R v Obeid (No 6)

[2016] NSWSC 112

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	R v Obeid (No 6) [2016] NSWSC 112
Hearing dates:	17 February 2016
Date of orders:	18 February 2016
Decision date:	18 February 2016
Jurisdiction:	Common Law - Criminal
Before:	Beech-Jones J
Decision:	Evidence admitted.
Catchwords:	EVIDENCE – witness testified that he placed cash in envelope with Accused’s name on it – provided it to sons – cash from business owned and operated by Accused’s family – payments made after period of indictment – whether evidence relevant – whether should be rejected because of charge of unfair prejudice – evidence admitted.
Legislation Cited:	- Evidence Act 1995 – s 55, s 66, s 137
Category:	Procedural and other rulings
Parties:	Regina – Applicant Edward Moses Obeid – Respondent
Representation:	Counsel: P. Neil SC, Ms S. Beckett – Crown B. Hughes SC, J.J. Tunks – Respondent   Solicitors: Solicitor for Public Prosecutions – Crown Breene & Breene – Respondent
File Number(s):	2015/053925
Publication restriction:	Restriction lifted.

EX TemporE Judgment (revised from Transcript)

Application to adduce evidence from Paul Maroon; see transcript p 350

1. On 17 February 2016, being the fifth day of the trial and in the absence of the jury, the Court heard evidence from Mr Paul Maroon and submissions on the accused's objection to that evidence being adduced in the trial. This judgment concerns that application.

Background

2. The accused, Edward Moses Obeid, is charged with one count of wilful misconduct in public office. The form of the indictment and an outline of the Crown case are set out in the judgment in Obeid v R (2) 2015 NSWSC 1380 (“Obeid No 2”) at [14] to [23], which I will not repeat. Mr Maroon's evidence concerns the alleged receipt by the accused of cash derived from the cash takings of the two food outlets at Circular Quay. Before describing his evidence further it is necessary to briefly outline the effect of other evidence adduced by the Crown on this point concerning the accused's connection to the two retail outlets.

3. The lessee of the outlets was a company called Circular Quay Restaurants Pty Limited (CQR). A company search of CQR lists its sole director, secretary and shareholder as the accused's brother-in-law, John Abood. It is an agreed fact in the trial that “90% of the interest in the business flowed to the Obeid Family Trust No 2” and that the accused, his wife and other family members were "discretionary beneficiaries" of that trust. Based on this, it is also an agreed fact that the accused had an "indirect interest in the CQR leases".

4. The evidence is capable of establishing that Mr Abood, by one means or another, owned the remaining 10% interest in the businesses and also received an annual wage for managing them. Further, there is evidence in the form of documents and oral evidence from the accused’s son, Damian Obeid, which is capable of establishing that $1.398 million of the total amount of $2.4 million which was paid for the two outlets and a third outlet was obtained by financing secured against a mortgage taken over a house in Hunters Hill owned by the accused's wife and occupied by both of them. Further, there is evidence capable of establishing that a few months after the purchase of the outlets in late 2002 an amount of approximately $1,000 a week from the cash takings was delivered to the accused's wife until the cessation of the leases.

5. Damian Obeid stated that he usually made the deliveries of cash to his mother. He also stated the purpose of the payment was “housekeeping money”, which I understand to refer to paying home and living costs. Mr Damian Obeid further stated that the provision of a weekly sum to his mother was a longstanding arrangement that preceded the purchase of the outlets.

6. It is this material that constitutes the evidence concerning the form of "interest", whether it be commercial, beneficial, family or personal, that the accused had in the tenancies referred to in the indictment.

7. In addition, there is evidence capable of establishing that the accused was aware that the businesses were being purchased by family interests, specifically his sons. The Crown also contends that an inference is available that the accused was aware of the level, or likely level, of financial commitment his family members incurred in purchasing and running CQR’s businesses. This material, as I understand it, includes the nature of the outlets themselves, the fact that the home the accused lived in with his wife was mortgaged to provide financing to either purchase or run the business, and a document said to show that the accused received a substantial part of the funds obtained by the mortgage over the house with the balance of $1.398 million being paid to or on behalf of CQR.

Mr Maroon’s evidence

8. Mr Maroon is a cousin of the accused's wife. He has bookkeeping qualifications. For a significant period of time he provided bookkeeping services for CQR. He worked at the family offices at Birkenhead Point. He stated that during the relevant period he never saw the accused at those offices but did see the accused's sons and other family members there frequently.

9. Mr Maroon stated that for many years he collected the cash takings from CQR and banked them. In this respect his evidence was arguably inconsistent with that of Damian Obeid, who stated that he collected the takings. Mr Maroon stated that every Thursday he prepared an envelope containing $1,000 and wrote the name “Judy” or “mum” on it. Judy is the first name of the accused's wife. Mr Maroon said that he provided the envelope to one of the accused's sons who was “going to visit the parents”. Mr Maroon could not recall when this process commenced but stated that it “pretty much went through to the end” of CQR operating businesses at Circular Quay. Mr Maroon said that CQR was wound up in “2012, 2011”.

10. The contested aspect of Mr Maroon's evidence concerns a second envelope that he said he prepared. I should note that Mr Maroon clearly had difficulty in placing dates and times of the events he referred to. It appears he has been very sick and he was suffering from the effects of treatment while giving evidence.

11. Mr Maroon stated that, starting from about three or four years before the food outlets closed, each week he prepared a number of envelopes containing $1,000. Based on his knowledge of when the outlets closed Mr Maroon nominated “2008 or 2009” as the time that this commenced. Mr Maroon stated that he wrote the words "Eddie" or "dad" or "Passy" on the envelope and provided it to one of the accused's sons. He explained that "Passy" was the name of the residence of the accused and his wife. Mr Maroon could not recall who instructed him to do this but stated that “it might have been Damian”, being a reference to Damian Obeid.

12. The Crown placed before Mr Maroon an email exchange between himself and the accused's daughter, Gemma Obeid, which occurred on 18 March 2008. There is evidence capable of demonstrating that the accused's daughter worked as an accountant and undertook work on CQR's books and records. In her email to Mr Maroon, Gemma stated, “Hey Paul – just on that note … don't forget that you have to include my wages as part of CQR total wages … not with my mum and dad's payments ... thankx … chat later”. Mr Maroon replied stating, "Gemma, never have included your wages anywhere other than on the till slips". Mr Maroon stated that given the passage of time he could not recall what payments Gemma Obeid was referring to in her email when she stated "mum and dad's payments".

13. Senior counsel for the accused, Mr Hughes SC, submitted that the reference to “mum and dad's payments” was, or at least could be, a reference to the payments that were made to the accused's wife through either or both of Damian Obeid and Mr Maroon. This could be correct but in my view it is certainly open to a jury to treat it as a reference to both that payment and a payment to the accused. Further, the response from Mr Maroon is also capable of being construed as an acknowledgement by him that both payments of the kind just referred to were being made at the time of the email exchange. The email itself appears to be a prior representation by Mr Maroon that two payments were being made by this time. Thus the email appears to be, prima facie, admissible under s 66(2) of the Evidence Act 1995.

14. The end result is that when it is considered in conjunction with the email of 18 March 2008, Mr Maroon's evidence is capable of establishing that at least by March 2008 he was preparing envelopes with cash in them marked to the attention of the accused, as well as preparing an envelope marked to the attention of his wife and providing both envelopes to one of the accused's sons for delivery. For completeness I should note that Damian Obeid's evidence was inconsistent with any suggestion that he provided any cash from CQR to his father or that he had any knowledge of that occurring.

Probative value

15. Mr Hughes SC contended that the evidence of Mr Maroon was not relevant evidence as defined by s 55(1) of the Evidence Act 1995 (“Evidence Act”). Mr Hughes SC’s first contention is that the evidence is not capable of establishing that the accused in fact received the envelopes containing cash that Mr Maroon said he prepared for him. Mr Maroon stated that he did not personally hand any envelopes to the accused but, as noted, he stated that instead he handed them to one of the accused's sons.

16. Nevertheless Mr Maroon's evidence must be considered with the balance of the evidence. In my view that evidence is capable of demonstrating the existence of a system for the delivery of cash by the accused's son on a weekly basis to the accused's wife over many years. Mr Maroon's evidence, if accepted, is capable of supporting a conclusion that an additional envelope with the accused's name on it was effectively placed into this system and delivered by one of the sons to the accused's home. Overall, considered in its totality, the evidence is capable of founding an inference that cash from CQR's takings was delivered to the accused from at least March 2008.

17. Mr Hughes SC also contended that as these payments postdate the period of the indictment they do not satisfy ss 55(1) of the Evidence Act. He submitted that there was no evidence that the payments were made prior to March 2008 and that they were not evidence of any “interest” of the accused in CQR's businesses during the period covered by the indictment.

18. On this application the Crown did not contend that the cash payments were some form of payment made by or on behalf of CQR in exchange for the accused's alleged intervention in the lease renewal process in 2007 as alleged in the indictment. If this evidence is considered in isolation it is not obvious that it establishes a connection between the receipt by the accused of cash payments and the businesses from March 2008 and his alleged conduct in 2007.

19. However, the evidence is not to be considered in isolation but in combination with the other evidence, especially that which shows the variety of financial interests the accused's family had in the leases since they were purchased in late 2002.

20. The Crown contended that Mr Maroon's evidence was capable of demonstrating, or was at least relevant to showing, the effective control that the accused exercised over CQR's businesses from the outset. I am doubtful of that. Nevertheless at the very least the combined effect of the evidence is capable of demonstrating that the cash payments said to be made to the accused was simply another iteration of the financial interests and connection that the accused had and his family had in the leases. In particular, the evidence is capable of showing that, from the time of the acquisition of the leases, the accused's indirect interest and his family’s investment and control of CQR’s business had the real potential to provide a direct financial benefit to the accused. Mr Maroon's evidence of cash payments being made within six months after the period identified in the indictment is capable of demonstrating that the potential for the accused to directly benefit from CQR's businesses that existed from 2002 to 2007 was ultimately realised from early 2008 onwards.

21. The elements of the offence of wilful misconduct in public office were addressed in Obeid (No 2) at [22]. The extent and the depth of the financial connection between CQR's businesses and the accused and his family bears upon a number of issues of great significance to the trial, including the reasonableness of any expectation that the accused would disclose his interests or connection to the leases before making any representations about their renewal or relevant to their renewal to Mr Dunn, whether the making of any such representation without making any such disclosure amounted to misconduct, whether such misconduct was wilful and whether it merited criminal punishment.

22. It follows that I am satisfied that the contested evidence of Mr Maroon is relevant evidence.

Section 137

23. Mr Hughes SC also sought the rejection of the evidence on the basis that its probative value is outweighed by the danger of unfair prejudice (Evidence Act s 137(1). Mr Hughes SC pointed to the unsatisfactory nature of Mr Maroon's evidence in that, as I have said, he was very vague about the timing of these events and he also stated that he did not personally provide the envelopes in question to the accused. These criticisms of Mr Maroon's oral evidence have some force but, to a significant extent, they dissipate when his oral evidence is considered with the email exchange of 18 March 2008 and the other evidence that I have referred to.

24. Otherwise I have already addressed what the evidence is capable of proving and its potential significance. It follows from the above that I consider the material has significant probative value, although it must be emphasised that it is ultimately a matter for the jury to determine whether it should be accepted and the weight to be attached to it.

25. In relation to unfair prejudice, Mr Hughes SC pointed to the danger of the jury giving "undue weight" or "reasoning impermissibly" if it heard evidence that the accused received cash payments from CQR's business. He contended that there is a danger that a jury may reason that the accused might have engaged in tax evasion by not declaring the cash receipts. In effect, Mr Hughes SC submitted that evidence that the accused received cash payments could be considered as some general form of subterfuge on his part.

26. The Crown submitted that there was no such danger in circumstances where it was common ground that the outlets were cash businesses and thus a distribution of their proceeds would be likely to occur by the distribution of cash. I accept that there is some potential for the jury to consider this material as evidence of something perhaps more sinister than that which it seeks to prove, namely the extent of the financial connection between the accused and the businesses conducted by CQR. Nevertheless I do not consider that the danger reaches such a level that it outweighs the probative value of the evidence, a matter I have already addressed.

27. In that regard I note that the jury should be given some credit for understanding the context in which this evidence is being adduced, namely that it relates to the alleged distributions from a business that was owned and controlled by the Obeids and was not a payment from some third party to a parliamentarian. Further, I expect that both the addresses and the summing-up will reinforce that this evidence is adduced as only part of the Crown case to show the extent of the financial connection between the accused and the CQR leases and not for any other reason, unless the matter is first raised with the Court. It follows that I decline to reject the evidence of Mr Maroon under s 137 of the Evidence Act.

28. Accordingly I will allow the evidence to be adduced.

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Amendments

28 June 2016 - Restriction lifted.

Decision last updated: 11 February 2020