Bangaru v R

Ground one: Section 42 of the Extradition Act 1988 (Cth) (Counts 6 to 13) 7The appellant was extradited from the United States of America to face trial in New South Wales. Prior to his trial, the appellant applied to Lakatos DCJ to quash, inter alia, what ultimately became counts 6 to 13 of the indictment. He contended that his trial on those counts was contrary to s 42 of the Extradition Act 1998 (Cth). His Honour rejected the application. Ground one of the appeal repeats that contention before this Court. In summary, the appellant complains that he was extradited to face charges under former s 178A of the Crimes Act, whereas he was placed on trial for offences under former s 178BB. 8Section 42 of the Extradition Act is a formulation of the so-called "specialty rule" which requires a degree of correlation between the offences in which a person's extradition is sought from the extraditing country, and the offences in respect of which they are to be tried in the receiving country. It provides: "Where an extraditable person in relation to Australia is surrendered to Australia by a country (other than New Zealand), the person shall not, unless he or she has left, or has had the opportunity of leaving, Australia or, in a case where the person was surrendered to Australia for a limited period, has been returned to the country: (a) be detained or tried in Australia for any offence that is alleged to have been committed, or was committed, before the surrender of the person, other than: (i) any offence in respect of which the person was surrendered or any other offence (being an offence for which the penalty is the same or is a shorter maximum period of imprisonment or other deprivation of liberty) of which the person could be convicted on proof of the conduct constituting any such offence; ..." (emphasis added) 9In addition, s 10(2) of the Extradition Act provides: "A reference in this Act to conduct constituting an offence is a reference to the acts or omissions, or both, by virtue of which the offence has, or is alleged to have, been committed." 10Section 42(a)(i) enables a person to be tried in Australia for an offence in respect of which they were surrendered by the United States of America. The section also permits the extradited person to be tried for any other offence in respect of which they could have been convicted on proof of "the conduct constituting any such offence" so long as that other offence does not carry a longer maximum period of deprivation of liberty. 11The High Court considered s 42 in Truong v R [2004] HCA 10; (2004) 223 CLR 122. The appellant in Truong was extradited from the United Kingdom. He had been surrendered to Australia on charges of conspiracy to kidnap and conspiracy to murder, but was later tried and convicted in Victoria on the substantive charges of murder and kidnapping. It was contended that his trial was conducted contrary to s 42. The conspiracies that the appellant had been accused of participating in as described in the material placed before the British court went beyond mere planning for the offences and alleged that the proposed target of the conspiracies was in fact kidnapped and then murdered. 12By a majority, the High Court held that Mr Truong's trial did not contravene s 42 (per Gleeson CJ, McHugh, Hayne and Heydon JJ; contra Gummow, Kirby and Callinan JJ). Gleeson CJ, McHugh and Heydon JJ held that the comparison exercise contemplated by s 42(a)(i) between the offence in respect of which a person was surrendered and the offence in respect of which they were tried was one that went beyond a mere consideration of the elements of each offence (Truong at [29]). It was a process that was to be conducted "at a level of abstraction between a formal statement of the elements of the offence, on the one hand, and an account of the evidence relied on to prove the relevant conduct, on the other". That process had to be undertaken "by reference to the actual conduct alleged against the person in question" (at [29]). Thus, in Truong's case, as the alleged conspiracies were said to have involved the continued performance of the agreement up to and including the kidnapping and killing of the victim, it followed that the conduct constituting the offence in respect of which he was surrendered embraced the conduct the subject of the charges he was tried for, namely murder and kidnapping (Truong at [37]). 13To similar effect, Hayne J held that what was required was consideration of what had been alleged against the appellant in support of his application in the United Kingdom for his extradition to Australia. The "material advanced in support of the request for extradition" not only alleged that he conspired to kidnap and murder the victim, but also contended that the conspiracy had been carried into effect (Truong at [196]). Accordingly, the conduct alleged against him was such that it could have led to his conviction on the substantive charges of murder and kidnapping (Truong at [196]; contra, Gummow and Callinan JJ at [89] and Kirby J at [127]). 14As already noted, what ultimately became counts 6 to 13 on the appellant's indictment charged him with offences under former s 178BA. The gravamen of what each of these counts alleged is illustrated by count 6 which concerned the investors Stephen and Jane Fassos: "Between about January 2003 and May 2003, by a deception, [the appellant] did dishonestly obtain from Stephen and Jane Fassos a financial advantage for Colosseum Investment Holdings Pty Limited, namely funds of approximately $262,501 in that he did represent that the funds provided by Stephen and Jane Fassos would be applied to a trust or joint venture between them, Kovelan Bangaru and a maximum of two other investors, to develop a particular property at Seaforth, which representation was misleading and deceptive because the funds were not to be applied for the specific purposes of any such trust or joint venture." (emphasis added) 15For present purposes the relevant part of s 178BA and these counts is the allegation that the appellant obtained a benefit in the form of an investment by reason of an alleged "deception" on his part as to how the funds invested would be utilised. 16Consistent with the majority decision in Truong, the extradition request material put before the United States District Court for the Central District of California (the "American Court") was tendered before his Honour on the application to quash counts 6-13. The material included the arrest warrants issued for various offences alleged against the appellant, an affidavit of an "investigator", being Timothy John Kelly and an affidavit of a "prosecutor" being Ms Joanne Philipson, a solicitor employed by the Director of Public Prosecutions for the Commonwealth. It is necessary to compare the facts alleged in the material presented to the American Court with count 6 on the indictment to determine whether the latter is an "other offence" on which the appellant "could [have been] convicted" on proof of the conduct constituting "the offences in respect of which he was surrendered" so as to satisfy s 42(a)(i) of the Extradition Act. 17The offence corresponding to count 6 was specified in warrant A14 placed before the American Court. This was described as an offence under former s 178A of the Crimes Act, the terms of which are reflected in the charge in the arrest warrant, as follows: "Between about 1 January 2003 and 7 May 2003 [the appellant] received money, namely the sum of AUD$262,501.00 from Stephen and Jane Fassos upon terms requiring him to account for the whole of such money, namely for the purpose of developing and constructing a property at 7A Battle Boulevard, Seaforth NSW, which money he fraudulently misappropriated in violation of the terms he received the money in and he caused the money to be deposited into the account of Colosseum Investments Holdings Pty Ltd and to be dissipated and not expended on developing and constructing the property at 7A Battle Boulevard, Seaforth NSW." (emphasis added) 18Mr Kelly's affidavit addressed the facts surrounding the offence the subject of warrant A14. He described the appellant as having "induced" Mr and Mrs Fassos to "invest in a "Streetwise joint venture property development". He recounted the applicant making a number of oral representations to Mr Fassos, including that "the property we have in mind for you is Seaforth" and "a trust will be set up for that specific project. I will be putting my own money into this project. It will be me, you and a maximum of two other investors". Mr Kelly noted that none of the $262,501.00 invested by Mr and Mrs Fassos was used in the Seaforth development. 19Ms Philipson's affidavit recorded that, according to Mr Fassos, he and his wife were "induced" to invest in a "Streetwise joint venture property development" on the "understanding" that the money would be invested in a joint venture. In the concluding part of her affidavit, she addressed this count, and all the counts the subject of this ground of appeal. She stated: "121. Between April 2003 and July 2003 Bangaru (and his agents at Colosseum) induced a number of persons to invest in Streetwise property developments by making false representations to them as to how their funds were to be invested. ... 123. In relation to warrants A9-A14 [i.e. counts 9, 11, 12, 13, 10 and 6 respectively] those investor funds were paid into the overdraft facility that Colosseum Investment Holdings Pty Ltd had with the NAB to ensure that the overdraft limit was not exceeded, rather than being invested in a specific property development which Bangaru represented they would be invested in. ... 125. In relation to warrants A15 and A16 [i.e. counts 7 and 8], Bangaru represented to those investors that their funds were to be invested in a joint venture building project at 7A Battle Boulevard, Seaforth. He represented to each investor that the existing residence would be purchased, the house demolished, a duplex would be constructed on the site, and the profit would be shared between Streetwise and each investor. Bangaru fraudulently misappropriated the investor funds as none of the money invested was directed to the Seaforth project as represented by Bangaru." (emphasis added) 20The appellant's written submissions in respect of this ground contended, inter alia, that it was "not alleged in the investigator's affidavit or the prosecutor's affidavit ... that the appellant lied to the investors at the point of receiving the monies - but rather, that after receipt of the monies, the appellant did not use those monies appropriately". This is incorrect. The prosecutor's (i.e. Ms Philipson's) affidavit expressly alleged that the appellant "induced" investors to invest by reason of various "false representations". 21At the time the extradition request was made to the American Court, the representations said to have been made by the appellant were relied upon as identifying the "terms" upon which money was collected and later misappropriated for the purposes of charges that had been formulated by reference to s 178A of the Crimes Act. Counts 6 to 13 of the indictment relied upon these representations as the foundation for the allegation that monies were obtained by "deception". The nature of the conduct alleged did not alter. As I have stated, the material presented in the extradition request expressly alleged that the appellant had uttered representations which were false at the time that they were made. Moreover, given that the allegations related to what was proposed to occur with the funds in the future, the suggestion that they were "false" necessarily implied that he knew they would not be so applied; ie that they were false to his knowledge. 22It follows that the relevant conduct said to constitute the offence under s 178A in warrant A14 in respect of which he was surrendered, was conduct that he could have been convicted of on count 6 of the indictment for the purposes of s 42(a)(i) of the Extradition Act. There was a difference between the charges that he was surrendered for and then later tried on. An important element of the former was the existence of a dishonest state of mind at the time he misappropriated the investors funds. The latter alleged a dishonest state of mind at the time he induced the investors to part with their funds. However Truong establishes that such differences are not determinative for the purposes of s 42(a)(i). Instead the conduct alleged in the material placed before the court of the surrendering country must be considered in order to identify the conduct alleged. In this case a consideration of that material confirms that the conduct alleged against the appellant was such that, if established, it could have supported his conviction on count 6. 23The same analysis is applicable to counts 7 to 13 of the indictment. The difference between the counts is addressed below in relation to ground seven, but for present purposes the only material differences concern the identity of the investor, the amount invested, the date of the deception, the identity of the property, and the precise form of the misleading representation that was made as to the manner in which the funds would be applied. The extracts from Ms Philipson's affidavit (set out above at [19]) make it clear that with each and every one of those counts an allegation of a false representation by the appellant to induce the investor to part with funds was included in the material in support of the extradition request provided to the American Court. This allegation formed part of the conduct constituting the offence for which the appellant was surrendered. It specified the "terms" on which the monies were received for the purposes of s 178A, and was thus an aspect of the conduct forming the basis for the allegation that there was a fraudulent misappropriation. It was also capable of supporting the allegation that the investors for each of those counts were induced to part with funds by reason of a false representation by the appellant. 24It follows from the above that his Honour was correct to reject the application to quash what became counts 6 to 13. If anything, in his reasons, his Honour was generous to the appellant in that his Honour resorted to drawing inferences from the extradition material as to what was alleged against the appellant (see O'Donoghue v Ireland [2009] FCAFC 184; 263 ALR 392 at [46]). There was no need to consider any such inferences other than perhaps whether the false representations that he was alleged to have made were false to his knowledge. In my view the conduct expressly alleged against the appellant sufficed. 25I reject ground one of the appeal.

Ground seven - Investor counts 6 to 13 - unsafe and unsatisfactory 102Ground six of the appeal complains that his Honour erred in allowing the evidence on each of counts 5 to 13 as "tendency evidence" on the other counts. I will defer consideration of that ground and address ground seven first. 103Ground seven of the appeal contends that the jury's verdict in respect of counts 6 to 13 on the indictment was unsafe and unsatisfactory. The appellant seeks to invoke that part of s 6(1) of the Criminal Appeal Act 1912 which enables this Court to intervene "if it is of the opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported having regard to the evidence" (see MFA v R [2002] HCA 53; 213 CLR 606 at [58]. He implicitly seeks a grant of leave under s 5(1)(b) to raise grounds of appeal involving questions of fact or questions of mixed law and fact (Rasic v R [2009] NSWCCA 202 at [12]). I would grant such leave. 104This ground requires this Court to "ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty" (M v R [1994] HCA 63; 181 CLR 487 at 493). In doing so this Court must undertake its own "independent assessment of the evidence both as to its sufficiency and its quality" (Morris v R [1987] HCA 50; 163 CLR 454 at 473). Thus it must consider any competing evidence to that presented by the Crown and weigh the conflicting evidence (SKA v R [2011] HCA 13; 243 CLR 400 at [24] per French CJ, Gummow and Kiefel JJ). 105In relation to the advantages enjoyed by the jury in hearing and observing witnesses compared to this Court in SKA at [13] French CJ, Gummow and Kiefel JJ stated: "The starting point in the application of s 6(1) is that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, and the jury has had the benefit of having seen and heard the witnesses. However, the joint judgment in M v The Queen [at 494] went on to say: 'In most cases a doubt experienced by an appellate court will be a doubt which a jury ought also to have experienced. It is only where a jury's advantage in seeing and hearing the evidence is capable of resolving a doubt experienced by a court of criminal appeal that the court may conclude that no miscarriage of justice occurred'." 106It follows that it is necessary to analyse each count and the evidence presented by the Crown and the appellant concerning that count in detail. However, I will describe in general terms the appellant's submissions in relation to this ground of appeal. 107With the possible exception of count 12, each of counts 6 to 13 had a common element, namely that the appellant made a specific representation to the investors that the money would be applied towards a specified purpose, being either a joint venture or a particular property development or construction project. This representation was said to amount to a deception in that it was not intended that the monies were to be so applied. The appellant's case at trial was that he had not made any such representation. As I will explain, his case was that the monies were received after he "sold the investors a share in a project which entitled the investor to a certain percentage share of the proceeds of the sale". He asserted that he and Streetwise were entitled to use the funds for their own purposes, they being the proceeds of a sale or a "buy in" price for the alleged percentage share of the proceeds of sale. 108The appellant submits that the verdicts on these counts were unsafe and unsatisfactory in this respect because, although some of the investors testified in chief that a representation amounting to that pleaded in the relevant counts on the indictment was made, he contends that none of them adhered to the representation when cross examined. He went further and said that some of them testified to the contrary and that "all of them conceded they were purchasing a share in the project". 109These propositions will be considered in the context of the evidence concerning each count. However, at the outset two points should be noted. 110First, contrary to the premise of these submissions, I do not accept that there is a necessary inconsistency between an investor being led to believe they were "purchasing" a share of profits in a development and that their funds would only be used to further or promote that development. For example, and by way of analogy, a person may subscribe for shares or units. In ordinary parlance, they might, if pressed in cross examination, agree that they "purchased" those shares or units but that would not be inconsistent with there being a reasonable expectation on the investor's part that the receiving company or the trustee would only apply their funds to promote that investment, consistent with the company or trustee's duties under the Corporations Act. Of course, the position would be different if the shares or units were purchased on an open market and they were being bought and sold between participants in that market. In that case, a purchaser could not have a realistic expectation that there were would be any restrictions on the vendor in dealing with the proceeds of sale. This directs attention to the precise context in which the relevant statements took place. 111In this case a critical component of the context for all bar one of the counts (count 12) was that what was being promoted was an investment in a "joint venture" for an ongoing project namely the residential development of a specific parcel of land. While the phrase "joint venture" may not have a settled common law meaning (United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; 157 CLR 1, at 10 per Mason, Brennan and Deane JJ), its repeated use in this case strongly suggests that the capital contributions of the investors would only be applied to the furtherance of that undertaking. This conclusion becomes overwhelming when the evidence is considered more closely. 112Second, the supposed inconsistency that the appellant points to was not taken up directly with any of the investor witnesses. With the possible exception of Mr O'Donnell, it was never suggested to the investor witnesses that they understood that they were purchasing a share of the profits of the relevant development with the consequence that the vendor was free to treat the money they paid for any purpose. Further, when the appellant gave evidence he denied a number of the conversations attributed to him to by those various investors and asserted that he said something different. This evidence was given even though, for the most part, the appellant's counsel did not challenge the investors' evidence, either by suggesting that the appellant did not make the statements they testified to, or by suggesting that the statements he did make were as he described in his later evidence in chief. 113It is not necessary to explore the extent, if any, of the application of the so called rule in Browne v Dunn (1893) 6 R 67 to the accused in a criminal trial nor what consequences follow for the appellant from any failure to comply with it (see MWJ v R [2005] HCA 74; (2005) 80 ALJR 329 at [18] to [19], [38] to [41]). It is only necessary to note that that in this case the jury did not have the benefit of hearing the response of a number of the investor witnesses to the suggestion that they were only purchasing a share of the profits in the relevant venture and that there were no limits placed on the money they contributed. The jury also did not have the benefit of hearing the response of a number of the investor witnesses to the appellant's version of the conversations that led to their investment. These were clearly matters relevant to the jury's assessment of their evidence and that of the appellant (MWJ at [19], per Gleeson CJ and Heydon J). 114This Court this does not have the benefit of considering the responses of the investor witnesses to those matters either. Consistent with MWJ at [19] that is a matter relevant to our assessment. It makes the task of the appellant in persuading this Court that it was not open to the jury to be satisfied beyond reasonable doubt that the accused was guilty of these counts that much harder. 115During argument Senior Counsel for the appellant nominated the strongest count (from the Crown's perspective) as being count 10 concerning Mr Falzon and the weakest as being count 7 concerning Mr and Mrs O'Donnell. In deference to that selection I will address those counts first although I do not share that assessment. In summarising the evidence concerning each count I will focus on that part of the evidence relevant to each count that relates to the point raised by the appellant in relation to this ground as summarised above in [107] to [108].

[1999] HCA 21

[1987] HCA 50

[1988] HCA 70

[1998] HCA 57

(2005) 80 ALJR 329

(1979) 23 SASR 161

(1992) 38 FCR 270

(2004) 223 CLR 122

(1936) 55 CLR 499

[2011] NSWCCA 63

[1936] HCA 40

[2000] FCA 1886