R v Saliu and Saliu

Count 1 - Anna

1. Count 1 was a charge under s.178BA (against Anna alone) based on an application lodged 19 October 2001 with Perpetual Trustee (Victoria) for a further mortgage over the property. Based on this application, a loan was granted on 9 January 2002 in the amount of $450,000. At that time, the 2000 mortgage to Challenger Commercial was discharged.
2. The Crown alleged that the application documents for this loan were deceptive, in that they contained false and misleading information. Firstly, that the signature of the mortgagor Mevlude was a forgery, or, if it was signed by her, then her signature was obtained by deceiving her as to the true nature of the document. Secondly, it was alleged that the application contained false or misleading information concerning the address, employment and income of Kenan and Mevlude.
3. The Crown case was that Anna was responsible for the creation and presentation of the false and misleading documents, and that she derived a benefit from the loan.

Count 2 - Anna and Edita

1. Count 2 related to Anna and Edita jointly, and alleged an offence under s.178BA, that on 14 July 2005, a further loan was granted (by ANZ bank) in relation to the property. On the Crown case, the funds obtained from this loan were used to discharge the 2002 mortgage to Perpetual Trustee. It was alleged that both Edita and Anna (and unnamed others) obtained a benefit from this transaction. The Crown alleged that the application documents for this loan were deceptive in a number of respects. Firstly, that the signatures of Kenan and Mevlude were forged, or if not forged, were obtained by deceiving them as to the true nature of the documents. Secondly, it was alleged that the documents contained false and misleading information, including as to the employment and income of Kenan and Mevlude.
2. The Crown also relied on an assertion by Anna that during 2005, she brought her parents (Kenan and Mevlude) to some meetings with an accountant, and that these meetings were connected in some way with the Erskineville property. The Crown proposed to lead evidence that the purported signatures of Kenan and Mevlude on a mortgage application completed in 2005 were witnessed by a Mr Gomes, who was an employee of the Accountant. The Crown alleged that the signatures on this document were not genuine, and that neither Kenan nor Mevlude met with Mr Gomes, and that he did not witness their signatures. It was further alleged that the signatures on the ANZ loan offer acceptance form were also forged, (Kenan and Mevlude both saying that the signatures were not genuine), and further, that expert analysis provided qualified support for Anna having written those signatures.
3. Another document relevant to count 2 is referred to as a "mortgage certificate", which also contained the purported signatures of Kenan and Mevlude. On the Crown case, it was not clear whether the signature of Kenan was genuine, but it was asserted that the signature of Mevlude appeared to be a forgery, and it was further alleged that Mevlude told police she did not sign the document. Furthermore, although the signatures purported to be witnessed by an Accountant, that person said that the signature was not hers. The Crown intended also to lead expert evidence that there is qualified support that Anna wrote the purported signature of Mevlude.
4. The Crown case was that Anna and Edita were responsible (in a joint criminal enterprise) for the creation and presentation of the deceptive material, and that as a consequence, they derived a benefit.

Count 3 - Anna and Edita

1. Count 3 was a charge against Anna and Edita jointly, under s.178BA, alleging that on 17 September 2009, they dishonestly obtained for themselves (and unnamed others) a financial advantage, being a loan from NAB over the Erskineville property, and that these loan funds were used to discharge the 2005 ANZ mortgage.
2. The Crown alleged that the application for that loan was fraudulent in a number of respects. Firstly, that it contained false and misleading information regarding the employment details of Afrim Saliu (the brother of Anna, and son of Kenan and Mevlude). Secondly, that it falsely represented that the property was lawfully transferred to Afrim Saliu. The Crown also alleged that in July 2009, Edita instructed a solicitor to prepare a contract for sale of the property to Afrim Saliu, and that the purported signatures of Kenan and Mevlude on that contract were forged. The Crown sought to rely also on expert evidence, which it said provided qualified support that Anna was the author of the purported signature of Mevlude on the contract. The Crown further said that the purported signatures of Kenan and Mevlude on a transfer of title were forged, and relied on expert evidence providing qualified support that Tina Arslanovska (sister of Anna) wrote those signatures.

Count 4 - Anna and Edita

1. Count 4 was a charge under s.193B against both Applicants. It alleged that they knowingly dealt with proceeds of crime, namely the title of the Erskineville property.
2. On this count, the Crown case was that in February 2010, Anna and Edita applied for a loan of $110,000, intended to benefit Anna, and that in doing so, used the title of the property as security. The Crown case was that the property was "proceeds of crime" because of the fraudulent sale and transfer of the property in July 2009, to which I referred in discussing count 3. The Crown case in relation to count 4 therefore relied largely on the jury's acceptance of the evidence (referred to above) that the purported signatures of Kenan and Mevlude on the contract and transfer were forgeries.

The proceedings are discontinued

1. The trial proceedings commenced before me on 5 February 2019, and a number of pre-trial issues were subsequently argued, on a voir dire hearing over a number of days. As part of that voir dire, the Crown sought, pursuant to s.65 of the Evidence Act 1995, to have admitted evidence (in written form) from Kenan and Mevlude. Kenan had died on 6 July 2017, and was therefore an unavailable witness. Mevlude was also an unavailable witness (in a joint trial of both Edita and Anna) by reason of a ruling by Herbert DCJ, to the effect that Mevlude was not a compellable witness against her daughter Anna.
2. In these circumstances, the Crown relied on s.65(2)(c) of the Evidence Act, and sought to have admitted into evidence a number of 'previous representations' by Kenan and Mevlude in police statements, affidavits, and transcripts of oral evidence given in Supreme Court proceedings. On 18 February 2019, I delivered a judgment which had the effect of excluding large portions of this evidence.
3. On 19 February 2019, the Director of Public Prosecutions ('DPP'), having considered the effect of that judgment, directed that no further proceedings be conducted.

The Costs Act

1. Section 2 of the Costs Act provides (relevantly) that the Court may, where a direction is given by the DPP that no further proceedings be taken…grant a certificate specifying the matters referred to in section 3.
2. Significant guidance as to the approach to an application under the Costs Act is provided in the judgment of McColl JA in Mordaunt v Director of Public Prosecutions [2007] NSWCCA 121; 171 A Crim R 510, especially at [36].
3. Section 3 provides that a certificate granted under the Costs Act shall specify that, in the opinion of the Judge granting the certificate, the following matters have been satisfied:- 1. if the prosecution had, before the proceedings were instituted, been in possession of evidence of all the relevant facts, it would not have been reasonable to institute the proceedings; and 2. that any act or omission of the defendant that contributed, or might have contributed, to the institution or continuation of the proceedings was reasonable in the circumstances.
4. The decision in R v Johnston [2000] NSWCCA 197, sets out the steps that s.3 of the Costs Act requires to be addressed, in the following terms:- 1. an evaluation of all of the evidence as it emerged at trial; 2. an assumption that all of that evidence was available to the prosecution before the proceedings were instituted; 3. a determination whether, if the prosecution had been in possession of all of that evidence, it would not have been reasonable to institute the proceedings; and where it is concluded that, in those circumstances, it would not have been reasonable to institute the proceedings: 1. a determination whether any act or omission of the accused contributed to the commencement of or continuation of the proceedings; and, where such an act or omission is found to exist: 1. a determination whether that act or omission was, in the circumstances, reasonable.

Consideration

1. I first need to consider what are "all the relevant facts". As s.3A of the Costs Act, and the decision in Mordaunt make clear, this includes not only the evidence known to the prosecution when the proceedings were initiated, but also includes material that has come to light later.
2. Secondly, having determined "all the relevant facts", I must consider whether, if all of those facts had been known to the prosecution, I am of the opinion that it would not have been reasonable to institute the proceedings.
3. As is made clear in Mordaunt - this is not simply a question of whether there were "reasonable prospects of conviction" or a "prima facie case" (see Mordaunt at [36]). Rather, and as Hamill J put it recently in R v Greentree [2019] NSWSC 216 at [12], the test effectively requires an analysis involving a prosecutor who is assumed to have the 'wisdom of hindsight'. It is not necessary for me to come to any adverse findings in relation to the conduct of the prosecutor, and the granting of a certificate does not necessarily involve any criticism of the investigating police or the prosecutor. These observations are consistent with those of the Court of Criminal Appeal in Cox v R (No 2) [2017] NSWCCA 129 at [4], to which I have also had regard.
4. It is necessary for me to consider the case against each Applicant separately, and each count in the indictment separately: DAO v R [2016] NSWCCA 282, at [34], [102], [104]. In doing so however, I will have regard, where appropriate, to any evidence that may be admissible in relation to more than one count.

Count 1 (Anna only)

1. The Crown alleged that the documents submitted to Perpetual Trustee for this loan were deceptive, and contained false and misleading information. Firstly, that the signature of Mevlude was a forgery. Secondly, it alleged that the application contained false information as to the mortgagors' address, employment and income. The Crown case was that Anna was responsible for the creation and presentation of the false and misleading documents, and that Anna derived a benefit from the loan that resulted.
2. In order to prove these allegations, the Crown required evidence from Mevlude and Kenan. While the Crown had expert opinion evidence from a handwriting analyst to the effect that a signature on the mortgage was not that of Mevlude, the Crown still required evidence to be admitted from Mevlude, to prove the "basis" for that opinion, namely proof of her "specimen" signatures. Secondly, the Crown also required evidence to be admitted from Mevlude and Kenan in order to prove the alleged false details in the loan application (residential address, employment, and income). Similarly, the Crown's final allegation (that Kenan had never met the person who purported to witness his signature) also relied on the evidence of Kenan being admitted. My ruling of 18 February 2019 meant that the Crown no longer could rely on any of this evidence.

Count 2 (Anna and Edita)

1. Under this count, the Crown alleged that ANZ Bank loan application documents which contained the purported signatures of Kenan and Mevlude were either forgeries, or if genuine, were obtained by deceiving them as to the true nature of the documents signed. The Crown also alleged that the loan application contained false or misleading information relating to the employment and income of Kenan and Mevlude.
2. Proof of these allegations relied on evidence being admitted from Kenan, to the effect that he either did not sign the document, or was deceived as to its true nature. The Crown also required evidence from Mevlude as to specimen signatures, as to her signature being forged, and as to the falsity of employment and income details. My ruling of 18 February 2019 had the effect of denying the Crown this evidence.

Count 3 (Anna and Edita)

1. On this count, the Crown case also relied on the admission of evidence from Kenan and Mevlude. The Crown required their evidence in order to prove its allegations that a contract of sale and transfer of title contained forged signatures, which purported to be the signatures of Kenan and Mevlude. The Crown also alleged that the loan documents contained false employment and income details relating to Afrim Saliu (Anna's son), and a false representation that the property had been lawfully sold and transferred to Afrim Saliu. While proof of the false details relating to Afrim Saliu did not rely on evidence from Kenan or Mevlude, their evidence was nonetheless essential to proving the underlying fraudulent nature of the prior purported sale and transfer. My ruling of 18 February 2019 denied the Crown this evidence.

Count 4 (Anna and Edita)

1. The fundamental allegation under this count was that the title of the property was used by Anna and Edita as security for a second mortgage loan, and that in so doing, the Applicants dealt with "proceeds of crime" because that title had been obtained fraudulently. In order to prove this allegation, the Crown required evidence from Kenan and Mevlude to prove the underlying alleged fraud involved in the sale and transfer of the property (as discussed under count 3 above). My ruling of 18 February 2019 denied the Crown this evidence.

Determination

1. In my opinion, the evidence of Kenan and Mevlude was fundamental to proving the Crown's case under all four counts.
2. One of the arguments relied on for the purposes of this costs application was that the evidence of Kenan and Mevlude was so unreliable that this fact alone (independent of my ruling under s.65(2)(c) of the Evidence Act) supported a finding that it was not reasonable to have instituted the proceedings. I have considered this argument, but I do not regard it as persuasive, for a number of reasons.
3. Firstly, the fact that proposed Crown witnesses are likely to be the subject of legitimate attacks going to credibility or reliability (as would have occurred with the evidence of Kenan and Mevlude) does not necessarily amount to it being unreasonable to institute proceedings. There are, and will be, many cases in which the prosecutorial discretion to institute proceedings has been exercised "reasonably", even though the Crown case cannot be described as strong, or even though the prosecution results in an acquittal. Secondly (although this is related to the previous point), there will be many cases where it will be a legitimate and reasonable exercise of the prosecutorial discretion to leave questions of credibility of a witness to be determined by a jury. This is inherent in the jury system. In saying this, I do not suggest that it would be a legitimate exercise of the discretion to merely "bring a matter before the courts" in order to satisfy some vague public interest, and without proper scrutiny.
4. Another argument that was relied on by the Applicants was that, even if the unavailability of the evidence of Kenan and Mevlude is put aside, I would still form the opinion that it was not reasonable to have instituted the proceedings, because (in relation to counts 2, 3 and 4) there was insufficient evidence to prove any joint criminal enterprise. In response, the Crown relied on the totality of the evidence in the Crown case, and the drawing of an inference that a joint criminal enterprise existed. Firstly, the Crown relied in relation to counts 2 to 4, on the association between the two Accused, who are mother and daughter. Furthermore, on count 2, the Crown relied on evidence that in July 2005, Kenan attended an ANZ branch with both Anna and Edita, where he signed paperwork relating to a loan he believed was to benefit Anna. The loan application also included Anna's mobile phone number. Furthermore, the Crown pointed to evidence that in August 2005, funds were deposited into a joint account in the names of Kenan, Mevlude and Edita, and that thereafter withdrawals were made from the account by Edita. Also relevant is evidence that would be given by Tina Arslanovska, to the effect that she was told by Anna and Edita that "they" had transferred the loan from Perpetual Trustee to ANZ, as the interest rate was too high. In relation to counts 3 and 4, the Crown's allegation was that the property was fraudulently sold and transferred to Anna's son (Afrim), and that it was Edita who instructed a solicitor to prepare the contract of sale, and transfer, but it was Anna who collected those documents from the solicitor. Furthermore, the Crown intended to rely on evidence that both Anna and Edita told Tina Arslanovska that they intended to transfer the property into Afrim's name. There were other parts of the evidence upon which the Crown intended to rely in order to support an inference of a joint criminal enterprise, but it is unnecessary for me to set them out in detail, because in my view, the evidence I have referred to was capable of supporting the existence of a joint criminal enterprise, which might be inferred from the combination of all the evidence. I am therefore not satisfied that the evidence capable of supporting a joint criminal enterprise was such that this aspect alone made it not reasonable to have instituted the proceedings.
5. I return then, to the question posed by s. 3. In considering whether either of the Applicants have established grounds for the grant of a certificate under the Costs Act, I have had regard (inter alia) to the observations of Wood CJ at CL in R v Manley [2000] NSWCCA 196; 112 A Crim R 570. In that case, his Honour said (at p573) that in conducting the objective analysis required in forming an opinion whether it was unreasonable to have instituted the proceedings - "Matters of judgment concerning credibility, demeanour and the like are likely to fall on the other side of the line of unreasonableness, being matters quintessentially within the realm of the ultimate fact finder, whether it be judge or jury."
6. In the instant matters, the Crown case was rendered untenable by reason of my refusal to admit the majority of the evidence of Kenan and Mevlude. That ruling involved an evaluative judgment that the excluded representations of Kenan and Mevlude were not made in circumstances that made it highly probable they were reliable. To my mind, a decision of that kind is akin to the type of judgment "concerning credibility, demeanour and the like" to which Wood CJ at CL was referring in Manley.
7. I am fortified in this view by the recent decision of Hamill J in R v Moore [2015] NSWSC 1263. In that case, his Honour refused to grant a certificate under the Costs Act in circumstances where the Crown case had been discontinued following a number of rulings on evidence made by the learned Judge. His Honour noted (at [28]) that although the "hypothetical prosecutor" is assumed to have possession of all the relevant facts, that prosecutor is not to be attributed with the ability to predict what factual findings will be made either at trial or on the voir dire, let alone to be able to predict the exercise of discretion residing in the trial judge. His Honour also observed (at [29]) that there will be cases where the legal principles are so clear, or the credibility issues so powerful that it will be unreasonable for the prosecutor to institute proceedings.
8. However, I do not consider that this was such a case. While there were significant inconsistencies in the evidence of Kenan and Mevlude, there was also some other evidence (eg handwriting analysis, and evidence from independent witnesses) that was capable of providing corroboration of the central allegations.
9. Having regard to all of these matters, I am not of the opinion that, if the prosecutor had been in possession of "all of the facts" before the proceedings were instituted, it would not have been reasonable to institute the proceedings. Accordingly, I refuse the applications for certificates under the Costs Act.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 June 2019