When a criminal court finds that investigators and prosecutors have behaved badly, the usual framing of the defence application is all or nothing. Either the misconduct is grave enough for a permanent stay, and the prosecution ends, or it is not, and the trial goes ahead with whatever remedies the trial judge can supply. The Queensland Court of Appeal has now applied, as its actual order, the middle course Mason CJ described in the High Court more than three decades ago.
In Commonwealth Director of Public Prosecutions v Clarke (a pseudonym) [2026] QCA 219 (CDPP v Clarke), the Court upheld every challenged finding of grave investigative and prosecutorial misconduct, rejected the argument that the trial could simply be left to the trial judge to manage, and still set aside the permanent stay. In its place the Court ordered that the prosecution be stayed and not proceeded with without an order of the District Court, giving the prosecution 90 days to apply to proceed on undertakings, at [133]. The primary judge erred, the Court held, “by not formulating an order which permitted the appellant the opportunity to explore that possibility”, at [130].
What the Court decided
The respondent was indicted on a single count of attempting, by deception, to dishonestly obtain a financial advantage from a Commonwealth entity, at [1], arising from a research and development tax offset claim. After a 35-day hearing, the primary judge in the Supreme Court ordered a permanent stay, with reasons that “detailed findings of grave investigative and prosecutorial misconduct”, at [1]. The Commonwealth DPP appealed under s 669A(1A) of the Criminal Code (Qld), which permits a Crown Law Officer to appeal against an order staying proceedings on an indictment. It was common ground that the Court must apply the “correctness standard” to the decision to stay, at [5].
The bench was Bond JA, Brown JA and Bradley JA, and the reasons are a single judgment of the Court. The primary judge had given two alternative bases for the stay, at [12]: that compulsory questioning of the respondent by the Australian Taxation Office was unlawful, and, expressly independently, that the conduct of the investigation and prosecution as a whole was so oppressive that nothing short of a stay would protect the integrity of the court, at [16]. The Court said that “the outcome of this appeal turns on the appellant’s challenge to this second basis for the stay order”, at [21].
| Ground (all the DPP’s, unless stated) | What the Court did | Where |
|---|---|---|
| 1. The compulsory tax interview was not unlawful | Held: upheld. The first basis for the stay fell away, but this ground did not decide the appeal | [21], [25] to [29] |
| 2. Misconduct on the discontinued State charge was irrelevant, and the adverse findings of fact were wrong | Held: failed. No error shown in the findings of misconduct | [35] to [46], [109] |
| 2. The judge failed to consider means short of a permanent stay | Held: succeeded in part, and decided the appeal. A conditional stay substituted | [112] to [131] |
| Respondent’s notice of contention challenging R v Van Eps | Not argued or decided; reserved by the respondent for any further appeal | [30] |
The compulsory tax interview
ATO audit officers had examined the respondent under s 353-10 of Schedule 1 to the Taxation Administration Act 1953 (Cth), after meeting with the ATO’s criminal investigators the day before, at [9] and [10]. The primary judge found that a substantial purpose of the questioning was to gather evidence for a criminal investigation, and that it was unlawful, at [15].
The Court of Appeal disagreed. Questioning a taxpayer about suspected fraud or false invoices is consistent with administering the tax laws, at [26], and the audit function had not finished on the first day, at [27]. Where questioning has more than one purpose, including a legitimate audit purpose, “On settled principles, the primary judge could only conclude that the improper purpose was “substantial”, in the relevant sense, if he found that the identified questions would not have been asked at all but for the improper purpose”, at [28]. The primary judge had not conducted that counterfactual analysis. The Court concluded that “The prosecution should not have been stayed for that reason”, at [29].
That is a decided holding on ground 1, and it removed one of the two bases for the stay. It is not why the appeal came out as it did. The Court accepted, at [33], that its ground 1 conclusion could bear on the remedy question, but the outcome turned on the second basis, at [21].
Misconduct on a related charge
The same lead investigator had also driven a State fraud charge against the respondent, which the primary judge found to have been an abuse of process, continued for an unlawful collateral purpose, and finally discontinued in May 2021, at [41]. The DPP argued that misconduct on that charge was irrelevant to whether the Commonwealth charge should be stayed. Its fourth contention was put squarely: “Misconduct by an investigator in respect of one charge does not make the prosecution of a different charge oppressive or unfair”, at [42].
The Court said the submission “cannot be accepted or rejected in abstract”, at [36]. It turns on the connections between the conduct on each charge and on the conduct itself. Here the charges arose out of common circumstances, were investigated by the same officer and prosecuted by the same agency, at [37] to [39], and the investigator’s misconduct on the State charge also went to his credit as a witness on the Commonwealth charge, at [45]. The Court concluded that “As a matter of principle, the Court should not accept the appellant’s contention that misconduct in relation to one charge does not make prosecution of another charge oppressive or unfair”, at [46].
The challenges to the primary judge’s findings of fact then failed, the Court applying ordinary appellate restraint, at [47] and [109]. The investigator’s misconduct “was not accidental. It was not due to an oversight. It was deliberate”, at [116].
Not a binary choice
The Court began the remedy question from the orthodox position. It accepted as correct the DPP’s submission that a permanent stay is an extraordinary step and “will be granted only where no other means exist to protect the court’s integrity”, at [110], and noted the High Court’s description of a stay of civil proceedings in Willmot v Queensland [2024] HCA 42 as a last resort, at [111].
“Importantly, however,” the Court continued, “the response to proven prosecutorial misconduct does not require a binary choice between granting or refusing a permanent stay”, at [112]. It relied on Mason CJ in Jago v District Court (NSW) [1989] HCA 46, that “The court may mould its order to meet the exigencies of the particular case”, including an order that a proceeding be stayed and not proceeded with without an order of the court. It also cited Edelman J in Strickland (a pseudonym) v Commonwealth Director of Public Prosecutions [2018] HCA 53 on the need to consider less drastic curial measures, including undertakings by a conscientious prosecution team, at [113].
Two refinements follow. The DPP argued that the primary judge had to ask whether each particular instance of misconduct could have been remedied by a lesser measure. The Court answered that “In another case that may have been an appropriate approach”, but that where there has been wholesale misconduct in two prosecutions over an extended period, that approach would ignore the scale and total impact of the misconduct, at [114].
Nor would it do to leave everything to the trial. When the DPP’s counsel submitted that steps short of a permanent stay could be taken, they “were unable to identify those steps”, at [123]. The Court called the submission that the trial court could deal with the consequences “most unsatisfactory”, at [127], and said “There was something in the suggestion made by senior counsel for the respondent that such a trial could be characterised as a farce”, at [128]. A jury would be asked to accept as a witness of truth an investigator whom the primary judge had found, in undisturbed findings, to be neither credible nor reliable, at [126].
The decisive step came at [130]. Because the offending alleged was serious, “There is a strong policy reason in favour of permitting a trial to occur if the oppressive impact of the misconduct on the respondent and the risk to the public confidence in the administration of justice could be dealt with by some form of undertaking governing the way in which the appellant might seek to conduct the trial.” The primary judge’s error was not formulating an order that allowed that to be explored.
What it changes for practitioners
For defence counsel, the decision is a warning about the shape of the order sought. The permanent stay was set aside even though every challenged finding of misconduct survived. On this reasoning, the more complete submission explains why no undertaking could cure the oppression, and engages with the conditional order as an alternative.
For prosecutors, the decision is no licence. The Court made clear that a trial left to the trial judge to manage would be oppressive here, at [127] and [128], and that any application to proceed must be made “on particular and clearly formulated terms or undertakings”, with the respondent heard, at [131]. The burden of proposing a cure sits with the prosecution, and within a fixed time.
The related-charge reasoning matters too. Where the same investigator or agency has misconducted itself on a discontinued matter, the discontinuance does not, on the Court’s reasoning, quarantine the misconduct. Whether it counts depends on the connections between the two, and in this case they were close.
What remains unsettled
The case is not over. Whether the DPP can offer undertakings that sufficiently ameliorate the concerns “is something which this Court cannot presently assess”, at [131], and the Court did not say what undertakings would suffice. That is for the District Court on an application within the 90-day window.
The respondent’s notice of contention challenging R v Van Eps; Ex parte Commonwealth Director of Public Prosecutions [2024] QCA 46 was not argued and was reserved for any further appeal, at [30]. So the lawfulness of using compulsory tax answers in a later prosecution was not revisited. The alternative limb of ground 1, whether unlawful questioning was “grossly unlawful and improper”, was not reached, at [24] and [25].
Published 6 November 2026.
Closing observations
CDPP v Clarke gives practical effect to a power Mason CJ described in Jago in 1989. The misconduct findings stand, the prosecution cannot proceed as things are, and the trial court will decide whether any undertaking can cure what happened. For both sides of a stay application, the order between all and nothing now has to be argued.
Related reading
- R v Blacket: a jury’s question about unanimity did not justify a majority verdict direction
- R v HDE: the differences direction is not confined to the account of the offence
- Criminal law at Fraser Lawyers
- Contact Fraser Lawyers
Source: Commonwealth Director of Public Prosecutions v Clarke (a pseudonym) [2026] QCA 219, Supreme Court of Queensland, Court of Appeal, Bond JA, Brown JA and Bradley JA, heard 18 and 19 June 2026 and delivered 30 October 2026, on an appeal under s 669A(1A) of the Criminal Code (Qld) against a permanent stay ordered by Smith J. Section 669A was checked against the current compilation. The Commonwealth provisions are described as the Court described them.
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