Director of Public Prosecutions v Smith and 3 others

Judgment 1HIS HONOUR: This is an appeal instituted by the Director of Public Prosecutions challenging the decision of the presiding magistrate in the Local Court to dismiss charges brought against the four defendants/respondents. The court attendance notices issued to commence the proceedings specified Raymond Kwan of ICAC as the prosecutor and are dated August 2009. The charges are centred upon an offence alleged to have occurred about nine years earlier between 10 September and 25 November 2000. 2On 4 May 2011 at the hearing, the Crown prosecutor informed the court that the Director of Public Prosecutions was appearing in support of the charges but that there had been no formal take over. A written submission in the appeal noted that this was "clarified" on 12 May 2011 at T 16-19. That was the day on which the learned magistrate delivered judgment and the transcript exhibited in the appeal ceases at page 12. No challenge was made to the standing of the Director to conduct the appeal and I presume that sometime after 4 May 2011 he did take over the prosecutions and I mention these matters only as among peripheral curiosities which have emerged about these somewhat stale and long drawn out proceedings. 3What effectively was the core charge asserted that the respondent William Edward Smith between 10 September and 25 November 2000 being an agent of Koompahtoo Local Aboriginal Land Council (KLALC) corruptly agreed to receive from Villa World Ltd (Villa World) payments as an inducement for showing favour to that company in relation to the affairs to KLALC. 4I have called this the core charge as each of the other three respondents Walter Robert Scott, Kim Anthony Wilson and Adam John Perkins has been charged with aiding and abetting the commission of that offence by William Edward Smith. 5Given the multiplicity of respondents and the numerous other persons referred to in submissions, as a matter of convenience I will henceforth refer to people by surname unless it is necessary to distinguish them and I intend no offence in omitting courtesy titles or the like. 6To an extent Smith operated through a corporation Smith and Sons Pty Ltd and Scott operated through another, Bronzewing Property Pty Ltd. For present purposes, references to those companies may be taken to refer to the relevant natural persons. It is also noted and accepted that Perkins was a director of a company called Sanpine Pty Ltd (Sanpine). 7It is common ground that the charges were being heard in the exercise in the summary jurisdiction of the Local Court. The prosecutor has appealed as of right against the dismissal of the charges and the appeal is limited to a question of law alone: Crimes (Appeal and Review) Act 2001 s 56(1)(c). Section 65 of that Act provides that an order is not to be set aside merely because of an error of law in the order if there were sufficient grounds before the Local Court to have authorised the order. That does not operate, as submitted by Wilson, to require the appellant to demonstrate that the application of a correct test, assuming that an incorrect test had been applied, would have led to a different outcome. The statutory provision is directed to the form of order: cf Ex parte Lovell Re Buckley (1938) 38 SR (NSW) 153 and the provision does not allow a judge to substitute a new set of reasons for erroneous reasons given by a magistrate: DPP v Attallah [2001] NSWCA 171. 8In the summons originating the appeal the grounds are expressed as follows: (i)failing to take the prosecution case as its highest and to consider whether there was evidence, including circumstantial evidence, with respect to each element of the offences with which the defendants had been charged, upon which the defendants could be lawfully convicted (ie in failing the (sic) apply the first limb of the test in May v O'Sullivan (1955) 92 CLR 654), (ii)finding that there was no case to answer, and (iii)dismissing the matter. 9I understand the ground relied upon effectively to be a single ground described in the parenthetical statement in the first paragraph. 10It is practical to focus principally on the charge against Smith as, if the dismissal of it against him is sustained, the charges against the other three respondents as aiders and abettors must necessarily fall away. 11All parties have provided lengthy written submissions, the vast bulk of which was directed to complex dealings which spread over a number of years. This is not a criticism as it a view of those circumstances which the prosecution says gives rise to the inference, on a prima facie basis, that the charges were made out. 12Nevertheless, the challenge by the appellant has its precise articulation in the submission that "the concluding words of the magistrate's judgment indicate, in the Director's submission, the error in his Honour's approach to the matter". 13Those concluding words were "the thing is, I have a doubt in relation to this matter". 14As the issue then to be addressed was whether or not the evidence of the prosecution established a prima facie case, those words, viewed in isolation, would disclose error. The issue required a determination whether the respondents could lawfully be convicted not whether, as a matter of fact, they were to be convicted. 15The passage in the joint judgment of the High Court of Australia in May v O'Sullivan has achieved the status of a classic exposition of the correct approach to be taken in such circumstances namely: "When, at the close of the case for the prosecution, a submission is made that there is "no case to answer", the question to be decided is not whether on the evidence as it stands the defendant ought to be convicted, but whether on the evidence as it stands he could lawfully be convicted. This is really a question of law. Unless there is some special statutory provision on the subject, a ruling that there is a "case to answer" has no effect whatever on the onus of proof, which rests on the prosecution from beginning to end. After the prosecution has adduced evidence sufficient to support proof of the issue, the defendant may or may not call evidence. Whether he does or not, the question to be decided in the end by the tribunal is whether, on the whole of the evidence before it, it is satisfied beyond reasonable doubt that the defendant is guilty. This is a question of fact. In deciding this question it may in some cases be legitimate, as is pointed out in Wilson v Buttery (1926) SASR 150 for it to take into account the fact that the defendant has not given evidence as a consideration making the inference of guilt from the evidence for the prosecution less unsafe than it might otherwise possibly appear: cf Morgan v Babcock & Wilcox, per Isaacs J (1929) 43 CLR 163, at p 178. But to say this is a very different thing from saying that the onus of proof shifts. A magistrate who has decided that there is a "case to answer" may quite consistently, if no evidence is called for the defendant, refuse to convict on the evidence for the prosecution. The prosecution may have made "a prima facie case", but it does not follow that in the absence of a "satisfactory answer" the defendant should be convicted." 16In the written submissions on behalf of the respondent Wilson, the detection of error, if the concluding words of the magistrate are considered in isolation is, in somewhat reluctant language, recognised in the submission that "the appeal is without merit and merely fastens on an infelicitous passage in the magistrate's reasons as the basis for overturning the orders". 17The reasons were delivered extempore by the learned magistrate. Where a challenge is directed to the quality of expression it is appropriate to bear that in mind and also the pressures under which busy magistrates must deal with the volume of cases before them: cf Maviglia v Maviglia [1999] NSWCA 188. 18To determine whether the magistrate's decision was infected by error requires some attention to the context in which he delivered his reasons, that is to say, having some written as well as oral submissions about the complex circumstances in which the offences were alleged to have been committed. As I have already noted, a bulk of the submissions to this Court canvassed the circumstances but focus should remain on the assertion of error by the magistrate in reaching a conclusion that there was no prima facie case. To do so, it will not be necessary to recapitulate the whole of the activity which took place nor to recite the content of all the exchanges between all the persons who were involved from time to time. 19Pursuant to the Aboriginal Land Rights Act 1983, there was established a New South Wales Aboriginal Land Council (NSWALC) and there was facility for constituting regional and local land councils. KLALC was, in accordance with its title, one of the last mentioned. 20KLALC became vested with a large parcel of land at Morrisset and in July 1997 entered a joint venture agreement with Sanpine to develop land described therein as the joint venture site. There was some collateral debate about the extent of the land covered by the agreement. Relevantly in February 1999 NSWALC consented to change of use of the land and the mortgage of it by KLALC. The consent does not refer to some subdivided portion of the land. 21In that month Sanpine entered a project management agreement with Bronzewing (Scott). At material times Smith was chairman of KLALC. Wilson was a native title consultant who was engaged by Goldris Pty Ltd (Goldris) and subsequently by Villa World to assist in obtaining the consent of KLALC to construction of a sewer pipeline across the land held by it. 22Goldris owned a parcel of land at Wyee Point adjoining KLALC's property which was intended to be developed for housing. 23On 8 November 1999 the Minutes of a General Meeting of KLALC record a motion being carried in these terms "Wyee sewer project-we support progress but we object to them going through our land". This motion was noted as moved by Keith Dargin and seconded by Jill Jessop. No voting is recorded save an abstention by Z Moran. Apologies from 18 named persons were recorded but there is no list of persons who were actually in attendance in the exhibited minutes. The meeting opened at 7:15 pm and closed at 8:20 pm "due to arguments". 24In 2000 Goldris sold its Wyee Point land to Villa World but some 2 million dollars of the purchase price was retained and payment was conditional upon approval for building of the sewer line. 25The authority responsible for the sewer was Hunter Water and its interests went beyond the would-be developers and included the avoidance of sewage going into Lake Macquarie from existing habitations in the area. Hunter Water had sufficient statutory authority to enable it to erect the sewer line notwithstanding any negative stance of the land holders but it had determined to seek consent in order that, as is expressed from time to time, there be no interference by anyone opposed to the line in its construction and later operation. 26It follows that Villa World's project would not be likely to advance unless consent by KLALC could be obtained. The prosecution case was that the obtaining of the consent was the favour that Villa World sought. Whether favour is an appropriate description, it is obvious that Villa World was looking for assistance in achieving essential consent. Until that was obtained the project remained in any practical sense at a stand still. 27What was needed to be achieved was understood by anyone involved to be of interest to others including the local government authority Lake Macquarie City Council (LMCC) as there was already population at Wyee Point and there was a projected increase in that population. 28Wilson, as mentioned, was contracted to Villa World as a native title consultant whose expertise in dealing with the complexities attached into aboriginal lands was recognised by his being so retained. By 16 November 2000 he reported to Villa World indicating that he had met Perkins and Scott and sought authority in principle to proceed with a consultancy agreement with Scott and Smith in respect of which a draft was forwarded. 29This draft did not become a perfected agreement. On 24 November 2000 a letter of agreement for consultancy was signed between Villa World and Sanpine. The form was settled by Mr Cronin who was an in-house lawyer for Villa World. He was not aware of the content of the draft previously sent by Wilson. However he described the agreement of 24 November as compatible with ordinary commercial dealing. The essence of the agreement was that Sanpine would facilitate the obtaining of consents to enable Hunter Water to build the sewer line. Payment to Sanpine was to be made of $40,000 on signing the agreement, a further $40,000 on producing an appropriate letter of consent and a bonus of $20,000 if the letter was forthcoming before 31 December 2000. 30It was the prosecution case that the agreement was a sham or smokescreen to disguise payment to Smith for the consent being sought by Villa World. Suspicion was sought to be confirmed by the contrast between the completed agreement between Sanpine and Villa World on one hand and the draft prepared by Wilson which involved direct payment to Scott and Smith. Although the learned magistrate did not articulate the apparent paradox in this language, his overall observations convey an implicit recognition that suspicion would not have arisen if the draft agreement (which was commercially indistinguishable from the 24 November arrangement, ie payment for results) had become a completed agreement. In that case, there would be payment to Smith (and Scott). The difference was that Sanpine received payment from Villa World and it was Sanpine who paid Smith for what he would apparently have received had the terms of the draft agreement come into effect. 31What is apparent is that Sanpine had approached Smith for assistance and the performance of associated tasks. Smith was a person who wore multiple hats only one of which was his chairmanship of KLALC. 32By 13 December 2000 an assembly had been organised to view the affected land which would extend the sewerage to Wyee Point and a delegation from KLALC was arranged to call thereafter on the Mayor of LMCC at which time they presented him with a letter referring to this and other matters of development before LMCC and giving assurances of cooperation. 33On 11 December 2000 there had been what would appear to have been a formal letter from Hunter Water seeking approval of KLALC to construct, operate and maintain the sewer line. On 13 December 2000 after the meeting at LMCC, in explicit response to the letter of the 11th, a letter of approval signed by Smith and Stephen Griffen Treasurer was sent to Hunter Water on KLALC letterhead. It was apparently dispatched on a fax machine in LMCC offices. 34Thereafter Sanpine sent invoices to Villa World for monies due pursuant to the agreement of 24 November. Wilson also sent invoices for various services including discussions facilitating the finalisation of agreement charged for on the basis that he had previously agreement between Villa World and himself. Dates of providing services included 5th, 6th, 12th and 14th December. It is obvious that what happened on 13 December did not simply come "out of the blue". 35In the milieu there had been formed a Joint Venture Management Committee (JVMC) the meetings of which were duly minuted. It was chaired by Graham Steer (Steer) who was (by year 2000) one of the directors of Sanpine. The shareholding in Sanpine included corporations associated with Perkins and Steer. It is to be borne in mind that (at the stage the matter had reached the Local Court) the question was whether there was a prima facie case that the agreement between Sanpine and Villa World was a sham or smokescreen to disguise payments made to Smith for facilitating the KLALC consent to the sewer line being built. 36On 9 November 2000 a meeting of JVMC had taken place. The minutes record that heritage and cultural studies were almost completed and that a lot of work had commenced without agreement with Villa World being reached. It was further minuted that it was agreed that as a matter of urgency Perkins should complete the negotiations and agree a settlement with Billy (Smith) and Bob (Scott). This resolution can be viewed in the history which included a meeting of JVMC in September at which, inter alia, it was said and recorded that up to now KLALC had objected to the proposal for the sewer line. The context of the minute suggest that it was Smith and Scott who had done a lot of work without agreement with Villa World being achieved. A minute is just that, and a "settlement" would rationally infer that what was contemplated was payment for work done and it would not be necessary to elaborate in the minute what JVMC members would know, ie what was the work that needed to be paid for. 37In the event the agreement now sought to be impugned was executed some 15 days later between Villa World and Sanpine as parties. 38All of the above amounts to background sketching and, as I have already stated, I do not purport to recapitulate every aspect of the multitude of cross contacts and activities that had taken place. What is significant is that, if information was sought, what was occurring was documented. It was not documented of course in a single compilation but it was available to an appropriate seeker of information. The evidence did not purport to show that what was happening was being kept secret. 39That background is sufficiently indicative to enable a determination of the issue within jurisdiction in the current appeal namely whether the learned magistrate erred in his determination because, as the challenge asserts, he applied the wrong test in concluding that the charges should be dismissed. 40I turn then to the reasons for judgment. I repeat that these were delivered extempore and there were obvious asides during the oral delivery. Some criticism was made of what was said to be irrelevant emphasis on the events having occurred "a very long time ago". These comments can be understood in the context not only on the effluxion of time but of an exchange with counsel shortly before commencing the delivery of judgment. His Honour had been told that five or six years beforehand an administrator had been appointed to KLALC and the land had reverted to the title of NSWALC but there had been litigation extending as far as the High Court of Australia where it was ultimately confirmed that the administrator could properly rescind the joint venture agreement. 41It is perfectly understandable that extempore reasons may be open to attack by reason of a lack of structure or orderly progression which can be asserted in a hindsight analysis. That such an attack may be made does not bespeak error. 42The learned magistrate referred to the origin of the project and the obstacle caused by the absence of the consent to the building of a pipeline across KLALC land. He would have been aware that Hunter Water had necessary statutory power to enforce construction but that it had elected to seek consent along with assurance of non-interference both to the works and subsequent operation. He would also have been aware that Villa World was looking in multiple directions to see who could help to invigorate the stalled project. He noted that Wilson had been engaged as a consultant with skills in dealing with aboriginal issues and that a number of meetings had taken place and progress had been driven by him. 43His Honour noted that following the JVMC meeting at which it was agreed that Perkins was, as a matter of urgency to complete the negotiations and agree a settlement with Smith and Scott, the agreement was finally "engrossed and put together" by Villa World's in-house lawyer. That agreement, which is contended by the prosecution to be sham, expressly provided for payments by Villa World to Sanpine. As already stated Mr Cronin had given evidence that there was nothing contrary to ordinary commercial practice in the agreement. It is unsurprisingly silent about the entitlement of Sanpine to distribute any of its receipts to those whose activity had put it into position to be entitled to payment. Such a provision would not be expected to be articulated in such an agreement but it is plain that his Honour understood the implicit authority of Sanpine to deal with the money which it had received. Steer, who was a director of Sanpine, chaired the meetings of JVMC at which it was revealed that there was a need for some agreement of Villa World in order to pay for work that had already been done obviously, and not necessarily exclusively, by Smith and Scott. His Honour found expressly that the agreement sought to be impugned was a commercial arrangement and in so saying he must be taken to have rejected the contention that the agreement was some sort of sham. 44A contention that his Honour had given inappropriate weight to the absence of cross-examination of witnesses was made but I consider these remarks as general commentary on the considerable bulk of evidence which had been tendered before him which did not disclose that those witnesses were asserting furtive behaviour by the respondents. 45His Honour adopted, as he was entitled, some submissions which happened to have been made specifically on behalf of Wilson and although couched as rhetorical enquiry they encapsulated a critical circumstance, namely, that the money paid by Villa World to Sanpine could be used to defray the joint venture expenses that would necessarily be incurred in a normal development process and specifically arising from the need to conduct investigations. 46Money received by Smith was not characterised by anyone relevantly engaged in the development process as other than payment for his investigative contributions. The learned magistrate correctly directed himself that what he was required to do was to look for "something that might support the prosecution's proposition that, in effect, this documentation of this agreement is, in fact, just a smokescreen". 47He clearly answered this in the negative when he then said "there is nothing that I can see from anything that has been put to me". It was surplus to that negative expression to comment about the absence of cross-examination of witnesses but, even if that comment be irrelevant, it does not detract from the negative finding which was perhaps more conventionally expressed when he dismissed the charges and said "there is definitely no prima facie case on my point of view". 48An oblique reference to a High Court decision and the remark about his own doubt cannot be isolated from the finding that the evidence could not support the essential prosecution contention that the agreement was a sham. Any criminality had to flow from a finding that the evidence could sustain that proposition. 49The written submissions lodged in connection with the appeal by all parties analysed the evidence at considerable length. It is not open to me to substitute any findings I might make for those made in the Local Court. 50Read as a whole the reasons do not demonstrate that the learned magistrate applied any wrong test nor that the decision he made was not open to him. 51It follows that the appeal in each case should be dismissed and I so order.