R v Karounos
[1995] SASC 4925
•3 February 1995
COURT IN THE COURT OF CRIMINAL APPEAL SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), MOHR(2) and OLSSON(3) JJ
CWDS
Criminal law and procedure - particular offences - Conspiracy to defraud - fraud consisting of loan of monies of clients of one conspirator to a company controlled by the appellant and two other borrowers, on less than adequate security in breach of first conspirator's duty to clients - risk of economic loss to clients - risk consisting of inadequacy of security - unnecessary for prosecution to prove inability of borrowers to meet personal liability to repay the loan - conviction after fair trial fully supported by the evidence.
Criminal law and procedure - jurisdiction, practice and procedure - Stay of proceedings - Dietrich application - failure of appellant to comply with reasonable requirements of Legal Services Commission - lack of legal representation due to fault of appellant - trial conducted fairly - refusal of stay upheld on appeal. Dietrich v R (1992) 177 CLR 292, applied.
Criminal law and procedure - jurisdiction, practice and procedure - Stay of proceedings - alleged delay and improper purpose - refusal of stay upheld on appeal.
Criminal law and procedure - jurisdiction, practice and procedure - juries - Application to disqualify for bias - comments made by fellow workers to juror about appellant - exposure of jurors to such comments in course of ordinary social intercourse considered - direction by judge sufficient safeguard in circumstances. - Webb and Hay v R (1994) 122 ALR 41, applied.
Criminal law and procedure - jurisdiction, practice and procedure - persons entitled to conduct prosecution - Prior involvement by counsel for prosecution in investigation of appellant by Corporate Affairs Commission and related matters - bias test for judges and jurors not applicable to prosecuting counsel - no impropriety in conduct of trial - fairness of trial not impaired.
Criminal law and procedure - jurisdiction, practice and procedure - courses of evidence, statements and addresses - Final address by prosecuting counsel where accused unrepresented - prosecutor's legal right to final address. Criminal Law Consolidation Acts288b.
Criminal law and procedure - jurisdiction, practice and procedure - judge's summing-up - Misdirection as to jury's role in relation to co- conspirators rule - no prejudice to appellant. Ahern v R (1988) 165 CLR 87, applied.
HRNG ADELAIDE, 7-8 December 1994 #DATE 3:2:1995 #ADD 10:3:1995
Counsel for appellant: Mr W J N Wells QC with
Mr J R E Lister
Solicitors for appellant: Jon Lister
Counsel for respondent: Mr D J Chapman with Mr A H F Wong
Solicitors for respondent: DPP (Cwlth)
ORDER
Appeal dismissed.
JUDGE1 KING CJ This is an appeal against a conviction by verdict of a jury in the District Court of the crime of conspiracy to defraud.
2. The particulars of the offence pleaded in the Information are as follows:
"George Karounos, and Barbara Joy Hunt between the 1st day of
August 1986 and 31st day of October 1986 at Adelaide and other
places conspired together with Ross Daniel Hodby to defraud those
members of the public who had invested monies with the said Ross
Daniel Hodby for the purpose of the said monies being lent on
adequate security to third parties by Ross Daniel Hodby by causing
monies in the sum of $520,000 to which members of the public who
had so invested with the said Ross Daniel Hodby were entitled,
to be lent to Karta Pty. Ltd., Sophia Karounos and Barbara Joy
Hunt, when they knew that the said loan was not adequately secured."
3. The man Hodby mentioned in the Information operated a finance broking and land broking business. Clients entrusted money to Hodby to be invested on their behalf on proper and adequate security over real estate. Over a period of years he invested much of that money with companies controlled by the appellant. The case for the prosecution was that Karounos and Hunt, being aware that Hodby was under a duty to obtain adequate security over real estate for loans of his clients' money, agreed with him that the monies should be loaned to Karta Pty Ltd, a company in which Karounos and Hunt were interested without adequate security. The loan was for $520,000. A parcel of land was purchased by Karta Pty Ltd for $300,000 and mortgaged as security for the loan. The allegation was that that was a deliberate plan to secure funds for the business activities in which Karounos and Hunt were interested and that the clients of Hodby were defrauded by being exposed to a significant risk of economic loss.
4. It was a long case and a trying one for all concerned. There were difficulties in getting the case to trial and the commencement was long delayed. The appellant was represented by counsel on certain applications and issues but was unrepresented throughout the trial proper before the jury. I am left with a strong conviction that the appellant embarked upon a planned course of action to frustrate and delay the trial at every turn and to prevent it from resulting in a verdict. He was entitled, of course, to take every point that was properly open to him but I think that understanding of his true purpose to frustrate the trial assists in evaluating much that occurred.
5. A brief account of the course of the proceedings is a necessary background for the understanding of certain of the issues. On 15th October 1991 the appellant, Mrs Hunt and Mrs Karounos were arraigned in the Supreme Court in consequence of being committed for trial on the 9th September 1991. The matter was remitted to the District Court. A status conference was held on 15th November 1991 when the appellant was represented by a solicitor Mr Palasis, and a date for trial was fixed for 25th May 1992. Legal aid had been granted to the appellant on 14th June 1990 and Mr Palasis' firm, Andersons, had acted for the appellant during the committal proceedings. Andersons withdrew from the matter and Mr Palasis was removed from the file on 29th April 1992 when a further status conference was held. Mr Braithwaite, chief counsel for the Legal Services Commission, took over the conduct of the matter and commenced preparation of the case for trial. The fixture for 25th May was vacated. A further status conference was held on 3rd July 1992 when a nolle prosequi was entered in respect of Mrs Karounos. A new trial date was fixed for 18th January 1993.
6. It came to the notice of Legal Services Commission that the appellant had become the registered proprietor of a property situate at 11 Panorama Drive, Panorama. The consideration was stated to be $230,000 and mortgages securing a total of $270,000 were registered over the property. On 25th August the Legal Services Commission wrote to the appellant requesting information as to how the purchase was financed, the purpose to which the borrowed monies had been applied and the source of funds to service the mortgages. The appellant's reply claimed that he held the property as trustee for a family trust and that he had no beneficial interest in it. He did not return a completed "Current Financial Statement" as requested. Legal Services Commission was not satisfied with the reply and wrote again on 16th September 1992. The Commission required the completion of the "Current Financial Statement". It also required a copy of the trust deed. It also requested "an authority to seek all the information directly from the three financial institutions involved" in the house transaction. The appellant provided a long reply giving an account of the transaction. He returned the completed statement and offered to produce the original trust deed. He declined, however, to authorize the obtaining of information from the financiers. In a subsequent letter he complained that an official had contacted one of the financiers and informed the financier that "George Karounos is under criminal investigation." By letter dated 29th September the Commission denied any contact with the financier but indicated that no further legal work would be undertaken until it "receives full and complete written disclosure of your current financial circumstances." By letter dated 30th September the Commission indicated that if it did not receive the requested information within 14 days aid would be terminated. The appellant replied to this letter but did not provide the authorities to obtain information from the financiers. On 14th October the Commission wrote again and the letter contained the following passage:
"Unfortunately your letters dated 2nd September 1992, 6th October
1992 and the sparsely completed (and unsworn) Current Financial
Statement have failed to satisfy the Commission's requests and
requirements for complete disclosure of your current means.
Furthermore you have said you are not prepared to provide the
Commission with either a written authority to approach your
financiers or a copy of the trust deed. The Commission considers
that its requests have been straight forward and easy to comply
with. We also consider a personal interview is not indicated,
since we requested sworn statements and copy documentation, not an
oral explanation.
Accordingly, the Director has terminated aid forthwith on the
following grounds:-
(a) That you have failed over a period of time to supply the
Commission with appropriate written information and documentation
with respect to your financial resources.
(b) That it appears that when your trial was being prepared by
your lawyers, monies of unknown origins and amounts were raised by
you and committed towards the acquisition of property and building
renovations.
(c) The Commission is no longer satisfied of your continuing
eligibility for legal aid as you have demonstrated an ability to
borrow substantial sums of money, and apply those sums to building
works rather than make proper provision (or contribution) for the
contingent legal costs of this matter.
I confirm that Mr Braithwaite, Mr Davis and Mr Lutt are no longer
available to take your further instructions." An appeal against this decision was dismissed by the Commission.
7. On 26th November 1992 a pre-trial conference was convened and subsequently adjourned until 30th November 1992 and then until 9th December 1992. Leave was then granted for the removal from the file of the Legal Services Commission solicitor. A further status conference was held on 13th January 1993 when the appellant was represented by his counsel, Mr Cuthbertson. Mr Cuthbertson conceded that it was partly the appellant's fault that the question of legal aid had not been resolved. He pleaded for further time to resolve it. He asked that the appellant be given four months. He proposed that the trial date be fixed say four months ahead with an indication to the appellant that "come what may that is sufficient time." Mr Cuthbertson said:
"If the defendant is sensible he will use that period and avail
himself of those services, and if he is told that on that occasion
the matter will be expected to go ahead come what may, then it would
be my submission that the defendant could have no further complaint
because it would be the case that on that occasion, some 4 months in
advance, if he were not represented, it would be obviously his own
wish that he be not represented."
8. The learned judge acceded to these pleas, vacated the trial date and fixed a new trial date for 7th June 1993.
9. At a status conference on 5th March 1993 the appellant was represented by Mr Kerin, a solicitor, who stated that a Legal Assistance Application had been completed but not yet forwarded. The trial date was confirmed. Mr Kerin again represented the appellant at a status conference on 2nd April and indicated that some documents had been provided to Legal Services Commission. At a further conference on 21st May Mr Kerin foreshadowed an application to stay the trial by reason of lack of representation. Mr Lane of counsel for the prosecution insisted that the trial proceed on 7th June.
10. When the case came on for trial on 7th June 1993, Mr Abbott QC and Mr Boucaut appeared for the appellant for the limited purpose of seeking an adjournment or stay. An adjournment for six months was sought in order to obtain legal aid. When that application met no success, an application was made for a stay by reason of lack of legal representation. Mr Abbott tendered affidavits in support of the application. The appellant's affidavit exhibited the correspondence referred to above. The appellant did not produce any communications between himself and the Commission after 23rd November 1992 and, relying on s31A of the Legal Services Commission Act 1977, objected to the Court requiring the production of such documents or making any inquiries of the Commission.
11. The appellant was cross-examined on his affidavit. He persistently claimed privilege in respect of questions as to whether he had communicated with the Commission in compliance with its requests. The learned judge formed an adverse view of the appellant's credibility. His Honor in his reasons for his ruling on the application said:
"Suffice it to say that I was not prepared to accept the applicant's
testimony on a number of aspects, including, inter alia, the
applications to financial institutions, his financial resources, his
ability to borrow moneys and service loans, the Trust, and the
completion (or otherwise) of a legal aid application, in the absence
of some supportive (or confirmatory) evidence from independent
sources." He rejected specifically the appellant's explanation for his persistent refusal to authorize the Legal Services Commission to obtain information from the financial institutions as to his applications for loans.
12. Although the learned judge conceded that if the appellant's evidence were accepted, he was indigent in the relevant sense, he was in the end unable to find indigence because of his distrust of the appellant's evidence. He found that the appellant had failed to discharge the onus of proving that his inability to obtain legal representation was without fault on his part.
13. The application for a stay of the proceedings due to inability to obtain legal representation was founded upon the case of Dietrich v The Queen (1992) 177 CLR 292. The proposition for which that case is authority is stated at the end of the judgment of Mason CJ and McHugh J at p315 as follows:
"In view of the differences in the reasoning of the members of the
Court constituting the majority in the present case, it is desirable
that, at the risk of some repetition, we identify what the majority
considers to be the approach which should be adopted by a trial
judge who is faced with an application for an adjournment or a stay
by an indigent accused charged with a serious offence who, through
no fault on his or her part, is unable to obtain legal
representation. In that situation, in the absence of exceptional
circumstances, the trial in such a case should be adjourned,
postponed or stayed until legal representation is available. If, in
those circumstances, an application that the trial be delayed is
refused and, by reason of the lack of representation of the accused,
the resulting trial is not a fair one, any conviction of the accused
must be quashed by an appellate court for the reason that there has
been a miscarriage of justice in that the accused has been convicted
without a fair trial."
14. It will be seen from that proposition that an accused person, charged with a serious offence, seeking an adjournment or stay on this ground must prove on the balance of probabilities that he is indigent, that he has been unable to obtain legal representation and that that inability is not due to fault on his part.
15. The learned judge's finding that it was not proved that the appellant was indigent was challenged on the appeal. The only evidence, however, placed before the judge was that of the appellant and that was not accepted. There was no basis for a finding that the appellant lacked the means to fund his trial. It follows that there was no basis for a finding that the appellant was unable to obtain legal representation. Mr Wells QC complained that the judge confused the issues of indigence and fault. But they were intertwined. The failure of the appellant to call evidence from the financiers and to authorize Legal Services Commission to obtain information from them reinforced the judge's misgivings about the appellant's credibility.
16. To the extent that the appellant's ability to obtain legal representation depended upon legal aid, it was necessary for him to prove that his inability to obtain legal aid was without fault on his part. The learned judge found that it was not proved that the inability was without fault because it was not proved that he had complied with the reasonable requirements of the Commission. Mr Wells QC for the appellant contended that that was not sufficient to constitute fault in the relevant sense. He contended that to amount to relevant fault the appellant's conduct would have to go so far as to indicate that he did not really desire representation.
17. Mr Wells' contention cannot, in my view, be sustained. A person may desire legal representation but be unwilling to take the necessary and proper means to obtain it. The basic reason why lack of representation may lead to a stay is that it may deprive the accused of a fair trial. A person cannot be said to be deprived of a fair trial by reason of lack of legal representation if he refuses to take reasonable steps which are necessary to obtain it. He thereby deprives himself of the opportunity to obtain legal assistance. His conduct must be regarded as fault in the relevant sense. An alternative way of looking at the matter, is that he is not really unable to obtain representation because he has unreasonably omitted to use the necessary means to obtain it.
18. I am satisfied that in order to discharge the onus of establishing that he was unable to obtain legal assistance and that that was not due to fault on his part, it was necessary for the appellant to prove that he had complied with all reasonable requirements of the Commission. That follows from the fact that the Commission is the instrument through which legal aid is dispensed in this State. It has the responsibility of protecting the public funds entrusted to it to provide legal aid to persons who are indigent in the relevant sense and of ensuring that they are used only for the purpose for which they are provided. A person who refuses or neglects to comply with the reasonable requirements of the Commission cannot be said to be unable to obtain legal assistance without fault on his part.
19. The requirements of the Commission in this case were entirely reasonable. The appellant, although bankrupt since 1981, was to all appearances actively engaged in business activities carried on by companies. While in receipt of legal aid, he became the transferee of a house the consideration for which was shown as $230,000. He executed mortgages to three financiers to secure loans to a total of $270,000. It was encumbent on the Commission to ascertain the full facts surrounding those transactions in order to satisfy itself as to the appellant's continued eligibility for legal aid. It was necessary to insist on full disclosure and on verification of the facts by access to the loan applications and supporting information. The apparent incongruity between the appellant's alleged indigence and his capacity to raise finance clearly called for investigation, and for a comparison of the information as to his means which he supplied to the financiers in support of his applications for finance and the information supplied to the Commission in support of his application for legal aid. The Commission's duty to protect public funds required no less.
20. The appellant's attempted justification of his stance, namely that he believed that an official of the Commission had undermined his ability to raise finance by inquiries from and a damaging statement to a financier, was said by the judge to be unconvincing. The Commission's letter quoted above denied any such activity and there was no evidence that it had occurred. I have the strong impression that the appellant was engaged in a spurious attempt to explain why he would not comply with the Commission's proper and reasonable requirement that he authorize it to inspect the material put before the financiers in support of the loan applications.
21. R v Dietrich supra has established that the opportunity of legal representation, irrespective of means, is a necessary incident of a fair trial on a charge of a serious offence. It is, however, the responsibility of an accused person to arrange his own legal representation. He is not deprived of a fair trial if the lack of legal representation is due to the accused's failure to take the appropriate measures to obtain legal representation. Those measures include utilization of his own financial resources or, if they are insufficient to fund the trial, taking the necessary steps to obtain legal aid. If legal aid is sought the accused must comply with the reasonable requirements of the legal aid authority. R v Dietrich should not be applied in a manner which would undermine the proper procedures of the Legal Services Commission for ensuring that it is not imposed upon and that it is provided with all necessary information and means of verifying it. In the end, of course, the decision as to whether it would be fair to force the accused to trial unrepresented is for the Court. If aid is refused for a trial of a charge of a serious offence on the ground of perceived lack of merit or of lack of funds available for legal aid, the Court may well stay the trial until legal representation is arranged. The Court may, if it sees fit, review the Commission's assessment of indigence. It may review and assess for itself the reasonableness of the Commission's requirements. Where, however, the reason for the lack of representation is the accused's refusal or neglect to comply with the reasonable and proper requirements of the Commission, he deprives himself of representation and to force him to trial unrepresented cannot be regarded as a denial of a fair trial.
22. Mr Wells argued that the application for a stay on Dietrich grounds miscarried because the appellant was obliged to submit to cross-examination in the belief that his evidence could be used against him at trial. The belief was said to have been confirmed by the trial judge. In fact, as the transcript shows, the judge merely indicated that any attempted use of the evidence would be subject to all proper objections as to admissibility and that such questions would be decided at the trial. This was the proper course.
23. Mr Wells also complained that the trial judge should have adjourned the application as the appellant requested to enable the appellant to obtain a report as to his means by an independent accountant. The history which I have recounted above, demonstrates that the appellant had had ample time to procure any report or evidence which he desired. The judge was right not to permit the trial to be further delayed.
24. In my opinion the appellant failed to bring himself within the Dietrich principle and his lack of legal representation did not in the circumstances warrant a stay of the proceedings or an adjournment of the trial.
25. Mr Wells contended that the trial was rendered unfair by reason of the appellant's ill health which hampered him in the conduct of his case.
26. The appellant was not in good physical condition. He suffered from hypertension caused or contributed to by his lifestyle and particularly excessive tobacco and alcohol intake. He also suffered from a condition known as "sleep apnoea" which causes interrupted sleep, excessive fatigue, headache and difficulty in concentrating.
27. When the trial judge delivered his ruling on the Dietrich application on 17th June 1993, Mr Abbott QC and Mr Kerin withdrew, having been briefed to appear only on that application. Thereafter the appellant conducted his various preliminary applications in person. When they had been disposed of and the trial was at length ready to start before the jury, Mr Lister, of counsel, appeared for the appellant to seek an adjournment of one month to enable the appellant to bring his hypertension under control. This was granted. At the resumption on 28th September, Mr Lister again appeared and sought a further adjournment. One ground of this application that there was some prospect of the appellant raising sufficient funds to enable him to be represented at trial. The judge rejected this ground as it did not appear that there was any immediate prospect of representation being arranged and the position as to representation had not materially changed. The second ground was the appellant's ill health. No medical evidence was called and it was not suggested that evidence was available to establish that the appellant's health would be seriously impaired by conducting his defence. There was no evidence that his health precluded him from conducting his defence. The learned judge properly rejected that ground also. An application to the Supreme Court for judicial review of the ruling was dismissed. The jury was finally empanelled and the prosecution's opening address begun on 30th September.
28. During the final address of counsel for the prosecution on 13th December the appellant sought an adjournment on the ground that he was vomiting blood. His general practitioner told counsel for the prosecution that the symptoms were consistent with a peptic ulcer and that a barium X-ray was required. Arrangements were made for that examination by the appellant's doctor under the supervision of a specialist engaged by the Director of Public Prosecutions. The appellant did not attend claiming that he had not received the written notification of the arrangements. The judge refused the adjournment and informed the appellant that he was at liberty to apply for adjournment on medical grounds at any time but that any such application would have to be supported by oral medical evidence.
29. The learned judge had the responsibility of holding a balance between difficulties created by the appellant's ill health and the interests of the community in ensuring that offenders are brought to justice. He was in the best position to judge the bona fides of the appellant and the extent of any impairment of his capacity to conduct his case. A perusal of the transcript shows that the appellant conducted his case with vigor and a considerable degree of skill. There is no apparent indication of being hampered by ill health.
30. Mr Wells argued that the combination of the complexity of the case, the lack of legal representation and the appellant's ill health, resulted in the trial miscarrying thereby depriving the appellant of a chance of acquittal which would have been fairly open to him. The case was undoubtedly complex, but I doubt whether the appellant's health impaired his performance. It was a complex trial and it was unfortunate that it had to proceed with the appellant unrepresented. If he had been unable to obtain legal representation through no fault on his part, I would not have hesitated in holding that he had not had a fair trial due to lack of representation. The appellant, however, deprived himself of representation by his own actions. The community is entitled to insist that a person accused of crime faces trial. An alleged offender cannot be permitted to escape trial by not taking the appropriate steps to obtain legal representation. The learned judge conducted the trial with exemplary patience and consciousness of his responsibility to the unrepresented accused. He afforded him every courtesy and assistance. He gave the appellant considerable latitude and significant indulgences. There was a "lay day" each sitting week to assist him and many of the sitting days were not full days. Regular adjournments were granted at the request of the appellant to give him time for reflection and preparation. The judge gave him helpful and appropriate advice as required. The trial was conducted with conspicuous fairness and consideration for the unrepresented accused. The trial judge did everything possible to ensure a fair trial despite the lack of representation. The only disabilities which the appellant suffered were those which he imposed on himself by depriving himself of the opportunity for legal representation. The trial was as fair as it could be in the circumstances created by the appellant's conduct. He has no justifiable complaint about the fairness of the trial.
31. The appellant, before the jury was empanelled, sought a permanent stay of the proceedings on the ground of delay, misuse of warrants and bad faith on the part of the prosecution. The learned judge, after many days of evidence and argument, dismissed the application.
32. Mr Wells' first argument on this issue was that the hearing miscarried because the judge should have disqualified himself. On 20th August the appellant in fact asked the judge to disqualify himself on the ground that a series of adverse rulings and the judge's assessment of the appellant's credibility had indicated bias. The judge declined to do so and gave written reasons. Mr Wells argued that the adverse view which the judge formed of the appellant's evidence on the Dietrich application required the judge to disqualify himself from hearing and determining the stay application. I think that that point is concluded against the appellant in this Court by the case of R v Hutchison (1993) 171 LSJS 364 applying R v Masters and Ors (1992) 26 NSWLR 450 esp at p472.
33. It is established that delay in bringing a prosecution is not of itself a ground for a stay; Jago v The District Court of New South Wales (1989) 168 CLR
23. There must be other factors which would render the continuation of the proceedings unfair or oppressive. "The test of fairness which must be applied involves a balancing process, for the interests of the accused cannot be considered in isolation without regard to the community's right to expect that persons charged with criminal offences are brought to trial." Per Mason CJ at p33. Nothing has been put forward in the present case which could be regarded as rendering the trial unfair or oppressive by reason of such delay as there has been in investigating, initiating and prosecuting this case arising out of the involved affairs of Mr Hodby.
34. The appellant pursued with vigor the allegation that the prosecution was not brought in good faith but for an improper purpose. The hearing of the appellant's application commenced on 25th June 1993 and proceeded for 10 sitting days. The appellant gave evidence and called numerous witnesses. He was given every opportunity to formulate and present his case. As the hearing progressed the appellant's case became more confused. It consisted of vehement statements and allegations which were unsubstantiated and many of which were patently incapable of substantiation. At one stage, in order to endeavour to introduce some order and focus into the proceedings, the judge directed the appellant to formulate particulars of his allegations. Many of the particulars when furnished were so obviously in conflict with known facts or incapable of substantiation that the judge struck them out. The appellant never approached substantiation of his allegations against the Australian Securities Commission and the Director of Public Prosecutions.
35. On the appeal Mr Wells made the following submission.
"The appellant's case was, therefore, that the prosecution was an
abuse of process because:
. the purpose of the prosecution was to protect the arrangement
between the CAC and Hodby;
. the long delay before the charge was laid was explained by the
circumstances outlined above and was not only, therefore,
unjustified, but prevented a fair trial because documents, including
privileged documents, illegally seized under search warrant, were
either in the hands of the prosecution, or no longer available to
the appellant." Mr Wells submitted that the appellant had been prevented from presenting this case. It is by no means clear to me that that was the case which the appellant sought to present. I am satisfied that he was given every opportunity to present any reasonable case and was prevented only from abusing the processes of the Court by making wild allegations and compelling the attendance of witnesses for no legitimate forensic purpose.
36. Three incidents arose in the course of the trial which, in the submission of Mr Wells, should have led to a juror being excused or to the discharge of the jury, for apparent bias. The test to be applied in each case is whether the circumstances might create in the mind of a fair minded and informed observer a reasonable apprehension of a lack of impartiality on the part of the juror or jury; Webb and Hay v R (1994) 122 ALR 41.
37. The first incident occurred on the second day of the trial. A juror sent the following note to the judge: "I have concerns with this trial. I work for a department that has had dealings with Mr Karounos in regards to industrial matters. I do not wish to jeopardize the trial and would like to discuss this matter." The juror was questioned by the judge in the absence of the jury. She said that she was employed by the Department of Labour. The following questions and answers then occurred.
"Q. Are the dealings that you say that department has had with Mr
Karounos such that you would find it difficult to discharge your
duty as a juror in this trial.
A. I think I might have trouble with that. I wasn't aware of this
before. I apologise.
Q. You don't need to apologise. Of course, jurors can't be aware
of everything. We do our best to eliminate potentially difficult
problems. What would the difficulty be because of your awareness of
these dealings with Mr Karounos. Would you not be able to be
unprejudiced in your approach to your task.
A. I didn't really discuss the case. When the Plympton Park Centre
came up, it is an area that my region deals with, and I just wanted
to make sure whether any of the members at my work place were
involved with any dealings with Mr Karounos. All I mentioned was
Mr Karounos's name, and they told me that they had visited Plympton
Park Centre for award matters. I didn't say any more, but they
also brought in Mr Hodby, and it has concerned me whether I should
be siting on this trial or not.
Q. I understand your concern, and, quite correctly, you have raised
the matter. Could I ask a question from another point of view. Is
there any information that has come into your possession whilst
working with the Department of Labour that relates to Mr Karounos
and his dealings with the department.
A. I didn't know about Mr Karounos beforehand. There is nothing
that relates to this particular trial.
Q. The information that has come to your possession, does that
embarrass you as a juror who is expected to bring an unbiased,
unprejudiced and open mind to their task as a member of the jury.
A. I don't think it is as such, no.
Q. Now being aware of these dealings and this contact between Mr
Karounos and the department, you still feel that you can bring an
open mind to your task as a juror.
A. I think I could, yes." After discussion with counsel there were further questions and answers.
"Q. I want to ask this question in a general sort of way. When
people have expressed opinions about somebody else, they often fall
into one of three categories: They said something adverse,
positive, or they may have said something which is quite neutral.
Turning your mind to those three sorts of categories, did these
comments fall within one of those three categories.
A. It wasn't neutral, and it wasn't a positive response.
Q. Are you telling me that these comments were critical of Mr
Karounos.
A. They said it in a joking manner, but they weren't like pointing
the finger or anything, but it was in a joking manner that they
were critical, yes.
Q. You say that, despite those comments, you still feel that you
can discharge your duty as a juror and bring an unprejudiced mind
to your responsibilities.
A. Yes, I do.
Q. But, in doing so, you would have to put out of your mind, or put
into the basket for rejection, any such critical comments that you
have heard, is that what you are saying to me.
A. Yes."
38. The appellant, after consideration, asked that the juror be excused. The learned judge decided to allow the juror to continue. He placed weight, no doubt based on his assessment of the juror, on her assurance that she could bring an unprejudiced mind to her responsibilities as a juror.
39. I think that courts should be slow to attribute to the reasonable observer an apprehension that a juror will be influenced by things heard outside the court. Jurors nowadays are free to lead their ordinary lives when not sitting in court. They are rarely locked up during a trial. They are exposed to media reports and to ordinary social intercourse. They will inevitably hear comments about the case and the persons involved. Such exposure may be minimized by the usual warnings to avoid discussing the case with persons other than fellow members of the jury, but it will often be impossible to avoid hearing some comment from family, friends and fellow workers. In most instances the reasonable observer would be prepared to accept that a juror will heed the directions to ignore anything seen or heard outside the court and to decide the case according to the evidence. Most jurors are sensible enough to realize that comments outside the court may not be soundly based and that the only safe guide is the evidence in the case. If juries or jurors were discharged every time a juror were sufficiently candid as to disclose that a comment had been made outside the court, few trials would be safe. I suspect that jurors simply ignore anything heard outside the court and do not report it.
40. The unusual feature of this incident is that the juror was sufficiently conscientious to report it. I get the impression from the transcript that she did so not because she doubted her own capacity to bring an impartial mind to bear, but because she feared that her continued presence on the jury might jeopardize the trial. There is considerable reassurance in her possession of such a highly developed sense of responsibility. The fair minded observer would take all those matters into account and would also be influenced by "the opinion of the judge - the person on the spot - that the juror would be able to approach the issues dispassionately" and "would assume that the juror would do her best to follow the judge's direction ..."; Webb and Hay v R supra per Mason CJ and McHugh J at p51. The learned judge gave the following direction:
"You must weigh and consider the evidence without being affected by
sympathy or prejudice. You should adopt a dispassionate view of the
evidence, and you should decide the case on the evidence, and the
evidence alone. You should put out of your minds anything that you
may have seen or heard outside this courtroom. You should ignore
anything that you may have heard by way of comment by members of
your families, your friends, your acquaintances. You should apply
the law to the facts in this case. You should decide the case on
the evidence, and the evidence alone." I think that the judge's decision was correct.
41. During the course of the trial on 2nd December 1993, the appellant raised concerns about a juror by the name of Paul Thomas Haskett. He said that he understood that the juror's brother Peter was Deputy Director of the Legal Services Commission and that the juror's sister was employed by the Police Complaints Authority which considered a complaint by Barbara Hunt, the alleged co-conspirator, about police conduct with respect to this matter. He also said that among the victims of the Hodby frauds were a Ronald Sylvester Haskett who is a first cousin of the juror's father, and Margaret Jean Haskett his wife.
42. Peter Haskett attended on 3rd December in response to a subpoena issued by the appellant. He was represented by counsel. I quote two passages from the transcript of what his counsel told the judge.
"In relation to the matters, I can briefly tell your Honour that,
firstly, Mr Haskett is the deputy director of the Legal Services
Commission; that he has had some involvement with the legal aid
application of Mr Karounos, and the withdrawal of aid; that Mr
Haskett's sister, Christine, was employed at the Police Complaints
Authority, but is currently working and living in Sydney; that Mr
Haskett's brother, Paul, is a serving member on the jury; and that,
lastly, I am instructed that, while Mr Haskett does know of a Mrs
Jean Haskett, he does not know to whom she is married, that is the
name of the person to whom she is married, nor the relationship to
him or to any other member of his family, and nor does he have any
knowledge of any member of his family being a Hodby victim."
......
"My instructions are that some time in November, certainly after the
Melbourne Cup day, which is the date by which my client can recall,
a conversation with his brother took place casually, and the content
of the conversation was to do with family arrangements for
Christmas. In the course of that conversation, there might have
been some discussion about whether or not Mr Haskett's brother would
be available at Christmas time, and in the course of that
conversation the length of this particular trial was mentioned.
Other than that, my instructions are that at all times Mr Haskett
has not discussed the trial, or the Karounos matter, at all, with
anybody, including his brother, I mean outside the Legal Services
Commission."
43. Peter Haskett was sworn to enable the appellant to ask questions. It emerged that the appellant had met a Jean Haskett at family reunions. He did not know whether she was identical with a Marguerite Jean Haskett, a Hodby victim.
44. Christine Haskett, the juror's sister was living and working in Sydney. The judge admitted an affidavit from her in which she deposed to a vague recollection that a Mrs Barbara Hunt made a complaint to the Police Complaints Authority and that she had no recollection of the date of the complaint, the name or names of the police officer or officers involved or of the substance of the allegations. She stated that she had never communicated anything to her brother Paul, the juror, about the complaint or complaints by Mrs Hunt.
45. Peter Haskett was bound by the prohibition against communication in s31a(2) of the Legal Services Commission Act. There were no grounds for supposing that he had acted in breach of that prohibition by communicating information about the appellant to his brother. Likewise there was no reason to suppose that Christine Haskett would have made any such communication and every reason to accept her sworn statement. The references to Hodby victims were so unsubstantial and so lacking in prejudicial capacity as not to warrant further inquiry. Matters of this kind arising during a trial have to be handled with prudence and delicacy to avoid any prejudice arising from the inquiries themselves. The judge wisely decided that there was insufficient substance in the concerns expressed by the appellant to justify questioning the juror. I think that the judge handled the matter wisely and that there were no grounds requiring that the juror be excused or the jury discharged.
46. On 9th October, a juror disclosed that she had been employed at the Torrensville branch of the National Bank and thought that the appellant may have been a customer. It transpired that she had vague recollection of the name Karta Pty Ltd but did not know whether she had met the appellant or had dealings with him. She had no knowledge of anything which would affect her ability to discharge her duties as a juror. The appellant made no application.
47. In my opinion no criticism could attach to the judge for the way in which he handled these matters. There was nothing in the facts and circumstances disclosed which could cause a fair minded observer to apprehend that the jurors concerned or the jury generally might not bring a fair and impartial judgment to the case.
48. The appellant seeks leave to appeal on a ground in respect of which leave was refused by a single judge, namely that the judge should have stayed the proceedings because leading counsel for the prosecution, Mr Simon Lane, declined to withdraw from the case.
49. The facts upon which reliance is placed are that Mr Lane was at relevant times Deputy Commissioner and Acting Commissioner for Corporate Affairs and as such responsible for and involved in the investigations undertaken by the Corporate Affairs Commission into the financial affairs of Mr Hodby and his companies and of the appellant and the companies with which he was associated. In that capacity he was responsible for and involved in civil litigation with the appellant, Mrs Hunt and their associated companies arising out of the operation of those companies and the investigation of them.
50. Mr Wells sought to apply the test which is applicable to the disqualification of a judge or juror, to the position of counsel for the prosecution. He contended that if a fair minded observer, knowing of Mr Lane's involvement, might reasonably apprehend that Mr Lane might not act, or have acted, consistently with his duties as counsel for the prosecution, the trial should have been stayed until Mr Lane withdrew. No authority was cited for such a novel proposition and I can see no warrant in principle for applying the test for judicial disqualification by analogy to prosecuting counsel.
51. The responsibilities of a judge or juror are different in kind from the responsibilities of prosecuting counsel. A criminal trial is an adversarial proceeding and prosecuting counsel is in an adversarial relationship with the accused. Prosecuting counsel is not expected to be free of partisanship in the same way as is a judge or juror. His partisanship should be tempered by his duty to act with fairness and detachment, to endeavour to establish the whole truth and to ensure that the trial is fair; Whitehorn v The Queen (1983) 152 CLR 657 per Deane J at 663-4; R v Berens and Ors (1965) 176 ER 815. Nevertheless counsel's duty is to present the case for one side, namely the prosecution, in the adversarial contest, not to adjudicate impartially upon the issues between the parties.
52. Pre-trial involvement in the case should not disqualify a barrister from appearing as counsel for the prosecution at trial. It is entirely appropriate, for example, that legal officers on the staff of the Director of Public Prosecutions who have advised the police or other investigators during the investigation process, should appear as counsel at the trial. The same applies to independent counsel who have given such advice. It may be seen as an advantage in the case of complex cases for counsel who is to prosecute at trial to be involved at an early stage in advising, and indeed in supervising the process of investigation and securing of evidence. The role of prosecuting counsel is not compromised by such involvement because prosecuting counsel is not required to be free of suspicion of bias in the same way as a judge or juror.
53. The fair trial of an accused person may be prejudiced by the conduct of counsel for the prosecution to such an extent as to cause a miscarriage of justice; Richardson v R (1974) 3 ALR 115 at p120; Hall v US 419 Fed Rep (2d) 582; Boucher v The Queen (1955) 110 CCC 263. In this case Mr Lane had left the Corporate Affairs Commission and was practising at the Bar when he was briefed for the prosecution. No criticism was made of his conduct during the trial. On the contrary the transcript demonstrates that he conducted the prosecution with restraint and fairness and due respect for the difficulties of an unrepresented accused. No case has been made for impugning the judge's ruling on this point and no miscarriage of justice has resulted from Mr Lane's discharge of the role of prosecuting counsel. Leave to appeal on this ground should be refused.
54. Leave to appeal was also refused by the single judge on a ground which asserts that the jury should have been discharged when a bailiff improperly served a process unconnected with this case, on the appellant at the bar table in the present of the jury. The appellant seeks leave from this Court. Although on the bench, the judge was unaware of what had occurred. It is unlikely that the jury would have been more aware. In any event, there was nothing in the circumstances to indicate that the appellant could have suffered prejudice in the minds of the jury. Leave to appeal on this ground should be refused.
55. Mr Wells challenged the ruling whereby the learned trial judge permitted counsel for the prosecution a final address, the accused being unrepresented. Mr Lane addressed the jury at the conclusion of the evidence and the appellant then addressed the jury. Mr Wells contended that a final address by counsel for the prosecution where an accused person is unrepresented is contrary to the established practice in this State and he referred to R v Turner (1977) 16 SASR 444 at 445-6. He referred also to the Victorian cases of R v Ginies
(1972) VR 394 at 401 and R v Marijancevic (1982) VR 936 at 939. That this was by no means an invariable practice is made clear by the High Court's judgment in Varley v R (1976) 12 ALR 347 esp at pp350-51. Be that as it may, the position has been altered in this State by the enactment of Statutes Amendment (Right of Reply) Act 1992 which came into operation on 1st January 1993.
56. Prior to the enactment of that Act s288(2) of the Criminal LawConsolidation Act provided:
"(2) If any accused person is defended by counsel, but not
otherwise, it shall be the duty of the judge, at the close of the
case for the prosecution, to ask the counsel for each accused so
defended whether he or they intend to adduce evidence, and in the
event of none of them thereupon announcing his intention to adduce
evidence, the counsel for the prosecution shall be allowed to
address the jury for a second time for the purpose of summing up the
evidence." This subsection established the right of counsel for the prosecution to a final address notwithstanding that the accused did not call evidence, where the accused was represented by counsel. It made no provision for the case in which the accused was unrepresented whether or not the accused called evidence. The order of addresses was dealt with by subsection (4) and by section 20 of the Evidence Act, and was made to depend on whether the defence called evidence in addition to that of the accused.
57. These provisions were repealed by the Act which came into force on 1st January 1993 and a new section 288b was introduced into the Criminal Law Consolidation act as follows:
"288b (1) At the conclusion of the evidence, the prosecutor and the
defendant are entitled to address the Court on the evidence.
(2) The address for the prosecution is to be made before any address
for the defence." This new section, in my opinion, does two things. First it establishes a clear right to a final address by counsel for the prosecution irrespective of whether the accused is represented. Second, it fixes the order of addresses irrespective of whether the accused calls evidence.
58. Mr Wells argued that the section did no more than confer on the Court a discretion to permit a final address by the prosecution. If it did no more than that it would achieve no more than is established by Varley's case. The section confers in the plainest language an entitlement on the prosecutor. Mr Wells contended that there was sufficient ambiguity to justify the Court in looking at the second reading speech to identify the mischief which was aimed at. I find no ambiguity in the section. I have nevertheless looked at the second reading speech. There is some ambiguity in the speech but nothing to cast doubt upon the intention to confer on the prosecution a right to a final address.
59. Mr Wells contended that the trial was vitiated by a number of non-directions and misdirections.
60. He complained that the judge should have warned the jury against acting on any impressions they may have formed about the accused's character and demeanour through observing him in difficult and unnatural circumstances as a lay advocate in his own cause. I see no need for such a warning. A jury is entitled to make its own observations of an accused person in Court and to draw deductions from those observations. That is an inevitable part of the forensic process. It would be impossible and undesirable for juries to ignore what they see and hear in the courtroom. No doubt the fact that the appellant was conducting his own case increased the jury's opportunities for observation of him, but there is no reason why they should not take advantage of those opportunities. No particular direction was called for.
61. Mr Wells complained about the learned judge's directions as to the use the jury might make of what the appellant said when first approached by the police. The appellant said:
"On the advice of my solicitor, I do not intend to answer any
questions. I understand that, irrespective of what answers I give
to your questions, it is your intention to lay charges against me
and that you will not review that decision. I understand that the
matters to which your questions relate are now over 43 months old
and, notwithstanding that you have had ample opportunity to do so,
at no time throughout those 43 months have you, or any other person,
directed any questions or enquiries to me in respect of those
matters. I, of course, deny any charges. I believe that the
decision to charge me is politically and otherwise motivated, and
that the laying of charges against me are an abuse of process.
Accordingly I repeat, on the advice of my solicitor, I don't wish to
answer any of your questions." The learned judge clearly directed the jury that the appellant in declining to answer questions was exercising a legal right and that no inference adverse to him was to be drawn from the exercise of that right. His Honor then went on:
"However, the accused, according to Detective Sergeant Gibb's
evidence, elected to make a statement, whilst at the same time
indicating that he declined to answer any questions. You are
entitled to draw whatever inferences are reasonably open from that
response by way of statement that he made; for example, that he was
seeking to divert the focus of the prosecution away from the real
issue of his guilt, that he was seeking (unreasonably) to adopt a
policy of 'attack being the best form of defence' by suggesting
political and other motives to the prosecuting authorities, or to
adopt other diversionary tactics inconsistent with his innocence.
So it is that I explain to you that it is the law that the mere
refusal by an accused to answer police questions relating to the
alleged commission of an offence, or to advance an innocent
explanation of the circumstances which cast suspicion upon him,
affords no basis for an inference of his guilt. But it is also the
law that, if an accused does not exercise his right of silence in
an unreserved fashion, and chooses to respond selectively to
questions asked or allegations made (which was not the case here)
or chooses (as was the case here) to make a statement at the same
time as exercising his right to decline to answer questions, his
conduct (and, specifically, what he does choose to say) is evidence
to which you may have regard and from which, according to the
circumstances as you find them to be on the evidence, an inference
may be drawn that he had a consciousness of guilt."
62. In my opinion that was a proper direction. It did not in any way diminish the force of the direction that no adverse inference was to be drawn from silence. The appellant chose to go on the attack and make allegations which the jury might well have concluded to have been a smokescreen to conceal his guilt. Minds may differ as to what inference is to be drawn from his conduct but that was a matter for the jury. It was proper for the judge to direct them on the point; indeed it would have been difficult to refer intelligibly to the significance of his refusal to answer without also referring to the allegations which accompanied it and the jury's right to draw such inferences as it saw fit from the making of those allegations.
63. The learned trial judge gave the jury a lengthy direction as to what he described as "the co-conspirator's rule of evidence", permitting use against the accused of acts and declarations of co-conspirators outside his presence. He identified the evidence under consideration as follows:
"The Crown says that there is reasonable evidence given by Mr Hodby
which has the effect of bringing into play the co-conspirator's rule
of evidence, which, as I explained to you yesterday, allows you to
use against the accused, George Karounos, the otherwise inadmissible
evidence of documents signed by Mrs Hunt, including the Campbell
Park contract of sale and purchase (Exhibit P78) - which you may
conclude, by a consideration of it, bears the signature of Mrs Hunt
- the Campbell Park transfer (Exhibit P77B), and the Campbell Park
mortgage (Exhibit P77A), the document which, according to the
evidence of Mr Hodby in particular, was signed at 30 Chesser Street
on 29 August 1986, each of those documents, according to the
undisputed evidence, being signed by Barbara Hunt, or bearing her
signature." His Honor told the jury that that evidence could be used against the accused only if there was other reasonable evidence of his complicity in the alleged conspiracy. He then directed them as follows:
"I tell you, ladies and gentlemen, that there is reasonable and
independent evidence (if you accept it as true and reliable) in the
form of Mr Hodby's evidence of the so-called 'secret meetings' and
in the form of the evidence of Mr Doubell, which provides some
independent support for the evidence that Mr Hodby and the accused
were together alone in the Gold Members' Room on the occasion of one
of the alleged 'secret meetings'. There is further reasonable
evidence in the form of Mr Hodby's evidence, supported, as that is,
by the evidence of Mr McGlashan and Mr Opie, to a degree, evidence
which is independent of the acts or statements of the alleged
co-conspirator, Mrs Hunt, that the accused was present at the office
in Chesser Street when various documents were executed, from which,
in conjunction with the evidence of the alleged 'secret meetings',
it could be inferred that the accused participated in the alleged
conspiracy."
64. In the passage just quoted, the learned judge made the use of acts and declaration by others in furtherance of the conspiracy, against the accused depend upon the jury's acceptance of certain evidence. That was an incorrect direction. The question of admissibility was for the judge and not the jury. If the question arose as to the use against him of acts and declarations outside the appellant's presence, it was the judge's responsibility to decide whether a foundation had been laid of reasonable evidence, other than those acts and declarations, of the appellant's participation; Ahern v R (1988) 165 CLR 87. If that required some provisional assessment of the credibility of witnesses, it was the judge's responsibility to make that assessment.
65. I do not see, however, how the direction given could have operated to the detriment of the appellant. The notion of reasonable evidence could not, as Mr Wells suggested, confuse the jury as to onus of proof. The question of the reasonableness of the evidence was not left to the jury but only its acceptability. The judge directed that, if accepted, it amounted to reasonable evidence. The directions as to onus of proof of the charge were clear and emphatic and left no room for confusion.
66. The evidence to which the learned judge related "the co-conspirator's rule" was clearly admissible against the appellant. It was admissible as evidence of facts establishing the existence of the conspiracy and for that purpose did not depend upon the co-conspirator's rule; Ahern v R supra at p93. This was a case in which proof of the existence of the conspiracy necessarily proved the appellant's participation in it; Ahern v R supra at p94. The appellant and Hodby were the principal parties to the alleged conspiracy. If the appellant was not a participant, there was no conspiracy. The acts of Mrs Hunt to which the judge referred, are referable to proof of the existence of the conspiracy and its implementation, rather than the appellant's participation in it as a separate issue.
67. So far as the acts referred to might be thought to tend to prove the appellant's participation, as an issue apart from the existence of the conspiracy, they were clearly admissible against the appellant on that issue. The evidence which the judge told the jury amounted to reasonable evidence, if accepted, was uncontradicted and must inevitably have been accepted by the judge as amounting to reasonable evidence of the appellant's participation. The learned judge's mistake in leaving the question of the acceptability of that evidence to the jury could not have operated to the detriment of the appellant. The mistake therefore did not give rise to a miscarriage of justice.
68. Mr Wells complained of a remark in the course of the judge's reference to certain documents that "sometimes documents speak louder than words." There is no substance in that complaint.
69. The appellant, in the course of his cross-examination of Mr Hodby and in his final address made suggestions which were not substantiated by evidence. The appellant did not give evidence. It was therefore necessary for the learned judge to direct the jury that suggestions made in that way were not evidence. He did so in three passages in the summing up to which Mr Wells took exception. The first such passage is as follows:
"The accused put to Mr Hodby in cross-examination that none of the
things he had testified to having been said in relation to Exhibits
P128 and P129, the letters that you looked at just a little while
ago, were said. The accused suggested to Mr Hodby that his evidence
appertaining to those letters was untrue. He suggested that Mr
Hodby's evidence was false when he (Mr Hodby) had said in evidence
in chief that he signed those letters, P128 and P129, in the
presence of Mr Hunt, Mrs Karounos, Mr McGlashan and the accused.
Mr Hodby denied those suggestions.
This leads me to tell you that there is no evidence before you from
any witness either to support the suggestion put by the accused or
to controvert the denials. You ought not to treat such suggestions
as if they were evidence." The learned judge commented upon statements by the appellant in his final address that Hodby was lying about the alleged dishonest agreement and the meetings at which it was allegedly arrived at and the implication that no such agreement or meetings took place. He said:
"I must tell you that there is no evidence to the effect that 'the
secret meetings' did not take place, or to the effect that no
agreement was reached. The prosecution evidence to the effect that
they did take place, and that an agreement was reached, has simply
not been contradicted or explained." He further said:
"In so far as that assertion might suggest to you that there was
some evidence to support an alternative scenario of the events said
to have taken place in the Gold Members' Room during the two 'secret
meetings' consistent with innocence, namely that such meetings were
not held, that nothing was agreed, and that Mr Hodby was necessarily
telling lies, I think, ladies and gentlemen, that the accused went
further than he should have, because he was purporting to introduce
new evidence in his Address to you.
I tell you that the suggestion made by the accused in his Address to
the effect that Mr Hodby was telling lies, in particular about the
alleged 'secret meetings' and the agreement reached at the second
'secret meeting', is not evidence that the meetings did not take
place, and that no agreement was reached. There was simply no
evidence to the effect that the 'secret meetings' were not held, or
to the effect that, to suggest that they were held and that an
agreement was reached, was a lie. Mr Hodby's evidence, and that
given by Mr Doubell, and that contained in the Domitix minutes (the
Agenda) remains uncontradicted and unexplained." His Honor also commented on a submission to the jury by the appellant that "if there is anything sinister about the making of that loan of $520,000 then Mr Hodby, and Mr Hodby alone, knew about it." His Honor said:
"The implication from this submission, ladies and gentlemen, is that
neither the accused nor Mrs Hunt knew about it. For reasons given
elsewhere in my summing up, I am obliged to tell you that there is
no evidence that neither the accused nor Mrs Hunt knew about it, and
it is legitimate for you to have regard to the fact that the accused
has given no evidence or explanation of the Crown case, apart from
what he told the police, as a consideration in making the inference
of guilt from the evidence for the prosecution less unsafe than it
might otherwise appear to be.
I tell you that there is no evidence to support the alternative
scenario that neither the accused nor Mrs Hunt knew that there was
something sinister about the making of the $520,000 loan in the
sense that the security offered was inadequate. The prosecution
scenario to the effect that the conspirators knew that they were
parties to an agreement for the performance of a dishonest act or
course of conduct, that they knew that their involvement was part of
a larger dishonest scheme, that they were acting dishonestly, and
that they knew that the scheme or act might result in economic
prejudice to the alleged victims, has simply not been contradicted
or explained."
70. Mr Wells argued that the effect of those passages was to reverse the onus of proof and to remove from the jury the function of determining whether Hodby's evidence should be believed and acted upon.
71. There is to my mind no question of reversal of onus of proof. The learned judge was required to explain to the jury that suggestions made in cross-examination and statements made in the course of the address, possessed no evidentiary force. He quite properly pointed out to the jury that the evidence of prosecution witnesses as to dealings with the appellant was uncontradicted. That is not a reversal of onus. It is legitimate to assess evidence according to the power of a party to contradict it and that party's failure to do so. That process does not impinge upon the ultimate onus of proof. The learned judge gave clear and emphatic directions as to the onus of proof.
72. If these passages were considered in isolation there might be a question whether the jury would sufficiently understand that notwithstanding the absence of contradiction, they were required to decide whether or not to accept the evidence of Hodby and other prosecution witnesses. The summing up, however, must be considered as a whole and that was made plain in other passages.
73. The learned judge gave a clear and proper direction as to the significance of the appellant's failure to give evidence. It would have been clear to the jury from a number of passages in the summing up that part of their responsibility was to assess and decide upon the acceptability of the evidence of Hodby and of other witnesses. It is sufficient to quote the very last direction given to the jury before retirement:
"If you disbelieve Mr Hodby's evidence, in particular, regarding the
facts appertaining to the alleged 'secret meetings', or that they
took place when and where they are alleged to have taken place, if
you disbelieve Mr Hodby as to what was agreed, then you should bring
in a verdict of not guilty.
If you conclude that it is reasonably possible that Mr Hodby was not
telling the truth when he testified as to what was agreed at the
so-called 'secret meetings', then you should find the accused not
guilty.
If you, as reasonable men and women, think that the evidence you
have heard is open to any other reasonable conclusion (or rational
explanation) than that the accused is guilty, then he should be
acquitted; that is to say, found not guilty.
If you are not satisfied that the inference of guilt is the only
inference open to you upon a consideration of all the proven facts
in the case, then he should be acquitted and found not guilty.
If you have a reasonable doubt about any of the elements of the
crime charged, then, of course, you should give the accused the
benefit of the doubt and find him not guilty.
But if you believe and accept the evidence of the Crown witnesses
(in particular, Mr Hodby) and if you are satisfied beyond reasonable
doubt to draw the inferences from the proved facts which the Crown
invites you to draw, then it is open to you to find the accused
guilty."
74. Finally it is necessary to turn to the submission that the conviction is not supportable in law or is unsafe or unsatisfactory.
75. The appellant is an experienced businessman. He became bankrupt in 1981. Nevertheless he continued business activities through companies. It emerges from the evidence that he was the controlling and directing force in those companies. In the early 1980's he planned and partially implemented a major development at Plympton known as the Plympton Super Centre. There was an associated development involving the erection of 13 motel units. He also had plans for a tourist development at Campbell Park. The appellant's companies were able to borrow certain amounts from financial institutions, but a large part of the money needed for the project came from loans of funds which had been placed by clients with Mr Hodby for investment.
76. Mr Hodby carried on business as a land and finance broker. Clients entrusted money to him for investment on adequate first mortgage security with regular payments of interest. He lent large sums of money to the appellant's companies to finance the abovementioned project. The status of the security obtained varied from time to time, but at times there were second mortgages or unregistered mortgages in respect of land over which there was a first mortgage to other mortgagees. The interest paid by the appellant's companies was often less than Hodby had to pay to his clients and payments by the appellant's companies were irregular. Hodby used money entrusted to him by clients to keep payments of interest going to his clients. The cumulative effect of these defalcations eventually led to his bankruptcy. He confessed his defalcations to the police in October 1986. He was in due course sentenced to imprisonment. He gave evidence at this trial under an immunity against prosecution for his part in the alleged conspiracy.
77. Hodby explained the nature of his business to the appellant. In the course of their dealings there was much discussion about security for the monies advanced. The jury would have had no difficulty in inferring that the appellant was well aware that it was Hodby's duty to obtain adequate security over real estate for the protection of his clients. This awareness must have been reinforced by the events of May to August 1986.
78. In May 1986 Hodby made known to the appellant that there was a shortfall of clients' monies and that he could no longer continue the business. The appellant obviously wanted continued access to the monies of Hodby's clients. He proposed that Hodby's business be acquired by a company Domitix Pty Ltd of which Barbara Hunt, Sophia Karounos and Hodby would be directors. The transfer took place. The appellant attended all Board Meetings of the company. Hodby was instructed that he was not to sign cheques without the authorization of the other directors. He was also instructed that all clients' monies were to be invested in the motel unit project referred to above.
79. There was an examination of the books of the Hodby business by auditors employed by Domitix. They reported on the state of the business and advised that all clients should be asked in writing to state the amounts which they had invested and the securities for their loans. Hodby greeted this recommendation with dismay as it must result in the exposure of his breaches of trust. The auditors insisted and indicated that they would resign if the recommendation was not acted upon. The appellant obviously did not want the source of his funds to dry up but the auditors' resignation would be disastrous. He therefore proposed that the business be transferred back to Hodby. This was finally done on 29th August. This episode must have deepened the appellant's awareness of Hodby's duty to obtain adequate first mortgage security for investments of clients' monies and of the losses facing the clients in consequence of the loans to the appellant's companies.
80. At about this time the transaction occurred which is the subject of the charge. Hodby lent to Karta Pty Ltd, one of the appellant's companies, Barbara Hunt and Sophia Karounos the sum of $520,000. Karta Pty Ltd used $300,000 of this money to purchase a property at Campbell Park. The only security for the loan was a mortgage to Hodby's clients over the Campbell Park property. There was evidence that the true value of the property did not exceed the price paid. The date of the mortgage was 12th September 1986. At the same time Hodby lent a further sum of $240,000 of his clients' money to the same borrowers. Forty thousand dollars of that sum was used to purchase a property at Moana which was the only security given for the loan.
81. Hodby gave evidence of the circumstances in which these transactions occurred. On Tuesday evening the 26th August 1986, after it had been arranged that the business would be transferred back to Hodby, the appellant told Hodby at a private meeting that he wanted a further $400,000 in addition to the existing loans. On the morning of Wednesday 27th August the appellant again met Hodby privately. He told him that the $400,000 could be made available by Hodby lending $520,000 of his clients' money on the security of the Campbell Park property which would be purchased for $300,000, leaving a surplus of $220,000, and lending $240,000 on the security of the Moana property which would be purchased for $40,000, leaving a surplus of $200,000. A total of $420,000 would thereby become available for the appellant's purposes.
82. Hodby's evidence was that he disagreed with this proposal. The appellant then said that they were the terms that he wanted and that "if they weren't agreed to, he would suggest that the auditors proceed with their recommendation of advising my clients of their true position." Faced with exposure Hodby "reluctantly agreed."
83. The learned trial judge correctly directed the jury that it was necessary for the prosecution to prove that the parties to the alleged conspiracy knew that they were participating in a dishonest act and that their conduct might result in economic prejudice to members of the public; R v Allsop (1977) 64 Cr App R 29. The prejudice relied upon by the prosecution was the diminished protection resulting from only partial security as distinct from full and adequate security.
84. Mr Wells argued that the verdict could not be supported having regard to the evidence and that the case ought not to have been left to the jury. The flaw in the prosecution case, in his contention, was the failure to prove that the co-borrowers Barbara Hunt and Sophia Karounos lacked the means to meet the debt. In my opinion the existence of economic prejudice to the lenders did not depend upon the extent of the means of the borrowers. A secured loan is inherently a sounder investment than an unsecured loan irrespective of the financial position of the borrowers. Individuals of apparent financial soundness are sometimes found to be lacking in substance. The financial soundness of people can change quickly and unexpectedly. The inherent virtue of full and adequate security is that the lender can have recourse to an asset of adequate value and is not dependent upon the solvency of an individual or the difficulties of obtaining and enforcing a personal judgment. It was Hodby's duty to ensure that his clients had full and adequate first mortgage security. Knowing this, the appellant agreed with Hodby, indeed put pressure upon Hodby, to apply the client's money to a loan with only partial security. Instead of being fully secured creditors, the lenders were left in the position of being partially unsecured and were thereby exposed to the risks inherent in being an unsecured creditor. That was a dishonest agreement to use the lenders' monies in breach of Hodby's duty to his clients in a way which exposed them to the economic prejudice of becoming partially unsecured creditors instead of fully secured creditors. That, in my opinion, was an agreement to defraud, irrespective of the financial capacity of the borrowers to meet the obligations of the personal covenant in the mortgage.
85. The case for the prosecution depended to a substantial extent on the evidence of Hodby. That evidence came, of course, from a tainted source but it received cogent corroboration from the incontrovertible facts. The documents proved that a loan of $520,000 was made, that the only security was the mortgage on the Campbell Park property and that that property was purchased for $300,000. The valuation evidence, which was not contradicted, proved that the property was not worth more than that. That incontrovertible evidence established the misuse of the monies entrusted to Hodby by its loan on other than adequate security. Hodby's evidence merely supplied supplementary information as to the origin negotiation and motivation of the scheme.
86. There was cogent evidence of a deliberate scheme, not only agreed to but instigated by the appellant, to defraud the lenders by furnishing security, in breach of Hodby's duty to them, of far less value than that needed to provide adequate security to them. The appellant gave no evidence contradicting the incriminating evidence produced by the prosecution, despite the learned judge's clear advice as to the possible consequences of taking that course.
87. To my mind the evidence clearly proved that the appellant and Hodby agreed - I make no comment on Mrs Hunt who is still to stand trial - on a plan by which Hodby would lend $520,000 of his clients' monies on the inadequate security of land acquired for $300,000. The motive was to provide $220,000 towards the $400,000 which the appellant required for business purposes. It was a deliberate scheme devised and instigated by the appellant with knowledge that it involved a breach of Hodby's duty to his clients. The appellant and Hodby deliberately defrauded the lenders by enabling the borrowers to obtain their money without providing adequate security. In my opinion the verdict was fully supported by the evidence. He was properly convicted after a trial which was conducted fairly despite the difficulties created by the appellant's conduct.
88. I consider that all grounds of appeal fail and that the appeal should be dismissed.
JUDGE2 MOHR J I agree.
JUDGE3 OLSSON J This is an appeal against the conviction of the appellant, by verdict of a jury, of the common law offence of conspiracy to defraud. It arises from a prosecution which has had a long and unfortunate history.
2. The specific charge proffered against the appellant was that he and Barbara Joy Hunt ("Hunt"), between 1 August 1986 and 31 October 1986, at Adelaide and other places, conspired together with Ross Daniel Hodby ("Hodby") to defraud those members of the public who had invested moneys with Hodby for the purpose of those moneys being lent on adequate security to third parties by Hodby, by causing moneys in the sum of $520,000, to which those members of the public who had so invested with Hodby were entitled, to be lent to Karta Pty Ltd, Sophia Karounos and Hunt, when they knew that the said loan was not adequately secured.
108. The appellant protested that the matter had arisen at a late stage, he did not understand the "intricacies of law involved" and he was unable to cope. He drew attention to the presence of both Haskett brothers outside the court on the preceding Friday. He applied, in effect, for a mistrial, but said that it was beyond his competence to put detailed arguments. The Crown opposed both the application and any suggestion that the juror Haskett be questioned - a possibility tentatively raised by the learned trial judge. Wilson DCJ mused aloud that such a course might prove counter productive, in the event that the juror felt that he was being accused of inappropriate conduct. The Crown Prosecutor supported that view.
109. The learned Judge thereupon refused the application and declined to respond to the appellant's request that he indicate what had earlier been exercising his mind in that connection.
110. One must, of course, studiously avoid resort to wisdom borne of hindsight; and also make due allowance for the impact of the problems which, seemingly, were arising with the trial almost from day to day. However, on a careful appraisal of the evidence, it seems to me that the learned trial judge permitted his growing frustration in relation to the trial generally to cloud his judgment.
111. As he himself initially recognised when the Haskett situation was first identified, that situation necessarily begged important questions and put in issue the appropriateness of proceeding with the trial with the empanelled jury. To say the least, the situation revealed was, on its face, highly undesirable. It seems to me that, having become aware of it and the objections of the appellant, the learned trial judge was bound himself to take the initiative, investigate the problem and, as best he could, ascertain the extent of any potential prejudice to the person accused.
112. In my opinion, he ought to have questioned the juror. I remain quite unconvinced that this could not have been done without prejudicing the appellant. The failure to pursue such a course necessarily gave rise to a conclusion that a fair and informed member of the public would necessarily apprehend or suspect that the situation identified would result in the jury, or a juror, not discharging its or his task impartially.
113. This, either taken alone, or combined with what transpired with the juror Ms Stacharski, clearly gave rise to a mistrial. It was an unacceptable mistake to attempt to salvage a trial which could not properly be salvaged, however great was the temptation to do so.
114. In my view, that consideration seals the fate of this appeal.
115. However, lest I be considered incorrect in that assessment, it is desirable that I advert to some other issues raised by Mr Wells QC. I will not refer to all of them.
116. He sought to attack certain specific directions given by the learned trial judge as constituting significant errors of law. I will advert to them successively.
117. First, it was complained that, although the usual direction was given as to the right of the accused to remain silent, nevertheless the learned trial judge did not stress the problems which beset the appellant as an unrepresented accused and the fact that they ought not to attempt to assess his character and demeanour from their observations of him at the bar table. To do so would, in an important respect, tend to negate his right to silence.
118. What the learned trial judge did say was:-
"The accused did not give sworn evidence in his defence, and the
accused called no witnesses for the defence. He did, you will
remember, tender a number of documents during the prosecution case.
It was the accused's legal right not to give sworn evidence. It is
the law today that an accused person has the right to do one of two
things at his trial. First, he may remain completely silent,
leaving it up to the prosecution to prove the case against him, if
they can. There is no obligation upon an accused person to enter
the witness box and give evidence. Secondly, an accused can choose
to go into the witness box and give evidence on oath, and be subject
to cross-examination; and an accused, whether or not he gives
evidence on oath, can call witnesses in his defence, and/or tender
exhibits.
This accused, George Karounos, chose to take the first course. He
remained silent. By doing so, he exercised a right which the law
has given him. You should bear steadfastly in mind that the accused
is not required to prove his innocence. His silence can never
displace the onus (or burden) which is on the prosecution to prove
his guilt beyond reasonable doubt. A failure to offer an
explanation does not, of itself, prove anything. Nor does it, in
any strict sense, corroborate or support and confirm other evidence,
but the failure of an accused person to contradict, on oath,
evidence that to his knowledge must be true or untrue can logically
be regarded as increasing the probability that it is true, that is
to say a failure to deny or explain may make evidence more
convincing, but it does not supply its deficiencies, or plug up the
gaps in it.
To explain this another way; when, as in this case, an accused
fails to accept the opportunity to place before the court evidence
of facts within his knowledge which, if they exist at all, would
explain or contradict the evidence against him, you may more readily
accept that evidence which is against him. It is not just because
uncontradicted evidence is easier or safer to accept than
contradicted evidence. It is because doubts about the reliability
of witnesses, or about the inferences to be drawn from the evidence,
may be more readily dispelled in the absence of contradictory
evidence from the accused, if he could be expected to give or call
it. Hypotheses (or explanations) consistent with innocence may
cease to be rational or reasonable, in the absence of evidence to
support them, when that evidence, if it exists at all, must be
within the knowledge of the accused.
Of course, you should remember that the accused may have reasons for
not giving evidence other than that the evidence would not assist
his case. You should bear this in mind in determining whether the
prosecution case is strengthened by the failure of the accused to
give evidence. When there are facts peculiarly within the accused's
knowledge - and you may well consider that there are in this case,
such as whether the alleged 'secret meetings' were held, and what
was said at them, whether an agreement was entered into with Mr
Hodby or not, what the terms of the agreement were, whether the
terms of that agreement were communicated to and accepted by Barbara
Hunt, what the accused knew when the mortgage over Campbell Park to
the extent of $520,000 was executed, and whether he knew he was
being dishonest, and what his motive may have been - you may take
into account the failure of the accused to give evidence, because
that failure is capable of assisting you in the evaluation of the
circumstantial evidence before you from which you are asked to infer
that the accused was party to an agreement (or plot) that was part
of a larger dishonest scheme, that he knew that he and his
co-conspirators were acting dishonestly, and he knew that their
conduct might result in economic prejudice to the lenders, members
of the public - Hodby clients.
There is a fine line of distinction between drawing the inference of
guilt from silence (which is not permissible) and drawing an
inference otherwise available more safely (which is permissible)
because the accused had not supported any hypothesis (or
explanation) consistent with innocence from facts perceived to be
within his knowledge.
In determining whether the prosecution has discharged the onus (or
burden) of proof to the requisite standard (beyond reasonable
doubt), I tell you that it is relevant to assess the prosecution
case on the footing that the accused has not offered evidence of any
hypothesis (or explanation) which is consistent with innocence.
So it is that the failure of the accused to give evidence is not, of
itself, evidence. It is not an implied admission of guilt by
conduct. It cannot be an admission of guilt by conduct, because it
is the exercise of a legal right which the accused has; namely, to
put the prosecution to its proof.
When, as here, the accused elects to remain silent at trial, the
silence cannot amount to an implied admission. The accused is
entitled to take that course, and it is not evidence of either guilt
or innocence. Silence on the part of the accused at this trial
cannot fill in any gaps in the prosecution case. It cannot be used
as a makeweight. It is only when the failure of the accused to give
evidence (for example, as to whether or not an agreement was entered
into, and as to his state of mind) is a circumstance which may bear
upon the probative value of the direct and circumstantial evidence
which has been adduced by the Crown, and which you are required to
consider, that you may take the accused's failure to give evidence
into account. You may take it into account only for the purpose of
evaluating the evidence.
The accused, if anyone, can have explained what, if anything,
occurred in the Gold Members' Room, and what was in his mind at the
relevant times. He was in a position to deny, explain or answer the
evidence against him. His failure to give evidence is capable of
being seen as strengthening the prosecution case by enabling you, in
the absence of any explanation by the accused, to accept more
readily the inferences which the prosecution contended as the only
rational inferences from the evidence.
I repeat that the accused is not bound to give evidence, and that
the onus of proof remains on the prosecution to prove guilt beyond
reasonable doubt. What I am saying to you is that, recognising
those basic principles, it is nevertheless legitimate for you to
have regard to the fact that the accused has given no evidence (or
explanation) of the Crown case, apart from what he told the police,
as a consideration to be taken into account making the inference of
guilt from the evidence for the prosecution less unsafe than it
might otherwise possibly appear.
The only version of the facts before you is that proved, if proof it
be, by the prosecution witnesses and the documents. There is no
evidence to support other scenarios."
119. In my opinion these directions cannot fairly be challenged, so far as they go. Indeed they do no more than state the commonsense of the situation. They also do no more than make the points that unchallenged evidence may more readily be accepted than that which is challenged on oath; and that there was simply no evidence before the jury other than that of the Crown witnesses, i.e. that no other scenario, consistent with some different situation, had been erected as reasonable possibilities.
120. Mr Wells QC was, however, on sounder ground when he criticised the direction of the learned trial judge concerning the answers given by the appellant to police questions, at a time years after the relevant events. The evidence reveals the following exchanges between the appellant and Detective Sergeant Gibb:-
"... I said 'My name is Detective Sergeant Gibb and this is
Detective Sergeant Griffiths. We are State police officers, Mr
Karounos, attached to the Corporate Affairs Commission. I must
inform you that this is a police interview and it's not to be
confused with a hearing under the Corporate Affairs Commission's
powers. For the purpose of identification, would you please state
your full name and address?'
He said 'George Karounos, 59 Thomas Street, South Plympton.'
I said 'Do you have a second Christian name, Mr Karounos.'
He said 'I do not.'
I said 'I now wish to ask you a series of questions about your
business involvement with a man named Ross Hodby, your involvement
with the companies Krakat Pty Ltd, Domotix Pty Ltd, Karta Pty Ltd
and Vimited Pty Ltd and your involvement with the purchase of a
property at Meningie called Campbell Park. I must warn you that
you are not obliged to answer any of my questions and that if you
do so your answers will be recorded and may be used later in
evidence. Do you understand what I have said?'
He said 'I do.'
I said 'Do you intend to answer any of my questions?'
He said 'On the advice of my solicitor, I do not intend to answer
any questions. I understand that irrespective of what answers I
give to your questions it is your intention to lay charges against
me and that you will not review that decision. I understand that
the matters to which your questions relate are now over 43 months
old and notwithstanding that you have had ample opportunity to do
so, at no time throughout those 43 months have you or any other
person directed any question or enquiries to me in respect of those
matters. I, of course, deny any charges. I believe that the
decision to charge me is politically and otherwise motivated and
that the laying of charges against me are an abuse of process,
accordingly I repeat on the advice of my solicitor I don't wish to
answer any of your questions.
I said 'Thank you. Mr Karounos, I'm now reporting you for the
common law offence of conspiracy to defraud in relation to the
purchase of a property known as Campbell Park by Karta Pty Ltd in
1986 and the subsequent mortgage of $520,000 granted to clients of
a Mr Hodby. You will receive a summons in the future to attend
court. Do you understand what I have said?'
He said 'I do.'
I said 'That concludes the interview, however I will require some
personal particulars from you after the interview. Thank you.'"
121. The learned trial judge commented upon that situation in these terms:-
"So it is that I explain to you that it is the law that the mere
refusal by an accused to answer police questions relating to the
alleged commission of an offence, or to advance an innocent
explanation of the circumstances which cast suspicion upon him,
affords no basis for an inference of his guilt. But it is also the
law that, if an accused does not exercise his right of silence in
an unreserved fashion, and chooses to respond selectively to
questions asked or allegations made (which was not the case here)
or chooses (as was the case here) to make a statement at the same
time as exercising his right to decline to answer questions, his
conduct (and, specifically, what he does choose to say) is evidence
to which you may have regard and from which, according to the
circumstances as you find them to be on the evidence, an inference
may be drawn that he had a consciousness of guilt."
122. In my opinion that was not a fair representation of the true situation and must have operated very prejudicially against the appellant. It is firmly to be borne in mind that, in reality, the appellant was simply indicating that he had been advised to exercise his right of silence and was making a formal complaint as to what he saw as the unfairness of what had occurred long after the alleged event. How it could be said that any inference of consciousness of guilt could properly and fairly be said to arise in the circumstances is impossible to see. This was, I consider, a serious misdirection, because the effect of it was to run counter to the concepts discussed by the High Court in Petty v R (1991) 173 CLR 95.
123. Indeed, quite a contrary proposition arises. As Mr Wells QC argued, a failure to make some appropriate indignant response in some circumstances, when one was called for, could possibly have been construed as an admission (cf R v Christie (1914) AC 545. See generally on this aspect Weissensteiner v R (1993) 178 CLR 217.)
124. Complaint was further made by the appellant in relation to the direction of the learned trial judge with regard to the so-called "co-conspirator's rule". That direction (as far as relevant for present purposes) was expressed as follows:-
"The co-conspirator's rule, in its most basic form, operates by way
of exception to what we lawyers know as 'the hearsay rule of
evidence', which excludes hearsay evidence (that is to say, the rule
of thumb which excludes oral evidence by a person of what another
said or did outside of the presence of the accused or documents or
things in documentary form of which the accused was not the author).
The co-conspirator's rule provides that any spoken or written
statement or act or document of a co-conspirator said or done or
brought into existence in furtherance of (that is to say, in the
transaction of) the conspiracy and during its currency is admissible
(and may be received in evidence) against each other co-conspirator
as evidence of the truth of any assertion or implied assertion
contained in it.
It may go to prove (by inference) the existence of a common plan, to
prove (by inference) what was done in furtherance of the plan, and,
in conjunction with other evidence (if any), to prove the accused's
participation in it. This may only happen, ladies and gentlemen, if
a foundation for the reception of this evidence is laid by
independent proof of the participation in the conspiracy of the
person against whom this evidence is sought to be admitted (in this
case, the accused).
The co-conspirator's rule by definition supplements the proof of
conspiracy by other means. This is because the accused's complicity
in a conspiracy must be established by other means before the court
can reply upon evidence adduced by the co-conspirator's rule.
I tell you, ladies and gentlemen, that there is reasonable and
independent evidence (if you accept it as true and reliable) in the
form of Mr Hodby's evidence of the so-called 'secret meetings' and
in the form of the evidence of Mr Doubell, which provides some
independent support for the evidence that Mr Hodby and the accused
were together alone in the Gold Members' Room on the occasion of one
of the alleged 'secret meetings'. There is further reasonable
evidence in the form of Mr Hodby's evidence, supported, as that is,
by the evidence of Mr McGlashan and Mr Opie, to a degree, evidence
which is independent of the acts or statements of the alleged
con-conspirator, Mrs Hunt, that the accused was present at the
office of Chesser Street when various documents were executed, from
which, in conjunction with the evidence of the alleged 'secret
meetings', it could be inferred that the accused participated in the
alleged conspiracy.
...
To summarise the position regarding the co-conspirator's rule and
applying it in this trial, it is sufficient for me to say (and
emphasise) that, where an accused is charged with conspiracy, as the
accused George Karounos is here, evidence in the form of acts done
or words uttered or documents signed by an alleged co-conspirator
(for example, Mrs Hunt or Mrs Karounos) will only be admissible to
prove (and can only be used by you as proof of) the participation of
the accused in the conspiracy where it is established that there was
a combination of the type alleged, that the acts were done or the
words were uttered (or written) or the documents were signed by a
participant in furtherance of its common purpose, and there is
reasonable evidence, apart from the actual words or documents, that
the accused was also a participant.
I tell you that, if you believe the evidence of Mr Hodby about the
'secret meetings', and the evidence of Mr Doubell about the accused
and Mr Hodby being in the Gold Members' Room, and if you accept what
the Domitix minutes indicate, in conjunction with the evidence of Mr
Hodby and Mr McGlashan about the accused being present in Chesser
Street, then you can apply that principle in the manner that I have
discussed."
125. It will at once be seen that the learned trial judge did that which the High Court said was not to be done. In Ahern v R (1988) 165 CLR 87 at 100-104 it was said:-
"The question remains whether the trial judge or the jury should
ultimately determine the existence or otherwise of reasonable
independent evidence of the participation of an alleged conspirator
as a ground for the use against him of evidence of the acts and
declarations of other conspirators which took place in his absence.
Obviously the matter must be one for the determination of the trial
judge in the first instance, for the evidence of acts and
declarations ought not to be admitted at all for that purpose if no
basis can be shown for its admission. But controversy exists over
whether, even after the evidence has been admitted, the jury should
be instructed that it is for them to determine whether there is
reasonable independent evidence of participation and that if there
is not, they ought not to use the evidence of the acts and
declarations of the other conspirators for the purpose of deciding
that issue.
126. In United States v Dennis, Judge Learned Hand expressed the view:
'The law is indeed not wholly clear as to who must decide whether
such a declaration may be used; but we think that the better
doctrine is that the judge is always to decide, as concededly he
generally must, any issues of fact on which the competence of
evidence depends, and that, if he decides it to be competent, he is
to leave it to the jury to use like any other evidence, without
instructing them to consider it as proof only after they too have
decided a preliminary issue which alone makes it competent. Indeed,
it is a practical impossibility for laymen, and for that matter for
most judges, to keep their minds in the isolated compartments that
this requires.' One might add that the difficulty for a jury is exacerbated if the standard of proof upon which they are to decide the preliminary issue differs from the standard of proof upon which they are ultimately to decide the guilt or innocence of the accused. In Carbo v United States this difficulty was referred to:
'The jury is already concerned with the evidence - weighing
standards involved in proof beyond a reasonable doubt. To expect
them not only to compartmentalize the evidence, separating that
produced by the declarations from all other, but as well to apply to
the independent evidence the entirely different evidence-weighing
standards required of a prima facie case, is to expect the
impossible.'"
127. Having referred to dicta illustrating the opposite approach, as applied in Canada, the High Court continued:-
"... at the risk of repetition it is instructive to set out a
passage from the judgment of Young CJ in Minuzzo and Williams
(1984) VR at 431 which illustrates the complexity which must
necessarily be introduced when this approach is adopted in
charging a jury:
'An accused person is entitled to have his case considered upon
the evidence admissible against him. In a conspiracy case such as
the present there are three classes of evidence to be considered,
namely (a) evidence of the acts and declarations of the accused
whose case is being considered, (b) evidence of the acts and
declarations of co-accused from which the conclusion that there was
a combination might be drawn, and (c) acts and declarations of
co-conspirators done or made in pursuance of the combination.
Most evidence which falls within category (b) will also fall
within category (c). Those two categories are not intended to be
either co-extensive or mutually exclusive.
Evidence in category (b) may be used in order to establish the
conspiracy ... Evidence in category (c), which is sometimes
described as evidence in furtherance of the conspiracy, may only be
used against an accused whose case is being considered once there
is some evidence that that accused is connected with the
conspiracy. But it is not necessary that the jury should be
satisfied of the guilt of the accused before they can use evidence
of category (c). Satisfaction of guilt of course requires
satisfaction beyond reasonable doubt. But evidence falling into
category (c) can be used against an accused once prima facie proof
of the accused's connection with the conspiracy has been given ...
The prima facie evidence which is here referred to is evidence
described as directly admissible against the accused connecting him
with the conspiracy alleged. By evidence directly admissible
against the accused is meant in this context evidence other than
the acts and declarations of the alleged co-conspirators not in the
presence of the accused. Whether there is sufficient evidence
directly admissible against an accused connecting him with the
conspiracy to make evidence in category (c) available to be used
against him is a question for the jury.'
Consideration of that carefully worded and clearly expressed
passage as a whole inevitably leads one to doubt the proposition
that the sufficiency of evidence of participation directly
admissible against the accused is appropriately a question for the
jury. Nothing is more likely to discredit and undermine the
institution of trial by jury than a requirement that a trial judge
explain to the jury matters of law in terms which are unlikely to
be understood or retained by them.
...
The preferable view is that the trial judge alone should determine
the sufficiency of the independent evidence. The question is
initially one of the admissibility of evidence of acts and
declarations occurring outside the presence of an individual
accused and for that reason a question for the trial judge. If he
determines that the evidence of the acts and declarations of others
is admissible to prove the participation of the accused, it is
anomalous that the jury should, in effect, be required to determine
the same question for themselves. To require them to do so
necessitates a direction which is of unacceptable complexity."
128. What the learned trial judge did was impermissibly to leave to the jury that which it was his responsibility to determine - with the resultant potential dangers adverted to in Ahern. I agree that, apart from the confusion engendered, there was introduced to the jury, in a most undesirable manner, the concept of "reasonable doubt"; and that they might be left with the impression that - as Mr Wells QC put it - the co-conspirators rule was a threshold of proof which could give enhanced weight to any evidence that crossed the threshold. He proceeded to illustrate that point by reference to several aspects of the evidence, which need not here be reiterated.
129. This also, constituted a serious misdirection.
130. Finally, criticism was levelled at the following specific directions given by the learned trial judge:-
"The accused said in his address to you: 'I suggest to you also
that it is not the case Mr Hodby could not remember, it was a case
of non-existence.' That, you may think, when taken in conjunction
with the later assertion that, as far as Mr Hodby was concerned, it
was a case of 'out and out lying', constitutes a clear assertion to
the effect that 'the secret meetings' did not take place and that
no agreement was reached, whether 'reluctantly' or otherwise.
I must tell you that there is no evidence to the effect that 'the
secret meetings' did not take place, or to the effect that no
agreement was reached. The prosecution evidence to the effect that
they did take place, and that an agreement was reached, has simply
not been contradicted or explained. ...
I tell you that the suggestion made by the accused in his address
to the effect that Mr Hodby was telling lies, in particular about
the alleged 'secret meetings' and the agreement reached at the
second 'secret meeting', is not evidence that the meetings did not
take place, and that no agreement was reached. There was simply no
evidence to the effect that the 'secret meetings' were not held, or
to the effect that, to suggest that they were held and that an
agreement was reached, was a lie. Mr Hodby's evidence, and that
given by Mr Doubell, and that contained in the Domitix minutes (the
Agenda) remains uncontradicted and unexplained."
131. In fairness, however, this must be read together with what the learned trial judge said some thirty pages later in his summing up, namely:-
"Finally, ladies and gentlemen, I want to say some things to you
which I trust may be of assistance to you in actually arriving at a
verdict. These are matters for you, ladies and gentlemen, and they
are for you, and for your decision only. If you disbelieve Mr
Hodby's evidence, in particular, regarding the facts appertaining to
the alleged 'secret meetings', or that they took place when and
where they are alleged to have taken place, if you disbelieve Mr
Hodby as to what was agreed, then you should bring in a verdict of
not guilty.
If you conclude that it is reasonably possible that Mr Hodby was not
telling the truth when he testified as to what was agreed at the
so-called 'secret meetings', then you should find the accused not
guilty."
132. The vice in these directions is that, taken at face value, they can be taken both as implying the existence of an onus on the part of the accused to adduce contrary evidence and also undermining the established principle that the absence of contrary evidence does not mean that the Crown version must automatically or necessarily be accepted (R v Towner (1991) 56 A Crim R 221, Calides v The Queen (1983) 34 SASR 355).
133. It is true that, elsewhere in the summing up, the learned trial judge gave correct general directions as to onus of proof, but the difficulty with which I remain is that it may well be that the jury would have construed the above specific directions as some qualification of the general principle. Given their specific context I consider that they amounted to a serious misdirection.
134. It follows then that there were specific misdirections which, in their totality and taken alone, must inevitably lead to the conclusion that the appellant has suffered prejudice in a manner which rendered the trial unfair.
135. For all of the above reasons I am compelled to the conclusion that this appeal must be allowed. I arrive at it with considerable reluctance, because of the obvious considerable expense of a new trial and the problems which will inevitably beset it; and also because the Crown case against the appellant is patently very strong. However, in view of the defects attendant upon the trial, there would appear to be no alternative. The trial process patently miscarried.
136. I would accordingly quash the conviction of the appellant and remand him for retrial.
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