Spies v The Queen S35/1999 [1999] HCATrans 646 (10 December 1999)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S35 of 1999

B e t w e e n -

PETER MANNERY SPIES

Applicant

and

THE QUEEN

Respondent

Application for special leave to appeal

GAUDRON J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 DECEMBER 1999, AT 12.08 PM

Copyright in the High Court of Australia

MR P. MENZIES, QC: If your Honours please, I appear with my learned friend, MR C.J. BEVAN, for the applicant. (instructed by Clinch Neville Long)

MR P.L. ROBERTS, SC: I appear for the respondent, if the Court pleases. (instructed by Commonwealth Director of Public Prosecutions)

GAUDRON J: Yes, Mr Menzies.

MR MENZIES: Your Honour, in an endeavour to hopefully assist efficiency, we have actually reduced - - -

GAUDRON J: You might have assisted efficiency if you had made this application in time.

HAYNE J: Why should we extend time to an advised and competent litigant in circumstances where the penalty has been fully met? Why should time be extended?

MR MENZIES: Your Honour, the reason why time should be extended is that although the penalty has been met and served, the opprobrium which is attached to the conviction still remains.

HAYNE J: Then all the more reason why a well advised, apparently able litigant, should get on and do it quickly. Why should we now grant an extension?

MR MENZIES: It should not fall upon the litigant's shoulders to suffer a detriment as a consequence of delay in the circumstances where - - -

GAUDRON J: Whose delay, though? That is the problem, is it not? Certainly there is a period of delay referable to the Court of Appeal, that much can be understood. But then nothing seems to have happened for some months. October, I think, one eventually got the reasons. January, is it, that instructions were given? February, the application was made.

MR MENZIES: That is certainly so, your Honour.

GAUDRON J: Well, Christmas takes up a little - - -

MR MENZIES: Delay, in part, as your Honour Justice Gaudron points out, in awaiting the written reasons of the Court of Criminal Appeal, then certainly the Christmas vacation.

GAUDRON J: It does not take a lot. Christmas vacation does not take up a lot of that time.

MR MENZIES: No, your Honour.

HAYNE J: What do we have, about 12 or 16 weeks of delay if no account is taken of the vacation and if we date time from receipt of the reasons of the Court of Appeal?

MR MENZIES: That is so, your Honour, yes. But the consequence upon the applicant, of course, is significant and the prejudice that he suffers is significant. He cannot prosecute an appeal. It means little so far as the administration of justice is concerned generally or the position of the respondent of the appeal.

GAUDRON J: I suppose we might find out if an extension of time is opposed. It usually is not, is it?

MR ROBERTS: Can I just point out to your Honours that the date, according to the affidavit which is page 86, the applicant's solicitors wrote to the registrar was on 15 October requesting a copy of the written judgment and it was received on that very same day.

GAUDRON J: No, it was not.

HAYNE J: The transcript was.

MR ROBERTS: A transcript of the extempore judgment.

HAYNE J: Yes, 19 October is, it seems to me, the more relevant date which is the - - -

MR ROBERTS: That is four days later, your Honour.

HAYNE J: Yes, well, 15, 19 October, little may turn on that period.

MR ROBERTS: Yes. Well, I just point that out, but questions of delay are matters for your Honours.

GAUDRON J: You do not take any point on the matter.

MR ROBERTS: Not on that, no.

GAUDRON J: No point is taken, so you - - -

MR MENZIES: After that rocky start, your Honours, let me try and deal with it.

GAUDRON J: Having survived that hurdle, we do not think we wish to hear from you further. At this stage we would rather hear from the respondent.

MR MENZIES: If your Honours please.

MR ROBERTS: If your Honours would turn to page 76 of the appeal book, the error that was found by the Court of Criminal Appeal in this case related to a lack of direction that was given to the jury who found the applicant guilty of fraud. That lack of direction concerned the subjective belief of the accused which was said not to have - he lost an opportunity of being acquitted because of the misdirection that the Court of Criminal Appeal said was appropriate in this case.

HAYNE J: That is, the jury were not instructed that they had to consider whether the applicant knew the shares, the subject of the dealing, were either worthless or worth far less than the amount for which they were credited.

MR ROBERTS: It was not sufficiently put to the jury that the accused's subjective belief could determine the question of whether fraud was found or not.

GAUDRON J: These were shares that were traded for around about the amount of money involved a little later - $50,000 difference.

MR ROBERTS: Well, I think, factually, that does not really encompass what happened at all. Your Honours, could I just follow this through, if I may? The court found that there was insufficient direction. This was at a time nine months after the trial had taken place, so, at that stage, the accused was nine months into an 18 months sentence. What would have occurred normally in this situation, had the substituted verdict not been the result, would have been a new trial. Now, it is suggested twice - it is not suggested, it is stated in the applicant's latest document that he was acquitted of this charge of fraud - that is not correct at all.

HAYNE J: I assume no verdict was taken on the alternative charge, was it?

MR ROBERTS: That is so. The Court of Criminal Appeal did not acquit in relation to the fraud charge. This is under section 7(2) where a verdict is replaced. It is not the same as an acquittal at all. What otherwise would have occurred in this is that there would have been a new trial and what the Court of Criminal Appeal did was to substitute a verdict for the corporations charge instead of the fraud charge.

HAYNE J: How could the Court of Criminal Appeal do that in face of the deficiency which it identified in the trial judge's charge? That is, given that deficiency, how could they then be satisfied that the jury's finding entailed conviction for the second alternative charge?

MR ROBERTS: Well, there are two points there. Your Honour, firstly, what the Court of Criminal Appeal had to be satisfied of was the fact that the jury's verdict would have encompassed the facts as sufficient and, we say, the fact sufficient was certainly found. The error was that there was insufficient direction in relation to the subjective element of fraud which was not required for section 229(4). Therefore, it was open to the Court of Criminal Appeal to do what it did. Can I just follow through what I was endeavouring to do in relation to this matter, and pointing out to your Honours that what otherwise would have happened if a substituted verdict had not taken place would have been a new trial and both charges, presumably, would have been open.

GAUDRON J: At that stage, pursuant to what was said by section 76, there would have been an investigation, presumably, about the circumstances in which the lease went to the holding company, an investigation that was not undertaken in the trial.

MR ROBERTS: No, that was not the error that was found - - -

GAUDRON J: What is the error? I have great difficulty in understanding how this matter went to trial on the basis that it did.

MR ROBERTS: Your Honour, without attempting to go through all of - - -

GAUDRON J: Page 76 is the error identified:

the jury had to be satisfied that the accused knew that the transaction by which value had been given to the shares -

and that, presumably, was putting the lease in the holding company -

or as the Crown put it, the appearance of value had been given to the shares, was a transaction which was liable to be set aside -

That is, the lease.

MR ROBERTS: The whole transaction.

GAUDRON J: Which transaction?

MR ROBERTS: The transaction whereby the lease was placed in the name of the second company - it was not really a holding company at all, it just had the name Holdings - - -

GAUDRON J: No, he called it - - -

MR ROBERTS: But in the second company - - -

GAUDRON J: It was not put at trial, was it, that that, in itself, was an offence?

MR ROBERTS: No, but it was part of the factual matrix and the jury found objectively - - -

GAUDRON J: They needed some very detailed instructions, would they not?

MR ROBERTS: Well, that was the flaw that was said to have pertained to the verdict, was that the accused lost a chance of acquittal because the subjective matter was not properly put. So, they must have found him guilty objectively, but without taking - - -

HAYNE J: No.

GAUDRON J: Guilty objectively - - -

MR ROBERTS: On the objective facts without taking into account this one matter of the subjective out.

GAUDRON J: The matter with which he was charged was selling the shares to the other company, is that not right?

MR ROBERTS: That was the fraud that was identified, yes, your Honour.

GAUDRON J: Yes, that was the fraud. He was not charged with respect to having the lease put in the name of - we will call it Holding Company.

MR ROBERTS: Yes.

GAUDRON J: He is charged only with selling shares, presumably, if one looks at section 76, in circumstances in which he knew that the lease was liable to be set aside or treated as fictitious in some way.

MR ROBERTS: But the whole transaction whereby the second company obtained that lease - - -

GAUDRON J: What is the whole transaction?

MR ROBERTS: Well, the transaction was, in effect, that the lease should have, by rights, belonged to Sterling Nicholas Duty Free.

GAUDRON J: But that was not charged.

MR ROBERTS: Well, it was, in effect. That is not the error that was identified by the Court of Criminal Appeal. They had not said there is anything fundamentally wrong with the charge. That is just, with respect, not the point that was identified by the Court of Criminal Appeal. It is merely - - -

GAUDRON J: Yes, I know, but let us assume that the error is not telling them the applicant had to know - they had to be satisfied that the applicant knew that this whole lease arrangement was liable to be set aside, a notion with which I have some difficulty, on the facts, but let us assume they were told that. Why would not they have to be told precisely the same thing on the second count?

MR ROBERTS: Your Honours, there is a different mental element in 229(4).

GAUDRON J: Yes.

HAYNE J: We accept all that.

MR ROBERTS: Which only required objective matters - - -

GAUDRON J: But what was the substance of - we are not talking about the mental elements so much as the substance that seems to have been bypassed at some point.

MR ROBERTS: Well, your Honours are saying that, and it has been put in these submissions that there was a fundamental flaw in the charge. It may be that your Honours are saying this, but that is not what the Court of Criminal Appeal - - -

HAYNE J: No, Mr Roberts, the point is, I think, this. If you go to the indictment at page 1 of the application book, charge 1 relevantly was defraud by causing purchase for $500,000.

MR ROBERTS: Yes, your Honour, that is so.

HAYNE J: At its simplest, that was defraud by causing purchase of something worth far less than 500,000 or worthless.

MR ROBERTS: That is so.

HAYNE J: And the jury's attention was never invited to whether the shares that were bought were worthless or worth far less than 500 because they were never directed to look at the sufficiency or the understanding of the sufficiency of this lease transaction. That being the deficiency at trial, how can the Court of Appeal say the verdict of the jury must be taken to mean that there was an improper use of position by causing purchase for 500. At some point in that chain, you have to have the step in the second charge of saying what was bought was not worth 500.

MR ROBERTS: Your Honours, the problem with the verdict was not that it was not properly put in relation to the share transaction, the problem with his Honour's direction was that the jury could have been left with the belief that as long as they were satisfied that the shares were not worth anything, that was sufficient to convict. Now, what the court said was wrong in relation to that was the accused could have believed there was real value in the shares even if, objectively, others would not hold that belief. Clearly, the jury were of the view there was no value in those shares. That is why they convicted him of fraud. So he lost the opportunity of an acquittal because he could have believed - - -

GAUDRON J: You say that, but it is very difficult to understand how they could have come to that view without having formed the view that the lease transaction was liable to be set aside, to use that term "undone" - - -

MR ROBERTS: Well, clearly, they did, your Honour, that is why they convicted him.

GAUDRON J: Why?

HAYNE J: Given the charge at page 10, which seems to me to be the sum total of the judge's charge on this question, at line 40 all the judge said was, rehearsing the Crown's argument:

that the purpose of the sale.....was for no reason other than to delay or hinder creditors by making the accused, himself, a creditor rather than a debtor;

No question of whether the transaction was of proper value, improper value, whether the surrounding lease transaction was good, bad or indifferent. On those instructions, the jury could properly have convicted had they said, "We think he did this to delay creditors".

MR ROBERTS: Well, your Honours, there are other portions in the summing up but what I have put to you as being the reasons of the Court of Criminal Appeal are those that they gave. What your Honour is putting to me, with respect, is not what the Court of Criminal Appeal have said.

GAUDRON J: No, I know it is not, but what they have done, they have said, "This conviction cannot stand", provisionally set it aside, "but we can substitute another one". What I am putting to you is that they needed a far more thorough analysis of the factual situation before they could simply substitute conviction on one charge for another.

MR ROBERTS: Your Honours, the facts that were found on pages 71 through to 73, coupled with a finding that the only flaw in relation to this was the judge's summing up in relation to the subjective matter, that was sufficient for a finding under 229(4) - - -

GAUDRON J: Is there a finding that that was the only flaw?

MR ROBERTS: Page 76, line 6:

The jury could have been left with a belief that as long as they were satisfied as a fact that the shares were not worth anything, the charge could have been made out, even if the accused believed that there was real value in the shares -

GAUDRON J: But that is not the way it was - the jury could have been satisfied on any number of other bases.

MR ROBERTS: Your Honour asked me what the Court of Criminal Appeal, as I understood it, did and that is what they said. This is the one matter that was identified, was a failure to put - if the accused believed there was real value in the shares after the transaction, that needed to be disproved, in effect, because fraud requires subjective and objective elements, and the subjective element was not sufficiently put to the jury. That was the one and only flaw that was identified in relation to this matter.

GAUDRON J: Then the next question is, was the objective element sufficiently put to the jury?

MR ROBERTS: There was no criticism by the court in relation to the objective element which was clearly made out.

GAUDRON J: No, but I am asking you.

MR ROBERTS: In my submission, yes, it was sufficiently put. No error was identified - - -

GAUDRON J: Where was it put? This is sufficiently put to enable a substituted verdict, we are talking about.

MR ROBERTS: Your Honours, what we are looking at is whether the facts as found by the jury verdict must have been found. This is what is required under the provision, whether the facts found by the jury, and in order to find him guilty of fraud the whole case rested upon whether the shares were really valueless because they really, in effect, belonged to Sterling Nicholas Duty Free and not the other company. That is what the whole case turned upon.

GAUDRON J: Except that is not what was charged.

MR ROBERTS: Well, it was what was charged, but what their Honours have said is because of the nature of the case it was a little more complex than that and it required a direction along the lines of what their Honours have pointed out. That was what was lacking in this case. It was the lack of direction. Could I just come back to this point which I did not quite make? The result of a successful appeal, had it not been for a substitution of the charge, would have been a retrial. Now, what is now being sought is a quashing of this second substituted verdict, so, in effect, what they are seeking is that there will be no conviction at all and no retrial and that, by reason of effluxion of time - - -

GAUDRON J: They may not achieve that - - -

MR ROBERTS: That is what they are seeking, your Honour.

GAUDRON J: That is a matter within the hands of - assuming they were granted special leave and were successful on an appeal, the question whether or not there is a retrial was entirely in the hands of the Director of Public Prosecutions or whoever else now has the power - - -

MR ROBERTS: Assuming, of course, that the court - well, that is what is being sought, to quash this second - - -

HAYNE J: You have not opposed the extension of time, Mr Roberts?

MR ROBERTS: No, I have not opposed the extension of time - - -

HAYNE J: The bed has been made.

MR ROBERTS: But I do oppose the grant of leave and what I am suggesting is - - -

GAUDRON J: On the ground what? On the ground that - - -

MR ROBERTS: They could not have achieved what they are now seeking in the Court of Criminal Appeal because they would have got a fresh trial.

GAUDRON J: It would have achieved a new trial, yes.

MR ROBERTS: That is so.

GAUDRON J: They cannot achieve any more here than they can achieve in the Court of Criminal Appeal.

MR ROBERTS: Well, what they are seeking to achieve is the quashing of - - -

GAUDRON J: Well, they may be seeking it and if they achieve it, it is not because of the way in which appeals are allowed.

MR ROBERTS: It is by effluxion of time, the sentence having been served - - -

GAUDRON J: No, it is not by effluxion of time - - -

MR ROBERTS: The sentence having been served, your Honour - - -

GAUDRON J: It is not be effluxion of time. If it is achieved, it is achieved by prosecution policy.

MR ROBERTS: Well, with respect, your Honour, depending on what the result is. If he was successful in relation to what he is seeking, there would be a quashing of the second count - sorry, not the second count, the substituted - - -

GAUDRON J: The conviction would be set aside. There would be no quashing. The conviction would be set aside, simpliciter. Whether or not there is a subsequent prosecution, assuming special leave were granted and the appeal allowed, would be a matter within prosecution policy.

MR ROBERTS: Could I submit, your Honour, that if this Court is going to act in the place of the Court of Criminal Appeal, it either makes a decision under section 6(1), or 7, or 8. They are the three options that are available. Section 6 involves a quashing which says "and an acquittal". Section 7 is a substitution.

GAUDRON J: Where is 6, 7 and 8? As I understand it, the powers of this Court are to do what could have been done in the intermediate Court of Appeal.

MR ROBERTS: Section 6(2) of the Criminal Appeal Act of New South Wales:

Subject to the special provisions of this Act, the court shall, if it allows an appeal under section 5(1) against conviction, quash the conviction and direct a judgment and verdict of acquittal to be entered.

Now, 7(2) is the substituted verdict and section 8 is the new trial. So there has to be one of those courses taken.

GAUDRON J: Yes, section 8 is the new trial.

MR ROBERTS: Well, I am merely pointing out that this Court would have to do one of those three things and it is not a matter whether the Crown puts him up again, which would obviously be, it is a question of which of those three sections this Court would utilise.

GAUDRON J: Yes, well, what it would do, on the arguments thus far advanced, is order a new trial. Whether or not that happened is in your hands on the arguments as they are advanced here.

MR ROBERTS: I appreciate that is what your Honour did. I was pointing out that what they are seeking is a quashing of this - that is what it says in their draft grounds of appeal.

GAUDRON J: People sometimes are a little optimistic when they come to this Court, on both sides, it seems to me.

MR ROBERTS: I am merely pointing out that which is sought, with respect, your Honour. To just come back to the correctness of the decision, we say that the facts, as found by the jury, must have encompassed that the share transaction itself, in effect, was, to use the vernacular, I suppose, a scam, and the lease, in effect, belonged to Sterling Nicholas Duty Free and, in those circumstances, the Court of Criminal Appeal was entitled to substitute the verdict. Those are the submissions of the respondent, if your Honour pleases.

GAUDRON J: There will be a grant of special leave in this case, but before the parties depart the Bar table, let me say something which can be relayed to other members of the profession.

It should not be assumed henceforth that extensions of time will be granted simply because they are not opposed. One of the problems that may emerge by the extension of time is adverted to in this case. It may be that time will have so passed between the conviction and the ultimate final appeal that prosecution policy will come into operation and bring about a situation that really ought not, in the interests of justice, to occur. So it should be understood hence forward that applications for extension of time in criminal matters must be accompanied by proper explanation of all the delay, and it must be clear that it is not referable merely to standing by on the part of the applicant and it should not be taken that the dilatoriness of counsel is a sufficient explanation in these cases. Similarly, it should not be taken that the absence of legal aid is a sufficient explanation.

So if you gentlemen would be kind enough to impart that information to your colleagues it may - - -

MR MENZIES: It will spread like wild fire.

GAUDRON J: Yes. It may save them the embarrassment that occurred to Mr Menzies today.

The Court will now adjourn to reconstitute.

AT 12.35 AM THE MATTER WAS CONCLUDED