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10
Court of Criminal Appeal 29 April 2015

R v Seller; R v McCarthy

[2015] NSWCCA 76

Also reported as (2015) 89 NSWLR 155
Fraud & dishonesty
APPEAL EVIDENCE WITNESSES EXAMINATION OF WITNESS CRIMINAL LAW DUTIES OF PROSECUTOR LEGAL PROFESSIONAL PRIVILEGE

Citation: R v Seller; R v McCarthy [2015] NSWCCA 76
Court: NSW Court of Criminal Appeal
Date: 29 April 2015
Judges: Bathurst CJ, Fullerton J, Bellew J

Background

The two respondents were charged with conspiracy to dishonestly influence the Commissioner of Taxation in connection with tax minimisation schemes they promoted between 1999 and 2003. The Australian Crime Commission (ACC) had investigated those schemes and, between May and September 2007, conducted compulsory examinations of each respondent under the Australian Crime Commission Act 2002 (Cth). A key ATO officer seconded to the ACC, referred to here as the proposed prosecution witness, was present at some of those examinations and had access to the resulting transcripts and materials.

At the close of the examinations, directions were made restricting distribution of the transcripts to prosecution authorities. Those directions were breached on 18 December 2007, when the transcripts were disseminated to the Commonwealth Director of Public Prosecutions (CDPP) and stored electronically. The current prosecution team subsequently provided assurances that they had not read the compulsorily acquired material.

At trial, the respondents sought, among other things, an order prohibiting the proposed witness from giving evidence, a temporary stay pending appointment of a fresh prosecution team, and a permanent stay on the basis that the compulsory examinations had been conducted for an improper purpose and that the dissemination had fundamentally altered the accusatorial process. The primary judge excluded the proposed witness but declined to remove the prosecution team or grant any stay. Both the Crown and the respondents appealed.

  • Whether the Crown was competent to appeal under s 5F(2) of the Criminal Appeal Act 1912 (NSW), given the limitation in s 5F(3A) on appeals against evidentiary decisions
  • Whether an order prohibiting a person from giving evidence altogether is a "decision on the admissibility of evidence" or a broader interlocutory order
  • Whether the primary judge erred in prohibiting the proposed witness from giving evidence, where his proposed evidence did not directly depend on or derive from the compulsorily acquired material
  • Whether the prosecution had discharged its duties of disclosure and fairness given the unlawful dissemination of compulsorily acquired material
  • Whether legal professional privilege was properly maintained and whether its maintenance warranted adverse inferences or a stay
  • Whether a temporary or permanent stay of the proceedings was warranted

Decision

Competency of the Crown appeal. The Court held that s 5F(3A) limits appeals only against decisions on the "admissibility of evidence." As a matter of substance rather than form, an order prohibiting a person from giving evidence at all goes beyond a ruling on admissibility. The order against the proposed witness was therefore an interlocutory order within s 5F(2), and the Crown appeal was competent.

Exclusion of the proposed witness. The Court upheld the exclusion, applying the principles from X7 v Australian Crime Commission [2013] HCA 29 and Lee v R [2014] HCA 20. The central question was not merely whether the witness's proposed evidence derived from compulsorily acquired material, but whether his giving evidence would alter the accusatorial process in a fundamental way. The Court found that the proposed witness had been assisted in his analytical work by access to the compulsorily acquired material, that his evidence would carry a significant portion of the prosecution's documentary case, and that cross-examination of him would have placed defence counsel in an invidious position, potentially forcing them to avoid lines of questioning that might expose or trespass upon compulsorily acquired information. These factors, taken together, established that permitting the evidence would fundamentally distort the balance between the State and the accused.

Prosecution duties and document production. The Court was satisfied that the prosecution had discharged its duties. The dissemination had been disclosed, the current prosecution team had provided credible assurances of not having read the material, and prosecuting counsel's overriding duty of disclosure would have required revelation of any connection between the privileged documents and the compulsorily acquired material had one existed. No further production of documents was required, and the Court proceeded to consider the stay question on the available material.

Legal professional privilege and stay applications. The Court rejected the submission that maintaining privilege gave rise to an adverse inference inconsistent with the Crown's denial of indirect disclosure. The independent role of prosecution counsel in framing charges and settling the Crown case statement was a material consideration. On the stay applications, the Court declined to grant either a temporary or permanent stay. The unlawful dissemination, while serious, had not so fundamentally altered the accusatorial process as to warrant a permanent stay, particularly given that the current prosecution team had not read the material and the proceedings did not depend on the compulsorily acquired evidence.

Orders Made

  • The Crown appeal was dismissed.
  • Each respondent was granted leave to appeal on grounds 1 and 3 to 9 of their respective further amended notices of application for leave to appeal filed 3 October 2014, but those appeals were also dismissed.

Key Takeaways

  • An order prohibiting a witness from giving evidence altogether is, as a matter of substance, an interlocutory order under s 5F(2) of the Criminal Appeal Act 1912 (NSW), and is not merely a "decision on the admissibility of evidence" subject to the s 5F(3A) restriction on Crown appeals.

  • Where a proposed prosecution witness was present during compulsory examinations of an accused or had access to compulsorily acquired material, the determinative question is not whether that witness's proposed evidence is directly derived from the compulsorily acquired material, but whether permitting that evidence would fundamentally alter the accusatorial process inherent in a criminal trial.

  • The Court of Criminal Appeal confirmed that the accused's right to challenge a prosecution witness through cross-examination is a relevant consideration: constraints that would foreseeably prevent defence counsel from fully testing a witness's evidence, due to the risk of exposing compulsorily acquired information, form part of the unfairness analysis.

  • Unlawful dissemination of compulsorily acquired material to prosecution authorities does not automatically warrant a permanent stay. The Court assessed whether the dissemination had so fundamentally corrupted the process that no remedy short of a stay could suffice, and found it had not, where the current prosecution team remained untainted and the proceedings were independent of the compulsorily acquired material.

  • Prosecuting counsel's overriding duty of disclosure operates as a constraint that limits adverse inferences from maintained legal professional privilege: if privileged material revealed any connection to compulsorily acquired information, disclosure would have been required regardless of privilege status.

Legislation and Cases Referenced

Legislation:
- Australian Crime Commission Act 2002 (Cth)
- Criminal Appeal Act 1912 (NSW), ss 5F(2), 5F(3A)
- Criminal Code Act 1995 (Cth)
- Evidence Act 1995 (NSW)
- National Crime Authority Act 1984 (Cth)
- New South Wales Crime Commission Act 1985 (NSW)
- Telecommunications (Interception and Access) Act 1979 (Cth)

Key Cases:
- X7 v Australian Crime Commission [2013] HCA 29; 248 CLR 92
- Lee v R [2014] HCA 20; 88 ALJR 65
- R v Cheikho [2008] NSWCCA 191; 75 NSWLR 323
- Lee v New South Wales Crime Commission [2013] HCA 39; 251 CLR 196
- Mann v Carnell [1999] HCA 66; 201 CLR 1
- Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543
- Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248; 4 VR 501
- Commissioner of Australian Federal Police v Zhao [2015] HCA 5
- R v Seller; R v McCarthy [2013] NSWCCA 42
- R v Seller; R v McCarthy (No 3) [2014] NSWSC 1290
- R v Seller; R v McCarthy (No 4) [2014] NSWSC 1369