CITATION: Regina v Rivkin [2004] NSWCCA 7

HEARING DATE(S): 15/10/03, 16/10/03

JUDGMENT DATE:
5 February 2004

JUDGMENT OF: Mason P at 1; Wood CJ at CL at 1; Sully J at 1

DECISION: Appeal against conviction and sentence dismissed

CATCHWORDS: Appeal against conviction - insider trading - appellant found guilty of contravening s1002G(2) Corporations Act 2001 - Whether miscarriage of justice - actual or ostensible bias of trial judge - former professional association - whether "personal animosity" involved in sentence - Whether trial judge erred in not directing verdict of acquittal - meaning of "information" - possession of information as particularised - materiality - Admissibility of evidence - relevance - prejudicial/probative value - medical evidence as to witness' capacity to give reliable evidence or to present more attractively - Whether summing up unfair - judicial comment/warning - Whether verdict unreasonable - Fitness to stand trial - brain tumour - frontal lobe dysfunction - appellant's mental state - conduct at trial - credibility - expert evidence - mental element of offence - Fresh evidence of undiagnosed meningioma - relevance on appeal to issues of fitness to stand trial, miscarriage stemming from inappropriate behaviour, mens rea and sentence - Equality before the law - law's concerns regarding fitness is with capacity to understand and follow proceedings not with maximising capacity to present as attractive personality - sentencing in "white collar" criminal matters - court's duty not to be swayed by "community attitudes" in particular cases as promoted by media - Appeal against sentence - whether sentence manifestly excessive - whether miscarriage of sentencing judge's discretion - insider trading not a "victimless" crime - appellant's public persona - good character - personal and general deterrence - finding of "contemptuous arrogance" - no contrition - impact of fresh evidence as to appellant's medical and mental state where absence of evidence as to any change of attitude by prisoner - D

LEGISLATION CITED: Evidence Act 1995 ss102-110
Crimes Act 1914 (Cth) ss16A, 17A, 20AB
Corporations Act 2001 ss1002A, 1002B, 1002C,1002G

CASES CITED: Aussie Airlines Pty Limited v Australian Airlines Pty Limited & Qantas Airlines Limited (1996) 65 FCR 215
Builders' Registration Board of Queensland v Rauber (1983) 57 ALJR 376
Coombe v Bessell (1994) 4 Tas R 149
Domican v The Queen (1992) 173 CLR 555
Doney v The Queen (1990) 171 CLR 207
Dovade Pty Limited v Westpac Banking Group (1999) 46 NSWLR 168
Eastman v The Queen (2000) 203 CLR 1
Ebner v Official Trustee (2000) 205 CLR 337
Gallagher v The Queen (1986) 160 CLR 392
Hooker Investments Pty Limited v Baring Bros Halkerston and Partners Securities Limited (1986) 10 ACLR 462
Johnson v Johnson (2000) 201 CLR 488
Johnson v Miller (1937) 59 CLR 467
Mickelberg v The Queen (1989) 167 CLR 259
Palmer v The Queen (1998) 193 CLR 1
R v Bailey (1988) 35 A Crim R 458
R v El Rashid, NSWCCA 7 April 1995
R v ITA [2003] NSWCCA 174
R v Liosatos [1964] SASR 40
R v Mailes (2001) 126 A Crim R 20
R v Maxwell NSWCCA 23 December 1998
R v Morgan (1993) 70 A Crim R 368
R v Pantano (1990) 49 A Crim R 328
R v Presser [1958] VR 45
R v Scognamiglio (1991) 56 A Crim R 81
R v Turner [1975] QB 834 at 842
Re Polites (1991) 100 ALR 634
S v The Queen (1989) 168 CLR 266
Saleam v R (1989) 16 NSWLR 14
Toohey v Metropolitan Police Commissioner [1965] AC 595
Webb & Hay v The Queen (1994) 181 CLR 41
Zaidi v R (1991) 57 A Crim R 189

PARTIES :
Regina
Rene Walter Rivkin

FILE NUMBER(S): CCA 60198/03

COUNSEL: D Yates SC with M Buscombe (Crown)
R Ellicott QC with B McClintock SC and M Wigney

SOLICITORS: C K Smith (Crown)
S E O'Connor

LOWER COURTJURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): 71998/03

LOWER COURT
JUDICIAL OFFICER : Whealy J

CCA 60198/03

MASON P
WOOD CJ at CL
SULLY J

Regina v Rene Walter Rivkin

Judgment

1 THE COURT: On 26 March 2003, the appellant stood trial before Whealy J and a jury on an indictment that contained one count charging that:

On or about 24 April 2001 at Sydney in the State of New South Wales, (the appellant) contravened section 1002G(2) of the Corporations Act in that he:

(a) being possessed of information that was not generally available but which, if it were generally available, a reasonable person would expect it to have a material effect upon the price or value of securities of a body corporate, namely ordinary shares in Qantas Airways Limited (“Qantas shares”); and

(b) knew or ought reasonably to have known that such information was not generally available, and if it were generally available it might have a material effect on the price or value of Qantas shares;

procured Rivkin Investments Pty Limited to purchase 50,000 Qantas shares.

2 On 30 April 2003, the jury returned a verdict of guilty. On 29 May 2003, the appellant was sentenced to imprisonment for a term of 9 months to be served by way of periodic detention, and was fined the sum of $30,000.

3 He now appeals, pursuant to s 5(1)(a) of the Criminal Appeal Act 1912 (NSW) against his conviction, and seeks the leave of the Court, pursuant to s 5(1)(c) of the Criminal Appeal Act, to appeal against the sentence which was passed following his conviction.

A. FACTS

4 The information, which was the subject of the charge against the appellant, was alleged to have been conveyed in a telephone conversation between the appellant and Mr Gerard McGowan, on the morning of 24 April 2001. The Crown opened its case, in accordance with the particulars which had been supplied in this respect as follows:

“(1) Gerard McGowan said that there was a deal for the merging of Impulse’s business with Qantas;

(2) Gerard McGowan said that he had to wait until he had ACCC approval of the deal before making the purchase of the property; and

(3) Gerard McGowan said that he believed that ACCC approval would be forthcoming.”

5 At the time of this conversation, Mr McGowan was the Executive Chairman of Impulse Airlines. That airline was formed in 1982. By April 2000 it was conducting operations as a provider of regional passenger air transport services. At this time, it announced an intention to expand its business to include jet operations between the major capitals of Australia. By the end of 2000, it was operating as a regional and domestic airline that competed on the Sydney-Melbourne and Sydney-Brisbane routes with Qantas and Ansett, and also with Virgin Blue, which had entered the market in September 2000.

6 As at December 2000 it had made an operating profit of $7.7 million. The fact that it had recorded profitable months and had expressed the prospect of sustained profitability had been reported in both the television and print media. By January 2001, it had five 717 aircraft and 13 Beechcraft turbo propeller aircraft, and during that month it took delivery of further aircraft.

7 However, the introduction of Impulse and Virgin Blue on the eastern seaboard trunk had brought about intense competition among the three airlines and the ensuing price war was reported by the media to have significantly, and adversely, affected Qantas’ profitability, as well as its share price. On 29 March 2001, it was reported that its share price had dropped to its lowest point in two and a half years following a warning, which it had given, that steep discounting in the domestic market, a weak dollar, and a slowing demand, would leave its full year earnings “significantly lower”.

8 At the same time, Impulse was not achieving the significant passenger growth that it had expected with the delivery of three additional Boeing 717 aircraft. The factors that were affecting the share price of Qantas, which had added more capacity to the market, were also having an impact on its financial position, resulting in a projected operating loss to the end of March of $13 million.

9 As a result of these financial difficulties, and the problems which had been experienced in raising the additional capital needed for expansion from its institutional shareholders (arising from the opposition of one shareholder), Gerard McGowan approached Mr Dixon, the Chief Executive Officer of Qantas and asked him if Qantas would consider a wet leasing arrangement.

10 An initial meeting took place between Mr McGowan and Mr Dixon on 29 March 2001. Thereafter, and throughout April 2001, confidential meetings took place between representatives of the two companies.

11 These meetings had been preceded by a board meeting of Impulse on 3 March 2001, at which its financial position was discussed, including the possibility that it would need to close its doors. Representatives of six of its institutional investors were present, and they were kept informed of the subsequent negotiations with Qantas.

12 Mr McGowan was cross-examined about the answers that he had given in a Channel 7 interview on the day after this meeting. He denied having told a deliberate lie in his answer to questions concerning whether or not Impulse was still trading profitably, and in a statement, which he made during the interview, that Impulse would record a full year net profit of about $35 million. He said that he did not consider that he had an obligation to tell the media the truth concerning Impulse’s financial position.

13 He also denied having given untruthful evidence in relation to the accuracy of the content of the Impulse Company Profile, which had been prepared in March 2001, or that the information contained in it had been false.

14 He conceded that by the time of his approach to Mr Dixon of Qantas, he knew that the institutional investors were not prepared to contribute a further $50 million to Impulse, and agreed that no such funds were received. Accordingly, he was cross-examined about the truthfulness of the statement, which had been attributed to him in an article appearing in the Sydney Morning Herald on 23 April 2001, to the effect that Impulse had “secured a further $50 million in funding from institutional investors”. He conceded that this was “an exceptionally serious lie”, but said that at the time of the publication of the article, the Qantas negotiations were very advanced and he had not been prepared to tell the journalist that Impulse was about to close its doors.

15 He acknowledged in cross-examination, that the only deal discussed with Qantas had been a wet lease arrangement that would have involved Qantas buying out the institutional investors. He did not believe that a merger, as such, was discussed, and accepted that the deal eventually transacted was neither a takeover nor a merger.

16 The critical telephone conversation of 24 April 2001, which is at the heart of the prosecution, occurred whilst Mr McGowan was in a meeting with Mr Dassakis (the Group Operations Manager of the Rivkin Group of Companies) who was assisting the appellant with the sale of his residence in Rose Bay and with Mr Doff, the real estate agent handling the sale, at his office. Also in attendance was Mr Mark McGowan (the Chief Financial Officer of Impulse and the brother of Gerard McGowan). Gerard McGowan said that he informed Mr Dassakis that he was interested in the property (which was owned by Timsa 43 Pty Limited) and that, as he was waiting for the sale of his business he would have to make a conditional offer. Mr Dassakis, he said, replied that they would need to know the details of the negotiations in order for the appellant to assess whether he would accept the offer. It was Mr McGowan’s evidence that he said, to Mr Dassakis, that he was looking to merge Impulse with Qantas, and that they were waiting on ACCC approval. He added that he informed Mr Dassakis and Mr Doff that, now that they were aware of the transaction, they could not trade in Qantas shares. Mr Dassakis then placed a call to the appellant’s office and left a message for him.

17 It was shortly after this conversation that the appellant telephoned Mr Dassakis, and was transferred to Mr Gerard McGowan. Mr McGowan’s evidence at trial concerning the ensuing conversation with the appellant was as follows:

“I said to Mr Rivkin, ‘I am interested in purchasing your property. However I am currently in merging my Impulse business with Qantas. We are awaiting ACCC approval for that transaction.’ Mr Rivkin said to me, ‘I don’t believe that the ACCC would approve such a thing.’ ‘I believe’ I said to Mr Rivkin, ‘I believe they will approve it’, that, ‘I have had several months of negotiation with the ACCC on a variety of matters and I believe that they would approve the deal.’ I also went on to say to Mr Rivkin that, ‘Obviously now that you are aware of this you cannot trade in Qantas shares.’ Mr Rivkin said to me, ‘Obviously a person of my standing would not contemplate such a thing’ and that was the end of the conversation.”

18 When Mr McGowan was cross-examined, in relation to this conversation, he gave the following evidence:

“Q. Now, would you just tell us what you said about what you were negotiating with Qantas to Rivkin?

A. I said looking I told Mr Rivkin that we are looking to merge or sell part of our business to Qantas. We are awaiting ACCC approval. He did not think we would get ACCC approval and my view was I thought we would.”

19 The cross-examination continued:

“Q. When you gave evidence yesterday you said this in response to Mr Yates: ‘I am interested in purchasing your property. However I am currently in merging my Impulse business with Qantas’ you recall that?

Q. You did not say yesterday that you said to Mr Rivkin that you were selling part of your business to Qantas did you?

A. Well, no that is the transcript, no.

Q. Equally you have told me during today that you in fact were not merging your business with Qantas?

…

Q. If you said you were merging your business, the Impulse business with Qantas, that would not have been true?

A. Well, I guess it is how you interpret that.

Q. What you actually said was something like that you thought you were negotiating in connection with a commercial arrangement in relation to your business?

A. Yeah I don’t believe I said that.”

20 There was further cross-examination to the following effect:

“Q. What I want to suggest to you was you said words to the effect, ‘I am negotiating a commercial arrangement with Qantas’?

A. No I don’t think I used the words ‘commercial arrangement’.

Q. But you certainly used the word ‘negotiating’

A. Yes.

Q. It would have been quite misleading for you to say it was a done deal to Mr Rivkin?

A. I don’t think I said that.

Q. Because there was no done deal at least until 30 April?

A. Yes.”

21 The concept of a “done deal” had arisen earlier in the following passage of cross-examination:

“Q. The Qantas board did not approve the transaction or the commercial arrangements until 30 April 2001.

A. Yes.

Q. And I suppose it is in fairness, it is probably right to say up to 30 April when the Qantas board approved it was hanging in the balance?

A. Yes.

Q. And certainly you did not have a done deal until the board of Qantas had approved it did you?

A. No that is right.”

22 Counsel for the appellant returned to the conversation towards the end of the cross-examination, as follows:

“Q. You told Mr Rivkin that you were negotiating a commercial arrangement with Qantas didn’t you?

A. Well I don’t think I used the words commercial arrangement but yes, basically that’s what was said.

Q. You certainly said you were negotiating something with Qantas?

A. Yes that’s correct.

Q. You didn’t say that you’d done a deal to merge Impulse with Qantas did you?

A. Well I think that’s what I said, yes.

Q. Now I want to suggest that you didn’t say that, because as at that point Mr McGowan, you had not done a deal to merge Qantas with Impulse had you?

A. No it wasn’t signed.

Q. And you were still negotiating weren’t you?

A. Yes.

Q. You spoke in terms of negotiations?

A. Yes.

Q. And you also told us that the deal in question was not a merger haven't you?

A. Yes.

Q. So you would not have said to Mr Rivkin, I have done a deal to merge Impulse with Qantas would you?

A. No.”

23 Two witnesses, who overheard Gerard McGowan’s side of the telephone conversation, gave evidence. Mr Mark McGowan’s evidence was to the following effect:

“Gerry [McGowan] talked on Spiros’ [Mr Dassakis’] mobile phone to who I assume was Mr Rivkin. Gerry then said that he wished to buy his property but that it was conditional on ACCC approval of a deal to merge Impulse’s business with Qantas and he said that he advised him that he could not trade in Qantas shares now that he knew this.”

24 He also said that, prior to this conversation, Gerard McGowan had supplied similar information to Mr Dassakis and to Mr Doff. He accepted, in cross-examination, that the only agreement negotiated or considered by Impulse and Qantas had been a wet lease agreement.

25 Mr Dassakis’ evidence was as follows:

“I passed the phone over to Mr McGowan and Mr McGowan expressed interest in the house. His family was interested. He mentioned that his company, Impulse, was entering into a financial arrangement with another company and during the course of that conversation I heard the word ‘Qantas’ and there was also discussion about a seven day option period where Mr McGowan would put the money down for a period of seven days and at that time he could either buy the home or rescind.”

26 He added that he remembered that the ACCC was mentioned, but he could not be sure at what point this had occurred.

27 He also said that he had spoken with the appellant later that day and indicated that he had executed a contract, under a power of attorney, for the sale of the property, conditional upon Impulse entering into a financial arrangement with Qantas that required ACCC approval, with a 7 day option period.

28 He said, in cross-examination, that the expression used by Mr McGowan was not the word “merger”. Rather, he had spoken in terms of a “financial arrangement”, and had not said anything to suggest that there had been a concluded deal. He also said that when speaking with the appellant after the conversation, the latter had remarked that he did not believe Mr McGowan, and, additionally, that he did not believe that Mr McGowan had the money to buy the house.

29 The appellant gave evidence to the following effect concerning the conversation:

“He [Mr McGowan] said to me: ‘I’m interested in buying your house but I have to do a deal first.

I said to him, ‘Does that deal relate to the 50 million that the paper said you raised yesterday?

He said, ‘No. It’s a different deal. I think it’s a deal with Qantas’ at which I don’t think I said anything else as I didn’t believe a word of that and I went on.”

30 The reference to the $50 million, he said, related to the article in the Sydney Morning Herald which he had read on 23 April 2001, which recorded Mr McGowan as having said that Impulse had secured a further $50 million in funding from institutional investors on Tuesday and that it was working towards a share market float scheduled for mid 2002.

31 He also gave evidence that he had not believed a word of what Mr McGowan had said to him because he could not understand why anyone would buy Impulse “if it was going broke”.

32 After the conversation with Mr McGowan he said that he again spoke to Mr Dassakis and told him he did not believe what Mr McGowan had told him, but he agreed to give Mr McGowan a seven-day conditional contract.

33 He said that he was not certain whether Mr McGowan had mentioned Qantas in that conversation, but he was certain that he had not mentioned the ACCC. He agreed in cross-examination, however, that after speaking to Mr McGowan he had said to Mr Dassakis that “the ACCC would never approve that”. He also agreed, in cross-examination, that if Impulse’s business was going to be taken over by Qantas, then that would require ACCC approval, and that it would be good news for Qantas. He denied that Mr McGowan had warned him that he could not trade in Qantas shares. He also said that while he had not believed Mr McGowan, he had assumed that he would be receiving some of the $50 million referred to in the article, and would be using it to purchase the house.

34 Some time later, Mr Doff telephoned Mr McGowan and informed him that a conditional offer had been accepted. A contract was entered into, but it did not proceed.

35 Following the conversation, and on the same day that it occurred, the appellant instructed Mr Kerstens, a SEATS Operator with Rivkin Discount Stockbroking, to purchase 50,000 shares in Qantas on behalf of Rivkin Investments Pty Limited (“Rivkin Investments”), a company in which he had an 11% interest. The order was executed by Mr Kerstens at 2:52 PM. The appellant said that he gave instructions for the purchase after receiving a telephone call from Mr Kerstens suggesting that Qantas shares were “looking good”. He said that he had similarly been watching the computer screens in his office that showed the trading. He also said that the information from Mr McGowan had not influenced his decision, and that he would not have bought the shares had Mr Kerstens not phoned him.

36 Mr Kerstens gave evidence to the effect that he received the instructions from the appellant at 2:52 PM, and confirmed that, prior to receiving those instructions, he had phoned the appellant and informed him that there had been a lot of activity in Qantas shares and that they looked interesting.

37 On 30 April 2001, following the several confidential meetings that had been held at a golf club to maintain security, Qantas Board approval was received for the transaction. Heads of agreement were signed on 1 May 2001, and a copy was forwarded to the ASX, in order to comply with the listing rules.

38 At about 2 PM that day, Impulse and Qantas made a joint public announcement that Impulse was withdrawing from operating scheduled air services in Australiaunder its own name, and that the two airlines had entered into a long term relationship that involved, inter alia, Impulse contracting to Qantas its eight Boeing 717 (and 13 Beechcraft) aircraft, complete with pilots and cabin crew, and Impulse operating Boeing 717 services for Qantas, under the Qantas brand and livery. The agreement was expressed to be subject to approval from the Australian Competition and Consumer Commission (ACCC). A letter from Qantas was released to the market by the ASX at about 14:07 PM, while its market release was issued at 12:58 PM.

39 In the discussions with the ACCC, Impulse and Qantas described the result of their arrangements as a “virtual or contractual merger” of the two companies.

40 On the same day as the announcement Rivkin Investments sold the Qantas shares for a profit of $2,664.94. That sale was effected at 12:10 PM, before trading in Qantas shares was suspended, and before the public announcement.

41 Mr Kerstens said, in this regard, that he had kept an eye on the movements in the share prices since their purchase. The price, he said, had initially gone down but had then risen sharply on 1 May, reaching $2.90 before its suspension. He said that he had tried to phone the appellant and when he eventually reached him, the price was falling. He received instructions to sell at $2.85.

42 He also said, in cross-examination, that the appellant had not indicated to him any reason for the price rise; he also said that there was nothing “out of the ordinary” in relation to the transaction.

43 Charts showing the closing prices and volumes of Qantas shares traded between 2 April 2001 and 1 May 2001, and showing, at five-minute intervals, the price and volume of trades on 1 May 2001 were tendered, and admitted over defence objection.

44 The appellant gave evidence to the effect that he was accustomed to trading “all day and every day”, and that he informed himself on the markets by reading the Sydney Morning Herald, the Australian and the Australian Financial Review, on a daily basis, and by watching the computer screens in his office. In cross examination he agreed that he was an opportunistic buyer of shares, in the sense that he was prepared to buy and sell on short notice, and in the very short term, to make a profit.

45 It was in that context, that he said that he gave the instructions to sell, because he had bought the shares “to make a few cents”, and had achieved that result. He said that he had no knowledge of the pending market announcement.

46 Several other witnesses were called in relation to the availability and price sensitivity of the information. They included Mr Anderson of Equator Communications Pty Limited, an advertising company that had been engaged by Impulse. He said, contrary to suggestions in a Sydney Morning Herald article of 24 May (which had recorded him saying that some weeks before the Qantas-Impulse alliance had been made public, Equator had been told to put the Cockatoo advertising campaign on hold), that he had not received calls from stockbrokers concerning a rumour about Impulse’s collapse, and that he had been unaware, before 1 May, of any deal or negotiations for a deal with Qantas. Although he and his partner had discussed the possible reason for the change in attitude to the advertising campaign, he had not himself come to any conclusion that Impulse was selling out to Qantas.

47 Mr de Teliga, who was a director of Equator, and who had dealt directly with Mr McGowan, similarly gave evidence that the Sydney Morning Herald suggestion that Equator had been phoned by stockbrokers concerning rumours in relation to Impulse, had been incorrect. He also said that he had been unaware of any information, rumour or speculation concerning any deal or possible deal between Qantas and Impulse, or concerning Impulse’s possible collapse. He agreed that he had speculated that the advertising campaign had been stopped because Impulse was running out of money, that he had thought it unlikely that all four competitors would continue, and that he had speculated that Impulse might join either Ansett, Qantas, or Virgin Blue.

48 Simon Westaway, the Corporate Affairs Manager for Impulse, whose duties included the management of media relations with government, said that Mr McGowan had told him, on 30 April, that in all likelihood there was going to be a commercial arrangement with Qantas, and asked him in confidence, to prepare some lines to go in a media announcement. Prior to that, he said, he had no knowledge of any deal with Qantas, although he knew that things were not going well. In that regard he agreed that there had been a recurring theme in the press that one of the four players was likely to disappear, and that it was likely to be either Impulse or Virgin Blue. He said that very late in April, he became aware of rumours that Impulse was doing a deal with Qantas and that a journalist had telephoned him about such a rumour on 30 April.

49 Simon Gresham, a research analyst with Merrill Lynch Australia, whose investment advisory services were concerned with the transport sector, including the airline industry, and whose analysis reports relating to Qantas were tendered, said that he had not been aware, as at 24 April, of the information which the prosecution alleged had been given to the appellant, and that he had not been aware of any information from which he could deduce or conclude that there was a proposed deal between Impulse and Qantas. On 1 May, he issued a report altering his recommendation in relation to Qantas shares from neutral to accumulate.

50 Graham Sellars-Jones, who had been involved in stock broking since 1958, and had extensive experience in advising private investors in relation to the share market, said that, as at 24 April, he had not been aware of any information of the kind which the prosecution alleged the appellant had received from Mr McGowan or of any information from which he could deduce, infer or conclude that there was a deal, or negotiations for a possible deal, for a merger of Impulse’s business with Qantas.

51 He was held to be qualified as an expert witness, who was capable of giving evidence on the issues of general availability and price sensitivity. In that capacity he said in chief that "the information would be likely to influence persons who commonly invest in securities in deciding whether or not to subscribe for, sell or buy Qantas shares." An aspect of importance, he said, was its source, as a judgment had to be made as to its reliability; as well as its content. In that regard, he said that it was likely to influence people because it contained the clear inference that one of the competitors in the industry was going to leave it, and that would be beneficial to those who remained, including Qantas.

52 In cross-examination he accepted that, in recent years, he had focused principally on private investors, and that large institutional shareholders were the major shareholders in Qantas. He did not, however, accept that he did not know what would influence institutional investors, nor did he agree that people would not take account of information simply because there was a possibility that it might not be true. He pointed out that there was a sliding scale of reliability, depending on how certain the person was as to its truth or untruth.

53 He agreed that the credibility of the source was very important, and that if a person knew that the supplier of the information was a liar the information would be discounted. In re-examination he said that comments by an Executive Chairman in private, accompanied by a warning that the recipient could not trade, would be "fairly well up the scale of reliability".

54 He did not concede in cross-examination that the Sydney Morning Herald article negated the information that Mr McGowan had allegedly supplied to the appellant, although he accepted that there was an inconsistency in the respective statements. A question was put to him in cross-examination, upon the assumption that as an investor he had read the article, and had been informed on the following day that Mr McGowan had said that there was a deal for the merging of Impulse's business with Qantas. It was his reply that he would not act either way, in relation to Qantas shares, because he would not be able to make an assessment of the reliability of the information which he had received.

55 He made it clear however, that any decision to buy Qantas shares, in circumstances where an investor had read the article and had been given information as to a deal for the merging of the businesses, would depend upon the identity of the person who supplied that information, indicating that he would not take note of an "unsourced comment from somebody undefined”.

56 Finally, he accepted that it had been obvious, at 24 April, that one of the "airlines was going to go", and that there would be less competition for Qantas. Nevertheless the information, he considered, remained price sensitive because it impacted on the level of certainty and timing.

57 Two witnesses from Qantas, who had been involved in the negotiations, were called. Curtis Davies, the Group General Manager, said that, at the first negotiation meeting he had attended, Mr Dixon had made it clear that the meetings were of a totally confidential nature. Steps were taken to keep that confidentiality, including adopting a code-named "Project Clock".

58 The first meeting, he said, had been attended by three employees of Deutsche Bank who were advising Qantas, and by two institutional investors in Impulse. As time went buy, more people at Qantas became involved, including lawyers from either Minter Ellison or Blake Dawson Waldron. By 1 May, he said, he knew of at least ten or twelve people who had been involved. He was not aware of Qantas releasing any information to the public relating to the meetings, or the negotiations, before 1 May 2001.

59 Brett Johnson, the Chief General Counsel and Company Secretary of Qantas, first became aware of the negotiations after being advised of them by Mr Dixon, on 1 April. He became personally involved from a legal perspective from 17 April, and assisted in drafting the heads of agreement and in dealing with the ACCC. It was he who forwarded the heads of agreement to the ASX on 1 May, after they had been signed that day.

60 It was his recollection that the draft heads of agreement had been signed on the evening of 30 April, following a meeting with Professor Fels. He said that Qantas had not requested a suspension of trading on the morning of 1 May because it had not considered the announcement to be sufficiently material, or that there had been sufficient speculation in the market about an announcement. To the best of his knowledge, Qantas had made no announcement, and had no discussions with the media, before the 1 May release. He also confirmed that Qantas had considered it important to maintain the confidentiality of the negotiations.

61 David Barnett, the Assistant Manager Sydney Companies Division, of the ASX, gave evidence that, after 12:10 PM on 1 May, he received a telephone call from SEATS Market Central, advising that there was a news report, on the Australian Financial Review website, indicating that Qantas was in discussions with Impulse about a commercial agreement, and that its shares were trading at $2.90, having opened at $2.68 or $2.70.

62 After accessing the web site, he saidhe had contacted Mr Johnson of Qantas, who confirmed the report. It was then agreed that he should instruct SEATS controlto impose a trading halt. That occurred at about 12:20 PM, and was followed by the market release. Trading resumed, he said, at 2:20 PM.

63 Finally the Crown called, in its case, Nigel Littlewood, who, together with the appellant, was a director of the company that published the Rivkin Report. The report of 23 April 2001 contained the following item:

"as for Qantas, the situation in the Australian airline industry is a mess and I could not add any significant value to the market's view that would help you make a decision.

Taking a long-term view, I do, of course, believe that the stock is quite cheap, but in the short term, all sorts of things could happen and I cannot and will not attempt to guess what they are."

64 His Honour accepted, upon the appellant's application, that Mr Littlewood was qualified to give expert evidence in relation to the information that the Crown alleged had been given to the appellant. It was his opinion that it was "unlikely" that the information was price sensitive. The reasons he gave were that it was vague, and that as at 24 April he believed that most people in the market expected the price war to end and that one of the new players, either Virgin or Impulse, would disappear. In that regard, he said that Mr Dixon had said that one of those airlines would not be around by the end of the year. Additionally, he said that he had thought that it would be Impulse that would disappear, as it had the weaker balance sheet.

65 Leave was given to the Crown to cross-examine him, under s 38 of the Evidence Act. In the course of that cross-examination, he conceded that in April 2001 there was no evidence that the price war had ended, that what Mr McGowan had said may have had an impact on the increase in the share prices, and that the possibility that Impulse would no longer be in competition with Qantas would be a positive for the company and would be likely to influence investors to buy its shares. He accepted that he had previously said that he did not think that anybody had expected Qantas to buy out Impulse, because the market focus at that time was on what was happening with Ansett.

66 He agreed that he had purchased shares in Qantas on 12 April and resold them on 18 April, by which time none of the competitors had disappeared. The rally in price that had occurred to that time, he agreed, was more likely to have been due to Ansett's misfortunes, rather than to indefinite speculation about what might happen to Impulse or Virgin Blue.

67 He also agreed that the price rise indicated that the market had not previously factored in that one of the players, namely Impulse, might disappear.

68 The appellant gave evidence, in his case, that he was aware of the insider trading laws as at April 2001, and would never knowingly break them. He conceded, in cross-examination, that he had been aware for some months before 24 April, of the entry into the industry, of Impulse and Virgin Blue, of the fierce competition in the industry, and of the extensive fare cutting that was occurring. He was also aware, he conceded, of the press reports of the adverse effects of the competition on Qantas's profitability. He accepted that he had been the author of the article in the Rivkin Report relating to Qantas, that he had been unable to guess what would happen in the short term, and that he had not, at that time, recommended a purchase of those shares.

69 He also accepted in cross-examination, that he knew at that time, that Mr McGowan was running Impulse, and would be the one to know if a deal was going on between Qantas and Impulse. He said, however, that as he had not believed a word of what Mr McGowan had said to him, he did not believe that it would have an effect on the price or value of the shares.

70 The appellant also called, in his case, a merchant banker, Alan Humphris, who his Honour similarly accepted was qualified to give expert evidence. He said that he had been following the domestic airline sector since its deregulation in 1989.

71 He did not believe that the information upon which the prosecution relied would be likely to influence a reasonable investor to subscribe for, sell or purchase Qantas shares, because in light of its nature and the generally available information, a reasonable investor would be left with a considerable amount of uncertainty, such that he would question its reliability. That would be so, he said, unless the information was conveyed in a highly reliable form, such as a company document.

72 In cross-examination he agreed that he had never worked as a stockbroker, that his expertise was in corporate finance, and that when giving his evidence he had placed himself in the position of a reasonable investor who had come from a merchant banking background. He accepted that the price of a share is driven largely by the view of the future. He accepted that, when he expressed an opinion, he endeavoured to base it on fact, but acknowledged that the share market also operated on matters of the sentiment, rumour and tips, and that some investors who commonly invested in securities would be interested in the relevant information.

73 He also accepted that, in expressing his opinion, he had made no assumption as to the manner in which the reasonable investor had received the information. In that respect, he acknowledged that he would have expected Mr McGowan, as Executive Chairman of Impulse, to have had reliable information concerning Impulse's dealings, and that if he had been the source it was relatively authoritative and would have to be taken more seriously. Nevertheless he considered the information itself to reflect a number of uncertainties and to give rise to queries as to its reliability.

74 He agreed that the prospect of Impulse disappearing from the competition would be good news for Qantas. He was aware that there was speculation in the market that this might occur, and also that there might be a merger between Impulse and Virgin Blue, and that Ansett or Virgin Blue might "hit the wall".

75 Additional material was tendered in the defence case in the form of articles that had appeared on 31 March 2001 in the Sydney Morning Herald "Bite Dust" and in the Australian "Discount players face loss but vow to stay" and also in the Australian on 21 April 2001 "Weakest Link". A Sydney Morning Herald article dated 23 April 2001 "Impulse tops up reserve tank", and a transcript of a Channel 7 interview with Mr McGowan on 4 March 2001 were also tendered and relied upon in relation to the attack that was made on Mr McGowan’s truthfulness.

B. THE RELEVANT STATUTORY PROVISIONS AND ELEMENTS OF THE OFFENCE

76 At the relevant time, section 1002G(1) of the Corporations Act 2001 defined the circumstances in which the insider trading provisions applied, as extending to those:

(a) …where a person (in this section called the insider) possesses information that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of a body corporate; and

(i) the information is not generally available; and

(ii) if it were generally available, it might have a material effect on the price or value of those securities

77 Section 1002G(2) specified the consequences, in such a case, as follows:

The insider must not (whether as principal or agent):

(a) subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any such securities; or

(b) procure another person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities.

78 The expression “information”, and the circumstances in which information is to be taken to have been “generally available”, are themselves subjects of further definition.

79 In this regard, s 1002A(1) defines “Information”, for the purposes of the offence, to include:

(a) matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; and
(b) matters relating to the intentions, or the likely intentions, of a person.

80 Section 1002B(2) provides that “information” is to be taken as having been “generally available” if:

(i) it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in securities of bodies corporate of a kind whose price or value might be affected by the information; and

81 Section 1002B(3) provides, additionally:

Information is also generally available if it consists of deductions, conclusions or inferences made or drawn from either or both of the following:

82 In terms of the price sensitive component of the offence, section 1002C of the Act provides:

83 The offence with which the appellant was charged accordingly contained the following five elements, each of which the prosecution needed to establish beyond reasonable doubt:

84 It is convenient to summarise the competing cases of the Crown and the defence in relation to those elements:

(a) The Procurement by the Appellant of the Purchase of the Shares Element

85 There was no issue as to this element.

(b) The Possession of the Information Element

86 The Crown case relied upon:

(i) the evidence of Mr McGowan, that he had said to the appellant that he was currently merging his business with Qantas, and was awaiting ACCC approval for the transaction, and that he believed that such approval would be forthcoming;

(ii) the fact that although the deal was perhaps not a merger in the strict legal sense, nevertheless it was a merger in the practical sense of combining two businesses into one, and was referred to as a “contractual merger” in the letter which was sent to the ACCC.

(iii) the background against which the conversation occurred;

(iv) the fact that Mr McGowan had been advised by legal counsel that if anyone was made aware of the dealings between the companies, it was his obligation to warn them not to trade in Qantas shares;

(v) the fact that Mr McGowan’s account was generally supported by the evidence of Mark McGowan and of Mr Dassakis;

87 The appellant’s case on this issue relied upon:

(i) a submission that Mr McGowan could not be believed as a witness of the truth because of the lies that he had told to journalists, and in relation to Impulse’s financial statements;

(ii) the fact that neither Mark McGowan nor Mr Dassakis gave evidence of Mr McGowan saying that he believed ACCC approval would be forthcoming;

(iii) the fact that Mr McGowan did not say, in his evidence, that he had a concluded deal;

(iv) a submission that the actual transaction could not accurately be described in law as a merger;

(v) a submission that Mr McGowan may have had three possible motives to lie, two of which (concern that he had broken a promise to keep the information confidential or that he had himself been in breach of the Act) related to the alleged warning, and the third of which was attributable to revenge when the house contract was terminated;

(vi) the fact that there was not a coincidence of evidence between Gerard McGowan, Mark McGowan and Mr Dassakis;

(c) The “not generally available” element

88 The Crown case relied upon the following:

(i) the absence of any information in press reports and releases concerning the negotiations and possible transaction;

(ii) the absence of the information in analyst’s reports;

(iii) the absence of any mention of it in the Rivkin Report of 23 April 2001;

(iv) the fact that the price of Qantas shares increased on the day on which the Australian Financial Review website article appeared and on which the information was published and made public;

(v) the confidentiality of the negotiations between Qantas and Impulse;

(vi) the evidence of Mr Sellars-Jones, and of Mr Gresham, who each said that he was not aware of any information, as at 24 April 2001, from which he could conclude, deduce or infer that there was a deal pending for the merger of Impulse with the business of Qantas; and also

89 The appellant relied on the following:

(i) the fact that Gerard McGowan had informed representatives of Impulse’s institutional shareholders of the potential deal with Qantas;

(ii) the fact that the information about the potential deal had been made available to a number of advisers who had been engaged in the negotiations and documentation;

(iii) the existence of rumours in the press concerning the possibility of one airline doing a deal with another airline and also concerning Impulse’s possible collapse;

(iv) the fact that Gerard McGowan had not acted as if the information about the potential deal was confidential, having regard to the fact he had been content to convey information about it, in the presence of others, including a real estate agent and an employee of the appellant in the course of his negotiations for the purchase of a house;

(d) The element of materiality

90 For this element at trial the Crown relied upon:

(i) evidence concerning the price war, and the effect that this was having on the profitability and share price of Qantas;

(ii) the fact that, as a matter of commonsense, the prospect of the Impulse business merging with Qantas would be positive news for Qantas investors and the evidence of Mr Littlewood to similar effect;

(iii) the expert opinion of Mr Sellars-Jones that the information would be likely to influence persons in deciding whether to buy or sell Qantas shares; and

91 It was the appellant’s case, on this issue, that:

(i) a reasonable person would not have expected the information to have had a material effect on the price or value of shares in Qantas;

(ii) Mr Humphris was correct in his opinion that the information would not have influenced investors in deciding whether to buy or sell Qantas shares;

(iii) the content of the information was uncertain and indefinite;

(iv) an investor would have regarded the information to be unreliable; and

(v) it was already generally known that the price war between the airlines was not maintainable and would soon cease as a result of a merger between Qantas and one of the other airlines.

(e) The mental element

92 In order to prove this element the Crown relied upon:

(i) the context in which the appellant came to possess the information, including the warning not to trade in Qantas shares;

(ii) the fact that the appellant was a very experienced stockbroker and investment adviser;

(iii) the timing of the instruction to purchase the shares, having been given on the same day as the telephone conversation; and

93 The appellant’s case on this issue was that, having regard to all of the circumstances, including the Sydney Morning Herald article, the fact that the appellant had not believed Gerard McGowan, and had not believed that any deals that were done, he could not reasonably have been expected to have known that the information possessed the necessary quality.

94 It was accepted by the parties that the “ought reasonably to know” limb of this element remains one that is subjective to the appellant, having regard to all of the relevant circumstances, including the appellant’s mental state at the time: Boughey v The Queen (1986) 161 CLR 10 at 28-29, and the appeal may properly be approached on this basis.

C. THE GROUNDS OF APPEAL AGAINST CONVICTION

Ground 1 – Apprehended Bias: There was a miscarriage of justice because there were grounds for apprehension that the trial judge was biased as a result of his previously having acted as a barrister for the accused and in that capacity having received potentially prejudicial information about the accused.

95 There were in fact two ways in which bias of the trial judge was raised during the trial as the basis for a submission that there was a miscarriage of justice.

96 The first, being the subject of this ground of appeal was to the effect that having acted, while counsel, in relation to proceedings in the Licensing Court for the confirmation of the provisional transfer of a licence for a restaurant in Kings Cross, the trial judge received confidential information in relation to the appellant, or, more particularly, in relation to his association with the proposed transferee, which may have reflected on his character and credibility.

97 The precise consequences of that submission were not developed to any extent, it being unclear whether it is now asserted that the trial judge should have disqualified himself, or whether it is suggested that there was a carry over which affected the sentencing decision. What is, however, clear, is that Mr Ellicott QC expressly developed this submission as one involving ostensible bias, rather than actual bias.

98 The second way in which bias arose directly concerned the sentencing proceedings, and related to his Honour’s finding that the appellant had displayed “contemptuous arrogance” in relation to the offence.

99 This was said to have demonstrated a “personal animosity or dislike”, on the part of the trial judge, for the appellant. Although senior counsel seemed reluctant to embrace, as a positive proposition, that this amounted to an allegation of actual bias, he persisted with it upon the basis asserted, that is, as a personal animosity, which went beyond the assessment involved in a simple finding that was adverse to the appellant upon the issues of contrition and remorse.

100 It was, however, made clear, in the submissions, that there was no suggestion that the alleged personal dislike had arisen by reference to any matter extraneous to the proceedings. Rather, it was put that in the course of, and in relation to the way in which the appellant had conducted himself concerning the proceedings, his Honour had formed an adverse view of him, which then affected his judgment in relation to the sentencing proceedings. So understood, there does not seem to have been any crossover between the two grounds, and they can be considered separately.

101 The facts giving rise to the first ground may be briefly noted. In 1998 an application was lodged for the transfer of the licence of the Jirocho Cathay Japanese and Chinese Restaurant at Kings Cross (of which the appellant was the freehold owner in possession), from the current licensee, Gordon Wood to Joe Elcham. Mr Wood had, at that time, disappeared, and Mr Elcham had an association with the appellant in various businesses that he owned, including a nightclub in Double Bay, and The Cove nightclub in the Sydney Casino.

102 During 1997 the Casino Control Authority of New South Wales had ruled that Mr Elcham was not a fit and proper person to manage the Cove nightclub, and there was an ongoing investigation by the Authority in relation to him. He had been interviewed by the Licensing Enforcement Agency on 29 July 1998 in relation to his own activities and his relationship with the appellant.

103 In addition there had been an article published in the Business Review Weekly on 6 July 1998 concerning the appellant, his business interests, and his associations with various people, some of whom were "colourful characters", including Mr Elcham.

104 These circumstances had given rise to concerns as to whether they might present a hurdle in relation to the transfer of the licence for the Kings Cross restaurant, or in relation to the licence for the Double Bay nightclub. As a result, Mr Gallagher of T E Rummery Partners, who acted for the appellant in relation to licensing matters (but not in relation to the insider trading charges) briefed Mr Whealy QC (as he then was) to appear in the Licensing Court, in case the application became contested. A conference was conducted for that purpose with Mr Elcham, in which he discussed with Mr Whealy QC the matters outlined above, and supplied some information as to his business relationship with the appellant.

105 Counsel was briefed with copies of the Business Review Weekly article, the LEA interview transcript, the application documents, and some correspondence from the Director of Liquor and Gaming, which made reference to the ongoing probity checks, and to the fact of the Casino Control Authority investigation.

106 On 8 September 1998 Mr Whealy QC (as he then was) appeared in the Licensing Court for Mr Elcham, as transferee. After being informed by the solicitor appearing for the Director that the application was not opposed, it was granted by Magistrate Collins, who observed that, in the event of the ongoing probity investigations being unfavourable, any concerns in relation to the licensecould be brought back to the Court by the Director. As a result there was no need for any hearing or determination to be made concerning the probity of Mr Elchamor of the appellant.

107 The fees of counsel were paid by Mr Elcham, and he subsequently received reimbursement from the appellant. Mr Elcham said that he had not brought it to the appellant’s attention in relation to the insider trading charges, that the trial judge had previously acted in his interests in the licensing proceedings. Nor, it would appear, had the solicitors or counsel appearing for the appellant in the proceedings before Whealy J been aware of that fact, or of the fact that, following the successful transfer of the liquor licence, the solicitor acting in those proceedings had twice spoken to counsel in relation to the Double Bay nightclub license. As events turned out counsel was not needed for any hearing concerning that license, as it was approved without opposition.

108 It may be accepted that a judge should disclose any facts which might reasonably lead a party to request disqualification (Aussie Airlines Pty Limited v Australian Airlines Pty Limited & Qantas Airlines Limited (1996) 65 FCR 215 at 221; Dovade Pty Limited v Westpac Banking Group (1999) 46 NSWLR 168 at 191-2); and that the failure to do so can be one of the circumstances which, along with others, can give rise to a reasonable apprehension of bias.

109 In that respect the test for disqualification is whether a fair-minded lay observer might reasonably apprehend that the judge may not bring an impartial and unprejudiced mind to the resolution of the question which falls for determination: Johnson v Johnson (2000) 201 CLR 488 (at para 11); R v Maxwell NSWCCA 23 December 1998 and Ebner v Official Trustee (2000) 205 CLR 337.

110 While the test is one of possibility rather than probability, the determination of the relevant question by reference to the impression of a "fair minded lay observer", which involves an objective test, is an important consideration.

111 As was made clear in Webb & Hay v The Queen (1994) 181 CLR 41 (at 52) it is the Court's assessment of the public view, and not its own view, that is determinative. Further, the court must be satisfied that the test is met, not that it might be met: Builders’ Registration Board of Queensland v Rauber (1983) 57 ALJR 376 at 384 per Brennan J. Moreover the element of reasonableness needs to be stressed: Laws v Australian Broadcasting Commission (1990) 170 CLR 70.

112 The criterion for disqualification for bias has been strictly applied, as the following decisions indicate: Dovade;Barbosa v Di Meglio [1999] NSWCA 307 and Kremer v Schwartz [2003] NSWCA 86.

113 It is not the case that a previous professional association between a party and a legal practitioner, who later becomes a judge, will inevitably lead to disqualification. Much depends on the nature and length of any prior professional association, and also upon whether or not the judge may have acquired a particular knowledge concerning the former client, which might give rise to the apprehension of which the test speaks.

114 In Re Polites (1991) 100 ALR 634 at 641, the High Court (Brennan, Gaudron, and McHugh JJ) observed:

“A prior relationship of legal adviser and client does not generally disqualify the former adviser, on becoming a member of a tribunal (or of a court, for that matter), from sitting in proceedings before that tribunal (or court) to which the former client is a party. Of course, if the correctness or appropriateness of advice given to the client is a live issue for determination by the tribunal (or court), the erstwhile legal adviser should not sit. A fortiori , if the advice has gone beyond an exposition of the law and advises the adoption of a course of conduct to advance the client’s interests, the erstwhile legal adviser should not sit in a proceeding in which it is necessary to decide whether the course of conduct taken by the client was legally effective or was wise, reasonable or appropriate. If the erstwhile legal adviser were to sit in a proceeding in which the quality of his or her advice is in issue, there would be reasonable grounds for apprehending that he or she might not bring an impartial and unprejudiced mind to the resolution of the issue. Much depends on the nature of his or her relationship with the client, the ambit of the advice given and the issues falling for determination.”

115 In the instant case, the prior association was brief, and much, if not all, of the information provided was already in the public domain. The judge did not have any direct dealings with the appellant, and the facts or materials that were of relevance for the proceedings in the Licensing Court, which were principally concerned with Mr Elcham’s reputation, were totally unrelated to the issues that arose for consideration in the insider trading prosecution. Further, the factual issues in relation to guilt fell for decision by the jury, rather than by his Honour, whose sole concern with the facts related to sentencing.

116 We are not persuaded in these circumstances that a fair-minded lay observer might reasonably have apprehended that Whealy J might not bring an impartial and unprejudiced mind to the resolution of any question, whether factual or legal, which he had to decide.

117 The second aspect of bias, which is relevant for the sentencing exercise, arises only by reference to the assessment made by his Honour as to the appellant's lack of contrition and remorse. The submission as to the existence of some personal animosity or dislike, based upon the factual findings which were made in the course of a sentencing exercise, is in our view completely unsustainable.

118 It is an essential step, in the fact-finding exercise required for sentencing, that judges form conclusions as to subjective criminality, and as to remorse and contrition. The mere fact that the finding is adverse cannot, of itself, justify an inference of bias. The description of the appellant's attitude to the offence as "contemptuous" did not involve any hyperbole; nor did the reasons for sentence descend into an extravagant condemnation of his misconduct.

119 There is, in any event, a tension between this aspect of the argument and the submissions that were otherwise advanced, concerning the suggested link between the appellant's brain tumour and his behaviour. The submission that his behaviour during the trial, and subsequently, was dismissive of the seriousness of the matter would appear to involve a concession that his Honour's assessment was one that was available upon the evidence.

120 We are quite unpersuaded that his Honour displayed actual or ostensible bias at any point of the trial, whether in relation to this aspect of sentencing or otherwise.

121 In fact, a fair reading of the transcript shows that his Honour behaved with absolute fairness and courtesy throughout the trial, and the somewhat hedging submissions, which were directed in relation to the second aspect of the argument were, in our view, entirely unwarranted.

122 No miscarriage of justice has been shown on this account.

GROUNDS 2 TO 4 INCLUSIVE RELATING TO THE WAY THE CROWN PARTICULARISED THE INFORMATION:

123 The relevant grounds were formulated as follows:

Corporations Act.

3. Further, or in the alternative to ground 1, there was an error of law or a miscarriage of justice as a result of the way that the Crown particularised the Information because, whilst the information was particularised as being that Mr McGowan said certain things:

(a) in fact and in substance the Crown presented its case on the basis that the Information was the information that was allegedly conveyed by Mr McGowan, not that Mr McGowan said certain things;

(b) the trial judge permitted the Crown to lead evidence and cross-examine defence witnesses (in particular Humphris) on the basis that the relevant information was the substance of what Mr McGowan allegedly said and not merely that he said it.

(c) in parts of his summing up, the trial judge treated the Information as being the information conveyed by Mr McGowan, not that Mr McGowan said certain things.

4. Further, or in the alternative to grounds 1 and 2, there was an error of law or miscarriage of justice arising from the way in which the Crown particularised the Information because:

(a) the trial judge erroneously permitted the Crown to ask questions of Crown witnesses (in particular Mr Sellars-Jones) and cross-examine defence witnesses (in particular Mr Humphris) on the basis that Mr McGowan was the source of the Information;

(b) in his summing up, the trial judge repeatedly and erroneously referred to Mr McGowan as being the source of the Information;

which, in circumstances where the Information was that Mr McGowan said certain things, was misleading and confusing for the jury.”

124 These grounds rely upon the simple proposition, based upon the particulars, that the information in question was that “Mr McGowan had said that” a particular state of affairs existed or that he had a particular belief, rather than the state of affairs or the belief itself. The relevant submission was specifically raised at the trial, in the context of the application for a verdict by direction, which was dismissed by his Honour, and is repeated in relation to ground 5, which we will deal with separately.

125 It may be accepted that the particulars of the information, which it is alleged were possessed by the appellant, are a critical aspect of the Crown case, and for the conduct of a fair trial: R v Hannes (2000) 158 FLR 359 at para 27 per Spigelman CJ. It is the particularised information that has to be shown to satisfy the elements of the offence, and that sets the ambit for the evidence that is properly admissible.

126 The explanatory memorandum to the Corporations Legislation Amendment Bill 1991 and the terms of s 1002A itself, make it clear that the Information does not need to be “specific”. In Commissioner for Corporate Affairs v Green [1978] VR 505, which was concerned with s124(2) of the Companies Act 1961 (Vic), and which similarly did not require the information to be "specific", McInerney J (at 511) rejected a submission that it meant "factual knowledge of a concrete kind, not rumour, possibility or speculative suggestion nor information of a kind that is preliminary or uncertain".

127 In Hooker Investments Pty Limited v Baring Bros Halkerston and Partners SecuritiesLimited (1986) 10 ACLR 462, Young J gave consideration to the meaning of "information" in s 128 of the Securities Industry Code, the successor to section 75A of the Securities Industry Act, which did not require the information to be "specific", observing (at 467/8) that the definition given to “information” by McInerney J in Green came close to that which should be adopted, that is:

"the factual knowledge either of a concrete kind or that obtained by means of a hint or veiled suggestion from which one can impute other knowledge. I wonder a bit, however, whether it is safe to equate information and knowledge. Information is often defined as knowledge acquired, derived or inculcated by observation, reading or study or by what one is told; but in some cases information implies lack of knowledge such as, for instance, where one says he is informed of a thing but he does not know whether or not his information is true: see State v Simpson 118 SW 1187 at 1188.

To my mind information in sub-s(1) goes further than knowledge and includes the situation where someone has been informed of something which he does not know to be true nor does he care whether it is true or not. In other words, information may include a rumour that something has happened with respect to a company which a person neither believes nor disbelieves."

128 The distinction which it is suggested was drawn by Young J in this passage between information and knowledge, and the means by which knowledge is acquired, were relied upon in support of the proposition that information or knowledge does not extend to the means of its communication. Upon that basis it was submitted that “information” for the purposes of the section "could not be that someone said something", and that as a result, the Crown case failed in limine. It was further submitted that the Crown departed from its particulars so far as it presented its case upon the basis and, in particular, put to the witnesses, who were qualified as experts, that the “information” was the state of affairs communicated and not the communication itself (that is that Mr McGowan “had said something”).

129 Bad faith was asserted in so far as it was argued that the choice of the particulars was "considered and deliberate and made with an obvious (and illegitimate) forensic purpose", namely, with knowledge that Mr McGowan's credit would be strenuously attacked on the basis that the statements which he allegedly made were false. The Crown, it was submitted, deliberately took this course in order to avoid the argument that a false statement could not be "information", by the response that the Information was the fact that Mr McGowan had said something, rather than the underlying facts supposedly communicated.

130 Further, it was asserted that there was an unfairness in the way in which the Crown case was presented and summed up, to the effect that the fact that Mr McGowan had made the relevant statements increased their reliability, in the absence of an express particular concerning the office which he held in Impulse. In this respect reference was made to the fact that his Honour, in his summing up, said, inter alia, that the jury would or should assume that the "hypothetical investor" would be "taken to know that Gerard McGowan was, at 24 April 2001, the Executive Chairman of Impulse Airways and that, as Executive Chairman he would have the means of knowing about and would be expected to know about, the existence of any deal between Impulse and Qantas." This was said to amount to an unauthorised addition to the particulars that was made after the defence address.

131 In our view these are arguments of the most technical kind that are entirely lacking in merit. Equally we are persuaded that the allegation of bad faith should be rejected out of hand. We see no reason why the information should not, in addition to any underlying facts stated, identify the person who made the relevant statements. What the appellant was in possession of was the state of affairs described and its source.

132 That his Honour reached a similar conclusion is evident from his rejection of the submission that the information, as particularised, could not be "information" for the purposes of the section for two reasons: first, that the "inclusive definition of information and the definition itself are very wide"; and secondly, that "the source of the information is capable of having a significant impact on price sensitivity". The imputation of bad faith fails once it is appreciated that the information included the source and the state of affairs communicated. Similarly the argument that the particulars should have included an express reference to Mr McGowan's position in Impulse has no weight since the hypothetical reasonable investor would be taken to have been aware of his office.

133 It is true that, when summing up to the jury on the materiality element, his Honour said that it had to be considered as having been received in a neutral way, that is, without reference to its source having been Mr McGowan. The asserted unfairness in relation to this aspect of the case is dealt with later in these reasons, in relation to grounds 16 and 17. It is sufficient to observe at this stage, for the reasons there stated, that we see no unfairness in this regard. The distinction which the appellant sought to draw in support of these grounds was in our view a distinction without a difference.

134 We also do not accept, in this respect, the argument that information of there in fact being a deal, would be more certain, reliable or material than information that "someone said" that there was a deal, since the former still had to be communicated from "someone". Its potential reliability depends upon its source, and that was a point upon which the experts seem to have been in general agreement.

135 We are unable to accept the even more technical objection that it was confusing for the Crown to have asked questions of the expert witnesses, and for his Honour to have summed up, on the basis that Mr McGowan was the "source of the information". He clearly was the provider of the information and that is precisely what the particulars sought to show.

136 The particulars served the purpose of identifying a conversation in which the Information was communicated to the appellant, and what was said to him by Mr McGowan. The Crown did not deviate from the particulars in seeking to rely upon any other communications, and for all intents and purposes, Mr McGowan’s statement that he was merging the Impulse business with Qantas was the same as saying that there was a deal. Clearly in both the particulars and in the appellant's evidence it was described as a transaction that was still conditional, and was one that would effectively result in Impulse no longer being a competitor of Qantas.

137 It was also abundantly clear that the circumstance that Mr McGowan was the source was relevant to the question of the reliability of the information, and hence its materiality. In short, the state of affairs communicated was relevant and the source was relevant.

138 It was properly open to the Crown, in our view, to lead evidence, to cross-examine witnesses, and to make submissions upon the basis that the information included the source as well as the state of affairs communicated.

139 Finally we would reject the argument that was developed during the hearing of the appeal, that information can only be "information" for the purposes of the section if it is received by the person charged under "an obligation of confidence". There is no warrant in the legislation for imposing such a condition upon the recipient of such information. His or her obligation begins and ends with the restrictions on its use, which are expressly laid down in the Act.

140 These grounds have not been made good.

Ground 5 - insufficient evidence that the appellant possessed the information particularised

141 This ground was formulated as follows:

142 In substance, it was submitted that the evidence led did not support the particulars given of the information, and that the manner in which the case was presented involved a latent duplicity.

143 In support of this ground, it was submitted that Mr McGowan's evidence to the effect that "I am currently merging" Impulse's business with Qantas, differed from the information particularised, which was to the effect that "there was a deal for the merging of "Impulse's business with Qantas."

144 Mr McGowan’s version, in cross-examination, was to the effect that "we are looking to merge or sell part of our business to Qantas". It was argued that his acceptance that he used the word "negotiating" differed from the version given in chief, and from the particulars.

145 The appellant contended that the objective evidence established that there was no "deal", let alone a completed or "done" deal, at the time of the conversation; at most, there were negotiations. It followed, so it was submitted, that the information that the Crown particularised, did not exist (or on another version of the submissions was untrue), and could not have been communicated to the appellant.

146 The Crown's response, that the substance and effect of Mr McGowan's evidence was in accordance with the particulars, was challenged by the appellant upon the basis that there is a difference of significance between saying that there is a "deal", and that there are "negotiations for a deal". In that regard reference was made to the evidence of both Mr Sellar-Jones and Mr Humphris, to the effect that a statement that there were "negotiations" would be expected to have a substantially different impact on the actions of a reasonable investor, than a statement that there was a "deal", a proposition which his Honour accepted in the reasons given in rejecting the application for a directed verdict.

147 In his reasons, his Honour said:

148 His Honour, it was submitted, did not, in this paragraph recognise that there was a difference of substance between "negotiating a deal" and a "deal"; and did not give the jury the direction, which should have been given, to the effect that, if they found that it was reasonably possible that Mr McGowan had said that he was negotiating a deal, then they might, or should, have had a reasonable doubt as to the possession element, as well as the materiality and mental elements.

149 In that regard, it was further submitted that his Honour erred in regarding the role of particulars as being confined to providing amplification of "the accused’s knowledge of the specific offence charged", and in considering that it was not necessary for the jury to be informed of the particulars, since they formed "no part of the issues" (by which we take his Honour to have meant the evidence), and would provide an unnecessary and inappropriate distraction.

150 Finally, in relation to this ground it was submitted that, in the way that his Honour viewed the charge, it involved a latent duplicity of the kind considered in Johnson v Miller (1937) 59 CLR 467 and S v The Queen (1989) 168 CLR 266 at 274 - 276.

151 In particular reference was made to the observations of Dixon J (as he then was) in Johnson v Miller (at 489):

152 The present case was likened, in this submission, so far as there were said to be different versions of the conversation, to the problem that arose in Johnson v Miller. That case involved a charge for an alleged breach of the licensing laws, in circumstances where thirty men were seen to depart the premises during prohibited hours, and where the Crown refused to nominate which of those persons was the one intended to be relied upon for the purposes of the single offence charged. S v The Queen involved evidence that had been led by the Crown of numerous acts that may have amounted to the charges of carnal knowledge proferred, each of which occurred during the period charged, without the Crown being required to nominate which of the several events was the act charged.

153 Gaudron and McHugh JJ, in S v The Queen, said (at 287 - 288):

382 Since the Evidence Act does not apply to sentencing proceedings, s 102 also would not apply to prevent the evidence being called, so far as it may have been relevant only for credibility considerations.

383 It was submitted that his Honour erred in so far as he specifically found, contrary to the submissions that were advanced, that the appellant should be sentenced upon the basis that he had actually known, as distinct from "ought reasonably to have known", that the information possessed the qualities of being not generally available and price sensitive; and also in so far as he found that the appellant caused the purchase order to be placed because, or as a result of, his possession of that information.

384 While it was necessary for those facts to be found beyond reasonable doubt (Olbrich v The Queen (1999) 199 CLR 270 and Weininger v The Queen (2003) 196 ALR 451, [2003] HCA 14) they were obviously capable of being established by circumstantial proof.

385 It is evident from his Honour's reasons that the important considerations for these findings were the circumstances that the purchase was made on the same day as the conversation with Mr McGowan, that Mr McGowan had warned him that he was not free to trade in Qantas shares, that the Rivkin Report on the preceding day had not encouraged any purchase in the Qantas shares, that the subject transaction was by far the largest of the three trades made by Rivkin Investments on 24 April, and that the jury and his Honour each rejected the appellant's evidence that he had not believed that a deal was being negotiated between Qantas and Impulse.

386 Each of these findings was properly open on the evidence led in the trial, and we are not persuaded that the appellant's submissions to the contrary require any different conclusion. They may be briefly mentioned.

387 The fact that the shares were purchased openly through Rivkin Discount Stockbroking, and in the name of Rivkin Investments, that they were sold before the information became public, and that the appellant was a person of previous good character, does not require any different conclusion. The possibility of detection was strong, no matter how the purchase was made, and the shares were sold immediately after the price slipped from the point to which they had sharply risen. It is true that they rose again, immediately before their temporary suspension, and then rose again after the joint announcement, at the resumption of trading. By then, however, Rivkin Investments had made a profitable trade, and to that extent the information, which the appellant had acquired, had been used to his advantage.

388 Complaint was made in this context that the Prosecution had not directly challenged, in cross-examination, the appellant's account that he had read the Sydney Morning Herald, or that he had disbelieved Mr McGowan. Additionally, it was submitted that the Crown had not put to him that the information, which he had received, was an important factor, or indeed any factor, in the purchase of the shares. There was no obligation, in our view, for either matter to have been expressly put in cross-examination. It was no part of the defence case that the conversation had occurred in the terms described by Mr McGowan. Rather, there was a specific denial of Mr McGowan's account, and an assertion that the appellant had not believed the version which he had attributed to Mr McGowan. The defence could not have been taken by surprise in the respects suggested, and the absence of cross-examination did not, in our view, preclude the findings that were made, or occasion any unfairness to the appellant.

389 It was also put, in the context of this submission, that the questions which were asked by the jury during the second day of their deliberations, invited the conclusion that "in all probability" they concluded that the appellant "ought reasonably to have known" that the information possessed the relevant qualities, as distinct from having had actual knowledge of that fact. There is a fundamental problem with this submission, which, in any event, is highly speculative, in that it was for his Honour to find the facts, subject only to them being consistent with the jury verdict: Kingswell v The Queen (1985) 159 CLR 264 at 276.

390 Further, it was submitted that there were two specific errors in the way in which his Honour approached the case that led the sentencing discretion to miscarry. They involved contentions that:

(a) his Honour was preoccupied by the appellant's public persona and status in the stockbroking industry, and sentenced him on the basis of who he was, rather than what he had done; and that

391 In relation to the first of these propositions, reference was made to the fact that, after noting the importance of the element of general deterrence when sentencing offenders in relation to "white-collar" crimes, and also noting the capacity of insider trading to undermine and to diminish confidence in the market, his Honour had said:

"This is likely to be particularly so in the case of an offender who occupies a substantial position as a trader and advisor in the market.

3. It is especially important that the sentencing process provide a firm disincentive to the carrying out of illegal activities especially by those who are engaged in the securities industry. There is a need to sound, in effect, a clarion call to discourage illegal and unethical behaviour among company directors, company officers, brokers, traders, advisors and those who have close connection through, for example, merchant banking, to the stock market."

392 Attention was then drawn to the fact that, after noting that the present case was “by no means the most serious or even a very bad case of insider trading", his Honour had, nevertheless, continued:

"48. Notwithstanding all these matters which tend to reduce the seriousness of the offence in a number of respects towards the lower end of the range, there are nevertheless some serious aspects to the circumstances of the offence. First and foremost, the offender is a most experienced stockbroker and trader on the stock market...

393 It was submitted that, in these passages, his Honour had overlooked the fact that the appellant's role in the securities industry had played no part in the commission of the offence, which had occurred only when the information alleged had been received as an unexpected side wind, and had then only been used because Mr Kerstens had mentioned the possibility of an investment.

394 In those circumstances, this submission continued, the case was not one that was an appropriate vehicle for a sentence that would send a "clarion call" to those engaged in the industry, that is, one which would serve the purpose of general deterrence.

395 It was submitted that, in fact, the appellant's position in the securities industry had been an entirely irrelevant consideration, and that by giving that aspect, and the consideration of general deterrence any weight, let alone considerable weight, the sentencing exercise had miscarried. In that regard, it was contended that the decisions, where general deterrence had been regarded as an important aspect of the sentencing exercise, were confined to cases where the offence involved a significant breach of trust and/or latent dishonesty or sophisticated fraud: for example, R v Pantano (1990) 49 A Crim R 328 at 330; and R v Hawker [2001] NSWCCA 148 at paras 23 and 24.

396 Additionally, it was submitted that error arose, in so far as his Honour considered it necessary that the sentence should involve an element of personal deterrence, in so far as he accepted that, as a result of the expense, public disgrace and public humiliation involved in the conviction, and the possible adverse impact on the appellant's ability to trade on the stock market in the future, it would "hardly be likely" that he would be tempted to contemplate the commission of a similar offence, and "extremely unlikely" that he would require any supervision or probation or conditional recognisance upon release from prison.

397 These observations, it was submitted, were inconsistent with so much of the reasons for sentence, as recorded that there was "a need for a sentence which carries with it the likelihood of a deterrent impact on [the appellant's] future conduct and which of itself is likely to ensure his rehabilitation so as to prevent any further delinquency in the area in which he has impermissibly and improperly acted."

398 It is evident that his Honour did not overstate the element of personal deterrence, in that he prefaced the passage in question by noting that the sentence to be imposed must, "to a degree", take into account that consideration, and explained the reason for it by reference to the fact that the appellant had not shown any contrition, and had refused to admit that he had been guilty of any wrongdoing. We cannot see any error, whatsoever, in that reasoning.

399 The submissions that his Honour entertained a personal dislike of the appellant, that this "coloured his approach" to the sentencing, that he was "jaundiced by extraneous considerations", that "he failed to approach the sentence with the dispassion required of a sentencing judge", and that he had been "personally affronted" by the appellant's behaviour and "took exception to him", are each lacking any factual basis. There is no support in the transcript of the proceedings, or in the reasons for sentence, to suggest that his Honour fell into any such error, and the observations which we made earlier, in relation to the bias submissions, apply.

400 It was necessary for his Honour to assess the appellant's objective and subjective criminality in the light of the evidence before him. The fact that the findings were adverse does not invite, let alone support, the inference that his Honour abandoned the neutrality expected of a sentencing judge. Nor is the fact that the appellant was found by his Honour to have been "a worthwhile person with an unblemished record" necessarily inconsistent with an unwillingness on the appellant’s part to accept the finding of guilt that led to the assessment of which complaint is made.

401 The evidence which was tendered in relation to the radio and television interviews, and in relation to the Rivkin Newsletter, in our view, support his Honour's assessment, and displace the character evidence which came from friends and associates, and which also depended upon the appellant's lengthy involvement in the securities industry.

402 Unfortunately people with good character do, from time to time, offend, particularly in the area of white-collar crime, and while their record is properly to be taken into account when they are sentenced, it does not excuse their criminality.

403 Nor does the imposition of sentence consequent upon a finding of guilt, in a case such as the present, mean, as the appellant submitted, that he was being punished "severely for being an individual with characteristics out of the ordinary but not necessarily dishonest".

404 It was similarly incorrect for the appellant to submit, as he did, that the finding of "contemptuous arrogance" carried with it an element of aggravation which led to an increase in the sentence which would otherwise have been imposed, or that the appellant was being punished, and had his sentence increased, because he had pleaded not guilty, and had continued to maintain his innocence.

405 His Honour made it abundantly clear that this was not the case, in the several passages in which he expressly stated that the fact that the appellant had pleaded not guilty, and had continued to maintain his innocence, "cannot lead to any increase in the sentence"; that "no aspect of the imposition of penalty is designed to punish the offender because he is, on occasions, an arrogant man or because he is 'different'; or as Mr Richardson described it, “a little odd on occasions"; that the statements he had made in the public arena "should be assessed as having no greater utility than assisting in a determination as to whether contrition had been shown"; and that "his attributes [of contempt and disdain for the jury's verdict], genuinely felt as they no doubt are [by the appellant] should not, and cannot play a role in increasing the penalty to be imposed".

406 The consequence of the relevant finding, was simply to deny to the appellant the benefit, on sentence, which a demonstration of contrition and remorse, and insight into the offence, would have attracted. Counsel for the appellant made it clear in his submissions to his Honour that the appellant, as was his entitlement, maintained his innocence, and that he did not make any claim to contrition or remorse. No evidence was offered from the appellant, on the appeal, to reveal any change of attitude in this respect, and as a consequence the impact, if any, upon his attitude prior to sentence, arising from his mental state and the tumour, cannot be called in aid.

407 It was in that vein that his Honour noted that Dr Fisher's report proffered "something of a false issue". He accepted that it may well be that some of the more flamboyant remarks made by the appellant "are properly attributable to a mild degree of hypomania", but noted the plain fact that he had not expressed contrition, that he continued to assert his innocence, and that Dr Fisher had not suggested that his public statements were not his true feelings. Although his Honour did not expressly refer to any contributing effect that the appellant's bipolar disorder might have had, precisely the same considerations apply, particularly in the absence of any evidence to suggest that such condition was not under control at the relevant time.

408 Even if these considerations went some of the way to explaining the appellant's attitude, there was nothing before his Honour, nor is there any evidence before us, to show that he should now be regarded as an offender who is demonstrating contrition for, or an understanding of, or insight into, his offending behaviour.

409 Next, it was submitted that the offence was insufficiently serious, objectively, to have attracted a sentence involving any form of imprisonment, in so far as:

(a) The appellant had not been a "true insider" in the sense of being an officer of either Impulse or Qantas, or of having been involved in the deal, or of being in a position of trust in relation to be information;

(b) The appellant had not come to possess the information in his capacity as a stockbroker, and had not sought it out;

(c) The contravention had not, in any sense, been premeditated by the appellant, but occurred on the spur of the moment, when Mr Kerstens telephoned him;

(d) The offence was victimless, in that there was no evidence that any of the sellers would not have sold, even if the appellant had not been in the market;

410 Subjectively, reliance was placed upon the appellant's position as a person of hitherto impeccable character and integrity, who had not been previously found to have transgressed any law regulating the securities industry, who had played a significant and active role in community and charity organisations, and who was well respected. His Honour did not overlook that circumstance, it being a matter specifically addressed in the reasons for sentence. However, the relevance of good character is of lesser significance for white-collar crimes, since it is that factor which normally places the offender in a position whereby he or she is able to commit the offence: R v El Rashid, NSWCCA 7 April 1995 per Gleeson CJ at 3.

411 It was also submitted that it was relevant to the sentencing exercise that, by reason of the conviction, the appellant had suffered disgrace and humiliation; that his wife and family would be affected by it; that he had lost the previous good standing which he had enjoyed in the community and in his profession, which would impact on his livelihood; that he would be disqualified from managing a corporation; and that ASIC might take action in relation to his security dealer’s license. There was said to be extra curial punishments, in respect of which insufficient weight had been given.

412 In fact, his Honour expressly made reference to each of these circumstances. While accepting that action taken in relation to his security dealers license might properly be regarded as "protective in character", he also observed that any adverse outcome concerning it would be a matter of "real practical punishment" so far as the appellant was concerned, and could properly be taken into account, along with the other matters, in the sentencing process. It is accordingly not the case that they were overlooked. Nor is it correct to describe the offence, of which the appellant was convicted, as "victimless". The victim of any such offence is the investing community at large, the injury being that related to the loss of confidence in the efficacy and integrity of the market in public securities: R v Hannes [2002] 173 FLR 1 per James J.

413 It was next submitted that, by comparison with all of the previous cases of insider trading in Australia noted in the summary provided, the present was by far the least serious of the contraventions that had been discovered and punished. It followed, so it was submitted, that having regard to the sentencing outcomes in those cases, the present sentence was manifestly excessive.

414 It is true that his Honour accepted that the present was by no means the most serious, or even a very bad case of insider trading, noting that the profit made was a modest one; that the applicant had not sought out the information, rather, it had been thrust upon him in circumstances not of his making, and in the course of a private negotiation relating to a sale of a house, rather than in his capacity as a stockbroker; that the purchase transaction was an open one that had not been concealed in any way; and that the shares were sold as soon as the market moved upward without the appellant waiting for the joint announcement, as he might have done, had he wished to achieve a greater profit.

415 It is not, however, the case that much benefit is ever gained by an attempt to draw a comparison with other sentences, having regard to the differences in the objective and subjective circumstances involved, and to the need for any such exercise to assume that the other decisions were correct, or are such as to provide effective guidance for later cases: R v Morgan (1993) 70 A Crim R 368; R v Salameh NSWCCA 9 June 1994 and R v Ellis (1993) 68 A Crim R 449.

416 In the present instance only four other cases were identified, two of which had been decided in District or County Courts (R v Hannes (supra); R v Williams DCNSW 4 October 1996; R v Teh CCVIC 2 September 1991; and R v Cribb NSWCCA 4 November 1994). As such, little is to be gained by reference to them, it being the responsibility of this Court to determine whether or not the sentence imposed fell within a proper exercise of sentencing discretion, by reference to its own facts.

417 Finally, it was submitted that the medical evidence led on sentence had missed the point entirely, and that, had the fresh evidence from Drs Teo and Langeluddecke been available, it would have shown that a custodial sentence was inappropriate. The evidence, it was submitted, would show that, at the time of the offence, the appellant's judgment was likely to have been affected by the tumour. Additionally, it was submitted that its reception would have negatived his Honour's assessment concerning his lack of contrition, and most likely would have caused his Honour to have entertained a reasonable doubt as to whether he had known that the information had the necessary qualities, and had traded in the shares upon the basis of it.

418 In these ways, it was argued, the fresh evidence would have constituted a significant mitigating factor on sentence.

419 These submissions involve a repetition of the arguments that we have already dealt with, and they are subject to the principles relating to the circumstances in which a Court of Appeal can intervene where new or fresh evidence is led.

420 This Court is a court of error, and it will not intervene merely because it considers that some sentence other than that imposed could have been imposed. It needs to be satisfied, before doing so, that a more lenient sentence was warranted in accordance with s 6 (3) of the Criminal Appeal Act 1912: R v Cocking [1999] NSWCCA 311.

421 The onus rests upon the applicant for leave to appeal against a sentence to demonstrate, either that there was a specific and identifiable error in the sentencing proceedings, or that the sentence was manifestly excessive or inappropriate, to the point where latent error must be assumed: R v Vachalec [1981] 1 NSWLR 351; Dinsdale v The Queen (2000) 202 CLR 321; and House v The King (1936) 55 CLR 499 at 504 to 505.

422 We are not persuaded, consistently with the limited scope for appellate review of the findings of fact that the appellant has shown that a sentence, other than that imposed, was warranted in law, and should have been passed.

423 The offence was serious, and it called for elements of personal and general deterrence for the reasons identified by his Honour; and also for the reasons identified by Spigelman CJ in Hannes at [394], and in R v Pantano (1990) 49 A Crim R 328 at 330, relating to the difficulty of detection of white-collar crimes. While it is true that the appellant received the information in circumstances where it was volunteered and unexpected, and was offered in circumstances unrelated to his activities in the securities industry, nevertheless, he occupied a position in which he was able to use it, and he then proceeded to order a purchase, even though he must have known, by reason of his extensive experience as a stockbroker, share trader, investment manager and adviser, that he was not free to do so, and even though he had been specifically warned that he could not trade in the shares. For that reason, the submission that the appellant's occupation and role in the stock market were irrelevant considerations is incorrect.

424 The sentence imposed was not, in our view, excessive, given the need for adequate punishment and deterrence (s 16 A (2) Crimes Act (Cth) 1914), and having regard also to the maximum available sentence of imprisonment for 5 years and/or a fine of $200,000. Moreover, we do not consider that there was any reason for the making of a recognisance release order.

425 Most certainly it did not merit the somewhat exaggerated submission of counsel for the appellant that it was a sentence that "borders on cruelty". That submission was as uncompelling as the following additional submission, which was addressed by senior counsel during the hearing:

“What is imposed is a weekly detention over nine months, 36 weekends my client would have to get in his car, no doubt driven by his chauffeur, and go to the Silverwater detention centre.

Now, if one wants to destroy this man that is something that would, we would submit, on the face of it - and I know I am not suggesting for one moment that the judge was biased, I make that quite clear - but there is a degree of inhumanity to the man in that proposition. How much does one have to punish a person. Do you have to reduce them to such a degree that they are to feel humiliated and rejected by society? Different people, different situations.
My client is a very different person and he has got a very different history to most, he is unique, and the sentencing in this case should not be to destroy him and we would submit that if one thinks for a while about the effect of nine months of weekend detention, this is all apart from the medical evidence, it is not difficult to come to the conclusion that this is a humiliation that should not be visited upon him."

426 It is not the case that an offender who comes from a privileged background, or who occupies a significant position in commerce or society can hope to escape a custodial sentence, where that is appropriate for the offence, simply because it may be humiliating or embarrassing. Equality before the law does not permit any such proposition, and the submission extracted is ill-founded in principle. Moreover, neither the sentencing Judge, nor this Court, can permit themselves to be swayed by popular expressions of opinion, whether in the media or otherwise, as to whether a particular offender should or should not receive a custodial sentence.

427 From time to time judges explain sentences by reference to their perception of community attitudes. Sentencing does not occur in a vacuum, but a sentencing tribunal must apply the relevant statutory and common law principles. These provide the points of focus through which the task must be addressed independently, fearlessly, with due proportion and (at times) an informed sense of mercy.

428 A sentencing court must strive to avoid being influenced by a “sense of outrage” stemming from foreign sources. The outraged sense of innocence expressed by a person who has been duly convicted cannot reduce an otherwise appropriate sentence. Nor, on the other hand, can “the community’s” sense of outrage expressed through the media lead to a harsher sentence than is otherwise appropriate according to the law.

429 Since his conviction, the appellant has been the object of sustained media attention. Much of that coverage has been openly critical of him; or overtly hostile towards him; or merely derisory of him. It would be disingenuous, to say the very least, to close one’s eyes to the tendency of that type of coverage to spawn an outrage which is informed by matters going beyond legal principle.

430 In those circumstances, the best that any sentencing Court can do is to apply the law fairly according to the particular circumstances of the particular case, and influenced only by the evidence in the particular case. If that is done with a proper clarity; and if what has been thus done is reported truthfully, and commented upon fairly, then there should be no need for concern about the reaction of reasonable members of the general community. Principled justice is not likely to be advanced by any attempt, necessarily futile, to identify whether “the community generally” has, or might have, or might be influenced by the media to have, this or that opinion; let alone to evaluate reliably any such supposed opinion.

431 We have given careful consideration to the question whether the sentence should have been suspended, and made conditional upon the applicant's good behaviour. We have however reached the view that the offence was too serious to warrant a suspension of the sentence, which we consider to have been appropriate for the case.

432 The learned sentencing judge specifically addressed each of the provisions of the Crimes Act (Cth) 1914 relevant to the sentencing exercise, in particular s17A (Restriction on Imposing Sentences) and s20AB (Additional Sentencing Alternatives). He concluded that, in the circumstances of this matter, no sentence was appropriate other than one of imprisonment (see esp pars [57]-[62]). We discern no error in his Honour’s approach to these issues or in his conclusion as to a custodial component.

433 Periodic detention is, on any view, a less harsh sentence than one involving full term detention, as has been authoritatively accepted: R v Hallocoglu (1992) 29 NSWLR 67.

434 Moreover, the fresh evidence placed before us does not go so far as to show that the appellant's medical or mental state would prevent him from serving a sentence of periodic detention, or render its service more harsh than normal. There is no reason to suppose that he could not be appropriately managed within the correctional system, at an appropriate detention centre.

435 We would grant leave to appeal against the sentence, but would dismiss the appeal against sentence.

436 For these reasons we are of the view that the following orders should be made:

1. Appeal against conviction dismissed; and

2. Leave to appeal against sentence granted, but appeal dismissed.

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Last Modified: 02/06/2004

Details

AGLC: R v Rivkin [2004] NSWCCA 7
Case: [2004] NSWCCA 7
Decision Date: 5 February 2004

CaseChat Overview and Summary

The appeal by Rivkin against his conviction and sentence for insider trading centred on various aspects of the trial process and the sentence imposed. The appellant was found guilty of contravening section 1002G(2) of the Corporations Act 2001. The key issues before the court included whether there was a miscarriage of justice due to actual or ostensible bias of the trial judge, whether the trial judge erred in not directing a verdict of acquittal, the meaning and application of "information" in the context of the offence, and the admissibility of certain evidence, including medical evidence regarding the appellant's capacity to stand trial and the reliability of his evidence. Additionally, the court examined whether the summing up was fair, the reasonableness of the verdict, the fitness of the appellant to stand trial, and the appropriateness of the sentence imposed.

The court considered the appellant's argument that the trial judge's former professional association with him may have led to actual or ostensible bias. The court found no evidence of personal animosity or bias. It also determined that the trial judge did not err in failing to direct a verdict of acquittal, as the evidence was sufficient to allow a jury to find the appellant guilty. Regarding the meaning of "information" and its application to the facts, the court held that the appellant possessed information that was material to the offence. The court further found that the evidence, including the medical evidence, was properly admitted and relevant to the issues before the court. The summing up by the trial judge was deemed fair, and the verdict was considered reasonable given the evidence. The appellant's fitness to stand trial was found to be adequate, and the sentence was deemed appropriate in light of the appellant's conduct and the need for deterrence.

The court rejected the appeal against conviction, confirming the trial judge's findings and the jury's verdict. The sentence was also upheld as not manifestly excessive. The court emphasized the importance of not being swayed by media-driven community attitudes in sentencing "white collar" crimes. The appeal against sentence was dismissed, and the original conviction and sentence were affirmed. The court noted the relevance of fresh evidence concerning the appellant's medical condition on appeal, but found it did not affect the trial's fairness or the appropriateness of the sentence.

Orders