McNamara v The Queen

Case [2021] SASCFC 2

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Criminal Appeal)

MCNAMARA v THE QUEEN

[2021] SASCFC 2

Judgment of The Court of Criminal Appeal  

(The Honourable Justice Nicholson, the Honourable Justice Livesey and the Honourable Justice Bleby)

28 January 2021

CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - THEFT

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - ERROR OF LAW - PARTICULAR CASES INVOLVING ERROR OF LAW - FAILURE TO GIVE REASONS FOR DECISION - ADEQUACY OF REASONS

CRIMINAL LAW - APPEAL AND NEW TRIAL - PARTICULAR GROUNDS OF APPEAL - MISDIRECTION AND NON-DIRECTION - REVIEW OF EVIDENCE

CRIMINAL LAW - APPEAL AND NEW TRIAL - PARTICULAR GROUNDS OF APPEAL - MISDIRECTION AND NON-DIRECTION - PRESENTATION OF CROWN CASE

Appeal against conviction.

The appellant was convicted on a trial by judge alone in the District Court of South Australia of 10 counts of theft, seven counts of aggravated theft and 16 counts of using fabricated evidence in judicial proceedings.

The appellant was a solicitor and director of a legal practice. The prosecution case was that over the course of 18 months, on 17 separate occasions, the appellant purported to invest funds from two deceased estates held in his practice’s statutory trust account in a trust known as the Andamooka Opal Stone Unit Trust (AOSUT), but instead used those funds for his own purposes. After a complaint by the beneficiaries of one of the estates, the Law Society determined to appoint a supervisor to the statutory trust account. The appellant resisted this appointment, and in proceedings brought in the Supreme Court he filed false documents in an attempt to show that the purported investments in AOSUT were genuine.

The defence case was, essentially, that the estate funds were invested in the AOSUT in a manner that did not require the transfer of funds. Rather, investments in AOSUT were recorded by way of ledger entries, and the documents filed in the Supreme Court were genuine documents recording those investments.

The trial judge found that he was satisfied beyond reasonable doubt that no funds from either of the deceased estates were ever invested with the AOSUT, and found the appellant guilty of all of the charged offences.

The appellant appeals the conviction on numerous grounds.

Held, per Nicholson, Livesey and Bleby JJ, granting permission to appeal on grounds 1, 4, 5 and 6, refusing permission to appeal on ground 7, and dismissing the appeal:

1. The prosecution case did not change between opening and address;

2. Whether reasons are adequate in a given case is a highly contextual question. The prosecution case hinged on the key issue whether the purported investments were legitimate. The trial judge’s reasons dealt sufficiently with the matters actually in contest between the parties;

3. The trial judge did not reduce his consideration to a contest of 'word against word' or otherwise err in the application of the burden and standard of proof;

4. While the trial judge’s express…

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McNamara v The Queen [2021] SASCFC 2
Case
[2021] SASCFC 2
Decision Date

CaseChat Overview and Summary

The Supreme Court of South Australia, constituted by Nicholson, Livesey and Bleby JJ, heard an appeal against a conviction by the appellant, a solicitor, who had been found guilty by a judge alone in the District Court of South Australia on multiple counts of theft, aggravated theft, and using fabricated evidence in judicial proceedings. The prosecution's case alleged that the appellant misappropriated funds from deceased estates held in his practice's trust account for his own purposes, and subsequently filed false documents in Supreme Court proceedings to conceal these actions. The defence contended that the investments were legitimate and recorded by ledger entries, not requiring fund transfers.

The central legal issues before the appellate court included whether the trial judge's reasons for conviction were adequate, particularly concerning the adequacy of reasons in a judge-alone trial and whether the prosecution's case had impermissibly shifted. The court also considered whether the trial judge had erred in his application of the burden and standard of proof, and whether the use of evidence of other fabricated documents as circumstantial evidence of a sham investment scheme was sufficiently clear.

The Full Court held that the trial judge's reasons adequately addressed the contested issues, finding that the prosecution's case remained consistent. It was determined that the adequacy of reasons is context-dependent and that the trial judge's findings sufficiently dealt with the core dispute regarding the legitimacy of the purported investments. The court found no error in the application of the burden and standard of proof, nor in the trial judge's assessment that the appellant was not an honest witness. While acknowledging that the trial judge's express engagement with his obligations under s 34R was not perfectly articulated, the court found that the use of other fabricated documents as circumstantial evidence to demonstrate the sham nature of the investments was sufficiently clear in the circumstances.

The appeal against conviction was dismissed. Permission to appeal was granted on specific grounds but ultimately refused in relation to the substantive appeal.

Orders

Orders of the court

Appeal against conviction.

The appellant was convicted on a trial by judge alone in the District Court of South Australia of 10 counts of theft, seven counts of aggravated theft and 16 counts of using fabricated evidence in judicial proceedings.

The appellant was a solicitor and director of a legal practice. The prosecution case was that over the course of 18 months, on 17 separate occasions, the appellant purported to invest funds from two deceased estates held in his practice’s statutory trust account in a trust known as the Andamooka Opal Stone Unit Trust (AOSUT), but instead used those funds for his own purposes. After a complaint by the beneficiaries of one of the estates, the Law Society determined to appoint a supervisor to the statutory trust account. The appellant resisted this appointment, and in proceedings brought in the Supreme Court he filed false documents in an attempt to show that the purported investments in AOSUT were genuine.

The defence case was, essentially, that the estate funds were invested in the AOSUT in a manner that did not require the transfer of funds. Rather, investments in AOSUT were recorded by way of ledger entries, and the documents filed in the Supreme Court were genuine documents recording those investments.

The trial judge found that he was satisfied beyond reasonable doubt that no funds from either of the deceased estates were ever invested with the AOSUT, and found the appellant guilty of all of the charged offences.

The appellant appeals the conviction on numerous grounds.

Held, per Nicholson, Livesey and Bleby JJ, granting permission to appeal on grounds 1, 4, 5 and 6, refusing permission to appeal on ground 7, and dismissing the appeal:

1. The prosecution case did not change between opening and address;

2. Whether reasons are adequate in a given case is a highly contextual question. The prosecution case hinged on the key issue whether the purported investments were legitimate. The trial judge’s reasons dealt sufficiently with the matters actually in contest between the parties;

3. The trial judge did not reduce his consideration to a contest of 'word against word' or otherwise err in the application of the burden and standard of proof;

4. While the trial judge’s express engagement with his obligation under s 34R was not well put, the use to which he put evidence of other fabricated documents, that is, as circumstantial evidence that the investments were a sham, is sufficiently clear in all of the circumstances.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Before coming to the trial judge’s conclusion with respect to these counts, it is necessary to turn to Mr McNamara’s relationship with the AOSUT and its personnel, and the balance of the counts on the information. The AOSUT and Counts 18 and 20-34 – Using fabricated evidenceThe AOSUT Mr McNamara had previously acted for Mr Sotirios Portellos and his wife, Ms Dorothea Tomazos (sometimes spelt ‘Tomazou’), who at the relevant times for present purposes, lived in Greece. Mr McNamara had also acted for a company, Opal World Andamooka Australia Pty Ltd (OWAA). Mr Portellos had been a director of OWAA, as had one John Pitman, the father of Philip Pitman, the co‑accused at the trial. The AOSUT was established in January 2011. Mr Portellos was a trustee until about December 2011, when Mr Philip Pitman was appointed as a trustee. Ms Tomazos was a trustee and secretary from 1 January 2011.The Law Society Complaint and the injunctive proceedings When the beneficiaries of the Matthews estate remained unpaid, the funds from that estate having been paid out to satisfy the entitlements of the beneficiaries of the Heanes estate, the Matthews estate beneficiaries complained to the Law Society of South Australia. The Law Society determined to appoint a supervisor to the statutory trust account of the legal practice. Mr McNamara commenced proceedings in the Supreme Court seeking an injunction preventing the appointment. Both he and Mr Pitman filed affidavits in support of the application on 22 December 2014. Each of those affidavits exhibited a letter signed by Mr Pitman to Mr Natale Rugari, an accountant registered with the Law Society to audit solicitors’ statutory trust accounts (and who had audited the statutory trust account of Commercial and General Law for many years). The letter (the Rugari letter) asserted that the funds in the two estates had been invested. Mr McNamara filed a further affidavit on 23 January 2015. This affidavit exhibited 16 documents entitled ‘Certificates of Investment’. The Rugari letter is the subject of Counts 18 and 19 on the Information (Count 19 relating to Mr Pitman), and the 16 ‘Certificates of Investment’ are the subject of Counts 20 to 34. Each Certificate of Investment was headed:Legal Costs TrustOWAA Avestra Credit Fund Certificate of InvestmentEach Certificate of Investment further recorded the amount of the purported investment, the ‘date received’, the term of the investment and the ‘Class of Units’. The prosecution case was that ‘Avestra’ referred to investment businesses that did in fact exist at the time of the purported investments, but that neither OWAA nor the AOSUT were ever customers of those businesses. In examination‑in-chief, Mr McNamara was asked about the appearance of the word ‘Avestra’ in each Certificate of Investment. He said that estate funds were invested with the AOSUT using the terms and conditions of the Avestra Credit Fund, ‘because they had previously applied to invest with them and it was easier to copy that investment’.[4] [4] T 507.21-26.

Decision

Reasons for decision

The trial judge concluded, on the basis of all of the evidence, that Mr McNamara was not an honest witness.The conclusions on the charges The trial judge concluded that no funds were ever invested with the AOSUT:[30]Because the 17 charged transfers occurred on separate occasions and in differing amounts always at times when no other funds were available to Mr McNamara in his accounts; because no funds were paid by the Legal Costs Trust to Andamooka Opal Stone Unit Trust; because the purported interest payments came not from AOSUT but from Mr McNamara’s own accounts; and because the letter marked SPM46 annexed to Mr McNamara’s fourth affidavit was first created shortly before the affidavit was filed, I am satisfied beyond reasonable doubt that no funds from either of the deceased estates were ever invested with the AOSUT.He then turned to the elements that comprised each of the first 17 counts, being the offences of theft and aggravated theft. [30] R v McNamara & Pitman [2019] SADC 128 at [110]. As to the element that Mr McNamara had dealt with the money in the estates, as particularised, he concluded that there was no doubt about that, Mr McNamara having effected each of the 17 transfers.[31] As observed above, these were the transfers to the LCT.[31] R v McNamara & Pitman [2019] SADC 128 at [112]. Next, he accepted that Mr McNamara had transferred the sums the subject of each count without Ms Roach’s consent. He confirmed his acceptance of Ms Roach’s evidence that she did not consent to any of the transfers.[32][32] R v McNamara & Pitman [2019] SADC 128 at [113]. Thirdly, he addressed the element that, at the time he effected the transfers, Mr McNamara was acting dishonestly according to the standards of ordinary people and that he knew at the time, on each occasion, that he was acting dishonestly. He found that it was ‘plain from the almost immediate use of estate moneys for his own purposes that Mr McNamara was acting dishonestly’.[33][33] R v McNamara & Pitman [2019] SADC 128 at [114]. Finally, he addressed the element that at the time of each transfer, Mr McNamara intended to deprive the relevant estate permanently of the money or intended to make a serious encroachment on the owner’s rights. He held:[34]I note here that the owner, for the purposes of this case, was Ms Roach. He would have intended to have made a serious encroachment on the rights of the owner if he intended to treat the property as his own regardless of the owner’s rights; or he intended to deal with the money in a way that created substantial risk – a risk of which he was aware - that the owner of the money would not get it back. I am satisfied that, at the time of each of the 17 transfers, Mr McNamara intended to make a serious encroachment upon the rights of the executor: he intended to use the money to benefit himself. In making that finding, I have not overlooked the fact that Mr McNamara may have intended, at some time in the future, to repay the transferred moneys. It seems to me clear, from the Skype messages, that Mr McNamara had some expectation that AOSUT would send him money to satisfy the Law Society’s queries. I do not know the basis of those expectations.[34] R v McNamara & Pitman [2019] SADC 128 at [115].

Ratio Decidendi

Legal Principle Established

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