Adler v Director of Public Prosecutions - [2004] NSWCCA 352

NEW SOUTH WALES COURT OF CRIMINAL APPEAL

CITATION: ADLER v DIRECTOR OF PUBLIC PROSECUTIONS [2004] NSWCCA 352 revised - 04/11/2004

FILE NUMBER(S):
2004/1927

HEARING DATE(S): 23 August 2004

JUDGMENT DATE: 15/10/2004

PARTIES:
Stephen Rodney ADLER v DIRECTOR OF PUBLIC PROSECUTIONS

JUDGMENT OF: Mason P Grove J Barr J

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): 2003/48

LOWER COURT JUDICIAL OFFICER: James J

COUNSEL:
Appellant: J K Sher / N Perram
Crown: D Fagan SC/ M Wigney

SOLICITORS:
Appellant: Gilbert & Tobin
Crown: Director of Public Prosecutions

CATCHWORDS:
Application for permanent stay of criminal proceedings - Corporations Act 2001 - prior civil penalty proceedings - whether abuse of process - whether double jeopardy - scope and validity of s1317P.

LEGISLATION CITED:
Corporations Act 2001 (Cth) ss1311, s1317P and 1400
Evidence Act 1995, s140(2)

DECISION:
Leave to appeal granted. Appeal dismissed.

JUDGMENT:

IN THE COURT OF
CRIMINAL APPEAL

CCA 2004/1927
MASON P
GROVE J
BARR J
Friday 15 October 2004

Rodney Stephen ADLER v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)

BACKGROUND

The appellant was a director of HIH Insurance Ltd, a public company carrying on business as an insurer. The appellant was arraigned by the Commonwealth Director of Prosecutions (DPP) on an indictment containing five counts of offences under the Corporations Act 2001 (Cth) (the Act) involving stock market manipulation and the making of false or misleading statements in relation to securities.

Before James J, the appellant sought an order that the criminal proceedings be permanently stayed on the ground that they were an abuse of process because of exposure to double jeopardy. It was submitted that as a result of earlier proceedings brought by the Australian Securities and Investments Commission (ASIC) under the civil penalty provisions of the Act, the appellant had already been punished for the conduct which is now the subject of the criminal charges brought by the DPP.

The Crown submitted that there were differences between the elements of the civil causes of action and the elements of the criminal offences, and that the two sets of proceedings had different purposes. The Crown also placed reliance on s1317P of the Act which permits criminal proceedings to be started against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision, even where a declaration of contravention has already been made.

James J refused the appellant’s application for a permanent stay. In the Court of Appeal the appellant sought leave to appeal from James J’s orders, submitting that his Honour erred in his reasoning in a number of respects. Reliance was placed on The Queen v Carroll(2002) 213 CLR 635 as authority for the proposition that commonality of facts, and not elements of the offence, are relevant to the rule against double jeopardy. Submissions were also received as to the validity of s 1317P.

HELD

Per Mason P (Grove and Barr JJ agreeing) dismissing the appeal:

1. The decision in Pearce v The Queen(1998) 194 CLR 610 is not limited in its application to cases in which multiple offences are charged on the same indictment. [39]

2. There is no abuse of process involved in the launching of the prosecution. [40]

The criminal offences are different in important respects from all of the causes of action in the civil proceedings. [33] [40]
The findings and orders made by Santow J were based on the civil standard of proof. [30] – [32] [40]-[43]
The decision in Rich v ASIC [2004] HCA 42 does not cast doubt on the civil nature of the proceedings previously brought by ASIC against the appellant.

3. Carroll v The Queen is distinguishable as in the present case the criminal charges are not inconsistent with the outcome of the earlier proceedings. [40] – [50]

4. It is unnecessary to resolve the issue raised as to the scope of s1317P and the related constitutional challenge. [51] – [53]

ORDERS

1. Leave to appeal granted.
2. Appeal dismissed.

IN THE COURT OF
CRIMINAL APPEAL

CCA 2004/1927
MASON P
GROVE J
BARR J
Friday 15 October 2004

Rodney Stephen ADLER v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)

JUDGMENT

MASON P: This is an application for leave to appeal from orders made by James J on 5 March 2004 dismissing an application to stay criminal proceedings in the Supreme Court.
The Court has heard full argument. Leave to appeal should be granted.
The appellant was arraigned on 5 September 2003 on an indictment filed by the Commonwealth Director of Public Prosecutions (DPP) containing five counts of offences under the Corporations Act 2001 (Cth). He pleaded not guilty to all counts. The five counts were that he:
1. On 15 June 2000 at Sydney in the State of New South Wales with the intention to induce other persons to buy securities, namely ordinary shares in HIH Insurance Ltd (“HIH”) did carry out more than two transactions in the ordinary shares of HIH, which transactions were likely to have the effect of increasing the price of ordinary shares in HIH on a stock market, namely the Australian Stock Exchange.
2. On 16 June 2000 at Sydney in the State of New South Wales with the intention to induce other persons to buy securities, namely ordinary shares in HIH Insurance Ltd (“HIH”) did carry out more than two transactions in the ordinary shares of HIH, which transactions were likely to have the effect of increasing the price of ordinary shares in HIH on a stock market, namely the Australian Stock Exchange.
3. On 19 June 2000 at Sydney in the State of New South Wales with the intention to induce other persons to buy securities, namely ordinary shares in HIH Insurance Ltd (“HIH”) did carry out more than two transactions in the ordinary shares of HIH, which transactions were likely to have the effect of maintaining or stabilising the price of ordinary shares in HIH on a stock market, namely the Australian Stock Exchange.
4. On 19 June 2000 at Sydney in the State of New South Wales did disseminate information that was false in a material particular and was likely to induce the purchase by other persons of securities, namely ordinary shares in HIH Insurance Ltd when at the time of disseminating the said information he knew that it was false in a material particular.
5. On 20 June 2000 at Sydney in the State of New South Wales did disseminate information that was false in a material particular and was likely to induce the purchase by other persons of securities, namely ordinary shares in HIH Insurance Ltd, when at the time of disseminating the said information he knew that it was false in a material particular.
The offences charged lie under the Corporations Act even though the relevant conduct preceded the passing of this federal law (see Part 10, especially s1400). The legislative proscription of the offences charged in the indictment is found in identical provisions in the Corporations Law and the Corporations Act:
first three counts: s997(1) and (7)
fourth and fifth counts: s999.
These provisions (since repealed) relevantly provided:
997 Stock market manipulation:
(1)A person must not enter into or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of increasing the price of securities of the body corporate on a stock market, with intention to induce other persons to buy or subscribe for securities of the body corporate or of a related body corporate.
….
(7)A person must not enter into, or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of maintaining or stabilising the price of securities of the body corporate on a stock market, with intent to induce other persons to sell, buy or subscribe for securities of the body corporate or of a related body corporate.
999False or misleading statements in relation to securities
A person must not make a statement, or disseminate information, that is false in a material particular or materially misleading and:
(aa)is likely to induce other persons to subscribe for securities; or
(a)is likely to induce the sale or purchase of securities by other persons; or
(b)is likely to have the effect of increasing, reducing, maintaining or stabilising the market price of securities;
if, when the person makes the statement or disseminates the information:
(c)the person does not care whether the statement or information is true or false; or
(d)the person knows or ought reasonably to have known that the statement or information is false in a material particular or materially misleading.
The provisions in the Corporations Law did not themselves create offences. But they provide the definition of presently relevant offences in light of the combined operation of ss1311 and 1400 of the Corporations Act.
The appellant sought an order that the criminal proceedings be permanently stayed. The basis of the alleged abuse of process was that as a result of earlier civil proceedings brought by the Australian Securities and Investments Commission (ASIC), the appellant had already been punished for the conduct that is the subject of the criminal charges brought by the DPP.
factual background
The factual background leading to both the past civil proceedings and present criminal proceedings was set out by James J in his reasons of 5 March 2004:
[18] HIH Insurance Ltd (“HIH”) was a listed public company carrying on the business of an insurer.
[19] Mr Raymond Williams, who was also a defendant in the civil proceedings, was a director of HIH and the Chief Executive Officer of HIH.
[20] Between 16 April 1999 and 26 February 2001 Mr Adler was a director of HIH. Mr Adler was also an “officer” of HIH Casualty and General Insurance Ltd (“HIHC”), a subsidiary of HIH, within the meaning of the expression “officer” in the Corporations Act.
[21] Adler Corp or Mr Adler had a large shareholding in HIH. From at least the beginning of the year 2000 the price of shares in HIH had been declining.
[22] On 9 June 2000 Mr Adler sent Mr Williams a fax in which he said that a company named Drenmex (a company associated with Mr Adler) would like to borrow the sum of ten million dollars for the purpose of venture capital and share trading. …
[23] Later on the same day Mr Williams sent a fax to Mr Adler, saying that he would arrange for the funds which had been requested to be transmitted to Mr Adler. …
[24] On HIH’s copy of Mr Williams’ fax Mr Williams wrote a note to Mr Fodera, an executive director of HIH, who was also a defendant in the civil proceedings, asking Mr Fodera to arrange for the funds to be transferred to Drenmex.
[25] On 14 June 2000 Mr Adler sent a fax to Mr Williams, saying that it would not be appropriate to use Drenmex and “the name of the company that has been incorporated is Pacific Eagle Equity Pty Ltd” (“PEE”). PEE was in fact not incorporated until the following day. Mr Adler was its only director and Adler Corp was the holder of its one issued share.
[26] On the morning of 15 June 2000 Mr Adler instructed a stock broker to purchase two million shares in HIH at market in the name of PEE. Pursuant to these instructions 1,873,661 shares in HIH were purchased at an average price of $1.0062 per share.
[27] At the hearing of the civil proceedings Mr Howard, the General Manager Finance of HIH, gave evidence, which Santow J accepted, about conversations he had had on 15 June 2000 with Mr Fodera, Mr Adler, again with Mr Fodera, with Mr Williams and finally with Mr Cubbin, the head of Accounts Payable and Management Accounting in HIH. …
[28] On 15 June 2000 a cheque for $10,000,000 was drawn by HIHC in favour of PEE and delivered to Mr Adler and was banked in a bank account which had been opened for PEE.
[29] Between 16 June and 30 June (or possibly 5 July) further shares in HIH were purchased by PEE through the same stock broker, on instructions given by Mr Adler. These purchases included purchases on 16 June 2000 of 951,339 shares at an average price of $1.0192 per share and purchases on 19 June 2000 of 425,000 shares at an average price of $1.018 per share.
[30] The total number of shares in HIH purchased between 15 June 2000 and 30 June 2000 was 3,924,545 shares for a total price including stamp duty and brokerage of $3,991,856.21, all of which was paid out of the $10m which had been paid by HIHC to PEE.
[31] Between 14 June 2000 and about mid July 2000 the decline in the traded price of shares in HIH was arrested and the share price slightly increased but thereafter the traded price of shares in HIH again declined.
[32] As he was the controller of PEE Mr Adler was required by s 205G of the Corporations Law then in force to notify the Australian Stock Exchange of the purchases of shares in HIH and Mr Adler did promptly notify the Stock Exchange. Mr Adler did not notify the Stock Exchange that the acquisition of the shares had been financially assisted by HIH or HIHC. As a result of Mr Adler’s notification to the Stock Exchange there were reports in the financial press that Mr Adler had bought many shares in HIH.
[33] On 19 June 2000 a Mr Mellish, a journalist with the Australian Financial Review, contacted Mr Adler and had a conversation with Mr Adler. When asked by Mr Mellish why he had bought shares in HIH, Mr Adler said that shares in HIH were “undervalued in the long term … I think there will be a weakness for another week or two and that will give me a chance to get some volume”. …
[34] On 20 June 2000 Mr Mellish had a further conversation with Mr Adler about the purchases of HIH shares, in which Mr Adler said:
“I want people to know I am a committed insurance person. People think I have sold out and I’ve got my money and gone. That’s not true. I am making a number of statements about buying these shares. I believe in the company. I’m putting my money up which shows I believe in the industry. I think the company can be a billion dollar company again.”
[35] At the time of the payment of the $10m by HIHC to PEE the terms on which the payment was made had not been reduced to writing and had not been finalised.
[36] On 7 July 2000 PEE entered into a deed poll prepared by solicitors, constituting the Australian Equities Unit Trust (“the AEUT”). The HIH shares which had been purchased by PEE were treated as an asset of the AEUT.
[37] Under the trust deed of the AEUT there were “A” class units and “B” class units, with different rights and entitlements. Four “A” class units were issued to Adler Corp or another company associated with Mr Adler. One “B” class unit was issued to HIHC.
[38] Mr Adler caused PEE as trustee of the AEUT to acquire from Adler Corp, at cost, shares in companies called dstore Ltd, Planet Soccer International Ltd and Nomad Telecommunications Ltd and also caused PEE as trustee of the AEUT to make unsecured loans to morehuman Pty Ltd, Pacific Capital Partners Pty Ltd, Intagrowth Fund No 1 and PCP Ensor No 2 Pty Ltd, with all of which Mr Adler was associated. The funds used for all of these seven transactions came out of the payment of $10m by HIHC to PEE on 15 June 2000.
The civil proceedings
ASIC brought civil proceedings in the Equity Division against three former directors of HIH: the appellant, Raymond Williams and Dominic Fodera, and against Adler Corporation Pty Ltd, a company of which the appellant was the sole director. ASIC alleged various contraventions of directorial duties, or duties as an officer, under the Corporations Act and the Corporations Law (deemed by s1383 of the Corporations Act to have been brought under the corresponding sections of that Act). Accessorial liability was also claimed by reason of alleged involvement in contraventions committed by HIH and its subsidiary.
The proceedings were heard by Santow J. In his reasons of 14 March 2002, his Honour held that the appellant had contravened ss180, 181, 182, 183, 209(2) and 260D(2) of the Corporations Law (ASIC v Adler & Ors [2002] NSWSC 171, 41 ACSR 72). Accordingly, on 27 March 2002 Santow J made declarations in accordance with s1317E that the appellant had contravened the specified civil penalty provisions of the Corporations Act (ASIC v Adler [2002] NSWSC 268, 189 ALR 365).
On 30 May 2002 Santow J granted relief consequential upon the declarations previously made (ASIC v Adler [2002] NSWSC 483, 42 ACSR 80). So far as is relevant to the appellant, the orders were:
•Pursuant to ss206C and 206E, that the appellant be disqualified from managing corporations for a period of 20 years;
•Pursuant to s1317H, that the appellant pay compensation (later fixed at $7,986,402); and
•Pursuant to s1317G, that a pecuniary penalty order for $450,000 be imposed.
The appellant and Adler Corporation appealed to the Court of Appeal. The Court (Giles JA, Mason P and Beazley JA agreeing) dismissed the appeal in all but a relatively minor respect, namely that Santow J should not have found that the appellant had contravened s183 (Adler & Anor v ASIC[2003] NSWCA 131, 46 ACSR 504, hereafter “the Court of Appeal reasons”).
An application by the appellant for special leave to appeal was rejected by the High Court (Adler v ASIC, 28 May 2004, [2004] HCATrans 182).
The application for stay of the criminal proceedings
Before James J, the appellant submitted that the criminal proceedings should be stayed as an abuse of process because of exposure to double jeopardy, in that the appellant had already been punished by the pecuniary penalty orders for substantially the same conduct as is alleged by the DPP in the criminal proceedings.
It was common ground that the conduct alleged in the criminal proceedings was the same, in part, as the conduct in which the appellant had been found to have engaged in the civil proceedings.
The appellant conceded before James J that the declarations, compensation orders and disqualification orders made by Santow J were not penal in nature. But he submitted that the pecuniary penalty order was of that nature, a submission accepted by James J (at [110]). In light of the orders made by the High Court on 22 April 2004 in Rich v ASIC (reasons given on 9 September 2004: [2004] HCA 42), the concession as to the non-deterrent aspect of the disqualification orders was withdrawn in this Court.
The essence of the appellant’s argument was that he should not be exposed to punitive proceedings twice in respect of the same conduct. The appellant accepted that no plea in bar was available, because in no case were the elements of any criminal offence charged the same as the elements of any civil cause of action that had already been brought. However, it was submitted that the court still had power to grant a stay of proceedings by virtue of its inherent power to protect its processes from abuse.
The Crown submitted that, apart from the differences in the elements of the civil causes of action and the criminal offences, the different proceedings had different purposes. The purpose of the civil proceedings was to enforce the obligations of a director or officer of a corporation and to provide remedies for wrongs done to a company or its shareholders. The purpose of criminal proceedings was to protect the integrity of the share market and to punish wrongs to potential purchasers of shares.
Reliance was placed upon the joint judgment of McHugh, Hayne and Callinan JJ in Pearce v The Queen (1998) 194 CLR 610 at 621 where their Honours held that it was not an abuse of process to charge two separate counts in an indictment where the offences were different in important respects.
The Crown also relied upon s1317P of the Corporations Act which provides:
Criminal proceedings after civil proceedings
Criminal proceedings may be started against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision regardless of whether:
(a)a declaration of contraventions has been made against the person; or
(b)a pecuniary penalty order has been made against the person; or
(c)a compensation order has been made against the person; or
(d)the person has been disqualified from managing a corporation under Part 2D.6.

The appellant argued that s1317P was unconstitutional if it meant that there was no power to grant a stay in the present case. The Crown submitted that a proper interpretation of s1317P was that the starting of criminal proceedings in circumstances such as the present would not of itself amount to an abuse, although an abuse could arise because of matters other than the fact that the conduct charged was substantially the same as the conduct constituting a contravention of a civil penalty provision, and in such a case the court retained the power to grant a stay.
James J concluded that (at [114]):
because of the important differences between the elements of the civil causes of action and the criminal offences and because of the different purposes served by the civil causes of action and the criminal offences, the criminal proceedings do not constitute an abuse of process.
His Honour went on to hold that even if it were to be assumed against the Crown that the contraventions in the civil proceedings could be regarded as “offences”, the criminal proceedings were not vexatious because the offences were different in important respects (applying the joint judgment of McHugh, Hayne and Callinan JJ in Pearce).
James J also held that the Crown was entitled to rely upon s1317P and that the section specifically authorised the commencement of criminal proceedings against a person for conduct substantially the same as conduct constituting a contravention of a civil penalty provision. He rejected the submission that the section was unconstitutional (see at [104]).
Arguments on appeal
In this Court, the appellant submitted that James J erred in his reasoning in a number of respects. First, it was submitted that Pearce was distinguishable, because that case involved multiple counts in a single indictment. The Court’s attention was directed to The Queen v Carroll (2002) 213 CLR 635 which was submitted to be authority for the proposition that commonality of facts, and not elements of the offence, are relevant to the rule against double jeopardy.
Secondly, it was submitted that James J erred in failing to consider a matter held relevant in Carroll, namely whether the criminal proceedings put at risk the finality of the prior decision.
Thirdly, the appellant argued that James J took into account an irrelevant consideration in referring to the apparently differing purposes of the civil and criminal proceedings. In any event, there was no such distinction in purposes in the present circumstances.
Submissions were also received as to the validity of s1317P. The appellant repeated the submission made below that if s1317P was to be interpreted as removing the jurisdiction of the court to stay proceedings for abuse of process then it would be unconstitutional as it was beyond the power of the Commonwealth Parliament to authorise the Executive to commit such abuses. Accordingly, the proper interpretation was that s1317P only confers power to “start” (that is, merely commence) a prosecution, and does not imply any power to proceed to verdict and punishment. On this approach, the court would be free to exercise its power to grant a stay of the commenced proceedings on the basis invoked by the appellant as well as on other bases, if appropriate.
The Crown submitted that James J had correctly applied Pearce. The Crown further submitted that it need not rely on s1317P, or any other legislative authority, as there was no abuse of process – there being no equivalence of elements and no possibility of an earlier acquittal being controverted (contrast Carroll). The question whether s1317P could be read as authorising an abuse of process does not arise on the present facts and should be left to an appropriate case where it does. For the purposes of the current proceedings, s1317P can simply be read as meaning that there is no abuse of process in prosecuting on indictment merely from a concurrence of overlap of factual circumstances. The section would not authorise a prosecution if other elements amounted to an abuse.
Analysis
Section 1317L of the Corporations Act required Santow J to apply the rules of evidence and procedure for civil matters when hearing proceedings for a civil penalty order. The appropriate standard of proof was the balance of probabilities (s1332), taking into account the nature of the cause of action and of the subject-matter of the proceedings and the gravity of the matters alleged (Evidence Act 1995, s140(2)).
The provisions grounding the findings of contravention of the Act made by Santow J were civil penalty provisions, established to the civil standard and capable of generating a limited class of orders extending to pecuniary penalties and disqualification orders, but not including fine or imprisonment (see ss180(1) (care and diligence – directors and other officers), 181(1) (good faith – directors and other officers), 182(1) (use of position – directors, other officers and employees), 183(1) (use of information – directors, other officers and employees), 209(2) (person involved in contravention of s208, without proof of dishonesty: cp s209(3)), 260D(2) (person involved in contravention of s260A, without proof of dishonesty: cp s260D(3)). See generally ss1317E-1317Q.
The civil nature of the proceedings before Santow J is discussed generally by Giles JA in the Court of Appeal reasons at [142]-[149]. This characterisation was applied (at [648]ff) in rejecting arguments that a Jones v Dunkel inference was unavailable, and (at [671]ff) in rejecting a submission that the principles of prosecutorial fairness were carried into the proceedings before Santow J. The High Court refused special leave.
It is equally clear that the offences charged in the indictment require proof of matters different to and generally in addition to the elements of the civil penalty provisions pleaded against the appellant in the proceedings before Santow J. To give but a few examples:
•the status of being a director, officer and (in some cases) an employee is vital to ss180, 181, 182 and 183, but it is not part of the offences charged;
•the offences charged under s997 require proof of multiple transactions, their likely effect on the price of securities in a stock market, and a particular intent. None of these matters had to be established in the civil proceedings;
•the offences charged under s999 require proof of dissemination of information that is false in a material particular, likely to induce others to purchase securities, and knowledge of falsity. None of these matters had to be established in the civil proceedings.
The appellant does not dispute these matters. The nub of his complaint is that Santow J nevertheless found all facts sufficient to engage the criminal provisions now invoked by the DPP, such findings being within the particulars accompanying the statement of claim in the civil proceedings (see generally the Court of Appeal reasons at [607]-[613]).
As James J records in pars [76] and [109] of his reasons, it was common ground that the conduct alleged in the criminal proceedings was the same, in part, as the conduct alleged and found in the civil proceedings. Reference may briefly be made to pars [214]-[265] in the reasons of Giles JA in the Court of Appeal summarising the findings of Santow J as to the appellant’s purpose in maintaining or stabilising HIH’s share price when he procured the share purchases on 15, 16 and 19 June 2000. If these findings were made by a jury according to the criminal standard then the Crown case on the first three counts relating to stock market manipulation would be substantially proved.
Similarly, Santow J made findings that, if proved to the criminal standard, would satisfy the core elements of the s999 counts (false or misleading statements in relation to securities) (see Giles JA at [228]-[233] of the Court of Appeal reasons, read with the findings about the true source of the money applied by the appellant in the share purchases).
Santow J had regard to these matters in determining what remedies were appropriate (see ASIC v Adler (2002) 42 ACSR 80 at 99[57]-[58]).
This however is not a case involving repeated prosecutions. In that area, there may be an abuse of process by successive prosecutions even where the accused raises no plea in bar (Rogers v The Queen (1994) 181 CLR 251, Pearce at 620[29]). Nevertheless, in a passage from Pearce cited by the primary judge at [98], McHugh, Hayne and Callinan JJ held (at 620[30]-31]):
(30)The decision about what charges should be laid and prosecuted is for the prosecution. Ordinarily, prosecuting authorities will seek to ensure that all offences that are to be charged as arising out of one event or series of events are preferred and dealt with at the one time. Nothing we say should be understood as detracting from that practice or from the equally important proposition that prosecuting authorities should not multiply charges unnecessarily.
(31)There was, however, no abuse of process in charging this appellant with both counts 9 and 10. The short answer to the contention that the charging of both counts was an abuse of process is that because the offences are different (and different in important respects) the laying of both charges could not be said to be vexatious or oppressive or for some improper or ulterior purpose. To hold otherwise would be to preclude the laying of charges that, together, reflect the whole criminality of the accused and, consonant with what was held in R v De Simoni (1981) 147 CLR 383, would require the accused to be sentenced only for the offence or offences charged, excluding consideration of any part of the accused’s conduct that could have been charged separately.
James J held (at [116]) that this passage is not limited in its application to cases in which two or more offences are charged in the same indictment. That happened to be the case in Pearce, but the remarks of McHugh, Hayne and Callinan JJ are not so confined. This is confirmed by their Honours’ reference to the “repeated” prosecution of an offence and their citation of Rogers in the immediately preceding paragraph of their judgment in Pearce. I agree with James J on this matter.
I also agree with James J’s conclusion (at [112]ff) that there is no abuse of process involved in the launching of this prosecution. The criminal offences are different in important respects from all of the causes of action in the civil proceedings. The findings and orders made by Santow J were based on the civil standard of proof. There is no attempt to eclipse or challenge a prior acquittal (contrast Carroll). If the appellant is acquitted, this would not be inconsistent with the orders made by Santow J, having regard inter alia to the different standards of proof.
James J also accepted (at [113]) the submissions of the Crown that the civil causes of action and the criminal offences have different purposes. The appellant submits that this observation was irrelevant and wrong.
The reasons of the High Court in Rich v ASIC [2004] HCA 42 caution strongly against drawing conclusions based upon strict and mutually exclusive dichotomies between protective (civil) and punitive (criminal) notions (see per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ at [30]-[35], per McHugh J at [41], [56]-[58]. See also Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors [2003] HCA 49, 77 ALJR 1629 at 1649[14]). The context of Rich was different to the present, but the warning is apt, especially since the High Court has concluded that “civil penalty proceedings” that seek disqualification orders under the Corporations Act are to be characterised as “penal” for the purpose of determining whether the defendant can claim the privilege against exposure to penalties and forfeitures in response to an application for discovery. A fortiori, civil proceedings resulting in a penalty, as were the civil proceedings against the appellant. Some of the reasoning of Santow J referable to his final orders made reference to the public protective purpose of those orders (see eg ASIC v Adler (2002) 42 ACSR 80 at 105[80]).
But nothing in Rich casts any doubt on the civil nature of the proceedings brought against the appellant, as held by the Court of Appeal (with special leave to appeal being refused by the High Court). Nor is the correctness of the orders under appeal undermined by James J’s observations relating to the purposes of the civil and criminal proceedings.
Carroll, on which the appellant placed great reliance, is distinguishable on several fronts. I would accordingly reject the appellant’s submission that there is a tension between the reasons of McHugh, Hayne and Callinan JJ in Pearce and the reasoning of the High Court in Carroll.
In Carroll, a man was acquitted of murder and subsequently charged with perjury. The alleged perjury was his sworn evidence at trial that he had not killed the victim. The High Court held that the perjury indictment was an abuse of process that should have been stayed by the trial judge. It was an abuse because the prosecution had sought to controvert the acquittal on the charge of murder given that the charge of perjury raised the same ultimate issue as had been raised in the murder trial.
The present appellant argued that Carroll was in point in that it established that substantial differences between two charges (murder and perjury) did not preclude a stay to prevent double jeopardy. So much may be accepted, but Carroll remains a significantly different case to the present one.
In Carroll, the vice of the perjury indictment lay in its manifest inconsistency with the acquittal of murder. That inconsistency arose because the prosecution based the perjury charge solely upon Carroll’s sworn denial of guilt (see per Gleeson CJ and Hayne J at 649[42]). Examination of the proceedings in the earlier murder trial disclosed that the central issue was whether Carroll had killed the victim, Deirdre Kennedy. Once this emerged, the perjury indictment was revealed as a challenge to that which the law requires to be accepted as incontrovertibly correct, ie the murder acquittal.
On this analysis, Carroll does not assist the appellant. The proceedings before Santow J were not criminal proceedings and the appellant was certainly not “acquitted”. The present charges are in no way inconsistent with the outcome of the earlier proceedings. They represent the first occasion in which the appellant is placed in jeopardy of conviction for a criminal offence.
The judgments in Carroll demonstrate that a number of rules or principles cluster together under the title “double jeopardy” (see esp per Gleeson CJ and Hayne J at 640[9], per Gaudron and Gummow JJ at 660[84], per McHugh J at 673[131]).
But the “double jeopardy” that was the focus of attention throughout the reasons in Carroll was (in Gaudron and Gummow JJ’s words at 660[84]) “placing an individual twice in jeopardy of criminal punishment for the one incident or series of events”. Similarly, McHugh J referred to the main rationale of the principle of double jeopardy as “prevent[ing] the unwarranted harassment of the accused by multiple prosecutions” (at 672[128], citing Friedland, Double Jeopardy (1969), pp3-4). As to abuse of process by successive prosecutions, see also Pearce per McHugh, Hayne and Callinan JJ at 620[29] and per Gummow J at 629[67]. This type of jeopardy is simply not involved in the present case, this being the first and only prosecution of the appellant arising out of the relevant events.
In these circumstances, it is unnecessary to resolve the issue raised as to the scope of s1317P and the constitutional challenge dependent on a conclusion that the section precludes the granting of a stay in circumstances such as the present. I recognise that this approach involves ignoring a statutory signpost which (on the Crown submission, with which I am inclined to agree) directly addresses the issue debated in the appeal.
Where Parliament has entered a field and expressed its view clearly then there is no point in harkening back to the antecedent common law. But there are two reasons why it is appropriate to defer embarking upon the s1317P issues. First, if (as I think likely) the section has the wider scope contended for by the Crown, in that it is not open to a court to find an abuse of process arising directly out of that which Parliament has authorised (cf Grills v The Queen PJE v The Queen (1996) 70 ALJR 905), it would still remain for the Court to determine whether an abuse of process is involved in the mere commencement and prosecution of the present indictment. Without such a conclusion the constitutional argument lacks all content. I have concluded that no abuse of process is involved.
Secondly, there is the general principle that a court should avoid embarking upon questions of constitutional validity of a statute if a dispute may be resolved by addressing alternative arguments (see Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 642). This principle should be applied with rigour in a case such as the present where the appellant has developed his constitutional argument in a very broad-brush way. The submissions barely rose above contesting the policy of s1317P and invoking the ultimately circular argument that it is beyond the power of the Commonwealth Parliament to authorise the Executive to commit an abuse of process.
Accordingly, I propose that leave to appeal be granted but that the appeal should be dismissed.
GROVE J: I agree with Mason P.
BARR J: I agree with Mason P.

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LAST UPDATED: 04/11/2004