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Supreme Court 18 June 2019

R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 4)

[2019] NSWSC 1286

Fraud & dishonesty
EVIDENCE HEARSAY EXCEPTIONS EVIDENCE INADMISSIBLE

Citation: R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 4) [2019] NSWSC 1286
Court: Supreme Court of New South Wales
Date: 18 June 2019
Judge(s): Fullerton J

Background

Three accused faced criminal proceedings arising from an alleged conspiracy connected to a coal exploration licence release at Mount Penny. The prosecution alleged that a former government minister and members of a prominent family conspired to misconduct in public office.

A key witness, Mr Alan Fang, had given evidence before ICAC in February 2013 during a public inquiry known as Operation Jasper. By the time of the criminal trial, Mr Fang was living in China and unwilling to return to Australia or give evidence by audio-visual link.

The Crown applied to tender edited extracts of Mr Fang's ICAC transcript against each accused under sections 65(1) and 65(3) of the Evidence Act 1995 (NSW), which provide exceptions to the hearsay rule where a witness is unavailable and was previously examined in an Australian proceeding. Each accused opposed the application, and the court ultimately refused it.

Legal Issues

  • Whether Mr Fang was "unavailable" as a witness within the meaning of the Evidence Act
  • Whether his ICAC evidence was given in "an Australian proceeding" as defined by the Evidence Act Dictionary
  • Whether "cross-examination" in section 65(3) requires inter partes proceedings governed by the Evidence Act, or whether a purposive construction applies
  • Whether each accused cross-examined Mr Fang at ICAC, or had a reasonable opportunity to do so, satisfying section 65(3)(a) or (b)
  • Whether, even if technically admissible, the evidence should be excluded under section 135 because the danger of unfair prejudice outweighed its probative value
  • What inferences the Crown could draw from independent evidence regarding Mr Fang's introduction to Moses Obeid

Decision

Issue 1: Unavailability of Mr Fang

Fullerton J was satisfied that Mr Fang was unwilling to return to Australia voluntarily and, on further inquiry during the hearing, confirmed he was also unwilling to give evidence by audio-visual link from China (at [18]). He was therefore "not available" to give evidence within the meaning of the Evidence Act Dictionary.

Issue 2: Australian Proceeding

All parties accepted that the ICAC Commissioner was authorised under section 35 of the ICAC Act to hear, receive and examine evidence, bringing the proceedings within the definition of "an Australian Court" and making Mr Fang's evidence part of "an Australian proceeding" for the purposes of the Evidence Act (at [25]-[26]).

Issue 3: Meaning of "Cross-examination" in Section 65(3)

One accused argued that questioning at ICAC could not constitute "cross-examination" because the accused were not parties to the inquiry and the proceedings were inquisitorial rather than adversarial. Fullerton J rejected that argument, favouring a purposive construction. Limiting the term to inter partes proceedings governed by the Evidence Act would, her Honour held, render the broad definition of "Australian Court" meaningless (at [35]). The cross-examination undertaken by counsel for Edward Obeid and Mr Macdonald at ICAC satisfied section 65(3)(a), and Moses Obeid had a reasonable opportunity to cross-examine within the meaning of section 65(3)(b) (at [46]).

Issue 4: Exclusion Under Section 135

Despite finding the technical requirements of section 65(3) satisfied, Fullerton J exercised the discretion to exclude the evidence under section 135. Several features of the ICAC proceedings created a danger of unfair prejudice that outweighed the probative value of the transcript. Counsel who cross-examined Mr Fang at the public hearing had no knowledge of his earlier compulsory private hearing, and therefore could not test his credibility or reliability against what he had said there, a critical forensic limitation (at [63]-[64]). The Commissioner's directions heavily circumscribed the scope of cross-examination and it was not conducted with knowledge of the prosecution brief or the charges ultimately laid (at [58]-[59]). The court accepted that the inability to challenge hearsay evidence by cross-examination is not alone sufficient to trigger exclusion, but held that the particular circumstances here, taken together, tipped the balance (at [65]).

Issue 5: Independent Evidence and Permissible Inferences

Separately, the Crown indicated it would rely on independent evidence to establish that Mr Macdonald introduced Mr Fang to Moses Obeid. Fullerton J was satisfied there was sufficient evidence, including telephone records, diary entries, and a witness statement from a company general manager, to permit the Crown to advance the submission that Mr Fang's involvement with Moses Obeid arose through Mr Macdonald's introduction (at [76]). However, the court was not satisfied that there was sufficient evidence to support the inference that Edward Obeid was the conduit for that introduction, given that telephone records showed direct contact between Mr Macdonald and Moses Obeid around the relevant dates (at [77]).

Orders Made

  • The Crown's application to tender Mr Fang's evidence is refused.

Key Takeaways

  • Under section 65(3) of the Evidence Act, "cross-examination" receives a purposive construction and is not confined to inter partes proceedings governed by the Evidence Act. ICAC proceedings, where the Commissioner was authorised to hear, receive and examine evidence, qualify as an "Australian proceeding" for hearsay exception purposes (at [35], [25]-[26]).

  • Even where the formal preconditions to a hearsay exception under section 65(3) are satisfied, the discretion to exclude under section 135 remains available and can be decisive. The balancing exercise turns on the specific facts, not a generalised rule about unavailable witnesses (at [65]).

  • Cross-examination conducted at an ICAC inquiry, without access to the witness's prior compulsory examination, and under directions restricting scope to the affected person's positive case, carries significantly less forensic weight than cross-examination in adversarial criminal proceedings. That gap informed the prejudice finding here (at [58]-[59], [63]-[64]).

  • A witness who is living overseas, unwilling to return voluntarily, and unwilling to give evidence by audio-visual link satisfies the "not available" threshold in the Evidence Act Dictionary (at [18]).

  • Where a hearsay application fails, the prosecution may still rely on independent evidence, including telephone records and third-party witness statements, to support factual inferences provided those inferences are sufficiently grounded. The court distinguished between permissible inferences against one accused and an insufficiently supported inference against another (at [76]-[77]).

Legislation and Cases Referenced

Legislation
- Evidence Act 1995 (NSW), ss 62, 65
- Independent Commission Against Corruption Act 1988 (NSW)

Cases
- Libke v The Queen (2007) 230 CLR 559; [2007] HCA 30
- R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 3) [2019] NSWSC 898
- Ryan v Watkins [2005] NSWCA 426
- Sio v The Queen [2016] HCA 32; 259 CLR 47
- Thomas v The State of New South Wales [2008] NSWCA 316; 74 NSWLR 34