Cranston v R

1. [1]

   JOHNSON J: By Notice of Application for Leave to Appeal filed on 10 June 2020, the Applicant, Adam Cranston, applied for an extension of time to seek leave to appeal from an interlocutory order made by Beech-Jones J on 1 May 2020 dismissing his application to stay criminal proceedings in accordance with the principles in Dietrich v The Queen (1992) 177 CLR 292; [1992] HCA 57 (“Dietrich”): R v Cranston [2020] NSWSC 469.

2. [2]

   At the conclusion of the hearing before this Court on 22 June 2020, the Court made the following orders:

3. [3]

   The Court indicated that reasons for these orders would be published as soon as reasonably practicable. This judgment contains my reasons for the orders made at the conclusion of the hearing.

The Applicant’s Adjournment Application

1. [4]

   At the commencement of the hearing on 22 June 2020, Mr Ayache, solicitor, appeared for the Applicant and made an application that this hearing be adjourned until a date in early July 2020 to allow senior counsel to appear for the Applicant before this Court. The Crown opposed the adjournment application.

2. [5]

   The Court refused the adjournment application and indicated that reasons for that decision would be included in the judgment on the appeal.

3. [6]

   Several factors operated against the adjournment of the hearing before this Court.

4. [7]

   The s.5F appeal had been filed on 10 June 2020 with respect to the decision of the primary Judge delivered on 1 May 2020. The Applicant’s trial is presently fixed to commence on 10 August 2020 (together with three co-accused) with an estimate of four months.

5. [8]

   The Court was given no advance notice that an adjournment application was to be made. Efforts are made to list s.5F appeals before this Court urgently. Usually, the subject matter of a s.5F appeal requires an early hearing and determination. The present case required an early hearing and a special fixture was arranged for the appeal to be heard on 22 June 2020.

6. [9]

   It is the expectation of the Court that such a hearing will proceed and that the parties will prepare accordingly. Certainly, if an adjournment of such a special fixture is to be sought, then prompt notification should be given to the Court. That approach would allow the Court to enquire as to the availability of another date if the hearing was adjourned.

7. [10]

   By the time the application was made, the Court was sitting to hear the appeal and the members of the Court had read the materials. If the matter had been adjourned, it would have been necessary for a differently constituted Court to be arranged.

8. [11]

   Mr Ayache informed the Court that he had been approached for the first time by the Applicant on 19 June 2020, the last working day before the scheduled hearing of the appeal. No explanation was provided as to why the Applicant had left it until then to approach a lawyer with the view to being represented on the appeal.

9. [12]

   A single ground of appeal was raised on the application which had been addressed in written submissions prepared by the Applicant and by the Crown. The issues raised by the appeal were within a relatively narrow compass.

10. [13]

    In these circumstances, the Court considered that it was not appropriate to adjourn the hearing to a later date.

11. [14]

    As it happens, Mr Ayache then appeared for the Applicant at the hearing and assisted the Court with focused submissions in support of the ground of appeal. The interests of the Applicant were protected appropriately at the hearing of the s.5F appeal.

Extension of Time Required

1. [15]

   Rule 5B Criminal Appeal Rules (NSW) required the Applicant to give notice of his application for leave to appeal within 14 days of the date of the judgment or order (1 May 2020) or within such extended time as may be allowed by the Court.

2. [16]

   The Applicant was represented by counsel at the hearing before Beech-Jones J, but was unrepresented for the purpose of the s.5F appeal until he retained Mr Ayache on 19 June 2020. The Applicant stated in his filed application that he was unaware of the time limit and relied upon his unrepresented status in support of his application for an extension of time.

3. [17]

   The Crown did not oppose the grant of an extension of time.

4. [18]

   An extension of time was granted to the Applicant.

Leave to Appeal Under s.5F Criminal Appeal Act 1912 (NSW)

1. [19]

   The Applicant required leave to appeal under s.5F(3) Criminal Appeal Act 1912 (NSW). Leave will not be granted unless the decision at first instance is attended by sufficient doubt as to warrant the matter being argued on appeal (Steffan v R (1993) 30 NSWLR 633 at 644-645) or if the interests of justice warrant a grant of leave (R v Matovski (1989) 15 NSWLR 720 at 723).

2. [20]

   To succeed on the appeal, it is necessary for the Applicant to establish error in accordance with the principles in House v The King (1936) 55 CLR 499; [1936] HCA 40: Calleija v R (2012) 233 A Crim R 391; [2012] NSWCCA 37 at [6]; Munshizada v R [2020] NSWCCA 9 at [41].

The Applicant’s Criminal Trial

1. [21]

   The Applicant is charged with conspiring to dishonestly cause a loss to a third person, namely the Commonwealth, contrary to s.135.4(3) Criminal Code (Cth) (“the Code”) and conspiring to deal with the proceeds of crime in a sum greater than $1 million contrary to ss.11.5(1) and 400.3(1) of the Code.

2. [22]

   The Applicant has pleaded not guilty to the charges and his trial, along with three alleged co-conspirators, is listed to commence before Payne JA and a jury on 10 August 2020 with an estimate of four months.

Ground of Appeal

1. [23]

   The Applicant relies upon a single ground of appeal which asserts that “The primary judge erred in finding that I was not indigent”.

The Judgment Under Appeal

1. [24]

   Beech-Jones J set out the principles to be applied on a Dietrich application, including the principles governing the test for indigence, at [9]-[14]:

2. [25]

   His Honour considered a range of other matters bearing upon the Dietrich application before turning to the particular area which included the challenged finding concerning indigence.

3. [26]

   This finding related to the circumstances in which a company called Permaform International Pty Limited (“Permaform International”) was said to have agreed to assume liability for up to $200,000.00 of the Applicant’s legal expenses. The Applicant and Robert Rech made affidavits and gave evidence at the hearing before the primary Judge. Mr Rech is a director of Permaform International and an associated company, Permaform Australia Pty Limited. The Applicant is employed as Permaform International’s general manager.

4. [27]

   It is appropriate to set out those parts of the judgment of Beech-Jones J in which his Honour considered evidence concerning the Applicant, Mr Rech and Permaform International. His Honour said at [70]-[79]:

5. [28]

   His Honour then made findings which are challenged by the Applicant in this Court. His Honour said at [80]-[81]:

6. [29]

   His Honour noted three further matters at [83]-[86] (my emphasis):

Submissions on the s.5F Appeal

1. [30]

   Mr Ayache submitted that the primary Judge had erred in finding that the Applicant was not indigent. He submitted that there was no evidence before his Honour to support the conclusion reached at [81] of the judgment. It was submitted that the evidence pointed to a contrary conclusion so that a finding that the Applicant was indigent should have been made.

2. [31]

   Mr Ayache submitted that error was observable in the primary Judge’s reasoning upon the basis that a rejection of the evidence of the Applicant and Mr Rech (as reflected in [80]-[81] of the judgment) did not permit the Court to make a further finding that there was “the very realistic likelihood of [the Applicant] having ‘parked’ funds in various businesses either before or after his arrest” (at [81]). In effect, it was submitted that the rejection of the evidence of the Applicant and Mr Rech did not permit a further adverse finding of the type made by the primary Judge.

3. [32]

   It was submitted for the Applicant that the arrangement between the Applicant and Mr Rech may have been unorthodox, but that such a characterisation of a business arrangement fell far short of establishing a sham or false arrangement between the two men.

4. [33]

   It was submitted that, under cross-examination by the Crown, the Applicant had said that he had no idea what happened to what the Crown alleged was an untraced quantum of $47 million and he denied having access to any of that sum (AB83-84). It was submitted for the Applicant that this is where the evidence ended and that there was no warrant for the primary Judge to make the impugned finding.

5. [34]

   Mr Ayache submitted that the Court should apply the test of indigence noted by Adamson J in R v Macdonald (No. 4) [2016] NSWSC 486 at [95] that, if the value of an accused person’s assets and income falls well short of what is required to conduct a trial, he or she is to be regarded as indigent for the purposes of a Dietrich application. It was submitted that this test was made out in the present case so that the primary Judge erred in holding that the Applicant had not demonstrated that he was indigent.

6. [35]

   The Crown submitted that it was open to the primary Judge to reach the conclusions expressed on the evidence before him. The Applicant was unable to give a credible explanation of a number of aspects of the Permaform International arrangement.

7. [36]

   The Crown submitted that it was open to the primary Judge to conclude, based on the Applicant’s failure to make full and frank disclosure, that the Applicant had not discharged the onus to prove indigence. It was submitted that any effort by an accused person to establish that he or she is indigent will be undermined if full financial disclosure is not forthcoming: R v Macdonald (No. 4) at [104], [111].

8. [37]

   It was submitted by the Crown that it was open to the primary Judge to dismiss the stay application because he found the evidence in relation to the Permaform International gift to be vague, unconvincing and inherently implausible.

9. [38]

   The Crown submitted that the Applicant’s credibility had been central to the determination of the Dietrich application as borne out by written submissions made for the Crown on credibility issues (AB24-29), which included the submission that the Court should have little confidence that the Applicant had made full and frank financial disclosure to the Court on the Dietrich application.

10. [39]

    Further, the Crown pointed to the evidence before the primary Judge where it had been put squarely to the Applicant that the arrangement he had made with Mr Rech was to use his own money and disguise it, a proposition which was denied by the Applicant (AB103.28). The Crown asked Mr Rech in cross-examination whether the $200,000.00 agreement was “a sham agreement in order to allow Mr Cranston to recycle his own funds”, a proposition denied by Mr Rech (AB129.34).

11. [40]

    In addition, the Crown cross-examined the Applicant by reference to calculations contained in the Crown Case Statement which suggested that there was a sum of $47 million unaccounted for, with the Applicant stating that he had no idea what happened to the $47 million and with him denying that he had access to any of that sum (AB83-84).

12. [41]

    The Crown submitted that issues concerning the credibility of the accounts of the Applicant and Mr Rech were raised squarely and put in issue before the primary Judge and that the findings made by his Honour were open on the evidence adduced at that hearing.

13. [42]

    With respect to the primary Judge’s additional finding (at [81]), which the Crown submitted was not the basis of the decision but was expressed (in his Honour’s words) “to the extent that it is necessary”, the Crown submitted that it was open to the primary Judge to be satisfied on the balance of probabilities that the funds provided by Permaform International were “originally contributed by or connected to the applicant in some way”. The Crown submitted that this inference was available, on the totality of the evidence before the Court.

14. [43]

    The Crown submitted, as well, that the Court should keep in mind that what the Applicant was seeking, in effect, would operate as a permanent stay of his criminal trial. It was submitted that the remedy sought is an exceptional one which required the demonstration of unacceptable injustice or unfairness as to which the Applicant bears a heavy onus: TS v R [2014] NSWCCA 174 at [1], [64].

15. [44]

    It was submitted that no error had been demonstrated on the part of the primary Judge.

16. [45]

    The Crown submitted that the decision of the primary Judge is not attended by sufficient doubt nor did the interests of justice warrant a grant of leave to appeal and that, in any event, the appeal should be dismissed.

Decision

1. [46]

   In a careful judgment, the primary Judge referred to the principles to be applied and addressed the documentary and oral evidence which bore upon the Dietrich application, including the question as to whether the Applicant had established that he was indigent. His Honour had the advantage of seeing the Applicant and Mr Rech give evidence by audio-visual link.

2. [47]

   No challenge was made to the primary Judge’s identification of the principles to be applied on a Dietrich application. The test of indigence advanced by the Applicant in this Court was that applied by the primary Judge by reference to R v Macdonald (No. 4) at [95] (see [24] above).

3. [48]

   The Applicant bore the onus of establishing that he was indigent as a necessary condition for grant of the relief which he sought.

4. [49]

   The primary Judge was correct to observe that the crucial matter on the application was the Applicant’s “lack of proper disclosure” (at [83]). His Honour’s finding in this respect did not relate to a peripheral issue. The Applicant bore the onus of proving that he was indigent with the discharge of that onus clearly requiring a complete and honest account on issues which bore upon that element.

5. [50]

   It was well open to the primary Judge to regard the highly unusual arrangement between the Applicant and Mr Rech as extending beyond a type of unorthodox commercial arrangement. As his Honour observed, Mr Rech was prepared to take the “unprecedented step” of funding the Applicant’s legal expenses even though he had just met the Applicant and knew little of him apart from the fact that he was recommended by a firm of accountants and was facing what were clearly serious criminal charges.

6. [51]

   The Applicant’s written submission in this Court asserted that “every dollar from the alleged fraud is traced” and that “his Honour should have found that it was impossible” for the Applicant to have “secretly ‘parked’ funds in various businesses” (AB3, paragraph 18). This was not the case. The evidence adduced at the hearing did not demonstrate that all funds from the alleged fraud had been traced. Rather, the Crown Case Statement contained calculations culminating in a particularised allegation that there was a shortfall of some $47 million, the sum referred to in cross-examination of the Applicant (see [33], [40] above).

7. [52]

   Fairly read, his Honour’s judgment indicates that he was not satisfied that all funds had been accounted for by the Applicant. His Honour did not accept that the Applicant had given a truthful account concerning his financial affairs, nor was the evidence of Mr Rech accepted as being truthful in a key area. His Honour concluded that there was “the very realistic likelihood” of the Applicant “having ‘parked’ funds in various businesses either before or after his arrest”. These various findings were interrelated and all bore upon the critical question of whether indigence had been proved by the Applicant.

8. [53]

   In the end, it fell to the Applicant to demonstrate to the civil standard that he was indigent and he failed to discharge this onus.

9. [54]

   In R v Cox [1999] NSWCCA 229, an appeal was brought to this Court from the refusal of a Dietrich application where the primary Judge was not satisfied that the accused person was indigent. In the course of refusing leave to appeal, Sperling J (Levine J and McInerney AJ agreeing) said at [8]:

10. [55]

    In my view, a similar approach should be taken to the determination of the present application. It was open to the primary Judge to make the challenged finding on the evidence adduced at the hearing. The Applicant has failed to demonstrate error in accordance with the principles in House v The King.

Grant of Leave to Appeal

1. [56]

   Having reached this conclusion, it is clear that the Applicant has failed in his appeal under s.5F Criminal Appeal Act 1912 (NSW). In other decisions (such as R v Cox), the Court has refused leave to appeal where such a conclusion has been reached. In the present case, I was satisfied that leave to appeal should be granted although the appeal ought be dismissed.

2. [57]

   I was satisfied that it was in the interests of justice to grant leave in this case: R v Matovski at 723.

3. [58]

   The Dietrich principle is based on, and derives from, an accused person’s right to a fair trial: State of New South Wales v Canellis (1994) 181 CLR 309 at 328; [1994] HCA 51.

4. [59]

   The Applicant is to stand trial for serious charges which raise complex issues of fact and law and which are punishable by maximum penalties of 10 years’ imprisonment and 25 years’ imprisonment. He is one of four accused persons who, subject to the determination of separate trial applications, is to proceed to trial on 10 August 2020 with a trial estimate of four months.

5. [60]

   The accused persons are charged with conspiracy and, in the ordinary course, it would be considered appropriate that they be tried jointly. The Court understands that at least two of the accused persons have indicated an intention to seek a separate trial from the Applicant, an application which would be strengthened if the Applicant is to be unrepresented at the trial.

6. [61]

   In describing the complexity of the Applicant’s forthcoming trial, the primary Judge was satisfied that the Applicant is not in a position to adequately conduct his own defence (at [21]).

7. [62]

   The primary Judge referred to efforts made by the Applicant to obtain legal aid or pro bono representation (at [34]-[42]). The Applicant has been refused legal aid for the purpose of the trial and the Legal Aid Review Committee has disallowed an appeal against that decision (in November 2019).

8. [63]

   In December 2019, the then solicitor for the Applicant made application to the Commonwealth Attorney General for an ex gratia payment for the purpose of funding the legal representation of the Applicant at trial. On 9 January 2020, the Attorney General’s Department responded on behalf of the Attorney General stating that it “is unlikely that an ex gratia payment would be available” (at [38]).

9. [64]

   On 16 March 2020, the then solicitor for the Applicant submitted an application for ex gratia funding to the Commonwealth Financial Assistance Office of the Attorney General’s Department on the Applicant’s behalf. As at 30 April 2020, no response had been provided to that application (at [40]).

10. [65]

    The primary Judge was satisfied that the Applicant had exhausted his prospects of obtaining pro bono representation or a grant of legal aid and was also satisfied that, absent a stay of his trial, he would not receive funding from the Commonwealth for his defence (at [42]).

11. [66]

    After considering the evidence concerning the likely cost of the Applicant’s defence at trial, his Honour estimated that, at a minimum and allowing for some disbursements, a privately funded defence of the Applicant would cost $800,000.00 (at [29]).

12. [67]

    At different points in his judgment, Beech-Jones J referred to the operation of the Proceeds of Crime Act 2002 (Cth) (“POC Act”). His Honour referred to restraining orders made under that Act which prevent use by the Applicant of any of his assets, but allow him to deal in (that is, earn) up to $5,000.00 plus GST per week (at [30]).

13. [68]

    His Honour noted (at [87]) that, unlike corresponding State provisions such as ss.10B(3), 16A and 16B Criminal Assets Recovery Act 1990 (NSW), the provisions of the POC Act do not enable the release of restrained or forfeited assets for the purposes of funding a person’s defence. On 16 January 2020, a representative of the Commissioner for the Australian Federal Police advised the then solicitor for the Applicant that the Commissioner would not consent to an application to vary the orders made under the POC Act (at [32]).

14. [69]

    In the concluding part of his judgment, Beech-Jones J made a number of observations concerning the scheme of the POC Act and its impact upon the Applicant’s legal representation for the purpose of the trial. His Honour noted that the scheme of that Act in not allowing for the release of monies for the payment of legal expenses “appears to have been a deliberate policy decision adopted when” the POC Act was enacted (at [88]).

15. [70]

    The present position with respect to the Applicant’s trial may be summarised as follows. Beech-Jones J has refused the Dietrich application after applying relevant principles and having regard to the evidence adduced at the hearing. This Court has dismissed the Applicant’s appeal from his Honour’s decision in circumstances where the findings were open to his Honour and the Applicant has failed to establish error.

16. [71]

    The likely next step is that the Applicant’s co-accused will proceed with an application for a separate trial from the Applicant if he is to be unrepresented at trial. If separate trials are ordered (and that is a matter for the trial Judge and not this Court), the prospect is that there will be two trials of significant length proceeding in the Supreme Court of New South Wales with the trial of the Applicant (if unrepresented) being affected by the disadvantages and problems which apply where a jury trial of an unrepresented accused person takes place, especially where the trial involves complex issues of fact and law.

17. [72]

    It was, of course, a matter for the Commonwealth Parliament to decide whether the POC Act should allow for funds to be made available for legal representation of an accused person in a manner seen in State confiscation legislation of a similar type. Without such a provision, there is the prospect that a well-resourced and legally represented Crown may face an unrepresented accused person at a trial of considerable complexity where (as here) the Court has declined to stay the prosecution because the Dietrich principles have not been satisfied.

18. [73]

    Considerations of this type bear upon the interests of justice in this case. These factors bore upon my decision to grant leave to appeal although the appeal was dismissed.

19. [74]

    The question whether the Applicant is to be represented at trial will be answered by reference to any step which the Applicant may take concerning representation and any discretionary assessment by Commonwealth officers concerning legal representation for the Applicant at the forthcoming trial.

Conclusion

1. [75]

   It was for these reasons that I joined in the making of the orders announced by the Court at the conclusion of the hearing on 22 June 2020.

2. [76]

   WILSON J: I am indebted to Johnson J for his judgment, with which I agree. My reasons for joining in the orders made by the Court on 22 June 2020 are those expressed by his Honour.

3. [77]

   I also share his Honour’s concerns, expressed at [59] and following, as to the potential consequences of the operation of the Proceeds of Crime Act 2002 (Cth).

4. [78]

   N ADAMS J: The judgment of Johnson J encapsulates my reasons for joining in the orders made on 22 June 2020. The question for determination by this court was whether error was disclosed in the judgment of Beech-Jones J. The finding of indigence was one on which judicial minds might reasonably have differed, but no error was established in relation to any of the findings made by his Honour. I also wish to add to the observations made by Johnson, Wilson and Beech-Jones JJ regarding the operation of the Proceeds of Crime Act 2002 (Cth) (“POCA”) as compared to the Criminal Assets Recovery Act 1990 (NSW). Mr Cranston would not be in a position to assert that he is indigent had his assets been seized under this corresponding NSW Act as, contrary to the POCA, it provides for the release of restrained or forfeited assets for the purposes of funding a person’s defence.