R v Ronald Edward Medich (No. 39) [2018] NSWSC 373

Supreme Court New South Wales

Medium Neutral Citation: R v Ronald Edward Medich (No. 39) [2018] NSWSC 373 Hearing dates: 21 March 2018 Date of orders: 23 March 2018 Decision date: 23 March 2018 Jurisdiction: Common Law Before: Bellew J Decision: See [30] Catchwords: CRIMINAL LAW – Evidence – Evidence of motive – Where Crown alleged that the accused was motivated to murder the deceased following breakdown of their previous relationship – Where breakdown lead to protracted litigation between the accused and the deceased – Where Crown sought to lead evidence of costs incurred by accused in that litigation – Evidence that accused had complained to others about the amount of costs he had incurred – Whether evidence of such costs relevant to motive Legislation Cited: Evidence Act 1995 (NSW) Cases Cited: Adam v R (2001) 207 CLR 96; [2001] HCA 57 Nye v New South Wales [2002] NSWSC 1270 R v Pearce [2001] NSWCCA 447; 48 ATR 390 Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 140 ALR 701 Category: Procedural and other rulings Parties: Regina (Crown) Ronald Edward Medich (Accused) Representation: Counsel: Ms S Harris and Ms G Wright (Crown) Mr W Terracini SC and Ms M Curry (Accused)

Solicitors: Director of Public Prosecutions (NSW) (Crown) Colin Daley Quinn (Accused) File Number(s): 2010/356916 Publication restriction: Nil

Judgment – ex tempore (revised) 1. The Crown has sought to tender evidence of legal costs paid by the accused in the course of, and/or as a result of, litigation in which he was engaged against the deceased and/or the deceased's entities. Objection has been taken on behalf of the accused to some, but not all, of that evidence. In order to deal with this issue it is necessary for me to briefly record some matters of context. 2. It is part of the Crown case that the accused was motivated to kill the deceased, and later intimidate the deceased's wife, because of a series of disputes in which they found themselves, which ultimately led not only to what might be described as a "falling out" between them, but also to litigation in this Court as well as (for a period) in the Federal Court of Australia. In the course of her opening address, the Crown Prosecutor said the following (commencing at T97.4): "[T]he Crown says that in determining whether or not the accused directed the murder and then the intimidation of Mrs McGurk, that you need to consider the relationship between the accused and the deceased and how their business dealings got to the stage where there were these extensive civil disputes between them. So the civil disputes explains their falling out. Now, the Crown case is that the business deals were ending badly for the accused, who was losing a significant amount of money, including the costs of the litigation, so the legal costs involved in the court cases." 1. It will be evident from that passage of the Crown's opening address that an aspect of the motive upon which the Crown relies arises from the cost, to the accused, of the litigation against the deceased. As I noted a moment ago, the accused raises no objection to much (indeed, to the majority) of the evidence of such costs. However, an objection has been raised to that part of the evidence relating to the costs incurred by the accused in what has been referred to in the trial as the "Tilley proceedings". 2. In her opening address (commencing at T99) the Crown took the jury to what she referred to as "the disputes between the accused and the deceased". The second of those disputes centred upon the Tilley proceedings, which the Crown commenced to outline at T106.28. That outline was consistent with that part of the statement of agreed facts (Exh. G) commencing at [32]. Wolseley Road Ronald Medich and Odeta Medich purchased 42A Wolsely Road, Point Piper in March 2003. On 12 October 2004, "Ron Medich Holdings Pty Ltd (RMH)" entered into a Deed with Sally-Ann Tilley regarding the sale and development of 42A Wolseley Road, Point Piper. RMH was to provide $7.5 million in vendor finance. On 13 October 2004 42A Wolsely Road, Point Piper is transferred from Ronald and Odetta Medich to Sally-Ann Tiley. On 8 September 2005, Ronald Medich lodged a caveat over 42A Wolseley Road regarding the $5 million vendor finance. On 30 November 2005, the Accused lodged a caveat over 20 Sutherland Crescent, Darling Point, regarding the further $2.5 million vendor finance. On 8 November 2006, Sally Tilley refinanced a $6.5 million loan previously given by NAB by entering into a mortgage with Bank West for $7.5 million. The mortgage was secured over 42A Wolseley Rd, Point Piper. On 11 December 2006 the accused and Odette Medich lodged a caveat over the property at 42A Wolseley Road In December 2007 (before the Accused went to Hawaii), Adam Tilley approached the Accused and told him that he needed money urgently as the banks were threatening to foreclose on the mortgage he had over 42A Wolseley Rd, Point Piper. The Accused agreed to provide another loan of $8,650,000. On 14 December 2007, the Accused appointed the Deceased with Power of Attorney over matters involving the Tilley development agreements. The Power of Attorney expired on 31 December 2007. Between 14 December 2007 and 21 December 2007, the Deceased organised the refinance of the Bank West mortgage over 42A Wolseley Road, Point Piper, and tidied up the previously largely undocumented arrangement between the Tilleys and the Medichs (by requiring the Tilleys to enter into two Loan Deeds, a Deed of Acknowledgment and two Deeds of Guarantee with RMP on 21 December 2007). These documents related to the loans for $7.5 million and $8,650,000. The due date for the repayment of the $7.5 million was "on demand" and the $8,650,000 loan was 21 June 2008. The Deceased registered two mortgages (AD663450P to secure the $7.5 million vendor finance) and (AD663451P to secure the $8,650,000 loan). On 15 May 2008, the accused and his wife Odetta Medich assigned the Loan Deeds, Deeds of Acknowledgments, Deeds of Guarantee and mortgages over 42A Wolseley Road, Point Piper to the Deceased. On 21 June 2008, the $8,650,000 loan was due. Adam Tilley offered the "first mortgage monies to pay the original debt" to the Deceased which he did not accept. 44. On 24 June 2008, the Deceased sent a letter of demand to Sally-Ann Tilley regarding the $8,650,000 due. On 27 June 2008, the Deceased registered three caveats over any real property in which the Tilley's have an interest. The loan was not repaid. On 8 August 2008 the Deceased sent a letter of demand to the Tilleys' for $8,111,935.91. The money was not received. Supreme Court Proceedings: 51060/2008 47. On 13 August 2008, the Deceased instituted proceedings in the Supreme Court seeking possession and sale of 42A Wolseley Road following non-repayment of the loan. On 9 October 2008, the Tilley's filed a cross-claim and cross-summons naming the Accused and the Deceased as the cross-defendants maintaining that the Tilleys entered into an oral agreement with the Accused in June 2004 regarding the development of Wolseley Road and that the Deed entered into on 13 October 2004 was to be read subject to this agreement. On 7 November 2008 the matter was listed before Bergin J in the Supreme Court who ordered the caveats over the Tilley properties be extended until further order of the Court. On 16 December 2008, a letter was sent from the Accused's solicitors to the Deceased's solicitors requesting the re-assignment of mortgages secured over 42A Wolseley Road back to the Accused. In late January 2009 Linkshore, Fernsha and Adam Tilley commenced urgent proceedings in the Supreme Court for the removal of a caveat lodged over a property at 62-64 New South Head Road, Edgecliff. On 3 February 2009 Bergin J made orders concerning the Linkshore Proceedings in accordance with short minutes of order. On 6 February 2009 Bergin J ordered the plaintiffs (in the Linkshore Proceedings) pay the costs of the Deceased. On 18 February 2009 the Accused and the Deceased file separate defences to the Cross-Claim by the Tilleys in the Supreme Court. On 16 March 2009 the Deceased's solicitors sent a Letter of Demand to the Accused's and RMP's solicitors requesting indemnity payments for costs incurred during the Tilley proceedings in the sum of $1.5 million and $3m for stamp duty. On 17 March 2009, "Ron Medich Properties" filed a cross-summons against the Deceased seeking a declaration that he held the mortgages AD663450P (securing $7.5 million) and AD663451P (securing $8.65 million) on trust for the Accused and Odetta Medich, orders that the trust property be conveyed and orders that equitable compensation and interest be paid. The Deceased did not transfer the Trust property, being the mortgages, back to the Accused and to RMP and to Odetta Medich. (amended as requested on 7.3.16) On 8 April 2009, solicitors for the Deceased sent a letter to solicitors for the Accused and RMP and Odetta Medich requesting that RMP pay all of the Deceased's costs incurred to date in the Tilley/Linkshore Proceedings, to pay stamp duty on the Declarations of Trust and to pay the Deceased's costs of taking advice in relation to the procedural steps of being removed as a plaintiff from the Tilley proceedings. On 8 May 2009, the Deceased filed a Second Cross-Claim against "Ron Medich Properties" seeking costs for acting in the proceedings and stamp duty on the first and second trust deed. On 13 July 2009, a letter was sent from solicitors for the Deceased to the solicitors for the Accused and RMP and Odetta Medich demanding payment of $153,487.63 as money owed to the Deceased for "Indemnities under Declarations of Trust". On 16 July 2009, a letter was sent from Clayton Utz to Holman Webb enclosing the cheques as requested. On 22 July 2009, Consent Orders were signed by the Accused, by RMP and Odetta Medich and the Deceased. (amended as requested on 7.3.16) The Accused, RMP and Odetta Medich agreed to indemnify the Deceased for any costs, stamp duty etc which had arisen by reason of the proper conduct of the Deceased in relation to the "First Trust" ($7.5 million loan) and "Second Trust" ($8.65 million loan) and remove the Deceased as a plaintiff in the proceedings. The Deceased agreed to transfer the mortgages back to the Accused, RMP and Odetta Medich. On 7 August 2009, mortgage AD663450P was transferred by the Deceased to RMP and mortgage AD663451P was transferred by the Deceased to RMP and mortgage AD663451P was transferred by the Deceased to the Accused and Odetta Medich. On 10 August 2009, the Deceased's solicitors sent to the solicitors for Accused, RMP and Odetta Medich a bill for $70, 228.45 for costs pursuant to the Consent Orders. On 10 December 2009, RMP paid $68,370 in costs to the Deceased's solicitors. 1. Having explained the Tilley proceedings (as well as other disputes which were said to have arisen between the deceased and the accused) the Crown then said in her opening address (commencing at T131.6): "So, members of the jury, in relation to all of those disputes, it is the Crown case that the multiplying effect of those disputes - the loss of control by the accused over his own interests, his losses in court, his legal costs, the resulting damage to his reputation and embarrassment that the accused felt at how he was being treated by the deceased - led to that complete breakdown of their business relationship and indeed their friendship, and there was no going back. Because of what came to be his hatred of the deceased, his wish developed to have him removed permanently from his life." 1. On the present application, two bundles of documents setting out the costs were tendered, although as matters transpired much of that material was extraneous to the real issue that I have been asked to determine. Also tendered was the declaration of trust referred to in [60] of Ex G as outlined above. 2. Mr John Kelly of senior counsel, who acted for the accused in the Tilley proceedings, was called to give oral evidence on the present application. Having said (commencing at T2582.15) that the Tilley proceedings had ultimately settled, Mr Kelly gave the following evidence: "Q. Yes. With respect to the proceedings in terms of their finalisation, was it by agreement? A. Finalisation as between Mr McGurk and the Medich parties? Q. Yes. A. Absolutely, on 22 July. Q. And, so far as you were concerned, the reason why you don't have the payment of costs at your fingertips is because that would be attended to by those that instructed you? A. Absolutely. I know what my own fees were and I know about the $150,000 because I advised that it be paid and I was told it was paid, but I don't know any other cost detail. Q. Do you have a recollection of Mr Medich indicating to you that he was happy with the settlement? A. On the morning of 22 July, at the conclusion of the conference I had with him starting shortly after 8 o'clock, he was overjoyed. HIS HONOUR Q. At the fact that the proceedings were settled? A. No, at the fact that he was getting his mortgages back and that he'd resolved amicably that dispute with Mr McGurk. 1. … Q. It is your evidence that he was happy with the settlement, but there had obviously been a dispute between him and the deceased for some time over those properties? A. Well, there was ‑ I think the short answer is yes, but not much of a dispute. It was only about whether, and, if so, in what amount, there should be a retention to secure Mr McGurk's, as trustee, lien or charge over trust property. The mortgages themselves as indivisible property provided value way in excess of anything that was reasonable to provide ‑ to secure that lien." 1. In the course of Mr Kelly's cross-examination, a copy of a cross-summons which was filed in the Tilley proceedings was tendered. That cross-summons, which Mr Kelly drafted, was brought by the accused, his wife Odetta, and Ron Medich Properties Pty Ltd against the deceased. It sought a number of orders against the deceased, including an order for equitable compensation. 2. When cross-examined, Mr Kelly gave evidence (commencing at T2585.33) that the Tilley proceedings had been "amicably resolved": "Q. The fact was, Mr Kelly, wasn't it, that the accused and deceased were fighting each other and suing each other over these Tilley proceedings, wasn't it? A. Certainly, yes, in answer to the suing but as to the fighting, it was amicably resolved. Once the parties came to grips with the substantial question, which is how to make a proper security for the cost risk under the Tilley cross-claim. HIS HONOUR Q. What do you mean the term "amicably resolved"? A. The afternoon before 22 July I had a number of conversations with Mr Pritchard, who appeared for Mr McGurk, and we had a conversation in which it was conveyed to me that Mr McGurk was keen to come to an arrangement that was satisfactory to everyone and they, too, were my instructions. In that sense, it was amicable. It was resolved in a straightforward - in a straightforward way in straightforward terms with no rancour or bitterness. No-one wanted to have a fight about it. That's what I mean by that phrase." 1. Mr Kelly described (commencing at T2586.7) the accused as being "happy" about the fact that he had been asked to pay the deceased's costs: "Q. In relation to your conference with the accused on the morning of 22 July 2009, did he initially express some reservations at having to pay the deceased's costs as part of that settlement? A. No, he didn't. No, he asked the question - as I was going through the terms and explaining each one and getting from him his instructions to give undertakings, the only question he raised was, "Why do I have to pay Mr McGurk's costs?", and I answered that question. Q. He wasn't happy about that, was he? A. Well, I think he was. He was happy with my answer." 1. Other evidence given before the jury also bears upon the present issue. 2. In the course of his evidence in chief, the Crown's principal witness, Fortunato Gattellari ("Gattellari") gave the following evidence (commencing at T363.27) of a conversation with the accused which he said took place before he was asked by the accused to arrange the deceased's murder: "Q. Had he said anything to you in relation to the deceased and a loss of control? A. He made some comment that he - Mr McGurk was made - was put in charge or in control of some properties, real estate, that Mr Medich owned and that he had lost total control of these properties and was doing all he could to get back the control. Q. And that was prior to him asking you to find someone to murder the deceased? A. Yes." 1. Gattellari's reference to those properties of which the accused had "lost control" is capable of being construed as a reference to the properties the subject of the Tilley proceedings. 2. Earlier, Gattellari had given evidence about the circumstances in which he said that the accused had asked him to arrange the deceased's murder. He was asked (at T347.14): "Q. As best you can, the words he said? A. Well, he would be pacing up and down the office saying, "That bastard is making me look like an absolute idiot. People in the eastern suburbs think I'm a fool", and things like that." 1. Commencing at T348.5, Gattellari was then asked: "Q. Was there a time when the accused, when he was being verbal and angry about the deceased, expressed that he wanted you to do something? A. Yes. I don't remember the exact time, but at one - one incident, or an incident that happened on that particular day, he was quite angry and upset and at that stage he asked me would I possibly help him out by finding someone to kill the bastard. Q. Do you remember the words that he used? A. Not exactly, but it was basically, you know, "I've got to do something about this. I've got to put an end to all this bullshit and if you can help me, find someone to kill him." 1. Later (at T348.28) Gattellari was asked: "Q. All right. Did he say anything about the court cases on that day, can you remember? A. Oh, he was always talking about the expense of the court cases and that things were not going very well for him." 1. There is also evidence of telephone intercepts (Ex BJ) to which the accused was a party and which are also relevant to this issue. 2. In a conversation with a Mr Howard on 26 May 2010, and in the context of particular proceedings which were then on foot (which I acknowledge were not the Tilley proceedings but other proceedings involving the deceased and/or his entities) the accused said: "Oh yeah fuckin' hopeless, but you know all as I'm doing is incurring legal costs galore, you know, and these people are just not getting the job done." 1. In another conversation on 12 July 2010, again with Mr Howard, the accused was recorded as saying: "I'll just talk to you about a coupla matters that are concerning these bloody cases and that you know...Fuck me. You know that they hit me for 40 grand for them losing that bloody caveat thing? This has turned out to be the joke of the century..." 1. The schedule sought to be tendered by the Crown in its case establishes that the legal costs paid by the accused for his own representation in the Tilley proceedings were, on any view, substantial. I do not include in that moneys paid to Kemp Strang Lawyers (which are in dispute and upon which I understand the Crown will no longer rely) nor some of the costs paid to Mr Kevin Munro, solicitor. It is apparent on the face of Mr Munro's Memorandum of Fees that some of the costs set out do not relate to the Tilley proceedings. Nevertheless, the costs paid to Clayton Utz Lawyers by the accused for his representation in the Tilley proceedings amounted to hundreds of thousands of dollars. There is also evidence that pursuant to the Declaration of Trust, and aside from his own legal costs, the accused was required to pay a substantial sum to the deceased. He was also requested to pay the deceased's legal costs in the Tilley proceedings of slightly less than $70,000.00. 2. The Crown submitted that the evidence of the totality of costs paid by the accused, including those incurred in the Tilley proceedings, was relevant to the issue of motive. It was submitted that the evidence going to the issue of motive should be viewed as a whole, and in the context of other evidence which, if accepted, establishes that the accused had complained about the cost of the litigation in which he had been engaged against the deceased. The Crown submitted that the costs of the Tilley proceedings were relevant to "the accumulation of costs" which the accused had been incurring and which, on the Crown case, had the effect of aggravating his feelings of resentment and hostility towards the deceased. 3. Senior counsel for the accused objected to the evidence on the ground of relevance and advanced three submissions in support of that position. Firstly, he submitted that the Tilley proceedings should be viewed as being separate from the other litigation in which the accused and the deceased were involved. Secondly, he pointed to the evidence of Mr Kelly that the accused had been "happy" with the settlement of the Tilley proceedings, and that they had been brought to an end. Thirdly, he submitted that in these circumstances the evidence was not capable of being relevant to motive, because there was no evidence that the accused was anything other than happy that the Tilley proceedings had settled. 4. Relevance of evidence is governed by s 55 of the Evidence Act 1995 (NSW) ("the Act) which is in the following terms: Relevant evidence (1) The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding. (2) In particular, evidence is not taken to be irrelevant only because it relates only to: (a) the credibility of a witness, or (b) the admissibility of other evidence, or (c) a failure to adduce evidence. 1. It is self-evident that the terms of s 55 are wide. The word "could" as it is used in that section has been construed to mean "it is possible that it may": Nye v New South Wales [2002] NSWSC 1270. Moreover, whilst the section requires that there must be some rational effect of the evidence upon the probability of the existence of a fact in issue, that effect may be direct, or it may be indirect: Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 140 ALR 701. 2. It should also be noted that relevance is to be determined on the assumption that the evidence in question is accepted: Adam v R (2001) 207 CLR 96; [2001] HCA 57. 3. In light of the way in which the Crown puts its case, and bearing in mind the evidence to which I have referred, the evidence of the costs incurred by the accused in the Tilley proceedings, both in terms of his own costs and those paid to the deceased, is relevant to the relationship which existed between them, and the deterioration of that relationship. These factors (along with others) are relied upon by the Crown case in support of the existence of a motive for the accused to want to have the deceased killed. There is, in my view, a clear and logical connection between the evidence of the costs paid by the accused in all of the proceedings (including the Tilley proceedings) and the issue of motive. 4. The accused raises no objection to the Crown leading evidence of other costs he incurred in other proceedings. The effect of the position taken by the accused on the present application was to seek to (for want of a better term) "quarantine" the costs in respect of the Tilley proceedings, on the basis that those proceedings were settled, and all costs were paid in full. That, in my view, reflects a somewhat artificial approach. It is also one which overlooks the width of the terms of s 55, as well as the fact that on the evidence, the accused paid hundreds of thousands of dollars to his own lawyers (leaving aside the other costs paid to the deceased) in the Tilley proceedings. The total amount he paid is obviously significant. 5. It would also be open to the jury to conclude, if Gattellari's evidence is accepted, that the issue of the Tilley proceedings was raised by the accused prior to his engaging Gattellari to carry out the murder. Gattellari has also given evidence which, if accepted by the jury, would support a conclusion that expense of the litigation was a matter which was on the accused's mind. That conclusion is also supported by the telephone intercepts to which I referred. I accept that the statements made in the course of those intercepts were made in the context of other proceedings against the deceased (or more specifically, his estate) which were then on foot, and not the Tilley proceedings. However, when the evidence is taken as a whole, it would be open to the jury to conclude that the totality of the costs paid by the accused in relation to the various proceedings in which he was, or had been, engaged against the deceased, was a source of ongoing consternation to him. 6. The evidence given by Mr Kelly, assuming for a moment that it will be before the jury in due course, does not mean that the evidence of the costs paid by the accused in the Tilley proceedings is irrelevant. If and when Mr Kelly is called, it will be a matter for the jury to assess his evidence, and the other evidence to which I have referred, and determine what weight is to be attached to it, and what conclusions should be reached from it. 7. It is for those reasons that in my view, the evidence of the costs incurred in the Tilley proceedings is relevant and admissible. 8. There is one further matter to which I should refer. In the course of the submissions made in respect of this issue senior counsel for the accused said (at T2589.26): "There is great potential, when it is put in a chart or a document like this, for it to be misleading." 1. I pointed out that whether or not the evidence might be misleading was a separate question, and that if the evidence was relevant, it would be admissible subject to it being excluded under some other section(s) of the Act. In response to that, senior counsel said: "Our point is that it is just simply not relevant." 1. It will be evident from the reasons given that I have determined the question before me according to the issue of relevance which was the sole basis of objection advanced on behalf of the accused. However, for the sake of completeness, and to the extent that the statement at [31] above might be construed either as (a) an objection to the schedule which the Crown wishes to tender, or (b) a submission that the evidence ought be excluded under s 137 of the Act (even though no express application for its exclusion on that basis was ever made), I make two observations. 2. Firstly, s 50 of the Act is in the following terms: Proof of voluminous or complex documents (1) The court may, on the application of a party, direct that the party may adduce evidence of the contents of 2 or more documents in question in the form of a summary if the court is satisfied that it would not otherwise be possible conveniently to examine the evidence because of the volume or complexity of the documents in question. (2) The court may only make such a direction if the party seeking to adduce the evidence in the form of a summary has: (a) served on each other party a copy of the summary that discloses the name and address of the person who prepared the summary, and (b) given each other party a reasonable opportunity to examine or copy the documents in question. (3) The opinion rule does not apply to evidence adduced in accordance with a direction under this section. 1. No objection per se has been taken to the schedule which the Crown proposes to tender, other than that outlined. Section 50 facilitates the simplification of issues by the use of a summary or chart of the kind which the Crown wishes to tender. Such a schedule has the effect of alleviating any need for the jury to examine a large volume of documents: R v Pearce [2001] NSWCCA 447; 48 ATR 390 at [125] per Smart AJ (Dowd and James JJ agreeing). The schedule in the present case fulfils the intention which underlies s 50. 2. Secondly, the suggestion that the schedule may be misleading is, in my view, without substance. There is nothing misleading about it at all. No issue has been taken on behalf of the accused as to the accuracy of its contents. The objections taken to it is limited to that which I have outlined. In those circumstances, there is no potential for the schedule to be misleading or to be misused by the jury in a way which might justify its exclusion pursuant to s 137. I again note that despite the reference to the potentially misleading nature of the schedule, no application was made for its exclusion under s 137. It follows from what I have said that had such an application been made, it would have been rejected. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 April 2018