R v Wilkie

[2008] NSWSC 739

Reported Decision: 68 ACSR 281

New South Wales

Supreme Court

CITATION:	R v WILKIE [2008] NSWSC 739
HEARING DATE(S):	9-10 July 2008
JUDGMENT DATE :	17 July 2008
JURISDICTION:	Common Law
JUDGMENT OF:	Michael Grove J
DECISION:	Stay of trial on indictment refused
CATCHWORDS:	CRIMINAL LAW AND PROCEDURE - Acquittal of accused by direction at trial arising out of alleged misconduct as chief operating officer of insurance company (FAI General) - Further charge alleging different misconduct - Different co-accused on each set of charges - No abuse of process
LEGISLATION CITED:	Crimes Act 1914 Royal Commissions Act 1902
CATEGORY:	Separate question
CASES CITED:	Jago v District Court of NSW (1989) 168 CLR 23 R v Kite [1992] 60 A Crim R 226 Ridgeway v The Queen (1995) 184 CLR 60 The Queen v Carroll (2002) 213 CLR 635 Walton v Gardiner (1992-3) 177 CLR 376 Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522
PARTIES:	REGINA - Respondent/Crown Daniel WILKIE - Applicant/Accused
FILE NUMBER(S):	SC 2007/00002619
COUNSEL:	A Macsporran SC; M Wigney SC; T Berberian - Crown L Robberds QC; M Thangaraj - Accused
SOLICITORS:	Commonwealth Director of Public Prosecutions - Crown Speed & Stracey- Accused

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
CRIMINAL LIST

MICHAEL GROVE J

Thursday 17 July 2008

2007/00002619 - REGINA v Daniel WILKIE

JUDGMENT (On application for permanent stay of proceedings)

1 HIS HONOUR: On 14 September 2007 Daniel Wilkie (the applicant) and Ashraf Kamha were arraigned upon an indictment containing six counts, three counts being charged against each accused. Pleas of not guilty were entered and a trial was fixed to commence on 7 July 2008. On that date a fresh indictment was presented against Kamha. The single count in that indictment repeated what had previously been count 3 and, upon arraignment, Kamha pleaded guilty. Pursuant to the procedure in s 16BA of the Crimes Act 1914 he asked that there be taken into account on sentence a further offence which was similar in terms (with some variation in the particulars) to what had been count 5 in the previous indictment. Kamha has been remanded for a sentencing hearing at a later date.

2 It has been indicated that a fresh indictment against Wilkie will simply repeat what were counts 2, 4 and 6 and they will now be numbered counts 1, 2 and 3. In brief, count 2 (1) charges that being an officer of FAI General Insurance Company Limited (FAIG) he knowingly failed to act honestly in the exercise of his powers and duties with the intention of deceiving the Australian Stock Exchange (ASX). Count 4 (2) charges that as such officer he was privy to the fraudulent altering of a book relating to the affairs of FAIG, namely the AEGIS database. AEGIS was an electronic record maintained by FAIG to process and record premiums, payments, insurance details and case estimates. Once the lastmentioned estimates were made they were entered into AEGIS by authorized staff. Count 6 (3) charges that he committed an offence similar to that charged in count 1, the party deceived being Cooper and Lybrand Actuarial Services Pty Limited which were FAIG’s external actuaries. For the purpose of a comparison I will later set out in full the terms of these counts.

3 Also on 7 July 2008 Wilkie moved the Court for a permanent stay of proceedings on the indictment and it is that with which I now deal. An alternative application for a separate trial from Kamha has become redundant.

4 The application is based upon a contention that the proceedings upon the indictment are an abuse of process. There is no doubt about the power of the Court to order such a stay where that is found to be the case. A perception of abuse may emerge from a variety of possible circumstances and situations: Ridgeway v The Queen (1995) 184 CLR at 60. Nevertheless it is a power that must be exercised with restraint and due recognition of the authority of a prosecutor to bring proceedings and have allegations determined by an appropriately constituted tribunal. In Walton v Gardiner (1992-3) 177 CLR 376 it was observed in the joint judgment (Mason CJ, Deane and Dawson JJ at 392) that a finding that continuation of proceedings would be “so unfair and unjustifiably oppressive” as to constitute an abuse of process was something of which a court would be satisfied only in an exceptional or extreme case. In R v Kite [1992] 60 A Crim R 226, Debelle J spoke to similar effect noting previous statements that the discretion would be exercised in rare cases. It is the nature of an order for stay that allegations do not proceed to determination. In testing whether continuation of proceedings would be unfair to an accused, his or her interests must be balanced against the right of the community to expect that persons charged with criminal offences are brought to trial: Jago v District Court of NSW (1989) 168 CLR 23 at 33.

5 It has not been disputed in this hearing that the power to order a stay should only be exercised in exceptional cases. The applicant submits that this is an exceptional case. It is accepted that what is involved is an appeal for the exercise of discretion but, if the grounds for it are made out, it should be exercised. I am content to approach the issues on that basis.

6 In a written submission counsel for Wilkie summarized their submission by contending that to require him to face these charges would be vexatious, oppressive and unfair, and, amount to bringing the administration into disrepute for these reasons:

“(i) in the first trial the Crown alleged that by 5 December 1997, the applicant was aware that FAIG was under reserved in the International Book (T57\27-36; T58\33 – 51; T59\2 – 16. The under reserving the subject of the first trial, was under reserving in the International Book);
(ii) in the first trial the Crown alleged that in June 1998 the applicant was at pains to ensure that the under reserving identified by a Mr Trahair in the International Book, was not disclosed to Coopers & Lybrand, because if it was disclosed to Coopers & Lybrand it would then have been disclosed to FAI’s auditor (T1812\7 – 10);
(iii) in this trial the Crown alleges that in December 1997 the applicant was aware of under reserving in the International Book. In this trial it is also alleged that the applicant took steps to ensure that the under reserving was not disclosed to Coopers & Lybrand (who at the time were involved in providing an actuarial assessment to be used for the FAI accounts for the six months ended 31 December 1997);
(iv) on the Crown case in this trial, the 2 January 1998 deductions (which are referred to below) brought about under reserving. The Crown alleges that the applicant knew of that under reserving and took steps to ensure that Coopers & Lybrand did not know of it;
(v) well before the commencement of the first trial, the Australian Securities and Investments Commission (ASIC) and the Crown were aware of the case which the Crown seeks to make against the applicant in this trial concerning the reductions made on 2 January 1998, the under reserving brought about by those deductions and the under reserving in the International Book;
(vi) the charges in this indictment arise out of facts which were before the Court in the first trial ( R v Carroll 213 CLR 635 at [130] per McHugh J. See also Gleeson CJ and Hayne J at [47]);
(vii) the charges the subject of the first trial alleged a series of offences of the same or similar character as the offences the subject of the indictment in this trial and the charges the subject of this trial should have been included in the indictment in the first trial ( Connelly v Director of Public Prosecutions [1964] AC 1254 at 1347 per Lord Devlin);
(viii) on 2 July and 27 August 2001 the applicant was privately examined pursuant to section 19 of the ASIC Law at the premises of ASIC. The section 19 notices referred to an investigation into HIH Insurance Limited and subsidiaries;
(ix) On 6, 7, 8, 11 and 12 March and 23 and 24 April 2002, the applicant gave evidence before the HIH Royal Commission;
(x) the applicant ceased his employment after he gave evidence before the HIH Royal Commission on 12 March 2002 as a result of the publicity given to the Royal Commission and other than a short time in a family business, has remained unemployed since that time by reason of the Royal Commission, the first trial and this trial; and
(xi) in November 2005 the applicant was acquitted on all three charges the subject of the first trial.”

7 In a written response counsel for the Crown submitted that analysis would demonstrate that the applicant’s case for a stay essentially depended upon three contentions namely:

“(a) The charges in this indictment arise out of facts which were before the Court in the first trial involving the applicant.
(b) The charges the subject of the first trial alleged a series of offences of the same or similar character as the offences the subject of the indictment in this trial.
(c) The charges the subject of this trial could and should have been included in the indictment in the first trial.”

8 It is the Crown submission that none of these contentions is correct. In his oral submissions Mr Robberds QC for the applicant submitted that the proposed trial involved unacceptable unfairness or injustice for three main reasons, first that two trials arise out of the same series of alleged events; second this use of the court’s processes will bring the administration of justice into disrepute and, third, the applicant has been subjected to coercive powers of the State since 2001 as a result of which he has effectively remained unemployed.

9 It is therefore necessary to examine the issues at the first trial and to refer to some of the evidence therein for comparison with what is anticipated to be the case in the scheduled trial. It will also be necessary to refer to some of the sources of information concerning the alleged conduct of the applicant.

10 Beginning on 5 September 2005 the applicant (with others) stood trial (the first trial) upon an indictment charging, relevantly, three counts against him. Those counts were in these terms:

“The Director of Public Prosecutions of the Commonwealth of Australia, who prosecutes in this behalf for Her Majesty, charges in the Supreme Court of New South Wales in its criminal jurisdiction at Sydney on 5th September 2005 that
DANIEL WILKIE
1. Between about 1 March 1998 and 6 May 1998 at Sydney in the State of New South Wales, being an officer of FAI General Insurance Company Limited (‘FAIG’) knowingly did:
(a) fail to act honestly in the exercise of his powers and the discharge of the duties of his office;
(b) with the intention to deceive the auditors of FAI Insurances Limited;
in that he caused FAIG to enter into a transaction with General and Cologne Reinsurance Australasia Limited (‘GCRA’) the substance and effect of which was that FAIG agreed to pay premiums totalling $67.5 million to GCRA in order to obtain a maximum reinsurance recovery from GCRA of $65 million but which transaction was structured in such a way to conceal its true substance and effect.
And the said Director of Public Prosecutions further charges that
DANIEL WILKIE
2. Between about 23 June 1998 and 26 June 1998 at Sydney in the State of New South Wales, being an officer of FAI General Insurance Company Limited (‘FAIG’) knowingly did:
(a) fail to act honestly in the exercise of his powers and the discharge of the duties of his office;
(b) with the intention to deceive the auditors of FAI Insurances Limited;
in that he caused FAIG to enter into a transaction with General and Cologne Reinsurance Australasia Limited (‘GCRA’) that amended and extended a transaction entered into between GCRA and FAIG in May 1998 and the substance and effect of which was that FAIG agreed to pay premiums totalling $89.75 million to GCRA in order to obtain a maximum reinsurance recovery from GCRA of $87 million but which transaction was structured in such a way as to conceal its true substance and effect.
And the said Director of Public Prosecutions further charges that
DANIEL WILKIE
3. Between about 26 June 1998 and 9 September 1998 at Sydney in the State of New South Wales, being an officer of FAI General Insurance Company Limited (‘FAIG’) did permit the making available of information, namely information that FAIG had entered into a reinsurance contract with General and Cologne Reinsurance Australasia Limited (‘GCRA’) the terms of which were recorded in a document on GCRA letterhead and dated 26 June 1998 (the ‘Contract’), to the auditor of FAI Insurances Limited (‘FAI’), a company which controlled FAIG within the meaning of Chapter 2M of the Corporations Act, which related to the affairs of FAIG and which information to the knowledge of Daniel Wilkie omitted from it a matter or thing which rendered the information misleading in a material respect.
Particulars of the Omission
(a) that the substance and effect of the reinsurance arrangements entered into between GCRA and FAIG was not fully recorded in the Contract;
(b) the substance and effect of the reinsurance arrangements included that in addition to paying the premium specified in the Contract, FAIG would pay premiums totalling $12.5 million in relation to six other reinsurance contracts under which contracts FAIG would not seek reinsurance recoveries;
(c) the substance and effect of the reinsurance arrangements entered into between FAIG and GCRA included that FAIG would not seek reinsurance recoveries under one of the sections of the Contract, namely section 6.”

11 By 14 November 2005 and by direction of the presiding Judge, Wilkie was found not guilty by the jury on each of those counts.

12 The present indictment charges (using the current numbering):

“The Director of Public Prosecutions of the Commonwealth of Australia, who prosecutes in this behalf for Her Majesty, charges in the Supreme Court of New South Wales in its criminal jurisdiction at Sydney on 14 September 2007 that

DANIEL WILKIE
2 Between about 1 January 1998 and about 20 February 1998 at Sydney in the State of New South Wales being an officer of FAI General Insurance Company Limited (‘FAIG’) knowingly failed to act honestly in the exercise of his powers and the discharge of the duties of his office with the intention of deceiving the Australian Stock Exchange(‘ASX’).
Particulars
He permitted the accounts of FAIG to be consolidated with the accounts of FAI Insurances Limited (“FAI”) as at 31 December 1997, in circumstances where he knew that FAIG’s accounts had a falsely inflated profit figure, that this would falsely inflate the profit in the consolidated accounts of FAI and that the accounts of FAI were to be released to the ASX.

And the said Director of Public Prosecutions further charges that

DANIEL WILKIE

4. Between about 1 January 1998 and about 20 February 1998 at Sydney in the State of New South Wales being an officer of FAI General Insurance Company Limited (‘FAIG’), being a company to which section 590 of the Corporations Law applied, was within ten years before 27 August 2001, privy to the fraudulent altering of a book relating to the affairs of FAIG, namely the AEGIS database.
And the said Director of Public Prosecutions further charges that

DANIEL WILKIE

6. Between about 8 December 1997 and about 20 February 1998 at Sydney in the State of New South Wales being an officer of FAI General Insurance Company Limited knowingly failed to act honestly in the exercise of his powers and the discharge of the duties of his office with the intention of deceiving Coopers & Lybrand Actuarial and Superannuation Services Pty Limited (‘Coopers & Lybrand’).

Particulars
He permitted Coopers & Lybrand to be provided with data relating to case estimates in circumstances where he knew, or had reason to believe, that the data was incomplete and/or inaccurate.”

13 It is significant to observe the contrast between the spans of time specified in respect of the counts in the two indictments, those in the present antedating those in the first trial indictment in which the earliest span has a commencement date of 1 March 1998.

14 At material times Wilkie was a director of FAIG which was a subsidiary within the corporate complex which can conveniently be called the FAI Group. He was described as the chief operating officer and head of general insurance operations of the Group. In turn, the FAI Group was part of the HIH Insurance Group.

15 The gravamen of the charges in the indictment presented at the first trial was the conduct of the applicant in the particularized transactions. In broad terms, which will suffice for present purposes, they were entered so as to appear as contracts for reinsurance by which part of the risk borne by FAIG was transferred to GCRA as reinsurer. Such would be calculated to appear to examiners such as auditors or actuarial supervisors as regular reinsurance activity, whereas it was the Crown contention that what was truly involved was not risk reinsurance but financial reinsurance, a transaction which has in essence the characteristics of a loan. If that true nature (financial reinsurance) had been disclosed, there would be a requirement for a debit in the balance sheets of FAIG which would, in due course, flow into the proclaimed trading results of the holding company. No equivalent debit would be raised for a risk reinsurance contract and the trading would then be made to appear more profitable than it was, or, disguise what was effectively a trading loss.

16 As can be seen in the specifications of the counts, the present intended trial has no allegation concerning any dealing with GCRA, the earliest date upon which misconduct was alleged in the first trial being 1 March 1998 in contrast with the latest date in which misconduct is alleged in the present indictment of 20 February 1998.

17 At the first trial it would have been obvious that evidence that Wilkie arranged financial reinsurance rather than conventional risk transfer reinsurance could not, in isolation, be expected to demonstrate a failure to act honestly which the Crown needed to prove. To fulfil this requirement there would have to be tendered evidence of background and other matters to give context, and ultimately if the prosecution was to succeed, requisite proof.

18 As a point of commencement, it was contended that in about late 1997 or early 1998 senior officers of FAIG realized that there were major shortfalls in reserves allocated to meet risks in a number of insurance portfolios. Included was the “international book” which will be particularly germane to the new indictment. Some calculations were made which suggested that if the under reserving were brought into account as should be done, the outcome would be something of a financial catastrophe for the FAI Group. In about late November or early December 1997 Wilkie commenced negotiations with a reinsurer, Willis Faber and Dumas Limited (Willis). A proposition was canvassed in broadly the same terms as were later entered into with GCRA. An executive of Willis described what was sought as accessing the balance sheet of a insurer/reinsurer but that the “deal” involved no risk transfer. The necessity of a payment of a premium was recognized but it was noted that the client (represented by Wilkie) “would like to see this wrapped up as a reinsurance product”.

19 In the event Willis declined any deal. In the meantime a like proposal was being canvassed with GCRA which culminated in the transactions mentioned in the particulars in the counts in the first indictment.

20 What is common between the allegations in support of each indictment is that evidence would show that, what the Crown asserts Wilkie to have done, was done in an attempt to forestall a feared disaster consequent upon the under reservation to meet claims. However, in respect of the present matter, the critical event occurred on 2 January 1998 when the case estimates (and hence required reserves) on about 80 insurance claim files were reduced by just under $24 million. It is the Crown case that there was no proper basis for those reductions which were in due course entered into the AEGIS database. The consequence of this change when consolidated into the holding company’s accounts proclaimed a profit when, if the reductions had not been made, a loss would have been revealed.

21 The counts for the proposed trial as above recited allege that Wilkie was privy to the fraudulent alteration in the estimates. He knew what the false result would cause to the half yearly report to the ASX for the period ended 31 December 1997 and he knowingly permitted the tainted data to be transmitted to the ASX and also that the same data would be used by Coopers & Lybrand in their actuarial task of seeking to provide some updated estimates in respect of some portfolios.

22 It is true that background evidence at the first trial canvassed the realization of the shortfall in reserves but it was not part of the case on any one of the counts that the reductions of estimates on 2 January 1998 were germane, indeed the Crown did not seek to tender evidence in respect of them. It was conceded that in some documents there was in fact a reference to “case estimate manipulation” which is accepted must refer to what happened on 2 January 1998 but to the extent that this incidental material was then before the Court it ceases to have significant weight now in the light of the Crown statement that it is not intended to tender these documents in the scheduled trial because they postdate the charge periods.

23 The case at the first trial was that the purported reinsurance arrangements were put in place to avoid accounting for under reserving with the consequence of inflated positive result for the consolidated accounts for the year ending 30 June 1998. This is in obvious contrast to manipulation of accounts for a different period being the half year ending 31 December 1997. It adds to the distinction between the activities which were the subject of the separate charges that it appears that after the December 1997 accounts were completed reserves attached to the 80 claim files were from time to time increased. Any restoration in the subsequent period would not, of course, extinguish any already executed deception based upon those accounts.

24 To the extent that there were incidental facts before the Court in the first trial which may emerge in the proposed trial I am not satisfied that there would be any duplication so as to lead to a conclusion that the proceedings being contemplated are unfair to the applicant.

25 As the sketches of the alleged offences above set out amply demonstrate, the series of offences in the first indictment are not of similar character to those in the second. The first relates to presenting a reinsurance transaction which was, in truth, a financial transaction whereas the second relates to as fraudulent reduction in risk estimates with consequent deceptive presentation of accounts. What may be said to be of the same or similar character was the apparent motive for the offences. That does not make the offences themselves of the same or similar character.

26 Reference was made to the fact that a witness statement served by the Crown for the first trial canvassed the deductions which had been made on 2 January 1998. The making of those deductions and the entry into the financial reinsurance arrangements were both directed to avoiding the ultimate consequences of the shortfall in reserves which the applicant was shown to have been aware, at least by December 1997. It was contended that these allegations were fundamental to the Crown case. I have referred to motive. Motive is not an ingredient of crime which requires proof but a prosecutor may, if in a position so to do, call evidence relevant to it. The elements of the crimes charged in the first trial included dishonest entry into the particular arrangements and the reason for so doing, that is cloaking the shortfall, was a matter of motive and not a “fundamental allegation”.

27 As the specifications of the counts in the indictment make obvious those in the new indictment are different from those presented at the first trial, however, it must be accepted that the absence of direct inconsistency between new and earlier charges does not inevitably demonstrate that the second prosecution is not oppressive or an abuse of process: In reaching my conclusion I have borne in mind the caution expressed by McHugh J in The Queen v Carroll (2002) 213 CLR 635 at 673 that the double jeopardy rule may be infringed by prosecutorial harassment in substance but not in form. Having regard to the distinction abovementioned the current matter is in my view far short of any such infringement: at 673 and 650.

28 I am not satisfied that there is a similarity of character of the charges so as to constitute the presentation of the new indictment an abuse of process.

29 The fact that some evidence will be repeated at a second trial does not involve the reproduction of the evidence in a previous long trial in the sense that was mentioned in Kite at 230. It is plain that, to the extent that there may be repetition, it is to fulfil a need to demonstrate how the corporations operated, who reported to whom and who had what responsibility. There is no abuse of prosecutorial power which would amount to harassing the applicant by deliberate splitting of allegations into multiple indictments. It was not suggested, nor does the material show, that ASIC had some ulterior motive in bringing the present charges.

30 The applicant further argued that abuse of process should be perceived from the failure to charge the misconduct to be alleged in the new indictment in the first proceedings. In support of this submission attention was directed to a considerable amount of material including notes of interviews with witnesses by ASIC investigators, statements taken from witnesses for the purpose of their investigation and for the HIH Royal Commission, as well as evidence given to the Royal Commission.

31 Whether the applicant is being subjected to unfairness for oppression should not be determined by combing, with hindsight what were at the time uncoordinated items of information collected by investigators without taking into account a realistic assessment of the magnitude of the task upon which those investigators were engaged.

32 Particularly in relation to counts 2 and 4, a contest to the submissions of the Crown was presented by detailing the “evidence available” to ASIC at various times which were before the first trial proceedings. I do not consider it necessary to recapitulate that detail. Whether the applicant has been treated unfairly and the processes of the Court are being abused needs to be gauged upon a factual view of what was required of ASIC and the Director of Public Prosecutions to discharge their prosecutorial responsibilities. It is not helpful to assemble snippets of information which can now be pointed to, without bearing in mind that extensive and detailed examination of the complexities of the operations within a large corporate structure was being undertaken.

33 The evidence of Ms Balding provided a revealing description of what was involved. In May 2001 an investigation by ASIC into the affairs of the HIH Insurance Group was extended to include suspected breaches of the law in relation to FAI and its subsidiaries. FAI was at relevant times part of the HIH Group. The focus of investigation was initially directed to the purported reinsurance contracts which ultimately became the subject of charges at the first trial.

34 In August 2001 the Royal Commission was established and in April 2003 the report of the Royal Commissioner (Owen J of the Supreme Court of Western Australia) was tabled in the Federal Parliament. The applicant had been given leave to appear at the Royal Commission. In May 2003 charges were laid against him and others concerning the reinsurance arrangements which were litigated at the first trial. This trial took place between September and November 2005.

35 The Royal Commission had identified some 56 matters involving potential breaches of the law, and some 53 of these related to corporations law. These were referred to ASIC for investigation. They did not include a referral concerning reductions on 2 January 1998 but the report contained an important statement concerning them:

“The 2 January 1998 adjustments are (a) very serious matters. They are indicative of a manipulative approach to case estimates. But in the light of the dearth of evidence as to the provenance of the list, who directed its preparation and how it was dealt with, I am unable to apportion responsibility”.

36 Thus, as the content of the report was absorbed by ASIC investigators they would have become aware of the apparently improper reductions but further inquiries of their own would be required in order to identify who was responsible.

37 I earlier mentioned the magnitude of the tasks upon which ASIC became engaged. There was legislation in June 2003 to enable the transfer of the Royal Commission records from the Department of the Prime Minister and Cabinet to ASIC and this was done in the following month. Initially about 640 boxes of hardcopy material were delivered and subsequent additions increased this to a total of about 900 boxes. In the course of its own investigations, ASIC itself had accumulated some 2,350 hardcopy records.

38 It would be absurd to contemplate that the activities of the applicant which related to the 2 January 1998 reductions or, for that matter, the financial reinsurance arrangements were an exclusive target of inquiry. Nevertheless, from the mass of information there emerged a specific focus of investigation to be directed to the January 1998 reductions. This had occurred by April 2004.

39 Whilst ASIC had access to the Royal Commission documentation, it was necessary to be borne in mind that there existed an inhibition upon the use of such material otherwise pursuant to s 6DD of the Royal Commissions Act 1902.

40 Ms Balding’s affidavit affirmed 7 July 2008 set out a detailed summary of interviews and the taking of statements from a substantial number of possible witnesses whose evidence could cast light on the allocation of responsibility for the seemingly improper reductions in reserves on 2 January 1998. I do not recite that content but it presents a powerful demonstration of the size of the task. A submission by the applicant that the elements of the charges now sought to be brought are not complex raised a false issue. Complexity is not to be gauged simply upon the elements of the charge but must include considerations concerning, first, the gathering and then the capacity to present evidence to prove those elements. All of this is relevant to consider when abuse of process is alleged.

41 In accordance with an established procedure recorded in a Memorandum of Understanding ASIC submitted the results of its investigations and the anticipated evidence which it had collected to the Director of Public Prosecutions. This occurred in March 2005 but the investigations remained ongoing. Detail of the latter is also set out in Ms Balding’s affidavit.

42 Consideration by the Director of Public Prosecutions led to the provision on 12 October 2005 of court attendance notices for service on the applicant (and Kamha and one Anthony Boulden. In December 2006 Boulden pleaded guilty and was dealt with for an offence concerning a reduction of estimates on 23 January 1998). As at 12 October 2005, the first trial was current and, I infer by arrangement with his lawyers, the court attendance notice was not served upon the applicant until after the termination of the trial. Service was effected on 15 November 2005.

43 Even assuming that ASIC was seized of all the snippets of information which would enable charges to be brought concerning the 2 January 1998 deductions, which is disputed by the Crown, it is the Crown contention that it is doubtful that the counts in the new indictment could have been joined with that presented at the first trial. I agree for the reason that I have already expressed, namely, that the two sets of offences are not of the same or similar character. Their commonality is limited to motive and, obviously, the corporate identity. Further, even if that be incorrect, it is predictable that the co-accused, if they chose, would have been successful in obtaining severance. It is not alleged that Kamha had anything to do with the financial reinsurance arrangements nor is it alleged that the co-accused at the first trial, Mainprize and Burroughs had anything to do with the 2 January 1998 reductions.

44 I am not satisfied that the bringing of separate proceedings constitutes an abuse of process.

45 This leads to the question of overall delay. It is self evidently more than ten years since the critical occurrence of the reductions, the half yearly report to ASX and the conveyance of information to Coopers & Lybrand.

46 The affidavit of Mr Scott reveals that, subject to some limited activity in a family business, the applicant has been unemployed since March 2002. He has had inquiries about the finality of proceedings from sources which may provide employment in the industry in which he has spent the greater part of his career.

47 Particular attention was directed to the adjournment of the committal proceedings which added a period of about ten months to the delay before the scheduled commencement of trial. There is no need to recapitulate the correspondence covering the adjournment and the reasons for it. I am not persuaded that there is a perceptible absence of bona fides nor that this element of delay should lead to the prevention of trial taking place. No complaint is made about any burden of the costs of litigation on the applicant: Wilkie v Gordian Runoff Limited (2005) 221 CLR 522.

48 In determining the balance noted above in reference to Jago, the community interest cannot be gauged without account being taken of the context in which offence is alleged to have been committed and that is, to say the least, a corporate collapse of such immensity that its repercussions led to a major royal commission of inquiry and express legislation and executive action to ameliorate some of the widespread losses of insurance protection in that community.

49 A volume of evidence was presented concerning a potential witness Mr Spratt. A statement by him had been served and he appeared on lists of intended witnesses supplied by the prosecution at the first trial. Some arrangements for his attendance from overseas were communicated. In the event, a decision was announced that he would not be called by the prosecution. Senior counsel for the applicant emphasized that no explanation for the decision accompanied the announcement and it was submitted that I should infer that the Crown was seeking to avoid him being cross examined on credit at that trial and, so to speak, “saving him up” for the purported second trial.

50 I do not draw that inference. Such statements relevant to Mr Spratt’s evidence which have been put before the Court on this motion would amply justify the decision not to call him at the first trial. I am not in a position to assess the atmosphere of that trial as it progressed to termination but the material tendered includes the rulings of the presiding judge which reveal the basis for the directed acquittals. It is entirely possible that the hurdle facing the prosecution was becoming apparent and the presence or absence of evidence from Mr Spratt could not vary the outcome. In making that observation, I stress that I do not seek to diminish the restoration of the presumption of innocence vested in the applicant in respect of the charges at the first trial consequent upon the verdicts of not guilty.

51 A somewhat speculative submission was made which postulated the possibility of the applicant being later charged with offences involving the same conduct but a different victim of deception or, at least, a victim in a different capacity. If something of the sort were to occur, it could no doubt be determined on its merits. That such speculation can be made does not make the case exceptional.

52 Senior counsel for the applicant contended that this was an exceptional case. Insofar as it might be, it is not in the sense that it is unfair or places an intolerable burden on the applicant, but exceptional in the vastness of the circumstances which needed to be examined in order to determine what charges should be brought and against whom.

53 Since the preparation of the foregoing, without objection by the Crown, the applicant’s motion was reopened and a further affidavit by Mr Scott dated 14 July 2008 has been read. It exhibits, inter alia, some exchange of correspondence regarding document production by the prosecution which, leaving aside the question of the justiciability of a notice to produce in addition to the pre-trial disclosures which have been directed, would seem to merit the description of “fishing” contained in it.

54 The particular matter raised upon reopening was focussed upon a remark by senior counsel for the Crown at the first trial (who is not appearing in the present proceedings although his former junior counsel continues to appear) which emerged in a discussion, in the absence of the jury, about the absence at that trial of Kamha as a witness. The remark was made on 3 November 2005 and the transcript (T1661) records:

“CROWN PROSECUTOR: The prosecution of Mr Kamha has been charged has been on the cards for sometime. I could say myself and my junior involved in advising the Crown in relation to a very very complex matter, certain recommendations were made some time ago and decisions reached.”

55 In these proceedings the affidavit of Fiona Gayler affirmed 7 July 2008 attested that on 14 March 2005 ASIC sent a partial brief to the Director of Public Prosecutions. Some further material was later supplied. It is an agreed fact that the relevant date pertinent to par 33 of the affidavit was 3 August 2005. That paragraph reads:

“33. Some of this additional evidence included in the brief of evidence for evaluation was obtained by ASIC following discussions with the CDPP. Given the highly complex nature of the proposed prosecution the CDPP’s evaluation included obtaining and considering advice from Counsel.”

56 The thrust of the submission in relation to this material was that it reinforces the proposition that the applicant should have been charged with the present matter at the first trial. For the reasons and in the circumstances adumbrated above, I remain unpersuaded by this additional material that the current prosecution represents an abuse of process in any sense.

57 I am not satisfied that any cause has been shown for the exercise of the power of the Court to prevent the determination of the charges by trial. The motion for stay is dismissed.

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