AI-generated summaries. Not legal advice. Always verify against the official judgment on NSW Caselaw.
← All decisions
Supreme Court 23 October 2020

R v Kinghorn (No 7)

[2020] NSWSC 1483

Fraud & dishonesty

Citation: R v Kinghorn (No 7) [2020] NSWSC 1483
Court: Supreme Court of New South Wales
Date: 23 October 2020
Judge(s): Adamson J

Background

The accused faced two charges under s 135.1(7) of the Criminal Code Act 1995 (Cth), alleging that he dishonestly misrepresented to the Commissioner of Taxation that he did not control two companies, with the intention of influencing that public official. The alleged conduct spanned from 2004 to 2007.

More than twelve years before those charges were laid, the accused had been compelled to attend an examination under s 264 of the Income Tax Assessment Act 1936 (Cth). Under that provision, he was required to answer questions and could not refuse to answer on the ground that his answers might incriminate him. A transcript of that examination was subsequently provided by the Australian Taxation Office (ATO) to the Australian Federal Police (AFP) and the Commonwealth Director of Public Prosecutions (DPP).

The AFP and DPP used the transcript to investigate the accused, formulate the charges against him, and prepare the prosecution brief. The Crown then proposed to tender the transcript, or parts of it, at the accused's trial. The central question was whether that disclosure and use was lawful, and whether the transcript was admissible.

  • Whether, applying the principles in R v Leach [2019] 1 Qd R 459, the ATO was entitled to disclose the compelled examination transcript to the AFP and DPP in circumstances where prosecution of the accused was a possibility
  • Whether the AFP and DPP were entitled to receive and use the transcript to investigate, formulate charges, and prepare the prosecution case
  • Whether the statutory scheme under the Income Tax Assessment Act 1936 (Cth) and the Taxation Administration Act 1953 (Cth) expressly or by necessary implication authorised that disclosure and use
  • Whether the transcript was admissible in the accused's trial

Decision

The court answered the central "Leach question" in favour of the accused on all three parts. Applying the accusatorial principle (that the prosecution must prove guilt) and the companion rule (that an accused cannot be compelled to assist in discharging the prosecution's onus of proof), as those principles were applied by the Queensland Court of Appeal in R v Leach, Adamson J held that the ATO had no entitlement to disclose the s 264 examination to the AFP or the DPP.

The court further held that, because the ATO had no entitlement to disclose the transcript, the AFP and DPP were not entitled to receive it. Consequently, none of those bodies was entitled to use the transcript to investigate the accused, formulate charges, or conduct the prosecution.

On the admissibility question, the court held that the transcript was inadmissible in the accused's trial for the offences on the indictment. The question of any limits on the transcript's use did not arise, given the finding of inadmissibility.

The decision turned on the interpretation of the relevant statutory scheme. The court found that the scheme did not expressly or by necessary implication authorise the disclosure and use of compelled examination material for the purpose of investigating and prosecuting the person who was compelled to give that evidence.

Orders Made

• The s 264 examination is inadmissible in the trial of the accused for the offences charged on the indictment
• The answer to each part of the Leach question is yes
• The content of the s 264 examination is not admissible in the trial of the accused

Key Takeaways

  • The Supreme Court held that the accusatorial principle and companion rule, as applied in R v Leach, operate to prohibit the ATO from disclosing a compelled examination transcript to investigative and prosecuting authorities where prosecution of the examined person is a possibility.
  • Where a person is compelled under s 264 of the Income Tax Assessment Act 1936 (Cth) to answer questions that may be incriminatory, the resulting transcript cannot lawfully be used to investigate, formulate charges against, or prosecute that person.
  • The statutory scheme under the Income Tax Assessment Act 1936 (Cth) and the Taxation Administration Act 1953 (Cth) was found not to authorise, expressly or by necessary implication, the dissemination of compelled examination material to the AFP or DPP for criminal prosecutorial purposes, consistent with the presumption against the alteration of fundamental common law rights.
  • A transcript obtained through a compelled taxation examination and disclosed in breach of the accusatorial principle and companion rule is inadmissible in the subsequent criminal trial of the person who was examined.
  • The decision applied R v Leach to a Commonwealth taxation context, confirming that the Queensland Court of Appeal's analysis of compelled examinations and the accusatorial principle extends to analogous Commonwealth statutory regimes.

Legislation and Cases Referenced

Legislation
- Criminal Code Act 1995 (Cth), s 135.1(7)
- Income Tax Assessment Act 1936 (Cth), ss 16, 264
- Taxation Administration Act 1953 (Cth), ss 8A, 8C, 8D, 8E, 8J, 8K, 8M, 8N, 8P, 8ZJ, 353-10, 355-25, 355-50
- Acts Interpretation Act 1901 (Cth), s 15AA
- Australian Crime Commission Act 2002 (Cth), s 30
- Australian Securities and Investments Commission Act 2001 (Cth), ss 18, 19, 76
- Crimes Act 1914 (Cth), s 29D
- Royal Commissions Act 1902 (Cth), s 6DD
- Independent Commission Against Corruption Act 1988 (NSW)
- NSW Crime Commission Act 1985 (NSW), s 13
- Independent Broad-based Anti-corruption Commission Act 2011 (Vic), s 144
- Interpretation Act 1987 (NSW), s 33

Key Cases
- R v Leach [2019] 1 Qd R 459; [2018] QCA 131
- Lee v The Queen (2014) 253 CLR 455; [2014] HCA 20
- X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29
- Elias v The Queen; Issa v The Queen (2013) 248 CLR 483; [2013] HCA 31
- Strickland v Commonwealth Director of Public Prosecutions (2018) 266 CLR 326; [2018] HCA 53
- R v Independent Broad-Based Anti-Corruption Commissioner (2016) 256 CLR 459; [2016] HCA 8
- Director of Public Prosecutions (Cth) v Kinghorn; Kinghorn v Director of Public Prosecutions (Cth) [2020] NSWCCA 48
- R v Kinghorn (No 4) [2019] NSWSC 1420
- R v Kinghorn (No 5) [2019] NSWSC 1473
- Hammond v Commonwealth (1982) 152 CLR 188; [1982] HCA 42
- Commissioner of Taxation v De Vonk (1995) 61 FCR 564; [1995] FCA 994
- Russo v Aiello (2003) 215 CLR 643; [2003] HCA 53