Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 5 Indictment)
[2021] FCA 1345
•3 November 2021
FEDERAL COURT OF AUSTRALIA
Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 5 – Indictment) [2021] FCA 1345
File number: NSD 1316 of 2020 Judgment of: WIGNEY J Date of judgment: 3 November 2021 Catchwords: PRACTICE AND PROCEDURE – federal crime – interlocutory application – complete shemozzle – application objecting to indictment on the basis of formal defects apparent on the face of indictment pursuant to s 23CP(1)(a) of the Federal Court of Australia Act 1976 (Cth) – where Commonwealth Director of Public Prosecutions has previously been ordered to file a new indictment to remedy identified defects and deficiencies in an earlier indictment – whether new indictment filed is valid – application by the accused seeking to quash each count in the indictment and to be discharged – whether there are defects in the charges contained in new indictment – whether charges in indictment failed to describe the essential ingredients of the alleged offences – whether charges in indictment contained deficient particulars of knowledge of the accused – whether charges in indictment contained deficient particulars of conduct – whether charges in indictment fail to adequately identify conduct engaged in by the accused – principles of a valid indictment – where new indictment found to be defective and deficient – where defects in new indictment not such as to justify an order quashing indictment and discharging accused – where Commonwealth Director of Public Prosecutions ordered to file a valid indictment in accordance with r 3.01 of the Federal Court (Criminal Proceedings) Rules 2016 (Cth) and the common law Legislation: Competition and Consumer Act 2010 (Cth), ss 79(1)(a), 79(1)(c), 79(1A), 44ZZRD, 44ZZRF, 44ZZRF(1), 44ZZRF(1)(b), 44ZZRF(2), 44ZZRG, 44ZZRG(1), 44ZZRG(1)(a), 84(2)
Criminal Code (Schedule to the Criminal Code Act 1995 (Cth)), ss 5.2(3), 11.2(1), 11.2(2), 11.2(2)(a), 11.2(3)(a), 11.5
Federal Court of Australia Act 1976 (Cth), ss 23BF(6), 23BH, 23CE, 23CE(a), 23CP(2)(a), 23CQ
Federal Court (Criminal Proceedings) Rules 2016 (Cth), rr 1.04(1), 1.04(2), 3.01, 3.01(4)(c), 3.01(6), 3.07(3)
Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Bruce v Williams (1989) 46 A Crim R 122
Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 1 – Indictment) [2021] FCA 757
Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 4 – examination orders) [2021] FCA 1237
Director of Public Prosecutions for Northern Ireland v Maxwell [1978] 3 All ER 1140
Dupas v The Queen (2010) 241 CLR 237; [2010] HCA 20
Edwards v The Queen (1992) 173 CLR 653
Giorgianni v The Queen (1985) 156 CLR 473
Handlen v The Queen (2011) 245 CLR 282; [2011] HCA 51
Jago v District Court of New South Wales (1989) 168 CLR 23
John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508
Johnson v Youden [1950] 1 KB 544
King v The Queen (1986) 161 CLR 423
Lodhi v The Queen (2006) 199 FLR 303; [2006] NSWCCA 121
Moti v The Queen (2011) 245 CLR 456; [2011] HCA 50
Moustafa v The Queen (2014) 43 VR 418; [2014] VSCA 270
News Limited v South Sydney District Rugby League Football Club Limited (2003) 215 CLR 563; [2003] HCA 45
R v Bainbridge [1960] 1 QB 129
R v Glennan [1970] 2 NSWR 421
R v Glennon (1992) 173 CLR 592
R v Holliday (2017) 260 CLR 650; [2017] HCA 35
R v Kaldor (2004) 150 A Crim R 271; [2004] NSWCCA 425
R v Licciardello (2017) 3 Qd R 206; [2017] QCA 286
R v LK (2010) 241 CLR 177; [2010] HCA 17
R v Tannous (1987) 10 NSWLR 303
Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53; [2003] HCA 75
Stokes v The Queen (1990) 51 A Crim R 25
Strickland v Commonwealth Director of Public Prosecutions (2018) 266 CLR 325; [2018] HCA 53
Division: General Division Registry: New South Wales National Practice Area: Federal Crime and Related Proceedings Number of paragraphs: 285 Date of hearing: 16 September 2021 Counsel for the Prosecutor: Ms J Single SC with Mr C Tran and Ms T Epstein Solicitor for the Prosecutor: Commonwealth Director of Public Prosecutions Counsel for the First Accused: Mr D Jordan SC with Ms A Bonnor Solicitor for the First Accused: Herbert Smith Freehills Counsel for the Second Accused: Mr N Clelland QC and Mr G Livermore QC Solicitor for the Second Accused: MinterEllison Counsel for the Third Accused: Ms K C Morgan SC and Ms S Callan SC Solicitor for the Third Accused: Watson Mangioni Counsel for the Fourth Accused: Mr M Thangaraj SC Solicitor for the Fourth Accused: King & Wood Mallesons Counsel for the Fifth Accused: Mr T Bannon SC with Mr C Colquhoun and Ms C O’Neill Solicitor for the Fifth Accused: Arnold Bloch Leibler Counsel for the Sixth Accused: Mr P Wood with Mr S Pararajasingham Solicitor for the Sixth Accused: Arnold Bloch Leibler Counsel for the Seventh Accused: Mr T Game SC and Mr S Buchen SC with
Ms S PalaniappanSolicitor for the Seventh Accused: Allens Counsel for the Eighth Accused: Mr P M Strickland SC and Mr S A Lawrance SC Solicitor for the Eighth Accused: Corrs Chambers Westgarth
Table of Corrections 4 November 2021 On the Orders page, order 1 has been changed from “On or before 24 November 2021” to “On or before 17 November 2021”. At [142], the word “Limited” has been added after “J.P. Morgan Australia”. At [144], the words “or understanding” have been added after the words “the alleged arrangement”. At [160], the reference to “Citigroup” has been amended to “Mr Moscati”. At [221], the words “eight months’ time” have been amended to “six months’ time”. At [243], the words “before a jury” have been added after the words “the proposed commencement of the trial”. 5 November 2021 At [33], “that provision” has been replaced by “that arrangement or understanding”. At [90], the word “in” has been added after the word “participated”. At [191], the heading “arrangement of understanding” has been amended to “arrangement or understanding”. ORDERS
NSD 1316 of 2020 BETWEEN: COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS
Prosecutor
AND: CITIGROUP GLOBAL MARKETS AUSTRALIA PTY LIMITED ACN 003 114 832
First Accused
ITAY TUCHMAN
Second Accused
JOHN WILLIAM MCLEAN (and others named in the Schedule)
Third Accused
ORDER MADE BY:
WIGNEY J
DATE OF ORDER:
3 NOVEMBER 2021
THE COURT ORDERS THAT:
1.On or before 17 November 2021, the prosecutor file and serve a new indictment pursuant to r 3.07(3) of the Federal Court (Criminal Proceedings) Rules 2016 (Cth) which remedies the defects and deficiencies in the existing indictment which are identified in the reasons for judgment.
2.Save for the indictment filed in accordance with order 1, the prosecutor not be permitted to file any further new indictment, or amend the indictment, without the leave of the Court or the consent of all the accused.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
WIGNEY J:
On 7 July 2021, I ordered the prosecutor in this matter, the Commonwealth Director of Public Prosecutions, to file a new indictment which remedied a number of identified defects and deficiencies in the existing indictment: Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 1 – Indictment) [2021] FCA 757 (Judgment No 1). The prosecutor eventually filed a new indictment in purported compliance with that order. The accused contend, however, that that indictment does not remedy all of the previously identified defects and deficiencies. Indeed, they contend that it contains new defects and deficiencies. The accused applied for orders that the indictment be quashed and that they be discharged pursuant to s 23CP(2)(a) of the Federal Court of Australia Act 1976 (Cth) (FCA Act).
For the reasons that follow, the contention by the accused that the indictment filed after, and as a consequence of, Judgment No 1 is deficient or defective must be accepted. I do not, however, consider that the defects are such as to warrant an order quashing the indictment and discharging the accused. The prosecutor should be given at least one more opportunity to file an indictment which both complies with r 3.01 of the Federal Court (Criminal Proceedings) Rules2016 (Cth) and satisfies the common law requirements for a valid indictment.
BACKGROUND AND CONTEXT
This judgment should be read in conjunction with Judgment No 1, which provides much of the relevant background and context. That judgment, amongst other things, sets out the nature and elements of the offences with which the accused have been charged, provides a summary of the charges in the indictment and the prosecution case as at the date of that judgment, discusses the relevant provisions of the Rules and the common law principles concerning the content of, and requirements for, a valid indictment and identifies the deficiencies in the indictment then under consideration. Abbreviations employed in Judgment No 1 are used again in this judgment.
To avoid confusion, I will from this point refer to the indictment which was found to be defective in Judgment No 1 as the Original Indictment (even though, as explained in Judgment No 1, it in fact replaced the first indictment filed by the prosecutor) and the indictment filed on 16 August 2021, following and as a consequence of Judgment No 1, as the August Indictment.
In short summary, the Original Indictment was found in Judgment No 1 to be defective or deficient because it failed to describe, concisely and with reasonable particularity, the nature of the offences alleged to have been committed by the accused. In particular, that indictment failed to identify many of the essential factual ingredients of the offences, beyond merely reciting the offences in the words of the provisions creating them. While the particulars of the alleged offences had, for the most part, been identified by the prosecutor and provided to the accused in a separate document, the Notice of the Prosecution’s Case filed on 23 March 2021 pursuant to s 23CD(1)(a) and s 23CE of the FCA Act and by order of the Court, the charges in the indictment itself were nevertheless required to, but were found not to, include a concise distillation or summary of the essential conduct and relevant mental states of the accused relevant to the offences in question. The judgment explained the level of detail or particularity which was required.
As will be explained in more detail in due course, the August Indictment contains significantly fewer charges than the Original Indictment. The charges that are included in the August Indictment are undoubtedly described with more particularity than they were in the Original Indictment. The charges include some particulars of the factual elements of the alleged offences. The critical questions raised by the current interlocutory applications are: first, whether, despite the additional particularisation, the charges still fail to describe the essential factual ingredients of the alleged offences with sufficient particularity; and second, whether the additional particulars which have now been included in the charges are themselves deficient or expose or reveal other defects in the way the charges have been described.
The prosecutor did not concede that the statements of the charges in the August Indictment were deficient or defective. Despite that, the prosecutor provided the Court and the accused with a draft indictment which contained marked-up changes that were said to deal with some of the issues raised by the accused in respect of the August Indictment. Although no formal application was made by the prosecutor, the suggestion appeared to be that the prosecutor should be permitted to file the draft indictment (presumably without the mark-up) as a new indictment. To confuse matters even more, shortly prior to the hearing of the interlocutory applications, a further draft marked-up indictment was provided to the Court. That second version of the draft indictment included further substantial changes to the charges, in particular the charges against ANZ and Mr Moscati.
I will, again to avoid confusion, refer to the second version of the draft marked-up indictment as the Proposed Indictment. The prosecutor indicated that the intention was to file the Proposed Indictment to replace the August Indictment if the Court permitted that to occur. Regrettably, however, during the hearing of the interlocutory applications, the prosecutor appeared to concede that there may be issues with the Proposed Indictment and its terms may need to be revisited.
It would not be unfair to characterise the situation concerning the state of the indictment as a complete shemozzle. It is, on just about any view, an entirely unsatisfactory state of affairs for the indictment to be unsettled well over three years after the accused were first charged and just over six months before the trial has been listed to commence.
This judgment will address the validity of the August Indictment. Some consideration will also be given to whether the marked-up changes suggested in the Proposed Indictment are capable of rectifying any defects or deficiencies found to exist in the filed indictment. As will be seen, for the most part they are not. Indeed, in some respects the Proposed Indictment makes matters worse.
The Original Indictment contained 42 charges. The August Indictment contains 26 charges.
The reduction in the number of charges is essentially a product of the fact that the prosecution case originally involved an allegation that the principal offenders, Citigroup and Deutsche Bank, together with J.P. Morgan, entered into three separate arrangements or understandings. Those alleged arrangements or understandings were referred to as the Friday Understanding, the 5-7% Understanding and the Monday Understanding. Each of those arrangements or understandings was alleged to have contained a cartel provision.
Citigroup and Deutsche Bank were each charged with three counts of making an arrangement or arriving at an understanding containing a cartel provision contrary to s 44ZZRF(1) of the Competition and Consumer Act 2010 (Cth) (C&C Act) – one count in respect of each of the three different arrangements or understandings – along with three alternative counts based on a differently particularised cartel provision in those arrangements or understandings. They were also charged with three counts of giving effect to a cartel provision in an arrangement or understanding contrary to s 44ZZRG(1) of the C&C Act – again, one count in relation to each of the three different arrangements or understandings – along with three alternative counts based on the differently particularised cartel provision in those arrangements or understandings.
Messrs Tuchman, McLean, Roberts, Ormaechea and Richardson were each charged with being knowingly concerned in, or party to, the contraventions by Citigroup and Deutsche Bank; Messrs Tuchman, McLean and Roberts in respect of Citigroup’s contraventions (though Mr Roberts only faced charges in respect of the Friday Understanding) and Messrs Ormaechea and Richardson in respect of Deutsche Bank’s contraventions. Messrs Tuchman, McLean, Ormaechea and Richardson were accordingly each charged with six offences and six alternative offences. Mr Roberts was charged with two offences and two alternative offences.
ANZ and Mr Moscati were charged with one count (and one alternative count) of being knowingly concerned in, or party to, the contraventions by Citigroup and Deutsche Bank arising from their making or arriving at the Friday Understanding and one count (and one alternative count) of being knowingly concerned in, or party to, the contraventions by Citigroup and Deutsche Bank arising from their giving effect to the cartel provision in the Friday Understanding. They were also charged with one count (and one alternative count) of aiding, abetting, counselling or procuring a contravention by J.P. Morgan, being a contravention arising from it giving effect to a cartel provision in the 5-7% Understanding.
The significant reduction in the number of charges in the August Indictment is a product of the fact that it does not contain any charges relating to, or arising from, the Friday Understanding or the Monday Understanding. The prosecution case is now based entirely on allegations relating to the 5-7% Understanding. As a result, Mr Roberts, who was only charged with offences relating to the Friday Understanding, is no longer accused of committing any offence and has been discharged.
OUTLINE OF THE CHARGES IN THE NEW INDICTMENT
Citigroup and Deutsche Bank are now each charged with one count (and one alternative count) of making an arrangement or arriving at an understanding – the 5-7% Understanding – which contained a cartel provision (charges 1 and 14 in the case of Citigroup and charges 2 and 15 in the case of Deutsche Bank). The alternative counts are again based on the differently particularised cartel provision. Citigroup and Deutsche Bank are also each charged with one count (and one alternative count) of giving effect to the cartel provision contained in the 5-7% Understanding (charges 7 and 20 in the case of Citigroup and charges 8 and 21 in the case of Deutsche Bank).
Messrs Tuchman and McLean are now each charged with one count (and one alternative count) of being knowingly concerned in, or party to, Citigroup’s contravention arising from it making or arriving at the 5-7% Understanding (charges 3 and 16 in the case of Mr Tuchman and charges 4 and 17 in the case of Mr McLean) and one count (and one alternative count) of being knowingly concerned in, or party to, Citigroup’s contravention arising from it giving effect to the 5-7% Understanding (charges 9 and 22 in the case of Mr Tuchman and charges 10 and 23 in the case of Mr McLean).
Similarly, Messrs Ormaechea and Richardson are each charged with one count (and one alternative count) of being knowingly concerned in, or party to, Deutsche Bank’s contravention arising from it making or arriving at the 5-7% Understanding (charges 5 and 18 in the case of Mr Ormaechea and charges 6 and 19 in the case of Mr Richardson) and one count (and one alternative count) of being knowingly concerned in, or party to, Deutsche Bank’s contravention arising from it giving effect to the 5-7% Understanding (charges 11 and 24 in the case of Mr Ormaechea and charges 12 and 25 in the case of Mr Richardson).
ANZ and Mr Moscati are now jointly charged with only one offence (charge 13) and one alternative count (charge 26). The characterisation of those offences is a significant point of contention. It suffices at this point to say that they are both particularised as being an offence of aiding, abetting, counselling or procuring J.P. Morgan to give effect to a cartel provision in the 5-7% Understanding. The point of contention concerns the particulars of the arrangement or understanding, or the cartel provision contained in it, which it is alleged that ANZ and Mr Moscati intended to aid, abet, counsel or procure J.P. Morgan to give effect to. That issue will be considered in detail later in these reasons.
DEFECTS IN THE CHARGES AGAINST CITIGROUP AND DEUTSCHE BANK
To understand or appreciate the alleged defects in the charges against Citigroup and Deutsche Bank, it is necessary to first provide some details of those charges as they appear in the August Indictment.
The make an arrangement or arrive at an understanding charges
Charge 1, which is the charge alleging that Citigroup made an arrangement or arrived at an understanding containing a cartel provision, is pleaded and particularised in the indictment as follows:
Charge 1 The Prosecutor charges that on 8 August 2015 at Sydney in the State of New South Wales and elsewhere, CITIGROUP GLOBAL MARKETS AUSTRALIA PTY LIMITED intentionally made an arrangement or arrived at an understanding with Deutsche Bank Aktiengesellschaft and J.P. Morgan Australia Limited in relation to the supply of Australia and New Zealand Banking Group Limited shares, containing a cartel provision, knowing or believing that the arrangement or understanding contained a cartel provision.
Contrary to section 44ZZRF(1) of the Competition and Consumer Act 2010 (Cth).
Particulars of the Arrangement or Understanding
(referred to in this Indictment as the “5-7% Understanding Particulars”)
The arrangement or understanding referred to in Charge 1 was an arrangement or understanding between Citigroup Global Markets Australia Pty Limited, Deutsche Bank Aktiengesellschaft and J.P. Morgan Australia Limited (the Investment Banks) that, from 10 August 2015:
(1)each of the Investment Banks, including through its related entities, would restrict or limit its trading in Australia and New Zealand Banking Group Limited shares (ANZ Shares) by selling, on each day, no more than 7% of the average daily volume of the trade in ANZ Shares (with the aim of not exceeding 5%); and
(2)if on a given day an Investment Bank, including through its related entities, sold above 7% of the average daily volume of the trade in ANZ Shares, it would buy ANZ Shares so that the net reduction in the number of ANZ Shares held by that Investment Bank and its related entities did not exceed the 7% limit for that day,
(referred to in this Indictment as the “5-7% Understanding”).
Particulars of Conduct
The 5-7% Understanding was made or arrived at during and as a result of discussions that occurred between officers, employees or representatives of the Investment Banks on 8 August 2015.
Those individuals included Itay Tuchman and John McLean on behalf of Citigroup Global Markets Australia Pty Limited. In engaging in those discussions, one or more of Itay Tuchman and John McLean:
(1)intended to make or arrive at the 5-7% Understanding on behalf of Citigroup Global Markets Australia Pty Limited; and
(2)knew or believed the facts which meant that the 5-7% Understanding contained a cartel provision.
Itay Tuchman and John McLean were acting within the scope of their actual or apparent authority. Their conduct and states of mind are accordingly attributable to Citigroup Global Markets Australia Pty Limited.
Particulars of the Cartel Provision
Supply of Shares Purpose
(referred to in this Indictment as the “Supply of Shares Purpose Particulars”)
(1)The purpose of the provision contained in the 5-7% Understanding was to directly or indirectly restrict or limit the number of ANZ Shares that the Investment Banks would sell or offer for sale from 10 August 2015 to prospective purchasers of ANZ Shares on securities exchanges.
(2)The provision contained in the 5-7% Understanding thereby satisfied the purpose condition in section 44ZZRD(3)(a)(iii) of the Competition and Consumer Act 2010 (Cth) as it had the purpose of, directly or indirectly, restricting or limiting the supply, or likely supply, of services (being ANZ Shares) to persons or classes of persons (being prospective purchasers of ANZ Shares) by any or all of the Investment Banks.
Competition Condition
(referred to in this Indictment as the “Competition Condition Particulars”)
(1)At least two of the Investment Banks were, or were likely to be, in competition with each other in relation to the sale of ANZ Shares which they held, or were likely to hold, to prospective purchasers of ANZ Shares on securities exchanges.
(2)The competition condition in section 44ZZRD(4) of the Competition and Consumer Act 2010 (Cth) is satisfied in relation to the provision contained in the 5-7% Understanding as at least two of the Investment Banks were, or were likely to be, in competition with each other in relation to the supply of services (being ANZ Shares).
Charge 2, which is the charge alleging that Deutsche Bank made an arrangement or arrived at an understanding containing a cartel provision, is pleaded and particularised in essentially the same terms as charge 1, save that: first, the particulars of the arrangement or understanding simply state that the “arrangement or understanding referred to in Charge 2 is the 5-7% Understanding” and that the “5-7% Understanding Particulars are repeated”; second, the particulars of conduct refer to Mr Ormaechea, Mr Richardson and Deutsche Bank (as opposed to Mr Tuchman, Mr McLean and Citigroup); and third, the particulars of the cartel provision simply state that the Supply of Shares Purpose Particulars and the Competition Condition Particulars are repeated.
The accused, quite sensibly, did not take issue with the drafting device employed by the prosecutor of defining certain particulars (for example, the ‘5-7% Understanding Particulars’) and then employing that definition in the particulars of subsequent charges. While the use of abbreviations or defined terms or expressions in indictments is not common and not always to be encouraged, in this case it appears to make sense. It avoids unnecessary repetition and reduces the length of what will in any event be a very lengthy indictment: see Judgment No 1 at [115].
Charges 14 and 15, which are the alternative charges involving the making or arriving at the arrangement or understanding are essentially in the same terms as charges 1 and 2, save for the purpose condition in the Particulars of the Cartel Provision. Those particulars include, in lieu of the Supply of Shares Purpose, the following particulars:
(1)The Investment Banks considered it likely that if they did not restrict or limit their trading in ANZ Shares on securities exchanges from 10 August 2015, the price of ANZ Shares on securities exchanges would be lower than it would be if they did restrict or limit such trading. The purpose of the provision contained in the 5-7% Understanding was to prevent such a relative fall in the price of ANZ Shares from occurring.
(2)The provision contained in the 5-7% Understanding thereby satisfied the purpose condition in sections 44ZZRD(2)(a) and (c) of the Competition and Consumer Act 2010 (Cth) as it had the purpose of, directly or indirectly, controlling or maintaining the price for services (being ANZ Shares) supplied, or likely to be supplied, by any or all of the Investment Banks.
The particulars of the cartel provision include the Competition Condition Particulars in the same terms as they appear in charge 1.
The “gave effect to a cartel provision” charges
Charge 7, which is the charge alleging that Citigroup gave effect to a cartel provision contained in an arrangement or understanding, is pleaded and particularised in the indictment as follows:
Charge 7 The Prosecutor charges that between 8 August 2015 and 11 September 2015 at Sydney in the State of New South Wales and elsewhere, CITIGROUP GLOBAL MARKETS AUSTRALIA PTY LIMITED intentionally gave effect to a cartel provision contained in an arrangement or understanding with Deutsche Bank Aktiengesellschaft and J.P. Morgan Australia Limited in relation to the supply of Australia and New Zealand Banking Group Limited shares, knowing or believing that arrangement or understanding contained a cartel provision.
Contrary to section 44ZZRG(1) of the Competition and Consumer Act 2010 (Cth).
Particulars of the Arrangement or Understanding
The arrangement or understanding referred to in Charge 7 is the 5-7% Understanding.
The 5-7% Understanding Particulars are repeated.
Particulars of Conduct
Citigroup Global Markets Australia Pty Limited gave effect to the cartel provision in the 5-7% Understanding by one or more of its officers, employees or representatives, namely Itay Tuchman or John McLean or employees or representatives engaged in trading ANZ Shares acting under the direction of one or both of them, engaging in conduct between 8 August 2015 and 11 September 2015 that was intended to restrict or limit Citigroup Global Markets Australia Pty Limited’s trading in ANZ Shares, including the trading of any of its related entities, to no more than 7% of the average daily volume of the trade in ANZ Shares (with the aim of not exceeding 5%).
Those individuals (including those who acted under the direction of Itay Tuchman or John McLean) were acting within the scope of their actual or apparent authority as officers, employees or representatives of Citigroup Global Markets Australia Pty Limited. Their conduct is accordingly attributable to Citigroup Global Markets Australia Pty Limited.
In engaging in their conduct, one or more of Itay Tuchman and John McLean:
(1)knew or believed the facts which meant that the 5-7% Understanding contained a cartel provision; and
(2) intended to give effect to the cartel provision.
Itay Tuchman and John McLean were acting within the scope of their actual or apparent authority as officers, employees or representatives of Citigroup Global Markets Australia Pty Limited. Their states of mind are accordingly attributable to Citigroup Global Markets Australia Pty Limited.
Particulars of the Cartel Provision
Supply of Shares Purpose
The Supply of Shares Purpose Particulars are repeated.
Competition Condition
The Competition Condition Particulars are repeated.
Charge 8, which is the charge alleging that Deutsche Bank gave effect to a cartel provision contained in an arrangement or understanding, is pleaded and particularised in essentially the same terms as charge 7, save that the particulars of conduct refer to Mr Ormaechea, Mr Richardson and Deutsche Bank, as opposed to Mr Tuchman, Mr McLean and Citigroup.
Charges 20 and 21, which are the alternative charges involving giving effect to a cartel provision, are in essentially the same terms as charges 7 and 8, save for the purpose condition in the Particulars of the Cartel Provision. Those particulars refer to the Price of Shares Purpose instead of the Supply of Shares Purpose and state that the “Price of Shares Purpose Particulars are repeated”.
The alleged defects in the charges against Citigroup and Deutsche Bank
The accused contended that there were three main defects in the charges against Citigroup and Deutsche Bank as particularised in the August Indictment. Those defects were said to be: first, that the charges failed to properly identify the alleged cartel provision; second, that the charges contained deficient particulars of the knowledge of the accused; and third, that charges 7, 8, 20 and 21 (the ‘gave effect to’ charges) contained deficient particulars of conduct both because the particulars refer to unnamed employees or representatives and unnamed “related entities” and because the particulars do not in any event adequately identify the substance of the conduct engaged in by the relevant individuals.
Failure to identify the cartel provision
It was contended that the particulars of the charges against Citigroup and Deutsche Bank were defective because they fail to properly identify the relevant cartel provision. There is some merit in that contention, though as will be seen it is a fairly technical issue.
Charges 1, 2, 14 and 15 allege that Citigroup and Deutsche Bank “made an arrangement or arrived at an understanding … containing a cartel provision…”. Charges 7, 8, 20 and 21 similarly allege that Citigroup and Deutsche Bank “gave effect to a cartel provision contained in an arrangement or understanding”. The charges provide particulars of the alleged arrangement or understanding under the subheading “Particulars of the Arrangement or Understanding”. They also purport to provide separate particulars of the cartel provision allegedly contained in the arrangement or understanding under the subheading “Particulars of the Cartel Provision”. As has been seen, those particulars relevantly refer to the “purpose of the provision contained in” the arrangement or understanding. They do not, however, expressly or directly identify the terms of the provision itself. Nor do the particulars make it clear, as the prosecutor contended, that the cartel provision was “comprised by the terms of the 5-7% Understanding”.
The difficulty arises because, while the wording of the relevant offence provisions, s 44ZZRF(1) and s 44ZZRG(1) of the C&C Act, distinguish between the arrangement or understanding that is allegedly made or arrived at and the cartel provision which is allegedly contained in that arrangement or understanding, in many cases the alleged cartel provision may effectively be the only material provision contained in the arrangement or understanding. This would appear to be such a case.
It is tolerably clear that the prosecution case is that the relevant cartel provision is, in substance and effect, the provision that is currently particularised in the charges as being the alleged arrangement or understanding – the 5-7% Understanding – or at least paragraphs (1) and (2) of the 5-7% Understanding Particulars. Unfortunately, however, the particulars of the charges in the indictment do not make that abundantly clear. That is a defect in the current wording of all of the charges in the indictment, not just the charges against Citigroup and Deutsche Bank.
While the prosecutor did not accept that there was any such defect in the August Indictment, the Proposed Indictment includes some marked-up changes which would appear to be intended to deal with this complaint by the accused. For example, in the case of charge 1, the Proposed Indictment includes the following words after the subheading “Particulars of the Cartel Provision”:
(referred to in this Indictment as the “Cartel Provision Particulars”)
The cartel provision referred to in Charge 1 was a provision contained in the 5-7% Understanding to the same effect as paragraphs (1) and (2) in the 5-7% Understanding Particulars.
That change would then be carried through into the other charges to the extent that they repeat the Cartel Provision Particulars. It should also be noted that, presumably as a result of the introduction of the defined term ‘Cartel Provision Particulars’, the references in the charges to the Supply of Shares Purpose Particulars and Competition Condition Particulars have also been deleted in the Proposed Indictment. The references to the Price of Shares Purpose Particulars have also been deleted in the Cartel Provision Particulars in the alternative charges. As will be seen, however, this consequential change is problematic.
Putting aside, for the moment, the problem caused by the introduction of the defined term ‘Cartel Provision Particulars’ and the consequential deletion of the defined terms originally employed in the particulars of the cartel provision, the inclusion of the words “[t]he cartel provision referred to in Charge 1 was a provision contained in the 5-7% Understanding” is perhaps one way of rectifying the defect arising from the fact that the charges do not properly identify the cartel provision. The accused appeared to accept as much – at least they did not clearly or expressly contend to the contrary. I do not, however, consider that this wording is the best or clearest way in which to deal with this issue in the charges. Indeed, it is somewhat confusing in some respects.
A preferable way to rectify this defect in the present wording or particularisation of the charges would be to make it clear at the outset, in the particulars of the alleged arrangement or understanding (the 5-7% Understanding Particulars), that the terms of the arrangement or understanding which are identified in those particulars are the terms of the cartel provision contained in the arrangement or understanding. That could readily be done, for example, by inserting, between the words “(the Investment Banks) that” and “from 10 August 2015” on the third line of the particulars, the words “contained a provision (the Cartel Provision) to the effect that”. The words “referred to in charge 1” should also be deleted. The introductory words to the 5-7% Understanding Particulars would accordingly read as follows:
The arrangement or understanding between Citigroup Global Markets Australia Pty Limited, Deutsche Bank Aktiengesellschaft and J.P. Morgan Australia Limited (the Investment Banks) contained a provision (the Cartel Provision) to the effect that, from 10 August 2015:
That would make it sufficiently clear that the particularised provision – defined as the ‘Cartel Provision’ – was effectively the only relevant or material provision contained in the alleged arrangement or understanding. The defined term ‘Cartel Provision’ can then be utilised in the particulars to the other charges. The reason for the suggested deletion of the words “referred to in Charge 1” is to enable the defined term – the ‘Cartel Provision’ – to be used or referred to where applicable in all of the charges.
While the effect of this means of particularising the charges may be that the alleged arrangement or understanding and the alleged cartel provision were essentially one and the same, I do not consider that the charges have to state that the cartel provision was the arrangement or understanding, or vice versa, as was effectively contended by some of the accused. Indeed, given the wording of both s 44ZZRF(1) and s 44ZZRG(1), both of which refer to a cartel provision “contained in” a contract, arrangement or understanding, that would be somewhat confusing and potentially problematic. There is no reason in principle why an arrangement or understanding cannot be said to contain a provision, even if that provision is effectively the only provision, or only relevant or material provision, in the arrangement or understanding. I also do not consider that the particulars of the arrangement or understanding in the indictment have to indicate whether there were any other terms or provisions in the 5-7% Understanding beyond the Cartel Provision. It is plain enough that the prosecution case is that there were no other relevant or material provisions.
It would in my view also be preferable for the Particulars of the Cartel Provision, which currently appear after the particulars of the conduct allegedly engaged in by the accused, to appear immediately after the Particulars of the Arrangement or Understanding. Those particulars could also employ the defined term Cartel Provision in lieu of the words “the provision contained in the 5-7% Understanding” wherever those words appear. That change would have the additional benefit of shortening and simplifying the wording of the particulars of the cartel provision.
While this manner of re-particularising the charges may still be less than ideal, in my view it would adequately rectify the defect identified by the accused in respect of the identification of the alleged cartel provision.
As I emphasised repeatedly in Judgment No 1, it is not for the Court to compel a prosecutor to particularise charges in a particular way, or to assist the prosecutor in the drafting of the charges. That said, the “overarching purpose” of the Rules is to “facilitate the fair, efficient and timely determination of criminal proceedings in the Court”, including the “efficient use” of “judicial and administrative resources”: r 1.04(1) and (2)(a) of the Rules. More particularly, given the central importance of an indictment in any criminal trial (see Judgment No 1 at [92]), it is incumbent on the Court to ensure that the indictment is expressed in clear and comprehensible terms which are able to be understood by the accused and the jury. That is no mean feat in the case of indictments alleging offences under s 44ZZRF(1) and s 44ZZRG(1) of the C&C Act, particularly given the complexity of the elements of those offences. In my view it may be appropriate, in some circumstances, for the Court to express a view as to how charges in an indictment should best be framed so as to ensure not only that the proceedings are determined in a fair, efficient and timely fashion, but also to ensure that the indictment is able to be properly understood.
That said, as was again made clear in Judgment No 1, the framing and particularisation of the charges in the indictment is ultimately a matter for the prosecutor. The prosecutor is not bound to follow any suggestion concerning the wording of the charges that is made in these reasons. The prosecutor should also plainly independently satisfy herself (or himself, as the case may be) that the formulation of the charges ultimately employed in the indictment complies with the Rules and common law principles relating to indictments.
As adverted to earlier, the means by which the prosecutor sought to deal with this issue in the Proposed Indictment would appear to give rise to at least one other potential defect. The proposed changes include deleting the defined expressions Supply of Shares Purpose Particulars and Competition Condition Particulars in charges 1 to 13 and inserting in their stead a single defined expression – the ‘Cartel Provision Particulars’ – which incorporates both the Supply of Shares Purpose and the Competition Condition. Then, from charge 14, which is the first of the alternative charges based on a differently particularised cartel provision, it is proposed to again delete the defined expressions ‘Price of Shares Purpose Particulars’ and ‘Competition Condition Particulars’ and replace those defined terms or expressions by a single defined expression – the ‘Cartel Provision Particulars’. The difficulty is that ‘Cartel Provision Particulars’ is the same defined expression that is used in charges 1 to 13. The same defined term is therefore used to describe the two different formulations of the alleged particulars of the cartel provision. That is self-evidently confusing and potentially productive of error.
Deficient particulars of knowledge
As was indicated in Judgment No 1, it is an element of the offence under s 44ZZRG(1) of the C&C Act that the accused knew or believed that the arrangement or understanding which they made or arrived at contained the alleged cartel provision: Judgment No 1 at [21]. Similarly, the offence under s 44ZZRF(1) includes an element that the accused knew or believed that the arrangement or understanding contained a cartel provision.
Each of charges 1, 2, 7, 8, 14, 15, 20 and 21 include particulars of the alleged conduct engaged in by the accused. Those particulars include particulars of the fault element or state of mind of the accused that correspond with the physical or conduct element. While not strictly ‘conduct’, the state of mind of the accused is nevertheless an essential factual ingredient of an offence which must be included in the particulars of a charge in an indictment.
In relation to the fault element that the accused knew or believed that the arrangement or understanding contained a cartel provision (see s 44ZZRF(1)(b) and (2) and s 44ZZRG(1)(a) and (2) of the C&C Act), the particulars in each of the charges state that the accused “knew or believed the facts which meant that the 5-7% Understanding contained a cartel provision”.
That formulation of the relevant fault element of knowledge appears to have been derived from Judgment No 1: see for example Judgment No 1 at [185]-[189]. The reason that the knowledge element was expressed in those terms was to avoid the suggestion that it is necessary for the prosecutor to prove that the accused knew that the facts relating to the 5-7% Understanding and the provision contained in it were capable of being characterised, in the precise legal sense, as a ‘cartel provision’ as defined in the C&C Act. It is clearly not necessary for the prosecution to prove that the accused knew that the facts were “capable of characterisation in the language of the statute”: Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53; [2003] HCA 75 at [48]. Rather, the prosecutor is required to prove that the accused knew or believed the facts that, if proved, made the provision contained in the arrangement or understanding a cartel provision as defined.
On reflection, however, the particularisation of the knowledge element in these shorthand terms – that the accused “knew or believed the facts which meant that the 5-7% Understanding contained a cartel provision” – may not be ideal. Indeed, it may be potentially problematic and should be revisited. The expression “knew or believed the facts which meant” has also been employed by the prosecutor in other contexts in the charges where it is not required and even less apposite.
The accused contended that the particulars of knowledge in the charges are deficient because they fail to clearly identify the relevant facts which the accused knew or believed.
There is some merit in that contention by the accused. It is, however, a deficiency that should be able to be readily rectified.
It is tolerably clear that the prosecution case is that the relevant facts which meant that the provision in the arrangement or understanding was a cartel provision are those facts which are referred to in the Particulars of the Cartel Provision: in the case of charges 1, 2, 7 and 8, the Supply of Shares Purpose Particulars and the Competition Condition Particulars; and in the case of charges 14, 15, 20 and 21, the Price of Shares Purpose Particulars and the Competition Condition Particulars.
The prosecutor argued that it is clear from the way that the charges have been particularised that the Price of Shares Purpose Particulars and the Competition Condition Particulars are the relevant “facts” referenced in the particular that the accused “knew or believed the facts which meant that the 5-7% Understanding contained a cartel provision”. That may perhaps be so. It is difficult to accept that the accused do not appreciate that. Nevertheless, it would clearly be preferable, and put the matter beyond argument, for the particulars in question to make that clear and explicit. A simple way that could be achieved is by including a cross-reference in the relevant particulars to the Supply of Shares Purpose Particulars and Competition Condition Particulars or the Price of Shares Purpose Particulars and Competition Condition Particulars, as the case may be.
The clarity of the particulars would, however, be significantly improved if the previous shorthand formulation of the particulars – “knew or believed the facts which meant that the 5-7% Understanding contained a cartel provision” – was jettisoned in favour of a formulation which directly refers to the constituent facts relevant to the requisite knowledge that the arrangement or understanding in question contained a cartel provision.
If the expressions which are defined in charge 1 – the 5-7% Understanding Particulars (including the defined term ‘Cartel Provision’ discussed earlier in these reasons as a means by which to appropriately identify and particularise the alleged cartel provision), the Supply of Shares Purpose Particulars and the Competition Condition Particulars – are employed, the constituent facts which the accused must be alleged to know or believe are: first, that the 5-7% Understanding contained the Cartel Provision; second, that the Cartel Provision had the purpose referred to in the Supply of Shares Purpose Particulars (or the Price of Shares Purpose Particulars, as the case may be); and third, the facts referred to in the Competition Condition Particulars.
For the sake of clarity, the relevant particulars of knowledge would read something like:
The [name of accused] knew or believed:
(a)that the 5-7% Understanding contained the Cartel Provision;
(b)that the Cartel Provision had the purpose referred to in the Supply of Shares Purpose Particulars; and
(c)the facts referred to in the Competition Condition Particulars.
For the reasons given earlier and in Judgment No 1, the prosecutor is not obliged to adopt this formulation of the particulars of knowledge. It is, however, perhaps the preferable means by which to rectify the defect or deficiency in the present particulars of knowledge which has been identified by the accused. One way or another, the deficiency must be rectified.
Deficient particulars of conduct in charges 7, 8, 20 and 21
The accused contended that the particulars of the conduct in the ‘gave effect to’ charges against Citigroup and Deutsche Bank are defective in two respects.
The first defect was said to arise from the fact that the particulars refer to unnamed “employees or representatives” who “engaged in trading ANZ Shares acting under the direction of one or both of” Mr Tuchman and Mr McLean (in the case of charges 7 and 20) or Mr Ormaechea and Mr Richardson in the case of charges 8 and 21. The particulars also allege that the conduct was “intended to restrict or limit” Citigroup’s (in the case of charges 7 and 20) and Deutsche Bank’s (in the case of charges 8 and 21) “trading in ANZ Shares, including the trading of any of its related entities”. It was argued that it was impermissible for the particulars to refer to unnamed employees or representative and unnamed “related entities”.
The second defect was said to be that the particulars say no more than that Messrs Tuchman, McLean, Ormaechea and Richardson, or persons acting under their direction, “engaged in trading ANZ Shares” that was intended to have a particular result or effect. It was submitted that those particulars do not identify the substance of the conduct in question.
In my view, the particulars of the relevant conduct in these charges may be far from ideal or perfect. They are not, however, defective such as to warrant the quashing of the indictment.
The Notice filed by the prosecutor in March 2021 contained detailed particulars of the conduct which it is alleged constituted the giving effect to of the cartel provision in the 5-7% Understanding by Citigroup and Deutsche Bank. That notice has now been amended: see the Amended Notice of the Prosecution’s Case dated 20 August 2021.
In the case of Citigroup, that conduct is alleged to have included Mr Tuchman or Mr McLean “issuing instructions or giving directions to those employees or representatives of [Citigroup] responsible for trading in ANZ Shares intended to restrict or limit [Citigroup’s] trading in ANZ Shares to no more than 7% of the average daily volume of the trade in ANZ Shares (with the aim of not exceeding 5%)”: see the Amended Notice at [232]. The Amended Notice then provides various details of communications between Mr Tuchman and Mr McLean and various named employees or representatives of Citigroup which relate to trading in ANZ shares, as well as particulars of the conduct of some of those employees or representatives in respect of trading in ANZ shares on behalf of Citigroup: Amended Notice at [233]-[259]. The prosecutor contends that the conduct of each of the employees or representatives can be attributed to Citigroup by reason of s 84(2) of the C&C Act. It is also alleged in the Amended Notice that Citigroup’s trading in ANZ shares during the period 11 August to 11 September, except on 12 August and 11 September, was in accordance with the terms of the alleged cartel provision: Amended Notice at [260]-[261].
I do not consider, in all the circumstances, that it is necessary for the relevant charges in the indictment to contain the names of each of the employees or representatives of Citigroup who are referred to in the relevant parts of the Amended Notice. The requirements of “reasonable particularity”, which are discussed at length in Judgment No 1 (at [87]-[96]), do not require that level of detail in the indictment in the particular circumstances of this case.
It was indicated in Judgment No 1 at [234] and [278] that the particulars should identify the individuals who it is alleged gave effect to the cartel provision for or on behalf of Citigroup or Deutsche Bank. It was not, however, suggested, or intended to be suggested, in the judgment that the particulars in the indictment were required to include the names of each and every minor functionary, or officer or employee lower in the corporate hierarchy, who is alleged to have carried out functions relating to the relevant trading in ANZ shares on instructions or directions emanating from Mr Tuchman or Mr McLean (in the case of Citigroup) or Mr Ormaechea or Mr Richardson (in the case of Deutsche Bank). The requirements of reasonable particularity do not require the names of all such officers or employees to be included in the particulars in the indictment. There could be no suggestion that the accused do not know the case that they have to meet in relation to this aspect of the prosecution case.
Nor do I consider that particularising the conduct which gave effect to the cartel as being conduct which was intended to restrict or limit the trading of ANZ shares is a material defect in the indictment. The clarity of the particulars of conduct in the indictment could perhaps be improved, in particular by indicating, as it effectively is in the Amended Notice, that the conduct engaged in by Mr McLean and Mr Tuchman and those acting pursuant to their instructions or directions, was not only intended to restrict or limit Citigroup’s trading as particularised, but that the trading was in fact so limited or restricted: see Amended Notice at [260]. It is, however, ultimately a matter for the prosecutor to determine how the charge is particularised. The question for the Court is not whether the particulars could be improved, but whether they fail to describe the alleged offence with reasonable particularity. I do not consider that the present level of detail in the charges in the indictment is such that it could be concluded that the charges are defective. The requirement of reasonable particularity is not a counsel of perfection.
The same can be said in respect of the relevant charges concerning Deutsche Bank giving effect to the alleged cartel provision. The Amended Notice states that between 8 August and 30 September 2015, “employees or representatives of Deutsche Bank took steps to ensure that Deutsche Bank, including through DSAL [Deutsche Securities Australia Limited – see [11] in the Amended Notice] traded in a manner consistent with the 5-7% Understanding”: Amended Notice at [271]. Those steps are said to include Mr Ormaechea or Mr Richardson “issuing instructions or giving directions to those employees or representatives of Deutsche Bank responsible for trading in ANZ Shares intended to restrict or limit Deutsche Bank’s trading in ANZ Shares to no more than 7% of the average daily volume of the trade in ANZ Shares (with the aim of not exceeding 5%)”: Amended Notice at [271].
The Amended Notice also provides various details of communications between Mr Ormaechea and Mr Richardson and various named employees or representatives of Deutsche Bank which relate to trading in ANZ shares, as well as particulars of the conduct of some of those employees or representatives in respect of trading in ANZ shares on behalf of Deutsche Bank: Amended Notice at [274]-[306]. The prosecutor alleges that the conduct of each of the employees or representatives can be attributed to Deutsche Bank by reason of s 84(2) of the C&C Act. It is also alleged in the Amended Notice that Deutsche Bank’s trading in ANZ shares during the period 11 August to 30 September 2015 was in accordance with the terms of the alleged cartel provision: Amended Notice at [273] and [307].
It is again difficult to see how it could seriously be contended that Deutsche Bank does not know the case it has to meet in respect of this aspect of the prosecution case. More importantly, for present purposes, for essentially the same reasons as those given in the context of the charges against Citigroup, I do not consider that the indictment has to contain the names of all of the mostly more junior employees or representatives who it is alleged carried out tasks relating to the trading, or monitoring of trading, in ANZ shares on the basis of instructions or directions emanating or originating from Mr Ormaechea or Mr Richardson. It suffices that those employees or representatives are named, to the extent they are able to be named, in the Amended Notice. The requirements of reasonable particularity in an indictment do not require otherwise. Nor, in the particular circumstances of this case, does r 3.01(6) of the Rules, as was contended by some of the accused.
I am equally unpersuaded that it is a material defect for the indictment to refer to Deutsche Bank’s “related entities” without naming those entities. The Amended Notice refers to one relevant related entity known by the prosecutor – Deutsche Securities Australia Limited. I do not consider that the indictment is defective because that entity is not specifically referred to in the indictment, though if, so far as the prosecutor is aware, no other entity related to Deutsche Bank was responsible for any of the relevant trading, it is difficult to see why the prosecutor would not simply refer to that entity in the particulars in the indictment.
As for the complaint concerning the particulars of the conduct engaged in by Mr Ormaechea or Mr Richardson, or those acting on the basis of instructions or directions which emanated from them, it may again be accepted that the particulars could be improved, perhaps again by making it clear that it is alleged that the conduct that was engaged in by those persons was not only intended to restrict or limit the trading in ANZ shares as particularised, but that the conduct ensured that the trading was so limited or restricted: see Amended Notice at [271]. Again, however, the particularisation of the charges is a matter for the prosecutor and the question for the Court is not whether the particulars are perfect, or could be improved, but whether they are defective through want of reasonable particularity. While the clarity of the particulars of conduct could again perhaps be improved, I do not consider that the level of particularity in the indictment is such as to amount to a defect which would warrant the quashing of the indictment.
It should finally be noted that the individual accused, Messrs Tuchman, McLean, Ormaechea and Richardson, or at least some of them, raised the same or similar complaints about the particulars of conduct in the ‘gave effect to’ accessorial charges against them. For the reasons just given, those complaints also have no merit, at least to the extent that they do not establish any defect in the charges against them. Other arguments about the particulars of conduct made by the individual accused are considered later in the context of the charges against them.
Conclusion in relation to the charges against Citigroup and Deutsche Bank
There are some formal defects in each of the statements of offences or charges against Citigroup and Deutsche Bank. The particulars in the charges fail to properly identify the cartel provision and the particulars of knowledge are deficient or inadequate. While the particulars of conduct are not ideal and could perhaps be improved, I am not persuaded that they could be said to constitute formal defects on the face of the indictment which could justify the quashing of these counts.
DEFECTS IN THE CHARGES AGAINST MESSRS TUCHMAN, MCLEAN, ORMAECHEA AND RICHARDSON
To understand or appreciate the alleged defects in the charges against Messrs Tuchman, McLean, Ormaechea and Richardson, it is again necessary to first provide some details of those charges as they currently appear in the August Indictment.
Each of the charges against Messrs Tuchman, McLean, Ormaechea and Richardson is a charge that they are “taken to have contravened” the cartel offence provisions in either s 44ZZRF(1) or s 44ZZRG(1) of the C&C Act by reason of s 79(1)(c) of the C&C Act because they were “knowingly concerned in, or party to” either Citigroup or Deutsche Bank’s contraventions of those cartel provisions, as the case may be. It is convenient to collectively refer to the charges against Messrs Tuchman, McLean, Ormaechea and Richardson as the accessorial charges (or accessorial offences) and the charges against Citigroup and Deutsche Bank as the principal charges (or principal contraventions or offences).
Charge 3 in the August Indictment, which is a charge that Mr Tuchman was knowingly concerned in, or party to, the contravention of s 44ZZRF(1) of the C&C Act by Citigroup, is pleaded and particularised in the following terms:
Charge 3 The Prosecutor charges that between 7 August 2015 and 8 August 2015 at Sydney in the State of New South Wales and elsewhere, ITAY TUCHMAN was knowingly concerned in, or a party to, the contravention by Citigroup Global Markets Australia Pty Limited of a cartel offence provision namely section 44ZZRF(1) of the Competition and Consumer Act 2010 (Cth), in that Citigroup Global Markets Australia Pty Limited intentionally made an arrangement or arrived at an understanding with Deutsche Bank Aktiengesellschaft and J.P. Morgan Australia Limited in relation to the supply of Australia and New Zealand Banking Group Limited shares, that contained a cartel provision, knowing or believing that arrangement or understanding contained a cartel provision.
Contrary to section 44ZZRF(1) with section 79(1)(c) of the Competition and Consumer Act 2010 (Cth).
Particulars of the Arrangement or Understanding
The arrangement or understanding referred to in Charge 3 is the 5-7% Understanding.
The 5-7% Understanding Particulars are repeated.
Particulars of Conduct
Itay Tuchman was knowingly concerned in, or a party to, the contravention by Citigroup Global Markets Australia Pty Limited by reason of:
(1)his role as a senior officer of Citigroup Global Markets Australia Pty Limited and his role and responsibilities in relation to the sale and offering for sale of ANZ Shares; and
(2)his participation in discussions and communications on 7 and 8 August 2015 with officers, employees or representatives of one or more of the Investment Banks and/or Australia and New Zealand Banking Group Limited, during which trading in ANZ Shares was discussed including when the 5-7% Understanding was made or arrived at.
Itay Tuchman:
(1)intended to participate in Citigroup Global Markets Australia Pty Limited making the 5-7% Understanding; and
(2)knew the facts which meant that the 5-7% Understanding contained a cartel provision.
Particulars of the Cartel Provision
Supply of Shares Purpose
The Supply of Shares Purpose Particulars are repeated.
Competition Condition
The Competition Condition Particulars are repeated.
Charge 4, which is a charge that Mr McLean was knowingly concerned in, or party to, the contravention of s 44ZZRF(1) of the C&C Act by Citigroup, is in effectively identical terms to charge 3, save that Mr McLean is named rather than Mr Tuchman. Charges 16 and 17 are the alternative charges against Mr Tuchman and Mr McLean based on the alternative particulars of the cartel provision. They are in the same terms as charges 3 and 4, save that the Particulars of the Cartel Provision state that the “Price of Shares Purpose Particulars are repeated”, as opposed to the Supply of Shares Purpose Particulars.
The equivalent charges against Mr Ormaechea and Mr Richardson are charges 5 and 6 (and 18 and 19 in the alternative). Charge 5, which is against Mr Ormaechea, is in the following terms:
Charge 5 The Prosecutor charges that between 7 August 2015 and 8 August 2015 at Sydney in the State of New South Wales and elsewhere, MICHAEL RENE ORMAECHEA was knowingly concerned in, or a party to, the contravention by Deutsche Bank Aktiengesellschaft of a cartel offence provision namely section 44ZZRF(1) of the Competition and Consumer Act 2010 (Cth), in that Deutsche Bank Aktiengesellschaft intentionally made an arrangement or arrived at an understanding with Citigroup Global Markets Australia Pty Limited and J.P. Morgan Australia Limited in relation to the supply of Australia and New Zealand Banking Group Limited shares, that contained a cartel provision, knowing or believing that arrangement or understanding contained a cartel provision.
Contrary to section 44ZZRF(1) with section 79(1)(c) of the Competition and Consumer Act 2010 (Cth).
Particulars of the Arrangement or Understanding
The arrangement or understanding referred to in Charge 5 is the 5-7% Understanding.
The 5-7% Understanding Particulars are repeated.
Particulars of Conduct
Michael Ormaechea was knowingly concerned in, or a party to, the contravention by Deutsche Bank Aktiengesellschaft by reason of:
(1)his role as a senior officer of Deutsche Bank Aktiengesellschaft and his role and responsibilities in relation to the sale and offering for sale of ANZ shares; and
(2)his participation in discussions and communications on 7 and 8 August 2015 with officers, employees or representatives of one or more of the Investment Banks and/or Australia and New Zealand Banking Group Limited, during which trading in ANZ Shares was discussed including when the 5-7% Understanding was made or arrived at.
Michael Ormaechea:
(1)intended to participate in Deutsche Bank Aktiengesellschaft making the 5-7% Understanding; and
(2)knew the facts which meant that the 5-7% Understanding contained a cartel provision.
Particulars of the Cartel Provision
Supply of Shares Purpose
The Supply of Shares Purpose Particulars are repeated.
Competition Condition
The Competition Condition Particulars are repeated.
Charge 6 against Mr Richardson is in the same terms as charge 5, save that Mr Richardson is named, rather than Mr Ormaechea. Charges 18 and 19 are in the same terms as charges 5 and 6 respectively, other than that the former charges refer to the Price of Shares Purpose Particulars in the Particulars of the Cartel Provision.
Charge 9 is a charge that Mr Tuchman was knowingly concerned in, or party to, the contravention of s 44ZZRG(1) of the C&C Act by Citigroup. It is pleaded and particularised in the August Indictment in the following terms:
Charge 9 The Prosecutor charges that between 8 August 2015 and 11 September 2015 at Sydney in the State of New South Wales and elsewhere, ITAY TUCHMAN was knowingly concerned in, or a party to the contravention by Citigroup Global Markets Australia Pty Limited of a cartel offence provision namely section 44ZZRG(1) of the Competition and Consumer Act 2010 (Cth), in that Citigroup Global Markets Australia Pty Limited intentionally gave effect to a cartel provision contained in an arrangement or understanding with Deutsche Bank Aktiengesellschaft and J.P. Morgan Australia Limited in relation to the supply of Australia and New Zealand Banking Group Limited shares, knowing or believing that arrangement or understanding contained a cartel provision.
Contrary to section 44ZZRG(1) with section 79(1)(c) of the Competition and Consumer Act 2010 (Cth).
Particulars of the Arrangement or Understanding
The arrangement or understanding referred to in Charge 9 is the 5-7% Understanding.
The 5-7% Understanding Particulars are repeated.
Particulars of Conduct
Itay Tuchman was knowingly concerned in, or a party to, the contravention by Citigroup Global Markets Australia Pty Limited between 8 August 2015 and 11 September 2015 by assisting to ensure that Citigroup Global Markets Australia Pty Limited and its related entities would restrict or limit their daily trading in ANZ Shares between 11 August 2015 and 11 September 2015 to no more than 7% of the average daily volume of the trade in ANZ Shares (with the aim of not exceeding 5%).
Itay Tuchman:
(1)knew the facts which meant that the 5-7% Understanding contained a cartel provision; and
(2)intended to participate in Citigroup Global Markets Australia Pty Limited giving effect to the cartel provision.
Particulars of the Cartel Provision
Supply of Shares Purpose
The Supply of Shares Purpose Particulars are repeated.
Competition Condition
The Competition Condition Particulars are repeated.
Charge 10, which is a charge that Mr McLean was knowingly concerned in, or party to, the contravention of s 44ZZRG(1) of the C&C Act by Citigroup, is in effectively identical terms to charge 9, save that Mr McLean is named rather than Mr Tuchman. Charges 22 and 23 are the alternative charges against Mr Tuchman and Mr McLean based on the Price of Shares Purpose Particulars. They are otherwise in the same terms as charges 9 and 10.
The equivalent s 44ZZRG(1) charges against Mr Ormaechea and Mr Richardson are charges 11 and 12 (and 24 and 25 in the alternative). Charge 11, which is against Mr Ormaechea, is in the following terms:
Charge 11 The Prosecutor charges that between 8 August 2015 and 30 September 2015 at Sydney in the State of New South Wales and elsewhere, MICHAEL RENE ORMAECHEA was knowingly concerned in, or a party to the contravention by Deutsche Bank Aktiengesellschaft of a cartel offence provision namely section 44ZZRG(1) of the Competition and Consumer Act 2010 (Cth), in that Deutsche Bank Aktiengesellschaft intentionally gave effect to a cartel provision contained in an arrangement or understanding with Citigroup Global Markets Australia Pty Limited and J.P. Morgan Australia Limited in relation to the supply of Australia and New Zealand Banking Group Limited shares, knowing or believing that arrangement or understanding contained a cartel provision.
Contrary to section 44ZZRG(1) with section 79(1)(c) of the Competition and Consumer Act 2010 (Cth).
Particulars of the Arrangement or Understanding
The arrangement or understanding referred to in Charge 11 is the 5-7% Understanding:
The 5-7% Understanding Particulars are repeated.
Particulars of Conduct
Michael Ormaechea was knowingly concerned in, or a party to, the contravention by Deutsche Bank Aktiengesellschaft between 8 August 2015 and 30 September 2015 by assisting to ensure that Deutsche Bank Aktiengesellschaft and its related entities would restrict or limit their daily trading in ANZ Shares between 11 August 2015 and 30 September 2015 to no more than 7% of the average daily volume of the trade in ANZ Shares (with the aim of not exceeding 5%).
Michael Ormaechea:
(1)knew the facts which meant that the 5-7% Understanding contained a cartel provision; and
(2)intended to participate in Deutsche Bank Aktiengesellschaft giving effect to the cartel provision.
Particulars of the Cartel Provision
Supply of Shares Purpose
The Supply of Shares Purpose Particulars are repeated.
Competition Condition
The Competition Condition Particulars are repeated.
Charge 12 against Mr Richardson is in the same terms as charge 11, save that Mr Richardson is named, rather than Mr Ormaechea. Charges 24 and 25 are in the same terms as charges 11 and 12 respectively, other than that they refer to the Price of Shares Purpose Particulars in the Particulars of the Cartel Provision.
The alleged defects in the charges against Messrs Tuchman, McLean, Ormaechea and Richardson
Messrs Tuchman, McLean, Ormaechea and Richardson each contended, in effect, that the deficiencies in the particularisation of the charges against Citigroup and Deutsche Bank carried through to and infected the charges against them. Those alleged deficiencies have already been addressed.
Messrs Tuchman, McLean, Ormaechea and Richardson also contended that there were a number of discrete or specific defects in the charges against them as particularised in the August Indictment. Those alleged defects were said to be, in summary, that: first, the accessorial charges were required to, but did not, include particulars of the conduct and state of mind of Citigroup and Deutsche Bank which constituted the principal offences by those corporations; second, the charges do not plead that the individual accused knew all of the facts that constituted or gave rise to the offences by Citigroup and Deutsche Bank; and third, the particulars of the conduct which is alleged to have made them knowingly concerned in, or party to, the principal offences were deficient in various respects.
Need to include particulars of the principal offences
The individual accused contended that the charges against them were required to include particulars of the principal offences by either Citigroup or Deutsche Bank in which they are alleged to have been knowingly concerned or party to. It was noted, in that regard, that charge 13, which is the charge which alleges that ANZ aided, abetted, counselled or procured J.P. Morgan to contravene s 44ZZRG(1) of the C&C Act, included detailed particulars of the alleged contravention by J.P. Morgan. It was submitted that similar particulars of the principal charges should be included in all the accessorial counts.
The prosecutor appeared to concede that the accessorial charges should contain some particulars of the relevant principal contravention or offence. The prosecutor did not, however, agree that the accessorial charges should include full particulars of the principal contraventions. Rather, it was proposed that the accessorial charges, other than charges 13 and 26, include particulars of the relevant principal contraventions by providing a cross-reference to the charge which includes those particulars. For example, in the case of charge 3 in the Proposed Indictment, which is the charge alleging that Mr Tuchman was knowingly concerned in, or party to, the contravention of s 44ZZRF(1) of the C&C Act by Citigroup, the prosecutor proposed that the charge include a subheading “Particulars of Citigroup Global Markets Australia Pty Limited’s Contravention” under which it is stated “Refer to Charge 1”.
That is, in my view, a satisfactory means by which particulars of the principal contravention may be included in the accessorial charges other than charges 13 and 26. It would, in all the circumstances, be unnecessary, repetitive and potentially confusing to require each of the accessorial counts to include full particulars of the principal contravention to which they relate. That would, for example, require charge 3 to essentially include all the particulars of charge 1, as well as particulars of Mr Tuchman’s knowing concern in that offence. The indictment is already very lengthy and the particulars provided in relation to each of the charges are already comparatively extensive. The cross-referencing method of providing the relevant particulars of the principal contraventions in the Proposed Indictment is appropriate and sufficient to meet the requirement of reasonable particularity in the particular and somewhat unique circumstances of this case. It might, however, be preferable to say something a little more helpful and illuminating than “Refer to Charge 1”. It would, for example, be a bit clearer if the particulars said something like: “The facts relating to the contravention by Citigroup are set out in Charge 1”.
Knowledge of the facts that gave rise to the principal offences
As was made clear in Judgment No 1, an essential element of each of the accessorial offences is that the accused knew “the essential facts constituting the particular contravention in question”: Yorke v Lucas (1985) 158 CLR 661 at 670; see Judgment No 1 at [28] and [34]. That is in addition to the element that the accused, by their conduct, participated in or associated themselves with the principal contravention.
The accused contended that the accessorial counts do not contain proper or adequate particulars of the knowledge element. There is some merit in that contention.
As has been seen, the accessorial charges in relation to the s 44ZZRF(1) contraventions include particulars to the effect that the accused intended to participate in the contravention and “knew the facts which meant that the 5-7% Understanding contained a cartel provision”. Charge 3, for example, alleges that Mr Tuchman:
(1)intended to participate in Citigroup Global Markets Australia Pty Limited making the 5-7% Understanding; and
(2)knew the facts which meant that the 5-7% Understanding contained a cartel provision.
Similarly, the accessorial counts in relation to the s 44ZZRG(1) contraventions include particulars to the effect that the accused “knew the facts which meant that the 5-7% Understanding contained a cartel provision” and intended to participate in the contravention. Charge 9, for example, alleges that Mr Tuchman:
(1)knew the facts which meant that the 5-7% Understanding contained a cartel provision; and
(2)intended to participate in Citigroup Global Markets Australia Pty Limited giving effect to the cartel provision.
As discussed earlier in the context of the charges against Citigroup and Deutsche Bank, the use of the shorthand particular “knew the facts which meant that the 5-7% Understanding contained a cartel provision” is potentially inadequate or problematic and should be revisited. Even putting that issue to one side, there is an additional problem with this formulation of the particulars in the context of the accessorial charges. The difficulty is that, as the accused submitted, it is not sufficient for the charges to limit the particulars of knowledge to knowledge of the facts which meant that the 5-7% Understanding contained a cartel provision. To be knowingly concerned in, or party to, the principal contraventions, the accused must be shown to have known or believed all of the essential facts of those contraventions, not just the fact that the relevant arrangement or understanding contained a cartel provision. The essential facts may include facts relating to the state of mind (in this case, knowledge or belief, and intention) of the principal offender: Edwards v The Queen (1992) 173 CLR 653 at 657-658; Stokes v The Queen (1990) 51 A Crim R 25 at 38 (Stokes & Difford); Moustafa v The Queen (2014) 43 VR 418; [2014] VSCA 270 at [95]-[96].
In the case of the s 44ZZRF(1) accessorial contraventions, the essential facts constituting the principal contraventions are, in summary: first, that the relevant principal (either Citigroup or Deutsche Bank) made the relevant arrangement, or arrived at the relevant understanding (the 5-7% Understanding); second, that the relevant principal intended to make or arrive at the 5-7% Understanding; third, that the 5-7% Understanding contained a cartel provision (the Cartel Provision); and fourth, that the principal knew or believed that the 5-7% Understanding contained a cartel provision.
In the case of the s 44ZZRG(1) accessorial contraventions, the essential facts constituting the principal contraventions are, in summary: first, that an arrangement or understanding (the 5-7% Understanding) containing a cartel provision existed; second, that the relevant principal (either Citigroup or Deutsche Bank) knew or believed that the 5-7% Understanding contained a cartel provision; third, the principal gave effect to the cartel provision; and fourth, that the principal intended to give effect to the cartel provision.
The particulars of knowledge in the accessorial charges should, in one way or another, state that the accused knew all of the essential facts constituting the principal contraventions, including those that relate to the state of mind of the principal offender. The particulars of the accessorial charges in the August Indictment do not do so.
The prosecutor appeared to concede that the particulars of knowledge in the accessorial charges in the August Indictment were deficient in that respect, or at least that the particulars should be supplemented. To meet this complaint by the accused, the prosecutor proposed, in the Proposed Indictment, that additional words be added to the existing particulars of knowledge. In the case of charge 3, for example, the prosecutor suggested that the particulars could be reframed as follows (the underlined portions reflecting the added words):
Itay Tuchman:
(1)intended to participate in Citigroup Global Markets Australia Pty Limited making the 5-7% Understanding; and
(2)knew the facts which meant that Citigroup Global Markets Australia Pty Limited made the 5-7% Understanding which contained a cartel provision.
In the case of charge 9, the prosecutor suggested that the particulars could be reframed as follows (the underlined portions again reflecting the added words and the strikethrough reflecting the words to be deleted from the current particulars):
Itay Tuchman:
(1)knew the facts which meant that Citigroup Global Markets Australia Pty Limited was giving effect to the cartel provision in the 5-7% Understanding
contained a cartel provision; and(2)intended to participate in Citigroup Global Markets Australia Pty Limited giving effect to the cartel provision.
The pre-trial witness examinations were justified, in large part, as being in aid of a foreshadowed application by the accused that the criminal proceedings against them be permanently stayed. The basis of that application is likely to be that the continuation of the proceedings would be unfair and unjust as a result of the manner in which ACCC investigators interviewed and took witness statements from indemnified officers of J.P. Morgan. It is likely to be submitted that the evidence of those witnesses has been irreparably tarnished. The relevance of noting this for present purposes is that the hearing and determination of these foreshadowed applications must again be accommodated prior to the proposed commencement of the trial before a jury in May next year.
It may be accepted that the proper particularisation of the charges in this matter is no mean feat. The requirement for a statement of an offence in an indictment to describe “concisely and with reasonable particularity, the nature of the alleged offence” (r 3.01(4)(c) of the Rules) would appear, at first blush at least, to be a fairly straightforward requirement. Likewise, the explanation or elaboration given in the authorities in relation to the requirement of reasonable particularity does not seem to impose a particularly onerous or difficult obligation. It does not appear to be a particularly tall order to “condescend to identifying the essential factual ingredients of the actual offence” (John L at 520) or to identify “each essential factual element” of the offence in question: Lodhi v The Queen (2006) 199 FLR 303; [2006] NSWCCA 121 at [82].
The difficulty, however, is that most of the cases from which those general statements concerning the requirement of reasonable particularity have been extracted involve fairly straightforward offences which involve a few simple elements and not particularly complex facts. This case is anything but simple or straightforward. Even putting to one side the relatively complex factual matrix upon which the prosecution case is based, the offences with which the accused have been charged are highly complex. Indeed, it is difficult to think of any more complex and difficult offences than the ones in question in this case.
Those responsible for drafting the cartel offence provisions in the C&C Act – none of whom could possibly have ever set foot in a criminal trial court before – appear to have approached the drafting task as if it were akin to producing a cryptic crossword. The offence provisions, when read with the extensive definitions of the terms used in them, are prolix, convoluted and labyrinthine. When coupled with the general principles of criminal responsibility, including the extensions of criminal responsibility in Ch 2 of the Criminal Code, the complexity of the offences is multiplied. By the time the maze of provisions is worked through, it is very easy to lose sight of exactly what conduct the offence provisions are intended to bring to account and punish.
It is, in all the circumstances, perhaps not difficult to appreciate why the prosecutor appears to have struggled to formulate the charges in this matter. Given the complexity of the elements of the offences, and the relatively complex factual allegations, compliance with the requirements of reasonable particularity is easier said than done. The inclusion of proper particulars in the indictment in the particular circumstances of this case will also undoubtedly mean that the indictment will be far longer and far more detailed than is typically the case, even in complex white-collar prosecutions: cf Judgment No 1 at [312]. The fact remains, however, that the prosecutor has had over three years in which to consider the appropriate way in which to plead and particularise the charges. The prosecutor has also had the benefit of countless rounds of correspondence and, more significantly, a judgment of this Court which provided detailed guidance as to the elements of the offences in question and what needs to be included in the charges to satisfy the requirement of reasonable particularity.
More significantly, the fact remains that if this matter is to go to trial, the prosecutor must be able to explain its case to the jury in comprehensible terms. The starting point in that regard is the indictment. If the prosecutor cannot articulate the prosecution case against the accused in clear and comprehensible terms in the indictment, it is difficult to see how the prosecutor will be able to explain the case to a jury.
The critical question in this case is whether the prosecutor should be given another opportunity to file an indictment that both complies with the Rules and satisfies the common law requirements for a valid charge or statement of offence in an indictment. The only real alternative is for the indictment to be quashed and for the accused to be discharged. If that course is taken, the accused would be released from Court without any further action being taken against them. That would undoubtedly be a drastic step given the seriousness of the charges.
Relevant principles
The parties did not advance any detailed submissions in respect of the principles that should be applied in considering this question.
It was submitted, on Mr Moscati’s behalf, that the Court should have regard to the principles considered by the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175;[2009] HCA 27. Reliance was placed, in particular, on the observation by the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) at [112] that “[p]arties have choices as to what claims are to be made and how they are to be framed” but that “limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced”.
While some of the principles and considerations that apply in the civil context may not be readily transferrable to the criminal context, it may certainly be accepted that limits are and must be placed upon the ability of a prosecutor to change the pleading or particularisation of an indictment, particularly if the proceedings are well advanced. The question in this case, in a sense, is whether that limit has been reached.
It would appear to me that the determination of the appropriate relief in the particular circumstances of this case involves a balancing exercise. The object of that balancing exercise is to ascertain where the interests of justice lie.
On one side of the scales is the interests of the accused and the prejudice they will or may suffer in the event that the prosecutor is given another opportunity to formulate the charges against them. The charges have been hanging over their heads for a considerable period of time. The stress and anxiety that must generate cannot be underestimated. The trial date is also fast approaching and it may be inferred that the preparation by the accused for the trial has been stymied somewhat by the interlocutory applications concerning the indictment. That said, there was no specific evidence concerning any material prejudice to the accused in terms of their preparation for trial or otherwise. As costs are generally not awarded in criminal cases, however, the accused will most likely not be able to be compensated for the costs that they inevitably incurred in pursuing the interlocutory applications. No means or method by which they could be effectively compensated was put forward.
On the other side of the scales is the maintenance of public confidence in the administration of justice and in particular the “substantial public interest of the community in having those who are charged with criminal offences brought to trial”: Dupas v The Queen (2010) 241 CLR 237; [2010] HCA 20 at [37]; see also Moti v The Queen (2011) 245 CLR 456; [2011] HCA 50 at [11]. In some respects, quashing the indictment and discharging the accused, at least in the present circumstances of this case, would be akin the grant of a permanent stay which, as was noted in Dupas (at [37]) is “tantamount to a continuing immunity from prosecution”.
In Jago v District Court of New South Wales (1989) 168 CLR 23, Mason CJ said (at 33), in the context of a court’s power to grant a permanent stay, that the “touchstone in every case is fairness” and that the “test of fairness which must be applied involves a balancing process, for the interests of the accused cannot be considered in isolation without regard to the community’s right to expect that persons charged with criminal offences are brought to trial”. Jago is also authority for the proposition that a permanent stay of prosecution is only ever to be granted in rare and exceptional circumstances: at 31 and 34 (Mason CJ), 60 (Deane J) and 76 (Gaudron J); see also R v Glennon (1992) 173 CLR 592 at 605; Dupas at [33]-[35] and Strickland v Commonwealth Director of Public Prosecutions (2018) 266 CLR 325; [2018] HCA 53 at [62]. That is not to say that the same test applies to the question whether the accused should be discharged in the context of this case. It does, however, indicate the significant weight that should be given to the maintenance of public confidence in the administration of justice and public interest in having those who are charged with criminal offences brought to trial.
The question must also be considered in light of the “overarching purpose” of the Rules, which is “to facilitate the fair, efficient and timely determination of criminal proceedings in the Court”: r 1.04(1) of the Rules. The overarching purpose includes, relevantly, the “efficient use of the judicial and administrative resources available for the purposes of the Court”; the “efficient use of legal and other resources available to the parties to criminal proceedings”; the “fair, efficient and timely disposal of the Court’s overall criminal caseload”; and “as far as possible, all preliminary issues … are heard and adjudicated before the start of a trial”: r 1.04(2)(a)-(d) of the Rules.
Appropriate relief in the case of Citigroup, Deutsche Bank and Messrs Tuchman, McLean, Ormaechea and Richardson
The relevant considerations in determining the appropriate relief in the case of Citigroup, Deutsche Bank and Messrs Tuchman, McLean, Ormaechea and Richardson are as follows.
First, the prosecutor has already been given one opportunity by the Court to correct deficiencies in the indictment. That also occurred in the context of a long history of complaints by the accused at the committal stage concerning the inadequate or defective particularisation of the charges against them. As was noted earlier, limits must be placed on the ability of a prosecutor to change or reframe the charges in an indictment. This is a consideration that weighs against giving the prosecutor another opportunity to file a properly particularised indictment. The weight to be given to this consideration must, however, be tempered to an extent having regard to the relative difficulty involved in properly particularising the complex offences involved in this matter.
Second, while the defects and deficiencies in the indictment under consideration in this judgment are important, they are nonetheless for the most part fairly technical. Perhaps more significantly, the defects or deficiencies should be able to be readily rectified. They are by no means intractable.
The defects that were found to exist in Judgment No 1 were largely a product of the fact that the prosecutor appears to have erroneously considered that it was unnecessary to include any real details of the factual allegations against the accused beyond the words of the provisions creating the offences. The defects found to exist in the indictment presently under consideration are the result of an imperfect or inadequate attempt by the prosecutor to describe each of the essential factual elements of the offences in question. As noted earlier, that may largely be a product of the complexity of the offences in question.
The fact that the defects in the indictment are for the most part fairly technical and should be able to be remedied is a consideration which weighs in favour of permitting the prosecutor another opportunity to file an indictment which complies with the Rules and requirements for a valid indictment.
Third, there is nothing concrete to suggest that the accused will suffer any significant or ongoing prejudice should the prosecutor be given another opportunity to remedy the identified defects or deficiencies in the indictment. It could no doubt be inferred that the interlocutory applications concerning the indictment have been a tax on the “legal and other resources available to” the accused. While there was no specific evidence adduced in support of these applications on that point, the accused undoubtedly incurred significant legal costs and expended considerable time in mounting the successful interlocutory applications. Importantly, however, there is no evidence to suggest that giving the prosecutor another opportunity to file a complying indictment will result in any delay to the commencement of the trial, or will give rise to any other material or ongoing unfairness or prejudice to the accused in the conduct of their defence.
As noted earlier, the applications by each of the accused in the nature of a demurrer to the indictment have been delayed from November this year to February next year, largely as a result of the interlocutory applications presently under consideration. It is, however, unlikely that the postponement of those applications will delay the commencement of the trial. If the applications are successful, that will effectively be the end of the matter. If they are not, subject to appeals or any further applications, there is no reason to think that the trial will not be able to commence before a jury in May next year. As noted earlier, the witness examinations pursuant to s 23CQ of the FCA Act will now be conducted in November in lieu of the demurrer applications.
It should also be noted, in this context, that while the particularisation of the charges in the indictment has been found to be defective, it is doubtful that it could seriously be contended that the accused, save perhaps for Mr Moscati and ANZ, do not know the case that they have to meet. The prosecutor has been ordered to and has filed detailed particulars of the prosecution case pursuant to s 23CE(a) of the FCA Act. The defects found to exist in Judgment No 1 were largely the product of the prosecutor failing to distil and include in the indictment the essential factual allegations contained in the Notice. The defects found to exist in this judgment could fairly be characterised as an imperfect attempt to remedy those deficiencies. The point remains, however, that for the most part the prosecution case has been separately outlined in detail. The accused are unlikely to be taken by surprise if the prosecutor is permitted to remedy the mostly technical deficiencies in the particulars in the indictment. While there could be no doubt that the accused believe that the prosecution case against them as articulated in the Amended Notice is deficient or doomed to fail, that is another issue altogether.
The absence of any significant or ongoing prejudice to the accused is a significant factor which weighs heavily in favour of permitting the prosecutor to file a new indictment.
Fourth, the charges against the accused are undoubtedly serious criminal charges. As the authorities referred to earlier demonstrate, there is a significant public interest in those charges being heard and determined by a trial by jury, as opposed to being summarily terminated as a result of largely technical defects in the indictment. That is particularly the case in circumstances where those defects should be able to be rectified without causing any prejudice to the accused. This is again a consideration which weighs heavily against discharging the accused.
In all the circumstances, in the case of Citigroup, Deutsche Bank and Messrs Tuchman, McLean, Ormaechea and Richardson, I consider that the balance tips in favour of permitting the prosecutor another opportunity to rectify the defects found to be present in the indictment as filed. The appropriate order in the case of those accused is similar to the order made Judgment No 1. The prosecutor will be ordered to file a new indictment pursuant to r 3.07(3) of the Rules which remedies the defects and deficiencies which have been identified in these reasons.
Relief in respect of Mr Moscati and ANZ
The circumstances relating to Mr Moscati and ANZ differ to the circumstances relating to the other accused in one important respect. That difference is that there remains a degree of uncertainty as to the precise nature of the prosecution case against them.
There has undoubtedly been a material shift in the prosecution case against Mr Moscati and ANZ. As noted earlier, ANZ and Mr Moscati were both committed for trial on four charges: two charges of being knowingly concerned in contraventions of s 44ZZRF(1) by Citigroup, Deutsche Bank and J.P. Morgan and two charges of being knowingly concerned in contraventions of s 44ZZRG(1) by Citigroup, Deutsche Bank and J.P. Morgan. Those charges were particularised in relevantly identical terms to the charges against the other accused.
The indictment first filed in this Court also included two charges (and two alterative charges) against ANZ and Mr Moscati of being knowingly concerned in contraventions of s 44ZZRF(1) and s 44ZZRG(1) by Citigroup, Deutsche Bank and J.P. Morgan. Those charges largely mirrored the charges upon which ANZ and Mr Moscati had been committed for trial. That indictment also included a charge (and an alternative charge) which alleged, for the first time, that Mr Moscati and ANZ had aided, abetted, counselled or procured a contravention of s 44ZZRG(1) by J.P. Morgan.
The August Indictment includes only one charge (and one alternative charge) against ANZ and Mr Moscati. Those charges allege that Mr Moscati and ANZ aided, abetted, counselled or procured a contravention of s 44ZZRG(1) by J.P. Morgan. The charges upon which ANZ and Mr Moscati were committed for trial – those alleging that they were knowingly concerned in contraventions of s 44ZZRF(1) and s 44ZZRG(1) by Citigroup, Deutsche Bank and J.P. Morgan – have effectively been abandoned. More significantly, as has already been discussed in detail earlier in these reasons, the pleading and particularisation of those charges in the August Indictment indicate a significant shift in the prosecution case against ANZ and Mr Moscati; that shift being that the prosecutor no longer appears to allege that Mr Moscati and ANZ knew the precise details of the 5-7% Understanding or the cartel provision allegedly contained within it. The shift is even more pronounced in the Proposed Indictment.
The central allegation against ANZ and Mr Moscati now is that they intended to aid, abet, counsel or procure an offence “of the type” J.P. Morgan committed. The problem is that the prosecutor has effectively had three attempts at particularising the charges against ANZ and Mr Moscati. Each of them has been a failure. The drafting of the last version – the version in the Proposed Indictment – appears to be particularly hurried and ill thought-out. The nature of the contravention that Mr Moscati and ANZ are alleged to have intended to aid, abet, counsel or procure and how it is said to be “of the type” committed by J.P. Morgan remains somewhat unclear.
ANZ’s and Mr Moscati’s trenchant complaints concerning the prosecutor’s conduct in relation to the pleading and particularisation of the charges against them are for the most part well founded. So too are their complaints concerning the adequacy of the particulars of the charges against them, both in the August Indictment and the Proposed Indictment. The defects in the charges against ANZ and Mr Moscati are undoubtedly more substantive than the defects in the charges against the other accused.
ANZ and Mr Moscati went further in their criticisms of the prosecution case. They submitted, by reference to those parts of the Amended Notice which outline the factual basis of the prosecution case against them, that the charges are incoherent. The difficulty with those submissions, however, is that they really stray into the domain of an application in the nature of a demurrer, as opposed to an application concerning formal defects in the indictment. There is nothing to prevent ANZ and Mr Moscati from advancing those submissions in support of their foreshadowed demurrer applications. Those applications, however, cannot be heard or determined until the terms of the indictment are finalised.
The question of the appropriate relief in the case of ANZ and Mr Moscati is more finely balanced than in the case of the other accused. Ultimately, however, I am not persuaded that the appropriate relief at this stage is to quash the charges and discharge them. In all the circumstances, the balance tips in favour of giving the prosecutor at least one further opportunity to properly plead and particularise the charges against ANZ and Mr Moscati. The considerations which lead me to that conclusion are as follows.
First, for the reasons given earlier, I am not persuaded, at least at this stage, that the prosecutor will not be able to properly plead and particularise a charge against ANZ and Mr Moscati based on the allegation that they intended that their conduct would aid, abet, counsel or procure the commission of an offence (including its fault elements) of the type committed by J.P. Morgan. Careful attention will, however, have to be given to the particulars of what ANZ and Mr Moscati knew and intended in that regard.
Second, the submissions by ANZ and Mr Moscati concerning the incoherency of the prosecution case against them are best considered in the context of a properly particularised charge, if that is able to be achieved. Perhaps more significantly, those arguments are best made and considered in the context of the foreshadowed applications in the nature of a demurrer.
Third, for essentially the same reasons as those given earlier in the context of the other accused, I am not persuaded that providing the prosecutor with a further opportunity to plead and particularise its case against ANZ and Mr Moscati will cause any irremediable or ongoing prejudice to ANZ and Mr Moscati. The prosecutor will be required to file a new indictment within a fairly short timeframe. I do not consider that giving the prosecutor a further opportunity to file an indictment with properly particularised charges against ANZ and Mr Moscati will imperil the other pre-trial applications or the trial date next year, should the other applications be unsuccessful.
Fourth, I again consider that significant weight should be given to the substantial public interest in having those who are charged with criminal offences brought to trial. While it must be accepted that the prosecutor’s apparent inability, up to this point, to properly particularise the charges against ANZ and Mr Moscati is likely to have given rise to a degree of unfairness to them, that unfairness cannot be considered in isolation.
In all the circumstances, I am satisfied that the interests of justice favour allowing the prosecutor another attempt at properly pleading and particularising the charges against ANZ and Mr Moscati. The appropriate order in respect of ANZ and Mr Moscati is essentially the same as the order that will be made in respect of the other accused.
CONCLUSION AND DISPOSITION
There are formal defects apparent on the face of the indictment. It is not, however, appropriate to quash the indictment and discharge the accused.
The prosecutor will be ordered to file, within 14 days of the date of this judgment, a new indictment pursuant to r 3.07(3) of the Rules which remedies the defects and deficiencies in the August Indictment which are identified in the reasons for judgment.
Given the unfortunate history of the matter to date, and despite what would otherwise be allowed by s 23BH of the FCA Act in terms of the amendment of an indictment, it is also appropriate to order that the prosecutor not be permitted to file any new or amended indictment, save for the indictment filed in compliance with this judgment, without the prior leave of the Court or the written consent of all of the accused.
POSTSCRIPT
Shortly prior to the handing down of this judgment, and after the reasons for judgment had effectively been finalised, the Court was notified that the prosecutor no longer intends to proceed with the prosecution of Mr Moscati and ANZ. The reasons for judgment were not changed to reflect that late development.
I certify that the preceding two hundred and eighty-five (285) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wigney. Associate:
Dated: 3 November 2021
SCHEDULE OF PARTIES
NSD 1316 of 2020 Respondents
Fourth Accused:
DEUTSCHE BANK AKTIENGESELLSCHAFT
Fifth Accused:
MICHAEL RENE ORMAECHEA
Sixth Accused:
MICHAEL HUGH RICHARDSON
Seventh Accused:
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522
Eighth Accused:
RICHARD MARC MOSCATI
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