R v Khoo

[2013] NSWSC 1518

Supreme Court

New South Wales

Medium Neutral Citation:	R v Khoo [2013] NSWSC 1518
Hearing dates:	10 October 2013
Decision date:	11 October 2013
Jurisdiction:	Common Law - Criminal
Before:	Johnson J
Decision:	Bail Refused
Catchwords:	BAIL - application for bail pending sentence appeal to Court of Criminal Appeal - special or exceptional circumstances required under s.30AA Bail Act 1978 - four offences of communicating inside information contrary to ss.1043A(2) and 1311(1) Corporations Act 2001 (Cth) - "tipping" offences - sentences of imprisonment involving minimum term of 14 months expiring in October 2014 - whether grounds of appeal most likely to succeed - held they were not - whether likely hearing date of appeal considered with grounds of appeal established special or exceptional circumstances - held they did not - bail refused
Legislation Cited:	Bail Act 1978 Corporations Act 2001 (Cth) Criminal Appeal Act 1912
Cases Cited:	Director of Public Prosecutions (Cth) v Cassaniti [2006] NSWSC 1103 Director of Public Prosecutions v Louizos [2008] NSWCA 271 DPP v Lindskog (unreported, Victorian County Court, his Honour Judge Parsons, 14 March 2013) Hili v The Queen [2010] HCA 45; 242 CLR 520 Lee v R [2012] NSWSC 1168 R v Wilson (1994) 34 NSWLR 1 RR v R [2011] NSWCCA 235; 216 A Crim R 489 Yang v R [2012] NSWCCA 49 Zreika v R [2012] NSWCCA 34
Texts Cited:	---
Category:	Principal judgment
Parties:	Regina (Crown) John Kay Jin Khoo (Applicant)
Representation:	Counsel: Mr MG McHugh SC (Crown) Mr M Thangaraj SC (Applicant) Solicitors: Director of Public Prosecutions (Cth) (Crown) Amond Legal (Applicant)
File Number(s):	2013/249899
Publication restriction:	---

Judgment

1. JOHNSON J: This is an application for bail by John Kay Jin Khoo.

1. The Applicant was sentenced by his Honour Judge Marien SC in the Sydney District Court on 8 August 2013, following his pleas of guilty to four offences of communicating inside information contrary to ss.1043A(2) and 1311(1) Corporations Act 2001 (Cth). These offences are colloquially described as "tipping" offences.

1. With respect to Counts 1 and 2 (committed in September-October 2010 and October-November 2010), the maximum penalty was five years' imprisonment. With respect to Counts 3 and 4 (both committed in June-July 2011), the maximum penalty for this crime had been increased by the Commonwealth Parliament to imprisonment for 10 years.

1. On Counts 1 and 2, the Applicant was sentenced to concurrent terms of imprisonment of nine months, commencing on 8 August 2013 and expiring on 7 May 2014. On Counts 3 and 4, the Applicant was sentenced to concurrent terms of imprisonment of one year and eight months, commencing on 8 November 2013 and expiring on 7 July 2015.

1. As against a total effective head sentence of one year and 11 months, his Honour directed the release of the Applicant after 14 months on 8 October 2014, conditional upon the Applicant entering a recognisance in the sum of $500.00 to be of good behaviour for the balance of the sentence.

1. On 8 August 2013, the Applicant filed a Notice of Intention to Apply for Leave to Appeal against sentence to the Court of Criminal Appeal. On the same day, a bail application was lodged in this Court.

1. On 8 October 2013, the Applicant filed in the Court of Criminal Appeal a Notice of Application for Leave to Appeal against sentence, together with grounds of appeal and submissions in support of the grounds.

1. The appeal is listed in the call-over list of the Registrar of the Court of Criminal Appeal on 24 October 2013.

1. The Applicant's bail application proceeded to hearing in the Bails List before me yesterday. I reserved my decision until today. At yesterday's hearing, Mr Thangaraj SC appeared for the Applicant, and Mr Michael McHugh SC appeared for the Crown.

1. As the Applicant seeks bail for the purpose of an appeal to the Court of Criminal Appeal, s.30AA Bail Act 1978 applies. The Applicant is not to be granted bail unless special or exceptional circumstances are established.

1. The application for leave to appeal in this case relates to sentence only.

1. The proper construction and application of s.30AA has been considered in a number of decisions in this State. They are summarised helpfully in the decisions of Basten JA in Director of Public Prosecutions (Cth) v Cassaniti [2006] NSWSC 1103 ("Cassaniti") at [16]ff, and of Hall J in Lee v R [2012] NSWSC 1168 at [61]ff.

1. Special or exceptional circumstances may be found in a combination of factors. Here, reliance is placed upon a combination of factors, being what are said to be very strong grounds of appeal and the passage of time before any hearing is likely to come on in the Court of Criminal Appeal, viewed against the Applicant's earliest release date of 8 October 2014.

1. It has been said, where reliance is placed upon grounds of appeal, that an Applicant must demonstrate that grounds of appeal are more than arguable. The Applicant must demonstrate that the appeal is most likely to succeed: R v Wilson (1994) 34 NSWLR 1 at 6 (Kirby P, Sheller JA agreeing).

1. In determining whether to stay an order of imprisonment and give bail to an Applicant pending an appeal, the Court must keep in mind that to stay a sentence of imprisonment, before deciding the appeal, is a serious interference with the due administration of criminal justice: Cassaniti at [25] (and the cases referred to therein).

1. Authorities referred to by Basten JA in Cassaniti at [25] have stated that, to grant bail pending a hearing of an appeal after sentence:

- may operate to make the sentence appear contingent until confirmed;

- places the Court in the invidious position of potentially having to return to prison a person whose circumstances may have - changed dramatically during the period of liberty on bail;

- undermines respect for the judicial system in having a "recently sentenced man walk free";

- undermines the public interest in having convicted persons serve their sentences as soon as is practicable.

1. Considerations of this type serve to explain the demanding test for bail under s.30AA.

1. The cases have also made clear that the likely hearing date in the Court of Criminal Appeal, and the relationship of that date to the earliest release date, is a factor to be taken into account: Cassaniti at [27]; Director of Public Prosecutions v Louizos [2008] NSWCA 271 at [21]; Lee v R at [64].

1. A Court dealing with a bail application will be reluctant to undertake any significant level of assessment of the likely success of the appeal: Cassaniti at [34]. The exigencies of the Bails List in this Court is relevant here given the demands of that List, and the limited capacity of a Judge sitting alone to hear argument for the purpose of assessing the strength of grounds of appeal. However, this Court has the task of seeking to make some assessment of the strength of the grounds of appeal, keeping in mind the practical limitations to which I have made mention. As I have said, the existence of merely arguable grounds is not enough. The grounds must be most likely to succeed.

1. Where an appeal relates to sentence only, it is necessary to keep in mind, as well, the task of the Court of Criminal Appeal on such an appeal. The Court of Court of Criminal Appeal is a court of error: Zreika v R [2012] NSWCCA 34 at [79]. All grounds of appeal should ordinarily arise from points taken in the sentencing court: Zreika v R at [80]-[81].

1. If the Court of Criminal Appeal grants leave to appeal against sentence and finds error, it remains for that Court to be satisfied under s.6(3) Criminal Appeal Act 1912 that some lesser sentence is warranted in law and should have been passed.

1. Before moving to an assessment of the grounds by reference to the submissions made yesterday, it is necessary to refer briefly to the circumstances of the offences themselves.

1. The offences occurred whilst the Applicant held a position of responsibility and trust with the Royal Bank of Canada. Between 2009 and his resignation following detection in November 2011, he worked as an Investment Banking Associate with that Bank.

1. On four occasions over a 10-month period between September 2010 and July 2011, the Applicant communicated inside information concerning takeovers to two of his friends, who were day traders. On each occasion, the Applicant knew that it was likely that the inside information he was passing on to his friends would lead to trading by that person using that information, as indeed occurred in each case.

1. The Applicant did not himself engage in insider trading, nor did he profit from these activities. However, it is necessary to bear in mind that the offences to which he pleaded guilty, and for which he was sentenced, were serious crimes where tipping itself constituted the offence.

1. I move now to a relatively brief assessment of the communicated grounds of appeal.

1. Ground 1 asserts his Honour failed to provide an adequate discount for admissions made by the Applicant to ASIC. It is the case that the evidence in the sentencing court revealed a significant level of assistance. It is also the case that the sentencing Judge took these matters into account on sentence. His Honour allowed a rolled up discount of 40% on Counts 1 and 2, for the Applicant's pleas of guilty and his co-operation and assistance. His Honour allowed a rolled up discount of 35% for his pleas of guilty and his co-operation and assistance on Counts 3 and 4.

1. Ground 1 seeks to challenge the adequacy of the discount and contends that some greater allowance ought to have been made with respect to aspects of the assistance. It has been said frequently in the Court of Criminal Appeal, that a ground of appeal which asserts that greater weight should have been given to a factor on sentence is difficult to make good: Yang v R [2012] NSWCCA 49 at [25]. This is because built in to the submission is an acknowledgment that the sentencing Judge did make allowance, including (in this case) a quantified discount for these matters. Ground 1 represents an argument capable of being advanced in the Court of Criminal Appeal, but it does not rise above the level of arguability.

1. Ground 2 asserts that his Honour erred by failing to have regard to the sentence imposed in the Victorian County Court in DPP v Lindskog (unreported, his Honour Judge Parsons, 14 March 2013). It is the case that a number of sentencing decisions in other Courts for different offences (including insider trading and tipping offences) were referred to in the course of the sentencing hearing. The transcript of the sentencing hearing is not available to this Court. However, in the course of submissions yesterday, it was emphasised that submissions were made by reference to the decision in DPP v Lindskog. Great caution is to be exercised, as the Court of Criminal Appeal has frequently observed, in considering grounds of appeal which invite comparison with a single sentencing decision of another Court, in particular where the person is not a co-offender or a related offender: RR v R [2011] NSWCCA 235; 216 A Crim R 489 at 514-515 [118]-[120], 517 [135]-[138]. Mr Lindskog is not said to be in any way related to the present Applicant's crimes.

1. The thrust of the argument here picks up a theme of the application generally, which is that tipping offences are in some way to be regarded as a class less serious than insider trading offences, and that this is an important matter to be ventilated on this application before the Court of Criminal Appeal.

1. It does not seem to me that this proposition provides any real assistance on the present application. As I have mentioned, the Applicant was sentenced for stand-alone tipping offences, offences for which the Commonwealth Parliament has fixed substantial penalties. Indeed, the maximum penalty was doubled at a time between the commission of the second and third offences for which the Applicant was sentenced.

1. Put shortly, I do not think that Ground 2 is of great assistance to the Applicant on this application.

1. Ground 3 asserts that his Honour erred by failing to provide any discount for the pregnancy termination undertaken by the Applicant's partner. His Honour adverted to this aspect in the course of his remarks on sentence. His Honour observed that it was the unhappy fact that the Applicant's partner determined to terminate the pregnancy, because of the uncertainty with respect to penalty which may be imposed. His Honour adverted to this fact and made an assessment of what weight to give to it. I do not see any particular strength in this ground of appeal.

1. Ground 4 asserts that his Honour erred by placing undue emphasis on the fact that the offences involved tipping. This picks up the theme exposed in Ground 2. It was submitted with some vigour by Mr Thangaraj SC that tipping offences are different as a class, less serious than insider trading offences, and that this aspect is such that, when viewed with other considerations here, there ought to have been an entirely non-custodial sentence imposed on the Applicant.

1. I have already mentioned that the offences to which the Applicant pleaded guilty are stand-alone tipping offences. The Parliament has determined that this class of conduct is itself sufficiently criminal to warrant the penalties to which I have made mention.

1. Insider trading is a different and related class of activity, which has been before the Courts frequently in recent years. The Applicant was in a position of trust and responsibility with the Royal Bank of Canada. Having obtained inside information in that capacity, he passed it on to two friends. He knew that it was likely that they would trade with that information. Each offence was complete once the Applicant communicated the information. To my mind, these offences are not minor examples of offences of this type.

1. The fact that the Applicant did not himself make a financial profit is a factor which was taken into account by the sentencing Judge, and is clearly relevant to sentence. On the other hand, the Applicant had inside information which he released to others. The sentencing Judge took into account (in my view correctly) that a particular mischief of tipping is that it places the tippee in the position of having information with the potential for it to be further communicated to others. If a person in the Applicant's position engages in insider trading, that may be the extent of the actual damage done. However, here the tipper is communicating information in a way which places the market at direct risk (at the hands of the tippees), and undermines the integrity of commercial arrangements. This conduct also exposes the market to further risk if the tippees share the information with others. In this case, it is not suggested that the two tippees further communicated the information, but the seriousness of the Applicant's crimes are illustrated by this aspect as well.

1. I mention this to emphasise what seems to me to be the objective gravity of crimes of this type, for which the Commonwealth Parliament has carved out stand-alone offences with substantial penalties. It is difficult to see how his Honour erred by placing undue emphasis on the fact that the offences involved tipping, seeing that was the nature of the offences themselves. I do not regard Ground 4 as having any particular strength.

1. Ground 5 asserts that his Honour failed to have regard to the principles of parity. One of the tippees, Mr Tan, was sentenced by his Honour. He was sentenced to community service and a fine for a lesser number of charges than the Applicant. I do not consider that this aspect is of particular assistance to the Applicant. Mr Tan was sentenced for different offences and he was not the insider who passed on information.

1. It is open to the Applicant to advance this argument on appeal, but it does not rise above a level of arguability.

1. Ground 6 asserts his Honour erred by failing to have regard to the fact that the Applicant tipped persons not of a familial identity and in financial need. Once again, this seems to return to the core argument that tipping is in some way a lesser offence, and that the objective gravity of the offence is influenced by the identity of the tippee. The fact that the tippees were good friends of the Applicant was a relevant factor on sentence. Given what the Applicant believed they were likely to do with the information, this is not a factor that greatly assists him. Whether they were family members (and they were not) is not of great moment in this case. The question whether the tippees were in financial need is not a matter which much assists the Applicant.

1. In any event, assuming these arguments were advanced at first instance in accordance with the principles in Zreika v R, then the Court of Criminal Appeal will give such weight as it thinks fit to the merits of that ground. For my part, I do not see it as being a ground of any particular strength.

1. Ground 7 asserts that, given his Honour imposed a sentence of full-time imprisonment and that the Applicant had co-operated with ASIC and the Crown, a discount ought to have been allowed for the more difficult custodial environment in which he will be housed. Mr McHugh SC observed yesterday that he did not recall such an argument being advanced for the Applicant before the sentencing Judge. After sentence had been passed, Mr McHugh SC suggested that his Honour recommend that the Applicant's assistance be taken into account in the classification process, and such a recommendation was made (ROS38-39).

1. If such a submission was not advanced at first instance, then the Applicant may have an immediate difficulty, in accordance with the principles in Zreika v R, in attempting to ventilate this for the first time in the Court of Criminal Appeal.

1. In any event, as the Court of Criminal Appeal has made clear, there should ordinarily be some evidence of greater hardship arising from a difficult custodial environment in the circumstances of the case. It seems to me that this ground, if leave is granted for it to be pressed, is not one which rises above a level of bare arguability.

1. Ground 8 contends that the sentences were manifestly excessive. The burden upon an applicant to make good this ground is well known. It is necessary to demonstrate that the sentences were unreasonable or plainly unjust: Hili v The Queen [2010] HCA 45; 242 CLR 520 at 538 [58].

1. It is necessary to keep in mind the sentences actually imposed, the maximum penalties provided for the offences, the objective gravity of the offences, the subjective circumstances of the Applicant, and other sentencing principles including, in this area of crime, the very important role of general deterrence.

1. I have already adverted to what seems to me to be the significant objective seriousness of these offences. His Honour characterised the offences as being in the mid-range of objective seriousness. In all the circumstances that are known on this application, I do not consider that the claim of manifest excess has any particular and substantial merit.

1. I conclude that the grounds of appeal, viewed individually or cumulatively, do not demonstrate that there is a ground or grounds which are most likely to succeed.

1. I have kept in mind that the likely hearing date of this appeal will be not before February 2014. The matter is in the Registrar's call-over list on 24 October 2013. I was informed yesterday that the written submissions for the Applicant may be taken to be those already filed. Senior counsel for the Crown indicated that the Crown's written submissions could be filed promptly. I would encourage the parties to prepare submissions so that, at the time of the call-over on 24 October 2013, the parties are in a position to tell the Registrar that the matter is ready to take a hearing date.

1. I have kept in mind that a hearing date in February 2014 would mean that about half of the custodial component of the sentence would have passed by that time. I have considered whether that factor, taken together with the grounds of appeal, is such as to constitute special or exceptional circumstances. I have concluded that it does not.

1. It cannot be said that the grounds of appeal are such that the period of time in custody until then should lead this Court to grant bail to the Applicant. I do not propose to make any recommendation to the Registrar that the matter be given any expedition. It will be a matter for the Registrar to select a hearing date, in light of the readiness of the parties, and any hearing estimate which will accommodate the efficient hearing of the application.

1. Having regard to all the matters to which I have adverted, I am not satisfied that special or exceptional circumstances have been demonstrated.

1. Bail is refused.

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Decision last updated: 17 October 2013