procedural. The notice of motion filed 13 February 2020 seeking a stay until Cranston could secure adequate legal representation was dismissed.
Key principles
A person seeking a stay under Dietrich bears the onus, on the balance of probabilities, of proving indigence, inability to obtain legal representation, and that the inability is...
Cranston did not discharge the onus of proving indigence. Although the Court accepted that his trial was serious, complex and lengthy, that he could not adequately conduct his...
A stay was therefore refused. The relevant question was whether Cranston could afford appropriate representation for this trial, which the Court estimated would cost at least...
Issues before the court
Whether Cranston met the requirements for a Dietrich stay because he could not obtain legal representation.
How the cost and complexity of the trial affected the indigence assessment.
Whether Cranston's past spending and financial decisions showed that he was responsible for his inability to fund representation.
Whether assets restrained under POCA could be used directly to fund Cranston's defence.
Plain English Summary
Cranston asked the Court to pause his criminal trial because his property was restrained and he said he could not afford a lawyer. The Court agreed that the trial was serious, complicated and costly, and that he could not properly defend himself without a lawyer. It also accepted that legal aid and pro bono representation were not available to him. But he still had to prove that he could not afford appropriate representation. The Court was not satisfied because evidence about his employer's substantial contribution to his legal fees raised a realistic possibility that funds connected to him had been placed in businesses. The Court therefore dismissed the stay application. It also made broader observations about the practical effects of POCA and legal aid, but those observations were not the basis for the result.
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Deep Dive
2,324 words · generated 30/09/2026
Cited legislation
2 cited instruments linked from this judgment.
What happened
In R v Cranston [2020] NSWSC 469, Beech-Jones J considered a pre-trial application by Adam Cranston to stay his criminal proceedings until he could secure adequate legal representation. Cranston was charged with two conspiracy offences: conspiring to dishonestly cause a loss to the Commonwealth, contrary to s 135.4(3) of the Criminal Code Act 1995 (Cth), and conspiring to deal with at least $1 million while believing it to be proceeds of crime, contrary to ss 11.5(1) and 400.3(1) of that Code. The maximum penalties recorded by the judgment were ten and twenty-five years' imprisonment respectively (Judgment [1]).
Cranston pleaded not guilty and was due to stand trial with three co-accused on 10 August 2020. His motion, filed on 13 February 2020, sought a stay until he could secure adequate representation. He relied on the principle in Dietrich v The Queen: in appropriate circumstances, a serious criminal trial should not proceed against an indigent accused who cannot obtain representation through no fault of their own (Judgment [2]–[4]; “Dietrich” [2]).
The Crown Case Statement described an alleged payroll tax and money-laundering scheme. The CDPP alleged that conspirators arranged for payroll funds, including PAYG withholding amounts, to pass through companies and accounts, with funds allegedly retained or transferred for the conspirators' benefit. The judgment records allegations of a total tax shortfall of approximately $105 million and at least $7.5 million received by or for Cranston's benefit. Those were allegations in the Crown Case Statement, not findings of guilt (The CDPP Case [3]–[5]; “Post-Arrest Dealing in Assets” [16]).
The Court accepted that this was a serious, complex and lengthy trial. It considered Cranston unable adequately to conduct his own defence. It also accepted that he had exhausted legal aid and pro bono avenues. The application nevertheless failed because Cranston did not prove that he was indigent for the purposes of this particular trial. The Court considered that the evidence raised a “very realistic likelihood” that funds had been parked in businesses (Judgment [4]; “Efforts to Obtain Legal Representation and Legal Aid” [9]; “Contribution to Legal Fees by His Employer” [11]).
Why the court decided this way
The Court treated the applicant as bearing the onus of establishing the relevant facts on the balance of probabilities. It identified three matters to prove: indigence, inability to obtain representation, and inability through no fault of the accused. The Court also explained that indigence was relative to the particular trial, not synonymous with living in poverty (“Dietrich” [2]–[4]).
The trial's expected cost mattered. Cranston's solicitor estimated costs of approximately $2.15 million to $2.5 million, while the CDPP's lower estimates relied on six weeks' preparation, Legal Aid Commission rates and no allowance for disbursements. The Court rejected the CDPP estimates as inadequate. It considered that at least ten weeks' preparation and a seventeen-week trial were appropriate for a privately funded defence, and estimated a minimum cost of $800,000, including some disbursements (“Cost of a Defence” [5]–[8]). This assessment did not mean that the Court had to grant a stay once a large defence cost was established. The question remained whether Cranston had proved that he could not meet a reasonable cost of appropriate representation.
The Court accepted several parts of Cranston's position. The charges were serious. The trial was too complex for him to conduct himself. Legal aid had been refused and the appeal was unsuccessful. The evidence also established that pro bono representation had not been found. The Court was satisfied that he had exhausted those avenues and would not receive Commonwealth funding in the absence of a stay (“Efforts to Obtain Legal Representation and Legal Aid” [3]–[9]).
The decisive issue was the financial evidence concerning the employer, Permaform International. An agreement had been made for up to $200,000 to be paid towards Cranston's legal expenses, and $128,000 had been paid. The evidence was that Cranston and the employer's director had met shortly before the agreement was signed, while Cranston was still employed elsewhere. The judge found their explanations about the timing and circumstances vague and unconvincing. The judge considered it inherently implausible that the director would make such a large and unusual commitment to a person he had only just met, before Cranston began working for the company (“Contribution to Legal Fees by His Employer” [4]–[11]).
The Court did not find that every disputed transaction proved Cranston had funds available. It found that the employer evidence, considered with the assets seized and Cranston's business history, created a realistic likelihood of funds being parked in businesses. The concern was significant because Cranston bore the burden of proving indigence. The Court did not need to resolve the alleged link between every asset and the alleged offending to decide the application. It concluded that the financial disclosure did not satisfy the onus.
The Court rejected other parts of the CDPP's “wasteful spending” argument. It did not accept that Cranston had acted imprudently merely by paying for legal representation in related proceedings, defending proceedings brought against him, or pursuing a claim that might fund his defence. It also gave little weight to the criticism of the rent he paid and rejected the claim that his wife's maternity leave pay should have been saved for the criminal trial (“Wasteful Spending” [6]–[11]). Those findings show that the application did not fail simply because the Court thought Cranston had made poor financial choices. It failed because the Court was not satisfied about the resources actually available to him.
Before and after state of the law
The judgment applied the existing approach in Dietrich, rather than announcing a new test. It quoted Mason CJ and McHugh J's formulation that, absent exceptional circumstances, a trial should be adjourned, postponed or stayed where a serious-offence accused is indigent and, through no fault of their own, cannot obtain representation (“Dietrich” [1]). The judgment's account of Craig v South Australia makes clear that “through no fault” is not an automatic bar whenever an accused has made a mistake. The focus is on the reasonableness of the conduct in all the circumstances and whether the accused was the author of their own misfortune through gratuitous and unreasonable conduct (“Dietrich” [3]).
The decision's application of that framework emphasises the trial-specific character of indigence. A person's income, assets and spending cannot be assessed in the abstract; they must be compared with the cost of adequate representation in the trial they face. Here, the Court's estimate of at least $800,000 put the claimed inability in context. But a high cost estimate did not transfer or remove the applicant's onus to provide proper financial information.
The Court also addressed the interaction between the Proceeds of Crime Act 2002 (Cth) and a Dietrich application. It stated that the POCA provisions did not allow restrained or forfeited assets to be released directly to fund a suspect's defence, while s 293 provided for reimbursement to a Legal Aid Commission in circumstances where legal aid was granted (“Proceeds of Crime Action” [2]). The judge considered that criticism of this arrangement appeared to have force, but said that the Act had to be applied according to its terms (“POCA Act and Dietrich” [1]–[2]).
The comments about the statutory scheme, legal aid rates and prosecutorial cost estimates were broader observations, not the rule necessary to dismiss Cranston's application. In particular, the Court observed that legal aid may not guarantee the availability of suitable counsel, and that the existence of a grant should not alone be treated as proof that adequate representation is available (“POCA Act and Dietrich” [3]–[4]). These comments explain practical concerns about implementing the Dietrich principle; they do not change its threshold requirements.
Key passages with plain-English translation
“An accused will be regarded as indigent if the value of their ‘assets and income falls well short of what is required to conduct a trial’” (“Dietrich” [4]).
In plain English, the issue is not whether someone is poor in everyday terms. It is whether the resources they can actually use are inadequate for appropriate representation in the trial they face. The standard is tied to the demands of the case.
“At a minimum and allowing for some disbursements, I estimate that a privately funded defence of Mr Cranston would cost $800,000” (“Cost of a Defence” [8]).
The Court rejected the Crown's lower estimate as an unreliable measure of what adequate private representation would cost. It accounted for preparation, trial length, experienced counsel and solicitor, and some disbursements. The figure was an estimate for the application, not a general tariff or a finding that every trial of this kind costs the same.
“The very realistic likelihood of his having ‘parked’ funds in various businesses either before or after his arrest” (“Contribution to Legal Fees by His Employer” [11]).
This was the central reason the Court was not satisfied about indigence. The Court did not treat the mere fact that assets were restrained as conclusive. Instead, it assessed whether the evidence left a realistic possibility that other funds connected to Cranston remained available through business arrangements.
“The crucial matter so far as this application is concerned is the lack of proper disclosure” (“Contribution to Legal Fees by His Employer” [13]).
The Court was not positively satisfied that the employer had withheld the remaining $72,000 to assist Cranston's application. It did, however, consider Cranston's financial disclosure inadequate. Where the applicant carries the onus, uncertainty arising from insufficient disclosure can prevent the Court from finding the required fact.
“The POCA must be applied according to it terms” (“POCA Act and Dietrich” [2]).
The Court could criticise the practical consequences of the statutory scheme but could not treat that criticism as authority to release restrained funds contrary to the Act as the judge understood it.
What fact patterns trigger this precedent
The judgment is relevant where an accused seeks an adjournment or stay because they cannot secure representation for a serious criminal trial. The framework is particularly important where the trial is complex or lengthy, where the cost of adequate representation is substantial, or where assets have been restrained under proceeds-of-crime legislation.
A court applying the reasoning would be concerned with evidence that enables a reliable assessment of the accused's resources and access to funds. Cranston illustrates why unexplained financial arrangements, third-party payments of legal expenses, business interests, or possible funds held through companies may matter. The decision does not establish that any employer contribution or unusual funding arrangement proves an accused is not indigent. Its point is narrower: where the applicant must establish indigence, substantial unresolved questions about funding and disclosure can prevent that finding.
The judgment also indicates that past expenditure needs to be assessed in context. It rejected the proposition that an accused necessarily acts unreasonably by paying for representation in associated proceedings or by pursuing bona fide proceedings to obtain funds for a defence (“Wasteful Spending” [6]–[11]). Accordingly, the case does not make every prior legal expense or household decision a bar to a stay.
Finally, the POCA context is material where assets are restrained and cannot be used directly for defence costs. The judgment records that legal aid and possible reimbursement under s 293 may be relevant, but warns that a legal aid grant does not necessarily establish that suitably experienced practitioners will accept the offered rates (“POCA Act and Dietrich” [3]–[4]).
How later courts have treated it
The judgment supplied here does not identify any later court decision treating R v Cranston as followed, applied, distinguished or otherwise adopted. The fact that the decision was last updated on 29 March 2023 is not, by itself, evidence of later judicial treatment. No conclusion about its subsequent precedential history can safely be drawn from this judgment alone.
The cases that Beech-Jones J discusses are authorities available to the Court when it decided the application, not later treatment of Cranston. The judgment relies on Dietrich and Craig for the governing approach, discusses Macdonald (No 4) and Marchi on trial-dependent indigence, and refers to Munshizada to illustrate problems with the practical availability of representation even where legal aid has been granted. Those relationships explain the reasoning in this case but do not establish what later courts have done with it.
Still-open questions
The judgment leaves open how courts should assess indirect access to funds in other cases. It found a realistic likelihood that funds had been parked in businesses on the evidence before it, but did not provide a general test for when a company, employer or family member's resources should be treated as available to an accused. The facts and evidential basis of any such inference would remain important.
It also does not determine how a future court should resolve disputes about the precise costs of adequate defence representation. The Court rejected the CDPP's estimates in this case and made its own minimum estimate, while suggesting that future applications might be more transparent if the prosecution disclosed the costs it expected to incur (“POCA Act and Dietrich” [5]). The suggestion was not made as a binding procedural rule.
The judgment's comments about legal aid leave a practical issue unresolved: what evidence is sufficient to show that a grant will produce actual, suitably experienced representation at the available rates. The Court indicated that a grant alone may not answer that question, referring to the difficulty of obtaining counsel in Munshizada (“POCA Act and Dietrich” [3]–[4]). It did not formulate a universal standard for assessing availability.
Finally, the judgment did not decide the merits of the criminal charges or whether the alleged shortfall existed. It expressly treated the Crown Case Statement as allegations, not proof, for purposes of the stay application (“Contribution to Legal Fees by His Employer” [16]). Those matters were for the criminal proceedings, not the application before Beech-Jones J.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have it checked by a qualified Australian lawyer.
Catchwords
[1995] HCA 85
Croke v R [2020] NSWCCA 8
Dietrich v The Queen (1992) 177 CLR 292[2000] NSWCCA 4
R v Karonous (1995) 63 SASR 45177 A Crim 479
R v Macdonald (No 4) [2016] NSWSC 486
R v Marchi (1996) 67 SASR 368
R v MunshizadaR v DanishyarL R Vujcic (Respondent)
Judgment (18 paragraphs)
[1]
Solicitors:
Musgrave Legal (Applicant)
Commonwealth Director of Public Prosecutions (Respondent)
File Number(s): 2017/148697
[2]
Judgment
On or about 17 May 2017 the accused, Adam Cranston, was arrested and charged with tax fraud and money laundering. He was subsequently committed for trial in this Court. An indictment signed on behalf of the Commonwealth Director of Public Prosecutions (the "CDPP") on 5 December 2019 contains two counts that concern Mr Cranston. Count 1 charges Mr Cranston with conspiring to dishonestly cause a loss to a third person, namely the Commonwealth of Australia, contrary to s 135.4(3) of the Criminal Code Act 1995 (Cth) (the "Code"). Count 2 charges him with conspiring to deal with $1 million or more believing it to be the proceeds of crime contrary to ss 11.5(1) and 400.3(1) of the Code. The maximum penalty for these offences is ten years imprisonment and twenty five years imprisonment respectively (or 1500 penalty units or both).
Mr Cranston has pleaded not guilty. He is due to stand trial with three co‑accused on 10 August 2020.
By notice of motion filed in Court on 13 February 2020, Mr Cranston seeks a stay of the proceedings "until such time as he is able to secure adequate legal representation". [1] He contends that he is relevantly indigent, charged with serious offences and "through no fault [of his own] is unable to obtain legal representation" (see Dietrich v The Queen (1992) 177 CLR 292; [1992] HCA 57; "Dietrich").
For the reasons that follow Mr Cranston's application will be dismissed. In summary he has failed to discharge the onus on him to demonstrate that he is "indigent"; that is unable to afford appropriate legal representation. To explain that conclusion it is necessary to describe the principle in Dietrich, the nature and scope of the case against him and the cost of defending it, the resources available to Mr Cranston and the efforts he has made to secure legal representation.
[3]
Non Publication Order
At the commencement of the hearing of this application, counsel for Mr Cranston, Mr Barrow, applied for a non publication order in respect of the entirety of the application under s 7 of the Court Suppression and Non‑Publication Orders Act 2010 (the "Non Publication Act"). Mr Barrow submitted that, because the application was being heard so close to the listed trial date, reporting of the evidence and submissions "may cause prejudice to the proper administration of justice", specifically the fairness of Mr Cranston's jury trial (s 8(1)(a)). [2] I refused the application. Given that the application is being heard over three months in advance of the trial and the application was mostly concerned with the cost of the trial and the funds available to Mr Cranston to pay for his defence, I considered that the "safeguard[ing] [of] the public interest in open justice" warranted the refusal of the application (s 6).
However, on the same day I made an interim order under s 10 of the Non Publication Act in respect of two parts of the cross‑examination of Mr Cranston. One part involved Senior Counsel for the CDPP, Mr Maidment QC, cross‑examining Mr Cranston on the core allegations made against him in the Crown Case Statement [3] and the other part concerned his dealings with assets that the CDPP alleges were the proceeds of the crimes he is alleged to have committed. [4]
Section 10(2) of the Non Publication Act requires the Court to determine the application that led to the order under s 10 "as a matter of urgency". Hence, when the transcript of Mr Cranston's evidence became available on 23 April 2020, I addressed whether to make an order under s 7. I determined to make an order under s 7 on the grounds specified in s 8(1)(a) in respect of the first part of Mr Cranston's cross‑examination. I considered that the publication of his specific responses to the core of the CDPP's allegations of criminality against him had the significant potential to undermine the proper conduct of his criminal trial. The first occasion that the jury should hear his specific response to the CDPP allegations is his trial and not via reporting of answers given by him under compulsion beforehand. However, I did not make any such order in respect of the second part of the cross‑examination. A review of the transcript confirmed that the cross‑examination was concerned with Mr Cranston's possible dealings with particular assets but was not directed to establishing any connection between those assets and the criminality alleged against him.
[4]
Dietrich
The approach to be adopted to this application was authoritatively stated by Mason CJ and McHugh J in the following passage in Dietrich (at 315):
"In view of the differences in the reasoning of the members of the Court constituting the majority in the present case, it is desirable that, at the risk of some repetition, we identify what the majority considers to be the approach which should be adopted by a trial judge who is faced with an application for an adjournment or a stay by an indigent accused charged with a serious offence who, through no fault on his or her part, is unable to obtain legal representation. In that situation, in the absence of exceptional circumstances, the trial in such a case should be adjourned, postponed or stayed until legal representation is available. If, in those circumstances, an application that the trial be delayed is refused and, by reason of the lack of representation of the accused, the resulting trial is not a fair one, any conviction of the accused must be quashed by an appellate court for the reason that there has been a miscarriage of justice in that the accused has been convicted without a fair trial." (emphasis added)
Four propositions concerning the application of this principle should be noted.
First, as the party seeking the stay, Mr Cranston bears the onus of proof on the balance of probabilities; specifically, he must prove that he is indigent, that he has been unable to obtain legal representation and that this inability is through no fault of his own (see R v Karonous (1995) 63 SASR 451; 77 A Crim 479; R v BK (2000) 110 A Crim R 298; [2000] NSWCCA 4; R v Macdonald (No 4) [2016] NSWSC 486; "Macdonald (No 4)"). If an applicant for a stay is not forthcoming with details of their financial circumstances then that may result in the Court being left unsatisfied that the onus has been discharged (MacDonald (No 4) at [104] and [111]).
Second, the reference in Dietrich to the accused being without legal representation "through no fault on his or her part" was explained in the following passage in Craig v South Australia (1995) 184 CLR 163; [1995] HCA 85 (at 184):
"The reference in them to an accused's inability to obtain legal representation being "through no fault on his or her part" was not intended to indicate that every instance of misbehaviour, improvidence or other fault on the part of an accused which had contributed to his or her lack of representation must automatically preclude entitlement to a stay. In that regard, we agree with the view expressed by Olsson J in the Full Court that:
" ... what was in contemplation was a test which focused on the reasonableness of the conduct of an accused in all of the circumstances; and excluded situations in which it could fairly be said that the accused, by his gratuitous and unreasonable conduct, had been the author of his own misfortune."
A fortiori, it was not intended to suggest that the power to grant a stay on the grounds of inability to obtain legal representation does not exist at all if there has been, as a matter of objective fact, contributing fault on the part of the accused."
[5]
The CDPP Case
The offences with which Mr Cranston has been charged are outlined above. There is no doubt that they amount to "serious offence[s]" for the purposes of applying the principle stated in Dietrich.
On or about 2 April 2020, the CDPP filed an amended Crown Case Statement ("CCS"). The statement is 88 pages in length. It is divided into Part A which explains the conspiracy the subject of count 1, and Part B which explains the conspiracy the subject of count 2.
Part A of the CCS reveals that the CDPP case on count 1 is that, between about 1 March 2014 and 18 May 2017, eight alleged co‑conspirators including Mr Cranston made an agreement to deprive the Commonwealth of Pay as You Go Withholding ("PAYGW") monies that it claims to have been entitled to. The CDPP alleges that, in April 2014, the conspirators incorporated a company called Plutus Payroll Australia Pty Ltd ("Plutus Payroll"). Plutus Payroll provided a payroll administration service to a number of large corporate employers. The services included withholding and remitting PAYGW tax to the Australian Taxation Office ("ATO"). According to the CDPP, Plutus Payroll purported to subcontract with companies incorporated and controlled by the conspirators, collectively described as the "Second Tier Companies". It is alleged that the conspirators contrived payroll service agreements between Plutus Payroll and the Second Tier Companies to make the latter responsible for processing employers' payroll funds and paying the requisite PAYGW to the ATO. It is alleged that the conspirators dishonestly caused the Second Tier Companies to retain a percentage of the payroll funds owed to the ATO as PAYGW. It is also alleged that the conspirators caused a shortfall in remittance of GST that was paid by the clients to Plutus Payroll, which was passed on to the Second Tier Companies. The conspirators are accused of misappropriating $141,291,923.08.
Part B of the CCS reveals that the CDPP's case on count 2 is that, between about 1 March 2014 and 18 May 2017, six co‑accused including Mr Cranston agreed that the PAYGW monies withheld would be transferred through intermediate entities' bank accounts and ultimately transferred to the conspirators' personal bank accounts. It is alleged that the funds were used to purchase properties of which the conspirators were the joint or main beneficiaries and the funds were otherwise used for the benefit of the conspirators. The CDPP alleges that monies were often transferred under the guise of false invoices and descriptions such as loans.
[6]
Cost of a Defence
The submissions and evidence on the application address the likely cost of legal representation for Mr Cranston's trial. These submissions have to be addressed in the context that Mr Cranston does not have a "right to" publicly funded competent counsel, but instead bears an onus of demonstrating that he cannot afford representation that is not "manifestly inadequate" (Milat at 375).
On this application, an affidavit from Mr Cranston's solicitor, Ms Penny Musgrave, affirmed 2 March 2020 was read. The affidavit addressed, inter alia, the likely cost of representation for Mr Cranston at his trial. Ms Musgrave is a highly experienced criminal lawyer. She has been acting for Mr Cranston since his arrest, although she is currently acting pro bono.
Ms Musgrave noted that the brief had been served was 193 gigabytes in electronic form and, if those parts of it which are in "pdf" format were printed, they would occupy 2100 A4 volumes. The cost of printing that part of the brief would be just over $187,000. [8] Ms Musgrave stated that the electronic brief is difficult to navigate with annexures separated from statements. [9] An affidavit affirmed by a CDPP solicitor, Ms Suzanne Martinez, on 9 March 2020, disputes this description of the brief. Ms Martinez states that the brief is 163GB and not 193GB and has a number of spreadsheets and search functions which enable it to be navigated. [10] I am not in a position to resolve this disagreement. It suffices to state that, if the CDPP serves a brief and it includes material disclosed in discharge of its duty as a prosecutor, then it is to be expected that the defence will read or at least review it (see Croke v R [2020] NSWCCA 8 at [30]).
Ms Musgrave noted the estimated length of the trial and its complexity. [11] Ms Musgrave also noted that there may be various pre‑trial applications, including challenges to the admissibility of evidence, and that otherwise a significant amount of work would be required to identify the real issues in dispute at the trial. [12] Ms Musgrave estimated that Mr Cranston's trial requires four months preparation by counsel and a solicitor.
Bearing in mind the estimated length of the trial, four months preparation, the cost of printing the pdf components of the Crown brief and the cost of retaining an expert, Ms Musgrave estimated that the cost of Mr Cranston's defence would be approximately $2.5 million if senior and junior counsel were retained and approximately $2.15 million if a "senior junior [c]ounsel" was retained. [13] Ms Musgrave's estimates were based on a daily rate of $6600, $4400, $3300, and $3300 for senior counsel, a senior junior counsel, junior counsel and an instructing solicitor respectively.
[7]
Proceeds of Crime Action
Shortly before his arrest on 17 May 2017, proceedings were commenced against Mr Cranston and others under the Proceeds of Crime Act 2002 (Cth) ("POCA" and the "POCA proceedings"). On 16 May 2017, Fullerton J made orders restraining all of Mr Cranston's existing and future income and property pursuant to s 18 of POCA (the "POCA orders"). On 21 June 2017, these orders were amended to allow Mr Cranston to deal in (ie, earn) up to $5000 plus GST per week.
In her affidavit sworn on 16 March 2020, Ms Musgrave stated that she had contacted the Australian Federal Police ("AFP") case officer with responsibility for the assets the subject of the POCA orders. According to Ms Musgrave, the case officer advised that the assets seized from Mr Cranston, and their value, are as follows:
(1) Net proceeds of sale of a property in Bondi amounting to $135,409.00 which was owned by A & EC Holdings Pty Ltd. Mr Cranston and his wife were joint shareholders of this company.
(2) Net proceeds of a sale of property in Burraneer amounting to $791,577.00 which was jointly owned by Mr Cranston and his wife.
(3) Monies totally $1,010,143.34 on deposit with Macquarie Bank in an account in the names of Mr Cranston and his wife.
None of these assets are available to be used to fund Mr Cranston's defence. The provisions of the POCA do not enable the release of restrained or forfeited assets for the purposes of funding a suspect's defence (see POCA, ss 39, 73 and 74). Consistent with this, on 16 January 2020, a representative of the Commissioner for the AFP advised Ms Musgrave that the Commissioner would not consent to an application to vary the POCA orders. [16]
Instead of allowing the release of restrained or forfeited assets to fund an accused's defence, the POCA provides that if legal aid is granted to a person then, subject to certain conditions, the relevant Legal Aid Commission can be reimbursed from the seized assets (s 293). As I will explain, Mr Cranston has been refused legal aid so this provision is not engaged.
[8]
Efforts to Obtain Legal Representation and Legal Aid
As noted, Ms Musgrave has acted for Mr Cranston since around the time of his arrest. The evidence on this application revealed that there are substantial amounts owing to her for unpaid fees. Both Ms Musgrave and Mr Barrow appeared for Mr Cranston on this application pro bono. Ms Musgrave has stated that she cannot continue to act for Mr Cranston on that basis. She is a sole practitioner and stated that her "practice cannot absorb the necessary period of preparation and appearance on an unpaid basis". [17]
On 23 October 2019, Mr Cranston submitted an application for legal aid to the Legal Aid Commission of New South Wales. [18] Mr Cranston's email contained a summary of the events since his arrest and the financial circumstances of his wife. [19] Attached to the email were, inter alia, a completed application dated 2 October 2019 and a copy of the POCA orders. [20] One of the questions in the application asked whether any of Mr Cranston's legal fees had been paid on his behalf. His answer referred to his wife having paid $100,000 towards his legal fees. [21] As the evidence below indicates, this was an incomplete answer as other relatives and his employer have paid legal fees on his behalf. The CDPP submitted that Mr Cranston's answer was adverse to his credit. I do not accept that it was. When he was cross-examined about completing the form, Mr Cranston stated that he "sent through to [the Legal Aid Commission] the trust account summary detailing all payments made to Ms Musgrave". [22] Consistent with this, there was tendered an email from Mr Cranston to the Legal Aid Commission. The email attached a spreadsheet outlining his legal costs and the payments made to that time. [23]
On 25 October 2019, Mr Cranston was advised that his application for legal aid was unsuccessful. [24] On 30 October 2019, Mr Cranston appealed against the refusal. [25] On 25 November 2019, Mr Cranston was advised that his appeal had been considered by the Legal Aid Review Committee and was unsuccessful. [26] The letter stated that the Committee had disallowed the appeal because the income Mr Cranston had disclosed "in support of the appeal exceeds the limits of the Legal Aid NSW Means Test and that there are no exceptional circumstances to warrant the exercise of discretion". [27]
On 18 December 2019, Ms Musgrave wrote to the CDPP and the Commissioner of the AFP seeking their support for an application to the Commonwealth Attorney‑General for an ex gratia payment or their consent to a variation of the POCA order. [28] On the same day, Ms Musgrave wrote to the Attorney‑General seeking an ex gratia payment for the payment of fees for Mr Cranston's legal representation in his trial. [29]
[9]
Mr Cranston's Personal and Financial Circumstances
Mr Cranston swore four affidavits on this application. [42] They addressed his personal and financial circumstances in detail. Overall, he contends that he is unable to fund his legal representation. [43] Mr Cranston was cross‑examined closely on his finances. In light of that evidence, Mr Maidment submitted that Mr Cranston had failed to discharge his onus of proving that he is relevantly "indigent" that is "unable to afford legal representation" (Dietrich supra). Before addressing the specific points made by Mr Maidment it is necessary to outline Mr Cranston's evidence concerning his employment, his family circumstances and the sources of funds he has drawn on to date to pay legal expenses.
[10]
Employment
Mr Cranston is 33 years of age. In his oral evidence Mr Cranston stated that he commenced but did not complete a business degree and left university when he was aged 20. From that time until his arrest in May 2017 he worked in a number of sales, marketing or consulting roles. In around 2012 he and another person formed a business called Aventis Capital. He described its business as "business advisory, arranging finance, brokering finance and insurance products". [44] He also established a business named "Prescott Page Recoveries" which he described as a "debt collection business" [45] that also undertook "debt analysis on ageing receivables". [46] It can be expected that Mr Cranston would have accumulated a number of business contacts throughout his work experience.
As at the time he was arrested Mr Cranston was working with Synep Pty Ltd ("Synep"), one of the companies alleged by the CDPP to be associated with the scheme the subject of count 1. [47] In the immediate period after his arrest, Mr Cranston was unemployed. Later in 2017, he worked for the "Inspire Foundation", a registered after school provider. [48] After a period of unemployment, [49] on 19 February 2018 he commenced work with a construction company, Citywide Civil Pty Ltd ("Citywide").
On 7 July 2018, Mr Cranston commenced work in his current position as a General Manager with Permaform International Pty Ltd ("Permaform International"). [50] Mr Cranston's weekly salary after tax is $2636. [51] After deductions for living expenses, Mr Cranston has calculated that he has available $211 per week which he is paying to Ms Musgrave for outstanding fees amounting to over $35,000. [52] In an affidavit dated 30 March 2020, Mr Cranston stated that he had not been making these payments because he has had other expenses, but that he does intend to make payments to Ms Musgrave whenever he has funds available. [53]
In 2018, Permaform International entered into a costs agreement with Ms Musgrave for the payment of her fees up to the sum of $200,000. [54] Permaform International paid $128,000 of the available $200,000. [55] On 28 February 2020, the director of Permaform International, Mr Robert Rech, advised Ms Musgrave that it was unable to contribute any further funds for the trial. [56]
Mr Maidment submitted that the circumstances in which Permaform International agreed to commit funds for Mr Cranston's defence reveal that he has failed to discharge his onus on this application. That contention is addressed below.
[11]
Family Commitments
Mr Cranston is married with two children aged 2 years and 3 and a half months. [57] Mr Cranston's wife is employed by a public broadcaster. [58] She is currently on maternity leave after the birth of her second child but will commence leave without pay in April 2020. [59] She is not due to return to work until February 2021. [60]
At the time of his arrest in May 2017, Mr Cranston and his wife were living in a unit they owned in Bondi Beach. After his arrest, the unit was restrained, forfeited and sold. Later that year Mr Cranston rented a property in Woronora owned by his uncle. [61] Mr Cranston had agreed with his uncle to pay rent in the sum of $1200 a week; however he did not always make regular payments as he was often without funds. [62] On 13 March 2020, Mr Cranston and his wife signed a lease for residential premises in Menai. [63] Mr Cranston has stated that the move was for two reasons. First, his uncle asked that he vacate the premises because he had sold the house and "it was a term of the sale that there be vacant possession on settlement". [64] Second, Mr Cranston stated he was finding it difficult to make the rental payments of $1200 a week. [65] The rent for the new premise is $700 a week commencing on 3 April 2020. [66]
According to Mr Cranston, the landlord for the premises in Menai gave him a three week rental holiday as part of his offer. [67] The bond is $2800 and was paid by Mr Cranston's mother because he did not have funds available. [68] Mr Cranston's uncle still holds the bond he paid for the Woronora premises. When he repays the bond, it will be refunded to Mr Cranston's mother and the balance will be paid to Mr Cranston and his wife. [69]
[12]
Sources of Finance
Under to the POCA orders, Mr Cranston cannot borrow money. [70] A significant portion of Mr Cranston's legal fees have been paid for by gifts from his family and employer, but Mr Cranston claims that those funds have now been exhausted. [71]
Mr Cranston is the oldest of three children. [72] His sister is a co‑accused. She has been granted legal aid. [73] Mr Cranston has stated that his younger brother had inquired about increasing his mortgage to assist Mr Cranston however he was told that he could not. [74]
Mr Cranston's father has previously contributed funds from his personal savings to pay for Mr Cranston's legal representation in the Local Court. [75] On 23 April 2019, Mr Cranston's father advised Ms Musgrave that, having paid about $450,000 in legal fees for his own trial in the District Court, he was unable to provide any further funds. [76]
Mr Cranston's mother and grandfather have previously provided funds for both Mr Cranston and his sister from the proceeds of the sale of their properties. [77] On 25 February 2019, Mr Cranston's mother told Ms Musgrave that she was unable to contribute any further funds for his trial. [78] Mr Cranston's grandfather now lives on a full pension and told Mr Cranston that he has no funds available to assist further. [79] Mr Cranston's grandmother is a surety in the sum of $200,000 for his bail. [80] Mr Cranston stated that he has been advised that arrangements have been made for his grandmother to use the equity in her property to secure accommodation in a supported living facility and is therefore unable to access the equity in her house to assist him. [81]
[13]
"Wasteful Spending"
Mr Maidment contended that Mr Cranston's application should be dismissed because he (and his wife) had, in effect, made inadequate attempts since his arrest to fund his defence and have otherwise engaged in imprudent spending. This contention had three aspects.
The first matter that Mr Maidment pointed to was the funds that had been spent on legal proceedings since Mr Cranston's arrest. As at June 2019 a total sum of $432,587 had been paid on Mr Cranston's behalf for legal fees. The evidence demonstrates that this sum was comprised of the $128,000 paid by Permaform International to Ms Musgrave, a payment of $80,000 to $100,000 from savings accumulated by his wife and the balance from the family members described above. [82] Mr Cranston's evidence was that his capacity to raise funds from his family members was exhausted in that each has provided what they can having regard to their personal circumstances. Save as to what might be suggested by the evidence of the circumstances in which Permaform International made payments for his legal fees, I accept that is so.
In her affidavit affirmed 2 March 2020, Ms Musgrave explained that since May 2018 Mr Cranston or his wife have been involved in six sets of legal proceedings, namely, these proceedings, the POCA proceedings, a dispute over a commercial debt that was litigated in South Australia, an application by the ATO to wind up Synep, criminal proceedings against his wife (which she successfully defended) and proceedings concerning a claim by Mr Cranston in the Federal Court for payment of his legal fees under a policy of Directors & Officers Insurance (the "D & O Claim"). [83]
In relation to the POCA proceedings Ms Musgrave explained that she has been required to advise Mr Cranston in relation to the POCA orders and that Mr Cranston was represented by senior and junior counsel on an application by him to stay orders for his compulsory examination. [84] After a complex hearing involving a number of parties and six hearing days, his application was dismissed (The Commissioner of the Australian Federal Police v Cranston and 65 Ors (No 8) [2018] NSWSC 365; "Cranston (No 8)"; The Commissioner of the Australian Federal Police v Cranston and 65 Ors (No 10) [2018] NSWSC 542; "Cranston No 10").
In the proceedings to wind up Synep, Ms Musgrave acted for Mr Cranston in relation to an application by the liquidator for access to material from the POCA proceedings and an application to examine Mr Cranston. [85] In relation to the D & O Claim, a separate question in those proceedings was referred to the Full Court of the Federal Court and decided adversely to Mr Cranston (and Mr Onley) (Onley v Catlin Syndicate Ltd as the Underwriting Member of Lloyd's Syndicate 2003 [2018] FCAFC 119; "Onley").
[14]
Post‑Arrest Dealing in Assets
In its outline of submissions, the CDPP contended that the evidence demonstrates "a pattern of unorthodox financial dealings that continued after his arrest". Part of the submission related to the payments made on account of his legal fees by Permaform International, a matter addressed next. The balance of the contention concerns two transactions.
The first transaction was the purchase of a plane for $960,000 by Prescott Page Recoveries which Mr Cranston estimated had a turnover of $300,000. [98] In his evidence, Mr Cranston stated that the plane was purchased for legitimate commercial reasons, [99] a contention that the CDPP contested. It is not necessary to resolve that dispute as the plane was purchased in May 2016, [100] ie, well before his arrest. The plane was the subject of the POCA orders. It has since been sold. [101]
The second transaction concerns the purchase of a property in Rozelle in circumstances where the deposit was only $10 and the special conditions acknowledged a debt owed by the vendor to Prescott Page Recoveries for $400,000 for "consulting fees", [102] even though Mr Cranston said that it was Aventis Capital that had performed work for the vendor and not Prescott Page Recoveries. [103] Mr Cranston said that the contract was prepared by one of his co‑accused, Mr Menon, without his instructions. [104] Mr Maidment submitted that the transaction was irregular. Again, it is not necessary to consider this further. Although the contract is undated and was never completed, the annexures to the contract reveal that it was prepared in March 2016, [105] ie, well before his arrest.
[15]
Contribution to Legal Fees by His Employer
In his first affidavit Mr Cranston stated "in 2018 my employer, Permaform International … entered into a costs agreement" with his solicitor for payment of her fees up to $200,000. He said that his employer paid $128,000 but was unable to contribute further. [106] In his second affidavit Mr Cranston stated:
"... I commenced work with [Permaform International] on 7 July 2018. Attached and marked "A" is a copy of my employment agreement. Prior to that I was employed by [Citywide] which is a civil works company. Citywide was, and is, a customer of Permaform [International]. I commenced work with Citywide around 19 February 2018 and was throughout my employment with them, receiving the same weekly salary as I now do from Permaform [International]. Attached and marked "B" is a copy of a payslip dated 21 May 2018 from Citywide showing my gross and nett wage ..." [107]
Attachment A to the affidavit is a typed document on Permaform International letterhead titled "Employment Contract". It is addressed to Mr Cranston and bears the typed dated 1 July 2018. It also bears the signatures of Mr Rech and Mr Cranston and a signature date of 7 July 2018. It refers to the start date for his employment as 7 July 2018. Attachment B is a pay slip for Mr Cranston referable to Citywide for the period 21 May 2018 to 27 May 2018 recording a gross weekly pay of $4000 per week and gross salary in the year to date of just over $64,000. The latter figure is consistent with Mr Cranston having commenced work with Citywide on 19 February 2018.
An affidavit from Mr Robert Rech, affirmed 20 April 2020 was read on the motion. Mr Rech is the Director of both Permaform International and an associated company, Permaform Australia Pty Ltd ("Permaform Australia"). He explained that the group manufactures and retails PVC structural walling formwork for the national and international construction industry. [108] He stated that Mr Cranston is employed as Permaform International's General Manager. He says that Mr Cranston has assisted him in "rolling out distribution contracts and packages", expansion into overseas markets as well as with the "financials and the strategy". [109]
In his oral evidence Mr Rech stated that Permaform Australia has been operating since 2013 but that Permaform International had only begun to conduct business by the "end of the first quarter" of 2018. [110] He said he was referred to Mr Cranston by an accounting firm Wentworth Williams, [111] who was providing him with financial advice. [112] He said Mr Cranston was described as someone who could assist him in pursuing an expansion strategy. [113] Mr Rech said he first met Mr Cranston at a coffee shop near his work. He said that Mr Cranston was still working for Citywide when they first met. He said he knew Mr Cranston was facing criminal charges. He said he agreed to fund Mr Cranston's defence to "help me secure our long-term professional relationship" and that "[f]or me it was an investment". [114]
[16]
POCA Act and Dietrich
In his submissions, Mr Barrow invited the Court to comment on the effect of so much of the POCA that deals with the seizure of assets and the grant of legal aid. I have described the operation of the POCA above. Mr Barrow contrasted the POCA with ss 10B(3), 16A and 16B of the Criminal Assets Recovery Act 1990 which enables the release of amounts seized for the payment of an accused's person's legal expenses. Mr Barrow contended that the POCA is a flawed scheme in that there will be cases in which an accused person does not meet the requirements for the grant of legal aid in the different states with the result that they will be both denied legal and any other means for funding their defence.
Mr Barrow's criticism of the scheme of the POCA appears to have much force. Nevertheless, the rejection of his suggested approach appears to have been a deliberate policy decision adopted when the POCA was enacted. The POCA must be applied according to it terms. That said, I note two points about the conduct of Dietrich applications made by persons whose assets have been restrained or seized under POCA.
The first is that, to the extent that s 293 of POCA is intended to address the potential for a Dietrich application by an accused whose assets have been restrained or forfeited, then it is premised on the doubtful factual assumption that a grant of legal aid will result in an accused receiving legal representation adequate to conduct their trial. The precariousness of that assumption is illustrated by the circumstances of R v Munshizada; R v Danishyar; R v Baines (No 2) [2019] NSWSC 834 ("Munshizada"). In Munshizada, a four‑month murder trial fixed to commence in July 2019 had to be adjourned for three accused who could not retain suitable counsel to appear even though they had received grants of legal aid. From early April 2019 the accused's solicitors made efforts to retain counsel from the relevant legal aid panel but were unable to do so.
Generally, given the lack of increase in legal aid rates over a sustained period and even allowing for the effect of a pandemic, it cannot be assumed that a grant of legal aid to an accused will lead to them being adequately represented. Similarly, as already noted, it cannot be assumed that if an accused only has funds available to pay practitioners at legal aid rates that there are practitioners willing to be privately retained for those rates. One consequence of this is that if, in this case I granted a temporary stay and the Legal Aid Commission changed its position and granted legal aid, I would not lift the stay until being satisfied that there were suitably experienced legal practitioners willing to accept the terms and conditions of the grant including the rates that were offered. Just because legal aid has not been granted does not necessarily result in the refusal of a stay based on Dietrich (Milat at 380).
[17]
Conclusion
It follows that Mr Cranston's notice of motion seeking a stay of his trial must be dismissed. I note that, at the commencement of the application, counsel for Mr Cranston's co‑accused, Mr Menon and Mr Onley, each reserved their position on whether to apply for a separate trial if Mr Cranston's application was refused and he was unrepresented at his trial.
Accordingly the Court orders that:
(1) The notice of motion filed 13 February 2020 be dismissed.
[18]
Endnotes
Submissions filed on behalf of Mr Cranston dated 20 March 2020 at [37] ("AC submissions").
T 4.5.
T 18.5 to T 21.40.
T 21.41 to T 29.16.
Upon the handing down of this judgment the solicitor for Mr Cranston, Ms Musgrave, requested that in light of the findings made concerning Mr Cranston, the judgment not be placed on www.caselaw.nsw.gov.au until after Mr Cranston's trial. I decline to do so for the same reasons noted in [5], namely, that given the length of time until the trial date, the public interest in open justice warrants the judgment being available. Subject to further order, the judgment will be removed from the public domain of www.caselaw.nsw.gov.au on 31 May 2020, being over two months prior to the trial date.
CDPP outline of submissions 23 April 2020, p 6 ("CDPP outline").
T 18.20.
Affidavit of Penny Musgrave affirmed 2/3/2020 at [34(i)] ("PM Affidavit 2/3/2020").
id.
Affidavit of Susan Martinez affirmed 9/3/2020 at [3] and [17] ("SM Affidavit 9/3/2020").
PM Affidavit 2/3/20 at [8].
PM Affidavit 2/3/2020 at [34].
PM Affidavit 2/3/2020 at [8] and [9].
CDPP submissions 3 April 2020 at [6] ("CDPP subs").
10 weeks' preparation, a 17 week trial and approximately $60,000 in disbursements.
The notice of motion filed 13 February 2020 seeking a stay until Cranston could secure adequate legal representation was dismissed.
Finally, I note that consistent with the Court's practice, this judgment will be published on www.caselaw.nsw.gov.au but will be removed at a time closer to the trial date (see Matthews v R (No 2) [2013] NSWCCA 194 at [3]). [5]
Third, the concept of indigence is trial dependent. It does not mean that the accused is living in poverty, but that the "accused lacks the means to engage appropriate legal representation to conduct his or her defence" (R v Marchi (1996) 67 SASR 368 at 375). An accused will be regarded as indigent if the value of their "assets and income falls well short of what is required to conduct a trial" (Macdonald (No 4) at [95] per Adamson J).
Fourth, in seeking to establish indigence, it is expected that the accused will demonstrate they have been refused legal aid and pro bono assistance (R v Warwick (No 64) [2019] NSWSC 163 at [26] per Garling J), although the fact that an applicant has been granted legal aid is not determinative of whether or not a stay will be granted (Attorney-General (NSW) v Milat (1995) 37 NSWLR 370 at 380; "Milat").
The CCS alleges that the total shortfall in tax collected was approximately $105 million, that around $25 million was paid as a "bribe" in response to blackmail demands as the fraudulent scheme began unravelling and that the co‑conspirators received at least $33 million of which at least $7.5 million was received by or for the benefit of Mr Cranston. The CDPP contends that there is still an unlocated shortfall of around $47 million.
One part of the CDPP's outline of submissions referred to evidence given by Mr Cranston on this application that he had not read the CCS. The CDPP contended that, in those circumstances, it "is difficult [for him] to complain about the complexity of the trial when [he] has not troubled to read the summary of the case against him" and that it should be found that he "has not yet made any, or any reasonable attempt to prepare himself for trial". [6] In fact, Mr Cranston stated that he found it "quite distressing" to "go through the brief and the statements at this stage" and that he knows that "I need to spend some time to go through it", [7] that being a task usually undertaken by an accused with their legal representative. In any event, Mr Cranston does not "complain" about the complexity of the CDPP case. Instead, he points to it as a reason why he requires legal representation for his trial and why the cost of that legal representation will be very large.
Regardless of the point sought to be made by the CDPP in its outline, Mr Cranston's trial will be long and complex. The current estimate of the length of the trial is four months. On 1 June 2018, the CDPP wrote to the Chief Justice seeking an exemption under s 128(2) of the Criminal Procedure Act 1986 to file an indictment in this Court. The CDPP described the conspiracy charges as "involv[ing] complex issues of fact and law". I agree with that description. Mr Cranston is not a qualified lawyer. I am satisfied he is not in a position to adequately conduct his own defence.
The CDPP produced a vastly different estimate of the cost of representation for Mr Cranston's trial. Its estimate allowed for six weeks preparation and a seventeen week trial with no allowance for disbursements. Using the schedule of fees published by the Legal Aid Commission, the CDPP estimated that, if only junior counsel was retained, then Mr Cranston's defence costs would be $217,350 (which equates to a daily combined cost of $1890 for solicitor and counsel). The CDPP estimated that if, in addition, senior counsel was retained at Legal Aid rates then the total cost of the trial would be $431,250 (which involves an additional $1860 per day for senior counsel). [14]
I do not accept either of the CDPP's estimates as falling within the reasonable range of the cost of a defence that would not be "manifestly inadequate" (Milat supra). Having regard to the size of the brief and the complexity of the CDPP case I do not accept that six weeks is an appropriate estimate for pre‑trial work; that is, preparation and pre‑trial applications. Further, to make no allowance for disbursements is unreasonable. Whatever the scope of the electronic search facilities provided for in the Crown brief, some parts of the brief such as the text of the witness statements will need to be printed. Otherwise it may be necessary to have some advice from a forensic accounting firm. Finally, to the extent that it is necessary to estimate the minimum costs of adequate private representation for any trial, I do not accept that the Legal Aid Commission rates are the relevant rates. As I will explain, Mr Cranston has been refused legal aid. There is no basis for assuming that any relevantly qualified counsel or solicitor that Mr Cranston retained privately would accept those rates.
As stated, Mr Cranston's trial will be complex and lengthy. At the very minimum he will need to be represented by an experienced junior counsel and a reasonably experienced solicitor. He will require some capacity to print parts of the brief. A proper period for preparation and the conduct of any pre‑trial applications would be at least ten weeks with the trial estimate being seventeen weeks. Bearing in mind Ms Musgrave's estimates and the approach stated in Milat, the combined cost of a sufficiently experienced junior counsel and instructing solicitor would be at least $5500 a day. Hence, at a minimum and allowing for some disbursements, I estimate that a privately funded defence of Mr Cranston would cost $800,000. [15]
In a letter dated 18 December 2019, the CDPP stated that it was "unable to comment". [30] Ms Musgrove sought clarification and was advised in a letter dated 19 December 2019 that the CDPP "does not wish to comment on any applications". [31] On 9 January 2020, the Attorney‑General's Department responded on behalf of the Attorney‑General and stated that "[i]t is unlikely that an ex gratia payment would be available". [32] However, the letter advised that the Australian Government can provide grants of legal financial assistance under a number of different schemes including the "Special Circumstances Scheme, the Commonwealth Public Interest & Test Case Scheme and the Disbursement Support Scheme". [33]
In a letter dated 9 March 2020, the CDPP advised Ms Musgrave that Mr Cranston had not exhausted all avenues of available legal assistance. [34] The letter advised that Mr Cranston should make a fresh application to the Legal Aid Commission setting out "the fact that a stay application is pending; and … the adequacy of the restrained funds to meet any cost the Commission would incur if it agreed to fund his defence". [35] In response to this letter, Ms Musgrave wrote to the Grants Division of Legal Aid NSW requesting advice on whether there was any avenue open for Mr Cranston to secure assistance from the Legal Aid Commission. [36] On 10 March 2020, they responded confirming the finality of the decision of the Legal Aid Review Committee. [37]
On 16 March 2020, Ms Musgrave submitted an application for ex gratia funding to the Commonwealth Financial Assistance Office of the Attorney-General's Department on Mr Cranston's behalf. [38] In her oral evidence on 22 April 2020, Ms Musgrave stated that she was advised a response might be forthcoming on 29 April 2020. [39] As at 30 April 2020 no response had been provided.
Mr Cranston has made enquiries of two solicitors who have advised him that they are unable to act on a pro bono basis. [40] Ms Musgrave has also contacted six sets of chambers with counsel who have criminal experience. No counsel who is able to appear on a pro bono basis has been identified. [41]
I am satisfied that Mr Cranston has exhausted his prospects of obtaining pro bono representation or a grant of legal aid. I am also satisfied that, absent a stay of his trial, he will not receive funding from the Commonwealth for his defence.
Mr Maidment submitted that there was "scant justification for the expenditure" of $432,587 "on matters that really have little or no bearing on his defence to the charges against him". [86] I do not accept that submission. As Mr Barrow submitted, Mr Cranston was mostly a respondent to the various proceedings in which he expended funds on litigation. Further, in broad terms the litigation either involved Mr Cranston defending proceedings brought against him, protecting his interests in these proceedings by not being compelled to testify on matters related to the charges he faces or pursuing litigation to secure funds for his defence. Ms Musgrave was clearly knowledgeable of the details of the litigation involving Mr Cranston yet no questions were directed to her as to whether the expenditure of the funds was justifiable. None of the reported decisions provide any support for the contention that Mr Cranston's conduct of any of the proceedings was imprudent or unreasonable (see Cranston (No 8); Cranston (No 10) and Onley supra). Generally, if the State charges someone with a serious crime of great complexity and also seizes their assets via legal proceedings while charges are outstanding, it cannot complain if the citizen exercises their rights to engage legal representation to defend themselves. The proposition that Mr Cranston should have not spent any funds on representation or not pursued bona fide claims to secure funding for representation, but instead saved his resources and solely allocated them to the immediate preparation for, and the conduct of, his trial is simply a product of hindsight.
The second matter that Mr Maidment pointed to was rental payments incurred by Mr Cranston to his uncle since late 2017. As noted, the unit that Mr Cranston and his wife owned and lived in at the time of his arrest was restrained, forfeited and sold. In his oral evidence Mr Cranston explained that due to the publicity associated with the charges against him he found it difficult to secure rental accommodation. [87] He said that in late 2017 his uncle has just separated from his wife and purchased an investment property. His uncle agreed to lease it to Mr Cranston and his wife [88] for $1200 a week which was sufficient to enable his uncle to meet his mortgage commitments. [89] At the time they signed the lease Mr Cranston was earning $1350 a week net and his wife had been earning $1000 a week net. [90] However, Mr Cranston's wife had just given birth to their first child and commenced six months maternity leave on half pay. [91] In March 2020, the property was sold and Mr Cranston and his wife leased another property for $700 a week. It was suggested that it was imprudent for him to have agreed to pay $1200 in December 2017 given his financial circumstances especially as his wife had just commenced maternity leave. [92] Mr Cranston stated that at the time he believed he would succeed in the D & O Claim. [93] However, he also agreed that, with the benefit of hindsight, [94] it was not a sensible decision [95] but said that he was under great stress and his judgment was impaired. [96]
I do not attach much weight to this matter. As at November to December 2017, Mr Cranston was in need of accommodation for himself and his pregnant wife. He had achieved a level of notoriety and been stripped of his assets. In those circumstances, it is understandable that he found obtaining private rental accommodation difficult and his decision‑making was impaired. Mr Cranston could reasonably have expected his uncle to provide him with some flexibility in the promptness of payment that a third party lessor might not. The payment of a high but not exorbitant rent for accommodation does not preclude an accused person from invoking Dietrich.
The third matter relied on by Mr Maidment concerns Mr Cranston's alleged failure to set aside his wife's maternity leave pay for his legal fees. Since she gave birth to their first child in December 2017, Ms Cranston has not returned to work. Instead, she has either been on maternity leave, or leave without pay. Her maternity leave entitlement can be taken as either three months leave on full‑time salary or six months leave on part‑time salary. Her maternity leave payments total approximately $26,000. The contention that it should have been saved but was not, was based upon an income and expenditure statement Mr Cranston prepared which showed that his net wages from Citywide and Permaform International were sufficient to (just) meet household expenses including rent. [97] It was submitted that Mr Cranston and his wife were imprudent in not saving the proceeds of her maternity leave pay for the cost of his criminal trial.
Again, I found this entirely unconvincing. The wage figure attributed to Mr Cranston in the income and expenditure statement only concerns the period from February 2018. As noted, prior to then he was either unemployed or earning about half that amount. Further, Mr Cranston's wife contributed a significant amount to his legal expenses and her maternity leave pay may have contributed to that amount. Otherwise, the list of household expenses prepared by Mr Cranston and included in the income and expenditure statement is reasonably thorough but not comprehensive. For example, it does not include any amount for dental, clothes or car repairs. I would expect that, once a reasonable allowance is made for all household expenses, then, even without any discretionary spending, there was little scope for saving Ms Cranston's maternity leave entitlements.
This aspect of the CDPP's opposition to Mr Cranston's stay had no substantial force. An assessment of whether Mr Cranston is relevantly indigent is related to the nature of the criminal trial he faces. If Mr Cranston was due to face a one to two‑week trial that required, say, a further week's preparation then his level of income and expenditure over the last few years is such that I would not be satisfied that he was indigent. However, he is due to face a complex and lengthy trial. Such trials do not just appear out of nowhere. In his case it has been preceded by various applications including a related set of proceedings that restrained Mr Cranston's assets and resulted in him being examined about the subject matter of the proceedings (although that is not available to the prosecution). It is in that context that an assessment of whether he is relevantly indigent must be undertaken. Further, a prima facie demonstration that he is indigent is not rebutted by suggesting that his wife's maternity pay of around $26,000 over three years was squandered or that he paid $1200 rent instead of $700. Equally it is not rebutted by contending that he wasted legal fees by having the temerity to pay for legal representation to defend other proceedings that the State in its various manifestations brought or in unsuccessfully pursuing an insurance claim to cover his legal fees.
Mr Rech stated that on 7 March 2018 he signed a costs agreement with Ms Musgrave. A copy of the agreement was attached to his affidavit. It is signed by Mr Rech and refers to Permaform International. The document recounts Ms Musgrave being instructed to act on Mr Cranston's behalf in six different matters including these proceedings, the POCA proceedings and the other proceedings noted above and that Ms Musgrave had incurred $130,000 in unbilled costs. Under the agreement, either Mr Rech or Permaform International or both agreed to provide funding of $200,000 for the benefit of Mr Cranston. On the same day, Mr Rech executed a statutory declaration in which he stated, inter alia, that the funds he agreed to provide were not funds owing to Mr Cranston or a loan to him. [115]
In the events that happened, Mr Rech made three payments to Ms Musgrave on Mr Cranston's behalf totalling $128,000, namely, $28,000 on 20 April 2018, $50,000 on 11 October 2018 and $50,000 on 20 June 2019. In his affidavit Mr Rech stated that neither of the Permaform companies is able to further contribute to Mr Cranston's defence. Amongst other matters he nominated the cost of expansion as well as the recent effects of the COVID‑19 pandemic on trading conditions. [116] In his oral evidence he also referred to Permaform International's large investment in research and development in recent years as affecting the capacity of the business to fund the balance of the $200,000. [117]
The cross‑examination of both Mr Cranston and Mr Rech focussed on the timing and circumstances in which Mr Rech came to agree to fund $200,000 of Mr Cranston's legal expenses. As noted, Mr Rech recalled that they first met at café following Mr Rech inquiries to Wentworth Williams, [118] at the time they met Mr Cranston was working for Citywide [119] and Mr Rech knew that Mr Cranston was facing charges. [120] In re‑examination Mr Rech said that he could not recall why there was a delay of between four months from the signing of the costs agreement and Mr Cranston commencing work.
Mr Cranston also said he was referred by Wentworth Williams [121] and he first met Mr Rech at a café. [122] He initially said it was only around a month prior to his commencing work with Permaform International but later said it "would have been a couple of months" prior to that time. [123] He said he met Mr Rech around three or four times before he commenced working for Permaform International. [124] He had little recollection of how or when the topic of Mr Rech providing assistance was raised. [125] He said that Mr Rech offered to assist and that "it would have been after" he commenced employment with Permaform International. [126]
Mr Rech said that he did not offer Mr Cranston employment when they first met at a café but decided soon after ("it certainly wasn't that long after that meeting though"). [127] Mr Rech said that the topic of funding Mr Cranston's defence "came up in conversation I believe not too far after our first conversation took place", [128] although he could not recall who raised it. [129] He said the business had "cash available" even though it was intending to pursue an expansion strategy. [130] Mr Rech accepted that at the time he agreed to fund Mr Cranston he had not seen any references for Mr Cranston. [131] He agreed he never made any similar arrangement for anyone else previously. [132] He agreed that his actions were "quite unorthodox" [133] but the decisions were made in a "very short period of time" and that he was "really lacking the right people to facilitate" the expansion of his business. [134]
Both Mr Cranston and Mr Rech denied that they entered into any arrangement for Mr Rech to disguise the use of Mr Cranston's funds. [135]
Even allowing for the passage of time and Mr Cranston's mental health issues, I found that both his and Mr Rech's explanation of the timing and circumstances in which Mr Rech agreed to fund $200,000 of Mr Cranston's legal expenses vague and unconvincing. The undisputed dates are that Mr Cranston commenced work with Citywide on 19 February 2018, that on 7 March 2018 Mr Rech signed the costs agreement, that a payment of $28,000 was made on 20 April 2018, that Mr Cranston was still working with Citywide in late May 2018 and he did not commence work with Permaform International until 7 July 2018. Any first meeting that Mr Cranston and Mr Rech had in a café before the costs agreement was signed must have occurred between 19 February 2018 and 7 March 2018. If Mr Cranston and Mr Rech's explanation is true, it means that, at best, Mr Rech agreed to gift (or "invest") $200,000 for legal expenses for a person he had only just met and had little knowledge of than other than that he was recommended by a firm of accountants and was facing charges. Mr Rech took the unprecedented step, for him, of funding Mr Cranston's legal expenses even though Mr Cranston would not commence work for Permaform International for another four months and his business was about to pursue a costly expansion.
I find it inherently implausible that, in those circumstances, Mr Rech would agree to make such a spontaneous and large contribution to the legal defence of someone he had only just met. The far more likely scenario is that, by some means or other, Mr Rech was only promising funds for Mr Cranston's legal expenses that in substance were originally contributed by, or at least connected to, Mr Cranston in some way. To the extent that it is necessary, I am satisfied on the balance of probabilities that it is the case. I reject Mr Cranston and Mr Rech's evidence to the contrary. Further, the evidence of the assets seized in the POCA proceedings suggests that prior to his arrest Mr Cranston had substantial assets including cash. As noted, his work history suggests he would have made numerous business contacts. These matters, and the evidence concerning Permaform International, raise the very realistic likelihood of his having "parked" funds in various businesses either before or after his arrest. It follows that I am not satisfied that Mr Cranston has discharged his onus of proving that he is relatively indigent within the meaning of the above passage from Dietrich.
Three further matters should be noted.
First, Mr Maidment submitted that it should also be found that Mr Rech has declined to fund the balance of $72,000 owing under the costs agreement in order to assist Mr Cranston with this application. I am not positively satisfied of that matter. Mr Rech's explanation for the difficulties with his business seems plausible. The crucial matter so far as this application is concerned is the lack of proper disclosure so far as Mr Cranston is concerned.
Second, Mr Barrow submitted that it would be an exercise in futility for Mr Cranston to have funds available to him which he chooses not use as a means of avoiding a trial. He submitted that, if the Court granted a stay, it would only be temporary because the strong likelihood is that via one means or another the Commonwealth would fund Mr Cranston's defence. I do not give much weight to this submission. The obvious rejoinder is that Mr Cranston has little to lose from making the application in that if it succeeds it might lead to either the Commonwealth declining to fund him and the prosecution terminating, or him not having to deploy any of his own assets for his defence.
Third, in his submissions Mr Maidment made reference to parts of the CCS which refer to a shortfall in the amount of tax that was said to be owing and the amount recovered as part of the "context" in which this application must be considered. Mr Maidment made reference to the fact that in his affidavit Mr Cranston "has not offered any explanation" for the (alleged) shortfall. [136]
This submission needs to be treated with care. The (only) significance of the CCS to this application is that it sets out the allegations made against Mr Cranston; it has not been treated as any evidence of those allegations. In the absence of any evidence demonstrating the existence of any such "shortfall" or Mr Cranston's connection to it, there was no onus, legal, evidential or practical, on Mr Cranston to address it. However, there was an onus on Mr Cranston to prove that he is indigent and he has failed to discharge it.
Second, I have already referred to the submissions made on behalf of the CDPP which at one point suggested that, based on six weeks of preparation and a seventeen week trial at Legal Aid rates for junior counsel, funding of around $220,000 would be sufficient for Mr Cranston's defence. One consequence of the POCA not allowing an accused's restrained or forfeited assets to be used to fund their defence is that debates about the funds necessary to properly conduct a defence occur on a Dietrich application involving the CDPP rather than in an application under the POCA at which the Commissioner for the AFP would be the respondent. This leads to the unedifying spectacle of a prosecutor chiselling away at the defence estimate of what is needed to present an accused's case. This has the potential to give rise to a perception that in doing so the prosecutor is seeking to gain a forensic advantage from the accused having limited resources, even though in this case that was not the reality. One means to mitigate that potential with future applications is to direct that, on any such application, the prosecution disclose its estimate of the costs it will incur in the conduct of the trial. Allowing for the difference in the cases that the prosecution and defence will conduct, this will nevertheless enhance transparency when considering a prosecution submission as to how cheaply an accused's defence can be conducted.
PM Affidavit 2/3/2020, Annexure P.
PM Affidavit 2/3/2020, Annexure R.
PM Affidavit 2/3/2020, Annexure S.
PM Affidavit 2/3/2020, Annexure S.
SM Affidavit 9/3/2020, Annexure G.
SM Affidavit 9/3/2020, Annexure G.
Affidavit Penny Musgrave affirmed 16/3/2020 at Annexure A ("PM Affidavit 16/3/2020").
PM Affidavit 16/3/2020, Annexure A.
PM Affidavit 16/3/2020 at [5].
T 70.24.
PM Affidavit 2/3/2020 at [31].
PM Affidavit 2/3/2020 at [32].
Affidavit sworn 2 March 2020; Affidavit sworn 16 March 2020; Affidavit sworn 30 March 2020; Affidavit sworn 16 April 2020.
Affidavit of Adam Cranston sworn 2/3/2020 at [5] ("AC Affidavit 2/3/2020").
T 11.11.
T 11.37.
T 11.47.
T 13.
T 14.34.
T 15.12.
Affidavit of Adam Cranston affirmed 16/3/2020 at [2] ("AC Affidavit 16/3/2020").
AC Affidavit 16/3/2020 at [3].
AC Affidavit 2/3/2020 at [5]; Affidavit of Adam Cranston affirmed 30/3/2020 at [2] ("AC Affidavit 30/3/2020"); PM Affidavit 2/3/2020 at [13].
AC Affidavit 30/3/2020 at [2].
AC Affidavit 2/3/2020 at [13].
AC Affidavit 2/3/2020 at [13].
AC Affidavit 2/3/2020 at [13]; PM Affidavit 2/3/2020 at [20], Annexure M.
AC Affidavit 2/3/2020 at [6].
AC Affidavit 2/3/2020 at [6]; PM Affidavit 2/3/2020 at [20].
AC Affidavit 2/3/2020 at [6]; PM Affidavit 2/3/2020 at [20].
AC Affidavit 2/3/2020 at [6]; PM Affidavit 2/3/2020 at [20].
AC Affidavit 16/3/2020 at [4].
AC Affidavit 16/3/2020 at [4].
AC Affidavit 30/3/2020 at [3].
AC Affidavit 30/3/2020 at [4].
AC Affidavit 30/3/2020 at [4].
AC Affidavit 30/3/2020 at [4].
AC Affidavit 30/3/2020 at [4].
AC Affidavit 30/3/2020 at [5].
AC Affidavit 30/3/2020 at [5].
PM Affidavit 2/3/2020 at [15]; AC Affidavit 2/3/2020 at [4].
PM Affidavit 2/3/2020 at [15]; AC Affidavit 2/3/2020 at [4].
AC Affidavit 2/3/2020 at [7].
AC Affidavit 2/3/2020 at [7]; PM Affidavit 2/3/2020 at [21].
AC Affidavit 2/3/2020 at [9].
AC Affidavit 2/3/2020 at [10].
PM Affidavit 2/3/2020 at [20], Annexure J.
AC Affidavit 2/3/2020 at [9], [12]; PM Affidavit 2/3/2020 at [20].
PM Affidavit 2/3/2020 at [20], Annexure K.
AC Affidavit 2/3/2020 at [12].
AC Affidavit 2/3/2020 at [11]; PM Affidavit 2/3/2020 at [22].
AC Affidavit 2/3/2020 at [11].
T 30 to T 31; T 71 to T 72.
PM 2/3/2020 at [17], [18] and [23].
PM 2/3/2020 at [18(a)(ii)].
PM 2/3/2020 at [18(c) and (d)].
T 90.45.
T 44.50.
T 45.2; T 47.
T 47.31.
T 46 to T 48.
T 48.9.
T 52.44.
T 53.21.
T 53.40.
T 53.12.
T 53.
AC Affidavit 2/3/2020, Annexure I.
T 11.44 to .46.
T 22.43 to .46.
Affidavit of Gabriel Madej sworn 3 April 2020 at p 372, Annexure D ("GM Affidavit 3/4/2020").
AC Affidavit 16/4/2020 at [9(c)].
GM Affidavit at pp 315 and 329, Annexure D.
T 26.30.
T 27. 22 to .29.
GM Affidavit at p 330, Annexure D.
AC Affidavit 2/3/2020 at [13].
AC Affidavit 16/3/20 at [2].
Affidavit of Robert Rech affirmed 20 April 2020 at [2] ("RR Affidavit 20/4/2020").
RR Affidavit 20/4/2020 at [3].
T 59.13.
T 59.34.
T 59.35.
T 59.39 to T 59.49.
RR Affidavit 20/4/2020 at [5].
RR Affidavit 20/4/2020, Attachment B.
RR Affidavit 20/4/2020 at [10] to [11].
T 65.21.
T 35.1; T 35.29; T 37 (Cranston); T 60.16 (Rech).
T 60.2.
T 60.30.
T 35.28.
T 37.37.
T 35.23.
T 37.28.
T 38.40.
T 39.49.
T 61.21.
T 62.26.
T 62.45.
T 62.30.
T 63.42.
T 63.8.
T 63.23.
T 64.11.
T 40.30 (Cranston); T 62.48 (Rech); T 66.36 (Rech).
T 92.25.
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Decision last updated: 29 March 2023