Citation: R v Fahmy (No. 2) [2026] NSWDC 334
Court: District Court of NSW
Date: 15 April 2026
Judge: Mahony SC DCJ
Background
The accused faced charges including fraud-related counts alleged to involve false claims submitted to the NDIS in the name of a company, SOS Restorations Pty Ltd. A key Crown witness, referred to here as the company's director and sole shareholder, gave evidence supporting several counts on the indictment. An expert witness called by the Crown had based her conclusions on the assumption that this director's evidence was truthful and accurate.
During cross-examination, the director undertook to produce his personal income tax returns (ITRs) to the court. He was given a clear warning that failure to do so would carry serious consequences. His evidence concluded on 24 March 2026.
The director did not return to court. Instead, he sent what appeared to be the relevant ITRs via WhatsApp to the Crown solicitor. Arrest warrants issued on 9 and 10 April 2026 failed to produce him. On one occasion AFP officers observed him at home in bed and photographed medications nearby; on a later occasion he was absent from his home entirely. The Crown closed its case on 14 April 2026 without the director having appeared for further cross-examination, tendering the ITRs into evidence with the accused's consent.
Legal Issues
- Whether the whole of the director's evidence should be excluded under s 135(a) of the Evidence Act 1995 (NSW), on the basis that its probative value was substantially outweighed by the danger that it would be unfairly prejudicial to the accused
- Whether the evidence should be excluded under s 135(b), on the basis that it was misleading or confusing to the jury
- Whether the evidence should be excluded under s 137, which requires exclusion in a criminal proceeding where the danger of unfair prejudice to the defendant outweighs the probative value
Decision
Section 137 and the cross-examination issue: The court accepted that the loss of opportunity to cross-examine the director on his personal ITRs constituted procedural unfairness, a point the Crown itself conceded. Drawing on the High Court's analysis in Steven Moore (a pseudonym) v The King [2024] HCA 30, the court acknowledged that an inability to test evidence by cross-examination can constitute unfair prejudice where it affects the fact-finder's ability to rationally assess the weight of the evidence.
Balancing probative value against unfair prejudice: The court found that the director's evidence as a whole carried high probative value for the Crown case. It provided the primary basis for establishing that claims submitted in the name of SOS Restorations Pty Ltd were fraudulent, and it supported counts representing a substantial portion of the funds alleged in a further count on the indictment. Balanced against this, the unfair prejudice arising from the curtailed cross-examination was real but limited in scope, relating only to credibility and a collateral issue concerning the ITRs. Counsel for the accused retained the ability to address the jury on any inconsistencies apparent on the face of the ITRs already in evidence.
Section 135(b) and misleading the jury: The accused submitted that the jury would be misled because the circumstances of the director's avoidance of the arrest warrants could not be explored through further cross-examination in front of them. The court considered this but concluded the balance nonetheless favoured allowing the evidence to remain.
Proposed direction: The court indicated it would invite the parties to submit a draft direction, modelled on a Mahmood direction (derived from Mahmood v Western Australia (2008) 232 CLR 397), to ameliorate the prejudice to the accused arising from the witness's failure to attend for further cross-examination.
Orders Made
The application to exclude the whole of the evidence of the Crown witness was refused.
Key Takeaways
- The District Court confirmed that a witness's failure to return to court for further cross-examination can constitute procedural unfair prejudice within the meaning of ss 135 and 137 of the Evidence Act 1995 (NSW), consistent with the High Court's reasoning in Steven Moore.
- Where unfair prejudice arises from an inability to cross-examine, the court does not automatically exclude the evidence. A careful balancing exercise is required, weighing the probative value of the evidence as a whole against the extent and nature of the prejudice.
- High probative value can outweigh procedural unfair prejudice, particularly where the cross-examination opportunity that was lost related to a collateral credibility issue rather than the substance of the witness's evidence.
- A direction modelled on a Mahmood direction may be available as a remedy to limit prejudice to an accused when a Crown witness fails to attend court for further cross-examination, without the need to exclude the witness's evidence entirely.
- Producing documents via WhatsApp to a solicitor, rather than tendering them to the court, does not necessarily prevent those documents from being admitted into evidence, particularly where the opposing party consents to their tender.
Legislation and Cases Referenced
Legislation
- Evidence Act 1995 (NSW)
Cases
- Mahmood v Western Australia (2008) 232 CLR 397; [2008] HCA 1
- Steven Moore (a pseudonym) v The King [2024] HCA 30