Commonwealth DPP v Barnes

Supreme Court of NSW|2010-09-15|Before: Buddin J

Introduction 1 HIS HONOUR: The Commonwealth Director of Public Prosecutions (the appellant) instituted proceedings by way of Court Attendance Notices (CANs) against Gregory Barnes (the respondent) alleging that he had committed offences contrary to s 1309(1) and (2) of the Corporations Act 2001 (C'th). He was committed for trial in respect of four such offences by the Magistrate before whom the proceedings were conducted. Subsequently, his Honour made an order that the appellant pay the professional costs of the respondent in the sum of $140,000. This is an appeal brought by the appellant seeking an order that that decision be set aside. Section 56(1)(d) enables a prosecutor to appeal to this Court against an order for costs made by a Magistrate against the prosecutor in committal proceedings "but only on a ground that involves a question of law alone".

Background 2 The charges related to statements made in connection with the financial affairs of Chameleon Mining NL, (the company) of which the respondent and a co-defendant, Landan Roberts, were directors. The charges arose from the lodgement with the Australian Stock Exchange (ASX) of two documents on behalf of the company. In all four CANs were issued. What were described as Sequences 1 and 1A related to the lodgement with ASX of the company's Half Yearly Report for the period ending 31 January 2003 whilst sequences 2 and 2A related to the lodgement with ASX of the company's Annual Report for the year ending 30 June 2004. Sequences 1 and 2 alleged offences contrary to s 1309(1) of the Corporations Act whilst sequences 1A and 2A alleged offences contrary to ss(2) of the Act. 3 Those provisions are in the following terms: (1) An officer or employee of a corporation who makes available or gives information, or authorises or permits the making available or giving of information, to: … (c) an operator of a financial market (whether the market is operated in Australia or elsewhere) or an officer of such a market; being information, whether in documentary or any other form, that relates to the affairs of the corporation and that, to the knowledge of the officer or employee: (d) is false or misleading in a material particular; or (e) has omitted from it a matter or thing the omission of which renders the information misleading in a material respect; is guilty of an offence. (2) An officer or employee of a corporation who makes available or gives information, or authorises or permits the making available or giving of information, to: … (c) an operator of a financial market (whether the market is operated in Australia or elsewhere) or an officer of such a market; being information, whether in documentary or any other form, relating to the affairs of the corporation that: (d) is false or misleading in a material particular; or (e) has omitted from it a matter or thing the omission of which renders the information misleading in a material respect; without having taken reasonable steps to ensure that the information: (f) was not false or misleading in a material particular; and (g) did not have omitted from it a matter or thing the omission of which rendered the information misleading in a material respect; is guilty of an offence. 4 Sequence 1, which alleged an offence under s 1309(1), was in the following terms: Officer knowingly give information that is false or misleading Between about 12 February 2004 and 15 March 2004 Sydney and elsewhere Being an officer of a corporation, namely Chameleon Mining NL ("Chameleon"), did permit the making available of information to an operator of a financial market, namely the Australian Stock Exchange, or an officer of such a market, namely Jill Hewitt, being information in documentary form set out in a document entitled Chameleon Mining NL Half Yearly Report period ended 31 st December 2003, being information that related to the affairs of Chameleon, that, to his knowledge, had omitted from it a matter or thing the omission of which rendered the information misleading in a material respect. Particulars of matter or thing omitted Omitted from the document was any reference to the fact or effect of any or all of matters: i. that the $3,000,000 referred to as a "Short Term Receivable" related to the issue of 15 million shares for cash, pursuant to the Chameleon Prospectus, to Zenith Development Company Ltd and A.C.N. 1038504086 Pty Ltd ii. that no monies had been received by Chameleon for those shares issued iii. that in a document entitled "Option to Acquire Deed" signed by Landan Roberts on behalf of Chameleon on 5 August 2003, Chameleon Mining NL guaranteed the payment of a fee of $3,100,000 due by Tembo Gold Holdings Pty Ltd for the option to acquire the rights held by Zenith Developments Company Ltd to an interest in Brazilian Bonds. iv. that in 2003 Landan Roberts' written demands for payment or part payment of the $3,000,000 by Zenith Development Company Pty Ltd and A.C.N 1038504086 Pty Ltd had been refused. 5 Sequence 1A, which alleged an offence under s 1309(2) and was effectively an alternative to sequence 1, was in the following terms: Officer/ employee give information that is false or misleading Between about 12 February 2004 and 15 March 2004 Sydney and elsewhere Being an officer of a corporation, namely Chameleon Mining NL ("Chameleon"), did permit the making available of information to an operator of a financial market, namely the Australian Stock Exchange, or to an officer of such a market, namely Jill Hewitt, being information in documentary form set out in a document entitled Chameleon Mining NL Half Yearly Report period ended 31 st December 2003, an officer of the Australian Stock Exchange, Jill Hewitt, being information that related to the affairs of Chameleon, that has omitted from it a matter or thing the omission of which renders the information misleading in a material respect without having taken reasonable steps to ensure that the information was not false or misleading in a material particular and did not have omitted from it a matter or thing the omission of which rendered the information misleading in a material respect.

Particulars of matter or thing omitted (the particulars which were provided were the same particulars as those which were provided in respect of Sequence 1). 6 Sequence 2, which alleged an offence under s 1309(1), was in the following terms: Officer knowingly give information that is false or misleading Between about 30 October and 3 November 2004 Sydney and elsewhere Being an officer of a corporation, namely Chameleon Mining NL ("Chameleon"), did give information to an operator of a financial market, namely the Australian Stock Exchange, or an officer of such a market, namely Jill Hewitt, being information in documentary form set out in a document entitled Chameleon Mining NL Annual Report year ended 30 th June 2004, being information that related to the affairs of Chameleon, that, to his knowledge, had omitted from it a matter or thing the omission which rendered the information misleading in a material respect Particulars of matter or thing omitted Omitted from the document was any reference to the fact or effect of any or all of matters: i. that the $3,000,000 referred to as a negative "Short Term Receivable", included in monies received from shareholders and as a "doubtful debt" related to the issue of 15 million shares for cash, pursuant to the Chameleon Prospectus, to Zenith Development Company Ltd and A.C.N. 1038504086 Pty Ltd ii. that no monies had been received by Chameleon for those shares issued iii. that in a document entitled "Option to Acquire Deed" signed by Landan Roberts on behalf of Chameleon on 5 August 2003, Chameleon Mining NL guaranteed the payment of a fee of $3,100,000 due by Tembo Gold Holdings Pty Ltd for the option to acquire the rights held by Zenith Development Company Ltd to an interest in Brazillian Government Bonds. iv. that the $3,000,000 described in first, second and third quarterly reports of Chameleon as "deposit at call" had been in the fourth quarterly report reclassified as a "receivable" but the monies had not been transferred to another party as a short term loan earning interest of 9% v. that in 2003 Landan Roberts' written demands for payment or part payment of the $3,000,000 by Zenith Development Company Pty Ltd and A.C.N 1038504086 Pty Ltd had been refused. 7 Sequence 2A, which alleged an offence contrary to s 1309(2) and was in the alternative to sequence 2, was in the following terms: Officer/ employee give information that is false or misleading Between about 30 October 2004 and 3 November 2004 Sydney and elsewhere Being an officer of a corporation, namely Chameleon Mining NL ("Chameleon"), did give information to an operator of a financial market, namely the Australian Stock Exchange, or to an officer of such a market, namely Jill Hewitt, being information in documentary form set out in a document entitled Chameleon Mining NL Annual Report year ended 30 th June 2004, being information that related to the affairs of Chameleon, that has omitted from it a matter or thing the omission of which renders the information misleading in a material respect without having taken reasonable steps to ensure that the information was not false or misleading in a material particular and did not have omitted from it a matter or thing the omission of which rendered the information misleading in a material respect

Particulars of matter or thing omitted (the particulars which were provided were the same as those which were provided in respect of Sequence 2). 8 The hearing against the respondent, and Landan Roberts, commenced in September 2008. It went for several days before resuming in February 2009. For reasons that are not presently relevant, the proceedings against Mr Roberts did not continue at that time. 9 During the course of final submissions, counsel for the appellant drew the Magistrate's attention to the contents of two further documents which were in evidence, one being a letter which had been sent by the company to ASX on 27 September 2004 and the other being the company's quarterly mining report for the quarter ending 31 December 2003 which was submitted to ASX. Counsel for the appellant invited the Magistrate to commit the respondent for trial in relation to what were alleged to be false statements contained in each of those documents, notwithstanding the fact that no charges had originally been laid in respect of them. It is common ground that the Magistrate had the power to do so and no objection was raised on behalf of the respondent to consideration being given by his Honour to that proposal. His Honour requested that the appellant draft and lay appropriate charges against the respondent in respect of those charges. Those charges became Sequences 3 and 4 respectively. His Honour was not however satisfied that there was sufficient evidence to support those charges and ultimately discharged the respondent in respect of them. It may be observed that no application for costs was made by the respondent in relation to those matters. Counsel for the appellant also sought, and was permitted, to amend the original CANs. It is clear from what appears below that the particulars had been amended in certain respects. 10 The CAN described as Sequence 1 was amended so that it then read: Officer knowingly give information that is false or misleading

Sydney and elsewhere Being an officer of a corporation, namely Chameleon Mining NL (the Company) did permit the making available of information to an operator of a financial market, namely the Australian Stock Exchange, or an officer of such a market, namely Jill Hewitt, being information in documentary form set out in a document entitled "Chameleon Mining NL. Half Yearly Report period ended 31 st December 2003", being information that related to the affairs of the Company, that, to his knowledge, was false or misleading and had omitted from it a matter or thing the omission of which rendered the information misleading in a material respect. Particulars of falsity and misleading 1. The notes to the financial statements falsely stated that the Company had $3,000,000 "in the form of a Secured 3 month Term Loan Receivable, renewal each 3 months, earning an interest rate of 9%" per annum, whereas in fact the Company did not have the sum of $3,000,000 on deposit. 2. The notes to the financial statements falsely stated that the Company had "set aside the funds required for the Fijian Exploration Program in the form of a Secured 3 month Term Loan Receivable, renewable each 3 months, earning an interest rate of 9% per annum", whereas in fact the Company had no money set aside. 3. In the financial statement (page 11) it is falsely stated that the Company received $3,242,565 cash from the share issue, whereas in fact $3,000,000 of the amount claimed as cash received from the issue of shares had not been received. 4. In the Independent Review Report it falsely stated that the directors of the Company were of the view that there was a debt of $3,000,000 owing to the Company and it was fully recoverable, whereas it was known to the directors (including the defendant) that the alleged debt of $3,000,000 said to be owing to the company was in dispute and not fully recoverable. Particulars of matter or thing omitted 1. That the two major shareholders of the Company, Zenith Development Company Limited and ACN 103 850 406, had not paid cash for the shares issued to them. 11 The CAN described as Sequence 2 was amended so that it then read: Officer knowingly give information that is false or misleading

Sydney and elsewhere Being an officer of a corporation, namely Chameleon Mining NL, (the company) did give information to an operator of a financial market, namely the Australian Stock Exchange, or to an officer of such a market, namely Jill Hewitt, being information in documentary form set out in a document entitled "Chameleon Mining NL Annual Report year ended 30 th June 2004", being information that related to the affairs of the Company, that, to his knowledge, was false or misleading and had omitted from it a matter or thing the omission of which rendered the information misleading in a material respect Particulars of falsity and misleading 1. The Chairman's report (p 8), when read in conjunction with the financial statements (particularly p 26 falsely represented that the Company had loaned Zenith $3,100,000 and that a similar amount was "agreed to be offset against a facility that Zenith would obtain…", whereas in fact the Company had not loaned any money to Zenith. 2. The financial statements (p9 18) falsely state that the Company had a "short term loan" of $3,000,000, whereas it had no such short term loan. 3. The financial statements (p 26) falsely state that the Company had "Loan on deposit" of $3,100,000, whereas it had no such loan on deposit. 4. The financial statements (p 18) falsely state that the Company had received $6,795,469 in cash from the issue of shares, whereas that figure was overstated by at least $3,000,000. Particulars of matter or thing omitted 1. That the two major shareholders of the Company, Zenith Development Company Limited and ACN 103 850 406, had not paid cash for the shares issued to them. 12 The same amendments were made in respect of sequences 1A and 2A. As I have said, his Honour in due course committed the respondent to stand trial in respect of the four amended CANs and then proceeded to award costs against the appellant. 13 His Honour's decision to make an order for costs was made pursuant to s 116(1)(b) of the Criminal Procedure Act 1986 (NSW) which is in the following terms: (1) A Magistrate may at the end of committal proceedings order that the prosecutor pay professional costs to the registrar, for payment to the accused person, if: … (b) the accused person is committed for trial or sentence for an indictable offence which is not the same as the indictable offence the subject of the court attendance notice. 14 The circumstances in which the power to award costs may be exercised are set out in s 117 of the Act: (1) Professional costs are not to be awarded in favour of an accused person in any committal proceedings unless the Magistrate is satisfied as to any one or more of the following: (a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner, (b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner, (c) that the prosecution unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought, (d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award costs. 15 Before considering the issues which arise for consideration, it will be first necessary to make some brief reference to the factual background to the alleged offences. For that purpose I gratefully adopt the appellant's summary of the evidence which is reproduced below: Chameleon was a small speculative mining company based in Perth but with an office in Sydney. In the year 2003 Chameleon had two active directors who were involved in the management of the company: The defendant, who was the managing director, and operated from Perth; and Roberts, who occupied the position of company secretary, and operated from Sydney. Phillip Grimaldi ("Grimaldi") was a person who was associated with the management of Chameleon, although he did not hold any formal position in the company. Grimaldi shared an office with Roberts. In mid 2003 Chameleon was seeking to raise capital via a share issue and contemporaneously list on the ASX. ASX conditions for listing Chameleon included: an asset requirement of $3.2m in cash (or a form readily convertible to cash); provision of an independent expert's report in accordance with listing rule 1.1.3 (this concerned the availability of sufficient working capital, which in this case meant that Chameleon needed to have at least $1.5m after payment of expenses etc). Chameleon did not reach the minimum share subscriptions required under the terms of its prospectus, and a number of extensions of the prospectus were sought. In about June 2003 Chameleon (via Ian Whitbread, a former director of Chameleon) approached a businessman, Trevor Prider, seeking "financial enhancement" for Chameleon. Trevor Prider was associated with a Prider family company called A.C.N. 103 850 406 Pty Ltd ("ACN"), which was, apparently, involved with providing finance for companies. Trevor Prider also had an association with a company called Zenith Development Company Limited ("Zenith"), which was an Isle of Mann company. Trevor Prider's son, Ian Prider, a resident of New South Wales, was the solicitor acting for Zenith. According to Trevor Prider, Ian Whitbread was seeking, on behalf of Chameleon, "further security" to obtain finance for its planned mining operations in Fiji. Trevor Prider states that he told Whitbread that he may be able to assist and that Whitbread should contact his son, Ian Prider "who is familiar with the required paperwork." It appears that, following approaches made to Ian Prider, an arrangement was arrived at whereby Zenith was to subscribe for $3m worth of Chameleon's shares, but Zenith would recoup all of its (notional) outlay for the shares in a separate but related transaction. That transaction involved Chameleon, and another company, Tembo Gold Holdings Pty Ltd ("Tembo"), said to be a wholly owned subsidiary of Chameleon, entering into an Option Agreement with Zenith. The subject matter of the option was Zenith's "interest" in a Brazilian "government instrument". Tembo was to pay $3.1m on execution of the Option Agreement, for the option to acquire Zenith's interest in this instrument. The intention to exercise the option was to be notified on or before 22 July 2004, and exercise of the option required a further payment of $14.59m. Payment of any monies owed by Tembo under the Option Agreement was guaranteed by Chameleon. The precise circumstances whereby this arrangement was arrived at are obscure. This is despite the fact that statements have been provided by Ian and Trevor Prider and both of them were cross-examined in the committal proceedings. Apparently, the Option Agreement was supposed to provide "financial enhancement" for Chameleon. From Zenith's perspective, the Option Agreement was the consideration provided in return for the Chameleon shares. Objectively, however, it is doubtful that the Option Agreement provided any benefit to Chameleon. The Chameleon/Tembo/Zenith Option to Acquire Agreement, and concomitant minutes of Chameleon and Tembo directors' meetings, were executed, ex facie , on 5 August 2003. In fact, all these documents were executed on or before 16 July 2003, the date on which executed copies of these documents were provided to Ian Prider. The post-dating of these documents was designed to give the impression that the Option to Acquire Agreement was not connected with the issue of shares to Zenith and also to give the appearance that the Option Agreement had been entered into after the issue of shares had occurred. Just before the shares were issued to Zenith, Phillip Grimaldi asked Zenith to acquire its shares in Chameleon in the names of two separate companies (presumably to give the appearance of a sufficient spread of Chameleon's shares). Zenith agreed to acquire its shares in the name of Zenith and ACN. It is reasonably apparent that none of those concerned with the making of this arrangement expected any monies to change hands. The arrangement was designed to give the appearance of $3 million worth of shares in Chameleon being acquired for cash. The arrangement provided Chameleon with the opportunity to (falsely) claim that it had fulfilled the listing requirements of the ASX in regards to availability of cash. Ultimately, Zenith/ACN acquired $3m worth of Chameleon shares for no payment. Chameleon obtained nothing tangible in return for the issue of the shares, but it did get Zenith's assistance (or more properly Ian Prider's assistance) in representing that it had issued the shares for cash. It was represented to the ASX that Chameleon had complied with the ASX listing requirements. This was done by way of a letter from Chameleon with annexures, dated 16 July 2003 and bearing Roberts' signature, together with an independent expert's report of same date, form an accountant, Keith Jackson ("Jackson"). The expert's report confirmed Chameleon's fulfilment of the ASX's working capital requirement. Compendiously, these documents represented that: Chameleon had complied with the ASX capital requirements; Chameleon had raised $3.2 in cash by the issue of its shares; $3m of the $3.2m raised in cash was held in trust (impliedly for Chameleon) in a solicitor's (impliedly Chameleon's solicitor) trust account. All of those representations were false. Chameleon had only received about $200,000 in cash for the issue of its shares (unconnected to Zenith); Chameleon had no funds held in a solicitors' trust account; Chameleon had not complied with the ASX listing requirements. Only Roberts was charged in connection with these documents. It is to be noted that Jackson furnished the requisite expert's report after being told by Grimaldi that monies for payment of the Zenith/ACN shares were in "the Prider trust fund". Jackson was, at the very least, negligent in providing this report; he appears to have relied on a letter from Ian Prider concerning Zenith's capacity to fund the $3m share acquisition to confirm that the purchase moneys for the issue of shares were held by Ian Prider on behalf of Chameleon. Roberts, the defendant and Grimaldi later used the fact that Jackson had provided this report as a lever to persuade Jackson to provide further financial reports which assumed the truth of the position represented to the ASX on 16 July 2003. On the faith of these false representations, the ASX listed Chameleon as from 6 August 2003. Of course, if the ASX had become aware of the true situation regarding Chameleon's cash position, it would not have listed ASX in the first place. Alternatively, if the ASX had come into possession of information regarding Chameleon's true financial position subsequent to listing, it would have immediately delisted Chameleon. As a consequence of Chameleon becoming listed on the ASX, Chameleon had on-going obligations to provide financial statements to the ASX (for release to the market). These on-going obligations included the provision of financial statements such as, quarterly mining reports, half yearly reports and yearly reports. In fulfilling these on-going reporting requirements to the ASX, further false representations were made on behalf of Chameleon, both as to the alleged receipt of the $3m and the whereabouts of this money. These reports form the subject matter of charges laid against Roberts and the defendant. There was an additional charge against Roberts concerning the provisions of a false statement to Jackson as Chameleon's auditor. From about December 2003 on, claims were made on behalf of Chameleon to Ian and Trevor Prider that the Option Agreement was invalid and/or worthless and that Zenith/ACN owed Chameleon $3m. The claims, mostly in the form of facsimile letters made serially by Grimaldi, Roberts and the defendant, were not always clear or consistent as to whether Zenith/ACN was said to owe Chameleon $3m as a consequence of what was then being said about the Option Agreement, or whether this was always supposed to have been the position. Chameleon's claims were not accepted by the Priders/Zenith/ACN. They insisted that full consideration had been provided for the issue of the shares by way of the Option Agreement. Priders/Zenith/ACN further asserted that, in fact, Chameleon owed Zenith $100,000. The making of these claims on behalf of Chameleon should have little or no bearing on whether false statements were in fact made to the ASX.

The magistrate's decision 16 The first issue which his Honour had to consider was whether, under s 116(1)(b) of the Act, the respondent had been committed for trial "for an indictable offence which is not the same as the indictable offence the subject of the court attendance notice". 17 The Magistrate's reasons for determining that the provision applied are set out below:

Mr Barnes has been committed for trial for four indictable offences. The offences were amended before the end of the committal proceedings, by amending the particulars. The amendments deleted the particulars in each of the court attendance notices and added new particulars. The question to be determined is whether the deletion of particulars and the adding of new particulars with respect to each of the four offences means that Mr Barnes has been committed for trial for an indictable offence, which is not the same as the indictable offence the subject of the court attendance notice. It is the position of the prosecution that the term "offence" does not include particulars. And, since the statement of the offence has not been amended, Mr Barnes has been committed for trial for an indictable offence, which is the same as the indictable offence the subject of the court attendance notice. An indictable offence is defined in the Act as an offence that may be prosecuted on indictment. An indictment is defined as including a court attendance notice or any other process or document by which criminal proceedings are commenced. ( Criminal Procedure Act , s15) A court attendance notice must describe the offence, and briefly state the particulars of the alleged offence. ( Criminal Procedure Act , s175) The form of an indictment is well settled in law; particulars are necessary as a matter of procedural fairness. If an offence was defined merely as the description of the offence, without particulars, it could not be punishable by indictment. For the purposes of s 116 of the Act, an indictable offence the subject of a court attendance notice contains a description of the offence and the particulars, and an offence is so defined. A substantive amendment was made to the court attendance notice, with respect to each offence, by deleting the particulars and adding new particulars. The amendment to the particulars made the indictable offence not the same as the indictable offence the subject of the court attendance notice. 18 His Honour then turned to consider the second issue which was whether the payment of the respondent's professional costs was "just and reasonable". His Honour recognised that such payment is "limited by s 117 of the Act" and noted that the application was made pursuant to s 117(1)(d), namely "because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor". 19 The Magistrate's reasoning in that respect is set out below: The particulars of the relevant indictable offences, prior to amendment, contained a particular: That in a document entitled "Option to Acquire Deed" signed by Landan Roberts on behalf of Chameleon Mining NL on 5 August 2003 Chameleon Mining NL guaranteed the payment of a fee of $3,100,000 due by Tembo Gold Holdings Pty Ltd for the option to acquire the rights held by Zenith Development Company Ltd to an interest in Brazilian Government Bonds. It was alleged that the omission of the particular in the Chameleon Mining NL Half-Yearly Report ended 31 December 2003, and the Chameleon Annual Report for the year ended 30 June 2004 made each report misleading in a material respect. The amended indictable offences omitted the particular. The four amended indictable offences omitted all the particulars and alleged new particulars. In relation to two indictable offences, two of the new particulars related to similar allegations to omitted particulars, and two of the new particulars bore no such relationship. In relation to the other two indictable offences, the new particulars bore no relationship to the new particulars. Certain witnesses were directed to attend the committal proceedings. They were Mr Dondas, Chairman of the Company; Mr Jackson, Auditor of the Company; Mr Ian Prider; and Mr Trevor Prider. The Crown made an opening address, and during the address the "option to Acquire Deed" was referred to as a critical document. Ian Prider drafted the deed. Trevor Prider was involved in the option to acquire a Brazilian Government Bond. Mr Dondas was purported to have signed the "Option to Acquire Deed". The evidence of Mr Dondas was taken on the first day of the proceedings. The evidence of Mr Jackson was taken on the second day of the proceedings. The evidence of Mr Ian Prider was taken from 11:00 am on the third day of the proceedings until the end of the fourth day of the proceedings. The evidence of Trevor Prider was taken on the fifth day of the proceedings. The sixth day of proceedings were taken up with the Crown's documentary material. On the seventh day of the proceedings the Crown sought to amend the existing court attendance notices, and file two new court attendance notices; and Counsel for Mr Barnes made submissions. On the eight day the Crown made a (sic) made submissions, and on the ninth day the Crown continued submissions, and Counsel for Mr Barnes made submissions. The submissions drafted by Counsel for Mr Barnes had been prepared on the indictable offences the subject of the court attendance notices served following the charging of Mr Barnes. More than half of the written material is concerned with particulars, predominantly about the "option to acquire deed", that are not relevant to the amended court attendance notices. Of the nines (sic) days of the committal proceedings, half of the time was spent with witnesses in relation to particulars that were subsequently deleted, predominantly in relation to the "option to acquire deed" and the Brazilian Government Bond. Due to (sic) nature of the amendments made to court attendance notices, and the timing of those amendments, I find that there are exceptional circumstances. I find that is just and reasonable for the Crown to pay half of the professional costs of Mr Barnes, being $140,000. 20 By way of elaboration, counsel for the respondent submitted that his major focus at the committal hearing had been to challenge the authenticity of the Option Agreement to which specific reference was made in one of the original particulars. As I understand his position, there were other issues which needed to be explored but they remained on the periphery, at least at the committal stage. That approach, he contended, had been undertaken in an endeavour to demonstrate that the Option Agreement was in fact a sham or of no legal validity and that as a result it could not have been misleading to have omitted reference to it. Counsel pointed out that by the time of final addresses, counsel for the appellant appeared to accept that proposition because in his written submissions provided to the Magistrate, counsel had contended that "the Option Agreement was simply a device to give the appearance of commensurate consideration having been given for the acquisition of the Chameleon shares". It was accordingly submitted in this court by counsel for the respondent that the omission of any reference to the Option Agreement in the amended particulars meant that "the Crown had sought to radically depart from the case with which it had originally charged the defendant". 21 The appellant disputes that assertion as being an accurate characterisation of the situation. But in any event, it was contended that the deletion of any reference to the Option Agreement in the amended particulars did not remove its significance to the prosecution case. The prosecution case, so it was said, still relied upon an allegation that the references in the reports to $3million being receivable or, on loan, or owing to the company (inferentially from the issue of shares) was misleading because the Option Agreement had the immediate effect of offsetting any entitlement of the company to the funds. It was pointed out that counsel for the appellant had submitted to the Magistrate that the effect of the Option Agreement was to create a form of "round robin" arrangement as a result of which the company received no money. It was also pointed out that, in the course of giving his reasons for committing the respondent for trial, his Honour had made specific reference to those arrangements. Accordingly, it was submitted that it remained misleading for the reports to make reference to the loans (however they may be characterised) without reference to the set-off claimed by Zenith and ACN. In essence, the case was, and remained that the company never received any money in consideration for the shares issued to Zenith and ACN although those shares were treated as having been "fully paid". Putting the matter another way, the essence of the allegation was that the respondent made false or misleading statements in relation to the company meeting its obligation to raise $3 million in cash when its entitlement to that sum for the shares to Zenith and ACN was offset by its liability under the Option Agreement. 22 At one stage counsel for the appellant in this Court described the amendment of the particulars as being "a matter of housekeeping" or as an "exercise in fine tuning". I do not accept that that is anymore an accurate description of what occurred than the description which was advanced by counsel for the respondent. There was undoubtedly a change in the manner in which the appellant put its case but it was scarcely, as I read the submissions which were made to the Magistrate, of epic proportions. Moreover, it is far from clear that such changes as there were, were not made at least partly, as a result of what emerged from the cross-examination of the various witnesses whose attendance was required by the respondent and in particular about what they had to say concerning various aspects of the Option Agreement including its significance or lack thereof. It is common ground that the cross-examination, particularly of Ian and Trevor Prider, was very extensive. Furthermore, the appellant submitted that the presentation of its case on either set of particulars depended upon the same core documents and that accordingly much of the cross-examination, especially in relation to the Option Agreement as well as associated matters such as the question of consideration for the issue of the shares, still remained relevant. 23 The appellant challenges the Magistrate's conclusions in respect of both of the issues which I have identified. Those challenges are described in the following fashion:

Whether the defendant was committed for trial for indictable offences which were not the same as the indictable offences the subject of the Court Attendance Notices, for the purposes of section 116(1)(b) of the Criminal Procedure Act, when only the particulars of the offences alleged in the Court Attendance Notices were amended.

Whether the amendments of the particulars of the indictable offences the subject of the Court Attendance Notices amounted to exceptional circumstances relating to the conduct of the proceedings, for the purposes of section 117(1)(d) of the Criminal Procedure Act, such that it was just and reasonable to order costs. 24 As I have said the appellant's right of appeal is confined to a ground that involves "a question of law alone". In Collector of Customs v Agfa-Gevaert Ltd (1995) 186 CLR 389 the High Court observed: In Collector of Customs v Pozzolanic Enterprises Pty Ltd , the Full Federal Court spoke of the distinction between law and fact in a statutory context as resting upon "value judgement[s] about the range of [an] Act" which, the Court said, necessarily raised questions of law. Some recent Federal Court decisions have attempted to distil the numerous authorities on the problem into a number of general propositions. Thus in Pozzolanic , after referring to many cases, the Court identified five general propositions: "1. The question whether a word or phrase in a statute is to be given its ordinary meaning or some technical or other meaning is a question of law. 2. The ordinary meaning of a word or its non-legal technical meaning is a question of fact. 3. The meaning of a technical legal term is a question of law. 4. The effect or construction of a term whose meaning or interpretation is established is a question of law. 5. The question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law." (at 395) (footnotes omitted) 25 A little later it was observed that "[a]ll that is required for a reviewable question of law to be raised is for a phrase to be identified as being used in a sense different from that which it has in ordinary speech" (at 397). In my view, the question which is raised meets the requirements identified in those propositions and should accordingly be treated as being a question of law.

Consideration 26 The first and most critical question raised in this appeal is whether the jurisdiction created by s 116(1)(b) is enlivened in the present circumstances. The determination of that issue raises a pure question of statutory construction. 27 In approaching that question it is important to recall that what is under consideration is the issue of the award of costs at the end of committal proceedings. The nature and purpose of such proceedings has been the subject of considerable judicial attention. Their continuing importance should not be underestimated notwithstanding the fact that the legislature has placed considerable restrictions upon the circumstances in which witnesses may be required to give oral evidence in such proceedings. In Hanna v Kearney (NSWSC, 28 May 1998, unreported) Studdert J, in the context of determining whether "substantial reasons" existed within the meaning of s 91(3) of the Criminal Procedure Act 1986 (NSW) such as to require that a particular witness should give oral evidence, observed that: the fundamental objective of committal proceedings must be borne in mind, namely the objective of facilitating a fair trial in the event that the person charged is committed and later stands trial. This may mean that there are substantial reasons for requiring a witness for cross-examination for a proper understanding of the nature of the prosecution case or for an understanding of the basis of a relevant opinion held by a witness. These are instances only and are not exhaustive. (at p 11-12) 28 Committal proceedings also enable the evidence upon which the prosecution relies to be tested. That may benefit either or both of the prosecution and the accused. Such proceedings can still play an important role in acting as a filter for cases, which in light of the oral evidence, may reveal deficiencies in the evidence that relates to the offence with which the defendant is charged. Moreover, as I have said, in deciding whether to commit a person for trial, a magistrate is not restricted to a consideration of the offence with which the person was originally charged. 29 Having briefly considered the issue of committal proceedings, reference to the legislative history concerning the power to award costs in such proceedings may also be of some utility. In Acuthan and others v Coates and others (1986) 6 NSWLR 472 Kirby P, with the concurrence of the other members of the court, observed that: Originally, the Crown and its various emanations were not liable for the costs of failed criminal prosecutions. However, this position, burdensome to the individual accused, was amended in 1967 by the inclusion in the Act of s 41A. That section, which was the foundation of the discretion to be exercised by the magistrate, provides relevantly: "(1) The Justice or Justices making any order discharging a defendant as to the information then under inquiry may in and by such order adjudge that the informant shall pay to the clerk of the court to be by him paid to the defendant such costs as to such Justice or Justices seem just and reasonable, (2) The amount so allowed for costs shall in all cases be specified in such order." (at 474) 30 Section 41A(1) of the Justices Act 1902 was amended in 1985 to provide that: (a) when making an order discharging a defendant as to the information then under inquiry; or (b) when committing a defendant for trial for an indictable offence which is not identical in all respects to the indictable offence with which the defendant was charged , may, in and by an order made by the Justice or Justices (which, in the circumstances referred to in paragraph (a), may be the same order as the order discharging the defendant) adjudge that the informant shall pay to the clerk of the court to be paid to the defendant such costs as to the Justice or Justices seem just and reasonable. (emphasis added) 31 In Fosse v DPP and another, (1989) 16 NSWLR 540 Smart J referred, in discussing those amendments, to the Second Reading Speech of the Attorney-General. The following extract is taken from that Speech: At present, under section 41A, a magistrate may only make an order for costs against an informant after committal proceedings where the defendant is discharged from the information before the Court. That is where there is no committal for trial. The amendment to that section will enable a magistrate to award costs against an informant even where the defendant is committed for trial. This will be on those occasions where the committal charge is not the same as the particular offence on which the person was brought before the court. The present provision, because of its limitations, is able to cause serious injustice in some cases. For example, in the "Greek Conspiracy" case, as it is commonly called, some of the defendants, after a notoriously protracted hearing, were finally committed on charges very different to those initially brought against them. Some of the defendants suffered serious financial hardship as a result of the prosecution, yet they had no redress, by way of costs, against the informant. The amendment rectifies this situation. It is not envisaged that the power will be exercised in many cases . A magistrate will only order costs where it is just and reasonable to do so. It is a matter for the magistrate's discretion in the circumstances of the particular case. (The Hon. TW Sheahan Attorney-General, Legislative Assembly Debates 26 November 1985 at 10611) (emphasis added). 32 In referring to the Minister's Speech, I have not lost sight of the limitations upon the use to which such material can be put: Harrison v Melhem (2008) 72 NSWLR 380. 33 The section in its present form was introduced in 2003. 34 In Fosse v Director of Public Prosecutions [1999] NSWSC 367 Wood CJ at CL made the following observations about the scope of s 81(4)(d) of the Justices Act which is in identical terms to s 117(1)(d) of the Criminal Procedure Act. His Honour said "the onus rested on [the applicant] to bring the case within an exception to the general rule laid down by the section that costs are not to be awarded in favour of a defendant to proceedings in the Local Court". His Honour then said: There is no entitlement to costs as of right in criminal proceedings, the common law principle historically being that the Crown neither pays nor receives costs: Latoudis v Casey (1990) 170 CLR 534 and Le Boursicot (1994) 79 A Crim R 549.

In Latoudis Mason CJ said that this rule could not survive once courts of summary jurisdiction were given a statutory discretion to award costs in criminal proceedings. That discretion, however, is exercisable only within the limits provided by the relevant statutory provision, in this case S 81(4) which provides that costs are not to be awarded in favour of a defendant unless one of the four circumstances specified is shown to exist. Subsection (4) was added after Latoudis and it negatives the majority view, in that case, that generally when a prosecution fails an order should be made that the defendant's costs be paid by the prosecution. …

In relation to S 81(4)(d) [the Magistrate] correctly identified that the defence had to establish something about the conduct of the proceedings being an "exceptional circumstance" other than some matter mentioned in subsections (a)(b) or (c) of S 81(4), to make it just and reasonable for the plaintiff to have his costs. In that regard the mere fact that the proceedings were resolved in his favour was not enough. There had to be something in relation to the manner in which the proceedings were conducted that had led to it being just and reasonable for a costs order to be made . (pars 20-21, 30) (emphasis added) 35 His Honour's approach was followed in ASIC v Farley and another (2001) 51 NSWLR 494 and in Dong v Hughes [2005] NSWSC 84 in which Levine J concluded "that the legislative intent behind s 41A(2A) of the Justices Act was to severely restrict the discretion to award costs against the prosecution" (at para 38). 36 The magistrate quite properly referred to the fact that "particulars are necessary as a matter of procedural fairness". In Kirk v Industrial Relations Commission Kirk Group Holdings Pty Ltd v Workcover Authority of New South Wales [2010] HCA 1 the High Court observed that: The common law requires that a defendant is entitled to be told not only of the legal nature of the offence with which he or she is charged, but also of the particular act, matter or thing alleged as the foundation of the charge. In John L Pty Ltd v Attorney-General (NSW , it was explained that the older cases established that an information could be quashed as insufficient in law if it failed to inform the justices of both the nature of the offence and the manner in which it had been committed. In more recent times the rationale of that requirement has been seen as lying in the necessity of informing the court of the identity of the offence with which it is required to deal and in providing the accused with the substance of the charge which he or she is called upon to meet. The common law requirement is that an information, or an application containing a statement of offences, "must at the least condescend to identifying the essential factual ingredients of the actual offence". These facts need not be as extensive as those which a defendant might obtain on an application for particulars. In Johnson v Miller , Dixon J considered that an information must specify "the time, place and manner of the defendant's acts or omissions". McTiernan J referred to the requirements of "fair information and reasonable particularity as to the nature of the offence charged ". (at para 26) (footnotes omitted) 37 In that context, his Honour referred specifically to s 175(3) of the Criminal Procedure Act which provides that: A court attendance notice must do the following: (a) describe the offence, (b) briefly state the particulars of the alleged offence. 38 That provision sets out the purpose and functions of a CAN. It does not however address the issue which falls for determination in this case. I note in passing that a failure to comply with s175(3)(b) will not render invalid a conviction obtained in proceedings commenced by way of a CAN: Knaggs v Director of Public Prosecutions (NSW) and another (2001) 170 A Crim R 366. See also Doja v R [2009] NSWCCA 303. 39 His Honour, in a footnote to his reasons, cited King v The Queen (1986) 161 CLR 423 as authority for the proposition that "[I]f an offence was defined merely as the description of the offence, without particulars, it could not punishable by indictment". Counsel for the respondent did not seek to draw my attention to any part of the High Court's decision which might provide support for the proposition which his Honour advanced. 40 Be that as it may, the essential question however is whether, following the amendments, each of the offences was "not the same as the indictable offence the subject of the court attendance notice". It is convenient to deal with Sequence 1 as being representative of the issue which falls for determination. As I have said, that offence was prosecuted pursuant to s 1309(1) of the Corporations Act and was described as "an officer knowingly give information that is false or misleading". The offence was still described in that fashion in the amended CAN. Furthermore, the provision which it was asserted had been infringed remained the same as did the occasion upon which it is said that the impugned conduct had occurred. Moreover, the essential allegation namely, that the defendant permitted the making available of information to ASX in the company's Half-Yearly Report for the period ending 31 December 2003 that was false or misleading, remained unchanged. On the other hand, whereas it was originally asserted that certain matters (which were particularised) were omitted from the Report which rendered the information misleading in a material respect, it was asserted following the amendments that certain matters (which were also particularised) were false and misleading. Nevertheless, it is to be observed that the amended particulars still included a reference to what was said to be an omission, namely that the two major shareholders of the company, Zenith and ACN, had not paid cash for the shares issued to them. In any event, the consequence of the amendments was merely to effect a change concerning some aspects of the factual substratum upon which the appellant sought to establish its case. Accordingly, whilst the physical and fault elements of the offence remained essentially the same, there was some alteration in the manner in which it was alleged that the offence had been committed. 41 I have come to the view that what occurred does not permit the conclusion that Sequence 1 was "not the same indictable offence" following the amendments. The particular provision under consideration must be interpreted according to the ordinary meaning that is to be attributed to the actual words which appear in the statute. Proper regard must also be paid to the statutory context in which the words appear and such judicial consideration of them as there may have been. A literal reading of the phrase "not the same indictable offence" clearly enough contains no reference to the question of particulars. In my view, his Honour's conclusion requires the reading of words into a perfectly well understood English phrase that simply do not appear there. Parliament could have made provision for the inclusion of such words had it chosen to do so. I should also indicate that my attention was not directed to any authority which might provide support for his Honour's interpretation of the provision and, in particular, for his conclusion that "an indictable offence the subject of a court attendance notice contains a description of the offence and the particulars and an offence is so defined" (my emphasis). 42 I have already adverted to the terms of s 41A(1)(b) of the Justices Act which was in existence until 2003. That provision enabled a magistrate to award costs "when committing a defendant for trial for an indictable offences which is not identical in all respects to the indictable offence with which the defendant is charged". The words which I have highlighted do not appear in the present provision. The previous form of words, in my view, posits a different test from the current wording which, as I have said, relates to an indictable offence which is "not the same indictable offence". The difference between the two tests is not insignificant and suggests a narrowing of the basis upon which an applicant may have entitlement to an award of costs. The fact that Parliament chose to extend the ambit of s 116(1)(b), in order to create an entitlement for the first time for a person who is committed for sentence to an award of costs, may also tend to suggest that the amendment to that part of the provision which is currently under consideration resulted from a deliberate advertence on the part of the legislature to this issue. 43 I have also already referred to the fact that his Honour acceded to the appellant's application to amend the CANs. Section 22(1) deals with the consequences of an amendment and provides that: (1) If any indictment is amended, a note of the order for amendment is to be endorsed on the indictment, and the indictment in its amended form is to be treated as the indictment for the purposes of the trial and all proceedings in connection with or consequent on the trial. 44 Section 15(2) of the Criminal Procedure Act provides that an indictment includes a CAN. A fair reading of s 22(1) lends further support for the proposition that the amendment to the CAN did not have the consequence that the offence was "not the same". 45 There are many offences in the criminal calendar which can be committed in more than one fashion. Likewise there are many instances in which one and the same offence can be committed notwithstanding the fact that the requisite mental element required to establish it may be constituted by different states of mind. To take but one example, the offence of murder can be committed with either an intention to kill or to inflict grievous bodily harm or with reckless indifference to human life or in circumstances which are commonly described as "felony-murder". To change or amend the basis upon which a particular case is prosecuted from say, one involving an intention to kill to one involving reckless indifference or "felony-murder", cannot be said to alter the fact that the offence which is charged still remains one of murder. That would be so even if the factual basis upon which the case was conducted was to change. Furthermore, there are a number of examples of offences in which, like the one under consideration, the conduct which is impugned can be constituted by either an act or an omission. Indeed, the offence of murder provides one such example. It does not appear to me that a change in the presentation of a case from one of those alternatives to the other has the consequence that the offence is "not the same offence". 46 The legislature could also have provided that an entitlement to costs arises in circumstances in which the prosecution has "substantially changed its case" during the course of the hearing. Without suggesting for a moment that the change in this case was of that magnitude, the simple fact of the matter is that Parliament has not chosen to introduce a provision in those terms. And yet his Honour, in effect, proceeded upon the basis that that is what the provision in question means. In my view, in doing so his Honour attributed to the provision a reach that was simply not warranted by its terms or indeed by the mischief which was sought to be addressed by it. 47 Accordingly, I have reached the conclusion that the circumstances of the present case were not such as to attract the operation of s 116(1)(b) of the Act because it cannot be said that the indictable offences in respect of which the respondent was committed for trial were not "the same as the indictable offence(s) the subject of the [CANs]". It follows that his Honour fell into error and that the appeal must succeed. 48 In view of that conclusion, it is strictly unnecessary to consider the second question, which relates to his Honour's determination that the requirements of s 117(1)(d) of the Act had been met. 49 In Halpin v Department of Gaming and Racing [2007] NSWSC 815 Hall J had to consider the scope of a provision which was in the same terms as s 117 of the Act. His Honour said, in respect of the issue presently under consideration, that: The expression "exceptional circumstances" is a broad one. Without it being necessary to define its outer limits, the question essentially is whether or not there was any relevant conduct by the prosecutor which would make it "just and reasonable" to award costs in favour of the plaintiff. In Caltex Refining Co Pty Ltd v Maritime Services Board of NSW (1995) 36 NSWLR 552; 78 A Crim R 368, the Court of Criminal Appeal determined that the requirement that an order be "just and reasonable" involves both a fair hearing and that the terms of the order finally made are reasonable, per Sully J at 561:- "…the words of the section require that an order for the payment of costs pursuant to s.52 of the [Land and Environment Court Act 1979] must be both just and reasonable. The order must be just in terms of the way in which it has been reached; and it must be reasonable in its actual terms." [paras 65-6] 50 Halpin was followed in Port Macquarie - Hastings Council v Lawlor Services Pty Limited [2008] NSWLEC 75. In considering s 257D(1)(d) of the Criminal Procedure Act which is in identical terms to s 117(1)(d) of the Act, Pain J said that "'Exceptional' is not defined in the CP Act and is potentially of broad ambit. Its ordinary meaning is 'something out of the ordinary' or 'unusual'" (at 75). 51 Ordinarily the question of whether "exceptional circumstances" existed would not give rise to a question of law because the decision under review would normally only involve either an evaluative judgment or the exercise of a discretion. On the other hand, what arises for consideration in the present case is the interpretation of the expression "other exceptional circumstances relating to the conduct of the prosecutor, [such that] it is just and reasonable to award costs". It is axiomatic that that expression must be read in the context of the whole of s 117(1), the earlier parts of which all suggest that there should be a degree of "mala fides" or at least some form of unreasonable conduct on the part of the prosecutor. The "other circumstances" to which reference is made, must themselves be "exceptional" in the sense in which that expression is generally understood. Amendments to an indictment or a CAN are, as I have indicated, not only expressly permitted by Parliament but are unlikely to be an unusual occurrence, particularly in committal proceedings. His Honour nevertheless concluded that it was the nature and timing of the amendments to the particulars contained in the CANs which constituted "exceptional circumstances". His Honour did not however identify what it was about the nature and timing of the amendments that warranted that conclusion. Nor did his Honour provide any explanation as to what it was about the "manner in which the proceedings were conducted that led to it being just and reasonable for a costs order to be made". See Wood CJ at CL in Fosse (supra). Moreover, his Honour's entire approach was infected by the error which I have identified in respect of the jurisdictional question. 52 That said, I do not have to reach a concluded view in relation to the second issue which was raised by the appellant. 53 No submission was advanced by either party upon the issue of costs. I shall, in due course, entertain submissions upon that question should it become necessary to do so.

2 Set aside the Magistrate's decision awarding costs to the respondent. ******

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.

CITATION : Commonwealth DPP v Barnes [2010] NSWSC 1040

Acuthan and others v Coates and others (1986) 6 NSWLR 472 ASIC v Farley and another (2001) 51 NSWLR 494 Collector of Customs v Agfa-Gevaert Ltd (1995) 186 CLR 389 Doja v R [2009] NSWCCA 303 Dong v Hughes [2005] NSWSC 84 Fosse v DPP and another, (1989) 16 NSWLR 540 CASES CITED : Fosse v Director of Public Prosecutions [1999] NSWSC 367 Halpin v Department of Gaming and Racing [2007] NSWSC 815 Hanna v Kearney (NSWSC, 28 May 1998, unreported) Harrison v Melhem (2008) 72 NSWLR 380 King v The Queen (1986) 161 CLR 423 Kirk v Industrial Relations Commission Kirk Group Holdings Pty Ltd v Workcover Authority of New South Wales [2010] HCA 1 Knaggs v Director of Public Prosecutions (NSW) and another (2001) 170 A Crim R 366 Port Macquarie - Hastings Council v Lawlor Services Pty Limited [2008] NSWLEC 75

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