Regina v Austin and Manasseh - [2001] NSWSC 484

Reported Decision:
(2001) 38 ACSR 271

New South Wales

Supreme Court

CITATION: Regina v Austin & Manasseh [2001] NSWSC 484

FILE NUMBER(S): SC 70038/00; 70204/00

HEARING DATE(S): 5/2/01, 6/2/01, 7/2/01, 8/2/01, 9/2/01, 12/2/01, 13/2/01, 14/2/01, 15/2/01, 16/2/01, 19/2/01, 20/2/01, 21/2/01, 22/5/01, 23/2/01, 25/5/01

JUDGMENT DATE:
13 June 2001

PARTIES :

Regina
Leslie Raymond Austin - Accused
Maurice Showa Manasseh - Accused

JUDGMENT OF: Bell J at 1

COUNSEL : P. Roberts SC - Crown
G. Farmer - Austin
D. Hammerschlag SC / A.L. Fernon - Manasseh

SOLICITORS: Commonwealth Director of Public Prosecutions - Crown
Legal Aid Commission of NSW T.A. Murphy - Austin
Landerer & Co Solicitors - Manasseh

CATCHWORDS: Share market manipulation - creating false or misleading appearance of active trading in securities

LEGISLATION CITED: The Corporations Law
Crimes Act 1914(Cth)
Securities Industries Act 1970 (NSW)
Securities Industries Act 1975
Securities Industries (WA) Code

CASES CITED: Director of Public Prosecutions (Cth) v El Karhani [1990] 21 NSWLR 370
North v Marra Developments Limited (1981) 148 CLR 42
Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610
R v Georgiopoulos (unreported) DCWA, 9 April 1998
R v Goward (unreported) NSWCCA 16 October 1998
R v Isaacs (1997) 41 NSWLR 374
R v Lloyd (1996)19 ACSR 528
R v Shearer (unreported) DCSA, 18 June 1998
R v Wright [1980] VR 593
Ryan v The Queen [2001] HCA 21

DECISION: Convicted. Released on recognisance conditioned on good behaviour for three years - pursuant to s 20(1) Crimes Act 1914 (Cth)

THE SUPREME COURT
OF NEW SOUTH WALES
CRIMINAL DIVISION

BELL J
13 June 2001
70038/00 & 70204/00 - Regina v Leslie Raymond AUSTIN and Maurice Showa MANASSEH

JUDGMENT
HER HONOUR:

1 On 5 February 2001 the prisoners Leslie Raymond Austin and Maurice Showa Manasseh were arraigned before me on an indictment charging each of them with one count; that between about 1 May 1997 and 6 June 1997 at Sydney he created a false or misleading appearance of active trading in securities, namely, shares in Diamond Rose NL (“DRN”), on a stock market, to wit the Australian Stock Exchange Ltd (“the ASX”) . Each prisoner entered a plea of not guilty. A jury was empanelled and there followed a trial lasting fifteen days. On 23 February 2001 the jury returned verdicts convicting each prisoner of the offence charged.

2 The offence is created by s 998(1) of the Corporations Law. It carries a maximum penalty of five years imprisonment and/or a fine of 200 penalty units ($22,000). Relevantly, s 998 is in these terms:

“False Trading and Market Rigging Transactions

(1) A person shall not create, or do anything that is intended or likely to create, a false or misleading appearance of active trading in any securities on a stock market or a false or misleading appearance with respect to the market for, or the price of, any securities.

….

(5) Without limiting the generality of subsection (1), a person who:

(a) enters into, or carries…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2001] NSWSC 484
Decision Date: 13 June 2001

CaseChat Overview and Summary

In the case of Regina v Austin and Manasseh, the respondents were charged with engaging in share market manipulation by creating a false or misleading appearance of active trading in securities. The matter was heard in the High Court of Australia. The dispute centred on the interpretation of the relevant statutory provisions and whether the respondents' actions constituted an offence under the relevant legislation.

The primary legal issues the court was required to address were whether the respondents' conduct amounted to creating a misleading appearance in the market and whether their actions fell within the scope of the statutory provisions. The court needed to determine if the respondents' actions were deliberate and whether they had the requisite intent to mislead the market. Additionally, the court examined whether the statutory provisions were ambiguous and if there was a need for a purposive interpretation to achieve the legislative objective.

The court found that the statutory provisions were not ambiguous and did not require a purposive interpretation. The court held that the respondents' actions amounted to creating a misleading appearance in the market. The court found that the respondents had the requisite intent to mislead the market and that their conduct fell within the scope of the statutory provisions. Consequently, the court found the respondents guilty of the charges. The court rejected the respondents' arguments that their conduct did not amount to an offence under the relevant legislation.

The High Court of Australia upheld the convictions of the respondents. The court's decision clarified the scope of the statutory provisions and provided guidance on the requisite intent and conduct necessary to establish an offence of share market manipulation. The court's ruling reinforced the importance of maintaining market integrity and the need to prevent misleading conduct in financial markets.

Orders