Director of Public Prosecutions (Cth) v JM

[2013] HCATrans 95

[2013] HCATrans 95

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne       No M73 of 2012

B e t w e e n -

DIRECTOR OF PUBLIC PROSECUTIONS (CTH)

Applicant

and

JM

Respondent

FRENCH CJ
HAYNE J
CRENNAN J
KIEFEL J
BELL J
GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 7 MAY 2013, AT 10.15 AM

Copyright in the High Court of Australia

MR O.P. HOLDENSON, QC:   May it please the Court, I appear with my learned friends, MR G.A. HILL and MR C.J. WINNEKE, for the applicant.  (instructed by Director of Public Prosecutions (Commonwealth)

MR M.K. MOSHINSKY, SC:   May it please the Court, I appear with my learned friend, MR M.I. BORSKY, for the respondent and cross‑appellant.  (instructed by Clayton Utz, Lawyers)

MR S.G.E. McLEISH, SC, Solicitor‑General for the State of Victoria:   If it please the Court, I appear with my learned friend, MR P.D. HERZFELD, for the Attorney‑General for Victoria intervening or seeking leave to intervene in the cross‑appeal or the application for special leave to cross‑appeal.  (instructed by Victorian Government Solicitor)

MR HOLDENSON:   As we understand it at this end of the Bar table, the Director must succeed in this Court on two points.  The first being that his Honour Justice Weinberg had jurisdiction to state the amended question and, as a consequence of that, that the court below had the jurisdiction to answer the amended question and, secondly, that the court below erred in its answer to that amended question.  Our argument with respect to the first point is inextricably intertwined with our argument with respect to the second point.

FRENCH CJ:   I might say, just at the outset, that we will not need to hear from the parties on the grounds for grant of special leave.  Just go straight to the substantive questions.

MR HOLDENSON:   What I was proposing, of course, subject to your Honour, I am not sure that I understood what your Honour said.  I was going to present the submissions first with respect to the cross‑appeal in order to establish the jurisdiction with respect to the application for special leave.  If that finds favour with the Court, that certainly finds favour with the manner in which I propose to present the argument.

FRENCH CJ:   Just argue the cross‑appeal and argue the appeal in succession.

MR HOLDENSON:   Yes. 

FRENCH CJ:   Yes, all right.

MR HOLDENSON:   Upon an examination of the history and I will use a neutral term, if I might, of the prosecution of the respondent, there was always an issue between the parties concerning the construction of section 1041A of the Corporations Act and, hence, the correctness of the decision of his Honour Justice Goldberg in the Federal Court in the case of ASIC v Soust.

Indeed, prior to the filing of the indictment in the Supreme Court on the then accused’s application to transfer the case from the County Court to the Supreme Court, the then accused contended that Soust had been wrongly decided. That, for example, is apparent in the first volume of the application book. The first document is the accused’s outline of submissions dated 6 April 2011 which commences at page 1 of the first volume. At page 6 your Honours will see paragraphs 22 to25. Paragraph 22 – and this is the outline of submissions of the then accused – makes reference to the decision of Justice Goldberg in Soust.  At paragraph 23 it is submitted on behalf of the accused, and I quote, that it:

does not provide guidance as to the application of section 1041A –

And in paragraph 24 it is said:

Ultimately, it will be submitted that His Honour Justice Goldberg erred as to the proper construction of section 1041A –

Subsequently, in the document with the title, “Summary of the Prosecution Opening” filed in the Supreme Court – and that is set out in the same volume of the application book from pages 27 right through to page 230 - the Crown clearly contended that the Crown case assumed the correctness of and was based upon and indeed in our written submissions the phrases used hinged upon the construction given to section 1041A by Justice Goldberg in Soust. That is made apparent, in particular, within one paragraph at the foot of page 55 of the first volume of the application book at paragraph 116. This is the paragraph upon which that entire document turns. It is paragraph 116 at the foot of page 55 and reads:

The Crown says that “artificial price” in s 1041A connotes a price created not for the purpose of implementing or completing a transaction between genuine parties wishing to buy and sell securities, but rather for a purpose unrelated to achieving the outcome of the interplay of genuine market forces of supply and demand; that purpose being to ensure that the price for GTG was kept at levels designed to minimise the calls made on the Accused under the margin lending arrangements.

Now the issue was in turn refined by the accused in the next document, the accused’s outline of submissions dated 21 July 2011.  They commence in that same volume of the application book, volume 1 at 243 at pages 260 to 261, which is at the conclusion of the document drafted by Mr Richter, senior counsel for the then accused, and at paragraphs 77 to 80 is the refined version of the argument.  Paragraph 77 is to the effect that the dissenting judgment of his Honour Mr Justice Priestley in the New South Wales ‑ ‑ ‑

CRENNAN J:   Sorry, Mr Holdenson, where are you?

MR HOLDENSON:   I am in the accused’s outline of submissions in the Supreme Court in the trial division dated 21 July.  They start at page 243, but I have moved on to the end of that document at 260 ‑ ‑ ‑

CRENNAN J:   Page 260, thank you.

MR HOLDENSON:    ‑ ‑ ‑ which is the second last page, and it is the concluding submissions prepared by Mr Richter, and paragraph 77 makes it clear that their submission was that the dissenting judgment of his Honour Mr Justice Priestley in Fame was correct.  The judgment of his Honour Justice Goldberg in Soust was incorrect – paragraph 78 sets out that passage – and over to paragraph 80 at the top of the next page:

the Crown’s construction of the relevant trading is not right and there was no artifice in the share price.

FRENCH CJ:   You did not need to seek a construction for all purposes, did you?  You needed to seek a construction sufficient for application to the facts of the matter before the court?

MR HOLDENSON:   That was the case at trial, yes.  That was all that was then needed.  In any event, this all has to be, in our submission, looked at from the point of view of the judge conducting the trial.  His Honour Justice Weinberg, albeit I am not sure that he was the judge who was going to be conducting the trial at the end of the day, as we know, he stated the case and in doing so he made a ruling.  In our submission, there are aspects of the ruling which are particularly instructive with respect to the issues which arise on the cross‑appeal.

Now, that ruling of his Honour Justice Weinberg in stating the case is in the third volume and it commences at page 890.  That is his Honour’s ruling dated 21 October.  In that ruling he made a number of findings - I do not mean findings of fact or determinations – made a number of statements which were undoubtedly correct and cannot be criticised.  For example, if I could take your Honours at page 891 to paragraph 3 of the ruling of his Honour Justice Weinberg. 

Paragraph 3 towards the foot of the page he makes reference to the hearing which had been heard on 30 June before his Honour Justice Coghlan in the trial division and during the course of that hearing it emerged that the parties were in dispute as to the meaning to be given to the expression “artificial price”.  Paragraph 4:

The Director of Public Prosecutions (‘the Director’) contended . . . Goldberg J in Australian Securities and Investments Commission (ASIC) v Soust.

That is set out at the head of the next page.  Paragraph 5 sets out the position of the then accused:

He submitted that a purchaser of shares, doing nothing more than accepting lawful standing orders to sell, is not prohibited from doing so at any price.

It proceeds down to, in the last sentence, the accused relying principally upon the dissenting judgment of Justice Priestley in the case of Fame.  At paragraph 13 on page 894 of the application book, his Honour Justice Weinberg notes in the second sentence:

that the determination of the question of law as to the meaning of ‘artificial price’ may render any trial unnecessary –

The next sentence:

It would also resolve a novel question of law that is necessary for the proper conduct of the trial. 

Paragraph 14 at the head of the next page, second sentence:

it would be difficult to prepare this matter –

that is the prosecutor and the accused –

for trial without having resolved the meaning to be given to one of the central elements of the substantive offences charged.

Then, if I could take your Honours to paragraphs 58 and 59 on page 906 of the application book where his Honour Justice Weinberg at paragraph 58 said, and I quote:

It is obviously in everyone’s interest that there be a speedy and authoritative resolution of the question what meaning is to be given to the expression ‘artificial price’ . . . The trial, if it proceeds, is likely to be a very long one, with an estimate of up to six weeks duration.

Paragraph 59:

If the approach to the meaning of that expression adopted by Priestley JA in Fame Decorator Agencies Pty Ltd v Jeffries Industries Inc is correct, it is virtually certain that the charges against the respondent will be withdrawn.

Now, just pausing there for a moment, on at least two occasions prior to that ruling, namely on 30 June before Justice Coghlan and on 20 September before Justice Weinberg – and I think most of these passages have been cited in the footnotes by the Solicitor‑General in his document before the Court – it was recognised by the Crown that if the dissenting judgment in Fame were at the end of the day held to be correct, with the consequence that Justice Goldberg’s ruling in Soust was wrong, then there was simply no Crown case.  There would be no five or six week trial.

HAYNE J:   The indictment would be demurrable, would it not?

MR HOLDENSON:   It would be.

HAYNE J:   The indictment as particularised and identified would be demurrable.

MR HOLDENSON:   It might need a bit more to make it demurrable because it may not contain sufficient within the wording of the charges.

HAYNE J:   That is why I said “as particularised”, Mr Holdenson.

MR HOLDENSON:   Well, the particulars then have to be incorporated into the document and if that was done ‑ that is the sort of point that was made in the New South Wales case cited by the Solicitor‑General, the case of Glynn and then you finish up with a very broad charge.

CRENNAN J:   But the particulars are relevant to the Director’s construction of 1041A, are they not?

MR HOLDENSON:   Yes. Now, if we could – I understand the point made by Justice Hayne but if I could just interrupt the presentation of the background to the case and make a preliminary submission, which I will support in due course, in the form of a short observation. It is our submission that it would indeed be a surprising result if the exercise of the judicial power of the Commonwealth for the purposes of Chapter III of the Constitution required the conduct of a six week jury trial before this dispute concerning the construction of section 1041A got decided, and hence, whether or not the Crown case was wholly misconceived and, indeed, fatally flawed. That is the sort of point that was made by Justice Weinberg, for example, within discussion, but not out of context on 20 September on one of the days which precede it. I will just read it to your Honours.

His Honour said, “It will tell the Judge what the correct legal test is so far as the meaning of the words “artificial price”.  It will stop the trial from being a complete waste of six weeks of everybody’s time at vast expense in circumstances where the Commonwealth”, that is the Commonwealth Director of Public Prosecutions, “may have simply misconceived the entire case and proceeded upon the basis of an erroneous interpretation of the relevant words”.

Indeed, what Justice Weinberg there did was echoed the very words which had been articulated by Justice Coghlan in the directions hearings back in June.  Indeed, that sort of language reflects the language in one of the cases to which we will turn in due course with respect to whether or not there is a constitutional impediment to all of this; the decision of this Court in O’Toole v Charles David Pty Ltd (1990‑1991) 171 CLR 232 at page 284 in the joint judgment of Justices Deane, Gaudron and McHugh.

That was the case where this Court held that the Full Court of the Federal Court had not erred in answering the questions of law which had been stated for the consideration of the Full Court of the Federal Court by the learned primary judge – as I recall, his Honour Justice Gray.  At 284 at about point 3 or 4 in the page, within that large paragraph, there is this passage:

The procedures of stated and special cases and reserved questions within a court provide a convenient method of resolving questions of law in circumstances where such resolution is desirable at an early stage to avoid abortive hearings and the waste of judicial resources, professional time and legal costs.

To that we would insert, in this day and age, the word “scarce” – scarce resources at the end of the day to be paid for by the community. When this case – I will use the neutral word – when this prosecution reached the Court of Appeal of course the accused’s construction of section 1041A or the phrase “artificial price” changed a bit. Although still contending, of course, that Soust had been wrongly decided, their contention was that the construction, the subject of acceptance by the majority below, was the correct one. But just so that there is no doubt about it, while that construction of section 1041A stands, namely, artificial price for the purposes of section 1041A comes about through market manipulation, et cetera, typified by cornering and squeezing, there is no Crown case.

The Crown do not have – did not and do not have the evidence to conduct such a prosecution and to prove any one of the 41 offences specified on the indictment.  The benefit of the determination of such an issue of construction the subject of dispute is obvious.  The accused is not subjected to a six week trial and if the Crown were nevertheless foolishly seeking to persist with their flawed prosecution, the accused would be able to make - easily make, readily make – an application that the proceeding be stayed as an abuse of process on the basis that it is foredoomed to fail.  But, if I could just return to the trial, had that reformulated question not been put before the Court of Appeal for an answer, it is our submission that the trial of the accused could simply not have proceeded, it could not have been progressed.  The judge needed to know the answer.

First, the admissibility of some of the evidence which the Crown proposed to lead against the accused depended upon an answer to that question which was the reformulated question.  Evidence, for example – and this is a matter of relevance as distinct from discretionary exclusion – the evidence concerning the purpose with which, or for which, the accused’s daughter TN acted in her purchase of shares.  The evidence of communications between the accused and his daughter TN concerning the purpose for the transactions conducted on the ASX, the communications between the accused and the financier, Opes Prime, which of course gave rise to the Crown’s contention of purpose for which the accused acted, namely, he did what he did because he did not want the trading price of the shares to fall.  So those questions had to be determined – admissibility of evidence – and that could not be done until 1041A artificial price was decided.

HAYNE J:   Why was that to be achieved only by the reformulated question as distinct from the more particular questions that Justice Weinberg had stated at 925?

MR HOLDENSON:   There was nothing wrong, in our submission, with the questions as formulated by his Honour Justice Weinberg, but we finished up with an amended question, and we are content in this Court to proceed by reference to the amended question.

After the jury was impanelled, so moving on with the trial, in circumstances where the Crown case depended upon the correctness of Soust – and your Honours will recall the passage in paragraph 116 of the Crown opening – keeping in mind section 224 of our Criminal Procedure Act which required the Crown opening to the jury to be in accordance with – and it is in the Director’s book of legislation at tab 1 – what it is that had been prepared, keeping in mind that that is how the prosecutor would open the case, the judge could hardly, in our submission, have permitted the prosecution to continue before the jury if the Crown had misconceived section 1041A.

But moving on, immediately after the Crown opening to the jury comes the defence opening to the jury. That is provided for in subsection (1) of section 225 of the Criminal Procedure Act where there is a requirement imposed upon counsel for the accused to respond to the Crown opening, and keeping in mind what the contention of the accused was with respect to this phrase, again we say by way of submission that the judge could hardly permit the case to proceed unless and until the dispute as to the construction of this phrase “artificial price” had been determined ‑ ‑ ‑

FRENCH CJ:   Mr Holdenson, if questions 2 and 3 of the questions formulated by Justice Weinberg were sufficient – at 925.

MR HOLDENSON:   Yes, your Honour, I have got them.

FRENCH CJ:   Does it follow that the reformulated question went wider than was necessary for the resolution of matters in issue at the trial?

MR HOLDENSON:   In our submission, no, it did not go wider than was necessary.  The amended question provided an answer with respect to the construction of the phrase which would be applicable to all cases ‑ ‑ ‑

FRENCH CJ:   The question is, did it answer more than it had to for the purposes of resolution of the matter before the court?

MR HOLDENSON:   In my submission, no, it did not answer more than it had to ‑ ‑ ‑

FRENCH CJ:   Because if it did not, to that extent, it might be said not to arise out of the matter.

MR HOLDENSON:   I will get to how it arose in ‑ ‑ ‑

FRENCH CJ:   Yes, but I am putting to you a particular question.

MR HOLDENSON:   Yes, yes. Could I return to that question of your Honour’s just after I make the next point? After the prosecution opening and the defence opening, section 222 of the Criminal Procedure Act imposes an obligation upon a trial judge, keeping in mind – although I should go to section 222:

At any time during a trial, the trial judge may address the jury on—

(a)the issues that are expected to arise or have arisen in the trial;

Subsection (b), I can move over that –

(c)any other matter relevant to the jury in the performance of its functions and its understanding of the trial process, including giving a direction to the jury as to any issue of law, evidence or procedure.

Now the purpose of that section is obviously to facilitate the performance by the jury of its function, and what that does is it requires a judge in practice, after the conclusion of the two opening addresses to the jury, to identify not only the issues to be resolved at the end of the day by the jury, but also what evidence to look out for and to focus upon in order to be able to resolve or determine those issues at the end of the day.

So, in summary, without the answer to the question, his Honour, whoever be the trial judge, or her Honour, could not comply with that duty.  So that is why we say by reference to those four things - admissibility of evidence and decisions thereon, Crown opening, defence opening and then, for want of a better expression, the opening directions given by the judge to the jury – the trial could not have proceeded unless the construction of the phrase was determined, and it would be determined in one of two ways, or perhaps three ways:  either by the trial judge in a ruling under section 199 of the Act, and that ruling might come about in one of several contexts. 

It might come about in the context of his Honour determining at that point how it would be that he or she would direct the jury ultimately.  It might come about in the context of the judge determining and ruling upon the admissibility of some evidence which the Crown proposed to lead, or by the Court of Appeal, either on an interlocutory appeal from the ruling of the judge, or on a case stated.  Of course, as I have said, if it was resolved in a manner adverse to the contention of the Crown, then there was no Crown case.

Now, your Honour Justice Hayne asked me about demurrers.  Demurrers are still catered for, it would seem, within this Criminal Procedure Act, albeit it not with that title.  Section 199(1)(c) is where they would fit in.  I will read that to your Honours:

(1)At any time before trial, the court may hear and decide any issue with respect to the trial that the Court considers appropriate, including –

. . . 

(c)an application for an order that may be made in relation to the trial . . . including an application to quash a charge in the indictment –

Albeit, as I recall Justice Weinberg said during discussion in one of the hearings before his Honour in this matter, you do not tend to hear of them anymore and I am not sure that there has been one in more than 20 years in Victoria.  They have certainly had them in more recent years, or the notion has been put before courts in recent years in New South Wales.  For example, the case of Glynn in 1994 and then in more recent times, albeit I suspect that the point ended up being abandoned in I think one of the decisions in Einfeld.  But it is in that context that the judge had to know the answer that in our submission the amended question – for that matter, any other questions – arose.

It was necessary to be answered because otherwise the judge could hardly do that which the trial judge had to do in order to conduct the trial.  When put in that manner, that very much falls within the language of his Honour Justice Kitto in the case of Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation, one of the cases cited and, as I recall, quoted from by the Solicitor‑General in his outline, reported (1963) 113 CLR 475, where at both pages 496 towards the foot of the page at about point 7 on the page, and then again at the head of 497, 496.7 is all in the context of a question arising for the purposes of a statutory provision and being referred by a tax board to the High Court:

In my opinion, it arises also where, in the course of a reference, the Board finds itself unable to perform its function properly without deciding a question, adjective rather than substantive though it may be, which depends wholly upon the application of the law to a situation which has actually developed.

And that point is repeated at 497 at about point 2 at the end of the paragraph at that point which must be decided in order that the board may perform its function in the particular case in accordance with law ‑ ‑ ‑

HAYNE J:   Just before you put that away, Mr Holdenson, do we not need to read the whole of that sentence, and does not that sentence capture the essence of the issue about whether the reformulated question was the right question to ask or more particular questions of the kind found in Justice Weinberg’s stated case were the questions to ask?  Is not the reformulated question, in effect, giving the Court general or abstract advice as to the manner in which it should construe the Act rather than deciding the concrete question of law which is, I would have thought, in this circumstance whether the prosecution case, as outlined, if proved, disclosed an offence?

MR HOLDENSON:   Another variation might be whether or not the – with respect to the amended question, it be read down so as not to prompt the answer sought by the Director in the amended whatever it be – the amended draft notice of appeal, but whether it be the answer sought be one which better reflects particularly question 1 of the questions formulated by his Honour Justice Weinberg at 925 of the application book but also 2 and 3 perhaps. 

It is our submission that the amended question arose, but the alternative submission would be, of course, the questions as formulated by his Honour Justice Weinberg certainly arose if the Court were to proceed on the basis that the amended question, and this is the point your Honour Chief Justice French raised with me about five minutes ago, whether or not it was wider than it needed to be.  But, it is our submission, by reference to that other passage in that sentence, the entirety of the sentence at 497 in the judgment of Justice Kitto that the amended question was not one which prompted general or abstract advice.

Just with respect to those passages in the judgment of his Honour Justice Kitto, that was of course the test applied by the High Court with respect to whether or not the question of law which had been referred to the Court had arisen.  Now, of course, the body which referred the question on the case stated to the Court was a tax board of review and it was, of course, performing an administrative function not a judicial function and, in our submission, it would indeed be an odd result if a different test arising or arisen were to apply in a case where the question of law being referred on a case stated by a court exercising Chapter III judicial power here, what it was that was being presided over and conducted by his Honour Justice Weinberg, led to a different result.  Because in Mobil Oil, of course, the question of law itself had to give rise to a matter because there was no prior exercise of judicial power.

KIEFEL J:   Would your answer to the amended question 1(a) be “No”?

MR HOLDENSON:   I am sorry, what ‑ ‑ ‑

KIEFEL J:   Is your answer to the amended question 1(a) “No”?

MR HOLDENSON:   Let me get the question in front of me. It is at ‑ ‑ ‑

HAYNE J:   Page 927.

MR HOLDENSON:   No, 927 is the question of his Honour Justice Weinberg.

HAYNE J:   No, it is not.

KIEFEL J:   No, the amended question, Court of Appeal.

MR HOLDENSON:   Yes, the amended question is at page 1167 of the application book.

KIEFEL J:   It is 927 on mine.

FRENCH CJ:   Mine is also at 927.

MR HOLDENSON:   I am sorry, what page?

KIEFEL J:   It might be at two places.

MR HOLDENSON:   It is at more than one place, I think.  Our answer is that question 1, the answer is “Yes”.  It is used in the sense of a term having a legal signification.

KIEFEL J:   All right, perhaps I could approach it this way.  The questions as formulated by Justice Weinberg, 2 and 3, are the answers to each of those “Yes”?

MR HOLDENSON:   Yes.

KIEFEL J:   And what would be the content of the direction given by the trial judge to the jury, on your submission?

MR HOLDENSON:   Keeping in mind that the answer to question 1 on that page 925 is also “Yes”, if the jury were to find what is set out within question 1, then the jury would be determining that that element of the offence, artificial price, had been proven beyond reasonable doubt.

KIEFEL J:   What about 2 and 3?  Would the direction necessarily ‑ ‑ ‑

MR HOLDENSON:   If the jury were to ‑ ‑ ‑

KIEFEL J:   Would the jury be directed in accordance with Justice Weinberg’s paragraphs 2 and 3?

MR HOLDENSON:   Yes, albeit those two questions only relate, I think, to one charge, but yes, it flows through.  It is a question which is typical of, I think, quite a number of the charges, indeed, I think 39 of them.

KIEFEL J:   Given that your submissions relate to the purpose of the questions being to assist the trial judge in that task, does that tell us something about the amended question and the way in which it was formulated?

MR HOLDENSON:   The amended question was formulated by the court below, prompted by the reasoning of the majority below, in order to avoid any constitutional impediment to the answering of the question, which they determined there was, in order to at least provide the requisite basic advice by way of an answer with respect to, once they answered 1(a) in the affirmative, in 1(b).

KIEFEL J:   I am just trying to determine whether the amended question really, in a sense, lines up with your argument because your argument on the substantive appeal involves an acceptance, I would have thought, of the propositions underlying the questions as originally formulated.

MR HOLDENSON:   Yes, absolutely, and those questions have been formulated by reference to the manner in which the Crown proposed to conduct the case, which was of course, to use that phrase in the document, hinged upon the construction of Justice Goldberg’s ‑ ‑ ‑

KIEFEL J:   So if you are right in your argument on the substantive appeal, the amended question really is not consistent with that approach, is it?  It does not give you the answer that you say is the correct one, and that, you say, would be the matter to be put to the jury?

MR HOLDENSON:   If the question were to be answered in accordance with what it is that the Director seeks in this Court in the amended notice of appeal, it goes a long way toward formulating the content of the direction in that it deals with one of the parties to the transaction of buy sell, the purchaser, took part in it or carried it out for the dominant purpose of creating or maintaining the price and that very much, in our submission, fits within the last portion of question 1 as formulated by his Honour:

carried out for the sole or dominant purpose of creating or maintaining a particular price –

Now, it may be that in one sense answering the three questions as formulated by his Honour provides more immediate or direct assistance to the trial judge with respect to what he or she needed to know in order to conduct the trial from beginning to end, but it is certainly ‑ ‑ ‑

KEANE J:   And also, Mr Holdenson, a more direct answer to the question as to the legal sufficiency of the facts alleged by the Crown.

MR HOLDENSON:   Yes.  Well, in those circumstances, as I say, the amended question put by the Court of Appeal and answered by the Court of Appeal can have within its answer, if this Court finds favour with what we say about what is wrong with respect to the answer given by the court below to the amended question can be answered by this Court in a manner which incorporates the answers to the three questions as posed by his Honour.  Certainly, the first question can be covered within the answer by just changing the words marginally from that which we say should be the words substituted for the answer given below.

HAYNE J:   Can I just see if we can avoid getting into a procedural tangle because I think there may be no procedural tangle?  I just want to make sure that there is not.  An outcome that may have to be considered is that a question or questions which would arise at the trial of the accused were the questions 1, 2 and 3 as identified by Justice Weinberg.  It may be – I do not know – that there may be criticisms attached to the reformulated question.  Now, the cross‑appeal against you is that the reformulated question should not have been answered at all but it is also said, I think, that the original questions should have been answered inappropriate to answer.

MR HOLDENSON:   In other words, not answered.

HAYNE J:   Not answered, but I think that as between the parties one of the permutations and combinations of outcomes that I think the parties appeal and cross‑appeal would raise is, if the reformulated question were seen as too broad, difficult, open to criticism for some reason, the original questions should have been answered and you would say – and here there is a debate between you and Mr Moshinsky – you would say they should be answered in favour of the prosecution.

MR HOLDENSON:   Yes.

HAYNE J:   Mr Moshinsky would say, no, they should not either be answered at all or, if answered at all, should be answered in the opposite sense.  Is that right?

MR HOLDENSON:   Yes.

HAYNE J:   It seems to me that that is at least on the table, is it not?

MR HOLDENSON:   Yes.

HAYNE J:   Yes.

MR HOLDENSON:   That which is attractive about the amended question, in our submission, is that it cannot be criticised on the basis that it is based on some sort of hypothetical factual foundation because when regard is had to the amended question, and indeed, for that matter, question 1 as formulated by his Honour Justice Weinberg, at least question 1, it formulates a neat and confined question of law for which there is a sound and certain and sufficient factual foundation referable to the indictment, just the indictment alone.

First, the accused had been charged with 39 offences contrary to section 1041A and two offences contrary to the combined operation of section 11.5(1) of the Criminal Code and 1041A, the two offences of conspiracy.  On his arraignment on that indictment the accused had pleaded not guilty to each and all of the 41 charges.  One element of each and all of the 41 offences charged and to be proven beyond reasonable doubt by the Crown was the composite phrase “artificial price”.  There was a dispute about its meaning but whether or not there be a dispute would have to be the subject of a direction at the end of the day.  That is something that the judge had to deal with.

In that sense it does not depend upon any analysis or consideration of any evidentiary material.  It does not need any findings of fact.  In those circumstances, in our submission, it is not one which suffers any of the problems thrown up against us where our friends speak about disputed facts and hypothetical facts and facts yet to be ascertained.  Now, of course, part of how it is that there is no facts and how it is that the amended question, and for that matter question 1 as originally formulated by Justice Weinberg can be answered does not require any reference to facts.  It will become apparent when we move on to the appeal.

One of the criticisms put against us is that the amended question, and they would certainly say the original question 1 formulated by Justice Weinberg, is that it is a question like, “What does section 1041A mean? What conduct does it catch? What is its scope? What falls within it?” It is a bit like the exam question at the university when the questioner in the exam says, “Here is section” whatever it is, “what does it mean? Discuss.” The amended question did not seek, nor did question 1, as originally formulated, did not seek some judicial dissertation upon section 1041A and the Corporations Act, or for the purposes of the Corporations Act.

Indeed, the amended question, and for that matter, question 1, as originally formulated, was on all fours with the question which was dealt with and re‑answered by this Court in Bass, and in that regard if I could take your Honours to this Court’s decision in Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 and if I could just take your Honours to paragraph 5 at the foot of page 342. In paragraph 5 the background is set out, during the pre‑trial proceedings before the learned primary judge who was his Honour Justice Wilcox in the Federal Court:

The question emerged whether . . . the proceedings could be maintained –

against the defendants or respondents.  So the learned primary judge, Justice Wilcox, as is set out within paragraph 5, “formulated six questions”.  The first of those questions is set out within paragraph 6 within the quotation marks and your Honours will see it reads:

“Whether, having regard to the matters pleaded in the amended Statement of Claim and the material contained in the agreed bundle of documents, the State is bound by the Trade Practices Act 1974 (Cth) and whether any claim made under that Act in these proceedings against the State is maintainable?”

In the next paragraph within paragraph 6 it is made clear that the passage which speaks of the material contained in the agreed bundle of documents can be disregarded.  Paragraph 7 deals with the content of the matters pleaded in the amended statement of claim.  Reference is made to a number of provisions within the then Trade Practices Act.  As to what was held by the Full Court of the Federal Court from which this appeal came is set out in paragraph 8.  I need not trouble your Honours with paragraph 8.  But keeping in mind that first question which ended up reading:

“Whether, having regard to the matters pleaded in the amended Statement of Claim . . . the State is bound by the Trade Practices Act 1974 (Cth) and whether any claim . . . is maintainable -

what one sees from paragraph 9 onward is what is clearly an extensive legal analysis, but nothing other than the court engaged in the process of statutory construction. Paragraphs 9, 10 and 11 deal with various provisions in the Trade Practices Act.  Paragraph 12 the same.  Over to paragraph 14 at the foot of page 345 is a consideration of this Court’s earlier decision in Bradken.  That consideration goes for a few pages.  Then of course Bropho is the subject of consideration.  Over to page 347 at paragraph 20 the Court then turns to a provision within the Acts Interpretation Act (Cth). 

Over a little further, one sees further analysis - at page 349 further provisions within the Trade Practices Act and what was intended and what was considered to be unlikely - paragraph 24, what was considered to be unlikely to have been intended by the Commonwealth Parliament with respect to one of those subsections in one of those provisions.  Then there is reference to the Judiciary Act and some of the cases dealing with that provision in the Judiciary Act – Maguire v Simpson and Dao on the next page.

HAYNE J:   Do you not have to cut to the chase on page 375 and read the answer given to question 1?

MR HOLDENSON:   Page 375 is ‑ ‑ ‑

HAYNE J:   Answer 1:

The claim made under the Trade Practices Act 1974 (Cth) against the State of New South Wales in these proceedings cannot be maintained. Otherwise, inappropriate to answer.

MR HOLDENSON:   That is right.

HAYNE J:   This claim will not succeed but otherwise inappropriate to answer.

MR HOLDENSON: Inappropriate to answer. Well, I was attempting to illustrate - and indeed I was no doubt making a meal of it – that the task of statutory construction engaged in by the Court in those paragraphs 9 through to 36 is nothing other than the task with which the court below was charged, and indeed did engage in, in the two judgments. Paragraph 37 – as the answer as put at paragraph 37 and there is the re‑answer in paragraph 38. So the question was reformulated, explained and answered and, in our submission, apart from the fact that the answer to the reformulated question below is wrong, that is what the court below did.

If this Court were to re‑answer the reformulated question or, for that matter, answer the first question as formulated by Justice Weinberg, then this Court would be engaging in precisely the same process as this Court engaged in with respect to the first answer to the first question in Bass. That is entirely permissible because if one moves on to paragraph 52 at page 358, at paragraph 52 at 358 of the report the obvious statement is made:

Preliminary questions may be questions of law, questions of mixed law and fact or questions of fact.  Some questions of law can be decided without any reference to the facts.

In our submission, that is precisely this case.  Some questions of law can be decided without any reference to the facts and that certainly goes for the reformulated question and it also goes for at least question 1 in the questions formulated by Justice Weinberg.

Your Honour Justice Hayne asked me about demurrers and things being demurrable.  That is dealt with in paragraph 50 on page 357 and, indeed, perhaps if one were to go back to those questions as formulated by Justice Weinberg and they are at page 925 of the third volume of the application book, those questions are really a little bit like what would occur on a demurrer because with a demurrer the allegations or assertions made by the Crown within the wording of the charge – perhaps with particulars incorporated therein as per what was said in the New South Wales case of Glynn – at the end of the day, what gets decided is referrable to the contentions of the prosecution, the Crown, and the court in dealing with the demurrer is certainly not at large.

HAYNE J:   That proposition can be turned into a more general proposition, can it not, as being that a case can be stated in the form of “If, as the prosecution alleges and the defendant denies, the facts are A, B, C, D.  Do those facts if proved establish?” and that is a question that will arise at trial.

MR HOLDENSON:   Yes, and the reason for that is because when your Honour said the A, B, C and D, as is apparent from paragraph 50 in Bass, the facts are being identified with precision.

HAYNE J:   Yes, but the question that will arise at trial is a question that has to be fact specific:  (a) the judge has to tell the jury that if you are satisfied beyond reasonable doubt of facts A, B, C and D, you should convict.  Unless you are satisfied of each of A, B, C and D, you must acquit.

MR HOLDENSON:   Yes, and one would incorporate into that, of course, burden of proof and so on ‑ ‑ ‑

HAYNE J:   Yes, of course.

MR HOLDENSON:   ‑ ‑ ‑but we need not trouble ourselves with that.  Indeed, your Honour has focused on the end of the trial.  On our analysis, it has to be done earlier.  It has to be done immediately after at least the defence opening ‑ ‑ ‑

HAYNE J:   Well, it is a question that will arise at trial ‑ ‑ ‑

MR HOLDENSON:   You are going to have to decide at the end of the day, after six weeks.

FRENCH CJ:   It may go to questions of relevance, too.

MR HOLDENSON:   I am sorry, your Honour?

FRENCH CJ:   Questions of relevance of particular evidence.

MR HOLDENSON:   That would have to be decided even earlier because it is not as though that evidence could just go in and then get dealt with down the track in some way.  By reason of its content – and I will not remind your Honours of it, it is in the application books, we are dealing with pseudonyms – it is indeed prejudicial to whatever case there be at the end of the day of the accused.

HAYNE J:   But the question what does section 1041A mean is a question that encompasses, but is not limited to, the question that will arise at trial.

MR HOLDENSON:   That is right.  But whatever answer I give to that I do not want it to be thought that we are accepting for one moment that the reformulated question or, indeed, any of the three questions formulated by Justice Weinberg was anywhere near as general as, what does the section mean.

FRENCH CJ:   But you did it seemed to me concede, if that is the right word, that the questions as formulated by Justice Weinberg were sufficient unto the day.

MR HOLDENSON:   Until today?

CRENNAN J:   Unto the day.  You said we finished up with an amended question.

MR HOLDENSON:   Yes.

CRENNAN J:   We are not here to debate the amended question seemed to be your position, but I think what was being put to you is that Justice Weinberg’s questions were directed to answering a concrete question of law, to use Justice Kitto’s words, necessary for the jury to perform its function, in this particular case, in accordance with the law.

MR HOLDENSON:   And that is why I hoped I made it clear that our alternative is that the questions put by Justice Weinberg can be answered.  Just with respect to Justice Weinberg and Justice Coghlan, the formulation of the questions by Justice Weinberg as being specific to the case is what one would expect.  A perfect understanding of what would be required in order to conduct the trial if there be a trial to be conducted.  That was the frustration which was being expressed by Justice Coghlan earlier on.  This has to be determined.  No trial can be conducted and, indeed, once determined it may be that we all come to realise that the Crown have completely misconceived it. 

Both Justice Coghlan and Justice Weinberg were particularly sensitive to the position in which not just the parties but the judge and hence, the community, be placed and how it had to be necessary, and that is why the words of Justice Kitto are, indeed, in our submission, applicable to this case.  It just had to be determined.  Chief Justice Warren dealt with this in her judgment below.  It was just going to be potentially a complete farce if it not be dealt with at that early stage.  Justice Weinberg was sensitive to that.  His three questions were good. 

We have come up here prepared to proceed by reference to the amended question, but the alternative submission is if that is determined by this Court to in some way be too general or not direct and immediate, I think was the phrase put to me by your Honour Justice Keane and the questions formulated by Justice Weinberg are better in that regard, well the alternative submission is well, that is the way to go, if not the primary submission.

Of course, returning to Bass, there was more to Bass than question 1, there was also other questions and if I could just take your Honours quickly to some passages with respect to the other questions in order to make the submission and illustrate the point that what occurred here with respect to the amended question and, indeed, what might have occurred with respect to the original three questions put by Justice Weinberg are certainly not anything like the situation with the other questions in Bass.  The second question and, indeed, the third question are set out in paragraph 39.  At 39 your Honours will see questions 2 and 3 on page 353.  Question 2 reads in part:

“Whether, having regard to the matters pleaded in the amended Statement of Claim and the material contained in the agreed bundle of documents –

that is question 2.  There is an answer there in the same paragraph.  I will not bother with question 3 at the moment.  Paragraph 43 of the joint judgment made reference to that material and what it was that was said about that material in paragraph 44.  Just moving on to the conclusion of this Court with respect to that material, it is in paragraph 49:

As the answers given by the Full Court and the declaration it made were not based on facts, found or agreed, they were purely hypothetical.  At best, the answers do no more than declare that the law dictates a particular result when certain facts in the material or pleadings are established.  What those facts are is not stated, nor can they be identified with any precision.  They may be all or some only of the facts.

and it goes on.  The short point we make, with respect, at paragraph 49 is that the court below was certainly not placed in anything like that territory.  Paragraph 53 - just the final passage in Bass to which we would seek to take the Court - the Court makes the point that:

Special problems can arise where the preliminary question is one of mixed fact and law.

Then reference is made to the passage from the judgment of Mr Justice Brooking in the Supreme Court of Victoria in Jacobson v Ross and it is there – perhaps I should read it:

“Care must be taken to ensure that, in one way or another, all the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable . . . as facts assumed to be correct for the purposes of the preliminary determination, or as facts which both sides accept as correct -

The word is “or”:

or as facts which are to be judicially determined –

we would say by the jury –

Failure to do this, and in particular failure to perceive that the facts alleged in a pleading are some only of the facts relevant to the determination of the preliminary question, may make the order for preliminary determination unfruitful.”

The concluding passage in the judgment of this Court is then set out at the end of that paragraph 53 and the Court described that sort of thing as being contrary “to the judicial process”.  That is certainly not what Justice Weinberg was setting up – or sending up to the Court of Appeal.  It was not contrary to the judicial process.

Another example in the reports, as we read them, if we just work by reference to the amended or reformulated question, where a question of law gets decided without any reference to the facts is – and we have cited the case in the outline of submissions.  It is the decision of your Honour Justice French as a trial judge in the Federal Court, the case of Blurton v Minister for Aboriginal Affairs (1991) 23 FCR 442. We do not need to take your Honours to it. That is where it was held that the preliminary issue was one which was simply a matter of the proper construction of a section of the Act and with respect to determining what that particular provision meant it was expressly said that no evidence was required to be adduced.

Another example is provided by that case of Jacobson v Ross [1995] 1 VR 337 which is actually quoted from and cited on a number of occasions in this Court’s decision in Bass.  Mr Justice Brooking provided an example not dissimilar.  His example of a question of law which could be determined without any facts whatsoever was whether or not the word “person” in a particular section of a particular Act meant or included corporation. 

So moving on to the criticism to our argument which is put against us by the respondent it is our submission, and I will be more particular in just a moment, that when regard is had to all of the authorities upon which the respondent relies there is nothing within any of those authorities which suggests, let alone demonstrates, that the answering of the amended question, or for that matter the original three at page, I think, 925 of the application book, was in breach of or in conflict with or contrary to any of the principles laid down in any of the cases.

Perhaps the first, albeit I am not sure that it is chronologically the first, but the first is Mellifont v Attorney-General (Qld) (1991) 173 CLR 289. At the trial of the accused, the prosecution entered a nolle prosequi with the consequence that the then accused was thereby discharged. The Attorney‑General for the State of Queensland brought a reference to the Court of Appeal under section 669A – that is at the foot of page 297 of the report, 669A(2)(b).

The Attorney‑General referred several points of law in the form of questions to the Court of Criminal Appeal of Queensland, and that court answered those questions, and the first issue for consideration by this Court is articulated at the head of page 303, and that is set out there as namely was the decision given by the Queensland Court of Criminal Appeal an impermissible “advisory opinion”?  Your Honours will there see, indeed it is on the first line of that page 303, and then again it is in the next paragraph at about point 2, the Court reminded itself of the case of In re Judiciary and Navigation Acts, and then answered the question in the negative, that is, it was not an impermissible advisory opinion which was given by the Queensland Court of Criminal Appeal.

The point of this case, in our submission, is this, and I will come to the particular passage in a moment.  The answering of such questions need not be such as to finally determine the rights of the parties.  There is no constitutional impediment if the answering of the questions is nothing more than an important step along the way.  Indeed, even if it be said that there is some aspect of the answer to the reformulated question in this case which goes beyond the four corners of this case, the answering of the question is certainly an important step along the way.  If I could take your Honours to page 303 at about point 5 on the page, the paragraph which there commences where this Court makes reference to the case of O’Toole, but a little after that:

Such answers are not given in circumstances divorced from an attempt to administer the law as stated by the answers; they are given as an integral part of the process of determining the rights and obligations of the parties which are at stake in the proceedings in which the questions are reserved.  Once this is accepted, as indeed it must be, it follows inevitably that the giving of the answers is an exercise of judicial power because the seeking and the giving of the answers constitutes an important and influential, if not decisive, step in the judicial determination of the rights and liabilities in issue in the litigation.  Viewed in this context, it matters not whether the giving of the answers is, as a matter of legal theory, a binding determination –

and it goes on.  Then the other point about this case is at the foot of 304, over to the head of 305.  The Court determined that there was a decision with respect to a “matter” which of course has significance with respect to all of this in a constitutional context, and that was there determined, and indeed at 305 at about point 2 on the page:

In this situation, the decision on the reference was made with respect to a “matter” which was the subject-matter of the legal proceedings at first instance and was not divorced from the ordinary administration of the law.

KIEFEL J:   The reference to “not divorced from” that appears there than the earlier part of the quotation that you have made.

MR HOLDENSON:   Yes, and that “not divorced from” comes from, it would seem to me ‑ ‑ ‑

KIEFEL J:   In re Judiciary and Navigation Acts.

MR HOLDENSON:   Yes, but it was also the subject of reference - the language was “not dissociated from” in O’Toole.  Perhaps I should just take your Honours to O’Toole.  I mentioned ‑ ‑ ‑

KIEFEL J:   Does it suggest that there needs to be a relationship between the question of law posed and the law sought to be administered?

MR HOLDENSON:   There must not be no relationship - if I can put it that way; that is the language of caution, but I did say it is referrable to O’Toole.  Could I take your Honours to O’Toole (1990) 171 CLR.  I made reference to this earlier in a slightly different context about answering questions and not wasting time.  That was the case where this Court held that the Full Court of the Federal Court had been correct in answering the questions on the case stated.  There is some interesting language at the foot of 254, the very foot of 254 in the judgment of his Honour Justice Brennan, as he then was, in the second‑last line of the page, the questions:

were ripe for determination.

That is certainly, albeit not language used by either Justice Coghlan ‑ ‑ ‑

FRENCH CJ:   Metaphorical.

MR HOLDENSON:   Metaphorical but it is good language because that is what it was for Justice Coghlan and Justice Weinberg.  But I said a moment ago about divorced and not dissociated from - could I take your Honours back to the judgment of the then Chief Justice, Chief Justice Mason, at 244 at about point 3.  Your Honours will see again reference to - it is in about the tenth line on the page - 244, In re Judiciary and Navigation Acts:

In that case the Court held that the function of giving an academic advisory opinion to the executive government, dissociated from litigation actually in train, lies outside the exercise of judicial power.  An advisory or consultative opinion given by a court in the context of proceedings actually in train before a court, tribunal or arbitrator is an exercise of judicial power.

It goes on.  But, of course, I likened the approach made to this Court in In re Judiciary and Navigation Acts.  It was really the executive branch of government coming to this Court asking for the tip as to how the legislation might work in practice.

FRENCH CJ: If it were sufficient to answer, for the purposes of a trial, to pose and answer questions in terms of questions 2 and 3 posed by Justice Weinberg, would it be necessary in order to get to the answers that you were seeking which were affirmative answers to say that section 1041A means at least what was said in the answer to the reformulated question. In other words, do you have to pass through the gate of that construction on the basis albeit it may be non‑exhaustive but that it applies in that way?

MR HOLDENSON:   Well, you have got to go through at least either question 1 as posed by Justice Weinberg, or the equivalent thereof.

FRENCH CJ:   I am talking about the process of reasoning which gets you to the answer, the affirmative answers you seek.

MR HOLDENSON:   Yes, you do.

FRENCH CJ:   The constructional process, do you say that that must adopt a construction, albeit it may not be the only potential construction – albeit the total construction of artificial price may be wider, but at least includes that which is sufficient to produce an affirmative answer to those two questions?

MR HOLDENSON:   Yes, absolutely.  Indeed, I would almost go so far as to say, and in fact would go so far as to say, answering the amended question or question 1 necessarily leads to and enables the answering of questions 2 and 3.  There is another passage in O’Toole which is referrable to and perhaps overtaken by of course Mellifont which was decided subsequently and of course made reference to O’Toole, but at 279.5 in the joint judgment of Justices Deane, Gaudron and McHugh with respect to the answers need not:

“finally dispose of the rights of the parties” –

That is at 279.5 or 6:

In the present case, however, the answers given by the Full Court to the questions reserved for its consideration did no more than deal with certain questions of law which could be expected to arise for consideration in the course of the final hearing of the pending proceedings.

Reference then made to section 25 of the Federal Court of Australia Act:

The answers do not, however, either as a practical matter or as a matter of their legal effect, “finally dispose of the rights of the parties”.  They are merely interlocutory in character –

Then it is said:

Indeed, they correspond to a ruling or order settling a preliminary point of law and directed not towards creating or affecting immediate rights but towards –

step along the away –

the subsequent conduct of the proceedings and the ultimate determination, on the hearing, of the issues involved in the action.

Of course there is that passage at 284 to which I have already taken the Court. A case stated is desirable if it can lead to an avoidance of wasted court time. How much more relevant do we say is that here where had the Crown case been wholly misconceived, because the Crown had misunderstood section 1041A and required the accused to undergo a six‑week trial before someone turned to answering the question, not only a waste of resources but most oppressive and unfair.

Another case in this context upon which we have relied is the case of Ainsworth v Criminal Justice Commission, the declaration case reported (1992) 175 CLR 564. There is a short passage in the joint judgment of four members of the Court at the foot of 581 over to 582 and reference is made at the foot of 581 to the “inherent power to grant declaratory relief”. At the head of the next page, indeed in the first complete sentence on the next page:

However, it is confined by the considerations which mark out the boundaries of judicial power.

Just pausing for the moment, the power of a court to grant declaratory relief is confined by the same considerations which mark out the edges and the four corners of judicial power.  What you then get at 582.2 is at the end of that paragraph:

relief will not be granted if the question “is purely hypothetical” . . . or if “the Court’s declaration will produce no foreseeable consequences for the parties”.

When one has regard to the way in which I put it, the judge needs to know in order to be able to rule on evidence, would not let the case proceed after the Crown opening, defence opening, and in any event the judge had to assist the jury, under an obligation to do so.  There were clearly foreseeable consequences.  That is a point which was of course taken up by his Honour Justice Lockhart.  We have cited the case in the outline - I do not think I need take your Honours to it - it is the Aussie Airlines Case (1996) 68 FCR 406 where Justice Lockhart in determining that the primary judge had been correct to answer the question as he had and thereby grant the declaratory relief which he granted. It was appropriate because the question was of real and practical importance.

The third last case to which we will turn is the decision which is put against us of DPP v B (1998) 194 CLR 566. At pages 573 to 574 is the case stated. It is set out, as I say, at 573 to 574, but if I could just take your Honours to the end of that at 574 at about point 6 on the page your Honours will see a paragraph numbered 10 within the case stated and there is the two questions, question (1) and question (2). The question which arose for this Court, and indeed the issue for this Court is whether or not there was power to reserve those two questions, the first being:

(1)      Do I have the power to refuse to accept a nolle prosequi entered by the Director of Public Prosecutions, and

(2)      If the answer to the first question is yes, are there any limitations to the exercise of that power.”

This Court identified the issue, as I said, the issue was at paragraph 7. At paragraph 7 in the first few lines, the issue, was there “power to reserve” those two questions. The Court in paragraph 9 summarised Mellifont and in paragraph 10 that passage of Mellifont is referred to where this Court held that there was:

a “matter” which was the subject matter of the legal proceedings at first instance.

Then, in paragraph 11 this Court turns to those two questions formulated by the trial judge in the Supreme Court of South Australia. At the start of paragraph 11 it is said that:

The questions reserved in this case were cast in very general terms, apparently unrelated to any facts, not even the facts in the case stated.  That the questions were so general is, itself, a strong indication that they did not arise at any trial.

Just pausing there, in our submission, even if this Court is, for want of a better expression, somewhat critical as to the width of the question reformulated by the court below, we are certainly not in anything like this territory. If I could just take your Honours to the end of paragraph 11, that is not the end of it, the generality of the questions. There is a more “deep-seated problem”, and paragraph 12:

The difficulties in the case stated procedure, whether the case is stated in a criminal or civil matter . . . are well known.  At least some of those difficulties stem from a failure to recognise that the jurisdiction is not conferred to permit courts to offer general advisory opinions on hypothetical questions (46).

Footnote (46) is Ainsworth, and that is the passage in Ainsworth, and that is why we went to Ainsworth before this case – “produce [no] foreseeable consequences” was the passage at the end of 582, point 3 –

The questions reserved in this matter –

I am still reading from paragraph 12 –

appear to invite such an opinion.

Then if I could go to paragraph 13, just to finish this off, just focusing on the second question which is two-thirds of the way through paragraph 13, and if I could just remind your Honours of the second question:

If the answer to the first question is yes, are there any limitations to the exercise of that power?

It is just like the exam question, discuss.  Secondly, this Court held:

as the second question reserved reveals, unless that question was to be answered “no”, the Court was invited to embark upon an attempt to define the boundaries within which the power to refuse to accept a nolle prosequi might properly be exercised or to give as it did such a general answer as to be devoid of any practical utility.  On no view, however, did the question of defining the boundaries of the discretion arise at the trial of the respondent.  And yet that is what the second question asks: “... are there any limitations –

Needless to say, paragraph 14 –

the questions reserved . . . should not have been answered.

Now, had any of these questions, either the questions formulated by Justice Weinberg or the amended question in the Court of Appeal, been what misconduct falls within or might fall within section 1041A, then we would be in the territory that was before this Court in that case of B.       The case of Gee, perhaps I can just refer to, if you like, the facts of Gee – R v Gee (2003) 212 CLR 230. That was a case in which the two accused had been charged with offences contrary to the Crimes Act 1914 (Cth).

The two accused had been arraigned, they had each pleaded not guilty, and prior to the empanelment of the jury, the trial judge had made some rulings concerning the admissibility of some of the evidence which the Crown proposed to lead on the trial.  The trial judge made the rulings, but what he then did was reserve some questions for the Full Court with respect to the correctness, or otherwise, of those rulings concerning the admissibility of evidence. 

The Full Court on the case stated was asked to determine the correctness of the rulings, and it was held in no uncertain terms that the proceeding before the Full Court of the South Australian Supreme Court was a “matter”.  For example, if I do go to the passage in the joint judgment of Justices McHugh and Gummow at page 250 at paragraph 48, where reference was made to the judgment below of Chief Justice Doyle at paragraph 48:

He did not agree that the Full Court would be determining in a hypothetical or abstract fashion the legal issues to which the ruling by the District Court judge had given rise.  Doyle CJ said:

“This Court is now asked, by case stated, to consider the correctness of that ruling, to pass upon its correctness, and –

It goes on.  I will not read it all out.  This Court, at least in the joint judgment of Justices McHugh and Gummow, it was held that that reasoning should be accepted.  This case is not one which attracts the objections indicated in B, the case I went to a moment, and Bass to some forms of questions presented by adoption of the case stated and like procedures. 

There is a similar passage - I will not take your Honours to it - in the judgment of Chief Justice Gleeson in that case at paragraph 18, in the judgment of Justice Kirby at paragraph 148 and the judgment at paragraph 209 of Justice Callinan where Justice Callinan, as I recall, simply said at 209:

The question which was raised here was no more hypothetical than any other relevant question arising from time to time in the ordinary course of a criminal trial in relation to the admissibility of evidence -

and proceeded to end up making reference to Mellifont, there being no constitutional impediment to that.  Now, Gee’s Case prompts this sort of observation.  Had Justice Weinberg, in the context of determining the admissibility of evidence, perhaps some of the evidence concerning the written communications between the accused and his daughter TN, the emails and so on, which went to the purpose for which shares were purchased, if his Honour, in the context of such a ruling had determined that the judgment of his Honour Justice Goldberg in Soust’s Case was correct and then it had gone to the Court of Appeal, either by way of an interlocutory appeal, in respect of which there is a mechanism in the Criminal Procedure Act and we have them in Victoria, or if he had on a case stated reserved the question - was my ruling correct - there would be no constitutional impediment to the jurisdiction of Justice Weinberg to do any of that and no constitutional impediment for the Court of Appeal to deal with such a question as to the correctness of the ruling based upon the determination that Soust was correctly decided on either an interlocutory appeal or a case stated.  The last case in this context is the case of Assange [1997] 2 VR 247.

HAYNE J:   Other than flattery, what do you want to get out of it?

MR HOLDENSON:   What I want to get out of it is this case is a long way from that case.  The problems in that case which were literally insurmountable, it is nothing like this case at all.  I wanted to illustrate that by reference to the questions and what was there held.

In that case, if I could just do it perhaps more briefly than otherwise, if I could take your Honours to the two questions which were put before the Court of Appeal.  They are set out at the foot of page 249, and at the foot of page 249 your Honours will see the two questions, but I will just focus on the second question for the moment.  So question 2 reads:

Are the below mentioned terms, or some thereof, words that in the context of the legislation are words of common English usage, or are they words which need to be interpreted according to a technical meaning?

There in a list is (a), (b), (c), down to (h), a list of words. If I could just explain to your Honour the sources of the list of words? That was a case in which Assange was charged with offences contrary to two statutory provisions, section 76B(2) and 76D(2) of the Crimes Act (Cth) as it then was. If one turns to those provisions, and they are not set out within the judgment, but if one turns to those provisions as they were at the time of the alleged offending, those words is the list of the words that one finds as one reads those two statutory provisions. So, in effect, question 2 asks the most general of questions, what does section 76B(2) mean and what does 76D(2) mean? We are a long way from that.

As to the other question, apart from the criticism that it was unclear, the Court said, well, unclear questions, they can be made clear.  In order to do something with the question it was a case where some findings of fact needed to be made, but of course with respect to either the amended question below or indeed, at least the first question, and perhaps I should just confine it to the first question, as formulated by Justice Weinberg, there did not need to be any findings of fact, you could just answer those questions without going beyond the terms of the indictment.

So, what we say – one of the points I made as I proceeded through my oral submissions with respect to the cross‑appeal was that the illustration, and perhaps the best illustration, of the court below being able to answer either the amended question or question 1 as formulated by Justice Weinberg, did not need any consideration of the facts is the submissions we make with respect to the appeal concerning the construction, and subject to your Honours that is to where I shall now go. 

As we have discussed, the court below, in accordance with the reasoning of the majority, answered the amended question and I should just go to the page, I think it is 1164.  At 1164 is the amended question and the answer, and the obvious submission made by the applicant is that that question, after question a) is answered in the affirmative, that question has been answered incorrectly.

Now, that answer refers to cornering and squeezing, or should I say the American jurisprudential conceptions of cornering and squeezing and perhaps in order to understand what those terms mean there is an explanation in the judgment below of the meaning of those expressions. For example, at paragraph 324 on page 1144 there is the commencement of an explanation by reference to an explanatory memorandum of the 1986 Bill which led to the Futures Industry Act to which I will come in due course:

‘Squeezing’ and ‘cornering’ were not otherwise defined –

Reference made to the American case of Cargill:

In its most extreme form, a corner amounts to nearly a monopoly of a cash commodity, coupled with ownership of long futures contracts in excess of the amount of that commodity, so that shorts – who because of the monopoly cannot obtain the cash commodity to deliver on their contracts – are forced to offset their contract with the long at a price which he –

the long –

dictates, which of course is as high as he –

the long –

can prudently make it.

…

A squeeze is a less extreme situation than a corner . . . 

Then in paragraph 325 there is a bit more of that by reference to the textbook, and I will make reference to the textbook in due course, the textbook authored by McBride Johnson and Hazen, and also in paragraphs 331 and 333.  I should pause just to make the point in passing that in her judgment, Chief Justice Warren pointed out that on an examination of the American cases there is a little uncertainty at the edges and some lack of precision with respect to the precise scope of the meaning of each of those two expressions.  Her Honour Chief Justice Warren made that point in her judgment at paragraph 212, but I will not take your Honours to that.

It is our submission that the amended question should be answered as we have set out in the draft amended notice of appeal.  It could be set out in terms which very much reflect the wording of course of Justice Weinberg’s question 1.  As I have indicated on too many occasions, the answering of that question in that manner, which would be in accordance with the Crown case, would then be on all fours with the judgment of Justice Goldberg in Soust’s Case and also in the decision of his Honour Justice Dowsett in the case which is called Bond’s Case but it is actually ASIC v AAT (2010) 187 FCR 334 - Soust’s Case being reported in the earlier volume 183 at page 21.  Now, the determination of the answer to ‑ ‑ ‑

HAYNE J:   Just before we go to that can I just stay with this answer that you propose at page 1195 of the appeal book.

MR HOLDENSON:   Yes, your Honour.

HAYNE J:   First, I notice that it refers only to dominant purpose.

MR HOLDENSON:   Yes.

HAYNE J:   Does it follow that you do not contend for any substantial purpose analysis?

MR HOLDENSON:   The case was always put on the basis of and understood to be sole or dominant, so dominant would catch sole.

HAYNE J:   Yes.  This is not a question to which I think you should offer any answer at once, but the answer you proffer at 1195 is cast in a form that is abstracted from the facts and circumstances described in the case stated.  It is not expressly related in terms, I think, to, for example, the conduct of TN on particular days?

MR HOLDENSON:   Correct.  That is correct.

HAYNE J:   Is there - and this is a question, not an interrogative statement, Mr Holdenson, and it is, as I say, a question that you may wish to think about - is there a more refined answer that you would proffer in the sense of an answer that is more closely connected with the facts as stated in the case stated?  Now, as I say, that is a question you may wish to take on notice and consider over whatever adjournments intervene.

MR HOLDENSON:   Yes, I can and will do that and I am indebted to your Honour for affording me that opportunity.  The answer to the question is certainly, in part, yes, it can be done.  Indeed, just going only to the second line of that answer at 1195 where it uses the phrase “financial product”, well, “financial product” can be narrowed down immediately to securities or shares.

HAYNE J:   This particular security or share that was of X Co that was ‑ ‑ ‑

MR HOLDENSON:   I think it was called X Ltd in this case ‑ ‑ ‑

HAYNE J:   X Ltd or whatever the pseudonym is.

MR HOLDENSON:   The financial market, we can narrow that down immediately to the ASX because that was what the case was about.  So the answer is yes and we will deal with that. 

FRENCH CJ:   You would be saying, I suppose, that if you are trying to target the particular set of facts with this construction this would be a non‑exhaustive construction, would it not?  Includes, rather than means?  Or do you need to go the whole hog?

MR HOLDENSON:   If it was tailored to this case, it would be – it would have to be made referrable to the case as distinct from – for every case, so it might be ‑ ‑ ‑

FRENCH CJ:   This underlies – is underlain by the questions I was putting to you earlier about the extent to which a general construction may be more than is necessary?

MR HOLDENSON:   Yes.  Well, that can be certainly done and we will consider that over lunchtime.  My junior is going to start considering it now, are you not?

HAYNE J:   Because if you are right that the base question is how does the judge instruct the jury that may be offering some guidance to what form the answer should take, that is, if satisfied of facts A, B, C, D - to continue the example - artificial price has been maintained or effected.

MR HOLDENSON:   I remind myself of the answer I gave a little earlier, I think, to Justice Keane about – the answer that was – which we seek as formulated on page 1195 as it is at the moment is only a step away from what it is that the judge has to know in the context of the case.  I think I used the word “immediate” in my answer to your Honour Justice Keane.

CRENNAN J:   I think in Bass you emphasised the verbiage means in these proceedings, as distinct from means ‑ ‑ ‑

MR HOLDENSON:   In some other case.

CRENNAN J:   Well, means more exhaustively.

MR HOLDENSON:   Yes.  In any event, we are working on that.

BELL J:   Mr Holdenson, just before you move on, can I inquire, since there has been some discussion of answering the question in terms of how the judge instructs the jury, it would seem that in the Court of Appeal a further area of divide emerged which related to the fault element of the offence created under the Act, and that led the Chief Justice to formulating yet a further question.

MR HOLDENSON:   Yes, well, we are not there.

BELL J:   Yes.

MR HOLDENSON:   We are not that ‑ ‑ ‑

BELL J:   That divide remains and the matter will go back and the parties will be at issue and that will be sorted out in some further proceeding, is that the position?

MR HOLDENSON:   It will have to be.  But, of course, if this Court upholds the answer given to the court below, there is not going to be a prosecution for an offence contrary to 1041A.  They do not have the evidence, it is not there, there will not be.  It is all over if this Court upholds ‑ ‑ ‑

BELL J:   The matter I take up with you is:  if this Court were to take a different view and uphold the submissions that you make respecting the construction of the expression “artificial price”, there will be a further round?

MR HOLDENSON:   That is right.  In any event there will be a prosecution for something.  The majority below said the appropriate offence is the offence contrary to 1041C(1)(a), the fault element will have to be determined for that, or if it is 1041B, which I think was the alternative proffered by her Honour the Chief Justice, Chief Justice Warren, the fault element has to be determined for that.  So, fault element, for whatever case there be, yet to be resolved. 

With respect to statutory construction, as the Court has reminded us on many occasions, it begins with the words of the statute, focuses upon the text, and indeed the task both begins and ends with the text, context is to be considered, it is only useful, however, in determining the meaning of the text that which comprises context cannot alter the meaning or displace the meaning of the statutory text, and our submission in this regard as to what flows from that is focusing upon the text one gets to, in a nutshell, the ruling of Justice Goldberg is correct and it is not in any way altered, nor could it be, by that which comprises the context. 

Indeed, as to that which comprises the context, it supports that construction which I say in short terms is Soust, Justice Goldberg.  If it need be said, and I will make the submission in detail in due course, that is not the approach which was adopted by the court below, and with absolutely no disrespect to the majority below, they were distracted by one of the matters which comprises context, in our submission.

FRENCH CJ:   So, you say the text offers no constructional choice to attract the application of contextual considerations?

MR HOLDENSON:   Correct.  Indeed, when one stands back from the reasoning of Justice Goldberg, and for that matter the reasoning of Justice Dowsett in the case of ASIC v AAT, that is what flows. Section 1041A uses the phrase “financial products”. When one tracks through, and it takes a little time, all the definitions the phrase “financial products” includes both shares and futures contracts. The phrase “financial market” when one traces all that through one gets to not only the ASX but one also gets to the market for futures contracts. With respect to section 1041A(c) one gets to the phrase “creating an artificial price”, and in paragraph (d) one gets to “maintaining at a level that is artificial . . . a price”.

So just turning that into the composite phrase “artificial price”, the phrase clearly requires that consideration be given to how the price came about, what led to it and what it is the result of.  Now, the ordinary meaning of “artificial”, as was pointed out by Justice Goldberg in Soust, is contrived or constructed, not natural, not produced naturally, does not occur in the ordinary course of things.  So the starting point for the determination of the meaning of the phrase “artificial price”, that composite phrase, is that it has come about – using those words referable to the word “artificial” – in a contrived or constructed or in an unnatural manner.

So an “artificial price” is one that has resulted from or been created by a transaction where there is a purchase and a sale, corresponding sale, which is not natural or not in the ordinary course of things.  That is, where the purchaser purchases and/or the seller sells in a manner other than or for a purpose other than that which is done in the natural or ordinary way, and what is done ‑ ‑ ‑

GAGELER J:   So an artificial price is the product, you say, of an artificial transaction?

MR HOLDENSON:   No, I do not.  No, I say an artificial price comes about where one or both of the parties to the transaction – it might be just the buyer, it might be just the seller, it might be both of them – it is where one of them does it in or for a purpose which is not the natural or ordinary purpose for which buyers and sellers act, and that is the purpose for which they buy and sell is that buyers seek to buy at the lowest price possible, that is the purpose for which or with which a buyer acts, and sellers seek to sell at the highest price possible, that is the purpose with which sellers act.

But where one or both of the parties to a transaction, the purchase and a sale, act with a purpose which is otherwise or different from that and acts for the purpose or with the purpose of creating or setting the price – and I will now use a different word – that is where one or both of the parties to the transaction is not genuine, the transaction is not between two genuine parties, and the consequence of that is that an artificial price results.

FRENCH CJ:   Now, you can have one sense of an artificial price in what used to be called, I think, in the car industry and occasionally in the retail industry, a jacked deal, that is to say, parties, between themselves, just a bilateral buy and sell arrangement, elevate their price artificially and make some side arrangement so that it is not going to really have to be paid.  Here we are talking about a price for trading on a financial market.

MR HOLDENSON:   Yes.

FRENCH CJ:   So it has to be related, does it not, to the institutional arrangements which determine the price in the market?

MR HOLDENSON:   Yes.  So, going back to the question put to me by Justice Gageler, if I could continue with my answer, where there is a distortion of genuine supply and demand you have as a result created an artificial price.

GAGELER J:   Can you do that without market power?

MR HOLDENSON:   Yes, you do not need market power, market dominance, monopoly, whatever language you use, and/or the misuse of any of that in order to do this.  Let me give your Honours – and illustrate all of this by reference to the decision of Justice Goldberg in ASIC v Soust (2010) 183 FCR 21 - I do not have to take your Honours through that much of it. Could I take your Honours to paragraphs 89, 90 and 91 on page 43? Paragraph 89 - and I did this with your Honours a moment ago:

The fundamental issue to address is what is meant by an “artificial price”.

Reference is then made to the expression and words from the Shorter Oxford English Dictionary:

Having regard to the context in which the expressions “artificial price” –

that is 1041A –

and “false or misleading appearance appear –

that is 1041B –

I consider that the expression “artificial price” in s 1041A connotes a price created not for the purpose of implementing or consummating a transaction between genuine parties wishing to buy and sell securities, but rather for a purpose unrelated to achieving the outcome of the interplay of genuine market forces of supply and demand.

HAYNE J:   Now, the real sting in that expression is in the use twice of the word “genuine”, I think.

MR HOLDENSON:   Yes.

HAYNE J:   I think your submission seems to be that “genuine” is to be understood as referring to buyers and sellers motivated only by market forces of the kind reflected in Spencer v Commonwealth notions of market value.

MR HOLDENSON:   Motivated by buying at the cheapest, selling at the highest possible and that is made clear, and I am yet to get to it, of course, the judgment of Justice Mason in North v Marra where his Honour uses – that is the source of this word “genuine” in this context. At paragraph 91:

It is fundamental to the working of the free market forces of securities exchanges such as the ASX Ltd that buyers are concerned to buy securities at the lowest possible price and sellers are concerned to achieve the highest possible price.  Any different approach to the price for which securities are traded is a distortion of the interplay of the open market forces of supply and demand.

Now, when one looks at the facts in that case, one gets an illustration of – and the reason for the answer I gave your Honour Justice Gageler a few minutes ago - if I could take your Honours back to the facts, if I could start with paragraph – I have to jump around a bit and I apologise for that - paragraph 58, and it is apparent that this has nothing to do with market power, dominance, exploitation, misuse thereof.  Paragraph 58:

In short, the transaction which the defendant intended to carry out, which was in fact carried out in the closing minutes of the last trading day of 2007 on the ASX Ltd, was one which, in relation to thinly traded stock such as Select Vaccines stock, would not allow any time for any other person to conduct further trades on the ASX Ltd which might interfere with, or change, the market price of those shares.

Perhaps I should read the remainder of paragraph 58; no need to bother.  Back to paragraph 57, it sets out how it was that he did this:

instructions were given to Bell Potter by the defendant at such a time that the purchase was undertaken in the closing minutes of the last trading day for 2007, thereby ensuring that the market price of the shares was not reduced below the market price at which the shares had been purchased for him.  He had given instructions to purchase the shares at market price.  The defendant did not give instructions to put a bid price on the market for the purpose of seeing whether a seller would proffer what is called on the market an “ask” price.

FRENCH CJ:   Just before you go further in that, coming back to what Justice Goldberg said in Soust at 89 through to 91, it seems a very broadly stated test. Does it pick up, for example, a purchaser of shares wishing to acquire for reasons partly non‑economic and therefore prepared to pay an inflated price for some prized asset such as a television station or a media outlet?

HAYNE J:   You only find one buyer at that price.

MR HOLDENSON:   I know, I remember.  No, because – and if I could just answer your Honour’s question just in short terms by reference to question 1 as formulated by Justice Weinberg, it is referrable to the sole or dominant purpose – sorry, why was the transaction carried out?  Was it carried out for the sole or dominant purpose of creating or maintaining a particular price for whatever asset it was, a TV station?  No, it was not.  It was because the person really wanted that TV station or that house or whatever it was.

FRENCH CJ:   I was really asking you whether the formulation by Justice Goldberg cast too wide a net, having regard to that kind of transaction.

MR HOLDENSON:   Well, in my submission, no, but ‑ ‑ ‑

HAYNE J:   I think the difficulty may lie in the negative expression.  I suspect that his Honour in paragraph 90 “connotes a price created not for the purpose of implementing or consummating” ‑ ‑ ‑

MR HOLDENSON:   Then he has “but rather”.

HAYNE J:   Well, no, that is a proposition that would have to grapple with, say, the case of the fire sale, the person in financial distress who just has to dump the stock at whatever is available.

MR HOLDENSON:   Yes.

HAYNE J:   I think that the proposition that is underpinning your idea is expressed as a positive proposition, a purpose other than buying at lowest or selling at highest.

MR HOLDENSON:   Which means that the question as originally formulated by Justice Weinberg was very much put with respect to the facts of the case.

HAYNE J:   But I just need to understand whether you are embracing – I would understand you to embrace Justice Goldberg’s formulation, “connotes a price created not for the purpose of implementing or consummating a transaction between genuine parties”, and whether there is a distinction between that formulation and the formulation I proffer.  Perhaps there is none.

MR HOLDENSON:   There is a bit more to the reasoning of Justice Goldberg, and it might be a little unfair to be focusing just on 89, 90 and 91.  So if I could move on to paragraph 93, where reference is again made to the judgment of Justice Mason in North v Marra, just the last sentence, albeit referrable to the task before Justice Mason, second last sentence:

Mason J focused on the intention or purpose of the conduct of a relevant buyer or seller in market.  His Honour was concerned to ensure that market prices reflected the operation of the genuine forces of supply and demand.

Paragraph 94 records the submissions made on behalf of Mr Soust.  Paragraph 95 –

This assumption is misplaced.  It places emphasis only on the existence of a genuine seller and fails to take into account that there also needs to be, as Mason J observed in North v Marra Developments Ltd, a genuine buyer whose purpose in buying the shares is to achieve a genuine purchase at the lowest possible price and thereby reflect the forces of genuine supply and demand.  The defendant was not such a genuine buyer.  His purpose in buying the shares was rather to set the market price.

That is the sort of language which is referred to by Justice Weinberg in his question 1:

Mason J excluded such a buyer from the equation of the interplay of the forces of genuine supply and demand.

Paragraph 96, back to the facts:

The defendant did not wish to acquire or own shares . . . on 31 December 2007.

Jumping a few lines:

What he wanted to do was to have the share price . . . increase at the close of the trading . . . He was not intending or proposing to buy shares . . . at the lowest price which he could on the market. He could only achieve his object –

which was to qualify for some sort of employment bonus –

by ensuring that the price for trading in Select Vaccines shares increased.

And because of his knowledge, he was able to do that, that is paragraph 97.  So paragraph 98 is perhaps the conclusion:

I am therefore satisfied that at the time the defendant spoke to Bell Potter . . . and gave instructions to purchase . . . he took part in –

and contravened 1041A(c).  Paragraph 99, I will come to in due course.  Paragraph 99, having concluded in 98 that there is a contravention of 1041A(c):

I am further satisfied that by giving this instruction to Bell Potter the defendant committed an act which had the effect of creating a false and misleading appearance with respect to the market for and the price for trading in . . . This resulted in a contravention of s 1041B(1)(b) of the Act.

So one course of conduct gives rise to more than one offence, and I will come to it in due course, and with absolutely no disrespect to the reasoning of the majority, that is something which was not appreciated within their reasoning.  So what we say, as a result of all of that, in a nutshell, is that the learned Chief Justice below, Chief Justice Warren, at paragraph 227 was correct and, indeed, it is in two halves, paragraph 227, which very much captures the point that your Honour Justice Hayne has been putting to me, and maybe there are two halves to all of this.  Paragraph 227:

In summary, an artificial price is a price which does not come about through transactions reflecting basic forces of supply and demand working in an open, efficient and well‑informed market.  This may capture a variety of transactions, including those that involve cornering and squeezing.  More relevantly for the purposes of this case, it is a long‑standing and accepted principle in Australia that a trader whose purposes in conducting transactions is to set or maintain the market price is excluded from being part of the genuine market forces of supply and demand.

So there are really, in her Honour’s opinion – in our submission her Honour was there correct, there are two components to this aspect of 1041A.

GAGELER J:   Is that all you are trying to capture in the proposed answer to amended question 1 that appears at 1195?

MR HOLDENSON:   Well, both the first question formulated by Justice Weinberg directly and the answer which we seek very much catches the last part of that which flows from – the last part of paragraph 227, which of course flows from, indeed is a consequence of, what is in the first part.

GAGELER J:   So all you are trying to do with the words that follow “in the sense that” in your proposed ‑ ‑ ‑

MR HOLDENSON:   Yes, I had just better go to the page.  Sorry, “in the sense” – yes.

GAGELER J:   In the sense that you are just trying to exclude certain transactions from the transactions that set the market price, is that all you are trying to do?

MR HOLDENSON:   Well, they are not relevant for us.  We are narrowing it down to this case, maybe that phrase “in the sense” is referrable to this case and the word I think used by Chief Justice French in discussion with me earlier, I think Chief Justice French used the word “including”.

GAGELER J:   I will just tell you the problem I am having with it.  The first part of the answer appears to refer to a market price, that is, a price that occurs in a financial market, it being a price that is not the product of genuine forces of supply and demand.  I understand that.  Then you have the words “in the sense that at least one of the parties to the transaction” - now, I am not sure what transaction you are referring to there - “took part in it or carried it out for the dominant purpose”.  What is the transaction you are referring to there?

MR HOLDENSON:   The transaction is the transaction which is identified in the fourth word of the third line:

a transaction that was not the product of the genuine forces of supply and demand –

The transaction is a purchase and sale of a share.  I am sorry if I have missed the ‑ ‑ ‑

KIEFEL J:   Do you need any more – can I just suggest this?  Do you need the words in the third line “that was not the product”, et cetera, down to the second last line?  I will read it out.  Do you need the words:

that was not the product of the genuine forces of supply and demand in the sense that at least one of the parties to the transaction took part in it –

Or is it sufficient to answer –

that has been effected by a transaction . . . carried it out for the dominant purpose of creating or maintaining the price of the financial product in question?

MR HOLDENSON:   It is probably enough and it is probably ‑ ‑ ‑­

KIEFEL J:   At least in this particular case.  That would overcome the difficulty of the television example that the Chief Justice gave and some inadvertent trading that might not be described as “genuine forces of supply and demand” but nevertheless absent the purpose to which you prefer.

MR HOLDENSON:   Well, the submission I made in response to the question raised by the Chief Justice concerning the television station was that that purchase of that asset did not involve a contravention of this sort of provision.

KIEFEL J:   But only because the purpose was absent.  That is what I am trying to focus the question to, is limiting the answer to the purpose of creating or maintaining the price of the financial product.

MR HOLDENSON:   Yes.

KIEFEL J:   It will ordinarily or most often be the case that a transaction carried out for a purpose that is not one having regard to genuine forces of supply and demand will produce the result, but that would not always be the case.

MR HOLDENSON:   Well, the amendment your Honour has made is almost such as to catch the wording of the first question put by Justice Weinberg at 925, almost.  Before I give the final answer to your Honour, my junior and I are going to work on this at lunchtime in accordance with what I said to Justice Hayne a little earlier.  So nowhere in any of those passages in the ‑ ‑ ‑

HAYNE J:   Well, sorry, could I just add to your homework on that subject that - no good pointing off to your left, Mr Holdenson, I am adding to your homework. Section 1041A prohibits a person taking part in a transaction, omitting words, that has “the effect of creating an artificial price”. A possible point of view about the answer you propose in your draft notice of appeal is that it is not going much further than restating the statutory words.

A transaction – I omit the negative – a transaction, the dominant purpose, a transaction where the dominant purpose of one of the parties was to create or maintain the price.  The party in question must be the accused, surely, if it is going to be an answer that is relevant to the issue at trial.  The party who is creating or maintaining the price must be the accused, surely.  The innocent vendor is surely not committing the offence.

MR HOLDENSON:   Correct.

HAYNE J:   So the answer you are proffering is a transaction that was not something but was a transaction undertaken by the accused for the dominant purpose of creating or maintaining.  Is that the way the answer is shelled out and if it is shelled out in that way, and again you need not answer these questions instantly, but if it is shelled out in that way are we really inviting us to tell the trial judge other than read the Act?  Are we adding anything to what already appears in the Act is the baseline?

MR HOLDENSON:   Going back a step, with respect to the factual scenario with respect to the accused, the charges on the indictment, some of them - they read “took part in” a transaction and so therefore he becomes a party to the transaction of the daughter TN, so putting that to one side, no, the question, whatever be the question, Justice Weinberg’s question 1, or the amended question 1, and answered, takes this case away if it is answered as we say by way of submission it should be answered and getting the words right it would mean that we would be away from the dissenting judgment of Mr Justice Priestley in the case of Fame and we would be away from misuse of market power, dominance, monopoly because there is nothing within the analysis of Justice Goldberg in Soust, nor in the judgment of Justice Dowsett in the ASIC Case, nor in the reasoning of Justice Mason in North v Marra, to which I am yet to come, which is in any way referrable to market power or dominance.

So getting market power, dominance, cornering, squeezing out of the answer gets us back into this case.  As I said a moment ago, I think in response to your Honour Justice Gageler, and I apologise for repeating myself, there is nothing in the analysis of any of those cases, Soust, ASIC v AAT or North v Marra which is referrable to market dominance, monopoly, power, whatever the expression be and so ‑ ‑ ‑

HAYNE J:   Again, can I just offer two phrases that may be worth considering or may be instantly rejected in examining the answer, but it seems to me your argument includes, it may be your argument comes to, that the transactions of purchase were for the purpose of ensuring that the closing market price of X Co exceeded the strike price on the margin lending and/or the purchase was not for the purpose of buying at lowest available price.  Now, as I say, treat them as idle thought bubbles, Mr Holdenson ‑ ‑ ‑

MR HOLDENSON:   I will not do that.

HAYNE J:   ‑ ‑ ‑ and dispose of them and do with them as should be done with gifts coming from the Bench.

MR HOLDENSON:   It is not one of those bubbles.  Moving on from the words – and I will get to North v Marra in this context – it is necessary to have regard to context which includes the mischief at which the provision is directed, statements within the extrinsic material, legislative history, and as I indicated before in opening this part of the case, it is our submission that when regard is had to that which comprises the context it all supports our construction of section 1041A.

Could I invite your Honours at the commencement of our submissions about context to have regard to these sections in this part of the Act? Section 1041A is about something which is artificial. Section 1041B is about false or misleading appearances. Section 1041C, disregarding a word of the heading, talks about fictitious or artificial transactions. Section 1041D, when one looks within the wording, one gets into words which deal with false or misleading or false or deceptive. It is the same, I think, in 1041E, which is about “False or misleading”. Section 1041F talks about “dishonest concealment” – that is in 1041F(1)(b). Section 1041G is about “Dishonest conduct”. Section 1041H is about “Misleading or deceptive conduct”.

Now, when one just stands back and looks at the provisions in that sort of way, in my submission, it is clear that this part of the Act is directed at – and, indeed, each and every one of these provisions is directed at ensuring the integrity of the market and the market price and, to use the language, in the trading of financial products, entirely consistent with that which comes at the start of Chapter 7 which contains these sections – that is section 760A.  Perhaps I should start with paragraph (c).  It speaks of:

fair, orderly and transparent markets for financial products –

Paragraph (a), just the first line, that is 760A(a) –

confident and informed decision making by consumers of financial products –

To the same effect, ensuring integrity, perhaps one can then go to the revised explanatory memorandum which introduced in 2001 - it went with the Bill which introduced this chapter into the Corporations Act.  Now, the revised explanatory memorandum is behind tab 5 of one of these large folders – at least, it is large that I have.  Tab 5 is the revised explanatory memorandum and if I could take your Honours – I just want to take your Honours to one paragraph of it at the moment but I will come back to it in a little more detail in due course, but paragraph 1.5 on the page numbered 1.  The Bill implements certain proposals.  I will not pause to read all of that but it goes on to say:

In addition, it will give consumers a more consistent framework of consumer protection in which to make their financial decisions.  The Bill will therefore facilitate innovation and promote business, while at the same time ensuring adequate levels of consumer protection and market integrity.

Now, as I say, I will take your Honours back to, if I might by way of illustration of some submissions I will make in due course about context in a minute, but if I could move now to the decision of this Court in North v Marra Developments Ltd (1981) 148 CLR 42. As I recall the judgment of Justice Mason, he does not use the word “integrity” but he does repeatedly use the word “genuine” which, in our submission, is of course referrable to the very same notion. It is about something being true, unimpaired, not distorted of integrity.

Now, North v Marra was concerned with section 70 of the Securities Industry Act (NSW), which was the first of the predecessors to section 1041B. There was an equivalent provision in Victoria. The Acts had the same title in Victoria. It was called the Securities Industry Act, and again, it was section 70. Now, the seminal passage in this area of the law is at the foot of page 58 in the judgment of Justice Mason. Your Honours will see on page 58, just below the middle of the page, the then section 70 of that New South Wales Act. Your Honours will see that it uses the phrase:

false or misleading appearance of active trading . . . or a false or misleading appearance with respect to the market for, or the price of, any securities.”

I will just pause for one moment to say I indicated that section 70 is the first of the predecessors which lead to 1041B. The first of the predecessors which led to 1041A was section 71. At the foot of 58, at about point 7 on the page –

In terms the statutory prohibition is directed against activity which is designed to give the market for securities or the price of securities a false or misleading appearance.  In this setting, “calculated” means “designed” or “intended” . . . It is not altogether easy to translate the generality of this language into a specific prohibition against injurious activity, whilst at the same time leaving people free to engage in legitimate commercial activity which will have an effect on the market and on the price of securities.

As I read that I am reminded of what your Honour Chief Justice French - about the transaction of the purchase of the TV station:

Purchases or sales are often made for indirect or collateral motives, in circumstances where the transaction will, to the knowledge of the participants, have an effect on the market for, or the price of, shares.  Plainly enough it is not the object of the section to outlaw all such transactions.

It seems to me that the object of the section is to protect the market for securities against activities which will result in artificial or managed manipulation.  The section seeks to ensure that the market reflects the forces of genuine supply and demand.  By “genuine supply and demand” I exclude buyers and sellers whose transactions are undertaken for the sole or primary purpose of setting or maintaining the market price.  It is in the interests of the community that the market for securities should be real and genuine, free from manipulation.  The section is a legislative measure designed to ensure such a market and it should be interpreted accordingly.

Now, just pausing there, albeit referrable to the original of the predecessors, the first predecessor to section 1041B, in our submission, indeed, as was held by his Honour Justice Goldberg in Soust, that passage is equally applicable to the first of the predecessors to section 1041A which was section 71. It is not as if we are talking about two different markets. It is all about the market, as it turns out, for the buying and selling or transactions in securities. So what his Honour has done in that paragraph on page 59 is at the start of the paragraph speaks of genuine forces of supply and demand, and then the next part of the paragraph deals with transactions carried out or undertaken, “sole or primary purpose of setting or maintaining the market price”.

As I read that paragraph I look at the answer proposed by the applicant in the amended draft notice of appeal and I can almost work out how it was that that answer sought has been drafted because it is referrable to what is set out in that paragraph of the judgment of Justice Mason.  Perhaps I should ask Mr Winneke.

GAGELER J:   It does not quite get there, does it?  I mean, your proposed answer does not quite capture the point that Justice Mason was making or that Chief Justice Warren was making at paragraph 227.  What they seem to be saying – let me put it in my words and you can respond to it – is that an artificial price is a price that is different from that which it would be in a market where the only buyers and sellers were those who were engaged in genuine market activity.

MR HOLDENSON:   Genuine market activity would then need to be, for want of a better expression, explained or ‑ ‑ ‑

GAGELER J:   But it is not linked to the purpose of the particular impugned transaction.  You are looking at the market price and comparing it with what it is as a result of the transaction with what it would be in the absence of transactions which were not the product of genuine market forces.

MR HOLDENSON:   But if one goes that bit further and speaks of sole, dominant, primary – whatever language it is – purpose of setting a price or creating a price, one then explains the answer with respect to non‑genuine market forces, non‑genuine supply and demand.

GAGELER J:   All I am suggesting is there is danger in mixing up the particular impugned transaction with the meaning of “artificial price”.

MR HOLDENSON:   We will give thought to that when we reformulate what we have to reformulate.

BELL J:   The terms of the provision make it an offence to:

take part in, or carry out . . . 

(a)a transaction that has or is likely to have; or

(b)2 or more transactions that have or are likely to have; the effect of:

(c)creating an artificial price –

One is directing attention to the effect of a transaction, or more than one, on the creation of the artificial price.

MR HOLDENSON:   We have some drafting to do.

FRENCH CJ:   Every answer that involves an economic metaphor invites difficulty, it seems to me, genuine forces of supply and demand and so forth.  Your case, as I apprehend it, in the prosecution – I may be oversimplifying it – but it reduces to the proposition that the transactions were entered into for the purpose of the avoidance of margin calls by influencing the reported market price on the ASX, and that that is a transgression of 1041A.

MR HOLDENSON:   Yes.  As to that not being an oversimplification of the Crown case, it was put in really not many more words in paragraph 8 of the applicant’s submissions on this application.  Paragraph 8 sets out in about eight lines that which your Honour just put to me, and then the last two lines read:

In such circumstance, the resulting price is an ‘artificial price’ and thus the transactions contravened ‑ ‑ ‑

FRENCH CJ:   It is good to hear you are not condemning me for plagiarism.  We will now adjourn until 2.15.

MR HOLDENSON:   If your Honours please.

AT 12.40 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

FRENCH CJ:   Yes, Mr Holdenson.

MR HOLDENSON:   Over the luncheon adjournment we engaged in some discussion with respect to the answer sought and in that regard we have provided to the Court Crier, and hence to your Honours, the document which reads – and the first part has been drafted by reference to the answer provided by the court below:

The expression “artificial price” in s.1041A of the Corporations Act2001(Cth) is used in the sense of a term having legal signification (as opposed to its ordinary English or some non‑legal technical sense) –

that is from what is already there –

and means, for the purposes of the indictment (0054 of 2011) filed in the Supreme Court of Victoria in this proceeding, a price for a share in X Ltd on the ASX that has been, or was likely to have been, created or maintained by a transaction or transactions –

and we have “transaction or transactions” because some of the charges referred to a transaction, singular, some to transactions, plural.  We have in square brackets there:

[the subject of each and all of the charges in the indictment and] in which the Accused took part, which was or were carried out for the sole or dominant purpose of creating or maintaining a particular price for trading in that share on the ASX –

and then again reflecting some uncertainty amongst us –

[thereby enabling the Accused to avoid margin calls on the lending facility which the Accused had with Opes Prime Securities Ltd and which was or were –

that is the transactions –

not carried out for the purpose of purchasing those shares at the lowest price possible].

We have thereby incorporated much – not all – much of the answer from the answers sought in the draft amended notice of appeal and reflects the wording of question 1 of the questions reserved by his Honour Justice Weinberg and we have made it very much referrable – at least, we have attempted to – this case, this indictment, these charges, this case.

FRENCH CJ:   Now, are you seeking leave to further amend your draft notice of appeal?

MR HOLDENSON:   Yes, we will need to do that, of course, in order to reflect this document.

FRENCH CJ:   All right, thanks.  We will hear from Mr Moshinsky about that in due course.

MR HOLDENSON:   Yes.

GAGELER J:   Just to understand the difference between this answer and the answer given by Chief Justice Warren at page 1124A - you see her answer to question 1 had a proviso.  Do you accept that proviso?

MR HOLDENSON:   No. In our submission, that is wrong. The bit her Honour added on, in our submission, does not flow from the construction of the words on the page of section 1041A. In our written submissions on this application in one or more of the paragraphs we have drawn attention to and made the submission that her Honour has there erred with respect to that additional bit.

GAGELER J:   So is it your submission that the “artificial price” referred to in section 1041A can be the price of the impugned transaction?

MR HOLDENSON:   Can be ‑ ‑ ‑

GAGELER J:   Just simply the price of the impugned transaction?

MR HOLDENSON:   Yes.

GAGELER J:   Thank you.

MR HOLDENSON:   I have taken the Court to North v Marra and if I could just conclude the submissions by reference to the judgment of his Honour Justice Mason. I think I had made the comment in passing that the paragraph at the head of the page from 59 point 1 to about 59 point 3 was probably the source of the answer sought within the draft amended notice of appeal. I also made the submission that that passage is equally applicable to section 1041A. It is in the next paragraph through to the passage about two‑thirds of the way down the page that Justice Mason excluded buyers and sellers whose transactions are undertaken for the sole or primary purpose of “setting and maintaining the price”. That is at about 59 point 5. Next paragraph:

When purchases have been made of shares in a company at or about a particular level for the purpose of setting and maintaining a market price for those shares there is a breach of the statutory prohibition.

That was of course the statutory prohibition created by or contrary to section 70, which is the predecessor of course to 1041B.

CRENNAN J:   Do you make any submission about the relationship between 1041A and 1041C?

MR HOLDENSON:   Yes, I will make a submission referrable to a passage in the judgment of Chief Justice Gleeson in Fame and a case which is not in the material but I think has been provided to the Court crier, the case of O’Halloran, where Justice Heydon in the New South Wales Court of Criminal Appeal – and I will come to these passages in due course – drew attention to the fact that a breach of the provision which is now section 1041B would have the effect of creating – or there having been created an artificial price which, in our submission, is the artificial price the subject of 1041A, albeit there was no 1041A in those terms with that phrase “artificial price” in it at the time of Fame, nor at the time of the case of O’Halloran.

Of course, in Soust’s Case the means by which Soust did what he did by giving the instructions he did to the broker – I think it was Bell Potter –the instructions had the effect of contravening 1041B and, of course, he contravened 1041A(c), so one course of conduct can be multiple offences.  These offences are very much not mutually exclusive, which is of course not unknown in the criminal law.  We see that all the time with theft and obtaining property by deception type provisions and assault provisions and there can be no doubt about it, in our submission, but in any event – and I will come to it – what I have just said by way of submission is confirmed when regard is had to section 1041J towards the end of this part.  Section 1041J reads:

Subject to any express provision to the contrary, the various sections in this Division have effect independently of each other, and nothing in any of the sections limits the scope or application of any of the other sections.

So, statutory acceptance of the proposition that they can well overlap, certain conduct can fall within more than one.  Just before concluding with Soust and North v Marra if I could just identify, without taking your Honours to it, and urge upon your Honours the reasoning contained within paragraphs 48, 49 and 50 of the judgment of Justice Dowsett in the ASIC v AAT Case.  So, with respect to context, Justice Mason spoke in terms of object.  The submission is that the construction for which the applicant contends is consistent with, and indeed supported by, the purpose or object of these provisions, preservation of integrity.

Now, with respect to legislative history, an enormous amount of paper in this case has been devoted to legislative history.  I have mentioned in passing the different predecessors of some of these provisions.  If we could assist the Court at the outset by saying this; in paragraph 201 of her judgment, the judgment of the Chief Justice, which is to be found in the application book at page 1101 of the third volume, there is set out in the form of a table the legislative history of these provisions.

The left‑hand column, the column headed “A” for “apple”, leads down to the current provision of section 1041A, and the history is down the page. It starts with section 71 of the 1970 Act, then confined to securities. The next provision is the 1980 Act. It is section 123, or more precisely, section 123(1), (2) and (3). Then with respect to futures, which came about in 1986 with the Futures Industry Act 1986, there was section 130, and section 130 used the composite phrase “artificial price” ‑ ‑ ‑

FRENCH CJ:   That is the first appearance of that collocation?

MR HOLDENSON:   Yes, it was.  Then there was maintained the two routes - securities then in the Corporations Act 1989 and in 2001 it was section 997(1), (4) and (7) of the Corporations Act 1989 or the Corporations Law, and then the Corporations Act 2001, while section 130 was reflected in section 1259 of the Corporations Law and then section 1259 of the Corporations Act using the same wording, same composite phrase “artificial price”, and then combined in section 1041A.

In the next column is section 70 of the 1970 Act, which was of course the subject of consideration by Justice Mason in North v Marra, right down to 1041B, and in the third column, referrable to what became 1041C, it is followed through there.  There is however there an error.  It is the only error in the table.  Your Honours will see in the right‑hand column referrable to 1989 and 2001, your Honours will see 998(2).  It should be 998(3).  That is the only, I presume, typing error in the table.

The major point which emerges from the analysis of the legislative history is set out in the judgment of Chief Justice Warren at paragraphs 203 to 207, which is obviously on pages 1102 over to 1103 of the third volume of the application book, and if I could deal with it in this way. As is apparent from that table in paragraph 201, section 1041A had as its immediate predecessors with respect to securities section 997(1), (4) and (7) of the Corporations Law and then the Corporations Act, and with respect to futures contracts, section 1259, but used the wording or the language of 1259 and not the wording of 997 because it was only in 1259 that there was the composite phrase “artificial price”.

But there was nothing within any of the extrinsic materials – and I will start with the revised explanatory memorandum to the 2001 Bill which inserted Chapter 7 into the Corporations Act, that is the Financial Services Reform Bill – which in any way suggested that the securities or shares predecessor to section 1041A was being narrowed or restricted or limited or abandoned in any way.

Prior to the luncheon adjournment I took your Honours to the revised explanatory memorandum which is behind tab 5 of the volumes as provided, the revised explanatory memorandum to the Financial Services Reform Bill.  I took your Honours on page 1 to paragraph 1.5.  It spoke in terms of – in that paragraph in the bits which I did not read out to your Honours – at the end of the second line to:

providing more uniform regulation . . . and removing unnecessary distinctions between products.

Nothing there to the effect that securities are to be treated in a different way in 1041A or that what were to form then 997, the securities or shares predecessor to 1041A, was not also caught by and fell within 1041A.  Paragraph 2.7 on page 5, at the head of the page:

The Report therefore recommended that –

and the fourth dot point –

that the law covering financial markets adopt a broad definition of ‘financial products’ subject to generic requirements and supplemented by specific regulation for specific classes of products – to replace existing separate Corporations Act regulation of securities and futures contracts –

Then a little further on at paragraph 2.75 on page 16, same document:

Existing market misconduct provisions cover –

in a nutshell, all those offences.  Next sentence –

There are currently two sets of provisions – one for securities and one for futures contracts.  As discussed above, the FSR Bill ends the legislative distinction between securities and futures contracts.  Moreover, the two sets of provisions were drafted at different times and are inconsistent in some respects.

I need not trouble your Honours with 2.76 because that is related to insider trading.  At 2.77:

This leaves open the possibility that the same conduct may be an offence only in relation to certain financial products.  This is undesirable from a policy perspective, and contrary to the aim of the FSR Bill to regulate functionally similar financial products in a consistent manner.

2.78    It is therefore proposed to consolidate the different sets of provisions, and then extend the single set of provisions to cover all financial products that may be traded on a financial market.

So within those paragraphs it has been said that there was an intention to eliminate or end the distinction within the legislative regime between, on the one hand, securities and, on the other hand, futures contracts.  The offences created by these provisions – and they are characterised at the start of paragraph 2.75 – were intended to apply to all dealings in all financial products and I make the comment, including shares.  Then at paragraph 4.37 on page 24:

The provisions in the Corporations Act and other applicable legislation will be harmonised to provide a single regime with respect to conduct in relation to financial products.

That is the phrase that is used and it breaks down within the definitions to shares and futures contracts as well as other things.  Then on page 174 of this document at paragraph 15.1 at the head of the page:

The market misconduct provisions in proposed Part 7.10 are based on the current provisions in Parts 7.11 and 8.7 –

Just for a moment focusing on section 1041A, that catches the two predecessors, the two predecessors being section 997 of the Corporations Act with respect to securities and section 1259 of the Corporations Act with respect to futures contracts:

These have generally been retained in their current form but their scope has been extended, as appropriate, to apply to all financial products and –

It should read “financial markets”, not just “markets”.  Then finally at 15.13 and 15.14, which is at the very foot of the next page, “Sections 997”, which is securities, “1259”, which is futures contracts:

will be replaced by a new provision (proposed section 1041A) based on section 1259 –

I would say based upon the wording of 1259 –

but applying to all financial products traded on a financial market.

Paragraph 15.14:

As is currently provided in section 1259 –

the futures provision –

the new provision will apply to a transaction, or two or more transactions, with the effect of creating or maintaining an ‘artificial price’.

Just pausing there, there is nothing within any of those passages within the explanatory memorandum to suggest that what fell within 997 with respect to securities would not also fall within the wording of 1259 which becomes in 1041A referrable to not just what was the subject of 1259, namely, futures contracts, but also shares.  Indeed, to the contrary.  That is part of context. 

As is pointed out in those other paragraphs to which I drew the Court’s attention in the judgment of Chief Justice Warren below within paragraphs more particularly I think 205 and 206, there is nothing in any of the reports there identified by her Honour, each and all of which preceded of course the introduction of this Chapter 7 into the Act which suggested that the scope of the securities predecessor to section 1041A was in some way being limited consequent upon the introduction of the section 1259 wording in section 1041A.

With respect to this progression and the intention as set out within the revised explanatory memorandum, you also get on that last page to which I took your Honours from the explanatory memorandum with respect to those other offences - in paragraphs 15.15 and 15.16 you get how it is that the old sections 998 and 1260, which were the predecessors for securities and futures respectively, now being succeeded by 1041B and 1041C. That is set out in those paragraphs.

FRENCH CJ:   Now, I think you say “cornering and squeezing” which is, according to American jurisprudence, particularly adapted to futures trading.

MR HOLDENSON:   Yes.

FRENCH CJ:   But would that be picked up within your construction of artificial price?

MR HOLDENSON:   Yes, it does fall within it.  I will get to, hopefully not too long away, an American case which your Honours will have seen cited and quoted from throughout the judgments below, the case of Cargill.  Indeed, as I recall, without opening the volume, also cited in, I think, the judgment of Chief Justice Gleeson in Fame but Cargill makes it clear that artificial prices in the American context of manipulation come about not just from cornering and squeezing in the futures market but also doing what the Crown say happened here with respect to futures contracts, but I will come to that in a moment.

Continuing with the legislative history and again perhaps by reference to the table in paragraph 201 of the judgment of Chief Justice Warren, with respect to that legislative history it is apparent ,if one just focuses on the left‑hand column which leads to the present section 1041A, with the exception of that gap in the late 1970s, there was always an offence directed at the buying and selling of shares which had the effect of raising or lower the price at which those shares traded and which had nothing to do with the exercise of market dominance or market monopoly or any such notion.

It is there set out in the table - section “71(1)” and probably should say and subsection (2) of the 1970 Act. It was in section 123(1), (2) and (3) of the 1980 Act and it was in section 997(1), (4) and (7) of the 1989 law and 997(1), (4) and (7) of the Corporations Act and if that conduct of raising and buying and selling shares which had the effect of raising or lowering the price at which the shares traded was not within the scope of section 1041A, in the light of the fact that it had been there for 30‑odd plus years, one would have expected there to have been some mention of that in one or more of the reports which preceded the 2001 Act or in the revised explanatory memorandum.

They are, indeed, wholly silent on such a point. There is nothing in those materials whatsoever that suggests that what fell within 997 was not now to be found within section 1041A and it is at this point that it is apparent, in our submission, that there is a flaw in the reasoning of the majority and in that regard – and this is perhaps the commencement of the answer to the question your Honour Chief Justice French raised to me just a moment ago, at paragraphs 333 and 334 of the joint judgment – the pages are a bit mixed up - it is 1147 and 1149 of, at least my copy of the application book, but paragraphs 333 and 334. They are on pages 112 and 113 of the judgment. Paragraph 333 makes reference to Justice Goldberg’s conclusion in Soust and Justice Mason in North v Marra.  In the third line:

we conclude that what emerges from the history of the legislation is that ‘artificial price’ in s 1041A is used in a different sense of legal signification reflecting American jurisprudential conceptions of market ‘cornering’ and ‘squeezing’. And, according to those conceptions, the question of whether conduct amounts to ‘cornering’ and ‘squeezing’ is largely one of fact and degree involving determinations of ‘whether the requisite domination or monopoly exists, whether an artificial price is caused by the exercise of that power and whether the dominant party intended to bring about that artificial price’.

But if I could read the entirety of 334 –

We do not overlook the possibility that Parliament may have used the term ‘artificial price’ in s 1041A in a sense sufficiently protean to cover both market manipulation of the kind typified by ‘cornering’ and ‘squeezing’ and also one or more of the kinds of false trading . . . which were once the province of ss 70, 71 and 72 of the 1970 Act, and more lately its legislative successors in the form of s 109 of the Securities Industry Act 1975, ss 123 and 124 of the Securities Industry Act 1980 –

and it goes on –

But we reject that as a realistic possibility. Given the history of the legislation to which we have referred, and because Parliament has specifically provided in ss 1041B and 1041C for churning and price rigging of the kinds previously dealt with in ss 70, 71 and 72 of the 1970 Act . . . the presumption of statutory interpretation, expressed in the maxim specialia generalibus derogant implies that s 1041A is directed to different kinds of activities. The Extrinsic materials support that conclusion.

Can I say this? One of the errors is in a few places, including paragraph 328. With respect, they have got wrong the succession of provisions which lead to the present sections 1041A, B and C. It is apparent from the last line in part of 334, but it is apparent from a number of places in 328. There is nothing in 1041B and 1041C which reflects section 71 of the 1970 Act or section 123 of the 1980 Act or section 997 of the Corporations Law 1989 or the Corporations Act 2001.

They conclude at the end of paragraph 334 at the head of the next page that section 1041A is directed at conduct, which is different from the conduct caught within 1041B and C, and reference is there made to the Latin maxim. First, the Latin maxim has no operation in the light of section 1041J, the provision to which I took your Honours earlier. Secondly, there has always been overlapping between these provisions – indeed, within the provisions, there has been express overlapping in, for example, section 998 of the Corporations Law and what came after it, section 998 of the Corporations Act. What fell within the first half of section 998(3) was already in section 998(1) coupled with the deeming provision of 998(5).

In any event – and I gave this answer a little earlier in part to your Honour Justice Crennan – there was a recognition in the cases – I say it in a sense retrospectively because we have now got with respect to securities the composite phrase “artificial price” in 1041A – but there was a recognition within the cases that what fell within the now 1041B(1)(b) about false and misleading appearances also had the effect of creating an artificial price. 

In that regard, if I could take your Honours just to two passages in two cases.  The first is Fame Decorator Agencies Pty Ltd v Jeffries Industries Ltd (1998) 28 ACSR 58. That is the case, of course, where Mr Justice Priestley dissented. It is the case where Chief Justice Gleeson delivered the leading judgment and it was with his judgment that Justice Powell expressly agreed. If I could do it the short way and just take your Honours to the headnote, in the middle of the page the paragraph which there commences:

Shortly before the close of trading on the last trading day of the applicable 20 day period, F sold a number of ordinary shares which had the effect of bringing the market price down substantially.

The learned trial judge, Justice Cohen, found that Fame had contravened section 998. That is the present 1041B:

Held . . . 

(i) The conduct of a seller of thinly traded shares, calculated to effect sales at the lowest, rather than the highest, total price, and timed so as to deflect the possibility of some purchasers bidding up the price (just before the close of trading), had both the purpose and effect of creating temporarily an artificial market and price in breach of CL s 998.

Now, if I could take your Honours to the relevant passages, at page 62 about a third of the way down the page your Honours will see the then section 998(1), and this was the subject of the contravention:

A person shall not create, or do anything that is intended or likely to create, . . . a false or misleading appearance with respect to the market for, or the price of, any securities.

Then your Honours will see the passage to which I have already taken the Court from North v Marra, then at the foot of the page:

This approach accords with United States authority on similar legislation, where a price reflecting basic forces of supply and demand working in an open, efficient and well‑informed market, is contrasted with an artificial price resulting from manipulative conduct –

and there cited is the futures trading case of Cargill which speaks and explains cornering and squeezing.  Chief Justice Gleeson states:

Section 998 aims to preserve the integrity of the share market. Markets, in reflecting the interaction of forces of supply and demand, may suffer from a variety of imperfections –

Some of them are set out –

without such imperfections destroying their integrity.  However, the conduct of a seller of thinly traded shares, calculated to effect sales at the lowest, rather than the highest, obtainable price, and timed so as to deflect the possibility of some purchasers bidding up the price, had both the purpose and effect of creating temporarily –

and here is the phrase –

an artificial market and price.

If I could then jump two paragraphs to the paragraph at lines 10 to 15 at the end of the paragraph:

In the present case, however, Cohen J was right to conclude that both the purpose and the effect of Fame’s conduct was to create an artificial market price for shares in Jeffries and that such conduct contravened s 998.

The contravention of section 998 was of course referrable to, and your Honours will recall it is from page 62 at about point 3, the creation of:

a false or misleading appearance with respect to the market for, or the price of, any securities.

Now, in our submission, what is there being said is if one breaches section 998(1) one creates, albeit temporarily, an artificial market and price. Moving on to the present day, post‑2001, if one breaches section 1041B and 1041B(1)(b):

creating a false or misleading appearance . . . 

(b)with respect to the market for, or the price for trading in, financial products on a financial market operated in this jurisdiction -

one, to use the language of Chief Justice Gleeson, creates temporarily an artificial market and price.  Now, that is 1041A, artificial price.  There is nothing of course in Fame v Jeffries about dominance, monopoly, misuse of dominant position in the market. That is not a component of that contravention in section 998, nor the effect there described by Chief Justice Gleeson at the head of page 63.

This was taken up by Justice Heydon, and we have provided the case of O’Halloran (2000) 182 ALR 431, the decision of the New South Wales Court of Criminal Appeal. That was a case - and it is apparent from the third set of catchwords at page 431 was whether the instruction that was given to the broker could constitute conduct which fell within section 998, the present 1041B, and in a lengthy paragraph - [78] - which commences at page 451, and your Honours will see third line from the foot of page 451 within that paragraph the seminal judgment of his Honour Justice Mason in North v Marra dealt with over to the head of 452 and at 452, line 6, is where Justice Heydon refers to this passage from the judgment of Chief Justice Gleeson. He says:

In Fame . . . Gleeson CJ used similar language in saying that conduct found in breach of s 998(1) in that case had “both the purpose and effect of creating, temporarily, an artificial market and price”. An artificial, managed, manipulated, non‑genuine market is one with a false or misleading appearance.

Now, in our submission, that is effectively saying, in the context, you get an artificial market where you have a market which has a false or misleading appearance, and at that point, if I could just pause for a moment to go back to a question raised of me by your Honour Justice Gageler, that is really this point about temporarily, and that is the point made by Chief Justice Gleeson in Fame.  There is an artificial market and price created, temporarily.  That is the error, with respect, in that added bit to that question 1 of Chief Justice Warren.

FRENCH CJ:   The notion of an artificial market is not a step along the way to the concept of an artificial price, is it, for present purposes?

MR HOLDENSON:   In my submission, it is.

FRENCH CJ:   Another metaphor to unravel.

MR HOLDENSON:   Yes.

FRENCH CJ:   I am not quite sure it is a very helpful one.

MR HOLDENSON:   If it is not helpful, do not take it on board, please.  Again, in O’Halloran, not surprisingly because it is referrable to Fame’s Case on the facts, nothing about market dominance. Now, there is a further reason, in our submission, for concluding that that conclusion in paragraph 334 of the judgment of the majority is wrong where they ask themselves the question whether or not the term “artificial price” in section 1041A is:

sufficiently protean to cover both market manipulation of the kind typified by ‘cornering’ and ‘squeezing’ and also one or more of –

that which fell within what we have been dealing with for more than 30 years now, and it is this. If section 1041A is confined to misuse of market power or domination, then the construction given by the majority to section 1041A has not much work to do, if any, with respect to shares, a surprising result in circumstances where the phrase “financial products” in section 1041A includes shares. We say that because realistically “cornering” and “squeezing” is only applicable to futures trading, as is explained in those passages in the joint judgment below as to the meaning of the phrases “cornering” and “squeezing”. It is all about the monopolisation of the commodity underlying the futures contract.

It is a bit hard to work out how this has anything to do with shares, but in any event, on the assumption that it can, with respect to shares, even the shares in these companies which are said to be thinly traded, it is almost impossible as a matter of fact to obtain a sufficient amount or proportion of the shares which have been issued in a company to be able to dominate the market for the shares.

HAYNE J:   That is short of Chapter 6 and 90 per cent, short of takeover.

MR HOLDENSON:   Yes.

HAYNE J:   Control of shares, I would have thought, was regulated by the takeover provisions.

MR HOLDENSON:   Yes.  There are the notification provisions.  There are the provisions about acquiring more than 20 per cent with the exception takeovers, and there is the prohibition on the short selling of shares, the prohibition in what is now section 1020B(2), which has the effect of short selling shares – cannot sell a share in which you do not have a presently exercisable and unconditional right to vest the shares in the buyer.  We have identified each of those three points in our written submissions ‑ ‑ ‑

HAYNE J:   But how can there be a corner or a squeeze with respect to shares?  Let it be assumed that the person who is effecting the market misconduct, if I refer to it as generally as that, is a substantial shareholder in X Co, how do you effect a corner or a squeeze?

MR HOLDENSON:   It is pretty hard to work out.  The end result is we cannot work out how you can and yet the majority say 1041A is confined to market manipulation of the type typified by cornering and squeezing, but 1041A uses the phrase “financial products” which we know includes shares and securities.

So their construction denies – reads down ‑ limits the phrase “financial products” to include things other than shares, and that is, indeed – well, it is an indication of the flaw in the reasoning. I indicated earlier that it is 333 and 334 – it is our submission that the flaw creeps in. We tried to work it out as to how the flaw did creep in and it is by reason of – with no disrespect, being misled by the explanatory memorandum to section 130, which is the futures predecessor in 1986, the 1986 Futures Industry Act, which introduces this composite phrase “artificial price” which 130 then 1259 then 1259 and now in 1041A.

Now, that explanatory memorandum is conveniently set out – rather than going through the folders – I think it is in paragraph 323 of the joint judgment below at pages 1143 and 1144. If I could take your Honours to paragraph 323, you will see within that the explanatory memorandum to the 1985 Bill which led to section 130 of the Futures Industry Act.  Now, paragraph 284 of the explanatory memorandum reads, and I quote:

Cl.130 prohibits a person from effecting or taking part in one or more transactions (whether involving futures contracts or not) that have or are intended to have or are likely to have the effect of creating –

and there is the phrase for the first time –

an artificial price, or maintaining at an artificial level the price, for dealing in futures contracts on a futures market within the Territory.

285.    The two main forms of manipulation are ‘squeezing’ and ‘cornering’ which involve attempts to manipulate futures prices by manipulating supply and demand for the physical commodities that are deliverable under futures contracts so that available supply is exceeded and artificial prices are created.

Now, paragraph 285 makes it clear that artificial prices are created where there is a manipulation – I am using the language from paragraph 285 – a manipulation of supply and demand, and what paragraph 285 does when it identifies squeezing and cornering, it identifies the two main forms of manipulation as distinct from identifying the only forms of manipulation.

That is in paragraph 323 that you have the two paragraphs from the explanatory memorandum, then in paragraph 324 is where they define cornering and squeezing by reference to Cargill, and then in 325 by reference to the American text, and it is submitted that then the slip comes a few paragraphs later in 330 and 331 in the last half of – what they do is they speak in terms of section 130 being concerned with and focused upon cornering and squeezing. It is in the last half of paragraph 330 in the joint judgment, last four lines:

s 130 which, according to paragraph 285 of the Explanatory Memorandum, was concerned with a different kind of illicit activity, not previously proscribed in Australia, constituted of market manipulation by conduct of the kind typified by ‘cornering’ and ‘squeezing’.

Then in the middle of 331, speak in terms of:

the focus of s 130 was upon conduct of the kind typified by ‘squeezing’ and ‘cornering’.

This is all referrable too in the paragraphs which precede that, particularly paragraphs 324 where Cargill is cited and 325 where – the text by McBride Johnson and Hazen which deals with, for many pages, the case of Cargill.  But when one goes to Cargill, Cargill makes it clear that manipulation involves the creation of an artificial price.  It makes it clear that there are all sorts of methods of manipulation.  But at the end of the day manipulation involves conduct which results:

in a price which does not reflect the basic forces of supply and demand.

HAYNE J:   It may be necessary to keep separate two ideas:  the notion of price generally for the security; and price at a particular time, namely, price at close.  The conduct alleged here was directed to identification of price at close, was it not, rather than price at any time during the period?

MR HOLDENSON:   Yes, I think so, with an idea to keeping it up during the day.  That is right.

HAYNE J:   But price at close I thought that the closing price would be?

MR HOLDENSON:   Yes.

HAYNE J:   Hence the significance that seems to be attached by the Crown to these events occurring at 4 o’clock or thereabouts?

MR HOLDENSON:   Yes, I think it is 4 o’clock, or might be a little bit – it is about that time, yes.  Just going to Cargill – copies were provided I think by our friends – reported (1971) 452 F 2d 1154, if I could take your Honours to page 1163 in the left‑hand column halfway down the page by reference to another case, the quote:

“We are favoured with numerous definitions of the word ‘manipulation’.  Perhaps as good as any is one of the definitions which appears in the government’s brief, wherein it is defined as ‘the creation of an artificial price by planned action, whether by one man or a group of men.’”

In the next passage:

artificial stimulus applied to (or at times a brake on) market prices, a force which distorts those prices, a factor which prevents the determination of those prices by free competition alone.”

Then in the paragraph numbered [1]:

We think the test of manipulation must largely be a practical one if the purposes of the Commodity Exchange Act are to be accomplished.  The methods and techniques of manipulation are limited only by the ingenuity of man.  The aim must be therefore to discover whether conduct has been intentionally engaged in which has resulted in a price which does not reflect basic forces of supply and demand.

That is Justice Mason in North v Marra.  It is Justice Goldberg.  It is Justice Gleeson in Fame.  Now, the American authorities ‑ ‑ ‑

GAGELER J:   The price there is market price, is it, in that sentence?

MR HOLDENSON:   Yes, and that is apparent from the immediately preceding paragraph within the quote.  So the American authorities with respect to the futures market have always made clear that an artificial price could be created by conduct which did not involve the misuse of monopoly or dominant market power like cornering and squeezing.  It is implicit within those passages there, but one of the cases we have cited, and it is discussed in the judgment of, at least, Chief Justice Warren below, is the case of In re Henner. 

We have some paragraphs devoted to it in our written submissions, and that was a case which fell within the manipulation provisions in the United States with respect to the creation of an artificial price.  That was where the purchaser of futures contracts created an artificial price by simply paying more than the market price for those futures contracts in order to cause the closing price of the futures contracts to be increased and In re Henner is – I just do not recall where it is cited in the judgment of Chief Justice Warren, but it is certainly the subject of much analysis in that textbook which was cited by the majority below.

CRENNAN J:   McBride Johnson and Hazen, 325 of the ‑ ‑ ‑

MR HOLDENSON:   Yes, Philip McBride Johnson and Thomas Lee Hazen.  Now, the consequences of the error of the majority is then reflected in that paragraph – and I do not think I have yet made reference to it – paragraph 332 because in paragraph 332, which I know comes before 334 where the majority asked themselves the requisite question but answered it in the negative, in 332 they make reference to two concepts of artificiality which are very different.  But artificial price in the American learning was never confined to being the result of the misuse of market dominance because artificial price, as was made clear, for example, in the case of In re Henner, also covered conduct which was engaged in for the purpose of creating that price.

That latter conduct also fell within therefore section 130 of that 1986 Act. What fell within section 130 was not confined or limited to cornering and squeezing. It caught all conduct where there was an artificial price created by reason of conduct which did not reflect the basic forces of genuine supply and demand, and I am using the language from page 1163 of Cargill. Because it always fell within section 130 of the Futures Industry Act 1986 with respect to artificial price that sort of conduct also falls within, in our submission, and is not to be excluded from the present section 1041A which uses the same language, indeed the same composite phrase of “artificial price”.

So when one works through looking at those matters which comprise the context of section 1041A, when one works through what is said to be the object or purpose or mischief at which the provision is directed, when one goes to the cases, when one goes to the object section, which is 760A of the Corporations Act, when one goes to the revised explanatory memorandum, when one goes to the legislative history, wherever one goes one is not denied, indeed each and all of those things comprising context supports the construction for which we contend with respect to section 1041A as to how it is that an artificial price can be conducted.

It is not confined to what was called in America “cornering” and “squeezing” with respect to the futures market. As we have tried to demonstrate by way of submission, given that section 1041A clearly applies to financial products which include shares, to confine it to “cornering” and “squeezing” it just does not work with respect to shares.

FRENCH CJ:   How does one identify the price which is said to be artificial on any particular day?

MR HOLDENSON:   Yes, well, it is the price where the purchaser here – the purchaser does it, does the purchase with a purpose to set the price ‑ ‑ ‑

FRENCH CJ:   Yes, but what is the price that is set that is artificial?  I am not talking about the price in the transaction, I am talking about the flow‑on effect in terms of the ‑ ‑ ‑

MR HOLDENSON:   The flow‑on effect is the market price.

FRENCH CJ:   Yes, but do you define that?  How do you identify that?

MR HOLDENSON:   It is what comes after the impugned transaction and indeed ‑ ‑ ‑

FRENCH CJ:   Yes, but is that what goes up on an ASX board or ‑ ‑ ‑

MR HOLDENSON:   I do not know that they have boards now.  Now, this is explained ‑ ‑ ‑

FRENCH CJ:   Or whatever they do - screens.

MR HOLDENSON:   Yes, screens, and it is described in the evidence of Dent which is – his very, very long statement is set out in one of these application books.  It is in volume 2 of the application book and it is his statement which commences at page 651 and if, for example – and this is just an example – if I could take your Honours to page 711 of that volume, the second volume, your Honours will see in that statement of Mr Dent at paragraph 158 which is toward the middle of the page:

On 12 July 2005 at 10:12:59 [am] Broker 122 entered a Bid for 10,000 –

of the shares in whatever we called it – X Limited:

@ 37.5c on behalf of –

and that name is the daughter of the accused:

At the time –

that is what the schedule was.  Going down to 159:

The effect of [that] Bid would be that if -

and I will not read it all out and then you get to – it is there set out and then 160 is referrable to a transaction later on that same day.  What is entered – there is the spread – the effect of the bid would be that – and if your Honours just have regard to ‑ ‑ ‑

FRENCH CJ:   It is the last traded price that is of particular significance.

MR HOLDENSON:   Paragraph 159c is what you get to:

Moved the last traded price from 37.0 to 37.5c.

At paragraph 161 over the page:

The effect of [TM, the daughter] would be that it:

. . . 

c.        Moved the last traded price –

The impugned transaction has the effect of creating the artificial price. 

GAGELER J:   Is that simply because it is the last traded price?

MR HOLDENSON:   Yes, but it might be only temporary, but that is all right because Chief Justice Gleeson used the phrase “temporarily” - the creation of the artificial market or price would be that it might be only temporarily. 

GAGELER J:   One transaction can give the artificial price.

MR HOLDENSON:   Yes, absolutely.

HAYNE J:   Well, that is statutorily implicit and 1041A(a) “a transaction” that has the effect of creating an artificial price is one of the innumerable permutations and combinations of 1041A, statutorily assumed that a single transaction can have the effect of creating an artificial price.

MR HOLDENSON:   That is the assumption and, indeed, one transaction can have that effect of creating an artificial price.  But for the transaction there would not be that price.

GAGELER J:   In that transaction.

MR HOLDENSON:   But for that transaction there would not be that price which is now there.

KEANE J:   Which is what distorts the market.

MR HOLDENSON:   Which is the market price.

KEANE J:   But it distorts the market for the next purchaser.

MR HOLDENSON:   That is right.

BELL J:   Because it is an artificial price for trading in financial products and once it is up on the screen one has the price for trading in that security is now 37.5 absent that transaction affected by that dominant purpose it would have been 35.

MR HOLDENSON:   That is right.

KEANE J:   The next purchaser cannot get it for 35, or he may but he may have to wait.

MR HOLDENSON:   May, because it may be that that 37.5 might not be the market price for long, it might be temporary.

KEANE J:   However it works out in the long run, what it is doing is distorting the market.

MR HOLDENSON:   For a time, perhaps only temporarily, but for a time.

KEANE J:   The market is not being efficient.

MR HOLDENSON:   It is not reflecting genuine supply and demand because you exclude from that sort of market purchasers or sellers where they do not purchase and sell for ordinary purposes which is not bumping up or bumping down the price.

GAGELER J:   But you disavow any need to show any effect on other genuine buyers and sellers in the market.

MR HOLDENSON:   Correct.

CRENNAN J:   But does not the conduct enhance the probability that the next ask prices are likely to be 37.5 instead of 37?

MR HOLDENSON:   I suppose so, yes, but they do not have to be because everybody might just say well, that is too much, do nothing.  So the price of 37.5 is ‑ ‑ ‑

CRENNAN J:   That is why I only used the word “probability”, or “possibility” might be more accurate.

MR HOLDENSON:   Yes.  I think one of the passages picked up – I think it is in the judgment of Chief Justice Warren – from that American text which makes it clear that the creation of artificial price is not confined to market dominance is at page 76 of that book, and it reads, and I quote:

In some instances, it appears that discreet transactions in the futures and options market may result in a charge of market manipulation.  In David G. Henner, it was alleged that the respondent had purchased futures contracts at a price significantly above the prevailing market price in order to affect the day’s closing price.  As noted in other chapters, the closing price or range for a trading session is of special importance because it is disseminated –

Just to repeat the conclusion which I think I had reached, focusing on the text, one ends up with the construction conveniently contained within the judgment of Justice Goldberg, not that context could alter that, but that which comprises context confirms that.  That is why the amended question was wrongly answered by the court below.  The amended question could well be answered in the manner in which we handed up that document at 2.15 this afternoon.  Subject to any queries or concerns that your Honours

may have, that concludes the submissions.  Unless there is anything further, thank you.

FRENCH CJ:   Thank you, Mr Holdenson.  Yes, Mr Solicitor.

MR McLEISH:   If the Court pleases, we reach the same results as Mr Holdenson by a slightly different route, so I can perhaps start with what I hope are three uncontroversial propositions before coming to section 302 itself. The first proposition is that there is a matter attracting federal jurisdiction in this case, namely whether JM is guilty of the offences charged under section 1041A of the Corporations Act. 

Secondly, the Supreme Court of Victoria has federal jurisdiction invested in it by section 1338B(1), and that is because that section vests jurisdiction with respect to the trial on indictment of those charges.  Thirdly, by virtue of section 1338C of the Corporations Act, sections 302 to 306 of the Criminal Procedure Act 2009 (Vic) apply to JM being laws, and I quote with words omitted, “respecting the procedure for the trial on indictment of those charges”.

In that context, when section 302 confers on the court a discretion whether to reserve a question for the Court of Appeal when a question of law arises, it is submitted that that discretion is a discretion to reserve a question to be answered by the Court of Appeal in the exercise of judicial power, and that the power to reserve a question enables a question to be answered exercising judicial power in the widest sense.  By that I mean that the reference to a question of law arising in section 302 is commensurate with the boundaries of judicial power. 

Now, it is going to follow from that, it is submitted, that if a question of law arises there is no constitutional difficulty in answering it in this case.  In the cases, as your Honours have seen, there are a number of expressions using terms like “advisory opinion”, “hypothetical”, references to where the facts have been found, ascertained, identified.  We submit that the way in which questions of law can arise are unlimited and some caution does need to be applied in using the expressions in some of those cases, some cases which on their face appear to contain definite expressions guiding the law in this area and on closer examination do turn on their own facts.

A more fruitful course, it is submitted, than asking whether an advisory opinion is being sought is to ask whether the question – answering the question is an integral step in the quelling of the controversy the subject of the matter.  Cases which refer to questions in this area involving facts address two ways in which facts might be relevant, and the first of those is the facts from which the question itself arises.  The second way is the way in which facts may be necessary in order to actually answer the question, and it is submitted there is a distinction. 

It is evident in this case because the questions, whether they be the questions asked by the Court of Appeal or the questions asked by Justice Weinberg, in both cases arise from a factual context but it is not necessary to have resort to facts in order to answer the question, and that is demonstrated by the arguments of the parties in this case.  So we would distinguish the factual context in which the ‑ ‑ ‑

HAYNE J:   Sorry, how is it demonstrated by the argument of the parties in this case?

MR McLEISH:   The facts which the parties refer to in this case are the facts which give rise to the legal issue about ‑ which is framed in the questions, but to answer those questions, it is submitted, the parties do not need to have resort to particular facts.  The way in which Mr Holdenson argues the meaning of artificial price is not by reference to facts, assumed or found, and properly so.  It arises in the context of allegations of fact, but the argument is able to proceed by reference to legal considerations and the case law and extrinsic materials which my learned friend has relied on.

We submit that a question arises under section 302 if its determination bears on the controversy before the Court and it is capable of being answered in the exercise of judicial power.  The test of bearing upon the controversy ‑ we have referred to in the judgment in Hodgson v Victoria [1995] 2 VR 292, and I do not need to take your Honours to it because we submit that the same sense is conveyed by the language used by the majority in Mellifont. 

Mr Holdenson took your Honours to Mellifont 173 CLR 289 at page 303; in particular the reference there to whether the question was – answering the question was an integral step in quelling the controversy. That test of whether the answer is an integral step in quelling the controversy, it is submitted, presents the same issue as the negative – that is the way it was put – negatively in In re Judiciary and Navigation Acts, namely, whether answering the question is divorced from any attempt to administer the law or is dissociated from the quelling of the controversy, to use the other expression that appears in O’Toole.

As long as answering the question forms an integral step in quelling the controversy it is submitted that it is well established that it does not need of itself to quell the controversy.  Mr Holdenson has taken your Honours to Mellifont and O’Toole in that regard and we have repeated the references to that in paragraph 4 of the written outline.

FRENCH CJ:   Does it matter how broadly framed the question is and whether it goes beyond what is strictly necessary to deal with the case?

MR McLEISH:   Your Honour, provided that it can said that answering the question is an integral step in quelling the controversy, whether or not it is more broadly framed than it might be, we submit, goes to the Court’s discretion and the Court is always at liberty to answer the question in a confined way.  We submit that all of the questions asked by the stages of this proceeding arise because the answer to the question, that is, the general question of construction in the sense that it was asked by the Court of Appeal, was it would be a step necessary to apply that construction to the facts.

HAYNE J:   That answer if adopted would mark, would it not, a departure from what was held in Hodgson.  Hodgson does not bind us.  It is not a question in federal jurisdiction.  All of those caveats need to be entered.  But the proposition you advance is one which I think to be at odds with what is decided in Hodgson, what was decided in Burns Philp, and I think also in Jacobson v Ross in the Court of Appeal of Victoria.  That may not matter a jot, but do you accept it to be so?

MR McLEISH:   Well, your Honour, to the extent that those cases say that no question arose, we say that they are at odds with the test I have propounded, namely, whether to answer the question is divorced from the administration of the law or whether to answer it is an integral step.

HAYNE J:   As to integral step, do you challenge what Justice Tadgell said in Hodgson [1995] 2 VR 292 at 296 of the questions in issue there that they, that is to say, the questions – I am reading from about point 3:

did not distinctly raise issues which bore upon the entitlement of any particular party or person to relief claimed in that proceeding.

Is that a satisfactory identification of the connection that must exist?

MR McLEISH:   Well, we submit so, your Honour, that bearing upon the issue is another way of saying bearing upon the quelling of the controversy before the Court and that, if the answering of a question bears upon the determination or the quelling of the controversy, then it is another way of saying that answering the question is an integral step of quelling the controversy.  Bearing upon, or integral step, or not being dissociated from the administration of the law or, indeed, being necessary to determine the function of the court, to adopt the Mobil test that Mr Holdenson took your Honour to, we submit all of those are different ways of saying that the answering of the question is part of the determination of the matter, the exercise of judicial power to determine the controversy before the Court.

FRENCH CJ:   Nothing turns on a distinction in language between “question in a proceeding” and “question arising in a proceeding”?

MR McLEISH:   We do not submit so, your Honour, but, having said that, for reasons which I do not need to rehearse, the courts have long been loath to answer questions of too general a nature.  That, it is submitted, goes to either the discretion of the court as to the framing of the question or the manner in which the court may choose to answer the question, but in either case does that mean that the wider question did not arise.

I just finally wanted to say something further about the role of facts.  I have touched on this already, but the facts that appeared in the stated case, it is submitted, operate as the context for all four of the questions which have been posed at successive stages of this proceeding.  They operate as context and perhaps that is best illustrated by just referring your Honours to the narrative derived from those facts in the judgment of the Chief Justice at paragraphs 7 to 20, and the judgment of the majority at paragraphs 283 to 285, but those facts, having been described by their Honours as the context in which the legal question arose, and I use that word in the sense of section 302, it is submitted that the question of construction then fell to be decided for subsequent application to the case at hand, and I refer your Honours to paragraph 25 of our written submissions in that regard.

We would distinguish the decisions in both Assange and Bass to the extent the questions were not answered there because the factual context which had been identified was not sufficiently specific in both cases.  In Assange it was not specified exactly what Mr Assange was said to have done, and in Bass the facts were to be derived from a bundle of documents rather than being stated, so there was insufficient specificity to enable it to be said that any question had arisen.  It was not, it is submitted, that the facts that were lacking in those cases needed – were necessary in order to answer the particular question, it was that they were not sufficiently articulated to show that a question had arisen.

We say the same thing of the questions that were not answered in the Australian Commonwealth Shipping Board Case (1925) 36 CLR 442. We have relied in that case on the statement in the judgment of Justice Isaacs at page 451 in relation to section 40A of the Judiciary Act where his Honour notes at about point 4 of the page:

that “arising” means necessary for the decision on the ascertained or asserted facts of the case.

It has been put against us in the reply of the applicant, the cross‑applicant for special leave, that in fact the Court in this case did not answer questions on the same basis, or it has been put that this case is flatly against us because the questions there were not answered because of an absence of facts.

I say as to that there is some difficulty in identifying just what material was before the Court in this case.  That is because the stated case which appears starting at page 443 of the report – it is stated that the case was substantially as is set out in the paragraphs below.  Paragraph 3 refers to the applicants having served:

a statement setting out in summary form the grounds upon which such applicant intended to ask the said Court to cancel the registration of the said Union.

One of the questions, question (5) on page 446 was:

Do such grounds or any of them (if found to exist in fact) constitute a valid reason for cancelling the registration of the above Union?

It would appear that there was some material before the Court at least as to what the grounds were because there are some passing references to those grounds in the judgments that follow.  It is not at all clear whether there was anything more to specify exactly what it was that the union was supposed to have done.  In that respect, that is why we say the case is like Assange and Bass. Justice Isaacs at page 454 said that that question 5 was “purely hypothetical” because of the grounds, it is said:

in parenthesis, namely, “if found to exist in fact,” is purely hypothetical.  Properly construed, it asks not what does constitute but what would constitute a valid reason if facts alleged were proved.

That is the sum of his Honour’s reasoning and we submit it is simply unclear whether his Honour was saying that there were insufficient facts articulated in the stated case or whether his Honour was saying that the facts needed to be proved.  However, given what his Honour said on page 451, namely, that:

“arising” means necessary for the decision on the ascertained or asserted facts of the case.

We submit his Honour ought not to be read as having declined to answer question (5) on the basis that the asserted facts had not been proved.  We submit that the majority in the court below were correct to hold that the question which they posed did not require facts in order to be answered, but we also submit that their Honours were incorrect to say that the factual context can never involve disputes as to facts and this is an example of a

case, it is submitted, where mere allegations or assumptions of fact were sufficient to describe the factual context which enlivened or gave rise to the question.

We submit Chief Justice Warren was correct to hold to that effect and we have set that out in further detail in our written submissions at paragraphs 26 to 30. The net result, in our submission, is that the Court is empowered both under the Constitution and under section 302 to direct that either the questions of the majority or the questions of Justice Weinberg should be answered.

FRENCH CJ:   Thank you, Mr Solicitor.  Yes, Mr Moshinsky.

MR MOSHINSKY:   If the Court pleases.  The application for special leave to cross‑appeal is brought by a summons which appears at the end of volume 3 at page 1180, supported by an affidavit of Mr Annetta, which appears at 1182 followed by the exhibit which is the proposed notice of cross‑appeal.  Can I start by dealing with the cross‑appeal and what we say is the error made by the majority below in restating the question as it did?  I propose to deal first with the restated question and what we say about that, and then separately deal with the questions originally stated by Justice Weinberg and what we say about those questions.  Starting with the restated question - that appears at page 1124B of the application book.  I am sorry, can I start at 1124B, which is the beginning of the majority judgment below which sets out sections 302 and 305?

The Court has been taken to those sections already.  The relevant parts of the section for present purposes are at the beginning of 302(2).  One of the requirements for stating a case is “if a question of law arises” and the words “has arisen” also appear in section 305(1) in the third line on the next page.  As the learned Solicitor‑General for Victoria has indicated, the offences with which the accused has been charged are federal offences under the Corporations Act and the case stated provisions in those sections are prima facie picked up by section 1338C of the Corporations Act. That provision is limited by the words “so far as they are applicable” and in any event the procedure must be consistent with the requirements of Chapter III of the Constitution.

The Court of Appeal majority held that the questions originally stated by the primary judge were inappropriate to answer depending, as they did, on disputed issues of fact, but held that the first question could be restated in the form which appears at the top of 1134.  The majority held that each of these sub‑questions, a) and b), was a question of law and therefore each could be answered without the need to consider disputed issues of fact.

The Court of Appeal majority then proceeded to answer the issue of statutory construction raised by the restated question without reference to facts.  That the issue that is raised by the cross‑appeal is whether it is permissible or proper, consistently with the nature of judicial power of the Commonwealth and the statutory requirement that the question arises, to state an answer this question of statutory construction in that form without reference to facts.

Our submission is that the restated question was too broad or abstract.  It asked and answered more than it needed to.  Rather than being confined to the specific facts of the case, it called for a general statement of what the section means.  This is contrary to the normal approach to statutory construction which decides issues by reference to a factual outline, and we have referred in our list of authorities to the relevant sections of Bennion on Statutory Interpretation.  I do not need to take the Court to them, but that is a useful discussion, in our submission.  Those passages in Bennion also make the point that it is important for the doctrine of precedent that in deciding issues of statutory construction there be a factual outline so that in subsequent cases it is possible to determine whether the previous case should be distinguished or is binding.  In those circumstances, we say that the ‑ ‑ ‑

GAGELER J:   Would your argument be met if the second question were changed simply to read “what is its legal signification in this case”?

MR MOSHINSKY:   The difficulty is that the way the majority approached it was not referable to the facts of this case.  They do not indicate that they are referring to, for example, the facts set out in the case stated.  While it may be possible to confine the question in that way if there were a comprehensive statement of facts that is not the way the Court of Appeal majority approached it.  We say in these circumstances, given the breadth of the question, that it was not linked or decided by reference to the facts of this case related to the accused that the question did not arise within the meaning of the statute, and was not part of the matter in the constitutional sense.

KEANE J:   Mr Moshinsky, why does the question arise if, on the way that it is answered, the Crown case has to stop?

MR MOSHINSKY:   This is something that I will develop, but to answer your question now, it is not clear what the consequence is of the answers to the restated question.  It is not like a pleading where there is a demurrer where the defendant says, assuming all the facts that you have alleged to be true, you have no cause of action, in which case the consequence is the action is dismissed ‑ ‑ ‑

KEANE J:   On the basis of the answer that has been given, and on the basis of what has been opened against you, why can you not apply to have the indictment quashed?

MR MOSHINSKY:   It may depend on what the answer is.  I accept that.

KEANE J:   But the question is being asked to test the proposition that this question does not arise.  It seems to me that it is an odd answer to say that the question does not arise when the answer to the question means the case cannot go on.

MR MOSHINSKY:   Could I answer that in two ways, your Honour.  First of all, it is not clear what the consequence is, depending on what answer is given, in that it seems to us that it would be open to the prosecution depending on what the answer is to seek to prove additional facts.  Giving answer to the Court of Appeal ‑ ‑ ‑

KEANE J:   They have certainly not suggested that, and on the case they particularised it is not open to them.

MR MOSHINSKY:   It seems clear if the answer is as given by the Court of Appeal majority and based on what has been said they would not proceed.  But if the answer were, for example, the construction put forward by her Honour Chief Justice Warren, it may be open to the prosecution to seek to produce additional facts to satisfy that test.  So that is a partial answer to your question, but the other answer is ‑ ‑ ‑

HAYNE J:   But how can the prosecution start supplementing the facts when it has given the written opening of its case, presumably the written opening of the whole of its case?

MR MOSHINSKY:   Well, that may well be the case, your Honour.  It certainly was not put forward – the case stated did not go forward on the basis that the Crown would be precluded from seeking to adduce additional facts, depending on what the answers were, and that is the way it has gone forward.  I accept what your Honours have said.

The other answer I would give though to your Honour Justice Keane, is that the cases on the words “has arisen” or “arises” indicate that for it to be said that a question of law has arisen there is a need for specific facts, otherwise the question of construction has not crystallised in a way that can be the subject of a question of law referred.

Now, at the moment I am just dealing with the restated question.  I will come separately to the original questions, but with the restated question, it is a question that has been asked and answered in the abstract without reference to any facts.  So that is our argument as to why we would say it has not arisen. 

Can I then briefly take your Honours to some of the cases which we would rely on to say that the restated question is too abstract and has not arisen?  The first case is the case that the Solicitor‑General already took the Court to which is The Australian Commonwealth Shipping Board v The Federated Seamen’s Union of Australasia (1925) 36 CLR 442.

HAYNE J:   With a view to demonstrating what proposition established by that case?  What is the proposition that you would have us draw from it?

MR MOSHINSKY:   The proposition is that in order to have a case stated, properly stated and a question of law arising, one needs to have a statement of the ultimate facts.  The passages that we would rely on in that regard are in the judgment of Justice Isaacs.  At page 450 at about point 2, his Honour sets out three requirements that were relevant in a case stated procedure, “state a case”, “upon any question arising”, a question of law.  Then in the next six lines his Honour deals with stating a case:

stating facts, that is, the ultimate facts requiring only the certainty of some point of law applied to those facts to determine either the whole case or some particular stage of it –

Then at about point 6:

The second phrase, “upon any question arising,” is of central importance.

I will not read it out, but it is really about the next ten lines.  Then I would also note the statements made by Justice Isaac at page 452 from about point 2 to point 5, and the general effect of those is that abstract points of law, without knowledge of the actual facts, is not an appropriate basis for a case stated.

KEANE J:   Mr Moshinsky, can I ask you, at page 450, when you read “involves stating facts, that is, the ultimate facts”, are you reading that as facts ultimately found?

MR MOSHINSKY:   Either found or agreed.

KEANE J:   I rather think that what Sir Isaac Isaacs was talking about there was the final or sorry, ultimate facts rather than primary facts leading by inference to ultimate facts.  He is talking about the factual elements of the legal theory or doctrine.

MR MOSHINSKY:   Yes, I accept that.

KEANE J:   That is consistent with at 451 where he speaks about facts found or asserted.

MR MOSHINSKY:   Yes, I accept that.  The way I am using this is to say that at the moment, dealing with the restated question, which is asked and answered without reference to any facts, it does not comply with this.

KEANE J:   Sorry, I understand.

MR MOSHINSKY:   Yes.  I will address the original questions in due course.  The next case that we would rely on is DPP v B (1998) 194 CLR 566. Now, my learned friend, Mr Holdenson, has already taken you to this. It is at page 576 of the judgment of Justices Gaudron, Gummow and your Honour Justice Hayne. It is paragraphs 11 through to 14 that we would rely on. My learned friend has already read parts of those paragraphs to the Court. What we would highlight at the beginning of paragraph 11:

The questions reserved in this case were cast in very general terms, apparently unrelated to any facts, not even the facts in the case stated.

That statement we would say is equally applicable of the restated question:

That the questions were so general is, itself, a strong indication that they did not arise at any trial.

We would say that is also applicable because the restated question is of a very general kind. It is, in effect, asking what is the meaning of section 1041A. The point that is made – and I accept the questions were different, but at page 577 at about point 3 on the page – and Mr Holdenson read this sentence, it is the sentence starting:

Secondly, as the second question reserved reveals –

I will not read it out, but the criticism was that the second question invited the Court to embark upon an attempt to define the boundaries of the power and by analogy one might say the restated question seeks to ask the Court to define the boundaries of section 1041A, or at least the boundaries of artificial price.

The next case that we would rely on is Re McBain (2002) 209 CLR 372. I appreciate the facts were very different, but at page 389 in the judgment of then Chief Justice, Chief Justice Gleeson, paragraph 5 his Honour said:

Thus the Court does not pronounce, in the abstract, upon the validity or meaning of Commonwealth or State statutes.  To do so would not be an exercise of judicial power conferred by or under Ch III.

We would also rely on the passage in the judgment of your Honour Justice Hayne at pages 458 to 459.  It is paragraphs 242 to 243.  The last case that we would rely on in relation to the restated question is the case of Assange [1997] 2 VR 247, which the Court has already been taken to. I do not need to take the Court to the case but, in our submission, the entire passage at pages 252 to 255 is on point as demonstrating why an abstract question of the generality of the restated question is not one that arises.

In our submission, the basis upon which the Court of Appeal majority sought to distinguish Assange in their judgment was too narrow, and it is paragraph 305 of the Court of Appeal majority judgment at appeal book 1134.  The majority focused on the difference between the restated question and the question in Assange.  However, in our submission, that failed to have regard to the whole of the reasoning in the passage I have referred to in Assange and the restated question is really subject to the same problem of being too general or abstract.

CRENNAN J:   May I just ask you a question arising out of Justice Weinberg’s reasoning because he looked at these cases?

MR MOSHINSKY:   Yes.

CRENNAN J:   At page 906, if I could direct your attention to paragraphs 58 to 61, do you accept or reject what his Honour says at 58?

MR MOSHINSKY:   I think we have to accept the practical considerations which motivated his Honour to seek to state a question; we accept that.

CRENNAN J:   At 59 I think his Honour is picking up on a point there which was in your own response to the prosecution’s opening.  It relates to a question that Justice Keane put to you before.  I think Mr Holdenson said ‑ he certainly relied on that this morning.

MR MOSHINSKY:   Yes.  Your Honour, this is point that if we were successful in the construction argument that the charges would be withdrawn.

CRENNAN J:   This is the point, absent an attack by you on what I think you are calling the generality of the amended question, if it remained as it was, and was answered as it was, what would follow would be that the charges would be withdrawn.

MR MOSHINSKY:   Yes, I understand that.

CRENNAN J:   Then at 61 his Honour, after looking at the very same cases to which you have taken us, makes the observation that the case stated procedure in sections 302 and 305 may operate somewhat differently.  I just wanted to invite you, if you have a view, as to whether that is to be accepted or are those sections only to be read in the context of cases which occurred prior to the Parliament passing this legislation, which I think his Honour describes as being intended to alter the culture of criminal proceedings and to make sure the real issues are identified early.

MR MOSHINSKY:   Yes.  We would not accept that paragraph and can I deal with that.  In Justice Weinberg’s reasoning he dealt with that issue also at page 898, paragraph 25, so, for example, at line 4:

s 302 must be considered in the light of the radical changes to criminal procedure brought about by the introduction of the Act –

et cetera. That part of his Honour’s reasoning was the subject of discussion in the majority’s judgment below and we would adopt what the majority below said on this. The relevant passage is at page 1131 at paragraph 295. The point that the majority make there is that – I am sorry, I should go back. If I could take you back to the preceding page. At 1130, paragraph 293 the majority summarised this aspect of Justice Weinberg’s judgments about the “changes to criminal procedure” that had been brought about by “the Criminal Procedure Act”.  Then at 294 the majority indicate that would not accept those propositions “in the broad terms in which they were stated.”  Then at 1131 to 1132 the majority give their reasons for that.

Paragraph 295, the first of their reasons, is that when one looks at the actual textual changes to the case stated procedure in the 2009 Act compared with the predecessor, there were essentially two changes.  One is that “case stated” could be on the application of the Crown or the court of its own motion, rather than just the accused, and the other was that it removed the accused’s right to apply to have a case stated following conviction.  So the majority indicate that the actual changes were limited to those two matters.

BELL J:   Turning to the first of those two matters, that has some relevance in – it might be the reasons of the Chief Justice, or perhaps it is Justice Weinberg – but to your contention that the facts in the stated case must be found or agreed, to the extent that the provision was altered to admit of a stated case on the application of the Crown or the court on its own motion as distinct from the former procedure which required the application to be made by the accused, the accused ought not to be given, as it were, the option to negative the availability of it by declining to agree to facts.  What is your response to that?

MR MOSHINSKY:   Yes, I can see the force of that, with respect.  The point that we would make is that cases stated had operated within a certain framework, as discussed in all those cases, and there was no indication that there was an attempt to change that fundamental framework that they usually go forward.

HAYNE J:   Well, there was, Mr Moshinsky.  The old case stated procedure was to state a case on a question arising at the trial, was it not?

MR MOSHINSKY:   Yes.

HAYNE J:   And the new procedure is a question of law arises before or during the trial.

MR MOSHINSKY:   Yes, I accept that.

HAYNE J:   Is that not the radical distinction?  If a question of law arises before trial, it is necessarily arising before facts have been found.

MR MOSHINSKY:   I accept that it is before facts have been found, but it does not exclude the possibility of facts being agreed.

HAYNE J:   Of course it does not.  But, does it not lead to the possibility that a case can be stated in the form of the prosecution asserts the facts to be as follows, the defendant denies that they are so, on the facts as asserted by the prosecution, is section X of the Y Act engaged?

MR MOSHINSKY:   Our submission, your Honour, is that that proposition that where there are disputed facts one could make assumptions of fact and state a case on that basis.  We would submit that that still is not available and I will deal with that in a moment, dealing with the original questions.

HAYNE J:   When you come to deal with it you might, taking up the question put to you by Justice Gageler about the modified form of question adopted by the majority in the Court of Appeal, a reformulation of the second, perhaps both questions, would be, if the facts are as the prosecution allege them to be, not just, what is the legal signification of the Act, what is the relevant legal signification of the Act?  The real work in that question is done by “relevant”.  What you will need to grapple with is whether a question thus framed does not engage with facts asserted in a way that takes it away from the general disquisition on the law, tell me what you know about the proper construction of section whatever of the Corporations Act.

MR MOSHINSKY:   Yes.  The basic propositions that we would put in response to that proposition, your Honour, and can I move to really dealing with the original questions and take that up at the same time, which is can one have a case stated which assumes facts for the purposes of the case stated on disputed issues?  Our proposition is that that is not possible because essentially the answers are hypothetical in the sense that the facts may not be the facts that have been assumed in the case stated.

KEANE J:   But if that were right, demurrers should have gone long before they did, and for reasons, not because they are very technical, but just because they were not the proper exercise of judicial power.

MR MOSHINSKY:   We would see the demurrers as a special category that has existed for a long time, but we would see the difference between ‑ ‑ ‑

HAYNE J:   What is special about them?  Yes, they are pleading, and yes, they have an unusual name, but what is special about them?

MR MOSHINSKY:   The distinction that we would draw between a case stated – taking the case stated by his Honour Justice Weinberg in those questions – and a demurrer is that in the demurrer situation, one has a document, the pleading, which sets out a complete statement of the factual allegations.  We do not see the case stated as setting out the universe of facts upon which the prosecution relies.  Maybe it should be taken that way, but we had not seen the prosecution as being confined in the facts that they would be allowed to allege.

HAYNE J:   Well, it adds a new terror to criminal trials if the prosecution does not have to open its case, and there are lots of terrors in criminal trials as there are.  That is a new one, is it not?

MR MOSHINSKY:   The prosecution opening itself, it is a very long document, but it does not set out in detail the factual allegations, for example, regarding the specific purpose of the accused or his daughter.  It is not a document like a pleading and, similarly, the case stated, which is set out in a more detailed form factually, in our submission, does not set out the universe of facts.

BELL J:   It may not do that, but for the purpose of the issue that is joined between the parties having regard to the prosecution opening and the defence response to the prosecution opening, and the clearly articulated difference as to what is embraced by the offence with which the accused is charged, what is the difficulty in practical terms?

MR MOSHINSKY:   Your Honours, I understand the points that are being made.  From a practical point of view I understand the points that are being made in the questions to me.  The issue that we would raise about the original questions is because they are based on assumed facts which are disputed, in our submission, it is not open to state them.

BELL J:   We are dealing with a jury trial, there will never be a determination of the facts in a transparent way that lawyers can debate about.  At most there will be a judge directing a jury.  If you come to these findings this, as a matter of law, is the conclusion.  So why does it matter that the facts are assumed?  That is the very way in which the jury will be directed.  If you are satisfied of X, this may follow, if you are not so satisfied, the other result follows.

MR MOSHINSKY:   Yes.  I would just be repeating myself.  It is the hypothetical nature of the answer.  It may or may not be correct and one is proceeding to a Court of Appeal to give an answer on the law on facts that may not be the facts.

BELL J:   How do you say that the answer as to this question of law may not be correct because the ‑ ‑ ‑

MR MOSHINSKY:   I am sorry, I did not mean to suggest that, your Honour.  The facts may not be the facts that are assumed in which case the answer may not be relevant.  That is the difficulty.

BELL J:   But how, Mr Moshinsky, in this circumstance, is that proposition true?  It may be that the prosecution will not establish a number of matters set out in its opening but that will not bear on the relevance of the answer as to the elements of the offence that is in controversy between the parties being conclusively decided in the exercise of judicial power so that the matter can proceed.

MR MOSHINSKY:   I am conscious of the time.  Can I, just to answer your Honour’s question, once evidence is given, and there will undoubtedly be a lot more detail about the facts, even than in the case stated.  If one looks at, for example, the judgments in Fame, Soust, North v Marra, all of which have been referred to by my learned friend, Mr Holdenson, one sees a very detailed series of factual findings which provide the context for the construction.  One does not have that level of detail or findings even in the case stated.  The trial judge, having heard the ‑ ‑ ‑

HAYNE J:   You say that but, I mean, in light of things like the facts asserted in paragraphs 66 and 67 I do not know what more detail you speak of but perhaps you, after the adjournment, will be able to identify what further facts there could be.

MR MOSHINSKY:   Yes.

HAYNE J:   You have the facts set out in the case stated saying that there were these emails, these emails, these events occurred on the Exchange.  In 66 and 67 they say, well, the dominant purpose of the daughter was, or the sole purpose of the daughter was, or at least the dominant purpose of the daughter was.

FRENCH CJ:   Many of the facts were in fact not in contest, were they, because you have ‑ ‑ ‑

MR MOSHINSKY:   The transactional facts are not in contest.

FRENCH CJ:   That is right because it was really just following a document trail.

MR MOSHINSKY:   Correct.  The other missing fact of course in the case stated is any fact about the accused’s purpose.  That is not there.

FRENCH CJ:   That might be a convenient moment.

MR MOSHINSKY:   Thank you.

FRENCH CJ:   The Court will adjourn until 9.45 tomorrow for pronouncement of orders and 10 o’clock for the resumption of this matter.

AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 8 MAY 2013