The State of Western Australia v Forte - [2019] WADC 114

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CRIMINAL

LOCATION:   PERTH
CITATION:   THE STATE OF WESTERN AUSTRALIA -v- FORTE [2019] WADC 114
CORAM:   HERRON DCJ
HEARD:   10 JULY 2019
DELIVERED          :   9 AUGUST 2019
PUBLISHED           :   28 AUGUST 2019
FILE NO/S:   IND 1905 of 2018
BETWEEN:   THE STATE OF WESTERN AUSTRALIA

AND
ANDREW JEFFREY FORTE
ARTHUR WILLIAM PRICE

Catchwords:

Corrupt conduct - False entries in local government record - Whether accused previously engaged in corrupt conduct by creating false records - Whether a tendency to act in breach of shire policy and to misrepresent the truth to the shire by creating false documents - Whether the proposed evidence has significant probative value to the issues at trial - Whether the public interest in adducing all relevant evidence must have priority over the risk of an unfair trial - Section 31A Evidence Act 1906

Legislation:

Criminal Code (WA), s 83, s 85(a)
Evidence Act 1906 (WA), s 31A

Result:

Application dismissed
State not permitted to lead proposed tendency evidence

Representation:

Counsel:

Applicant	:	Mr N R Cogin
First Accused	:	Mr A G Elliott
Second Accused	:	Mr D W L Renton

Solicitors:

Applicant	:	State Director of Public Prosecutions
First Accused	:	HWL Ebsworth Lawyers
Second Accused	:	Clyde & Co (Perth Office)

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

DKA v The State of Western Australia [2017] WASCA 44
La Bianca v The State of Western Australia [2019] WASCA 105
The State of Western Australia v Burke [2011] WASCA 190

HERRON DCJ:

Background

By indictment dated 15 January 2019 each of the accused, Mr Forte and Mr Price, are charged with two counts of between 17 July 2016 and 24 July 2016 at Exmouth, being a public officer in the performance or discharge of the functions of his office or employment, corruptly made a false entry in a record, namely agenda item 11.3 of the Shire of Exmouth Ordinary Council Meeting of 27 July 2016.[1]
[1] The minutes of the meeting of 27 July 2016 are at pages 618 - 682 of the prosecution brief. The relevant agenda item, 11.3, is found at pages 637 - 639 of the prosecution brief.
So it is alleged each accused made two separate false entries in the Shire of Exmouth council meeting minutes of 27 July 2016.
The State alleges the entry in the minutes under the heading 'Officer's Recommendation':[2]
That council formally enter into a AS49062002 Minor Works Contract with Ocean Reefs Productions Pty Ltd for the design, installation and fitout of the aquarium at the Ningaloo Centre for the sum of $1,088,260 (inc GST),
and the entry under the heading 'Purpose':[3]
That council formally enter into a AS49062002 Minor Works Contract with Ocean Reefs Productions Pty Ltd (RORP) for the design, installation and fitout of the aquarium at the Ningaloo Centre for the sum of $1,088,260 (inc GST),
are false in two respects.
[2] Page 639.
[3] Page 637.
The first, which relates to counts 1 and 3, is that the entry is false because the contract with ORP had already been made, and secondly, which relates to counts 2 and 4, is that the contractor, ORP, was the only contractor available to perform the work, which would have been an exception to the requirement of s 3.75 of the Local Government Act 1995 (WA) and regulations, by which a local government must invite tenders before it enters into contracts for the supply of goods or services worth more than $150,000. The State alleges the entry is false because there were other contractors able to undertake the work and therefore the contract should have been put out to tender.
The State also points to the entry in the minutes which reads:[4]
To this end it is considered that there is no requirement for the calling of an additional tender for this work, based on the following clause contained with division 2 – tenders for providing goods and services section of the local governments (functions in general) Regulations 1996 –
Section 11(2)(f) the local government has good reason to believe that, because of the unique nature of the goods or services required or for any other reason it is unlikely that there is more than one potential supplier.
[4] Page 638.
The State also refers to the Shire's purchasing policy [5]which requires that tenders must be called for, for the supply of goods and services above the designated threshold (currently $150,000).
[5] Pages 227 – 229.
The regulations allow for exceptions to the requirement to hold public tenders, including where the unique nature of the goods or services means it is unlikely there is more than one potential supplier. The State alleges that each accused knew there was an alternative aquarium supplier named Advanced Aquarium Technologies (AAT) based in Queensland who would have been able to provide the aquarium. There was also, the State alleges, a further alternative aquarium supplier named Oceanis International based in Perth. Accordingly, the State submits the exception to the requirement for the Shire to hold a public tender prior to entering into the contract did not apply and the accused should have put the contract out to tender prior to contracting with ORP.
The State alleges the accused knew they should have put the contract out to tender and, by failing to do so, knew they were in breach of the Shire's purchasing policy.
The State alleges the contract with ORP for the design, installation and fitout of the aquarium at the Ningaloo Centre was entered into on 16 May 2016 at Mullaloo by Mr Forte on behalf of the Shire and a Mrs Hawke on behalf of ORP. Mr Forte later provided a copy of the executed contract to Mr Price who adopted and additionally signed the contract sometime prior to the end of June.
The Shire began making payments under the contract once each of the accused had executed it. On two occasions, 2 June and 27 June 2016, the Shire paid ORP $103,000 for the purchase of acrylic panels for use in the aquarium.
It is against that background the State alleges the entry made in the council meeting minutes is false in those two respects. The accused knew them to be incorrect and false. The entries were falsely made to hide that the accused had decided to enter into the contract without going to tender, which they knew was contrary to the Shire's legal and policy requirements. It was inappropriate conduct, which the State alleges is corrupt conduct.
At the time Mr Price was the chief executive officer of the Shire of Exmouth (the Shire) and Mr Forte was its strategic project officer. Mr Price had been employed as the chief executive officer since July 2010 and Mr Forte as the strategic project officer since November 2012, having been employed at the Shire since September 2011 in a different capacity.
The State alleges that between 2012 and 2016 each of the accused were the Shire officers primarily responsible for managing and coordinating the project for the design and construction of the Shire's Ningaloo Centre. Mr Forte was the superintendent for the project who reported to Mr Price.
In relation to Mr Forte the State relies on s 7(a), s 7(b), s 7(c) and s 7(d) of the Criminal Code. Although it was Mr Price who actually made the record, the State proceeds against Mr Forte on the basis that each of the accused were principals involved in a common endeavour doing different acts to achieve the same outcome. Alternatively, the State alleges that Mr Forte aided Mr Price, so that s 7(b) and s 7(c) applies, or procured or counselled Mr Price to make the false entries: s 7(d).

Section 31A Evidence Act application

By an application dated 11 March 2019 the State, pursuant to s 31A of the Evidence Act 1906 (WA), seeks leave to adduce evidence regarding the circumstances in which payments were made to Mr Forte by the Shire in respect of his home at Warren Way, Exmouth as a part of his remuneration package and the documentation created by Mr Price and Mr Forte in relation to those payments.

Proposed propensity evidence

By a letter from Mr Price, as the chief executive officer of the Shire of Exmouth, to Mr Forte of 21 October 2014, with an attached addendum signed by each accused, Mr Forte's remuneration package included 'provision of executive styled residence in accordance with council policy valued at $28,600'.[6] By policy number 2.7 adopted on 17 September 2009, under the heading 'Housing Entitlement, Specified Council employees are provided Council housing as part of their remuneration package'.[7] Mr Forte was a specified council employee.
[6] Section 31A application, page 0025.
[7] Section 31A application, page 0037.
The policy number 2.7 further provided:
Employee Housing Incentive Scheme
Where an employee is entitled to the provision of housing in accordance with this Policy but they choose to live in their own accommodation, the employee is entitled to receive the sum (cash dollar value) attributed to the housing subsidy provided by Council in their remuneration package (this is treated as a taxable allowance and regarded as taxable income for the employee).
Employees who choose to exercise this option are not entitled to rent or sub-let out the Council housing allocated to their position.[8]
(emphasis added)
[8] Section 31A application, page 0038.
The 'Council Employees Housing Policy No 1.26' dated 21 June 2012, includes the same clause.[9]
[9] Section 31A application, page 0041.
Over time various written fixed term tenancy agreements were prepared by Mr Price and signed by both Mr Price and Mr Forte.[10]
[10] Section 31A application, pages 0009 – 0019, 0020 – 0023, 0029.
From Mr Forte's bank account statements various amounts were paid to Mr Forte for the rent of the home owned by him.
The State submits the evidence establishes that Mr Forte and Mr Price created a scheme by which a housing subsidy was paid to Mr Forte as a non-taxable allowance by the Shire of Exmouth which was contrary, it is submitted, to the requirement of the Shire's employee's housing policy which entitled an employee, if they owned their own accommodation, to an allowance equivalent to the housing subsidy paid as a part of their remuneration package and forming part of their taxable income.
The State describes the proposed propensity evidence as 'a rental subsidy agreement' between Mr Forte and Mr Price.
It is submitted that because of the scheme created by Mr Forte and Mr Price, payments were made by the Shire to Mr Forte as purported payments of rent which was an untaxed payment rather than as a taxable allowance as required by the Shire's policy. It is submitted the scheme was a sham to avoid the express policy mandated by the Shire that the payment be a taxable allowance. The residential tenancy agreements were created as a pretext for the payments made by the Shire to Mr Forte and that Mr Price was a party to the scheme because he authorised each of the residential tendency agreements. It is submitted that the proposed evidence proves that the accused were prepared to act together to create a scheme that directly contravened the Shire's employee's housing policy which benefited Mr Forte by paying him an allowance that should have been taxed before it was paid to him. Sham documents were created to disguise what was actually occurring.
The State says whether tax was paid is not the issue and the State does not allege that tax was not paid. The State's allegation is that Mr Forte received an employment related payment contrary to the way in which it should have been paid in accordance with the Shire policy. It is alleged the payment was made in breach of the Shire policy. The documents, the purported tenancy agreements, were created, to cover or disguise the breach of policy.
The State submits the evidence is relevant as common law relationship evidence, but also proves that each of the accused had an ongoing tendency to act in breach of Shire policy and to misrepresent the truth to the Shire by creating false documents.
It is further submitted the evidence is evidence of other similar conduct when compared to the alleged offending and proves that each of the accused had a history of acting together to misrepresent the truth to the Shire which establishes, they had a tendency in the way in which they interacted with each other and with their employer, the Shire. The proposed evidence proves the attitude of each of the accused to each other and meets, it is submitted, the definition of 'relationship evidence' for the purposes of s 31A(1).

Issues at trial

The likely issues at trial will be whether the entries made in the minutes were in fact false and whether the accused knew the entries to be false. There is likely to be a further issue at trial as to whether when the entries were made the accused were acting corruptly. Did they knowingly make false entries to mask that they had entered into a contract with ORP in breach of the Shire's tender policy.

Official corruption

Each accused is charged pursuant to s 85(a) of the Criminal Code with corruptly making a false entry in a record.
'Corruption' is defined in s 83 as follows:
83.Corruption
Any public officer who, without lawful authority or a reasonable excuse —
(a)acts upon any knowledge or information obtained by reason of his office or employment; or
(b)acts in any matter, in the performance or discharge of the functions of his office or employment, in relation to which he has, directly or indirectly, any pecuniary interest; or
(c)acts corruptly in the performance or discharge of the functions of his office or employment,
so as to gain a benefit, whether pecuniary or otherwise, for any person, or so as to cause a detriment, whether pecuniary or otherwise, to any person, is guilty of a crime and is liable to imprisonment for 7 years.
The term 'corruptly' is not defined by the Criminal Code. The State submits the term is defined by the common law in the following passage from The State of Western Australia v Burke [2011] WASCA 190 [332]:
It is sufficient, for present purposes, to state that a government contractor who is a public officer will act 'corruptly' within s 83(c) if he or she, without lawful authority or a reasonable excuse, deliberately performs or discharges a function of his or her office or employment for an improper purpose, so as to gain a benefit, or so as to cause a detriment, to any person, at least where (as on the State's case in these prosecutions) the improper purpose involves a plan to deceive. See [278] ‑ [287], [295] ‑ [298] above.
The State submits that the concept of 'corruptly' depends on a state of mind. The conduct must be deliberate and motivated by improper purpose. As such the conduct must have been intended to deceive.
The State case is that the accused knew that their actions when entering into the aquarium building contract were in contravention of the Local Government Act and the Shire policy and they deliberately chose to disregard those requirements. The false agenda record was created to disguise what had occurred. The State submits that the accused had an established relationship between them or a tendency to create, submit and rely on false documents presented to the Shire. The State submits that the proposed s 31A evidence proves that the accused were prepared to act together to devise and then implement a scheme that contravened the express policies of the Shire. That they colluded together to devise and implement a scheme which contravened their employer's express policies. Further, that they were prepared to create false records to mask or disguise their activities.

The legislation

Section 31A of the Evidence Act reads:
31A. Propensity and relationship evidence
(1)In this section —
propensity evidence means —
(a)similar fact evidence or other evidence of the conduct of the accused person; or
(b)evidence of the character or reputation of the accused person or of a tendency that the accused person has or had;
relationship evidence means evidence of the attitude or conduct of the accused person towards another person, or a class of persons, over a period of time.
(2)Propensity evidence or relationship evidence is admissible in proceedings for an offence if the court considers —
(a)that the evidence would, either by itself or having regard to other evidence adduced or to be adduced, have significant probative value; and
(b)that the probative value of the evidence compared to the degree of risk of an unfair trial, is such that fair‑minded people would think that the public interest in adducing all relevant evidence of guilt must have priority over the risk of an unfair trial.
(3)In considering the probative value of evidence for the purposes of subsection (2) it is not open to the court to have regard to the possibility that the evidence may be the result of collusion, concoction or suggestion.
All relevant evidence is admissible subject to the evidentiary laws which exclude it. Evidence is relevant if it has the capacity to rationally affect the assessment of the probability of a fact in issue.
In DKA v The State of Western Australia [2017] WASCA 44 [30] the Court of Appeal explained what is meant by the expression 'has significant probative value' as follows:
As to whether evidence has significant probative value, the following is well‑established:
(a)Evidence has 'probative value' if the evidence could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue.
(b)The test in s 31A(2)(a) will be satisfied if the court 'considers' (that is, thinks) that the propensity evidence 'would' (as distinct from could), either by itself or having regard to other evidence adduced or to be adduced, rationally affect, to a significant extent, the assessment of the probability of the existence of a fact in issue.
(c)The adjective 'significant', in the phrase 'significant probative value' in s 31A(2)(a), connotes 'important' or 'of consequence'.
(d)If propensity evidence has 'probative value' then whether the probative value is 'significant' will depend upon the nature of the fact in issue to which it is relevant, and the significance or importance which the propensity evidence, either by itself or having regard to other evidence adduced or to be adduced, has in proving that fact.
The court at [31] – [32] explained the weighing process which must be undertaken if it is determined that the evidence has significant probative value:
31.The authorities establish the following points as to the comparison required by s 31A(2)(b). First, s 31A(2)(b) requires the court to assess the degree of risk of unfairness at trial that will be occasioned by the admission of the evidence in question, the court having already found under s 31A(2)(a) that the evidence has significant probative value. Secondly, when assessing the risk of an unfair trial for this purpose, the court must take into account any directions that might be given to the jury in an attempt to overcome the prejudice, and their likely effect on the jury. Thirdly, after identifying the probative value of the evidence in question and the degree of risk of an unfair trial, the court must consider the conclusion that fair-minded people would draw from a comparison of these issues. Although fair-minded people are reasonable members of the general community who are not lawyers, it must be assumed that such people have informed themselves of 'at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances'.
32The weighing process required by s 31A(2)(b) is a difficult one, as it requires the weighing of things that are incommensurable in the framework of the construct of the hypothetical fair‑minded person.
The Court of Appeal in La Bianca v The State of Western Australia [2019] WASCA 105 has recently restated the proper approach to determining whether evidence meets the tests required by s 31A and, relevantly, whether the evidence has 'significant probative value'. At [22] – [26] the court said:
22.A court may decide, in a particular case, that the tests in s 31A(2)(a) and s 31A(2)(b) are satisfied in relation to proposed 'propensity evidence' (as defined in s 31A(1)) provided that the evidence is admitted solely for a particular or limited purpose. Further, a court may decide, in a particular case, that the test in s 31A(2)(b) is satisfied in relation to proposed 'propensity evidence' (as defined in s 31A(1)) provided that the trial judge gives the jury a specific direction or directions in relation to the evidence. See Daniels v The State of Western Australia.
23In Dair v The State of Western Australia, Steytler P said in relation to the concept of 'significant probative value' within s 31A(2)(a):
The evidence in question must obviously be relevant before it can be admitted into evidence. That is to say, it must be such as could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in the proceeding: Goldsmith v Sandilands [2002] HCA 31; (2002) 76 ALJR 1024 [2] (Gleeson CJ); Phillips v The Queen [2006] HCA 4; (2006) 225 CLR 303 [50]. It could otherwise have no probative value, let alone 'significant' probative value.
Before evidence can have significant probative value it must be such as 'could rationally affect the assessment of the probability of the relevant fact in issue to a significant extent: ie, more is required than mere … relevance': Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171, 175 - 176. Heydon [21245] suggests that significant probative value is something more than mere relevance but something less than a 'substantial' degree of relevance and that it is a probative value which is 'important' or 'of consequence'. He makes the point that the significance of the probative value of tendency evidence must depend on the nature of the facts in issue to which it is relevant and the significance or importance which that evidence may have in establishing the fact: Lockyer (1996) 89 A Crim R 457, 459; Lock (1997) 91 A Crim R 356, 360 - 361; Fordham (1997) 98 A Crim R 359, 370; Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886; (2000) 106 FCR 51 [77] - [82]; The State of Western Australia v Osborne [2007] WASCA 183 [13].
24So:
(a)Evidence has 'probative value' if the evidence could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue.
(b)The test in s 31A(2)(a) will be satisfied if the court 'considers' (that is, thinks) that the propensity evidence 'would' (as distinct from could), either by itself or having regard to other evidence adduced or to be adduced, rationally affect, to a significant extent, the assessment of the probability of the existence of a fact in issue.
(c)The adjective 'significant', in the phrase 'significant probative value' in s 31A(2)(a), connotes 'important' or 'of consequence'.
(d)If propensity evidence has 'probative value', then whether the probative value is 'significant' will depend upon the nature of the fact in issue to which the evidence is relevant, and the significance or importance that the propensity evidence, either by itself or having regard to other evidence adduced or to be adduced, has in proving that fact.
25.In Dair, Steytler P made these points about the comparison which s 31A(2)(b) requires [62] - [67]. First, s 31A(2)(b) requires the court to assess the degree of risk of unfairness at trial that will be occasioned by the admission of the evidence in question, the court having already found under s 31A(2)(a) that the evidence has significant probative value. Secondly, when assessing the risk of an unfair trial for this purpose, the court must take into account any directions that might be given to the jury in an attempt to overcome the prejudice, and their likely effect on the jury. Thirdly, after identifying the probative value of the evidence in question and the degree of risk of an unfair trial, the court must consider the conclusion that fair-minded people would draw from a comparison of these issues. Although fair-minded people are reasonable members of the general community who are not lawyers, it must be assumed that such people have informed themselves of 'at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances': Johnson v Johnson.
26.A number of other observations may be made about s 31A including, in particular, the phrase 'significant probative value':
…
(b)For the purpose of determining its admissibility, the court must take the proposed propensity evidence at its highest from the perspective of the prosecution. See Donaldson v The State of Western Australia; DKA [35].
(c)The significance of the probative value of proposed propensity evidence depends on the nature of the facts in issue to which the proposed propensity evidence is relevant, and the significance or importance which that evidence may have in establishing those facts. In other words, to be admissible the proposed propensity evidence must be influential in the context of fact‑finding. See IMM [46] (French CJ, Kiefel, Bell & Keane JJ).
(d)Proposed propensity evidence will have probative force if it increases the probability that the accused committed the charged acts.
(e)The question whether, in a particular case, proposed propensity evidence has significant probative value may depend on the degree of generality or specificity with which the propensity is identified. On the one hand, a propensity which is identified at a high level of generality will, ordinarily, be an obstacle to its having significant probative value. On the other, in general, the closer and more particular the similarity between the alleged propensity and the alleged charged acts, the greater the likelihood that the proposed propensity evidence will have significant probative value. See El‑Haddad v The Queen and the cases there cited; DKA [42].
(f)However, even where a propensity is identified at a high level of generality, it is necessary to examine the proposed propensity evidence in detail in the course of determining whether, of itself or having regard to other evidence adduced or to be adduced, the evidence in question is properly characterised as having significant probative value. The matters which must be examined include the nature, quality, extent and duration of the conduct the subject of the proposed propensity evidence, on the one hand, and the nature, quality, extent and duration of the charged acts, on the other, and the nature and extent of any rational connection between the conduct the subject of the proposed propensity evidence and the charged acts. See DKA [43].
(emphasis added & footnotes omitted)

State's submissions

The State says that both the proposed propensity evidence and the evidence directly relevant to the creation of the agenda item in the minutes demonstrates:
(a)that the accused were prepared to act in direct contravention of the Shire's express policies;
(b)that they had entered into the contract with ORP without going to tender, which was in breach of the Shire's requirements;
(c)that they were prepared to be a party to creating false documents submitted to the Shire to achieve their objective;
(d) they knew that if the true situation was revealed, their reputations and careers would be damaged and their objective or motivation for creating the false agenda item was to hide or disguise what they had done; and
(e)their actions together, were, in those circumstances improper and corrupt.
The State submits that the proposed tendency evidence makes it more likely that they colluded together to create the false agenda item because of their past relationship in creating false documents presented to the Shire.
It is also submitted that the proposed evidence rebuts an innocent explanation for the false entry. If the State is not permitted to lead the proposed evidence the jury would be left with a false impression that because each of the accused were senior, long-term local government employees, with an unblemished work history, they would be unlikely to corruptly submit an official record which was false.

Defence submissions

Each accused submit that the proposed s 31A evidence is insufficient to establish the tendency or relationship contended by the State. It is submitted on behalf of Mr Forte that the proposed evidence does not prove that Mr Forte implemented a scheme to contravene express policies of the Shire. Each accused submits the proposed evidence is not significantly probative that the accused, acting together, acted corruptly to create the false agenda item.
In their written submissions, the accused emphasise that the State seeks to adduce evidence of the accuseds' purported tendency to misrepresent the truth to the Shire of Exmouth by seeking to prove an uncharged act within the trial for a charged act. It is submitted that the proposed evidence, at its highest, establishes that payments may have been made to Mr Forte in a manner contrary to the relevant Shire policy but not why or that tax was not paid on any payments made. It is submitted that the proposed evidence is insufficient to establish the factual basis of the prior conduct contended for by the State.
It is also emphasised that there is a difference between engaging in conduct that contravenes a Shire policy, without any evidence of acting corruptly, and corruptly making false representations to the council with the intention of covering up deliberate non-compliance with the Shire policy. It is submitted the proposed propensity evidence does not permit a finding that the actions of Mr Price were done with any corrupt intent. There is no evidence that Mr Price benefited from the payments made to Mr Forte.
It is also submitted that dealings between Mr Price and Mr Forte regarding Mr Forte's employment entitlements do no more than demonstrate part of the ordinary course of Mr Price's duties in his position as chief executive officer of the Shire.
It is submitted that the proposed evidence is not significantly probative of whether false entries were made to the agenda item 11.3 in the minutes of 27 July 2016 and if so, whether the accused together acted corruptly when the entry was made. The proposed evidence is not significantly probative of whether the accused acted corruptly as alleged in the indictment or at any time prior to it. There is no evidence of any benefit to Mr Price arising from the proposed evidence nor evidence of loss to the Shire. It is submitted the State attempts to elevate the earlier alleged improper conduct to a level unsupported by the evidence which does not establish why the housing subsidy payments were made in the manner in which they were made or that they resulted in payments not being subject to taxation, or not being treated as a taxable allowance. The evidence does not establish any improper purpose for the previous conduct of the accused. Even if the payments were made contrary to the Shire's policy that the payments be regarded as taxable income that does not, it is submitted, prove an improper purpose by either of the accused or that together they previously acted improperly or corruptly.
It is further submitted that it is likely that the time taken to lead and prove the proposed propensity or tendency will take at least as much time as the trial of the charges on the indictment, effectively resulting in a trial within a trial. It is also submitted that those matters will be a significant distraction for the jury.
Finally, it is submitted that the proposed evidence creates a risk of a jury reasoning on a boots strap basis, that is, there is a risk that the alleged corrupt nature of the conduct the subject of the charged acts is thought to explain the previous conduct surrounding the housing subsidy payments thereby improperly making that conduct relevant. It is submitted that because the evidence of the previous conduct is not sufficiently explained and why it occurred, there is a real risk a jury might improperly reason that the alleged corrupt nature of the conduct the subject of the indictment provides an explanation of why the earlier conduct was corrupt.

Analysis

To determine whether the proposed propensity evidence does have significant probative value it is necessary to determine what are the likely issues at trial and what must be proved by the State. It is further necessary to determine how the alleged propensity is relevant to the alleged charge, i.e, is there a similarity between the alleged propensity and the alleged charged acts. Is there a rational connection between the alleged propensity and the alleged charged acts. I have regard to what was said in La Bianca v The State of Western Australia at [26].
For the State to prove the charges on the indictment against each accused the State will need to prove beyond reasonable doubt:
(a)the entry, or entries, in the agenda item was or were false;
(b)each of the accused was a party to creating that entry;
(c)each accused, when the entries were created, knew the entries to be false;
(d)when each of the accused entered into the contract on behalf of the Shire with ORP they were in breach of, and knew they were in breach of, the council policy requiring tenders to be called for before entering into the contract;
(e)that when the agenda item was created they had already entered into the contract; and
(f)they deliberately created the false entry to hide or disguise that they had already entered into a contract with ORP knowing it was in breach of Shire policy.
In my view, if the jury are satisfied that each of the accused knowingly breached the Shire policy by entering into the contract with ORP, before the agenda item was created, it would seem to follow the jury will conclude the entry in the agenda item was false and, further, that the false entry was made to cover up the knowing breach of the Shire policy. Seen in that way the State case is relatively straight forward and simple.
Assuming, but without deciding, the proposed propensity evidence does establish the accused entered into a scheme by which Mr Forte benefited by the rental payments made to him not being regarded as taxable income, which was in breach of Shire policy, and that the accused created false documents to hide or disguise that activity, the evidence has no part to play in the proof of the facts in issue at the Trial. If the jury are satisfied of the matters set out in [49] above, it seems likely the jury will convict the accused of the charges, irrespective of any other alleged corrupt conduct. In my view no matter how long their record as Shire employees and no matter how competently and diligently they may have appeared to have performed their duties over that time, if on this occasion they engaged in a course of conduct which they knew was in breach of a Shire policy and then created a false record to hide or disguise that activity, it is likely the jury will be satisfied that behaviour was done for improper purposes and was therefore corrupt and they will accordingly convict the accused.
In my view, if the accused have previously engaged in a course of conduct which was in breach of a Shire policy, and from which only one of them benefited, and false council records were created to hide that activity, such conduct is not significantly probative of the offending alleged on the indictment. It is not significantly probative of whether the accused entered into a contract in relation to the construction of the Ningaloo Centre Aquarium knowing it was in breach of the Local Government Act and the Shire policy requiring such a contract to be put out to tender, and then deliberately created a false entry in the council meeting minutes for the purpose of disguising that they had already entered into the contract, motived by wanting to prevent damage to their reputations and careers. I consider the conduct the subject of the alleged offending on the indictment is of a different character and kind than the earlier conduct, even if it is accepted such conduct was improper, and therefore is not significantly probative of any of the likely issues at trial.
There is no rational connection between the alleged propensity to engage in corrupt conduct by creating a scheme, which includes preparing false rental agreements in relation to an employee's employment contract entitlements, in breach of Shire policy, and deliberately entering into a major infrastructure project in excess of $1 million with a contractor in breach of Shire policy and then preparing false entries in the Shire's public records of a public meeting to hide or disguise that activity. While there is some similarity between the actions, in that Shire policy was deliberately breached and false documentation was created to hide that activity, the entering into a major infrastructure contract in breach of Shire policy is fundamentally different from creating a scheme by which an employee might have received a benefit to which he was not entitled as a part of his salary package.
Counsel for the State characterised the other conduct as corrupt on the basis that the accused colluded together to falsify council documents to achieve a benefit for Mr Forte by receiving money to which he was not entitled which should have been the subject of tax payments[11]. The State does not submit that the conduct is a 'tax dodge'.[12] Essentially, the State submits that the other conduct is of such a nature that it is to be regarded as corrupt conduct. Therefore that raises an issue whether if the State is permitted to adduce evidence of that earlier conduct, it would be necessary to direct the jury that they must be satisfied beyond reasonable doubt that the conduct was corrupt before they could use or rely on it.
[11] ts 36.
[12] ts 36 – 37.
In my view, the State case on the counts on the indictment as to what it will need to prove is relatively simple. The State must prove beyond reasonable doubt that when they entered into the contract with the Aquarium building contractor ORP the accused knew that they were in breach of the Shire policy because they knew they were legally required to go out to tender and entered into the contract knowingly in breach of those legal requirements and Shire policy.
The State will then need to prove beyond reasonable doubt that the accused created a false record which intentionally falsely represented they had not already entered into the contract on behalf of the Shire and also falsely represented that there was no requirement to go out to tender. The State will need to prove that that false record was created to hide their activities. The creation of the false record was corrupt because it was created to hide their activities which were knowingly in breach of the Shire's legal requirements and their policy requirements.
The simplicity of the State case explained in that way is to be contrasted with what I regard as the complexity of proving the earlier conduct and the alleged collusion to create a scheme, which included the creation of false Shire documentation to hide the scheme, by which Mr Forte corruptly received a benefit to which he was not entitled. Even were I to accept the State's submission that the proposed evidence does establish a tendency by the accused to engage together in corrupt conduct and a tendency and preparedness to create false Shire documentation to hide that conduct, those allegations will in my view be much more difficult for the jury to understand. Although there are some similarities between that other conduct and the conduct alleged on the indictment, there are also significant differences, including the purpose for creating false documentation. The documentation is different. The benefit to be arguably gained by the conduct is different. It is not alleged that Mr Price benefited from the earlier conduct. In contrast, it is alleged they both benefited from the conduct alleged in the indictment by protecting themselves against potential damage to their careers and reputations if the true position became known, that is, that they deliberately entered into a contract knowing it was in breach of the Shire's legal and policy requirements.
In my view, if the State was permitted to lead the proposed propensity evidence there is a very real risk the jury would become confused as to the issues and be diverted and distracted from the issues they were required to determine. I am also concerned that because the evidence of the other conduct is potentially more complex and more voluminous than the evidence directly relevant to the alleged conduct on the indictment, the jury would be swamped by the evidence.
There is also a risk that although neither accused have been charged with any other alleged corrupt conduct, the jury would be left with the impression that there is a long history of the accused acting together in a corrupt way which would lead them to impermissibly reason that the accused were therefore guilty of the conduct alleged on the indictment.
It is one thing to engage in a scheme which included the creation of false documentation for the purpose of benefiting one of the accused to obtain a relatively minor benefit to which he was not entitled, but it is quite another thing to deliberately enter into a major infrastructure project and create a false public record for a Shire meeting for the purpose of disguising knowingly unlawful behaviour from which neither accused would apparently benefit, apart for protecting their reputations and careers. While I accept that the proposed propensity evidence might establish that the accused were prepared to create false Shire documents for their own purposes and to hide or disguise their activities, I am not persuaded it is significantly probative of whether the accused created false entries on the occasion alleged in the counts on the indictment.
The proposed propensity evidence does not establish an ongoing course of conduct, or a pattern of similar conduct.
If the State proves that the accused entered into the contract with ORP knowing it was in breach of the Shire's legal and policy requirements, it seems to me it will be a relatively straightforward step to then prove that the agenda item was a false entry, and was a deliberately false entry, made for the purpose of hiding or disguising the accuseds' activities. In those circumstances the fact that the accused may have also on earlier occasions created false Shire records to hide their activities is not significantly probative of whether they created a false record on this occasion to hide their activities. The fact that the accused may have had an established relationship by which they were prepared to act together in breach of Shire policy and create false documents to hide that activity, does not establish, or is not significantly probative of, whether on the occasion alleged on the indictment they also created a false document. A false agenda item in the minutes of a public shire council meeting is quite different to false rental agreements relevant to an employee's employment records.
Nor is the proposed propensity evidence significantly probative of whether the accused entered into the contract with ORP knowing they were in breach of Shire policy.
In summary, in my view, the proposed propensity evidence does not have significant probative value relevant to the likely issues in the trial.

The degree of risk of an unfair trial

In case I am wrong in my conclusion that the proposed propensity evidence does not have significant probative value in relation to the likely issues at trial I turn to consider whether, for the purposes of s 31A(2)(b), the probative value of the evidence compared to the degree of risk of an unfair trial is such that fair-minded people would think that the public interest in adducing all relevant evidence of guilt must have priority over the risk of an unfair trial.
I have earlier observed I have a concern the proposed propensity evidence will be so confusing to the jury and it will distract or divert them from the issues they will be required to determine at the trial as I have earlier summarised them. There is a risk that they will be caught up in determining a trial within a trial. There is a risk they will be required to determine whether the accused have on earlier occasions engaged in corrupt conduct by creating false documents to hide their activities, with which the accused have not been charged, before then determining whether they are guilty of the alleged corrupt conduct the subject of the counts on the indictment. There is a risk the jury might be left with a feeling there was a taint of corrupt conduct arising out of the accuseds' earlier dealings from which the jury would impermissibly reason they were guilty of the corrupt conduct alleged on the indictment.
There is something unsatisfactory about the State being permitted to rely upon alleged corrupt conduct with which the accused have not been charged as part of its proof that the accused are guilty of corrupt conduct with which they have been charged.
There is a risk that the jury would be swamped by documentation, some of which is only relevant to the proposed propensity evidence, and some of which is only relevant to the charges on the indictment.
Further, in my view, it is not so clear that the housing subsidy payments were made in such a way as to be contrary to the Shire's policy that such payments be made as a part of Mr Forte's taxable income. Nor in my view is the evidence so clear that it establishes the accused acted with any improper purpose. That is to be contrasted with the evidence relevant to the conduct alleged on the indictment which, on its face, more clearly evidences corrupt conduct. There is in my view a risk that the jury might reason that because the conduct alleged on the indictment is corrupt conduct, the earlier alleged conduct must also be corrupt conduct which therefore enables the jury to be satisfied beyond reasonable doubt that the conduct alleged on the indictment was corrupt conduct.
I also have difficulty determining what direction could be given to the jury if the proposed evidence was admitted which could properly guard against the risk of an unfair trial. In my view such a direction would need to tell the jury that before they could use the evidence they would need to be satisfied beyond reasonable doubt that each of the accused had previously engaged in corrupt conduct during which they were complicit in or colluded to create false Shire records to hide their activities which they knew were in breach of council policy.

They would further need to be satisfied before reasonable doubt that the evidence established a tendency or propensity to engage in corrupt conduct by creating false Shire records and a preparedness to act on that tendency or propensity by again engaging in corruptly creating false Shire records the subject of the counts on the indictment.
In my experience such directions are apt to confuse. They are far more readily understandable where the propensity is of a similar kind or similar character to the conduct alleged on the indictment such as sexual or drug offending. In this case where different documentation will be required to prove the alleged propensity from the documentation to prove the conduct alleged on the indictment and, as I explained, the conduct involved in each case is of a different character, if it is accepted in each case false documentation or false entries in documentation has or have been created, even if a jury direction can be crafted, there is a significant risk it is more likely to confuse the jury than to assist the jury in focusing on and determining the issues at trial as alleged on the indictment.
In my view, the risk of prejudice in admitting the proposed evidence outweighs the public interest in adducing the evidence to an extent that cannot be adequately addressed by a direction of the trial judge. There is an impermissible risk that the jury might reason that the accused were guilty of other corrupt conduct with which they have not been charged in determining whether they are guilty of the corrupt conduct alleged on the indictment.
Further, I am of the view that there is a risk that the jury would be distracted by the proposed propensity evidence and be diverted from determining the main issues in relation to the alleged corrupt conduct the subject of the counts on the indictment which adds to the risk of prejudice and from which I conclude that that risk outweighs the public interest in adducing all relevant evidence of guilt such that it cannot be permitted to have priority over the risk of an unfair trial.
In summary, I dismiss the State's application to lead the proposed propensity evidence. The State is not permitted to lead the evidence.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
KG
Associate to Judge Herron
9 AUGUST 2019