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- Unreported Judgment
Erceg v Pizzichemi QSC 13
SUPREME COURT OF QUEENSLAND
Erceg v Pizzichemi  QSC 13
RAMONA LOREDANA PIZZICHEMI
386 of 2022
Supreme Court of Queensland
9 February 2024
2 February 2024
CRIMINAL LAW – GENERAL MATTERS – STAY OF CIVIL PROCEEDINGS PENDING CRIMINAL PROCEEDINGS – where the plaintiff has filed a civil proceeding then made a criminal complaint resulting in the prosecution of the defendant for fraud – where the defendant applied to have the civil proceeding stayed pending the outcome of a criminal proceeding – where the circumstances relevant to the criminal and civil proceeding are substantially identical – whether any prejudice to the plaintiff in having the proceeding stayed outweighs the prejudice to the defendant – whether the civil proceedings ought to be stayed pending the finalisation of the criminal proceedings
Flegg v Hallett  1 Qd R 191, 198, cited
ASC v Kavanagh (1993) 12 ACSR 69, 77, cited
McMahon v Gould (1982) 7 ACLR 202, considered
Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46, 59, 60, followed
Uniform Civil Procedure Rules 1999 (Qld) r 149(1)(b)
Evidence Act 1977 (Qld) s 92
C Ryall for respondent plaintiff
J Greggery KC for applicant defendant
Astley Associates for respondent plaintiff
Preston Law for applicant defendant
- The plaintiff in a civil proceeding, having filed a claim alleging fraudulent behaviour by the defendant, proceeded to make a criminal complaint. That resulted in the defendant being charged with offences based on the same factual allegations as the civil proceeding. The defendant in the civil proceeding predictably makes application for the stay of the civil proceeding pending the disposition of the criminal proceeding.
- It is not in issue that the defendant bears the onus of persuading the Court to exercise its discretion to interfere with the plaintiff’s right to progression of the civil proceeding by staying it. There is obviously a tension between the claims of that right as against those of a criminal defendant’s rights to silence and exercise of a voluntary choice whether to disclose or give evidence. The mere fact a defendant in a civil case is facing related criminal charges will not of itself justify a stay of the civil proceeding. It necessary to consider whether it occasions a risk of prejudice and to in turn weigh that and other relevant considerations in the required balancing of justice between the parties.
Is there a risk of prejudice?
- How precise must the defendant’s identification of risk of prejudice be? Requiring precise identification of prejudice may itself require the revealing of information, thus occasioning prejudice of a kind sought to be avoided by a stay application. In acknowledging that dilemma the High Court, in Commissioner of the Australian Federal Police v Zhao, found a defendant applicant in a matter of this kind is not required to precisely identify the specific matters of prejudice. The court reasoned the risk of prejudice could be inferred without more where “the offences and the circumstances relevant to both proceedings are substantially identical”.
- The present defendant submits that reasoning applies here. Review of the nature of the respective civil and criminal cases confirms as much.
- The civil case claims orders restoring ownership and possession to the plaintiff of the whole of a residential property at Smithfield as well a sum not exceeding $850,000 allegedly advanced on trust and loaned to the defendant. The case is founded in various ways on the alleged exploitation by the defendant and her now deceased husband, Francis, of the dependant relationship the plaintiff and her disabled daughter developed with them in an era when they assisted with the daughter’s care. There are three main complaints deriving from that alleged exploitation.
- First, the plaintiff’s civil case alleges in acquiring the house at Smithfield the plaintiff, induced by a false representation by Francis, allowed 50 per cent of the title to be transferred to Francis’s name, an interest which passed to the defendant on Francis’s death. It is alternatively alleged the transfer was procured by the undue influence of both defendants.
- Those facts attract a charge of fraud in the criminal case, by which it is alleged the defendant dishonestly induced the plaintiff to include Francis in the title. In trying to impute criminality to the defendant the prosecution case apparently relies upon the inducing falsity of Francis’s representation. The legal validity of such reasoning is not readily apparent but the present point is the same allegations are relied on.
- Second, the plaintiff’s civil case alleges, as a result of threats by Francis, the plaintiff transferred the remaining 50 per cent of her title to the Smithfield residence to Francis. It is also alleged this resulted from undue influence by the defendant.
- Those facts attract a second charge of fraud in the criminal case by which it is alleged the defendant dishonestly induced the plaintiff to transfer her share of the title. Again, each case relies on the same allegations.
- Third, the plaintiff’s civil case alleges, as a result of the undue influence of the defendant and Francis, $500,000 of the proceeds of sale of another property was paid to the defendant and Francis on trust for the plaintiff and her daughter and that another $100,000 was loaned by the plaintiff to the defendant and Francis and that a further at least $250,000 was paid to them towards the care and expenses of the plaintiff’s daughter. The loan has not been paid back and it is alleged the other monies are “believed misappropriated to a significant extent.”
- Part of those facts attract a third fraud charge in the criminal case, which alleges that on or about 30 April 2015 the defendant dishonestly obtained $500,000 from the plaintiff. The $500,000 is the same proceeds of the house sale referred to above. The criminal case alleges, as a result of the representations of the defendant and Francis, the plaintiff directed payment of the $500,000 to Francis, for him to use the funds under a “special disability trust” for the benefit of the plaintiff’s daughter. It is alleged the funds were not so applied and instead dissipated through multiple sub-$10,000 transfers and withdrawals. It is inevitable, despite the offence being presently charged as occurring when the $500,000 was paid, that reliance will be placed in the criminal proceeding on evidence of how the funds were subsequently applied. That is inevitable because proof of whether the funds were applied to the benefit of the defendant and Francis or to the benefit of the plaintiff’s daughter is relevant to the inference of the element of dishonesty. It follows this third charge also relies upon the same allegations as are being advanced in the civil case.
- The only component alleged in the civil case which is not duplicated by a criminal charge is $350,000 of the claim to $850,000. That claim necessarily involves detailed consideration of the fate of all expenditure of funds provided by the plaintiff, with inevitable overlap in tracing which funds relate to the $350,000 as distinct from the $500,000 component of the total. In other words, even if the fate of the $350,000 is not a constituent part of the alleged $500,000 fraud charge, it will likely be of material relevance in the process of proving and, for that matter, defending that charge.
- For these reasons the offences and the circumstances relevant to both proceedings are substantially identical. Applying Zhao, I therefore infer there is a risk of prejudice.
What relative weight do other relevant considerations have?
- The plaintiff’s counsel submitted that the force of the risk of prejudice in favour of a stay is tempered by the fact the defendant has already filed a pleaded defence. However, perusal of the defence reveals little about the evidence likely to be relied upon, unremarkably so given r 149(1)(b) Uniform Civil Procedure Rules 1999 (Qld) . In summary it denies the alleged representations and undue influence. It effectively asserts the $500,000 and the transfer of the title were gifts in recognition of all the defendant and Francis did for the plaintiff and her daughter, including Francis’s improvements and renovations to the house.
- Obviously, the evidentiary detail of what the defendant says occurred, not merely in communications with the parties but as regards physical dealing with property and the flow of monies, including the defendant’s documentary evidence thereof, is detail the defendant will in due course have to reveal in defending the civil proceeding. Yet it is detail the defendant has no obligation to reveal in a criminal proceeding. The prosecution’s advantageous possession and mastery of such detail in advance of the criminal proceeding would be the inevitable consequence of the continuation of the civil proceeding while the criminal case is pending. The continuation of the civil proceeding while the criminal proceeding persists would thus engineer the bypassing of the ordinary rights of the charged citizen in the criminal jurisdiction.
- How, it might be wondered, did it come to this? Is the dual emergence of these proceedings, so temporally disadvantageous to the defendant and advantageous to the plaintiff and those prosecuting the defendant, a mere coincidence? No. It is clear that after filing her civil claim the plaintiff then made a complaint to police about the same alleged misconduct and the police, acting on her complaint, charged the defendant. True it is, the criminal charges are brought by the police, not the plaintiff. However, it is well known that, with some exceptions of no present relevance, the police do not pursue criminal complaints without a complaint being made. It could not seriously be thought, nor has it been suggested, that the defendant would have been charged if the plaintiff had not chosen to make her complaint to the police.
- In considering the relative weight to be given to the plaintiff’s right to the ordinary progressing of her civil claim, it is relevant to bear in mind that if her case is correct, she has been deprived of significant assets. The evidence does not suggest she is destitute, but she has little prospect of any restoration of those assets without securing court orders. Delay in the meantime is financially disadvantageous. But assuming she believes her case is correct, she knew delay in securing favourable court orders was disadvantageous to her when she complained to the police.
- The plaintiff was of course as entitled to choose to make her complaint to police as she was to choose to initiate her civil case. But each was her choice. This is not a case in which the litigants’ competing rights are in jeopardy because others have caused the pursuit of a criminal case which happens to have some partial factual overlap with a civil case pursued by the plaintiff. Here, the litigants’ respective rights are in jeopardy because of the plaintiff’s choice to contemporaneously pursue civil and criminal complaints about the same alleged misconduct. The jeopardising of the plaintiff’s rights to the ordinary progressing of her civil claim is thus rendered less concerning than the jeopardising of the defendant’s rights in the criminal proceeding deriving from her complaint to police.
- The plaintiff’s counsel placed much emphasis on the plaintiff being elderly and the risk that she may become unable to give evidence or even die before the criminal case ends and the civil case – if stayed in the meantime – is heard. That is a real risk because progress of serious criminal charges through the committal phase is notoriously slow and its progress to completion further slowed by the cumbersome arrangement under which a different prosecuting agency then assumes responsibility for the prosecution. That obviously inefficient duplication of prosecuting agencies in the same matter ceased in Ipswich in 1994 and Brisbane in 1995 but remarkably, nearly 30 years later, still persists in Queensland’s other regional cities, to the disadvantage of alleged victims of crime in those regions, such as the plaintiff.
- It is to be borne in mind however that the plaintiff’s potential death or incapacity is less procedurally problematic in the civil jurisdiction than the criminal jurisdiction. In the event of the plaintiff’s death the civil proceeding can of course be continued by representatives of her estate. Moreover, s 92 Evidence Act 1977 (Qld) would allow the receipt into evidence at the civil trial of the plaintiff’s documentary statements about the facts alleged by her, in the event she dies or becomes unfit to give evidence. She has already made at least one such statement and it is presently within her capacity to make more. Section 92 does not apply to a criminal proceeding. It follows the age and frailty of the plaintiff, while relevant, are considerations of greater concern to the progressing of the criminal case than the civil case.
- The defendant’s counsel also submitted as relevant that if the criminal prosecution succeeds it is likely to materially shorten, if not lead to the resolution of, the civil case. I give that prospect neutral weight given it is also possible the criminal case, which seems to be substantially founded on the alleged wrongdoing of the defendant’s dead husband, will fail.
- Of the above-canvassed considerations it is clear those which favour a stay outweigh those against it. The balance of justice between the parties favours the granting of a stay of the civil proceeding pending the disposition of the criminal proceeding.
Should there be a stay now or after disclosure?
- The plaintiff’s counsel submitted, in the event of such a conclusion, that the stay should not commence until the conclusion of disclosure. This would doubtless require the defendant’s disclosure of many documents in the civil case, particularly financial records relevant to the movement and expenditure and subject of expenditure of money. The defendant’s civil disclosure obligation would thus allow the prosecution to be equipped with evidentiary material of relevance to the criminal proceeding, effectively depriving the defendant of the benefit of her right not to have to disclose such evidence to the prosecution in that proceeding. The consequential risk of prejudice is inevitable.
- The plaintiff’s counsel submitted otherwise, on the basis that most of the financial records would relate to events after the date of the alleged $500,000 fraud charge. However, as already explained, the evidence of the application of monies thereafter will inevitably be relevant to that charge.
- Further, it may well be the defendant is obliged to disclose other kinds of documents of relevance in the civil case and by that compulsory disclosure expose evidence of assistance to the prosecution in a criminal proceeding in which the defendant is supposed to have the right not to disclose such evidence. It is unnecessary to require detail as to the content of such documents. As already explained, such a requirement would defeat the very right sought to be protected. The inference of prejudice arises inevitably from the pursuit in the civil and criminal jurisdictions of substantially identical cases.
- It follows the balancing of justice between the parties requires the granting of the stay now, not at some later point.
- It will be necessary to hear the parties as to costs if costs are not agreed.
- I order:
- The proceeding is stayed pending the final disposition of the charges of fraud pending in the criminal jurisdiction against the defendant in which the plaintiff is an alleged victim.
- I will hear the parties as to costs if costs are not agreed in the meantime at 9.15am 16 February 2024, out of town parties having leave to appear by videolink or telephone.
 Flegg v Hallett  1 Qd R 191, 198.
 ASC v Kavanagh (1993) 12 ACSR 69, 77; also see the oft-cited list of considerations of Wootten J in McMahon v Gould.
 (2015) 255 CLR 46.
 Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46, 59, 60.
 Commissioner of the Australia Federal Police v Zhao (2015) 255 CLR 46, 59.
- Published Case Name:
Erceg v Pizzichemi
- Shortened Case Name:
Erceg v Pizzichemi
 QSC 13
09 Feb 2024