R (Cth) v Petroulias (No. 7)
[2007] NSWSC 16
•30 January 2007
CITATION: R (Cth) v Petroulias (No. 7) [2007] NSWSC 16 HEARING DATE(S): 11 December 2006
JUDGMENT DATE :
30 January 2007JUDGMENT OF: Johnson J at 1 DECISION: See paragraphs 104 and 105 of judgment. CATCHWORDS: CRIMINAL LAW - admissibility of evidence of six telephone conversations obtained by warrant under Telecommunications (Interception) Act 1979 (Cth) - whether evidence relevant to prosecution of Accused for alleged offences under ss.29D, 70 and 73 Crimes Act 1914 (Cth) - whether three conversations, if relevant, ought be rejected under s.135(a) Evidence Act 1995 upon basis that probative value substantially outweighed by danger that evidence might be unfairly prejudicial to Accused - evidence of each of six conversations admitted LEGISLATION CITED: Telecommunications (Interception) Act 1979 (Cth))
Evidence Act 1995
Crimes Act 1914 (Cth)CASES CITED: R v Petroulias (No. 1) [2006] NSWSC 788
R v Serratore (1999) 48 NSWLR 101
R v BD (1997) 94 A Crim R 131
Papakosmas v The Queen (1999) 196 CLR 297
Commonwealth of Australia v McLean (1996) 41 NSWLR 389
Gordon (Bankrupt), Official Trustee in Bankruptcy v Pike (No. 1) (Federal Court of Australia, Beaumont J, 1 September 1995)PARTIES: Regina (Commonwealth) (Crown)
Nikytas Nicholas Petroulias (Accused)FILE NUMBER(S): SC 2002/93 COUNSEL: Mr P Hastings QC; Mr C Hoy (Crown)
Mr R Sutherland SC; Mr G Walsh (Accused)SOLICITORS: Commonwealth Director of Public Prosecutions (Crown)
Coadys (Accused)LOWER COURT DATE OF DECISION: --- LOWER COURT MEDIUM NEUTRAL CITATION: ---
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
CRIMINAL LISTJohnson J
30 January 2007
JUDGMENT (on tender by Crown of six conversations recorded pursuant to warrant under the Telecommunications (Interception) Act 1979(Cth) )2002/93 Regina v Nikytas Nicholas Petroulias (No. 7)
1 JOHNSON J: The Crown seeks to tender, for the purpose of the forthcoming trial of the Accused, a number of conversations between the Accused and other persons which were recorded pursuant to warrant under the Telecommunications (Interception) Act 1979 (Cth). The six conversations which are the subject of the present ruling are as follows:
(a) conversation between the Accused and “Judy” at 2021 hours on 3 September 1999;
(b) conversation between the Accused and an unidentified female at 2212 hours on 8 September 1999;
(c) conversation between the Accused and John McLaren at 1249 hours on 24 September 1999;
(d) conversation between the Accused and Geoff Strong at 1231 hours on 2 October 1999;
(f) conversation between the Accused and Geoff Strong at 1104 hours on 4 October 1999.(e) conversation between the Accused and Nick Panos at 1807 hours on 3 October 1999;
2 On 11 December 2006, I heard argument concerning the tender of the six conversations. On 12 December 2006, I announced my decision to admit each of the six conversations. These are my reasons for that decision.
Sully J’s Rulings on 14 April 2005
3 On 14 April 2005, Sully J, in a judgment delivered on a pre-trial application before the first trial of the Accused, allowed the tender of conversations (a) to (c) above, but rejected the tender of conversations (d) to (f). In each case, his Honour’s ruling was based upon the relevance test under s.55 Evidence Act 1995. Conversations (a) to (c) were held to be relevant (Judgment, pages 14-17, 19-23). Conversations (d) to (f) were held to be irrelevant and therefore inadmissible (Judgment, pages 26-29).
4 I am not bound by the decisions of Sully J concerning the admissibility of these conversations. With respect to the present tender, I will consider the submissions and material to which reference has been made and I will make my own independent assessment of that material for the purpose of ruling on the admissibility of the conversations. I will have regard to the decisions of Sully J to which I have been taken to assist in this decision-making process: R v Petroulias (No. 1) [2006] NSWSC 788 at [51]-[54].
Relevant Legal Principles
5 With respect to each of the six conversations, the Crown submits that the test of relevance under s.55 Evidence Act 1995 is satisfied and that each conversation ought be admitted into evidence. Mr Sutherland SC, for the Accused, submits that each conversations is not relevant and ought be rejected. In addition, Mr Sutherland SC submits that, if conversations (d) to (f) are relevant, they should nevertheless be rejected under s.135(a) Evidence Act 1995 upon the basis that their probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the Accused.
6 Evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding: s.55(1) Evidence Act 1995. Evidence that is relevant in a proceeding is admissible in the proceeding: s.56(1) Evidence Act 1995.
7 If a question arises as to the relevance of a document or thing, the Court may examine it and may draw any reasonable inference from it: s.58(1) Evidence Act 1995.
8 The Crown submits that, in a number of respects, statements made by the Accused during the various recorded conversations constitute admissions for the purpose of Part 3.4 (ss.81-90) Evidence Act 1995. The term “admission” is defined in the Dictionary to the Evidence Act 1995 in the following way:
“ admission means a previous representation that is:
(b) adverse to the person’s interest in the outcome of the proceeding.”(a) made by a person who is or becomes a party to a proceeding (including a defendant in a criminal proceeding), and
9 The terms “previous representation” and “representation” are defined in the Dictionary to the Act in the following way:
“ previous representation means a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.
…
representation includes:
(a) an express or implied representation (whether oral or in writing), or
(b) a representation to be inferred from conduct, or
(d) a representation that for any reason is not communicated.”(c) a representation not intended by its maker to be communicated to or seen by another person, or
10 A “fact in issue” is any matter of fact that must ultimately be determined by the jury in order to decide whether the Accused has committed the offence charged. In considering the relevance test under s.55, as Sully J observed in his judgment of 14 April 2005 (page 4), it is necessary to bear carefully in mind that the words of the section, and especially the expression “directly or indirectly”, are words of wide import.
11 With respect to s.135, it should be understood that all relevant evidence led in the Crown case at trial is prejudicial to the Accused, but it is only that of which the probative value is outweighed by the danger of unfair prejudice which is excluded, that is, evidence which has only slight probative value but which carries with it a probability that it be misused by the tribunal of fact in a way logically unconnected with the issues in the case: R v Serratore (1999) 48 NSWLR 101 at 109 [31]. Evidence is not unfairly prejudicial merely because it makes it more likely that the Accused will be convicted. The prejudice to which s. 135 refers is not that the evidence merely tends to establish the Crown case; it means prejudice which is unfair because there is a real risk that the evidence will be misused by the jury in some unfair way: R v BD (1997) 94 A Crim R 131 at 139; Papakosmas v The Queen (1999) 196 CLR 297 at 325 [91].
Conversation (a) Between the Accused and “Judy” at 2021 Hours on 3 September 1999
12 The conversation between the Accused (“N”) and “Judy” (“J”) at 2021 hours on 3 September 1999 is in the following terms:
“N Now look, you just make sure that nothing go if nothing goes wrong I'll be happy okay.
J What do you mean?
N I just don't want to be hassled by the ATO so it can happen then I'll do it and I'll be a lot happier.
J Mm.
N Seriously I'm afraid of those guys.
J Are you?
N Yeah.
J Well what's the worst thing that you've done to them? What's the worst deal you have done?
N Ah I think they know everything now.
J They know everything?
N I think they've work it all out by now.
J Well what have you done?
N I told you favours for people.
J Yeah but what's the worst favour that you did like what?
N Oh it shouldn't really it can't be that bad because it was just giving rulings on things that the ATO was happy to give rulings on.
J Sorry you gave rulings on it that wasn't supposed to?
N Rulings on things that the ATO had already given rulings on and was already giving rulings in other parts of the ATO so actually it wasn't that bad if you think about it.
J Well what it why are you scared then?
N Because I was a high profile guy I was supposed to be the anti tax avoidance crusader.
J Oh.
N I was supposed to be the one who was supposed to stop everything and yet here I am encouraging it that's why they hate me.
J Yeah but they they won't do anything because they're on the political scale they would why would they wanna.
N Exactly.
J You know it ah what do you call it erm [sic] crucify themselves.
N Yeah.
J But they'd they'd want to cover it up and just get on with it.
N That's what I'm hoping they do.
J Well it's true he did you have have you got any summons or anything?
N No no no for God's sake no no no.
N No I resigned before anything went wrong.”J And ho okay ho did you resign yourself or did they sack you?
13 Before Sully J, the Crown pressed this conversation by reference to Particulars D and M(ix) which provide as follows:
- “Particular D - At all times during his employment in the Australian Tax Office (the Accused)’s duties were such that any involvement in the planning, promotion or implementation of tax schemes was a conflict of interest, and a breach of his duty as an officer of the Australian Taxation Office.
- Particular M(ix) - In other telephone conversations with friends and associates Petroulias admitted his role in the issue of the rulings pursuant to the arrangement alleged above, and that he was in trouble.”
Submissions
14 The Crown submitted that, in this conversation, the Accused was speaking to a young female whose identity is irrelevant. In the conversation, the Accused referred to the fact that “they know everything now”, thereby tending to confirm the lack of transparency on his part when issuing rulings in the Australian Taxation Office (“ATO”) and the fact that it required considerable time and effort for the ATO to ascertain what he had been doing. The Accused also confirmed that he had been doing “favours for people”, consistent with the allegation by the Crown that the Accused had been acting inconsistently in the way he gave favourable rulings to Productivity Incentive Corporation (“PIC”) schemes, unlike the schemes of other promoters. The Crown submitted that, in this conversation, the Accused admitted that he had caused rulings to be made in circumstances where he “was supposed to be the anti tax avoidance crusader” who was “supposed to stop everything and yet here I am encouraging it”.
15 Mr Sutherland SC submitted that it was necessary to bear in mind that the telephone conversation was occurring at a time when a Senate Select Committee Inquiry was on foot which was examining various aspects of the ATO, including aspects relating to the Accused. He submitted that it is important to relate the alleged relevance of the conversation to the actual charges preferred in the indictment against the Accused. He contended that, when this exercise was undertaken, statements made by the Accused during the conversation were not relevant to the charges brought against him. It was submitted that no consciousness of guilt was evinced with respect to the charges which had been preferred.
16 To the extent that the Accused explained in the conversation that his “favours for people” could not be “that bad because it was just giving rulings on things that the ATO was happy to give rulings on”, Mr Sutherland SC submits that this is far from an admission in relation to the elements of the offences charged. Accordingly, he submitted that the statements of the Accused had no probative relevance to the prosecution case.
Decision
17 In determining the relevance of the Accused’s statements in this conversation to this case, it is appropriate to note the charges contained in the indictment:
(a) Count 1 - Between about 1 September 1997 and 27 February 1999, Nikytas Nicholas Petroulias did defraud the Commonwealth, in that while an officer of the Australian Taxation Office, he did put the revenue of the Commonwealth at risk by causing Private Binding Rulings and Advance Opinions to issue to taxpayers, by dishonest means (s.29D Crimes Act 1914 (Cth) - maximum penalty - 10 years’ imprisonment);
(c) Count 3 - Between about June 1998 and April 1999 at Sydney, New South Wales, Nikytas Nicholas Petroulias, then being a Commonwealth officer with the Australian Taxation Office, did publish to Richard Llewellyn Morgan, a person to whom he was not authorised to publish, documents which came into his possession by virtue of him being a Commonwealth officer, and which it was his duty not to disclose (s.70 Crimes Act 1914 (Cth) - maximum penalty - two years’ imprisonment).(b) Count 2 - Between about October 1997 and February 1999 at Sydney, New South Wales and elsewhere, Nikytas Nicholas Petroulias, then a Commonwealth officer with the Australian Taxation Office, did agree to receive a benefit for himself, namely money, on an understanding that the exercise by him of his duty as a Commonwealth officer would be affected (s.73 Crimes Act 1914 (Cth) - maximum penalty - two years’ imprisonment);
18 In the course of my judgment in R v Petroulias (No. 1), I considered submissions made on behalf of the Accused concerning aspects of the first count on the indictment, being the offence of defrauding the Commonwealth contrary to s.29D Crimes Act 1914 (Cth). I noted (at [96]-[97]) a defence concession with respect to evidence touching the issue of dishonesty. There followed an extensive consideration of submissions advanced with respect to the element of deprivation ([100]-[174]), the element of causation ([175]-[208]) and the element of dishonest means ([209]-[233]).
19 In dealing with the element of causation, I considered submissions concerning the role of the Accused in the giving of rulings relevant to this prosecution. With respect to the element of dishonest means, I considered questions of conflict of interest, discrimination between the schemes of the PIC group and the schemes of other promoters, concealment of the rulings being issued and deception of officers as to the rulings being issued.
20 I mention these parts of my earlier judgment because they bear upon the relevance of statements made by the Accused in the conversation to the charges contained in the indictment.
21 It seems to me that statements made by the Accused in the telephone conversation presently under consideration are capable of constituting admissions that he caused rulings to be made which constituted “favours for people”, in circumstances where the process was concealed so that it would take some time for the ATO to “work it all out”.
22 The Accused’s statement that he “was supposed to be the anti tax avoidance crusader” who “was supposed to be the one who was supposed to stop everything and yet here I am encouraging it” is capable of constituting an admission that he had caused the rulings to be made in a manner which encouraged tax avoidance and which was entirely inconsistent with, and contrary to, the duties which he was obliged to perform in his position within the ATO.
23 I do not consider that the existence of a Senate Select Committee Inquiry as part of the background to this conversation detracts from its relevance to this prosecution. What matters are the statements of the Accused concerning his own conduct which is directly relevant to facts in issue in these proceedings.
24 I am satisfied that the conversation containing these statements by the Accused is relevant and admissible for the purposes of ss.55 and 56 Evidence Act 1995. I propose to admit the conversation.
Conversation (b) Between the Accused and an Unidentified Female at 2212 Hours on 8 September 1999
25 The Crown tenders an intercepted conversation between the Accused (“NP”) and an unidentified female (“F”) at 2212 hours on 8 September 1999 to the following effect:
“NP The worse scenario is that they say that this bloke came up with a really wacky highly theoretical ideas that just didn't apply in practice that's all and was badly misunderstood I think that's …
F No that's not bad that's OK.
NP Well I think that's the way the chips will fall.
F But isn't it bad isn't bad the assumption that you were um that the way you made your decisions was influenced by means which weren't necessarily um erm professional?
NP Yeah.
F And ethical so that's the big problem?
NP Hm.
F Right the stuff the other stuff here OK you've got the strategies you know you've got the intellectual strategies there that's no problem it's the other allegations that you have to find a nice um honest way of …
NP Well the thing is the truth of the matter is my approach worked.
F Yes well then it's good?
NP Well I mean I I achieved more in the ATO in a year and a half that anybody else has ever done I mean it was truly breath taking it was truly amazing stuff.
F You know from what I understand that's not what some of these that is under scrutiny you know?
NP No but that goes to suggest what the strategy was and why it worked why it didn't work.
F But it's not that strategy that's the problem is it?
NP No it's not no it's not.
F Then but I understand that part …
NP No but there's consequences no hold on there's consequences the reason I got results is because I worked closely with certain members of the profession who would assist me in understanding how the market actually operated hence allowed me to get a more fully appreciation of where the …
F And they assisted on the understanding that …
NP That provided they didn't abuse the system and they and they behave according to established ATO procedures that have been established eight years before I even existed in there that so long as they behaved to existing ATO procedures that I would not seek to upset their practice.
F And that would be fine?
NP Yeah.
NP Oh well you know obviously looking for people well Ok in an ideal world it wouldn't be in the ideal world you stand there and you have perfect information and people would know who you are and they come to you but in the real world people don't trust the tax office right so the only way you can ever start the ball rolling is to save the people who trust you more and those who trust you more are those who know you more.”F So long as there was no sort of social kind of infiltration (implications)?
Submissions
26 The Crown submits that statements made by the Accused in this conversation constitute admissions so that the conversation is relevant and admissible in this case. It was submitted that statements of the Accused in this conversation involve concessions that he had aligned himself with one group and displayed favouritism to them. Particular reference was made to the comment of the Accused that “in the real world people don't trust the tax office right so the only way you can ever start the ball rolling is to save the people who trust you more and those who trust you more are those who know you more”.
27 Mr Sutherland SC emphasises, once again, that the context in which this conversation took place involved a current Senate Select Committee Inquiry which, in the conversation, the Accused suggested was “out there to score political points” and as to which, at one point in the conversation, he asked rhetorically whether “they want my head on the platter … or do they want Carmody’s head on the platter?”. He submitted that the Accused’s comments in these conversations could not be regarded as admissions with respect to the offences charged in the indictment.
28 Mr Sutherland SC submits that, at points in the conversation, comments of the Accused were denials of wrongdoing, and not admissions. He submits that the conversation had no relevance and ought not be admitted.
Decision
29 In approaching a ruling concerning this conversation, I bear in mind those parts of my judgment in R v Petroulias (No. 1) adverted to at paragraphs 18 to 20 above. I do not think that the context of a current Senate Select Committee Inquiry into the ATO, including the activities of the Accused, affects the relevance of the Accused’s statements to the present prosecution. It is the subject matter which the Accused is speaking of which is capable of satisfying the test of relevance under s.55.
30 The topics which the Accused is discussing bear directly upon aspects of the present prosecution and, in my view, are capable of constituting admissions, in particular, with respect to the elements of causation and dishonest means. Whether they are accepted as admissions, will be a matter for the jury at the forthcoming trial. The fact that there is an intermingling of statements by the Accused which, in some respects, are adverse to his interests, but in other respects, may be favourable to his interests, does not render the statements of the Accused in this conversation irrelevant.
31 I am satisfied that this conversation is relevant and admissible and I propose to admit it for the purpose of the trial.
Conversation (c) Between the Accused and John McLaren at 1249 Hours on 24 September 1999
32 The Crown tenders an intercepted telephone conversation between the Accused (“N”) and John McLaren (“J”) at 1249 hours on 24 September 1999 to the following effect:
“J Well look I tell you what's happening is the um the the accountants in PERTH …
N Yeah.
J Are having a visit next week …
N Mm.
J From people from the PERTH office …
N Mm.
J And they're particularly wanting to see ah the letters that were sent requesting the rulings.
N Mm yeah that's fine.
J Now what I suspect will happen is that they'll say look we got this letter from JOHN MCLAREN.
N Mm.
J And what I wanted to talk to you about ah was sort of what I I mean I mean they're sort of ah taking my advice but do we need to drop in PRODUCTIVITY INCENTIVE CORPORATION I think it's I think that's the way to go isn't it?
N No why?
J Well just that it then directs it back to ah the people in Sydney rather than me personally doesn't it?
N Um no because the problem is JEFF said that he'd only done the ten and he's only done the ten so then they will come to you anyway because . . ah they'll come to you and they'll say well hold on JEFF said he's done ten so I think what they're trying to do is piece the picture in pee piece the picture together …
J That's right so if they come to me I'd say …
N Yeah.
J Look I was licensed under by PRODUCTIVITY INCENTIVE CORPORATION um ah RICHARD MORGAN um …
N No don't mention RICHARD MORGAN.
J You don't …
N Because he's oh he's disappeared.
J He has has he …
N Well I haven't I haven't heard a word from him.
J No I haven't either okay so well where did I come up with all this information because the ruling requests exactly the same as ah …
N Oh you got it on.
J …
N You got it on disc from PANOS.
J From PANOS okay so PANOS.
N Yeah.
J PANOS is well that's all right so long as I got that that contact that they know about.
N Mm.
J Then there isn't a problem.
N Mm.
J And then basically if they ask me who I've sold to then it's pretty well all the ones that have got the rulings isn't it?
N Exactly.
J So then that ties in that completes that loop?
N Yep.
J Um and that's about it isn't it?
N Yeah.
J Cause at the moment I don't exist as far as they're concerned.
N Oh no you exist yeah you exist see what they're what they're really investigating is they want to they want to know because we because that guy ah that idiot up in Perth is …
J Yeah.
N ...claiming that we have given ruling to single director company situations.
J Well that's also wanted to look at was was how it was implemented in …
N Yeah.
J Terms of the ruling now everything is totally legit there isn't any problems at all.
N Oh good.
J Yeah and they've been banks involved with security and all sorts of things so so it's not as if there are any of them are gear are are feeling any sort of ah problem with any of them …
N Oh good good.
J So …
N That's very good.
J So but what I thought was it was a two pronged thing one was to see whether there was any um any any favours being made and secondly whether it was implemented according to the ruling.
N Mmm.
J Now all the accountants are saying implement it exactly according to the ruling everything's been documented everything's legit …
N Mm.
J In terms of any favours well they're not aware of any sort of arrangements …
N Mm.
J They simply send letters on their own letterhead to the TAX OFFICE and they got rulings within a week two weeks three weeks …
N Yeah yep yep.
J So I think from that point of view we're okay my only concern was that the a that that the mob over there will then come directly back to me but then they'll know everything about what I've been doing anyway won't they?
N Yeah they they pretty much will they've already got your I mean they've got GLOBAL GROWTH on file so all you have to is just ah just say that ah you know well … you've got nothing to worry about.
J But then but then all these ones were done under the MCLAREN HOLDINGS.
N Yeah well that's fine.
J What I'm saying is fine yes that's right.
N There is if there's but if there's any of them that you haven't got rulings for right?
J Yep.
N If you haven't got rulings for that you don't to tell them about don't …
J Exactly.
N …
J That's my feeling yeah.
N You simply …
N Forgot you've lost the file you don't keep it.J Yeah absolutely.
J That's right exactly.
N There's no record keeping obligations on you.
J No no you're absolutely right so so you know I'm comfortable with whatever they they know now is really the ah the limit to what I've been involved in.
N Yeah yeah.
J …
N No I've you saw it was a good idea so you asked ah PANOS ah a copy of the disc of ah how it works PANOS sent you a copy of the disc from because we're not you're not competing against him
J That's right
N Because you're in different markets ah and goo [sic] JEFF agreed to it.
J That's right.
N And and in return you give them ideas and that that's how it works.
J That's right.
N Yeah.
J Yep perfect.
N Yeah.
N Yeah.”J Okay so excellent so so that's that's sort of um gonna close that loop in terms of the Perth people?
33 In admitting this conversation at the first trial (pages 17-18), Sully J referred to Particular M(vii) which states:
- “Subsequent to his employment with the ATO Petroulias continued to contact Morgan, Panos, Strong, Gray and McLaren and discussed the progress of the investigation by the ATO and the AFP into their arrangements, as well as the explanations to be given for the issue of the rulings, and the action to be taken in response to the investigations.”
Submissions
34 The Crown submits that this conversation involves a discussion between the Accused and a promoter, Mr McLaren, during which they discussed a version of an explanation to be given to investigators. It is submitted that not only does the conversation reflect the joint involvement of the Accused and Mr McLaren and the arrangement alleged, but that the Accused also provides suggestions as to what to say and what not to say, including the Accused’s comment to Mr McLaren “No, don’t mention Richard Morgan”. It will be remembered from my judgment in R v Petroulias (No. 1) (at [257]) that Sully J characterised Mr Morgan in summing up to the jury as “a cardinal witness in the Crown case”.
35 The Crown submits that statements made by the Accused in this conversation are at odds with him being at arm’s length when dealing with PIC applications and are inconsistent with him having an involvement with promoters which could be explained as that of a professional advisor prior to him joining the ATO. Even though the conversation occurs at a time after the Accused had left the ATO, the Crown submits that he demonstrates in the conversation knowledge of activities of the PIC group which can only be explained by the fact that he was a member of it.
36 Accordingly, the Crown submits that the conversation is clearly relevant to the present prosecution.
37 Mr Sutherland SC submits that the conversation is a discussion between tax professionals concerning ATO enquiries at a time well after the Accused had ceased working for the ATO. It occurred shortly after Mr McLaren had been spoken to, at his home, by investigators. He points to the fact that, during the conversation, Mr McLaren states “Now everything is totally legit. There isn’t any problems at all”. Mr Sutherland SC submits that the conversation does not carry any probative relevance to the elements of the offences alleged by the Crown and that it ought not be admitted into evidence. If that primary submission is rejected, Mr Sutherland SC submits that this conversation ought be excluded, in any event, under s.135(a) Evidence Act 1995.
Decision
38 I will rule firstly upon the relevance ground and, if that ruling favours the Crown, I will then consider the objection under s.135(a) Evidence Act 1995.
39 A significant issue at the trial will concern the involvement of the Accused with PIC, and his relationship with promoters including Mr McLaren. In my judgment in R v Petroulias (No. 1) (at [185]), I reproduced part of a recorded interview between the Accused (“NP”) and Federal Agent David Wildman (“DW”) on 24 March 2000 to the following effect:
“DW: Do you have a relationship with PIC? Either PICs?
NP: What do you mean, how many? Oh Hong Kong it is..OK.
DW: The other one?
NP: Yes I do know the one, yes I know the one. You interviewed my exwife Regina?
DW: She was spoken to this morning.
NP: I helped her doing her HR, she was doing her masters degree so I helped her write her masters degree as a result I learnt a lot about HR and my philosophy is this is going to be a growing area, a growing market .
DW: Right.
NP: If you defer money into a trust you get a tax deduction that you don't have to pay for much later .
DW: Yep OK.
NP: That wasn't really a tax scheme, now then the offer came to go to the ATO so I mean I was really interested in going along with all of this as a business, I thought it was a fantastic business, urn then I went to the ATO. I went to the ATO and asked them the ATO view and this is all in the ATO internal memos, I was asking around, `is this thing, do we still have this position '.
DW: The position for?
NP: Oh the technical, legal position, is the way we treat the law .
DW: Righto OK.
NP: Now if this is the way we treat the law and we've done it since 1992 .
DW: Right.
NP: Then it doesn't matter if I give one, a million or sixteen million advanced opinions or rulings, to my father my brother or anybody else, because if that's how we treat the law then that is the law, as far as the ATO is concerned, so why should my brother be treated any disadvantageously, or Nick Panos or anybody else so I had no problem with that ,
NP: But I had no problem with that at all but I also understood the advantage of having them tell me information about what was going on in the market . So you know, did I get a benefit, well what benefit did I get, cup of coffee? A drink? When we met and they told me what was going on. Did I receive any cash at any point in time, was any account ever opened in my name, was any trust ever created in my benefit, was anything ever created in earth. Nothing has ever been done that I have received a red cent. If this was going to happen I wish that, you think to yourself shit at least if you have that benefit or money it would have been (inaudible) What I was afraid of covering my arse is shit and it does look like shit um yeah.” (emphasis added)DW: OK.
40 The explanation proffered by the Accused in this conversation concerning his relationship with PIC, and his role in the development of the concept, are pertinent to the present tender.
41 Also relevant to this ruling are issues considered by me in R v Petroulias (No. 1), referred to at paragraphs 18 to 20, above concerning the elements of causation and dishonest means. In particular with respect to the latter, statements of the Accused in the conversation are pertinent to questions of conflict of interest, discrimination between the schemes of the PIC group and the schemes of other promoters, concealment of the rulings being issued and deception of ATO officers as to the rulings being issued.
42 Against this background, the subject telephone conversation occurs between a promoter, Mr McLaren, and the Accused at a time when an active investigation is underway with respect to the PIC group. In the conversation, the Accused appears to be discussing with Mr McLaren a likely approach following an interview with Mr Geoff Strong, including suggestions as to what Mr McLaren should, and should not, say to investigators, including the significant suggestion that he should not mention Mr Morgan. The Accused appears to suggest other matters to Mr McLaren, including what he might say concerning Mr Panos and the provision of a copy of a disk.
43 For the purpose of a ruling as to relevance, I am satisfied that the statements of the Accused in this conversation are capable of constituting implied admissions, reflecting consciousness of guilt, with respect to the activities of the Accused with the PIC group.
44 I accept the Crown submission, for the purpose of this relevance ruling, that the conversation is capable of supporting a conclusion that, if the Accused’s dealings with the PIC group were honest and complied with ATO procedure, then it would not be necessary for him to disguise that involvement by making suggestions to Mr McLaren as to what he should say, and not say, to investigators concerning that topic.
45 I am satisfied that the conversation is relevant and admissible in the current prosecution. Accordingly, it will be necessary for me to consider the second leg of the objection, being that under s.135(a) Evidence Act 1995. I will return to this objection, which also touches the tender of conversations (d), (e) and (f), to which I will now turn.
Conversation (d) Between the Accused and Geoff Strong at 1231 Hours on 2 October 1999
46 The Crown tenders an intercepted telephone conversation between the Accused (“N”) and Mr Geoff Strong (“G”) at 1231 hours on 2 October 1999. As mentioned earlier, prior to the first trial, Sully J ruled that this conversation was not relevant and rejected its tender. The Crown tenders the conversation before me. It is necessary for me to determine whether it ought be admitted for the purpose of the forthcoming trial.
47 The conversation is in the following terms:
“N Hello.
G. NICK?
N Yes.
G It's GEOFF mate.
N GEOFF how are you sir?
G Good.
G I just had a visit from the Australian Federal
Police.
N For what?
G They asked me about the minutes of meeting in January.
G And who was present who took them.N Yeah.
N Yeah.
G All sorts of things.
N Really?
G. Yeah.
N Shit.
G So I just said look I I I can't I said I definitely had a meeting with PETROULIAS PANOS may have been there in that office at York Street …
N Yep.
G I don't recall who kept the minutes I know that there was some minutes floating around …
N Yep.
G But I don't know I didn't have them immediately to hand so they're gonna come back they've also just rang PANOS and asked him about it.
N Really?
G Yes.
N Well I mean I mean what's the big deal here we did have a meeting so who cares?
G Yeah well the problem is you know I don't think those dates were correct.
N Oh well I mean I mean you know jeez I mean dates are not always correct no way a bit ordinary.
G I don't know but I think probably I need to um I'm not on the line we need to talk about that I'm going to we're just about to go away to Noosa for a week its school holidays we're going up there tomorrow so they're gonna back they're gonna talk to PANOS as well.
N Yeah.
G They asked me who else was at the meeting I'm just wondering whether if anyone else was there whether they said …
N No just EMMANUEL.
G Yeah.
N Yeah shit why did they come and why did they come today?
G I've got no idea.
N I mean it's Saturday.
G They just showed up at my front door.
N Huh.
G They just showed up at the front door.
N Really?
G Yep.
N What with warrants and things?
G No they just wanted to ask me a few questions.
N Shit god that's getting serious.
G Yeah.
N Yep but at the end of the day there was no money given to anybody or no one did anything and at the end of the day everything was pretty ordinary just benefit trusts just like everybody else's got you know like fucking hell it's not as if you got a ruling which says you can deduct your home loan fuck .
G OK well I might talk to you through the week.
N Yeah.
G And perhaps come down to see you or do something.
N Yeah yeah.
G OK.
N But I mean OK at the end of the day though I mean it's pretty pretty clean I mean there is nothing really to worry about I mean you never gave me any money you never offered to give me any money you've got a ruling that was consistent I mean what what.
G They're investigating the minutes of this meeting and I've got you know …
N Have you got have you got those minutes?
G I'd have them somewhere I just couldn't I tried to find them quickly.
N Yeah.
G How would they have a copy anyway they'd be on the ATO file?
N Well the ATO had a copy.
G Yeah.
N So they would have got it from the ATO?
G Yeah.
N Boy that's pretty strange.
G You might like to think about it I'll give you a call through the week and if we need to get together I'll come down and have a chat.
N Fine.
G OK.
N OK mate.
N Thanks bye.”G Good on you.
Submissions
48 The Crown submits that this conversation (and conversations (e) and (f)) are relevant and admissible for the purposes of ss.55 and 56 Evidence Act 1995. It is part of the Crown case that the Accused is alleged to have fabricated a document entitled “Memorandum of Understanding re the ATO Attitude Towards the Taxation Treatment of Incentive Structures”. This (closely typed nine-and-a-quarter page) document purports to be minutes of a meeting said to have been held on 28 and 29 January 1998 attended by the Accused and Mr Emmanuel Aivaliotes (representing the ATO), Mr Geoff Strong (representing PIC) and Mr Nick Panos (of Coleman & Greig, Solicitors). It is the Crown case that the Accused created the Memorandum of Understanding as part of his concealment in the ATO of his involvement in the PIC group.
49 The Crown submits that Mr Aivaliotes gave evidence at the first trial (T882) that he did not recall that any such meeting took place and was able to account for the few occasions when he met either Mr Strong or Mr Panos.
50 The Crown submits that the Memorandum of Understanding first came to light when Mr Gregory Farr (then the First Assistant Commissioner in charge of Corporate Services) and Mr Stephen Brown (then a Senior Investigator in the Fraud Prevention and Control Unit) were investigating complaints from the public concerning the actions of the Accused and a meeting took place, at the Accused’s Sydney ATO office, on 9 November 1998. In the context of explaining his actions in issuing favourable rulings, the Accused produced a white folder containing a number of documents, including the Memorandum of Understanding (Farr - T1693; Brown - T1722). The Crown submits that the clear inference arising from the production of the document to Mr Farr and Mr Brown is that the Accused represented that there was an accord reached with PIC, at arm’s length, as a result of the Accused being persuaded during the meeting that the PIC schemes were bona fide.
51 In submitting that the present conversation is relevant, the Crown points to the account given by the Accused to Federal Agent Wildman in his interview on 24 March 2000 to the effect that he came across the idea which became PIC, when helping his wife with her master’s degree in human resources and thought that it was a “fantastic business” (see extract at paragraph 39 above).
52 The Crown submits that the subsequent investigation by the Australian Federal Police revealed a non-formatted version of the Memorandum of Understanding document on the hard-disk drive of the Accused located in a storage facility in Fitzroy, Melbourne, leased by him in the name of Christopher Marriott. Details extracted from the computer indicated that the document was created on 19 May 1998, four months after the purported meeting to which the Memorandum of Understanding relates. The Crown acknowledged that expert opinion left open the possibility that the document could have been loaded onto the computer on 19 May 1998 from another source (PT589, 2006). The Crown submitted, however, that the non-formatted version on the hard-disk drive was quite disjointed and had the appearance of a draft and not a simple copying of a pre-existing document (PT606, 2006).
53 Also extracted from the hard-disk drive of the same computer were other documents headed “The Mechanics of the Productivity Incentive Plan”, “Boosting Productivity Through Employee Reward and Ownership Plans”, “Explanatory Memorandum - The Productivity Incentive Trust Plan” and “The Tax Benefits of the Productivity Incentive Trust Plan”. A glossy brochure used for the marketing of PIC products included portions of the text from various parts of these documents (Exhibit C160 at first trial).
54 The Crown submits that a comparison between the contents of these documents, particularly the brochure, and the Memorandum of Understanding in the form of minutes of the alleged meeting on 28 and 29 January 1998, reveals the artificiality of the document in that much of the Memorandum of Understanding is made up of a “cut and paste” of verbatim extracts from the documents found on the computer of the Accused. The Crown alleges that the conclusion from this evidence is that the document is a fabrication, and part of the strategy of the Accused to conceal his involvement with the PIC group and to cover his tracks in relation to his role in issuing the favourable rulings for the PIC schemes.
55 It is the Crown case that the minutes contained within the Memorandum of Understanding are fabricated. The Crown submits that a farcical scenario is suggested by the minutes whereby the PIC scheme, of which the Accused was the creator and of which he had detailed existing knowledge, was explained to him in detail by Mr Strong and Mr Panos, being persons with less knowledge of the PIC scheme than the Accused.
56 The Crown points to a number of items of evidence, none of which (on their own) are decisive on the question, in support of an argument that the present conversation is relevant and admissible in accordance with the test in s.55 Evidence Act 1995. The Crown submits that inferences adverse to the Accused are available, in this respect, from the location of the draft Memorandum of Understanding, in a different order to that contained in the final document, in the Accused’s hard-disk drive in Melbourne, located in a storage facility leased by him in a false name.
57 The Crown submits that an inference adverse to the Accused may be drawn from the similarity between the contents of the Memorandum of Understanding and the brochure prepared with respect to the PIC scheme which was in the possession of the Accused. An inference adverse to the Accused is fortified, the Crown submits, by the circumstances in which the Accused produced the Memorandum of Understanding to Mr Farr and Mr Brown on 9 November 1998.
58 Mr Sutherland SC submits that I should reach the same conclusion as Sully J and hold that conversation (d) is irrelevant and inadmissible. He acknowledged that Sully J had observed, with respect to the Memorandum of Understanding, that “there is, to my eye, something odd about ‘the document’” (Judgment, 14 April 2005, page 28). However, his Honour stated that the issue of admissibility did not turn upon the form and contents of the document, but turned rather “on the capacity of the telephone conversation to bolster a Crown case that there was never such a meeting” as recorded in the Memorandum of Understanding (page 28). His Honour concluded with respect to the present conversation (pages 28-29):
- “I do not see, as at present advised, how the conversation assists that aspect of the Crown case. The most that can be gleaned from the conversation is that Mr Strong is apprehensive that the two given dates are incorrect; and that he has, as matters then stand, no means of clarifying the fact.
- I cannot see anything in the reported material that should be thought reasonably to constitute an admission, whether express or implied, by the accused that the meeting did not in fact take place, and that the document, Exhibit C-2, is simply a charade designed to camouflage some relevant impropriety.
- In my opinion evidence of this conversation is irrelevant and is, therefore, inadmissible.”
59 Although acknowledging that I am not bound by the judgment of Sully J, Mr Sutherland SC submits that his Honour’s conclusion was correct and that I should reach the same conclusion on the present application. He submits that the critical question, as identified by Sully J, was whether or not there ever was a meeting of the kind reflected in the Memorandum of Understanding. To the extent that the Crown seeks to establish that the meeting did not occur, because of the suggested inference that the document was created at some time after the events which it purports to record, it was submitted that the telephone conversation did not advance such an argument. Mr Sutherland SC submits that the conversation contains no admission of the document being a fabrication and that the discussion appears to relate to whether the dates of the meeting were correct, not whether a meeting took place at all.
60 Mr Sutherland SC submits that the location of the non-formatted version on the Accused’s hard-disk drive did not assist the Crown on the tender. The evidence did not demonstrate that the non-formatted version was first created on 19 May 1998. It was open to conclude that, although it was loaded onto the Accused’s computer on that date, it had been created well before that date. Further, Mr Sutherland SC submits that there is nothing sinister in the fact that the comments attributed to Mr Strong in the minutes appear to follow closely the content of the PIC brochure - it is to be expected that information of that type would be the source for Mr Strong’s presentation at the meeting.
61 Mr Sutherland SC submits that the conversation does not advance the Crown case at all and is not relevant. In the event that the Court ruled that the conversation was relevant, Mr Sutherland SC advanced a further submission that it should be rejected, in any event, under s.135(a) Evidence Act 1995.
Decision
62 I will firstly consider the issue of relevance concerning this conversation. In the event that I hold that it is relevant, I will return later in this judgment to the s.135(a) Evidence Act 1995 objection, which also affects conversation (c) and, if held to be relevant, conversations (e) and (f).
63 As I understand the Crown submission, this conversation is said to be relevant to the question not just whether a meeting occurred at some time between various persons, but whether a meeting took place attended by the nominated persons on the nominated dates at which discussion took place as attributed to various speakers in the alleged minutes contained within the Memorandum of Understanding.
64 It is against that background that the conversation between Mr Strong and the Accused of 2 October 1999 is tendered. Mr Strong rings the Accused to inform him that he had just had a visit from the Australian Federal Police who had enquired about minutes of the meeting and the identity of the person who was present and took them.
65 An examination of the conversation suggests a level of agitation on the Accused’s part with respect to this investigation of the minutes. It is true that the Accused, at one point, says “what’s the big deal here we did have a meeting so who cares”. There is then discussion as to whether the dates were correct. Again, comments by the Accused reflect a level of agitation or concern on his part that an investigation is on foot directed to the minutes of the alleged meeting.
66 I am satisfied that the Accused’s statements in this conversation are at least capable of supporting an inference that the alleged minutes of the meeting were a suspect document and that the fact that an investigation was on foot with respect to them was a cause for concern to the Accused.
67 This reaction of the Accused related to a document about which Sully J observed that there was “something odd”. For the purpose of this ruling, I agree with his Honour’s characterisation of the document. The document has the flavour of a document created after the event. The alleged minutes do not nominate the venue of the meeting or its starting and finishing times. Further, given the facts otherwise known concerning the Accused’s existing detailed knowledge of PIC schemes, there is a strong element of artificiality in the minutes which allege that a detailed and protracted explanation was provided to the Accused, over two days, with respect to information already well known to him.
68 I have come to a different conclusion to Sully J concerning the relevance of the conversation which is presently tendered. I have reached that conclusion only after undertaking my own independent assessment of the material relied upon and the submissions, and after giving careful and significant weight to his Honour’s earlier conclusion. I am satisfied that the statements of the Accused in this conversation are capable of constituting admissions against interest on facts in issue in the proceedings and are capable of reflecting consciousness of guilt on his part concerning the genuineness of the alleged minutes contained in the Memorandum of Understanding.
69 A significant factor in reaching this conclusion is the prima facie unrealistic scenario that, on 28 and 29 January 1998, Mr Strong and Mr Panos would explain in a meeting with the Accused, in considerable detail, the PIC scheme. The fact that the evidence of Mr Aivaliotes is that he has no recollection of such a meeting is also supportive of the admission of this evidence.
70 I am satisfied that this conversation is relevant and admissible for the purposes of ss.55 and 56 Evidence Act 1995. Accordingly, it will be necessary to consider the objection under s.135(a) Evidence Act 1995, a topic to which I will return later in this judgment.
Conversation (e) Between the Accused and Nick Panos at 1807 Hours on 3 October 1999
71 The Crown tenders an intercepted telephone conversation between the Accused (“NP”) and Mr Panos (“N”) at 1807 hours on 3 October 1999. Before the first trial, Sully J ruled that this conversation was irrelevant and inadmissible. The Crown tenders it before me for the purposes of the second trial.
72 The conversation in question was as follows:
“NP Hello.
N Hello.
NP Yeah NICK.
N Hello.
NP Hello NICK.
N Hallo hold on a sec Hallo.
NP Yeah NICK it's NICK PETROULIAS.
N Oh how are going mate how are you?
NP Good good you're responded to the missed call did you?
N What was that -
NP You responded to the missed call on the phone?
N That's right yes.
NP Yeah OK listen I made some inquiries about in the those people that turned up at GEOFF'S house.
N Right.
NP And it was an isolated thing that they're that they're investigating which is just ... they're just looking at whether those minutes were real I guess.
N Alright.
NP They're just looking they're just looking at the issue of they just issued looking at the issue of the meeting that's it.
N Right OK yeah that's right.
NP And that's why I think that's what explains the fact that it was on Saturday.
N Right.
NP Like some some cop thinking oh what the fuck you know I've got to look at the stupid book piece of crap you know it's not just you know it's not that the whole thing has gone off there.
N Right.
NP So it's it's it's just that issue that only …
N So …
NP So in a way it means you know …
N Yeah that's right mate it's you know.
NP Well there's nothing to worry about there never was but I mean there isn't anything to worry about I mean there isn't anything in substance.
N Exactly I mean …
NP But anyway that-that-that that you know it's just unpleasant.
N Yeah all ... that's fine mate no worries.
NP Yeah and I was afraid of you know political motivation.
N Yeah yeah then no it's fine not a problem at all well Geoff saw them so they'll probably want to speak to me too.
NP Ok that's fine.
N So yeah whatever.
NP Yeah.
N No worries OK mate.
N Bye.”NP All right I'll see ya.
Submissions
73 In support of the tender of this conversation, the Crown advances the same submissions as relied upon with respect to conversation (d). Mr Sutherland SC advanced the same submissions, resisting the tender, as were made with respect to conversation (d).
Decision
74 In rejecting the tender of this conversation, Sully J observed that the conversation was in the same position as conversation (d) and was irrelevant and inadmissible (page 29).
75 In ruling on the tender of this conversation, I repeat the reasons expressed at paragraphs 63 to 69 concerning conversation (d). The conversation takes place a day after the Accused and Mr Strong had discussed the visit to Mr Strong by investigators enquiring about the minutes of the alleged meeting. The Accused informs Mr Panos that he has learned that police were “just looking at whether those minutes were real” and were “looking at the issue of the meeting”. The transcript of the conversation suggests that there is some agitation on the part of the Accused during the conversation, and he suggests to Mr Panos that “there’s nothing to worry about there never was” and “I mean there isn’t anything in substance”.
76 In my view, an inference adverse to the Accused is open from this conversation. He is discussing with Mr Panos the fact that an investigation is under way with respect to the genuineness of the minutes, a topic which arguably would not be of concern to the Accused unless there was a basis for concern about the genuineness of the minutes. The fact that, at one point in the conversation, the Accused makes the statement which is inconsistent with this available inference is not, in my view, a basis for holding that the conversation is irrelevant and inadmissible.
77 I am satisfied that this conversation is relevant and admissible for the purposes of ss.55 and 56 Evidence Act 1995. In these circumstances, it will be necessary to consider the objection under s.135 Evidence Act 1995, a topic to which I will return later in this judgment.
Conversation (f) Between the Accused and Geoff Strong at 1104 Hours on 4 October 1999
78 The Crown tenders the intercepted telephone conversation between the Accused (“N”) and Mr Strong (“G”) at 1104 hours on 4 October 1999. Sully J rejected the tender of this conversation before the trial upon the basis that it was irrelevant and inadmissible. The Crown tenders the conversation again for the purpose of the trial to take place before me.
79 The conversation is in the following terms:
“N Hello.
G NICK GEOFF STRONG.
N GEOFF how are you you're in Brisbane?
G Yeah yeah.
N Yeah oh you rang me late last night didn't you?
G Yes I did sorry we're off the road.
N OK.
G I was returning your call.
N Yeah I was returning your call just to say to you I found out a bit more about it I rang GREG FARR from the ATO.
G Yeah.
N And he's saying to me that that part was closed off that aspect of the rule that's the one self contained area the DPP wanted the feds to look at.
G In what way though why?
N I don't know what it will be the charges would possibly be falsifying Commonwealth documents I guess because that's what they've mentioned before which means that those documents are false and not real that meeting never happened and that record thing that record of the thing never happened and then they'll …
G I'm prepared to say that the meeting happened the dates don't gel with my diary.
N Well I don't know I don't know where your diary is and if it exists or not but the point is um the sorry my point is that it's just well that's that's the only basis and um the reason why I think they left it for Saturday morning it's because it's a crappy job that nobody wanted to do.
G They're only young guys that came out.
N Yeah.
G They'd probably be in their you know wouldn't be in their thirties their late twenties.
N Yeah I think they were just interested in just one of those crappy jobs that someone had to do and I mean what are they yeah the only charges that they can claim is yeah that it didn't happen.
G Yeah.
N And that I falsified that document.
G Yeah.
N And that would be an offence in itself it did happen and obviously you've got the record there.
G Yeah.
N I mean you know.
G Well OK they're gonna come back to me sometime next week they also asked NICK PANOS.
N Yeah.
G Because they said to me who was at the meeting and I said look I didn't I can't find ... I definitely had a meeting with NICK PETROULLAS [sic] which I did and I think PANOS was there which he was and there may have been-someone from the ATO but I just can't remember without looking at the document.
N Yeah no it was EMMANUEL yeah the other thing is you did you did you did the minutes and the minutes aren't that exciting all they are is at the beginning the whole spiel which is essentially the brochure you know that brochure?
G Yeah.
N You know that brochure you ... them while they're good it's all that still and then there's that bit at the end about how they want to work together with the ATO.
G Yeah.
N You've got you've got you've got all that haven't you?
G I've got it yeah I just got to find it I had a big clean out I'm not exactly sure where it is but I will find it.
N OK.
N Alright GEOFF ... thank you mate.G Yeah.
N Bye.”
G I'll talk to you later bye.
80 Sully J rejected the tender of this conversation, concluding that it was irrelevant and inadmissible for the same reasons as applied to conversation (d) (page 29).
Submissions
81 In support of the tender, the Crown relies upon the same submissions as made with respect to conversations (d) and (e). Mr Sutherland SC makes the same submissions in opposition to the tender of the conversation.
Decision
82 In ruling with respect to this conversation, I repeat the reasons set out at paragraphs 63 to 69 above concerning conversation (d).
83 The present conversation occurs two days after a conversation between the Accused and Mr Strong with respect to the same subject matter. In the present conversation, the Accused explains to Mr Strong that he has obtained information about the investigation which involved investigators considering that “those documents are false and not real that meeting never happened and that record thing that record of the thing never happened”. Mr Strong responds “I’m prepared to say that the meeting happened the dates don’t gel with my diary”.
84 In the course of the discussion, the Accused states that a meeting took place and says to Mr Panos “the other thing is you did you did you did the minutes and the minutes aren’t that exciting all they are is at the beginning the whole spiel which is essentially the brochure you know that brochure … and then there’s that bit at the end about how they want to work together with the ATO”.
85 The Accused then says to Mr Panos “You’ve got you’ve got you’ve got all that haven’t you” to which Mr Strong replies “I’ve got it yeah I just got to find it I had a big clean out I’m not exactly sure where it is but I’ll find it”.
86 For the purpose of this ruling, I am satisfied that an inference adverse to the Accused is open from the discussion concerning the minutes of the meeting involving, at one point, the Accused telling Mr Strong that he (Strong) had done the minutes. The very fact that the topic was being discussed, with apparent concern on the Accused’s part about the accuracy of the dates and the identity of the author of the minutes, is capable of constituting an admission against the Accused’s interest relevant to facts in issue.
87 Accordingly, I am satisfied that this conversation is relevant and admissible for the purposes of ss.55 and 56 Evidence Act 1995. It is now necessary to turn to the second basis for objection under s.135(a) Evidence Act 1995.
Submissions
Objection Under s.135(a) Evidence Act 1995
88 Mr Sutherland SC objects to the tender of conversations (c), (d), (e) and (f) upon the basis that, even if their contents are relevant, the probative value of the conversations is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the Accused: s.135(a) Evidence Act 1995.
89 In support of this submission, Mr Sutherland SC submits that unfairness will flow from the decision of the Crown not to call Mr McLaren, Mr Panos or Mr Strong in the Crown case at the trial. Mr Sutherland SC submits that the Crown is in possession of statements signed by Mr Panos and Mr Strong in which they assert that the meeting referred to in the Memorandum of Understanding did, in fact, take place. He submits that the Crown proposes, however, to invite the jury to draw an inference from these telephone conversations (and other evidence) that no such meeting took place.
90 Mr Sutherland SC submits that this is unfairly prejudicial for the purposes of s.135(a) of the Act, in circumstances where the Crown holds statements to the contrary effect from Mr Panos and Mr Strong and declined to call them as witnesses in the prosecution case at the trial.
91 In support of his s.135(a) Evidence Act 1995 submission, Mr Sutherland SC points to authorities which have concluded that unfair prejudice, for the purpose of s.135(a), may arise where evidence is tendered against a party who could not contest it: Commonwealth of Australia v McLean (1996) 41 NSWLR 389 at 401; Gordon (Bankrupt), Official Trustee in Bankruptcy v Pike (No. 1) (Federal Court of Australia, Beaumont J, 1 September 1995). He submits that, in circumstances where the critical issue is whether a meeting took place at which Mr Panos and Mr Strong were present, the clear intention of the Crown to not call those persons as witnesses (where they had said in statements that a meeting had occurred) would militate in favour of an exercise of discretion to exclude evidence of conversations from which a contrary inference will be sought to be drawn. Mr Sutherland SC points also to the evidence of Mr Aivaliotes of having no recollection of attending a meeting with the Accused and a representative of PIC. He submits that, in the light of the evidence of Mr Aivaliotes and the Crown decision not to call either Mr Panos or Mr Strong, it would be unfair to admit the conversations.
92 Mr Sutherland SC submits that similar, but not identical, considerations apply with respect to Mr McLaren. Although Mr McLaren was not said to have been present at the alleged meeting on 28 and 29 January 1998, the Crown says that he was a promoter involved with the Accused in sinister activities, which the Crown wishes to demonstrate by the tender of conversation (c). It was submitted that such an approach was unfairly prejudicial where the Crown declines to call Mr McLaren as a prosecution witness at the trial.
93 The Crown submits that there is no basis for excluding the evidence of these conversations under s.135 Evidence Act 1995. The Crown proposes to rely upon the statements by the Accused in these conversations as admissions reflecting consciousness of guilt (in various ways) on his behalf. The fact that the Crown declines to call Mr Strong, Mr Panos and Mr McLaren as Crown witnesses at the trial, it was submitted, is not relevant to the admissibility of the telephone conversations containing admissions by the Accused which, in some cases, take the form of responses to things said by the other participant in the conversation (PT591.31, 2006).
94 I was informed by the Crown that I can approach this ruling on the basis that it is the Crown’s intention not to call Mr Panos, Mr Strong and Mr McLaren at the forthcoming trial (PT607.56, 2006).
Decision
95 It is appropriate, at this point, to refer to an argument advanced by the Accused as a ground for a permanent stay of the indictment for abuse of process, in R v Petroulias (No. 1) at [287]-[302]. The Accused submitted that he was entitled to a permanent stay of the proceedings because of the failure of the Crown to call a number of witnesses at the first trial, principally Mr Panos and Mr Strong. In the course of that argument, I was informed that the Crown had determined not to call Mr Panos and Mr Strong as Crown witnesses because of the telephone conversations with the Accused which are conversations (d), (e) and (f) on the present application. In my judgment R v Petroulias (No. 1), I said at [292]-[296], [300]:
“292 I was informed by the Crown that Mr Panos and Mr Strong were not called as Crown witnesses because of the existence of evidence obtained by telephone intercepts of collusion with them by the Accused in relation to providing false explanations to any police officer who should approach them about the matter. In support of this submission, I was provided with copies of transcripts of telephone conversations between the Accused and Mr Strong on 2 and 4 October 1999 and between the Accused and Mr Panos on 3 October 1999. These transcripts were Exhibit D1 on the voir dire with respect to Pre-Trial Application No. 3 determined by Sully J on 14 April 2005. His Honour declined to admit the transcripts as evidence in the trial on relevance grounds. In my view, the transcripts disclose discussions between the Accused, Mr Strong and Mr Panos which may be characterised in the manner described in the Crown submission.
293 It was submitted for the Accused before me that the proposition put by the Crown that the telephone intercepts established a basis for not calling Mr Panos and Mr Strong was effectively rejected by Sully J when he ruled on the admissibility of the particular intercepts on 14 April 2005. I do not accept this submission. His Honour ruled that the transcripts were not admissible in the trial of the Accused, applying the relevance test in s.55 Evidence Act 1995. His Honour did not determine that there was an absence of collusion between the Accused, Mr Panos and Mr Strong for the purpose of devising answers to questions to be asked of them by police. The transcripts tend to support that description.
294 I was further informed by the Crown that Mr Panos and Mr Strong did not respond to written requests that they attend for a conference with the Crown representatives. In these circumstances, the Crown concluded that they would not be called in the Crown case at trial. This was the approach foreshadowed in February 2005 to Sully J.
295 The Crown submitted that the question whether Mr Panos and Mr Strong ought be called in the Crown case involved the exercise of prosecutorial discretion. In accordance with the procedures proposed in R v Kneebone [(1999) 47 NSWLR 450] at 460-461 [49]-[52], 462 [60]-[61], the Crown had invited these two persons to attend for a conference to allow an assessment to be made of their veracity and independence. Both persons declined to attend such a conference. Having regard to the information available to the Crown concerning their collusion with the Accused during the investigation, it was determined that they not be called in the Crown case.
296 The Crown submits that it was open to the Accused to call Mr Panos and Mr Strong in his case. Both persons are solicitors and, the Crown submitted, would no doubt be capable of giving coherent evidence in chief so that there was no prejudice by reason of the Accused not being able to cross-examine them. It may be taken, the Crown submitted, that Mr Panos and Mr Strong were articulate and intelligent persons. In these circumstances, there was no unfairness to the Accused.
300 I am not satisfied that the Crown’s failure to call Mr Panos and Mr Strong constituted a breach of the prosecutor’s duty to call all material witnesses. The Crown sought to confer with these witnesses in accordance with the practice referred to in R v Kneebone . It may readily be inferred that Mr Panos and Mr Strong were unwilling to attend a conference with the Crown representatives. Their telephone conversations with the Accused in October 1999 were such as to support a view that they were not at arm’s length from the Accused. There is nothing to indicate that these persons were not available to be called by the Accused in his case at the trial if he so wished. I see no basis for the grant of a stay arising from the Crown’s failure to call Mr Panos and Mr Strong at the first trial.”…
96 Although I was dealing with an application made for a different purpose, the observations made concerning the Crown’s approach to the calling of Mr Panos and Mr Strong are presently relevant.
97 Sully J’s rulings, on 14 April 2005, excluding conversations (d), (e) and (f), were confined solely to the relevance ground. The application of s.135 Evidence Act 1995 played no part in his Honour’s reasoning.
98 In approaching the s.135(a) objection, it is appropriate to keep in mind that the Crown tenders these conversations as admissions by the Accused. The fact that the statements of the Accused were made in the course of conversations with Mr McLaren, Mr Strong and Mr Panos does not mean that, in some way, the Crown is seeking to adduce evidence from those three persons.
99 As I observed in my judgment in R v Petroulias (No. 1) at [296], it is open, in any event, to the Accused to call these persons in his case if he so wishes. I do not consider that the fact that the Crown is said to have statements from Mr Panos and Mr Strong which assert that a meeting took place creates a situation of unfair prejudice with respect to the tender of the conversations, let alone unfair prejudice that substantially outweighs the probative value of the admissions made by the Accused during the conversations.
100 The conversations will be admitted to establish, expressly and by implication, admissions against interest by the Accused which, the Crown contends, are indicative of consciousness of guilt.
101 I do not consider that the circumstance of the Crown declining to call Mr McLaren, Mr Panos or Mr Strong as prosecution witnesses or to, in some way, seek to place before the jury the statements of Mr Panos and Mr Strong concerning the alleged meeting, establishes a basis for the exercise of the s.135(a) discretion.
102 There is a further matter which bears upon the issue of unfair prejudice. Some comments made by Mr Panos and Mr Strong in the conversations are open to a construction that a meeting did take place, albeit with queries as to the date or dates of the meeting. As Mr Sutherland SC acknowledged, there was a “two-edged sword aspect” to his submission on this point (PT602, 2006). I mention this because it is difficult to see how the failure of the Crown to call Mr Panos and Mr Strong gives rise to unfair prejudice to the Accused when, to some extent at least, some things said by them in these conversations may assist the Accused. As I have said, it remains open to the Accused to call these persons at the trial if he sees fit.
103 I am not satisfied that the probative value of conversations (c), (d), (e) and (f) is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the Accused resulting from the fact that the Crown does not propose to call Mr McLaren, Mr Panos or Mr Strong at the trial.
Conclusion
104 Accordingly, I am satisfied that each of the six conversations which are tendered by the Crown are relevant and admissible for the purposes of ss.55 and 56 Evidence Act 1995, and that no basis has been demonstrated for the exercise of discretion to exclude any of the conversations under s.135(a) of that Act.
105 I propose that each of the six conversations will be admitted into evidence at the trial.
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