Attorney General for Western Australia v Chen
[2023] WASC 338
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: ATTORNEY GENERAL FOR WESTERN AUSTRALIA -v- CHEN [2023] WASC 338
CORAM: HOWARD J
HEARD: 8 AUGUST 2023
DELIVERED : 6 SEPTEMBER 2023
FILE NO/S: CIV 1388 of 2022
BETWEEN: ATTORNEY GENERAL FOR WESTERN AUSTRALIA
Applicant
AND
LILY CHEN
Contemnor
Catchwords:
Contempt - Inquiry into the City of Perth - Contemnor issued with a notice to produce statement of information - Whether seven payments received by Contemnor should have been disclosed in notice - Whether Contemnor furnished information knowing it to be false or misleading - Construction of notice - Whether payments fell into exclusions of 'income' under the notice - Whether payments were from Contemnor's occupation/s - Contemnor not under obligation to include the payment in the notice
Legislation:
Corruption, Crime and Misconduct Act 2003 (WA), s 3
Criminal Code 1913 (WA), s 1
Evidence Act 1906 (WA), s 79C
Local Government Act 1995 (WA), s 8.19
Royal Commissions Act 1968 (WA), s 8A
Rules of the Supreme Court 1971 (WA), O 55 r 1
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Applicant | : | C S Bydder SC & J M Misso |
| Contemnor | : | D Edwardson KC & L Wicks |
Solicitors:
| Applicant | : | State Solicitor's Office |
| Contemnor | : | Tindall Gask Bentley Lawyers |
Case(s) referred to in decision(s):
CEO, Department of Environment and Conservation v Szulc [2010] WASC 195
Collopy v Commonwealth Bank of Australia [2019] WASCA 97
Donohoe v The Director of Public Prosecutions (WA) [2011] WASCA 239
Hinch v Attorney-General (Vic) (1987) 164 CLR 15
International Land Developments Pty Ltd v Diamo Nominees Pty Ltd (2007) WAR 201
Kenworthy v R (No 2) [2016] WASCA 207
R & I Bank of Western Australia v Anchorage Investments Pty Ltd (1993) 10 WAR 59
R v Baden-Clay (2016) 258 CLR 308
Rodgers v State of Western Australia [2023] WASCA 52
HOWARD J:
Introduction and this Contempt Charge
Lily Chen was a councillor of the City of Perth.
The City of Perth Council, including Ms Chen, was suspended on 2 March 2018 by the Minister for Local Government pursuant to s 8.19 of the Local Government Act 1995 (WA) (LG Act).
On 24 April 2018, the Hon Minister appointed an Inquiry Panel constituted by Anthony Power (Inquiry Panel).
The Inquiry Panel conducted an inquiry under Pt 8 Div 2 of the LG Act into the City of Perth (Inquiry).
The Inquiry Panel had the powers of a Royal Commission with such modifications as were required and in terms made applicable to the Inquiry: LG Act s 8.20.
On 1 March 2019, the Inquiry Panel issued to Ms Chen a notice to produce a statement of information; it was numbered SOI 7 of 2019 (SOI Notice).[1] The SOI Notice was said to be issued under s 8A of the Royal Commissions Act 1968 (WA) (RC Act) and said to have effect under s 8.20 of the LG Act.
[1] The SOI Notice was JLC 3 to the First Carmichael Affidavit.
In short, the SOI Notice required Ms Chen to produce a statement of information as to income of $500 or more she received in the 2016 and 2017 financial years.
The SOI Notice had a definition of 'income' which included certain items and excluded certain other items. Under a Note to Schedule B of the SOI Notice, it was relevantly stated:
'income' includes:
…
(iv)any commission payments, bonuses, fees or other payments (howsoever described) that you receive;
but does not include:
…
(vi)any income that you receive from your occupation/s; or
(vii)any income that you receive from a trust.
Through her lawyers, Ms Chen responded to the SOI Notice on about 15 March 2019 (Ms Chen's SOI).[2]
[2] First Carmichael Affidavit, JLC 6 (pages 25 - 29).
By an Originating Motion dated 21 April 2022 (Originating Motion), the Attorney General for Western Australia seeks orders that Ms Chen be:
(1) found in contempt of the Inquiry pursuant to s 12A of the RC Act; and
(2) punished for that contempt by a fine.
Section 12A of the RC Act provides that:
A person who -
(a)fails, without reasonable excuse, to comply with a notice served on the person under s 8A; or
(b)in purported compliance with a notice served on the person or some other person under s 8A, furnishes information knowing it to be false or misleading in a material particular,
is in contempt of the Commission.
Consistently with O 55 r 1 of the Rules of the Supreme Court 1971 (WA), Ms Chen is referred to in the papers filed in this Court as a contemnor as she is alleged to be guilty of a contempt.
The Originating Motion attaches a Statement of Charge which alleges that seven payments were received by Ms Chen but not included in her SOI (Omitted Payments). The Omitted Payments are set out in the Particulars (f)(iii) D - I to the Statement of Charge.
In short, the primary charge of contempt is that in breach of s 12A(b) of the RC Act, Ms Chen in her SOI furnished information knowing it to be false or misleading in a material particular. That is, she did not identify as a source of income the Omitted Payments.
The Applicant alleges, in the alternative, that if he is unable to establish that primary case then, nonetheless, Ms Chen was in contempt by breaching s 12A(a) of the RC Act by failing, without reasonable excuse, to comply with the SOI Notice in that she provided an incomplete response by not referring to the Omitted Payments.
The Attorney General as Applicant
The Attorney General brings the Originating Motion pursuant to s 15B(9) of the RC Act.
Prior to the Trial Ms Chen contended there was a 'Preliminary Issue' and the Attorney General's power under s 15B(9) of the RC Act had not been enlivened.[3]
[3] Contemnor's Submissions dated 4 August 2023 [9] - [23].
I was told by counsel at the commencement of the Trial that Ms Chen no longer pressed that objection and I have not considered it further.
Nature of the proceeding
Consistently with CEO, Department of Environment and Conservation v Szulc [2010] WASC 195 [4] (Martin CJ) (applying Hinch v Attorney-General (Vic) (1987) 164 CLR 15, 49), although this is in the civil jurisdiction of this Court, the Originating Motion is nonetheless criminal in nature.
Consequently, the Applicant must prove the contempt beyond a reasonable doubt.
Evidence at Trial
The Applicant read three affidavits of Jacqueline Lee Carmichael made on:
(1)20 April 2022 which attached JLC 1 - JLC 60 (First Carmichael Affidavit);
(2)24 May 2023 which attached JLC 61 - JLC 85 (Second Carmichael Affidavit); and
(3)7 August 2023 which attached JLC 86 - JLC 94 (Third Carmichael Affidavit).
With the exception of the emails which were Attachment JLC 38 to the First Carmichael Affidavit, the above affidavits were read without objection.
Ms Chen objected to JLC 38 being admitted into evidence. In answer, the Applicant relied on s 79C of the Evidence Act 1906 (WA). After argument, I overruled the objection and took JLC 38 into evidence. I explain why I did so below.
Ms Chen had initially sought to adduce the evidence of Brian Morris, a forensic accountant, who prepared a report dated 17 April 2023, and a supplementary report dated 14 July 2023 (Mr Morris' Supplementary Report).
The Applicant objected to parts, at least, of both of Mr Morris' Reports.
Tottle J, who managed the matter prior to the Trial, made rulings on the admissibility of Mr Morris' first report and Ms Chen did not seek to adduce it following those rulings.
The parties conferred at the Trial and, in the result, Ms Chen did not seek to adduce Mr Morris' Supplementary Report into evidence. Rather, the parties were content for me to receive it as, effectively, a submission or an aide memoire. I did so and Mr Morris' Supplementary Report was marked as 'MFI 1'.
In the end, Ms Chen did not adduce any evidence.
The Applicant's case
The Applicant's case is that the Omitted Payments were paid to Ms Chen as 'Success Fees' pursuant to a fund raising agreement entered into between her and Devwest Group Pty Ltd ABN 73 146 088 011 (Devwest Company) on 10 April 2013 and which was JLC31 to the First Carmichael Affidavit (Fund Raising Agreement).
The Applicant's case is that the Omitted Payments, being Success Fees under the Fund Raising Agreement, were within (iv) of the inclusive part of the definition of 'income' in the SOI Notice.[4]
[4] Trial ts 42 - 43.
Further, the Applicant contends that the Court should be satisfied beyond a reasonable doubt that the Omitted Payments did not fall within either (vi) or (vii) of the exclusions to the definition of 'income' in the SOI Notice.[5]
[5] Trial ts 42.
Consistently with the principles and authorities identified by the Court of Appeal in Rodgers v State of Western Australia [2023] WASCA 52 [142] (Buss P & Livesey AJA); [360] - [365] (Mitchell JA), if I do not find that the Omitted Payments were Success Fees received by Ms Chen pursuant to the Fund Raising Agreement then the prosecution fails. I cannot find Ms Chen guilty if I were to find the Omitted Payments were 'income' of a different character or sort. Counsel for the Applicant properly accepted that was so.[6]
[6] Trial ts 45.
Matters the Applicant must prove
On the Applicant's case, the Applicant must prove each of the following beyond reasonable doubt:
(1)The Minister duly appointed Mr Power as the Inquiry Panel under s 8.16(1) of the LG Act and the relevant provisions of the RC Act including s 8A, applied to the Inquiry pursuant to s 8.20 of the LG Act.
(2)The Inquiry Panel duly issued the SOI Notice on Ms Chen.
(3)Ms Chen was a 'public officer' when she received the SOI Notice.
(4)Ms Chen received the Omitted Payments on or about the date specified in the Statement of Charge.
(5)Ms Chen was required by the SOI Notice objectively construed to disclose in her SOI the receipt of the Omitted Payments and failed to do so.
(6)If each of the above is made out, then in not including the Omitted Payments in her SOI, Ms Chen furnished information knowing it to be false or misleading in a material particular.
(7)Alternatively to the immediately preceding matter, by not including the Omitted Payments in her SOI, Ms Chen had failed without reasonable excuse to comply with the SOI Notice.
The Inquiry Panel was duly appointed
Pursuant to s 8.16 of the LG Act, the Minister may appoint an Inquiry Panel consisting of one or three people 'to enquire into and report on any aspect of a local government or its operations or affairs'.[7]
[7] Local Government Act 1995 (WA) (LG Act) s 8.16(1).
The Minister for Local Government; Heritage; Culture and the Arts, the Hon David Templeman MLA appointed Anthony Power to be the Inquiry Panel on 24 April 2018.[8]
[8] Notice of Appointment of an Inquiry Panel (Pursuant to Section 8.16) of LG Act: Third Carmichael Affidavit, JLC 37.
I am satisfied beyond a reasonable doubt that the Inquiry Panel was duly appointed. I note, also, that there was no dispute at the Trial as to this.
The Inquiry Panel duly issued the SOI Notice to Ms Chen
There was no dispute that the SOI Notice was duly issued and served on Ms Chen. In that respect, I note that Ms Chen by her SOI purported to answer the SOI Notice by her solicitor's response of 15 May 2019,[9] and that referred to the SOI Notice as having been issued to Ms Chen.
[9] First Carmichael Affidavit, JLC 6.
I am satisfied beyond a reasonable doubt that the SOI Notice was duly issued and served.
Also, there was no dispute that the SOI Notice and the relevant statutory provisions required Ms Chen to produce a statement of information that answered the terms of the SOI Notice.
Ms Chen was a 'public officer'
By s 8A(1) of the RC Act, 'public officer' had the meaning given to it by s 3 of the Corruption, Crime and Misconduct Act 2003 (WA). In turn, s 3 of that latter Act gave 'public officer' the meaning given to it by s 1 of the Criminal Code 1913 (WA). By that (last Act) a person who was 'a member … of any … council of a local government …' was defined to be a 'public officer'.
I find that Ms Chen was initially elected as a councillor of the City of Perth on 15 October 2011 as established by the results published on its website by the Western Australian Electoral Commission.[10]
[10] Western Australian Electoral Commission, 2011 Local Government Ordinary Elections Report (2011) 115; First Carmichael Affidavit, JLC 1.
I further find that Ms Chen was re-elected on 17 October 2015 for a term which expired on 19 October 2019, as proved by the results published on its website by the Western Australian Electoral Commission.[11]
[11] Western Australian Electoral Commission, 2015 Local Government Ordinary Elections Report (2015) 125; First Carmichael Affidavit, JLC 2.
As noted, the Hon Minister suspended the City of Perth Council, including Ms Chen, on 2 March 2018: that is, while she was still a councillor.
I accept the Applicant's submissions that, notwithstanding the suspension, under the relevant legislation she remained a councillor after the suspension of the Council and at the time of the service of the SOI Notice on about 1 March 2018.[12]
[12] Applicant's Submissions filed 28 July 2023 [70].
The above were not disputed by Ms Chen, and I find each of them proved beyond a reasonable doubt.
Did Ms Chen receive the Omitted Payments on or about the dates alleged
Ms Chen did not dispute that she received the Omitted Payments. Rather, she disputed:
(1)the character of the Omitted Payments;
(2)whether they were paid under the Fund Raising Agreement; and
(3)whether they fell within the definition of 'income' in the SOI Notice.
Before turning to the receipt of the particular payments, the Applicant's case was that the Omitted Payments were paid into one of two accounts, being:[13]
(1)a Rocket Deposit Account with Westpac Bank in the name of Ms Chen and her husband; or
(2)a Choice Account with Westpac Bank in Ms Chen's and her husband's names.
[13] Applicants Submissions filed 28 July 2023 [41].
Ms Chen did not dispute that she and her husband had the Rocket Deposit Account and the Choice Account at the material times.
The Inquiry Panel had issued a Notice to Produce Documents to Westpac Bank requiring it to produce documents for all accounts held by Ms Chen and her husband.[14] Westpac Bank then produced a number of documents relating to both the Rocket Deposit and the Choice Accounts.[15]
[14] First Carmichael Affidavit [16] - [23].
[15] First Carmichael Affidavit [24].
I find that the Omitted Payments received into either the Rocket Deposit Account or the Choice Account were received, relevantly within the meaning of the SOI Notice, by Ms Chen.
The Inquiry Panel issued a Notice to Produce Documents to the National Australia Bank for records of Hay 263 Pty Ltd.[16] In response, NAB produced a number of statements for an account held by Hay 263 Pty Ltd ATFT Hay 263 Trust (Hay 263 Account).[17] As will be seen below, with one significant exception all of the Omitted Payments were paid from the Hay 263 Account.
The Omitted Payments
[16] Second Carmichael Affidavit [2] - [4].
[17] See, eg, the NAB Statement from 12 March 2013 to 11 June 2013: Second Carmichael Affidavit, JLC 63 (pages 14 - 16).
The Statement of Charge had two payments within Particular (f)(iii)D; being $67,500 and $7,500, both of which were alleged to have been received on 25 September 2015. As will be seen, it is important to differentiate those two receipts and I have referred to them respectively below as Particulars (f)(iii)D(a) and (b).
Particular (f)(iii)D(a): $67,500: 25 September 2015
The evidence established a deposit into the Westpac Rocket Deposit Account with a notation 'Deposit Barker 3 Barker Inv 06 2015'.[18] The deposit transaction document recorded the other parties' reference as being 'Barker Inv 06 2015'. The Applicant did not adduce any corresponding bank documents of the account from which this deposit was made.
Particular (f)(iii)D(b): $7,500: 25 September 2015
[18] Westpac deposit transaction document: First Carmichael Affidavit, JLC 16 (page 51); Westpac Statement for Rocket Deposit: First Carmichael Affidavit, JLC 18 (page 55). Transaction described as 'Barker Inv 06 2015' in the Westpac statement.
The NAB evidence established a transfer of $7,500 from the Hay 263 Account with the particulars 'Lily Inv' on 25 September 2015.[19]
[19] Second Carmichael Affidavit, JLC 73; Applicant's Submissions filed on 28 July 2023 [48.1(a)].
The Westpac records established a deposit of $7,500 into the Rocket Deposit Account: it was annotated as 'Hay 236 Inv' in the Westpac deposit transaction document and the Westpac statement.[20]
Particular (f)(iii)E: $7,200: 23 October 2015
[20] Westpac deposit transaction document: First Carmichael Affidavit, JLC 15 (page 50); Westpac Statement for Rocket Deposit: First Carmichael Affidavit, JLC 18 (page 55).
The NAB evidence established a transfer of $7,200 from the Hay 263 Account with the particulars 'EFT231015' on 23 October 2015. [21]
[21] Second Carmichael Affidavit, JLC 73 (page 43).
The Westpac records established a deposit of $7,200 into the Rocket Deposit Account from the Hay 263 Account:[22] with it annotated as 'Deposit Hay 263 Trust Hay 263 27 27 in the Westpac deposit transaction document[23] and as 'Deposit Hay 236 Trust Hay 236 Inv' in the Westpac statement.[24]
Particular (f)(iii)F: $7,200: 21 December 2015
[22] Westpac deposit transaction document: First Carmichael Affidavit, JLC 17 (page 52).
[23] Westpac deposit transaction document: First Carmichael Affidavit, JLC 17 (page 52).
[24] Westpac Statement for Rocket Deposit: First Carmichael Affidavit, JLC 18 (page 55).
The evidence showed a transfer of $16,396 from the NAB Hay 263 Account with the particulars 'EFT Crs211215' on 21 December 2015.[25]
[25] NAB Statement for Business Cheque Account: Second Carmichael Affidavit, JLC 74 (page 46).
The Westpac records established a deposit of $7,200 received into the Rocket Deposit Account from the Hay 263 Account: with it annotated as 'Hay 263 28 28' in the Westpac deposit transaction document and Westpac statement.[26]
Particular (f)(iii)G: $10,800: 18 February 2016
[26] Westpac deposit transaction: First Carmichael Affidavit, JLC 19 (page 58); First Carmichael Affidavit, JLC 20 (page 61).
The evidence established a transfer of $10,800 on 18 February 2016 from the NAB Hay 263 Account with the particulars 'Lily Chen Invs'.[27]
[27] NAB Statement for Business Cheque Account: Second Carmichael Affidavit, JLC 75 (page 48);
The Westpac records established a deposit of $10,800 received into the Rocket Deposit Account on 18 February 2023: with it annotated as 'Hay263' in the Westpac deposit transaction document and Westpac statement.[28]
Particular (f)(iii)H: $20,000: 31 March 2017
[28] Westpac deposit transaction document: First Carmichael Affidavit, JLC 21 (page 64); First Carmichael Affidavit, JLC 22 (page 66).
The evidence established a transfer of $20,000 from the NAB Hay 263 Account with the particulars 'Lily Chen March17' on 31 March 2017.[29]
[29] NAB Statement for Business Everyday Account: Second Carmichael Affidavit, JLC 81 (page 60).
The Westpac records established a deposit of $20,000 received into the Rocket Deposit Account on 31 March 2017: with it annotated as 'Hay 263' in the Westpac deposit transaction document and Westpac statement.[30]
Particular (f)(iii)I: $13,000: 27 April 2017
[30] Westpac deposit transaction document: First Carmichael Affidavit, JLC 23 (page 70); Westpac Statement for Rocket Deposit: First Carmichael Affidavit, JLC 24 (page 72).
The evidence showed that $13,000 was transferred from the NAB Hay 263 Account with the particulars 'Lily Chen March17' on 27 April 2017.[31]
[31] NAB Statement for Business Everyday Account: Second Carmichael Affidavit, JLC 81 (page 60).
The Westpac records established a deposit of $13,000 received into the Rocket Deposit Account on 27 April 2017: with it annotated as 'Hay 263' in the Westpac deposit transaction document and the Westpac statement.[32]
Finding on Omitted Payments Received
[32] Westpac deposit transaction document: First Carmichael Affidavit, JLC 25 (page 75); Westpac Statement for Rocket Deposit: First Carmichael Affidavit, JLC 26 (page 77).
I find beyond a reasonable doubt that Ms Chen received each of the Omitted Payments on about the dates set out in the Statement of Charge.
Was Ms Chen required (objectively) to disclose the Omitted Payments in her SOI
It was not in dispute that Ms Chen did not include any of the Omitted Payments in her SOI.
The first principal matter in dispute I have to resolve is whether the Omitted Payments were, as a matter of objective construction, within either of the exclusions of the definition of 'income' in (vi) or (vii) of the SOI Notice.
Having reached my conclusions on that, I have then considered further questions in case I am wrong about the construction I have adopted of the SOI Notice.
I have not sought to construe the SOI Notice objectively in a vacuum. Rather, I have considered whether, if the Omitted Payments were Success Fees paid under the Fund Raising Agreement, they were required to be disclosed in response to the SOI Notice.
Were the Omitted Payments received from Ms Chen's occupation/s
As noted and as properly conceded by counsel for the Applicant, if, on a proper construction of the SOI Notice, Success Fees received by Ms Chen under the Fund Raising Agreement were 'received from [her] occupation/s' (and so within the exclusion in (vi) in the definition of 'income' in the SOI Notice), then the prosecution would fail.[33]
[33] Trial ts 45.
This is but one example of how both sides conducted the Trial in a proper and focused manner which has greatly assisted the Court in its determination of the application.
There was no concession by Ms Chen that the Omitted Payments were Success Fees paid under the Fund Raising Agreement.
For the reasons set out below, I have reached the judgment that if[34] Ms Chen received the Omitted Payments as Success Fees under the Fund Raising Agreement, then that was income received from her occupation/s and was excluded from being income by (vi) of the definition of 'income' in the SOI Notice. That disposes of the prosecution.
Why the Omitted Payments were from Ms Chen's occupation/s
[34] At this point in the reasoning, I am not making a finding that the Omitted Payments were, factually, Success Fees paid under the Fund Raising Agreement noting that Ms Chen disputes that.
The Applicant contended that the Success Fees for 'commission payments' could not be within the exclusion of income from occupation/s.[35]
[35] Trial ts 44.
That was because, as I understand it, the Applicant says that to construe the SOI Notice in that way would leave the inclusive part of the definition of 'income' at (iv) with little work to do. That may be so. However, I read the definition as including (i) - (iv) as general matters, but those generally included matters must then be confined or read down by the specific exclusions in, relevantly, (vi) and (vii).
The Applicant further contended that as a lawyer or migration agent there would be a conflict between Ms Chen's obligations in those roles on the one hand and with her having a separate arrangement with a development company on the other.[36] The contention appears to be that such a conflict would mean that Ms Chen's roles with the Devwest Group conflicted with her obligations of a lawyer and migration agent and so therefore factually she could not be relevantly 'occupied' with the Devwest Group.
[36] Trial ts 42 - 43.
I do not think I need to decide whether Ms Chen's different roles (eg, migration agent or lawyer versus Facilitator under the Fund Raising Agreement) amounted to her acting in a position of potential conflict. That is because I consider that even if those roles may have led to a conflict or a potential conflict, that did not preclude her role under the Fund Raising Agreement being (factually) an occupation within the meaning of (vi) of the exclusion in the definition of income in the SOI Notice.
I do not accept the Applicant's contention that objectively the SOI Notice used 'occupation/s' in the exclusion at (vi) of the definition to mean Ms Chen as a lawyer and, or, migration agent. It remains unclear to me as to why that would be so, factually or on the face of the SOI Notice.
For the purposes of deciding whether Ms Chen had a relevant occupation with Devwest Company, I have set out what the evidence established of the relationship between Ms Chen and the Devwest Group being Devwest Company and entities associated with it.
The evidence established (and it was not disputed) that Ms Chen or her company (Wayon Pty Ltd) were parties to the following agreements:
(1) the Fund Raising Agreement as defined above between Devwest Company and Ms Chen and Ge, Zhaoe;
(2)a consulting agreement dated 10 April 2023 between Hay 263 Pty Ltd ACN 151 991 123 as trustee for the Hay 263 Trust, and Ms Chen (Consulting Agreement);[37]
(3)an investment agreement dated 11 April 2013 between Hay 263 Pty Ltd as trustee for the Hay 263 Trust and Wayon Pty Ltd ACN 131 684 172 (Investment Agreement);[38]
(4)a loan agreement dated 26 June 2015 between Hay 263 Pty Ltd and Wayon Pty Ltd (Loan Agreement).[39]
[37] First Carmichael Affidavit, JLC 32.
[38] First Carmichael Affidavit, JLC 33.
[39] First Carmichael Affidavit, JLC 37.
There was also a redemption form signed by Ms Chen on behalf of Wayon Pty Ltd addressed to the trustee of the Hay 263 Trust, which was dated 26 June 2015 (Redemption Form).[40]
[40] First Carmichael Affidavit, JLC 36.
I note, here, that the evidence established (without challenge) that Wayon Pty Ltd was a company owned and directed by Ms Chen and her husband.[41]
[41] ASIC Historical Company Extract for Wayon Pty Ltd: First Carmichael Affidavit, JLC 60 (page 523), lists Lily Chen and Mr David Marjri as directors; Trial ts 56.
Pursuant to the Fund Raising Agreement, Ms Chen, as a Facilitator, was appointed to provide certain Services which included an obligation to provide the following services:
·Utilise its[42] Clients and broader networks to do the following:
o Market, distribute and promote the Projects.
o Introduce Clients to the Devwest Group.
o Arrange for Clients to enter into Transactions.
·Use its best endeavours to arrange for Clients to enter into Transactions.
·Promptly deliver (or arrange to be promptly delivered) to the Devwest Group the following:
o Signed forms and agreements relating to Transactions.
o Cheques and money relating to Transactions.
see the heading of 'Appointment' and under the heading of 'Obligations of the Facilitator'.[43]
[42] The Facilitators in the Fund Raising Agreement were referred to as if they were an entity rather than natural persons.
[43] First Carmichael Affidavit, JLC 31 (page 91).
The Fund Raising Agreement provided for the following Fees to be paid:
In consideration for the Services provided under this Agreement, the Facilitator is entitled to the following:
·The Success Fee for an Initial Transaction.
·The Additional Fee for an Additional Transaction.[44]
[44] First Carmichael Affidavit, JLC 31 (page 91).
The Fund Raising Agreement made the following provision as to Payment:
Fees are payable within 14 Business Days (or as otherwise agreed between the parties) of all of the following being satisfied in relation to a Transaction:
·Acceptance of the Transaction by the Devwest Group.
·Receipt by the Devwest Group of the required money and cleared funds from the Client.
·Receipt by the Devwest Group of valid tax invoice for the fee.[45]
[45] First Carmichael Affidavit, JLC 31 (page 92).
In the Fund Raising Agreement, the definitions of 'Client', 'Devwest Group', 'Initial Transaction', 'Project', 'Services', 'Success Fee' and 'Transaction' are all of significance to the above provisions and are set out below:[46]
[46] Fund Raising Agreement: First Carmichael Affidavit, JLC 31 (pages 90 - 94).
(1)'Client' means a person introduced by the Facilitator to the Devwest Group for the purpose of investing in a Project; and is a person not already known to the Devwest Group or recorded in the contact database maintained by the Devwest Group.
(2)'Devwest Group' means Devwest Group Pty Ltd ABN 73 146 088 011 and any associated or related entities.
(3)'Initial Transaction' means the first Transaction for a Client.
(4)'Project' means a managed investment scheme, investment company or other investment established and/or operated by the Devwest Group that forecast a total return of approximately 48% over a 24 to 28 month investment term. Forecast returns are not guaranteed.
(5)'Services' means the services to be provided by the facilitator under this Agreement; in particular those services outlined under the clause headed 'Obligations of the Facilitator'.
(6)'Success Fee' means (as applicable):
·For equity investments, an amount equal to 5% of the amount of the Client's equity actually invested in the Project.
·For the provision of debt finance, an amount equal to 1% of the amount of debt actually provided by the Client to the Project.
·For other types of investments and arrangements, an amount as agreed between the parties.
(7)'Transaction' means the following:
·An equity investment in a Project.
·The provision of debt finance for a project.
·Any other arrangement or investment agreed by Devwest relating to a Project.
The Applicant did not allege that the Fund Raising Agreement was anything other than what it appeared to be: that is, a commercial document entered into at arm's length by Ms Chen and Devwest Company.
Chad Ferguson, a director of Devwest Company,[47] gave evidence to the Inquiry that the Company used migration agents, including Ms Chen, to introduce investors to the Company's (and its associated entities') developments.[48] The Fund Raising Agreement was an agreement to that end.[49]
[47] ASIC Historical Company Extract for Devwest dated 28 August 2019: First Carmichael Affidavit, JLC 57 (page 514), lists Mr Chad Ferguson as a director of Devwest.
[48] Inquiry ts: First Carmichael Affidavit, JLC 53 (page 268 lines 32 - 42). In these Reasons I have used the page number in the First Carmichael Affidavit to locate the transcript of the Inquiry, rather than using the page number of the transcript of the Inquiry itself.
[49] Inquiry ts: First Carmichael Affidavit, JLC 53 (page 269 lines 25 - 45).
Simply put, Ms Chen agreed to perform certain services for the Devwest Group in return for reward documented in an arm's length written agreement.
In my judgment, 'occupation/s' in the SOI Notice on its face objectively included Ms Chen's activities or engagement for the purposes of the Fund Raising Agreement.
While the Applicant contended that the SOI Notice had to read as a whole (which, with respect, is clearly correct), the words should be given their ordinary meaning in the context in which they appear.
In reaching that view, I also have had regard to the relevant (from context) dictionary definitions of 'occupation', a word which was not defined in the SOI Notice.
The Macquarie Dictionary (6th ed) relevantly defines 'occupation' as:
1.One's habitual employment, business, trade or calling.
2.That in which one is engaged.
The Shorter Oxford Dictionary (5th ed) relevantly defines 'occupation' as:
1aThe state of having one's time or attention occupied; employment.
1bWhat a person is 'habitually' engaged in, esp. to earn a living; a business, a profession, a pursuit, an activity.
Those dictionary definitions, in my view, support the conclusion I have reached as to the meaning of 'occupation/s' in the SOI Notice.
That conclusion deposes of the application
As noted, my conclusion on this aspect means that Ms Chen was under no legal obligation to include the Omitted Payments in her SOI as alleged, and the prosecution must fail.
The matters I consider from here are on the basis that I am wrong and the Omitted Payments were not within the occupation/s exclusion in (vi) in the definition of 'income' in the SOI Notice. Given the conditional basis on which I have considered the following matters, I have attempted to state my conclusions concisely.
Were the Omitted Payments received from a trust
In my judgment, if Ms Chen received the Omitted Payments as Success Fees under the Fund Raising Agreement then I would not conclude, objectively, that they were 'income' received 'from a trust' within (vii) of the exclusionary part of the definition of 'income' in the SOI Notice.
Principally, that is because the Devwest Company was the other contracting party to Ms Chen in the Fund Raising Agreement. On the face of the Fund Raising Agreement, it contracted in its own right rather than as a trustee. Indeed, there is nothing in the Fund Raising Agreement to suggest that the Devwest Company was acting as a trustee or taking on obligations to be met out of trust funds.
It may be noted that throughout the Fund Raising Agreement the expression 'Devwest Group' was used. That was a defined term said to mean 'Devwest Group Pty Ltd ABN 74 136 088 011 and any associated or related entities'.[50]
[50] Fund Raising Agreement: First Carmichael Affidavit, JLC 31 (page 93).
Use of that broader 'Devwest Group' expression (compared with the contracting party 'Devwest Company') in the Fund Raising Agreement makes sense when one considers the Services which Ms Chen as Facilitator agreed to provide: see for example the Services quoted above by which she was, amongst other things, obliged to 'introduce Clients to the Devwest Group'.[51]
[51] See [84] above; Fund Raising Agreement: First Carmichael Affidavit, JLC 31.
The Payment of Fees under the Fund Raising Agreement, in my view, was an obligation of the Devwest Company. In all of the circumstances, I would find that the SOI Notice (in light of the Omitted Payments being alleged to be Success Fees under the Fund Raising Agreement) would capture the Omitted Payments as they were paid by (or on behalf of) the Devwest Company and were received or would have been received by Ms Chen from Devwest Company, and not from a trust.
Were the Omitted Payments proved to be Success Fees
With the exception of the $67,500 which was the Omitted Payment made and received on 25 September 2015 and set out in Particular (f)(iii)D(a) of the Statement of Charge, I would not find beyond a reasonable doubt that the Other Omitted Payments[52] were received by Ms Chen as Success Fees under the Fund Raising Agreement.
[52] That is the six Omitted Payments set out at Particulars (f)(iii)D(b), E - I in the Statement of Charge, but not including the $67,500.
I have set out above the Payment provision from the Fund Raising Agreement (and the definition of 'Success Fee').[53] As seen, there were three matters in relation to a Transaction which had to be satisfied before, contractually, Devwest Company was liable to pay a Success Fee for an Initial Transaction.[54]
[53] See [86] and [87(6)] respectively above.
[54] First Carmichael Affidavit, JLC 31 (page 92). Fund Raising Agreement Standard Terms and Conditions: Fees are payable within 14 Business Days (or as otherwise agreed between the parties) of all of the following being satisfied in relation to a Transaction: Acceptance of the Transaction by the Devwest Group; Receipt by the Devwest Group of the required money in cleared funds from the Client; and Receipt by the Devwest Group of valid tax invoice for the fee.
In respect of the Other Omitted Payments, the Applicant did not lead, and did not point to, any evidence of:
(1)an 'Acceptance of the Transaction by the Devwest Group'; or
(2)a 'Receipt by the Devwest Group of the required money in cleared funds from the Client'.
That is, there was no evidence which may have established that there had been Initial Transactions (as defined in the Fund Raising Agreement) or funds received by the Devwest Group from a Client which bore any relationship to any of the Other Omitted Payments. The Applicant, on the material adduced, pointed to certain 'admissions' it said Ms Chen had made in the course of giving evidence compulsorily to the Inquiry Panel.
Ms Chen clearly accepted in different parts of her evidence before the Inquiry that she received commissions from Devwest.[55] However, when asked about the Other Omitted Payments and whether they were commission payments, Ms Chen did not clearly accept that proposition.[56]
[55] First Carmichael Affidavit, JLC 53: Inquiry ts page 379 line 35, page 380 lines 10 - 44, page 382 lines 19 ‑ 45, and page 386 lines 2 - 17, 32 – 45, page 401 lines 34 - 40 by way of example.
[56] Inquiry ts: First Carmichael Affidavit, JLC 53 (page 421 lines 5 - 10, page 422 lines 4 - 43).
In short, at the Inquiry Ms Chen was asked about receiving commissions from Devwest, and while admitting, in different places, to receiving 'commissions' she did not, in my view, make any admission that she had received a 'commission' under the Fund Raising Agreement which was a Success Fee and which corresponded to any of the Other Omitted Payments.
For those reasons, I would not be satisfied beyond a reasonable doubt that Ms Chen received any Other Omitted Payment as a Success Fee under the Fund Raising Agreement.
That finding relieves me of having to consider whether the Applicant had excluded as a reasonable hypothesis consistent with Ms Chen's innocence that the Other Omitted Payments had been received by her as interest on an investment pursuant to the Investment Agreement and then pursuant to the Loan Agreement. I note that the parties devoted considerable care and energy to debating whether the Other Omitted Payments might have been interest payments which would not have been paid under the Fund Raising Agreement.[57] It is not necessary for me to consider that matter further.
[57] The debate centred around paras [4.98] - [4.100] of Mr Morris' Supplementary Report MFI 1 and the Applicant's responsive document which was marked 'MFI 2'.
Ms Chen received the $67,500 as a Success Fee under the Fund Raising Agreement
For the reasons which follow, I would have found that the $67,500 payment received by Ms Chen on 25 September 2015 was a Success Fee paid under the Fund Raising Agreement. And, as part of that finding, I am satisfied beyond a reasonable doubt that the Applicant had excluded as a reasonable hypothesis that the $67,500 was received by Ms Chen as interest.
If I were to have made those findings, it would have been after considering the principles summarised by the High Court in R v Baden-Clay (2016) 258 CLR 308 [46] - [47]; and the Court of Appeal in Kenworthy v R (No 2) [2016] WASCA 207 [18].
The combined force of the evidence I refer to below would have satisfied me beyond reasonable doubt that Ms Chen did receive the $67,500 as alleged and that was 'income' which had to be disclosed in her SOI.
In my judgment, the evidence which proved those matters is:
(1)the emails which were JLC 38 to the first Carmichael Affidavit;[58]
(2)the evidence given by Daniel Ow[59] and Chad Ferguson to the Inquiry;[60]
(3)the relationship between the sums in light of the Fund Raising Agreement's provisions; and
(4) an admission made by Ms Chen in her evidence to the Inquiry.[61]
The emails in JLC 38
[58] Emails sent between employees of Devwest dated 17 September and 23 September 2015: First Carmichael Affidavit, JLC 38 (pages 113 - 115).
[59] Inquiry ts: First Carmichael Affidavit, JLC 53 (pages 243 - 259).
[60] Inquiry ts: First Carmichael Affidavit, JLC 53 (pages 260 - 276).
[61] Inquiry ts: First Carmichael Affidavit, JLC 54 (page 421 lines 10 - 12).
The evidence established that:
(1)Daniel Ow was the chief financial officer for the Devwest Group at the relevant time;[62]
(2)Joyce Li was an employee of Devwest who handled the communications at Devwest.[63] Ms Li was introduced to Devwest by Lily Chen.[64]
(3)Damon and Chad Ferguson were two directors of the Devwest Company.[65] Damon handled the financial side of the business, whereas, Chad handled planning and development at Devwest.[66] Damon and Chad Ferguson were also at the relevant times directors of Hay 263 Pty Ltd[67] and Barker 3 Pty Ltd.[68]
[62] Inquiry ts: First Carmichael Affidavit, JLC 53 (page 245 line 35).
[63] Inquiry ts: First Carmichael Affidavit, JLC 53 (page 247 line 19).
[64] Inquiry ts: First Carmichael Affidavit, JLC 53 (page 268 lines 15 - 20).
[65] Inquiry ts: First Carmichael Affidavit JLC 53 (page 245 lines 16 - 18); ASIC Historical Company Extract for Devwest Group Pty Ltd: First Carmichael Affidavit, JLC 57 (page 514).
[66] Inquiry ts: First Carmichael Affidavit, JLC 53 (page 245 lines 25 - 26).
[67] ASIC Historical Company Extract for Hay 263 Pty Ltd: First Carmichael Affidavit, JLC 58 (pages 517 ‑ 518).
[68] ASIC Historical Company Extract for Barker 3 Pty Ltd: First Carmichael Affidavit, JLC 59 (pages 520 ‑ 521).
The email string in JLC 38 comprised the following emails:
(1)Daniel Ow email to Joyce Li on Thursday, 17 September 2015 at 10.19 am with the subject 'Receipt for 'Greenland';[69]
(2)Joyce Li email to Daniel Ow (copied to other Devwest Group recipients) on Thursday, 17 September 20115 at 10.38 am;[70]
(3)Daniel Ow email to Joyce Li (copied to the same people) dated Thursday, 17 September 2015 at 10.58 am;[71]
(4)Joyce Li email to Daniel Ow (copied to the same people) dated Thursday, 17 September 2015 at 11.33 am;[72]
(5)Joyce Li email to Daniel Ow (copied to the same people) dated Wednesday, 23 September 2015 at 4.32 pm with the subject 'Lily's commission for Barker Investor ('Greenland (WA)').[73]
Admissibility of JLC 38
[69] First Carmichael Affidavit ,JLC 38 (page 114).
[70] First Carmichael Affidavit, JLC 38 (pages 113 - 114).
[71] First Carmichael Affidavit, JLC 38 (page 113).
[72] First Carmichael Affidavit, JLC 38 (page 113).
[73] First Carmichael Affidavit, JLC 38 (page 115).
Ms Chen objected to JLC 38 being taken into evidence.
The Applicant submitted that JLC 38 was admissible under s 79C(2a) of the Evidence Act.
Section 79C(2a) makes statements in a document admissible if:
… [I]n any proceedings where direct oral evidence of a fact or opinion would be admissible, any statement in a document and tending to establish the fact or opinion shall, on production of the document, be admissible as evidence of that fact or opinion if -
a)the statement is, or directly or indirectly reproduces, or is derived from, a business record; and
b)the court is satisfied that the business record is a genuine business record.[74]
[74] Evidence Act 1906 (WA) s 79C(2a).
The Applicant relied on Donohoe v The Director of Public Prosecutions (WA) [2011] WASCA 239 [121] - [128] (Buss JA, Murphy JA & Hall J agreeing) and Collopy v Commonwealth Bank of Australia [2019] WASCA 97 [69] (Mitchell, Beech & Pritchard JJA).
It is the statements within the document, rather than the document itself that s 79C(2a) makes admissible.[75] The provisions as to the admissibility of business records are remedial provisions that should be construed liberally and not pedantically.[76] There is no requirement that a qualified person and therefore a person with personal knowledge must have made the statement.[77]
[75] Donohoe [125].
[76] Donohoe [126].
[77] Donohoe [122].
Section 79B contains the definition of 'business', which is defined broadly and includes any 'business, occupation, trade or calling'. The term 'business record' includes a 'document prepared or used in the ordinary course of a business for the purpose of recording any matter relating to the business'.
I accept JLC 38 is a business record prepared in the ordinary course of business for the purpose of recording matters to do with the business of the Devwest Company and, or, Group.
Ms Chen firstly objected to JLC 38 on the basis that the first email from Mr Ow ([117(1)] above said it attached the receipt for Greenland but the email tendered did not attach the receipt.[78] Ms Chen further submitted that none of the witnesses produced the invoices alleged to have been raised by Ms Chen (whether that be commission or interest payments) to the Court.[79]
[78] Trial ts 28.
[79] Trial ts 29.
I do not accept that the receipts or invoices needed to be adduced before the statements in the emails could be admitted into evidence. By analogy, the objection seems to me to be answered by Collopy, where the Court of Appeal said, '[t]here was, in our view, no basis for requiring the production of the electronic data from which the screenshots were derived as a requirement of their admissibility'.[80]
[80] Collopy [69].
Additionally, it is open to the Court 'for the purpose of deciding whether or not a statement is admissible as evidence, draw any reasonable inference from the form of contents of the document in which the statement is contained, or from any other circumstance'.[81]
[81] Section 79C(5)(a) of the Evidence Act; Donohoe [128].
As I understand the submissions for Ms Chen, the second objection to JLC 38 was that the document was of little weight in proving the charges against Ms Chen. Senior Counsel for Ms Chen submitted that 'the investor said to have been introduced by Ms Chen started to put money in on 30 April, and the sum was paid by the end of May, which of course proceeds the commencement of the notice period [for the SOI Notice].[82] Senior Counsel further stated that under the '[F]undraising [A]greement, the commission was to be paid 14 days after receiving the client's … $1.35 million' and therefore the 'requirement for payment would have occurred before the commencement of the SOI Notice'.[83]
[82] Trial ts 29 - 30.
[83] Trial ts 30.
Ultimately, I understood Ms Chen's second objection to JLC 38 as a submission towards the weight I should give regard to the evidence in the document. It was not a reason in and of itself to exclude the evidence.
I find that each of the relevant statements (set out below) in the emails were admissible as a business record under s 79C(2a) and therefore I allowed the attachment at JLC 38 into evidence.
What the JLC 38 emails prove
The Applicant relevantly, relied on the statements within the emails for the following effects:[84]
(a)Funds had been received by Devwest from Greenland, as recorded in a receipt attached to the email.
(b)Confirmation from Ms Li that funds were now due to be paid to Ms Chen.
(c)Ms Chen would provide an invoice to Devwest.
(d)Ms Chen had not yet been paid the commission payment in respect of Greenland's $1.35 million investment in Barker and that Ms Chen should be paid her commission for the Barker project as soon as possible.
[84] Trial ts 16 - 18.
From the email of 17 September 2015 at 10.19 am from Daniel Ow to Joyce Li ([117(1)] above),[85] I find that the Devwest Group had received funds from an entity called 'Greenland' and had receipted that payment.
[85] First Carmichael Affidavit, JLC 38 (page 114).
I find from the email of 17 September 2015 at 10.38 am from Joyce Li to Daniel Ow (copied to others at the Devwest Group) ([117(2)] above)[86] that Greenland had invested $1.35 million into the 'Barker Project' and that Ms Li understood that Ms Chen was entitled to a commission. That email might be read as suggesting that Devwest Group had previously paid Ms Chen a commission in respect to Greenland's investment of $1.35 million, but having regard to Ms Li's later email of 23 September 2015 at 4.32 pm[87] I do not find for that reading.
[86] First Carmichael Affidavit, JLC 38 (pages 113 - 114).
[87] First Carmichael Affidavit, JLC 38 (page 115).
From Daniel Ow's email to Joyce Li (copied to others within Devwest Group) of 17 September 2015 at 10.58 am (para [117(3)] above).[88] I find that Mr Ow accepted that commission was payable to Ms Chen on Devwest Group receiving an invoice from her.
[88] First Carmichael Affidavit, JLC 38 (page 113).
From the email dated 23 September 2015 at 4.32 pm from Ms Li to Daniel Ow (copied to others in Devwest Group) ([117(5)] above),[89] and with the previous emails I have referred to above, I find that:
(1)as at 23 September 2015 Devwest Group had not paid Ms Chen's commission for Greenland (WA)'s investment in Barker Project;
(2)the sum of $1.35 million had been paid to Devwest Group by the end of May 2015;
(3)Ms Li considered that a commission was payable to Ms Li under the Fund Raising Agreement - the Payment provisions were reproduced in the email;
(4)Ms Li considered that Devwest Group was supposed to pay Ms Chen 14 days after the end of May and, therefore, it had been more than three months that Devwest Group had not paid Ms Chen commissions owed.
[89] First Carmichael Affidavit, JLC 38 (page 115).
Further from the email of 23 September 2015 at 4.32 pm ([117(5)] above)[90] it also appears that Ms Li considered that there was a commission payable under the Fund Raising Agreement to Ms Chen for an investment by Greenland (WA) into the Hay 263 Project.
Mr Ow's evidence to the Inquiry
[90] First Carmichael Affidavit, JLC 38 (page 115).
Mr Ow's evidence to the Inquiry was that Greenland was one of the investors that Ms Chen had introduced to the Devwest Group.[91]
Chad Ferguson's evidence to the Inquiry
[91] Inquiry ts: First Carmichael Affidavit, JLC 53 (pages 251 - 252).
At the Inquiry, Chad Ferguson gave evidence that:
(1)at all material times he was an owner and director of Devwest Group;[92]
(2)Devwest was a property development company conducting projects in Western Australia and South Australia;[93]
(3)the relationship between Devwest and Ms Chen was a 'typical migration lawyer relationship with a company'.[94] Mr Ferguson explained that Ms Chen, as a migration lawyer, would introduce clients to invest in developments as they would need to make investments to satisfy the business visa requirements. The migration agent would monitor the investors for roughly 12 months.[95] The migration agent receives roughly 5% of the capital invested by their client as commission; and
(4)Ms Chen had initially invested into the 263 Hay development. However, this later became a loan and Ms Chen began receiving interest repayments after about a year.[96] [97]
Relationship between the $67,500 and the $1.35 million
[92] First Carmichael Affidavit, JLC 53 (page 261 line 20).
[93] First Carmichael Affidavit, JLC 53 (page 261 lines 36 - 34).
[94] First Carmichael Affidavit, JLC 53 (page 268 lines 1 - 2).
[95] First Carmichael Affidavit, JLC 53 (page 268 lines 32 - 36).
[96] First Carmichael Affidavit, JLC 53 (pages 271 - 274).
[97] First Carmichael Affidavit, JLC 53 (pages 262 line 29, 266, 268); Trial ts 24 - 26.
I have already found that Ms Chen received the amount of $67,500 into the Rocket Deposit Account on 25 September 2015, being the Omitted Payment in Particular (f)(iii)D(a) from an account named Barker 3.
The Applicant points to the amount of $67,500 as being 5% of $1.35 million and,[98] so, it was submitted was consistently with the first bullet point part of the definition of Success Fee which provides:
·For equity investments, an amount equal to 5% of the amount of the Client's equity actually invested in the Project.[99]
[98] Trial ts 19 - 20
[99] Fund Raising Agreement between Devwest and Ms Chen dated 10 April 2013: First Carmichael Affidavit, JLC 31 (page 93).
In contradistinction then to the Other Omitted Payments, I find a clear relationship or link between an investment by Greenland (WA) and the money received by Ms Chen which equals the amount of the Success Fee she would be entitled to under the Fund Raising Agreement.
Admission by Ms Chen
In her evidence to the Inquiry, Ms Chen specifically admitted a payment she received $67,500 as 'certainly' being a commission payment[100]; which in the context of the surrounding questioning is to be understood as admitting also the sum was received from Devwest (noting that Counsel Assisting did not seek to distinguish between Devwest Company and the Devwest Group).
In not including the Omitted Payments in her SOI, Ms Chen furnished information knowing it to be false or misleading in a material particular
[100] First Carmichael Affidavit, JLC 53 (page 421 lines 7 - 13).
Under this heading, I have proceeded on the basis that in his primary case the Applicant must prove beyond a reasonable doubt that Ms Chen knew that her SOI did not contain all of the information required and that the omission of the Omitted Payments was not accidental or unintentional: International Land Developments Pty Ltd v Diamo Nominees Pty Ltd (2007) WAR 201 [68], [70] (Martin CJ); CEO, Department of Environment and Conservation v Szulc [3], [5] (Martin CJ).
If I am wrong as to the proper construction of the SOI Notice as to Ms Chen's occupation/s, it might be thought to be a view which could be reasonably held (if ultimately found to be wrong). It may be thought curious that I am assessing the reasonableness of my own view as to what was within Ms Chen's 'occupation/s' in exclusion (vi) of the SOI Notice (on the premise that my primary view above is wrong) but I consider that I would be required to do so.
That is, I consider that the Applicant could not exclude the reasonable possibility that Ms Chen may have omitted the Omitted Payments because she held a wrong view as to what income she was required to state as being 'income' as defined in the SOI Notice.
The Applicant sought to overcome this by contending that Ms Chen's evidence to the Inquiry showed that she accepted (at least at that time) that she should have included commission payments from Devwest in her SOI. The force of those clear statements by Ms Chen in her evidence to the Inquiry was completely undermined, in my view, by the fact that neither counsel assisting nor the Inquiry Panel drew the exclusions in the SOI Notice's definition of 'income' to Ms Chen's attention at the time she was accepting those propositions. In this respect, I accept the submission made by Ms Chen's counsel.
With the possibility of more than one reasonable reading, I consider the position is as identified by the Full Court in R & I Bank of Western Australia v Anchorage Investments Pty Ltd (1993) 10 WAR 59, especially at 68 line 35 - page 69 line 45 and at page 70 lines 15 ‑ 25 (Ipp J); at page 78 lines 4 - 20 (Owen J). I take from those passages (and the authorities cited and approved of therein) that, at the least, a prosecutor may not be able to exclude the reasonable possibility that the contemnor had inadvertently or accidentally not complied with the compulsive order if the order was ambiguous or capable of more than one reasonable meaning.
With respect, I consider that approach is also consistent with that adopted by Martin CJ in Diamo; especially at [66], [68], [70].
If I am wrong as to Ms Chen not being objectively under a lawful obligation to state the Omitted Payments, I consider that the SOI Notice was capable of more than one reasonable meaning.
As more than one reasonable reading is available here, that gives rise, in my view, to a reasonable hypothesis consistent with Ms Chen's innocence - namely, that she inadvertently or accidentally (by a misunderstanding or a misreading) did not comply with the SOI Notice because she took it, reasonably, to mean something different from the 'true' construction I found as to her 'occupation/s'.
Further, here, the wording of the exclusion at (vii) of the definition of 'income' (re income from a trust) also would lead, in my view, to more than one reading being reasonably open.
Ms Chen as recipient was not given any assistance in the SOI Notice as to what was meant by income she received 'from a trust'.
An equity lawyer might say, with some justification, that income is not received from a trust, but is received from a trustee. However, a tax lawyer may say something different on the basis that trusts are treated by Australian tax authorities, at least, as separate entities.
To an 'ordinary' person income from a trust may connote that the person is receiving money out of trust funds as a beneficiary. Although, equally possibly, such a person might think that income 'received from a trust' connotes or includes income which they received (from trust funds) for providing services to a trust or a trustee.
I have found above that if the Omitted Payments were Success Fees paid under the Fund Raising Agreement then (objectively) they would not have been received by Ms Chen from a trust.
Notwithstanding that finding, it must be noticed that with the exception of the $67,500, the Other Omitted Payments were paid from the Hay 263 Account which was an account of Hay 263 Pty Ltd ATFT Hay 263 Trust.
In those circumstances, I would have found that the Applicant could not exclude a reasonable possibility that Ms Chen had inadvertently or accidentally not complied with the SOI Notice as she considered that the Other Omitted Payments were received by her 'from a trust' and so within the exclusion at (vii) of the definition of 'income'.
The alternative case
I do not understand how the Applicant's alternative case under s 12A(a) of the RC Act is a true alternative case.
In any event, the necessity for the Applicant to exclude an inadvertent or accidental failure to comply applies equally here.
For the reasons I have given above, in the primary case, the Applicant would also fail in his alternative case.
Other matters
I have found that the Omitted Payments were not required to (objectively) be stated by Ms Chen in her SOI because of the exclusion at (vi) of the definition of 'income' in the SOI Notice.
Nonetheless, at least the $67,500 was income of Ms Chen in a more general (non‑defined in the SOI Notice) sense.
And, it may be noted, that it may very well be that the Other Omitted Payments, whether paid under the Fund Raising Agreement or as interest to Ms Chen were, again, income of Ms Chen in a more general (non-defined in the SOI Notice) sense.
It appears from the evidence Ms Chen gave to the Inquiry Panel that she did not include any of the Omitted Payments (and specifically had not included the $67,500) in any relevant tax return and had not included them in any primary or annual returns completed pursuant to s 5.75 and s 5.76 of the LG Act.[101]
[101] First Carmichael Affidavit, JLC 53 (pages 384 lines 29 - 46; 385 lines 1 - 46; 392 line 42).
While I have found the $67,500 not to be 'income' within the definition in the SOI Notice, Ms Chen's non-inclusion of, at least, the $67,500 in tax returns and local government returns does not, obviously, reflect well on her.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JC
Associate to the Honourable Justice Howard
6 SEPTEMBER 2023
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