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[2014] NSWSC 1582
Supreme Court of NSW
2014-10-31
Davies J, Fullerton J
Original judgment source is linked above.
Judgment 1On 3 January 2013 the Defendant was charged by a Court Attendance Notice which alleged that he conspired to commit an offence being a contravention of s 1311(1) and s 1043A(1) of the Corporations Act 2001 (Cth). 2On 11 November 2013 the Defendant's committal commenced in the Downing Centre Local Court. On 19 December 2013 the Defendant was committed for trial in this Court. 3On 24 March 2009 the Defendant was the subject of a compulsory examination pursuant to s 19 of the Australian Securities and Investments Commission Act 2001 (Cth). 4On 24 February 2010 an alleged co-conspirator with the Defendant, John Hartmann, pleaded guilty to various insider trading offences. On 31 March 2010 Mr Hartmann provided his first statement to ASIC for use in proceedings against the Defendant. On 26 March 2012, after his release from prison, Mr Hartmann provided a second statement to ASIC for use in proceedings against the Defendant. 5On 13 December 2013 the High Court granted special leave from the decision of the Court of Criminal Appeal in Lee v The Queen; Lee v The Queen [2013] NSWCCA 68. 6On 22 January 2014 the Defendant's solicitors wrote to ASIC in relation to the possible ramifications of Lee for the proceedings concerning the Defendant. On 30 January 2014 David Lusty of ASIC emailed the Defendant's solicitors confirming that ASIC officers had read the transcript of the s 19 examination that the Defendant was required to undergo on 24 March 2009. The email set out details of the further distribution of the transcript within the prosecution team. 7On 5 February 2014 the Commonwealth Director of Public Prosecutions (CDPP) confirmed that the CDPP officers and counsel had or may have read the transcript of the Defendant's s 19 examination. 8On 7 February 2014 the Defendant was arraigned in this Court. On that day the trial was set down to commence before me and a jury of 12 on 3 November 2014. 9Further correspondence passed between the Defendant's solicitors and the CDPP in relation to Lee and its implications for the present proceedings. 10On 21 May 2014 the High Court handed down judgment in Lee v The Queen; Lee v The Queen [2014] HCA 20. 11On 30 May 2014 the CDPP wrote to the Defendant's solicitor advising that a new case officer had assumed carriage of the matter and that the new case officer had not read the s 19 transcript of the Defendant. Further correspondence passed between the CDPP and the Defendant's solicitors. 12On 11 July 2014 the Defendant filed a Notice of Motion seeking a temporary stay of the indictment based on the High Court's judgment in Lee. The Notice of Motion was heard by Fullerton J on 18 August 2014. 13On 3 October 2014 Fullerton J ordered by consent that the commencement date of the trial was moved to 17 November 2014. Later that day Fullerton J made the orders sought in the Defendant's Notice of Motion. On 10 October 2014 Fullerton J published her Reasons for Judgment: Curtis v R [2014] NSWSC 1392 14On 17 October 2014 the CDPP filed and served a Notice of Appeal from the orders of Fullerton J. 15From the date Fullerton J published her Reasons, correspondence passed between the CDPP and the Defendant's solicitors with regard to the prosecution team and particularly John Davidson, the principal legal officer with the CDPP who had the carriage of the Defendant's prosecution. 16On 24 October 2014 the CDPP filed a Motion to vacate the trial date of 17 November. The principal reason for that was the pendency of the appeal from Fullerton J's orders. A subsidiary reason was that Junior Counsel for the Crown was unavailable until 24 November 2014. 17The Motion came before me for hearing on 31 October 2014. In written submissions filed two days earlier the Defendant indicated that he consented to the vacation of the trial date on the basis that the Crown agreed to pay costs thrown away. If the Crown did not so agree the Defendant opposed the application. In oral submissions Senior Counsel for the Defendant accepted that the trial needed to be vacated because at the time of hearing of the Motion the Crown did not have what Senior Counsel described as a Team B ready to run the trial. However, the Defendant pressed for the costs thrown away by reason of the vacation of the trial. 18There was no serious prospect that the Crown would have been ready to run the trial commencing 17 November. In any event, it wished to pursue its appeal rights because resolution of the issues decided by Fullerton J were likely to impact on the way the trial was run. In those circumstances I vacated the trial date and stood the matter into the Arraignments List on 6 February 2015. 19The basis for the costs application was that the Crown had done nothing from as early as the beginning of this year when it was put on notice about the High Court having granted special leave in Lee. The Defendant asserted that the Crown ought to have appreciated how a successful outcome for the Appellant in Lee would impact on the Defendant in the present case. Further, after the judgment in Lee was handed down the Crown did nothing about engaging a new prosecution team that was untainted by knowledge, derivative or otherwise, of the material in the s 19 examination transcript. 20The Defendant particularly complained about the failure of the Commonwealth subsequent to the making of Fullerton J's orders. The Defendant submitted that even if the Commonwealth wished to challenge Fullerton J's orders it could have organised a new prosecution team so that the trial could have proceeded. This was said to be the case because there was an absence of evidence before Fullerton J from the Crown that could have shown that the prosecution team needed the transcript at the trial. It was also argued that the transcript was irrelevant to the trial itself. Accordingly, if the Crown wanted to test the legal position with regard to the ASIC Act it ought not to do it at the expense of the Defendant. Had the Crown engaged a new trial team the trial could have proceeded. 21The Defendant also criticised the CDPP for making the present application late after further costs were incurred. 22The Crown pointed to the terms of a letter from the Defendant's solicitors to the CDPP dated 7 October 2014 to show that the issue was said by the Defendant to be wider than simply organising a fresh prosecution team. The letter relevantly says this: Our letter dated 28 May 2014 also noted our view that a conspiracy charge required special contemplation in light of Lee. We noted our assumption that as a conspiracy charge required your consent, we assumed that the content of the examination had been referred to you by those recommending the charge, or that at the least those recommending the charge had the content of the examination in contemplation at the time of recommendation. On 11 September 2014, we again sought confirmation of our assumption that the examination was taken into account for the purposes of laying the charge against our client, including by you. We received a response on 19 September 2014 informing us that no assumptions about how prosecutorial decisions were made in this case ought to be made and indicating that it was inappropriate for further comment to be given on the matter given our client's notice of motion (referred to above) was yet to be determined. As the notice of motion has now been determined, we request a full response to the matters raised in our letters dated 28 May 2014 and 19 September 2014 now be provided without further delay. In our view, two possible implications arise from the use of our client's examination transcript for the purposes of laying the charge. Firstly, if our client's examination transcript was used indirectly by the case officer and/or counsel in making a recommendation that a conspiracy charge be laid, the evidence to substantiate the charge requires fresh consideration. We submit that this consideration ought be limited to the contents of the trial brief and the committal transcript, in particular the evidence of Mr Hartman and Ms Van Heughten. In our view, a review conducted on those terms would confirm that there are no reasonable prospects of conviction. For the avoidance of any doubt, an indirect use of the examination referred to above would include circumstances where the content of the examination was in the case officer and/or counsel's contemplation during the course of preparing any submission to you on the charge but was not directly annexed, excerpted or otherwise referred to in that submission. Secondly, and alternatively, if our client's examination or a summary of it was used directly by the case officer and/or counsel in making a recommendation that a conspiracy charge be laid, and as a consequence was directly used by you in your consideration of whether or not to consent to the charge, it is our submission that any fresh consideration as to the charge cannot be conducted by an officer within the CDPP's office. Either the charge is unable to be proceeded with in the interests of justice as the statutory power to consent to a conspiracy charge under section 11.5(8) of the Criminal Code (Cth) is non-delegable, or the charge ought to be referred to a State or Territory Director of Public Prosecutions for fresh consideration on the terms outlined above. We ask that urgent consideration be given to these matters, given the trial is listed to commence on 17 November 2014. 3. Evidentiary implications Finally, in our letter dated 28 May 2014, we informed the CDPP that in our view all statements taken by those who had access to the details of our client's examination were now tainted and evidence gathered as a result of ASIC or the CDPP's reference to our client's examination has been unlawfully obtained and ought to be inadmissible at trial. Our client's right to challenge admissibility on this basis at trial is expressly reserved. 23The Crown submitted that the effect of that letter is that even if there was a fresh prosecution team the Defence would submit that the Crown had an onus to establish that the materials that formed the basis of the Crown case had not been obtained pursuant to any unfairness caused by the access to the transcript. That might extend to evidence of the Crown's chief witness, Mr Hartmann. The Crown submitted that the letter and its implications highlighted that the trial could not proceed until there had been a resolution of the question about whether or not access to and procedural delivery of the transcript is something which is permissible prior to the trial commencing. 24Subject to limited statutory exceptions, the general rule is that, in criminal proceedings, orders for costs are not made: Latoudis v Casey (1990) 170 CLR 534 at 557; R v Mosely [1992] 28 NSWLR 735 at 738. Section 17 of the Criminal Appeal Act 1912 (NSW) may be taken to reflect the general rule: R v Mosely at 739. 25Nevertheless, there are procedural ways around the problem. An adjournment might be granted if a party agrees to pay the costs or undertakes to do so with the result that any remedy would be in contract: R v Mosely at 738. A similar way of achieving the same result is for the criminal proceedings to be stayed until a costs order is paid. It would be appropriate to do this where there is fundamental unfairness in permitting the Crown to proceed to trial where the costs have been incurred by the Crown's fault of a relatively serious kind: R v Fisher [2003] NSWCCA 41; (2003) 56 NSWLR 625 at 2 and [46]-[47]. 26It is necessary, however, to point to some fault on the part of the prosecution. Unfairness cannot be established without proof of fault: Petroulias v The Queen [2007] NSWCCA 154; (2007) 176 A Crim R 302 at [25]; R v Selim [2007] NSWSC 154. The power to stay proceedings in circumstances such as for the payment of costs is only to be exercised in the most exceptional of circumstances: Petroulias at [17]. 27It seems to me, therefore, that if some delinquency, unconscionability or unfairness on the Crown's part can be demonstrated the Court in the control over its own processes would have the power to stay the trial until such time as the costs are paid. In the present case, it does not seem to me that there is any such delinquency, unconscionability or unfairness on the Crown's part. 28The present difficulty that led to the vacation of the trial date was largely brought about by the unfortunate timing in the development of the law as a result of the High Court's decision in Lee v The Queen and its application in the circumstances of the present case by Fullerton J in her judgment. Three time periods should be briefly considered.
(a) Prior to the judgment in Lee v The Queen 29Reliance is placed on letters from the Defendant's solicitors to the CDPP of 22 January 2014, 31 January 2014 and 19 February 2014. These letters sought to ascertain who on the prosecution's side had read or had access to the s 19 transcript. They made reference to the appeal in Lee v The Queen and its implications for the present proceedings. The letter of 19 February 2014 concluded by saying: However, having squarely placed the CDPP on notice of the issue, any application by the CDPP to delay the commencement of the trial arising from a decision in Lee which is favourable to our client will be vigorously opposed. 30However, the position with regard to the law was uncertain throughout this period and until the High Court handed down its decision on 21 May 2014. It seems to me that it was entirely premature to expect that the CDPP should have an alternative plan in place in case the judgment in Lee was favourable to the Defendant. Indeed, the CDPP may even have had a cautious view, based on Lee v NSW Crime Commission [2013] HCA 39; (2013) 302 ALR 363, that a decision in the pending appeal would be unfavourable to the present Defendant. 31I do not consider there was any fault on the Crown's part prior to the High Court's judgment in Lee v The Queen.
(b) From Lee v The Queen to Fullerton J's judgment 32After the High Court's judgment in Lee v The Queen further correspondence ensued between the Defendant's solicitors and CDPP. In a letter anticipating the issues contained in the letter of 7 October 2014 (set out in [22] above), the Defendant's solicitors in a letter dated 28 May 2014 first asked for a new prosecution team to be assembled with those team members being persons who had not had access to the s 19 transcript. The letter went on to say: We also view the Lee decision as possibly affecting two further aspects of the prosecution. Firstly, in circumstances where a conspiracy charge has been laid, requiring the Director's personal consent, it is reasonable to assume that those recommending the institution of such a charge referred the Director to the content of the examination, or had the content of the examination in contemplation when referring the charge. Please let us know if our assumption is incorrect. If our assumption is correct, in our view the charge is unable to be proceeded within the interests of justice and ought to be discontinued. Secondly, we contend that all statements taken by those who had access to the details of our client's examination are now tainted and evidence gathered as a result of ASIC or the CDPP's reference to our client's examination was unlawfully obtained and ought be inadmissible at trial. We place you on notice that once those officers who read or were aware of the content of our client's examination are identified, we will seek full details of those persons involved in taking statements in this matter and continuity evidence in relation to each exhibit proposed to be tendered at trial such that an appropriate challenge to admissibility may be brought. 33Thereafter on 11 July 2014 the Defendant filed the Notice of Motion seeking a temporary stay of the indictment based on the High Court's judgment in Lee v The Queen. The basis for that appears to have been the view taken by the Defendant's solicitors that the responses received from the CDPP were not satisfactory in relation to the persons who were involved in the handling of the prosecution subsequent to the decision in Lee v The Queen. One reason for the ongoing dispute appears to be the reliance placed by the CDPP on the decision of the Western Australian Supreme Court in R v Catena (No 3) [2013] WASC 97 that was said to demonstrate the distinction between the position with the Defendant's prosecution and that in Lee v The Queen. That position was argued by the CDPP before Fullerton J but her Honour respectfully disagreed with the judgment of Corboy J in that case. 34It does not seem to me that any fault can be demonstrated on the part of the Crown in this period. In particular, once the matters in the letter of 28 May 2014 had been raised by the Defendant, it was necessary for the determination of the matters which ultimately came before Fullerton J. Organising an alternative prosecution team was not going to solve those matters.
(c) The period after Fullerton J's judgment 35As noted earlier, Fullerton J made her orders on 3 October 2014 and published her Reasons on 10 October 2014. The CDPP filed and served a Notice of Appeal on 17 October 2014. 36I was informed by Senior Counsel for the Crown that there had been some hope that a Bench could be assembled by the Court of Criminal Appeal to hear the appeal a very short time after it was filed. In that regard the appeal was placed in the Call Over List on 23 October 2014. However, a timetable for submissions was ordered and the matter was adjourned for further mention to 6 November 2014. 37Correspondence continued between the parties from the time Fullerton J pronounced her orders. On 14 October 2014 the Defendant's solicitors wrote saying (inter alia): ... [W]e note that the trial date remains listed to commence on 17 November 2014 and therefore seek for all deficiencies to be addressed as a matter of urgency. Further, it is imperative that the Crown informs of the new trial team, including counsel without further delay. 38It was in the course of this correspondence that the letter of 7 October 2014 was written, the important parts of which I have extracted above at 22]. 39On 17 October 2014 further material and information was supplied by the CDPP in response to the letter of 14 October 2014. However, the issue of Mr Davidson's involvement remained unresolved. In a letter of 20 October 2014 the Defendant's solicitors complained that the CDPP had not properly responded to their letters of 7 and 14 October and they noted therefore that: It is premature for us to bring any application as to the exclusion of evidence, or to be in a position to properly inform the Court of any expected increase in trial length. 40On 23 October 2014 Mr Davidson sent an email to the Defendant's solicitors in these terms: [F]urther to our discussion about certain matters before court this morning. As indicated, this office is giving serious consideration to making an application to vacate the trial date of 17 November 2014, before the trial judge Justice Davies early next week. As you are aware we have filed a Notice of Appeal against the orders of her Honour Justice Fullerton made on 3 October 2014. The Registrar this morning set a timetable for written submissions and it is next listed before him for mention on 6 November 2014. That leaves between 7 -14 November 2014, for the appeal to be heard, if indeed the Chief Justice agrees to convene a special bench to do so. If the matter is heard, no matter which way it goes, it will leave us little time to prepare for trial given the issues that still need to be resolved between the parties. We have also been informed today that our junior counsel who has been in this matter for some time, Lincoln Crowley, is in a trial in the District Court that has gone well over the estimate and he will not now be available until 24 November 2014, at the earliest. Thus our serious contemplation of making an application to vacate the trial date. 41The following day the Notice of Motion was filed. 42Contrary to the Defendant's submissions, the issue raised as a result of the High Court's judgment in Lee v The Queen and Fullerton J's judgment in these proceedings was never going to be easily resolved by the provision of a new prosecution team. So much is made clear in the letters of 28 May 2013 and 7 October 2014. Until the issues determined by Fullerton J have been clarified finally on appeal, whether in the Court of Criminal Appeal or in the High Court, what will be under challenge at any trial will itself not be clarified. Where the actual laying of the charges against the Defendant is said to be affected by the material from the s 19 examination, let alone the evidence that will be put forward, the provision of a new prosecution team was always going to need to deal with those matters. It would have been inappropriate for the trial to proceed on the assumption of the correctness of Fullerton J's judgment when there was an appeal pending. A different outcome in an appeal court would mean that the course of events taken at the trial might then need to be reviewed. 43There does not seem to me to be any fault in the way the Crown has behaved in the period following Fullerton J's orders. An appeal had always been contemplated and was promptly instituted. The Crown relies on R v Catena (No 3). The legislation considered by Fullerton J was not the same legislation as the High Court determined in in Lee v The Queen. I mention these matters not to cast any doubt on Fullerton J's judgment but only to highlight the fact that the Crown's approach to an appeal cannot be considered to be an unreasonable one, nor the appeal regarded as hopeless. 44The timing of events has been unfortunate but that has been brought about by the date on which the High Court delivered judgment and the need to consider the present legislation in the light of that judgment when the trial had been fixed for November 2014. Once there was to be a challenge based on Lee v The Queen, maintaining the present trial date was always doubtful. 45In circumstances where no fault has been established on the part of the Crown, there is no basis for an order for costs against the Crown or for any order for a stay until costs are paid. 46I endeavoured to obtain some idea of what costs had been thrown away by the Defendant by reason of the vacation of the trial date. Nothing was clearly put before me in that regard but the impression I obtained from Senior Counsel for the Defendant was that at best they concerned preparation costs which might be duplicated and, maybe, cancellation fees. It does not seem likely that the costs thrown away would be very considerable. 47I accept that the need to vacate the trial is most unfortunate from the Defendant's point of view when he was first charged almost two years ago. However, at least part of the reason for that was the Defendant's desire to benefit, if possible, from the High Court's decision in Lee v The Queen. There was nothing unreasonable in that approach on his part but it necessarily led to the present delay. 48I am not satisfied that any actions or omissions on the part of the prosecuting authorities were unconscionable or unfair that resulted in the Defendant throwing away costs by reason of the vacation of the trial. 49It is not strictly necessary to consider the subsidiary reason put forward by the Crown for a vacation of the date, namely, the unavailability of the Crown's junior counsel. That is not the reason the trial date has been vacated. I would not have considered that counsel's unavailability would have been a proper basis for vacating the date. 50The application for costs by the Defendant and for any further stay until such costs are paid is accordingly dismissed.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 June 2016
R
Curtis
[2013] WASC 97
(1990) 170 CLR 534
(2013) 302 ALR 363
(2003) 56 NSWLR 625
[2014] HCA 20