Citation: Gregg v R [2020] NSWCCA 245
Court: NSW Court of Criminal Appeal
Date: 30 September 2020
Judges: Bathurst CJ; Hoeben CJ at CL; Leeming JA
Background
The appellant was the Chief Financial Officer of Leighton Holdings Limited (LHL), a major construction and resources holding company. He was convicted on two counts of falsifying company books, contrary to s 1307(1) of the Corporations Act 2001 (Cth). He was sentenced to concurrent terms of 12 months and 2 years imprisonment, to be served by way of an Intensive Correction Order.
The first count concerned a payment instruction the appellant authorised in August 2011 directing LHL's treasury to pay $15 million to a company called Asian Global Projects and Trading FZE. The stated purposes in that instruction were marketing and advisory services ($12.5 million) and a loan ($2.5 million). The Crown alleged these purposes were false. The second count concerned a "buy and sell agreement" signed in December 2011 but backdated to August 2011, also involving Asian Global. The Crown alleged this agreement was a sham.
The payments arose in the context of a broader commercial arrangement under which an affiliated Indian company had waived an obligation requiring LHL's subsidiary to inject funds into a joint venture company. The appellant authorised the $15 million payment two days after that waiver was granted. LHL's internal auditor subsequently began asking questions about the payment, after which the buy and sell agreement was signed and backdated.
Legal Issues
- Whether the trial judge erred in admitting evidence about the viability of centralised procurement of steel
- Whether the trial judge erred in refusing to admit a document (the Global Business Overview Presentation) on authenticity grounds
- Whether a mid-trial change in the Crown's case on count 1 (allowing conviction on proof of falsity of either stated purpose, rather than both) caused a miscarriage of justice
- Whether the jury directions on count 1 regarding the definition of "false" and recklessness were legally correct
- Whether the jury directions on count 2 correctly defined "false" in the context of a sham agreement, and correctly identified whose knowledge and intention was relevant to establishing sham
- Whether the prosecutor's closing address reversed the onus of proof through the use of rhetorical questions and references to an absence of evidence
- Whether the written summing-up presented both sides' cases fairly and in a balanced manner
- Whether the trial judge should have given a Mahmood direction (a direction warning the jury about the dangers of relying on the evidence of an accomplice or similar witness)
- Whether the verdicts were unreasonable and unsupported by the evidence
Decision
Evidence rulings: The Court of Criminal Appeal found no error in the admission of evidence about centralised steel procurement. Some of that evidence concerned factual matters about how the companies operated, and the opinion evidence was given by witnesses with adequate expertise. However, the trial judge did err in refusing to admit the Global Business Overview Presentation. The document was relevant and had a non-hearsay purpose. In reaching this conclusion, the Court declined to follow the rule in National Australia Bank Ltd v Rusu [1999] NSWSC 539, holding that the authenticity of a document can be established by reference to its own form and content. That aspect of Rusu was found to be incorrectly decided.
Count 1 directions: The change in the Crown's case during closing address, broadening the basis for conviction so that the jury needed only to be satisfied that either stated purpose was false (rather than both), was oppressive and caused a miscarriage of justice. The Court rejected a separate argument that the count was rendered duplicitous by this change. The two entries on the payment instruction constituted a single act of criminality under s 1307 of the Corporations Act. The direction on recklessness was not affected by error.
Count 2 directions: The trial judge's direction on "false" was affected by error because it incorporated a definition of falsity (including backdating and excluding any dishonesty requirement) that was carried over from count 1, which was inappropriate given count 2 was put entirely on the basis of sham. A sham agreement requires proof that both parties, to each other's knowledge, intended the agreement to have no legal effect and acted dishonestly. The direction on the general elements of sham was otherwise legally sound. However, the direction that identified a specific individual (Mr Khemka) as the directing mind of Asian Global was also affected by error. The jury should have been directed to determine who was actually responsible for Asian Global entering the agreement, and then to attribute that person's intention and knowledge to the company.
Prosecutor's closing address and summing-up: The Court found that several aspects of the prosecutor's address, including repeated rhetorical questions posed immediately after noting that the appellant had not given evidence, created a risk that the jury would treat that silence as evidence of guilt, effectively reversing the onus of proof. Taken together with the identified errors in the jury directions and the written summing-up's failure to present the defence case in a fair and balanced way, the Court concluded there had been a miscarriage of justice. Having found multiple serious errors, the Court also held that the verdicts were unreasonable on the evidence. Verdicts of acquittal were entered on both counts.
Orders Made
- Appeals against conviction allowed
- Verdicts of guilty on both counts quashed
- Verdicts of acquittal entered on both counts
- (Sentence appeal did not require determination given the acquittals)
Key Takeaways
- The Court of Criminal Appeal confirmed that the rule in National Australia Bank Ltd v Rusu, so far as it holds that a document's authenticity cannot be established from its own form or content, was incorrectly decided and should not be followed.
- A mid-trial change in the Crown's case that broadens the basis for conviction, without adequate notice or opportunity for the defence to respond, can constitute an oppressive change of case resulting in a miscarriage of justice.
- Proving a sham agreement under s 1307 of the Corporations Act requires that both parties, to each other's knowledge, intended the agreement to have no legal effect and acted dishonestly. A direction that defines "false" to exclude dishonesty is legally erroneous when applied to a sham-based count.
- Where a company is a party to an alleged sham, a jury direction must identify who was responsible for the company entering the agreement and attribute that person's knowledge and intention to the company. Directing a jury to a single named individual as the relevant "directing mind," without further inquiry, is an error.
- Repeated rhetorical questions in a prosecutor's closing address, posed immediately after noting an accused's silence, risk reversing the onus of proof and can contribute to a finding of miscarriage of justice even where the trial judge later gives appropriate directions.
Legislation and Cases Referenced
Legislation:
- Corporations Act 2001 (Cth), s 1307(1)
- Evidence Act 1995 (NSW), s 55
- Criminal Code Act 1995 (Cth)
Key Cases:
- National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539 (not followed)
- Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55
- Snook v London and West Riding Investments Ltd [1967] 2 QB 786
- Lewis v Condon (2013) 85 NSWLR 99; [2013] NSWCA 204
- Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88
- Australian Competition and Consumer Commission v Air New Zealand (No 1) (2012) 207 FCR 448; [2012] FCA 1355
- Capital Securities XV Pty Ltd v Calleja [2018] NSWCA 26
- Bank of Valletta PLC v National Crime Authority (1999) 90 FCR 565; [1999] FCA 1099
- Environment Protection Authority v Truegain Pty Ltd (2013) 85 NSWLR 125; [2013] NSWCCA 204
- Tesco Supermarkets Ltd v Nattrass [1972] AC 153
- SKA v The Queen (2011) 243 CLR 400; [2011] HCA 13
- Bilta (UK) Ltd (in liq) v Nazir (No 2