Adler v The Queen

[2004] HCATrans 546

[2004] HCATrans 546

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S432 of 2004

B e t w e e n -

RODNEY ADLER

Applicant

and

THE QUEEN

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 DECEMBER 2004, AT 11.53 AM

Copyright in the High Court of Australia

MR J.L. SHER, QC:   May it please the Court, I appear with my learned friend, MR N. PERRAM, for the applicant.  (instructed by Gilbert & Tobin)

MR D.J. FAGAN, SC:   May it please your Honours, I appear with my learned friend, MR M.A. WIGNEY, for the respondent.  (instructed by Commonwealth Director of Public Prosecutions)

McHUGH J:   Yes.  Mr Sher.

MR SHER:   Could I inquire as to whether your Honours have with you the relevant part of the Corporations Act and if not I can cure that immediately.  It is Part 9.4B.

McHUGH J:   No.  I have reports, Mr Sher.

MR SHER:   Can I have handed to your Honours extracts of relevant parts to that legislation and also, at the same time, your Honours, an extract of a relevant section of the Evidence Act.  Can I immediately take your Honours to some of the provisions of Part 9.4B and in particular three sections commencing with section 1317N which is about staying of civil proceedings.

McHUGH J:   Yes.

MR SHER:   Your Honours will see that this provision provides that:

Proceedings for a declaration of contravention or pecuniary penalty order against a person are stayed if:

(a)      criminal proceedings are started or have already been started against the person for an offence; and
(b)       the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the contravention.

So the question is substantially the same conduct and the effect of that section is that a civil penalty proceeding which has not been completed is brought to a halt by the institution of criminal proceedings.  That section followed another section, 1317M on the previous page, which makes provision for:

A court must not make a declaration of contravention or a pecuniary penalty . . . if the person has been convicted of an offence constituted by conduct that is substantially the same -

Once you have been convicted of a criminal offence based on conduct substantially the same, there cannot be the civil proceedings which the Act contemplates.

KIRBY J:   Could I just ask on that, where does that leave service as an officer of a company because that is something dealt with normally in the civil proceedings.  It is then picked up, is it, in a subsequent proceeding after the criminal proceeding under the Act?

MR SHER:   Yes.  There are sections that prohibit certain behaviour.  Section 1311 makes them an offence.

KIRBY J:   But if you are convicted as an officer of the company on the criminal proceedings, that conviction becomes the basis, does it, for an order under the Corporations Law to prohibit a person serving as an officer in the company thereafter ‑ ‑ ‑

MR SHER:   There is an automatic disqualification of five years for each offence.  The Court has a discretion in relation to disqualification in civil penalty proceedings and there being five offences here the total period of disqualification that would have automatically followed on five convictions would have been 25 years and the disqualification in fact imposed is 20 years.

In a section which the Court of Criminal Appeal did not deal with, and it is said in the submissions of our learned friends that, therefore, this matter is not an appropriate vehicle for testing this question and I will come to that in a moment, your Honours will see that the test is again the same, namely, substantially the same conduct.  This is an attempt to provide for what is described ‑ ‑ ‑

KIRBY J:   Which is the section?

MR SHER: This is section 1317P. It follows immediately after N. There is no section 1317O. This provides for what would be argued and has been argued by the Crown as a means of going ahead, even though you have what on its face would appear to be an abuse of process. The test is again substantially the same conduct. The wording used in the section is “may be started”.

The section immediately preceding it, to which I have referred your Honours, clearly indicates that the legislature recognises what is clearly established in the case law that there are different stages of a criminal prosecution.  There is the prosecution, the conviction and the punishment.  In reference to “started here”, particularly the way in which section 1317N operates, it is clear that there is contemplated by the legislature a stage in the criminal proceedings at which this section springs into effect.  I will come back to that, if I may.

Now, two propositions were put to the trial judge and to the Court of Appeal, and accepted by both which, in our respectful submission, were erroneous.  The first one was that the different elements between the civil and the criminal proceedings resulted in there being no abuse of process.  That that was the approach of the Court of Appeal is made clear in a passage at page 81 of the application book in the judgment of the President of the Court of Appeal.  What Justice Mason said in paragraph 39 after citing a passage from the joint judgment of your Honour Justice McHugh and Justices Hayne and Callinan in the case of Pearce - your Honours will see that commences on the previous page - after citing a passage, particularly that which is set out on page 81 where in that joint judgment your Honours had said:

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 o 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 ‑ ‑ ‑

McHUGH J:   is this argument of yours really directed to what you should be arguing, Mr Sher?  I would have thought that on its proper construction, 1317P makes it abundantly clear that you can be criminally prosecuted for conduct that was substantially the same as conduct which was the result of “a declaration of contravention” or “pecuniary penalty order” or disqualification.  Have you not to say that 1317P is invalid?

MR SHER:   Yes, and we do say that.  We say, also, that on its proper construction ‑ ‑ ‑

McHUGH J:   Unless you can invalidate it – I know what you say about its construction but, really, if somebody has been convicted or had a declaration made against that person or a pecuniary penalty imposed and yet you can still start criminal proceedings, it seems a bit difficult to say that courts can then just stay those proceedings.

MR SHER:   Can I shortly deal with that, the question of the proper construction of 1317P?

McHUGH J:   Yes.

MR SHER:   There are observations made in two of the recent leading cases, Carroll and Pearce which draw distinction between different stages of the prosecution.  What this section does, that is 1317P, is direct attention to a stage of the prosecution, namely, the commencement of the proceedings.

KIRBY J:   How futile that would be to provide that you can start them but you just cannot take them to their natural conclusion.

MR SHER:   Well, it is not futile, no.  There is a good practical reason for doing that and it is illustrated by what has happened in this case in relation to what may happen hereafter, if I can refer to that in a moment.  It enables the prosecuting authorities rather than make the decision themselves and cease a prosecution, to seek the judgment of an independent body, such as a court, as to whether or not a proceeding is an abuse of process.

McHUGH J:   What is your next point?  That is not very persuasive, Mr Sher.  It does not seem to have that purpose.  It gives us straight‑out authority to institute proceedings.  It is not to seek a declaration from the Court or get an advisory opinion.

KIRBY J:   Criminal proceedings may be started against a person.

McHUGH J:   You have to grasp the nettle, I think.

MR SHER:   I have made the point, your Honours, that it is directed ‑ ‑ ‑

McHUGH J:   You have to grasp the nettle.

MR SHER:   Yes.  On the constitutional issue, your Honours, the observations that are made by Justice Gaudron, in particular, in Nicholas are directly in point.  We refer to those in our reply submissions at page 118, paragraph 11.

KIRBY J:   Did not Justice Gaudron and Justice Gummow say something in Carroll suggesting that there was a constitutional issue lurking in the background?

MR SHER:   Yes, they do.

KIRBY J:   Is that caught up in your case?

MR SHER:   That is it, that is the point.

KIRBY J:   Because that is quite a significant potential issue, given suggestions that Parliament can override double jeopardy.

MR SHER:   Can I deal with what Justice Gaudron actually says in this particular decision?

KIRBY J:   Yes.

MR SHER:   What actually happened in – I am not sure it is Carroll but Justice Gummow said this point does not arise in this particular case.

KIRBY J:  That is right.  I did not sit in Carroll but I have a feeling they were signalling something there.

MR SHER:   Yes.

McHUGH J:   I have some fairly strong things to say about the power of Parliament to interfere with abuses of process in Nicholas.  I was in dissent in Nicholas.

KIRBY J:   So was I, but I think you say Justice Gaudron, who was in the majority, said something?

MR SHER:   Yes, I was attempting to cite from the dissenting judgments as you have both seen ‑ ‑ ‑

KIRBY J:   Quite wise.

MR SHER:   If I can go to the majority judgment, your Honours, at the bottom of page 118 in paragraph 11 the passage is set out and the words “abuse of process” are specifically mentioned.  What her Honour said was:

In my view, consistency with the essential character of a court and with the nature of judicial power necessitates that a court not be required or authorised to proceed in a manner that does not ensure equality before the law, impartiality and the appearance of impartiality, the right of a party to meet the case made against him or her, the independent determination of the matter in controversy by application of the law to facts determined in accordance with rules and procedures which truly permit the facts to be ascertained and, in the case of criminal proceedings, the determination of guilt or innocence by means of a fair trial according to law.  It means, moreover, that a court cannot be required or authorised to proceed in any manner which involves an abuse of process, which would render its proceedings inefficacious, or which brings or tends to bring the administration of justice into disrepute.

We say those words are directly applicable to this case.  If we can just take a step back and ask yourselves the question, what would a member of the community think about Mr Adler being prosecuted for criminal offences arising from substantially the same conduct for which he has already been, in effect, sentenced to a penalty of nearly half a million dollars, disqualified for 20 years as a director, which was his livelihood, and in addition, ordered to pay compensation of approximately $8 million and to be told, “Well, these are criminal proceedings and the standard of proof is different.”

KIRBY J:   The member of the public might say, “The community has laid down a regime for governing officers of companies.  This is a sort of protection for the good quality of the governance of corporations and that is a different matter to personal responsibility for criminal activity and it is aimed at a different target and Parliament can provide for each and can provide here that the pursuance of one is not to prevent the pursuance of the other.”

MR SHER:   What your Honour says gives rise to ‑ ‑ ‑

KIRBY J:   I think I said something like that in my dissenting opinion.

McHUGH J:   It goes to the minor premise.  You have to establish a major premise and a minor premise.  You have to show that this was an abuse of process.

MR SHER:   I agree with that, your Honour, and we do that by showing that substantially the same conduct is relied upon, and this is not really in dispute at all, in relation to both proceedings.  The points raised against that argument that this is not an abuse is, firstly, the elements of the offences are different.  That simply is not an argument that holds water, firstly because there is a statutory recognition that what is important are the facts but there is also clear case law in this Court that that is not a determining consideration.

In Carroll, which was one of the cases which was barely touched on by Justice James at first instance, the accused was charged with perjury for lying about the fact that he had not murdered the victim in respect of which he had been acquitted at his trial.  It was said, inter alia, that this calls into question the efficacy of the acquittal but the fact is that the elements of perjury and murder were clearly substantially different.  More to the point, and perhaps, which indicates why this is a point of general public importance, is the decision of this Court ‑ ‑ ‑

McHUGH J:   I do not think you need address about general public importance.

KIRBY J:   The question really is whether this is the case to bring that issue up.  There has been discussion of allowing a retrial in certain very limited circumstances, say, where DNA evidence comes up later and that Parliament might enact, as I think the United Kingdom Parliament has done, that in certain limited cases, notwithstanding a complete acquittal, there can be a retrial.

Now, is not that the sort of case where we would look at this issue rather than this case where you really have to run headlong into what, on one view, is an administrative provision that the good governance of corporations and criminal liability for your personal responsibility, in which, I should say, any punishment you have received in the civil should, and I take it to be conceded, would be taken into account in the criminal punishment.

MR SHER:   That highlights and demonstrates the double jeopardy.  It should not be the situation, in our respectful submission, that an accused person has to depend upon a discretionary judgment as to whether the penalties imposed on him which are serious should be taken into account and if so to what extent in a criminal prosecution based on substantially the same facts.  He should be protected, in our respectful submission, from that risk.

KIRBY J:   Where stands the criminal proceedings now, at this moment, because we have said many times we ‑ ‑ ‑

MR SHER:   They are scheduled for trial on 7 February.

KIRBY J:   This Court has said many times that we will not interfere in criminal proceedings.  We are not going to become a vehicle for people with deep pockets to disturb and stave off the day of facing the criminal trial.

MR SHER:   There are two reasons why the Court should.  The first one is that if this trial is unconstitutional, if in fact there has been an abuse of process and the trial should not proceed, the whole trial will proceed and will have to be set aside.  The second is because it will subject Mr Adler to the harassment of the trial, the ignominy associated with it, the enormous cost associated with it, the deprivation of liberty while he is a defendant in a criminal proceeding.  The double jeopardy is not just confined to punishment.  It is confined to being charged, tried and possibly convicted.

McHUGH J:   I think in Carroll I said the rationale of the double jeopardy rule is to print harassment ‑ ‑ ‑

MR SHER:   Exactly, and that is precisely what the applicant is facing here.  Can I take your Honours to a case that I have been trying to mention, now, for a few minutes.  It is a civil case.  It is the case of Gray.  Your Honours may recall Gray ‑ ‑ ‑

McHUGH J:   But it is pretty remote from this, is it not?

MR SHER:   No, it is the obverse.

McHUGH J:   We just said that on the civil case, because he had been criminally you could not award punitive damages against him.

MR SHER:   The point of Gray that we rely upon is it is the obverse of this case.  That is a case in which this Court said if the object of a civil case and the object of a criminal case is the same, namely punishment, you cannot bring both.  The Court disallowed a claim for punitive damages in a civil case because there had been already punishment inflicted.  This is the obverse.  This is the first case in which directly the issue comes up as between the civil penalty provisions and the criminal provisions of the Corporations Act, a point touched on but not finally decided in the case of Rich.  I see the light is on, your Honours.  There is much more I would want to say but ‑ ‑ ‑

KIRBY J:   You have made a bit of headway with me, Mr Sher.

MR SHER:   If the Court pleases.

McHUGH J:   Yes.  Yes, Mr Fagan.

MR FAGAN:   Your Honours, to get to the point about ‑ ‑ ‑

KIRBY J:   There is a very high overlap, is there not, between the civil proceeding and now the criminal prosecution.  They are essentially the same facts and it is a harassment by the community in its different arms.

MR FAGAN:   Your Honour, the significance of the difference between the criminal proceedings and the civil is that the earlier civil proceedings were directed to wrongdoings of Mr Adler, vis-à-vis his company.  We have set out at page 108 in the application book ‑ ‑ ‑

KIRBY J:   I said similar things in Rich in dissent, but the fact is from the point of view of the citizen they really have to face the State in all of its power in two manifestations over what is, in effect, the same factual substratum, different criteria, different offences, different onus of proof but it is a second go of the State at them.

MR FAGAN:   With respect, no, your Honour, because they are essentially different wrongs that are alleged.  Those alleged in the civil proceedings for which compensation and disqualification as a director were sought were wrongs by him against the company of which he was an officer in some cases and a director in others, but these offences that are charged are for wrongs done with respect to the public generally, those who were not members of the company.

KIRBY J:   But the criminal law is wrongs done to the public, generally, and Corporations Law is for the protection of the public, generally, but they are both for the protection of the public.

MR FAGAN:   Your Honour, certainly, but I am addressing this not to the general principle of one being regulatory or protective and the other being a punitive, I am directing it to the nature of the wrong that is alleged.  The nature of the wrong that is alleged in these 997 and 999 charges is the rigging of the market and the dissemination of false information to the market.  That is the gravamen of the respective charges.  In the 997 charges it is alleged that Mr Adler made a large play on the market for the HIH shares, bidding as much as to double the turnover on a proceeding day and thus affected the price which members of the public would pay.

Secondly, he disseminated information to the effect that he was committing his own money, taking his own risk and demonstrating a faith in the company and then the industry by doing it.

KIRBY J:   Were these matters in any way taken into account in the civil penalty proceedings?

MR FAGAN:   They were in the sense that ‑ ‑ ‑

KIRBY J:   If they were, is that not the double jeopardy that the common law protects against?

MR FAGAN:   No, your Honour, because they ‑ ‑ ‑

KIRBY J:   Then there is a question is the federal legislation valid in the constitutional setting?

MR FAGAN:   Regard was had to what he did with the company’s money.  He used $10 million of HIH’s own money to make this play on the market.

KIRBY J:   These are allegations, I take it?  Were they conceded in the civil proceedings?  I would not want anything to be said today that might prejudice Mr Adler in any later proceedings.

MR FAGAN:   They were allegations in the criminal proceedings and they were established in the civil proceedings, but it was established that ‑ ‑ ‑

KIRBY J:   That is also a slightly unsettling thing that the State, with all of its power, proceeds against a person in civil proceedings where the onus is lower, gets the decision, gets the orders, gets very significant penalties.  They are called civil penalties.  Then, in another manifestation with all of its power proceeds from that vantage point in a criminal prosecution.  Is not that slightly disquieting?

MR FAGAN:   Those circumstances do not make any difference to the necessity for the Crown to prove beyond reasonable doubt the facts that are requisite for these charges.

KIRBY J:   Justice Deane explained that the purpose behind double jeopardy was the person in his relation to the government, to the power of the government.  Justice McHugh said the same.  Justice Gaudron said the same.  This just begins to take on the appearance of the government coming against the person several times, whereas the scheme of the Act seems to contemplate that you deal with the criminal matters first.

MR FAGAN:   Your Honour, that appearance does not bear analysis, with respect, because what you have arising out of the one course of conduct of Mr Adler is that on the one hand what he did was a breach of his duties of good faith, care and diligence and so on towards his company.  Another aspect of what he did was that in taking the company’s money and bidding with it on the market for shares in the company - that is in HIH - he, in the course of doing that made misrepresentations to the public.  He bid in such a way - that is explicit misrepresentations through a journalist.  He also bid in such a way as to rig the market.  Now, that aspect – he has never been brought to account for those latter aspects at all.

McHUGH J:   There are different elements, are there not, in the various civil and criminal proceedings?  In the first two counts you have to show that he carried out two or more transactions that were likely to have the effect of increasing the share price of the company on the stock market.  That was not involved in the civil proceedings in any way, was it?

MR FAGAN:   It was not any element of what had to be shown.

McHUGH J:   No.  In relation to the third count, you have to show that he carried out two or more transactions that were likely to have an effect on maintaining or stabilising the share price and in respect of the fourth and fifth counts you have to show that he disseminated false information - in this case to a journalist, I think – that was likely to induce other persons to purchase shares in HIH.  So there is quite a considerable difference in ‑ ‑ ‑

MR FAGAN:   Moreover, your Honour, those matters that are alleged in contravention of 997 and 999 are not civil penalty proceedings.  This aspect of what Mr Adler did could not have been brought against him as a cause of action for civil penalty in the other proceedings.  It could not.

McHUGH J:   It is common ground, is it, that there is a substantial overlap between the conduct?

MR FAGAN:   Certainly, because in both cases ‑ ‑ ‑

McHUGH J:   Civil and criminal, yes.

MR FAGAN:   Yes, in both cases the facts relevant are that he obtained $10 million from HIH.  Now, in the first case, that was relevant to showing that he had taken it in breach of duties as a director.  In this case it is relevant only to showing that it was not his own money which makes false the things that he said through the journalist.

KIRBY J:   Now, help me on this.  On the basis of what has been said, if there is an overlap between the facts, the problem that I see is whether contrary to what we said in Elliott and so many other cases, we intervene at this stage, Mr Adler has a constitutional point and it is far from unarguable, in my opinion.  If that is the case the question is when does he raise his point?  When does he have the point determined?  Is it not better from the point of view of the Crown, the community, Mr Adler, that it be determined before they launch into a criminal trial which may take some time than that it be determined some time later, if he still has the money with which to raise it?

MR FAGAN:   Your Honour, the Crown’s essential response to that is that the constitutional point does not arise because of the differences in important respect to the ‑ ‑ ‑

KIRBY J:   There are some differences but if there is overlap, and it is conceded there is factual overlap, then double jeopardy bites because of its rationale.

McHUGH J:   You say, as I understand it, that 1317P is really a fallback position for you.  If 1317P was never enacted there would have been nothing to stop you bringing these criminal prosecutions.

MR FAGAN:   That is so, your Honour.  That is the respondent’s position that there would be nothing to stop ‑ ‑ ‑

KIRBY J:   That is the question, because he ‑ ‑ ‑

MR FAGAN:   With respect, your Honour, the double jeopardy is not attracted just by that simple proposition that there is an overlap.

KIRBY J:   I must admit, I read what Justice Gummow and Justice Gaudron said in Carroll to indicate that they had a constitutional question in their mind.

MR FAGAN:   Your Honour, Pearce is a case where there was an overlap in the relevant facts.  Pearce was a case where there were two counts on the one indictment and there was an overlap of the facts upon which ‑ ‑ ‑

KIRBY J:   This was a South Australian prosecution, was it not?

McHUGH J:   No, it came from New South Wales, from up - there is an article in, I think, a recent edition of the Criminal Law Journal by, I think it is Professor Goode who criticises that decision.  I cannot remember whether his criticism favours you or not.

MR FAGAN:   There was certainly an overlap of the ‑ ‑ ‑

KIRBY J:   He probably agreed with my contrary view.

MR FAGAN:   There was undoubtedly an overlap of the facts upon which the two charges were laid, but what the Court said was that there was no abuse of process in laying both the charges because the charges were different and different in important respects.

KIRBY J:   There was no federal element in that case, though.  This was a charge under the Crimes Act relating to GBH, grievous bodily harm.

MR FAGAN:   Yes.

KIRBY J:   So, there was no federal element in that case.

MR FAGAN:   No, but in what I am putting to your Honours about the absence of any abuse of process I am not invoking anything that draws particularly from State or federal jurisdiction.

KIRBY J:   The question in this case would be, did the Parliament have the power to enact P and, in any case, did the Parliament have the power to enact a law that overrode what would be said to be a constitutional assumption of equality in the conduct of criminal proceedings against a person in federal jurisdiction.

MR FAGAN:   But the question would only arise, your Honour, if first of all there is something out of conformity with what is permitted under the criminal law in what is being done here.  According to Pearce there is not because there are differences in important respects between the charges.  There are not only different elements but they are completely mutually exclusive.  The differences in elements indicate and illustrate what is the difference in the gravamen respectively of ‑ ‑ ‑

McHUGH J:   I suppose what you would say that if these civil contraventions had turned into criminal offences you could have had them in the same indictment?

MR FAGAN:   Absolutely, your Honour.  Every aspect of Mr Adler’s conduct arising out of these transactions could have been charged at the one time.  He could have been charged on these facts with, first of all, breaching his duties to his corporation and, secondly, with – in taking the money from the company in breach of his duties, using it then in a way on the stock market which misled the investing public.

KIRBY J:   Yes, but, Mr Fagan, sitting where we sit, we have to keep asking ourselves, what happens if this becomes the general rule and what happens if it becomes the general rule that people are prosecuted for civil penalties and then subsequently have to face criminal prosecutions?  That is a disturbing possibility that cannot be entirely put out of mind.  It is said to arise in this case.

MR FAGAN:   I understand that concern, but what I am submitting is that it does not in truth arise in this case, on a proper analysis.

KIRBY J:   Why?  You just say just because a number of the counts are different from what the civil penalty proceedings involved – the onus of proof is different from the point of view of the citizen who is on the receiving end of the State action it is the same, or it overlaps?

MR FAGAN:   Your Honour, all of the counts are different from all of the causes of action in the civil court and all of them involve matters of legal element which are mutually exclusive of what was in the civil court.  The analysis of the elements is set out in page 108 of the application book in our submissions where we have listed, and one can see quite graphically how the matters that had to be proved in the civil case just do not coincide as matters of legal analysis of the facts in the least with what has to be proved in the criminal case.

It can be seen there, for example, that it had to be proved in each of the causes of action against Mr Adler below that he was a director and it does not matter in the least to the present prosecution that he was a director. 

It is not an aspect of his wrongdoing.  That is not just a technical difference.  That is demonstrative of the different aspect of the conduct, the different wrongdoing involved in the conduct which is sought to be brought to account in the criminal compared to the civil proceedings.

The fact that directorship was an element of each civil cause of action demonstrates that those actions were directed to bring him to account for wrongs against his company, quite a different thing from what is sought to be prosecuted under 997 and 998.  It is correct that before Justice Santow, when his Honour came to consider penalty, his Honour was considering breaches of director’s duties which were involved in receiving the company’s money to apply to purposes which his Honour thought were not in the interests of the company.  That was the essence of the civil wrongs.

In considering what penalty ought to apply, his Honour took into account that – and expressly said so in a judgment on the degree of penalty that he would impose – that Mr Adler had used the money to go out and make a play on the stock market.  That does not mean that Mr Adler has been dealt with or prosecuted for the matter of using his money in his play on the stock market in such a way as would contravene section 997.  That could not have been dealt with in the court below because it is a matter that gives rise to a criminal prosecution but not a civil cause of action. 

So, for those reasons, it is our submission that this constitutional point, the validity of section 1317P is never arrived at in this case. It is never necessary for the Crown to resort to it and the case is an unsuitable vehicle for considering any matters of principle that might arise in relation to that section. Those are the submissions for the respondent.

McHUGH J:   Thank you, Mr Fagan.  Yes, Mr Sher.

MR SHER:   Your Honour, what happened in this case was entirely the choosing of the Crown.  They opted to bring civil penalty proceedings first.  Now they are seeking to bring criminal proceedings and it is incorrect to assert that they could have coupled all these in the one presentment.  Had they done so, different issues would have arisen but it is quite clear that, having brought the civil penalty proceedings first, the section to which I took your Honours earlier, if they had intervened in those proceedings by issuing the criminal proceedings, would have come to a halt and having got a criminal conviction they could not have brought civil penalty proceedings.  Now, the fact is that the matters that have been referred to were taken into account by Justice Santow.  Can I remind your Honour Justice McHugh firstly of what your Honour did in Rich’s Case because your Honour canvassed Justice Santow’s judgment, the 15 principles that he referred to and the material and your Honour finally observed about Justice Santow at paragraph [52] in Rich:

Both Santow J’s list of propositions and the comments of the Victorian Court of Appeal indicate that the factors taken into account in the criminal jurisdiction – retribution, deterrence, reformation, contrition and protection of the public – are also central to determining whether an order of disqualification should be made under the Corporations Act and, if so, the appropriate period of disqualification.  Those factors also support the conclusion that the jurisdiction exercised under this part of the Corporations Act cannot properly be characterised as purely protective.

And then at paragraph [56] your Honour concluded:

It is difficult to read these passages without concluding that there is little difference in the approach of his Honour and the approach of judges making orders or imposing sentences in the criminal jurisdiction.

Now, if we go to the application book at two passages we can see what has been taken into account.  Firstly at page 28, this is a summary by Justice James of the matters taken into account by Justice Santow and at page 28 in paragraphs (b) and (c) you will see reference to the matters to which my learned friend has referred as arising in the criminal proceedings.  In the middle of (b) your Honours will see:

This was in promoting his personal interest by making or pursuing a gain (of maintaining or supporting the HIH share price for his own benefit as a substantial shareholder) where looked at from the viewpoint of a person familiar with the circumstances, there was a real or substantial possibility of conflict between his personal interests and those of the company in pursuing a profit, and in failing to make proper disclosure.

And then in (c):

Moreover, he improperly used his position as a director . . . to gain the foregoing advantages to himself, as a substantial shareholder, via Adler Corporation, in HIH; the principles set out in paragraph 458 below are directly applicable.  This was for the improper purpose earlier described, namely maintaining or supporting the price of shares in HIH, so as to benefit his own HIH holding rather than HIH, as evinced by his conduct earlier described including foregoing a quick trading profit and selling his shares first rather than after, or at least at the same time.  Moreover, it was concealed -

et cetera.  Then if you go to the judgment of the Court of Appeal at page 80 you will see in paragraphs 35 to 37 that both before Justice James and in the Court of Criminal Appeal it was accepted that what Justice Santow had done was to take into account the matters that were at the heart of the alleged criminal proceedings.  You will see in 35 it is said:

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 [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 . . . 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) . . . 

Santow J had regard to these matters in determining what remedies were appropriate.

And he did.  It is quite clear that what the Crown are relying upon here wrongly, in our submission, is that the elements of the civil and the criminal proceedings are different and, in our submission, that borders on the irrelevant.  What is important is, is somebody about to be punished for substantially the same facts and that, in our respectful submission, is manifestly clear and in those circumstances this is an abuse of process.

McHUGH J:   Thank you, Mr Sher.

This Court has said many times that appellate courts should not intervene in criminal trials on an interlocutory point except in truly exceptional circumstances:  see, for example, R v Elliott (1996) 185 CLR 250 at 257.

The applicant essentially raises two points. We are not convinced that the point of statutory construction concerning section 1317P of the Corporations Act 2001, upon which he relies, would warrant the grant of special leave. However, the applicant also has a constitutional point concerning the validity of section 1317P. We do not say that his constitutional point is unarguable. However, there are a number of obstacles in his path in raising it. One is a preliminary issue arising out of Pearce v The Queen (1998) 194 CLR 610, that is to say, that independently of section 1317P there is no abuse of process on the facts of this case and, accordingly, the Crown does not need to rely on section 1317P to proceed with the indictment.

In these circumstances, we are not convinced that this case would be a suitable vehicle, at this stage, to warrant a grant of special leave to appeal which would almost certainly interrupt the hearing of the criminal proceedings set down for hearing on 7 February next year. 

These points, if taken at the trial when all the facts are out, will be available to the applicant at a later stage and we express no final conclusion about these matters.  In the circumstances, special leave to appeal is refused.

The Court will now readjourn to reconstitute.

AT 12.35 PM THE MATTER WAS CONCLUDED