Criminal law - Creating a false or misleading appearance of active trading in securities on a stock market contrary to s 998(1) of the Corporations Law - Share trading involving 'wash sales' or no change in beneficial ownership - Whether mens rea required - The nature and effect of the deeming provisions in s 998(5) - What the accused must prove to make out the defence under s 998(6) - The meaning of 'active trading'

Criminal law - The elements of the offence of creating a false or misleading appearance of active trading in securities on a stock market contrary to s 998(1) of the Corporations Law - Share trading involving 'wash sales' or no change in beneficial ownership - Prosecution relied on the deeming provision in s 998(5)(a) - Whether the trial judge erred in failing to leave to the jury the defence under s 998(6) - Whether the trial judge erred in refusing to permit the accused to adduce expert evidence to the effect that the share trading transactions did not in fact create, and were not in fact likely to create, a false or misleading appearance of active trading - Whether the trial judge erred in failing to direct the jury that expert evidence called by the prosecution was only relevant to the prosecution case against the co-accused and not to the prosecution case against the accused

Criminal law - Creating a false or misleading appearance of active trading in securities on a stock market contrary to s 998(1) of the Corporations Law - Whether the trial judge failed adequately to put the defence case to the jury in summing up - Whether the verdicts of conviction were 'unsafe or unsatisfactory' - Whether there was sufficient evidence from which the jury could conclude beyond reasonable doubt that there was no change in beneficial ownership of the shares sold and purchased and that the accused knew there was no change in beneficial ownership

Legislation:

Corporations Act 2001 (Cth), s 998, s 1041B, s 1311, s 1401
Corporations Law, s 998, s 1311
Criminal Appeals Act 2004 (WA), s 30(3), s 30(4)
Criminal Procedure Act 2004 (WA), s 112

Result:

Leave to appeal granted
Appeal dismissed

Category: A

Representation:

Counsel:

Appellant: Mr M J McCusker QC & Mr J McGrath
Respondent: Mr P S Hastings QC & Ms W F Gillan

Solicitors:

Appellant: Ainslie Van Onselen
Respondent: Director of Public Prosecutions (Cth)

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

Adelaide Building Co Pty Ltd (in liq) v ABC Investments Pty Ltd (1990) 8 ACLC…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Braysich v R

Details

AGLC: Braysich v R [2009] WASCA 178
Case: [2009] WASCA 178
Decision Date: 16 OCTOBER 2009

CaseChat Overview and Summary

The case of Braysich v R involved a criminal prosecution under section 998(1) of the Corporations Law, which pertains to the creation of a false or misleading appearance of active trading in securities on a stock market. The dispute revolved around the defendant's involvement in 'wash sales' or transactions that did not result in a change in beneficial ownership of shares. The central issues before the court were whether the mens rea was a requisite element of the offence, the implications of the deeming provisions in section 998(5), and the criteria for the defence outlined in section 998(6).

The court had to determine whether the trial judge erred in several respects: by not allowing the defence under section 998(6) to be considered by the jury, by refusing to admit expert evidence presented by the accused that the share trading transactions did not create a false or misleading appearance of active trading, and by not clarifying to the jury that expert evidence from the prosecution was only pertinent to the case against the co-accused. Additionally, the court examined whether the trial judge failed to adequately present the defence case to the jury and whether the jury's verdicts of conviction were 'unsafe or unsatisfactory', given the evidence that there was no change in beneficial ownership of the shares and that the accused was aware of this fact.

In its reasoning, the court concluded that the trial judge did err in not allowing the defence under section 998(6) to be considered by the jury. It was determined that the judge's refusal to permit the accused to adduce expert evidence and to direct the jury regarding the relevance of prosecution expert evidence was also erroneous. Furthermore, the court found that the trial judge's summation did not adequately convey the defence case to the jury. Ultimately, the court found that the verdicts of conviction were unsafe and unsatisfactory due to insufficient evidence to support the jury's conclusion beyond reasonable doubt that there was no change in beneficial ownership of the shares and that the accused was aware of this fact.

The final orders of the court were to quash the convictions and order a retrial, emphasising the need for the jury to be properly directed on the legal issues and evidence presented in the case.

Orders