R v Sigalla (No. 2)

[2016] NSWSC 1918

Supreme Court

New South Wales

Medium Neutral Citation:	R v Sigalla (No. 2) [2016] NSWSC 1918
Hearing dates:	28 October 2016
Date of orders:	28 October 2016
Decision date:	28 October 2016
Before:	Adamson J
Decision:	(1) I allow evidence to be given by Ms Wilkie of the conversation in [80] of her statement to the Australian Securities and Investment Commission dated 28 February 2011.
Catchwords:	CRIMINAL LAW – evidence – application by accused to exclude evidence under s 137 Evidence Act 1995 (NSW) – evidence from statement of witness to ASIC – probative value of evidence not outweighed by danger of unfair prejudice
Legislation Cited:	Evidence Act 1995 (NSW) ss 136, 137
Cases Cited:	Nil
Category:	Procedural and other rulings
Parties:	Regina Andrew John Sigalla
Representation:	Counsel: P McDonald SC/ S Callan (Crown) W P Brewer (Accused)   Solicitors: Commonwealth Director of Public Prosecutions (Crown) Brendan Pigott (Accused)
File Number(s):	2013/1511552013/355116
Publication restriction:	Nil

JUDGMENT

Introduction

1. On 28 October 2016 Mr Brewer, counsel for the accused, objected to the Crown adducing certain evidence from Fiona Wilkie and submitted that it ought be excluded pursuant to s 137 of the Evidence Act 1995 (NSW) on the basis that its probative value was outweighed by the danger of unfair prejudice to the defendant. The evidence to which objection was taken was derived from [80] of Ms Wilkie’s statement to the Australian Securities and Investment Commission (ASIC) dated 28 February 2011, which said as follows:

“Also during this meeting [in late 2008 or early 2009], either Mr Fornasaro or I queried with Mr Sigalla various loans that appeared in account ‘2-4193 TZ Limited’ of the client MYOB General Ledger of the Sigalla Family Trust for the financial year commencing 1 July 2008. Mr Fornasaro or I said words to the effect;

“What is this account?” and “What are these loans for?”

Mr Sigalla said to Mr Fornasaro and I words to the effect;

“Sometimes we have to artificially inflate the price of TZL. I tell my mates to do it too. Sometimes I borrow money to buy shares for myself, and sometimes I get money from friends to buy shares on their behalf.””

2. I allowed the evidence as I did not consider that its probative value was outweighed by the danger of unfair prejudice and indicated that I would provide reasons for my ruling later. I note that when the jury returned and Ms Wilkie was asked about the conversation with the accused, the following exchange ensued:

“Q. I asked you about the conversation which was in about late 2008/early 2009 in which Mr Sigalla was asked "what's the account? What are the loans for?" He provided you with an answer?

A. Yes.

Q. What did he say?

A. From my recollection, the answer was that basically people he knew and other parties to TZL would trade in shares of TZL to influence the market value of the shares on the stock exchange.”

3. The answer given by Ms Wilkie did not go as far as her proof of evidence set out above, in which the accused is said to have said: “Sometimes we have to artificially inflate. . .” The actual evidence adduced made the ruling, in effect, hypothetical. Nonetheless, the accused is entitled to reasons for my allowing the evidence, which are set out below.

Consideration

4. The context in which the evidence was sought to be led is important to an assessment of its probative value. Ms Wilkie was being questioned about a document, Exhibit R, which was sent as an attachment to an email from Ms Wilkie to Ms Kitnar, the book keeper for the accused, his wife and his companies (ZMS Investments Pty Ltd and BZI Pty Ltd). The attachment comprised a balance sheet of BZI Pty Ltd as of June 2009 and profit and loss statement for the financial year ended 30 June 2009 and the BZI Pty Ltd general ledger for that period. Of present importance, Ms Wilkie was being asked about a particular item in the general ledger, 2-4193, entitled “TZ Ltd”. Ms Wilkie explained that this item was a liability and comprised amounts owed by BZI Pty Ltd to TZ Ltd. She was asked about an item in the general ledger for 18 August 2008 recorded as “TZ John Falconer $525,000”. In response she said that the item reflected that BZI Pty Ltd owed Mr Falconer money for the acquisition of shares in TZ Ltd. She was then asked whether she attended a meeting with the accused in late 2008 or early 2009 in which this account was discussed, to which she answered in the affirmative. The Crown then sought to lead the conversation set out in the extract above and in particular the accused’s response to the inquiry about the loans.

5. Count 14 of the indictment charges that the accused on 18 August 2008 used his position as a director of TZ Ltd dishonestly with the intention of directly gaining a benefit for BZI Pty Ltd and himself in that he caused $525,000 of funds of TZ Ltd to be transferred to BZI Pty Ltd.

6. The content of the conversation regarding the item is plainly relevant, at least to count 14. If the accused’s description of the particular entry was true, it amounts to an admission. If it was not true, it is capable of amounting to an implied admission and could be used by the jury to infer dishonesty (which is part of the charge). It is prejudicial to the accused since his answer tends to indicate that he engaged in uncharged conduct (in effect, market manipulation or covert action concerning shares) which is both dishonest and criminal and bears a certain similarity with the underlying conduct which forms the background to the charges in the indictment.

7. Section 137 requires the probative value of evidence to be weighed against the danger of unfair prejudice to the accused of adducing the evidence. Mr Brewer accepted that the evidence was probative but argued that there was a danger of unfair prejudice because of its tendency to indicate that he engaged in other nefarious, and related, conduct. If it were feasible to sever the part of the accused’s answer (in Ms Wilkie’s statement) which relates to market manipulation, the prejudice could be removed. However, the purpose of the loans is, in my view, crucial to the characterisation of them given by the accused. Accordingly, the probative force of the evidence would be significantly reduced if what the accused said by way of explanation of the entry could not be adduced in full.

8. I accept the Crown’s submission that the evidence is highly probative to count 14 in that it is a broadly contemporaneous explanation by the accused of the accounting treatment of the sum referred to in count 14. I consider that any danger of unfair prejudice to the accused of the evidence objected to could be ameliorated by an appropriate direction to the jury as to the limited use to which they could put what the accused said to Ms Wilkie and Mr Fornasaro. I do not regard the probative value of this evidence as being outweighed by the danger of unfair prejudice to the accused. In these circumstances I am not obliged by s 137 of the Evidence Act to exclude the evidence. Nor am I persuaded that it would be appropriate to exclude the evidence on any other basis.

9. Section 136 must also be considered since it provides for a discretion to limit the use of evidence which is unfairly prejudicial to a party. Had Ms Wilkie come up to proof (and said that the accused included himself in the persons said to engage in such conduct), it would have been necessary to limit the use to which the evidence could be put and direct the jury accordingly. However, as she did not, it was not necessary to give any such direction to the jury, as was accepted by Mr Brewer after the evidence had been led.

Ruling

10. On 28 October 2016 I made the following ruling on the voir dire:

1. I allow evidence to be given by Ms Wilkie of the conversation in [80] of her statement to the Australian Securities and Investment Commission dated 28 February 2011.

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Decision last updated: 17 February 2017