Communications between the Crime Commission and the Commonwealth Director of Public Prosecutions
82Prior to the commencement of any of the compulsory examinations, the CDPP, through his officers, was in communication with the case officer at the Crime Commission and Mr Tang. This communication was not regarded as out of the ordinary because the CDPP and the Crime Commission were partner agencies in these operations. There were regular updates between the partner agencies with respect to Operation Wickenby and Operation Polbream, including the fact that compulsory examinations were taking place, the identity of the witnesses, and the topics that were to be investigated at those examinations.
83As well, from time to time, it appears that the CDPP's office would provide advice to the Crime Commission. As an example, in the evidence before this Court, is a memorandum from Ms Shouldice, the case officer in charge of the CDPP's proceedings against Mr Seller and Mr McCarthy, who wrote to Mr Economou of the Crime Commission and Mr Tang, on 23 February 2006 in these terms:
"Thanks for the update yesterday. Just a thought I had during the meeting and may not have stated it - what we would want to avoid before any jury is to argue the legalities or otherwise of the actual schemes. ... Need to focus on dishonesty and lies and who got the money - this is the guts of the criminality and what the jury will understand ..."
84On 25 May 2007, the Crime Commission provided to the CDPP a Briefing Paper, which is of some significance. The paper included a reference to Mr McCarthy's compulsory examination in a list of 20 examined individuals. The examinees, including Mr McCarthy, whose names were on the list, were described as a "source of information" for the ACC. The Briefing Paper contains, relevantly, the following:
(a)A reference to the evidence of Mr McCarthy at his compulsory examination in May 2007 which is used as the source to outline what is described as his financial profile and his current asset position. No doubt the purpose of this being included in the briefing document, is to inform the CDPP of the likely nature and extent of Mr McCarthy's financial capacity to mount a defence to the proposed criminal charges, and any other monetary claim which may be made against him;
(b)A reference to the evidence of Mr McCarthy at his compulsory examination, which referred to the role of one of the other participants in the whisky schemes. The briefing paper says:
"When McCARTHY attended his S28 examination he gave a version of events as to the operation of the scheme, however this contradicted previous versions presented by him in documentation of the operation of the scheme."
(c)A summary of the key evidence to be identified in any prosecution of the applicants. It acknowledges that the extent of the evidence will depend upon the precise charges which are preferred. However, the briefing paper asserts that one of the key propositions to be established in any prosecution is that the
"...Promissory Notes which represent the sham financing will in fact become part of a round robin arrangement upon the crystallization of the transactions"
It goes on to assert that, based upon the proposition that the promissory notes which secure the loans represent a sham financing, there will be no cash available to fund the second part of the transaction, which is the bottling and distribution of the whisky. It records that:
"... McCARTHY has stated that the loan funds will pay for this".
This is a direct reference to his evidence at the compulsory examination;
(d)It also notes that the following facts need to be established, which are all facts and matters, the subject of the compulsory examination of Mr McCarthy, namely that: -
(i)the Chambers Finance was controlled by Seller and McCarthy;
(ii)Grant McKenzie (Hong Kong) Ltd was controlled by Seller and McCarthy;
(iii)Chambers Finance is a sham finance company;
(iv)the investors were duped into thinking that the loans were legitimate; and finally
(v)the promoters knew that the tax deductibility of the scheme was fragile.
(e)In discussing possible evidence by an expert, the briefing note includes the following:
"The promoters of the scheme have now apparently realised that there is no market in Australia for 2.6 million litres of Single Malt Whisky. There is no place to sell the whisky in Australia, and furthermore the import duties on the product would inflate the cost of the product to such an extent that it would not sell in the domestic market, and make a profit after the payment of the sham debt and accrued interest."
and further the following:
"Further, the current story being espoused by McCARTHY is that the loan funds be used to bottle and distribute the whisky. However there is one major flaw in this story, there are no loan funds to pay for the bottling and distribution as the loans are a sham."
The information about the realisations of the promoters and Mr McCarthy's current store are directly derived from his evidence on 15 May 2007.
85The paper concludes with a list and description of recommended charges. Attached to the paper is a 33 page document which was described as "Witness Statements/Interviews Listing". It recorded with respect to possible witnesses whether they had been compulsory examined, whether they had provided statements, whether statements were necessary and the like. Importantly, on the final page, it listed eight witnesses, each of whom were officers of the ATO. That list did not include Mr Tang.
I infer from the contents of the briefing paper, and the attached witness list, that it was not at that point of time intended to call Mr Tang as a witness.
86On 4 June 2007, Ms Simpkin and Ms Shouldice spoke. Ms Shouldice's note of that conversation forms part of the evidence. It appears that Ms Simpkin told Ms Shouldice that there were further examinations to take place, including those of Mr McCarthy and Mr Seller. The note then includes the following:
"Eon/Sanabu-Mc-S says: 2 mil each - are there secret comm'n - was $ returned etc. Some investors knew some commission??"
87The reference in this note to Eon and Sanabu is a reference to companies associated with each of Mr McCarthy and Mr Seller, which received monies as part of each of the whisky schemes. I am satisfied that the source of the information in this note is the compulsory examination of Mr McCarthy, because of the use of the word "says" and because the information in the note accords with the evidence given by Mr McCarthy during the May 2007 examination.
88In November 2007, a paper was provided by the Crime Commission to the CDPP. It was described as Brief of Evidence and Preparation Paper. It was prepared by Ms Simpkin. It included at least the following:
(a)A reference to advice provided by the CDPP to the ACC about the preferred charges in these terms:
"The preferred charges were to be Commonwealth based, with a preference towards conspiracy charges. The brief is to be prepared with the view of pursuing Commonwealth fraud charges";
(b)It repeats and extracts material from the first briefing paper including that set out in [84] above.
89A substantially similar Briefing Paper was sent on 6 December 2007, after the examination of the final witness had commenced, but not before it had concluded.
90By a letter dated 18 December 2007, the Crime Commission forwarded to the CDPP (Julie Shouldice) information which it asserted in the letter was:
"... provided pursuant to the Australian Crime Commission Act 2002."
91The letter described the information which was being provided with it in the following terms:
"Copies of the following material containing information and documents lawfully obtained by the Australian Crime Commission in the above investigation:
(i) Operation Polbream Briefing Paper updated as at December 2007;
(ii) Operation Polbream - Schedule of Meetings with Strachans;
(iii) Operation Polbream Brief Plan and Preparation Paper, November 2007 (and attachments, Annexures A, B, C & D);
(iv) 1 x CD titled 'Operation Polbream Examinations until Nov 07';
(v) Letter dated 6 December 2007."
92The CD contained, amongst other things, the transcripts of each of the compulsory examinations of Mr McCarthy and Mr Seller.
93It is convenient to note here that s 12 of the ACC Act could not have been the basis for the disclosure of the material because none of it was in the form of admissible evidence. No submission was put to the Court that s 12 could be relied upon as a source of power to authorise the distribution of the material.
94According to the evidence, this information was released by the Crime Commission pursuant to s 59(7) of the ACC Act because:
"... the information is relevant to the activities of the Commonwealth Director of Prosecutions."
The letter also noted that:
"... to do so would not be contrary to a law of the Commonwealth".
However, the disclosure of the evidence of Mr McCarthy was contrary to the non-publication directions which had been given on 13 September 2007 by the Examiner, because it was not until March 2012 that the variation of the directions was made to include the CDPP, as being a recipient of all of the examinations, although the variation made on 22 August 2008 to which I have referred at [48] above, did permit a limited release of transcript.
95The disclosure of Mr Seller's examination was consistent with the variation dated 7 December 2007 of the original non-disclosure order of the Examiner in September 2007.
96By 26 February 2009, the Crime Commission had provided the entirety of the brief of Evidence to the CDPP. This included witness statements and exhibits produced by those witnesses. It was a very large brief.
97From that time, Mr Corkery, who was by that stage the CDPP case officer, commenced an examination of the brief to determine what, if any offences, had been committed by Mr Seller and Mr McCarthy.
98On 5 August 2009, Ms Simpkin, the case officer at the Crime Commission, sent an email to Mr Corkery at the CDPP's office which included the following:
"I am still drafting Fraser's statement, it will be quite lengthy.
However, Fraser stated in his examination that the Commissioner of Taxation in his position paper of April 2002 DID NOT raise the issue of the fact that no funds had been provided by the financier. It wasn't raised in the paper as the ATO didn't know that, at that time, or even later. It goes to our view that the ATO were never told the actual facts, they were only given snippets."
99On 28 July 2009, there was an email exchange between Mr Corkery and Ms Simpkin which dealt with, in part, the role of Mr Fraser, who as junior counsel had joined in with senior counsel, in the provision of a Memorandum of Advice, upon which both Mr Seller and Mr McCarthy relied. It was to this effect:
"Martin Corkery: 'I am putting together my minute to the director regarding the conspiracy charge and the involvement of Fraser was substantial over the 12 months from May 2000 to 2001. In particular his involvement regarding the product ruling problems they were having. Seller keeps saying that he had referred the matter to counsel. Does Fraser say he did speak to him?'
Elizabeth Simpkin: 'Fraser states ...' " (Emphasis added)
Ms Simpkin then sets out in some detail passages from Mr Fraser's evidence, together with page references, given at the compulsory examination.
100Mr Corkery gave evidence, which I accept, that he had not read any of the transcripts of the compulsory examinations, including those of Mr McCarthy and Mr Seller. It was not submitted that I should not accept his evidence. The email exchange, subject to what is said below, corroborates this evidence, at least so far as the Fraser's examination is concerned. However, the response by Ms Simpkin to Mr Corkery does provide him with a summary of, or the effect of, some of the evidence given in a compulsory examination by Mr Fraser.
101It is curious then to see the use of the present tense "... keeps saying ...", by Mr Corkery, in the email just referred to. However, it seems that the expression is consistent with a description of what Mr Seller was saying in the nominated twelve month period, that is, 2000 to 2001. Seen in this light, the reference to the present tense does not cause me to make a finding that Mr Corkery had read, or else been told of, the content of Mr Seller's compulsory examination.
102On 29 October 2009, Court Attendance Notices were filed. Ms Simpkin, the Crime Commission case officer, was nominated as the Prosecutor.
103Thereafter there was communication between the CDPP and the ACC frequently. One subject matter of their communication was the question of bail and proposed variations. Another topic of communication was the fact of, and contents of, the brief of evidence prepared by the Crime Commission for the CDPP with respect to both applications.
104The third topic of communication between the Crime Commission and the CDPP dealt with the question of appropriate disclosure to the applicants and their lawyers of material in the prosecution's possession. This included material in the Crime Commission's possession.
105Apparently, as a part of the disclosure process, on 4 December 2009, the CDPP requested from the ACC versions of the transcript of the compulsory examinations of Mr McCarthy and Mr Seller, in MS Word. They were sent on 7 December 2009. The purpose of this particular request is not apparent from the evidence, but the timing of the request leads me to conclude that it was part of the disclosure process.
106A further subject of communication were the draft statements of potential witnesses including Mr Quincy Tang. By way of example, on 16 March 2010, Ms Wade, then the case officer at the Crime Commission, wrote to Mr Corkery at the CDPP's office by email attaching a draft statement of Mr Tang and saying:
"Quincy has prepared the attached statement and attached tables in respect of the request for a statement in respect of the whisky disparity schedules that Elizabeth Simpkin had previously prepared. Quincy has made reference to exhibits in the statement and the tables. If needed for your review, I can probably scan the documents and burn to disc."
107There were other communications dealing with the preparation of the matter for a hearing. These communications demonstrated a close working relationship between the Crime Commission and the CDPP. They show cooperation in the conduct of the investigation and the prosecution of Mr Seller and Mr McCarthy. Such a relationship, at the least, raises a question and a real concern, as to what extent information has been shared and, in particular, whether the information from the compulsory examination of Mr Seller and Mr McCarthy has been relied upon by the CDPP for the purpose of the prosecution.
108On 13 January 2010, an email fixed a meeting to take place on 19 January 2010 at which there was to be a discussion between Ms Wade and Mr Corkery, and perhaps others, of the documents that were shown to Mr Seller and Mr McCarthy during their examinations.
109On 19 January 2010, Ms Wade sent an email to Mr Corkery to which was attached a list of exhibits shown to Mr McCarthy and Mr Seller during the course of their compulsory examinations. The body of the email contains this statement:
"Attached are lists of the exhibits shown to Messrs Seller and McCarthy. I'll drop a disc of the exhibits up to the CDPP this afternoon to your attention."
The evidence of Mr Corkery was silent on whether he had perused these exhibits.