CV v DPP

[2014] VSCA 58

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCR 2014 0018
C V	Applicant
v
THE DIRECTOR OF PUBLIC PROSECUTIONS	Respondent

---

JUDGES	REDLICH, OSBORN JJA and SIFRIS AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	28 March 2014
DATE OF JUDGMENT	4 April 2014
MEDIUM NEUTRAL CITATION	[2014] VSCA 58
JUDGMENT APPEALED FROM	DPP v [CV] (Unreported, County Court of Victoria, Judge Meredith, 29 January 2014)

---

CRIMINAL LAW – Interlocutory appeal – Coincidence evidence – Obtaining financial advantage by deception – Importance of identifying issue to be proved – State of mind – Whether repeated misstatements as to net income of business in three applications for finance were deliberate and dishonest – Degree of similarity of events and surrounding circumstances required – Relationship between events – Cogency of combined force of coincidence evidence – Innocent hypothesis arising from Crown evidence – Whether hypothesis diminished significant probative value of events – Appeal dismissed.

---

Appearances:	Counsel	Solicitors
For the Applicant	Mr T L Bevan	Malcolm D Motherwell
For the Respondent	Mr A Albert	Mr Craig Hyland, Solicitor for Public Prosecutions

REDLICH JA

OSBORN JA
SIFRIS AJA:

1. This is an application for leave to appeal against an interlocutory decision admitting ‘coincidence evidence’ at the trial.

1. The applicant faces trial in the County Court on one charge of obtaining financial advantage by deception (charge 1) and a second charge of attempting to obtain a financial advantage by deception (charge 2).  The alleged deception arises out of home loan applications for finance which the applicant completed.  The first, made in 2005, was granted.  It is the subject of charge 1. The applicant successfully applied for and obtained an increase in her home loan in 2007.  No charge is laid with respect to this transaction.  The applicant made a further but unsuccessful application to increase her home loan in 2009.  This is the subject of charge 2.

1. The prosecution relied upon misstatements in each of the three applications as to the ‘net business income’ as coincidence evidence for the purpose of proving that the misstatements were deliberate and dishonest.  Each overstatement was made on a loan application to the same lender and related to the same loan facility.  It was for a low documentation loan in which the applicant ‘self-certified’ to the information provided.  It required identical information for the self-certification and specified the same retail business that the applicant operated. It is the Crown case that each application misstated the net income of the business per annum before tax by several hundred thousand dollars.

1. At the time of the alleged offences, the applicant was self-employed and conducting a business at a retail shoe outlet in partnership with her husband.  Tax records upon which the prosecution intended to rely indicated that the net business income of the partnership at the time of each of the loan applications was substantially less than that declared in the application forms.  The trial judge was informed that the accuracy of the taxation records was not in issue.  They disclosed a modest income, if any, being derived at the relevant times.

1. The trial judge noted in his reasons that the applicant had claimed in her record of interview that the figure for net business income inserted in 2005 was ‘done’ for her. By the time of trial, it was not in issue that the applicant had completed each of the application forms in 2005, 2007 and 2009 and that she had provided the relevant information in those applications.  

1. For evidence to be admitted for the purpose of coincidence reasoning under s 98, it must possess ‘significant probative value’.  A logical analysis of the evidence must be undertaken to determine whether the evidence has the capacity to rationally affect the assessment of the probability of the existence of the fact in issue and to a significant degree.[1]  The trial judge must have regard to all of the evidence that the party seeking the admission of the evidence may adduce. 

   [1]Dao v The Queen (2011) 81 NSWLR 568; DSJ v The Queen (2012) 259 FLR 262.

1. In the course of argument before the trial judge, attention was drawn to answers of the applicant in her record of interview in which it was said she expressed some confusion between net income and business turnover.  Both before the trial judge and on appeal, that confusion was said to ground the reasonable possibility as to why each of the loan applications overstated the net business income.  That explanation was inconsistent with the Crown hypothesis that the statements in 2005 and 2007 were deliberately false.  Although the applicant maintained that she had misunderstood the concept of ‘net income’ when completing each of the applications, she conceded before the trial judge that the figure in the 2009 application was deliberately misstated because she had knowingly exaggerated the business turnover.  It was also conceded in relation to the 2009 form that she had exaggerated her savings as stated in the application form.

1. The applicant contended that the three misstatements of net income did not possess that degree of similarity required to permit coincidence reasoning.  She submitted that the misstatements possessed no distinctive features that could support coincidence reasoning, as they were unremarkable and common indicia of fraud that had little probative value.

1. Although coincidence reasoning — the improbability that different events occurred coincidentally having regard to the similarities in the events or in the circumstances in which they occurred — owes its origins to similar fact reasoning at common law, which required the evidence to possess ‘striking similarity’, it is not necessary that the evidence possess that specific characteristic.The probative value of evidence may not lie in it displaying a ‘striking similarity’, ‘system’ or ‘pattern’, all of which might require the identification of points of similarity or in there being an ‘underlying unity’ in the events relied upon.[2]  In Phillips v The Queen,[3] the High Court considered whether the evidence of five different complainants who alleged they were raped by the appellant was cross-admissible as similar fact evidence under s 132A of the Evidence Act 1997 (Qld).  In the joint judgment of the Court, it was observed that it was not a necessary condition for admissibility that the features of striking similarity, underlying unity, or pattern or signature system need be present so long as for some identifiable reason the high probative value necessary to overcome prejudice existed.[4]

   [3](2006) 225 CLR 303.

   [4]KRI v The Queen (2011) 207 A Crim R 552; GBF v The Queen [2010] VSCA 135, [28]; R v Ford(2009) 201 A Crim R 451, 465-6 [38]; R v PWD(2010) 205 A Crim R 75, 87-8 [64]–[65].

1. There may be such a relationship between the events in purpose, circumstances and mode of conduct that coincidence reasoning will be open.  The necessary relationship is not confined to events, each of which possesses unusual characteristics in its execution.  The evidence of each may provide strong support for the others, making it just to admit them all notwithstanding the prejudicial effect of admitting the evidence.[5] 

   [5]DPP v P [1991] 2 AC 447, 462 (Lord Mackay of Clashfern LC).

1. The cogency and significance of the events or the surrounding circumstances will depend on the issue to be proved, as well as on the nature of the evidence.  The issue may be whether a particular person committed the acts, whether the acts were committed at all, or the state of mind of the person performing the acts.  Crown notices of coincidence reasoning generally include ‘state of mind’ as an issue to which the evidence the subject of the notice is directed.  Where the offences charged do not require proof that a specific intent accompanied the actus reus of the offence, the primary issue will most often be whether the events the subject of the coincidence evidence occurred or the identity of the person who committed the acts, the intention of the person to commit the acts rarely being a real issue. 

1. It is also common for tendency notices to include the ‘state of mind’ of the offender who is alleged to have committed multiple offences of the same nature, in order to show a disposition to, or interest in, committing acts of the type alleged. This is not the occasion to consider how far tendency reasoning may permit proof of that issue without inviting propensity reasoning.

1. The charges in the present case required proof of a specific intent. The events are not in issue. Hence the ‘state of mind’ is the primary issue to which the notice is directed. 

1. The question will always be whether the combined effect of the events could establish the improbability that the fact in issue occurred by coincidence and to a significant degree.  The evidence must have significant probative value.  It must be capable of rationally affecting the probability of the existence of the fact in issue to a significant extent, meaning (at least) an extent greater than required for mere relevance.[6]

   [6]          Zaknic Pty Ltd v Svelte Corporation Pty Ltd(1995) 61 FCR 171, 175–6; R v Ford(2009) 201 A Crim R 451, 468 [50]-[51]; R v PWD(2010) 205 A Crim R 75, 88 [66].

1. The applicant’s argument as to the absence of sufficient similarity in features misconceives the probative force of the combination of the three misstatements derived from their relationship, including the commonality of circumstances in which they were made.  The error made in each of the applications occurred in the same setting and for the same immediate purpose, namely to obtain finance.  The error was the same;  namely a gross overstatement of the business net income.  To that may be added the concession that the last of the statements was deliberately false.

1. The question is whether the combined force of these events could significantly advance the jury’s resolution of the issue of whether the error was deliberate, or an innocent mistake. In the recent case of Giourtalis v The Queen,[7] multiple tax returns were admitted as evidence supporting coincidence and tendency reasoning on the basis that similar information contained in those returns was false, and that it was false to the knowledge of the appellant.[8] 

   [7][2013] NSWCCA 216.

   [8]Ibid [67] (Bathurst CJ).

1. An interlocutory appeal as to a ruling on coincidence evidence is a review of what the court ‘thinks’ the probative force of the evidence will be.  That involves an assessment as to whether the judge approached the question by reference to correct principles and whether it was open for him to draw the evaluative conclusion that was drawn.  This requires the application of the principles of House v The King.[9]

   [9]McCartney v The Queen [2012] VSCA 268, [48]–[49]; Dao v The Queen (2011) 81 NSWLR 568.

1. In the present case the trial judge, in his careful reasons, found that the coincidence evidence — that each of the loan applications involved a repeated misstatement and elevation of net business income — had substantial probative value as it established ‘that the defendant knowingly sought to deceive the loan making entity as to her true income position’.  His Honour regarded the probative value of the coincidence evidence as high and considered that it was not substantially outweighed by its capacity to prejudice the defendant.  We can discern no error in the trial judge’s conclusion that the similarity in the mode of misstatement and the circumstances in which it occurred were such as could lead a

   
   

   jury to conclude that each of the misstatements was borne of the same motive — to deceive the financier.

1. The applicant submitted that there were differences in each application.  The purpose of each loan application was different.  She relied in particular on the fact that the last application was made in circumstances where the applicant’s financial position had greatly deteriorated and that she had also misrepresented her savings.  The trial judge referred to the applicant’s arguments that there were differences in each application and that the purposes for each were different.  He concluded that none of these matters raised by the applicant were sufficient to deny the operation of coincidence reasoning.

1. In our view his Honour was right to conclude that none of those matters diminished the cogency of the coincidence evidence.  The fact that the applicant had different reasons for applying for the loans did not diminish the capacity of the misstatements to support probability reasoning that the errors were deliberate.  Whether the evidence at trial did so was a matter for the jury to determine.

1. The trial judge has an obligation to consider any alternative innocent hypothesis arising from the Crown evidence and whether that hypothesis has the capacity to diminish the otherwise strong probative value of the Crown evidence.[10]  The judge, in assessing the capacity of the evidence to obtain the required standard, must consider any competing inferences that arise from the Crown’s evidence and whether that hypothesis deprives the coincidence evidence of the necessary degree of cogency required for its admission.  If that evidence supports a hypothesis inconsistent with the inference which the party adducing the evidence seeks to draw, then the judge must take that into account in evaluating whether the jury could attach significant probative value to the coincidence evidence.  The trial judge does not undertake an evaluation of the actual weight of any of the evidence, whether it be the coincidence evidence or any other evidence adduced by the party seeking its admission which is inconsistent with it.  The judge does not attempt to predict the weight which the jury will actually assign to it.[11]

   [10]DSJ v The Queen (2012) 259 FLR 262, 291 [132] (McCallum J).

   [11]Dao v The Queen (2011) 81 NSWLR 568; DSJ v The Queen (2012) 259 FLR 262.

1. At times the applicant’s argument drew upon the innocent hypothesis that would form part of the defence at trial.  His Honour rightly accepted and treated the coincidence evidence upon which the prosecution intended to rely at its highest.  Save to the extent that there was material within the Crown case that supported the innocent hypothesis, the trial judge was not to take into account the nature of the anticipated defence at trial or the evidence that might be called to support it.[12]

   [12]DSJ v The Queen (2012) 259 FLR 262, 280 [89] (Whealy JA).

1. Here, the trial judge did address the submission that the reasonable possibility existed that the applicant was simply mistaken as to the meaning of net business income. That hypothesis depended upon the view that could be taken of certain answers in the applicant’s record of interview.  His Honour recognised the need for caution where there may be an alternative explanation for the similar feature, arising on the Crown evidence, that each of the loan applications involved a repeated misstatement and elevation of net business income.  The trial judge, having considered the evidence, did not regard the possibility of such an explanation to be such that it should be concluded that the coincidence evidence did not possess significant probative value.  

1. It has not been shown that the trial judge acted upon any wrong principle, or erred in the manner in which he considered the relevant facts, in reaching the conclusion that the evidence supported coincidence reasoning and had a significant probative value.    

1. During the hearing of the appeal, reference was made to further financial records of the applicant’s business that have now been obtained by the prosecution since the interlocutory decision was made.  It is suggested that these may bear upon the cogency of the coincidence evidence and give greater prominence to the likelihood that the misstatements in 2005 were not deliberate.  It will be a matter for the trial judge whether such additional evidence or any further evidence adduced during the trial requires a re-evaluation of the cogency of the coincidence evidence, and whether evidence of the three applications should remain cross-admissible.

1. The application for leave to appeal must be refused.

- - -

[2]Thompson v The Queen(1989) 169 CLR 1, 39–40 (Gaudron J).