Charles Bela Kovess v the Director of Public Prosecutions for the Commonwealth of Australia [1997] FCA 20 (10 January 1997)

CATCHWORDS

ADMINISTRATIVE LAW - Prohibition - Application for order prohibiting Commonwealth DPP from prosecuting offence under Companies Code (WA) - prosecution required to be instituted within 5 years unless brought with ministerial consent - complaint issued against defendant within time - defendant claimed complaint duplicitous - duplicity disavowed by counsel for complainant at committal - defendant tried on indictment (signed out of time) - motion to quash indictment as preferring new (ie several) and out of time charges rejected by District Court Judge - no appeal from Judge's decision under WA Code - defendant scheduled to be re-tried - jurisdiction of Federal Court to hear application - whether application vexatious - whether application merely seeking collateral advantage otherwise not available under law - whether prohibition would fragment criminal process - policy against fragmentation off set where re-trial had not commenced, where order of Federal Court would finally dispose of matter, and where order would be consistent with public interest in encouraging expeditious resolution of criminal charges.

Corporations and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code, s34

Criminal Code (WA), s611A(3)

Connell v The Queen (No 5) (1993) 10 WAR 424

Flanagan v Commissioner of the Australian Federal Police (1995) 60 FCR 149

Lessur-Millar (1990) 47 A Crim R 111

R v Rushton [1967] VR 842

Second Life Decor Pty Ltd v Comptroller-General of Customs [1994] FCA 1273; (1994) 53 FCR 78

Seymour v Attorney-General (Cth) (1984) 4 FCR 498

Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509

CRIMINAL LAW - Offences under Companies Code - defendant claim that complaint duplicitous - whether indictment (signed out of time) charged defendant with same offence or new (ie several) offence - construction of complaint and indictment.

Linehan v Australian Public Service Association (Fourth Division Officers) [1982] FCA 198; (1982) 66 FLR 90

R v Scaramanga [1963] 2QB 807

Walsh v Tattersall [1996] HCA 26; (1996) 70 ALJR 884

CHARLES BELA KOVESS v THE DIRECTOR OF PUBLIC PROSECUTIONS FOR THE COMMONWEALTH OF AUSTRALIA

No VG 707 of 1996

FINN J

CANBERRA

10 JANUARY 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIAN DISTRICT REGISTRY ) No VG 707 of 1996

)

GENERAL DIVISION )

BETWEEN: CHARLES BELA KOVESS

Applicant

AND: THE DIRECTOR OF PUBLIC PROSECUTIONS FOR THE COMMONWEALTH OF AUSTRALIA

Respondent

COURT: FINN J

PLACE: CANBERRA

DATE: 10 JANUARY 1997

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. the Director of Public Prosecutions be prohibited from proceeding on the Indictment of 10 January 1995 insofar as it relates to Charles Bela Kovess, without such ministerial consent as is prescribed by law for instituting proceedings for an offence at any time later than the period of 5 years after the act or omission alleged to constitute the offence.

2. the respondent pay the applicant's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIAN DISTRICT REGISTRY ) No VG 707 of 1996

)

GENERAL DIVISION )

BETWEEN: CHARLES BELA KOVESS

Applicant

AND: THE DIRECTOR OF PUBLIC PROSECUTIONS FOR THE COMMONWEALTH OF AUSTRALIA

Respondent

COURT: FINN J

PLACE: CANBERRA

DATE: 10 JANUARY 1997

EX TEMPORE REASONS FOR JUDGMENT

This is a quite distinctive proceeding. The applicant, Mr Kovess, has applied under s39B of the Judiciary Act 1903 (Cth) for an order prohibiting the respondent, the Director of Public Prosecutions for the Commonwealth of Australia ("the DPP"), from proceeding to prosecute Mr Kovess on an indictment that has been presented against him.

A sworn complaint was issued against (inter alia) Mr Kovess on 11 June 1993 in respect of offences alleged to have been committed on or about 16 June 1988. On 10 January 1995 the DPP signed the indictment the subject of these proceedings. The particular offence with which Mr Kovess was charged was one for which proceedings had to be instituted within five years of its alleged commission - unless the required ministerial consent had been given to its being instituted at a later time: see Corporations and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code, s34.

The substance of Mr Kovess' complaint in this proceeding is that the indictment, if it is effective at all, charges him with an offence different from that with which he was charged on 11 June 1993. In consequence, it is said, the indictment itself institutes a new proceeding which falls outside the prescribed five year limitation period. It will be necessary to refer below to the complaint and the indictment.

The matter of complication in all of this is that the claim now being made by Mr Kovess is not a fresh one. He has, in fact, already undergone a trial on this indictment. This occurred in May-June 1996 in the District Court of Western Australia (the "District Court"). The jury then was unable to agree in relation to the counts of present concern. These counts have been listed for retrial in April 1997.

Prior to the abortive trial, Mr Kovess moved in the District Court to quash the indictment under s614 of the Criminal Code (WA). One of the two grounds there relied upon was substantially that advanced before me. Her Honour Judge Yeats rejected the motion and, as I have noted, a trial on the indictment proceeded.

It is important to note that there could be no appeal from her Honour's decision unless and until Mr Kovess was convicted on the indictment: see Connell v The Queen (No 5) (1993) 10 WAR 424. It equally seems the case that her Honour's ruling remains an operative one for the purposes of the retrial: see Criminal Code, s611A(3) - or such at least is the uncontested submission of the DPP.

Before considering the substance of the application, it is appropriate to refer, first, to the objections raised by the DPP to my proceeding to hear it at all.

Preliminary Objections

The DPP has submitted that I should either summarily dismiss the application or else should exercise my discretion adversely to it because -

(i) it is vexatious and an abuse of process to litigate the same issue as has already been raised unsuccessfully in the District Court;

(ii) this court's jurisdiction should not be invoked for the purpose of gaining a collateral advantage; and

(iii) the application, if entertained, will fragment the criminal process already in train in the State court without there being exceptional circumstances for so doing.

As to the first of these - that the application is an abuse of process: see Federal Court Rules O20 r2 - this Court has held it to be vexatious and an abuse for a litigant to seek to agitate before it the very same issues and facts that were pursued unsuccessfully before the courts of a State: see Lessur-Millar (1990) 47 A Crim R 111. Had Mr Kovess had the opportunity to appeal Judge Yeats' decision and failed to do so or else failed in that appeal, I would have regarded this proceeding as vexatious. But he has had no such opportunity. I regard this consideration as distinguishing this case from ones of the type exemplified by Lessur-Millar. In that case there was not only an unsuccessful appeal to the Court of Appeal of New South Wales but also an unsuccessful application for special leave to the High Court of Australia.

Unless this application is objectionable on one or other of the remaining grounds pressed by the DPP, I do not consider the unsuccessful application to Judge Yeats would of itself justify my making an order under O20 r2.

The second objection raised - that of collateral advantage - relies upon the circumstance that to allow this form of application would be to grant a right of review of Judge Yeats' decision in circumstances where no right of appeal has as yet accrued under State law. Such a right of review is alleged to be an objectionable collateral advantage in that, but for the fortuitous circumstance of the DPP being an officer of the Commonwealth (and hence subject to Federal jurisdiction), the applicant would not be able to obtain a review of her Honour's decision unless and until he was convicted.

It is not open to question but that a proceeding will be dismissed as abusive if brought as a means of obtaining some advantage for which the proceeding is not designed or some collateral advantage beyond what the law offers: Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509. This Court, likewise, has expressed a strong and entirely appropriate disinclination to exercise supervisory control over the conduct of proceedings in State courts through the medium of proceedings under s75(v) of the Constitution or s39B of the Judiciary Act: see Second Life Decor Pty Ltd v Comptroller-General of Customs [1994] FCA 1273; (1994) 53 FCR 78.

While it is the case that Mr Kovess is able to bring this application because, and only because, the DPP is a Commonwealth officer, I do not regard that circumstance of itself as giving rise to a collateral advantage of the type envisaged in the abuse of process cases. It is simply a consequence of the then co-operative corporations law scheme to which (inter alia) the State of Western Australia committed itself.

Neither do I regard a challenge as such to the DPP's further pursuit of this indictment as a collateral advantage in the context of a corporations law prosecution. It is not to the point, in my view, to say that the accused in such a prosecution has an advantage in respect of challenging an indictment which is not ordinarily available to persons prosecuted under the "normal rules" applicable to criminal cases in Western Australia. That advantage is a by-product of the co- operative scheme.

Finally, and to anticipate the third objection, if this case is otherwise an appropriate one in which to interfere notwithstanding the general approach taken to fragmenting criminal proceedings, then it will for the same reason be unobjectionable on the score of amounting to the exercise of supervisory control over State courts.

Given my conclusions so far, it is the third objection - that of fragmentation - which bears the real burden of the DPP's preliminary challenge to this application. Again there is no dispute as to the principle which is to be applied. It is that:

"criminal proceedings should not be fragmented by other courts' entertaining, except in exceptional or extraordinary circumstances, applications of various kinds by or against one or more of the participants in the criminal trial"; Flanagan v Commissioner of the Australian Federal Police (1995) 60 FCR 149 at 187.

Importantly, though, in Flanagan the Full Court of this Court adverted to a distinction in types of application to "other courts" which seems peculiarly appropriate to the present. It was between (at 188):

(a) "claims for relief involving pure questions of law, emerging from a context of undisputed facts ..."; and

(b) "claims based substantially on contentious matters of fact, including questions of mixed fact and law".

The Court in Flanagan added:

"Prima facie there is much to be said in favour of the courts, in the exercise of their discretion, hearing and determining claims of type (a), ..., if they are brought forward at an appropriate time": ibid 188

Given (i) that an important consideration informing the non- fragmentation principle is "the public interest in the expeditious resolution of accusations of crime": Seymour v Attorney- General (Cth) (1984) 4 FCR 498 at 501; (ii) that this application in its burden is such as promotes that objective in that, if successful, it will bring finality to this matter (unless a later ministerial consent is given); and (iii) that it has been brought before the commencement of the retrial - I am of the view that the case is one in which, exceptionally, the Court should entertain the application.

The Application

Mr Kovess' complaint, as I have noted, is that, by the present indictment, a proceeding was instituted against him outside the prescribed 5 year period of limitation. The essence of this is that while a complaint was issued against him within the limitation period in respect of a particular offence, the subsequent indictment which was signed outside the limitation period charged him with different offences. The indictment was, in other words, a new proceeding and one instituted beyond the limitation period.

The original complaint issued against Mr Kovess charged him as an accessory to an offence under s129(5) of the then Corporations Code committed by a Mr Abbott, Mr Fitzsimmons and Mr Reid. These three were also proceeded against in the same complaint. Insofar as presently relevant the complaint was as follows:

"3. AND FURTHER AND IN THE ALTERNATIVE TO COUNT 1 THAT on or about the 16th day of June 1988 at Perth in the said State and elsewhere HAROLD ABBOTT, PAUL FERGUSON FITZSIMMONS and PETER ALEXANDER LANG REID being officers of Kia Ora Gold Corporation NL were knowingly concerned in a contravention by Kia Ora Gold Corporation NL of section 129(1) of the Companies (South Australia) Code namely, that on or about the 16th day of June 1988 at Perth in the said State and elsewhere Kia Ora Gold Corporation NL, a company incorporated in South Australia, gave financial assistance to the value of approximately $12M in connection with the acquisition of shares in Kia Ora Gold Corporation NL by Duke Holdings Limited, contrary to section 129(5)(and section 572(1)) of the Companies (South Australia) Code in conjunction with section 568 of the Companies (Western Australia) Code.

4. AND FURTHER AND IN THE ALTERNATIVE TO COUNT 2 THAT on or about the 16th day of June 1988 at Perth in the said State and elsewhere CHARLES BELA KOVESS was knowingly concerned in the offence by HAROLD ABBOTT, PAUL FERGUSON FITZSIMMONS and PETER ALEXANDER LANG REID referred to in count 3, contrary to section 38(1) of the Companies and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code."

I note in relation to count 4 that Mr Kovess is said to have been concerned in "the offence" by Abbott, Fitzsimmons and Reid. I emphasise the use of the singular. I would also note that the date of the offence alleged against Mr Kovess was 16 June 1988. The complaint was issued on 11 June 1993, just within the 5 year limitation period.

At committal proceedings in June 1994 in the Perth Court of Petty Sessions, Mr Kovess raised the issue whether count 4 of the complaint was itself "duplex", ie did it in fact charge him with being knowingly concerned in the commission of three separate offences committed by Mr Abbott, Mr Fitzsimmons and Mr Reid respectively. The response made to this by Mr Martin QC (who appeared for the complainant, the Australian Securities Commission) in denying any issue of duplicity, was consistent only with a submission on his part that a joint offence was being charged in count 3 and a single offence in count 4. An exhibit in the present proceedings is a copy of the pages of the transcript of the committal proceedings where this matter was raised. Here I would merely note of them that Mr Martin QC's reference to Mr Kovess' alleged offence was that he was knowingly concerned in "the commission of the offence by Mr Reid, Mr Fitzsimmons and Mr Abbott"; and that the Crown would have "to prove a case against the other defendants" before any question of his being "knowingly concerned in the offence" could arise: emphasis added.

The indictment signed by the DPP on 10 January 1995 was in form quite different from the complaint. Insofar as presently relevant, it provided:

"3. AND FURTHER INFORMS THE COURT THAT on or about the 16th day of June 1988 at Perth in the said State and elsewhere PAUL FERGUSON FITZSIMMONS being an officer of Kia Ora Gold Corporation NL was knowingly concerned in a contravention by Kia Ora Gold Corporation NL of section 129(1) of the Companies (South Australia) Code namely, that on or about the 16th day of June 1988 at Perth in the said State and elsewhere Kia Ora Gold Corporation NL, a company incorporated in South Australia, gave financial assistance to the value of $11,940,300.00 in connection with the acquisition of shares in Kia Ora Gold Corporation NL by Duke Holdings Limited, contrary to section 129(5) and section 572(1) of the Companies (South Australia) Code in conjunction with section 568 of the Companies (Western Australia) Code.

4. AND FURTHER INFORMS THE COURT THAT on or about the 16th day of June 1988 at Perth in the said State and elsewhere CHARLES BELA KOVESS was knowingly concerned in the offence by PAUL FERGUSON FITZSIMMONS contrary to section 38(1) of the Companies and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code in that PAUL FERGUSON FITZSIMMONS being an officer of Kia Ora Gold Corporation NL was knowingly concerned in a contravention by Kia Ora Gold Corporation NL of section 129(1) of the Companies (South Australia) Code namely, that on or about the 16th day of June 1988 at Perth in the said State and elsewhere Kia Ora Gold Corporation NL, a company incorporated in South Australia, gave financial assistance to the value of $11,940,300.00 in connection with the acquisition of shares in Kia Ora Gold Corporation NL by Duke Holdings Limited, contrary to section 129(5) and section 572(1) of the Companies (South Australia) Code in conjunction with section 568 of the Companies (Western Australia) Code.

5. AND FURTHER INFORMS THE COURT THAT on or about the 16th day of June 1988 at Perth in the said State and elsewhere PETER ALEXANDER LANG REID being an officer of Kia Ora Gold Corporation NL was knowingly concerned in a contravention by Kia Ora Gold Corporation NL of section 129(1) of the Companies (South Australia) Code namely, that on or about the 16th day of June 1988 at Perth in the said State and elsewhere Kia Ora Gold Corporation NL, a company incorporated in South Australia, gave financial assistance to the value of $11,940,300.00 in connection with the acquisition of shares in Kia Ora Gold Corporation NL by Duke Holdings Limited, contrary to section 129(5) and section 572(1) of the Companies (South Australia) Code in conjunction with section 568 of the Companies (Western Australia) Code.

6. AND FURTHER INFORMS THE COURT THAT on or about the 16th day of June 1988 at Perth in the said State and elsewhere CHARLES BELA KOVESS was knowingly concerned in the offence by PETER ALEXANDER LANG REID contrary to section 38(1) of the Companies and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code in that PETER ALEXANDER LANG REID being an officer of Kia Ora Gold Corporation NL was knowingly concerned in a contravention by Kia Ora Gold Corporation NL of section 129(1) of the Companies (South Australia) Code namely, that on or about the 16th day of June 1988 at Perth in the said State and elsewhere Kia Ora Gold Corporation NL, a company incorporated in South Australia, gave financial assistance to the value of $11,940,300.00 in connection with the acquisition of shares in Kia Ora Gold Corporation NL by Duke Holdings Limited, contrary to section 129(5) and section 572(1) of the Companies (South Australia) Code in conjunction with section 568 of the Companies (Western Australia) Code."

It is clear that in this indictment Mr Fitzsimmons and Mr Reid were charged with distinct offences and that Mr Kovess was being charged severally as an accessory in respect of each such offence. I should add, for the sake of completeness, that like charges were laid as well against Mr Abbott and Mr Kovess in the indictment. The Abbott/Kovess charges are not in issue in this proceeding, Mr Kovess having been acquitted of that particular charge in the May-June 1996 trial.

The bare issue before me is whether the complaint preferred:

(i) a charge against Mr Kovess that he was knowingly concerned in a joint offence of Mr Abbott, Mr Fitzsimmons and Mr Reid - in which case the indictment, charging Mr Kovess with involvement in several offences, is outside the limitation period: see on the joint offence/several offence distinction, R v Scaramanga [1963] 2QB 807; or

(ii) charges against Mr Kovess that he was knowingly concerned in the three several offences of Mr Abbott, Mr Fitzsimmons and Mr Reid - in which case, even though the charge in the complaint would be duplicitous, the indictment (merely reiterating those several offences) would not be open to objection on limitation grounds: see Linehan v Australian Public Service Association (Fourth Division Officers) [1982] FCA 198; (1982) 66 FLR 90 at 113.

It is appropriate to refer first to the DPP's submission on this issue. It is this. Count 4 of the complaint is admitted to be duplicitous and it is so because, it is submitted, count 3 charges Mr Abbott, Mr Fitzsimmons and Mr Reid individually with separate offences under s129(5) of the Corporations Code. Though count 4 refers to the "offence" in count 3, it in fact should be taken as referring to the three several offences charged in that count. The use of the singular in count 4 is, apparently, merely infelicitous.

The core of this submission is that the terms of s129(5) of the Companies Code are such as to make it simply impossible to allege a joint offence against the sub-section. That sub-section, relevantly, provides:

"If a company contravenes sub-section (1), the company is ... not guilty of an offence but each officer of the company who is in default is guilty of an offence."

Section 572(1) of the Companies Code for its part provides that an officer is "in default" in relation to a contravention:

"who is in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention or failure."

As I understand the submission it is that an officer can only be an offender under s129(5) if he or she falls within the requirements of s572(1), ie becomes an "officer in default". But by so doing that officer commits a several offence - hence s129(5) admits only of several offences, even where officers put into effect a common purpose which gives rise to a contravention.

Because of the interrelationship of counts 4 and 3 in the complaint I am being asked first to construe count 3 and only then to construe count 4 in light of the independent construction so given count 3.

I do not consider this to be an appropriate approach to the construction of this indictment. Standing alone, count 3 may be open to the construction that it in fact prefers several charges. I express no opinion on whether that is so. Considered with count 4, there is little room for doubt in my view that, for the purposes of count 4, count 3 is properly to be regarded as referring to a single offence - and one resulting from the action (necessarily joint) of Mr Abbott, Mr Fitzsimmons and Mr Reid.

The language of count 4 clearly envisages that only one offence was committed. And the terms of count 3 when considered in that light, while envisaging multiple offenders, is in my view reasonably open to the construction that only one (albeit a joint) offence was being charged. As I earlier indicated this view of the complaint was seemingly the one advanced by Mr Martin QC in his submission at the committal hearing on behalf of the complainant when responding to Mr Kovess' questioning of whether count 4 was duplicitous.

Whether or not it is legally possible to commit a joint offence against s129(5) is not a matter that I need determine. All I need determine in this proceeding is "the offence" with which Mr Kovess was charged, whether or not it was one legally possible to commit. Having said this, I would have to say that it is not apparent to me why s129(5) should be construed as precluding a charge of a joint offence - notwithstanding that the circumstances giving rise to such a charge, if made out, would necessarily sustain charges against the joint offenders severally. The Code provisions may well have been structured in a way which deprived a joint charge of any real purpose. Whether they preclude such a charge seems another matter.

It is not profitable to speculate upon why the counts in the complaint were drafted as they were, but they do, perhaps, betray some confusion between the "contravention" of s129 and the corresponding "offence" created by the section. Be this as it may, my conclusion is that Mr Kovess was charged in the complaint (whether appropriately or not) with being knowingly concerned in a joint offence.

That charge was not the one preferred in the indictment. Accordingly the indictment of 1995 and not the complaint of 1993 is to be regarded as instituting the current proceeding against Mr Kovess for the purpose of s34 of the Corporations and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code: cf R v Rushton [1967] VR 842. As such it is out of time.

This does not mean, though, that proceedings may not in the future be brought against Mr Kovess in relation to such complicity as he allegedly had in the s129(1) contravention referred to in the indictment. But what is required for that to occur is for ministerial consent to be given to the institution of proceedings out of time.

The following additional comments ought be made about this proceeding. First, I have not referred at all to Judge Yeats' decision in refusing to quash the indictment. This application is not an appeal from her decision. Neither does it involve judicial review of it. Ordinarily, out of deference to a trial judge, regard should be had to that judge's decision and its reasons. In this instance, matter was raised before me which was not drawn to her Honour's attention - (albeit unwittingly) - and I refer specifically to the issue of duplicity in the committal proceedings and to Mr Martin QC's submission on that issue. Given her reasons, I am by no means satisfied that her Honour's decision would have been unaffected had this material been brought to her notice.

Secondly, I would have to say that it is somewhat unseemly for the DPP now to be striving to uphold its prosecution by inviting a finding that the Australian Securities Commission's complaint was duplicitous - notwithstanding the law's deep rooted objection to duplicity: see Walsh v Tattersall [1996] HCA 26; (1996) 70 ALJR 884 - where, at the committal proceedings on that complaint, the Australian Securities Commission made precisely the contrary assertion about the complaint.

The order of the Court is that the Director of Public Prosecutions be prohibited from proceeding on the Indictment of 10 January 1995 insofar as it relates to Charles Bela Kovess, without such ministerial consent as is prescribed by law for instituting proceedings for an offence at any time later than the period of 5 years after the act or omission alleged to constitute the offence.

I order the respondent to pay the applicant's costs.

I certify that this and the preceding 19 pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

Associate

Dated: 20 January 1997

Counsel for the applicant : S K Wilson QC with A G Kiel

Solicitors for the applicant : Howie & Maher

Counsel for the respondent : S Mall

Solicitors for the respondent : Director of Public Prosecutions

Date of hearing : 17 December 1996

Date of judgment : 10 January 1997