R v Dowding & Grollo

[2000] VSC 285

SUPREME COURT OF VICTORIA
CRIMINAL DIVISION	Not Restricted

No. 1420 of 1999

THE QUEEN

v.

BRUCE IVAR DOWDING, BRUNO GORDANO GROLLO, RINO JOHN GROLLO

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JUDGE:	TEAGUE, J
WHERE HELD:	Melbourne
DATE OF RULING:	7 JULY 2000
DATE OF REASONS:	11 JULY 2000
MEDIUM NEUTRAL CITATION:	[2000] VSC 285

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CATCHWORDS:     Crime – Conspiracy to defraud the Commonwealth – Application for exclusion of evidence of taxation assessment.

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APPEARANCES:	Counsel	Solicitors
For the Prosecution	L. Robberds QC with D. Maguire and P. Sest	Commonwealth Director of Public Prosecutions
For the Accused	J.Judd QC with M. Taft for Bruce Dowding	Arnold Bloch Leibler
C. Heliotis QC with G. Lyon for Bruno Grollo
T. Forrest QC with Dr S. Tudor for Rino Grollo

HIS HONOUR:

1. An application has been made by the Prosecution that I should rule that evidence on a particular subject is irrelevant to the issues in this trial and should not be admitted.  Put shortly, the subject is the income tax assessment made by the Commissioner of Taxation as to Grofam Pty. Ltd for $3.5 million for the year to 30 June 1983.  It is not necessary here to go into the extensive history of how the assessment came to be made, how it was responded to, how it was ultimately treated judicially and how the current Prosecution case addresses facts underlying the assessment and related facts.  It will suffice to note two particular matters.  The first is that there has long been, and still is, contention as to the proper treatment in the books of companies in the Grollo Group of events which led to a particular treatment in late 1983 for the year to 30 June 1983 of an amount of $3.5m.  The second is that there has not been consistency in the approach taken by individuals in the investigation and prosecution agencies as to how the $3.5m events and treatment should be viewed.  In particular, there has not been consistency as to whether they should be viewed in relative isolation or supplemented by reference to other events and the treatment of those events.  The current Prosecution case has them supplemented.  In other pre-trial applications, reference has been made to six accounting events.  Only one of those six relates to the $3.5m.

1. Before Mr Robberds began his submissions, I adverted to three concerns that I had based on an outline of the Prosecution’s submission that had been supplied to me in writing.   Two of those concerns stemmed from a basic proposition about context.  Evidence of context may be introduced in order to overcome a potential for a jury to be misled because what is otherwise before the jury is a distortion or an incomplete account.  See Connell v The Queen (No 6) (1994) WAR 133 at 210, and various cases cited therein. I noted that it seemed to me, in the current setting, that this proposition could apply as to the context of evidence as to both “evidence given at the AAT hearing” and “the conduct of the investigation”. As to the former, the prosecution has foreshadowed leading evidence of alleged lies in what was said in the testimony give by each of the accused in 1994 before the AAT on the hearing of objections to assessments made on Grollo Group companies. As to the latter, the defence has foreshadowed, in the course of pre-trial hearings, that some level of criticism might be made of the competence and integrity of the investigation process and those involved in it. The third concern to which I referred, but to which I will not refer further, arose from what was said by Kirby A-CJ in Neil Pearson & Co Pty Ltd & Another v Comptroller-General of Customs [1995] 38 NSWLR 443. He indicated that a criminal trial judge could treat as relevant a previous Federal Court civil liability decision on what was essentially the same subject matter.

1. Mr Robberds QC addressed me as to the evidence given by the accused at the AAT proceedings, which the Prosecution wishes to introduce.  He argued that although it was apt that some context be given to the jury, that should not extend to details of the $3.5m assessment as this would only be a distraction from the real issues.  He argued that there was a risk of lengthy excursions into matters of no significance, and hence a much longer trial, if the ambit of relevance was permitted to be unduly wide. 

1. I accept that there will be difficulties in determining where lines as to relevance are to be drawn.  On the other hand, I think it is unrealistic to expect the jury to make an assessment of the credibility of the witnesses, and of their evidence, without knowing what was at issue in those proceedings.  I am yet to hear submissions on the admissibility of evidence before the AAT, the outcome of which may impact of the issue before me.  That evidence consists of more than 1000 pages of transcript. 

1. I have earlier ruled that the Prosecution can lead accounting evidence from Leon Maddern (“LPM”) as to the treatment of various accounting events in the records of the accused.  Mr Robberds put to me: that the only evidence required to establish the charges would be before the jury in those books of account, as the jury would be invited to draw certain inferences from that evidence regarding the conduct of the accused.: that that evidence was complete as it stands; that it was not possible for cross examination to elicit further accounting evidence on which to base alternative inferences consistent with innocence; that, as the case would be argued simply on evidence in the books before the jury, any previous inferences drawn, or previous opinions expressed as to taxable income, whether by the Commissioner of Taxation in the form of the $3.5m assessment or by LPM or others during the investigative process, were irrelevant and as such should not be admitted. 

1. This approach seems to me to be overly restrictive.  I accept that the current Prosecution case appears to rely only on accounting evidence that is unrelated to the assessment process.  There is to be opinion evidence led from LPM.  It can reasonably be expected that it will be tested in cross-examination.  Matters linked to the context in which the opinions of LPM were formed are prima facie relevant.  The cross-examination of LPM ought not to be unnecessarily trammelled in advance by a pre-trial ruling as to relevance.  I am troubled that the cross-examination should be restricted in advance to preclude LPM being asked as to any matter which might bear upon whether his testimony is impartial, given his role in the earlier investigative and assessment processes.  The substantiation of the six accounting events that form the basis of LPM’s evidence is also a matter that is potentially at issue.  I am troubled at ruling in advance that any selectivity or change in the treatment of the accounting issues by the prosecuting authorities, including LPM, is not relevant background for the jury to take into account.

1. I have noted above that Mr Robberds questioned the legitimacy and practicality of opening up the very broad issue of the investigative process, on the basis that to do so would be both time consuming and distracting for the jury.  He argued that it would be difficult for the jury to know where a potentially vast amount of evidence commenced and ceased to be relevant to the issues in this trial.   I am alive to this concern. I have reviewed what was said by McHugh J in Palmer v The Queen (1998) 193 CLR 1 at 22-23 regarding judicial case management, and also what was said in Natta v Canham (1991) 32 FCR 282 to which he referred. I have noted elsewhere that there will be difficulties in determining where lines as to relevance are properly to be drawn. I am unable to accept that that a line should be drawn where the Prosecution contends in this application, at a point which would preclude as irrelevant to the jury’s consideration of the issues, information as to the $3.5m assessment.

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CERTIFICATE

I certify that this and the  preceding 3 pages are a true copy of the reasons for ruling of Teague J of the Supreme Court of Victoria delivered on 7 July 2000.

DATED: this 11^th day of July 2000.

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Associate