Police v DWB
[2011] QMC 4
•3 May 2011
MAGISTRATES COURT OF QUEENSLAND
CITATION:Police v DWB [2011] QMC 4
PARTIES: Police
(Respondent/Prosecution)
v
DWB
(Applicant/Defendant)
FILE NO: MAG214339/10(2)
DIVISION: Magistrates Court
PROCEEDING: Application
ORIGINATING COURT: Magistrates Court at Brisbane
DELIVERED ON: 3 May 2011
DELIVERED AT: Brisbane
MAGISTRATE: Judge Butler SC, Chief Magistrate
ORDER: Application to cross-examine granted
CATCHWORDS: CRIMINAL LAW – PRACTICE AND PROCEDURE – COMMITTAL PROCEEDINGS – APPLICATION TO CROSS-EXAMINE WITNESSES – substantial reasons - why in the interests of justice – proper understanding of nature of prosecution case
Justices Act 1886 (Qld), s 83A(5AA), s 110B
ADVOCATES: G Cranny (Sol) for the applicant
S Maleckas (Sol) for the respondent
SOLICITORS: Gilshenan & Luton Legal Practice for the applicant
Director of Public Prosecutions (Queensland) for the respondent
An application has been brought under s83A(5AA) of the Justices Act 1886 (the Act) for a direction that prosecution witnesses be required to attend to be cross-examined upon committal proceedings.
The application is brought by DWB (the Applicant) who is, under s408C of the Criminal Code, charged as a director of P Pty Ltd (the Company) with dishonestly obtaining bank credits from National Australia Bank Limited of a value of $1,101,317.09. The offence is alleged to have been committed on diverse dates between 24 November 2004 and 17 July 2005.
The applicant seeks to have 6 of the proposed prosecution witnesses cross-examined and has identified in respect of each of those witnesses the general issue upon which it is sought to have them cross-examined.
Legal basis for application to cross-examine
The Act provides that a magistrate has overall supervisory responsibility for a committal proceeding coming before the Magistrates Court.[1]
[1] s130B Justice Act 1886
Committal proceedings may be conducted by the examination, in the presence and hearing of the defendant, of all evidence to be offered on the part of the prosecution.[2] However, the Act makes provision for use of tendered statements in lieu of oral testimony and where a written statement of a witness is tendered by the prosecution, the magistrate:
“(a) must, subject to the provisions of this section being satisfied, admit the statement as evidence; and
(b) must not require the witness to appear before them to give evidence or make a statement unless the witness is required to be called by the prosecution because a direction has been issued under section 83A(5AA).” [3]
[2] s104
[3] s110A(3)
In the case of a legally represented defendant the Act provides:
“(5) Subsection (3)(b) does not stop the prosecution and the defence
agreeing that the witness will be present to be cross-examined.(6) If a witness is cross-examined because of an agreement under subsection (5) or because of a direction given under section 3A(5AA), the justice must consider both the witness’s written statement and the oral evidence given by the witness.”[4]
[4] s110A(5) and (6)
It follows that the Court may not require a witness to appear and be examined unless either a direction has been given under section 83A(5AA) or the prosecution and defence both agree to that course
Section 83A permits a party to a proceeding for an offence to apply to the Court for a direction hearing. Subsection (5AA) empowers the magistrate to give a direction requiring the prosecution to call the maker of a written statement to be tendered under s110B(3) to attend to give oral evidence and be cross-examined on the written statement. Subsection (5AA) applies subject to s110B.
Section 110B(1) provides as follows:
“A magistrate at a direction hearing must not give a direction under section 83A(5AA) in relation to the maker of a written statement unless the magistrate is satisfied there are substantial reasons why, in the interests of justice, the maker should attend to give oral evidence or be made available for cross-examination on the written statement.”
The magistrate must not require a witness to appear unless a direction is given under s83A(5AA). Such a direction must not be given unless, on application by the defendant, the magistrate is satisfied to the necessary standard. In my view this legislative scheme places upon the applicant the burden of satisfying the magistrate. Support for this view is to be found in the New South Wales cases and has been adopted in this Court. [5]
[5] See Sim v Magistrate Corbett [2006] NSWSC 665 at [20]; followed in R v Blacklidge (unreported) QMC 11/3/2011 per Deputy Chief Magistrate Hine.
Procedural matters
The Act specifies procedural requirements which must be fulfilled before the application may be made under s83A(5AA).[6]
[6] s110B(3)
The process requires the defendant to advise the prosecution of the subject of the application, relevant issues and reasons for the order sought. The prosecution is given an opportunity to respond.[7] The defendant is required to file with the application his or her communication to the prosecution and the prosecution’s response.
[7] s110B(3)(b)
An apparent purpose of this process is to ensure that the parties have identified the issues in dispute, and have exhausted all opportunity for agreeing to proceed by consent in accordance with s110A(5). Furthermore, the filing of material enables the Court to be fully apprised of the basis of the application and the factual information to be referred to in submissions.
Section 110B(5) provides:
“The prosecution’s response may state whether the prosecution agrees to the calling of the maker of the statement, and any conditions attaching to the prosecution’s agreement.”[8]
[8] s110B(3)(c)
Although the term “may” is used, in my view this subsection when read in context places a mandatory obligation on the prosecution to state whether it agrees or disagrees with the calling of the witness.
Both the applicant and the respondent complied with these procedural requirements. By letter dated 23 March 2011 the applicant detailed in 16 pages the grounds for his application. The respondent replied by facsimile transmission dated 30 March 2011. That 4 page document addressed the request in respect of each of the 6 proposed witnesses and declined to consent to any cross-examination of those witnesses.
The requirement in the Act that the parties correspond before an application may be brought reveals an expectation on the part of the legislature that in the majority of cases parties will be able to reach agreement on the cross-examination required. The Act denies the Court any discretion to reject cross-examination agreed to by both the parties. In my view, this evidences a view that it is preferable for the parties, rather than the court, to resolve the extent of cross-examination in committal proceedings.
It is acknowledged that this application is among the earliest brought under the new legislation. It is therefore understandable that parties are still coming to terms with their roles and obligations under the Act. However, it is worth drawing attention to the observation of Judge Durward SC in R v B (No 2) that “the obligation of the prosecution in respect of the conduct of a committal proceeding is subject to requirements of fairness and justice to an accused”.[9] His Honour pointed out that the discretion whether or not to call a material witness at the committal proceeding should not be made simply by reference to tactical considerations.[10]
[9] [2010] QDC 417 at [10]
[10] Supra at [11]; citing R v Walden (1986) 23 A Crim R 242 at 246 - 247
In the absence of agreement between the parties it now falls to the Court to determine what cross-examination, if any, should be allowed.
Substantial reasons in the interests of justice
The law changed in 2010 upon the passage of the Civil and Criminal Jurisdiction Reform and Modernisation Amendment Act 2010.
Prior to that the defence had a general right to cross-examine all prosecution witnesses at committal.
The amendments now forbid a magistrate to require a witness to appear and to submit to cross-examination unless a direction is made under s83A(5AA). Such a direction must not be made unless the magistrate:
“is satisfied there are substantial reasons why, in the interests of justice, the maker [of a written statement] should attend.”[11]
[11] s110B(1) Justice Act 1886 and s14A(1) Acts Interpretation Act 1954
The meaning of the phrase “substantial reasons why, in the interests of justice” is to be determined by having regard to the purpose of the legislation.
In my view, the legislative scheme seeks generally to limit the receipt of evidence in committal hearings to written statements and real exhibits. Oral examination is not available on request, and may only be ordered where “substantial reasons” are demonstrated. Accordingly, the mere loss of an opportunity to cross-examine without more could not amount to a ‘substantial reason’.
Extrinsic material may be considered in aid of interpretation to remove ambiguity or confirm an interpretation.[12]
[12] s14B Acts Interpretation Act 1954
The Attorney-General in the second reading speech for the Bill, delivered on 13 April 2010, said:
“New South Wales legislation has been used as a model for the test included in this Bill for justifying the calling and cross-examination of a witness. This test was recommended by Mr Moynihan given it has been in place for twenty years, considered by the New South Wales Courts and is generally regarded as working satisfactorily…” [13]
[13] Hansard p1255
The explanatory notes to the Civil and Criminal Jurisdiction Reform and Modernisation Amendment Bill 2010 also refer to the New South Wales test and the cases on it in the following passage:
“Restricting the right to cross-examine witnesses in the manner proposed in the Bill does not compromise the purposes of a committal hearing. The Bill recognises that in some cases it is necessary to permit the calling and cross-examination of prosecution witnesses at the committal by allowing a witness to be called and cross-examined where a magistrate is satisfied on their own initiative or on application by the defendant that substantial reasons, in the interests of justice, exist.
The provisions restricting cross-examination in the Bill are based on section 91 of the Criminal Procedure Act 1988 (NSW). Mr Moynihan was of the view that the Criminal Procedure Act 1988 NSW (the Act) provides a suitable model. It has been in place for a number of years, has been tested by judicial considerations and is generally regarded as working satisfactory. It was also noted that the principles that apply to section 91 applications in New South Wales are clearly articulated and, as a consequence, there are now few applications to review the magistrate’s decision.
The relevant principles applying in New South Wales to the operation of section 91 of the Criminal Procedure Act 1988 (NSW) and the meaning of “substantial reasons, in the interests of justice”, were summarised in Sim v Magistrate Corbett & Anor by Whealy J as follows:
“1.The purpose of the legislation is to avoid delays in the criminal process by unnecessary or prolix cross-examination at committal.
2. The onus is on the defence to satisfy the Local Court that an order should be made directing the attendance of witnesses.
3. The process is an important part of the committal proceedings. The refusal of an application may have a significant impact upon the ability of the defendant to defend himself. As well, the prosecution has a real interest in ensuring only appropriate matters are sent for trial.
4. In relation to matters falling within s91 of the Criminal Procedure Act 1986, the defendant must show that there are reasons of substance for the defendant to be allowed to cross-examine a witness or witnesses.
5. The obligation to point to substantial reasons is not as onerous as the reference to “special reasons” in s93; nevertheless it raises a barrier, which must be surmounted before cross-examination will be permitted.
6. Each case will depend on its own facts and circumstances. It is not possible to define exhaustively or even at all what might, in a particular case, constitute substantial reasons. It may be a situation where cross-examination may result in the discharge of the defendant or lead to a successful no-bill application; it may be a situation where cross-examination is likely to undermine substantially the credit of a significant witness. It may simply be a situation where cross-examination is necessary to avoid the defendant being taken by surprise at trial. The categories are not closed and flexibility of approach is required in the light of the issues that may arise in a particular matter.
7. Substantial reasons might exist, for example, where the attendance of a witness is sought to enable cross-examination in respect of a matter which itself might give rise to a discretion or determination to reject evidence at trial.
8. The expression “substantial reasons” is not to be ascertained by reference to synonyms or abstract dictionary definitions. The reasons advanced must have substance in the context of the committal proceedings, having particular regard to the facts and circumstances of the particular matter and the issues, which critically arise or are likely to arise in the trial.”
It follows that in interpreting the term “substantial reasons” considerable assistance may be obtained by reference to the New South Wales authorities. The meaning of that term was considered by the New South Wales Court of Appeal in Director of Public Prosecutions v Losurdo and another[14] where the Court indicated its agreement with the following observations by Studdart J in Hanna v Kearney and another[15]:
“1. Section 48E(2)(b) plainly has as a primary aim the limitation of the time occupied in committal proceedings. Such proceedings are not to provide the opportunity for a full dress rehearsal for the trial. Cross-examination is to be eliminated unless it is required in the interests of justice for reasons that are reasons of substance.
2. There can be no rigid or exhaustive definition of what constitutes "substantial reasons" and it would be undesirable to attempt to give one. Relevant issues inevitably vary from case to case. However, any statement served has to be considered with reference to the issues it addresses and the charge to which it relates. The application to cross-examine requires identification and consideration of the objective of the cross-examiner, and the framework of the prosecution case. To require a witness for cross-examination without a definite aim but in the hope of eliciting some evidence that might prove useful to the defence would not constitute "substantial reasons". It is for the applicant to clearly define the purpose or purposes of the cross-examination which he seeks.
3. It would be wrong to limit "substantial reasons" to situations where cross-examination is likely to result in the discharge of the defendant or to establish grounds for a no bill application. Equally it would be wrong to limit "substantial reasons" to situations where cross-examination is likely to substantially undermine the credit of an important witness. "Substantial reasons" may well be found elsewhere.
4. On any application under s 48E the fundamental objective of committal proceedings must be borne in mind, namely the objective of facilitating a fair trial in the event that the person charged is committed and later stands trial. This may mean that there are substantial reasons for requiring a witness for cross-examination for a proper understanding of the nature of the prosecution case or for an understanding of the basis of a relevant opinion held by a witness. I do but give those instances, I certainly do not intend them to be exhaustive.
5. "Substantial reason" may be shown for cross-examination where this may lead to the narrowing of matters in dispute: see Goldsmith v Newman (supra) at 411. This is a consideration of particular importance where the prospect exists of a lengthy trial, as it does in the present cases. “
[14] [1998] 44 NSWLR 618 at 627
[15] 28 May 1998, NSWSC unreported
The objective of facilitating a fair trial is a fundamental consideration in determining whether cross-examination should be allowed. The High Court in Burton v The Queen[16] explained the importance of committal proceedings in the protection which the criminal process gives to an accused person.
[16] [1980] 147 CLR 75; see also Grassby v The Queen (1989) 168 CLR 1
The explanatory notes to the Civil and Criminal Jurisdiction Reform and Modernisation Amendment Bill 2010 explained that the restriction on cross-examination is not inconsistent with achieving the principal purposes of a committal proceeding:
“According to the High Court (Grassby v The Queen (1988) 168 CLR 1 and Barton v The Queen (1980) 147 CLR 75), the principal purposes of a committal hearing are to:
·ensure the defendant is not put on trial on indictment without sufficient cause;
·allow the defendant to learn the case against him or her; and
·marshal the evidence into deposition (written) form.
Restricting the right to cross-examine witnesses in the manner proposed in the Bill does not compromise the purposes of a committal hearing. The Bill recognises that in some cases it is necessary to permit the calling and cross-examination of prosecution witnesses at the committal by allowing a witness to be called and cross-examined where a magistrate is satisfied on their own initiative or on application by the defendant that substantial reasons, in the interests of justice, exist.”
In determining the extent of any cross-examination, this Court must have regard to the purposes of committal proceedings.
This Court must also be alert to not creating a situation which will necessitate the holding a preliminary examination of witnesses (a Basha inquiry) by the District Court. As observed by Rothman J in Abdel-Hady v Magistrate Freund:
“The avoidance of a Basha inquiry must, without more, be a substantial reason in the interests of justice.”[17]
[17] (2007) 177 A Crim R 517
The history and scope of Basha inquiries was considered by his Honour, Judge Durward in R v B (No.2)[18] where he quoted from the decision of Hunt CJ at CL in R v Sandford[19]:
“I maintain my belief in the obvious value of such a procedure – by whatever name it may be called – provided (and these are important provisos) that the accused has demonstrated – in advance – the particular issue which he intends to pursue, that the judge is satisfied that there is at least a serious risk of an unfair trial if the accused is not given the opportunity to do what otherwise would have been done at the committal proceedings, that the procedure is not used inappropriately in order to try out risky questions which may otherwise prove to be embarrassing in the presence of the jury, and provided also that such an examination is not permitted to interrupt the trial itself significantly: cf R v Courtney-Smith (No.2) (1990) 48 A Crim R 49 at 59 – 60.
The onus lies upon the accused in such cases to demonstrate that the disadvantage or prejudice which he would otherwise suffer during the course of the trial is in a relevant sense unacceptable, to the extent that the trial would be unfair: Barron v Attorney-General for New South Wales[20] (at 219, 233); R v Basha[21] (at 539).”
[18] [2010] QDC 417
[19] (1994) 33 NSWLR 172 at 180 - 181
[20] (1987) 10 NSWLR 215 at 233
[21] (1989) 39 A Crim R 337 at 339
Judge Durward referred to the then recently enacted Civil and Criminal Justice Reform & Modernisation Amendment Act 2010 (“the CCJRMA Act”) and observed:
“If an accused is prima facie not entitled by the CCJRMA Act to cross-examine a witness in the committal proceeding, he cannot generally be entitled to do so in this Court in a ‘Basha’ hearing.”[22]
[22] R v B (No 2) [2010] QDC 417 at [67]
Ultimately, whether on an application for a Basha inquiry or on an application to cross-examine at committal, the relevant court must have regard to the need to facilitate a fair trial.
The Prosecution Case
I now turn to the facts alleged by the prosecution in this case.
The applicant was a director and proprietor of the company.
By agreement with the National Australia Bank (“NAB”) the company utilised a debtor finance facility by which it purchased invoices of work performed and directly paid a portion of the face value of the invoice to an operating account of the company. The terms of agreement specifically included that the purchase of the invoices was for work performed. It is alleged the applicant understood the terms of the use of the facility.
The prosecution case against the applicant alleges he fraudulently induced the NAB to pay money to the company under the Debtor Finance Facility in circumstances where the bank had no legal obligation to do so.
It is alleged that in 2004 and 2005 the applicant began instructing his data entry clerks to raise invoices for work yet to be performed and sell these to the NAB as invoices for work that had been performed. The principal data entry clerk who performed these functions was W 3. This is alleged to be the primary fraudulent means utilised by the applicant.
A second means is alleged, namely the fraudulent inflation of the invoice amount on 8 occasions by a total of $117,000. It is not apparent how this alleged inflation of income was achieved or how it is said the applicant was implicated in causing it to happen.
The total amount the prosecution allege can be clearly established as having been dishonestly obtained by the applicant is in the order of $1.1m.
In mid 2005 a firm, Ferrier Hodgson Queensland, was employed by NAB to audit the finances of P Pty Ltd.
Meetings occurred between NAB employees, Ferrier Hodgson Queensland investigators and the applicant in July 2005 and it is alleged the applicant made statements in the course of those meetings capable of amounting to admissions of guilt.
Applicant’s general submissions
It is submitted on behalf of the applicant that the prosecution statements are light on detail given the lengthy period over which the events are said to have unfolded.
The application, it is said, is targeted as it only relates to 6 of a total of 23 prosecution witnesses.
Mr Cranny identified the critical issues as:
(a.) the applicant’s understanding of the Debtor Financing Facility;
(b.) the applicant’s use or manipulation, if any, of that facility;
(c.) the use or manipulation of the facility by anyone else;
(d.) the office processes or physical actions said to have allowed fraud to be perpetrated.
The office manager of the company at the time, Mr R, had responsibility for management of the staff and was present at relevant meetings. Mr R is thought to have since left the country. It is submitted by Mr Cranny on behalf of the applicant that they should be afforded the opportunity to test any potential involvement Mr R might have had in advancing the alleged fraudulent scheme. As I understand the defence submission, it is suggested that if there was indeed a fraudulent scheme, and that is not conceded, then it is possible that Mr. R, not the applicant, was the perpetrator.
The applicant submits generally that the requested cross-examination will allow the defence to obtain a better understanding of the prosecution case, to properly prepare for trial and to avoid being taken by surprise at the trial.
Prosecution general submissions
The prosecution declined to consent to the request. It is submitted that the applicant is fully aware of the case against him and that the evidentiary threshold for bringing the matter to trial has been met. The prosecution assert the statements of the witnesses sufficiently detail the evidence to be called and it cannot be said that the defence would be taken by surprise at the trial. It is submitted that the reasons advanced by the applicant are not sufficient to justify the cross-examination of the witnesses.
General discussion
The prosecution alleges a substantial fraud perpetrated over a lengthy period of time involving a substantial sum of money. In order to implicate the applicant it proposes to rely on oral directions allegedly given by him to employees and oral admissions allegedly made by him to bank officials and auditors. Without proof of these statements the case would, it seems to me, be entirely circumstantial.
In my view, the statements of a number of these crucial witnesses lack precision as to what they heard the applicant say and fail to detail the basis for beliefs held about the applicant’s knowledge. In addition, a number of meetings with the applicant were held in mid 2005 by bank officials and auditors. The statements disclose inconsistency between witnesses as to who attended meetings and selectivity as to what is recalled of the conversations held. As already observed, alleged incriminatory statements by the applicant at those meetings are important to proof of the prosecution case.
It is correct, as her Honour Fullerton J said in Quami v DPP and Anor that “not all contradictions or inconsistencies between witnesses warrant interrogation at a Committal Proceeding”.[23] It is also true, as quoted above, that committal proceedings “are not to provide the opportunity for a full dress rehearsal for the trial”.[24] Nevertheless, I am persuaded that a proper basis has been laid for limited cross-examination of a number of witnesses in this matter.
[23] [2008] NSWSC 675
[24] Hanna v Kearney and another 28 May 1998, NSWSC unreported
In my view, cross-examination in this matter will assist both defence and prosecution to prepare for trial by clarifying the evidence that may be given about crucial aspects of the applicant’s alleged conduct. It will also inform the applicant as to the evidence prosecution witnesses are capable of giving about the role of the office manager, Mr R, which is pertinent to a potential line of defence. The witness statements have not canvassed each of these aspects sufficiently to allow the defence, and perhaps even the prosecution, to properly understand the evidence that might be adduced about them at trial.
It has been said that each case will depend on its own facts and circumstances. In my opinion, there are particular circumstances arising in this case which bring to the fore the need to facilitate a fair trial. Cross-examination is necessary to obtain a proper understanding of the nature of the prosecution case. That of itself is capable of constituting a substantial reason in the interests of justice.[25] Cross-examination may also avert the need to hold a Basha inquiry before trial.
[25] Supra
The potential witnesses
Mr Cranny for the applicant submitted that cross examination of 6 witnesses should be permitted.
Each will be considered in turn.
Witness 1
W 1 was the NAB employee responsible for managing conduct of the Debtor Finance Facility. He visited the company office and had direct contact with the applicant and company employees. The applicant seeks to cross-examine W 1 on:
· His dealings with the applicant and Mr R regarding the debtor finance facility of the company;
· His observations of Mr R’s management of the day to day business operations of the company during the witness’ onsite visits.
It was submitted that cross-examination is justified to allow the defence to explore the possibility of the fraudulent behaviour having been committed by another person (Mr R), to obtain a better understanding of the prosecution case, to allow the defence to properly prepare for trial and to avoid being taken by surprise at trial.
The prosecution submits generally that the applicant is fully aware of the case against him. In respect of W 1 it is said that his statement refers to 200 pages of documents comprising his reports and all correspondence between the parties that he retained. It is submitted his statement and attached documents comprise a comprehensive and detailed account of all that W 1 can say in this matter. On the other hand, Mr Cranny dismissed the documents as being of little assistance, comprising he submits a mere collection of bits and pieces of financial documentation and not including any notes of conversations. The submissions of both parties may have been more persuasive if I had been provided with the documents attached to W 1’s statement but they were not tendered.
Discussion: Witness 1
The witness’s discussion in the statement of his interaction with the applicant and Mr R lacks particularity. In all likelihood over the long period he attended at the company he would have had discussions with both men as to the operation of the debtor finance facility and would have gained an understanding of their knowledge of it.
I consider the applicant should be able to examine the witness as to his recollection of personal dealings with both men in respect to the facility so as to properly prepare for trial and to avoid being taken by surprise. A substantial reason in the interests of justice has been established.
The applicant also seeks to cross-examine as to the witness’s observations of Mr R’s management of the day to day business operations of the company. I am not persuaded, in so far as this would extend beyond the operation of the debtor finance facility, that it would advance legitimate preparation for trial. The applicant bears the onus of proof on the application. In respect of this request he has failed to persuade me there is a substantial reason why in the interests of justice cross-examination should be allowed beyond the ambit approved above.
Witness 2
W 2 was the NAB Business Banking Manager for the company accounts. She also attended a number of meetings in mid 2005 in relation to the performance of the company.
The applicant seeks to examine this witness on:
·Her interaction with the applicant in relation to the company’s original application and opening of the National Australia Bank debtor finance facility and the subsequent applications to increase this facility;
·Her observations and recollections of the meeting of 1 July 2005 between NAB staff members, members of Ferrier Hodgson, the applicant and Mr R at 100 Creek Street in Brisbane.
The basis provided for this request was:
·W 2 was the Bank officer with whom the applicant opened the relevant debtor finance facility. Discussions had between them at that time, and subsequently, go directly to the applicant’s state of mind concerning the use and terms of the facility. The witness says for example, without any explanation whatsoever, that she has no doubt that the applicant “fully understood the terms and conditions” of the facility;
·At the meeting of 1 July 2005, this witness gives evidence of an apparent apology by the applicant, without remembering the context of any such comment. The detail of this conversation should be explored to allow the defence to properly understand the prosecution case, and to prevent the defendant being taken by surprise at trial.
The prosecution argues that the information sought by cross-examination is already provided in the statement and sufficiently notifies the applicant of the case against him.
Discussion: Witness 2
The statement of W 2 was given without her having had the opportunity to view the files on the company. Accordingly her recounting of events over about two years is very sketchy. She was the NAB employee who negotiated increases of the facility limit with the applicant. It is unlikely that the limited information in her statement exhausts all she could say about her personal dealings with the applicant, particularly if she took the opportunity to refresh her memory from contemporaneous records.
W 2 says without further elaboration in paragraph 9 of her statement:
“I have no doubt that [the applicant] fully understood the terms and conditions of the National Debtor Facility.”
The defence are entitled to explore the basis for this significant claim in preparation for trial.
The witness attended two meetings with the applicant. At one of these meetings the applicant is alleged to have made an apology which may be incriminating. (Paragraph 19 of her statement). Other witnesses refer to meetings about this time. Their accounts of what they recall disclose different recollections. Alleged disclosures by the applicant during these meetings may be of high significance at the trial.
In my view the applicant is entitled to gain a proper understanding of the case advanced against him on these matters. There are substantial reasons in the interests of justice why cross-examination should be allowed on these issues.
Witness 3
This witness was employed as the bookkeeper for the company. She was the primary data input person for the MYOB records. The prosecution allege she worked under the direct supervision and on instruction of the applicant. She also trained W 4 in her role.
The applicant seeks to cross-examine this witness on:
·The level of direct supervision and training provided to her by the applicant and Mr R during her employment;
·Her knowledge of the applicant’s ability to use business programs such as MYOB;
·The day to day operational role of Mr R during her time at the company especially in light of the evidence of W 1 of Mr R’s involvement in the day to day running of the company which is said to contradict the suggestions made by W 3 regarding the company’s day to day operation and invoicing procedures; and
·Her subsequent training of W 4 in regards to invoicing and the material provided to NAB.
The reason advanced in support of the application was:
·This witness is centrally important to the issue of the applicant’s control of the business and his instructions to staff concerning the alleged fraudulent activity in question. Her statement is brief and vague, and cross-examination is required to allow the defence to properly understand the prosecution case, to prepare for trial and to ensure the defence are not taken by surprise at trial.
The prosecution submits that W 3’s statement sufficiently outlines her dealings in the matter and her role in preparing invoices. The applicant would be aware of the case against him.
Discussion: Witness 3
W 3 is a crucial witness. Her evidence implicates the applicant as the person who instructed her in the generation of invoices for unperformed work. However, her statement as to these instructions lacks particularity. Furthermore she says the applicant knew how to use MYOB without providing the basis for this statement.
The witness states that she also received instructions on the practice of forward invoicing from Mr R. The applicant is entitled to explore what the witness can say about the involvement of Mr R as the investigation appears not to have pursued this.
The applicant is entitled to explore details of what W 3 can say of her instruction in invoicing by the applicant. There is potential for the defence to be taken by surprise if her memory of this is not exhausted.
The role of Mr R in respect to the practice of forward invoicing is potentially relevant to the applicant’s defence and accordingly this witness’s knowledge of any involvement by him in that regard should be examined.
There are substantial reasons in the interests of justice for allowing cross-examination on these issues.
The witness speaks of W 4 taking over her job. The applicant seeks to examine the witness on her training of W 4. Denial of this request would not give rise to any unfairness to the applicant. No substantial reason for allowing cross-examination on this aspect has been shown.
Witness 4
This witness took over W 3’s role as the bookkeeper for the company. She describes in her statement interaction with the applicant in respect of forward invoicing activities.
The applicant seeks to cross-examine on:
·The training that she received at the company upon her commencement and the subsequent training she received from W 3 in relation to forward invoicing;
·Her evidence in regards to any further training that she received during her employment and any role that the applicant and/or Mr R had in that training.
·Her knowledge of the applicant’s ability to utilise business programs such as MYOB.
The reasons in support are:
·This witness is centrally important to the issue of the applicant’s control of the business and his instructions to staff concerning the alleged fraudulent activity in question. Her cross-examination is required to allow the defence to properly understand the prosecution case, to prepare for trial and to ensure the defence are not taken by surprise at trial.
The prosecution submit her statement is detailed and fully outlines her recollection of working for the applicant.
Discussion: Witness 4
The statement of W 4 is more detailed than that of some other witnesses.
She describes in detail how she progressed in her duties and her training by W 3. I do not consider any further exploration of her statement account on this topic is necessary. No persuasive basis has been advanced as to why she should be cross-examined in respect of this evidence.
The witness recounts some contact she had with the applicant in respect of the signing of cheques. Her evidence does not disclose any further interaction with him or with Mr R. Given the nature of her role after the departure of W 3 there would in all likelihood have been contact with the applicant and Mr R in respect of her work. The defence may be surprised at trial unless this possibility is further explored.
The witness clearly denies knowledge of the applicant’s use of MYOB or if he knew how to use it. This is not inconsistent with the evidence of W 2. No further elaboration of the clear evidence in her statement appears justified. There is no reason to suggest cross-examination is necessary on this in order to understand the prosecution case or avoid surprise.
I consider that a substantial reason in the interests of justice to allow cross-examination has been demonstrated in respect of the witness’s interaction with the applicant and Mr R as to her duties regarding the company’s finances. The other requests do not give rise to substantial reasons in the interests of justice.
Witness 5
W 5 was a NAB employee who met with the applicant on a number of occasions including on 15 July 2005.
The applicant seeks to cross-examine this witness on:
·His recollections of the meeting of 15 July at 100 Creek Street, Brisbane including the conversation between persons in attendance, in particular Mr R and the applicant;
·The basis for his statement that he perceived Mr R to be a “driving force in business and was intimately involved the business” (sic).
The prosecution argues that the witness’s statement is sufficiently detailed. Nevertheless it is suggested an addendum statement could be provided as to W 5’s perception of Mr R referred to in paragraph 15 of his statement.
Discussion: Witness 5
The witness describes his presence at a meeting on 15 July 2005 at which the applicant, Mr R, W 1 and W 6 were present. He recounts an admission by the applicant that “we have invoiced in advance”. He also recalls a statement by Mr R.
These conversations do not appear to have been recalled by other witnesses said to be present.
In my view the applicant is entitled to explore the witness’s recollection of this meeting in preparation for trial.
The witness also describes Mr R as “a driving force in the business”. For reasons given earlier I consider the applicant is entitled to explore Mr R’s role in respect to the forward invoicing and is therefore entitled to cross-examine this witness as to what observations gave rise to his statement of this opinion.
Both of these issues raise, in my view, substantial reasons in the interests of justice why cross-examination should be allowed.
Witness 6
W 6 conducted a review of the company for Ferrier Hodgson Queensland and was present for conversations with the applicant.
The applicant requests that the witness be cross-examined as to:
·The meeting with the applicant and Mr R at the company’s office on 1 July 2005 and his recollections of the statement made by Mr R that “[The applicant] was not aware of the improprieties conducted by [the company] regarding NAB’s debtor finance facility”.
The applicant advanced the following reasons in support:
·The evidence of this witness suggests a statement by Mr R exculpatory of the defendant. Cross-examination is justified to allow the defence the possibility of fraudulent behaviour alleged here having been committed by another person (Mr R), to properly understand the prosecution case, to allow the defence to properly prepare for trial, and to avoid being taken by surprise at trial.
The prosecution submits the statement and notes of the witness sufficiently notify the applicant of the case against him.
Discussion: Witness 6
The statement by Mr R as recorded by the witness in his notes tends to exonerate the applicant. Although the statement is hearsay, I consider the applicant is entitled to explore it at committal to determine if admissible evidence exists which may provide a defence.
A substantial reason in the interests of justice has been established.
ORDERS
The application to cross-examine is granted
I direct pursuant to the provisions of s83A(5AA) of the Act that the prosecution call W 1 to attend to be made available for cross-examination on his written statement on the following issues:
·Any personal dealings he had with the applicant regarding the debtor finance facility of the company.
·Any observations he made of Mr R’s dealings regarding the debtor finance facility of the company.
I direct pursuant to the provisions of s83A(5AA) of the Act that the prosecution call W 2 to attend to be made available for cross-examination on her written statement on the following issues:
·Her personal dealings with the applicant in relation to the company’s original application, the opening of the NAB debtor facility and the subsequent applications to increase the facility.
·Her comment in paragraph 9 of her statement as to the applicant’s understanding of the debtor facility.
·Her observations and recollections of the meeting of 1 July 2005 referred to in paragraph 16 of her statement.
I direct pursuant to the provisions of s83A(5AA) of the Act that the prosecution call W 3 to attend to be made available for cross-examination on her written statement on the following issues:
·Any direct supervision and training provided to her by the applicant and/or Mr R during her time with the company.
·Any knowledge she has of the applicant’s ability to use business programs such as MYOB.
·Her personal observations of the operational role, if any, of Mr R in respect of forward invoicing and of any dealings Mr R may have had regarding the debtor finance facility of the company.
I direct pursuant to the provisions of s83A(5AA) of the Act that the prosecution call W 4 to attend to be made available for cross-examination on her written statement on the following issues:
·Her interaction with the applicant in respect of any training or instruction in her role as an employee dealing with the finances of the company.
·Her interaction with Mr R in respect of any training or instruction in her role as an employee dealing with the finances of the company.
I direct pursuant to the provisions of s83A(5AA) of the Act that the prosecution call W 5 to attend to be made available for cross-examination on his written statement on the following issues:
·His recollection of a meeting of 15 July 2005 referred to in paragraph 8 of his statement.
·The basis for his comment in paragraph 15 of his statement that he perceived Mr R to be a “driving force” and “intimately involved” in the business.
I direct pursuant to the provisions of s83A(5AA) of the Act that the prosecution call W 6 to attend to be made available for cross-examination on his written statement on the following issues:
·His recollection of a meeting on 1 July 2005 referred to in paragraphs 5 to 13 of his statement.
·His recollection of the circumstances and context of a comment he noted as made by Mr R that the applicant “was not aware of the improprieties conducted by [the company] regarding NAB’s debtor finance facility.”
Judge Brendan Butler AM SC
Chief Magistrate
3 May 2011
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