R v Doff

ASIC v Petsas [2005] FCA 88 Dinsdale v The Queen (2000) 115 A Crim R 558 House v The Queen (1936) 55 CLR 499 Jones v The Queen (1997) 191 CLR 439 M v The Queen (1994) 181 CLR 487 R v Corner NSWCCA 19 December 1997 R v Cribb District Court of WAS, 9 June 1998 R v Hannes (2000) 158 FLR 359 R v Hannes (2002) 173 FLR 1 CASES CITED: R v Kin Lang Teh, District Court of Victoria, 2 September 1991 R v Martin (1994) 74 A Crim R 252 R v Moore and Weibe NSWCCA 11 August 1992 R v Morgan (1993) 70 A Crim R 368 R v Pangello (1991) 56 A Crim R 441 R v Pantano (1990) 49 A Crim R 328 R v Radloff (1996) 88 A Crim R 26 R v Rivkin [2004] NSWCCA 7 R v Wall [2002] NSWCCA 42 R v Williams NSW District Court, 4 October 1996

R J H Maidment SC with P R McGuire (Crown) COUNSEL: P Byrne SC with M Thangaraj

Commonwealth Director of Public Prosecutions SOLICITORS: John De Mestre & Company

• 1 - IN THE COURT OF CRIMINAL APPEAL 2004/3053

WOOD CJ at CL ADAMS J BELL J

Friday 8 April 2005 Regina v Robert Bart DOFF Judgment 1 THE COURT: The Appellant was convicted following trial before Justice Barr, and a jury, on a count of insider trading brought pursuant to s 1002G(2) and s 1311(1) of the Corporations Act 2001. He was sentenced to serve 350 hours of community service and to a $30,000 fine. He was also ordered to pay a penalty under the Proceeds of Crime Act 2002 of $37,225.75. 2 The Appellant now brings an appeal against the conviction. The Crown has filed an appeal against the leniency of the sentence.

Facts 3 On 24 April 2004 there was a meeting at the Appellant's business premises, which was attended by Gerard McGowan, Mark McGowan, Spiros Dassakis and the Appellant. The purpose of the meeting was to discuss Gerard McGowan's interest in purchasing a property in Bellevue Hill, which was owned by Rene Rivkin, or by a company, of which he was the effective controller. The Appellant had been engaged by Mr Rivkin to act as his agent for the sale and there had been some earlier discussions between him and Mr Gerard McGowan, in which the latter had expressed an interest in purchasing the property, having initially indicated that the "timing was wrong, and subsequently that he was "in the process of selling a part of the business that (he) owned and if that was successful (he) would be interested in making an offer on the property". 4 It was in the course of this meeting that the information, which was the subject of the charge, was alleged to have been supplied. Not all of those who were present gave the same account of the words spoken by Gerard McGowan, and it is that circumstance which is at the heart of this appeal. 5 Leaving aside immaterial discussions, the various versions which were given of the transaction which was on foot, or in the course of implementation, involving Impulse Airlines, a business owned by an unlisted company of which Gerard McGowan was the executive chairman, and largest shareholder, and Qantas Airways Limited ("Qantas") were as follows.

Gerard McGowan 6 He gave evidence that Mr Dassakis, who had attended the meeting to represent Mr Rivkin's interests, said that Mr Rivkin: "Would need to know the details of the business (he) was selling and who the potential purchaser was".

Gerard McGowan said that he "didn't want to disclose the details of the sale because it would compromise both him and…Mr Rivkin",

but did give the following reply in answer to this observation: "We were in the process of a sale of part of our business of Qantas . However we needed ACCC approval before that transaction could go through. Then I went on to warn him that now that he had that knowledge, he could not trade in Qantas shares." 7 Mr McGowan said that the Applicant was present at the time of this conversation. He also said that, in the course of a telephone conversation with Mr Rivkin, which occurred a little while later during the meeting, in the presence of the Applicant he had said words to the effect: "I am currently negotiating with Qantas for a sale of part of my business to them. I need ASIC approval for that transaction to complete. I am interested in purchasing your property."

He added that: "I also warned Rivkin that now he had that knowledge, he couldn't trade in Qantas shares."

Mark McGowan 8 This witness, who was the Chief Financial Officer of Impulse and one of those involved in the team that was engaged in the negotiations with Qantas, gave evidence that Gerard McGowan said that he would purchase Mr Rivkin's property, but indicated that he needed a clause in the contract making it conditional upon a "government approval for a business deal that was imminent".

He added that Gerard McGowan also said: "Well Impulse is going to merge its business with Qantas and now that I have disclosed that information you cannot trade in Qantas shares." 9 In relation to the telephone conversation with Mr Rivkin, it was his evidence that Gerard McGowan said: "…the funds were coming from a deal that required government approval and the deal was that Impulse merge its business with Qantas , that he needed a week or so for that approval to come through from the ACCC to complete the purchase and he also then warned him that now he had disclosed it to him that he couldn't trade in Qantas shares."

This account was not challenged in cross-examination.

Spiros Dassakis 10 Spiros Dassakis' account of the discussion during the meeting was to the effect that: "Mr McGowan expressed interest at a level (sic), purchasing Mr Rivkin's home. That sale was conditional, as he put it, on a financial arrangement being made with his company , and that arrangement was subject to ACCC approval."

The telephone conversation, he said, was to the effect that: "his [Gerard McGowan's] company was entering into a financial arrangement with, I believe it was Qantas , and he expressed great interest in purchasing the property."

11 The Appellant did not give evidence in the trial, nor was Rene Rivkin called in his case. Although the Appellant was entitled to exercise the right of silence, without any adverse inference being drawn, it follows that there was no evidence from him either as to what was said, or as to what he understood was being conveyed. 12 This meeting took place at a time of turmoil in the passenger carrying aviation industry. There had been much recent media interest in what was described as a "price war" between Qantas, Virgin Blue, Ansett and Impulse, particularly affecting the business on trunk routes in Eastern Australia. 13 From about late March 2001, Qantas and Impulse had been involved in secret discussions with a view to arranging some kind of merger of their respective businesses. It was the Crown case that no information as to the fact of those negotiations became "generally available", and the negotiations remained a closely guarded secret, until the early afternoon of 1 May 2001. 14 There was evidence available to show that at 2:38 PM on 24 April 2001, that is about 3 hours after the meeting, the Appellant telephoned Mr Kerstens of Rivkin Discount Stockholding Pty Limited and instructed him to place an order for 20,000 Qantas shares to be purchased in the name of Jetoten Pty Limited (Jetoten), of which he was a 50% shareholder and sole Director and secretary, at a price that was to be at Mr Kersten's direction. 15 These shares were then purchased between 2:41 PM and 3:49 PM at an average price of $2.785 per share, for a total price of $55,855.05. 16 At the time of this meeting the Appellant, through an entity under his control called Benbat, already held 20,000 shares in Qantas, being the balance of a parcel of 50,000 shares, which he had purchased through Mr Kerstens in December 1999. His last dealing in Qantas shares had been on 21 January 2001. 17 On 1 May 2001 the Australian Stock Exchange was informed of the deal and Impulse and Qantas made a joint public announcement to the effect that Impulse was withdrawing "from operating scheduled air services under its own brand". This release noted that the two airlines had entered into "a long term commercial relationship" that would involve Impulse "contracting to Qantas" it's aircraft, complete with pilots and cabin crew; Impulse operating some services for Qantas under the Qantas brand and livery; Impulse continuing services to some destinations and operating new services to some ports where Qantas did not currently operate; and Qantas lending funds to Impulse for a shareholder buyback and for working capital. 18 On 1 May 2001, shortly after this announcement the Appellant instructed Mr Kerstens to seel 10,000 of the Qantas shares held by Jetoten, which were then sold at a price of $3.33 per share. On 16 May 2001 he instructed Mr Kerstens to sell the balance of its parcel of 20,000 shares, which instruction was carried into effect on the following day at a price of $3.42 per share. The profit from the purchase and sale of the shares was $11,400.70. 19 There was evidence, which was held admissible in R v Hannes (2000) 158 FLR 359 at [299] and in R v Rivkin [2004] NSWCCA 7 at [187] to [201], to show that the price of Qantas shares rose sharply after this announcement, a circumstance consistent with the proposition that, notwithstanding rumours and speculation, information in relation to the deal had not previously been generally available and that it was price sensitive.

Ground 1 - The verdict is unreasonable having regard to the evidence on the question whether the 'information' specified in element (b) (of the Directions) was in the possession of the Appellant. The evidence is insufficient to establish to the criminal standard either of the following facts necessary to prove that the Appellant was in possession of the 'information': (i) that Gerard McGowan said both of the things set out at (i) and (ii) of the information; (ii) that if Gerard McGowan said both of those things, that the Appellant heard and understood both of those things.

Ground 2 - The verdict of the jury is unreasonable having regard to the evidence: Criminal Appeal Act 1912 s 6(1) 20 The two grounds are closely linked and can conveniently be dealt with together. 21 It is common ground that the elements of the offence charged, which the Crown had to establish beyond reasonable doubt were as follows:

(a) On 24 April 2001 the appellant procured Jetoten Pty Limited to purchase 20,000 Qantas shares (the purchase).

(b) When the Appellant procured the purchase he had the following information ("the information"): (i) Mr Gerard McGowan said words to the effect that there was a deal for the merging of Impulse's business with Qantas;

(ii) Mr Gerard McGowan said words to the effect that he had to wait for ACCC approval of the deal before buying 5 Rose Bay Avenue Bellevue Hill.

(c) The information was not generally available when the appellant procured the purchase.

(d) If the information had been generally available when the appellant procured the purchase a reasonable person would have expected it to have a material effect on the price or the value of securities of a body corporate, namely ordinary shares in Qantas Airways Limited.

(e) When the Appellant procured the purchase he knew or ought reasonably to have known that the information was not generally available and;

(f) When the Appellant procured the purchase he knew or ought reasonably to have known that if the information had been generally available it might have had a material effect on the price of Qantas shares. 22 There was ample evidence available to show that the Appellant was present throughout the meeting and the phone call, and it was clearly open to the jury, particularly in the absence of any evidence to the contrary, that he was in a position to hear what it was that Mr Gerard McGowan said. What was said was of no great complexity, and given the Appellant's interest in effecting a sale of Mr Rivkin's property, and the indication of a need for a conditional agreement, the inference is irresistible that he would have taken in and understood what was said. 23 Additionally, the three witnesses who were called each made reference to the need for ACCC approval for the deal of which Mr Gerard McGowan spoke. While only two of the witnesses recalled a caution being given as to the inability of those present to deal in Qantas shares, again there was a proper basis for the jury to have been satisfied beyond reasonable doubt as to that aspect of the conversation which was not, in any event, relied upon as part of the information. 24 It follows that the question which arises for this Court is confined to whether or not the jury ought to have entertained a reasonable doubt as to whether what was said conveyed "the information" which was the subject of the charge. That issue was effectively reduced to whether the jury could be satisfied beyond reasonable doubt that the information conveyed and understood involved a "deal for the merging of Impulse's businesses with Qantas". 25 Although there were, during the trial, two attempts by the Crown to amend the particulars of "the information", and a good deal of discussion in this regard, the particulars which were supplied approximately six weeks before the trial, as set out above, were in all material respects those upon which the Crown case went to the jury. 26 The fact that amendments had been made to the particulars preceding the trial, and that applications had been made during the trial, was relied upon by the Appellant in support of a proposition that it indicated that the Crown was itself uncertain as to what "the information" was, thereby lending support to the reasonable doubt argument. 27 We are not persuaded that such a submission has any merit. Whether or not the verdict was unreasonable, within the meaning of s 6(1) Criminal Appeal Act 1912, and within the principles established in Jones v The Queen (1997) 191 CLR 439; and M v The Queen (1994) 181 CLR 487 at 493, is to be determined by reference to the way in which the case was left to the jury, and to the evidence which was admitted in the trial. In the end the case was opened and left to the jury in precisely the same terms, and the attempts to amend the particulars, which were made in the absence of the jury, were of no significance. 28 The importance of the information being properly identified is obvious, since it not only defines the content of the second element which must be proved; it also has an impact on element three, that is, whether the information was or was not generally available; and on element four, that is, whether the information would or would not have been likely to have had a material effect on the price of the shares purchased. This centralised significance of the information was recognised in R v Hannes (2000) 158 FLR 359 by Spigelman CJ at [26] to [28]. 29 The Appellant submitted that: "A statement to the effect that there was a deal for the merging of Impulse's business with Qantas is materially different from a statement to the effect that there was a process for the sale of part of the Impulse business to Qantas." 30 In support of that submission, it argued that a 'merger' conveys something in the nature of a joining together of two entities so that they would effectively become one, in which event it could sensibly be said that there would be no competition between them. On the other hand, it was argued, the sale of part of a business envisages that the part of the business which is not sold will remain in existence, leaving open the possibility of continuing competition between them. 31 The submission which was pursued accordingly focussed upon the fact that there were three competing versions of the conversation, with the result, it was contended that, if the jury considered it reasonably possible that the words used were those given in evidence by Gerard McGowan, or alternatively by Spiros Dassakis, then they had to entertain a reasonable doubt about element two, and as a result a reasonable doubt also in relation to elements three and four. 32 The critical issue which arose was clearly identified by Barr J for the jury. His Honour initially explained that: "it is with the effect of the words that you are concerned. The Crown does not say, and does not have to prove, that Mr McGowan said literally, "there is a deal for the merging of Impulse's business with Qantas", as though it were a tape recorder playing his voice back. And the Crown does not say, and does not have to say, that Mr Gerard McGowan literally used the words, "I have to wait for ACCC approval". What the Crown says, what the Crown charges and what it binds itself to prove is that those two meanings were the effect of the words that Mr McGowan used." 33 His Honour then gave clear and explicit directions that the jury were to concentrate on the words used and were not concerned with anything which the Appellant later learned from other sources, including the press release which related to a concluded deal. 34 Turning to the issue which has been ventilated in this appeal, his Honour said: "I suppose the principal difference between the two sides on the meaning of Mr McGowan's words is this question whether the versions given by Gerard McGowan, Mark McGowan and Mr Dassakis can really stand together. Both counsel said a lot to you about them, but really, perhaps the most important that each of them said was that the Crown said these three versions of the words used by Mr Gerard McGowan can stand together, and you look at them all, and they can prove beyond reasonable doubt that what Mr McGowan was saying was to the effect that there was a deal for the merging of Impulse's business with Qantas. The Crown says it would be rather surprising if three parties to a conversation came along a long time after the event and gave three identical verbatim accounts of what was said. It is not the sort of thing you expect, the Crown would say. The versions have differences, but the differences do not amount to inconsistencies. The versions can stand together. That is the first thing. The second thing is that they can have, you are entitled to find that they do have, the meaning contended for by the Crown set out in paragraph (i) of the Elements document. The contrary submission is this: Merger is one thing, and I think Mr Byrne used the word "takeover". Well, there has not been, I do not think there has been, evidence about takeover, but the concept was the same. Merger is one thing. Merger is an arrangement whereby two companies will, in some way, become one. And in the context of this, one company was a very large one - Qantas - and one was a very small one. One would cease to exist. That is the concept of merging, Mr Byrne says, and that must really be the flavour you get from the words used by Mr McGowan. Yet he did not say that, he said that the deal or the negotiation was about selling part of the business of Impulse to Qantas, and Mr Byrne says they are two entirely different concepts and they do not stand together. Now, I am not going to repeat the submissions made about this. You have just heard them both, and I am not here to repeat the parties' submissions to you. But that, it seems to me, is the nub of what each side is saying to you about the ability of this evidence of the three people to prove beyond reasonable doubt that that was the effect of the words used by Gerard McGowan. The Crown drew attention to what it said was the consistency between the different versions of what was said. A commercial transaction, the Crown says. There is nothing inconsistent between the sale of part of a business and a merger. The merger will happen in that way. Mr Mark McGowan was the only one who used the word merger. He was the only one that put that word into the mouth of Gerard McGowan, but the Crown says you can be satisfied beyond reasonable doubt that that is what the words meant. That is what the Crown has to prove. There were arguments, - let me say again that Mr Byrne has pointed you to the differences, points out that Mr Dassakis, not only does not mention merger, he does not mention a part sale. He says just a vague thing about a commercial transaction." 35 His Honour then turned to the requirement for the Crown to prove that the Appellant "heard and understood the information", and carefully summarised the various aspects of the evidence concerning his presence in the office while the conversation proceeded, and the submissions made in relation to this issue, including the possibility that the appellant might have been distracted or in some way disengaged while Gerard McGowan spoke the words in question. 36 We are not persuaded that the verdict was unreasonable. 37 First there was no challenge to the testimony of Mark McGowan, which was precisely in accordance with the particulars. There is no basis for a contention that his version was so inherently unreliable that no reasonable jury could properly have convicted upon it. The assessment of which version to accept was quintessentially one for the jury who saw and heard the witnesses. 38 Secondly, the word "merging" has no particular technical meaning. When used in the context of two businesses, it may imply either a total or partial joinder of their activities and it can include a transaction in the nature of a sale, which results in some lessening of competition between them. 39 Thirdly, it is important to consider the two components of "the information" together, just as the jury were invited to do at trial. 40 In this regard it is not to be overlooked that the information was particularised in terms of being "to the effect that there was a deal for the merging of" the two businesses. In circumstances where it was made clear, on all three versions, that the deal required ACCC approval, and where the listeners were informed that they were now not free to deal in Qantas shares, there was an irresistible inference available that the transaction involved a form of merger involving a reduction in competition in the Australian passenger aviation market. 41 Fourthly, the action of the appellant in placing a purchase order for shares in a company in which his last trade had occurred 15 months earlier, gave rise to the strong inference that he had received information which he understood and recognised for its potential value as being likely to cause a rise in the price of the shares once the information was released to the public. 42 Counsel did not embrace the proposition, which was ventilated during the appeal, that recourse to the terms of the discussions between Impulse and Qantas, as at 24 April, may have had a bearing on the probability of what it was that Gerard McGowan had said. In those circumstances we do not ourselves place reliance upon that consideration in reaching a conclusion that the verdict was not unreasonable, even though we consider that it was something upon which reliance could have been placed, and which it would only tend to fortify our assessment of the way in which the issue as to this element should have been decided. 43 It follows from the foregoing that the argument concerning elements 3 and 4 to the effect that the expert evidence did not adequately deal with the general availability, or the price sensitivity of the alternative versions of the information which it was suggested were to be derived from the evidence. 44 An alternative or additional submission was however advanced, in relation to the third element, that it was reasonably possible that information of the kind particularised was generally available to the market via the articles that had appeared in the Bulletin Magazine on 17 April 2001 entitled "Reverse Thrust", in the journal "Australian Aviation" of March 2001, and in the Australian Newspaper of 21 April 2001 entitled "Who is the Weakest Link". Reliance was also placed upon the terms of the conversation between Mr Mark Colvan of the ABC, and Mr Simon Westaway of Impulse, relating to a rumour that Impulse was about to close its doors, and upon the unusually high turnover of Qantas shares that was disclosed in the sales graph that was tendered. 45 We are unable to accept that the rumours with which these articles or interviews dealt, or the speculation that was invited, bears any resemblance to the specific information which was effectively disclosed in confidence to the Appellant and to Mr Rivkin on 24 April 2001. The distinction between rumours and speculation, on the one hand, and information from an informed source, was dealt with by Mr Sellars-Jones, and an argument along the lines advanced was dismissed by this Court in the Rivkin appeal at [34]. 46 The evidence tendered was in our view sufficient to make good this element having regard additionally, to the steps which were taken for the discussions with Qantas to be conducted in secret, and to the absence of any evidence to suggest that relevant information had been leaked. The jury were properly entitled to find it proved beyond reasonable doubt, and his Honour sufficiently and clearly dealt with this element in the summing up. 47 In relation to the fourth element it was further submitted that there was an insufficiency in relation to the information to show that it was price sensitive. In particular it was asserted that, as at the date of its supply, the negotiations had not reached finality, and that once finality was reached, any arrangement would still be subject to ACCC approval. 48 As a result, it was argued, there was a double level of uncertainty regarding the proposed deal which must have affected its price sensitivity as judged by the objective observer. 49 Further, it was argued there was likely to be a real question as to whether the proposed financial arrangement was, or was not, one which the prospective investor would regard as favourable or unfavourable to Qantas. That related to whether or not it ever needed to make any monetary contribution to a competitor that would inevitably fail, or at least was the subject of market speculation in that regard. 50 Yet again this was a matter which was the subject of expert evidence and was unequivocally answered by Mr Sellars-Jones, in a way that made good the Prosecution case. Additionally the jury were entitled to apply their common sense and to have regard to the price spike, which followed the public announcement, as a circumstance reinforcing the case for which the Crown contended. 51 The appeal against conviction is not made good.

CROWN APPEAL AGAINST SENTENCE 52 The maximum penalty for the offence charged is imprisonment for 5 years and/or a fine of $200,000. In respect of an offence arising out of his use of the same information Rene Rivkin was sentenced by Whealy J to imprisonment for 9 months, to be served by way of periodic detention and fined $30,000. An appeal brought by him against that sentence was dismissed by this Court. Neither offender had any prior convictions, and each was convicted after trial. The Appellant was shown to have been of prior good character, and to have had a record for philanthropy and to have had virtually no likelihood of reoffending. 53 The Crown contended that the sentence imposed upon the Appellant was manifestly inadequate for the reasons that:

(a) Insufficient weight was given to the seriousness of the offence of insider trading and to the need for general deterrence that was identified by Whealy J in R v Rivkin (2003) 198 ALR 400 at [44], in so far as such conduct undermines the efficacy and integrity of the public securities market: see also R v Rivkin [2003] NSWCCA 307 at [423], R v Hannes (2002) 173 FLR 1; R v Pantano (1990) 49 A Crim R 328 at 330; and R v Corner NSWCCA 19 December 1997, in which similar observations were made concerning the need for appropriate sentences in cases involving white collar crime, by reason of the exacting standards of honesty expected and the difficulty in the detection of such offences.

(b) In sentencing the Appellant there was a failure to appropriately reflect the finding that the use of the information had involved a breach of trust: cf R v Pangallo (1991) 56 A Crim R 441 and R v Martin (1994) 74 A Crim R 252 at 256.

(c) An inappropriate allowance was made for the finding that the Appellant should receive some discount for the fact that his trial was conducted by his legal representatives in an efficient and exemplary manner, in circumstances where there was an absence of any evidence of remorse or contrition, and where it was reasonable to assume that this approach had been encouraged by the lack of success which had accompanied the very different and protracted approach which had characterised the Rivkin trial.

(d) There was a lack of parity in relation to the sentence which had been passed upon Mr Rivkin, whose criminality it was submitted should have been regarded as objectively less serious in so far as the Appellant had heard the information, and the warning not to trade, twice; in so far as he had sought to maximise his profit by holding the shares longer and selling them after the public announcement; and also in so far as he lacked the subjective considerations that were relevant for Mr Rivkin due to his health problems. It was also submitted, in this regard, that the Appellant, like Mr Rivkin, was a high profile businessman of substantial means, whose position in the business community gave him similar access to confidential and sensitive information as well as an opportunity both to profit from it and to defend vigorously any charges that might be brought;

(e) By reference to the range of sentences which had been passed for other offences of insider trading, manifest inadequacy was established, citing the sentencing decisions in R v Rivkin ; R v Hannes; R v Cribb District Court of WAS, Hammond CJDC 9 June 1998; R v Williams NSW District Court, Kitchington DCJ 4 October 1996; R v Kin Lang Teh District Court of Victoria Kelly DCJ 2 September 1991; and the observations of Finkelstein J in ASIC v Petsas [2005] FCA 88; and

(f) The leniency that is built into a community service order is such that it was an inappropriate order for an insider trading offence, which was serious, and which called for an element of general deterrence, particularly where there was an absence of contrition or remorse. 54 This is a Crown appeal and the principles noted in House v The Queen (1936) 55 CLR 499 and Dinsdale v The Queen (2000) 115 A Crim R 558 at 561 concerning manifest inadequacy apply, as do the restrictions upon appellate intervention which were summarised in R v Wall [2002] NSWCCA 42 at [70]. "(a) The normal restriction upon appellate review of the exercise of a discretion, as set out in House v The King (1936) 55 CLR 499, applies to Crown appeals against sentence: Dinsdale v The Queen (2000) 202 CLR 321; with the result that this Court cannot merely substitute its opinion, as to the appropriate sentence, for that of the sentencing judge: Lowndes v The Queen (1999) 195 CLR 665 at 671; rather, it may interfere only where error either latent or patent is shown; R v Tait (1979) 46 FLR 386 at 388; and Wong and Leung v The Queen (2001) 76 ALJR 79 at para 58 and 109.

(b) Appeals by the Crown should generally be rare; Malvaso v The Queen (1989) 168 CLR 227 at 234, and unless there is a clear error of principle identified, it would be exceptional for the Court to interfere: R v Baker [2000] NSWCCA 85.

(c) A Crown appeal against sentence is concerned with establishing matters of principle " for the governance and guidance of courts having the duty of sentencing convicted persons ": per Barwick CJ in Griffiths v The Queen (1977) 137 CLR 293 but this power extends to doing what is necessary to avoid manifest inadequacy or inconsistency in sentencing, that is, where the sentence is definitely outside the appropriate range for the case in hand: Everett v The Queen (1994) 181 CLR 295 at 299; Dinsdale v The Queen (2000) 202 CLR 32, at paras 61 and 62, and Wong & Leung v The Queen at para 109.

(d) The Court has a lively discretion to refuse to intervene even if error has been shown, and in deciding whether to exercise that discretion, it should have regard to the double jeopardy that a convicted person faces as a result of a Crown appeal: R v Allpass (1993) 72 A Crim R 561, R v Papazis (1991) 51 A Crim R 242 at 247, and Wong and Leung v The Queen at para 110.

(e) A sentence which is imposed as a consequence of a successful Crown appeal will generally be less than that which should have been imposed by the sentencing court: R v Holder and Johnston (1983) 3 NSWLR 245 at 256, and will generally be towards the lower end of the available range of sentence: Dinsdale v The Queen at para 62." 55 The sentence was light for an offence of insider trading, but as his Honour pointed out, he was constrained to a considerable degree by the sentence which had been passed on Mr Rivkin, and which had not been appealed by the Crown. His Honour was obliged to sentence the Appellant according to the provisions of ss 16A and 17A(1) of the Crimes Act 1914 (Cth) and it is evident that he had express regard to these provisions. 56 In the light of the sentencing principles that apply to Crown appeals, and in particular the discretion which is relevant, we are not persuaded that the appeal should be allowed. We do not, in this respect, suggest that anything other than a stern approach should be taken to offences of insider trading for the reasons earlier identified. It remains a serious offence, and there needs to be a considerable deterrent aspect reflected in order to protect the integrity and efficacy of the market. Those in a position of trust who receive price sensitive information in relation to securities are expected to confirm to exacting standards of honesty, and transgression can normally be expected to lead to custodial sentences as well as to pecuniary penalties. 57 Although, as his Honour found, the seriousness of the offences of Mr Rivkin and of the Appellant should be regarded as falling towards the lower end of seriousness for the reason that they were not involved as directors or executives of either Impulse or Qantas, nevertheless their offences involved serious infringements of the insider trading laws. As counsel for the Appellant informed us, in the United States of America, which has had a somewhat longer experience of insider trading, persons in the position of Mr Rivkin and the appellant have been given the inelegant tag of being "tippees", in order to distinguish them from true insiders, who have abused their office, as directors, executives or employees, to take advantage of information acquired in the course of their employment or corporate management in order to avoid potential losses by an early sale, or to buy with a view to profit. 58 In the present case, we are persuaded not to intervene by reason of the following factors:

(a) The terms of the Rivkin sentence, and the fact that any significant increase in the Appellant's sentence would give rise to an issue of parity. The argument that, unless the Appellant's sentence is increased, Mr Rivkin might have a complaint as to parity does not provide a basis for intervention. It has been established, in any event, that it is inappropriate for a Crown appeal to turn on whether it has a legitimate sense of grievance by reason of a disparity with a sentence imposed on a co-offender: R v Moore and Weibe NSWCCA 11 August 1992 and R v Radloff (1996) 88 A Crim R 26 at 31-33;

(b) The substantial period of time which has passed since the offence, resulting in a delay in bringing the Appellant to trial, which was not of his making, but was solely due to the exigencies of the Rivkin trial and appeal, in the course of which a number of legal issues of importance for the Appellant's trial were determined;

(c) The efficient way in which the Appellant's trial was conducted, including the making of extensive admissions, which while not demonstrating contrition or remorse, did show a willingness to facilitate the course of justice by refraining from resort to dilatory and technical objections of no merit. We do not see why this should not be taken into account for the purposes of sentencing, particularly in a case where there was a single issue of substance which it was appropriate for decision by a jury;

(d) The fact that the Appellant did not have the particular experience and knowledge which was to be expected of Mr Rivkin as a long term stockbroker, share trader, and investment adviser, whose failure to respect the insider trading laws involved a serious degree of culpability; and the further fact that he had invested less than half of the amount invested by Mr Rivkin. Each of these circumstances justified his Honour's assessment as to the relative seriousness of their culpability;

(e) The circumstance that comparison with individual outcomes in other cases, with very different objective and subjective circumstances, is of little value, since those decisions form but part of the range of sentences: R v Morgan (1993) 70 A Crim R 368 at 371;

(f) The monetary penalty of $30,000 imposed was considerable, and the requirement that the appellant serve 350 hours of community service also imposed a considerable burden upon him, and a significant restriction of his liberty for at least twelve months; and

(g) The fact that the Appellant has been required under the Proceeds of Crime Act to disgorge $37,225.75 representing the total sale proceeds of the shares ($67,255.75 without any deduction for outgoings) less the sum of $30,000 equivalent to the fine, which he still must pay. Additionally he has become subject to automatic disqualification from managing a corporation, and as his Honour noted could face further action under the Fair Trading Act in relation to the licence which he holds as a real estate agent. 59 The Crown appeal against conviction is not made good. 60 The Court makes the following orders:

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