R v Hodges [2018] QCA 92

SUPREME COURT OF QUEENSLAND

CITATION: R v Hodges [2018] QCA 92

PARTIES: R v HODGES, Lisa Anne (appellant)

FILE NO/S: CA No 163 of 2017 / DC No 1289 of 2017

DIVISION: Court of Appeal

PROCEEDING: Appeal against Conviction

ORIGINATING COURT: District Court at Brisbane – Date of Conviction: 26 June 2017 (Moynihan QC DCJ)

DELIVERED ON: 22 May 2018

DELIVERED AT: Brisbane

HEARING DATE: 1 May 2018

JUDGES: Gotterson and Philippides JJA and Daubney J

ORDERS: The application for leave to adduce new evidence is refused.The appeal be dismissed.

CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – ADMISSION OF FURTHER EVIDENCE – OTHER MATTERS – where the appellant was convicted of three counts of defrauding her employer of more than $500,000 – where the appellant conceded that the evidence at trial was sufficient to sustain the convictions – where the appellant appealed against convictions on the basis of a miscarriage of justice – where leave sought to adduce a clinical neuropsychologist report as new evidence – principles concerning an appeal on the basis of a miscarriage of justice where new evidence is sought to be relied upon – the nature of an appellate court’s jurisdiction to set aside a conviction and order a retrial / Lawless v The Queen (1979) 142 CLR 659; [1979] HCA 49, applied / R v HBR [2017] QCA 193, distinguished / R v Katsidis; ex parte Attorney-General (Qld) [2005] QCA 229, distinguished / R v Spina [2012] QCA 179, distinguished / Ratten v The Queen (1974) 131 CLR 510; [1974] HCA 35, applied

COUNSEL: A M Hoare for the appellant / G P Cash QC for the respondent

SOLICITORS: Fraser Power Solicitors for the appellant / Director of Public Prosecutions (Queensland) for the respondent

GOTTERSON JA: I agree with the orders proposed by Philippides JA and with the reasons given by her Honour.

PHILIPPIDES JA: The appellant was convicted on 26 June 2017 by a jury of three counts of defrauding her employer, the complainant company, of a total of more than $500,000. She was sentenced on 21 July 2017 to a head sentence of five years on one count and lesser concurrent terms on the other two counts.

The appellant sought and was granted leave to amend ground 3 of the grounds of appeal. The other grounds were abandoned.

The appellant concedes that the evidence at trial was sufficient to sustain the convictions. The appellant, however, seeks to have the convictions set aside and a retrial ordered on the basis that there was a miscarriage of justice by reason of certain evidence not having been given at trial. The appellant was granted leave to tender a report by Dr Mariani, a clinical neuropsychologist, for the purposes of the consideration of the application to adduce further evidence.¹

The respondent submitted that the appellant has not demonstrated that the report should be received as fresh evidence and that it did not establish that it was not reasonably open to the jury to convict the appellant.

For the reasons that follow, the application for leave to adduce evidence is refused.

The trial

The prosecution case was that the appellant acted dishonestly in her employment as an administrative officer for the complainant company, a carpet retail business, by failing to bank cash that had been received in respect of various invoices raised by the complainant company and in crediting her own Visa card by use of a merchant facility maintained by the complainant company. In that regard, the appellant’s role included entering the invoices into the MYOB program (an accounting program used by the complainant company to record monies/funds coming into and going out of the business). The invoices did not match the amounts entered in the MYOB system and the amount of cash actually being banked. The shortfall in banking made up the bulk of the fraud.

The appellant did not dispute these facts at trial but gave evidence denying any wrongdoing and mounted a positive case that the relevant transactions were carried out with the approval of and for the benefit of Mr Steven Dowling, the owner and manager of the complainant company. In that respect, the defence case was: that cash that had not been banked had been taken by Mr Dowling; that the method by which the MYOB system was managed did not reflect the actual invoices raised and was done so at the direction of Mr Dowling; and that such reversals as were performed were done so with the authority of Mr Dowling.

Mr Dowling gave evidence as part of the prosecution case. His evidence was that, during the period of the appellant’s employment, the business suffered some cash flow issues and that, as a consequence, he withdrew money from his superannuation fund and deposited it into the operating accounts of the business. These transfers were recorded and raised as a debt against the company. The appellant was generally responsible for the banking but occasionally it would be done by another employee. Mr Dowling also gave evidence of lies told by the appellant concerning short banking of around $2,000 that coincided with the appellant’s departure from the business. Those lies were relied on by the prosecution as going to the appellant’s credit. The trial judge gave a relevant credit direction to the jury concerning those and other lies relied upon by the prosecution. Mr Dowling additionally gave evidence that he had never instructed the appellant to conduct herself, in respect of the finances of the company, in the manner alleged by the appellant. He rejected the defence case as put to him and also denied using the cash of the company to renovate his home. He also rejected being confronted by the company accountant, Jennifer Burt, about taking cash from the business.

There was evidence that the appellant suffered a transient ischemic attack on 28 October 2013. Mr Dowling, however, rejected that as the reason for the appellant quitting her work and denied making any threat to the appellant.

Other employees of the company also gave evidence, including Robert Silk, Graham Simpson and Kevin Lee. The general nature of their evidence was concerned with the procedures within the company’s office and the allocation of various roles within the company. Their evidence was to the effect that the business appeared to be busy and should have been profitable. Mr Simpson gave evidence of having given money to Mr Dowling. He also gave an account of a telephone call he received from the appellant during which she asserted that she had done nothing wrong. None of the witnesses corroborated the appellant’s contention that Mr Dowling and/or his family members would routinely come into the office and receive cash.

Bliss Simmonds, the daughter of Mr Dowling, gave evidence concerning the company’s MYOB system. Her evidence was that it did not record any credits to the appellant but that there were, nevertheless, credits made to the appellant’s credit card. She said that the system that was in place, and ought to have been operating at the relevant time, was that the invoices raised in respect of the jobs would match the data entered into the MYOB system.

Jennifer Burt, an accountant employed by Mr Dowling as well as the complainant company, gave evidence to the effect that there were superannuation payments made by Mr Dowling into the company’s operating accounts. She gave evidence that the monies the subject of the fraud had been reported to the Australian Taxation Office and she was not aware of any other issues relating to cash not being properly accounted for. She denied that she had instructed the appellant in the use of the MYOB system. She also denied having a conversation with the appellant in which the appellant complained that Mr Dowling was taking money. She further denied confronting Mr Dowling about taking money from the company and that she had been involved in conduct to cover up the conduct of Mr Dowling.

Phil Bennett, a forensic accountant employed by the Director of Public Prosecutions, was also called as a witness. He gave evidence in relation to spreadsheets compiled using data provided by Ms Burt. He also provided a table correlating financial transactional evidence that referred to the amount of the short banking by reference to individual invoices, a corresponding deposit into the appellant’s accounts and any corresponding deposits into Mr Dowling’s accounts. He gave evidence of $33,500 in unexplained income having been deposited into the appellant’s accounts. His evidence was that, during the period when the appellant was on leave (of some four weeks) after the birth of her child, there was no cash missing from the accounts. He also gave evidence that there was in excess of $500,000 in accounted funds going into Mr Dowling’s account but that that might be explained by other sources of income and deposits.

The appellant’s case was largely consistent with her record of interview. In addition to giving evidence, the appellant called Mr Fields, who had been engaged to do work for Mr Dowling on the building of a shed. His evidence was that he was paid in cash for building the shed. He did not create invoices for the work performed. He was uncertain about the amounts of cash paid.

In relation to the appellant’s evidence, there were material aspects of her recollection which were deficient, as conceded by her counsel. These deficiencies concerned the appellant’s inability to detail her household finances, except in vague terms. She was unable to state her husband’s salary. She was unable to say whether the family vehicle was leased or owned and her evidence concerning her mother paying for the use of a granny flat was inconsistent with what she had said in her record of interview.

Evidence that the appellant suffered from a transient ischemic attack on 28 October 2013 was led to demonstrate that there was a reason for her leaving the business that was not related to fraud.

Application to adduce further evidence

In seeking leave to admit the report of Dr Mariani, a clinical neuropsychologist, the appellant conceded that the proposed evidence was new rather than fresh evidence.

The appellant submitted that where, as was the case here, the appellant’s case was entirely dependent upon her testimony, evidence that would assist the jury in assessing her credit was critical. It was argued that, in the absence of that evidence, the deficiencies in the appellant’s evidence (and matters such as the taking of breaks in giving evidence) were left unexplained and must have impacted adversely upon her credibility. Because the jury did not have the benefit of Dr Mariani’s report, the jury engaged in assessing the appellant’s evidence and her credit “without the information of the cognitive deficiency” and were also “not made aware of the effect of the transient ischemic attacks upon the appellant’s ability to effectively express her version of events to the jury”.

It was submitted that the case was one where a miscarriage of justice had been occasioned by the absence of the identified evidence being led that could only be remedied by an order for a retrial. The application sought that order rather than an acquittal because it was accepted that this was not a case where the proposed new evidence was such as would lead to an inevitable conclusion that the appellant would have been acquitted. The submission that a retrial should be ordered was made relying on the test enunciated in R v HBR,² by Mullins J (with whom the other members of the Court agreed), as to the Court’s residual discretion to admit new or fresh evidence, where it could be shown that there was “a significant possibility that a jury hearing the new evidence would have reached a different verdict”.

Relevant principles

In Ratten v The Queen³ and Lawless v The Queen,⁴ the High Court authoritatively stated the principles to be applied in dealing with an appeal against conviction on the ground that a miscarriage of justice occurred based on further evidence not given at trial. They are:Firstly, when the evidence not called at trial (whether or not it be fresh evidence in the strict sense of that expression), taken in conjunction with other evidence tendered at trial, shows the accused to be innocent or when it raises a reasonable doubt as to his guilt, the conviction must be set aside outright.⁵Secondly, in the case of fresh evidence only (being evidence of which the accused was unaware at the time of trial and which could not have been discovered with reasonable diligence), although innocence or reasonable doubt of guilt is not demonstrated, if it “shows that it is likely that a verdict of not guilty would have been returned by the jury had it had the benefit of the fresh evidence, the court should set aside the conviction and order a new trial”.⁶In both types of cases, the appropriate approach is to consider the proposed evidence in conjunction with the evidence tendered at the trial and whether it reveals a miscarriage of justice because it would be unsound or unsatisfactory to allow the conviction to stand.⁷ The miscarriage of justice arises in the first type of case because the appellant should be acquitted. In the second type of case (which can only arise where the evidence sought to be adduced is fresh evidence) because “there is a likelihood that the accused would be acquitted on a re-trial based on the fresh evidence”.⁸Accordingly, in the case of proposed evidence that is new evidence (being such as was available or could with reasonable diligence have become available) which “reveals no more than a likelihood that the jury would have returned a verdict of not guilty”⁹ and thus “falls short of establishing that the accused should not have been convicted”, . There is no miscarriage of justice in an unimpeachable verdict of guilty being allowed to stand where the new evidence “leads to the conclusion that the jury could reasonably convict, though it appears to the appellate court that it would be unlikely to do so”, the failure to adduce that evidence lying with the accused.

The statement of principle expressed by Mullins J in HBR was that:¹²

“… an appellate court has [residual discretion] in an exceptional case to receive new or further evidence, where to refuse to do so would result in a miscarriage of justice, in the sense that it can be shown there was a significant possibility that a jury hearing the new evidence would have reached a different verdict …” (emphasis added)

As the respondent submitted, HBR is not consistent with the High Court authorities to which I have referred. It was also said to be inconsistent with a number of decisions of this Court.

The decisions of Katsidis; ex parte Attorney-General (Qld)¹³ and R v Spina¹⁴ were cited by Mullins J as support for her formulation of principle. The passage cited from Katsidis¹⁵ does not provide such support. In that case, Jerrard JA (with whom White J agreed), having comprehensively examined the principles in Ratten and Lawless, stated:¹⁶

“If a conclusion of guilt is still reasonably open, even accepting non-fresh evidence as true, a miscarriage of justice has not been shown.”

Nor does the passage cited from Spina¹⁷ provide support. In Spina, an application to adduce new evidence was refused. McMurdo P (with whom the other members of the Court agreed) emphasised the importance of the distinction between fresh and new evidence. Her Honour identified that where fresh evidence is sought to be relied on as the basis for allowing an appeal against conviction:¹⁸

“… the test is whether it is established that there is a significant possibility (or that it is likely) that, in light of all the admissible evidence, both the fresh evidence and the evidence at trial, a jury acting reasonably would have acquitted.”

Her Honour stated that appellate courts also retained “a residual discretion in exceptional cases to receive new or further evidence which is not fresh in the legal sense where to refuse to do so would result in a miscarriage of justice.”¹⁹ Her Honour did not expand on the test required to be met in such cases. However, her Honour cited the paragraph from Katsidis referred to above and her Honour’s reference to the residual discretion ought to be understood as a reference to the category of case where the proposed evidence is such as to show there has been a miscarriage of justice because the accused should be acquitted as the jury’s verdict is not reasonably open.

The passage from Katsidis,²⁰ was also cited by Fraser JA (with whom the other members of the Court agreed) in R v Davidson²¹ in stating:

“…it is not sufficient for the appellant to establish only a significant possibility that if the new evidence had been adduced at the trial the jury would have reached a different verdict; if a conclusion of guilt is reasonably open notwithstanding the new evidence, the failure to adduce the new evidence at the trial did not result in a miscarriage of justice.”

The formulation in HBR as to what is required to be demonstrated to show a miscarriage of justice where the proposed evidence is not fresh evidence is an erroneous statement of the residual jurisdiction to set aside a verdict irrespective of the type of further proposed evidence. The proper inquiry as to whether there was a miscarriage of justice in HBR (as is the case here) is whether the new evidence, when combined with the evidence at trial, shows the accused to be innocent or raises a reasonable doubt as to guilt. Given that the evidence sought to be adduced in HBR was new evidence, the error in that case was not detrimental to the appellant as the Court imposed the less onerous test as to whether there has been a miscarriage of justice, applicable only where the evidence sought to be adduced is fresh evidence.

Consideration

The question for consideration then is whether the proposed new evidence should be received on the basis that it demonstrates that the jury’s verdicts were not reasonably open when considered with the evidence at trial.

As the respondent submitted, and the appellant conceded, even if the proposed evidence as contained in Dr Mariani’s report was accepted without reservation, it did not compel a conclusion that the verdicts of the jury were not reasonably open. At its highest, the evidence suggested that it may have assisted the jury to hear some evidence of the nature of the appellant’s impairments and her level of cognitive functioning. However, Dr Mariani frankly acknowledged in her report the impossibility of retrospectively determining the appellant’s cognitive functioning at trial. In that respect, the proposed evidence could only have provided very little assistance to the jury. The ultimate conclusion expressed by Dr Mariani was that, in her opinion, it was:²²

“… not possible to retrospectively determine with any degree of accuracy whether the [transient ischemic attacks] have affected [the appellant’s] ability to effectively participate in the trial.”

Significantly, Dr Mariani also opined that, even if the appellant’s presentation when interviewed in April 2018 was consistent with her state at the trial, it was no more than a matter that “may have” affected her ability to attend to information and recall questions.²³ There is simply no sound basis for determining the extent to which the appellant was actually impaired as at the date of the hearing. Taking the proposed evidence of Dr Mariani at its highest, it does not show that the verdicts of the jury were not reasonably open.

Orders

The orders I would make are:The application for leave to adduce new evidence is refused.The appeal be dismissed.

DAUBNEY J: I agree with Philippides JA.

Footnotes

1. A report of a psychologist, Dr Palk, adduced on sentence, was also tendered. ↩

2. [2017] QCA 193 at [83]. ↩

3. (1974) 131 CLR 510. ↩

4. (1979) 142 CLR 659. ↩

5. Ratten v The Queen (1974) 131 CLR 510 at 518 (emphasis added); Lawless v The Queen (1979) 142 CLR 659 at 674-675. ↩

6. Lawless v The Queen (1979) 142 CLR 659 at 675 (emphasis added). ↩

7. Lawless v The Queen (1979) 142 CLR 659 at 675. ↩

8. Lawless v The Queen (1979) 142 CLR 659 at 675 (emphasis added). ↩

9. Lawless v The Queen (1979) 142 CLR 659 at 675 (emphasis added). ↩

10. Lawless v The Queen (1979) 142 CLR 659 at 676 (emphasis added). ↩

11. Lawless v The Queen (1979) 142 CLR 659 at 676. ↩

12. [2017] QCA 193 at [83]. ↩

13. [2005] QCA 229 at [12]-[19].