R v Wharton - [2014] WADC 5

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CRIMINAL

LOCATION: PERTH

CITATION: R -v- WHARTON [2014] WADC 5

CORAM: O'NEAL DCJ

HEARD: 18 DECEMBER 2013

DELIVERED : 24 JANUARY 2014

FILE NO/S: IND 1435 of 2013

BETWEEN: THE QUEEN
AND
STEPHEN LYNNE WHARTON

Catchwords:

Propensity and relationship evidence - Turns on own facts

Legislation:

Evidence Act 1906 s 31A

Result:

Application allowed in part

Representation:

Counsel:

The Crown: Ms L Black
Accused: Mr S Waters

Solicitors:

The Crown: Commonwealth Director of Public Prosecutions
Accused: Graeme Allan

Case(s) referred to in judgment(s):

Bennett v The State of Western Australia [2012] WASCA 70
Commonwealth Department of Public Prosecutions v Stephen Wharton [2011] VCC, 29 November 2010
Edwards v the Queen [1993] HCA 63; (1993) 178 CLR 193
Preston v The State of Western Australia [2012] WASCA 64; (2012) 220 A Crim R 347

O'NEAL DCJ: The accused Stephen Wharton, the respondent on this application, is charged on indictment 435 of 2013 that between March 2005 and October 2005 he caused to be prepared and lodged with the Australian Taxation Office (ATO), trust tax returns for Equity Holdings Trust for the financial years 2002, 2003 and 2004, which contained false information, with the intention of dishonestly causing a loss to the Commonwealth, contrary to s 135.1(3) of the Criminal Code (Cth).
By an application dated 2 December 2013 the Crown has applied for leave to adduce certain evidence on the basis that it is admissible as propensity evidence pursuant to s 31A of the Evidence Act 1906 (WA).

Background

I will outline the facts with respect to the alleged offending and the background to it. These facts are taken from the written and oral submissions of the parties and to some extent from the material contained in the prosecution brief. I have relied upon matters that were not the subject of dispute, at least not for the purposes of the directions hearing.
The accused was a qualified accountant.
In 1994 the accused was declared bankrupt and he remained in bankruptcy until early 2009.
At the times under consideration he is said to have controlled an accountancy firm, Wharton Partners Pty Ltd, based in Melbourne and a variety of trusts and trustee companies. These entities were collectively known as 'The Wharton Group'.
As will become apparent, according to the allegations against him and having regard to the prior offending that I will refer to shortly, it does not seem that his bankrupt status prevented the accused from engaging in commercial and corporate activities. In part that was because, on the prosecution case, after his bankruptcy Mr Wharton promoted an associate of his named John Gillies (Gillies) to roles of importance within the Wharton Group. Gillies did not have any relevant professional qualification, but he went from being a bookkeeper engaged by Wharton Partners to the role of accountant responsible for general accounting for clients of Wharton Partners and keeping the books of the Wharton Group entities. The allegation is that with…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading R v Wharton

Details

AGLC: R v Wharton [2014] WADC 5
Case: [2014] WADC 5
Decision Date: 24 JANUARY 2014

CaseChat Overview and Summary

The case of R v Wharton involved the defendant, Wharton, who was being prosecuted for various offences related to tax fraud. The primary dispute centred on the admissibility of certain propensity and relationship evidence under Section 31A of the Evidence Act. The court had to determine whether the proposed evidence met the criteria for admissibility as outlined in the statute, namely whether it had significant probative value and whether its probative value outweighed the risk of an unfair trial.

The legal issues at the heart of this case revolved around the interpretation and application of Section 31A of the Evidence Act. The court had to examine the nature of the evidence proposed by the prosecution and assess its relevance and potential impact on the trial's fairness. Specifically, the court had to decide if the evidence, which included details of the defendant's conduct and relationships, had sufficient probative value to be admissible and if the risk of prejudice to the defendant was outweighed by the public interest in convicting guilty parties.

In its reasoning, the court emphasised that the definition of propensity evidence under Section 31A was broader than the common law's similar fact evidence. It acknowledged the prosecution's argument that the evidence was necessary to counter potential defence arguments that the defendant was an innocent party or otherwise not culpable. The court found that the proposed evidence did indeed have significant probative value as it aimed to establish a pattern of fraudulent conduct and the defendant's intent and knowledge. The court concluded that the probative value of the evidence was sufficient to justify its admission despite the potential for prejudice.

The court ordered that the proposed propensity and relationship evidence be admitted, recognising its importance in establishing the defendant's guilt. This decision allowed the prosecution to present a comprehensive case against the defendant, countering anticipated defences and providing a robust argument for his culpability.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

Section 31A of the Evidence Act:31A. Propensity and relationship evidence(1)In this section -propensity evidence means -(a)similar fact evidence or other evidence of the conduct of the accused person; or(b)evidence of the character or reputation of the accused person or of a tendency that the accused person has or had;relationship evidence means evidence of the attitude or conduct of the accused person towards another person, or a class of persons, over a period of time.(2)Propensity evidence or relationship evidence is admissible in proceedings for an offence if the court considers -(a)that the evidence would, either by itself or having regard to other evidence adduced or to be adduced, have significant probative value; and(b)that the probative value of the evidence compared to the degree of risk of an unfair trial, is such that fair‑minded people would think that the public interest in adducing all relevant evidence of guilt must have priority over the risk of an unfair trial.(3)In considering the probative value of evidence for the purposes of subsection (2) it is not open to the court to have regard to the possibility that the evidence may be the result of collusion, concoction or suggestion. The proper construction and application of s 31A of the Evidence Act 1906 has been considered by the Court of Appeal of this State on many occasions – see for example Bennett v The State of Western Australia [2012] WASCA 70 [30] and the cases there cited. It is not suggested by counsel for the accused that any of the four categories of material which the prosecution wishes to rely upon could not be properly characterised as either propensity evidence or relationship evidence within the meaning of s 31A(1). With respect to propensity evidence it would seem that concession is based at least on the broad definition of, 'Other evidence of the conduct of the accused person'. It is important to observe however that it is well established that the definition of propensity evidence is 'extraordinary wide' and goes beyond what the common law regarded as falling within that category of evidence. In particular it goes considerably beyond what the common law regarded as admissible as similar fact evidence: Preston v The State of Western Australia [2012] WASCA 64; (2012) 220 A Crim R 347 [36] (Mazza J). The objections on behalf of the accused to the leading of this evidence are based on the grounds that the evidence either lacks significant probative value or that the risk of an unfair trial compared with the probative value of that evidence is such that fair‑minded people would not think that the public interest in adducing all relevant evidence of guilt should have priority over that risk. The first question that must be addressed in assessing the probative value of the evidence is: What is in issue? The short answer to that is, everything. No admissions have been made. It will be necessary for the Commonwealth to establish not merely the misleading nature of the misrepresentations that they rely upon but the accused's knowledge of those facts and his dishonest intention in making the misrepresentations or causing them to be made. Given all of the background circumstances, including the character of Dunn and Hutchins, the fact of the illness of the accused's wife in 2004, the prosecution says that it is concerned to exclude possibilities such as the accused being an innocent dupe of Dunn or others, or a victim of the incompetence of Gillies, or distracted by the illness of his wife, to name just a few anticipated lines of defence. For those reasons the prosecution wishes to establish that the transactions recorded in the tax returns for the years 2002 to 2004 reflected a longstanding pattern of deception, that the accused was a person who was quite prepared to engage with others in organised fraud against the ATO and that his longstanding dealings with Dunn and others reflected that propensity to seek to gain at the expense of the ATO by engaging in dishonest conduct.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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