60 Since one way of establishing that information is generally available is to show that "it consists of readily observable matter", Division 2A has, I believe, partially and indirectly endorsed the economic-efficiency paradigm as one of the goals of insider trading prohibition. Of course, this casts little light upon whether or not conduct like that of the appellant contributes to such efficiency.
61 It is unnecessary to go further than recognising that endorsement of the concept of economic efficiency appears to underlie the Parliament's decision to insert par (a) into s1002B(2), in preference to the exclusive market fairness paradigm espoused by the Griffiths Committee and trumpeted in the general parts of the Explanatory Memorandum. Whether or not this means that the Australian legislative regime is out of step with insider trading regulation in other countries (cf Semann & Ors op cit) is neither here nor there. This Court's task is to enforce the Australian law, but only after having determined the proper scope of its prohibition.
62 A legislative commitment to an efficient as well as a fair market does not translate automatically into deciding that the "efficient" single trader is to be encouraged at all costs. But it does reinforce my decision to interpret par (a) literally, without forcing its language into a predetermined purposive mould.
63 Corporations law and practice in Australia seek to attack the evils of insider trading through complex requirements of continuous disclosure. In the present case, those responsible for the administration of Carpenter were at least aware of the duties of continuous disclosure and of the sanctions of suspension or loss of public listing on the ASX. Informed commentators have suggested that the criminal regulation of insider trading activities might align itself in particular ways with the particular obligations of continuous disclosure (Semann & Ors, op cit, p237ff; Gething, op cit, p620ff). The suggestion is a worthy one, but it is something for legislators, not for the judicial arm. Division 2A and its criminal sanctions do not link themselves with the scheme of statutory reinforcement of ASX's continuous disclosure rules. The Court must turn back to the words of the enactment.
"Readily observable matter": By what means observable? Observable to whom? where observable?
64 These questions lie at the heart of the appeal.
65 Literal and purposive interpretations are not always consonant. Yet there is no pre-determined hierarchy. The general principles are frequently discussed in caselaw which is replete with acknowledgments that a court must make an ultimate judgment in a particular textual, contextual and purposive milieu.
66 A purposive construction will not yield readily to a literal one if words are to be added to those chosen by Parliament. The ultimate task remains one of construction, but the circumstances in which words may be read into a statute are limited. In Bermingham v Corrective Services Commissioner (1988) 15 NSWLR 292 at 302 and other cases, this Court has approved and applied the speech of Lord Diplock in Jones v Wrotham Park Estates [1980] AC 74 at 105 where he said that words can only be read into a statute if three conditions are fulfilled: first, it must be possible to determine from a consideration of the legislation read as a whole precisely what the mischief was that it was the purpose of the legislation to remedy; secondly, the court must be satisfied that Parliament by inadvertence overlooked and omitted to deal with a particular eventuality; and thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect.
67 This approach has been endorsed in the High Court by McHugh J (see Mills v Meeking (1990) 169 CLR 214 at 243-4) and apparently by Kirby J (see James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53 at 81-2).
68 The Corporations Law does not define "readily observable matter". The drafting history and the opening words of par (b) shows that the generality of the words in par (a) are not to be limited by par (b). What also emerges clearly from a comparison between pars (a) and (b) of s1002B is that in par (a) the legislature deliberately held back from placing information under an embargo until the lapse of a fixed time or even a reasonable time from some fixed point of actual disclosure. Paragraph (a) was inserted as an alternative in order not to penalise the efficient, the speedy or the diligent - at least to the degree encompassed by the opaque "readily observable matter".
69 In R v Hannes [2000] NSWCCA 503 the trial judge had spoken of availability "in the marketplace". She did not elaborate upon the words "readily observable matter", describing them as "reasonably plain English". The appellant in Hannes submitted that the jury should have been given directions as to the persons to whom and the manner how the matter in question should be readily observable. It was suggested that the jury should have been told that the matter need only have been readily observable to the public at large; and that the matter had to be "easily able to be perceived by the senses in some way". Spigelman CJ (with whom Studdert J and Dowd J agreed) observed (at [262]-[263]) that, if par (a) was that wide, the trial judge's directions allowed the jury to proceed thus. If they proceeded on some narrower basis, then that was unnecessarily advantageous to the appellant, Hannes. The Chief Justice concluded that "these plain English words" required no elaboration on the trial judge's part. I do not read these remarks as indicating that it may never be appropriate to give the jury further guidance as to the scope and application of par (a). The facts of Hannes and the issues fought at trial simply required nothing further.
70 Section 1002B(2)(a) does not define the class of persons by whom the matter is to be "readily observable". They cannot be confined to existing shareholders or even existing traders of shares on ASX. In any event, the latter class is a very wide one since traders in Australian-listed shares are not confined to Australians, no matter how the latter term is defined.
71 I do not understand the parties to disagree with Sides DCJ's direction that perception is not limited to sight perception. He told the jury that "observable":
extends beyond the concept of seeing something with the eye and it includes what can be perceived or what is capable of being noticed. Thus the word "observable" extends beyond the use of our visual sense, for example it would include as well the use of the olfactory senses that is smell, or the auditory senses that is hearing, or the tactile senses that is feeling. In other words people who are visually challenged are not excluded from this concept. Thus "observable" means something that is capable of being noticed or perceived. It is not, however, a question of whether something is easily able to be obtained or is easily available.
72 This exposition appears to confine observability to the capacity to be perceived through direct use of the unaided human senses. Such a direction will be sufficient in some situations, but it may at once be too broad and too narrow.
73 Sometimes information will consist of matter that is directly visible yet it may not be "observable", at least not "readily" so. Examples would be a message which is widely published yet encrypted or a gold nugget lying in a remote corner of a desert. Judge O'Reilly referred to the "public arena" in Kruse (par 32 above). It was the Explanatory Memorandum that glossed s1002B(2)(a)'s "readily observable matter" as "facts directly observable in the public arena" (see at par 328). Such a concept may be helpful in some contexts but my example of the published encrypted message shows that it cannot be taken too far.
74 At other times a direction that confined the jury to perceptibility by the unaided human senses will be too narrow. The present case is an example.
75 Some information has the capacity to generate its own dissemination. Its initial disclosure may be limited, yet the type of information involved and the initial group of persons to whom it is disclosed may ensure that it gets abroad. One would expect share-sensitive information despatched to ASX to have this capacity (cf Kinwat Holdings Pty Ltd v Platform Pty Ltd (1982) 6 ACLR 398, 1 ACLC 194).
76 Here the information embodied in the Supreme Court judgment was available, understandable and accessible to a significant group of the public, ie those present and capable of being present in court in the ordinary course. (I am leaving aside for the moment the issues raised by the venue being in Port Moresby as distinct from Sydney.) The judgment was readily observable to this class.
77 For the purposes of par (a) it does not matter how many people actually observe the relevant information. Nor is par (a) concerned with the time that is likely to elapse between the information becoming "readily observable" and when it was in fact observed. Information may be readily observable even if no one observed it.
78 Even if ready observability were to be limited to perceptibility by the unaided human senses, the published judgment of a Supreme Court is readily observable. A fortiori if, as I believe to be the case, one is not confined to the unaided human senses. Since the demise of the pony express and semaphore and the advent of telephone, telex, facsimile, television and the internet we have come to observe information immediately yet indirectly. Our human senses are engaged, but with the aid of modern means of telecommunication. Absent statutory clarification or restriction, there will be cases where failure to advert to this modern reality skews the true scope of par (a) despite emphasis on the modifying adverb "readily".
79 The appellant challenges the direction that it is the ready perceptibility "by those in Australia" that is in issue. I agree with the appellant that this limitation is not an explicit or implicit part of the statutory definition. In my view, the words added by his Honour significantly altered the statutory offence, to the detriment of the appellant.
80 It may be granted that the protection of fair trading in the Australian sharemarket is the primary focus of the legislative scheme (see Hooker Investments Pty Ltd at 163 (CA)). Non sequitur that the market is viewed as located solely in Australia or that parties protected are those who are "within Australia" or "in Australia". After all, a large proportion of investors in Australian corporations are non-Australians; and a considerable proportion of the shares listed on the ASX are shares of foreign corporations. Division 2A is not confined to protecting the interests of resident Australian investors or dealings in Australian shares (see s1002).
81 There is a further difficulty with the direction that ready observability is to be tested from the stance of a hypothetical person "within Australia". I have already touched upon it. The direction suggests or infers that the readiness of the perceptibility is also to be judged from the viewpoint of individuals located in Australia using their natural senses but without regard to modern methods of telecommunication. The unelaborated direction referring to "those in Australia" carries the seeds of miscarriage when it is recognised that television, the internet (including e-mail) and other means of telecommunication such as the phone and fax are part and parcel of how Australians generally and investors in particular readily perceive events.
82 A sudden crisis in the Middle East may have an immediate impact upon the value of Australian oil shares. That crisis may generate immediate coverage through a cable television provider such as CNN and/or it may be objectively of such a nature that one would expect people to jump on to the telephone, facsimile or e-mail to communicate price-sensitive information almost instantaneously. If the crisis occurs in the dead of the Australian night but during prime time in the United States of America the information is only not readily observable if one reads "in Australia" into the statute and then construes those words in a manner divorced from the realities of the modern world of global telecommunication.
83 The words "readily observable matter" raise a jury issue par excellence. In many contexts judicial gloss of the words would be inappropriate and potentially dangerous (see R v Holden [1974] 2 NSWLR 548 at 551, Hannes at [272]-[273]). Here the "within Australia" qualification (without explanation or elaboration) created a significant risk that the jury could proceed to conviction by inappropriate reasoning. The addition of the words "by those in Australia" certainly confined the inquiry too narrowly, to the significant disadvantage of the appellant.
84 The risk was exacerbated by the failure to alert the jury to the role of telecommunications in how Australian and other investors "readily" observe events. The latter task is a difficult one and I do not wish my remarks about them to be treated as a categorical exegesis of this obscure provision. Every summing-up is to be tested in its factual context.
85 It follows that the conviction must be set aside based upon misdirection. I have not overlooked the absence of protest at the time, although counsel had raised some of the issues in the context of the earlier application for a directed acquittal.