Campbell v The Queen- Harper v The Queen

[1995] HCATrans 53

IN THE HIGH COURT OF AUSTRALIA

Registry  No C22 of 1994

B e t w e e n -

ROBERT GEORGE CAMPBELL

Applicant

and

THE QUEEN

Respondent

Registry  No C23 of 1994

B e t w e e n -

JANICE DOREEN JUNE HARPER

Applicant

and

THE QUEEN

Respondent

Applications for special leave to appeal

DAWSON J
TOOHEY J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 16 MARCH 1995, AT 11.29 AM

Copyright in the High Court of Australia

____________________

MR K.J. CRISPIN, QC:   May it please the Court, I appear with my learned friend, MR W.L. DONALD for the applicant.   (instructed by Macphillamy Donald)

MR P.S. HASTINGS, QC:   May it please your Honours, I appear with my learned friend, MR G.J. BELLEW for the respondent.   (instructed by the Commonwealth Director of Public Prosecutions)

DAWSON J:   These two matters can be heard together, can they?

MR CRISPIN:   If that is a convenient course, your Honour, yes, they raise the same issues.  May it please the Court, I seek leave firstly to hand up an amended summary of the arguments for the applicants.  The main changes relate to page numbers which were apparently extracted from the wrong appeal books and may be misleading.  There is a change to the text of paragraph 20 that I can come to in due course. 

May it please your Honour, the special leave questions that arise in this case are set out in the summary of argument.  They are, as your Honours will see, questions which relate to the requirements of the offence created by section 29D of the Crimes Act and the particular questions which arise in this case is:  does an offence under section 29D require proof to the requisite standard that it must have been

within the contemplation of the accused that the economic interests of the Commonwealth would be imperilled by the deception or by the concealment, as the case may be.  Because, there was an amendment in this case to the indictment which substituted the word “concealment” for “deception” at the close of the Crown case.

Secondly, if the answer to the first question is yes, then must it have been within the contemplation of the offender that the economic interests of the Commonwealth would be imperilled in the manner relied upon or in the manner in some way specified and identified to the jury, or could it be left at large so that the jury would be left for themselves to speculate as to the manner in which the interests of the Commonwealth might be imperilled?  Now, there is then a third point which is:  may the verdict be set aside on the basis that a trial was rendered unfair having regard to a significant change in the nature of the economic imperilment relied upon and, indeed, for that matter, the way in which the count was otherwise put at a later stage of the trial and/or assertions by the Crown prosecutor during the closing address of a further form of imperilment and/or fraudulent intention on the part of the accused?

Your Honours, can I just perhaps explain very briefly the background of this.  It may be clear enough from the summary of argument but, essentially, what was alleged was that a couple by the name of the Chaplins, who were the proprietors of a company known as Precious Jewellers ‑ ‑ ‑

DAWSON J:   Well, we have read the judgment.

MR CRISPIN:   You have read the judgment, yes, if it please your Honour.  The issue arose, as your Honours will see, from the material relating to the amendment in a way that changed on a number of occasions.  The initial count alleged that they had deceived the Commonwealth in relation to the amount of stock that was to be conveyed pursuant to an agreement between the two companies.  The agreement itself was silent as to the value of stock to be so conveyed;  it merely contained a formula for calculation of the value but, in due course, the appellant, Campbell, at some stage, acting upon advice of an accountant, put a figure on it.  That figure was the same figure as had been in the tax returns of the company for the previous financial years ‑ that was $139,000.

The charge as originally formulated and as amended covered a period of some 19.5 months, and during the course of the trial the matter was conducted on the footing that it was purely and simply a question of looking at the stock to be conveyed under that agreement.  The case was conducted by defence counsel on the basis that if they could establish that no stock was to be conveyed under the agreement, that was the end of the charge.  The end of the Crown case, the Crown having been aware of the problem for several weeks and let it run, there was then an amendment sought which changed the nature of the charge completely:  firstly, by substituting concealment for deception; secondly, by referring to an arrangement rather than an agreement; thirdly, it was an arrangement between individuals rather than between the companies, and so forth.

The next thing that occurred was that in the closing address of the Crown Prosecutor, as your Honours will see from the summary, there was a statement to the jury that raised for the first time a different complexion altogether.  That appears at page 97 of the application book, but it is quoted in the summary of argument.  It appears at line 15 through to line 23.  Your Honours will see ‑ ‑ ‑

DAWSON J:   Was any objection taken to this at the time?

MR CRISPIN:   No, your Honour, I do not believe it was.

DAWSON J:   Was any direction sought from the judge?

MR CRISPIN:   I do not believe there was, your Honour, and that, certainly, is a difficulty.  It is a difficulty that we rely upon in two ways.  We rely upon it, firstly, as something that should not have happened and is sufficiently serious to warrant review, even though no objection was taken at the time.  Secondly, it was ‑ ‑ ‑

DAWSON J:   If it was sufficiently serious, it would have warranted an application for a retrial, but no application was made.

MR CRISPIN:   Well, it is easy of course, your Honour, to be wise with the benefit of hindsight ‑ that plainly should have happened ‑ but it had this effect.  The case had been opened on the basis that the economic imperilment which was suffered by the Commonwealth was that they had lost the sales tax payable on the contract between the companies.  That in due course turned out to be a furphy because no sales tax is payable on wholesale sales of jewellery, and it just could not possibly be sustained on that basis.

It was also opened that there was a further area of economic imperilment, and that was that the Australian Taxation Office was beguiled into an agreement with the Chaplins, who were in substance the vendors of the business, pursuant to which they agreed to accept $2 million in full discharge of a tax debt of $3 8 million, and it was said that they did that because they had a view of the pool of assets that were available to the Chaplins to meet the debt in question.  Hence had they known of the existence of other stock they would not have entered into that agreement. Then for the first time, at the end of the case and indeed during the learned Crown Prosecutor’s address, there is a suggestion to the jury that in fact the economic interests of the Commonwealth were  not going to be imperilled that way; they were going to be imperilled because subsequent to the sale the purchasers of the business were to have the opportunity of selling stock, the existence of which was not known to the Australian Taxation Office, and simply failing to declare those sales on their tax returns, failing to declare the income thereby derived, so that the economic interests of the Commonwealth would be imperilled by being deprived of the personal income tax that should have been paid by the accused.

That was an assertion that had not been put at any time during the trial, they had not been asked questions about it by the investigating police, it had not been addressed upon, there was no evidence to support the assertion, but there it was, dropped in the jury’s lap, and which your Honours will see from the way in which the address unfolded, that is the resume, as it were - and my learned friend takes the same view in his outline of argument - of the way in which the Crown put the case, that that, they might think, was what it was all about.

Your Honours, we submit that the real vice in the case was that the learned trial judge never identified to the jury what they had to be satisfied about in order to come to a proper verdict on the evidence and, as I say, it was particularly important in this case that that happened, given that the allegations spanned a long period of time and given that the ground kept shifting both factually and also in terms of way in which the charge was put from deception to concealment.

In the book on corporate fraud, your Honours, by Lanham, Weinberg, Brown and Ryan, the offence under section 29D was described as a new and extraordinarily vague offence.  It is lamented that there was no case law yet in existence to elucidate the meaning of “defrauds”.  It was, in this context, potentially an extremely wide offence because there were any number of conceivable bases upon which it might have been contended that there was some form of economic imperilment.  For example, it may have been contended that, had the money been paid as consultancy services, the tax which would have had to have been paid by the recipients of the money might have been less than that which was the value of the deductions obtained by those who were the people paying the money.  One simply does not know.

The jury was not told even that they had to be satisfied that it was within the contemplation of the parties that the economic interests of the Commonwealth would be imperilled at all.  Indeed, in summing up the matter ‑ and the relevant passages, your Honours, if I could just give your Honours the references, are at page 111, line 34, and in particular at pages 127 and 128 where the learned trial judge goes through the various counts and the directions are reiterated.  It is put firstly at page 111 at line 27 that:

If the deceit which the particular accused employed imperilled the economic interest of the Commonwealth, that is sufficient to constitute fraud.

No concept that it has to be within their contemplation and, indeed, it is followed by a statement towards the foot of the page that it was not seriously put that the economic interests of the Commonwealth had not been imperilled.  Again, that was factually incorrect because, as your Honour will see from the discussion in the Federal Court at page 407, the position was that at the time the Australian Taxation Office agreed to accept the lesser sum of money for tax, they did not know what the value of the stock was going to be.  They were only informed of that subsequently.

A further factual difficulty in the case, your Honours, was that the meeting at which that agreement took place occurred on 4 September.  The contract between the companies was entered into on 1 July and the arrangement, which was the subject of the amended count, was entered into a few days earlier than that in June, so that, had the attention of the jury been focused upon this question of the contemplation of the parties, they would have had to have been asked, “Are you satisfied beyond reasonable doubt that at the time the parties entered into this arrangement, they must have known that a meeting not yet arranged at the suggestion of a barrister not yet reached might bring about an agreement between Mrs Chaplin and the Australian Taxation Office and that that agreement might be based upon an understanding of the Australian Taxation Office of their asset position which would be changed by virtue of the arrangements between you”.  It was by no means something that would have been within the forefront of the jury’s mind unless it was very clearly specified.

TOOHEY J:   Mr Crispin, where is the ready access to the counts in the indictment?

MR CRISPIN:   We have quoted them in - I am sorry, all of the counts?

TOOHEY J:   Yes.

MR CRISPIN:   I do not think they are reproduced in the application book, your Honour.  They were substantially in the same form of defrauding the Commonwealth, save, of course, in respect to the organised fraud count - in relation to Mr Barker, which had no application to Harper, and in relation to which there was no agreement as to the applicant, Campbell.

Your Honour, the matter proceeded on the basis that the jury was told - firstly, they were told at 127 that there was only one element of the offence, which was defrauding the Commonwealth.  It was explained to them that generally that meant deprived by deceit or, in this case, deprived by concealment.  It was explained to them that it was not necessary for the Crown to prove that there was any loss occasioned by the deceit.  It was sufficient if there was an economic imperilment.  That, of course, left it open for the jury to simply approach the matter as though it were the dishonesty equivalent of an assault occasioning actual bodily harm, in that the consequence did not have to be intended.  Indeed, Allsop’s Case and some other cases say that they do not have to be intended; but they did not also have to be within the contemplation of the accused, even of something that might occur.  It was left open to the jury to convict on the basis that it was enough to say that if someone had behaved in a deceitful way and, as a consequence of that deceit, albeit a totally unforeseen consequence, a massive loss was sustained, then they could be convicted of defrauding the Commonwealth of whatever that was.  There was no attempt to say to the jury that that must be within the contemplation.

So that, one could imagine a situation, for example, in which a young man walks into a Commonwealth office, strikes up a conversation with a pretty, young woman behind a desk comes out with some totally fictitious statement as an excuse for starting the conversation.  Unbeknownst to him, what he says, which he knows to be untrue, has ruinous consequences for the Commonwealth, involves the expenditure of very large sums of money.  On the way in which this case was run, and the way in which the summing up was sustained on appeal, that would be good enough to make him guilty of defrauding the Commonwealth, and he could be sentenced accordingly.

In that example, the second point also arises:  suppose it be the case that the law does require, as we say, that it be within the contemplation of the accused that the economic interest of the Commonwealth must be imperilled, the Crown in that case would be entitled to say, “Well, is he not imperilling the interest of the Commonwealth by taking up the time of this Commonwealth employee for 15 minutes?  Is that not an imperilment of some sort?  Therefore, that is good enough, and he can be convicted of defrauding the Commonwealth in the same old way.”  We would submit that that is not good enough, because he must not only understand - must not only be within the contemplation that the economic interest of the Commonwealth would be imperilled - but must be within the contemplation that they will be imperilled in the manner forming the gravamen of the offence.

All of that, in this case, was obscured because his Honour did not even tell them of the requirement that it be within the contemplation of the parties and, in the circumstances that we have outlined, we submit that that was a very important matter, and one which was likely to be the decisive issue at the trial. 

The only thing I wanted to say in closing was that we would submit that even if your Honours were not minded to grant special leave on that ground, the amendment at the 11th hour, in circumstances where the Crown had known of the problem, and had indicated that it might apply for an amendment but had held off for something in the order of a fortnight, followed by a totally inappropriate - indeed, we would go so far as to say totally improper statement to the jury at the end of the case - really did involve such a measure of prejudice that special leave should be granted, so that there could be some authoritative affirmation about the duty of fairness in relation to areas other than the choice of witnesses, as the Court has previously done in Apostolides and so forth.  May it please, your Honour, I am aware that my time has run out ‑ ‑ ‑

DAWSON J:   Not quite, Mr Crispin.

MR CRISPIN:   Not quite?

DAWSON J:   You do not have to fill it up, you know.

MR CRISPIN:   Your Honour, the only thing we wish to say in conclusion is that there appears to be no authoritative statement as to the requirements of an offence under section 29D.  The learned authors of the reference book to which I referred have lamented the fact that the law is in that state.  We would submit it is a matter of general public importance that that be clarified and, in particular, it is important in a case like this, where there is simply an allegation of concealment over a period of some 19 months in a particular context.  The jury was not even told, for example, there was no attempt to identify any acts of concealment.  It was not said the Crown case is, it was concealed by doing this, that or the other.  They were left to speculate that, perhaps, simply not telling the Commonwealth about something, might be adequate.  Your Honour, those are really the grounds upon which we would rely.

DAWSON J:   Thank you, Mr Crispin.  The Court need not trouble you, Mr Hastings. 

These applications for special leave to appeal do not raise any point of general importance which would warrant the grant of special leave to appeal.  Special leave is accordingly refused.

AT 11.49 AM THE MATTER WAS CONCLUDED