Brynes v The Queen

[1994] HCATrans 413

JRB lC

IN THE HIGH COURT OF AUSTRALIA	1
2
ADELAIDE	3 4
CORAM: BRENNAN, DEANE & DAWSON JJ	5 6
NO. AJ.7/94	7
8 9

10 11 12

MARTIN FRANCIS BYRNES - APPLICANT	13 14
V	15 16
THE QUEEN - RESPONDENT	17 18 19 20 21
22 23 24
25
TRANSCRIPT OF PROCEEDINGS	26 27
THURSDAY, 25 AUGUST 1994 AT 12.20 P.M.	28
29 30 31 32
33
MR S.W. TILMOUTH QC, WITH HIM MS M.A. PERRY, FOR APPLICANT	34
MR M.S. WEINBERG QC, WITH HIM MR D.J. CHAPMAN, FOR RESPONDENT	35 36

37

JRB lC	2	APPLICANT ADDRESS
MR TILMOUTH:	Your Honours, it must be evident from	1

the papers submitted in this case that the trial and the	2
issues were complicated and wrong and I can't attempt to	3
do justice to the factual issues in an application for	4
special leave to appeal.	5

But trying to be as focussed as possible, the basis 6

of the appeal against conviction in relation to count 2	7
which this application touches, of course, the s.564(4)	8
offence, furnishing misleading information, there were	9
arguments put to the Court of Criminal Appeal of a very	10
substantial kind, both in relation to the law and in	11

relation to the facts. The Court of Criminal Appeal sat 12

for 2 days, but because the trial, which lasted 10	13
weeks, involved 2,700 pages of evidence, nearly 300	14
exhibits, the court directed a copy of written	15
submissions be filed in advance, and those written	16
submissions dealt, in detail, with a large number of	17
factual and legal issues which were agitated in relatiop	18
to this count.	19
Very simply, if the court pleases, the key factual issue on count 1, which ha~ just been dealt with in the	20
21
other matter, and count 2, with which this matter is	22
concerned, was the state of knowledge, if any, of the	23
other directors at material.times in December and	24
January of 1988 and 1989 in relation to count 1, and	25
when the meeting was called on 3 February 1989 in	26

relation to count 2.	But the substratum of fact,	27
namely, the knowledge of the other directors, Hill,	28

Young and Paior, was a critical matter of contest at the	29
trial.	30

Now if the court pleases, therefore, when it came to 31

arguing the case in the Court of Criminal Appeal, a	32
substantial argument was mounted about why those	33
findings were wrong and could not be supported, and they	34
included a legal attack and a factual attack and,	35
indeed, an argument along the lines of Morris's case.	36

If the court pleases, again, at the risk of doing 37

injustice to the complex arguments on the legal issues, 38

JRB lC 3 APPLICANT ADDRESS

a very substantial attack was made on the way in which	1
his Honour made primary fact findings and could I take	2
your Honours to pp.68 and 69 of the appeal book to try	3

and demonstrate the focus of that argument. His Honour, 4

in this passage, and passages before and after it, was	5
making general observations and credit findings in	6

relation to the key witnesses. In relation to the 7

applicant, he said at the bottom of p.68, line 51:	8
'Byrnes was an intelligent, astute and articulate	9

lawyer. In his association with Jeffcott he wanted to 10

succeed and to be seen as a clever corporate 11

entrepreneur. He had a good recollection for detail, 12

but his assertions on critical events were coloured and 13

distorted by a belief in his own innocence.	He believed	14
that he was being unjustly persecuted in this	15
prosecution being pursued.'	16

By the way, may it please the court, it was argued	17
below, and it is submitted here, there is absolutely no	18
basis for that last sentence; there is no basis in the	19
evidence for that observation.	20

His Honour then went o~ to discount an argument by 21

the Crown that the applicant had been discredited by	22
things he had said to an investigator and then continued	23
on p.69, line 14:	24
'As will be mentioned later, there was an inherent	25
implausibility in his ultimate explanations about his	26
alleged authority to act for Magnacrete in the way in	27

which he did. on essential.matters which are in 28

dispute, I am not prepared to place any weight on his	29
evidence.'	30
Now, if the court pleases, the very long argument was	31
mounted that that reasoning process was flawed from the	32

very beginning. The 2 disclosed bases for rejecting his 33

evidence were coloured and distorted by a belief in his	34
own innocence and inherent implausibility and the	35
argument in the Court of Criminal Appeal were both quite	36

wrong. But, if ~he court pleases, the legal error in 37

that process of reasoning was that the observation that 38

JRB lC 4 APPLICANT ADDRESS

Byrnes's evidence was coloured and distorted by a belief	1
in his own innocence and, therefore, was one of the	2
factors which led his Honour not to place any weight on	3
his evidence on critical issues from the very outset, to	4
put the applicant, Byrnes's evidence out of	5
consideration altogether and it was submitted that that	6
was a very fundamental error of law when put against the	7
presumption of innocence and so on.	8

As well, if the court pleases, even if it were true 9

that his evidence was coloured, distorted in that way,	10
it might, with respect, be a proper observation to doubt	11
or look carefully at his evidence bearing in mind, of	12
course, he is the accused, but it could never be, with	13
respect, a sufficient basis to disregard it altogether	14
and, in our submission, without elaborating here, there	15
was a very substantial foundation for the merits in	16
relation to that argument and it simply was not dealt	17
with by the Court of Criminal Appeal anywhere.	18

DEANE J:  Except you have got to read the 2 19

sentences together, don't you? 20

MR TILMOUTH:  Yes, the wpole passage has to be read as 21

a whole, but it is inescapable with respect to 2 factors	22
which led his Honour to discount the evidence of the	23
coloured and distorted finding and the inherent	24
implausibility finding.	25

DEANE J:  You naturally, in the first of the 2 26

sentences, hone in on the belief of his own innocence. 27

The critical part of the first sentence is the coloured	28
and distorted and when you read it with the next	~9
sentence, I have no idea whether the 2 sentences were	30
justified in this case - but that sort of comment can be	31
justified in many cases.	32

MR TILMOUTH:  It could, with respect. I don't deny 33

that - but not, with respect, as a basis for totally	34
disregarding the evidence of the accused at the	35
beginning.	36

DEANE J:  ~ut it a little bit differently. What- 37

if his Honour said, believing in his own innocence, his 38

JRB lC 5 APPLICANT ADDRESS

evidence was coloured and distorted because he saw the	1
whole thing against him as a put-up job and he wasn't	2
prepared to listen to anything, that might count against	3

him. That's what I think his Honour is saying. 4

MR TILMOUTH:  With respect, what your Honour is 5

putting to me is slightly stronger than that. -As I put	6
to the court, we dispute there was this basis in the	7

evidence at all.	Could I put it another way to try and	8
illustrate the point.	What else is an accused person	9
supposed to do when giving evidence?	If the accused	10

does not give evidence believing in his or her own	11
innocence, that might count against him or her as well	12
because then the cry would be it lacked conviction and	13

can I put it yet even another way. If a trial judge had 14

directed a jury - taking that phrase and putting it in	15
the summing up - in my submission, that would clearly be	16
a misdirection to a jury and that would be a basis upon	17

which they can disregard the evidence altogether. . 18

DEANE J:  If you read the sentences meaning, 'I 19

disregard his evidence because of his belief in his own	20
innocence', obviously, what you say would be clearly	21
beyond argument. All I say is, I just don't read those	22
2 sentences that way.	23

MR TILMOUTH:  I beg to differ. If I try to illustrate 24

it by yet a further reference. When one then goes to 25

the rest of the judgment, a fair reading of it shows	26
that any evidence that the applicant gave on key issues	27

has been discarded altogether. In other words, it is 28

just not an observation, it is a finding at the outset	29
that the evidence of the applicant is simply not going	30
to be put in the scales when it comes to making primary	31
fact findings and, in my submission, one searches in	32
vein in later passages to come back to where his Honour	33
comes back to the evidence of Byrnes for that purpose.	34

BRENNAN J:  The construction you are placing on this 35

passage is that it is a comment that is being made by 36

his Honour. It i~ not, as it were, the laying down of a s7

building block on which the question of credibility is 38

JRB lC 6 APPLICANT ADDRESS

to be constructed. 1

MR TILMOUTH:  With respect, I can only say that it 2

happens to occur in the very whole paragraph where his 3

Honour actually makes that conclusion. The only 2 4

disclosed bases of not accepting him, not giving him any	5
weight on critical issues, are that passage and the	6
inherent implausibility passage and in my respectful	7
submission, it is difficult to say, therefore, that that	8
could not have been a significant factor as opposed to a	9
side observation about the way in which the applicant	10
gave evidence.	11

BRENNAN J:  It could only be made as an observation, 12

could it not? I mean, the alternative is that the judge	13
takes out of the air the proposition that he is giving	14
coloured, distorted evidence by reason of his belief and	15
taking that out of the air, he then disbelieves him, but	16
that seems a very unlikely scenario.	17

MR TILMOUTH:  It happens in the same paragraph may it. 18

please your Honour and the only other factor upon which	19
one can seize upon to justify not placing any weight	20

upon the evidence is in the inherent implausibility.	In	21
my submission, it is no coincidence that this	22
observation is made in the key passage where Byrnes's	23
evidence is discarded.	In my submission, it must be	24

causative, so to speak, rather than just an incidental	25
observation which had no influence on. the later approach	26

to the case.	My argument, if the court pleases, is it	27
prefigured the way the rest .of the case was to be	28

disposed, and the judgment demonstrates that.- 29

On the inherent implausibility, all that his Honour 30

did when it came to later passages was to say or to hold	31
that, in effect, it was inherently implausible that if	32
it had been raised earlier if the directors had	33

knowledge.	In other words, that it would have appeared	34
in the memorandum for the meeting of 3 February.	Now,	35

there were other factors which led his Honour to find	36
that there was no_ reasonable possibility that each of	37
the 3 directors had the relevant knowledge, but the main	38

JRB lC 7 APPLICANT ADDRESS

factor his Honour held on inherent implausibility was 1

the omission of the earlier material. Now, if the court 2

pleases, our argument in the Court of Criminal Appeal 3

was the reverse was true. There would be no reason to 4

put the earlier material in the memorandum if the	5
directors already knew about it; you would only put it	6
there to appraise them of knowledge they didn't have.	7
Your Honours, could I emphasise as well that in relation to the primary fact finding of the other	8
9

directors, his Honour was very scathing. Time doesn't 10

permit me to elucidate it, but in relation to Hill, he 11

was described as 'cunning and devious', p.67. His 12

Honour only relied upon him when it was supported by	13
other evidence at the bottom of 67.	14
In relation to Young, his Honour observed that he answered a lot of questions that he had no recollection	15
16
and it was part of the argument in the Court of Criminal	17
Appeal that Young did not, for that reason, dispute	18
Byrnes's evidence.	19

DEANE J:  Can I interrupt you in an endeavour to 20

help in terms of what I se~ as your problem and that is	21
that Bollen J's judgment is a very unusual judgment in	22
the sense that leading up to dealing with an attack on	23
findings of fact, his Honour sets out a vast amount of	24
the trial judge's judgment with the word 'masterly' used	25

both before and afterwards. Now, that being so, I read 26

the essential paragraph from the point of view of this 27

application as meaning, 'I have considered it all and I	28
agree completely with everything the trial judge says	29

about the facts.' Is there an argument put by you to 30

the Court of crimina~Appeal that can't be dealt with by	31
saying, 'I agree completely with the masterly exposition	32
of the facts by the trial judge?'	33

MR TILMOUTH:  With respect, to dismiss arguments that 34

took nearly 100 pages of documents to develop and 2 days	35
of oral argument to fill out in a compendious passage	36
like the one I think your Honour had in mind at p.168,	37

is a big step. What I was putting to your Honours, if 38

JRB lC 8 APPLICANT ADDRESS

the court pleases, irrespective of the view that one	1
takes of the coloured and distorted passage, it was a	2
substantial argument and it was argued at length by both	3

myself and Mr Borick. It is surprising, with respect, 4

that it doesn't receive some mention in the judgment.	5
The arguments we put about the fact finding pr0cess,	6
bearing in mind his Honour's primary findings, was very	7

lengthy. The Crown did not contend what we put was 8

unarguable, it just disagreed with them at the end of	9
the day and they were very substantial and I can't	10

possibly hope to fill them out now. It is surprising, 11

with respect, in a major case like this, that they are	12
not referred to.	13

DEANE J:  What I am putting to you is one can read 14

the judgment as saying, 'If I went through all the facts	15
and expressly set out all the arguments, I really	16
couldn't do better in dealing with them to adopt the	17

masterly exposition.' Now is there some authentic point 18

to that in terms of what was squarely raised that	19
clearly isn't dealt with by that, in other words, if	20
there was a point of law th~t just had to be dealt with	21
and wasn't answered by reference to a masterly	22
exhibition of fact.	23

MR TILMOUTH:  The problem.was, with respect, his 24

Honour, Judge Lunn, did not deal with the issues that 25

were being agitated. They were argued in the Court of 26

Criminal Appeal and they were argued before his Honour 27

and they weren't dealt with .. That's the difficulty I 28

have, and to say that it is simple enough to accept it	29
was a masterly exposition, ignores the fact that our	30
primary argument was that the learned trial judge has	31
overlooked some very important factual matters.	32

DEANE J:  I wasn't suggesting that was an ideal 33

course. 34

MR TILMOUTH:  I understand, with respect, and I 35

understand judges don't have to go in detail through all	36
the arguments. Ttese were, with respect, very	37

substantial arguments. They may have failed at the end 38

JRB lC 9 APPLICANT ADDRESS

of the day, but they deserved to be appraised.	The case	1
was too important, too difficult for a summary	2
dismissal.	On the legal side, apart from the coloured	3

and distorted issue which, in my submission, is	4
fundamentally important, there was the issue about	5
Versteeg's case in relation to the elements on-count 2	6
which ignored the external circumstances and said the	7
memo admitted the important information objectively, it	8
was therefore misleading and that's the end of the	9

matter. It was argued before his Honour in the Court of 10

Criminal Appeal that the memo had to be considered in	11
the context of the actual knowledge of the directors and	12
with that knowledge in mind, it was therefore not	13

misleading.	The analogy was based on the Trade	14
Practices cases, if the court pleases.	His Honour	15

applied Versteeg's case which is a decision of the court	16
of Criminal Appeal in Western Australia and simply said	17

the external circumstances are irrelevant. When his 18

Honour, Malcolm CJ, applied Versteeg's case, he was	19
applying some obiter statements that when one looks at	20
whether something is misle~ding for the purposes of	21
s.564, one looks at it objectively and any	22
contemporaneous or future statement is to be ignored.	23

Now the argument that was put in the 2 tiers below 24

was that that's not right and an analogy was made to the	25
Trade Practices case where you look at the class, the	26
whom, the relevant statement which was made, in this	27

case, informed directors, and the key question is what	28
the directors knew and his Honour found they variously	29
knew certain things - although it was not full	30
knowledge. Chief Justice Malcolm's statement, on which	31
his Honour relied, was purely obiter.	32

BRENNAN J:	What page is that?	33
MR TILMOUTH:	In the appeal book, the finding of his	34

Honour is at p.102-3.	His Honour applied Chief Justice	35
Malcolm in Versteeg at line 45.	The test on whether the	36
information was m~sleading is objective, p.102.	I am	37
now at line 51:	38

JRB lC 10 APPLICANT ADDRESS

'Whether an omission is misleading is to be judged	1
against the background of the knowledge of the likely	2
recipient of the information, but without reference to	3
any contemporaneous or subsequent explanations about the	4

information: Versteeg v R (above) at 17-18. What is 5

material is to be determined by reference to the	6
contents of the information, and without reference to	7
the existence of external circumstances which might	8
render it of less importance to particular recipients.'	9
Now the argument before both courts was that in this	10
case, the directors knew enough to make the document	11
which, on its face is misleading, not misleading to	12
them, or not likely to have them be misleading.	13

CONTINUED	14 15 16 17 18 19 20 21 22
23
24 25 26 27

28 29 30 31 32 33

34

35 36 37

LT lD 11 APPLICANT ADDRESS

That reference in Versteeg is dicta from Malcolm CJ.	1
Wallace J did not deal with the issue at all in his	2
judgment, and Seaman J, in the same case, expressly said	3
the matter should be left for another day, because the	4
issue was not orally argued, it was only dealt with in	5
written submissions before that court.	6

BRENNAN J:  What is the complaint you make about 7

what his Honour has said at p.102? 8

MR TILMOUTH:  The complaint is that when it comes to 9

consider whether the memorandum for the meeting was	10
misleading, one had to read it in the light of the	11
knowledge of the directors at that time.	12

BRENNAN J:  That is exactly what appears at line 55, 13

is it not? 14

MR TILMOUTH:  In one sense that does look that way, 15

but his Honour at 103, however, goes on to exclude,	16
without reference, line 6, to the existence of external	17
circumstances which might render it of less importance.	18
to the particular recipients, and the argument is and	19

was, these directors knew the missing information.	It	20
could not have misled them:,	21

BRENNAN J:  That seems to me to be falling precisely 22

within what is said at line 55 on 102, and as to what	23
appears on 103, referring to the significance of what is	24
appreciated by those to whom it is directed.	25

MR TILMOUTH:  One could understand that, especially 26

from what appears at 102, but if his Honour approached 27

it that way, his Honour never went on to consider what	28
was the background knowledge of the likely recipient,	29

which was the live issue in the case. The argument is 30

that he disregarded any background knowledge, and simply	31
held that the memorandum was objective, and therefore,	32
the offence was made out.	33

That matter, too, of course, has not been dealt with 34

at all in the Court of Criminal Appeal, and it was a	35
substantial argument.	36

In our submission, it is an important issue, because 37

not only is s.564, as it was, of importance, but the 38

LT lD 12 APPLICANT ADDRESS

Trade Practices Act cases, Parkdale Furniture in this	1
court, show that what is misleading must be considered	2
in context, and viewed as a whole.	3

BRENNAN J:  If one looks at pp.103 to 104 his Honour 4

said:	5
'The major issue on this count, as it was argued, was	6
whether each of Hill, Young and Paior, did already know	7
each of the matters contained in particulars (a) - (j)	8
inclusive.'	9
He goes on then.	10

MR TILMOUTH:  That is true, but that begs the 11

question, that those findings of fact were very much in	12
issue.	13

BRENNAN J:  I can understand that, but that is all 14

there is to it.	There is no error of principle	15
involved.	16

MR TILMOUTH:  Versteeg's case, at least Malcolm CJ's 17

statement, is not correct. The external circumstances	18
can be relevant.	19

BRENNAN J:  Whatever Versteeg's case might say, in 20

the circumstances of this case, was there any error of	21
principle involved in the fact finding exercise to which	22
his Honour addressed himself at those pages?	23

MR TILMOUTH:  Yes, to the·extent that he excluded 24

reference to existing circumstances, and to the extent	25
that he excluded reference to subsequent explanations,	26
because one of the major arguments was, that here these	27

directors are saying they did not know a thing about it,	28
the applicants Byrnes and Hopwood were caught out, the	29
meeting of 3 February was cause to fix it up, but yet	30
they voted for it. Each of the directors, except Hill	31
who abstained, voted for it, and the argument was that	32
all of that conduct at the time, and indeed, subsequent	33
conduct at public meetings and signing various	34
statements for the Corporate Affairs Commission, all	35
indicated contrary.	36

DEANE J:  Just so I can follow it, is what you are 37

saying that even if one accepts the correctness of the 38

LT lD 13 APPLICANT ADDRESS

propositions of law, your argument at the trial as to	1
why you should succeed by reference to those	2
propositions was not dealt with by the trial judge?	3

MR TILMOUTH:	In our submission, yes.	4
DEANE J:	And your argument that it was not dealt	5

with by the trial judge is not expressly dealt-with in	6
the Court of Criminal Appeal?	7

MR TILMOUTH:  No, not at all. I am conscious the time 8

has gone, but can I just take that one step further. If 9

one goes back to the key passage at p.69, after the	10
coloured and distorted belief, his Honour went on to	11
make fact finding, not on credit, but on inherent	12
plausibilities and implausiblities, and the argument was	13
that at every step, when we look at the inherent	14
plausibilities, they went the applicant's way.	15

DEANE J:  Assume, difficult though it may be, that 16

one takes the view that the arguments you want to	17
advance have been impliedly dealt with in that paragraph	18

in the judgment. If the appeal in the matter in which 19

leave were granted were to succeed, and as I gather,	20
issues of fact would have to be remitted, or major	21
issues would have to be remitted to the Court of	22
Criminal Appeal to be dealt with, would not those issues	23
include issues which have been resolved silently against	24
you in this case?	25

MR TILMOUTH:  On that thesis, they would have to, but 26

it is very surprising that issues that took two days to 27

argue, and several hundred pages of submissions, were	28
dealt with in that way by the court of criminal Appeal,	29
because if you go back to p.69, if you ignore the	30
coloured and distorted issue, and simply look at	31
inherent implausibilities or plausibilities, what you	32
had was a Warren and Cooney situation, not a situation	33
involving credit, and that made the approach of the	34
Court of Appeal to conduct an independent review of the	35
nature and quality of the evidence more onerous, because	36
it was in just as good a position to draw the	37

inferences. It was not a case where we were foreclosed 38

LT lD 14 APPLICANT ADDRESS

,-

on credit, because if you go back to those two key	1
factors at p.69, his Honour was drawing inferences from	2
facts he found proved, not deciding the case on matters	3
of credit.	4

BRENNAN J:  Mr Weinberg, the court would not be 5

minded to grant special leave on the material presently	6
before it in this case, but if, in the case in which	7
special leave has been granted to the Crown, there is a	8
remitting of the matter to the Court of Criminal Appeal	9
in order to further hear and determine the judgment on	10
count one, and if, in the course of those proceedings,	11
the court were called upon to make findings on the same	12
issues as those to which Mr Tilmouth has been referring	13
in this case, it would be anomalous if there were a	14
divergence of findings by the Court of Criminal Appeal	15
on the second occasion.	16

MR WEINBERG:	There would be a miscarriage of justice.	17
BRENNAN J:	There would be a miscarriage of justice,	18

and in those circumstances, if Mr Tilmouth were minded	19
to ask for this matter to stand over, pending the	20
determination of the appeal and the other matter to this	21
court, or thereafter, to the determination of any	22
remitted matter to the Court of Criminal Appeal, would	23
you have any objection?	24

MR WEINBERG:	No.	25
BRENNAN J:	Mr Tilmouth?	26

MR TILMOUTH:	No, that would be a preferable course.	27
BRENNAN J:	The matter will stand over, with liberty	28

to the respondent to move to dispose of the application	29
at the termination of the appeal in the matter in which	30
special leave has been granted, or, if that matter	31
should then be remitted to the Court of Criminal Appeal	32
of South Australia, with liberty to either party to move	33
at the conclusion of those proceedings for an order by	34
this Court in this case.	35 36
37