//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2012] NSWSC 1266
procedural. Court admitted in principle that an expert with relevant market experience may give opinion evidence about how information would be brought to the attention of persons who commonly invest in...
The court held that an expert may explain how information would be brought to the attention of market participants (so as to bear on whether the information was 'generally available'), but cannot be used to prove the mere absence or presence of information in documents. The Dreyfus reports failed to show sufficient specialised experience or to explain how the methodology produced the opinions; accordingly the materiality opinions were excluded as presently formulated, though the Crown may remedy defects and re-present the issue.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
1 cited instrument linked from this judgment.
1,943 words · generated 12/07/2026
Stuart Alfred Fysh stood trial in the Supreme Court of New South Wales on four counts of insider trading under the Corporations Act 2001 (Cth). The Crown sought to adduce as evidence two reports prepared by Mr Daniel Dreyfus for the Australian Securities and Investments Commission (ASIC), the first of which was addressed in argument and in the ruling by McCallum J. The reports purported to answer two questions relevant to the statutory definition of "inside information": (1) whether the Crown's particularised information was "generally available" (as defined in s 1042C), and (2) whether that information would have a "material effect" on the price or value of the relevant Division 3 financial products (measured by the s 1042D test of influence on persons who commonly acquire such products). The accused objected to the reports in their entirety. The court heard submissions on admissibility over 15 and 16 October 2012 and delivered rulings on 22 October 2012 (see paras 1–3, 14–17, 54–55).
McCallum J's ruling framed the admissibility questions against the statutory definitions in the Corporations Act and the opinion-rule exceptions in the Evidence Act 1995. The court accepted that some expert evidence could, in principle, be relevant and admissible (notably evidence about how market information is disseminated), but excluded the materiality opinions in the Dreyfus reports as they were presently formulated because they failed to identify the witness's specialised knowledge and did not explain how that knowledge produced the opinions (paras 11, 30–33, 38–46, 54).
The decision turns on two connected legal principles: (a) the content of the Corporations Act definitions (ss 1042A, 1042C, 1042D) which set the elements the Crown must prove, and (b) the Evidence Act framework governing opinion evidence, notably s 79 (specialised-knowledge exception to the opinion rule) and the High Court's requirement (recently restated in Dasreef) that an expert identify the specialised knowledge and explain the connection between that knowledge and the opinion expressed.
On the statutory side, the definition of inside information is two-limbed: information must be "not generally available" and, if generally available, it must be of a kind a reasonable person would expect to have a "material effect" on the price or value of the relevant financial products. Section 1042D gives the "material effect" limb a market-oriented, consumer-behaviour focus: whether the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether to acquire or dispose of the financial products (paras 6–11).
On the evidence side, McCallum J applied the Evidence Act. The judge held that whether particular documents do, or do not, contain a piece of information is a question of fact and not a matter of specialised opinion under s 79. Where voluminous documents are in issue, the appropriate method for permitting a witness who has read them to give a concluded account is by way of a summary under s 50; s 50 specifically provides that evidence adduced in accordance with a s 50 direction is not subject to the opinion rule (paras 25–33). By contrast, issues about how information would be brought to the attention of market participants (the manner of dissemination) could draw on specialised market experience and therefore may be appropriate subjects for expert opinion under s 79 (paras 11, 30).
Finally, McCallum J applied Dasreef: an expert must state the field of specialised knowledge and explain how it is applied to the facts so that the court can see why the opinion is grounded in that expertise. That requirement is particularly important in jury trials because of the risk of "white coat effect" and the need for clear, comprehensible exposition (paras 39–46). The reports in question failed to identify with sufficient clarity Dreyfus's relevant experience in observing investor decision-making, to explain how his use of "ceteris paribus" and "correlations" produced the inferences asserted, and possibly relied on post-event price movements in a way that assumed materiality rather than demonstrating it (paras 40, 46–50). For these reasons the materiality opinions were excluded (para 54), although the Crown could, with notice, provide further detail and have the expertise tested outside the jury (paras 42–43, 55).
Before this decision, courts had admitted market-related opinion evidence in a variety of forms. The judgment notes authorities such as R v Wright and Australian Securities Commission v McLeod where similar material was admitted under the common law as "non-expert opinion" (paras 51–52). Those authorities were concerned with whether the subject matter was within the common knowledge of the trier of fact. McCallum J cautioned that those cases pre-dated the Evidence Act and so the common-law test is not the same as the statutory threshold for admissibility under s 79 (paras 51–53).
The Dasreef decision (High Court, 2011) is the pivotal authority referenced, emphasising that expert evidence must identify the field of expertise and link it to the opinion. McCallum J applied that principle directly (para 39). The effect of this ruling is to reinforce Dasreef in the securities/insider-trading context: market-opinion evidence is admissible only if the expert explains how their training, study or experience leads to the opinions given. The decision also clarifies the proper role of s 50 summaries where large bodies of documents are used to prove a negative (i.e. that particular information was not generally available) (paras 31–33).
After the ruling, the law in this jurisdiction remains that expert market testimony can be admissible, but practitioners must ensure expert reports identify specific foundations for specialised knowledge and explain the methodology and inferential steps that produce the opinion. McCallum J's ruling stresses that that is a threshold admissibility question, not merely a matter for weight (paras 39, 46).
Para 30: "In my view, opinion evidence could be given by a person with substantial experience in the stock market as to the ways of making information known..."
Plain English: An expert can tell the jury how news or information typically reaches market participants, for example via broker research, ASX announcements, overseas exchange disclosures, or word-of-mouth networks. That is a proper subject for expert opinion if the witness can show they know that market.
Para 34(a): "to the extent that his evidence is directed to whether the material provided to him does or does not contain the information particularised by the Crown, it is not based on any specialised knowledge and is accordingly not admissible under s 79..."
Plain English: Whether a document actually says X is a simple factual question for the jury or for document evidence, not something for an expert to answer under s 79.
Para 39–41 (Dasreef application): "the importance of the requirement that an expert explain how the field of specialised knowledge ... applies to the facts ... to produce the opinion propounded."
Plain English: An expert must explain their qualifications and the steps that connect their experience to the opinion; the court cannot be left to infer expertise or steps from vague statements.
Para 54: "I have concluded that evidence of Mr Dreyfus's opinions on the issue of materiality as presently articulated in his reports is not admissible."
Plain English: The court excluded the materiality opinions because the reports did not show the expert basis and methodology required by law.
This ruling is engaged where:
If the Crown can produce an expert who (a) identifies the specialised knowledge, (b) explains the methodology and the premises, and (c) either gives oral evidence to the jury or has the expertise tested out of jury, the expert testament about market dissemination and the likely influence on persons who commonly trade may be admitted (paras 30–33, 42–43).
The judgment itself emphasises (and applies) Dasreef as an authoritative High Court statement of the Daubert/Makita-like requirement in Australian law that an expert must articulate how their expertise produces the opinion (para 39). It also warns against uncritical transposition of pre-Evidence Act common-law authorities admitting non-expert opinion such as Wright and McLeod; those cases were decided on different tests (paras 51–53).
Within this ruling the court therefore treats Wright and McLeod as helpful but distinct authorities, requiring caution because they were decided outside the Evidence Act regime. The upshot is a reaffirmation that s 79 and Dasreef govern admissibility in the Evidence Act era: an expert opinion that does not disclose the foundations and methodology will likely be excluded at the threshold rather than merely left for weight (paras 39, 46, 54).
This ruling is therefore a practical application of Dasreef in the market/insider-trading context, showing that courts will exclude market-opinion evidence that lacks explicit foundational exposition and that where voluminous documentary searches are critical, s 50 summaries are the proper vehicle.
The judgment identifies several issues that remain open or were not fully negotiated:
Practitioners should take careful note: expert market evidence is not per se excluded, but must be grounded in clearly stated experience and methodology; where voluminous documentary searches are relied upon, adopt s 50 summary procedures and ensure the delineation between fact and expert inference is explicit in pleadings and witness statements.
Judgment 1HER HONOUR: Stuart Alfred Fysh is being tried before me with a jury on four counts of insider trading contrary to the Corporations Act 2001. The Crown case includes a statement made by Mr Daniel Dreyfus annexing a report prepared by him at the request of the Australian Securities and Investment Commission (ASIC). The Crown seeks to rely upon the report as expert opinion evidence under s 79 of the Evidence Act 1995. The accused objects to the whole of the report. This judgment determines the admissibility of that evidence. 2The accused was called for trial and arraigned in the presence of a jury panel on 15 October 2012. A jury was then empanelled but had to be discharged almost immediately after it was discovered that one of the jurors was a legal practitioner and so was ineligible to serve as a juror: see s 6 and Schedule 2 of the Jury Act 1977. There being no panel available for the empanelment of a new jury that day, the time was used to hear the beginning of legal argument as to the admissibility of the report. Before argument began, the accused was arraigned again so as to put beyond doubt the Court's jurisdiction with respect to the conduct of the proceedings: see s 130 of the Criminal Procedure Act 1986. A new jury was empanelled the following morning. 3The charges against the accused are brought under s 1043A(1)(c) and 1311(1) of the Corporations Act. The operation of those provisions is that s 1043A prohibits certain conduct (referred to in shorthand as insider trading). By virtue of s 1311(1), a person who contravenes such a prohibition is guilty of an offence. 4Section 1043A(1) provides: 1043A Prohibited conduct by person in possession of inside information (1)Subject to this Subdivision, if: (a)a person (the insider) possesses inside information; and (b)the insider knows, or ought reasonably to know, that the matters specified in paragraphs (a) and (b) of the definition of inside information in section 1042A are satisfied in relation to the information; the insider must not (whether as principal or agent): (c)apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products; or (d)procure another person to apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products. 5The four charges against the accused allege that, in contravention of that prohibition, he acquired two separate parcels of shares in Arrow Energy N/L (counts 1 and 2) and two separate parcels of shares in Queensland Gas Company Ltd (counts 3 and 4). The Crown has provided written particulars of the alleged inside information in respect of each company. As to the two counts relating to Arrow Energy N/L, it is alleged that the accused possessed the information set out in MFI 3. As to the two counts relating to Queensland Gas Company Ltd, it is alleged that he possessed the information set out in MFI 4. 6The starting point is to consider the elements of the offence of insider trading. The articulation of those elements is complicated by the convoluted structure of the relevant provisions. The pivotal circumstance (since it is what gives rise to the relevant prohibition) is the possession of "inside information". That term is defined in s 1042A of the Act as follows: inside information means information in relation to which the following paragraphs are satisfied: (a)the information is not generally available; (b)if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of particular Division 3 financial products. 7Regrettably, each limb of that definition includes a term that is itself further defined in the Act. The terms "generally available" and "material effect" are each defined in s 1042A to have the meanings given by ss 1042C and 1042D respectively. Those sections state definitively when (for the purposes of the insider trading prohibitions) information is "generally available" and when a reasonable person would be taken to expect information to have a "material effect" on the price or value of particular Division 3 financial products. 8The section dealing with "material effect" (s 1042D) is a difficult section. Its operation is explained in the definition section (s 1042A) as follows: material effect, in relation to a reasonable person's expectations of the effect of information on the price or value of Division 3 financial products, has the meaning given by section 1042D. 9Section 1042D provides: When a reasonable person would take information to have a material effect on price or value of Division 3 financial products For the purposes of this Division, a reasonable person would be taken to expect information to have a material effect on the price or value of particular Division 3 financial products if (and only if) the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of the firstmentioned financial products. 10One of the complications created by that section is that, although it is directed to defining the term "material effect", it does so in terms that burden the application of the "reasonable person" test in the second limb of the definition of "inside information" (set out above). The test in full as to which the jury will have to be directed in this case is that a reasonable person would expect the information in MFI 3 to have a material effect on the price or value of shares in Arrow if (and only if) that information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of shares in Arrow. 11The intention of the legislature appears to have been that materiality must be measured against both reasonableness and some knowledge of the market. The expectations of a reasonable person are quintessentially within the province of the jury. That is an issue that need not, and should not, be informed by any subjective opinion or assessment, whether or not based on specialised knowledge. However, in expressly confining materiality to the likely influence of the information on "persons who commonly acquire Division 3 financial products", the statute requires the jury to apply that test by reference to a reasonable person armed with some knowledge of the matters likely to influence the trading decisions of persons who commonly trade in the market. That is an issue which draws in part on matters of common sense well within the province of the jury, but one as to which specialised knowledge might also be brought to bear. 12In order to establish count 1, the Crown will have to prove (omitting expansion of the defined terms considered above): (a)that, between the dates alleged, the accused acquired 150,000 shares in Arrow Energy N/L; (b)that, at the time he acquired those shares, the accused possessed the information set out in MFI 3; (c)that the information set out in MFI 3 was "inside information", that is: (i)that the information was not "generally available"; and (ii)that, if the information were generally available, a reasonable person would expect it to have a "material effect" on the price or value of particular Division 3 financial products. (d)that the accused knew, or ought reasonably to have known: (i)that the information was not "generally available"; and (ii)that, if the information were generally available, a reasonable person would expect it to have a "material effect" on the price or value of particular Division 3 financial products. 13It should be noted that the dates on which it is alleged the shares were acquired are between 13 and 20 June 2007 (count 1); between 17 and 22 June 2007 (count 2); between 2 and 7 December 2007 (count 3) and between 3 and 8 December 2007 (count 4).
Reports of Mr Dreyfus 14Mr Dreyfus provided two reports to ASIC. The argument before me proceeded exclusively by reference to the first report. I was informed by the Crown that the second report was only required due to an amendment to the particulars of the alleged inside information. 15To the extent that the evidence set out in the reports is put forward by the Crown as opinion evidence, it is not admissible unless it falls within one of the exceptions to the opinion rule: see s 76 of the Evidence Act. 16The questions on which Mr Dreyfus was asked to state his opinion were (in relation to counts 1 and 2): a.General Availability of the Information 1.On any day prior to and including 22 June 2007, was [the information in MFI 3] "generally available" as defined in s1042C of the Corporations Act? 2.If, in your opinion, any of the information was generally available, would you please clearly specify which part that was? b.Materiality of the information On 13 June 2007 and on each day up to and including 22 June 2007, if the information (which you have found to have been not generally available) had been generally available, would a reasonable person expect it to have a material effect on the price or value of Arrow securities? 17Those questions were referred to in shorthand as the question of general availability and the question of materiality. As to the question of materiality, the Crown relied only upon s 79(1) of the Evidence Act, which provides: If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge. 18As to the question of general availability, it was suggested that the evidence may alternatively amount to lay opinion within the meaning of s 78 of the Act (T29.33). I do not think that is the correct approach to this question. 19ASIC provided Mr Dreyfus with a large volume of material for the purpose of answering those questions. The material consisted of copies of the relevant provisions of the Corporations Act; statements of two ASIC employees outlining searches they had conducted to locate information that was generally available during the relevant period; historical company extracts for QGC and Arrow; price/volume trading data relating to trading on the Australian Securities Exchange of the two companies; copies of relevant company announcements made to the Australian Securities Exchange and copies of relevant broker research reports. 20Mr Dreyfus requested further information from ASIC and also collected additional information through his own researches, including information about company announcements, share prices, volumes of shares traded and "charting functionality". He relied upon information from those sources "pertaining to share price movements and volume of shares traded for a variety of energy companies between 15 November 2007 and 29 February 2008". He used the same sources "to analyse share price movements for a variety of ASX listed companies that received unexpected takeover offers in the financial years 2006/7 and 2007/8". 21Mr Dreyfus stated that the purpose of that analysis was " to illustrate typical share price reactions following the announcement of an unexpected takeover offer for a company".
Opinion as to the general availability of the information 22The first question on which Mr Dreyfus's opinion was sought was whether the information in MFI 3 was "generally available". That term is defined in s 1042A of the Act as follows: 1042C When information is generally available (1)For the purposes of this Division, information is generally available if: (a)it consists of readily observable matter; or (b)both of the following subparagraphs apply: (i)it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information; and (ii)since it was made known, a reasonable period for it to be disseminated among such persons has elapsed; or (c)it consists of deductions, conclusions or inferences made or drawn from either or both of the following: (i)information referred to in paragraph (a); (ii)information made known as mentioned in subparagraph (b)(i). (2)None of the paragraphs of subsection (1) limits the generality of any of the other paragraphs of that subsection. 23Mr Dreyfus's answer to that question was that none of the information was "generally available" as defined. He provided detailed reasons to support that opinion. 24As submitted by Mr Walker SC, who appears with Mr Pike SC for the accused, there is nothing in the content of the alleged inside information in the present case that is in such arcane or esoteric terms as to require exposition by a person with specialised knowledge. 25Mr Walker submitted in that circumstance that the question whether the information specified does or does not appear within the 15 folders of material obtained as a result of ASIC's searches is simply not a matter for expert opinion evidence. The same argument would apply in respect of any other material consulted by Mr Dreyfus. Any issue as to the contents of those documents (in this instance relied upon to prove a negative) falls more readily within the provisions of s 48 and s 50 of the Act. 26However, whilst that is correct so far as it goes, it is not necessarily the end of the matter. Mr Dreyfus's evidence as to general availability rests in part upon the fact that he has read the material provided to him by ASIC and has not found the alleged inside information within that material. However, his conclusion that the information is not generally available entails some analysis of the manner in which the information, had it been available, would be likely to have been brought to the attention of persons who commonly invest in Division 3 financial products. 27For example, dealing with the material provided to him concerning Arrow, Mr Dreyfus stated: -The company was proactive at all times in releasing information to the ASX. In the months of May and June 2007, when the share price exhibited a strong rise (see Appendix 6) Arrow's releases to the ASX consisted of the following: Weekly drilling reports Quarterly report Heads of Agreement signed for gas supplies to Gladstone LNG plant Finalist for Environmental award Pure Energy (subsidiary) updates UK Investor Presentation (See Material Supplied by ASIC Volume 8 Appendix G Barcodes S01908161 to S01908174). That is, there is no mention of the information as defined. -Given the ability of local broking firms to source news from their associates in the UK, had there been such information released to BG Group's home exchange, it would have been disseminated quickly to Australia. There is no evidence of this. -Arrow regularly communicated its strategy to the market, and there is no mention in any of its releases that it may have been the subject of potential M&A activity by BG Group (or any other international energy company). (See Material Supplied by ASIC Volume 8 Appendix G Barcodes S01908161 to S01908172). -Wilson HTM was the first broker to research the sector in general, and was covering four companies (Arrow, QGC, Sunshine Gas and Sydney Gas) in the sector from early 2007 onwards. Wilson HTM was also 'close' to Arrow, as corporate adviser and manager of a variety of equity raisings for the company. There was nothing in its research which reflects any of the information as defined. (See Material Supplied by ASIC Volume 18 Appendix Q Barcodes S02104114/5/6/7). 28Section 1042C requires the Crown to prove a negative. It requires proof that the information is not readily observable and has not been made known in any manner that would, or would be likely to, bring it to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information. 29In short, what the Crown seeks to establish is that searches have been undertaken of the sources which would be likely to bring the information to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information and that the information set out in MFI 3 does not appear in the material obtained as a result of those searches. 30In my view, opinion evidence could be given by a person with substantial experience in the stock market as to the ways of making information known in that market that would, or would be likely to, bring the information to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information. To the extent that the answer involves searches of documents, I accept that the next step (of establishing that the information does not in fact appear in such documents) is not an issue that requires specialised knowledge. It is a question of fact turning on the contents of documents, possibly to be characterised as an observed fact forming a premise of the opinion. 31I see no reason in principle why an expert witness could not be the person to give that evidence, subject to the need for proper direction to the jury. The obvious way in which such evidence might be given in the case of voluminous documents is by way of summary in accordance with s 50. As noted during argument, subs (3) of that section provides that the opinion rule does not apply to evidence adduced in accordance with a direction under the section. It follows, in my view, that any person, expert or otherwise, who had read all the documents could give evidence (if the court so directed) in the form of a conclusion as to what information they did not contain. 32Mr Walker indicated an objection to that course on two grounds. First, he submitted that it would cloak the evidence in a mantle of expertise giving it "white coat effect", as it is sometimes described: see R v Morgan [2011] NSWCCA 257 at [145]. That is a matter which in my view could be addressed by careful direction to the jury. Secondly, Mr Walker noted the Crown has not in fact approached the matter under s 50 and that no summary of the documents has in fact been provided. The required content of any such summary will of course turn on the purpose for which the summary is adduced. Where what is sought is to prove a negative, it may be doubted whether any extensive treatment of the content of the documents is necessary. 33Mr Walker made it plain during argument that the accused would not wish to stand in the way of any convenient method of putting something further before the jury by way of, for example, an agreed fact. He invited further attention by the Crown to that course as a potential solution to the issue. However, I have not been informed of any further progress in that respect. 34In the absence of any further agreed facts, the admissibility of Mr Dreyfus's evidence as to general availability will be determined in accordance with the following rulings: (a)to the extent that his evidence is directed to whether the material provided to him does or does not contain the information particularised by the Crown, it is not based on any specialised knowledge and is accordingly not admissible under s 79 of the Evidence Act; (b)Mr Dreyfus has specialised knowledge which would enable him to give opinion evidence as to any manner of making information known in the stock market that would, or would be likely to, bring the information to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information. With due notice to the accused and if no undue prejudice arises, his opinion on that issue would be admissible; (c)since Mr Dreyfus has analysed all of the material provided to him by ASIC, he is in a position to give evidence of the contents of that material. With due notice to the accused and if no undue prejudice arises, such evidence might be given in summary form in accordance with s 50 of the Evidence Act with an appropriate direction to the jury as to the status of that evidence. Section 50 does not require that a direction under that section be sought or made before the trial. Ultimately the test is one of fairness.
Materiality of the information 35Mr Dreyfus expressed the opinion that, had the information been generally available, it would have had a material effect on the price or value of Arrow Securities "and hence would, or would be likely to have influenced persons to buy or sell Arrow Securities". 36It should be noted that one of the facts about which that opinion is expressed is not quite the issue raised by the definition of "inside information" in the Corporations Act. The test is whether the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of shares in Arrow (my emphasis). Mr Dreyfus appears to have put the bar slightly higher in addressing the question whether the information would be likely to have influenced persons to buy or sell Arrow Securities (my emphasis). However, that issue was not addressed in the argument before me. 37As explained above, in my view the test posed by the statute does raise an issue as to which specialised knowledge might be brought to bear, namely, the matters likely to influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of shares in Arrow or QGC. That could readily include the expression of an opinion as to whether the information in question fell within that class. 38Mr Walker submitted, however, that the reports served by the Crown are not admissible on that basis, for two reasons. First, he submitted that the reports do not identify any training, study or experience on the strength of which Mr Dreyfus has specialised knowledge so as to be able to proffer the opinions stated. The second reason (which to some extent follows from the first) was that the reports fail to expose or explain any connection between Mr Dreyfus's specialised knowledge and the opinions expressed. I will address those contentions in turn. 39The High Court recently emphasised (channelling Heydon J in Makita v Sprowles) the importance of the requirement that an expert explain how the field of specialised knowledge in which he is expert by reason of training, study or experience and on which his opinion is wholly or substantially based applies to the facts assumed or observed so as to produce the opinion propounded: Dasreef Pty Ltd v Hawchar [2011] HCA 21 at [37] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. As the Court there acknowledged, in many cases that requirement can be met quickly and easily, but that is not always so. 40In the context of this case, the relevant expertise would most likely come from experience. The field of discourse is the likely reaction of persons who commonly trade in the stock market to information of the kind particularised. Mr Dreyfus is a stockbroker with many years of experience in giving financial advice to investors and, more recently, a great deal of managerial experience. However, as acknowledged by the Crown, he gives no exposition of his direct experience in observing the decision-making behaviour of persons who commonly acquire Division 3 financial products and the responses of such persons to particular kinds of information. 41I accept, as contended by the Crown, that the existence of such experience may well be able to be inferred from Mr Dreyfus's lengthy experience in the stock market. However, I do not think such an important matter can be left to inference in a criminal trial. 42Mr Walker submitted that, since the reports have been served as part of the pre-trial management of the proceedings and in light of the Crown's disclosure obligation, it is too late for the Crown to rectify the problem at this stage. I disagree. This is a common law trial. The evidence of all witnesses, including any expert opinion evidence, is to be given orally. There is nothing unusual in that circumstance in permitting an issue as to expertise to be tested during the trial. 43The Crown should, however, provide written notice of any further detail to be relied upon as to Mr Dreyfus's relevant experience and, if necessary, the issue may tested in the absence of the jury. 44The second reason relied upon by Mr Walker for excluding evidence of the opinions as to materiality stated in the reports was that the reports fail to expose or explain any connection between Mr Dreyfus's specialised knowledge and the opinions expressed. The fulfillment of that requirement in clear and comprehensible terms is all the more important in the case of a jury trial. The need for clarity and simplicity is particularly acute in a trial such as the present, in which there are already several issues of unhappy complexity. 45In my view, there is force in Mr Walker's complaint. Even upon a close analysis of the written reports, including the methodology and the reasons stated in support of the opinions, the articulation of the matters which render such opinions admissible in accordance with s 79 remains unclear. 46For example, the report explains that Mr Dreyfus's methodology included looking for correlations between share price movements and the release of company specific information "ceteris paribus". However, as submitted by Mr Walker, the report makes no attempt to expose or explain the analysis of the matters comprehended within that term. What follows is that it is impossible to be confident that Mr Dreyfus's opinion is based wholly or substantially on any relevant specialised knowledge. That is a matter which goes to admissibility, not weight: Dasreef at [37] and [42] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 47There is a further difficulty with the methodology. Mr Dreyfus explains (at page 16 of MFI 3) that he studied "share price movements of QGC, Arrow and other companies for the periods under examination". The period studied was from 15 November 2007 to 29 February 2008. 48The element to be established by the Crown is whether the information was generally available as at the date on which the accused acquired the shares. It may be permissible, in considering that question, to consider the experience of the share price (for Arrow and QGC) after that date as informing the issue of the availability or materiality of information on that date, if that is what has been done. That issue was not fully debated in the argument before me. 49However, the methodology appears to assume as a premise the correctness of one of the issues on which Mr Dreyfus's opinion was sought. His opinion was directed to both the general availability of the information and its price sensitivity. It appears, from his statement of methodology, that he may have based his conclusion as to general availability in part on historic share price movements. If that is what he has done (which is not clear), the conclusion assumes materiality or price sensitivity as a premise. 50A further difficulty arises in respect of the analysis of the share prices of other companies. The way in which that material has been relied upon by Mr Dreyfus in reaching his opinion is not clearly articulated in the report. It is not clear whether it is put forward as relevant "study" contributing to his expertise, or "observed facts" forming one of the premises of his opinion, or empirical corroboration for his opinion as to the matters likely to influence persons who commonly trade in the stock market, or something else. 51The Crown relied upon two decisions in which similar material has been admitted: R v Wright [1980] VR 593 and Australian Securities Commission v McLeod [2000] WASCA 101. 52Care must be taken in the application of those decisions. Both were decided under the common law, not under the provisions of the Evidence Act. The evidence was expressly admitted as "non-expert opinion" evidence on the premise that the central issue in deciding whether to admit such evidence is "whether the subject matter of the evidence is within or without the common knowledge of the trier of fact": McLeod at [51] per Owen J; Ipp and Anderson JJ agreeing at [1] and [2] respectively. 53That is not the test for the admissibility of expert opinion evidence sought to be admitted under s 79 of the Evidence Act, which stands as an exception to the opinion rule. 54I have concluded that evidence of Mr Dreyfus's opinions on the issue of materiality as presently articulated in his reports is not admissible. 55The consideration of any further statement by Mr Dreyfus can only be considered on its merits as and when the issue arises. In that context it should be recorded that, for reasons that have not yet been fully articulated by the parties, this issue was not brought forward before the commencement of the trial, notwithstanding my convening two pre-trial directions hearings to flush out any such disputes.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 November 2012
Regina
Fysh
Court admitted in principle that an expert with relevant market experience may give opinion evidence about how information would be brought to the attention of persons who commonly invest in Division 3 financial products, subject to proof of specialised knowledge and absence of undue prejudice; evidence that documents do or do not contain the alleged information is factual and not admissible under s 79 but may be given by s 50 summary; Mr Dreyfus's opinions on materiality, as formulated in his reports, are excluded for failing to identify relevant specialised knowledge and to explain the connection between that knowledge and his opinions, and for methodological defects. The Crown may supply further detail and have expertise tested in the absence of the jury (paras 30-33, 38-46, 47-55).