stay upheld on appeal. Dietrich v R

stay upheld on appeal. Dietrich v R - [1995] SASC 4925 - SASC 1995 case summary — Zoe

[18]

Mr Wells argued that the combination of the complexity of the case, the lack of legal representation and the appellant's ill health, resulted in the trial miscarrying thereby depriving the appellant of a chance of acquittal which would have been fairly open to him. The case was undoubtedly complex, but I doubt whether the appellant's health impaired his performance. It was a complex trial and it was unfortunate that it had to proceed with the appellant unrepresented. If he had been unable to obtain legal representation through no fault on his part, I would not have hesitated in holding that he had not had a fair trial due to lack of representation. The appellant, however, deprived himself of representation by his own actions. The community is entitled to insist that a person accused of crime faces trial. An alleged offender cannot be permitted to escape trial by not taking the appropriate steps to obtain legal representation. The learned judge conducted the trial with exemplary patience and consciousness of his responsibility to the unrepresented accused. He afforded him every courtesy and assistance. He gave the appellant considerable latitude and significant indulgences. There was a "lay day" each sitting week to assist him and many of the sitting days were not full days. Regular adjournments were granted at the request of the appellant to give him time for reflection and preparation. The judge gave him helpful and appropriate advice as required. The trial was conducted with conspicuous fairness and consideration for the unrepresented accused. The trial judge did everything possible to ensure a fair trial despite the lack of representation. The only disabilities which the appellant suffered were those which he imposed on himself by depriving himself of the opportunity for legal representation. The trial was as fair as it could be in the circumstances created by the appellant's conduct. He has no justifiable complaint about the fairness of the trial.

[25]

The first incident occurred on the second day of the trial. A juror sent the following note to the judge: "I have concerns with this trial. I work for a department that has had dealings with Mr Karounos in regards to industrial matters. I do not wish to jeopardize the trial and would like to discuss this matter." The juror was questioned by the judge in the absence of the jury. She said that she was employed by the Department of Labour. The following questions and answers then occurred. "Q. Are the dealings that you say that department has had with Mr Karounos such that you would find it difficult to discharge your duty as a juror in this trial. A. I think I might have trouble with that. I wasn't aware of this before. I apologise. Q. You don't need to apologise. Of course, jurors can't be aware of everything. We do our best to eliminate potentially difficult problems. What would the difficulty be because of your awareness of these dealings with Mr Karounos. Would you not be able to be unprejudiced in your approach to your task. A. I didn't really discuss the case. When the Plympton Park Centre came up, it is an area that my region deals with, and I just wanted to make sure whether any of the members at my work place were involved with any dealings with Mr Karounos. All I mentioned was Mr Karounos's name, and they told me that they had visited Plympton Park Centre for award matters. I didn't say any more, but they also brought in Mr Hodby, and it has concerned me whether I should be siting on this trial or not. Q. I understand your concern, and, quite correctly, you have raised the matter. Could I ask a question from another point of view. Is there any information that has come into your possession whilst working with the Department of Labour that relates to Mr Karounos and his dealings with the department. A. I didn't know about Mr Karounos beforehand. There is nothing that relates to this particular trial. Q. The information that has come to your possession, does that embarrass you as a juror who is expected to bring an unbiased, unprejudiced and open mind to their task as a member of the jury. A. I don't think it is as such, no. Q. Now being aware of these dealings and this contact between Mr Karounos and the department, you still feel that you can bring an open mind to your task as a juror. A. I think I could, yes." After discussion with counsel there were further questions and answers. "Q. I want to ask this question in a general sort of way. When people have expressed opinions about somebody else, they often fall into one of three categories: They said something adverse, positive, or they may have said something which is quite neutral. Turning your mind to those three sorts of categories, did these comments fall within one of those three categories. A. It wasn't neutral, and it wasn't a positive response.

[53]

The learned trial judge gave the jury a lengthy direction as to what he described as "the co-conspirator's rule of evidence", permitting use against the accused of acts and declarations of co-conspirators outside his presence. He identified the evidence under consideration as follows: "The Crown says that there is reasonable evidence given by Mr Hodby which has the effect of bringing into play the co-conspirator's rule of evidence, which, as I explained to you yesterday, allows you to use against the accused, George Karounos, the otherwise inadmissible evidence of documents signed by Mrs Hunt, including the Campbell Park contract of sale and purchase (Exhibit P78) - which you may conclude, by a consideration of it, bears the signature of Mrs Hunt - the Campbell Park transfer (Exhibit P77B), and the Campbell Park mortgage (Exhibit P77A), the document which, according to the evidence of Mr Hodby in particular, was signed at 30 Chesser Street on 29 August 1986, each of those documents, according to the undisputed evidence, being signed by Barbara Hunt, or bearing her signature." His Honor told the jury that that evidence could be used against the accused only if there was other reasonable evidence of his complicity in the alleged conspiracy. He then directed them as follows: "I tell you, ladies and gentlemen, that there is reasonable and independent evidence (if you accept it as true and reliable) in the form of Mr Hodby's evidence of the so-called 'secret meetings' and in the form of the evidence of Mr Doubell, which provides some independent support for the evidence that Mr Hodby and the accused were together alone in the Gold Members' Room on the occasion of one of the alleged 'secret meetings'. There is further reasonable evidence in the form of Mr Hodby's evidence, supported, as that is, by the evidence of Mr McGlashan and Mr Opie, to a degree, evidence which is independent of the acts or statements of the alleged co-conspirator, Mrs Hunt, that the accused was present at the office in Chesser Street when various documents were executed, from which, in conjunction with the evidence of the alleged 'secret meetings', it could be inferred that the accused participated in the alleged conspiracy."

[60]

Mr Hodby denied those suggestions. This leads me to tell you that there is no evidence before you from any witness either to support the suggestion put by the accused or to controvert the denials. You ought not to treat such suggestions as if they were evidence." The learned judge commented upon statements by the appellant in his final address that Hodby was lying about the alleged dishonest agreement and the meetings at which it was allegedly arrived at and the implication that no such agreement or meetings took place. He said: "I must tell you that there is no evidence to the effect that 'the secret meetings' did not take place, or to the effect that no agreement was reached. The prosecution evidence to the effect that they did take place, and that an agreement was reached, has simply not been contradicted or explained." He further said: "In so far as that assertion might suggest to you that there was some evidence to support an alternative scenario of the events said to have taken place in the Gold Members' Room during the two 'secret meetings' consistent with innocence, namely that such meetings were not held, that nothing was agreed, and that Mr Hodby was necessarily telling lies, I think, ladies and gentlemen, that the accused went further than he should have, because he was purporting to introduce new evidence in his Address to you. I tell you that the suggestion made by the accused in his Address to the effect that Mr Hodby was telling lies, in particular about the alleged 'secret meetings' and the agreement reached at the second 'secret meeting', is not evidence that the meetings did not take place, and that no agreement was reached. There was simply no evidence to the effect that the 'secret meetings' were not held, or to the effect that, to suggest that they were held and that an agreement was reached, was a lie. Mr Hodby's evidence, and that given by Mr Doubell, and that contained in the Domitix minutes (the Agenda) remains uncontradicted and unexplained." His Honor also commented on a submission to the jury by the appellant that "if there is anything sinister about the making of that loan of $520,000 then Mr Hodby, and Mr Hodby alone, knew about it." His Honor said: "The implication from this submission, ladies and gentlemen, is that neither the accused nor Mrs Hunt knew about it. For reasons given elsewhere in my summing up, I am obliged to tell you that there is no evidence that neither the accused nor Mrs Hunt knew about it, and it is legitimate for you to have regard to the fact that the accused has given no evidence or explanation of the Crown case, apart from what he told the police, as a consideration in making the inference of guilt from the evidence for the prosecution less unsafe than it might otherwise appear to be. I tell you that there is no evidence to support the alternative scenario that neither the accused nor Mrs Hunt knew that there was something sinister about the making of the $520,000 loan in the sense that the security offered was inadequate. The prosecution scenario to the effect that the conspirators knew that they were parties to an agreement for the performance of a dishonest act or course of conduct, that they knew that their involvement was part of a larger dishonest scheme, that they were acting dishonestly, and that they knew that the scheme or act might result in economic prejudice to the alleged victims, has simply not been contradicted or explained."

[83]

It is unnecessary, for present purposes, to embark upon a detailed analysis of the factual history, as to which evidence was led at trial. The salient features may be summarised as under:- . Hodby was a well known land and finance broker. As an adjunct to his broking practice he had, from time to time, received considerable sums of moneys from members of the public for investment on their behalf. It was the Crown case that all of these moneys were received on the express or implied basis that they were to be on-lent to third parties on the security of adequate mortgage securities over real property. . Over a period of some years up to mid 1986 certain of these funds were lent to companies involved in what was known as the "Super Centre" project on Marion Road. Such loans included mortgage advances to Krakat Pty Ltd ("Krakat") and Vimited Pty Ltd ("Vimited"), secured over Super Centre properties. The appellant, Sophia Karounos (his sister-in-law) and Hunt were all associated with those companies, either directly or indirectly. . At the relevant times the appellant was an undischarged bankrupt. Nevertheless he continued to conduct business operations, including the development of the Super Centre, through various corporate entities, including the above companies, of which Hunt and Sophia Karounos were directors. . In June 1986 a company associated with the appellant called Domitix Pty Ltd ("Domitix"), of which Hunt was, at some point, made a director, acquired Hodby's businesses. This seems to have been a conditional acquisition. Domitix caused an accountant to look into the businesses immediately after takeover, with the result that it rapidly became apparent that Hodby had been guilty of serious financial irregularities in the conduct of them -indeed they were in a parlous state, due to defalcations and improper conduct on his part. . In August 1986 the businesses were retransferred by Domitix to Hodby, at a point at which the appellant, Hunt and Hodby were all well aware of the situation related to and the irregularities associated with them. . This occurred at a time at which large sums of money had already been made available by Hodby, on behalf of his clients, to Krakat and Vimited. However, the appellant told Hodby that a further $420,000 or thereabouts was urgently required for the Super Centre project. . After discussion of the fact that the appellant could not offer alleged, hatched by the appellant and his alleged co-conspirators, at a private meeting at the Super Centre, whereby two separate advances could be made on mortgages in respect of land at Meningie ("Campbell Park") and Moana respectively, acquired by a company associated with the appellant and known as Karta Pty Ltd ("Karta"), the loans being inflated well beyond the purchase prices of those properties; so as not only to provide funds for the purchases, but also to produce surpluses aggregating $420,000. . According to Hodby the appellant virtually threatened him with exposure in relation to his admitted earlier unlawful conduct with moneys entrusted to him unless he went along with the scheme. He said that he therefore reluctantly agreed to the proposal. . In the event a mortgage loan of $520,000 was arranged in respect of the Meningie property (which Karta purchased for $300,000) and a like loan of $240,000 was made available in respect of the Moana land (which was purchased for $40,000). However, both Sophia Karounos and Hunt also personally signed the mortgages as principal debtors. The charge against the appellant specifically focuses upon the Campbell Park property transaction. . Settlement in respect of these transactions took place on 12 September 1986 and 29 August 1986 respectively. About a month later Hodby voluntarily went to the police and confessed to his misdeeds in respect of his businesses. He later became bankrupt. In the course of Hodby's examination by the Official Receiver, the above transactions came to light and were reported by the latter to the appropriate authorities. . Hodby was duly prosecuted and sentenced to a custodial term in respect of various offences to which he had confessed. He was, however, granted immunity from prosecution in respect of his part in the Karta transactions, upon undertaking to give evidence against the appellant. He thus became a principal witness for the Crown at the appellant's trial. . In giving evidence Hodby asserted that, at the time of the transaction the subject of the charge, the appellant, Sophia Karounos and Hunt all well knew that the funds being lent to Karta were funds to which members of the public were entitled and that

[212]

What the learned trial judge did say was:- "The accused did not give sworn evidence in his defence, and the accused called no witnesses for the defence. He did, you will remember, tender a number of documents during the prosecution case. It was the accused's legal right not to give sworn evidence. It is the law today that an accused person has the right to do one of two things at his trial. First, he may remain completely silent, leaving it up to the prosecution to prove the case against him, if they can. There is no obligation upon an accused person to enter the witness box and give evidence. Secondly, an accused can choose to go into the witness box and give evidence on oath, and be subject to cross-examination; and an accused, whether or not he gives evidence on oath, can call witnesses in his defence, and/or tender exhibits. This accused, George Karounos, chose to take the first course. He remained silent. By doing so, he exercised a right which the law has given him. You should bear steadfastly in mind that the accused is not required to prove his innocence. His silence can never displace the onus (or burden) which is on the prosecution to prove his guilt beyond reasonable doubt. A failure to offer an explanation does not, of itself, prove anything. Nor does it, in any strict sense, corroborate or support and confirm other evidence, but the failure of an accused person to contradict, on oath, evidence that to his knowledge must be true or untrue can logically be regarded as increasing the probability that it is true, that is to say a failure to deny or explain may make evidence more convincing, but it does not supply its deficiencies, or plug up the gaps in it. To explain this another way; when, as in this case, an accused fails to accept the opportunity to place before the court evidence of facts within his knowledge which, if they exist at all, would explain or contradict the evidence against him, you may more readily accept that evidence which is against him. It is not just because uncontradicted evidence is easier or safer to accept than contradicted evidence. It is because doubts about the reliability of witnesses, or about the inferences to be drawn from the evidence, may be more readily dispelled in the absence of contradictory evidence from the accused, if he could be expected to give or call it. Hypotheses (or explanations) consistent with innocence may cease to be rational or reasonable, in the absence of evidence to support them, when that evidence, if it exists at all, must be

[216]

conduct might result in economic prejudice to the lenders, members of the public - Hodby clients. There is a fine line of distinction between drawing the inference of guilt from silence (which is not permissible) and drawing an inference otherwise available more safely (which is permissible) because the accused had not supported any hypothesis (or explanation) consistent with innocence from facts perceived to be within his knowledge. In determining whether the prosecution has discharged the onus (or burden) of proof to the requisite standard (beyond reasonable doubt), I tell you that it is relevant to assess the prosecution case on the footing that the accused has not offered evidence of any hypothesis (or explanation) which is consistent with innocence. So it is that the failure of the accused to give evidence is not, of itself, evidence. It is not an implied admission of guilt by conduct. It cannot be an admission of guilt by conduct, because it is the exercise of a legal right which the accused has; namely, to put the prosecution to its proof. When, as here, the accused elects to remain silent at trial, the silence cannot amount to an implied admission. The accused is entitled to take that course, and it is not evidence of either guilt or innocence. Silence on the part of the accused at this trial cannot fill in any gaps in the prosecution case. It cannot be used as a makeweight. It is only when the failure of the accused to give evidence (for example, as to whether or not an agreement was entered into, and as to his state of mind) is a circumstance which may bear upon the probative value of the direct and circumstantial evidence which has been adduced by the Crown, and which you are required to consider, that you may take the accused's failure to give evidence into account. You may take it into account only for the purpose of evaluating the evidence. The accused, if anyone, can have explained what, if anything, occurred in the Gold Members' Room, and what was in his mind at the relevant times. He was in a position to deny, explain or answer the evidence against him. His failure to give evidence is capable of being seen as strengthening the prosecution case by enabling you, in the absence of any explanation by the accused, to accept more readily the inferences which the prosecution contended as the only rational inferences from the evidence. I repeat that the accused is not bound to give evidence, and that the onus of proof remains on the prosecution to prove guilt beyond reasonable doubt. What I am saying to you is that, recognising those basic principles, it is nevertheless legitimate for you to have regard to the fact that the accused has given no evidence (or explanation) of the Crown case, apart from what he told the police, as a consideration to be taken into account making the inference of guilt from the evidence for the prosecution less unsafe than it might otherwise possibly appear. The only version of the facts before you is that proved, if proof it be, by the prosecution witnesses and the documents. There is no evidence to support other scenarios."

[218]

Mr Wells QC was, however, on sounder ground when he criticised the direction of the learned trial judge concerning the answers given by the appellant to police questions, at a time years after the relevant events. The evidence reveals the following exchanges between the appellant and Detective Sergeant Gibb:- "... I said 'My name is Detective Sergeant Gibb and this is Detective Sergeant Griffiths. We are State police officers, Mr Karounos, attached to the Corporate Affairs Commission. I must inform you that this is a police interview and it's not to be confused with a hearing under the Corporate Affairs Commission's powers. For the purpose of identification, would you please state your full name and address?' He said 'George Karounos, 59 Thomas Street, South Plympton.' I said 'Do you have a second Christian name, Mr Karounos.' He said 'I do not.' I said 'I now wish to ask you a series of questions about your business involvement with a man named Ross Hodby, your involvement with the companies Krakat Pty Ltd, Domotix Pty Ltd, Karta Pty Ltd and Vimited Pty Ltd and your involvement with the purchase of a property at Meningie called Campbell Park. I must warn you that you are not obliged to answer any of my questions and that if you do so your answers will be recorded and may be used later in evidence. Do you understand what I have said?' He said 'I do.' I said 'Do you intend to answer any of my questions?' He said 'On the advice of my solicitor, I do not intend to answer any questions. I understand that irrespective of what answers I give to your questions it is your intention to lay charges against me and that you will not review that decision. I understand that the matters to which your questions relate are now over 43 months old and notwithstanding that you have had ample opportunity to do so, at no time throughout those 43 months have you or any other person directed any question or enquiries to me in respect of those matters. I, of course, deny any charges. I believe that the decision to charge me is politically and otherwise motivated and that the laying of charges against me are an abuse of process, accordingly I repeat on the advice of my solicitor I don't wish to answer any of your questions. I said 'Thank you. Mr Karounos, I'm now reporting you for the common law offence of conspiracy to defraud in relation to the purchase of a property known as Campbell Park by Karta Pty Ltd in 1986 and the subsequent mortgage of $520,000 granted to clients of a Mr Hodby. You will receive a summons in the future to attend court. Do you understand what I have said?' He said 'I do.' I said 'That concludes the interview, however I will require some personal particulars from you after the interview. Thank you.'"

[224]

Complaint was further made by the appellant in relation to the direction of the learned trial judge with regard to the so-called "co-conspirator's rule". That direction (as far as relevant for present purposes) was expressed as follows:- "The co-conspirator's rule, in its most basic form, operates by way of exception to what we lawyers know as 'the hearsay rule of evidence', which excludes hearsay evidence (that is to say, the rule of thumb which excludes oral evidence by a person of what another said or did outside of the presence of the accused or documents or things in documentary form of which the accused was not the author). The co-conspirator's rule provides that any spoken or written statement or act or document of a co-conspirator said or done or brought into existence in furtherance of (that is to say, in the transaction of) the conspiracy and during its currency is admissible (and may be received in evidence) against each other co-conspirator as evidence of the truth of any assertion or implied assertion contained in it. It may go to prove (by inference) the existence of a common plan, to prove (by inference) what was done in furtherance of the plan, and, in conjunction with other evidence (if any), to prove the accused's participation in it. This may only happen, ladies and gentlemen, if a foundation for the reception of this evidence is laid by independent proof of the participation in the conspiracy of the person against whom this evidence is sought to be admitted (in this case, the accused). The co-conspirator's rule by definition supplements the proof of conspiracy by other means. This is because the accused's complicity in a conspiracy must be established by other means before the court can reply upon evidence adduced by the co-conspirator's rule. I tell you, ladies and gentlemen, that there is reasonable and independent evidence (if you accept it as true and reliable) in the form of Mr Hodby's evidence of the so-called 'secret meetings' and

[230]

Having referred to dicta illustrating the opposite approach, as applied in Canada, the High Court continued:- "... at the risk of repetition it is instructive to set out a passage from the judgment of Young CJ in Minuzzo and Williams (1984) VR at 431 which illustrates the complexity which must necessarily be introduced when this approach is adopted in charging a jury: 'An accused person is entitled to have his case considered upon the evidence admissible against him. In a conspiracy case such as the present there are three classes of evidence to be considered, namely (a) evidence of the acts and declarations of the accused whose case is being considered, (b) evidence of the acts and declarations of co-accused from which the conclusion that there was a combination might be drawn, and (c) acts and declarations of co-conspirators done or made in pursuance of the combination. Most evidence which falls within category (b) will also fall within category (c). Those two categories are not intended to be either co-extensive or mutually exclusive. Evidence in category (b) may be used in order to establish the conspiracy ... Evidence in category (c), which is sometimes described as evidence in furtherance of the conspiracy, may only be used against an accused whose case is being considered once there is some evidence that that accused is connected with the conspiracy. But it is not necessary that the jury should be satisfied of the guilt of the accused before they can use evidence of category (c). Satisfaction of guilt of course requires satisfaction beyond reasonable doubt. But evidence falling into category (c) can be used against an accused once prima facie proof of the accused's connection with the conspiracy has been given ... The prima facie evidence which is here referred to is evidence described as directly admissible against the accused connecting him with the conspiracy alleged. By evidence directly admissible against the accused is meant in this context evidence other than the acts and declarations of the alleged co-conspirators not in the presence of the accused. Whether there is sufficient evidence directly admissible against an accused connecting him with the conspiracy to make evidence in category (c) available to be used against him is a question for the jury.' Consideration of that carefully worded and clearly expressed passage as a whole inevitably leads one to doubt the proposition that the sufficiency of evidence of participation directly admissible against the accused is appropriately a question for the jury. Nothing is more likely to discredit and undermine the institution of trial by jury than a requirement that a trial judge explain to the jury matters of law in terms which are unlikely to be understood or retained by them. ... The preferable view is that the trial judge alone should determine the sufficiency of the independent evidence. The question is initially one of the admissibility of evidence of acts and declarations occurring outside the presence of an individual accused and for that reason a question for the trial judge. If he determines that the evidence of the acts and declarations of others is admissible to prove the participation of the accused, it is anomalous that the jury should, in effect, be required to determine the same question for themselves. To require them to do so necessitates a direction which is of unacceptable complexity."

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Cases Cited (28)

GEORGE XAROUNOS v. R No. SCCRM 94/32 Judgment No. 4925 Number of pages - 56 Criminal law and procedure (1995) 63 SASR 451 [1995] SASC 4925 (3 February 1995)