Director of Public Prosecutions (Cth) v Campbell
[2021] VCC 1839
•16 November 2021
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL JURISDICTION
CR 19-00914
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| GREGORY CAMPBELL |
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| JUDGE: | HIS HONOUR JUDGE McINERNEY |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 12 October 2021 |
| DATE OF SENTENCE: | 16 November 2021 |
| CASE MAY BE CITED AS: | DPP (Cth) v Campbell |
| MEDIUM NEUTRAL CITATION: | [2021] VCC 1839 |
REASONS FOR SENTENCE
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Subject: CRIMINAL LAW
Catchwords: Sentence – Plea of guilty – Insider trading – Shares – Possession of insider information – Pulse Health Limited – Recognisance release order – Fine – Pecuniary penalty order -
Legislation Cited: s1043A(1), 1311(1) Corporations Act 2001 (Cth)
Sentence:Total effective sentence of 1 year imprisonment, order that the offender be released forthwith upon the offender giving security by recognisance of $10,000 and to be of good behaviour for a period of 12 months. Convicted and fined to pay a sum of $10,000. Pecuniary penalty order in the sum of $31,996.78.
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APPEARANCES: | Counsel | Solicitors |
| For the Commonwealth | Ms J. Wang (Sentence) Ms S. Moglia with Ms J. Wang (Plea) | The Commonwealth Director of Public Prosecutions |
| For the Accused | Mr N. Clelland SC with Mr G. Livermore QC | HWL Ebsworth Lawyers |
HIS HONOUR:
1In the matter of Gregory Campbell, Mr Campbell is now aged 63, having been born in August 1958. At the relevant time, Mr Campbell was the national development and construction manager and part of the executive team for Healthe Care Australia Pty Ltd. In the plea to the Commonwealth indictment filed on 6 May 2021, there was one charge alleging a breach under s1043A(1) and s1311(1) of the Corporations Act 2001 (Cth).
2The plea was conducted before this Court on 12 October 2021. For the director, Mr Moglia appeared with Ms Wang. For Mr Campbell, Mr Clelland SC appeared with Mr Livermore QC.
3The plea was conducted remotely. I want to thank everyone in that regard. It has been particularly difficult for the judicial system, and this Court is no different. So, I thank both the instructors, the informants and all parties involved to having effected this plea on that date.
4The charge itself relates to prohibited conduct of a person in possession of inside information. The seriousness of this charge is indicated by the fact that the penalty prescribed by Parliament is one of 10 years' imprisonment and/or a fine. The Court has been advised, as I have just referred to today, that ASIC do not seek an order under s91 of the Australian Securities and Investments Commission Act (‘ASIC Act’) and, hence, that matter is no longer a consideration for the Court.
Circumstances of the Offending
5Insofar as the circumstances of the criminality tendered on the plea, was the agreed statement of facts which became Exhibit A and the chronology Exhibit B. I am going to read from aspects of that Exhibit A. At paragraph 4 of the agreed facts, the following is said:
'On 19 October 2016 at 11.33am, Mr Campbell was told by one of Healthe Care's Executive General Managers, Peter Kahn, that the deal with Pulse had been done. Mr Campbell understood that to mean that Healthe Care had agreed in principal to acquire the Coleman share parcel.’
6Paragraph 5:
'Between 12:00pm and 2.52pm that day, Mr Campbell acquired 392,257 ordinary shares in Pulse at an average price of $0.325 per share.
The next day, on 20 October 2016, Pulse announced that it had received a non-binding indicative offer from Healthe Care to acquire all of its shares with a cash price of $0.47 per share.
On 21 October 2016, Mr Campbell sold the shares in Pulse he had acquired for an average price of $0.4063 per share, resulting in a profit of $31,996.78.’
7Fundamentally important to the understanding of liability here is paragraph 8(e):
'Even though he did not have full knowledge of the proposed deal with Pulse, he was aware that the information, as he understood it, namely that Healthe Care had reached in principle agreement to purchase the Coleman share parcel, was not generally available and if the information were generally available, a reasonable person would have expected it to have a material effect on the price or value of Pulse shares'.
8Paragraph 9 is also important in regard to this plea and reads as follows:
'The acquisition of Pulse shares the subject of the charge, was based on Mr Campbell's assessment of the share price that the share price in Pulse would increase because of the effect of Healthe Care and Ben Thynne's joint influence on the performance of the business'.
9If I then go to paragraph 30:
‘On 19 October 2016, there was an Executive Team meeting of Healthe Care that Mr Campbell did not attend. After the meeting, Mr Campbell spoke on the telephone to Peter Kahn, who had attended the meeting. During the course of the conversation, the main subject matter of which was a project unrelated to Pulse, Mr Campbell asked Mr Kahn if he had missed anything of note. Mr Kahn said words the effect of, "The boys have done their deal with Pulse". Mr Campbell understood this to mean that Healthe Care had agreed in principle to acquire the Coleman share parcel'.
10Importantly, insofar as this criminality is concerned, Mr Campbell explained what he understood and did in his record of interview, including the following in regard to p27 at line 21 to 27:
'And if they're going to do a deal and buy his parcel of shares, and Ben already had his Evolution shares, the two of them could really grow the business. So, I decided now is the time to jump on before the price went through the roof'.
11Mr Cambpell followed that up on the next page which is recorded at paragraph 32 of the agreed facts as follows:
'But Kahny had said the boys had now done the deal. So, from my perspective, it was a marriage made in heaven'.
12In regard to the Crown submission, Exhibit C, I quote from 32B of that document which is as follows:
'Consideration of specific matters relevant to this case, nature and circumstances of the offence'.
It is acknowledged the offence involves a single trade. However, the Crown submits the conduct was serious having regard to the following factors. The inside information was such a material advantage that the offender placed an order to buy Pulse shares within about half an hour of his conversation with Mr Kahn'.
13For perspective on this criminality, it is, important to understand that Mr Campbell had indeed prior to these dates his own CommSec account. He had privately traded in Pulse shares based primarily on his assessment of the individuals involved in that company.
14In September of 2016, Mr Campbell made a profit of $2,000 in Pulse on an overnight investment. On 7 October and 14 October 2016, he placed orders that did not trade.
15Then we come to the criminal activity from the 19th of October through to the 21st of October from which Mr Campbell obtained a profit of $31,996.78. It should be noted that as a result of the announcement on 20 October, the Pulse share price increased by 30 per cent.
16As to how these circumstances came to be discovered, I must say there's still some uncertainty in my mind. I am certain the Stock Exchange has its own self‑regulating measures. Mr Campbell, was questioned on his own by ASIC some six weeks later.
17Mr Campbell attended the ASIC office on 28 November 2018 and made full and open admissions. He had attended there, apparently on his own. It is important that in regard to those admissions to note that as to the information relayed to him by Mr Kahn that Mr Kahn had no actual memory of such conversation.
18The plea was negotiated down to a one‑charge plea on 3 March 2020, and the agreed facts were prepared, Exhibit A, 19 February 2021. As to the sentence in this matter, given the seriousness of this breach, there is no dispute from either party that this behaviour warrants a term of imprisonment.
19However, in the totality of the circumstances, the defence submitted a fine would suffice. The prosecution submitted imprisonment with a recognisance release order would be in range. Insofar as the prosecution was concerned in this regard, I refer to Exhibit C, that is, the submission as to sentence and paragraph 59, the actual term served before being released was left as a matter for me.
20The prosecution provided a summary of cases as guideposts. The various authorities referred to the principles relevant to these type of sentences, and there is, it seems to me, no better summary than that set out in the Corporations Act itself at s760A where the object of the chapter is set out as follows:
To promote;
(a) confident and informed decision‑making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; and
(b) fairness, honesty and professionalism by those who provide financial services; and
(c) fair, orderly and transparent markets for financial products; and
(d) the reduction of systematic risk in the provision of fair and effective services by clearing and settlement facilities.
21Such legislation is passed to protect the integrity of the stock market, to ensure the confidence of the public in the process and eliminate cheating and fraud. It is for that reason why the authorities tell us, and Courts are required as a result of those authorities, to take into account in sentences for such serious crimes principles of general deterrence, specific deterrence, punishment and denunciation.
22In particular, as pointed out in R v Rivkin (2004) 184 FLR 365, 412:
'It is at all times to be borne in mind that the victim in these types of cases is always the public'.
23In regard to the particular circumstances here, I accept that the profit was a small amount, given the history in these type of cases and the huge frauds that have been conducted. The receipt of a profit of $32,000 must be seen at the lower end. As to the actual increase in the share value, the reality is that albeit, as I have clearly pointed out, Mr Campbell was and has pleaded to the charge of acting on inside information, it was actually information that he was not aware of that led to the increase in the shares.
24It is also to be stressed that Mr Campbell has been particularly cooperative, as I have indicated, as to his early cooperation and honesty with questions that were asked to him, and the fact that he comes before the Court with no priors.
Plea of Mr Campbell
25In regard to the plea, Exhibit 1 was tendered which was the submission on plea put by counsel on Mr Campbell's behalf. The principles set out in the Crimes Act (Cth), in particular s16A(2) were referred to, and the circumstances that I have already remarked on generally and specifically were referred to. It was noted that this plea was an early plea and that in regard to the process involved which led to this ultimate plea before the Court, the record of interview was made in November 2016 by Mr Campbell.
26Counsel also referred to Worboyes [2021] VSCA 169 and the utilitarian benefit in these particular times that is effected by such a plea and, as a result, the additional amelioration of sentence that must be imposed. Mr Clelland also spoke to the issue of delay. We now have a period of nearly five years from the initial record of interview and the first approach to Mr Campbell about these matters.
27The original charges involved three allegations made somewhere around May of 2018. There was a committal thereafter and, ultimately, this charge was settled, essentially, as Mr Clelland has put, on the basis of the admissions made in the record of interview back in 2016.
28Mr Clelland submitted that I should take into account the ongoing stress caused by that process over the five year period of delay which I accept. Mr Clelland also referred to the prior good character of Mr Campbell which is, obviously, an important factor, the fact that there has been, to date, some summary punishment brought about by the wide publicity, the fact that Mr Campbell can no longer hold a corporate position and that he has been required to use the phrase 'take up the tools' to earn money for his family, indeed, currently, he is not even able to do that because of his health position.
29I also note the references which confirm Mr Campbell’s prior character, those references being set out in Exhibit 2, and I was also given the case of DPP v Graham [2013] VCC 813 to pursue. Such references are always guideposts to this Court. I take it on that basis, and it is noted that in that case, a fine was imposed for the breach, which had been pleaded to.
Sentence
30Taking account of all those matters Mr Campbell, put on your behalf, my analysis of the circumstances and my reference to the authorities, you will be convicted and sentenced. You need not, given the circumstances, adopt any other position than where you are. You will be convicted and sentenced to a period of imprisonment of 12 months. I have accepted the proposition put to me that it is appropriate to allow you to enter into a recognisance release. That release will apply immediately.
31The recognisance release order will require your own recognisance in the sum of $10,000, and will apply for a period of 12 months. In addition, you will be fined the sum of $10,000. The pecuniary penalty order for which there is no stay sought will be signed by me in the sum of $31,996.78, an order made pursuant to s116 of the Proceeds of Crime Act 2002 (Cth).
32As to the requirements of the State Sentencing Act s6AAA, it seems albeit there is some doubt as to whether this applies, the appropriate approach is to proceed on the basis that it does apply to a Commonwealth sentence. I am required by Parliament to indicate to you, Mr Campbell, the actual worth of your plea of guilty in this matter.
33I can assure you that there would have been no recognisance release order made by me had you not pleaded guilty, and, further, the imprisonment would have been two years. I think that's all I need to say in that regard. Mr Clelland, is there a stay sought in regard to that fine given that there's a pecuniary penalty order which applies as well?
34MR CLELLAND: Your Honour, could I just clarify something with you before I deal with that?
35HIS HONOUR: Yes.
36MR CLELLAND: I may have misheard Your Honour, but I took Your Honour to be saying earlier on in your reasons that there was agreement regarding the need for the imposition of a sentence of imprisonment by the defence. If you did not say that, I apologise. I must have misheard.
37HIS HONOUR: No, I was saying there was - the proposition put to me was a joint submission that a recognisance release order was appropriate. You had submitted with immediate release, and, indeed, I think to be correct, you had actually primarily submitted that there should be no period of imprisonment imposed.
38The prosecution, as I quoted from Exhibit C at paragraph 59, were accepting of it being within range to have a recognisance release order and said that the period was for me.
39MR CLELLAND: Your Honour, the primary submission on behalf of Mr Campbell was that it was appropriate for the Court to convict and impose a fine rather than any period of imprisonment.
40HIS HONOUR: I accept that.
41MR CLELLAND: And Your Honour will find that - thank you, and Your Honour will find that at paragraph 7 of our submissions.
42HIS HONOUR: Yes, I accept that, and if I was not clear, I will be clear.
43MR CLELLAND: Yes. And in the circumstances, I have no doubt that that was something Your Honour was mindful of. Although, I think in terms of the reasons that Your Honour has given this morning, it might have seemed as though there was a concession by the defence that a period of imprisonment with immediate release was appropriate.
44HIS HONOUR: Your primary submission was that it should have been a fine only. I accept that.
45MR CLELLAND: That's right. Now, it would seem from Your Honour's reasoning that Your Honour has rejected that.
46HIS HONOUR: And not only do I accept it, but I rejected it.
47MR CLELLAND: And I understand that, and if I understand what Your Honour has then gone on to do, it is to impose the period of 12 months' imprisonment with an order for Mr Campbell's immediate release and the order for what I will call restitution or disgorgement of the profit being the $31,000 - I did not understand Your Honour to be going beyond that to then impose a further financial penalty.
48HIS HONOUR: Yes, I imposed a fine of $10,000.
49MR CLELLAND: That will then be a matter for the prosecution as to whether that is open to Your Honour having imposed the term of imprisonment. I am not saying it is not, but in terms of the structure of the sentence, that will be a matter for the prosecution.
50HIS HONOUR: What do you mean by that? I was told there was no problem about that. I am entitled to either impose the penalty for this matter or this offence is a period of imprisonment and/or a fine.
51MR CLELLAND: Yes, well, if that be the case, I had not understood that the prosecution were putting the submission that way, but ‑ ‑ ‑
52HIS HONOUR: I have sentenced Mr Campbell from my own point of view having considered both submissions. What was open as a matter of penalty is a period of imprisonment and/or a fine. I have imposed a period of imprisonment, upon which I have imposed a recognisance release order meaning there is no immediate imprisonment for your client, plus a fine of $10,000.
53MR CLELLAND: Yes, I now have the section open in front of me. I accept, of course, what Your Honour has said to me in the terms of the section, and if the prosecution say it is not open to Your Honour to do that, then they will tell us very quickly, and on the assumption that it is open for Your Honour to do that, then we would ask for a stay of one month for the payment of the fine, but as I said at the ‑ ‑ ‑
54HIS HONOUR: I will give you a stay of six months.
55MR CLELLAND: If Your Honour pleases.
56HIS HONOUR: Mr Wang, is there any issue about that as to the penalty that I can impose? Ms Wang, I am sorry, yes.
57MS WANG: No, Your Honour, in the prosecution's submission.
58HIS HONOUR: I thought that was clear at the - I am surprised at Mr Clelland's reticence. I thought it was clear from the start that the penalty range that can be imposed in regard to this matter is a period of imprisonment and/or a fine.
59MS WANG: That is right, Your Honour, and in the prosecution's submissions, the making of the PPO did not change that, and I note, Your Honour, in DPP v O'Reilly, that was done as well, both a PPO and a fine as well as the term of imprisonment with an immediate release was imposed. So, in the prosecution's submission, that course is open to Your Honour.
60MR CLELLAND: No, my reticence flowed from the fact that I had been concerned that Your Honour had thought that the defence position was one of joining with the prosecution that a period of imprisonment was appropriate which was not ‑ ‑ ‑
61HIS HONOUR: Yes, no, I apologise for that. That is correct. I went to the joint submission relating to the appropriateness within the range of a recognisance release order without actually stressing the fundamental major proposition that you put was that the totality of these circumstances warranted a conviction and a sentence which involved a fine only.
62MR CLELLAND: Yes. So, beyond that, I don't wish to say anything further, Your Honour.
63HIS HONOUR: Yes. Thank you, Mr Clelland. Ms Wang.
64MS WANG: Nothing further from me, Your Honour.
65HIS HONOUR: Thank you. Can I thank everyone for their assistance. The six months will be 16 May 2022. In other words, I think the way the order will read is not six months, but a stay until 16 May 2022. Mr Clelland, given the problems of remote, we will need the recognisance release order signed, but my instructor says that she'll send - I understand Mr Campbell is at your instructing solicitor's office. Is that correct?
66MR CLELLAND: Your Honour, yes.
67HIS HONOUR: Sorry.
68MR CLELLAND: It's in Brisbane, Your Honour, but could I suggest that if - with respect, if that could be forwarded to my instructors in Melbourne. If that's worse, they will be able to immediately forward it to the Brisbane office and have Mr Campbell in to be undertaken.
69HIS HONOUR: Right. That's what we'll do. So, send it to your instructor's office in Melbourne, and they'll forward it up for the undertaking to be signed, and, indeed, Mr Campbell should stay there until he's signed it.
70MR CLELLAND: Indeed.
71HIS HONOUR: Yes, thank you.
72MS WANG: Your Honour, if I may just briefly in relation to that whether Your Honour would just make the explanation under s16F to Mr Campbell about the conditions of the recognisance order and the consequences.
73HIS HONOUR: Yes. Mr Campbell, it's probably obvious that should you not be of good behaviour in the period of this recognisance, the consequences would be a forfeiture of the recognisance amount which you don't have to pay now, but it's under your own recognisance and the service of the period of imprisonment that I've imposed.
74It's important that in entering into that recognisance, you understand the consequences that may follow if you've failed to comply with these conditions without reasonable excuse, and that's what you'll be asked to enter into when the order comes up to you at your solicitor's office in Brisbane.
75OFFENDER: I understand.
76HIS HONOUR: Thank you. Yes, well, good luck, Mr Campbell. Yes, thank you. We'll forward that off, Mr Clelland, and thank you, Ms Wang, for that reminder.
77OFFENDER: Thank you.
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