R v Pratten (No 6) [2012] NSWSC 1669

Supreme Court New South Wales

Medium Neutral Citation: R v Pratten (No 6) [2012] NSWSC 1669 Hearing dates: 12 March 2012, 14 March 2012, 19 March 2012 -23 March 2012, 26 March 2012 -29 March 2012, 02 April 2012, 04 April 2012-05 April 2012, 11 April 2012, 14 April 2012-30 April 2012, 01 May 2012 - 02 May 2012, 04 May 2012, 07 May 2012, 09 May 2012-21 May 2012 Decision date: 21 May 2012 Jurisdiction: Common Law Before: Rothman J Decision: 1. Tender of the documents is unfairly prejudice and outweighs its probative value. 2. Documents not admissible in accordance with s 137 of the Evidence Act 1995 Catchwords: CRIMINAL - Interlocutory proceedings - admissibility of evidence - tender of documents - evidence is unfairly prejudicial and outweighs the probative value pursuant to s 137 of the Evidence Act 1995 Legislation Cited: Evidence Act 1995 (Cth) Income Tax Assessment Act 1997 (Cth) Category: Procedural and other rulings Parties: Regina (Crown) Timothy Charles Pratten (Defendant) Representation: Counsel: K. Chapple with B. Hatfield (Crown) M. Leighton-Daly (Defendant) File Number(s): 2010/315475

EX TEMPORE JUDGMENT 1. HIS HONOUR: These proceedings concern charges of obtaining a financial benefit by deception and the criminal guilt of the accused. The prosecution, for the purpose of proving that guilt, seeks to tender a summary of the tax payable in the opinion of the Australian Taxation Office if the tax returns were to have reflected what the Taxation Office says they should have. Objection is taken to the summary. I do not deal with the issues arising understand s 50 of theEvidence Act 1995, that is the need for a summary as distinct from source documents. That is not the basis of the objection. 2. The objection is based upon relevance and the provisions of s 137, namely, that the danger of unfair prejudice to the accused outweighs the probative value of the evidence adduced. 3. Earlier in these proceedings I indicated a preliminary view in relation to the relevance of default assessments as a fact, namely, that the Australian Taxation Office has taken the view that greater income tax is owed than that which was paid and calculated as a result of the income tax return that was lodged in each of the relevant years. 4. On the face of it, the amount of income tax that would be payable in the view of the Australian Taxation Office is a matter that could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in the proceedings, namely, that tax was payable. That statement is consistent with the earlier rulings made by me, namely, that the fact that there has been a default assessment, in which the tax office no longer accepts the veracity of the income tax returns lodged by or on behalf of Mr Pratten, must be relevant to whether or not there has been the obtaining of a financial advantage. 5. It is not suggested that the summary would be admissible under the exception to the provisions that prevent or preclude the admission of opinion evidence. I harken back to a statement earlier made as to the structure of the Evidence Act. By earlier, I mean earlier in these proceedings, rather than earlier in these reasons for judgment. 6. Essentially, the Evidence Act is predicated on the proposition that all relevant evidence is admissible. To that general proposition, there are a number of exceptions and from those exceptions there are exemptions rendering admissible material or evidence that would otherwise be excepted. 7. One of the exceptions to the provisions as to relevant evidence is the exception as to opinion. One of the exemptions which allows the admission of opinion evidence is that contained in s 79, namely, that the opinion evidence is based upon a specialised knowledge based upon a person's training, study or experience. 8. I make this comment simply because the parties have not addressed the issue, but it seems to me to underpin the parties' attitude that the current witness, Mr Barns, is a person with specialised knowledge, and the material that has been summarised is material that is based upon that specialised knowledge, being training, study or experience of Mr Barns. 9. The fundamental issue, it seems to me, is that which is contained in the provisions of s 137 and, to a lesser degree, s 135 of the Evidence Act. Section 137 applies in criminal proceedings and requires a court to refuse to admit evidence adduced by the prosecutor if its probative value were outweighed by the danger of unfair prejudice to the accused. 10. There are a number of fundamental aspects of that section or provision. Firstly, it requires the Court to refuse to admit the evidence if the condition is satisfied. Secondly, the weighing must be on the one hand of probative value and, on the other, of the danger of unfair prejudice to the accused. 11. In that latter aspect there are sub-issues that need refinement or adumbration. The first is that we are looking at the danger, not the reality, of unfair prejudice. The second is that it is unfair prejudice, with the emphasis on the word "unfair", in that a prejudice to the case of the accused is not an unfair prejudice in proceedings. Lastly, the danger of unfair prejudice must take account of the proceedings as a whole, and the directions that will be given by the trial judge as to the use that may be made of material. 12. Section 135 confers a discretion on a court to refuse to admit evidence, certainly if there were a danger that it is unfairly prejudicial, or a danger that it might be misleading or confusing or cause or result in a waste of time. I do not deal with the issue contained in s 135(c) of the Evidence Act. 13. It seems to me that if s 137 were satisfied, there is no work for s 135(a) to do. I have in other proceedings and another context suggested that misleading or confusing evidence is probably unfairly prejudicial in any event. But to the extent that the term, as being more confusing, adds to the unfair prejudice, it seems to me s 135(b) has work to do beyond that contained in s 137. 14. I have earlier indicated a view that the fact that money is said to be owed by the Australian Taxation Office is a fact relevant and not prejudicial. The converse would be bizarre. That is, the proposition that a person could be prosecuted for the obtaining of a financial advantage by deception in relation to a tax fraud case in circumstances where the tax department says the person owed no money would be a bizarre proposition, and obviously the Crown should be in a position to show that the tax department says money is owed in relation to each of the years for which a charge has been preferred. 15. However, the calculation of the amount owing depends upon questions fundamentally different from those to which the jury must pay attention. The jury must take into account the ordinary meaning of the term "income", and a common sense view as to whether the income as alleged to have been earned by Mr Pratten was in fact earned by him, as distinct from one or other entities. 16. Of course the jury must be directed on the proper interpretation of the Income Tax Assessment Act 1997, as relevant to transactions between Mr Pratten and controlled entities. By that I mean entities over which he in fact exercises control. Whatever be the effect of the Income Tax Assessment Act, that is a matter in relation to which the Court, constituted by me, will direct the jury. 17. A default assessment may take into account a range of other factors, for example, the voiding of transactions under the administrative powers that are reposed in the Tax Commissioner. Therefore, a default assessment may not necessarily reflect that which would be owed, taking into account the issues that the jury must take into account, in determining the charges with which they must deal. 18. In those circumstances, it seems to me that the tender of this exhibit is unfairly prejudicial, and any probative value that it may have and has been overcome by evidence that has already been adduced as to what, in fact, should have been the subject of declaration. On that basis, the unfair prejudice outweighs its probative value, and I decline to admit the evidence in accordance with the requirements of s 137 of the Evidence Act.