R v Seller; R v McCarthy

1. [1]

   HIS HONOUR: The accused have each applied to restrict or confine the Crown case to misrepresentations referred to by the Crown in the Crown’s opening. The burden of the application is that each of the accused has been misled by the scope of the opening to believe, and to conduct their respective cases so far based upon the belief, that the Crown had abandoned so much of its case as had not at that time specifically been mentioned. That is said to be so notwithstanding the extensive anterior written particularisation of the Crown case over some years preceding the commencement of the trial. The Crown’s response to the application has been to contend that the opening presented to the jury was no more and no less than a summary of the case that the jury might be expected to hear, and that detailed reference to the precise terms of every representation upon which the Crown relied in support of its case was not, and should not be taken to have been, a modification of the case that has long been known to the accused and their legal advisers. For the reasons that follow, I consider that the Crown’s position on this application is unassailable and that the application should be refused.

Background

1. [2]

   The Crown presented an indictment charging:

2. [3]

   In brief compass, Mr Seller and Mr McCarthy were respectively the legal and accounting architects of tax minimisation schemes promoted for the 1999, 2000 and 2001 tax years. Although the schemes had various differences in each of these years, they were in essence all designed to provide participants with a tax deduction in the relevant year of $500,000 for an initial cash outlay of only $125,000 or 25 percent of the proposed total contribution. The money was to be used for the production of whisky in a Scottish distillery. The unpaid sum of $375,000 in each case was to be financed by a loan secured by promissory note payable in twelve years and drawn on what was described as a finance company by the name of Chambers Finance Limited.

3. [4]

   In the years in which the schemes were current and thereafter, Mr Seller and Mr McCarthy became engaged in discussions with the Australian Taxation Office about them. Participation in the schemes had been promoted upon the basis of the tax deductible status of both the cash contributions as well as the loan funds. In the events that occurred, the Australian Taxation Office did not issue a favourable Product Ruling for any of the schemes and declined to acknowledge that the contributions to the schemes were deductible. The Crown alleges that in the course of what amounted to negotiations between the Australian Taxation Office on the one hand and Mr Seller and Mr McCarthy on the other hand concerning the refusal to grant tax deductible status to the participants’ contributions, Mr Seller and Mr McCarthy conspired between themselves and with others to make statements to the Commissioner or his representatives that were false and dishonestly intended to influence the Commissioner.

4. [5]

   The relevant Crown Case Statement was filed on 1 April 2011. It contains as many as 48 alleged misrepresentations between [316] and [363]. Some of these are no longer pursued.

5. [6]

   On 19 March 2012 the Crown prepared and provided to the accused a document entitled “Outline of the case the Crown will present at trial.” Paragraphs 1 to 10 inclusive of that document are as follows:

6. [7]

   Paragraph 11 of that document then proceeded to outline a very detailed particularisation of the several overt acts that are alleged by the Crown to constitute the conspiracy. Each of these particularised acts is cross-referenced to a nominated paragraph in the Crown Case Statement. There are 26 such acts particularised in this way. It is impractical to include the detail of this paragraph in these reasons.

7. [8]

   Following receipt of that document the Crown also provided particulars of the basis upon which it asserted that the alleged representations referred to in paragraph 11 of its outline were said to be false. Those particulars of falsity were provided in the following terms:

8. [9]

   By comparison with these details and particulars, the Crown opened the case to the jury in terms that included the following:

9. [10]

   The particulars upon which the Crown relies were also referred to in other documents exchanged with the legal representatives for Mr Seller and Mr McCarthy but none is critical to the present analysis.

Submissions of Mr Seller and Mr McCarthy

1. [11]

   The burden of the proposition advanced for Mr Seller and Mr McCarthy is that the opening failed to refer to some particulars in terms or at all or that it failed to make clear that the references that were in fact made to arguably incorrect and therefore misleading statements were all to be relied upon as part of the Crown case in any event. In support of that argument, reliance was placed upon Danny Mok (1987) 27 A Crim R 438 at 439ff:

2. [12]

   The accused contended that it would lead to a miscarriage of justice if the Crown were now permitted to rely upon matters not opened on as matters about which the accused are alleged to have made deliberately false representations with the intention of influencing a public official.

Crown submissions

1. [13]

   The Crown emphasised that detailed particulars of representations have been provided over the course of the six year history of these proceedings. They have been unambiguous and consistent. The outline referred to at [6] above cannot be read in isolation. The document as a whole makes it clear that the categories of representation to which it refers are all separately relied upon and that the introductory summary does not, and is clearly not intended to, derogate from its operative effect that is otherwise apparent from reading it.

2. [14]

   The Crown submitted that there could never be grounds for complaint that the Crown had failed in any relevant respect to particularise the case adequately or sufficiently. He submitted that the case had in fact been particularised ‘”to within an inch of its life.”

3. [15]

   The Crown also submitted that there had been no departure from the particularised case in the course of the opening. The Crown opened to the jury on the basis that the representations fell into groups according to their corporate subject matter. This was clear at least from the written aide memoire provided to the jury in the course of the opening to which the Crown referred and to which the accused did not object. The Crown emphasised that it did not expressly or by implication limit itself in opening the case to only some of the particularised representations. So much is said to be clear from the transcript extracted above.

4. [16]

   The Crown contended in these circumstances that there could be no genuine doubt about the case that the accused had to meet. In any event, both Mr Walsh and Mr Maloney from the Australian Taxation Office were cross-examined by counsel for the accused in detail upon the credit facilities, the promissory notes and the drawing requests. If representations concerning any of these issues were thought to be outside the particularised case it was never suggested to these witnesses that this was so. The issue of whether or not and when the obligation fell upon Chambers Finance Ltd to pay money secured by the promissory note was squarely raised in that cross-examination. That suggested that the accused were well aware of the significance and relevance of representations touching these issues.

Disposition

1. [17]

   In my opinion there is no answer to the Crown’s submissions. The Crown case has been particularised in exquisite detail over a long period. Documentary refinements of the allegations over time have only served to isolate and confine them with equal clarity. If the Crown opening created any surprise for the accused it was slow to materialise in the course of the trial and only became manifest in the terms of the present application.

2. [18]

   Mok and related cases support principles that are not in doubt. The facts of the present case do not, however, demonstrate any breach of or departure from those principles. I did not personally get an impression in listening to the Crown’s opening that the case being presented was in any sense a departure from that which the Crown case statement had outlined in very explicit terms. The conduct of the case on all sides since then has encouraged me in that view.

3. [19]

   This is not an example of what is perhaps the more usual defence complaint, that the Crown has opened its case too widely or that the evidence has not matched the opening rhetoric. On the contrary, the accused argue that they have been somehow led or misled into believing or assuming that the Crown had modified its case or abandoned parts of it. I do not accept that. The Crown opening was necessarily confined within acceptably economical limits to the structure of the case it proposed to make out. It was not required to refer in detail to each and every allegation, and certainly not by way of a detailed recitation of the case particulars. There has not in my opinion been any departure from what is acceptable in the circumstances.

4. [20]

   I am not prepared to accede to the application.