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Supreme Court 24 April 2024

R v Barrett

[2024] NSWSC 433

Fraud & dishonestyPublic order & justice offences
BLACKMAIL PLUTUS PAYROLL TAX FRAUD HUNG JURY LEGAL AID REFUSED FOR RETRIAL STAY REFUSED DISCONTINUATION OF PROCEEDINGS BY CDPP

Citation: R v Barrett [2024] NSWSC 433
Court: Supreme Court of New South Wales
Date: 24 April 2024
Judge(s): N Adams J

Background

The applicant was charged in 2018 with one count of blackmail under s 249K of the Crimes Act 1900 (NSW), carrying a maximum penalty of ten years imprisonment. The charge arose from his alleged involvement in a scheme to extort the principal offenders behind the Plutus Payroll tax fraud, a large-scale criminal enterprise that misappropriated over $105 million in tax debts owed to the ATO. Although the offence was a NSW crime, the Commonwealth Director of Public Prosecutions (CDPP) prosecuted the matter by agreement with the NSW DPP, given the federal investigation context.

The applicant attended a meeting at a Sydney law firm on 1 February 2017, which the AFP covertly recorded. His case was that he was an investigative journalist who had been used by the principal blackmailers, not a participant in the blackmail itself. A jury trial before Johnson J in April and May 2021 resulted in a hung jury. Legal aid was subsequently refused for a retrial, an application for a stay of proceedings was refused, and the CDPP ultimately discontinued the proceedings on 14 July 2023.

The applicant then applied for a costs certificate under the Costs in Criminal Cases Act 1967 (NSW). The CDPP opposed the application.

  • Whether the applicant was entitled to a costs certificate under the Costs in Criminal Cases Act 1967 (NSW) following discontinuation of the prosecution
  • Whether, had the prosecution been in possession of all relevant facts before charging the applicant, it would have been unreasonable to institute the proceedings
  • How the applicant's background as an investigative journalist, and questions about witness credibility (particularly the principal Crown witness, Mr Hausman), bore on that assessment

Decision

The applicable test under the Costs in Criminal Cases Act 1967 (NSW) requires the court to be satisfied that, had the prosecution possessed all relevant facts before instituting proceedings, it would not have been reasonable to commence the prosecution. This is a high threshold and is not met merely by showing that the Crown case was weak or that the prosecution ultimately failed.

Adams J acknowledged that the Crown case against the applicant was not a strong one. Several aspects were examined, including the applicant's established history as a journalist, his contact with Channel Nine on 31 January 2017 (the day before the blackmail meeting), the circumstances in which he was paid by the principal blackmailer Mr Hausman, and his conduct at the meeting itself. The court noted that the applicant had lied at the meeting about knowing a key figure (a shadow director named Palumberi), and that he had done so on Hausman's instructions.

The court identified the central question as whether the applicant was a participant in the blackmail or an innocent journalist manipulated by the principal offenders. Adams J found this was quintessentially a matter for a jury to determine, and that questions about his role and the payment he received remained for the jury to weigh. Despite some unanswered questions in the Crown case, the court was not satisfied that it would have been unreasonable to institute the proceedings had all relevant facts been known at the outset.

The application for a costs certificate was accordingly refused.

Orders Made

• The application is refused.

Key Takeaways

  • The test under the Costs in Criminal Cases Act 1967 (NSW) is not whether the Crown case was weak or whether the prosecution ultimately failed; it is whether, had all relevant facts been known at the outset, it would have been unreasonable to institute proceedings in the first place.
  • A hung jury, a refusal of legal aid, and a subsequent discontinuation of proceedings do not, of themselves, establish an entitlement to a costs certificate.
  • Where the central factual contest, here whether an accused was a genuine journalist or a blackmail participant, was properly a matter for jury determination, the court held that prosecution was not unreasonable to commence.
  • Credibility questions surrounding the principal Crown witness and unanswered factual questions about the accused's role did not automatically render the institution of proceedings unreasonable, even where those matters affected the strength of the Crown case at trial.
  • Under the Costs in Criminal Cases Act 1967 (NSW), the statutory threshold for a costs certificate following discontinued criminal proceedings remains a demanding one that looks backward to what was known (or should have been known) before charging, not forward to the ultimate outcome.

Legislation and Cases Referenced

Legislation:
- Costs in Criminal Cases Act 1967 (NSW), ss 2, 3, 3A, 4
- Crimes Act 1900 (NSW), s 249K
- Evidence Act 1995 (NSW), s 184
- Criminal Code 1995 (Cth), s 400.3(1)
- Director of Public Prosecutions Act 1986 (NSW), s 7(2)(b)
- Proceeds of Crime Act 2002 (Cth)
- Judiciary Act 1903 (Cth)
- Commonwealth Constitution, ss 75(iii), 77(iii)

Cases:
- Chahal v Director of Public Prosecutions [2008] NSWCA 152
- DAO v R (No 3) [2016] NSWCCA 282
- Dietrich v The Queen (1992) 177 CLR 292
- Higgins v R (No 2) [2022] NSWCCA 82
- Honeysett v DPP [2023] NSWCCA 215
- Mordaunt v Director of Public Prosecutions & Anor [2007] NSWCA 121
- Nadilo v Director of Public Prosecutions (1995) 35 NSWLR 738
- R v Barrett (No 6) [2021] NSWSC 1342
- R v Barrett (No 7) [2021] NSWSC 1349
- R v Hausman; R v Rostankovski [2022] NSWCCA 24
- R v Jonathon Harold Manley (2000) 49 NSWLR 203
- R v Pavy (1997) 98 A Crim R 396