[2008] FCA 980
Blue Metal Industries Ltd v Dilley (1969) 117 CLR 651
Boujaoude v R (2008) 72 NSWLR 85
[2008] NSWCCA 35
Bova v Avati [2009] NSWSC 921
Broome v Chenoweth (1946) 73 CLR 583
[2013] NSWCA 250
Doja v R [2009] NSWCCA 303
DSJ v R
NS v R [2014] NSWCCA 77
Environment Protection Agency v Truegain Pty Ltd (2013) 85 NSWLR 125
Source
Original judgment source is linked above.
Catchwords
[2008] FCA 980
Blue Metal Industries Ltd v Dilley (1969) 117 CLR 651
Boujaoude v R (2008) 72 NSWLR 85[2008] NSWCCA 35
Bova v Avati [2009] NSWSC 921
Broome v Chenoweth (1946) 73 CLR 583[2013] NSWCA 250
Doja v R [2009] NSWCCA 303
DSJ v RNS v R [2014] NSWCCA 77
Environment Protection Agency v Truegain Pty Ltd (2013) 85 NSWLR 125[2013] NSWCCA 204
Ex parte Lovell[2014] NSWCA 266
House v The King (1936) 55 CLR 499[1987] HCA 42
Johnson v Miller (1937) 49 CLR 467[1937] HCA 77
Lam v R [2024] NSWCCA 6
Laugher v Pointer (1826) 5 B & C 547[1986] HCA 34
Pearson v Minister for Home Affairs (2022) 295 FCR 177[1989] HCA 66
Smith v Moody (1093) 1 KB 56
The King v Boston (1923) 33 CLR 386[1923] HCA 59
Tonari v R [2013] NSWCCA 232
United Dominions Corporations Ltd v Brian Pty Ltd (1985) 157 CLR 1[1985] HCA 49
Various Claimants v Catholic Child Welfare Society [2012] UKSC 56[2012] 3 WLR 319
Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151[2006] QB 510
Warren v Coombes (1979) 142 CLR 531
[1979] HCA 9
Woodland v Swimming Teachers Association [2013] UKSC 66
Judgment (27 paragraphs)
[1]
Background
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.
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).
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]).
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]).
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]).
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).
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]).
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.
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.
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".
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]).
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]).
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]).
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.
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]).
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]).
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.
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)).
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.
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.
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.
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.
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.
[2]
Leave
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.
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.
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).
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.
[3]
Standard of appellate review
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).
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.
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).
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)).
[4]
Quash Decision
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]).
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]).
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]).
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]).
[5]
Stay Decision
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]).
[6]
Ground 1 - alleged error in failing to quash Count 2
[7]
Applicant's submissions
The applicant submits that his Honour erred in failing to quash Count 2 on three bases.
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).
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.
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.
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.
[8]
Applicant's submissions
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".
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)".
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.
First, that the text of s 911B defines the other person using the definite article ("the principal").
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.
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).
[9]
Crown's submissions
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.
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.
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".
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.
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.
[10]
Reply Submissions
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).
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.
[11]
Determination
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.
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).
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.)
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).
[12]
The failure properly to identify the "principal" in the indictment
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".
[13]
Applicant's submissions
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.
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".
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.
[14]
Crown's submissions
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.
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).
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).
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.
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.
[15]
Reply Submissions
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.
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".
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).
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.
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.
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.
[16]
Determination
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.
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).
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.
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).
[17]
The failure to allege all necessary conditions to make out an offence
[18]
Applicant's submissions
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.
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]).
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).
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.
[19]
Crown's submissions
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.
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).
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.
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.
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.
[20]
Reply Submissions
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.
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.
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.
[21]
Determination
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).
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).
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).
[22]
Grounds 3 and 4 - alleged error in failing to permanently stay Count 2 of the indictment
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.
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.
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.
[23]
Applicant's submissions
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)).
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.
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.
[24]
Crown's submissions
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.
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.
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.
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.
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.
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.
[25]
Determination
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).
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).
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.
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.
[26]
Conclusion
For the above reasons, leave to appeal should be granted and the appeal dismissed.
LONERGAN J: I agree with Ward P.
SWEENEY J: I agree with Ward P.
[27]
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
House v The King (1936) 55 CLR 499; [1936] HCA 40
Industrial Equity Limited v Lyons (NSWSC unreported, Cohen J, 15 October 1991)
John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508 at 519; [1987] HCA 42
Johnson v Miller (1937) 49 CLR 467; [1937] HCA 77
Lam v R [2024] NSWCCA 6
Laugher v Pointer (1826) 5 B & C 547; 108 ER 204
Lodhi v R [2006] NSWCCA 121
Morgan Kittochside Nominees Pty Ltd (2002) 117 IR 152
Oceanic Crest Shipping Company v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626; [1986] HCA 34
Pearson v Minister for Home Affairs (2022) 295 FCR 177; [2022] FCAFC 203
Pitcher v Langford (1991) 23 NSWLR 142
R v Aniba (1995) 83 A Crim R 224
R v Bigatton (No 3) [2023] NSWDC 290
R v Bigatton (No 4) [2023] NSWDC 458
R v Einfeld (No 2) (2008) 71 NSWLR 31; [2008] NSWCCA 215
R v Glynn (1994) 33 NSWLR 139
R v Hamzy (1994) 74 A Crim R 341
R v Isaac (1996) 87 A Crim R 513
R v Janceski (2005) 64 NSWLR 10; [2005] NSWCCA 281
R v Jasper [2003] NSWSC 285
R v Mai (1991) 26 NSWLR 371
R v MAJW [2007] NSWCCA 145
R v Matovski (1989) 15 NSWLR 720
R v McVitie [1960] 2 QB 483
R v Pople [1951] 1 KB 53
Re Will of F B Gilbert (deceased) (1946) 46 SR (NSW) 318
Rockdale Beef Pty Ltd v Industrial Relations Commission of NSW [2007] NSWCA 128
S v The Queen (1989) 168 CLR 266; [1989] HCA 66
Smith v Moody (1093) 1 KB 56
The King v Boston (1923) 33 CLR 386; [1923] HCA 59
Tonari v R [2013] NSWCCA 232
United Dominions Corporations Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49
Various Claimants v Catholic Child Welfare Society [2012] UKSC 56; [2012] 3 WLR 319
Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151; [2006] QB 510
Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9
Woodland v Swimming Teachers Association [2013] UKSC 66; [2014] AC 537
Texts Cited: House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Parliament of Australia, Making it Work (August 2005)
Macken's Law of Employment, 3 - Labour Hire at (online at 14 February 2024)
Category: Principal judgment
Parties: John Louis Anthony Bigatton (Applicant)
Rex (Respondent)
Representation: Counsel:
C Parkin (Applicant)
A Williams and M Clifford-O'Sullivan (Respondent)
Solicitors:
Kings Law Group (Applicant)
Commonwealth Director of Public Prosecutions (Respondent)
File Number(s): 2020/293887
Publication restriction: Publication restricted pending trial of applicant
Decision under appeal Court or tribunal: District Court of New South Wales
Jurisdiction: Criminal
Citation: [2023] NSWDC 290; [2023] NSWDC 458
Date of Decision: 4 August 2023; 27 October 2023
Before: Newlinds SC DCJ
File Number(s): 2020/293887
As to the first ground
(1) The fact that the text of s 911B defines the principal by use of the singular cannot itself manifest a contrary intention for the purposes of s 23 of the Acts Interpretation Act 1901 (Cth). There is nothing, for example, in the fact that ss 761F and 761FA of the Act have been enacted to warrant the conclusion that the principal for the purposes of s 911B might not be 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: [86], [88] (Ward P); [185] (Lonergan J); [186] (Sweeney J).
(2) It is not necessary to reach a concluded view on the doctrine of joint employment in this matter, and it is preferable not to do so in the absence of considered argument, because it is by no means apparent that the offence provision could not operate by reference to the particular principal who is found to be the employer (if there is a number of putative employers): [98] (Ward P); [185] (Lonergan J); [186] (Sweeney J).
FP Group Pty Ltd v Tooheys Pty Ltd (2013) 238 IR 239; [2013] FWCFC 9605; Pitcher v Langford (1991) 23 NSWLR 142; Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803; Coghill v Indochine Resources Pty Ltd [2015] FCA 377; Morgan Kittochside Nominees Pty Ltd (2002) 117 IR 152, considered.
Day v Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335; [2013] NSWCA 250; Oceanic Crest Shipping Company v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626; [1986] HCA 34; Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151; [2006] QB 510; Various Claimants v Catholic Child Welfare Society [2012] UKSC 56; [2012] 3 WLR 319, discussed.
(3) The postulated inconvenience of the "multiple principals" construction is not such as to warrant a departure from the construction of the statute as allowing for multiple persons as principals. Inconvenience as to the consequences of structuring the entity or entities carrying on a financial services business for the purposes of s 911B does not mandate a construction of the section that excludes multiple persons: [99] (Ward P); [185] (Lonergan J); [186] (Sweeney J).
(4) That ss 761F and 761FA were not raised in relation to the "multiple acts argument" does not mean that his Honour erred in considering that the reliance on them for the "principal" argument should be rejected for similar reasons as had been set out in relation to the "multiple acts argument". To parse the primary judge's reasons as if they were a statute is not appropriate. It is clear that his Honour did not accept that a contrary intention (i.e. a singular word did not include the plural) could be discerned from the legislation as a whole: [101]-[102] (Ward P); [185] (Lonergan J); [186] (Sweeney J).
Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266; Woodland v Swimming Teachers Association [2013] UKSC 66; [2014] AC 537, applied.
(5) 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. In particular, fair information and reasonable particularity as to the nature of the offence charged must be given to an accused such that he or she could prepare his or her defence. There was no error in his Honour's determination that it was sufficiently clear from the particulars who the Crown contends the "principal" to be for the purposes of Count 2: [128]-[132] (Ward P); [185] (Lonergan J); [186] (Sweeney J).
John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508 at 520; [1987] HCA 42; Johnson v Miller (1937) 59 CLR 467 at 486; [1937] HCA 77; Hannes v Director of Public Prosecutions (Cth) (No 2) [2006] NSWCCA 373; Smith v Moody (1093) 1 KB 56, applied.
(6) The omission from the indictment reference to s 911(1)(e) does not result in there being no indictable offence. The present case is clearly one which does not lie on the extreme end of the spectrum as to validity; the indictment is not "one which disclosed no offence known to the law, for example, where it was laid under a statute which had been repealed and not re-enacted", nor is it one with raises issues as to duplicity in offences under the same offence: [159] (Ward P); [185] (Lonergan J); [186] (Sweeney J).
R v McVitie [1960] 2 QB 483; Doja v R [2009] NSWCCA 303, applied.
(7) The indictment is incomplete in its present form. However, there was power for the indictment to be amended (as the applicant's submissions in effect appear to acknowledge) and his Honour simply proceeded on the mistaken understanding that the Crown proposed to make an application for the indictment to be so amended. On that basis, there was no error in his Honour permitting the Crown an opportunity to do so (and not moving immediately to quash the indictment or permanently stay the proceedings on Count 2). The appropriate course would be for the Crown to amend the indictment. Whether the Crown chooses to proceed on an incomplete indictment is ultimately a matter for it. It is inappropriate here to speculate on what might flow therefrom: [164]-[167] (Ward P); [185] (Lonergan J); [186] (Sweeney J).
Lam v R [2024] NSWCCA 6; Tonari v R [2013] NSWCCA 232; R v MAJW [2007] NSWCCA 145; R v Pople [1951] 1 KB 53, discussed.
The Crown points out that the Victorian Court of Appeal decision relied on by the applicant involved the statutory provision in Part 2 of the Commonwealth Criminal Code at 11.5(6), which permits the stay or dismissal of conspiracy charges on various grounds, the Crown noting that it is considered to be a beneficial provision to stop unfair conspiracy charges being presented and maintained (7/02/2024; AT 34.29-35). The Crown also points out that the Court there observed that the distinction between a discretionary decision and one that is evaluative can be difficult to draw and that, historically, it had been thought that the House v The King standard applied in relation to stays (7/02/24; AT 34.39-44).
In oral submissions, the applicant identified the following errors (if, contrary to his submissions the House v The King standard of review is found to apply). First, in relation to the Quash Decision, that his Honour acted on a wrong principle: in relation to ground 1(a), this being the misconstruction of the relevant statutory provision (7/02/2024; AT 3.40-42); in relation to ground 1(b), this being that his Honour considered that a proper identification of a material factual particular was not required (at [71] of his Honour's reasons) (7/02/2024; AT 3/42-44); and, in relation to ground 1(c), that being that his Honour considered that he had a discretion not to quash the indictment, having formed the view that the indictment did not disclose or did not adequately aver the elements of the offence or, alternatively, mistook the facts in that he considered that the Crown intended to amend the indictment and on that basis did not quash the indictment (7/02/24; AT 4.50-5.2). Second, in relation to the Stay Decision, that there was a misapplication of principle in the sense of his Honour's understanding of whether or not there had been an abuse of process (or alternatively a mistake as to the facts, although it was accepted by the applicant that this would be a difficult argument to make) (7/02/24; T 5.48-6.3).
Ultimately, nothing turns on the standard of appellate review in the present case at least in relation to the Quash Decision, given the nature of the error which the applicant here asserts. However, had it been necessary I would have concluded that the correctness standard applied to both decisions: the Quash Decision because the question as to the proper construction of the relevant provision is not a discretionary question, nor is the question whether the indictment was bad in law; the Stay Decision on the basis that GLJ compels the conclusion that the question whether the count is an abuse of process is a matter of law and the correctness standard applies to that question (although the question of relief would be a question involving the exercise of discretion).
Addressing the arguments raised by the applicant as to the inconvenience or undesirability of construing the relevant provision otherwise than as engaging only with singular pieces of conduct, his Honour did not consider that the consequences identified by the applicant were so absurd as to compel a departure from the construction that he had reached and concluded that there was nothing in the statute that demanded the strict and singular reading of s 766B that was necessary for the applicant's submission to be accepted (at [64]).
Applying then the common sense fairness and practical approaches, his Honour considered that there was nothing unfair in the indictment because, in a practical sense, the vice in the indictment identified by the applicant could be easily cured by inserting into the indictment the particulars that had already been provided by the Crown; and hence the indictment fulfilled the function of allowing the applicant to understand the case put against him so as to have a proper opportunity to answer it (at [65]). Accepting that there was a temporal and geographic gap between the statements relied on by the Crown, his Honour nevertheless considered that there was an identifiable series of discrete acts of a similar nature which are connected and could sensibly be described as part of a single course of conduct (at [66]).
At [67]-[71], his Honour addressed the applicant's submission that it was not open as a matter of law to identify more than one person who is the principal for the purpose of s 911B(1) because of the phrase "on behalf of another person", describing this as reliant on the same or a similar grammatical argument (to that which had been discussed in the context of the use of the singular in s 766B). His Honour, for similar reasons to those in response to the applicant's previous argument, rejected that submission (at [68]).
His Honour considered that the only sensible reading of the legislation was that the "other person" who is identified as the principal could be one person, or more than one person working together in concert in some way or perhaps a combination of both; and did not think there was anything unfair about the way the Crown was presenting the case (at [69]).
His Honour did express some disapproval as to the framing of an indictment referring to the principals as "the proprietors of the BitConnect lending platform" (at [70]). His Honour said that the lending platform is not a legal entity or piece of property (rather, some sort of scheme set up to induce people to invest money for particular purposes) and he expressed difficulty understanding how one could be a proprietor of such a thing. However, his Honour noted that particulars had been provided of the four people the Crown identified as the actual principals and he considered the descriptor that they are the proprietors of the BitConnect Lending Platform to be no more than a description, which did not mean that Count 2 of the indictment did not disclose a breach of the law (at [71]). Taking a practical approach and assessing what was fair and reasonable, his Honour said that his conclusion as to the better construction of the statute was reinforced and that he was not satisfied that the identified flaw in the indictment had been made out (at [71]).
His Honour also noted a submission that had been abandoned by the applicant to the effect that each statement, recommendation or report the subject of the charge needed to be the subject of its own separate count (at [72]-[73]).
His Honour then addressed, as adverted to above, the alternative relief sought as to particulars (at [75]-[79]) and what he understood to be a proposed amendment to the indictment (at [80]-[81]).
Fourth, the applicant argues that the conditions in ss 911B(1)(a)-(c) contemplate that "the principal" be a person who is capable of employing people; and says that, other than in the case of partnership, a person cannot be employed by multiple people in respect of the same employment (citing FP Group Pty Ltd v Tooheys Pty Ltd (2013) 238 IR 239; [2013] FWCFC 9605 (FP Group) at [40]-[45] (Hatcher and Catanzariti VPP, Riordan C)).
Fifth, the applicant argues that there would be absurd results if the "principal" could be multiple people (other than a partnership), noting that the conditions in ss 911B(1)(a)-(e) refer to "the principal" holding an AFSL and the accused being an employee/director/authorised representative/employee of an authorised representative of "the principal".
As to this last submission, the applicant argues, by way of example, that if "principal" could be multiple people then, notwithstanding that the same financial services business was being carried on by the group of people: for the conditions in ss 911B(1)(a)(i), (b)(i), or (c)(i) to be satisfied, every person would need to hold an AFSL; for the condition in s 911B(1)(a)(ii) to be satisfied, the accused would need to be an employee of every person; for the condition in s 911B(1)(b)(ii) to be satisfied, the accused would need to be an authorised representative of every person; for the condition in s 911B(1)(b)(iii) to be satisfied, the accused would need to be an employee of an authorised representative of every person; and for the condition in s 911B(1)(e) to be satisfied, every person on behalf of whom the accused is said to act would need to be a person who "would not need an Australian financial services licence" if they (rather than the accused) provided the relevant financial service, because the provision of the service would be exempt under one of the many exemptions in s 911A(2).
The applicant notes that his Honour described this submission as being "the same or a similar grammatical argument" to that which had been considered and rejected (in relation to s 766B); and said that for similar reasons to the previous argument he rejected the submission (Quash Decision [67]-[68]).
The applicant cavils with the proposition that the arguments were the same or similar; noting that his Honour (at [61]-[63]) was dealing with the different argument that each instance of the provision of financial advice was a separate offence and that Count 2 was accordingly duplicitous (which the applicant describes as the multiple acts argument). The applicant says that he did not raise ss 761F and 761FA in support of the multiple acts argument; rather, he raised those provisions in support of his argument about the proper construction of "principal". The applicant complains that the multiple acts argument involved consideration of different definitional provisions; and says that the relevance of ss 761F and 761FA to the multiple acts argument is not apparent.
In any event, the applicant complains that his Honour did not give reasons for rejecting the applicant's central contention (that the presumption created by s 23 of the Interpretation Act had been displaced with respect to the meaning of "person" and, by implication, "principal", in s 911B(1)) other than to state (having noted that he considered the submission to have "merit" - at [63]) that the "only sensible reading" of the legislation was that the principal could be multiple people (at [69]). The applicant says that it is not apparent from his reasons why his Honour considered that to be so.
The applicant maintains that his Honour erred in determining that the "other person" (or "principal") in s 911B(1) could refer to multiple people even where they were not partners in a partnership or trustees of a trust.
If the applicant's construction be accepted, then the applicant argues that there are two consequences that flow from the fact that the indictment avers multiple principals: first, that there is impermissible duplicity in the indictment; and, second, that the indictment avers a charge not known to the law.
As to the first, it is said that the averment that the applicant provided a financial service on behalf of multiple people constitutes an allegation that he committed multiple contraventions of s 911B (i.e., one contravention for each person on whose behalf he acted). The applicant invokes the general principle that no count of an indictment should charge more than one offence (citing Environment Protection Agency v Truegain Pty Ltd (2013) 85 NSWLR 125; [2013] NSWCCA 204 at [31]-[33] (Leeming JA, with whom RA Hulme and Button JJ agreed)).
The applicant submits that, where the statute criminalises the provision of a financial service on behalf of a single person (or partners in a partnership/trustees of a trust), then an allegation which identifies multiple people is an allegation of multiple offences. It is said that the physical element of the offence is not the provision of the financial service per se but doing so on behalf of another; and that where multiple "others" are averred, multiple offences are in fact charged.
As to the second perceived consequence in terms of the indictment, the applicant says that an allegation that the accused acted on behalf of multiple people, when the elements of the offence require that he have acted on behalf of one person, is insufficient properly to plead the elements of the offence; and hence the count fails to disclose an offence known to the law. In other words it is said that if the offence requires the identification of a single natural or legal person, partners in a partnership or trustees in a trust, then the identification of multiple "principals" (even if not duplicitous) constitutes a failure to plead an offence contrary to ss 911B(1) and 1311(1) of the Corporations Act.
The suggestion that a s 911B offence could not be committed where the "other person" on whose behalf the relevant services were provided was not capable of applying for a financial services licence is not compelling (and was not ultimately pressed by the applicant (7/02/2024; AT 11.22-28)). It would raise the spectre of the avoidance of the offence provision simply by setting up an association of persons other than those falling within the concept of a partnership or trust. Complications that might arise in the context of licence applications for such associations or groups of persons do not mean that the legislature must have envisaged the offence provision applying only to single natural persons, partners of a partnership or trustees of a trust.
As to the fourth of the matters relied upon by the applicant as manifesting a contrary intention, namely, that the principal must be a person capable of employing people, as noted above the applicant has relied on the Fair Work Commission Full Bench decision in FP Group at [40]-[45] as authority for the proposition that "other than in the case of a partnership, a person cannot be employed by multiple people in respect of the same employment". This submission seems to allude to the doctrine of "joint employment", where an employee may be employed by two different entities with respect to the same job and both entities have responsibilities to the employee. As noted by the Full Bench in FP Group, it is a doctrine that has not been recognised in Australian jurisprudence (at [41]). Rather, the conventional approach by Australian courts (where there are a number of putative employers) is to attempt to identify which one of the putative employers is the actual employer of the employee by applying principles developed for determining whether there is an employment relationship (see Pitcher v Langford (1991) 23 NSWLR 142 (Pitcher v Langford) at 148-149 per Kirby P (as his Honour then was); Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803 (Eastern Colour) at [72]-[75] per Collier J). In FP Group, it was accepted that Australian courts had not expressly rejected the application of the joint employment in Australia; saying that it just has yet to be developed (FP Group at [44]).
The Federal Court has observed that "there is scope in Australian law for a claim that multiple entities can jointly employ a person" and declined to strike out paragraphs in a pleading in which the claim was made (see Eastern Colour at [78] per Collier J; affirmed by Coghill v Indochine Resources Pty Ltd [2015] FCA 377 at [30] per Katzmann J; accepting the remarks made by the Full Bench of the Fair Work Commission in Morgan Kittochside Nominees Pty Ltd (2002) 117 IR 152 at [75] that "[w]ere it necessary to do so, we would incline to the view that no substantial barrier should exist to accepting…joint employment…for certain purposes").
Joint employment has found purchase in the United States (from which the doctrine derives) due to its potential to protect worker entitlements, such as in relation to unpaid entitlements and unfair dismissal cases (see Macken's Law of Employment, 3 - Labour Hire at [3.1100] (online at 14 February 2024); see also House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Parliament of Australia, Making it Work (August 2005) at [4.39]).
In Day v Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335; [2013] NSWCA 250 (Day v Ocean Beach Hotel) at [23]-[33], Leeming JA (with whom Meagher and Emmett JJA agreed) noted (in the context of dual vicarious liability) the proposition made by Littleday J in Laugher v Pointer (1826) 5 B & C 547 at 558; 108 ER 204 (Laugher v Pointer) at 208 that:
He is the servant of one or the other, but not the servant of one and the other; the law does not recognise a several liability in two principals who are unconnected.
and found that the Court was precluded by binding authority from recognising dual vicarious liability where two different persons had control over a tortfeasor.
As emphasised by Leeming JA, the High Court in Oceanic Crest Shipping Company v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626; [1986] HCA 34 (Oceanic Crest) found that where one employer is found vicariously liable, the other putative employer necessarily could not be (noting Gibbs CJ at 641, applying Laugher v Pointer; see also Wilson J at 646). As Gibbs CJ observed in Oceanic Crest (at 641):
Where the services of the servant of one employer are temporarily used by another, both employers will not be liable; prima facie the liability will usually remain with the general employer who may, however, 'show, if he can, that he has for a particular purpose or on a particular occasion temporarily transferred the services of one of his general servants to another party so as to constitute him pro hac vice the servant of that other party with consequent liability for his negligent acts': Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1.
thereby suggesting that, on the question of a putative employer's liability as joint with another putative employer, regardless of the basis of the claim, the preference is to assess which of the putative employers is the actual employer (as is the Australian approach, alluded to above).
Although there is English authority suggesting that both the general and temporary employer could be made liable for an employee's negligence (see Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151; [2006] QB 510 per May LJ at [20]-[28] and Rix LJ at [77]; accepted in Various Claimants v Catholic Child Welfare Society [2012] UKSC 56; [2012] 3 WLR 319), the High Court in Oceanic Crest refused to review the case Fowles v Eastern and Australian Steamship Company Ltd [1916] 2 AC 556 in light of the developments in modern jurisprudence in Australia regarding vicarious liability (see Leeming JA's discussion on this point at [27] of Day v Ocean Beach Hotel).
That said, what is by no means clear is that the recognised exception for partnerships in this context could not equally apply to less formal associations of persons who might together wish to employ someone (such as members of an unincorporated joint venture, for example). That would be consistent with the reference in Laugher v Pointer being to the position of two principals who are "unconnected". On the Crown case, the four identified principals are not unconnected (albeit that they may not be "partners" in the legal sense of the term).
In any event, it is not necessary here to reach a concluded view on this issue (or "rabbit hole" as the applicant describes it (7/02/2024; AT 19.19-20)), and it is preferable not to do so in the absence of considered argument, because it is by no means apparent that the offence provision could not operate by reference to the particular principal who is found to be the employer (if there be a number of putative employers), applying the conventional approach using the principles in Pitcher v Langford.
Finally, as to the argument that there would be absurd results arising from the Crown's construction, the postulated inconvenience of the "multiple principals" construction is not such as to warrant a departure from the construction of the statute as allowing for multiple persons as principals. So, for example, if it be the case that every person in a group would need to hold an AFSL, so be it. Inconvenience as to the consequences of structuring the entity or entities carrying on a financial services business for the purposes of s 911B does not mandate a construction of the section that excludes multiple persons.
Turning then to the complaints made by the applicant as to various aspects of his Honour's reasoning on this issue, the applicant cavils with the description by his Honour of the applicant's submission based on ss 761F and 761FA as being "the same or a similar argument" to that which had been considered and rejected in relation to s 766B. That complaint is not sustainable. True it is that the respective arguments addressed different issues (the so-called "multiple acts argument" and the proper construction of "principal"). However, in both, the applicant relied upon grammatical issues (the drafting of the relevant provision being in the singular) and in that sense raised similar arguments. That ss 761F and 761FA were not raised in relation to the "multiple acts argument" does not mean that his Honour erred in considering that the reliance on them for the "principal" argument should be rejected for similar reasons as had been set out in relation to the "multiple acts argument". In that regard, the approach of the applicant appears to have been to parse his Honour's reasons as if they were a statute (which is not appropriate - see Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 at [67], [80], [95]-[96] (per Leeming JA); Woodland v Swimming Teachers Association [2013] UKSC 66; [2014] AC 537 at [28] (per Baroness Hale of Richmond DPSC)).
As to the further complaint that the reasons do not make apparent why his Honour considered the only sensible meaning of the legislation was that the principal could be multiple persons, this too should be rejected. On a fair reading of his Honour's reasons, it is clear that his Honour did not accept that a contrary intention (i.e., that the singular did not include the plural) could be discerned from the legislation as a whole.
Thus, the contention that his Honour erred in the construction of s 911B as contended for by ground 1(a) should be rejected. While it is not necessary for this conclusion to place reliance on s 20 of the Corporations Act, that section does reinforce the conclusion that the use of the singular in s 911B was not intended to restrict the "principal" to an individual natural person. It is therefore not necessary here to address the adverse consequences that the applicant says flow from acceptance of his construction of the section - duplicity and that the indictment avers a charge not known to the law.
The applicant says that his Honour erred in considering (at [71]) that the provision of particulars as to the four people identified as the actual principals was sufficient to overcome the ambiguity as to the identification of the "principal" in the indictment.
The applicant maintains that the identification of the "principal" is a critical matter in that it defines who the Crown must prove: was carrying on a financial services business (s 911B(1)); did not have an Australian financial services licence (s 911B(1)(a)(i); (b)(i); (c)(i)); the accused was not an employee or director of (s 911B(1)(a)(ii)), not an authorised representative of (s 911B(1)(b)(ii)) and not an employee of an authorised representative of (s 911B(1)(c)(ii)); or would not itself have been able to provide the relevant financial service because it wase otherwise exempt from needing a licence under s 911A(2) (see s 911B(1)(e)); and, in the event that the accused is a financial services licensee, who was an insurer (see s 911B(2)).
The applicant says that, given the critical importance of the "principal", and the flow on effect that the identification of the "principal" has for the definition of the elements of the charge, the "principal" relied upon should be squarely averred in the indictment.
While the applicant accepts that the provision of particulars as to the identity of the principal relied upon can cure unfairness to the accused in ensuring that he knows the case he has to meet, the applicant nevertheless submits that problems are likely to arise from imprecision in the indictment if the principal relied upon is not there identified (referring to what was said in S v The Queen (1989) 168 CLR 266 at 284 and 287-288 (Gaudron and McHugh JJ); [1989] HCA 66 and Doja v R [2009] NSWCCA 303 (Doja) at [5] (Spigelman CJ)), namely that: the relevance of evidence will not be able to be ascertained; proper instruction to the jury will be impeded; there may be doubt as to whether the verdict of the jury was unanimous with respect to the particular principal relied upon; the trial judge will be left in doubt as to which offence the jury actually found proven; and the record will not precisely reflect the actual offending charge for autrefois convict/acquit purposes.
As to the applicant's complaint of uncertainty arising in the use of the "BitConnect Lending Platform" as the thing by reference to which the identity of the principal is ascertained, the Crown emphasises that by Count 2 of the indictment the Crown alleges that the applicant provided a financial service on behalf of another person who carried on a financial services business; and that it has particularised that the financial service was providing financial product advice about the "Bitconnect Lending Platform". It is noted that the applicant does not contend that the "Bitconnect Lending Platform" is not a financial product.
In its written submissions at [34]-[37], the Crown has reiterated its case (as summarised earlier) and that, for the purposes of Count 2, the Crown alleges that the "BitConnect Lending Platform" was the "financial product" the applicant was providing "financial product advice" in respect of, and the "proprietors of the BitConnect Lending Platform" was the principal on whose behalf the applicant was providing financial services, and who conducted a financial services business in Australia.
As to the complaint by the applicant that Count 2 is duplicitous (by alleging the applicant provided a financial service on behalf of multiple people and thus the allegation is that the applicant committed multiple contraventions of s 911B), the Crown says that whether the pleadings and particularisation of an offence is duplicitous is in part always a question of statutory construction, because the first step is to consider the statutory description of the offence in order to identify what is the act or conduct prohibited. In that regard, the Crown submits (as per its submissions in relation to the multiple principals issue), that, as a matter of definition, the Corporations Act provides that, for the purposes of s 911B, the principal can be one or a number of people. The Crown says that, if that be accepted, then it cannot be duplicitous or ambiguous to particularise a number of legal persons as constituting the principal, because that is the course permitted by the offence provision.
The Crown emphasises that its case is that the applicant provided a financial service on behalf of a principal who (as a matter of statutory construction) may be constituted by one or more people from time to time.
As to the applicant's complaint as to the interchangeability of references to BitConnect in the CCS, the Crown points out that the applicant himself (as well as those on whose behalf he provided financial services), referred to Bitconnect and the "Bitconnect Lending Platform" in the various ways now complained of by the applicant. By way of example, the Crown alleges that the applicant: at various times represented to investors and other individuals that he was a director of BitConnect International PLC; registered the business names "Bitconnect cryptocurrency education" and "Bitconnect Australia", and registered the web domains 'wvww.bccaustralia.com" and "www.bitconnectaustralia.com.au", and created the email address "john@bitconnectaustralia.com.au"; established and administered a Facebook group at "www.facebook.com/BitconnectAustralia''; leased office facilities in the name of "BitConnect Cryptocurrency Education"; described to others his meetings with "other bitconnect top promoters"; described himself to investors as "the Aussie leader of BitConnect in Australia", "the Australian promoter for BitConnect" who had close links to the owners of BitConnect; "the BitConnect National Manager"; and "a director of BitConnect Australia"; and that, at various seminars the applicant used the expression "Bitconnect" in the following ways: "BitConnect cannot go down"; "BitConnect is like a Term Deposit"; and "BitConnect is doing what the banks are doing on a daily basis" (see Crown written submissions at [42]).
The Crown says that its case is also that companies incorporated in the United Kingdom were represented to have been the corporate entities behind BitConnect, including BitConnect Ltd and BitConnect International PLC.
In the present case, there is no error in his Honour's determination that it is sufficiently clear from the particulars who the Crown contends the "principal" to be for the purposes of Count 2; and the complaint as to the infelicity of reference to the BitConnect Lending Platform goes nowhere in circumstances where it is clear what the Crown contends by that reference.
Thus ground 1(b) is not made good.
First, that it was not appropriate to decline to quash an indictment which his Honour considered did not allege an offence on the basis that his Honour anticipated that a further indictment might be filed or an application to amend might be made. The applicant says that his Honour should have quashed Count 2 and dealt with any application to lay an ex-officio indictment by the Crown on its merits. It is noted that the indictment founds the jurisdiction of the Court. The applicant says that, once the view is formed that it does not allege an offence known to the law, it is inappropriate to allow the relevant count to remain on the Court record or to rely upon it as conferring jurisdiction.
Second, the applicant says that it does not appear that the Crown was in fact seeking to amend the indictment, referring to the exchange at T 189.45ff in which there was debate as to the power to amend an indictment and proceed as though there had been no defect; and the Crown Prosecutor said that "if your Honour directs us to do [i.e., amend the indictment to include reference to sub-s (e)], we'll do it. There's no - of course we would" (2/08/2023; T 190.46-48).
The applicant notes that the Crown has not provided any further indictment and has declined to do so until after the resolution of all pre-trial issues. The applicant says that there would therefore appear to be a live question as to the jurisdiction of the Court to continue making pre-trial rulings regarding Count 2 in reliance upon an indictment that the applicant says all appear to accept does not in fact allege an offence known to the law. (The Crown cavils with the suggestion that it accepts that the indictment does not allege an offence known to the law - see below.)
In the present case, it is necessary to focus on the import of sub-s 911B(1)(e). It is clear in my opinion that what this paragraph requires to be negatived by the Crown (since the offence is not committed if paragraph (e) is satisfied) is an hypothetical scenario - namely, whether, if the principal had provided the relevant service, the principal would not have required an AFSL because the provision of the service would be exempt under sub-s 911A(2). So much is readily apparent by the parenthetical words in paragraph (e) ("rather than the provider"). Thus, it is not to the point that the Crown's case is not that the principal (rather than the applicant) provided the financial services alleged to contravene s 911B. That is clear from the averment that the applicant provided the financial service on behalf of the principal.
Rather, in order to establish that the applicant contravened sub-s 911B(1), the Crown must not only negative the application of paragraphs (a)-(d) but must also establish that, on the hypothesis that the service had been provided by the principal rather than the applicant, the principal would not have required an AFSL. This, in my opinion, is an essential factual ingredient of the offence (see John v AG at 520 per Mason CJ, Deane and Dawson JJ). Failure to plead that ingredient thus results in a defective indictment (as the primary judge in the present case appears to have accepted).
Such a defect is not in my opinion saved by the operation of s 16(1)(b) of the Criminal Procedure Act, which provides that an indictment is not bad, insufficient, void, erroneous or defective for want of an averment of any matter "unnecessary to be proved or necessarily implied". That is because unless the possibility in s 911B(1)(e) is negatived there will have been no contravention of s 911B(1). It cannot be said that it is necessarily implicit in the averment that it was the applicant who provided the service on behalf of the principal that, if the principal had instead provided the service, there would not have been a need for the principal to be registered.
Thus, were the indictment to stand and the case proceed to verdict on that indictment, there would be a real issue as to the impact of the defects in the indictment, and ultimately as to whether there was a miscarriage of justice.
However, the issue having now been raised before his Honour (and now this Court) the question is as to whether there is scope for amendment of the indictment. Despite the recognition that an indictment's role in conferring jurisdiction on a court fetters the range of defects capable of being amended (see Doja at [24] per Spigelman CJ; Broome v Chenoweth at 601 per Dixon J), there is a broad scope for amendment of indictments. Dixon J observed in Broome v Chenoweth (at 601) the range of situations where an amendment would be proper, as opposed to where it would not be covered by the power of amendment, as follows:
An offence may be clearly indicated in an information, but, in its statement, there may be some slip or clumsiness, which, upon a strict analysis results in an ingredient in the offence being the subject of no proper averment. Logically it may be said in such a case that no offence is disclosed and yet it would seem to be a fit case for amendment, if justice is not to be defeated. By contrast, at the other extreme, an information may contain nothing which can identify the charge with any offence known to the law. Such a case may not be covered by the power of amendment.
While it has been said that an indictment which does not describe an offence cannot be remedied (see Doja at [14] per Spigelman CJ), a failure to particularise a charge adequately does not, without more, render an indictment a nullity (see Area Concrete Pumping Pty Ltd v Childs [2012] NSWCA 208 (Area Concrete) at [47] per Bathurst CJ, with whom Hoeben JA agreed; applying GPI (General) Pty Ltd v Industrial Court of New South Wales [2011] NSWCA 157). As held by Giles JA in Boujaoude v R (2008) 72 NSWLR 85; [2008] NSWCCA 35 (at [47]-[48]), even an inadequately described offence will not necessarily render the offence unknown to the law such that the court's jurisdiction is lost and the power to amend cannot be engaged (see also Area Concrete at [49]).
Here, the indictment does describe an identifiable offence (provision of a financial service on behalf of another person who carries on a financial services business in circumstances where the conditions specified in paragraphs (a)-(d) are not satisfied) but is incomplete in the averment of the exculpatory conditions that must be negatived by the Crown by reason of the omission of reference to paragraph (e).
The crux of the applicant's argument is that the omission of paragraph (e) results in there being no identifiable offence. The present case is clearly one which does not lie on the extreme end of the spectrum as to validity; the indictment is not "one which disclosed no offence known to the law, for example, where it was laid under a statute which had been repealed and not re-enacted" (see R v McVitie [1960] 2 QB 483 (McVitie) at 495). Nor are there any identifiable issues with duplicity in offences within the same offence (see Doja at [36] per Spigelman CJ). The present indictment is more complicated than that; it is a question of whether the lack of inclusion of a negative element of an offence is sufficient reason to find that the court does not have jurisdiction to hear the present case.
I consider that the indictment is not void, although it is incomplete and should be amended, for the following reasons. It is clear that the indictment is referring to an offence where a person has provided a service for a principal without satisfying the requisite conditions under s 911B(1). The omission of one such condition is not fatal in the identification of an offence. While the omission of an essential element of an offence may be a reason to find an indictment invalid (see, for example, Lodhi v R [2006] NSWCCA 121 at [91]; Rockdale Beef at [122]-[123] per Basten JA, with whom Mason P agreed), this turns on whether there is power to amend the defect. As Basten JA goes on to say in Rockdale Beef at [130]:
That history demonstrates that it has long been sufficient to describe the nature of an offence by use of the statutory language: see ss 145A of the former Justices Act 1902 (NSW) and Ex parte Lovell; Re Buckley (1938) 38 SR(NSW) 153 at 174 (Jordan CJ, Davidson and Halse Rogers JJ agreeing) and now s 11. However, it does not follow that all the words of the statute must be used, nor that, where the specific provision is adequately identified, all the legal elements must be expressly identified. For example, some may be necessarily implied from what is described, for the purposes of s 16(1)(b) [of the Criminal Procedure Act].
The case considered by the English Court of Criminal Appeal in McVitie is authority for the proposition that reference to the statutory provision creating an offence may "implicitly plead the element contained in the section" (see Doja at [35] per Spigelman CJ). In McVitie, the particulars of the offence in the indictment failed to include the word "knowingly"; the appellant alleged that he had been tried and convicted in respect of an offence unknown to law. The Court held that, although the word "knowingly" should have been included in the particulars, its omission did not make the indictment bad, but simply "defective or imperfect" (at 495). The offence there was known, just with incomplete particulars.
Although in the present case the Crown intentionally excluded paragraph (e), it is not correct to suggest that the offence is unidentifiable. The specific provision has been adequately identified here. The indictment clearly refers to s 911B(1). An indictment is not void for want of jurisdiction where there has not been a complete identification of all the elements which make up an offence.
Further, this is not an instance where the indictment has substantially changed the words of the offence, such that it is unidentifiable (cf R v Aniba (1995) 83 A Crim R 224, where the words "carnal knowledge against the order of nature" were used instead of "carnal knowledge by anal intercourse").
The stage of the proceedings at which this issue has been raised is also of relevance. As discussed above, I do not accept that the indictment fails to identify an offence; rather, it is incomplete in its present form. However, there was power for the indictment to be amended (as the applicant's submissions in effect appear to acknowledge) and his Honour simply proceeded on the mistaken understanding that the Crown proposed to make an application for the indictment to be so amended. On that basis, there was no error in his Honour permitting the Crown an opportunity to do so (and not moving immediately to quash the indictment or permanently stay the proceedings on Count 2). The recent decision of this Court in Lam v R [2024] NSWCCA 6 similarly dealt with an application to stay proceedings permanently on the basis that the indictment was deficient as it did not describe the offences charged under the statute. Meagher JA (with whom Weinstein J agreed) observed (at [6]-[7]) in obiter that such a deficiency could easily have been remedied by an amendment to the indictment made at the trial (either before or after the indictment was presented), and the primary judge had not erred in dismissing the deficiency argument as a basis for quashing the indictment or staying the proceedings.
The Crown is able to seek to amend the indictment at any time before a jury returns with its verdict, by leave of the court or with the consent of the applicant (see s 20 of the Criminal Procedure Act; Tonari v R [2013] NSWCCA 232 at [63]). Otherwise, a court itself can order the amendment of an indictment (see s 21 of the Criminal Procedure Act; although it appears unlikely that this would apply after a jury has returned its verdict, see R v MAJW [2007] NSWCCA 145 at [29]-[39] per James J, with whom Rothman J and Harrison J (as his Honour then was) agreed).
It is the responsibility of the Crown to ensure that the indictment laid is correct; where there is any contention over the elements required to be satisfied by a prosecution in charging an accused with an offence, the Crown should amend the indictment to reflect as such (see R v Pople [1951] 1 KB 53 at 55 per Humphreys J).
Thus, while the indictment was incomplete, there was no error by the primary judge as here suggested by the applicant. The fact that his Honour mistakenly thought that the Crown had indicated an intention to amend the indictment does not alter that conclusion. The fact that his Honour determined not to quash Count 2 on the indictment under the mistaken understanding of the Crown's position, does not lead to the conclusion that it is now appropriate to quash or stay proceedings on Count 2 of the indictment. The appropriate course would be for the Crown to amend the indictment. Whether the Crown chooses to proceed on an incomplete indictment is ultimately a matter for it. It is inappropriate here to speculate on what might flow therefrom.