Regina v Chacos

[2003] NSWCCA 4

CITATION:	Regina v Chacos [2003] NSWCCA 4
HEARING DATE(S):	21 October 2002
JUDGMENT DATE:	6 February 2003
JUDGMENT OF:	Heydon JA at 1; Hulme J at 104; Hidden J at 105
DECISION:	Appeal dismissed
CATCHWORDS:	Criminal law - obtaining money by deception - appeal against conviction - verdict unreasonable or could not be supported having regard to the evidence - beyond reasonable doubt - standard of proof - independent assessment of the evidence - reasonable for jury to convict - dishonestly obtained financial advantage - inducement - demand - protection payments - credibility - reliability of witness - source of funds
LEGISLATION CITED:	Crimes Act 1900 Criminal Appeal Act 1912
CASES CITED:	M v R (1994) 181 CLR 487 R v Dellapatrona (1993) 31 NSWLR 123
PARTIES :	Regina v Arthur George Chacos
FILE NUMBER(S):	CCA 60023/02
COUNSEL:	Mr M Thangaraj (Appellant) Mr P Ingram (Respondent)
SOLICITORS:	Vandenberg Reid (Appellant) S E O'Connor (Respondent)

LOWER COURTJURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	00/41/0061
LOWER COURT JUDICIAL OFFICER :	J B Phelan DCJ

60023/02

HEYDON JA
HULME J
HIDDEN J

6 February 2003

R v Arthur George CHACOS

Judgment

1 HEYDON JA: On 19 September 2001 the appellant was convicted on 23 counts of obtaining money by deception contrary to s 178BA of the Crimes Act 1900 after a trial presided over by Judge J B Phelan DCJ lasting eleven days. He appeals against conviction on the ground that the jury verdict “was unreasonable or could not be supported having regard to the evidence”.

Background

2 Each of the 23 charges took the same form, namely that on a particular date in a series of dates between 7 September 1993 and 27 August 1997, he dishonestly obtained a financial advantage to the extent of a particular sum of money by “pretending to Arthur Kostandinu that there was a real threat to his person which could be prevented by the payment of money” to the accused.

3 The essential facts as the trial judge saw them are recorded thus in his remarks on sentence:

“The facts are somewhat complex. The charges relate to a series of dates running from 7 September 1993 through to 27 August 1997. The victim is the uncle of the prisoner and they had had a close association throughout their lives.
The first count involved a demand for $20,000, it being represented by the prisoner that some third parties, mostly referred to as the Rebel Motorcycle Club and sometimes the Mafia, were demanding payment of money for protection. That is to say that if the money was not paid the victim would be shot in the kneecaps or possibly some worse action than that.
The victim said that he was in fear and he accepted right up until towards the end that his person was under threat.
The evidence suggests that on the various dates involved that sums of money, which I will read onto the record, were paid on these dates; 7 September 1993, $20,000; 25 July 1994, $160,000; $1,800 on 30 December 1994; $90,000 on 13 March 1995; $3,600 on 5 April 1995; $1,500 on each of the dates 2 May and 29 June 1995; $30,000 on 4 September 1995; $1,200 on each of the dates 29 February, 30 April, 25 May, 29 June 1996; payments of $1,500 on 23 August, 28 September, 14 October, 20 November, 25 December 1996 and $1,500 on 16 January 1997.
There were payments of $3,000 each on 3 March and 9 May 1997. $1,500 payments were paid on 28 June, 8 August and 27 August 1997.
The Crown’s case depended upon the evidence of the victim as well as a conversation that took place between the victim, the mother and father of the prisoner and Father Cockayne, the prisoner being in contact with the group by way of a phone which could be heard in the room.
The evidence was to the effect that Arthur Kostandinu had said something about not being able to continue making payments and that the prisoner had said that he would try and do something to help him.
That evidence was of itself not of conclusive interpretation, but the Crown primarily, apart from relying on the victim whose evidence, to say the least, was at some times shown to be poorly based or the subject of memory problems, was linked up with various payments that I have referred to and the lifestyle and financial records disclosed by the evidence relevant to the prisoner.
The starting point is that throughout the period, the prisoner and his wife received Newstart benefits from Centrelink starting in September 1993 and continuing until December 1997.
The prisoner’s wife received Parenting Allowance from 1994 until the end of 1997. During that period the most a couple with a child could earn before benefits ceased was a gross amount of $966.28 per fortnight.
Having received the proceeds of an AVCO cheque for $20,000 on or about 7 September 1993 the accused purchased a Harley Davidson motorcycle for $22,000. That could not be accounted for in any account held by the prisoner at the time.
Following the payment of the $160,000 on 25 July 1994 the prisoner paid airfares and insurance [totalling] $4,088 on 26 October 1994. On 3 November he paid $13,800 into the National Bank Mastercard. On 23 December 1994 he exchanged and settled a purchase of a property at Batemans Bay. A letter from Smith Vandenberg Reid, solicitors, stated that it was anticipated that the prisoner would pay $81,455 on settlement. Settlement took place on 23 December and the vendor received $74,978.50.
The prisoner entered a mortgage with the vendor for $100,000. If paid on or before 12 May 1995 no interest was to be charged.
At the time of purchase the prisoner still owned his Queanbeyan property which was mortgaged to the extent of $37,000. During the period 1 July 1994 to 1 January 1995 the highest amount held in the accused’s St George account was $2,308.92 and in his Westpac account $1,019.20.
The amount spent on the airfares, crediting MasterCard accounts and house purchase totalled $99,333 which could not be sourced from financial records, although the prisoner himself did say that his father had assisted him in relation to the airfare expenses.
On or about 13 March 1995 the amount of $90,000 was paid to Mrs J L Young for the discharge of the mortgage held by her over the prisoner’s property at Batemans bay. The victim had signed an authority on 10 March to pay $90,000 to the prisoner or at his direction.
On 28 March 1995 two cheques to J Young were forwarded which she banked on 30 March, one for $90,000 and the other for $9,100. The $9,100 could not be accounted for in the business financial records. Further, the financial records established that $90,000 was not repaid to the victim.
Following the sale on 7 April of the prisoner’s Queanbeyan property after paying out the mortgage two cheques totalling $94,000 were paid into the prisoner’s Westpac account.
On 19 April 1995 the prisoner went to Coffs Harbour and purchased a boat and trailer for $30,000 by bank cheque. $20,000 appears to have come from the prisoner’s Westpac account. The other $10,000 could not be accounted for from his financial records, though a witness claimed to have supplied the difference.
I do not propose to examine in detail the smaller amounts that were paid on a regular mostly monthly basis. In relation to the prisoner being paid the $30,000 on or about 4 September the prisoner deposited $9,000 into a Westpac cash management account on 6 November. On 15 December $1,000 was paid into a Westpac account. On 28 December $9,200 was paid into a Westpac cash management account and on 29 January $5,500 into a similar account.
The total amount of the $24,700 could not be accounted for in the prisoner’s financial records.
Income tax returns from the prisoner for the period 30 June 1996 declared a taxable income of $8,505. For the financial year ending 30 June 1997 $6,752 was stated as income for him and $4,843 for his wife.
On 2 September 1997 the prisoner opened a Commonwealth Securities account which operated to 25 May 1998. In that period of time $112,596.20 was paid into the account.
The prisoner’s Westpac cash management account operated from 14 June 1995 until 14 January 1998. During that period over $166,000 was debited to the account. The account opened with $60,000 and at 14 January 1998 the balance was $62,171.08.
There was also evidence that the prisoner sought investment advice in relation to a large sum of money. So that in the absence of any other explanation as to where the money came from it seems to me to have been a very strong case against the prisoner despite some of the problems with the victim’s credibility.
Perhaps the background to the matter lay in the fact that the victim had apparently inherited a substantial sum of money or assets from his stepfather. He had invested money in properties, mainly flats and shops in the Queanbeyan area of which there were a large number. He himself followed the occupation of a real estate agent and it seems that in early years he was probably successful in that role.
But he had developed problems in his life, particularly with alcohol and with relationships. He literally threw his money about and he seems to have had a gambling problem as well.
At the beginning of the period relevant here he had loans totalling some $300,000 and by the time the period finished those loans had augmented to $843,000 and he afterwards became and is a bankrupt.
So that the prisoner who does not seem to have had such a start in life may well have had feelings of envy of his uncle and probably despised his lifestyle. The uncle appeared to be wealthy, enjoyed overseas holidays, womanising, drinking and also appears to have been somewhat paranoid. The prisoner appears to have assisted the victim in some ways and clearly enough appears to have had an influence over him and it was that knowledge of his paranoia and resentment which I suspect was at the nub of this crime.
It was never suggested that the threats that the victim said were addressed to him indeed came from the Rebels or from the Mafia and it was only towards the end of it that he began to realise that he was being duped by his nephew.”

The structure of the appeal

4 In order to understand the structure of the appeal, it is necessary to set out in detail how the Crown puts its case.

Count : $20,000 on 7 September 1993

5 Mr Kostandinu gave evidence to the effect that in June 1993 he received a threat from the father (Mr Gruber) of a former girlfriend (Ms Brown) from whom he had acrimoniously parted the previous month because she failed to become pregnant. The threat was that Mr Gruber would get his son Steven to bash Mr Kostandinu. (When Mr Gruber gave evidence he denied that threat.) On the next day Mr Kostandinu told the appellant of this, and the appellant asked him for $5,000 to prevent any harm coming to him. A week later, the appellant told Mr Kostandinu that there was a contract on Mr Kostandinu to blow his kneecaps off. The next day the appellant telephoned Mr Kostandinu, told him the hit men were named Mario and Angelo, and said he could buy the contract out for $35,000. On 7 September 1993 Mr Kostandinu obtained a cheque for $20,000 by way of loan from Avco Financial Services Ltd (a transaction of which there was documentary evidence), cashed it and gave it to the appellant; he said he would give it to the Rebels in Canberra. He said he gave the remaining $15,000 but was uncertain where it came from or when he gave it to the appellant. Mr Kostandinu said that the appellant told him that if he told anyone else about what was happening, he would be killed and the person he told would be killed as well.

Count 2: $160,000 on or about 25 July 1994.

6 From a time beginning a fortnight after 7 September 1993, Mr Kostandinu said the appellant kept talking about how good Mario and Angelo were at their work. The appellant and Mr Kostandinu agreed that the appellant would provide protection for three years at $40,000 per annum. Mr Kostandinu said he would need to arrange another loan. A loan from Outram Finance, Queanbeyan, was arranged but not provided for some time. On 27 September 1993 the appellant bought a motorcycle for $22,000. There was no evidence of the source of the money. In late 1993 and 1994 Mr Kostandinu had a fight with a man called John Leoniuk or “Jinx”. The appellant told Mr Kostandinu that the Rebels had fined him $10,000. The appellant also told Mr Kostandinu that he had to pay a fine of $27,000 for being late in commencing payment for the three year protection.

7 On 22 July 1994 Mr Kostandinu, after mortgaging some property, received a bank cheque for $286,240.45. A solicitor’s letter establishing that was in evidence. On 25 July 1994 Mr Kostandinu cashed a personal cheque and, according to his evidence, gave the appellant $160,000 in cash: $120,000 for three years’ protection, $10,000 for the Leoniuk fine, and $27,000 for the overdue payment fine. A figure of $3,000 “would have went to the rounding of the money up or towards the protection payments”. The cheque was in evidence, as was a Westpac statement showing the payment. Mr Kostandinu said they then went to the appellant’s house, and counted the money in the presence of the appellant’s wife. The appellant then said he would go to Canberra to deliver the money to the Rebels. He returned 2½ hours later and said he had.

8 On 26 October 1994 the appellant paid $4088 to a travel agent to pay for air fares to Athens for himself, his wife and a child. On 13 November 1994 the appellant paid $13,800 into a National Australia Bank Mastercard account. There was no evidence of the source of either sum of money. Most of the $13,800 was used up while the appellant was overseas in November–December 1994.

Count 3: $1,800 on or about 30 December 1994

9 Mr Kostandinu said he kept talking to the appellant about the Rebels. He asked the appellant how much life protection would cost, and the appellant said $250,000, payable over ten years at $1,800 per month. On 30 December 1994 he took $2,850 from a Westpac account, and wrote “A Brooks, caretaking” on the butt (an “alias name” – ie a non-existent person). These propositions were supported by documentary evidence. He said he paid $1,800 to the appellant.

Count 4: Payment of a $90,000 debt to Joy Young on 13 March 1995

10 On 23 December 1994 the appellant paid $81,500 ($76,000 deposit plus $825, $4650 stamp duty and $25 fees) in relation to the purchase by himself and his wife of a house at Bateman’s Bay pursuant to a contract made that day with Joy Young as vendor. The purchase price was $176,000. The appellant’s financial records do not reveal the source of the $81,500. The other $100,000 was financed, interest free, by a vendor’s mortgage, and was to be paid by 12 May 1995. In the event that the money was not paid by then interest was payable at 16% per annum. A transfer was executed on 23 December 1994.

11 In early March 1995, according to Mr Kostandinu, the appellant said “they” required a $40,000 advance on the life protection payments. The appellant said he would pay the money on Mr Kostandinu’s behalf, but that Mr Kostandinu would have to repay him with $10,000 interest before the settlement day on “a house down the coast”, ie the Bateman’s Bay purchase, in order to avoid penalty interest of $3,000 per month. (The actual penalty interest was 16% per annum, ie $16,000, about $1300 per month.) There are documents indicating that on 13 March 1995 Perpetual Trustees Australia Ltd advanced $150,000 to Mr Kostandinu by way of a loan on the security of a property he owned at 213 Crawford Street, Queanbeyan. After a fee and an advance interest payment were deducted, the sum of $148,300.03 was available. Of that sum, $90,000 was paid to Joy Young by Vandenberg Reid pursuant to a direction to Vandenberg Reid signed by Mr Kostandinu in the following terms: “You are hereby authorised and directed to pay from the advance the sum of $90,000.00 to Mr A Chacos or as he directs.” Mr Kostandinu said he agreed with Mark Phillips, a solicitor in Vandenberg Reid acting for the appellant, that $90,000 to be advanced to the appellant should be paid to someone in the firm. (Mr Phillips denied this.)

12 There is a document showing that on 14 March 1995 Vandenberg Reid received from the appellant and his wife $9100. The appellant’s records do not show where the money came from, nor whether Joy Young received the $10,000 still owing in relation to the $100,000 debt after Mr Kostandinu’s $90,000 was paid to her. Mr Kostandinu said that the $90,000 he paid was made up of $40,000 (advance on life protection), $10,000 (interest on the money requested by the appellant for having already paid that $40,000 on Mr Kostandinu’s behalf), $10,000 (to be given to the Rebels in order to silence the mother of a woman called Nina with whom Mr Kostandinu had a relationship: the mother had threatened to have him charged with rape) and $3,000 (at one stage Mr Kostandinu said this was a penalty which the appellant had to pay for being late in finalising the purchase of the Bateman’s Bay house, and at another stage he said it was payment for two months protection). He said he did not know what the balance of $27,000 was for. Mr Kostandinu admitted giving a different version earlier.

Count 5: $3,600 on 5 April 1995

13 Mr Kostandinu had an Advance Bank Visa card. An Advance Bank document shows that on 5 April 1995 he withdrew $3,800. He paid $3,600 to the appellant that day. He said that was two months’ protection at $1,800 per month (having just before said it was $3,000 at $1,500 per month). He kept the balance of $200.

14 On 7 April 1995 the appellant sold a Queanbeyan property for $137,000. On 7 April 1995 $84,528.22 from that source was deposited into his Westpac account 604049. On 11 April 1995 $9,982, from another source, was deposited in that account. On 19 April 1995 the appellant, who was still unemployed, bought a boat and trailer for $30,000 and withdrew $20,000 from the Westpac account. There was no evidence of the source of the other $10,000.

Count 6: $1,500 on 2 May 1995

15 Mr Kostandinu said that at some time the appellant told him the Rebels knew he was gambling heavily. The appellant and his wife made Mr Kostandinu write receipts for all cheques and “put [him] on a wage of $250 a week”. Mr Kostandinu protested about them “going through” his books. The appellant said he would arrange for Angelo to take over the protection for $1,500 per month while paying $300 to the Rebels. Thenceforth Mr Kostandinu only had to pay $1,500 per month. There are documents showing that on 2 May 1995 Mr Kostandinu cashed a cheque for $1,500; the butt showed a payment to D Olivarti for painting Flat 14 – another “alias name”. Mr Kostandinu said he paid the $1,500 to the appellant on 2 May 1995.

16 On 14 June 1995 the appellant transferred $60,000 from Westpac account 604049 to another Westpac account 10-8741, a cash management account, in which, prior to the transfer, there was a nil balance.

Count : $1,500 on 29 June 1995

17 There are bank documents revealing that on 29 June 1995 Mr Kostandinu cashed a cheque for $1,500. The butt showed a payment to D Olivarti for painting Flat 7. Mr Kostandinu said he paid the $1,500 to the appellant as payment for one month’s protection.

18 On 11 July 1995 the appellant made a purchase for $12,000 on his National Australia Bank Mastercard. Before the purchase there was a credit balance of $4,279.32. On 24 July 1995 the appellant paid $7,800 into the account, generating a credit balance of $29.40.

19 On 8 August 1995 the appellant bought a truck for $18,750, paying the price out of the Westpac cash management account.

20 On 22 August 1995 the appellant bought a car for $29,200, again paying the price out of the cash management account.

Count 8

21 This alleged a payment of $30,000 on 4 September 1995.

22 Mr Kostandinu sold 213 Crawford Street, Queanbeyan for $320,000. After Mr Kostandinu paid out the $150,000 mortgage, together with fees, he received $163,497.14. He told the appellant of this, and the appellant said Angelo wanted $30,000 paid towards Mr Kostandinu’s life protection.

23 There are bank documents showing that on 31 August 1995 the sum of $163,497.14 was paid into Mr Kostandinu’s ANZ account; that on 4 September 1995 he withdrew $30,000 in cash; and that on the cheque butt he wrote “paid off loans”. Mr Kostandinu said that in fact it did not pay off loans, but was paid to the appellant because Angelo wanted $30,000 of the protection money to be paid off.

24 Over the next four months the appellant made a series of payments as follows.

Date	Sum	Account
27 September 1995	$5,000	Westpac account 604049
6 November 1995	$9,000	Cash management account
15 December 1995	$1,000	Westpac account 604049
28 February 1995	$9,200	Cash management account
29 January 1996	$5,500	Cash management account

Count 9: $1,200 on or about 29 February 1996

25 After the payment of $30,000 on 4 September 1995, according to Mr Kostandinu, the appellant informed Mr Kostandinu that Angelo wanted only $1,200 per month. From that time on Mr Kostandinu said he marked the amount and date of seventeen payments he made on a manila folder. Most of these were the subject of counts 9 to 23. There are Advance Bank records revealing that on 29 February 1996 Mr Kostandinu withdrew $1,400 from an account. Mr Kostandinu said he gave the appellant $1,200 on the same day.

Count 10: $1,200 on or about 30 April 1996

26 Bank records reveal that a cash cheque for $1,200 was drawn on a Westpac account of Landeck Pty Ltd (which Mr Kostandinu said was a family company of his); Mr Kostandinu wrote on the cheque butt that the payee was “Pitchou” (another “alias name”) and he was paid for painting Flat 12. In fact the $1,200 was paid to the appellant.

27 Mr Kostandinu said that on 21 May 1996 he executed, at the appellant’s request, a document drafted by solicitors, namely Baker Deane & Nutt. He gave it to the appellant at Bateman’s Bay. On that occasion the appellant claimed to have found a “bug” under the driving seat. Mr Kostandinu had it independently examined and was told it was “a computer for a phone to voice alternation”. He refused to return it to the appellant and eventually gave it to the police. There was in evidence an unexecuted document said to be a copy of that executed on 21 May 1996. It purported to be an acknowledgement that Mr Kostandinu owed $300,000 to the appellant, to be reduced as repayments were made from time to time. Apart from the “protection contract”, Mr Kostandinu said he owed no money to the appellant.

Count 11: $1,200 on or about 25 May 1996

28 Advance Bank records reveal that on 25 May 1996 Mr Kostandinu withdrew $1,250. He said he paid $1,200 of that sum to the appellant.

Count 12: $1,200 on or about 29 June 1996

29 ANZ bank records reveal that on 28 June 1996 Mr Kostandinu withdrew $1,200 and paid it to the appellant.

30 The appellant’s tax assessment notice for the year ended 30 June 1996 revealed that he had a taxable income of $8,505. A family company, A & F Removals Pty Ltd, was running at a loss. The appellant and his wife received about $23,000 in Centrelink payments that year.

Count 13: $1,500 on or about 23 August 1996

31 According to Mr Kostandinu, the appellant told him that Angelo now wanted $1,500 per month. State Bank records reveal that on 23 August 1996 Mr Kostandinu withdrew $1,750. He said he gave the appellant $1,500 of it.

32 On 28 August 1996 the appellant deposited $1,200 into his cash management account.

33 On 10 September 1996 the appellant paid off his ANZ Visa card bill of $2,495.95.

Count 14: $1,500 on or about 28 September 1996

34 The bank records of Landeck Pty Ltd (a family company of Mr Koostandinu) reveal that on 28 September 1996 a cheque for $1,700 was cashed; the cheque butt referred to painting 30 Monaro Street, a shop. Mr Kostandinu said the money was not used for that purpose, but that he paid $1,500 of it to the appellant.

Count 15: $1,500 on or about 14 October 1996

35 State Bank documents reveal that on 14 October 1996 Mr Kostandinu withdrew $2,900 from a Landeck Pty Ltd account; the cheque butt said “cash”. Mr Kostandinu paid $1,500 of that to the appellant.

36 On 15 October 1996 the appellant deposited $500 into his Westpac cash management account, and on 16 October 1996 he deposited a further $280 in it.

Count 16: $1,500 on or about 20 November 1996

37 On 20 November 1996, State Bank records reveal, $3,100 in cash was withdrawn from a Landeck Pty Ltd account, and on the same day, Westpac bank records reveal, the same sum was withdrawn from another Landeck Pty Ltd account. Mr Kostandinu said he paid the appellant $1,500 from one of these two sources but could not say which. $3,000 of the money was paid to the appellant in addition to find out who was bugging Mr Kostandinu’s telephone.

Count 17: $1,500 on or about 25 November 1996

38 Colonial State Bank records reveal that on 24 December 1996 the sum of $1,750 was withdrawn from a Landeck Pty Ltd account. Of that sum, $1,500 was paid to the appellant on 25 December 1996 at his parents’ house at Bateman’s Bay, according to Mr Kostandinu.

Count 18: $1,500 on or about 16 January 1997

39 On 16 January 1997, according to State Bank records, $1,700 in cash was withdrawn from a Landeck Pty Ltd account. The cheque butt said it was to (the fictitious) Pitchou, for painting Flat 16. On that day the sum of $1,500 was paid to the appellant, according to Mr Kostandinu.

40 On 12 February 1997 the appellant deposited $3,037.25 into his cash management account.

Count 19: $3,000 on or about 3 March 1997

41 On 3 March 1997 State Bank records reveal that $3,000 was withdrawn from a Landeck Pty Ltd account. The cheque butt said that this was for caretaking and refurbishing 12 Morrissett Street. Mr Kostandinu said it was not used for that purpose, but was used to pay $3,000 to the appellant on that day.

Count 20: $3,000 on or about 9 May 1997

42 Westpac records reveal that on 9 May 1997 Mr Kostandinu withdrew $1,500 in cash from his account. They also reveal that on 9 May 1997 Mr Kostandinu withdrew $1,500 in cash from a Landeck Pty Ltd account. Each cheque butt referred to payments to painters, but Mr Kostandinu said that in fact the money was used to pay protection money to the appellant for April and May.

Count 21: $1,500 on or about 28 June 1997

43 Westpac records reveal that on 27 June 1997 Mr Kostandinu withdrew $1,500 from his Westpac account. The cheque butt was blank. Mr Kostandinu said he paid the money to the appellant.

44 For the year ended 30 June 1997, the appellant’s taxable income was $6,752 and his wife’s was $4,843.

Count 22: $1,500 on or about 8 August 1997

45 Westpac records reveal that on 8 August 1997 Mr Kostandinu withdrew $1,500 in cash from a Landeck Pty Ltd account. The cheque butt referred to painting, but Mr Kostandinu said the money was in fact paid in cash to the appellant.

46 On 13 August 1997 the appellant deposited $1,100 into his Westpac account 604049.

Count 23: $1,500 on or about 27 August 1997

47 Westpac records reveal that on 27 August 1997 Mr Kostandinu withdrew $1,500 in cash from a Landeck Pty Ltd account. The cheque butt said it was to pay a painter, but Mr Kostandinu said that in fact the money went to the appellant.

48 On 27 August 1997 the appellant deposited $800 into his Westpac account 604049, Queanbeyan branch.

Events 29 August 1997-12 October 1998

49 On 29 August 1997 J B Were & Son prepared an investment plan for the appellant and his wife for the investment of $100,909.

50 Between 2 September 1997 and 25 May 1998, the appellant paid $112,596.20 into an account with Commonwealth Securities Ltd. A total of $75,002.87 was debited. Nearly $50,000 of that was paid into the appellant’s cash management account.

51 On 16 October 1997 the appellant transferred $28,570 from his Westpac cash management account to his Westpac account 604049.

52 On 5 November 1997 the appellant deposited $15,424.44 into his Commonwealth Securities share account. This money had been withdrawn from Westpac account 604049.

53 On 20 November 1997, the appellant deposited $13,000 into his Westpac cash management account, Queanbeyan branch.

54 Mr Kostandinu said that in late 1997 he became suspicious because he became aware that the $10,000 he had given to the appellant for transmission to the Rebels in order to be relieved of the problem of Nina and her mother was not in fact used for that purpose. Mr Kostandinu said he came to suspect that the appellant had been pocketing all the money which he had given him for protection and had not passed it on to any third party in order to obtain protection.

55 Mr Kostandinu said he discussed these matters with members of his family. The following day they met at the house of Father Cockayne. On the speaker telephone, Mr Kostandinu told the appellant that he could no longer pay the protection money. Mr Kostandinu said the appellant indicated that he would speak with Angelo. Father Cockayne gave evidence that he heard Mr Kostandinu tell the appellant that he could no longer continue to make payments, and heard the appellant say that he would see what he could do to help. (Father Cockayne gave two other pieces of evidence. One was that Mr Kostandinu told him that certain members of the Chacos family, including the appellant, owed him money. The other was that Mr Kostandinu told Father Cockayne that he was running out of money and that at least some of his money was going on paying for protection.)

56 On 11 December 1997 Mr Kostandinu prepared a handwritten document narrating the events of the previous four years. He made two copies of it. He also copied the manila file folder on which he had been recording the dates and amounts of payments. He made copies of the 21 May 1996 acknowledgement of debt document, prepared envelopes marked “to be opened only after the death of Arthur Kostandinu” and delivered one to Father Cockayne (as Father Cockayne confirmed) and the other to Mr Herrald, a local Queanbeyan solicitor.

57 On 30 January 1998 Mr Kostandinu went to Queanbeyan Police Station with a third envelope containing the materials just described, the “bug” recovered from his car, and the original manila folder. Detective Sergeant Nixon commenced taking a statement which took over three months to complete.

58 On 26 May 1998 the police executed a search warrant on the appellant’s premises in Bateman’s Bay. In an office in the garage they located a handwritten note with a number of figures on it (in particular the figure of $300,000 together with an interest rate which might correlate with the $300,000 on the 21 May 1996 document); a copy of the J B Were & Son $100,909 investment plan; Westpac Bank statements for account number 604049 and the cash management account (10-8741) – these statement sheets had handwritten annotations indicating what some of the larger amounts were used for, namely funding various purchases; and a tax assessment notice for the year ending 30 June 1997.

59 On 12 October 1998 the appellant and his solicitor went to Queanbeyan Police Station. He declined to be interviewed and was charged.

60 In short, then, there were two essential bases of the Crown case:

(a) Mr Kostandinu’s evidence of the fear implanted in him by the appellant which caused him to pay over $330,000 to the appellant between September 1993 and August 1997;

(b) the fact that although the appellant was unemployed and on social security from 1993 to 1997, he spent hundreds of thousands of dollars on acquiring assets without any significant means of funding them save payments from Mr Kostandinu.

The appellant’s case at trial

61 Mr Kostandinu gave evidence in chief for about a day. He was forcefully cross-examined for about three days. The cross-examination attacked him by suggesting he was dishonest to the Australian Tax Office, was a heavy drinker, a big gambler and a womaniser; was in financial trouble well before he began dealing with the appellant, and it was this that led eventually to his bankruptcy; had given versions of events in his pre-trial statements different from those given in evidence; was motivated by hatred for the appellant and dislike of his family, whom he blamed for his mother’s death; and had given evidence containing internal inconsistencies.

62 The appellant did not give evidence in his own case, but did call some witnesses. The point of calling some of them was to seek to explain how a man like the appellant, living on social security, had possession of large amounts of money, which, if not explained, would tend to confirm Mr Kostandinu’s story. Mr Lipovski said he gave the appellant $13,340 to buy shares using his Commonwealth Securities Ltd account. Mrs King said that in October 1991 she paid the appellant $13,600 in cash for some furniture. Mr Volk said he paid the appellant $10,000 for a boat they purchased together; bought a van from him for $5,500 cash; and bought fishing equipment from him for $2,800. The appellant’s father said he gave financial help to the appellant (eg $23,650 for an overseas trip in 1994; a gift of a truck which the appellant sold for $14,000; and a gift of $10,000 to buy a truck). Another theme in the evidence of the appellant’s witnesses related to Mr Kostandinu’s tendency to gamble, drink and tip very heavily.

63 In short, the appellant attacked basis (a) of the Crown case by characterising Mr Kostandinu as a witness wholly lacking in credit and basis (b) by trying to establish a source of funds sufficient to explain how the appellant’s assets were acquired independently of any payments from Mr Kostandinu.

The appellant’s essential approach on appeal

64 On appeal the appellant was represented by different counsel but each employed similar tactics. The appellant submitted that apart from a few items of evidence, the whole Crown case depended on accepting Mr Kostandinu’s evidence beyond reasonable doubt. It did not matter that the appellant had not contradicted Mr Kostandinu’s evidence; it collapsed of its own inanition. Mr Kostandinu was evasive, inconsistent and farcically unbelievable. He was motivated by hatred for the appellant and dislike for the appellant’s family. A man who had been a self-employed real estate agent for ten years and had inherited great wealth would not have been likely to have made the payments to the appellant which he alleged for the reasons supposedly urged on him by the appellant. His credibility was damaged by participation in tax frauds, by evasions and delays in providing evidence and by the differences in the various versions of events he gave to the police and to the court. He was contradicted on key issues by witnesses such as Mr Gruber and Mr Phillips. His claimed loss of money by paying the appellant could be explained by his drinking and gambling. The large sums which the appellant spent were sourced not from Mr Kostandinu but from property sales, assistance from others, and social security payments. Finally, Father Cockayne’s evidence did not point distinctly against the appellant.

The relevant test

65 The appellant is relying on s 6(1) of the Criminal Appeal Act 1912, which relevantly provides that this Court must allow the appeal if of opinion that the verdict was “unreasonable, or cannot be supported, having regard to the evidence”.

66 In M v R (1994) 181 CLR 487 at 492-493 Mason CJ, Deane, Dawson and Toohey JJ, after saying that “The question is one of fact which the court must decide by making its own independent assessment of the evidence”, continued:

“the question which the court must ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty. But in answering that question the court must not disregard or discount either the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, or the consideration that the jury has had the benefit of having seen and heard the witnesses. On the contrary, the court must pay full regard to those considerations.”


In R v Dellapatrona (1993) 31 NSWLR 123 at 141 Hunt CJ at CL, Abadee and James JJ said that a verdict would not be set aside as unreasonable simply because there is an attack on the credit of a vital Crown witness apparent from the transcript: “Very few trials are free from attacks upon the credit of a vital Crown witness. Everything depends upon the circumstances of the particular case, including the nature of the attack, its vitality and its proximity to the particular issue to which the evidence was relevant … .”

The sum of $90,000 paid to Joy Young

67 It was a central feature of the appellant’s arguments to this Court that while independent bank records show a pattern of Mr Kostandinu obtaining cash which was not inconsistent with him making cash payments to the appellant, there was no independent evidence that any of the payments said to have benefited the appellant actually did so, apart from the $90,000 used on 30 March 1995 to pay off part of the $100,000 debt which the appellant owed Joy Young as the unpaid purchase price of the property he bought from her at Bateman’s Bay. Counsel for the appellant said: “There was no dispute that $90,000 from the complainant went towards the property purchased by the appellant”. That concession is understandable given the Vandenberg Reid documents supporting it. It is further understandable in that there was no doubt that the appellant did buy land from Joy Young, and did owe $100,000; nor is there any doubt that if that money had not been paid by May, high interest would become chargeable. Counsel for the appellant also said: “The money was in fact returned, albeit after the conviction.”

68 It is difficult to see why the subsequent return of money allegedly obtained by deception should create a defence to the charge – particularly when the return is effected after the conviction, and the trial judge made an order that it be returned. It is also difficult to see why counsel asserted as a fact something which ex hypothesi was not a matter on which there could have been any evidence before the jury. This submission highlights the fact that this $90,000 advantage to the appellant is a powerful support for the Crown case. It is true that counsel for the appellant was able to point to numerous curious aspects of Mr Kostandinu’s evidence as to why he conferred that $90,000 advantage on the appellant. He said:

“The complainant alleged that $90,000 would be paid by him to the vendor but that the appellant did not want his name on any documents. The complainant then made the highly implausible claim that the solicitor then suggested that rather than using the appellant’s name, they could ‘ put it in somebody else’s name that’s in the firm ’ (T13.51. Firstly, the appellant’s name was used in the documents. Secondly, the solicitor [Mr Phillips] gave evidence and denied the allegation of the complainant. Thirdly, the money was not put in anyone else’s name, whether a member of the firm or otherwise. The money went directly to the vendor. The vendor had never worked for the firm. The evidence of the complainant was dishonest, self-serving and nonsensical. The jury ought to have rejected it.
The complainant was asked in chief what the $90,000 payment comprised of. He claimed that the appellant told him that there was included $40,000 for life protection, $10,000 interest and another $10,000 for the Rebels to stop a lady making trouble for him. There was no explanation as to why the protection from this lady would not have been included in either the earlier $40,000 protection over three years or the $250,000 life protection or both. Of the $90,000 the complainant stated that he did not know where the unexplained $27,000 went (T 15.45).”

These are points of some potential effectiveness in relation to Mr Kostandinu’s reliability. There are possible answers to them developed by the Crown or otherwise available (Mr Phillips did only “part of the matter” and Mr Kostandinu may have made a mistake in the identity of the solicitor to whom he spoke; Mr Kostandinu’s story was confused, but substantial parts of it cohered with his other evidence). Let these potential answers be put aside for the moment. However contradictory or implausible Mr Kostandinu’s account of why he advanced the $90,000 was, the fact remains that he did advance it. What justification did the appellant have for receiving that advantage? Why would Mr Kostandinu have made that advance, particularly since it was part of the appellant’s case that he hated the appellant?

69 In oral argument counsel for the appellant said that the $90,000 was part of the “undisputed legitimate money” that came to the appellant in the period 1993-1997. But he did not say why it could be called “legitimate”. Counsel for the appellant was directly asked by a member of the court whether there was any explanation for why Mr Kostandinu provided $90,000 for the appellant. The answer was: “No. The decision was made not to call the accused.”

70 In supplementary written submissions filed at the direction of the court after the close of oral argument, counsel for the appellant repeated that there was no dispute about the $90,000 going towards the purchase of property for the appellant, and that the “money was in fact returned, albeit after the conviction.” This contention caused the Crown to file an affidavit dated 13 December 2002 sworn by Maria-Rosa Etnasios. In the circumstances I would grant leave for that affidavit to be relied on, and in a subsequent written submission counsel for the appellant said nothing to indicate that he opposed that course. The deponent of the affidavit was a solicitor with the Office of the Director of Public Prosecutions having carriage of the appeal. She said:

“That appeal was heard by the Court of Criminal Appeal on 21 October 2002.
Prior to the hearing date, the Appellant filed and served a document entitled ‘Submissions for the Appellant’.
A submission appears therein at page 2.6 concerning the sum of $90,000.
That submission asserts that the sum of $90,000 was ‘returned’ to the victim, Arthur Kostandinu, after the conviction of the Appellant.
On 17 October 2002, I contacted the Insolvency and Bankruptcy Service by telephone on [phone], and spoke to Ben Bryce. Mr Bryce informed me, and I verily believe the same to be true, that no such monies had been paid to the Trustee in Bankruptcy in relation to Arthur Kostandinu.
At the hearing of the appeal on 21 October 2002, the Court directed the parties to file supplementary written submissions.
On 23 October 2002, I received a document entitled ‘Further Submissions for the Appellant’ in consequence of the directions given by the Court at the hearing of the appeal.
A submission appears therein at page 2.8 concerning the sum of $90,000.
That submission asserts that the sum of $90,000 was ‘returned’ to the victim, Arthur Kostandinu, after the conviction of the Appellant.
On 5 November 2002, I again contacted the Insolvency and Bankruptcy Service by telephone. I spoke to Peter Olsen who informed me, and I verily believe the same to be true, that no such monies had been received by the Trustee in Bankruptcy in relation to Arthur Kostandinu.
Annexed hereto and marked with the letter ‘A’ is a document from the Insolvency and Bankruptcy Service dated 5 December 2002. That document confirms that no such monies have been received by the Trustee in Bankruptcy in relation to this matter.
On 13 December 2002 I again contacted the Insolvency and Bankruptcy Service by telephone. I spoke to Dianne Sebo who informed me, and I verily believe the same to be true, that no such monies had been received by the Trustee in Bankruptcy in relation to Arthur Kostandinu.”

The deponent’s summary of annexure A is correct.

71 On 17 December 2002 submissions prepared by counsel for the appellant were filed. They contain the following: “My understanding of the return of the $90,000 is clearly incorrect. It however has no effect on the conviction appeals. I apologise for the error.” If the fact of non-return of the $90,000 has no effect on the conviction appeals, it is hard to see how the allegation that the money had been returned had any effect either.

72 In my opinion the circumstances surrounding the $90,000 benefit are very powerfully confirmatory of the Crown case not only on count 4, to which it specifically relates, but generally. This episode is one in which objective documentary evidence established that on 23 December 1994 the appellant contracted to buy the Bateman’s Bay house and paid a $81,500 deposit on it. On that day he also agreed to pay the remaining $100,000 by 12 May 1995 on pain of high interest rates thereafter if he did not pay by that day. There was no possible reason why Mr Kostandinu should accommodate the appellant to the extent of $90,000 except for the reasons which Mr Kostandinu himself gave. The transaction by which the $90,000 benefit was conferred is entirely inconsistent with the appellant’s theory of the case as one brought by a vengeful liar against a man he hated; it is entirely consistent with the Crown theory of the case as one in which Mr Kostandinu trusted the appellant, believed his tales of the dangers facing Mr Kostandinu if protection was not obtained, believed that the appellant was procuring protection, and believed that large sums were needed to secure it at short notice. It would be astonishing if the jury had not concluded beyond reasonable doubt that the $90,000 advantage was provided because of some inducement along the general lines Mr Kostandinu gave evidence of, for there was no other explanation for such a step. That in turn reveals Mr Kostandinu’s state of mind to be one which makes more acceptable his evidence of his behaviour, and of the appellant’s behaviour, in relation to other counts. The understandable inability of counsel for the appellant to explain the $90,000 benefit receives heightened significance by attempts to contend that it was a “legitimate” advance which was repaid. If it was legitimate there was no need to repay it. If it was repaid that would have suggested that it should have been repaid, and that would have in turn suggested that there must have been something wrong about it.

Father Cockayne

73 It is desirable to examine Father Cockayne’s evidence in some detail. He said he was an Anglican priest who had known the Chacos and Kostandinu families for at least fifteen years, and had been involved in the appellant’s marriage ceremonies. He said that on one occasion in the later part of 1997 he was in his house in the company of Mr Kostandinu and Anne and Les Chacos (the appellant’s parents). Mr Kostandinu was on the telephone, but he could hear the appellant’s voice at the other end of the line. He said:

“Q. That telephone call could you hear the voice on the other end of that call?
A. Yes.
Q. Could you --
A. I could not hear it well but I could hear it.
Q. Whose voice was that, did you recognise it?
A. I believe it to be Arthur Chacos’ voice.
Q. And as far as that phone call’s concerned was that a phone call made from your phone or was it a phone call received from your phone?
A. It would have been made from my phone.
Q. Who was talking on the phone in your house?
A. Arthur Kostandinu.
Q. Do you recall what was said?
A. I can’t recall a great deal, I’m not very good at recalling, it’s a priests fault but I believe they were speaking about money.
Q. Well did you hear Arthur Kostandinu say something?
A. I think Arthur Kostandinu said something about not being able to continue making some payments.
Q. During that conversation did he say what the payments were for?
A. Not to my recollection.
Q. Did you recall hearing if Arthur Chacos said anything?
A. I believe he told him that he would try and do something to help him.
Q. Now Ann and Les Chacos were they in the room at the time that that call was made?
A. They were.
Q. Is there anything else you recall being said on the course of that conversation?
A. On the telephone?
Q. Yes.
A. I can’t recall, I know it wasn’t very easy to hear it was one of those phones that where it speaks out to the room but it wasn’t very clear, that was I think the gist of the conversation.
Q. So this particular phone had some sort of speaker on it that was audible?
A. Yes.
Q. Apart from the handset?
A. Yes.”

That is evidence confirmatory of Mr Kostandinu’s testimony.

74 Father Cockayne gave further evidence as follows:

“Q. Around November/December 1997 did Arthur Kostandinu hand to you an envelope marked ‘Not to be opened until his death’?
A. Yes he did.
Q. And you subsequently handed that to the police?
A. Yes I did.
Q. Perhaps if this could be shown to the witness. Does that appear to be the envelope?
A. I believe so.
Q. Did you look at the contents at all of that envelope?
A. No it was sealed.”

75 That too is evidence confirmatory of Mr Kostandinu’s testimony.

76 Counsel for the appellant cross-examined Father Cockayne, but not about that conversation or the handing over of the envelope.

77 In re-examination Father Cockayne gave a third relevant piece of evidence:

“Q. You recall my friend asked and read part of your statement as to the latter part of 1997 you were aware that Arthur Kostandinu had financial problems, was that something that Arthur said to you?
A. Yes.
Q. And did he tell you what were his financial problems?
A. Yes, you’re straying into the area of confessional --
Q. I mean this is something you told the police in a statement?
A. That’s okay, yes.
Q. Do you recall what were his problems?
A. Yes.
Q. What he said, was his financial problems?
A. Yes.
Q. What was that?
A. That he, well that he was running out of money.
Q. Well did he tell you where his money was going?
A. Yes.
Q. Where was that?
A. Well he told me that at least some of his money was going in on paying protection.”

78 Father Cockayne’s evidence about receiving the envelope has some importance in corroborating Mr Kostandinu’s evidence to that effect. His evidence about the telephone conversation and his evidence that Mr Kostandinu told him he was paying for protection gives very powerful support to Mr Kostandinu’s testimony. The appellant’s theory of the case is that Mr Kostandinu is delusional or maliciously motivated by hatred to lie; that Mr Kostandinu lost his money by his own folly, not by paying for protection; that Mr Kostandinu never gave any money to the appellant (apart from the $90,000); and that all Mr Kostandinu’s accounts of conversations which would have impelled him to make those payments are incorrect and perjured. Yet in the telephone conversation Mr Kostandinu said in effect that he had been making payments, and the appellant, by not denying this, admitted that Mr Kostandinu had been making payments to the appellant. The question of why, on the appellant’s case, Mr Kostandinu would do such a thing to a man he hated arises just as sharply here as it did in relation to the $90,000. The only explanation on the evidence is that the reason was to obtain protection via the appellant, and that explanation is confirmed by what Mr Kostandinu said to Father Cockayne as narrated in re-examination.

79 Mrs Chacos was not called, and hence she offered no contradiction of Father Cockayne’s account of the telephone conversation.

80 Mr Les Chacos was called. In chief he said:

“Q. Do you remember an occasion, and if you can tell us when it was please do, do you remember an occasion where Mr Arthur Kostandinu came to see you and [your] wife and made a complaint which involved money?
A. Can you repeat the question please.
Q. Do you remember an occasion when Mr Kostandinu came to see you and your wife and made a complaint about money involving Arthur?
A. Yes.
Q. Do you remember what it was he complained to you about?
A. About money.
Q. Now can you be more specific as to what it was he said about money?
A. Yes.
Q. What was that?
A. He said was, was lot of money he said, he’s lost a lot of money.
Q. I’m sorry, I didn’t hear that, he said what?
A. He’s lost a lot of money he said.
Q. Did you thereafter go somewhere and in fact were you on that occasion present when Father Michael Cockayne was also present?
A. Yeah, yes.
Q. Do you have any recollection of a phone call which was made using a loudspeaker?
A. Yes.
Q. Now were you able to hear what was aid on that occasion?
A. No I can’t because it was on speakers and was very noisy. Father Michael tried to adjust the speakers and I couldn’t, couldn’t understand a thing.
Q. Do you remember any part of that conversation involving any of the speakers, any of the persons who were talking?
A. Like I said, it was not clearly at all the telephone conversation.
Q. Did you recognise the voice of Arthur Kostandinu at all?
A. It wasn’t Arthur Kostandinu, Arthur Kostandinu was in the room.
Q. Who was speaking then on the phone?
A. It was Arthur, my son.
Q. Who was he speaking to on the other end, do you know?
A. Was speaking on the, on the phone with just Father Michael.”

81 In cross-examination he said:

“Q. You were asked about Arthur complaining about money involving your son, is that right, towards the end of 1997 Arthur complaining, Arthur Kostandinu complaining about money and your son, is that right?
A. What way?
Q. You were asked a question about Arthur Kostandinu coming and making a complaint regarding money involving Arthur --
A. Yes.
Q. – about money?
A. Yes.
Q. And that as in 1997, towards the end of 1997, is that right?
A. I’m not sure when it was?
Q. That he was complaining that he was paying money to your son?
A. Yes.
Q. And did you – during the course of that complaining did you hear any word like contract being said?
A. No.
Q. Or harm, physical harm being said?
A. No.
Q. Or protection?
A. No.
Q. You didn’t hear anything like that?
A. No.
Q. And then there’s this occasion that you’re at Father Cockayne’s house, that’s right isn’t it and there’s a telephone call?
A. Yeah, we did go there.
Q. And you’re there with your wife?
A. Yes.
Q. Father Cockayne’s there?
A. Yes.
Q. And Arthur Kostandinu?
A. Yes.
Q. And this was all because, you were all there together because Arthur was complaining about he had been paying money to your son?
A. Yes.
Q. And then there’s this phone call where Arthur Kostandinu’s on the phone and your son’s voice is coming over the speaker, that’s right isn’t it?
A. Yes.
Q. And Arthur straight out said there, didn’t he, that he can’t keep paying?
A. We couldn’t hear a thing, was, the phone was on the speakers and Father Cockayne tried to adjust them and it was so noisy we couldn’t hear a thing, couldn’t understand nothing.
Q. Well you’re in there in the room though aren’t you when this call came through?
A. Yeah, we were in the room, four of us.
Q. Right okay, well Arthur Kostandinu’s voice isn’t coming over the speaker is it, he’s talking on the end of the phone because he’s there in the room with you, it’s your son’s voice coming over the speaker?
A. No, it was the other way around.
Q. So you say Arthur Chacos was in the room?
A. No.
Q. All right, well so Arthur Chacos isn’t in the room, he’s on the other end of the phone call wherever he was?
A. Correct.
Q. Well does that mean that Arthur Kostandinu was in this room with you, Father Cockayne, your wife and he was talking on the telephone?
A. No, he was receiving the phone, the call.
Q. All right, when he received the call did he talk on the phone, Arthur Kostandinu?
A. No.
Q. Did he say words?
A. No, was only listening to the phone on the speakers?
Q. He didn’t say anything?
A. No, nobody was talking.
Q. All right, so it’s not, when I asked you about Arthur saying words during that call while he was talking on the phone, saying, ‘I can’t keep paying’, words like that, you say he didn’t say any words at all?
A. No.
Q. Said nothing, this is Arthur Kostandinu?
A. Wasn’t, wasn’t a conversation.
Q. So what the phone, you say a phone call was received in that room, is that right?
A. Correct.
Q. Was it Arthur Kostandinu who picked the phone up and was on the phone?
A. Father Cockayne was setting the speakers so we can listen to it and the speaker was so noisy we couldn’t hear a thing, I didn’t understand a thing anyway.
Q. Right, was it Arthur Kostandinu who was on the phone though, who has holding the receiver in his hand?
A. No, nobody holding a receiver.
Q. No-one, so all the, it was just a hands free conversation where the phone’s down and --
A. That’s right.
Q. – you were all listening and no-one said anything?
A. That’s right.
Q. In the room?
A. That’s correct.
HIS HONOUR: What was making the noise?
A. The speakers, Father Michael had some sort of set up in the room.
CROWN PROSECUTOR: Q. Well I mean this phone call came in, someone must have answered it and said, ‘Hello’ or ‘Who is it?’, or?
A. Yeah, Father Michael say ‘Hello’ and then set up the speakers.
Q. Michael, so that’s Father Cockayne?
A. Cockayne, yeah.
HIS HONOUR: Q. So how many people were in the room?
A. Four
CROWN PROSECUTOR: Q. And you had trouble making out what your son was saying but your son just started talking did he?
A. Yeah he was talking.
Q. And the only thing that he said when he rang was Father Michael saying, ‘Hello’?
A. Yes.
Q. And your son just started talking?
A. Father Michael set up the speaker so everybody can hear it, not just Father Michael to hear it because we were four of us.
Q. Okay the speakers are set up, you could hear your son’s voice but you’re having trouble making out what he’s saying was that right?
A. That’s right.
Q. Well after Father Michael says, ‘Hello’, did your son start talking?
A. Father Michael tried to set up the speakers so everyone of us to hear everything was saying.
Q. Yeah well after Father Michael said ‘Hello’ did your son just start talking, did you just start hearing your son’s voice coming over the speakers?
A. No, Father Michaels stopped and tried to set the speakers so the four of us can hear everything what said.
Q. When you, at any time apart from Father Michael saying ‘Hello’ did anyone in that room speak as part of this telephone conversation?
A. Nobody speak everybody try to listen.
Q. So your son said things which you couldn’t make out and then it was, the phone call was over?
A. That’s correct.
HIS HONOUR: Q. Where did you believe your son to be when that phone call was made?
A. He was at home.
Q. Where in Bateman’s Bay?
A. At Bateman’s Bay.
CROWN PROSECUTOR: Q. This was arranged so you could be there together with Father Michael, your wife and yourself?
A. That’s correct.
Q. And Arthur Kostandinu would be there?
A. That’s right.
Q. It’s all arranged that’s right, isn’t it?
A. Yes.
Q. And was it pre-arranged that your son would ring at the time that you were at Father Michael’s place?
A. That’s correct . …
Q. Was it your understanding you were there because it would be discussed about monies being paid to your son?
A. No we was there because Arthur Kostandinu wanted to go there with us to talk to Father Michael for some sort of reason.

Q. And as part of this it was pre-arranged that your son would ring in at the time that you were there with your wife?
A. No.
Q. So you’re saying that wasn’t pre-arranged?
A. No.
Q. It just so happened that your son rang up at the same time that you were there?
A. No, we went there and Father Michael rang Arthur first.
Q. Well what you told us about the speakers being set up hearing your son’s voice and although not being able to make out the words, is this the same telephone call that Father Michael initiated, that is he rang your son?
A. He rang first because he wanted all of us to listen to hear what he was going to say so he put the phone down and told Arthur to ring us back. So he ring us back and Father Michael tried to set up the speakers so all of us can hear it. As soon as he said the speakers and nobody can hear anything.
Q. Well at any time, any of these phone calls that your son, is that it, there were only the two phone calls that you understood your son to be speaking on the first call, and then you heard your son’s voice on the second call, is that right?
A. Only one.
Q. Well on any phone call there did you hear Arthur Kostandinu say anything to your son during the course of the phone call?
A. I didn’t hear him say anything?
Q. So you didn’t hear him say anything like I can’t keep paying he [sic] money?
A. No.
Q. Did you hear your son say, ‘I’ll see what I can do about it’?
A. I couldn’t hear anything on the speakers. I couldn’t hear myself anyway. …
Q. Did you inquire of anyone in the room as to what your son had said, did you ask, ‘What did my son just say’?
A. Like said, Father Michael, he was confused himself because like I said, none of us understood anything that was said on the telephone through the speakers. Father Michael said I wish we could understand what was going on.
Q. Did you ask anyone what was said?
A. I just told you.
Q. You said he was confused but does that mean you asked him, did you ask him straight out what he said?
A. Yes, he say, ‘I wish we understood what was happening’.
Q. You see the truth is your son on a phone call Arthur Kostandinu did say he can’t keep paying didn’t he?
A. I don’t know what he said.
Q. And that your son said he would see what he could do about it?
A. I don’t know.
Q. Are you just trying to, you’re not telling us what was said because you don’t want to say?
A. Because I didn’t hear it.
HIS HONOUR: Q. Well what happened when the speakers made such a noise didn’t somebody turn them off?
A. Father Michael tried to adjust them and then he turned it off altogether.
Q. Was there a conversation between anyone and your son on the phone?
A. No, no he turned it off then altogether.
Q. Turned the phone off?
A. Yes.”

82 The jury were entitled to reject this evidence as entirely unconvincing both because of its terms and because Mr Les Chacos had had a brain tumour, had suffered memory loss and was on medication. No point arising out of Mr Les Chacos’s testimony was put to Father Cockayne in cross-examination. But even if Mr Les Chacos was correct in saying he could not hear what was said, he did not contradict Father Cockayne’s evidence.

83 Counsel for the appellant contended that that Father Cockayne’s evidence lacked weight because it used words like “think” and “believe”, and because he said the phone “wasn’t very clear”. However, the jury were entitled to accept Father Cockayne’s evidence, particularly in view of the fact that there was no cross-examination on it or contradiction of it. It in turn confirmed Mr Kostandinu’s evidence that he told the appellant in a telephone call in the presence of Father Cockayne and the appellant’s parents in chief that he could pay no more money.

The resources of the appellant

84 Counsel for the appellant contended that the appellant received approximately $420,000 from sources other than Mr Kostandinu, and that this body of assets offered a sufficient explanation for the appellant’s dealings without having to search for an explanation in sums of money received from Mr Kostandinu. Counsel elected to leave out of account $20,000 advanced by the appellant’s parents for a family holiday only part of which went to the appellant and also small sums earned from the appellant’s removal business. In that respect counsel was realistic, and this Court may leave those matters out of account as well. The $420,000 figure was made up thus:

Date	Transaction	Sum
1990	Gift of truck by father which the appellant then sold	$14,000
13 February 1990	Insurance payment on death of the appellant’s wife	$38,100.16
October 1991	Sale of furniture to Ms King	$13,600
1991	Father’s gift to buy a truck	$10,000
13 March 1995	Payment by Mr Kostandinu to vendor of Bateman’s Bay house	$90,000
7 April 1995	Proceeds of sale of appellant’s house	$94,528.22
April 1995	Contribution by Mr Volk to jointly owned boat	$10,000
3 November 1995	Sale of Ford Laser by the appellant to his father	$13,000
Early 1996	Sale of appellant’s van to Mr Volk	$ 5,500
Early 1997	Sale to Mr Volk of fishing equipment	$ 2,800
September 1997	Payment by Jiri Lipovski for share purchase	$13,340
20 November 1997	Purchase by the appellant of shares for his parents	$13,000
1993-1997	Cash gifts from parents to the appellant	$24,225
1993-1997	Centrelink benefits received	$76,873

85 Counsel for the appellant submitted that the $420,000 greatly exceeded the amounts said to have been received by the appellant from Mr Kostandinu.

86 The first flaw in this analysis is that it includes the $90,000 which on the Crown case was one of the dishonestly obtained payments, and which is wholly unexplained. The payment is totally supportive of the Crown case. That figure should not be taken into account. Eliminating it reduces the total figure in question to $330,000.

87 A second difficulty is that while persons who receive nothing but social security payments have to live on them, it is not easy to do so, and tempting not to do so if one has any liquid assets. It is safe to assume that at least $100,000 was spent in meeting day-to-day living expenses over four years. That reduces the relevant figure to $230,000.

88 A third difficulty is that with all respect to Mr Les Chacos, whose health had been poor, and whose bad health may have affected the quality of his evidence, there is no documentary confirmation of his evidence about the $14,000 received on the sale of the truck which he said he gave the appellant, or the $10,000 he said he gave the appellant to buy a truck. Similarly, there is no documentary confirmation of Ms King’s evidence about the $13,000 received on selling furniture.

89 A fourth difficulty is that the crucial period in the case is 7 September 1993 to 27 August 1997. About $75,000 was paid before this period and about $60,000 was paid after it. In different ways each of these sums has limited materiality.

90 Fifthly, a realistic endeavour by the appellant to raise a reasonable doubt by this analysis of non-Kostandinu sources of funds would have to rest on an integration of the flows in and the flows out as assets were purchased. This enterprise faces problems. For example, the evidence at the trial did not disclose the source of the funds with which the appellant purchased a Harley-Davidson motor cycle on 27 September 1993. The $20,000 which Mr Kostandinu said he paid on 7 September 1993 suggests the likely source.

91 Next, there are indications in the payments into his accounts by the appellant that the source was monies paid by Mr Kostandinu. Thus in November and December 1995 the appellant deposited $24,700 into two accounts in four payments. Counsel for the appellant submitted that one payment of $5,500 was for the van sold to Mr Volk. Even if that is so, deposits of that order of magnitude do not appear to have any ready source other than the periodical payments which Mr Kostandinu said he made to the appellant. There were no corresponding withdrawals from other funds. A car was said to have been sold on 3 November 1995, but no other funds were available except Centrelink payments. Similarly, on 28 August 1996 the appellant deposited $1,500 in the cash management account and on 10 September 1996 he deposited $2,495 in his ANZ Visa account. There were no corresponding withdrawals from other accounts. The evidence called by the appellant did not point to any possible source for those deposits. That left the monthly payments which Mr Kostandinu said he made as the only possible sources. Those payments were of a comparable size to the monies put into the appellant’s accounts.

92 Similarly, on 14 October 1996 Mr Kostandinu said he paid the appellant $1,500. On 15 October 1996 the appellant deposited $500 in his Westpac cash management account and on 16 October 1996 he deposited $280 in it. There were no corresponding withdrawals from other accounts, and it is highly likely that the source of these deposits was the $1,500 Mr Kostandinu said he handed over the day before.

93 The same thing happened in November 1996. On 20 November 1996 Mr Kostandinu said he paid the appellant $1,500. On 25 November 1996 the appellant deposited $500 in the Westpac cash management account and $100 in his Westpac account 604049. There are no corresponding transfers or withdrawals from his other accounts. As Crown counsel submitted, these amounts reflect deposits of not insignificant sums the source of which cannot otherwise be accounted for and which correspond in magnitude to the sums said to have been paid to the appellant by Mr Kostandinu. On the other hand, the financial position of the appellant was such as to preclude those amounts being deposited without recourse to other accounts or recourse to Mr Kostandinu. Thus they tended to corroborate Mr Kostandinu’s testimony.

94 The same reasoning applies in December 1996 and January 1997. On 25 December 1996, according to Mr Kostandinu, he paid the appellant $1,500 and he said the same in relation to 16 January 1997. On 12 February 1997 the appellant deposited $3,037.25 in his Westpac cash management account and on 7 February he deposited $100 in his Westpac account 604049. There were no corresponding transfers or withdrawals from his other accounts. Even if Mr Volk’s contention that he paid the appellant $2,800 for fishing equipment in early 1997 is right both as a matter of substance and as a matter of precise dating, $2,800 is less than $3,137. It is not possible to account for the making of the deposits without either sourcing them from other accounts, which did not happen, or sourcing them from Mr Kostandinu.

95 In relation to counts 19-23 there is a somewhat more complex but similar pattern. On 3 March 1997, according to Mr Kostandinu the appellant received $3,000. On 6 March 1997 the appellant deposited $500 in his Westpac cash management account. There were no corresponding transfers or withdrawals from other accounts. On 10 March 1997 the account of the appellant’s parents had a cheque for $500 deposited into it. On 20 March 1997 the appellant received a cash gift of $400 from his parents. On 9 May 1997 Mr Kostandinu, on his account, paid the appellant $3,000. On the same day the account of the appellant’s parents had $600 deposited into it and $500 immediately withdrawn. On 16 May 1997 the appellant received a cash gift of $1,000 from his parents. On 29 May 1997 the parents’ account had $400 deposited into it. On 6 June 1997 the appellant received a cash gift of $630 from his parents. Mr Kostandinu said that on 28 June 1997 he paid the appellant $1,500. On 10 July 1997 the account of the appellant’s parents had a cheque for $500 deposited into it. On 8 August 1997 the appellant, according to Mr Kostandinu, was paid $1,500 by Mr Kostandinu. On 13 August 1997 the appellant deposited $1,100 in his Westpac account 604049. There were no corresponding transfers or withdrawals from his other accounts. On 27 August 1997 the appellant received $1,500, according to Mr Kostandinu. On the same day he deposited $800 in his Westpac account 604049 at Queanbeyan. There were no corresponding transfers or withdrawals from his other accounts. On 15 September 1997 the appellant received a cash gift of $900 from his parents.

96 In short, from March 1997 to September 1997 (after the sale of fishing equipment to Mr Volk) and before the Lipovski advance for share purchases, apart from the three “gifts” from the parents, there were no payments from third parties to the appellant to which counsel for the appellant has pointed which could account for the payments by the appellant into his own or his parents’ accounts. The sums involved were too large to be funded by people on social security unless they received other amounts or accessed other assets, which they did not. The sums were small enough to be funded out of the monthly payments which Mr Kostandinu said he made.

97 Finally, some of the payments by outsiders to the appellant are suspicious in the sense that they were immediately preceded by sums of about the same amount being paid into the outsiders’ accounts. Thus on 25 September 1997, $10,011 was deposited in Jiri Lipovski’s account; on the same day $9,150 was withdrawn from the appellant’s Westpac cash management account 10-8741; and on 29 September 1997 Jiri Lipovski paid $10,000 out of his account to the appellant. The movement of funds is largely circular. Similarly on 3 November 1995, $10,000 was withdrawn from the account of the appellant’s parents and given to the appellant – on the appellant’s case, as payment for a car he sold them. But the figure of $10,000 was about equal to the total of various sums paid into the parents’ account from 1993 onwards.

98 It is convenient to summarise the reasoning to this point. The giving of the $90,000 benefit shows that Mr Kostandinu made one substantial payment. The only available explanation for that payment was the one to which Mr Kostandinu testified – in large measure to buy protection. That in turn supports the view that other payments he said he made were made. Father Cockayne’s evidence establishes an admission by the appellant to that effect, and also constitutes evidence that the payments were for protection. Persons on social security operating a losing business might have been able to fund their asset purchases and lifestyle from third parties, but even taken at its highest, the evidence of third party payments is inadequate to explain the pattern of payments at crucial times. The appellant does seem to have had large liquid sums, but it also seems clear he made deposits and other payments without having to have recourse to them, because he could have recourse to a continuing stream of monthly protection payments from Mr Kostandinu.

99 Not only was there evidence before the jury on which they could convict, but, in my opinion, making one’s own independent assessment of the evidence, it was reasonable for the jury to convict and not dangerous to let the verdict stand, even in the light of the appellant’s arguments about the credibility of Mr Kostandinu as revealed in the witness box. These must now be examined.

The credibility of Mr Kostandinu

100 A reading of Mr Kostandinu’s evidence makes it understandable why counsel for the appellant used the strong language he did about Mr Kostandinu. He did appear to be on numerous occasions evasive, non-responsive, ready to offer self-serving answers, and inconsistent. It was also open to the jury to conclude that Mr Kostandinu pursued a very expensive and extravagant lifestyle, and that he did not satisfactorily explain numerous details about his financial affairs. He was contradicted on particular points by Mr Gruber and Mr Phillips. Even on his own evidence, he was extraordinarily gullible and trusting. His story was a quite remarkable one. He admitted changes in that story and he admitted discreditable acts. It would be unduly wearisome to set out the detail of the main complaints which counsel for the appellant made along the above lines: the arguments have been analysed and the evidence has been checked in detail. But these complaints show only that the jury could easily have rejected the totality of Mr Kostandinu’s evidence. It does not establish that it was unreasonable for them not to.

101 Extraordinary though Mr Kostandinu’s story is if it were substantially true, it would be even more extraordinary if it were false. His story explains why he benefited the appellant to the extent of $90,000 in relation to the Bateman’s Bay purchase; the appellant’s case did not. Mr Kostandinu was corroborated by Father Cockayne in several respects, and Father Cockayne was neither cross-examined nor contradicted. The appellant’s arguments based on the use of third party funds does not square with certain aspects of the payments. A jury is particularly well equipped to form a judgment about whether a witness’s unsatisfactory demeanour and manner of testifying – particularly a witness not fluent in English – is a sign of dishonesty or merely a sign of incompetence. A jury is also well equipped to distinguish between the hard core of a witness’s account and inessential details, and to accept the former but not the latter. The jury heard Mr Kostandinu over four days; this Court did not hear him at all. In particular, there was objective and independent evidence that supported key points of Mr Kostandinu’s testimony; the objective evidence which the appellant relied on was much less precise. The jury did not have to accept every detail of Mr Kostandinu’s jumbled and tangled testimony. It was sufficient if they accepted that the appellant repeatedly told Mr Kostandinu that he was at risk of injury unless he got protection, and that, if the appellant were paid as stipulated, the appellant could provide that protection. The jury was entitled to reason that while a confused, unreliable, tax-dodging witness like Mr Kostandinu might not be acceptable in many respects, he could be believed on the criminal standard of proof in key respects.

Proof on all charges?

102 Counsel for the appellant said that even if the main arguments on the appeal fail, in relation to certain withdrawals of money from Mr Kostandinu’s bank accounts in sums not equal to the monthly protection payments required, being sums not supported by clear cheque butts, there were some counts in relation to which Mr Kostandinu was not able convincingly to establish that he had paid the appellant. Mr Kostandinu’s confidence that he had paid the appellant appeared to rest on a faith in a roughly standard practice, and on the notes on the manila folder. In my judgment if the jury accepted Mr Kostandinu on the inducements which the appellant communicated to Mr Kostandinu and on the fact that many payments were made, it was not unreasonable for them to rely on Mr Kostandinu’s evidence of practice and to accept his evidence that the notes on the manila folder were made roughly contemporaneously with the events recorded. Three of the relevant counts preceded the purported commencement of the folder, but Mr Kostandinu’s evidence of his practice could reasonably be accepted even without the folder.

Orders

103 The appeal should be dismissed.

104 HULME J: I agree with Heydon JA.

105 HIDDEN J: I agree with Heydon JA.

**********

Last Modified: 03/20/2003