Hannes v The Queen

[2008] HCATrans 133

[2008] HCATrans 133

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S475 of 2007

B e t w e e n -

SIMON GAUTIER HANNES

Applicant

and

THE QUEEN

Respondent

Application for special leave to appeal

GLEESON CJ
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 MARCH 2008, AT 12.25 PM

Copyright in the High Court of Australia

MR I.M. BARKER, QC:   If the Court pleases, I appear with MR M.A. WIGNEY, SC for the applicant.  (instructed by DLA Philips Fox)

MR T.A. GAME, SC:   If the Court pleases, I appear with MR R.J. BROMWICH for the respondent.  (instructed by Commonwealth Director of Public Prosecutions)

GLEESON CJ:   Yes, Mr Barker.

MR BARKER: Your Honours, this application focuses on “information” within the meaning of section 1002G(1) of the Corporations Law and section 1043A of the Corporations Act and the word being defined in section 1002A(1) of the Law and 1042A of the present Act.  The proper particulars of information said to be possessed by an accused insider is absolutely critical to a fair trial.  That has been recognised certainly by the Court of Criminal Appeal here in the first Hannes appeal where the issue of particulars was not argued but nonetheless the principle was laid down and also in Rivkin’s Case.  Proper particulars identifying the information said to be possessed by the insider are as critical to prosecutions under the present section 1043A of the Corporations Act as they were to prosecutions under the old Act and there is no reported decision of this Court dealing with the subject. 

Our two complaints here, which your Honours will find in the application book volume 2 at page 730, are the first and second grounds, which actually appear as grounds 2 and 3 for some reason but, firstly, it was put to the jury by the Crown with his Honour’s permission and held by the trial judge that the information possessed by the applicant was said to include subjective inferences drawn by him from objective information.  If one looks at the definition in section 1002A(1), it is said that:

“information” includes:

(a)matters of supposition and other matters that are insufficiently definite to warrant being made known to the public;

Shortly put, our case is that that does not and cannot include the accused insider himself.  The legislation points the other way because if an inference drawn by the accused insider could be used against him as information for the purposes of a prosecution, it would mean that his personal thought processes could be said to be generally or not generally available.  In my respectful submission, that would make nonsense of the proposition that an inference personal to the accused could be said to be information held by him within the meaning of the Act. 

What we say is that information, whether it comes by specific identifiable intelligence or whether it comes by a wink and a nod, whichever way it comes, it has to come externally to the person who receives it and the fact that he or she might have or might draw an inference must be treated as something quite separate from the information upon which the inference is drawn.

The second proposition is that the particulars in this case did not identify the information relied upon in the case put at trial.  In other words, the Crown were allowed to put a case which was not the case the subject of the particulars in the indictment. 

So as to the first point again, your Honour, over defence objection, the case went to the jury on the premise that firstly they could treat private subjective inferences as being information within the meaning of the indictment.  Secondly, they could convict even if they were not satisfied the applicant had been told anything or seen any document the subject of evidence because his conduct in buying the options itself offered proof that he had the information particularised.  Therefore, it is said, an inference drawn from somewhere should be treated as information even though the jury were not satisfied that he had received any information. 

The matter was put squarely in issue by the defence and the Crown’s contentions were articulated unequivocally by the prosecutor and the trial judge.  To make this good, I need to refer your Honours as briefly as I can to the parts of the material before you where these things were dealt with.  Doing it in chronological order, if your Honours go to the document called “Respondent’s Supplementary Application Book”, page 15.  I am referring to a passage in argument before his Honour on 6 December 2001 where at line 25 Mr Wigney said:

The Crown appeared to agree, and has said so in the further particulars, that the information, as particularised in the indictment, is, at least in part, an inference drawn by the accused . . . The information, as particularised, is either something that the accused actually learned from someone, or from reading something, or it is an inference that he has drawn from a number of sources. 

We sought particulars of what those sources were.  At page 18 of the same volume, line 25, his Honour said:

So far as inferences are concerned, my present understanding of the Crown case is that the Crown says information can include  inferences drawn by the accused from other information, but the Crown case against the present accused is not confined to alleging that because he was in possession of other pieces of information the accused inferred that it was likely the shares in TNT Limited would be the subject of a takeover offer.

If you go then to page 31 of the same volume, line 45, the learned prosecutor asserted that:

We so say that information includes matters by way of deduction and inference and the like.

At page 33 his Honour said at line 5:

The information of which the accused could be possessed could include an inference drawn by him.  I consider that the Crown can seek to show that the accused was possessed of information that it was likely that there would be a takeover offer at a price of $2.40‑$2.45.

One must bear in mind, your Honours, the particulars in the indictment which is found at page 1 of volume 1, line 30:

Particulars of Information

(i)It was likely that shares in TNT Limited would be the subject of a takeover offer at a price in excess of $2 per share;

and

(ii)The Corporate Advisory Division of Macquarie Corporate Finance Limited was advising TNT Limited in connection with that potential takeover –

So what then is said here is that information that the shares would be the subject of a takeover offer can include a conclusion drawn by the accused himself and we say that simply cannot be.  Would your Honours be kind enough to go to the folder of documents, tab 8.  This was a document given to his Honour by the defence at the same time as the dialogue occurred that I have taken you to.  Paragraph 1.3:

The accused must be proved beyond reasonable doubt to have possessed the information in the indictment ie. learned the existence of the objective facts particularised – as opposed to merely having formed the subjective belief (inferred) that a takeover was likely.

I am sorry.  I am told this was given later in the trial.

The information as particularised cannot be an inference drawn by the accused.  [It is accepted that this issue has already been determined against the accused.

That put the defence position.  If you would then go to tab 9 of the same volume at line 5 the learned prosecutor put to the jury:

I will say this members of the jury, it something I will say further in due course, information in the relevant sense can include things that you work out from other things, that a person in Mr Hannes’s position works out or infers from other things. 

At page 25 of that series, the third page in, line 40:

As I said to you before, our case is not solely that Mr Hannes necessarily had direct knowledge of the takeover.  We also include in our case the proposition that he had such information available to him that he was in a position to infer the information contained in the particulars from other information.

Then if one goes to volume 1, page 63, line 30, the Crown Prosecutor said:

Your Honour did say in so far as the Crown relies on the existence of documents, and we accept that, but there need not be one late night visit or one document in the case and the Crown would still have its case on knowledge.

Having presented a lot of evidence from which the jury were asked to infer that Mr Hannes had obtained information clandestinely from documents and speaking to people, they then say, “Well, you need not find that he obtained that evidence at all.  The fact that he bought the options is sufficient information that he was possessed of the information”.  We submit that simply cannot be.  His Honour went on to say at page 64, line 10:

insofar as the Crown relied on the accused’s accessing information during late night visits to the office of the Corporate Advisory Division, it would be necessary for the Crown to prove that the accused, not merely had the means of acquiring information but that the accused had actually acquired information.

That is part of the Crown case, but it is only a part of the Crown case on the second element.  The Crown has other arguments on the second element which the Crown says would be sufficient in themselves to establish the second element. 

That is the element of possession.  His Honour said at page 303 in the same volume, line 45.  This is his Honour’s summing up:

The Crown has to prove that the accused knew the information.  The Crown says that it has proved that in a number of ways.  The Crown submitted to you that one way in which it has proved that, is that you would be satisfied that the accused accessed information in the office of the Corporate Advisory Division which revealed the information.  However, the Crown said, that is by no means the only way in which the Crown is putting the submission.  The Crown put a submission to you that it could be inferred simply from the fact of the purchase of the securities and the manner of the purchase that the accused had special knowledge and that that special knowledge was knowledge of the information in the indictment.

What has been put here time and again is that no matter what information the Crown was able to put to the jury as having been received by the accused, it did not matter whether the jury accepted that or not.  The mere fact that he bought the options, they say, is sufficient to prove particular (i) in the indictment, that is, that it was likely the shares would have been the subject of a takeover offer in excess of $2 per share.  The Court of Criminal Appeal dealt with this in volume 2 commencing at page 599, line 10:

The form of the indictment was the subject of pre-trial correspondence . . . Ground 24 articulated the substance of one objection taken to the form of the indictment, namely that it contained an inference, rather than specific information and that the information from which the conclusion might have been drawn was not particularised.  During the course of legal argument put by senior counsel for the defence, his Honour noted that “information can include matters of which the insider has been informed by someone else, matters which the insider has himself observed and matters which the insider has inferred or deduced from matters of which he has been informed or matters which he has observed”.  No challenge was made to that statement –

Well, that is wrong because the challenge was clearly made in that document and elsewhere.  In my respectful submission, the Court of Criminal Appeal did not confront the real argument which was not that the applicant could not draw inferences from information from other people, but that inferences drawn by the applicant himself from whatever source could not be regarded as information possessed by the applicant within the meaning of particular (i).  The Crown dealt with it in their submissions in this Court in volume 2, page 761, paragraph 26:

If, by the above evidence –

that is the documentary material –

the jury was satisfied beyond reasonable doubt that the applicant possessed knowledge of a likely takeover offer at $2.45, the Crown had established beyond reasonable doubt that he possessed information –

In paragraph 27 they said:

If, however, the jury was not satisfied that the applicant had accessed the MCF takeover documents during his nocturnal visits, there was a significant body of other evidence by which the jury could be satisfied the applicant possessed the particularised information falling short of something as specific as a takeover offer at $2.45.

So that it was a movable feast.  On the one hand they say, “We can infer he got information from all these documents” and on the other they say, “It does not matter.  The fact that he bought the options at the price he did prove the case”.  I see that light is on again.

GLEESON CJ:   It is the next one you have got to worry about.

MR BARKER:   Yes.  The other particular problem is special leave question 3 in volume 2 at page 730.  We say the particulars did not identify the evidence relied upon by the Crown at the trial.  They pleaded one case and set out to prove another.  They said in the indictment it was likely shares in TNT would be subject to a takeover offer in excess of $2 and this meant by however small an amount and that is how the jury were directed. 

His Honour said, “Well, look, you can find from the actual takeover that he believes it was likely there was going to be a takeover at a price of $2.45”, but because of the particulars, when you come to assess questions on non‑availability and materiality, you have to go back to the particulars in the indictment and consider the position at $2 plus any small amount.  So the jury were then in this position, that they look at the takeover offer and say $2.45, but to assess materiality and non-general availability we have to go to particular (i) in the indictment and look at the position where the value exceeded the $2 even by one cent.

GLEESON CJ:   Thank you, Mr Barker.  We do not need to hear you, Mr Game.

We think there are insufficient prospects of success of an appeal to warrant a grant of special leave and the application is dismissed.

MR GAME:   If the Court pleases.

GLEESON CJ:   We will adjourn until 2.15 pm.

AT 12.46 PM THE MATTER WAS CONCLUDED