R v Pratten

EX TEMPORE Judgment HIS HONOUR: The accused applies to discharge the jury. I have decided not to do so. First, I comment that the application before the Court is for the discharge of the jury on the basis that the Crown has essentially altered its case and the application relates specifically to the first five, possibly six, relevant transactions, each of which evidences the purchase of a farm property called Skallett registered in the name of a company incorporated in Vanuatu, Pacific Property Investments Limited (PPI). All of those transactions relate to count 1 that between 1 July 2002 and 30 June 2003 the accused dishonestly obtained a financial advantage from the Commonwealth by failing to declare income in his tax returns. The relevance of those first five transactions is that they occur, on the evidence that the Crown seeks to have the jury accept, on 29 July 2002. The sixth transaction that may be affected occurred on 28 October 2002. The accused relies upon a series of documents contained in Exhibit F on the voir dire to which I have been taken and upon evidence adduced through Mr Greer, an accountant, relating to transactions that occurred prior to the financial year commencing 1 July 2002 and to which count 1 relates. The essence of the matter is that a number of comments made by the Crown either in the statement of its case, or in the first trial, or in answer to a request for further and better particulars in relation to this trial, have identified certain monies from Vanuatu as monies received from an insurance company based in Vanuatu. This insurance company was originally called Rural & General Insurance International Limited (RGII) and later altered its name and became Commercial Pacific Limited, but it is the same company and I will refer to it as the Vanuatu Insurance Company. It is necessary to set out some background. As a result of alterations to the legislative scheme regulating the insurance industry that occurred following the collapse of HIH Insurance, requirements were placed on insurance companies operating in Australia that precluded the accused's insurance company from operating in Australia. As a consequence, it seems, the Vanuatu Insurance Company was established and Mr Pratten operated a broking company, Rural & General Insurance Broking (RGIB), the underwriter of which was the Vanuatu Insurance Company. As a consequence of that operation, premiums received in Australia by RGIB were paid into trust accounts in Vanuatu, seemingly on behalf of the Vanuatu Insurance Company. The Crown has alleged that those monies held in trusts, which were operated by two accounting firms sequentially, were used either to pay monies directly to the accused or to pay monies at the direction of the accused for his benefit. It is those monies that are alleged to be the income of the accused that was not declared by him and, allegedly, gave rise to the dishonest obtaining of a financial advantage by deception. The Crown says those monies are income and the accused knew they were income and knew that they were required to be declared in the relevant income tax years. The reliance by the Crown on the transfer of funds from the broking company, RGIB, to the trust accounts of the Vanuatu Insurance Company and from those trust accounts to Mr Pratten or for his benefit was a significant, if not fundamental, aspect of the case as it was conducted previously. The Crown also placed reliance upon the allegation that the accused performed work for the Vanuatu Insurance Company and treated the Vanuatu Insurance Company as his own. The accused, by an analysis of the fund transfers and by adducing evidence, has demonstrated, it seems to me, that the fund transfers for the purpose of purchasing the farm property Skallett, to which I have earlier referred, occurred at a point in time prior to the incorporation in Vanuatu of the Vanuatu Insurance Company. As a consequence, the accused seeks to use those fund transfers as evidence to suggest that the Crown case theory and the basis for the proposition that these funds all came to Mr Pratten as income are flawed, namely, that there are hypotheses inconsistent with that theory and which may, as a consequence, be inconsistent with guilt of the charges laid, and that therefore the jury ought not convict and indeed cannot convict. During the course of this trial, the Crown has adduced further evidence, which evidence was before the Court during the previous trial, that the monies used for the purchase of Skallett were monies held in the same trust accounts in Vanuatu at a point in time prior to the incorporation of the Vanuatu Insurance Company and that those monies relate to a loan of approximately $500,000 to a company controlled by the accused, Griffith Narrandera Primary Property Developments Ltd (GNPPD). The Crown alleges that those monies were then transferred from the trust account and utilised for the purchase of Skallett by PPI, a company the Crown says was also controlled by the accused and therefore, the Crown alleges, also used for the benefit of the accused. Important in all of this is the actual charge and how it was the Crown put its case. The particulars of the Crown case in respect of count 1, to which all of these matters relate, is set out in the Crown Case Statement of 27 May 2011. I shall not refer to all of that statement, but at paragraph 79 the Crown refers to an amount of $1,068,724, being the income that was not declared during the relevant financial year from 1 July 2002 to 30 June 2003. That amount was made up of $389,898 received into Mr Pratten's personal bank account between 7 January 2003 and 6 June 2003. A further $678,826 was paid from the trust account (VITCO) to third parties, predominantly for the purchase of what I have referred to as Skallett by PPI. Thus, from the outset, the Crown particularised its case as Mr Pratten receiving income, which comprised of payments to third parties on behalf of the accused or payments to companies owned or controlled by the accused. It does not seem on the material before me that the Crown confined its case to the proposition that the income was received exclusively from the Vanuatu Insurance Company. Nevertheless, I accept that the accused may have understood the Crown case as so confined. The difficulty is that even if the Crown case were confined to transfers from the Vanuatu Insurance Company, the Crown is entitled, in order to persuade the jury that the five payments in question are not inconsistent with the remainder of the Crown case, to show that those five payments in question were also payments made at the direction of the accused and for his benefit. That is not coincidence or tendency evidence; it is simply a means of undermining the submission that might be made by the defence that the five payments do not fit the majority of the Crown case and are inconsistent with guilt otherwise proved. Loans relating to GNPPD are generally not directly relevant to these charges. However, they become relevant if the GNPPD monies were to be used at the direction of the accused and for his benefit, such as to bring them within the particulars of the Crown case as outlined in the Crown Case Statement and otherwise. There are two further aspects to this application for discharge of jury with which I must deal. First, it is not appropriate at this stage, and given the time that has now elapsed into the trial, to discharge the jury without very good reason. That reason would certainly include any unfairness to the accused that was unable to be remedied. Secondly, there is a difference between an alteration in the Crown case, on the one hand, and, on the other hand, the adducement of evidence by the Crown in order to undermine other evidence that might not suit the Crown case. The matter is here for retrial because the Court of Criminal Appeal determined that it was necessary for a jury to determine unanimously the each amount that make up the undeclared income and that were said not to have been declared and were dishonestly and deceptively used to obtain a financial advantage from the Commonwealth. In making that determination, the jury is entitled to find that some amounts give rise to guilt and some parts do not, that is, that some amounts were income knowingly not declared and that some amounts were not. The fact, which for present purposes I accept, that the five payments were not monies from the Vanuatu Insurance Company does not mean that the jury is not entitled to take the view that other amounts are. Further, it does not deprive the accused of the capacity to argue that there is a flaw in the Crown theory that gives rise to a reasonable hypothesis inconsistent with guilt in relation to all of the counts. Moreover, the fact that the five, or possibly six, payments were made prior to the date of incorporation does not necessarily support the proposition that the monies cannot have been paid in the manner alleged by the Crown. Such a proposition could be supported only if it were proved that no premiums were remitted to the Vanuatu Insurance Company before it was incorporated. While that may be the usual inference (and under Australian law a necessary inference), it may be otherwise. Two matters must follow. First, as a matter of fairness, it seems to me that the Crown ought to be confined to putting its case on the basis that the monies received by the accused were monies directly or indirectly from the Vanuatu Insurance Company. Secondly, to the extent that this evidence has been adduced otherwise than by giving appropriate notice to the accused for the purpose of cross-examining Ms Celona or Mr Greer, I direct that each of them, on the request of the accused, are to be recalled for further cross-examination.