Bigatton v R

Background

1. By way of further background, it is convenient here to outline the Crown case in relation to Count 2, as drawn from the Amended Crown Case Statement (CCS) and the particulars that the Crown has provided by letters dated 11 March 2022 and 15 September 2023, respectively; and as explained in the submissions the Crown has made on the present application.
2. Count 2 on the indictment charges that the applicant: 2. Between about 14 August 2017 and about 18 January 2018 at Sydney in the State of New South Wales and elsewhere did provide a financial service, namely providing financial product advice, on behalf of another person who carried on a financial services business, namely the proprietors of the BitConnect Lending Platform, without satisfying the conditions in subsection 911B(1)(a) to (d) of the Corporations Act 2001 (Cth). Contrary to sections 911B(1) and 1311(1) of the Corporations Act 2001 (Cth).
3. The Crown case is that between about 14 August 2017 and 18 January 2018, the applicant operated a managed investment scheme in Australia (the BitConnect Lending Platform, defined in the CCS as the Lending Platform) that was required to be (but was not) registered; and that he provided financial services "namely financial product advice on behalf of another person, namely the proprietors of the Lending Platform", without holding an Australian Financial Services licence (AFSL) or authority to provide financial services (see CCS at [2]).
4. The Crown says that its case is that the applicant provided a financial service on behalf of a principal (who it says, as a matter of statutory construction, may be constituted by one or more people from time to time); and that it does not contend that the applicant provided a financial service on behalf of a number of different people (see Crown written submissions at [41]).
5. The CCS explains that "BitConnect" was an online cryptocurrency platform (CCS at [1]; [3]) offering investment opportunities through a particular website ([3]); and that the Lending Platform (i.e., that which was described as a managed investment scheme) was promoted as an investment opportunity. In order to "participate", investors were required to acquire BitConnect coin ("a cyptocurrency token offered by BitConnect through its website") (CCS at [3]).
6. Pausing here, there is some seeming infelicity in the language used in the CCS (which is the subject of complaint by the applicant), insofar as the term "BitConnect" seems to be defined at the outset (at [1]) to refer to an online cryptocurrency "platform" (the Crown here says it is a "facility" (see Crown written submissions at [34(c)])) and as something separate from the Lending Platform itself (see CCS at [3]) but also as an entity or thing capable of making representations (at [4], for example, it is said that BitConnect made a number of representations "about the Lending Platform" and elsewhere reference is made to encompass "any entity called BitConnect"). A footnote to [10] of the CCS explains that the term "BitConnect" is used to refer to the cryptocurrency platform; and that BitConnect Ltd and BitConnect International PLC are used to refer to the specific companies (see below).
7. At [4] of the CCS, it is said that the salient feature of the Lending Platform was that it pooled investors' funds to profit from "trading bot and volatility software" which would purportedly capitalise on fluctuations in the price of Bitcoin. The CCS goes on to state that: investors received daily interest, depending on the amount they had initially invested by way of a "loan" to the Lending Platform, which could be reinvested (subject to a minimum investment amount) and that investors did not control their loans once invested, nor could they withdraw their capital investment until the expiry of the lending period ([5]); that upon maturation, investors would receive their capital investment or could reinvest in the Lending Platform; and that they would receive their capital and interest payments in BCC (BitConnect coin) (represented nominally in USD on the BitConnect website ([6])); that the Lending Platform had been described as comprising two accounts in which investor funds were pooled (the reserve fund and a trading account) ([7]); and that in order to invest in the Lending Platform investors were required to sign up to BitConnect and purchase Bitcoin to be exchanged for BCC; and the investors would then "lend" their BCC to the Lending Platform ([8]).
8. The CCS then identified companies incorporated in the United Kingdom that it is said were represented to have been "the corporate entity behind BitConnect", namely: BitConnect Ltd (which was dissolved on 13 March 2018) and BitConnect International PLC (the directors of which were listed on the UK Companies House register as including a "John Bigatton" but whose details on that register did not accurately reflect those of the applicant (see [10]-[17])). The CCS states at [18] that between about 11 November 2017 and 18 January 2018, the applicant represented to investors and other individuals that he was a director of BitConnect International PLC and that his details listed on the UK Companies House register were deliberately incorrect to protect his identity.
9. Relevantly, at [19] of the CCS it is said that: The proprietors of BitConnect and the Lending Platform, and the person(s), or entity (entities) who in fact operated BitConnect were not known publicly, however, Mr Satish KUMBHANI (KUMBHANI) is believed to have been the operator of BitConnect. KUMBHANI has been described as the "Marketing Manager of BCC", the "Owner", the "All Asia Promoter" and the "main representative" of BitConnect.
10. From [20] of the CCS, the Crown details matters such as: the applicant's background in financial markets and financial services, including his training and professional experience; and his previous involvement in a managed investment scheme (Exodus 20 trust) which was not required to be registered (as a result of which involvement it is said that the applicant was aware that, subject to certain exemptions, managed investment schemes operating in this jurisdiction were required to be registered). The CCS goes on to describe the allegations as to the applicant acting as the national promoter for BitConnect in Australia; that he was part of BitConnect's affiliate "Bonus Program" and a part of the initiative known as the "One Structure".
11. At [40] of the CCS it is said that, on or about 18 August 2017, the applicant was appointed "by BitConnect" to be the National Promoter of BitConnect in Australia "as part of their One Structure initiative". The CCS then sets out various steps taken by the applicant in relation to BitConnect and his engagement of regional promoters (see from [41]-[55]) and the way in which the applicant is said to have described himself to investors ([56]).
12. As to Count 1, the CCS sets out the Crown case that: the Lending Platform was a managed investment scheme ([57]); the applicant operated the Lending Platform ([58]); and that the Lending Platform was required to be registered under s 601EB(1) of the Corporations Act (and was not so registered) ([59]).
13. As to Count 2, the CCS sets out the Crown case that: the applicant conducted seminars around Australia promoting BitConnect and the Lending Platform ([60]-[66]); the applicant engaged in other activities to promote BitConnect ([67]-[68]); and that during the period of the offending not one of BitConnect Ltd, BitConnect International PLC "(or any entity called BitConnect)", the applicant or his wife, or the GAL Consultancy Trust (a discretionary management trust through which the applicant was or had been a consultant) held an AFSL or authorisation to provide financial services in Australia ([69]).
14. At [70]-[71] of the CCS, it is said that: 70. The financial service provided by BitConnect was the dealing in a financial product, namely a facility through which a person made a financial investment or non-cash payment. BitConnect was carrying on a financial services business through the operation of the Lending Platform which required members to exchange Bitcoin (purchased using money) for BCC, to be lend to that platform. 71. In the course of carrying out the seminars and promotional activities, the Accused made statements of opinion and recommendations which were intended, or could reasonably be regarded as being intended, to influence persons to make a decision about a financial product, namely investments in the Lending Platform. In doing so, the Accused provided financial product advice in Australia on behalf of the proprietors of the BitConnect Lending Platform without holding an AFSL, or authority, to provide financial services.
15. The CCS then set out further conduct relied upon in support of the charges ([73]-[93]); the closure "by BitConnect" of the Lending Platform ([94]-[95]); and that investors incurred significant financial losses as a result of the closure of the Lending Platform ([96]).
16. The CCS also noted at [97] that the applicant gave a voluntary interview on 12 December 2018 to officers of the Australian Securities and Investments Commission; and set out a number of admissions and statements made by the applicant during that interview (at [98]).
17. By letter dated 11 March 2022, the Commonwealth Director of Prosecutions, responding to an earlier request for particulars, identified the "principal" for the purposes of s 911B(1) of the Corporations Act (relevant to Count 2) as being: one or more of the following: a. BitConnect Limited; b. BitConnect International PLC; c. Satish Kumbhani; d. JB's Investment Management Pty Limited ATF GAL Consultancy Trust.
18. That letter stated, among other things, that the allegation was that the applicant was promoting the BitConnect Lending Platform; that while he had an interest in that platform, he was not himself that platform; and that his management and promotional activities were conducted by him personally for the benefit of the BitConnect Lending Platform "and on their behalf" (see at page 3, (c)); and that the relevant financial product was the BitConnect Lending Platform, including the related sale of BitConnect coin (see at page 3, (d)).
19. Further particulars were provided by letter dated 15 September 2023, following the Quash Decision. Relevantly, in relation to Count 2, the Crown provided particulars of 32 instances of the alleged financial product advice (at pages 2-6); repeated that the allegation was that the relevant financial product was the BitConnect Lending Platform, including the related sale of BitConnect coin; repeated that it relied on the following limbs of s 763A(1) of the Corporations Act: making a financial investment and making non-cash payments; repeated the identification of the principal (as previously particularised and as set out above); and advised that it relied on the following limbs of s 766A(1) of the Corporations Act as the financial services that the financial services business was providing: provide financial product advice and deal in a financial product (at page 7). The letter stated in relation to the last of those matters that: s 911B of the Corporations Act does not require there be more than one Principal, but that the Principal can be one or more persons. The Crown case is that each of, or a combination or succession of each or all of, the four legal persons previously identified constitute the principal.
20. The applicant here complains that the combination of 32 instances and 24 different permutations of principal gives rise to an extensive list of offences and, even if not duplicitous, is oppressive.
21. In its submissions, the Crown says that its case includes, but is not limited to, the following facts and/or legal propositions (see Crown written submissions at [34]). First, that, for the purposes of Chapter 7, a financial product is a facility through which a person makes a financial investment, or makes non-cash payments. Second, that financial product advice is a recommendation or a statement of opinion, or a report of either of those things that, relevantly, is intended (or could reasonably be regarded as being intended) to influence a person or persons in making a decision in relation to a particular financial product. Third, that the BitConnect Lending Platform was a facility through which a person made a financial investment or non-cash payment. Accordingly, it is said that the BitConnect Lending Platform was a financial product in relation to which the applicant gave financial product advice. The Crown says that, for the purposes of Chapter 7, "dealing in a financial product" includes "issuing a financial product". The Crown says that "issue" includes "in relation to interests in a managed investment scheme - make available"; and that when "issue" is used in Chapter 7 in relation to a financial product, it has a meaning affected by s 761E. The Crown says that a financial product is issued to a person when it is first "made available to a person". The Crown case is that the proprietors of the facility, being the "BitConnect Lending Platform", carried on a financial services business in this jurisdiction (Australia) because they were in the business of providing financial services, either by dealing in a financial product, or providing financial product advice themselves; and that the principal carried on a business of providing financial services because they (the proprietors) dealt in a financial product each time they made the "BitConnect Lending Platform" available to an investor.
22. The Crown contends that each time the applicant made a recommendation or a statement of opinion, or a report of either of those things, intended (or reasonably regarded as being intended) to influence a person or persons in making a decision in relation to the "BitConnect Lending Platform", the applicant was providing financial product advice; and that each time the applicant did so on behalf of the proprietors of the "BitConnect Lending Platform", he was doing so on behalf of another person (the principal) who carried on a financial services business in Australia.
23. The Crown makes clear that the Crown does not allege that the "Bitconnect Lending Platform" was a legal entity, nor a tangible thing capable of being owned; nor does the Crown allege that it was a business. Rather, the Crown says that the "Bitconnect Lending Platform" was, for the purposes of the Corporations Act, a facility (which concept includes intangible property and/or an arrangement, or a combination of intangible property and an arrangement) through which a person makes a financial investment or makes non-cash payments.

Leave

1. The applicant acknowledges that appeals under s 5F attract a stricter procedural distinction between the substantive appeal and the question of leave, referring to R v Matovski (1989) 15 NSWLR 720. The Crown also points to the high degree of restraint that is required where there is an interlocutory decision on a matter of practice and procedure, as distinct from a decision determinative of legal rights.
2. The applicant submits that leave should be granted for the following reasons. First, that the appeal alleges an error of law in the construction of s 911B of the Corporations Act, which it is noted is an important Commonwealth Act with wide application and on which issue of construction the applicant notes there is no authority. The applicant notes his Honour's comments at [46] and [51] of the Quash Decision indicating that it would be of assistance if there were guidance as to this issue (7/02/2024; AT 2.32-33). Second, that the point of principle raised (i.e., whether a "principal" for the purposes of s 911B(1) can be multiple persons where they are neither partners in a partnership nor trustees of a trust) has wide potential significance. Third, that there is a clear arguable error in his Honour's reasoning. Fourth, that the appeal also raises questions as to whether a trial judge has a discretion not to quash an indictment which the judge is satisfied does not disclose an offence known to the law; and the impact of not doing so on the court's jurisdiction.
3. The Crown refers to DSJ v R; NS v R [2014] NSWCCA 77 (DSJ v R; NS v R) at [4]-[11], where Gleeson JA (with whom Hidden J agreed) identified five considerations applicable when considering the grant of leave under s 5F, including that: leave should not readily be granted unless an appropriate case is made out showing an error of principle which is apt to cause an irregularity or an injustice; that substance, and not mere form, should prevail; that one of the principal reasons for subjecting appeals from interlocutory orders in criminal cases to the requirement to obtain leave is to prevent or minimise the fragmentation of the process of criminal justice; and that an appeal from an interlocutory judgment is subject to the degree of appellate restraint identified in House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40 (House v The King).
4. As to the application for leave to appeal, while appellate restraint should certainly be shown in relation to leave applications under s 5F of the Criminal Appeal Act, in the present case leave to appeal should be granted since the proper construction of s 911B of the Corporations Act (as to the definition of principal) is of potential significance in the area of corporations law.

Standard of appellate review

1. There is a dispute between the parties as to the standard of appellate review applicable in this case. The applicant maintains that it is the Warren v Coombes (1979) 142 CLR 531 at 552; [1979] HCA 9 "correctness" standard; the Crown, on the other hand, argues that it is the House v The King standard applicable to discretionary decisions (thus requiring the applicant to identify House v The King error).
2. The Crown draws a distinction in this regard (at least in relation to stay applications) between civil and criminal proceedings. In response, the applicant argues that the touchstone in either case is an abuse of process; and submits that there is no justification for drawing a distinction between the standard of review in civil and criminal proceedings on something so important.
3. As to the appeal in relation to the Quash Decision, in reply submissions the applicant argues that DSJ v R; NS v R is not authority for the proposition that all appeals brought under s 5F by accused persons must show House v The King error, noting that at [11] in that case Gleeson JA referred in his fifth proposition to an appeal from an interlocutory judgment on an application for separate trials (his Honour there citing Re Will of F B Gilbert (deceased) (1946) 46 SR (NSW) 318 at 323; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177; [1981] HCA 39 as to the need for appellate restraint). The applicant accepts that an application for separate trials is "quintessentially a discretionary decision" to which House v The King applies but says that the question whether an indictment is duplicitous or fails to allege an offence known to the law is not a discretionary decision; rather, it is an issue about which there is only one legally permissible answer (the indictment either does, or does not, charge multiple offences in a single count; or it either does, or does not, allege an offence known to the law).
4. In relation to the Stay Decision, the applicant points to the decision of the High Court in GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32 (GLJ) (at [28] (Kiefel CJ, Gageler and Jagot JJ)) as authority for the proposition that the standard of appellate review for a stay application is not the House v The King standard; and argues that the touchstone for whether a stay ought to be ordered is whether the matter sought to be stayed constitutes an abuse of process. The applicant notes that the Victorian Court of Appeal has observed that "[a]lthough GLJ concerned a civil proceeding, there is no reason in principle it would not also apply to criminal proceedings" (Commonwealth Director of Public Prosecutions v Luis Knopp (a Pseudonym) [2023] VSCA 315 at [165] (Niall JA, Kidd and Tinney AJJA)).

Quash Decision

1. In the Quash Decision, his Honour addressed (from [30]) the test to be applied in determining the proper construction of s 911B(1) for the purpose of answering the question whether a series of offences which might otherwise be capable of constituting a series of single offences could be rolled together into an alleged course of conduct which constituted one overarching offence (for the purpose of the framing of an indictment); and proceeded to resolve the question by reference to a composite of the various legal tests (statutory construction; the application of common sense to determine what is fair in the circumstances; and the practical approach - see at [44]) ([51]).
2. In that regard, his Honour considered that the approach adopted at first instance by Heerey J in Australian Securities and Investments Commission v Oxford Investments (Tasmania) Pty Ltd (2008) 169 FCR 522; [2008] FCA 980 and by Gordon J sitting in the Federal Court in Australian Securities and Investments Commission v Monarch FX Group Pty Ltd [2014] FCA 1387 was instructive (albeit not binding authority), identifying that approach as supportive of the Crown's submission ([54]-[55]). The Crown had submitted that the applicant's construction of the statutory provisions was too narrow; and that the "gist and flavour" of the offence was the course of conduct of providing a financial service such that the prohibition was not focused on each statement or action made in the course of providing the financial services on behalf of another person (see as summarised at [25]-[29]).
3. His Honour accepted (at [59]) the Crown's submission that it is permissible for the Crown to rely on a course of conduct over a specific closed period of time which may involve multiple examples of the provision of financial services (reading s 911B(1) in conjunction with s 766A(1), which defines "a financial service", and s 766B, which defines "financial product advice"). His Honour did not accept that the drafting of the provision in the singular prohibited a course of conduct type case (at [60]).
4. While his Honour considered that there was some merit to the applicant's submission that a contrary intention (to that which would otherwise be the case pursuant to s 23 of the Acts Interpretation Act 1901 (Cth) (Interpretation Act) for provisions in the singular) could be discerned from the drafting of various definitions in Div 4 Ch 7 of the Corporations Act, his Honour suggested that the different methods of drafting could be explained by the different concepts being defined and did not consider that the use of the plural in other defined terms demanded that s 766B (which defines "financial product advice") be read in its strict grammatical sense (at [63]).

Stay Decision

1. As to the application to stay Count 2, this was dealt with briefly by his Honour, who noted that the submissions made by the applicant squarely replicated those that had been made in support of the (unsuccessful) application to quash Count 2 on the indictment, albeit that the fresh particulars that had been provided permitted the applicant to contend that he was being asked to answer 768 separate cases (at [93] of the Stay Decision). His Honour accepted that the arithmetical exercise carried out by the applicant did lead to a "rather startling number" but did not accept that the applicant was being asked to identify 768 potential Crown cases (at [97]). His Honour considered that the way the Crown case was put fell within "easily understandable silos" which did not need to be considered on a "line by line basis" (at [97]). His Honour did not see any oppression in the way the case had been particularised that would justify a permanent stay and said that nothing on the stay application caused him to depart from what he had said in the Quash Decision (referring particularly to [69]-[72] of those reasons) (at [98]; and see [102]).

Ground 1 - alleged error in failing to quash Count 2

Applicant's submissions

1. The applicant submits that his Honour erred in failing to quash Count 2 on three bases.
2. First, referred to by the applicant as ground 1(a), that the "principal" on whose behalf the applicant is alleged to have provided a financial service must be: a single natural or legal person; partners in a partnership (referring to s 761F of the Corporations Act); or trustees in a trust (referring to s 761FA of the Corporations Act). Hence it is said that the identification of multiple "principals" in Count 2 of the indictment resulted in the count either: failing to allege an offence known to the law (and hence being demurrable: The King v Boston (1923) 33 CLR 386 at 396 (Isaacs and Rich JJ); [1923] HCA 59; R v Glynn (1994) 33 NSWLR 139 at 140-141 (Allen J, with whom Hunt CJ at CL and Finlay J agreed)); or alleging more than one offence in contravention of the rule against duplicity (citing R v Jasper [2003] NSWSC 285).
3. Second, referred to as ground 1(b), that, even assuming multiple principals can be averred, the identity of the principal is a factual matter that should be squarely pleaded in order to avoid uncertainty in the charge.
4. Third, referred to as ground 1(c), that Count 2 fails to aver an offence known to the law on the basis that it fails to allege all of the necessary conditions to make out an offence contrary to ss 911B(1) and 1311(1) of the Corporations Act.
5. The three bases of complaint in relation to ground 1, all of which largely replicate the submissions made before the primary judge, are dealt with sequentially as follows.

Applicant's submissions

1. The applicant says that the indictment is objectionable in averring that the "principal" on whose behalf the applicant is said to have provided a financial service in this jurisdiction for the purposes of s 911B(1) is "the proprietors of the BitConnect Lending Platform".
2. The applicant's essential premise is that "principal" in s 911B(1) can only be a single natural or legal person (or, as specifically contemplated elsewhere in the legislation, partners in a partnership (see s 761F) or trustees in a trust (see s 761FA)). The applicant emphasises that the language of s 911B(1) is that of a person providing financial services "on behalf of another person (the principal)".
3. The applicant argues that s 23 of the Interpretation Act (which provides that "words in the singular number include the plural") does not apply because a contrary intention (see s 2(2) of the Interpretation Act; Pearson v Minister for Home Affairs (2022) 295 FCR 177; [2022] FCAFC 203 at [43] (Allsop CJ, Rangiah and Derrington JJ)) is here manifested. Noting that a contrary intention can be discerned from, among other things, "the section in its setting in the legislation and … the substance and tenor of the legislation as a whole" (Blue Metal Industries Ltd v Dilley (1969) 117 CLR 651 at 656 (Lord Morris of Borth-y-Gest, with whom Lords Pearce, Wilberforce, Pearson and Diplock agreed)), what the applicant here relies upon as manifesting a contrary intention are the following matters.
4. First, that the text of s 911B defines the other person using the definite article ("the principal").
5. Second, that Parliament has expressly contemplated that, within Ch 7 of the Corporations Act, "person" should be taken to include a partnership or the multiple trustees of a trust (ss 761F and 761FA). The applicant submits that the Parliament has prescribed, by implication, the limited circumstances in which "a person" in s 911B can refer to multiple people. The applicant argues that the very enactment of ss 761F and 761FA is evidence of a contrary intention, in that if "a person" in Ch 7 of the Corporations Act (including s 911B(1)) was intended to refer to multiple persons, then it is difficult to see what work ss 761F and 761FA would have to do.
6. Third, the applicant says that it is contemplated by the conditions in ss 911B(1)(a)-(c) that "the principal" be a person who is capable of holding an AFSL. The applicant says that the Corporations Act does not countenance multiple people holding the same AFSL unless they are a "partnership or the trustees of a trust" (referring to s 913B(3) of the Corporations Act).

Crown's submissions

1. As to the applicant's "contrary intention" submission (by reference to ss 761F and 761FA), the Crown argues that this ignores the effect of s 20 of the Corporations Act, which (headed "Carrying on a business: alone or together with others") was raised in submissions before the primary judge and which provides that: A reference in this Act to a person carrying on a business, or a business of a particular kind, is a reference to the person carrying on a business, or a business of that kind, whether alone or together with any other person or persons.
2. The Crown submits that s 20 is picked up by s 911B through a number of separate interpretive provisions. In this regard, the Crown refers to the reference in s 911B to the principal "carrying on" a "financial services business" and the definition of "financial services business" in s 761A (that "financial services business" means "a business of providing financial services"). It is noted that s 761C provides that, in working out whether someone "carries on a financial services business", Div 3 of Pt 1.2 (headed "Interpretation") is to be taken into account.
3. The Crown notes that within Division 3 of Pt 1.2 (which is concerned with "Carrying on business"), s 20 provides that a reference in the Act to "a person carrying on a business, or a business of a particular kind, is a reference to the person carrying on a business, or a business of that kind, whether alone or together with any other person or persons".
4. The Crown thus submits that s 911B (which defines the "principal" as being a "person" who carries on a financial services business) incorporates s 20 (which provides that the expression "person" includes the person carrying on the business with any other person or persons). The Crown argues that it follows that, while there is only one "principal" for the purposes of s 911B, "the principal" can be one or more persons.
5. On that basis, the Crown says that the applicant's further submissions (relying on the conditions in s 911B(a)-(c) and (e) respectively) fall away because either the person carrying on the business and constituting the principal (if a single person) or one of the people carrying on the business with another or others (and constituting the principal) needs to satisfy the criteria identified by the applicant as only being capable of being fulfilled by an individual.

Reply Submissions

1. In reply submissions, the applicant contends that s 20 does not have the effect contended for by the Crown. The applicant submits that s 20 of the Corporations Act is a definitional provision that explains references to "a person carrying on a business". The applicant says that, at its highest, it might permit a construction of s 911B that meant that the "principal" carrying on the financial services business could be the "principal" notwithstanding they were not carrying on the business entirely on their own account. However, the applicant says that that does not change the fundamental point that the principal must be a single entity (who is capable of coming within the meaning of "person" as properly understood within Ch 7 of the Corporations Act).
2. The applicant says that s 20 does not suggest that "the principal" in s 911B can refer to multiple people even when they were not partners in a partnership or trustees of a trust. The applicant argues that, at most, it means that a single entity (or partners in a partnership or trustees of a trust) might be the principal, notwithstanding they are not the sole entity carrying on the business.

Determination

1. Addressing the construction arguments raised by the applicant, the fact that the text of s 911B defines the other person (principal) by use of the singular cannot itself manifest a contrary intention for the purposes of s 23 of the Interpretation Act since, relevantly, the application of that section is predicated on the use of the singular.
2. The nub of the applicant's argument is the contention that such a contrary intention is manifested by other provisions in the Corporations Act dealing with partners in a partnership and multiple trustees respectively, namely ss 761F and 761FA. The applicant accepts that those other provisions deal with the mechanism by which practical issues may arise in the context of the licensing regime (for example, where a partnership may be constituted differently from time to time) (7/02/2024; AT 8.30-48).
3. However, the fact that the legislature has addressed issues that might arise in relation to particular groups of people says nothing about whether other groups of associated persons or entities might fall within the definition of "principal". There is nothing, for example, in the fact that ss 761F and 761FA have been enacted to warrant the conclusion that the principal for the purposes of s 911B might not be, say, comprised of one or more individuals and/or companies carrying on together (perhaps in a joint venture falling short of a partnership) a financial services business. In other words, the specific treatment of two kinds of groupings (partnerships and trustees) does not implicitly exclude the possibility of others - it might simply be that the legislature did not think to include such other associations. (Pausing here, the looseness with which terms such as "joint venture" can be used (see, for example, the discussion in Bova v Avati [2009] NSWSC 921 at [268]-[272], where I cited United Dominions Corporations Ltd v Brian Pty Ltd (1985) 157 CLR 1 at [10] (Mason, Brennan and Deane JJ); [1985] HCA 49 and Industrial Equity Limited v Lyons (NSWSC unreported, Cohen J, 15 October 1991)) makes understandable that the legislature might have sought only to address the particular kinds of association - partnership or trust - to which reference is made in the sections to which the applicant has here referred.)
4. The applicant's response to this in oral submissions was to refer to the provisions relating to the making of applications for a financial services licence (ss 913A and 913B), which the applicant argues do not contemplate an application by a person other than a single natural person, body corporate, a partner of a partnership or trustee of a trust (7/02/2024; AT 8.50-9.26); and to s 915B, which deals with the suspension or cancellation of licences about which the applicant makes a similar argument (7/02/2024; AT 10.12-25). In essence, the submission is that s 911B forms part of a codified (closed) licensing regime which does not contemplate the licensing of multiple natural persons who are not partners of a partnership and who are not trustees of a trust (and that this gives rise to the contrary intention for which the applicant contends - i.e., that the singular does not include the plural in the definition in s 911B). Nevertheless, the applicant does not go so far as to contend that s 911B could not apply where there was a person or some group of people not capable of being licensed to carry on a financial services business (see the discussion at 7/02/2024; AT 11.11-12.47).

The failure properly to identify the "principal" in the indictment

1. The second basis on which error under ground 1 is asserted raises a complaint as to the adequacy of the identification in the indictment of the persons relied upon by the Crown. This complaint relates to the fact that in the indictment the "principal" is pleaded as "the proprietors of the BitConnect lending platform".

Applicant's submissions

1. The applicant says that the reference to a "proprietor" or "proprietors" is highly ambiguous. The applicant says that "proprietor" means owner and that, where one refers to the proprietors of a business, this might be a reference to the company through which the business trades (noting that the shareholders of a corporation are strictly speaking the proprietors of the company and are not ordinarily understood to be the proprietors of the business of the corporation), to the sole trader who conducts the business in its own right, or to the partners in the partnership through which the business is conducted. The applicant says that, alternatively, when "proprietor" is used by reference to property (real or personal), it refers exclusively to the owner of that property.
2. The applicant argues that the use of "BitConnect Lending Platform" as the thing by reference to which the identity of the "principal" is ascertained is productive of uncertainty, noting that the BitConnect Lending Platform is not a legal entity or a tangible thing capable of being owned and that, to the extent that it might be said to be a business, its structure is unclear. In this regard the applicant says that the CCS refers to BitConnect interchangeably as both a concept and an entity (as being the actual person who carried on the financial services business), and in some cases compendiously (as constituted by a number of different companies). The applicant points by way of example to statements in the CCS at [60], that the applicant conducted seminars at various locations around Australia promoting "BitConnect and the Lending Platform"; and at [63], the reference to use at the seminars of a PowerPoint presentation that had been supplied to the applicant "by Bitconnect"; at [69], that "neither BitConnect Ltd, BitConnect International PLC (or any entity called BitConnect) … held an AFSL or authorisation to provide financial services in Australia"; and to the financial service carried on "by BitConnect"; and at [70] that "BitConnect was carrying on a financial services business through the operation of the Lending Platform".
3. The applicant also points to the observation by the primary judge in the Quash Decision at [70] that: 70. I am not particularly impressed with the framing of an indictment that refers to the principals for the purpose of the legislation, as "the proprietors of the BitConnect lending platform". That is because, as I pointed out in argument, the BitConnect lending platform is not a legal entity nor a piece of property. As far as I can tell, rather, it is some sort of scheme set up, so as to induce people to invest money for particular purposes. I find it difficult to understanding how one could be a proprietor of such a thing.

Crown's submissions

1. The Crown says that the question whether a statement of charge in an indictment contains sufficient particulars should be approached by having regard to the nature of the offence in question, and the particular facts and circumstances of the case, rather than a verbal formula; and submits that the requirement of reasonable particularity in an indictment does not require that the indictment contain all of the facts or information that an accused person may require for the preparation of a defence and which may be required to be supplied by the prosecutor upon an application for further particulars of the offence.
2. The Crown points to the mandatory disclosure requirements in ss 141-142 of the Criminal Procedure Act 1986 (NSW) (Criminal Procedure Act) in this regard. It is noted that the Crown has served, as part of its Notice of Prosecution Case, the 18 page CCS, which includes an outline of the prosecution case, and sets out the facts, matters and circumstances on which the prosecution case is based (as summarised earlier).
3. The Crown accepts that, for the offence to be committed, there must be a principal with certain characteristics but argues that, in the circumstances of the allegation made in this case, the principal does not need to be identified beyond the particulars that the Crown has already provided (i.e., that each of, or a combination or succession of each or all of, the four legal persons identified by the Crown constitute "the principal" for the purposes of s 911B). The Crown expects that there will be evidence as to the existence of each of those nominated people (and anticipates "extreme guardedness" on the part of the accused, either in respect of the response to the Crown case or in any defence case, as to who was behind the BitConnect Lending Platform, which the Crown says is not publicly known).
4. The Crown argues that the position is analogous to the identity of unnamed conspirators on an indictment as divers others who, although only identified in limited respects, the evidence may establish that they entered into the agreement and committed overt acts in furtherance of the agreement.
5. Further, the Crown says that as there is no change to the nature of the financial services business alleged by the Crown, there is no basis to differentiate between the legal persons who constituted the principal from time to time carrying on the financial services business, and on whose behalf financial product advice was being given.

Reply Submissions

1. In reply submissions the applicant says that the failure to identify the principal in the indictment is not merely a complaint as to inadequate identification or lack of reasonable particularity. The applicant argues that the identification of the principal is essential to determining the elements of the offence and the defences available and that the Crown has failed to aver a principal at all.
2. The applicant says that, even on the Crown case, the BitConnect Lending Platform is not tangible property capable of being owned or a business. The applicant argues that the notion of "proprietors" absent a thing or business to be owned is meaningless. It is noted that the Crown describes it as "a facility through which a person made a financial investment or non-cash payment".
3. The applicant criticises the description given in the Crown's written submissions (at [36]) of the BitConnect Lending Platform as a "facility". Insofar as the Crown is thereby contending that the BitConnect Lending Platform is "intangible property" or "an arrangement", the applicant complains that no explanation has been given as to the legal nature of that property (for example, whether it is copyright, a registered design, a patent, or a contractual right).
4. The applicant says that the fact that the Crown has given particulars as to who it contends ("each of, or a combination or succession of each or all of") are the "principal" does not absolve the Crown of the obligation properly to aver the material fact (i.e., the principal), noting that the material fact averred fundamentally affects (among other things) the matters which the Crown must negative to prove the charge.
5. The applicant also argues that the divers others analogy used by the Crown is apt to mislead. It is said that in an allegation of conspiracy the identity of the other party or parties could never impact upon the matters which the Crown might have to prove or negative; or which the accused might rely upon by way of defence; the only question being whether there was (as a matter of fact) an unlawful agreement, and whether the accused participated in that agreement. The applicant says that an allegation of a contravention of s 911B is far less straightforward.
6. As to the submission by the Crown to the effect that the applicant himself has used such language, the applicant says that the Crown is prosecuting him and that it is obliged to frame an indictment which engages the offence provision relied upon. It is submitted that it would be unusual to relieve the Crown of the obligation to do so, or to permit it to aver an ambiguous or uncertain indictment, because the Crown contended that the applicant himself had used loose language.

Determination

1. An accused is entitled to be apprised of not only the legal nature of the offence, but the particular act, matter or thing alleged to be the foundation of the charge (Johnson v Miller (1937) 49 CLR 467 (Johnson v Miller) at 489 per Dixon J (as his Honour then was); [1937] HCA 77). In particular, fair information and reasonable particularity as to the nature of the offence charged must be given to a defendant (Hannes v Director of Public Prosecutions (Cth) (No 2) [2006] NSWCCA 373 at [392] per Barr and Hall JJ; citing Johnson at 501 per McTiernan J, citing Smith v Moody (1093) 1 KB 56). Mason CJ, Deane and Dawson JJ in John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508 (John v AG) at 519; [1987] HCA 42 observed that the underlying rationale for informing the court of the identity of the offence and providing the defendant with the charge that he or she is expected to meet was thus: "an accused person could not be required to defend the charge if the information did not supply the particulars necessary to enable him to prepare his defence", there citing obiter dicta in Ex parte Lovell; re Buckley (1938) 38 SR (NSW) 153 at 166.
2. In essence, the applicant's complaint is that the Crown has not specified those four particularised persons or entities in the indictment. However, the applicant accepts that he now has the particulars of those alleged "principals" (7/02/2024; AT 21.18-20).
3. As to the complaint about the uncertainty of referring in the indictment to the "proprietors" of the BitConnect Lending Platform, again the applicant accepts that he now has particulars with respect to that (7/02/2024; AT 21.23-24). In circumstances where the Crown case has been made very clear in the CCS (and in the submissions in this Court), namely that "BitConnect" is an online cryptocurrency facility operated through a particular website "platform", it is tolerably clear that the reference to the "proprietors" is to those individuals or entities that have (or assert) the rights to operate and promote that facility and lending platform. The expression "proprietors" might be infelicitous in terms of a description of persons able to exercise intellectual property rights, for example, but the applicant cannot seriously complain that he does not know the case being put against him.
4. If it is apparent that an accused could prepare his or her defence properly, despite the omission of particulars in the indictment, then it cannot be that an omission of particulars from the indictment is one that would go to the root of the proceedings, leading to a miscarriage of justice (see R v Hamzy (1994) 74 A Crim R 341 at 344 per Hunt CJ at CL).

The failure to allege all necessary conditions to make out an offence

Applicant's submissions

1. As to the third basis on which it is said that his Honour erred as asserted by ground 1, the applicant's contention is that Count 2 of the indictment is deficient in that it avers that "the conditions in subsection 911B(1)(a)-(d)", omitting reference to s 911B(1)(e). The applicant submits that it is incumbent upon the Crown to aver, and prove, that s 911B(1)(e) was not satisfied in order to prove the offence; and that in failing to include reference to this last paragraph (e), Count 2 fails to allege any offence known to the law.
2. The applicant says that the failure to allege an offence (by averring all necessary elements of it) is a matter of substance which s 16 of the Criminal Procedure Act does not save. It is noted that the indictment itself must contain the statements of fact necessary to consider whether an offence is established; and that the failure to aver an element of an offence ordinarily leads to a demurrer succeeding. The applicant says that, while it has been recognised that s 16(2) of the Criminal Procedure Act could have a role to play in correcting such indictments (referring to Rockdale Beef Pty Ltd v Industrial Relations Commission of NSW [2007] NSWCA 128 (Rockdale Beef) at [115]-[123] (Basten JA, with whom Mason P agreed)), it remains the case that an indictment that discloses no offence cannot be so remedied (citing Doja at [3]-[4]).
3. The applicant argues that the condition in s 911B(1)(e) cannot be treated as a purely formal matter; noting that the pleading of an allegation in an indictment requires the Crown Prosecutor to be satisfied that there is a proper basis for that allegation to be made; and that s 911B(1)(e) requires a consideration of the position of the principal on whose behalf the accused person is said to have acted. The applicant says that even (which he contends it does not) if the indictment did clearly allege who the "principal" was, averring that the condition in s 911B(1)(e) did not apply requires the Crown to negative each of the matters set out in s 911A(2) (of which there are approximately 19).
4. Reference is made to the observation by his Honour at [80] of the Quash Decision to the effect that the issue there being considered (as to the indictment not specifying not all of the five conditions in s 911B(1)(a)-(d) of the Corporations Act) had not been raised in the applicant's submissions. The applicant says that this issue did form part of his submissions before his Honour (referring to [23]-[24] of the Accused's Submissions dated 4 July 2023 and to the transcript at 1/08/2023; T 100.32-102.50). Pausing here, the more pertinent transcript reference would seem to be T 102.41-102.50. In any event, the applicant maintains that his Honour's resolution of this issue was erroneous on the following two bases.

Crown's submissions

1. The Crown maintains that Count 2 does allege an offence known to the law; and that it is not incumbent upon the Crown to aver that s 911B(1)(e) was not satisfied in order to prove the offence.
2. The Crown points out that Count 2 on the indictment relevantly alleges that the applicant provided a financial service in this jurisdiction on behalf of another person (the principal) who carried on a financial services business, in contravention of s 911B of the Corporations Act. It is noted that s 911B(1) essentially prohibits the applicant from so doing unless at least one of the conditions in paragraphs (a) to (e) applies. The Crown says that the applicant's submission overlooks the language of paragraph (e), which the Crown argues makes it plain that its engagement is conditioned on the existence of a factual circumstance (namely, that the principal provided the service).
3. The Crown says that, as Count 2 pleads that the applicant provided a financial service, the condition precedent to paragraph (e) will not be satisfied (i.e., that the principal rather than the provider provided the service), in which case it could not be operable and could not be an essential element of the offence required to be pleaded.
4. It is noted that, by the further particulars provided to the applicant on 15 September 2023, the Crown particularised 32 instances of the applicant providing a financial service on behalf of another person. The Crown says that it is no part of the Crown's case that the principal (rather than the applicant) provided the financial services alleged to contravene s 911B.
5. The Crown says that his Honour's conclusion that the Crown proposed to amend the indictment was not correct; but that there has been no error demonstrated in his Honour's determination as to Count 2.

Reply Submissions

1. In reply submissions as to the contended failure to allege all necessary conditions to make out an offence, the applicant argues that the Crown's position is circular and inconsistent with the text of the provision.
2. The applicant notes that the offence created by s 911B(1) is engaged only where a person (the provider) provides a financial service on behalf of another (the principal) who is carrying on a financial services business and where one of paragraphs (1)(a)-(e) does not apply. The applicant argues that, in circumstances where s 911B(1)(e) operates as an exception to criminal liability only where a person other than the principal provides the service, the Crown's construction of s 911B(1)(e) would never give that provision work to do.
3. The applicant submits that the correct construction is that s 911B(1)(e) is engaged upon the adoption of the counterfactual scenario; and that this involves an enquiry into whether the provision of the financial service would have been permitted without a licence due to a statutory exemption in s 911A(2). The applicant maintains his contention that the indictment is bad and should have been quashed.

Determination

1. The nub of this complaint is as to whether the Crown is obliged in its indictment to make reference to the fifth of the exculpatory conditions in s 911B, i.e., that (e) is a possibility that the Crown must exclude (beyond reasonable doubt). The applicant accepts that if the Crown moved to amend the indictment to include reference to paragraph (e) as a condition that was not satisfied, then there would be no complaint as to the terms of the indictment. The Crown submits that it is not incumbent on it to make such an amendment in circumstances where, on the facts alleged, (e) is not applicable (since it is not alleged that the applicant was the principal).
2. The Crown made clear in oral submissions in this Court that it does not object to amending the indictment in this regard, but that its position communicated to the applicant in writing was that it intended to await the conclusion of the pre-trial arguments. The Crown argues that s 911B (1)(a)-(d) deal with conditions that involve matters relating to the provider (which if not satisfied mean that the provider of the service is in breach of the provision) but that sub-s (e) applies only to the principal. Thus, the Crown argues that the Crown does not need to exclude the matter in (e) because, in the present case, it is not alleged that the principal provided the service and therefore it is not a way by which the prohibition applicable to the conduct of the provider could be avoided (7/02/2024; AT 31.38-43).
3. At the outset, when considering this complaint, it is important to recognise (as the applicant's submissions have emphasised) the functions performed by an indictment in the administration of criminal justice. Those were identified by Spigelman CJ in R v Janceski (2005) 64 NSWLR 10; [2005] NSWCCA 281 (Janceski) at [52]-[53] as the following: (i) informing the court of the precise identity of the offence with which it is required to deal; (ii) providing the accused with the substance of the charge which he or she is called upon to meet, including identification of the essential factual ingredients; (iii) enabling the court to ensure that only relevant evidence is admitted and to properly instruct the jury on the relevant law; (iv) determining the availability of a plea of autrefois acquit and autrefois convict; and (v) vesting the trial court with jurisdiction to hear and determine the prosecution. It is trite to note that, in order to be valid, an indictment must disclose an offence punishable by law (see Doja at [3] per Spigelman CJ; R v Mai (1991) 26 NSWLR 371 at 377 per Hunt CJ at CL; Broome v Chenoweth (1946) 73 CLR 583 (Broome v Chenoweth) at 594-595; 600-601; [1946] HCA 53; Johnson v Miller at 486 per Dixon J).

Grounds 3 and 4 - alleged error in failing to permanently stay Count 2 of the indictment

1. The applicant sought to stay Count 2 on the ground that the case the Crown proposed to run was oppressive such that it constituted an abuse of process.
2. Ground 3 contends that his Honour erred in failing to stay Count 2 of the indictment as an abuse of process on account of the Crown advancing a case relying upon multiple potential "principals" in proof of a single count of contravening ss 911B(1) and 1311(1) of the Corporations Act.
3. Ground 4 contends that his Honour erred in failing to stay this Count as an abuse of process on the basis of the Crown advancing a case relying upon 32 instances of alleged provision of financial advice, with 24 potential principals in proof of a single count of contravening ss 911B(1) and 1311(1) of the Corporations Act. It is convenient to deal with the two stay grounds together.

Applicant's submissions

1. The context in which the stay application was argued included the statement at the end of the letter of particulars dated 15 September 2023 (see as set out above). The applicant says that this represented a not-inconsiderable widening of the Crown case (especially when regard is had to the fact that the Crown was now openly relying upon 32 separate allegations of providing financial advice in proof of a single count). The applicant relies for the proposition that Count 2 constitutes an abuse of process on the large number of alternative Crown cases raised by this single count (noting that his Honour accepted that it constituted a "startling" number (at [97] of the Quash Decision)).
2. The applicant submits that there is real forensic prejudice to him having to meet so many different permutations of the Crown case; and argues that this creates the substantial risk that the jury will be overwhelmed and reason that the applicant must be guilty on at least one of the identified bases.
3. The applicant submits that the principled approach is for the Crown to elect as to the principal it relies upon in proof of Count 2 of the indictment. Further, the applicant says that, given that a principal forms part of the elements of the offence, and that all of the instances of alleged provision of financial advice are being run as a course of conduct under a single account, the Crown should not be permitted to contend (as it has foreshadowed) that the applicant was acting at different times on behalf of different principals.

Crown's submissions

1. The Crown cavils with the proposition that there has been a considerable widening of its case but says that in any event the applicant misconceives the Crown's case on Count 2, which the Crown says is a one count enterprise case.
2. The Crown notes that the gist of the offence under s 911B(1) is the providing of a financial service (on behalf of another person). It is submitted that providing a financial service is an example of a matter that can properly be pleaded as a course of conduct or the same criminal enterprise, or one activity. The Crown accepts that it may have been open to the Crown to allege 32 contraventions of s 911B on account of the provision of financial advice by the applicant but says that this is not the Crown's case.
3. The Crown relies on providing financial product advice as the means by which a financial service was provided in this matter, noting that the provision of financial product advice (see s 766B) involves making a recommendation or a statement of opinion, or a report of either of those things.
4. The Crown says that it relies on a number of discrete acts of a similar nature committed with a common purpose, and which are connected in the sense of being performed in an ongoing course of similar consistent conduct; and that they form part of the same course of conduct or criminal enterprise.
5. The Crown reiterates that its case is that between the dates alleged, the applicant engaged in a course of conduct of providing a financial service (on behalf of another person). The Crown identifies 32 instances of providing financial product advice in proof of the course of conduct of providing a financial service (on behalf of another person). The Crown says that it does not have to establish, and a jury will not have to be satisfied of, the existence of each of the 32 instances of the provision of financial product advice. Rather, that the Crown must establish, and the jury will have to be satisfied, that sufficient of the 32 identified instances of the provision of financial product advice amount to or constitute the criminal enterprise or course of conduct of providing a financial service (on behalf of another person) between the dates alleged.
6. The Crown maintains that there is no forensic prejudice to the applicant by the Crown putting forward 32 instances of providing financial product advice because it does not involve different permutations of the Crown case. The Crown submits that these are circumstantial facts led in proof of a course of conduct by the applicant of providing a financial service on behalf of another person. The Crown says that similar considerations apply to the applicant's contention that there is oppression in the Crown identifying the principal as being one or more of four persons.

Determination

1. The oppressive nature of Count 2, as explained in oral submissions, is that the applicant says he does not know how many instances a jury would be expected to find (out of the 32 particularised instances) before a course of conduct is proved (7/02/2024; AT 24.37-40); and that there are 24 different permutations of principal in respect of each instance. Complaint is made as to the submission by the Crown that these are circumstantial facts of a course of conduct (and the suggestion that it is not necessary that the Crown prove each of the 32 instances beyond reasonable doubt) (7/02/2024; AT 24.40-45).
2. In oral submissions, the Crown says that a practical approach should be taken as to the particularisation of the instances the subject of the complaint (7/02/2024; AT 36.15-16). The Crown says that this will be a matter for direction to the jury, namely that the factual findings would need to be sufficient to support a finding that there was a course of conduct i.e., that the applicant, as provider on behalf of another person, was providing a financial service (7/02/2024; AT 36.33-34.3). The Crown submits that the question at trial will turn on what was done on behalf of whoever was the operator of the BitConnect Lending Platform; and that this will not turn on the questions of permutations and combinations of the instances and principals particularised (7/02/2024; AT 37.26-32).
3. The Crown case, as noted earlier, is that the offending is constituted by a course of conduct. On that interpretation of s 911B(1), it cannot be an abuse of process (nor is it otherwise oppressive) for the Crown to particularise a number of instances (not all of which might ultimately be proven beyond reasonable doubt) relied upon for the allegation that there was a course of conduct amounting to the provision of a financial service (in this case, in the form of the provision of financial product advice) on behalf of another person carrying on a financial services business without an AFSL.
4. It is clear that the primary judge had considered the complaints as to the duplicity of Count 2 and the oppression by reason of that count in relation to the Quash Decision. His Honour had regard to the arithmetical consequence of the particulars that were provided after the Quash Decision. No error has been shown in the conclusion that the count as particularised was not oppressive. In those circumstances, it has not been shown that Count 2 was an abuse of process. Grounds 3 and 4 are not made good.

Conclusion

1. For the above reasons, leave to appeal should be granted and the appeal dismissed.
2. LONERGAN J: I agree with Ward P.
3. SWEENEY J: I agree with Ward P.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 July 2024