R v Magnus (Ruling No 1)

[2011] VSC 340

IN THE SUPREME COURT OF VICTORIA Not restricted

AT MELBOURNE

CRIMINAL DIVISION

S CR 2010 0146

THE QUEEN

V

TIMOTHY FRANCIS MAGNUS

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JUDGE:	T Forrest J
WHERE HELD:	Melbourne
DATE OF HEARING:	22 July 2011
DATE OF RULING:	22 July 2011
CASE MAY BE CITED AS:	R v Magnus (Ruling No 1)
MEDIUM NEUTRAL CITATION:	[2011] VSC 340

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CRIMINAL LAW – Severance – 53 count indictment – Section 193 Criminal Procedure Act 2009 – Relevant principles – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the DPP	Mr P Rose SC and Mr J Fitzgerald	Solicitor for Public Prosecutions
For the Accused	Mr R Edney and Ms N Sheridan-Smith	Doogue & O’Brien

HIS HONOUR:

1. The accused, Timothy Francis Magnus, is indicted on 53 charges of obtaining a financial advantage by deception.  The Crown allegation is that those deceptions were practised by the accused on 11 different complainants.  The charges span dates from 21 December 2005 to 31 January 2007.  In very short compass, it is the Crown case that the accused organised a scheme to attract investors into a betting syndicate.  The Crown alleges that all eleven complainants were informed by the accused, at least:

a)        that the money invested would be used for the sole purpose of ‘lay betting’  on behalf of investors;

b)         that results and profits generated by the fund were genuine; and

c)        that the terms and conditions of a syndicate prospectus and syndicate rules were genuine (this relates to those charges alleged to have been committed on or after 17 February 2006).

1. Lay betting, in the context used in the indictment, means gambling on a horse to lose a particular race.  In recent years with the advent of betting exchanges like Betfair punters have been able not only to back horses to win races, but also to lose them.  In the traditional betting  transaction a punter would back a horse to win a race.  The other side of that transaction necessarily involved a bookmaker gambling on that horse losing the race.  In racing parlance, he would ‘lay’ the horse.  Through betting exchanges punters can take the position of the bookmaker and lay a horse at a particular price, for a particular amount, provided the exchange can procure another punter to back the horse to win at that price and for that amount.  The exchange takes a fee for introducing the two parties.

1. In this case, the Crown alleges that the monies invested by the eleven complainants and received into bank accounts associated with the accused were simply not used by the accused for lay betting at all.  Thus, so the allegations go, the accused derived a financial advantage as a result of false representations made by him to each of the eleven complainants.

1. Mr Edney, who appears with Ms Sheridan-Smith for the accused, makes application under Section 193 of the Criminal Procedure Act 2009 to sever the indictment and order that the charges that relate to three complainants Cope, L & P Burke and Belcher be heard separately from the charges that concern the other eight complainants.  Specifically, Mr Edney submits that charges 42, 48, 51, 52 and 53 (Cope), charges 17, 25 and 49 (Burke) and charges 18 and 46 (Belcher) ought to be tried separately to the remaining 43 charges on the indictment which involve eight complainants.

1. Since 1 January 2009, the joinder of multiple counts on the one indictment has been governed by ss 170 and 193 of the Criminal Procedure Act 2009. Section 170 provides simply that if an indictment contains more than one charge, the charges must be heard together unless an order is made under s 193 or s 195. Section 195 is irrelevant for present purposes.

1. Section 193 of the Act relevantly reads as follows:

193.  Order for separate trials.

(1)If an indictment contains more than one charge, the court may order that any one or more of the charges be tried separately.

…….

(3)The court may make an order under subsection (1)….. if the court considers that –

(a)the case of an accused may be prejudiced because the accused is charged with more than one offence in the same indictment; or

….

(c)for any other reason it is appropriate to do so.

1. Mr Edney submits that s 193 operates to provide a broad discretion to order separate trials and I accept so much is clear from the language employed.

1. Mr Edney accepts that 43 of the charges relating to eight complainants are properly joined in that there is a sufficient commonality between them to justify their joinder.  Those complainants were part of a loose social network and the offences relating to those complainants are mostly, but not all, alleged to have occurred at an earlier time to those that are sought to be severed.  Mr Edney submits that there is less of a social network connection between the core group and the three complainants he identifies, and that none of those three attended a March 2006 meeting at which the accused is alleged to have made various  false representations to other complainants.  Mr Edney also submitted that the 53 count indictment involves the Crown proving 53 separate relatively complex transactions and that this, in itself, was a sound basis for severing 10 counts from the indictment.

1. Before the introduction of the Criminal Procedure Act 2009, the joinder of multiple counts on the one presentment was governed by Rule 2 of the Sixth Schedule of the Crimes Act 1958.  That rule provided:

Charges for any offences may be joined in the same presentment if those charges are founded on the same facts or form a part of a series of offences of the same or similar character.

1. Whelan J in R v Gregory (No 1)[1] conveniently summarised the relevant legal principles at [13]. I shall omit the cases referred to.

   [1][2009] VSC 358.

The applicable legal principles were not the subject of significant controversy before me. They are as follows:

(1)  The rule is to be given a liberal interpretation consistent with the policy underlying it, namely, to enable the joinder of charges which may be properly and conveniently dealt with together.

(2)  Both the law and the facts should be taken into account in deciding  whether offences are similar or dissimilar.

(3)  In order for there to be a series of offences of a similar character there has    to be some nexus between the offences.

(4)  It is not necessary that the offences exhibit close similarities. Not infrequently in cases of commercial fraud, it is enough that offences or groups of offences have a common genesis or are otherwise linked and associated by commonality of parties or transactions.

(5)  Two offences can constitute a “series”.

(6)  A difference in time between offences might mean that what could otherwise be considered a series has become fragmented over time so as not to deserve that description.

1. Mr Edney accepted that the proper exercise of the power that I have to sever an indictment under s 193 would turn upon a consideration of the same sorts of considerations that were identified by Whelan J when considering severance where counts were joined under rule 2 of the Sixth Schedule of the Crimes Act 1958.  I consider this concession was correctly made.  Whilst the  discretion to sever may appear now to be broader than it once was, ultimately, severance applications whether made under the old regime or the new  must involve similar considerations.  Charges are properly joined on an indictment where there is some legitimate connection between them.  They may arise from the same facts, or be part of a series of offences of a similar character.  In cases of commercial fraud, it may be sufficient that “a common genesis for the fraud can be identified, or that there is commonality of parties or transactions”(R v Heinze).[2] If the joinder of those charges causes embarrassment to the defence, either by way of the introduction of inadmissible evidence to certain charges or prejudice in some other material way (beyond merely adding to the united force of the evidence) then severance needs to be considered. This has been the case for a very long time and I can see nothing in the language of Section 193 that would lead me to conclude that the traditional considerations were no longer operative to the exercise of the discretion granted by that section.

   [2][2005] VSCA 124.

1. I consider that all charges are properly joined on the indictment.  I have read the depositions and the Crown summary and consider that I am sufficiently au fait with the material to state the following:

(a)The charges relating to the three complainants that are the subject of this application are founded on many of the same facts as the other charges on the indictment.   The evolution of the scheme, the recruitment of participants and the representations made to them is the subject of evidence that is, in my view, relevant and otherwise admissible in the proof of all 53  charges on the indictment.

(b)There is a clear nexus between the offences sought to be severed and those not the subject of a severance application.  All complainants, without exception, say that the scheme was represented to them as relating to lay betting only.  All complainants also say those bets were to be placed using a licensed bookmaker, Mr Jeff Walter.  Mr Walter says no such lay betting was ever sought  to be entered into with him by the accused.

(c)Mr Edney sought to distinguish the charges relating to the relevant three complainants in that he submitted the transactions occurred later than most of the other ‘properly joined’ transactions and that Messers Cope, Burke and Belcher were not part of the social group of the other complainants.  This is only partially the case.  Mr Cope was introduced to the scheme in July 2006 by another complainant, Peter Scott, who showed him spreadsheets prepared by the scheme’s administrator Irene Brooks, also a complainant.  Ms Brooks’ evidence is that she prepared those spreadsheets on the basis of information provided to her by the accused man.  Mr Burke was a friend of Mr Draudins, another complainant.  Mr Draudins told Mr Burke of the success of the syndicate and gave him a copy of the prospectus and rules of the syndicate.  He invested initially in March 2006, fairly early in the syndicate’s life.  Mr Belcher also was introduced to the scheme by another complainant (Mr Blade) who told him that, on paper at least, he had doubled his money in a short period.  Mr Belcher also initially invested in March 2006.

(d)It is true that none of these three investors were present at the meeting held on 9 March 2006 where the accused is alleged to have set out how the scheme would work.  To that extent, the evidence against the accused is different to the charges relating to the other complainants, however I consider it is artificial to sever those charges on this basis.  On the Crown case they entered  into the same scheme, they were the subject of the same or very similar representations made by the accused and they parted with their money to the same source – the accused. To the extent that they were not at the meeting on 9 March 2006, in my charge I can make it clear to the jury that the Crown do not say that the representations alleged to be made by the accused at that meeting are direct evidence against the accused when they come to consider the Cope/Burke/Belcher counts.  As discussed with counsel in another context, however, I am of the view that if the jury were satisfied beyond reasonable doubt that the accused said the things attributed to him at the meeting in regard to the ‘lay betting only’ aspect of the scheme, they could use this when considering whether the accused made identical representations to Cope or Belcher or Burke. 

(e)I am also of the view that there is a sufficient temporal relationship between the offending alleged in the indictment for that offending to be properly characterised as a ‘series of offending’.  In 13 months, 53 offences are alleged.  The application is to sever the 17^th, 18^th, 25^th, 42^nd, 46^th, 48^th, 49^th, 51^st, 52^nd and 53^rd counts.  I do not accept that simply because the three investors (particularly Mr Cope) came to the scheme a little later than the other complainants, they are not part of the series of offending alleged.  On the Crown case, the scheme remained on foot with the same dishonest receipt of monies procured by the same or similar false representations, including false profit figures until late January 2007.  I can see no sensible temporal basis for severing the charges sought.

(f)Finally, Mr Edney submitted that this was a complex enough case with eight complainants and too complex with eleven.  I do not agree with this submission.  This is a case about the contravention of one particular section of the Crimes Act 53 times.  Each of those offences is alleged to have been committed by deceptions practised by the accused.  Two major types of deceptions are alleged to have been practised.  The scheme would involve ‘lay betting only’ and that the scheme had and continued to generate spectacular results.  I consider that the factual matrix is simple in relation to each charge and not unduly complicated when repeated in similar, but not necessarily identical ways on 53 occasions.

1. Accordingly, I do not propose to sever the indictment.