R v Turner
[2001] WASCA 344
•6 NOVEMBER 2001
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : COURT OF CRIMINAL APPEAL
CITATION: R -v- TURNER [2001] WASCA 344
CORAM: MALCOLM CJ
WHEELER J
BURCHETT AUJ
HEARD: 9 AUGUST 2001
DELIVERED : 6 NOVEMBER 2001
FILE NO/S: CCA 2 of 2001
BETWEEN: THE QUEEN
Appellant
AND
JOHN TURNER
Respondent
FILE NO/S :CCA 3 of 2001
BETWEEN :THE QUEEN
Appellant
AND
RONALD KINNEY
Respondent
Catchwords:
Criminal Code - Secret commissions - Source of provisions as bearing on construction - Meaning of "corruptly" - Whether absence of knowledge or assent by the principal is required - Discussion of principles relating to a Crown appeal against a directed verdict of acquittal
Legislation:
Criminal Code, s 409, s 529, s 530, s 543, s 688(2)(b), s 690(3)
Result:
Appeal dismissed
Category: A
Representation:
CCA 2 of 2001
Counsel:
Appellant: Mr K M Tavener
Respondent: Mr A O Karstaedt
Solicitors:
Appellant: State Director of Public Prosecutions
Respondent: Karp Steedman Ross-Adjie
CCA 3 of 2001
Counsel:
Appellant: Mr K M Tavener
Respondent: Mr R J Burbidge QC & Mr N D Pope
Solicitors:
Appellant: State Director of Public Prosecutions
Respondent: Gadens
Case(s) referred to in judgment(s):
Bunnings Forest Products Pty Ltd v Shepherd (1998) BC 9801616
C v Johnson [1967] SASR 279
Ex parte Gobbert; re Wilks (1941) 41 SR (NSW) 140
Jamieson (1987) 34 A Crim R 308
Morrison v Kiwi Electrix Pty Ltd (1998) 19 WAR 482
R v Dillon and Riach [1982] VR 434
R v Gallagher [1986] VR 219
R v Gross [1946] OR 1
R v Udechuku [1982] WAR 21
Rex v Scott [1907] VLR 471
Rex v Stevenson [1907] VLR 475
Saraswati v The Queen (1991) 172 CLR 1
Short v FW Hercus Pty Limited (1993) 40 FCR 511
Willers (1995) 81 A Crim R 219
Case(s) also cited:
Ibbs v The Queen [2001] WASCA 129
Vallance v The Queen (1961) 108 CLR 56
MALCOLM CJ: This was an appeal by the Crown under s 688(2)(b) of the Criminal Code which provides that:
"An appeal may be made to the Court of Criminal Appeal on the part of the prosecution -
…
(b)against any verdict of acquittal on an indictment and any judgment founded thereon when such verdict has been found by direction of the judge or other authority entitled to give directions on law to the jury at the trial."
In this context, s 690(3) of the Code also provides that:
"On any appeal against an acquittal by direction … the Court, if it allows the appeal, may reverse any judgment, decision, or verdict, the correctness of which was in question in the appeal, and may order a new trial or that the accused shall stand his trial as the case may require."
The facts and circumstances are fully set out in the reasons to be published by Burchett AUJ. I agree with his Honour, for the reasons he has stated, that both of the Crown appeals should be dismissed. I also agree with the comments by his Honour that, had the Crown shown there was a case to answer, an order for a new trial pursuant to s 690(3) of the Code would not automatically have followed, having regard to the unique character of the provisions of s 688(2)(b) of the Code, as supplemented by s 690(3): cf R v Udechuku [1982] WAR 21 at 23 per Wickham J.
WHEELER J: I have had the advantage of reading in draft the reasons for decision to be delivered by Burchett AUJ. I agree with those reasons and I too would dismiss the appeal.
BURCHETT AUJ: The Midland Gate Shopping Centre Project was a large project, to cost many millions of dollars, for the reconstruction of a shopping centre. Fletcher Construction Australia Limited ("Fletcher"), of which the respondent John Turner was the manager for Western Australia, secured in 1993 the contract to do the work. Vital to the planning of the operations was the setting in place of arrangements to avoid difficulties with the labour force to be employed on the site. To this end, a construction manager employed by Fletcher, Stuart McGregor, conferred with the other respondent, Ronald Kinney, a union organiser for the
Western Australian Branch of the Australian Builders' Labourers' Federated Union of Workers ("BLF"). It was after agreement had been reached about "the manning levels and shop steward and safety officer" for the project that, according to Mr McGregor, "Mr Kinney hinted that perhaps a sum of money would make it run smoother".
The indictment with which this appeal is concerned arose out of the events that followed Mr Kinney's hint. There were three counts in it, two against Mr Turner and one against Mr Kinney, to the following effect:
"(1)Between 1 January 1993 and 30 November 1994 at Perth JOHN TURNER with intent to defraud Fletcher Construction Australia Ltd by fraudulent means, caused a detriment to FLETCHER CONSTRUCTION AUSTRALIA LTD to the value of $40,000 by procuring an employee to negotiate a subcontract with Ketta Nominees Pty Ltd as trustee for the Concrete Boys Trust trading as the CONCRETE BOYS for the Midland Gate Shopping Centre Project which included an allocation of $40,000 for the payment of a secret commission. [In the margin of this count was noted 'Code Sec 409(1)(d)'.]
(2)AND FURTHER that on 9 September 1993 at Perth JOHN TURNER corruptly paid RONALD KINNEY an agent of the Australian Builders' Labourers' Federated Union of Workers (WA Branch) a valuable consideration, namely $20,000.00, the receipt of which would tend to influence RONALD KINNEY to show favour to FLETCHER CONSTRUCTION AUSTRALIA LTD at its construction site at the Midland Gate Shopping Centre Project in relation to the business of the Australian Builders' Labourers' Federated Union of Workers (WA Branch). [In the margin of this count was noted 'Code Sec 530(b)'.]
(3)AND FURTHER that on 9 September 1993 at Perth RONALD KINNEY being an agent of the Australian Builders' Labourers' Federated Union of Workers (WA Branch) corruptly received a valuable consideration, namely $20,000.00, the receipt of which would tend to influence him to show favour to FLETCHER CONSTRUCTION AUSTRALIA LTD at its construction site at the Midland Gate Shopping Centre Project in relation to the business of the Australian Builders' Labourers' Federated Union of Workers (WA Branch). [In the margin of this count was noted 'Code Sec 529(b)'.]"
At the joint trial of Messrs Turner and Kinney, upon the conclusion of the Crown case, a submission was made on their behalf that they had no case to answer. That submission was upheld by the learned trial Judge, Kennedy DCJ, and the jury returned by her direction verdicts of acquittal. Against her Honour's decision that, on each count, there was no case to answer, the Crown appeals, seeking a new trial. It does so in reliance on s 688(2)(b) of the Code (supplemented by s 690(3)), which was described by Wickham J in his dissenting judgment in R v Udechuku [1982] WAR 21 at 23 as "in common law jurisdictions, … a unique provision". Unique in that it provides for a Crown appeal against a directed acquittal.
Save for the later amendment of "misdemeanour" to "crime" by s 43 of the Criminal Law Amendment Act 1990, s 529 and s 530 of the Code, on which counts (2) and (3) are based, were incorporated into it by the Criminal Code Act Compilation Act, 1913 from identically worded provisions made by s 2 and s 3 of the Secret Commissions Act, 1905, the long title of which is "AN ACT for the Prohibition of Secret Commissions and Rebates". The long title of the 1913 Act is "AN ACT to enact a compilation of the Criminal Code Act, 1902, with its amendments and portion of the Secret Commissions Act, 1905, and for other related purposes". The preamble to the Act so titled recites a parliamentary direction to make the compilation, and continues:
"And whereas … it is desirable to include in the compilation … the provisions of the Secret Commissions Act 1905 (except section 19 thereof [a procedural provision requiring an information to be on oath]), and to repeal the last‑mentioned Act … and it is desirable to give such compilation the force of law."
I have referred to these matters because the sections need to be understood in the light of their origin: see Short v FW Hercus Pty Limited (1993) 40 FCR 511 at 517 - 518; Saraswati v The Queen (1991) 172 CLR 1 at 21 - 23. They are to be found in Chapter LV of the Code, as framed by virtue of the compilation, headed "Corruption of agents, trustees, and others in whom confidence is reposed", as the first and second sections of the chapter, in which they are followed by a number of sections creating crimes analogous to the receipt or payment of a secret commission to an agent. They provide:
"529. Receipt or solicitation of secret commission by an agent
If any agent corruptly receives or solicits from any person, for himself or for any other person, any valuable consideration -
(a)as an inducement or reward for, or otherwise on account of, doing or forbearing to do or having done or forborne to do any act in relation to his principal's affairs or business; or
(b)the receipt or any expectation of which would in any way tend to influence him to show or to forbear to show favour or disfavour to any person in relation to his principal's affairs or business,
he shall be guilty of a crime.
530.Gift or offer of secret commission to an agent
If any person corruptly gives or offers to any agent any valuable consideration -
(a)as an inducement or reward for, or otherwise on account of, doing or forbearing to do or having done or forborne to do any act in relation to his principal's affairs or business; or
(b)the receipt or any expectation of which would in any way tend to influence him to show or forbear to show favour or disfavour to any person in relation to his principal's affairs or business,
he shall be guilty of a crime."
These sections, in a chapter headed "Corruption of agents …", begin by specifying that the action made a crime is an action done "corruptly". A central question to be answered in respect of them is the meaning of that word "corruptly". Referring to a number of State provisions, including s 529 and s 530 of the Western Australian Code, David Lanham, Mark Weinberg, Kenneth Brown and George Ryan, in their Criminal Fraud (1987), state (at 233):
"As with Commonwealth legislation the word 'secret' does not appear in the text of any of the offences, though it appears in titles, headnotes or sidenotes. In the text the concept of secrecy is replaced by that of corruption. The word 'corruptly' gives rise to numerous questions of interpretation. The first question is whether the word corruptly in this context imports some element of secrecy. As it is a word of extremely vague meaning, recourse to the titles, headnotes or sidenotes is especially appropriate. [The learned authors referred in a footnote, inter alia, to s 19 and s 32 of the Interpretation Act 1984 (WA).] There is some case law authority which not only recognises the element of secrecy but defines it. In C v Johnson [[1967] SASR 279 at 291] Bray CJ observed that if the word corruptly were not in s 5 of the Secret Commissions Prohibition Act 1920 (SA) it might be an offence for an agent to solicit a commission even with the consent and approval of the principal. This suggests at the very least that the actual knowledge and consent of the principal negatives corruption where the defendant knows of that knowledge and consent. To this extent there is a similarity between the State legislation and the Commonwealth Act."
The learned authors go on to refer to problems raised by the issue of consent in respect of corporations and public servants (for whom "the question is not so much one of secrecy but of the impropriety of giving or receiving private profit for the performance of public duty"), and introduce further questions (at 235) with the words:
"[S]ubject to the above reservations the actual consent of the principal known to or believed in by the defendant will negative corruption …."
In the particular case of the Western Australian legislation, the clear indication in the long title of the Secret Commissions Act, 1905 that its purpose was "the prohibition of secret commissions and rebates" adds considerable force to the conclusion that "corruptly" refers to the "corruption of agents" (words that appear in the chapter heading in the Code) by the surreptitious receipt, et cetera, of an inducement or reward. If s 529 and s 530 are "ambiguous or obscure", the section headings may be relied on also: Interpretation Act 1984, s 19; and see Pearce and Geddes on Statutory Interpretation in Australia, 4th ed (1996) s 4.40. The most relevant definition of the adjective "corrupt", from which the adverb "corruptly" derives, in the Shorter Oxford English Dictionary (1988 reprint) is "[i]nfluenced by bribery or the like". The sections, however, are not concerned with the whole universe of corruption, but with that which is related to the performance of the duties of an agent (although agency is to be perceived, by s 546, in an amplified sense). In this context, corruption involves a betrayal of trust, or at least a debasement of the disinterestedness a principal is entitled to expect of an agent. Corruption, so understood, does not sit with openness, and certainly not with a true assent by the principal.
The view that an element of an offence in the form of s 529 is that "the consideration was received or solicited without the consent of the principal" is asserted in Freckleton on Indictable Offences in Victoria, 4th ed (1999) at 481, and in Bourke on Criminal Law in Victoria (1996) at 4003. Very soon after the passing of the first legislation in this form (in Victoria in 1905), Cussen J in Rex v Scott [1907] VLR 471 said (at 474):
"At common law the mere fact of a secret receipt - a sum of money secretly received by an agent - was presumed to show that the money had been given with an intent to gain an advantage, and the Courts would not inquire further as to whether such bribe did or did not actually corrupt the receiver of it."
His Honour commented that "the Legislature seems to have brought about much the same result in reference to criminal cases [under the Victorian section equivalent to s 530]". In the same year, in Rex v Stevenson [1907] VLR 475, Hood J said (at 476) that the word "corruptly", as used in the section, "must mean … some wrongful intention", and he made it clear (at 477), the prisoner having paid money to an agent "without the assent of his employer", that the wrongful intention in question was an "intention of influencing [the agent] … to show favour to the prisoner in relation to the [principal's] business". This view is in accord with that of the Court of Appeal of Ontario in R v Gross [1946] OR 1, with which Bray CJ expressed agreement in C v Johnson [1967] SASR 279 at 290 - 291. As Lanham and others point out in the passage I have quoted, Bray CJ (at 291) expresses himself in terms which support the view that "the consent and approval of the principal" would deny that the receipt or payment was corrupt. In the same case, Chamberlain J made this explicit when he said (at 301):
"The corrupt or wrongful intention contemplated by the provision is to my mind the intention of an agent to take advantage of his relationship with his principal to secure some benefit to himself or some other person, without the knowledge of his principal." (Emphasis added.)
In Jamieson (1987) 34 A Crim R 308, Young CJ (with whom Fullagar J agreed), after referring to R v Dillon and Riach [1982] VR 434 and R v Gallagher [1986] VR 219, held (at 312):
"The evidence cannot alter the meaning of the statute and in conformity with the earlier decisions to which reference has been made, the learned judge was correct in telling the jury that a person acted corruptly if he made a payment to a person intending that its receipt should influence the person, being an agent of the requisite character, to show favour to the giver in relation to the affairs of his principal. It is not possible to import into that element a requirement that it be established in addition that the giver intended to conceal the true nature of the payment from the agent's principal although it is difficult to imagine a case in which the maker of a payment to an agent could be found to have acted corruptly if he had informed the agent's principal of the payment."
The joint judgment of the Full Court of the Supreme Court of Victoria (Young CJ, Kaye and Gray JJ) in R v Gallagher (at 230) emphasizes the nature of the intention which stamps on a relevant action the mark of corruption:
"It therefore clearly emerges from the decisions and opinions of the Court of Appeal, and from what was said by Cussen J in R v Scott [1907] VLR 471 and Hood J in R v Stevenson [1907] VLR 475, that it is the intention of the person either giving or receiving, as the case may be, at the time of the passing of the consideration which is relevant to whether the behaviour charged was corrupt within the meaning of the section. This emerges in the passage cited by Bray CJ in C v Johnson [1967] SASR 279, at p290, from the judgment of the Court of Appeal of Ontario in R v Gross [1946] OR 1: 'The word "corruptly" in the section sounds the key note to the conduct at which the section is aimed. The evil is the giving of a gift or consideration, not bona fide but mala fide, and designedly, wholly or partially, for the purpose of bringing about the effect forbidden by the section.' "
Their Honours added (at 231):
"What is struck at by the statutory provision is the intention on the part of the giver or receiver of a gift or consideration to show favour or to forbear from showing disfavour to another in relation to his principal's affairs or business."
In my opinion, these authorities confirm that the sections are directed at the specified conduct done with the intention (properly described as corrupt) of seducing an agent from the duty owed to his principal or of rewarding the forsaking of that duty in favour of another. Consistently with this view of the sections, they will not apply where the principal is known or believed to have assented.
Under counts (2) and (3), the prosecution out of which the appeal arose alleged that a secret commission was paid by Mr Turner (through Mr McGregor as his agent) to Mr Kinney, which would tend to influence him to show favour to Fletcher in relation to the business of the BLF. Under count (1), Mr Turner was alleged to have defrauded Fletcher by the subcontract with the Concrete Boys, "which included an allocation of $40,000 for the payment of a secret commission". The evidence relied on by the Crown to show the intent of Mr Turner and Mr Kinney, respectively, is quite bare. The judge summarized it in terms which were not attacked on the ground that anything material was omitted:
"It is accepted that the question I am required to ask myself is whether the evidence of the Crown, taken at its highest, is capable of establishing beyond reasonable doubt the guilt of the accused. Turner was state manager of Fletcher Construction Australia Ltd and it obtained a contract to refurbish a shopping centre. Kinney was a union organiser with the BLF. Mr Stuart McGregor was a construction manager of Fletcher's and he dealt with Kinney.
After all usual matters had been settled as to worker conditions, McGregor said to Kinney that this was an important contract and was there anything else they could do. Kinney indicated a sum of money might make it run smoother to which McGregor said, 'How much?' and Kinney said he did not know; he had not done this before. Some time later McGregor gave Kinney $20,000 cash which Kinney took. Kinney had no interest in or knowledge of how this money was obtained. McGregor had spoken to Turner who asked, 'How much?' and 'What guarantees?'
They discussed the matter over 2 or 3 days and finally Turner said, 'Where are we going to get the money?' and McGregor suggested a subcontractor, one Mangione, the proprietor of the Concrete Boys. Turner then said it was to be paid in two lots, one early and one later. McGregor got in touch with Mangione and there is conflict in their evidence as to who McGregor said the money was for. McGregor said he said Kinney but Mangione said he was told Kevin Reynolds of the BLF, but the Crown case, at its highest, is that the discussion between McGregor and Kinney did not include a reference to Kevin Reynolds.
It was agreed between McGregor and Mangione that Mangione would inflate his contract by $40,000 and pay that money in cash to McGregor. He paid the first $20,000 to McGregor who paid it to Kinney. He paid the second $20,000 to Turner because by then McGregor had left Fletcher's and there is no evidence of what happened to that $20,000."
The statement of the test to be applied to a no case submission, made at the beginning of this passage, is correct: Morrison v Kiwi Electrix Pty Ltd (1998) 19 WAR 482 at 489, per Malcolm CJ (with whom Kennedy and Ipp JJ agreed). Applying that test, the judge ruled that, taken at its highest, the evidence was not capable of negativing the union's assent to the payment. Nor, of course, did it come near showing that Mr Turner did not believe the union was assenting. His information came entirely from Mr McGregor, who was dealing with Mr Kinney. Mr McGregor said that, to him, "Kinney and the union were synonymous, they were one and the same thing". There is nothing to suggest he reported to Mr Turner in a different vein, telling him Mr Kinney was seeking a personal benefit, or a "consideration" to influence him to disregard his duty to the BLF. On the contrary, the indication is Mr Turner thought he was dealing with the collective body itself, the union, for Mr McGregor recalled him saying the money should be paid "in two lots, one fairly early in the contract and one later in the contract to make sure that they [not "he"] kept their side of the bargain."
The Crown's argument on the appeal acknowledged that there was not "evidence that the union didn't have any knowledge or involvement". Indeed, counsel's submission appeared to adopt Mr McGregor's identification of Mr Kinney with the union: "Mr Kinney was the union. … They [Messrs McGregor and Turner] were giving [the money] to the union."
It is important to emphasize that this was not a blackmail or extortion case. The prosecution related to a "secret commission", alleged to have been paid corruptly to an agent of the union. If it was in truth a donation to the union itself, in order to further good relations between Fletcher and the union, it was not a payment of such a valuable consideration as could come within s 530, nor was its receipt a receipt within s 529. The Crown's Outline of Submissions with respect to Mr Turner refers to the payment to "the agent of the Union" as made "to make the Union better disposed to Fletcher". That fundamentally misconceives the nature of a secret commission, and seems to be directed to some impropriety (of which there is no evidence) on the part of the union itself. But, so misconceiving the matter, the Crown case did not attempt to show, by circumstantial evidence or otherwise, that the union was in fact ignorant and uninvolved, and Mr Kinney the recipient of a commission for himself.
On analysis, the decision that there was no case to answer on counts (2) and (3) does not actually depend upon the correctness of the view that the Crown had to show an absence of knowledge and assent by the union. More fundamentally, there was no evidence capable of showing that the payment was made or received otherwise than as a payment, not to the agent, but to the principal, the union. If a failure to disprove assent would be fatal to the Crown case, a failure to disprove involvement in the payment must be so a fortiori.
It is necessary to notice some subsidiary arguments raised by the Crown with respect to counts (2) and (3). It was argued that s 543 shows an absence of knowledge or assent is not required by s 529 and s 530. I do not accept this argument. Section 543 is concerned with changing the burden of proof, not with the elements of the offence; with how they are to be established, not with what is required to be established.
The Crown attempted to distinguish the Victorian cases to which I have referred on the basis that "corruption" has a different meaning in the Western Australian legislation. Willers (1995) 81 A Crim R 219 at 225 was cited for the proposition that in Western Australia an action will be corrupt if "done for an improper purpose". But that case was concerned with s 83, and with actions which could lawfully have been taken by a police officer in the performance of his duty, but were (it was alleged) taken for the improper purpose of harassing a person who had displeased the officer. That this conduct, if proved, would have shown the officer had "act[ed] corruptly in the performance or discharge of the functions of his office" within s 83(c) says nothing to the contrary of the cases interpreting sections equivalent to s 529 and s 530 which I have already discussed. Nor, if the form of corrupt intention at which those sections strike is not involved, would it avail the Crown to show some different improper purpose, or to show there was "some nefarious scheme" of a different kind engaged in by the respondents: Ex parte Gobbert; re Wilks (1941) 41 SR (NSW) 140 at 145, per Jordan CJ, a case in which the prosecution failed, as in this case, to show that the principal was not himself involved in the payment to the agent.
The fraud count (count (1)) against Mr Turner raises some different questions. The judge held there was no case to answer, in relation to this also, because there was no evidence Fletcher did not know and approve what was done. The payment was, after all, aimed at procuring a benefit, not a detriment, for Fletcher - the goodwill and co‑operation of the union. That was so, whether the payment was to the union itself, or was a secret commission designed to buy the influence with the union of its agent, Mr Kinney. The Crown attempted to answer these propositions by relying on evidence that Fletcher had a policy against the payment of secret commissions. But that begs the question whether the payment was, or was understood to be, a secret commission; and also the question (a very real question, in the light of the arguments in this case) what would have been comprehended, in the minds of those making the decision, by any policy expressed as a policy against the payment of secret commissions.
There was, furthermore, an absence of evidence linking Mr Turner with the particular method (alleged to be fraudulent) by which the money was obtained from the Concrete Boys. The evidence against Mr Turner in this regard is simply that Mr McGregor suggested to him obtaining the money from a Mr Mangione who was "the proprietor" of the Concrete Boys. Mr Turner "didn't disagree with that", according to Mr McGregor, who said he himself asked Mr Mangione to "inflate" a subcontract quotation to cover the sum required. He did not give evidence that Mr Turner instructed him to do it that way, or that he explained to Mr Turner precisely what he had done.
Finally, on this issue, it will be observed that count (1) refers to the subject matter of the fraud as "an allocation of $40,000 for the payment of a secret commission". Counsel for the Crown, in argument, answered in the affirmative the question: "Does that element then hinge on the jury reaching a view in relation to the other counts …, counts 2 and 3, that they were indeed secret commissions?" Counsel described the counts as "intertwined". Later in his submissions, he suggested the concluding words of count (1) constituted particulars, not an element of the offence charged. But the purpose for which the money was required was plainly relevant to the question whether Fletcher was defrauded by its payment. In Bunnings Forest Products Pty Ltd v Shepherd (1998) BC 9801616 at 14, Anderson J (with whom Franklyn and Ipp JJ agreed) said:
"When a person is charged on particulars giving one set of facts, he really cannot be convicted on proof of a different set of facts - at least not unless he has had a fair opportunity of defending himself on those different facts."
No application was ever made by the Crown to amend count (1).
For these reasons, the appeal fails. But, before parting with the case, I should make it clear that, had the Crown shown there was a case to answer, an order for a new trial made pursuant to s 690(3) would not by any means automatically have followed. Section 690(3) provides that the Court "may order a new trial". A discretion is involved, and in its exercise the Court should regard the principle of double jeopardy, not as abrogated, but as modified, by the Crown's right of appeal, which, as I have said, Wickham J has described as "unique". It is for a special case, and where a verdict is directed on the ground the evidence is inadequate, but this Court thinks there was just enough to go to the jury, public justice may call only weakly for a further hearing, while private justice to the respondent may require full weight to be given to the fact that once already he has stood his trial.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : COURT OF CRIMINAL APPEAL
CITATION: R -v- TURNER [2001] WASCA 344 (S)
CORAM: MALCOLM CJ
WHEELER J
HEARD: 9 AUGUST 2001
DELIVERED : 6 NOVEMBER 2001
SUPPLEMENTARY
DECISION :8 APRIL 2004
FILE NO/S: CCA 2 of 2001
BETWEEN: THE QUEEN
Appellant
AND
JOHN TURNER
Respondent
FILE NO/S :CCA 3 of 2001
BETWEEN :THE QUEEN
Appellant
AND
RONALD KINNEY
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :KENNEDY DCJ
File Number : IND 1452 of 1999
Catchwords:
Criminal law and procedure - Appeal by the Crown under s 688(2) of the Criminal Code (WA) against verdicts of acquittal - Costs
Legislation:
Criminal Code (WA), ss 529(b), 611A, 688(2)(b), 690(3)
Judiciary Act 1903 (Cth), s 35
Suitors Fund Act 1964 (WA), s 10(1)
Supreme Court Act 1935 (WA), s 37(1), s 37(2)
Result:
No order as to costs
Category: A
Representation:
CCA 2 of 2001
Counsel:
Appellant: Mr K M Tavener
Respondent: Mr A O Karstaedt
Solicitors:
Appellant: State Director of Public Prosecutions
Respondent: Karp Steedman Ross-Adjie
CCA 3 of 2001
Counsel:
Appellant: Mr K M Tavener
Respondent: Mr R J Burbidge QC & Mr N D Pope
Solicitors:
Appellant: State Director of Public Prosecutions
Respondent: Gadens
Case(s) referred to in judgment(s):
Affleck v The King (1906) 3 CLR 608
Amand v Home Secretary & Minister of Defence of Royal Netherlands Government [1943] AC 147
C v Johnson [1967] SASR 279
Carter v Managing Partner, Mallesons Stephen Jaques & Ors (1993) 11 WAR 159
Jamieson v The Queen (1987) 34 A Crim R 308
Latoudis v Casey (1990) 170 CLR 534
Perry v The Queen [1975] WAR 33
R v Goia (1988) 19 FCR 212
R v Gross [1946] OR 1
R v J (1983) 49 ALR 376
R v Martin (1984) 58 ALJR 217
R v Scott [1907] VLR 471
R v Stevenson [1907] VLR 475
R v Udechuku [1982] WAR 21
R v Whitworth (1988) 164 CLR 500
Case(s) also cited:
Griffiths v The Queen (1977) 137 CLR 293
R v Hyman & French (1990) 2 WAR 222
R v Pavia (1993) 67 A Crim R 364
R v Punevski (2001) 122 A Crim R 342
MALCOLM CJ and WHEELER J:
This Application
These appeals by the Crown were heard on 9 August 2001 and dismissed by a unanimous decision of this Court on 6 November 2001: R v Turner & Kinney [2001] WASCA 344. Counsel for Mr Kinney and Mr Turner were requested to apply within seven days should they wish to make an application for costs. Such an application was made and written submissions were duly filed. On 4 February 2002 the parties were informed that the question of costs would be determined on the basis of the written submissions without the need for a further hearing. Unfortunately, notwithstanding a letter from the respondent's solicitors dated 2 November 2002, the Court file was put to one side and no action was taken to distribute the papers to the members of the Court until further inquiry was made by the respondent's solicitors in early February 2004.
By a letter dated 2 March 2004 the Chief Justice has apologised both personally and on behalf of the Court for this lapse and the delay and inconvenience caused to the respondents as a result.
The appeal was made under s 688(2)(b) of the Criminal Code which provides that:
"An appeal may be made to the Court of Criminal Appeal on the part of the prosecution –
…
(b)against any verdict of acquittal on an indictment and any judgment founded thereon when such verdict has been found by direction of the Judge or other authority entitled to give directions on law to the jury at the trial."
Section 690(3) of the Code also provides that:
"On any appeal against an acquittal by direction … the Court, if it allows the appeal, may reverse any judgment, decision, or verdict, the correctness of which was in question in the appeal, and may order a new trial or that the accused shall stand his trial, as the case may require."
The Trial and Appeal
Mr Turner was indicted on two counts. The first, under s 409(1)(d) of the Code, alleged that with intent to defraud Fletcher Construction Australia Ltd by fraudulent means, he caused a detriment to that company to the value of $40000 by procuring an employee to negotiate a subcontract with Ketta Nominees Pty Ltd, as trustee for the Concrete Boys Trust trading as the Concrete Boys, for the Midland Gate Shopping Centre Project which included an allocation of $40000 for the payment of a secret commission.
The second count was that on 9 September 1993 at Perth, Mr Turner corruptly paid one Ronald Kinney, an agent of the Australian Builders' Labourers' Federated Union of Workers (WA Branch) a valuable consideration, namely $20000, the receipt of which would tend to influence Mr Kinney to show favour to Fletcher Construction Australia Ltd at its construction site at the Midland Gate Shopping Centre Project in relation to the business of the union, contrary to s 530(b) of the Code.
Mr Kinney was charged with a related offence to that alleged in count 2, namely, that on 9 September 1993 at Perth being an agent of the relevant union, he corruptly received a valuable consideration, namely $20000, the receipt of which would tend to influence him to show favour to Fletcher Construction Australia Ltd at its construction site at the Midland Gate Shopping Centre Project in relation to the business of the union, contrary to s 529(b) of the Code.
At the joint trial of Messrs Turner and Kinney, following the closure of the Crown case, a submission was made on their behalf that they had no case to answer. The submission was upheld by the learned trial Judge, Kennedy DCJ, and verdicts of acquittal were returned by the jury on her direction.
The Crown appealed against the decision that there was no case to answer and sought a retrial in accordance with s 688(2)(b) of the Code, supplemented by s 690(3). This is an unusual provision in common law jurisdictions in that it provides for a Crown appeal against a directed verdict of acquittal: R v Udechuku [1982] WAR 21 at 23 per Wickham J.
On appeal, Burchett AUJ (with whom Malcolm CJ and Wheeler J agreed) reviewed the cases, in particular R v Scott [1907] VLR 471 at 474 per Cussen J; R v Stevenson [1907] VLR 475 at 476 ‑ 477 per Hood J; R v Gross [1946] OR 1 with which Bray CJ agreed in C v Johnson [1967] SASR 279 at 290 – 291, and concluded that payments were "corrupt" if they were agreed to by an employee without "the consent and approval of the principal", which was the element which made the receipt or payment corrupt. In Johnson at 301, Chamberlain J said:
"The corrupt or wrongful intention contemplated by the provision is to my mind the intention of an agent to take advantage of his relationship with his principal to secure some benefit to himself or some other person, without the knowledge of his principal."
Reference was also made to a similar passage in the judgment of Young CJ (with whom Fullagar J agreed) in Jamieson v The Queen (1987) 34 A Crim R 308 at 312.
In the present case, applying the test to which I have referred, the trial Judge ruled that, taken at its highest, the evidence was not capable of negativing the union's assent to the payment. As Burchett AUJ said in par [17]:
"It is important to emphasize that this was not a blackmail or extortion case. The prosecution related to a 'secret commission', alleged to have been paid corruptly to an agent of the union. If it was in truth a donation to the union itself, in order to further good relations between Fletcher and the union, it was not a payment of such a valuable consideration as could come within s 530, nor was its receipt a receipt within s 529. The Crown's Outline of Submissions with respect to Mr Turner refers to the payment to 'the agent of the Union' as made 'to make the Union better disposed to Fletcher'. That fundamentally misconceives the nature of a secret commission, and seems to be directed to some impropriety (of which there is no evidence) on the part of the union itself. But, so misconceiving the matter, the Crown case did not attempt to show, by circumstantial evidence or otherwise, that the union was in fact ignorant and uninvolved, and Mr Kinney the recipient of a commission for himself."
His Honour went on to say that the decision that there was no case to answer on counts (2) and (3) did not actually depend upon the correctness of the view that the Crown had to show an absence of knowledge and assent by the union. As Burchett AUJ put it in par [18]:
"More fundamentally, there was no evidence capable of showing that the payment was made or received otherwise than as a payment, not to the agent, but to the principal, the union. If a failure to disprove assent would be fatal to the Crown case, a failure to disprove involvement in the payment must be so a fortiori."
So far as the fraud count in count (1) against Mr Turner, it was held that this raised some different questions. The learned trial Judge held there was no case to answer in relation to count (1) because there was no evidence that Mr Fletcher did not know and approve what was done. Rather than the intention being to cause a detriment to Fletcher Construction Australia Ltd, the payment was aimed at procuring a benefit in terms of the good will and co‑operation of the union. It was held that that was so, whether the payment was to the union itself or was a secret commission designed to buy the influence with the union of its agent, Mr Kinney.
There was also no evidence which linked Mr Turner with the particular method, alleged to be fraudulent, by which the money was to be obtained with the assistance of one of the subcontractors. While the proprietor of the subcontractor "didn't disagree with that", there was no evidence that the mechanics had been the subject of instructions from Mr Turner or that Mr Turner was aware of what precisely was done.
Costs of the Appeal
The starting point for consideration is s 37 of the Supreme Court Act 1935 which, until amended by Act No 65 of 2003, provided that:-
"(1) Subject to the provisions of this Act and to the Rules of Court and to the express provisions of the Local Courts Act 1904, or any other Act, the costs of and incidental to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge, and the Court or Judge shall have full power to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid.
(2) Nothing in this section shall alter the practice in any criminal cause or matter, or in proceedings on the Crown side of the Court."
Section 37(2) was extensively considered in Carter v Managing Partner, Mallesons Stephen Jaques & Ors (1993) 11 WAR 159, by Malcolm CJ with whom Rowland and Franklyn JJ generally agreed. There was discussion by Malcolm CJ at pp 171 – 174 of how a "criminal cause or matter" was to be identified. After a review of the authorities, his Honour concluded that the decision in Amand v Home Secretary & Minister of Defence of Royal Netherlands Government [1943] AC 147 remained the leading authority on the subject. The effect of that decision is summarised accurately for present purposes in a passage from the speech of Lord Wright in that case at p 162, which reads:
"The principle which I deduce from the authorities I have cited and the other relevant authorities which I have considered, is that if the cause or matter is one which, if carried to its conclusion, might result in the conviction of the person charged and in a sentence of some punishment, such as imprisonment or fine, it is a 'criminal cause or matter'. The person charged is thus put in jeopardy. Every order made in such a cause or matter by an English court, is an order in a criminal cause or matter, even though the order, taken by itself, is neutral in character and might equally have been made in a cause or matter which is not criminal."
Other authorities considered by Malcolm CJ demonstrate that a proceeding will take its character from the "underlying proceedings", so that in that case, orders made to set aside subpoenas issued by the accused were orders made in a criminal proceeding or matter because of the character of the underlying criminal proceedings. In the present case, neither party suggests that the appeal by the Crown was not a criminal cause or matter. We accept, based on the analysis in Carter, that it was.
The question then arises as to what was, at the time of the enactment of s 37 of the Supreme Court Act, the relevant "practice". The respondents accept that there is or was a general rule that the Crown neither receives nor pays costs, but submits that there is no established practice to that effect "in relation specifically to unsuccessful Crown appeals brought under s 688(2)(b)". There is, therefore, the respondents submit, no relevant "practice". Further, it is submitted by the respondents that there are, in any event, exceptions to the general rule that the Crown neither pays nor receives costs and that those exceptions encompass "at least certain sorts of appellate proceedings instituted by the Crown". Authority for that proposition is said to be found in R v Goia (1988) 19 FCR 212 and R v Whitworth (1988) 164 CLR 500, the latter following R v Martin (1984) 58 ALJR 217 at 218.
The submissions of the respondents, in our view, are not an accurate analysis of the practice which was established at the time of the passage of s 37 of the Supreme Court Act, and which was expressly preserved by s 37(2). As was explained in Carter at pp 175 – 176, the "practice" not to award costs for or against the Crown in criminal proceedings was founded on the common law rule which, in turn, was based on the prerogative right of the Crown not to receive or pay costs. The basis for the rule was explained by Griffith CJ in Affleck v The King (1906) 3 CLR 608 at 630 as follows:
"There is no doubt that at common law the Crown is by its prerogative exempt from the payment of costs in any judicial proceeding, and that this right cannot be taken away except by Statute. …"
In this Court, in Perry v The Queen [1975] WAR 33, Virtue J pointed out (at 35) that there is no right to costs either civil or criminal at common law, the right to costs being a creature of statute. The right of successful litigants to costs in civil proceedings was conferred by statute comparatively early in English legal history, but so far as criminal proceedings or other proceedings in which the Crown was a party, the old rule long prevailed.
At pages 176 – 177 of Carter, Malcolm CJ traced the history of the gradual abrogation by statute of Crown immunity in relation to costs in this State. In civil proceedings, the Crown Suits Act 1861 and the later Crown Suits Act 1898 provided for the costs of suits to be payable by and to the Crown in the actions with which they dealt. No such provision was made in relation to the costs of criminal proceedings on indictment, although the Justices Act 1902 provided by s 151 and s 152 that in the case of summary proceedings Justices could order that a convicted defendant pay costs or that an acquitted defendant received them.
Even where the Crown's immunity from payment of costs was abrogated by a specific statutory provision, there remained in criminal proceedings in the United Kingdom, and in many Australian jurisdictions, what might loosely be described as a "practice", by which the courts were sparing in their awarding of costs against the Crown. It was often suggested that it was necessary for a defendant to demonstrate some unreasonable conduct on the part of the prosecution before an award of costs in favour of the defendant would be made. The varying practices, and the underlying principles, are canvassed in Latoudis v Casey (1990) 170 CLR 534.
It was in this common law and statutory context – that is, against the background of a rule that the Crown was immune from costs unless the immunity was abrogated by statute, and the absence of any such abrogation in respect of criminal proceedings on indictment – that s 688(2)(b) of the Criminal Code was enacted. The history of that provision is discussed by Wickham J in R v Udechuku (supra) at 22 – 23. His Honour dissented in the result, but his analysis of the legislative history is uncontentious. It was in 1911, by the Criminal Code Amendment Act, that the right of appeal found in s 688(2)(b) was created. At the time of its enactment, the "practice" in relation to the award of costs in respect of such appeals can only have been that the Crown could not be ordered to pay costs. That is because the proceedings were proceedings by the Crown in respect of which there was no statutory abrogation of the Crown's immunity.
It follows, then, that at the time of the enactment of s 37 of the Supreme Court Act in 1935, the "practice" in respect of Crown appeals against acquittal was that no costs orders could be made against the Crown. This was the practice expressly preserved by s 37(2), rather than the "practice", discussed in Latoudis v Casey, of awarding costs sparingly where such costs were by statute able to be awarded in criminal proceedings. It follows, then, that the Court is not able to award costs to the respondents.
The cases cited by the respondents as establishing that there is an exception, in certain sorts of appellate proceedings, to the general rule that costs will not be ordered in favour of or against the Crown, are cases dealing with the "practice", discussed in Latoudis v Casey, of refraining from awarding costs even where there is a statutory discretion to award them. R v Goia (supra) adopts the reasoning in R v J (1983) 49 ALR 376. In the latter case, Gallop J noted (at 378) that the power of the court to award costs was provided for by s 43(1) of the Federal Court of Australia Act 1976, and was "in the discretion of the court" by reason of s 43(2). His Honour noted that there was nothing in the Federal Court of Australia Act which placed the Crown in any special position in relation to costs. Similarly, although the source of the jurisdiction to award costs against the Crown was not discussed in either R v Martin (supra) or R v Whitworth (supra), it is to be noted that s 26 of the Judiciary Act 1903 confers upon the High Court jurisdiction to award costs in "all matters" (a "matter" being defined by s 2 "as any proceeding in a Court").
Conclusion
For the reasons given above, it is our conclusion that the Court lacks power to award costs to the respondents. It is, as the respondents note, apparently anomalous that s 10(1) of the Suitors Fund Act 1964 would have entitled them to apply for an indemnity certificate in respect of the appeal had they been unsuccessful. However, there is no corresponding provision dealing with successful respondents to Crown appeals. Whatever may be the broader public policy considerations in relation to Crown appeals from acquittals generally, it is unfortunate that there is no discretion to award costs in a case such as the present when the Court reached the view that the Crown's failure to raise a case to answer was based upon an absence of evidence in respect of one of the matters which it had to prove. However, there being no discretion, the only course open to the respondents would appear to be to seek an ex gratia payment.
22
11
1