Hopwood v The Queen (SLA) A29/1998 [1998] HCATrans 365 (9 October 1998)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A28 of 1998

B e t w e e n -

TIMOTHY PAUL HOPWOOD

Applicant

and

THE QUEEN

Respondent

Office of the Registry

Adelaide No A29 of 1998

B e t w e e n

MARTIN FRANCIS BYRNES

Applicant

and

THE QUEEN

Applications for special leave to appeal

GUMMOW J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 OCTOBER 1998, AT 12.20 PM

Copyright in the High Court of Australia

__________________

MR T.A. GRAY, QC: May it please the Court, I appear with my learned friend, MR K.V. BORICK, for the applicant Hopwood, and with my friend, MR G.B. HEVEY, for the applicant Byrnes. (instructed by Haarsmas Lawyers)

GUMMOW J: Now, we have called these two matters together which indicates that they are literally to be heard together with the one time quotient.

MR GRAY: Yes, your Honour.

GUMMOW J: Yes, Mr Martin.

MR B.R. MARTIN, QC: May it please the Court, I appear with my learned friend, MR R. PERROTTA, for the respondent, in both matters. (instructed by the Commonwealth Director of Public Prosecutions)

GUMMOW J: Now, Mr Martin, there are a number of documents being generated from your opponent. The last one is an undated document headed "Applicants' Combined Supplementary Reply", "Issues Raised, 1, 2, 3 and 4."

MR MARTIN: Yes, your Honour.

GUMMOW J: Can I say this to you? At the moment we are not attracted to the other grounds urged by Mr Gray's side. We would like to hear you on what you would say about these grounds, treating these issues raised, 1 to 4, as if they would be the grounds of appeal.

MR MARTIN: Yes, your Honour. Does the Court have our supplementary summary of argument on this additional special leave question? It is a document that we seek leave to file.

KIRBY J: This is the respondent's supplementary summary of argument?

MR MARTIN: That is correct, your Honour.

GUMMOW J: Yes, we have that and have read it.

MR MARTIN: Thank you, your Honour.

If the Court pleases, the first issue that is raised in the supplementary reply is whether the offences are offences against Commonwealth law or State law. Now, in our submission, it is quite clear that these offences remain offences against State law. The beginning of that is the fact that we had the Alice Springs agreement which is referred to in the explanatory memorandum and then the terms of the explanatory memorandum itself.

May I remind the Court that we are here concerned with offences against the co-operative scheme laws; not here to determine whether an offence against a national scheme law is a Commonwealth - - -

KIRBY J: No, we know this.

MR MARTIN: What is quite clearly set out in the Act is that these co-operative scheme offences are to remain State offences; offences against State law although, for the purposes of the enforcement powers and the exercise of various powers and functions, they are to be treated as if they were offences against Commonwealth law.

If the Court pleases, the explanatory memorandum is attached to our supplementary submission and the various parts to which we have drawn attention in our submission demonstrate that the intention of the legislature was to apply these laws as laws of the State. That appears, for example, in the explanatory memorandum, paragraphs 10 and 11. In terms of the particular matter we are concerned with, the transitional arrangements for the co-operative scheme, might I draw the Court's attention to paragraph 45 of the explanatory memorandum which is the beginning of the discussion about the co-operative scheme offences and the transitional arrangements. At the top of page 18, in the fourth line, it indicates that the:

Offences.....will be treated for the purposes of investigation and prosecution as if they are offences against Commonwealth law -

and then it goes on:

However, recognising that these matters are and remain matters of State law -

et cetera, and then paragraph 49, on page 19, refers to:

the interests of more effective enforcement and administration, the ASC, AFP and the DPP will be given -

some powers -

to prosecute co-operative scheme law offences. However, as noted above, fundamentally these offences remain matters of State law (albeit administered by the Commonwealth) and therefore custody, bail, the procedure for bringing offenders to trial.....will remain a matter of State law. Consistently with that approach, the substantive law applicable to such matters as procedure.....will remain matters of State law.

KIRBY J: This demonstrates the purpose of the federal executive government.

MR MARTIN: That is correct, your Honour.

KIRBY J: And of the State governments, I suppose, one could say.

MR MARTIN: Yes, it does.

KIRBY J: But that does not necessarily foreclose argument. Sometimes there is a slip betwixt the cup and the lip.

MR MARTIN: That is so, your Honour, but we suggest, with respect, that has not occurred on this occasion. The second reading speech of the South Australia Legislative Council confirms the intention. Then section 1(2)(a) of the State Corporations Act 1990 , the Corporations(South Australia) Act - - -

GUMMOW J: That is under tab 3?

MR MARTIN: Yes, your Honour.

GUMMOW J: I am looking at Mr Gray's compilation. You provided one as well.

MR MARTIN: I think we provided, in fact, the complete - yes, it is No 3. We provided the complete Act. It is section 1(2)(a):

The purposes of this Act are -

(a) to apply certain provisions of the Corporations Act 1989 of the Commonwealth.....as laws of South Australia -

and that whole theme is carried through the various sections. Section 7(1), for example:

The Corporations Law set out in section 82 of the Corporations Act 1990 as in force for the time being -

(a) applies as a law of South Australia -

and that is consistent with the whole purpose of the scheme.

GUMMOW J: I just wonder if issue 1 may not crop up, one way or another, in some of the other issues as well.

MR MARTIN: I am sorry, your Honour, we - - -

GUMMOW J: Issue 1 may not be drawn in one way or another in the course of argument on issues 2, 3 and 4.

MR MARTIN: Well, there may be some overlapping there but, your Honour, if we follow through, the fundamental theme of the arrangement as explained and as enacted in this Corporations (South Australia) Act was to have laws of South Australia but to import in the functions and powers in the Commonwealth laws as part of the operation so that it could be enforced, et cetera, by the Commonwealth authorities. In effect, we have mirror legislation but it is quite clear in the terms of the Act - - -

GUMMOW J: Is this expression "mirror legislation" - - -

MR MARTIN: Perhaps I had better not start talking about mirrors, they can be a bit deceptive.

GUMMOW J: That is right.

MR MARTIN: But the fact of the matter is that when one looks at the Corporations Act of the Commonwealth and the State Corporations Act, they complement each other to achieve the purpose but nevertheless they remain State laws. If one looks, it is the object of enforcement, for example, in section 26. This is wider, of course. This is talking about the national scheme laws. This is wider than the co-operative scheme laws. We see that the object is to have State laws enforced on a national basis. If we go to section 85, section 85 provides:

the co-operative scheme laws, which are to continue to operate of their own force.....in so far as the national scheme laws do not deal with those matters.

Section 91 is then concerned with the:

Conferral of the functions and powers in relation to co-operative scheme laws.

Now, with respect, for a State legislature to say, for the purposes of enforcement this offence against the State law is to be taken as an offence against the national scheme law is not to convert it into a Commonwealth offence, and there is no reasonable argument that it does so, which is really what my friend is saying, "Well, here is the issue.", but he has not pointed to anything to support the proposition that it does so.

Of course, if the Court is with us on section 91(1)(a) then no question arises. That is, there is no need for resort to the powers of the DPP under the national scheme law. Section 91(1)(a) directs that:

The Commonwealth Director of Public Prosecutions -

(a) has the same enforcement powers in relation to the co-operative scheme laws as has the -

State Director of Public Prosecutions. Now, if the Court accepts our proposition that the power to seek leave to appeal comes within the definition in section 91(5), that is - - -

KIRBY J: This is, after all, a State Act and it has used a particular formula within the content of the State Act but it remains, from beginning to end, a State Act.

MR MARTIN: That is correct, your Honour.

GUMMOW J: Now, we understand the force of what you are saying about issue 1 but there does seem to be a point, putting it no higher than that, as to issue 2. What would you want to say about issue 2?

MR MARTIN: We would suggest, with respect, there is no realistic point on issue 2. What the applicant attempts to say is this - - -

GUMMOW J: He may be right on issue 2, even though he fails on issue 1, is what I was trying to put to you.

KIRBY J: First of all, there is no express power for you to bring an application for leave to appeal, is there, in your office?

MR MARTIN: Your Honour, if we rely upon section 68, that is right.

KIRBY J: So, you have to get it in by some other vehicle.

MR MARTIN: Yes.

KIRBY J: And it is a convoluted - - -

MR MARTIN: That is if 91(1)(a) does not apply.

GUMMOW J: Yes, yes, we understand that.

MR MARTIN: That is the first one. So, we do not get to this, but if we get to this point where we say the power is the same power the DPP has in respect of offences against ACT Corporations Law, that is when we have indicated that brings in section 68. Now, with respect, if my friend is right that an application for leave to appeal is not covered by the terms of section 68 of the Judiciary Act - - -

KIRBY J: First of all, section 91(1)(a) is enforcement powers. That is a phrase that is defined.

MR MARTIN: In subsection (5).

KIRBY J: "Enforcement power" in subsection (5) includes "the institution and carrying on of a prosecution of an offence". There is no express mention of appeal.

MR MARTIN: No, I agree with that, your Honour.

KIRBY J: No express mention of applying for leave to appeal.

MR MARTIN: No. We say 5(d):

matters relating to such an investigation, arrest, custody or prosecution.

We would suggest - - -

KIRBY J: How can you say an appeal is a matter relating to a prosecution?

MR MARTIN: Well, that is our proposition, your Honour, because it is an inevitable consequence of - - -

KIRBY J: The prosecution is spent. The prosecution is merged in the verdict.

MR MARTIN: I suppose that is one way to look at it, your Honour. We would say, necessarily, that a prosecution entails the whole criminal procedure through to its conclusion.

KIRBY J: Well, that is the argument, but it is - - -

GUMMOW J: You may be right but there is a point, perhaps, there.

KIRBY J: It is a not unimportant point for your clients.

MR MARTIN: If that is your Honour's view then I am in deep trouble, obviously.

GUMMOW J: Well, just at the threshold.

KIRBY J: You are not in ultimate deep trouble.

MR MARTIN: No, no, quite so.

KIRBY J: You are in immediate deep trouble.

MR MARTIN: Yes, quite so. If the Court thinks that is a point then, obviously, I cannot persuade the Court otherwise.

KIRBY J: Well, is it not important for your office, for the Office of the Director of Public Prosecutions of the Commonwealth, that the question of doubt that exists in that respect which, at least, is arguable - I would have thought strongly arguable on the words used - ought to be cleared up, one way or the other?

MR MARTIN: Yes, I cannot argue with that, your Honour, on that particular issue. The second matter, however, on the issue of the application of section 68, the point is this: what my friend says is, "Yes, there's the power to appeal", picking up 352 of the local Act, "but there's no power to apply for leave to appeal." Now, with great respect, if that is right, then no convicted person on the mainland of Australia, in the mainland States, can apply for leave to appeal from a sentence imposed in a State on conviction of a Commonwealth offence.

GUMMOW J: That is right, that does seem to be implicit in what he is saying.

MR MARTIN: Absolutely.

GUMMOW J: That would upset the applecart.

MR MARTIN: Just slightly, your Honour. That cannot be right, and the words of section 68 - one goes back to, of course, the very purpose of the amendment to section 68 in 1932 because this Court in Seaegg had decided that under the old wording there was no right to appeal. Then came the amendment adding these words "in relation to". That amendment came through and that is in the material we provided to the Court, No 7. The amendment came through to add those words to ensure that convicted persons had the right to appeal.

Now, can I indicate to the Court this, that our researches demonstrate that at the time of that amendment, on every mainland State, a convicted person required leave to appeal against sentence, as they do today. Notwithstanding that the Attorney-General in some States requires leave and in other States does not require leave, at the time of the amendment in 1932, all convicted persons required leave. Now, in our submission, it is not tenable to suggest that the Commonwealth Parliament did not intend that those people should have a right to seek appellate review of their sentence when this amendment was passed in 1932 to cure the problem that had been created by the judgment in Seaegg. I am sorry, it had been created by the bad wording of the legislation.

KIRBY J: Brought to light by the Judges.

MR MARTIN: Brought to light, thank you, your Honour, quite correct. So, in our submission - - -

KIRBY J: I think what the appellants are asking here is we bring something else to light for helpful attention by Parliament. But you make the point that in the light of the legislative history and the great inconvenience and injustice that would be caused, it is not a construction of the Act to which you would go unless you were driven to it?

MR MARTIN: Quite.

GUMMOW J: Now, what about the third issue?

MR MARTIN: Your Honour - by the way, can I just go back to 91(1)(a) for a moment?

GUMMOW J: Yes.

MR MARTIN: That issue does not arise if we succeed on 91(1)(b). There is also another way of looking at the power of the DPP rather than to go right through to 91(1)(b). The DPP is given the power it has with respect to offences against the ACT Corporations Law.

GUMMOW J: Yes, that is right.

MR MARTIN: That power includes the power to appeal under section 24 of the Federal Courts Act. That is the other way of avoiding any implication of section 68 whatsoever.

GUMMOW J: Yes, but then Mr Gray has points about the ACT law.

MR MARTIN: Well, your Honour, Mr Gray's - - -

GUMMOW J: Which are caught up in some of these other issues.

MR MARTIN: I understand that and I appreciate your time. With great respect, it is all very well for Mr Gray to say there is an issue about this but we suggest he is not able to explain why there is an issue on, for example, section 45. Section 45 does not come into play with respect to these matters. Why is there an issue on the construction of 29, 31 and 91 when, in reality, the construction of those is quite plain? But that is a matter for the Court to assess, bearing in mind the respective submissions. In paragraph 4, whether section 80 applies, again, these are not deemed to be Commonwealth offences. Here we must again ask the Court to remember it is not the national scheme law, it is the co-operative scheme law, and they are not deemed to be Commonwealth offences except when one refers to 91(4) which says:

For the purposes of the exercise of enforcement powers -

they are -

taken to be an offence against a national scheme law -

for those very limited purposes. So, that does not deem it to be a Commonwealth law.

As I said, 45 does not come into play, and 29(1) - well, it is the first time we have heard any suggestion that there is an issue as to whether 29 is within the legislative power of the South Australia Parliament. We would say, quite plainly, when the two governments reach an agreement, State and federal, and then bring it into play in this fashion with complementary legislation, there can be no question that the State Parliament was entitled to say under section 29, "For the purposes of this State law, we will bring in the Commonwealth laws and apply them." The alternative would have been to set them out, to recite them one after another, in the State Act.

But there simply is no argument, in our submission, that such an issue arises. May it please the Court.

GUMMOW J: Yes. Thank you, Mr Martin.

KIRBY J: Perhaps I could just ask you, Mr Martin: if one were of the view that the issue relating to your powers was certainly - - -

MR MARTIN: Issue 2.

KIRBY J: Issue 2, was certainly a special leave point, is it practicable in this matter to excise that issue and, as it were, lift that matter only up or, having regard to the interrelationship of the scheme and the legislation, would the other matters take up that much more time, the matter being before the Court and the coherent understanding of the scheme being necessary to answer item 2? Speaking for myself at the moment, I think item 2 is a special leave point.

GUMMOW J: Yes, we both do. We are a little apprehensive that if we grant leave in relation to item 2, one way or another, these other points will intrude at some course. Perhaps not even in a determinative fashion, it will intrude in some fashion.

MR MARTIN: If Mr Gray is still counsel, your Honour, they will clearly intrude. I have no doubt about that at all.

GUMMOW J: And time would then be taken up in the Full Court debating about whether they were in or out.

MR MARTIN: Yes. Your Honour, I cannot argue that the whole understanding of the scheme is necessary for a consideration of point 2. However, we would suggest, with respect, point 1 does not arise at all for that purpose.

GUMMOW J: Yes, we understand what you say about point 1. That point would - also 4.1. That is linked to 1.

MR MARTIN: That is correct. We would suggest that No 3 would have to be discussed, obviously, although we say 45 does not come into it. So, we can see that No 3 and 4.2 and 4.3 inevitably would be aired in that event if leave was limited.

GUMMOW J: All right. That is very helpful, Mr Martin. We will call on you at 2 pm, Mr Gray, but you might bear in mind over lunch what has been said about issue 1 and 4.1 and about our lack of attraction to your other grounds not going to the legislative structure.

MR GRAY: If the Court pleases.

GUMMOW J: We will adjourn until 2 pm.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.03 PM:

GUMMOW J: Yes, Mr Gray.

MR GRAY: May it please the Court, could I address initially the issues raised in our combined supplementary reply, issue 1 and 4.1, the matters the Court identified in particular before lunch. If the Court pleases, we say that it is very arguable as to the characterisation of what I would call an old Code offence as to whether it is federal or State in character.

One of the reasons why we say the matter is fairly arguable is because of the expression in the Corporations legislation of "deemed to be" or "taken to be" and that expression the Court has noted appears in section 45 of the federal Corporations Act.

GUMMOW J: So, you are addressing issue 1?

MR GRAY: Issue 1, yes. We say the question - the characterisation of old Code offence, whether it is federal or State, does fairly arise and is a substantial issue. We say it arises because of the wording of sections 91(4) of the State Act, section 91(1)(b) of the State Act, section 29 of the State Act and section 45 of the federal Act, if I can call them that, and the reason why we say that is that each of those sections contain within them the expression "is taken to be" or "is deemed to be".

KIRBY J: Yes, but that is as part of State law.

MR GRAY: Yes, but section 45, when dealing with the Commonwealth Act, uses the same expression. Section 45:

For the purposes of a law of the Commonwealth or a law of the Capital Territory, an offence against the applicable provisions of a jurisdiction other than the Capital Territory -

(a) is taken to be an offence against the laws of the Commonwealth -

so, it finds its expression in the Commonwealth legislation as well.

KIRBY J: It just means that each polity in the exercise of its power has provided that it is taken to be as is specified.

MR GRAY: Yes, but if one has a look at - - -

KIRBY J: That is an exercise of its power.

MR GRAY: Yes. If one looks at the scheme, one finds that same expression in the State Acts, section 29, and the federal and by that process the object was to - if one looks at the explanatory memorandum in regard to Corporations Law matters, to have them, as far as practical, treated as the one national offence or federal offence. We say that the extended definition of "applicable provisions" picks up the old Code matters. Now, that is the point, and we say that that point arises and is arguable.

We noted that in a matter before the Court today, in the matter of Oates, that in the Full Federal Court judgment in that matter that there was a similar point identified in regard to an old Code offence in Western Australia and in the judgment of the Full Federal Court they described that as now to be taken to be an offence against the Corporations Law. I only have the first page of the judgment. I only just obtained it at lunchtime. Can I just pass that to the Court to illustrate the point that we make. I have taken this from the application book that I obtained from the Registry.

KIRBY J: Not having enough in your own case, you are peering into the application books of your colleagues, is that right?

MR GRAY: I am always grateful, if the Court pleases for - in these reasons for judgment, it is setting up what is said to be offences under the old Code in Western Australia back in `88 or `89 which is comparable to what we are talking about in the case at bar. It is the last third of the page:

The co-operative scheme laws, of which the Companies Codes of the various states and territories formed a part, were repealed in 1991 and replaced, except in certain limited respects, by the Corporations Law and other legislation: in Western Australia see s 85 -

and my friend has taken the Court to that.

In consequence an offence against the Companies Code is now taken to be an offence against the Corporations Law: in Western Australia -

and there are two references there to the Western Australia Act. I have been unable to locate those yet and I just cannot say what their comparable provision is in the legislation in this case.

There is an example of how it is becoming, with respect, not uncommon for the courts and, in particular, the authorities to be treating old Code matters as federal offences. One sees the same comments in other cases and we have footnoted those and we refer to those in our outline. But that is the point and we say, if the Court pleases, the Court should extend the grant of leave to allow points 1 and 4.1 to be debated.

KIRBY J: Is there any issue of concern that if these formulae are used and if they are successful, that the constitutional guarantee in section 80 might be circumvented?

MR GRAY: Yes, there is that possibility because section 68, on its terms, of course, refers to section 80.

GUMMOW J: Yes.

KIRBY J: But it still is in character a State law and under State law section 80 is not attracted.

MR GRAY: If that is, if the Court pleases, the ultimate conclusion but, for example, we would say the Full Federal Court judgment in the Oates decision is characterising it in ordinary parlance as federal, not State. We say that the effect of the "deeming" and "taken to be", when the Court has that argument developed, we say a conclusion is that the true character is federal.

In terms of special leave, I do not know if I can advance it further than that. There is the point. We say that it is arguable. We say that the cases we have cited in our outline and, in particular, now, this Oates' judgment that I am just aware of, lend credence to that argument.

GUMMOW J: Yes. Now, if you were successful in obtaining special leave on some one or more of these grounds, Mr Gray, several questions would arise. Firstly, it would have to be made and understood as on the footing that these appeals would be brought solely to challenge the decision of the South Australian Court of Criminal Appeal with respect to the appeal by the Director against sentence, and that there was no challenge in this proceeding to the convictions themselves.

MR GRAY: We accept that. We accept that the conviction does not arise in any direct way in the current application.

GUMMOW J: Well, direct or indirect.

MR GRAY: Yes, we accept that.

GUMMOW J: A second question that would arise would be the need to give 78B notices in a proper time before the appeals were heard so that any directions could then be given that the Court might need to give to co-ordinate the intervention of any Attorneys who decide to intervene.

MR GRAY: Yes. We would accept a short timetable in which to do that, if the Court pleases.

GUMMOW J: Yes. Well, we could leave that to your could sense, I think. Just bear that very much in mind. The third question that would arise would be the extension of the order 1 that appears at 239 of the application book that was made on 17 September. In relation to that, there would also need to be made clear the footing that the sentence - that if, in the event, the appeals were determined adversely to you, the sentences would thereupon commence to be served in their full tenor.

MR GRAY: Yes. If the Court pleases, we had hoped and I expect a measure of agreement about an appropriate order for a continued stay, part of which my clients agreeing to attend at the time the case is argued, if the Court gave an ex tempore judgment, and if not, at the time when judgment is delivered, in the same way as my clients today are with the Sheriff's Officer in Adelaide.

KIRBY J: Do we need to stay the operation of the sentence imposed by the Court of Criminal Appeal of South Australia so that there will be no problem arising following Whan's case?

MR GRAY: Yes.

KIRBY J: That is to say that it cannot ever be suggested by you that your clients were serving the sentence although at large, because that would be absolutely contrary to the intent of the Court.

MR GRAY: We would accept that, if the Court pleases, and accept an appropriate condition. We accept that.

GUMMOW J: Yes, all right. Yes, well, we will hear what the Director has to say. Is there any measure of agreement between you as to actual terms?

MR GRAY: As I understand it, the measure of agreement that exists is that effectively the current terms can continue with my clients signing new undertakings to attend and my clients agreeing to surrender their passport to the DPP but with a continued arrangement with - - -

GUMMOW J: Can that be reduced to writing or has it been reduced to writing?

MR MARTIN: I am sorry, it has not been. We are substantially in agreement but there is perhaps one term we are not.

KIRBY J: It might be as well if you turned your attention to the matter that I just raised because I would not want it ever to be said that the sentence was being served at large because in the event that the appeals are determined contrary to the applicants, then they must serve their sentence and all of it.

MR GRAY: Yes.

GUMMOW J: Mr Gray accepts that.

MR GRAY: I accept that, if the Court pleases, and we are happy to have appropriate wording - - -

GUMMOW J: That should be included in any formulation after - yes, we had better call on you now, Mr - - -

MR GRAY: I am instructed to put, if I could, my submissions in regard to other matters we agitate for special leave, if the Court pleases. I am mindful of the Court's comments.

GUMMOW J: Yes, by all means.

MR GRAY: I will be brief. If the Court pleases, obviously central to my clients' concerns was that they were sentenced for the first time with a custodial sentence by the intermediate court. One would look at the international convention and see there would be an expectation that there would be an ability or a right to have that reviewed.

Now, if the Court pleases, we say that what has happened here is that having reserved judgment on an application for leave, the Court then delivered a reasoned judgment in which they dealt with an appeal that was never lodged and proceeded to order imprisonment. We say, in the circumstances, there are admitted and material errors on the face of those reasons, and many other errors. But there are two that are admitted, and I want to take the Court to those just to identify what we say is something grave in the administration of justice.

The two admitted errors are to be found, first, at page 160 of the application book at point 5 of the page. The paragraph:

The second count against Byrnes related to the furnishing by him of misleading information both to the directors of Magnacrete and the Australian Stock Exchange concerning the Vicksburg arrangement. Once again, it was a deliberate and blatant offence committed by an experienced commercial lawyer.

Now, the answer is that that is wrong and is conceded to be wrong. There was no such charge. In fact, it is not just a case of Mr Byrnes there being sentenced on a count that he was not convicted of. In part, he was acquitted. He was acquitted of the count of misleading the stock exchange. Now, the Court would find those two counts in the application book at pages 2 and 3, and the point of going to those, if the Court pleases, is to demonstrate that what has happened at page160 is not just a transcription error, not just pulling up the wrong document, the judicial mind has combined the two counts and has proceeded on an utterly false basis.

Count 2, on which there was a conviction, involved on 3 February misleading directors in regard to a proposal for a joint venture and then appear (a) to (j) particulars. Count 3, where there was the acquittal, is an event in March misleading a different part of the stock exchange in regard to a different matter - an incorporated joint venture now, not a proposal - and different particulars. What the court has done and the other members of the court approved of these reasons, is to proceed on a fundamental misapprehension about one of the offences.

It is most material, if the Court pleases, because it demonstrates that thereafter, when the court refers to "offences" - and it does frequently in a global way, in a combined way - the court has got the wrong picture in mind. We say this materiality can be demonstrated by reference to page 170, because when it comes to sentencing the court said this:

In all of the circumstances, it seems to me that two features loom large.

First, on any view, these were deliberate, calculated, serious offences of their type -

now, picking up the word "deliberate" in regard to the offences, we say, is plainly drawing on page 160.

GUMMOW J: Now, your opponent, at page 222, deals with this, does he not?

MR GRAY: Yes.

GUMMOW J: At paragraph 3.20.

MR GRAY: Yes, the error is acknowledged but it is said that it was a mistaken reference. Now, we say that that answer is - - -

GUMMOW J: Likewise, in respect of your other error at 3.17.

MR GRAY: Yes. Could I say, when we go to this error, if the Court please, there is no mistaken reference. The judicial mind has taken two different documents and merged them. It has created something new. It has created an utterly new offence that was not the subject of a charge and, in the process, has proceeded to deal with Mr Byrnes on the basis that he has been sentenced, in part, on a matter on which he was acquitted. Now, if that be arguable, it is a very serious matter that would cry out as this is the only opportunity for review in the administration of justice for there to be a grant of leave.

It does not stop there because the second error is, in a sense, almost more significant. The second error appears at page 166 and it is in the area of assessing loss. It is the matter of loss that leads to imprisonment. It is that which is the critical factor in this whole matter as far as this court was concerned. At the fourth paragraph, the court said this, having identified a loss that could not be quantified through a risk in a transaction:

To that must be added a further loss figure related to interest income foregone by Magnacrete when its moneys were transferred to the account of Vicksburg to support the guarantee.

That simply did not happen. What lies behind that is a misapprehension about the nature of the transaction. The court has the wrong offence and the wrong transaction.

Now, for a first offender to be facing prison without being able to review these matters, we say brings the confidence of the public in regard to the administration of justice in South Australia into doubt. We are not talking about a mere slip.

The Crown's answer is, "No, you suffered a loss of interest in some other transaction", to which we say, "No. The transaction that occurred was a loan by Magnacrete to Vicksburg. " So, the question whether there was loss turns on the recoverability of that loan. Vicksburg, by this time, was a wholly owned subsidiary and held the convertible notes in Jeffcott. In turn, the question of the recoverability of the loan and any loss turned on the worth of Jeffcott. As has been found, the judge was unable to make a finding on that issue, the Crown failed to prove the worth of Jeffcott. So, it is a case where, we say, the court has got it wrong and on the face of it most materially and on a topic that led, in the court's mind, to, we say, imprisonment. Now, in the unusual circumstances of this case, we say - - -

GUMMOW J: It is certainly unusual. This case has been trundling through the appellate hierarchy in this country for some time now.

MR GRAY: If the Court pleases, there are two other demonstrable errors on the face of this judgment that would shake the confidence of the reader. The first is at page 158. It touches the matter that your Honour Justice Gummow has just raised. It is the second paragraph. There is reference being made to stating the case and that occurred and the Court of Criminal Appeal dealt with that, and then the last line:

Special leave to appeal to the High Court against that decision was also sought by the respondents and refused.

Not so; did not happen; did not occur. Then, at page 161, point 3:

It is a curious feature of the present appeal that Mr Hevey now seeks to resile from what was put to the High Court on the special leave application related to the committal decision.

There was no special leave application relating to that committal decision. It did not occur.

The Court of Criminal Appeal was critical of my clients in regard to - or, rather, took to account the enormous expense of the prosecution in all this litigation. They are two examples of suggested approaches to this Court that did not occur.

KIRBY J: I understand these criticisms and they have some force but we are not a court of super Criminal Appeal and it is almost inevitable that in complex transactions such as this that some mistakes may occur and I am afraid that the realities are that the jurisdiction of this Court has to be confined to matters which lift the matter out of the ordinary into one of general principle or clash of authority or serious miscarriage of justice. Now, the issue, I suppose, is if the Court is minded to lift the matter up because you have made out a case on one of the legal points, is the marginal cost of the extra time outweighed by the marginal utility of us ploughing through the reasons and facts of this case, given the history of this litigation?

MR GRAY: If the Court pleases, we say that we would accept conditions in which there was a limitation on the written material in support of other grounds - - -

GUMMOW J: The material has to be read, digested and understood.

MR GRAY: And we would accept that - - -

KIRBY J: Otherwise you will be complaining to the law reviews against us.

GUMMOW J: The time taken in Court is a very small proportion of the time taken in cogitation.

MR GRAY: If the Court pleases, we would accept such strictures on time as the Court thought appropriate without complaint. If the Court pleases, our concern here is - I must make briefly the next point. There was no draft notice of appeal. There was no appeals lodged or served. Had the steps been taken that we say should have been taken, for example, an appeal being lodged, my clients could then have said to the intermediate court, "Your were wrong - - -"

GUMMOW J: But these matters are often done, are they not, applications for leave and treated as hearings of the appeal?

MR GRAY: Yes, and the court spoke of the practice of this Court but what was missing here was no draft notice of appeal. All that was here was grounds of leave to appeal. There was never developed - - -

GUMMOW J: It seems to have been a very thorough judgment. I know you say it is flawed but nevertheless - - -

MR GRAY: This is unusual in the sense that there would have been an appeal book prepared that would have contained submissions below as to penalty. This court proceeded without submissions as to penalty from either the court below for counts appearing before it. First offenders will go to gaol if this judgment stands without the court that sentenced them hearing submissions on penalty. Now, if the Court pleases, if that is made out, and we say factually it is clear, then we would say if ever there was case in the administration of justice that called for an opportunity to review those matters, this is it. It is a case where, we repeat, that one of the applicants - - -

KIRBY J: I do not think you need to repeat it. The red light is on and we have the point.

MR GRAY: Yes. If the Court pleases. The other arguments, of course, are detailed in writing. May it please the Court.

GUMMOW J: Yes, Mr Martin. What do you say about this last point?

MR MARTIN: Your Honour, the first thing is that the Criminal Appeal Rules from South Australia do not require the filing of any appeal notice of books. The application is in the form that it was in accordance with the Criminal Appeal Rules. That has been the standard practice since 1980 when the right of the Attorney to appeal or the Crown to appeal was introduced.

GUMMOW J: What do you say about the other and related point as to no opportunity to put submissions on penalty?

MR MARTIN: Your Honour, there was ample opportunity to do so. The Crown appeal was on the basis that the sentence is manifestly inadequate as well as the errors. The Crown outline of submissions specifically stated that the only proper sentence was a custodial sentence to be served and that was developed in the course of the submissions. It was made very clear, and the relevant passages are referred to in our outline of submissions here, and there can have been no mistake at all. According to the practice of this Court, that is, the South Australia Court of Criminal Appeal, the Crown presents its submissions and there is a reply and it is expected that whatever the respondent wishes to put, they put at the time.

There was a reference, for example, in the course of the submissions by Mr Borick at page 148, beginning at line 3:

my submission to this court is that his Honour there was really saying this was not a dishonest scam, using that word, these people believed in what they were doing was right. It's the way they went about it which was wrong and that, with great respect, should be reflected in any sentence this court decides to pass if it gives leave to appeal and allows the appeal.

The whole thing was very much alive.

KIRBY J: What do you say in relation to the suggestion that there are factual flaws which, even assuming that there was a case for custodial sentence, would have affected the length of that sentence?

MR MARTIN: Your Honour, we say, with respect, those factual flaws would not have affected anything. We have tried to deal with this in our outline. If we go to the major flaw - the matters that my friend refers to at the tail end, for example, page 158, that error was brought about by the Law Society Judgment Scheme which is the one that is cited at 158, line 19, stating special leave was sought and refused. There is an editorial note in the LSJS to that effect. That is what has led to that but that has no impact whatsoever on sentence.

At page 161 is absolutely irrelevant to - Mr Gray says it was not a special leave application related to the committal. That is correct. But there was a special leave application and Mr Hevey sought to resile from what was put on that. The error at page 160, when one looks at it in its proper context, and we deal with it at page 222, had absolutely no affect at all on the essence of the offending that the court was looking at. In particular, one finds that the relevant sequence of events - and we point the pages out in 3.21, at page 222 - the court got it right in its recitation of the history, namely, he had been acquitted of that count. Those matters, with respect, are, at the end of the day, totally irrelevant.

KIRBY J: What about the one at 166?

MR MARTIN: Your Honour, as we indicate in our outline, the court was in error but the error related to the date. The court's date there would have been February. In fact, the loss of interest started three months later. The court also, in referring to the amounts involved, at pages 162, 164 and 165, has referred to the correct amount of interest. At the end of the day, what it has described the interest component as is not insubstantial. So, a three-month difference.

KIRBY J: But if the Court is minded to bring the appeals up on points of law, then effectively what has happened is that by dint of your appeal to the Court of Criminal Appeal you had the sentence which the primary judge ought to have given in the first place.

MR MARTIN: Yes.

KIRBY J: So, under the general principles, that is often lower than what the judge would have given in the first place. But, effectively, then, the appellants do not have an opportunity of having that reviewed if they can demonstrate that some mistakes have occurred in the premises upon which those sentences based, and they are, after all, first sentences of imprisonment.

MR MARTIN: I acknowledge that. But the crucial question is whether the mistake is relevant to the premises upon which the sentences are based and there is no reasonable basis for that conclusion when one looks at their remarks in their entirety. With respect, it is not unusual for the appellate court, on Crown appeals, to be the first court that is imposing the sentence of imprisonment.

KIRBY J: Well, that is true.

MR MARTIN: So, my friend tries to make something out of that - - -

KIRBY J: It is a question of marginal cost.

MR MARTIN: Your Honour, with respect, it will not be and I am mindful - if I might seek leave of the red light but we have not addressed this at all - - -

GUMMOW J: Yes.

MR MARTIN: There is more than a marginal cost involved. There will be a necessity to go right through what was presented to the trial judge to see whether they had an adequate opportunity to present their case at that time, because part of the ground is that they were prevented there because the judge gave an indication of an intention to fine. The whole of that transcript will be necessary; the transcript before the Court of Criminal Appeal. There will be a lot of material that is required in order to properly answer the proposition that they were denied an opportunity or that in some way the court did not have the material that was needed before it.

There is a real problem with this type of approach because if counsel chose, in the face of a Crown submission - a Crown appeal that says, "Your client should go to gaol", an acknowledge and accepted practice of a court to hear both the leave application and the appeal as one, if counsel chose not to address it - it may be a tactical decision that is taken that it is better not to go into it - and at the end of the day when the court delivered its decision and handed down its judgment and said, "You should go to gaol", the application was only made for a stay of the order for seven days. There was no complaint, "We haven't been heard".

KIRBY J: I am not so concerned about that for myself. I am more concerned with the suggested factual errors but I would think that Mr Borick would certainly know the procedures of the Court of Criminal of Appeal of South Australia. I think it is a fantasy to suggest he would not have.

MR MARTIN: Absolutely. Your Honour, what we are talking about is one line, effectively. The mistake about the interest is three months. It had no affect at all. We are talking about one line in which they added the words "and the Australian Stock Exchange". But as against that, earlier in the judgment they had recorded the history where Mr Byrnes had been acquitted of that count and, in our submission, when one looks at the judgment as a whole, it just simply played no part at all. The key to it was the corporate misdeeds.

Can I just mention - I do not think I can add anything useful to the question about the issues to be - from the DPP.

KIRBY J: Issue 1.

MR MARTIN: Issue 1. I think we have made our point plain that it is quite clear from the legislation they are State offences.

The other matter: your Honour Justice Gummow said that it had to be clear the conviction did not arise, that is, the validity of the conviction. My friend was very careful to say the conviction would not arise in the current application. We simply draw attention to - - -

GUMMOW J: He may have some other proceedings on foot.

MR MARTIN: Yes, I understand that because that has been left open by paragraph - - -

GUMMOW J: .....upon that.

MR MARTIN: - - - 12 of the reply.

GUMMOW J: We noticed that. That elicited the remark I made.

MR MARTIN: All we do is signal our concern that there should not be two hearings, if you like; we have one hearing with respect to the DPP power to appeal, only to find that they come back and try and have a second go in some other proceedings which effectively challenge the same thing.

GUMMOW J: Yes, we have taken that on board. Mr Gray, you should reply on the issues that we were just putting to Mr Martin, the non-interpretation issues.

MR GRAY: The matter I wanted to reply on was this, that it is true that the court, at the outset, spoke of the acquittal on count 3 but that does not meet the gravamen of the mistake about the count because the court has taken into its mind an offence that was not committed. The court could not have described this offence of misleading both the Director and the stock exchange unless it had, in some way, drawn from both counts. It could not happen. It is not a transcription error.

The second point is in regard to interest. The Crown's case on interest at page 165 was rejected. The Crown sought interest of $843,000, and at page 166, second paragraph, the court said the Crown's argument was "over simplistic and failed to recognise all relevant factors". My learned friend talks about interest three months later. There is no finding of that at all. That is simply a contention. So, the suggestion that the mistake as to interest did not bite is wrong. My learned friend's assertions there are simply unsupported by the judgment. They are the points in reply, if the Court pleases.

GUMMOW J: Thank you, Mr Gray. We will take a short adjournment.

AT 2.38 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.40 PM:

GUMMOW J: There will be a limited grant of leave in these matters. In granting leave, we note what has been made clear by counsel that there is no issue in these appeals amounting to a challenge to the convictions themselves, and that what is in issue is the decision of the South Australia Court of Criminal Appeal in respect of the sentence appeals.

The four issues in respect of which we grant leave are:

(1) whether the offences in question were offences against a law of the Commonwealth or a law of the State of South Australia;

(2) whether the Director of Public Prosecutions, being a Commonwealth officer, was entitled to instituting the application for leave to appeal against sentence in the South Australia Court of Criminal Appeal;

The third issue is to the proper construction and effect of sections 29, 31 and 91 of the Corporations (South Australia) Act and section 45 of the Corporations Act 1989 of the Commonwealth.

The remaining issue involves a number of constitutional questions. They are:

(1) whether section 80 of the Constitution applies to a deemed Commonwealth offence is so far as that question is really raised by issue 1;

(2) if section 45 of the Corporations Act 1989 of the Commonwealth is not limited in its operation to the Australian Capital Territory, whether it is a valid law passed pursuant to section 51(xx) of the Constitution or any other head of Commonwealth legislative power; and

(3) whether section 29(1) of the Corporations (South Australia) Act 1990 is within the legislative competence of that legislature.

Now, it will be necessary for section 78B notices to be given, as indicated. It will also be necessary to make provision with respect to the continuation of the regime indicated in the orders made on 17 September 1998 and the specification of the matters relating to sentence which have been adverted to this afternoon. That should be done by agreement between counsel and may be mentioned again before me at 3 pm.

There remain the other grounds for which special leave was sought. The Court is of the view that there are no questions of general importance raised by the other grounds of appeal and, further, there are insufficient prospects of success upon those grounds.

As I say, the matter can be mentioned again before me in Chambers at 3 pm. The Court should now be adjourned until 2.15 pm on Monday, 19 October 1998 at Perth.

AT 2.44 PM THE MATTER WAS CONCLUDED