R v Ferguson
[2018] SASCFC 130
•5 December 2018
Supreme Court of South Australia
(Court of Criminal Appeal)
R v FERGUSON
[2018] SASCFC 130
Judgment of The Court of Criminal Appeal
(The Honourable Justice Blue, The Honourable Justice Doyle and The Honourable Auxiliary Justice Chivell)
5 December 2018
CRIMINAL LAW - APPEAL AND NEW TRIAL - MISCARRIAGE OF JUSTICE - PARTICULAR CIRCUMSTANCES NOT AMOUNTING TO MISCARRIAGE
CRIMINAL LAW - APPEAL AND NEW TRIAL - PARTICULAR GROUNDS OF APPEAL - MISDIRECTION AND NON-DIRECTION - CONSIDERATION OF SUMMING UP AS A WHOLE
CRIMINAL LAW - APPEAL AND NEW TRIAL - PARTICULAR GROUNDS OF APPEAL - MISDIRECTION AND NON-DIRECTION - PRESENTATION OF DEFENCE CASE
Appeal against conviction.
The appellant was charged with 8 counts of giving false or misleading information to directors of a corporation and 9 counts of disseminating false or misleading information likely to induce a person to acquire financial products.
The appellant was the chief executive officer and company secretary of Australian Bight Abalone Ltd (ABAL). ABAL was the responsible entity for managed investment schemes involving off shore farming of abalone in cages.
The counts related to reports by the appellant or other employees to the board or to information provided to investors or potential investors in periodic investor reports, product disclosure statements or a media release. The majority of the counts alleged understatement of abalone mortality numbers or consequential overstatement of financial performance in relation to the 2005 scheme. In respect of these counts, there was no real dispute about the physical elements of the offences and the real issue was the appellant’s knowledge of the true position.
The heart of the prosecution case in respect of the appellant’s knowledge was that ABAL’s operations manager Darren Tressider told the appellant and one of ABAL’s directors in January 2007 that the majority of abalone the subject of the 2005 scheme had died or was missing and this was a vastly greater mortality rate than hitherto believed; that the appellant and the director told Mr Tressider not to disclose this to anyone; and that the appellant thereafter knew that reports to the board and investors about mortality rates for and financial performance of the 2005 scheme were false. The prosecution relied on certain items of circumstantial evidence to support Mr Tressider’s evidence. The appellant gave evidence denying that the conversation deposed to by Mr Tressider ever occurred.
The appellant appeals on the ground that the Judge erred in directing the jury by summarising only the circumstantial evidence on which the prosecution relied and not giving equal prominence to matters relied on by the defence that pointed towards innocence.
Held by Blue J (Doyle J and Chivell AJ agreeing) dismissing the appeal:
1. The summing up was not imbalanced and the Judge did not err insofar as the Judge first summarised five topics of circumstantial evidence relied on by the prosecution and later summarised the defence response in relation to those topics (at [143]-[193]).
2. The summing up was not imbalanced and the Judge did not err in relation to other topics of circumstantial evidence said to support the defence case (at [197]-[199]).
3. The summing up was not imbalanced and the Judge did not err insofar as the Judge when summarising the prosecution’s reliance on circumstantial evidence referred on occasions to them as “facts” because it was evident to the jury that the Judge was only summarising the prosecution case (at [202]-[213]).
4. On a holistic assessment the summing up was not imbalanced and no miscarriage of justice was occasioned by the manner in which the Judge summed up in relation to circumstantial evidence (at [216]).
5. Appeal dismissed (at [217]).
Corporations Act 2001 Cth ss 1041E(1), 1309(1), 1311(1), referred to.
R v FERGUSON
[2018] SASCFC 130BLUE J:
The appellant, Andrew Ferguson, was tried in the District Court before a jury on eight counts of making available or giving false or misleading information to directors of a corporation[1] and nine counts of disseminating false or misleading information likely to induce a person to acquire financial products.[2] He was unanimously convicted of all 17 counts.
[1] Corporations Act 2001 (Cth) section 1309(1).
[2] Corporations Act 2001 (Cth) sections 1041E(1) and 1311(1).
The appellant appeals against his convictions on the ground that the Judge erred in directing the jury by summarising only the circumstantial evidence on which the prosecution relied and not giving equal prominence to matters relied on by the defence that pointed towards innocence.[3]
[3] The notice of appeal contains several other grounds but they were abandoned at various stages in the appeal process.
Background
The appellant was the company secretary from July 2004 and chief executive officer from February 2005 of Australian Bight Abalone Ltd (ABAL).
ABAL was incorporated in July 2004 to farm Greenlip Abalone (abalone) in offshore “cages” (cages). ABAL became the responsible entity in respect of five managed investment schemes involving the farming of abalone in cages (grower cages or grow-out cages) offshore near Waldegrave Island near Elliston on the West Coast of Eyre Peninsula. Investors in the schemes were called “growers”. The first managed investment scheme was established in 2005 (the 2005 Project) and further schemes were established each year thereafter up to and including 2009 (the 2006, 2007, 2008 and 2009 Projects respectively). ABAL also farmed abalone in its own cages (company cages or nursery cages) for supply of juvenile abalone (spat) to future projects.
Traditionally during the second half of the twentieth century, abalone was either caught in the sea (wild caught abalone) or farmed in land-based (onshore farmed abalone). Hong Kong/China was and is the largest market for Australian abalone. Wild caught abalone generally commanded a higher price than onshore farmed abalone due to their different colour (vibrant green compared to pale flesh) and appearance (rough discoloured shell compared to smooth uniform shell). In 1997 Darren Tressider commenced designing and trialling a hybrid system in which abalone spat (juvenile abalone typically up to one year old) were grown in offshore cages (offshore farmed abalone).
Mr Tressider’s system as at 2004 involved a series of cages placed in a grid in the sea.[4] Each cage was to have a circular ring of pvc pipe approximately 40 metres in diameter floating on the sea surface (acting as a float or buoy) and anchored to the sea floor. From each pvc ring was to be suspended a collection of net segments sewn together and closed at the bottom to form a parabolic shape (the primary nets). A series of trays (270 per cage) was to be placed inside and on the bottom of the primary nets and a covering net was to be sewn into place above each tray to form a pocket enclosing the tray. The cages were to be left in the sea for several months for each tray and the surrounding netting to accumulate macroalgae to act as a foodstuff for the abalone (conditioning). Abalone spat which had been grown in an onshore nursery for approximately eight months were then to be transferred into the trays at a rate of up to 220 per tray (up to 60,000 per cage). The spat were to be at least 17 millimetres across the widest part of the shell (size or length).[5] Runts (smaller less well performing abalone) were to be removed to ensure that only the better performing abalone grew out to maturity. The abalone were to be harvested and sold after three to three and a half years in the cages when they reached a size of approximately 120 millimetres and a weight of approximately 220 grams.
[4] Similar cages had been used for tuna farming for some decades but not for abalone farming.
[5] Abalone are curved but not round and “size” or “length” is used here to refer to the widest part of the shell.
The appellant was a solicitor who was admitted in 1995 in New South Wales. He was related by marriage to Ken Bascomb (Mr Bascomb), who had interests in wild abalone diving on the west coast of Eyre Peninsula and who was associated with James Boylan. The appellant was a long-term friend of John McCauley, who was an accountant in partnership with Peter Woodhead in Sydney. Mr Bascomb and the appellant had discussions with Mr Tressider about commercialisation of Mr Tressider’s system. In due course it was agreed that Messrs Bascomb, Boylan, McCauley and Woodhead and the appellant would form a company to commercialise Mr Tressider’s system.
In July 2004 ABAL was incorporated. Messrs Bascomb and Boylan’s company[6] and Messrs McCauley and Woodhead’s company[7] each held 50 per cent of the A class (voting) shares. Messrs Bascomb and Boylan’s company and Messrs McCauley and Woodhead’s company each held 45 per cent of the B class (non-voting) shares and the appellant’s company[8] held the remaining 10 per cent. Messrs Bascomb, Boylan, McCauley and Woodhead were the directors.
[6] Australian Bight Aquaculture Pty Ltd.
[7] Wearne Aquaculture Nominees Pty Ltd.
[8] Rebanah Holdings Pty Ltd.
Two wholly owned subsidiaries of ABAL were incorporated. Australian Bight Abalone Management Pty Ltd (ABM) was incorporated to operate as manager of the Projects and enter into individual management agreements with each Grower. Australian Bight Infrastructure Pty Ltd (ABI) was incorporated to acquire an aquaculture licence and marine leases, acquire the cages, acquire the right to use Mr Tressider’s system and enter into individual aquaculture & cage rental agreements with each grower. ABI entered into an agreement with Mr Tressider’s company under which Mr Tressider’s company granted to it a licence to use the intellectual property associated with Mr Tressider’s system. The trial was conducted on the basis that, except for specific purposes, it was not necessary to differentiate between the three Australian Bight companies. The appeal was conducted on this basis. I refer to the three companies collectively as Australian Bight Abalone or ABA, except where it is necessary to refer to a specific company.
In early February 2005 the appellant formally commenced as chief executive officer. He was based in Adelaide and later partly in Adelaide and partly in Port Lincoln.
Mr Tressider was engaged by Australian Bight Abalone to act as operations manager and to report to the appellant as chief executive officer. Rachel Lawrie was engaged to act as marine biologist and to report to the appellant as chief executive officer. Several divers were engaged (via labour hire or boat and labour hire companies) to establish and maintain the cages, place the spat on trays, monitor the health of the abalone, measure abalone, count dead abalone, provide supplementary feed if necessary and harvest abalone. One of the divers was Bill Bascomb, who was Ken Bascomb’s son.
On 10 April 2005 ABAL issued an Information Memorandum (the Information Memorandum) inviting investment by wholesale client investors in Interests in the 2005 Project. The Information Memorandum stated that each Interest entitled the Grower to 60 trays stocked with a total of 10,000 juvenile abalone (167 abalone per tray) on the basis that the grower was entitled to participate in two cycles of abalone production over seven years. All proceeds of all growers were to be pooled and divided per Interest except for any growers who elected at the outset not to participate in pooling. Each Interest cost $53,195 (inclusive of GST)[9] for the initial management fee plus annual fees of $2,495 plus harvest fees of $5,965 per cycle plus a reseeding fee for the second cycle of $9,305.[10] The Information Memorandum stated that offers to acquire Interests would close and allotments of Interests would be made by 15 June 2005.
[9] All dollar figures are inclusive of GST unless otherwise stated.
[10] All fees apart from the initial management fee were CPI adjusted.
The Information Memorandum contained a table showing projected cashflow based on specified assumptions and identified some of the risks that could impact those assumptions. The assumptions included:
1average stock size at commencement of the cycle of 15 millimetres;
2average growth rate of 2.5 millimetres per month (30 millimetres per year);
3mortality rates of seven per cent initially followed by six per cent in the first full year and five per cent in each of the second and third full years giving overall mortality of 21.1 per cent over the cycle;
4average harvest size of 115 to 120 millimetres and harvest weight of 220 grams;
5average export price of $43 per kilogram;
6gross sale proceeds of $74,736 from each of the first harvest in 2008/09 and the second harvest in 2011/12.
Between mid-April 2005 and mid-June 2005 ten grower cages were established to begin accumulating algae.
By mid June 2005 ABA had received applications from 24 investors for 50 Interests. Between 23 and 29 June it purchased 600,000 spat from SAM Abalone Pty Ltd and placed them in the grower cages at the rate of 60,000 per cage.
The abalone were not established in ideal conditions. Due to the 30 June establishment imperative, the cages had not been conditioned for the time intended under Mr Tressider’s system, potentially impacting the amount of algae present when the abalone were introduced. The abalone were on average smaller than intended under Mr Tressider’s system. Runts were not removed as intended under Mr Tressider’s system. Storms resulted in unfavourable weather and sea conditions when the cages were being conditioned, which resulted in damage to the trays.
In mid 2005 Mr Bascomb acquired Mr Boylan’s interest in the company that held shares in ABAL and Mr Boylan resigned as a director of ABAL.
In July 2005 ABA entered into a contract with Acqua Assist Pty Ltd, a company based in Hobart controlled by Robert Bronstein, for a licence to use and support for its program Ab Assist in return for payment of a licence and support fee of $2,000 (plus GST) per annum. Ab Assist was a database program that recorded data including size, growth and mortality rates.
ABA divers from time to time took sample measurements of abalone length from which estimates of average size per cage and average growth rates could be made. They also from time to time counted dead abalone shells from which estimates of mortality rates could be calculated (this assumed that no abalone died other than those whose shells were located and counted and none went missing). The shells were initially counted in situ but were latter also extracted by a vacuum system. Sizes and dead shells and other data relating to the abalone were recorded in log books and then entered into Ab Assist.
ABA also established three company cages for the purpose of growing juvenile abalone on its own account and supplying them to the next year’s Project as spat. Between 1 and 22 September 2005 ABA purchased 850,000 spat from SAM Abalone and they were placed in the company cages at a much higher rate per cage than in the grower cages.
The directors of the ABA companies held periodic board meetings, which were usually attended also by the appellant. From October 2005 until November 2006 Ms Lawrie produced a monthly biology report which reported amongst other things on average growth and mortality rates. In November 2006 Ms Lawrie resigned because she was pregnant and thereafter no biology reports were prepared or included in the board packs. From December 2005 until August 2007 Mr Tressider produced a monthly operations report, which amongst other things commented on growth and mortality rates.[11] From October 2007 Bill Bascomb (who succeeded Mr Tressider as operations manager) produced a monthly operations report. The biology and operations reports were sent to the appellant. The appellant produced a monthly chief executive officer’s report (CEO report) which amongst other things generally commented on growth rates and mortality rates. The CEO, biology and operations reports (for more than one month when more than one month had passed since the last board meeting) were included in the board packs for directors’ meetings.
[11] Reports were tendered for each month except October 2006, June and July 2007.
In the second half of 2005 ABA established a compliance committee (the compliance committee). Its members included Dr Winston Ponder, a biologist specialising in molluscs, and Mr Woodhead, who was also its secretary. Its role was to ensure compliance by ABA with various regulations. Its role included signing off on product disclosure statements before issue.
From early 2006 ABA produced periodic (initially bi-annually and later quarterly) Grower Reports. They reported amongst other things on average growth rates and mortality rates.
In January 2006 ABA issued the first Grower Report for the period to 31 December 2005. It stated that mortality rates were well below expectation (being less than five per cent actual compared to more than ten per cent projected).
In 2006 Kane Williams, a marine biologist, was engaged to produce an independent biologist report on the 2006 Project for a product disclosure statement for the project. He was later engaged to produce similar reports for the 2007 PDS (issued in February 2007) and the 2008 PDS (issued in January 2008). He also produced reports for the annual Growers Reports. He did not gather any data himself but was provided with data by ABA personnel. Before providing each report, he dived at the site and looked at one or two cages to which he was taken to undertake a qualitative assessment to gain an overview of the operation. He did not make any measurements or undertake a quantitative assessment.
On 10 May 2006 ABAL issued a Product Disclosure Statement (the 2006 PDS) inviting investment by the public in Interests in the 2006 Project. Each Interest entitled the Grower to 20 trays stocked with a total of 4,400 juvenile abalone on the basis that the Grower was entitled to participate in two cycles of abalone production over seven years. The cages were now to be 45 metres in diameter and to contain 540 trays (twice the number in the 2005 cages) each stocked with 220 juvenile abalone. The abalone were to be on average 28 millimetres in length, significantly larger than the abalone in the 2005 cages. The PDS did not project revenue but stated that the abalone export price for 2004/05 averaged $60.95 per kilogram and the independent biologist’s report assumed 15 per cent mortality and average harvest circumference of 115 millimetres.
In May 2006 Alex Dobrovolskis commenced working for Eyre Peninsula Dive Services (EPDS). EPDS had entered into a boat and labour hire agreement with ABA to supply diving services. Mr Dobrovolskis undertook diving work on behalf of EPDS for ABA. He had a Bachelor of Applied Science but did not hold any postgraduate qualifications.
In 2006 it was agreed between the shareholders that Mr Bascomb would inject additional capital into ABAL and would acquire five per cent of the A and B class shares in ABAL from Messrs McAuley and Woodhead’s company and an independent chairman would be appointed. Mr Bascomb acquired the additional shares such that he now owned 55 per cent of the A class shares and 50 per cent of the B class shares.
In about October 2006 ABA issued the second Grower Report being the annual report for the year ended 30 June 2006 (the second Grower Report). It stated that the mortality allowance was 15 per cent by 30 June 2006 and the actual loss was 8.9 per cent.
On 25 October 2006 Mr Woodhead sent an email to the appellant conveying various requests by the compliance committee made at its meeting on 13 October. They included a request for regular data and a request that the new biologist (the prospective successor of Ms Lawrie) prepare a standard data report for presentation to the board and compliance committee containing at least 12 months running cumulative totals.
On 30 November 2006 the appellant emailed to the directors the board papers for the board meeting on 6 December 2006. The biologist report contained in the board papers included the following sentence:
On average the stock throughout all cages have grown 2.5 mm this month.
Ms Lawrie gave evidence that when she prepared her biologist report and emailed it to the appellant the figure in the last sentence was “2 mm” and not “2.5 mm” and a version of her report showing “2 mm” was tendered at trial.
The prosecution case was that the appellant deliberately changed the figure of 2mm to 2.5mm to match the growth figure projected in the Information Memorandum. This was the subject of count 1 giving false information to directors of a corporation. The appellant in his evidence denied that he altered the report. He said that on occasions he had received Ms Lawrie’s biology report by email from Mr Tressider.
In November 2006 Ms Lawrie finished working for ABA.
On 6 December 2006 the board of ABAL authorised the chief executive officer to confirm the appointment of Sir Tipene O’Regan as a director and chairman of the board of directors of ABAL with effect on 1 January 2006 subject to receipt of formal information. Sir Tipene O’Regan was subsequently appointed a director with effect on 1 January 2007 and was appointed chairman at the next board meeting on 15 March 2007.
In the second half of 2006 Mr Tressider became concerned that the method of calculating mortality rates counted only abalone shells found and did not count missing abalone. Mr Tressider gave evidence, which the appellant indirectly denied, that he spoke to the appellant and said that he did not believe that they had the number of animals that the Ab Assist program was telling them because the data imported only represented the mortalities recovered, not lost abalone and the appellant discussed with him the possibility of using company stock to fill some of the gap.
In about December 2006 all data held in the Ab Assist program was lost. Ab Assist was not used after that time. No steps were taken to rectify the problem or ascertain whether there were backups of the Ab Assist data that could be restored. No alternative program was acquired.
In January 2007 Mr Tressider organised a dive to make a preliminary assessment of actual abalone numbers compared to the theoretical numbers derived by subtracting dead shells from starting stock in respect of the 2005 grower cages. He organised a dive on 4 January 2007 for this purpose. He subsequently reviewed the cage/dive reports prepared in respect of the dive. They included numbers of abalone counted on randomly selected trays. The numbers counted were much lower than indicated by the current mortality percentage. As a result, he directed the divers to undertake a much more comprehensive count of abalone present by counting abalone on all eight trays along transects at 90 degree angles across the diameters of each cage (32 trays per cage) (the stocktake dive).
On 8 and 9 January 2007 the stocktake dive was undertaken by the divers. Three divers gave evidence at trial about this dive. They recorded their results in cage/dive reports. Mr Tressider subsequently transcribed the results onto an Excel spreadsheet (the stocktake dive spreadsheet). He calculated the average number of abalone per tray and extrapolated the results to calculate total abalone per cage. His spreadsheet showed total abalone in the 10 grower cages of 168,651. This reflected a mortality rate vastly exceeding the rate hitherto calculated based on counting abalone shells and demonstrated that actual abalone numbers were vastly below predicted numbers. Mr Tressider created a document setting out explanations for the extremely high losses, potential steps to remedy the situation for the 2005 Project, numerous steps that had been taken to improve the system and identifying some further potential improvements (the stocktake dive word document).
Mr Tressider gave evidence that he telephoned the appellant and informed him of the results of the stocktake dive; he offered to email the stocktake dive spreadsheet to the appellant, the appellant asked him not to send it, but he sent it anyway because he felt that he needed to; and it was arranged that the appellant would come to Elliston to meet with him. Mr Tressider gave evidence that within a couple of days the appellant, in company with Ken Bascomb, met him at Elliston; each had a copy of the stocktake dive spreadsheet; he gave them a copy of the stocktake dive word document; one of them said “no-one can know”; the appellant instructed him to remove the stocktake dive spreadsheet from his system; and Mr Bascomb said that if things did not work out Mr Tressider probably would not make it home, which Mr Tressider took to be a serious threat. The appellant gave evidence denying the telephone conversation, denying that he received the spreadsheet and denying the meeting. Mr Bascomb was not called by either the prosecution or the defence to give evidence. The stocktake dive spreadsheet and word document were tendered at trial.
In February 2007 the compliance committee was withholding approval of the release to the public of the PDS for the 2007 Project because it had not received the data requested in October 2006 referred to at [30] above.
On 14 February 2007 the appellant sent an email to Messrs Woodhead and McAuley attaching amongst other things graphs showing actual versus target mortalities for the 2005 Project by cage (the February 2007 graphs). The graphs showed 462,890 actual abalone compared to a target of 417,300 (divided between the ten grower cages). This conduct was the subject of count 3 giving false information to directors of a corporation. The prosecution case was that the appellant knew that the graphs were false because he had been informed by Mr Tressider of the results of the stocktake dive including that there were now less than 200,000 abalone in the ten cages.
As a result of the receipt of the information sent with the email, on 16 February 2007 Mr Woodhead sent an email to the appellant saying that the compliance committee approved the issue to the public of the PDS for the 2007 Project.
In February 2007 ABAL issued a Product Disclosure Statement dated 7 February 2007 (the 2007 PDS) inviting investment by the public in Interests in the 2007 Project. The Interests were the same as the Interests the subject of the 2006 Project. The report by the independent biologist included the following sentence:
For the first 15 months of the ABAP 2005, stock mortality was in the vicinity of 8.9%6.
6.ABA 2005 project annual grower report
The footnote was a reference to the second Grower Report referred to at [29] above.
The appellant authorised the issue of the 2007 PDS. This conduct was the subject of count 2 disseminating false information likely to induce a person to acquire financial products. The prosecution case was that the appellant knew that this sentence was false because he had been informed by Mr Tressider of the results of the stocktake dive. Count 13 was similar in that it related to the 2008 PDS (issued in January 2008) which was alleged to contain a false statement understating mortality rates in similar fashion (mortality of 10.9 per cent after 18 months).
On 16 February 2007 Mr Woodhead sent an email to the appellant onforwarding an email from Professor Ponder requesting that specified graphical information concerning growth and mortality rates be provided to the compliance committee in future.
On 19 February 2007 Mr Tressider sent an email to Tom Hyde of SAM Abalone that included the following passages:
re larger animals for ABA : … ABA are keen to purchase large size abs 50 - 90 mm together with this years spat. how much stock do you have available that has a parent from Venus / Anxious bay area? what is the size range and what approximate numbers is there of each size range, 50-65 , 66- 75 , 76-90mm. I have advised AF the price will be per kg however we will need to calculate with some accuracy the number of animals purchased please advise
On 28 February 2007 Mr Hyde responded saying:
Stock with a parent from the West Coast....
04's 2.5yo- only 15% have a parent from the WC. We currently have around 500k abs averaging 75mm. By September we will only have around 200k averaging 85mm remaining. Grading and consolidation of this stock will make the traceability of the WC stock difficult.
On 12 March 2007 the appellant sent to the directors the board pack for the board meeting on 15 March 2007. In his CEO report, he said that the actual mortality rate for the 2005 Project was eight per cent (compared to forecast of 16.54 per cent). The board pack also included the February 2007 graphs referred to at [42] above (attached to Mr Tressider’s operations report). This conduct was the subject of count 4 giving false information to directors of a corporation. The prosecution case was that the appellant knew that this information was false because he had been informed by Mr Tressider of the results of the stocktake dive. The prosecution also alleged that the appellant’s report was false because it stated that he had discussed with and received a proposal from Steven Clarke of SARDI about developing a more appropriate testing method for growth and mortality and because it stated that Mr Dobrovolskis “continues to oversee the proper collection of data for reporting purposes. I have advised Alex that his role will be to liaise with SARDI (or another external biologist) to ensure the proper data collection protocols are adhered to”.
In his operations report for March 2007 Mr Tressider said:
Personnel requirements
We are short handed at present.
Rachel (biologist) has not been replaced…
Biologist replacement will be needed in the near future; we should be on the lookout for a suitable person. Necessary skills will be:
Diver
Algae re production experience
Animal husbandry experience
Administrative experience
Etc etc
On 4 April 2007 ABAL issued the third Grower Report for the six months ended 31 December 2006.[12] It included a statement that the mortality loss to 31 December 2006 was 10.9 per cent. The appellant authorised the issue of the report. This conduct was the subject of count 5 disseminating false information likely to induce a person to acquire financial products.
[12] The Growers Reports from then on were uploaded onto the ABA website.
On 10 April 2007 the appellant sent to the directors the board pack for the board meeting on 13 April 2007. In his CEO report, he said that Alex Dobrovolskis “continues to oversee the proper collection of data for reporting purposes however given the current work requirements Alex has been needed in diving operations for the last month”. This conduct was the subject of count 6 giving false information to directors of a corporation.
On 24 April 2007 SAM Abalone and ABM signed a contract for the sale of between 5,000 and 15,000 kilograms of 2004 abalone stock of average length of 60 to 80 centimetres at $28.50 (plus GST) per kilogram.
In his operations report for April/May 2007 Mr Tressider said:
Personnel requirements
…
From last report Biologist replacement is needed in the near future; we should be on the lookout for a suitable person. Necessary skills will be:
Diver
Algae re production experience
Animal husbandry experience
Administrative experience
Be able to prepare detailed reports
etc
On 1 June 2007 there was a meeting of the compliance committee. The minutes of the meeting record that ABA had still not developed a reportable management system to address the issue of data requested on 25 October 2006 and in February 2007. The minutes also record that ABA had not yet appointed a new biologist. On 18 June 2007 Mr Woodhead sent an email to the appellant amongst other things expressing concern that key operational data was not being provided on a monthly basis.
With effect on 1 July 2007 Professor Anthony Cheshire, a marine scientist, and the Honourable Nick Bolkus, a former federal government Minister, were appointed directors of ABAL. Mr Woodhead had resigned as a director on 18 June 2007.
Before 6 July 2007 the appellant sent to the directors the board pack for the board meeting on 6 July 2007. In a report entitled “Compliance Committee Matters”, he said “It ought to be noted that Dr Ponder's observation on page 2 [of the 1 June 2007 compliance committee minutes] ‘the company has not yet appointed a new biologist’ is incorrect. Since the time Rachael Lawrie left in 2006, Alex Dobrolowskis has been acting biologist for the group.” This conduct was the subject of count 7 giving false information to directors of a corporation.
On 31 July 2007 Mr Woodhead sent an email to the appellant expressing concern that the compliance committee had not received a response to requests conveyed in his email dated 18 June 2007.
On 21 August 2007 the appellant sent to the directors the board pack for the board meeting on 24 August 2007, saying that the operations report, among others, would follow shortly. The board pack included a copy of the fourth Grower Report for the year ended 30 June 2007 which stated that actual mortalities to 30 June 2007 were 13.8 per cent and referred to “the Company’s resident marine biologist” making comments which were included in four paragraphs of the report. This conduct was the subject of count 9 giving false information to directors of a corporation.
A version of Mr Tressider’s operations report for August 2007 was included in the final version of the board pack tabled at the meeting. That report did not include a section entitled “Harvest Outlook”. Mr Tressider gave evidence that the operations report he prepared, and which he emailed to the appellant on 21 August 2007, contained a section entitled Harvest Outlook. A version of his operations report containing a Harvest Outlook section was tendered by the prosecution. It included the following passages:
Harvest Outlook
While I am personally content with animal growth I understand that due to other sources of information there appears to be a opinion that significant quantities of abalone are (should be) at the desired market size…
First some important history. Before this business began I was asked
Q how long to grow an ab to market size?
A to grow an ab to traditional farm market size around 90mm takes around 36 months.
Qwhat is its weight
A10 to the kilogram (I did not state processed or whole obviously the weight is whole weight.)
What happened from here appears that someone calculated our growth performance based on the top 1-2% of animals.
The desired harvest size increased as did the weight.
I have no doubt the growth rate can be achieved over time breeding from our best performers and culling ruthlessly any animal not growing at our targeted growth rate. Ie 2. 8 mm per month
…
There are several animals between 100 – 105mm but not significant for a commercial harvest In ideal conditions abalone will gain 10% body weight per month. Preferably harvest will be reverted to the original plan of reaching the market place for the Olympics in July 2008. Giving the owner of the animals at least eight months significant weight gain.
The appellant’s conduct in sending the operations report to the directors was the subject of count 8 giving false information to directors of a corporation. The prosecution case was that the appellant deliberately deleted the Harvest Outlook section from the report he received from Mr Tressider. The appellant in his evidence denied that he altered the report.
On 24 August 2007 the board meeting took place. Professor Cheshire gave evidence that he referred to the summary data concerning abalone growth and mortality rates and requested provision of the detailed underlying data on which the summary data was based. He did not subsequently receive any such data.
On about 24 August 2007 ABAL issued the fourth Grower Report for the year ended 30 June 2007. It included a statement that the mortality loss to 30 June 2007 was 13.8 per cent. The appellant authorised the issue of the report. This conduct was the subject of count 10 disseminating false information likely to induce a person to acquire financial products.
On 6 September 2007 Mr Woodhead sent an email to the appellant saying amongst other things that the compliance committee’s view was that, if the appellant was not collecting information concerning algae and abalone growth rates, he was losing valuable information in the management of the company and would not be able to learn from the data.
On 14 September 2007 there was a meeting of the compliance committee, which Sir Tipene O’Regan attended by invitation. The minutes of the meeting record that Mr Woodhead outlined the history of the letter of 25 October 2006 and Dr Ponder noted that there were two major problems with the data: how it was collected, in that it was vague and there was no evidence of an appropriate methodology, and the presentation of the data.
In September/October 2007 SAM Abalone sold to ABM 15,928 kilograms of 2004 abalone (large abalone) at an average weight of approximately 120 grams per abalone (approximately 130,000 abalone) for $484,067 pursuant to the contract referred to at [54] above. No reference was made in the board packs or board minutes to the purchase of the large abalone at or before the purchases.
The appellant gave evidence that he authorised the purchase of the large abalone after obtaining approval from Mr Bascomb as the majority shareholder. He said that he was told that the large abalone were and were to remain company stock and were to be grown out in company cages with a view to developing the deep green appearance of sea grown abalone and commanding a higher price. Evidence was given by Sir Tipene O’Regan and Professor Cheshire that they were unaware of the purchase of the large abalone in 2007.
The prosecution case was that the appellant authorised the purchase of the large abalone to help make up the numbers of missing abalone in the 2005 Project because he was aware of the results of the stocktake dive and he deliberately did not disclose the purchase of the large abalone to the board. The appellant’s evidence was that the large abalone were purchased on the company account with a view to ascertaining whether it would develop the appearance of wild abalone and was never intended to become part of the 2005 Project.
Divers Clayton Dehle, Clint Kelly and Lee Stewart gave evidence of an occasion, or in Mr Dehle’s case two occasions, on which large abalone were tipped from the boat onto 2005 grower cages and the divers separated them and ensured they were not on their backs in the trays. Mr Kelly said that the large abalone were fed seaweed by its being thrown from the boat onto the cages and this would have suffocated some of them.
On 15 October 2007 the appellant sent to the directors the board pack for the board meeting on 19 October 2007. The board pack included a draft of the fifth Grower Report for the quarter ended 30 September 2007 which stated that actual mortalities to 30 September 2007 were 14.6 per cent and referred to “the Company’s resident biologist” making comments which were included in four paragraphs of the report. This conduct was the subject of count 11 giving false information to directors of a corporation.
On 19 October 2007 the board meeting took place. The minutes record that it was decided that Professor Cheshire would speak to the appellant concerning the detailed data he was seeking. He subsequently spoke to both Bill Bascomb and the appellant and they said that they would cooperate in providing the data. However, he did not in fact receive any detailed data.
On 7 November 2007 ABAL issued the fifth Growers Report for the quarter ended 30 September 2007 which stated that actual mortalities to 30 September 2007 were 14.6 per cent and referred to “the Company’s resident biologist” making comments which were included in four paragraphs of the report. The appellant authorised the issue of the report. This conduct was the subject of count 12 disseminating false information likely to induce a person to acquire financial products.
In November 2007 Karen Horsell (who later married and became Karen Quinn) commenced working for ABA in the Elliston office as office manager. She looked for abalone data in the office but could not find any. She was told by Mr Tressider about the Ab Assist program.
On 3 January 2008 Ms Horsell telephoned Mr Bronstein enquiring about reinstating use of Ab Assist. He told her that he had a backup version of ABA’s data up to 12 February 2007 which could be uploaded back into ABA’s computer. He sent to her an email offering to upgrade the software to the current version and write an interface code to load spreadsheet data free of charge provided that he was paid the outstanding support fee of $2,000 (plus GST) that had been due in July 2007. He offered to provide two days’ training to Ms Horsell in the operation of the Ab Assist program for a reduced rate of $1,000 (plus GST).
On 3 January 2008 Ms Horsell sent an email to the appellant attaching her email correspondence with Mr Bronstein and saying that she wanted to get a start on the data entry. She sent a follow up email on 7 January 2008 but did not receive a response. The appellant gave evidence that he decided not to proceed with reinstating the Ab Assist program because he did not have confidence in Ab Assist and he felt that Mr Bronstein was not being fair in seeking payment and he made a decision influenced by emotion.
On 21 January 2008 Mr Woodhead sent an email to the appellant requesting various information including what had been done as to the collection of data, how data was collected, methodology of the data collection and whether data was now presented in a graphical format. The appellant sent a detailed response to the email in which he said amongst other things that Professor Cheshire was reviewing all of the data collection methodology and that at present data was collected daily and logged on to the database system.
On 31 January 2008 the appellant issued a media release stating that ABA would on that day begin its first harvest of abalone to meet demand ahead of the Chinese New Year and August Beijing Olympic Games. The February operations report said that the harvest that began on 31 January was a trial harvest and problems were encountered.
In February 2008 the appellant issued a media release dated 12 February 2008 which included the statement “Mr Ferguson said the targeted returns for investors were around 16%, but early indications were that this level would be exceeded.” This conduct was the subject of count 14 disseminating false information likely to induce a person to acquire financial products. The prosecution case was that the appellant knew that this statement was false because he had been informed by Mr Tressider of the results of the stocktake dive.
On 12 February 2008 ABAL issued the sixth Growers Report for the quarter ended 31 December 2007 which stated that actual mortalities to 31 December 2007 were 15.3 per cent and referred to “the Company’s resident biologist” making comments which were included in four paragraphs of the report. The appellant authorised the issue of the report. This conduct was the subject of count 15 disseminating false information likely to induce a person to acquire financial products.
In February 2008 Professor Cheshire travelled to Elliston. One of his purposes was to look at the records but he could not find any records containing any detailed data concerning matters such as growth rates and mortality rates.
On 28 February 2008 Dennett Whiteman, who was national sales manager, sent an email to Sam Wigg and the appellant saying that it was imperative that information on the progress of the harvest be released to financial planners.
Before 3 April 2008 the appellant sent to the directors the board pack for the 3 April 2008 board meeting. In his CEO report, he said that negotiations with a North American company for the supply of abalone to San Francisco were well advanced, having commenced after Mr Bascomb’s visit to the United States in early 2007. An agreement had been negotiated for the sale of medium-sized abalone (200 to 300 grams) for the equivalent of A$51.41 and for premium grade abalone (400 to 500 grams) for the equivalent of A$76.04. He recommended that ABA offer to each grower in the 2005 project to purchase their abalone for the current Hong Kong/China market price plus a premium of 5 per cent (approximately $48 per kilogram), transfer the stock to company farms to grow out for a further 18 to 24 months and pay out all growers in late June/early July 2008.
On 3 April 2008 the board meeting took place. There was considerable discussion about the Golden Gate proposal. The minutes record that the board agreed with the appellant’s recommendation that he sign a heads of agreement and present a contract for board consideration at the next board meeting. The board also agreed to engage Professor Cheshire to develop a database system to record information concerning the growth and performance of the abalone as well as ownership of abalone in different trays and cages. Professor Cheshire subsequently developed that system but the only data he received from management was data relating to ownership of the abalone and did not receive any data relating to growth or performance.
On 10 April 2008 Golden Gate Abalone LLC (Golden Gate) executed two agreements. One was a Heads of Agreement Abalone Supply Agreement between ABAL and Golden Gate which provided for ABAL to supply to Golden Gate 400 to 500 gram abalone totalling 100 to 300 tonnes per annum during the calendar years 2010 to 2013 inclusive for US$75 per kilogram and 150 to 250 gram abalone totalling 50 to 100 tonnes per annum during the calendar years 2009 and 2010 and 100 to 200 tonnes per annum during the calendar years 2011 to 2013 inclusive for US$48.80 per kilogram. The parties agreed to cooperate to negotiate and sign a formal agreement as soon as reasonably practical. This heads of agreement was drafted by the appellant and signed by Golden Gate and also by the appellant on behalf of ABAL.
The second agreement was a Term Sheet between ABAL and Golden Gate which provided for the parties to jointly promote the sale of abalone in North America in a manner to be agreed in writing for 18 months commencing from 1 June 2008. It was agreed that in consideration of Golden Gate’s promotion, ABAL would pay US$20,000 on signing a formal contract and US$5,000 each month thereafter for 18 months (a total of US$110,000). It was agreed that both parties would cooperate to negotiate and sign a formal agreement as soon as possible. This term sheet was signed by Golden Gate but not apparently by ABA.
On 30 April 2008 Mr Woodhead on behalf of the compliance committee wrote to Sir Tipene O’Regan suggesting that the board, which was now independent, take over the functions hitherto performed by the compliance committee or alternatively provide its full support and assistance in ensuring that management provided timely, appropriate and complete information. Mr Woodhead said that the committee had been requesting information for two years from management on comparison of PDS assumptions to actuals.
Before 22 May 2008 the appellant sent to the directors the board pack for the 22 May 2008 board meeting. In his CEO report, he said that a contract with Golden Gate was included in the contract register section of the board pack for review by the board. This was an Abalone Supply Agreement drafted by Finlaysons on behalf of ABAL. The contract was in terms consistent with the heads of agreement. For example Golden Gate was obliged to order at least 100 tonnes and could not order more than 300 tonnes of 400 to 500 gram abalone during each calendar year from 2010 to 2013. However clause 5.8 provided that, if ABAL was unable to supply abalone having exercised its best endeavours to do so, it would not be in breach of any of its obligations pursuant to the agreement.
On 22 May 2008 the board meeting took place. The minutes record that the board authorised entry into the Abalone Supply Agreement.
On 27 May 2008 Professor Cheshire sent an email to Bill Bascomb, copied to the appellant, requesting all raw data collected by the divers or measured in the laboratory relating to growth rates, mortality rates, etc. He said that he was not interested in processed data but only the raw data. He did not receive any data in response to his request. He gave evidence that he discussed his request with the appellant but the only explanation he received was that the computer had fallen over.
In June 2008 Elise Wilson commenced employment by ABA as a marine biologist and trainee diver.
On 26 June 2008 there was another board meeting. The minutes record that Mr McCauley raised concern that no harvest of 2005 stock had been completed or return been distributed to the growers. The appellant said that a complete harvest would jeopardise supplying to the United States under the Golden Gate contract and would not be in the best interest of the growers. Sir Tipene O’Regan requested an estimate of harvest amounts achievable and a strategy to move forward.
The Golden Gate dealings were not mentioned against in the CEO reports, board packs or board minutes. No letter was sent to growers in the 2005 Project offering to purchase their abalone as had been recommended in the CEO report referred to at [83] above.
On about 16 July 2008 ABAL issued the sixth Growers Report for the quarter ended 31 March 2008 which contained a graph showing actual mortalities to 31 March 2008 at about 15 per cent. The appellant authorised the issue of the report. This conduct was the subject of count 16 disseminating false information likely to induce a person to acquire financial products. The appellant in his CEO report in the Grower Report referred to a contract for the sale of up to 1,800 tonnes of abalone over six years and referred to a harvest. The Grower Report said full details on growth rates, harvest weights and mortalities would be provided post harvest.
On 6 August 2008 Mr McCauley sent an email to the appellant saying that the financial advisors were trying to find out what was happening with the harvest, given that there had been a public announcement of harvesting in January and statements that the company was harvesting now. He said that he wanted to know each week what had been harvested in terms of weights, numbers and sizes.
In September or October 2008 Professor Cheshire met with Mr McCauley and Mr Woodhead in Sydney. By this time Professor Cheshire suspected that either there was no primary data to support the growth and mortality information being provided to growers or that primary data did not support that information and he discussed those suspicions with Mr McCauley and Mr Woodhead and separately with Sir Tipene O’Regan.
On 15 October 2008 Mr McCauley sent an email to the directors, copied to the appellant, requesting that certain paragraphs be added to the minutes of the June board meeting recording that Mr McCauley had requested stock data and expressed his concern that no data of any sort had been provided to the board in a very long time and that he would oppose the issue of any further financial products until the appellant had provided the board with harvest and stock data.
On 15 October 2008 the board meeting took place. The minutes record that the appellant recommended that an interim distribution be made to growers in the 2005 Project, which recommendation the board accepted. The board engaged Professor Cheshire to supervise a separate assessment of the 2005 stock and to analyse and interpret the data obtained to provide advice to the board on how many animals were there, what condition they were in and what sort of growth rates and morality they had experienced.
In October 2008 an interim distribution of $500,000 was made to growers in the 2005 Project. This was not made out of harvest proceeds but out of company monies.
On 28 October 2008 John Alford, national distribution manager, sent an email to the appellant saying that they had received virtually no information regarding harvests or returns to pass on to the public since June 30 and Bill Bascomb's standard answer to any question regarding stock or harvesting was "Ask Andrew".
On 24 November 2008 ABAL issued the seventh Growers Report for the year ended 30 June 2008 which stated that ABA reported a total stock mortality of 17 per cent to June 2008 and elaborated on the method of estimating mortalities. The appellant authorised the issue of the report. This conduct was the subject of count 17 disseminating false information likely to induce a person to acquire financial products.
On 3 or 4 December 2008 Professor Cheshire sent a confidential report to the other members of the board. He said that in early November 2008 staff at Elliston had undertaken random counts of abalone numbers in the 2005 Project and measured the length of samples of the abalone in the cages. This data had been analysed and demonstrated that mortality rates were substantially higher than predicted and growth rates were substantially lower than predicted.
On 15 December 2008 a board meeting took place. There was considerable discussion about Professor Cheshire’s report. There were some mixed views expressed. Data was produced showing the results of what was described as the “trial harvest” of 2005 stock. It appears that this was stock from company cages rather than grower cages.
Within three days of the meeting, Professor Cheshire and Mr McCauley resigned as directors.
On 24 December 2008 Professor Cheshire sent an email to Sir Tipene O’Regan formally presenting his reasons for his decision to resign. He identified as his fourth concern that the appellant had authorised expenditure of more than $1 million buying additional abalone presumably from SAM Abalone, which was never approved by the board, no explanation had been provided for ABA to acquire large abalone, and as chair of the Research and Development Committee he had no plans to do any research and development on these animals.
On 12 January 2009 the appellant responded point by point to the matters raised by Professor Cheshire in his letter to Sir Tipene O’Regan. In relation to the fourth concern identified by Professor Cheshire, he said that ABA’s contracts did not stipulate an upper limit to spat, ABA had a standing order with SAM Abalone to purchase any stock satisfying the requirements of the Livestock Act, there was no fixed budget allocation for stock purchases and the purchases were made before the Research and Development Committee was formed.
On 1 July 2009 ABAL was placed in voluntary administration.
In September 2009 the administrators reported to growers that the abalone in the 2005 Project grower cages had been harvested and 33,109 abalone were harvested with only abalone less than 70 millimetres in size remaining in the cages (there being about 10 tonnes of such abalone in the 2005, 2006 and 2007 project cages combined).
The trial
Leaving aside counts 1 and 6 to 8, the central plank of the prosecution case was that the appellant from February 2007 knowingly understated mortality rates to the directors and the growers (or overstated prospective returns to growers) because he knew from Mr Tressider the results of the stocktake dive.[13] The prosecution case in this regard was reliant on Mr Tressider’s evidence and the jury ultimately being satisfied beyond reasonable doubt that Mr Tressider’s evidence of his communications with or in the presence of the appellant about the stocktake dive should be accepted and the evidence of the appellant to the contrary should be rejected. In this respect the prosecution relied on certain items of circumstantial evidence the subject of the Judge’s impugned directions to support Mr Tressider’s evidence that the appellant knew of the results of the stocktake dive.
[13] Counts 2-5 and 9-17.
There was no real dispute at trial about the physical elements of the section 1309 and 1041E offences in this respect: the real dispute was the mental element that the appellant knew that the information in question was false. Although section 1041E contains an alternative mental element that the defendant ought reasonably to have known that the relevant statement was false (which the prosecution did not eschew), the prosecution case was that the appellant knew that the relevant statements were false and the prosecution did not articulate or advance a case in opening or closing address that the appellant merely ought to have known that they were false.
There were several counts in which the prosecution alleged particulars of false conduct in addition to understating mortalities/overstating prospective returns. Those additional particulars related to three matters. First, statements about or attributed to an internal ABA biologist after Ms Lawrie departed and before Ms Wilson commenced and/or about the role being performed by Mr Dobrovolskis.[14] Secondly, a statement in his CEO report for February 2007 that the appellant had discussed with and received a proposal from Mr Clarke of SARDI about developing a more appropriate testing method for growth and mortality.[15] Thirdly, statements in November 2007 that harvest expectations were high and the first major harvest was expected to commence in January 2008.[16]
[14] Counts 4, 6, 7, 9-12 and 15.
[15] Count 4.
[16] Counts 11 and 12.
The prosecution proceeded on the basis that any count containing multiple particulars of falsity was proved if the prosecution proved any one of the particulars. The Judge directed the jury to this effect (and there is no challenge to this direction on appeal). It is clear that the jury was satisfied beyond reasonable doubt in respect of the mortality understatement particular in respect of those counts that contained multiple particulars because the jury found the appellant guilty of counts 2, 3, 5, 13, 14, 16 and 17 where there were no alternative particulars.
In respect of those counts containing multiple particulars referred to at [112] above, the prosecution case was that the appellant’s motive in making the false statements about an internal biologist, Mr Dobrovolskis, Mr Clarke and harvesting status was to conceal the true position in relation to mortalities. In this respect, the prosecution in relation to the alternative particulars was dependent on the prosecution case of knowing understatement of mortalities.
For the above reasons, leaving aside counts 1 and 6 to 8, the focus of the prosecution’s address to the jury and even more so the focus of the defence address to the jury was very much on the issue whether the prosecution had proved beyond reasonable doubt that the appellant knew from his communications with Mr Tressider of the stocktake dive results.
The prosecution was conducted by the Commonwealth Director of Public Prosecutions. The prosecution called each of the persons referred to in the Background section above, with the exception of Ken and Bill Bascomb and Mr Boylan, together with various other witnesses.
Mr Tressider gave evidence amongst other things about his system, the stocktake dive and his communications with Mr Bascomb and the appellant thereafter. He also gave evidence in relation to his operations report the subject of count 8 and Ms Lawrie’s Biology report the subject of count 1.
Messrs O’Regan and Cheshire gave evidence amongst other things about board packs, board meetings and communications with or in the presence of the appellant and their lack of contemporaneous knowledge about the large abalone purchases.
Messrs Woodhead, Ponder and Cheshire gave evidence amongst other things about their requests made or copied to the appellant for data concerning abalone size and mortality and their inability to obtain such data.
Messrs McAuley Alford, Barnes and Richard Bund (an external accountant for ABA) gave evidence amongst other things about requests made or copied to the appellant for information concerning harvesting said to be undertaken by ABA and their inability to obtain such information.
Messrs Dehle, Kelly and Stewart gave evidence amongst other things about the stocktake dive, the insertion of the large abalone and harvest.
Mr Hyde gave evidence amongst other things about his dealings with the appellant, Mr Tressider and Bill Bascomb in relation to spat and large abalone.
Ms Lawrie gave evidence amongst other things about her dealings with the appellant and her biology report the subject of count 1.
Mr Dobrovolskis gave evidence that he was not employed by ABA as a marine biologist and did not perform the functions of a marine biologist.
Mr Clarke gave evidence about his communications with the appellant and in particular whether he discussed or made a proposal to develop a testing method for ABA.
The appellant gave evidence in his own defence. He denied any communications with Mr Tressider concerning or knowledge of the stocktake dive. He explained his purposes in the purchase of the large abalone and entry into the Golden Gate agreement and denied that they were to cover up a loss of abalone disclosed by the stocktake dive. He had no knowledge or expertise in relation to abalone and left all technical and most operational matters to Mr Tressider and Bill Bascomb and the diving staff working under their supervision.
The evidence proceeded over 28 sitting days. After deliberating for five and a half hours, the jury returned unanimous verdicts of guilty on each count.
The structure of the summing up
The Judge gave the usual directions about the jury’s approach, directed the jury about the elements of each offence and observed that, while it was a matter for the jury and not the Judge, there appeared to be no real dispute about any of the elements other than the element of knowledge. No complaint is made about the summing up in these respects.
The Judge then summarised the evidence in relation to each of the 17 counts sequentially, reminding the jury of the central evidence in relation to each count. This included of course the critical evidence by Mr Tressider about the sequelae to the stocktake dive and the opposing evidence by the appellant. The Judge had earlier observed that the prosecution case turned very much upon the evidence of Mr Tressider. No complaint is made about the summing up in these respects and in particular no complaint is made about the Judge’s summaries of the prosecution and defence cases in relation to issues other than the central issue about the appellant’s knowledge of the stocktake dive.
The Judge then summarised the prosecution case on the central issue as to the appellant’s knowledge of the stocktake dive. This comprised a summary of Mr Tressider’s evidence, of which no complaint is made, and a summary of the circumstantial evidence on which the prosecution relied in support of Mr Tressider’s evidence, which is the subject of the complaint comprising the ground of appeal.
The Judge then summarised the defence case on the central issue as to the appellant’s knowledge of the stocktake dive. This comprised a summary of the appellant’s evidence on the central issue, of which no complaint is made, and a summary of the circumstantial evidence on which the defence relied in support of the appellant’s evidence, which is the subject of the complaint comprising the ground of appeal.
The contentions on appeal
The appellant contends that the Judge’s summary of the prosecution case on the critical issue whether the appellant knew of the level of mortalities was unbalanced.
First the appellant contends that, when the Judge addressed five topics of circumstantial evidence said by the prosecution to support its case in reliance on the evidence of Mr Tressider, the Judge only set out the use of the evidence as proposed by the prosecution and no mention was made of the defence evidence or what defence counsel submitted in closing on each topic.
The Director contends in response that the Judge did address the defence evidence and what defence counsel submitted in closing on each topic in subsequent passages of his summing up when summarising the defence case. The appellant contends in reply that, insofar as the Judge addressed a topic later in the summing up, it was not sufficient to redress the imbalance because it was not referenced back to the topics referred to earlier when summarising the prosecution case.
Secondly the appellant contends that there were other topics (beyond those relating to the five topics relied on by the prosecution) that supported the defence case to which the Judge failed to refer. The Director contends in response that the Judge either did address these matters or there was no need in the circumstances to do so.
Thirdly the appellant contends that, when summarising the prosecution’s reliance on circumstantial evidence, the Judge on occasions referred to them as facts rather than evidence. The Director contends in response that it was evident to the jury that the Judge was only summarising the prosecution case and not purporting to make his own findings of fact which was clearly the province of the jury.
The appellant does not complain about the Judge’s summing up insofar as the Judge addressed count 1 or count 8 nor insofar as the Judge addressed the particular of count 4 involving Mr Clarke nor the particulars of counts 11 and 12 relating to harvest expectations. On the other hand, if the convictions on the counts in respect of which the prosecution alleged that the appellant knowingly understated mortalities/overstated prospective returns are vitiated by an unbalanced summing up, the Director does not contend that the remaining counts would not be affected consequentially. Accordingly it is not necessary to consider the Judge’s summing up in relation to count 1, count 8, the particular of count 4 involving Mr Clarke or the particulars of counts 11 and 12 relating to harvest expectations.
There is no issue of principle that arises on the appeal. It is common ground that, if the summing up was imbalanced so as to give rise to a miscarriage of justice, subject only to the proviso the verdicts are vitiated and the convictions should be set aside. Indeed, neither the appellant nor the Director cited any authorities or addressed the principle that a summing up should be balanced.
Ultimately the assessment whether the summing up was imbalanced and gave rise to a miscarriage of justice is a holistic assessment. However, it is necessary to consider each of the appellant’s contentions in turn.
Circumstantial evidence supporting the prosecution case
As observed above, the Judge summarised the respective evidence given by Mr Tressider and the appellant concerning communications, or lack of communications, about the stocktake dive. The Judge referred, correctly, to this evidence as direct evidence. No complaint is made about the Judge’s summing up in this respect.
The Judge said that, in addition to this direct evidence, the prosecution relied on indirect or circumstantial evidence in support of Mr Tressider’s evidence. The Judge explained that, in approaching circumstantial evidence, it was necessary for the jury first to decide which facts it accepted as established by the evidence and secondly to consider what inferences it was prepared to draw from those facts. No complaint is made about the Judge’s summing up in this respect or about the Judge’s directions in general relating to circumstantial evidence.
The Judge said that he was then going to go through the facts or circumstances upon which the prosecution relied.
The appellant contends that, in relation to five topics of circumstantial evidence relied on by the prosecution and addressed by the Judge, the Judge only set out the use of the evidence as proposed by the prosecution and no mention was made of the defence evidence or what defence counsel submitted in closing on each topic.
The existence and results of the stocktake dive
The Judge identified the first circumstance as follows:
The prosecution relies upon the fact of the 2007 stocktake: the fact that there was a stocktake dive conducted on 8 and 9 January 2007, and it relies upon the spreadsheet produced by Tressider as a result of the dive.
The appellant contends that the stocktake dive was one thing but the critical issue was the appellant’s knowledge of it; the appellant denied knowledge of the stocktake dive and spreadsheet; and the Judge should have reminded the jury about the appellant’s evidence on that topic.
There is no merit in this contention. First, in the passage extracted above, the Judge was not addressing the appellant’s knowledge of the stocktake dive or spreadsheet: the Judge was merely addressing their existence. The prosecution relied on the evidence of the divers about the stocktake dive and the tender of the spreadsheet to corroborate Mr Tressider’s evidence about their existence. While this supported Mr Tressider’s evidence as far as it went, it did not of course prove that Mr Tressider communicated with the appellant about it.
Secondly, in context, there was no possibility that the jury did not understand that the question whether Mr Tressider communicated with the appellant about the stocktake dive and the spreadsheet was a critical issue, and indeed the central issue, in the trial. The passage of the summing up addressing circumstantial evidence was preceded by the Judge having identified for the jury what appeared to be the real issue in the case in the following terms:
it seems to me – although it is a matter for you, not for me – it seems to me that the real issue for you is this: with respect to each of the 17 counts has the prosecution satisfied you beyond reasonable doubt that the accused knew that the information that he provided to the board, or disseminated in the public domain was false and misleading in a material particular? It seems to me that that is the issue which you must decide though I say, again, it is for you not for me.
The impugned passages were also preceded by the Judge summarising Mr Tressider’s evidence about the stocktake dive, the spreadsheet and his communications with Mr Bascomb and the appellant and preceded and succeeded by the Judge summarising the appellant’s evidence denying any such communications (and saying that the first he learned about the extreme level of mortalities was when he received Professor Cheshire’s report in December 2008). The Judge also summarised at length defence arguments as to why it was inherently unlikely that the appellant knew of a high level of mortalities.
The purchase of the large abalone
The second circumstance relied on by the prosecution identified by the Judge related to the purchase of the large abalone and was in the following terms:
Next, the prosecution relies on the fact that there was a purchase of large abalone in 2007 from SAM Abalone. The board was not advised of the fact of that purchase until after the abalone had been purchased and put in the cages at Elliston.
The large abalone were mixed with 2005 project stock. The way the stock was placed in the cages indicated urgency and secrecy. SAM Abalone was falsely told, at Ferguson’s direction, that some of the stock was going to Tumby Bay when in fact it was going to Elliston, on the Crown case.
The timing of the decision to purchase the large abalone was as early as 15 February 2007, that is very soon after the January stocktake.
Cheshire was not advised of the purchase and was not aware of any research and development project involving large stock even though he was the head of the research and development committee.
Cheshire’s letter to Sir Tipene indicated that he was unaware of the purchase of the stock.
The prosecution also relies on Dehle’s evidence that the harvest of the abalone in 2008 included a mix of 2005 stock and the large abalone purchased from SAM Abalone and the evidence that a substantial amount of the large abalone purchased died.
The appellant’s first contention is that the defence evidence was that the board was informed of the purchase of the large abalone and that this was a collective decision and this evidence should have been mentioned by the Judge.
However, the appellant did not give evidence that the board was informed of the purchase of the large abalone before or at the time of the purchase. On the contrary, his evidence was that he obtained authorisation for the purchase from Ken Bascomb, not the board. He gave the following evidence in chief:
Q.Was that something that was raised with the board.
A.I sought permission from Ken Bascomb.
Q.Why did you do that.
A.Ken owned 51% of the company and whilst we had I won't call it a blank chequebook, but an open - an understanding that we would get as much stock as we possibly could, it still would have been out of the ordinary for me to make that purchase without some authorisation.
Messrs O’Regan and Cheshire had earlier, during the prosecution case, given evidence that they were unaware of the purchase in 2007 and their evidence in this respect had not been challenged in cross-examination.
In cross-examination, when asked who was involved in making the decision to purchase the large abalone, the appellant reiterated that “Ken Bascomb was involved.” He added “I know there were discussions extra to the board meetings with Sir Tipene” but did not suggest that he was a party to any such discussions with Sir Tipene O’Regan. Sir Tipene O’Regan had given evidence that he was unaware of the purchase when it was made and this was not challenged in cross-examination. In his closing address to the jury, defence counsel did not suggest that Sir Tipene O’Regan knew of the purchase at the time or that any other director (apart from Mr Bascomb) did so. In these circumstances, the appellant’s contention on appeal that he gave evidence that the board was informed of the purchase of the large abalone and that this was a collective decision is unsustainable.
The Judge summarised the appellant’s evidence in the following terms:
With respect to the purchase of the large abalone, Bill Bascomb and Darren Tressider told Mr Ferguson that there was a large supply of abalone stock available from SAM Abalone. Accordingly, the accused said that he sought permission from Ken Bascomb to buy large abalone because he wanted to see if the company could grow large abalone out over a short period and change the colour of the abalone. You will remember the evidence that the preferred abalone for Chinese consumers is the greenlip abalone. In short, the accused’s evidence on this topic – that is, the purchase of the large abalone – was that the purchase was to develop the large abalone essentially by what we call feed lotting.
This was a fair summary of the appellant’s evidence and of the defence case in relation to the purchase of the large abalone.
The appellant’s second contention relates to the Judge’s reference to the large abalone being mixed with 2005 project stock. The appellant contends that he explained in evidence why the additional company stock was purchased and contends that the Judge should have drawn that evidence to the jury’s attention. However the Judge did so in the passage extracted at [153] above.
The appellant’s third contention relates to the Judge’s reference to the way the stock was placed into the cages. The appellant contends that he denied in evidence knowing that the large abalone was mixed with 2005 grower stock and the Judge should have drawn that evidence to the jury’s attention. It is true that the Judge did not refer to this evidence of the appellant. However, this matter was relatively insignificant for the following reasons. First the prosecution did not suggest, and the Judge in the passage extracted above (or elsewhere) did not say that the prosecution suggested, that there was any evidence that the appellant knew that the large abalone was mixed. Secondly the reliance by the prosecution on the large abalone transaction as relevant to the appellant’s knowledge of high mortality rates was on the fact and timing of the purchase (of which it was proved he was aware and directed) and the suggested purpose of it being used to help make up the missing numbers: for this purpose it did not matter whether the large abalone were kept separate until harvest or integrated with the grower stock upon introduction into the sea. Thirdly, reflecting no doubt these two matters, defence counsel in his closing address made no reference to the matter of mixing in cages or to the appellant’s evidence as to his knowledge in this regard. Of course, the mere fact that defence counsel does not refer to a particular matter does not necessarily entail that the Judge should not refer to it. However, it does give some indication of the matters that are important to the defence case. In addition, in general (although not applying in respect of this particular contention), a Judge needs to exercise caution before referring to matters to which defence counsel did not refer because this may have an adverse effect on the interests of the defence.
The appellant also contends that the way the stock was placed into the cages went both ways: the appellant was not present when it happened, whereas Mr Tressider was close by in Elliston and the divers acted at the direction of Mr Tressider and Bill Bascomb and, even if the appellant knew of the manner in which it was added, there was no evidence that he had the experience to know this was detrimental. It is not clear what it is that the appellant contends the Judge should have said to the jury in this respect. The appellant does not point to any specific evidence he gave of which the Judge should have reminded the jury nor to any submission by defence counsel which should have formed the basis of something that should have been put by the Judge to the jury. In fact, defence counsel in his closing address made no reference to the manner in which the large abalone were introduced into the cages or to the appellant’s evidence as to his knowledge in this regard. Again this matter was relatively insignificant for the same reasons as in respect of the appellant’s contention addressed in the previous paragraph.
The appellant’s fourth contention relates to the Judge’s reference to the timing of the decision to purchase the large abalone as being soon after the January stocktake. The appellant contends that the Judge should have added that the defence case was that the decision was at least flagged as early as July 2006 in that month’s operations report.
In the July 2006 operations report, Mr Tressider had said:
Beyond 2006 project cages
I have had several conversations [with] Andrew regarding stocking density for the new cages and have considered the infrastructure efficiency gained by higher stocking levels
…
If the cage is stocked at 200,000 each size class
M2
Animals/full cage
weight
M2
90mm animal
.007
140,000
19600 kg
980
50mm animal
.002
170,000
5950 kg
340
25mm animal
.0005
200,000
1400 kg
100
Keeping in mind abalone weight is 30% of its total in water and net weight inclusive of fouling will be 4 tonne in water.
I have not grown abalone in such high density but see no issue that cannot be over come regarding the structure or cage hygiene.
Mr Tressider had separately addressed the 2005 and 2006 projects immediately before this heading. On its face, Mr Tressider was merely calculating the square metres required by abalone at different sizes as they grew to ascertain whether the larger cages (used from 2006 onwards) could be stocked at a higher level of 200,000 abalone per cage. It is significant that Mr Tressider was not cross-examined concerning this report or concerning any contemplation in 2006 of purchasing large abalone (to ascertain whether it could be grown out to resemble wild abalone or for any other purpose). The appellant did not give evidence that this was in contemplation in 2006.
In any event, the Judge did remind the jury of the submission by defence counsel concerning the July 2006 operations report. The Judge said:
Mr Boucaut… referred to what the Crown says was the sinister and secret purchase of large abalone after the 2007 stocktake. But, says Mr Boucaut, the possible purchase of abalone as large as 90 mm had been discussed in one of Mr Tressider’s reports as early as July 2006, well before the January 2007 stocktake dive.
The appellant also contends that Mr Tressider had given evidence that there was some discussion before the stocktake dive about moving stock from the company cages to fill some of the gap and the Judge should have drawn the jury’s attention to this evidence.
The appellant’s reference to Mr Tressider’s evidence is to his evidence summarised at [36] above that in the second half of 2006 he told the appellant that he did not believe that they had the number of animals that the Ab Assist program was telling them because the data imported only represented the mortalities recovered, not lost abalone,e and the appellant raised with him the possibility of using company stock to fill some of the gap.
Mr Tressider’s evidence in this respect did not assist the appellant’s case in relation to the purchase of the large abalone because there was no suggestion of the purchase of large abalone during that discussion in 2006 and further the discussion at that point was about a theoretical position. Indeed, Mr Tressider’s evidence tended to support his later evidence about the stocktake dive to the extent that it suggested that the appellant was already aware of the possibility that mortalities were understated and had contemplated using other stock to replace the missing animals (which was the prosecution case in respect of the purchase of the large abalone). In addition, the appellant himself did not give evidence of the discussion with Mr Tressider. No doubt for these reasons defence counsel made no reference during his closing address to Mr Tressider’s evidence in this respect.
The appellant’s fifth contention relates to the Judge’s reference to Mr Dehle’s evidence that a substantial amount of the large abalone died. The appellant refers to the prosecution opening during which it was said that evidence would be given that the divers were told that the large abalone belonged to the Bascomb family which was not the case. The appellant points to the evidence given by Mr Dehle that he was told by Mr Tressider and Bill Bascomb (not the appellant) that BJ Diving (a company owned by the Bascombs) was the owner of the large abalone. The appellant implicitly contends that the Judge should have reminded the jury of this evidence. However, the Judge did not refer in his summing up to the question of what the divers were told about the ownership of the large abalone and the prosecution in closing address had not referred to this matter. Nor was any reference made by defence counsel in his closing address to this matter.
The appellant also refers to Mr Dehle’s evidence that he raised the issue of potential mortalities, given the manner in which the large abalone were placed, with Mr Tressider who appeared nonchalant about it. The appellant implicitly contends that the Judge should have reminded the jury of this evidence. However, the relevance to the prosecution case of the fact that a substantial amount of the large abalone died was that it had not solved the shortfall problem and on the prosecution case this in turn led to the Golden Gate dealings as an alternative solution. Again, defence counsel in his address did not refer to Mr Dehle’s evidence in this respect.
The Golden Gate dealings
The third circumstance relied on by the prosecution identified by the Judge related to the Golden Gate dealings and was in the following terms:
And then there is another number of facts upon which the prosecution relies that are to do with the Golden Gate Abalone contract.
There is the evidence that the Golden Gate Abalone deal meant that the harvest of the ‘05 project abalone would cease.
There is the evidence that Mr Ferguson supported – that is, was in favour of – the Golden Gate deal.
There is the evidence that the contract for that deal included payment by ABAL to Golden Gate to secure the contract. And there is the fact that the contract was drawn in such a way that ABAL had no actual obligation to supply Golden Gate with abalone.
The appellant refers to the Judge’s reference to the prosecution case that the timing and terms of the Golden Gate contract pointed to guilt. The appellant contends that this proposition assumes knowledge on the part of the appellant of what Mr Bascomb was doing and, other than the fact of the contract, there was no further evidence that it was a sham. This was put by defence counsel in his closing address and the appellant contends that it should have been part of the direction.
However, the Judge’s summary of the defence case included a summary of the appellant’s evidence in the following terms:
As to the Golden Gate deal, the accused said that that was Ken Bascomb’s deal; that ABAL was going to sell abalone to Golden Gate in two sizes: cocktail size, and much larger abalone. It was he who determined what information went into the board packs and that he never had any reason to suspect that any information he gave to the board was incorrect.
The Judge also referred to defence counsel’s address concerning the Golden Gate contract in the following terms:
Another example about jumping to conclusions, in Mr Boucaut’s submission, was the Golden Gate contract. If the directors of ABAL were prepared to enter into it, why should Mr Ferguson not be prepared to do so? So he said the fact that Ferguson was prepared to enter into it does not mean that it was a sham.
Mortality and growth data
The fourth circumstance relied on by the prosecution identified by the Judge related to the failure by the appellant to provide data relating to mortality and growth rates and was in the following terms:
The prosecution also relies upon facts related to the failure of the accused to provide data. They are the difficulty experienced by the compliance committee in getting data to support growth rates and mortality rates; the fact that Ferguson was aware of the committee’s requests for such data; the fact that the compliance committee was not supplied with any raw data; the fact that Professor Cheshire could not access any raw data to support growth rates or mortality rates; that Ferguson was aware of Professor Cheshire’s requests for that data; that Ab Assist crashed and was not reinstated; that Ferguson was aware ABAL had lost the data stored in the Ab Assist program and did not seek to see if there was a backup of the data; that is, he did not seek to do that in 2007.
The prosecution also relies on the fact that Ferguson did not arrange, after the Ab Assist crash, to re-enter the data from diver log books on to an ABAL computer either before the requests for data or after those requests; the fact that Ferguson was made aware by Karen Quinn in January 2008 that there was a backup of data held on Ab Assist that could be obtained for $2,000;[17] the fact that Ferguson, having been advised by Quinn that data was available, failed to tell her to get the data.
[17] The transcript of the summing up reads $200,000. However it is common ground that the Judge either said $2,000 and it was mis-transcribed or alternatively the Judge mistakenly said $200,000 but the jury understood that the Judge intended to say $2,000 because the unequivocal evidence was that Mr Bronstein required payment of $2,000 (plus GST).
The appellant’s first contention is that he gave evidence that, when the compliance committee refused to give its approval to the release of the product disclosure statement in February 2007, he passed on Mr Woodhead’s requests to Mr Tressider and Mr Tressider arranged for Rosie Romanowycz to provide the graphs and the jury should have been reminded of this evidence.
The Judge did remind the jury of this evidence when summarising the defence case. The Judge said:
About Peter Woodhead’s request for information prior to the release of the 2007 product disclosure statement, the accused’s evidence was that he sent Woodhead’s request to Tressider who, in turn, arranged for Rosie Romanowycz to provide the graphs.
The appellant’s second contention is that he gave evidence that he did not give directions to the office staff in Elliston to reload the data into a useful form because he thought that was being done and he believed that data was still being recorded in its primary form and being transferred onto Excel spreadsheets and the jury should have been reminded of this evidence.
The Judge did remind the jury of this evidence when summarising the defence case. The Judge said:
With respect to data collection, the accused’s evidence – his case – is that he left the collection of data to others. He understood that growth rates were being measured and he never concerned himself with knowing how it was done.… The accused understood that growth rates and mortality rates went into the Ab Assist program, but he never logged into that program himself, and after the failure of Ab Assist it was his understanding that the data was recorded in primary form and transferred to spreadsheets.
The appellant’s third contention is that he gave evidence that he did not seek the earlier data from Mr Bronstein because he was not confident of the integrity of the data and thought it was unfair that Mr Bronstein required payment of outstanding money and the jury should have been reminded of this evidence.
The Judge did remind the jury of this evidence when summarising the defence case. The Judge said:
On the topic of Mr Ferguson’s failure, on the Crown case, to retrieve the data from Ab Assist, Mr Boucaut asked, “Well, why should the chief executive officer of the company spend even as little as $2,000 on a program that produced incorrect data, incorrect averages”?
The appellant’s fourth contention is that Professor Cheshire gave evidence that the appellant appeared to be trying to get him the data that he required and contends that the jury should be have been reminded of this evidence.
While Professor Cheshire gave evidence that in the early days the appellant appeared to be trying to get him the data that he required, he gave evidence that this changed as the months passed and ultimately he believed that either the data did not exist or it was unfavourable. It would not have been in the interests of the defence for the Judge to have referred to this evidence.
Mortality and growth data
The fifth circumstance relied on by the prosecution identified by the Judge related to the appellant not hiring a replacement marine biologist after Ms Lawrie’s departure in November 2006 and was in the following terms:
And then the Crown relies upon a number of facts relating to the fact that Ferguson did not hire a marine biologist after Ms Lawrie’s employment finished.
These are the facts: that there was no contract of employment between a marine biologist and ABAL after Rachel Lawrie left in November 2006 up until Ms Elise Wilson was employed in June of 2008.
There was Dobrovolskis’s evidence that he was not employed as a marine biologist.
There is the evidence of the March 2007 Tressider operations report, which refers to a need for a marine biologist and the March 2007 Tressider operations report included in the April board pack. There is the April/May 2007 Tressider operations report that again refers to the need for a biologist replacement. And there is the fact that there were no marine biology reports after Ms Lawrie left in November 2006.
The appellant contends that the defence case was addressed by defence counsel in his closing address and the defence position on the topic should have been put to the jury.
The Judge summarised the appellant’s evidence on this topic in the following terms:
With respect to Alex Dobrovolskis being the company’s marine biologist, the accused’s evidence was that Tressider told him that the company did not have to replace Rachel Lawrie, as they had Dobrovolskis to do the job. Mr Ferguson’s evidence was that, until Elise Wilson was hired as the company biologist, he understood that Dobrovolskis had been fulfilling the function in respect of the marine biologist’s work. The accused said that he usually got information said to have come from Dobrovolskis from Tressider.
With respect to the annual growers’ report for the 2005 project, the internal quotes in that report from the marine biologist came from the marine biologist. The accused said that he had received the information verbally or by fax from Tressider or Bill Bascomb. About the quotation from the marine biologist’s report at tab 62, Mr Ferguson said he prepared the report for December 2007, that Tressider collected the information for him, and that the quotes attributed to the marine biologist had in fact been given to him by Tressider. It was the accused’s evidence that he understood it to be the truth that Dobrovolskis was doing the work of the company’s marine biologist.
In his closing address, defence counsel referred to evidence that to the knowledge of the appellant Mr Dobrovolskis applied for the job as marine biologist with ABAL and sent in his curriculum vitae. It may be observed that this evidence was a two-edged sword for the defence. Mr Dobrovolskis was never given the job as the company’s marine biologist and the appellant had responsibility for the engagement of senior staff such as a marine biologist.
In any event, the Judge did refer to this evidence when summarising the evidence in relation to the particulars of counts 4 and 6 which involved Mr Dobrovolskis’ role. The Judge said:
At some time, probably about February 2007, or soon thereafter, he [Mr Dobrovolskis] did have some discussions with Ferguson and then with Tressider about working for ABAL as a marine biologist. The topic was first raised in a five-minute conversation at the Elliston pub on an occasion when Dobrovolskis bumped into Ferguson at the pub. Dobrovolskis said he would think about it, meaning whether or not he would be the company’s marine biologist. Later he discussed the topic with Tressider; first, when the two of them were diving from Elliston to Port Lincoln, and on another occasion they discussed the topic when they were together on the same boat.
Their discussions included the necessity for Dobrovolskis to apply for an ABN number if he became the company’s marine biologist and the necessity for him to send invoices to the company. But eventually Mr Dobrovolskis decided that he did not want to take up the position as marine biologist with ABAL and he told Clay Dehle and Darren Tressider of his decision. He told Tressider that he was not fully qualified and not sufficiently experienced for the position and that he felt it required somebody with postgraduate qualifications, which of course he did not have…
The accused’s answer to this charge in his evidence is that he spoke to Dobrovolskis about the prospect of Dobrovolskis becoming the resident marine biologist rather than the acting marine biologist; that Dobrovolskis said he wanted to know everything he would be required to do and that he, Ferguson, then said ‘I’ll leave it to you and Darren to work it out’.
Before that conversation with Dobrovolskis, Mr Ferguson had received Dobrovolskis’s CV from Tressider.
In his closing address, defence counsel also referred, without suggesting that the appellant was aware of these matters, to evidence that Mr Dobrovolskis expressed interest in and discussed with the other divers predators and algae, provided reports on what was underneath the cages and was put on the science team when Ms Wilson was employed as the company’s marine biologist.
When summarising the evidence in relation to the particulars of counts 4 and 6, which involved Mr Dobrovolskis’ role, the Judge did refer to evidence that Mr Dobrovolskis looked out for predators, viewed footage of the sea floor and gave his notes to Mr Tressider and took photographs of the cages. The Judge did not mention Mr Dobrovolskis’ interest in algae or being put on the science team when Ms Wilson was employed as the company’s marine biologist.
This evidence was quite insignificant both because it was not suggested that the appellant was aware of these matters and because these matters collectively were extremely limited compared to the work that had been undertaken by Ms Lawrie as the company’s marine biologist, including reporting on growth rates and mortalities and writing the internal marine biology reports for the Growers’ reports.
Other matters
The prosecution relied on another item of circumstantial evidence, namely evidence that the appellant failed to provide details of the harvest that was said to be taking place in 2008. The appellant makes no complaint concerning what the Judge said about this topic.
The appellant makes a contention that, in some of the passages when the Judge was summarising the prosecution’s circumstantial case, the Judge referred to matters relied on by the prosecution as “facts” and this gave rise to a danger that the jury might conclude that these matters had been proved and/or were uncontroversial.
The Judge preceded his identification of the matters upon which the prosecution relied by way of circumstantial evidence by a direction to the jury that:
… your approach to the circumstantial evidence in this case requires two steps. First, you must look at the facts upon which the prosecution relies as circumstantial evidence and decide which facts you accept as established by the evidence and then you must consider what inference or what inferences you are prepared to draw from those facts.
The Judge had earlier and repeatedly directed the jury that the facts were exclusively its province and anything said by the Judge about the facts was to be understood in that context.
As soon as the Judge had finished his summary of the circumstantial evidence relied on by the prosecution, the Judge said:
There, then, ladies and gentlemen are the facts upon which the prosecution relies as circumstantial evidence in the case to prove that the accused knew about the failure of the ’05 project and, therefore, knew that the information he was providing to the board and was disseminating to the public was false.
Your first step, as I have said, is to decide which facts you should accept as established by the evidence.
In context, it is clear that the judge’s references to “facts” upon which the prosecution relied were references to “facts” asserted by the prosecution which the prosecution invited the jury to find. The subsequent references to primary “facts” would clearly have been understood by the jury in the same sense and in any event those primary “facts” were generally uncontroversial: what was controversial was the inferences to be drawn from them.
Relationship between summaries of prosecution and defence cases
The Judge first summarised the prosecution case (including matters relied on by the prosecution as circumstantial evidence tending to support Mr Tressider’s account of his communications with the appellant about the stocktake dive). The Judge then summarised the defence case (including matters relied on by the defence tending to support the appellant’s denial of communications with Mr Tressider about the stocktake dive).
The appellant contends that the Judge ought either to have addressed each circumstantial evidence item relied on by the prosecution followed by the defence response before moving onto the next item or to have referred explicitly back to each circumstantial evidence item relied on by the prosecution when summarising the defence case in respect of that item. The appellant contends that even if, contrary to his primary contentions addressed above, the Judge identified the defence responses in relation to each item of circumstantial evidence relied on by the prosecution, the Judge failed to link the defence responses sufficiently to those items.
It is a matter of individual style whether a trial judge summarises the prosecution case and then separately summarises the defence case (which is the more common practice) or the trial judge summarises both the prosecution and defence cases in relation to each issue or matter before moving on to the next one (which is less common but is adopted on occasions, particularly when there are many ultimate issues in the case). As the High Court said in Castle v The Queen,[18] “[h]ow the judge structures the summing-up and the extent to which the judge reminds the jury of the evidence is a matter for individual judgment and will reflect the complexity of the issues, and the length and conduct of the case”.
[18] [2016] HCA 46, (2016) 259 CLR 449.
In the present case, the impugned passages relate to a single ultimate issue, namely whether the appellant had been told of the high fatalities revealed by the stocktake dive. They relate to five circumstantial matters relied on by the Crown to support Mr Tressider’s evidence on this topic. Those five matters were relatively straightforward and easily understood by the jury. The jury had had the advantage at that point of having listened to the development of the prosecution case in respect of those matters over many days, followed by evidence by the appellant over more than three days during which the those matters (amongst others) were addressed.
When the Judge addressed the defence case in respect of each of the five matters, it was readily apparent to the jury which matter was being addressed and that the Judge was addressing the defence case in respect of the particular matter identified by the prosecution.
In the circumstances, it was not necessary for the Judge explicitly to identify which of the five matters relied on by the prosecution the Judge was addressing when it came to summarising the defence case. The style adopted by the Judge of first summarising the prosecution case and then summarising the defence case did not in all of the circumstances result in an imbalance as contended by the appellant.
Circumstantial evidence supporting defence case
The appellant contends that there were three topics of circumstantial evidence (outside the topics referred to above) that supported the defence case to which the Judge ought to have referred but did not.
Tressider’s post-stocktake harvest reports
The first topic that the appellant identifies was evidence that Mr Tressider produced reports showing favourable mortality numbers that were inconsistent with the results of the stocktake dive. The appellant contends that the Judge should have reminded the jury of this evidence.
The favourable operations reports prepared by Mr Tressider following the stocktake dive were tendered by the prosecution. The jury was well aware of them and of the fact that they were inconsistent with the results of the stocktake dive. There was no dispute at trial about the existence or validity of the results of the stocktake dive or the fact that Mr Tressider misled the board by his subsequent reports. Mr Tressider explained his conduct in this respect by reference to his fear for his life if he did not act in this way as a result of the threat made by Mr Bascomb.
In any event the Judge did address this circumstance (for what it was worth). The Judge, in the course of summarising the defence case, said:
Further, going back to Tressider’s behaviour after the 2007 stocktake, Mr Boucaut pointed out that Tressider continued to write positive reports
Evidence of Ms Lawrie
The second topic that the appellant identifies was evidence by Ms Lawrie that there was a conversation before the board arrived on a visit to Elliston in about late 2005 during which Mr Tressider directed her to take the board to the best cages and not mention problems with feed and lack of conditioning of the cages. The appellant contends that the Judge should have reminded the jury of this evidence.
The evidence to which the appellant refers was evidence led in chief. That evidence included the following passage:
Q.Did you have a conversation with Mr Ferguson prior to the board arriving.
A.Yes, I believe there was a meeting between Andrew, Darren and myself in regards to the board coming up to Elliston.
Q.Do you recall any of the detail of that conversation.
A.There was what cages we needed to go to, what are the best cages to obviously view and strategically, like, plan the trip to see those cages.
Q.Was the topic of what you might say to the board discussed.
A.It was more about - I can remember - I actually can remember Darren telling me I wasn't to say some stuff, specifics about the feed, the feed problem and introduction to the cages that weren't conditioned, but to review like the growth rates of the cages that were going good. Any further details, I'd need to see my journal.
As can be seen, that evidence was very much a double-edged sword for the defence. Defence counsel made no reference to it during his address to the jury. This is another situation in which it would have been dangerous from the perspective of the defence for the Judge to have drawn the jury’s attention specifically to that evidence. In addition, while it is essential that the summing up be balanced, is not the role of a trial judge to identify every piece of evidence that might be seen to support the case of one party or the other, particularly when that evidence has not been identified by the party in question in closing address.
Matters identified by defence counsel in closing address
The appellant refers to three points made by defence counsel in his closing address as supporting the defence case and/or undermining the prosecution case and contends that the Judge should have reminded the jury of those matters.
The first point was that defence counsel referred in his address to the appellant’s lack of experience in the aquaculture industry and his reliance on those who did have such experience.
The Judge did remind the jury of this matter. The Judge said:
Mr Ferguson is a solicitor. He had no experience at all in farming abalone, nor indeed in running managed investment schemes.…
In his early days as CEO, most of Mr Ferguson’s time was taken up dealing with police and licence issues and with litigation, including the shareholder disputes, and in the very early days of the project he went all over Australia talking to financial planners….
With respect to data collection, the accused’s evidence – his case – is that he left the collection of data to others…
Mr Boucaut reminded you of Mr Ferguson’s evidence that he relied completely on what he was told by the operations managers, Tressider and Bascomb, when it came to his having to understand what was happening on the farm. Well, said Mr Boucaut, you would expect that to be the case. Ferguson was a lawyer, not a diver, not a fish farmer; he knew nothing about growing abalone. His expertise was dealing with accountants, putting out product disclosure statements, dealing with lawyers and government about contracts and licences. The abalone side of the business was highly specialised and had to be left to experts. Mr Ferguson had to rely on what those experts told him. It is not one bit surprising, said Mr Boucaut, that a lawyer who knows nothing about abalone farming would leave that side of the business to his operational staff, who were the experts.
The second point was that defence counsel referred in his address to the evidence of Mr Williams, the independent biologist who relied on the operational staff like Mr Tressider for data, and submitted that the appellant was likewise reliant on information provided by the operational staff and indeed was at a disadvantage compared to Mr Williams because he could not undertake a dive and view the cages himself. The appellant contends that the Judge should have reminded the jury of this point.
The Judge in his summing up did not refer to the specific point made by defence counsel that the appellant was in no better position than Mr Williams to know of his own knowledge of matters such as growth rates and mortality rates. However, the Judge did in the passages extracted at [209] refer to the more general point that the appellant had no marine expertise and was reliant on information provided by others who did have such expertise. This point was in any event both obvious and uncontroversial. The prosecution case was not that the appellant had any direct knowledge of his own concerning mortalities; rather it was that he had been told by Mr Tressider of the results of the stocktake dive. It was not incumbent on the Judge to remind the jury of every single argument made by counsel and this would in any event have been both impractical and counter-productive. In the circumstances, there was no need for the Judge to refer to the specific point made by defence counsel in his closing address.
The third point was that defence counsel referred in his address to the reports from Mr Tressider before and after the stocktake dive which were positive and made no reference to the results of the stocktake dive and to the fact that Mr Tressider remained as operations manager for so long after the stocktake dive.
The Judge did remind the jury of this matter. The Judge said:
Further, going back to Tressider’s behaviour after the 2007 stocktake, Mr Boucaut pointed out that Tressider continued to write positive reports, that Tressider stayed on in the employ of the company as operations manager and that, even when finished in that capacity, he stayed on for some time longer. Is this the case, asked Mr Boucaut: did Tressider, as the inventor of the system, a system which Tressider called his “baby”, keep secret the results of the stocktake dive so that it would appear to Tressider’s employers, and, indeed, to the world, that his invention was, in fact, successful?
Holistic assessment whether imbalance in summing up
The assessment whether a summing up is imbalanced is ultimately a holistic one. While individual features can and must be analysed, the ultimate question is the overall effect of the summing up.
While there were some additional matters in the defence case that the Judge might also have addressed, they were few, minor and relatively insignificant and if the Judge had addressed them it may in fact have been disadvantageous to the defence. The Judge addressed all of the major and significant matters in the defence case involving circumstantial evidence supporting either the prosecution or defence case on the central issue whether Mr Tressider told the appellant about the high level of mortalities disclosed by the stocktake dive. When addressing the defence case insofar as it was in response to a specific matter relied on by the prosecution, it was readily apparent to the jury which prosecution matter was being addressed.
On a holistic assessment, the summing up was not imbalanced as asserted by the appellant. No miscarriage of justice resulted from the summing up.
Conclusion
I would dismiss the appeal.
DOYLE J:
I agree that the appeal should be dismissed for the reasons given by Blue J.
CHIVELL AJ:
I agree that the appeal should be dismissed for the reasons given by Blue J.
Key Legal Topics
Areas of Law
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Criminal Law
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Evidence
Legal Concepts
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Appeal
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Charge
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