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Supreme Court 5 November 2020

R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 13)

[2020] NSWSC 1947

Fraud & dishonesty
EVIDENCE HEARSAY EXCEPTIONS BUSINESS RECORD DISCRETIONS EXCLUSION OF EVIDENCE

Citation: R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 13) [2020] NSWSC 1947
Court: Supreme Court of New South Wales
Date: 5 November 2020
Judge(s): Fullerton J

Background

Three accused faced trial on charges arising from an alleged criminal conspiracy concerning the Mount Penny Coal Release Area. The Crown alleged that a former Minister and members of a prominent family conspired to exploit confidential government information about coal resources to generate substantial financial returns from rural properties the family owned or controlled.

Central to the Crown's case were two maps (referred to as "Wiles Map 1" and "Wiles Map 2"), which the Crown alleged had been confidentially held by the Department of Primary Industries and were improperly disclosed to the Obeid family. Copies of those maps were said to have been seized by officers of the Independent Commission Against Corruption during the execution of a search warrant at business premises in Drummoyne on 23 November 2011.

The voir dire examined whether the warrant was valid, whether the maps and accompanying documents were lawfully seized, and whether a statement from an unavailable ICAC officer and entries in a Property Seizure Record were admissible. The court also considered whether any illegally obtained evidence should nonetheless be admitted under the discretion in section 138(1) of the Evidence Act 1995 (NSW).

Legal Issues

  • Whether the search warrant issued on 22 November 2011 was valid, or was too general and vague to be enforceable
  • Whether the seizure of the maps, newspaper article, Memorandum of Understanding, and Call Option Agreement documents fell within the scope of the warrant
  • Whether the statement of a former ICAC officer (Ms Kyriakopoulos), who was unavailable to give evidence, was admissible under section 65(2)(c) of the Evidence Act, including whether the court should give a direction under section 67(4) excusing the Crown's failure to give reasonable notice
  • Whether the relevant entry in the Property Seizure Record was admissible under the business records exception in section 69 of the Evidence Act
  • Whether evidence obtained in contravention of an Australian law should nonetheless be admitted in the exercise of the discretion under section 138(1) of the Evidence Act

Decision

Issue 1: Validity of the search warrant

The court rejected the submission that the warrant was invalid for being general in nature or impermissibly vague. While the warrant did not particularise a specific criminal offence, the court was not satisfied it was analogous to the warrant struck down by the High Court in Smethurst v Commissioner of Police [2020] HCA 14. The warrant sufficiently identified the matter being investigated under the ICAC Act to ground a valid issue (at [103]-[104]).

Issue 2: Scope of the seizure

The court found that the Call Option Agreement documents within the yellow envelope (MFI 40) were lawfully seized because Ms Kyriakopoulos had identified them as falling within the warrant's terms and exposed them to the video record during the search (at [107]). However, the maps, the newspaper article, and the Memorandum of Understanding contained in the manila folder (MFI 39) were not within the scope of the warrant on any available construction. The court rejected the Crown's submission that maps or a newspaper article could be accommodated within the category of "notes or correspondence" in the warrant (at [105]-[106]). The court was also not satisfied that Ms Kyriakopoulos had given any consideration to whether those items fell within the warrant's scope at the time of seizure (at [106]).

Issue 3: Admissibility of Ms Kyriakopoulos' statement under section 65(2)(c)

The court accepted that Ms Kyriakopoulos was unavailable within the meaning of the Evidence Act dictionary. Although reasonable notice of the Crown's intention to rely on section 65(2)(c) had not been given, the court directed under section 67(4) that section 65(2) could nonetheless be relied upon. The unfairness factor carried little weight because the accused had not established they would have taken steps to contact the witness if given earlier notice. The importance of the evidence to proof of the alleged conspiracy weighed in favour of granting the direction (at [53]-[58]).

Despite granting the direction, the court declined to admit the hearsay portions of Ms Kyriakopoulos' statement. The precondition under section 65(2)(c), requiring that the representations were made in circumstances that make it "highly probable" they are reliable, was not satisfied. Her account of the manila folder's contents did not align with the description she gave of the envelope she seized, she made no reference to it being yellow, and she made no mention of the maps. Only a heavily redacted version of the statement, limited to her presence in and search of Paul Obeid's office, was admitted (at [63]-[68]).

Issue 4: Property Seizure Record as a business record under section 69

The entry recording that Ms Kyriakopoulos seized Item 48 from "Paul Obeid's office, on desk near corner window" satisfied the technical preconditions for a business record under section 69(1). However, the court upheld the objection based on section 69(3)(b). That subsection excludes the business records exception where the representation was made "in connection with an investigation relating or leading to a criminal proceeding." The Property Seizure Record was prepared in that connection, and the exception therefore could not be invoked, regardless of whether the court doubted the accuracy of the entry (at [73]-[77]).

Issue 5: Discretion to admit illegally obtained evidence under section 138(1)

The court exercised the discretion to admit MFI 39 and MFI 40. Although the maps and newspaper article were obtained in contravention of Australian law because they fell outside the warrant's scope, the court found no evidence of deliberate or reckless illegality on Ms Kyriakopoulos' part. The available inference was that the manila folder was seized inadvertently, as she was focused on the Memorandum of Understanding (which was arguably within scope) and did not turn her attention to the maps or newspaper article (at [121]). The court also noted that ICAC's document handling systems, while criticised, ultimately ensured secure custody of seized items. Weighing the significant probative value of the maps to a central allegation in a serious criminal conspiracy trial against the nature of the illegality, the court was satisfied the desirability of admission outweighed the undesirability (at [118]-[122]).

Orders Made

  • MFI 39 (manila folder and contents, including "Wiles Map 1" and "Wiles Map 2") admitted into evidence as Exhibit X
  • MFI 40 (yellow envelope and contents, including Call Option Agreement documents) admitted into evidence as Exhibit Y

Key Takeaways

  • A search warrant issued under the ICAC Act is not necessarily invalid merely because it does not particularise a specific criminal offence, provided it sufficiently identifies the matter under investigation. The court distinguished the warrant from that struck down in Smethurst on this basis (at [103]-[104]).

  • Under section 67(4) of the Evidence Act, a court may direct that section 65(2) applies despite a failure to give reasonable notice of an intention to rely on the hearsay exception. The "unfairness" consideration carries reduced weight where the accused cannot point to concrete steps they would have taken had earlier notice been given (at [53]-[54]).

  • Even where a section 67(4) direction is granted, the "high probability of reliability" precondition in section 65(2)(c) remains a substantive gate. Internal inconsistencies in a statement, or the omission of matters one would expect a witness to record, can defeat that threshold (at [67]).

  • The business records exception in section 69 of the Evidence Act does not apply to records prepared in connection with an investigation relating or leading to a criminal proceeding, pursuant to section 69(3)(b). This exclusion applies regardless of whether the court has any doubt about the accuracy of the record itself (at [75]-[77]).

  • In exercising the discretion under section 138(1) to admit illegally obtained evidence, inadvertence in the commission of the illegality is a relevant factor that may reduce the weight of the undesirability side of the balance. Where the evidence is of significant probative importance to proof of a serious criminal charge and the illegality arose without deliberation or recklessness, the court may still admit the evidence (at [118]-[122]).

Legislation and Cases Referenced

Legislation
- Independent Commission Against Corruption Act 1988 (NSW)
- Law Enforcement (Powers and Responsibilities) Act 2000 (NSW)
- Evidence Act 1995 (NSW)
- Crimes Act 1914 ( Cth)

Cases
- Crowley v Murphy (1981) 52 FLR 123
- George v Rockett (1990) 170 CLR 104; [1990] HCA
- Kadir v R; Grech v R [2020] HCA 1
- R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 1) [2019] NSWSC 322
- R v Rondo (2001) 126 A Crim R 562
- Smethurst v Commissioner of Police [2020] HCA 14
- Vitali v Stachnik [2001] NSWSC 303