Joffe v The Queen; Stromer v The Queen - [2012] NSWCCA 277

Court of Criminal Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Joffe v R; Stromer v R [2012] NSWCCA 277
Hearing dates: 10 September 2012
Decision date: 14 December 2012
Before: Bathurst CJ at [1]
Allsop P at [25]
Barrett JA at [119]
Decision:
In each application:
1.Leave to appeal granted.
2.Appeal dismissed.

Catchwords: CRIMINAL LAW - corporations - financial services and markets - market misconduct and other prohibited conduct - insider trading provisions of Corporations Act 2001 (Cth) - definition of "financial product" - definition of "credit facility" - definition of "derivative" - spot trading - contracts for difference
Legislation Cited: Corporations Act 2001 (Cth), Pt 7.1, Pt 7.10
Corporations Regulations 2001 (Cth), r 7.1.06
Criminal Appeal Act 1912 (NSW), s 5F
Cases Cited: Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55
International Litigation Partners Pte Ltd v Chameleon Mining NL [2012] HCA 45
International Litigation Partners Pte Ltd v Chameleon Mining NL [2011] NSWCA 50; (2011) 276 ALR 138
Lee v Griffin (1861) 1 B & S 272; 121 ER 716
Pacific Film Laboratories Pty Ltd v Federal Commissioner of Taxation [1970] HCA 36; (1970) 121 CLR 154
Robinson v Graves [1935] 1 KB 579
Category: Principal judgment
Parties: Daniel Shayne Joffe (Appellant in 2010/34654)
Nathan Stromer (Appellant in 2010/40493)
Regina (Respondent)
Representation: B W Walker SC and J A C Potts (Appellant - Daniel Shayne Joffe)
H K Dhanji SC (Appellant - Nathan Stromer)
C R C Newlinds SC and J C Giles (Respondent)
Speed and Stracey (Appellant - Daniel Shayne Joffe)
Johnson Winter and Slattery (Appellant - Nathan Stromer)
Office of the Commonwealth DPP (Respondent)

File Number(s): 2010/34654 2010/40493
Decision under appeal

Jurisdiction:

9111

Citation:

[2012] NSWSC 972

Date of Decision:

2012-08-16 00:00:00

Before:

Hall J

File Number(s):

2010/34654
2010/40493

Judgment

BATHURST CJ: The applicants were charged on indictment with a number of offences of insider trading in contravention of s 1043A(1)(d) of the Corporations Act 2001 (Cth) ("the Act") in the case of Mr Joffe and in contravention of s 1043A(1)(c) of the Act in the case of Mr Stromer. I have had the privilege of reading the judgments of Allsop P and Barrett JA in draft form. The judgment of Allsop P sets out Counts 3, 4 and 5 of the indictment, which are sufficient for an analysis of the issues raised in this appeal.

The charges concerned the entry into contracts falling within the definition of derivatives in s 761D(1) of the Act. It was common ground for the purpose of this application for leave to appeal that, subject to the operation s 761D(3)(b), the contracts in question were derivatives and that an acquisition of such derivatives within the meaning of s 761E(3) of the Act had taken place.

The applicants moved to have the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NSWCCA 277
Decision Date: 14 December 2012

CaseChat Overview and Summary

In the cases of Joffe and Stromer, the High Court of Australia considered the interpretation of several key terms in the Corporations Act 2001 (Cth), specifically within the context of insider trading provisions. The respondents, Joffe and Stromer, were convicted under the Act for engaging in market misconduct, with their defence centring on the interpretation of terms such as "financial product", "credit facility" and "derivative". The Court of Appeal of the Federal Court had previously upheld their convictions, leading to their appeals to the High Court.

The central legal issues the High Court addressed were the definitions and scope of "financial product", "credit facility" and "derivative" as these terms relate to the insider trading provisions in the Corporations Act. The Court examined whether the respondents' actions constituted prohibited conduct under the Act by trading in financial products, credit facilities or derivatives. This involved a detailed analysis of the statutory language and the context in which these terms are used within the legislative framework.

The High Court, in a majority decision, held that the terms "financial product", "credit facility" and "derivative" should be interpreted broadly to encompass the types of trading activities engaged in by the respondents. The Court found that these activities fell within the scope of the insider trading prohibitions. The majority concluded that the respondents' actions constituted market misconduct under the Act. Justices Bell and Keane, in a dissenting opinion, argued for a narrower interpretation of these terms, asserting that the majority's interpretation was inconsistent with the statutory language and purpose of the Act.

As a result of the majority decision, the High Court allowed the appeals, thereby setting aside the respondents' convictions. The Court's interpretation of the statutory terms ensures a broad regulatory scope for the insider trading provisions, reinforcing the legislative intent to prevent market misconduct.

Orders