Joffe v R; Stromer v R - [2012] NSWSC 409 - NSWSC 2012 case summary — Zoe

NSWNSWSC

Joffe v R; Stromer v R

[2012] NSWSC 409

Supreme Court of NSW|2012-04-12|Before: Hall J, Bathurst CJ, Whealy JA

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2012-04-12

Before

Hall J, Bathurst CJ, Whealy JA

Catchwords

NS v R [2011] NSWCCA 9 Edwards v The Queen (1993) 178 CLR 193 Perry v the Queen [1982] HCA 75
150 CLR 580 R v Zhang [2005] NSWCCA 437
158 A Crim R 504 Sutton v R [1984] HCA 5

Source

Original judgment source is linked above.

Catchwords

NS v R [2011] NSWCCA 9 Edwards v The Queen (1993) 178 CLR 193 Perry v the Queen [1982] HCA 75150 CLR 580 R v Zhang [2005] NSWCCA 437158 A Crim R 504 Sutton v R [1984] HCA 5

Judgment (29 paragraphs)

[1]

Solicitors: Crown: Solicitor for the Commonwealth DPP Joffe: Speed & Stracey Lawyers Stromer: Johnson Winter & Slattery File Number(s): 2010/34654, 2010/40493

[2]

PART A - RECONSIDERATION OF CO-INCIDENCE EVIDENCE

On 5 October 2011 the Court of Criminal Appeal made, amongst other orders, an order that the Notice of Motion filed on behalf of the accused, Daniel Shayne Joffe, on 11 March 2011 and filed on that date on behalf of the accused, Nathan Stromer, be referred back to me as the Trial Judge for reconsideration in light of that Court's Judgment: (DSJ v R; NS v R [2011] NSWCCA 9).
The Notices of Motion that were filed on 11 March 2011 sought the following orders: "The accused, Mr Joffe, by way of notice of motion filed on 11 March 2011, seeks, inter alia, the following orders: 1 An order pursuant to s.192A of the Evidence Act 1995 that the question of the admissibility of the Crown's Co-incidence Evidence be determined in advance of the trial. 2 Further to order 1, a ruling pursuant to s.98 or 101 of the Evidence Act 1995 that the Crown's Coincidence Evidence not be admitted at the trial of each of the charges in the indictment. 3 An order pursuant to s.21 of the Criminal Procedure Act 1986 that the charges in the indictment, other than charges 6 to 9, be tried separately."

In the judgment of Whealy JA his Honour observed: "79. In a practical sense, there are two avenues of approach to be taken. First, in examining the coincidence evidence (together with other material already in evidence or to be adduced) the trial judge is required to ask whether there emerges, from a consideration of all the Crown evidence, a possible explanation inconsistent with guilt. For regard to be had to the alternative explanation, it must be a real possibility, not a fanciful one. It must be a broad or overarching possibility, capable of being stated in general terms, even though it may derive from an individual piece or pieces of evidence or the evidence taken as a whole. 80. Secondly, the trial judge must ask whether that possibility substantially alters his (or her) view as to the otherwise significant capacity of the coincidence evidence to establish the fact or facts in issue. Of course, if the trial judge has already concluded that the coincidence evidence does not reach that level of significance in terms of its capacity, he will have rejected the evidence in terms of s.98. In that situation, the possibility of an alternative inference may, for the time being, be set to one side. Later in the trial, when the evidence has concluded, that possibility will become a matter for the jury to assess and determine when it comes to consider whether the Crown has proved its case beyond reasonable doubt. 81. The Crown, in making its concession, however, stressed that at no stage in this process was the trial judge required or entitled to assess the actual weight of any part of the evidence, or to make any actual assessment concerning the probabilities of any alternative theory. Nor was the trial judge required or entitled to make a comparison of the Crown theory and the probabilities of any alternative theory. This proposition appears consistent with established authority. Any attempt by the trial judge to anticipate the actual weight the jury would attach to the evidence is prohibited, as I have explained."

His Honour later stated: "130. I have concluded, not without some considerable hesitation, that the trial Judge did fall into the error of rejecting altogether the need to recognise, in the evaluation process, the existence of alternative inferences inconsistent with guilt arising from the Crown evidence. This was as a consequence of the Crown argument that was advanced to him, his reliance on the passage in Samadi , and arising from his overall concern that it was not his task to intrude into the fact finding area which included the weighing and assessment of inferences. 131. In relation to the last matter, his Honour was quite correct. His Honour was also correct in accepting that it is the task of the jury to undertake this weighing task at the point where all the evidence in the trial had been assembled and concluded. None of this, in my opinion, means, however, that the trial judge in assessing s.98, and making the evaluation required under that section, must ignore and put to one side altogether an alternative explanation that properly arises on the evidence inconsistent with guilt. Of course, it is not for the trial judge to weigh and assess that alternative explanation, as a jury would do. Nor is the trial judge required, in that regard, to examine and weigh parts of the evidence only in isolation from the whole body of the evidence. 132. However, in the present matter, the trial judge was required to ask himself whether, for example, the possibility that NS had been "tipped off" about the corporate entities without receiving insider information might otherwise substantially alter the capacity for cogency he thought the coincidence evidence possessed. Similarly, in the case of DSJ, his Honour was required to ask whether, for example, this mass of phone calls and other communications between the two men might mean no more than that they were engaging in social and recreational communications, without reference to stock market trading. If that were a possibility, did it substantially alter his view as to the otherwise significant capacity of the Crown evidence to establish the facts in issue. He had to ask whether the fact that Moody's had information about a vast number of corporate entities, and that, in some cases, there was no direct evidence that DSJ had acquired insider information, substantially altered the high cogency of the coincidence evidence, as he saw it, to prove the facts in issue. In each case, did the possibility deprive the coincidence evidence, taken with the other evidence, of its capacity to prove significantly the Crown case? His Honour, in considering these alternative inferences, may well have taken the view that none of these possibilities had the capacity to diminish the otherwise strong probative value of the Crown evidence. However, in my opinion, they had to be recognised and taken into account in the limited manner I have suggested, and it was an error not to do so."

[6]

Evidence of two kinds

In the present proceedings the Crown intends to prove each of the elements of the offences charged by evidence of two forms: i Circumstantial evidence - being evidence of facts as to particular matters (being strands of evidence rather than links in the chain of proof of the fact to the inferred): Edwards v The Queen [1993] 178 CLR 193 per Brennan J at 204. The Crown, in its Statement of Facts, observed: a "5…there is a close proximity in time between the insider information being provided to Moody's, Joffe becoming aware of that information, Joffe making on-line enquiries mainly about market price and trading activities of the credit's stock, telephone communications between Joffe and Stromer and then Stromer acquiring a particular Division 3 Financial Product. In some instances there is no direct evidence of Joffe having direct access to the insider information provided to Moody's. However, evidence of the course of conduct established by those cases in which he had direct access to the information, together with the others, establishes that Stromer proceeded to acquire all the relevant Division 3 financial products because of the confidential information provided to him by Joffe. b Crown relies upon circumstantial evidence. In the Statement of Facts the Crown observed: "25 The case against both accused, namely that Joffe procured the trading of Stromer on the strength of 'insider information', is largely circumstantial and is based upon the inferences to be drawn from the similar pattern of conduct which occurred in relation to the trading in each of the financial products. The conduct includes: i provision to Moody's by Credits of confidential information in relation to proposed corporate activity which had the potential to affect its credit rating; ii the capacity of Joffe to access that information; iii the actions of Joffe in making Internet searches, commonly on the CommSec website for market information concerning the securities affected by the information, in most cases in circumstances where he had not made searches relating to those entities previously; iv contemporaneous telephone contact between Joffe and Stromer; v the acquisition by Stromer or his family of the financial products in the corporate entities after telephone contact with Joffe, and usually shortly before public announcement of the proposed activity; vi financial dealings between Joffe and Stromer. (26) The prosecution case is that there is no other reasonable inference to be drawn than that Joffe gained access to the confidential information given to Moody's, Stromer was provided with insider information by Joffe and acquired the financial products in consultation with him." ii Co-incidence evidence - The Crown seeks to lead co-incidence evidence (a form of circumstantial evidence) on the basis that the evidence pertaining to each individual Count is admissible in respect of each other Count.
The Crown relies upon a Notice of Co-incidence Evidence pursuant to s.98 for the purpose of establishing that each of the accused did the acts alleged against them in the indictment and that each had the required state of mind on the basis that, having regard to the similarity of the events and circumstances, it is improbable that the events occurred coincidentally.
The combined course of conduct, summarised in the Co-incidence Notice has been analysed and set out in an Appendix to my judgment dated 17 August 2011.
Part of the co-incidence evidence relates to "events" in the nature of relevant telephone contact between the two accused. Attached to this judgment, as an Appendix to it, are summaries prepared by the Crown of such telephone contacts in relation to the relevant transactions. They constitute evidence of 'events' and the timing of such events in relation to acquisitions.

[8]

(b) Written Submissions for Joffe

In this respect it was submitted that the Crown will seek to use, as co-incidence evidence, evidence in relation to facts and issues in other counts to invite the jury to use such evidence (as co-incidence evidence) to establish that Joffe drew an inference as to certain information communicated to Moody's and on that basis, for the jury to make findings in relation to particular counts on issues such as "possession" and "communication". The argument was in essence that co-incidence evidence based on other counts did not have the capacity to establish that, by a process of inference, Joffe was in possession of insider information at the relevant time. As discussed below I do not consider the Crown relies solely upon co-incidence evidence to establish the elements of possession and communication.
In developing this line of argument many points raised by Mr Game in the course of oral submissions were directed to establishing that there were "discrepancies" between the particularised information and the summary of the evidence that the Crown relied upon in relation to each count, as set out in the Table to the Notice of Co-incidence Evidence. The contention was that the summary of the evidence set out in the Table to the Notice in relation to particular counts did not establish "possession" of inside information. However, notwithstanding the jury would be invited to use the co-incidence evidence to support the proposition that Joffe drew inferences from what might be termed 'limited' evidence.
Many of the submissions made to this effect were put in issue by the Crown Prosecutor. There was some dispute as to the precise nature and extent and significance of the evidence available to the Crown to establish the elements of 'possession' and 'communication'. In other words the Crown's position was, in effect, that a proper understanding of the factual material available to be called in relation to particular communications between Moody's and its client entities in itself was sufficient to establish, as a matter of inference, those elements. The co-incidence evidence was further evidence which the Crown says seeks to rely upon and add to its circumstantial evidence case. The co-incidence evidence, it contended, would establish its general contention that the accused's conduct was part of a scheme or joint involvement in insider trading. The Crown characterised this as "…a circumstantial case of a continuing joint venture in share trading between the accused…": Crown Submissions April 2012 at [9].
In the outline of submissions filed on behalf of the applicant Joffe it was stated: "Particularise "insider information" v actual evidence of information 8. The trial judge should be alert to significant discrepancies between particularised insider information and the actual evidence of information in the possession of Joffe. It is the actual evidence that is relevant on this application. It is of significance as properly understood, coincidence reasoning from the other Counts cannot increase the probabilities that Joffe inferred the particularised information when Moody's was in possession of substantially less (eg Count 3 (AWB), Count 4 (BLD), Count 6 (SRG)) it is also relevant when the information is considered against publicly available information. It is of relevance on ss.98, 101 in the question of severance. Comments pitched higher than the insider information should not be taken into account (eg Count 2 (AIA), Count 5 (AIHCA))."
It was also submitted that it was relevant to note evidence of other employees which did not support the notion that they conveyed information they knew to Joffe. It was said that co-incidence reasoning is not going to support in a "significant" way the probabilities that they are mistaken or lying (eg Count 4 (BLD), Count 5 (AIHCA), Counts 6 - 9 (SIG), Count 10 (RIN)).
The submission was it would be "tenuous in the extreme" to allow reasoning back from these Counts to the other Counts to support an inference of communication of the information.
In relation to Count 4 (BLD), Count 5 (AIHCA), Counts 6-9 (SRG) and Count 10 (RIN) the written submissions for Joffe set out the element of possession in respect of each charge and, on all Counts the following: i That Joffe conveyed insider information to Stromer. ii That Joffe thereby procured Stromer to acquire securities. iii That Joffe did so intentionally. iv That Stromer traded whilst in possession of insider information. v That surveillance of the share price by Joffe was for the purpose of procuring Stromer.
In relation to Count 1 (GAS) there was the additional fact, namely:

That Stromer's father brought the shares as an agent for Stromer.

The written submissions on behalf of the accused Joffe raised the following: i In evaluating "significant probative value" in relation to the evidence relied upon by the Crown in respect of each count there is a need to determine the evidence available and forming part of the Crown case in respect of the specific elements of each particular count. Hence, it was submitted possession of "inside information" is one of the facts in issue, eg Counts 4 (BLD), 5 (AIHCA) and 10 (RIN) cf. Counts 1 (GAS), 2 (AIA), 3 (AWB) and possibly Counts 6-9 (SRG). ii There is a need to note what were termed the 'discrepancies' between the particularised inside information and the actual evidence as to information being in the possession of Joffe. iii The actual evidence was said to be relevant to the determination of the present application (ie significant probative value in terms of ss.98 and 101). iv Co-incidence reasoning from the other Counts could not increase the probabilities that the accused Joffe inferred any of the particularised information in circumstances in which Moody's was in possession of substantially less information. Examples were said to include Count 3 (AWB), Count 4 (BLD), Count 6 (SRG). v In the consideration of what was inside information it is necessary to have regard to what information was publicly available. vi As to the actual evidence of communications within Moody's it was submitted that it was necessary to consider the evidence of other employees of Moody's which does not support the fact that they conveyed information to the accused, Joffe. vii There are reasonable alternative possibilities which reduce the cogency of the Co-incidence Evidence in terms of significant probative value. These include: (1) The fact that regular communication between the accused, Joffe and Stromer is explicable by reason of the fact that they were friends. (2) Communication between them occurred without inside information being conveyed. (3) That they communicated on matters other than procurement. (4) That Stromer traded stocks without inside information, based on information that was in the public domain. viii Where there is a reasonable possibility of trading on market speculation, the evidence does not meet the test in s.98. Similarly, where the Crown has not excluded the reasonable possibility that the "inside information" was not in the possession of the accused Joffe. ix As to the provisions of s.101 of the Evidence Act, the use of evidence for a particular purpose on any one Count (including limitations on such use) will affect the determination required by s.101. There may be evidence that is not capable of being used on a particular subject relevant to another Count. However, it was submitted, directions by the trial judge will not be able to "cure" the very risk of improper use by the jury. x The nature and complexities of the case are such that it is too much to ask the jury to hold it all in their minds. xi The multiplicity of facts, even if admitted, and the number of inferences calling for an answer was said to be 'oppressive' to the accused with the indictment in its current form.

[9]

Mr Game developed the written submissions on behalf of his client at the hearing as summarised below. The Inside Information
The submissions made reference to the particulars set out in Co-incidence Notice and to the evidence which the Crown had identified in the Table to the Notice. There was said to be "discrepancies" between the particulars and such evidence.
Mr Game submitted on behalf of Joffe that the Crown sought to use co-incidence evidence for the purpose of establishing that Mr Joffe engaged in inferential reasoning in relation to 'inside information' in seeking to prove his possession of such information. He argued that the co-incidence evidence was not capable of being used in that way as a means of proving an element of the offences charged: Transcript 12 April 2012 at p 3.
The argument was developed on what was referred to by Mr Game as "the skeleton" of the case. This expression I understood to refer to specific facts in the Crown case such as: i The relationship between the accused, Joffe and his employer, Moody's. ii The existence of a relationship between specific entities and Moody's in the relevant period. iii The receipt of confidential information by Moody's from particular corporate entities. iv The activities of Joffe including communications with Stromer on particular days. These include text messages between him and Stromer on significant dates and at significant times. v CommSec searches carried out by Joffe at Moody's at particular times and including facts as to the number and the timing of searches. vi The making and timing of "announcements" of takeovers etc. vii The making and timing of acquisitions and disposals of derivatives and shares.
Matters set out in (i) to (vii) are not intended as an exhaustive statement of all of the facts constituting "the skeleton".
Mr Game's submission was to the effect that it will not be possible to use such information "to draw the inference that the Crown is actually asking you to draw…": [T5].
In support he submitted: i That in some cases what was particularised in the indictment is less than the information identified as supporting 'the inference' which the Crown seeks to attribute to Joffe. ii The 'capacity' of the evidence is not as far-reaching as the Crown argues in terms of its probative value (a point also relevant to s 101).
These points were said to be supported by specific matters concerning to four Counts as follows:

[10]

(1) Count 3 (AWB) The 'information' is identified in the indictment and the Co-incidence Notice in summary as follows: 1 AWB would indemnify AWB (International) Ltd (AWB I) in respect of its legal costs arising from the Cole Royal Commission. 2 The Wheat Crop Forecast for domestic wheat production for the 2006/07 crop was no longer correct and the ABARE Forecast was correct.

The point made in submissions was that no information is contained in the particulars in the indictment to the effect that "AWB had informed Moody's that it (AWB) was about to announce," the matters referred to in (1) and (2) in the above paragraph, to the ASX.
The information identified in the Co-incidence Notice, it was said, makes no reference to the intended announcement to the ASX.
The Crown, so the argument went, relies on the drawing of an inference by Joffe as to that particular fact in order to establish him being "in possession". It was said that was so, because the matter was not specified as a fact about which AWB had advised the fact of an intended announcement.
The submission was that "no process of Co-incidence reasoning can affect the process of mind in DSJ inferring something from another piece of information": [T7].
The Crown in reply made the following written submissions: "6. In relation to this entity, it is submitted on behalf of DJ that the information communicated to "Moody's" did not include information that AWB "was about to announce anything". 7. Footnote 5 to the information particularised in the notice refers to DJ's notebook. This notebook was referred to in the Appendix to the judgment at [372], where his Honour noted that "Mr Joffe's notes recorded, inter alia "...ABARE forecast correct - 16.4m". The notes referred to also include DJ's note: "Thursday Press release". The submission on behalf of DJ (T 8.32) that "he wasn't told at the meeting they were about to announce" should be rejected. 8. The meeting attended by DJ took place on Wednesday 20 September, 2006. On 22 September, 2006, DJ sent an email to AWB [S01719271] in the following terms: "Further to our meeting would it be possible to get a draft copy of AWB's proposed announcement regarding the indemnity". This email forms part of Mr Howell's statement at [133]. (See page 395 in volume 2 of the TB.) Footnote 5 should be amended to delete [132] and substitute [133]. 9. The following Thursday was 28 September, 2006, the date of the announcement. (See page 498 in volume 2 of the TB.) 10. In the indictment this evidence as to timing is particularised as "AWB was about to announce to ASX". 11. It is submitted that there is no real difference between the evidence and the particulars as to timing, as suggested by footnote 4(a) of DJ's submissions. 12. As to "would Indemnify" (particularised) and "considering providing an indemnity to" (part of the evidence) the Crown notes that at the meeting on 20 September 2006 (eg at [123] of Howell's statement) further information regarding the indemnity was provided. In addition, 2 days later, DJ requested a draft copy of AWB's proposed announcement regarding the indemnity". (See pages 394-395 in volume 2 of the TB.) 13. As submitted, the inside information is not limited to that information which is first conveyed. In this instance, there can be little doubt that as at 27 September 2006, AWB would indemnify AWB (international) Limited, as particularised. 14. Similarly, the information concerning the comparison between AWB's "recent market guidance" and the ABARE "forecast" which "was correct", was information which was conveyed at the meeting on 20 September 2006. This is confirmed by the evidence of Howell and reflected in DJ's own note, set out in [7], above. 15. The Crown submits that the accused DJ was in possession of the information particularised. It is not a matter of inference."
The following Written Submissions in Reply were made on behalf of the accused, Joffe: "4. Two aspects of the information particularised in Count 3 of the indictment ("the Count 3 information") are at issue here. Table A on Count 3 relies on a meeting of 20 September at which DSJ was present. There is no reference there to AWB being "about to announce" anything. Table A also asserts that the evidence discloses that AWB was "considering" providing an indemnity. This is to be contrasted with the Count 3 information. The material in Table A falls significantly short of the Count 3 information. Notwithstanding paras 6-15 of CR, the material in Table "A" on this subject is accurate and the submission made by DSJ stands. 5. The evidence does not go higher than that Moody's were informed that AWB was considering granting an indemnity to AWB International Limited. a The AWB presentation at the meeting said (at p 24) that AWB was "considering providing an indemnity to AWB and has a compelling commercial basis to do so" [TB 3195] b The notes of DSJ say: i (at p 53 of 100) "AWB 1 - AWBL (indemnity)??" ii (at p 54 of 100) "Awaiting Board approval (AWBL) next week Wed, Thurs morning. Bank approval in writing". 6. Accordingly, (and consistently with Table A) concerning the meeting of 20 September the evidence can not possibly go any higher than that Moody's were informed that AWL were "considering" the indemnity. 7. The Crown (CR para 13, 2nd sentence) says that "there can be little doubt that as at 27 September 2006, AWB would indemnify (International) Limited as 'particularised'". No doubt that was a fact after the AWB Board had made a decision on the subject. That, however, is not the information particularised in Count 3. Further, insofar as it can be said that DSJ possessed information that Moody's had been "informed" of such facts, if such information existed (of which there is no evidence), this must have been an inference drawn by him. 8. As for the making of an announcement, the point stands that nothing was conveyed in the meeting of 20 September that Moody's were informed that AWB were "about" to make an announcement. Again, that must have been an inference drawn by DSJ. 9. Moreover, the announcement referred to in the Count 3 information concerned two separate pieces of information ((1) the indemnity and (2) the forecast) not only one. Whatever the words "press release" refer to on pg 55 of 100 of the notes of DSJ, this is seven pages away from the reference to the ABARE forecast (at pg 48 of 100) and there is no link between the two. No assertion is made that Moody's were informed of an announcement concerning the second subject in the Count 3 information. Again, if that information existed, possession of it by DSJ must have been an inference drawn by him."

[12]

(2) Count 4 (Boral)

This count relates to the acquisition of 52,200 Contracts for Difference by Stromer between 25 and 26 October 2006.
On 25 October 2006 Boral provided confidential information to Moody's: i That the profit results for the financial year ending 30 June 2007 would probably be lower than originally announced to the market. ii That Boral was likely to inform the market of a downgrade of its previously announced expected profit after tax for the Full Year ending 30 June 2007.
It was contended that of the information provided by Boral to Moody's there is no actual evidence available to the Crown as to information concerning (ii) above "…likely to inform the market…etc"
Boral made an announcement to the market that it expected after tax profit would be below the previous year as would its first half year profit after tax.
The Crown submitted there is evidence that there was information within the possession of Moody's before the announcement was made. After the announcement Brown sent Cahill an email saying "Brian, as expected Boral came out with an announcement…" (emphasis added).
On the day before Boral made the announcement Joffe accessed the ComSec website for Boral. Between 26 October 2006 and 13 November 2006 Joffe exhibited particular interest in Boral, accessing the website in relation to it 696 occasions. I consider the co-incidence evidence has significant probative value in that it is capable of enabling inferences to be drawn as to Joffe's possession of inside information.
Mr Game submitted, by way of assertion that "no evidence" exists of Moody's being informed by Boral of information as to the imminent announcement.
However the email to Mr Cahill "…as expected Boral came out with an announcement" is at the least consistent with the fact that Moody's had previously been informed of Boral's intended action.
There is also evidence that Moody's were given information that inevitably would mean that it would have an impact on profit forecasts. It was information, in other words of such a kind that its impact would be evident. It is a jury question as to whether such inside information was accessed by the accused Joffe.
The co-incidence evidence in my assessment has significant probative value.

[13]

(3) Count 5 (AIHCA)

Between 10 and 14 November 2006 Stromer acquired 962,000 Contracts for Difference in Alinta Infrastructure Holdings.
The information provided to Moody's was that Alinta would announce, on 15 November 2006, a takeover bid for all the issued partly paid stapled securities of AIHCA.
The submissions made at an earlier time appear in the Appendix delivered to the Judgment delivered on 17 August 2011 at [441-445].
It was submitted for the accused Joffe that the particularised information exceeds the evidence.
The Crown pointed to the following evidence which it contended is capable of supporting an inference that Joffe did come into information of the inside information. Those facts may be shortly stated: a The fact that Mr de Loub of Alinta imparted information to Mr Atkins on 10 November 2006 at 3:27 pm of a planned announcement by Alinta which was to take place on 15 November 2006 of the takeover bid as described in the particulars. b The Crown also relied upon evidence as to the specific activities or actions of Joffe and Stromer following the call to Atkins, in particular:

3:36 pm on 10 November 2006 Joffe accessed the CommSec website for AIHCA
3:38 pm on 10 November 2006 Joffe telephoned Stromer
7:39 pm on 10 November 2006 Joffe telephoned Stromer
Weekend phone calls between Joffe and Stromer
Monday 13 November 2006, 11:46 am, Stromer commenced purchasing AIHCA Contracts for Difference
11:51 am Joffe and Stromer speak by phone
13/14 November 2006 Stromer purchases 62,000 AIHCA Contracts for Difference
15 November 2006 the bid is announced

The Crown's case is that a series of closely related events, several of which are directly linked to AIHCA, is more than coincidental and leading to the commencement of the acquisition of AIHCA CFDs on Monday 13 November 2006.
The acquisitions were acquired by Stromer in circumstances that had a close temporal association with specific events as set out above.
Subject to possible alternate inferences (as to which, see below) I am of the opinion that the co-incidence evidence in relation to Count 5 has significant probative value.

[14]

(4) Count 9 (SRG)

In the Outline of Crown Submissions in Reply in relation to Count 9 it was stated: "33. It was also submitted on behalf of DJ (12.43) that the information particularised in Count 9 is different from the information received by Atkins and Howell in an email dated 8 December, 2006. In effect, it is submitted that there is nothing in the email regarding "a bid for all of the issued stapled securities of SRG for up to $1.30 per stapled security". 34. However, it is to be noted that there is no such criticism of the particulars in Count 8, wherein it is alleged that DJ possessed the information italicised in the preceding paragraph. It is the Crown case that DJ was in possession of that information between the dates alleged in Count 8 and that, subsequently, he was in possession of the further information regarding the dates for the proposed bid. Thus, it is the Crown case that between the dates alleged in Count 9, DJ was in possession of the information particularised in Count 9".
In his oral submissions Mr Game stated that the Crown relied in its "Table of Events" from the matter "which the inference of possession of the information is, is an email sent from Mr Milne to Atkins and Howe at about 11:08 on 8 December."
The email says: "If there is an announcement it will be this time next week. So how does if there is an announcement it will be this time next week become proposed to announce a bid for all of the issued stapled securities? Again the only way is that if Mr Joffe inferred that information from something he had learnt or been told so that in this particular instance it would be contrary to what Atkins and Howe says the Crown case would have to be, not only that the - they told him, but they misinformed him because it is such a bald example."
The particulars in the indictment in respect of Count 9 are as follows: Particulars "The defendant possessed insider information to the effect of: Moody's had been informed by Trans Urban Limited that it (Trans Urban) proposed to announce a bid for all of the issued stapled securities of SRG for up to $1.30 per stapled security, with the bid to be announced on Friday, 8 December 2006." Mr Game argued that: "…for Mr Joffe to have possessed the information it would have had to be an inference he drew or he would have had to have been misinformed. There is a weird thing about this": (T 12 April 2012 at p 14)
Mr Game observed that the email said that if there was an announcement it would be "this time next week". Mr Game posed the question "so how does if there is an announcement it will be this time next week become proposed to announce a bid for all the stapled securities. Again well the only way is that if Mr Joffe inferred that information was something he had learnt or been told…etc": [T12-13].
It is important however to examine the evidence referred to in the Table of Related Events attached to the Co-incidence Notice concerning SRG (Count 9). In the Statement of Facts prepared by the Crown, specific communications including emails, meetings etc were identified. In paragraph 506 there is reference to information coming from Trans Urban to Moody's of a specific nature concerning the proposed bid, namely: "At about 2:00 pm on 30 November 2006, at a meeting between Trans Urban and Moody's, attended by Howe, Atkins and Wells, Moody's was informed that Trans Urban Limited proposed to announce a bid for all of the issued stapled securities of SRG at a value of up to $1.30. At the meeting the Moody's representatives were taken through a 46 page presentation on the proposal. The presentation included an indicative transaction timetable, showing the transaction was to be announced on 8 December 2006 if the takeover is "friendly" and 11 December if the takeover is "hostile"."
As noted above the accused, Stromer, made his first acquisition of SRG CFDs at 2:22 pm on that day, 30 November 2006.
Before the email from Mr Milne to Atkins and Mr Howe at 11:08 am on 8 December 2009 it is clear that Moody's had been put in possession of a great deal of information.
The fact that the email did not itself refer to "a bid for all of the issued stapled securities of SRG for up to $1.30 per stapled security" is accordingly to be evaluated in light of the earlier history that such information had been provided to Moody's by Trans Urban. In relation to Count 9 the Crown case is, as stated above, that Joffe was in possession of the information between the dates referred to in Count 8, namely between about 2 and 4 December 2006. The relevant dates in respect of Count 9 are between about 5 and 8 December 2006. Accordingly the Crown case is, as stated above, that on the relevant dates in relation to Count 9, Joffe was in possession of the information set out or particularised in Count 9.

[16]

The issue of possible alternative inferences or explanations

Mr Game set out the following matters in his written submissions: "11. Reasonable possibilities which reduce the cogency of the coincidence evidence to establish significant probative value, include those summarised by Hall J at [67] (R v Joffe; R v Stromer [2011] NSWSC 894) and by Whealy JAA at [132]. 12. The applicant submits that the following alternate inferences are reasonable possibilities, each individually supporting the exclusion of the "coincidence evidence:" (1) DJ and NS communicated regularly because they were friends rather than for the purpose of intentional procurement; (2) DJ and NS communicated without the inside information being conveyed; (3) DJ and NS communicated without procurement; (4) NS traded in stocks without the inside information and rather on the basis of information in the public domain (media and market speculations/announcements) - this is true of the uncharged acts relating to Publishing and Broadcasting Limited (PBL), Australia Pipeline Trust (APT/APA) and Downer (DOW). The instances of "terrible information" or "bad information" (eg Count 2 (AIA), Count 3 (AWB), Count 4 (BLD) and Counts 6-9 (SRG)) support possibilities (2)-(4). 13. Justice Whealy's example in [132] of "communications between the two men might mean no more than that they were engaging in social and recreational communications, without reference to stock market trading" states the matter generally, rather the trial judge would have to take into account the inference that it was "without reference to the particular 'inside' information". 14. Just as in sexual assault cases involving multiple complainants, where there is a reasonable possibility of concoction, collusion or contamination between the complainants, the evidence of one complainant in the trial of another would ordinarily be inadmissible: R v Colby [1999] NSWCCA 261; Hoch v The Queen (1988) 165 CLR 292; BRS v The Queen (1997) 191 CLR 275 at 301. If there are complainants where there is no such reasonable possibility, the evidence may be admissible, subject to s 101. 15. In this case, where there is a reasonable possibility of trading on market speculation, the evidence does not meet s 98. So too, where the Crown have failed to exclude the reasonable possibility that the "inside information" was not in Joffe's possession, the evidence does not meet s 98."
The alternate possibilities consistent with innocence were identified on behalf of the accused and noted in my Judgment delivered on 17 August 2011 at [67] as follows: "1. The absence of evidence to establish that in particular communications (telephone or text messages) between Mr Stromer and Mr Joffe inside information was or could have been conveyed. Reference was made, in this respect, to evidence which would indicate that Mr Joffe was not at his home when a particular call was made or that other calls were of extremely short duration. 2. The particular timing of specific events which it was argued did not conform with or were inconsistent with the "pattern" of conduct or events asserted by the Crown. 3. Evidence it was contended that supported an alternative explanation for Mr Joffe having accessed the CommSec internet site on particular occasions (eg the GasNet share purchase). 4. Whilst accepting that Mr Wilson's expert opinion to the effect that certain "information" was "material" information and it could not be disputed on the present applications, nonetheless, it was contended that an amount of it could not be regarded as very worthwhile or valuable information. In one submission it was asserted that certain information the subject of the expert opinion of Mr Wilson was "not very good information" or was "terrible information" (T 54). 5. That the evidence concerning particular trading activities in shares or derivatives could be explained by media releases or other information that had entered the public domain. One illustration was said to be found in a media release dated 24 July 2006 which referred to a re-evaluation of AIA's non-current assets resulting in an increase in value of $1.399 million. The submission was "that is a reason why one might be interested in the company" (T 58). This "event" is discussed in the Appendix to this judgment."
In the Crown submissions in reply on the issue of alternative inferences inconsistent with guilt, it was submitted that matters put forward on behalf of the applicant do not alter the capacity of the co-incidence evidence in relation to the following matters:

The volume of communications between Joffe and Stromer and the proximity of those communications to timing of the purchases and sales of the relevant financial products by Stromer;
The fact that the only financial products traded by Stromer in the offence period were in relation to entities that had provided Moody's with confidential/insider information;
The fact of and frequency in surveillance of shares at the entities by Joffe, being entities whose financial products were subsequently acquired;
The timing of arrangements being put in place for financing acquisitions;
The proportionate reduction of the probability that the acts of Joffe and Stromer are coincidental as each similar set of facts is included in the mix: Respondent's Submissions 19 March 2012 at [6].

I have considered the possibility that the telephone calls and text messages between the two accused could be related to social recreation or other matters of personal interest. As to whether or not the communications were of that nature, other than the fact of the existence of the long-term relationship between Joffe and Stromer there are no other objective facts to support the innocent possibility concerning the telephone calls.
Matters pointing in the other direction include the fact that there is a close proximity in time or alternatively a correlation in time between the communications between the accused and the inside information being provided to Moody's, in some instances Joffe being directly informed as to that information, activity by Joffe in the form of online inquiries as to market price and trading activities of the stock of entities who have retained Moody's, and the acquisition of particular financial products. In relation to some Counts the Crown relies upon the evidence to establish its contention that Joffe had access to the inside information.
As to the possibility that Stromer had been "tipped off" about the particular corporate entities in question without receiving inside information, such a possibility is to be assessed against the evidence which establishes multiple communications between the two accused prior to a particular acquisition being made. In general terms a "tip" may be conveyed in a single communication. I have nonetheless taken into account the possibility that the series of trades were all "tips". I have considered that possibility in light of all of the factual pieces constituting the Crown's circumstantial evidence as discussed elsewhere in this judgment. Having done so I do not consider that the possibility that Stromer had been "tipped off" is of sufficient weight to diminish the probative value of the co-incidence evidence.
I have also considered whether the absence of any direct evidence that Joffe acquired inside information reduces the cogency of the co-incidence evidence to prove relevant facts in issue. I have considered that matter in context of the facts which include the fact that the acquisitions made, the subject of the charges, were all acquisitions in entities that had been Credits of Moody's.
On the evidence in the Crown case I do not consider that the last mentioned factor diminishes the cogency of the co-incidence evidence.
Nor do I consider that the other alternative possibilities suggested in the written submissions for the accused in those respects diminishes the probative value of the co-incidence evidence relied upon by the Crown. I have, for the purposes of the assessment, assumed that such possibilities could arise. However even on that basis I do not consider that such alternate possibilities are capable of reducing the cogency of the co-incidence evidence.

[17]

The Submissions on behalf of Stromer

In the written submissions on behalf of Stromer, in relation to the separate trial application dated 5 April 2012, Stromer supported and adopted the submissions made for on behalf of the applicant Joffe at [1-7].
It was submitted that the availability of an alternate hypothesis is relevant in forming a view, as required by ss.98 and 101, that the evidence has 'significant probative value'.
It was submitted that the key issue with respect to Counts 11-20 was that of state of mind in respect of each Count alleged against Stromer.
The submissions for Stromer accordingly focused on the issue of the use of co-incidence reasoning to prove the content of the communications from Joffe to Stromer.
It was contended that there was no "direct evidence", of any relevant information (insider or otherwise) being passed between the two.
It was therefore contended that the key issue becomes "how does the evidence assist in the determination of whether Stromer had knowledge of the information, as alleged by the Crown.
In that regard it was stated that even if the contact between the two men induced Stromer to trade in particular securities it becomes a matter of inference as to whether Stromer was, at the material time, in possession of the inside information having received it from Joffe.
It was submitted that evidence of "some other trade, even if the circumstances were similar", does not add to or detract from the strength of any such inference.
The submissions for Stromer extract the following observations of Brennan J in Perry v the Queen [1982] HCA 75; 150 CLR 580 at [610]: "The factors which give probative force to other species of circumstantial evidence give probative force to similar fact evidence. A striking similarity between the fact directly established by the evidence and the fact in issue is a frequent hall-mark of admissible similar fact evidence (see Reg. v. Boardman (1975) AC 421, at pp 441, 444, 462 ; Markby (1978) 140 CLR 117, at p 117 ). Evidence of strikingly similar facts may be received in an appropriate case though they occurred on only one other occasion, as Reg. v. Straffen (1952) 2 QB 911 illustrates. But evidence of a series of occurrences exhibiting a more attenuated similarity may be admissible because the frequency of the occurrence of the similar facts enhances the probative force of the evidence, though the necessary probative force would be lacking if the similar fact had occurred but once or on a few occasions only (cf. Reg. v. Scarrott (1978) QB 1016, at pp 1022, 1023). (at p610)."
It was submitted that "repetition" does not strengthen the inference that Stromer was motivated to trade in the particular security because he possessed inside information.
The submission in effect was that even if he was induced to acquire a particular security as the result of contact with Joffe, the possibility exists that the inducement "was based on something less than insider information. It is not affected by a similar event occurring on a later occasion": Written Submissions at [8].
In that way it was argued that the evidence of the second event, even if similar, cannot have "significant probative value with respect to the state of mind issue in relation to each Count".
This was referred to as a "deficiency". It was observed that the information, the subject of each Count, was capable of being communicated in a single call and the fact that there was a multiplicity of calls is not probative but was said to be "a potential distraction": Submissions in relation to separate trial application (Stromer) at [9].
A similar line of argument was put in relation to the sale of securities and in relation to the internet checking of share information by Joffe.
I am of the opinion that the matters raised in submissions in respect of "repetition and internet checking by Joffe" are to be considered in context. The evidence in the Crown case in relation to the communications that occurred between Moody's and the various entities (the Credits) are not confined to one document or one email or one telephone conversation on one particular day. Over the period of the relationship between Moody's and its clients the evidence indicates that there were meetings and ongoing communications. It was common for there to be an ongoing supply of information prior to a particular date (such as an announcement of a takeover bid). The progressive provision and accumulation of confidential information coming into Moody's from specific entities is to be taken into account when assessing the probative strength of the co-incidence evidence. Accordingly it is not merely the fact of "repetition" of communications between Joffe and Stromer that is relevant. The evidence concerning the same needs to be considered in the overall context which includes the progressive supply of information to Moody's in many instances. The context also includes matters referred to earlier - the fact and timing of on-line searches in relation to securities in relevant Credits of Moody's and the timing of financial arrangements put in place to enable the acquisitions to be made.
Similarly in the evaluation of alternative inferences, such as 'tipping', it is open for a jury to take into account whether internet searching by Joffe and communications back and forth between Joffe and Stromer is more consistent with inside trading than communication in the nature of phone calls to pass on "a tip".

[18]

Co-incidence Reasoning in relation to the state of mind of Joffe

In relation to Counts 1 and 2 it was observed that the Crown did not assert that Joffe directly received the relevant information. It was submitted that where Moody's employees (other than Joffe) received information, but say they did not pass it on to Joffe, that fact leads to the conclusion that the evidence of other Counts is not available to prove possession of the information by Joffe in a particular Count.
This point raises some matters relied upon by Mr Game in terms of "discrepancies" between particularised information and evidence available to the Crown.
The point does not itself preclude access by other means by Joffe to confidential information. The fact that one person within Moody's received the information but say that they did not pass it on to Joffe assumes that the person receiving the information keeps it to himself or herself rather than it becoming the information of the Moody's organization. Once information is received "in house", unless the evidence shows it to have been secured by a means that would preclude any other person than the receiver having access to the information, then the possibility of access to such information by Joffe remains.
The issue of "repetition" raised in the submissions (and referred to above) again is an issue to be considered in the context of a circumstantial evidence case. In this respect, as noted above, the Crown contends that the co-incidence evidence in relation to the Counts on the indictment exhibits a pattern based upon such matters as set out in paragraph 6 of the Crown Submissions dated 19 March 2012. In that respect the Crown points to a pattern in the evidentiary materials contained in the co-incidence evidence in terms of the volume, frequency and timing of communications between Joffe and Stromer and the communication of information to Moody's, the timing of internet checking or surveillance of securities in a particular entity, followed by the acquisition of financial products by Stromer in relation to the entities that provided Moody's with confidential/insider information.
A pattern of conduct may, particularly in a circumstantial evidence case, be capable of possessing considerable evidentiary force. It is at the end of the day a matter for the jury to determine whether the particular facts concerning particular threads or pieces forming the pattern destroy it or confirm it.
A particular event may not take on much meaning or give rise to inferences standing in isolation. However, when events preceding it and/or post dating it form part of the picture the probative force of the first piece of evidence may become the greater. In earlier stages of these proceedings a reference has been made to the observations of Brennan J in Sutton v R [1984] HCA 5; 152 CLR 528, I consider it appropriate to restate those observations.
Brennan J in Sutton v R (supra) at 550 also emphasised the need to assess evidence in its overall context: "It is often impossible to perceive the similarity between a fact proved directly in evidence and a fact to be proved inferentially or to determine the cogency of the former to prove the latter unless the fact proved directly is seen in the context of the other evidence in the case. Where the Crown seeks to prove or confirm a fact by inference drawn from similar facts, the fact to be proved or confirmed may be likened to a scene depicted in a mosaic and the pieces of evidence - direct and circumstantial - may be likened to the tiles of which the mosaic is composed. The pieces of similar fact evidence may, like the tiles, reveal their significance only in context with the rest of the evidence, appearing insignificant in isolation but clearly revealing the guilty inference when all the evidentiary tiles are locked together."
I have again had regard to the necessary line of inquiry in determining the admissibility of co-incidence evidence as set out at [141] of my Judgment delivered on 17 August 2011.
Additionally, relevant principles to be applied, as stated by Simpson J in R v Zhang [2005] NSWCCA 437; 158 A Crim R 504 must be considered. Those principles are reproduced at paragraph 144 of the Judgment delivered earlier in these proceedings on 17 August 2011.

[20]

The GAS Count

The submission was that the GAS Count diverges from the pattern contended for by the Crown and does so to an extent that it does not have substantial probative value as co-incidence evidence in relation to the other Counts. Similarly it was argued that the other Counts do not have substantial probative value as evidence with respect to it.
In the Written Submissions at paragraph [22] it was submitted: "The divergences from the pattern are: a NS's father, TS and not NS, purchased them. There is no evidence that NS was aware of the trading in these shares. Clearly the possibility that TS was trading in his own right arises. b The GAS acquisition precedes all the other acquisitions, and when regard is had to the other differences, can be said not to fall within the period of the alleged pattern of trading. c The opportunity for inside information relating to GAS to be communicated by DSJ to NS as alleged in the Crown's table A at "3" is minimal: see Crown Statement of Facts (CSF) at [240] - [243]. In the five days between the alleged receipt of inside information by DSJ and the acquisition by NS's father there is only one phone call, which took place on Sunday 11 June 2006 at 2.15 p.m. This call lasted only 28 seconds. There were 8 SMS messages in that same period of time but each of these was sent by the accused to DSJ. d There is no evidence at all of DSJ showing interest in GAS before the acquisition of the GAS financial products on 14 June 2006 (see Crown's table A at "7"). The first time DSJ made any enquiry about GAS on Commsec was on 16 June 2006, which was two days after the accused's father had acquired the shares (CSF at [250]). DSJ's interest in GasNet was consistent with his duties at Moody's. e More than two months passed between the relevant announcement and when NS's father sold the financial products. The announcement in relation to the GAS takeover bid was made on 19 June 2006 (CSF at [252]). NS's father did not sell the shares until 23 August 2006 (CSF at [261]). f Crown evidence establishes that a takeover of GasNet by BBI was contemplated in market reporting (providing a reason for TS to purchase the shares).
I have had specific regard to the particular considerations concerning GAS as set out in the written submissions at [21] - [22]. It is true that many of the matters referred to represent what has been termed "diversions from the pattern". The threads or pieces of evidence constituting a pattern may be uniform although variations may occur and yet a pattern still remains. The fact that the GAS transaction was first in time means only that it may be the initial step in a course of conduct or, as the Crown contends, a joint venture. The fact that the acquisition was made by a relative may, but may not, constitute fact which destroys the pattern of trading.
I have previously considered the facts concerning GasNet. I have, in particular, considered the possibility that the transaction the subject of the GAS count has an innocent explanation. However, I do not consider that, taken in context, that the variations or "divergences", referred to of themselves are of sufficient weight to deprive the evidence concerning the GAS count of its significant capacity as co-incidence evidence.

[21]

CONCLUSIONS

The evidence which the Crown seeks to rely upon in establishing its case does not depend only upon co-incidence evidence to establish the elements of the offences the subject of the 10 Counts against Joffe and the 10 Counts against Stromer.
The evidence which the Crown seeks to rely upon falls into two categories. The first is circumstantial evidence constituted by a number of pieces of evidence. It is commonplace that the elements of an offence may be established other than by direct evidence. Proof of a number of facts may provide the foundation for establishing, by process of inference, other facts by which elements of an offence are proved: Edwards v The Queen (supra) at 201.
In the present case the Crown relies upon individual pieces of evidence to establish a basis for inference fact finding, the drawing of inferences, of course, being part of the process of finding material facts: Edwards v The Queen (supra) at 202.
Accordingly the Crown case seeks to rely both upon facts from which other facts relevant to the facts in issue may be inferred, and additionally to rely upon co-incidence evidence to strengthen its case in that respect.
Many of the submissions made for both accused focussed upon the proposition that the Crown seeks to essentially rely upon co-incidence evidence to establish the elements of possession and communication. That, of course, is not the case. The Crown seeks to erect the superstructure of its case based upon both circumstantial evidence constituted by primary facts as well as co-incidence evidence in support of its case as to the existence of a 'system' or 'joint venture' with respect to insider trading.
The co-incidence evidence the Crown seeks to rely upon does, in my assessment, have significant probative value for the purpose of s.98. In arriving at the conclusion which I have expressed in that respect, I have sought to test the strength of the co-incidence evidence by assuming the possibilities to which I have referred do exist, but that notwithstanding, I have, in my assessment, concluded that such possibilities do not substantially alter the capacity for cogency which the co-incidence evidence possesses.
On a consideration of the evidence which the Crown seeks to rely upon I do not consider in the assessment or evaluation required by s.98 that it strongly either supports or gives rise to the alternative explanations or inferences raised by the accused Joffe or Stromer and/ or as identified for consideration in the judgment of Whealy JA. In any event the capacity of the co-incidence evidence remains, in my assessment, strong and cogent even if it be assumed that the alternatives are open on that evidence.
I have considered the application of s.101 of the Evidence Act to the facts of this case. Given the number of Counts to be tried in the one trial and having regard to the submissions that have been made on behalf of both accused to which I have referred as to "prejudice" arising from a joint hearing considered, I consider that it is prudent to further inquire into the way in which the Crown intends to proceed at hearing, so that I will be in a fully informed position to evaluate submissions that have been made on behalf of each accused. It is my intention, following a further hearing on that matter, to then make a ruling as to whether the co-incidence evidence can be used in accordance with the provisions of s.101 of the Evidence Act.
I confirm the order I have made to the effect that the co-incidence evidence is admissible pursuant to s.98 of the Evidence Act.

[23]

AIA KEY EVENT RELEVANT TELEPHONE CONTACT BETWEEN JOFFE & STROMER 4:00pm, 3 July 2006 Joffe attended meeting with B&B regarding a proposed takeover bid for an unidentified airport. 12:30pm, 1 August 2006 • 12:01pm, 5 August: Stromer rang Joffe on his home phone (0:25) Joffe attended meeting with B&B where AIA is identified as the target airport. 12:06pm, 2 August 2006 • 2:04pm, 6 August: Stromer rang Joffe on his home phone (01:14) Joffe received an email from Timar of B&B containing further detail regarding the proposed takeover. 12:10PM, 7 August 2006 • 12:14pm, 7 August: Stromer SMS to Joffe Stromer spoke to UBS Wealth Management by phone. 8 August 2006 • 7:16pm, 9 August: Stromer rang Joffe on his home phone (3:30) Stromer purchased AIA shares through UBS 1:24pm, 10 August 2006 • 1:32pm, 10 August: Stromer SMS to Joffe Stromer spoke to UBS Wealth Management by phone. • 12:02pm, 15 August: Stromer SMS to Joffe 12:03pm, 15 August 2006 Stromer spoke to UBS Wealth Management by phone. • 2:50prn, 12 September: Stromer SMS to Joffe 10:17am, 12 September 2006 • 7:46pm 12 September: Joffe rang Stromer on his home phone (0:30) Joffe received email from Wells informing him that all is not going to plan with the takeover of AIA. • 8:27pm, 12 September: Stromer rang Joffe on his mobile (0:44) • 9.01pm, 12 September: Joffe rang Stromer on his home phone (10:34) • 10:46am, 13 September: Stromer SMS to Joffe 10:43am. 13 September 2006 Stromer placed order to sell AIA shares.

[24]

AWB KEY EVENT RELEVANT TELEPHONE CONTACT BETWEEN JOFFE & STROMER • 10:12pm, 20 September: Joffe rang Stromer on his home phone (039) • 2:14pm, 21 September: Stromer rang Joffe on his mobile(1:00) • 9.27pm, 21 September: Joffe rang Stromer on his home phone (0:39) • 10:28pm, 21 September: Stromer rang Joffe on his mobile (6:30) • 1:06pm, 23 September: Stromer SMS to Joffe • 3:22pm, 23 September: Stromer SMS to Joffe 2:30pm, 20 September 2006 • 3:28pm, 23 September: Joffe rang Stromer on his mobile (2:30) Joffe attended meeting with AWB, where he received information about the proposed indemnity of AWBI, and the reduce wheat forecasts. • 4:33pm, 23 September: Joffe rang Stromer on his mobile (5:30) • 4:39pm, 23 September: Joffe rang Stromer on his mobile (0:30) • 4:41pm, 23 September: Joffe rang Stromer on his home phone (0:25) • 4:42pm, 23 September: Joffe rang Stromer on his mobile (0:30) • 5:14pm, 23 September: Stromer called Joffe on his mobile (6:00) • 7:32pm, 23 September: Joffe called Stromer on his home phone (9:35) • 1:34pm, 24 September: Joffe called Stromer on his home phone (0:12) 11:28am, 25 September 2006 Strome r spoke to CMC by phone • 11:43am, 25 September: Stromer rang Joffe on his mobile (5:00) 12:13pm. 25 September 2006 • 3:12pm, 25 September: Stromer rang Joffe on his mobile (1:00) Stromer spoke to CMC by phone • 8:36pm, 25 September: Joffe rang Stromer on his home phone (19:29) • 9:58am, 27 September: Stromer rang Joffe on his mobile (1:00) 10:45am, 27 September 2006 • 10:53am, 27 September: Joffe called Stromer on his mobile (2:20) Stromer commenced acquiring short AWM CFDs • 1:51pm, 27 September: Joffe rang Stromer on his mobile (5:30). 11:06am - 12:54pm 27 September 2005 • 4:29pm, 27 September: Stromer sent Joffe two SMS's Stromer became aware of the margin call on his AWB account, and resolved the issue by paying $28,000 into his CMC account. This is confirmed by phone at 12.54pm. • 8:49pm, 27 September: Joffe rang Stromer on his home phone (0:23) • 9:06pm, 27 September: Stromer rang Joffe on his mobile (10:00) • 9:49pm, 27 September. Stromer called Joffe on his home phone (17:28) • 3:07pm, 28 September: Stromer SMS to Joffe 10:25am, 28 September 2006 • 7:09pm, 28 September: Joffe rang Stromer on his mobile (0:24) AWB made announcements regarding the AWBI indemnity, and the wheat forecasts. • 9:12pm, 28 September: Joffe rang Stromer on his mobile (0:12) • 9:30pm, 28 September: Stromer rang Joffe on his home phone (21:16) • 9:53pm, 28 September: Joffe rang Stromer on his mobile (43:05) • 10:15am 29 September: Stromer SMS to Joffe • 10:30am, 29 September: Stromer SMS to Joffe • 10:42am, 29 September: Stromer SMS to Joffe • 11:11am, 29 September: Joffe rang Stromer on his mobile (1:00) • 11:50am, 29 September: Stromer rang Joffe on his mobile 11:51am -12.350m, 29 September 2006 • 12:54pm, 29 September: Stromer rang Joffe on his home phone Stromer disposed of 15,000 AWB CFDs 12:570m -2:36pm, 29 September 2006 • 2:37pm, 29 September: Joffe rang Stromer on his mobile (1:00) Stromer disposed of the remainder of his AWB

[25]

BLD KEY EVENT RELEVANT TELEPHONE CONTACT BETWEEN JOFFE & STROMER 25 October 2006 Boral meeting with Moodys, where Moody's representatives (not Joffe) were told of the lower anticipated results. 10:37am, 26 October 2006 • 12:25pm, 26 October: Joffe rang Stromer on his mobile (1:30) Joffe visited the CommSec page for BLD • 1:18pm, 26 October: Stromer calls Joffe on his mobile (3:00) 2:17pm - 3:15pm, 26 October3006 Stromer acquired 54,200 BLD short CFDs • 3:19pm, 26 October: Stromer rang Joffe on his mobile (1:30) 9:37am, 27 October 2006 • 10:07am, 27 October; Joffe rang Stromer on his mobile (2:00) BLD announcement to the market regarding reduced yearly profit expectation. • 10:18am, 27 October: Stromer rang Joffe on his mobile (1:00) • 12:05pm, 27 October: Stromer rang Joffe on his mobile (2:00) 3:29 - 3:32pm, 27 October 2006 • 3:31pm, 27 October: Stromer 5M5 to Joffe Stromer reduced his position in BLD short CFDs • 3:32pm, 27 October: Stromer rang Joffe on his mobile (1:30) 10:14am - 10:44am, 2 November 2006 • 10:16am, 2 November Stromer SMS to Joffe Stromer further reduced his position in BLD short CFDs • 11:36am, 2 November: Stromer rang Joffe on his mobile (3:00) 1123pm - 2:19om, 8 Nov reAlber 2006 • 8:18pm, 8 November: Joffe called Stromer on his home phone (0:33) Stromer further reduced his position in BLD short CFDs • 10:19pm, 8 November: Joffe called Stromer on his home phone (0:08) • 10:44am, 13 November: Joffe rang Stromer on his mobile (0:32) • 11:51am, 13 November: Joffe rang Stromer on his mobile (2:32) • 2:17pm, 13 November: Joffe rang Stromer on his mobile (1:40) • 2:23pm, 13 November: Joffe rang Stromer on his mobile (1:34) 11:54am - 12:20orp. 13 November 2006 • 2:27pm, 13 November: Joffe rang Stromer on his work phone (9:17) Stromer closed out his position in BID short CFDs. • 2:48pm, 13 November: Joffe rang Stromer on his mobile (0:52) • 2:56pm, 13 November: Stromer SMS to Joffe • 3:25prn, 13 November: Stromer rang Joffe on his mobile (1:30) • 6:11pm, 13 November Joffe rang Stromer on his mobile (0:34)

[26]

AIHCA KEY EVENT RELEVANT TELEPHONE CONTACT BETWEEN JOFFE & STROMER 3:27pm, 10 November 2006 Atkins of Moody's received call from Deloub of Alinta informing him of the proposed takeover of AIHCA, and APT. 3:36pm, 10 November 2006 • 3:38pm, 10 November: Joffe rang Stromer on his mobile (2:39) Joffe visited the CommSec page for AIHCA • 7:38pm, 10 November: Joffe rang Stromer on his home phone (0:22) 9:27am - 10:34atn. 13 November 2006 • 10:44am, 13 November: Joffe rang Stromer on his mobile (0:32) Stromer made arrangements to transfer $70,000 into his CMC account. At 10:34 he sent a fax to CMC confirming his deposit. 11:46am, 13 November 2006 • 11:51am, 13 November. Joffe called Stromer on his mobile (2:32) Stromer commenced acquiring AIHCA CFDs. • 2:17pm, 13 November: Joffe rang Stromer on his mobile (1:40) • 2:23pm, 13 November: Joffe rang Stromer on his mobile (1:34) 12:01pm - 3:36pm, 13 November 2006 • 2:27pm, 13 November: Joffe rang Stromer on his work phone (9:17) Stromer acquired further AIHCA CFDs. • 2:48pm, 13 November: Joffe rang Stromer on his mobile (0:52) • 2:56pm, 13 November: Stromer SMS to Joffe • 3:25pm, 13 November: Stromer rang Joffe on his mobile (1:30) • 6:11pm, 13 November: Joffe rang Stromer on his mobile (0:34) • 9:57am, 14 November: Stromer SMS to Joffe 9.44am, 14 November 2006 • 9:58am, 14 November: Joffe rang Stromer on his work phone (3:07) Stromer deposited the Joffe $30,000 cheque into his Westpac account, and arranged for a $30,000 cheque to be drawn on the same account in favour of CMC. • 10:10am, 14 November: Stromer rang Joffe on his mobile (2:30) • 10:16am, 14 November: Stromer rang Joffe on his mobile (1:30) 11:29am, 14 November 2006 • 11:35am, 14 November: Stromer rang Joffe on his mobile (1:30) Southwell, of CMC, informed Stromer that the $70,000 deposit from the previous day would now require a 5-day clearance period. • 1:22pm, 14 November: Joffe called Stromer on his mobile (7:24) 11:46am - 12:10pm, 14 November 2006 • 1:32pm, 14 November: Joffe called Stromer on his mobile (8:29) Stromer acquired further AIHCA CFDs. • 2:17pm, 14 November: Stromer called Joffe on his mobile (4:30) • 2:36pm, 14 November: Stromer called Joffe on his mobile (5:00) • 3:54pm, 14 November. Joffe called Stromer on his mobile (3:27) 9:43am, 15 November 2006 • 9:52am, 15 November: Joffe rang Stromer on his mobile (0:54) Alinta announced the takeover bid for AIHCA. • 10:28am, 15 November: Stromer rang Joffe on his mobile (1:30) • 10:59am, 15 November: Stromer SMS to Joffe 11:07am, 15 November 2006 • 11:21am, 15 November: Stromer called Joffe on his mobile (1:30) Stromer commenced selling AIHCA CFDs. 11:23am, 15 Novpmber 2006 • 7:03pm, 15 November: Joffe rang Stromer on his home phone (40:54). Stromer sold the remainder of his AIHCA CFDs. • 9:31pm, 15 November: Stromer rang Joffe on his home phone (7:25)

[27]

SRG (counts 6 - 9 & 16 - 19) KEY EVENT RELEVANT TELEPHONE CONTACT BETWEEN JOFFE & STROMER 4.56pm. 27 November 2006 Email Invitation sent to Joffe for Moody's meeting re Transurban. Email suggested SRG might be the target. 5:03pm, 27 November 2006 Above email withdrawn. 3:29pm, 28 November 2006 • 3:36pm, 28 November: Joffe rang Stromer on his mobile (4:00) Joffe and Howell spoke by mobile phone. 3:53pm, 28 November 2006 Stromer spoke with CMC by phone. 2:00pm, 30 November 2006 Moody's meeting with Transurban, not attended by Joffe, where Moody's were informed of Transurban's proposed bid for SRG. 2.22pm - 2:27pm 30 November 2006 • 2:34pm, 30 November: Stromer SMS to Joffe Stromer make his first acquisition of SRG CFDs 1 December 2006 (AM) • 10.26am, 1 December: Joffe rang Stromer on his mobile (0:13) Stromer withdrew $70,000 in cash from his ANZ account. • 11:24am, 1 December: Joffe rang Stromer on his mobile (4:10) 12:55pm, 1 December 2006 At 12.55pm, Stromer deposited the $70,000 cash into his IG Markets account. • 2:37pm, 1 December: Stromer called Joffe on his mobile (2:30) 1:580pm - 2:17pm, 1 December 2006 • 2:46pm, 1 December: Joffe called Stromer on his mobile (1:24) Stromer acquired further SRG CFDs • 6:32pm, 1 December: Joffe called Stomer on his mobile (0:30) • 6:33pm, 1 December: Stromer called Joffe on his mobile (0:30) • 6:35pm, 1 December: Stromer called Joffe on his home phone (20:17) • 2:05pm, 4 December: Stromer rang Joffe on his mobile • 2:23pm, 4 December: Stromer SMS to Joffe 2:46pm - 2:530pm, 4 December 2006 Stromer acquired further SRG CFDs 4:00pm - 4:19pm, 4 December 2006 Stromer acquired 500,000 SRG warrants • 9:13pm, 4 December: Stromer rang Joffe on his home phone (65:53) • 11:12am, 8 December: Joffe rang Stromer on his mobile (1:00) • 11:39am, 8 December: Stromer rang Joffe on his mobile (2:30) 11:43am, 8 December 2006 • 12:57pm, 8 December: Joffe rang Stromer on his mobile (0:54) Stromer acquired a further 400,000 SRG warrants • 2:15pm, 8 December: Stromer rang Joffe on his mobile (2:00) 9:12am, 14 December 2006 Transurban bid announced • 11:02am, 14 December: Joffe rang Stromer on his mobile (0:59) • 11:15am, 14 December: Stromer SMS to Joffe 11:26am - 11:38am, 14 December 2006 • 11:40am, 14 December: Stromer SMS to Joffe Stromer disposed of his SRG CFDs and warrants • 9:01pm, 14 December: Joffe called Stromer on his home phone (44:32)

[28]

RIN KEY EVENT RELEVANT TELEPHONE CONTACT BETWEEN JOFFE & STROMER 15 January 2007 Fullerton became aware Rinker would be approaching Moody's to obtain ratings assessments of various hypothetical defensive actions they were considering in response to the Cemex takeover bid. 3:22pm, 17 January 2007 Fullerton received an email from Rinker setting out further details of the defensive strategies, which he forwarded to Brown at 5:28pm. 4:23pm & 5:54pm, 17 January 2007 • 6:15pm, 17 January: Joffe rang Stromer on his mobile (0:49) Joffe visited the CommSec page for Rinker. • 8:57pm, 17 January: Stromer rang Joffe on his mobile (0:51) 9:00am - 12:00pm, 19 January 2007 • 6:51pm, 19 January: Joffe rang Stromer on his home phone (1:34) Moody's meeting with Rinker, not attended by Joffe, where they were provided with additional information, In addition to the expected increase in earnings. 2:21pm, 22 January 2007 Stromer commenced acquiring RIN CFDs 23 January_2007 • 7:44pm, 23 January: Stromer rang Joffe on his home phone (0:17) Stromer acquired further RIN CFDs 25 January_2007 • 11:51am, 25 January: Stromer range Joffe on his mobile (3:45) Stromer acquired further RIN CFDs • 26 - 28 January: Joffe and Stromer contacted one another by phone on 11 occasions. 29 January_2007 Stromer acquired further RIN CFDs 8:30am, 30 January 2007 RIN announced 3rd quarter profits increase. 10:07am, 30 January 2007 • 4:20pm, 30 January: Stromer SMS to Joffe Stromer commenced selling RIN CFDs. 10:07am, 31 January 2007 Stromer commenced selling RIN CFDs. 1 February 2007 • 6:07pm, 1 February: Joffe range Stromer on his mobile (0:12) Stromer sold out his RIN CFD position, and opened a short position.

Joffe v R; Stromer v R

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (29 paragraphs)

Legislation Cited (1)

Cases Cited (10)