R (Cth) v Milne (No. 1)

JOHNSON J : The Accused, Michael John Milne, has made a number of applications in advance of his trial on an indictment which includes the following counts: (a) Count 1 - Between about 30 April 2004 and about 30 September 2005 at Sydney in the State of New South Wales and elsewhere [the Accused] dealt with property, intending that the property, namely a parcel of shares, would become an instrument of crime, in that it would be used to facilitate the commission of an offence by Barat Advisory Pty Limited and at the time of the dealing, the value of the property was $1 million or more (s.400.3(1) Criminal Code Act 1995 (Cth) - maximum penalty - 25 years’ imprisonment); (b) Count 2 - On or about 13 November 2006 at Sydney in the State of New South Wales [the Accused] did, with the intention of dishonestly obtaining a gain from the Commonwealth, cause to be lodged an income tax return in the name of Barat Advisory Pty Limited for the year ending 30 June 2005 containing false information, namely that the net capital gain from the sale of shares in Admerex Limited was $4,597.00 (s.135.1(1) Criminal Code Act 1995 (Cth) - maximum penalty - five years’ imprisonment). The Pretrial Applications

By Further Amended Notice of Motion filed on 30 July 2010, the Accused seeks the following orders: (a) paragraph 1 - a permanent stay of his trial on an indictment containing both a count under s.400.3(1) (the money laundering charge) and a count under s.135.1(1) Criminal Code Act 1995 (Cth) (the dishonest obtaining charge), on the basis of abuse of process; (b) paragraphs 2, 4 and 5 - exclusion of certain foreign documentary evidence upon which the Crown proposes to rely, or alternatively, an order that certain witnesses attend for examination concerning aspects of the documents; (c) paragraph 3 - not pressed; (d) paragraph 6 - exclusion of evidence contained in the report of Shaun Evan Mark dated 3 June 2010, which is relied upon by the Crown as expert evidence; (e) paragraph 7 - exclusion of certain evidence upon the basis of irrelevance or, alternatively, in the exercise of discretion under s.135 or s.137 Evidence Act 1995 ; (h) paragraph 8 - not pressed. Applicable Statutory Regime for Case Management

The present indictment was signed on 3 September 2009. On 4 September 2009, the Accused was arraigned before Howie J on this indictment and a plea of not guilty was entered to each count.

It is common ground that the amendments to the Criminal Procedure Act 1986 effected by the Criminal Procedure Amendment (Case Management) Act 2009 do not apply to these proceedings. Those amendments (ss.134-149F) are contained in a Division entitled “Case Management Provisions and Other Provisions to Reduce Delays in Proceedings” . However, those provisions apply only in respect of proceedings in which the indictment was presented or filed on or after the substitution of those provisions on 1 February 2010: Clause 63(1), Schedule 2, Criminal Procedure Act 1986 . The pre-existing case management provisions contained in the former ss.134-149 of the Act apply to these proceedings: Clause 63(2), Schedule 2, Criminal Procedure Act 1986 .

Likewise, the substituted s.130A Criminal Procedure Act 1986 concerning pretrial orders operates only from 1 February 2010: Clause 62, Schedule 2, Criminal Procedure Act 1986 . Section 130A does not apply to these proceedings.

It is not entirely clear to this point whether a Judge of the Court has expressed satisfaction that this is a complex criminal trial for the purposes of the former s.136 Criminal Procedure Act 1986 . If it has not been done expressly, it is clearly implied in the orders which have been made which recognise the nature and complexity of the issues raised in the trial.

On 18 February 2010, Hall J made a number of orders, by consent, to progress the case management of the matter. On 1 June 2010, I made orders in preparation for the pretrial hearing. On 2 July 2010, by consent, I varied a number of the orders made by Hall J on 18 February 2010 and by me on 1 June 2010. This process has facilitated the case management of both the pretrial and trial stages with respect to this matter. Criminal Trials Involving Substantial Documentary Evidence

It will be apparent from later parts of this judgment that the trial involves complex share and commercial arrangements in Australia and overseas. The Crown proposes to tender documents which bear upon these topics.

A criminal trial in Australia is an accusatorial and adversarial process and is essentially an oral process: Gately v The Queen [2007] HCA 55; 232 CLR 208 at 235 [88]. However, there will be criminal trials involving a substantial volume of documentary evidence where the trial is not essentially an oral process. The courts have recognised the assistance which a jury may derive from the provision of appropriate summary documents, including charts and chronologies: Smith v The Queen [1970] HCA 48; 121 CLR 572 at 577; Butera v Director of Public Prosecutions (Vic) [1987] HCA 58; 164 CLR 180 at 190; R v Sam (No. 14) [2009] NSWSC 561 at [9].

In R (Cth) v Petroulias (No. 34) [2007] NSWSC 1462, I said at [64]-[66]: “64 Courts have observed that the use of charts or chronologies in complicated jury trials is a desirable procedure and is to be encouraged: R v Mitchell [1971] VR 46 at 59-60; Smith v The Queen [1970] 121 CLR 572 at 577. It has been said that the use of written material to assist a jury in understanding, or readily assimilating, the effect of voluminous or complex evidence is also to be encouraged. In an appropriate case, the provision of a chronology is a desirable method of simplifying the task of a jury and of facilitating their deliberations. The jury is entitled to expect that all reasonable steps will be taken towards that desirable goal, especially in trials involving voluminous and/or complex factual evidence: R v Collins (1986) 44 SASR 214 at 249 per Olsson J. 65 A chronology is likely to be selective because it is, in substance, an extract of the dates in chronological order of events referred to in a large number of documents: R v Collins at 234 per Jacobs J. It has been said that there is a tendency, when the use of a chronology is considered, to underestimate the intelligence and commonsense of juries as to whether such material is likely to have an undue or inappropriate impact upon the jury’s thought processes: R v Collins at 249 per Olsson J. 66 In determining to provide a chronology to the jury, I proposed to emphasise that the chronology is not evidence in the trial, but a time line intended to assist the jury’s deliberations to be undertaken by reference to the actual evidence itself. I directed the jury to this effect when the chronology was provided, together with other written material in the jury folder (MFI142) at the commencement of the summing up. I reminded them during the summing up that the chronology was not a substitute for the evidence.”

Section 50 Evidence Act 1995 provides for proof of voluminous or complex documents. That provision sits well with the purposes identified in the abovementioned authorities, which have as their focus the provision of practical assistance to a criminal jury so that the jury may understand the evidence for the purpose of the discharge of its fact-finding function. These processes also serve the purpose of promoting efficient use of court time with a jury present, so as to allow the jury to understand the contents of documents, and the inferences which may be drawn from those documents, together with the relevance of those inferences to the elements of the offences charged in the indictment.

I will return to these principles later in the judgment. A number of the issues raised for pretrial determination involve, directly or indirectly, considerations of the type referred to in these authorities. Of course, a number of the pretrial applications contend that evidence of certain types should not be admitted at all. However, if that evidence is to be admitted, I will have firmly in mind the effective presentation of evidence which is to be admitted, together with such summary documents, charts, aids and chronologies as will assist the jury in the discharge of its duty at trial. The Pretrial Hearing

The hearing of the pretrial applications proceeded on 29 and 30 July 2010 and 5 August 2010. The Accused was arraigned before me on 29 July 2010 and entered a plea of not guilty to each count on the indictment. The Court’s jurisdiction was engaged for the purpose of the pretrial applications: s.130 Criminal Procedure Act 1986 . As already noted, s.130A Criminal Procedure Act 1986 does not apply to these proceedings.

The trial of the Accused on this indictment is fixed to commence with a jury on 18 October 2010.

No oral evidence was adduced at the pretrial hearing. A number of documents were tendered to allow the Court to understand the parameters of the issues raised by the various applications. Written submissions were provided with oral submissions extending over three hearing days.

The transcript of the committal proceedings and statements of witnesses proposed to be called by the Crown were not tendered at the pretrial hearing. Nor (as I understand it) was the totality of the documents proposed to be tendered by the Crown. In raising this, I am not being critical of the parties. Rather, I mention it to emphasise that the rulings sought in advance of trial, on a range of issues, proceed from a limited evidentiary base.

A number of the issues raised by the Accused concern the relevance of evidence under ss.55-56 Evidence Act 1995 and the question of the exclusion of evidence, if relevant, under s.135 or s.137 Evidence Act 1995 . In some cases, it may be that the trial Judge is in a position in advance of trial to determine, with certainty, whether evidence subject to objection ought be excluded on one of these bases. The present proceedings involve an allegation of elaborate dealings in shares, and associated commercial arrangements, over a period of time. I will do the best I can at this distance from the trial, and utilising the evidence and submissions before the Court at the pretrial hearing, to reach conclusions concerning these areas of objection.

These comments are not intended to invite a series of applications where rulings are revisited. Rather, they are intended to convey the limited evidentiary base from which I am working, and the prospect that the evidentiary base may expand between now and the commencement of the trial in a manner which may bear upon, in one way or another, the admissibility of evidence to which objection is being taken.

This judgment will determine the permanent stay application based on abuse of process (paragraph 1) and the objection to the evidence of Mr Mark (paragraph 6). In addition, this judgment will consider submissions concerning the foreign documentary evidence relevant to paragraphs 2, 4 and 5 of the Further Amended Notice of Motion. The Court was informed that the Crown is to provide to the Accused an additional statement from Anne Harley, an important Crown witness, which will refer to a number of these documents. I will consider the arguments by reference to statutes and case law addressed by counsel concerning paragraphs 2, 4 and 5, and will determine the objections, although remaining conscious that the provision of a supplementary statement from Ms Harley may affect these issues. Finally, I will determine the objections covered by paragraph 7 of the Further Amended Notice of Motion. Outline of the Crown Case Against the Accused

A lengthy Crown Case Statement dated 4 May 2010 (“CCS”) (Exhibit PTA) was utilised as a foundation for much of the pretrial argument. The CCS was provided in accordance with the orders of Hall J made on 18 February 2010. Helpfully, the CCS identifies areas of agreement (green) and dispute (red), as well as areas not yet agreed upon (yellow).

It is useful to provide an overview of the Crown case. The following is drawn from the CCS and written and oral submissions made at the pretrial hearing.

At the centre of the Crown case is activity related to dealings with shares in Admerex Limited (“Admerex”). Admerex was previously known as Global Technologies Australia Limited (“GTAL”). GTAL carried on business in the supply of information technology systems to financial institutions. It operated under a South African parent company.

Temenos Group AG (“Temenos”) was a Swiss-based international organisation involved in the business of supplying information technology systems to banks and other financial institutions. Mr Kim Goodall was associated with Temenos and, in particular, had a significant shareholding in that company which was of considerable value. Mr Goodall appeared to occupy the effective position of Southeast Asian manager, including overseeing the activities of Temenos in Australia.

At the point when (the Crown says) relevant activities commenced, Mr Goodall appeared to be in the process of winding down his active involvement in Temenos, and it seems that the South African parent of GTAL was trying to extricate itself from Australian operations.

The Crown alleges that the Accused was introduced to Mr Goodall in about May 2003 and agreements were made in which Temenos injected money into GTAL.

The Crown alleges that the Accused achieved something in the nature of a windfall as a result of a series of events which commenced with the acquisition on 21 May 2003, by Clairmont Holdings and Finance Limited (“Clairmont Holdings and Finance”), of a debt of approximately $11 million owed by GTAL for $1.00, payable if and when demanded. Clairmont Holdings and Finance was a company registered in the British Virgin Islands. The Crown alleges that the Accused had a substantial connection with that company and possessed an ability to control and give directions about the activities of Clairmont Holdings and Finance. The Crown alleges that the Accused had an arrangement for control of the activities of Clairmont Holdings and Finance through a Swiss company, Sinitus Treuhand AG (“Sinitus”), a provider of financial services of which Mr Urs Meisterhans was a partner.

On 8 July 2003, the Accused was appointed an executive director and acting Chief Executive Officer of GTAL, which then changed its name to Admerex.

In or about October 2003, the Accused and Mr Goodall decided to acquire approximately $7.9 million of the debt owed by Admerex to Clairmont Holdings and Finance.

On 18 November 2003, Clairmont Holdings and Finance sold $2,236,459.00 of the debt owed by Admerex to another company, Barat Advisory Pty Limited (“Barat Advisory”), for consideration of $1.5 million, which it appears was never paid. The Accused was the sole director and shareholder of Barat Advisory. The Crown alleges that the remainder of the debt which had been owed to Clairmont Holdings and Finance was sold in unequal portions to a company owned by Mr Goodall and to the Accused’s company, Barat Advisory.

On 24 November 2003, Mr Goodall was appointed as a director of Admerex, and he continued thereafter to hold that office.

On 19 December 2003, Barat Advisory opened a bank account with the Commonwealth Bank of Australia (“the Barat Advisory CBA Account”). This bank account was opened at the direction of the Accused, in his capacity as the sole director and shareholder of Barat Advisory. Barat Advisory operated the Barat Advisory CBA Account during the period from 19 December 2003 to 19 November 2007. The Accused was the only person authorised by Barat Advisory to operate the Barat Advisory CBA Account.

In the period from 31 March 2004 until 4 January 2005, Barat Advisory operated a bank account with the St George Bank.

On 30 April 2004, whilst the Accused remained in the position of acting CEO of Admerex, an allotment of 55,911,475 shares in Admerex was issued to the Accused's company, Barat Advisory, at a value of four cents per share, to repay the debt of $2,236,459.00 owed by Admerex to Barat Advisory as a result of the earlier actions of the Accused.

On 7 January 2005, the Accused resigned as a director of Admerex.

The Crown case is that the Accused was then in the position whereby his company, Barat Advisory, had acquired an asset in the form of the Admerex shares with a value of at least $2,236,459.00 in circumstances where Clairmont Holdings and Finance, which was also controlled by the Accused, had acquired the original asset, being the debt of approximately $11 million, at a cost of $1.00. The Accused was then confronted with the problem of liquidating the profit from those transactions without having the proceeds substantially diminished by an obligation to pay tax, particularly capital gains tax.

For that purpose, it is alleged that in about May 2004, the Accused approached Anne Harley, a solicitor and partner at Atanaskovic Hartnell. Ms Harley had expertise in taxation law. There had been a solicitor from that firm giving more general advice to the Accused, but Ms Harley became involved shortly before June 2004 in the context of providing the Accused with advice about an overseas structure which could hold assets and with the advantages of tax minimisation.

The Crown alleges that, in response to the Accused’s request for advice, Ms Harley developed an offshore structure which used foreign companies and entities known under Dutch law as “Stichtings” . Ms Harley travelled to Switzerland and her advice was put into effect. In order to minimise the tax liabilities of Barat Advisory arising from the disposal of the Admerex shares, in around June 2004, the Accused set up an elaborate structure of five companies known as the “Stichting Group” as a device whereby the Admerex shares could be transferred offshore into what appeared to be an arms-length trust arrangement, pursuant to which the Accused would have the opportunity to dispose of the shares and return the proceeds to Australia, without disclosing that these funds were derived from the disposal of the Admerex shares. The Stichting Group structure was something in the nature of a blind trust where any beneficiary was not to be identified directly, at least in the place of origin. Each of the five Stichtings was under the control of a corporate entity established in conjunction with the Stichting.

On or around 6 June 2004, Ms Harley travelled to Amsterdam to arrange for the establishment of five Stichtings. Ms Harley then travelled to Switzerland where she was joined by the Accused and Mr Goodall.

Five Stichtings were established on 11 June 2004 and were administered on behalf of the Accused by a Dutch administration services company known as Citco Nederland BV (“Citco”). The five offshore companies were incorporated in St Vincent and the Grenadines by Mr Meisterhans, at the request of Ms Harley, on 3 June 2004. Mr Meisterhans was appointed as a director of each of these companies. Each Stichting was the sole shareholder of the nominated offshore company.

On 11 June 2004, Ms Harley, acting on instructions from the Accused, provided Citco with a statement of purpose for each Stichting. In relation to each of the five Stichtings, the Accused was identified as the beneficial owner.

The Stichting Group structure, and associated offshore companies, were as follows: (a) Stichting Black - Challinor Equities Limited (“Challinor Equities”); (b) Stichting Badinage - Schlossman Partners Limited (“Schlossman Partners”); (c) Stichting Adelaar - Thouvanel Investments (Asia Pacific) Limited (“Thouvanel Investments”); (d) Stichting Aurelius - Metevier Securities International Limited (“Metevier Securities”); (e) Stichting Wijsheid - Vaillendourf Europe Limited (“Vaillendourf Europe“).

In the same period, Ms Harley explained to the Accused, both orally and in writing, that he would not be entitled to any payment by a Stichting Group, and would not be entitled to any asset of a Stichting Group, until after the termination of the Stichting Group arrangements.

In the period from May to August 2004, Ms Harley advised the Accused that the payment he would receive upon the termination of the Stichting Group arrangements would be subject to capital gains tax in Australia if that payment represented a capital gain on the value of the assets which had been held in that Stichting Group.

Contrary to the terms which governed the Stichting Group, as they were established by Ms Harley, there was no dividend paid by any of the Stichting Group companies to any of the Stichtings. In similar contravention to those terms, the Accused did not make any annual payment to any of the Stichtings representing the shortfall between the dividend paid, or payable, by any of the Stichting Group companies, and the amount equivalent to 10% of the committed capital of any of the Stichting Group companies. The Accused also did not, on the termination date, make any payment to any of the Stichtings equivalent to 10% of the committed capital of any of the Stichting Group companies.

It is the Crown case that Ms Harley’s advice was bona fide in the sense that she quite genuinely and professionally provided advice concerning a structure which, in her mind, justified a situation in which there would be at least a tax deferment. Ms Harley envisaged that these arrangements would be in place for a period of 10 years, and then some other arrangement would have to be made because the benefits would revert to the Accused and he would still be faced with the tax consequences, albeit at a later time.

On or around 15 June 2004, bank accounts in the name of each of the Stichting Group companies were opened with a Swiss bank known as EFG Bank AG (“EFG”).

The EFG accounts were opened by Mr Meisterhans. The account opening documentation identified the Accused as the beneficial owner of the assets held in each of these EFG accounts and as the beneficial owner of each of the Stichting Group companies. The sole signatory in relation to each of the EFG accounts held in the name of the Stichting Group companies was Mr Meisterhans.

Each of the EFG accounts held in the name of the Stichting Group companies was closed on or around 14 September 2005.

On about 11 June 2004, the 55 million Admerex shares which had been acquired by Barat Advisory were transferred to the five corporations established in conjunction with the five Stichtings in differing parcels as follows: (a) transfer of 12,000,000 Admerex shares to Challinor Equities for consideration of $600,000.00; (b) transfer of 11,900,000 Admerex shares to Schlossman Partners for consideration of $595,000.00; (c) transfer of 11,500,000 Admerex shares to Thouvanel Investments for consideration of $575,000,00; (d) transfer of 9,411,475 Admerex shares to Metevier Securities for consideration of $470,575.75; and (e) transfer of 11,100,000 Admerex shares to Vaillendourf Europe for consideration of $555,000.00.

While he was in Switzerland with Ms Harley and Mr Goodall in June 2004, it is alleged that the Accused said to Mr Goodall that he was pleased with the work Ms Harley had done in setting up companies for him. The Accused told Mr Goodall that he had sold his Admerex shares to a group of companies to give himself a tax position in Australia. The Accused said to Mr Goodall that, by splitting his Admerex shares amongst five companies, he had effectively sold his holding to those five companies.

The Crown alleges that the transfer of the Admerex shares to the five Stichting Group companies did not transfer beneficial ownership of the shares. Rather, the Accused intended to use the Stichting Group to conceal or dispose of the Admerex shares, and the proceeds of such disposal, in order to avoid payment by Barat Advisory of capital gains tax (CCS, paragraph 62).

The Crown alleges that, in the aftermath of action taken on 3 February 2005, the Accused communicated with Mr Goodall and directed that he would take one million Temenos shares which had just been relinquished in exchange for his Admerex shares, and which had by then diminished to a parcel of 48 million shares. The Crown noted that it would be Mr Goodall’s evidence that he did not immediately accept the proposition and considered that he was in control of the situation because he was the signatory to the Temenos account. An account had earlier been established with SwissFirst (No. 6009) in which the Temenos shares had been held.

On about 3 February 2005, one million Temenos shares were transferred out of Account 6048 which had become the account through which the Temenos shares were traded. That account had been established in the name of Challinor Equities. The Crown alleges that, even though the shares had been transferred specifically in five separate parcels to five different corporations, everything was done in the name of Challinor Equities.

From 3 February 2005 until about mid-June 2006, one million Temenos shares in Account 6048 were disposed of and funds were raised with the result that, on the Crown case, about eight million Swiss Francs were generated by the sale of the shares.

The Crown has particularised the value of the shares by reference to the market value on the Australian exchange throughout that period, being $8.4 million to $9.1 million depending on the precise fluctuation of the share price at any given time.

The issue of beneficial ownership of the shares is relevant to the question of liability to capital gains tax. The Crown contends that one of the factors to be taken into account in determining whether there was a change in the beneficial ownership of the shares was whether the Accused, on behalf of Barat Advisory, continued to exercise effective control over the shares after they were purportedly transferred to the Stichting Group companies in June 2004. The Crown contends that the issue of effective control is also relevant to the issue of dishonesty. It is the prosecution case that the Accused established the Stichting Group arrangement for the purpose of giving the appearance that he had caused Barat Advisory to divest itself of the Admerex shares to a group of entities which were independent and at arm’s length, when in fact, at all material times, the Accused continued to exercise control over the shares and the proceeds of their disposal, sometimes to his own personal use.

The Crown alleges that, in disregard of the terms governing the conduct of the Stichting Group, the proceeds of the share trading were then distributed. A total of approximately $5.6 million was transferred, in the period from March 2005 to January 2006, to the Barat Advisory CBA Account. Other amounts from the proceeds of the sale of the shares were allegedly used to the personal benefit of the Accused, including a house purchase, the purchase of a yacht, jewellery, a luxury vehicle and art works.

By the series of transactions described, the Accused is alleged (in the first count) to have dealt with the 48 million Admerex shares with the intention of using them as an instrument of crime relating to the avoidance of the payment of capital gains tax.

The Crown alleges that the conduct so far described gives rise to the money laundering charge (so that the first count is an appropriate charge to bring). The Crown alleges that these acts were directed ultimately to the Accused securing the maximum benefit from his acquisition of the debt from GTAL, initially through Clairmont Holdings and Finance, and later transferred into shares without diminishing his return by having to pay tax. The Crown alleges that the money laundering offence was complete, even in the middle of 2005, because the Accused had dealt with the shares in a way that was intended to cause a loss to the Commonwealth. The Crown alleges that, whether the Accused went ahead and submitted a tax return or not did not matter, because he had carried out these actions in the context of the scheme arranged by Ms Harley as a tax minimisation arrangement.

With respect to the question of whether a tax return would be lodged, the Crown alleges that the Accused had not personally lodged a return since 1994 and Barat Advisory had not lodged a return for the 2004 financial year.

The Crown alleges that there was a second phase of activity (CCS, paragraph 131ff), wherein the Accused went to his accountants (William Shew, Stephen Thurn and Colin Samuel of Grant Thornton Accountants) and, between May 2005 and November 2006, a process was underway whereby his accountants endeavoured to extract sufficient information from the Accused to enable them to lodge returns on his behalf. The Crown alleges that the end result was such that the accountants were so dissatisfied with the information provided that they simply prepared some documents and sent them to the Accused, giving him the opportunity to lodge them himself.

The Crown alleges that this process is important because it involved a second phase of activity in which there was deception of the accountants. The Crown alleges that the Accused provided false information to his accountants, in particular when the accountants pressed the Accused for an explanation of funds from Barat Advisory’s accounts overseas. The Crown alleges that at no stage did the Accused disclose to his accountants the acquisition and/or the sale of the Admerex shares by Barat Advisory. In the end, returns were prepared, including returns for Barat Advisory for the years ending 30 June 2004 and 30 June 2005.

The Crown alleges that the Admerex shares remained under the beneficial ownership and effective control of Barat Advisory, through the Accused, after they were purportedly transferred into the Stichting Group companies on about 11 June 2004.

The Crown alleges that the disposal of the 48 million Admerex shares in exchange for one million Temenos shares on or about 3 February 2005 resulted in a net capital gain to Barat Advisory of between $6,560,000.00 and $7,574,012.30. Thus, the Crown says, the net capital gain derived by Barat Advisory from the disposal of the Admerex shares in the 2005 financial year was in excess of the sum of $4,597.00 disclosed in the income tax return that the Accused caused to be lodged.

The Crown submitted that the “Achilles heel” of the scheme was the reluctance on the part of the Accused to relinquish control of the money. This manifested itself here because the Accused ignored the rules relating to the Stichting Group embodied in the documents by which they were created, in terms of exchange of the shares and repatriating the funds without waiting until the end of the specified period as required by the Stichting Group documentation (T94, 30 July 2010).

It is appropriate to set out the way in which the Crown seeks to apply the facts to the elements of the money laundering count (CCS, paragraphs 165-172) (with footnotes and evidentiary references omitted): “165) Count 1 avers that, contrary to s 400.3(1) of the Criminal Code, the accused between about 30 April 2004 and about 30 September 2005 at Sydney in the State of New South Wales and elsewhere dealt with property, intending that the property, namely a parcel of shares, would become an instrument of crime, in that it would be used to facilitate the commission of an offence by Barat Advisory Pty Limited and at the time of the dealing, the value of the property was $1,000,000 or more. The accused dealt with property 166) On or around 3 February 2005 the accused dealt with property, namely, the Forty Eight Million Admerex Shares, when on behalf of Barat Advisory he disposed of those shares by exchanging them for one million Temenos shares. Intending that the property would become an instrument of crime 167) The Admerex Shares remained under the beneficial ownership and effective control of Barat Advisory, through the accused, after they were purportedly transferred into the Stichting Group companies on or around 11 June 2004. At the time of that purported transfer, and subsequently, the accused intended to use the Stichting Groups to conceal the disposal of the Admerex Shares, and the proceeds of such disposal, in order to avoid the payment by Barat Advisory of capital gains tax. 168) When the Forty Eight Million Admerex Shares were disposed of on 3 February 2005, by exchanging them for one million Temenos shares, the accused intended to avoid the payment by Barat Advisory of tax on the capital gain which was derived as a result of that disposal. For that purpose, the accused used the Stichting Groups to conceal the disposal of the Forty Eight Million Admerex Shares and the proceeds of that disposal. 169) As such, the accused intended that the Forty Eight Million Admerex Shares would be used in the commission of, or used to facilitate the commission of, an offence that may be dealt with as a Commonwealth indictable offence, namely, the obtaining by Barat Advisory of a financial advantage by deception, contrary to s 134.2 of the Criminal Code. 170) On this basis, the accused intended that the Forty Eight Million Admerex Shares would become an instrument of crime. At the time of the dealing the value of the property was $1,000,000 or more 171) When the Forty Eight Million Admerex Shares were disposed of on 3 February 2005, by exchanging them for one million Temenos shares, they were valued on the Australian stock exchange at between $8,400,000 and $9,120,000. 172) Alternatively, when they were disposed of on 3 February 2005, the Forty Eight Million Admerex Shares were valued at between $8,480,000 and $9,494,012.30, being the value of the one million Temenos shares for which they were exchanged.”

The Crown seeks to apply the facts to the elements of the dishonest obtaining offence in the following way (CCS, paragraphs 173-177) (with evidentiary references omitted): “173) Count 2 avers that, contrary to s 135.1(1) of the Criminal Code, the accused on or about 13 November 2006 at Sydney in the State of New South Wales did, with the intention of dishonestly obtaining a gain from the Commonwealth, cause to be lodged an income tax return in the name of Barat Advisory Pty Limited for the year ending 30 June 2005 containing false information, namely that the net capital gain from the sale of shares in Admerex Limited was $4,597. The accused caused to be lodged the Barat Advisory income tax return for the financial year ended 30 June 2005 which contained false information 174) On or about 13 November 2006, the accused caused to be lodged an income tax return in the name of Barat Advisory for the financial year ended 30 June 2005. 175) That tax return contained false information, namely, that the net capital gain in the financial year ended 30 June 2005 from the sale of shares in Admerex was $4,597. This information was false because Barat Advisory derived a net capital gain of between $6,560,000 and $7,574,012.30 from the disposal of the Forty Eight Million Admerex Shares on or around 3 February 2005. With the intention of dishonestly obtaining a gain from the Commonwealth 176) The accused intended to obtain a gain for Barat Advisory from the Commonwealth, namely, keeping the capital gain derived from the disposal of the Forty Eight Million Admerex Shares, and avoiding the payment of tax on that capital gain. 177) The intention of the accused was dishonest because: i the accused was aware that tax was payable on any capital gain derived from the disposal by Barat Advisory of the Admerex Shares, including the Forty Eight Million Admerex Shares, and ii the accused used the Stichting Groups to conceal the disposal of the Admerex Shares, including the Forty Eight Million Admerex Shares, and the proceeds of such disposal, in order to avoid the payment by Barat Advisory of tax on any such capital gain.”

The Crown seeks to aggregate the evidence in relation to both counts and alleges that the activity relating to the trading is relevant to the second count dealing with the inaccuracy of the return, and vice-a-versa, in that the way in which the Accused went about providing information to his accountants and lodging his return, was a reflection that he had dealt with the shares previously with a view to avoiding tax.

The Crown has indicated an intention to call the following witnesses at trial: (a) Philip Bacon, Philip Bacon Galleries; (b) Peter Carney, Admerex; (c) Kim Goodall; (d) Anne Harley; (e) Stephen Knipler, Australian Taxation Office (“ATO”); (f) Shaun Mark, financial analyst, Australian Federal Police (“AFP”); (g) Colin Samuel, Grant Thornton Services Pty Limited; (h) William Shew, Grant Thornton Services Pty Limited; (i) Stephen Thurn (previously a chartered accountant at Grant Thornton Services Pty Limited).

In addition to these witnesses, the Crown proposes to tender documents, some of which will be referred to later in this judgment.

Detailed written submissions were furnished by counsel with respect to the issues raised in the Further Amended Notice of Motion falling for pretrial determination. It is not necessary to recite in detail the submissions advanced on the application, the written submissions being available on the Court file if future reference is necessary, together with the transcript of the oral submissions. It is appropriate, however, to provide an overview of the submissions concerning each area of objection. The Permanent Stay Application Upon the Ground of Abuse of Process Submissions of the Accused

Mr Wigney SC, for the Accused, submits that the Court should stay the prosecution of the Accused on the proposed indictment as an abuse of process. He submits that it will be an abuse of process to include in the one indictment, two charges that arise from substantially the same act where that would be unjustifiably oppressive to the Accused: Pearce v The Queen [1998] HCA 57; 194 CLR 610.

Mr Wigney SC places particular reliance upon decisions of the Court of Criminal Appeal where it has been said that an abuse of process occurs where the criminality of one of the charges encompasses the criminality of another charge: Thorn v R [2009] NSWCCA 294 at [27]; Nahlous v R [2010] NSWCCA 58 at [13]-[18]; R v Jones; R v Hili [2010] NSWCCA 108 at [17]-[18].

Mr Wigney SC submitted that, in considering the availability of the stay on the basis of double jeopardy, it is immaterial that there may be no identity of elements between the two offences such as to give rise to a plea in bar: Pearce v The Queen at 620 [29]. He submitted that the present case is relevantly indistinguishable from R v Jones; R v Hili . He submitted that, as was the case in R v Jones; R v Hili , in this case it is impossible to imagine how the s.135.1 charge (the second count) could be committed without necessarily giving rise to facts that would amount to a breach of s.400.3 (the first count).

He submitted that the relevant “dealing” in property alleged in the first count is the dealing with the parcel of Admerex shares which occurred on 3 February 2005, when those shares were allegedly swapped for a parcel of shares in another company (Temenos) (CCS, paragraph 166). He submitted that the Crown does not allege in this case that there was anything unlawful or dishonest per se in relation to that dealing, rather the Crown alleges that the dealing gave rise to a capital gain (CCS, paragraph 163). It is that capital gain that the Crown alleges was omitted from the tax return of Barat Advisory which was the physical element of the second count (CCS, paragraph 175).

Mr Wigney SC submitted that in every case where the physical element of a s.135.1 charge is the lodging of a tax return which was false because a capital gain was omitted from the return, there will always be a prior dealing with property that gave rise to the capital gain. Where it is alleged by the Crown that the intention not to disclose the capital gain existed at the time of the relevant dealing (CCS, paragraphs 169, 173, 176), the offence under s.135.1 (committed upon the lodging of the false return) will necessarily also give rise to a consequential breach of s.400.3.

In these circumstances, Mr Wigney SC submitted that the Accused is being twice vexed for the one cause. There is no additional criminality involved in the prior dealing that is not necessarily encompassed in the s.135.1 offence.

Mr Wigney SC submitted that the circumstances of the present case are relevantly identical to the transmission of money by the Accused in R v Jones; R v Hili , which was the initial step in a round-robin scheme which was part and parcel of the scheme by which the Accused was alleged to have defrauded the Commonwealth by avoiding the payment of tax, and which was the dealing that was the physical element in the money laundering offence. Mr Wigney SC submitted that it is plain that the Court of Criminal Appeal in R v Jones; R v Hili (at [17]-[18]) considered that the money laundering count offended the principle of double jeopardy and was an abuse of process.

It was submitted for the Accused that the statements in R v Jones; R v Hili echoed the concerns of the Court of Criminal Appeal in Thorn v R and Nahlous v R . That concern involved the improper and unjustified charging of a money laundering count alleging dealing in property with the intention that the property would become an instrument of crime, when the substantive crime, being the crime that was committed with the use of that property, is also charged.

Mr Wigney SC noted that, in Thorn v R , Howie J provided an analogy of a robber being sentenced for both the robbery and being in possession of stolen goods. He submitted that an appropriate analogy in the present case would be charging a drug importer, who imported drugs in a shipping container, not only with a substantive count of drug importation, but also with money laundering because he was involved in dealing with property, being the shipping container, that was an instrument of the substantive offence.

Mr Wigney SC submitted that this not only offends the double jeopardy maxim because the Accused is being twice vexed with the one cause, but it is also oppressive and vexatious, and brings the administration of justice into disrepute and amounts to prosecutorial harassment or misuse of prosecutorial powers: The Queen v Carroll [2002] HCA 55; 213 CLR 635 at 673 [130]; Island Maritime Limited v Filipowski [2006] HCA 30; 226 CLR 328 at 354 [78].

He submitted that the joinder of the two counts in the indictment will unnecessarily complicate and lengthen the trial and, in this sense, is akin to charging an accused person both with conspiracy to commit an offence and the substantive offence, a practice which has been criticised by the Courts: The Queen v Hoar [1981] HCA 67; 148 CLR 32.

Mr Wigney SC submitted that the money laundering charge (Count 1) should be stayed on this basis as an abuse of process, with it being open to the Crown to proceed on the dishonest obtaining charge (Count 2). In oral submissions, he conceded that it may be open to the Court, if the Accused’s submission was accepted, to allow the trial to proceed on the first count only (T17, 29 July 2010). He contended, however, that this would involve a prosecution in circumstances where a substantive charge was appropriate (the second count) and where the legislative purpose of money laundering offences would not be served by prosecution of the first count. Submissions of the Crown

The Crown submitted the prosecution of the Accused for the two counts contained in the indictment does not constitute an abuse of process. It was submitted that, unlike the circumstances considered in the decisions of the Court of Criminal Appeal relied upon by the Accused, the alleged facts in this case (upon which the money laundering charge is based) disclose significant additional criminality, over and above the facts which are required to establish the elements of the dishonest obtaining charge. Although there is some overlap between the alleged facts in relation to each count, the Crown submitted that it is appropriate that both charges be included in the indictment, in order to properly reflect the extent of the alleged criminality of the Accused, in accordance with Pearce v The Queen , in particular at 620-621 [29]-[30].

The Crown submits that, as in the present case, the two charges against the appellant in Pearce v The Queen arose from a single episode and involved an overlap between the facts required to prove the elements of both offences, but with the elements of each offence not being identical: Pearce v The Queen at 613 [7], 615-616 [16]. In this context, the Crown observed that the High Court considered the nature of double jeopardy and clarified the relevant principles as follows: (a) double jeopardy has been used with various meanings ranging from the pleas in bar of autrefois acquit and autrefois convict, to a wider principle of double punishment (at 614 [9]); (b) double jeopardy is an expression employed in relation to different stages of the criminal justice process, from prosecution to conviction and punishment (at 614 [9]); (c) if there is a single rationale for the rule against double jeopardy, it is that the State should not be allowed to make repeated attempts to convict an individual for the same alleged offence (at 614 [10]); (d) in considering the application of the rule against double jeopardy, it must also be taken into account that (at 614-615 [10]-[13]): (i) a single series of events can give rise to several different criminal offences to which different penalties attach, (ii) an offender should only be punished for the offence with which he or she was charged, and (iii) as a corollary to the above, prosecuting authorities have sought to frame charges which will reflect all of an accused’s criminality to enable appropriate punishment, (e) a plea in bar was not available to the appellant because the elements of the offences were not identical and neither offence was wholly included in the other (at 616-619 [17]-[28]); (f) a court retains its inherent power to prevent abuse of process and there may be cases in which repeated prosecution gives rise to an abuse of process, even where no plea in bar is available (at 620 [29]); (g) however, it is for prosecuting authorities to decide which charges should be laid and, ordinarily, it is preferable that all offences arising out of a single event, or series of events, are dealt with at the same time, although charges should not be multiplied unnecessarily (at 620-621 [39]); (h) there was no abuse of process in charging the offender in that case with both of the offences (at 621 [31]); (i) on sentence, to the extent that an offender is convicted of different offences which contain common elements, he or she should not be punished twice for those common elements; this should be achieved as a matter of commonsense, not as a matter of semantics, by first determining the appropriate penalty for each offence and then considering questions of cumulation or concurrence and totality (at 623-624 [40]-[50]).

The Crown submitted there was no relevant distinction between the charges and circumstances considered in Pearce v The Queen and the charges and circumstances in the present case. Indeed, the Crown submitted that the application of the principles in Pearce v The Queen operated with added force here, because there was a greater overlap between the offences committed in Pearce v The Queen than there is in the present case.

The Crown submitted that the money laundering charge is directed to separate and earlier conduct, in which it is alleged that the Accused took steps in order to facilitate the evasion of tax and, in particular, the disposal of the 48 million Admerex shares in exchange for one million Temenos shares on 3 February 2005. The dishonest obtaining charge is directed to the subsequent conduct of the Accused when, on 13 November 2006, the tax return for Barat Advisory was lodged without disclosing the capital gain on that disposal of shares. By way of contrast, the Crown submitted that both offences considered in Pearce v The Queen arose out of a single incident in which the offender broke into the victim’s home and beat him.

The Crown submitted that analysis of the decisions of the Court of Criminal Appeal in Thorn v R , Nahlous v R and R v Jones; R v Hili must be undertaken with regard to the Pearce v The Queen principles, and their application.

The Crown submitted that the prosecution case in this matter is significantly different to the facts of the cases in which criticism was directed at the prosecution. In this case, the Crown submitted that the primary case is dealt with in the first count, being the s.400.3(1) charge of dealing with property intending that the property would become an instrument of crime. That charge does not require proof that the property was actually used as an instrument of crime. The second count relates to an allegation that a s.135.1(1) offence was later committed by the lodgement of a false income tax return. The Crown submitted that the two charges complement each other and relate to different aspects of the conduct of the Accused.

The Crown referred to the facts of the Court of Criminal Appeal decisions relied upon by the Accused, and sought to distinguish them by reference to the facts and the particular observations made by the Court in those cases. With respect to Thorn v R , the Crown submitted that the circumstances of that case are different to the present case, where it is alleged that the very purpose of the Stichting Group was to hide the source of the funds derived from the disposal of the Admerex shares. The Crown submitted that the Accused is incorrect in submitting that the Crown does not allege that there was anything per se unlawful or dishonest in relation to the dealing with the 48 million Admerex shares on 3 February 2005. To the contrary, the Crown submitted that the Accused specifically orchestrated the arrangements concerning the disposal of the shares in a manner by which he intended that they would become an instrument of crime.

With respect to Nahlous v R , the Crown submitted that the circumstances are very different to the present case. The money laundering count in the present case is directed to the use by the Accused of the Stichting Group in order to hide the source of the proceeds of the disposal of the Admerex shares.

With respect to R v Jones; R v Hili , the Crown submitted that the charges there were directed to a tax evasion scheme by which the offender and his company evaded personal and company tax. False documents were created to support deductible company expenses for management and consultancy fees. The funds were then sent via a Vanuatu-based round robin through accounts in New Zealand, from where they were returned to the offender’s personal bank account in Australia. Pursuant to this scheme, the offender’s company claimed tax deductions for the false management and consultancy fees, and the offender did not pay income tax on funds which were, in reality, dividends paid to him by his company. The Crown submitted that the round robin in that case was the mechanism by which funds were transferred from the company account into the offender’s personal account and, as such, went directly to an element of the charges of defrauding the Commonwealth and obtaining a financial advantage by deception. Without the round robin or some equivalent mechanism, the Crown submitted that the company funds would not have been transferred into the offender’s personal account and he would not have received the funds upon which tax was payable for the purpose of the charges under s.29D Crimes Act 1914 (Cth) and obtaining a financial advantage by deception contrary to s.134.2(1) Criminal Code Act 1995 (Cth) .

The Crown noted that R v Jones; R v Hili was a Crown appeal and that the observations of Rothman J (McClellan CJ at CL and Howie J agreeing) did not relate to arguments made by the parties. The Crown pointed to the observation of Rothman J at [17] that it was “impossible to imagine how either one of these offences could be committed (particularly given the facts in this case) without necessarily giving rise to facts that would amount to a consequential breach of the money laundering offence’ . In contrast to the circumstances of R v Jones; R v Hili , the Crown submitted that it was possible for the second count on the indictment in the present case to have been committed without the establishment and use by the Accused of the Stichting Group. Even without any reference to the Stichting Group, the Crown submitted that the s.135.1(1) offence could still have been committed by reference to the following matters: (a) the Admerex shares would have remained in the name of Barat Advisory; (b) the disposal of the Admerex shares, by exchanging them for one million Temenos shares, could have occurred; (c) the sale of the one million Temenos shares could have occurred, resulting in the proceeds of those sales being received into bank accounts operated by Barat Advisory; (d) the Accused could have failed to disclose the capital gain derived from the disposal of the Admerex shares in the tax return of Barat Advisory; (e) this non-disclosure could have been dishonest because the Accused knew of Barat Advisory’s liability to pay capital gains tax.

The Crown submitted that this analysis demonstrates that, in contrast to the Court of Criminal Appeal decisions relied upon by the Accused, the use by the Accused of the Stichting Group to conceal the disposal of the Admerex shares involved significant criminality, over and above what is required to establish the elements of the s.135.1(1) charge.

The Crown submitted that it is appropriate to include the money laundering charge on the indictment in order to properly reflect the alleged criminal conduct of the Accused, in accordance with the principles in Pearce v The Queen . Submissions of Accused in Reply

Mr Wigney SC submitted in reply that the first count does not involve any criminality that is not encompassed by the second count. He submitted that the money laundering charge involves the physical element of dealing in property, that property being the Admerex shares. That alleged dealing gave rise to the capital gain that was allegedly not disclosed to the ATO. That non-disclosure is the subject of the dishonest obtaining charge.

Mr Wigney SC submitted that any case involving non-disclosure of a capital gain must involve a prior dealing with property that gave rise to the capital gain. That prior dealing is inherent in the non-disclosure count. He submits that the implicit suggestion in the Crown submission that, if the Accused was convicted on the second count, he could not be sentenced on the basis that the criminality involved in the offence included the prior dealing in the shares that is the subject of the first count, must be wrong.

The Accused submitted that the present case is plainly distinguishable from Pearce v The Queen . The additional charge in Pearce v The Queen involved an additional element not encompassed in the other charge. Mr Wigney SC submitted that there is no such additional element involved in this case. He referred to the observation in Nahlous v R at [17] that nothing said in Pearce v The Queen is inconsistent with a finding that the addition of the first count gave rise to double jeopardy, was oppressive and an abuse of process.

With respect to the Crown submission that the additional criminality involved in the first count concerned the establishment and use by the Accused of the Stichting Group, Mr Wigney SC submitted that this was not the way the charge is pleaded and particularised in the indictment. He submitted that the dealing, the subject of the first count, is not a dealing with the Stichting Group. Rather, the dealing particularised in the charge, and in the CCS, was dealing with the Admerex shares which gave rise to a capital gain. Whilst the facts and circumstances alleged by the Crown in relation to the establishment and use of the Stichting Group may be relevant to the first count, he submitted that they are equally relevant to the second count.

Mr Wigney SC submitted that the Crown case in relation to the second count was obviously that the Accused established and used the Stichting Group to enable him to omit any capital gain from Barat Advisory’s tax return (CCS, paragraph 177). The facts relating to the use of the Stichting Group therefore, he submits, do not amount to separate earlier conduct, or an additional element of criminality, such as was the case with the entry to the dwelling house in Pearce v The Queen so as to warrant the inclusion of the first count in the indictment.

Mr Wigney SC submitted that, in pointing out that the first count does not involve proof that the property (the Admerex shares) was actually used as an instrument of crime, the Crown both ignores the facts that form the basis of the Crown case and misses the point concerning the vice or oppression involved in proceeding on both the first and second counts. There could be no doubt, he submitted, that the Crown case here is that the relevant property (the Admerex shares) was actually used as an instrument of crime.

Accordingly, Mr Wigney SC submitted that the Crown has charged the Accused with both the substantive offence (the second count) and with dealing with the shares with the intention of facilitating the commission of that same offence (the first count), and that this is oppressive and vexatious, and amounts to prosecutorial harassment.

Mr Wigney SC submitted that it is not to the point that the facts in the present case are different to the facts in Thorn v R , Nahlous v R and R v Jones; R v Hili . The circumstances that led the Court of Criminal Appeal to criticise the laying of additional money laundering charges in those cases apply equally to this case. He submitted that the statements of principle, in the cited decisions of the Court of Criminal Appeal, support the Accused’s application for a stay on the present indictment as an abuse of process. Determination of Stay Application Upon Abuse of Process Grounds

The foundation in principle for the Accused’s application must be found in case law concerning abuse of process. Principles Concerning a Permanent Stay for Abuse of Process

The Accused seeks an order that his trial on the present indictment, containing both counts, be permanently stayed on the basis that it is an abuse of process. This is an exceptional remedy. In R (Cth) v Petroulias (No. 1) [2006] NSWSC 788; 217 FLR 242 at 260-262 [58]-[63], I summarised the general principles in the following way: “58 It has been emphasised that the power to stay permanently a criminal prosecution will be used only in most exceptional circumstances: Jago v District Court (NSW) (1989) 168 CLR 23 at 31 (Mason CJ). If permanent stay orders were to become common place, it would not be long before courts would forfeit public confidence: Jago at 50 (Brennan J). The power is exercisable only in exceptional cases or sparingly and with the utmost caution: Jago at 76 (Gaudron J). 59 In R v WRC (2003) 59 NSWLR 273, Spigelman CJ (Dunford and Hidden JJ agreeing) said at 282 [55]-[56]: ‘A permanent stay of criminal proceedings is a wholly exceptional intervention into the processes of the criminal law. The public interest in ensuring that persons charged with crimes are tried is entitled to significant weight in the necessary balancing process. (See, for example, Jago (at 30 and 49–50).) Because of this, as Mason CJ said in Jago (at 34): ‘a permanent stay should be ordered only in an extreme case …’.’ 60 The onus of satisfying the Court that there is an abuse of process lies upon the party alleging it and the onus is a heavy one: Williams v Spautz at 529. It is the defence that assumes the high burden of seeking to establish irredeemable abuse of process so as to preclude a fair trial: R v Petroulias (2005) 62 NSWLR 663 at 688 [103]-[104]. 61 The Accused submits that the approach to be taken in determining the broader abuse of process ground involves the weighing process referred to by Mason CJ, Deane and Dawson JJ in Walton v Gardiner at 395-396: ‘As was pointed out in Jago , the question whether criminal proceedings should be permanently stayed on abuse of process grounds falls to be determined by a weighing process involving a subjective balancing of a variety of factors and considerations. Among those factors and considerations are the requirements of fairness to the accused, the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime, and the need to maintain public confidence in the administration of justice.’ 62 The circumstances that may constitute oppression or an abuse of process are various and the discretionary considerations that may be relevant in dealing with them cannot be rigidly confined: The Queen v Carroll (2002) 213 CLR 635 at 650-651 [47] (Gleeson CJ and Hayne J). 63 The jurisdiction to stay proceedings as an abuse of process is wide ranging, but not without limits. It has been said that the discretion cannot be exercised to stop proceedings because the evidence against the accused is weak or because the Bench disapproves of the prosecution: R v Chairman of London County Sessions; Ex parte Downes (1953) 37 Cr App R 148 at 152; Pattenden, Judicial Discretion and Criminal Litigation , 2nd edn, 1990, Clarendon Press, page 33.”

The observations of the Court of Criminal Appeal in a number of sentencing decisions for money laundering and other offences form an important body of law which I must consider on this application. It is appropriate to observe that those cases did not involve proceedings in which the Court was asked to stay a prosecution as an abuse of process. The context in which these judicial observations were made was that of sentence appeals, in which no challenge was made to conviction and where orders made by the Court involved an adjustment of sentences which had been imposed for several related offences. The Decision in Pearce v The Queen

Both the Accused and the Crown rely upon the decision of the High Court of Australia in Pearce v The Queen and it is appropriate to identify the statements of principle in that case. McHugh, Hayne and Callinan JJ at 614 [9]-[10] observed that the expression “double jeopardy” is not always used with a single meaning, and that sometimes it is used to encompass what is said to be a wider principle that no one should be punished again for the same matter. It is an expression that is employed in relation to several different stages of the criminal justice process: prosecution, conviction and punishment. The underlying idea of the rule against double jeopardy is that the State should not be allowed to make repeated attempts to convict an individual for an alleged offence, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent he may be found guilty.

As pervasive as the principle referred to in the preceding paragraph may be, McHugh, Hayne and Callinan JJ observed, at 614 [10], that it is not the only force at work in the development of this part of the common law, with three further forces being identified as well. The three further forces were described as follows at 614-615 [11]-[15]: “11 First, as the range of crimes and punishments for crime has expanded, it has become apparent that a single series of events can give rise to several different criminal offences to which different penalties attach. 12 Secondly, it has been recognised that an offender should be punished only for the offence with which he or she was charged, and not for some offence or version of the offence not charged. 13 Thirdly, and as a corollary to the second matter we have mentioned, prosecuting authorities have sought to frame charges against an accused that will reflect all of that accused's criminal conduct and thus enable the imposition of punishment that will truly reflect the criminality of that conduct. 14 The fact that double jeopardy is spoken of at several different stages of the process of criminal justice and the presence of other (sometimes competing) forces means that the treatment of double jeopardy has not always been clearly based on identified principles. It is not necessary, however, to resolve all the apparent inconsistencies that can be identified in the application of the rule or rules against double jeopardy in deciding the present appeal, and we do not attempt to do so. 15 In this case it is helpful to consider the stages in the criminal justice process separately, and to deal with issues of double prosecution separately from issues of double punishment. At the stage of prosecution, it is necessary to consider first whether the appellant was entitled to enter a plea in bar to one or more counts on the indictment, and secondly whether he was entitled to a stay of proceedings on one or more counts. At the stage of punishment, it is necessary to consider whether he was entitled to be sentenced in some way differently from the sentences imposed upon him.”

With respect to the power to stay proceedings in an appropriate case, McHugh, Hayne and Callinan JJ said at 620-621 [29]-[32]: “29 Confining the availability of the plea in bar in this way does not deny the existence of the inherent powers of a court to prevent abuse of its process. That there may be cases in which the repeated prosecution of an offender in circumstances where that offender has no plea in bar available would be an abuse of process is illustrated by Rogers v The Queen . 30 The decision about what charges should be laid and prosecuted is for the prosecution. Ordinarily, prosecuting authorities will seek to ensure that all offences that are to be charged as arising out of one event or series of events are preferred and dealt with at the one time. Nothing we say should be understood as detracting from that practice or from the equally important proposition that prosecuting authorities should not multiply charges unnecessarily. 31 There was, however, no abuse of process in charging this appellant with both counts 9 and 10. The short answer to the contention that the charging of both counts was an abuse of process is that because the offences are different (and different in important respects) the laying of both charges could not be said to be vexatious or oppressive or for some improper or ulterior purpose. To hold otherwise would be to preclude the laying of charges that, together, reflect the whole criminality of the accused and, consonant with what was held in R v De Simoni , would require the accused to be sentenced only for the offence or offences charged, excluding consideration of any part of the accused's conduct that could have been charged separately. 32 It follows that the primary judge was right to conclude that the proceedings on the indictment (or counts 9 and 10 in particular) should not be stayed.”

I pause to observe that the remedy which the Accused seeks in this application is that which the High Court refused in Pearce v The Queen . It is necessary for the Accused to establish an entitlement to that remedy on the facts of his case and in accordance with the principles in Pearce v The Queen .

Having determined that a stay of proceedings was not appropriate in that case, McHugh, Hayne and Callinan JJ turned, at 621 [33], to consider what were described as “more difficult questions” in deciding whether the appellant “could be or was doubly punished” . An understanding of what the High Court said in that context is pertinent to this case. It assists an understanding of the powers of criminal courts to do justice where several related offences are proved, in circumstances where the prosecution of those offences did not constitute an abuse of process.

Reference was made, at 621 [34], to the practice that a person should not be twice punished for what is substantially the same act: The Queen v Hoar at 38. Their Honours continued at 621-622 [35]-[39]: “35 Again, it is as well to begin from some general considerations. 36 First, in creating offences, legislatures must necessarily proscribe conduct by reference to particular elements. A complex act by an accused may contain all the elements of more than one offence. 37 Secondly, it follows that to punish the whole of the accused's criminal conduct, there will be cases where more than one offence must be charged and punishment exacted for each. 38 Thirdly, since the enactment of s 33 of the Interpretation Act (UK) and its Australian equivalents, legislatures have sought to address some of the questions that then arise. At first, the focus was upon punishment twice for the same offence. More recently, however, some legislation in Australia has sought to deal with whether an offender can be punished twice for the same act or omission. And, of course, in Australia, some legislation has sought to deal with the consequences of overlapping state, territory, or federal legislation. 39 Fourthly, and very importantly, it is highly undesirable that the process of sentencing should become any more technical than it is already."

Their Honours said with respect to double punishment at 623 [40]: “To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.”

In a well-known part of the joint judgment, the following was said with respect to sentencing for multiple offences, at 623-624 [44]-[48]: “44 Does that matter if, as was the case here, an order was made that the sentences be served concurrently? 45 To an offender, the only relevant question may be ‘how long’, and that may suggest that a sentencing judge or appellate court should have regard only to the total effective sentence that is to be or has been imposed on the offender. Such an approach is likely to mask error. A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course, as questions of totality. 46 Sentencing is not a process that leads to a single correct answer arrived at by some process admitting of mathematical precision. It is, then, all the more important that proper principle be applied throughout the process. 47 Questions of cumulation and concurrence may well be affected by particular statutory rules. If, in fixing the appropriate sentence for each offence, proper principle is not applied, orders made for cumulation or concurrence will be made on an imperfect foundation. 48 Further, the need to ensure proper sentencing on each count is reinforced when it is recalled that a failure to do so may give rise to artificial claims of disparity between co-offenders or otherwise distort general sentencing practices in relation to particular offences.”

In a separate judgment, Gummow J said at 629 [67]-[68]: “67 In Australia, concerns with ‘double jeopardy’ have come to be expressed at common law in differing ways by an evolutionary process which has crossed what often in the legal system is a false divide between substance and procedure. Thus, even if a plea in bar is not available, successive prosecutions may be an abuse of process. It should also be accepted that the inclusion of separate counts for what in substance, if not entirely in form, is the same offence may be an abuse of process. For the reasons given by the other members of the Court, there was no abuse of process here. The decision of the Court of Criminal Appeal to dismiss the appeal against conviction was correct. 68 However, the principles involved in the notion of ‘double jeopardy’ also apply at the stage of sentencing. They find expression in the rule of practice, ‘if not a rule of law’, against duplication of penalty for what is substantially the same act.”

Kirby J, in a separate judgment, said at 640 [98]: “The decision of this Court in R v De Simoni has stood for seventeen years. Its correctness was not questioned in this appeal. Although addressed to the principles governing punishment, necessarily whilst it stands it has consequences for the exercise of prosecutorial discretions. In many cases, prosecutors will, understandably, frame the charges contained in the counts of an indictment in terms of several overlapping offences. They will do so to avoid the risk that an accused might escape punishment for circumstances of aggravation appearing in the elements of separate offences. Thus, in the present case, it was accepted for the appellant that if he had pleaded only to count 10 (based upon s 110 of the Act), there would have been a good argument that it would not have been open to the Crown to rely upon the specific intent to cause grievous bodily harm to Mr Rixon, which is an ingredient of the offence based on s 33 of the Act, alleged in count 9. That concession was properly made. In such circumstances, it is unsurprising that prosecutors should charge an accused with separate offences which they consider to be applicable and different. This then leaves it to the judge, at a later stage of the proceedings, to ensure against any impermissible double jeopardy which this course produces.”

The resolution of the present stay application turns upon the application of these principles to the facts and circumstances of this case.

It may be seen from Pearce v The Queen that the test for abuse of process is a relatively demanding one. It is not enough that there be offences prosecuted with overlapping elements. Several charges may be laid arising out of the same incident, let alone the same course of conduct on the part of the accused person. Proper respect and regard is paid to the exercise of prosecutorial discretion.

If several charges are laid with respect to the course of conduct of the accused person, and that person is convicted of the charges, then the court on sentence will ensure that there is no double punishment, with this outcome being achievable by assessment of the criminality reflected in each offence, and then by application of the principles of cumulation, concurrency and totality.

In the end, a criminal court will seek to ensure that justice is done by the exercise of whichever power is appropriate in the circumstances. To stay the prosecution on indictment of several offences as an abuse of process is an exceptional remedy. If a proper foundation for that remedy is made out, the Court should not hesitate to grant it. However, it is necessary to have regard to the full expression of the principles in Pearce v The Queen , and the underlying principle concerning the exceptional nature of the stay remedy, in approaching an application such as this. The Decision in Island Maritime Limited v Filipowski

The High Court returned to the topic of abuse of process in criminal proceedings in Island Maritime Limited v Filipowski . Gummow and Hayne JJ said at 443 [41]: “‘Double jeopardy’ is an expression that is not always used with a single meaning. It is an expression used in relation to several different stages of the process of criminal justice: prosecution, conviction and punishment. It describes values which underpin a number of aspects of the criminal law, rather than a rule that can be stated as the premise for deductive reasoning. The essence of these values is most often seen as captured in three maxims: interest reipublicae ut sit finis litium (it is in society's interest that there be an end to litigation), res judicata pro veritate accipitur (what is adjudicated is taken as the truth), and nemo debet bis vexari pro una et eadem causa (no one should twice be vexed for one and the same cause). It is these values that underpin the rule that evidence is inadmissible where, if accepted, it would overturn or tend to overturn an acquittal. It is these values that inform the rules governing successive prosecutions - rules which find their origins in the pleas in bar of autrefois convict and autrefois acquit but now have wider application than those pleas in bar.”

Gummow and Hayne JJ commented upon the scenario where overlapping and related statutory offences could apply to a single course of conduct, at 344 [43]-[44]: “But until more recent times, the pleas of autrefois acquit and autrefois convict ‘remained the only manifestations of the rule against double jeopardy’. As the criminal law has become more complex, and as the number of offences that may be dealt with summarily has increased, questions of double jeopardy have taken on greater significance. When criminal offences were relatively few and distinct, a single course of conduct would constitute but one offence. With the proliferation of overlapping and related statutory offences, a single allegedly criminal transaction will often yield numerous offences. That it is the values of double jeopardy that inform the rules about double prosecutions is most easily demonstrated by reference to summary prosecutions. First, a conviction in a court of summary jurisdiction does not invoke doctrines of merger by which there is the substitution of a new liability. The principles that are to be applied in considering cases of successive prosecutions in a court of summary jurisdiction are developed by analogy with the principles that govern the availability of pleas in bar in a court of record. They draw upon the values encompassed in the expression double jeopardy.”

Kirby J, at 355 [81], emphasised the exceptional nature of the power to stay for abuse of process, with regard to be had to the importance of independent prosecutorial discretion: “Generally speaking, courts exist to quell the controversies brought to them by the parties. Their powers, of their own initiative, to institute or terminate proceedings are exceptional. Such powers are kept in firm check. Courts in this country are not, generally speaking, inquisitors. This is true of civil process. With even greater emphasis, it is true of criminal process. There, judges are repeatedly enjoined to respect the prosecutor's independent discretions. Ordinarily, those discretions, if made within power, are exempt from judicial superintendence or interference. They generally belong, in our system of government, to the Executive, its agencies and officials, not to the judiciary which ordinarily keeps its distance from such decisions, just as it demands independence in the discharge of its own functions. These are not absolute rules. But in Australia these cases (both in criminal and civil proceedings) are acknowledged as exceptional.”

Kirby J referred again, at 356 [83](3), to the specific inhibition that applies to the disturbance by courts of prosecutorial discretions involving the commencement of criminal proceedings, a powerful consideration in Australia, given the conventional rules that govern the making of such decisions in this society. Relevant Victorian Cases

Grounds of appeal based upon suggested double punishment, and the principles in Pearce v The Queen , have been pressed in a number of decisions of the Victorian Court of Appeal. It is helpful to consider these decisions for the purpose of determining this stay application. In each case, the Court has assessed the circumstances of the case, and the sentences imposed, to determine whether double punishment, in the relevant sense, had been established.

In R v Langdon [2004] VSCA 205; 11 VR 18, an application was made for leave to appeal against convictions in circumstances where offenders had pleaded guilty on a presentment containing several counts, including trafficking in a drug of dependence, possession of substances for the purpose of trafficking in a drug of dependence and possession of a drug of dependence. On appeal, it was submitted that the offenders had effectively been prosecuted three times on facts that were common to all three counts, resulting in triple punishment. It was submitted that the facts which constituted the criminal activity on the second and third counts were subsumed by the first count. It was argued that other counts were an abuse of process because the factual matters were part and parcel of the one transaction. Gillard AJA (Batt and Eames JJA agreeing) considered these submissions (at 24 [32]ff) by reference to the principles in Pearce v The Queen and the test for abuse of process identified in that decision. Gillard AJA observed at 27 [47] that the first question was whether the elements in the particular counts were identical, or were elements of one count wholly included in another.

Gillard AJA concluded, at 28 [50], that the first question ought be resolved adverse to the appellants because each of the offences required proof of an element which the others did not. None of the elements of one offence were wholly included in another. Accordingly, a plea in bar was not available to the appellants.

Gillard AJA then turned, at 29 [57]ff, to the second question, namely whether the pleading of the various counts constituted an abuse of process in accordance with the principles in Pearce v The Queen . Gillard AJA concluded, at 29 [60], that there was no basis for granting a stay in that case. There was no abuse of process because the offences were different not only in relation to the elements, but also in relation to the factual matters which constituted each offence.

I pause to observe that the submissions for the Accused on the present application bore certain similarities to those advanced in R v Langdon. It is contended here for the Accused that the evidence of factual matters concerning the setting up of the Stichting Group and the transferring of Admerex shares (Count 1) is relied upon by the Crown as well to prove the non-disclosure of capital gain (Count 2). The fact that the Crown may seek to rely upon the same evidence to prove the particular elements of the first count and the particular elements of the second count does not, in accordance with the reasoning in R v Langdon , constitute circumstances in which a permanent stay of the prosecution of both counts together should be granted on the grounds of abuse of process.

Following the dismissal of the conviction appeal in R v Langdon , Gillard AJA turned to the sentence appeals where reliance was placed upon a double punishment ground, with particular reliance being placed upon Hoar v The Queen and Pearce v The Queen . Gillard AJA concluded, at 35 [94], that the various counts said to contain common factual matters in that case were separate and distinct. His Honour observed, at 35 [97], that the “issue of whether there has been double punishment is to be resolved by approaching the question as a matter of common sense” , with each case to be determined in accordance with its own circumstances. There had been an element of double punishment in that case as possession was common to both the trafficking and possession counts, and there had been double punishment for the criminal act common to both counts.

In the course of expressing conclusions concerning sentence, Gillard AJA said at 38-39 [115]: “In Pearce v R , above, the High Court concluded that the two counts contained a single act which was common to both. Yet the trial judge had ordered the same sentence in respect to each count and ordered that they be served concurrently. The court remitted the matter to the Court of Criminal Appeal with a direction to reconsider the matter consistently with the reasons of the court. The effect of what the High Court said and did is that although there may be two counts which are similar, it is the commonality of particular factual elements which may lead to a conclusion of double punishment. However, there may be other elements of the criminal act which are not common and these must be the subject of punishment. It would therefore follow that the sentencing judge would have to fix the substantial sentence in respect to one count and then in fixing the sentence for the other count, impose a sentence in respect to the matters which are not common to the substantial offence. This may be a difficult exercise.”

Gillard AJA, at 39 [116], recited the passages from the joint judgment of McHugh, Hayne and Callinan JJ in Pearce v The Queen at 624, including the comment that making the sentences imposed on two counts wholly concurrent may reveal error in that to do so “failed to take account of the differences in the conduct which were the subject of punishment on each count” . Gillard AJA moved to apply those principles with the first question being to determine “whether there are any remnants of any criminal conduct” on one count which had not been taken into account in the sentence imposed on the first count. After applying what his Honour described as a “common sense approach” , Gillard AJA concluded that the offence of possession of a drug of dependence was part and parcel of the trafficking, so that the proper approach in that case was to impose no sentence in respect of the possession count. After applying the principles of cumulation, concurrency and totality, sentences were imposed for the range of offences before the Court.

The approach in R v Langdon has particular utility in this case. There was a challenge on appeal to convictions on abuse of process grounds emerging from the principles in Pearce v The Queen . After considering the circumstances of the case, the Court concluded that an abuse of process had not been demonstrated. It was open to the prosecution to proceed with a presentment containing the offences for which the appellants were sentenced. At the sentencing stage, an assessment of the circumstances of the offences was required with the enquiry being to determine whether there were “remnants of criminal conduct” in the second offence which had not been taken into account on the first. This involved a practical and common sense approach. The sentencing court had appropriate flexibility and powers to accommodate the conclusion reached after that assessment had been made.

The approach in R v Langdon has been applied in later Victorian decisions. In R v Henderson-Drife [2007] VSCA 211, the appellant was sentenced for aggravated burglary, assault, criminal damage and possession of a firearm. An argument was advanced in the Court of Appeal that the appellant’s conduct overlapped between the counts so that the principles in Pearce v The Queen applied to prevent what would otherwise be double punishment. Whelan AJA (Chernov and Vincent JJA agreeing) said at [27]-[29]: “[27] In my view, this is not a case of overlap of the relevant kind. This is not a case where it can be said, as was held to be the case in R v Langdon and Langdon , that there is no remnant of criminality remaining in certain of the counts after one has had regard to the conduct required to establish guilt on another count. The appellant here used the firearm on 23 April 2006. Then, on 24 April 2006, he was found to be still in possession of it, fully loaded. Not only was he still in possession of that handgun, but it was revealed to be a handgun upon which the serial number had been defaced or altered. [28] Sentencing the appellant on each of these counts does not create the circumstances of double punishment dealt with in cases such as Pearce v R . [29] It can be maintained that the offences might properly be treated as part of one course of conduct or one episode and that that circumstance should be appropriately reflected in the cumulation. In my view, the sentencing judge has done that.”

In R v King [2007] VSCA 38, the appellant was found guilty of false imprisonment, making a threat to kill, intentionally causing injury, indecent assault and making a threat to cause serious injury. It was argued on appeal that the appellant’s culpability in relation to other counts had already been taken into account in sentencing him on the count of false imprisonment and that the sentencing Judge had failed to moderate the sentences in relation to those other counts with the consequence that the appellant had been exposed to double punishment. Redlich JA (Vincent JA and Habersberger AJA agreeing) said at [7]-[8]: “7 Where a number of serious offences are committed in the course of a single incident, a separate count should generally be laid for each offence if such conduct is to be taken into account. It is not required that the sentences imposed on each of those offences be made wholly concurrent. Whether the sentencing judge should make orders for cumulation will depend upon the circumstances of each case. The decision in R v O’Rourke illustrates the point. But where a number of counts are laid in relation to offences committed in the course of a single incident, care is required both in fixing the sentences and in making any order for cumulation to ensure that the accused is not subjected to double punishment. The sentencing judge must separate the bases of punishment in situations where a number of offences are committed within the ambit of a single incident or enterprise. 8 The crime of false imprisonment is a continuing one. In the present case it embraced a period during which multiple charged and uncharged offences were committed. The various counts on the presentment were separate and distinct. There were no common elements or common factual matters. There was no single act common to two or more of the counts. Each of the offences with which the appellant was charged involved discrete conduct calling for the imposition of separate and significant punishment. As a matter of principle it would not be correct to view the conduct involved in each of the substantive counts as subsumed within the count of false imprisonment.”

In R v NOR [2005] VSCA 46; 11 VR 390, the principles in R v Langdon were applied, involving an assessment of the circumstances of the particular case, leading to the conclusion at 399 [22] (different to that reached in R v Langdon ) that a count for possession of a drug did constitute a “remnant of criminality” so that a separate sentence was appropriate with respect to that count. In R v Orgill [2007] VSCA 236, Redlich JA (Chernov and Vincent JJA agreeing) applied the principles in Pearce v The Queen on a sentence appeal where double punishment was claimed, noting (at [17]) that the joint judgment in Pearce v The Queen (at 623) cautioned against the use of “excessive subtleties and refinements” in determining whether the same act is common to two offences and that the task should be approached with common sense.

In my view, these Victorian decisions provide assistance in the resolution of the present application. They involve application of the principles in Pearce v The Queen at different stages of the prosecution process. The Accused seeks the exceptional remedy of a permanent stay of the present indictment, and he must satisfy the Court that such a remedy ought be granted in this case before such an order will be made. Part of the resolution of that question will involve an understanding of the ability of a court, in accordance with Pearce v The Queen , if the point is reached where sentence is to be passed on both matters, to adopt a common sense approach to the assessment of criminality with respect to each offence, without the use of excessive subtleties and refinements, in determining whether the same acts are common to the two offences and whether there are remnants of criminality in one of the offences, which are not present in the other. The focus must be upon the elements of the two offences (and their differences) as well as the factual matters relied upon in evidence which bears upon the proof of those elements. Money Laundering Offences

Having identified the relevant principles concerning abuse of process and double punishment, it is appropriate to turn to an assessment of the money laundering offence created by s.400.3(1) Criminal Code Act 1995 (Cth) and its relationship to other statutory offences of the type charged in the indictment in the second count. This assessment will lead into an examination of the 2009 and 2010 decisions of the Court of Criminal Appeal which lie at the foundation of the Accused’s permanent stay application.

Section 400.3 Criminal Code Act 1995 (Cth) provides as follows: “400.3 Dealing in proceeds of crime etc.—money or property worth $1,000,000 or more (1) A person is guilty of an offence if: (a) the person deals with money or other property; and (b) either: (i) the money or property is, and the person believes it to be, proceeds of crime; or (ii) the person intends that the money or property will become an instrument of crime; and (c) at the time of the dealing, the value of the money and other property is $1,000,000 or more. Penalty: Imprisonment for 25 years, or 1500 penalty units, or both. (2) A person is guilty of an offence if: (a) the person deals with money or other property; and (b) either: (i) the money or property is proceeds of crime; or (ii) there is a risk that the money or property will become an instrument of crime; and (c) the person is reckless as to the fact that the money or property is proceeds of crime or the fact that there is a risk that it will become an instrument of crime (as the case requires); and (d) at the time of the dealing, the value of the money and other property is $1,000,000 or more. Penalty: Imprisonment for 12 years, or 720 penalty units, or both. (3) A person is guilty of an offence if: (a) the person deals with money or other property; and (b) either: (i) the money or property is proceeds of crime; or (ii) there is a risk that the money or property will become an instrument of crime; and (c) the person is negligent as to the fact that the money or property is proceeds of crime or the fact that there is a risk that it will become an instrument of crime (as the case requires); and (d) at the time of the dealing, the value of the money and other property is $1,000,000 or more. Penalty: Imprisonment for 5 years, or 300 penalty units, or both. (4) Absolute liability applies to paragraphs (1)(c), (2)(d) and (3)(d).”

Other provisions in ss.400.11-400.16 lay out an elaborate scheme for this class of offence. It is useful to set out ss.400.13 and 400.16 of the Act: “400.13 Proof of other offences is not required (1) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division that money or property is proceeds of crime, to establish: (a) a particular offence was committed in relation to the money or property; or (b) a particular person committed an offence in relation to the money or property. (2) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division an intention or risk that money or property will be an instrument of crime, to establish that: (a) an intention or risk that a particular offence will be committed in relation to the money or property; or (b) an intention or risk that a particular person will commit an offence in relation to the money or property. … 400.16 Saving of other laws This Division is not intended to exclude or limit the operation of any other law of the Commonwealth or any law of a State or Territory.”

It is appropriate to set out the terms of s.135.1, the dishonest obtaining charge contained in the second count: “135.1 General dishonesty Obtaining a gain (1) A person is guilty of an offence if: (a) the person does anything with the intention of dishonestly obtaining a gain from another person; and (b) the other person is a Commonwealth entity. Penalty: Imprisonment for 5 years.”

The money laundering provisions contained in Division 400 of Part 10.2 of Chapter 10 Criminal Code Act 1995 (Cth) commenced on 1 January 2003 on the repeal of, inter alia, the money laundering offence provisions contained in s.81 and s.82 Proceeds of Crime Act 1987 (Cth) : Re Sunshine Worldwide Holdings Pty Limited [2005] NSWSC 117; 62 NSWLR 400 at 404 [9].

The nature of money laundering offences under s.400 Criminal Code Act 1995 (Cth) has been the subject of comment in a number of decisions.

Section 400.3 provides for three separate offences of money laundering where the value of the money or property involved is $1 million or more. As Simpson J observed in R v Ansari [2007] NSWCCA 204; 70 NSWLR 89 at 93 [11], s.400.3, properly analysed, creates six different offences, in pairs, graded in descending order of seriousness. The level of seriousness depends upon what is alleged by the Crown to have been the state of mind of the accused person. Common to all offences is dealing with money or other property which is either the proceeds of crime, or which it is intended will (s.400.3(1)) or might (s.400.3(2) and (3)) become an instrument of crime.

An “instrument of crime” is defined in s.400.1(1) as “… [money or property that] is used in the commission of, or used to facilitate the commission of, an offence that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)” . As Simpson J also observed in R v Ansari at 94 [15], the “instrument of crime” form of a s.400 money laundering offence is an offence where an indictable offence is envisaged or contemplated in the future, and not one where an indictable offence has already been committed, yielding the money or property as proceeds.

A charge of conspiracy to commit a money laundering offence was considered in R v Ansari , but observations made in that case concerning the nature of money laundering offences per se are relevant to the present application.

In R v Ansari , Howie J made the following observations concerning the money laundering provisions in Division 400 of Part 10.2 of the Criminal Code Act 1995 (Cth) (at 118-119 [118]-[124]): “118 Division 400 of Part 10.2 of the Code is entitled ‘Money laundering’. For the purposes of the Division the term ‘instrument of crime’ is defined in this way; ‘money or other property is an instrument of crime if it is used in the commission of, or used to facilitate the commission of, an offence that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)’. There is also a definition of ‘proceeds of crime’ being ‘any money or other property that is derived or realised, directly or indirectly, by any person from the commission of an offence that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)’. There is a wide meaning given to the term ‘dealing with money or other property’ in s 400.2. It includes receiving or disposing of the money, importing it into or exporting it out of Australia and engaging ‘in a banking transaction relating to money or other property’. 119 The offences within the Division, therefore, apply to a large range of activity in relation to money or other property to be used in connection with, or arising from, serious crime. Not only is there a very wide ambit in relation to the conduct caught by the offences but there is also a substantial range of criminal activity to which the money or property could relate, being limited in effect to an indictable offence of the Commonwealth or a State or Territory. The offences are not concerned only with the source of the money or property that is dealt with but also its ultimate use. The offences cover money obtained illegally or to be used for illegal purposes or dealt with in a manner that is illegal. 120 With offences that are so wide ranging in their scope it becomes somewhat difficult to imagine an offence falling within the worst category of its kind against which any particular offence can be measured. It might be thought that dealing with money that is to be used for the purposes of terrorism might be within the class of the most serious offences encompassed by the sections in the Division. But it is perhaps not so difficult to conceive of offences that will form the bulk of conduct falling within the scope of the Division that would come before the criminal courts. The most obvious will relate to money obtained as a result of drug activity and that is being dealt with in order to make it more difficult to track or identify as the proceeds of a particular crime. It may also be money that has been legitimately earned but is to be dealt with in such a way as to disguise its source in order, for example, to defraud the taxation office. 121 But frequently it will be impossible for the authorities to identify the origins of the funds or what is ultimately to be the use made of them, yet it can be shown that the manner of dealing with them was a breach of the law, such as to avoid the mandatory reporting conditions under the Financial Transactions Reporting Act. It may be the case that the persons dealing with the money do not know its source or ultimate destination and do not care provided they are being paid for rendering a service. 122 The legislation itself has attempted to structure offences to give some guidance as to the seriousness of the conduct by reference to the applicable maximum penalty for each offence. The scheme is that the greater the sum of money involved, the more serious the offence. But the legislation also takes into account the mental state of the offender, so that an offence involving the intentional dealing with proceeds of crime or instruments of crime is more serious than one where the state of mind is recklessness as to the criminal nature of the property. Therefore s 400.3(1), where the amount involved is more than a million dollars and where the offender believes that the property is the proceeds of crime or intends that it will become an instrument of crime, provides for the most serious of the money laundering offences carrying a maximum penalty of imprisonment for 25 years and/or 1500 penalty units. 123 It is likely that an offender before the court for sentencing for an offence within the Division will be a person facilitating the laundering of the money or actually involved in that process, rather than the owner of the money or the beneficiary of the laundering. The prosecution may not be able to show that the offender knew of the source of the money or its ultimate destination. In Assafiri v R [2007] NSWCCA 159 an analogy was drawn between money laundering offences and drug importations in that both types of offences usually reveal a hierarchy of persons involved in the conduct who have different roles to play and different gains to be made from the commission of the crime. The most important consideration in sentencing an offender for an offence under this Division will be to consider what the offender did, because there may be little or no evidence before the court as to the organisation behind the offence, the source of the funds or the ultimate use to made of them: see R v Olbrich (1999) 199 CLR 270 at [19]. 124 However according to normal sentencing principles, if the Crown wants to submit that the particular offence is aggravated by a circumstance that makes it more serious than objectively it would appear to be from the bare conduct of the offender, for example because the money with which the offender dealt was known by him to be intended to support terrorism, then the Crown should prove that fact beyond reasonable doubt. On the other hand, if the offender seeks to mitigate the seriousness of the apparent conduct by some fact, for example that the offender believed the funds were to be used for a humanitarian purpose, then it would fall to the offender to prove that fact on the balance of probabilities. Where however the accused denies the offence or there is no evidence as to his state of knowledge of the source of the funds, the purpose of dealing with the funds or their ultimate destination, the Court must simply deal with the matter on the objective facts as proved by the evidence. That was the case here. The Judge was not required to find facts that were most favourable to the appellants.”

These observations concerning the nature of money laundering offences, and the criminality which is encompassed by those offences, is pertinent to the resolution of the present application. The High Court of Australia dismissed an appeal from the decision of the Court of Criminal Appeal, with no criticism or qualification being made concerning the observations of Howie J set out above: Ansari v The Queen [2010] HCA 18; 266 ALR 446.

In R v Foster [2008] QCA 90; (2009) 1 Qd R 53, the Queensland Court of Appeal, at 61-62 [44], referred to the observations of Howie J in R v Ansari at [119], [122]. McMurdo P (Mackenzie AJA and Chesterman J agreeing) considered a submission that the appellant’s fraudulent conduct was irrelevant to the offence of money laundering. McMurdo P said at 63-64 [57]-[60]: “[57] It follows that Mr Foster's plea of guilty to the offence charged under s 400.4 constituted an admission to the following. He dealt with money (A$306,722.58) by importing it into Australia through its electronic transfer into Australian bank accounts controlled by Mr Foster or those associated with him. That money was the proceeds of crime, that is, it was derived or realised from the commission of the offence of fraud against the bank and that fraud was an offence against the law of the Federated States of Micronesia and, if committed in Australia, would have constituted an indictable offence against the Criminal Code 1899 (Qld). Mr Foster believed the money was realised in this fraudulent way. The value of the money was greater than A$100,000. On the facts of the present case, the obtaining of the money by fraud was an essential element of the offence of money laundering. [58] Mr Foster's offence of money laundering occurred over a two to three month period and involved nine particularised dealings with money realised directly from the commission of nine particularised frauds on the bank. Those nine acts of obtaining money by fraud and the dealing with that money were closely interwoven in the single indictment charging the offence of money laundering. This entitled the prosecution to place before the sentencing judge the details of the fraud by which the money came to be proceeds of crime under s 400.4 and the circumstances which showed that Mr Foster believed the money to be proceeds of crime. [59] His Honour recognised that he was not sentencing Mr Foster for fraud; that the offence to which he pleaded guilty was ‘shortly known as money laundering’; that it involved bringing into Australia money which was the proceeds of crime; this was, and was regarded by the courts and the legislature as, a serious offence. The learned sentencing judge did not err in taking into account the circumstances of the fraud making the money proceeds of crime in determining where the present offence sat in the scale of seriousness of money laundering offences. [60] In any case, it will ordinarily be relevant in determining the appropriate sentence to consider how the money dealt with is proceeds of crime, for example whether it was obtained by organised criminal activity such as drug-dealing, people-trafficking, child prostitution or terrorist-related activities. Also relevant will be the extent of the offender's belief as to or knowledge of how the money is proceeds of crime.”

In R v Wing Cheong Li [2010] NSWCCA 125, Barr AJ (Allsop P, Basten JA, McClellan CJ at CL and Simpson J agreeing) referred to decisions to which reference has been made, including R v Ansari . After referring to these and other decisions, Barr AJ said at [40]-[42]: “40 Although the number of money laundering cases dealt with by the appellate courts is growing, it is still small. The cases do not even begin to trace the limits of the range of proper sentencing discretion. They can do no more in my opinion than produce a broad indication of the developing sentencing practice. Moreover, unless there are co-offenders, one may not look at the facts and result of a single case in order to show that the case under consideration is within or outside a proper range of sentencing discretion: R v George [2004] NSWCCA 247 per the Court at [48] – [49]. 41 Notwithstanding the gridlike structure of the subsections, their graded component parts and maximum sentences, they comprehend such a wide range of criminality that there is bound, I think, to be an appreciable variation in the length of sentences within and between them. It seems to me, without undervaluing the importance of the principal differentiating factors - minimum value of money or property and state of mind - that each case will have other variables that bear on sentence. Perhaps the most important will be an exact appreciation of what the offender did, what acts he performed and with what authority and over what period of time. The total value of money or property involved will be important, and whether the money or property belonged to the offender or to another. The degree of planning or deceit that led to the commission of the offence and whether actual loss resulted, and the extent of such loss, will be important. Just as there is a distinction between recklessness and belief, the precise nature of proved belief may vary so as to affect the sentence. There will be a range of possible strengths of belief, rising to certain knowledge, as in Maldonado . 42 The factors that were important for the sentencing of the respondent were these. The maximum custodial sentence was 25 years’ imprisonment. The amount of money involved was more than twice that required to bring the offence within subs 400.3 (1). The respondent believed that the money was the proceeds of the commission of an indictable offence, though he was not to be sentenced as though he had come to Australia with that belief or that he believed that the money came from the commission of a drug offence. Precisely what he did believe about the provenance of the money was not established. The strength of the respondent’s belief was not established. The respondent’s offending went over a period of days and he carried out the acts I have summarised above.”

In R v Guo; R v Qian [2010] NSWCCA 170, with the concurrence of Beazley JA and Kirby J, I referred at [84]-[91] to sentencing principles which had emerged from a number of authorities concerning money laundering offences. The Court of Criminal Appeal Decisions Relied Upon by the Accused

I come to the authorities which provide the foundation for the permanent stay application. As observed earlier, each decision of the Court of Criminal Appeal was a sentence case. No application was made for a permanent stay of an indictment upon the grounds of abuse of process in these cases.

In Thorn v R , Howie J (Campbell JA and Rothman J agreeing) considered an offender’s appeal concerning sentences passed for a number of offences of dishonestly obtaining a financial advantage contrary to s.134.2(1) Criminal Code Act 1995 (Cth) , and one count of dealing with the proceeds of crime contrary to s.400.4(1) of that Act. Howie J said at [26]-[33]: “26 The second ground asserts that the sentence for the money laundering offence was excessive. The submission is that the criminality involved in this offence is less than the fraud offences and that the sentencing of the applicant was overly complicated by the use of this offence, especially as it overlapped to an extent with the fraud offences. It is further submitted that the sentence imposed is out of proportion with the penalty imposed for the other offences. 27 This was an unusual use of a money laundering offence. To the extent that there was an overlap with the fraud offences the charge represented the use of the funds that had been dishonestly obtained under those offences. The criminality was very much in the obtaining of the funds not in their use. It is somewhat analogous to a robber being sentenced for both the robbery and being in possession of the stolen goods. But in the present case, according to the maximum penalties prescribed, the money laundering offence was more serious than the frauds by which the money was obtained. Further the money laundering charge was used to punish the applicant for his criminality arising from his partner’s fraudulent conduct. As was noted earlier, there is no concept of a joint criminal enterprise under the Code, so the applicant could not be charged with his partner’s fraudulent activity even though it was common activity of them both. 28 If the applicant could have been charged with all of the frauds committed jointly by his partner and him, he would have faced 26 charges under s 134.2(1), each carrying a maximum penalty of 10 years and with a total sum obtained by the frauds of $295,201.45. That was in effect the criminality of the frauds perpetrated by the partnership. He would also have faced sentence for the attempt offence of $17,323. 29 However he was sentenced for the 11 fraud offences totalling $114,586.92, the attempt offence of $17,323 and the money laundering offence of $103,512.50. The latter offence carried a maximum penalty of 20 years imprisonment. There is merit in the applicant’s complaint that the nature of the charges overcomplicated the sentencing process, but this was due to what appears to be a deficiency in the Criminal Code and not as a result of inappropriate conduct or over-charging by the prosecutor. 30 In sentencing for the money laundering offence the Judge referred to a number of decisions of this Court including Ansari v R [2007] NSWCCA 204; 70 NSWLR 89 and R v Huang and Sui [2007] NSWCCA 259; 174 A Crim R 370. But those cases involved money laundering of a completely different character to that involved in the offence before his Honour. Ansari concerned persons who were intimately involved in dealing with money that was the result of some other person’s criminal activity so as to hide its source. That is money laundering in the true sense of that term and clearly the type of activity that the legislature had in mind in creating the offence. Similarly Huang and Sui were involved in money laundering as it is generally understood but at a lower level of criminality than in Ansari. They were involved in taking sums of money at the behest of another and depositing it in various accounts under false names to hide the source of the funds. 31 But here the applicant was merely transferring the money obtained by the fraudulent claims from the company accounts to his personal account or drawing it from an ATM so that he could use it to gamble. He was doing nothing to hide the source or to change the nature of the funds. He was simply gaining access to them. The activity came within the scope of the offence under s 400.4, because the offence is so widely drawn. But it was a highly technical version of the offence. 32 There is nothing in his Honour’s remarks that acknowledges the unusual use of this offence in this particular case. There was little benefit to be gained from considering the cases his Honour mentioned or the statistics indicating the range of sentences imposed for offences under s 400.4. Yet the Judge summarises the facts in Huang and Sui, remarked upon the relevant subjective factors for each of those offenders and considered what this Court had said about the sentences that ought to have been imposed upon them. Nothing said by this Court in that decision, in Ansari or the other cases to which his Honour referred offered any guidance to the sentencing of the applicant except to indicate that his offending was of a very different character and much less serious. 33 In my opinion his Honour should have treated this as an offence towards the lowest range of the type of offending covered by the section, even while noting, as he did, that it encompassed a number of transactions over a significant period of time. In the particular circumstances of this case the maximum penalty was not a reliable guide to the seriousness of the conduct involved: see Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [30]. Further, the penalty was based upon the offender dealing with money over the value of $100,000 yet that amount was reached by including a sum of money, whatever it might have been, that overlapped with the fraud offences.”

In Nahlous v R , the Court (McClellan CJ at CL, Howie and Rothman JJ) considered an application for leave to appeal against sentence where the offender had pleaded guilty to six decoder offences contrary to the Copyright Act 1968 (Cth) concerning the sale, or offering to sell, unauthorised decoders. In addition, he pleaded guilty to an offence of dealing in the proceeds of crime under s.400.6(1) Criminal Code Act 1995 (Cth) . The Court said at [10]-[11]: “10 The applicant filed three grounds of appeal. The first was that the sentence for the Code offence was disproportionate to the criminality involved in the offence. The second ground was that in imposing the sentence for the Code offence his Honour failed to apply the principle of totality. The third was that the sentence for the Code offence was manifestly excessive. 11 In effect the complaint by the applicant was that the gravamen of his criminality was in the sale of the decoders not in the receipt of $15,000. It was submitted that the receipt of the money was ‘part and parcel’ of the sale of the decoders. It was noted that his Honour never differentiated the Code offence from the decoder offences except in the sentence imposed and does not explain how his comments, set out in the passage above, can be relevant to the Code offence. It was submitted that the Judge failed to give any reason explaining why the criminality of having $15,000 received from the sale of the decoders was so much more serious than the sale itself so that it could justify a sentence that was over three times longer than the sentence imposed for the sale.”

Soon after, the Court turned to the appropriateness of prosecuting the s.400.6(1) offence, at [13]-[14]: “13 We believe that there is considerable merit in the complaints made by the applicant. However, they do not go far enough. In our view the whole sentencing exercise miscarried principally because the applicant should never have been charged with the Code offence. Had he sought to have that charge permanently stayed as an abuse of process we cannot see how the application could have been refused. 14 In Thorn v R [2009] NSWCCA 294 this Court raised concerns about the use of the section in the circumstances of a person who was engaged in taxation fraud. As well as being charged with the actual fraudulent conduct, he was also charged with an offence involving dealing with the money obtained by the frauds. In that case the activity was merely accessing the funds that he had derived from the frauds. The sentencing judge in that case failed to appreciate the nature of the criminal activity involved in what was called ‘the money laundering offence’ and sentenced the applicant to an excessive sentence for that offence. As in the case now before the Court, the offence to a certain extent concerned the profits of the applicant’s own criminality and resulted in a miscarriage of justice. However, unlike the present case, there was some justification for the money laundering offence because it captured criminality of the applicant’s co-offender, who had never been charged and yet was involved in a joint criminal enterprise with the applicant.”

The Court then quoted from the judgment of Howie J in Thorn v R at [27] (set out above), and continued at [16]-[21]: “16 In the present case we can see no justification whatever for the applicant being charged with the Code offence. In relation to the 50 decoders the criminality was in the sale as a result of which the owners of the services were deprived of their financial entitlement to rental charges for their use. The concept of a ‘sale’ necessarily involves the seller obtaining some financial gain from the transaction. The receipt of the money was merely an element of the offence under s 135ASB(1). 17 We appreciate that a person can by the one act commit two offences and, where the two offences address different aspects of the criminal conduct, there is nothing wrong with prosecuting the two offences or, subject to the principle of totality, with imposing separate sentences for the two offences. But in our view the receipt of the money as a result of the sale did not result in a separate act of criminality that warranted a separate charge and a separate penalty. We do not believe that there is anything in Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 that conflicts with the view that we have taken as to the inappropriateness of the prosecution of the Code offence as well as the decoder offence; see particularly at [31]. We believe that in the circumstances of this case it was oppressive to charge the applicant with both the sale of the decoders and the receipt of the money as a result of the sale. That is because in our view the offence of sale encompassed the criminality of possessing the proceeds of the sale. 18 The Crown at the hearing of the appeal sought to argue that the two offences were aimed at different policies. The Code offence was intended to punish the possession of the proceeds of crime however they are obtained and the fact that the proceeds of the crime were in the public domain and could be dealt with or passed on to others. We accept that this may be a justification for the prosecution of such an offence particularly where the source of the funds is unknown, or where the proceeds were derived from the criminal act of another person or where the person is in some way dealing with the proceeds in order to hide their source or change the nature of the proceeds. But we cannot believe that it was the intention of Parliament that the offence should extend to the facts of the present case notwithstanding the width of the offence under the Code. 19 It is in our opinion not irrelevant that the Code offence carries twice the maximum penalty prescribed for the sale offence, which on any view was the principal act of criminality. It was never the intention of the investigators that the applicant should keep the money he obtained from the sale. If the police officer intended at the time of handing over the money also to charge the applicant with an offence relating to the possession of the money, it was a clear case of entrapment. The applicant could have been arrested before the money was handed over and charged with an offence under s 135ASC(1) of offering to sell the 50 decoders. The maximum penalties for the offence of offering to sell a decoder and the offence of selling a decoder are the same. We do not see in the circumstances of this case how the actual payment of the $15,000 to the applicant impacted upon his criminality in offering to sell the decoders to the undercover police officer. We can see no forensic purpose in handing over the money other than to secure evidence of the sale. 20 The Crown pointed out that, because of the way the sentences were structured, the penalty imposed for the offence of selling the 50 decoders was manifestly inadequate and it was only the sentence for the Code offence that allowed the overall sentence to reflect the applicant’s criminality. This is correct, but it was a combination of both the inappropriate use of the Code offence by the Crown, on the one hand, and the way that his Honour structured the sentences, on the other. His Honour failed to understand that the Code offence was not the principal offence despite its higher maximum penalty. The same error was made in Thorn . 21 In our opinion the only way to deal with the Code offence in the absence of any appeal against conviction was to dismiss the offence under s 19B(1)(c) of the Crimes Act. It was in the circumstances of the particular facts of this matter of a trivial nature and we were of the opinion that it was inexpedient to inflict any punishment on the offender. Although this means that the punishment inflicted upon the applicant for the decoder offences is inadequate, that is to a large part the fault of the Crown.”

In R v Jones; R v Hili , Rothman J (McClellan CJ at CL and Howie J agreeing) gave judgment in Crown appeals where the offenders had pleaded guilty to offences of dishonestly obtaining a financial advantage under s.134.2(1) and dealing with money intending that it would become an instrument of crime contrary to s.400.4(1) Criminal Code Act 1995 (Cth) . As mentioned at [92] above, the offences arose from a Vanuatu based round-robin scheme that operated to enable its participants to evade company and personal tax in Australia by monies being paid out of the trading companies by telegraphic transfer into the bank accounts of entities in New Zealand. Rothman J observed, at [7], that neither of the offenders devised or organised the illegal scheme and that, if they had been involved in devising or organising the scheme, more serious offences would apply. His Honour stated that the offenders were “participants whose sole purpose was taking money to which they were not available” .

Rothman J referred to the money laundering offence at [17]-[18]: “17 I have included under the heading of ‘revenue offences’ the contravention of s 400.4 of the Code. This is a money-laundering offence. On one view, the correct view, none of the offences to which the Respondents pleaded were ‘revenue offences’. The other breach of the Code involves dishonestly obtaining a financial advantage by deception and the breach of the Act requires a defrauding of the Commonwealth. In the latter, there is a requirement for the Commonwealth to have been deprived dishonestly of valuable assets, including money. In the case of the former, as the short description of the offence indicates, it requires each of the Respondents obtaining a financial advantage by deception. It is impossible to imagine how either one of these offences could be committed (particularly given the facts in this case) without necessarily giving rise to facts that would amount to a consequential breach of the money-laundering offence. It is not suggested that some additional criminal act was to be performed with the money received at the end of the ‘round robin’. 18 This matter was not raised by the Respondents in this Court or in sentencing in the District Court, but there are serious issues relating to double jeopardy in charging the money-laundering offence over and above the criminal offence from which the money was necessarily derived: Nahlous v R [2010] NSWCCA 58 at [13]-[17]; Thorn v R [2009] NSWCCA 294. Given the absence of an appeal from either one of the Respondents, there is little avenue to correct this issue. In a practical sense, because of the total concurrence of each of the sentences imposed, no greater period of imprisonment has been, or is to be, suffered as a consequence. But there are serious issues of principle involved in such a course. However, given the absence of any challenge to this charge and its lack of practical impact the Court should not intervene.“

In Schembri v R [2010] NSWCCA 149, the Court (Beazley JA, Kirby J and myself) considered an application for leave to appeal by an offender convicted of several counts of obtaining a financial advantage by deception under s.134.2(1), and one count of dealing with the proceeds of crime under s.400.4(1) Criminal Code Act 1995 (Cth) . A partly cumulative sentence had been imposed on the money laundering count. On appeal, the Crown conceded that the sentence for the money laundering offence ought be wholly concurrent with the sentences for other offences. The Court observed at [11]-[16]: “11 Count 17 charged the applicant with a money laundering offence which arose out of the same facts as the other offences with which she was charged. There have been at least three cases before the Court in the last year where the Court has criticised the prosecution practice of charging offenders in this way. To the credit of the Crown Prosecutor in this case, he brought those cases to our attention and made the concession to which we have referred. 12 The problem was adverted to in Thorn v R [2009] NSWCCA 294, when Howie J pointed out that money laundering offences were intended by the legislature to be directed at activity where persons were intimately involved in dealing in money that was the result of some other person’s criminal activity, so as to hide its source. 13 Shortly after Thorn , this Court delivered its decision in Nahlous v R [2010] NSWCCA 58. In that case, the applicant had pleaded guilty in the Local Court to six offences contrary to the provisions of the Copyright Act 1968 (Cth) (the decoder offences) concerning the sale of, or offering to sell, unauthorised decoders. The relevant provisions of that Act were ss 135ASB(1) and 135ASC(1). The applicant also pleaded guilty to an offence contrary to the Criminal Code Act, s 400.6(1). That section is concerned with dealing in the proceeds of crime. The decoder offences each carried a maximum penalty of imprisonment for 5 years. The offence of dealing in the proceeds of crime carried a maximum penalty of imprisonment for 10 years. The applicant, on a plea of guilty, was sentenced to various terms of imprisonment of 3 to 6 years, to be served by way of periodic detention, on the copyright offences. Relevantly for present purposes, however, on the money laundering offence, he was sentenced to 20 months imprisonment. 14 The Court (McClellan CJ at CL, Howie and Rothman JJ) referred first to Thorn and noted, at [14], that there was a basis in that case for the money laundering charge: ‘… because it captured criminality of the applicant’s co-offender, who had never been charged and yet was involved in a joint criminal enterprise with the applicant.’ 15 The Court then stated, importantly, at [17]: ‘We appreciate that a person can by the one act commit two offences and, where the two offences address different aspects of the criminal conduct, there is nothing wrong with prosecuting the two offences or, subject to the principle of totality, with imposing separate sentences for the two offences. But in our view the receipt of the money as a result of the sale did not result in a separate act of criminality that warranted a separate charge and a separate penalty.’ 16 Those remarks apply in this case to count 17. However, it is important to re-emphasise this Court’s disapproval of such prosecutorial action. The Crown Prosecutor informed the Court that he has brought this issue to the attention of the Commonwealth Director of Public Prosecutions. We note that the charges in this case were laid and the trial conducted and sentences passed well before the decisions to which we have referred were given. Nonetheless, the matter is of such importance that we consider a copy of these remarks should be brought to the attention of the Commonwealth Director of Public Prosecutions.”

In a recent decision of the Court, Kinchela v R [2010] NSWCCA 167, a double punishment ground of appeal was advanced based on Pearce v The Queen with reliance being placed upon Thorn v R , Nahlous v R and Schembri v R . Kinchela v R did not involve money laundering offences. The statements of principle in the money laundering cases were sought to be called in aid, without success, in the context of sentencing for stealing, break enter and steal and robbery offences. Should the Present Indictment be Stayed as an Abuse of Process ?

When provisions such as the money laundering offences contained in s.400 Criminal Code Act 1995 (Cth) are enacted, it is clear that care must be exercised by a prosecutor in their use. As the authorities to which I have referred make clear, the money laundering provisions are broad with a capacity to extend to a wide range of circumstances. By their nature, they are likely to be intertwined with other criminal conduct.

By the enactment of these provisions, the Commonwealth has determined that criminal offences of this type are necessary to deal with a wide range of conduct which has manifested itself in contemporary society, with consequences adverse to the public interest including the revenue.

A legislative response of this type is not unprecedented in contemporary Australia. By way of example, at a State level, it has been recognised that the traditional offences of stealing and receiving did not cover all relevant areas of criminality emerging from the relatively recent phenomenon of car and vessel rebirthing. The legislative response in New South Wales was the enactment in 2006 of s.154G Crimes Act 1900 , a provision extending to a wide range of circumstances.

At a Commonwealth level, the money laundering offences in s.400 constitute a 21 st century response to antisocial and criminal conduct, commonly with international elements.

The decisions of the Court of Criminal Appeal in Thorn v R , Nahlous v R , R v Jones; R v Hili and Schembri v R constitute strong reminders by the Court of Criminal Appeal to prosecutors that the money laundering offences in s.400 are to be used in a measured way. An assessment is required, in the circumstances of each particular case, as to whether a money laundering charge ought be brought, or a combination of charges including a money laundering offence and other offences.

The very breadth of conduct capable of being accommodated by the money laundering offences means that a strict rule cannot be expressed sensibly to promote the proper exercise of prosecutorial discretion in each case.

As the cases referred to at [105] to [123] above make clear, the courts should pay due respect to the exercise of prosecutorial discretion concerning charge selection. This approach flows from the separation of powers between the executive and judicial arms of government, as well as the public interest in the prosecution of serious offences, selected by the prosecution agency, which a trial court will proceed to determine on their merits.

Considerations of this type underscore the exceptional nature of the remedy of a permanent stay for an abuse of process, where a court will intervene to prevent a particular prosecution going ahead on the charges selected by the prosecutor.

The various circumstances considered by the Court of Criminal Appeal which attracted strong criticism of charging practices were, in my view, significantly different from the circumstances of the present case. In particular, I consider that R v Jones; R v Hili is distinguishable in significant respects. Neither of the offenders in that case were involved in devising or organising the scheme. Here, the Crown alleges that the Accused was at the centre of the creation of the scheme, in the form of the Stichting Group.

I accept the submissions of the Crown that there are significant additional features with respect to the areas of alleged criminality lying within the first and second counts. With respect to the money laundering charge, the alleged conduct of the Accused with respect to the Stichting Group is an elaborate additional feature. With respect to the dishonest obtaining charge, I accept the Crown submission that there was effectively a second phase of conduct, commencing with alleged communications between the Accused and his accountants which culminated in the lodging of the allegedly false return.

I do not consider that the shipping container analogy advanced by the Accused is apt. Rather, a protracted and elaborate course of conduct by the Accused is alleged by the Crown, with him being the prime mover in establishing the Stichting Group, and thereafter acting in the manner alleged by the Crown.

The Crown case involves an alleged course of conduct extending over several years. It is also correct that the evidence which the Crown seeks to rely upon with respect to the first count appears to be admissible on the second count, and vice-a-versa. Those considerations, however, do not give rise to an abuse of process applying the principles in Pearce v The Queen.

In an exceptional case, as I have said, the Court may utilise the permanent stay power. To obtain a stay, the Accused must demonstrate that the prosecution of both charges is an abuse of process. To prevent the prosecution going ahead, the Accused must demonstrate that the prosecution of both charges together is oppressive. If there was no remnant of alleged criminality which could be identified at this time, in advance of trial, then the Accused may be entitled to a stay. This is a demanding task for an accused person. The Accused has not made good this submission in this case.

If the Accused is convicted on both counts, it will be necessary for the Court, in accordance with the principles in Pearce v The Queen and the Victorian authorities referred to above, to determine an appropriate sentence on each count without double punishment of the Accused, and then to consider issues of concurrency, cumulation and totality. This constitutes the law’s response to circumstances where possible injustice may result from double punishment for separate offences which have overlapping factual aspects. In my view, the issues agitated by the Accused on this application may be accommodated at the sentencing phase in the event that the Accused is convicted on both counts. At this point in time, on the Crown case, there appear to be significant “remnants of criminality” in the money laundering offence which would need to be considered in the event that the Accused is to be sentenced on both counts. I emphasise that I have reached this conclusion by reference to the charges and the facts and circumstances alleged by the Crown. I am not purporting to make a finding of criminality against the Accused. Rather, the application requires the Court to consider whether there is an apparent remnant of criminality as alleged in the money laundering charge which cannot be accommodated properly on sentence, if that stage is reached, for the dishonest obtaining charge.

The onus lies upon the Accused to establish a foundation for the exceptional remedy which he seeks, in the form of a permanent stay upon the prosecution of the indictment containing the two counts. In my view, the Accused has not made out a case for a permanent stay on the indictment.

I should observe that, if I had reached a different view on the permanent stay application, I would not have, in effect, required the Crown to proceed on an indictment containing the second count only. In my view, if a finding had been made that the prosecution of an indictment containing the two counts constituted an abuse of process so that a stay ought be granted on that indictment, the consequence would have been that the Crown would be required to elect upon which of the two counts it wished to proceed. I do not consider that submissions based upon an analogy with Hoar v The Queen would lead to a conclusion that the Crown ought be stopped from prosecuting the money laundering count. However, given the view which I have formed on the application, this issue does not arise.

I decline to make an order as sought in paragraph 1 of the Further Amended Notice of Motion. Challenge to the Admissibility of the Evidence of Shaun Mark

Objection is taken by the Accused to the tender at trial of the report prepared by Shaun Evan Mark dated 3 June 2010 (Exhibit PTB). The Crown has indicated an intention to tender the report at the jury trial of the Accused (T31, 29 July 2010 ).

In broad terms, the objection to the tender of the report is based upon the following grounds: (a) Mr Mark does not have specialised knowledge based on training, study or experience so as to permit expert opinion evidence to be given by him: s.79 Evidence Act 1995 ; (b) even if Mr Mark could give admissible expert opinion evidence, the Crown ought not be allowed to tender his report in evidence before the jury; (c) even if Mr Mark’s report was prima facie admissible, there are specific objections to parts of its contents so that the report in its present form ought not be admitted.

At the outset, it is appropriate to observe that the admissibility of evidence from Mr Mark, including his report, has been argued at the pretrial hearing by reference only to the report itself and the range of documents otherwise tendered at the pretrial hearing, including the CCS and a number of documents obtained as a result of requests under the Mutual Assistance in Criminal Matters Act 1987 (Cth) , which are sought to be tendered by the Crown under the Foreign Evidence Act 1994 (Cth) . My ruling with respect to these objections will, of course, be responsive to the submissions made by reference solely to these documentary materials. Mr Mark’s Knowledge and Experience

The qualifications and experience of Mr Mark are set out in Appendix 1 to his report (Exhibit PTB, pages 110-112). Mr Mark holds the degree of Bachelor of Commerce (Accounting) and a Graduate Diploma in Applied Finance and Investment. He is a certified practising accountant. He is undertaking studies at Monash University for the purpose of a Graduate Certificate in Forensic Studies (Accounting). Since March 1999, Mr Mark has been employed as a specialist financial analyst with the AFP. Before then, he worked as an Assistant Manager Commercial Finance with Howard Finance Limited (between 1994 and 1998) and as a Manager Factoring with the Commonwealth Bank of Australia Limited (1998-1999).

Mr Mark is employed within the Economic and Special Operation portfolio of the AFP. He has prepared expert witness statements of a financial nature, and given advice in relation to complex financial matters and has presented evidence as a financial specialist in the Supreme Court of the Australian Capital Territory. He has conducted money laundering, terrorism finance, proceeds of crime and financial investigations, including the tracing of monies and assets identifying the effective control of assets for the purpose of proceeds of crime action and financial investigation. He has conducted international multi-jurisdictional money laundering and terrorism finance investigations, and was the financial analyst conducting the financial investigation into the 2002 Bali bombings with the Indonesian National Police. As part of his role with the AFP, Mr Mark has conducted mutual evaluations of the Philippines and Brunei assessing their compliance with the Financial Action Task Force 40+9 recommendations (“FATF”). The recommendations issued by FATF define the criminal justice and regulatory, including banking, measures that should be implemented to counter money laundering and terrorism finance. Mr Mark’s Draft Report

The evidence suggests that Mr Mark was not involved in the investigation of the Accused by the AFP, but was requested by the Commonwealth Director of Public Prosecutions on 27 October 2009 to undertake a review and analysis of documents. Initially, Mr Mark was provided with 13 folders of documents which were supplemented, in March 2010, by an additional seven folders of documents. It appears that Mr Mark provided a report dated 7 January 2010 which has been amended in the present draft report dated 3 June 2010.

A general description of Mr Mark’s report is appropriate. The document is described as a “draft report” to the Commonwealth Director of Public Prosecutions to “provide an independent expert report for the purpose of assessing the transfer of funds leading to funds in the bank accounts of Michael Milne and Barat Advisory Pty Limited and the effective control of the assets held by the companies owned by the Stichtings” (Exhibit PTB, page 1).

The report contains an executive summary (pages 5-8). At the beginning of the executive summary, Mr Mark explained how and when he was retained to provide a report to the prosecution. He said that, due to the applicable time frames, he had conducted the analysis of the Barat Advisory and Milne accounts identifying significant transactions, being those greater than $50,000.00 (paragraph 1.0).

Mr Mark refers to his qualifications and experience (paragraph 2.0 and Appendix 1) and a statement of the information provided to him including his letter of instruction (paragraph 3.0, Annexures 1 and 2, Appendix 2). He recites the duties of an expert witness (paragraph 4.0) and acknowledges that he has read, understood and adhered to the Expert Witness Code of Conduct as set out in Schedule 7 of the Uniform Civil Procedure Rules 2005 (“UCPR”) (paragraph 5.0).

Mr Mark acknowledges that he has read, understood and adhered to the obligations as set out in Accounting Professional and Ethical Standards 215 (paragraph 6.0).

Mr Mark described the background to the report and the structure of its contents in the following way (page 9, paragraph 7.1-7.5): “7.1 You have instructed me to analyse the folders of documents provided by you to trace the transactions and monies leading to the deposit of funds into the bank accounts of Barat and Milne. 7.2 You have also instructed me to provide an opinion concerning: • Whether the documentation shows Milne controlled the disposal of shares in Admerex; • Whether the documentation shows Milne controlled the distribution of the proceeds of the disposal of the shares in Admerex; • Whether the documentation shows Milne used the proceeds of the disposal of the shares in Admerex for personal purposes; and • Whether the documentation allows me to distinguish between payments made with funds arising from the disposal of the Admerex shares, or whether the payments were made with funds from other sources. 7.3 In order to provide the findings and opinions sought I have carried out an analysis of the documents provided. I have broken the analysis down into eight issues, or groups of related transactions. Each of these issues will be examined in turn. 7.3.1 Barat Advisory Pty Ltd obtains a shareholding in Admerex Limited. 7.3.2 The Creation of the 5 stichtings and 5 companies (the Stichting Group). 7.3.3 Transfer of the Admerex Shares to the Stichting Group EFG bank accounts. 7.3.4 Opening of Swissfirst Bank AG account 6009 in the name of Admerex (Ireland) Limited and transfer of funds and shares from account 6009. 7.3.5 Swap of Admerex shares for the Temenos Group shares. 7.3.6 Opening of Swissfirst Bank AG account 6048 in the name of Challinor Equities Limited and transfer of shares and funds from account 6048. 7.3.7 Barat Advisory Pty Ltd bank accounts. 7.3.8 Michael Milne bank accounts and facilities. 7.4 I have included, as Appendix 3, 4, 5, 6, 7 and 8, a diagrammatical representation of each of the issues. Issues 5 and 6 and Issues 7 and 8 have been combined into 2 diagrammatical representations. 7.5 I have combined the eight issues into one diagrammatical representation and attached this representation as Annexure 5.”

Mr Mark noted that he had been provided with 20 folders of documents and that he reserved the right to change or alter his opinions or findings if further documents became available that would alter those findings and opinions (page 10, paragraph 8.0).

What follows in the report is a recital concerning eight issues, being the topics referred to at paragraph 7.3.1 to 7.3.8 of the report (see [188] above). The issues are described in the following way: Issue 1 - Barat Advisory obtains a shareholding in Admerex (pages 10-11, paragraphs 9.1-9.14). Issue 2 - The creation of the five Stichtings and five companies (the Stichting Group) (pages 11-17, paragraphs 10.1-10.15). Issue 3 - Transfer of Admerex shares to the Stichting Group EFG accounts (pages 17-56, paragraphs 11.1-18.12), with Issue 3 being divided into a number of sub-issues as follows: - Issue 3.1: Opening of EFG accounts in the name of Thouvanel, Metevier, Schlossman, Challinor and Vaillendourf (page 21). - Issue 3.2: Thouvanel Investments Account [XXX] (pages 21-25). - Issue 3.3: Metevier Securities Account [XXX] (pages 25-28). - Issue 3.4: Schlossman Partners Account [XXX] (pages 28-31). - Issue 3.5: Challinor Equities Account [XXX] (pages 31-52). - Issue 3.6: Vaillendourf Europe Account [XXX] (pages 52-55). - Issue 3.7: Summary of the EFG accounts (pages 55-56). Issue 4: Opening of SwissFirst Bank AG Account 6009 in the name of Admerex (Ireland) Limited and transfer of funds of and shares from Account 6009 (pages 57-60). Issue 5: Swap of Admerex shares for the Temenos shares (pages 60-61). Issue 6: Opening of SwissFirst Bank Account 6048 in the name of Challinor Equities and transfer of shares and funds from Account 6048 (pages 62-65). Issue 7: Barat Advisory bank accounts (pages 65-80), including a number of sub-issues as follows: - Issue 7.1: Deposit and withdrawal of funds CBA Account [XXX] (pages 65-79). - Issue 7.2: Deposit and withdrawal of funds STG Account [XXX] (pages 79-80). Issue 8: Michael Milne bank accounts and facilities (pages 80-93), including the following sub-issues: - Issue 8.1: Account [XXX] (pages 80-87). - Issue 8.2: Account [XXX] (pages 87-92). - Issue 8.3: Account [XXX] (page 92). - Issue 8.4: Account [XXX] (page 92). - Issue 8.5: Commercial Bill in the amount of $695,000.00 (page 92). - Issue 8.6: Commercial Bill in the amount of $4 million (page 93).

Mr Mark’s report then moves to the expression of opinions (pages 93-108). The opinions are expressed in response to the letter of instruction dated 27 October 2009 to Mr Mark. He expresses opinions under the following headings: (i) the extent to which the documentation shows that Milne controlled the disposal of the shares in Admerex (pages 93-98); (ii) the extent that the documentation shows that Milne controlled the distribution of the proceeds of the disposal of the shares in Admerex (pages 98-99); (iii) the extent, if any, to which the documentation shows Milne used the proceeds of the disposal of the shares in Admerex for personal purposes (pages 99-101); (iv) the proceeds of the disposal of the shares in Admerex appear to pass through several accounts. Some of those accounts also received funds from other sources. In those circumstances to what extent, if any, does the documentation allow us to distinguish between payments made with the funds arising from the disposal of the shares, and payments made with funds from other sources (pages 101-108).

By way of example, Mr Mark’s opinions include the opinion that the Accused controlled the disposal of the Admerex shares from Barat Advisory to Thouvanel, Metevier, Schlossman, Challinor and Vaillendourf (paragraph 32.19) and that the Accused “exercised control in relation to what the companies could do with the Admerex shares” (paragraph 32.26). For reasons which he gave, Mr Mark opined that the Accused “maintained an effective control over the Admerex shares” (paragraph 32.36). Mr Mark traces monies through to bank accounts and links the monies to transactions, including the purchase of real estate, a luxury motor vehicle, a yacht, jewellery and art works (paragraphs 32.49-32.57).

Mr Mark closes his report with a declaration that he has made all the enquiries that he believes are desirable and appropriate and that no matters of significance that he regards as relevant have, to his knowledge, been withheld from the Court (page 109, paragraph 34.1).

The appendices to the report include the diagrammatical representations, in the form of flow charts, with respect to each of the eight issues as mentioned at paragraph 7.4 of the report together with the combined diagrammatical representation referred to at paragraph 7.5 of the report. Submissions Concerning Admissibility of Mr Mark’s Report Submissions of the Accused

Mr Wigney SC submitted that the paragraphs in the report up to and including paragraph 31.2 (pages 1 to 93) comprise no more than factual assertions, conclusions or inferences of fact, the precise bases or sources of which are not specified, other than a global reference to 20 volumes of documentation provided to Mr Mark by the Crown. If the sources of the factual assertions, conclusions or inferences in the paragraphs up to 31.2 are documents contained within the 20 volumes, the Accused submitted that the paragraphs do no more than give secondary evidence or purported summaries or conclusions about the contents of documents which are inadmissible by reason of s.48, s.59 and s.76 Evidence Act 1995 , or should be excluded by reason of s.135 or s.137 Evidence Act 1995 .

If there are sources of the assertions, conclusions or inferences in these paragraphs other than the 20 volumes of documents, the Accused submitted that they are hearsay assertions inadmissible by reason of s.59 and s.76 Evidence Act 1995 or liable to exclusion under s.135 or s.137 of that Act.

Mr Wigney SC submitted that these paragraphs of the report are not opinions based wholly or substantially on specialised knowledge of Mr Mark based on his training, study or experience, and are therefore not excluded from the operation of s.76 by s.79 Evidence Act 1995 . If these paragraphs are, or purport to be, opinions of Mr Mark about the content or effect or substance of documents based on some specialised knowledge possessed by Mr Mark, the Accused submits that the opinions are inadmissible or should be excluded under s.135 or s.137, because Mr Mark does not properly distinguish between the opinions and the facts upon which they are based, and does not set out his reasoning for each of the opinions: Makita (Australia) Pty Limited v Sprowles [2001] NSWCA 305; 55 NSWLR 705 ( “Makita” ); Australian Securities and Investment Commission v Rich [2005] NSWCA 152; 218 ALR 764 ( “ASIC v Rich” ).

In relation to the opinions expressed in paragraphs 31.1-32.26 (pages 92-98) concerning “effective control” , Mr Wigney SC submitted that these opinions are not admissible under s.79, or should be excluded under s.135 or s.137 because: (a) the question whether the Accused “controlled” either the disposal of the shares of Admerex or the proceeds thereof, is not relevant to the charges in the indictment, particularly having regard to the legal definition of “effective control” that Mr Mark adopts (s.337 Proceeds of Crime Act 2002 (Cth) ), erroneously according to the Accused; (b) if it is relevant, it is simply an inference of fact that may or may not be drawn from the evidence ultimately tendered at trial and is not a matter for expert opinion evidence; (c) Mr Mark is not, in any event, appropriately qualified to express an opinion about this matter, and his opinions are not based wholly or substantially on any specialised knowledge that he possesses; (d) in relation to these opinions, Mr Mark does not properly distinguish between the opinions and the facts upon which they are based, and he does not adequately set out his reasoning for each of the opinions as required by Makita and ASIC v Rich .

With respect to the opinions in paragraphs 32.34 to 32.47 and 32.48 to 32.57 (pages 99-108) concerning the flow of funds from various bank accounts, the Accused submits that: (a) with some limited exceptions, the use to which funds in the Accused’s bank account and the bank accounts of Barat Advisory, is not relevant to the charges in the indictment; (b) if these matters are relevant, they are simply an inference of fact, and may or may not be drawn from the evidence ultimately tendered at trial and are not a matter for expert opinion evidence; (c) in relation to these opinions, Mr Mark does not properly distinguish between the opinions and the facts upon which they are based and does not adequately set out his reasoning for each of the opinions as required by Makita and ASIC v Rich .

In relation to the report generally, the Accused submits that the report and any evidence contained in it (if led orally) ought be excluded under s.135 or s.137 for the following reasons: (a) the assertions, inferences, conclusions or opinions, both final and intermediate, contained in the report purport to be based on the contents of 20 lever-arch folders provided to Mr Mark, however, he frequently makes no effort to link his assertions, inferences, conclusions or opinions to specific documents and, in most cases, it is not possible to determine which documents he has had regard to in expressing the assertion, inference, conclusion or opinion; (b) the 20 lever-arch folders contain documents that the Crown does not intend to tender or rely on at trial (as identified in the CCS), as well as documents subject to objection; (c) though the report is expressed to be an “independent” expert report, Mr Mark is employed by the AFP, the organisation that investigated and brought the charges against the Accused, and it is unclear to what extent Mr Mark has been involved in the investigation phase: ASIC v Rich ; (d) the Crown has refused or failed to disclose documents and information which has been requested in relation to the preparation of the report as it is plainly obliged to do; (e) the Accused has been unfairly prejudice by late service of the report, which even now is described as a draft, even when regard is had to the fact that a previous version of the report was earlier served: Haoui v R [2008] NSWCCA 209; 188 A Crim R 331.

Mr Wigney SC submitted that pages 1-93 of the report could be described as undifferentiated combinations of speculation, summary description of facts, opinion, hearsay, unsourced assertion and sweeping generalisation: Harrington-Smith v State of Western Australia (No. 7) (1993) 130 FCR 424 at 430. He submitted that the report is largely a discursive body of the views of someone who understands enough of litigation to put forward an argumentative case, but that there are few accounting opinions displayed: Evans Deacon Pty Limited v Sebel Furniture Limited [2003] FCA 171 at [676]. He submitted that the report contains a discursive narrative concerning documents contained within 20 lever-arched folders, with those documents including witness statements and documents obtained from a variety of sources. He submitted that the assertions, inferences or conclusions are contentious because, at best, they constitute an incomplete, inaccurate or misleading summary of the content of documents.

Mr Wigney SC submitted that s.48 Evidence Act 1995 provides the means by which a party may adduce evidence of the contents of a document, but it does not permit a party to call a witness to summarise the contents or effect of the document. The manner in which this evidence will be sought to be adduced constitutes hearsay, and inadmissible evidence, by reason of s.59 Evidence Act 1995 . It is said that the assertions, inferences and conclusions in pages 1-93 are not linked or related to, directly or indirectly, the purported opinions that Mr Mark expresses at pages 93-109.

A variety of objections were taken and submissions made on behalf of the Accused with respect to the admissibility of Mr Mark’s report. Mr Wigney SC sought to encapsulate these submissions in a series of points during his oral address (T32-33, 29 July 2010): (a) the questions posed to Mr Mark, and upon which he has expressed opinions, does not concern any relevant facts in the trial; (b) there is no field of specialised knowledge that would entitle a person to express an opinion about the control that another person may or may not have over the disposal of shares - it is not a matter for expert evidence; (c) if there was such a field of specialised knowledge relating to the control of assets, there is no identified aspect of that field in which Mr Mark has demonstrated that he is an expert, that is, that he has specialised knowledge - the fact that he is an accountant does not qualify him to express an opinion in relation to some field of specialised knowledge relating to control; (d) the opinions expressed by Mr Mark in the report are not shown to be based on any specialised knowledge that he supposedly has as an accountant - when analysed, they are based only on inferences or conclusions that Mr Mark has drawn from documents, or conclusions or opinions that he has formed about documents - he is essentially usurping the role of the jury in relation to conclusions that can or cannot be drawn from documents that will be before the jury; (e) the report does not demonstrate or reveal a scientific or other intellectual basis of the opinions - it does not demonstrate how Mr Mark’s supposed specialised knowledge is applied to the facts that produced the opinions he expresses; (f) aside from the question of “effective control” , to the extent that Mr Mark seeks to opine on the extent to which the documents reveal that the Accused used the proceeds of the disposal of the Admerex shares for personal purposes, all that Mr Mark is doing is to trace funds from one bank account to another - this is not a matter properly for expert opinion; (g) other submissions were made concerning the late service of the report, what was said to be the disorganised nature of the contents of the 20 volumes of documents and other matters concerning disclosure, however, Mr Wigney SC acknowledged that these matters may be of less significance at the present time given the Court’s decision, on a defence application, to adjourn the trial from 9 August 2010 to 18 October 2010.

Mr Wigney SC submitted that Mr Mark’s report fell within s.177 Evidence Act 1995 as a certificate of expert evidence, so that the report was not, in any event, admissible as evidence if (as here) the Accused had required the Crown to call Mr Mark to give evidence for the purposes of s.177(5) and (6) of that Act. The Crown Submissions

The Crown submitted that the documents provided to and relied upon by Mr Mark were readily identifiable, with additional light being shed upon these matters by the schedules contained within Exhibit PT1. It was submitted that the content of the report from pages 1 to 93 set out the facts in the documents and witness statements provided to him. If it was said that there was any omission or inaccuracy in this respect, then Mr Mark could be cross-examined on these matters, which bore upon the use to be made of the report and not its admissibility.

With respect to Mr Mark’s use of the concept of “effective control” from s.337 Proceeds of Crime Act 2002 (Cth) , the Crown submitted that the extent to which the evidentiary material revealed that the Accused controlled the disposal of Admerex shares, and the distribution of the proceeds of that disposal, was significant. The issue of beneficial ownership of the shares was relevant to the question of liability to capital gains tax, and the control of the Accused over the shares and the proceeds from their disposal was relevant as well to the issue of dishonesty. The Crown submitted that Mr Mark had identified his assumed understanding of the concept of effective control, and thus this assumption was contained in the report.

The Crown submitted that the task undertaken by Mr Mark involved the correlation of formal documentation, of details of share trading and tracking funds through various bank accounts. This required his specialised expertise as an accountant and financial analyst to establish the evidentiary trail, particularly in relation to the flow of funds derived from the disposal of the Admerex shares to Barat Advisory and the Accused, in order for Mr Mark to be in a position to express an opinion on the issue.

The Crown submitted that it was relevant to show that the end result was access to funds which the Accused used for his personal benefit, and that the task performed by Mr Mark involved the establishment of the monetary trail leading to the Accused, and this was an appropriate function for a financial analyst.

The Crown submitted that, without the assistance of Mr Mark’s report, the jury will have difficulty in correlating a substantial body of documentary and oral evidence, and that the process of linking the documentation in a way in which the jury can understand will occupy a greater time than that occupied by Mr Mark giving evidence. Reference was made to ASIC v Rich at 797-798 [153]-[155] where it was said that expert evidence from an accountant may assist to comprehend documents that do not speak for themselves.

With respect to the defence submissions concerning Mr Mark’s independence, the Crown submitted that, although employed by the AFP, Mr Mark had been retained and briefed separately by the Commonwealth Director of Public Prosecutions. It was said that at no stage was he involved in the investigation of the Accused.

Finally, the Crown submitted that s.50 Evidence Act 1995 permits the Court to direct that a party may adduce evidence of voluminous or complex documents in the form of a summary. Except for the executive summary and the opinions expressed in section 32.0 of the report, the Crown submitted that Mr Mark’s report was in the form of a summary and, if necessary, leave may be sought to adduce that summary, or parts of it, pursuant to s.50 of the Act.

The Crown submitted that the effect of Part 75 Supreme Court Rules (“SCR”) was that Part 31 UCPR was to be applied in criminal trials in the Supreme Court unless the Court otherwise orders. Thus, the Crown submitted that the report of Mr Mark, unless the Court decided otherwise, should be admitted as an exhibit at the trial, given that Part 31 UCPR lays down such a procedure in civil proceedings. The Crown submitted that s.177 Evidence Act 1995 applied only to certificates and not an expert report and that s.177 had no relevance to this case. Determination of Objection to Admissibility of Mr Mark’s Evidence and Report

The submissions of the parties raise a number of issues which require determination, together with a number of associated questions which cannot be resolved finally in this judgment. What follows represents my conclusions on a number of issues, the resolution of which should guide further pretrial procedures and issues on this topic. Admission of Expert Reports in a Criminal Trial in the Supreme Court

The calling of expert opinion evidence in a criminal trial is governed by statutory provisions bearing upon admissibility (s.79 Evidence Act 1995 ) and provisions affecting procedures for adducing such evidence. I do not consider that s.177 Evidence Act 1995 has application to the tender of Mr Mark’s report. Section 177 provides a means for evidence of a person’s opinion to be adduced by tendering an expert’s certificate, signed by a person which satisfies the requirements of s.177(1), which has been served in accordance with s.177(2), (3) and (4) of the Act. A party served in accordance with the provision may, by written notice served on the opposing party, require that party to call the person who signed the certificate to give evidence: s.177(5). The expert’s certificate is not admissible as evidence if such a requirement is made: s.177(6). The Court may make a costs order as it considers just against a party who has, without reasonable cause, required the other party to call a person to give evidence under the section: s.177(7).

Section 177 is concerned with evidence in the form of an expert’s certificate. As a matter of construction, I consider that a detailed report is not a “certificate” for the purpose of s.177. I agree with the observations of Dowd J in Director of Public Prosecutions (NSW) v Tong [2004] NSWSC 689; 151 A Crim R 296 at 303 [33] that s.177 creates a procedure for the admission of expert evidence in courts which is intended to prevent the unnecessary expensive task of proving relatively routine matters in court proceedings. As Drummond J observed in Joam v Minister for Immigration and Multicultural Affairs (2002) FCA 107 at [14], a “certificate” , in the ordinary meaning of the term, is a writing on paper certifying to the truth of something. I do not think Mr Mark’s report can be regarded appropriately as a certificate.

Section 177 may be regarded as fulfilling a general function which is similar to the use of specific classes of certificate evidence in s.282 Criminal Procedure Act 1986 (medical examinations), s.283 of that Act (law enforcement devices) and s.43 Drug Misuse and Trafficking Act 1985 (analysts’ certificates).

I do not consider that s.177 operates to permit a party to prevent the tender of an expert report merely by requesting the other party to call the author of the report. If the submission of the Accused is correct, this would undermine the expert evidence provisions in civil proceedings under Rule 31 UCPR. This fortifies a conclusion that a “certificate” under s.177 does not extend to an expert report of the type commonly seen in civil proceedings and, at times, in criminal proceedings.

Part 75 Rule 3 SCR provides for specified rules in the UCPR to apply, so far as applicable, to criminal proceedings in the Supreme Court. Part 75 Rule 3(1)(f) includes Rule 31.21 UCPR which states: “Unless the court otherwise orders, an expert witness’s evidence in chief must be given by the tender of one or more expert’s reports.”

Part 75 Rules 3J and 3K SCR make further provision concerning the calling of expert witnesses in criminal proceedings and the holding of a conference between experts.

In Haoui v R , with the concurrence of McCallum J, I observed at 359 [154] that Part 75 SCR imported Rules 31.21 and 31.22 UCPR into criminal proceedings in the Supreme Court.

It is necessary to keep in mind the form of trial, namely trial by jury, where the tribunal of fact is to receive expert evidence to be tendered by a party. In Haoui v R , in a different context, I observed at 360 [158] that the capacity to adjourn proceedings and to adopt flexible procedures is far more limited in a jury trial. Those comments were directed to the very late service, during the course of a jury trial, of a significantly amended expert report of a Crown motor accident expert. However, the identity of the tribunal of fact is pertinent as well, in my view, to an assessment of whether an expert report ought be admitted into evidence at a criminal jury trial, in circumstances where all other aspects concerning admissibility had been satisfied.

The qualifying words in Part 75 Rule 3(1) “so far as applicable” provide for some assessment as to whether the particular provisions should operate, although it has been said that such words ought be given a wide construction: R (Cth) v Petroulias (No. 22) [2007] NSWSC 692; 176 A Crim R 309 at 322-323 [52].

In addition, however, the opening words of Rule 31.21 UCPR provide for the use of an expert witness’ report as evidence-in-chief “unless the court otherwise orders” . In a straightforward criminal trial where the expert has prepared a short report, it might be considered sufficient for the report to be tendered as the witness’ evidence-in-chief. It is the usual practice, however, for Crown prosecutors to adduce oral evidence from expert witnesses in criminal trials. Apart from anything else, this assists the jury to follow the oral evidence of the expert witness as it unfolds, usually in conjunction with documents which may be tendered through the witness or may already be in evidence in the trial.

The more complex the proceedings and the more voluminous the report, the greater the risk that the report may assume inordinate weight in the eyes of the jury. Particular care is required to seek to avoid misleading or confusing content. If an expert report is to be tendered in a criminal jury trial, the court should scrutinise its content to ensure clarity and the avoidance of portions with a capacity to mislead or confuse.

Accordingly, I approach the tender of Mr Mark’s report upon the basis that s.177 Evidence Act 1995 has no application, and that it is open to the Court to admit the report into evidence in accordance with Rule 31.21 UCPR. However, the decision to be reached in each case will depend upon the subject matter of the trial, the complexity of the issues in the trial and the content of the report, in particular whether the report may have a tendency to mislead and confuse in significant respects if admitted as a document, and whether the report may be given undue weight by a jury because of its admission as a report of an expert witness. The Content of Mr Mark’s Report

I now move to the particular areas of objection in the present case.

Firstly, I am satisfied that there is a field of specialised knowledge applicable to the subject matter addressed in Mr Mark’s report. That field is accountancy and financial analysis in the area of money laundering investigation, including the tracing of funds. Expert evidence of this type has been given in money laundering trials, in circumstances which have satisfied the principles in Makita and in ASIC v Rich : R v Cox (Ruling No. 1) [2005] VSC 157 at [11]ff; R v Cox (Ruling No. 2) [2005] VSC 224 at [19]ff; R v Ferguson and Ors [2009] VSCA 198 at [18]-[91]; R v Rich (Ruling No. 10) [2009] VSC 10 at [30]ff.

In R v Cox (Ruling No. 2) , Kaye J observed at [25] that the forensic accountant in that case, an employee of Victoria Police, had prepared a document which identified various cash transactions in the accounting documents. Kaye J observed that the compilation of such a document was “classically a role performed by a qualified accountant” which could be put before the jury as a convenient compilation and consolidation of the various accounts in accordance with the principles in R v Mitchell [1971] VR 46 at 59-60; Smith v The Queen and Butera v Director of Public Prosecutions (Vic) at 190. Kaye J held, at [32], that the giving of evidence by the accountant as to the criteria and assumptions developed and applied by him, would not usurp the role of the jury as he would not be purporting to give evidence as to the normal spending habits of individuals. Rather, he would confine his evidence to that of a forensic accountant, by applying criteria and assumptions developed by him to offset particular withdrawals against other payments or deposits in the account.

In R v Ferguson and Ors (the appeal following conviction at the trial presided over by Kaye J in R v Cox ), the Victorian Court of Appeal (Maxwell P, Buchannan and Weinberg JJA) held that the forensic accountant’s evidence was properly admitted at trial. Their Honours observed, at [51], that although the jury might ultimately have been able to form their own conclusions as to which transactions were capable of being offset, an accepted role of an expert is to help a jury “to use the evidence of their own eyes” ( R v Parker [1912] VLR 152 at 158). Their Honours referred to the statement of Cussen J in R v Parker (at 160) that the witnesses “are not, in one sense, speaking as experts at all, but are merely pointing out to the jury matters which the jury could determine for themselves - they are merely convenient helpers of the court” .

Their Honours referred, at [50], to the observation of Malcolm CJ in Caratti v R (2000) 22 WAR 527 at 576 [340] where the Chief Justice said: “Where a witness has acquired knowledge by lengthy and studious application to material which is itself admissible evidence and where to afford the jury the time and facilities to conduct similar research would be impracticable, it is legitimate to allow the witness to assist the jury by giving evidence of his opinion.”

In R v Rich (Ruling No. 10) [2009] VSC 10, Lasry J at [30] applied the reasoning of Kaye J in R v Cox (Ruling No. 1) and R v Cox (Ruling No. 2) in admitting the evidence of an accountant, the effect of which was to identify transactions by accounting analysis which the accountant asserted were unsourced.

In these Victorian cases, expert accounting evidence of this type has been described as evidence of betterment, being evidence of financial advantage which is said to flow to the particular accused person as a result of a series of transactions traced through various accounts. In my view, these Victorian cases are examples of the admission of expert opinion evidence for purposes which include the giving of assistance to the jury to read and comprehend complex accounting documents. As I understand it, this is one purpose which the Crown seeks to achieve by adducing evidence from Mr Mark.

It may be that this can be achieved substantially by the tender under s.50 Evidence Act 1995 of a document summarising the contents of voluminous documents, together with a flow chart or charts which provide further assistance in understanding the transactions and commercial arrangements reflected in the document. This purpose would accord with the statements in authorities referred to at [9] to [10] above.

I am satisfied that Mr Mark is calling upon a field of specialised knowledge and experience which he possesses in expressing opinions concerning the movement of shares, their disposal and the movement of funds between accounts apparently related to those share dealings.

However, I consider that Mr Mark’s use of the statutory term “effective control” in s.337 Proceeds of Crime Act 2002 (Cth) is, at the least, confusing. The present pretrial application has proceeded on the basis that the Crown intends to tender the whole of Mr Mark’s report as an exhibit before the jury (T31, 29 July 2010). The report (page 7) contains a substantial part explaining the origin of the term “effective control” to be used by Mr Mark. He states that he would use that term “in the absence of any better definition” .

It is common ground that s.337, and the meaning of “effective control” contained in it, has no application to the issues in this trial. For this reason alone, I would not permit the Crown to tender Mr Mark’s report as an exhibit. It is no answer to this problem to contend that this is an assumption made by Mr Mark identified in his report and that, if the assumption is not valid, it may affect the weight to be given to the report.

As I have observed earlier, where an expert report is sought to be tendered at a criminal jury trial, clarity is required, with any disputed content on an issue such as this being one to be determined by the trial Judge before the report is tendered. In the same way as a question asked in examination-in-chief by the Crown of Mr Mark, concerning the origin of the term “effective control” , may attract an objection upon the grounds of relevance (an objection which I would presently uphold), then the same issue is posed for determination given the objection to Mr Mark’s use of that term throughout the report.

Mr Wigney SC drew my attention to the decision of the Queensland Court of Appeal in Director of Public Prosecutions (Cth) v Hart [2005] QCA 51 at [21]-[22] where McPherson JA said: “[21] Hence, when s 337 speaks of property being subject to the ‘effective control’ of a person, it refers, in this case primarily to the effective control by Hart of or over the things, such as the aircraft and land, which are targets of the restraining order of 8 May 2003. By s 337(1): (1) Property may be subject to the effective control of a person whether or not the person has: (a) a legal or equitable estate or interest in the property; or (b) a right, power or privilege in connection with the property. Speaking of the statutory expression ‘effective control’ in Connell v Lavender (1991) 7 WAR 9, 22, Rowland J in the Full Court of Western Australia said that it meant control in fact and that what it contemplates is control ‘that is practically effective, in the sense that the person has in fact the capacity to control the possession, use or disposition of the property … ‘. See also DPP v Toro-Martinez (1993) 33 NSWLR 82 , 89. Like Heerey J in Gray v Official Trustee in Bankruptcy (1991) 29 FCR 166, 173, I regard the expression ‘effective control’ as readily comprehensible, and I respectfully agree that no purpose is served by paraphrasing or redefining it. Indeed, repeated judicial exegesis is likely in the end to divert rather than elucidate its present clear and simple meaning. [22] Despite judicial adjurations like these, Mr Sofronoff QC nevertheless sought to incorporate into the notion of effective control a requirement that it could not be found to exist if the ‘suspect’ lacks the practical power to take the benefits of the property for himself. Thus, he said, the chief executive officer of a corporation has or may have express or implied authority to control the possession or use of physical objects belonging to the company, even to the extent of being able to sell them, but is nevertheless not entitled to treat the property or its proceeds as his own. But to import into ‘effective control’ conceptions of beneficial ownership is to fly in the face of the express provision in s 337(1) making it independent of whether or not the suspect has an equitable interest in the property or any right or power with respect to it. Speaking generally, the possession or custody of a servant or employee is that of his master or employer: Willey v Synan (1937) 57 CLR 200, 216; Byrne v Hoare [1965] Qd R 135 , 147, so that any control exercised by a corporate officer over property of a corporation would be considered the control of the corporation itself. That is no doubt because the officer of a corporation is ordinarily subject in his daily actions with respect to corporate property and powers to the instructions and supervision of the board of directors or one of their number, whose effective control is in turn that of the company whose directing mind and will they represent: Lennard’s Carrying Co v Asiatic Petroleum Co [1915] AC 705, 713. But who, in a particular case, in fact exercises that directing mind and will depends on the particular circumstances prevailing in that corporation. It is to the circumstances that prevailed here in the case of the appellants that I now turn.”

It is noteworthy that in Gray v Official Trustee in Bankruptcy (1991) 29 FCR 166, Heerey J said (at 173), by reference a similar provision to s.337, that the: “…section does not really provide a definition of ‘effective control’ but rather is directed towards giving the ordinary meaning of that expression, which is not a term of Art, a wide scope unrestricted by any requirement to show a traditional legal or equitable interest in the property. The expression ‘effective control’ is one that is readily comprehensible and I do not think any purpose is served by paraphrasing or redefining it.”

It may be that different wording could be utilised by Mr Mark to reflect the terminology which he seeks to apply in his report, if he is qualified to express such an opinion in admissible form. It is not appropriate, at this point, that I proceed further down this path as submissions have not been made in this respect beyond the reference to the Queensland decision. It is sufficient to conclude that this deficiency in Mr Mark’s report is such that, in my view, it ought not be admitted at a jury trial for this reason alone.

A number of the Victorian cases refer to the decision of the Queensland Court of Criminal Appeal in R v Hally (1962) Qd R 214 where Gibbs J (as his Honour then was) considered a ground of appeal concerning the admissibility of opinion evidence from an accountant at a fraud trial. Gibbs J stated, at 228, that an accountant may give evidence of the result of his examination of the books and documents of the accused person, which had been tendered in evidence. However, the evidence of the witness in that case went beyond its proper limits, because (inter alia) it involved the expression of opinion upon a matter of legal or moral obligation, extending to opinions that there had been “manipulation of the balances” and effectively that the offender had been guilty of dishonest contrivance (at 228-229). Gibbs J observed at 230 that: “It can thus be seen that the evidence of this witness went beyond matters of mere accountancy, and that he usurped the functions of the jury in drawing inferences that the appellant had been dishonest in the manner of keeping his accounts, and had misappropriated trust moneys, and that he gave his opinion on the very question that the jury had to decide. To this extent his evidence was inadmissible.”

In my view, these references in R v Hally assist the identification of any admissible opinion evidence from Mr Mark.

I am satisfied that Mr Mark may express opinions concerning the tracing of funds, in a manner consistent with the approach taken in the Victorian cases referred to above at [227]-[231]. The fact that these cases were decided before Victoria enacted its own version of the Uniform Evidence Act does not stand in the way of the application of those authorities. As an examination of the Victorian authorities reveals, the rulings concerning admissibility involved application of the principles emerging from Makita and ASIC v Rich , as well as earlier cases which remain useful for a ruling concerning admissibility of evidence in criminal cases in New South Wales as well.

I do not consider that evidence of this type would usurp the role of the jury, but, rather, it would assist the jury to reach its own conclusions by reference to complex evidence which had been explained to it accompanied by appropriate opinions which the jury may or may not accept.

Of course, all of this would be approached upon the basis that it would be open to the Accused to identify alternative explanations for share dealings and money flows by reference to the documents. It may be that a summary document provided to the jury for the purpose of s.50 Evidence Act 1995 might be accompanied by, if it were the case, differing interpretations of what the Crown and the Accused say that the primary documents reveal. Any flow chart or charts prepared by Mr Mark might be accompanied by statements of any alternative defence scenario, which may be argued as arising with respect to the transactions summarised in the chart or charts. I make this point to emphasise the utility of summary documents and charts to assist the jury at the time when evidence is tendered, as well as during closing addresses and during summing up. All of this, it might be thought, will serve to assist the jury and to concentrate on the real issues in the trial, as well as having the important and incidental effect that the trial may be confined reasonably to the four-week estimate agreed between the parties.

I am satisfied that the above conclusions involve acceptance and application of the principles in Makita and in ASIC v Rich . They also involve acceptance and application of the approach to the presentation of complex and voluminous documents at a jury criminal trial (see [9] to [10] above).

To the extent that part of the objection to evidence from Mr Mark relates to the fact that he is employed by the AFP, I do not consider that that is a basis for excluding his evidence. The forensic accountant in R v Cox was employed by Victoria Police, but this did not bear upon the admissibility of his evidence. Further, objection to expert evidence upon the grounds of bias have led to the judicial response that issues of that type bear upon weight and not admissibility: Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153 at [186]-[225].

In my view, the point has been reached in this judgment where any further consideration of specific objections will not assist. I have determined that the report of Mr Mark will not be admitted as an exhibit in its present form. I have accepted that Mr Mark is capable of giving expert evidence on certain matters. It is not for the Court to, in effect, settle Mr Mark’s report so as to make it an admissible foundation for him to give evidence.

It may be that the Crown, in light of these reasons, will consider the preparation of a document for the purpose of s.50 Evidence Act 1995 which fulfils the apparently intended function of pages 1-93 of Mr Mark’s report. It may be that the Crown will consider obtaining from Mr Mark a report containing admissible opinions in accordance with the conclusions I have expressed in this judgment. If the Crown takes those steps, which will need to be taken expeditiously, I will consider any further objection in the light of the material then presented. The Foreign Evidence Documents

Paragraphs 2, 4 and 5 of the Further Amended Notice of Motion seek: (a) exclusion from evidence of parts of affidavits of Wim Langeveld sworn 20 November 2009, Claudio Pfammetter sworn 9 December 2009 and Vladimir Stemberger sworn 21 January 2010 (paragraph 2); (b) that certain specified documents be excluded from evidence by reason of the failure or refusal of the Crown to comply with requests made concerning them pursuant to s.167 Evidence Act 1995 or, in the alternative, pursuant to s.25 Foreign Evidence Act 1994 (Cth) or s.135 or s.137 Evidence Act 1995 (paragraph 4); (c) in the alternative to paragraph 4, that the Crown be directed to call as witnesses the following persons for the purpose of answering questions that relate to certain specified representations contained in the documents (paragraph 5): (i) Urs Meisterhans, (ii) Richard Dukes, (iii) Maureen Van Der Blij, (iv) Robert Mehm, (v) certain unnamed persons who made representations in specified documents.

Paragraphs 2, 4 and 5 of the Further Amended Notice of Motion concern challenges to the admissibility of foreign evidence obtained by the Crown as a result of requests under the Mutual Assistance in Criminal Matters Act 1987 (Cth) . The Crown tenders this foreign evidence pursuant to Part 3 of the Foreign Evidence Act 1994 (Cth) .

The affidavit of Mr Langeveld attaches business records maintained by Citco and/or the five Stichtings. Citco was the company in the Netherlands engaged by Ms Harley, on instructions from the Accused, to establish and administer the Stichtings.

The affidavit of Mr Pfammetter attaches business records maintained by Bank Pasche AG (previously known as SwissFirst). These documents comprise banking records held by SwissFirst in relation to Account 6009 operated by Admerex (Ireland) Limited, Account 6048 operated by Challinor Equities and internal settlement account No. 7900 used by SwissFirst to facilitate the transfer of one million Temenos shares to Challinor Equities on 3 February 2005.

The affidavit of Mr Stemberger attaches business records maintained by EFG in relation to bank accounts operated by each of the Stichting Group companies and First European Finance Investments Limited.

The Crown contends that these foreign business records are directly relevant to issues for determination in the case, including: (a) the nature and structure of the Stichting Group; (b) the relationship between the Accused and the Stichting Group; (c) the purported transfer of the Admerex shares to the Stichting Group companies on or around 11 June 2004; (d) the subsequent disposal of those shares, including the exchange of the 48 million Admerex shares for one million Temenos shares on 3 February 2005; and (e) the receipt and use of the proceeds from the disposal of the Admerex shares, including the transfer of substantial amounts of those funds for the benefit of the Accused and Barat Advisory in Australia.

Mr Wigney SC acknowledged that the objections taken to the foreign documentary evidence had been affected by recent amendments to the Foreign Evidence Act 1994 (Cth) . As a result of these amendments, there was some recalibration of the defence submissions in support of paragraphs 2, 4 and 5 of the Further Amended Notice of Motion. In essence, the Accused submits that: (a) parts of the affidavits of Messrs Langeveld, Pfammetter and Stemberger ought be excluded; (b) specified documents ought not be admitted into evidence; (c) if the specified documents were to be admitted, the Crown ought be directed to call as witnesses the nominated persons for the purpose of giving evidence concerning representations contained in the documents.

It is appropriate to turn to the relevant statutory provisions. The Foreign Evidence Act 1994 (Cth )

The relevant statutory scheme under the Foreign Evidence Act 1994 (Cth) , as amended by the Foreign Evidence Amendment Act 2010 (Cth) , which commenced on 4 June 2010, is described accurately in paragraphs 31-43 of the Crown written submissions dated 9 July 2010. Sections 24 and 25 Foreign Evidence Act 1994 (Cth) , in their current form, provide as follows: “24 Foreign material may be adduced as evidence (1) Subject to this section, foreign material may be adduced in a proceeding to which this Part applies. (2) The foreign material is not to be adduced as evidence if: (a) it appears to the court’s satisfaction at the hearing of the proceeding that the person who gave the testimony concerned is in Australia and is able to attend the hearing; or (b) the evidence would not have been admissible had it been adduced from the person at the hearing. (3) Paragraph (2)(b) does not apply if: (a) the foreign material is a business record; and (b) the only reason why the evidence would not have been admissible had it been adduced from the person at the hearing is that an Australian law relating to hearsay evidence (however described) would have applied to the evidence. (4) For the purpose of determining whether foreign material is a business record, and may be adduced as evidence, the court may: (a) examine the foreign material; and (b) draw any reasonable inference from the form and contents of the foreign material as well as from any other matters from which inferences may properly be drawn. 25 Discretion to prevent foreign material being adduced - general (1) The court may direct that foreign material not be adduced as evidence if it appears to the court’s satisfaction that, having regard to the interests of the parties to the proceeding, justice would be better served if the foreign material were not adduced as evidence. Note: See also subsection 25A(1) (proceedings for designated offences). (2) Without limiting the matters that the court may take into account in deciding whether to give such a direction, it must take into account: (a) the extent to which the foreign material provides evidence that would not otherwise be available; and (b) the probative value of the foreign material with respect to any issue that is likely to be determined in the proceeding; and (c) the extent to which statements contained in the foreign material could, at the time they were made, be challenged by questioning the persons who made them; and (d) whether exclusion of the foreign material would cause undue expense or delay; and (e) whether exclusion of the foreign material would unfairly prejudice any party to the proceeding.”

Section 27 of the Act is in the following terms: “27 Operation of other laws This Part does not limit the ways in which a matter may be proved, or evidence may be adduced, under this Act (other than this Part) or any other Australian law.”

The 2010 amending Act inserted the following definitions of “business” and “business record” into s.3(1) Foreign Evidence Act 1994 (Cth) : “ business has a meaning affected by clause 1 of Part 2 of the Dictionary in the Evidence Act 1995. business record means a document that: (a) is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business; or (b) at any time was or formed part of such a record.”

I record my acceptance of the Crown submissions concerning the interrelationship between Federal and State statutory provisions. The consequence of this is acceptance that the Federal statutory scheme operates to exclude the requirements to establish the hearsay exception in s.69 Evidence Act 1995 . Put shortly, application of s.68 and s.79 Judiciary Act 1903 (Cth) and a number of decisions relied upon by the Crown leads to this conclusion: Putland v The Queen [2004] HCA 8; 218 CLR 174 at 179-180 [7], 189 [40]-[41], 196-197 [64]; Northern Territory of Australia v GPAO [1999] HCA 8; 196 CLR 553 at 587-588 [78]-[81]; Bell Group Limited (In Liquidation) v Westpac Banking Corporation [2004] WASC 162; 208 ALR 491 at 499-500 [33], 503-505 [49]-[53], 508-509 [69], 510 [75].

The analysis of Owen J in Bell Group Limited (In Liquidation) v Westpac Banking Corporation is of particular assistance as it concerns the interrelationship between the Foreign Evidence Act 1994 (Cth) and the relevant State Act, the Evidence Act 1906 (WA) . Using the term which appears in earlier decisions, Owen J observed, at 499-500 [33], that the real issue in that case was whether the provisions of the State Evidence Act, in conferring or purporting to confer on the Supreme Court of Western Australia (when exercising Federal jurisdiction) power to take evidence by video link, constituted “a surrogate federal law” . The next question was whether the Foreign Evidence Act 1994 (Cth) , as a law of the Commonwealth, “otherwise provides” for the purpose of s.79 Judiciary Act 1903 (Cth) . If it did, then the Commonwealth statute displaced the surrogate federal law. If it did not, then the surrogate federal law continued to operate according to its tenor by force of s.79. This analysis is of assistance in examining the question falling for determination in the present case.

I accept the Crown submission that there is no inconsistency between the relevant provisions of the Foreign Evidence Act 1994 (Cth) and the Evidence Act 1995 , except insofar as there is a direct conflict created by the 2010 amendments to the Commonwealth Act, which clearly take out of operation the hearsay exception for business records contained in s.69 Evidence Act 1995 (T122, 4 August 2010). This conclusion may be reached by an examination of the statutory provisions, the legislative intent of the 2010 amendments to the Foreign Evidence Act 1994 (Cth) and application of relevant principles referred to in the abovementioned cases. This conclusion is also consistent with the operation of s.27 Foreign Evidence Act 1994 (Cth) which evinces an intention that, apart from direct inconsistency, the provisions in Part 3 of the Foreign Evidence Act 1994 (Cth) are not intended to limit the other ways in which evidence may be adduced under any other Australian law.

I accept the Crown submission that the amendments to s.24 of the Act evince a legislative intention that foreign business records obtained as a result of a request under the Mutual Assistance in Criminal Matters Act 1987 (Cth) should, generally, be admitted under Part 3 of the Foreign Evidence Act 1994 (Cth) without the attendance of overseas witnesses to give oral evidence and without satisfying the requirements for the exception to the hearsay rule in s.69 Evidence Act 1995 . In my view, this legislative intention is confirmed in paragraphs 7-14 of the Supplementary Explanatory Memorandum in relation to the new s.24(3) of the Act, which appear hereunder (emphasis added): “ Proposed subsection 24(3) would provide that foreign business records may be adduced where the records contain hearsay evidence, provided the other evidentiary requirements of the Foreign Evidence Act are satisfied . The Foreign Evidence Act currently provides that foreign evidence may be adduced provided the evidence would have complied with all relevant rules of admissibility in the particular jurisdiction, had the person given the evidence in person at the hearing. The Bill sought to streamline the requirements for foreign business records by providing that business records could be adduced unless the court was satisfied the records were not reliable or probative, or the records were privileged. The amendments address issues identified in the Committee's report by maintaining the current position in the Foreign Evidence Act that all types of foreign material, including business records, may be adduced provided they comply with the evidentiary rules in the relevant jurisdiction. The Bill, as amended, will implement Recommendation 1 of the Committee's report by making clear that the adducing party is required to satisfy the court that foreign business records meet the evidentiary requirements of the Foreign Evidence Act. In order to address problems identified when adducing business records pursuant to the current provisions of the Foreign Evidence Act, the amendments would displace the rule against hearsay with respect to foreign material that is a business record . Proposed subsection 24(3) would provide that paragraph 24(2)(b) of the Foreign Evidence Act, which provides that foreign material may be adduced unless it would not have been admissible had the person given the evidence in person at the proceeding, does not apply to 34 Paragraphs 7 - 14 of the Supplementary Explanatory Memorandum foreign material that is a business record if the only reason the evidence would not have been admissible is that an Australian law relating to hearsay evidence would have applied to the evidence. That is, foreign business records could be admissible where the records contain hearsay evidence, provided the other evidentiary requirements in the particular jurisdiction are satisfied. The term 'Australian law' is defined in subsection 3(1) of the Foreign Evidence Act to mean a law (whether written or unwritten) of or in force in the Commonwealth, a State or a Territory. This would encompass both statutory and common law. The rule against hearsay generally provides that evidence which contains previous representations that are intended to assert the existence of a fact is not admissible unless a relevant exception applies. Often the only reason a business record is inadmissible is because it technically constitutes hearsay evidence. For example, where the person giving evidence about the business record is not the person who created the record, the evidence may constitute hearsay and be excluded from evidence, notwithstanding that the records are otherwise reliable. While some jurisdictions provide for an exception to the rule against hearsay for business records, witnesses in the foreign country may be unable or unwilling to provide testimony which would satisfy the requirements of the exception. Amendment 2 would ensure that foreign business records are not excluded from evidence simply because the evidentiary requirements relating to an exception to the hearsay rule cannot be met. The person tendering the business records would not be required to provide proof that the records fall within an exception to the rule against hearsay . Paragraph 24(3)(b) refers to 'an Australian law relating to hearsay evidence (however described) ...'. This provision makes clear that it is not necessary for the relevant laws to use the terminology of 'hearsay' for the laws to be applicable. For proceedings to which Commonwealth evidence law applies, the hearsay rule is set out in section 59 of the Commonwealth Evidence Act 1995. The court would retain its general discretion under current section 25 of the Foreign Evidence Act to prevent foreign material from being adduced. However, the intention of subsection 24(3) is that evidence should not be excluded solely on the basis that it does not comply with the rule against hearsay .”

I accept the Crown submission that paragraphs 15-16 of the Supplementary Explanatory Memorandum also confirms that new s.24(4) is intended to facilitate the admissibility of foreign business records, by allowing the Court to examine the records and draw available inferences from their form and content. Paragraphs 15-16 of the Supplementary Explanatory Memorandum state: “Proposed subsection 24(4) would provide that the court may draw inferences from certain matters in determining whether foreign material is a business record, and may be adduced. This amendment would ensure that the court is able to draw inferences from matters such as the content and form of the foreign material and the manner in which it was obtained (including that it was obtained pursuant to a request by the Australian Government for formal government to government assistance), in order to determine both that the foreign material is a business record, and that it may be adduced as evidence. A similar provision enabling the court to draw inferences is contained in section 183 of the Evidence Act 1995 (Cth).”

Section 25A provides for the discretionary exclusion of foreign material in relation to proceedings for “designated offences” . However, s.25A does not apply here as the charges contained in the indictment do not fall within the definition of “designated offences” in s.3(1) of the Act.

Section 26 allows for certificates to be issued certifying that material was obtained as a result of a request to a foreign country by or on behalf of the Attorney General, for the purposes of s.21 of the Act. Section 26, as amended by the 2010 Act, is in the following terms: “26 Certificates relating to requests made to foreign countries (1) The Attorney General or an authorised officer may, by signed writing, certify that specified documents or things were obtained as a result of a request made to a foreign country by or on behalf of the Attorney General. (2) It is presumed (unless evidence sufficient to raise doubt is adduced to the contrary) that the documents or things specified in the certificate were obtained as a result of that request. (3) In this section: authorised officer means a person: (a) who is an SES employee or acting SES employee in the Attorney General’s Department; and (b) whom the Attorney General has, by notice published in the Gazette, appointed as an authorised officer.”

The transitional provisions in Schedule 1, Part 2, Item 18 of the 2010 Act provide that the amendments to s.26 apply in relation to a certificate that is given on or after 4 June 2010 that relates to a document or thing obtained as a result of a request made before or after that date.

A number of certificates under s.26(1) Foreign Evidence Act 1994 (Cth) were issued by Helen Drew on 18 June 2010 (Exhibit PT1). No submission was made on behalf of the Accused that these certificates did not comply with the relevant statutory requirements.

I accept the Crown submission that the legislative intention arising from the 2010 amendments was that hearsay material should be admitted as long as it meets the broad definition of foreign business records in the Foreign Evidence Act 1994 (Cth) and that the requirements to establish the exceptions in s.69 Evidence Act 1995 have no bearing and are not engaged (T115, 30 July 2010).

In broad terms, I accept the Crown submission that the prejudice claimed by the Accused which ought lead to exclusion of documentary evidence or, at the least, a direction that certain persons attend to give evidence about the contents of documents, is an argument which contradicts the clear legislative intention behind the amendments. That is not to say that there may not be cases where a court may exercise discretion under s.25 Foreign Evidence Act 1994 (Cth) to prevent foreign material being adduced. However, no basis for exclusion has been demonstrated in this case.

The Crown proposes to tender the foreign documentary evidence. In addition, the Crown proposes to call Ms Harley to give oral evidence. An examination of the foreign documentary material under challenge reveals significant involvement by Ms Harley in a number of respects. The Court was informed that the Crown was obtaining a supplementary statement from Ms Harley which would contain evidence which she was able to give with respect to the contents of particular documents. I bear in mind that Ms Harley travelled to Europe and undertook a range of tasks on behalf of the Accused which the Crown alleges are reflected in a number of the foreign documents. Accordingly, an assessment of the objection to the foreign documents must take into account the fact that Ms Harley is to give evidence in the Crown case with respect to transactions and events to which many of the documents relate.

As stated earlier in this judgment, I am determining the present objections by reference solely to the documents tendered at the pretrial hearing and submissions made by reference to them. I accept the Crown submission that there is no impediment to the Accused’s legal representatives contacting Mr Meisterhans, Mr Dukes, Ms Van Der Blij and Mr Mehm to obtain further information concerning the documents.

With respect to the foreign documents generally, including those where the maker of a particular representation is not identified, I bear in mind the Crown submission, which has force, that the Accused himself is able to shed considerable light upon the transactions and events referred to in the foreign documents. That is not to translate what is an accusatorial and adversarial process into something different. Rather, it acknowledges that, if the foreign documents are admitted into evidence at the trial, they will be accompanied by evidence in the Crown case from Ms Harley, and such evidence as the Accused may seek to give or call with respect to them, after having had an opportunity to make enquiries of persons with respect to the documents.

As the Crown submitted, what is suggested in the defence submissions as being ambiguous and troublesome in the foreign documents may operate adversely to the Crown more so than the Accused, if the evidence adduced by the Crown is confined to that presently identified. I consider that the Crown submissions on this topic generally provide a helpful platform to consider the particular submissions made in support of the objection.

The 2010 amendments inserted s.24(3) into the Foreign Evidence Act 1994 (Cth) . To my mind, s.24(3)(b) is the critical provision which identifies expressly that there is no basis for excluding evidence, if the only reason for it not being admissible would be that it constituted hearsay evidence. I accept the Crown submission in this respect.

I propose now to consider the areas of objection by reference to relevant provisions of the Foreign Evidence Act 1994 (Cth) and s.167 and s.169 Evidence Act 1995 which are available as a matter of law for consideration in this case. Objections to Parts of the Three Affidavits

A relatively confined objection is taken to parts of the affidavits of Mr Langeveld (Exhibit PTE), Mr Pfammetter (Exhibit PTF) and Mr Stemberger (Exhibit PTG). Mr Wigney SC acknowledged that the significance of these affidavits has been diminished substantially by the Crown’s reliance on the certificates under the Foreign Evidence Act 1994 (Cth) (Exhibit PT1) and the 2010 amendments to that Act.

The objection pressed with respect to parts of these three affidavits was confined to an objection to global assertions or conclusions about aspects of the documents that are attached to the affidavits. Mr Wigney SC submitted that a consequence of the rejection of the paragraphs to which objection was taken would be that the accompanying documents would be admitted into evidence, but there would be no evidence as to their provenance (T85, 30 July 2010).

The Crown submitted that there was no substance in the defence objections to parts of the three affidavits, and that the affidavits complied with statutory requirements and ought be admitted.

I am satisfied that each of the three affidavits, and the attached foreign business records, were obtained as a result of a request made by or on behalf of the Attorney General to a foreign country in accordance with s.21 Foreign Evidence Act 1994 (Cth) . So much is established by the s.26 certificates issued on 18 June 2010 (Exhibit PT1).

I am satisfied that each of the affidavits comply with the requirements for testimony in s.22 of the Act, and that each comprises testimony reduced to writing in accordance with the requirements for the form of testimony in s.23 of the Act.

The requirements of s.24(2)(a) of the Act are satisfied because none of the deponents to the affidavits are in Australia.

This brings me to the area of principal objection pressed by the Accused. I acknowledge that each deponent speaks in relatively broad terms with respect to the documents and their provenance in each case. However, I accept that the effect of the evidence in each of the affidavits is to confirm that each of Citco, SwissFirst and EFG is a business, and that the attached records belong to or were kept by Citco, SwissFirst and EFG in the course of, or for the purposes of, their respective businesses. This evidence would have been admissible, had it been adduced in oral evidence from the deponents in person, and thus s.24(2)(b) is satisfied in relation to the evidence in each of the affidavits.

Each deponent states in his affidavit that the attached documents are business records. This conclusion is confirmed by a perusal of the documents in accordance with s.24(4) of the Act, which supports their description as business records. A combination of the affidavits, and inferences available from the documents themselves, supports a conclusion that the documents are business records for the purpose of s.24(3) of the Act.

I am satisfied that each of the affidavits of Mr Langeveld, Mr Pfammetter and Mr Stemberger is admissible, and I decline to exclude the parts of the affidavits to which objection has been taken.

I turn now to the objections contained in paragraphs 4 and 5 of the Further Amended Notice of Motion. It is appropriate at this point to set out the provisions of s.167 and s.169 Evidence Act 1995 : “167 Requests may be made about certain matters A party may make a reasonable request to another party for the purpose of determining a question that relates to: (a) a previous representation, or (b) evidence of a conviction of a person for an offence, or (c) the authenticity, identity or admissibility of a document or thing.” “169 Failure or refusal to comply with requests (1) If the party has, without reasonable cause, failed or refused to comply with a request, the court may, on application, make one or more of the following orders: (a) an order directing the party to comply with the request, (b) an order that the party produce a specified document or thing, or call as a witness a specified person, as mentioned in section 166, (c) an order that the evidence in relation to which the request was made is not to be admitted in evidence, (d) such order with respect to adjournment or costs as is just. (2) If the party had, within a reasonable time after receiving the request, informed the other party that it refuses to comply with the request, any application under subsection (1) by the other party must be made within a reasonable time after being so informed. (3) The court may, on application, direct that evidence in relation to which a request was made is not to be admitted in evidence if an order made by it under subsection (1) (a) or (b) is not complied with. (4) Without limiting the circumstances that may constitute reasonable cause for a party to fail to comply with a request, it is reasonable cause to fail to comply with a request if: (a) the document or thing to be produced is not available to the party, or (b) the existence and contents of the document are not in issue in the proceeding in which evidence of the document is proposed to be adduced, or (c) the person to be called as a witness is not available. (5) Without limiting the matters that the court may take into account in relation to the exercise of a power under subsection (1), it is to take into account: (a) the importance in the proceeding of the evidence in relation to which the request was made, and (b) whether there is likely to be a dispute about the matter to which the evidence relates, and (c) whether there is a reasonable doubt as to the authenticity or accuracy of the evidence that is, or the document the contents of which are, sought to be proved, and (d) whether there is a reasonable doubt as to the authenticity of the document or thing that is sought to be tendered, and (e) if the request relates to evidence of a previous representation - whether there is a reasonable doubt as to the accuracy of the representation or of the evidence on which it was based, and (f) in the case of a request referred to in paragraph (g) of the definition of request in section 166 - whether another person is available to give evidence about the conviction or the facts that were in issue in the proceeding in which the conviction was obtained, and (g) whether compliance with the request would involve undue expense or delay or would not be reasonably practicable, and (h) the nature of the proceeding.”

This area of objection concerns the admissibility of foreign documents emanating from Citco, SwissFirst or EFG, which are attached to the affidavits of Messrs Langeveld, Pfammetter and Stemberger respectively. As mentioned above, there is an objection to the admissibility of these documents and, in the alternative, an application that the persons nominated be required to attend for examination at a pretrial hearing by way of an enquiry in accordance with the principles in R v Basha (1989) 39 A Crim R 337 (T83, 30 July 2010).

The solicitors for the Accused made requests to the Crown under s.167 Evidence Act 1995 that Mr Meisterhans, Mr Dukes, Ms Van Der Blij, Mr Mehm and certain unnamed makers of specified representations be called as witnesses (Exhibit PTC). The Crown has declined to do so, and thus the Accused seeks order under s.169 Evidence Act 1995 requiring the Crown to produce each of the specified persons to give evidence. The s.25 Discretionary Objections

I will deal firstly with the discretionary provisions contained in s.25 Foreign Evidence Act 1994 (Cth) and then move to a decision concerning the application for witnesses to be called under s.169 Evidence Act 1995 .

The terms of s.25 appear earlier in this judgment. The Court may direct that foreign material not be adduced as evidence if it appears to the Court’s satisfaction that, having regard to the interests of the parties to the proceedings, justice would be better served if the foreign material was not adduced as evidence. In my view, s.25(1) provides for a broad discretion to exclude evidence otherwise admissible in accordance with the statutory scheme. The very breadth of the discretion in s.25 emphasises my earlier conclusion that s.69 Evidence Act 1995 has no operation.

Section 25(2) provides a non-exhaustive list of matters to be taken into account for the purpose of a discretionary judgment under s.25(1) of the Act. I will turn to these matters shortly in assessing the submissions of the parties.

For the purpose of determining the objection to the foreign documentary evidence, I was taken to a number of documents (contained in Exhibit PTD) effectively to illustrate the heads of objection. I do not propose, in this judgment, to describe the documents or recount the particular arguments which were addressed to them. The arguments appear in the written submissions and, in particular, the transcript of oral submissions, during which the Court was taken to a number of documents. I have assessed the submissions of counsel by reference to the documents which are in evidence at the pretrial hearing.

I take as a starting point what I consider to be the legislative effect of the 2010 amendments to the Foreign Evidence Act 1994 (Cth) , that the mere absence of persons who could shed some light upon representations recorded in the documents is not sufficient (on its own) to warrant discretionary exclusion under s.25 of the Act.

To the extent that a number of defence submissions involved the suggestion of possible questions, and lines of questions, which counsel for the Accused may wish to address to one or more of the specified persons concerning documents, the bare absence of the person does not of itself provide a foundation for s.25 exclusion. It is necessary to have regard to the content of the documents, what they indicate, and the extent to which any Crown witness to be called may be able to give evidence concerning transactions and events referred to in the documents. Taken with this, as well, is the ability of the Accused’s legal team to communicate in an extra curial manner with the specified persons, including the making of enquiries concerning the possible identity of persons presently unnamed who made certain representations in documents.

In addition, I have regard to the fact that many of the documents refer to the Accused by name, and some appear to have been signed by him. The documents point to a series of events, over a period of time, involving different persons and entities. Importantly, the fact that the Crown is to call Ms Harley is a significant feature with respect to the s.25 objections.

I turn to the matters specified in s.25(2) of the Act. Section 25(2)(a) requires the Court to take into account the extent to which the foreign material provides evidence that would not otherwise be available. I am satisfied that the foreign business records do provide evidence which would not otherwise be available in this case.

Section 25(2)(b) requires the Court to take into account the probative value of the foreign material with respect to any issue which is likely to be determined in the proceedings. I am satisfied that the foreign business records are of high probative value. I accept the Crown submission that the documents go directly to the manner in which the Stichting Group worked, the relationship between the Accused and the Stichting Group and the disposal of the Admerex shares and the transfer of the proceeds to Barat Advisory.

The Accused submitted that a number of the documents appear to have been compiled by interested third parties so that their probative value is to be reduced. I bear in mind that the origin for each of the three groups of documents are the particular entities Citco, SwissFirst and EFG. There is a mixture of documents created by those entities, and others provided to those entities and held by them as part of their business records. I accept the Crown submission that the documents appear to comprise contemporaneous documentary evidence compiled by non-interested third parties in the normal course of their respective businesses and that they are likely to be an independent and reliable record of what occurred and was said.

In this respect, I observe that there will be interaction between the evidence of Ms Harley, who was directly involved in a number of significant events apparently acting on the instructions of the Accused, and the content of the documents themselves. As mentioned earlier, there is force in the Crown submission that, to the extent that there may be some ambiguity in the documents, it will not assist the Crown as the Accused will be in a position to provide an account to be measured against the evidence of Ms Harley and the content of the documents. In summary, I am persuaded that the probative value of the foreign material in this case is high.

Section 25(2)(c) requires the Court to take into account the extent to which statements contained in the foreign material could, at the time they were made, be challenged by questioning the persons who made them. The Accused relied upon this factor as operating against admission of the documents in this case. The Crown submitted that the 2010 amendments supported a view that this factor ought not be a decisive one and that, in any event, it was unlikely that persons who made representations in the foreign business records would now be able to recall or meaningfully add to those representations.

In assessing this factor, I bear in mind the prospect that Ms Harley will be able to shed some light upon many of the documents and the transactions and events referred to in them. I note that the provision is directed to the extent to which statements contained in the documents could be “challenged by questioning the persons who made them” . The word “challenged” is significant, bearing (in this context) its ordinary meaning of “to take exception to; to call in question” : “Macquarie Dictionary” , page 323. As I understand the issues in the proceedings, it has not been suggested that any person who acted in events contained in the foreign documents was engaged on a frolic of his or her own, or had acted in a manner contrary to the wishes of the Accused.

Rather, the proposed areas of questioning of persons appear to involve a desire to obtain more information about certain statements and the source or sources for those statements. In my view, this aspect is not insignificant when s.25(2)(c) uses the language referred to, involving an assessment of the extent of a contemporaneous “challenge” by questioning of persons. I do not consider that this factor provides any real assistance to the Accused in support of this objection.

Section 25(2)(d) requires the Court to take into account whether exclusion of the foreign material would cause undue expense or delay. The Crown submits that a potential consequence of excluding the foreign business records would be the adjournment of the trial to arrange for witnesses to be brought from overseas. The Crown submits that this would constitute undue expense or delay because Ms Harley and the Accused himself can provide their own explanations in evidence of the foreign documents. In my view, there is force in the Crown submission concerning this statutory factor which operates against the Accused on the objection.

Section 25(2)(e) requires the Court to take into account whether exclusion of the foreign material would unfairly prejudice any party to the proceeding. The provision requires attention to be paid to unfair prejudice and not bare prejudice: Papakosmas v The Queen [1999] HCA 37; 196 CLR 297 at 324-327 [90]-[97]; R v Clark [2001] NSWCCA 494; 123 A Crim R 506 at 582-584 [163]-[165].

In my view, there is force in the Crown submission that the areas of possible questioning identified by the Accused are repetitive and formulaic. In addition, no real basis appears to have been identified to suggest that there is a genuine dispute concerning the content of the foreign documents. If there was such a dispute, then it might be identified by the Accused. In any event, Ms Harley will be available to shed light upon a number of the documents, the Accused can give instructions to his lawyers about them (and evidence at trial if he so elects). It remains open to the Accused to make contact with persons, including Mr Meisterhans whom the Crown contends was acting as the agent of the Accused.

In my view, the matters raised by the Crown are pertinent. Given the significance of the foreign documents, exclusion of the foreign material would unfairly prejudice the Crown. The exclusion would constitute unfair prejudice because of the loss of the evidence to the Crown in circumstances where there is no unfair prejudice to the Accused through its admission. Although the statutory factor directs attention at unfair prejudice flowing from exclusion of the foreign material, I consider that it is pertinent as well to consider whether unfair prejudice would flow to the Accused if the documents are admitted. If there is no unfair prejudice to the Accused, then a finding of unfair prejudice to the Crown, through the exclusion of the documents, would be fortified. In the result, I am satisfied that this statutory factor operates in the Crown’s favour on the objection.

Having considered the submissions and the contents of documents which are the subject of objection, I am not satisfied that, having regard to the interests of the parties to the proceedings, justice would be better served if the foreign business records were not adduced as evidence pursuant to s.25(1) Foreign Evidence Act 1994 (Cth) . I decline to exclude the foreign business records upon this basis. Sections 135 and 137 Evidence Act 1995

An alternative basis of objection in paragraph 4 of the Further Amended Notice of Motion contends that the foreign business records should be excluded pursuant to s.135 or s.137 Evidence Act 1995 . Section 135 permits a court to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party, would be misleading or confusing or cause or result in undue waste of time.

The factors which I have considered for the purpose of the s.25 Foreign Evidence Act 1994 (Cth) objection are relevant as well to this objection. In my view, the foreign documentary evidence is of significant probative value. For reasons along similar lines to those addressed above concerning s.25, I am not satisfied that the probative value of the foreign documentary evidence is substantially outweighed by the danger that the evidence may operate in one or more of the ways specified in s.135 of the Act.

Section 137 Evidence Act 1995 provides that, in a criminal proceeding, the Court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant. The section speaks of unfair prejudice and not bare prejudice: Papakosmas v The Queen ; R v Clark . For similar reasons to those expressed in refusing to exclude the foreign business records under s.25 Foreign Evidence Act 1994 (Cth) , I am not satisfied that the probative value of the foreign business records is outweighed by the danger of unfair prejudice to the Accused. Accordingly, I decline to exclude the foreign business records under either s.135 or s.137 Evidence Act 1995 . Sections 167 and 169 Evidence Act 1995

I turn now to s.167 and s.169 Evidence Act 1995 . Those provisions are set out above.

I accept that each of the requests relied upon by the Accused in relation to the foreign business records (Exhibit PTC) is a request for the purpose of determining a question that relates to a previous representation pursuant to s.167(a) Evidence Act 1995 . The effect of the bulk of these requests is to ask the Crown to bring witnesses from overseas to be examined (at a Basha inquiry) about previous representations included in the foreign business records. Although it is accepted that the s.167 and s.169 procedure is available in this case, it remains relevant that the context in which the application is made concerns a request to bring witnesses to Australia to be examined about foreign business records which are otherwise admissible under the Foreign Evidence Act 1994 (Cth) .

It was not contended on this application that the requests by the Accused were not reasonable requests under s.167 of the Act. Rather, the Crown submitted that the Court had a discretion whether to make an order under s.169(1) of the Act if there is a failure to comply with a request without reasonable cause. The Crown pointed to the non-exhaustive list of statutory factors identified in s.169(5) of the Act and, in particular, s.169(5)(e) which requires the Court to take into account, if the request relates to evidence of a previous representation, whether there is a reasonable doubt as to the accuracy of the representation or of the evidence on which it was based. In circumstances where the enquiry relates to previous representations within s.167(a), it was submitted that this consideration was a critical one and that the Accused had not pointed to a reasonable doubt as to the accuracy of the representations, but rather had proposed a series of repetitive and formulaic enquiries which the Accused would seek to make.

I agree with the Crown submission that the criteria in s.169(5) Evidence Act 1995 involves, in many respects, similar considerations to matters dealt with in relation to s.25(2) Foreign Evidence Act 1994 (Cth). With respect to the operation of s.167 and s.169, I have had regard to the decision of the Court of Appeal in Trimcoll Pty Limited v Deputy Commissioner of Taxation [2007] NSWCA 307. In exercising the discretion under s.169 of the Act, I have had regard to the factors identified in s.169(5) of the Act.

The focus of attention of these provisions (and in particular, s.169(5)(e)) concerns the extent of any dispute about the accuracy of evidence or representations which may lead a court to exercise the power to order the other party to take a step under s.169(1) of the Act. I have already referred, in different contexts in this judgment, to purposes identified by the Accused for seeking the attendance of persons to give evidence concerning the foreign business records. The evidence and arguments do not persuade me that there are substantial controversies or areas in which the Accused challenges the accuracy and reliability of the content of the foreign business records.

The arguments of the Accused have identified areas in which a type of interrogation of persons is sought to be undertaken, without identification of an underlying controversy or challenge with respect to the contents of the documents. It seems to me that considerations of this type bear as well upon the application by the Accused for a discretionary order of the type available under s.169 Evidence Act 1995 .

I am not persuaded that such an order should be made and I decline to make an order under paragraphs 4 or 5 of the Further Amended Notice of Motion. Objections to Evidence Being Adduced Concerning Certain Events referred to in the Crown Case Statement - Relevance and Discretionary Exclusion Objections

Paragraph 7 of the Further Amended Notice of Motion seeks the exclusion of certain evidence pursuant to s.56(2) Evidence Act 1995 on the basis that it is not relevant, or, in the alternative, pursuant to s.135 or s.137 Evidence Act 1995 .

The evidence to which objection is taken may be identified briefly as: (a) evidence relating to events between about 16 January 2003 and about 20 November 2003, concerning the obtaining by Barat Advisory of a share holding in Admerex (paragraphs 4-20, CCS); (b) evidence concerning the opening of SwissFirst Account 6009 and Mr Goodall’s understanding that he was the sole signatory to that account (paragraphs 67-70, 72, 76, 80-83, 87 CCS).

I approach these objections upon the basis that a ruling is sought by reference to parts of the CCS, and submissions made by reference to that document. Sections 55 and 56 Evidence Act 1995 provide the test for relevance: “55 Relevant evidence (1) The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding. (2) In particular, evidence is not taken to be irrelevant only because it relates only to: (a) the credibility of a witness, or (b) the admissibility of other evidence, or (c) a failure to adduce evidence. 56 Relevant evidence to be admissible (1) Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding. (2) Evidence that is not relevant in the proceeding is not admissible.”

The effect of s.135 and s.137 Evidence Act 1995 were referred to earlier in the judgment. Evidence Summarised in CCS, Paragraphs 4-20

Mr Wigney SC submitted that evidence summarised in paragraphs 4-20 CCS ought not be admitted. He noted that there is no dispute that the Admerex shares issued to Barat Advisory were acquired on 30 April 2004 for a consideration of four cents per share (CCS, paragraph 24). Accordingly, he submits that the complex circumstances in which Barat Advisory acquired this parcel of shares for a consideration of four cents per share is not relevant to either of the counts on the indictment.

The Accused submits that the evidence in these paragraphs could not rationally affect (directly or indirectly) the assessment of the probability of the existence of any fact in issue in the proceedings for the purpose of s.55, and was therefore not relevant and not admissible under s.56(2) Evidence Act 1995 . Emphasis was placed upon the word “rationally” in s.55(1) of the Act, with it being contended that the Crown must be able to point to a process of reasoning by which the information in question could affect the jury’s assessment of the probability of the existence of a fact in issue at the trial.

In the alternative, Mr Wigney SC submitted that if the evidence in these paragraphs is relevant, it is only marginally so and its probative value is very slight so that it ought be excluded under s.135 or s.137 Evidence Act 1995 . With respect to the danger of unfair prejudice, it was submitted that there is a risk that the jury may misuse the evidence in some unfair way ( Papakosmas v The Queen at [91]) in that a jury is likely to consider, unfairly and incorrectly, that the acquisition of the shares (following as it did the acquisition of an assignment of significant corporate debt), involved some shady or sharp corporate practices. The Accused submitted that this would be an unfair misuse of the evidence.

It was submitted as well for the Accused that time would be wasted in the adducing of this evidence. It was submitted that the acquisition of the shares by Barat Advisory, and the events that preceded the acquisition (relating to the acquisition and assignment of the debts) was but one part of a very complex corporate reconstruction. To avoid any misleading or unfair inferences that might be drawn from the circumstances of the acquisition, the Accused would be compelled to cause to be adduced a good deal of evidence relating to the corporate restructure, so that the share acquisition could be properly seen in context. It was submitted that this will increase the undue waste of time caused by the adducing of the evidence.

The Crown submitted that the material in paragraphs 4-20 CCS was relevant for reasons other than merely the value of the Admerex shares when issued to Barat Advisory on 30 April 2004. The Crown submitted that it is an important part of the prosecution case to establish the circumstances in which the Admerex shares came to be owned by Barat Advisory, and a potential source of significant profit to the Accused, which would have been eroded by a liability to pay capital gains tax on the disposal of those shares. The Crown submitted that it is also relevant to understand the circumstances which led to the Admerex shares being issued to Barat Advisory on 30 April 2004 because they cast light on the relationship between the Accused and Clairmont Holdings and Finance. The Crown submitted further that it is relevant that Barat Advisory did not pay Clairmont Holdings and Finance for its acquisition in November 2003 of the debt, in the sum of $2,236,459.00, which was later satisfied by the issue to Barat Advisory of the Admerex shares on 30 April 2004. This is relevant because it gave the Accused additional incentive to avoid capital gains tax, in the expectation that the ATO may assert that the real cost base of the asset was zero.

On this basis, the Crown seeks to rely upon the evidence summarised in paragraphs 4-20 CCS to establish that the Accused has achieved a position whereby Barat Advisory owned assets in the form of the Admerex shares which he could not liquidate without substantially diminishing the cash proceeds from the disposal of the shares by payment of capital gains tax, and that the Stichting Group arrangement subsequently put in place by the Accused was intended to avoid that happening.

The present ruling is sought by reference to nominated paragraphs in the CCS only. The test of relevance in ss.55-56 Evidence Act 1995 is not a demanding one. Of course, it is necessary to consider whether the tendered evidence could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings.

The Crown case against the Accused involves a series of events over a period of time concerning the Accused, a number of corporations, share movements and the transfer of funds. The matters relied upon by the Crown (at [327]-[328] above) satisfy me that evidence of matters referred to in paragraphs 4-20 CCS could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings. I am persuaded that the evidence of those matters is relevant.

With respect to s.135 Evidence Act 1995 , the Court is informed that certain facts are not in issue (and thus should not absorb extensive court time) but that elaborate evidence may be required to explain these matters if the evidence is admitted. It may be that the adducing of evidence on this aspect can be narrowed by discussions and agreements between the parties concerning the factual matters which the Accused seeks to adduce in this regard. In any event, I am not persuaded that the evidence of matters contained in paragraphs 4-20 CCS ought be excluded under s.135 of the Act. No basis has been demonstrated for exclusion of this evidence under s.137 Evidence Act 1995 .

I decline to exclude evidence of matters summarised in paragraphs 4-20 CCS. Evidence Summarised in CCS, Paragraphs 67-70, 72, 76, 80-83, 87

The objection by the Accused to the second group of paragraphs in the CCS is based upon the suggested potential unfair misuse and prejudice, the potential for the evidence to mislead and confuse, and the undue waste of time that would result from this evidence.

These paragraphs relate to the opening of Account 6009 in the name of Admerex (Ireland) Limited at SwissFirst and the beliefs of Mr Goodall in relation to this account. In addressing the objection to these paragraphs, Mr Wigney SC submitted that it is important to consider the factual context and, in particular, what facts are not in dispute in relation to this evidence. In short, Mr Wigney SC submitted that it is the Crown case, which is not disputed, that: (a) the account opening forms that were acted upon by SwissFirst to open the account were submitted by Ms Harley, a solicitor acting for Admerex (Ireland) Limited; (b) they nominated the Accused and Mr Meisterhans, both directors of Admerex (Ireland) Limited, as the signatories (CCS, paragraph 79); (c) the transaction between SwissFirst and Admerex (Ireland) Limited was the reason the account was opened required five million Temenos shares to be transferred to SwissFirst with SwissFirst to become the owner of these shares (CCS, paragraph 64); (d) Mr Goodall gave instructions to transfer these shares to SwissFirst (CCS, paragraphs 71, 75); (e) the shares were deposited not into Account 6009, but into Account No. 7900 and the Accused was not a signatory on that account (CCS, paragraph 77); (f) the agreement pursuant to which some of the shares were subsequently transferred out of Account No. 7900 was agreed to by Mr Goodall (CCS, paragraph 88).

It is submitted for the Accused that although these facts are not in dispute, the Crown proposes to call lengthy, complex and disputed evidence about the preparation of earlier account opening documents that nominated Mr Goodall as a signatory, but which were rejected by SwissFirst because Mr Goodall was not an officer of Admerex (Ireland) Limited (CCS, paragraph 72); Mr Goodall’s belief about the account and the relevance of this to his willingness to transfer five million Temenos shares to SwissFirst as part of the transaction between SwissFirst and Admerex (Ireland) Limited; and his willingness to agree to later transfers of these shares (CCS, paragraphs 67,87). The Crown also proposes to call evidence about steps taken by Mr Goodall in relation to Account 6009 some considerable time after the events relevant to the charges (CCS, paragraphs 80-83).

It was submitted for the Accused that the Crown’s intended reliance upon this evidence involved “wounding without striking” . With respect to the Crown’s reasons for seeking to adduce this evidence, the Accused submits that they have no substance and demonstrate the inherent risk of this evidence being unfairly and incorrectly used against the Accused.

Even if the Court found the evidence to be relevant, it was submitted that the probative value of the evidence would at best be very limited and would be outweighed by the danger of unfair prejudice to the Accused, the danger that the evidence will be misleading and confusing and the danger that the evidence will cause or result in undue waste of time.

The Crown submitted that this evidence is relevant and ought be admitted. It is said that the evidence in relation to SwissFirst Account 6009 is relevant to explain the events which led to the release by SwissFirst of two million of Mr Goodall’s Temenos shares, and how the Accused was able to arrange for one million of those Temenos shares to be exchanged for the 48 million Admerex shares and deposited to the credit of the Challinor Equities SwissFirst account on or about 3 February 2005 without any signed authority from Mr Goodall. The Crown contends that it was Mr Goodall’s understanding that he was the sole signatory to SwissFirst Account 6009 and that this is relevant to the circumstances in which the shares were disposed of, and to explain how the Accused was able to arrange for the transfer of one million of Mr Goodall’s Temenos shares from SwissFirst to the Challinor Equities SwissFirst account. It is also said to be relevant to explain why Mr Goodall did not think it necessary to take any immediate action to stop the Accused from proceeding with the exchange of the 48 million Admerex shares for one million of his Temenos shares.

Upon these bases, the Crown intends to lead evidence to the effect that, as part of the proposed capital raising transaction, Mr Goodall agreed to provide five million of his Temenos shares in favour of SwissFirst on the understanding that he would be the sole signatory to the account in which those shares would be held. This would involve evidence from Mr Goodall and Ms Harley and, the Crown submits, is not misleading or confusing and remains open to challenge in cross-examination by the Accused.

The Crown makes clear that it does not allege that the dealings relating to the opening of SwissFirst Account 6009, and in particular the change to the signatory details, involved some impropriety or dishonesty on the part of the Accused. In these circumstances, the Crown proposed at paragraphs 115-116 of the Crown written submissions dated 9 July 2010 a number of steps which, if agreed between the parties, would allow the prosecution to proceed without tendering evidence summarised at paragraphs 69-70, 72, 76 and 80 CCS.

I approach this relevance objection keeping in mind the relevant statutory test and the nature of the issues in the proceedings. Having considered the competing submissions, I am satisfied that evidence on this topic is relevant to the issues in the trial for the reasons advanced by the Crown (at [338]-[339] above). Of course, the test of relevance does not require that each piece of evidence be critical and central to the prosecution case. In a case such as this where there is a complicated series of events alleged over an extended period of time involving different human and corporate participants, then there may be events which are of less significance, but are necessarily relevant to the issues in the trial, either directly or indirectly. I am satisfied that evidence on this topic is relevant.

Having reached that point, I note that the Crown has proposed a way forward which may shorten the evidence on these issues and that the Accused will consider the Crown’s proposal if the evidence is found to be relevant. Having so found, I will proceed upon the basis that the parties will give sensible consideration to this topic with a view to facilitating the trial process. Conclusion

In summary, I have reached the following conclusions with respect to the issues raised by the Accused’s Further Amended Notice of Motion: (a) I am not satisfied that the prosecution of the Accused on the present indictment, containing two counts, constitutes an abuse of process and I decline to permanently stay the prosecution on that indictment; (b) I decline to admit as an exhibit at trial the report dated 3 June 2010 of Shaun Evan Mark - the Crown will have an opportunity to consider whether it seeks to adduce evidence from Mr Mark in accordance with the matters referred to in this judgment; (c) I decline to exclude the evidence contained in the affidavits of Mr Langeveld, Mr Pfammetter and Mr Stemberger; (d) I decline to exclude the foreign business records to which objection has been taken; (e) I decline to direct the Crown to call as witnesses any, or all, of the persons specified in the defence request; (f) I am satisfied that evidence referred to in paragraph 7(a) and (c) of the Further Amended Notice of Motion is relevant and admissible for the purposes of s.55 and s.56 Evidence Act 1995 and I decline to exclude that evidence under s.135 or s.137 Evidence Act 1995 .

The parties will have an opportunity over the next few days to consider this judgment, and its impact upon the trial fixed to commence on 18 October 2010. I will keep firmly in mind the indications from the parties that appropriate procedures ought be utilised to ensure the effective and continuous use of court time with a jury once the trial commences. I will seek to discharge my duty as the trial Judge to ensure a trial that is fair to the Accused and the Crown, and to take steps which assist the jury to receive, in an understandable form, evidence which bears upon the jury’s fact-finding functions for the purpose of returning verdicts.

There is considerable scope in this case for proper and effective use of summaries under s.50 Evidence Act 1995 , and charts and chronologies which will assist the jury at trial. It may be expected that a chronology will be provided to the jury as part of my summing up, and that counsel should be giving consideration to the content of a chronology in advance of the commencement of the trial.

I will list the matter for further pretrial hearing in the near future to allow an assessment of matters which require consideration and, if necessary, determination by me before trial.

I make the following orders: (a) I refuse the application by the Accused for a permanent stay of the prosecution on the present indictment; (b) I decline to admit into evidence the report dated 3 June 2010 of Shaun Evan Mark, but will hear the Crown further with respect to evidence of Mr Mark which the Crown seeks to tender; (c) I decline to exclude from evidence any part of the affidavit of Wim Langeveld sworn 20 November 2009, the affidavit of Claudio Pfammetter sworn 9 December 2009 or the affidavit of Vladimir Stemberger sworn 21 January 2010; (d) I decline to exclude from evidence any of the documents tendered by the Crown under the Foreign Evidence Act 1994 (Cth) ; (e) I decline to direct the Crown to call as witnesses any of the persons specified by the Accused in notices issued for this purpose; (f) I am satisfied that evidence identified in paragraphs 7(a) and (c) of the Further Amended Notice of Motion is admissible under s.55 and s.56 Evidence Act 1995 and I decline to exclude that evidence under s.135 or s.137 Evidence Act 1995.

I will hear the parties concerning a suitable date next week when the matter will come before me again to consider what further pretrial steps need to be taken.