Pollitt v Police - [2007] SASC 302

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Criminal Appeal)
R v REID
[2007] SASC 302
Judgment of The Court of Criminal Appeal
(The Honourable Chief Justice Doyle, The Honourable Justice Vanstone and The Honourable Justice Layton)
17 August 2007
CRIMINAL LAW - PARTICULAR OFFENCES - OFFENCES AGAINST THE GOVERNMENT - DEFRAUDING THE COMMONWEALTH
CRIMINAL LAW - APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION - APPEAL AND NEW TRIAL - INTERFERENCE WITH DISCRETION OR FINDING OF JUDGE - PARTICULAR MATTERS - CONTROL OF PROCEEDINGS
Appeal against conviction for three counts defrauding the Commonwealth and 63 counts obtaining a gain - whether handover of material seized under search warrant in breach of s 3F(5) of Crimes Act 1914 (Cth) - evidence subject of search warrant admitted without objection - whether judge should have exercised discretion to exclude evidence on public policy grounds - appropriate time for objection before empanelment, or at latest, before material admitted - counsel bound by conduct in trial - duty of judge to manage jury trial.

CRIMINAL LAW - EVIDENCE - JUDICIAL DISCRETION TO ADMIT OR EXCLUDE EVIDENCE
Complaint about failure to exclude documentary evidence contained within laptop - whether seizure of laptop unlawful - consideration of terms of search warrant and application of s 127 Australian Securities and Investments Commission Act 2001 (Cth). Held: seizure of laptop lawful - no error in judge's exercise of discretion.
Appellant's diary admitted without objection but counsel sought exclusion of several entries - whether trial judge erred in refusing to excise potentially prejudicial entries. Held: no error demonstrated.

CRIMINAL LAW - APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION - APPEAL AND NEW TRIAL - PARTICULAR GROUNDS - MISDIRECTION AND NON-DIRECTION
Trial judge directed jury regarding limited use of suggested lies by appellant - whether lies direction should have been given at all. Held: direction could only have favoured appellant - permission to appeal refused.
Crimes Act 1914 (Cth), s 3F(5); Criminal Code Act 1995 (Cth); Australian Securities and Investments Commission Act 2001 (Cth), s 33, s 127, referred to.
R v Barker (1978) 19 SASR 448; Question of Law Reserved (No 1 of 1998) (1998) 70 SASR 281, applied.
Minosea v Australian Securities Commission (1994) 14 ACSR 642, distinguished.
Dhanhoa v The Queen (2003) 217 CLR 1; Zoneff v The Queen (2000) 200 CLR 234; Edwards v The Queen (1993) 178 CLR 193, discussed.
The Queen v Duke (1979) 22 SASR 46; Connelly v Director of Public Prosecutions [1964] AC 1254; Barton v The Queen (1980) 147 CLR 75; Jago v District Court of NSW & Ors (1989) 168 CLR 23; Dietrich v The Queen (1992) 177 CLR 292; R v Tran & To (2006) 96 SASR 8, considered.

R v REID
[2007] SASC 302
Court of Criminal Appeal: Doyle CJ, Vanstone and Layton JJ

DOYLE CJ: I would refuse permission to appeal on the three grounds on which permission to appeal is sought. I would dismiss the appeal on the other grounds. I agree with the reasons given by Vanstone J, and there is nothing that I wish to add.
VANSTONE J:
Introduction
The appellant was convicted in the District Court by verdicts of a jury for three counts of defrauding the Commonwealth contrary to the Crimes Act 1914 (Cth), and sixty-three counts of obtaining a gain, contrary to the Criminal Code Act 1995 (Cth). The appellant was tried in company with two other persons, being his wife and a former business partner.
A judge of this court granted permission to appeal on three grounds which amount to complaints about the refusal of the trial judge to exclude items of evidence on a discretionary basis. The single judge also refused permission to appeal on two grounds concerned with submissions damaging to the appellant made by a counsel for a co-accused in his final address to the jury, and another ground complaining of the “lies direction” given by the judge in his summing up. On those grounds the appellant renews his application before this court.
Background
The prosecution case was that the appellant devised and operated a scheme to obtain money from the Australian Taxation Office (“ATO”) by submitting fraudulent business activity statements (“BASs”). The scheme was said to have operated over a two year period, being 2001 and 2002, and involved the presentation of 66 false BASs by a number of different entities. Had the documents been genuine, they would have justified the ATO in making refunds of the goods and services tax associated with sales of opal. The total of the amounts claimed in refunds was about $6.5m. In response to the claims made, the ATO paid approximately $4.1m.
Ground 1 – items seized at Coober Pedy
The investigation of the matter was conducted by officers of the ATO. Various search warrants were obtained and executed by the Australian Federal Police (“AFP”) at the request of officers of the ATO for the purpose of their investigations.
One such search warrant was issued to Federal Agent Velickovic on 11 December 2001. When Agent Velickovic executed the warrant on 12 December at Coober Pedy he was accompanied and assisted by ATO officers. A number of items relevant to this prosecution were seized. They included false invoices for opals, bank statements, correspondence and a diary belonging to the appellant. It was not contended that the search of the premises or the seizure of these documents was unlawful.
On the following day officers of the ATO collected the seized material from the premises of the AFP where it had been stowed. It was the handover of the seized material to the ATO which was said to be unlawful.
As at the time of seizure and handover, s 3F(5) Crimes Act 1914 (Cth) provided as follows:
(5) If things are seized under a warrant, the warrant authorises the executing officer to make the things available to officers of other agencies if it is necessary to do so for the purpose of investigating or prosecuting an offence to which the things relate.
Counsel for the appellant argued that since the evidence showed that Agent Velickovic, the “executing officer”, was not present at the time of the handover and since there was no other evidence that what was done was pursuant to him “[making] the things available to officers” of the ATO, then the handover was attended by illegality such as to give rise to a discretion to exclude the evidence on public policy grounds.
It was not conceded by the respondent that the handing over of the exhibits was attended by any illegality, either of a technical nature or otherwise.
However, in my view it is both unnecessary and undesirable to undertake a discussion of the arguments on each side going to the matter of illegality and the discretion. I say that for this reason. It emerged during the argument that Mr Niarchos, who appeared for the appellant both at trial and before this court, did not raise any issue as to the alleged illegality associated with this process until a time after all the relevant exhibits had been tendered and, without objection, received into evidence. Although the trial judge was prepared to set aside some limited time to hear counsel’s submission as to the matter, the fact was that the evidence was already before the jury. Counsel’s position before the trial judge, though framed as an application for discretionary exclusion and contained within a document taking the form of a District Court Rule 9 notice, in fact amounted to an application that evidence already before the jury should be withdrawn from it. Had counsel’s argument been successful then the attitude of the co-defendants as to receipt of the material would have become relevant and, additionally, the prospect of a mistrial might have loomed. But that point was not reached. The judge dealt with the matter by hearing submissions and ruling on the suggested illegality. His ruling was that if there had been any breach of s 3F(5) then it was “minor and highly technical in nature” and left the probative force of the evidence unaffected. He said he would not have exercised his discretion to exclude the evidence. In the circumstances any other approach to the exercise of the discretion would have been, in my view, surprising.
I would not wish to be unduly critical of the preparedness of the trial judge to interrupt the trial proper in order to hear counsel’s application for discretionary exclusion. The judge was managing a lengthy jury trial. Already the jury had sat for 14 days and the trial endured for another 24 days. No doubt he did not wish to risk possibly jeopardising the result of it by refusing to hear the application. He might have been sympathetic to the fact that Agent Velickovic’s statement did not record that he was not present when the things seized were handed to the ATO officers. But it would hardly be expected to record that fact. No doubt a simple enquiry made at any time before the trial would have established as much. And it remains the case that the “new” evidence that Agent Velickovic was not present at the handover, upon which counsel relied, was not contrary to any other evidence or to any statement in the depositions.
Occasionally, arguments as to admissibility of bodies of evidence will need to be heard in the course of a trial, rather than in a pre-trial hearing, perhaps because relevant matters have become known to counsel after the trial commences, or for other reasons which a judge considers justify waiver of compliance with the Rules. Even more rarely counsel might apply during the trial to mount an argument that evidence should be excluded as an exercise of the public policy discretion. However it is, to say the least, undesirable, that a jury should be kept waiting while the judge hears arguments that could and should have been the subject of a Rule 9 application and hearing before empanelment, were they to be argued at all.
But more fundamentally, once the evidence was admitted, without objection, the time for any appeal to the judge’s discretion on account of some theoretical illegality was well past. Counsel are, and must be, bound by their conduct in a trial. Trials will become unmanageable if juries are sent away while counsel are permitted to re-agitate points or rulings or the receipt of evidence after the fact. In my view permission given by the judge to counsel to file a Rule 9 notice as the trial progressed, in relation to exhibits already received, was an indulgence which would have been better refused.
Consequently I think it inappropriate to consider such arguments which could have been made as to the alleged illegality as if the objection had been taken at the appropriate time, namely before the jury was empanelled.
I would not wish to be understood as asserting that a decision regarding admissibility of evidence, or even a decision as to discretionary exclusion of evidence, could never be recalled in the course of a trial. Extraordinary circumstances might, I suppose, justify such a course. However, this was a clear case where there was simply no scope for, nor any warrant for, ventilation of the appellant’s new position with respect to the seized items.
Ground 2 – failure to exclude documents contained within laptop
Upon the appeal it was argued that, for two reasons, evidentiary material downloaded from a laptop computer seized by police should have been excluded. First it was submitted that the warrant said to justify seizure of the laptop computer covered only electronic data stored on it and not the computer itself. Then it was argued that electronic data stored on the computer was revealed by an ASIC officer to an ATO officer contrary to s 127 Australian Securities and Investments Commission Act 2001 (Cth) (“ASIC Act”).
The chronology of events was as follows. In June 2003 a Mr Broome was appointed as the official liquidator of Battstone Australia Pty Ltd (“Battstone”), a company which had allegedly been under the control of the appellant. That led to Mr Broome coming into possession of items including a laptop computer (“the laptop”) which had been located at premises associated with that company. That occurred on 14 July 2003. Because of claims by third parties for the return of some of the items, Mr Broome requested that ASIC take effective control of the company’s assets. On 24 July an officer of ASIC, Mr McCartney, issued a notice pursuant to s 33 of the ASIC Act requiring Mr Broome to produce to him in “relation to an investigation into [the appellant] in relation to a suspected breach of section 206A Corporations Act” all the “books” of Battstone. The term “books” is defined widely in the ASIC Act. Mr McCartney subsequently seized some of the “books” in Mr Broome’s possession, including a compact disc (“CD”) containing copies of the hard drive of the seized computers. When he viewed documents on that CD he realised some might be of interest to officers of the ATO whom he knew were investigating aspects of the appellant’s business activities. Consequently he contacted the ATO advising that some of the material might be relevant to it.
He later showed some of the material on the CD to an officer of the ATO, Mr Jones. Having seen it, Mr Jones asked the AFP to take steps to seize the laptop containing that material from Mr Broome. A warrant was issued to Federal Agent Leske on 16 December 2003. It authorised the seizure of evidential material satisfying certain conditions, including that they were “[t]hings … which are stored on a computer”. Agent Leske proceeded to seize the laptop from Mr Broome. There is no question but that documents relevant to the investigation of these charges were stored on the laptop. They were subsequently tendered in evidence at the trial.
The first aspect of the argument is, then, that having obtained possession of the documents via the chain of events described, ASIC was obliged by s 127 ASIC Act to protect them from unauthorised use. It was said that dissemination of the information gained was governed by s 127(1) of the ASIC Act and that the section did not permit disclosure of the documents to Mr Jones of the ATO.
The provision is as follows:
127 Confidentiality
(1) ASIC must take all reasonable measures to protect from unauthorised use or disclosure information:
(a)given to it in confidence in or in connection with the performance of its functions or the exercise of its powers under the corporations legislation (other than the excluded provisions); or
(b)that is protected information.
Mr Niarchos argued that both subparagraphs of the subsection applied. However, as to 127(1)(a), although it can readily be acknowledged that the information came to Mr McCartney in connection with the performance or exercise of ASIC’s powers or functions, it was not demonstrated that the information came to ASIC “in confidence”. Plainly, meaning must be imputed to those words. I do not consider that the mere fact that a section 33 notice was used to take control of the information demonstrates that it was received “in confidence”. That Mr Broome was instrumental in involving ASIC and advising it of his possession of the documents, tends toward a contrary conclusion.
Mr Niarchos relied on statements by Lindgren J in Minosea v Australian Securities Commission (1994) 14 ACSR 642, 651 as to the work s 127 does in safeguarding the confidentiality of information derived from books produced pursuant to notices under s 33. There, the books under consideration were bankers books, which would almost inevitably contain information of a confidential nature. I do not think anything in that case assists the appellant.
Moving to s 127(1)(b), “protected information” is defined in s 127(9) as “information disclosed or obtained, or a document given or produced … for the purposes of a function in section 12A and …”. Section 12A functions have no relevance to the information obtained from Mr Broome. Furthermore, Mr Niarchos did not attempt to argue that its disclosure to Mr Jones was “unauthorised” as s 127(1) specifies. As to that, it appears arguable that the disclosure was authorised by either of s 127(2) and s 127(3) of that Act.
Irrespective of any finding of breach of s 127 of the ASIC Act, the issuing of the warrant to federal police at the insistence of the ATO on 16 December 2003 in my view overtook and made redundant any irregularity associated with the disclosure to Mr Jones. In other words, the evidence was lawfully seized pursuant to the warrant and any illegality by an officer of another agency at an earlier stage would not likely have had any impact on the later seizure so as to give rise to a discretion to exclude the fruits of the seizure. We were not taken to any authority on this point. However there are some analogies to the situation in which admissions are made by a suspect in a period of lawful custody which follows a period of unlawful custody. The illegality associated with the earlier period does not give rise to a discretion to exclude the admissions: R v Barker (1978) 19 SASR 448; Question of Law Reserved (No 1 of 1998) (1998) 70 SASR 281.
I turn to the second aspect of this ground. It is true that the warrant was worded in such a way as to authorise seizure of various categories of documents stored on a computer and did not, literally, extend to seizure of the computer itself. However I do not think that any illegality attended the seizure of the laptop. In the first place, seizure of the laptop itself was one means of taking possession of the relevant electronic documents. The documents were contained on its hard drive and removal of the item itself facilitated seizure of the documents. By analogy, seizure of the liquid form of a drug authorised by a warrant might necessitate seizure of the container in which it is located. I note that the Crimes Act provides other means of obtaining electronic data stored on computers, but this computer was not in use and Mr Broome had no particular need of it. It was no doubt convenient both to him as well as to the executing officer that the computer be removed then and there.
But in any event s 3F(1) Crimes Act authorised the executing officer:
(d)to seize other things found at the premises in the course of the search that the executing officer or a constable assisting believes on reasonable grounds to be:
(i) evidential material in relation to an offence to which the warrant relates …
In my view the laptop itself was plainly such an item. It was so closely connected to the items to which the warrant referred as to justify its seizure. Among other things, seizure of it might have facilitated identification of previous users of it in any of several ways and might have facilitated its being linked with one or more of the accused persons. I consider the seizure was lawful.
However, even if the seizure were found to be unlawful, I consider that would only give rise to a discretion to exclude from evidence the laptop computer itself. Even if during the period occupied by the execution of a warrant one item is unlawfully seized, that does not, without more, render seizure of other items unlawful.
In my view the judge correctly found that the seizure was not attended by illegality.
Ground 6 – tender of the appellant’s diary
An appointments diary belonging to the appellant was tendered by the prosecution for at least two purposes. First it was used by a handwriting expert to provide reference samples of the appellant’s handwriting for comparison with documents connected with the scheme. In addition, reliance was placed on the lack of entries which would be expected to be there if certain opal purchases had taken place as asserted in documents associated with the scheme.

It was not contended that the diary was inadmissible; nor that, viewed as a whole, it was more prejudicial than probative. Rather it was contended that entries on three separate pages carried with them a prejudice not connected with the offences themselves and that these should have in some way been excised. Those entries included one or more references to the appellant attending at the Adelaide Federal Court and, more importantly, an entry on 29 June recorded “Federal cops arrived. Had to pay them $29,000.” The judge expressed the view that in the context of the case that entry in particular had some, but not marked, prejudicial effect.
The judge heard submissions from all counsel as to whether the relevant entries should be covered, or excised from the diary. He expressed a reticence to interfere with an original exhibit. He also expressed the view that covering or excising any entries might excite the jury’s interest in a way more damaging to the appellant than the entries themselves. The judge ruled that the exhibit should be received in its original form. He directed the jury that they should, in a general sense, ignore the specifics of entries apparently unrelated to the case and concentrate on the particular uses for the diary suggested by counsel.
When an item of real evidence contains extraneous references or material which might be prejudicial to the accused person, the judge has a discretion to exclude the exhibit from evidence: The Queen v Duke (1979) 22 SASR 46. Plainly, in this instance, the judge was correct in deciding that the original exhibit had substantial probative value and should be received. The few potentially prejudicial entries to which Mr Niarchos drew attention did not outweigh the diary’s probative value.
Counsel’s submission in this case seems to have called upon the judge to exercise a further discretion. That further discretion could only arise as an incident of the overriding or residual discretion a trial judge has to do what is necessary to secure a fair trial to the accused person: Connelly v Director of Public Prosecutions [1964] AC 1254; Barton v The Queen (1980) 147 CLR 75; Jago v District Court of NSW & Ors (1989) 168 CLR 23; Dietrich v The Queen (1992) 177 CLR 292. However, in my mind it raises difficult issues. I would be very slow to criticise a trial judge who was reticent about interfering with the condition of an exhibit. Perhaps some items of real evidence would be of such a form whereby parts of them could be readily severed or removed without detracting from the jury’s perception of them and without generating questions as to the reason for such action. But by and large, in my opinion, judges should be slow to countenance any alteration of an exhibit. I leave aside decisions to exclude particular photographs in a run because of some extraneous prejudice associated with them, because in that situation there is no impact on the integrity of the balance.
This ground is not made out.
Grounds for which permission to appeal is sought
Two of the grounds upon which permission to appeal was refused by the single judge concerned submissions made in the final address of counsel for the co-accused, Graham Ernest Dasborough. In essence counsel suggested that his client had been duped by the appellant and had unwittingly assisted the appellant in his scheme. Complaint was made at the close of counsel’s address.
The judge determined that except in one respect the submissions were founded in the evidence and were proper. However the judge instructed the jury that it should disregard a submission which invited it to make its own handwriting comparisons and reach a conclusion as to authorship of documents which had not been put by counsel for Dasborough to the handwriting expert.
Counsel for the appellant characterised the first mentioned submissions as being “of an inflammatory nature” and suggested that in some respects they misstated the evidence. He argued that the submissions might have given rise to a miscarriage of justice.
An attack by one accused person upon the case of another may be an incident of a joint trial. There is no rule that counsel must be circumspect in such submissions that they make attacking a co-accused. In R v Tran & To (2006) 96 SASR 8 this court recently dealt with a case in which the final address of counsel for one of the accused men suggested that the co-accused was of bad character and also drew attention to his failure to give evidence at trial. The court found that these submissions did not cause a miscarriage of justice. In the present case the submissions did not go nearly so far. They were – with the exception I have mentioned – based on aspects of the evidence. I do not see how a miscarriage could have flowed from them.
The final ground upon which permission was sought complained of a direction regarding the use to which suggested lies by the appellant could be put. The appellant did not give evidence at trial. During the prosecutor’s address it was suggested that he had lied to various people, either to promote his scheme or to cover his tracks. It was not suggested by the prosecutor that the suggested lies emanated from a consciousness of guilt. Rather they were put as demonstrating the deceit underlying his conduct as he advanced his scheme.
In his summing up the trial judge gave a direction outlining what he said was the “very limited use” that the lies had. The effect of the direction was that even if the jury found any of the lies proved they should not treat that as evidence of guilt, but rather should see it as bearing on the question of the appellant’s credibility in what he said to other persons at other times.
The appellant contended that no direction on lies should have been given. Reliance was placed on Dhanhoa v The Queen (2003) 217 CLR 1. In that case the victim had met a group of people at an hotel and invited them to his unit. There he was attacked and robbed. When asked by investigating police, eight months after the event, to explain how his fingerprints might have been found at the victim’s unit, the accused denied ever having been at the victim’s unit, or indeed at the hotel. At trial he gave evidence admitting that he had in fact been both at the hotel and at the victim’s unit with the other accused men. The prosecution did not suggest that the jury should use the lies as evincing a consciousness of guilt and no direction was given about them in the summing up. A majority of the court dismissed the appeal.
In their joint judgment Gleeson CJ and Hayne J held that where the prosecution does not contend that lies are evidence of guilt, then it is unnecessary for the judge to direct on the lies, unless there is an apprehension of a real danger that the jury might use the lies in that way. A direction such as that suggested in Zoneff v The Queen (2000) 200 CLR 234 was not appropriate where there was not a risk of misunderstanding about the significance of the possible lies. McHugh and Gummow JJ also dismissed the appeal. However their Honours considered that it would have been better had the trial judge given a direction confining use of the suggested lies to the matter of credibility. Considering that there was only a slender possibility of misuse of the lies, they held that no miscarriage could have resulted. Callinan J took a different approach. His Honour considered that the only evidentiary value of the lies was in demonstrating a consciousness of guilt and that therefore a direction in terms of Edwards v The Queen (1993) 178 CLR 193 was necessary.
In this case I do not think it was necessary for the judge to give a direction. In a sense, the suggested lies were part and parcel of the alleged crimes and should have been evaluated along with all the other evidence without need of a particular direction. However, in my view, in the circumstances, the direction given could only have favoured the appellant in the cautionary note that it sounded.
I consider permission to appeal should be refused on this ground.
Conclusion
None of the grounds of appeal has been made good.
I would dismiss the appeal. I would refuse the application for permission to appeal on the three proposed grounds.
LAYTON J: Having had the opportunity of reading the reasons given by Vanstone J, I agree that permission to appeal on the three grounds should be refused. I consider the appeal on the remaining grounds should be dismissed. I agree with the reasoning of Vanstone J.