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Supreme Court 6 August 2014

R v Dickson; R v Issakidis (No 2)

[2014] NSWSC 1078

Fraud & dishonesty
CRIMINAL LAW TENDERED OF DOCUMENT NO QUESTION OF PRINCIPLE.

Citation: R v Dickson; R v Issakidis (No 2) [2014] NSWSC 1078
Court: Supreme Court of New South Wales
Date: 6 August 2014
Judge(s): Beech-Jones J

Background

This decision is an interlocutory evidentiary ruling arising from a criminal trial involving two accused, Dickson and Issakidis. The Crown case centred on an alleged scheme relating to a transaction known as the "Neumedix transaction," described in the earlier ruling R v Dickson; R v Issakidis (No 1) [2014] NSWSC 1068.

The Crown sought to tender documents relating to a separate but structurally similar arrangement, the "Nilnav transaction," which originated around 2002 to 2003. The Crown acknowledged that it could not establish, and would not assert, that any depreciation deductions claimed in connection with the Nilnav transaction were bogus.

The immediate question before the court was whether two specific documents (appearing at pages 83 and 1022 of a folder marked MFI 2) were admissible. Those documents consisted of a cash flow diagram of the Nilnav transaction, accompanied by a note stating the diagram was not to be provided to the Australian Taxation Office and raising concerns about confidentiality.

  • Whether the Nilnav transaction documents were relevant to the Crown's case concerning the Neumedix transaction
  • Whether the heading "This diagram not to be provided to ATO" should be excluded or redacted under s 137 of the Evidence Act 1995 (NSW) on the basis of unfair prejudice
  • Whether evidence referable to the Nilnav transaction could be admitted on a coincidence basis under s 98 of the Evidence Act 1995 (NSW) (left to be determined later)
  • Whether evidence of the acts and declarations of an alleged co-conspirator is admissible against each accused, in accordance with the principles in Ahern v R (to be determined as the trial proceeds)

Decision

His Honour held that the two documents were clearly relevant. Evidence before the court indicated that the Neumedix transaction had its origins in the Nilnav transaction, and that communications about the Neumedix transaction appeared to proceed on the basis of a shared understanding of how the Nilnav transaction had operated. A document explaining aspects of the Nilnav structure was therefore relevant to the Crown's case.

The court considered whether the words "This diagram not to be provided to ATO" ought to be redacted under s 137 of the Evidence Act 1995 (NSW), which permits exclusion of evidence whose probative value is outweighed by the danger of unfair prejudice. The Crown Prosecutor confirmed he could not identify a specific fact he was seeking to prove by those words. Beech-Jones J declined to order redaction, but on the condition that the Crown, at an appropriate time, make clear that those words are to be understood in light of the accompanying note about confidentiality concerns rather than as evidence of a more sinister purpose. If the Crown intended to use those words differently, it would need to raise that with the court in advance.

On the broader coincidence evidence question under s 98, the court noted that the parties had deferred the admissibility debate for material that rests solely on coincidence reasoning. That question was anticipated to arise in the very near term. The court also noted the reservation of counsel for Issakidis that any co-conspirator evidence would need to be assessed in accordance with Ahern v R.

Orders Made

  • Pages 83 and 1022 of MFI 2 were admitted into evidence.
  • The Crown's application for a ruling on the admissibility of pages 734, 735 and 918 to 1007 of MFI 2 was deferred.

Key Takeaways

  • A document relating to a separate but structurally analogous transaction was held relevant where the evidence showed the primary transaction under examination had its origins in, and was discussed by reference to, that earlier transaction.
  • Under s 137 of the Evidence Act 1995 (NSW), the court declined to redact potentially prejudicial words from a document where those words could be contextualised by an accompanying note, while placing a condition on the Crown about how it could use that material going forward.
  • The admissibility of evidence that depends solely on coincidence reasoning under s 98 of the Evidence Act 1995 (NSW) was expressly deferred, signalling that the court will require a separate, focused ruling on that issue.
  • Counsel for one accused reserved the right to be heard before any coincidence reasoning ruling was made, and preserved the Ahern v R objection concerning co-conspirator evidence, illustrating that such reservations are procedurally available in a running trial.
  • No final ruling was made on the full scope of Nilnav transaction evidence; this decision resolved only the admissibility of the two specific documents identified by the parties as not solely dependent on coincidence reasoning.

Legislation and Cases Referenced

Legislation
- Evidence Act 1995 (NSW), s 98 (coincidence evidence), s 137 (exclusion of prejudicial evidence)

Cases
- Ahern v R [1988] HCA 39; 165 CLR 87
- R v Dickson; R v Issakidis (No 1) [2014] NSWSC 1068