Caratti v The Queen P86/2000 [2000] HCATrans 695 (22 November 2000)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P86 of 2000

B e t w e e n -

JOHN MICHAEL CARATTI

Applicant

and

THE QUEEN

Respondent

Application for bail

McHUGH J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 22 NOVEMBER 2000, AT 4.47 PM

Copyright in the High Court of Australia

MR P.V. BATROS: May it please the Court, I appear on behalf of the applicant. (instructed by Davies & Co. of Perth)

MR G.C. LALOR: I appear on behalf of the respondent. (instructed by the Commonwealth Director of Public Prosecutions)

HIS HONOUR: Yes, Mr Batros.

MR BATROS: Your Honour, confident that your Honour would have read all the papers and thus recognising the lateness of the hour, even as listed, I ask myself this question, in order to try and make my submissions pertinent and concise, namely, what additional points to the material that is before the Court would I wish to put before you? If I could briefly and as quickly as is reasonable, go to those additional submissions, over and beyond the written submissions that your Honour already has, and they would be these: firstly that, on the papers, the applicant is an outstanding candidate for a grant of bail; no challenge is made to his detailed affidavit nor the facts in it sworn 19 October 2000 nor to the contents of the affidavits of Jonathan Davies sworn 25 October and 14 November 2000. The relevant point there being that Caratti deposes as to what happened in the trial, particularly regarding this Navratil matter, and this Navratil matter is a matter of enormous importance; it is important as to the basic justice of the admission of the evidence - - -

HIS HONOUR: Yes, but it comes down in the end, does it not, first of all, as to whether it was admissible; and the second matter was that, even if it was not admissible and the view that Justice Murray took at first instance was correct, there has been any miscarriage of justice. The Court of Criminal Appeal held that there was not. Now, how are you going to get special leave in respect of that?

MR BATROS: Well, because when one analyses that judgment of the Court of Criminal Appeal, the errors that are patent on it are themselves most disturbing and many of the facts which the Court of Criminal Appeal took into account in saying that there was no miscarriage of justice anyway, were factors, which were after the conspiracy found by the jury had ended, namely on the death of Sergio Caratti, 23 May 1992, and which the Court of Criminal Appeal expressly said - and I can give you the reference in half a moment - none of the evidence of any overt act after the conspiracy ended was admissible in the case.

In coming to its conclusion, that is, the Court of Criminal Appeal's conclusion, that there was nonetheless this allegedly overwhelming case against Caratti, it drew on that very evidence that it had said is not admissible. Not only that, your Honour, the flawing - unfortunately I must be blunt about it - that is shown on the fact of the judgment of the Court of Criminal Appeal gives great concern, even in the Navratil matter. The Court of Criminal Appeal did not even get correct which statutory declaration was made in support of the tax return of Navratil.

It misled itself very seriously, saying that what was, in fact, the second statutory declaration, which is December of 1991, was made for the purposes of supplementing this taxation return when, in fact, it was not. Now, if such errors of basic fact are so patent, then there are good grounds for this matter being reviewed by the highest court in the land. But the matters of special importance are patent also.

HIS HONOUR: But it is a question of fact as to whether or not there was a miscarriage of justice. This Court does not sit as a Court of Criminal Appeal.

MR BATROS: What happens to the citizen then, your Honour, if, in fact - - -

HIS HONOUR: But, no, no, it is not a question about what happens to the citizen. Speaking generally, the administration of the criminal justice and justice generally stops with the State courts. There is no proceeding in this Court, notwithstanding that you have an application for special leave on. As was pointed out long ago, an application for special leave is an application to commence proceedings in the Court. So, at the moment, no proceedings have been commenced in this Court.

MR BATROS: I appreciate the point, your Honour.

HIS HONOUR: So you have a situation where your client has been convicted, where the highest court of the State has dismissed his application. Now, an extraordinarily powerful case has to be mounted before special leave has been granted. If special leave is granted, then your case will no doubt be so much the stronger.

I appreciate that in Peters that bail was granted before special leave was given, but one cannot help but think that Justice Dawson thought, as turned out to be the case, that special leave would be granted in that case. Peters raised very important points of law and is, if not the leading, one of the leading cases on conspiracy to defraud under this very section. It stands in a very different category.

The difficulty I see is that, at this stage, your application is premature. For this Court to interfere at this stage and direct that your client go out on bail would be a very significant interference with the administration of criminal justice in Western Australia.

MR BATROS: Well, as your Honour knows, the criminal process does not end on conviction, that is obvious to us all.

HIS HONOUR: But it does. As Justice Brennan used to point out, and I think he pointed out specifically in Chamberlain, verdicts are not provisional. They establish rights and liabilities, and the verdict of the jury, and the entry of a judgment of conviction establish the fact that your client was guilty of the offence and his appeal failed. Now, you ask this Court to release your client, notwithstanding that there is not even a matter started in the court, according to the accepted doctrine, and let him out on bail, and what happens if special leave is refused? Then he goes back in. I mean, in Peters, the appeal was eventually lost.

MR BATROS: Yes, but if that were the yardstick, your Honour, we would need to be able to have a crystal ball to look into the future and no one would ever get bail at this stage.

HIS HONOUR: Well, it has been said that bail is very exceptional.

MR BATROS: Yes, your Honour.

HIS HONOUR: Now, as it happens, bail has been granted on a number of occasions by Justice Callinan - Marotta was one case and Peters was another, but in the history of the Court, grants of bail have been truly exceptional. I think, Peters - is there any other case besides Peters? I cannot recollect whether Cooper was an application for special leave, but any other case besides Peters, and perhaps Cooper, where bail was granted before the court had even dealt with the matter?

MR BATROS: Not that I can refer your Honour to, apart from Marotta in which the bail actually was not granted but Justice Callinan said that - - -

HIS HONOUR: He stood it over.

MR BATROS: He was about to do it, save that there was an expedition.

HIS HONOUR: Yes.

MR BATROS: And that because he was able to expedite the matter and I think it was a hearing, another Perth matter, of the application for special leave in a month's time, that seemed, from his comments, to be the reason he did not actually - - -

HIS HONOUR: You see, in Marotta and those cases, there were important points of principle involving those sections of the Western Australian Evidence Act 1914 which were of general application, and there was a dissenting judgment in that particular case.

MR BATROS: Yes, your Honour, but in the present case it is very similar.

HIS HONOUR: Well, it is far from very similar. It seems to me that even if the evidence was not admissible, as the Court of Criminal Appeal said, the question arises whether it led to any miscarriage of justice.

MR BATROS: Yes, but basically, the Court - - -

HIS HONOUR: Let me understand what the miscarriage of justice point was. Would you take me to the relevant part of the Court of Criminal Appeal judgment so that I can refresh my recollection?

MR BATROS: Yes, your Honour, the Navratil matter was originally dealt with - that was misunderstood, if I may say so. That starts at page 97, but the actual part where they make their mistake entirely on that - it is at page 97, I am sorry - at paragraph 227. That starts the matter and the Court there found this clearly is not the case and is against the judgment of Murray J:

The critical question is whether the statement contained in the statutory declaration was made in the course of or for the purpose of an investigation which led to the discovery of facts -

et cetera. It goes on to say:

The statement was manifestly made by Mr Navratil because he was unable to properly complete his taxation return for the 1989-90 taxation year -

Now, that is clearly wrong because he put in that return with a different statutory declaration 18 months before. The judgment goes on then dealing with the matter and finding that Murray J was wrong in his interpretation of this very important section of the Act.

HIS HONOUR: Yes, but it is at paragraph 242 then that you are asked - you have to persuade this Court then that the Court of Criminal Appeal erred in holding that the judge erred in failing to discharge the jury. Now, it is not enough for you to make out a case that the evidence was wrongly admitted in the first place. You have to show that it led to a miscarriage of justice in that the judge should have discharged the jury. The Court of Criminal Appeal said no, the learned judge said no, and he was the man on the spot.

MR BATROS: Yes.

HIS HONOUR: How are you going to get this Court to interfere with the judge's exercise of a discretion, whether or not in a trial that commenced either on 29 January or 1 February 1999 and went to 4 June 1999, that he made an error in refusing to discharge the jury? What date did this come into the case? How long into the case was this?

MR BATROS: The Navratil document was admitted on 29 March. The case - - -

HIS HONOUR: Well, the case had been going for two months at that stage.

MR BATROS: That is true, but one has to understand the nature of the whole case to understand the dramatic impact of the Navratil evidence upon it.

HIS HONOUR: Well, I know that and I know that you say Justice Miller relied on it in giving you bail after conviction and before the hearing of your appeal in the Court of Criminal Appeal.

MR BATROS: Yes, your Honour.

HIS HONOUR: But you are in another area up here. You have to persuade this Court that it should - and this is the ultimate question, that you have to persuade this Court that this very experienced criminal lawyer and trial judge erred in the exercise of his discretion to refuse to discharge the jury. Now, speaking for myself, that is an enormous burden that you have in front of you. It is not enough to make out that the evidence was wrongly admitted. The judge himself took that view.

MR BATROS: There were, in fact, two arms to it. There were two applications made in respect of this particular document, the first one was made before we knew the real purpose the document was made and there was an application made then just under the general discretion. That was on 29 March and his Honour decided that he should not exercise his discretion to exclude the document.

Now, that also is a matter that comes within the compass of the appeal to the Court of Appeal and also on to this Court, namely, that even at that time it should have been a document never allowed before the jury in the first place. It is all very well that the day later, when we all discovered the mistake, that the judge ruled it inadmissible.

HIS HONOUR: Yes, I know, but the judge held it was inadmissible then and the next step was then asking to discharge the jury. But do you know of any case, because I cannot recollect one, where this Court has quashed a criminal conviction on the ground that the trial judge erred in refusing to discharge the jury in a criminal trial? Is there any case in this Court? I cannot recollect one.

MR BATROS: I cannot quote one to your Honour and what I do say, if I may, is that the errors that were made in the evidentiary arena in this case, both at the trial and then, even worse, on appeal, simply did not allow for a fair trial at all and if one looks for a barometer to gauge just how devastating the first admission of this Navratil document before the jury was, one only has to look at what the judge himself said about it because he was on the verge of discharging that jury.

HIS HONOUR: Well, the fact was he did not.

MR BATROS: That is the fact, your Honour.

HIS HONOUR: And that is the difficulty that it seems to me that you have. Now, I understand your points about that. You say the Court of Criminal Appeal was wrong in saying that the document was inadmissible in any event but, granted that you have a very arguable case in respect of that aspect of it, that is not good enough to get a grant of special leave or to ultimately succeed in an appeal. You have to persuade the Court that the discretion miscarried.

MR BATROS: Your Honour asked me before to indicate my complaints, as it were, the argument in respect of the overall view of the Court of Criminal Appeal that the case anyway against the appellant was compelling. My argument now has been summarised really in what is ground 4 of the draft notice of appeal, the form 65. I do not necessarily take you through them all but all the references are there referring to what evidence the court relied on and the inaccuracies of it. It is all tabulated then on pages 4, 5 and partly 6.

HIS HONOUR: Yes.

MR BATROS: I do not take your time by taking you - - -

HIS HONOUR: No, I have read those and I read the earlier submissions and I read the - - -

MR BATROS: Could I conclude my submissions to you in this way, then, your Honour.

HIS HONOUR: Yes.

MR BATROS: This is our case in a nutshell: Firstly, the principles of the grant of bail are not in dispute here. On the one hand, we have it on affidavit and indicate, I hope sufficiently, that there is a need to protect the subject matter. I realise that that is not enough of itself to be a special circumstance, but without it, one is somewhat naked.

When it comes to the matters of special importance to be determined, I put them this way. Firstly, there has been a conflict, at least between Justice Murray's interpretation of this rather strange and almost unique section of the West Australian Evidence Act; and it is in the interests of justice generally that that be finally determined.

HIS HONOUR: But it is a matter that has been finally determined. It has been determined by the Court of Criminal Appeal.

MR BATROS: Well, it is a matter of public importance, in my respectful submission.

HIS HONOUR: It is of public importance only in Western Australia. It is not of national importance.

MR BATROS: When I looked at the other Evidence Acts of the various States, I did find that in South Australia they also followed the line of having a civil and criminal jurisdiction with the same principles and the same rules of evidence, to be compared, by contrast, with most of the other States of Australia.

HIS HONOUR: But, as I say, even if you make good that particular argument, you have to get over the miscarriage point, that is, on the failure to discharge the jury, because that is what it leads to in the end. The judge took it away - the document was never before the jury in the end, nor was the evidence. So you have to say that by reason of its admissibility and retention in the trial for, what, a day, that the trial miscarried to such an extent that the judge, the person on the spot, erred in refusing to discharge the jury in a long trial. It is a very large proposition. You may make it good, but it is a difficult proposition to maintain.

MR BATROS: The judge himself was on the knife edge, which indicates how severe it was.

HIS HONOUR: Yes, that may be, but the fact that he has considered all the aspects of it is for him. It is only if he has made some error of principle, or that the view of his conclusion is so erroneous that he could not reasonably make it, that his discretion can be set aside.

MR BATROS: When one looks at the detail and the uniqueness of the Navratil evidence, and when one realises the impossible position that the accused was placed in because of the judge's ruling - and his ruling was, like King Canute, "I can simply tell the jury, `Forget about this and no one else will mention it'", and no one else was allowed to mention it then in the trial.

HIS HONOUR: But we act on the basis the jury follow instructions and recent research in New Zealand where they have access to juries, has indicated that juries do follow judge's instructions, and anybody who has practised as a trial lawyer knows that matters that seem dominant on one day, fade out of the case the next day, and particularly in a long case, as long as this - four months. This is a very experienced criminal trial judge that, in this particular case. He is no tyro. This is a judge who has spent a great deal of his life in this area.

MR BATROS: Yes, and if one looks at how he himself evaluated the impact of that evidence, and how he himself was unsure, it shows what a heavy impact this document had on the jury. But, your Honour, if you would let me say, the normal safeguards - when a document is put in like this, which cannot be cross-examined upon, the normal safeguards where a trial judge will warn the jury not to place too much reliance on it and to take into account that the accused did not have the opportunity to cross-examine upon it, they were denied - the accused in this case - by the judge's own ruling, and that is very clear. It is clear from the transcript that is in annexure 3.

What happened was that Mr Rozenes - he was representing a different accused - he wanted to express some mild dissent from that because it impacted on him and the judge told him quite clearly, in effect, forgive me using the colloquial, but, "Bad luck, you cannot. I have made my ruling. No one is to comment on this", and no one else did except the trial judge himself, quite extraordinarily, in his address to the jury. But what happened - - -

HIS HONOUR: Not his address, his summing up. Judges do not address juries.

MR BATROS: I am sorry, my apologies. The lateness of the hour has got me. In his summing up, yes. Once the wrong decision was made, and this is what we want to ventilate, justice had gone out the window because the accused was silenced.

HIS HONOUR: No, but there is an assumption in that, that is the wrong decision. The judge is the person on the spot. He has made the judgment, Mr Batros, and unless you can point to some error in the exercise of his discretion, such that whole verdict constitutes a miscarriage of justice, you must fail. Now, I think you have made your point, I understand it. Is there anything further that you want to put?

MR BATROS: The only additional matter that I would respectfully draw to your Honour's attention is simply that if you are not minded to grant bail, and I still request it, indefatigably, in paragraph 8 of the submissions, in the alternative, would your Honour consider, as Justice Callinan did in Marotta, the ordering of an expedited hearing of the notice of application for leave?

HIS HONOUR: Well, certainly I would take the view that the matter should be given as much priority, but ordinarily an expedited hearing of this particular case would simply mean that it got priority over other criminal appeals and there are plenty of them, special leave applications in our list, where people are in prison, and I do not see anything about your case that entitles it to any priority. But that said, there is no doubt that all criminal cases should be given as much expedition as they possibly can; that would be the most I can do for you, Mr Batros, but I certainly would not make an order that this case should have priority over other special leave applications. There are plenty of other people serving prison sentences who have got special leave applications on before the Court.

MR BATROS: Your Honour, I should not sit down before mentioning the constitutional argument in ground (3). Your Honour has no doubt noted that. We say that that is also a matter of special importance, the fact that there is such a difference between the State laws of the various States, all of which apply in the various States because of the operation of section 79 of the Judiciary Act. I appreciate this was raised in Leeth's Case and there was a narrowly split Court in that regard.

HIS HONOUR: But it is also a point that was never raised at the trial, was it?

MR BATROS: No, your Honour.

HIS HONOUR: Yes, well thank you, Mr Batros.

MR BATROS: Thank you, your Honour.

HIS HONOUR: I need not hear you, Mr Lalor.

MR LALOR: Thank you, your Honour.

HIS HONOUR: This is an application for bail and an expedited hearing of an application for special leave which is pending in the Court.

The applicant was convicted of conspiracy to defraud the Commonwealth contrary to section 86A of the Commonwealth Crimes Act. His trial commenced either on 29 January or 1 February 1999 and ended on 4 June 1999, when he was convicted.

The basis of the case against him was that he was a party to an unlawful agreement to dishonestly deprive the Commonwealth of group tax instalment deductions to which it was entitled. There appears to have been no direct evidence of the applicant's entry into the conspiracy. The Crown case rested on circumstantial evidence, much of it documentary. On 22 June 1999 the applicant, having been convicted, appealed against his conviction to the Court of Criminal Appeal of Western Australia. He made an application for bail to the Supreme Court of Western Australia, which was granted on 5 July 1999 and then, some months later in November, he sought an extension of time for leave to appeal against his sentence.

The appeal was heard over, I think, six days in February 2000, and judgment was given on 28 September this year when the Court of Criminal Appeal dismissed his appeal against conviction but varied his sentence so that he received a sentence of three years with a non-parole period of 18 months, which was deemed to commence on 28 August, 2000.

The applicant filed a special leave application on 25 October 2000. Counsel for the applicant accepts that the grant of bail pending the hearing of an appeal or an application for special leave to appeal in this Court is only granted in exceptional circumstances. But he says that the applicant will be eligible for work release on 28 May 2001 and for early release on 28 August 2001 and that, if bail is refused, his client will have effectively served his custodial sentence. That is because it is likely that his special leave application will not be heard until June or July 2001.

The applicant places great reliance on the decision of Justice Dawson in Peters v Reg (1997) 71 ALJR 309 where, prior to the grant of special leave to appeal, his Honour granted bail on 6 December 1996 where the applicant's special leave application would not be heard until the following February and the applicant was due to be released from custody on the day after his special leave application was to be heard. Justice Dawson thought that there was reasonable prospects that special leave would be granted, as in fact it was, and that in all the circumstances of the case, particularly the fact that the applicant would have effectively served his custodial sentence before his special leave application was granted, bail should be granted.

His Honour's decision in that case can be contrasted with the decision of Justice Hayne in Parsons v The Queen (1998) 72 ALJR 1325 where his Honour refused bail even though special leave had been granted and although by the time the appeal would be heard the applicant would have served about one-and-a-half years of a non-parole period of two years. Moreover, in that case, there was a likelihood that the whole custodial sentence would have been served before the decision in the appeal was given.

In my view, a very strong case needs to be made out before the Court should grant bail before special leave to appeal has been granted. To interfere with the administration of the criminal justice in the States by ordering the release of a convicted person when no appeal is pending in this Court is a very serious matter. Justice Dawson did it in Peters, as I have pointed out, but I cannot but think his Honour was influenced by the fact that the case gave rise to some very important issues of law - that case is now one of the leading cases in the area of conspiracy to defraud - and that special leave would be granted.

The special leave application filed by the applicant certainly cannot be regarded as hopeless. The grounds are certainly arguable, but they are not such that I feel confident that special leave will inevitably be granted. The ground most strongly relied on is that the trial miscarried because a document was admitted and later rejected by the trial judge and that the trial judge refused to discharge the jury after the document was rejected. Indeed, it was the fact that this document, which was very damaging to the applicant, had been before the jury that caused Justice Miller in the Supreme Court of Western Australia to grant bail to the applicant between the time of his conviction and the hearing of his appeal by the Court of Criminal Appeal.

The Court of Criminal Appeal thought that the document was in fact admissible but, in any event, that no miscarriage of justice had occurred by its entry into evidence, and the refusal to discharge the jury. Mr Batros has strongly criticised the reasoning of the Court of Criminal Appeal in so far as it held that the document was admissible. Prima facie, there seems to be some strength in those criticisms.

But, even if the applicant makes good the argument that the document was wrongly admitted in the first place, the fact is that the learned trial judge accepted that was so after a day or so and withdrew it from the jury. In the exercise of his discretion, he refused to discharge the jury at that stage, which was some two months after the trial had commenced.

The critical factors in this present case, to my mind, are that the applicant has been convicted, that his appeal has been dismissed and that special leave has not been granted. His special leave application is merely an application to commence proceedings in this Court. It is one thing to grant bail after special leave is granted; it requires a much stronger case to obtain bail before the grant of leave to appeal. I am not convinced that his special leave application is so strong that it warrants the grant of bail before the application is heard.

In all the circumstances, I am not persuaded that this case is so exceptional that the Court should grant bail to the applicant. I therefore refuse the application that the applicant be admitted to bail pending the hearing of his special leave application.

Mr Batros, for the applicant, asked in the alternative, as does his summons, that I should expedite the hearing of the leave application. There is nothing in this case that entitles it to be given priority over other special leave applications in criminal matters presently before the Court. But, as I pointed out to Mr Batros, every effort should be made to bring special leave applications in criminal matters on for hearing when the applicants are in custody. That should be done in this case. In my view, the summons must be dismissed.

There is no necessity to certify for counsel, is there?

MR LALOR: No, thanks you, your Honour.

HIS HONOUR: Yes.

MR BATROS: Your Honour, I wonder just before you do finish - and I thank you for the indulgence - I notice that the Deputy Registrar is here in Court. When I inquired of the Registry earlier as to when, in the normal course, this notice of application for leave would be heard in Perth, the indications were it would be as late as October of next year. I am just wondering is there any way, while we are all in congregation, that some earlier date might be ordered, in any sense?

HIS HONOUR: The matter is, I think, in your hands to some extent. The Court will not be going to Perth until then. If you want to have the case heard in Melbourne or in Sydney, then you can apply to have it put in one of those lists or you can make inquiries as to when there is likely to be a video link hearing to Perth or, perhaps, South Australia, and get it on. But I think it is in your hands and in your client's hands as to - - -

MR BATROS: Yes, but my understanding is, your Honour, that there is, in fact, a video-link facility available, but it is only a question of the usage of it which seems to follow the event of some indication from this Court.

HIS HONOUR: Yes, well, it would depend upon - these are matters for the Chief Justice, the arrangements of lists, and so on. It is not a matter for me to interfere in, Mr Batros.

MR BATROS: Thank you.

HIS HONOUR: Call the next matter.

AT 5.24 PM THE MATTER WAS CONCLUDED