REGINA v BROWNLEE [1999] NSWCCA 57 | Case summary

1 SPIGELMAN CJ: I invite Adams J to give the first judgment. 2 ADAMS J: On 11 February 1997 the appellant was convicted in the District Court of the offence of obtaining a financial advantage by deception under s 178BA of the Crimes Act 1900. This offence occurred between 1 March 1992 and 2 April 1992. He was sentenced to a fixed term of twenty months' imprisonment to commence on 15 August 1996 and expire on 14 April 1998. We have been informed that he has served all but eighteen days of his sentence. In passing this sentence, his Honour took into account a further charge of obtaining a financial advantage by deception under s 178BA of the Crimes Act 1900, an offence alleged to have occurred on 17 January 1992. 3 Essentially, the Crown case was that the appellant, a corporate adviser, was involved in a reorganization of the financial affairs of one Laurence Weston for the purpose of concealing Mr Weston's previous tax avoidance. As part of that reorganization, it was alleged he either forged, or was party to the forging or was party to the presentation of a signature he knew to be forged as genuine, on a contract for sale and a transfer of real estate to mortgagees who were pressing companies in which he had an interest for payment. The property was Weston's but the Crown case was that he was unaware of the transfer and had not executed the documents. The appellant's signature appeared as a witness to the questioned signatures. His defence was that he had in effect witnessed Mr Weston's signature being affixed to them. 4 In order to appreciate the significance of the point involved in the appeal it is necessary briefly to set out some of the surrounding facts. Weston owned a number of properties on which tax had not been paid and consulted Beaufils, a solicitor, who in consultation with the appellant, devised a scheme to transfer a number of these properties to a company controlled by them subject to a deed of trust in favour of Weston. Short term mortgages were then raised by Beaufils and the appellant, Weston saying he was unaware of them, on two of the properties which, however, were not paid on the due dates and legal action commenced. Beaufils and the appellant then arranged for the mortgagees to discharge the mortgages by transferring to them a property in Canterbury Road, Punchbowl. This was one of the properties owned by Weston but it was, at the material time, registered in his own name. The matter proceeded in the ordinary course, with an agreement for sale apparently signed by Weston followed by a transfer executed by him which was handed over on settlement. 5 On 2 April 1992, arrangements had been made to settle the transfer of the property to the mortgagees. A search had disclosed that Weston was the registered proprietor. Of course, Beaufils must have known that that disclosure was inevitable. On 2 April 1992, Mr Miller, the mortgagees' solicitor, asked Beaufils who Weston was. Beaufils told him "He is part of the syndicate". Settlement had been arranged for later that day and Mr Miller said that he would like Weston to attend. In due course, Mr Miller and his clients met with Beaufils and the appellant at the Stamp Duties Office in Elizabeth Street, Sydney, for the purpose of settlement. Weston was not present. Mr Miller said that when he saw the documents with Weston's signature on them, he asked where Weston was but that Beaufils replied that he was unable to attend. Mr Miller asked whether he could be contacted by telephone but was told that this would be difficult because he left his office at that time of the day. Mr Miller noticed that the signatures were witnessed by the appellant and asked whether he had seen Weston sign the documents. Mr Miller vaguely recollected that the appellant told him that he was in another room and came in after Weston had placed it on the documents at all events. Mr Miller was dissatisfied with the appellant's answer and Beaufils then assured him that they were definitely the signature of Weston, saying that he had acted for him for years and was prepared to sign as a witness to his signature and would give Mr Miller a certificate that his signatures appeared on both documents. When this was handed over, the settlement proceeded to completion. 6 The summons which had instituted the proceedings by the mortgagees was served around mid-March 1992 at Weston's business premises. This, he claimed, was the first thing he knew about any mortgage on that property. Very shortly after that Mr Weston went with his de facto wife, Ms Marcelle Beaufils, (who, as it happens, was Beaufils' aunt) to Beaufils' office at Sutherland. When he confronted Beaufils with the summons, Beaufils said that "Brownlee slipped up", and a conversation ensued in which it was clear that Weston indicated disapprobation with what had occurred and insisted that all his title deeds, which he had earlier given to Beaufils for the purpose of fulfilling the scheme of concealing his tax fraud, should be returned to him. A meeting was then arranged for 11 April 1992. This occurred at the Coolangatta Hotel. Weston (who was unaware of the settlement) was present with a Mrs Joan Laurence, as were the appellant and Beaufils. In effect, Beaufils told Weston that the mortgages had been paid out and the deeds were "cleared". He offered to produce the deeds. Weston's evidence was that he asked Beaufils how it came about that the mortgagees were asserting rights over the Canterbury Road property (about which, he said, he had discovered in the interim) and that Beaufils, after quickly glancing at the appellant, said in effect, that this was simply a device to get the property out of his name as had been done with other properties of Weston. Weston said that he pointed out, however, that it had been agreed from the beginning that this particular property was to remain in his name so that, if necessary, it might be provided to the taxation authorities as "a sacrificial lamb". According to Weston, Beaufils responded, in effect, that there was no reason to allow the Commissioner to take that property and, in substance, suggested that the scheme had been adjusted by him and the appellant to avoid this possibility. The appellant said nothing in this conversation but it was reasonable to infer that he agreed with what Beaufils had said. Of course, it was implicit in this conversation that Weston was unaware of any of these transactions. In his dock statement, the appellant said that contrary to Weston's assertions, he had instructed Beaufils to, as he put it, "deal with the property...rather than, as he said, - not Mr Beaufils - rather than, as Mr Weston said "leave it to those b's [meaning the taxation authorities] down south". The appellant said that it was on this occasion (otherwise unspecified by the appellant but presumably some time before 2 April 1992) that Weston signed the two documents in question, which he witnessed. The appellant said that the utilization of the Canterbury Road property to repay the outstanding mortgages was, as he understood it, part of the scheme arranged by Beaufils pursuant to Weston's instructions to make arrangements to ensure that the taxation authorities could not obtain the property, the essential characteristic of which was that Weston would not remain its ostensible owner. 7 In effect, as I understand it, the appellant's defence was that the original mortgage funds were used, one way or another, by Weston and it was not surprising that his hitherto unencumbered property might be used in order to settle those debts. There was an option held by Beaufils and granted by the mortgagees/transferees to repurchase the property at a significantly increased price. The appellant did not, however, deny in terms the conversations to which I have referred. Broadly speaking, they were in line with what he said he understood to be the facts of the matter. Implicitly, he accepted that Weston may not have been entirely aware of the precise nature of Beaufils' scheme, of which the appellant himself also only knew part. 8 The appellant said that he was consulted by Beaufils essentially for the purpose of providing shelf companies to acquire Weston's properties, of which the directors were Beaufils and the appellant, and to arrange for the mortgage advances which were the subject of the dispute. In essence, the appellant accepted that he had been involved only to this extent. Beaufils was the trustee of the declaration of trust and the shareholder of Openbridge Pty Limited, the company into which, according to the recital in the deed, Weston's assets and cash had been transferred. The appellant's only direct involvement with this document was to witness the signatures of Beaufils and Weston. Although he was a director of Openbridge, he did not own any shares in the company, all of the issued shares of which were in Beaufils' name. 9 Weston said that he and his de facto wife had a further meeting on 17 April with Beaufils, but on this occasion the appellant was not present. The conversation deposed to by Weston was in the following terms - Marcelle said to Stephen, "How is it possible to sell Laurie's property without his signature or consent?" Beaufils replied, "We used the fourth backsheet of a document". Marcelle said, "That's nice". Stephen said, "Look, don't worry about it. No money has changed hands. We can get the property back at any time because we have an option to get it back at any time and there is no problems. Don't worry about it". 10 Weston conceded that, in a statement made to the police on 25 August 1992, he said that Beaufils' response to his wife's first question was "I used the fourth backsheet of a document." (Emphasis mine). Weston accepted that he had used "I" in his police statement but thought that the difference between "I" and "we" was of no consequence. Marcelle Beaufils' evidence about the conversation was along the same lines as that of her husband but she said that Beaufils response to her question was "I used the fourth backsheet of a document". 11 The evidence of this conversation was capable of considerable significance, in light of the defence made by the appellant that he had a clear recollection of the occasion upon which Weston signed the documents. Whether the personal pronoun be "I" or "we", the answer of Beaufils, though not altogether clear, is, plainly enough, an admission that the document which he was describing as, apparently, having been signed by Weston was not either the contract or the transfer. In other words, it was an acceptance of the truth of Ms Beaufils' accusation that the relevant documents had neither Weston's consent nor bore his signature. That this was how Ms Beaufils interpreted the answer is clear from her response, namely, "That's nice", clearly enough an ironic mode of expressing disapproval. As Beaufils was not called to give evidence, the issue of whether the signatures were genuine or forgeries was essentially disputed between Weston on the one hand and the appellant on the other, although the events that transpired at the settlement could certainly be explained as an attempt by Beaufils (successful, as it happened) to ensure that Weston was kept ignorant of the transactions, which would not have been necessary had he executed the documents in the circumstances described by the appellant. The hearsay evidence of Beaufils, accordingly, provided substantial support for Weston's account and, therefore, the Crown case. 12 The appellant and the Crown asked his Honour to rule on the admissibility of the conversation before the commencement of the trial, and his Honour agreed to do so, accepting the force of the Crown submission that it was material upon which he should be able to open if it were to form part of the Crown case. 13 It was submitted by the Crown that the conversation was admissible as having been made in furtherance of the criminal enterprise by the appellant and Beaufils to use the property dishonestly to obtain the advantage of discharging the mortgages which had been entered into without Weston's knowledge or consent, the proceeds of which had been obtained by companies in which they had relevant interests and reliance was placed on Tripodi v The Queen (1961) 104 CLR 1 and Ahern v The Queen (1998) 165 CLR 87. Although it is somewhat unclear, it appears that his Honour may have accepted that this provided a basis for the admissibility of the statement. His Honour, however, ruled in the following language, more appropriate to making a decision pursuant to s 55 of the Evidence Act 1995 (the Act) - It seems to me, in the circumstances, that the conversation mentioned is relevant as being some sort of explanation given by Stephen Beaufils and going to the very nub of the case the Crown presents, that is the alleged forgery of the signature of Mr Weston. 14 In light of the Crown's reliance upon this evidence it is somewhat surprising that his Honour did not advert to it in his directions to the jury, and explain to the jury why the Crown said that it was relevant and important. The only references to the conversation in his Honour's summing up were contained in his Honour's recital of the accused's statement from the dock which was in the following terms - I am obviously unable to confirm or deny that [Beaufils' response to his aunt's query] as I wasn't present at that meeting, as you heard. I have no knowledge of whether in fact he used the fourth back page of that contract, nor do I have any knowledge of any other conversations that Beaufils made with Mr Weston, either by themselves or together with Marcelle Beaufils, because I simply wasn't there. I didn't attend them. 15 The other reference of his Honour was to remind the jury of the argument put by counsel for the defence in which the only point apparently made was Weston's change from his initial "I" to his evidentiary "we" was invented to falsely implicate the accused. 16 In Tripodi v the Queen (1961) 104 CLR 1, the Court said (at 7) - When the case for the prosecution is that in the commission of the crime a number of men acted in pre-concert, reasonable evidence of the pre-concert must be adduced before evidence of acts or words of one of the parties in furtherance of the common purpose which constitutes or forms an element of the crime becomes admissible against the other or others, that is to say of course, unless some other ground for admitting the evidence exists in the given case...It must be remembered that the basal reason for admitting the evidence of the acts or words of one against the other is that the combination or pre-concert to commit the crime is considered as implying an authority to each to act or speak in furtherance of the common purpose on behalf of the others. From the nature of the case it can seldom happen that anything said by one which is no more than narrative statement or account of some event that has already taken place, that is to say, some statement which would be receivable in evidence against the man who made it as an admission and not otherwise, can become admissible under this principle against his companions in the common enterprise. Usually the question of admissibility will relate to directions, instructions or arrangements or to utterances accompanying acts. 17 The Crown submits that part of the common purpose of the appellant and Beaufils was to keep Weston "in the dark" as to the use which they were making of his properties and that it was necessary to continually put Weston off track as to what was actually happening. I can see the force of this submission in respect of the statements by Beaufils about the option, suggesting that what had happened was, after all, consistent with the scheme that had been already undertaken and was implicit, at least, in what was said in the appellant's presence and apparently with his agreement at the meeting of 11 April. However, there seems to me to be no reasonable basis for inferring that it was part of their common purpose for Beaufils to admit, in effect, the signatures had been forged or else the signed pages had been obtained from another document.. Far from keeping Weston in the dark, this statement exposed what had been done, although precisely what document was used as the source of the signature was never explained. 18 In Ahern v the Queen (1988) 165 CLR 87, the essential problem considered by the High Court was that the rule implying authority on the part of one conspirator to act or speak on behalf of another only arises where the latter is part of the combination but, "to assume the participation of the latter in order to admit the evidence on the basis of implied authority is to assume the very fact which is sought to be proved by that evidence": see (1988) 165 CLR at 95. The Court distinguished between the mode in which this problem presents itself in conspiracy trials as distinct from trials for substantive offences, stating that in the latter case (1988) 165 CLR at 99) - Once there is reasonable ground for inferring a combination in cases other than conspiracy, acts and declarations of the participants in furtherance of the common purpose may be used to prove, not the fact of participation in the combination, but the offence charged. 19 In Ahern, the Court determined that evidence of statements by alleged co-conspirators should not be admitted unless the trial Judge determines whether there is reasonable independent evidence of participation of the accused: see (1988) 165 CLR at 100. Reference should also be made in this context to R v Ousley (unreported, VicCA 31 May 1996) which went to the High Court on other grounds, where it was pointed out that it is essential to examine precisely what the factual basis was for the proposed admission and that the mere recital of a formula "pursuant to the common purpose" did not resolve the question in issue. 20 I do not see that there is anything in Ahern which qualifies the proposition, which I have set out above. It was submitted to us that the question posed by s 87 of the Act should be determined on two levels: whether or not there was a common purpose for the purpose of admissibility should be determined from the Judge's point of view in favour of admission if it were reasonably open so to find; on the other hand, whether the representation was made in furtherance of that common purpose was a matter to be determined to his satisfaction, presumably on the balance of probabilities. In my opinion, the provisions of s 87 do not justify such a distinction. In this context it may be useful to refer to the judgment of Badgery-Parker J in R v Chai 27 NSWLR 153 at 189. 21 The crucial response of Beaufils, in admitting in substance the forgery or at least the fraud, was a narrative statement of fact about a past event. I do not see any reasonable basis for inferring that it was made pursuant to the common purpose of the appellant and Beaufils, even assuming that their purpose encompassed continued concealment of the truth of the matter from Weston. 22 The hearsay statement, the admissibility of which is in issue, comprises Ms Beaufils' question, "How is it possible to sell Laurie's property without his signature or consent?" and Beaufils' reply, "We [or I] used the fourth backsheet of a document". Unless this evidence is admissible by virtue of one of the exceptions specified in Part 3.2, s 59 of the Act makes it inadmissible. It is submitted here, although not in the Court below, that either or both of s 65 and s 66 of the Act operate to exempt the evidence from the application of s 59. Section 65 applies "in a criminal proceeding if a person who made a previous representation is not available to give evidence about an asserted fact". There was no evidence at the trial to the effect that Beaufils was not available to give evidence and there is no such evidence before us. Ms Beaufils gave evidence at the trial. In that event, it does not seem to be necessary to consider whether it might be that the matters referred to in s 65(2) might have been satisfied. I note, in passing, that s 67 of the Act was not complied with prior to trial. 23 Section 66 of the Act applies in a criminal proceeding, "if a person who made a previous representation is available to give evidence about an asserted fact". In this case, Beaufils was not available to give evidence about the fact, the Crown not having called him. Accordingly, in respect of his statement, s 66 would not permit its admission. Insofar as it is suggested that Ms Beaufils' question, which implied a factual assertion, is concerned, it is clear that she had no personal knowledge of the fact asserted and, accordingly, her statement was not "a previous representation" within the meaning of s 66(1): see s 62. It is submitted that although the words were uttered by Ms Beaufils, the relevant representation was that of Weston, as he was present and implicitly acquiescing in the making of the representation. Even if this were so, it seems to me that notice not having been sought as required under s 67 of the Act and this argument not having been put below, it is not appropriate for this Court to consider the matter. At all events, it seems to me that the evidence (of the question) would be relevant only to Weston's credibility and, accordingly, is not admissible unless otherwise permitted under Part 3.7 of the Act. Section 108 is in the following terms - (1) The credibility rule does not apply to evidence adduced in re-examination of a witness. (2) [subs (2) rep Act 55 of 1997 s 2 and Sch 1] (3) The credibility rule does not apply to evidence of a prior consistent statement of a witness if: (a) evidence of a prior inconsistent statement of the witness has been admitted, or (b) it is or will be suggested (either expressly or by implication) that evidence given by the witness has been fabricated or re-constructed (whether deliberately or otherwise) or is the result of a suggestion, and the court gives leave to adduce the evidence of the prior consistent statement. 24 Leave was not sought from the learned trial Judge to admit the statement, presumably pursuant to paragraph 108(3)(b). If such leave was sought, the Court would need to very carefully consider the application of ss 135, 136 and 137 of the Act, bearing in mind that the appellant was not present, Beaufils reply was inadmissible and the representation was only indirectly that of Weston. The representation was not directly that of Weston, if it was his at all. 25 For these reasons, I am of the opinion that the alleged conversation was not admissible and, in light of the significance which a jury may well have attributed to it in determining the issues before them, I am of the view that a miscarriage of justice has occurred. It follows that the appeal must be upheld. 26 The respondent submits that, if the questioned evidence is inadmissible so that the conviction should be quashed, there should be no new trial. It is submitted, on the admissible evidence, that any verdict of guilty would be unreasonable or could not be supported by admissible evidence so that no new trial should be ordered. 27 The appellant's submission has three strands. First, Weston made significant admissions as to the extent of his authorising Beaufils to deal with his property, that he signed many documents including transfers, that he could not rule out the possibility that he signed such documents in April 1992 and that he did not pay close attention to the documents given to him by Beaufils for signature. The second strand is the evidence of the handwriting experts called by the prosecution that they could not rule out the possibility that Weston had signed the questioned documents given the fact that he had written signatures in the past which were dissimilar to each other although, in their view, it was unlikely. The third strand was that Weston was not an honest man, he had cheated substantially on his obligations to pay tax in the past, had agreed to participate in a scheme designed to conceal that dishonesty and had a motive to attack the propriety of the transfer of the property, so that his evidence, where it conflicted with the appellant's statement, should not be accepted as truthful. 28 Considering the evidence as a whole, including the events surrounding the settlement of the contract for sale and the conversation of 11 April and the appellant's statement from the dock, I am of the view that there was evidence capable of justifying a verdict of guilt. However, in light of the error of admitting the hearsay statement to which I have adverted, this does not mean that the conviction should not be quashed. 29 As was pointed out by the High Court in Fleming v The Queen 158 ALR 379 at 392, the Court must distinguish between the fundamental role served by s 6 of the Criminal Appeal Act 1912 and that of s 8. 30 I propose that the Court should allow the appeal upon the basis that there was a wrong decision on a question of law which occasioned a miscarriage of justice, with the consequence that unless there were to be a new trial a verdict of acquittal would be entered. Having regard to the fact that the appellant has served all but eighteen days of his sentence, and having regard to the circumstances that the Crown case, though not weak was far short of overwhelming and that if there were to be a new trial, as the Crown Prosecutor candidly conceded in this Court, it would be fought upon a distinctly different basis to that which was adopted at first instance, I am of the view that this Court should exercise its discretion under s 8 not to order a new trial. 31 SPIGELMAN CJ: I agree and would add only a few words concerning what was put to this Court on "the unsafe and unsatisfactory" ground, in accordance with the traditional terminology for appeals of this character, where a submission is made that a new trial is not appropriate. 32 In Fleming v The Queen [1998] HCA 68; 73 ALJR 1; 158 ALR 379 at par 12 of the joint judgment of the High Court, after referring to the observations of Gaudron J in Gipp v The Queen (1998) 155 ALR 15 at 21 their Honours said as follows - The fundamental point is that close attention must be paid to the language of s 6(1)of the Criminal Appeal Act. Use of the potentially confusing phrase "unsafe and unsatisfactory" to cover the several different elements in the sub-section is liable to mislead. There is no substitute for giving attention to the precise terms in which s 6(1) is expressed. 33 The proposition for which that passage is now authority reinforces what the High Court said in Director of Public Prosecutions (Nauru) v Fowler (1984) 154 CLR 627 at 630 - The power to grant a new trial is a discretionary one and in deciding whether to exercise it the court which has quashed the conviction must decide whether the interests of justice require a new trial to be had. In so deciding the court should first consider whether the admissible evidence given at the original trial was sufficiently cogent to justify a conviction, for if it was not it would be wrong for making an order for a new trial to give the prosecution an opportunity to supplement a defective case. 34 See also King v The Queen 161 CLR 423 at 426-7 and 433; Johnson NSWCCA 31 July 1998 p 35. 35 In my opinion, for the reasons given by Adams J, the strength of the Crown case was not such as to justify a further trial in all of the circumstances of this case, including the circumstance as to the proportion of the sentence which has already been served. I agree with the orders proposed by Adams J. 36 ABADEE J: I agree with the orders proposed by Adams J and I agree with his reasons for such. I also agree with the further reasons of Spigelman CJ. 37 SPIGELMAN CJ: The order of the court is that proposed by Adams J.

REGINA v BROWNLEE

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