Smith v The Queen
[2008] WASCA 128
•17 JUNE 2008
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: SMITH -v- THE QUEEN [2008] WASCA 128
CORAM: BUSS JA
MILLER JA
MURRAY AJA
HEARD: 6-8 MAY 2008
DELIVERED : 17 JUNE 2008
FILE NO/S: CACR 131 of 2007
BETWEEN: BRIAN MILLWOOD SMITH
Appellant
AND
THE QUEEN
Respondent
FILE NO/S :CACR 135 of 2007
BETWEEN :STUART ADRIAN CORP
Appellant
AND
THE QUEEN
Respondent
FILE NO/S :CACR 136 of 2007
BETWEEN :STUART ADRIAN CORP
Appellant
AND
THE QUEEN
Respondent
FILE NO/S :CACR 145 of 2007
BETWEEN :BRIAN MILLWOOD SMITH
Appellant
AND
THE QUEEN
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :FENBURY DCJ
File No :IND 1421 of 2004
Catchwords:
Criminal law - Trial - Co-accused - Arraignment - Indictment amended to split some of the counts on the indictment - New charges as expressed in the amended indictment in essence the same as the original charges - Accused not prejudiced - Amendment to the indictment did not require rearraignment
Criminal law - Breaches of s 232(2) and s 243ZF of the Corporations Law - Whether convictions unreasonable or could not be supported having regard to the evidence - Accused were directors of public companies - Resolutions proposed at general meetings of the companies to confer a financial benefit on the directors or their associates - Allegation that the accused 'exercised a power to vote' in favour of the resolutions at the general meetings - Allegation that the accused 'allowed proxy votes to be counted' in relation to the resolutions - Whether essential that the prosecution prove beyond reasonable doubt that the power to vote was exercised on a poll called in relation to the resolutions at the general meetings and that the accused allowed the proxy votes to be counted on such polls - Whether sufficient for the prosecution to prove beyond reasonable doubt that the power to vote was exercised and the accused allowed the proxy votes to be counted informally in determining whether the resolutions had been passed
Criminal law - Trial - Judge's comments to the jury on factual issues - Judge failed to inform the jury that they were not bound by the comments and they may accept or reject them as they think fit - Whether judge's comments were materially prejudicial to the defences of the accused - Whether judge's comments occasioned a miscarriage of justice - Whether 'proviso' in s 30(4) of the Criminal Appeals Act 2004 (WA) should be applied
Criminal law - Trial - Application by accused to recall prosecution witness - Judge declined to order the recall of the witness - Whether judge's decision was vitiated by error or occasioned a miscarriage of justice
Criminal law - Warnings - Prosecution witness admitted backdating documents, destroying documents and engaging in misleading conduct, but asserted she acted on instructions from the accused - Witness received a 'letter of comfort' from the prosecution authorities - Witness's evidence of critical importance in the case against the accused - Judge gave the jury a warning in relation to the evidence of the witness - Whether the warning given was adequate
Criminal law - Evidence - Post-offence conduct of accused - Whether judge erred in describing evidence of the postoffence conduct as evidence of consciousness of guilt - Relevance of the postoffence conduct - Whether judge gave adequate directions to the jury in relation to the postoffence conduct
Criminal law - Evidence - Admissibility of unsigned and undated letter - Whether copy letter admissible under s 73A(1) of the Evidence Act 1906 (WA) - Whether copy letter admissible under s 73C(2a) of the Evidence Act
Legislation:
Corporations Law s 30, s 31, s 32, s 232(2), s 243ZF, s 250, s 253
Criminal Appeals Act 2004 (WA) s 30(3), s 30(4)
Criminal Procedure Act 2004 (WA) s 85(1), s 112, s 132, cl 2(4) of Sch 1
Evidence Act 1906 (WA) s 50, s 73A, s 73C(2a)
Result:
CACR 131 and 145 of 2007
Leave to appeal against conviction granted
Appeal against conviction allowed
Convictions on counts 2B, 3B, 4B, 5B and 8B quashed and verdicts of acquittal entered
Convictions on counts 6, 9, 26, 27, 28, 29, 30, 32B and 34 quashed and a retrial ordered
CACR 135 and 136 of 2007
Leave to appeal against conviction granted
Appeal against conviction allowed
Convictions on counts 2A, 3A, 4A, 5A and 8A quashed and verdicts of acquittal entered
Convictions on counts 1, 7, 10, 11, 23, 24, 25, 31, 32A and 33 quashed and a retrial ordered
Category: A
Representation:
CACR 131 of 2007
Counsel:
Appellant: Mr P F Tehan QC
Respondent: Mr S D Hall SC
Solicitors:
Appellant: Holborn Lenhoff Massey
Respondent: Director of Public Prosecutions (Cth)
CACR 135 of 2007
Counsel:
Appellant: Mr D Grace QC
Respondent: Mr S D Hall SC
Solicitors:
Appellant: Haydn Robinson
Respondent: Director of Public Prosecutions (Cth)
CACR 136 of 2007
Counsel:
Appellant: Mr D Grace QC
Respondent: Mr S D Hall SC
Solicitors:
Appellant: Haydn Robinson
Respondent: Director of Public Prosecutions (Cth)
CACR 145 of 2007
Counsel:
Appellant: Mr P F Tehan QC
Respondent: Mr S D Hall SC
Solicitors:
Appellant: Holborn Lenhoff Massey
Respondent: Director of Public Prosecutions (Cth)
Case(s) referred to in judgment(s):
Ayles v The Queen [2008] HCA 6; (2008) 82 ALJR 502
Azzopardi v The Queen [2001] HCA 25; (2001) 205 CLR 50
Beamish v The Queen [2005] WASCA 62
Broadhurst v The Queen [1964] AC 441
Carr v The Queen (1988) 165 CLR 314
Cavill v The State of Western Australia [2008] WASCA 108
Cecez v The State of Western Australia [2007] WASCA 260
Collard v The State of Western Australia [2008] WASCA 47
Crampton v The Queen [2000] HCA 60; (2000) 206 CLR 261
Davies v Director of Public Prosecutions [1954] AC 378
Director of Public Prosecutions v Faure [1993] 2 VR 497
Dyers v The Queen [2002] HCA 45; (2002) 210 CLR 285
Edwards v The Queen (1993) 178 CLR 193
Ex parte Graham; Re Dowling [1969] 1 NSWR 231
Fernando v The Queen [2000] WASCA 289
Fleming v The Queen (1998) 197 CLR 250
Foo v The Queen [2001] WASCA 406; (2001) 126 A Crim R 486
Gassy v The Queen [2008] HCA 18
Gately v The Queen [2007] HCA 55; (2007) 82 ALJR 149
Go v The Queen (1990) 73 NTR 1
Green v The Queen (1971) 126 CLR 28
Johnson v Miller (1937) 59 CLR 467
Jones v The Queen (1997) 191 CLR 439
Khan v The Queen [1971] WAR 44
Libke v The Queen [2007] HCA 30; (2007) 81 ALJR 1309
Longman v The Queen (1989) 168 CLR 79
M v The Queen (1994) 181 CLR 487
Maher v The Queen (1987) 163 CLR 221
Mahmood v The State of Western Australia [2008] HCA 1; (2008) 82 ALJR 372
Martinez v The State of Western Australia [2007] WASCA 143
Masters, Richards and Wunderlich (1992) 59 A Crim R 445
McKay v The State of Western Australia [2007] WASCA 196
MFA v The Queen [2002] HCA 53; (2002) 213 CLR 606
Milne v The State of Western Australia [2005] WASCA 38
Mule v The Queen [2005] HCA 49; (2005) 79 ALJR 1573
Napier v The State of Western Australia [2007] WASCA 248
R v B [1999] SASC 403
R v Boykovski & Atanasovski (1991) 58 A Crim R 436
R v Hally [1962] Qd R 214
R v Heron [2000] NSWCCA 312
R v Honey [1973] 1 NZLR 725
R v Jackson [1992] Crim L R 214
R v Kolomrjyc [1926] 2 WWR 126
R v Macbeth [2008] SASC 71
R v Mason (1925) 18 Cr App R 131
R v Mawson [1967] VR 205, 209
R v R (1989) 18 NSWLR 74
R v Saffron (1988) 17 NSWLR 395
R v Zorad (1990) 19 NSWLR 91
Ratten v The Queen (1974) 131 CLR 510
Reid v Readdy [1999] WASCA 208
RPS v The Queen [2000] HCA 3; (2000) 199 CLR 620
Shepherd v The Queen (1990) 170 CLR 573
Stanton v Abernathy (1990) 19 NSWLR 656
Weiss v The Queen [2005] HCA 81; (2005) 224 CLR 300
White v The Queen [2006] WASCA 62
Whitehorn v The Queen (1983) 152 CLR 657
Wilde v The Queen (1988) 164 CLR 365
Winning v The Queen [2003] WASCA 245
Zoneff v The Queen [2000] HCA 28; (2000) 200 CLR 234
BUSS JA: Brian Millwood Smith and Stuart Adrian Corp were tried in the District Court, before Fenbury DCJ and a jury, on an indictment containing 35 counts alleging breaches of Commonwealth laws. The trial occupied almost 9 weeks. Verdicts were returned on 4 October 2007.
At all material times, Mr Smith and Mr Corp were directors of, and substantial shareholders in, two public companies, Welcome Stranger Mining NL (WSM) and Hallmark Gold NL (HLM). Each company was engaged in mining exploration and listed on the Australian Stock Exchange (ASX). Mr Smith was the Chairman and Mr Corp the Chief Executive Officer.
At all material times, Mr Smith and Mr Corp worked together in West Perth at a company which they controlled, called BMS Consultants Pty Ltd (BMS). Each of them was a director of BMS. It provided management services to WSM between 1987 and 1998 and to HLM between 1985 and 1998.
The charges in the original indictment against Mr Smith and Mr Corp were as follows:
(a)Counts 2, 3, 4, 5, 8 and 32 alleged breaches of director's duties by Mr Smith and Mr Corp pursuant to s 232(2) of the Corporations Law arising out of their conduct at general meetings of WSM and HLM.
(b)Counts 15, 16, 17, 18, 20, 21, 26 and 27 alleged breaches by Mr Smith of s 243ZF(6) of the Corporations Law, the conduct giving rise to these counts being an allegation that at general meetings of WSM and HLM a vote was cast on behalf of Mr Smith by nominee companies on resolutions which permitted a financial benefit to be given to him.
(c)Counts 12, 13, 14, 19, 24 and 25 alleged breaches by Mr Corp of s 243ZF(6), the conduct giving rise to these counts being an allegation that at general meetings of WSM and HLM a vote was cast on behalf of Mr Corp by nominee companies on resolutions which permitted a financial benefit to be given to him.
(d)Counts 6, 9, 28, 29, 30 and 34 alleged breaches by Mr Smith of s 1308(2) of the Corporations Law (in the case of counts 6, 9, 28, 29 and 30) and a breach by Mr Smith of s 1309(1) (in the case of count 34), constituted by the omission by Mr Smith, in documents lodged with the Australian Securities Commission (ASC) and the ASX, of certain of his relevant interests in shares in WSM and HLM.
(e)Counts 1, 7, 10, 11, 22, 23, 31 and 33 alleged breaches by Mr Corp of s 1308(2) (in the case of counts 1, 7, 10, 11, 22, 23 and 31) and a breach by Mr Corp of s 1309(1) (in the case of count 33), constituted by the omission by Mr Corp, in documents lodged with the ASC and the ASX, of certain of his relevant interests in shares in WSM and HLM.
(f)Count 35 alleged a breach by Mr Corp of s 67(1)(a) of the Australian Securities and Investments Commission Act 2001 constituted by his procuring another to destroy books relating to a matter that the ASC was investigating.
During the trial, the learned trial judge, on the application of the respondent, made after it had closed its case, amended counts 2, 3, 4, 5, 8 and 32 to sever each count in relation to each accused. The counts against Mr Smith were re‑numbered 2B, 3B, 4B, 5B, 8B and 32B. The counts against Mr Corp were re‑numbered 2A, 3A, 4A, 5A, 8A and 32A.
Mr Smith and Mr Corp did not give evidence at the trial.
Mr Smith was found guilty on counts 2B, 3B, 4B, 5B, 6, 8B, 9, 26, 27, 28, 29, 30, 32B and 34. He was acquitted on counts 15, 16, 17, 18, 20 and 21. Mr Corp was found guilty on counts 1, 2A, 3A, 4A, 5A, 7, 8A, 10, 11, 23, 24, 25, 31, 32A and 33. He was acquitted on counts 12, 13, 14, 19, 22 and 35.
The learned trial judge imposed sentences of immediate imprisonment in respect of each count on which Mr Smith and Mr Corp was convicted. Each of them received a net effective head sentence of 3 years imprisonment, commencing on 11 October 2007, with a recognisance release order to take effect after 16 months, that is, on 10 February 2009, in the sum of $20,000.
Mr Smith and Mr Corp appeal to this court against conviction and sentence. On 12 February 2008, Miller JA ordered that the applications for leave to appeal be heard together with the appeals.
Overview of the facts
The respondent alleged, in essence, that Mr Smith and Mr Corp accumulated 'relevant interests' (as defined in Division 5, other than s 44, of Pt 1.2 of the Corporations Law) in various shares in WSM and HLM, and failed to disclose those relevant interests as required from time to time under the Corporations Law. The respondent also alleged, in essence, that at general meetings of WSM and HLM, each of Mr Smith and Mr Corp caused proxies he held in respect of the shares in question to be voted in favour of resolutions which conferred a financial benefit on him or his associates.
It was alleged, in relation to Mr Smith, that he was a potential beneficiary under a discretionary trust called the Gold Coast Trust. At all material times, Centurion Trust Company Ltd (Centurion), a company with its central management and control in Jersey, Channel Islands, was the trustee of that trust, and the trust property held by Centurion or its nominees included shares in WSM and HLM. According to the respondent, at all material times Mr Smith had a relevant interest in those shares.
It was alleged, in relation to Mr Corp, that at all material times he had a relevant interest in shares in WSM and HLM which were held by three companies incorporated in the British Virgin Islands, namely, Davenrite Limited (Davenrite), Happle Limited (Happle) and Courtenay Investments Limited (Courtenay) or their nominees.
Mr Smith disputed that he had ever had a relevant interest in any of the shares in WSM and HLM held by Centurion as trustee of the Gold Coast Trust or its nominees. Similarly, Mr Corp disputed that he had ever had a relevant interest in any of the shares in WSM and HLM held by Davenrite, Happle or Courtenay or their nominees.
The respondent asserted that when Mr Smith or Mr Corp was required to lodge documents with the ASC or the ASX, each untruthfully failed to disclose his relevant interest in the shares in question, although each disclosed his relevant interest in other shares in WSM and HLM. The respondent also asserted that each of Mr Smith and Mr Corp improperly used proxies he held in respect of the shares in question (given to him by or on behalf of Centurion, Davenrite, Happle or Courtenay, or their nominees, as the case may be) to vote in favour of resolutions at general meetings of WSM or HLM which conferred a financial benefit on him or his associates.
The amended indictment contained charges alleged to have been committed on or about specified dates between 1991 and 1998. All proxies given by Centurion or its nominees to Mr Smith, and all proxies given by Davenrite, Happle and Courtenay or their nominees to Mr Corp, during that period, were allegedly voted by the recipient favourably to his interests.
The Gold Coast Trust was created in Jersey on 21 March 1986. The trustee, Centurion, was formerly known as Steeple Trust Company Ltd. Two charities (the British Heart Foundation and the Imperial Cancer Fund) were named in the trust deed as beneficiaries. As at the trial, Centurion had not made any distribution of any of the trust property.
The respondent relied on the evidence of James Hardcastle and John Ellis, including documents they produced, to establish that Mr Smith had a relevant interest in the shares in WSM and HLM held by Centurion or its nominees. At all material times, Mr Hardcastle was a director of Centurion and responsible for decision‑making in relation to the operation of the Gold Coast Trust. At all material times, Mr Ellis was an employee of Centurion Management Services Ltd (CMS), of Jersey, which provided administrative services to Centurion. Neither Mr Hardcastle nor Mr Ellis was willing to travel to Australia to appear as a witness at the trial.
In February 2007, pursuant to a supplementary application made on behalf of the Attorney‑General for the Commonwealth under the Mutual Assistance in Criminal Matters Act 1987 (Cth), each of Mr Hardcastle and Mr Ellis gave evidence via a video‑link from Jersey. Mr Smith was represented by counsel at the hearing. His counsel cross‑examined Mr Hardcastle and Mr Ellis. The proceedings were recorded in Jersey on video.
On 11 June 2007, the respondent applied, pursuant to s 24 of the Foreign Evidence Act 1994 (Cth), to adduce foreign material, namely, the video of the evidence of Mr Hardcastle and Mr Ellis and the documents which they produced. Mr Smith opposed the application. On 14 June 2007, the learned trial judge decided that the foreign material could be adduced.
The evidence of Mr Hardcastle and Mr Ellis established, relevantly:
(a)A Swiss resident, Jutta Suess, who died in 1988, was the settlor of the Gold Coast Trust.
(b)An unsigned and undated letter (referred to as a 'letter of wishes') was located on the files of Centurion, which named four potential beneficiaries of the Gold Coast Trust, including Mr Smith. The copy letter of wishes set out a percentage against the name of each potential beneficiary. In Mr Smith's case, it was 20%.
(c)Centurion retained Mr Smith as an adviser to the Gold Coast Trust for which he was remunerated from time to time by the payment of credit card expenses and the issuing of traveller's cheques.
(d)The trust property of the Gold Coast Trust included, amongst other assets, shares in WSM and HLM.
(e)By letter dated 9 September 1997, Mr Smith wrote to CMS, expressing the wish that during his lifetime he be entitled to the income and capital of the trust property. Mr Hardcastle understood that this wish related to Mr Smith's 20% potential share in the trust property as set out in the copy letter of wishes.
(f)Mr Ellis, at CMS's office in Jersey, received correspondence from Mr Smith from time to time in which Mr Smith gave investment advice concerning the shares in WSM and HLM. Mr Ellis identified correspondence from Mr Smith to Centurion in relation to the voting by proxy of the shares in WSM and HLM at general meetings of those companies. Five of the letters in question related to meetings the subject of the counts in the amended indictment. In the correspondence, Mr Smith suggested how the proxy forms should be completed.
(g)The proxy forms which were completed and signed by or on behalf of Centurion or its nominees were voted in the manner suggested by Mr Smith.
(h)In 1995 and 1998, the ASC sent notices to Centurion, requesting it to inform the ASC of the name of any person who had a relevant interest in the shares in WSM and HLM held by the Gold Coast Trust. Mr Hardcastle and Mr Ellis concluded, upon receipt of those requests, that Mr Smith did not have a relevant interest. Mr Hardcastle gave evidence that Centurion acted independently pursuant to its fiduciary duty, it took its responsibilities seriously, and it 'would not simply act on the directions, instructions or wishes of a third person'.
Abacus London Limited (Abacus), an accountancy entity controlled by Susan Wickerson, with its management and control in London, arranged for the incorporation of Davenrite, Happle and Courtenay. Abacus also managed the companies. Dawn Dodd (née Sawyer) was Mrs Wickerson's assistant. At all material times, a company called Ciaga Investments Limited (Ciaga) was the sole director of Davenrite, Happle and Courtenay. Atticus Trust Company Limited (Atticus), a brokering entity, controlled Ciaga.
The respondent relied on the evidence of Mrs Wickerson and Mrs Dodd, and documents they produced, to establish that Mr Corp had a relevant interest in the shares in question.
Mrs Wickerson and Mrs Dodd gave evidence before the trial, in Jersey. The proceedings were recorded in Jersey on video. As with the evidence given by Mr Hardcastle and Mr Ellis, the procedure for Mrs Wickerson and Mrs Dodd to give evidence was initiated and undertaken by the Commonwealth in co‑operation with Jersey authorities pursuant to the Mutual Assistance in Criminal Matters Act, with the evidence being admissible, subject to discretionary exclusion, under the Foreign Evidence Act.
Mrs Dodd was examined by counsel for the respondent in Jersey in June 2006. Mr Corp did not appear in person or by counsel and, as a result, there was no cross‑examination. Mrs Wickerson was examined by counsel for the respondent in Jersey in February 2007. Mr Corp appeared by counsel on this occasion, and an extensive cross‑examination was undertaken.
Mrs Wickerson said in evidence that she first met Mr Corp in Perth and, subsequently, on two or three occasions. On Mr Corp's instructions, and as his accountant, she arranged for the incorporation of Davenrite, Happle and Courtenay and the engagement of Atticus and Ciaga. She said that Ciaga was a corporate director in a nominee capacity only in that all decisions were carried out at her request and she, in turn, acted only on Mr Corp's instructions. Mrs Wickerson said that she carried out extensive administrative and accounting work on behalf of Mr Corp in relation to Davenrite, Happle and Courtenay. Each of the companies held shares in HLM and WSM, and she arranged for proxies to be completed, signed and lodged for general meetings of HLM and WSM.
Geoffrey Norway was a director of Atticus and Ciaga. He gave evidence at the trial that he acted solely on Mrs Wickerson's instructions in completing and signing any documents on behalf of Davenrite, Happle or Courtenay. Before 10 January 1997, he did not know the identity of the beneficial owner of the shares in Davenrite, Happle and Courtenay. On that date Mrs Wickerson informed him that Mr Corp was the beneficial owner.
Mrs Wickerson gave evidence that she lodged notices with the ASC setting out particulars of relevant interests in the shares in WSM and HLM held by Davenrite, Happle and Courtenay, but she falsely omitted to disclose Mr Corp's relevant interest. See ss 717 ‑ 719, 722 of the Corporations Law. By letter dated 12 July 1995 from Mrs Wickerson to the ASC, she falsely informed the ASC that shares in HLM held by Davenrite were held and administered for the benefit of the family of Alex Pereira. She said in evidence that Mr Corp had drafted the letter and she had sent it to the ASC on his instructions.
Mrs Wickerson said in evidence that all of her actions in relation to Davenrite, Happle and Courtenay were as a result of instructions from Mr Corp. She never acted independently. She and Mrs Dodd created documents on his instructions and, on occasions, she had been instructed to backdate documents.
Mrs Wickerson identified documents which Abacus had prepared and sent to instructing brokers between 1991 and 1998 in relation to the exercise of options in WSM and HLM, and the completion and lodgement of proxies, on behalf of Davenrite, Happle and Courtenay. She prepared and sent these documents in accordance with Mr Corp's instructions.
Mrs Wickerson said, in evidence‑in‑chief, that in 1994 Mr Corp asked her to destroy facsimile instructions which he had sent her and, in response to those instructions, she destroyed the documents. However, when asked in cross‑examination when it was that Mr Corp asked her to destroy the facsimile instructions, Mrs Wickerson said she did not remember.
Deanna Soares, a filing clerk employed by Abacus, gave evidence that she was requested in June 1997 to shred documents from Abacus's files relating to Davenrite, Happle and Courtenay. She added that all she remembered was she had shredded the documents when Abacus carried on business at an address at Lancaster Mews in London, 'just before' it moved to Bromley in Kent. Other evidence proved that Abacus was still carrying on business at Lancaster Mews in 1998.
Mrs Wickerson gave evidence that, in late 1997 or early 1998, Mr Corp contacted her and requested that she locate new beneficial owners for Davenrite, Happle and Courtenay. She was to 'give them away'. She contacted Mr Pereira, a taxation consultant who undertook work for Abacus from time to time, and believed that he spoke to some friends about accepting beneficial ownership of the companies. The respondent's case at trial was that Mr Pereira became the beneficial owner of Davenrite, John Rump became the beneficial owner of Happle, and Eugene Wollschlager became the beneficial owner of Courtenay. Mrs Wickerson said in evidence that in late 1997 or early 1998 she informed Mr Corp that new beneficial owners had been found for the companies.
The respondent adduced evidence which established that between 28 November 1995 and 14 January 1998, 48 facsimile transmissions were sent from the offices of BMS in Perth to Abacus in London, and that between 9 December 1993 and 9 February 1998, 79 facsimile transmissions were sent from Abacus in London to the offices of BMS in Perth. There was also evidence as to the number of telephone calls during the 4‑year period in question between the offices of BMS in Perth and Abacus in London.
Mrs Dodd's evidence substantially corroborated Mrs Wickerson's evidence to the effect that the incorporation and administration of Davenrite, Happle and Courtenay had been undertaken in accordance with Mr Corp's oral and written instructions.
An aspect of Mr Corp's case at trial was that at all material times Mr Pereira, Mr Rump and Mr Wollschlager were the true beneficial owners of Davenrite, Happle and Courtenay respectively.
Mr Pereira said in evidence that Mrs Wickerson approached him in late 1997 or early 1998 to take an interest in Davenrite. He said that he did so, in a nominee capacity. He was paid ₤10,000 for his services.
Mr Rump gave evidence that he was a personal friend (and, subsequently, the partner) of Mrs Wickerson. He said that Mrs Wickerson requested him to play a role in a company. After checking with Mrs Wickerson that he would not incur any liability or responsibility, he agreed to become involved with Happle and was paid ₤10,000 for his services.
Mr Wollschlager died before the trial. His written statement was read into evidence. The statement was to the effect that when he was first asked by Mr Pereira to provide his signature to Abacus, he did not ask for, and was not given, an explanation for the request, and 'took no notice of what [he] signed'. Subsequently he became aware, in June 1999, that he had signed documents relating to Courtenay.
The respondent relied on the evidence of Mr Corp gifting the companies (including their assets, which were worth hundreds of thousands of dollars) to Mr Pereira, Mr Rump and Mr Wollschlager, in combination with his instructions that documents should be destroyed, as evidence that 'he knew he had done wrong' and of a 'general consciousness of guilt'. Mr Corp's case, in this respect, was that it was most unlikely he would simply 'give away' companies with such significant assets.
Michael Ruane gave evidence that he was a director and shareholder of WSM between January 1994 and October 1996. He said that when he joined the company it shared offices in West Perth with other companies managed by Mr Smith and Mr Corp. In about 1994, Mr Corp had introduced him to Mrs Wickerson at those offices.
Mr Ruane said in evidence that WSM and HML operated from the West Perth premises, and shared a facsimile machine and facsimile telephone number. It was his habit to examine facsimile transmissions which had been received for the purpose of collecting correspondence relevant to his 'situation in the company'. He noticed that, quite often, there were facsimile transmissions to Mr Smith and Mr Corp including in relation to WSM. He said that he made copies of some of the original facsimile transmissions from time to time, and later gave those copies to the ASC. Mr Ruane was not cross‑examined at the trial. Copy facsimile transmissions from Abacus to Mr Corp which Mr Ruane produced were relied on by the respondent as demonstrating that Mrs Wickerson 'look[ed] to [Mr Corp] for instructions' when it was necessary for payments to be made on behalf of Davenrite, Happle or Courtenay. Also, those copy facsimile transmissions showed that Mrs Wickerson had informed Mr Corp of the 'beneficial ownership' notices which Abacus had lodged with the ASC and which omitted to disclose his relevant interest in the shares in question.
Mr Ruane was not examined about the procedure at general meetings of WSM and HML, including whether resolutions were passed on a show of hands, whether a poll was demanded or whether the proxies were taken into account.
Tanya Sly (nèe Reinikka) gave evidence that she was the receptionist/secretary with BMS between 1991 and August/September 1994. One of her responsibilities, in relation to the general meetings of WSM and HLM, was to compile details of the proxies as they arrived at the office. She tallied the proxies and checked them against the register of shareholders. Ms Sly said she could not remember attending any of the general meetings of WSM or HLM. She conceded in cross‑examination that she was unaware of the procedure adopted at the general meetings in relation to the passing of resolutions. Ms Sly prepared the minutes of each general meeting. For that purpose, she was given the agenda of the meeting, with some handwritten notations.
Keeli Robson was called as a witness. She was employed by BMS as an accountant between October 1993 and January 1997. She attended one general meeting of either WSM or HLM, but did not have much recollection of it.
Lee Ann Maxfield gave evidence that she was employed by BMS as an accountant/office manager between January 1997 and September 1998. In January 1998, she became aware of an attempt by Mr Ruane to change the composition of the board of directors of WSM. She said Mr Corp's demeanour before the meeting was 'quietly confident of having enough proxies'. She said he looked at the proxies as they arrived at the office.
Kerrie Papamihail, an investigator with the Australian Securities and Investments Commission (ASIC), gave evidence and produced documents which had been lodged with the ASC by Mr Corp in his capacity as a director of WSM or HLM. This evidence was not in dispute.
Mr Smith and Mr Corp relied on evidence of good character. It was contended that the allegations made by the respondent required each of them to act entirely out of character, and was motiveless. There was nothing to suggest that Mr Smith and Mr Corp had obtained benefits, from voting the proxies in respect of the shares in question, that they would not otherwise have received had the resolutions been passed by a show of hands.
Appeals against conviction: grounds of appeal
Before the hearing of the appeals, each of Mr Smith's and Mr Corp's appeal against conviction comprised 11 grounds. At the hearing, however, Mr Smith abandoned his grounds 2, 3, 4 and 6, and Mr Corp abandoned his grounds 1, 2 and 3. There is substantial overlap between the grounds relied on by them, and it is therefore convenient, where there is overlap, to consider the relevant grounds together.
Appeals against conviction: Mr Smith's ground 5 and Mr Corp's ground 4
Mr Smith's ground 5 alleges:
By reason of [Mr Smith] not being arraigned upon the new counts 2B, 3B, 4B, 5B, 8B and 32B that were added to the indictment, the trial of [Mr Smith] on these counts was a nullity as the jury were not sworn to try the issues joined between the Crown and [Mr Smith] upon them.
Mr Corp's ground 4 is in similar terms. It alleges that:
By reason of [Mr Corp] … not being arraigned upon the new, individual counts 2A, 3A, 4A, 5A, 8A and 32A following the 'amendment' of the joint counts, the trial from that point on those counts became a nullity.
At the commencement of the trial, Mr Smith and Mr Corp were arraigned on counts 2, 3, 4, 5, 8 and 32. Count 2 is representative of those counts. It provided:
On or about 21 August 1991 at Perth in the State of Western Australia Stuart Adrian CORP and Brian Millwood SMITH failed to act honestly in the exercise of their powers and the discharge of the duties of their office as directors of Welcome Stranger Mining Company NL with intent to deceive Welcome Stranger Mining Company NL and its members and thereby did commit an offence by virtue of subsection 1311(1) of the Corporations Law in that they contravened subsection 232(2) of the Corporations Law as taken to be included in the Corporations Act 2001 by section 1401 of that Act.
Particulars of Resolution
The Directors be empowered to grant at their discretion up to 1,000,000 31 December 1994 options to subscribe to fully paid ordinary shares of $0.20 each to BMS Consultants Pty Ltd, a company providing management services to the Company. The exercise price to be 80% of the market value of the Company's fully paid shares at the date of issue.
Note: Those persons associated in accordance with Division 2 of the Corporations Law with BMS Consultants Pty Ltd will abstain from voting on this resolution.
The respondent provided detailed particulars in relation to each of the counts. The particulars of count 2 (which are representative of the particulars of counts 3, 4, 5, 8 and 32) are these:
2.1On or about 8 August 1991 WSM lodged a 'Notice of Annual General Meeting & Proxy Form' with Australian Stock Exchange (Adelaide) Ltd.
2.2The document was signed by Corp as company secretary of WSM and was dated 24 July 1991.
2.3The document read, in part:
'Notice is hereby given that an Annual General Meeting of the Shareholders of Welcome Stranger Mining Company NL will be held at Level One, 57 Havelock Street, West Perth, Western Australia on Wednesday 21 August 1991 at 9.00 am […]
Special Business
To be proposed as Special Resolution:
5. The Directors be empowered to grant at their discretion up to 1,000,000 31 December 1994 options to subscribe to fully paid ordinary shares of $0.20 each to BMS Consultants Pty Ltd, a company providing management services to the Company. The exercise price to be 80% of the market value of the Company's fully paid shares at the date of issue.
Note: Those persons associated in accordance with Division 2 of the Corporations Law with BMS Consultants Pty Ltd will abstain from voting on this resolution'
2.4In or about August 1991 Corp instructed Abacus London Ltd that all WSM shares held on behalf of Davenrite Ltd were to be voted in favour of Special Resolution 5 at the WSM Annual General Meeting ('AGM') to be held on 21 August 1991.
2.5As at 21 August 1991 the 800,000 WSM shares registered to National Nominees Ltd were held on behalf of Davenrite Ltd.
2.6As at 21 August 1991 the 800,000 WSM shares registered to Bank of New South Wales Nominees Ltd were held on behalf of Davenrite Ltd.
2.7On 21 August 1991 at the WSM AGM 800,000 shares registered to National Nominees Ltd and 800,000 registered to Bank of New South Wales Nominees Pty Ltd voted in favour of Special Resolution 5.
2.8On or about 21 August 1991 Corp exercised a power to vote in relation to WSM shares held on behalf of Davenrite Ltd, despite being an associate of BMS Consultants Pty Ltd, and stating that those persons associated with BMS Consultants Pty Ltd would abstain from voting on the resolution.
2.9As an officer of the company, Corp allowed the proxy votes to be counted in circumstances where he knew that his interest in the shares held on behalf of Davenrite Ltd had not been disclosed, thereby intentionally deceiving the company and its members. In doing so, Corp acted in circumstances where his personal interests were in conflict with his duty to the company. In allowing the votes to be counted in these circumstances, Corp used his position for the purpose of gaining an advantage for himself and Brian Millwood Smith (Smith).
None of the particulars was amended as a result of the splitting of each of counts 2, 3, 4, 5, 8 and 32 into two separate counts.
The arraignment on count 2 (which was representative of the arraignment on counts 3, 4, 5, 8 and 32) was in these terms:
THE CLERK OF ARRAIGNS: And further, that on or about 2 August 1991 at Perth in the State of Western Australia you and each of you failed to act honestly in the exercise of your powers and the discharge of the duties of your office as directors of Welcome Stranger Mining Co NL with intent to deceive Welcome Stranger Mining Co NL and its members and thereby did commit an offence by virtue of subsection 1311(1) of the Corporations Law in that you and each of you contravened subsection 232(2) of the Corporations Law as taken to be included in the Corporations Act 2001 by section 1401 of that Act. How say you, Stuart Adrian Corp: Are you guilty or not guilty?
THE ACCUSED CORP: I am not guilty.
THE CLERK OF ARRAIGNS: How say you, Brian Millward Smith? Are you guilty or not guilty?
THE ACCUSED SMITH: I am not guilty (ts 1214 ‑ 1215).
The learned trial judge's reasons for allowing the respondent's application to amend the indictment (made after the respondent had closed its case) to split each of counts 2, 3, 4, 5, 8 and 32 into two separate counts, were as follows:
Counts 2, 3, 4, 5, 8 and 32 in the indictment are, as we all know, charges against both accused people where they are charged jointly. As I understood, however, the evidence of the prosecution, much of which was prerecorded, suggests that each accused committed an offence in his own right, not in the context of joint criminal enterprise where both commit the one offence, thus it is that each count alleges two offences, one against each accused, and it is therefore not in compliance with the Criminal Procedure Act as I have already found. Consequently the prosecution applies to split the counts, which is obviously to amend the indictment.
…
Given the issues that have been raised during this trial by the defence as can be gleaned from the cross examination of witnesses that have been called and the opening, I don't think the amendment prejudices the accused's defence. I am not satisfied that it prejudices the accused's defence. …
… I am not satisfied the amendment is material to the merits of the case, therefore I am going to allow the amendment, the charges can be split and the trial will go on on those as well as the balance of the counts (ts 3010).
Counts 2A and 2B (which are representative of counts 3A, 3B, 4A, 4B, 5A, 5B, 8A, 8B, 32A and 32B) read:
Charge 2AOn or about 21 August 1991 at Perth in the State of Western Australia Stuart Adrian CORP failed to act honestly in the exercise of his powers and the discharge of the duties of his office as a director of Welcome Stranger Mining Company NL with intent to deceive Welcome Stranger Mining Company NL and its members and thereby did commit an offence by virtue of subsection 1311(1) of the Corporations Law in that he contravened subsection 232(2) of the Corporations Law as taken to be included in the Corporations Act 2001 by section 1401 of that Act.
Particulars of Resolution
The Directors be empowered to grant at their discretion up to 1,000,000 31 December 1994 options to subscribe to fully paid ordinary shares of $0.20 each to BMS Consultants Pty Ltd, a company providing management services to the Company. The exercise price to be 80% of the market value of the Company's fully paid shares at the date of issue.
Note: Those persons associated in accordance with Division 2 of the Corporations Law with BMS Consultants Pty Ltd will abstain from voting on this resolution.
Charge 2BOn or about 21 August 1991 at Perth in the State of Western Australia Brian Millwood Smith failed to act honestly in the exercise of his powers and the discharge of the duties of his office as a director of Welcome Stranger Mining Company NL with intent to deceive Welcome Stranger Mining Company NL and its members and thereby did commit an offence by virtue of subsection 1311(1) of the Corporations Law in that he contravened subsection 232(2) of the Corporations Law as taken to be included in the Corporations Act 2001 by section 1401 of that Act.
Particulars of Resolution
The Directors be empowered to grant at their discretion up to 1,000,000 31 December 1994 options to subscribe to fully paid ordinary shares of $0.20 each to BMS Consultants Pty Ltd, a company providing management services to the Company. The exercise price to be 80% of the market value of the Company's fully paid shares at the date of issue.
Note: Those persons associated in accordance with Division 2 of the Corporations Law with BMS Consultants Pty Ltd will abstain from voting on this resolution.
Counsel for Mr Corp submitted to this court that the only issues which the jury was sworn and empanelled to try were those raised by Mr Corp's pleas to the counts in the original indictment. It was not open, as a matter of law, to replace counts 2, 3, 4, 5, 8 and 32 with new counts (namely, counts 2A, 3A, 4A, 5A, 8A and 32A) without Mr Corp being re‑arraigned on the new counts. Although amendment of the indictment was permissible, the amendment did not dispense with 'the fundamental requirement that the jury be sworn to consider the issues before them'.
According to counsel for Mr Corp, counts 2, 3, 4, 5, 8 and 32 of the original indictment alleged joint offences. In particular, those counts alleged that Mr Smith and Mr Corp committed each offence pursuant to a common purpose. The form of counts 2, 3, 4, 5, 8 and 32, and the manner in which each of them was put to the jury by counsel for the respondent in opening, alleged that each of Mr Smith and Mr Corp had breached his duties as a director not only by permitting proxies for shares in which he had an undisclosed relevant interest to be voted on specific resolutions at general meetings of WSM and HLM, but also in permitting proxies for shares in which the other of them had an undisclosed relevant interest to be counted. Those were the issues which the jury was sworn to try following the arraignment. By contrast, the new counts (that is, counts 2A, 3A, 4A, 5A, 8A and 32A) did not involve an allegation of joint criminality against Mr Smith and Mr Corp pursuant to a common purpose.
Counsel for Mr Corp submitted that the amendment of the original indictment was an amendment of a substantial character, and the new counts introduced a new element into the trial. The failure to re‑arraign on the new counts made the trial a nullity in relation to those counts. Alternatively, the failure to re‑arraign gave rise to a serious miscarriage of justice which requires the convictions on the new counts to be quashed, and a re‑trial ordered on those counts.
Mr Smith made submissions in relation to his ground 5 which are not materially different from the submissions made in relation to Mr Corp's ground 4.
Appeals against conviction: Mr Smith's ground 5 and Mr Corp's ground 4: the merits of the grounds
Section 85(1) of the Criminal Procedure Act2004 (WA) provides that Sch 1 to the Act has effect in relation to indictments and charges in them. By cl 2(4) of Sch 1, a charge must allege one offence only, unless cl 8 or another written law permits otherwise. In the present case, the exceptions to the general rule in cl 2(4) are not relevant. The term 'charge' means a written allegation in a prosecution notice or indictment that a person has committed an offence: s 3(1) of the Act.
Section 132(3) of the Criminal Procedure Act provides that a court, on the application of the prosecutor, may amend a charge. By s 132(5):
If one charge alleges 2 or more offences and a court is satisfied that the one charge is not permitted by Schedule 1 clause 8, it may amend the prosecution notice or indictment containing the charge so that each of the offences is the subject of a separate charge.
Section 132(8) provides that if a court amends a charge, prosecution notice or indictment and is satisfied that the amendment prejudices the accused's defence of the prosecution notice or indictment or of a charge in it, the court must adjourn the prosecution notice, indictment or charge, as the case requires.
Section 132(9) provides that if a court amends a prosecution notice or indictment to include a separate charge and at the time of the amendment a trial of the prosecution notice or indictment is in progress, the court:
(a)may discontinue the trial of all of the charges in, and adjourn, the prosecution notice or indictment; or
(b)may continue with the trial of any charge in the prosecution notice or indictment, other than the charge that has been included, and adjourn that charge.
Section 132(10) provides that a court may refuse to amend a charge, prosecution notice or indictment if it is satisfied:
(a)the amendment is material to the merits of the case;
(b)the amendment would prejudice the accused's defence of the charge, prosecution notice or indictment; and
(c)an adjournment would not overcome the prejudice.
The statutory power of amendment in s 132 of the Criminal Procedure Act displaces the common law rule that an indictment could not be amended. See Maher v The Queen (1987) 163 CLR 221, 230 (Mason CJ, Wilson, Brennan, Dawson and Toohey JJ). In Maher, the accused pleaded not guilty to 19 counts originally in the indictment. He also pleaded not guilty to two further counts added to the indictment after the jury had been sworn. The trial judge had the accused re‑arraigned on the new counts. The High Court held that there was no statutory provision authorising an amendment of the indictment by adding the further counts and, in consequence, the issues which the jury were to try could not include issues raised by a plea of not guilty to those counts. Re‑arraigning the accused on the new counts and giving him in charge of the jury on the new counts did not alter the issues which the jury had been sworn to try. The original jury oath did not extend to issues which could not be lawfully added to the issues then raised by the pleas of not guilty to the 19 counts originally in the indictment.
In Go v The Queen (1990) 73 NTR 1, the appellant was charged and pleaded not guilty to three counts. On the sixth day of the trial the Crown applied for and was given leave to amend the first count. After the amendment the appellant was not re‑arraigned. The appellant was convicted on the first and third counts. She appealed against her convictions on several grounds, including that the amendment to the first count should not have been allowed and that she should have been re‑arraigned after the amendment. The Court of Criminal Appeal of the Northern Territory dismissed the appeal. Asche CJ (with whom Gallop and Angel JJ relevantly agreed) said that the ultimate test in relation to a failure to re‑arraign an accused after an amendment to the indictment is whether there was any injustice to the accused from the failure to re‑arraign. His Honour held that, on the facts of the case before him, the appellant and her counsel and the jury were fully aware of the terms of the amended charge, and the prosecution had not been and was not thereafter conducted in any different way and, as a result, no injustice to the appellant had occurred, and there was no basis on which it could be said that a miscarriage of justice had been occasioned from the failure to re‑arraign.
In R v B [1999] SASC 403, the appellant was convicted of two counts of indecent assault and one count of unlawful sexual intercourse with his daughter. The second count was amended in the course of the trial. The offence originally the subject of the second count was a statutory offence created by s 49(1) of the Criminal Law Consolidation Act 1935 (SA), in which the age of the victim was an element. The second count was amended to allege a different offence, namely, the offence created by s 49(3) of the Criminal Law Consolidation Act. Section 49(4) provided a defence to a charge under s 49(3) which was not available to a charge under s 49(1). The appellant was not re‑arraigned on the new charge under s 49(3) after the amendment. No point was taken in relation to that failure. In the Court of Criminal Appeal of South Australia, Lander J (with whom Millhouse and Duggan JJ agreed) held that the appellant was right not to complain of the failure to re‑arraign because no prejudice was caused by the failure [121]. His Honour added that neither the appellant nor his counsel could have been under any misapprehension as to the charge on the second count. Further, his Honour observed:
The amendment to count 2 did not cause the appellant any embarrassment or prejudice. The evidence as to when this incident occurred was all to the same effect; the day Dianne B went to stay at the Lonsdale Hotel was in April 1997. The complainant, the appellant and his witnesses all addressed that event.
The amendments did not cause any prejudice or any injustice to the appellant [122] ‑ [123].
Recently, in Ayles v The Queen [2008] HCA 6; (2008) 82 ALJR 502, Kiefel J (with whom Gleeson CJ agreed and Heydon J agreed generally) observed that re‑arraignment is usually required where the amendment is of real significance to an accused, but not where the new charge is essentially the same [83].
In my opinion, counts 2, 3, 4, 5, 8 and 32 in the original indictment did not allege that Mr Smith and Mr Corp engaged in a joint criminal enterprise whereby they agreed to commit one offence and that then one of them, or both between them, did all the things necessary to commit the one offence. It is apparent, from the terms of the charges (which alleged Mr Smith and Mr Corp had failed to act honestly in the exercise of 'their powers and the discharge of the duties of their office' as directors), the particulars of the charges (which alleged each of Mr Smith and Mr Corp acted in respect of only the undisclosed shares in which he had a relevant interest) and the opening address of counsel for the respondent that the respondent's case in relation to counts 2, 3, 4, 5, 8 and 32 was that Mr Smith and Mr Corp had each committed the offences in question in his own right. In other words, the respondent's case in relation to counts 2, 3, 4, 5, 8 and 32 was that each of Mr Smith and Mr Corp breached his individual duty as a director of WSM and a director of HLM. The respondent contended that Mr Smith and Mr Corp acted with the knowledge of what the other was doing and in furtherance of a common purpose or aim, namely, to ensure that the outcome of the vote on the relevant resolutions would benefit each and both of them. It did not follow from the allegation that each of Mr Smith and Mr Corp committed individual offences, in the knowledge and expectation the other would act in a similar way and with the same aim, that the respondent's case was that they jointly committed the one offence; that is, the one breach of director's duty.
The clerk of arraigns, in arraigning Mr Smith and Mr Corp on the charges in question in the original indictment, put to each of them that 'you and each of you failed to act honestly in the exercise of your powers and the discharge of the duties of your office as directors …' The words 'and each of you' indicate that the respondent alleged each of Mr Smith and Mr Corp breached his individual duty as a director of WSM and a director of HLM.
The splitting of the counts did not result in any additional evidence being adduced, or any different allegation being made, against Mr Smith or Mr Corp after the respondent had closed its case. Also, the splitting of the counts did not introduce a new element to the trial.
In my opinion, the amendment to the indictment did not require re‑arraignment. The new charges as expressed in the amended indictment were in essence the same as the original charges. No prejudice was caused to Mr Smith or Mr Corp. Neither Mr Smith and Mr Corp nor the jury could have been under any misapprehension concerning the new charges consequent upon the amendment to the indictment. Although the amendment was made late in the proceedings, it is apparent that Mr Smith and Mr Corp did not suffer any relevant prejudice. No miscarriage of justice has occurred.
Mr Smith's ground 5 and Mr Corp's ground 4 fail.
Appeals against conviction: Mr Smith's ground 9 and Mr Corp's ground 5
Mr Smith's ground 9 alleges:
The verdicts of guilty on counts 2B, 3B, 4B, 5B, 8B, 26 & 27 are unreasonable or cannot be supported having regard to the evidence.
PARTICULARS
It was not open to the jury to be satisfied beyond reasonable doubt that the shares that were represented by the relevant proxy forms actually voted on the resolutions that were the subject of each count.
Mr Corp's ground 5 is in identical terms in relation to the corresponding counts applicable to him, namely, counts 2A, 3A, 4A, 5A, 8A, 24 and 25.
Count 2A against Mr Corp is representative of the charges against him in counts 3A, 4A, 5A and 8A. Count 2B against Mr Smith is representative of the charges against him in counts 3B, 4B, 5B and 8B. I have set out counts 2A and 2B at [55] above, and the particulars of count 2 at [51] above.
Counts 2A, 2B, 3A and 3B relate to a general meeting of WSM held on 21 August 1991. Counts 4A, 4B, 5A and 5B relate to a general meeting of HLM held on 28 August 1991. Counts 8A and 8B relate to a general meeting of WSM held on 19 August 1992.
Count 24 against Mr Corp is representative of the charge against him in count 25. Count 26 against Mr Smith is representative of the charge against him in count 27. There is no material difference, for present purposes, between counts 24, 25, 26 and 27. Each of them relates to a general meeting of HLM held on 23 October 1996.
Count 24 provides:
On or about 23 October 1996 at Perth in the State of Western Australia Stuart Adrian CORP, being a related party of a public company, namely Hallmark Gold NL, contravened subsection 243ZF(6) of the Corporations Law, in that at a general meeting of the said Hallmark Gold NL, a vote was cast on behalf of the said Stuart Adrian Corp by Barclays Australian Custodian Services Ltd on a resolution under Division 5 of Part 3.2A (as particularised below) that was passed and that would permit a financial benefit to be given to the said Stuart Adrian Corp, contrary to subsection 1311(1) of the Corporations Law, as taken to be included in the Corporations Act 2001 by section 1401 of that Act.
Particulars of Resolution
Resolution 5 - Grant of Options to Stuart Adrian Corp, Executive Director
'That subject to the passing and coming into effect of Special Resolution 3 specified in this Notice of Annual General Meeting and in accordance with Part 3.2A of the Corporations Law and Listing Rule 10.11 of Australian Stock Exchange Ltd, the Company be authorised to grant 1 million unlisted options to Stuart Adrian Corp or his nominee for no consideration, each option entitling the holder to subscribe for one fully paid ordinary share of 5 cents par value in the Company at a price of 20 cents on or before 31 January 2000 and otherwise on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of Annual General Meeting.'
The particulars to count 24 are these:
24.1On 23 October 1996 an AGM of HLM was held in Perth.
24.2The following special resolution was passed at the HLM AGM on 23 October 1996:
'Resolution 5 - Grant of Options to Stuart Adrian Corp, Executive Director
That, subject to the passing and coming into effect of Special Resolution 3 specified in this Notice of Annual General Meeting and in accordance with Part 3.2A of the Corporations Law and Listing Rule 10.11 of Australian Stock Exchange Ltd, the Company be authorised to grant 1 million unlisted options to Stuart Adrian Corp or his nominee for no consideration, each option entitling the holder to subscribe for one fully paid ordinary share of 5 cents par value in the Company at a price of 20 cents on or before 31 January 2000 and otherwise on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of Annual General Meeting.
Voting Exclusion Statement
The Company disregarded any votes cast on any of resolutions 4, 5 or 6 by:
Brian Millwood Smith, Stuart Adrian Corp or Kevin Ernest Judge; and an associate of that person (or those persons). However the Company did not disregard a vote if [sic]:
If it was cast by a person as proxy for a person who was entitled to vote in accordance with the directions on the proxy form; or
It was cast by the person chairing the meeting as proxy for a person who was entitled to vote in accordance with a direction on the proxy form to vote as the proxy decides.'
24.3On or about October 1996 Corp instructed Abacus London Ltd that proxy forms were to be lodged with HLM and that all HLM shares held on behalf of Happle Ltd were to be voted in favour of all resolutions at the HLM AGM on 23 October 1996.
24.4As at 23 October 1996 970,946 HLM shares registered to Barclays Australia Custodian Services Ltd were held on behalf of Happle Ltd and voted in favour of Special Resolution 5 at the AGM.
24.5At all material times Corp had the power to control the exercise of the right to vote attached to the shares held on behalf of Happle Ltd and thus the votes were cast on behalf of Corp.
Counts 2A, 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B alleged, relevantly, contraventions of s 232(2) of the Corporations Law.
Section 232(2) provided:
An officer of a corporation shall at all times act honestly in the exercise of his or her powers and the discharge of the duties of his or her office.
Counts 24, 25, 26 and 27 alleged, relevantly, contraventions of s 243ZF(6) of the Corporations Law.
Section 243ZF provided, relevantly:
(1)At a general meeting, a vote on a proposed resolution under Division 5 must not be cast (in any capacity) by or on behalf of:
(a)a related party of the public company to whom the resolution would permit a financial benefit to be given; or
(b)an associate of such a related party.
(2)Subsection (1) does not prevent the casting of a vote if:
(a)it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and
(b)it is not cast on behalf of a related party or associate of a kind referred to in subsection (1).
…
(6)If a vote is cast in contravention of subsection (1), the related party or associate, as the case may be, contravenes this subsection, whether or not the proposed resolution is passed.
(7)For the purposes of this section, a vote is cast on behalf of an entity if, and only if, it is cast:
(a)as proxy for the entity; or
(b)otherwise on behalf of the entity; or
(c)in respect of a share in respect of which the entity has power to vote as defined in section 30.
Section 30(2) of the Corporations Law provided that power to vote in respect of a share is power to exercise, or to control the exercise of, the right to vote attached to the share. By s 30(4), relevantly, a reference to power includes a reference to power that is direct or indirect or is, or can be, exercised as a result of, by means of, in breach of, or by revocation of, trusts, relevant agreements and practices, or any of them, whether or not they are enforceable. Section 31(1) provided that, except for the purposes of ss 234, 235 and 236, a person who has power to vote in respect of a voting share in a body corporate has a relevant interest in the share. Section 32 provided:
Where a body corporate has, or is by this Division deemed to have:
(a)power to vote in respect of a share; or
(b)power to dispose of a share;
a person shall be deemed for the purposes of this Division to have in relation to the share the same power as the body has, or is deemed to have, if:
(c)the body is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the person in relation to the exercise of the power referred to in paragraph (a) or (b); or
(d)the person has a controlling interest in the body.
Section 243ZB of the Corporations Law was concerned with voting on a proposed resolution of a public company in general meeting to permit a financial benefit to be given to a related party of the public company. It provided:
(1)If any votes on the resolution are cast in contravention of subsection 243ZF(1), it must be the case that the resolution would still be passed even if those votes were disregarded.
(2)If a poll was duly demanded on the question that the resolution be passed, subsections (3) and (4) apply in relation to voting on the poll.
(3)In relation to each member of the public company who voted on the resolution in person, the public company must record in writing:
(a)the member's name; and
(b)how many votes the member cast for the resolution and how many against.
(4)In relation to each member of the public company who voted on the resolution by proxy, or by a representative authorised under subsection 249(3), the public company must record in writing:
(a)the member's name; and
(b)in relation to each person who voted as proxy, or as such a representative, for the member:
(i)the person's name; and
(ii)how many votes the person cast on the resolution as proxy, or as such a representative, for the member; and
(iii)how many of those votes the person cast for the resolution and how many against.
By s 250(2) of the Corporations Law, a proxy appointed to attend and vote instead of a member had the same right as the member to speak at the meeting but, unless the articles otherwise provided, a proxy was not entitled to vote except on a poll.
Section 253(5) of the Corporations Law provided that at a meeting at which a special resolution was submitted, a declaration of the chairman that the resolution was carried was, unless a poll was demanded, conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. By s 253(7), in computing the majority on a poll demanded on the question that a special resolution be passed, reference was required to be had to the number of votes cast for and against the resolution and to the number of votes to which each member was entitled by the Law or the articles of the company.
For present purposes, there is no material difference between the articles of association of WSM and the articles of association of HLM.
Clause 12.8 of the articles of association set out the voting rights of the members. Relevantly, for present purposes, cl 12.8 provided:
(a)each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative;
(b)on a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of a Shareholder has one vote; and
(c)on a poll, every person present who is a Shareholder or a proxy, attorney or Representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or Representative, have one vote for the Share, but in respect of partly paid Shares, shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder's name as the amount of the issue price thereof paid up bears to the total issue price.
Clause 12.9 provided that a resolution put to the vote of the general meeting shall be decided by a show of hands unless a poll was demanded in accordance with cl 12.11.
By cl 12.11, a poll may be demanded immediately upon or before the declaration of the result of a show of hands by:
(a)the chairman of the General Meeting;
(b)at least five shareholders present in person or by proxy, attorney or Representative; or
(c)any one or more shareholders holding not less than 10% of the total voting rights of all shareholders having the right to vote on the resolution.
Clause 12.12 provided, relevantly, that if a poll was duly demanded, it shall be taken in such manner and either at once or after an interval or adjournment or otherwise as the chairman directs, and the result of the poll shall be the resolution of the general meeting at which the poll was demanded.
Counsel for the respondent argued, in his closing address, that the jury should infer that the proxies in question had been 'taken into account' given 'the efforts that were gone to to have these proxies completed and submitted. Would they go to those sorts of efforts unless they wanted those proxies taken into account and why would they need those proxies taken into account at the meeting?' (ts 3098).
The learned trial judge directed the jury that they could not convict Mr Smith of the offences the subject of counts 2B, 3B, 4B, 5B, 8B, 26 and 27 or Mr Corp of the offences the subject of counts 2A, 3A, 4A, 5A, 8A, 24 and 25 unless they were satisfied beyond reasonable doubt that the proxy votes in question were cast, 'in the sense of taken into account, considered, voted' (ts 3367). Later, his Honour directed the jury, in response to questions from them after they had retired, that in order to convict Mr Smith and Mr Corp of the relevant offences they had to be satisfied beyond reasonable doubt that the shares represented by the proxy forms in question were voted at the relevant meetings, in the sense that they were 'taken into account in determining whether the resolution was passed' (ts 3444 ‑ 3445).
Counsel for the respondent submitted to this court that whether the procedures specified in the articles of association of WSM and HLM in relation to voting on resolutions at general meetings were followed or not is not determinative of whether the proxies in question were in fact voted; that is, 'taken into account' in determining whether the resolutions were passed. According to counsel, the mere fact that there had been no vote by a show of hands and the mere fact that no poll had been called (assuming the jury were not satisfied beyond reasonable doubt that one or other of those events occurred) were simply two of a number of factors that the jury could assess in determining whether they were satisfied beyond reasonable doubt that the proxies were in fact voted. Counsel for the respondent asserted that the evidence established beyond reasonable doubt that the undisclosed shares represented by the proxies in question had been 'taken into account' in determining whether the relevant resolutions were passed. The reasoning and evidence relied on by the respondent are as follows:
(a)The proposed resolutions conferred significant potential financial benefits on Mr Smith and Mr Corp. This was the rationale for the statutory prohibition against Mr Smith and Mr Corp and their respective associates voting. Mr Smith and Mr Corp had powerful reasons for wanting the proxies to be taken into account, namely, that if the proxies were taken into account in deciding whether the resolutions had been passed, there would be the appearance that the relevant resolutions had been passed easily on the vote of a large number of independent shareholders.
(b)Mrs Wickerson and Mrs Dodd gave evidence that Abacus only gave instructions to the brokers who held shares in WSM or HLM on behalf of Davenrite, Happle and Courtenay as to the voting of the shares at general meetings of WSM and HLM if Mr Corp had instructed Abacus to issue such instructions.
(c)Mr Ellis gave evidence that Centurion only gave instructions to the brokers who held shares in WSM or HLM on behalf of Centurion as trustee of the Gold Coast Trust as to the voting of the shares at general meetings of WSM and HLM if Mr Smith made a request or recommendation to Centurion to issue such instructions.
(d)Given that Mr Smith and Mr Corp went to the trouble of requesting that proxies in respect of the shares in question be completed and submitted in time for use at the particular general meeting of WSM or HLM, it is inconceivable that they did not ensure that the proxies were taken into account at the meetings.
(e)The evidence of Ms Sly did not demonstrate that the minutes of the meetings of WSM and HLM between 1991 and 1994 were not a record of proxies that were in fact voted. Ms Sly said in evidence that all of the relevant proxies were, on the instructions of Mr Smith and Mr Corp, received, checked against the register of members, and found to be valid. It can therefore be inferred from her evidence that Mr Smith and Mr Corp knew that the proxies had been received and were available to be used at the meeting. Ms Sly also said in evidence that after the minutes were typed they would 'go back to the bosses to review to make sure they were correct' (ts 2360). She added that the figures in the minutes of the meetings referred to 'the proxies, the voting from the proxies received' (ts 2361).
(f)The proxies and proxy lists were tabled at the meetings. The fact that the proxies had been checked against the register of members and tallied meant that to take the proxy votes into account after tabling them at the meetings required no effort at all.
(g)The minutes of the meetings the subject of counts 2A, 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B do not expressly record that there was a poll. Nor do they record, however, that there was a vote by a show of hands. The fact that the minutes do not record that a poll was taken does not preclude the inference being drawn that the proxy votes were counted. To the contrary, the 'voting figures' recorded in the minutes are consistent only with the inference that the proxies had been taken into account, formally or informally, in determining whether the resolutions were passed.
(h)The minutes of the meetings the subject of counts 2A, 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B may be compared to and contrasted with the minutes the subject of counts 15, 16, 17, 18, 20 and 21 in respect of which Mr Smith was found not guilty and the minutes the subject of counts 12, 13, 14 and 19 in respect of which Mr Corp was found not guilty. The minutes for this second group of counts, which relate to the meetings held on 16 February 1994 and 24 October 1994, record only that the relevant resolutions were passed. No 'voting figures' are recorded. The absence of a record of the 'voting figures' explains the not guilty verdicts returned on these charges.
(i)The minutes of the meeting held on 23 October 1996 (counts 24, 25, 26 and 27) expressly record in respect of the relevant resolution that Mr Smith, in his capacity as chairman, called for a poll.
(j)The minutes of the meetings held on 21 August 1991 (counts 2A, 2B, 3A and 3B) and 23 October 1996 (counts 24, 25, 26 and 27) were signed by Mr Smith, in his capacity as chairman, as a true and correct record of the meetings.
(k)Mr Smith's and Mr Corp's contention that the fact that the 'voting figures' in the minutes replicated the 'voting figures' in the proxy spreadsheets and the agendas for the meetings demonstrates the minutes were not evidence that the proxies were actually voted, does not account for the settling of the minutes by Mr Smith and Mr Corp or the signing of some of the minutes by Mr Smith as a true and correct record. The figures may well be the same because that was the accepted outcome. The contention by Mr Smith and Mr Corp ignores differences which exist, in the case of the meeting held on 21 August 1991, between the 'voting figures' recorded in the proxy spreadsheets and the 'voting figures' for the relevant resolutions as recorded in the minutes.
(l)The concession of Ms Papamihail to the effect that, on the face of the minutes, she could not say whether a poll had been taken or not, is of little significance. It was made solely on the basis of the document shown to her during cross‑examination. Moreover, in re‑examination she clarified, in effect, her evidence on this issue and made reference to other documents which, in her view, were relevant to the issue of whether or not the proxies were in fact voted and counted on the resolutions.
Counsel for the respondent submitted that, on the basis of the reasoning and evidence which I have recounted, the verdicts the subject of Mr Smith's ground 9 and Mr Corp's ground 5 were reasonable and supported by the evidence.
Appeals against conviction: Mr Smith's ground 9 and Mr Corp's ground 5: the merits of the grounds
By s 30(3) of the Criminal Appeals Act 2004 (WA), in the case of an appeal against conviction, the Court of Appeal must allow the appeal if, in its opinion:
(a)the verdict of guilty on which the conviction is based should be set aside because, having regard to the evidence, it is unreasonable or cannot be supported;
(b)the conviction should be set aside because of a wrong decision on a question of law by the judge; or
(c)there was a miscarriage of justice.
In M v The Queen (1994) 181 CLR 487, 492, Mason CJ, Deane, Dawson and Toohey JJ said, in relation to s 6(1) of the Criminal Appeal Act1912 (NSW) (which is in substance identical to s 30(3) of the Western Australian Criminal Appeals Act), that although the phrase 'unsafe and unsatisfactory' does not appear in the statutory provision, it allows a verdict to be set aside when the verdict is unreasonable or not supportable on the evidence. Also see Jones vThe Queen (1997) 191 CLR 439, 450.
In M (523), McHugh J said that a 'miscarriage of justice' arises whenever the accused has not had a fair trial according to law or whenever the nature of the evidence, the directions to the jury or the procedures that were followed, raise a real doubt as to whether the conviction can be regarded as a safe or just conviction. In Jones (450), Gaudron, McHugh and Gummow JJ said that, having regard to the statements in M, there can be no doubt that a 'miscarriage of justice' also occurs when the findings or verdicts of the jury raise a real doubt as to whether a conviction is safe or just.
In M, Mason CJ, Deane, Dawson and Toohey JJ said that the test for an unsafe or unsatisfactory verdict was whether the court thought that:
upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty (493).
In answering that question, their Honours said:
[T]he court must not disregard or discount either the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, or the consideration that the jury has had the benefit of having seen and heard the witnesses. On the contrary, the court must pay full regard to those considerations (493).
Their Honours explained the application of the test:
In most cases a doubt experienced by an appellate court will be a doubt which a jury ought also to have experienced. It is only where a jury's advantage in seeing and hearing the evidence is capable of resolving a doubt experienced by a court of criminal appeal that the court may conclude that no miscarriage of justice occurred. That is to say, where the evidence lacks credibility for reasons which are not explained by the manner in which it was given, a reasonable doubt experienced by the court is a doubt which a reasonable jury ought to have experienced. If the evidence, upon the record itself, contains discrepancies, displays inadequacies, is tainted or otherwise lacks probative force in such a way as to lead the court of criminal appeal to conclude that, even making full allowance for the advantages enjoyed by the jury, there is a significant possibility that an innocent person has been convicted, then the court is bound to act and to set aside a verdict based upon that evidence. In doing so, the court is not substituting trial by a court of appeal for trial by jury, for the ultimate question must always be whether the court thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty (494 - 495).
Also see Jones (450 ‑ 451). The test formulated by the majority in M is the appropriate test for determining whether a verdict is unsafe or unsatisfactory: Jones (452); MFA v The Queen [2002] HCA 53; (2002) 213 CLR 606 [25].
In Libke v The Queen [2007] HCA 30; (2007) 81 ALJR 1309, Hayne J (with whom Gleeson CJ and Heydon J relevantly agreed) said that where it is alleged that a conviction is unsafe or unsatisfactory, the question for an appellate court is:
[W]hether it was open to the jury to be satisfied of guilt beyond reasonable doubt, which is to say whether the jury must, as distinct from might, have entertained a doubt about the appellant's guilt (M v The Queen (1994) 181 CLR 487 at 492 - 493, 69 ALJR 83). It is not sufficient to show that there was material which might have been taken by the jury to be sufficient to preclude satisfaction of guilt to the requisite standard. In the present case, the critical question for the jury was what assessment they made of the whole of the evidence that the complainant and the appellant gave that was relevant to the issue of consent to the digital penetration that had occurred in the park. That evidence did not require the conclusion that the jury should necessarily have entertained a doubt about the appellant's guilt [113]. (emphasis in original)
Also see Weiss v The Queen [2005] HCA 81; (2005) 224 CLR 300 [41] (Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ).
I will consider, first, the merits of Mr Smith's ground 9 and Mr Corp's ground 5 in relation to counts 2A, 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B. I will then consider the merits of those grounds in relation to counts 24, 25, 26 and 27.
A determination of whether the verdicts of guilty on counts 2A, 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B are unreasonable or cannot be supported having regard to the evidence requires an analysis of each count including its particulars, in the context of the statutory provision alleged to have been contravened, for the purpose of determining the alleged conduct of Mr Smith or Mr Corp (as the case may be) on which the respondent relied in relation to those counts. It is convenient to undertake that analysis by reference to count 2A which, as I have mentioned above, is representative of counts 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B.
Count 2A alleges, relevantly, that Mr Corp:
(a)failed to act honestly;
(b)in the exercise of his powers and the discharge of the duties of his office as a director of WSM;
(c)with intent to deceive WSM and its members; and
(d)thereby contravened s 232(2) of the Corporations Law.
Count 2A then sets out particulars of the resolution passed at the general meeting of WSM on 21 August 1991, namely, that the directors be empowered to grant at their discretion up to 1,000,000 31 December 1994 options to subscribe to fully paid ordinary shares of $0.20 each to BMS with the exercise price to be 80% of the market value of WSM's fully paid shares at the date of issue.
The particulars of count 2 allege, relevantly, that:
(a)On or about 21 August 1991, Mr Corp 'exercised a power to vote in relation to WSM shares held on behalf of Davenrite Ltd', despite being an associate of BMS and stating that those persons associated with BMS would abstain from voting on the resolution. See particular 2.8 at [51] above.
(b)As an officer of WSM, Mr Corp 'allowed the proxy votes to be counted' in circumstances where he knew that his interest in the shares held on behalf of Davenrite had not been disclosed, thereby intentionally deceiving WSM and its members. Further, in 'allowing the votes to be counted' in the circumstances alleged, Mr Corp used his position for the purpose of gaining an advantage for himself and Mr Smith. See particular 2.9 at [51] above.
The function of particulars is to inform the accused of the legal nature of the offence charged and the particular acts, omissions, matters and things (as the case may be) which are the foundation of the charge. See Johnson v Miller (1937) 59 CLR 467, 489, 497; R v Saffron (1988) 17 NSWLR 395, 445; Stanton v Abernathy (1990) 19 NSWLR 656, 670 ‑ 671. An accused is not able to plead to the charge unless he or she knows the precise case which is the basis for the charge preferred against him or her. See Ex parte Graham; Re Dowling [1969] 1 NSWR 231, 241; Saffron (447); Stanton (666). The Crown, in criminal proceedings, will normally not be permitted to go outside its particulars, in the interests of a fair trial, but the trial judge has a discretion to permit a departure from the particulars when appropriate. See Saffron (447 ‑ 449, 464).
In the present case, the respondent did not seek leave from the learned trial judge to amend or otherwise depart from its particulars.
What meaning is to be ascribed to the allegation in particular 2.8 that Mr Corp 'exercised a power to vote' in relation to WSM shares held on behalf of Davenrite?
In my opinion, the alleged 'power to vote' referred to in particular 2.8 is the power conferred on Mr Corp by the relevant proxies. This is apparent from particular 2.8 read with particular 2.9, and the manner in which the respondent ran its case at trial. The documents appointing Mr Smith and Mr Corp the proxies of the entities that held the shares in which it was alleged they had a relevant interest were in common form. Each proxy form appointed Mr Smith or Mr Corp (as the case may be) the entity's proxy 'to attend and on a poll vote instead of me/us' at a specified general meeting. None of the proxy forms appointed Mr Smith or Mr Corp (as the case may be) the entity's proxy to vote on a show of hands. The articles of WSM and HLM did, as I have mentioned, specify that on a show of hands on a resolution at a general meeting, every person present who was a member or a proxy, attorney or representative of a member, had one vote. See cl 12.8(b). The respondent's case at trial was, however, that each of the relevant proxies was voted on the basis of one vote in respect of each fully paid share the subject of the proxy.
I think, however, that this is merely a point of criminal pleading. The original counts were bad because they were duplex. They did not each allege the commission of an offence by the two appellants acting jointly to commit the one offence. Each count alleged the commission of two offences, a breach by each of the appellants of his duty to act honestly in the exercise of his powers and the discharge of his duties as directors of the companies in question. The substitution of the new counts simply split those allegations apart, but otherwise added nothing in the way of the issues before the jury.
The course taken at trial is, in my view, authorised by the Criminal Procedure Act 2004 (WA), s 132, specifically by s 132(5), which provides for the amendment, not of a charge, but of an indictment, effectively by deleting the charge which is not permitted, as these were not permitted because they were duplex, and substituting separate charges. There was no reason under s 132(10) for the court to refuse to amend the indictment because there was no suggestion that an adjournment was required, that the amendment was material to the merits of the case or that the amendment would in any way prejudice the defence of either accused person; nor was an adjournment required upon making the amendment, under s 132(8) or s 132(9).
As to the suggestion that the trial was rendered a nullity by the failure to re‑arraign the appellants on the new charges, I note that no such course was sought at trial and there was therefore no debate about the necessity to take such a course. In the latest pronouncement of the High Court on the topic, Ayles v The Queen [2008] HCA 6; (2008) 82 ALJR 502, at 519 [83] Kiefel J, with the apparent agreement of other members of the court, took the pragmatic view that re‑arraignment will be required where the circumstances suggest that it is necessary because of its significance in the context of the trial.
One example of that which immediately springs to mind would be where an offence was added by a pleading which expressed that charge in the alternative to one already contained in the indictment. Clearly in those circumstances there ought to be re‑arraignment so that the issue is joined in respect of the alternative charge, or the accused is offered the opportunity to plead to it and thereby to dispose of the original charge. Here, however, the issue had been joined by the pleas of not guilty originally made by each appellant. In my opinion, procedurally in this regard there was no error at the trial, even of a technical kind.
Proxy voting: did it occur?
Mr Smith's ground 9 and Mr Corp's ground 5 raise the same point in respect of counts of which they were convicted, either of dishonesty in the discharge of their duties as directors, supported by the particulars given in relation to those charges, or, in respect of counts 24, 25, 26 and 27, of the contravention of s 243ZF of the Corporations Law by the casting of votes on behalf of the particular appellant at a general meeting of the company in question in circumstances which would permit a financial benefit to be given to the appellant. The breach of duty offences arose out of precisely the same conduct. The factual circumstances concerning the charges of breach of the duty to act honestly in the exercise of their duties as directors, and permitting a vote to be cast where the accused would benefit from that, are the same and have been completely canvassed by Buss JA.
It is material therefore to all of these charges to note the terms of s 243ZF(1) of the Corporations Law which provides that at a general meeting, 'a vote on a proposed resolution … must not be cast (in any capacity) by or on behalf of (a) a related party of the public company to whom the resolution would permit a financial benefit to be given'.
As has been seen, here the allegation was that the votes impugned were cast by proxy on behalf of corporate entities related to the public companies to which the resolutions would permit a financial benefit to be given and that, under s 32 of the Corporations Law, Smith and Corp were persons deemed, in relation to the shares so voted, to have the same power as the relevant corporations had in relation to the casting of the votes because those corporations or their directors were accustomed, under informal obligations, to act in accordance with the directions, instructions or wishes of the appellants.
Under s 243ZB of the Corporations Law there were various requirements in relation to recording the votes of those members who voted on resolutions both in person and by proxy, the latter mode of voting arising if a poll was called.
Consistently with those provisions, cl 12 of the articles of association of the companies in question provided procedures for voting in person or by proxy. In person voting was by a show of hands, one vote per shareholder present. Voting by proxy occurred on a poll, in which case there was one vote per share, if a poll was demanded.
I have nothing to add to the views expressed by Buss JA in relation to the evidence in this case. It is clear that proxies were obtained. They were provided in a timely manner and held against the need to use them to secure the passage of the special resolutions at issue in the case. Of enormous significance was the evidence of Ms Sly which has been fully discussed by Buss JA. But neither her evidence nor that of Mr Ruane, also discussed by Buss JA, to the extent that that was probative in relation to the meetings the subject of the charges in question, showed what the voting procedure was in relation to the relevant resolutions. Ms Sly's evidence explained generally the votes that were available on a demand for a poll, both for and against the particular resolutions, but it did not establish that a poll was demanded or that the votes were cast, which, in my opinion, was the crucial and central issue in relation to all the charges identified.
In those circumstances, I respectfully agree with Buss JA that, except in those cases where the record of the meeting, the minutes, show that a poll was demanded, there is no evidence that the votes were cast.
As Buss JA notes, the prosecution case at trial referred to the proxies in question being 'taken into account' and that terminology was adopted by the trial judge in his directions, originally to the jury and upon a request for redirection when his Honour said that the prosecution was required to establish beyond reasonable doubt that the shares were voted at the relevant meetings in that they were 'taken into account in determining whether the resolution was passed'.
I agree that that was insufficient to meet the requirements of the law and the way in which the prosecution framed its case that there had been a failure to comply with the duties imposed on the appellants as directors. It was a misdirection because it suggested to the jury that the relevant breach of duty could be established beyond reasonable doubt and the contravention of s 243ZF could be established merely on the ground the proxies were 'taken into account'.
That might mean merely that the voters upon a show of hands might be influenced to vote in a particular way by the fact that, if necessary, the chairman of the meeting could call for a poll, in which case proxies sufficient to secure the passage of the resolution were held and would be voted.
In the result, I agree that these grounds succeed in relation to the offences which were counts 2A, 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B. However, the fatal error in relation to those counts was, as Buss JA has explained, not present to adversely affect the jury's verdicts in relation to counts 24, 25, 26 and 27. On these grounds of appeal I would not disturb those convictions.
Comments on the facts by the trial judge: did a miscarriage of justice occur?
Grounds 7 and 8 raised by Mr Smith and Mr Corp's ground 10 all raise complaints that a miscarriage of justice arose out of comments adverse to the cases of the appellants made by the trial judge during the course of his summing up to the jury. I note that Mr Corp's ground 10 does not complain that a miscarriage of justice arose out of the adverse comments in themselves, but out of the fact that the trial judge, it is alleged, erred by failing to advise the jury or to make sufficiently clear to them that the views expressed by the trial judge when commenting on the facts were simply comments designed to assist, but did not bind the jury or relieve them of the obligation to form their own views about the facts to be found, upon the evidence they accepted. On the other hand, although Mr Smith's ground 7 makes that complaint, ground 8 focuses on particular comments and raises the contention that they caused a miscarriage in themselves because they were 'adverse to the fair trial' of the appellant.
I may say at the outset that, as will appear, I do not think that ground may have merit and I will focus attention upon the question whether the comments by the trial judge shall be held to have occasioned a miscarriage of justice because they may have confused the jury as to the respective roles of the trial judge and the jury and because the directions failed to make that clear generally and in respect of the particular comments upon which the grounds focus attention.
The law is clear. The starting point is s 112 of the Criminal Procedure Act 2004 (WA) which is in the following terms:
After addresses have been made in accordance with section 145 and before the jury retires to consider its verdict, the judge must instruct the jury on the law applicable to the case and may make any observations about the evidence that the judge thinks necessary in the interests of justice.
The observations made about the evidence should be those required in the interests of justice in the particular case being dealt with by the trial judge. Those observations may, in themselves, involve directions of law which will be binding upon the jury, eg, as to how a particular body of evidence is to be approached, as to how the jury may reason in respect of it, as to the dangers that may be perceived to be inherent in the evidence which the jury, unguided by directions of the judge, may not appreciate.
So it may be the case that in dealing with a particular question of fact or body of evidence the trial judge may both give warnings or directions of law and make comments on the evidence. Where that occurs it will usually be imperative that at that time the trial judge should make clear to the jury where in relation to those observations the essential division of functions falls; where the judge is giving directions of law which the jury must accept and follow, and where, on the other hand, a mere comment is made which may be ignored by the jury in performing their essential task of deciding the facts.
There are many cases which make the essential point that a miscarriage of justice will arise where the trial judge fails to make clear to the jury the essential division of function between the judge laying down the law applicable to the case in directions which the jury must accept, and the jury applying that law to the evidence to decide what are the facts. A number of the relevant authorities have been cited by Buss and Miller JJA. Particularly in those cases where, in relation to a body of evidence, the observations of the judge involve both directions of law and comments on the evidence, it will generally be necessary at that time for the judge to make clear to the jury which of the observations involve directions of law and which are comments which may be ignored.
The case of Mahmood v Western Australia [2008] HCA 1; (2008) 82 ALJR 372 is an example of such a case, although there the case turned on the failure of the trial judge to make clear in relation to a particular body of evidence that she was doing more than merely comment upon the evidence and the arguments presented by counsel and was in truth making an observation in the nature of a direction, a warning which the law would require the jury to follow. The judge erred because her Honour's observations were couched in terms which may have wrongly conveyed to the jury that they were mere comments which could be ignored. The error was an error of law falling within s 30(3)(b) of the Criminal Appeals Act and the case was remitted to the Court of Appeal of this State to determine whether, pursuant to s 30(4), the appeal should be dismissed on the ground that no substantial miscarriage of justice had occurred.
In my opinion, in relation to the comments at issue, no such problem arose in this case. The comments or observations were not of a kind which involved the need to carefully distinguish between that part of the observations which constituted a direction which the jury were obliged to follow and that part which was a comment upon the evidence which the jury might ignore. This was a case therefore, in my view, where all that was required in charging the jury was that the judge should make clear that the facts were for their decision solely, and that whatever submissions, arguments and observations were made by the trial judge, and indeed anybody else in addressing them, it was the jury which bore the sole obligation to decide the facts in the context of the directions of law that they were given.
Mule v The Queen [2005] HCA 49; (2005) 79 ALJR 1573 was a case which concerned a trial, coincidentally before the same trial judge as in this case, and a jury. The case concerned observations by the trial judge in charging the jury as to the weight they might attach to exculpatory assertions made by the appellant out of court. The observations were held to involve no error, viewed as an observation about the weight which the jury might place upon the evidentiary material in question.
The High Court stated the general rule by reference to the then applicable precursor to s 112 of the Criminal Procedure Act, the Criminal Code (WA), s 638. At 1575 [6] their Honours said:
That provision distinguished between instructions as to the law applicable to the case, which were mandatory, and observations upon the evidence, which were discretionary. The discretion, of course, was to be exercised in accordance with established principles. One of those principles is that observations upon the evidence must be fair and balanced, but a judge is not prohibited from making an observation which is favourable to one side or the other if it is made clear that it is for the jury, and the jury alone, to decide the facts. Trial judges commonly make observations, sometimes forcefully, about the strength or weakness of particular aspects of the evidence in a case, but they should also make it clear that those observations are not intended to bind the jury, that the jury may or may not agree with them, and that the jurors are the sole judges of all factual issues bearing upon the ultimate verdict.
In that case the trial judge had given the jury general instructions by way of an introductory statement at the commencement of the trial. At that time he told the jury that at the end of the case it would be his job to sum up the law, to tell the jury what the law was and give them instructions in that regard which they must apply. He told the jury that they also were judges, but it was for them to judge the facts and decide what the facts were. His Honour concluded:
It's entirely up to you what you make of the facts and what facts you decide exist in the case, so we are each judges but in different areas.
At 1576 [10], the High Court said that:
It could scarcely have been made more clear that the jurors were the sole judges of the facts, to the exclusion of the trial judge.
In the course of the summing up, before reminding the jury of the arguments of opposing counsel, the trial judge reminded them about what he had said at the commencement of the trial, that:
… it's entirely up to you what you make of the facts. It's entirely up to you how you view the evidence. The findings that you make about the facts are entirely your business and each of the counsel has put a point of view to you that you can entirely accept or not.
This was a long trial. The jury were empanelled on 6 August 2007. They were then excused and not required to attend the trial again until 13 August. Again his Honour made some opening remarks before inviting the prosecutor to give an opening address. Relative to the points at issue in these grounds, his Honour said:
… we are both judges in a sense. I am the judge of the law and it is my job to ensure that the trial is a fair trial during the running of it, a bit like acting like a referee or an umpire, and then to tell you what the law is at the end of the trial. You are the judges of the facts. So you are the facts, I am the law. As a group you are the judges of the facts and our areas of responsibility are very different obviously (t 1446).
His Honour went on to tell the jury that if during the trial they were excluded from the courtroom while proceedings continued, they could assume that matters of law were being discussed and resolved, matters which were not their concern but the concern of the judge because, 'your job is big enough as it is, dealing with the facts and the evidence without worrying about the law …' His Honour then made some observations about the trial process, in the course of which he said that the jury were concerned with the evidence which came before him and what the lawyers involved in the case said was not evidence. That was a theme taken up by senior counsel prosecuting when he made his opening address (t 1455) in observations which would no doubt have served to reinforce the remarks made by the trial judge as to the general division of responsibility for the decision of the case between judge and jury.
The argument before us focused attention upon three comments during the course of the trial judge's summing up. This was commenced on the afternoon of Friday 28 September 2007, immediately following the last of counsel's addresses. On that afternoon his Honour's summing up was limited to general matters. In the course of his observations the judge returned to the theme that he was the judge of the law and the jury were the judges of the facts. As his Honour put it, 'you have heard all of the evidence and done your best to listen to it and follow it, and it is up to you what you make of what you have heard and seen in this trial.' His Honour referred to the arguments of counsel and expressly told the jury:
… each of the lawyers has, as is their responsibility, urged you to take a particular view of things, to look at the facts from their point of view and you can either accept that or not, but what you need to realise is that you don't have to agree with what has been put to you. It is a matter for you because you are the sole judges of the facts (t 3259).
After such introductory observations, the trial was adjourned for the weekend.
It resumed on Monday 2 October 2007. His Honour commenced his address by reminding the jury what had been said on the Friday. He did not specifically refer to this issue again, although in commenting about matters of evidence, from time to time his Honour would use the phrase, 'it's a matter for you' when talking about the facts which would need to be found.
In my view, although his Honour's observations might have been usefully expressed at greater length, the essential instruction that the jury were bound to accept his directions in relation to matters of law, but the decision of the facts was exclusively their province, in relation to which they were not bound to accept anyone else's views, made appropriately clear the essential division of responsibility. In my opinion, in those circumstances, if these grounds are to succeed it must be because the particular comments of which complaint is made were couched in terms which may have confused the jury into thinking that they were bound to accept the observations made by the judge, effectively as directions of law.
The first comment at which criticism is levelled was that a person who wished to give an appearance of being separated from shares might place them in a discretionary trust and say that the person is only a beneficiary of the trust, not the trustee, who can make decisions about the shares; and therefore that person has no interest in the shares (t 3292). This observation referred to a submission made both in opening and closing addresses by prosecuting counsel. The judge said, 'As was pointed out, I think, at the beginning of the trial, [by senior counsel prosecuting] you might think it would be simple … '.
I would make two observations. What was said was not couched in terms of a firm view held by the trial judge, but was more a reference to what had been put in argument by counsel. Secondly, it was a clear comment on matters of evidence involving no legal content and must therefore, in my view, have been understood by the jury as being an argument to be evaluated by them. If the jury considered the judge was telling them what he thought about the evidence, they cannot, I think, have been confused into thinking that they were obliged to adopt that view themselves, having regard to the general directions they had been given.
The second comment which is criticised concerned an argument between the parties in relation to the evidence relied upon by the prosecution to establish that the proxies were voted, at least to the extent that they were taken into account at the relevant general meetings because, the prosecution asserted, properly understood, that was the only reasonable inference to be drawn from the way in which the minutes were expressed. On the other hand, defence counsel argued that although the articles of association laid down a procedure to be followed when a vote was to be taken, not by a show of hands but by calling a poll and counting the votes, including those recorded by proxy which attached to the shares held, it should not be assumed that because the minutes appeared to be written consistently with voting on a poll that that was in fact what had occurred.
The trial judge commented upon these arguments and the procedures laid down in the memorandum and articles of association before saying:
You would appreciate that as a generalisation, given the human factors, it is unlikely all companies strictly follow their rules and regulations on all occasions. It might depend upon what is at stake, how many people there are at the meeting, how efficient their systems were, etcetera. Slackness and slipshod practices, you might think, can creep into any organisation. What happened at the meetings focused upon by this trial, that is, the meetings of Welcome Stranger and Hallmark Gold, needs to be assessed, I think, bearing those factors in mind. The prosecution asserts that the proxy votes were cast at the relevant meetings, whatever strict procedural rules were followed, or not. The defence asserts there is no sufficient proof of that for you to be convinced beyond reasonable doubt, especially given no persons who attended the meetings were asked in or gave evidence in this case about those matters (t 3293 ‑ 3294).
Much of this seems to me to be no more than a reference to the opposing arguments of counsel, although no doubt to say that the jury's decision about what in fact happened at the relevant meetings was to be made against the background of the arguments presented by the defence, expresses a view by the trial judge about the fact‑finding process. But I can see nothing in the remark made which is adverse to the appellants or in any way would leave the jury with the impression that their decision‑making was foreclosed by the view expressed by the judge. In any event, it is clear that the jury must have relied upon what the relevant minutes showed as to the votes cast, albeit in the context of what I agree should be held by this court to be a misdirection as to what was required to be established to show that the votes submitted by proxy were cast.
As to that I should not leave this matter of complaint without referring to questions asked by the jury during the course of their retirement on 4 October 2007 (t 3444 ‑ 3445). They asked firstly in relation to the charges relevant to this issue:
Subject to us finding that an accused had a relevant interest in the shares, is it open to us to reach a guilty verdict without us being satisfied beyond reasonable doubt that the shares, or at least some of them in each instance, were actually voted at the meeting in question?
The trial judge said that the answer to that was no. He continued reading the question:
That is, does the act required 'to have been done by the accused' have to extend beyond procuring the completed proxy voting forms, allowing them to be listed and counted for the purpose of tabling them at the meeting and allowing them to be tabled?
It is worth again setting out the answer given by the trial judge:
The answer to that is 'yes'. The shares represented by the proxy forms: you need to consider whether you are satisfied beyond reasonable doubt that the shares represented by the proxy forms under consideration were voted; that is, taken into account in determining whether the resolution was passed.
The purpose of referring to that again is not to again refer to what seems to me to be the fatal error in stating the legal framework in which the relevant charges were to be decided, but because the questions make it clear that the jury were firmly seized of the fact‑finding process in relation to the issue about what occurred in the way of voting the shares at the general meetings in question.
Finally in support of these grounds, the appellants raise a comment made by the trial judge in the course of discussing with the jury the elements of those charges, of which there were a number against each appellant, which alleged that in documents of an official character they omitted to disclose their relevant interest in shares, without which disclosure the documents were, to the knowledge of the appellants, misleading in a material respect.
In the course of that discussion the trial judge said:
Obviously, if you did not find the accused person whose case you are considering had a relevant interest in the shares allegedly held, then no such disclosure was omitted from the document and, therefore, the document would not be misleading and the verdict must be not guilty. If you do find an accused person had a relevant interest in the particular charge you are considering, as I have explained, and given it was obviously omitted from the document, you would then go on to consider whether he knew the document was misleading. If you find the accused had a relevant interest, you might have little difficulty - it's a matter for you - in drawing an inference in all of the circumstances that the accused knew the document was misleading because of the omission of mention of that relevant interest. Obviously that initial finding is critical. If you don't make it: not guilty. If you do make that initial finding about relevant interest then you go on to consider other matters.
I can see nothing wrong with this. A comment is made, but it is made by reference to what the jury might consider to be the case and there is reinforcement of the proposition that it was a matter for them. The way in which the discussion by the trial judge is couched makes it abundantly clear, in my respectful opinion, that the jury was to decide the issue and find the facts unfettered by the observation or comment made by the trial judge.
Shortly after this was said, the jury retired for their morning tea break. As soon as they did so, senior counsel for Mr Smith (who did not appear before us) objected to the comment. Counsel intemperately described the comment as 'outrageous'. Counsel then compounded the impropriety by saying, 'I say that, your Honour, because I mean it.' Counsel later withdrew that observation.
When the jury returned to the courtroom and the trial judge resumed his charge, he reminded the jury that the question of what knowledge it might be inferred was possessed by the particular appellant whose case was under consideration was very much in dispute. Speaking about Mr Smith, the judge said, 'Firstly, it is disputed that he had a relevant interest; it's disputed that if he did, that he knew he did.' Again, in my opinion, those further observations, although unnecessary, were calculated to reinforce in the mind of the jury that it was their task to determine this issue of fact and they were not bound by any observation made by the trial judge to the effect that, 'you can draw an inference fairly easily, and I might have given the impression that it's not really a worry'.
In the final analysis then, in my respectful opinion, these grounds of appeal should not be upheld. The trial judge gave general instruction as to the division of function between judge and jury. He told the jury, in general terms, that the decision of the facts was exclusively their province. He contrasted that observation with the instructions that in relation to matters of law the jury were bound to accept the judge's direction. The clear implication was, in my view, that in relation to matters of fact they were not so bound, and the judge told the jury they were not bound to accept the arguments of counsel.
There was in my opinion at that point no misdirection which might have caused the jury to think that in relation to any part of the fact‑finding process they were bound to accept and act upon observations by the trial judge. Nor was any such thing conveyed to them in relation to the matters of which specific complaint is made. To the extent that they amounted to comments by the trial judge it was clear that they were no more than comments which left within the province and obligation of the jury the decision of the relevant facts. There was, in my view, no blurring of the lines of demarcation and no miscarriage of justice is established in the context of these grounds. It follows that I have no need to consider the application of the proviso, pursuant to s 30(4) of the Criminal Appeals Act, and no need to consider whether a retrial should be ordered in relation to the affected counts.
The remaining grounds of appeal against conviction
As to the discussion by Buss JA of the remaining grounds of appeal against conviction, I need only say that I respectfully agree with his Honour's conclusion for the reasons he gives, that none of these grounds are made out. In the result, I would only grant leave to appeal in relation to ground 9 advanced by Mr Smith and ground 5 advanced by Mr Corp. I would allow the appeal in relation to those grounds and I agree that in the circumstances the convictions of the offences in counts 2A, 2B, 3A, 3B, 4A, 4B, 5A, 5B, 8A and 8B should be set aside. In lieu thereof, I too would enter judgments of acquittal of those offences rather than ordering a retrial.
In Dyers v The Queen [2002] HCA 45; (2002) 210 CLR 285, the question was the directions required when persons who were potential witnesses were not called. Upon the High Court appeal, the question arose whether it was appropriate to order a new trial. Kirby J dissented upon that issue, but, usefully, at 314 ‑ 315 [82] ‑ [83] his Honour referred to a number of considerations generally accepted as being upon the question when a new trial should be ordered when a guilty verdict has been set aside and a conviction quashed.
I have had regard to that discussion and consider that, of particular relevance in this case in relation to the convictions which I agree should be quashed, are the facts that on the view which this court takes, the evidence at trial in relation to the casting of the proxy votes in respect of the counts in question could not, as a matter of law, prove the offences charged. In my view, that evidence could not establish that the votes were cast and that was the whole basis of the prosecution case.
At least to some extent, Mr Ruane having been called, evidence might have been led of what actually occurred at one of the meetings in question, and on a retrial it might be the case that other evidence would be available from persons who were present at the time. But if that evidence were to be adduced, it would be to support a prosecution case that the votes were actually cast rather than that they were simply taken into account because the proxy votes had been gathered and were available. Such a situation would, in my view, be tantamount to giving the prosecution an opportunity to supplement a defective case by presenting a case which was not that presented at trial. Having regard to those considerations, in my view it would not be proper that a new trial should be ordered, hence my conclusion that in lieu of the convictions set aside, judgments of acquittal should be entered.
I would otherwise not interfere with the judgments of conviction recorded upon the verdicts of the jury.
Sentence
I agree that on the view in relation to conviction taken by the majority, and having regard to the fact that their Honours would order a retrial in relation to each of the counts other than those mentioned above, of which originally each appellant was convicted, it is both unnecessary and undesirable that the appeals against sentence should be considered.
It would, however, have been necessary, if the final judgment of the court was as I propose, for those appeals to be considered and I think it would not simply be the case that the court would be obliged to consider whether the sentences for the remaining offences should be varied pursuant to s 30(6) of the Criminal Appeals Act. The trial judge adopted a complex sentencing structure, dating from 11 October 2007, involving partial accumulation of the sentences imposed for groups of like offences. The result for each of the appellants was an aggregate term of 3 years imprisonment dating from 11 October 2007, with a recognisance release order being available to be entered into on 2 February 2009. In the circumstances, I need express no view about the sentences imposed or the structure of the sentencing overall. Having regard to the orders to be made as a consequence of the view expressed by the majority in relation to conviction, I would suggest that the appeals against sentence should be dismissed.
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