Kazacos v The Queen B42/1999 [1999] HCATrans 499 (19 November 1999)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B42 of 1999

B e t w e e n -

MICHAEL CONSTANTINE KAZACOS

Applicant

and

THE QUEEN

Respondent

Application for special leave to appeal

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 NOVEMBER 1999, AT 9.52 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR A.J. RAFTER, for the applicant. (instructed by Price & Roobottom Solicitors)

MR R.V. HANSON, QC: If the Court pleases, I appear with my learned friend, MR G.R. RICE, for the respondent. (instructed by the Commonwealth Director of Public Prosecutions)

GAUDRON J: Yes, Mr Jackson.

MR JACKSON: Your Honours, this is a case where it is submitted that special leave should be granted for two related reasons. First, the correctness of the approach taken by the Court of Appeal to a sentencing judge's findings on disputed factual questions. That is an issue, in our submission, which merits the grant of special leave. Secondly, in any event, we would submit that the interests of justice in the particular case merit the grant.

Your Honours, to deal with the application, I need to go - and I will do so very briefly - to the central facts, and may I proceed to do so. The element giving rise to the issue is that the Court of Appeal raised the appellant's sentence for four offences against laws of the Commonwealth by altering the period which he actually had to serve from 4 to 15 months. At the sentence hearing - by that I mean before the sentencing judge - it was clear that there was an issue concerning the circumstances in which and the motivations by reason of which the offences were committed. Could I in that regard, your Honours, give your Honours two references in the application book. At page 12, lines 15 to 31, your Honours will see a reference to:

material that Your Honour will get, the prisoner will say that he did this at his son's behest.

Your Honours, at the bottom of the same page, the last couple of lines, counsel for the Crown:

The material that Your Honour will get will indicate that the father was deferring to the son, that the father did it at the son's behest.

Now, your Honours, the material relied on was an affidavit from the applicant. It appears in the application book at pages 63 to 82. Your Honours, I will not go to its terms, of course, but it mitigated the involvement of the applicant in the matter. The applicant also gave oral evidence which is at page 14 and goes through to page 18, and he swore to the contents of the affidavit at page 15, line 2, and the affidavit was admitted then as an exhibit.

Now, your Honours, as I submitted a moment ago, the matters set out in the affidavit were of considerable significance in relation to sentencing. If accepted, they mitigated the seriousness of the applicant's involvement. One - - -

GAUDRON J: There was not cross-examination with respect to the affidavit, as such, was there?

MR JACKSON: I was about to come to that just now, your Honour. Your Honours, I was going to say - if I could just say this before going to that - that one would have expected, if they were to be challenged, a cross-examination on them, perhaps, of some rigour. But, your Honours, all that occurred is what appears at page 17 commencing at the top of the page, and going through to page 18, line 50. To put it shortly, your Honours, it really does not touch what is in the affidavit.

Now, your Honours, not entirely surprisingly, perhaps, the applicant's evidence being unchallenged, the sentencing judge accepted it. Your Honours, could I give you three references in that regard. First, at page 96, lines 19 to 40, where the judge discusses the situation which would have obtained if that evidence had not been present. That is at page 96, lines 19 to 40.

Secondly, your Honours, on the same page, commencing at line 42 and going through to page 98, line 46, he then expresses his views as to the quality of the applicant's conduct based upon that unchallenged material. Then, your Honours - - -

GAUDRON J: Then lines 10 to 15.

MR JACKSON: I am sorry, your Honour was saying, which page?

GAUDRON J: Page 97, lines 10 to 15.

MR JACKSON: Yes, your Honour, I was going to refer to that specifically, and he goes on to deal with that aspect of the matter through to page 98, line 50.

The third reference, your Honours, commences at line 51 on page 98, where he demonstrates that he was yet mindful of the degree of voluntary criminal involvement of the applicant, and that goes on to page 99, about line 10.

McHUGH J: What is the reconciliation between the statement on 98 at line 55:

I find that you were a willing party to the activities constituting the offences in counts 2 and 3.

But earlier at 96, line 59, he says:

I accept that you were not an active and willing participant in a scheme.....to defraud - - -

MR JACKSON: I am sorry, your Honour.

McHUGH J: At the bottom of 96 to 97. Does that only relate to one count, does it.

MR JACKSON: Yes. Your Honour, I was going to say in relation to that, Justice Pincus at one point in his reasons picks the first of the two passages to which your Honour refers and notes the absence of a reference to count 1. What I was going to say about that was that the reason why there was an absence of reference to that and that point is because his Honour had referred to it earlier in the passage to which your Honour referred.

GAUDRON J: Counts 2 and 3 were money laundering, were they not?

MR JACKSON: Yes, your Honour.

GAUDRON J: And count 1 was the defrauding?

MR JACKSON: Yes, that is right. Your Honour, the counts are set out at pages - the wrong way round, I think - pages 3 and 2.

Now, your Honours, I was going to go on to say that we would invite the Court to note particularly the paragraph at page 97 commencing at line 29, where his Honour referred to the evidence which was relied on to the contrary of the material in the affidavit, and that consists of two things or two categories of things. First, some tape recordings of telephone conversations, and secondly, some correspondence. Could I invite your Honours to note two features about that. The first is that it is clear from the transcript of the sentencing that the judge was right in his view that that was what was relied on in response to the affidavit material. The second feature about it is that your Honours will see at page 97, lines 40 to 42, that the judge in fact did refer to that correspondence. Why that is germane is that one of the members of the Court of Appeal, Justice Pincus, was, with respect, in error in saying, as he did at page 132, about line 8 on the page, your Honours will see:

In view of the contents of these letters, not referred to in the reasons of the primary judge, it is not easy to understand -

and so on.

GAUDRON J: Did that material relate to the money laundering, rather than the offence of conspiracy to defraud?

MR JACKSON: Conspiracy to defraud, your Honour.

GAUDRON J: It did relate to the conspiracy?

MR JACKSON: Yes, because it dealt with a number of matters relating to the business, to put it shortly.

Your Honours, could I then go on to say that in the Crown appeal the findings of fact were not put in issue, and, your Honours, we have provided to the Court separately from the application book the transcript of the proceedings in the Court of Appeal. Mr Griffin was then appearing for the present respondent and could I invite your Honours to look at pages 2 through to 4. Your Honours will see in the passage commencing at page 2, about line 23, he refers to the fact:

that the respondent was called to give evidence before the sentencing Judge and he reached some conclusions in the respondent's favour but the appellant says that those findings weren't placed in perspective against central features of the matter which were not placed in dispute -

Your Honours, one then sees about line 40 the question being asked, was he:

actually challenging any finding of fact this His Honour made.

Then about line 43:

The only finding of fact that His Honour made that we challenge is a finding that the respondent pay back $4m or paid $4m in tax.

Then about line 51:

We're not challenging his findings of fact in other respects. We say that he has placed too much weight on certain facts -

that seems, with respect, a slightly unusual approach to a Crown appeal. Then, your Honours, about line 57:

You're not challenging the primary findings but you're challenging the broad conclusions His Honour drew.

Could I go then, your Honours, to the bottom of page 3, last paragraph on page 3. In the last three lines Mr Griffin argued:

So far as I can see the prosecution never really challenged that proposition -

and, your Honours, finally, at page 4, about line 15:

But the burden of the finding against you -

Justice Thomas says -

is that although he perpetrated the fraud he did so under the strong persuasion and influence of the son.

Mr Griffin said:

Yes, and we accept that, Your Honour, but he also went on to find that he was a willing party to the offences.

Now, your Honours, the reasons of the President for rejecting the Crown appeal appear at pages 111 to 127. Your Honours, I will not go through her Honour's reasons in detail, but could I just simply submit that her Honour's reasons are, with respect, entirely orthodox. Her Honour looked at the appropriate range of sentences.

GAUDRON J: Yes, but if special leave were granted, you would not be seeking the Court to uphold that decision, so much as refer it back to be considered in accordance with law.

MR JACKSON: Your Honour, I am sorry, I was not seeking to convey that.

GAUDRON J: Yes.

MR JACKSON: What I was seeking to say was just to look at the three reasons in terms of the approach taken in the Court of Appeal, without seeking to express a view upon the ultimate result. Your Honours, my submission is simply this: that the approach taken by the dissenting member of the court, the President, was, we would submit, entirely an orthodox approach to such an appeal. As Her Honour recognised at page 120, about line 35, it is the appropriate sentencing range. As she said:

It is trite to say that where a case, whether social security or taxation fraud, falls on the scale of seriousness will depend on the unique facts of each case.

Your Honours, we would submit - if I could interpolate - that in sentencing, really, no issue is more appropriately the subject of a sentencing judge's discretion than the period of imprisonment which the convicted person should actually serve.

Your Honours, both the majority in the Court of Appeal allowed the appeal for disparate reasons. First, if I could go to Justice Thomas, he took what I might perhaps describe as the simple approach. He held that "the sentence", accepting the findings made by the sentencing judge, was "manifestly inadequate". His Honour's reasons are at page 137 to 140.

But the other member making the major, Justice Pincus, was not prepared to accept the sentencing judge's findings.

McHUGH J: Well, I am not sure that is right, Mr Jackson. It is clear that Justice Pincus' judgment does contain some criticism of the findings of fact, but I am not sure that they really counted in the end with him.

MR JACKSON: That is what I am going to seek to demonstrate, your Honour, because if what had happened had been that his Honour had said, "Well, whether they be right or wrong, the case is one where the sentence was manifestly inadequate.", we might disagree, but we would not have much success in seeking to obtain special leave. But what I am seeking to say, your Honours, is that if one looks as what his Honour did, his Honour did not adopt the same approach as Justice Thomas.

Could I go to four passages in his Honour's reasons. The first, page 132, lines 5 to 14, this is the passage to which I referred a moment ago, could we say in passing, your Honours, that his Honour's view is not correct in the light of the fact that the judge had referred to those letters and taken them into account.

The second passage is on the same page, lines 50 to 61, where he says:

the idea that the respondent was a "silent partner" or a mere pawn in his son's hands is incorrect.

Then he has set out some of the agreed facts in a statement of facts which had been tendered at the start of the hearing before the original judge.

At page 134 - - -

McHUGH J: Well, now, this is the page that seemed to me to indicate that notwithstanding those criticisms, that he really did seem to decide the case on the basis of the inadequacy of the sentence on the objective facts.

MR JACKSON: Your Honours, I think your Honour may be referring to the last paragraph on page 134, particularly.

McHUGH J: Yes.

MR JACKSON: The passage at line 50:

The finding that the respondent entered into the scheme at his son's insistence is not challenged, nor are the favourable conclusions as to character which the judge drew from the many references which were tendered.

When his Honour is speaking there of "favourable conclusions as to character", what he is referring to, your Honour, is not really what is contained in the affidavit, but to the material that is referred to at the bottom of page 99, going over to page 100, down to about line 20 on page 100 and, your Honours, what one sees also in relation to Justice Pincus at page 134, commencing at line 10 which is immediately before this passage, is in line 11 where he says:

That conclusion is difficult to accept -

All that his Honour accepts, and about line 50 on the same page, is, really, entry into the scheme and nothing much more, and "the favourable conclusions" -"which the judge drew". But your Honours will see in the passages to which I have referred that he specifically does not accept some of the views adopted by the primary judge.

Now, your Honours, could we seek to say this. What emerges is that there are three sets of reasons in the Court of Appeal. One is in favour of the applicant on what I submitted earlier were orthodox reasons. Another accepts the findings made by the sentencing judge, and this is Justice Thomas who says the result is outside the range. But the third judgment and that which makes a majority, in our submission, (a) makes an error fact, (b) simply does no more than give different weight to the same facts, and thirdly, gives effect to the judge's own view of the evidence untrammelled, in our submission, by considerations of appellate restraint. In our submission, the case is one where both the approach is incorrect and the result against the applicant merits special leave. Your Honours, those are our submissions.

GAUDRON J: Yes, thank you, Mr Jackson. Yes, Mr Hanson.

MR HANSON: As your Honour Justice McHugh has observed, we contend that Mr Justice Pincus did not indeed substitute another view, but may I take the argument a little further. Assuming that his Honour did, really, all he did was point out that the findings of fact arrived at by the sentencing judge were inconsistent with other agreed evidence before the Court. I can make the point best by turning to the outline of argument for the applicant where the impugned passages from Mr Justice Pincus' judgment are isolated at page 154 of the book. At line 10:

Pincus JA, one of the members of the majority, erred in the approach which he took to the factual findings made by the sentencing Judge in relation to the nature and degree of the applicant's participation in the offences.

There are then set out four examples of that error and they are in these terms. The first one is:

The correspondence.....and transcripts of conversations..... ".....seemed to make rather suspect some of the assertions in the affidavit".

The second one:

The correspondence suggests that the accountant regarded the (applicant), at the times those letters were written, as a person who needed to be kept informed and consulted about the way in which the business was being run and that this process included reference to ways of minimising revenue obligations. In view of the contents of these letters -

and then it said erroneously, his Honour says -

not referred to.....it is not easy to understand the description -

et cetera.

The next point:

To some extent, the modus operandi of the (applicant) in this process of hiding money away appears from the transcripts to which I have referred; from them it seems clear that the idea that the respondent was a "silent partner" or a mere pawn in his son's hands is incorrect.

At the foot of the page:

The learned primary judge described the (applicant's) fraudulent conduct as having been "born of unconditional love for your son". That conclusion is difficult to accept; the assumption appears to be that it was necessary, in order for the fraudulent scheme which the son advocated to be effected, for the (applicant) to take part in it.

So, everything that is complained of, or certainly the first three points, complained of by reference to his Honour's adopting or preferring what is to be found in the agreed documents. Really, all his Honour Mr Justice Pincus has done is point out how those agreed documents seem to give the lie to what is in the applicant's affidavit. That is all he has done. Surely, that something that appeal courts do every day of the week. If he has substituted his view, he has taken a different view based on other evidence before the sentencing judge, and it is as simple as that. That is no error of principle, in our submission. That is the highest at which the applicant seeks to put his case.

If you go back to page 149, where the special leave question is posed, in the opening paragraph, it is posed in these terms:

On an appeal against sentence.....is the Court of Appeal entitled to substitute its own view of the facts for a view formed by the learned sentencing Judge when the evidence relevant to those facts adduced by the defendant was not challenged in cross-examination before the learned sentencing Judge - - -

McHUGH J: But is not one problem you have to meet this, that can those statements of his Honour, which are set out in 154 and 155 of the book, really be reconciled with the fundamental finding at the bottom of 96 to 97 that the judge who saw the witness and heard him give evidence, accepted that he was not "an active and willing participant in a scheme"? Is that not the proposition upon which the judge could make no findings inconsistent with that premise?

MR HANSON: Well, your Honour, if the case did turn on the trial judge's assessment of the viva voce evidence, yes, we would have some difficulty, but what Mr Justice Pincus uses to impugn the oral evidence, really, are the applicant's own documents, that is all he refers to. The correspondence are the letters passing between the applicant's accountant and himself; the transcripts are transcripts of telephone conversations between the applicant and his son. So, all his Honour Mr Justice Pincus has resorted to are materials that come from the applicant himself, and that is something that the trial judge could have done and had no advantage, in our submission - - -

GAUDRON J: His Honour does not seem to have rejected the findings, as distinct from saying he found them difficult to accept.

MR HANSON: Yes, he expressed some scepticism about them.

GAUDRON J: Yes.

McHUGH J: I think that is the strongest point in your favour.

MR HANSON: That is the passage your Honour Justice McHugh mentioned at page 134.

McHUGH J: Yes.

MR HANSON: But, as I say, we have made that argument in our outline and I do not think I can better it orally, but I seek to make this further point, that assuming there was a substitution, it is based on the applicant's own documents. It is a simple as that; no point of principle involved. Perhaps the worst that could be said against Mr Justice Pincus might be that he paid lip service to the principle of respecting factual findings by a trial judge, and that is no error of principle, in our submission.

GAUDRON J: One of the problems with what Mr Justice Pincus did is he seemed to embark on this process with respect to the factual findings, and with respect to his view of them, without making any finding that the sentence was manifestly inadequate.

MR HANSON: Yes. You can see that he thinks the Crown has been conned; ambushed, perhaps, would be a better way of putting it, and so he sets out to argue the case another way, but does not go beyond using what is in the record and legitimately so, in our submission. I do not think I can assist your Honours any further.

GAUDRON J: Yes, thank you, Mr Hanson. Yes, Mr Jackson.

MR JACKSON: Could I just say two things, your Honours. The first is in relation to the ambush argument. It is perfectly true to say that the affidavit was there, arrived on the morning of the hearing. No adjournment was sought, not even to the afternoon, to seek to put some questions in cross-examination based on it.

The second thing, about it, your Honours, is this: that what our learned friend's argument today really amounts to is that the judge, Mr Justice Pincus, was perfectly entitled to look at the materials that were before the sentencing judge and form his own view on them. But, your Honours, this is a case where what he was doing was really what the sentencing judge had already done, because if one took, for example, the tapes: the judge had listened them; he had been able to form his own view on them; he took them into account, as well as taking into account the correspondence. He was the one to do the weighing up of those facts and arriving at conclusions.

Your Honours, finally, in relation to that, we would seek to say what, your Honours, was Justice Pincus looking at the findings of fact for and dealing with them if it was not to arrive at a conclusion which motivated the result at which he arrived?

GAUDRON J: The applicant seeks special leave to appeal in this case from a sentence imposed on a Crown appeal by the Court of Criminal Appeal of the Supreme Court of Queensland.

The principles applicable to Crown appeals are well established as are the principles which govern the role of an appellate court with respect to factual findings made at first instance.

We are not convinced that any member of the Court of Criminal Appeal in this case departed from the factual findings of the learned sentencing judge as distinct from giving different emphasis to some of them. In these circumstances, it was clearly open to the Court of Criminal Appeal to hold that the sentence imposed at first instance was manifestly inadequate and to impose the sentence it did.

The application is dismissed.

AT 10.21 AM THE MATTER WAS CONCLUDED