Supreme Court New South Wales Medium Neutral Citation: R v Agius; R v Castagna (No 10) [2018] NSWSC 2042 Hearing dates: 15 March 2018 Decision date: 15 March 2018 Before: Adamson J Decision: Questions relating to witness' understanding of Ex 2D32 rejected. Catchwords: EVIDENCE – relevance of one witness' understanding of particular advice to the understanding of the accused of that advice – irrelevant – question rejected Category: Procedural and other rulings Parties: Regina Robert Francis Agius Anthony Dante Castagna Representation: Counsel: P McGuire SC/A McGrath (Crown) P Lowe (Accused Agius) P Strickland SC/S White SC/S Callan (Accused Castagna) Solicitors: File Number(s): Commonwealth Director of Public Prosecutions (Crown)David J Cohen (Accused Agius)Hazan Hollander Lawyers (Accused Castagna) 2016/136935; 2016/137095 Judgment 1. Mr Strickland SC, who appears with Mr White SC and Ms Callan for the accused Castagna sought to ask Alan Haagensen, a witness for the prosecution, about his understanding of a particular paragraph of an advice given by Richard Edmonds SC on 6 March 2000 (Ex 2D32) in the context of the obligations of an Australian taxpayers to answer particular questions in his or her tax return. The Crown objected to the question on the basis of relevance. I rejected the question. The following are my reasons for the ruling. 2. The accused Castagna and the accused Agius stand charged with three counts of conspiracy: counts 1, 2 and 13. Counts 1 and 2 relate to tax fraud. Count 13 relates to dealing with the proceeds of crime. Counts 3-12 are alternative charges against the accused Castagna and relate to dishonest under-declaration of his income in his tax returns for ten consecutive years (1999 to 2008). It is part of the case of the accused Castagna that he relied on advice given by Mr Edmonds. 3. Mr Strickland submitted that it was relevant for the jury to know the "common understanding" of persons obtaining advice from Mr Edmonds concerning companies limited by guarantee and that Mr Haagensen was such a person. Mr Haagensen had given evidence (without objection) that in the early 1990's he had obtained oral advice from Mr Edmonds for a particular client (not the accused Castagna) to the effect that if an Australian taxpayer transferred money to a company limited by guarantee incorporated in Vanuatu the taxpayer would not have to declare an interest in the company in his or her Australian tax return. It was not suggested that Mr Haagensen had ever seen the written advice (Ex 2D32). However he confirmed that the following paragraph in the written advice was consistent with the oral advice he and his client had been given in the 1990's: "Finally, the company will not, in my opinion, be a controlled foreign company for the purposes of Part X of the Assessment Act and no relevant Australian resident will have an interest in the company for the purposes of Part IX of the Act. It follows, in my opinion, that the existence of the company will not need to be disclosed by any relevant Australian resident in his/her Australian tax return, as the form and the substance of the relevant disclosure obligations in those returns are presently cast." 1. This advice related to the following "issue in respect of which . . . advice is sought" identified in the preliminary paragraphs of the written advice: "4 the disclosure of the existence of such companies in Australian income tax returns filed by the Australian resident transferor or the members of his family resident in Australia." 1. Mr Haagensen had also been involved in making a suggestion to Mr Agius whom he understood had been asked by the Government of Vanuatu to comment on the proposed companies legislation. The suggestion was that the legislation ought provide that, on liquidation of a company limited by guarantee, the assets ought be distributed in accordance with the company's constitution, rather than (as provided for in the original draft circulated) to the members or guarantors. 2. Mr Haagensen's understanding of the paragraph set out above does not appear to bear on the understanding of the accused Castagna, which is the relevant matter. I do not accept that there is such a thing as a relevant "common understanding" as submitted by Mr Strickland, in circumstances where it was not suggested that Mr Haagensen obtained the advice for the accused Castagna or that the accused Castagna had any discussion with Mr Haagensen about what it meant. 3. Mr Strickland submitted, in the alternative, that Mr Haagensen's understanding was relevant to the reasonableness of the accused Castagna's understanding, which was, itself, relevant to a fact in issue. As referred to above, Mr Haagensen has already confirmed that the paragraph is consistent with oral advice he received. It was not suggested that there was any arcane interpretation of the advice which was relevant to the accused Castagna's understanding or that the words in the advice meant other than what they said (see above). In these circumstances I do not consider Mr Haagensen's understanding of the advice to be relevant to a fact in issue. To ask him to construe a document of which he was not the author for the purposes of establishing what was or was not in the mind of the accused Castagna ought not be permitted. The answer would be irrelevant and might tend to mislead the jury. 4. Mr Strickland also contended that Mr Haagensen had specialist expertise and that his opinion was relevant and important and could be used to interpret the advice for the jury in the context of the accused Castagna's obligations to answer questions in his tax return in a particular way. Mr Haagensen has indicated that he was not familiar with companies limited by guarantee and became aware of their utility through speaking with Mr Edmonds in the 1990's. However, even if Mr Haagensen were an expert in companies limited by guarantee, this would not assist the jury to determine the relevant question: namely, the state of mind of the accused Castagna when he received advice from Mr Edmonds about companies limited by guarantee and the effect this advice had (if any) on his answers to questions in his tax returns. ********** 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