R v Evans & anor

SUPREME COURT OF VICTORIA
CRIMINAL JURISDICTION

Not Restricted

ALAN BARTLE EVANS and	Defendants
GREGORY JAMES DOYLE

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	In the course of trial which commenced on 5 October 1999
DATE OF RULING:	13 October 1999
MEDIA NEUTRAL CITATION:	[1998] VSC 486

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Evidence – admissibility of tape recordings of telephone conversations – recordings by employer of conversations of employees had in course of employment – recordings not invasion by third party of privacy of conversations – Recordings not "interceptions" of communications under s.6(1) Telecommunications (Interception) Act 1979 (Cth) – evidence not inadmissible voire dire – standard of proof

Telecommunications (Interception) Act 1979 (Cth)

ss.6(1); 7(1)(a); 63(1)(b)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr I.D. Hill QC with	Director of Public
Mr G.T. Chettle	Prosecutions (Commonwealth)
For the Defendant Evans	Mr M. Rozenes QC with	Corrs, Chambers Westgarth
Mr T. Thomas
For the Defendant Doyle	Mr P.J. O'Callaghan QC	Freehill Hollingdale & Page
with Mr P.D. Santamaria

HIS HONOUR:

The accused Alan Bartel Evans and Gregory James Doyle are each presented before this Court by an indictment signed on behalf of the Director of Public Prosecutions for the Commonwealth of Australia and filed on 3 August 1999. They are each jointly charged on two counts. On the first count they are charged that on 20 November 1995 in breach of s.1002G(2)(a) of the Corporations Law they entered into an agreement to purchase 30,000 shares in a public company listed on the Australian Stock Exchange, Mt Kersey Mining-N.L. On the second count they are charged that, again in breach of those provisions of the Corporations Law, on 20 November 1995 they entered into an agreement to purchase 136,000 shares in Mt Kersey Mining N.L.
Breach of s.1002G(2)(a) of the Corporations Law constitutes a criminal offence by reason of s.1311(1) of the Law. The crimes in respect of which each accused stand charged are commonly known as the crimes of "insider trading".
At the time relevant to these charges the accused Doyle was employed as an institutional dealer by the stockbroker, Were Stockbroking Limited, which traded as J.B. Were & Son (Weres). He was employed at the Weres Melbourne office. It is alleged by the prosecution that the parties to the agreement to purchase shares, the subject of the first count, were Alston Falls Pty Ltd and Weres; that the accused in entering into the agreement acted in concert; that Alston Falls Pty Ltd was a private company of Evans; that in entering into the agreement to purchase the shares, Evans placed an order with Doyle to purchase the relevant shares in the name of Alston Falls Pty Ltd; that Evans did so as "agent" for that company and that in entering into the agreement, Doyle did so as an employee, as an agent of Weres.
As to the second count, it is alleged by the prosecution that the parties to the agreement to purchase the relevant shares were MPI Trustees Pty Ltd and Weres; that the accused in entering the relevant agreement acted in concert; that in entering into the agreement to purchase the relevant shares, Evans, on behalf of MPI Trustees Pty Ltd, placed an order with Doyle to purchase the shares, and that

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again Doyle at the time was an agent for Weres.

The crimes alleged to have been committed by the accused, by acting in breach of the provisions of s.1002G(2)(a) of the Corporations Law may, as is provided by that section, be committed by a person acting as a principal or as an agent.
As part of the proof of its case, the prosecution will seek to tender and rely on tape recordings of a number of telephone conversations. These telephone conversations comprise some 20 conversations between Doyle and Evans and conversations between Doyle and others, which comprise some 30 in number. Also to be relied on and sought to be tendered is the recording of a telephone conversation between one Permazel and one Donaldson, and in conversations between one Chan and Evans. The telephone conversations occurred on and between 17 November 1995 and 23 November 1995. At the time of these telephone conversations Doyle was communicating to Evans and to others while Doyle was at the dealer's desk of Weres at its premises at Level 17, 101 Collins Street, Melbourne, and Evans and others were elsewhere and away from the premises. In the case of the telephone conversation between Permazel and Donaldson, at that time Permazel, who was employed as an institutional dealer by Weres, was at its premises and Donaldson was away from the premises. Donaldson was an employee of Weres and was in Tokyo at the time.
In respect of this latter tape-recording, that which the prosecution seeks to tender, is the recording of statements made by Doyle in the dealing room at Weres which are picked up by the Permazel telephone conversation and recorded and are to be heard in addition to the conversation between Permazel and Donaldson, Doyle being in the same room as Permazel at the time that he was communicating by telephone with Donaldson. As to the conversation between Chan and Evans, Chan was at the relevant time at the premises of Weres while Evans was outside and away from such premises.
In seeking to lead this evidence of the tape recording of the various telephone

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conversations, the prosecution seeks to lead in evidence the content of the conversations had over the telephone, and also seeks to lead evidence as to the time when the various conversations took place, particularly on 20 November 1995, the day on which the crimes are alleged to have taken place. The prosecution seeks to lead this evidence of the time when the conversations took place from the time imprinted on and recorded on the recordings of the conversations.

Senior counsel for each of the accused informed the court that the tender of this evidence as constituted by the tape recordings was objected to by their respective clients. The ground on which the proposed evidence was objected to was that on each occasion the recording of the telephone conversations constituted an "interception" under the Telecommunications (Interception) Act 1979 and as such was not admissible as evidence in these proceedings.
Section 7(1)(a) of the Telecommunications (Interception) Act 1979 provides:

"(1) A person shall not:

(a) intercept; a communication passing over a telecommunication system."

"Telecommunication system" is defined by s.5 of the Act to mean:
(a) (a) a telecommunication network that is within Australia; or
(b) a telecommunication network that is partly within Australia, but only to the extent that the network is within Australia; and includes equipment, a line or other facility that is connected to such network and is within Australia."
Section 63(1)(b) of the Act, as is relevant, provides:
"(1) Subject to this Part, a person shall not, after the commencement of this Part:
(b) give in evidence in a proceeding; information obtained by intercepting a communication in contravention of s.7(1)."

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By s.6(1) of the Act it is provided:

"(1) For the purposes of this Act, but subject to this section, interception of a communication passing over a telecommunications system consists of listening to or recording, by any means, such a communication in its passage over that telecommunications system without the knowledge of the person making the communication."

Section 5 defines "communication" to include:
"Conversation and a message or any part of a conversation or
message: including that in the form of 'speech'."
The question to be determined at this point in the trial on the voir dire and before the jury is empanelled is whether the recording of the relevant conversations were "interceptions" under the Act. It is accepted by senior counsel for the prosecution that it must be established by the prosecution, on the admissibility of this evidence being objected to on behalf of the accused on the ground identified, that the recording of the conversations did not constitute interceptions of the telephone conversations being conducted over the telecommunication system within the meaning of s.6(1) of the Telecommunications (Interception) Act 1979.
It was further accepted by senior counsel for the prosecution that in the event of it being held that the recording of the relevant conversations were "interceptions" of the conversations then the tape recording of the same were not admissible in evidence. There is no discretion vested in the court by the Act to permit the recordings to be admitted in evidence in the event of the same constituting "an interception" of the relevant telephone conversations.
The tape recordings of the conversations which the prosecution seeks to lead as part of its case were made by equipment of Weres and installed at its business premises at Level 17, 101 Collins Street, Melbourne. It was situated in a secure room at such premises. The equipment was known as Electrodata 8600 Series MkII Communication Logging Recording equipment. It was manufactured in Australia by Electrodata Pty. Ltd. Typical users of such equipment have been police, fire and

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ambulance services, airports, merchant banks, betting organizations, railways, harbour authorities, commodity future dealers, stock exchanges, taxi companies, and other organizations whose day-to-day activities depend upon the spoken word. The communication of the spoken word to and from such organizations and bodies would be expected to be by the telecommunication system on many, many occasions in the day-to-day activities of people.

The equipment manufactured by Electrodata Pty Ltd was purchased by Weres around 1988. The equipment was connected across various telephone extensions at the offices of Weres and by its operation recorded telephone conversations from and to those extensions which were about one hundred in number. This included the telephones connected to client advisors and dealers employed by Weres. It did this by converting the electrical signal which came from the telephone wires into a magnetic signal which was applied to magnetic tapes moving across recording heads on the machine. The tape would be left with a magnetic imprint of the voice. When the tape was replayed passing a replay head, the electrical input would be reconstructed and the output would be heard as a replica of the original conversation.
In order to comply with Telecom standards applicable until about a year ago, it was necessary that there be incorporated into the equipment a warning tone, a pip tone, which was an audible beep which appeared on the line and appeared to both parties on the line. This sounded about every 12 to 15 seconds in the instant case. The Electrodata recorder was connected in a manner which would record any telephone conversation from the extension whether the conversation was going out of the premises or a communication from one extension to another within the premises. As part of this equipment, there was a time code unit on a time code module incorporated in it. This device produced a digital signal which was recorded on one of the tape tracks of the recorder. When a tape on the equipment was replayed, the time of the recorded conversation and in its parts would be displayed on a numerical display unit which displayed hours, minutes, seconds.

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The equipment also recorded and was able to display the date of the conversation.

On 15 August 1985 the Chief General Manager of Telecom Australia advised Electrodata Pty Ltd that it was authorized to supply the pip tone generator, of the type which Electrodata Pty Ltd had provided to Telecom, for use in conjunction with the telecommunication system. Dr Baker, a director of Electrodata Pty Ltd, described a pip tone generator as a device which creates the warning tone applied to the line and that it was also a device that isolated "the recorder from the communication network". He described it as an "interface device". He said that this device met the requirements of the then current standards which prevented any large voltage from entering in the telecommunication network in the case of an accident. Dr Baker further described the device as a barrier that allowed the voice to come across it to be recorded, but prevented voltage going back.
By its letter to Electrodata dated 15 August 1995, Telecom Australia advised it that the authorization was valid for a period of 12 months from that date. It also stated that Electrodata, the grantee of the authorization, may make application prior to the expiration of the authority for an extension of it. To this matter I shall later return.
At the time the 8600 Series Electrodata Communication Logging Recorder being manufactured and supplied by Electrodata was a MkI unit. It was essentially the same as the MkII model which was continued to be manufactured in 1988. The change included a change of the colour of the cabinet. The authorization granted by Telecom only related to the pip tone generator which was part of the recording equipment. It was physically incorporated within the recorder. It interfaced with the telecommunication network. The authorization did not otherwise relate to the Electrodata recording equipment.
Dr Baker gave evidence, which I accept, that once the authorization was granted, he was not notified at any time that the permit had been cancelled or revoked. He said that it did not appear from the people he spoke to that there was any need to get an authorization for any other part of the equipment other than the interface

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device. Dr Baker further gave evidence that persons on both ends of the conversation would hear the bip and that in its operation the person talking and the telecommunication network was always there so that in the event of the recorder failing, breaking down, there would be no change in the ability of parties talking to each other and the signal would go to the handset, but in such case the conversation would not be recorded.

In further cross-examination, Dr Baker said that the recorder equipment including the pip tone generator were provided by Electrodata, not the carrier. He said further that after the authorization was granted, at no time did he make application for renewal of the permit. The witness described how the telephone equipment in most offices was third-party items provided by suppliers and said that that which Electrodata supplied was no part of the service provided by a carrier. To these matters I shall later shortly return.
Evidence was led on behalf of the prosecution that the authorization granted to Electrodata in 1985 which enabled it to incorporate the pip tone generator in its recording equipment in order that communications, including telephone communications, may be recorded by use of its equipment remained in force and was still in force on 5 August 1996. That was challenged on behalf of the accused. Again, I shall shortly return to this matter later.
What is relevant to the matter in issue is that the Electrodata recorder incorporated the pip tone generator and as part of its function it caused a tone pip or beep on the line to be heard at each end of those speaking on the line. There was no evidence to suggest that by Weres installing and using the recording equipment which incorporated the pip tone generator they were doing something which they knew was not authorized or was not permitted in any way.
It was common ground, on the voir dire held to determine the issue of the admissibility of this evidence, and admitted by the accused by their counsel for the purpose of the voir dire, that the tape-recorded telephone conversations which the

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prosecution seeks to have admitted in evidence were recorded by the Electrodata recorder situated at the premises of Weres previously referred to. The relevant recorders, which were two in number, one a double-deck recorder and one a single- deck recorder were from time to time serviced and maintained. The last three occasions before 20 November 1995, being 17 August 1995, 11 September 1995, and 9 October 1995. The technician who carried out these services, Hoff, said that on these occasions he checked the system to see whether the pip tone was audible and operating, adding, "We always do", and that it was part of the service requirement. On 19 September 1996 he attended at Weres premises at the request of the Australian Securities Commission and found the equipment to be the same as it was in 1995.

In 1995, Ms Gay, the then manager of Weres Legal and Compliance Division, prepared and had printed a manual entitled "Compliance, Getting It Right". In the manual there was contained a section stating that all private advisors' telephone lines were taped and that the main purpose for recording conversations was to have a point of reference should a dispute occur. Weres had been granted an unrestricted dealer's licence and it was responsible for the acts of its dealers and other representatives. The manual, which was produced in about June 1995, was provided to private client advisors and also to the desks of others at Weres, including the institutional dealers. Ms Gay said that there were copies around their desks. She was unable to specifically say whether she had given a copy to Doyle who was employed, as I have referred to, as an institutional dealer. Also, around the dealers' desks, Ms Gay said, were such matters as paperwork, research material, business rules, ASX business rules and like material. The witness Gay gave evidence that she would have thought that it was generally known by those who worked at the institutional trading desk at Weres that their telephone calls were being taped.
Ms Gay caused to be taken from the master tapes of the recording equipment at Weres in March 1996 copies of recorded telephone conversations in November 1995

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concerning the Mt Kersey tradings. From the master tapes some twelve smaller cassette copy tapes were produced. These represented conversations had by different persons, including Doyle whose voice she recognized. These tapes were played in the presence of Doyle on two occasions.

In addition to hearing the record of the conversations from these tapes, Ms Gay also heard the recording of a "ping" or "beep" noise. At the time that Doyle listened to the tapes he did not ask Ms Gay what that sound was.
In cross-examination, Ms Gay said that Doyle returned to the Melbourne office of Weres in July 1995 after working in London for some four years and that it was possible that the manual had been circulated before he returned.
The witness, Van Arkel, who, for a period of four years ending December 1997, was employed as an assistant operating manager at Weres, gave evidence that in June 1994 his department took over the task of monitoring telephone communications at Weres. His work involved monitoring and attending to the Electrodata recording machines. He was during that period called on from time to time to replay tapes to advisors and dealers. He said that was a common occurrence. The first time he replayed a tape of the relevant recorded telephone conversation to Doyle was at the request of Ms Gay in February 1996. When playing the tapes to Doyle, he, Van Arkel, heard the "pip tones".
The Telecom Australia specification "Interworking and Non-interference Requirements for Customer Premises Equipment Attached to the Public Switched Telephone Network" published by the Regulatory Directive in March 1989 provided by s.1 in its first paragraph that the specification defined:
"... The technical conditions and requirements for interworking and non-interference that privately owned, installed and maintained Customer Premises Equipment shall meet for connection to the Public Switched Telephone Network."

By appendix -C of the specification headed "Recording of Telephone Conversations
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Technical Conditions" it provided in part:
"The design of the C.P.E [customer premises equipment] designed to record telephone conversations shall be such that at all times a telephone conversation is being recorded a pip tone shall be transmitted to line. Interlocking circuitry shall be incorporated to ensure that whenever the recorder is in a recording mode the pip tone generator shall send warning tones to line. The pip tone generator shall not be capable of being disabled while a conversation is being recorded... "
Further, by clause 2 of the appendix, it was provided:
"Only the distant party is required to be made aware that a
conversation is being recorded."
The witness Kenner, a telecommunication engineer currently employed by the Australian Communication Authority as the Narrow Band Customer Equipment manager, examined the circuit diagram of the pip tone generator which accompanied the application of Electrodata to Telecom in July 1985 for approval of its pip tone generator and which was the subject of the approval, the authority or permit granted on 15 August 1985. He gave evidence that from the diagram it looked as if the pip tone would be going in both directions, that is, to the person at each end of it.
He gave evidence further that if the pip tone was on the recording of a recorded conversation it would be a very good indicator that the signal was going out on the line to the person at the recording end. Kenner gave evidence that the pip tone generator, he believed, was not capable of being configured to stop the pip tone going to the distant receiver.
For the purpose of the voir dire only it was admitted on behalf of each accused that on the master tapes and the copies heard by Ms Gay there was to be heard audible pip tones.
Kenner gave evidence that to stop the pip tone going to the person at the end other than the recording end, a wire identified by him would need to be broken, that
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there would need to be a fault in the equipment. There was no evidence that the wire in the equipment was broken at the relevant time. The evidence of Hoff, taken in conjunction with the last concession of fact referred to, satisfies me that at the relevant time the pip tone generator and recorder were working in good order and condition.
The accused Doyle did not give evidence, nor did he call evidence on the voir dire.
The accused Evans gave evidence himself, otherwise he did not call any other evidence on the voir dire. Evans gave evidence that in the period from 17 November 1995 and for a period of some two weeks later he did not know that his conversations with Doyle were being tape recorded or that they were being listened to. He further said that he did not now have a recollection of hearing bips on the line when talking to Doyle on those occasions. He said that he was first made aware that the calls were being recorded some two to three weeks after 20 November, but he said that he could not recall the circumstances in which he learnt of that matter.
In cross-examination, he maintained that he could not recall hearing beeps or pips or audible signals on the line when he spoke to Doyle on the twenty occasions on which his conversations with Doyle were recorded. He also said that he had no recollection of hearing audible tones on the line when he spoke to Chan. In cross- examination, he also said that he first learnt that his conversation with Doyle was being recorded some two to three weeks after 20 November 1995 and that it was two to three weeks after 20 November 1995 that he learnt for the first time that Weres had in operation a system that emitted an audible bip tone over the telephone line. He said that came as a surprise to him. He said at the time he thought back as to whether he had heard beeps on the line and could not recollect hearing beeps over the telephone line.
Evans, by his own evidence, is a company finance director. He said that for the last decade at least when dealing with financial institutions he has heard beeps on
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the phone while talking to them and that it was a commonplace thing to him. He said that he knew that the purpose of the beep or pips was to signify that his conversation was being recorded. He said that he well knew before November 1995 that financial institutions often recorded telephone conversations and also said that he would have to assume that before 17 November 1995 some stockbrokers recorded some conversations.
Senior counsel for the prosecution submitted that the standard of proof necessary for the Court to have regard on questions of fact necessary for it to establish on the voir dire was that the fact or matter must be established on the balance of probabilities. This was not contested by counsel for Evans. However, senior counsel for the accused Doyle submitted, without citing any authority to support his submission, that any fact necessary for the prosecution to prove on this voir dire relevant to the admissibility of the taped records of telephone conversations must be established on the higher criminal standard, that is beyond reasonable doubt. I do not agree with this latter submission.
On issues of fact to be established by the prosecution on a voir dire such as this relevant to the Court's decision whether evidence is admissible on the trial of an accused, where the admissibility of such evidence has been objected to, such facts must be established to the satisfaction of the Court on the balance of probabilities. R v Wendow (1963) 109 C.L.R. 559, Taylor and Owen JJ. at 572, Dixon C.J. At 562; R v Browne-Kerr (1990) V.R. 78.
The pip tone generator forming part of the recording equipment installed at Weres and by which its operation recorded the telephone conversations, sought to be led in evidence by the prosecution was, by its design and by its operation, such that when a telephone conversation to or from an attached extension was being recorded, a pip or beep was transmitted to the line at each end, that is to the line of the person speaking and listening at the recording end and also at the other end. I accept the evidence of Hoff that on the occasions that he serviced the equipment, on
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the occasions detailed in his evidence before 17 November 1995, he checked and found the audio pip tone to be operating. The recordings made by Weres equipment of the subject conversations have recorded the pip tone or beep as part of the recording. This fact is admitted on behalf of the accused. This fact establishes to my satisfaction that during the relevant period when the subject conversations took place and at the time when they took place and were recorded, the recording equipment and the pip tone generator was in good working order. I accept the evidence of Kenner as to his explanation of the transmission of the beep or pip tones.
On the evidence that at the relevant times when the equipment was serviced before 17 November 1995, the beeps or pip tones were present and that the sound of the same were to be heard on the subject recordings, it would be open to be concluded that at the time of the relevant telephone conversations there were transmitted to each party to the telephone conversation a tone pip or beep every 12 to 15 seconds and it was there to be heard. However, the evidence of Evans is that during his telephone conversations with Doyle he did not know that his conversation was being recorded and did not know for some two to three weeks after 20 November 1995. It could be said that this evidence, if accepted, challenges the conclusion that otherwise may be drawn that during the relevant conversations beeps or pips were transmitted to the line and able to be heard by those speaking and listening on the line. This, it could be said, was particularly so as Evans, for many years before November 1995, was accustomed to hearing tone pips or beeps when conducting a telephone conversation with financial institutions and was aware that the presence of such sounds gave warning that the telephone conversation was being recorded. Evans said that when he learnt that his telephone conversations with Doyle were being recorded some two to three weeks after 20 November, at which time he learnt that Weres had a system which emitted beeps on the telephone line, it was a surprise to him. Notwithstanding that, he gave evidence that he could not now recall the circumstances in which he learnt of the fact that the conversations with
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Doyle had been recorded. However, he gave evidence that when he learnt that the telephone conversations with Doyle were being recorded, he could not recall hearing beeps or pips on the line. For him to be able to recall that latter matter now causes me to have sufficient doubt as to his evidence, that he does not now recall the circumstances when he says that he first learnt that his conversations with Doyle were recorded, to not accept that evidence. In turn, that causes me to closely scrutinize and assess the evidence of Evans that he did not know that his conversations with Doyle were being recorded until some two to three weeks after 20 November 1995.
I am satisfied from the fact that the beeps or pips are to be heard on the recorded conversations that they were transmitted to each end of the line during the conversations. I am satisfied that such sounds were present to be heard by Evans during his telephone conversations with Doyle. Other than him saying that from listening to the recordings the beeps were nowhere near the intensity or frequency of the beeps generated by banks he dealt with, no explanation is forthcoming as to why he would not and did not hear the pips when speaking to Doyle. Evans had some twenty conversations with Doyle when the beeps or pip tones were transmitted to the telephone line on which he was talking and listening. I do not accept his evidence that he did not know at the time of his conversations that they were being recorded; rather, I am satisfied to the necessary degree that the bips or tone pips were transmitted to his end of the line during the conversation, they were present to be heard, and were heard, and by reason of his previous knowledge of the presence of the meaning of such beeps I am satisfied that he knew that his telephone conversations with Doyle were being recorded at the relevant time. I am also satisfied that at the time of these conversations there was to be heard on the end of the line on which Doyle was talking the transmitted pip tones or beeps.
It was not contested by senior counsel for Doyle that such conclusion was open on the evidence. The question arises, however, whether Doyle had knowledge that his conversations with Evans and others were being recorded. There are some fifty
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recordings of conversations had by Doyle that are sought to be tendered in evidence. There was no evidence before the Court that Doyle knew that the presence of beep or tone pips on the line gave warning that the telephone conversation was being recorded.
The section of the Compliance Manual produced by the witness Ms Gay concerning the taping by Weres of telephone conversations informed the reader, as I have previously referred to, that all private client advisors' telephone lines were taped. Beyond that, it informed the reader that the new client account forms included a paragraph advising clients that their telephone conversations may be taped. Beyond this, Ms Gay's evidence on the matter was that she would have thought that it would have been generally known by those working on the institutional traders' desks that their telephone conversations were being tape recorded. This piece of evidence, at best, is vague and really amounts to a matter of speculation.
Van Arkel's evidence, as referred to, was that it was common practice for advisors and dealers to approach him to request tape recordings of conversations made at Weres to be replayed. There was no evidence that Doyle had ever made such a request. Van Arkel said that he had no discussion with Doyle as to his knowledge whether he knew that his telephone was being tape recorded.
It was submitted on behalf of the prosecution that whether Doyle knew, at the relevant time, that his telephone conversation with Evans and others were being tape recorded was a matter within his own knowledge and that the fact that Doyle did not give evidence on the voir dire as to this matter should be taken into account by the Court.
It was submitted that by applying the principles enunciated in Jones v. Dunkel (1959) 101 C.L.R. 298 the Court, in the absence of any evidence on this matter by Doyle, should, on the evidence, be more ready to infer that Doyle at the time of the relevant telephone conversations did know that they were being recorded.
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The principles enunciated in Jones v. Dunkel and other like authorities was stated succinctly and clearly by Newton and Norris JJ. In O'Donnell v. Reichand (1975) 59 V.R. 916 at 929.
In the circumstances where Doyle did not give evidence on the voir dire, I am able to infer, and do infer, that his evidence would have not helped his case on this matter, but the question still remains that having regard to that conclusion is it able to be inferred on the evidence before the Court, on the voir dire, that Doyle, working at the dealer's desk at Weres in November 1995, knew from the sound of the tone pips on his telephone line, which I am satisfied he would have heard, that his telephone conversations were being tape-recorded. I am not able to conclude, to infer from the evidence before the court on the voir dire to the standard of satisfaction necessary to be had, that at the time of the relevant telephone conversations Doyle knew that the same was being recorded.
The fact that I am not able to be satisfied that at the time of the subject of these telephone conversations Doyle knew that his telephone conversations with Evans and others were being recorded is not determinative of the question whether the recording of the same by Weres, by its equipment, constituted an "interception" under s.6(1) of the Telecommunications (Interception) Act 1979. In Edelsten v. The Investigating Committee of New South Wales (1986) 7 N.S.W.L.R. 222 Lee J. At p.229 when considering s.6(1) of the Telecommunications (Interception) Act 1979 said:
"The Act in seeking to control interception of communications, is concerned to protect the privacy of communications passing between users of the [telecommunications] system established by the Commission, that system being one which relies partly on fixed telephone lines to carry messages and partly on radio waves." .
Again, further, he said later:
"As a matter of ordinary usage of English it can be said that the signal or conversation transmitted or received by the Commission's equipment is 'intercepted' when it is picked up by someone who has intruded into the frequency used by the Commission and listened to
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or recorded the conversation as s.6(1) requires.
Indeed, in that circumstance the word 'intercepted' is the only word that is truly apposite."
In R v. Edelsten (1990) 21 N.S.W.L.R. 542 the Court of Criminal Appeal, constituted by Carruthers, Allen, and Badgery-Parker JJ. at 549 stated that Lee J. in Edelsten v. The Investigating Committee of New South Wales had "correctly identified the mischief at which the legislation was being directed as being that:
'The Act in seeking to control interception of communications is concerned to protect the privacy of the communications passing between users of the system established by the Commission.'"
In my view, that which Lee J. and the Court of Criminal Appeal were expressing in their judgments was that the Telecommunications (Interception) Act 1979 was seeking to protect the privacy of communications passing between users of the telecommunication system from the interception from the intrusion of a third party to the conversation. In -T v. The Medical Board S.A. (1992) 58 S.A.S.R. Matheson J., with whose judgment Debelle J. concurred, at p.398 agreed with the judgment of the New South Wales Court of Appeal in R.v. Edelsten where it said that Lee J. In Edelsten v. The Investigating Committee of New South Wales had correctly identified the mischief at which the Telecommunications (Interception) Act was directed and specifically agreed with the passage in the judgment of Lee J. To which I have last referred.
In -T v. The Medical Board S.A. The Court addressed the matter, inter alia, whether the recording made on a taperecorder by a patient of a telephone conversation she had with the appellant was an interception within the meaning of s.6(1) of the Telecommunications (Interception) Act 1979. It was held by majority (Olson J. dissenting) that it did not.
At p.398 Matheson J. said:
"Next, I draw attention to the fact that Parliament in enacting s.6(1) has used the words 'listening to or recording ... '. It surely cannot have intended that when -A telephones -B and listens to what -B says
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in response to him that there is an interception within the meaning of
the Act.
I do not consider that there is any good reason why the law with respect to telecommunications should proscribe and render inadmissible in evidence a recording such as that made here of something said by -B over the phone to -A, B knowing that A is listening to him. As Mr Jennings pointed out, if Mrs -H had said to Dr -T over the phone that she was going falsely to accuse him and he had recorded that, then that recording would, on the appellant's argument, be inadmissible.
I prefer and adopt the interpretation advanced by Mr Jennings that any intrusion by a third party into a communication from A (the caller) to -B (the intended recipient) in its passage over the system from caller to intended recipient will be an interception if made without the knowledge of the caller or the recipient.
Mr Jennings pointed out that although Mrs -H's action in recording the conversation was without the knowledge of the appellant it involved no interference with the integrity of the telecommunication system whatsoever. The appellant knew that Mrs -H was listening to what was said. She could have made a contemporaneous longhand or shorthand note of the conversation and given that in evidence, and that would surely have been a record."
In Green v. R. (1996) 123 F.L.R. 423 Franklyn J., with whose judgment Pideon and Rowland JJ. agreed, said at p.432:
"I agree with Matheson J and the New South Wales Court of Criminal Appeal in Edelsten that the [Telecommunication (Intervention)] Act is concerned to protect the privacy of communications passing between users of the system established by the Commission. As such, there is nothing to be protected as between the caller and the intended recipient who receives the call. The intended protection is against the third party invading the privacy of that communication by an interception within the meaning of s.6(1)."
Senior counsel for the prosecution submitted that with respect to each conversation recorded on the equipment installed and maintained by Weres that the company in recording conversations of its dealer, and in particular that dealer Doyle, in this case, was not a third party invading the privacy of that telephone communication he had with Evans and others. He submitted that in consequence the recording of the subject telephone conversation did not constitute an interception under s.6(1) of
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the Act and in the result the recordings were able to be admitted in evidence.
Senior counsel for Doyle, whose submissions were adopted and relied on by senior counsel for Evans on this matter, submitted that in the circumstances Weres were a third party to the subject communication and by recording the same it had intercepted them under s.6(1) of the Act and therefore the tape recordings were not admissible on the trial. Senior counsel for Doyle conceded that it was open for the court to conclude that all the subject conversations had by Doyle were in the course of his employment with Weres. Each of the telephone conversations were had by Doyle at the office of Weres during its apparent business hours and within the period of time that telecommunicationses were recorded by its equipment. There is nothing to suggest otherwise than that the subject telephone conversations had by Doyle were other than in the course of his employment with Weres. I am satisfied that the telephone conversations had by Doyle were in the course of his employment with Weres at the relevant time.

From the deposition material it appears that Chan was also an institutional dealer, also employed by Weres at the dealer's desk. The conversation he had with Evans on 23 November 1995 and which was recorded was also had by Chan, in my view, in the course of his employment with Weres during its business hours.
In support of the submission that Weres in recording the subject telephone conversations was a third party to the communication and invaded the privacy of it, senior counsel for Doyle submitted that Weres, it should be inferred, recorded the telephone conversations and other telephone conversations by its employees for the protection of its own commercial interests and not in the interests of its employees, including Doyle, or its customers, including Evans. It was submitted it should be inferred that by recording such conversations Weres were intent on protecting itself from lack of fidelity or diligence by one of its employees or lack of good faith by a customer.
The compliance manual stated that the main purpose of taping client conversations
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was to have a point of reference should a dispute arise. In many, many fields of modern commerce, commercial transactions are negotiated and entered into by oral communications had by means of the telecommunication system. On authority, as I have referred to and particularly R v Green, if one person to such a telephone conversation, tape recorded such a conversation, even without the knowledge of the other person who was speaking and listening on the telephone during the communication, the recording would not be an interception within s.6(1) of the Act and would be admissible in evidence in a court proceeding. One can readily think of circumstances where a dealer employed by a broker such as Weres may wish to check for himself orders placed with him by a client during a telephone conversation before acting on them or other transactions entered into on behalf of his employer before implementing the same and may do so by reference to the tape-recording of the telephone conversation made by his employer, in this case Weres. Again, one can readily think of circumstances where a client of a broker such as Weres who has given an order to a dealer or entered into a transaction with a dealer by means of an oral telephone conversation in the event of a dispute arising concerning the same may wish to rely on the tape-recording of such conversation made by the broker's employee, as evidence in a court proceeding. I do not agree with the submission made by senior counsel for Doyle that the purpose of Weres recording telephone conversations such an those the subject of this matter was limited to the extent submitted.
By the telecommunication recording equipment situated at its business premises, Weres recorded the telephone conversations from the desks of a number of its employees who in the course of their employment with Weres were dealing with clients of Weres who placed orders with them and sought and received advice as part of the business of Weres. The telephone conversations had with clients by employees of Weres would be part of Weres transacting its business which would be done by its employees acting in the course of their employment. Weres as a corporation could only act through its agents and employees. There could be no
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privacy in such a telephone conversation which was private from the dealers or
advisor's employer, their principal, the corporation Weres.
The conclusion that I have reached is that by recording the subject telephone conversations Weres was not a third party to such and invading the privacy of the telephone conversations had between Doyle and Evans and Doyle and others and between Chan and Evans. The recording of the subject telephone conversations by Weres do not constitute interceptions within the meaning of s.6(1) of the Act. Accordingly, the provisions of s.63(1) of the Act do not prevent the tape recordings of the conversations being admitted in evidence on this trial.
It was further submitted on behalf of the prosecution that in November 1995 at the time of the subject telephone conversations the authority or permit granted to Electrodata on 15 August 1985 was in force and, as such, it lawfully permitted the recorder incorporating the pip tone generator to be attached to the telecommunication service provided by the carrier to the premises at Weres and that as the recording equipment recorded the conversations passing over the telecommunication of which the service formed part, the recording of the communication was not an interception of the communication by reason of s.6(2) of the Act.
As part of its case and as part of its argument on this point, it was necessary for the prosecution to establish that after the authority was first granted to Electrodata in August 1985 it thereafter remained in force, that it was in force when the equipment was installed at Weres in 1988 and thereafter in November 1995.
I refer briefly to the evidence led and tendered on the voir dire by the prosecution relevant to this submission through the witness Helm. There was tendered a certificate under s.286 of the Telecommunications Act 1991 and signed by him certifying that the permit relevant to the pip tone generator and issued to Electrodata Pty Ltd on 15 August 1985 was still in force on 5 August 1996, the date on which the certificate was signed. The certificate stated that the permit related to
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a "logging recorder which incorporates a pip tone generator to allow for the
recording of the telephone conversations".
Also tendered in evidence by the prosecution through the witness Kenner were computer printouts made in July 1995 and October 1996 from a database maintained by the Australian Communications Authority, which was the Australian Government Telecommunication Regulator, showing that on those dates the authority or permit issued on 15 August 1985 with respect to the pip tone generator was at that time in force. It emerged from the evidence of Helm that in issuing the certificate dated 5 August 1996 pursuant to the authority invested in him under s.405 of the Telecommunications Act 1991 he had relied on a database held by Austel in the permits section of Austel. Austel was the Australian communicating authority responsible for the administration of the Telecommunications Act.
Senior counsel for Doyle submitted that the Court should not act on this evidence as other evidence was to the effect and established that at the time that Electrodata supplied the recording equipment to Weres in 1988 the permit or authority had lapsed. He drew attention to the terms of the permit being that it was only valid for 12 months from the date of issue and, further, that by the special conditions annexed to the same it was necessary for the grantee of the permit to apply before the expiry date for renewal of the authority or permit. Counsel in support of this submission further submitted in substance that the evidence of Baker, a director of Electrodata, and the managing director of that company, who applied for the permit, should be accepted. His evidence, as I have previously referred to, was that at no time did he make an application for renewal of the permit. It was this evidence that senior counsel for Doyle relied on to support his submission that at the time relevant the authority had lapsed and was not operative and the certificate issued by Helm and the printouts from the database as previously referred to should not be acted on. Further, Baker gave evidence that the recording equipment incorporating the pip tone generator which was installed at Weres as provided by
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Electrodata was additional to and separate from and not part of the service provided by the carrier.
It was submitted by senior counsel for Doyle that contrary to the submissions of counsel for the prosecution, that s.6(2) of the Act only had operation if the equipment which recorded the communication passing over the telecommunication system was part of the service provided by the carrier, it being submitted that on the evidence of Baker it was not part of the service provided by the carrier.
I only briefly outline this additional matter, the subject of evidence and submissions on the voir dire giving rise to issues of fact and the meaning of s.6(2) of the Act. It is not necessary for me to determine these issues on the voir dire and I do not proceed to do so, as I have determined, for the reasons previously stated, that the recording of the subject telephone conversations were not interceptions under s.6(1) of the Act and, accordingly, the provisions of s.63(1) do not prevent them being admitted in evidence on the trial.
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[1999] VSC 486

13 October 1999