R (Cth) v Petroulias - [2006] NSWSC 788 - NSWSC 2006 case summary — Zoe

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R (Cth) v Petroulias

[2006] NSWSC 788

Supreme Court of NSW|2006-07-20|Before: Johnson J

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Source facts

Court

Supreme Court of NSW

Decision date

2006-07-20

Before

Johnson J

Source

Original judgment source is linked above.

Judgment (237 paragraphs)

[1]

The application of these principles to a criminal proceeding poses further difficulties. First, there are no pleadings properly so called. This means that the practice of determining the prospect of success of the prosecution with little or no reference to the available evidence cannot be adopted. Secondly, it cannot be ignored that the Crown in a criminal trial does not stand in exactly the same position as a plaintiff in civil litigation. The wisdom of a decision to prosecute or to prosecute for a specific offence is not, properly speaking, a matter for the court: Barton v R (1980) 147 CLR 75. Furthermore, the decision to prosecute will normally have been made only after a preliminary determination of a magistrate following a committal and a re-assessment of the evidence by an experienced prosecutor upon whom lies special responsibility to ensure that proceedings are instituted only where there is a case apparent on the material. The court traditionally respects the judgment of the Crown in the conduct of the prosecution: R v Apostilides (1984) 154 CLR 563. This is, of course, not to say that the court should abdicate its responsibility to the prosecutor, but rather that regard should be had to these factors in determining the fate of a stay of application.

[2]

In my view, in a case such as the present, the power to order a permanent stay of a criminal proceeding before the court should be limited to the case where it is plain beyond argument that the prosecution case suffers from some incurable vice.

[4]

The tests are very similar but, in my opinion, the very considerable emphasis given in the decided cases to the exceptional care which must be given to any such application, and the expected rarity of the success of such an application, suggests a test more onerous than that which would apply to a no case submission. Having had the advantage of reading the judgment of Brooking J, I am content to adopt the formulation of the test as proposed by his Honour, namely, that it must be clear beyond argument that the Crown is unable to make out a case to answer, having regard to the evidence available to it. A test stated in such stringent terms would be consistent with the often stated acknowledgment that the courts are not to interfere with the discretion residing in prosecuting authorities to determine which trials are to be prosecuted in the courts: Connelly v Director of Public Prosecutions [1964] AC 1254 at 1304; Jago at 39 per Brennan J; cf Mason CJ at 28. The rarity of the success of such an application as that presently under consideration may be gauged by the fact that counsel were unable to cite a single instance of such an application succeeding on grounds such as those argued here." 78 Accordingly, on this ground, the Accused seeks the most exceptional type of an already exceptional remedy. If the application succeeds, the operation of the criminal justice system will not proceed further with respect to the first count. There will be no trial on that count at which I may be called upon, as the trial judge, to determine whether the Accused has a case to answer applying the principles in Doney v The Queen. Assuming that there was such a case, there will be no opportunity for a jury, as representatives of the community, to hear the evidence and return a verdict according to law on that count. 79 In Doney v The Queen, the High Court emphasised the importance of the traditional jury function in a criminal trial. The Court made express reference at 215 to the important role of the jury when a trial judge is asked to exercise the power to stay proceedings as an abuse of process at the expense of the traditional jury function: "It is necessary only to observe that neither the power of a court of criminal appeal to set aside a verdict that is unsafe or unsatisfactory (as to which see Whitehorn , Chamberlain v. The Queen (No.2) (1984) 153 CLR 521 and Morris v. The Queen (1987) 163 CLR 454) nor the inherent power of a court to prevent an abuse of process (as to which see Jago v. District Court (N.S.W.) (1989) 168 CLR 23) provides any basis for enlarging the powers of a trial judge at the expense of the traditional jury function. The power of a court of criminal appeal to set aside a verdict on the ground that it is unsafe or unsatisfactory, like other appellate powers, is supervisory in nature. Its application to the fact-finding function of a jury does not involve an interference with the traditional division of functions between judge and jury in a criminal trial. Nor does the existence in a trial judge or a court of powers to stay process or delay proceedings where the circumstances are such that the trial would be an abuse of process." 80 It is submitted for the Accused that this case is more susceptible to a foredoomed to fail argument because the Crown adduced all its evidence at the first trial and has indicated that the same evidence will be adduced, and be relied upon, at a retrial. There is no foreseeable area in which the Crown anticipates adducing additional evidence at a further trial (PT376, 2006). 81 In these circumstances, which the Accused submits are exceptional in themselves, it is said to be appropriate to examine the case against the Accused on the first count by application of the foredoomed to fail test. The Accused submits that this process is facilitated further by the decisions of the Court of Appeal in 2003 and the Court of Criminal Appeal in 2005 which identified relevant principles in the context of this very case. Following the delivery of those judgments, the Crown has adduced the evidence at the first trial upon which it will seek to rely once again at a retrial in support of the first count. The Accused submits that the difficulties of predicting evidence to be called at a future trial, referred to in cases such as Smith and Tolmie, do not arise in this case. 82 As will be seen, the Accused contends that the first count is foredoomed to fail by reference to three elements - unlawful means, causation and deprivation. It was the issue of deprivation which attracted judicial attention in the Court of Appeal in 2003 and the Court of Criminal Appeal in 2005. It is that issue which became the focal point of the present application. 83 In my view, the approach articulated by Brooking, Byrne and Eames JJ in R v Smith informs the process to be undertaken in determining the foredoomed to fail ground in this case. The approach of Hunt CJ at CL in Tolmie is consistent with this approach. It is for the Accused to demonstrate clearly that the first count is doomed to failure. A likelihood that the prosecution will fail is not enough. It is for the Accused to establish that it is manifestly clear that the evidence is incapable of supporting at least one essential element of the offence contained in the first count. I will approach the resolution of this ground with this test in mind. 84 If the Accused succeeded in establishing the foredoomed to fail ground with respect to the first count, he would be entitled to a permanent stay of that count. Even if the Accused cannot discharge the heavy onus in that respect, Mr Clelland SC contends that the strength, or lack of strength, of the Crown case on the first count may be called in aid in support of the permanent stay application on the alternative basis contained in the broad abuse of process ground. The Accused submits that this is but one factor which may be taken into account with a range of other factors to demonstrate that the further prosecution of the first count constitutes an abuse of process. 85 At this point, it is as well to emphasise the functions which I am presently exercising. Consideration of the arguments advanced by the Accused concerning the first count will involve a detailed examination of parts of the judgments of the Court of Appeal and the Court of Criminal Appeal, the evidence adduced at trial before Sully J and several judgments of his Honour during the trial together with aspects of the summing up to the jury. I am not making rulings on admissibility of evidence for the purpose of the retrial. Nor am I determining whether the Accused has a case to answer for the purpose of the retrial. Rather, I am considering evidence relied upon and submissions advanced in support of the foredoomed to fail ground and the broad abuse of process argument.

[20]

The First Count - Section 29D Crimes Act 1914 (Cth) 92 The Crown's written submissions (MFI2, paragraph 1.2) observe that it is difficult to identify any other prosecution in which the formulation of the indictment has received the level of judicial scrutiny, particularly at the appellate level, as has occurred with the first count on the present indictment. I agree with this observation. 93 Of course, Mr Clelland SC submits that the Crown has brought much of this upon itself. The wording of the first count has changed on more than one occasion. It was the Crown which appealed to the Court of Appeal from the decision of Simpson J relating to the committal proceedings and to the Court of Criminal Appeal from the decision of Sully J staying the first count. Mr Clelland SC contends that the body of jurisprudence which has emerged surrounding the first count in the indictment has arisen largely from the Crown's changing positions. 94 It was submitted for the Crown before me that much of what has occurred since the committal proceedings has involved the Crown responding to points taken by the Accused. I bear in mind, however, that a criminal trial is conducted as adversarial litigation (Whitehorn v The Queen (1983) 152 CLR 657 at 682; Nudd v The Queen (2006) 80 ALJR 614 at 618 [9]) and that an accusatorial process is involved in which the prosecution bears the onus of proving the guilt of the Accused beyond reasonable doubt and in which the prosecution must put its case fully and fairly before the Accused is called on (The Queen v Carroll at 643 [21]; R v Ronen (2004) 62 NSWLR 707 at 722-3 [63]; Weiss v The Queen (2005) 80 ALJR 444 at 455 [43]). 95 At any trial, it will be for the Crown to establish the element of deprivation for the offence under s.29D contained in the first count. It has always been a matter for the Crown to formulate that count and to adduce evidence in support of that element. It is, of course, for the Crown to undertake that burden whatever stance is adopted by the Accused.

[29]

The 2003 Court of Appeal Judgments 103 The Prosecutor appealed to the Court of Appeal against the decision of Simpson J in which error was found on the part of the Magistrate with respect to the s.29D count. The Court of Appeal (Spigelman CJ, Handley and Santow JJA agreeing) allowed the appeal from Simpson J on 3 October 2003 (Wills v Petroulias (2003) 58 NSWLR 598) although, following an application made by the Accused, the Court varied aspects of its judgment delivered on that day in a subsequent judgment delivered on 22 December 2003 (Wills v Petroulias (No. 2) (2003) 58 NSWLR 618). It is necessary to keep in mind that the s.29D count was in a different form to that contained in the present indictment when the matter was before the Court of Appeal in 2003. 104 After outlining the nature of the Crown case against the Accused on the s.29D count, Spigelman CJ observed at 601 [8]: "There were a number of indicators of dishonesty, which is an essential element of an offence against s29D. The element of dishonesty was not in issue before Simpson J or in this Court. These proceedings did not focus on the mental element of an offence against s29D of the Crimes Act. The focus of these proceedings is the element of 'loss' or 'disadvantage' in the offence of 'defrauding the Commonwealth'. I will refer to this as the element of deprivation. It is not enough to establish a fraud. Someone must have been defrauded." 105 The Chief Justice said at 611 [54]: "The proposition that a charge of defrauding can be made out by putting the property or rights of a person at risk or imperilling them or prejudicing them in some way is well established. (See, for example, The Queen v Kastratovic (1986) 42 SASR 59 at 62; Peters v The Queen at [30], [73]-[74], [84] and [138]; Spies v The Queen at [79]-[81]; MacLeod v The Queen (2003) 77 ALJR 1047 at [35]. See also R v Scott [1975] AC 819 at 839; Wai Yu-tsang at 280)." 106 At 614 [72]-[74], Spigelman CJ said: "It is, in my opinion, sufficient for purposes of the element of deprivation, to establish that a lawful right, interest or opportunity which had not previously been resolved one way or another has been resolved, so that its very resolution constitutes the relevant detriment. That will be sufficient so long as there is a bona fide claim which, if correct, would be of value.

[42]

The 2005 Court of Criminal Appeal Judgment 114 The Crown appealed against the permanent stay order under s.5F Criminal Appeal Act 1912. The Court of Criminal Appeal allowed the appeal and set aside the permanent stay: R v Petroulias (2005) 62 NSWLR 663. The Court was unanimously of the view that the appeal should be allowed, but separate judgments were delivered by Spigelman CJ and Hunt AJA on the one hand, and Mason P on the other hand. As will be seen, at the trial which followed before Sully J, consideration was given, from time to time, to the proper construction of statements made by the Court of Criminal Appeal in these judgments. Similar arguments have been advanced before me. It is appropriate to set out portions of these judgments to which particular attention has been given in submissions. 115 Spigelman CJ and Hunt AJA at 665 [1] agreed with Mason P, for the reasons given by the President, that the decision of Sully J to grant a permanent stay should be set aside. However, their Honours stated that the view which they had formed as to how the trial should be conducted in relation to the s.29D count differed sufficiently from that proposed by Mason P that it was necessary to set out their own reasons as to the nature of the issue posed and how it should be put to the jury. 116 Their Honours observed at 665-666 [4]-[5] that the Crown put its case in terms of the second (risk of loss of revenue) of the three categories of fraud identified in Peters v The Queen (1998) 192 CLR 493 at 508. To fall within the second category, there must be the possibility that the Commissioner of Taxation, were he not bound by the rulings made, would win a case by demonstrating the rulings were wrong. In order to support the first count, the Crown must establish that the private rulings were arguably wrong (666 [6]). Spigelman CJ and Hunt AJA stated at 666 [8]: "There was some discussion in Wills v Petroulias as to what had to be established in a case alleging that the private rulings procured by the accused constituted an actual risk that the revenue of the Commonwealth was imperilled, but only tentative views were expressed. We agree with Mason P that the time has come for this Court to express a concluded view. If this Court adopts the need to prove that the private rulings were arguably wrong (or any variation of that formulation), a second issue must then be determined - whether that issue is one of law for the judge to decide or whether it is one of fact (or mixed law and fact) for the jury to determine." 117 Spigelman CJ and Hunt AJA observed that a number of statements made in the earlier Court of Appeal judgments must be understood in the context of the s.29D count as it was then framed. Their Honours continued at 667 [11]: "In our opinion, the issue which arises in a second category (actual risk of loss of revenue) case would be expressed more clearly if it were made clear on its face just why the issue arises and if it were couched in a positive rather than a possibly negative way. In this way, the difficulties which Sully J saw in the 'arguably wrong' formulation would largely disappear. In our view, to say that the private rulings are arguably wrong is really saying no more than that the Commissioner of Taxation has an arguable case to put that the rulings were wrong and, accordingly, that the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. There is no difference in substance in stating the issue in this way. But stating the issue in this way leads immediately to a consideration of the approach to be taken in determining the issue, be it by the judge or the jury." 118 Their Honours then continued at 667-669 [12]-[20]: "One issue of law for the judge

[54]

29 Mason P has outlined the evidence relied upon by the Crown to establish the proposition that the 'arguably wrong' test could be satisfied. It is unnecessary to repeat the material here. It is sufficient to say that, for the purposes of an application for a permanent stay, the material referred to is sufficient to give rise to a real issue as to whether or not the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. We do not, however, intend by these remarks to suggest that the trial judge - particularly in the light of such evidence to the contrary on which the accused may wish to rely in this regard - would not be entitled to form his own judgment on the issue of law we have identified in pars 12 and 17, supra, namely whether or not the case to be put by the Commissioner is sufficiently arguable to demonstrate the possibility that the Commissioner would win a case in which he was allowed to dispute the private ruling." 121 Mason P observed at 673 [35] that the s.29D count had undergone several transformations, both as to its form and the case sought to be proved under it. 122 Mason P touched upon the decision in Essenbourne at 679 [62]: "I discuss Essenbourne below. But it should be stated at the outset that (the reasons for) a Federal Court decision are not themselves evidence. Nothing to the contrary was stated in Petroulias (No 1) or (No 2) , which went no further than pointing to that decision as a well from which to draw ideas that might become the basis of admissible evidence." 123 Mason P then turned at 680 [66]-[67] to certain particulars contained within the Crown Case Statement and then, at 680-682 [68], summarised the evidence which was said to support certain particulars. Given the submissions advanced before me, it is appropriate to set out this part of Mason P's judgment at 680 [68]: "The evidence said to support sub-particulars H(i) and H(v) was placed before Sully J and we were taken to it. It discloses the following (in summary):

[89]

The Trial Proceeds 134 Against this background of extensive appellate consideration of the way in which the Crown may seek to establish the element of deprivation in the first count, the trial proceeded before Sully J and a jury. In broad terms, the Crown relied principally upon documents summarised in the judgment of Mason P in the Court of Criminal Appeal. No expert evidence was adduced by the Crown in the manner identified, as a possible approach, in the judgments of the Court of Criminal Appeal. A number of senior ATO officers with considerable experience in the field were called as Crown witnesses for various purposes. The Crown did not seek to adduce expert evidence from any of these witnesses on the arguable case issue. 135 A number of the ATO officers called by the Crown were cross-examined on behalf of the Accused with respect to issues which may bear upon the deprivation element. For example, Mr Lowman Chow, the author of several memoranda written in 1998, was cross-examined with the view to demonstrating that he had limited knowledge in the field and that he relied upon a number of sources in preparing his papers which he appears to have misunderstood and misquoted. This cross-examination, to which I was taken during submissions on the present application, was said by the Accused to undermine, if not destroy, any objective foundation for a suggested arguable case which the Commissioner of Taxation may have had. 136 Mr Clelland SC submitted, in summary, before me that the jury was not informed of the objective state of the law and that, accordingly, they were not in a position to assess the strength or otherwise of the arguable case which the Crown submitted existed in this case and of which it had been deprived. According to the defence submission, all the jury was left with was a series of ATO documents (some of which were written by the Accused) containing arguments which could not be assessed in any meaningful way by the jury. 137 I was informed that there was no mention in the presence of the jury of the line of authority commencing with Essenbourne in the Federal Court of Australia. The relevance or otherwise of Essenbourne was touched upon during submissions made in the absence of the jury. At one point, Mr Clelland SC foreshadowed an intention to cross-examine Mr Chow by reference to the decision in Essenbourne, but the topic was placed to one side (T577). The Crown closed its case without any reference to Essenbourne or any agreement as to the way in which any statements or principles emerging from Essenbourne might be placed before the jury.

[136]

It is not controversial in this trial that at all material times: (a) a private binding ruling was recognised formally by certain provisions of the Income Tax Assessment Act of the Commonwealth. That formal recognition entailed that a tax payer to whom a ruling had been given by the Commissioner of Taxation could arrange aspects of his financial affairs so that they fell four-square within the terms of the rulings. In such a case the Commissioner of Taxation had to assess the tax payer's liability to taxation in conformity with the ruling. If the Commissioner tried to assess the tax payer's liability as though the ruling did not exist, and so tried to assess at a sum greater than would be payable according to the ruling, then the tax payer could resist the Commissioner's assessment, claiming the protection of the ruling. In that event the Commissioner would have to assess the tax payer's liability at an amount less than would have been proper had there been no ruling. (b) A private binding ruling although issued to the particular applicant for the ruling, and in connection with a particular financial arrangement put forward by that applicant, would be regarded by the Commissioner, in the interests of fairness and consistency, as applying also to any other substantially similar financial arrangement entered into by a tax payer other than the particular applicant for the ruling. (c) An Advance Opinion is not regarded by the Commissioner as binding him in the same way as a PBR. The Commissioner will normally regard himself bound as between himself and the particular taxpayer to whom the AO has been given. The Commissioner will not regard himself as bound as between himself and any other taxpayer. Even in the case of the particular taxpayer to whom the AO has been given, the Commissioner will regard himself as being free to depart from his AO in certain circumstances which are set out in relevant notifications issued from time to time by the Commissioner. Ex.C1 is an example of such a notification. (d) Neither an advance opinion nor a private binding ruling, but particularly a private binding ruling, makes the law. That is the prerogative of Parliament and not of the Commissioner of Taxation. (e) Neither an advance opinion nor a private binding ruling, but particularly a private binding ruling, establishes what the relevant law actually is. The resolution in a particular case of a dispute about what the law actually is, is the prerogative of the Courts, and not of the Commissioner of Taxation. (f) What is done by the issue of an advance opinion or a private binding ruling, but particularly a private binding ruling, is to record a view of the Commissioner as to the way in which, in his opinion, the current state of taxation law requires him to assess to taxation the particular proposal that a particular tax payer has submitted as the subject matter of a requested advance opinion or private binding ruling. (g) If the Commissioner so records an opinion or a ruling that is, as it happens, plainly correct as a matter of law; and would be so characterised by a Court in the event of any dispute about the opinion or ruling; then the issue of the opinion or the ruling, even if obtained by dishonest means, does not cause the Commonwealth a loss of revenue, because the Commonwealth's entitlement to tax the particular tax payer was the same with the correct opinion or ruling as it would have been without the correct ruling or opinion. (h) If, to take the polar opposite view, the Commissioner states on the public record an opinion or a ruling that is, as it happens, plainly incorrect as a matter of law; and would be so characterised by a Court in the event of any dispute about the opinion or ruling; then the issue of the opinion or ruling, whether obtained honestly or dishonestly, has caused a risk of loss to the Commonwealth revenue. What is more, the risk of loss is a real risk; because the relevant and incorrect opinion, or the relevant and incorrect ruling, compels the Commissioner to assess the protected tax payer's liability to tax at a figure which is lower, because of the binding effect of the ruling or opinion, than it should be, and than it would be were it not for the binding effect of the opinion or the ruling. (i) In the present trial the facts and circumstances upon which the Crown relies do not raise a case falling within either of (g) or (h) above. The present trial concerns private binding rulings and advance opinions of which the Crown argues that they are neither plainly correct in law - as in (g); nor plainly incorrect in law - as in (h). The Crown argues for an intermediate position .

[179]

Question 4: Could we have a brief outline of Part IVA? Question 5: If the rulings are correct, does that mean the Commissioner did not suffer any deprivation? Question 6: If the Commissioner did not suffer deprivation does that mean acquittal on count 1?" 153 Submissions were made to Sully J concerning the manner in which these questions should be answered (TA59ff). Before me, Mr Clelland SC placed particular emphasis upon Questions 5 and 6. He submitted that correct answers to these questions would have provided the Accused with a substantial prospect of acquittal on the first count. In responding to the questions generally, Sully J provided the jury with an explanation of Part IVA (TA65ff) and distinguished between tax avoidance schemes and Private Binding Rulings (TA69). His Honour took the jury back to the written directions provided with respect to the element of deprivation in the first count (MFI105, Document 5) (TA69.5). Thereafter, Sully J returned to the questions posed by the jury (TA74.2): "Now let me take you back against that background to your first second and fifth questions and say that those questions in the form in which you have asked them seem to me, with respect, to be misconceived because they seem to me to proceed upon the basis that it is part of your task to consider whether the rulings ought to be held to be correct at law. But that is not the question for you. The question for you is: Does the Commissioner have an arguable case that the rulings are wrong; he being unable to test that case in Court because of the effect of the rulings? Ladies and gentlemen, is that much clear? JURY NODDED THEIR ASSENT Think about that and if there are other supplementary things that you need to ask in order to clarify anything that is not entirely clear, of course you are free to do it and I urge you to do it, but I think that is the best that I can do for you in relation to those particular matters. It remains for me only to thank you once again for your hard work during the day and to excuse you until 11 o'clock tomorrow morning. CLELLAND: I think there is a final question that the jury asked that I don't think your Honour has responded to. HIS HONOUR: I thought in fact that I had responded to it in terms. May I read again the last two paragraphs of the supplementary sheet of directions: 'If you are satisfied beyond reasonable doubt that the fair and reasonable answer to that question is: Yes, then the Crown has established the essential element of deprivation. If you are not so satisfied, then the Crown has not established that essential element, and you should thereupon acquit on count 1.' Is that all clear? JURY NODDED THEIR ASSENT" 154 In the absence of the jury, Mr Clelland SC sought further directions in response to Questions 5 and 6 which Sully J declined to give (TA75.6): "CLELLAND: Your Honour, in our submission the jury are entitled to have the question answered - that is the fifth question answered in this way: If they have reached a level of satisfaction on the evidence that the rulings are correct then they are entitled to be told that that means on the Crown case and as a matter of law that the Commissioner did not suffer any deprivation; that such a finding on facts would well and truly cover the issue of whether the rulings were arguably wrong. If their level of satisfaction is that they are correct then the accused is entitled to have a direction to the jury that they should find as a result of that that the Commissioner did not suffer any deprivation. I am asking your Honour to redirect them in those terms. HIS HONOUR: I gather that. Yes, I refuse that application. I refuse it because I consider that the directions both written and oral that have been given to the jury correctly crystallised the questions that they do have to decide and in particular they crystallise, so far as one can do it, the vexed and difficult question of what it is that they have to analyse and decide on the topic of 'an arguable case'. The application is of course recorded for any necessary future reference, but I refuse it." 155 On 16 August 2005, the jury sent a note to the following effect (TA103): "Your Honour we cannot reach a verdict. We have tried and tried and again but we have failed. We have reconsidered and reviewed the evidence with both views becoming myopic. We understand the time, expense and human emotion that has been expended on this case and every juror has done their best in a very complex scenario. We have genuinely tried to reach a unanimous verdict but we cannot. I am sorry." 156 Thereafter, Sully J took evidence form the foreperson in accordance with s.56 Jury Act 1977 (TA104-105). The jury was discharged without verdict (TA105).

[180]

Is the First Count Foredoomed to Fail on the Element of Deprivation ? 157 In the course of submissions, both written and oral, I was taken to a range of exhibits and parts of the transcript of evidence of witnesses in support of the defence argument that the first count was foredoomed to fail with respect to the element of deprivation. 158 In broad terms, the submissions made to Sully J in support of the application for a directed verdict of acquittal which was refused on 19 July 2005 were repeated and amplified before me. It was submitted that Sully J erred in not upholding that submission. It was submitted that, properly understood, the judgment of the majority in the Court of Criminal Appeal at 670-671 [27]-[28] required objective evidence of the law, preferably coupled with expert evidence, to support the Crown case on the element of deprivation. It was submitted that the Crown had not adduced evidence, or placed information before the jury in any permissible way, which would leave it open to the jury to be satisfied that this element of the first count had been made out. It was submitted that Spigelman CJ and Hunt AJA at 670-671 [27] had determined that such evidence as may constitute out-of-court admissions of the Accused was incapable of establishing this element of the crime. 159 Mr Clelland SC submitted that the evidence of Mr Chow, properly understood, could not support this element of the first count. The evidence contained in other documents, including draft rulings and emails from the Accused to Mr Ackhurst and Mr Strong, were incapable of supporting the Crown case on this element. The Accused submitted that the Crown case as presented fell short, in various respects, of that summarised by Mason P in R v Petroulias at 680-682 [68]. 160 In these circumstances, Mr Clelland SC submitted that the Crown case with respect to the element of deprivation was hopeless and was foredoomed to fail. He contended that the element of deprivation relied upon by the Crown had become so refined as to be a "detriment of quite [a] nebulous kind" involving a hypothetical opportunity to run a hypothetical case (PT299.40, 2006). He noted that the Crown had acknowledged that it was proposed to rely upon the same evidence at the retrial and that the Crown was not indicating any intention to supplement the evidence already adduced at the first trial. In these circumstances, Mr Clelland SC submitted that the note of caution often sounded when it is submitted that a criminal prosecution is foredoomed to fail (for example, Tolmie) does not apply in this case. It was submitted that I am in a position, at the present time, to assess the Crown case at its highest and that the present application should be measured by reference to the body of evidence already adduced by the Crown at the first trial. 161 The Crown submits that the approach adopted by it at the first trial to the evidence to be adduced in support of the element of deprivation was consistent, and certainly not inconsistent, with the judgment of the Court of Criminal Appeal. That judgment, it was submitted, did not purport to mandate or prescribe the categories of evidence which the Crown could rely upon to establish the element of deprivation. It was acknowledged in both the joint judgment at 671 [28] and the judgment of Mason P at 690 [115] that the Crown had not relied upon expert evidence at the committal proceedings and had not indicated an intention to do so at the trial. If the Court of Criminal Appeal had intended that expert evidence was a mandatory part of the Crown case on this issue, then the Court would have said so. Furthermore, the Crown submits, if expert evidence was essential, the Court of Criminal Appeal would have dismissed the appeal given the absence of an indication from the Crown of an intention to adduce such evidence. 162 The Crown submitted that the judgment of the majority in the Court of Criminal Appeal at 668 [16]-[17] was significant in identifying matters which the trial judge was not required to explain to the jury. It was submitted that the statements of the majority at 671 [29] formed another critical part of the judgment. There, the majority noted, without the need for repetition, the evidence relied upon by the Crown to establish the proposition that the "arguably wrong" test could be satisfied. According to Spigelman CJ and Hunt AJA at 671 [29], it was sufficient to say that, for the purposes of an application for a permanent stay, the material referred to by Mason P was sufficient to give rise to a real issue as to whether or not the risk to the revenue was such that the Commonwealth was in fact deprived of something of value. By this statement, the Crown submitted that the majority endorsed the outline of evidence contained in the judgment of Mason P at 680-682 [68] as being sufficient to give rise to a real issue on this element. 163 The Crown submitted that it had adduced evidence at the first trial in accordance with the summary set out by Mason P at 680-682 [68]. The Crown submitted that the arguments of the Accused criticising features of the evidence of Mr Chow, Mr Ackhurst and others and advancing arguments arising from the cross-examination of Crown witnesses (including Mr Forsyth) represented nothing more than jury arguments on the facts. The Crown submitted that those arguments were advanced to the jury at the first trial. The jury could not agree upon a verdict on the first count. Whatever may be made of these defence arguments, the Crown submitted that they were far removed from demonstrating that the first count was foredoomed to fail by reference to the element of deprivation so as to constitute an abuse of process warranting a permanent stay. 164 The Crown submitted that the evidence of out-of-court admissions of the Accused as contained, inter alia, in his emails to Mr Ackhurst and Mr Strong were relevant and admissible in support of the element of deprivation on the first count. To the extent that the Accused relied upon the statement in the majority judgment of the Court of Criminal Appeal at 670-671 [27] to the effect that "that objective fact [the state of the law] has nothing to do with any state of mind on the part of the accused which may be relevant to his mens rea", the Crown submits that an admission by the Accused with respect to a question of law is admissible, especially given his substantial legal and technical expertise with respect to tax matters. The Crown submits that the evidence is admissible to prove the objective fact as to the state of the law as part of the arguable case test: Lustre Hosiery Ltd v York (1935) 54 CLR 134 at 138-139; Anglim and Cooke v Thomas (1974) VR 363 at 370-372; Director of Public Prosecutions v Parsons (1993) 1 VR 1 at 5; s.81(1) Evidence Act 1995. 165 In determining this ground, I must keep clearly in mind the test to be made out by the Accused. It is, in truth, an exceptional ground in support of an already exceptional remedy. 166 From time to time, some arguments advanced for the Accused in support of this ground had the flavour of submissions made to the Court of Criminal Appeal following a verdict. Of course, I am not exercising an appellate function of determining whether a type of notional verdict of guilty arising from the evidence relied upon by the Crown in support of the first count would render such a notional verdict unreasonable or such that the verdict of a jury could not be supported having regard to the evidence: s.6(1) Criminal Appeal Act 1912; M v The Queen (1994) 181 CLR 487 at 492-495; MFA v The Queen (2002) 213 CLR 606 at 614-615, 623-624. Nor am I exercising the function of a trial judge to whom an application is made for a directed verdict of acquittal in accordance with the principles in Doney v The Queen. 167 The application requires the Accused to satisfy the stringent test identified in Walton v Gardiner, R v Smith, R v Tolmie and R v Jasper and it requires that test to be satisfied before the trial has commenced. It is true that there is available the evidence called by the Crown at the first trial. It is also true that the Crown has indicated that it does not propose to supplement this evidence in any relevant way. That, however, does not make easier the task confronting the Accused in seeking to demonstrate that this exceptional relief ought be granted. 168 I have had regard to the exhibits and transcript to which I was taken during detailed argument by both Mr Clelland SC and the Crown. I have given consideration to the judgment of the Court of Criminal Appeal (against the background of the judgments of the Court of Appeal) and the application of that judgment by Sully J in the context of the trial. I have had regard to the judgments of Sully J delivered on 27 June 2005 and 19 July 2005 rejecting applications for a directed verdict of acquittal with respect to the first count. The latter judgment, in particular, is of importance to the arguments concerning the element of deprivation. 169 I have made an independent assessment of the matters of fact and law touched upon in submissions. I have found the judgments of Sully J, and in particular the judgment of 19 July 2005, persuasive in their reasoning. I have reached the same conclusion as those expressed by Sully J on these issues. 170 I agree with Sully J that the majority judgment of the Court of Criminal Appeal did not hold that evidence of admissions of the Accused was incapable of establishing the deprivation element. The cases relied upon by the Crown support the admissibility of the Accused's admissions, including his opinions concerning issues which were familiar to him and as to which he possessed relevant expertise. Out-of-court admissions of issues of law or mixed fact and law have been held to be admissible: Pitcher v Langford (1991) 23 NSWLR 142 at 147A-B, 160B-E. I stress that I a not, at this point, ruling on the admissibility of this evidence for the purpose of the retrial. I am addressing a defence argument that the first count is foredoomed to fail so that the proceedings should not continue to allow arguments to be advanced in support of the tender of the admissions.

[181]

171 I agree with Sully J's observation that the evidence adduced by the Crown accorded in substance with that referred to by Mason P at 680-682 [68] and accepted by the majority at 671 [29] as being sufficient to warrant refusal of the permanent stay application then made by the Accused. I accept the Crown submission that the judgments of the Court of Criminal Appeal did not require the Crown to adduce expert evidence to establish this element. I am satisfied that the approach taken by Sully J at the first trial accorded with the decision of the Court of Criminal Appeal. In my view, the evidence adduced at the first trial supports a prima facie case with respect to this element. I am satisfied that the first count is not foredoomed to fail by reference to the evidence adduced at the first trial in support of the legal element of deprivation. 172 I am not satisfied that Sully J erred in the approach taken at the first trial with respect to the line of authority commencing with Essenbourne. As the majority in the Court of Criminal Appeal stated at 667 [13]: " [I] t is not the function of the relevant tribunal to determine whether either the Commissioner's argument or the taxpayer's argument is correct or even which is more plausible or the more apparently reasonable arguable." 173 The issue for the jury was not whether the argument of the Commissioner was correct nor whether the ruling was correct. For the same reason, I do not consider that any error was involved in Sully J's answer to Questions 5 and 6 from the jury on 9 August 2005. Accordingly, I am not satisfied that the Accused lost a substantial prospect of acquittal by reason of the approach taken by Sully J to those questions. Although that issue is not relevant to the resolution of the present ground, it does relate to the second way in which this issue is raised in support of the broad abuse of process ground, to which I will turn later in this judgment. 174 I refuse the application for a permanent stay based on this ground.

[184]

1.4 You must keep steadily and clearly in mind that in deciding whether the Crown has proved beyond reasonable doubt this element of causation, you are not answering a question either of philosophy or of science. You are using your common sense in order to reason to a practical conclusion about a practical question, always bearing carefully in mind that the purpose of what you are doing is to decide an essential aspect of the alleged responsibility of the accused for a serious criminal offence." 178 It was submitted for the Accused that this direction was erroneous in that a direction was not given in terms of Royall v The Queen (1991) 172 CLR 378 at 411 that the actions of the Accused must amount to "a substantial or significant cause" of the issue of favourable rulings and opinions. The Accused submitted, further, that directions should have been given with respect to the concept of innocent agency in accordance with R v Franklin (2001) 3 VR 9 and Pinkstone v The Queen (2004) 219 CLR 444 given that the rulings and opinions were not issued by the Accused himself, but by other ATO officers. 179 The Crown submitted that the directions on causation were correct in law. In any event, the Crown submitted that there was ample evidence to support the element of causation so that the present application by the Accused ought be rejected. Any argument concerning appropriate directions of law with respect to this element would be a matter for submissions, and an appropriate determination by me as the trial judge, during the course of the trial. 180 For the purpose of the Accused's foredoomed to fail argument by reference to the element of causation, it is appropriate to confine attention to the question of evidence capable of supporting that element. The Accused seeks to rely upon the suggested misdirection to the jury in support of the broad abuse of process ground to be considered later in this judgment. The Accused submits that there was a loss of a substantial prospect of acquittal at the first trial flowing from this alleged misdirection. 181 The first count alleges that the Accused defrauded the Commonwealth by putting the revenue of the Commonwealth at risk by causing Private Binding Rulings and Advance Opinions to issue to taxpayers by dishonest means. The rulings and opinions in question were issued by a number of ATO officers, namely, Michael Charles, Lowman Chow, James Targett and Emmanuel Aivaliotes. It was, in fact, Mr Aivaliotes who issued the relevant Private Binding Rulings. 182 The submission of the Accused before me focused entirely upon the evidence of Messrs Charles, Chow, Targett and Aivaliotes. It was noted that the Crown did not contend that any of these persons were involved criminally as accomplices of the Accused. It was submitted that each of these officers had given evidence at the first trial to the effect that the rulings and opinions which they issued were issued because they believed them to be correct as a matter of law and that they were in accordance with the ATO position or view on those matters. 183 Mr Clelland SC referred to the Crown closing address in which Mr Aivaliotes was said to have acted as a "puppet" of the Accused in issuing the relevant rulings. It was submitted for the Accused that the evidence of Mr Aivaliotes was entirely inconsistent with him having acted as a "puppet". Rather, it was submitted that he had legal qualifications and had conducted his own research with respect to the applications for rulings. He voluntarily issued the rulings because he believed that they were correct and in accordance with the ATO view. It was submitted for the Accused that the chain of causation was broken by the voluntary actions of Mr Aivaliotes. This was not a case where an innocent agent had been used to, for example, bank a forged or stolen cheque on behalf of the Accused. According to the Accused, Mr Aivaliotes was a properly authorised ATO officer dealing with a proper application for a ruling and he delivered a proper response to it based on ATO precedent. It was submitted for the Accused that Sully J should not have permitted the case to go to the jury, on the issue of causation as no reasonable jury properly instructed according to law, could conclude that the Crown had made out its case on causation. 184 The written submissions of the Accused before me (MFI1, pages 39-40, paragraph 120) set out the direction which the defence sought at the trial, but which his Honour declined to give. It was submitted before me that the acts of the Accused did not bring about the issue of the rulings and opinions - it was the intervening acts of the officers who had issued the relevant rulings and opinions. 185 The Crown approached this issue at trial, and before me, upon the basis that there was evidence in the Crown case which touched the element of causation extending beyond the bounds of that given by the four ATO officers. The Crown submitted that light was shed on the activities of the Accused, and his motivation for those activities, by statements made by him in the course of a recorded interview with Federal Agents on 24 March 2000. In the course of that conversation, the following was said ("DW" is Federal Agent David Wildman and "NP" is the Accused) (Exhibit C199, pages 8-9): "DW: Do you have a relationship with PIC? Either PICs? NP: What do you mean, how many? Oh Hong Kong it is..OK DW: The other one? NP: Yes I do know the one, yes I know the one. You interviewed my exwife Regina? DW: She was spoken to this morning. NP: I helped her doing her HR, she was doing her masters degree so I helped her write her masters degree as a result I learnt a lot about HR and my philosophy is this is going to be a growing area, a growing market DW: Right NP: If you defer money into a trust you get a tax deduction that you don't have to pay for much later DW: Yep OK NP: That wasn't really a tax scheme, now then the offer came to go to the ATO so I mean I was really interested in going along with all of this as a business, I thought it was a fantastic business, urn then I went to the ATO. I went to the ATO and asked them the ATO view and this is all in the ATO internal memos, I was asking around, `is this thing, do we still have this position ' DW: The position for? NP: Oh the technical, legal position, is the way we treat the law DW: Righto OK NP: Now if this is the way we treat the law and we've done it since 1992 DW: Right NP: Then it doesn't matter if I give one, a million or sixteen million advanced opinions or rulings, to my father my brother or anybody else, because if that's how we treat the law then that is the law, as far as the ATO is concerned, so why should my brother be treated any disadvantageously, or Nick Panos or anybody else so I had no problem with that , DW: OK NP: But I had no problem with that at all but I also understood the advantage of having them tell me information about what was going on in the market . So you know, did I get a benefit, well what benefit did I get, cup of coffee? A drink? When we met and they told me what was going on. Did I receive any cash at any point in time, was any account ever opened in my name, was any trust ever created in my benefit, was anything ever created in earth. Nothing has ever been done that I have received a red cent. If this was going to happen I wish that, you think to yourself shit at least if you have that benefit or money it would have been (inaudible) What I was afraid of covering my arse is shit and it does look like shit um yeah." (emphasis added) 186 The Crown relied, in particular, upon the underlined portions in this interview. This was said to reflect the development of the Accused's thoughts on this question at a time when he assisted his ex-wife with her studies. Thereafter, in his capacity as a consultant to the ATO and then as First Assistant Commissioner, the Accused had an opportunity, which he acted upon, to advance the interests of promoters associated with himself by causing steps to be taken within the ATO. The Accused concealed from the ATO his relationship with these promoters. The Crown contended that this was an appropriate starting point from which to consider evidence touching upon the element of causation. 187 The Crown submitted that it is artificial and unrealistic to examine the evidence of the four ATO officers without acknowledging the broader picture of the conduct of the Accused. It was necessary to do this to allow a proper appreciation of the evidence available to a jury bearing upon the element of causation. In this context, the Crown points to the statement by the Accused in Exhibit C199 set out above as providing some understanding of his actions with respect to relevant rulings and opinions. 188 The Crown submitted that the evidence revealed the following matters. At about the time the Accused commenced employment in the ATO, he drafted and settled applications to be submitted by Mr Panos to the ATO for Advance Opinions. The Crown alleged that the Accused so acted pursuant to an agreement with Mr Morgan and Mr Panos, revealed in the evidence of Mr Morgan and, according to the Crown, confirmed by available circumstantial evidence, whereby the Accused would devise tax schemes to be marketed by Mr Morgan and others. The Crown alleged that the purpose in obtaining favourable Advance Opinions for the promoters' companies was to give them a marketing advantage and to establish precedents for taxpayers who may want their own Private Binding Ruling. The applications were directed by Mr Panos to named officers in the ATO, although Mr Panos had had no prior dealings with any of them. The Crown submitted that these ATO officers were nominated by the Accused as appropriate points of contact because they would, or could be persuaded to, issue favourable rulings. 189 The Crown submitted that, throughout the same period, the Accused had taken steps to make it known in the ATO that he had expertise in the area of tax law involved in the rulings. He did not disclose to any person that he had an association with the applicants for the rulings and that he had, indeed, played a part in drafting the applications to the ATO. The Crown submitted that each of the ATO officers to whom the applications for Advance Opinions were sent were in communication with the Accused who provided varying degrees of assistance to ensure that favourable opinions were issued for the tax schemes with which he was involved. 190 Once the precedents had been established by the issue of the favourable Advance Opinions to the promoters' entities, the Crown submitted that Mr Morgan started to market the schemes. At about the same time, the Accused was appointed Officer-in-Charge of the Strategic Intelligence Assessment Unit within the ATO. He proceeded then to recruit Mr Aivaliotes to his area, and entrusted him with the task of processing the applications for Private Binding Rulings for the schemes with which the Accused was associated. 191 The Crown pointed to the evidence of Mr Aivaliotes that he had never handled an application for a ruling previously and knew nothing about the areas of tax involved. The Strategic Intelligence Assessment Unit had the responsibility of gaining information concerning market trends. The Crown submitted that it was not a function of this Unit to issue rulings and that the Accused did his best to conceal the number of rulings issued. 192 The Crown submitted that, when the schemes were sold and the taxpayer wanted his own ruling, Mr Panos posted or had delivered the application exclusively to the attention of Mr Aivaliotes. The Accused drafted the template used by Mr Aivaliotes so as to enable him to format and provide the initial favourable rulings. From time to time, Mr Panos sent correspondence seeking clarification of various issues. On each occasion, he directed the correspondence to Mr Aivaliotes. Except for one occasion when Mr Aivaliotes replied to Mr Panos of his own initiative, the Crown submitted that all other responses were approved or settled by the Accused. 193 On the one occasion when Mr Aivaliotes replied without checking with the Accused, the Accused had Mr Aivaliotes rescind the opinion he had expressed and respond with a letter then drafted by the Accused (T860-861). When applications were submitted to the ATO by Mr Panos for Advance Opinions for variations on the EBA schemes, they were also directed to Mr Aivaliotes, whose replies were drafted or settled by the Accused. At one point, according to Mr Aivaliotes, the Accused gave him a bundle of applications for rulings and asked him to "do them quickly" (T872.54). 194 The Crown acknowledged the evidence given by Mr Aivaliotes in cross-examination in which he said that he had acted professionally and in accordance with the law. The Crown submitted that it could not be expected that Mr Aivaliotes would say anything else. It was the Crown submission, however, that this misses the point. Mr Aivaliotes had been influenced substantially by the Accused by a process involving his initial selection, the direction of applications for rulings to him by Mr Panos, the close role of the Accused in drafting and settling responses to the rulings including a direction to rescind an opinion given. All of this, the Crown submitted, supported the argument that the Accused caused Mr Aivaliotes to issue the relevant rulings. 195 The Accused, according to the Crown, cleverly orchestrated a situation in which he controlled the responses to the applications submitted by Mr Panos in relation to the schemes in which the Accused was involved. Given the evidence of the involvement of the Accused in the preparation for the applications for Advance Opinions and Private Binding Rulings, and the evidence of Mr Morgan of an agreement that he would participate in sharing the profits in the sale of the scheme, the Crown submitted that, as a matter of commonsense, there was an irresistible inference that the ATO officers to whom the applications were sent were selected by the Accused because they provided the best opportunity for securing a favourable ruling. Given the Accused's proprietary interest in the schemes, which the Crown submitted he had blatantly concealed from the ATO and its officers at all times, it is illogical that the Accused would leave to chance the outcome of the applications. 196 The Crown submitted that, at the very least, there was sufficient evidence in support of the element of causation so that the present application by the Accused ought be rejected. The Crown submitted that the doctrine of innocent agency does not apply to this case. The first count does not allege that the Accused issued the relevant opinions and rulings. Rather, the indictment alleges that the Accused caused the issue of the rulings and opinions by others. The Crown maintained the submission that the evidence supported a conclusion that Mr Aivaliotes was a "puppet" of the Accused. 197 In the course of finding that a prima facie case existed with respect to the element of causation in the judgment of 27 June 2005, Sully J referred in some detail to the evidence of Mr Aivaliotes (pages 6-14). His Honour referred to the position of the Accused as "a person of real standing, authority and influence in the ATO" (page 7.9). Sully J summarised the evidence of Mr Aivaliotes concerning his recruitment by the Accused and the allocation to him of the task of giving rulings although, as Sully J observed "Mr Aivaliotes then had no experience whatsoever with the processing of such applications" (page 8.9). In January 1998, Mr Aivaliotes received an email from the Accused which provided a sample ruling on the employee benefits trust (Exhibit C106). Sully J continued (page 9.5): "Mr Aivaliotes said that he read the attachments to the email and used the draft as a precedent for issuing two Private Binding Rulings. He showed the rulings to the accused, who affixed to them, using a stamp of which he then had legitimate possession, the signature of the Commissioner's delegate, Mr Killaly. Thereafter, Mr Aivaliotes received further Private Binding Ruling applications." 198 Sully J referred to evidence in chief of Mr Aivaliotes concerning requests for Private Binding Rulings after January 1998 (T824.39): "Q. Thereafter did you receive further requests for private binding rulings in the course of your duties? A. Yes, I did, sir. Q. In what circumstances did they come to you? A. They either came to me via Mr Petroulias handing them to me; Mr Petroulias saying there were requests on my desk for me to do; or when arriving at the office at the security desk I would be told by the security officers that there was mail for me; or I was handed such requests by Mr Petroulias' secretary, Lisa Jifkins. Q. When it came to responding or considering whether you would issue a ruling or not, what process was followed in relation to those additional applications that you received? A. I would, of course, read the applications and the accompanying documentation. I would then consult with Mr Petroulias. I would again, having read them, look up the law to the extent of my abilities at the time. I would then prepare the rulings and show them to Mr Petroulias before applying the signature stamp and sending them out." 199 Sully J continued, in the judgment of 27 June 2005, to summarise the evidence of Mr Aivaliotes (page 10.4): "Mr Aivaliotes said that he had retained in lever-arch folders copies of any ruling issued by him together with the relevant documentation. Toward the end of 1998, probably in October, the accused took Mr Aivaliotes' files saying that, 'He wished to store them in his office safe or cabinet, which was in the form of a safe'. Thereafter, whenever Mr Aivaliotes had additional such material to be filed, 'I would give it to Mr Petroulias to file'.

[198]

Q. What did you do then in terms of achieving a final document and sending it out? A. Having produced what I considered to be a good final version, I'd take it to Mr Petroulias and I'd show it to him. Mr Petroulias would look at it and then say words to the effect of, 'This is all right' or 'This is okay. This looks all right. Go ahead and issue it'. Then I would go through the procedure of getting the signature stamp of Jim Killaly, Deputy Commissioner, from Mr Petroulias' desk and applying it to that finding. I would then photocopy or have a copy of that particular ruling which I filed in lever arch binder folders and send the original out to the Rulee." 201 Sully J adverted to parts of the cross-examination of Mr Aivaliotes (pages 12-14). His Honour then concluded (page 14.7): "The whole of the preceding discussion, if tested with practical commonsense and in conformity with the Towers guidance, seems to me to afford ample warrant for a conclusion that there is in hand evidence capable of supporting a finding by the jury that the accused did cause, in the requisite legal sense, the issue of the Aivaliotes rulings. That resolves in favour of the Crown the question whether there is a prima facie case in the element of causation." 202 Sully J gave the jury a number of directions on the element of causation and the evidence adduced in support of that element during the course of the summing up (SU77ff). Directions were given in accordance with the written directions to which reference has already been made. His Honour continued (SU79.2): "With those guidelines and those directions all in place, let us have a look at how, to begin with, the Crown structures its case on causation. The Crown case, as I understand it, rests upon five bases: first, the direct evidence of Mr Morgan; second, the direct evidence of Mr Aivaliotes; thirdly, the direct evidence of each of Messrs Chow, Targett and Charles as to the issue by them of the advance opinions which are numbered 1, 2 and 3 in exhibit C94; fourthly, things said by the accused himself in intercepted telephone conversations and in conversations with the arresting police; and, fifthly, a circumstantial case constituted by a number of individual facts and circumstances." 203 Mr Clelland SC submitted that his Honour should have directed the jury, on the causation issue, to confine their attention to the evidence of the four ATO officers. I do not accept this submission. It involves an artificial limitation upon the approach to evidence which is capable of bearing upon the element of causation. 204 Sully J proceeded to remind the jury of features of the evidence relating to the five bases upon which the Crown relied with respect to causation. Reference was made to the evidence of Mr Morgan (SU80ff) and Mr Aivaliotes (SU98ff). Reference was then made to the evidence of Mr Chow (SU113ff), Mr Targett (SU122ff) and Mr Charles (SU125ff). Reference was made to evidence concerning things said by the Accused in intercepted telephone conversations and in conversations with the arresting police (SU129ff). His Honour then moved to the fifth basis relied upon by the Crown on causation being a circumstantial case constituted by some 12 individual facts and circumstances (SU133ff). His Honour reminded the jury of the way in which the Crown relied upon this material (SU133.8): "I think a fairer way of putting this collection of material would be this: that you should understand that the Crown asks you to look at it as a circumstantial case which establishes - if you accept it, of course - that there were on foot at material times activities which really do not bear any other rational explanation than that the background to them was the original concluding of arrangements exactly of the kind that Mr Morgan alleged had been concluded in the evidence that he gave you." 205 I have set out in some detail extracts from the evidence and the judgment and summing up of Sully J at the first trial. It is necessary, however, once again to keep in mind the relatively narrow issue which I am presently considering. The question is whether the first count is foredoomed to fail, in accordance with the principles set out earlier in this judgment, with respect to the element of causation. 206 I have considered, as part of my independent assessment, the transcript and exhibits from the first trial to which my attention was drawn in the course of submissions. In addition, I have considered carefully the judgment of Sully J of 27 June 2005 in which his Honour found a prima facie case on causation. The evidence relied upon by the Crown at the first trial supports a prima facie case on this element. In forming this view, I have kept in mind the concept of "substantial or significant cause" referred to in Royall v The Queen. Although Sully J did not use this precise phrase in directions to the jury, I consider that the directions which were given involved the same concept. 207 I am not satisfied that the concept of innocent agency has application to this case. The wording of the first count is significant in this respect. It is not alleged that the Accused himself issued the rulings or opinions. It is alleged that he caused them to be issued. Even if the concept of innocent agency did have application to this case, however, I am satisfied that the evidence of Mr Aivaliotes and the other evidence at the first trial identified by Sully J which bears upon the issue of causation supported a prima facie case in this respect. 208 In circumstances where I am satisfied, based on the evidence adduced at the first trial, that a prima facie case exists on this element, I am not satisfied that the first count is foredoomed to fail by reference to this element. I reject the application of the Accused based on this contention.

[200]

• In considering the act or acts of the accused in the sense explained in the preceding paragraph, you would be entitled to take the view that whatever you are satisfied the accused did in order to cause the rulings to issue, would be dishonest in the relevant legal sense if it in effect asserted to be true something that was in fact false, and if the accused, when doing the particular act(s), either actually knew that what he was thereby asserting to be true was in fact false; or did not believe that what he was thereby asserting was true. • similarly, and when considering those causative acts, you would be entitled to take the view that an act would be dishonest In the relevant legal sense, if the accused either did the act knowing that he had no right to do it; or did the act not believing that he had a right to do it." 211 Although the Accused does not challenge the terms of the direction with respect to dishonesty, it is submitted there was no linking of the concept of dishonesty with the acts said to be causative of the issue of the rulings. The first count alleged that the Accused had caused the rulings and opinions to issue "by dishonest means". 212 Mr Clelland SC submitted that the law requires a distinction to be made between general evidence of dishonesty and evidence that the Accused caused the rulings to issue by dishonest means. It was submitted that the directions of Sully J failed to require that such a distinction be made by the jury in circumstances where the prosecution is unable to prove dishonest means in the way that term is to be understood. It was submitted that the first count requires proof beyond reasonable doubt not only that the Accused acted dishonestly, but also that his dishonest acts caused the rulings to issue in the form in which they did. 213 Mr Clelland SC relied upon the decision of the Court of Criminal Appeal in R v Iannelli (2003) 56 NSWLR 247 in which reference was made at 258 [65] and 271-272 [116]-[119] to the distinction between proof of dishonest means in the perpetration of the fraud alleged and proof of a dishonest state of mind. Reference was also made to Peters v The Queen at 509-510 [33] and Spies v The Queen (2000) 201 CLR 603 at 633-634 [87] and 635 [92]. 214 It was submitted for the Accused that there was no evidence upon which a reasonable jury could conclude that the Accused caused the rulings to issue by dishonest means and that Sully J should have directed an acquittal on the first count. 215 The Accused submitted that the Crown must prove that causation was by dishonest means and not simply throw up a generalised body of evidence about dishonest conduct or point to acts which might be thought to be dishonest. Mr Clelland SC submitted that the mere non-disclosure of an association between the applicants for the rulings and the Accused did not satisfy the requirement for the rulings to have been issued by dishonest means. The content or terms of the rulings would have to be shown to be the result of dishonest means or dishonest conduct that caused the rulings to issue in the form in which they did. The Accused submitted that, even if the association had been disclosed, there is no evidence and no basis for concluding that it would have altered the form of the advice or ruling as it was the duty of each officer to issue the rulings in the form they did applying the established ATO view. 216 Criticisms were made by the Accused of parts of the summing up of Sully J with respect to this element. It was submitted that the evidence adduced by the Crown was incapable of proving the element of dishonest means. 217 The Crown acknowledged before me that more elaborate directions ought probably have been given with respect to dishonest means than those which were given to the jury (PT381.47, 2006). However, the Crown submitted that there was ample evidence to support this element and that it cannot be concluded that the first count is foredoomed to fail on this basis. The formulation of appropriate directions to the jury with respect to this issue is a matter for future submissions in the context of a determination by me, as the trial judge, as to the terms of directions to be given to the jury. 218 I accept that the question, for present purposes, is whether the first count is foredoomed to fail with respect to this element because of an absence of evidence capable of supporting the element. 219 The Crown referred to five categories of dishonesty of the Accused which bear upon this question being:

[203]

(e) the deception of officers as to the rulings being issued. 220 I have noted earlier in this judgment (paragraphs 96 and 97) the concession made by Mr Clelland SC concerning the availability of evidence relating to dishonesty on the part of the Accused. That concession touches upon a number of the topics referred to in the preceding paragraph. 221 The first category relates to conflict of interest. The Crown submitted that the materiality of conflict of interests to the question of the issue of the favourable rulings cannot be dismissed on the basis of a mere failure to inform the ATO officers with whom the Accused dealt of his interest in the schemes. The Crown submitted that the issue involves the exploitation by the Accused of his knowledge and contacts within the ATO in order to ensure that the applications for Advisory Opinions and Private Binding Rulings were likely to be successful, as they indeed were. The success of these applications, the Crown submitted, is to be contrasted with the failure of applications from other promoters for similar schemes which did not have similar patronage. According to the Crown, the issue of conflict of interest embraces the same matters identified in the context of causation, being the elaborate steps taken by the Accused within the ATO to contrive a situation in which the applications were not only dealt with expeditiously, but also had the maximum chance of success. 222 The Crown submitted that the conflict of interest persisted at a practical level until the end of the issuing of the rulings by Mr Aivaliotes, with the Accused directing Mr Aivaliotes to write letters to the PIC promoters designed to protect their schemes from the effects of the Draft Public Ruling, in a way which was intended to maximise the fraud on the Commonwealth by doing his best to ensure that taxpayers who had purchased these schemes but had not been issued with their rulings, were protected by the rulings. In these ways, the Crown submitted that the evidence revealed actions of the Accused flowing from his conflict of interest which supported a conclusion that he caused the rulings to issue by dishonest means. 223 The second component of dishonest means relied upon by the Crown concerned the allegation that the Accused had approved the use of a policy within the ATO to EBAs which required the application of fringe benefits tax in a way which effectively put the schemes out of business, but did not apply that policy to the PIC schemes in which he had an interest. The Crown pointed to the formulation of Mr Chow's position paper which the Accused said would be the position to be applied in the ATO (T392; Exhibit C41). Thereafter, the Accused promoted a Draft Public Ruling to that effect which was to apply to all EBAs. Notwithstanding that process, the Crown submitted that the Accused continued to use his position in the ATO to ensure that Mr Aivaliotes continued to issue favourable rulings to the PIC schemes without requiring fringe benefits tax to be paid. In this way, the Crown submitted that the dishonesty in his conflict of interest between his role as part of the PIC group selling the scheme and his role in the ATO, directly related to his capacity to ensure that Mr Aivaliotes continued to issue favourable rulings to the PIC schemes regardless of the policy which was otherwise being advocated by the Accused through the agency of Mr Chow. In this way, the Crown submitted that the acts of the accused were capable of constituting dishonest means for the purpose of the first count. 224 The third component relied upon by the Crown is related to the second. The Crown submits that the evidence revealed that the Accused, while encouraging Mr Aivaliotes to issue favourable rulings to the PIC schemes, had Mr Chow intervene in applications for similar schemes by other promoters in order to ensure that the officers processing the applications applied the policy approved by the Accused and issued unfavourable rulings requiring fringe benefits tax to be paid in relation to those schemes. According to the Crown, this aspect of the evidence demonstrates the dishonest character of the conduct of the Accused in using his position in the ATO to protect the interests of the PIC schemes by frustrating the opposition. Had ATO officers known that the Accused had an involvement in an opposition scheme, the Crown submitted that they may well have queried why the PIC scheme received favourable rulings when they were being asked to issue unfavourable rulings to the opposition. 225 With respect to the fourth and fifth components, the Crown pointed to evidence of the actions of the Accused in concealing the number of rulings issued in favour of the PIC schemes and in deceiving any officers who sought that information. It was submitted that these were further acts of dishonest conflict of interest which were intended to contribute to the continuation of the issue of the rulings. The ATO had a system of peer review which was thwarted by the actions of the Accused in concealing the rulings. The only officer who was aware of the rulings being issued in favour of the PIC schemes was Mr Aivaliotes. Had any other officers been aware that favourable rulings were being issued to one scheme when similar schemes were receiving unfavourable rulings, and a public ruling was to be issued to the contrary, the Crown submitted that there was an obvious risk of enquiries being made that might have the result that the favourable rulings would have to cease. Accordingly, the Crown submitted the deception of the Accused allowed the favourable rulings to continue to issue to the PIC group. 226 In my view it is necessary, once again, not to confine in an artificial way the evidence to be considered in assessing the defence submission that the first count is foredoomed to fail by reference to the element of dishonest means. The evidence adduced by the Crown involved direct evidence, and evidence from which inferences adverse to the Accused could be drawn. It is necessary to have regard to that evidence which is capable of bearing upon the element of dishonest means. 227 To prove a defrauding, the prosecution must establish that the Accused used dishonest means to achieve his object: Spies v The Queen at 630 [78]; R v Iannelli at 249 [6]. Proof of dishonest means may involve establishing that the Accused intended to prejudice another person's rights or interest by concealing facts which he had a duty to disclose: Peters v The Queen at 529 [84]; Spies v The Queen at 631 [80]; R v Iannelli at 249 [7]. Concealing facts which the Accused had a duty to disclose is capable of constituting an active step on the part of the Accused to prejudice the victim: R v Iannelli at 250 [11].

[204]

228 In the judgment of 27 June 2005, rejecting an application for a verdict by direction of the first count, Sully J considered the issue of dishonesty (pages 15-19). His Honour referred to the evidence of Mr Morgan (pages 16-17). His Honour adverted to the return of private interests completed by the Accused on 31 March 1998 (Exhibit C203) which required disclosure of any conflict of interest but, in relation to which, the Accused made no disclosure whatsoever. Sully J linked the evidence of Mr Morgan and the non-disclosure of the Accused of his conflict of interest (page 18.5): "It seems to me to be inescapable that a jury which accepted from Mr Morgan that the accused did indeed operate as an active and enthusiastic entrepreneur in the contexts particularised in items A and B of the Crown case statement would [not] have to conclude, - but would certainly been entitled to conclude, - that the failure of the accused to disclose in any way at all that he had a substantial financial interest in private binding rulings which he was causing to issue, was essentially dishonest according to the currently accepted standards of normal decent people." 229 Sully J concluded that part of his judgment dealing with dishonesty in the following way (page 18.8): "There are 228 Crown exhibits, and it is, obviously, impossible to make, on the present occasion, a detailed canvass of them. It must suffice to say that there are within that mass of material instances of conduct which seem to me to be properly available to the jury as evidence of dishonest conduct on the part of the accused as, simultaneously, a tax scheme entrepreneur and a member of the Senior Executive Service bound by the duties of disclosure and of transparently honest and impartial behaviour that are the rationale of exhibit C203. The consideration to which Mason P draws attention in [112] of his Honour's judgment in the Court of Criminal Appeal is also capable, in my opinion, of being accepted by the jury, in which event there would be, on that account, further evidence of dishonesty. In my opinion, the element of dishonesty has been sufficiently established to the extent contemplated by the Towers principles." 230 Although his Honour did not refer expressly to the concept of dishonest means in this judgment, the reasoning, in my view, supports the finding of a prima facie case with respect to that element in the first count. A more elaborate foundation in support of that element was revealed in the Crown's closing address and in the summing up to the jury.

[205]

231 The concession of the Accused (at paragraphs 96 to 97 of this judgment) is not unimportant on this question. There was evidence of dishonesty on his part. The acts pointing to dishonesty did not exist in a factual vacuum. The context in which it occurred involved the Accused having a significant interest on both sides of the fence of the relevant applications. On one side of the fence, he was assisting the applicants in the drafting and preparation of relevant documents. On the other side of the fence, he was playing a direct supervisory role with respect to Mr Aivaliotes, with evidence adduced at the first trial capable of supporting a submission that he exercised a significant influence over Mr Aivaliotes with respect to the issuing of the rulings. He did so at a time when he occupied a most senior position within the ATO. The existence of a conflict of interest and the non-disclosure of that interest is pertinent. The functions being exercised by Mr Aivaliotes, under the Accused's supervision, related directly to the subject matter of that conflict of interest. It is capable of constituting the type of evidence of dishonest means identified in Peters v The Queen, Spies v The Queen and R v Iannelli. This is not a case where there was a technical or theoretical conflict of interest between the Accused's formal position within the ATO and the tasks being carried out by persons in a remote part of the ATO far removed from the Accused. The functions of the ATO which were being exercised under the supervision of the Accused related directly to his private and undisclosed interest. What I have said, of course, does not constitute findings of fact made by me about the Accused. I express these views in the context of the foredoomed to fail ground which I am presently considering. They are expressed upon the basis of the arguments made in support of the present ground. 232 For the purposes of disposing of the present application, I am satisfied that the evidence adduced at the first trial supported a prima facie case with respect to this element in accordance with the principles in R v Iannelli and the authorities referred to therein. 233 I am not satisfied that the first count is foredoomed to fail with respect to the element of dishonest means. I reject the application of the Accused on this ground.

[215]

(h) the volume and complexity of the issues and materials will result in an unmanageable and unfair trial, not only in the sense of the capacity of the jury to determine guilt or non-guilt upon evidence which "they are able as humans both to comprehend and remember" ( R v Cohen , UK Court of Appeal, 28 July 1992, unreported, page 30G - the Blue Arrow Case ), but also in the sense of the defence being unable to cope with the volume of evidence that has been marshalled by the combined resources of the ATO, the Australian Federal Police and the Commonwealth Director of Public Prosecutions. 237 Mr Clelland SC submits that all of these factors ought be taken into account for the purpose of the weighing process involving, as it does, a subjective balancing of these factors and considerations: Walton v Gardiner at 396. It is submitted that the "oppressive" arm of the abuse of process ground does not rely for its success solely on the proposition that there is no possibility of a fair trial for this Accused, although it is contended that, in all the circumstances, the Court is unable to secure a fair trial for this Accused. 238 Mr Clelland SC submits that an assessment of all the circumstances of this case demonstrates that the prosecutorial process has become an instrument of oppression against the Accused. It is submitted that the maintenance of public confidence in the administration of justice outweighs any public interest in the continuation of the proceedings. It is said that the continuation of the trial will result in "unacceptable injustice and unfairness" (Walton v Gardiner at 392) of a kind which is incurable, either by the making of rulings as to admissibility or discretionary exclusion of evidence or directions to the jury. 239 The Accused points to the history of the charges since the time of his arrest and charge in Melbourne on 24 March 2000. At that time, the Accused was charged with one count of conspiracy to defraud contrary to s.86 Crimes Act 1914 (Cth). This charge was withdrawn on 2 June 2000 and was replaced, not with a s.29D charge, but with three substantive charges under ss.30, 70 and 73(2) Crimes Act 1914 (Cth), in relation to which the Accused was returned to New South Wales under the Service and Execution of Process Act 1992 (Cth). 240 On 12 December 2000, the Accused was charged with defrauding the Commonwealth contrary to s.29D Crimes Act 1914 (Cth). Particulars of the s.29D charge were provided on 14 February 2001. Committal proceedings followed. The Accused sought leave to appeal against the order of committal with the appeal being determined, favourably to the Accused, by Simpson J. The Crown appealed to the Court of Appeal which confirmed aspects of Simpson J's findings, but set aside a number of the orders made by her Honour. 241 On 22 March 2004, the Accused was committed for trial again on a s.29D charge in a different form to that originally laid. In August 2004, Sperling J dismissed an appeal by the Accused against his committal for trial on the s.29D charge. 242 The Accused was arraigned on 2 April 2004 upon an indictment in the form relied upon by the Crown before Sully J and again before me. In circumstances identified earlier in this judgment, on 21 February 2005, Sully J permanently stayed the s.29D count, taking the view that "enough is enough". 243 The Crown appealed to the Court of Criminal Appeal which, on 11 March 2005, allowed the appeal and overturned the order granting a permanent stay of the first count on the indictment. 244 The Accused submits that the Crown did not take up the course proposed in the majority judgment of the Court of Criminal Appeal concerning the manner in which the Crown could seek to establish the element of deprivation in the first count. 245 Mr Clelland SC points out that the Accused was 29 years of age when he commenced employment as a consultant with the ATO in 1997. It is now nearly six-and-a-half years since the Accused was first arrested and charged. Since that time, it is submitted that he has spent nearly 12 months of his life "effectively undergoing periodic detention" by attending various court proceedings with many further hours engaged in preparing his defence and in conferring with his lawyers. 246 The proceedings against the Accused now occupy some 4,000 pages of transcript. Material disclosed to the Accused includes more than 20,000 documents. At the first trial, the Crown tendered 18 lever-arch folders of documentary exhibits and the defence, one folder. There were a further six folders of documentary material marked for identification. 247 Mr Clelland SC submits that the Accused is an individual who has to privately fund his defence, including being required to pay tens of thousands of dollars to obtain transcripts of the evidence in the first trial. He points to the stress to the Accused arising from the institution and continuation of the proceedings. 248 No evidence was adduced by the Accused on the present application concerning any subjective factors touching the Accused with might be relevant to the application. 249 Against this general background, I turn to consider the factors which the Accused submits ought be taken into account in support of the broad abuse of process ground.

[216]

The Submission that the Crown Case on the First Count is Insufficient 250 I have considered, in some detail, and have rejected the defence submission that the first count is foredoomed to fail. I have accepted that there is a prima facie case with respect to the elements of deprivation, causation and unlawful means based upon the evidence adduced at the first trial. The Accused concedes the existence of a body of evidence going to the general issue of dishonesty. 251 The Accused submits that, even if the foredoomed to fail ground was rejected, I am entitled to have regard to the strength or otherwise of the Crown case on the first count in determining whether to grant a permanent stay on the broad abuse of process ground, either on its own or in combination with other factors. No authority was cited in support of this proposition. 252 In circumstances where an Accused has failed to satisfy the foredoomed to fail ground (a recognised category of abuse of process) it is difficult to see that the Court would be entitled to grant a permanent stay of a criminal prosecution based upon the strength, or lack of strength, of the Crown case in support of the prosecution. This is so even where evidence has been adduced by the Crown at a trial and the Crown has indicated an intention to rely upon the same body of evidence at a retrial. 253 It is the primary responsibility of the Commonwealth Director of Public Prosecutions to exercise prosecutorial discretion and to determine whether a retrial should proceed: Island Maritime v Filipowski at [81]; R v Smith at 28-29. Of course, it remains open to the Court to exercise powers to control the processes of the Court. However, absent a successful foredoomed to fail argument, the processes of the Court which apply are the ordinary trial processes which exist for the determination of criminal proceedings against a citizen. This involves trial by jury: s.131 Criminal Procedure Act 1986. The power of the Court to prevent abuse of process does not provide a basis for enlarging the powers of a trial judge at the expense of the traditional jury function: Doney v The Queen at 215; R v R (1989) 44 A Crim R 404 at 414-415. 254 Given the breadth of factors which may be relevant to abuse of process (Batistatos at [9]), it may be that the strength or otherwise of the Crown case may be taken into account, in conjunction with other factors, in support of a permanent stay application. 255 It is sufficient for the moment for me to record my conclusion that I am satisfied that a permanent stay should not be granted based upon the suggested insufficiency of evidence to support the first count on the indictment.

[221]

If you accept what Morgan says about the formation of the agreements, and in particular what he says about the constant references of the accused to the paramount importance of having the PIC schemes covered by advance - advisory opinions and private binding rulings not available for competing schemes, then it would be open to you to infer that the co-venturers did have, indeed, an understanding that the accused would do what he is charged in this count with having done as an incident of his earning his one-third share in the profits. But I have to say with the greatest emphasis that analysis simply won't stand at all unless you are prepared to find beyond reasonable doubt that Morgan is to be accepted in what he says about the nature of the basic arrangement which he says was struck among himself, Panos and the accused. There is really very little - in fact there is practically nothing - that I can usefully say to you about count 2. The issue is as stark as that. If you accept Morgan, then you might - it would be open for you to find that the other elements were in place. It's not in dispute, for example, that Mr Petroulias was a Commonwealth officer at the various times. Everything comes back to whether or not you agree - 'agree' is hardly the way to put it - whether or not you accept as having been established beyond reasonable doubt that the basic agreement of which Morgan gave evidence." 261 His Honour gave the jury directions concerning the elements of the offence contained in the third count in the indictment (SU228ff). The present ground advanced by the Accused that no reasonable jury could accept the evidence of Mr Morgan does not extend to the third count on the indictment. 262 A significant challenge was made by the Accused to the credibility and reliability of Mr Morgan at the first trial. It is not necessary, for present purposes, to amplify the various bases of attack upon Mr Morgan. They were identified in the submissions made to the jury at the first trial and referred to by Sully J in the summing up. 263 It was a matter for the jury to assess the evidence of Mr Morgan. The Crown submitted at the first trial, and again before me on this application, that the evidence of Mr Morgan was corroborated in a number of important respects by documentary evidence. 264 In argument, Mr Clelland SC confined the way in which the Accused pressed this ground, although he maintained that the suggested deficiencies in the evidence of Mr Morgan ought be taken into account in the weighing process (PT265.53, 2006). I am not satisfied that any question concerning the credibility and reliability of the evidence of Mr Morgan founds the grant of a permanent stay of these prosecutions as an abuse of process. It was a matter for the jury at the first trial to assess the evidence of Mr Morgan and to determine what weight to attach to it. It will be a matter for the jury at the retrial to undertake a similar task. 265 It has been observed that a judge should not stray into the area reserved for the jury: Doney v The Queen at 215. That principle, which applies to the determination of an application for a directed verdict at the close of the Crown case, has greater application when an Accused seeks to bring to an end the processes of justice applicable to him in criminal proceedings: R v Smith at 25, 30. 266 This head of argument does not provide a basis for a permanent stay of these criminal proceedings.

[222]

Conduct of the Crown in Persisting to Prosecute Various Versions of s.29D Charge 267 The developing history of the s.29D count has been referred to earlier in this judgment. The count has been in the same form since April 2004 when the Accused was arraigned. The present form of the first count was considered by Sully J and the Court of Criminal Appeal in 2005. 268 The Court of Criminal Appeal was alive to the developing history of this count. It is fair to observe that the technical features of this count and, in particular, the element of deprivation have been identified and developed in the judgments of the Court of Appeal and the Court of Criminal Appeal to which reference has been made. As the judgments of the Court of Appeal and Court of Criminal Appeal demonstrate, the matter is not without complexity. Despite the history of amendments, the Court of Criminal Appeal allowed the appeal from Sully J and set aside the permanent stay with respect to the first count. 269 Following the decision of the Court of Criminal Appeal in March 2005, the first count as pleaded in the indictment was left to the jury which could not agree on a verdict. At the time of the appeal before the Court of Criminal Appeal in March 2005, the Crown had not indicated an intention to adduce any expert evidence with respect to the element of deprivation. The Court did not rule that the calling of such evidence was a prerequisite to the first count proceeding to a trial on the merits. The suggestion was made in the judgment of the majority that such evidence would be admissible. However, the Crown did not seek to adduce such evidence. 270 The Crown maintained the case on the element of deprivation as identified, in broad terms, by Mason P at 680-682 [68]. The Crown sought to rely upon additional evidence to that referred to by Mason P. However, the evidence was of the same broad type - documents prepared by ATO officers, including the Accused, which bore on the question of an arguable case that the rulings were wrong. In disposing of an earlier ground in support of the present application, I have held that the evidence adduced by the Crown at the first trial, supported a prima facie case on the element of deprivation. 271 I am not satisfied that the developing history of the s.29D count since 2000, and the manner in which the Crown approached this issue at the first trial, provides a foundation for the grant of relief presently sought by the Accused.

[225]

278 I have concluded that there was evidence at the first trial to support a prima facie case with respect to each of these elements of the first count. 279 The principal submission of the Accused under this heading was that a substantial prospect of acquittal was lost because of directions given, or not given, at the trial in response to Questions 5 and 6 asked by the jury on 9 August 2005 which related to the element of deprivation. For reasons given earlier in this judgment, I am not satisfied that the approach taken by his Honour with respect to those questions was erroneous. The questions asked by the jury were not the issues which the Crown was required to establish in support of the element of deprivation on the first count. 280 I am not satisfied that any error was involved in the directions given to the jury concerning the elements of deprivation and causation. I note the Crown's acknowledgement that a more elaborate direction with respect to dishonest means ought to have been given and that this issue may be considered in the course of submissions as to appropriate directions to be given to the jury at the retrial. 281 I am not satisfied that the Accused lost a substantial prospect of acquittal on the first count at the first trial because of the directions given with respect to dishonest means. There was, in my view, a sufficient linkage between his Honour's directions concerning dishonesty and the means by which the Crown alleged that the Accused caused the rulings and opinions to issue. The issues of dishonesty and dishonest means were clearly enough before the jury. 282 The Accused has submitted, in support of the present ground, that an erroneous direction was given to the jury with respect to the element of intention. The Accused conceded that there was evidence capable of supporting the element of intention, but that the jury was misdirected in this respect and that, as a result, a substantial prospect of acquittal was lost. The Accused submitted that it was an element of the offence of defrauding the Commonwealth that the Accused must be shown to have intentionally put the revenue at risk. It was submitted that it was never explained to the jury that the Crown had to prove that the Accused intended that the Commissioner to suffer a detriment as a result of the issue of the rulings and that, if the Accused believed and intended that the rulings issued were correct and/or reflected the ATO view, as then prevailing, he could not be said to have had such an intention. An argument was developed in the written submissions concerning the so-called bona fide and non-bona fide features of various arrangements. 283 The written directions of Sully J to the jury concerning the first count stated that the Crown must prove beyond reasonable doubt a number of elements, including that the Accused knew and intended that the issue of the relevant rulings and opinions would have the consequence that the Commissioner of Taxation was deprived of something of value (MFI 105, Document 5, pages 1-2). Having directed the jury as to the elements of the first count, including intention, Sully J said (SU217.5): "Whatever the bare theory of the matter may be, I have to say to you that, as a matter of a comment of fact rather than a direction of law, I should think that I would find it very difficult to see how, if all of those issues had been resolved in favour of the Crown, it would be possible to find that, somewhere or other, there was something residual left over that showed an intention other than a culpable intention of the kind that the law requires to be demonstrated by the Crown." 284 The Crown submitted that the requirement to prove that the Accused intentionally put the revenue at risk did not add a significant evidentiary burden to the prosecution case as evidence which established the use of dishonest means demonstrated that the Accused had acted intentionally to put the revenue of the Commonwealth at risk. The portion of the summing up referred to in the preceding paragraph reflected the way in which the Crown left this issue to the jury in its closing address. 285 With respect, I do not detect any error in the form of direction given by his Honour to the jury with respect to the element of intention. Further directions given by his Honour concerning this issue placed that direction in its factual context in this case. 286 I note that the submissions of the Accused under this heading relate to the first count only. I am not satisfied that the Accused has lost a substantial prospect of acquittal as a result of any allegedly erroneous directions given at the first trial with respect to the first count.

[226]

Failure of the Crown to Call Competent and Compellable Witnesses 287 The Accused submits that he is entitled to a permanent stay of the proceedings because of the failure of the Crown to call a number of witnesses at the first trial. Principal reliance was placed upon the failure of the Crown to call Mr Panos and Mr Strong. 288 Mr Clelland SC submitted that the Crown had identified the alleged arrangement between the Accused and others as being fundamental to the success of its case. On the Crown case, six people were parties to that arrangement, but only one person, Mr Morgan, was called by the Crown. 289 It was submitted for the Accused that Mr Panos and Mr Strong had made statements but were not called by the Crown at the first trial. It was submitted that no proper reason was given for failing to call those witnesses. It was submitted that Mr Panos, in particular, was central to the unfolding of the prosecution case. The Accused submitted that the Crown sought to, and were permitted to, tender documents which purported to be authored by or connected to Mr Panos, Mr Strong or other persons. The Crown invited the jury to draw inferences adverse to the Accused from the content of these documents. This, it was submitted, was unfair and oppressive. The non-calling of the witnesses, whom Mr Morgan had identified as being parties to the alleged agreement, was said to exacerbate the unfairness. 290 Mr Clelland SC relied upon statements concerning the duties of a prosecutor in relation to the calling of witnesses in Richardson v The Queen (1974) 131 CLR 116, Whitehorn v The Queen, The Queen v Apostilides (1984) 154 CLR 563 and R v Kneebone (1999) 47 NSWLR 450. It was submitted that failure to call a material witness may constitute an abuse of process justifying a stay of proceedings: Houston v Crannage (1989) 42 A Crim 446, citing Barton v The Queen (1980) 147 CLR 75 and R v Harry; Ex parte Eastway (1985) 39 SASR 203. 291 In support of the permanent stay application determined by Sully J on 21 February 2005, the Accused relied upon alleged unfairness deriving from an apparent intention on the part of the Crown not to call certain witnesses. These witnesses were Mr Panos and Mr Strong (page 17). His Honour was informed that the Crown was endeavouring to make contact with these persons for the purpose of having conferences with them. The Crown position was that the Crown would not call either of these two persons without having had a conference and having been thereby persuaded that the Crown ought to call them as witnesses (page 18). Sully J saw no basis upon which the position as it stood concerning Mr Panos and Mr Strong would strengthen the stay application then advanced. 292 I was informed by the Crown that Mr Panos and Mr Strong were not called as Crown witnesses because of the existence of evidence obtained by telephone intercepts of collusion with them by the Accused in relation to providing false explanations to any police officer who should approach them about the matter. In support of this submission, I was provided with copies of transcripts of telephone conversations between the Accused and Mr Strong on 2 and 4 October 1999 and between the Accused and Mr Panos on 3 October 1999. These transcripts were Exhibit D1 on the voir dire with respect to Pre-Trial Application No. 3 determined by Sully J on 14 April 2005. His Honour declined to admit the transcripts as evidence in the trial on relevance grounds. In my view, the transcripts disclose discussions between the Accused, Mr Strong and Mr Panos which may be characterised in the manner described in the Crown submission. 293 It was submitted for the Accused before me that the proposition put by the Crown that the telephone intercepts established a basis for not calling Mr Panos and Mr Strong was effectively rejected by Sully J when he ruled on the admissibility of the particular intercepts on 14 April 2005. I do not accept this submission. His Honour ruled that the transcripts were not admissible in the trial of the Accused, applying the relevance test in s.55 Evidence Act 1995. His Honour did not determine that there was an absence of collusion between the Accused, Mr Panos and Mr Strong for the purpose of devising answers to questions to be asked of them by police. The transcripts tend to support that description. 294 I was further informed by the Crown that Mr Panos and Mr Strong did not respond to written requests that they attend for a conference with the Crown representatives. In these circumstances, the Crown concluded that they would not be called in the Crown case at trial. This was the approach foreshadowed in February 2005 to Sully J. 295 The Crown submitted that the question whether Mr Panos and Mr Strong ought be called in the Crown case involved the exercise of prosecutorial discretion. In accordance with the procedures proposed in R v Kneebone at 460-461 [49]-[52], 462 [60]-[61], the Crown had invited these two persons to attend for a conference to allow an assessment to be made of their veracity and independence. Both persons declined to attend such a conference. Having regard to the information available to the Crown concerning their collusion with the Accused during the investigation, it was determined that they not be called in the Crown case. 296 The Crown submits that it was open to the Accused to call Mr Panos and Mr Strong in his case. Both persons are solicitors and, the Crown submitted, would no doubt be capable of giving coherent evidence in chief so that there was no prejudice by reason of the Accused not being able to cross-examine them. It may be taken, the Crown submitted, that Mr Panos and Mr Strong were articulate and intelligent persons. In these circumstances, there was no unfairness to the Accused. 297 The Crown submits that, apart from Mr Panos and Mr Strong, the defence during the course of submissions produced a list of names of almost every officer who had dealt with the Accused when he was in the ATO but was not called as a witness. No prior request had been made that these witnesses be called. 298 Sully J gave the jury written directions with respect to the absence of evidence from Messrs Panos, Strong, McLaren and Gray (MFI 105, Document 3, page 4). His Honour directed the jury that they must not speculate about why any of these persons was not called as a witness. His Honour repeated this direction in the summing up (SU46-47). His Honour declined to give a direction to the jury in terms of the rule in Jones v Dunkel (1959) 101 CLR 298. 299 In Dyers v The Queen (2002) 210 CLR 285, Gaudron and Hayne JJ said at 291 [6]: "Further, as a general rule, a trial judge should not direct the jury in a criminal trial that the prosecution would be expected to have called persons to give evidence other than those it did call as witnesses. It follows that, as a general rule, the judge should not direct the jury that they are entitled to infer that the evidence of those who were not called would not have assisted the prosecution. A direction not to speculate about what the person might have said should be given. Again, exceptions to these general rules will be rare and will arise only in cases where it is shown that the prosecution's failure to call the person in question was in breach of the prosecution's duty to call all material witnesses." 300 I am not satisfied that the Crown's failure to call Mr Panos and Mr Strong constituted a breach of the prosecutor's duty to call all material witnesses. The Crown sought to confer with these witnesses in accordance with the practice referred to in R v Kneebone. It may readily be inferred that Mr Panos and Mr Strong were unwilling to attend a conference with the Crown representatives. Their telephone conversations with the Accused in October 1999 were such as to support a view that they were not at arm's length from the Accused. There is nothing to indicate that these persons were not available to be called by the Accused in his case at the trial if he so wished. I see no basis for the grant of a stay arising from the Crown's failure to call Mr Panos and Mr Strong at the first trial. 301 It was not until closing addresses that the defence identified other persons whom it was submitted that the Crown should call and in relation to whom a direction under Jones v Dunkel ought be given. In circumstances where the request to call such witnesses was left until that point in the trial, I do not see how this aspect weighs in the Accused's favour on the present permanent stay application. 302 I am not satisfied that the failure of the Crown to call the nominated witnesses at the first trial provides a foundation for the relief sought by the Accused in this application.

[227]

Impact of the Passage of Time Since 1997 303 The Accused points to the passage of time between the events of 1997-1999 and the present time and the suggested adverse impact upon non-documentary evidence of conversations said to have been had with the Accused and, in relation to which, oral evidence is relied upon by the Crown. The Accused submits that this feature is of significance to the present permanent stay application. 304 It is not submitted by the Accused that actual evidence has been lost or that there is some other form of actual prejudice resulting from the effluxion of time. 305 The Accused was arrested and charged in March 2000. He had been aware since 1999 that his activities were under investigation. There was an opportunity for the Accused to test Crown witnesses at the committal proceedings which extended over some 36 days. Of course, those witnesses were called in the first trial and there was an opportunity to cross-examine them. 306 Apart from Mr Morgan, the Crown case appears to be largely a documentary case. As Sully J observed at the first trial, the evidence of Mr Morgan is under strong challenge from the Accused and there is a contest as to conversations alleged by him to have taken place with the Accused and also as to the payment of money to the Accused with respect to the alleged arrangement. 307 It may be taken that memories may fade, to an extent, in the passage of time between 1997 and 2006. However, it is not uncommon in criminal trials for significant factual contests to arise with respect to events which allegedly occurred years, and often many years, prior to trial. I see nothing in the present case which suggests that this aspect gives rise to particular difficulty or unfairness to the Accused. Indeed, apart from Mr Morgan, the heavy dependence of the Crown case upon documents would suggest that memory may pose less of a problem in this case than in many others. 308 A permanent stay should be ordered only in an extreme case and the making of such an order on the basis of delay alone will accordingly be rare: Jago v District Court (NSW) at 33-34; R v Johnson (2001) 125 A Crim R 564 at 568-569 [17]. I am not satisfied that the delay in this case, or any consequences which may flow from it with respect to the quality of evidence, is such as to warrant a permanent stay of the proceedings.

[228]

An Unmanageable and Unfair Trial? 309 It was submitted for the Accused that I should have regard to the size and complexity of the proceedings as part of the weighing process referred to in Walton v Gardiner at 396, although it was submitted that it was not necessary for me to determine that it was beyond the capacity of a jury to understand and follow the case. 310 I have already referred to the observations of Mason P in R v Petroulias at 690 [118] that the complexity of a trial cannot be the touchstone of whether the trial takes place at all. 311 It is true that the first trial extended over some months, with ongoing debate and the need for resolution by Sully J of certain arguments concerning, in particular, the element of deprivation in the first count. The Crown and the Accused have had the benefit of hearing the totality of the evidence adduced at the trial and the arguments advanced with respect to the evidence by both sides. Mr Clelland SC submitted that the retrial may take longer than the first trial because of the additional evidence and material available from the first trial (PT296.24, 2006). The Crown submitted that having had an opportunity to observe the evidence and the manner in which it was approached by the parties, the "Crown case would in fact be better the second time around" (PT305.8, 2006). 312 I note that the Accused had the benefit of senior and junior counsel, together with at least one instructing solicitor, throughout the first trial and during the proceedings to date before me. The Accused's legal team has demonstrated a capacity to advance detailed arguments, written and oral, before Sully J and before me. The Accused and his legal representatives have acquired an additional understanding of the case from the first trial which ought allow an efficient and expeditious approach to the resolution of issues falling for determination in advance of and at the retrial. Mr Clelland SC acknowledged that the just and expeditious determination of the matter was in the Accused's interests (PT52.16, 2006). 313 I do not underestimate the challenge posed by this retrial. Some complex issues are involved. It will be my responsibility to manage the trial and to give the jury appropriate directions as required by law. I will look to counsel for the Crown and the Accused for assistance in this regard: R v Wilson and Grimwade at 165. As the Victorian Court of Criminal Appeal observed in that case (at 176), juries can deal with long and complex trials and have been known to do so satisfactorily when given appropriate opportunity and assistance. 314 I am not satisfied that the volume and complexity of the issues and materials will result in an unmanageable and unfair trial.

[233]

The Duplicity Argument 325 As I have determined that the first count should proceed to trial, it is appropriate that I consider the Accused's argument that the first count is bad for duplicity. In this respect, I note that Sully J heard such an argument and determined it adversely to the Accused in the judgment of 21 February 2005 (pages 11-13). As Mason P observed in R v Petroulias at 682 [69]-[70], the Accused did not file a Notice of Contention before the Court of Criminal Appeal contending that the order for a stay of the first count should be upheld on other bases, including the duplicity ground. 326 The submissions of the Accused before me advance the same arguments as were made to, and rejected by, Sully J. I note that the written submissions of the Accused on this issue (MFI1, paragraphs 226-229) refer solely to evidence given in the committal proceedings by various witnesses. There is no reference, in support of this argument, to evidence given at the first trial. This observation tends to confirm the fact that the submissions of the Accused on fact and law in support of the present application reproduce those which were made to Sully J in February 2005. 327 Mr Clelland SC submits that the first count, as particularised, is patently duplicitous because the particulars indicate that the 75 Advance Opinions and Private Binding Rulings relied upon were issued by different people in different circumstances in response to different applications at different times. Reliance was placed upon Walsh v Tattersall (1996) 188 CLR 77. It was submitted that the line of authority identified in R v Hamzy (1994) 74 A Crim R 341 and R v Moussad (1999) 152 FLR 373 had no application to the present case. 328 The Crown submitted that the first count, in the circumstances of this case, involved a single criminal enterprise. Reliance was placed upon the decision of the NSW Court of Criminal Appeal in R v Moussad which accepted the concept of single criminal enterprise in rejecting a duplicity argument relating to a count alleging fraud under s.29D Crimes Act 1914 (Cth). 329 In rejecting the Accused's argument in 2005, Sully J noted that, for the argument to be upheld, it would be necessary to distinguish the line of authority in New South Wales typified by the decisions of the Court of Criminal Appeal in R v Hamzy and R v Moussad. Sully J concluded that the present case fell within the principles explained by Lord Diplock in Director of Public Prosecutions v Merriman (1973) AC 584 at 607 given that the acts alleged against the Accused could fairly be regarded as forming part of the same transaction or criminal enterprise. Sully J observed that the decision of the Court of Criminal Appeal in R v Moussad involved a careful examination of the Australian authorities which refer to the principles in Merriman. Sully J concluded that the present case had been framed and particularised as a one count enterprise and that, in this case, as in R v Moussad "what is telling … is the pattern which emerges and makes it plain that there is in existence a fraudulent enterprise … to take the individual acts one by one does not reveal the true overall situation". 330 Sully J concluded (page 13.5): "In my opinion the decision in Moussad (supra), while ever it stands as good law, approves a process of reasoning which, applied to the facts and circumstances as now alleged by the Crown against the applicant, entails that the present duplicity point cannot succeed." 331 I have had regard to the submissions advanced on behalf of the Accused and the Crown on the duplicity point for the purpose of my own independent assessment of the objection. I am satisfied that the present case is characterised appropriately as one involving an alleged course of conduct forming part of the same transaction or criminal enterprise. This is not a case where there is an individual actual loss to the revenue said to flow from each of the rulings or opinions issued. Rather, the fraud involves the risk to the revenue flowing from a course of conduct by the Accused over a period of time. 332 It is clear that the determination whether a charge offends for duplicity involves a question of fact and degree in each case and that this depends upon the particular circumstances of the case: Walsh v Tattersall at 108; Carcosa Pty Limited v Czerwaniw (1977) 93 A Crim R 287 at 296-297; R v Moussad at 383 [61]. 333 Having considered the arguments advanced on behalf of the Accused and the Crown, I am satisfied that the first count is not bad for duplicity. I have reached the same conclusion as Sully J on the duplicity point. 334 I reject the submission that the first count is bad for duplicity.

Parties

Applicant/Plaintiff:

R (Cth)

Respondent/Defendant:

Petroulias

Legislation Cited (5)

Fringe Benefit Tax Assessment Act 1986(Cth)

Crimes Act 1914(Cth)

Service and Execution of Process Act 1992(Cth)

Taxation Administration Act 1953(Cth)

Income Tax Assessment Act 1936(Cth)

Cases Cited (62)

CITATION : R (Cth) v Petroulias (No. 1) [2006] NSWSC 788

Petroulias v Wills (2002) 174 FLR 258 Petroulias v Wills (2003) 138 A Crim R 182 Wills v Petroulias (2003) 58 NSWLR 598 Wills v Petroulias (No. 2) (2003) 58 NSWLR 618 Petroulias v Wills (2004) 56 ATR 608 R v Petroulias (2005) 62 NSWLR 663 Doney v The Queen (1990) 171 CLR 207 R v Smith (1995) 1 VR 10 R v Tolmie (NSW Court of Criminal Appeal, 7 December 1994, unreported) R v Jasper (2003) 139 A Crim R 329 Rogers v The Queen (1994) 181 CLR 251 R v GK (2001) 53 NSWLR 317 R v ELD [2004] NSWCCA 219 R v Edwards (1998) 2 VR 354 R v Georgiou and Harrison (2005) 153 A Crim R 288 R v El Hassan (2001) 126 A Crim R 477 Segal v Waverley Council (2005) 64 NSWLR 177 Indooroopilly Children's Services (Qld) Pty Limited v Commissioner of Taxation (2006) FCA 734 Valentine v Eid (1992) 27 NSWLR 615 Nominal Defendant v Manning (2000) 50 NSWLR 139 R v Towner (1991) 56 A Crim R 221 R v Blair (1985) 1 NSWLR 584 R v Rogers (No. 2) (1992) 29 NSWLR 179 Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27 Walton v Gardiner (1993) 177 CLR 378 Hunter v Chief Constable of the West Midlands Police (1982) AC 529 Williams v Spautz (1992) 174 CLR 509 Smith v The Queen (1994) 181 CLR 338 Jago v District Court (NSW) (1989) 168 CLR 23 R v WRC (2003) 59 NSWLR 273 The Queen v Carroll (2002) 213 CLR 635 R v Chairman of London County Sessions; Ex parte Downes (1953) 37 Cr App R 148 Bowe v The Queen [2001] UKPC 19 Island Maritime Limited v Filipowski [2006] HCA 30 Nudd v The Queen (2006) 80 ALJR 614 CASES CITED : R v Ronen (2004) 62 NSWLR 707 Weiss v The Queen (2005) 80 ALJR 444 Essenbourne Pty Limited v Commissioner of Taxation (2002) 51 ATR 629 Walstern Pty Limited v Commissioner of Taxation (2003) 138 FCR 1 Spotlight Stores Pty Limited v Commissioner of Taxation (2004) 55 ATR 745 Pridecraft Pty Limited v Commissioner of Taxation (2004) 213 ALR 450 Black v The Queen (1993) 179 CLR 44 M v The Queen (1994) 181 CLR 487 MFA v The Queen (2002) 213 CLR 606 Royall v The Queen (1991) 172 CLR 378 R v Franklin (2001) 3 VR 9 Pinkstone v The Queen (2004) 219 CLR 444 R v Iannelli (2003) 56 NSWLR 247 Peters v The Queen (1998) 192 CLR 493 Spies v The Queen (2000) 201 CLR 603 R v Cohen, UK Court of Appeal, 28 July 1992, unreported) Whitehorn v The Queen (1983) 152 CLR 657 Richardson v The Queen (1974) 131 CLR 116 The Queen v Apostilides (1984) 154 CLR 563 R v Kneebone (1999) 47 NSWLR 450 Houston v Crannage (1989) 42 A Crim 446 Barton v The Queen (1980) 147 CLR 75 R v Harry; Ex parte Eastway (1985) 39 SASR 203 Jones v Dunkel (1959) 101 CLR 298 Dyers v The Queen (2002) 210 CLR 285 R v Hamzy (1994) 74 A Crim R 41 R v Moussad (1999) 152 FLR 373 Director of Public Prosecutions v Merriman (1973) AC 584 R v Johnson (2001) 125 A Crim R 564 R v Wilson and Grimwade (1995) 1 VR 163 Lustre Hosiery Ltd v York (1935) 54 CLR 134 Anglim and Cooke v Thomas (1974) VR 363 Director of Public Prosecutions v Parsons (1993) 1 VR 1 R v R (1989) 44 A Crim R 404 Walsh v Tattersall (1996) 188 CLR 77 Carcosa Pty Limited v Czerwaniw (1977) 93 A Crim R 287 Pitcher v Langford (1991) 23 NSWLR 142

(iii) and if, therefore, a refusal to follow the earlier ruling would have the practical result of promoting the notion that a criminal trial is, in significant respects, a lottery. 38 The Crown submitted that a proper understanding of paragraph 77 in R v GK required subparagraphs (i)-(iii) above to be regarded as alternative and not cumulative propositions. It was submitted for the Crown that paragraph 77 could only have sensible application when so read. If a ruling had been made at an earlier trial which had resulted in a verdict which had not been set aside on appeal, then the principles in Rogers v The Queen would have direct application and it would be those principles which would govern any application at a later trial. Sully J referred to this situation expressly at 335 [74] (5) and (7). The proposition contained at 336 74 represented the only qualification to the proposition in 74 which reflected the principles in Rogers v The Queen. 39 The Crown submitted that paragraphs 75-77 of the judgment of Sully J should be understood as applying solely to the circumstances raised by the first question posed to the Court of Criminal Appeal. This question related to circumstances where an application is determined by a trial judge, the trial is aborted and the same application is made to the second trial judge. The Crown submitted that paragraphs 75-77 had direct application to the present case. Viewed in this way, the Crown submitted that I should follow the decisions of Sully J at the first trial even if I were satisfied that a decision was clearly wrong, if there was no proper basis for distinguishing it (for example, because of fresh evidence in the second application) and that a refusal to follow the earlier ruling would have the practical effect of promoting the notion that a criminal trial, in significant respects, a lottery. The Crown submitted that this construction of paragraph 77 must be correct because R v GK was not a case where the first trial had resulted in a verdict which had not been set aside on appeal. It was not a case where the principles in Rogers v The Queen had direct application. In these circumstances, the Crown submitted that it would be a puzzling and superfluous addition to impose a cumulative element involving a requirement that the decision in the earlier trial had occurred where a verdict followed which had not been set aside on appeal. 40 Mr Clelland SC submitted that paragraph 77 ought be taken to mean what it says. An approach is proposed in paragraph 77 which incorporates, as an ingredient, the requirement for an undisturbed verdict following the first trial. Unless this approach is taken, Mr Clelland SC submitted that no sensible meaning can be given to the concept accepted by Sully J at paragraph 74(6) of "the whole slate [being] wiped clean". If the correct approach involves a blank slate from the first trial, Mr Clelland SC submitted that a restricted approach of the type referred to in paragraphs 76 and 77 would have no logical operation. Rather, it was submitted that those paragraphs should be understood as having application only where the earlier trial had resulted in a verdict which had not been set aside on appeal. 41 In this respect, Mr Clelland SC relied upon the formulation of the principle in R v GK by Bell J (Howie and Hislop JJ agreeing) in R v ELD at paragraph 23: "The rulings made by the Judge were as to the admissibility of evidence at the trial before her. After announcing them she remanded the respondent for trial on a future date. When the respondent's trial comes on for hearing it may proceed before another judge. The ruling made by the Judge as to the admission of evidence has not become final as between the Crown and the respondent by the entry of a conviction or an acquittal: Rogers v The Queen (1994) 181 CLR 251; R v GK [2001] NSWCCA 413; 53 NSWLR 317; R v Edwards [1998] 2 VR 354. The judge presiding at the respondent's trial is not bound to adopt evidentiary rulings made at an earlier aborted trial: R v GK per Mason P at [4] and [5] and Sully J at [74]. It is to be noted that Sully J observed that a ruling excluding evidence under s 137 of the Act made at one trial should be followed at a subsequent trial if the earlier trial had resulted in a verdict that had not been set aside on appeal and if there was no proper basis for distinguishing it: at [77]." 42 Reliance was also placed upon the decision of the Court of Criminal Appeal in R v Georgiou and Harrison where Hidden J (Spigelman CJ and Sully J agreeing) said at 296 [39]: "In this Court, Mr Wendler acknowledged that Greg James J was not bound by the ruling of Dowd J because, the verdicts in the first trial having been set aside on appeal, that ruling was not final as between the Crown and the appellant: Rogers , per Deane and Gaudron JJ at 278 - 9; R v GK (2001) 53 NSWLR 317, per Sully J at 335 - 6. Mr Wendler relied upon the more flexible approach in Rogers of Mason CJ, based upon notions of abuse of process and public confidence in the administration of justice. That was not the approach of the other members of the Court. Nevertheless, Greg James J referred to the judgment of the Chief Justice in considering the reasons of Dowd J but, having concluded that Dowd J's decision was 'plainly wrong', determined that public confidence in the administration of justice would not be served by adhering to it. His Honour referred to the review of relevant authority to be found in the judgment of Buddin J, sitting as a trial judge, in R v Pettersen (unrep, 6 June 2002) at [7] - [14]. It was clearly open to his Honour to examine the matter afresh, and no error has been shown in his doing so." 43 In substance, the Crown submitted that, although Sully J did not use the term expressly, the rule of judicial comity (in a form summarised in paragraphs 76 and 77 in R v GK) had application to the process of decision making where application is made at a second trial of a type which was determined at an earlier trial and where there has been no intervening verdict. There was direct authority for this proposition in the context of criminal pre-trial rulings in R v El Hassan (2001) 126 A Crim R 477 where the Court of Criminal Appeal (Howie J, Stein JA and Hidden J agreeing) said at 478 [4]: "Notwithstanding that the judge before whom the trial will next be listed would not strictly be bound to determine any of the issues which were before Judge McGuire in the same way as his Honour did, the present matter gives rise to a discrete question of law and comity between judges of the District Court would generally require that the trial judge not embark upon a further consideration of the matter unless there was a good reason to do so. Further, the question raised by the application is fundamental to the issues that will arise on the trial of the applicant and the defence upon which he seeks to rely. If answered unfavourably to the applicant, it may well have some bearing upon the course that the proceedings take thereafter. In my opinion leave should be granted to the applicant to appeal against his Honour's ruling." 44 The Crown submitted that such an approach was entirely consistent with the application of the rule of comity in proceedings generally. In Segal v Waverley Council (2005) 64 NSWLR 177, the Court of Appeal (Tobias JA, Beazley and Basten JJA agreeing) adverted at 193 to the practice, as a matter of judicial comity, of a judge at first instance following an earlier decision of a judge of co-ordinate jurisdiction. In this respect, Tobias JA said at 193 [57]: "The primary judge stated the relevant principle in [16] of his judgment. The most cited statement of the principle is that of Holland J in Michael Realty Pty Limited v Carr [1975] 2 NSWLR 812 where at 820 his Honour said (omitting citations): 'I do not think that I am relieved by the decision of Needham J of my duty to bring my own judgment to bear on the point in question. There is no rule of law which binds a judge to abide by the decision of another judge of co-ordinate jurisdiction, but a judge of first instance will, as a matter of judicial comity, usually follow the decision of another judge of first instance in the same jurisdiction, unless convinced that the judgment was wrong'." 45 The principle of judicial comity is well recognised and is applied as between judges of the same or co-ordinate jurisdictions. The relevant authorities are summarised by Collier J in Indooroopilly Children's Services (Qld) Pty Limited v Commissioner of Taxation (2006) FCA 734 at paragraphs 49, 52, a decision upon which the Accused relies for other purposes in the present applications. In Valentine v Eid (1992) 27 NSWLR 615, Grove J held that the Local Court is not bound by a decision of the District Court in criminal proceedings, but that the principle of comity applies. His Honour said at 622: "I emphasise that I am not suggesting that a Local Court may not be considerably advantaged by reference to a relevant judgment of the District Court and I would expect that, except on rare occasions, such judgment would be compellingly persuasive and I hold no more than that a binding precedent has not been created. I refer to Lord Goddard's statement of principle in Police Authority for Huddersfield v Watson (1947) KB 842 that a judge of first instance of the High Court will follow a decision of another judge of first instance, unless he is convinced that that judgment is wrong, as a matter of judicial comity - a principle now extended to apply to divisional courts in Britain: R v Greater Manchester Coroner; Ex Parte Tal [1985] QB 67 at 81. As comity is required between courts of equal rank, co-ordinate decision must also exist between the Local Court and District Court and a magistrate should not depart from following any decision of the District Court unless after earnest consideration and for good reason he or she became convinced that the decision was wrong." 46 The Crown referred to the statement of Mason P, with respect to civil interlocutory applications, in Nominal Defendant v Manning (2000) 50 NSWLR 139 at 142 [10]: "A long line of authority attests to the practice of courts hearing interlocutory applications on matters of substance declining to allow a second contested run at the target where the only change of circumstances is an applicant coming forward with new evidence. …" 47 The Crown submitted that, in effect, I was being asked to sit on appeal from a number of the decisions of Sully J given at the first trial and, in a sense, from the decision of the Court of Criminal Appeal of 11 March 2005. Further, it was submitted that Sully J had the advantage of considering the various applications which were the subject of judgments during the trial having heard the evidence unfold over several months, and with an understanding of the totality of the evidence adduced at the trial. The Crown submitted that this was an advantage which I did not have at the hearing of the present applications. According to this submission, the Crown's construction of the decision in R v GK supported an approach whereby a confined test might be adopted to the resolution of the present applications. It was submitted by the Crown that Mr Clelland SC should be addressing me as to a proper basis for distinguishing the decisions of Sully J either because there are different circumstances or there is fresh evidence (PT159.19, 2006). 48 Mr Clelland SC submitted that the comity principle had no application in the circumstances of this case (PT164-165, 2006). He submitted that the comity principle usually arose where the first judge gave a final decision and a second judge was invited to depart from the decision of the first judge. He submitted that the comity principle may have application to a discrete question of law (as in R v El Hassan), but that was not the issue under consideration in the present applications. Reliance was placed upon the statement of Priestley JA in R v Towner (1991) 56 A Crim R 221 at 222 where his Honour said: "Some of the trial judge's rulings were favourable to the appellant, in particular, some confessional material was excluded by the trial judge in exercise of his discretion. At any further trial, if this material is again tendered by the prosecution, it will be for the trial judge to consider afresh, in light of all the material available in the new trial, whether it should be admitted."

General Principles of Abuse of Process 55 The term "abuse of the process of the court" is used in many senses: Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27 at paragraph 1. What amounts to abuse of court process is insusceptible of a formulation comprising closed categories: Batistatos at paragraph 9. 56 In Walton v Gardiner at 393, Mason CJ, Deane and Dawson JJ accepted as correct a passage in Hunter v Chief Constable of the West Midlands Police (1982) AC 529 at 536 in which Lord Diplock spoke of: "… the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people." 57 A distinction has been drawn between the policy considerations affecting abuse of process in criminal proceedings and civil proceedings. In Williams v Spautz (1992) 174 CLR 509 at 520, Mason CJ, Dawson, Toohey and McHugh JJ identified two fundamental policy considerations affecting abuse of process in criminal proceedings: "The first is that the public interest in the administration of justice requires that the court protect its ability to function as a court of law by ensuring that its processes are used fairly by State and citizen alike. The second is that, unless the court protects its ability so to function in that way, its failure will lead to an erosion of public confidence by reason of concern that the court's processes may lend themselves to oppression and injustice." 58 It has been emphasised that the power to stay permanently a criminal prosecution will be used only in most exceptional circumstances: Jago v District Court (NSW) (1989) 168 CLR 23 at 31 (Mason CJ). If permanent stay orders were to become common place, it would not be long before courts would forfeit public confidence: Jago at 50 (Brennan J). The power is exercisable only in exceptional cases or sparingly and with the utmost caution: Jago at 76 (Gaudron J). 59 In R v WRC (2003) 59 NSWLR 273, Spigelman CJ (Dunford and Hidden JJ agreeing) said at 282 [55]-[56]: "A permanent stay of criminal proceedings is a wholly exceptional intervention into the processes of the criminal law. The public interest in ensuring that persons charged with crimes are tried is entitled to significant weight in the necessary balancing process. (See, for example, Jago (at 30 and 49-50).) Because of this, as Mason CJ said in Jago (at 34): 'a permanent stay should be ordered only in an extreme case …'." 60 The onus of satisfying the Court that there is an abuse of process lies upon the party alleging it and the onus is a heavy one: Williams v Spautz at 529. It is the defence that assumes the high burden of seeking to establish irredeemable abuse of process so as to preclude a fair trial: R v Petroulias (2005) 62 NSWLR 663 at 688 [103]-[104]. 61 The Accused submits that the approach to be taken in determining the broader abuse of process ground involves the weighing process referred to by Mason CJ, Deane and Dawson JJ in Walton v Gardiner at 395-396: "As was pointed out in Jago , the question whether criminal proceedings should be permanently stayed on abuse of process grounds falls to be determined by a weighing process involving a subjective balancing of a variety of factors and considerations. Among those factors and considerations are the requirements of fairness to the accused, the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime, and the need to maintain public confidence in the administration of justice." 62 The circumstances that may constitute oppression or an abuse of process are various and the discretionary considerations that may be relevant in dealing with them cannot be rigidly confined: The Queen v Carroll (2002) 213 CLR 635 at 650-651 [47] (Gleeson CJ and Hayne J). 63 The jurisdiction to stay proceedings as an abuse of process is wide ranging, but not without limits. It has been said that the discretion cannot be exercised to stop proceedings because the evidence against the accused is weak or because the Bench disapproves of the prosecution: R V Chairman of London County Sessions; Ex parte Downes (1953) 37 Cr App R 148 at 152; Pattenden, Judicial Discretion and Criminal Litigation, 2nd edn, 1990, Clarendon Press, page 33. 64 The fact that the jury could not agree at the first trial and that the Crown wishes to proceed by way of retrial is not an uncommon event in the criminal justice system. It is not, of itself, capable of constituting an abuse of process: Bowe v The Queen [2001] UKPC 19. 65 It may be taken that the Commonwealth Director of Public Prosecutions has exercised his prosecutorial discretion in determining that retrial should proceed on all three counts contained in the indictment. There are published guidelines for the making of decisions contained in the Prosecution Policy of the Commonwealth. Paragraph 5.23 of the Prosecution Policy makes express provision for the Director to have regard to a range of factors where a jury has disagreed at a trial and consideration is given to whether a retrial should proceed. In Island Maritime Limited v Filipowski, Kirby J at paragraph 81 adverted to the significance of prosecutorial discretion in explaining why a stay of criminal proceedings was most exceptional: "Generally speaking, courts exist to quell the controversies brought to them by the parties. Their powers, of their own initiative, to institute or terminate proceedings are exceptional. Such powers are kept in firm check. Courts in this country are not, generally speaking, inquisitors. This is true of civil process. With even greater emphasis, it is true of criminal process. There, judges are repeatedly enjoined to respect the prosecutor's independent discretions. Ordinarily, those discretions, if made within power, are exempt from judicial superintendence or interference. They generally belong, in our system of government, to the Executive, its agencies and officials, not to the judiciary which ordinarily keeps its distance from such decisions, just as it demands independence in the discharge of its own functions. These are not absolute rules. But in Australia these cases (both in criminal and civil proceedings) are acknowledged as exceptional."

The reluctance of the courts to interfere with the exercise of prosecutorial discretion was emphasised in R v Smith at 28-29, 41-42 in the context of a stay application based upon the foredoomed to fail ground. 66 The crimes alleged against the Accused are serious. There is a high public interest in having the allegations disposed of, one way or the other, on the merits: Island Maritime Limited v Filipowski [2006] HCA 30 at paragraph 32 per Gleeson CJ, Heydon and Crennan JJ. 67 The authorities referred to above point to no closed categories of circumstances which may constitute an abuse of process. As will be seen, emphasis is placed by the Accused in the present case upon the likely length of a retrial on all three counts (as opposed to a retrial on the second and third counts only), the complexity of such a retrial given the manner in which the Crown has advanced its case (and proposes once again to advance its case) on the deprivation element, the public and private cost to be expended in such a protracted trial and the emotional stress to be placed on the Accused and Crown witnesses to be called in support of the first count at the retrial. 68 In the present case, the Accused submits that a combination of factors including the manner in which the Crown presented its case, and allegedly declined to take up an approach suggested by the majority in the Court of Criminal Appeal in March 2005, taken with alleged erroneous directions to the jury has deprived the Accused of a substantial prospect of acquittal on the first count at the trial. It will be necessary to trace events through the judgments of the Court of Appeal and the Court of Criminal Appeal, the evidence adduced by the Crown at the trial on the first count, rulings of the trial judge in declining the application for a directed verdict of acquittal and directions given by Sully J to the jury on this count. 69 To the extent that the Accused's argument refers to hardship and stress experienced by him as a result of the continuation of these proceedings, it is pertinent to note that factors of this type, although not irrelevant to the weighing process to be undertaken, count for little of themselves. It is to be expected that all accused persons will experience stress as a result of pending criminal proceedings. In Island Maritime Limited v Filipowski, Callinan J at paragraphs 96-97 observed that the appellants had experienced anxiety, inconvenience, expense and the pain of proceedings, but concluded that abuse of process had not been demonstrated. 70 In due course, I will apply these principles to the particular factors relied upon by the Accused in support of the broader abuse of process ground. For the moment, it is sufficient to observe that the Accused bears a heavy onus to demonstrate why the due process of law should not take place in this case with respect to the three counts contained in the indictment.

(2002) 174 FLR 258

(2003) 58 NSWLR 598

(2003) 58 NSWLR 618

(2005) 62 NSWLR 663

(1990) 171 CLR 207

(1995) 1 VR 10

(1994) 181 CLR 251

(2001) 53 NSWLR 317

(1998) 2 VR 354

(2005) 64 NSWLR 177

(1992) 27 NSWLR 615

(2000) 50 NSWLR 139

(1985) 1 NSWLR 584

(1992) 29 NSWLR 179

(1993) 177 CLR 378

(1992) 174 CLR 509

(1994) 181 CLR 338

(1989) 168 CLR 23

(2003) 59 NSWLR 273

(2002) 213 CLR 635

(2006) 80 ALJR 614

(2004) 62 NSWLR 707

(2005) 80 ALJR 444

(2003) 138 FCR 1

(2004) 213 ALR 450

(1993) 179 CLR 44

(1994) 181 CLR 487

(2002) 213 CLR 606

(1991) 172 CLR 378

(2001) 3 VR 9

(2004) 219 CLR 444

(2003) 56 NSWLR 247

(1998) 192 CLR 493

(2000) 201 CLR 603

(1983) 152 CLR 657

(1974) 131 CLR 116

(1984) 154 CLR 563

(1999) 47 NSWLR 450

(1980) 147 CLR 75

(1985) 39 SASR 203

(1959) 101 CLR 298

(2002) 210 CLR 285

(1999) 152 FLR 373

(1995) 1 VR 163

(1935) 54 CLR 134

(1993) 1 VR 1

(1996) 188 CLR 77

(1991) 23 NSWLR 142

(1935) 52 CLR 713

(1949) 78 CLR 62

(1964) 112 CLR 125

(1984) 153 CLR 521

(1987) 163 CLR 454

(1986) 42 SASR 59

(2003) 77 ALJR 1047

(1935) 54 CLR 314

[2002] NSWSC 1190