Kalmar v Ballantyne - [2006] SASC 160

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
KALMAR v BALLANTYNE
[2006] SASC 160
Judgment of The Honourable Chief Justice Doyle
1 June 2006
CRIMINAL LAW - APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION - APPEAL AND NEW TRIAL - INTERFERENCE WITH DISCRETION OR FINDING OF JUDGE - GENERAL PRINCIPLES
Appellant was convicted in the Magistrates Court of failing to fully and truly disclose to the Trustee of his bankrupt estate all of his property - the charge concerned a sum of money won by the appellant at a Casino in Darwin - whether Magistrate erred by drawing an adverse inference from the silence of the appellant as to certain facts - error made out - appeal allowed - matter remitted to the Magistrates Court for re-trial.
Bankruptcy Act 1966 (Cth) s 265(1)(a), referred to.
Dyers v The Queen (2002) 210 CLR 285; RPS v The Queen (2000) 199 CLR 620; Weissensteiner v The Queen (1993) 178 CLR 217; Azzopardi v The Queen (2001) 205 CLR 50, discussed.

KALMAR v BALLANTYNE
[2006] SASC 160
Magistrates Appeal: Criminal

DOYLE CJ: Mr Kalmar was found guilty by a Magistrate of a charge that, being an undischarged bankrupt, he failed to fully and truly disclose to the trustee of his bankrupt estate all of his property, contrary to s 265(1)(a) of the Bankruptcy Act 1966 (Cth).
The prosecution case was that Mr Kalmar won $12,000 with a winning Keno ticket at a casino in Darwin on 14 April 2003, and that he failed to disclose to the trustee the receipt of the money. The fact of the winning ticket, that the money was paid to Mr Kalmar, and that he did not disclose the receipt to the trustee were not in issue.
Mr Katsaras, counsel for Mr Kalmar on appeal, submits that the Magistrate’s finding of guilt is wrongly made, because the Magistrate impermissibly relied on the failure by Mr Kalmar to present certain evidence supporting his defence. Mr Katsaras submits that the Magistrate’s reasons ignore the fundamental requirement that the prosecution must prove its case beyond reasonable doubt, and undermine Mr Kalmar’s exercise of what is usually called the right to silence.
I agree that the Magistrate erred, although on a narrower basis than that argued by Mr Katsaras.
The trial
The evidence was completed within a morning.
The Prosecutor called one witness only, an employee of the casino. He proved by reference to documentary records that on the night in question Mr Kalmar collected winnings of $12,000 in cash on a Keno ticket purchased for $1,000.
There was no evidence proving directly who purchased the ticket. The ticket does not identify the purchaser. Other evidence indicated that Mr Kalmar had bet significant amounts on Keno on the occasion in question, and on some later occasions. The records suggested that the winning bet was made in Mr Kalmar’s name, but in that respect were not decisive.
Because the win exceeded $10,000, an employee of the casino completed a Significant Cash Transaction Report as required by Commonwealth law. This form helped establish that Mr Kalmar had collected the prize of $12,000. The Report includes a section, Part D headed “Details Of Person(s) On Whose Behalf The Transaction Was Made (if applicable)”. This was left blank. But the witness from the casino said that staff were not instructed to enquire about this matter, unless for some reason the staff member already had information that the transaction was made on behalf of another person. Accordingly, no inference can be drawn from the employee’s failure to complete it.
As I have already said, the facts proved by the Prosecution, as far as they went, were not in dispute. They established the elements of the offence, subject to the Magistrate drawing the inference that the money was received by Mr Kalmar on his own account.
Perhaps surprisingly no evidence was led about opportunities Mr Kalmar had to inform his trustee of the receipt, and more significantly, there appears to be no evidence of requests for information from Mr Kalmar that should have resulted in him reporting the receipt of the money, if he was legally obliged to do so.
Be that as it may, the Prosecution evidence was capable of supporting a finding of guilt.
The only Defence evidence came from Mrs Kalmar. She was Mr Kalmar’s fiancé at the time of the bet.
She said that on the night in question she went to the casino with Mr Kalmar and their children. They were staying at a hotel to which the casino was attached. The room was booked by Mrs Kalmar.
She worked for a company that sold motor cycles in Darwin. She was an employee. She named the directors of the company. One of them was Mr Kalmar’s step-daughter. Mrs Kalmar said that the company owed her some money, but at that time was generally “short of funds”. She said that usually “one of the directors or myself would put funds towards that, like, invest the funds into the company”, but none of them were in a position to do so at the time. The company was due to pay $10,000 for a motor bike that had been sold on consignment. She said that she suggested that she take some money from the company and gamble it at the casino. This was on the basis that if she won the profits would go to the company, and if she lost the money would be treated as a repayment of what the company owed her. This meant she was taking the risk, but the company stood to gain. She said that she took $1,000 and that was the money she was betting with that night.
At a certain stage in the night she still had at least $1,000. She said that she bought the Keno ticket for $1,000. She got Mr Kalmar to collect the winnings because a man who was drunk had been making a nuisance of himself at the counter where winnings were collected.
She said that Mr Kalmar gave her the $12,000, and she then paid the money to the company. She gave it to Samantha, Mr Kalmar’s step-daughter, who “was running the accounts department at the time and she, in turn, paid bills with it”. She did not know whether it had been paid into a bank account. She paid the $12,000 in cash.
Mrs Kalmar had no documents relating to the drawing of $1,000, or relating to the payment of the $12,000 to Samantha. She did say that the payment “would have been written into the books”. She did not ask for any paperwork. When she gave her evidence she said that she was no longer involved with the company.
She said that she knew the trial was coming up. Mr Kalmar had first been before the Court in December 2004, and the trial was in February 2006. She said she only knew on the morning that she would definitely be giving evidence. There was no suggestion that the directors of the company could not be located, but on the other hand it was not put to her that they could be located, nor was she asked anything about the directors’ practices in the keeping of accounts. She might have been able to say something about this because she said that at one stage she had been “head of the accounts department”.
The Prosecutor put to her that her evidence was made up, but she denied that.
The Magistrate’s reasons
The Magistrate was satisfied that Mr Kalmar had received the money as alleged. He addressed the only issue, which was whether Mr Kalmar was entitled to the money.
He found Mrs Kalmar’s evidence “fanciful and a matter of recent invention”. He gave two reasons for this. One was that the explanation had never been “asserted at any stage prior to your wife asserting it in court”. Other than that, and this seems to be the main factor, he referred to her failure to produce company records relating to the payments, or any witness from the company. He said:
Whilst there is no onus upon the defendant to produce any evidence at all, one would have thought that evidence seemingly so easily available would have either been provided or attempts could have been made to provide it and if it were not available, then I would have been told why it was not available. Indeed, if the parties who had possession of the documents refused to provide them, then an early indication of that to the prosecution may well have resulted in search warrants being issued to obtain them.
He then said:
I just quite frankly find your wife’s evidence fanciful and a matter of recent invention and the fact that no documents have been put forward to confirm it only in my view goes to confirm the inferences that can be drawn from the prosecution case that you obtained this money on your own behalf and kept it and failed to notify your trustee. I find that the charge is proved.
The issue on appeal
Mr Katsaras submits that the prosecutor was not entitled to rely on the failure of Mr Kalmar to call evidence to support his case. In particular, he submits that the prosecutor was not entitled to rely on Mr Kalmar’s failure to produce documents that might have been in the possession of the company, or to call witnesses from the company to verify or support Mrs Kalmar’s evidence. He submits further that there was no obligation on Mrs Kalmar, a mere witness, to do anything other than give her evidence. There was no obligation at all on her to obtain supporting documents or to arrange for the attendance of supporting witnesses. Neither Mr Kalmar’s failure to do this, nor her failure, could be used to support the prosecution case or to undermine the defence case.
Accordingly, he submits, at each crucial step in his reasons the Magistrate had erred.
I consider that the Magistrate was entitled to reject Mrs Kalmar’s evidence. It would have been helpful if he had made his reasons clearer. I assume that he did not rely on her demeanour, and that he rejected her story primarily because it was unlikely and was unsupported. His reference to the failure to advance the story at an earlier stage is questionable, because the Magistrate himself said that Mr Kalmar was never interviewed (I assume by the trustee), and there is no evidence about requests to Mr Kalmar to complete statements or reports.
Be that as it may, I consider that the Magistrate was entitled to treat Mrs Kalmar’s story as an unlikely one, simply because it was unlikely, and because it was unsupported. The fact that it was unsupported made it all the more unlikely. To reject her evidence is not to place an onus on the defendant to explain his conduct, or to undermine his right of silence. It is simply to identify Mrs Kalmar’s evidence, in the circumstances, as not being credible.
However, it is fair to say that the reasons that the Magistrate gave veer towards the error that I will identify in a moment in relation to the finding of guilt. But, for reasons I have given, I am prepared to accept that the Magistrate proceeded on the basis that I have outlined.
Had the Magistrate stopped there he would not have erred had he gone on to find Mr Kalmar guilty, having rejected the only defence offered. It was open to him to take that course.
But the Magistrate went further. In the last passage that I have quoted he treats Mr Kalmar’s failure to adduce supporting evidence as confirming the inference of guilt that could arise from the prosecution case.
In that respect the Magistrate erred. He drew an adverse inference from Mr Kalmar’s silence. He relied on his failure to adduce evidence, to support an inference of guilt. This is contrary to principle.
This is an issue that has been considered by the High Court several times in recent years.
In Dyers v The Queen [2002] HCA 45; (2002) 210 CLR 285 Gaudron and Hayne JJ said at [5]-[6]:
As a general rule a trial judge should not direct the jury in a criminal trial that the accused would be expected to give evidence personally or call others to give evidence. Exceptions to that general rule will be rare. They are referred to in Azzopardi. As a general rule, then, a trial judge should not direct the jury that they are entitled to infer that evidence which the accused could have given, or which others, called by the accused, could have given, would not assist the accused. If it is possible that the jury might think that evidence could have been, but was not, given or called by the accused, they should be instructed not to speculate about what might have been said in that evidence.
Further, as a general rule, a trial judge should not direct the jury in a criminal trial that the prosecution would be expected to have called persons to give evidence other than those it did call as witnesses. It follows that, as a general rule, the judge should not direct the jury that they are entitled to infer that the evidence of those who were not called would not have assisted the prosecution. A direction not to speculate about what the person might have said should be given. Again, exceptions to these general rules will be rare and will arise only in cases where it is shown that the prosecution's failure to call the person in question was in breach of the prosecution's duty to call all material witnesses. [Citation omitted]
Kirby J agreed at [52]. Callinan J at [120] cited a similar statement of principle made by Gaudron, Gummow, Kirby and Hayne JJ in the earlier case of RPS v The Queen [2000] HCA 3; (2000) 199 CLR 620. McHugh J dissented.
The Magistrate’s reasons indicate that he has treated Mr Kalmar’s failure to produce evidence or to explain its absence as supporting an inference of guilt, or at least the inference that had the evidence been adduced it would not have supported the defence case.
The reasoning underlying the statement of principle by Gaudron and Hayne JJ appears from a further passage in their reasons at [9]-[10]:
As was pointed out in RPS, it will seldom, if ever, be reasonable to conclude that an accused in a criminal trial would be expected to give evidence. Not only is the accused not bound to give evidence, it is for the prosecution to prove its case beyond reasonable doubt. The mode of reasoning which is spoken of in R v Burdett and Jones v Dunkel ordinarily, therefore, cannot be applied to a defendant in a criminal trial. That mode of reasoning depends upon a premise that the person concerned not only could shed light on the subject but also would ordinarily be expected to do so. The conclusion that an accused could shed light on the subject matter of the charge is a conclusion that would ordinarily be reached very easily. But given the accusatorial nature of a criminal trial, it cannot be said that, in such a proceeding, the accused would ordinarily be expected to give evidence. So to hold would be to deny that it is for the prosecution to prove its case beyond reasonable doubt.
The reasoning which underpinned the decisions in RPS and in Azzopardi cannot be confined to the accused giving evidence personally. It applies with equal force to the accused calling other persons to give evidence. It cannot be said that it would be expected that the accused would call others to give evidence. To form that expectation denies that it is for the prosecution to prove its case beyond reasonable doubt. [Citations omitted]
The statements of principle are consistent with what was said by Gaudron ACJ, Gummow, Kirby and Hayne JJ in RPS at [27]-[28]:
By contrast, however, it will seldom, if ever, be reasonable to conclude that an accused in a criminal trial would be expected to give evidence. The most that can be said in criminal matters is that there are some cases in which evidence (or an explanation) contradicting an apparently damning inference to be drawn from proven facts could come only from the accused. In the absence of such evidence or explanation, the jury may more readily draw the conclusion which the prosecution seeks. As was said in Weissensteiner v The Queen:
“[I]n a criminal trial, hypotheses consistent with innocence may cease to be rational or reasonable in the absence of evidence to support them when that evidence, if it exists at all, must be within the knowledge of the accused." (Emphasis added.)
In a criminal trial, not only is an accused person not bound to give evidence, it is for the prosecution to prove its case beyond reasonable doubt. The observations by the Court in Jones v Dunkel must not be applied in criminal cases without taking account of those considerations. [Citations omitted]
In the last cited passage there is a reference to a qualification on the general principle, drawn from the decision in Weissensteiner v The Queen (1993) 178 CLR 217. That qualification was examined more closely in Azzopardi v The Queen [2001] HCA 25; (2001) 205 CLR 50 at [64] by Gaudron, Gummow, Kirby and Hayne JJ. They said:
There may be cases involving circumstances such that the reasoning in Weissensteiner will justify some comment. However, that will be so only if there is a basis for concluding that, if there are additional facts which would explain or contradict the inference which the prosecution seeks to have the jury draw, and they are facts which (if they exist) would be peculiarly within the knowledge of the accused, that a comment on the accused's failure to provide evidence of those facts may be made. The facts which it is suggested could have been, but were not, revealed by evidence from the accused must be additional to those already given in evidence by the witnesses who were called. The fact that the accused could have contradicted evidence already given will not suffice. Mere contradiction would not be evidence of any additional fact. In an accusatorial trial, an accused is not required to explain or contradict matters which are already the subject of evidence at trial. These matters must be assessed by the jury against the requisite standard of proof, without regard to the fact that the accused did not give evidence.
That qualification does not apply here. The existence of company records relating to the payment to Mrs Kalmar, and the payment by her, was not a matter peculiarly within the knowledge of Mr Kalmar. Indeed, on the evidence, he would not have known whether such records existed or not. He had worked for the company, but on the evidence had not been a director. There was no suggestion that he had access to the records, although he could have contacted the people who would have had the records, if they existed. The source of the money used to place the bet (that is, whether the money was his money or was provided by Mrs Kalmar) was a matter known to him, but was not a matter peculiarly within his knowledge.
In the circumstances, I consider that it was not open to the Magistrate to draw the inference that he did. And it is clear from the Magistrate’s reasons that he relied upon Mr Kalmar’s failure to support his wife’s evidence with documentary evidence to found an inference adverse to Mr Kalmar.
Conclusion
The principle identified in the High Court judgments above is fundamental. Its application requires some care. Having rejected Mrs Kalmar’s evidence, it was open to the Magistrate to convict. But he reached his conclusion in a manner that reflects an error of principle. The conviction must be set aside.
I allow the appeal and set aside the conviction. I order that the matter be remitted for re-trial before another Magistrate.