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10
Court of Criminal Appeal 19 July 2019

Roach v R

[2019] NSWCCA 160

Fraud & dishonesty
CRIME FRAUD S 192E CRIMES ACT 1900 (NSW). CRIME FALSE INFORMATION TWO FALSE OR MISLEADING ANNOUNCEMENTS FALSIFICATION OF BOOKS

Citation: Roach v R [2019] NSWCCA 160
Court: NSW Court of Criminal Appeal
Date: 19 July 2019
Judges: Bathurst CJ, Bell P, Johnson J

Background

The applicant was the Executive Chairman and Chief Executive Officer of Healthzone Ltd, an ASX-listed company. He was convicted by a jury on nine counts arising from conduct relating to Healthzone's affairs. The offences spanned both NSW and Commonwealth law and centred on the dishonest procurement of a $1 million bank advance, the lodgement of false ASX announcements, and the falsification of company records.

The conspiracy charge (Count 1) alleged that the applicant and a co-director agreed to obtain a $1 million advance from the Commonwealth Bank of Australia by falsely representing to Healthzone's board and the bank that the funds would be used to acquire Healthzone shares. In fact, the funds were used to repay a personal debt of approximately $900,000 owed by the applicant. The ASX announcement charges (Counts 2 and 3) alleged two false lodgements stating that the applicant had purchased Healthzone shares when no such purchase had occurred. Counts 4 to 9 alleged that the applicant falsified books of Healthzone, including board minutes, solicitor correspondence, and bank correspondence.

The applicant was sentenced to a total term of four years and three months imprisonment, with an effective minimum term of two years and three months. He sought leave to appeal against both conviction and sentence.

  • Whether the trial judge's directions on the conspiracy count gave rise to duplicity or latent ambiguity causing a miscarriage of justice
  • Whether a NSW State offence (Count 1) was properly joined in the same indictment as Commonwealth offences (Counts 2 to 9) under s 29 of the Criminal Procedure Act 1986 (NSW)
  • Whether it was permissible to join substantive offences to a conspiracy count in the same indictment
  • Whether the documents alleged to have been falsified were "books" of Healthzone within the meaning of s 1307 of the Corporations Act 2001 (Cth)
  • Whether the tender and use of Exhibit 1 (two volumes of documents) and the extended evidence of the applicant created unfairness at trial
  • Whether the applicant was denied a fair trial due to the incompetence of his trial counsel
  • Whether the overall sentence was manifestly excessive

Decision

Duplicity in the conspiracy direction: The Court accepted that the trial judge's additional directions suggesting three alternative agreements capable of grounding the conspiracy count gave rise to latent duplicity or latent ambiguity. However, it refused leave to appeal on this ground, finding no miscarriage of justice. The applicant had not lost a real chance of acquittal as a result of those directions.

Joinder of State and Commonwealth offences: The Court found that all offences arose "out of the same set of circumstances" within s 29(1)(b) of the Criminal Procedure Act 1986 (NSW), and there was no basis to conclude the interests of justice required separate trials. The joinder was therefore proper. The Court also found no error in joining the substantive offences to the conspiracy count, noting the Crown did not obtain any forensic advantage from doing so.

"Books" of the company under s 1307: Leave to appeal was granted on this ground, but the appeal was dismissed. The Court held that falsified company minutes fell squarely within s 1307, as minutes are documents the company is required to keep under s 251A and make available to members under s 251B of the Corporations Act. The correspondence from Healthzone's solicitor and the bank correspondence were also held to be "books" of Healthzone, having regard to the identity of those who created them, their subject matter, and their purpose.

Remaining grounds: The Court found no unfairness arose from the tender of Exhibit 1 or the extended evidence the applicant chose to give. The Court refused leave to appeal on the incompetent counsel ground, finding the applicant was not denied a fair trial and was not deprived of a fair chance of acquittal. Leave to appeal against sentence was also refused, the total term being a reasonable exercise of the sentencing judge's discretion. The Court described the application as bearing the hallmarks of an "armchair appeal," where counsel not involved at trial searched the record for error without regard to how the trial was actually conducted, and cautioned that such appeals and dubious incompetence claims would not be encouraged.

Orders Made

  • Leave granted (under r 4, Criminal Appeal Rules) for the applicant to raise ground 3(b) (the "books" construction issue)
  • Leave refused under r 4 to raise grounds 1(a)-(d), 2(a)-(e) and 3(a) and (c)
  • Leave refused under s 5(1)(b) of the Criminal Appeal Act 1912 (NSW) to rely upon ground 4 (incompetent counsel)
  • Appeal against conviction dismissed
  • Leave to appeal against sentence refused

Key Takeaways

  • Under s 1307 of the Corporations Act 2001 (Cth), documents constitute "books" of a company where they form part of the company's records and bear a sufficient connection to the company's affairs, assessed by reference to who created them, their subject matter, and their purpose.
  • Company board minutes required to be kept under s 251A and made available to members under s 251B of the Corporations Act fall within the scope of s 1307 and can ground a falsification of books charge.
  • A State offence and Commonwealth offences may be joined in the same indictment under s 29(1)(b) of the Criminal Procedure Act 1986 (NSW) where all charges arise "out of the same set of circumstances," even if they derive from different legislative regimes.
  • Latent duplicity or latent ambiguity in jury directions on a conspiracy count does not automatically warrant a new trial; the applicant must demonstrate a lost real chance of acquittal amounting to a miscarriage of justice.
  • The Court of Criminal Appeal reinforced that "armchair appeals" constructed by searching a trial record for technical error, and generalised incompetence claims deployed as a workaround to procedural leave requirements, are approaches the court does not encourage.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), s 192E
- Corporations Act 2001 (Cth), ss 1307, 1309, 1311, 251A, 251B
- Criminal Procedure Act 1986 (NSW), s 29
- Criminal Appeal Act 1912 (NSW), s 5
- Criminal Appeal Rules (NSW), r 4
- Evidence Act 1995 (NSW)
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Crimes Act 1914 (Cth)

Key Cases
- Johnson v Miller (1937) 59 CLR 467
- Gerakiteys v The Queen (1984) 153 CLR 317
- The Queen v Hoar (1981) 148 CLR 32
- Kentwell v The Queen (2014) 252 CLR 601
- Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160
- Australian Securities and Investments Commission v Rich (2005) 216 ALR 320
- Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27
- ARS v R [2011] NSWCCA 266
- Darwiche v R (2011) 209 A Crim R 424
- Nudd v The Queen [2006] HCA 9
- Caratti v R (2000) 22 WAR 527