The latest from the High Court: February 2019

ABUSE OF PROCESS

Practice and procedure – permanent stay – abuse of process

In UBS AG v Scott Francis Tyne as Trustee of the Argot Trust [2018] HCA 45 (17 October 2018) the High Court considered the power of courts to permanently stay proceedings as an abuse of process, where related proceedings were brought in another jurisdiction.

The respondent, Mr Tyne, started proceedings in the Federal Court in his capacity as trustee of the Argot Trust. The proceedings concerned representations made by UBS to Mr Tyne and, through him, related entities, including the former trustee (ACN 074) and an investment company (Telesto Investments Limited). At all times, Mr Tyne was the controlling mind of these entities. ACN 074, Telesto and Mr Tyne (in his personal capacity) had previously brought proceedings in the NSW Supreme Court arising out of the same facts and making essentially the same claims. In addition, UBS had earlier brought proceedings in Singapore against Telesto and Mr Tyne for default on credit facilities. Mr Tyne and the Trust ultimately discontinued their claims in the NSW proceedings. The NSW proceedings were then permanently stayed on the basis that Telesto was trying to re-litigate causes of action that had been determined in the Singapore proceedings. UBS applied to have the Federal Court proceedings stayed as an abuse of process. The claims in the Federal Court arose out of the same facts, and were essentially the same claims, as those in the NSW proceedings. The primary judge made the stay, because the Trust could and should have brought its claims in the NSW proceeding. A majority of the Full Federal Court allowed an appeal, in part because the Trust’s claims had not been decided on the merits.

A majority of the High Court allowed the appeal, reinstating the stay. The majority held that ‘timely, cost effective and efficient conduct of modern civil litigation takes into account wider public interests than those of the parties to the dispute’. In this case, the time to agitate the factual issues underlying the Trust’s claim were the NSW proceedings. After the final determination of those proceedings, UBS was entitled to think the dispute was at an end. It was an abuse of process for the Federal Court to allow for staged conduct of what is factually one dispute prosecuted by related parties under common control, with all the duplication, vexation and waste of resources that followed. Kiefel CJ, Bell and Keane JJ jointly; Gageler J separately concurring; Nettle and Edelman JJ jointly dissenting; Gordon J separately dissenting. Appeal from the Full Federal Court allowed.

CRIMINAL LAW

Evidence – context evidence – propensity evidence – uses of evidence

Johnson v The Queen [2018] HCA 48 (17 October 2018) concerned the admission of historical evidence of sexual misconduct other than the conduct charged for purposes of ‘context’. The appellant was tried and convicted of five counts of historical sexual offences against his sister. Count 1 concerned an indecent assault when the appellant was 11 or 12, and he was presumed doli incapax. At trial, to rebut the doli incapax presumption and to provide context of the relationship between the appellant and his sister, the Crown relied on evidence from the complainant about the appellant’s other sexual misconduct against her, including one that occurred in a bath. The Court of Criminal Appeal quashed the verdicts on charges 1 and 3, but rejected a contention that joinder of those counts with the others had occasioned a miscarriage of justice.

The High Court unanimously held that the whole of the evidence except for the evidence about the bath incident was admissible in respect of the remaining counts. The evidence was relevant context of the appellant’s highly dysfunctional family background. Its probative value outweighed its prejudicial effect. Although evidence of the bath incident should not have been adduced, its wrongful admission did not lead to a miscarriage of justice in light of jury directions and other relevant evidence. Kiefel CJ, Bell, Gageler, Nettle and Gordon JJ jointly. Appeal from the Supreme Court of South Australia dismissed.

CRIMINAL LAW

Evidence – tendency evidence – significant probative value

McPhillamy v The Queen [2018] HCA 52 (orders 9 August 2018, reasons 8 November 2018) concerned the admission of evidence of previous acts of sexual misconduct as tendency evidence.

The appellant was charged and convicted of six sexual offences against ‘A’ said to have taken place in 1995 and 1996. At the time of the alleged offending, A was an 11-year-old altar boy under the supervision of the appellant, an acolyte. The appellant’s case was that A had made up the allegations to get compensation from the Catholic Church. A had previously admitted to making false statements about part of the alleged offending in his compensation application. At trial, the Crown led evidence (over objection) from two men who alleged to have been the victims of sexual misconduct of the appellant in 1985. The evidence was led to show that the appellant had a sexual interest in male children in their early teenage years under his supervision. The evidence of the two men was not challenged at trial. The issue on appeal was whether the evidence had ‘significant probative value’. A majority of the Court of Criminal Appeal held that the evidence strongly supported the Crown case and was rightly admitted.

The High Court held that the evidence was capable of showing that the appellant had a sexual interest in young teenage boys (the first step of assessing the probative value of tendency evidence). However, there was no evidence to show that the tendency had manifested in the 10 years prior to the present charges (that is, that the appellant had acted on the sexual interest) and the previous conduct occurred in different circumstances. The evidence was not capable of significantly affecting the assessment of the likelihood of the appellant committing the offences alleged by A (the second step in assessing probative value). Kiefel CJ, Bell, Keane and Nettle JJ jointly; Edelman J separately concurring. Appeal from the Court of Criminal Appeal (NSW) allowed.

CRIMINAL LAW

Abuse of process – permanent stay – use of compulsory powers – fair trial

In Tony Strickland (a pseudonym) v Commonwealth Director of Public Prosecutions; Donald Galloway (a pseudonym) v Commonwealth Director of Public Prosecutions; Edmund Hodges (a pseudonym) v Commonwealth Director of Public Prosecutions; Rick Tucker (a pseudonym) v Commonwealth Director of Public Prosecutions [2018] HCA 53 (8 November 2018) a majority of the High Court granted permanent stays of criminal prosecutions following the unlawful use of powers conferred on the Australian Crime Commission (‘ACC’) for the purposes of the prosecutions. In December 2008, the ACC received information that a company, XYZ Limited (a pseudonym) was involved in criminal activity. The ACC referred the investigation to the Australian Federal Police (‘AFP’). The ACC also offered for the AFP to use the ACC’s coercive examinations powers. The ACC did not conduct its own investigation, but ‘acted at all times “as a facility for the AFP to cross‑examine under oath whoever the AFP wished, for the AFP’s own purposes”’. In 2010, each of the appellants was examined by the ACC. Each of the appellants had previously refused to participate in police interviews. AFP officers secretly watched each of the examinations and the ACC examiner made orders allowing for the dissemination of the examination material to the AFP and the CDPP.

In pre-trial argument, the primary judge ordered that the prosecutions be permanently stayed as an abuse of process. In reality, the examination process was driven by the AFP for its investigation. The material obtained from the examinations was used in the prosecution brief and to obtain further evidence. The prosecution had gained an unfair forensic advantage and the appellants had lost the chance to make forensic choices about how to run their trials. The Court of Appeal set aside those orders. Although the ACC had acted unlawfully, the prosecution had not been unfairly advantaged, nor the appellants unfairly disadvantaged. The High Court unanimously held that the ACC had acted unlawfully. There was no special ACC investigation; the statutory requirements of such an investigation were not met. The ACC had acted simply as a facility for the AFP to cross-examine the appellants for the AFP’s purposes. Kiefel CJ, Bell and Nettle JJ held that the prosecution had derived a forensic advantage, including by compelling the appellants to answer questions they had previously lawfully refused to answer, which locked the appellants into certain versions of events at trial (a forensic disadvantage). The material had been extraordinarily widely disseminated and the lack of clear records about dissemination meant it was practically impossible to try the appellants without subjecting them to forensic disadvantage. The continuation of the prosecution would also bring the administration of justice into disrepute. Keane J concurred on a narrower basis, holding that continuing the trials of the appellants would bring the administration of justice into disrepute because of the unlawful actions of the ACC and AFP, regardless of whether those actions caused ongoing forensic disadvantage. Edelman J separately concurred, agreeing with the reasons of Keane J. Gageler J and Gordon J separately dissented. Appeal from the Court of Appeal of the Supreme Court (Vic) allowed.

CUSTOMS AND EXCISE

Statutory interpretation – ‘possession, custody or control’ of dutiable goods

In Comptroller General of Customs v Zappia [2018] HCA 54 (14 November 2018) the High Court considered the level of authority or control needed to be in possession, custody or control of goods in a warehouse. The respondent was an employee of Zaps Transport (Aust) Pty Ltd, acting as the general manager and warehouse manager. His father was Zaps’ sole director. A warehouse operated by Zaps stored goods subject to customs control under the Customs Act 1901 (Cth). In May 2015, ‘dutiable goods’ were stolen from the warehouse. Section 35A(1) of the Customs Act relevantly provided that if a person who has or has been entrusted with ‘possession, custody or control’ of dutiable goods subject to customs control fails to keep those goods safely, a demand can be issued to that person to pay to the Commonwealth the amount of customs duty that would have been payable. A demand was issued to the respondent, his father and Zaps. Each of them sought review before the Administrative Appeals Tribunal (‘AAT’). The AAT affirmed the decision, finding that the respondent had sufficient control for the demand.

The Full Federal Court allowed an appeal on that point, holding that an employee of a warehouse licence holder, acting as an employee, does not have the necessary control. The High Court unanimously allowed the appeal. The Court held that an employee of a warehouse licence holder is capable of having the requisite control. The reference to ‘possession, custody or control’ is a reference to the degree of power or authority which is sufficient to enable a person to meet the obligations to keep goods safely and to be able to show the goods to a collector or satisfy a collector that goods have been dealt with in accordance with the Customs Act. A person with that level of authority meets the requirements of the section, regardless of how they may choose to exercise that power. This was not limited to the warehouse licence holder. In this case, the facts found by the AAT established that the respondent had the necessary control. Kiefel CJ, Bell, Gageler and Gordon JJ jointly; Nettle J separately concurring. Appeal from the Full Federal Court allowed.

Andrew Yuile is a barrister at Owen Dixon Chambers West in Melbourne.