Supreme Court of Tasmania|2000-03-07|Before: Cox CJ, Wright J, Evans J

Australian Securities and Investment Commission v Hosken [No 2] [2000] TASSC 12 (7 March 2000)

CITATION: Australian Securities and Investments Commission v Hosken [No 2]

PARTIES: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)

Appeal and New Trial - Appeal - Practice and procedure - Tasmania - Powers of court - Principles applicable to a review by the Supreme Court of the factual findings of a magistrate.

Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139, Chew v R (1991 - [1992] HCA 18; 1992) 173 CLR 626, applied.

Richardson v Shipp [1970] Tas SR 105; Kelly v O'Sullivan (1994 - [1995] TASSC 72; 1995) 4 Tas R 446; State Rail Authority of New South Wales v Earthline Constructions Pty Limited (In Liquidation) [1999] HCA 3; (1999) 73 ALJR 306; Warren v Coombes (1978 - [1979] HCA 9; 1979) 142 CLR 531; Devries and Another v Australian National Railways Commission and Another (1992 - 1993) 177 CLR 472, followed.

Appellant: Commonwealth Director of Public Prosecutions

Judgment Number: [2000] TASSC 12

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v

1 The appellant has appealed to this Court, pursuant to the Justices Act 1959 ("the Act"), s123 against certain acquittals of the respondent by the learned primary judge who heard a notice to review the respondent's convictions thereon entered by a magistrate in the Court of Petty Sessions.

2 The respondent had been charged with (inter alia) six offences contrary to the Companies (Tasmania) Code, s229(4). The respondent did not challenge his conviction on the first charge, but sought review of the remaining five charges which were to the following effect:

2 On 18 September 1989, the applicant, as a director of Launceston International Hotels Pty Ltd (the company), by improper use of his position as a director, gained for himself advantage or caused detriment to the Company by advancing to himself the sum of $36,000.

3 On 19 September 1989, the applicant, by improper use of his position as a director, gained for himself or Heather Hosken an advantage or caused detriment to the Company by advancing to Heather Hosken the sum of $30,000.

4 On 29 September 1989, the applicant, by improper use of his position as a director, gained an advantage to Barrington Investments Pty Ltd (a company owned and controlled by himself) or caused detriment to the Company by advancing to Barrington Investments, the sum of $22,926.50.

5 On 24 January 1990, the applicant, by improper use of his position as a director, gained for himself, Barrington Investments, Hosken Investments Pty Ltd, and Hosken International Pty Ltd (all entities owned and controlled by himself) or caused detriment to the Company by advancing to the legal firm Douglas and Collins, the sum of $8,000 for the payment of costs due by himself and those entities.

6 On 24 January 1990, the applicant, by improper use of his position as a director, gained for himself and the Company, or caused a detriment to the Company by advancing to the legal firm Minter Ellison the sum of $14,996 for the payment of costs due by himself and the Company.

3 The company had been concerned with the construction and operation of a hotel complex in Launceston. By September 1989, it was in substantial financial difficulties and under pressure from its principal creditor, Partnership Pacific Pty Ltd, a merchant bank subsidiary of the Westpac Banking Corporation, for it to be permitted to take over the operation of the hotel which was consistently running at a loss. On or about 19 September 1989, Partnership Pacific Pty Ltd did take over the operation of the hotel. The prosecution contended that the transfer by the respondent of the sums mentioned in the above charges was effected by the respondent for the purpose of gaining an advantage for himself or another person, or to cause detriment to the company. The defence contended that following negotiations with Partnership Pacific Pty Ltd and the Hosken interests over the weekend of 16 and 17 September 1989, the former agreed, by its agent, Mr Alexander, that it would take over the hotel on a "walk in, walk out" basis, a term of which was that the new operator would pay the trade creditors of the company. It is common ground, so far as counts 2, 3 and 4 are concerned that unless the prosecution excluded the existence of such a term, the learned magistrate could not have been satisfied beyond reasonable doubt that the respondent made improper use of his position as a director in effecting the transfers of funds because the creditors of the company would be paid by the bank.

4 The respondent filed a notice to review these convictions, claiming errors of law and fact in the findings that:

"(i) there was no agreement for Westpac or associated entities to pay trade creditors of AH No 2 Pty Ltd other than a category of essential creditors;

(ii) the Applicant never believed after the negotiation between Mr Richard Earl and Mr Peter Alexander on the 17th day of September 1989 that Westpac or its associated entities had agreed to pay the ordinary creditors of AH No 2 Pty Ltd from the funds of Westpac or its associated entities or from any profit which may have arisen from the sale of the Hosken properties;

(a) Mr Earl had given evidence that he had negotiated such an agreement with the Westpac Bank and Associated entities through Mr Peter Alexander on the 17th of September 1989;

(b) Mr Earl had given evidence that he had no doubt that the Applicant understood that that was the arrangement negotiated;

(d) both findings were against the weight of the evidence."

5 The learned primary judge who reviewed the magistrate's findings, reached the conclusion that the latter had made errors of fact and that on the evidence and materials before him he could not properly have been satisfied beyond reasonable doubt that the agreement in question had not come into existence.

6 In hearing the notice to review, the learned primary judge was engaged in an exercise of reviewing matters of fact. In undertaking that exercise, he said:

"The basis upon which this appeal is to be determined is in accordance with that adopted by the High Court in State Rail Authority of New South Wales v Earthline Constructions Pty Limited (In Liquidation) [1999] HCA 3; (1999) 2 Leg Rep 2 [now reported at [1999] HCA 3; (1999) 73 ALJR 306] (see also Devries and Another v Australian National Railways Commission and Another (1992 - 1993) 177 CLR 472)."

7 Both these cases deal with the proper approach to the review of findings of fact in civil matters based on the credibility of witnesses and made by a judge sitting without a jury where there is an appeal by way of rehearing. In this jurisdiction, there is a well established line of authority, drawing largely from a similar line developed in the Supreme Court of Victoria, that an appeal by way of notice to review is not to be treated as an appeal by way of rehearing. In Richardson v Shipp [1970] Tas SR 105, Burbury CJ said, at 117:

"This is not an appeal by way of rehearing ... . The decision of a court of petty sessions upon questions of fact is to be treated upon a motion to review in the same way as an appeal from the verdict of a jury. In Taylor v Armour & Co Pty Ltd [1962] VicRp 48; [1962] VR 346, at p 351, in the joint judgment of the Full Court, the Court said:

'We have come to the conclusion that we should adopt the view that the Supreme Court on an appeal from petty sessions by way of order to review should, with regard to any question of fact, act according to long-established practice, and treat the matter in the same way as an appeal from the verdict of a jury. This was the view clearly stated by Hood J, in Aldom v Dunn [1917] VicLawRp 9; [1917] VLR 70, 23 ALR 3, and by Herring CJ, in Young v Paddle Bros Pty Ltd [1956] VicLawRp 6; [1956] VLR 38. It is a very long established practice, and appears to have been adopted by the Full Court in the early days of the colony, by analogy to the practice followed in England, under earlier procedures whereby decisions of magistrates were called in question - see R v Reason [1795] EngR 4145; (1795) 6 TR 375; R v Smith [1800] EngR 191; (1800) 8 TR 588, at p 590; and see in Victoria R v Mollison; Ex parte Crichton [1876] VicLawRp 86; (1876) 2 VLR (L) 144; R v Grover; Ex Parte Parsons [1881] VicLawRp 115; (1881) 7 VLR (L) 334; Quick and Berriman, The Victorian Magistrate (1924), at p 473, and Paul on Justices (1936), at p 479. The rule which prevails with respect to appeals from the county court, or from a single judge of the Supreme Court to the Full Court, or from this Court to the High Court, and which is stated in Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549, therefore does not apply. Accordingly, it is not for this Court to make up its own mind upon the evidence, though giving weight if necessary to the fact that the tribunal below has seen the witnesses. This Court has merely to see whether there was evidence upon which the magistrate might, as a reasonable man, come to the conclusion to which he did come'."

8 Taylor v Armour & Co Pty Ltd (supra) has been followed in Victoria in Durstan v Mercuri [1969] VicRp 62; [1969] VR 507 at 514 (per Menhennett J); Surling v Development Underwriting (Vic) Pty Ltd [1973] VicRp 1; [1973] VR 1 at 11 (per Stephen J); Hardy v Gillette [1976] VicRp 36; [1976] VR 392 at 395 (per Anderson J) and Jansz v G M B Imports Pty Ltd [1979] VicRp 59; [1979] VR 581 at 589 (also Anderson J). In Tasmania, the same view has been taken in Bedelph v Weedon [1963] Tas SR 69 at 81 (Full Court); Benson v Rogers [1966] Tas SR 97 at 99 (Burbury CJ); Lowe v Burles 46/1976 Chambers J; Hrycyszyn v Groves & Anor 27/1982 Everett J; Greaves v Aikman (1994 - [1994] TASSC 129; 1995) 4 Tas R 196 (Cox J). In Kelly v O'Sullivan (1994 - [1995] TASSC 72; 1995) 4 Tas R 446 Green CJ said that he saw no reason to reconsider "that long line of authorities", and found it unnecessary to do so for the purpose of that case. Crawford J, at 461, said of the quotation I have cited from Richardson v Shipp (supra) that he was "not persuaded that it is an incorrect statement of law providing it understood that a criminal jury was being referred to and not a civil jury".

9 Perhaps in light of a much readier availability of accurate transcripts of proceedings in petty sessions, and of the fact that lay justices are rarely used, and when used, an appeal to a magistrate is available under the Act, s113A, the time has come to reconsider the desirability of equating the task of reviewing matters of fact in notices to review with appeals under the Supreme Court Civil Procedure Act 1932, s46 from a single judge to the Full Court but, in any event, it is my view that the learned primary judge did not err in law in embarking upon the consideration of the case in the manner he did and in reaching the conclusion that on the materials before the learned magistrate, a reasonable doubt could not be excluded. That a judge on a notice to review has jurisdiction to set aside a conviction on the grounds that it is unsafe and unsatisfactory has been accepted in this Court in Kelly v O'Sullivan (supra). Although not using that expression nor specifically relying on that ground, the learned primary judge's view of the facts was such that that lower threshold must clearly have been reached by him.

10 The making of the agreement in question was denied by the bank's officer, Mr Alexander, but was deposed to by a solicitor, Mr Earl, who acted for the Hosken interests at the time and who was called by the respondent. Mr Earl gave evidence that on a day in around September 1989, he had received instructions from the respondent that the latter had been negotiating with Partnership Pacific Pty Ltd to take over the hotel and wished Mr Earl to attend a meeting at Mr Alexander's officer in Sydney to complete the arrangements. At the meeting, which was close to the day on which the bank did take over the hotel, ie, 19 September 1989, Mr Earl said he discussed with Mr Alexander some of the arrangements, details of which the respondent had given him. He gave evidence-in-chief as follows:

"And what was the general nature of those terms? ... Well the general nature of the arrangement was that it was to be walk-in walk-out handover with immediate effect. Mr Alexander was very anxious not only to preserve the tax effectiveness of the structure but also to preserve the goodwill of the hotel, if you like, to ensure that there was a kind of seamless handover that wouldn't effect trading or the reputation of the hotel. And I think they talked about the need to realise it for best result in terms of that sort of consideration. There were other aspects of the arrangement as well but that was the one that concerned the handover part of it.

In relation to that was there any specific agreement he expressed as far as the hotel and its creditors were concerned? ... Well that's something that I raised with him because Mr Hosken had raised it with me. Mr Hosken was concerned to ensure that Westpac was accepting responsibility for the creditors. I think I probably thought it was almost unnecessary to raise it initially but I did raise it to ensure there was no doubt about it and there was no substantial problem with it but Mr Alexander qualified the arrangement by saying that he had heard some suggestion that there were personal liabilities or creditors of Mr Hosken mixed up in the hotel book and he didn't want to assume responsibility for those creditors. And I had some difficulty understanding how that could be the case and I asked Mr Hosken about it specifically and he was puzzled, as I was, and said that there were no such liabilities as far as he was aware and I then told Mr Alexander that we had no problem with this qualification because as far as we were concerned there were no such liabilities and I can recall saying to him something to the effect that I couldn't imagine really what he was referring to and he quoted a specific example by saying to me he didn't want to pay my legal bill so he wanted to make it clear that Mr Hosken should be responsible for my legal bill, in his view.

Yes, I follow. Did the terms of the hand over of operations involve other aspects beyond walk in walk out and payment of the trade creditors? ...Yes, there were arrangements that Mr and Mrs Hosken would in effect surrender various assets to be applied towards reducing or setting off the Westpac debt or the Partnership Pacific debt. Mr and Mrs Hosken were to be released from their guarantees and any obligations in relation to the hotel or the financing package.

When you say Mr and Mrs Hosken were to hand over some assets, were they assets of theirs personally or held through some corporate structure or other ? ... I think it might have been both because there was a reservation in the case of their personal residence, for example, which I think was probably in their personal names but I think most of the assets would have been in the name of companies.

So you can't recall at this juncture, I imagine, which assets they were? ... I don't remember, there were some mortgages or debentures signed in the weeks following the settlement but I can't remember specifically what they were.

Was there any hostility in the course of your negotiations with Mr Alexander? ... No, it was a very, relatively relaxed sensible friendly meeting, both sides really were working to achieve what seemed like a sensible result in terms of an orderly hand over and continuation of business. And in fact at the end of the meeting Mr Alexander asked me if I would go to his solicitors in Melbourne to instruct them what they were to do, so he was relatively relaxed about it."

11 In cross-examination, Mr Earl confirmed that he had not made notes of the conversation at the time but had prepared a document in 1994 recording his recollection of it. Asked if he remembered what in substance he and Mr Alexander said to one another about the creditors, he replied:

"Well I have no recollection of the detailed words that I used or that he used. I do know that I raised it, I know that I prefaced my observation by saying that it didn't seem to me to be necessary to raise it because in effect it was part of the arrangement that had been agreed anyway because they were taking over the structure and I told him that Mr Hosken wanted to be sure that they were taking over responsibility for trade creditors and it was in response to that that Mr Alexander indicated to me that he'd heard some references that he didn't really under - he was very vague about it but he said he'd heard some references to personal liabilities or unrelated creditors and he did not want to assume responsibility for those sorts of creditors."

12 Taken to his 1994 statement, he agreed that in par10 it said:

"The takeover of control by Partnership Pacific included taking over responsibility for trade creditors of the Hotel. This was clear from the walkin walkout nature of the arrangement and was further clarified in discussions between Mr Alexander and me when he expressed concern that he had heard some suggestion that some of Mr Hosken's other companies liabilities may have become involved in the Hotel operations and he stated that Partnership Pacific was not prepared to meet any liabilities of other unrelated Hosken entities."

"Well now isn't it the position that your understanding as to Partnership Pacific taking responsibility for trade creditors didn't come from any promise by Mr Alexander or any expressed statement by Mr Alexander but was something you inferred from the things mentioned in that second sentence? ... No, that's not entirely true, I certainly inferred it at the outset but it was confirmed with my discussion with Mr Alexander.

Well you see you haven't said in that statement have you that Mr Alexander promised or confirmed in speaking to you that Westpac or Partnership Pacific were going to pay the trade creditors or take responsibility for trade creditors? ... Well I may not have said that in so many words but if it can only - it was clearly understood and it can only be the position given that Mr Alexander I've said was making certain exclusions.

Wasn't it the position, wasn't it the case that Mr Alexander discussed with you arrangements for creditors to be paid out of the proceeds of sale of real estate belonging to companies in the Hosken group rather than being paid out of the - of of Westpac or Partnership Pacific's own moneys? ... Absolutely not, there was no such discussion.

Isn't it the position that Mr Alexander said that he wouldn't be willing before the proceeds of sale of real estate belonging to other Hosken group companies to be used to pay debts owing to companies within the group, that is distinct from debts owing to arms length creditors or something to that effect? ... I'm not sure that I understand your question but there was no discussion which was based on the premise that the creditors were going to be paid out of some separate fund or some other fund, no discussion of that sort whatsoever.

What do you say to the suggestion that your memory for what Mr Alexander said and what Mr Hosken said is faulty after all this time and that the true position is as set out in the statement, or the sentences on the statement that I read out? ... Well my memory was best the day after the meeting when I told Mallinson's that the arrangements were that Westpac were assuming responsibility for the creditors."

13 Mr Alexander acknowledged that a meeting with Mr Earl had taken place in his office shortly before the take over, but insisted that it was on Monday 18 September 1989. While denying that there had been an agreement reached with Mr Earl that the bank would accept responsibility for the trade creditors, he accepted in cross-examination that he had expressed concern to Mr Earl that in relation to any question of the bank taking over such a liability, there were, he suspected, among those trade creditors, Hosken Group creditors for whom he would not take over liability. There was then this exchange in cross-examination:

"I put it to you that the reason you expressed that concern was because the bank had agreed to take over responsibility for payment of trade creditors? ... No.

There were no such Hosken group creditors amongst the trade creditors and that thereupon you confirmed the bank's agreement to pay the existing trade creditors of the hotel? ... No.

HIS WORSHIP: Did Mr Earl say anything about whether or not there were any such trade creditors?

WITNESS: We were aware there were trade creditors, well aware of it.

HIS WORSHIP: Yes, but Hosken group trade creditors or Hosken group creditors?

WITNESS: Did Mr Earl say anything about Hosken group creditors?

HIS WORSHIP: And may have said there were none but you just don't remember that?

WITNESS: I don't. If I can volunteer the issue was that to the extent if there were any Hosken creditors we certainly weren't going to pay them.

I put it to you that Mr Earl went off to telephone Mr Hosken from your office in relation to the question of whether there were any Hosken group creditors amongst the trade creditors? ... He may have done so, I wouldn't deny it.

He did that with your knowledge and concurrence? ... He would have, yes.

Did you suggest to Mr Earl at any time, no, I'll put it a different way. You never suggested, did you, to Mr Earl at any time that your company was planning or contemplating moving unilaterally to take over operations? ... I can't possibly respond to that question.

You can't recall? ... .I can't specifically recall.

You reached agreement with Mr Earl, didn't you, that Mr Hosken and his fellow directors and his companies would all fully cooperate in your company's new agents taking over the conduct of operations? ... I have a belief that that's correct but I don't know whether it's something you've put in my brain and I've absorbed today or whether it's an actual recollection. I have a belief that's correct, yes.

And that Mr Hosken and his fellow directors would take any action that was required by the bank by way of transfer of shareholding to preserve or ensure that the tax based finance structure was preserved? ... Yes, I believe it was part of the agreement.

The agreement for the handover of the hotel? ... Yes.

The agreement that you reached with Mr Earl? ... I believe so.

And it was a term of that agreement and it was your understanding, was it not, that your bank would pay the trade creditors of the hotel excluding the Hosken group creditors? ... No.

And that your bank would pay those creditors there and then promptly rather than waiting for sale of the Hosken group properties? ... I'm certain the answer is no."

14 The learned magistrate preferred the evidence of Mr Alexander to that of Mr Earl, saying of the latter that his recollection was poor about what was actually said about the matter (a criticism which, I interpose in fairness, could also have been made of Mr Alexander, the events in question having taken place some eight years previously) and that Mr Earl's state of mind was that the conclusion followed as a matter of necessity from the "walk in, walk out" agreement and from the taking over of the structure; in other words, he concluded that Mr Earl inferred that the trade creditors were to be paid by the bank from the nature of the arrangement, rather than there being any express agreement about it. The learned primary judge analysed the magistrate's assessment of the evidence and took the view that the evidence did not support this conclusion but justified the view that Mr Earl was claiming a clear recollection of the substance of the conversations, while not purporting to remember them verbatim. He concluded his analysis of the evidence by saying:

"28 The learned magistrate was required to exclude the evidence of Mr Earl before he could safely conclude absence of agreement. The only means were adverse findings as to credibility or reliability, contradictions internal to his testimony or documentation generally. He made no adverse finding as to honesty, there were no significant internal contradictions and the documentation, if anything, supported the version of Mr Earl. The reasoning process employed by the learned magistrate was consistent with a conclusion that the applicant had not proved a positive assertion.

29 Even if the above analysis is incorrect, there remains a finding that the learned magistrate was 'satisfied that Mr Hosken never believed any such thing'. The learned magistrate was required to be satisfied beyond reasonable doubt that the applicant held no such belief (Chew v R (supra)) [(1991 - [1992] HCA 18; 1992) 173 CLR 626].

30 Discounting the evidence of the applicant, as he was entitled to do, the learned magistrate had before him uncontradicted and unchallenged evidence of a legal practitioner that he had advised his client of the existence and terms of a concluded agreement to the effect that the bank would be responsible for unsecured trade creditors. That evidence was corroborated by the correspondence dated 26 September and 16 November 1989. No partner or employee of Mallesons was called to give evidence to the effect that Mr Earl had not stated to them at the September meeting the terms of the agreement as he understood them to be. If the basis for concluding that Mr Earl was wrong in his recollection and account of the meeting and the agreement be flawed, then any conclusion reached that Mr Earl did not tell his clients that the agreement existed is even more unreliable. Even if the finding that Mr Earl mistakenly believed that the agreement had been reached was one based on belief, inferences and information provided by his client is correct, then his evidence that he told his client of the terms of the agreement (wrongly on the basis of that finding) remains cogent. There is further reason to doubt a conclusion that the applicant lacked the requisite belief. In November 1989, he transferred certain properties, which had not been subject to security, to the bank. Given the other findings as to the conduct of the applicant, it is unlikely that he would do so unless it was to his advantage. The holding of the belief that the bank would honour its commitment to pay trade creditors would be such an advantage.

31 It follows that the motion to review the convictions in relation to charges 2, 3 and 4 should be upheld."

15 The Act, s107(4) provides that the grounds set forth in a notice to review shall allege:

(a) an error or mistake on the part of the justices on a matter or question of fact alone, or of law alone, or of both fact and law; or

(b) that the justices had no jurisdiction to make the relevant order.

What the learned primary judge was doing was reviewing factual findings by the magistrate. In reviewing these findings, the primary judge was obliged to bear in mind the strictures of the High Court set out in the cases to which he specifically referred, namely State Rail Authority of New South Wales v Earthline Constructions Pty Limited (In Liquidation) and Devries and Another v Australian National Railways Commission and Another (supra) concerning the importance to be attached to findings of fact which are based on the fact finder's assessment of the credibility of witnesses. It has not been shown that the learned primary judge ignored those warnings or in any way misdirected himself in law when he interfered with the learned magistrate's findings of fact. Were the appeal to this Court one by way of rehearing, it may be that it would have been persuaded that the findings of fact at first instance were to be preferred and would have intervened to restore them. It is not part of this Court's function, however, to make findings of fact by such a process. The Act, s123 grants a right of appeal to an aggrieved party in respect only of a point of law or against the admission or rejection of evidence. It is only when such a defect can be found in the decision appealed from that the Full Court may draw any inference of fact in conflict with that drawn below. In my view, the factual findings of the learned primary judge in respect of counts 2, 3 and 4 were not tainted by error in point of law and cannot therefore be interfered with by this Court.

"1 His Honour erred in law in interfering with substituting findings favourable to the respondent for the findings made by the learned Magistrate that he was satisfied beyond reasonable doubt that:

(a) there was no agreement or promise for Westpac or associated entities to pay the trade creditors of AH No2 Pty Ltd; and

(b) the Respondent never believed there was an agreement or promise for Westpac or associated entities to pay trade creditors of AH No2 Pty Ltd

when such findings depended on assessing the credibility of witnesses Counts 2, 3 and 4 and the nature of the evidence was such that it was not appropriate for an appellate court to substitute its own findings of fact on those issues."

As I have said, the learned primary judge specifically adverted to State Rail Authority of New South Wales v Earthline Constructions Pty Limited (In Liquidation) (supra). This case stresses the necessity for a judge of fact to have regard to all the evidence in the case. Kirby J acknowledged the "respect which appellate courts, by present legal authority, must pay to the advantages enjoyed by the trial judge" (at 330), but said:

"Yet even when the trial judge has expressed conclusions as to the credibility of a particular witness, that does not represent the end of analysis by the appellate court. It is only the beginning of a particular analysis which is then required. In many appeals, such a credibility finding will be far from conclusive of the proper outcome of the entire trial, and hence of the appeal."

Speaking of the cases of Abalos v Australian Postal Commission [1990] HCA 47; (1988) 171 CLR 167, Jones v Hyde [1989] HCA 20; (1989) 63 ALJR 349 and Devries and Another v Australian National Railways Commission and Another (supra) where the orders of the Intermediate Appellate Court had been set aside and those of the trial judge had been restored by the unanimous decision of the High Court, Kirby J said (at 326):

"The result of the trilogy has been that, in some circles, the mere mention of credibility findings or their possible relevance to the decision by the trial judge has been viewed as locking and barring the door to successful appellate reconsideration of the facts. That is not what was said by the Court in Abalos or in the accompanying decisions. If this appeal does nothing else, it should once again restore the understanding of this Court's authority, returning the understanding of it to the 'traditional' view."

17 Such findings as the learned magistrate made, based on his assessment of the credibility of Mr Alexander and Mr Earl were not beyond appellate reconsideration on the notice to review, even given the correctness of the view that such an appeal is not by way of rehearing. The learned primary judge was entitled to adopt a different view of the factors which led the learned magistrate to his conclusions, if satisfied, that they were wrong. In respect of this ground, if he erred at all, his error was one of fact and one which this Court has no jurisdiction to correct.

"2 His Honour erred in fact and law in dismissing counts 2, 3 and 4 in that he failed to have regard or sufficient regard to the evidence:

(iii) through his solicitors in submissions to the Australian Securities Commission dated 18th September 1992;

that Westpac or an associated entity had agreed or promised to pay AH No2 Pty Ltd's trade creditors; and

(c) suggesting that Westpac and associated entities had no good reason to enter such an agreement or make such a promise."

Once again in reviewing the evidence for the purpose of determining whether the learned magistrate ought to have entertained a reasonable doubt about the respondent's guilt, the learned primary judge was conducting an exercise involving issues of fact and not law. If, for example, he took the view contrary to that of the learned magistrate that Westpac or an associated entity did have good reason to enter into the agreement to pay the trade creditors in as much as it had not served the appropriate default notices to enable it to enter into immediate possession of the premises and therefore had to find some further consideration to procure the respondent's co-operation, or it feared that the goodwill of the hotel complex might be adversely affected if it took over without ensuring that local trade creditors were paid, then that was a factual finding open to him on the evidence. If this Court could entertain an appeal on a question of fact, it might be persuaded to the original view, but its jurisdiction being conditional upon the existence of an error of law, it cannot intervene on the ground alleged.

19 The next 14 grounds of appeal attack factual findings by the learned primary judge on a review of the evidence. For the reasons already advanced, this Court has no warrant to interfere with his conclusions of fact until his decision is shown to have been vitiated by error of law. As Glass JA said in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139, which was an appeal confined to questions of law from the Workers' Compensation Commission:

"To say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that no reasonable person could have made it, is to say the same thing in different ways. Upon proof that the finding of a jury is vitiated in this way, it will be set aside because it is wrong in fact. Since the Act does not allow this Court to correct errors of fact, any argument that the finding of a Workers' Compensation Commission judge is vitiated in the same way discloses no error of law and will not constitute a valid ground of appeal. It is also pointless to submit that the reasoning by which the court arrived at a finding of fact was demonstrably unsound as this would not amount to an error of law: R v District Court of the Metropolitan District Holden at Sydney: Ex parte White [1966] HCA 69; (1966) 116 CLR 644 at 654." (At 155 - 156.)

20 To the extent that some of grounds 3 - 16 assert errors of law in the process of reaching conclusions of fact, I agree with the analysis of Wright J, whose Reasons for Judgment I have had the advantage of reading. In my opinion, no error of law has been demonstrated in respect of counts 2, 3 and 4, to which grounds of appeal 1 - 16 relate, and the appeal, insofar as it seeks to overturn the learned primary judge's direction that the convictions of the respondent on those counts be quashed and in substitution thereof an order be made that each charge be dismissed, must in turn be dismissed.

21 As to the quashing of the conviction of the respondent on counts 5 and 6, I agree with Wright J that grounds 21 - 24 inclusive have not been made out and with Evans J, whose Reasons I have also had the advantage of perusing, that the remaining grounds 17 - 20 inclusive have likewise not been made out. I share his view that the entire appeal should be dismissed.

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v

22 The respondent was charged on complaint with six counts of making improper use of his position as a director of a company, contrary to the Companies (Tasmania) Code ("the Code"), s229(4). The particulars of each complaint were in the following terms:

"1 PARTICULARS: THAT on the 14th day of September 1989 at Launceston in Tasmania Robert William Hosken being a director of AH No 2 Pty Limited ('the Company') made improper use of his position as a director of the Company to gain an advantage for himself or alternatively to cause detriment to the Company by causing the Company to give to him $2,000.00 which sum was used by Robert William Hosken for his own use.

2 PARTICULARS: THAT on the 18th day of September 1989 at Launceston in Tasmania Robert William Hosken being a director of AH No 2 Pty Limited ('the Company') made improper use of his position as a director of the Company to gain an advantage for himself or alternatively to cause detriment to the Company by causing the Company to give to him $36,000.00 which sum was used by Robert William Hosken for his own use.

3 PARTICULARS: THAT on the 19th day of September 1989 at Launceston in Tasmania Robert William Hosken being a director of AH No 2 Pty Limited ('the Company') made improper use of his position as a director of the Company to gain an advantage for Heather Hosken and or himself or alternatively to cause detriment to the Company by causing the Company to give to her $30,000.00 which sum was used by the said Heather Hosken for her own use.

4 PARTICULARS: THAT on the 29th day of September 1989 at Launceston in Tasmania Robert William Hosken being a director of AH No 2 Pty Limited ('the Company') made improper use of his position as a director of the Company to gain an advantage for Barrington Investments Pty Limited ('Barrington Investments') or alternatively to cause detriment to the Company by causing the Company to give Barrington Investments the sum of $22,926.50 which sum was used by the Barrington Investments for its own purposes.

5 PARTICULARS: THAT on the 24th day of January 1990 at Launceston in Tasmania Robert William Hosken being a director of AH No 2 Pty Limited ('the Company') made improper use of his position as a director of the Company to gain an advantage for Messrs Douglas & Collins ('Douglas & Collins'), himself, Barrington Investments, Hosken Investments Pty Ltd and or Hosken International Pty Ltd or alternatively to cause detriment to the Company by causing the Company to give Douglas & Collins the sum of $8,000.00.

6 PARTICULARS: THAT on the 24th day of January 1990 at Launceston in Tasmania Robert William Hosken being a director of AH No 2 Pty Limited ('the Company') made improper use of his position as a director of the Company to gain an advantage for Messrs Minter Ellison ('Minter Ellison'), himself and Launceston International Pty Ltd or alternatively to cause detriment to the Company by causing the Company to give Minter Ellison the sum of $14,996.00."

23 In essence, the prosecution case was that the respondent had caused AH No 2 Pty Limited to make payments to him, his wife, a company which he and his wife controlled, and two firms of solicitors, at a time when AH No 2 Pty Limited was insolvent and could not, to his knowledge, pay its debts. It was contended that it was his duty as a director to leave the relevant funds within the control of AH No 2 Pty Limited for the benefit of its creditors. These charges, and numerous counts of insolvent trading, contrary to the Code, s556, were heard together by Magistrate Mollard.

24 On 9 April 1998, Magistrate Mollard found the six s229(4) charges and a number of the s556 charges, proved. He gave written reasons for his decisions. On 23 June 1998, after hearing submissions in relation to sentence, and oral evidence from character witnesses, Magistrate Mollard convicted the respondent of all six s229(4) charges and sentenced him to nine months' imprisonment, eight months of which were suspended. The respondent and his wife were also convicted and fined in respect of those s556 charges that had been found proved.

25 The respondent appealed against conviction and sentence in respect of the s229(4) charges by notice to review LCA 55/1998. That motion to review was heard by Slicer J, together with another motion to review the s556 charges of which the respondent had been convicted. On 15 March 1999, his Honour:

(a) dismissed the motion to review in relation to the conviction on count 1 of the s229(4) complaint;

(b) quashed the convictions on counts 2, 3 and 4 of that complaint and ordered that those charges be dismissed; and

(c) quashed the convictions on counts 5 and 6 of that complaint, but invited further submissions in relation to those counts.

26 On 19 March 1999, after hearing further argument, his Honour confirmed his order in respect of counts 5 and 6 and dismissed the complaints in respect of those counts. In respect of count 1, he quashed the sentence of imprisonment and substituted a fine of $3,000.

27 On 7 April 1999, the appellant lodged a notice of appeal to this Court upon 24 grounds. Five of those grounds alleged errors of law and the remaining 19 grounds alleged errors of fact or fact and law combined. Obviously, the solicitors for the appellant, in drawing the notice of appeal, failed to advert to the provisions of the Justices Act 1959, s123(1) which permits a party to a motion to review to appeal to this Court only in respect of a point of law or the admission or rejection of evidence. An application to amend the notice of appeal was made on the first day of the hearing. That application was allowed and the appeal proceeded on the following grounds (which reflect the amendments made to the original grounds):

(a) there was no agreement or promise for Westpac or associated entities to pay the trade creditors of AH No2 Pty Ltd; and

(b) the Respondent never believed there was an agreement or promise for Westpac or associated entities to pay trade creditors of AH No2 Pty Ltd

2 His Honour erred in fact and law in dismissing counts 2, 3 and 4 in that he failed to have regard or sufficient regard to the evidence:

(iii) through his solicitors in submissions to the Australian Securities Commission dated 18th September 1992;

that Westpac or an associated entity had agreed or promised to pay AH No2 Pty Ltd's trade creditors; and

(c) suggesting that Westpac and associated entities had no good reason to enter such an agreement or make such a promise.

3 His Honour erred in fact law in finding that it was wrong to say that Mr Earl's recollection was poor and that he raised the matter regarding the payment of the trade creditors of the hotel apologetically, in that there was no evidentiary basis for such findings by his Honour.

4 His Honour erred in fact law in concluding that Mr Earl's account regarding the payment of the unsecured creditors of the hotel was not that he understood the terms of the agreement by inference, in that there was no evidentiary basis for such a conclusion reasonably to be reached by his Honour.

5 His Honour erred in fact and law in finding that the learned Magistrate's finding that in mid-September 1989 Westpac could not have had any real idea of exactly how much a concession to pay the trade creditors would cost them was not permitted by the evidence**, since such a finding was open to the learned magistrate on the evidence**.

6 His Honour erred in fact law in finding that the notation 'of the net available figure, Hosken and or LIPL will be permitted to pay out net creditors of $450,000, thus reducing the net available to Hosken, to $1,450,000' appearing on Exhibit P243 was consistent with the version of events provided by Mr Earl, since there was no evidentiary basis for such a finding by his Honour.

7 His Honour erred in fact and law in (a) finding that Mr Earl's recollection was comprehensive, in that there was no evidentiary basis for such a finding by his Honour;, and (b) in inferring that and his state of mind did not follow from a misunderstanding of a 'walk in, walk out' agreement, in that there was no evidentiary basis for such an inference reasonably to be drawn by his Honour.

8 His Honour erred in fact and in law in concluding that there was no misunderstanding between Mr Alexander and Mr Earl other than as to which legal entities were at the particular time operating the hotel, in that there was no evidentiary basis for such an inference reasonably to be drawn by his Honour.

9 His Honour erred in fact and in law in finding concluding that the learned Magistrate's conclusion that an agreement for Westpac to pay the trade creditors was unlikely to have been made was flawed, since that conclusion was open to the learned magistrate, and logically arrived at by him.

10 His Honour erred in fact and in law in finding Westpac was in disputation with Lloyds Bank NZA Limited**, in that there was no evidentiary basis for such a finding by his Honour.**

11 His Honour erred in fact and in law in finding there had been a threat of legal action, in that there was no evidentiary basis for such a finding by his Honour.

12 His Honour erred in fact and in law in finding that the learned Magistrate had erred as to the onus of proof and had required the Respondent to prove the existence of an agreement whereby Partnership Pacific Ltd agreed to pay the trade creditors of the hotel.

13 His Honour erred in fact and in law in finding that the learned Magistrate had erred as to the onus of proof and had required the Respondent to prove he believed Partnership Pacific Ltd had agreed to pay the trade creditors of the hotel.

14 His Honour erred in fact and in law in finding holding that the learned Magistrate in finding that Mr Earl had not in writing suggested that Westpac would pay the trade creditors immediately from its own funds, had made a finding not permitted by the evidence and in treating two letters written by Mr Earl as unambiguously making such a suggestion.

15 His Honour erred in fact law in finding there was evidence of Mr Earl having told Mr Hosken of a concluded agreement to the effect that Westpac would be responsible for the unsecured trade creditors, in that there was no evidentiary basis for such a finding by his Honour.

16 His Honour erred in fact and in law in finding that Mr Hosken transferred certain properties, which had not been subject to a security, to Westpac, and in treating the evidence of property transactions and subsequent payments to Westpac as corroborative of Mr Earl's evidence and as suggesting innocence on the part of the Respondent, in that there was no evidentiary basis for such findings and conclusions by his Honour.

17 His Honour erred in law in setting aside the convictions on counts 5 and 6 on the 15th March 1999 without being satisfied that the findings made by him at that stage led to a conclusion that those convictions could not properly stand.

18 His Honour erred in law in failing to consider a submission to the effect that AH No2 Pty Ltd had a contingent liability to pay some $26 million pursuant to a guarantee, by reason of which the payments to which counts 5 and 6 related must have involved an improper use of the Respondent's position as director.

19 His Honour erred in law in finding that a belief by the Respondent that the making of the payments to which counts 5 and 6 related was for the benefit of Launceston International Hotel Pty Ltd (if he had such a belief) negated the impropriety of his conduct in making those payments.

20 His Honour acquitted the Respondent on counts 5 and 6 on grounds unconnected with the grounds listed in the Notice to Review.

21 His Honour erred in fact and in law in finding that he could not be satisfied beyond reasonable doubt that the Respondent did not hold a belief at the date of payment to Douglas & Collins and Minter Ellison there existed an enforceable cause of action on the part of AH No2 Pty Ltd against Westpac.

22 His Honour erred in fact and in law in finding that he could not be satisfied beyond reasonable doubt that the Respondent did not believe the payments made to Douglas & Collins and to Minter Ellison were to the detriment of AH No2 Pty Ltd in that their continued involvement in he affairs of the company was necessary for the maintenance of proceedings against Westpac.

23 His Honour erred in fact and in law in holding that he could be satisfied beyond reasonable doubt that the purpose of the payments made to Douglas & Collins and Minter Ellison was to give those two firms of solicitors an advantage not to gain an advantage for those solicitors.

24 His Honour erred in fact and in law in finding that he was not satisfied beyond reasonable doubt that at the time the payments were made to Douglas & Collins and Minter Ellison that the Respondent had no belief that he was protecting AH No2 Pty Ltd's cause of action against Westpac."

28 It will be immediately apparent that the attempt to accommodate some of the grounds to the statutory limitations of s123 must be unsuccessful as some of the grounds, even in their amended form, plainly do not involve questions of law.

29 Counsels' researches were unable to acquaint us with any appellate structure directly comparable with that adopted in the Justices Act. It is noteworthy that an appeal to a judge from a magistrate is permitted by s107(4) in respect of errors or mistakes on matters or questions of fact alone, or of law alone, or of both fact and law. Thus, when the matter came before Slicer J, he was entitled, indeed, obliged, to consider both the legal and factual issues which were raised for his consideration within the parameters of the grounds of the motion to review. Those grounds were as follows:

"1 The learned Magistrate erred in fact and in law in finding that

(i) there was no agreement for Westpac or associated entities to pay trade creditors of AH No 2 Pty Ltd other than a category of essential creditors;

(a) Mr Earl had given evidence that he had negotiated such an agreement with the Westpac Bank and Associated entities through Mr Peter Alexander on the 17th of September 1989;

(b) Mr Earl had given evidence that he had no doubt that the Applicant understood that that was the arrangement negotiated;

(d) both findings were against the weight of the evidence.

2 The learned Magistrate erred in fact and in law in rejecting the Applicant's explanation that the reimbursement to Barrington Investments Pty Ltd of the sum of $22,926.50 was in the interests of A H No 2 Pty Ltd and other interested parties so that the pub front transfer could be finalised, and in finding that Barrington Investments Pty Ltd was just another creditor and that the payment was an improper preferential payment.

3 The learned Magistrate erred in fact and in law in finding that the payment of $8,000.00 to Messrs Douglas & Collins which was the subject of Count 5 was an improper preference apart from the sum of $1,530.00 (after discount $1,000.00) which might have related to advice and/or work for A H No 2 Pty Ltd, in that he failed to take into account that the work done by Messrs Douglas & Collins that was the subject of the account for costs for which that payment was made was in respect of the negotiation, sale or realisation of Hosken group assets for the purpose of meeting the liabilities to creditors of A H No 2 Pty Ltd and therefore for the benefit of A H No 2 Pty Ltd.

4 The learned Magistrate erred in fact and in law in finding that the payment of the sum of $14,996.00 to Messrs Minter Ellison on payment of their account which was the subject of Count 6 involved an improper preference to those solicitors.

5 The sentence of imprisonment imposed was manifestly excessive."

30 According to the appellant's written submissions lodged upon the appeal to this Court, its principal contentions are as follows:

"(a) The learned primary judge made his own findings of fact in relation to counts 2, 3 and 4 when this was not an appropriate case for findings of fact leading to acquittal to be made in appellate proceedings (Grounds 1 and 2).

(b) The learned primary judge made a number of miscellaneous errors of law in the reasoning process that led to the acquittals on counts 2, 3 and 4 (Grounds 3 to 16).

(c) His Honour should not have quashed the convictions on counts 5 and 6 when he did, because he had not reached a conclusion that those convictions could not properly stand (Ground 17).

(d) The grounds upon which his Honour acquitted the respondent on counts 5 and 6 were unconnected with the grounds listed in the notice to review (Ground 20).

(e) His Honour made a number of errors in the reasoning process that led to the acquittals on counts 5 and 6 (Grounds 19, and 21 to 24).

(f) His Honour failed to consider a submission in relation to counts 5 and 6 which should have been considered and should have led to the convictions on those counts being restored (Ground 18)."

31 If the present grounds of appeal are considered, it will be seen that they fall into three broad categories. First, there are those grounds which, as drawn, plainly involve questions of law. Those grounds are, grounds 12, 13, 17, 18, 19 and 20 and, arguably, 23. Secondly, there are those grounds which allege that his Honour made findings which could not be supported by any evidence. Those grounds are, grounds 3, 4, 6, 7, 8, 10, 11, 14, 15, 16, and, arguably, 21 and 22. If these contentions are correct, they involve errors of law. Thirdly, there are grounds which call in question his Honour's findings of fact and plainly do not involve any obvious question of law. These grounds are, grounds 1, 2, 5, 9 and 24.

32 It is plain from the combined provisions of ss107(4) and 110(2), that the powers of a judge hearing a notice to review are directly comparable with the powers of a Full Court hearing an appeal from a judge at first instance by way of rehearing. Such a rehearing takes place upon the materials which were before the judge at first instance and as the majority of the High Court in Warren v Coombes (1978 - [1979] HCA 9; 1979) 142 CLR 531 at 547 observed, it is sometimes unnecessary for the purpose of reaching a decision as to the appropirate outcome for the appellate court to distinguish between matters of fact and matters of law so long as the appellate court gives appropriate respect and weight to the conclusions of the trial judge. As their Honours said at 551:

"... we think, that in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it. These principles, we venture to think, are not only sound in law, but beneficial in their operation."

"The duty of the appellate court is to decide the case - the facts as well as the law - for itself. In so doing it must recognize the advantages enjoyed by the judge who conducted the trial. But if the judges of appeal consider that in the circumstances the trial judge was in no better position to decide the particular question than they are themselves, or if, after giving full weight to his decision, they consider that it was wrong, they must discharge their duty and give effect to their own judgment."

33 In the ordinary case, the entire appellate process in civil proceedings from trial judge through the Full Court to the High Court, involves this process because each appellate court has the power to review the decision appealed from, both in respect of matters of fact, as well as matters of law provided, of course, that the grounds of appeal are sufficiently wide to require this course. However, when we turn to the provisions of the Justices Act, it is apparent that the legislature has been concerned to ensure that the broad grounds of appeal available to a person aggrieved by a decision of justices or a magistrate are substantially curtailed at the second appellate level by ensuring that the Full Court is limited to consideration of legal mistakes which may have been made by the judge hearing the notice to review. It is easy enough to dress up questions of fact as though they were questions of law, and it is apparent that there has been an attempt to do this in the present case. It is important, therefore, to bear in mind the decision of the Court of Appeal in New South Wales in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139. In that case, the court was considering a provision in the Workers Compensation Act 1926 (NSW), s37(4)(a) which provided that a party aggrieved in proceedings before the Workers Compensation Commission might appeal to the Court of Appeal upon motion in relation to a "point of law" or "in relation to the admission or rejection of any evidence" - limitations similar to those finding expression in the Justices Act, s123(1). The majority of the court held that the relevant section did not allow the Court of Appeal to correct errors of fact and any argument that a finding of fact was perverse, contrary to the overwhelming weight of the evidence, was against the evidence or the weight of the evidence, or that it ignored the probative force of the evidence, which is all one way, or that no reasonable person could have made that finding, or that the reasoning by which the court arrived at the finding was demonstrably unsound, did not disclose a valid ground of appeal because such contentions did not disclose any error of law. As Glass JA observed at 156:

"A purported ground of appeal which submits that there was no evidence that or it was not open to find that the applicant was not injured constitutes a futile attempt to convert a question of fact into a question of law by inverting the onus of proof."

This observation has direct application to some of the grounds which were argued before this Court. The New South Wales Court of Appeal acknowledged that the question whether there is any evidence of a particular fact is a question of law, but pointed out if there is evidence of the fact, the question whether or not that evidence ought to be accepted in whole or in part, or ought to be accepted as sufficient to establish the fact, is itself a question of fact and not a question of law. The court also observed that there is no rule of law that a tribunal must believe evidence because it is all one way. It can accept all, or some, or none of the evidence. A contrary view on some of these issues was expressed by Kirby P, who espoused the view that a perverse finding of fact involved an error of law and drawing of an inference which could not reasonably be drawn also involved such an error.

34 Kirby J's interest in this particular area is also evident from his judgment in State Rail Authority of New South Wales v Earthline Constructions Pty Limited (In Liquidation) [1999] HCA 3; (1999) 73 ALJR 306 at 325 and following. His observations as to interference with findings based upon credibility are of particular relevance to some of the present grounds of appeal which seek to impugn Slicer J's findings which differed from those of Magistrate Mollard. There can be no general rule that an appellate court is precluded from differing from a judge or magistrate at first instance, even where such findings have been based upon the creditworthiness of the witness. Obviously great respect has to be paid to such findings by the tribunal or court which actually observed the witness in question, but such findings are not unassailable and I respectfully share the view of Kirby J that the judgment of the court in Abalos v Australian Postal Commission (1990) 177 CLR 167, properly understood is not authority to the contrary.

35 It was not argued that Slicer J's findings contrary to those made by Magistrate Mollard or his ultimate findings that the onus of proof had not been discharged by the prosecution in relation to complaints 2, 3 and 4, had not been discharged, amounted to perverse findings. If the appeal to this Court permitted a comparison of the judgments delivered by Magistrate Mollard on the one hand, and Slicer J on the other, in respect of factual matters, it may well be demonstrated that Magistrate Mollard's conclusions were preferable to those reached by Slicer J, but the limited appellate provisions of the Justices Act do not permit that approach by this Court. Within the ambit of the notice to review, Slicer J was empowered to reach contrary conclusions from those reached by Magistrate Mollard in respect of matters of fact. We cannot interfere with those findings of fact unless they proceeded from legal error. As Glass JA observed in Azzopardi at 156 - 157:

"It has been suggested that since judges unlike juries are required to give reasons a perversity of result will or may suggest an error at some stage of the reasoning process and the perversity will then rise to the level of an error of law. It is important, I believe, to remember that whether an error is one of fact or law is determined by legal theory and the theory is the same whether the tribunal be divided or undivided. Errors may be committed by a Workers' Compensation judge at any one of three points viz determining the facts by way of primary findings and inferences, directing himself as to the law and applying the law to the facts found. At the first stage the determination of facts by a reasoning process marred though it be by patent error, illogicality or perversity will, as has been said, never be vulnerable to attack as an error of law by an applicant for compensation. At the second stage any error made will by definition be an error of law. At the third stage when the law correctly stated is applied to the facts found in order to produce a conclusion error may intrude again. An erroneous conclusion that facts properly determined fail to satisfy a statutory test, for example, injury arising out of the cause of employment, substantial interruption to journey, or failure to provide suitable employment will ordinarily be an erroneous conclusion of fact. It is only in marginal cases that the statutory test is satisfied or not satisfied as a matter of law, because no other application is reasonably open: Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 at 10; Australian Gas Light Co v Valuer-General (1940) 40 SR(NSW) 126 at 138; 57 WN 53 at 55. Accordingly this Court will not entertain unexplained perversity of result as a ground for intervention although it will correct perverse or unreasonable applications of law to the facts found."

36 Applying these principles to the present grounds of appeal and the argument advanced in support of them, it is apparent, at the outset, that grounds 1, 2, 5, 9 and 24, must fail.

37 The fact is that there was direct evidence or evidence of facts sufficient to form an appropriate inference either way on those issues in respect of which the learned magistrate and Slicer J reached contrary conclusions.

38 Once it is accepted that Slicer J had power to review the learned magistrate's findings of fact, his findings are final unless a complete absence of evidence to support such findings can be demonstrated. Both counsel who presented argument to us on the appeal, whilst accepting this proposition, attempted also to argue for the correctness of the actual findings made by either the learned magistrate or Slicer J. In reality, this was a wasted effort because it is not a matter with which this Court is concerned. Slicer J was entitled to review Magistrate Mollard's findings in respect of Hosken's belief as to the existence or non-existence of Westpac's alleged agreement to pay the trade creditors. Such findings were opened up to analysis by the grounds of the notice to review. Slicer J, in a careful and reasoned approach, concluded that the learned magistrate's conclusions could not stand. In doing so, he was making a judgment on factual matters (see Jordan CJ, McPhee v S Bennett Ltd (1934) 52 WN NSW 8 and 9).

39 The approach of the High Court in reinstating the decision of the trial judge in Devries and Another v Australian National Railways Commission and Another (1992 - 1993) 177 CLR 472 is of interest in this context. There, the trial judge had observed the plaintiff giving evidence over a long period of time in the witness box and had based his decision to accept his evidence very largely on his assessment of the demeanour and general credibility of the witness. Notwithstanding this assessment, the Full Court of South Australia considered the plaintiff's evidence to be inconsistent with previous statements he had made and rejected him as a reliable witness as a consequence and overturned the judgment in his favour. The case then went on appeal to the High Court. The appeal to the High Court, like the appeal to the Full Court, was an appeal by way of rehearing.

"More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against - that finding of fact. See Brunskill [1985] HCA 61; (1985) 59 ALJR 842; 62 ALR 53; Jones v Hyde [1989] HCA 20; (1989) 63 ALJR 349; 85 ALR 23; Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167. If the trial judge's finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge 'has failed to use or has palpably misused his (or her) advantage' SS Hontestroom v SS Sagaporack (1927) AC 37, at p 47 or has acted on evidence which was 'inconsistent with facts incontrovertibly established by the evidence' or which was 'glaringly improbable'. Brunskill (1985) 59 ALJR, at p 844; 62 ALR, at p 57.

The evidence of the plaintiff was not glaringly improbable. Nor was it inconsistent with facts incontrovertibly established by evidence. Indeed, the plaintiff's account received much support from the evidence of his wife and his fellow worker. The learned trial judge dealt in detail with the inconsistencies between the plaintiff's evidence and his out-of-court statements. No ground exists for concluding that the judge failed to use or palpably misused his advantage.

Similar views were expressed by Deane and Dawson JJ at 479 - 480. At 480 - 481, they added:

"In a case where it appears that a challenged finding of fact has, to a significant extent, been based on the trial judge's observation of the demeanour of the witnesses, the members of an appellate court are inevitably placed in a position of real disadvantage compared with the trial judge. Even in such a case, however, the 'court cannot excuse itself from the task of weighing conflicting evidence and drawing its own inferences and conclusions' The Glannibanta (1876) 1 PD 283, per James LJ, Baggallay JA and Lush J at p 287 referred to by Dixon CJ and Kitto J in Paterson v Paterson [1953] HCA 74; (1953) 89 CLR 212, at p 219. The appellate duty in such a case cannot, in our view, be explained in any short exhaustive formula. Note, in that regard, that the reference to 'glaringly improbable' in the joint judgment in Brunskill v Sovereign Marine and General Insurance Co Ltd [1985] HCA 61; (1985) 59 ALJR 842, at p 844; [1985] HCA 61; 62 ALR 53, at p 57 was by way of 'example'. It was correctly identified by Lindley MR, Rigby and Collins LJJ in Coghlan v Cumberland (1898) 1 Ch 704, at pp 704-705 in a passage which has been referred to with approval in many cases in the Court See, eg, the cases referred to by Asprey JA in Ravagnani v Hollywood Sands Pty Ltd (1972) 1 NSWLR 362, at p 367; see also McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) [1904] HCA 51; (1904) 1 CLR 243, at p 277; Kelly v Tucker [1907] HCA 40; (1907) 5 CLR 1, at p 9; Gow v White [1908] HCA 17; (1908) 5 CLR 865, at p 867; Cadd v Cadd [1909] HCA 59; (1909) 9 CLR 171, at p 179; Cock v Smith [1909] HCA 64; (1909) 9 CLR 773, at p 821; Lang v James Morrison and Co Ltd [1911] HCA 49; (1911) 13 CLR 1, at p 8; Sampson v Sampson [1911] HCA 60; (1911) 13 CLR 338, at p 343; Pendlebury v Colonial Mutual Life Assurance Society Ltd [1912] HCA 9; (1912) 13 CLR 676, at p 693; Light v Mouchemore [1915] HCA 71; (1915) 20 CLR 647, at p 649; Berwin v Donohoe [1915] HCA 79; (1915) 21 CLR 1, at p 16; Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331, at p 360; Australian Knitting Mills Ltd v Grant [1933] HCA 35; (1933) 50 CLR 387, at p 400; Edwards v Noble [1971] HCA 54; (1971) 125 CLR 296, at p 306 and 'adopted as a governing authority' Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549, per Griffith CJ at p 553. Their Lordships said:

'Even where, as in this case, the appeal turns on a question of fact, the Court of Appeal has to bear in mind that its duty is to rehear the case, and the Court must reconsider the materials before the judge with such other materials as it may have decided to admit. The Court must then make up its own mind, not disregarding the judgment appealed from, but carefully weighing and considering it; and not shrinking from overruling it if on full consideration the Court comes to the conclusion that the judgment is wrong. When, as often happens, much turns on the relative credibility of witnesses who have been examined and cross-examined before the judge, the Court is sensible of the great advantage he has had in seeing and hearing them. It is often very difficult to estimate correctly the relative credibility of witnesses from written depositions; and when the question arises which witness is to be believed rather than, and that question turns on manner and demeanour, the Court of Appeal always is, and must be, guided by the impression made on the judge who saw the witnesses. But there may obviously be other circumstances, quite apart from manner and demeanour, which may shew whether a statement is credible or not; and these circumstances may warrant the Court in differing from the judge, even on a question of fact turning on the credibility of witnesses whom the Court has not seen'."

41 The outcome of the appeal was that the judgment of the trial judge was restored. It might be thought on first reading the observations of the majority which I have set out above, that this result was achieved as a consequence of the court's finding that there had been an error of law on the part of the Full Court of South Australia. However, as pointed out in several judicial observations in the cases to which we were referred, where a court has the power and duty to review a decision appealed from on questions of fact, as well as law, it is usually unnecessary in such a process to disentangle or identify those aspects of the final decision which involve questions of fact and those which are dependent on questions of law.

42 The correct view of the High Court's judgment in Devries therefore appears to be that all High Court judges preferred the approach of the trial judge and the conclusions which he reached because he had possessed the great advantage of seeing the witness and assessing his demeanour and credibility. In other words, although the court reiterated the principles which should inform the approach of an appellate court to determinations of fact made by the trial judge, the court's decision was that the approach of the trial judge was that which they too should adopt and, by so doing, reinstate the judgment at first instance.

43 My purpose in making this analysis is to illustrate that within the normal appellate structure the rejection by a higher court of the findings made by the court below, whilst often made by reference to the cautionary principles expounded in SS Hontestroom v SS Sagaporack (1927) AC 37, and since followed by Australian Courts, is nonetheless a judgment based on the facts of the case, rather than the issues of legal principle.

44 Mr Bongiorno contends counts 3, 4, 6, 7, 8, 10, 11, 12, 13, 14, 15 and 16 must be viewed against the fact that these were quasi-criminal prosecutions in which the onus of proof of guilt lay upon the prosecutor beyond reasonable doubt and he argued that it was therefore impermissible to consider Slicer J's critique of the evidence from the perspective of Hosken being required to produce evidence to justify Slicer J's conclusions. In making the observation he did, Mr Bongiorno said Slicer J was entitled to conclude adversely to those assertions or issues which the prosecution was obliged to establish in order to succeed.

45 If those matters mentioned by Slicer J caused him to have a reasonable doubt, then unless they amounted to completely unreasonable hypotheses which could not be reasonably entertained, he was entitled to find that the prosecution should fail, even if he expressed his reasons in terms of actual findings contrary to the learned magistrate's conclusions, rather than simply as misgivings leading to his conclusion that the onus of proof had not been satisfied. Although not put exactly in these terms, I accept that the onus of proof bears upon Slicer J's judgment in this way.

46 It should also be noted that although Slicer J records in several places his disagreement with the reasoning process employed by the learned magistrate in reaching the conclusions which he recorded, his (Slicer J's) more fundamental objection was based upon the observation that the learned magistrate's line of reasoning had the effect of reversing the onus of proof to the detriment of the respondent (see his judgment at Appeal Book, 1740, par22 and 1743, par28). His Honour also concluded that the evidence did not disprove the existence of an honest, though mistaken, belief by Hosken as to facts and circumstances which would have shielded his conduct from the taint of criminality.

47 On this basis, I am quite unable to conclude that his Honour made errors of law in respect of those matters complained of in grounds 3, 4, 6, 7, 8, 10, 11, 12, 14, 15, 16, 21 and 22. Whether I would agree with those conclusions which he expressed as findings of fact, does not really arise for consideration. Insofar as his Honour recorded that the learned magistrate's findings were "not permitted" as he was "required to exclude particular evidence to justify a particular conclusion", I am satisfied that he was not purporting to state a principle of law, but was rather seeking to expose what he saw as flaws in the magistrate's reasoning process.

48 Grounds 12 and 13 are bound up with those which I have just mentioned but, in my opinion, they have no separate status or validity. They raise on their face questions of law, but what purport to be such questions are readily seen to be simply different facets of the argument which the appellant sought to advance, viz, that the learned magistrate's finding that the onus of proof had been discharged could not be sustained. This is not a proposition of law and his Honour's manner of dealing with the issue involved no mis-statement or error of law.

49 Ground 23, although nominally raising a question of law, does not do so. The argument advanced in support was concerned only with inferences from issues of fact. His Honour's view as to purpose depended upon his assessment of evidence, not upon any identifiable question of law.

50 This leaves for consideration those grounds which related to counts 5 and 6 and his Honour's decision to quash those convictions before making final determinations. Grounds 17, 18, 19 and 20 are the relevant grounds.

51 Mr Blow argued that Slicer J should have invited further submissions from counsel before making an order quashing counts 5 and 6 because until he had reached a firm decision as to the appropriate outcome, he had not concluded the rehearing required of him pursuant to the Justices Act. Furthermore, by making a decision to quash and then considering whether or not to restore the convictions, he made a procedural error and by doing so opened up the fact finding process more widely than he would otherwise have been able to. Mr Blow also complained that Slicer J failed to consider the argument set forth in ground 18 and as a consequence erred in his view as to whether or not the appellant improperly used his position as a director.

52 I have had the advantage of reading Evans J's reasons in relation to these grounds and, for the reasons which he gives, I have concluded that the appellant's arguments cannot be sustained and grounds 17, 18, 19 and 20 must fail.

53 Accordingly, I am of the view that the appeal should be dismissed.

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v

54 I have had the advantage of reading the reasons for judgment of Cox CJ and Wright J and agree with them that the appeal against Mr Hosken's acquittal on counts 2, 3 and 4 should be dismissed.

55 Grounds of appeal 17 - 24 relate to the appeal against Mr Hosken's acquittal on counts 5 and 6. I share Wright J's view that the learned primary judge did not make errors of law in reaching the conclusions which are the subject of grounds 21, 22, 23 and 24. As formulated, or argued, each of these grounds involve the assertion of an error of fact as to which there is no right of appeal; Justices Act 1959, s123(1).

56 I turn to the remaining grounds and to deal with them in the following order; 17, 19, 18 and 20.

Australian Securities and Investment Commission v Hosken [No 2] [2000] TASSC 12

At a glance

Court

Decision date

Before

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Source

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Judgment (254 paragraphs)

Australian Securities and Investment Commission v Hosken [No 2] [2000] TASSC 12 (7 March 2000)

Parties

Legislation Cited (1)

Cases Cited (27)