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Chaudhry v State [2013] FJHC 241; HAM45.2013 (15 May 2013)

IN THE HIGH COURT OF FIJI
AT SUVA
MISCELLANEOUS JURISDICTION

Crim. Misc. Case No. HAM 045 of 2013

BETWEEN:

MAHENDRA PAL CHAUDHRY
Applicant

AND:

THE STATE
Respondent

BEFORE : HON. MR. JUSTICE PAUL MADIGAN

Counsel : Mr. P. Williams QC with Ms H. Phillips for the Applicant
Ms E. Yang with Mr. M. Korovou for the State

Date of hearing : 26 April 2013
Date of Ruling : 15 May 2013

RULING

[1] The Applicant who faces three offences against the Exchange Control Act, Chapter 211 Laws of Fiji, makes application to this Court to have the proceedings in respect of those offences permanently stayed on the grounds of (i) abuse of process; and (ii) that the offences charged are no known offences in Fijian Law.

[2] The applicant had previously been charged on the same Information with an additional five counts of money laundering and an additional four counts of making false statements in income tax returns. After a partially successful earlier Application for Stay before Goundar J, the money laundering charges were quashed on the grounds that the Court had no jurisdiction to try them and the four counts of making a false statement were permanently stayed; leaving the three instant charges which are the subject of the present application.

[3] Those charges read as follows:

FIRST COUNT

Statement of Offence

FAILURE TO SURRENDER FOREIGN CURRENCY: Contrary to section 4 of the Exchange Control Act (Cap. 211) and section 1 of Part II of the Fifth Schedule of the Exchange Control Act (Cap. 211).

Particulars of Offence

MAHENDRA PAL CHAUDHRY s/o Ram Gopal Chaudhry, between the 1st day of November 2000 and the 23rd day of July 2010, both dates inclusive, at Suva in the Central Division, being a resident in Fiji entitled to sell foreign currency but not being an authorized dealer however being required by law to offer it for sale to an authorized dealer, retained the sum of $1.5 million Australian dollars for his own use and benefit, without the consent of the Governor of the Reserve Bank of Fiji.

SECOND COUNT

Statement of Offence

DEALING IN FOREIGN CURRENCY OTHERWISE THAN WITH AN AUTHORISED DEALER WITHOUT PERMISSION: Contrary to section 3 of the Exchange Control Act (Cap. 211) and section 1 of Part II of the Fifth Schedule of the Exchange Control Act (Cap. 211).

Particulars of Offence

MAHENDRA PAL CHAUDHRY s/o Ram Gopal Chaudhry, between the 1st day of November 2000 and the 23rd day of July 2010, both dates inclusive, at Suva in the Central Division, being a resident in Fiji but not being an authorized dealer, did lend Australian dollars amounting to a sum of $1.5 million to persons otherwise than an authorized dealer, namely the Financial Institutions in Australia and New Zealand as listed in the Annexure marked "A", without the permission of the Governor of the Reserve Bank of Fiji.

THIRD COUNT

Statement of Offence

FAILURE TO COLLECT DEBTS: Contrary to section 26(1)(a) of the Exchange Control Act (Cap. 211) and section 1 of Part II of the Fifth Schedule of the Exchange Control Act (Cap. 211).

Particulars of Offence

MAHENDRA PAL CHAUDHRY s/o Ram Gopal Chaudhry, between the 1st day of November 2000 and the 23rd day of July 2010, both dates inclusive, at Suva in the Central Division, being a resident in Fiji having the right to receive a sum of $1.5 million Australian dollars from the Financial Institutions in Australia and New Zealand as listed in the Annexure marked "A", caused the delay of payment of the said sum, in whole or in part, to himself by authorizing the continual re-investment of the said sum together with interest acquired back into the said Financial Institutions without the permission of the Governor of the Reserve Bank of Fiji.

[4] The Court has an inherent and revisional jurisdiction to visit and adjudicate on this application. In the case of Hui Chi-ming v R (1992) the Privy Council described an abuse of process as something so unfair and wrong that the prosecution should not be allowed to proceed, and in the later case of AG of Trinidad and Tobago v Philip (1995) 1AC 396, the Privy Council held that the power to stay prosecution for abuse of process is exercised to protect persons from being prosecuted in circumstances where it would be seriously unjust to do so. Both of these cases were cited with approval by Goundar J in his ruling on a stay application by Sakiusa Tuisolia v Fiji Independent Commission Against Corruption HAM 122 of 2009. In that ruling Goundar J examined in some detail the important case law on stay for abuse of process and this Court could do no better than to reproduce his paragraphs 9 to 14 of the Ruling herein:

"[9] In R v Derby Crown Court, ex parte Brooks [1984] 80 Cr. App.R.164, Sir Roger Ormrod said:

"The power to stop a prosecution arises only when it is an abuse of the process of the Court. It may be an abuse of processes if either (a) the prosecution have manipulated or misused the process of the Court so as to deprive the defendant of a protection provided by law or to take unfair advantage of a technicality, or (b) on the balance of probability the defendant has been, or will be prejudiced in the prosecution of or conduct of his defence by delay on the part of the prosecution which is unjustifiable: for example, not due to the complexity of the inquiry and preparation of the prosecution case, or to the action of the defendant or his co-accused or to genuine difficulty in effecting service."

"[10] In Jago v The District Court of New South Wales [1989] HCA 46; (1989) 168 CLR 23, Mason CJ of the High Court of Australia said:

"To justify a permanent stay of criminal proceedings, there must be a fundamental defect which goes to the root of the trial of such a nature that nothing that a trial judge can do in the conduct of the trial can relieve against its unfair consequences...."

"[11] In a more recent case, the High Court of Australia in R v Edwards [2009] HC 20(21 May 2009) described stay of criminal proceedings as an extreme step that should be taken only if it is not possible to hold a fair trial.

"[12] In Moevao v Department of Labour [1980] 1 NZLR 464, Richmond P of the New Zealand Court of Appeal considered the doctrine of abuse of process and at p.470 said:

"....it cannot be too much emphasised that the inherent power to stay a prosecution stems from the need of the Court to prevent its own process from being abused. Therefore any exercise of the power must be approached with caution. It must be quite clear that the case is truly one of abuse of process and not merely one involving elements of oppression, illegality or abuse of authority in some way which falls short of establishing that the process of the Court is itself being wrongly made use of."

"[13] And further at p.482 Richardson P. added:

"The yardstick is not simply fairness to the particular accused. It is not whether the initiation and continuation of the particular process seems in the circumstances unfair to him. That may be an important consideration. But the focus is on the misuse of the Court process by those responsible for law enforcement. It is whether the continuation of the prosecution is inconsistent with the recognized purposes of the administration of criminal justice and so constitutes an abuse of process of the Court."

"[14] In R v Jewitt 1985 CanLII 47 (SCC), the Supreme Court of Canada held that the power to stay criminal proceedings should be exercised only in the clearest cases where compelling an accused to stand trial would undermine the community's sense of fair trial and decency and to prevent the abuse of a court's process through oppressive or vexatious proceedings."

[5] In those 6 paragraphs, Goundar J has succinctly and pertinently encapsulated some of the more important factors to be considered in this application and I adopt them with approval and have them in my mind when addressing the issue.

The Factual Matrix
[6] In May 2000, the applicant was holding office as Fiji's first elected Indo-Fijian Prime Minister. In a coup d'etat, led by a Mr. George Speight, he was removed from office and held captive within the confines of the Parliament Buildings for some 56 days before being released after intervention by the armed forces. During that period of captivity, the applicant (and his son) were tortured and injured.

[7] On his release, in need of medical treatment and being under threat for his safety the applicant went to Australia where he met the then Prime Minister (The Rt. Hon. John Howard) who offered him and his family permanent residency.

[8] In September 2000 the applicant travelled to India at the invitation of the Indian Government and it was during this visit that it was learned that funds were being raised by various interest groups in that country to assist the applicant and his family to re-settle in Australia.

[9] These funds were deposited directly into the applicant's personal account held with a bank in Australia, deposited by the Indian Consulate in Sydney.

[10] [In his submissions on this application, Counsel for the Applicant opines that "it was implicit that these funds should not be remitted to Fiji, because of the callous and cruel way the George Speight coup had treated the Indian people in Fiji, including Mr. Chaudhry and his son. It is clear that these funds would not have been donated if there had been any possibility that the funds would be remitted to Fiji." That submission is not supported by any evidence before this Court.]

[11] In the years following these deposits, whatever their purpose, they came to the attention of the taxation authority in Fiji (then called "FIRCA") and the applicant was requested to declare the income derived from the funds as taxable income being derived by a Fijian resident. The applicant co-operated with FIRCA and delivered up all documentation he was asked for.

[12] In December 2006 the present Prime Minister assumed office and one month later the applicant was appointed the Minister of Finance in that administration.

[13] In February 2008, the media raised public awareness of the existence of these Australian funds and allegations were made as to the provenance and the purpose of the funds, as well as the applicant's tax liabilities in respect of them.

[14] As a result of these public allegations, the applicant wrote to the Prime Minister recommending and requesting that an inquiry be conducted in relation to these monies, to their purpose and to his taxation liabilities relating thereto. The Prime Minister assented to this formal inquiry and wrote to the Applicant setting out conditions precedent. These conditions were accepted by the Applicant who undertook to fully co-operate and to surrender whatever documents were required.

[15] On March 10, 2008, the three person Board of Inquiry issued a "Report of Independent Inquiry into the taxation Affairs of Mahendra Pal Chaudhry", a report which exonerated the applicant in all taxation matters and which, in respect of issues arising under the Exchange Control Act, stated that there did not "appear" to be any breaches of the Act.

[16] The Prime Minister wrote to the applicant on 12 March 2008, and concluded his letter with the following sentence: "Given the findings of the [inquiry] team this matter is now no longer an issue as far as I and the Government is concerned."

[17] The day before (11 March) the Attorney-General made the contents of the report public in a press release and he concluded that release with these words: "The Prime Minister has considered the Report and is satisfied once again that there were no breaches of laws. The Finance Minister who is on leave will be back at work next Monday."

[18] The applicant subsequently resigned from his post as Finance Minister on August 18, 2008. [Counsel submits that a "significant schism would develop between the applicant and the Prime Minister" but again there is no evidence of that before the Court].

[19] Subsequently the Reserve Bank sought legal advice as to possible offences having been committed by the Applicant under the Exchange Control Act ("ECA"). These advices form an important part of the Applicant's grounds for stay both before Goundar J and before this Court.

[20] On the 23rd July, 2010 the applicant was charged with the present ECA offences.

The Application
[21] There having been a previous unsuccessful application to stay proceedings in respect of these partivular charges, the applicant seeks to renew it on the basis that circumstances have changed (the availability of M. Scott's affidavit), and that new issues are to be considered (mens rea, relevance of the charges etc). Counsel for the applicant submits that Goundar J's ruling was neither "final" nor "on the merits."

[22] The Applicant's first ground of application is that the funds which are the subject of the ECA charges have no connection whatsoever with Fiji, having been remitted from India directly to Australia and deposited into a personal account there held by the Applicant; an account that the Reserve Bank of Fiji had knowledge of since 2004. The purpose of the ECA is to protect the overall balance of payments and to preserve the use and availability of financial resources within this country thereby restricting the holding of and dealing in foreign currencies.

[23] In support of that first ground [lack of connection with Fiji's balance of payments] the applicant files an affidavit in support from one Michael Scott who has been a consultant to the Reserve Bank in Fiji for 25 years. Counsel for the Applicant submits that the affidavit "is highly probative of the proposition that the present prosecution of the applicant, pursuant to the Exchange Control Act is an isolated orphan without any precedent whatsoever."

[24] The applicant's second ground in support of Stay is on the basis of hardship and unfairness. Counsel submits that the penalties on conviction (which can include confiscation and up to three times the value in penalty) would be in total contradiction of the "philanthropic payment......designed to be retained by Mr. Chaudhry for his support outside Fiji" and furthermore such harsh penalties "would disregard unfairly the extreme pain, suffering, incarceration and punishment suffered by Mr. Chaudhry which occasioned the payment" and therefore it must be presumed that the legislature will not have intended such injustice. He further submits that the ECA must be read "in the light of present day circumstances and not according to the immediate post war conditions of its genesis."

[25] A third ground in support of the application is the inability of the prosecution to prove mens rea on the part of the applicant in committing these offences. He submits that although intention is not specifically referred to in the particulars of the offence, authorities that he cites, along with the severity of the penalties if found proved, dictate that, although not stated, mens rea must be imputed to be an element of each offence and there is no evidence whatsoever of the mens rea of the accused.

[26] A ground relating specifically to the second charge on the information (lending A$1.5 million to persons otherwise than an authorised dealer) is that the applicant was not a lender and any application of the monies at the time was never a "loan."

[27] A ground relating specifically to the third count on the information (causing delay of the payment of the sum to himself) is said by the applicant to be vitiated because there was in fact no delay and he was treating this deposit "in a perfectly normal way."

[28] As a final ground and indeed his principal ground, Counsel for the accused submits that an independent committee of enquiry established to investigate the Applicant's tax affairs and his liability for possible exchange control breaches came to certain conclusions which conclusions, counsel claims, "was to clear Mr. Chaudhry on all aspects of the charges now before this Honourable Court."

[29] Furthermore, and conterminous to this sanction of the committee, both the Prime Minister and the Attorney acted on the committee's findings, the Prime Minister in a letter to the applicant and the Attorney in Press Release. Counsel submits that the import of the words of both these very senior Government officials gave the applicant a "reasonable expectation" that he would not be prosecuted for any breaches of the law, neither in respect of his taxation affairs nor in respect of the ECA.

[30] In addition to these grounds relied on in support of the Application, Counsel made reference to certain actions of the Reserve Bank of Fiji and their Solicitors as well as the perceived inappropriate intervention of the then Governor of the Reserve Bank.

Discussion
[31] When initially alerting The Court to a renewal of an application to stay on the 21st September 2012, Mr. Rajendra Chaudhry, Counsel then appearing, told the Court that the application would be made on the basis of certain allegations made against the independence of the Judiciary by a former Judge of Appeal, one Mr. William Marshall QC. Those allegations are contained in an unsworn document, styled a "Petition", addressed to the Prime Minister which document consists principally of hearsay and unsubstantiated self-serving opinion. It is hardly surprising that the Applicant no longer seeks to rely on it.

[32] Without reference then to the original reasons given to this Court for this Application, the judgment of Goundar J, delivered on the 25th July 2012 has to be relevant and germane. The applicant seeks in many respects to revisit matters that were considered by Goundar J when he found that these ECA charges should not be stayed and should be dealt with. Contrary to the present submissions of the Applicant's Counsel, Goundar J's decision was final and it was meritorious, he having carefully analysed all arguments put before him. It cannot be said that a judgment is not final merely because it is not given in favour of the party seeking to revisit it, which is the position that Counsel for the Applicant seemed to be taking before this Court.

[33] In the case of Malakai Tuiloa HAM 10/07, Scutt J was hearing a second application for stay after an earlier refusal of stay by Winter J and she said (para 1.3):

"to succeed in this application Mr. Tuiloa will have to substantiate it by reference to matters beyond those upon which Winter J refused the stay"

and later (at para 4.2):

"Going through his Lordship's decision, it is apparent that the matters raised before him are again raised in the present application. It is essential to avoid revisiting and determining the very issues upon which His Lordship's decision rests. In effect to do so would be to appeal against Winter J's decision through this fresh application."

[34] While Counsel for the Applicant is correct in that, as is the case for bail, multiple applications for stay can be made in respect of the same proceedings, that can only be if there is new matter or there are new circumstances to be brought before the Court and relied upon in the application.

[35] However, as Counsel for the State points out, multiple "repeated collateral challenges and unmeritorious stay applications" should be deprecated. They refer to the Hong Kong Court of Appeal case of Yeung Chun Pong [2008] 3 HKLRD 1, affirmed by the Court of Final Appeal in (2009) 12 HKCFAR 867 where the Court observed:

63. "'There is clear public interest in ensuring that charges, once before a Court, must be tried. There is built into the system a host of safeguards to secure an accused a fair, and an appropriately speedy, determination. If those safeguards are not afforded in a particular instance, there is provided by the Legislature a prescribed appeal mechanism. That mechanism does not envisage interlocutory appeals or collateral challenges. That is for very good reason, namely, that in practice most trials would be constantly interrupted to the effective decision-making and the disruption of the system as a whole. .....

...... The outcome is that unwarranted applications to stay proceedings combined with collateral challenges themselves run the risk of abusing the Court's processes".

[36] This Court approves of and endorses those dicta.

[37] Learned Counsel's submissions that the judgment of Goundar J was not "on the merits" is misconceived. He cites the Michael Scott affidavit dated 20 March 2013 which he says was not taken into account by Goundar J. The Honourable Judge's ruling being handed down on 25 July 2012 obviously could not have taken into account an affidavit that was to be created some 8 months in the future, nor could he deal with issues such as mens rea or relevance of the monies in question to Fiji if those matters were never the subject of the application before him. For learned Counsel to argue that not having considered these matters means that the ruling was not "final" is a submission which is extraordinarily contrived and misconceived. On that argument no decision of any Court could ever be regarded as "final"; there always being the possibility of some future circumstance arising.

[38] The topics that the applicant says were not considered by Goundar J in his ruling of 25 July 2012, are new topics that this Court will consider in this renewed application but the Court will not revisit matters considered and decided upon after careful analysis by the Honourable Judge in July 2012.

[39] The applicant's ground that the funds remitted to Australia from India have no "nexus" with Fiji is not a matter for determination in an Application for stay. Stay in this application will be granted if this Court is of the view having analysed all submissions from opposing Counsel that the applicant has been the victim of abuse of process and a determination of that question should not and will not involve an examination of the expediency of the charges. Those matters are for the trial Court alone to decide. There may well be some force in the Applicant's submission in this regard but it is a matter that should be decided upon on a submission of no case to answer after the Prosecution evidence has been aired.

[40] The second ground advanced by the Applicant is one of "Hardship and Unfairness." Once again this application can not be decided on issues of sympathy and the likelihood of harsh penalties. The penalties provided for those convicted of these counts are certainly harsh, but those are in the province of the Legislature and it is not for a Court in advance of trial to stop a trial on the basis that conviction would lead to harsh and excessive punishment, given that harsh and excessive punishment is the lawful punishment for the offence.

[41] Learned Counsel concludes that the Exchange Control Act is a creature of the period immediately after the Second World War and must now in the 21st century be interpreted in a much more liberal fashion. He argues that it would be unjust to hold that these monies which were a "philanthropic payment ...... designed to be retained by Mr. Chaudhry for his support outside Fiji" should be caught by legislation and to force the monies to be repatriated would "disregard unfairly the extreme pain, suffering, incarceration and punishment suffered by Mr. Chaudhry which occasioned the payment."

[42] Such emotive sentiments have no place in the determination of an application for stay of proceedings which should be and will be determined on the law germane to such applications and nothing else. Issues of hardship and unfairness will be matters to be raised in mitigation should the matter ever get to that stage.

[43] The applicant's ground relating to mens rea is again a trial issue - a matter that would be dealt with in a submission of no case to answer.

[44] Similarly the matters raised in respect of there being no loan to substantiate the second charge and there being no delay which is an element of the third charge are issues for the trial Judge to rule upon after the prosecution evidence has been fully laid out before the Court. These issues can then be the subject of an application for no case on the grounds that there is no evidence of essential elements of the charges.

[45] The central plank to the Applicant's present application relates to the Investigation Report into his tax affairs and exchange control matters followed by the Prime Minister's and the Attorney's public comments in the light of the findings of that investigation. This ground along with the ancillary complaint of reliance on improper and unprofessional legal opinions was fully canvassed by Justice Goundar in a detailed and authority based analysis in paragraphs [25] to [39] of his ruling of 25 July 2012. This application can not be an appeal against that decision and this court declines to revisit the matters already meritoriously evaluated by the Honourable Judge therein.

[46] Learned Counsel's concerns about the role of the Reserve Bank in this prosecution along with a perceived conflict of interest on the part of the law firm Munro Leys were matters also dealt with comprehensively by Goundar J in his ruling and it will not be re-opened again in these proceedings.

[47] There is one matter that Goundar J did not consider and that is because it didn't exit at the time of his ruling. On the 20th March 2013, one Michael John Scott swore an affidavit which was filed in these proceedings and which Learned counsel heavily relied on in his submissions to the Court.

[48] Mr. Scott, a barrister of Auckland, NZ has been in practice for "more than 40 years."

[49] He deposes in his affidavit to have had professional connections with Fiji since 1973. He has worked in the Office of the Attorney-General, in the Inland Revenue Department; and even as Supervisor of Elections. During the period 1 June 2004 until 1 June 2009 he worked as a legal consultant to FIRCA and in particular dealing with issues of Inland Revenue. During the period 1984 until April 2009 he was also engaged as a Legal Consultant to the Reserve Bank of Fiji. He deposes to having advised the Reserve Bank on many issues but of great relevance to this application he advised on issues arising under the Exchange Control Act. He claims to be thoroughly familiar with the provisions of the Exchange Control Act.

[50] Mr. Scott deposes that in all the time he was with the Reserve Bank, he was never aware of the Bank requiring consent be given a Fijian resident to open a Bank Account overseas, nor was he aware of any publication of the Bank purporting to require such consent (i.e. for a resident to acquire consent to open a foreign account). He concludes his sworn deposition by stating that he knows of no other prosecution under the ECA "based on similar facts to the instant case."

[51] The Court accepts Mr. Scott's long experience and expertise in the context of Fiji's taxation milieu and within the regulatory sphere of our Reserve Bank, however the facts to which he purports to depose are not exactly apposite to the within application. As Counsel for the respondent submits, it is debatable whether the deponent properly understood or was informed of the basis for the ECA charges. The applicant is not charged with opening a foreign bank account whilst being resident in Fiji; he faces charges in relation to the retention and use of foreign monies held by him abroad and Bank policy in those circumstances has not been addressed by Mr. Scott. In any event, the fact that there might never have been a prosecution for a particular offence before cannot operate as a bar to ever charging somebody for that offence in the future. As long as the offence remains as part of the law of this country (which these offences most certainly do) they can be proceeded with if the DPP sees fit to charge them. His so doing cannot be an abuse of process merely because it is the first time such an offence has been charged.

[52] The Applicant has brought nothing new to this Court in support of his renewed application for Stay of Proceedings on the basis of abuse of process. The applicant has failed to demonstrate that the proceedings are vexatious or oppressive to the extent that this be a truly exceptional situation that would allow him to succeed.

[53] The application is dismissed.

Paul K. Madigan
JUDGE

At Suva
15 May 2013