Cittadini v R

Allerton v Director of Public Prosecutions (1991) 24 NSWLR 550 Chahal v Director of Public Prosecutions [2008] NSWCA 152 Cittadini v R; R v Cittadini [2009] NSWCCA 302 CASES CITED : Mordaunt v Director of Public Prosecutions & Anor [2007] NSWCA 121; 171 A Crim R 510 R v Manley [2000] NSWCCA 196; 49 NSWLR 203 R v C [2009] NSWCCA 81 R v Cittadini [2008] NSWCCA 256

PARTIES: Alexander Cittadini (App) The Crown

COUNSEL: S Odgers SC/D Priestly (App) D Arnott SC (Crown)

SOLICITORS: Mitchell Lawyers (App) Director of Public Prosecutions (Crown)

IN THE COURT OF CRIMINAL APPEAL CCA 2008/1008

McCLELLAN CJ at CL FULLERTON J SCHMIDT J

9 DECEMBER 2010 CITTADINI v R JUDGMENT 1 McCLELLAN CJ at CL: I agree with Fullerton J. 2 FULLERTON J: On 18 December 2009 this Court quashed the applicant's convictions on each of four counts of manslaughter by criminal negligence and directed verdicts of acquittal (see Cittadini v R; R v Cittadini [2009] NSWCCA 302). A co-accused, Mr Adrian Presland, was acquitted by the jury. 3 The charges concerned the deaths by drowning of members of the crew of the yacht "Excalibur" in September 2002 when its keel broke at sea causing it to capsize. It was common ground that the keel failed because it had been cut horizontally through its entire width and then welded together during the course of its manufacture at the premises of Applied Contract Engineering Pty Ltd in Victoria. The applicant is the Managing Director of that corporation.

4 A coronial inquest into the deaths was held in 2005. The proceedings were instituted by the filing of an ex officio indictment in the District Court on 14 January 2008. The relevant law

5 In an application brought pursuant to the Costs in Criminal Cases Act 1967 ("the CCC Act") the applicant seeks a certificate for the costs associated with those proceedings on the asserted basis that it was not reasonable to institute the proceedings. Section 3(1) of the CCC Act provides: "A certificate granted under this Act shall specify that, in the opinion of the Court or Judge or Magistrate granting the certificate: (a) if the prosecution had, before the proceedings were instituted, been in possession of evidence of all the relevant facts, it would not have been reasonable to institute the proceedings, and (b) that any act or omission of the defendant that contributed, or might have contributed, to the institution or continuation of the proceedings was reasonable in the circumstances."

6 The test of unreasonableness provided for in s 3(1) of the CCC Act has been considered by this Court in a succession of cases. In Mordaunt v Director of Public Prosecutions & Anor [2007] NSWCA 121; 171 A Crim R 510 McColl JA reviewed the principles extracted from those authorities identifying the hypothetical question posed by an application under the CCC Act as being whether, if the prosecution had evidence of all the relevant facts immediately before the proceedings were instituted, it would not have been reasonable to institute the proceedings. 7 The applicant bears the onus of showing that on an objective analysis of all the relevant facts it was not reasonable to institute the proceedings. It is not for the Crown to establish, or the Court to conclude, that the institution of proceedings was, or would have been, reasonable. McColl JA also emphasised that although the test of reasonableness is not prescriptive, the extent to which there is any contradiction of any expert evidence concerning central facts in issue, or inherent weakness in the prosecution case, is relevant to the power to grant a certificate as it is to the exercise of the residual discretion to grant a certificate in s 2 of the CCC Act (see R v Manley [2000] NSWCCA 196; 49 NSWLR 203 per Wood CJ at CL at [14]). In addition, the fact that there is evidence sufficient to establish a prima facie case does not inevitably mean that it was reasonable to institute the proceedings, especially where there is contradictory evidence and where it is reasonable to expect a prosecutor to make some evaluation of the evidence in that light.

8 As Wood CJ at CL noted in Manley at [15], the mere fact that after making its own independent assessment of the evidence led at trial this Court was satisfied that an applicant's conviction was unreasonable (as is the case here), does not necessarily mean that the prosecution was unreasonable for the purposes of the CCC Act. On the other hand, as Basten JA observed in Chahal v Director of Public Prosecutions [2008] NSWCA 152, the failure to establish any factual basis for a particular element of the prosecution case will tend to support the costs application.

9 In order to answer the question whether it was reasonable to institute the proceedings in this case, it is necessary to ascertain the "relevant facts", whenever they became known to the prosecution, and whether or not they were in evidence at the trial, and then to undertake an objective analysis of those facts (see Allerton v Director of Public Prosecutions (1991) 24 NSWLR 550). The relevant facts for the purpose of the application

10 It was the agreed position of the parties that the application for costs would be made and determined on the basis of filed submissions, and any additional evidence, without the need to convene a further hearing. 11 The applicant did not seek to rely on any evidence extraneous to the evidence led at trial save for an application forwarded to the Director of Public Prosecutions before the proceedings commenced inviting him to direct that the matter not be prosecuted in exercise of his statutory powers under the Director of Public Prosecutions Act 1986. The letter was said to be relevant to the exercise of the residual discretion to grant a certificate under s 2 of the CCC Act in that the matters relied upon by the applicant in seeking to persuade the Director to exercise his statutory powers were, fundamentally, the very deficiencies and contradictions in the evidence that persuaded this Court to direct verdicts of acquittal.

12 The Crown did rely upon evidence additional to that led and/or ultimately admitted at the applicant's trial. In the Crown's filed submissions considerable reliance was placed on an affidavit of Andrew Charleston, solicitor, which annexed various documents in support of the Crown's ultimate submission that the applicant had failed to establish that it was not reasonable to institute proceedings. This comprised evidence either not before the jury at trial because it was excluded by the trial judge, and evidence that was not elicited from a Crown witness, Mr Elliott, in the sense that he did not give evidence in accordance with his statement or his evidence at the inquest into the deaths of those aboard the yacht as to material matters. The Crown Prosecutor who appeared on the application did not proffer an explanation as to why this was so. I also note that there was no application by the Crown at trial for leave to cross-examine Mr Elliott under s 38 of the Evidence Act 1995.

13 In resisting the application for costs the Crown also relied upon some of the evidence the applicant gave at the inquest but which was not the subject of any questioning in the ERISP which was tendered by the Crown at trial. This evidence was said to have provided material upon which to base a cross-examination of the applicant were he to have given evidence at his trial. Although the Crown did not tender, or seek to tender, a transcript of the applicant's evidence at the inquest at trial, this was said to be immaterial to the test to be applied on the costs application. What was important, so it was submitted, was that the evidence was available before the proceedings were instituted and available to be considered as part of the body of relevant facts upon which the Crown relied in instituting the proceedings.

14 The applicant did not object to this material being considered as part of the evidence in the possession of the prosecution at the time proceedings were instituted (as expressly provided for in s 3A(1)(c) of the CCC Act), but submitted that it does nothing to diminish the force of the demonstrable fact that it was unreasonable for the Crown to have instituted the proceedings.

15 In order to determine whether the applicant has discharged the onus of establishing that it was not reasonable to institute the proceedings it is necessary to review the Crown case at trial and the course of the trial and to give appropriate weight to the further material not adduced at trial. It is convenient to do so by reference to the decision of this Court on the applicant's appeal against conviction. The Crown case at trial

16 The Crown case of manslaughter by criminal negligence was put on two bases. The first that the applicant knew that the keel had been cut and he allowed the yacht to be supplied in that condition in breach of the duty of care he owed to those who would or might sail the yacht or, in the alternative, he failed to implement reasonable measures for the supervision of the process of manufacturing the yacht, and failed to provide adequate quality control at various stages in that process, and that those failures resulted in the yacht being delivered with a defective keel in breach of his duty of care. The applicant submitted that neither of the alternate bases upon which the Crown sought a conviction were sustainable, as determined by this Court, in directing verdicts of acquittal and that remained the case on the application despite the further evidence relied upon by the Crown.

17 In the judgment of McClellan CJ at CL at [13]-[15] his Honour summarised the evidence as to how the keel was constructed and at [18] and [20] why it was cut: "[13] Although the yacht had been at sea for a number of weeks, and had sailed to and raced at Hamilton Island, the keel fatigued and ultimately failed along the line of the cut, the starboard side being the first to fail. Although the lower half of the keel was not recovered the stump of the keel and the broken end of the lifting ram remained in place on the hull and were subject to examination by an expert metallurgist. He concluded that the cut in the keel gave the appearance of having been cut with an abrasive cutting disc such as an angle grinder. He also noted that the weld intended to join the two parts was not a full penetration weld and that there was no weld fusion at all in some sections. In addition, the cut was not made so as to leave a bevelled edge to ensure a secure weld, a deficiency which was contrary to good welding practice and which also compromised the strength of the weld.

[14] There was no dispute at the trial that the keel had been cut horizontally and welded back together at a time when the keel was located at Mr Presland's work station. Once completed the weld was polished so that the cut could not be detected with the naked eye. The polished fin included a horizontal band where the cut had been made, which gave it an appearance consistent with the fin having been heated at that location. The possibility that the metal had been heated to facilitate it bending would not have caused any concern to anyone who observed it.

[15] Evidence was given by Assoc Prof Yeomans that "the standard fabrication method to clean up" the effect of blueing following the application of heat is to use a flexi-disc or a sanding disc to polish up the area. Mr Harris testified that he took it for granted that the area of polishing was cleaning up the "heat line" and it never occurred to him that it might have been a weld line. Mr Fred Buono, a foreman who worked on the keel after it must have been cut and before it had been painted said that he did not see a "weld line" across the keel.

[18] The Crown case was that it was likely that the keel was cut because the fin, when assembled, was "bending or warping or twisting or curving as a result of steps taken during its construction." The evidence established that the two pieces of steel comprising the fin were bent by Mr Harris applying the press brakes in concentrated areas along the surface of the skin.

[20] It was accepted at the trial that cutting the fin would have allowed the required aerofoil shape to have been more easily achieved." 18 His Honour went on to observe that Mr Presland (the co-accused and principal welder) gave evidence where he denied cutting or re-welding the keel, or knowing that had occurred. He also gave evidence that the applicant had made it clear to him that the two plates forming the exterior of the fin of the keel were not to be cut. In his interview with police the applicant agreed that any cutting of the keel constituted a major departure from the architect's design and that he should have been informed of any proposal to cut the keel. He said that he was not asked for permission to cut it and that he was unaware that the keel had been cut and re-welded.

19 Mr Derek Harris gave unchallenged evidence that he was having difficulty bending the plates to form the keel and asked the applicant if he could cut the plate to facilitate the process. He said he was told that he must not and that if he was not able to perform the task assigned to him the plates would have to be sent out to another factory. 20 In the result there was no evidence at trial as to who cut the keel and no evidence that anyone knew it had been cut. McClellan CJ at CL noted: "[43]… There was expert evidence that the process of cutting, welding and polishing would have taken at a minimum about six hours. The process would have been noisy and would be likely to have required two persons and the use of lifting gear to enable the keel, which is large and heavy, to be manoeuvred and the cutting and welding completed. [44] There was evidence which established that the cutting, welding and subsequent polishing of the cut could have been completed within a period of time when the appellant was not present on the premises. He was not there for all of every day. It could also have been completed during a weekend when he may not have been present at all. The weld was of poor quality, which was consistent with it having been completed very quickly. [45] Although the evidence gave rise to a suspicion that the appellant would have been aware of the cut it otherwise lacked conviction. The prosecutor submitted to the jury that the appellant "obviously" did know about the cut because it would not have been done "without reference to him". This was a classic "bootstraps" argument. It is obvious that the cutting should not have been done without first consulting the appellant. However, there was no evidence that the cutting would not or could not have been done without reference to him. There was evidence from Mr Presland that work was done on the keel on weekends. [46] In its written submissions on the appeal the Crown accepted that the only reasonable inference was that the fin of the keel was cut by someone concerned with the manufacture of the keel and with the ram cover plate who had access to the factory and the necessary equipment outside normal working hours.

[47] Although the appellant accepted that as he was the person ultimately in charge of the construction of the yacht he should have been informed of any proposal to cut the keel, there is no evidence from which it could be inferred that he was consulted about the cut that was actually made. Indeed the evidence indicates the contrary." 21 His Honour then went on to say: "[50] It is important that no one who saw the keel after it had been cut, welded and polished identified the fact that the cut had been made. Once polished the cut and welded section appeared consistent with the steel having been heated in that location to enable a bend to be created. I have referred to the relevant evidence in [15] above.

[52] The ultimate submission which the Crown made both at trial and on the appeal was that because the appellant was in charge of the construction it was reasonable to infer that he must have known that the keel had been cut. Although it is entirely rational to expect that he should have been told of the work which had been done on the keel, there is absolutely no evidence that he was told that it had been cut. In his ERISP he said otherwise.

[53] It is obvious that some person or persons cut the keel and one or more persons must know who that was. On the appeal the Crown submitted that the hypothesis consistent with innocence required that the unknown persons who performed the task of cutting, rewelding and attaching a second cover plate before polishing off the cut to disguise the weld marks did so undetected and that those same persons have chosen, notwithstanding the enormous tragedy which has occurred, to secrete the truth and remain silent.

[54] In the course of his remarks on sentence the trial judge, as he was required to do, considered the evidence at the trial. His Honour concluded that the jury could not have convicted the appellant on the basis that he knew that the keel had been cut. In my opinion this conclusion was correct. If the appellant was convicted on this basis the conviction was unreasonable."

The significance of Mr Elliott's statement and his evidence at the inquest to the first basis upon which the Crown put its case 22 The Crown submitted that Mr Elliott's statement and his evidence at the inquest was material to both of the bases upon which the case against the applicant was left to the jury. 23 Mr Elliott was a fitter and turner employed at the applicant's premises at the time that the keel was constructed. The relevant portions of his statement are as follows: "9. I did not have anything to do with the manufacture of the keel at this stage but I was in the bottom factory doing various duties with the fabrication of the boat. It would have been around the same time that I was rolling the hull of the yacht when I saw the following. I saw what I knew to be the keel completed in its raw metal state. By that I mean that it was fabricated to the point that only bulb needed to be fitted. The keel was clamped to a thick bench, there was a hydraulic jack or what is known as a porta-power of at least 4 inches in diameter between the keel and bench. I don't remember how it was actually clamped to the bench but I know it was. From memory Claudio Erle said to me to go and have a look at what they were doing to the keel, the amount of stress that they were putting it under. 10. The keel was clamped to Adrian Presland's bench. He was the person working on the keel. I cannot remember any other person working on the keel with him. Although I saw Alex Cittadini talking with Adrian when the keel was clamped on his bench. 11. I remember seeing the keel on Adrian's bench, I'm not sure if the keel was clamped or not but I saw a cut running across from the leading edge of the keel to the trailing edge. Detective Senior Constable Dean has provided me with a drawn diagram. I have marked on this diagram where I saw the cut running from the leading edge to the trailing edge. I saw this cut only on one side as the other side was on the bench. I cannot be sure if the leading edge or the tailing edge of the keel had been fitted and welded when this cut was present. I remember the cut because I was quite surprised that anybody would allow it to be cut horizontally. Nobody in the right mind would put a cut in that position on a keel. For one you're never going to get full strength out of the piece of steel after re-welding it. I had a laugh with the guys in the machine shop, Maurice Painter and Claude Erle about how much stress they were putting the keel under. I knew that the cut had been done by a 9-inch grinder. I could tell that just by looking at it. 12. I was in and out of the bottom factory and welding shop. The next time that I saw the keel was that it was still on Adrian's bench and that the cut had been welded, reground and cleaned up. Where the cut was, the metal was of a different texture and appearance. It looked as though the weld had been sanded. This section was noticeable from the remainder of the keel. It was shiny across the face where the cut was. In my opinion it was not a clean up line for a heat-affected zone because of two reasons. One is that I saw the cut in the same location prior, and knew that it had to be welded and secondly why would you need to clean up a heat-affected zone when the keel was being sand blasted."

24 His evidence at the inquest was broadly consistent with his statement save for the fact that he made it clear that he did not see anyone at Mr Presland's bench when he saw the keel in its cut state, and that he believed that it was most likely that he saw the keel in that state in the evening, when he was picking up some steel from the factory using a key that allowed him access to the factory after hours. He said that the factory was empty at that time. He said that he doubted that it would have been on a weekend as he did not work weekends. He also said that he was unsure as to whether it was on his return to work after a weekend that he saw that the cut had been welded and the cut line cleaned up. He said it might have been a week after he saw it cut or it might have been three days or even five days later. In short, he was unsure of the time gap between seeing the keel cut and when he next saw it after it had been welded. 25 The Crown submitted that the significance of Mr Elliott's evidence on the first basis upon which the Crown put its case (namely that he actually knew the keel had been cut) was that the cutting and re-welding of the keel may not have been a secret operation performed by unknown persons within a period of six to eight hours such that the applicant could not have been expected to prevent it occurring or detect that it had occurred, given that Mr Elliott saw the keel in its cut state, albeit after working hours, and that some days later he saw the two parts welded together. The Crown also submitted that the fact that there was no one else present when Mr Elliott saw the keel in either its cut or its welded state strongly suggested that the cutting and welding was not performed in one single operation. This not only supported the Crown case that the operation was not a clandestine operation concealed from others in the factory but, further, that if Mr Elliott saw the cut and the re-weld before it had been bent and polished by Mr Presland and Mr Harris, the keel must have borne obvious marks when they dealt with it such as to cast serious doubts on their evidence (and the applicant's case by association) that they saw nothing irregular when they applied heat to it. If, on the other hand, Mr Elliott saw the keel cut after it had been bent and polished then the resultant horizontal band should have alerted Mr Presland to the fact that someone else had worked on the keel.

26 It is beyond doubt that the Crown was in possession of relevant evidence from Mr Elliott supportive of the case against the applicant at the time of the institution of the proceedings in January 2008. No explanation is proffered for the failure of the Crown to lead that evidence or to seek leave to cross-examine him as an unfavourable witness. After considering the transcript of his evidence at the inquest I do not accept the applicant's submission that the Crown knew, or should have known, before the proceedings were instituted that Mr Elliott was unlikely to give reliable evidence at trial because his testimony at the inquest was "riddled with inconsistencies" such that his failure to give evidence at trial in accordance with the statement was readily foreseeable and that it was for this reason that it would not have been reasonable for the Crown to have taken his evidence into account when instituting proceedings.

27 There is, however, some force in the applicant's submission that although Mr Elliott's evidence was probative of the question of whether Mr Presland was involved in the cutting and re-welding of the keel, the fact that he recalled seeing the keel in its cut state when no one else was present, does not make it materially more likely that the applicant was aware of the operation, or that he would or should have been aware of it were he to have undertaken adequate supervision of those who were engaged in the construction of the keel. According to the applicant this was said to follow from the fact that, taken at its highest, Mr Elliott's evidence does not exclude the possibility that the whole operation of cutting and re-welding, even if separated by days or a weekend, was nevertheless performed out of hours and in secret or, contrary to Mr Presland's evidence at trial, that he knew that the keel had been cut, or was himself responsible for it, but kept it from the applicant knowing the applicant had not authorised the cutting. The applicant submitted that the evidence tendered on the application as it related to Mr Elliott's observations failed to establish any additional relevant fact in the Crown case against the applicant and, for this reason, the evidence does not make the decision to prosecute the applicant on the basis that he knew the keel was cut and re-welded any more reasonable. I accept that submission. The principles which are involved when this Court considers whether the verdict of a jury was unreasonable, having determined that there is nothing additional to the evidence led at trial probative of the applicant's guilt on the first of the alternate bases upon which the Crown put its case, and consistent with the unanimous judgment of this Court on the conviction appeal, and in particular the reasons set out in [42]-[54] of the judgment of McClellan CJ at CL. I am compelled to the view that it was unreasonable for the Crown to have instituted proceedings against the applicant on the basis that he knew the keel had been cut. The significance of Mr Elliott's evidence on the second basis

28 The Crown also submitted that Mr Elliott's statement and his evidence at the inquest was also relevant to exposing the complete lack of appropriate checking procedures employed in the process of the construction of the yacht and the absence of an adequate system of supervision, as being relevant to the question whether it was reasonable for the Crown to institute proceedings on the alternate basis upon which it put its case at trial, a case which did not depend upon proof that the applicant was aware that the keel had been cut. Whether that is so depends upon a review of the evidence relied upon by the Crown on the alternate basis upon which a verdict was sought at trial.

29 At [59] of the judgment on appeal McClellan CJ at CL identified three examples of the kind of measures that the Crown Prosecutor at trial identified as the type of measures that could have been included as part of a system of quality control which the applicant negligently failed to implement. Firstly, that the workers should have been required to submit a test weld to ensure that they had the necessary skills for the construction of the keel. Secondly, that particular weld procedures in the construction of the yacht should have been prescribed and finally that there was no system of visual examination or spot checks at each stage of construction to ensure against structural defects going unnoticed. His Honour then set out in detail the evidence bearing upon each of these aspects in [60]-[78] which is conveniently summarised as follows:

a There were no express instructions from the applicant's client as to the method of quality control (or supervision) to be provided in the manufacturing process [57]; b The applicant used competent and experienced welders and competent foremen as supervisors [58]; c The evidence did not support a finding that there was inadequate testing of the welding process or that the applicant should have required the welders to submit a test plate [60]-[66], or that he should have insisted on the employment of particular welding procedures rather than to have left that decision to the discretion of the welder [67]-[71]; d The only evidence of what might have been standard practice in the industry at the time was from another boat builder to the effect that he completed visual spot checks very regularly. There was evidence that the applicant inspected the work regularly [72]-[74]; e There was no expert evidence that the standard of supervision employed in the applicant's premises was criminally negligent [58] and [80]; f Despite the fact that there could have been a more effective system to verify the quality of the work done on the yacht, including a formal process of quality assurance ("QA") and internal test procedures ("ITP"), there was no evidence that could have permitted the jury to find that quality control was so lacking that the applicant breached his duty of care to the criminal standard [80].

30 On the application the Crown submitted that various rulings by the trial judge during the course of the trial had the effect of limiting the evidence which would have established defective welding work on parts of the yacht other than the keel (and defects in the construction of the yacht generally). It was said to be reasonable for the Crown to have relied upon this additional evidence when it instituted the proceedings in support of the alternate basis upon which the applicant's guilt was put, namely that the construction of the yacht was generally substandard, a state of affairs which was exemplified by the fact that it was delivered with a defective keel in breach of the applicant's duty of care.

31 There was evidence in the trial from Mr Chandler, an experienced boat builder and repairer, of his inspection of the yacht on 19 August 2002 and the poor quality welding of the rudder housing which he said was in need of repair. However the trial judge excluded other evidence the Crown sought to lead from him (and from Mr Berg, an experienced boilermaker/welder who worked for Mr Chandler) of other cast aluminium fittings to the hull of the yacht where the weld had physically broken off the casting due to bad welding. Mr Chandler's statement and Mr Berg's statement, both dated October 2002, were tendered on the application. They detailed various sections of the yacht which were examined and where defects were detected by them, one of which was a backstay which supported and stabilised the mast.

32 Although this evidence was otherwise relevant and admissible, it was excluded by the trial judge because its probative value was outweighed by impermissible prejudice. I am not persuaded that a considered evaluation of the evidence by the Crown before the proceedings were instituted would have led inevitably to a conclusion that the evidence would be, or would be likely to be, excluded if objection were taken to it. It is not infrequently the case that the assessment of the probative value of evidence, relative to its potential to be productive of unfair prejudice, is not able to be made, or able to be made with any degree of confidence, until the trial is in progress and the issues, and the evidence bearing upon proof of those issues, are ventilated in the adversarial context. In addition (also in the exercise of the discretion under s 137), the trial judge excluded a radiographic examination of the hull of the yacht in 2006 which detected defective welding of some aluminium plates which were constituent parts of the hull of the yacht. Defects were said to exist in 19 of 22 weld plate sites which had been randomly selected for examination.

33 The Crown appealed unsuccessfully under s 5F of the Criminal Appeal Act 1912 against the trial judge's rulings rejecting the Crown tender of the evidence referable to defects in the construction of the yacht. Grove J (Howie and Hall JJ agreeing) dismissed the appeal on the basis that the Crown had not demonstrated that the trial judge's discretion had miscarried. It was not suggested in the judgment that the evidence was inadmissible per se. His Honour also observed that at the time of the hearing of the appeal the trial had been in progress for over four weeks and that the trial judge was in the best position to assess the atmosphere of the trial, the nature and extent of the risk of unfair prejudice and whether, in his view, it could be avoided by judicial direction having regard to the apparent strengths and weaknesses of the arguments being advanced by the parties (see R v C [2009] NSWCCA 81).

34 Importantly, for the purposes of this application, the exclusion of the evidence of other defects by the trial judge in the exercise of discretion followed a previous interlocutory Crown appeal (in respect of a trial which was aborted) which successfully overturned the exclusion of the same evidence as tendency evidence (R v Cittadini [2008] NSWCCA 256). In that case Simpson J, with whom Mc Clellan CJ at CL agreed, said: "[27] In order to establish a negligent system, it is not sufficient to show negligence on one occasion, or an isolated defect. The Crown will seek to prove negligent system by an accumulation of defects in this yacht. It will invite the jury to infer that, by reason of the accumulation of defects, the supervisory process was inadequate and negligent; and that, as part of, or because of that inadequacy, the yacht was delivered with a defective keel. Mr Cittadini's criminal liability, on this scenario, derives not from his conduct in respect of the construction of the keel, but from his responsibility and obligation in respect of the overall process. The negligence in supervision allowed the defective yacht to be delivered. On this scenario, it is not part of the Crown's case that Mr Cittadini knew, or even ought to have known of the defective keel. There is no "conduct on a particular occasion" involved. There is therefore no tendency reasoning.

[31] The position here is analogous: the jury will be asked to infer, from a collection of circumstances, that the system was inadequate and negligent. None of the instances of defective workmanship of itself would prove that the system was inadequate and negligent; in combination, they might. Neither together nor in combination do they prove any tendency on the part of Mr Cittadini to act in a particular way. The evidence goes to the correct characterisation of the system.

[32] On the correct analysis of the Crown case there is no question of reasoning that Mr Cittadini was in breach of his duty in respect of the keel. His asserted breach of duty was in the implementation of the system of work. It may be that that is remote from the immediate cause of death, and that the Crown will find it difficult to in fact establish the necessary causal connection; but that is a question for the jury, and not for this Court." 35 On the application, the Crown also relied upon an email sent to the applicant from Mr Saunders, the owner of the yacht, in January 2003, where he identified a large number of issues which he insisted be addressed urgently. This evidence was not before the jury, also having been excluded by the trial judge in the exercise of discretion. (It was not the subject of a s 5F appeal.) While the catalogue of defects in the email were principally associated with issues other than those that might have revealed poor welding in the construction of the vessel, Mr Saunders did identify an inadequately welded rudder post mounting (and what he regarded as inadequate welding and bracing as the cause of the problem), a defect which was later repaired by Mr Chandler. The email also drew attention to the fact that the yacht was labouring under other defects which were revealed when it was under sail under variable sea conditions.

36 It was not submitted by the applicant that the Crown's evaluation of the weight of the evidence which was ultimately excluded, but which was otherwise available to be considered at the time of the institution of proceedings, was wholly unreasonable. The applicant's submission was that evidence of other defects in the construction of the yacht was not relevant on the application or, if it was received, it should carry no weight since its probative value was outweighed by impermissible prejudice as reflected in the ruling of the trial judge. It was further submitted that the Crown's reliance on the evidence invites this Court to speculate on its true probative value when the evidence is not at this time susceptible to challenge or explanation. I do not accept this submission. In my view, an objective assessment of the evidence supports a finding that the Crown, acting reasonably, was entitled to regard the evidence of other defects in the construction of the yacht as relevant and admissible in accordance with what was its submitted position on the s 5F appeal in October 2008 (see the analysis of that evidence by Simpson J extracted in [34] above). The fact that the judge who ultimately presided over the trial came to the view that the evidence of other defects should be excluded in the exercise of discretion does not render the evidence that was excluded irrelevant, or of no probative value, in the evaluative exercise under s 3 of the CCC Act. 37 In my view, when the Crown instituted the proceedings it was entitled to regard the extent of other defects in the construction of the yacht in the context of the cutting and re-welding of the keel as relevant to proof of an inadequate and potentially negligent system of work for which the applicant may have been criminally responsible. That is not to undermine the fact that the applicant has been acquitted by this Court. This appeal was not concerned with the views expressed by other judges in a series of interlocutory appeals brought under s 5F of the Criminal Appeal Act, nor concerned with the fact that as the trial progressed otherwise relevant evidence was excluded by the trial judge in the exercise of discretion. The focus of the first ground of appeal was the evidence which was actually led at trial and whether, having regard to that evidence and the way the Crown put its case, the verdict of the majority of the jury was unreasonable. The potential to skew the test which needs to be applied on this application by reference only to the judgment of this Court in directing verdicts of acquittal must be guarded against. The test is whether it was reasonable to institute the proceedings by the presentation of the ex officio indictment in January 2008, not whether, in the result, the verdicts were reasonable having regard to the evidence that was ultimately considered by the jury.

38 In resisting the application for costs the Crown also relied upon the fact that the applicant gave evidence at the inquest that there were facilities available at his premises for implementing an inexpensive and relatively simple dye penetration test capable of testing whether welds applied to various parts of the yacht were properly achieved. If implemented, the Crown submitted these tests might have ensured that a weld of appropriate penetration was achieved at any given point in the construction of the yacht including, for relevant purposes, the area of the re-weld across the horizontal face of the keel by those responsible for applying the weld. Even if the cutting and re-welding was kept secret from the applicant, the Crown submitted that this Court should regard the procedure as one undertaken by employees as a short cut or to overcome a problem they encountered in the construction of the keel and not an act of industrial sabotage. In these circumstances, so it was submitted, if a simple method of testing the penetration welds was available, those same employees would likely have utilised that test and determined for themselves that the welds were inadequate such that the disaster at sea may have been averted. This issue was not canvassed with the applicant in the ERISP. In addition, the Crown submitted that the defence advanced by the applicant at trial, namely that QA and ITPs were expensive and were only required on the client's express instructions and the applicant's client did not require them, was not able to be tested by reference to the availability of the dye penetration test because the applicant elected not to give evidence. (The Crown did not make clear why this evidence was not explored with Mr Presland in cross-examination.) 39 Whether it is reasonable for the Crown to approach an evaluation of the strength of its case on the basis that an accused might give evidence is not to the point. The point is that the applicant's evidence at the inquest was available to the Crown before the proceedings were instituted. (The evidence was not given under a s 128 certificate.) Despite the fact that the applicant made no admissions of substance at the inquest, in my view the availability of inexpensive testing procedures not incorporated into the work system was a matter the Crown was entitled to take into account in formulating its approach to proof of the applicant's guilt on the basis of his failure to implement a safe system even if, in the result, the evidence was not before the jury. I am of the view that this is so despite the fact that the trial judge ultimately directed the jury to ignore the prosecutor's submission concerning QA and ITPs when considering what a reasonable person in the applicant's position would have done because, as the evidence established, the applicant was under no contractual obligation to provide them, and that this Court was satisfied that it was not necessary for the applicant to provide them in discharge of his duty of care (see [115] of the appeal judgment).

40 At [84]-[85] of the appeal judgment, McClellan CJ at CL was also of the view that causation presented what his Honour described as "an insurmountable difficulty" for the Crown at trial. If that observation applies equally to an objective assessment of the evidence available to the Crown at the time the proceedings were instituted, as contended for by the applicant, then the application for costs is well founded. 41 In order for the Crown to make good its case against the applicant it was not enough, as a matter of law, that the deaths were causally linked to the failure to provide or implement proper supervision and quality control. It was necessary for the Crown to establish to the criminal standard that the applicant's omissions (as alleged) caused the death of those on board the yacht by "significantly contributing" to the failure of the keel. Because the cutting and welding of the keel was an unauthorised deviation from the architect's plans and, as this Court found, executed without the applicant's knowledge (in fact contrary to his express instructions), and because the cut and weld was not detectible by visual inspection, McClellan CJ at CL concluded that once QA and ITPs are put to one side it was not open to the jury to find that a system of supervision which was capable of identifying an unauthorised event of the kind that occurred in this case should have been in place. 42 The Crown emphasised that his Honour's conclusion on the issue of causation hinged upon the direction the trial judge gave the jury to disregard the QA and ITPs. This much is clear from his Honour's reasoning in [85]. When the proceedings were instituted, however, the Crown submitted that it had available to it evidence from a variety of sources additional to the evidence the trial judge directed the jury to disregard. This included the applicant's evidence at the inquest that there were measures available to be implemented as part of a system of quality control (including the dye penetration test and pre-testing the skill and proficiency of the welders) which, if implemented, was said to be capable of persuading a jury that the cutting of the keel, and importantly, so far as the reason for its failure is concerned, the defective welding of the keel, would not have been done and, if done, would have been detected before the keel was attached to the yacht. Although the evidence established that there was no general practice, much less a requirement, in the yacht building industry for welds to be pre-tested, the Crown tendered evidence in the form of a statement from Mr Brown, an experienced boat builder, that he tested his welders before they were engaged in the construction of a yacht. The Crown submitted that this was evidence a jury was entitled to have regard to when considering what a reasonable person in the applicant's position would have done, and whether the applicant's failure to pre-test his employees should attract criminal sanction, and that it was reasonable for the Crown to rely upon this evidence when instituting the proceedings. I have already referred to the Crown's submission on the availability of the weld penetration test and its bearing on the issue of causation. 43 In the result, the Crown submitted that on an objective analysis of all relevant facts when the proceedings were instituted, it was reasonable for the Crown to hold to the view that a jury could have been satisfied that the applicant's failure to provide an adequate system of work caused the death of the four sailors by contributing significantly to the failure of the keel. The fact that the weight of the evidence of the need for and practice of pre-testing welders was diminished as the trial progressed, and that the availability of the dye penetration test was not adduced at the trial at all, is, as the Crown emphasised, not determinative of the question posed by the application under the CCC Act, namely whether the applicant has made good its submission that proof of causation on the alternate basis upon which the Crown put its case was so problematic that it was not reasonable for the proceedings to be instituted.

Conclusion 44 While there is some force in the Crown's submission it is difficult to overlook the fact that the alternate basis upon which a conviction was sought at trial was very much secondary to the Crown's primary case - a case that this Court was satisfied suffered from a deficit of proof capable of establishing the applicant's knowledge that the keel was constructed with a structural defect and that the yacht was delivered in this state. In [27] above, and for the reasons there stated, I concluded that there was no reasonable basis for the institution of proceedings against the applicant for manslaughter by criminal negligence on this basis despite the additional material upon which the Crown relied on the application. Even on the Crown's alternate case, proof of the necessary causal connection between the applicant's omissions and the death of the sailors was significantly diminished by the lack of evidence establishing the applicant's knowledge (or means of knowing) that the keel was constructed with a structural defect.

45 After close analysis of the evidence led at trial, and after taking into account the other relevant facts relied upon by the Crown in resisting the application for a certificate under the CCC Act, and the Crown's analysis of those further facts, I am of the view that the applicant's submission that it was not reasonable to institute the proceedings based upon the applicant's failure to implement a safe system of work should be accepted. In my view, the necessary causal connection between the death of the sailors and what is said to be the applicant's breach of duty remains weak. It is not that the Crown was without any basis for a case of manslaughter by criminal negligence on this alternate basis, but rather that it was a case contingent on a diverse range of variables of proof and approaches to proof which, while theoretically available, did not comprise a sufficient body of relevant facts to meet the test of reasonableness under s 3(1) of the CCC Act. In these circumstances I consider it appropriate to exercise the discretion pursuant to s 2 of the CCC Act and to grant a certificate in relation to the proceedings instituted against the applicant by the prosecution. 46 SCHMIDT J: I agree with Fullerton J. **********

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