Watkins v R

[2008] NSWCCA 88

Court of Criminal Appeal (NSW)|2008-02-28|Before: McClellan CJ, Price J, Simpson J, Clellan CJ

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At a glance

Source facts

Court

Court of Criminal Appeal (NSW)

Decision date

2008-02-28

Before

McClellan CJ, Price J, Simpson J, Clellan CJ

Source

Original judgment source is linked above.

Judgment (45 paragraphs)

[1]

Background 8 The Crown case at trial was as follows. From April 1998 the appellant was employed by a company called Tasman KB Pty Ltd (to which I will refer as "Tasman KB", or sometimes, as "the company") as a "financial controller". He was a qualified accountant. The company was a family company, operating a (highly successful) timber business. From 1987 to 2001 a New Zealand company, Fletcher Challenge Australia Limited, owned a 50 percent share in Tasman KB. The principal of Tasman KB was Mr Robert Frost, known as Bob Frost. Until 2001 his title was Managing Director. 9 Also employed in the company were his son, Neil Frost, his son-in-law David McAndrew (who was married to Robert Frost's daughter, Kaylene) and Gordon Wood. There were other employees to whom detailed reference is unnecessary.

[2]

10 At the relevant times Neil Frost and Mr McAndrew alternated annually as company directors. Both had authority to sign Tasman KB cheques. The appellant did not have that authority. 11 For many years prior to 1998 (when the appellant joined the company as an employee), Gordon Wood was employed by it, and held the position of company secretary. From the time of his employment the appellant was also designated company secretary. Except for a short time much earlier, Mr Wood was not a signatory to any of Tasman KB's bank accounts. Mr Wood is an uncle of the appellant; he is the brother of the appellant's now deceased mother. 12 The appellant's duties included the preparation of cheques for payment of company accounts, for signature by one of the directors authorised for that purpose. Until about 1999 he did this by handwriting cheques from a conventional cheque book. In about 1999 the company switched to a computerised system which generated cheques electronically. Neil Frost gave instructions to the appellant that the manual cheque book was no longer to be used, and any remaining cheques were to be destroyed. 13 Until the electronic payment system came into operation, the company's account paying process involved receipt of an invoice, preparation (by office staff) of a cheque requisition, signing (by the appellant) of the cheque requisition, preparation (by office staff) of a cheque, signature (by a cheque signatory), and posting by the appellant. The paperwork in the accounts included "coding", that is, identification of the nature or category of expenditure involved. After the payment process was completed the requisition and invoice were filed together. 14 To the extent that manually-prepared cheques did (contrary to Neil Frost's instructions) continue to be used after computerisation, the system still involved code identification of the nature or category of payment. 15 Tasman KB dealt with a major supplier, Austral Softwoods Pty Ltd ("Austral"). Austral was, in Robert Frost's words, "under capitalised", and, from time to time, suffered cash flow problems. Since Tasman KB was heavily dependent upon Austral for timber supplies and had an interest in Austral's continued viability, Robert Frost agreed, at times, to make advance payment for supplies.

[3]

Other circumstances 16 On 9 August 1999 the appellant's mother, Ms Thelma Watkins, died. By her will she left the whole of her estate to the appellant, excluding her daughter (the appellant's sister), Ms Dorothy Sansom. On 14 December 1999 Ms Sansom filed, in the District Court of Port Macquarie, a claim against the estate under the provisions of Family Provision Act 1982. Whether for that reason or some other, the appellant and his sister were, and remained, estranged. Ms Sansom's claim was bitterly contested (but was ultimately settled). 17 Ms Sansom was represented in that litigation by Mr Kevin Byrnes, a solicitor and the principal of Byrnes Lawyers, practising at Port Macquarie. 18 In May 2000 Mr Wood told Ms Sansom that the appellant was withdrawing large sums of money from his personal account. His concern, as expressed to her, was that the appellant was, prior to the resolution of the Family Provision Act claim, depleting the estate of her mother. Ms Sansom promptly passed this on to Mr Byrnes. Mr Byrnes telephoned Mr Wood, who confirmed that he had given that information to Ms Sansom. However, according to Mr Byrnes' evidence, on 6 June 2000, in a further telephone conversation, Mr Wood told him that his apprehension had been wrong. Mr Byrnes' relevant evidence in the trial is recorded as follows: "Well I spoke to Mr Wood and I have a pretty clear recollection of this, he told me that he had made enquiries and he told me that what Mr Watkins was doing was legitimate. He said that it was a way of getting money for David McAndrew, who I understood to be an officer of the company. He said that Bob Frost, who he told me was the fellow who owned the company that had a 50 percent share in it, knew about it - I'm sorry. My file note says 'Bob Frost knows about it', and then underneath it it says 'I am sure he knows about it'. So the best of my recollection that's what he said to me. 'Bob Frost knows about it, I'm sure he knows about it'. He said to me that the cheque butts were made out to Westpac, they go into the books as sundry charges and that Mr Watkins gets no benefit from these transactions."

[23]

Payable by direct credits Feb. Details attached - then spread March - June inclusive." 33 The cheque that accompanied this requisition was also signed by Mr McAndrew. The payee line was the same as in the two previous instances, and the same issue arose as to when "T Watkins" was inserted. 34 Whether "T Watkins" was on the cheques at the time the appellant handed them to Mr McAndrew for signature was a major factual issue, described in the summing up by Berman DCJ as "fundamental", in the trial. 35 I have already mentioned that the company record keeping system required identification of a code to which the expenditure was referable. In each of these three cases, the expenditure was coded as "Expenses". That, or something similar, was the coding allocated to six of the cheques the subject of the charges, those referable to Counts 1 to 3 and 5 to 7 on the indictment. These cheques were not in round amounts, but amounts with odd numbers of dollars and cents, as though drawn to pay a specific account or series of accounts. The cheque the subject of Count 4 identified "Asset accounts" as the category of expenditure and was in the sum of $69,747.90. These seven cheques were drawn and presented between July 1999 and February 2000. They total $301,587.02. 36 The next 14 cheques in question, drawn and presented between March 2000 and November 2000, were coded as payment to "Austral Softwoods". Except for one of these, the subject of Count 18, these cheques are in round figures - $20,000, $25,000, $30,000 and $50,000. They total $428,631.75 37 Of the remaining cheques, 16 were coded as "Loan to Bob Frost"; three as "payments to Bob Frost"; one as a "Loan to Ms K McAndrew"; and two as "payment to QBE Insurance". They total $1,512,423.45. The total amount involved in the cheques was $2,242,642.22. 38 All cheques were signed by Mr McAndrew. As I have stated above, except for the three I have mentioned, no cheque requisitions have been found. The cheques themselves were retrieved from the bank and were in evidence. 39 All cheques were paid into the appellant's personal account.

[24]

The trial 40 Critical evidence was given in the prosecution case by Robert and Neil Frost, David McAndrew, Gordon Wood, and a forensic document examiner, Christopher Anderson, who examined the cheques and cheque requisitions. 41 Mr McAndrew said that initially he had been of the view that the signatures on the cheques were not his, but, by the time he gave evidence, he accepted that he had in fact signed them. He was adamant that, when he signed them, the payee line had not included the appellant's name. Considerable support was given to this evidence by Mr Anderson. 42 Mr Anderson found two reasons for concluding that "T Watkins" had, at least in some cases, been inserted after the words "Westpac - St Marys". In a number of the cheques "T Watkins" was written with a different pen, having a different coloured ink. And Mr Anderson noted that the spacing between "Westpac" and "St Marys" was "quite wide", whereas the spacing between "Payee" and "T Watkins" was narrower, and "T Watkins" seemed to be "cramped up in there". He thought it "odd" that that would occur if "T Watkins" was the first entry written. 43 I would add that simple lay examination of the cheques supports both Mr McAndrew and Mr Anderson. In some instances, it is apparent, the space left between the printed word "Payee" and the written words "Westpac - St Marys" was inadequate for the name "T Watkins" to be inserted comfortably, and it appears to have been squeezed into the available space. 44 Mr McAndrew said that he signed the cheques, believing that the purpose was to transfer Tasman KB funds from one company account to another, in order to pay creditors. 45 Evidence was also given in the Crown case tending to establish a motive; this was that the appellant suffered from a gambling habit. There was evidence of an article published on 4 March 2002 in The Daily Telegraph, containing a photograph of the appellant and identifying him as "Sydney's Sports Bag Punter", who carried large amounts of cash to the racecourse in a sports bag. Of course, this evidence could not establish that the appellant did have such a gambling habit; the article appears to have been introduced into evidence as showing what precipitated the investigation that resulted in the appellant's arrest. (Just how that furthered the Crown case is not apparent to me.) However, it also precipitated an investigation into his gambling practices, and this produced very extensive TAB telephone betting accounts. This evidence showed that, over a period from January 1999 to August 2002, the appellant placed bets by telephone totalling in excess of $6 million, incurring losses totalling more than $800,000. 46 The article prompted Robert Frost to make inquiries of the appellant. Mr Frost said that the appellant told him that he had just received an inheritance from his parents, that he had followed racehorses all his life and had devised a betting system that he wished to follow, that he had put $28,000 of the inheritance towards implementing the system, that at that stage the system was successful and he was winning, but intended to shut the system down and walk away with the profits. 47 Mr Frost then initiated an internal audit of the company's financial records. As a result of what was learned from that, in July 2002 Mr Frost questioned the appellant about a number of the cheques, in the presence of both the internal and an external auditor. The appellant expressed concern at the nature and method of the questioning, and left the company's employment. Mr Frost observed that the appellant already had his personal belongings packed. 48 Also in evidence was a reconciliation of the appellant's bank account records over the period represented by the cheques. This showed that numerous cheques had been drawn, payable to cash. Many, though far from all, were in the sum of $9500. The reconciliation also showed deposits, in sums ranging from $500 to $80,000, into the appellant's TAB account. 49 Another very significant piece of evidence was given by Mr Morris Maroon. Mr Maroon had been a tax adviser to Tasman KB and those involved with it, and had come to know, and be friends with, the appellant. Mr Maroon shared the appellant's interest in gambling on racehorses. After the investigation into the appellant's activities began, Mr Maroon was asked by Robert Frost to speak to the appellant. By this time, Mr Frost was aware that a large amount of money was missing from the company's accounts. On a Sunday night Mr Maroon visited the appellant at his home. The transcript records his evidence as follows: "I'd indicated to Doug there was a large amount of money missing, in the millions and after discussion, from my best recollection was he denied it was millions and said it was much less than that, and the figure that comes to my head is $900 million (as said), or less than a million dollars that he had said he had taken, words to that effect."

[25]

(It is obvious from what follows that the reference "$900 million" was a mistake and should have been $900 thousand.) 50 Mr Maroon said that he was somewhat comforted by this, because he took the view that the appellant had sufficient assets to cover the repayment of a sum of $900,000 and he might therefore be able to escape criminal charges. 51 No cross-examination was directed to Mr Maroon challenging this aspect of his evidence. 52 I have already mentioned the evidence given by Mr Byrnes concerning his conversation with Mr Wood on 6 June 2000. Very heavy reliance was placed on this evidence on behalf of the appellant. It will be recalled that Mr Byrnes' evidence was that Mr Wood told him that the withdrawals of funds made by the appellant were known of, and (by implication) authorised by Robert Frost. Mr Wood gave a contrary account of that conversation. He agreed that he had learned, from office staff, that they had been asked to collect money from the appellant's personal account, in large amounts, and that he had therefore made the telephone call to Ms Sansom mentioned above and conveyed by her to Mr Byrnes. (In the trial there was no direct evidence from Ms Sansom as to this, or anything else.) Mr Wood agreed that Mr Byrnes had telephoned him, and confirmed that he had, in effect, repeated what he had said to Ms. Sansom. 53 As to the later (6 June) conversation of which Mr Byrnes gave evidence, Mr Wood had a different recollection. He said that at the time of these conversations he was unaware that cheques from Tasman KB were being deposited into the appellant's account, and that his focus was upon the appellant's withdrawal of large amounts of cash, which he (Mr Wood) assumed were coming from the appellant's mother's estate which was subject to the litigation. He said: "At some stage Mr Byrnes said that it was for the benefit or for use by David [McAndrew]." 54 On the appeal, Mr Byrnes' evidence in this respect was supported by a contemporaneous file note, which reads: 6.6.00 Telephone attendance on G Wood (10 mins). It is legitimate Way of getting money out for David McAndrew - way of getting it out of Co. Bob Frost knows about it. I am sure he would know Cheque butts - made out to Westpac Sundry charges Doug had no benefit from it.

[27]

The defence case 55 The defence case was foreshadowed in cross-examination of various Crown witnesses. (It came as no surprise - the appellant had given evidence in the previous trial.) It was put to Robert Frost and Mr McAndrew (and denied by both) that they had requested the appellant to make funds of his own available in cash, for payment of various accounts (often in very substantial sums), for which he was reimbursed by cheques made out to him. It was put to Robert Frost (and denied) that he (Robert Frost) was a significant, but secretive gambler, and that he used the appellant on many occasions to place bets on horse races and other sporting fixtures. The attempt to paint Robert Frost as a gambler was sustained - questions of that genre were put to a number of prosecution witnesses. None accepted the proposition. 56 The appellant gave evidence. His case in chief was simple and short. He accepted that he had written the cheque requisitions and the cheques, had presented them to Mr McAndrew for signature, and had paid them into his own account. He had done this, he said, on the express authorisation and, indeed, instruction, of company directors, specifically Robert Frost and Mr McAndrew, and, in the case of the fourth cheque, Neil Frost. He said that the "asset accounts" to which that payment was coded was to do with expenses for "Y2K" compliance, and that Neil Frost had told him that, by paying cash, he was able to obtain the necessary services and facilities at "a very competitive price". The cheque (the subject of Count 38) that had been coded as a loan to Ms K McAndrew was written at the request of Mr McAndrew; on presentation the funds were provided in cash to Mr McAndrew. 57 He said that the payments coded as "Austral Softwoods" represented cash provided to Mr Bob Frost on his request, and that the cash was handed to Mr Frost. This was done because Mr Frost had told him that Austral had requested that cash be provided at short notice. He denied having coded any cheques to QBE Insurance, saying that those cheques ought also to have been coded as payments to Bob Frost. In each case, he said, he had made payments from his personal account, and the Tasman KB cheques made payable to him represented reimbursement of funds expended by him on behalf of Tasman KB. When Robert Frost made these requests, it was almost always with great urgency. In some cases, the payments made by him had been to employees who had worked overtime, but who could not immediately be paid because no cheque signatory was available to sign a cheque. 58 The appellant said that the document Exhibit 59 came into existence in the context of the Family Provision Act proceedings, was drafted by himself in consultation with Mr McAndrew, and signed by Mr McAndrew; similarly Exhibit 61 (the letter to the Registrar of the District Court at Port Macquarie) was drafted by himself in consultation with Mr McAndrew, and signed by Mr McAndrew, in his (the appellant's) presence.

[28]

59 Mr Robert Frost, Mr Neil Frost, and Mr McAndrew had all denied propositions based upon these assertions when put to them in cross-examination, and maintained that they had given no authority for the appellant to withdraw sums of company money, pay them into his own account, and then disburse the funds in the manner he described. They denied any practice of creditor-payment of the kind described in Exhibit 59. 60 Remarkably, the appellant gave no evidence in chief about placing bets for Robert Frost, or about Mr Frost's alleged gambling habits. He was considerably more expansive in cross-examination. He said that, over a period of time, he placed bets on behalf of Robert Frost totalling some hundreds of thousands of dollars. They each kept a tally of the bets, and had regular settlements, which were in cash. Mr Frost's bets were, at times, in amounts of "tens of thousands of dollars". The appellant said that he was in the habit of keeping his own cash resources in a sports bag that he stored in the boot of his car. There was regularly "some hundreds of thousands" of dollars in the bag, but he nevertheless left it in his car, which was parked in an unfenced car park at St Marys that was open to the street. The security of the money did not trouble him. He also sought to explain his TAB telephone betting records that showed loans of $800,000, by saying that, while he was an unsuccessful off-course gambler, his on-course betting was successful. He acknowledged that it was commonplace to draw cheques in the amount of $9500, and said that this was done for the express purpose of avoiding the scrutiny made necessary by the Financial Transaction Reports Act 1998 (Cth), which requires notification by financial institutions to a federal agency called Austrac of transactions of or in excess of $10,000. 61 He sought to explain the use of different pens in writing the cheques by saying that there was "ongoing debate about the payee" between himself and Mr McAndrew and that in most cases, if not all, "T Watkins" was written first.

[29]

The issues at trial 62 Given that the appellant acknowledged that he had written the cheques, and deposited the proceeds into his own account, the issues at the trial were quite narrow. Essentially, the real (and virtually the only) issue was whether the company directors had instructed or authorised the appellant to do as he claimed; a crucial fact in the resolution of that fundamental issue was whether "T Watkins" was written on the cheques before or after they were signed by Mr McAndrew. 63 The evidence concerning the correspondence with the District Court, relating to the subpoena, appears to have been tendered for this reason. Mr McAndrew denied having signed either document. There was a good deal of evidence that different individuals in Tasman KB's employment had not ever received, and were not aware of, the subpoena. The subpoena sought direct information from Tasman KB concerning what the appellant asserted to have been his authorised withdrawal of company money. It will be recalled that the subpoena expressly sought production from Tasman KB of documentation relating to a policy pursuant to which large sums of money were paid into the appellant's Westpac St Marys bank account, so that small invoices would be paid. If the account of the arrangement given by the appellant was false, then receipt of the subpoena by company officers other than the appellant may have set off a train of inquiry which would inevitably have exposed the appellant's activities. Accordingly, it appears to have been the Crown case that the appellant created those documents in order to avoid a proper response by the company to the subpoena, having diverted the subpoena so that it did not fall into the hands of, or come to the attention of, any company director. It was Mr Wood's evidence that receiving and opening mail was a task undertaken by the appellant and his staff. 64 Unfortunately, Mr Anderson does not appear to have been asked to examine the signatures on those documents and there was no expert evidence concerning them. 65 One other aspect of the evidence is of importance. As I have mentioned above, Berman DCJ described the issue concerning when "T Watkins" was written into the cheques as "fundamental"; this, in my opinion, was clearly correct. If, as was the prosecution case, the cheques on presentation to Mr McAndrew for signature merely identified "Westpac St. Mary's" as payee, then the inference that the appellant had subsequently inserted his own name was all but inescapable, and the obvious conclusion from that circumstance was that he had done so dishonestly, without the knowledge of any company director. On that issue alone, the evidence overwhelmingly favoured the prosecution case. 66 The appellant's case, it must be said, was highly implausible, and it is hardly surprising that the jury returned verdicts of guilty. It is also not surprising that no ground of appeal concerning the reasonableness of the verdicts is raised. 67 However, one other matter must be mentioned. The jury retired at 11.53am on 2 August 2006. At a time that is not disclosed on the transcript, on the same day, they requested access to the transcript of the evidence of Mr Byrnes and Mr Wood. This, it will be remembered, was the conflicting evidence concerning which of the two men had advised the other that the transactions were "legitimate". Mr Byrnes' evidence was that it was Mr Wood who told him that, and that it was a way of getting money for Mr McAndrew; Mr Wood's evidence was that it was Mr Byrnes who said something to that effect to him. Mr Wood was the company secretary and, therefore, had authority to speak on behalf of the company. His evidence, if accepted, was capable of casting some light on whether the transactions were or were not authorised. The following day, after raising another matter (of little consequence) the jury returned verdicts of guilty on all charges. 68 Taken as a whole, the Crown case against the appellant was, in my opinion, overwhelmingly strong. That is relevant to the consideration of the first ground, the fresh evidence ground.

[34]

She said that Mr Wood was "a blubbering mess", "crying and screaming into the phone", and that Mr Frost had told him that: "….The money was insured so there are no worries about what Doug is doing." 75 Later in her affidavit she said that she had received a copy of "the cheques" and telephoned Mr Wood, asking him about the direction to pay "T D Watkins". She said that Mr Wood told her that: "Frost told me that they were OK … McAndrew had Watkins do them that way to keep them from prying eyes … The cheques were all legal and above board." 76 She said that, on another occasion she had a conversation with Mr Wood in which she told him that she believed that Mr Robert Frost and the appellant were "involved in dishonest things and money laundering". She said that Mr Wood said to her: "keep your mouth shut, sis." 77 In a paragraph of the affidavit that appears otherwise to be devoid of the slightest relevance, Ms Sansom deposed: "Bob Frost told me that his wife didn't approve of gambling and he had to do it in private." 78 Ms Sansom, I have to observe, was a difficult witness, and one whose evidence does not immediately command acceptance. Her answers in cross-examination were frequently unresponsive; she was determined to put her position, regardless of the content of the question she was required to answer. She displayed real difficulty in focussing upon the subject matter of any question. Her evidence was confused and confusing. 79 Some flavour of her evidence might be obtained by extracting a couple of passages. On one occasion, the cross-examiner was seeking to draw attention to Mr Byrnes' file note of the telephone call in which Ms Sansom advised him of Mr Wood's communication (concerning his suspicions about Mr Watkins and the estate funds). That conversation had occurred on 31 May 2000, but Ms Sansom also appeared to suggest that she was aware of these allegations at the time of her mother's funeral, which took place in August 1999. Her answer is recorded in the transcript as follows: "When my mother died, I had a phone call from a woman who said Kevin Byrnes and me, telling me things about Doug and she told me that Mum was upset the night before she died because Doug [as recorded] had told her that Doug was taking money and doing things for Bob Frost for renovations to their house that his wife didn't know". 80 In the same vein, she then said: "We heard long before that [31 May 2000] when it, Gordon go on his holidays, you know, that when Gordon went on his holidays, he came back from his holidays, he said to the girl, 'I am getting too old to get this money, I think I will send you,' and she found out and said to him, 'I am doing this for Mr Watkins.' Why would a girl from the office do it, if it was not theirs?" 81 On more than one occasion, she answered questions by saying that she had received anonymous telephone calls or letters. 82 To my mind, Ms Sansom's credibility was not enhanced by the following. Cross-examining counsel was asking questions about her assertion that Mr Robert Frost told her that the appellant was "as honest as the day is long". Counsel suggested that, if he had said such a thing, Ms Sansom's response would or ought to have been to tell Mr Frost that the appellant was "not as honest as the day is long", because he had a criminal record for embezzling more than one million dollars from Fairfax (which dated back to 1983 and 1984). In response to that question, Ms Sansom claimed to have said precisely that. A little later, however, she said that she only told Mr Frost that the appellant had been in gaol. 83 Nothing of the sort appears in the affidavit. While the proposition contained in the question, and the assumption about what could reasonably have been expected of Ms Sansom, at the time, do not appeal to my sense of conventional behaviour, what is noteable about Ms Sansom's answers is her readiness to claim to have done what it was suggested could have been expected of her in response to what she attributed to Mr Frost, and her subsequent change of position. 84 It was established that there had been a number of instances of dishonesty in her past; she had been convicted of a series of offences of fraud on the Commonwealth, in respect of claims for fuel rebate involving more that $200,000, over a four year period (these she insisted on characterising as "tax offences" and, therefore, of no consequence); she had given false evidence in those court proceedings and the Family Provision Act proceedings (although in re-examination it was suggested that her dishonesty in that respect was by omission rather than commission); when interviewed in respect of the fuel rebate claims by an excise officer, she gave a different (false) account in which she blamed the appellant, and falsely claimed that he had received the benefits; and she had (probably many years previously), forged her husband's signature on a number of mortgage documents, in order to obtain funds for the appellant's benefit. (It may be inferred that this was in relation to the appellant's previous criminal changes, since she said it was for the purpose of bail and legal fees.) 85 Notwithstanding all of this, when it came to the fundamental or central theme of her evidence, Ms Sansom was unshaken and adamant that the conversations had been as deposed in her affidavit, that is, the conversation with Robert Frost at her mother's funeral, and the conversations with Mr Wood about the appellant's activities, and their legitimacy. 86 The point sought to be made by the Crown in cross-examination drew attention to what appears to be an underlying discrepancy in Ms Sansom's evidence; Ms Sansom claimed to have been told about the appellant's alleged defalcations by Mr Wood; by the independent evidence of Mr Byrnes, objectively corroborated by his file note, it could be seen that that conversation was reported to Mr Byrnes on 31 May 2000. That casts, in my opinion, very considerable doubt upon Ms Sansom's evidence about the conversations she said took place at her mother's funeral in August 1999. Of course, an allegation made by Mr Wood, to the effect that the appellant was withdrawing money from his mother's estate, could not, in logic, have taken place at that time. 87 The proposed evidence of Ms Sansom is said to go to the issue of the knowledge of company directors, or authorisation by them of the appellant's practice (acknowledged by him) of depositing funds of Tasman KB money into his own account; in terms of the elements of the offences charged, it is said to go to that of dishonesty (or, using the language of the statute under which the appellant was charged, intention to cheat and defraud). 88 The tender of Ms Sansom's evidence drew forth replies by others, all of whom had given evidence in the trial. These were Messrs. Byrnes, Frost and Wood. Additional background material was also provided in a number of affidavits sworn by Ms Carolyn Griffiths, a solicitor employed by the Office of the Director of Public Prosecutions and Ms Nicola Velcic, the appellant's solicitor. 89 Put briefly, Mr Wood denied virtually all of the conversations attributed to him by Ms Sansom (except for the conversation in which he raised concerns that the appellant was withdrawing money from his mother's estate); Robert Frost denied he'd been the source of information attributed to Mr Wood. 90 Mr Frost also contradicted Ms Sansom in respect of minor details, which are otherwise of no moment. For example, Ms Sansom had claimed to have known Mr Frost since she was fifteen years of age, when both resided in a particular town. Mr Frost challenged the assertion that they had lived in the same town at the same time. 91 For myself, where there is any divergence between the evidence of Ms Sansom and that of Mr Frost, I unequivocally prefer that of Mr Frost. I say that, however, subject to this qualification. 92 Ms Sansom had given an account, which I have extracted above, of a conversation with Mr Frost at Ms Sansom's mother's funeral. Of this event, Mr Frost said: "On 11 August 1999 I attended the funeral of Thelma Watkins. That was the first date on which I ever spoke to Dorothy Sansom. As people were leaving the funeral, I saw Dorothy speaking to the Minister. I approached her and said, 'I'd like to offer my condolences'. Dorothy turned to me and said words to the effect of that I was helping Doug to rob her in the Family Law matter. She was so hysterical that I turned my back and walked away. The conversation set out in paragraph 12 of the affidavit of Dorothy Sansom did not take place."

[36]

Fresh Evidence : Applicable Principles 96 The basis upon which this Court admits, and, if it admits, acts upon, fresh evidence has frequently been stated, recently, for example, by Kirby J in R v Abou-Chabake [2004] NSWCCA 356; 149 A Crim R 417. Fresh evidence is evidence that is not available to the accused at the time of the trial, actually or constructively. The ultimate question is whether the fresh evidence demonstrates that a miscarriage of justice has occurred. This, in turn, depends upon the credibility of the fresh evidence, and an assessment of the impact it could potentially have had upon the outcome of the trial, had it been available. The evaluation of the credibility of the proposed fresh evidence is an important component in the determination, and one which this Court must make, in the context of the evidence that was given in the trial. The underlying question is whether, if that evidence had been available and called in the trial, there is a reasonable possibility that it would have raised a reasonable doubt in the minds of the jury about the guilt of the accused person. 97 The evidence relied upon as fresh evidence is the proposed evidence of Ms Sansom. Given the lengthy estrangement between the appellant and Ms Sansom, I am prepared to accept that her evidence is relevantly "fresh" in the sense that it was not reasonably available to the appellant at the trial, even in the exercise of due diligence. He had no disclosed or apparent way of knowing or believing or even suspecting that she had any relevant information, and, in the circumstances, it could not reasonably have been expected that he, even through his lawyers, would have made enquiries of her. 98 In amended submissions filed on behalf of the respondent to the appeal, it was not contended that the evidence is not relevantly "fresh". In taking this course, the respondent discarded earlier submissions that had challenged the freshness of the proposed evidence. 99 In his written submissions, senior counsel for the appellant identified four aspects of Ms Sansom's evidence upon which he would seek to rely. These he identified as (my paraphrasing):

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101 Two major problems exist for the appellant, however. The first is that the evidence is not, in my opinion, credible in the relevant sense - that is plausible or capable of belief. 102 The second, and even more difficult for the appellant, lies in the answer to the question whether, if admitted, it could reasonably be thought to have made a difference to the outcome of the trial. In this respect, the strength of the Crown case made at trial is relevant. It was, in my opinion, overwhelming. It is important to recall the basis upon which the appellant explained his actions: he said that the whole arrangement was made at the behest of Mr Robert Frost and Mr McAndrew and was for the purpose of paying company creditors through his account, or providing cash for Mr Robert Frost. It was never his case that the arrangement was a means of obtaining money for Mr McAndrew. 103 In written submissions filed after the hearing of the Appeal, senior counsel focussed, not upon the evidence of Ms Sansom, but upon the conflict in the evidence between Mr Byrnes and Mr Wood concerning which of those two gentlemen had advised the other that the appellant was acting on the authority of directors of Tasman KB. An affidavit sworn by Mr Byrnes on 28 February 2008 was put before the Court by the parties jointly, and Mr Byrnes was not required for cross-examination. He referred to an affidavit filed by him in the Westpac/Watkins proceedings, to which he annexed the file note of the conversation of 6 June 2000. The contemporaneous file note is a persuasive reason to accept his evidence in preference to the evidence of Mr Wood, given from recollection more than seven years after the events in question. Further, Mr Wood said that Mr Byrnes told him that he had received his information from Mr Dan, the appellant's solicitor, in the Family Provision Act proceedings. It is unlikely that Mr Dan would have been in possession of such information, or if he had told Mr Byrnes that, that Mr Byrnes would have accepted it uncritically from him. Mr Dan was, after all, acting for the appellant in bitterly contested proceedings against Mr Byrnes' client. Even if Mr Dan had instructions to that effect, his source would, in all probability, have been the appellant. There is no reason that Mr Byrnes would have accepted that assertion at face value. 104 It is of some significance that senior counsel for the appellant recognised the credibility issues concerning Ms Sansom's evidence and sought to focus upon the conflict between Mr Byrnes and Mr Wood, upon which he contended, Ms Sansom's evidence cast some light. But that was a conflict that was fully exposed in the trial. 105 Senior counsel also recognised that the evidence of Mr Byrnes does not support the case made by the appellant at trial - it merely suggests a scheme to benefit Mr McAndrew. This, he argued, is of no importance; what is of importance (he argued) is the knowledge of the directors of Tasman KB. Up to a point, that is correct. However, the divergence between the explanation for the payment of cheques given to Mr Byrnes by Mr Wood (assuming Mr Byrnes' evidence is to be accepted) and the explanation given by the appellant, does not offer any confidence that a jury in possession of Ms Sansom's evidence would come to a different result. 106 It is important to recall that the evidence of Mr Byrnes and Mr Wood was before the jury. Indeed, as senior counsel was at pains to remind the Court, it was the subject of the inquiry by the jury after it had retired to consider its verdict. The question, therefore, concerns the extent to which Ms Sansom's proposed evidence, if then available, might have affected the jury's evaluation of that evidence, and the outcome of their deliberations. 107 In my opinion, Ms Sansom's proposed evidence is not capable of further resolving any lingering doubt about that evidence. Nor is that evidence capable of casting any doubt on the correctness of the verdicts or casting any new light on the issues the jury had to resolve. While the conflict between the evidence of Mr Byrnes and that of Mr Wood is puzzling, it is difficult to see how it could have been decisive. It is obvious, from the query, that the jury (or one or some of its members) was puzzled by it. But the fact that it was the subject of a request by the jury does not mean that it assumed disproportionate importance in its deliberations. The fact remains, as was made perfectly clear to the jury by Berman DCJ, that, if there existed one decisive fact in the case, it was when the name "T Watkins" was written on the cheques. On that question, the evidence against the appellant was overwhelming. The proposed fresh evidence has no bearing upon that fact. 108 I would reject the grounds of appeal concerning fresh evidence.

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109 The submissions made in respect of this ground were anything but explicit. However, one thing emerged with absolute clarity: reliance upon the decision of the High Court in The Queen v Longman [1989] HCA 60;168 CLR 79) was misconceived. Longman was a case involving a prosecution on sexual offences in circumstances where the first complaint was not made until twenty-five years after the date on which the first of the offences was alleged to have been committed. 110 The appeal to the High Court was in the context of Western Australian legislation limiting the circumstances in which a judge is required to give a direction that it is unsafe to convict on the uncorroborated evidence of the alleged victim; and a prohibition on giving such a direction unless the judge were satisfied that such warning was justified in the circumstances. 111 The passage of more general application appears at pp 90-91 of the report, and is concerned with a need to inform the jury, in cases involving lengthy delay, of what may not otherwise be apparent - the possible impact of a lengthy delay on the capacity of an accused person to raise factual matters of detail in his or her defence. The very point of Longman is that an accused person may, where there has been a lengthy delay, be prejudiced in a way he or she cannot identify and may not know. It is about presumed prejudice. 112 Despite the somewhat elliptical submissions made in this case, it is apparent that that is not the complaint made on behalf of the appellant. The nearest the submissions came to identifying the substance of the complaint is to be found in a reference to the final address of counsel who appeared for the appellant at trial. Counsel is recorded as saying: "One of the disadvantages you might think that Mr Watkins has is this. Very shortly after he resigned form (sic) the Company a policeman arrived on his door and took away two boxes of documents. He says to you that amongst those documents were documents that would show or tend to show that these transactions were conducted, were carried out in accordance with the directions of the directors of the Company, particularly Mr Bob Frost. The policeman then takes those documents and without anybody preparing a list, or checking to see who's got what, who's taken what, the documents are placed into the hands of a witness, who then takes them into the company of another witness. … But in any event, we can't locate them and you've heard from Mr Frost and from others, documents have been destroyed, documents have been sent to the Supreme Court and they've never got them back, there was a flood at the office. … Mr Watkins says there were such documents, they were given to the hands of people who haven't prepared a list of them, who can provide no independent confirmation of what was in those boxes, what was disposed of, what was filed and they say, there's nothing relevant there, we would have noticed something relevant there. It's not up to you to speculate as to whether or not those documents ever existed . Mr Watkins says they did, other people say they did not. What we know of the company's practices suggests that evidence of those transactions in regards to loans and pre-payments would have been thin on the ground anyway ." (Italics added) 113 It seems to me that the complaint that is now made is not one referable to the decision in Longman, but a complaint that, in his summing up, Berman DCJ failed to make explicit reference to the potential disadvantage to the appellant caused by the absence of the documents to which counsel referred in his address. This is not a case of supposed or presumed prejudice which could not be identified; the prejudice asserted (or at least the source of the prejudice asserted) had been explicitly identified. 114 The complaint cannot be sustained. At the end of counsel's address, Berman DCJ raised the issue with him. His Honour said: "As far as the missing document is concerned, I must say having heard your submission my inclination is to say nothing, but I'll give you the opportunity of persuading me otherwise … Unless you ask me otherwise I'm not going to refer to any disadvantages faced by the accused because of missing documents. I'm not saying that I've got in any way a firm view on that at all, it's just my present inclination and you should raise it with me if you do want me to say something. You don't have to do it now. In fact why don't we do this, if either of you want to raise an issue with me concerning my summing up would you contact my associate and I'll come down at 9:30 tomorrow morning. If I don't hear from you I will assume that there's none of those need to be raised and I will start at 10 o'clock …" 115 The absence of any transcript of further discussion on this issue clearly indicates that counsel did not take up the invitation. 116 Trial counsel for the appellant swore an affidavit on 14 February 2008, one paragraph of which dealt with issues raised by Ground 2. He referred to the exchange with his Honour and said: "My understanding at the time was that his Honour was accepting that I had raised the issue, and that I would need to raise arguments different from or additional those raised in the pre-trial application or in my address to the jury before he would consider giving directions in accordance with Longman v The Queen . I was also concerned that in the course of giving such directions his Honour might refer the jury to the matters of fact that formed part of the basis of his Honour's conclusions in relation to the pre-trial application viz: '… I am not satisfied that it can be accurately said that many of these documents are actually missing because it cannot be said that they were ever in existence in the first place' … I accept that it may have been prudent of me to raise the issue again, but honestly believe that I had placed my request with his Honour in as complete a form as I could, that the issue had been squarely raised and rejected by his Honour and that further submissions would serve no useful purpose."

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(The reference to "the pre-trial application" was a reference to an application made on behalf of the appellant (and refused) for a stay of proceedings, based upon the "missing documents".) 117 In my opinion, this evidence cannot be accepted, in the light of the extracted passages from the proceedings following counsel's address. His Honour could not have been clearer in his invitation. Nor does the transcript support the assertion that counsel had made any request for directions of this kind. The most he did was to raise the matter in his own address. And, in any event, the affidavit evidence also suggests that the decision not to ask for a further direction was one based upon tactical considerations, after a weighing up by Counsel of the potential benefits and pitfalls. 118 In any event, it is difficult to envisage just what his Honour ought to have said. When confronted with this, senior counsel who appeared for the appellant on the appeal said that the direction should have been along the following lines: "That in the absence, first of all the jury could have been directed to the evidence that related to the non-existence of the documentation, and then they should have been told as a result of the delay it led to - " 119 At this point the presiding Judge suggested that delay was not an issue, but that the issue concerned the missing documents. Senior counsel then suggested that the direction should have been along the following lines: "As a result of the documents apparently disappearing as a result of a number of incidents, which will be delineated, it meant that the evidence of the various witnesses for the Crown could not be adequately tested and accordingly it would be dangerous to convict and that the jury should go about their task and identify the danger and scrutinise the evidence with great care …" 120 He recognised the difficulty created by trial counsel's acceptance of the likelihood that any relevant documents: "…would have been very thin on the ground and that is the way the Company operated in relation to these cheques."

Watkins v R

At a glance

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Judgment (45 paragraphs)

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Legislation Cited (2)

Cases Cited (4)

Cited By (1)