irrespective of its correctness, I am bound by Mosely and the Court of Criminal Appeal decisions that have applied it, including Petroulias and Fisher.

31. [76]

    Second, the suggestion that Mosely was inconsistent with Dietrich was expressly considered and rejected in Fisher at [31] to [35] per Simpson J. In my respectful view and for the reasons already stated both the outcome and the reasoning in Mosely are supported by the judgment of Mason CJ in Jago at p 31. In Bucksath at [20] Stein JA (with whom Dunford and Simpson JJ agreed) was of the same view.

32. [77]

    Third, in oral submissions the Crown Prosecutor put a variant to his submission that Mosely was wrong, namely that it has no application to federal offences tried in this State. The contention was not elaborated upon. It appears to be inconsistent with s 68 of the Judiciary Act 1903 (Cth). Petroulias involved a federal offence yet there is no suggestion in any of the judgments in Petroulias that that had any significance.

33. [78]

    Bearing in mind the form of unfairness that is said to be demonstrated in this case, it is appropriate to consider Fisher further. In Fisher the Court of Criminal Appeal imposed a temporary stay pending the payment by the prosecution of the reasonable costs incurred by the appellant at his second trial on charges laid under s 178BB of the Crimes Act (at [49]). The appellant was privately funding his defence. His first trial was aborted after he and a juror fell ill (at [11]). His second trial was aborted, over his objection, when just prior to the commencement of the summing up the Australian Securities Investment Commission (“ASIC”) produced a file that had previously been subpoenaed by the defence but not produced (at [13] to [14]). Simpson J considered that it did not matter whether responsibility for the failure to produce the file earlier was that of the CDPP or ASIC because “such fault as there was on the part of the prosecuting authorities” (at [19]). The trial judge declined to inquire into whether the failure to produce the file was the result of mala fides but, as there was no doubt that the prosecution was responsible, that was considered sufficient (at [43] per Simpson J). Simpson J identified the relevant unfairness that was occasioned as follows (at [47]):

34. [79]

    Santow JA agreed with Simpson J (at [1]). His Honour described the relevant unfairness as follows (at [4]):

35. [80]

    I have addressed the circumstances that resulted in discharge of the jury at the first trial so far as it concerned Mr Issakidis. They involve fault of the relevant kind on the part of the prosecution. MFI 47A was not disclosed to the defence. Although it was just one document in a forest of documents it was of particular significance to the case against Mr Issakidis. Although there is no evidence that it was deliberately withheld there is no proper explanation for how some of the documents seized by the AFP such as that document were not disclosed to the defence but others were. Further, the circumstances surrounding the late disclosure of MFI 47B and MFI 48 revealed that the Crown had effective access to the pool of s 263 documents yet no corresponding level of access was made available to Mr Issakidis. This conclusion presupposes that the AFP can be equated with the position of ASIC as considered in Fisher, a contention the Crown did not resist. It also means that is not necessary to decide whether the ATO can be equated with the position of ASIC as considered in Fisher, a contention that was in contest on this application. If the ATO could then it would follow that the entire process of pre-trial disclosure miscarried.

36. [81]

    While the existence of fault is a necessary condition to the granting of a temporary stay in these circumstances it is not necessarily sufficient. The test is ultimately one of unfairness. All the circumstances must be considered including those noted in [69]. Having regard to those matters the result is that, as was the case in Fisher, Mr Issakidis is now “deprived of [the] opportunity [to have private representation] by reason of error on the part of the Crown” (Fisher at [47]). Nevertheless two points of distinction between this case and Fisher were raised by the Crown.

37. [82]

    First the Crown noted that the judgments in Fisher, including the extract from the judgment of Santow JA noted above, emphasised that the appellant was facing his third trial whereas Mr Issakidis was only facing his second. There is clearly no rule to the effect that the principle described in [71] can only be invoked in the case of a third or subsequent trial but not in relation to a second. Instead this forms part of the assessment of whether the relevant unfairness has been established. The first trial in Fisher occupied six days and the second trial occupied three weeks (Fisher at [11] and [13]). In this case the jury in the first trial were discharged on the 55th day. The first trial involved a far greater drain on Mr Issakidis’ resources than what occurred in Fisher. The unfairness occasioned to Mr Issakidis is greater than that occasioned to the appellant in Fisher.

38. [83]

    Second, in Fisher the second trial was aborted over the objection of the accused whereas in this case it was Mr Issakidis who applied for the discharge of the jury at the first trial. This does not alter my assessment that the relevant test of unfairness is met, especially having regard to the following observations in Dickson (No 12) at [69] to [70] about the position that would have ensued had Mr Issakidis not sought a discharge and the trial proceeded with him being armed with MFI 47A, MFI 47B and MFI 48:

39. [84]

    The statements by the Crown Prosecutor that he did not cavil with Dickson (No 12) applies to these observations. Accordingly, had Mr Issakidis not sought a discharge of the jury at the first trial, then the likelihood is that the Crown would now be facing two applications of the kind presently under consideration and not just one.

40. [85]

    Finally, during oral argument the Crown Prosecutor referred to the judgment of Fullerton J in Selim at [63] where her Honour was invited to determine that the failure to disclose material to the accused in that case prior to his first trial “deprived [him] of the fact of an acquittal”. This was part of a submission that the accused in that case had suffered such an injustice that he should be entitled to recover the costs of that trial and a subsequent trial before standing trial for a third time. Although it was not entirely clear it appears that in this case the Crown submitted that such an approach should be adopted to an assessment of the material described above. If that is the submission, I do not agree. In Selim at [63] Fullerton J merely recounted a submission that was made to her Honour. The submission was made in a context where the first jury was discharged because they could not reach an unanimous verdict and the second jury were discharged because of adverse publicity (Selim at [40]). In those circumstances it seems that Fullerton J was invited to find that the accused would have been acquitted at the first trial had disclosure been made because it would then follow that costs of that trial and the subsequent trial were thrown away by reason of the fault of the Crown in not making disclosure. In this case, the reason for the discharge of the first trial are known and they are as a result of non-disclosure so that the analysis sought to be undertaken in Selim is irrelevant to this case.

Form of the order

1. [86]

   It follows that Mr Issakidis is entitled to a stay pending the payment of certain costs by the Crown.

2. [87]

   Two matters were raised by the Crown concerning the form of the order that should be made. First, as noted, the Crown contended that the order should restrict the relevant amount to the likely cost of the second trial and not the costs thrown away by the aborting of the first trial. This submission continues the elision of the justification for the orders in Dietrich compared with those made in Mosely. In any event it does not matter because the likely costs of the second trial exceed the costs thrown away in the first trial.

3. [88]

   Second, the Crown submits that the relevant order should only allow Mr Issakidis a proportion of his costs thrown away because, apparently, “[n]o-one obtains 100 cents in the dollar on costs”. The Crown referred to a passage from Selim at [59] in which Fullerton J observed that the “granting of a temporary stay until costs of the previous proceedings, or some part of them, are paid is not designed to punish the Crown for inadequacies [the] pre-trial or trial process”. This reference to “some part” in Selim does not assist the Crown’s contention. The appropriate measure of costs to include in an order on an application such as this was not explained in Selim which is understandable given that in Selim the application was refused. In Mosely the relevant order was framed by reference to the costs thrown away by reason of the adjournment with such costs to be agreed or failing agreement assessed by the District Court (Mosely at p 741). In Fisher the temporary stay operated until the prosecution paid the “reasonable costs” incurred by or on behalf of the applicant but for the entire trial. In Bucksath at [28] Stein JA considered that the conduct of the Crown in seeking an adjournment of a trial did not warrant indemnity costs. Instead Stein JA suggested an order that referred to “reasonable” costs. His Honour implicitly recognised that indemnity costs could be awarded.

4. [89]

   I do not consider that the conduct of the Crown warrants an order framed by reference to an amount of costs assessed on an indemnity basis. Instead, consistent with Mosely, Fisher and Bucksath, the amount of the costs to be included in the order should be conditioned by the need for them to be “reasonable”. It was not suggested that the Court could not make that assessment. The material provided by Mr Shields enables it to be undertaken. I have already described the rates that were charged. Given the challenging nature of the trial and the standing of the legal practitioners engaged I do not consider that an assessment of reasonableness warrants much of a reduction in those rates. Overall I consider that only a modest discount in the amount identified by Mr Shields is warranted, namely 15%. The pre-trial applications were made by Mr Dickson and not Mr Issakidis (see R v Dickson; R v Issakidis (No 1) [2014] NSWSC 1068; R v Dickson; R v Issakidis (No 2) [2014] NSWSC 1078). None of the applications made on behalf of Mr Issakidis were unreasonable. He made a number of admissions which facilitated the presentation of the Crown case. The cross examination of the Crown witnesses on his behalf was carefully planned and concise.

5. [90]

   Further, it is not clear whether Mr Shields’ assessment of the costs thrown away was undertaken on the assumption that Senior Counsel who appeared at the first trial would be available for the second trial. If that is the case and if that assumption is invalidated it would be open for Mr Issakidis to apply to vary the order that will be made.

6. [91]

   The proceedings are currently listed for mention on 3 July 2015. I will vacate that listing and instead list them for mention on 24 July 2015 to allow the CDPP time to consider its position and advise the Court accordingly. I will also grant the parties liberty to apply if that day is not convenient. The stay will not preclude that occurring.

7. [92]

   Accordingly the Court orders that:

   1. (1)

      Subject to orders 4 and 5, the proceedings against Michael Issakidis be stayed unless and until the Commonwealth Director of Public Prosecutions pays to him or at his direction the sum of $624,000.00.

   2. (2)

      The notice of motion filed 19 March 2015 be otherwise dismissed.

   3. (3)

      The directions hearing listed for 3 July 2015 be vacated.

   4. (4)

      The proceedings be listed for mention on 24 July 2015 at 9.30 am.

   5. (5)

      The parties have liberty to apply on 1 day’s notice.