Australian Securities and Investments Commission v Bekier (Evidentiary Ruling)
[2025] FCA 237
•14 March 2025
FEDERAL COURT OF AUSTRALIA
Australian Securities and Investments Commission v Bekier (Evidentiary Ruling) [2025] FCA 237
File number: NSD 1082 of 2022 Judgment of: LEE J Date of judgment: 14 March 2025 Catchwords: EVIDENCE – voir dire – whether sworn testimony of a witness at an inquiry is subject to the prohibition in s 17(2) of the Royal Commissions Act 1923 (NSW) – whether the relevant provision of the State law is “picked up” in federal jurisdiction by reason of s 79 of the Judiciary Act 1903 (Cth) – whether the probative value of evidence is substantially outweighed by the dangers listed in s 135 of the Evidence Act 1995 (Cth) – evidence on voir dire admitted in the trial Legislation: Constitution s 109
Evidence Act 1995 (Cth) ss 56, 56(1), 106, 106(2), 135, 192, 192(2), 192(2)(a), 192(2)(b), 192(2)(c), 192(2)(d), 192(2)(e)
Judiciary Act 1903 (Cth) s 79
Casino Control Act 1992 (NSW) ss 30, 143, 143A(2)
Evidence Act 1995 (NSW) ss 8, 9(3)(b), 26, 135
Royal Commissions Act 1923 (NSW) ss 17, 17(2)
Cases cited: ASIC Macdonald (No 7) [2008] NSWSC 1367
ASIC v Citigroup Markets Australia Pty Ltd (No 2) [2007] FCA 121; (2007) 157 FCR 310
ASIC v Rich [2006] NSWSC 643; (2006) 201 FLR 207
Dixon v Citiline Developments Pty Ltd [2018] FCA 1446
Herron and Another v HarperCollins Publishers Australia Pty Ltd and Another [2022] FCAFC 68; (2022) 292 FCR 336
Lehrmann v Network Ten Pty Limited (Expert Evidence) [2023] FCA 1577
R v BD (1997) 94 A Crim R 131
Australian Law Reform Commission, Evidence (Interim) (Report 26, 1985)
Stephen Odgers, Uniform Evidence Law (19th ed, LawBook Co, 2024)
Stephen Odgers, Uniform Evidence Law (3rd ed, LBC Information Services, 1998)Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 46 Date of hearing: 14 March 2025 Counsel for the plaintiff: Dr R Higgins SC with Ms S Patterson Solicitor for the plaintiff: Norton Rose Fulbright Counsel for the first defendant: Mr J Williams SC with Mr J Entwisle Solicitor for the first defendant: Gilbert + Tobin Counsel for the second defendant Mr P Wood with Mr B Hancock Solicitor for the second defendant Gadens Lawyers Counsel for the fifth defendant: Mr M Darke SC with Mr P Meagher Solicitor for the fifth defendant: Gilbert + Tobin Counsel for the sixth to ninth defendants: Mr M Henry SC with Ms Z Hillman and Ms L Rich Solicitor for the sixth to ninth defendants: Arnold Bloch Leibler Counsel for the tenth to eleventh defendants: Mr R Dick SC with Ms A Lyons and Ms Z Bush Solicitors for the tenth to eleventh defendants: Arnold Bloch Leibler RULING
NSD 1082 of 2022 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Plaintiff
AND: MATTHIAS MICHAEL BEKIER
First Defendant
PAULA MAREE MARTIN
Second Defendant
GREGORY FRANCIS HAWKINS (and others named in the Schedule)
Third Defendant
RULING MADE BY:
LEE J
DATE OF RULING:
14 MARCH 2025
THE COURT RULES THAT:
1.The first defendant’s application for the Court to exclude, pursuant to s 135 of the Evidence Act 1995 (Cth), pages 3020 and 3113–3115 of the transcript of the evidence he provided at the Independent Review of The Star Pty Ltd conducted by Mr Adam Bell SC under the Casino Control Act 1992 (NSW), which was marked as MFI13, from being admitted as evidence in this proceeding, be refused.
2.MFI13, and the evidence received on the voir dire, be admitted as evidence in the trial.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR RULING
(Delivered ex tempore, revised from the transcript)LEE J:
A INTRODUCTION
This proceeding has reached the stage where the plaintiff, the Australian Securities and Investments Commission (ASIC), has closed its case, and the first defendant (Mr Bekier), has gone into evidence. During the cross-examination of Mr Bekier, an issue arose as to the admissibility of evidence and, if admissible, as to its discretionary exclusion.
I adopted the pragmatic approach suggested to me by the parties of receiving the relevant evidence on the voir dire to allow the whole of the cross-examination and re-examination to be completed, and I deferred ruling until ASIC sought to tender the evidence received on the voir dire in the trial.
The issue arises the following way.
Prior to giving evidence in this proceeding, Mr Bekier provided sworn testimony at an inquiry conducted by Mr Adam Bell SC pursuant to ss 30 and 143 of the Casino Control Act 1992 (NSW) (CC Act). Parts of that testimony, in particular, the testimony which appears on pages 3020 and 3113–3115 of the inquiry transcript, has been marked MFI13 in this proceeding. Argument proceeded before me on the basis that the whole of MFI13 would either go into evidence or be excluded (hence there was no need to descend to the detail of considering individual representations contained within MFI13).
Mr Bekier objects to the use of the representations contained in MFI13 in the present proceeding on the basis that the inquiry testimony is subject to the prohibition in s 17(2) of the Royal Commissions Act 1923 (NSW) (RC Act). This section, if applicable, provides that “an answer made … by a witness to or before the commission shall not, except as otherwise provided in [s 17], be admissible in evidence against that person in any civil or criminal proceedings”. This provision is arguably applicable because s 143A(2) of the CC Act provides that the RC Act “applies to any witness summoned to attend or appearing before the person presiding at the inquiry …”.
For reasons which I provided (and with which Rares and Wigney JJ agreed) in Herron and Another v HarperCollins Publishers Australia Pty Ltd and Another [2022] FCAFC 68; (2022) 292 FCR 336 (at 413–424 [326]–[382]), s 79 of the Judiciary Act 1903 (Cth) does not operate to “pick up” this provision in relation to proceedings conducted in a federal court.
Mr Bekier submits that this decision is wrong, and that s 56 of the Evidence Act 1995 (Cth) (EA) does not “otherwise provide” because there is no apparent legislative intention of the Commonwealth Parliament to “cover the field” on the subject matter of the admissibility of relevant evidence. The reference to “cover the field” is obviously a reference to the now principled approach to s 79 (which adopts an approach to inconsistency relevantly identical to that contained in s 109 of the Constitution: see Herron at [353]).
It will, perhaps, come as no surprise to remark that even though I am bound by the Full Court’s decision, I do not agree with Mr Bekier’s contention. The EA carefully identifies the provisions of State law which are to be “picked up” for the purposes of qualifying the effect of s 56 of the EA, which provides that evidence which is relevant in a proceeding is admissible in the proceeding, except as otherwise provided by the EA. In short, s 17(2) of the RC Act is directly and logically inconsistent with s 56(1) of the EA: s 56(1) says evidence is admissible; s 17(2) says the same evidence is inadmissible. A law of the Commonwealth provides otherwise than s 17(2) and therefore it is not picked up.
In any event, Mr Bekier contends that even if the prohibition is not picked up, then the relevant evidence should be excluded pursuant to s 135 of the EA.
As is well known, s 135 provides:
135 General discretion to exclude evidence
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a)be unfairly prejudicial to a party; or
(b)be misleading or confusing; or
(c)cause or result in undue waste of time.
Although the parties’ submissions were not structured in this way, s 135 involves a three-step process. The first is to assess the probative value of the evidence, with the term “probative value” defined in the Dictionary of the EA in the following terms:
probative value of evidence means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue.
The second step is to assess the danger that the evidence might (relevantly for present purposes) be unfairly prejudicial to a party. The third step is to undertake a balancing exercise to determine whether the probative value of the evidence is substantially outweighed by such danger, and if I am satisfied that it is, that evidence may be excluded.
In undertaking this third aspect of the process, as I explained in Herron (at 426–427 [390]–[391]), the general discretion needs to be exercised in accordance with s 192 of the EA. That section provides:
192 Leave, permission or direction may be given on terms
(1)If, because of this Act, a court may give any leave, permission or direction, the leave, permission or direction may be given on such terms as the court thinks fit.
(2)Without limiting the matters that the court may take into account in deciding whether to give the leave, permission or direction, it is to take into account:
(a)the extent to which to do so would be likely to add unduly to, or to shorten, the length of the hearing; and
(b)the extent to which to do so would be unfair to a party or to a witness; and
(c)the importance of the evidence in relation to which the leave, permission or direction is sought; and
(d)the nature of the proceeding; and
(e)the power (if any) of the court to adjourn the hearing or to make another order or to give a direction in relation to the evidence.
(Emphasis added).
It is well accepted that the terms “leave, permission or direction” in s 192 carry a broad meaning and encompass an order or direction to admit or exclude evidence: see ASIC v Rich [2006] NSWSC 643; (2006) 201 FLR 207 (at 210 [9] per Austin J) and ASIC v Citigroup Markets Australia Pty Ltd (No 2) [2007] FCA 121; (2007) 157 FCR 310 (at 311–312 [7]–[8] per Jacobson J). Further, the use of the phrase “is to take into account” dictates that the considerations in s 192(2) are mandatory to the extent that they are applicable.
B PROBATIVE VALUE
In assessing the probative value of the proposed evidence, it is worth having regard to various aspects of the pleading.
The amended statement of claim (at [116]) refers to the fact that on 12 June 2019, Mr Angus Buchanan (Star’s Due Diligence Programme Manager) sent an email to Ms Martin, Mr White and Mr Houlihan, attaching a copy of a report on Suncity that he and his team had compiled in 2018 when he was employed by the Hong Kong Jockey Club (HKJC).
It is alleged by ASIC that, in his email, Mr Buchanan stated that the HKJC report had been prepared due to the potential threat that Suncity posed to the integrity of racing in Hong Kong and that he suspected certain aspects of the report may be of interest to Star. It is also alleged that he noted that because of overlapping interests, the report had been provided to senior management of the Hong Kong Police, the Hong Kong Independent Commission Against Corruption, the Australian Criminal Intelligence Commission and the Australian Federal Police.
It is further alleged in the amended statement of claim (at [117]) that the HKJC report, among other things:
(a)contained a covering memorandum (to executives of the [HKJC]) from the club’s Director of Security & Integrity, in which he:
(i)referred to Australian federal law enforcement having an interest in Suncity and being very keen to take enforcement action;
(ii)described Suncity as a threat to the [HKJC] on the basis that Suncity clearly involved a number of criminal enterprises and had principals who had a background in triad societies;
(b)identified that the purpose of the report was to provide an update and overview of Suncity’s business operations, key personalities and links to organised crime in Hong Kong and overseas;
(c)stated that Mr Chau was alleged to be a member of the Macau faction of the 14K triad society;
(d)stated that Mr Chau’s major business partner (with whom Mr Chau had 11 common directorships) was believed to be a member of the 14K triad society in Hong Kong, and was reported by intelligence sources to be involved in illegal bookmaking, drug trafficking and large scale money laundering activities;
(e)recorded that Mr Chau was reported to have been the recipient of a portion of funds stolen in a cyber attack from accounts of the Bangladesh Bank held at the Federal Reserve of New York, and that no charges had been laid as the FBI continued its investigation;
(f)recorded that Australian law enforcement sources had informed the [HKJC] in May 2017 that:
(i)two persons of interest to Australian authorities (including a person called Benny Lui Xu Xiong (Mr Xiong)) had been involved in making a cash deposit of $403,000 into an account at the Sydney Casino, which was then immediately transferred to Mr Chau’s account at the Sydney Casino;
(ii)Suncity was of interest to Australian law enforcement authorities in relation to suspected large scale money laundering activities;
(iii)during 2013 to 2015 Suncity was believed to be laundering up to $2 million per day using various money laundering methodologies, and that it was suspected that a significant amount of that cash was the proceeds of drug trafficking activities,
(together, the HKJC Information).
In answer to this latter allegation, Mr Bekier, in his further amended defence, admits the HKJC report included statements to the effect pleaded (at [117(a)]).
Further, in the amended statement of claim (at [134A]), it is alleged in very broad terms that Mr Bekier, among others, did not request that the board be provided with information related to probity which was held (or was able to be obtained) by Star. In answer to this allegation, Mr Bekier, among other things, contends (at [134A(d)] of his further amended defence) that following the publication of media reports concerning the contents of the HKJC Report, he had a conversation with Mr Buchanan in which he asked Mr Buchanan for a copy of the HKJC Report and he was told by Mr Buchanan that he could not be given a copy of the report because it was the intellectual property of the HKJC, together with various other matters.
Finally, for present purposes, it is useful to refer to the amended statement of claim (at [235]), which relevantly asserts that “[a] reasonable director of a corporation in Star’s circumstances and who occupied the office held by Mr Bekier and had the same responsibilities … would have, prior to attending the 15 August 2019 Board Meeting, taken all steps necessary to inform themselves (such as by making enquiries of Mr Hawkins, Ms Martin, and/or other members of Star’s management) of any matters relating to Salon 95 and/or Suncity that had occurred subsequent to the May 2018 CEO Report”.
When Mr Bekier gave evidence-in-chief in this proceeding, he was asked when he first received a copy of the HKJC report (see T419.22-24):
MR WILLIAMS: When did you first receive a copy of the [HKJC] report, do you recall?---Would have been in the preparation for the Bell inquiry, so would have been early 2022, late – you know, 2021.
It was against the background of this evidence being adduced in chief, that senior counsel for ASIC sought to cross-examine Mr Bekier on the relevant evidence, being previous representations that Mr Bekier had made on the subject of a discussion with Mr Buchanan during the course of the Bell inquiry.
Of course, the point of departure in any argument concerning discretionary exclusion is the implicit acceptance that the evidence is otherwise relevant and admissible. This is amply demonstrated in the circumstances of this case, given the way in which issue has been joined.
Further, put broadly, s 106 of the EA provides that the credibility rule does not apply to evidence that is relevant to a witness’s credibility and that is adduced in cross-examination of the witness and leave is not required to adduce such evidence if it tends to prove that the witness has, among other things, made a prior inconsistent statement or has knowingly or recklessly made a false representation under an obligation, imposed by or under an Australian law or a law of a foreign country, to tell the truth: see s 106(2) of the EA.
Rulings on evidence obviously need to be dealt with pragmatically during a trial, and in undertaking the first of the three steps, that is, assessing the probative value of the evidence, there is naturally an evaluative process to be undertaken.
To engage in and explain that process at any length would be apt to amount to premature speculation as to the ultimate weight that one would give to the evidence the subject of the proposed discretionary exclusion, but it is safe to proceed on the basis (and Mr Bekier did not really dispute) that the evidence has some probative value. Having said this, Mr Williams SC, who appeared on behalf of Mr Bekier, asserted that the question of the precise date upon which any discussion took place with Mr Buchanan was not of particular importance given the state of the pleadings.
But the date when the discussion took place is in issue and is of some importance contextually. In any event, there is an apparent conflict between the evidence given in chief and the previous representations sought to be the subject of discretionary exclusion (and I will no doubt hear submissions in due course as to the relevance of this apparent conflict in assessing Mr Bekier’s general credibility).
C UNFAIR PREJUDICE
The Australian Law Reform Commission explained in its report Evidence (Interim) (Report 26, 1985) (at 644) that:
By risk of unfair prejudice is meant the danger that the fact-finder may use the evidence to make a decision on an improper, perhaps emotional, basis, ie on a basis logically unconnected with the issues in the case. Thus evidence that appeals to the fact-finder’s sympathies, arouses a sense of horror, provokes an instinct to punish, or triggers other mainsprings of human action may cause the fact-finder to base his decision on something other than the established propositions in the case. Similarly, on hearing the evidence the fact-finder may be satisfied with a lower degree of probability than would otherwise be required.
As I observed in Lehrmann v Network Ten Pty Limited (Expert Evidence) [2023] FCA 1577 (at [36]), it has been said it would be an unusual judge who would admit the possibility of being unfairly prejudiced by evidence: R v BD (1997) 94 A Crim R 131 (at 139 per Hunt CJ at CL); Stephen Odgers, Uniform Evidence Law (3rd ed, LBC Information Services, 1998) (at 443). The “danger” referred to would, of course, have had some greater potential significance in a jury trial.
As Odgers notes in Uniform Evidence Law (19th ed, LawBook Co, 2024) (at EA.135.150), there is authority which, at least in some respects, might be thought conflicting on the question of whether this aspect of s 135 is limited to misuse of the evidence by the tribunal of fact, and it is clear from the survey of the cases (at EA.135.150) that there are a number of cases which stand for the proposition that unfair prejudice may arise from procedural considerations, which extend to a range of procedural considerations (beyond a mere inability to cross-examine).
The particular unfair prejudice called in aid by Mr Bekier was the subject of discussion by Gzell J in ASIC v Macdonald (No 7) [2008] NSWSC 1367. Whether it is properly regarded as procedural or substantive is not really to the point.
In Macdonald (No 7), a witness had volunteered to be interviewed by ASIC and, as a consequence, did not obtain the statutory immunity from the use of his transcript of evidence. A fellow defendant wished to cross-examine him, and an application was made under s 26 of the Evidence Act 1995 (NSW) (NSW EA) to prevent such cross-examination. Reliance was placed on s 135 of the NSW EA based on an assertion of unfairness arising from the fact that the witness only gave his evidence to ASIC on the basis that he had a protection of immunity from the tender of the evidence in civil penalty proceedings against him provided by ASIC, and that “[t]hat immunity should not be lightly thwarted” (at [15] per Gzell J).
His Honour accepted the evidence on the voir dire but ultimately concluded that the evidence that emerged during the voir dire was so “slight” that it was substantially outweighed by the danger the evidence might be unfairly prejudicial.
Reference is also made to the fact that it was “almost a happenstance” that the evidence could be before the Court (arising from the fact that proceeding had been commenced in this Court rather than a State court exercising federal jurisdiction). It was noted that if the present proceeding had been commenced in the Supreme Court of New South Wales, for example, the statutory exclusion under State law would apply and the evidence would not be before the Court.
This submission is correct so far as it goes. As I explained in Herron (at 424 [382]), even though the Supreme Court of New South Wales would be exercising federal jurisdiction, the EA would have no application. Rather the NSW EA would apply, and s 8 of that Act provides that: “[t]his Act does not affect the operation and provisions of any other Act”. This includes s 17(2) of the RC Act. The combined effect of these provisions is that with regard to a matter brought in federal jurisdiction, if a civil or criminal proceeding is brought in a New South Wales court, an answer made, or a document or other thing produced by a witness to or before a Royal Commission will not, except as otherwise provided for in s 17 of the RC Act, be admissible in evidence against that person.
D BALANCING EXERCISE AND EXERCISE OF DISCRETION
As I have noted above, s 135 requires the probative value of the proposed evidence to be weighed against the dangers listed in the provision. What then must be recalled is that the identified danger must substantially outweigh the probative value of the evidence for it to be excluded. Hence, I must be positively persuaded exclusion is justified in the circumstances.
I have already referred to the fact that it would be an unusual judge who would admit the possibility of being unfairly prejudiced by evidence. As I have said elsewhere: “I am confident in my ability, as the trier of fact, to avoid any prejudice and, in the fact-finding process generally, to be able to separate the wheat from the chaff”: see Lehrmann v Network Ten Pty Limited (Expert Evidence) [2023] FCA 1577 (at [36]).
Having said that, Mr Williams SC urges upon me that the unfairness in the present case is an unusual one, because the State Parliament has set out a legislative balance by which people can be compelled to assist an inquiry under a State Act, but in doing so, secure certain protections as a consequence.
Again, this is true, although the Commonwealth Parliament has adopted a different balance conscious that some State provisions as to admissibility have been picked up (see, for example, s 9(3)(b) of the EA which provides that the EA does not affect a law of a State or Territory so far as the law provides for the admissibility of a document to depend on whether stamp duty has been paid: see Dixon v Citiline Developments Pty Ltd [2018] FCA 1446 (per Lee J at [8])).
Despite this, I think I should proceed on the basis that there is a degree of procedural prejudice in all the circumstances, notwithstanding I am confident that I would not misuse the evidence.
In undertaking the required balancing exercise, as noted above, it is necessary for me to have regard to the mandatory factors in s 192 of the EA to the extent they are applicable. Considering s 192(2)(a), the extent to which receipt of the evidence would be likely to add unduly to, or to shorten, the length of the hearing has, of course, little application in the present circumstances. Similarly, s 192(2)(e), which deals with the power of the court to adjourn the hearing or make another order or give a direction in relation to the evidence can relevantly be put to one side.
The real issue is the extent to which it would be unfair to receive the evidence (see s 192(2)(b)), the importance of the evidence (see s 192(2)(c)), and the nature of the proceeding (see s 192(2)(d)). As to this last point, needless to say, this is a case for a civil penalty, and the consequences for all the defendants, if the Court was persuaded to grant the relief sought by ASIC, are serious. This is obviously an important discretionary consideration.
Having regard to all the relevant considerations, however, I do not believe that I should exercise the discretion to exclude the evidence. The evidence, to my mind, despite the contentions of Mr Bekier, does have some real potential importance as to pleaded actions of Mr Bekier and the context in which the alleged contraventions are said to arise. Moreover, the evidence is not just relevant to the question of when Mr Bekier had an important communication with Mr Buchanan, but is also something which, no doubt, will be relied upon by ASIC in final submissions as reflecting adversely upon the general credit of Mr Bekier. I am not seeking by this ruling to forecast whether I would think a submission along those lines would be worthy of acceptance, let alone be of some decisive importance to assessing general credit, but I must proceed on the basis that ASIC will rely on the apparent inconsistency in submissions. In this case, credit issues relating to Mr Bekier could, to some extent, rationally affect the assessment of the probability of the existence of a number of facts in issue.
Evidence that is relevant is admissible save as excluded by the EA or where there is a danger the receipt of that evidence substantially outweighs its prohibitive value. I do not think that this threshold has been met.
Accordingly, I reject the application for discretionary exclusion and will receive the evidence in the trial.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee. Associate:
Dated: 21 March 2025
SCHEDULE OF PARTIES
NSD 1082 of 2022 Defendants
Fourth Defendant:
HARRY JAMES THEODORE
Fifth Defendant:
JOHN ANTHONY O’NEILL AO
Sixth Defendant:
WALLACE RICHARD SHEPPARD
Seventh Defendant:
KATHLEEN LAHEY AM
Eighth Defendant:
GERARD PATRICK BRADLEY AO
Ninth Defendant:
SALLY ANNE MAJELLA PITKIN AO
Tenth Defendant:
BENJAMIN ANDREW HEAP
Eleventh Defendant:
ZLATKO TODORCEVSKI
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