Regina v Ronen

[2004] NSWSC 1289

CITATION:	Regina v Ronen & Ors [2004] NSWSC 1289
HEARING DATE(S):
JUDGMENT DATE:	31 March 2004
JUDGMENT OF:	Whealy J at 1
DECISION:	I refuse each application for a separate trial.
CATCHWORDS:	Separate trial application: principles and application - - Admissibility of telephone intercept material - - Conspirator's rule re admissions and admissibility - - Admissions: a jury question
LEGISLATION CITED:	Crimes Act 1914 Evidence Act (NSW)
CASES CITED:	Saffron (1988) 17 NSWLR 395 Bolus [2003] NSWSC 658 Ahern v The Queen (1988) 165 CLR 87 R v MacCraild NSWCCA 18 December 1997 R v Singh-Bal (1997) 92 A Crim R 397 Festa v The Queen (2001) 208 CLR 593 at 603 per Gleeson CJ Papakosmas v The Queen (1999) 196 CLR 297 at 91-93 Serratore (1999) 48 NSWLR 101 at 31 R v Midis (unreported NSWSC 27 March 1991 R v Dellapatrona & Anor (1993) 31 NSWLR 123 R v Fenando (1999) NSWCCA 66 R v Chamy & Anor (2002) NSWCCA 136 Guimond v The Queen (1979) 44 CCC (2d) 481 Darby v The Queen (1982) 148 CLR 668 at 679 R v Assim (1966) 2 QB 249 Patsazlis & Spathis (1999) 107 A Crim R 432 at 435 Symss v The Queen [2003] NSWCCA 77 R v Oliver (1984) 57 ALR 543 Ignjatic (1993) 68 A Crim R 333 Webb & Hay v The Queen (1994) 181 CLR 41 at 88-89
PARTIES :	Regina v Ida Ronen Regina v Nitzan Ronen Regina v Izhar Ronen
FILE NUMBER(S):	SC 70222/03; 70032/03; 70223/03
COUNSEL:	Mr T. Game SC; Ms S. McNaughton - Crown Mr R. Ritcher QC; Mr N. Rosenbaum - Accused Ida Ronen Mr I. Hill QC; Mr. E. Power - Accused Nitzan Ronen Mr R. Van de Wiel QC; Mr P. Jones - Accused Izhar Ronen
SOLICITORS:	Ms P. Musgrave - Cth DPP Watsons Solicitors - Accused

LOWER COURTJURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):
LOWER COURT JUDICIAL OFFICER :

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

WHEALY J

WEDNESDAY 31 March 2004

70032/03 - REGINA v Nitzan RONEN
70222/03 - REGINA v Ida RONEN
70223/03 - REGINA v Izhar RONEN

JUDGMENT - Separate trial applications

1 HIS HONOUR: There are before the Court two groups of applications. The first is brought by Izhar Ronen. The second is made on behalf of Nitzan Ronen. They together, with their mother, Ida Ronen, are the three persons who have been indicted on charges of conspiracy to defraud the Commonwealth.

2 The substantive application made on behalf of each of the two accused is an application for a separate trial. Anterior to each application, and highly relevant to it, are a series of applications to exclude evidence in the nature of intercepted telephone calls. In general terms, these calls relate to an intercept placed on the telephone line at Ida Ronen’s apartment at Thornton Street Darling Point and operative between April 2000 and 7 February 2001.

3 The Court has been involved in a series of pre-trial applications since mid-February 2004. At this stage, it is intended that a jury be empanelled on Wednesday 14 April 2004. Hence, the need for an urgent decision on these applications

The charges

4 On 2 February 2004, an indictment was present against each of the accused and each was arraigned on that occasion. The indictment charges that Ida Ronen, Nitzan Ronen and Izhar Ronen, between about 1 October 1991 and 15 September 1995, at the Sydney in the State of New South Wales, did conspire with each other to defraud the Commonwealth, namely the Commissioner of Taxation, contrary to s 86A of the Crimes Act 1914. There is a further charge that Ida Ronen, Nitzan Ronen and Izhar Ronen, between about 16 September 1995 and 5 February 2001 at Sydney in the State of New South Wales, did conspire with each other and George Segal to commit an offence against s 29D of the Crimes Act 1914, that is to defraud the Commonwealth, namely the Commissioner of Taxation, contrary to s 86(2) of the Crimes Act 1914.

5 As will be seen, although there are two charges, there is in fact only one conspiracy alleged against the accused. The conspiracy alleged, however, is represented by two counts in the indictment in order to reflect a change made to the name and precise wording of the section under which the first count was drafted. This change came into effect at about the time of the commencement date of the second count.

Particulars of the conspiracy

6 I turn now to the particulars of the conspiracy. This is a document prepared by the Crown. It is a detailed document and I do not propose to set it out in full. It provides at the commencement: -

“The conspiracy alleged was an agreement between about October 1991 and the date of the arrest of the accused persons, namely 7 February 2001, to defraud the Commonwealth of income tax by concealing from the revenue a substantial proportion of cash income from the takings of four retail clothing outlets (as those outlets came into existence) associated with the accused persons Ida Ronen, Nitzan Ronen and Izhar Ronen.”

7 The particulars gave details of the four retail outlets. The first was identified as “Ronen Young Fashions” (RYF) a business owned and managed by Ida Ronen. The remaining three outlets were said to be businesses owned by On Fovo Pty Limited (On Fovo) and managed by Ida Ronen. The parties to the agreement were identified as each of the accused, it being alleged that the three individuals remained parties to the conspiracy throughout its duration.

8 The particulars indicated that, so far as the cash was concerned, only the banked cash was recorded in the books of account of RYF and On Fovo, and only this proportion was declared as income. Further, the particulars identified, at least during the period of surveillance, that a substantial proportion of the unbanked cash was remitted overseas on behalf of the accused in a manner such as to make it undetectable by the authorities. Again, during the period of surveillance at least, monies to be distributed to Mrs Ronen’s sons were retained by her in a safe in her bedroom until distributed. Bundles of money to be distributed to Nitzan and Izhar were wrapped in paper on which were recorded details, including the break down of the total amounts.

9 The following is then stated at page 2 of the particulars: -

“The unbanked cash was not declared as income by On Fovo Pty Limited, Mrs Ronen, Nitzan Ronen or Izhar Ronen, all of whom filed or caused to be filed tax returns during the relevant period (at least from the financial year ending 30 June 1993), up to and including the financial year ending 30 June 1999. The parties intended to deprive the Commonwealth of income tax or at least the opportunity to obtain income tax in relation to the unbanked cash.”

10 Finally, there are particulars given of particular steps taken in furtherance of the conspiracy from 1 July 2000. These steps came about as a consequence of the introduction of the Goods and Services Tax at that time. One additional step involved Mrs Ronen’s then de facto husband, George Segal, assisting Mrs Ronen in making additional calculations taking into account the GST. These calculations were recorded in computer spread-sheets produced by a computer kept at their home. The second step taken was the creation of a set of false till rolls for each retail outlet, reflecting a reduced amount of cash than that actually taken by each retail outlet. These false till rolls were created on a cash register kept at Mrs Ronen’s apartment.

11 From the foregoing, it will be seen that the Crown case is that the accused agreed to defraud the Commonwealth by agreeing to dishonestly deprive the Commonwealth of, or to jeopardise the Commonwealth’s entitlement to, income tax. The means by which the agreement was effected was by concealing from, and by failing to declare to, the Australia Tax Office, a substantial proportion of the cash income on the takings of the four retail clothing outlets (as these outlets came into existence).

The Crown case

12 The nature of the Crown case against all three accused may be briefly stated. It is set out, however, in more significant detail in a document that has been placed before me and described as “An Overview of the Crown case”.

13 In essence, the case involves an allegation of conspiracy to defraud the Commonwealth of income tax between 1991 and February 2001, involving income generated by four retail outlets associated with the accused. In one manner or another, each of the accused were or are directors and shareholders of a number of companies involved in the retail and wholesale clothing industry. Dolina Enterprises, Dolina Fashion Group and a joint venture (all collectively known as "Dolina Australia") were involved in the manufacture and sale of garments retailing through major outlets such as Coles/Myer, David Jones and Rockmans. These sales, in the main, did not involve cash sales.

14 However, in addition to the sales at the major outlets, Nitzan and Izhar, through their companies, supplied garments to four smaller retail outlets. These were managed by their mother, the accused Mrs Ida Ronen. Those outlets retailed garments to the public generally. The retail outlets were Ronen Young Fashions at 216-224 Commonwealth Street, Surry Hills; Dolina On Fovo at 17-51 Foveaux Street, Surry Hills; Fashion Bargains at 1-15 Foveaux Street, Surry Hills; and Warehouse at 132-142 Epsom Road, Rosebery. The last three businesses returned their income for income tax purposes through On Fovo Pty Limited. The income of Ronen Young Fashions was returned in the tax return of Mrs Ida Ronen.

15 As I understand the Crown case, it is said that customers of the four retail outlets paid for the garments by cheque, EFTPOS, credit or cash. The gravamen of the offence is that Mrs Ronen, on behalf of herself and her sons, skimmed from the takings most, if not all, of the cash; and diverted it to other purposes. For example, it is alleged that at the time that the skim of cash takings was brought to a halt in February 2001, only 10 percent was being banked and the remaining 90 percent was being distributed directly to the Ronens.

16 There is no need at this stage to detail the way the alleged skim took place. It is the Crown case, however, that it took place at Mrs Ronen's premises at Thornton Street, Darling Point, and that records were kept at her apartment showing the actual takings of each retail outlet. The reduced amount of cash, together with cheques, would then be sent to be deposited at the bank through employees of the Dolina Group. The amounts returned by On Fovo Pty Limited and Mrs Ronen represented only the moneys banked and not the larger amounts of cash skimmed and kept by or on behalf of each of the accused. The red books seized at Mrs Ronen’s apartment contained a generally consistent system of recording both the actual takings of the retail outlets and the split of the cash between Nitzen, Izhar and, at various times, Mrs Ronen herself.

17 The Crown case is based in part on a significant body of material that was seized on 7 February 2001 by way of search warrant. There are also a significant number of telephone calls intercepted, the intercepts centring on Mrs Ronen's home telephone at her premises at Darling Point. In addition, there is to be evidence from a number of employees being shop assistants who worked in the retail outlets. Evidence is also to be called from the previous Financial Operations Director for the Dolina Fashion Group, Mr Brandon Greyling and Vanessa Bortolin, the Dolina accountant between March 1997 and December 1999. It is also anticipated that there will be evidence from Jennifer Lawler who is the payroll officer for Dolina Fashion Group Pty Limited, Dolina Enterprises Pty Limited, Ronen Young Fashions and On Fovo Pty Limited. The long time accounts receivable clerk for Dolina, Susan Bloomfield, will also give evidence concerning the business practices she observed.

18 The Crown case will in addition, rely upon evidence from two indemnified witnesses. The first of these is George Segal, an un-indicted co-conspirator, who first met Ida Ronen in September 1996. His evidence will include direct evidence of the skimming operation carried out at Thornton Street, Darling Point where he lived for a time with Mrs Ronen. In addition, Mr Segal will give evidence of his own involvement in the creation of computer spreadsheets designed to conceal the true income of the retail outlets from the impact of GST at the time of its imposition in the year 2000. Further, Mr Segal will give evidence to support the proposition that large sums of money, taken from the skimmed cash, were given to an accountant, Mr Agoston and another person Moss for those persons to send the cash overseas in a manner so as to make it undetectable by the authorities.

19 The second indemnified witness is Mark Robert Talbert. His evidence is principally concerned with the arrangements he made with Mrs Ronen to devise a cash register system to falsify retail sales figures so as to avoid the disclosure of true income figures (and the payment of GST thereon) at the time of the introduction of GST in 2000. His evidence will include details of meetings between himself, Ida and Nitzan Ronen when the software package was set up in the cash register system. As will be seen, a number of the telephone intercepts relate to conversations between Mrs Ida Ronen and her two sons in which this system was discussed and explained between them.

20 The Crown case is that, at the time of the execution of the search warrant at Mrs Ronen’s premises on 7 February 2001, there was located in her bedroom a Sharp cash register connected to a Sharp laptop computer which Mrs Ronen allegedly used to falsify the till rolls of the businesses.

21 The final group of witnesses who will go to make up the Crown case include Mr Ian Geller, an accountant at Krochmalik & Hurwitz; John McVeigh, an officer with the Tax Department who analysed the tax returns and who will provide evidence regarding the imposition of GST in relation to the businesses; and Georgina Wade who has made a detailed analysis of the nature of the income shown in the accounts of On Fovo Pty Limited and Ronen Young Fashions Pty Limited over a number of relevant years. Ms Wade has also made an analysis of the telephone conversations intercepted in an endeavour to correlate and link the material to the calls to the documentary information otherwise found at Mrs Ronen’s apartment and the places of business. This analysis, according to the Crown case, fully supports the proposition that the telephone intercepts relate, on a significant number of occasions, to the very matters contained in the financial and other records seized.

The applications for separate trials

22 The first application was made by Mr Van de Wiel QC on behalf of his client Izhar Ronen. The essential nature of his application derives from the assertion of a number of prejudicial aspects of the case against his client. First, there is the general proposition that there may be prejudice involved because the charges relate to conspiracy to defraud the Tax Commissioner in the context of a group of garment manufacturing businesses operated by Jewish people. I should say immediately there is no substance, in my view, in this submission whatsoever.

23 Secondly, there is the proposition that, unlike many conspiracy trials, this one involves a group of people who are members of the same family and who are engaged in the common enterprise of manufacture, distribution and sales of clothing. In other words, Mr Van de Wiel suggests that there may be a special need for care in the present matter because many of the dealings between the three alleged co-conspirators are likely to be judged inappropriately, even though they are no more than ordinary communications between family members and business partners.

24 The third basis of the application is perhaps the one most likely to be capable of being regarded as compelling. This is the argument that suggests that there is a relatively weak case against Izhar Ronen and that a significant body of evidence – particularly a number of telephone intercepts involving Mrs Ronen, her son Nitzan and other persons may, in the end, be not admissible against Izhar Ronen as acts in furtherance of the conspiracy. Nevertheless, their presence in the trial will so poison the atmosphere of the trial that, in all the circumstances, there will be a significant possibility that Izhar Ronen will not receive a fair trial.

25 In making this last submission, Mr Van de Wiel very fairly conceded that, for the purposes of the application, the Court may proceed on the basis that “there is sufficient evidence in the Crown case for Izhar Ronen to be considered by a jury as to whether or not he was a participant in the conspiracy”.

26 The fourth argument advanced by Mr Van de Wiel is that, in the telephone conversations to which I have made reference, and indeed in those calls admissible against his client, there is for other reasons a considerable amount of prejudicial material so that if it is admitted in the trial, it will operate unfairly and prejudicially towards Izhar Ronen and, for that reason, it ought to be excluded. The subtext of this argument is that a good deal of this material is irrelevant to the conspiracy but prejudicial nevertheless.

Mr Hill QC argued that there should be a separate trial on behalf of his client Nitzan Ronen. His concerns were similar to those of Mr Van de Wiel. Mr Hill was essentially concerned with the prejudice which might flow from a relatively limited number of the telephone intercepts. These were intercepts that, in the main, were not admissible against his client but which were likely to be of an unduly and prejudicial nature, were they to be admitted in the trial. Senior counsel suggested that the only way this prejudice could be overcome was either an order for a separate trial in relation to his client; or the exclusion of the evidence altogether.

Just as Mr Van de Wiel had argued that the case against Mrs Ronen was far stronger that the case against his client Izhar, so too did Mr Hill embrace a submission that the case against Mrs Ronen was much stronger that the case against Nitzan. This aspect of the submissions related to the statements made by Mrs Ronen at the time of the execution of the search warrant and available before the jury on video tape; the direct dealings she had with the computer technician Mr Talbert; and the fact that she kept and recorded the books and kept the monies in the safe in her apartment.

27 I should add for completeness that Mr Richter QC did not seek a separate trial on behalf of his client, Mrs Ida Ronen. Of course, he appreciated that the practical consequences of the applications made on behalf of Izhar and Nitzan, if they succeed, is that his client will face a separate trial. Notwithstanding that Mr Richter made no submissions in relation to the separate trial applications, he pressed objections to a small number of the telephone intercepts. These were a call between Nitzan Ronen and Yaffa (BB36); a call between Nitzan and one Daniella Lior (BB90); and on the same topic there were two calls from Mrs Ronen to Daniella Lior (BB121 and BB224). Even though Mrs Ronen was either the maker of or involved in these calls, Mr Richter argues that they should not be admitted against his client or, for that matter, against any of the alleged co-conspirators. Finally, there were the three telephone calls on the day of the execution of the search warrant. These were conversations between Mrs Ronen and her sons. Mr Richter argued that these were prejudicial in a sense that they invited speculation and unfair use. Secondly, he argued that these three telephone conversations were confidential, in circumstances where Ida Ronen believed that she was being allowed to contact people to try and get a solicitor; and that consequently considerations of unfairness arose if they were to be admitted into evidence because the federal agents involved knew that interceptions were taking place on the telephone line.

The intercepted telephone calls

28 I consider that as a practical matter I should deal with all the objections to the telephone intercepts before outlining the relevant principles applicable to a separate trial application. When, so far as I am able, I have made rulings on the objections taken to the telephone intercepts, I shall then examine the submissions made on behalf of the applicants, in the light of those legal principles, and determine whether separate trials should be ordered.

29 The parties have adopted a sensible method of dealing with the arguments in relation to the objections to telephone calls. They have endeavoured, so far as they were able, to place them into categories. As might be expected, there is some slight overlapping between the categories particularly as they emerged in the arguments of senior counsel appearing for each of the accused. As a consequence, I have to a minor degree readjusted the categories. I trust that, in so doing, I will address all areas of objection.

Category 1 – telephone calls relating to the transfer of monies overseas and the dealing with monies in those overseas countries

30 These calls were intercepted on Mrs Ronen’s telephone at Darling Point and, in the main, are calls between Mrs Ronen and her sons. In addition, there are several overseas calls either to one Daniella Lior or Yaffa. There is a call from Mr Agoston to Mrs Ronen and calls involving Mr George Segal.

31 In general terms, Mr Van de Wiel conceded that calls made by or to his client, notwithstanding that they related to the transfer of monies overseas, were admissible against him. The other calls made between Mrs Ronen and Nitzan (and others) on the topic of the transfer of money overseas, he argued, were not admissible against his client. Their proper admission against either Mrs Ronen or Nitzan, however, would place his client in a position of unfair prejudice. This was because, so it was alleged, his client would be judged on the basis of the evidence inadmissible against him, notwithstanding that careful directions would be given to the jury to negate the possibility of unfair prejudice occurring.

32 Further, Mr Van de Wiel argued that the matters in this category of calls (being calls generally between Mrs Ronen and Nitzan and others) had nothing to do with the alleged conspiracy. In this regard, Mr Van de Wiel’s objections were echoed by Mr Richter QC on behalf of Mr Ronen. The proposition developed on behalf of Izhar Ronen was that the actions of Mrs Ronen and Nitzan were not the actions of persons acting in furtherance of a conspiracy to avoid income tax; but were the actions of individuals in relation to monies which had already been distributed and could not form part, for that reason, of the original alleged conspiracy.

33 It is important to note that it was not put on behalf of any of the accused that there was insufficient evidence of pre-concert activities so as to preclude, at a prima facie level, the findings of a combination between the three co-conspirators. Indeed, concession was made by Mr Van de Wiel to that effect, as I noted earlier.

34 The Crown response to the arguments in relation to the calls in category 1 is this: First, it is reasonably open to find that Mr Izhar Ronen was aware of and involved in the transfer of monies being sent overseas either to avoid the payment of tax or to conceal the income that would otherwise be taxable. Because this is so, the statements made by Mrs Ronen and his brother Nitzan in the relevant telephone intercepts are admissible against him. Secondly, the Crown argued that even were those telephone intercepts not admissible in that way against Izhar Ronen, but only admissible against his mother and brother, there would in fact be no significant prejudice to him arising out of the continuance of a joint trial. This is so because there is a considerable body of evidence, directly admissible against Izhar, showing his significant involvement in the sending of the intermingled monies overseas. The Crown analysed the telephone calls (especially those involving Izhar Ronen himself) and suggested that Mr Van de Wiel’s client is thereby shown to be directly involved with Mr Agoston for the purposes of transferring the relevant funds overseas on a number of occasions. It was not unfair, the Crown suggested, to describe Mr Izhar Ronen as the conduit between the conspirators and Mr Agoston for the transfer of funds overseas.

35 In dealing with these submissions, I propose to refer to specific telephone calls in category 1 only where it is necessary to do so. My general response, however, may best be expressed by reference to a number of propositions. First, the Crown case is that the sending overseas of the intermingled monies from Mrs Ronen’s safe keeping, or after distribution between the co-conspirators, is part of the one conspiracy to defraud the Commonwealth. Whether this is so or not, or whether the conspiracy came to an end after distribution, will, in my view, be essentially a matter for the jury (see Saffron (1988) 17 NSWLR 395 and Howie J’s decision in Bolus [2003] NSWSC 658).

36 Secondly, as a general proposition, the Crown will be entitled, in certain circumstances, to place actions or statements by Mrs Ronen and Nitzan Ronen before the jury as admissions of the participation of Izhar Ronen in the conspiracy. This will occur where it is established that there was a combination of the type alleged and that the acts were done or the words uttered in furtherance of its common purpose; and where there is reasonable evidence, apart from the acts or words, that the accused Izhar Ronen was also a participant (Ahern v The Queen (1988) 165 CLR 87 at 100). The analysis may be put slightly differently in the terms of s 87(1)(c) of the Evidence Act (NSW): where it is reasonably open to find that a previous representation made by a person was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one of more persons including the party, the representation may be admitted and taken to be an admission by the party.

37 Thirdly, the general position is that where a dispute has arisen as to whether the actions and words of co-conspirators are admissible in the manner outlined in the last paragraph, it is often the better course to allow the admission of the relevant pieces of evidence, in the first instance, against the conspirator or conspirators directly involved in the doing of the actions or the uttering of the words. This means that the final analysis of the reach of the admissions represented by the actions and words is postponed until all the evidence is in. At that time, the Court will, generally speaking, be in a better position to assess and give a final ruling on the extent of the independent evidence of participation; and hence on the broader question of admissibility against the other co-conspirator or conspirators (Ahern page 104).

38 Despite the obvious sense of the general statement contained in the last proposition, both the Crown and the defence have invited me, in the present matter, to rule on the category 1 telephone calls at a pre-trial level. My general preference is not to do so; but, as I have been requested to do so, I will give a preliminary view, that is one that does not shut out further argument during the trial or perhaps, more appropriately, at the time the evidence is in. I have agreed to make this preliminary ruling essentially because of its potential bearing on the separate trial applications. It is not intended to be a final ruling.

39 There is one further matter that needs to be mentioned before going to the ruling on the category 1 calls. That is, it is agreed between the parties that I should apply s 137 to exclude any material where its probative value is outweighed by the danger of unfair prejudice to the accused.

40 I shall deal firstly with the calls passing between Mrs Ronen and her son, Nitzan. In my view, there is, at a prima facie level, sufficient evidence to satisfy me that the these telephone calls are admissible against Izhar Ronen. This is so whether the matter is approached by way of the Ahern principles or by reference to the relevant provisions of the Evidence Act (NSW). It has been said, in any event, that the approach is the same (R v MacCraild NSWCCA 18 December 1997). It is part of the Crown case that the words and actions represented in those telephone conversations between Mrs Ronen and her son Nitzan were in furtherance of the conspiracy and I agree that this is arguably so. Moreover, the telephone conversations between Izhar Ronen and his mother, which are in general terms conceded to be admissible against Izhar Ronen, demonstrate his general involvement in the arrangements to send monies overseas.

41 I reject the argument that the subject of the various telephone calls between Mrs Ronen and her son Nitzan had nothing to do with Izhar. In my view, the content of those conversations, and the separate and direct evidence against Izhar on the point, negate this submission.

42 Notwithstanding this general ruling, I delete the following matters: -

1. In telephone call BB1 I delete the first five sentences;

2. I delete the first sentence in BB75;

3. I delete the last two sentences in BB164;

5. I delete the second sentence in BB233;

43 While generally conceding that the telephone conversations involving Izhar Ronen were admissible against him, Mr Van de Wiel did suggest that a certain degree of editing should take place in relation to a number of them. I am satisfied that is warranted. However, I will leave it to the parties to have further discussions in that regard. In my view, the disputed conversations are, in general terms, admissible. A good example of a reasonable edit is to be found in call BB157, where the matters to be relied on by the Crown, and which fall within my general ruling, can be separated from other material.

44 There remains then for determination in this category only a number of discrete calls. The first is BB36, a call from Nitzan Ronen to “Yaffa”. A telephone call BB90 from all three accused to Daniella Lior; telephone call BB121, Mrs Ronen rings Daniella; call BB150, Mrs Ronen rings Yaffa at Bank Leumi, Israel; telephone call BB224, Mrs Ronen rings Daniella. In relation to all these calls, I consider that there is a prima facie position of admissibility against all three accused. The evidence is admissible under s 87(1)(c) as it is reasonably open to find that the representations were made in furtherance of the common purpose and there is, in any event, other reasonable evidence against Izhar Ronen that he was a participant in that aspect of the conspiracy relating to the sending of monies overseas. The evidence is admissible under s 87. There is no warrant for excluding any of this material under ss 135 or 137.

Category 2

45 This category comprises three telephone calls made by Mrs Ronen to third parties. The first was on 23 May 2000 and was a call to Mrs Spiegel. During the conversation, Mrs Ronen discussed the problem of the GST. The call records her as saying “No, you can do it” and she further stated (dropping her voice) “Two registers”. The second call was on the 29 June 2000 (B202) during this call with Daniella, Mrs Ronen said “Look, now on the first GST commences. I will show Izhar what he need to do in order not to pay so much taxes”. The third call (B205) is a call between Mrs Ronen and Zelma. It again relates to the cash monies and the need to do something to preserve the status quo when the GST commences.

46 Counsel for each accused object to the material involved in these three calls.

47 In my view, the first two telephone calls are admissible against Mrs Ronen and no warrant has been established on her behalf for their exclusion under either s 135 or s 137. Generally speaking, the issue as to whether a statement made by an accused amounts to an admission or not is a question of fact. It is a matter for the jury to determine whether they are satisfied beyond reasonable doubt that the accused made an admission, and if so, whether it is sufficiently reliable for the jury to act upon it to convict the accused of the offence to which the admission relates. Whether they should act upon the evidence is however, a matter for them and not for the trial judge. There is no power under s 137 to reject evidence of an admission simply because the trial judge believes that the jury should not find that the admission was made: R v Singh-Bal (1997) 92 A Crim R 397. Section 137 is only engaged where the probative value of the evidence is outweighed by its unfairly prejudicial effect. Unfair prejudice under the section arises, for example, where there exists the probability that the jury might misuse the evidence in some way other than for the purpose for which it was placed before them (Serratore (1999) 48 NSWLR 101 at 31; Papakosmas v The Queen (1999) 196 CLR 297 at 91-93. If the evidence is relevant and if there is no likelihood of the jury misusing the evidence in some way, then its probative value, or its lack of probative value, is a matter for the jury. The mere fact that evidence supports the prosecution case and is inculpatory of the accused does not amount to unfair prejudice (Festa v The Queen (2001) 208 CLR 593 at 603 per Gleeson CJ)

48 Despite the flagging of an ingenious argument by the Crown, I remain unconvinced that there is any basis for the admission of these two calls against either Nitzan or Izhar Ronen. It is my view that they are not admissible against either of those two accused.

49 The third phone call is, in my view, however, highly equivocal. I remain unconvinced of its probative value and consider that there is a risk of unfair prejudice that outweighs any degree of probative value. The third telephone call is rejected.

Category 3 objections – prejudical

50 First, I shall deal with the objections taken by Mr Van de Wiel on behalf of Izhar Ronen. It may be convenient if I deal with these in an abbreviated fashion: -

· Call B84: this is only pressed against Mrs Ronen

· Call B85: this is only pressed against Nitzan Ronen and Mrs Ronen

· Call B158: this is now pressed only against Nitzan Ronen and Mrs Ronen

· Call B189: this is obviously an important call from the Crown perspective and it requires comment. There is direct evidence imposing knowledge on Izhar Ronen of the registers and their function so as to minimise GST and conceal the true takings of the retail businesses. The material in the subject telephone call between Nitzan Ronen and his mother is in my view admissible not only against those persons but also against Izhar. This is so whether the Ahern test is applied or whether the matter is pursued under s 87(1)(c) of the Evidence Act (NSW). It is not, in my opinion, speculative; and it matters not that Izhar Ronen may not in fact, have taken any lessons for the use of the equipment. It has significant probative value and, in my view, there is no danger of unfair prejudice.

· BB38: (I have already dealt with this under category 1).

· BB122: this is a conversation between Mrs Ronen and George Segal relating to the concealment of the register in her apartment. For the reasons already stated, this call is admissible, prima facie, against Mrs Ronen and the co-conspirators.

· BB306, BB307 and BB308. These are no longer pressed by the Crown.

51 I turn now to the objections taken to individual questions by Mr Hill QC on behalf of Nitzan Ronen. A number of the rulings I have already made cover these. However, Mr Hill argued that there is a general discretion to exclude evidence from the trial where, although it may be admissible against one accused, it is not admissible against another. An illustration he gave was the telephone call B105. I have already ruled that this is admissible against Mrs Ronen but not against Nitzan Ronen or Izhar Ronen. Mr Hill argues that this telephone conversation should be excluded altogether because of the prejudice that will be generated by its presence in the trial. First, I am unable to agree that there is any basis, statutory or otherwise, that would warrant my excluding the evidence otherwise found to be admissible against Mrs Ronen, assuming of course that ss 135 and 137 do not, in their terms, warrant the exclusion of the evidence against her. In my view, the Crown is right when it says that, were this evidence to be so massively prejudicial as has been alleged, it might result in an order for a separate trial rather than its exclusion from the trial altogether. Secondly, for reasons which I will develop later when examining the separate trial application, I am not in any event satisfied that Mrs Ronen’s admission constitutes material that is in any way unfairly prejudicial to the other accused. This is primarily because there is other direct evidence, admissible against both Izhar Ronen and Nitzan Ronen, which demonstrates their knowledge of and involvement in the establishment of the register system for the creation of false till rolls.

Separate trial application – the principles

52 The legal principles to be applied in relation to an application of this kind are well settled. First, it is clear that the applicant carries the burden and onus of proving that he would suffer a positive injustice if required to stand trial with the other co-accused (R v Midis (unreported) NSWSC 27 March 1991; R v Dellapatrona & Anor (1993) 31 NSWLR 123; R v Fenando (1999) NSWCCA 66 and R v Chamy & Anor (2002) NSWCCA 136.

53 In Fernando, the Court said at para 207-210: -

“In R v Dellapatrona & Duffield (1993) 31 NSWLR 123 this Court said at 133C:

"There remains a balance to be struck between the public interest in the efficient despatch of criminal trials and any prejudice which may be caused to the accused. It is desirable to have all those charged in relation to a particular crime tried at the same time unless positive injustice would thereby be caused… ."

The court further said in Dellapatrona and Duffield at 134C:

"It should, however, be emphasised that separate trials will not be granted merely because there is evidence admissible against one accused but inadmissible against another accused to whom it is prejudicial. The decision of the Supreme Court of Canada proceeded upon the clear basis that separate trials should only be granted in such a case where the evidence admissible against the second accused (to whom the prejudice is caused) is substantially weaker than that admissible against the first."

Dealing with a ground asserting an error in the trial judge's discretion to refuse an application for separate trials, the court stated at 137A:

"Although such an exercise of discretion may be reviewed on appeal (within well-known limits), this Court does have the benefit of the hindsight gained by knowing what has in fact transpired at the trial, and it is also able to judge - by reference to the whole of the evidence and to the verdict - whether the risk of impermissible prejudice by reason of the joint trial was worse than that contemplated at the time and whether it had in fact amounted to positive injustice to the appellant. In that sense, the task of this Court is not the usual one of reviewing the exercise of a trial judge's discretion .."

In R v Baartman , unreported, Court of Criminal Appeal, 6 October 1994, this Court approved the summary of principles involved in matters such as this by Hunt J in R v Midis , unreported, NSWSC 27 March 1991. There, his Honour had made the following statement of principle:

"Briefly, the relevant principles are that:

1. Where the evidence against an applicant for a separate trial is significantly weaker than and different to that admissible against another or the other accused to be jointly tried with him; and

2. Where the evidence against those other accused contains material highly prejudicial to the applicant although not admissible against him; and

3. Where there is real risk that the weaker Crown case against the applicant will be made immeasurably stronger by reason of the prejudicial material, a separate trial will usually be ordered in relation to the charges against the applicant. The applicant must show that positive injustice would be caused to him in a joint trial."

54 As Hunt J (as he then was) in Midis observed at page 2, the principles upon which separate trials will be ordered in circumstances where there is an argument based on possible prejudice arising from evidence admissible against one accused but perhaps not against the other, were laid down by the Supreme Court of Canada in Guimond v The Queen (1979) 44 CCC (2d) 481, and approved by the High Court of Australia in Darby v The Queen (1982) 148 CLR 668 at 678. In the latter decision, the High Court said at 678: -

“In the light of these considerations, in our opinion there is much to be said for the recent decision of the Supreme Court of Canada in Guimond v The Queen requiring separate trials in cases where the evidence admissible against one accused is significantly different from the evidence admissible against the other. We would encourage the adoption of such a practice. In cases where there is no material distinction in the evidence admissible against both alleged conspirators, the trial judge’s advice to the jury that they will either convict or acquit both accused will continue to be appropriate not because of any technical rule but because of the circumstances of the case (cf Lord Simon of Glaisdale in Shannon (1975) AC at p 768).”

55 The basic principle is well understood and of general application. There are, as many of the authorities make clear, strong reasons of principle and policy why accused persons charged with being involved in a joint criminal enterprise or offence should stand trial together. Further, where one or more persons are accused in relation to the same offence they should as a matter of policy ordinarily be tried together (see R v Assim (1966) 2 QB 249; Chamy & Anor (supra) and Fernando (supra).

56 It has been said that one of the principal reasons for the policy that accused persons alleged to have been involved in the commission of an offence should be tried together is that the jury is thereby given the opportunity to observe each of the accused and to consider the whole of the relevant facts rather than what may be a misleading portion of those facts.

57 In determining the issue as to whether a separate trial should be ordered the Court must take into account not only the interests of the applicant but must also take into account the interests of the administration of justice. In fact it is the interests of justice as a whole that are to be the governing factor but of course amongst those interests are the interests of the accused.

58 Another reason that has led to joint offences being tried jointly is the important policy reason related to the desirability that the same verdict and the same judgment should be returned against all those concerned in the same offences. That is to say there is a need to avoid a situation which might commonly arise where inconsistent verdicts might result because of the holding of separate trials. So it is not just a question of saving time and money although this is a consideration that may be taken into account.

59 Where accused persons are ordered to stand trial separately there may be in fact a waste of time and money and there may be a considerable inconvenience to witnesses who may be required to give their evidence in each trial.

60 In general terms, there is no dispute between the parties in relation to the formulation of these principles. One matter of difference emerged however, namely whether the relevant principles stated by Hunt J in Midis were cumulative or not. It was suggested that Kirby J in Patsalis and Spathis (1999) 107 A Crim R 432 at 435 had decided that the three requirements identified by Hunt J in Midis were not cumulative. However, it seems quite clear to me that Kirby J was merely reciting a submission that had been put to him to that effect. Moreover, it seems that Kirby J in fact rejected the submission.

61 For my part, I have no doubt that Hunt J’s statement of relevant principles were intended to be cumulative and were expressed precisely to give effect to that intention. This appears to be the view taken by the Court of Criminal Appeal in Symss v The Queen [2003] NSWCCA 77. (See the judgment of Sheller JA (with whom James J and Smart AJ agreed at para 69).

62 But in any event, I consider that it is important to keep in mind that the ultimate test to be applied in relation to a separate trial application is that, subject to one consideration, it is desirable, in the ordinary course that all persons said to have been concerned with the one crime should be dealt with in the one trial. The excepting consideration is that, if a joint trial would cause positive injustice to an accused, then a separate trial should be ordered (R v Oliver (1984) 57 ALR 543; Ignjatic (1993) 68 A Crim R 333; and Webb and Hay v The Queen (1994) 181 CLR 41 at 88-89.

Should separate trials be ordered?

63 I have come to the firm conclusion that the separate trial applications made on behalf of Izhar and Nitzan Ronen should be rejected. First, it may be said that this is an entirely proper matter for a joint trial. There is in substance but one charge against the accused; and there is in substance one conspiracy alleged. This conspiracy alleges one agreement to defraud the Commonwealth of income tax by concealing from the revenue a substantial proportion of cash income from the takings of four named retail clothing outlets. The parties to the agreement are identified as each of the accused, it being alleged that the three individuals remained parties to the conspiracy throughout the entirety of its duration. One of the retail outlets was owned and managed by Ida Ronen. The remaining three outlets were businesses owned by On Fovo Pty Limited and managed by Ida Ronen. All these matters point powerfully towards a conclusion that it is in the public interest that there be a joint trial.

64 Secondly, there is the obvious point that the Crown case material to which I have referred is lengthy and, in some respects, complex. The ordering of separate trials would represent a significant waste of time and money and would involve a considerable inconvenience to a large body of witnesses who may be required to give their evidence in each trial.

65 Thirdly, the nature of the conspiracy alleged and the close knit relationship between the three accused reinforce the proposition that there should be a joint trial. This will give the jury the opportunity to observe each of the accused and to consider the whole of the relevant facts rather than what may be, especially in a conspiracy case, a misleading portion of the facts. Moreover, a joint trial in the present circumstances is likely to avoid a situation where inconsistent verdicts may result.

66 All the matters that I have considered thus far point, as I have said, firmly in the direction of a joint trial. It is of course necessary, in the ultimate to have regard to the interest of the administration of justice. But that consideration itself requires the Court to take into account the interests of the accused.

67 Can it be said in this case that the Midis’ principles apply so as warrant separate trials? In my view, they do not. The case to be mounted by the Crown is not significantly weaker against Izhar Ronen than it is against Ida Ronen or, for that matter, Nitzan Ronen. It is true that admissions made by Mrs Ida Ronen during the execution of the search warrant will, in general terms, be admissible only against her. However, the nature of the items found in her apartment, including the safe, the books of account, the computer spread-sheets and the cash register will, in the light of the nature of the telephone intercepts admissible against Izhar Ronen, assume significance in the case against him.

68 The Crown has placed before me Exhibits “IZR6” and “IZR7”. These are summaries of direct evidence against Izhar Ronen and Nitzan Ronen. There is no need for me to descend into the detail of these comprehensive summaries. I have also had regard to the statements of Ms Wade, George Segal and Mr Talbert. I have endeavoured, at the outset of this decision, to describe in general terms the evidence that will be mounted against the accused. There is a significant body of evidence directly admissible against Izhar Ronen. There is also a significant body of intercepted telephone calls which contain representations which, by virtue of the provisions of the Evidence Act, may be taken to be an admission by him that the representations were made in furtherance of a common purpose that the maker of the representations had with him as part of the conspiracy.

69 I shall assume, for the sake of the present argument, that the category 1 telephone calls are not admissible against Izhar Ronen. As I have said earlier, I think there is sufficient material fro me to find that on a prima facie level they are so admissible. But let it be assumed I am wrong in that conclusion and that, prior to addresses and summing-up before the jury, a different view may be reached. It still could not be said, in my opinion, that the existence of that body of evidence, even if it were not to be admissible against Izhar Ronen, creates a prejudicial situation against him at such a level that a separate trial is warranted. This is because of the existence of a significant body of other evidence directly admissible against Izhar Ronen that shows his knowledge of and involvement in the removal of significant sums of cash money overseas. There are many illustrations in Exhibit “IZR6”. One may suffice as an example: -

“On 24 May 2000 Izhar Ronen rang his mother. He said he would send Jane to get $500 or $1,000. Mrs Ronen stated that she hadn’t got much because she ‘has sent it’. She said ‘I took your money and mine and I have Nitzan 80 to send for us’. Izhar confirmed that Nitzan had sent 80. He complained about the rate. Izhar asked if it were sent with Agoston and Mrs Ronen states ‘No, with Moss’.”

70 As I have said, there are many other illustrations. Indeed, they appear to demonstrate, at a prima facie level, that Izhar Ronen played an important part in making arrangements with Mr Agoston for the delivery of cash monies overseas (See for example, the call on Wednesday 30 August 2000 in Exhibit “IZR6”).

71 In the same way, it may be said that there is a body of evidence to show that Izhar Ronen well knew about and participated in the establishment of the cash register system designed to conceal the takings of the retail outlets in the context of the goods and services tax. Indeed, Mr Van de Wiel did not dispute that this was so. Again, one example will suffice. There is a phone call on 23 June 2000 when Izhar Ronen called Mrs Ronen:

72 During the call, Mrs Ronen replied to Izhar in response to his exclamation that it was a great day “Yes, great, I am counting and counting money, I have already reached 10, 20, 30, 34”. Izhar asks “What is 34?” Mrs Ronen states “34 thousand in cash, without today and without tomorrow”. Mrs Ronen stated “Listen, today he came to fix the register because he needs to receive, and he said if it is difficult for you, he can, if I show him what to do, and write for him how much in cash and how much in takings, he can do it at his house and bring it to you ready”. Every time every week. Mrs Ronen says Talbert is “prepared top work for you”. Ronen says “I told him that I have to ask my son”. Izhar does not want this and is also unhappy that George knows about these matters. Mrs Ronen stated that George knew how much money came into the house. Mrs Ronen stated that Talbert should teach Izhar. Izhar states “Yes, he must teach us. Did he teach you or not?” Mrs Ronen informs him that you need “a cassette for it to work”. The cassette is “just like your son’s games. Talbert is waiting for the disk to arrive”.

73 There are a number of other very clear examples. They demonstrate, as I said above, that there is an independent case against Izhar Ronen in relation to both the sending of monies overseas and the use of cash registers, special computer equipment and the like to distort the takings of the business for GST purposes.

74 In these circumstances, it simply cannot be said that in the trial there will be material highly prejudicial to the applicant although not admissible against him. There will no doubt be some evidence – relatively discrete – that is not admissible against Izhar; but there will be a considerable bulk of evidence that will be admissible against all co-conspirators. There will, in addition, be the independent evidence admissible against Izhar on the very topics that are said to raise the issue of prejudice.

75 There is no need for me to descend into the detail of the case that is mounted against Nitzan Ronen. In general terms, there are ample illustrations in it of Nitzan Ronen’s involvement with the sending of monies overseas and of his involvement in the setting up and use of the false cash register system.

76 In my opinion, there has not been established any valid basis to support the proposition that positive injustice will be occasioned to Izhar Ronen or Nitzan Ronen in the conduct of the joint trial. Indeed, for the reasons I have stated, there are powerful and compelling reasons why this matter should continue as a joint trial.

77 I refuse each application for a separate trial.

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Last Modified: 07/16/2007