Australian Securities Commission v McLeod - [2000] WASCA 101

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: AUSTRALIAN SECURITIES COMMISSION -v- MacLEOD [2000] WASCA 101

CORAM: IPP J
ANDERSON J
OWEN J

HEARD: 13 DECEMBER 1999

DELIVERED : 13 APRIL 2000

FILE NO/S: SJA 1190 of 1998

BETWEEN: AUSTRALIAN SECURITIES COMMISSION
Appellant
AND
MALCOLM MacLEOD
Respondent

Catchwords:

Corporations - Corporate finance - Statement to Stock Exchange about exploration results - Whether statement materially misleading - Whether statement likely to induce purchase of securities

Procedure - Court and Judges generally - Reasons given to parties in draft before judgment delivered - Error of law in draft reasons pointed out to Magistrate - Magistrate took further submissions and reconsidered issue on correct view of law before delivering judgment - Whether the judgment tainted by ostensible bias

Corporations - Supervision, regulation and correction - Powers of the Australian Securities Commission to institute appeals - Decision in Bond v The Queen considered - Held that ASC did have power to appeal a decision which had set aside a conviction

Legislation:

Australian Securities and Investments Commission Act 1989 (Cth) s 11(4) and s 49(2)

Corporations Law s 765, s 999(a) and s 1311(1)

Justices Act 1902 (WA) s 206A(2)

Result:

Appeal allowed, conviction by Court of Petty Sessions reinstated

Representation:

Counsel:

Appellant: Mr E M Heenan QC & Ms R V C Fogliani
Respondent: Mr W B Harris

Solicitors:

Appellant: Commonwealth Director of Public Prosecutions
Respondent: William B Harris

Case(s) referred to in judgment(s):

Australian Securities and Investments Commission v Hosken [1999] TASC 120
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
Boughey v R (1986) 161 CLR 10
Byrnes v The Queen (1999) 73 ALJR 1292
Davern v Mesel (1984) 155 CLR 21
Flavel v Giorgio (1990) 8 ACLC 608
R v Wright [1980] VR 593
Re JRL, Ex parte CJL (1986) 161 CLR 342
Samuels v Flavel (1970) SASR 256

Case(s) also cited:

Bailey v Marinoff (1971) 125 CLR 529
Biala Pty Ltd v Mallina Holdings Ltd [1989] 2 WAR 381
Bond Corp Holdings Ltd v Grace Bros Holdings Ltd (1983) 9 ACLR 61
Grassby v The Queen (1989) 168 CLR 1
Livesey v New South Wales Bar Association (1983) 151 CLR 288
MacLeod (1999) 32 ACSR 172
Parkdale Custom Built Furniture v Puxu Pty Ltd (1982) 149 CLR 191
Permanent Trustee Co (Canberra) Ltd v Stocks and Holding (Canberra) Pty Ltd (1976) 15 ACTR 45
Pontello v Giannotis (1989) 16 IPR 174
R v Palmer [1981] 1 NSWLR 209
R v Watson; Ex parte Armstrong (1976) 136 CLR 248
Re Polites; Ex parte The Hoyts Corporation Pty Ltd (1991) 173 CLR 78
Simpson (1998) 103 Aust. Crim R 19
Thompson v Mastertouch TV Services Pty Ltd (1977) 15 ALR 487
Vakauta v Kelly (1989) 167 CLR 568
Versteeg v R (1988) 14 ACLR 1
Webb v R (1994) 68 ALJR 582
World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181
Wright Heaton Ltd v PDS Rural Products Pty Ltd & Ors (1982) 7 ACLR 140

IPP J: I agree with the reasons of Owen J and have nothing further to add.
ANDERSON J: I have had the advantage of reading in draft the reasons for judgment of Owen J. I agree that the appeal should be allowed and that the order made by the Commissioner quashing the respondent's conviction in respect to count 2 should be set aside. There is nothing I wish to add.
OWEN J: This is an appeal by leave from the decision of a Commissioner of this Court allowing an appeal by the respondent against the decision of a Magistrate in the Court of Petty Sessions convicting the respondent of an offence against the Corporations Law ("the Law").

Background

The respondent is a geologist. In 1993 a company called Cambridge Gulf Exploration NL ("the Company") was exploring the seabed in the waters of Joseph Bonaparte Gulf in the north‑west of this State with a view to finding diamonds. In April 1993 the respondent was engaged by the Company to prepare independent reports for inclusion in a prospectus that the Company intended to issue with a view to it being listed on the Australian Stock Exchange ("ASX"). The Company was in fact listed in July 1993.
In October 1993 the Company made an announcement to the ASX that a purpose‑built marine alluvial diamond sampling ship, "Lady S", had arrived on location and had commenced bulk sampling. The sampling programme encountered fairly severe difficulties. Nonetheless, in November 1993 the Company announced that gem quality diamonds and precious metals were being recovered. In the time‑honoured fashion of mineral exploration in this country, rumours about the Company's results began to fly about the marketplace. The ASX lodged a query with the Company, which responded by saying that exploration results would be disclosed in the quarterly report for the period ending 31 December 1993. The ASX took no further action and the share price continued to rise. Between 1 December 1993 and 14 December 1993 the share price increased from $0.88 to $2.05. On the latter date the Company, at the insistence of the ASX, sought a voluntary suspension from quotation pending the delivery of a statement concerning the exploration results.

The respondent was asked by the Company to assist it to prepare the report. The respondent was briefed by various of the Company's officers and employees and, on 15 December 1993, he prepared a draft report in longhand. It was then checked and typed before being signed. On 16 December 1993 the Company issued the document, entitled "Exploration Results for [the Company]". I will refer to this document as "the Report". The ASX requisitioned further information, which was provided. On 22 December 1993 the suspension was lifted and the share price continued to rise. It peaked at a high of $4.10 on 24 December 1993.
The Report contained two statements that are relevant to this appeal and which I will set out in full a little later. The first was that in extraction from concentrate taken from selected sample sites six carats of diamonds were recovered at the rate of 0.4 carats to the tonne. The second statement was to the effect that at 0.4 carats for each tonne of ore treated, with the value of diamonds at $US135 per carat, the annual profit would be $US1,374,000,000.
What happened after December 1993 is not essentially relevant for the disposition of the appeal. It is sufficient to say that the exploration programme continued to be beset by problems and the results did not bear out the material contained in the impugned statements.
On 19 January 1998 a complaint was sworn out against the respondent. The complainant is described as "Australian Securities Commission" ("the ASC"). The signature of the person signing the complainant is indecipherable and there is no evidence before the Court as to what position he or she held. The complaint alleges two counts, both of which are said to involve contraventions of s 999 of the Law, read with s 1311(1)(a) of the Law. The two counts are as follows:
"1. That on or about 16 December 1993 at Perth … [the respondent] made a statement contained within [the Report] that was materially misleading and likely to induce the purchase of securities in [the Company] by other persons when he ought reasonably to have known that the statement was materially misleading in that the statement stated that six carats of diamonds were recovered at the rate of [0.4] carats to the tonne but the statement did not take into account the overburden which had to be penetrated and removed in order to recover the diamonds, contrary to s 999 of [the Law] read together with s 1311(1)(a) of [the Law].
2. That on or about 16 December 1993 at Perth … [the respondent] made a statement contained within [the Report] that was materially misleading and likely to induce the purchase of securities in [the Company] by other persons when he ought reasonably to have known that the statement was materially misleading in that the statement contained a representation as to a future matter namely that it predicted an annual profit of [the Company] in the sum of $US1,374,000,000 and there were no reasonable grounds for making that representation, contrary to s 999 of [the Law] read together with s 1311(1)(a) of [the Law]."
The charges were heard in the Court of Petty Sessions in September 1998. The Magistrate reserved his decision. On or just prior to 29 October 1998 the Magistrate had given the parties a draft of the written reasons that he proposed to publish. In the draft written reasons the Magistrate indicated that count 1 had not been established but that he intended to convict the respondent on count 2. When, on 29 October 1998, he entered the courtroom to deliver judgment, counsel advised him that there appeared to be an error of law in one aspect of the reasons. A full description of what occurred is set out in the reasons of the Commissioner at appeal book 14 ‑ 18 and I will not repeat that material. It is sufficient to say that the issue revolved around the meaning of the word "likely" in the statutory provisions. His Worship had found that the word "likely" was to be interpreted as "possible" rather than as "probable" and, in considering count 2, he had assessed the respondent's conduct against that standard in concluding that he was guilty of the offence. Counsel pointed out that the High Court in Boughey v R (1986) 161 CLR 10 at 14 and 20, had interpreted "likely" as "probable", not as "possible". Counsel for the ASC submitted that the case was still sustainable against the respondent on count 2, applying the correct legal test. Over objections from counsel for the respondent the Magistrate decided to reconsider the matter and he reserved again.
On 3 November 1998 the court resumed. The Magistrate gave further oral reasons. He made it clear that he was deciding the matter on the test of probability and concluded that the respondent was guilty on count 2. The respondent was fined $2,500.
The respondent appealed to this Court under s 194 of the Justices Act 1902. The Commissioner upheld the appeal and set aside the conviction on count 2. The present appellant had not appealed or cross‑appealed against the dismissal of count 1.
Before I leave the background I need to add a description of the Report. It consisted of a cover page, a substantive three‑page report, two pages of graphs, a formal consent by the respondent pursuant to ASX Listing Rule 3M (7) and a declaration as to competency and independence. The three‑page report comprised an introduction of about half a page, geological exploration results comprising half a page, a conceptual alluvial mining plan comprising one and a half pages, and a conclusion comprising half a page. The section of the Report devoted to the conceptual alluvial mining plan is referred to throughout the Commissioner's reasons, and in these reasons as the camp. It comprised 50 per cent of the written report.
In the introduction, the respondent outlined that the work done by the Company was the initial phase of scientific evaluation and offshore bulk sampling. He went on to describe the purpose of the work carried out. In a section of the report headed "Geological Exploration Results", he reported that a sample of three tonnes of concentrate was extracted from 15 tonnes of gravel from selected sites. He continued:
"… Six carats of diamonds were recovered at rate of 0.4 carats to the tonne.
These stones are gem quality diamonds and were valued by a Government valuer at an average of $US135 per carat.
It should be noted for comparison purposes, that Argyle produces approximately six carats to the tonne at an average price of some $US10 per carat.
[The Company] has previously stated that it is profitable at 0.1 carat to the tonne at a valuation of $US67 per carat, with a capital cost of $300m.
The overburden continued to assay positive to gold, platinum and palladium at approximately 0.6 grams per tonne of the above combination."
The camp was based mainly on conceptual figures provided by a Mr Jones. The text of the camp is set out in full in the Reasons for decision of the Commissioner and I will not repeat all of it. It commences with this paragraph:
"The marine alluvial diamond industry is a new industry and this formula is provided to give shareholders a better understanding of a mineable resource in relation to marine alluvial diamonds."
It then sets out the assumptions for things such as the percentage plant availability, tonnages to be treated, plant costs, operating costs, carats recovered and value of diamonds. These are the assumptions on which the "formula" proceeds. The projected profit figure is then described in these terms:
"At 0.4 carats recovery for each tonne of ore treated with the value of diamonds at $US135 per carat –
The total income is  $US1,512,000,000
Less yearly operating cost          $US   138,000,000
Profit  $US1,374,000,000."
The camp went on to say that the profit figure did not take into account recovery of metals such as gold, platinum or palladium, assays of which continued to be positive. By using a similar formula, it states a profit from these other sources of $US115,000,000. In his conclusion the respondent said that while the results were encouraging, considerably more evaluation work was necessary. He also said that a further 1,000 drill holes were planned.
The graphs which were attached to the Report were prepared by Jones but adopted by the respondent. The first graph shows operating costs, yield (from 0.1 to 0.5 carats per cubic metre) and value per carat. The graph then serves to show the income that could be produced on various scenarios. The second graph contains similar information but it concerns the metals.

The Appeal to the Commissioner

The appeal by the respondent against the conviction on count 2 was advanced on a number of grounds. The Commissioner upheld three of the grounds and it is necessary only to deal with them and with the reasons in so far as they are relevant to those three grounds.
The complaint refers to s 1311(1)(a) of the Law. It provides that a person who does an act that the person is forbidden to do under the Law is guilty of an offence by virtue of the subsection and is liable to the penalties prescribed in or under it. Nothing turns on that section. The Commissioner set out the text of s 999 and s 765 of the Law as they stood at the time when the offences are alleged to have been committed. Section 765 is relevant because it deals with representations as to a "future matter". Those sections read:
"s 999. A person must not make a statement, or disseminate information, that is false in a material particular or materially misleading and:
(aa)is likely to induce other persons to subscribe for securities; or
(a)is likely to induce the sale or purchase of securities by other persons; or
(b)is likely to have the effect of increasing, reducing, maintaining or stabilising the market price of securities;
if, when the person makes the statement or disseminates the information:
(c)the person does not care whether the statement or information is true or false; or
(d)the person knows or ought reasonably to have known that the statement or information is false in a material particular or materially misleading."
…
"s 765(1)       When a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the person does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.
(2)       For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a person with respect to any future matter, the person shall, unless the person adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.
(3)       Subsection (1) shall be deemed not to limit by implication the meaning of a reference to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead."
The Commissioner also noted that s 765 dealt with "representations" rather than "statements" but said that under the definition in s 9 of the Law the word "statement" would embrace a "representation". No challenge has been mounted against that conclusion.
The Commissioner commented that count 2 concerned a statement attributed to the respondent which was:
(a)attacked as being "materially misleading", rather than contended to be false in a material particular;
(b)invoked s 999(aa) in relation to a suggested likely inducement of "other persons" subscribing for securities;
(c)invoked s 999(d), raising reliance upon the concept of deemed knowledge through the phrase "ought reasonably to have known"; and
(d)insofar as the element of "materially misleading" was concerned, relied upon a characterisation of the statement as being one with respect to a "future matter" on the basis that it "predicted an annual profit for the Company in the sum of US$1,374,000,000.00."
Particular note should be taken of the word "predicted" in the last quote because it is at the heart of the appeal. The reference to the invocation of s 999(aa) seems to be an error. The complaint refers to the "purchase of securities" rather than to a subscription for securities. It therefore relies on s 999(a) rather than s 999(aa). It may not be an error of substance, although the Commissioner later remarked that the decision in R v Wright [1980] VR 593 (to which I will, come shortly) could be distinguished on the basis that it did not involve s 999(aa).
The first ground dealt with by the Commissioner was whether the words identified within the camp amounted to a "prediction" or representation as to a future matter. As to this the Commissioner said:
"The essence of the grievance raised against [the respondent] by count 2 arises from his use of what was unambiguously stated to be a formula (which formula, I reiterate, was not itself impugned as an unreliable, erroneous or misleading) to a figure of 0.4 carats recovery per tonne of ore treated. Again, the end profit result generated, to my mind, results from the arithmetical process through application of the formula.
The [appellant] contends, in effect, that it was irresponsible of [the respondent] to have used the figures he did in the camp in applying the formula in this way, especially by use of a rate of 0.4 carats recovery per tonne. The [appellant's] particular concern is that there is a link between use in this formula of 0.4 carats per tonne, and the earlier statement in the report, which had been the subject of count 1, i.e. "… six carats of diamonds were recovered at rate of 0.4 carats to the tonne".
In effect, it is put by the [appellant] that the amount of sampling that had taken place was so small and so unrepresentative that a suggestion that [the Company] might ever, at any stage in future (presumably even 100 years hence!), achieve a 0.4 carats recovery rate for each tonne of ore treated, was quite irresponsible and misleading. It contends that the premise used in the camp (being 0.4 carats recovery per tonne), when applying the formula was effectively a "prediction" that wholly lacked any reasonable grounds.
To my mind however, there was no prediction. Certainly no time‑frame (even in a loose sense!) can be pointed to at which these statements in the camp may be said to have had some predictive reference. All that occurred in the report, I think, was the application of a formula (not impugned) to different figures on different scenarios leading to different profit results. I do not think that the camp can fairly be read, however loosely, as suggesting that such profit result figures were ever likely to be achieved at any time in the future. That being so, there was fundamentally, I think, no basis to ever require [the respondent] to adduce reasonable grounds to justify a prediction. He was not making any prediction. Nor was he making a representation about any future matter. Once that conclusion is reached, it is plain that the case against him on count 2 must also fail."

The next ground involved a challenge to the Magistrate's finding that the statement was likely to induce the purchase of securities by others. In essence the Commissioner found that the Magistrate had failed to make a "careful causative analysis" of all of the evidence as to the factors existing in the market at the time that would tend towards purchase of securities. Instead the Magistrate had placed almost total emphasis on the evidence of two persons (Mr Newing and Mr Furlong) who had been allowed at trial "to express their subjective 'expert opinions' as to the likely effect of the impugned statements on persons". Furlong had testified that in his view persons would be "encouraged" by the impugned statements to purchase securities. According to the Commissioner the Magistrate had arrived at a strained interpretation of the word "encouraged" as somehow meaning "probable". The Commissioner then examined whether there was other evidence to satisfy this limb of the complaint. He said:
"For reasons which I have articulated, there was, I think, no prediction at all within the camp. There certainly was a reference to, and a following use of a formula, the credibility of which was not impugned. There were also calculations based on two premised factual scenarios applying the formula. There was no prediction of huge profits for any discernible future time period.
Upon this basis, the learned Magistrate’s conclusion that "… it seems to be inescapable that an average shareholder would probably purchase shares as a consequence of the information expressed in the camp …" constitutes, I think, only bare speculation as to likely future human behaviour in relation to a purchase of shares caused by the impugned statement."
This meant, the Commissioner said, that the conviction could be sustained only on the basis of the "opinion evidence" of Newing and Furlong. He proceeded to examine whether opinion evidence was admissible to answer a disputed question of fact under s 999. He examined the authorities (including R v Wright) and decided that the question whether it was likely that persons would purchase shares in the Company as a result of an allegedly misleading statement was only ever a question of fact to be answered by the Magistrate. The non‑expert opinions of stockbrokers and the like as to that issue did not assist his task. The Commissioner concluded that the Magistrate erred in relying on the evidence of Newing and Furlong as he did.
The final ground involved the process by which the Magistrate came to reconsider his decision after it had been pointed out to him that the written reasons which he had distributed proceeded on a wrong appreciation of the law in one critical respect. The Commissioner said that in the first set of written reasons the Magistrate had "expressed firm and concluded views in relation to the outcomes on counts 1 and 2, which included, of course, a conviction on the latter. It was, he said, undesirable as a matter of policy for a judicial officer who has announced, for all practical purposes, a final view, to be drawn into debate about the correctness of the conclusion. In addition, an undesirable potential could emerge for a conscious or unconscious "shoring up" of the initial announced result. The Commissioner said:
"Once concluded views as to a conviction have been expressed (i.e. as to guilt or otherwise), a general perception could arise that reconsideration of the matter may be tainted by a closed mind or a desire to entrench what has become an undermined result, by supplementary reasons. Such concerns may of course be wholly wrong for the particular original arbiter. Nevertheless, natural justice considerations of a more general character in the administration of justice arise. It is trite that justice must be seen to be done, and in my view, the whole process adopted in the present circumstances was unfortunate, and is best avoided in future, on the basis that there is a serious risk of a public perception of a predisposed or closed mind in relation to an end result published in earlier reasons."
This, the Commissioner said, raised issues of ostensible bias. He said that, had it been necessary, he would have allowed the appeal on this ground alone.

Grounds of Appeal to this Court

The contention underlying the first ground of appeal is that there should have been a finding that the statement was materially misleading. Relevantly, it should have been found that:
(a)it was not necessary for there to be a definite time within which the future matter is to occur before it can be characterised as a prediction; and
(b)the statement the subject of count 2 was a prediction.
In the second ground of appeal the appellant says the Magistrate was entitled to come to the conclusion that the statement was likely to induce the purchase of securities by others and that the Magistrate:
(a)had not placed undue emphasis on the non‑expert opinions of Furlong and Newing; and
(b)was entitled to take the opinions of Furlong and Newing into account.
Finally the appellant contends that there was nothing impermissible in the course adopted by the Magistrate in reconsidering his conclusion on count 2 and that it did not satisfy the test for ostensible bias.

Was the Statement Materially Misleading?

The first issue is the predictive nature of the impugned statement. I will come later to the evidence of Furlong and Newing. However, it seems to me that the primary question flows from the document itself. This means that each case will depend on its own facts. In a case such as this it is not sufficient to look at the document in the abstract and theorise what its effect might be. Obviously, it must be viewed in the circumstances which existed at the time. The question is: when the document is examined in the light of those circumstances, would it have been likely to induce members of the public to purchase securities?
Here, the contextual background included a number of factors. The sampling programme using the vessel had been in operation for about one month. It had encountered serious and continuing difficulties. The sample from which the figures were taken was small. Rumours had begun to circulate in the market place. There was some evidence of rumours about "diamonds as big as golf balls". There had been an optimistic market briefing report by the merchant bank County Natwest Securities Australia Ltd. There had been a query by the ASX and a "voluntary" suspension. The Report was prepared reluctantly and hurriedly with a view to having the suspension lifted.
Both the appellant and the respondent relied on the contextual background to support the respective cases. Counsel for the appellant submitted that the respondent should have known that the Report had been commissioned precisely because of the "wild rumours" and in a bid properly to inform the investing public. The County Natwest report had recommended the stock as an excellent speculative buy but that the key would be "the results of the initial testing programme, likely to be released later [in December]". At the time when the Report was released there was a "market eager for news" and there was all the more reason to believe that the results to be included would be predictive of the resources of the entire investigation. In those circumstances, the utmost candour and honesty ought to have characterised statements of the kind made in the Report, which should be seen as analogous to material in a prospectus: Flavel v Giorgio (1990) 8 ACLC 608 at 611. The primary thrust of the respondent's case on appeal was that the Report was "a desperation measure" brought about by the sudden surge in the share price and the bullish nature of the County Netwest publication. The Company knew that it was "early days", being only one month into an 18‑month exploration programme. The Report was prepared as a stop‑gap measure until the quarterly report could be prepared and submitted. They had attempted to include in the Report "a full exposure of everything they had to explain" so as to inform the market why the shares had increased in price. In the end, it may be that the contextual background is equivocal. If so, it will only serve to throw the focus of attention squarely back to the document itself.
In the Introduction to the Report, the respondent says that one of the purposes of the geological work that had been undertaken was to "evaluate technical resources and production requirements". Under the heading "Geological-Exploration Results" there is a reference to the extraction of three tonnes of concentrate from 15 tonnes of gravel. There is also reference to the actual recovery figure from the three‑tonne sample of six carats of diamonds at 0.4 carats to the tonne. There is also reference to the diamonds actually recovered as being of "gem quality" and as having been independently valued at $US135 per carat. It says, further, that, by way of comparison, Argyle produces approximately six carats to the tonne at an average price of some $US10 per carat. The clear inference is that (at least in terms of value) the diamonds were better than those recovered by Argyle, known to be a successful company.
In the section of the Report entitled "Conclusion" several relevant comments are made. It indicates that detailed planning and negotiations for mining equipment to process material at the rate of 4,000 tonnes per hour are advancing. The geophysics conducted by the Company over a period of seven years had been confirmed and had identified 3 billion cubic metres of alluvial material. Importantly, it also says:
"Application for a Production Licence over WA‑1‑MEP has commenced and the company remains optimistic that commercial mining may be possible by the end of 1995."
It is in the context of those statements that the camp must be read. The formula has these features:
(a)a plant operating at 4,000 tonnes per hour, which is the figure in respect of which negotiations to obtain mining equipment are said to have been "advancing";
(b)there is constant reference to annual calculations, for things such as tonnages treated, capital repayments, operating costs, income and profit;
(c)the recovery figure of 0.4 carats per tonne (upon which the profit calculation is based) is the figure disclosed as that having been achieved in fact from the three tonne sample.
It seems to me that when these factors are taken into account, in the context of the remainder of the Report, a clear meaning emerges. I think the ordinary reasonable member of the investing public would take the document to mean that profits of $US1,374,000,000 could be expected when mining operations commenced, and that it was possible that this would be as early as the end of 1995. Looked at in this way, there is a time frame to which the impugned statements can be said to have some the predictive reference. On this point I respectfully disagree with the Commissioner. The gravamen of his reasoning on this point is summarised in the sentence: "All that occurred in the report … was the application of a formula (not impugned) to different figures of different scenarios leading to different profit results". I take a different view. But the formula does not stand alone. It must be seen in the light of the three features of the camp that I have outlined above. The comparison with Argyle cannot be ignored. The references to mining equipment, the application for a production licence, the vast size of the reserves of alluvial material and the possibility of commercial mining by the end of 1995 all reflect on its meaning.
Certainly, the word "conceptual" and the qualifying comment at the commencement of the section headed "Conclusions" must also be taken into account. But I do not think they are sufficient to displace the primary meaning that comes from the remainder of the document. It does, in my view, have a predictive faculty and to that extent ought properly to be characterised as a representation of a future matter.
There was a considerable body of evidence, which the Magistrate accepted, that the statement was in fact misleading. Without examining the evidence in detail, I mention the evidence of Mr Garlick (appeal book at 427 ‑ 433), Mr Newing (appeal book at 376 ‑ 379) and Mr Furlong (appeal book at 475 ‑ 476, 479).
It seems to me that the impugned statement was misleading because it would have a tendency to convey a meaning inconsistent with the true state of affairs in two respects. First, that the Company was then in a position to advise members of the investing public of results on which they could rely. Secondly, that the Company could achieve significant profits from its projected mining operations. As to the first of these points, the evidence was that the sample was not of sufficient size from which to assess whether diamonds were present in commercial quantities: for example, Newing at appeal book 377. It would have been necessary to take samples from hundreds of additional sites and to extract material from thousands of tonnes of gravel in order to assess the average grade distribution of the deposit: see Graindorge at appeal book 358. As the dollar figure in the profit estimate is extrapolated from the grades extracted from the small sample, the second meaning referred to above arises as a direct result of the reported figures. In that respect, Graindorge also testified that the results obtained from the sampling programme were not sufficient to enable the Company to determine whether it was profitable to mine the area: appeal book 366.
The impugned statement was material because its natural and probable result would be to induce the reader to act in the belief that the Company had a basis for making a prediction of the profitability of the venture and that profits would arise from the mining venture. It seems to me, therefore, that the impugned statement was "materially misleading".
I would therefore uphold ground 1(1)(b). Whether, in all cases, a future matter needs to reflect a time within which it will occur before it can be said to be a "prediction", as contended for in ground 1(1)(a), is not something that I need now to answer.
The issue whether the respondent knew or ought reasonably to have known that the statement was materially misleading was not dealt with by the Commissioner because of his conclusion on the threshold question. The test, at least where it concerns the concept that a person "ought to have known" something, is objective. In that respect several factors need to be taken into account. One is the small size of the sample. Another is the early stage of the exploration programme. A third factor is that marine alluvial diamond mining was a new concept for Australia. It also seems to be the case that extraction statistics were 20 times that being achieved by the only other significant marine alluvial diamond mining operation in the world, namely Namibia: see appeal book at 429. One factor upon which the Magistrate placed particular emphasis was the respondent's unexplained failure to consult a Mr Graindorge before finalising the report. Graindorge was a consultant geologist who, in the last quarter of 1993, was contracted by the Company to supervise the sampling on board the exploration vessel "Lady S". By 14 December 1993 he had delivered to the Company a draft report detailing the problems with the sampling programme. The Magistrate found that in the preparation of the Report the respondent lacked independence and objectivity: see appeal book at 203 ‑ 204.
I think the Magistrate's finding that the respondent knew or ought to have known that the statement was materially misleading should stand.

Was the Statement Likely to Induce Purchases of Securities?

It is trite to say that an offence would be committed under s 999(a) only if, in addition to the statement being materially misleading and the other necessary elements being present, the statement was "likely to induce the sale or purchase of securities by other persons".
In Boughey v R the court was dealing with the phrase "likely to cause death" in s 157 of the Criminal Code 1924 (Tas). At 14, Gibbs CJ said that the word "likely" means "probable" and not "possible". At 21 Mason, Wilson and Deane JJ said the word "likely" was used in "its natural and ordinary meaning, namely to convey the notion of a substantial ‑ a 'real and not remote' ‑ chance regardless of whether it was more or less than 50 percent". Both parties have accepted, in my view correctly, that the word "likely" in s 999(a) means "probable" rather than "possible". Indeed, that is the meaning employed by the Magistrate when he announced his final decision on 3 November 1998 and it is the meaning adopted by the Commissioner in his decision.
In this case, then, the appellant was required to establish that members of the investing public would probably purchase shares as a consequence of the impugned statement. It could not do so by adducing evidence from a person who had actually been induced to make a purchase because, at that time, the Company's quotation on ASX had been suspended. One of the witnesses referred to the possibility of off‑market trading but there was no evidence of any on or off‑market share trading at the time of suspension. In any event there may be a question (which it is not necessary to decide) whether evidence of that nature would have been admissible at all.
The first question is whether opinion evidence is admissible on the issue of likelihood. In R v Wright the court had to consider a section of the Securities Industry Act 1975 that prohibited dissemination of misleading information likely to have the effect of raising or lowering the market price of securities. It is akin to s 999(b) of the Law. Young CJ pointed out, at 596, that there is a distinction between "opinion evidence " and "expert evidence". Not all opinion evidence is expert evidence, properly so called. This is a distinction that has carried through into the Commissioner's reasons and to the grounds of appeal, referring, as they do, to the reception of "non‑expert opinions". Young CJ, at 596, described the circumstances in which opinion evidence of this type could be received:
"Such evidence may be received whenever it is practically impossible to separate the inferences which the witness draws from the observed facts from which the inferences are drawn. This proposition is not intended necessarily to cover the only cases in which non-expert opinion evidence is admissible but it is sufficient for present purposes."
Another member of the Court, Kaye J, expressed the principle in this way, at 606 ‑ 607:
"In determining whether opinion evidence is permitted in any particular case, it is necessary to consider the matters required to be proved and the relevance of the opinion to those matters. Such evidence is allowed if [the trier of fact], because of its lack of knowledge, would be unlikely to be capable of deciding the matters without evidence of those skilled or experienced in the same".
In Wright, the evidence to which objection was taken was led from a stockbroker and a merchant banker as to the impact on market price behaviours of buyers and sellers. The court held that the evidence was admissible. Young CJ, at 597, opined that the evidence was not to be regarded as within the common knowledge of the ordinary jury and that, in the absence of the opinion evidence, it would have been necessary for large amounts of other evidence to be led on matters relating to movements in the share market. Kaye J, at 607 ‑ 608, said that without these witnesses the jury would be required to make its own assessment of how persons within a limited section of the community would be likely to react on becoming aware of the information contained in the letter. To do so without any assistance, the jury might have been tempted to speculate or, possibly, to have been influenced by the experience of one or more among their number. There are a several things to be said about these comments. First, I do not think it is material that Wright involved a jury. The principle applies whether the trier of fact is a jury or a judicial officer sitting alone. Secondly, the central issue is whether the subject matter of the evidence is within or without the common knowledge of the trier of fact. Thirdly, I do not read anything said by Kaye J as offending the principle that the trier of fact must reach his, her or its own conclusion on the ultimate issue.

Kaye J expressed his conclusion in these terms, at 609:
"In my view, the evidence of persons experienced in the affairs of the stock market and the likely behaviour of investors consequent on the knowledge of the contents of a letter to the Stock Exchange was admissible in proof of the third element [namely, that the information was likely to have the effect of raising the market price of the shares]".
The Commissioner distinguished Wright on the grounds that the statutory provision there under consideration was akin to s 999(b) rather than s 999(aa). I have already mentioned that the correct subparagraph is s 999(a) but I do not think that this, in itself, is significant. For these purposes there is no relevant difference between a decision to subscribe for shares and a decision to purchase shares. However, I think that what the Commissioner had in mind was a distinction between something that would, on the one hand, induce the purchase of shares, and, on the other, have the effect of increasing the share price. As a matter of principle I am not sure that this is so. The price of a share is not something that exists in a vacuum. In the case of listed companies it is a consequence of many things: asset backing, price‑to‑earnings ratios, dividend and capital growth potential, and less tangible notions such as sentiment, speculation and so on. But in the end it all depends on the presence in the market of buyers and sellers. Leaving to one side unlawful practices such as market rigging and the like, share price is governed by, and is sensitive to, supply and demand in a rational market. Supply and demand inevitably and necessarily involves the existence of buyers and sellers and their respective behaviours and activities.
This explains, I think, the reference by Kaye J in the dicta that I have set out to "the likely behaviour of investors". The Commissioner said that in making that comment Kaye J went further than Young CJ had done and that as the third member of the court agreed with the latter, the ratio of the decision should be read down. But Young CJ was clearly cognisant of the realities of the market: see 597. If, as I think it should, Kaye J's comment is to be understood against the background of principle to which I have referred, there is no relevant distinction.
In the course of holding that the evidence was admissible, the court in Wright also rejected an argument that the evidence was inadmissible because it offended the "ultimate question" principle. Young CJ acknowledged the dicta of Bray CJ in Samuels v Flavel (1970) SASR 256 at 261 ‑ 262 to the effect that a witness, particularly an expert witness, should only be allowed to give evidence in terms of the ultimate issue to be decided by the court where it was absolutely necessary to do so. However, Young CJ said, at 598:
"In the last resort the justification for its reception must lie in the nature of the issue, an issue created by the statute and although the Court must always be astute to ensure that evidence on an ultimate issue is not received unless it is necessary to do so, it is my opinion that it was necessary in this case."
Kaye J made similar comments at 609. I do not think there is anything exceptional in these statements. It seems to me that the real question to be decided in this appeal is not so much whether the evidence was inadmissible as offending the "ultimate question" principle but rather whether the Magistrate complied with the clear obligation on the trier of fact to reach his own conclusion on the issue to which the evidence was relevant.
I think the considerations that militated in favour of admissibility in Wright apply here with equal force. The Magistrate was confronted by a document that was in the public arena. Each case will depend on its own circumstances. A trier of fact may well decide that he or she can determine the issue without the need to take evidence on the topic. But this does not mean that a trier of fact is confined to the four corners of the document and nothing else in assessing what the effect of the impugned statements was likely to be. In my view non‑expert evidence was admissible to assist the trier of fact in deciding whether members of the investing public would be likely to purchase shares as a consequence of the impugned statement. I think ground 1(ii)(b) has been made out.
This leaves the question that is the subject of ground 1(ii)(a), namely whether the Magistrate placed undue emphasis on the non‑expert evidence. It will be necessary to look in some detail at the evidence that was led on this issue.
A Mr Thomas, who was a director of County Natwest, testified that although he could not put himself in the position of "the average shareholder", a person with his background as an experienced institutional professional investor would have regarded the Report as "encouraging".
Mr Newing testified that an average investor could easily have misunderstood the announcement by not realising that the sample size was too small to assess whether diamonds were present in commercial quantities. Having misunderstood the announcement, the investor might have bought shares. He thought the camp "would certainly open the eyes to the potential of a commercial diamond project, depending on the grade and the value of the diamonds". They would "certainly be very encouraged" and would be "encouraged about the potential for the shares" and, as a result, might buy the shares. He said that the problem with the camp was that it could very easily be misquoted out of context. He also said that the results in the Report were not representative of the deposit. They were representative of the sample but the sample was so small it could not be representative of the deposit.
Mr Furlong had been a research analyst, specialising in Australian mining companies with broking houses. In 1993 and 1994 he had been the company secretary of the Company. He thought the camp was premature given the stage of the exploration programme and the amount of the work that had been done. He thought that an investor who was reasonably knowledgeable would largely disregard the Report but it was difficult to say at what point an investor reached the threshold of understanding. An investor who had no, or only a rudimentary, understanding of mining exploration "might be severely encouraged by [the Report]". He said: "… anything that's projecting a profit of $1.4 billion … if he didn't understand the fact that it was very early days in the exploration programme, that only a very limited amount of work had been done, that investor might believe that this company share price was going to be … or that this company might be worth a lot of money based on these numbers".
In his written reasons the Magistrate focused on the word "might" used from time to time by Newing and Furlong. He interpreted the word "might" as being synonymous with "possible" for relevant purposes. In what was clearly an error he thought evidence of a "possibility" was sufficient to establish the third element of the offence, namely that the statement was likely to induce the purchase of shares. In his oral reasons delivered on 3 November 1993 he corrected the error. The Magistrate said:
"In considering the evidence as to ascertain whether the higher standard is met, it is clear that each of Mr Newing and Mr Furlong expressed the view that average shareholders would be encouraged by the camp. 'Encouraged' means sufficiently confident or bold as to do a specified action. In the context of the evidence before me, it is clear that each of Mr Newing and Mr Furlong were referring to the fact that the camp was such as to make the average shareholder sufficiently confident to buy shares."
His Worship proceeded to describe some of the testimony of Newing and Furlong to which I have referred. He then continued:
"I accept the opinion evidence of both Mr Furlong and Mr Newing and take it into account in each instance in arriving at my own conclusion with respect to this particular element.
People in the sharemarket seek to make profits and are motivated by the same. If someone was going to buy shares, would they buy it because of the information in the camp? Is it probable that they would be buying because of the written material in the form of the camp in the market place? Clearly the camp predicted huge profits and was the latest information available to the market. It was the latest information and was very encouraging – indeed, unduly so.
When that is considered in the light of the whole of the evidence it seems to be inescapable that an average shareholder would probably purchase shares as a consequence of the information expressed in the camp which was materially misleading. The third element is proved beyond reasonable doubt, even applying the higher standard previously not considered."
It seems to me that if, as I have decided, the Magistrate was entitled to have regard to the evidence of Newing and Furlong there is nothing objectionable in the way that he undertook the analysis of their testimony. He was driven to focus, in the oral reasons, on their evidence because he had previously relied on the use by them of the word "might". But in the oral reasons he goes much further than the evidence of Newing and Furlong. In the last two paragraphs that I have set out he proceeds to analyse the statement in the camp with reference to the concept of "the market" and in the light of the "whole of the evidence". In my view the Magistrate did not place undue emphasis on the evidence of Newing and Furlong. I also think that he used the testimony in an appropriate way to assist him to come, as was his duty, to his own conclusion of fact in relation to this issue. That, it seems to me, is the proper way to read the oral reasons delivered on 3 November 1998. That the Magistrate appreciated the duty to reach his own conclusion is also made clear in an exchange he had with counsel for the appellant on 30 October 1998 (appeal book at 229), about which I will say more shortly.
I would uphold ground 1(ii)(a).

Ostensible Bias

It remains to decide whether the Magistrate was entitled to reconsider his decision to convict after the error in relation to the word "likely" had been pointed out to him.
In my view the Commissioner correctly appreciated the context in which this issue fell to be decided. It is whether the entire process is tainted by a reasonable apprehension of bias.
The nature of the "reasonable apprehension" test is not in dispute. The principle was explained by Mason J in Re JRL, Ex parte CJL (1986) 161 CLR 342 at 351-352 as follows:
"... a judge should disqualify himself from hearing, or continuing to hear, the matter if the parties or the public entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the issues: Reg v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 258 ‑ 263; Livesey v NSW Bar Association (1983) 151 CLR 288 at 293 ‑ 294. This principle, which has evolved from the fundamental rule of natural justice that a judicial officer should be free from bias, reflects a concern with the need to maintain public confidence in the administration of justice. This concern is expressed in the cognate principle that, not only must justice be done, it must be seen to be done".
It is common ground that at the time when he opted to reconsider the matter, the Magistrate was not functus officio. He had not entered a conviction or an acquittal and had not proceeded to entertain submissions on, or pronounce, sentence on a count in respect of which there had been a conviction. In fact he had done nothing in open court before counsel raised with him their concerns about the Boughey issue. I agree with the Commissioner when he said that this issue ought to be determined as a question of substance rather than form. For that reason I do not think this issue falls to be decided according to whether the Court has an inherent jurisdiction to correct errors in judgments or orders, before or after pronouncement or extraction. Nor is reference to the slip rule of any assistance. It is a question of what actually happened on and following 29 October 1998.
I do not think that the written reasons had any formal status at the time they were delivered. The Commissioner pointed out that they did not carry any notation such as "draft" or "preliminary" but I do not think that is significant. In fact, I do not think they had any formal status until 3 November 1993 when the Magistrate concluded of his oral reasons by saying they were supplementary to and would "stand together with the written reasons that [he had] made available to counsel on [29 October 1998]."
It is necessary to focus on what actually happened on 29 October 1998 and following. It is described in detail by the Commissioner at appeal book 15 ‑ 17 and I will not repeat it. I think it is sufficient to say that the Magistrate clearly and unequivocally acknowledged the error he had made. He also acknowledged that he had considered the evidence on the "lower standard" and that he had not gone further and said whether the higher standard had been met. He provided the parties with the opportunity to make submissions as to whether the evidence, as it stood, would enable the higher standard to be met.
On the following day the parties returned to complete the matter. Counsel for the respondent repeated the submission, which he had made the previous day, that there was "an end to the matter" and that there was no alternative but to acquit and that to re‑open it would be unconscionable. Counsel for the present appellant took a different view and handed up written submissions in support of the proposition that the matter could be revisited. Counsel for the respondent repeated the proposition that "no conviction could be sustained in these circumstances". The Magistrate decided that he would reconsider the issue. Counsel for the appellant then spoke to some written submissions which she contended showed that the complaint could be sustained according to the higher standard. Counsel for the respondent made submissions advocating the contrary view. He also repeated his contention that the written reasons should stand. The Magistrate took time for consideration and, to resort to the vernacular, the rest is history.
The question is: in the circumstances here described, would fair‑minded people reasonably apprehend or suspect that the Magistrate had prejudged or might prejudge the case? I think the Commissioner was correct when he referred to the undesirability of a conscious or subconscious shoring up of initial reasons. But it is a question to be determined in the circumstances of the particular case. Much will depend on the precise issue the subject of the erroneous pronouncement and on the type of proceedings in which it arose. If for example, the issue revolved around findings of credibility it would be rather more difficult for there to be a proper revisitation. But if, as here, it is a matter of interpretation and of the application of a legal standard to facts (and inferences drawn from them) without the need to resort to credibility assessments, the position may be different.
The Commissioner felt that in the circumstances of this case, the Magistrate should have proceeded to enter a conviction, leaving the inevitable result to be an appeal and re‑hearing. I am mindful of the fact that this is a criminal matter and that the consequences for the respondent, indeed for any person facing criminal charges, are extremely serious. An accused person is entitled to a trial that is both fair and conducted according to law. A trial that is tainted by ostensible bias is neither fair nor conducted according to law. What happened here is clearly expedient but that does not necessarily make it correct. Sometimes the law must follow a laborious, even tortured, path so as to ensure that the goals of the criminal justice system are met. However, in this case I think that no prejudice has been wrought by the procedure that was followed. The Magistrate was candid and careful in the way that he acted after being apprised of the error. The parties were afforded ample opportunity to address the issue. They did so, although on the part of the respondent, reluctantly.
In my view a fair‑minded observer who was cognisant of the facts would not reasonably apprehend or suspect that the Magistrate had prejudged or might prejudge the case. I am not convinced that there is any other head of ostensible bias that would require this Court to intervene. In my view, ground 1(iii) has also been made out.

The Competency of the Appeal

A question of the competency of the appeal has arisen. I need to explain the background.
The appellant is a body corporate established under the Australian Securities and Investments Commission Act 1989 (Cth). It is a Commonwealth authority within the meaning of the Commonwealth Authorities and Companies Act 1997 (Cth). Although the appellant has its own "in‑house" legal counsel, I think it can be assumed that it utilised the office of the Commonwealth Director of Public Prosecutions ("CDPP") in relation to this matter. Certainly, the notice of appeal that was before the court was signed by "Ian Russell Bermingham for and on behalf of the [CDPP]".
The Magistrate's decision was delivered on 3 November 1998. On 30 November 1998 the respondent obtained leave to appeal to a single Judge under s 184 of the Justices Act 1902 (WA). On 31 May 1999 the Commissioner handed down his decision in which he allowed the respondent's appeal. On 16 August 1999 this Court (differently constituted) granted leave to the present appellant to appeal to the Full Court under s 206A of the Justices Act 1902 (WA). On 12 August 1999 the High Court handed down its decision in Byrnes v The Queen (1999) 73 ALJR 1292. That decision (which I will deal with in more detail shortly) raised questions about the competency of appeals against sentence brought by the CDPP in prosecutions under the Law. Byrnes was not cited to the Full Court that dealt with the application for leave to appeal and nor was the question of competency of the appeal raised in any other form.
This appeal was argued on 13 December 1999. At that time the competency of the appeal was not in issue. Senior counsel for the appellant mentioned Byrnes in opening but only to say that it was distinguishable and that, in any event, competency was not in issue. Counsel for the respondent did not raise the issue of competency in any way and did not mention Byrnes. At the conclusion of the hearing the Court reserved its decision. On 9 March 2000 the High Court handed down the decision in Bond v The Queen [2000] HCA 13. Bond again raised questions as to the competency of appeals against sentence effectively brought by the CDPP in prosecutions under the Law.
This Court then invited the parties to lodge written submissions as to "whether anything said in Bond requires the issue of competency of the appeal to be examined more closely". Both parties accepted the invitation. The respondent has now challenged the competency of the appeal. The appellant has maintained the position announced at the hearing, namely that the appeal is regular. It is against this background that the issue of competency falls to be determined.
In Byrnes the Court held that the South Australian equivalent to s 91 of the Corporations (Western Australia) Act 1990 defined the scope of the "enforcement powers" which the CDPP could exercise under the co‑operative and national corporations scheme laws. While the section authorised CDPP to institute and carry on a prosecution of an offence it did not include the power to institute an appeal against sentence. The ratio seems to arise from the judgment of Gaudron, McHugh, Gummow and Callinan JJ at 1303, where their Honours construed s 91(5) (which does not contain a specific manifestation of an intention to include appeals within the scope of the enforcement powers of CDPP) against:
"…the underlying principle that a convicted person should not be deprived of the liberty left after sentencing at first instance except by procedures which have been expressly authorised and strictly complied with in a court of competent jurisdiction."

In terms of chronology the next decision is Australian Securities and Investments Commission v Hosken [1999] TASC 120, which was delivered on 10 November 1999. However, before I deal with that decision it will be convenient to consider Bond.
The appellant in Bond had been convicted on indictment of offences under the predecessor to the Law. He was convicted and sentenced. The CDPP appealed to the Court of Criminal Appeal against sentence. The appeal was successful. The High Court ruled that the appeal was not competent.
In para 15 the court noted that a State by its law cannot unilaterally vest functions under that law in officers of the Commonwealth, whose offices are created by Commonwealth law and who have the powers vested in them by that law. If a law of the Commonwealth prescribes the power and authority of an officer of the Commonwealth to perform some function conferred by State legislation, a State law which purports to grant some wider power or authority to that officer is, to that extent, inconsistent with the Commonwealth law and invalid under s 109 of the Constitution. Both the indictment and the notice of appeal had been signed by an officer of the Commonwealth. This raised a number of questions. Was there authority for officers of the Commonwealth to decide to institute an appeal against sentence? Did State law permit that? Did Commonwealth law permit that?
The court dealt first with State law. In para 18 and para 19 the Court said that there was no relevant distinction between s 91 of the Corporations (South Australia) Act 1990 and s 91 of the Corporations (Western Australia) Act 1990. Accordingly, the decision in Byrnes would apply. Nothing in s 91 authorised CDPP to instigate an appeal against sentence. However, s 688(2)(d) of the Criminal Code 1913 (WA) provided for an appeal "on the part of the prosecution" against sentence. It seems to have been assumed, for the purposes of the appeal, that the term "the prosecution" was broad enough to cover any person who might have signed and presented an indictment under s 578 of the Code. This would include a staff member of the office of CDPP. Thus there was some authority in State law for the course of action that had been taken.
The court then turned to consider what Commonwealth law provided. Their Honours noted that s 17 of the Director of Public Prosecutions Act 1983(Cth) was restricted to the institution and carrying on, in accordance with the terms of an appointment to prosecute offences against the laws of a State, prosecutions for such offences. There was a separate provision, s 9(7) dealing with appeals but it was specifically restricted to prosecutions for offences against the law of the Commonwealth. Noting that "commencement of prosecutions and commencement of appeals are distinct steps" (para 24) the court held (para 26) that s 17 did not authorise CDPP to institute appeals. The Court went on, in para 27 and para 29 to explain why this was so. In essence, it was because of the "exceptional nature of prosecution appeals" and the double jeopardy principle. In other words it was reasoning that closely mirrored the reasoning in Byrnes.
There were some other grounds advanced by the respondent to support the contention of competency but they were also rejected and there is no need to examine them here. In the end, the court found that there was no Commonwealth law authorising officers of CDPP to institute appeals and even if there was a State law to that effect (namely, s 578 and s 688 of the Criminal Code 1913 (WA)) the latter would fall foul of s 109 of the Constitution.
In summary, it seems to me that Bond proceeds on the same underlying principle as Byrnes and simply applies the reasoning to other statutory provisions but with the same ultimate result.
I now return to consider Hosken. Both Byrnes and Bond concerned prosecutions on indictment and appeals against sentence. Hosken is almost identical to this case. It involved summary offences and an appeal seeking to reinstate a conviction that had been obtained at first instance. ASIC had launched a successful prosecution against a director in the Court of Petty Sessions for breaches of s 229(4) of the Companies (Tasmania) Code. The director appealed, successfully, to a single Judge of the Supreme Court and the convictions and penalty were set aside. Section 123 of the Justices Act 1959 (Tas) provides: "If a party to … an appeal, … is dissatisfied with a rule or order of the Supreme Court … he may … appeal from that rule or order to the Full Court". That is what ASIC did. The director moved the Full Court for an order that ASIC was not competent to bring the appeal, relying on Byrnes. The court unanimously rejected the challenge to the competency of the appeal.
Cox CJ, at para 4, summarised the reasoning in Byrnes and said:
"The circumstances of the present appeal are quite different from those in Byrnes' case and are more akin to those in Davern v Mesel (1984) 155 CLR 21 where Gibbs CJ said, at 33:
'We are now concerned with the case of an appeal brought from a decision given on an appeal from a conviction. The question is whether, in such a case, the general words of the statute permitting the second appeal should not be understood to confer on the ultimate appellate court power to correct a patent error of law which has been committed by the first court of appeal. I can see no reason in principle or authority why in such a case the general provisions of the statute should be given a restricted meaning.' "
Wright J also relied heavily on Davern v Mesel (1984) 155 CLR 21. He, too, described the reasoning in Byrnes and said, at para 12 and para 13:
"In my opinion, the present case is comparable to Davern v Messel. The respondent instituted the appellate process and sought to set aside his convictions and penalties. The double jeopardy principle cannot apply in his favour and consequently, the rule of construction which presumes that a prosecutor cannot appeal unless expressly authorised by statute, and which applies with the strict consequences seen in Byrnes, appears to me to be inapplicable. Without the presumptions inherent in this rule of construction, constituting as they do a heavy shackle upon the Court's interpretative capacity, I find little or no justification for restricting the Commission's capacity to appeal in the circumstances which exist in the present case. My conclusion in this respect is fortified by reference to the Australian Securities and Investment Commission Act (ASIC Act), s 11(4) which provides:
'The Commission has power to do whatever is necessary for or in connection with or reasonably incidental to the performance of its functions.'
The Commission has express statutory power to investigate and prosecute relevant contraventions of the law (see ASIC Act, s 49(2)). Surely it must be 'incidental' to such powers to take reasonable steps to sustain the outcome of a successful prosecution? The High Court in Byrnes' case considered the provisions of the Director of Public Prosecutions Act 1991 (SA), s 7, which contained a not‑dissimilar phrase. The High Court's consideration of the section, however, was from the standpoint of the power conferred by s 7(g) which provided the Director of Public Prosecutions with power 'to exercise appellate rights arising from proceedings of the kind referred to above', rather than giving a restrictive interpretation to s 7(i) which gave the Director of Public Prosecutions power 'to do anything incidental to the foregoing". It therefore seems to me that the respondent's argument can derive no support from anything said by the High Court in respect of the scope of the 'incidental' power in Byrnes."
The third member of the court was Evans J. He followed a similar line of reasoning. Having set out at some length various passages from the judgments in Davern, Evans J said, at para 29:
" It is apparent from the above that the rule of construction that a power to appeal should be expressed in clear language has little force when considering a power to appeal against a summary decision or a power to appeal a decision on an appeal from a conviction. The rule applied with full force in the circumstances dealt with in Byrnes v R. That being so, in my respectful view, the conclusions reached by the members of the High Court in that case provide no real assistance in the different circumstances being considered by this Court. The power of appeal under challenge before this Court is a power to appeal from a decision reached on an appeal against a conviction in a court of summary jurisdiction. The rule of construction has minimal, if any, relevance to a determination of whether such a power of appeal exists. The rule does not apply so as to deny the words used in the ASIC Act ss 49(2) and 11(4) their full scope and meaning. Those provisions empower the Commission to institute and carry on a prosecution and do whatever is necessary for or in connection with, or reasonably incidental to, the prosecution. In my opinion that power includes power to appeal in the circumstances before this Court. I would reject the respondent's submission that the appeal is incompetent."
It is, I think, noteworthy that in Bond the Court made no reference to Davern. Nor, so far as I can see, was it referred to in Byrnes, except in passing (and with apparent approval) at 1303. This tends to reinforce the view that there are clear points of distinction between the situation in Byrnes and Bond, on the one hand, and Hosken and this case on the other. I also believe that the focus of attention should be on the powers of the appellant rather than those of the CDPP. This is so even though it was a staff member of the CDPP who signed the notice of appeal. I say this because some of the problems, certainly in Bond, arose because of the term "prosecution". It was a charge brought on indictment in the name of the Crown. The indictment contained charges against both State and Commonwealth law. Here the situation is different. The party is a body corporate, albeit one that is a Commonwealth authority. It may have acted through the CDPP but I think the agency concerned is the one that needs to demonstrate the existence of the requisite power.
The powers of ASIC in s 49(2) and s 11(4) of its Act apply equally to the situation in Hosken and in this case. In terms of a State law conferring power on a Commonwealth officer (or instrumentality) there is no relevant distinction between the Tasmanian provision (s 123 of the Justices Act 1959 (Tas), which provides that a party to an appeal to a single Judge may appeal to the Full Court) and s 206A(2)(a) of the Justices Act 1902 (WA). With this in mind, it is necessary to pay heed to the words of the High Court in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492:
"…uniformity of decision in the interpretation of uniform national legislation such as the Law is a sufficiently important consideration to require that an intermediate appellate court … should not depart from an interpretation placed on such legislation by another Australian intermediate appellate court unless convinced that the interpretation is plainly wrong."
By a combination of Corporations Act (Cth) s 82 and the Corporations (Western Australia) Act 1990 s 7 the Law applies as a law of this State. The Corporations (Western Australia) Act 1990 s 58(1) applies certain of the provisions of the Australian Securities and Investments Commission Act 1989(Cth) (including s 49 but excluding s 11) as part of the law of this State. The Corporations (Western Australia) Act 1990 s 56(1) provides that the laws of this State with respect to the "criminal procedure in this State apply to persons charged with offences under the Law. Section 56(4)(d) defines "criminal procedure" to include the "hearing an determination of appeals". Section 55(1) confers on the courts of this State jurisdiction to hear and determine appeals from a summary conviction of persons charged with offences against the Law. This brings into play the provisions of the Justices Act 1902 (WA), relevantly, s 206A.
Under the Australian Securities and Investments Commission Act 1989(Cth) s 11(7) the appellant has any functions and powers that are expressed to be conferred on it by a national scheme law of another jurisdiction. This includes a power or function conferred by s 49(2) which operates, as I have already said, as a law of this State. The incidental power in s 11(4) has already been mentioned.
In the face of the legislative scheme I am not convinced that Hoskens is "plainly wrong" in its interpretation of the relevant provisions, especially in so far as it indicates that the double jeopardy principle does not govern the issue of construction to the same extent that it did in Byrnes. This being so I would be reluctant to come to a different conclusion. I would, of course, have been bound to do so had I come to the conclusion that Hoskens had misinterpreted or misapplied Byrnes or that the Court in Bond had taken matters further, to the extent of impliedly overruling Hoskens. I do not think the Court in Bond has done so.
In my view the present appeal is competent.

Conclusion

I would allow the appeal and set aside the order made by the Commissioner. The effect of this is that the conviction of the respondent on count 2 will be restored. The dismissal of the complaint, in so far as it relates to count 1, will stand. The costs order made by the Magistrate should also be reinstated.