Cranston v The Queen

[2020] NSWCCA 143

Court of Criminal Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Cranston v R [2020] NSWCCA 143

Hearing dates:

22 June 2020

Date of orders:

22 June 2020

Decision date:

30 June 2020

Before:

Johnson J at [1]
Wilson J at [76]
N Adams J at [78]

Decision:

1. Extend time for the Applicant to seek leave to appeal under s.5F(3) Criminal Appeal Act 1912 until 10 June 2020.

2. Grant the Applicant leave to appeal under s.5F(3).

3. Appeal dismissed.

Catchwords:

CRIMINAL LAW - application for leave to appeal under s.5F Criminal Appeal Act 1912 from refusal of Dietrich stay - applicant charged with tax fraud and money laundering - complex and lengthy trial - applicant failed to establish that he was indigent - whether error demonstrated in findings of primary Judge - no error demonstrated - whether interests of justice warranted - grant of leave to appeal - observations made concerning absence of provisions in Proceeds of Crimes Act 2002 (Cth) permitting release of restrained assets to fund a person’s defence - contrast with State confiscation legislation - leave to appeal granted - appeal dismissed

Legislation Cited:

Criminal Appeal Act 1912 (NSW)

Criminal Appeal Rules (NSW)

Criminal Assets Recovery Act 1990 (NSW)

Criminal Code (Cth)

Proceeds of Crime Act 2002 (Cth)

Cases Cited:

Calleija v R (2012) 233 A Crim R 391; [2012] NSWCCA 37

Dietrich v The Queen (1992) 177 CLR 292; [1992] HCA 57

House v The King (1936) 55 CLR 499; [1936] HCA 40

Munshizada v R [2020] NSWCCA 9

R v Cox [1999] NSWCCA 229

R v Cranston [2020] NSWSC 469

R v Macdonald (No. 4) [2016] NSWSC 486

R v Matovski (1989) 15 NSWLR 720

State of New South Wales v Canellis (1994) 181 CLR 309; [1994] HCA 51

Steffan v R (1993) 30 NSWLR 633

TS v R [2014] NSWCCA 174

Category:

Principal judgment

Parties:

Adam Cranston (Applicant)
Regina (Respondent)

Representation:

Counsel:
Mr M Ayache, solicitor (Applicant)
Mr R Maidment QC; Ms L R Vujcic (Respondent)

Solicitors:
One Group Legal (Applicant)
Commonwealth Director of Public Prosecutions (Respondent)

File Number(s):

2017/148697

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law - Criminal

Citation:

R v Cranston [2020] NSWSC 469

Date of Decision:

01 May 2020

Before:

Beech-Jones J

File Number(s):

2017/148697

Judgment

1. JOHNSON J: By Notice of Application for Leave to Appeal filed on 10 June 2020, the Applicant, Adam Cranston, applied for an extension of time to seek leave to appeal from an interlocutory order made by Beech-Jones J on 1 May 2020 dismissing his application to stay criminal proceedings in accordance with the principles in Dietrich v The Queen (1992) 177 CLR 292; [1992] HCA 57 (“Dietrich”): R v Cranston [2020] NSWSC 469.

2. At the conclusion of the hearing before this Court on 22 June 2020, the Court made the following orders:

1. extend time for the Applicant to seek leave to appeal under s.5F(3) Criminal Appeal Act (NSW) 1912 until 10 June 2020;

2. grant the Applicant leave to appeal under s.5F(3);

3. dismiss the appeal.

3. The Court indicated that reasons for these orders would be published as soon as reasonably practicable. This judgment contains my reasons for the orders made at the conclusion of the hearing.

The Applicant’s Adjournment Application

4. At the commencement of the hearing on 22 June 2020, Mr Ayache, solicitor, appeared for the Applicant and made an application that this hearing be adjourned until a date in early July 2020 to allow senior counsel to appear for the Applicant before this Court. The Crown opposed the adjournment application.

5. The Court refused the adjournment application and indicated that reasons for that decision would be included in the judgment on the appeal.

6. Several factors operated against the adjournment of the hearing before this Court.

7. The s.5F appeal had been filed on 10 June 2020 with respect to the decision of the primary Judge delivered on 1 May 2020. The Applicant’s trial is presently fixed to commence on 10 August 2020 (together with three co-accused) with an estimate of four months.

8. The Court was given no advance notice that an adjournment application was to be made. Efforts are made to list s.5F appeals before this Court urgently. Usually, the subject matter of a s.5F appeal requires an early hearing and determination. The present case required an early hearing and a special fixture was arranged for the appeal to be heard on 22 June 2020.

9. It is the expectation of the Court that such a hearing will proceed and that the parties will prepare accordingly. Certainly, if an adjournment of such a special fixture is to be sought, then prompt notification should be given to the Court. That approach would allow the Court to enquire as to the availability of another date if the hearing was adjourned.

10. By the time the application was made, the Court was sitting to hear the appeal and the members of the Court had read the materials. If the matter had been adjourned, it would have been necessary for a differently constituted Court to be arranged.

11. Mr Ayache informed the Court that he had been approached for the first time by the Applicant on 19 June 2020, the last working day before the scheduled hearing of the appeal. No explanation was provided as to why the Applicant had left it until then to approach a lawyer with the view to being represented on the appeal.

12. A single ground of appeal was raised on the application which had been addressed in written submissions prepared by the Applicant and by the Crown. The issues raised by the appeal were within a relatively narrow compass.

13. In these circumstances, the Court considered that it was not appropriate to adjourn the hearing to a later date.

14. As it happens, Mr Ayache then appeared for the Applicant at the hearing and assisted the Court with focused submissions in support of the ground of appeal. The interests of the Applicant were protected appropriately at the hearing of the s.5F appeal.

Extension of Time Required

15. Rule 5B Criminal Appeal Rules (NSW) required the Applicant to give notice of his application for leave to appeal within 14 days of the date of the judgment or order (1 May 2020) or within such extended time as may be allowed by the Court.

16. The Applicant was represented by counsel at the hearing before Beech-Jones J, but was unrepresented for the purpose of the s.5F appeal until he retained Mr Ayache on 19 June 2020. The Applicant stated in his filed application that he was unaware of the time limit and relied upon his unrepresented status in support of his application for an extension of time.

17. The Crown did not oppose the grant of an extension of time.

18. An extension of time was granted to the Applicant.

Leave to Appeal Under s.5F Criminal Appeal Act 1912 (NSW)

19. The Applicant required leave to appeal under s.5F(3) Criminal Appeal Act 1912 (NSW). Leave will not be granted unless the decision at first instance is attended by sufficient doubt as to warrant the matter being argued on appeal (Steffan v R (1993) 30 NSWLR 633 at 644-645) or if the interests of justice warrant a grant of leave (R v Matovski (1989) 15 NSWLR 720 at 723).

20. To succeed on the appeal, it is necessary for the Applicant to establish error in accordance with the principles in House v The King (1936) 55 CLR 499; [1936] HCA 40: Calleija v R (2012) 233 A Crim R 391; [2012] NSWCCA 37 at [6]; Munshizada v R [2020] NSWCCA 9 at [41].

The Applicant’s Criminal Trial

21. The Applicant is charged with conspiring to dishonestly cause a loss to a third person, namely the Commonwealth, contrary to s.135.4(3) Criminal Code (Cth) (“the Code”) and conspiring to deal with the proceeds of crime in a sum greater than $1 million contrary to ss.11.5(1) and 400.3(1) of the Code.

22. The Applicant has pleaded not guilty to the charges and his trial, along with three alleged co-conspirators, is listed to commence before Payne JA and a jury on 10 August 2020 with an estimate of four months.

Ground of Appeal

23. The Applicant relies upon a single ground of appeal which asserts that “The primary judge erred in finding that I was not indigent”.

The Judgment Under Appeal

24. Beech-Jones J set out the principles to be applied on a Dietrich application, including the principles governing the test for indigence, at [9]-[14]:

“9   The approach to be adopted to this application was authoritatively stated by Mason CJ and McHugh J in the following passage in Dietrich (at 315):

‘In view of the differences in the reasoning of the members of the Court constituting the majority in the present case, it is desirable that, at the risk of some repetition, we identify what the majority considers to be the approach which should be adopted by a trial judge who is faced with an application for an adjournment or a stay by an indigent accused charged with a serious offence who, through no fault on his or her part, is unable to obtain legal representation. In that situation, in the absence of exceptional circumstances, the trial in such a case should be adjourned, postponed or stayed until legal representation is available. If, in those circumstances, an application that the trial be delayed is refused and, by reason of the lack of representation of the accused, the resulting trial is not a fair one, any conviction of the accused must be quashed by an appellate court for the reason that there has been a miscarriage of justice in that the accused has been convicted without a fair trial.’ (emphasis added)

10   Four propositions concerning the application of this principle should be noted.

11   First, as the party seeking the stay, Mr Cranston bears the onus of proof on the balance of probabilities; specifically, he must prove that he is indigent, that he has been unable to obtain legal representation and that this inability is through no fault of his own (see R v Karonous (1995) 63 SASR 451; 77 A Crim 479; R v BK (2000) 110 A Crim R 298; [2000] NSWCCA 4; R v Macdonald (No 4) [2016] NSWSC 486; ‘Macdonald (No 4)’). If an applicant for a stay is not forthcoming with details of their financial circumstances then that may result in the Court being left unsatisfied that the onus has been discharged (MacDonald (No 4) at [104] and [111]).

12   Second, the reference in Dietrich to the accused being without legal representation ‘through no fault on his or her part’ was explained in the following passage in Craig v South Australia (1995) 184 CLR 163; [1995] HCA 85 (at 184):

‘The reference in them to an accused's inability to obtain legal representation being ‘through no fault on his or her part’ was not intended to indicate that every instance of misbehaviour, improvidence or other fault on the part of an accused which had contributed to his or her lack of representation must automatically preclude entitlement to a stay. In that regard, we agree with the view expressed by Olsson J in the Full Court that:

‘ ... what was in contemplation was a test which focused on the reasonableness of the conduct of an accused in all of the circumstances; and excluded situations in which it could fairly be said that the accused, by his gratuitous and unreasonable conduct, had been the author of his own misfortune.’

A fortiori, it was not intended to suggest that the power to grant a stay on the grounds of inability to obtain legal representation does not exist at all if there has been, as a matter of objective fact, contributing fault on the part of the accused.’

13   Third, the concept of indigence is trial dependent. It does not mean that the accused is living in poverty, but that the ‘accused lacks the means to engage appropriate legal representation to conduct his or her defence’ (R v Marchi (1996) 67 SASR 368 at 375). An accused will be regarded as indigent if the value of their ‘assets and income falls well short of what is required to conduct a trial’ (Macdonald (No 4) at [95] per Adamson J).

14   Fourth, in seeking to establish indigence, it is expected that the accused will demonstrate they have been refused legal aid and pro bono assistance (R v Warwick (No 64) [2019] NSWSC 163 at [26] per Garling J), although the fact that an applicant has been granted legal aid is not determinative of whether or not a stay will be granted (Attorney-General (NSW) v Milat (1995) 37 NSWLR 370 at 380; ‘Milat’).”

25. His Honour considered a range of other matters bearing upon the Dietrich application before turning to the particular area which included the challenged finding concerning indigence.

26. This finding related to the circumstances in which a company called Permaform International Pty Limited (“Permaform International”) was said to have agreed to assume liability for up to $200,000.00 of the Applicant’s legal expenses. The Applicant and Robert Rech made affidavits and gave evidence at the hearing before the primary Judge. Mr Rech is a director of Permaform International and an associated company, Permaform Australia Pty Limited. The Applicant is employed as Permaform International’s general manager.

27. It is appropriate to set out those parts of the judgment of Beech-Jones J in which his Honour considered evidence concerning the Applicant, Mr Rech and Permaform International. His Honour said at [70]-[79]:

“70   In his first affidavit Mr Cranston stated ‘in 2018 my employer, Permaform International … entered into a costs agreement’ with his solicitor for payment of her fees up to $200,000. He said that his employer paid $128,000 but was unable to contribute further. In his second affidavit Mr Cranston stated:

‘... I commenced work with [Permaform International] on 7 July 2018. Attached and marked ‘A’ is a copy of my employment agreement. Prior to that I was employed by [Citywide] which is a civil works company. Citywide was, and is, a customer of Permaform [International]. I commenced work with Citywide around 19 February 2018 and was throughout my employment with them, receiving the same weekly salary as I now do from Permaform [International]. Attached and marked ‘B’ is a copy of a payslip dated 21 May 2018 from Citywide showing my gross and nett wage ...’

71   Attachment A to the affidavit is a typed document on Permaform International letterhead titled ‘Employment Contract’. It is addressed to Mr Cranston and bears the typed dated 1 July 2018. It also bears the signatures of Mr Rech and Mr Cranston and a signature date of 7 July 2018. It refers to the start date for his employment as 7 July 2018. Attachment B is a pay slip for Mr Cranston referable to Citywide for the period 21 May 2018 to 27 May 2018 recording a gross weekly pay of $4000 per week and gross salary in the year to date of just over $64,000. The latter figure is consistent with Mr Cranston having commenced work with Citywide on 19 February 2018.

72   An affidavit from Mr Robert Rech, affirmed 20 April 2020 was read on the motion. Mr Rech is the Director of both Permaform International and an associated company, Permaform Australia Pty Ltd (‘Permaform Australia’). He explained that the group manufactures and retails PVC structural walling formwork for the national and international construction industry. He stated that Mr Cranston is employed as Permaform International’s General Manager. He says that Mr Cranston has assisted him in ‘rolling out distribution contracts and packages’, expansion into overseas markets as well as with the ‘financials and the strategy’.

73   In his oral evidence Mr Rech stated that Permaform Australia has been operating since 2013 but that Permaform International had only begun to conduct business by the ‘end of the first quarter’ of 2018. He said he was referred to Mr Cranston by an accounting firm Wentworth Williams, who was providing him with financial advice. He said Mr Cranston was described as someone who could assist him in pursuing an expansion strategy. Mr Rech said he first met Mr Cranston at a coffee shop near his work. He said that Mr Cranston was still working for Citywide when they first met. He said he knew Mr Cranston was facing criminal charges. He said he agreed to fund Mr Cranston’s defence to ‘help me secure our long-term professional relationship’ and that ‘[f]or me it was an investment’.

74   Mr Rech stated that on 7 March 2018 he signed a costs agreement with Ms Musgrave [the Applicant’s then solicitor]. A copy of the agreement was attached to his affidavit. It is signed by Mr Rech and refers to Permaform International. The document recounts Ms Musgrave being instructed to act on Mr Cranston’s behalf in six different matters including these proceedings, the POCA proceedings and the other proceedings noted above and that Ms Musgrave had incurred $130,000 in unbilled costs. Under the agreement, either Mr Rech or Permaform International or both agreed to provide funding of $200,000 for the benefit of Mr Cranston. On the same day, Mr Rech executed a statutory declaration in which he stated, inter alia, that the funds he agreed to provide were not funds owing to Mr Cranston or a loan to him.

75   In the events that happened, Mr Rech made three payments to Ms Musgrave on Mr Cranston’s behalf totalling $128,000, namely, $28,000 on 20 April 2018, $50,000 on 11 October 2018 and $50,000 on 20 June 2019. In his affidavit Mr Rech stated that neither of the Permaform companies is able to further contribute to Mr Cranston’s defence. Amongst other matters he nominated the cost of expansion as well as the recent effects of the COVID 19 pandemic on trading conditions. In his oral evidence he also referred to Permaform International’s large investment in research and development in recent years as affecting the capacity of the business to fund the balance of the $200,000.

76   The cross examination of both Mr Cranston and Mr Rech focussed on the timing and circumstances in which Mr Rech came to agree to fund $200,000 of Mr Cranston’s legal expenses. As noted, Mr Rech recalled that they first met at café following Mr Rech inquiries to Wentworth Williams, at the time they met Mr Cranston was working for Citywide and Mr Rech knew that Mr Cranston was facing charges. In re examination Mr Rech said that he could not recall why there was a delay of between four months from the signing of the costs agreement and Mr Cranston commencing work.

77   Mr Cranston also said he was referred by Wentworth Williams and he first met Mr Rech at a café. He initially said it was only around a month prior to his commencing work with Permaform International but later said it ‘would have been a couple of months’ prior to that time. He said he met Mr Rech around three or four times before he commenced working for Permaform International. He had little recollection of how or when the topic of Mr Rech providing assistance was raised. He said that Mr Rech offered to assist and that ‘it would have been after’ he commenced employment with Permaform International.

78   Mr Rech said that he did not offer Mr Cranston employment when they first met at a café but decided soon after (‘it certainly wasn’t that long after that meeting though’). Mr Rech said that the topic of funding Mr Cranston’s defence ‘came up in conversation I believe not too far after our first conversation took place’, although he could not recall who raised it. He said the business had ‘cash available’ even though it was intending to pursue an expansion strategy. Mr Rech accepted that at the time he agreed to fund Mr Cranston he had not seen any references for Mr Cranston. He agreed he never made any similar arrangement for anyone else previously. He agreed that his actions were ‘quite unorthodox’ but the decisions were made in a ‘very short period of time’ and that he was ‘really lacking the right people to facilitate’ the expansion of his business.

79   Both Mr Cranston and Mr Rech denied that they entered into any arrangement for Mr Rech to disguise the use of Mr Cranston’s funds.”

28. His Honour then made findings which are challenged by the Applicant in this Court. His Honour said at [80]-[81]:

“80   Even allowing for the passage of time and Mr Cranston’s mental health issues, I found that both his and Mr Rech’s explanation of the timing and circumstances in which Mr Rech agreed to fund $200,000 of Mr Cranston’s legal expenses vague and unconvincing. The undisputed dates are that Mr Cranston commenced work with Citywide on 19 February 2018, that on 7 March 2018 Mr Rech signed the costs agreement, that a payment of $28,000 was made on 20 April 2018, that Mr Cranston was still working with Citywide in late May 2018 and he did not commence work with Permaform International until 7 July 2018. Any first meeting that Mr Cranston and Mr Rech had in a café before the costs agreement was signed must have occurred between 19 February 2018 and 7 March 2018. If Mr Cranston and Mr Rech’s explanation is true, it means that, at best, Mr Rech agreed to gift (or ‘invest’) $200,000 for legal expenses for a person he had only just met and had little knowledge of than other than that he was recommended by a firm of accountants and was facing charges. Mr Rech took the unprecedented step, for him, of funding Mr Cranston’s legal expenses even though Mr Cranston would not commence work for Permaform International for another four months and his business was about to pursue a costly expansion.

81 I find it inherently implausible that, in those circumstances, Mr Rech would agree to make such a spontaneous and large contribution to the legal defence of someone he had only just met. The far more likely scenario is that, by some means or other, Mr Rech was only promising funds for Mr Cranston’s legal expenses that in substance were originally contributed by, or at least connected to, Mr Cranston in some way. To the extent that it is necessary, I am satisfied on the balance of probabilities that it is the case. I reject Mr Cranston and Mr Rech’s evidence to the contrary. Further, the evidence of the assets seized in the POCA proceedings suggests that prior to his arrest Mr Cranston had substantial assets including cash. As noted, his work history suggests he would have made numerous business contacts. These matters, and the evidence concerning Permaform International, raise the very realistic likelihood of his having ‘parked’ funds in various businesses either before or after his arrest. It follows that I am not satisfied that Mr Cranston has discharged his onus of proving that he is relatively indigent within the meaning of the above passage from Dietrich.”

29. His Honour noted three further matters at [83]-[86] (my emphasis):

“83   First, Mr Maidment submitted that it should also be found that Mr Rech has declined to fund the balance of $72,000 owing under the costs agreement in order to assist Mr Cranston with this application. I am not positively satisfied of that matter. Mr Rech’s explanation for the difficulties with his business seems plausible. The crucial matter so far as this application is concerned is the lack of proper disclosure so far as Mr Cranston is concerned.

84   Second, Mr Barrow submitted that it would be an exercise in futility for Mr Cranston to have funds available to him which he chooses not use as a means of avoiding a trial. He submitted that, if the Court granted a stay, it would only be temporary because the strong likelihood is that via one means or another the Commonwealth would fund Mr Cranston’s defence. I do not give much weight to this submission. The obvious rejoinder is that Mr Cranston has little to lose from making the application in that if it succeeds it might lead to either the Commonwealth declining to fund him and the prosecution terminating, or him not having to deploy any of his own assets for his defence.

85   Third, in his submissions Mr Maidment made reference to parts of the CCS [Crown Case Statement] which refer to a shortfall in the amount of tax that was said to be owing and the amount recovered as part of the ‘context’ in which this application must be considered. Mr Maidment made reference to the fact that in his affidavit Mr Cranston ‘has not offered any explanation’ for the (alleged) shortfall.

86   This submission needs to be treated with care. The (only) significance of the CCS to this application is that it sets out the allegations made against Mr Cranston; it has not been treated as any evidence of those allegations. In the absence of any evidence demonstrating the existence of any such ‘shortfall’ or Mr Cranston’s connection to it, there was no onus, legal, evidential or practical, on Mr Cranston to address it. However, there was an onus on Mr Cranston to prove that he is indigent and he has failed to discharge it.”

Submissions on the s.5F Appeal

30. Mr Ayache submitted that the primary Judge had erred in finding that the Applicant was not indigent. He submitted that there was no evidence before his Honour to support the conclusion reached at [81] of the judgment. It was submitted that the evidence pointed to a contrary conclusion so that a finding that the Applicant was indigent should have been made.

31. Mr Ayache submitted that error was observable in the primary Judge’s reasoning upon the basis that a rejection of the evidence of the Applicant and Mr Rech (as reflected in [80]-[81] of the judgment) did not permit the Court to make a further finding that there was “the very realistic likelihood of [the Applicant] having ‘parked’ funds in various businesses either before or after his arrest” (at [81]). In effect, it was submitted that the rejection of the evidence of the Applicant and Mr Rech did not permit a further adverse finding of the type made by the primary Judge.

32. It was submitted for the Applicant that the arrangement between the Applicant and Mr Rech may have been unorthodox, but that such a characterisation of a business arrangement fell far short of establishing a sham or false arrangement between the two men.

33. It was submitted that, under cross-examination by the Crown, the Applicant had said that he had no idea what happened to what the Crown alleged was an untraced quantum of $47 million and he denied having access to any of that sum (AB83-84). It was submitted for the Applicant that this is where the evidence ended and that there was no warrant for the primary Judge to make the impugned finding.

34. Mr Ayache submitted that the Court should apply the test of indigence noted by Adamson J in R v Macdonald (No. 4) [2016] NSWSC 486 at [95] that, if the value of an accused person’s assets and income falls well short of what is required to conduct a trial, he or she is to be regarded as indigent for the purposes of a Dietrich application. It was submitted that this test was made out in the present case so that the primary Judge erred in holding that the Applicant had not demonstrated that he was indigent.

35. The Crown submitted that it was open to the primary Judge to reach the conclusions expressed on the evidence before him. The Applicant was unable to give a credible explanation of a number of aspects of the Permaform International arrangement.

36. The Crown submitted that it was open to the primary Judge to conclude, based on the Applicant’s failure to make full and frank disclosure, that the Applicant had not discharged the onus to prove indigence. It was submitted that any effort by an accused person to establish that he or she is indigent will be undermined if full financial disclosure is not forthcoming: R v Macdonald (No. 4) at [104], [111].

37. It was submitted by the Crown that it was open to the primary Judge to dismiss the stay application because he found the evidence in relation to the Permaform International gift to be vague, unconvincing and inherently implausible.

38. The Crown submitted that the Applicant’s credibility had been central to the determination of the Dietrich application as borne out by written submissions made for the Crown on credibility issues (AB24-29), which included the submission that the Court should have little confidence that the Applicant had made full and frank financial disclosure to the Court on the Dietrich application.

39. Further, the Crown pointed to the evidence before the primary Judge where it had been put squarely to the Applicant that the arrangement he had made with Mr Rech was to use his own money and disguise it, a proposition which was denied by the Applicant (AB103.28). The Crown asked Mr Rech in cross-examination whether the $200,000.00 agreement was “a sham agreement in order to allow Mr Cranston to recycle his own funds”, a proposition denied by Mr Rech (AB129.34).

40. In addition, the Crown cross-examined the Applicant by reference to calculations contained in the Crown Case Statement which suggested that there was a sum of $47 million unaccounted for, with the Applicant stating that he had no idea what happened to the $47 million and with him denying that he had access to any of that sum (AB83-84).

41. The Crown submitted that issues concerning the credibility of the accounts of the Applicant and Mr Rech were raised squarely and put in issue before the primary Judge and that the findings made by his Honour were open on the evidence adduced at that hearing.

42. With respect to the primary Judge’s additional finding (at [81]), which the Crown submitted was not the basis of the decision but was expressed (in his Honour’s words) “to the extent that it is necessary”, the Crown submitted that it was open to the primary Judge to be satisfied on the balance of probabilities that the funds provided by Permaform International were “originally contributed by or connected to the applicant in some way”. The Crown submitted that this inference was available, on the totality of the evidence before the Court.

43. The Crown submitted, as well, that the Court should keep in mind that what the Applicant was seeking, in effect, would operate as a permanent stay of his criminal trial. It was submitted that the remedy sought is an exceptional one which required the demonstration of unacceptable injustice or unfairness as to which the Applicant bears a heavy onus: TS v R [2014] NSWCCA 174 at [1], [64].

44. It was submitted that no error had been demonstrated on the part of the primary Judge.

45. The Crown submitted that the decision of the primary Judge is not attended by sufficient doubt nor did the interests of justice warrant a grant of leave to appeal and that, in any event, the appeal should be dismissed.

Decision

46. In a careful judgment, the primary Judge referred to the principles to be applied and addressed the documentary and oral evidence which bore upon the Dietrich application, including the question as to whether the Applicant had established that he was indigent. His Honour had the advantage of seeing the Applicant and Mr Rech give evidence by audio-visual link.

47. No challenge was made to the primary Judge’s identification of the principles to be applied on a Dietrich application. The test of indigence advanced by the Applicant in this Court was that applied by the primary Judge by reference to R v Macdonald (No. 4) at [95] (see [24] above).

48. The Applicant bore the onus of establishing that he was indigent as a necessary condition for grant of the relief which he sought.

49. The primary Judge was correct to observe that the crucial matter on the application was the Applicant’s “lack of proper disclosure” (at [83]). His Honour’s finding in this respect did not relate to a peripheral issue. The Applicant bore the onus of proving that he was indigent with the discharge of that onus clearly requiring a complete and honest account on issues which bore upon that element.

50. It was well open to the primary Judge to regard the highly unusual arrangement between the Applicant and Mr Rech as extending beyond a type of unorthodox commercial arrangement. As his Honour observed, Mr Rech was prepared to take the “unprecedented step” of funding the Applicant’s legal expenses even though he had just met the Applicant and knew little of him apart from the fact that he was recommended by a firm of accountants and was facing what were clearly serious criminal charges.

51. The Applicant’s written submission in this Court asserted that “every dollar from the alleged fraud is traced” and that “his Honour should have found that it was impossible” for the Applicant to have “secretly ‘parked’ funds in various businesses” (AB3, paragraph 18). This was not the case. The evidence adduced at the hearing did not demonstrate that all funds from the alleged fraud had been traced. Rather, the Crown Case Statement contained calculations culminating in a particularised allegation that there was a shortfall of some $47 million, the sum referred to in cross-examination of the Applicant (see [33], [40] above).

52. Fairly read, his Honour’s judgment indicates that he was not satisfied that all funds had been accounted for by the Applicant. His Honour did not accept that the Applicant had given a truthful account concerning his financial affairs, nor was the evidence of Mr Rech accepted as being truthful in a key area. His Honour concluded that there was “the very realistic likelihood” of the Applicant “having ‘parked’ funds in various businesses either before or after his arrest”. These various findings were interrelated and all bore upon the critical question of whether indigence had been proved by the Applicant.

53. In the end, it fell to the Applicant to demonstrate to the civil standard that he was indigent and he failed to discharge this onus.

54. In R v Cox [1999] NSWCCA 229, an appeal was brought to this Court from the refusal of a Dietrich application where the primary Judge was not satisfied that the accused person was indigent. In the course of refusing leave to appeal, Sperling J (Levine J and McInerney AJ agreeing) said at [8]:

“The appellant bore the onus of establishing that he was indigent as a necessary condition for entitlement to the relief which he sought: Canellis (1994) 181 CLR 309 at 328. There was evidence before the court which strongly suggested that the applicant's evidence concerning his financial affairs was not truthful. Her Honour did not accept the applicant's evidence that he was indigent. There was no objective evidence which required her Honour to find otherwise. A passage from Carter, (CCA (NSW), 5 September 1995, unreported), applies with equal force to this case and embodies the approach which this court should take.

‘It is difficult to argue that a judge is in error when he says that he has not been satisfied by an onus carrying party that his evidence is true. In the present case, the judge said that he did not accept the appellant's evidence that he did not have access to funds other than the assets and income to which he referred in his evidence. There was plenty of material before the judge which cast doubt upon the truthfulness of the appellant's evidence.’”

55. In my view, a similar approach should be taken to the determination of the present application. It was open to the primary Judge to make the challenged finding on the evidence adduced at the hearing. The Applicant has failed to demonstrate error in accordance with the principles in House v The King.

Grant of Leave to Appeal

56. Having reached this conclusion, it is clear that the Applicant has failed in his appeal under s.5F Criminal Appeal Act 1912 (NSW). In other decisions (such as R v Cox), the Court has refused leave to appeal where such a conclusion has been reached. In the present case, I was satisfied that leave to appeal should be granted although the appeal ought be dismissed.

57. I was satisfied that it was in the interests of justice to grant leave in this case: R v Matovski at 723.

58. The Dietrich principle is based on, and derives from, an accused person’s right to a fair trial: State of New South Wales v Canellis (1994) 181 CLR 309 at 328; [1994] HCA 51.

59. The Applicant is to stand trial for serious charges which raise complex issues of fact and law and which are punishable by maximum penalties of 10 years’ imprisonment and 25 years’ imprisonment. He is one of four accused persons who, subject to the determination of separate trial applications, is to proceed to trial on 10 August 2020 with a trial estimate of four months.

60. The accused persons are charged with conspiracy and, in the ordinary course, it would be considered appropriate that they be tried jointly. The Court understands that at least two of the accused persons have indicated an intention to seek a separate trial from the Applicant, an application which would be strengthened if the Applicant is to be unrepresented at the trial.

61. In describing the complexity of the Applicant’s forthcoming trial, the primary Judge was satisfied that the Applicant is not in a position to adequately conduct his own defence (at [21]).

62. The primary Judge referred to efforts made by the Applicant to obtain legal aid or pro bono representation (at [34]-[42]). The Applicant has been refused legal aid for the purpose of the trial and the Legal Aid Review Committee has disallowed an appeal against that decision (in November 2019).

63. In December 2019, the then solicitor for the Applicant made application to the Commonwealth Attorney General for an ex gratia payment for the purpose of funding the legal representation of the Applicant at trial. On 9 January 2020, the Attorney General’s Department responded on behalf of the Attorney General stating that it “is unlikely that an ex gratia payment would be available” (at [38]).

64. On 16 March 2020, the then solicitor for the Applicant submitted an application for ex gratia funding to the Commonwealth Financial Assistance Office of the Attorney General’s Department on the Applicant’s behalf. As at 30 April 2020, no response had been provided to that application (at [40]).

65. The primary Judge was satisfied that the Applicant had exhausted his prospects of obtaining pro bono representation or a grant of legal aid and was also satisfied that, absent a stay of his trial, he would not receive funding from the Commonwealth for his defence (at [42]).

66. After considering the evidence concerning the likely cost of the Applicant’s defence at trial, his Honour estimated that, at a minimum and allowing for some disbursements, a privately funded defence of the Applicant would cost $800,000.00 (at [29]).

67. At different points in his judgment, Beech-Jones J referred to the operation of the Proceeds of Crime Act 2002 (Cth) (“POC Act”). His Honour referred to restraining orders made under that Act which prevent use by the Applicant of any of his assets, but allow him to deal in (that is, earn) up to $5,000.00 plus GST per week (at [30]).

68. His Honour noted (at [87]) that, unlike corresponding State provisions such as ss.10B(3), 16A and 16B Criminal Assets Recovery Act 1990 (NSW), the provisions of the POC Act do not enable the release of restrained or forfeited assets for the purposes of funding a person’s defence. On 16 January 2020, a representative of the Commissioner for the Australian Federal Police advised the then solicitor for the Applicant that the Commissioner would not consent to an application to vary the orders made under the POC Act (at [32]).

69. In the concluding part of his judgment, Beech-Jones J made a number of observations concerning the scheme of the POC Act and its impact upon the Applicant’s legal representation for the purpose of the trial. His Honour noted that the scheme of that Act in not allowing for the release of monies for the payment of legal expenses “appears to have been a deliberate policy decision adopted when” the POC Act was enacted (at [88]).

70. The present position with respect to the Applicant’s trial may be summarised as follows. Beech-Jones J has refused the Dietrich application after applying relevant principles and having regard to the evidence adduced at the hearing. This Court has dismissed the Applicant’s appeal from his Honour’s decision in circumstances where the findings were open to his Honour and the Applicant has failed to establish error.

56. The likely next step is that the Applicant’s co-accused will proceed with an application for a separate trial from the Applicant if he is to be unrepresented at trial. If separate trials are ordered (and that is a matter for the trial Judge and not this Court), the prospect is that there will be two trials of significant length proceeding in the Supreme Court of New South Wales with the trial of the Applicant (if unrepresented) being affected by the disadvantages and problems which apply where a jury trial of an unrepresented accused person takes place, especially where the trial involves complex issues of fact and law.

57. It was, of course, a matter for the Commonwealth Parliament to decide whether the POC Act should allow for funds to be made available for legal representation of an accused person in a manner seen in State confiscation legislation of a similar type. Without such a provision, there is the prospect that a well-resourced and legally represented Crown may face an unrepresented accused person at a trial of considerable complexity where (as here) the Court has declined to stay the prosecution because the Dietrich principles have not been satisfied.

58. Considerations of this type bear upon the interests of justice in this case. These factors bore upon my decision to grant leave to appeal although the appeal was dismissed.

59. The question whether the Applicant is to be represented at trial will be answered by reference to any step which the Applicant may take concerning representation and any discretionary assessment by Commonwealth officers concerning legal representation for the Applicant at the forthcoming trial.

Conclusion

75. It was for these reasons that I joined in the making of the orders announced by the Court at the conclusion of the hearing on 22 June 2020.

76. WILSON J: I am indebted to Johnson J for his judgment, with which I agree. My reasons for joining in the orders made by the Court on 22 June 2020 are those expressed by his Honour. 

77. I also share his Honour’s concerns, expressed at [59] and following, as to the potential consequences of the operation of the Proceeds of Crime Act 2002 (Cth).

78. N ADAMS J: The judgment of Johnson J encapsulates my reasons for joining in the orders made on 22 June 2020. The question for determination by this court was whether error was disclosed in the judgment of Beech-Jones J. The finding of indigence was one on which judicial minds might reasonably have differed, but no error was established in relation to any of the findings made by his Honour. I also wish to add to the observations made by Johnson, Wilson and Beech-Jones JJ regarding the operation of the Proceeds of Crime Act 2002 (Cth) (“POCA”) as compared to the Criminal Assets Recovery Act 1990 (NSW). Mr Cranston would not be in a position to assert that he is indigent had his assets been seized under this corresponding NSW Act as, contrary to the POCA, it provides for the release of restrained or forfeited assets for the purposes of funding a person’s defence.

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Decision last updated: 26 May 2025