Supreme Court New South Wales Medium Neutral Citation: R v Agius; R v Castagna (No 9) [2018] NSWSC 2041 Hearing dates: 8 March 2018 Decision date: 08 March 2018 Jurisdiction: Common Law Before: Adamson J Decision: File note admitted Catchwords: PRACTICE AND PROCEDURE – whether file note of accountant is a business record – whether it was prepared in contemplation of legal proceedings – whether it should be excluded under s 135 of the Evidence Act 1995 (NSW) – document admitted Legislation Cited: Evidence Act 1995 (NSW) ss 69, 135 Category: Procedural and other rulings Parties: Regina Robert Francis Agius (Accused) Anthony Dante Castagna (Accused) Representation: Counsel: P McGuire SC/A McGrath (Crown) WP Lowe (Accused Agius) P Strickland SC/S White SC/S Callan (Accused Castagna) Solicitors: Commonwealth Director of Public Prosecutions (Crown) David J Cohen & Co (Accused Agius) Hazan Hollander Lawyers (Accused Castagna) File Number(s): 2016/136935; 2016/137095 Judgment: EX TEMPORE 1. The Crown seeks to tender certain segments of a file note prepared by William Nussbaum of HLB Mann Judd on 10 May 2009 (which has been marked Exhibit A on the voir dire). He was relevantly a director of the firm at that time and in charge of performing tax work and preparing tax returns on behalf of the accused Castagna. Objection has been taken to the admissibility of this document on a number of bases. Before I turn to those bases I should record that the Crown contended that the document, being a file note of a tax director of HLB Mann Judd (who had the same status and responsibilities as a partner, but no equity in the firm), was, relevantly, a business record since it formed part of the records kept by HLB Mann Judd for the purposes of its business as an accounting firm. 2. The passages relied on in the file note are: the name of the client, relevantly the accused Castagna; the date, 10 May 2009: the description of the document as a file note: and the following extract which appeared at the foot of the document: "We have not advised you in relation to any foreign income and interest you may have." 1. Mr Nussbaum gave evidence on the voir dire to the effect that he made that note at around the time he had a conversation with Mr Hazan, the solicitor for the accused Castagna. The words I have just quoted were not said to Mr Hazan but they were noted down by Mr Nussbaum as he was then thinking that it might be appropriate for such wording to be included in correspondence with Dr Castagna. As it happened, wording corresponding to that note was not in fact included in correspondence. 2. Mr Nussbaum confirmed on the voir dire that what he wrote represented his thoughts or state of mind at the time which he did not communicate to Mr Hazan, although he may have discussed it with his colleagues at the time. 3. I am satisfied that the document is a business record within the meaning of s 69 of the Evidence Act 1995 (NSW) (the Act). 4. Mr White SC, who appears on behalf of the accused Castagna, submitted that the file note did not fall within the exception to the hearsay rule in s 69 because of the effect of s 69(3). Section 69(3) excludes from the exception a document that was prepared or obtained for the purposes of conducting or for or in contemplation of or in connection with an Australian or overseas proceeding. This submission is based on the following line in the file note (which is not sought to be tendered by the Crown): "May sue us for repudiation of contract". 1. Although this note indicates that Mr Nussbaum turned his mind to a possibility that his firm would be sued, it does not appear to me that this note meets the threshold in s 69(3) of the Act. Accordingly I would not regard it as a reason why the exception to the hearsay rule for business records was inapplicable. 2. Mr White submitted further that there was no foundation for the statement relied upon in the file note as no evidence had been adduced on the voir dire of Mr Nussbaum's knowledge of the asserted facts. I accept the Crown's submission that there has been ample evidence already led in the course of the trial as to Mr Nussbaum's involvement with the tax affairs of the accused Castagna, which appears to have begun from at least 13 January 1999 when he was an employed accountant at the firm and continued through to 2002 when he became a director. Mr Murrell, the former tax partner at HLB Mann Judd who was in charge of Dr Castagna's affairs, gradually reduced his hours following his retirement. Mr Nussbaum's responsibility with respect to Dr Castagna's tax return increased accordingly. 3. Mr White also submitted that I should refuse to admit the evidence in the exercise of my general discretion to exclude evidence pursuant to s 135 of the Act. He submitted that the probative value of the file note was substantially outweighed by the danger that the evidence might be unfairly prejudicial to the accused Castagna. He contended that there was a considerable risk that the jury might give undue weight to the statement in the file note having regard to its date and the breadth of its content. Mr White fairly conceded, in effect, that if the word "we" in the extracted passage read "I", the alleged prejudice relevant to s 135 would not be as strong. 4. In my view, to suggest that a jury would place undue weight on the file note made by Mr Nussbaum merely because he used the word "we" rather than the word "I" underestimates the capacity of the tribunal of fact to take into account the context in which the file note was made; the identity of the person who made it; the knowledge of that person; and the relevance of his involvement in the preparation of the accused Castagna's tax returns. I am satisfied that the jury would be able to appreciate that Mr Nussbaum's appreciation of the facts as expressed in the file note was limited by his involvement with the firm and his knowledge of file notes and could not, as it were, cover the universal set of meetings at which he was not present or matters which occurred before he was involved in the accused Castagna's tax affairs. 5. Thus, although the file note is prejudicial, and presumably that is the reason the Crown wishes to tender it, I do not regard it as being unfairly so. It has probative value. I do not regard the probative value as outweighed, whether substantially or minimally so, by any risk that the evidence might be unfairly used by the jury. Accordingly, I admit those discrete passages in Exhibit A on the voir dire extracted above. ********** 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: 06 March 2019