R v Agius; R v Castagna (No 8)

[2018] NSWSC 2040

Supreme Court

New South Wales

Medium Neutral Citation:	R v Agius; R v Castagna (No 8) [2018] NSWSC 2040
Hearing dates:	21 February 2018
Date of orders:	22 February 2018
Decision date:	22 February 2018
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	Application to discharge jury refused.
Catchwords:	CRIMINAL LAW – application to discharge jury following conclusion of Crown opening – nature and purpose of Crown opening – significance of complexity of trial and documents tendered during opening
Legislation Cited:	Criminal Procedure Act 1986 (NSW) s 159 Evidence Act 1995 (NSW) ss 135, 136, 137
Cases Cited:	Agius v The Queen (2013) 248 CLR 601; [2013] HCA 27 Edwards v The Queen (1993) 178 CLR 193; [1993] HCA 63 R v Cianatar (2006) 16 VR 26; [2006] VSCA 263 R v MM [2004] NSWCCA 81; 145 A Crim R 148 R v Xie (No. 14) [2014] NSWSC 1979
Category:	Procedural and other rulings
Parties:	Regina Robert Francis Agius (Accused) Anthony Dante Castagna (Accused)
Representation:	Counsel: P McGuire SC/A McGrath (Crown) WP Lowe (Accused Agius) P Strickland SC/S White SC/S Callan (Accused Castagna)   Solicitors: Commonwealth Director of Public Prosecutions (Crown) David J Cohen & Co (Accused Agius) Hazan Hollander Lawyers (Accused Castagna)
File Number(s):	2016/136935; 2016/137095

Judgment

Introduction

1. The trial by jury of Mr Agius and Dr Castagna commenced on 19 February 2018. They stand charged on indictment with three offences of conspiracy. Counts 1 and 2 relate to an alleged conspiracy to defraud the Commonwealth. The two counts are based on a single agreement but the counts are required to be charged separately to reflect the amendment to the legislation which came into effect on 24 May 2001: Agius v The Queen (2013) 248 CLR 601; [2013] HCA 27. The third joint count, count 13, charges, in substance, that they conspired with each other to deal with the proceeds of crime. Dr Castagna is charged with 10 other counts, counts 3-12 inclusive on the indictment, which charge that he dishonestly obtained a financial advantage by failing to disclose all income derived by him in the 10 financial years from the financial year ending 30 June 1999 to 30 June 2008. These ten separate counts are charged in the alternative to counts 1 and 2.

2. The Crown case is substantially documentary. It principally comprises two lever-arch files of documents which were tendered without objection or limitation and marked Exhibit B. It also includes a “Who’s Who” (marked Exhibit A), which contains not only the name of individuals and companies but also salient matters about each entry and other summary documents which will be referred to in more detail below.

3. The Crown opening commenced on 19 February 2018 and concluded at 1pm on 21 February 2018. In the course of the opening, the Crown took the jury through many documents in Exhibit B. No objection was taken to any portion of the opening until its conclusion. Nothing was raised with the Crown Prosecutor by either accused counsel in the course of the opening.

4. At the conclusion of the Crown opening, counsel for each of the accused applied for the jury to be discharged on the ground that the Crown opening, taken as a whole, had been so prejudicial to the accused as to deprive the accused of a fair trial.

The bases for the application

5. Mr Strickland SC, who appeared with Mr White SC and Ms Callan for the accused Castagna, submitted that the jury should be discharged on the basis of the following:

1. The Crown in its opening made, in effect, what amounted to a closing address in respect of what ought be inferred from certain items of evidence (details of which will be set out below); and

2. What the Crown said in opening about the reluctance of the accused to speak on the telephone as was revealed in transcripts of telephone intercepts was impermissible.

6. Mr Lowe, who appeared for the accused Agius, adopted Mr Strickland’s submissions and relied on what he submitted was a further instance of (1) above: statements made by the Crown to the effect that the accused Agius “controlled” certain companies.

7. Although (1) and (2) above were relied on cumulatively, I propose to deal with them in turn before considering the overall effect of the Crown’s opening.

8. Mr Strickland relied on what Howie J said in the following passage from R v MM [2004] NSWCCA 81; 145 A Crim R 148 as an accurate statement of the bounds of a Crown opening:

“[155] Although leave is not required for defence counsel to give an opening address to the jury under s 159, defence counsel should similarly not abuse the right given under the section by embarking upon arguments and submissions that are only appropriately made in closing address. As an opening address by the Crown should not contain any argument or submission to the jury as to the validity of its case, so the “matters disclosed in the prosecutor’s address” referred to in the section, cannot be arguments or submissions arising from the nature of the evidence to be called by the Crown. Nor should “matters to be raised by the accused person” be taken to include defence arguments and submissions based upon the Crown evidence or evidence which may be called in the defence case.”

[Emphasis added.]

9. Mr Strickland accepted that the statement was obiter since the appeal in that case turned on what the defence had said in opening. Mr Strickland submitted that the Crown had made submissions to the jury in the passages which I will either refer to or set out below and that the cumulative effect of its opening was to take illegitimate advantage of the opportunity of opening. He submitted that the effect was prejudicial because it would, or might, cause the jury to view the evidence through the persuasive lens created by the Crown in its opening. He contended that the effect of the Crown opening was to taint the jury’s mind from the outset and require an explanation from the defence counsel in their opening pursuant to s 159 of the Criminal Procedure Act 1986 (NSW) in circumstances where they ought not be required to give such an explanation.

10. Further, Mr Strickland submitted that the Crown ought not to have referred to the use that could potentially be made of the evidence in the telephone intercepts in which the accused expressed reluctance to speak on the phone. Mr Strickland contended that the importance of conduct amounting to a consciousness of guilt was such that there ought not to have been any reference to any inference which could be drawn from those remarks in the telephone intercepts. He submitted that the prejudice occasioned could not be cured and that a discharge ought be ordered.

Consideration

The purpose and limits of a Crown opening address

11. The purpose and function of the opening address by the Crown in a jury trial is to provide the jury with a brief statement of the nature of the charge or charges and a brief outline of the Crown case by reference to witnesses the Crown intends to call and the evidence it is expected particular witnesses will give; as well as documents to be tendered. The Crown should generally not open on evidence the admissibility of which has not yet been determined but to which objection has been foreshadowed.

12. The Crown opening address, unlike a closing address, is not designed to persuade, but rather to assist, the jury in following the Crown case and appreciating the context in which evidence is to be led and its relevance to the charges. The content of a Crown opening will inevitably depend on the nature of the charges and the evidence to be adduced by the Crown, or adduced by the Crown in opening, in support of its case.

13. In the present case, as referred to above, there was no objection to any part of Exhibit B. Exhibit A was admitted by consent and without objection. I take from the fact that it was consented to that the facts stated therein are not controversial. For example the entry for “International Finance Trust Company Ltd” reads:

“A company incorporated in Vanuatu. Robert Agius was a director and also its chairman. The company’s two shareholders were Astrolabe Ltd and Astrolabe Nominees Ltd. It had bank accounts with the ANZ Bank in New Zealand. Robert Agius was an authorised signatory to these accounts. The company also had bank accounts in Vanuatu.”

14. The other agreed summary documents which the Crown tendered in opening were:

1. A summary of the accused Castagna’s income tax returns (Exhibit C);

2. A schedule of traceable payments from Macquarie Bank to Billbury 1999-2008 (Exhibit D);

3. Two charts showing the flow of funds from Macquarie Bank to Billbury and to other companies and, eventually, to bank accounts in the names of the two accused (Exhibit E);

4. A schedule of traceable payments from the accused Agius’ and Bergius Pty Ltd’s accounts to the accused Castagna’s accounts (Exhibit F).

15. Accordingly, it was open to the Crown to refer to any part of this considerable body of evidence in the opening since it was all admitted without objection (in the case of Exhibit B) or without objection and by consent (in the case of Exhibits A, C, D, E and F). Indeed, had the Crown not drawn the jury’s attention to certain documents the jury may have been required to wait until closing address to appreciate their potential significance. Further, as a matter of fairness to the accused, it was incumbent on the Crown to elucidate the relevance of significant documents to the counts in the indictment. Although it is conventional for the Crown to cast the opening address in terms of the evidence which it “expects” or “anticipates” will be given by particular witnesses, there is no need for or utility in such verbs where the evidence is documentary and has already, at an early stage of the opening, been admitted without objection.

16. While the Crown ought not endeavour to persuade the jury of the Crown case in the course of an opening, it is a significant aspect of natural justice to the accused that the Crown make clear in its opening what evidence is to be relied on and why. While these matters may be so obvious as not to require elucidation in an opening when the charge is, for example, murder, where there is no issue that the accused killed the deceased, the position is different when the charges are, as in the present case, numerous and involve an analysis of relatively complex transactions. In a case such as the present, the relevance of particular documents ought be explained in a way that enables the jury and the accused to understand how each relates to the particular charges on the indictment. This is not to suggest that the Crown opening is a substitute for the Crown Case Statement or that it ought contain the level of detail which is contained in such a statement. However, it can be no criticism of a Crown opening that the Crown prosecutor takes the jury to particular documents and explains their significance. Indeed, this is an integral part of a useful Crown opening. In R v Xie (No. 14) [2014] NSWSC 1979 (a murder trial of some complexity), Johnson J said, in the context of an application on behalf of the accused to a discharge:

“[18] . . . [T]he complexity of a trial such as this requires some articulation of the matters advanced by the Crown by reference to the evidence expected to be given, and the way in which the jury is being invited to view this material if the evidence emerges in this way.”

The instances relied upon as going beyond the boundaries of a Crown opening

17. As referred to above, Mr Strickland relied on several instances, the cumulative effect of which was said to warrant a discharge of the jury. I shall deal with them in turn.

Non-disclosure of source of fees

18. The Crown, in its opening, referred to what the accused Castagna told his accountants and, importantly, what he did not tell them. He said, of present relevance:

“I am going to take you in just a moment to some of those documents. Before showing you the documents can I tell you that each year for the relevant years he described his income in very modest terms, that is eight and a half odd thousand multiplied by 12 seems to be about the figure that he tells his accountant each year was his year. When you see the document each year he describes them as ‘income from advisory fees’. Not once in these documents he sends them does he mention anything about this being a commission from Macquarie Bank and not once does he mention Billbury or the substantial portion of the Billbury consultancy fees that went off overseas.”

[Emphasis added.]

19. Exception was taken by Mr Strickland to the words highlighted in the passage above. It was not suggested that there was any mention in the documents referred to by the Crown of a commission from Macquarie Bank or Billbury or the overseas transactions. It was said that the Crown had engaged in persuasion by his use of the rhetoric, “not once”, which was repeated in the sentence.

20. That a Crown opening must be fair does not require it to be bland. Even prosecutors are allowed some margin for rhetoric. There can be no basis for complaint when a prosecutor states, in opening address, the effect of matters which are incontrovertibly established by evidence which has been admitted without objection. In my view, this is all that the Crown did in the passage set out above.

The change in the accused Castagna’s conduct after he knew he was being investigated

21. The Crown referred in its opening to the written instructions which the accused Castagna gave to his accountants for the purpose of having them prepare his income tax returns. The Crown referred to a change in the contents of his letter of instructions after 28 October 2008. He said (tr. 75):

“What I have not told you is on about 28 October 2008 the tax office sent Dr Castagna a letter saying he was going to be audited, 28 October 2008 an audit letter was sent to him so that is you might think that is when the tax office is indicating they are going to come and have a look and double check. So bear in mind that date 28 October 2008. The Crown says from that date Castagna is on notice the tax office is about to have a close look at his tax affairs.

What happens to the next return and the letter in relation to the next return if you turn please to page 809. That is volume 2, 809. See at 809 a letter in fairly similar terms from HLB Mann Judd dated 13 July 2009. So it is after the tax office audit letter is sent out, after Dr Castagna is on notice the tax office is going to have a close look at his affairs and you will see when we get to it in the material after that certain things are told for the first time to HLB Mann Judd. The Crown case is it was only after the audit letter was sent out, 28 October 2008, Dr Castagna told his accountants for the first time anything about the Macquarie Bank fees and anything about money going off shore.

So the Crown case is his disclosure to the accountants about these important things happened for the very first time after 28 October 2008.”

[Emphasis added.]

22. The Crown said further at tr. 77:

“The Crown position is that what occurred is Dr Castagna each year having received the draft return signed something and sent it back to HLB Mann Judd and not once, leaving aside the disclosures that happened in September 2008, but not once did he say the complete income arising from his personal exertion at Macquarie Bank was some other or larger figure.

. . .

The Crown says this is why the 2008 letter is different and in different terms to the earlier letters.”

[Emphasis added.]

23. The following passage, which relates to the income tax returns themselves, was also relied on in the same context:

“You might think it is significant that in this return, after the indemnity is requested, after he is on notice that the tax office has obtained search warrants, after he knows that there is an intention to audit, that the question towards the bottom of item 20, you see the numbers on the left, the bottom of item 20, underneath you see heading "21 Rent". So just three lines above that we see that same familiar question that was answered no for previous years.

“During the year did you own or have an interest in assets located outside Australia which had total value of AU$50,000 or more?”

This year, for the first time, that is answered yes. The Crown says it is significant that that answer occurs after Dr Castagna is on notice that the tax office is looking very closely at his tax affairs.”

[Emphasis added.]

24. Mr Strickland submitted that there was no direct evidence that the accused Castagna knew that he was being investigated at that time and, accordingly, the Crown ought not invite the jury to speculate about the reason for the apparent change in position adopted by the accused Castagna relating to what he told his accountants about his income. He also submitted that the Crown was attempting to persuade the jury rather than simply to explain the use to which the Crown proposed to put the evidence.

25. While I accept that it is not appropriate for a Crown to invite a jury to speculate about the possible reasons for a particular scenario, it is open to a Crown to inform the jury of the inferences which the Crown will seek to have them draw as a result of certain evidence. I was informed that the Crown case includes evidence that a search warrant was executed by the Australian Federal Police on the accused Castagna’s residence in May 2008 for documents relating to his financial affairs. In these circumstances, it can hardly be said to be speculation for the Crown to open on the basis that the accused Castagna was aware of the concerns of the Australian Taxation Office (ATO) from that time and may have chosen to adopt a different approach with his accountants for that reason. The words highlighted in the passages above were sufficient, in my view, to put the jury on notice that what the Crown was referring to was the Crown case and what the Crown hoped to prove from the documents, which were already in evidence. I do not regard these statements as going beyond the bounds of an appropriate Crown opening in a case such as the present.

Evidence of the accused Castagna enquiring of the accused Agius how much money he had left

26. In his opening, the Crown prosecutor referred the jury to the transcript of telephone intercepts in which the two accused were discussing various sums of money. The Crown then referred the jury to transfers which were depicted on Chart 2 in Exhibit E, which showed the movement of funds from various accounts in different countries, including the United States, Australia, New Zealand and Vanuatu. Exhibit E which comprises two charts showing the flow of funds from various accounts was admitted by consent and without objection. On this basis I assume that there is no issue about the transfer of the funds or the accounts between which they were transferred or the dates of transfer. The Crown continued, at tr. 118:

“So the Crown says this conversation is important because in effect it is the two accused talking about getting back in the Crown says to Australia up to 4.6 or 4.7 the money that was left. ‘That I've got left’ the Crown says is a reference by Dr Castagna to the money that was paid by Macquarie Bank for his services. So in its context that explains what was said by the two accused the day after the transfer I have drawn your attention to on chart two.

If you then go back to chart two please. So after that conversation and you will recall that conversation was on 30th November the day before is the transfer to Mr Agius' account on 29th November.

. .

Dr Castagna saying ‘that I've got left?’, is a question and being answered as ‘yes’. The inference the Crown says you might draw from that is this is a reference to the total money that had been parked off shore from the Macquarie Bank work that he knew he was drawing on and that is the reference to bringing it back in and ‘that I've got left’.”

[Emphasis added.]

27. Mr Strickland’s complaint about this passage is that, in essence, it amounts to a submission which would be apposite to a Crown address but ought not be included in an opening. He submitted that the vice of the passages was that by connecting Chart 2 in Exhibit E, the Crown was endeavouring to persuade the jury that the money was being transferred in a circle, or “round-robin” way. He submitted that this went beyond the Crown evidence and contended that the Crown expert, who analysed the material that led to the charts which comprise Exhibit E, did not give such evidence at the committal.

27. As to Mr Strickland’s submission about the movement of funds and his objection to the alleged circularity of the movement of the funds, this would appear to me to be foreclosed by the admission of Exhibit E without objection. Exhibit E sets out the movement of relevant funds. Whether there is a degree of circularity in their movement will be determined by the jury and how the jurors view, or choose to describe them to each other, if they do so, in their deliberations.

28. It might be accepted that what the Crown said in opening may well be similar to what he will say in closing address. The evidence of the telephone intercept and the evidence admitted in summary form in Exhibit E will not change, since they have already been admitted without objection, although there is the possibility that other evidence will be led to cast a different light on it. Nonetheless the Crown has an obligation to tell the jury, the accused and the Court what it will seek to make of particular evidence so that the jury understands its significance and so that the accused appreciate the case that has been made against them. Much depends on how the inference advanced by the Crown is referred to. The phrase, “the Crown says” is typically a suitable introductory phrase, as is “the inference the Crown says you might draw from that is” or “the Crown case is”. I regard these phrases as sufficient in the above instance to flag to the jury that what is being described is the Crown case and how the evidence in the Crown case could fit together.

The interpretation placed by the Crown on a letter from the accused Agius to his solicitors dated 11 December 2007

30. The Crown referred the jury to a letter dated 11 December 2007 in which the accused Agius, as sole director and shareholder director of Bergius Pty Ltd (as established by a company search), provided his instructions to his solicitors about the proposed loan agreement with the accused Castagna. Mr Strickland accepted that the letter was an important one and made no criticism of the Crown for taking the jury to the letter in Exhibit B and directing their attention to particular paragraphs. However, Mr Strickland contended that the Crown was, in effect, telling the jury what to make of the letter, rather than allowing them to read it for themselves and to put it together with the other evidence in the case. He submitted that in closing address it was appropriate for the Crown to tell the jury what it said the effect of the letter was but that it was premature in opening and could have the prejudicial effect of inclining the jury to read it in a particular way.

31. The part of the opening objected to on this basis was, in substance, to be found in the following passages at tr. 142.47-143.04 and tr. 146-147:

“In effect, he is telling his own solicitor lawyer, thank you for the advice, I'm going to ignore those comments that you've raised with me. You might think that is relevant as to whether or not this was a legitimate arrangement on which he was taking his legal advice seriously.”

[tr. 142.47-143.04]

“Item 5, the arrangement is documented in a formal agreement prepared by Castagna's solicitors. The various draft letters had been finalised. You will see that it then goes on, ‘which you have expressed reservation in some of the clauses.’ They have got in inverted commas ‘specific concerns’. Here Mr Agius, through his own company, Bergius, is telling his own lawyer - Dr Castagna's lawyers have drafted this ‘you, my and my company's lawyers have specific concerns.

What does he do with those specific concerns? They are set out in (a), (b), (c)

and (d). He says, ‘I find it acceptable’ for (a). (b) ‘I find it acceptable’. (c) ‘I confirm its mandatory nature’. (d) ‘I note your comments’. He goes on, ‘However, it doesn't represent a material amount.’ In effect what he is telling his lawyers is, I don't care about your concerns. It might indicate that he wasn't too fussed about the details of this documentation, it was just to give a certain appearance, the Crown says.”

[tr. 146-147]

32. Mr Strickland contended that these parts of the opening amounted to a submission and were both argumentative and tendentious.

33. In this instance I consider that there is a risk that the jury could, unless the purpose of the opening was emphasised to them in a further explanation from the Crown or a direction from me, allow themselves to be persuaded by such a passage. The addition of “the Crown says” at the conclusion of the passage is not, in my view, sufficient to guard against the risk that the jury will be persuaded that there is only one way to read the letter and that is the way outlined by the Crown in opening. In my view, any injustice to the accused from the form of the Crown opening in the passage set out above, can be remedied by a reminder that the Crown’s opening was intended to be an introduction to the evidence and to the way in which the Crown put its case. It is desirable that this be put by the Crown and that I emphasise the importance of the jury deciding the case on the whole of the evidence.

Additional instances notified

34. After I had heard argument and reserved my decision on the discharge application overnight, I received further instances relied upon by the accused Castagna by email at 8.29am on 22 February 2018. Mr Strickland did not propose to put further submissions but confirmed: “The submission is the same. These passages reflect what is, in effect, a closing argument.” I turn now to these further instances relied upon.

The intercepted telephone conversations between the two accused

35. Mr Strickland relied on the following passages and contended that it was a closing submission rather than an appropriate element of a Crown opening.

The intercepted telephone conversation between the two accused on 7 June 2007

“So the Crown says that you could draw from that an inference about doing this book entry to make it look like loans had been paid out. You might infer that that is a discussion about it not really being a loan at all, that this is just some creative accounting to give it that appearance.

The Crown case, just so you understand how this evidence fits in with the charges, is that this is all part of the facade to enable, the Crown says, Dr Castagna to have access to money generated from him working at Macquarie Bank so that it could come back to Australia dressed up as a loan.

In addition, the Crown says, by Mr Agius assuming the Billbury loan, these book entries would give the false appearance that these Billbury loans had been repaid and the Crown says the reference to doing an entry is simply that, a book entry.”

[tr. 135.18-135.33]

36. I consider this passage to be an explanation of the way in which the Crown relies on the evidence. Although the expression, “the Crown says” is also commonly used in a closing address, I consider that the second paragraph above is sufficient to alert the jury to the fact that the Crown is talking of the Crown case and the way in which the Crown will seek to rely on the evidence.

The intercepted telephone conversation between the two accused on 15 June 2007

“I suggest to you to, put that call in context so you understand how it fits with the charges, the Crown alleges that you may infer from that call that the accused were not being honest with Mr Hastings. That they were arranging things privately without telling him the full truth about the arrangement and, in particular, that there was some anxiety about making sure this looked like it was going to be a genuine document with a genuine arrangement.

The Crown says from that you can infer that they were creating these arrangements and arranging their dealings with Mr Hastings to give the appearance of a genuine loan to disguise the true nature of their transactions.”

[tr. 138.14-138-.24]

37. This passage contains an explanation of how the evidence relates to the charges (in the first paragraph). The second paragraph could find its way into a closing address. However, in light of the prefatory statements which immediately preceded it, I do not consider that, of itself, it would be understood as other than an explanation of the relevance of the evidence to the Crown case. This is not to say that the distinction between opening addresses and closing addresses is other than fundamental. However, in a largely documentary case, it is to be expected that there will be a greater resemblance between the opening (what the Crown says in the context of the charges and the evidence which has been tendered or which it is expected will be adduced) and the closing (what the Crown submits in light of all the evidence in the trial).

The intercepted telephone conversation between the two accused on 22 November 2007

“The next reference to Robert Agius says, "And I said, well, if you're going to give me that let me, let me look at the agreement." So what you take of that in the context, the Crown says, that at this fairly late stage, November 2007, Mr Agius is effectively saying, look, I don't much care about the terms of this agreement, he wants something in writing from me to say that I'm happy to go against what he has advised. This is in the context where he hasn't even looked at the agreement. You might think that indicates a lack of interest in the detail.”

[tr. 141.35-141.43]

38. If this passage is taken in isolation, it has the appearance of a submission. It is a statement that could be found in a Crown closing. However, in an opening which took over two days, I do not consider it to be appropriate to judge particular passages purely by reference to isolated blocks of transcript. The jury can be expected to take in the Crown opening as a whole in light of what I have said at the outset about the course of the trial and its different stages and what the Crown has said elsewhere in the opening about the nature and purpose of the opening. I consider that any risk that would arise from a passage such as the one referred to above can be cured by a direction. It is to be regretted that defence counsel did not raise any of these matters with the Crown in the course of his opening, when he could have taken account of their concerns and modified his language, or added phrases to emphasise the nature of the opening before the opening concluded. I accept Mr Strickland’s acknowledgement that these matters had not occurred to him and that it had not been raised with him until very soon before the Crown concluded the opening. He also submitted that the cumulative effect of the various instances relied upon could not be fully appreciated until the end of the Crown opening.

The suggestion that Mr Agius controlled certain companies

39. Mr Lowe relied on a further instance in addition to those relied upon by Mr Strickland. He submitted that the Crown ought not to have referred in opening to the accused Agius “controlling” certain companies.

40. Mr Lowe accepted that it would be open to him in the defence opening pursuant to s 159 of the Criminal Procedure Act to flag the issue of whether Mr Agius controlled Billbury Limited (Billbury) and International Finance Trust Company Limited (IFTCO) so that the jury appreciated that it was an issue.

41. I do not accept that there is any basis for complaint. Mr Crown made it clear that it was the Crown case that the accused Agius controlled these two companies. Exhibit A, which was tendered by consent and without objection, recorded that the accused Agius was an authorised signatory of various accounts, including the accounts of Billbury and IFTCO. Moreover Exhibit B contains evidence of an express admission by the accused Agius that he controlled Billbury. As referred to above, no objection was taken to the admission of this evidence.

The specific instance of the inference arising from the reluctance on the part of the two accused to speak on the telephone

The passages to which objection was taken

42. Mr Strickland relied, separately, on the various statements referred to by the Crown in opening in which each accused expressed a disinclination to speak on the telephone. He instanced the following passage from the Crown’s opening at tr. 119 in which the Crown was referring to the transcript of an intercepted telephone call:

“Over the page 361 the first R for Robert at the top, ‘There should be another 60 or so I think next week, okay’. Robert ‘But take that now while it's there’. Tony ‘Okay that's fantastic. Um, there's, there's, ah, just one thing I wanted to, ah, ah, mention to you. I just wondered whether you should think about having, er, using a cell phone from Liz if you know what I'm saying".

Robert then says "Use Liz's cell 'phone". Tony "Yeah. I'll, I'll talk to you about it later. I don't want to talk about it". Robert "yeah sure".

The Crown says what is going on there is a reference to the return to Australia of $540,000-odd, the timing for transferring that into Dr Castagna's account and the Crown says you might infer what is going on at p 361 is these men saying on the 'phone they should be careful about talking about it on the phone and they should use somebody else's cell 'phone, Liz, and you might think at the end of this trial there might be some reason for you to believe there was a reason for them to be a bit secretive about talking to one another on the telephone.”

[Emphasis added.]

43. Mr Strickland also pointed to the following passage at tr. 143:

“The Crown says that the two of them, Tony on p 502 and Robert on p 504, are saying that they don't want to talk about it on the phone you might infer that they were not wanting to talk about it for pretty good reasons. They knew that what they were going to discuss had to be said face-to-face rather than on the phone, because what they were talking about were arrangements to give this false appearance about these loan arrangements. What then occurred was a meeting with Mr Hastings, I won't take you to the details about that.”

[Emphasis added.]

The pre-trial hearing before Garling J on 23 March 2017

44. Mr Strickland relied on what was said before Garling J (who was originally expected to be the trial judge for this trial) on 23 March 2017 in the course of an application for separate trials. Following an agreement between the accused Castagna and the Crown that certain evidence would not be tendered, the accused Castagna did not press his application for a separate trial. In the course of Mr Agius’ application for a separate trial, the issue was raised that, if the accused Castagna wanted to advance, as a reason why he did not want to speak on the phone to the accused Agius, the fact that he knew that the accused Agius was being investigated by the ATO, this would necessarily be prejudicial to the accused Agius. Thus, evidence which would tend to assist the accused Castagna (by showing that the reason he was not reluctant to speak on the phone related to the accused Agius and not to any matter germane to his own conduct) would, or could, be highly prejudicial to the accused Agius.

45. Mr Strickland also relied on the Crown’s written submissions in opposition to the separate trial application, which were tendered on the application for discharge before me. He particularly emphasised the following passage:

“In the circumstances, any potential unfairness to Mr Agius could be remedied by an order pursuant to either ss 135(a), 136(a) or 137 effectively limiting what evidence Mr Castagna could give, and cross-examine Mr Agius about, in relation to the investigations he says were relevant to his conduct in the telephone intercepts. It would be adequate for him to simply say that he knew Mr Agius was being investigated by the Australian Taxation Office at the time and then give his explanation as to why this knowledge should cause him to behave as he did. A suitable direction to the jury could also be given to guard against any potential misuse of the evidence.”

46. In response to this submission, the Crown indicated to Garling J that it accepted that evidence that the accused Agius was being investigated by the ATO would have a prejudicial effect and that this effect would need to be the subject of a direction to the jury following a ruling pursuant to s 136 of the Evidence Act 1995 (NSW) to limit the use of the evidence. The Crown submitted before Garling J that the direction would be sufficient, particularly in the context where it was not contended that the jury ought be told of the outcome of the investigation (namely that the accused Agius was prosecuted, convicted and sentenced to a term of imprisonment which he is currently serving). The Crown submitted, in its opposition to the accused Agius’ application for a separate trial, that it relied on the telephone conversations as overt acts, particularly when they are considered with the evidence of particular transactions. I assume that Garling J refused the accused Agius’ application for a separate trial, although the reasons for decision were not made available in the course of the present application.

The use to be made of the accuseds’ reluctance to speak on the telephone

47. Mr Strickland’s further submission was that the reluctance to speak on the phone was plainly relied on by the Crown as a “consciousness of guilt” and that such conduct ought not be referred to at all in that context in the opening because of the direction that must be given in accordance with Edwards v The Queen (1993) 178 CLR 193; [1993] HCA 63 to ensure that the jury understands the conditions which must be satisfied before they can use particular evidence as a consciousness of guilt. He submitted that the fact that the Crown opened in the terms set out above effectively “boxed” the accused Castagna in and required him to give an explanation as to why he did not want to speak on the phone. He contended that the “vice” of referring to this evidence in the opening was that it was at an early stage of the trial before evidence of other explanations might be given.

48. I was referred by the Crown to the following passage from R v Cianatar (2006) 16 VR 26; [2006] VSCA 263, in which the Victorian Court of Appeal said (footnotes omitted):

“[44] . . . Lies and post-offence conduct are a species of circumstantial evidence. An inference of guilt may be drawn from the concatenation of circumstances including the post-offence conduct. The process of reasoning from ‘strands in a cable’ of circumstantial evidence discussed in Shepherd v R  was applied in Edwards v R. Whether a statement proved to be false is capable of demonstrating a consciousness of relevant wrongful conduct amounting to an implied admission of guilt will depend upon ‘the terms of the statement, the circumstances in which it is made, the nature of the offence charged and the other evidence in the case’.

[45] As with other forms of circumstantial evidence of guilt, a jury may accept evidence of lies and other post-offence conduct and act upon it without being satisfied beyond reasonable doubt that the evidence establishes guilt (that is to say, without being satisfied that there is no other explanation of the lies and post-offence conduct which is reasonably open on the facts).”

49. The Crown also submitted that there was a distinction between post-offence conduct and conduct which was contemporaneous with the offence itself and that the caution with which the former category was adopted did not apply to the latter category.

50. I note that the Crown did not, in its opening refer to a “consciousness of guilt”. It accepted that, if the conduct of the accused were to be relied on as a consciousness of guilt, there would need to be a direction given in accordance with Edwards v The Queen. The Crown said, in response to Mr Strickland, at tr. 191:

“The Crown position is that not talking to one another openly on the telephone is a circumstance. A piece of circumstantial evidence that the Crown was 20 entitled to draw to the jury's attention and entitled to flag to the jury as something that ultimately they may well take into account in relation to the circumstance relevant to their participation in and the focus of their conspiratorial agreement.”

51. I accept the Crown’s submission that it was entitled to open on the passages in which the accused expressed a reluctance to speak on the phone. These statements of the accused were in evidence by agreement and without objection and were tendered at an early stage of the opening. The Crown was entitled to refer to them in opening given that it was the Crown case that the reluctance to speak on the phone was a significant overt act which occurred during the alleged commission of the offence. Whether or not the Crown seeks to, and is permitted to, rely on such evidence as amounting to a consciousness of guilt is a matter which will not arise until closing address. Whether or not the evidence amounts to a consciousness of guilt, it is nonetheless relevant as circumstantial evidence (see R v Cianatar at [45]) and has been, as referred to above, admitted without objection.

52. I do not regard the submissions made by the Crown (extracted above) before Garling J as particularly germane to the present question since they foreshadow the steps that might be taken to protect the accused Agius if the accused Castagna gives evidence to explain why he was reluctant to speak on the phone and his explanation would tend to implicate the accused Agius in a prejudicial way. This scenario, which may not eventuate, does not have a particular bearing on the Crown’s entitlement to open its case by reference to its evidence.

53. The Crown was entitled to open, as it has done, on the basis that the Crown says that the so-called loan agreement was a device to disguise the true character of the receipt of payments by the accused Castagna, which were, in effect, income. It was entitled to take the jury in its opening to passages where the accused expressed reluctance to speak on the phone. It was also entitled to tell the jury that it was the Crown case that the reason they did not want to speak on the phone was that they did not want anyone else to know (especially the ATO) the true nature of their arrangements. This aspect of the Crown case is, as I understand it, also connected with the Crown evidence of what the two accused told, and failed to tell, their lawyers and accountants about their financial dealings.

54. While it may be that, as a matter of forensic judgment, the accused Castagna feels that he is required to explain why he did not want to speak on the phone, this forensic imperative (if it be one) arises from what he actually said in the intercepted telephone conversation. In so far as the accused Castagna might feel “boxed in” (to use Mr Strickland’s expression), this consequence arises from the evidence tendered by the Crown. Similar imperatives might arise where an accused has admitted to certain conduct in a recorded interview.

55. In my view, the real question is whether it was appropriate for the Crown to cast its opening in terms of the inference which the jury ought to draw from the accuseds’ reluctance to speak on the telephone. The words “consciousness of guilt” were not used. However, I consider there to be a risk that the jury might understand the words highlighted in the following passage as argumentative (and potentially persuasive) rather than a neutral opening of the Crown case:

“They knew that what they were going to discuss had to be said face-to-face rather than on the phone, because what they were talking about were arrangements to give this false appearance about these loan arrangements.”

[Emphasis added.]

56. There is an associated risk that the jury might, notwithstanding the use of the words, “the Crown says” in the opening on this topic, take more from the passages set out above than is appropriate in an opening. The importance of this issue in the trial is plain since it is related to the possibility that the accused Castagna might advance another explanation for his reluctance to speak on the phone: namely, his knowledge that the accused Agius was being investigated by the ATO. Although I accept that the Crown prosecutor intended to convey only the importance of the evidence and its relevance to the Crown case, the passages about the accuseds’ reluctance to speak on the phone contain an element of persuasion, whether or not intended. Because of the sensitivity of the issue for the reasons explored before Garling J, it is appropriate that such steps as might be taken to protect the interests of the accused be taken at this stage.

57. I do not consider that it is necessary or appropriate to discharge the jury on this basis since any potential prejudice can be rectified by permitting the Crown to confirm the nature and purpose of the opening. I consider that a reminder of the purpose of the Crown opening and a direction that they are to decide the case on all of the evidence and having heard addresses and the summing up will, in my view, be sufficient to undo any potential prejudice which might have been occasioned by the way in which the Crown opened in the passages set out above. Whether it is appropriate to refer to this matter specifically in such curative statements is a matter about which I will hear from counsel.

Conclusion

58. For the reasons given above, of the matters raised, only two appear to me to give rise to any potential prejudice: the issue of the accuseds’ reluctance to speak on the telephone and the interpretation to be placed on the terms of the letter from the accused Agius to his solicitors dated 11 December 2007. In a complex case such as the present the line between what is appropriately included in a Crown opening and what ought be omitted and left unsaid until closing address is a difficult one to draw.

59. I do not consider any of the matters raised, whether individually or collectively, warrant the discharge of the jury. Any potential risk of prejudice can, in my view, be ameliorated by permitting the Crown to reiterate that what he has said in opening is no more than an introduction to the evidence and an outline of the way in which the Crown puts its case by reference, in some instances, to particular pieces of evidence. While what the Crown has already said may be sufficient to achieve this aim, I consider it to be prudent to invite the Crown to make a further statement to that effect to the jury. I propose to follow that statement by emphasising the place of the opening in the trial and the course of the trial.

60. For the foregoing reason the respective applications made by each accused for the jury to be discharged are refused.

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Decision last updated: 06 March 2019