R v Pratten

Supreme Court of NSW|2014-12-05|Before: Rothman J

Judgment 1HIS HONOUR: By Motion, notice of which was filed and served on 24 October 2014, the Crown moves that the trial judge assigned for the re-trial in a criminal prosecution of Timothy Charles Pratten, to commence on 18 May 2015, be a judge of the Court other than me. I was the trial judge who presided over the first trial of Mr Pratten. 2The unusual nature of the Motion is occasioned by the manner in which the matter has been raised with the parties. Ordinarily a motion or an application for the disqualification of a trial judge occurs at the time that a matter has been allocated to the trial judge and application is made on one of the well-known bases. Because I conducted the first trial of Mr Pratten, and because of the not uncomplicated financial nature of the evidence in the proceedings, the arraignments judge, whose task it was to list the matter before the judges of the Court, enquired of the parties as to whether there was any difficulty in relisting the matter before the original trial judge. The parties were given an opportunity to consider their position. 3The Motion summarised above and with which I am now dealing was a result of that enquiry. The arraignments judge was unavailable at the time that the Motion came on for hearing and the matter was listed before his Honour, the Chief Judge at Common Law, who decided, on application of the accused, that it was inappropriate for any judge of the Court, other than the trial judge who was sought to be disqualified, to determine the issue. That judgment was, largely, based upon the comments of the Court of Appeal in Wentworth v Graham [2003] NSWCA 104. That judgment of the Court of Appeal determined that an application for disqualification of a judge should be heard by the judge who is sought to be disqualified. The difficulty with that approach, in the above mentioned circumstances, is that the judge sought to be disqualified, in this case, has not been allocated the substantive hearing. It is at least arguable that the comments in Wentworth v Graham are inapplicable to the current situation. Nothing turns on that aspect presently. 4I have been allocated the application and I am required to deal with it. 5The foregoing is not intended as a criticism of the applicant on the Motion, or the respondent, for agitating the disqualification issue or for requiring it to be heard by me respectively. 6It is necessary to recite some factual context and the history of the litigation in these proceedings. The respondent to the Motion is an accused charged by the Commonwealth Director of Public Prosecutions (CDPP) with seven counts of an offence of acting contrary to s 134.2(1) of the Criminal Code Act 1995 (Cth) (the Code). That is he was a person who, by a deception, dishonestly obtained a financial advantage from the Commonwealth in that he knowingly understated his ordinary assessable income thereby avoiding becoming liable to the payment of higher amounts of income tax and did so dishonestly and thereby obtained a financial advantage. 7The seven contraventions related to the filing of income tax returns for each of the years ending 30 June 2003 through to 30 June 2009. The allegation is that a total of $5,009,721 was understated as income over the whole of that period. It is unnecessary for present purposes to recite the amounts said to be understated for each of the years in question. 8Not including the pre-trial interlocutory issues that were determined, the first trial was heard over a three month period ending 13 June 2012. Mr Pratten was convicted. 9Mr Pratten then launched a collateral attack on the investigation process from which the prosecutions derived and on the decision to launch the prosecutions, challenging the conduct of the Federal Commissioner of Taxation, the Commissioner of the Australian Federal Police and the Commonwealth Director of Public Prosecutions. As a consequence of the collateral attack, including the possible effect of sentencing in rendering such an attack nugatory, and the appeal from my judgment therein, which appeal was withdrawn in December 2013, sentencing did not occur until 31 March 2014. 10On 31 March 2014, I sentenced Mr Pratten. The terms of that sentence are currently irrelevant. However, the findings of fact in the sentence proceedings form the basis of the application by the CDPP. 11From the conviction, Mr Pratten appealed to the Court of Criminal Appeal (or sought leave to appeal), while the CDPP appealed against the sentence imposed. 12During the course of the appeal, a number of interlocutory judgments and some rulings were considered by the Court of Criminal Appeal. Each of the grounds of appeal, save one, was dismissed. The successful ground of appeal related to the failure to give a unanimity direction to the verdict, namely, a direction that the jury was required to be unanimous on the facts (or a fact) and an item of income not declared that gave rise to an understatement in the tax returns and gave rise to a financial advantage. 13As a consequence of the finding of the Court of Criminal Appeal, the convictions were quashed and a new trial ordered. It is my capacity to preside over the new trial that is the subject of the Motion now before the Court.

Principles on Disqualification 14Even though the application before the Court is not strictly a disqualification application, but rather an application that the matter not be allocated to a particular judicial officer, the principles applicable to the determination of the issue are similar or identical. I qualify the identicality of the principles only because, given that the trial has not already been allocated to me, the countervailing consideration that a judicial officer is required to hear and determine that which the judicial officer has been allocated may have less direct significance in the determination of this application. 15On the other hand, the circumstance that the administration of justice is affected also by allowing parties to "judge shop" remains relevant. I will determine the matter on the basis of the same principles that apply to a disqualification application. 16The principles in such an application are easily stated and often difficult to apply. The application that is made before the Court in this matter is an application for apprehended bias by way of pre-judgment and relies upon findings of fact made during the course of the Sentencing Remarks. Application of the principles relating to apprehension of bias differs a little in the case of pre-judgment than it does in the case of other perceived interests or a conflict in interest. Partly, this is due to the fact that pre-judgment, because of a prior activity as a judge, involves a publicly available comment and no possibility of unknown or undisclosed information. 17The principles relating to the apprehension of bias admit the possibility of human frailty: Ebner v Official Trustee and Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 345 [8], per Gleeson CJ, McHugh, Gummow and Hayne JJ. 18In relation to the issues of pre-judgment, the High Court summarised the principles in its judgment in Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488, when it said: "[11] It is not contended that Anderson J was affected by actual bias. It has been established by a series of decisions of this court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide." 19As the Court of Appeal made clear in Australian National Industries Ltd v Spedley Securities Ltd (in Liq) (1992) 26 NSWLR 411 at 418 and following, the purpose of the rules on bias and apprehended bias is to ensure the appearance of impartiality and independent assessment in accordance with the oath taken by judicial officers as a fundamental norm of the operation of the rule of law and the integrity of the judicial system. Importantly, as can be seen from the passage recited from Johnson v Johnson, when it comes to apprehended bias in the form of pre-judgment, the issue turns on the apprehension that the judge "might not bring an impartial mind and unprejudiced mind" to the issues in question before her or him: see also Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 at 293-294; Re Watson; Ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248 at 258-263. 20In ANI v Spedley, Kirby P, at 417-418, said: "It is no disrespect to the judges who have ventured their opinions upon the resolution of problems such as this to identify a certain ambivalence in the expression of the tests which are to be applied. One decision upholds the asserted apprehension of bias. The next dismisses it. One decision asserts the duty of the judicial officer to sit and not disqualify himself or herself. Thenext reverses a decision of a judge to sit on the ground of apprehended bias. As in this case, different judges considering the same facts reach different conclusions. To say this merely acknowledges the unique features of each case; the differing composition of the courts and tribunals concerned; theinescapably different predilection and sensitivities of judges seeking to interpret the response of the hypothetical reasonable or fair-minded observer; and the ebb and flow of judicial opinion over time. There is no final or ultimate formula which can be easily applied to dispose of cases such as the present. In each case, the judicial officers concerned, whether at first instance or on appeal, must apply the well-worn words. But in the end, the response which each gives may be more instinctive and less deductive than the reasoning of the courts has tended to suggest. That words can be found in the authorities, even in recent times, toencourage a judge said by reason of pre-judgment to be disqualified for apprehended bias, to stay with the case cannot be doubted. The following is a representative sample of the injunctions that are typically called to the judge's attention: (a) Judges by their training and experience are able to bring a detached mind to the task in hand: see Re The Queen and His Honour Judge Leckie; Ex parte Felman (1977) 52 ALJR 155 at 160; 18 ALR 93 at 102-103; (b) Judges should not too readily accede to applications fordisqualification, otherwise litigants may succeed in effectively influencing the choice of the judge in their own cause: see Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352; Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (1986) 6 NSWLR 272 at 276; Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45 at 49; (c) Judges should resist being driven from their courts by the conduct or assertion of parties, including assertions of actual or imputed bias: see Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [No 4] (1986) 6 NSWLR 674 at 689; (d) Judges in the course of litigation, in exchanges with parties and their representatives or in interlocutory decisions may express their preliminary views with vigour but this should not necessitate their disqualification: seeGalea v Galea (1990) 19 NSWLR 263 at 278f; Fitzgerald (at 49); Re Keely; Ex parte Ansett Transport Industries (Operations) Pty Ltd (1990) 64 ALJR 495; 94 ALR 1; and (e) Judges should perform the duties of their office which, of their nature, will often be painful and unrewarding. They should do so with courage and decisiveness avoiding the relinquishment of their duties which will thennecessarily fall to another judicial officer for whom the task may be no more congenial. Such relinquishment will also involve costs delay and inconvenience to parties who are otherwise entitled to have the decision of thejudicial officer appointed to their case: see Re JRL; Ex parte CJL (at 352); Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78." 21As has been said on a number of occasions, the principle of impartiality is fundamental to the administration of justice and the appearance of impartiality is fundamental not only to the parties, but to the public and the integrity of the Court and the justice system. It is fundamental to the rule of law. While the easier option for a judge dealing with an application for disqualification, or for a listing judge dealing with a motion that a particular judge not be allocated a matter on the same basis, is for another judge to be allocated the matter, it is just as important to the administration of justice that parties not have the ability to pick and choose the judges who sit on their case. 22Thus, where the application of the principles relating to apprehension of bias do not disqualify a judge from sitting, the judge, if subject to an application, must continue to preside and the listing judge should allocate the matter in accordance with the ordinary principles, not excluding the judge in question: Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352; Re Polites; Ex parte Hoyts Corporation Pty Ltd [1991] HCA 25; (1991) 173 CLR 78; Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (No 4) (1986) 6 NSWLR 674 at 689. 23Nevertheless, a judge ought not to be too strict where fine lines are being drawn. In Ebner, the Court remarked: "[19] Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case. [20] This is not to say that it is improper for a judge to decline to sit unless the judge has affirmatively concluded that he or she is disqualified. In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification. However, if the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench. That would be intolerable." 24In British American Tobacco Australia Services v Laurie [2011] HCA 2; (2011) 242 CLR 283, the High Court once more had occasioned to deal with the issue of apprehension of bias. The determination of the Chief Justice, French CJ, was in dissent but his reasons for judgment, once more, summarised the principles to be applied, particularly in pre-judgment issues. His Honour, the Chief Justice said: "[42] A claim of apprehended bias succeeded where a judge in interlocutory proceedings in the Family Court said that he would not accept the evidence of either the husband or the wife unless it were corroborated. In that case, R v Watson; Ex parte Armstrong, Angliss was quoted by Barwick CJ, Gibbs, Stephen and Mason JJ. Their Honours essayed a "fair-minded person" test: It is of fundamental importance that the public should have confidence in the administration of justice. If fair-minded people reasonably apprehend or suspect that the tribunal has prejudged the case, they cannot have confidence in the decision. The judge's statement in Watson precluded the possibility of his acceptance of the uncorroborated evidence of either party on its merits. That situation differs materially from a case such as the present in which a judge makes an interlocutory finding expressly acknowledging the possibility that there might be a different outcome on different evidence or after a full trial. [43] Watson was applied in Livesey v New South Wales Bar Assn and the principle restated thus: a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it. The Court invoked the "reasonable observer", also designated as the "fair-minded observer", who was presumed to approach the matter on the basis that a judge would ordinarily act so as to ensure both the appearance and the substance of fairness and impartiality. The Court acknowledged the impossibility of any inflexible rule and the need to determine each case by reference to its particular circumstances. [44] The fact that a judge has expressed a strongly worded view at the outset of a hearing does not prevent characterisation of that view as provisional. In such a case the reasonable apprehension of bias must be "firmly established" before prohibition will issue. Sometimes the line of judgment is "ill-defined". On the other hand, a gratuitous statement in a judgment given in one case adverse to a person not involved in that case against whom a prosecution was pending, was sufficient to disqualify the judge who made the statement from sitting on an appeal arising out of the prosecution. [45] The scrutiny required of claims of bias based on prior findings by a decision-maker was emphasised, in relation to administrative decisions, by Gaudron and McHugh JJ in Laws v Australian Broadcasting Tribunal. Their Honours, after referring to R v Australian Stevedoring Industry Board, Angliss and Shaw, said: When suspected prejudgment of an issue is relied upon to ground the disqualification of a decision-maker, what must be firmly established is a reasonable fear that the decision-maker's mind is so prejudiced in favour of a conclusion already formed that he or she will not alter that conclusion irrespective of the evidence or arguments presented to him or her. (emphasis added) The requirement that an apprehension of bias, based on judicial conduct, be "firmly established" is consistent with the most recent decisions of this Court and gives content to the requirement that an apprehension of bias, in that class of case, be reasonable." 25It is those principles that should be applied to the determination of the issues in these proceedings. 26As the High Court said in Minister for Immigration and Multicultural Affairs v Jia [2001] HCA 17; (2001) 205 CLR 507: "[72] The test which was applied both by French J and by the Full Court was orthodox. It accords with the decisions of this Court in Laws v Australian Broadcasting Tribunal and Johnson v Johnson. The state of mind described as bias in the form of prejudgment is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion. This preliminary argument should be rejected."

Consideration 27The CDPP relies on a number of findings, as earlier stated, in the Remarks on Sentence. It should be made clear that the accused, Mr Pratten, the respondent to this motion, did not give evidence before the Court in the first trial, nor in these proceedings. Further, none of the findings of fact depend upon any finding of credit or contest in evidence. Ultimately, the findings of fact depend upon what, if any, inferences may arise from largely uncontested evidence adduced during the course of the trial and on sentence. 28Further, it is not suggested in this application, or in these proceedings, that the findings of fact depend upon matters of credit, reliability or the contest of witnesses. The conclusions upon which the CDPP relies are contained in [18], [24], [25], [26], [33], [39] and [43] of the Remarks on Sentence. While the Remarks on Sentence are publicly available, it is appropriate that I recite those paragraphs. They are in the following terms: "[18] I do not accept as proved, either on the balance of probabilities or beyond reasonable doubt, that Mr Pratten was a principal of CPI. Any evidence suggesting that proposition, whether directly or indirectly, is weak and is not accepted. Of course the evidence raises a significant suspicion of that fact, but it does not allow the Court to travel beyond suspicion. ... [24] To complicate matters further, Mr Pratten owned or controlled various companies, and together with his daughters, was a beneficiary of a family trust. One of the companies was the trustee, of the family trust. Mr Pratten's business structure (or structures) was (or were) not uncomplicated. The overwhelming impression from the trial, and tracing the payments of money, is that Mr Pratten was insufficiently strict, or particular, in differentiating between transactions for each of the different entities, and also between the entities and his own personal affairs. [25] The Crown did not adduce evidence that any of the companies owned or controlled by Mr Pratten did not pay sufficient tax. Further, the Crown did not adduce any evidence that the Pratten Family Trust did not pay sufficient tax. Moreover, the Crown did not prove that the amounts by which it alleged Mr Pratten understated his income were not declared as income by, or otherwise on the books of, one or other of Mr Pratten's related entities (that is, the aforesaid companies or trust). If it were possible that all of the income was declared by one of those entities, or a combination of them, there would seem to be an hypothesis consistent with innocence of these charges. ... [26] Nevertheless, Mr Pratten has been found guilty of the offences, and I am bound by that finding. Therefore I am required to sentence on the basis that for each relevant year some amounts, known to be income, were deliberately omitted from the tax returns by Mr Pratten, thereby dishonestly obtaining a financial advantage from the Commonwealth by deception. ... [33] Whatever the ultimate amount, the Crown has not proved, beyond reasonable doubt, that Mr Pratten did any more than implement a scheme, planned and organised by Vanuatu accountants. The amounts, however, are large. ... [39] The net result is that the Crown allegations include payments to third parties and amounts that have not been proved to be anything other than loans. Neither category has been proved by the Crown to be income in the hands of Mr Pratten, that should have been (or, more accurately, that he knew should have been) declared as his income. ... [43] As earlier stated, I do not consider that Mr Pratten was other than an implementer of a scheme presented to him. Certainly the contrary has not been proved by the Crown to the requisite standard. Nevertheless, the scheme was implemented over a number of years, requiring three separate episodes of dishonest acts. The nature and quality of the acts did not differ substantially, and again, as has been stated, this was one course of continuing conduct, implemented on three occasions for seven years' returns." 29It is said, and I accept, that the evidence in the second trial will be similar to or identical to the evidence in the first trial. The CDPP, in its written submissions to the Court of Criminal Appeal relating to the sentence appeal, criticises some or all of those findings. The sentence appeal was not determined because the matter was sent back for retrial. However, in the course of its judgment on the conviction appeal, the Court of Appeal, itself, arrived at certain factual conclusions, some of which deal with the issues referred to in the Sentencing Remarks. 30Ultimately, the CDPP submission is one that recites certain findings of fact based on the material before the Court at the first trial and the manner in which it was presented in the course of that trial and on sentence. It is not suggested, as earlier stated, that any adverse view has been taken of any witness in any aspect of the trial. 31In those circumstances, there is nothing in the findings on sentence that suggests that the Court, as presently constituted, if the matter were allocated to me for hearing, would bring anything other than "an impartial and unprejudiced mind" to the resolution of the issues put before me. 32Ultimately, if Mr Pratten were convicted in his second trial (and the conviction withstands appeal) and findings are made by me on sentence, nothing has been put that would suggest those findings would be made other than on the basis of the evidence before the Court. If, in the fullness of time, any such finding is incorrect, its correction is a matter for appeal. Nevertheless, nothing in the sentence appeal suggests a predisposition to the determination of issues that are relevant to the trial and relevant to the sentencing proceedings on anything or a determination on a basis other than the evidence adduced during the course of each. 33It seems that the application for disqualification, in reality, relates solely to the process of sentencing, should Mr Pratten be convicted. Nothing in the first sentence remarks and nothing in the proceedings in the Court of Criminal Appeal or otherwise gives rise to an apprehension that any such issue will be determined otherwise than on the basis of the evidence adduced. 34At one stage, it was submitted that the Court, as presently constituted, would be in a "lose-lose" situation, in that if the findings made on sentence were inconsistent with earlier findings or consistent with earlier findings, they would be open to criticism on the basis of pre-judgment or inconsistency. Ultimately, in cases such as these, Remarks on Sentence will be open to criticism legitimately on the basis that those remarks do not reflect accurately the facts before the Court or otherwise fail to implement the principles applicable to the exercise of the sentencing discretion. Whether those remarks are consistent or inconsistent with earlier Remarks on Sentence or earlier conclusions is irrelevant to the process. The only relevant issue is whether any conclusion ultimately reached, should the matter proceed to that stage, would reflect the facts adduced in evidence. 35In all of the circumstances, I do not consider that the principles on disqualification associated with apprehended bias arising from pre-judgment have been satisfied. Nor do those principles require that the matter not be allocated to me for hearing or for the purpose of presiding over the trial. Ultimately, to the extent that there is one or more guilty verdicts, the principles applied to the current circumstances do not require that I should be disqualified from hearing and determining the sentencing exercise and the Motion is dismissed. The foregoing does not mean that the matter will be allocated to me; such an allocation is a matter for the Court's administration.

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