ASIC v Geary [2018] VSCA 103

ASIC v Geary [2018] VSCA 103 - VSCA 2018 case summary — Zoe

[365]

Subsequent decisions have revealed two interpretations of the High Court's reasons in Robinson Helicopter. On one view, the appellate court when conducting its review must disturb a judge's conclusion of fact only if satisfied that the judge had erred by reference to 'incontrovertible facts or uncontested testimony', or that the judge's conclusion was 'glaringly improbable' or 'contrary to compelling inferences'. On this view, these tests apply both in the case of primary findings of fact and inferences drawn from those facts. That is because the High Court spoke in general terms about errors of fact and because authorities to which it referred, including Fox v Percy itself, were cases about inferences. On this approach, the 'real review' that is required to be conducted makes due allowance for the advantages enjoyed by the trial judge but does not 'shrink' from substituting its own view where error is shown according to the identified tests. In that regard, while it may be in as good a position as the trial judge to draw inferences, the appellate court is still concerned with the identification of clear error on the part of the trial judge.

On an alternative view, the High Court's references to the above tests are to be read as applying only to the review of findings of fact and not inferences drawn from those facts. That is because Robinson Helicopter was about a finding of fact and the reasons do not displace the authorities since Warren v Coombes establishing that an appellate court is in as good a position as a trial judge when it comes to drawing inferences from undisputed facts and facts established upon disputed evidence. The appellate court is then reaching its own conclusion rather than deciding whether there was any error made by the trial judge (beyond drawing the impugned conclusion).

In the present matter the parties did not address any argument as to which of these two interpretations is correct, although the respondent submitted that the applicant must show that the judge's conclusion that both parties intended a loan was wrong by reference to 'incontrovertible facts or uncontested testimony', or was 'glaringly improbable' or 'contrary to compelling inferences'. The different understandings of Robinson Helicopter show that, to the extent that the conclusion involved or amounted to an inference of fact, that approach might be open to question. In the absence of argument, it is preferable not to decide the point. In the circumstances, we propose to proceed on the basis that the Robinson Helicopter test need not be satisfied in relation to inferences of fact. Rather, we shall consider whether the judge's conclusion that both parties intended a loan was correct, based on the judge's findings of fact and the other evidence.[24]

[374]

Disputed questions of fact must be decided by a court according to the evidence that the parties adduce, not according to some speculation about what other evidence might possibly had been led. Principles governing the onus and standard of proof must faithfully be applied. And there are cases where demonstration that other evidence could have been, but was not, called may properly be taken into account in determining whether a party has proved its case to the requisite standard. But both the circumstances in which that may be done and the way in which absence of evidence may be taken to account are confined by known and accepted principles which do not permit the course taken by the Court of Appeal of discounting the cogency of the evidence tendered by ASIC.

...

This Court's decision in Jones v Dunkel is a particular and vivid example of the principles that govern how the demonstration that other evidence could have been called, but was not, may be used. The essential facts of the case, though well known, should be restated. The personal representative of a driver who had died in a collision with another vehicle brought an action for damages on her own behalf and on behalf of the deceased driver's dependents. The plaintiff's case depended upon demonstration that the other driver's negligence was a cause of the accident. The plaintiff sought to demonstrate negligence by having the tribunal of fact (in that case a jury) infer from facts concerning the road and the two vehicles involved that the collision had occurred when the defendant's vehicle was on the wrong side of the road. One of the defendants, the surviving driver, did not give evidence at the trial. The Court divided about whether the inference which the plaintiff sought to have the jury draw about where the collision occurred was an inference that was open on the evidence. But the Court held 'that any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn where a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence.'[26]

[388]

ASIC submits that first, the Court should generally infer that Geary's evidence would not have assisted any aspect of his case, or his defence of ASIC's case.

Secondly, ASIC submits that the Court should more confidently and readily infer each of following matters ...:

(a) Geary understood the purpose of UN Resolutions was to prevent hard currency being diverted to Iraq and that receipt of payments from the UN escrow account was for the supply of humanitarian goods under the OFFP.

(b) Geary read the emails and attachments referred to in 'Evidence concerning Geary's knowledge' referred to at paragraph 2330 and following, and from those documents understood the following matters:

(i) from June 1999 AWB's contracts with IGB included terms such as FIT, FOT and Free into Truck to all silos within all governorates of Iraq;

(ii) the purported inland obligation was a sham in that AWB did not arrange to deliver or transport wheat within Iraq prior to 2003;

(iii) from November 2000 and March 2003 the price of wheat supplied to Iraq also included an after sales service that was not a genuine fee for any service provided by AWB;

(iv) AWB paid the purported fees to the Iraq via shipowners, Ronly and Alia;

(v) the amount AWB received out of the escrow account pursuant to the contracts included the amount of the purported fees;

(vi) in 2002 AWB agreed to pay the IGB the sum of US$6.00 per tonne via the inland transport mechanism in respect of the Iron Filings Claim;

(vii) AWB assisted Tigris to recover in excess of US$7,000,000.00 dollars by inflating the price of wheat in contracts 1670 and 1680 to recoup the amounts out of the UN escrow account;

(viii) AWB retained a recovery fee of US$500,000.00 from the funds obtained from the UN escrow account through the inflation of contracts A1670 and A1680.

(ix) that revelations of payment of the purported fees and iron filings compensation through the inland transport mechanism, and receipt of payments in respect of the Tigris Debt from the UN escrow account, which payments were concealed from the UN, would cause harm to AWB.

(c) Geary read the ELG Reports, agendas and meeting papers in the Court Book in the relevant period.

(d) Geary read, understood and approved the recommendation contained in the 7 February 2003 Memorandum.

(e) Geary's evidence would not assist him to establish that he took reasonable steps to prevent AWB's wrongdoing.[35]

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Judgment (623 paragraphs)

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Legislation Cited (2)

Cases Cited (15)