Court of Appeal (WA)|2005-03-09|Before: Malcolm CJ

Milne v The State of Western Australia [2005] WASCA 38 (9 March 2005)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : MILNE -v- THE STATE OF WESTERN AUSTRALIA [2005] WASCA 38

Criminal law - Appeal - With intent to defraud, obtaining benefit by deceit - Inducement - Evidence - Approval by bank of overdraft facility - Misleading information supplied by applicant - Relied upon by bank officer recommending approval - Approving officer not called - Inference - Whether evidence capable of satisfying jury beyond reasonable doubt approval was induced by misleading information

Criminal law - Evidence - Accomplices - Warning - Corroboration - Form of warning - Whether necessary to identify evidence capable of constituting corroboration

Respondent : Commonwealth Director of Public Prosecutions

Aydlett & Nielson v The Queen, unreported; CCA SCt of WA; Library No 920346; 25 June 1992

Chidiac & Asfour v The Queen [1991] HCA 4; (1991) 171 CLR 432

Conway v The Queen [2000] FCA 461; (2000) 98 FCR 204

Davis v The Queen (1990) 5 WAR 269

Director of Public Prosecutions v Kilbourne [1973] AC 729

Galluzzo v The Queen (1986) 23 A Crim R 211

Kelleher v The Queen [1974] HCA 48; (1974) 131 CLR 534

Khan v The Queen [1971] WAR 44

Longman v The Queen [1989] HCA 60; (1989) 168 CLR 79

Nanette v The Queen [1982] VicRp 8; [1982] VR 81

R v Baskerville [1916] 2 KB 658

R v Lindsay (1977) 18 SASR 103

R v Sherrin (No 2) (1979) 21 SASR 250

Raspor v The Queen [1958] HCA 30; (1958) 99 CLR 346

Schokker v The Queen [2001] WASCA 84

Lander v The Queen (1989) 52 SASR 424

1 MALCOLM CJ: In my opinion, this appeal against conviction should be dismissed. I have reached this conclusion for the reasons to be published by Roberts-Smith JA with which I agree. I only wish to add some comments of my own. The contention in ground 1 was that the evidence in respect of inducement was not capable of excluding any reasonable hypothesis consistent with innocence. The question whether there is evidence upon which a jury may reasonably find an issue in favour of a party upon whom the burden of proof rests is a question of law: Raspor v The Queen [1958] HCA 30; (1958) 99 CLR 346. In my opinion, the evidence of Mr Naquesage which is dealt with in the reasons to be published by Roberts-Smith JA was sufficient for that purpose, given that no objection was taken at the trial to the evidence of Mr Naquesage's hearsay evidence that Mr Mitchell had advised him that the relevant application for finance had been approved. Once admitted, that evidence was capable of establishing the necessary element of inducement for the purposes of s 409(1)(a) of the Criminal Code on the basis that Mr Naquesage was induced to recommend approval to Mr Mitchell on the basis of the material supplied by the applicant which left it open to the jury if they were satisfied beyond reasonable doubt that it was that material emanating from the applicant which likewise induced Mr Mitchell to approve of the financial accommodation which was the subject of the application by Allied Carpet Industries Pty Ltd.

2 STEYTLER P: I agree with Roberts-Smith JA, for the reasons which he has given, that leave to appeal should be refused. There is nothing I wish to add.

3 ROBERTS-SMITH JA: By an indictment dated 15 April 2003 the Deputy Commonwealth Director of Public Prosecutions, acting on behalf of the Crown in right of the State of Western Australia by delegation from the State Director of Public Prosecutions, charged the applicant on indictment with two counts under s 409(1)(c) of the Criminal Code (WA).

4 Count 1 alleged that between 7 and 10 April 2000 at Perth the applicant, with intent to defraud, by deceit gained a pecuniary benefit for another, namely an overdraft facility with the National Australia Bank Ltd ("NAB") in the sum of $150,000 for Allied Carpet Industries Pty Ltd ("ACI"). Count 2 alleged that between 12 June and 13 July 2000 at Perth the applicant, with intent to defraud, by deceit gained a pecuniary benefit for another, namely an overdraft facility with the NAB in the sum of $176,000 for ACI.

5 The applicant was tried before her Honour Judge French and a jury in the District Court at Perth from 3 to 13 May 2004. At the conclusion of the trial, the jury by unanimous verdict, acquitted the applicant of count 1, but found him guilty of count 2. On 13 May 2004 the applicant was sentenced to a term of 16 months imprisonment suspended for a period of 2 years. By application dated 19 May 2004 the applicant applied for leave to appeal against conviction.

6 In summary, the prosecution case was as follows. Michael Simich was the Director and effectively the owner of ACI. He had been in the carpet industry for some time. He met the applicant in early 1998 when the latter was working for the NAB. He dealt with the applicant in relation to the businesses he was running at that time. As a result of that relationship the applicant ceased to work for the Bank and began working for Simich and particularly assisted him in incorporating and establishing ACI from early 1999.

7 The applicant was appointed company secretary. He was also the financial controller and as such had access to, and had to maintain, the financial records of ACI and to provide financial information to institutions such as the NAB for the purposes of obtaining overdrafts.

8 From the inception of the business there were two aspects to its operations. The first was within Australia, obtaining contracts for the laying of carpets in residential or commercial premises. The second was a connection with Malaysia through Simich, whereby it was intended to establish a new factory which would enable ACI to make its own carpets, be the sole purchaser and importer of them into Australia and sell them on.

9 It was necessary for ACI to raise funds for both these purposes. In his previous businesses, Simich had done this by raising funds from individuals in the community generally on a short term basis on very generous terms. There was evidence that an investment for two to three months would give a return somewhere between 20 and 30 per cent in 1999 and 2000.

10 Money was raised either from individuals directly or through what were referred to as "teams". The teams worked through particular individuals who might be associated with the company or alternatively might themselves be an investor, who recruited others to come into the enterprise and give money. The individual would be referred to as the "team leader" and it was his or her responsibility to secure money from the persons they brought in. ACI lasted from March 1998 to October 2000. By that time there were 156 investors and approximately $15,000,000 had been raised.

11 The individual investors or team leaders would come to the office to collect their interest payments weekly or monthly. The commitment of the company of course was to make regular payments of interest to the investors. Most investors were paid by cheque which would then have to be put through the accounting system in the office. Because of the large number of investors and the regular payments of interest, cheques had to be drawn daily from ACI's accounts. Simich, along with other members of the office including the applicant, prepared a list of who had to be paid and arrangements were then made for their payment by cheque.

12 The inevitable happened. There was more money going out than coming in. Cheques were dishonoured. There were regular occasions when the company account was in debit rather than credit. To accommodate that situation, Simich initially applied for a temporary overdraft of $150,000. It was that application which was the subject of count 1. The NAB approved the temporary overdraft in April 2000.

13 It became apparent that the temporary overdraft was not sufficient. ACI applied to the Bank for a permanent overdraft facility in an amount of $176,000 in June 2000. That was the application which relates to the second count. The Bank naturally wanted detailed financial information in support of the application. The documents which were supplied included a company balance sheet. The Crown case was that the liabilities to investors, that is the amount of the principal and interest owing to investors, were not shown. A cash flow forecast was also supplied which purported to show moneys expected to be coming into the company and moneys expected to be paid out. The payments of interest to investors which ought to have been shown there, were not.

14 In October 2000 the applicant placed ACI into administration. In the meantime, between the original application for the second overdraft of 13 June 2000 and October, further reports required by the NAB were supplied by the company but again did not include the information relating to the investor debtors.

15 Mr Bruno Naquesage was the Business Banking Manager of the NAB Hay Street branch West Perth. The applicant wrote to him by letter dated 13 June 2000 providing certain information which Mr Naquesage had requested in relation to the cash flow documents that the applicant had prepared and provided in support of the application.

16 By letter dated 14 June 2000 the applicant wrote in relation to the profit and loss statement and enclosing the "interim financials" to 31 May 2000 with a copy of the financial report to 30 June 1999, which he said he had prepared in consultation with the accountant John Pascoe. They included 6 month projected cash flows. The applicant wrote that he and Pascoe had spent some time in ensuring that the information they had supplied was accurate.

17 The prosecution case was that the financial system within the office used MYOB software and was set up and maintained by the applicant and he therefore knew what the real financial position of the company (including that with respect to investor liabilities) was. It was therefore the Crown case that the applicant knew the information supplied to the NAB for the purpose of obtaining the permanent overdraft was false.

18 In July 2002 Simich pleaded guilty to some 59 charges of stealing and fraud involving over $3,000,000 of what was primarily investors' funds. He was ultimately sentenced to 6 years' imprisonment, which included a substantial reduction for his cooperation with the authorities and his undertaking to give evidence against the applicant.

19 Naquesage gave evidence that having received the information from Simich and the applicant, he made further enquiries, sought more information, and prepared a recommendation to his superior, Mr Michael Mitchell, that the permanent overdraft facility be granted subject to certain conditions. His evidence was that the overdraft was subsequently approved on those conditions.

20 Mitchell was not called. No reason was given for that, but it effectively gives rise to the first ground of appeal.

1. the evidence in respect of the element of inducement was not capable of sustaining conviction, or in the alternative, the evidence was not capable of excluding any reasonable hypothesis, consistent with innocence;

2. the learned trial Judge erred in law by failing to direct the jury adequately as to corroboration and in particular failed to identify any evidence capable of amounting to corroboration of the evidence of the witness Michael Simich.

22 The application for the permanent overdraft facility was assessed by Naquesage. His evidence was that he reviewed all the relevant documentation presented to him by ACI (and the applicant) and prepared a memorandum (exhibit 27) directed to his superior, Mitchell. He recommended approval of the permanent loan facility in the amount of $176,000. Naquesage had no authority to approve the application; he did have a discretion whether or not to make the recommendation. The discretion was one to be exercised in accordance with the policy of the Bank.

23 On the appeal, counsel for the applicant submitted that Naquesage was unable to say whether or not Mitchell's ultimate approval of the application was communicated to him by Mitchell in writing or orally. It was further submitted that in any event, it was Naquesage's hearsay evidence that Mitchell advised him the application had been approved. Counsel frankly conceded that no objection to that evidence had been made at trial. He said that was because he considered it was admissible not as truth of the fact but as proof of the fact that Naquesage had been told that. Be that as it may, counsel's understanding of the limited use to which that evidence could be put was not expressed by him at any stage at the trial. That being so, the evidence was in for all purposes.

24 However the gravamen of this ground, and the applicant's submission, is that there was no evidence upon which the jury could be satisfied beyond reasonable doubt (nor at all) that the approval by Mitchell was induced by the applicant's deceit. At trial, that argument was the basis of a no case submission at the close of the prosecution evidence. The learned trial Judge ruled there was a case to answer and specifically, that there was evidence from which the jury could infer the applicant's deceit was an operative inducement in gaining Mitchell's approval. The applicant did not adduce evidence in his defence.

25 Before us, counsel for the applicant submitted that where no further evidence is called following an unsuccessful no case submission, there is no practical difference between an appeal against the rejection of the submission and an appeal against the conviction. It was submitted that the question relevantly in each instance is whether the evidence is capable of sustaining the conviction or, in a circumstantial case (as in this appeal) whether the prosecution is able to exclude any reasonable hypothesis consistent with innocence. The authority cited in support of that proposition is Davis v The Queen (1990) 5 WAR 269. That case is not authority for the proposition as expressed. There the appellant had been convicted of possessing cannabis with intent to supply it to another. One of the grounds of appeal was that the verdict of the jury was unreasonable on the evidence and further, that the learned trial Judge should have upheld the defence submission at the close of the Crown case that there was no case to answer. Malcolm CJ said (at 271) that the second ground was inappropriate because there is no appeal from the refusal of a trial Judge of a defence submission of no case to answer. The appeal is against the conviction. His Honour pointed out that in substance the ground as argued was that on the evidence it was not open to the jury to convict because there was insufficient evidence of possession.

26 The proposition appears to be taken from the commentary in "Criminal Law - Western Australia" at [s 636.35] in which the learned author was discussing the distinction between a situation in which a submission of no case to answer was unsuccessful and the accused then did not give, nor call evidence and that in which following such an unsuccessful submission the accused did lead evidence. The point of the discussion was to raise the question whether in the latter circumstance the appellate court could take into account the evidence given by or on behalf of the defence and whether, if the whole of the evidence in the case would sustain the guilty verdict, no miscarriage of justice could be said to have occurred. That question does not arise in the present case. Whilst it may be true to say that in this case there is no practical difference between an appeal against the rejection of the submission of no case to answer and an appeal against the conviction, that is an unnecessary observation, the only potential of which is to distract from the fact that the appeal is against the conviction.

27 It was common ground both before us and at trial that in proof of an offence contrary to s 409(1)(c) of the Criminal Code, it is necessary for the prosecution to adduce evidence to satisfy the jury beyond reasonable doubt that the NAB, in approving the permanent overdraft, was induced to do so by the deceit of the applicant. That is undoubtedly correct. The section requires the pecuniary benefit to be gained "by deceit". That necessarily means that the deceit must have been an operative cause of the giving of the benefit.

28 It is true there was no direct evidence from Mitchell of what it was that caused him to approve the application. For obvious reasons, the fact of inducement will ordinarily be proved by oral testimony from the person said to have been induced. He or she will usually be asked a question like "Why did you do it?" or "What caused you to do that?", although that is not the only form of question that may properly be put, as Parker J pointed out in Schokker v The Queen [2001] WASCA 84 at [56]. Furthermore, as Parker J there went on to say, the inducement may sufficiently appear as a matter of inference even though no specific question and answer deals with the point.

29 In the present case the prosecution argued that the fact that the false information provided by the applicant was an operative inducement to Mitchell approving the overdraft, was the inevitable inference to be drawn from the evidence.

30 Counsel for the applicant conceded that Naquesage was induced by the false representations made by the applicant to recommend to Mitchell that the permanent overdraft be granted. But he submitted that made no difference because Naquesage had no authority to actually approve the application himself; what had to be shown was that the false information supplied by the applicant induced Mitchell to approve it.

31 For present purposes it is not necessary to detail the specific information concerned - it is sufficient to describe it generally as information relating to ACI's cash flow and liabilities to investors.

32 In his evidence Naquesage explained what the Bank required him to consider when assessing whether or not to recommend the approval of an overdraft facility. These were factors which as a matter of Bank policy were required to be taken into account. He said the most important thing was that the supportive evidence such as creditors and cash flow related figures showed that the debt would be repaid within the agreed time. The Bank would expect to be told what was owed by and owing to, the applicant. There would be concern if there was found to be a lack of disclosure of creditors to the Bank because that would create risk for the Bank. A list of outstanding debtors was important because that would give an idea of the amount of income or revenue to be coming into the company in the short term, which would be how the Bank would be repaid. He observed that an overdraft is a type of advance to supplement cash flow and it gets repaid by cash flow. If anything goes wrong with the cash flow, then the Bank could act on its security. The considerations the Bank would need to satisfy itself about in relation to the granting of a permanent overdraft were the same as for a temporary overdraft. Later, he emphasised that it was important that the Bank understand the cash flow because it was from the cash flow that the Bank would be repaid. He pointed out that the Bank could only lend against the figures it was given and in this case the Bank lent against the figures provided in support of the application. Of course, that evidence has to be taken as indicating no more than that that was the basis upon which he made his recommendation, having regard to the policy of the Bank as to the criteria which had to be applied.

33 Naquesage's memorandum to Mitchell in which he recommended approval of the application was dated 12 June 2000 (exhibit 27). The memorandum had been prepared in reliance upon the information provided by the applicant and Simich. He expressly referred to the cash flow forecast for the period "05/00 to 12/00", which he wrote had been produced by Simich and the applicant. He also set out details of the company's expenses related to cash flow. The debt servicing table in the memorandum was based on the profit and loss account to 30 June 1999 and the interim profit and loss account to 31 May 2000. The memorandum included the comment that repayment of the debt was reliant on the ongoing profitability of ACI and "on the above figures" it appeared ACI was very profitable and had the capacity to pay its debts. He recommended approval of the permanent overdraft subject to a number of conditions including that a monthly cash flow actual to budget report be provided within seven days of the start of each month.

34 It was Naquesage's evidence that Mitchell "would have signed as approved" a copy of the summary (although that was not in evidence) but in any event Naquesage was informed the approval had been given and he therefore wrote to the directors of ACI on 27 June 2000 advising them accordingly. In that letter he noted that the attached business secured overdraft agreement set out the terms and conditions of the facility but that certain other conditions would be applicable, which he then set out. They were identical to those which he had recommended.

35 On Naquesage's evidence it was in my opinion, properly open to the jury to draw the inference that in considering the application and Naquesage's recommendation, Mitchell would have had regard to those relevant considerations which Naquesage had identified as Bank policy relevant to such applications. The information provided by the applicant was sufficient to satisfy Naquesage that the Bank's requirements had been met, although he still recommended certain conditions by way of safeguard. The factors identified by Naquesage were those which Mitchell was bound to apply in accordance with Bank policy. It follows that the same things which were seen by Naquesage as being important for that purpose would necessarily have been important for Mitchell.

36 The question then is, as was submitted by Mr Brennan for the applicant, whether on the evidence there was any other reasonable hypothesis consistent with innocence in this respect - that is, whether it was reasonably possible Mitchell could have approved the overdraft without being induced by or relying upon the false information provided by the applicant.

37 In this regard it was submitted, for example, that Mitchell may not have considered the contents of Naquesage's memorandum at all. That, I think, in the circumstances, would not be a reasonable hypothesis.

38 It was further submitted that Mitchell may have been induced solely by the security of the first mortgage over the property owned by ACI and Simich. Given Naquesage's evidence about the importance of cash flow, however, and the fact that it was from cash flow that the Bank expected repayments to be made, it is again in my view not a reasonable hypothesis that Mitchell may have relied solely on the availability of security without any operative regard at all to the company's ability to service the debt from cash flow.

39 Then it is submitted that the NAB extended the original temporary overdraft facility in any event, regardless of the information provided by the applicant and Naquesage's memorandum, as was shown by the fact that subsequent to the expiration of the temporary overdraft the Bank continued to meet all cheques drawn and presented on the account in any event up to some $156,000.

40 In my view that submission misstates the position. The fact that the Bank continued to meet ACI cheques notwithstanding the account was not in funds did not amount to an "extension" of the original overdraft facility. That was a process which Naquesage described as occurring not infrequently on customers' accounts and in each instance the Bank would make a decision whether to meet the customers' cheques or dishonour them based upon information relating to the situation on the day. Additional bank fees were also involved. That was a process which was not involved when an overdraft was approved or extended. The decisions made in that way were quite different to a decision whether or not to actually approve or extend an overdraft to a particular limit.

41 On the evidence, if the jury accepted it (which they obviously did) not only was it open for them to be satisfied beyond reasonable doubt that the false information provided by the applicant was an operative cause and therefore an inducement to Mitchell to approve the facility, but that was the inevitable inference.

43 It was accepted that Simich was a witness in respect of whom the jury had to be given a warning notwithstanding the provisions of s 50 of the Evidence Act 1906.

"(1) In this section 'corroboration warning' in relation to a trial means a warning to the effect that it is unsafe to convict the person who is being tried on the uncorroborated evidence of one witness.

(2) On the trial of a person on indictment for an offence -

(a) the judge is not required by any rule of law or practice to give a corroboration warning to the jury in relation to any offence of which the person is liable to be convicted on the indictment_;_ and

(b) the judge shall not give a corroboration warning to the jury unless the judge is satisfied that such a warning is justified in the circumstances."

45 Section 50 replaced s 36BE which provided that on the trial of a person for a sexual offence the trial Judge was not required to warn the jury that it was unsafe to convict on the uncorroborated evidence of the complainant, which was the subject of consideration by the High Court in Longman v The Queen (1989) 168 CLR 79. Section 50 is a general provision applying to all offences and applies also to the evidence of accomplice witnesses.

46 The application of s 50 in the context of a case involving the evidence of an accomplice was explained by Parker J in Foo v The Queen [2001] WASCA 406; (2001) 167 FLR 423 at [12] - [21].

47 A warning is required whenever it is necessary to avoid a perceptible miscarriage of justice. Each case is to be considered on its own facts and the terms of the direction are to be tailored to the circumstances of the case. The fact that a witness has been given immunity from prosecution should generally be mentioned and explained to the jury (Aydlett & Nielson v The Queen, unreported; CCA SCt of WA; Library No 920346; 25 June 1992).

48 In Foo, Parker J (with whom Steytler J and Olsson AUJ agreed), said at [30]:

"It has long been settled that even a full conventional accomplice warning does not involve any particular form of words; see for example Wong v The Queen [2001] WASCA 32 at [28]. Notwithstanding the effect of s 50, however, it will usually be essential in this State, in an appropriate case, that a jury receive a clear and emphatic warning from the trial judge of the potential dangers in acting on the evidence of a witness to convict, which dangers exist because that witness is an accomplice, and which the jury might not appreciate without the warning. That will usually be essential whether or not the evidence of the witness is the sole evidence and whether or not there is corroboration of that evidence. The form of the direction may well differ inter alia by virtue of those matters. While other matters will often be the subject of at least comment to the jury, in respect of the evidence of an accomplice the direction given needs to be more than mere comment. It should convey this warning to the jury and do so with strength and emphasis."

49 On the point whether a particular form of words is required, Olsson AUJ said in the same case at [101]:

"... It would be most unfortunate if this Court was seen to mandate use of a rigid formula of words, borne of a past legal and social environment, which had the practical effect of seeking to qualify or circumscribe the degree of flexibility contemplated by the High Court in Longman..."

50 The facts in Foo were relevantly that the appellant was convicted of an offence of having in his possession prohibited imports, namely not less than the commercial quantity of heroin, which was reasonably suspected of having been imported into Australia in contravention of the Customs Act 1901, contrary to s 233B of that Act. The prosecution relied upon the evidence of an accomplice Voong. There was no other evidence, independently of Voong, which was capable of corroborating Voong's evidence so far as it related to the appellant's knowledge of the contents of the backpack containing the heroin.

51 At the conclusion of the trial the trial Judge indicated that she did not propose to direct the jury that it was dangerous to convict on the uncorroborated evidence of an accomplice and then describe what was capable of amounting to corroboration only then to tell them that there was none. As Parker J explained, the point of those observations was that there was no evidence capable of corroborating Voong's evidence and that being so, what was described as "entirely pointless" was a direction which sought to spell out to the jury the nature of corroborative evidence, only to direct them at the end of it that in that case there was no evidence of the requisite character.

52 Parker J concluded that, in the circumstances of the case, Voong being an accomplice, and his evidence relevantly being uncorroborated, the trial Judge was entirely correct to perceive that it was necessary to warn the jury of the potential dangers of acting on his evidence to convict the appellant. His Honour concluded that the total effect of the direction given in that case was to constitute a most emphatic warning to the jury of dangers, both hidden and obvious, attending Voong's evidence, including those by virtue of his role as an accomplice. Furthermore, there was nothing in the direction which could have had the effect of diluting or diminishing or qualifying the force and effect of the warning given and the risks that were identified ([33]). His Honour was not persuaded that there was any perceptible risk of a miscarriage of justice from the form of the direction given in the particular circumstances of the case, although his Honour added (at [37]):

"... it would not be an appropriate or adequate direction in the usual case where there was some evidence capable of corroborating the accomplice"

53 Counsel for the applicant submitted that the learned trial Judge did not instruct the jury that it was unsafe to convict on the uncorroborated evidence of Simich because he was an accomplice, nor did she give the jury any proper direction as to the nature of corroboration and there was a complete failure by her to identify what evidence there was which the jury might accept as corroboration. It was further contended that her Honour's directions did not with strength and emphasis, nor at all, speak to the danger of convicting on Simich's uncorroborated evidence alone.

54 Her Honour's directions on the point were as follows (AB 611 - 612):

"... referring again to Mr Simich. Mr Simich, as I have said - it has been submitted quite strongly by the defence - is simply not somebody who can be believed and I am not going to elaborate on that. You will recall all that was said about him but I think one of the things - no doubt that is something you will take into account because as you know from what he said he was, perhaps he could be regarded as the main organiser, initiator in all that was going on in all of this and whether you think he seems to certainly have a firm belief that it would have all worked out if somebody in Malaysia hadn't done the wrong thing or it would have worked out in time, you might, in fact, form the view that he is somebody who is very careless with other people's money and that may affect your view of his credibility.

It is also important that you remember that he is, what the law has described as an accomplice. He was charged with a whole range of offences including offences relating to these matters and he, in fact, not only was he charged he was dealt with by the court and sentenced to a term of imprisonment and that as a result of his cooperation and his agreement to give evidence in relation to Mr Milne he, in fact, received a lower sentence, some two years off what he would otherwise have received. It has also been pointed out and you can accept it, that if, in fact, he does not cooperate and do what he agreed to do and give evidence that he could be brought back to court and resentenced.

What that simply means is that you have to bear that in mind and the reason why it is important is that because of those factors you might think that he has an obvious motive to lie, if, in fact, he is not telling the truth. It doesn't mean that you cannot accept his evidence. You may decide, as I said it's up to you to decide what evidence you accept and what evidence you reject but I need to warn you that it could be, in those circumstances, it could be dangerous to do so unless you were satisfied, bearing in mind what I have said, that his account is a truthful, reliable account and in circumstances where it has been corroborated or confirmed by independent evidence, that is, other evidence not evidence from Mr Simich."

55 Although the authorities do not require a trial Judge to use any particular form of words when giving an "accomplice" direction, much less necessarily to use the words "unsafe" or "dangerous", it is immediately apparent that her Honour did in fact tell the jury it could be dangerous to convict unless, bearing in mind the factors to which she had specifically referred, his account was truthful and reliable and had been corroborated or confirmed by other evidence independent of Simich.

56 That direction was in fact unnecessarily favourable to the applicant in that it warned the jury it might be dangerous for them to accept Simich's evidence unless both satisfied of its truth and accuracy and there was independent evidence confirming it. An appropriate direction would have been to warn the jury of the danger of convicting in the absence of confirmatory evidence, but nonetheless explaining they could do so if satisfied to the requisite degree that Simich's evidence was truthful and accurate (Kelleher v The Queen [1974] HCA 48; (1974) 131 CLR 534, 553).

57 The factors referred to by her Honour as those to which the jury must have regard, included that Simich was the initiator and main organiser of what was going on, that they might form the view he was "very careless" with other people's money and that might affect their view of his credibility. She said it was "important" they remember he was what the law describes as an accomplice and she properly drew attention to the fact that for his cooperation and promise to testify against the applicant, he received a sentence lower by 2 years than he would otherwise have received. Her Honour told them then they could accept that if he did not cooperate and do what he had agreed to do, Simich could be brought back to court and re-sentenced. She said the reason all that was important was because they might think he had "an obvious motive to lie". All these were the factors bearing upon Simich's evidence which the jury, without such direction, might not have appreciated. They were the factors which her Honour told them meant that it may be dangerous to convict. The direction was appropriate (Conway v The Queen [2000] FCA 461; (2000) 98 FCR 204). This was not a case in which Simich could conceivably have sought to convey the impression the applicant was the instigator or main proponent of what was done - although, as her Honour appropriately drew to the jury's attention - he had a possible motive to lie by implicating the applicant so as to preserve the sentence reduction he had obtained by his promise to give evidence to that effect.

58 On the hearing of the appeal, counsel for the applicant was invited by the Court to suggest the form of direction it was being submitted her Honour should have given. Beyond saying her Honour should have given the direction with greater strength and emphasis, he was unable to do so.

59 Insofar as her Honour's directions addressed the need to caution or warn the jury about the danger of acting on Simich's uncorroborated evidence, it was sufficient to bring the danger to their minds to enliven them to what particular considerations bore on that, and why it was so.

60 Counsel did maintain the submission that her Honour erred in failing to direct the jury on what amounts to corroboration and in failing to identify the particular evidence which was capable of constituting corroboration in this case. Corroboration is independent evidence which connects, or tends to connect the accused with the offence charged. It must be evidence which implicates him, that is which confirms in some material particular, not only the evidence that the offence has been committed, but that the accused committed it:

"Corroborative evidence is evidence which shows or tends to show that the story of the accomplice that the accused committed the crime is true, not merely that the crime has been committed, but that it was committed by the accused." (Per Lord Reading CJ in R v Baskerville [1916] 2 KB 658, 667)

61 It should usually be explained that corroboration need not be direct evidence of the participation of the accused, nor must it confirm the whole of the accomplice's testimony, provided it makes that testimony more likely than not to be true, in some respect material to the charge (Galluzzo v The Queen (1986) 23 A Crim R 211 at 213).

62 Following her summing-up in the absence of the jury, the learned trial Judge asked counsel if there was anything they wished to raise. In relation to this, counsel for the applicant said he may have missed it, but queried whether her Honour had explained the meaning of the notion of corroboration. Her Honour said she had, when she told the jury it was dangerous to accept Simich's evidence unless they looked at it very closely, where [sic: mindful of] all of the warnings that had been given and:

"... unless it's confirmed by other evidence, independent evidence, that is evidence that doesn't come from him." (AB 619)

63 Counsel responded simply that he had not heard that and he had nothing further to say.

64 In her direction to the jury her Honour used the expression "corroborated or confirmed". It is desirable that the word "corroboration" not be used, for the reasons explained by Lord Hailsham in Director of Public Prosecutions v Kilbourne [1973] AC 729, 741, quoted with approval by McPherson J in R v Kerim [1988] 1 Qd R 426 at 478. It is preferable to explain the nature of the evidence required as being such as tending to support the evidence of the accomplice, in the sense of making it more probably true than not (see R v Sherrin (No 2) (1979) 21 SASR 250; R v Lindsay (1977) 18 SASR 103; Nanette v The Queen [1982] VicRp 8; [1982] VR 81, 279 and Chidiac & Asfour v The Queen [1991] HCA 4; (1991) 171 CLR 432).

65 Although at [10] of his outline of submissions, counsel for the applicant submitted that:

"... the trial judge failed to point to other evidence that may comprise corroboration for example, the evidence of the prosecution witness Pascoe at AB 413"

he was not prepared to accept that the evidence of Pascoe to which he referred was capable of constituting corroboration as opposed to being peripherally confirmatory of Simich's evidence. He said he was unable to identify any evidence which was capable of constituting corroboration.

66 If the situation was that there was no evidence capable of being corroborative, then for the reasons given by Parker J in Foo, it would have been a pointless (and indeed distracting) exercise for her Honour to have given an explanation of what corroboration was as a matter of law, only then to have had to say there was none in this case. The direction required would have been to express the caution or danger in the absence of corroborative evidence and to point out there was none.

67 The learned trial Judge appears not to have been of that view. Her direction about why it could be dangerous to convict, unless (inter alia) Simich's evidence was "corroborated or confirmed" by evidence independent of Simich, suggests she considered there was evidence of that character.

68 In a case in which because of its circumstances a corroboration warning is required, the trial Judge will ordinarily be required to give at least a broad indication of the evidence which, if the jury were to accept it, they could treat as corroborative (per Burt CJ in Khan v The Queen [1971] WAR 44 at 53; R v Sherrin (No 2) (supra)) or, more usually, to identify the particular evidence the jury might accept as having that character. Her Honour did not do that. The question is whether it was required in the circumstances of this case.

69 We asked counsel for the respondent to identify for us what the respondent contended was evidence corroborative of Simich. Subsequent to the hearing, counsel provided a further outline of submissions (dated 22 February 2005) referring to evidence which it was submitted had that quality.

70 The essential element in respect of which the evidence of Simich implicated the applicant, was that the applicant knew of the falsity or misleading nature of the information supplied to the NAB. As her Honour pointed out (AB 594 - 495), even in that respect, the prosecution was not relying only on Simich's evidence, but on cheque butts and bank statements with which the applicant was familiar and his "intimate knowledge" of the number of investments and the amount of money involved in terms of the effect that would have on the liability of ACI and in particular on the amount of interest that was being paid out on a regular (and even daily) basis to the investors. She pointed out the prosecution case was that all of that was evidence the applicant knew what was not revealed in the profit and loss statements and the cash flow charts and therefore that the information being conveyed was false. She went on to point out that just the list of the applicant's own [team of] investors and that of Pascoe, totalled $2.5 million - and that information was not contained in the documents provided by the applicant to support the application for the June overdraft. She also referred to an email from the applicant to Pascoe about the financial information to be provided to the NAB (exhibit 57) and the latter's evidence about that (at AB 413). It is apparent from the email that the applicant was aware relevant financial information which ought to have been included, was not. For instance, he wrote to Pascoe that:

"... the only thing which you should know about is that the bank does not know about the investors ..."

71 There was other evidence of this kind. It included evidence that the applicant handled the supporting documents for the second overdraft and knew that the information in them was false, including his time sheets showing work for the bank on the cash flow and loan and, other faxes and emails to Pascoe.

72 While generally a trial Judge should identify the evidence capable of amounting to corroboration in a case in which a warning is necessary, failure to do so does not always mean the direction was inadequate.

73 In Chidiac v The Queen (supra), Gaudron J explained (at 460):

"Although it is usual practice for a trial judge to explain what is meant by corroboration and, in appropriate cases, to explain that one accomplice cannot corroborate the evidence of another accomplice, the critical requirement is that the jury be left in no doubt that it should look to see whether, elsewhere in the evidence, there is something that strengthens the evidence of the accomplices by confirming or tending to confirm the involvement of the accused in the events as related by them: see R v Baskerville [1916] 2 KB 658, at p 667; Reg v Hester [1973] AC 296, at p 325; Dony v The Queen [1990] HCA 51; (1990) 171 CLR 207, at p 210-212. Given the limited nature of the matters in issue and the trial judge's criticism of the evidence of the informer-accomplices, the directions given, even though not expressed in conventional terms, left no room for doubt that that was the task to be undertaken by the jury. Directions in the more conventional form could only have served to draw attention to the respects in which other evidence was capable of corroborating the evidence of the informer-accomplices. It is not surprising that further directions were not sought. ..."

74 What her Honour there said was quoted and applied by Seaman J in Aydlett v The Queen (supra).

75 Having noted (at 20) that in accordance with s 50 of the Evidence Act the trial Judge was not obliged to give any direction to the jury about the danger of convicting upon the accomplice's evidence until he was satisfied of the justification for the giving of a warning, and that the warning which he might then give would be tailored to the circumstances of the particular case, not necessarily following the form of warning which had traditionally be required in relation to accomplices by the common law, Seaman J made the observation that in his view, what Brennan, Dawson and Toohey JJ said in Longman at 86 applies with equal force to a warning given under s 50(2)(b):

"In practice, the warning given under the rule of practice varies from case to case. There are no set words and the terms of the warning are adapted to the particular circumstances".

76 After further discussing the nature of the warning required, his Honour concluded that the trial Judge had been right in that case to avoid imbalance against the applicants by declining to make reference to the matters capable of corroborating the accomplice's evidence and that his charge to the jury in that respect was entirely apt to avoid any risk of the miscarriage of justice. His Honour at that point referred to the passage of the judgment of Gaudron J in Chidiac which I have set out above.

77 Pidgeon and Ipp JJ took a similar view. Pidgeon J considered (at 19) that the reasons for his Honour's refusal to specify the evidence capable of constituting corroboration were that to do so would be greater prejudice to the defence than benefit and that a summary of that evidence would almost inevitably lead a jury to the conclusion that the applicants' explanations could not be accepted.

78 Ipp J was satisfied (at 46) that there was evidence which was capable of constituting corroboration and he was quite satisfied it would have been to the disadvantage of the applicants if the trial Judge had itemised the separate evidence because it "would have reinforced a powerful Crown case against them".

79 I accept the respondent's submission that there was in this case, considerable evidence capable of constituting corroboration of Simich's testimony. In the circumstances, a detailed itemisation of that (or even broad reference to it) would clearly only have reinforced the jury's acceptance of Simich's evidence implicating the applicant in respect of count 2, and it might well have served to emphasise the force of the prosecution case. The failure to deal with the evidence in that way did not operate to the disadvantage of the applicant. There was no unfairness to the applicant in her Honour not referring to the particular evidence which was capable of corroborating Simich's evidence (that is, tending to show it was more likely to be true than not).

81 For the reasons expressed above, I would refuse leave to appeal.

Milne v The State of Western Australia [2005] WASCA 38

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Judgment (120 paragraphs)

Milne v The State of Western Australia [2005] WASCA 38 (9 March 2005)

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Cases Cited (13)