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11
Court of Criminal Appeal 13 May 2014

DSJ v R; NS v R

[2014] NSWCCA 77

Fraud & dishonesty
APPEAL APPEAL GENERAL PRINCIPLES RIGHT OF APPEAL WHEN APPEAL LIES FROM INTERLOCUTORY DECISIONS

Citation: DSJ v R; NS v R [2014] NSWCCA 77
Court: Court of Criminal Appeal
Date: 13 May 2014
Judge(s): Gleeson JA (primary reasons); Hidden J (agreeing); Rothman J (agreeing with additional observations)

Background

Two co-accused faced a 20-count indictment for insider trading offences under the Corporations Act 2001 (Cth). The first accused (DSJ) was charged with 10 counts of procuring the second accused (NS) to acquire financial products whilst in possession of inside information. NS faced a corresponding 10 counts of acquiring those financial products whilst in possession of that inside information. The alleged conduct concerned shares and contracts for difference in seven listed companies, with the connection between the accused running through DSJ's employer, Moody's, which had received confidential information from those companies.

The Crown served a Coincidence Notice under s 98 of the Evidence Act 1995, seeking to use the evidence from each individual count as coincidence evidence on every other count. Each accused applied for separate trials and for a ruling excluding the coincidence evidence. The trial judge (Hall J) rejected both applications across a series of judgments delivered between 2011 and 2013. This proceeding was the accused's second attempt to obtain appellate review of those rulings.

The Court of Criminal Appeal had previously granted limited leave and allowed an earlier appeal on a narrow point concerning the correct method of evaluating significant probative value under s 98, remitting the matter to Hall J for reconsideration. Hall J reconsidered and reached the same conclusion. The present applications sought leave to appeal against the orders following that reconsideration.

Legal Issues

  • Whether leave to appeal should be granted under s 5F(3)(a) of the Criminal Appeal Act 1912 against interlocutory orders refusing to order separate trials
  • Whether the trial judge correctly construed and applied s 21 of the Criminal Procedure Act 1986 in declining to sever the counts
  • Whether the trial judge correctly construed and applied s 98 and s 101 of the Evidence Act 1995 in admitting the Crown's coincidence evidence
  • Whether the trial judge failed to separately consider the admissibility of the coincidence evidence against each accused
  • Whether the trial judge failed to consider jury directions as part of the admissibility and prejudice assessment
  • Whether the trial judge failed to have regard to other admissible evidence (from Judgment No 4 and Judgment No 5) when assessing the severance question
  • Whether the present case was distinguishable from R v Gale; R v Duckworth

Decision

Principles governing leave: The Court confirmed that leave to appeal against interlocutory orders under s 5F of the Criminal Appeal Act 1912 should not be granted readily. A ruling on the admissibility of evidence is not itself an interlocutory order and cannot independently be the subject of appeal under s 5F. Where an application for separate trials is predicated substantially on an evidentiary ruling, that circumstance is a strong factor against granting leave, though it does not make leave automatically unavailable.

DSJ's Grounds 1 and 2 (separate trials and s 21): The Court found no error in the trial judge's approach to the severance application. Hall J did not confine himself to the question of coincidence evidence admissibility. He expressly considered each of the eight prejudice factors advanced by DSJ, including the complexity of the trial, the risk of jury overwhelm, the difficulty of drafting appropriate directions, and the personal burden on the accused. His reliance on case management directions and trial directions to address those concerns was open to him on the material. His reference to Ludlow v Metropolitan Police Commissioner did not involve adopting any erroneous "special feature" test. The absence of express reference to the rulings in Judgments No 4 and No 5 within Judgment No 3 did not establish a failure to take that evidence into account, given Hall J's evident awareness of those admissibility determinations. Leave was refused.

DSJ's Grounds 3 and 4 (s 98 and s 101 construction and application): The contention that the "events" in the Coincidence Notice were not proper events but were themselves the acts and states of mind to be proved was a re-agitation of an argument on which this Court had already refused leave at an earlier application. No new basis for doubting the trial judge's reasons on reconsideration was demonstrated. Complaints about impermissible inferences, alleged conflation of "confidential information" and "inside information," and the trial judge's reliance on s 1042A of the Corporations Act either did not disclose error or raised matters properly resolved at trial. Detailed count-by-count attacks on the capacity of the evidence to meet the s 98 threshold did not raise any question of principle warranting leave. Leave was refused.

DSJ's Ground 5 (impact of Judgments No 4 and 5): This ground substantially repeated the arguments addressed under Grounds 1 and 2. The Crown's earlier exclusion of the uncharged acts as coincidence evidence under s 98 did not preclude their admission on a different basis under s 55, and the trial judge's awareness of both rulings was apparent from the text of his reasons. Leave was refused.

NS's Ground 1 (separate consideration of NS's position): The contention that Hall J treated admissibility as a single composite question for both accused was not borne out by the reasons. His Honour separately identified the Coincidence Notice's application to NS, distinguished the matters in issue for each accused at multiple points, and expressly acknowledged that his conclusions applied to counts 1 to 10 and counts 11 to 20 distinctly. Leave was refused.

NS's Ground 2 (probative value assessment): Hall J did not approach the matter by first admitting evidence and then considering its use. His reasons made clear that the proposed use was part of the admissibility analysis. The argument that the judge impermissibly inflated probative value by reference to relationship evidence was rejected, as relationship evidence had independent relevance to the Crown case. Detailed factual challenges to the evidence's capacity to prove NS's state of mind were characterised as matters for the jury, not for the leave application. Leave was refused.

NS's Ground 3 (adequacy of reasons): The trial judge's analysis under Part F of Judgment No 3 adequately addressed the arguments advanced by NS on the capacity of the evidence to meet the s 98 threshold, including the role of telephone call multiplicity and internet checking. Leave was refused.

NS's Ground 4 (jury directions): Hall J gave considered attention to the directions that would be required, while appropriately acknowledging that their precise formulation would depend on the evidence as it emerged at trial. Rothman J added that requiring a trial judge to frame specific directions at the pre-trial stage whenever unfair prejudice is raised would impose an intolerable burden. Leave was refused.

NS's Ground 5 (Gale; Duckworth): This ground depended on the Court accepting that Hall J was wrong to find the Crown was relying on established similarities rather than assumed facts. That finding was not attended with sufficient doubt to warrant leave. Leave was refused.

NS's Ground 6 (GasNet count): Hall J expressly addressed the divergences argument in relation to the GasNet count on multiple occasions, including in the Schedule to Judgment No 3. His conclusion that the divergences were insufficient to deprive that count's evidence of its probative capacity was open on the material. Leave was refused.

Rothman J's additional observations: Rothman J noted that the circularity of the coincidence reasoning in a case where the underlying conduct is entirely innocent absent proof of inside information created real difficulties, particularly for jury directions. He observed that the evidentiary issues might otherwise have warranted leave, but a prior determination by the Court on those issues made it inappropriate for the Court as then constituted to revisit them. He also emphasised that any error in jury directions, or miscarriage of justice arising from inadequate directions, remained grounds for an appeal against conviction.

Orders Made

  • DSJ v R (2010/34654): Application for leave to appeal dismissed.
  • NS v R (2010/40493): Application for leave to appeal dismissed.

Key Takeaways

  • Leave to appeal under s 5F(3) of the Criminal Appeal Act 1912 against a refusal to order separate trials is not readily granted, and the fact that the refusal turns substantially on an evidentiary ruling is a significant factor weighing against leave, even though it does not automatically preclude the application.
  • A trial judge's conclusion that jury directions can adequately address the risk of misuse of coincidence evidence does not require the judge to formulate those directions in precise terms at the pre-trial stage; the Court of Criminal Appeal confirmed that requiring such specificity would impose an intolerable burden on trial judges.
  • Where this Court has already refused leave to appeal on a particular ground in an earlier application arising from the same proceedings, re-agitating substantially the same argument on a subsequent application is a significant consideration against granting leave.
  • Under s 98 of the Evidence Act 1995, detailed count-by-count challenges to the capacity of evidence to meet the significant probative value threshold are characterised as arguments for the jury rather than grounds warranting interlocutory appellate intervention.
  • Rothman J's additional reasons confirm that any unfair prejudice flowing from trial directions or their inadequacy, if an accused is convicted, remains fully available as a ground on an appeal against conviction, and that protection informed the refusal of leave in the present applications.

Legislation and Cases Referenced

Legislation
- Constitution s 80
- Corporations Act 2001, s1042A, 1043A
- Criminal Appeal Act 1912, s5F
- Criminal Procedure Act 1986, s21
- Evidence Act 1995, s55, 97, 98, 101 and 137

Cases
- Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; 148 CLR 170
- DAO v R [2011] NSWCCA 63; 81 NSWLR 568
- De Jesus v R [1986] HCA 65; 68 ALR 1
- DPP v Boardman [1975] AC 421
- DPP v Kilbourne [1973] AC 729
- DSJ v R; NS v R [2011] NSWCCA 222
- DSJ v R; NS v R [2012] NSWSC 409
- DSJ v R; NS v R [2012] NSWCCA 9; 84 NSWLR 758
- Hoch v The Queen (1998) 165 CLR 292
- Holborn v Guardians of Union Chertsey (1884) 15 QBD 76
- House v R [1936] HCA 40; 55 CLR 499
- In re the Will of F B Gilbert (deceased) (1946) 46 SR (NSW) 318
- Kocer v Regina [2006] NSWCCA 328
- Ludlow v Metropolitan Police Commissioner [1971] AC 29
- Maxwell v Keun [1928] 1 KB 645
- Noor Mohamed v The King [1949] AC 182
- Peterborough v Overseers of the Parish of Wilsthorpe (1883) 12 QBD 1
- Queanbeyan City Council v Environment Protection Authority [2011] NSWCCA 108
- R v DSJ; R v NS [2011] NSWSC 894
- R v DSJ; R v NS (No 3) [2013] NSWSC 471
- R v DSJ; R v NS (No 4) [2013] NSWSC 472
- R v DSJ; R v NS (No 5) [2013] NSWSC 473
- R v Einfeld [2008] NSWCCA 215; 71 NSWLR 31
- R v Ellis [2003] NSWCCA 319; 58 NSWLR 700
- R v Frazer [2002] NSWCCA 59; 128 A Crim R 89
- R v Gale; R v Duckworth [2012] NSWCCA 174; 217 A Crim R 487
- R v Georgiou [1999] NSWCCA 125
- R v JGW [1999] NSWCCA 116
- R v Lock (1997) 91 A Crim R 356
- R v Lockyer (1996) 89 A Crim R 457
- R v Powch (1988) 14 NSWLR 136
- R v Smith [1981] 1 NSWLR 193
- R v Steffan (1993) 30 NSWLR 633
- R v Van Phu Ho (NSWCCA, 18 July 1994, unreported)
- Re Lamb [1894] 2 QB 805
- Sali v SPC Ltd (1993) 67 ALJR 841
- Saunders v R (1994) 72 A Crim R 347
- Shepherd v The Queen (1990) 175 CLR 573
- Sutton v R [1984] HCA 5; 152 CLR 528
- Verma v R (1987) 30 A Crim R 441