REGINA v Ross Allan LAMERI REGINA v Phillip Barry COHEN [2004] NSWCCA 217 | Case summary

1 MASON ACJ: This appeal is brought by the Deputy Director of Public Prosecutions pursuant to s 5F(3A) of the Criminal Appeal Act. It is, therefore, an appeal against a decision or ruling on the admissibility of evidence. To succeed, it must be shown that the decision or ruling was wrong and that the decision or ruling "eliminates or substantially weakens the prosecution's case". 2 The matter has been heard urgently and in the circumstances it is, I think, necessary and appropriate that the Court should decide the matter immediately. 3 The trial commenced on Wednesday last. The jury has been empanelled and, subsequent to the empanelling of the jury, a substantial evidentiary issue was raised on behalf of the two accused. Her Honour made a ruling on the matter yesterday and gave reasons which we have considered. The urgency arises because the Crown has not yet opened and the Crown opening would be affected by the correctness or otherwise of her Honour's ruling. There is also the urgency stemming from the concern about the jury. 4 The respondents to the appeal are charged on an indictment with seven counts. Four of the counts are under s 178BA of the Crimes Act 1900 and concern obtaining a valuable thing by deception. The remaining three counts are charges of money laundering and are under s 73(2) of the Confiscation of Proceeds of Crimes Act 1989. It is common ground that the substantial issue in those counts turns upon establishing guilt in the earlier four counts. 5 The main Crown witness at trial will be a Mr Meyer who is a finance broker. It would appear that he was dishonestly involved in the transactions that are the nub of the Crown case on the first four counts. The critical issue as it presently emerges is whether he was acting alone or whether, as he contends, he was acting with and on behalf of the two accused. 6 The first count is a charge that on 4 January 2000, the accused dishonestly obtained a valuable thing, namely a cheque in the amount of $203,000, by deception, namely by falsely representing that an M & C Pty Ltd invoice number 00412 was genuine. 7 As I understand the Crown case, it is that the respondents, Mr Cohen and Mr Lameri, represented to Mr Meyer and through him to the Colonial State Bank that finance was needed by a third party, Dean Richardson, to purchase saw-milling equipment from Lameri Industries Pty Ltd, a company obviously associated with Mr Lameri. Later in negotiations, it was represented that Richardson would be buying through a company, Ravelle Pty Ltd, and that the supplier of the equipment was to be M & C Pty Ltd. 8 The bank approved the loan subject to guarantees from various persons and companies. Conditions of approval were the production of sales invoices and the valuation of the equipment that was the subject of the sale. 9 The Crown case through Meyer is that Lameri created a false invoice purporting to be an invoice of the sale from M & C Pty Ltd. This invoice was used to procure the funds from the bank and the bank's cheque payable to M & C Pty Ltd was effectively appropriated by the accused. 10 It is proposed that Meyer would give evidence that having obtained the cheque, and on the instructions of Cohen given on the day the cheque was obtained, he, Meyer, endorsed the cheque, "Please pay Lameri Industries Pty Ltd for and on behalf of M & C Pty Ltd". The cheque with this endorsement was paid into the Lameri Industries Pty Ltd bank account and, by that means, the money came under the control of Lameri. 11 The Crown case is that this transaction and the ones that followed it were shams from start to finish. 12 The second and third counts involve broadly similar transactions in which the centre point was a fake M & C Pty Ltd invoice prepared by Lameri and produced to the bank by Meyer on behalf of the respondents resulting in a cheque in favour of M & C being delivered by the bank. 13 There were some differences in the underlying transaction in that the saw-milling equipment said to be the subject of a transaction was said to be sold by Lameri Industries Pty Ltd. 14 A key aspect of the Crown case in establishing the involvement of the respondent Cohen and his dishonesty in the transaction is the evidence that Meyer is proposed to give to the effect that upon receipt of the cheque from the bank, he contacted Cohen who advised him to do what he did the last time and deposit the cheque into the account of Lameri Industries Pty Ltd. 15 The fourth count had a broadly similar modus operandi, according to the Crown case. The offence is alleged to have occurred on 7 March 2000. The nub of it was the obtaining of a cheque in the amount of $252,900 and the deception charged against the respondents was the false representation that an M & C Pty Ltd invoice was genuine. 16 Once again, Meyer was the leg man and his evidence would be that he was acting on instructions and on behalf of the respondents. 17 In the case of the cheque that was the subject of the fourth count, Meyer took it to Westpac at Milsons Point and attempted to deposit it into the account of Lameri Industries Pty Ltd. The bank would not accept that cheque. Meyer's evidence is, or will be, that he rang Cohen and told him what had happened. Cohen said that he would speak to Lameri and ring him back. 18 A few days later, Cohen rang back and told Meyer that he had found a way to get the cheque into Ross Lameri's account. Cohen said they were going to set up a company called M and O Pty Ltd and change the "C" on the cheque to an "O" and get the money into Ross Lameri's account that way. 19 A week or so later, Meyer received a call from Cohen who advised M and O Pty Ltd had been set up and to give the cheque to Ross Lameri when he came in the next time. Subsequently, Meyer handed the cheque to Lameri. At that stage, it was still made out to M & C Pty Ltd. There is, however, Crown evidence that a company M and O Pty Ltd had been registered and was under the control of Mr Lameri. That cheque, however, didn't make its way into Lameri's hands because it was stopped. 20 Money laundering charges relate to the first three transactions and they depend upon proof of the crimes alleged in the first three counts and the subsequent dealings by the accused with the money which were the proceeds of those crimes. 21 A broad objection to a body of evidence was raised in a written submission dated 14 June 2004 prepared by trial counsel for Mr Lameri. It was presented to her Honour and that counsel, Mr King, spoke to it. The submission states, amongst other things, that the objectionable material: … includes details of other companies; alleged use of false names eg Allan Cavanagh; cheques being endorsed to other persons not the payee; opinions relating to anomalies in invoices; attempted purchase of properties (see Gaggin) subject to asset seizures; hearsay material re serial numbers; overseas inquiries (see Frizzel and Wilson); details of shelf companies (see Lowe); details of computer downloads; tax returns; invoices; bank documents and loan documents. 22 The transcript of the argument before her Honour was more focused and it is that transcript that gives the primary content to her Honour's ruling. 23 In essence, the trial counsel for each accused objected to evidence subsequent to the time when the M & C cheques were issued and delivered by the bank to Meyer. It was argued that the endorsements on the cheques were evidence of criminal activities being crimes that were not charged. Clearly that was correct. It was further argued that that evidence had no relevance to the offences charged. Alternatively, it was evidence that the Court was bound to reject pursuant to s 137 of the Evidence Act because any probative value was outweighed by the danger of unfair prejudice to the defendants. 24 Counsel for the accused offered to make admissions to the effect that the proceeds of the cheques handed over to Meyer made their way to Mr Lameri. 25 During the course of argument, it was indicated that Mr Lameri's defence, at least, was that Meyer was "on a frolic of his own". 26 Trial counsel for the accused Mr Cohen objected to the evidence of the verbal instructions given by Cohen to Meyer, according to Meyer's evidence. In answer to suggestions from the trial Judge that the evidence was nevertheless relevant, there was the proposal that the prejudicial effect of the evidence could be overcome by Cohen also agreeing that the proceeds went to Mr Lameri. 27 In her fairly brief reasons, Judge Payne stated that essentially what was objected to was evidence as to actions taken in respect of the cheque or cheques after they were obtained. It would appear that this in her Honour's understanding embraced the Cohen/Meyer conversations as well as some of the actions of the two accused who took trips overseas and dealt with the proceeds of money overseas in certain ways. Her Honour acknowledged that the matter was an extremely difficult one, a comment which is quite understandable given the fact that she was presented with this significant global objection prior to the Crown opening and at a time when the jury were waiting in the precincts of the Court. She said that her perception was that: [In] my view, essentially what the Crown is trying to present before the jury is other illegal acts and then to ask the jury to reason back from that activity that the accused were acting dishonestly. I am concerned that would be an improper process of reasoning in the circumstances of this case. Clearly, the jury will have to be informed of what happened to the cheques, how they were accepted into the bank accounts and then that the money ultimately went to the benefit of, as I understand it, Mr Lameri, and even Mr Cohen because apparently certain money was also obtained by him but perhaps that is a different argument. But having considered the arguments of defence counsel and also the Crown I am of the view this evidence is essentially not relevant to the charges in the indictment. If I am wrong in that, then I am of the view that ultimately the probative value of it is outweighed by the danger of unfair prejudice to the accused and, in my view, the evidence should not be allowed 28 With respect to her Honour, I am of the view that the excluded evidence was clearly relevant to the offences charged in the first four counts. It had been signalled that a major plaint of the defence would be to argue that Meyer was on a frolic of his own. The conversations between Cohen and Meyer on the day the cheque was obtained from the bank and relevant to the means whereby the proceeds of the cheque would be funnelled towards Lameri were very probative, at least on my present perception of the issues, of two key aspects of the Crown case, namely, proof that Meyer was not acting alone but as agent for and in conjunction with the two accused and, secondly, proof that the two accused were dishonest in that involvement. 29 The respondents argued before us, as they had before the learned primary Judge, that the conversations and evidence of dealings with the cheques occurred after the time frame of the offences charged. Clearly so. But it is common place for later conduct, including criminal conduct, to cast relevant light upon the nature of earlier conduct. If that later conduct takes place shortly after the earlier conduct and is connected with it, then it may obviously be seen as part of the same transaction or as having probative light in its own right. An example given in argument was destruction of evidence occurring shortly after the commission of a charged offence. The mere fact that the later conduct was itself criminal does not in itself make it irrelevant, nor inadmissible. 30 In Harriman v The Queen (1989) 167 CLR 590 at 628-638, McHugh J discusses case law where subsequent illegal conduct was regarded as relevant, probative and admissible with respect to criminal charges. One example he gives has some connection with the present case. At 629, he refers to a case of The Queen v Cobden (1862) 3 F & F 833, 176 ER 381 where three persons were charged with breaking into a railway station. 31 Evidence was led to prove that they had broken into three other stations on the same night. Bramwell B said that the evidence was admissible to prove that one of the accused "had received his share of the booty wholly from what was taken from the other stations" and that the events were "so intermixed that it [was] impossible to separate them". 32 The weight of the evidence will be obviously a matter for the jury and the fact that independent criminality is involved on the face of it may, and almost certainly will, call for the need for careful directions. But what is at issue at this stage of the trial is admissibility and that turns on relevance. 33 As I indicated, her Honour did say that if she were wrong, she would be of the view that s 137 of the Evidence Act precluded the admission of the evidence. She did not give reasons for this and I naturally recognise the caution that an appellate court needs to exercise when dealing with a matter that is not a discretionary decision but one that involves a balancing. Since, however, her Honour took the view that the excluded material wasn't relevant, then it seems to me that the balancing exercise must have got off to a bad start and run off the rails. Furthermore, as presently advised, I cannot see any basis upon which the prejudicial impact of this relevant material could be characterised as unfair. In making these remarks, I am not to be taken to be precluding the further visiting of this issue in the context of particular portions of the material. 34 As indicated earlier, this Court's jurisdiction is limited, and necessarily so. It would be most unfortunate if criminal trials were interrupted every time the Crown was met with an adverse evidentiary ruling. For one thing, evidentiary rulings are not final during the pendency of a trial. For another, there are rulings and rulings. 35 There is not a great body of jurisprudence dealing with subs(3A), but such as it is cautions the Crown against resorting to the appellate power and cautions the Court against too ready acceptance of it (see eg R v NKS [2004] nswcca 144). We must be satisfied that the nature and quality of the wrongfully excluded evidence either eliminates or substantially weakens the prosecution's case. It has been submitted that the evidence here is not of that quality or nature. 36 To be able to determine this issue, one needs to be apprised of the totality of the Crown case and the extent and nature of the wrongfully excluded evidence. Necessarily, this Court's understanding of these matters in cases brought on urgently will be imperfect and, to a degree, impressionistic. I am, nevertheless, firmly of the view that the evidence in this case which, for reasons I have indicated, was in my view wrongfully excluded, was of the description that it can be said that it substantially weakened the prosecution's case. On one view, to put the matter at its lowest, it showed that the accused were intimately involved with Meyer's actions virtually at the time the cheques were obtained from the bank. That evidence connected with other evidence from Meyer as to discussions preceding the bank transactions in question was capable of corroborating Meyer's testimony and showing that he was not on a frolic of his own, rather that he was acting as agent for or in conjunction with the appellants. 37 The exclusion of the evidence would leave it open to the respondents to raise arguments to the jury to the effect that the money which they are prepared to admit came into Lameri's hands came into those hands in circumstances disconnected from the original transactions or in circumstances not indicative of the dishonesty of the accused. To exclude that evidence, it seems to me, really creates an unreal factual context. 38 It will be for the jury to decide whether the additional material does establish to the requisite degree the involvement of the accused and their dishonesty, but it does seem to me that this material is a significant aspect of the Crown case and its exclusion brings about a substantial weakening of that case. 39 For those reasons, I propose that the appeal be upheld and that the ruling of her Honour be vacated. The reasons for making that order will, I trust, give guidance to her Honour and to those involved in the trial as to how the trial can now proceed without any further delay. It will be up to her Honour to deal with particular objections as to relevance and prejudice and the like, including objections touching the broad swathe of evidence that this Court has dealt with. 40 To the extent that her Honour's ruling has addressed parts of the evidence beyond those which I have concentrated upon, the vacating of the blanket ruling by her Honour will not preclude her revisiting it in particulars consistent with the reasons of this Court. 41 TOBIAS JA: I agree with the orders proposed by the Acting Chief Justice for the reasons that he has given and would only wish to make the following additional observations. 42 It appears that there will be evidence directly connecting the accused Lameri with the production by Meyer of the false M & C invoices. In this respect, the evidence will indicate, as I understand it, that Meyer advised the accused Cohen that the financial institutions wished a recognised supplier of the relevant goods to be engaged as Lameri Industries was not such a supplier. Cohen informed Lameri of this problem, as a consequence of which Lameri indicated to Meyer that he could obtain an invoice from a Mick Walsh at M & C. M & C was, apparently, a recognized supplier. Lameri provided such an invoice and later at Meyer's office, he prepared on his laptop computer a template of an invoice and then gave a floppy disk to Meyer to print the invoice on Meyer's office printer. However, there does not appear to be direct evidence that the accused Cohen was aware of what Lameri had done with respect to providing Meyer with the means to produce M & C invoices. 43 In these circumstances, it seems to me that there is no direct evidence, as presently proposed, connecting Cohen with the preparation or production of the false invoices or which establishes his knowledge of their falsity. 44 However, the cheques obtained by Meyer were all made payable to M & C Pty Ltd. The endorsement of, and other conduct relating to, those cheques by Meyer on the instructions of Cohen would, in my opinion, provide some evidence of Cohen's knowledge that the false M & C invoices were being utilised to satisfy the financial institutions that a recognised supplier was involved and that the M & C invoices were in fact false. 45 Accordingly, in my opinion the evidence in respect of which objection is taken would appear to be clearly relevant in relation to the s 178BA charges against Cohen in particular. 46 Furthermore, the evidence relating to Meyer's dealings with the cheques on the instructions of Cohen is clearly relevant to the money laundering charges against Cohen. This was, in effect, conceded by Cohen's counsel, subject, of course, to the argument based on s 137, in respect of which I agree with the comments and observations of the Acting Chief Justice. 47 HOWIE J: It is inimical to the administration of justice that evidentiary rulings of the complexity of those in the present matter and of apparent substantial importance to the Crown case are not raised until after the trial has commenced and the jury empanelled. 48 Her Honour struggled valiantly to understand the somewhat complex factual basis of the Crown case, the nature of the evidence objected to and the relevance of it to the case to be presented by the Crown. 49 As the presiding Judge has indicated, written submissions handed up by one of the defence counsel to her Honour were, with respect, hardly likely to throw any real light on the issues raised in the application. 50 To be fair to her Honour, she had just finished a trial with a jury immediately before commencing the present trial. In order to try to do justice to the parties, she sat well into the early evening on one of the hearing days. 51 If the Crown was aware of the nature of the challenge to the Crown's case before the commencement of the trial, it should have raised the matter with her Honour before the jury were empanelled. Although this has always been the appropriate way of dealing with pre-trial hearings of substance, it is now essential that the Crown attempt to identify challenges to the Crown case in light of s 5F(3A). 52 I believe that trial Judges should raise with counsel prior to the jury being empanelled whether there is any challenge to the Crown's case and, if there is, whether the Crown contends that the exclusion of the evidence would substantially weaken its case to be presented to the jury. 53 The Crown does not require leave to bring such an appeal to this Court but the failure of the Crown to do what it can do to prevent the need to appeal to this Court after the jury has been empanelled might well result in this Court being unpersuaded that the rejection of the evidence is a matter falling within the scope of the section. 54 In my view, it was unfair to her Honour to be required to determine the objection with the jury empanelled and the Crown waiting to open to the jury and any criticisms of her reasons or the correctness of them must be viewed in this light. 55 I agree with the reasons given by the presiding Judge and Tobias JA. The appeal should be allowed. 56 MASON ACJ: Justice Tobias and I would endorse the comments of Justice Howie on the procedural aspects of the appeal. The orders of the Court will be as I have indicated. **********

REGINA v Ross Allan LAMERI REGINA v Phillip Barry COHEN

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