Dragojlovic v The Queen
[2013] VSCA 151
•20 June 2013
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2010 0307
| NENAD DRAGOJLOVIC |
| Applicant |
| v |
| THE QUEEN |
| Respondent |
AND
S APCR 2010 0435
| TANIA DRAGOJLOVIC |
| Applicant |
| v |
| THE QUEEN |
| Respondent |
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| JUDGES | REDLICH and WEINBERG JJA and BELL AJA | |
| WHERE HELD | MELBOURNE | |
| DATE OF HEARING | 25 June 2012 | |
| DATE OF JUDGMENT | 20 June 2013 | |
| MEDIUM NEUTRAL CITATION | [2013] VSCA 151 | 1st revision: 21/6/2013 Fns 70, 72, 157 & 158 |
| JUDGMENT APPEALED FROM | The Queen v Dragojlovic (Unreported, County Court of Victoria, Judge Nicholson, 6 August 2012) | |
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CRIMINAL LAW — Conviction — Lengthy trials — Juries — Two applicants (husband and wife) found guilty of 20 counts of defrauding the Commonwealth contrary to Crimes Act 1914 (Cth) s 29D — Applicants directors of a company which provided workers to market farmers — Crown case that applicants, acting in concert, dishonestly acted to evade income and group tax liabilities — Total of approximately $909,000 in tax evaded — Crown contended that company operated as labour hire firm thereby incurring relevant tax liabilities — Applicants arraigned before jury on 22 July 2009 — Jury commenced deliberations in June 2010 — Only 117 productive sitting days throughout that period — Many interruptions to trial — Whether dislocated presentation of evidence, and length of trial, gave rise to risk that jury failed to deliver verdict according to the evidence — Whether miscarriage of justice occurred — Issues in trial not particularly complex — Relevance of defence counsel’s failure to seek discharge and considered submission, on instructions, that trial proceed — R v Wilson & Grimwade [1995] 1 VR 163 distinguished.
CRIMINAL LAW — Conviction — Second applicant also faced 48 counts of intentionally accessing data in Commonwealth computer without authority contrary to Crimes Act 1914 (Cth) s 76B(2) — Crown case that second applicant, a Centrelink employee, accessed information on Centrelink databases relating to workers provided by the company — Trial judge refused application to sever s 76B(2) counts from indictment at commencement of trial — Evidence subsequently led, over nine days, relating to those counts — Evidence said by Crown to go to existence of common purpose between both applicants to defraud the Commonwealth — Whether trial judge erred in failing to order severance — Sufficient nexus between s 29D and s 76B(2) counts — Trial judge subsequently ruled that second applicant bore ‘evidential’ onus in respect of s 76B(2) counts — Section 76B(2) counts severed on 3 February 2010 — Evidence led in respect of those counts ruled inadmissible and jury directed to disregard it — Whether trial judge erred in failing to discharge jury at that time — Deliberate decision not to seek discharge —Maric v The Queen (1978) 52 ALJR 631; R v Sarek [1982] VR 971 applied.
CRIMINAL LAW — Conviction — Unsafe and unsatisfactory verdicts — Whether jury must have entertained a reasonable doubt that company conducted a labour hire business — Whether jury must have entertained reasonable doubt that second applicant acted dishonestly — Approach to unsafe and unsatisfactory verdict ground in case built on circumstantial evidence — Ample evidence to support guilty verdicts — Appeal dismissed — Hillier v The Queen (2007) 228 CLR 618 applied.
CRIMINAL LAW — Sentence — First applicant sentenced to five years and four months’ imprisonment with non-parole period of three years — Delay — Search warrants first executed in 2001 — Committal took place in July-August 2006 — Sentence not imposed until August 2010 — Anxiety occasioned over protracted period — Applicant complied with bail conditions throughout very lengthy trial — Appeal allowed — Resentenced to four years’ imprisonment with non-parole period of 27 months.
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| Appearances: | Counsel | Solicitors |
| For the Applicant Nenad Dragojlovic | Mr R van de Wiel QC with Mr N Rosenbaum | Victoria Legal Aid |
| For the Applicant Tania Dragojlovic | Mr R van de Wiel QC with Ms C A Boston | C D Traill Lawyers |
| For the Crown | Mr N T Robinson SC with Ms S J Keating | Director of Public Prosecutions (Cth) |
REDLICH JA
WEINBERG JA
BELL AJA:
On 20 September 2012, the Court made orders relating to the appeal of the first applicant, Nenad Dragojlovic. The Court granted his application for leave to appeal against conviction, and dismissed the appeal. The Court granted his application for leave to appeal against sentence, allowed the appeal and re-sentenced him to a total effective sentence of four years’ imprisonment with a non-parole period of twenty-seven months.
This judgment sets out the Court’s reasons for making those orders in Mr Dragojlovic’s appeal. It also sets out the Court’s reasoning and orders relating to the application by the second applicant, Tania Dragojlovic, for leave to appeal which, in her case, was confined to conviction.[1]
[1]The applicants will be referred to throughout the judgment as ‘Mr Dragojlovic’ and ‘Mrs Dragojlovic’.
The applicants pleaded not guilty in the County Court at Melbourne to 20 counts of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth) (‘Crimes Act’). These were counts 1-20 on the indictment.[2] Sixteen of these counts involved what was termed ‘group tax fraud’ (counts 1-6, 8-11, 13-15 and 17-19). The four remaining counts involved what was termed ‘income tax fraud’ (counts 7, 12, 16 and 20).
[2]Section 29D was repealed as at 24 May 2001 by s 149 of the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth), but it was appropriate to charge that offence because the conduct in question took place before that date.
In addition, Mrs Dragojlovic pleaded not guilty to 48 counts of intentionally, and without authority, obtaining access to data in a Commonwealth computer contrary to s 76B(2) of the Crimes Act. These were counts 21-68 on the indictment. After the trial had been running for some months, these s 76B(2) counts were severed, and the jury discharged from delivering verdicts upon them.
After a very lengthy trial, the applicants were found guilty on counts 1-20. They were sentenced as follows:
NENAD & TANIA DRAGOJLOVIC
Count Offence Maximum Sentence Cumulation 1 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 12 months’ imprisonment
Tania: 6 months’ imprisonment
2 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 14 months’ imprisonment
Tania: 7 months’ imprisonment
3 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 18 months’ imprisonment
Tania: 9 months’ imprisonment
4 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 16 months’ imprisonment
Tania: 8 months’ imprisonment
5 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 14 months’ imprisonment
Tania: 7 months’ imprisonment
6 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 24 months’ imprisonment
Tania: 12 months’ imprisonment
Count Offence Maximum Sentence Cumulation 7 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 36 months’ imprisonment
Tania: 18 months’ imprisonment
8 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 30 months’ imprisonment
Tania: 15 months’ imprisonment
9 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years ‘ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 20 months’ imprisonment
Tania: 10 months’ imprisonment
10 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 22 months’ imprisonment
Tania: 11 months’ imprisonment
11 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years‘ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 56 months’ imprisonment
Tania: 28 months’ imprisonment
Base 12 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ 'imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 48 months’ imprisonment
Tania: 24 months’ imprisonment
13 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 40 months’ imprisonment
Tania: 20 months’ imprisonment
Count Offence Maximum Sentence Cumulation 14 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 24 months’ imprisonment
Tania: 12 months’ 'imprisonment
15 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 22 months’ imprisonment
Tania: 11 months’ imprisonment
16 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 42 months’ imprisonment
Tania: 21 months’ imprisonment
Nenad: 8 months
Tania: 8 months
17 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 46 months’ imprisonment
Tania: 23 months’ imprisonment
18 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 40 months’ imprisonment
Tania: 20 months’ imprisonment
19 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 28 months’ imprisonment
Tania: 14 months’ imprisonment
20 Defrauding the Commonwealth
[Crimes Act 1914 (Cth) s 29D]
10 years’ imprisonment and/or 1,000 penalty units
[Crimes Act 1914 (Cth) s 29D]
Nenad: 30 months’ imprisonment
Tania: 15 months’ imprisonment
Total effective sentence: Nenad: 64 months’ imprisonment
Tania: 36 months’ imprisonment
Non-parole period: Nenad: 36 months
Tania: None – See Recognizance Release Order
Pre-sentence detention declared: Nenad: 16 days
Tania: 3 days
Recognizance release order: Tania: Order that Tania be released after serving 18 months of her sentence upon giving a recognizance of $1000 to be of good behaviour for a period of 18 months. Other orders:
Nenad and Tania: Pecuniary penalty order in the sum of $633,941.39 pursuant to s 116 of the Proceeds of Crime Act 2002 (Cth)
Circumstances surrounding the offending
Mr and Mrs Dragojlovic were at all relevant times the directors and shareholders of a family company, Jontaz Pty Ltd (‘Jontaz’). Their home was the registered address of that company.
The business of Jontaz was to arrange for workers to be provided to various market gardens in the Werribee area. We shall refer to the operators of these market gardens as the ‘farmers’.
Mr Dragojlovic received bookings from farmers who required assistance and engaged the required number of workers. Typically, either Mr Dragojlovic, or his driver, drove the workers to the sites. However, that was not always so. On some occasions, albeit infrequently, the workers travelled to those sites independently.
Jontaz charged the farmers a fee to supply workers and, in general, paid those workers out of the funds received. It retained a commission for having made the workers available. However, there was evidence that, on occasion, the workers were paid directly by the farmers.
The Crown case
The Crown contended that:
·Jontaz was a labour hire firm;
·the workers were Jontaz employees; and
·Jontaz was thereby obliged to pay income tax based on the total fees it received from the farmers, and to remit group tax deducted from the workers’ wages to the Australian Taxation Office (‘ATO’).
The case against the applicants was one of joint criminal enterprise. The Crown alleged that they acted with a common purpose to evade their tax liabilities.
The key to the Crown case was the discovery of a ‘Red Book’ in the lounge room of the house occupied by the applicants and their four children. The Red Book was labelled ‘Dad’s Folder’, and contained worksheets written in Serbian that were headed ‘Nenad’s Workers’. The Crown contended that the Red Book contained a complete and accurate record of all payments made to Jontaz by the farmers, as well as the names and hours worked by the persons listed therein, and the details of the ‘true wages’ paid by Jontaz to the workers.
The Crown further contended that the applicants kept two sets of records in relation to both the wages paid to the workers, and the payments received by Jontaz. It alleged that the true figures were those set out in the Red Book, and that the false figures were those contained in various spreadsheets and charts which understated both wages and income.
The Crown also contended that besides understating receipts of cash and cheques from farmers, the applicants had falsely adjusted their records. They had done so by fabricating shareholders’ loans in the 1999 financial year in order to reduce their taxable income such that they were not liable to pay any tax in that year.
The Crown argued that by understating both the wages of the workers and the income earned by Jontaz, the applicants succeeded in evading $909,662 in taxes over the period 1996-2000. That figure comprised $827,834 in group tax, and $81,828 in income tax.
Mrs Dragojlovic had, throughout the period covered by the charges, been a Centrelink employee. The case against her was that she had accessed Centrelink computer records relating to the workers supplied by Jontaz, with a view to accessing information about them that might assist her and husband in perpetrating the tax frauds.
The case for the defence
Both applicants submitted at trial that, in respect of the ‘group tax counts’, the jury could not rationally exclude the hypothesis that the workers were not employees of Jontaz, but rather self-employed, or employed by the farmers.
In relation to the ‘income tax counts’, both applicants submitted that the jury could not rationally exclude the hypothesis that Jontaz was a ‘labour placement firm’ (or a combined labour placement and labour hire firm), and not a purely labour hire firm. In support of that conclusion, the defence pointed to the absence of any written agreement between Jontaz and the workers. It also pointed to the fact that none of the workers had been called to give evidence.
It was submitted that the jury could not be satisfied beyond reasonable doubt that the applicants had acted dishonestly. On behalf of Mr Dragojlovic, it was contended that there was simply insufficient evidence for such a finding. On behalf of Mrs Dragojlovic, it was argued that the jury could not exclude the hypotheses that she either did not know of the Red Book, or did not understand its contents.
Procedural history
The committal hearing took place in July and August 2006. The applicants were committed to stand trial, but the matter was not listed for hearing in the Country Court until 4 February 2009. There were then months of preliminary argument, which did not conclude until 27 April 2009. One of the matters raised was an application, on behalf of both applicants, for a permanent stay of the fraud charges. That application was, of course, unsuccessful. A Basha inquiry was conducted on 16 July 2009 at which three witnesses were called.
Before the applicants were arraigned, Mr Dragojlovic applied, unsuccessfully, to have his wife’s s 76B(2) counts (‘the Centrelink counts’) severed from the indictment. He submitted that there should be two separate trials, one relating to the tax counts, and the second relating to the s 76B(2) counts. He contended that there was no evidence that he had been involved in any of the Centrelink counts, nor that he had benefited in any way from his wife’s conduct in accessing the relevant computer data. Mrs Dragojlovic neither joined her husband’s application, nor supported it.
In rejecting Mr Dragojlovic’s application, the trial judge found that there was evidence from which it could be inferred that he had been involved in the Centrelink counts, at least on the basis that he had knowledge of his wife’s activities. In her Honour’s view, that inference could provide evidence of the common purpose alleged against both applicants in relation to the tax fraud counts. For that reason, she, at least at that stage, considered that the evidence relating to the Centrelink offences was admissible on all counts against both applicants.
The applicants were finally arraigned on 22 July 2009. The trial ran in front of the jury for many months. On 3 February 2010, after all of the evidence had been concluded, Mr Dragojlovic renewed his application for severance of the Centrelink counts. On this occasion, Mrs Dragojlovic joined in that application.
Despite having previously refused severance, the trial judge had, by this late stage of the trial, concluded that it should be granted. She ruled that the Centrelink counts should be severed, and she went on to hold that none of the evidence pertaining to those counts was admissible in relation to the tax fraud counts. She said that she would direct the jury accordingly, and subsequently did so.
It is important to note that, upon severance having been granted, neither applicant sought a discharge of the jury. It is clear from a reading of the transcript that some thought was given to making such an application. However, it seems that a considered decision was taken to proceed with the trial.
Closing addresses began on 16 March 2010. These were extraordinarily prolix, occupying many weeks. On 12 May 2010, her Honour finally commenced her charge to the jury. On 7 June 2010, the jury began their deliberations. On 25 June 2010, the applicants were convicted on all counts.
During the course of the trial, the Crown called a total of 58 witnesses. These included members of the Australian Federal Police, tax auditors employed by the ATO, the applicants’ own accountants and tax agents, independent forensic accountants who had examined the books of Jontaz, the applicants’ own bookkeeper, and several of the farmers who had made use of the company’s services.
The applicants did not give evidence. However, they called various witnesses in their defence. These included a chartered accountant and registered tax agent whose evidence was that, based on his examination of the company’s records, it was not possible to say whether Jontaz had been operating as a labour hire business, or as a placement or employment agency. That witness also said that it was theoretically possible for Jontaz to have operated as a labour hire business and as a placement or employment agency at the same time. He added that it was perfectly acceptable for a placement agency to charge a commission to the worker, the end-user, or both.
The grounds of appeal
The applicants each sought leave to appeal against their convictions on the following grounds:
1. The dislocated presentation to the jury of the evidence and the explanation to them of the issues to which the evidence gave rise, combined with the length and complexity of the proceeding, gave rise to a real danger that the jury failed to deliver a true verdict according to the evidence, thereby occasioning a miscarriage of justice.
2.The counts on the indictment did not afford a sufficient description of the conduct with which the applicant was charged, rendering the verdicts uncertain and resulting in a miscarriage of justice.
3.The learned trial judge erred:
(a)in refusing the defence application to sever counts 21–68 from the indictment prior to the trial commencing; and/or
(b)in failing to discharge the jury after severing counts 21–68 and ruling that all the evidence which had been led in relation to those counts was inadmissible in considering the remaining counts on the indictment.
4.The verdicts on counts 1–20 are unreasonable or cannot be supported having regard to the evidence.
Mr Dragojlovic also sought leave to appeal against his sentence of five years and four months’ imprisonment with a non-parole period of three years. He relied on a single ground, namely manifest excess.
Ground 1 of the appeal against conviction – length and complexity of the trial
In order to deal comprehensively with this ground, it is necessary to recount in some detail the precise sequence of events that took place between 4 February 2009 and 25 June 2010, a total of nearly 17 months.
The Court was assisted by the provision of a written chronology, prepared by the applicants, setting out on a day-by-day basis what took place throughout this extraordinary trial. That chronology was marked as an exhibit on the appeal, and its accuracy was not challenged by the Crown.
A few general comments may be made. The transcript of the trial, not counting the plea and sentence, runs for some 10,807 pages. From the date of the prosecution opening on 23 July 2009, until the jury retired to deliberate on 7 June 2010, there were said to have been 219 available sitting days. Only 117 of those sitting days were said to have been ‘productive’, and many of those 117 days were not ‘full’ days. For example, the trial judge had a practice of not sitting on Friday afternoons. From the end of the Crown case on 22 December 2009, until 7 June 2010, there were said to have been 112 available sitting days. Only 45 of those sitting days were said to have been ‘productive’. From the end of all of the evidence on 2 February 2010 to the commencement of the jury’s deliberations on 7 June 2010, there were said to have been 86 available sitting days, of which only 37 were ‘productive’.
There were many difficulties associated with this trial. The trial judge commented a number of times that the trial was ‘plagued by Murphy’s Law’.[3]
[3]T2529 (17 September 2009), 3676 (12 October 2009), 3820 (14 October 2009), 4537 (4 November 2009), 4549 (5 November 2009), 6241 (18 January 2010), 9426 (12 May 2010), 9668 (20 May 2010).
On 16 July 2009, her Honour confirmed with counsel that although the duration of the trial had originally been estimated to be approximately three months, caution would dictate that the jury be told that it might take up to four months.
On 22 July 2009, just before empanelment, the jury panel were told that the trial was likely to run for some five months.
The trial itself ran for more than eleven months. Notably, those eleven months included:
·one witness, Mark Walker, the Australian Federal Police case officer, giving evidence over 33 court days;
·counsel for Mr Dragojlovic delivering a closing address that took more than 15 court days; and
·the trial judge charging the jury for 16 days.
The issues presented to the jury for their consideration were not, in themselves, terribly complicated. They had to determine whether the workers were employees of Jontaz, and whether that company should be characterised as a labour hire firm. They also had to determine whether each applicant should be regarded as having behaved dishonestly.
It is true that some of those questions involved difficult employment, accounting, and taxation issues. A large number of documents were tendered. Various experts were called on both sides. Adding to the complexity was the fact that some nine court days, and a significant portion of the opening addresses, had been dedicated to the relevance of the Centrelink evidence which the jury were subsequently directed to disregard.
According to the applicants’ written submissions, some of the more noteworthy disruptions to the trial were:
(a)Mr Rosenbaum, counsel for the applicant, was absent due to illness between 14 August and 21 August 2009 inclusive, and between 27 August and 1 September 2009 inclusive (on which day the evidence resumed, with Ms MacDougall replacing Mr Rosenbaum), resulting in 11 and 6-day breaks during the evidence of Mr Walker, respectively;
(b)the illness, death and funeral of the father of a juror between 7 September and 11 September 2009;
(c)a juror’s illness resulted in lost court days on 14, 15 and 18 October 2009 and created a six-day break between evidence;
(d)a juror had an accident over the Melbourne Cup weekend (for which her Honour had granted a juror request not to sit on the Monday), resulting in another lost day on 4 November 2009 and creating a six-day break between evidence;
(e)her Honour’s illness resulted in 6 consecutive court days being lost from 23 November 2009 and created an 11 day gap between evidence;
(f)Mr Rosenbaum tore his calf and subsequently contracted an infection feared to be deep vein thrombosis, causing a gap in the evidence of a critical witness, Mr Jackson, between the morning of 14 December 2009 and the morning of 21 December 2009;
(g)the jury had a 3½ week break for Christmas immediately following the close of the Crown case on 22 December 2009, giving rise to a real danger of the jury crystallizing their views. This was particularly prejudicial to the applicant[s], given the Christmas break created an almost-four-week break between the evidence of the two critical experts — Mr Jackson for the prosecution and Mr Lipson for the defence;
(h)her Honour suffered an injury or illness in late-January 2010, resulting in her being unable to sit for long periods;
(i)Mr Rosenbaum was absent on 8 February 2010 due to the hospitalization of his son and mother-in-law, and soon thereafter he injured his elbow, sustaining a ruptured bursa. He underwent surgery and contracted golden staph infection whilst in hospital. On 9 March 2010 her Honour informed counsel that she required urgent surgery and would not be able to sit for a week. These misfortunes resulted in a six-week gap between the close of the applicant’s case on 2 February 2010 and the commencement of the prosecution closing address on 16 March 2010;
(j)once the prosecution closing commenced, frequent short breaks were necessary due to her Honour’s illness;
(k)Mr Rosenbaum became ill again on 30 March 2010, resulting in Miss MacDougall continuing the closing address for the applicant on that day only;
(l)an extended Easter break then took place, due to two jurors having booked holidays;
(m)on 7 April Mr Rosenbaum returned, but unfortunately a juror had dislocated his elbow over the Easter break. On 8 April 2010 the court discharged that juror and adjourned the matter to 13 April 2010;
(n)the court was advised of the death of Mr Rosenbaum’s mother-in-law on 12 April 2010, and granted an adjournment application on that basis. The above four disruptions resulted in a two-week gap in the closing address of the applicant, between 30 March and 15 April 2010;
(o)The illness of a juror meant there was a break in Mr Rosenbaum’s closing address from 29 April to 4 May 2010;
(p)her Honour’s charge commenced on 12 May 2010, but the matter did not proceed on 13 May 2010, due to the ill health of a juror’s child; and
(q)her Honour did not sit on 17 May 2010 due to ill health.[4]
[4]Applicant’s Second Revised Written Case, 10 February 2012, [17] (footnotes omitted).
The Crown did not challenge the accuracy of this description of the various events that had disrupted the trial. Accordingly, we shall proceed on the basis that it correctly depicts what took place, and explains why the trial ran for as long as it did.
The applicants submitted that the dislocated character of the trial deprived the jury of the opportunity to give proper consideration to the evidence in this case, and deliver a true verdict. In addition to the various factors that contributed to the length of the trial, they pointed to a number of other matters that were said, in combination, to have resulted in a miscarriage of justice.
The applicants submitted that the various disruptions identified above resulted in a three and a half month gap between the time that Mrs Dragojlovic’s counsel said anything meaningful in front of the jury (that is, from the time he concluded his examination of a particular witness on 21 January 2010) and when he commenced his closing address on 5 May 2010.
Moreover, counsel for Mrs Dragojlovic’s closing address commenced some six weeks after the prosecutor had completed his closing address on 23 March 2010.
Added to this was the fact that the jury did not retire to consider their verdicts until 7 June 2010, more than four months after the conclusion of all of the evidence.
It was further submitted that the fact that nine court days were dedicated to the Centrelink evidence which the jury were later told to disregard had created a 15 day gap between admissible evidence led in September 2009. It was also noted that six different counsel had appeared for Mr Dragojlovic throughout the trial.
The applicants drew attention to various concerns expressed by the trial judge during the course of the trial. On at least one occasion, on 7 October 2009, when considering whether the Court should sit longer hours to make up for the various interruptions to the trial, her Honour observed that that some of the jurors seemed ‘lost’. On a number of occasions, she indicated that she was concerned about the length of the trial. On 10 February 2010, having been informed of counsel for Mr Dragojlovic’s need for surgery, she said that she was ‘gravely concerned about the future conduct of this trial’. She reiterated those concerns on 16 March 2010, stating that she was concerned by the ‘punctuation’ of the trial.
On 23 March 2010, her Honour said this:
There has been no application for discharge of jury made by any of the parties, nor raised by the court and for obvious and very clear reasons. However, I must state my concern that I do have a concern in relation to the conduct of this matter. I appreciate and we're all in heated agreement about how alert and committed our jury have been, however, there seems to be a litany of matters that are arising along the way. The finishing line seems to be being pushed out and as far as humanly possible I'm not sure how a jury in this case can address matters appropriately.[5]
[5]T7949.
The trial judge specifically raised with counsel, on a number of occasions, the possibility that the jury might have to be discharged. For example, on 9 February 2010, her Honour raised with Mr Rosenbaum the prospect that the jury might have to be discharged if, as a result of his illness, he could not discharge his responsibilities to his client. At that point, Mr Rosenbaum indicated that his client did not seek a discharge, and wished to proceed with the trial. On 19 February 2010, in Mr Rosenbaum’s absence, her Honour said this:
I have 14 jurors waiting and a trial that's been very lengthy and since 11 January, the jury have been in and out of this courtroom very often and it's starting to get the flavour of situation that may cause a judge to consider discharge of a jury.
However, no application was made for a discharge, and the matter was not pursued.
On 22 February 2010, the question of a discharge arose again. This was prompted by the prosecutor, who opposed a further adjournment of the trial to enable Mr Rosenbaum to recover from his illness. The transcript reads as follows:
MR CAHILL: The veil of uncertainty that clouds this issue, at present, is such that, in our submission, Your Honour cannot make a proper determination otherwise. This, Your Honour, all comes against a background of which we are well familiar, that I'll recite a small number of relevant facts.
The jury was empanelled on 22 July 2009. The Crown case was closed on 22 December 2009. The defence case for the first accused, Mr Nenad Dragojlovic, was closed on 2 February. The defence case for the second accused, Tania Dragojlovic, was closed on 11 February. By that time, finally, all the evidence is in the trial.
If Your Honour accedes to the request for an adjournment of this trial, until next Monday, that will be 1 March. Our submission is that Your Honour cannot properly consider that application without proper evidence before Your Honour.
We, Your Honour, and Your Honour, of course, is concerned about two very important matters. One is, the imposition on the members of our community who sit as this jury. We are moving into the eighth month of the trial. The second is the cost to the community of this trial, which is so very, very close to its conclusion. I asked my instructors, Your Honour, to make some calculation of the costs, which are, at least, known to the Commonwealth Director of Public Prosecutions Office or are, otherwise, able to be calculated, such as Victoria Legal Aid fees. Including the fees, the lawyers' fees for the prosecution and the defence, as well as jury fees and the expenses of the - associated with bringing prosecution witnesses to court, we'd reach a figure of $978,032. I can break those up if Your Honour wishes?
HER HONOUR: Yes, please do, Mr Cahill.
MR CAHILL: For the prosecution, legal expenses, $479,685. For the defence, and we estimate these, on the basis of Victoria Legal Aid fees, and they don't take into account any fees paid for preparation or conferences, $269,984. Jury fees, to date, for 118 days of the trial, $131,100.
HER HONOUR: Yes, 131 - - -
MR CAHILL: One hundred dollars and prosecution witness expenses, including witnesses' fees, travelling expenses, conduct money, service of subpoenas, interpreters, $97,299.
HER HONOUR: Was there any contribution or payment for Mr Lipson coming back to Australia from the Commonwealth Director of Public Prosecutions?
MR CAHILL: We haven't factored Mr Lipson's expenses into these calculations, Your Honour, we're not aware of what those might be. And of course we have no way of estimating the expense to the community of the provision of the court facilities, of the courtroom - - -
HER HONOUR: Considerable.
MR CAHILL: Your Honour, Your Honour's staff, and court security. But Your Honour, I'll read from an article, and we'll provide Your Honour with the extract that I'm reading from, and our learned friends. It's an article entitled "The Anatomy of Long Criminal Trials", and was published by the Australian Institute of Judicial Administration. The author of the article is Dr Chris Corns, C-o-r-n-s, who was then a member of the Bar and an academic of La Trobe University. And I'll provide Your Honour with this, and as I say, it's an extract.
HER HONOUR: Thank you.
MR CAHILL: At p.4 of the article, under the heading of "Consequences of long criminal trials", there's a sub-heading, "Financial", and I'll quote: "It has recently been estimated", and I interpolate, Your Honour, that was in 1992, as Your Honour will see from the footnote, "It has recently been estimated that it costs $20,000 each day to conduct a criminal trial in New South Wales. Whilst some variations in cost can be expected between jurisdictions, this figure at least gives an indication of the scale of costs involved in a trial that lasts for one year or more. One Victorian report stated that the trial of Sir Andrew Grimwade and Wilson cost the Victorian community in excess of $10 million. Whilst the trial of Cohen & Ors in England is estimated to have cost 30 to 40 million pounds. If only one week out of say 20 weeks in a long criminal trial could be saved, this could represent a saving to the community of $100,000. Apart from the actual costs of conducting the trial, the financial costs associated with delays is also substantial", and that's the end of the quotation.
HER HONOUR: There's also been case studies done in relation to juries in long trials, and there's one in particular that Mr Monteleone's discussed with me today, it's an English case, and that also deals with where there's been consideration given to discharge of juries where there's been considerable punctuation or other issues that have been raised. So there are not just the financial costs - - -
MR CAHILL: No, that's correct, Your Honour.
HER HONOUR: There's also other issues as well, and - - -
MR CAHILL: They're two aspects that we raise in support of our submissions as to what in our respectful submission Your Honour should do next. If Your Honour pleases.
HER HONOUR: Thank you very much, Mr Cahill, it's been of assistance. Mr Singh, the other day I do recall, and I haven't got the passage of the transcript, but I do recall requesting some detail from a medical point of view in relation to Mr Rosenbaum's condition and the impact on him and his ability to discharge his obligations as counsel to Mr Dragojlovic. Implicit in that was in court and outside court.
MR SINGH: Yes, Your Honour.
HER HONOUR: So it was something along those lines, did you convey that to Mr Rosenbaum?
MR SINGH: Indeed I did, Your Honour.
HER HONOUR: It seems to have fallen on fallow ground.
MR SINGH: All I can say, Your Honour, is that I know that these surgeons are extremely busy.
HER HONOUR: Yes, we know all about that, Mr Singh. In another jurisdiction it's - well it happens in this jurisdiction as well, but in other jurisdictions, and in other walks of life. And the court doesn't treat lightly the significant commitments surgeons have. However, there are wider responsibilities from the court's point of view.
MR SINGH: Yes, I accept that, Your Honour.[6]
[6]T7407-7411.
There were further discussions, on that day, regarding Mr Rosenbaum’s condition, and the possibility that Mr Singh, counsel for Mrs Dragojlovic, might be interposed so as to enable Mr Rosenbaum’s full recovery. However, nothing came of that suggestion.
Her Honour returned to the possibility of discharging the jury on 1 March 2010, with Mr Rosenbaum’s condition not yet satisfactory resolved. She commented that ‘no one wants that to occur’. Mr Singh did not disabuse her of that view.
Later on the same day, the transcript records the following discussion:
MR CAHILL: On 10 February, Mr Rosenbaum took ill and he's been absent since that time. That was a Wednesday. On the Thursday and Friday immediately following, 11 and 12 February, Mr Henwood appeared as his junior for Mr Dragojlovic. We didn't sit on Monday the 15th. On Tuesday the 16th and 17th, Miss MacDougall appeared as Mr Rosenbaum's junior on behalf of Mrs Dragojlovic. On Thursday the 18th, the court didn't sit. Miss MacDougall appeared again on Friday the 19th and also Monday the 22nd. Court didn't sit on Tuesday the 23rd. Miss MacDougall appeared on the 24th, the Wednesday, and the court didn't sit on 25 and 26 February.
We're in a situation where on the 9th February Mr Rosenbaum had told you that he was two-thirds to - or his closing address was two-thirds to three-quarters of the way to completion. He's been absent for three weeks now and in the meantime he had initially Mr Henwood as his junior, but for the last two weeks Miss MacDougall. She has reported to Your Honour during those two weeks at different times of work that she's been doing with Mr Rosenbaum in respect of the completion of the preparation of the final address.
In our submission where there is the uncertainty as to Mr Rosenbaum's return, and given we're now in the 121st day of the trial, that as a matter of fairness to all the parties in the trial it must proceed forthwith, whilst, as we know it, the jury remains attentive, intuitive and conscientious to the task. To otherwise adjourn such that there'll be at least a month's interruption - I'm sorry, I shouldn't say at least - where there will be one month's interruption between when they were last here and when they hear the closing addresses, in our submission would be unacceptable. That's our submission, Your Honour.
HER HONOUR: No application for a discharge of jury from the Crown, the prosecution?
MR CAHILL: No, no. No, not at all, Your Honour.
HER HONOUR: I'm reinforced by that aspect of matters.
MR CAHILL: No, no, we would say that the jury is certainly functioning in the way appropriate. In other words, that it's performing its function of considering an evaluating the evidence, and from the Crown position we see that they are acting in a manner that would give us every confidence that they will deliver true verdicts, but there comes a point, Your Honour, where further interruption has to cease, in our respectful submission.
HER HONOUR: All right. Thank you very much, Mr Cahill. Yes, Miss MacDougall?
MISS MacDOUGALL: Your Honour, if I might clarify. Mr Cahill has just indicated that on the 16th I appeared as Mr Rosenbaum's junior, and a couple of days subsequent to that I corrected myself following discussion with Mr Rosenbaum. In fact I am briefed and have been briefed on both occasions when I have participated in this trial as substitute counsel. The fact that I have been - - -
HER HONOUR: You mentioned on - - -
MISS MacDOUGALL: And I - - -
HER HONOUR: On those occasions that it was on a limited basis.
MISS MacDOUGALL: Yes, Your Honour, indeed, and might I add that I spoke with my instructing solicitor this morning and confirmed with him that present requirements significantly exceed the brief that I accepted. Your Honour, I am, with the best will in the world, completely unable to assimilate this mass of evidence. I think it was a 49 volume brief of evidence, 20 pages - sorry, 20 lever arch folders of trial transcript running to 7,500 pages. I am deeply flattered at the Crown's opinion of my ability to undertake this task, but I'm afraid I cannot assist in that regard.
I am more than willing to give whatever assistance I can to Mr Rosenbaum, but if, as the Crown maintains, there is a genuine interest by the Crown in this being conducted as a matter of fairness to all parties in the trial, in my respectful submission, Your Honour, a closing address needs to be prepared by Mr Rosenbaum and I'm willing to offer whatever assistance I can, but it would be grossly unfair. Nenad Dragojlovic could not conceivably have a fair trial if Your Honour were to accede to the Crown's assertions and force myself, I presume, to deliver a closing this week. It simply can't be done, Your Honour.
HER HONOUR: Mr Singh?
MR SINGH: Nothing, Your Honour, I support Miss MacDougall's submission.[7]
[7]T7506-7508.
Still later that day, her Honour foreshadowed the possibility that the jury might have to be discharged if Mr Rosenbaum’s health did not permit him to return to his closing address in the very near future.
On 9 March 2010, the trial judge raised with the parties, in open court, her own health problems. The transcript reads as follows:
HER HONOUR: If I can address this generally to the Bar table, as you're all now aware, due to a brief - a matter has been raised and briefly discussed in the antechamber before this matter has been called on. Present during that discussion, myself and my Acting Associate, Mr Howard, and the learned prosecutor, Mr Cahill and his instructor, Ms Thompson, and Mr Singh and Miss MacDougall.
For reasons beyond the court's control, this trial will not be able to proceed this week. I'll place on the record that it's for a need for urgent surgery, as the judge presiding over this trial, there's no other option but to take this course and it is hoped that the trial will be ready to proceed next Monday, if not, Tuesday at the latest.
A message will be sent through to each of the jurors and I'll tell them the bad news that they won't be required tomorrow for reasons, as outlined, and that it is hoped that they will be required either Monday or Tuesday of next week when final addresses can finally commence in this trial.
As also canvassed with counsel and instructing solicitor, serious consideration needs to be given to a number of matters given to this further interruption in the trial. No one wants the last resort to be taken or step to be taken and that is the discharge of jury.
Mr Cahill, at this stage, is there any application from the Crown, in relation to discharge?
MR CAHILL: No, there's not.
HER HONOUR: Mr Singh?
MR SINGH: At this stage, there's not, Your Honour, but, obviously, we'll get instructions.
HER HONOUR: Need to consider that matter, Miss MacDougall?
MISS MacDOUGALL: Yes, Your Honour, Nenad Dragojlovic is in the same position.[8]
[8]T766-7.
On 25 March 2010, a juror fell ill, and the trial could not proceed. Mr Rosenbaum was still in the course of delivering his final address. There was some indication that he might not be physically able to complete that task. His junior would not have been in a position to step in, and do it for him. Her Honour once again flagged the possibility that, in that event, the jury might have to be discharged. However, when she ascertained the views of the parties regarding that matter, she was yet again told that there was no application for a discharge.[9]
[9]T8098.
On 26 March 2010, her Honour noted that another juror appeared to be coming down with an illness. Moreover, the jury had expressed concern about the length of the trial, and the fact that Easter was approaching. She indicated that she would ‘stagger’ her charge so that the jury could have an Easter break. Once again, she asked whether anyone wished to apply for a discharge. Once again, she was told that no such application was being made.[10]
[10]T8147.
On 30 March 2010, Mr Rosenbaum was still in the course of his closing address. He was not present in Court because of certain religious observances. Miss MacDougall, on behalf of Mr Dragojlovic, applied for an adjournment. However, the Crown raised concerns about the effect that a further adjournment would have upon the trial. The following exchange appears in the transcript:
MR CAHILL: We can't oppose [the adjournment] other than to say that the case must proceed, and we've got - we certainly can't agree to the adjournment. Your Honour has the submissions from Miss MacDougall. We know no more than what she tells the court. We can only refer to relevant aspects of what Your Honour's been told previously but we would certainly urge Your Honour to enquire of our learned friends further as to why we couldn't - why Mr Rosenbaum himself couldn't proceed on Thursday.
HER HONOUR: The problem with that, Mr Cahill, at the moment is he's incommunicado.
MR CAHILL: As we understood him to tell the court, he can't be contacted by Email or telephone but he can be spoken to personally.
HER HONOUR: Look, it's a very unsatisfactory state of affairs and it's an unsatisfactory state of affairs for both Mr Dragojlovic and Mrs Dragojlovic as well and, Miss MacDougall, it seems to be an unsatisfactory state of affairs as well and I'm getting a sense that there's been some difference of view about matters between you and Mr Rosenbaum in one sense, and I don't and should not seek detail of any of that without you having some further opportunity of discussion with Mr Rosenbaum and he also having put matters before the court, but I will need to hear from him as to why this script is not further advanced, because on a number of occasions he said to the court that - way back in February, that it was two thirds done or thereabouts, and even yesterday gave a statement, a clear statement, that there would be enough there for you to go through today and into tomorrow, although the application for adjournment was mounted yesterday on behalf of Mr and Mrs Dragojlovic. So I know he's a concern. There is an ongoing health issue and that's been placed before the court.
…
HER HONOUR: This jury, as I said yesterday, I'm getting a sense they've about had enough of punctuation and delay and I'm wondering - we're also eager to keep this matter going, there's been punctuation and delay along the way for all sorts of reasons, and I am concerned about the impact of that on the conduct of this trial, and no one at this stage has mounted as application for discharge of jury, and no one wants that. But the other thing I'm thinking, and I'm going to be thinking aloud at the moment, although we have the best wish to continue on Thursday if that is possible, I'm not sure what means can be put in place to enquire of Mr Rosenbaum whether that could be a possibility. From what's been said to me, you're only going to be able to meet with him tomorrow night, Wednesday.
Her Honour, with evident reluctance, granted the adjournment. She said:
I am very unhappy about this state of affairs, if I can put it in those terms, and that is an understatement. I'm not being critical of you [Miss MacDougall], and it's one of those situations that I'm left with really no option.
…
I'll grant the application for the adjournment in all the unique circumstances of this application and of this case to ensure fairness to Mr and Mrs Dragojlovic in all the circumstances. I am concerned about the impact of this further adjournment on the conduct of this trial and also on this jury. Just to confirm with all counsel at Bar table, there is no application for discharge of this jury being made at this time, having granted the application for the adjournment?
MISS MacDOUGALL: No. There's no application, Your Honour[11]
[11]T8289.
On 8 April 2010, the trial judge informed counsel that one of the jurors had dislocated her elbow and would be out of action for about two weeks. In seeking counsel’s views as to whether that particular juror should be discharged, or whether the trial should be adjourned, her Honour made the following observations:
I am still concerned, as I indicated yesterday, if I could now move to the other aspect of our jury, and that is with the conduct of this case, the significant interruption it's had, particularly since Christmas time, and also particularly in light of the ongoing final addresses, and I'm very mindful and can recall defence counsel urging upon the court that in no way should there be any interruption to final addresses. Well quite the reverse has happened, and that's happened beyond everyone's control. And I will need to hear from you in the context of this as well, Mr Rosenbaum, about your ongoing health issues and where we're at with the final address for Mr Dragojlovic, and where we're at with the script of that final address. But I will be assisted by counsel giving me their detailed consideration and views as to why this jury as a whole should not be discharged. All right, now, you may need time to consider that aspect of matters. As trial judge, I have an overriding obligation to ensure a fair trial for all parties, we have, and it's often been said, an alert and committed jury. And to go from 12 to 11 might seem insignificant, there is authority, and it has been done on previous occasions as we're all aware, but it does give me considerable concern as to the ongoing conduct of this matter and fairness. The other issue then is, and I'm not in any way suggesting at this stage of the proceeding I am urging a total discharge of jury, but I would be greatly assisted by counsel's views, and any case law as to why such application should not be - well, firstly it needs to be considered whether any counsel, prosecution or defence at the Bar table would wish to mount an application for discharge once I've heard about the discharge of the individual juror, or alternatively as to why the court has the power to do so at its own behest as I understand, if the court is troubled sufficiently as to the tainting of the process and that it would be impossible to ensure fairness to all parties.
Now, can I make the comment from the Bench, we've all been in this case for a very long period of time, and no one wishes to see a total discharge of this jury, and from what we've seen of our jury, I'm sure they would be incensed to think that that course would be taken.[12]
[12]T8422-3.
A short time later, her Honour returned to the question of the discharge of the jury as a whole. She said:
Firstly I need to hear about the discharge of the particular juror and then I'll need to hear further about the whole process and any impact that's had and why I shouldn't be considering discharge, a total discharge of jury.[13]
[13]T8430.
The prosecutor submitted that there was no basis for a discharge of the entire jury. He stated that he had confidence that the jury, notwithstanding the interruptions and delays, understood the issues and understood the evidence.
After seeking instructions, Mr Singh responded to her Honour’s invitation to consider whether the jury as a whole should be discharged by saying:
MR SINGH: If I can answer the second question first, Your Honour, that is why Your Honour shouldn't consider a discharge of the entire jury. The Juries Act in fact allows, as Your Honour well knows, us to proceed with ten jurors - this would still leave us with 11. We have very firm instructions from our clients, and this was on a conference call, so both Mr and Mrs Dragojlovic were present and all counsel were present, they are extremely anxious that this matter conclude before this jury.
HER HONOUR: Everyone's in heated agreement with that
Mr Singh - - -MR SINGH: But, Your Honour, there was - - -
HER HONOUR: But I am required to canvass these matters and also be assisted by the views of counsel.
MR SINGH: Yes. Your Honour, the fact of these punctuations or loss of time, or whatever Your Honour wishes to call it, has been again put to the clients and the potential consequences about that but they are extremely keen for this trial to proceed, despite whatever delays or punctuations may have occurred or may occur in the future. So those are the clear instructions about the discharge, that element.
HER HONOUR: So there's no application from - - -
MR SINGH: There's absolutely no application to discharge, in fact the application will be to proceed.[14]
[14]T8440.
On 12 April 2010, Miss MacDougall informed the Court that Mr Rosenbaum’s mother-in-law had died. As a consequence, Mr Rosenbaum would be unable to attend Court for several days. She added that she felt unable to continue with the closing address in Mr Rosenbaum’s absence. She then applied for an adjournment of the trial. That application was supported by Mr Singh.
The trial judge said:
It seems to be every time that we get over one obstacle and anticipate being able to proceed sooner [rather] than later, some other obstacle arises. I am finding it very difficult to look the jurors in the eye and say to them, "Here's the next possible scenario; it may be another two weeks and [it] is likely, and providing all goes according to plan, that should be the scenario."
I can only half imagine what the impact is on the individual jurors, let alone everyone else and the impact on the conduct and fairness of this trial. Everyone wants it to go to its conclusion. To have been running for this length of time. If I had a total discharge of jury, I could understand how they'd be incensed and everyone else feeling robbed. But at the same time if you look at the other side of the coin, the process is becoming more flawed.
How can I ensure a fair trial as best I can? Is that good enough?[15]
…
There's been much evidence, the jury have been very alert and committed, and at times could be said to have astounded us with their grasp of matters, but there has been so much interruption this year, and in particular with the defence final addresses. It raises some concerns.[16]
[15]T8481.
[16]T8484.
The prosecutor opposed an adjournment. He submitted that counsel had had ample time to prepare the closing address, and that Miss MacDougall ought to be in a position to deliver it.
The matter was adjourned until 15 April 2010. On that day, Mr Rosenbaum was in a position to continue with his closing address.
However, on 19 April 2010, the foreperson of the jury had to go home after the luncheon adjournment because of a family emergency. That prompted the following exchange:
HER HONOUR: And as far as your instructions from your clients are concerned, is there any application for total discharge of this jury given this further delay?
MR ROSENBAUM: No, there is not, Your Honour.
MR SINGH: No, Your Honour.
HER HONOUR: Mr Cahill, anything from the prosecution point of view?
MR CAHILL: No, Your Honour.[17]
[17]T8680.
This summary provides something of an indication of the litany of mishaps that occurred throughout this trial. There is obvious merit in the applicants’ contention that the evidence presented to the jury was put forward in a ‘dislocated’ fashion. The trial was of inordinate length, and it is clear that her Honour became increasingly concerned about the effect that this was having upon the jury.
The question to be resolved is whether, by reason of the events set out above, there was a miscarriage of justice.
The authorities dealing with dislocated trials
The principles that govern a ground of this nature are well settled. The starting point must be R v Wilson & Grimwade.[18] The applicants in that case had been convicted of 19 counts of fraudulently inducing the investment of moneys. In summary form, the presentment had alleged that the accused had induced a company to enter into an agreement to subscribe to units in a unit trust. They had done so by making ‘promises or forecasts’ in an investment report which were false or deceptive. It was alleged that Wilson and Grimwade either knew those promises or forecasts to be deceptive, or were reckless as to their truth.
[18][1995] 1 VR 163 (‘Wilson & Grimwade’).
Wilson’s defence was that he had not promoted the sale of units to investors. He also denied having seen the relevant investment report. Grimwade denied that the investment report was false in any particular, and denied that he had played any part in the promotion of the unit trust concerned. As the Court observed, those defences ‘served to widen considerably the area of proof required to be undertaken by the Crown’.[19]
[19]Ibid 168 (Phillips CJ, Crockett and Tadgell JJ).
The trial in the County Court was extraordinarily lengthy. There were 676 days between arraignment and verdict, of which 467 days were available sitting days. The Court sat on 294 of those days (63%). On many sitting days, the jury were absent or were present only briefly.[20]
[20]Ibid.
Further, the trial was the second which Wilson and Grimwade had faced on these charges. The first trial had commenced on 23 August 1989. On 29 March 1990, Grimwade’s wife died. He was found to be in no fit state to be cross-examined further. The trial was aborted and the jury were discharged on 10 April 1990, some 33 weeks after the trial had commenced. The trial judge considered that an adjournment of a duration sufficient to enable his recovery would be ‘destructive of the jury’s capacity to perform its task’.[21]
[21]Ibid 169.
The second trial, which was the subject of the appeal, suffered from a ‘fractured presentation to the jury of the evidence and counsels’ addresses’.[22] The following points go some way to illustrating the extent to which the trial was affected by delay and fragmentation:
[22]Ibid 170.
·there was not a single week of unbroken sittings during the presentation of the Crown’s evidence;
·the jury did not participate in the trial between 3 December 1991 and 14 January 1992;
·during the first eight months of 1992, the jury were present in Court for only 10 days in January 1992, four full days and six part-days in February, four full days and two part days in March, one day and two part-days in April, three full days and four part-days in May, six days and three part-days in June, one day and one part-day in July, and five days and seven part-days in August;
·the closing address by counsel for Wilson lasted for some 55 calendar days;
·one and a half years elapsed between the conclusion of the first Crown witness’ evidence, and the jury’s retirement;
·about six and a half months elapsed between the close of all the evidence and the jury’s retirement.
There were various reasons for the fragmentation of the trial. The trial judge was chairman of the Youth Parole Board, and his regular attendances at that body (at least fortnightly) required the adjournment of the trial. At one point, the judge became ill, necessitating the adjournment of the trial for most of July 1992. In all, the judge’s absences accounted for nearly 22 per cent of the time the jury were absent from the trial.
The most significant reason for the fragmentation, however, was delays owing to circumstances personal to the jurors, including illness, bereavement and pregnancy. For example, for a large part of 1992 the trial did not proceed on Thursday mornings so that one juror could attend lectures.
On 14 May 1991, the trial judge adjourned the trial for one week so that he could consider the evidence which had so far been led (some 4,000 pages of transcript).
On 4 September 1991, the jury raised their concerns about the length of the trial. Senior counsel for the Crown expressed the hope that the trial would finish before Christmas of that year.
The trial in fact continued for the best part of a year. It was not until 3 August 1992 that counsel for both accused made an application for the discharge of the jury on the basis that there was no longer any reasonable prospect of their being able to return a true verdict. The trial judge said:
I do not mind stating the feature of this trial that has caused me the greatest disquiet and has, in my view, bedevilled the entire proceedings was what has turned out to be the grossly misleading estimate of the likely duration given to the jurors before they were empanelled. It is in this context I feel the trial has gone out of control. Even now it would be impossible to give a reliable estimate of finality. ... There is not the slightest doubt the continuity and progress of this trial has been interrupted.
…
I must say I am somewhat troubled by the number of issues placed before this jury. However, once again I feel that is the way the trial has gone; however, I make no secret of my concern in that regard. I do not, at least at this stage, consider that fact alone calls for a high necessity to discharge the jury.[23]
[23]Ibid 173.
A further application for a discharge, on the same grounds, was made on 3 September 1992, by which stage the reasons of the English Court of Appeal in R v Cohen[24] (the celebrated ‘Blue Arrow’ case) had been handed down. The trial of that case (on a charge of conspiracy to defraud investors) had begun on the same day as the retrial in Wilson & Grimwade. Nevertheless, by September 1992, the English Court of Appeal had already allowed the appeal in the Blue Arrow case. It had held that the jury should have been discharged, and that the trial had become unmanageable owing to
the awesome time-scale of the trial, the multiplicity of issues, the distance between evidence, speeches and retirement and not least the two prolonged period [sic] of absence of the jury (amounting to 126 days).[25]
[24]R v Cohen (Unreported, English Court of Appeal (Criminal Division), 28 July 1992).
[25]Wilson & Grimwade [1995] 1 VR 163, 173.
The trial judge in Wilson & Grimwade nevertheless refused that second application for a discharge of the jury.
In order to obtain a result before Christmas 1992, the trial judge indicated that he would curtail his charge to the jury. He said to the jury that they were
faced with enough material for what would be about, if not at least, seven normal trials. Seven normal criminal trials. In relation to those, each of them has some degree of complexity. It is impossible for me to cover all the issues, else as I say, you would be imprisoned here for about the length of time that I have estimated to you. I will deal with some in the hope of concluding the charge to allow you ample time to retire to consider your verdict prior to Christmas. That is my primary aim.[26]
[26]Ibid 178 (Phillips CJ, Crockett and Tadgell JJ).
The Court of Criminal Appeal in Wilson & Grimwade said that the judge’s statement to the jury was unfortunate, and that it conveyed the impression that it was permissible to take short-cuts in order to finalise the trial before Christmas.
Ultimately, the Court summarised the trial in this way:
By the end of the Crown case on 3 December 1991, at latest, it was evident that the trial had become unmanageable. The complications that developed out of the under-estimate of duration that the jury had initially been given fed on themselves to produce others. The judge continually and understandably expressed himself to be seriously concerned about the profligate use or misuse of time. He was no doubt anxious that the jury should not be lost. He went to extraordinary lengths to minimise the personal inconvenience to jurors - by acceding so far as he could to their individual requests for indulgence. There is no doubt, however, that his doing so not only of itself lengthened the re-trial but bred further requests for indulgence. His Honour's observation in one of his reports to this court that "the longer the trial went loss of time increased" is not surprising.[27]
[27]Ibid 176.
The Court then turned to whether the circumstances of the trial were such that the appeal should be allowed. It formulated the question in this way:
The question we are to consider is whether, in the circumstances we have described, there is a real danger that, as regards the applicant Grimwade, the jury failed to perform their function properly. That was a test propounded in R v Higgins and accepted by all counsel here. In whose perception is such a real danger to be seen? Through whose eyes is justice to be seen to be done? The answer to each question must be that the verdict is to be recognisably true and fair to an objective observer having knowledge of all the relevant facts and circumstances.[28]
[28]Ibid 177.
In the Court’s analysis, the starting point was to bear in mind that ‘juries can deal with long and complex trials and have been known to do so satisfactorily when given appropriate opportunity and assistance’.[29] It emphasised that the mere fact that a proceeding is lengthy or complex will not necessarily lead to a conclusion that the jury did not have an opportunity to give a true verdict according to the evidence.
[29]Ibid 176.
The Court allowed the appeal, and quashed the convictions. It said:
The length and complexity of the proceeding were two factors with which the jury might be supposed to have coped had the presentation to them been otherwise. Given those factors orderly and connected assistance to the jury was, however, an inescapable requirement. We are driven to conclude that such assistance was not provided. The disruption which occurred over the six or seven months preceding the jury's retirement was intolerable. It was no less so because the jury happened to survive their ordeal.[30]
[30]Ibid.
In reaching that conclusion, the Court noted that the jury’s own perception of their capacity to bring in a verdict is not determinative. Further, the mere fact that the jury did, in fact, reach a verdict cannot obscure the substantial difficulties that the jury faced.[31]
[31]Ibid 181.
It is clear that the Court considered that the trial had been extraordinary. It said:
Before parting with the case we wish to say that our decision is in no respect to be understood as providing a passport to those who would seek to benefit from a wayward criminal trial. This case is in our experience unique. We hope and expect that no other will approach it in its abnormal characteristics. The learned trial judge was not to know at the outset that the re-trial would assume the shape it did, It became increasingly plain, however, that the proceeding was becoming distorted. Despite dismayed expressions of urgency, no correspondingly urgent action was taken with a view to arresting the distortion. A firm and resolute management of the trial, and a strong co-operative effort by judge and counsel, were imperative if it was to continue as a proper trial.[32]
[32]Ibid 185.
In R v Higgins[33] (the case to which the court in Wilson & Grimwade referred as having outlined the test to be applied in matters of this kind), the Court of Criminal Appeal dealt with a submission that the length and complexity of the second longest trial ever conducted to that time in Victoria[34] had been such that there was a real danger that the jury had failed to perform their function properly.
[33](1994) 71 A Crim R 429 (‘Higgins’).
[34]The longest was the trial in Wilson & Grimwade.
The appellant in that case, a suspended police officer, had been convicted of four counts of conspiracy to obstruct the course of public justice. The Crown had alleged that between 1977 and 1983 he had participated in a conspiracy to protect certain persons involved in operating brothels from prosecution.
The trial followed an aborted committal during which only one quarter of the Crown witnesses had been examined, and yet 8,000 pages of transcript had been produced. The trial judge in Higgins accepted that the Director had been justified in concluding that the way in which witnesses were being cross-examined at the committal had amounted to an abuse of process. The Crown then proceeded by way of direct presentment.
The trial itself began on 1 November 1991. A verdict was returned on 26 March 1993. The evidence for the prosecution, had it been led without interruption, would have occupied about 80 sitting days. However, that evidence in fact occupied almost a year, between 14 November 1991 and 30 October 1992.
The defence evidence was called between 12 November 1992 and 11 December 1992. Had that evidence been led in an uninterrupted fashion, it would have occupied about 10 sitting days, instead of the month or so it in fact took.
The result of submissions, rulings and other interruptions to the evidence was that the whole of the evidence called at the trial, which would have occupied about 90 sitting days if given without interruption, was, in fact, given over a period of about 166 sitting days.
In addition to the time taken in presentation of the evidence, the final address for the Crown lasted 56 hours. It occupied some 17 sitting days, in whole or in part. The final address for the defence lasted 44 hours and occupied 14 sitting days. The trial judge’s charge to the jury occupied 15 sitting days.
Among the interruptions to the trial were a series of breaks for various reasons. These included illness, pregnancy, death, and holidays for the jury. There were a total of 99 days on which the jury were absent for one reason or another. In September 1992, the judge took a break of five sitting days.
Counsel for the appellant in Higgins contended that the trial had gone on for so long that the jury could not properly have recalled their impressions of all of the witnesses, and so could not have made a reliable assessment of the witnesses’ credibility. Counsel also noted that a period of three months had elapsed between the close of the evidence and the retirement of the jury, and emphasised the discontinuous, and dislocated, nature of the trial.
The Court, however, rejected the argument that the trial had miscarried. It held that ‘notwithstanding the very great length and notable discontinuity of the trial’, the ground of appeal had not been made out. In reaching that conclusion, the Court was keen to ensure that its remarks were not taken as in any way endorsing the conduct of the trial. Indeed, the members of the Court expressed the hope that they ‘shall never see anything like it again’.[35] In concluding that there was no real danger that the jury failed to perform their task properly, the Court emphasised the following matters:
[35]Higgins (1994) 71 A Crim R 429, 439 (Brooking, Byrne and Eames JJ).
·the jury only had to consider one accused;
·no expert knowledge or special experience was required to understand the subject matter of the charges;
·the evidence led in support of the charges was of simple acts and events;
·the defence case was a simple denial that the events the subject of the prosecution’s evidence had occurred;
·the jury were given every available assistance, including visual aids in the form of charts, copies of exhibits and a jury room equipped with filing cabinets and other special facilities; and
·the foreperson’s questions to the trial judge suggested a strong grasp of the issues and supported the trial judge’s positive assessment of the jury’s capabilities.
The Court’s emphasis on those factors was motivated by a comparison of the facts of the trial with the circumstances of other very lengthy trials.
The Court noted that long criminal trials were not a new phenomenon. It referred to R v Castro[36] (the ‘Tichborne’ case). That trial, in which it was alleged that the accused had committed perjury during his earlier attempt to recover certain property on the basis that he was Sir Roger Tichborne, who had disappeared many years earlier whilst travelling overseas and was presumed dead, lasted some 10 months. The Lord Chief Justice’s summing up alone occupied 20 sitting days. The jury ultimately found the accused guilty on the basis that he was not, in fact, Sir Roger Tichborne, but rather a butcher from Wagga Wagga.
[36](1881) 6 AC 229.
The Tichborne trial remained the longest criminal trial in British history until the trial in the Blue Arrow case, to which reference was made in Wilson & Grimwade. The trial in Blue Arrow began on 11 February 1991, and the jury did not retire until exactly one year later. There were 10 accused.[37] A total of 94 witnesses gave evidence for the prosecution. As has been noted above,[38] it was later held by the English Court of Appeal that the jury’s verdict could not stand, owing to the length, complexity and fragmentation of the trial.
[37]Made up of seven men, a merchant bank, its parent and a firm of stockbrokers. The trial ran considerably longer than the six month trial in 1990 of four executives of Guinness relating to dishonest conduct in a share support operation during a take-over bid. Their appeals against conviction were, with a minor exception relating to only one count, dismissed: R v Saunders (No 1) (Unreported, English Court of Appeal, 16 May 1991). For a detailed summary of Blue Arrow and the problems often associated with lengthy fraud trials, see Mark Weinberg, ‘Complex Fraud Trials – Reducing their Length and Cost’ (1992) 1 Journal of Judicial Administration 151.
[38]See above para [82].
The Court in Higgins referred to R v Simmonds, in which the English Court of Appeal dismissed an appeal by four men and two companies convicted of conspiracy to defraud.[39] The trial had lasted for 61 days, and, at the time, was second in length only to the Tichborne trial. The Court remarked upon the ability of jurors to comprehend even voluminous evidence.[40] Fenton-Atkinson J said:
It is, however, right to mention that the calibre of juries today can be high, and that their capacity to follow weeks of evidence should not be underestimated … an examination of the transcript shows how keenly and accurately the foreman in particular followed the case … the trial was in essence a simple one.[41]
[39][1969] 1 QB 685.
[40]Ibid.
[41]Ibid 694.
In Higgins, the Court also referred to a number of Australian authorities (the appeal in Wilson & Grimwade not yet having been determined). Reference was made to R v Mitchell,[42] an appeal following a trial on 13 charges of conspiracy to cheat and defraud. The trial had occupied 133 sitting days, and lasted from 15 September 1969 to 6 April 1970. In dismissing the application for leave to appeal against conviction, Winneke CJ (with whom Pape and Lush JJ agreed) noted that the evidence was ‘voluminous’, and said, in endorsing the English Court of Appeal’s statements in Simmonds, that
[w]here such a mass of evidence and length of trial is involved, an intolerable burden is imposed on all concerned and particularly upon the jury. Whilst a community, such as ours, which is regulated by the principles of the common law, cannot concede that any case is too complex or too extensive to be heard and determined in due process of law, there is a real danger that the system will be frustrated and brought into public disrepute, unless those concerned with the conduct of the trial have the courage and a sense of responsibility to take advantage of the means provided for delimiting the issues…[43]
[42][1971] VR 46.
[43]Ibid 64.
Issues of this kind have also arisen in New South Wales. In R v Annakin,[44] the New South Wales Court of Criminal Appeal rejected the appellants’ contentions that they had not had a fair trial.[45] That argument was based upon the length of the trial and the voluminous nature of the evidence. The appellants’ trials for murder had run from April 1986 until June 1987. It had been alleged that they had participated in the ‘Milperra massacre’ on 2 September 1984. That incident had involved an affray between two rival motor cycle clubs during which a number of club members on both sides were shot and killed, as well as one member of the public.
[44](1989) 17 NSWLR 202 (‘Annakin’). The judgment appears as an annexure to R v White, Eaves and Parker, which dealt with appeals by others involved in the Milperra massacre: (1987) 17 NSWLR 195.
[45]The Court quashed the appellant’s murder convictions on another basis, and substituted convictions for manslaughter.
The trial had involved 31 accused. A total of 249 witnesses were called by the Crown. The appellants contended that the jury could not possibly have recalled evidence which had been given several months earlier. Nonetheless, the Court of Criminal Appeal was not persuaded that the appellants had not received a fair trial.[46]
[46]Annakin (1989) 17 NSWLR 202, 210 (Lee CJ at CL, Yeldham and Allen JJ).
Turning to more recent authority, the question of the effect of a very long and complex trial was again considered in R v Lam (Ruling No 29).[47] That was a murder trial against seven co-accused. Ultimately, all of the accused were found guilty of the murder of one victim. Two of the accused were also found guilty of the murder of two other victims.
[47][2005] VSC 414 (‘Lam’).
The trial commenced on 24 January 2005. On 7 September 2005, one day before the jury was to commence their deliberations, counsel for all accused made an application for discharge of the jury without verdict. The basis for that application was that the trial had become ‘disjointed’ due to the lapse of time between the conclusion of the Crown case on 31 May 2005 and the jury’s retirement. The trial
judge, Redlich J (as his Honour then was), noted that the application had been made with little enthusiasm and with little hope for success.
In order to convict the applicants on the group tax counts, the Crown had to establish that Jontaz had employed the workers and was paying them wages. It was an element of the income tax counts that the business conducted by Jontaz was a labour hire firm, rather than a labour placement firm.
In January 2010, counsel for each applicant foreshadowed that they would be making a no case submission. Counsel for Mr Dragojlovic requested that those applications be deferred until after the defence evidence had been led. That request was seemingly made so that the no case submission could be determined after Mr Lipson, a witness the defence intended to call to give evidence as to whether the workers were employees of Jontaz, and to whose evidence we will return, had given evidence. On 24 February 2010, the trial judge indicated that she would rule that each applicant had a case to answer. Her Honour ruled to that effect on 5 March 2010. The ruling was brief, and provides little by way of discussion. The applicants did not challenge that ruling before this Court.
However, a ruling by a trial judge that there is evidence upon which a jury might lawfully convict is not determinative of the question raised by the present ground — whether, upon the whole of the evidence, it was open to the jury to be satisfied beyond reasonable doubt of the guilt of each applicant.[131]
[131]M v The Queen (1994) 181 CLR 487, 492-5 (Mason CJ, Deane, Dawson and Toohey JJ).
In asking that question, as Ashley JA pointed out in Rodi v The Queen,[132] the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, and has had the benefit of having seen and heard the witnesses, is not to be disregarded. As his Honour further observed:
A reasonable doubt experienced by the court – unless the jury’s advantage in seeing and hearing the evidence is capable of resolving that doubt – is a doubt which a reasonable jury ought to have experienced. Emphasising that the question is whether it was open to the jury to be satisfied of guilt to the criminal standard, in Libke v The Queen Hayne J (with whom Gleeson CJ and Heydon J agreed) observed that it involves consideration whether the jury must, rather than might, have entertained a reasonable doubt. It is that consideration which must factor in allowance for the jury’s constitutional role and advantages.[133]
[132][2011] VSCA 48.
[133]Ibid [19].
In order properly to consider this ground of appeal, we are thus obliged to conduct our own assessment of the whole of the evidence to determine whether it was ‘open’ to the jury to be satisfied beyond reasonable doubt of the applicants’ guilt.[134] In a case such as this, that question will be answered affirmatively unless we conclude that the jury must, rather than might, have entertained such a doubt.
[134]Greensill v The Queen [2012] VSCA 306, [83] (Redlich, Osborn and Priest JJA); R v Klamo (2008) 18 VR 644, 653-3 (Maxwell P).
It is necessary to refer more extensively to the facts of the case and the arguments of each party.
The question whether the arrangement between Jontaz and the workers could be considered an employer/employee relationship is to be determined by reference to the non-exhaustive indicia outlined by the High Court in Stevens v Brodribb Sawmilling Co Pty Ltd:[135]
[135](1986) 160 CLR 16 (‘Brodribb’).
a) the degree of control which the former can exercise over the latter;
b) the mode of remuneration;
c) the provision and maintenance of equipment;
d) the obligation to work;
e) the hours of work and provision for holidays;
f) the deduction of income tax; and
g) the delegation of work by the putative employee.[136]
[136]Ibid 24 (Mason J).
The trial judge explained the ‘control’ test and the other indicia to the jury in her charge. It was by reference to these indicia that the Crown sought to argue that the workers were employees of Jontaz. It was not suggested that, in so directing the jury, her Honour had made an error of law. The submission was confined to the contention that the evidence did not permit the conclusion to be drawn that the relationship between Jontaz and the workers was that of employer and employee.
The Crown case
As we have said, the Crown contended that Jontaz operated a labour hire business, whereby the applicants provided market garden farmers in the Werribee area with workers to assist the farmers as shed hands, pickers and growers.
The Crown relied upon the following facts from which it was to be inferred that an employer/employee relationship existed between Jontaz and the workers. Jontaz directed the workers when and where to work. Mr Dragojlovic transported them to and from the farms at which they were to be stationed for the day. The farmers would pay him directly. He, in turn, would pay the workers. It contended that the information contained in ‘the Red Book’ supported the existence of an employer/employee relationship. The Red Book contained a comprehensive list of workers, their hours and days of work, and the farmers to whom workers were supplied. Various cheque stubs and receipts detailed payments from those farmers. Jontaz issued group certificates and provided employment declaration forms to 16 workers during the charged period, but none for any of the other 234 workers named in the Red Book.
Two experts — Mr Jackson, a forensic chartered accountant and Mr Davis, a taxation auditor working with the ATO — gave evidence regarding the contents of the Red Book and all of Jontaz’s additional business records and tax documents. They stated that Jontaz’s records represented a methodical recording system which tracked the number of workers who had been deployed to individual farms, and the remuneration they would be entitled to receive on a weekly basis for the work performed. The Red Book also specified the rate of pay for each worker. Even when farmers requested that a certain worker no longer be provided, Mr Dragojlovic had the last say regarding that matter.[137]
[137]Evidence of Con Mazaris.
As to payment for the workers, barring a couple of rare occasions (discussed below), the farmers never paid the workers directly.[138] The farmers made weekly payments to Jontaz at an agreed rate per worker, per day. The payments were made by cheque payable to ‘Dragojlovic’, ‘Jontaz’ or to ‘cash’, and ‘please pay cash’ was endorsed on the cheques.[139] The cheque stubs that recorded payments made by the farmers to Jontaz listed only the number of workers, and did not include any of the individual workers’ details.
[138]See evidence of Steve Liangos; John Zausa; Rose Fillipin .
[139]See evidence of Steve Liangos; Fred Velisha; Con Karcoushkas;; Robert Portogallo.
As we have already noted, two sets of records were kept by the applicants in relation to the wages paid and the payments received from farmers. In addition to the dual receipt books, the applicants recorded understated wages and income in various charts which were used for income tax purposes. The true figures were set out in the Red Book. They did not disclose to their accountants the full amounts received from the farmers. Only those receipts for cheques made payable to Jontaz were disclosed. Thus, the income revealed to the accountants, and declared in the returns, was far less than the amount that Jontaz actually received. The applicants told their accountants, by way of explanation, that the additional amounts deposited for the 1999 financial year were by way of cash loans by them as shareholders. The Crown’s expert testified that there was no evidence of any cash payment by the applicants by way of loan to Jontaz, and that the additional deposits and the receipts for them showed that they were Jontaz’s income.
The tax alleged to have been evaded by the applicants in respect of each count was calculated by applying the relevant rate of group tax which was due in respect of the wages recorded in the Red Book, and confirmed in the cheque records in the Red Book. Both experts concluded that Jontaz was operating as a labour hire firm, and that the names in the Red Book on each worksheet were properly to be characterised as employees. This was consistent with the evidence given by Jontaz’s accountant, who was told by Mr Dragojlovic that the nature of Jontaz’s business was the hiring of labourers to farmers in and around the Werribee area.
In 2001, Jontaz was required to obtain an Australian Business Number (‘ABN’) and to register for GST. Jontaz’s business practices subsequently changed — it began to increase its daily rates for each worker, charging the farmers $115.50 per worker per day, and began providing tax invoices for payments. In 2000, Jontaz disclosed a gross income of $181,330 in its tax return, whereas in the 2001 financial year, following the introduction of GST, Jontaz declared an income of $882,412. The Crown contended that it could be inferred that the increase in wages and the massive increase in declared income was attributable to the fact that Jontaz could no longer keep the wages secret, because the new tax system compelled it to keep accurate records.
The Crown also relied upon the absence of any evidence by the applicants, or any statement made at any material time, to the effect that Jontaz was a labour placement firm. In considering whether the hypothesis that it was a labour placement firm, rather than a labour hire firm, was reasonably open, we note that the Crown, in its Written Case, drew upon the observations of Brooking JA (with whom Charles JA and Southwell AJA agreed) in R v Rice[140] that regard may be had to the absence of evidence to support a particular hypothesis when the evidence, if it existed, to support that hypothesis, would be within the knowledge of the accused.[141]
[140][1996] 2 VR 406, 421.
[141]Weissensteiner v The Queen (1993) 178 CLR 217; R v Neilan [1992] 1 VR 57.
Based on this evidence, the Crown contended that it was open to the jury to conclude that it was Jontaz, and not the farmers, that controlled and employed the workers.
Dishonesty
An essential element of the offence of defrauding the Commonwealth is that the accused used ‘dishonest means’ to achieve his or her object.[142] As to that element, the trial judge directed the jury that ‘the test is really whether the conduct of each of the accused after considering each of the cases separately, was dishonest according to the standards of ordinary, decent people’. No complaint was made regarding that direction.
[142]Spies v The Queen (2000) 201 CLR 603.
To demonstrate the element of dishonesty, the Crown led evidence that Jontaz used a dual system of invoicing farmers in relation to the workers. The second set of records was said to provide evidence of a dishonest intent to conceal company income from the applicants’ accountants.
The applicants maintained one receipt book where the cheques were made out by the farmers to Jontaz as payee, and another where the farmers’ cheques were cash cheques. The total receipts invoiced by Jontaz from 1999 to 2000 far exceeded the income Jontaz disclosed to its accountants. Jontaz’s reported income in 1999 was $118,603. The bank deposits by Jontaz of payments by farmers during the same period was $233,234.39.
Mrs Dragojlovic’s role
The Crown relied upon the following evidence as establishing that Mrs Dragojlovic had dishonestly participated in this scheme. She was a director of Jontaz, and had shared responsibility for its management and control. She had ready access to the Red Book. She had signed various company records, including documents relating to the Jontaz business bank account, receipts that were issued to farmers and income tax returns. She had attested to the accuracy of the tax returns. The evidence disclosed that she was the first point of contact for Jontaz’s accountants.
The applicants’ submissions
It is necessary to provide only a brief summary of the applicants’ extensive submissions that the evidence did not establish that Jontaz had the necessary degree of control over the workers to be their employer. They each pointed to the fact that no worker had given evidence, and that the farmers who had testified had no knowledge of the working arrangements between Jontaz and the workers. They argued that the jury could not exclude the reasonable possibility that the workers were not, in fact, Jontaz employees.
It was submitted that it was not open to the Crown’s forensic accounting experts to state unequivocally that Jontaz was a labour hire firm. It was further submitted that their conclusions had been reached on the basis of insufficient or unsatisfactory evidence, given that they had never spoken to any of the workers or any of the farmers. Moreover, they had never verified the accuracy of certain charts upon which they had relied.
It was said that the experts could not have drawn the conclusions which they did from the Red book as the names listed in the tables did not identify particular individuals with any specificity. It was said that there was no certainty that when a name appeared multiple times in the Red Book, it belonged to the same person. The full names in the payroll activity summary and group certificates could not be linked with the first names in the Red Book.
Further, the applicants submitted that Mr Jackson made concessions about the nature of Jontaz’s business which vitiated his ultimate conclusion. He conceded that ‘in isolation’ it was possible that workers specified their rates of pay, that the Red Book was not a complete record of all wages paid by Jontaz, and that the workers had a choice as to how they travelled to the farms. He acknowledged that he had no information as to which workers arrived by bus, and which workers got to the farms by their own means.
The applicants also relied upon evidence given by some farmers which it was said undermined the Crown’s contention that the workers were employed by Jontaz.Two farmers, in particular, gave evidence that they made direct payments to workers on four occasions. Those workers had arranged through other farm contractors to work at the particular farm. This was said to be an indication that the workers were not under the control of Jontaz, but were free to accept offers of work from whichever farm contractor they chose. The evidence of these direct payments to workers was a material fact which, it was submitted, was not considered by the Crown’s experts.
The applicants further submitted that the opinion of Mr Lipson, a forensic accountant called by the defence, ought to have been preferred to that of the Crown’s experts. That was because Mr Lipson was the only witness who had experience of working with a placement agency. He testified that the books and records he examined, including the Red Book, were unsophisticated and rudimentary. In his opinion, they could not form the basis for a conclusion that Jontaz was either a labour hire firm or a placement agency. In his view, the records were consistent with Jontaz being either. Those records did not, he said, provide any evidence of control over the workers.
Complaint was also made on appeal that Mr Lipson had not been not cross-examined about the buses operated by Jontaz, and that it had not been put to him that the use of those buses provided an indication of control.
The applicants acknowledged the deduction of income tax in respect of those 16 workers to whom Jontaz issued group certificates. They argued, however, that group certificates and employee declaration forms were indicative, but not conclusive, of the existence of an employer/employee relationship. As to Jontaz’s increased revenue after the introduction of the new tax system, the applicants submitted that any increase in revenue would have been entirely consistent with Jontaz operating a placement agency business, because the new tax system contemplated an agent recording ‘revenue’, as if the agent had received the payments in its own right.
In respect of the other indicia of an employer/employee relationship referred to in Brodribb, the applicants submitted that there was no evidence of Jontaz having provided or maintained work equipment (other than the bus). Moreover, there was no evidence of any obligation on the part of the workers to carry out particular duties. The only record of the hours of work was the Red Book, which did not list full names, and was too uncertain to be conclusive. As to the mode of remuneration, the applicants submitted that the only evidence was in regard to the direct payment of the worker by the farmers where the payment was by cheque.
Mrs Dragojlovic submitted that it was not open to the jury to conclude that she acted dishonestly. She submitted that neither the fact that she was a director of Jontaz, nor the fact that she was married to Mr Dragojlovic, was sufficient to fix her with knowledge of the offences. The jury could not exclude the hypothesis that she was not aware of the Red Book. Nor, even if she was, could the jury exclude the hypothesis that she did not understand its contents. No adverse inference could be drawn merely from the fact that the Red Book was found in the family living room. It was further submitted that there was no direct evidence to show that she was aware of Jontaz’s ‘true’ financial situation. The jury could not infer that she knowingly conveyed false information to the accountants, or to the ATO.
Conclusion
The Crown relied upon a large body of circumstantial evidence to support the contention that Jontaz was a labour hire firm, and that the workers were Jontaz’s employees. The applicants focussed upon individual items of evidence to submit that, because innocent inferences could not be excluded, the jury should have had a reasonable doubt as to guilt. But because an individual piece of evidence may, when viewed in isolation, yield an inference compatible with innocence does not mean that the inference for which the Crown contends should necessarily be rejected.[143] Circumstantial evidence should not be considered in isolation. Its cumulative weight must be assessed.[144]
[143]R v Hillier (2007) 228 CLR 618.
[144]Shepherd v The Queen (1990) 170 CLR 573, 580 (Dawson J).
In Hillier v The Queen,[145] Gummow, Hayne and Crennan JJ (Gleeson CJ and Callinan J agreeing) stated that a circumstantial case is not to be considered piecemeal either at trial or on appeal. Their Honours referred[146] to the following passage from the judgment of Gibbs CJ and Mason J in Chamberlain v The Queen [No 2]:
At the end of the trial the jury must consider all the evidence, and in doing so they may find that one piece of evidence resolves their doubts as to another. For example, the jury, considering the evidence of one witness by itself, may doubt whether it is truthful, but other evidence may provide corroboration, and when the jury considers the evidence as a whole they may decide that the witness should be believed. Again, the quality of evidence of identification may be poor, but other evidence may support its correctness; in such a case the jury should not be told to look at the evidence of each witness 'separately in, so to speak, a hermetically sealed compartment'; they should consider the accumulation of the evidence: cf Weeder v R.
Similarly, in a case depending on circumstantial evidence, the jury should not reject one circumstance because, considered alone, no inference of guilt can be drawn from it. It is well established that the jury must consider 'the weight which is to be given to the united force of all the circumstances put together': per Lord Cairns, in Belhaven and Stenton Peerage, cited in Reg v Van Beelen; and see Thomas v R and cases there cited. [147]
[145](2007) 228 CLR 618.
[146]Ibid 638.
[147](1984) 153 CLR 521, 535 (‘Chamberlain [No 2]’).
This Court’s task, in dealing with a ground such as this, is to look at the evidence presented by the Crown in its entirety, and to determine whether it had established the hypothesis for which the Crown contended. If, upon a consideration of the whole of the evidence, an innocent hypothesis cannot be excluded, or if there is a lacuna in the Crown case that could be said to represent a ‘solid obstacle to reaching a conclusion beyond reasonable doubt’, the ground would be made out.[148]
[148]R v Shah [2007] SASC 68, [4] (Doyle CJ); R v Vjestica (2008) 182 A Crim R 350.
In our opinion, there was an adequate evidential basis upon which the jury were able to find, beyond reasonable doubt, that the workers were Jontaz’s employees, and that the applicants were guilty of the offences charged. The jury were entitled to reach these conclusions as a consequence of the combined weight of the evidence of: Jontaz’s business records; tax returns; employment declaration forms and group certificates; the content of the Red Book; the dual payment system; the conclusions reached by the Crown experts that the workers were Jontaz’s employees; the farmers’ evidence as to the basis on which the workers were supplied to them in a manner consistent with labour hire practices; and the advice of Mr Dragojlovic to Jontaz’s accountants that its business was the hiring of labourers to farmers. In our view, the ‘united force’[149] of this evidence was compelling.
[149]Chamberlain [No 2] (1984) 153 CLR 521, 535.
Although the farmers provided the farming equipment and directed the workers once the workers were at the farm, that was not inconsistent with the practice of a labour hire business. The Crown led persuasive evidence of the control Jontaz exercised over the workers. In addition to the evidentiary material discussed above, the cheque stubs and receipts showed that farmers were concerned only with the numbers of workers, and not their identity. The workers did not make separate work arrangements with the farmers save in a very small number of cases. There were only some 15 or 16 such separate arrangements involving two farmers and five workers, out of more than 40,000 payments made over the four year period specified in the counts. The overwhelming effect of the farmers’ evidence was that Mr Dragojlovic would decide who worked where, and would deliver the workers he chose. As we have said, the farmers would pay by cheques made out to ‘Dragojlovic’, ‘Jontaz’ or ‘cash’. The payments were made to Jontaz which, in turn, paid the workers. Applying the ‘control test’,[150] an employment relationship was reasonably to be inferred from Jontaz’s conduct.
[150]Brodribb (1986) 160 CLR 16, 36 (Wilson and Dawson JJ).
There is no merit in the applicants’ contention that the Red Book was too ambiguous and rudimentary to support any inference about the nature of Jontaz’s business. We have examined the Red Book for ourselves. Its handwritten detail provides an account of each worker, including the days they worked each week, their rate of pay, and the farmers to whom they were provided. The inference was inescapable that it evidenced Jontaz’s business practice, and that the first names listed in the Red Book were Jontaz employees.
There is nothing to be made of the fact that no workers were called as witnesses. Mr Walker, an Australian Federal Police officer, gave evidence that he had located and spoken with 143 of the 250 people he believed were named in the Red Book. Thirty five denied working with Jontaz, and 26 were unable to answer his questions because of language difficulties, or other reasons. Some 82 workers admitted that they had worked with Mr Dragojlovic. Only one worker agreed to make a statement, but she was not called to give evidence because she was aged and ailing. The lack of evidence from the workers was explained to the jury. It did not diminish the force of the Crown case. It was plainly open to the jury to determine the workers’ employment status by reference to other evidence.
Whether the evidence of Mr Lipson should have been preferred to that of Mr Jackson and Mr Davis was quintessentially a matter for the jury. No persuasive reason has been advanced as to why the jury could not have preferred the evidence given by the Crown’s experts. Their opinions were grounded in a comprehensive analysis of the facts and substantial relevant experience. The jury were entitled to prefer that evidence.
As to whether the evidence was sufficient to establish Mrs Dragojlovic’s dishonesty, the Crown case was that the applicants were in a joint criminal enterprise. Again, it is the combined force of the circumstantial evidence which must be considered. The evidence established that as an active director, Mrs Dragojlovic had responsibility for the management and control of Jontaz. She liaised with bookkeepers on the majority of the occasions that they were given information and instruction. Jontaz’s accountants would turn to her first if there were any issues that needed resolution. The Crown contended that the dominant role that she played in administering the finances of Jontaz established her knowledge of the moneys it was receiving. She signed and cashed cheques, and was actively involved in the preparation of financial statements. Her signature appeared on a variety of documents, including documents relating to the Jontaz bank account and receipts issued to farmers.
Both Mrs Dragojlovic and her husband were signatories to the Jontaz bank account, and both operated that account. Mrs Dragojlovic provided the accountants with information for income tax returns. She signed the returns of Jontaz for 1999 and 2000, certifying as to their accuracy. She also completed and signed off as to the correctness of the financial statements of Jontaz for the relevant periods. Given her role in relation to the entirety of the company’s finances, and the location of the Red Book, which contained weekly records for a period of four years and was kept under the coffee table in the lounge room, it was well open to the jury to infer that she was aware of both the nature and content of the Red Book. In particular, it may safely be inferred that she was aware that Jontaz employed the workers named within the Red Book, and that Jontaz received payments from the farmers from which the workers were paid.
It follows that there was ample evidence to support the jury’s verdicts that both applicants were guilty on all charges. None of the matters raised on their behalf suggests that there was anything unreasonable or unsafe about the jury’s verdict.
Ground 4 fails.
As mentioned earlier, in relation to Mr Dragojlovic’s case, we ordered on 20 September 2012 that leave to appeal against his convictions be granted, but that the appeal be dismissed. We would now make similar orders in relation to Mrs Dragojlovic. Leave to appeal against her convictions should be granted on grounds 1 and 3. Leave should be refused on grounds 2 and 4. As no ground of appeal has been made out, her appeal must be dismissed.
Mr Dragojlovic’s appeal against sentence
As noted earlier, Mr Dragojlovic sought leave to appeal against his sentence of five years and four months’ imprisonment with a non-parole period of three years. By the time his application for leave to appeal had been heard, he had served approximately two years of his sentence. He relied upon a single ground, namely that the sentence was manifestly excessive. In support of that ground, he submitted that the sentence did not adequately reflect the significant delay of eight years from the time the warrants were executed until the conclusion of the case.
The delay in this case was certainly substantial. Little of that delay can be attributed to Mr Dragojlovic. The search warrants were executed in May 2001, but the applicants were not charged until June 2005. The committal hearings took place in August 2006. The applicants were arraigned, in the presence of the jury, on 22 July 2009. They were not finally sentenced until 6 August 2010.
Mr Dragojlovic submitted that he had excellent prospects of rehabilitation. He relied upon the evidence given at trial to the effect that he had a solid work ethic, generously supported his family and his ageing parents, was in a stable relationship and cared deeply for his children.
Before this Court, the Crown very properly acknowledged that the delay in this case had been exceptional. The Crown also accepted that the sentence imposed on Mr Dragojlovic had been at the ‘high end’ of the range for tax fraud. However, it contended that the trial judge had given adequate consideration to delay as a mitigating factor, and that no specific error had been demonstrated in that regard.
Delay is well recognised as a mitigating factor in sentencing, depending upon the length and reasons for the delay and its consequences for the offender. It will generally be a mitigating circumstance where the responsibility for it does not lie with the offender.[151]
[151]See R v Miceli[1998] 4 VR 588; R v Schwabegger[1998] 4 VR 649; R v Cockerell (2001) 126 A crim R 444; R v Nikodjevic[2004] VSCA 222.
Although Mr Dragojlovic contested the indictment there was, in other respects, evidence of prospective rehabilitation. The fact that he had, during a lengthy period on bail, remained within the community without further breaking the law, was an important mitigating factor.
Undue delay may also lead to unfairness which requires some degree of compensation in the sentencing process.[152] In R v Idolo,[153] Tadgell JA recognised that significant delay may result in additional punishment as there is natural anxiety occasioned to a person suspected of, or charged with, the commission of an offence, until the matter is finally disposed of. If this period is unduly long it may, and ordinarily will be, appropriate to reflect that fact by way of mitigation of the sentence to be imposed. Where an offender has had the impending criminal proceedings hanging over his head for an unreasonable time, and was aware throughout of the considerable risk of imprisonment, the undue delay has the effect of additional punishment.[154] These principles apply with equal force to tax fraud offences as to any other crime.[155]
[152]R v Cockerell(2001) 126 A Crim R 444, 447 [10] (Chernov JA); R vMiceli[1998] 4 VR 588, 591 (Tadgell JA).
[153](Unreported, Victorian Court of Appeal, Phillips CJ, Tadgell and Ormiston JJA, 21 April 1998) 12–13.
[154]R v Katsoulas [2008] VSCA 278 [10]–[14] (Redlich JA).
[155] R v Cox [2011] QSC 187, [32] (Fryberg J); R v Cox [2013] QCA 10, [101] (Holmes JA).
We consider that it was necessary also to take account of the additional delay resulting from the length of the trial. Although an offender is not to be punished for having pleaded not guilty, the length of a trial will not ordinarily be a matter that can be called in aid as a mitigating factor. Where a trial occupies an extraordinary period, such as this trial did, different considerations may arise.
No doubt, Mr Dragojlovic contributed in some measure to the length of the trial. However, it is fair to say that his liberty was curtailed for a very protracted period. He was required to attend court each sitting day for well over twelve months, during what would have been a particularly anxious period. That was part of the delay that should have been taken into account. He was not to be denied that mitigation merely because he had elected to proceed to trial and to put the Crown to its proof.
The Crown submitted that it was clear from her Honour’s sentencing remarks that she had taken delay into account as a mitigating factor. It is certainly true that she referred to delay in that context, but also true that the subject was barely mentioned in the reasons for sentence which extended over four days, and ran to about 180 pages of transcript. Given the fact that nine years had elapsed from the execution of the search warrant in 2001 until the conviction in 2010, one might reasonably have expected that the weight to be accorded to delay would have featured prominently in her Honour’s reasons for sentence.
Taking into account the difficulties in detection of such offences and the prevalence of tax fraud, the gravity of the offending by Mr Dragojlovic, the amount lost to the revenue, the period during which the offending occurred, and giving appropriate weight to the extraordinary delay in this case, we concluded that the sentence imposed was manifestly excessive.
In reaching that conclusion, we had regard to the observations of this Court in Director of Public Prosecutions v Gregory,[156] namely, that despite judicial recognition of the seriousness and the flow on effects of tax evasion on the community, tax fraud is often not punished as severely as other forms of criminality.[157] The Court stated:
[156](2011) 250 FLR 169.
[157]Ibid 183 [54] (Warren CJ, Redlich JA and Ross AJA).
In Director of Public Prosecutions (Cth) v Goldberg Vincent JA (with whom Winneke P and Batt JA agreed) referred with apparent approval to the following observation by the sentencing judge in that case:
Tax evasion is not a game, or a victimless crime. It is a form of corruption and is, therefore, insidious. In the face of brazen tax evasion, honest citizens begin to doubt their own values and are tempted to do what they see others do with apparent impunity. At the very least, they are left with a legitimate sense of grievance, which is itself divisive. Tax evasion is not simply a matter of failing to pay one’s debt to the government. It is theft and tax evaders are thieves …
Further, as the High Court recently observed in Hili, detecting offending of this kind is not easy and serious tax fraud is offending which affects the whole community. As Ormiston JA recognised in R v Liddell, while the Australian Taxation Office is the ostensible victim, serious tax fraud will inevitably have a flow on effect to the incidence of tax to the honest taxpayer.
In seeking to ensure that proportionate sentences are imposed the courts have consistently emphasised that general deterrence is a particularly significant sentencing consideration in white collar crime and that good character cannot be given undue significance as a mitigating factor, and plays a lesser part in the sentencing process. In the case of taxation offences general deterrence is also given special emphasis in order to protect the revenue as such crimes are not particularly easy to detect and if undetected may produce great rewards. ‘Deterrence looms large’ as the present process of self assessment reposes on the taxpayer a heavy duty of honesty. Moreover, general deterrence is likely to have a more profound effect in the case of white collar criminals. White collar criminals are likely to be rational, profit seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished. Further, white collar criminals are also more likely to be first time offenders who fear the prospect of incarceration.
In many if not most cases, imprisonment will be the only sentencing option for serious tax fraud in the absence of powerful mitigating circumstances. A sophisticated degree of planning accompanied by a lack of contrition should ordinarily lead to a more severe sentence of imprisonment. But despite the recognised importance of general deterrence, tax fraud has not always been as severely enforced as other forms of criminality. Over a decade ago this court, constituted by Winneke P, Brooking and Callaway JJA observed in R v Nguyen and Phan that the seriousness of the offence of defrauding the Commonwealth of income tax ‘has not always been sufficiently reflected in the sentence passed.’
This is reflected in the number of cases where very small periods of imprisonment have been imposed. Whilst not directly arising in this case, there is a tendency to place a disproportionate emphasis on a dollar value concept of the loss. The results are sometimes a lack of deterrence and proportionality. Professor Freiberg has noted that the personal circumstances of the white collar criminal appear to weigh heavily in the judge’s mind at the expense of justice in the abstract, or the effect on or interest of the victim(s), and that this persistent sentencing phenomenon is spread across jurisdictions. Charles JA in DPP (Vic) v Bulfin (Bulfin) adverted to this serious risk in sentencing white collar criminals stating that:
‘the consequences of discovery and punishment and the havoc that a custodial sentence usually wreaks on the lives of the white collar criminal and his or her family, may have a tendency to distract attention from the importance that general deterrence ought to carry in the imposition of sentences.’
Where this occurs, it is often reflected in an inappropriately large gap between the head sentence and the period that the offender is required to serve in custody before release on recognizance or on parole.
A sentence imposed for fraud upon the taxation revenue, is intended to reaffirm basic community values that all citizens according to their means should fairly share the burden of the incidence of taxation so as to enable government to provide for the community, that the revenue must accordingly be protected and that the offender should be censured through manifest denunciation. When these considerations are not reflected in the responses of the courts, the criminal justice system itself fails to achieve its objectives. [158]
[158]Ibid 182–184 [51]–[57] (citations omitted).
We acknowledge the serious nature of tax fraud generally, and also the amount of tax that was evaded in this case. The sum of more than $909,000.00, is, of course, very substantial. However, having regard to the delay of nine years or so between the execution of the search warrants in 2001 and the imposition of sentence in 2010, we determined that the sentence should be reduced. For these reasons we set aside the original sentence of five years and four months with a non-parole period of three years, and substituted a sentence of four years’ imprisonment with a non-parole period of 27 months.
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