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District Court 4 August 2023

R v Bigatton (No 3)

[2023] NSWDC 291

Fraud & dishonesty
FINANCIAL SERVICES FINANCIAL PRODUCT ADVICE APPLICATION TO QUASH INDICTMENT RULE AGAINST DUPLICITY

Citation: R v Bigatton (No 3) [2023] NSWDC 291
Court: District Court of New South Wales
Date: 4 August 2023
Judge: Newlinds SC DCJ

Background

The accused faced a two-count indictment filed in April 2023. Count 2 alleged a contravention of section 911B(1) of the Corporations Act 2001, which prohibits a person from carrying on a financial services business on behalf of another unless certain licensing and authorisation conditions are met. The alleged conduct concerned the accused providing financial product advice on behalf of persons described as the proprietors of the BitConnect lending platform over a period of approximately six months.

Before the trial commenced, the accused brought a pretrial application to quash Count 2. The application raised questions about whether the count disclosed a known offence, whether rolling together multiple instances of alleged financial advice breached the rule against duplicity, and whether the indictment adequately identified the relevant "principal" under section 911B(1).

Legal Issues

  • Whether Count 2 of the indictment disclosed a criminal offence known to law, given that the statutory definition of "financial service" requires tracing through cascading definitions to reach "financial product advice" under section 766B
  • Whether charging multiple instances of the provision of financial product advice in a single count offended the rule against duplicity
  • Whether section 766B, drafted in the singular, precluded a course of conduct interpretation
  • Whether more than one person could be identified as the "principal" for the purposes of section 911B(1)
  • Whether each individual statement, recommendation or report required a separate count on the indictment
  • What particulars the Crown should be required to provide in relation to Count 2

Decision

Issue 1: Whether Count 2 disclosed a known offence

The court found that Count 2 did disclose a criminal offence on its face (at [65]). Reading sections 766B, 766A(1) and 911B(1) together, the court accepted the Crown's submission that the prohibition in section 911B(1) permits the Crown to rely on a course of conduct over a specified closed period, which may involve multiple examples of the provision of financial product advice (at [59]).

Issue 2: Duplicity and the course of conduct approach

The court found the rolled-up approach in the indictment was not impermissibly duplicitous (at [65]-[66]). Drawing on the House of Lords decision in Merriman and the High Court's reasoning in Walsh v Tattersall and Cheung v R, the court distilled the test as requiring an application of statutory construction, common sense, fairness, and practical considerations rather than any strict formula (at [44]-[50]). The court acknowledged that temporal and geographic gaps between the alleged statements supported the accused's argument but found those factors were not determinative (at [66]). The court identified a series of discrete acts of a similar nature that were sufficiently connected to be characterised as a single course of conduct (at [66]).

Issue 3: Singular language in section 766B

The court rejected the argument that the singular drafting of section 766B compelled a reading limited to individual, granular instances of conduct (at [60]-[64]). Section 23 of the Acts Interpretation Act 1901 (Cth) requires singular statutory provisions to be read in the plural unless a contrary intention is expressed or implied, and the court found no such contrary intention in the Corporations Act (at [61]-[64]).

Issue 4: Multiple principals under section 911B(1)

The court rejected the submission that section 911B(1) could only identify one person as the "principal" for any given instance of advice. The court held that the "other person" referred to in the provision could be one person, multiple persons working in concert, or a combination of both (at [68]-[69]). The court noted some discomfort with the phrase "proprietors of the BitConnect lending platform" but found that the Crown's provision of particulars identifying four specific persons cured any practical concern (at [70]-[71]).

Issue 5: Separate counts for each statement

The argument that each individual recommendation, opinion or report required its own separate count was ultimately abandoned by the accused (at [73]). The court observed that this argument, which would have required separate counts for each opinion or recommendation within a single presentation, took the primary submission "to the realms of absurdity" (at [73]).

Issue 6: Particulars

The court did not quash the count but directed that the Crown provide fulsome particulars of each instance of alleged financial advice, identifying whether each particular constitutes a recommendation, statement of opinion, report, or a combination (at [76]-[79]).

Orders Made

  • The accused's application to quash Count 2 of the indictment dated 4 April 2023 was dismissed.
  • The Crown was directed to provide fulsome particulars of the instances of financial product advice alleged to contravene section 766B, identifying the nature of each particular.

Key Takeaways

  • A single count under section 911B(1) of the Corporations Act 2001 may encompass a course of conduct involving multiple instances of financial product advice provided over a closed period, provided those acts are sufficiently connected by their nature and common purpose (at [59], [66]).

  • The rule against duplicity does not yield to a single precise legal test. The District Court confirmed that the question is resolved by applying a composite of statutory construction, common sense, fairness, and a practical assessment of fact and degree, with no one principle being determinative (at [44]-[50]).

  • Under section 23 of the Acts Interpretation Act 1901 (Cth), singular language in a statutory definition does not automatically confine a criminal charge to a single act; a contrary intention must appear expressly or by clear implication from the statute (at [61]).

  • Two Federal Court decisions in civil proceedings (Oxford Investments and Monarch FX Group) that proceeded on a course of conduct basis under section 911B(1), while not binding authority, were given some weight as support for a course of conduct interpretation, even though the duplicity point was not argued in those cases (at [53]-[55]).

  • Where a rolled-up indictment is not quashed, a court may still require the Crown to particularise each alleged instance of the prohibited conduct, including the nature of each instance as a recommendation, opinion, or report, to ensure the accused has a proper opportunity to meet the case (at [76]-[79]).

Legislation and Cases Referenced

Legislation
- Acts Interpretation Act 1901 (Cth), s 23
- Corporations Act 2001 (Cth), ss 911B(1)(a)-(d), 1311(1), 761F, 761FA
- Criminal Procedure Act 1986 , s 17 Ch 2
- Liquor Licensing Act 1977 (South Australia)

Cases
- Australian Securities and Investments Commission v Monarch FX Group Pty Ltd [2014] FCA 1387
- Australian Securities and Investments Commission v Oxford Investments (Tasmania) Pty Ltd [2008] FCA 980
- Cheung v R (2001) 209 CLR 1 [2001] HCA 67.
- Director of Public Prosecutions v Merriman [1973] AC 584
- Johnson v Miller (1937) 59 CLR 467
- Montgomery v Stewart (1967) 116 CLR 220, [1967] HCA 11
- R v Fenwick (1953) 54 SR (NSW) 147
- R v Gian (1999) 104 A Crim R 416
- R v Moussad (1999) 152 FLR 373
- S v The Queen (1989) 168 CLR 266
- Walsh v Tattersall (1996) 188 CLR 77