Re Lewis
[1995] QSC 73
•28 April 1995
IN THE SUPREME COURT
OF QUEENSLAND
O.S. No. 156 of 1994
Brisbane
Before Mr Justice Ambrose
[Re Lewis]
IN THE MATTER of The Public Officers' Superannuation Benefits Recovery Act 1988
- and -
IN THE MATTER of an Assessment authorised to be made pursuant to Section 7 of The Public Officers' Superannuation Benefits Recovery Act 1988 relating to TERENCE MURRAY LEWIS
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered : 28/04 /1995
CATCHWORDS: SUPERANNUATION - Application by the Treasurer to make Lewis liable to the Crown with respect to his publicly funded superannuation - ss.6-8 of the Public Officers' Superannuation Benefits Recovery Act 1988 - corruption commenced three quarters of the way through service - offences involved very serious corruption - "gain" involves not merely gain to the convicted person, but also gain by other persons who benefited - respondent's wife failed to prove she was unaware of her husband's corruption - other civil causes of action were considered as factors also.
Counsel:Mr B Dunphy for the applicant
Mr J Jerrard Q.C. for the respondent
Solicitors:Crown Solicitor for the applicant
Hillhouse Burrough McKeown for the respondent
Hearing Date: 22 September 1994
IN THE SUPREME COURT
OF QUEENSLAND
O.S. No. 156 of 1994
Brisbane
Before Mr Justice Ambrose
[Terence M Lewis]
IN THE MATTER of The Public Officers' Superannuation Benefits Recovery Act 1988
- and -
IN THE MATTER of an Assessment authorised to be made pursuant to Section 7 of The Public Officers' Superannuation Benefits Recovery Act 1988 relating to TERENCE MURRAY LEWIS
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered : 28/04/1995
This is an application by the Treasurer of Queensland for the assessment of the liability of Terence Murray Lewis, the respondent to the application, to pay to the Crown with respect to his publicly funded superannuation entitlement a sum assessed in accordance with s.8 of the Public Officers' Superannuation Benefits Recovery Act 1988 ("the Recovery Act") as amended by reason of his conviction of prescribed offences which he committed while holding the public office of Commissioner of Police for the State of Queensland.
The respondent was born on 29 February, 1928 and became a member of the police force and commenced continuous contributions to the Police Superannuation Fund on 17 January 1949. That fund was established pursuant to the Police Act 1937. In 1968 the Police Superannuation Act 1968 ("The Superannuation Act") was passed and under s.18 of that Act all moneys and entitlements under the 1937 Act were transferred to the Police Superannuation Fund established under the 1968 Act. Further benefits became available under the Police Superannuation Act 1974.
The respondent contributed to the Police Superannuation Fund from 1968 until he ceased to be a member of the police force on 19 April 1989.
On 29 November 1976 the respondent was appointed Commissioner of Police for the State of Queensland. He was then 48.75 years of age.
He reached 60 years of age on 29 February, 1988.
Following an investigation into police corruption, the respondent was suspended from duty as Commissioner of Police on 2 September 1988 (in his 60th year). On 19 April 1989 the respondent ceased to be a member of the Queensland Police Force by virtue of s. 4 of the Commissioner of Police (Vacation of Office) Act 1989. ("Vacation of Office Act").
On 5 August 1991 the respondent was convicted of 15 offences involving corruption. One count was under s. 87 of the Criminal Code and the other 14 counts were under s. 121 of the Criminal Code. The respondent appealed unsuccessfully against conviction to the Court of Appeal in Queensland and applied unsuccessfully for special leave to appeal to the High Court on 4 March 1993.
Under s.6(1) of the Recovery Act it is provided:
"6(1) A publicly funded superannuant who is convicted after the commencement of this Act of an offence that is a prescribed offence committed by the superannuant while the superannuant held a public office thereby incurs a liability to pay to the Crown a sum assessed in accordance with section 8."
Under s.7 of the Act, it is provided:
"7(1) Application may be made by the Minister to a Judge of the Supreme Court to assess the quantum of liability incurred by a person under 6(1).
(2) If the Judge hearing the application is satisfied that -
(a)the person convicted of the offence or offences to which the application relates is a publicly funded superannuant; and
(b)the application relates to 1 or more prescribed offences; and
(c)the liability incurred under section 6(1) by the person upon conviction of that prescribed offence or those prescribed offences subsists;
the Judge shall order the person to pay to the Treasurer on behalf of the Crown a sum, considered by the Judge to be just and equitable, assessed by the Judge in accordance with section 8."
Some factors relevant to the assessment of the liability of the respondent are set forth in s. 8.
Under s.4 of the Act, a "prescribed offence" is defined to mean -"(a)an indictable offence consisting wholly or partly of conduct of the offender -
(i)by which the offender -
(A)asks for or receives or obtains any property or benefit of any kind for the offender or another person; or
(B)agrees or attempts to engage in conduct mentioned in sub-subparagraph (A); and
(ii)that is engaged in on the understanding that the offender will be influenced or affected in the exercise of the functions or powers of a public office held by the offender; or
(b)an indictable offence consisting wholly or partly of conduct of the offender -
(i)by the which offender pays or gives, or agrees or attempts to pay or give, to a person any property or benefit of any kind for the person or another person; and
(ii)that is engaged in on the understanding that the person or other person will be influenced or affected in the exercise of the functions or powers of a public office held by the person or other person;
and includes an offence against any of the following provisions of The Criminal Code -
(c)section 87 (Official corruption)
(d)section 120 (Judicial corruption)
(e)section 121 (Official Corruption not Judicial but relating to Offences)."
It is clear that the offences of which the respondent was convicted in August 1991 were "prescribed offences" to which s. 6(1) of the Act applies.
With respect to the 15 offences of which the respondent was convicted, the earliest offence occurred between 1 January 1978 and 1 December 1978 and the latest offence occurred between 1 January 1987 and 30 April 1987.
By virtue of s. 4(3) of the Recovery Act where a person is convicted of a "prescribed offence" which is alleged to have occurred on a date unknown in a specified period the offence is deemed to have been committed on the date on which the specified period terminated.
Accordingly in the present case the period during which the relevant "prescribed offences" of which the respondent was convicted are deemed to have been committed is between 1 December 1978 and 30 April 1987 - a period of about 8 years and 5 months.
On the facts of this case between the date of his appointment as a probationary police officer on 8 November 1948 and the date he ceased to be a member of the police force on 19 April 1989 by virtue of the 1989 Vacation of Office Act, the respondent was a member of the police force for a period of 40 years and 7 months.
To put it broadly then the respondent was a member of the police force for a little over 40 years and was convicted of offences relating to corruption deemed to have occurred during the last 10.3 years of his service (keeping in mind that he was suspended during the last 7.5 months of that period).
Section 8(1)(b) of the Recovery Act specifies, without in any way limiting the discretion of the judge making the assessment, four factors relevant for consideration upon assessment of liability under s.7 of the Act.
The quantum of liability may not under s. 8(1)(a) exceed the difference between the value of the whole of the benefits that have accrued to the superannuant in respect of his employment in which he was engaged when he committed a "prescribed offence" of which he was convicted and the amount of any contributions actually paid to the fund by that superannuant together with interest thereon.
Section 8(1)(b) provides:"without limiting the matters that a Judge may consider relevant to such assessment of liability, a Judge may have regard to the following matters and to such evidence as is before the Judge concerning those matters:-
(i)the proportion borne by the length of the convicted person's service in public office before the person first committed an offence by reference to which the person has incurred the liability to the length of the person's total service in public office;
(ii)the nature of the offence or offences upon conviction of which the convicted person has incurred the liability and the degree of corruption evidenced by that offence or those offences;
(iii)the value of the gain to any person from the offence or offences upon conviction of which the convicted person has incurred the liability;
(iv)the degree of hardship likely to be occasioned by the convicted person's complying with an order made under section 7 (2) to the convicted person's spouse or dependant (if any) who satisfies the Judge that she or he was not aware of the conduct that has resulted in the convicted person's incurring the liability."
In this case for the purposes of s. 8(1)(b)(i), I treat the beginning of the respondent's service in public office as the date of his appointment as a probationary in the Queensland Police Force which is 8 November 1948. I treat the respondent's "total service in public office" as terminating on the date of his suspension on 2 September 1988. In my view, s.8(1)(b)(i) does not treat the period of suspension of the respondent between 2 September 1988 and 19 April 1989 as part of "the length of the respondent's total service in public office".
It is convenient to address in order each of the matters specified in s. 8(1)(b).
With respect to s.8(1)(b)(i), from date of appointment as probationary in the Queensland Police Force until the date of his suspension as Commissioner of Police for Queensland the respondent served approximately 39 years and 7 months as a member of the police force. He made contributions to Police Superannuation Funds between 17 January 1949 and 4 September 1988.
With respect to the offences of which he was convicted, he is deemed to have committed his first offence on 1 December 1978. It follows therefore that a period of approximately 10.3 years elapsed between the deemed date of commission of the first offence on 1 December 1978 and his ceasing service in the public office of Commissioner of Police on 19 April 1989 and one of 9.7 years between the commission of the first offence and his suspension from office on 2 September 1988.
The proportion to be considered under s.8(1)(b)(i) is 10.3 years (or arguably perhaps 9.7 years) against 39.16 years.
Roughly speaking therefore the respondent first committed a prescribed offence at a point in time almost three quarters of the way through his total service in public office. Under s.8(1)(b)(ii) the nature of the prescribed offences of which the respondent was convicted were offences involving very serious corruption. The corruption in which he was involved is traversed at great length in the transcript of evidence given upon trial which occupied 89 days with respect to the 15 counts upon which he was convicted. The evidence established that as Commissioner for Police in the State of Queensland the respondent used his position to facilitate officers of police to deliberately breach their obligations to properly and honestly administer laws designed to combat criminal activity, in return for a share of the money paid by criminals as bribes to permit them to continue the pursuit of their criminal activities without police investigation or interference. The degree of police corruption established by the evidence which secured the conviction of the respondent of the 15 prescribed offences was very significant. The evidence indicated that not merely did the respondent regularly receive a part of the bribes paid by criminals to ensure that their activities were not seriously impeded by members of the police force but that he used the position he held as Commissioner of Police for Queensland, and the undoubted influence which that office gave him in matters of administration, to ensure that corrupt policemen were appointed to positions of authority and influence in the police force which would facilitate the deliberate non-performance of the duties of police officers with respect to people paying bribes. Indeed he went so far as to consult regularly with Mr Herbert as to the suitability of police officers believed to be corrupt or corruptible for appointment and/or promotion to positions in the police force sensitive to the "protection" of criminal activities. I infer that police officers thought to be honest and honourable and unwilling to co-operate in the corrupt activities within the police force over which the respondent and his co-conspirator Herbert presided, were kept out of those sensitive areas while persons believed to be corrupt were for this reason promoted and transferred into them. The effect of this administration of the police force (mostly it seems in the Licensing Branch or parts of the force outside the Metropolitan area performing the duties performed by that Branch) must have been to greatly discourage honest and honourable members of the force in the performance of their duties and must have led many to abandon the pursuit of a career in the police force. One can only infer that many astute police officers in the ranks unable to compete for promotion with officers believed or suspected to be of a corrupt disposition would have left the force in disgust to the detriment of the force and the community generally. In my view it would be hard to contemplate more serious corruption in a Commissioner of Police than that evidenced by the 15 offences of which the respondent was convicted on 5 August 1991 viewed in the context of his administration of the police force under his control to facilitate that corruption.
With respect to s. 8(1)(b)(iii), I take the view that "the value of the gain to any person from the offences" involves not merely the gain to the respondent by virtue of the bribes he received - which upon the evidence amounted to $580,000 over the relevant 10 year period between the commission of the first offence on 1 December 1978 and his suspension on 2 September 1988. The value of the "gain" under s. 8(1)(b)(iii) refers also to gain by persons other than the respondent. It is reasonably clear upon the evidence that the respondent was at the apex of a highly organised and structured system of corruption in which corrupt police officers found at various levels in it, who were generally required to supervise and control more junior officers in the enforcement of the law, took portion of moneys corruptly contributed by law breakers as an insurance against any impeding of their illegal activities by police officers engaging in the investigative and law enforcement work which they were obliged to perform. The respondent being at the pinnacle of this corrupt system which ultimately depended upon him as Commissioner refraining from performing his duty, in my view, can be said to be responsible in part for the corrupt gains of various corrupt police officers who shared with him bribes paid for the joint benefit of themselves and the respondent over the period during which he committed the 15 offences of corruption of which he was convicted.
It is clear upon the evidence of Herbert that the size of the share of moneys collected as bribes taken by the respondent varied from time to time. During the course of his evidence, Herbert referred to the proportions of various bribes paid on different occasions which were distributed with respect to various aspects of police corruption and it is possible to infer from this evidence, the extent to which on those occasions other police officers benefited in comparison with the benefit enjoyed by the respondent. In this respect I refer to the following instances (being some only) of the sharing of moneys between the respondent and other corrupt policemen -
In 1978, bribes were paid by Rooklyn and Robinson. Subsequent to corrupt arrangements, Robinson gave Herbert $2,000 of which $1,500 was paid to the respondent. Subsequent payments of the same amounts were made in connection with these in-line machines and they were shared in the same proportions as had previously been the case - i.e. the respondent was given 75% of the bribery money paid.
Subsequent to April/May 1980, bribes were paid for the protection of gaming activities in Cairns. Payments of $4,000 per month for "the protection" of the games were made and of this sum, $1,500 was paid to the respondent.
In 1980, Herbert said that he was receiving corrupt payments from SP bookmakers of sums of between $1,500 and $1,700 per month, from which he paid $400 to the respondent.
In 1981, Tilley made monthly payments of $5,000 for the protection of prostitution. Of this sum, the respondent was paid $1,000 and the balance $4,000 was either kept by Herbert or paid to other corrupt policemen in the licensing branch in Brisbane.
In early September 1981, Herbert began to receive moneys from Tilley with respect to prostitution activities. While initially Tilley had made payments to Herbert of $5,000 per month of which he paid $1,000 per month to the respondent, these corrupt payments were later increased as further brothels were commissioned. When the corrupt payments from Tilley increased, the respondent received the same proportion of moneys - i.e. about 20% of the corrupt moneys paid.
From November 1981, over a period of 12 to 14 months, Conte paid $2,500 a month of which some $750 was paid to the respondent, $1,250 to the inspector of the licensing branch and $500 to Herbert.
In 1982, Herbert commenced simply to pool all the money he was receiving by way of bribery other than bribes relating to the operation of the "in-line machines". Towards the end of 1982, he was receiving in respect of illegal activities other than the operation of in-line machines, bribery to the extent of $25,000 per month. Of that sum, he was paying $5,000 per month to the respondent.
Towards the end of 1984, bribes were paid by Bellino and Conte to facilitate illegal gaming on the Gold Coast. Of the sum of $2,500 per month, $1,750 was paid to some officers of police on the Gold Coast and $750 was paid into a pool of money from which the respondent and some other police officers in the licensing branch were paid.
On one occasion when Hapeta and Tilley were involved in prostitution on the Gold Coast, Herbert received $1,000 per month from them of which he gave $750 to corrupt Gold Coast police officers and paid $250 into a pool, which was distributed between the respondent and some police officers in the licensing branch. Subsequently, other protection money paid at the rate of $500 per month was distributed in the same proportion between some police officers at the Gold Coast and the respondent and some members of the licensing branch in Brisbane.
With respect to moneys received from King in connection with prostitution activities on the Gold Coast, the arrangement was that he would pay $1,000 for some of the police officers on the Gold Coast and an extra $500 which was to be distributed between some of the police officers in the licensing branch at Brisbane and the respondent. King was advised that if he opened further premises, it would cost him $1,000 for additional premises. Eventually when bribery payments of $1,500 per month were received from King, the money was shared equally between some Gold Coast policemen and the "monthly pool" from which the respondent and some policemen in the licensing branch and Herbert were regularly paid. Eventually, when additional premises for prostitution were opened, payments by King of $2,500 per month were made and this was divided between some police officers at the Gold Coast who together received $1,500 and the balance $1,000 was paid into a pool of corrupt moneys shared by the respondent and some other policemen in the licensing branch.
In July 1986 in Cairns, Conte paid $1,500 per month of which the respondent's share was $1,000.
In mid-1986, bribes were paid with respect to prostitution activities on the Gold Coast operated by a man named Palmer. Only 2 or 3 payments of $1,000 were made with respect to this activity and of each sum $750 was paid to some police officers on the Gold Coast and $250 paid into a pool of corrupt moneys shared by the respondent and other corrupt police officers in the licensing branch at Brisbane.
With respect to the making of an adverse report on the introduction of poker machines into Queensland - presumably to protect the investment of moneys in poker machines which were illegal and which perhaps returned a significant income to their owners while their use in Queensland remained illegal, the respondent agreed to prepare such a report for the payment of $25,000. The arrangement was that the respondent would retain $15,000 for himself and $10,000 would be returned to Herbert. However, later the respondent according to Herbert, returned only $9,000 keeping $16,000 for himself. It is not clear whether this $1,000 which the respondent held back was "docked" from one of his other regular periodical payments of bribe moneys.
It is uncertain upon this material precisely what corrupt moneys were received by other members of the police force during the time when the respondent was Commissioner of Police and at the top of the system of corruption involving some other police officers. Although he took approximately 60% of the bribery money paid for the preparation of the report on in-line poker machines, it seems that this money was paid in respect of something for which the respondent was personally responsible - i.e. the preparation of the report. It is not in my view indicative of the share of bribery moneys generally received by the respondent, to procure non enforcement of the law by other police officers with respect to certain criminal activities in which the payers of the bribes were involved.
Looking at the material generally, it is my view that the respondent was probably paid less than half of the total moneys received by Herbert and/or other police officers in consideration of some police officers not interfering with specified illegal activities. By the end of 1982 bribery moneys were pooled and the respondent seems then to have received regularly 20% of the pooled sum - i.e. about $5,000 per month. I propose therefore to proceed on the basis that the $580,000 paid to the respondent was less, and probably significantly less, than 50% of the total of corrupt payments made for the benefit of corrupt members of the police force under the scheme of systematic corruption over which the respondent presided between the commission of the first offence upon which he was convicted on 1 December, 1978 and his suspension on 2 September, 1988.
As at 30 June 1994 the superannuation benefit and interest thereon unpaid to the respondent and held in escrow pursuant to s. 35(1) was a significant sum. I assume that the sum will have increased by reason of additional interest payments which have accrued since that time.
By virtue of s. 5 of the Vacation of Office Act, upon vacation of the office of Commissioner of Police by the respondent on 19 April 1989, he became entitled to the rights that he would have had if he had retired from the police force on that day and he is deemed on that day to have converted or commuted all benefits payable by way of superannuation to him. On that day he was a little over 61 years of age.
On the evidence the whole of the entitlement of the respondent to superannuation benefits on 19 April 1989 was the sum of $862,382.42.
Pursuant to s. 6 of the Vacation of Office Act the respondent was entitled on 19 April 1989 to a refund of all contributions made by him to the superannuation fund together with interest thereon to that time.
On 20 April 1989, the respondent was paid by way of refund of contributions the sum of $44,610.41 plus interest of $10,014.96 which had accrued to that date. This sum amounted to $54,625.37. The material discloses that the publicly funded part of the respondent's superannuation entitlement on 19 April 1989 amounted to $807,756.63. That sum has been held in escrow and as at 20 October 1994 the commutation figure of the publicly funded part of the respondent's entitlement comprising the publicity funded contribution from consolidated revenue together with interest earned thereon since 19 April 1989 amounted to $1,458,319.40.
I assume that this figure will have increased since October 1994 by something in excess of $50,000.
All told, therefore, the money held in escrow pursuant to s.35 of the Recovery Act probably presently stands at about $1.5 million. In my view, however, it is the amount of the publicly funded part of the respondent's superannuation entitlement as at 19 April 1989 which is relevant to the determination under s.7(1) of the Recovery Act, and the interest which has accrued since that sum has been held in escrow since 19 April 1989 should be disregarded, except to the extent that the respondent retains some benefit from the publicly funded portion of his entitlement upon this application and to the extent that reference must be made to the total "commutation figure (including interest)" and the "total contribution figure (including interest)" under s.8(1)(a) of the Recovery Act .
On behalf of the respondent it was contended that the 10 years of corruption proved against him while Commissioner of Police were preceded by 30 years of police service during which there had been no convictions -"and about which the deponents in this case speak of excellent Police service in those years by the respondent in which he performed both innovative work in creating police systems (such as the Juvenile Aid Bureau) demonstrated outstanding skills in more typical police work (such as Detective work) and won a George medal for bravery and a Churchill Fellowship.
These were genuine and undeniable achievements in his first thirty years. The record, which was unchallenged ... as to the opinions or facts of the deponents describes a consistently high achiever in those thirty (30) years who gave first class service".
Accepting those contentions, one must keep in mind the entitlement of the respondent to superannuation funded from consolidated revenue had he resigned just before his appointment as Commissioner for Police was a refund of his contributions to the relevant police superannuation funds of $14,193.80 plus interest in the sum of $840.09. Under the terms of the Funds he would not have been entitled to any contribution from public funds.
Further, until he reached the age of 60 years (on 29 February 1988) the respondent, had he retired, would have been entitled only to a refund of his own contributions to the superannuation fund plus interest.
Had he retired at age 60 when his annual income was $88,266.50 he would have been entitled to a lump sum payment of $187,524.56 in respect of his service as Commissioner of Police during the period 30 November 1978 to 29 February 1988.
These facts were agreed between the applicant and the respondent and placed before me by letter from The Deputy Crown Solicitor dated 17 March 1995.
The contribution from consolidated revenue to the superannuation fund with accretions after his appointment as Commissioner of police and prior to his vacation of office was $807,756.63.
Essentially therefore the whole of the sum in issue was publicly funded during the period that the respondent received $580,000 as bribes and was aware of, and in a sense partly at least, responsible for the receipt of at least that sum and probably more by other police officers by way of bribes; towards the end of that period the respondent took a share of only 20% of the pooled bribes while Herbert and various corrupt police officers between them took 80%.
With respect to s. 8(1)(b)(iv) the respondent's wife gave evidence that she will suffer financial hardship should there be forfeited to the Crown the whole of, or a significant part of, the benefits that have accrued by way of superannuation to the respondent since he first committed the prescribed offences of which he was convicted. This point was not really contested by the applicant.
Under s.8(1)(b)(iv), I may take into account that hardship, significant as it may be, only if satisfied by the respondent that she "was not aware of the conduct that has resulted in the convicted person's incurring the liability", that is, that she was not aware of the respondent's conduct which resulted in his conviction of the 15 offences of corruption in August 1991.
Under s.24(2) of the Recovery Act it is provided:"(2) Where an application under section 7(1) is made in respect of a convicted person, the registrar of the court before which the convicted person was convicted shall cause to be made and furnished to the registrar of the Supreme Court, for use by the Judge hearing the application, a transcript of the shorthand notes or record of evidence or statements of fact adduced or made to the court before which the convicted person was convicted."
Upon this application there was compliance with the requirement of s.24(2) of the Act.
Section 24(3) provides:
"(3) A document purporting to be the transcript referred to in subsection (2) shall be, in the proceedings upon the application under section 7(1), evidence and, in the absence of evidence to the contrary, conclusive evidence of all matters contained therein."
Upon the trial of the respondent, the Crown called Mrs Herbert who gave evidence that she arranged meetings with the respondent's wife on two occasions for the purpose of handing to her large sums of money which Mr Herbert had agreed to pay to the respondent as his share of bribes. This occurred between 1 January and 30 April 1987 i.e. more than 8 years after the commission of the first offence of which the respondent was convicted.
The evidence was led by the Crown to support its case on count 15 that the respondent and Mr Herbert had agreed that the respondent should be paid his share of bribes on two occasions by Mrs Herbert handing to the respondent's wife bundles of money wrapped in paper provided by Mr Herbert. The respondent was never charged with having received the bribes. He was charged with having agreed to receive them. Obviously receipt of the money was admissible as evidence of the agreement.
Upon the respondent's trial Mrs Herbert was cross-examined at considerable length to show that upon her evidence she and her husband were both accomplices of the respondent with respect to the offence charged on count 15 and that in any event her evidence against the respondent was false.
I have read the transcript of evidence given by Mrs Herbert. Under a long and penetrating cross-examination she admitted that when interviewed initially she said that although she gave parcels or packets to the respondent's wife she did not know what they contained. Subsequently however she admitted to persons involved in conducting the investigation that she was aware that there was money in the packets. It is clear therefore that she and her husband were both accomplices of the respondent and consequently the jury were warned of the danger of relying upon their evidence which was uncorroborated.
Before the jury Mrs Herbert admitted in cross-examination that she had been given an indemnity against prosecution by the Crown conditional upon her giving evidence before the jury in terms of the second statement which she gave to officers involved in the inquiry before the respondent's trial and which in essence was to the effect that both she and the respondent's wife had so conducted themselves as to show that in respect of two payments on separate occasions each knew that Mr Herbert had given his wife a parcel of money which she had given to the respondent's wife who received it on behalf of the respondent.
No effort was made to call Mrs Herbert to support this application by the Treasurer.
The respondent's wife made an affidavit used on the application and was cross‑examined upon it.
The respondent's wife gave evidence that the evidence given by Mrs Herbert was false. She said that she had never received packets from Mrs Herbert and that she had never collected money which she knew to be bribes for the respondent.
The difficulty I face upon this application is that on the one side I have the transcript of evidence given by Mrs Herbert who has not been called to have tested by cross-examination that evidence or whatever other evidence she might give. On the other side I have the affidavit of the respondent's wife who has been called for cross‑examination and I find nothing in her demeanour which would cause me for that reason alone to reject her evidence.
There is no doubt that the evidence given by the respondent's wife is "evidence to the contrary" of the evidence given by Mrs Herbert. It follows then that the evidence contained in the transcript of Mrs Herbert's evidence is not conclusive evidence of the matters dealt with in it. It is equally clear that it is evidence of those matters which must be weighed in the light of the evidence, given both by affidavit and orally by the respondent's wife.
There is of course a problem in assessing the reliability of transcribed evidence given upon the respondent's trial when there was no opportunity upon this application to test the witness whose evidence is recorded - particularly when that evidence is contradicted by a witness called upon this application who was cross-examined. In the present case, a relevant issue under s.8(1)(b)(iv) is the knowledge of the respondent's wife of the commission of the prescribed offences by her husband.
I am mindful that after a very long hearing a jury convicted the respondent upon count 15 which related to an agreement between Mr Herbert and the respondent that their respective wives should represent them for the purpose of Mr Herbert conveying to the respondent large sums of money paid as his share of bribes. While no doubt it is correct to say that the evidence of Mrs Herbert as to the handing over of bribery money to the respondent's wife was not critical to the jury's accepting that there was an agreement to that effect between Mr Herbert and the respondent, on a fair reading of the material and a consideration of the way the case was conducted, I cannot believe that the evidence given by Mrs Herbert was not regarded as strongly supporting the Crown case (although not corroborating it) concerning the agreement between the respondent and Mr Herbert for the handing over of bribery money by Mrs Herbert to the respondent's wife.
Looking at the matter broadly the evidence is to the effect that over a period of approximately 8.5 years the respondent received from Mr Herbert bribery money totalling $580,000. I infer from other material placed before me that no part of that money was treated as taxable income by the respondent. It appears that the respondent and his wife enjoyed a happy marital relationship. Indeed, the respondent's wife declared in the course of cross-examination upon this application that she believed that the respondent was innocent of the various offences of which he was convicted.
Accepting the evidence that the respondent received $580,000 over an 8.5 year period and paid no tax on it, I find it difficult to accept that the respondent's wife did not become aware that her husband was receiving bribes long before his suspension on 2 September 1988. It is clear upon the evidence that on quite a number of occasions during the relevant period the respondent and his wife came into contact socially with Mr and Mrs Herbert; they seemed to have enjoyed that social contact. On some occasions large bundles of money were paid by Mr Herbert to the respondent in the course of social visits by the respondent and his wife to Mr and Mrs Herbert. Mr Herbert said that the practice was for the two women to leave the two men "to talk business". There is no evidence that bribery moneys were handed to the respondent in the presence of his wife. Mr Herbert said that the bribes were in uncovered bundles of large denomination notes which the respondent was able to put into two or three of his pockets.
The evidence given by Mrs Herbert upon the respondent's trial, although not tested by cross-examination upon the application before me, was thoroughly tested on behalf of the respondent upon his trial. The onus is upon the respondent's wife to satisfy me on the balance of probabilities that she was not aware of the bribes accepted by the respondent. She has failed to discharge that onus.
In coming to this conclusion I pay no regard to the fact that the respondent's wife was not called upon the trial of the respondent to contradict the evidence of Mrs Herbert. The respondent faced very serious charges. The offences were committed over a long period of time. The Crown relied very substantially upon the uncorroborated testimony of accomplices. The effect of the respondent calling no evidence was to retain the advantage of his counsel making last address to the jury. In the whole scheme of things the decision made by or on behalf of the respondent not to call his wife to contradict Mrs Herbert is quite understandable. I treat the evidence of Mrs Herbert as merely part of the evidence upon this application which must be considered with the evidence of the respondent's wife to the contrary. The evidence of both Mrs Herbert at the trial and the respondent's wife upon this application must be considered in the light of all the other evidence given against the respondent upon his trial which is conclusive of all matters contained in it in the absence of any evidence to the contrary. In this respect where conflicting evidence was given concerning a matter upon the trial no part of that conflicting evidence is conclusive. There is no evidence to contradict the evidence of Herbert that he agreed with the respondent to transmit bribery money to him by having his wife give it to the respondent's wife and that he gave those moneys to his wife for that purpose. That evidence is circumstantial evidence upon this application supporting the evidence given by Mrs Herbert at the respondent's trial which is admissible upon this application.
There is no evidence as to what became of the $580,000 received as bribes over the 8.33 year period - i.e. how an average cash weekly receipt of approximately $1,340 (or $5,360 per month) was disposed of. To the extent that in some weeks or months there may have been less than that average amount of cash received, in other such periods there must have been a greater amount received. There is no evidence as to how the money was spent, invested, or otherwise disposed of. The most that can be said upon audit evidence is that sometimes amounts of money apparently drawn from moneys received as salary suggest either a very frugal life style or an undisclosed additional source of money to meet ordinary living expenses. I think it unlikely that the respondent's wife remained ignorant of payments of cash in the average sum of $1,340 per week or $5,360 per month received by the respondent over a period in excess of 8 years, or that the respondent often returned home from a social visit with her to Mr and Mrs Herbert with two or three pockets filled with large bundles of cash.
I have had regard to those matters when considering the evidence given by the respondent's wife upon this application in the light of the evidence given by Mrs Herbert and Mr Herbert upon the respondent's trial. Upon the balance of probabilities and applying s.24(3) of the Act I am persuaded that the respondent's wife probably was aware of the respondent's conduct which led to his conviction upon Count 15 upon his trial.
I am not satisfied that she was unaware of the respondent's conduct which resulted in his conviction upon Counts 1 to 14 inclusive and in arriving at that conclusion I give weight to the conclusion I have reached with respect to her awareness of the respondent's conduct which led to his conviction upon Count 15.
Finally in determining what sum it is just and equitable to require the respondent to pay to the Crown from his entitlement to publicly funded superannuation, it is permissible to consider matters additional to those specified in s.8 of the Recovery Act.
In Re Lane - Application No 936 of 1991 (unreported judgment of Ryan J. 9 October 1992) - regard was paid to the fact that the respondent in that case had voluntarily repaid moneys he had wrongly misappropriated in determining what sum it was just and equitable that he be ordered to pay to the Crown out of his publicly funded superannuation entitlement.
In this case it is clear that the corruption moneys received by the Respondent were at all times moneys held by him for and on behalf of the Crown. In Attorney-General for Hong Kong v. Reid [1994] 1 A.C. 324 Lord Templeman at 330 said:"Bribery is an evil practice which threatens the foundations of any civilised society. In particular bribery of policemen and prosecutors brings the administration of justice into disrepute. Where bribes are accepted by a trustee, servant, agent or other fiduciary, loss and damage are caused to the beneficiaries, master or principal whose interests have been betrayed. "
At 336 he continued:
"From these principles it would appear to follow that the bribe and the property from time to time representing the bribe are held on a constructive trust for the person injured. A fiduciary remains personally liable for the amount of the bribe if, in the event, the value of the property then recovered by the injured person proved to be less than that amount."
There are several other bases upon which the moneys received by the respondent may be recovered by the Crown -
(a)A suit for money had and received; see Reading v. The King (1951) A.C. 507 at p.518; Maheson v. Malaysia Housing Society (1979) A.C. 374 at p.380;
(b)An equitable claim for compensation for breach of fiduciary duty; Reading v. The King (supra)at p.518); and Maheson v. Malaysia Housing Society (supra) at p.380.
The civil obligation owed by the respondent to pay the Crown the amount of money he received as bribes is a relevant matter when considering what sum it is just and equitable he should pay to the Crown from his publicly funded superannuation entitlement. It is an additional matter to that specified in s.8(1)(b)(iii).
It is strongly arguable upon the facts of the present case that the respondent is also civilly liable to the Crown with respect to moneys received by other corrupt police officers and Mr Herbert as participants in the scheme of corruption over which the respondent presided and under which they all shared bribes.
In Barnes v. Addy (1874) 9 Ch. App 244 Lord Selbourne at p.251-252 pointed out that persons who assist in a breach of trust with knowledge of a fraudulent and dishonest design of the trustee become liable for that breach as constructive trustees.
In the present case the respondent and other persons receiving bribes were all parties to the one corrupt arrangement. They became personally liable not merely in respect of the bribes received by them individually but also as constructive trustees in respect of bribes received by others of their number pursuant to the corrupt arrangement and scheme to which they were all parties.
It is unnecessary to analyse in detail the law touching on this matter. I refer only to Selangar United Rubber Estates Ltd v. Craddock (No 3) (1968) 1 WLR 155 at p.1656 per Ungood - Thomas J and Karak Rubber Co Ltd v. Burden (No 2) (1972) 1 WLR 602 at p.632-633 per Brightman J.
Even were the respondent not civilly liable to the Crown with respect to bribes received by other corrupt police officers the amount of those bribes is expressly made relevant for consideration under s.8(1)(b)(iii).
In a civil action heard at date of judgment the Crown could claim upon the $580,000 received as bribes over the 10.3 year period prior to 19 April 1989 interest under the Common Law Practice Act at 10% p.a. for 5.15 years. This would amount to $298,700.
It could also claim interest at 10% p.a. upon that sum for the six year period that has passed between 19 April 1989 and date of judgment. This would amount to $348,000.
The total interest claimable with respect to the bribes personally received by the respondent amounts to $646,700.
A similar amount would be claimable in respect of moneys received by other corrupt police officers.
All told then the Crown would have a claim for interest in the sum of nearly $1.3M.
This is a relevant matter for consideration having regard to the enormous interest component in the respondent's maximum entitlement under s.8(1) of the Recovery Act. Of the sum of $1,434,126.55, being the maximum entitlement of the respondent on 28 April 1995, $626,369.92 accrued by way of interest since the respondent vacated his office on 19 April 1989.
I hold that it is just and equitable upon this application to assess the respondent's liability to be to make payment to the Crown of the maximum figure payable under s.8(1)(a) of the Recovery Act which is the sum of $1,434,126.55, being in effect the difference between the whole of the respondent's entitlement to superannuation on 28 April 1995 and the value of his contribution at that date. I disregard the fact that he was paid the whole of the value of his contribution upon his vacation of office on 19 April 1989 which seems to be required by the Recovery Act.
I assess the respondent's liability to make payment to the Crown the sum of $1,434,126.55 and pursuant to s.7(2) of the Recovery Act do order that he pay that sum to the Treasurer on behalf of the Crown.
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