Appeal and new trial - Conviction for false statement made during ASC examination - Magistrate found to have erred - Application of proviso on appeal not - Case remitted to Magistrate - Turns on own facts

Australian Securities Commission Act 2001, s 64, s 64(1)(b),

Justices Act 1902 (WA), s 119(1)(b), s 184, s 187, s 199(1)(b), s 199(1)(d), s 199(3), s 206A(4)(a), s 206A(4)(d)

Respondent : Commonwealth Director of Public Prosecutions

Devries v Australian National Railways Commission (1993) 177 CLR 472

Mifsud v Campbell (1991) 21 NSWLR 725

1 MURRAY J: I agree with the reasons and conclusion of Parker J. There is nothing I could usefully add. I would grant leave, allow the appeal, quash the conviction and remit the hearing of the complaint to the learned Magistrate, Mr Thobaven SM, to be further heard and determined according to law.

2 PARKER J: This is an application for leave to appeal from a decision of Pullin J (SJA 1048 of 2002). The full merits of the appeal were argued on the application for leave.

3 The applicant, George Michael Gelavis, was convicted by Mr P Thobaven SM in the Court of Petty Sessions at Perth on 8 March 2002 on a complaint of an authorised officer of the Australian Securities and Investment Commission ("ASIC") that, on or about 18 August 1997, "in the course of an examination conducted pursuant to s 19 of the ASC Law he made a statement that was false in a material particular contrary to s 64(1)(b) of the ASC Law".

4 The conviction followed a quite lengthy hearing that extended over the period 21 - 23 March 2001, 26 - 27 September 2001 and 7 - 8 November 2001. On 20 March 2002 the appellant was fined $3,000.

5 Leave to appeal from that decision was granted by White J on 15 April 2002. The appeal was heard by Pullin J on 12 August 2002 and in his decision, which was delivered on 30 August 2002, Pullin J dismissed the appeal against the conviction. On that day Pullin J ordered that an application of the applicant for leave to appeal from the decision should be heard by this Court, together with the full merits of the appeal. The grounds of appeal are:

"1. Having upheld Ground 3 of the Appeal, his Honour should have held that there was insufficient evidence from which it could be concluded beyond reasonable doubt that the Appellant knew, when he was asked on 19 August 1997:

'when you first found out about this particular matter was that also the first you found out there was an account called Bohemia at Eyres Reed?' ('the Question'),

Alternatively, his Honour should have held that the question of whether the Appellant knew the Answer was false required an assessment of the Appellant's credibility; that the Magistrate's view as to his credibility had been affected by his incorrect conclusions from the evidence referred to in Ground 3; and that therefore the decision should be quashed and the matter sent back for re-trial before another magistrate.

2. In finding that the only rational inference reasonably open was the Answer was false to the Appellant's knowledge when he gave it, his Honour erred in that:

(a) he failed to take into account the evidence of what the Appellant said a little later in the interview, from which it was reasonable to infer that (as the Appellant said in evidence) he had been confused, or had misunderstood, the Question when he gave the Answer, that he had not sought to conceal the fact that he had opened an account for Bohemia Food Distributors P/L some years earlier, but did not believe that to be the 'Bohemia account' used by Conboy;

(b) in relying on the evidence that the Appellant had signed a Change of Address form before 16 April 1997, his Honour failed to take into account the evidence from which it might reasonably be inferred that the Appellant had signed the Form in haste and without having realised, or later recalled, that it related to the account which he had opened earlier (and which he believed to be Bohemia Food Distributors P/L; and

(c) in relying on evidence of answers given by the Appellant in an interview on 30 July 1997, his Honour failed to take into account that the Appellant was shown a trading record of the account at the interview, and that his answers were explicable as having been based on the information in that record, rather than based on some prior knowledge. His Honour should have treated the Appellant's evidence, to the effect that he was not certain where he got the information on which he based his answers, as neutral on this issue, given the lapse of time between the interview and the trial."

6 Written particulars of the complaint had been provided. The particular critical for present purposes was in par (c) of the particulars. The material parts were:

"(c) In the course of the section 19 examination the defendant ... claimed to have no knowledge of the Bohemia account at Eyres Reed or the trades in question until being contacted by the ASC in relation to the matter.

In particular, Mr Hackett asked the defendant the following question ...

'Ok. When you first found about this particular matter, presuming - was that also the first time you found out that there was an account called Bohemia at Eyres Reed?'

Mr Hackett's reference to 'when [Mr Gelavis] first found out above this particular matter' was a reference to when Mr Gelavis was first contacted by the ASC in relation to the suspected insider trading in shares in SMS, on or about 30 July 1997.

(d) The defendant answered Mr Hackett's question:

It was this answer which was said to be the statement that was false in a material particular.

7 While the issues raised by the grounds of appeal are wide ranging it is my view that the outcome of the application for leave, and the appeal itself, may be determined in this case on a relatively narrow basis, and without the need to consider all of the issues raised.

8 It is sufficient for the purposes of this application to outline some of the factual context which I do essentially by reference to the reasons of Pullin J and by quoting from those reasons.

"It is not in dispute that an ASC investigator 'first contacted' the appellant 'in relation to the suspected insider trader in SMS' on 22 July 2002, and so the reference in par (c) of the particulars to a date 'on or about 30 July 1997' was understood at the hearing before his Worship, and at the hearing of this appeal, to be a reference to 22 July 2002. [The hearing of the application before this Court proceeded on the same factual basis]. The appellant gave evidence before his Worship that that was his understanding of the question on 18 August 1997 which led to the allegedly false statement.

Expressed in other words, the charge therefore alleged that the appellant's statement that it was 'absolutely correct' that he found out for the first time on 22 July 1997 about the Bohemia Pty Ltd account at Eyres Reed on which trading in SMS shares took place, was materially false.

The main players in these events were the appellant, a Mr Damian Conboy and Mr P G Sharbanee. Mr Conboy and the appellant were friends, and they resided at the same house in April 1997. Mr Conboy worked at the stockbrokers then called Eyres Reed Ltd ('Eyres Reed') from at least 1992 through until 1994. Mr Conboy began working as an operator ... but later he worked as a client adviser. Mr Sharbanee began working at Eyres Reed in 1993.

On 16 February 1993, a 'new account application' was filled out for Bohemia Pty Ltd. This is a document generated within Eyres Reed's office. Mr Conboy's signature appeared against the 'adviser's signature' and was approved by a Director of Eyres Reed. The address shown on the form was Unit 1, 71 Howard Street, Osborne Park. This was the address of the [applicant's] family business. The [applicant] admits that he caused this account to be opened and that he traded on the account in 1994. The transactions in 1994 were recorded in records within Eyres Reed's office. There was then a break, and the next transaction started in March 1997.

There were a number of buy and sell orders between March 1997 the end of July 1997. In particular, on 3 and 4 April 1997, the statement of transactions records that Eyres Reed bought on Bohemia Pty Ltd's account, 300,000 Stanley Mining shares.

Eyres Reed then sold on Bohemia Pty Ltd's account, the 300,000 Stanley Mining shares realising just over $270,000 on 9 April 1997, and sold some Max Resources shares realising just over $33,000 on 3 April 1997. Mr Sharbanee at Eyres Reed effected all of these 1997 transactions on behalf of Bohemia Pty Ltd. Mr Conboy gave the instructions to Mr Sharbanee to do so. On 2 May 1997, the Eyres Reed Statement of Transactions reveals that the credit balance in the account was reduced to zero. This happened because an Eyres Reed cheque for the balance of $22,629.37 was drawn in favour of Bohemia Pty Ltd. It was paid into an account styled by Bohemia Food Distributors Pty Ltd at the National Australia Bank. It is not in dispute that this account was an account of which the [applicant] was a signatory. A cheque was drawn on that account of $18,100 made payable to 'Bank Cheque payable to Damian Conboy' and signed 'G Gelavis'. It is not in dispute that this cheque was drawn by the [applicant]. On the same day, the National Australia Bank drew a bank cheque for $18,100 payable to Damian Conboy.

Before these transactions between March and May 1997 took place, Mr Conboy said that he wanted the address on the Bohemia Pty Ltd account changed to his box office box number. Mr Shardanee told Mr Conboy that a change of address form would have to be signed. Mr Shardanee then caused such a form to be generated and sent in the mail. The change of address form was completed and lodged with Eyres Reed Ltd. This was dated 16 April 1997 and processed within Eyres Reed's office on 29 and 30 April 1997, and it showed that in lieu of Unit 1, 71 Howard Street, Osborne Park, the new address of Bohemia Pty Ltd was to be PO Box 1642, Subiaco, WA. This was an address of Mr Conboy. There was a fax number shown on the form, which was the fax number of a facsimile machine in the Votel office where the [applicant] worked. The facsimile machine was located outside the office of Mr Conboy's brother, Paul Conboy, who also worked at Votel with the [applicant]. The evidence was that Mr Conboy 'used to come past the office (of Votel) quite a bit' and that he 'used the offices (of Votel) as a base for a period of time as well'. The mobile phone number on the form was a number of Mr Conboy's mobile. The fixed telephone number was shown on the form. This was the number of the residence where Mr Conboy and the [applicant] lived in Leederville. It is not clear when the signed change of address form was received. Although it is dated 16 April 1997, Mr Sharbanee said that he would have been surprised if it came in after the Bohemia Pty Ltd account was reactivated in March 1997.

The change of address form was signed by the [applicant]. He denied on oath that the signature was his, and before the Magistrate there was expert evidence on the issue which led to a finding by the Magistrate, which is not now challenged, to the effect that the signature was that of the [applicant].

I should also mention, a little out of chronological order, that at another firm of stockbrokers called Todd Partners, the [applicant] opened an account with that broker in the name of Bohemia Pty Ltd. About a week later, on 28 November 1996, the [applicant] then signed a chess sponsorship agreement with Todd Partners showing the name Bohemia Food Distributors Pty Ltd.

Sometime before 22 July 1997, the ASC began enquiring into share trading in respect of Stanley Mining. The ASC was investigating a spike in the share price. The transactions on the Eyres Reed Bohemia Pty Ltd account attracted its attention.

On 22 July 1997, the appellant received a telephone call from Ms Brennand, an investigator with the ASC. Neither Ms Brennand nor Mr Gelavis could clearly remember the details of the call. It was not in dispute, however, that Mr Gelavis was told that the ASC were enquiring about trading on the account of Bohemia Pty Ltd in relation to Stanley Mining shares.

On or about 22 July 1997, after speaking to Ms Brennand, the [applicant] spoke to Mr Conboy by telephone and in person, and gained some information about the account, but as will appear later in these reasons he was quite uncertain about some of the details of the discussions.

On 30 July 1997, the [applicant] was interviewed at the offices of ASC. The interview was conducted by a Mr Hackett and Ms Brennand, both whom were investigators working for the ASC. The [applicant] was shown an Eyres Reed Statement of Transactions on the Bohemia Pty Ltd account, first line of which showed an opening balance of zero and the date 1 October 1996 against it ... It also showed some transactions in March 1997, and then it revealed the transactions starting on 3 April 1997 in relation to Stanley Mining, the sale of those shares and some other transactions, and showed the payment of the cheque for $22,629.37 on 2 May 1997."

9 During the interview on 30 July 1997 the applicant gave answers to a number of questions that were put to him. He later admitted that some of the answers were deliberate untruths, although some answers were correct.

10 In brief summary, the appellant said to the effect that "he had placed the buy orders for Stanley Mining shares (which was untrue); that the account was opened in 1992 (which was approximately true); that he was the only person who traded on the account (which was untrue); that he decided to purchase Stanley Mining shares on 3 April 1997 (the date was correct); that he held no Stanley Mining shares on 30 July 1997 (which was correct); and that Eyres Reed gave credit on the basis of Max Resources scrip (which the [applicant] did not allege was incorrect)."

11 Following a former notice under s 19 of the ASC Law, the applicant appeared before three officers of the ASC on 18 August 1997 for examination on oath. Before that examination commenced, the investigators had discovered that there was not a company Bohemia Pty Ltd. However, the applicant was a Director of Bohemia Food Distributors Pty Ltd before August 1996, which company had been renamed Fortius Pty Ltd sometime before August 1996.

12 Very early in the examination, and soon after he had been sworn, the applicant read the contents of a statement he had prepared to "assist" the ASC. In par 2 of that statement, he said that on or about 2 August 1997 the ASC's Donna Brennand telephoned him and wanted him to appear at an informal interview in relation to trading by Bohemia Pty Ltd in Stanley Mining shares as there was concern at possible insider trading. It became common ground at the trial before the Magistrate, the appeal before Pullin J and on this application, that the reference to 2 August 1997 in that statement should have been a reference to the conversation between the applicant and Ms Brennand on 22 July 1997.

13 In this statement the applicant asserted he had no knowledge of the trade by Bohemia Pty Ltd in Stanley Mining shares but, after Ms Brennand had spoken to him, he immediately telephoned Mr Conboy and discussed the matter. He asserted that he had lied at the 30 July 1997 interview to try and assist Damian Conboy in the hope that "attention by the ASC would all go away". He further asserted that he had discovered that Mr Conboy had opened an account at Eyres Reed in the name of Bohemia Pty Ltd and had conducted the trade himself in that account but that this had not occurred with his authority and that he had no knowledge whatever of the trade in Stanley Mining. He also stated that he had not received any documentation in relation to the dealing or the account at Eyres Reed and the first time he saw any documentation was at the initial interview at the ASC. The question, the subject of the complaint and the particulars. and the applicant's answer, occurred later in the course of that formal examination.

14 Five grounds of appeal were pursued before Pullin J. His Honour dismissed three of the grounds but upheld grounds 3 and 5. It is unnecessary to detail again the nature of the dismissed grounds. To the extent that issues concerning them are agitated again on this application I would simply observe that nothing advanced persuades me that Pullin J was in error in these respects.

15 Ground 5 alleged an error of law by the learned Magistrate in concluding that the answer given by the appellant in the course of the formal examination on 18 August 1997 was "material". In his reasons for decision the learned Magistrate referred to the informal meetings and the formal examination which were held respectively on 30 July 1997 and 18 August 1997 in the penultimate paragraph of his reasons for decision, but expressed his final conclusion in the last paragraph of his reasons in the following terms:

"In the end I am satisfied beyond reasonable doubt that when he went to the s 19 examination on 18/8/97 he was aware of the Bohemia Pty Ltd account at Eyres Reed and that his answer was untrue."

16 While 18 August 1997 was the date of the formal examination, as Pullin J correctly observed:

"80. This ground alleges that the learned Magistrate erred as a matter of law in concluding that the complaint against the appellant was as to whether, in the course of an examination conducted pursuant to s 19 of the ASC Law, the [applicant] was aware of the Bohemia Pty Ltd account at Eyres Reed on 18 August 1997, when the complaint against the [applicant], as particularised and understood by the parties, was that the appellant knew of the Bohemia Pty Ltd account at Eyres Reed prior to 22 July 1997. In my view, his Worship did ask himself the wrong question. The Magistrate therefore reached a conclusion about the [applicant's] knowledge in relation to the wrong date."

17 In my respectful view, his Honour was correct in his appreciation of the critical factual issue for determination by the Magistrate. A finding as to the appellant's knowledge of the account as at 18 August 1997 was not, in fact, the critical issue. Because of possible intervening events, at least when considered in isolation as the learned Magistrate appears to have done, his knowledge as at 18 August 1997 provided no basis for a conclusion as to the appellant's knowledge prior to 22 July 1997.

18 Ground 3, in turn, depended in part on the error identified in ground 5. The learned Magistrate concluded, as a matter of inference, that the appellant was aware at 18 August 1997 of an account called Bohemia at Eyres Reed because of:

• the cheque signed by the applicant on 2 May 1997, and

• discussions of the applicant and Sharbanee at the eCucina restaurant in the period 30 July 1997 - 18 August 1997.

Accepting, as I do, that the critical time for this knowledge was before 22 July 1997, it will be immediately apparent that the discussions with Sharbanee occurred after that date and, therefore, were of no direct relevance to the critical factual issue.

19 With respect to the cheque signed by the applicant on 2 May 1997, Pullin J concluded that there was no evidence that the applicant knew the source of the relevant funds and, in particular, whether they had come from Eyres Reed rather than from Todd Partners where the other account in the name of Bohemia was in operation. In the view of Pullin J, the learned Magistrate's reliance on the drawing of this cheque involved what was he considered to be speculation that the applicant must have questioned the process leading up to the deposit of the funds on which the cheque drew.

20 In my respectful view, at least when this issue is considered in isolation as the learned Magistrate's reasoning appears to indicate, Pullin J's views in this respect are well founded. It was on the basis indicated that Pullin J concluded that the evidence as to the signing of the cheque in truth was not sufficient to establish that the applicant then knew of the trading on the Bohemia account at Eyres Reed.

21 Having found those two grounds established, Pullin J went on to consider the merits of the remaining evidence in the case "disregarding the evidence about the cheque and disregarding the eCucina meeting". He did so on the basis that the appeal to him was by way of rehearing; Canale v Bayens [2001] WASCA 383. He expressly directed himself that he could dismiss the appeal notwithstanding that any point raised might be decided in favour of the present applicant, if he considered that no substantial miscarriage of justice had occurred; Justices Act 1902 (WA), s 119(1)(b).

22 While his reasons do not expressly say in so many words that he concluded that there had been no substantial miscarriage of justice, his reasoning clearly enough demonstrates that this was the view he took and that this was the basis for his decision.

23 His Honour was persuaded that, even disregarding the two pieces of evidence the subject of the successful ground 5, there was "a strong prosecution case". His Honour continued:

"My own assessment of the evidence leads me to the conclusion that a reasonable Magistrate would have decided beyond reasonable doubt that the [applicant] was guilty of the charge."

24 In the course of a detailed review of the evidence which his Honour undertook in his reasons and which led his Honour to that conclusion, his Honour appears to have drawn on, and applied, more than one of the factual findings made by the learned Magistrate in areas of factual dispute, namely that the appellant was not misled into thinking that the Eyres Reed Bohemia account was a new one opened by Mr Conboy in 1996 by the fact that the Statement of Transactions he was shown referred to transactions from 1996 onwards, and that the signature on the change of address form was in fact that of the applicant. This apparent reliance on the factual findings of the Magistrate is of concern, as I am not able to be satisfied from the reasons of the learned Magistrate that the views he formed as to the credibility of the applicant in relation to these issues were not affected, at least in part, by the errors in his reasoning identified in ground 5.

25 There is a further basis for concern. One which is more direct and of significance. It is clear from his Honour's reasons on the issue of no substantial miscarriage of justice, that his Honour drew significant inferences, including inferences as to the appellant's knowledge of material matters, in areas of factual controversy. Most of his Honour's factual findings involved forming, and relying on, a view of the credibility of the applicant in respect of the issue being considered.

26 As an example of these matters, his Honour concluded by inference that, by virtue of the applicant's "elaborate denial" that the signature on the change of address form was his, a denial which the Magistrate had found to be false, "no reasonable Magistrate would have inferred that the applicant did not appreciate that it was an Eyres Reed document, or that he paid no regard to it, or that he had simply forgotten about it. In my respectful view, those suggested inferences were not reasonably open ...".

27 His Honour had only the written record on which to base his conclusion. I entirely agree with his Honour that, on the written record, the case against the applicant appears to be quite compelling, in particular because of the signed change of address form and the signing of the cheque, but by no means simply because of those facts. From the written record, there appear to me to be a number of aspects of the facts which, together, form a most secure factual basis on which a finding of guilt might be reached.

28 It is my concern, however, that as issues of credibility are very much involved at most stages in the process of factual findings in this case, it is unsatisfactory and potentially unsafe to reach factual findings simply on the written record and without the advantage of hearing and seeing the witness.

29 In particular, to determine whether or not there has been a substantial miscarriage of justice, it is necessary to reach findings on a proper evidentiary basis (ie avoiding the errors identified in Grounds 3 and 5) as to the state of mind of the applicant at the relevant time concerning the Eyres Reed account opened in 1992 or 1993 and the imagined 1996 account, and as to which of these the applicant was referring when he gave the critical answer. Given the evidence of the applicant and the other evidence relevant to these matters, it is essential to make findings as to the credibility of the applicant to determine these matters.

30 For these reasons I am led to the view that the proper course which should have been followed in this particular case, grounds 3 and 5 having been made good, was to remit the case to the learned Magistrate for further consideration of the facts and of his ultimate finding as to guilt or innocence after duly correcting the errors identified in the reasons of Pullin J and anything which flowed from that.

31 While, for the reasons indicated, that may well lead to a fresh affirmation of the conviction, in my respectful view, this is a case in which it is necessary for the learned Magistrate to make the necessary factual findings, rather than to attempt on appeal to do so from the written record. The learned Magistrate will do so inter alia in light of his appreciation of the witnesses formed in the course of their evidence before him. These witnesses include the applicant. In this particular case, this is a dimension which in my view cannot be properly ignored. It will be for the learned Magistrate to determine whether or not he is satisfied to the required standard that the prosecution has established its case.

32 In reaching this view I have taken into account the applicant's submission that there should be a full retrial before a different Magistrate. While I appreciate that the Magistrate has made and expressed findings which are adverse to the applicant and involve credibility, it appears to me that, in the particular circumstances of this case, it does not follow from that that the Magistrate is not in a position to correct the errors identified by reference to Grounds 3 and 5, to re-approach impartially the evidence according to law and to make fresh and proper findings on that basis. I do not see that this is justification for requiring a full rehearing.

33 Given the views I have reached in this respect, it is unnecessary for me to give detailed consideration to the other matters advanced in support of the application for leave to the appeal.

34 There is, however, one other aspect on which it is desirable to make some brief observations in view of the tenor of some submissions put to us and having regard to one possible understanding in some of the reasoning of Pullin J.

35 This is a case which, for its determination, turns heavily on inferences. If it be the case that, considered in isolation, the evidence concerning a particular factual issue is not capable of supporting beyond reasonable doubt a finding adverse to the applicant on that issue, it does not necessarily follow that the evidence relating to that issue must be entirely disregarded when determining the ultimate issue of the applicant's guilt or innocence of the offence charged.

36 Save where a fact is an indispensable intermediate step in the reasoning process towards an ultimate inference of guilt of the offence charged, it is not necessary that the fact itself be established beyond reasonable doubt. Save for such an indispensable intermediate fact, in a case resting upon circumstantial evidence, the trier of fact may properly draw an inference of guilt from facts, ie individual items of evidence, which, in themselves, need not be proved beyond reasonable doubt. It is the elements of the offence charged which must be established beyond reasonable doubt.

37 As was said by Dawson J, Mason CJ, Toohey and Gaudron JJ agreeing, in Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573 at 585, following a review of relevant principles and decisions at 578 - 585:

"The judgments in Chamberlain v The Queen [No 2] [1984] HCA 7; (1984) 153 CLR 521, do not support the proposition that, in a case resting upon circumstantial evidence, the jury may only properly draw an inference of guilt upon facts - individual items of evidence - proved beyond reasonable doubt. Still less does the case establish that a direction in those terms should be given to a jury. Of course, it is recognized in Chamberlain that, if it is necessary for the jury to reach a conclusion of fact as an indispensable, intermediate step in the reasoning process towards an inference of guilt, then that conclusion must be established beyond reasonable doubt. But to say as much is to do little more than state a truism. This does not mean that each item of evidence taken into account in reaching that conclusion must, considered separately, be established beyond reasonable doubt."

Further, Dawson J at 584 - 585, referred to a passage from the decision of Deane J in Chamberlain (supra) at 626 - 627, which included the following:

"There is certainly no requirement of the law that the members of the jury must examine separately each item of evidence adduced by the prosecution and reject it unless they are satisfied beyond reasonable doubt that it is correct. Nor is it the law that a jury is in all circumstances precluded from drawing an inference from a primary fact unless that fact is proved beyond reasonable doubt. If a primary fact constitutes an essential element of the crime charged, a jury must be persuaded that that fact has been proved beyond reasonable doubt before he or she can properly join in a verdict of guilty. ... On the other hand, if the guilt of an accused would be established by, or a particular inference against an accused could be drawn from, the existence of any one of two hundred different matters, each of which had been proved on the balance of probabilities, it would be absurd to require that a jury should disregard each of them unless satisfied, either in isolation or in the context of all of the facts, that any particular one of those matters had been proved beyond reasonable doubt."

Dawson J had also referred at 580 to a passage from the reasons of Gibbs CJ and Mason J in Chamberlain at 535:

"At the end of the trial the jury must consider all the evidence, and in doing so they may find that one piece of evidence resolves their doubts as to another. For example, the jury, considering the evidence of one witness by itself, may doubt whether it is truthful, but other evidence may provide corroboration, and when the jury considers the evidence as a whole they may decide that the witness should be believed. Again, the quality of evidence of identification may be poor, but other evidence may support its correctness; in such a case the jury should not be told to look at the evidence of each witness 'separately in, so to speak, a hermetically sealed compartment'; they should consider the accumulation of the evidence."

A little later in those same reasons at 536 Gibbs CJ and Mason J also said:

"It follows from what we have said that the jury should decide whether they accept the evidence of a particular fact, not by considering the evidence directly relating to that fact in isolation, but in the light of the whole evidence, and that they can draw an inference of guilt from a combination of facts, none of which viewed alone would support that inference."

38 Of course, in Shepherd and in Chamberlain, the issue arose in the context of jury trials, but the reasoning is equally applicable to a Magistrate sitting alone.

39 This is a case where the evidence relating to one factual issue may well be seen by the learned Magistrate to have some relevance to the

resolution of a distinct factual issue. The ultimate conclusion as to guilt or innocence, or indeed, should there be one, a finding as to an indispensable intermediate step in the process of reasoning towards guilt, may well be determined from a combination of facts, ie an accumulation of the evidence, in the sense indicated in the passages quoted.

40 These observations may have an application to many aspects of the evidence to be further considered by the learned Magistrate in this case. The authorities do indicate that aspects of the evidence concerning the cheque and the eCucina meeting, ie the subject of ground 5, may nevertheless prove to have some relevance to the decision of the learned Magistrate, notwithstanding the errors identified by Pullin J. It is not necessarily the case, although it is a matter for the learned Magistrate, that no regard should be had at all to the evidence relevant to these two issues in the Magistrate's consideration of the guilt or innocence of the applicant in this case.

41 It is for these reasons that I would grant leave to appeal, allow the appeal and vary the orders made by Pullin J, so that the case is remitted to the learned Magistrate to be further heard and determined according to law and in light of these reasons.

42 EM HEENAN J: The reasons for judgment of Parker J set out the background and the facts which led to the prosecution and conviction of the appellant before the Court of Petty Sessions in Perth for an offence against s 64 of the Australian Securities Commission Act 2001 in that he made a statement that was false in a material particular in the course of an examination conducted pursuant to s 19 of the ASC law contrary to s 64(1)(b) of that law. It is unnecessary, therefore, for me to repeat the details of the allegations against the appellant or the basis of his conviction.

Application for Leave to Appeal to Full Court

43 The present appeal is against the judgment of Pullin J in this Court which dismissed an appeal by the appellant, against his conviction in the Court of Petty Sessions. That was an appeal to a single Judge of this Court pursuant to s 184 of the Justices Act. A further appeal to this Court lies only if leave to appeal is granted under s 206A of the Justices Act. An application for leave to appeal was duly made and, by order made on 23 October 2002, Pullin J directed that that application for leave should be made to the Full Court. The leave application was also heard before us.

Because s 206A(4)(a) and s 187 provide that leave to appeal should be granted unless the Court considers that the appeal is frivolous or vexatious or that the grounds of appeal do not disclose an arguable case, I consider that leave to appeal should be granted on this occasion on the grounds sought. I am satisfied these are arguable.

44 On the appeal from the decision of his Worship Mr Thobaven SM, Pullin J concluded that the appellant had established three of his grounds of appeal by showing that errors had been made by the learned Magistrate in respect of those three issues leading to his conclusion to convict the appellant as charged. As is apparent from the reasons for decision of the other members of this Court, the ultimate decision to be made by the learned Magistrate on the charge, was a decision of fact namely, whether the respondent had proved beyond reasonable doubt that the appellant, in the course of his s 19 examination, made a statement that was false in a material particular. This required proof that the appellant had knowingly made a false statement or, in other words, had consciously stated an untruth. This ingredient of dishonesty was dealt with by the learned Magistrate at first instance by asking himself the question of whether or not the appellant had deliberately told an untruth as charged and the learned Magistrate found that he had. This is, indeed, the characteristic of the false statement which needs to be established in these proceedings and it was correctly recognised at trial and on appeal as the reference to the decision in Mellifont v Attorney General (Qld) [1991] HCA 53; (1991) 173 CLR 289 discloses.

45 The appellant had denied deliberately making any false statement and explained that he had answered certain questions in the belief that they related to one trading account rather than another and that, insofar as those answers were wrong, they were the product of a misunderstanding and mistake on his behalf about the subject matter of those questions. If there had been an honest and reasonable mistake by the appellant about the point of the question leading him to give an answer which he believed to be true but which was objectively incorrect, then because of his mistake there would be no offence committed in that respect. Accordingly, the credibility of the appellant, both generally, and more particularly in relation to his explanation that certain questions had been answered under a mistake was a vital issue for consideration by the learned Magistrate at the trial. To observe the correct approach to the onus of proof in such a situation, it must be expressly recognised that it was always incumbent upon the respondent prosecutor to prove, beyond reasonable doubt, that there had been no honest or reasonable mistake made by the appellant when answering the questions and, that the answers which he in fact gave were deliberately false.

46 In such circumstance all aspects of the case, but particularly the appellant's conduct at the trial and the significance of his other actions and statements become important when the tribunal of fact, the presiding Magistrate, comes to consider whether or not deliberate untruthfulness has been proved as charged.

47 Because Pullin J found the learned Magistrate had made errors of law and fact in coming to his decision, I consider it necessary to examine whether or not these errors may have contributed to, or otherwise affected, his Worship's ultimate decision to reject the explanation given by the appellant by way of defence and to accept that the evidence proved that he had made a deliberately false statement. If these errors affected that ultimate decision then his Worship will have been shown to have reached his conclusion to convict the appellant, at least in part, on an erroneous basis. On the other hand, if the errors of law in fact identified by Pullin J can be seen to be completely isolated from the learned Magistrate's reasons to convict the appellant then there will be scope for the reliance upon the powers conferred on the Court by s 199(1)(b), s 199(3) and s 206A(4)(d) of the Justices Act.

48 There has been no notice of contention filed by the respondent in these proceedings nor did the respondent seek leave to rely on grounds to support the conviction other than those relied upon by Pullin J in the first appeal. The errors which Pullin J concluded had been made by the learned Magistrate, were therefore accepted by the respondent in this further appeal. As found by his Honour they were:

(a) the learned Magistrate wrongly concluded that the complaint against the appellant was as to whether, in the course of an examination conducted pursuant to s 19 of the ASC law, the appellant was aware of the Bohemia Pty Ltd Account at Eyres Reed on 18 August 1997, when the complaint as particularised and understood by the parties, was that the appellant knew of the Bohemia Pty Ltd Account at Eyres Reed prior to 22 July 1997. In this regard the learned Magistrate asked himself the wrong question and therefore reached a conclusion about the appellant's knowledge in relation to the wrong date (this was referred to as ground 5 of the first appeal).

(b) The learned Magistrate erred in relying on evidence that the appellant had signed a cheque on 2 May 1997, together with other facts, to conclude that the only rational inference open to him was that the appellant was aware, at the time of the s 19 examination, of the existence of an account named Bohemia at the firm of Eyres Reed. The finding at the appeal was that the learned Magistrate erred in relying on the evidence about the signing of the cheque to draw an inference that the appellant was aware before 22 July 1997 of trading on the Bohemia Pty Ltd Account at Eyres Reed. This was because there was no evidence that the appellant knew the cheque had come from Eyres Reed rather than from Todd Partners. His Worship was found to have erred when he speculated that the appellant must have questioned the process leading up to the deposit of the funds (this was referred to as ground 3 in the first appeal) and

(c) The learned Magistrate erred in concluding that the fact that the appellant had met and had discussions with one Sharbanee at the E Cucina Restaurant in the period between 13 July 1997 and 18 August 1997 showed that the appellant knew of the trading on the Bohemia Pty Ltd Account before 22 July 1997 (this was also part of ground 3 in the first appeal).

49 With all respect, I cannot see how these errors can be dissociated from the learned Magistrate's ultimate conclusion about the credibility of the appellant and the critical issue of whether it had been shown, beyond reasonable doubt, that his explanations about the answers which had been given in the s 19 examination had been disproved. In particular, an unjustified finding that the appellant's actions in signing a cheque on 2 May 1997 revealed his knowledge, by that time at the latest, of the existence of a Bohemia Account at Eyres Reed appears to be a substantial reason for rejecting the testimony, and hence the defence, of the appellant. It follows, in my respectful view, that the conclusions of the learned Magistrate to convict the appellant was affected by error and cannot themselves support the conviction.

50 In this case Pullin J proceeded to deal with the appeal before him on the footing that, under s 199(1)(b) he could dismiss the appeal notwithstanding that any point raised on the appeal might be decided in favour of the appellant if he considered that no substantial miscarriage of justice had occurred. His Honour was undoubtedly entitled to, indeed obliged, to proceed on that basis. In doing so, his Honour accepted that he was required to make his own independent assessment of the evidence against the appellant - M v The Queen [1994] HCA 63; (1994) 181 CLR 487 at 492; Chidiac v The Queen [1991] HCA 4; (1991) 171 CLR 432 per McHugh J at 463 and De Gruchy v The Queen [2002] HCA 33 - and that any inference of guilt to be drawn from primary facts established must be the only rational inference reasonably open upon the whole body of primary facts - Chamberlain v The Queen (No 2) [1984] HCA 7; (1984) 153 CLR 521 at 536 and 599, and Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573 at 578.

51 His Honour then proceeded to examine the evidence as a whole and this led his Honour to the conclusion that the only rational inference a reasonable Magistrate could draw would be that the appellant did know about the Bohemia Pty Ltd Account at Eyres Reed before he was contacted by the ASC on 22 July 1997. In this regard, his Honour treated as being very significant evidence which established that the appellant had signed a change of address form sometime before 16 April 1997 relating to operations on the Bohemia Pty Ltd Account. Of this Honour said:

"In my view, that evidence alone is enough to convict him, but in combination with the other evidence, it leads overwhelmingly to an inference that he knew about the account before 22 July 1997."

52 This was in a situation where his Honour had already observed that:

"In my opinion, disregarding the evidence about the cheque and disregarding the eCuchina meeting, this was a strong prosecution case. My own assessment of the evidence leads me to the conclusion that a reasonable Magistrate would have decided beyond reasonable doubt that the appellant was guilty of the charge."

53 It is not sufficient, in these circumstances, to conclude that the tribunal of fact, in this case the learned Magistrate could on the evidence adduced, as a matter of law, convicted the appellant. The question for the appeal court is to decide whether or not it has been shown that there has been no substantial miscarriage of justice produced by the conviction, not merely whether it was open to the tribunal of fact to be satisfied beyond reasonable doubt of the appellant's guilt - Chidiac v The Queen (supra) per Mason CJ at 433 and Morris v The Queen [1987] HCA 50; (1987) 163 CLR 454 at 472-473.

54 In the particular circumstances of this case that decision is ultimately but inescapably affected by the assessment of the credibility of the evidence given by the appellant in the sense that it necessarily involves a decision about whether or not the respondent established, beyond reasonable doubt, that the explanations of mistake given by the appellant should be rejected and that the evidence established that he had made a deliberately false statement. There are many authorities for the proposition that, where the determination of an issue involves to any extent the credibility of a witness or witnesses, an appeal court should recognise the great advantage which a court at first instance possesses in seeing and evaluating the witness or witnesses give evidence and the effect which this has in producing the decision of the court at first instance - State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 73 ALJR 306; Fox v Percy (2003) 77ALJR 989 and Hoyts Pty Ltd v Burns [2003] HCA 61; (2003) 77 ALJR 1934.

55 I consider that a decision adverse to the credibility of the appellant, in a case such as the present, could only be made by an appeal court in the exercise of powers conferred under s 199(1)(b) of the Justices Act in circumstances where the clearest of proof had been shown against the appellant. I agree, with respect, with Pullin J that this was a strong prosecution case and that the fact that the appellant had signed a change of address form before 16 April 1997 is strong evidence that he knew about the existence of the Bohemia Account at the brokers' office by then at the latest. Nevertheless, the appellant maintained his denial of falsity and gave an explanation for the signing of the change of address form consistent with his case. His Honour rejected that evidence concluding that no reasonable Magistrate could have inferred that the appellant did not appreciate that the change of address form was an Eyres Reed document, or that the appellant had paid no regard to it or that he had simply forgotten about it. His Honour was of the view that those inferences were not open because of the appellant's elaborate denial that the signature on the change of address form was his own. Once that finding was made against him (and it was not challenged on the appeal) his explanations needed to be evaluated in the light of the conclusion that his statement (in relation to the denial that it was his signature on the form), was false.

56 Nevertheless, the issue remains one of credit and I do not consider that an adverse decision about the appellant's credit, on this vital issue, can be justified simply as a matter of inference from the evidence adduced and reviewed from the transcript at a hearing of the first appeal. With respect, such a process fails to give due regard to the special advantages derived from seeing and hearing the witness, and other witnesses at a trial, uninfluenced by the errors which the learned Magistrate was found to have made. There was some possibility that the explanation of the appellant might be accepted, on the basis of an assessment of his credit, however inconsistent that may have appeared to be with other inferences to be drawn from the evidence. The prospect of that occurring means that there is some chance that the charge against the accused might be dismissed at a properly conducted trial. So long as such a prospect exists I do not consider that it can be concluded that the conviction in this case, based in part on the errors of the learned Magistrate at first instance, has meant that there is no miscarriage of justice and that this appeal should, on those grounds, be dismissed.

57 In my view, in the particular circumstances of this case, the appellant is entitled to a judgment of a tribunal of fact, uninfluenced by other errors, on the ultimate issue of credibility upon which his defence depends. That has not occurred and I do not consider that it can occur upon the basis of inferences drawn from evidence without seeing and hearing the appellant. Accordingly, I consider that this appeal should be upheld and the conviction of the appellant quashed. I would, however, remit the case for re-hearing before another Magistrate pursuant to the powers conferred upon this Court under s 199(1)(d) of the Justices Act so that this charge can ultimately be disposed of according to law. The need to start afresh, in my view, arises from the position that having reached adverse findings of fact about the appellant's credibility upon an erroneous basis at the trial the learned Magistrate who heard the case would be faced with the notorious difficulty of disentangling findings of fact from conclusions about applicable legal principle, if the case were now to be remitted to him for further determination - see Minister for Immigration v Wong (2003) 77 ALJR 786 per Gummow and Hayne JJ at [74]. The appellant is entitled to be tried on this charge before a court which has not already reached adverse conclusions about his credit on an erroneous basis.