The Queen v Jacobson

1 In this case, the trial has been fixed for hearing on 8 September next. The prosecution applies, under s 198(1) of the Criminal Procedure Act 2009 (Vic), to take evidence before the trial from two witnesses, namely, Tamara Newing (the accused's daughter) and Geoffrey Newing (the accused's soninlaw).

2 The accused is charged, on indictment, with two counts of conspiracy to take part, and 33 substantive counts of taking part, in transactions which had, or were likely to have, the effect of creating an artificial price for trading in financial products, contrary to s 1041A of the Corporations Act 2001 (Cth). The charges relate to a series of transactions in which shares were purchased in Genetic Technologies Ltd ('GTG') between 16 May 2006 and 2 November 2006.

3 At the time of the offences, the accused held in excess of 150 million ordinary shares in GTG, which represented 41.45 per cent of the issued share capital in that company. On 18 March 2005, the accused had exercised 49 million options to purchase shares in GTG at 20 cents per share. In order to finance that transaction, he entered into a Lending and Borrowing Facility with Opes Prime in the sum of $11.4 million (approximately). As security for that facility, the accused lodged shares in GTG with a trustee. Under the terms of the facility, Opes Prime was entitled to make margin calls on the accused, requiring him to provide further security. Those calls were to be calculated according to a loantovalue ratio of 25 per cent, which was based on the daily closing price of GTG shares.

4 In May 2006, the accused entered into two further Securities and Borrowing agreements with Chimeara Capital Limited, by which he increased his borrowings to in excess of $14 million. The facilities provided by Chimeara operated in the same manner as the facility provided by Opes Prime, save that the loantovalue ratio, in respect of the Chimeara facilities, was 30 per cent.

5 In its simplest form, the basic allegation made by the prosecution, in each of the charges, is that the accused was involved in the making of bids to purchase shares in GTG at prices, which were designed to maintain the closing market price of GTG shares at a level, which would obviate the need for the accused to provide further security to Opes Prime and Chimeara under the finance facilities. In particular, it is alleged that the accused was a party to the making of late bids for the purchase of GTG shares at or about the time of the close of the daily share market, which were designed to support the closing price of the shares in GTG at the required level.

6 The detailed opening filed by the prosecution describes, in effect, four principal periods, or phases, of dealing with GTG shares. The second, third and fourth of those phases are the subject of the charges against the accused.

7 The first phase, described in the prosecution opening, involved trading in GTG shares by the accused's daughter, Tamara Newing, through a National Online Trading account ('NOLT') in her former married name of Tamara Milstein. The prosecution alleges that, between 18 April 2005 and 29 April 2005, Mrs Milstein was engaged in the purchase of GTG shares through her NOLT account, by which she acquired 1,064,282 such shares. Those acquisitions represented 4 per cent of the total value of the GTG shares traded on the market in that period, but represented 24 per cent of the price increases in GTG, and 58 per cent of all late price increases of GTG shares, during that period.

8 Although, in the opening, it is suggested that the accused was either a party to, or, at the least, acquiescent in, those dealings by Mrs Newing, the accused is not charged with any offence in relation to them. Rather, the prosecution, by a notice of tendency evidence, has indicated that it intends to rely on that evidence, pursuant to s 97 of the Evidence Act 2008, against the accused.

9 The second phase of trading in GTG shares is alleged in count 1 of the indictment, which charges the accused with conspiring with Tamara Newing and Geoffrey Newing, between 16 May 2006 and 31 October 2006, to take part in transactions to purchase GTG shares contrary to s 1041A of the Corporations Act 2001. The share purchases in question were made through Richard Wade, a stockbroker employed by ABN AMRO Morgans Ltd ('ABN AMRO'). It is alleged that the genesis, and indeed essence, of the conspiracy was contained in a facsimile sent by Geoffrey Newing to the accused dated 16 May 2006. In the period alleged, some 200 bids were made by Tamara Newing and Geoffrey Newing for GTG shares. Pursuant to those bids, some 3,248,900 GTG shares were purchased in the names of Tamara Newing, and Palamine Pty Ltd (a company owned by Geoffrey Newing). The total market value of the shares so purchased was $1,117,119. Those purchases represented 34.68 per cent of all price increases, and 46.53 per cent of all late price increases, of GTG shares in the period alleged in count 1.

10 The prosecution alleges that the conspiracy came to an end when the compliance department of ABN AMRO was notified by the Australian Securities and Investments Commission ('ASIC') that it was investigating the transactions undertaken by Mr Wade on behalf of Tamara Newing and Palamine Pty Ltd. As a result, Wade resigned from his employment with ABN AMRO on 3 November 2006.

11 The third phase of dealing in GTG shares is the subject of counts 2 to 34 in the indictment. Those counts allege a number of purchases of GTG shares by the accused through Rocco Musemeci, who was then an employee of the stockbroking firm Bell Potter at its Wollongong office. The transactions took place between 14 September 2006 and 29 September 2006. The shares were purchased in the name of XY Incorporated, an American company, which was owned and controlled by the accused. The prosecution alleges that the accused took part in a series of purchases of GTG shares, in the name of XY Incorporated, which had, or were likely to have, the effect of creating or maintaining an artificial price in GTG shares, contrary to s 1041A of the Corporations Act 2001.

12 The fourth phase of dealing alleged by the prosecution is the subject of count 35 of the indictment. In that count, it is alleged that the accused conspired with Tamara Newing and Rocco Musemeci, between 27 September 2006 and 2 November 2006, to take part in the purchase of shares in GTG, contrary to s 1041A of the Corporations Act 2001.

13 In particular, the prosecution alleges that on 28 September 2006, the accused instructed Musemeci that he was to take orders from Tamara Newing, rather than from himself, as Mrs Newing was better placed to instruct Musemeci to undertake those transactions. During the period of the conspiracy alleged, and pursuant to instructions given to Musemeci by Tamara Newing, some 74 bids for GTG shares were placed on behalf of XY Incorporated. As a result, 1,905,416 GTG shares were purchased in the name of XY Incorporated. Those purchases represented 39.64 per cent of GTG shares traded, 61.9 per cent of all price increases in GTG shares, and 89.96 per cent of late price increases in GTG shares, during the period of the alleged conspiracy.

14 Geoffrey Newing, Tamara Newing and the accused were each arrested pursuant to warrants in December 2008, and charged with numerous contraventions of s 1041A of the Corporations Act 2001. Geoffrey Newing was committed for trial on 25 January 2010, at which time he entered a plea of guilty to the charges. A plea on his behalf was made on 19 February 2010, and he was sentenced on 18 March 2010 to a total effective sentence of 22 months' imprisonment, to serve 6 months' imprisonment before being released on a cognisance release order to be of good behaviour for two years.

15 Geoffrey Newing pleaded guilty to five charges of contravening s 1041A of the Corporations Act by taking part in purchases of GTG shares between 16 May 2006 and 7 August 2006. On his plea hearing, the prosecution relied on a written opening, the contents of which (with one irrelevant exception) were accepted on behalf of Geoffrey Newing. The purchases, described in the prosecution, opening related to nine open orders given by Geoffrey Newing to Richard Wade, between 16 May and 2 August 2006, to purchase GTG shares. Those open orders are identical to the orders referred to in paragraph 141 of the prosecution opening against the accused, as acts committed in pursuance of the conspiracy charged in count 1. In essence, the open orders were filled by way of small bids, as and when Wade was instructed, principally by Tamara Newing, but also, from time to time, by Geoffrey Newing. As a result of those orders, 2,580,000 GTG shares were purchased at a value of $1.55 million.

16 Pausing there, it is clear that the charges, to which Geoffrey Newing pleaded guilty, form an integral part of the transactions alleged in the prosecution case against the accused in count 1 of the indictment.

17 As I stated, Tamara Newing was also charged in December 2008 with a number of contraventions of s 1041A of the Corporations Act 2001. The accused and Tamara Newing participated in a joint contested committal hearing, which lasted from 1 to 4 February 2010. They were both committed for trial on all the charges against them. Subsequently, Tamara Newing pleaded guilty to 10 charges of contravening s 1041A of the Corporations Act by taking part in purchases of shares in GTG between 18 April 2005 and 2 November 2006. On 18 February 2011, she was sentenced to a total effective sentence of 21 months' imprisonment, and she was released forthwith upon entering a recognisance to be of good behaviour for a period of two years.

18 For the purposes of the plea hearing, the prosecution relied on a summary, the contents of which were not put in issue on behalf of Tamara Newing. It is evident from that summary that the charges against Tamara Newing involved the same transactions as those which were alleged against the accused in this case.

19 In particular, counts 1 to 3 of the indictment against Tamara Newing related to trading by Tamara Newing through her NOLT account between 18 April 2005 and 25 July 2005. In essence, the prosecution, against Tamara Newing, alleged the same transactions as those which are alleged in the opening against the accused, as tendency evidence which the prosecution will seek to lead against the accused in this case.

20 Counts 4 to 9 of the indictment against Tamara Newing alleged trading by her through Mr Wade at ABN AMRO. The transactions alleged in the prosecution summary against Tamara Newing correlate with purchases alleged to have been by her pursuant to the conspiracy alleged in count 1 against the accused.

21 Count 10 of the indictment against Tamara Newing concerned purchases which she made through Mr Musemeci of Bell Potter, on behalf of XY Incorporated in the period 28 September 2006 to November 2006. The transactions alleged in the prosecution summary against Tamara Newing were almost identical to the transactions alleged against the accused pursuant to the conspiracy charged in count 35 of the indictment.

22 As I stated, the application by the prosecution, to take evidence from Tamara Newing and Geoffrey Newing, is made under s 198(1) of the Criminal Procedure Act 2009. In particular, the prosecution relies on s 198(2)(a), (b) and (e) of the Act.

23 On the hearing of the application, Mr J Rapke QC appeared with Mr C Winneke for the prosecution. The accused was represented by Mr A Burns. Mrs Newing was represented by Mr N Clelland QC, and Mr Newing represented himself. They each opposed the making of an order under s 198(1). In addition, Mr Clelland, on behalf of his client, objected to Mrs Newing giving evidence, pursuant to s 18 of the Evidence Act (Vic), in the event that I otherwise order that evidence be taken from her pursuant to s 198 of the Criminal Procedure Act 2009.

24 So far as is relevant for the purposes of this ruling, s 198 of the Criminal Procedure Act provides as follows:

'(1) At any time except during trial, a party to a criminal proceeding may apply to the court for an order that the evidence (including crossexamination and reexamination) of a person be taken at a time and place fixed by the court.

(2) An application may be made under subsection (1) only if -

(a) the person was not available to be examined as a witness at the committal proceeding; or

(b) a statement or transcript from the person was not included in a handup brief served on the accused under Part 4.4; or

...

(e) for any other reason the court considers that it is appropriate that the evidence of the person should be taken before the trial of the accused.

...

(4) The court must not make an order referred to in subsection (1) unless it is satisfied that it is in the interests of justice that the evidence of the witness be taken.'

25 Section 18 of the Evidence Act, so far as it is relevant for this application, provides as follows:

'(1) This section applies only in a criminal proceeding.

(2) A person who, when required to give evidence, is the spouse, de facto partner, parent or child of an accused may object to being required -

(a) to give evidence; or

(b) to give evidence of a communication between the person and the accused -

as a witness for the prosecution.

...

(6) A person who makes an objection under this section to giving evidence or giving evidence of a communication must not be required to give the evidence if the court finds that -

(a) there is a likelihood that harm would or might be caused (whether directly or indirectly) to the person, or to the relationship between the person and the accused, if the person gives the evidence; and

(b) the nature and extent of that harm outweighs the desirability of having the evidence given.

(7) Without limiting the matters that may be taken into account by the court for the purposes of subsection (6), it must take into account the following -

(a) the nature and gravity of the offence for which the accused is being prosecuted;

(b) the substance and importance of any evidence that the person might give and the weight that is likely to be attached to it;

(c) whether any other evidence concerning the matters to which the evidence of the person would relate is reasonably available to the prosecutor;

(d) the nature of the relationship between the accused and the person;

(e) whether, in giving the evidence, the person would have to disclose matter that was received by the person in confidence from the accused.'

26 The main point, relied on by Mr Clelland on behalf of Tamara Newing in opposition to the s 198 application, and in support of the objection under s 18 of the Evidence Act, concerns the adverse effect on Mrs Newing, and on her relationship with the accused, if she should be required to give evidence under s 198 of the Criminal Procedure Act. In support of that proposition, reliance was placed on materials which had been put before the sentencing judge on the plea made on behalf of Mrs Newing in 2010, together with a further recent psychological report.

27 Tamara Newing is 49 years of age. She is one of three children of the accused. Mrs Newing was married when she was 21 years of age, and there were five children of that marriage. She separated from her husband in 2001, and remarried Geoffrey Newing in 2006. In June 2010, her youngest son, Reagan, who was then aged 14, suffered very serious injuries in a diving accident while he was overseas. He subsequently passed away as a result of those injuries on 22 July 2010. Understandably, the loss of her son was and has continued to be the cause of considerable grief to her.

28 The psychological reports, which were tendered on the plea of Mrs Newing, focused, in part, on the role played by the relationship, between Mrs Newing and her father, in causing her to be involved in the offences to which she pleaded guilty. Dr Danny Sullivan, forensic psychiatrist, provided a report dated 22 May 2010. He noted that Mrs Newing's father was a patriarchal and dominant figure in her early family life, and that as a result she had concerns about being accepted and approved by her father. In addition, she had become financially dependent on her father after the failure of her first marriage. Dr Sullivan opined that it was possible that Mrs Newing's complicated relationship with her father had influenced her judgement in respect of the offending to which she had pleaded guilty.

29 Mr Patrick Newton, a clinical and forensic psychologist, provided a report dated 8 June 2010. In that report, Mr Newton noted that, when Mrs Newing was younger, the family situation had been characterised by ongoing tension and conflicted loyalties. She said that her father had espoused 'very traditional genderbased expectations of his children', placing emphasis on the education of her brothers, while concurrently ignoring her needs for affection and nurture. She stated to Mr Newton that she had become involved in the purchases of shares in GTG at the behest of her father, but that, in doing so, she did not know that he was then under pressure from margin calls being made or threatened by Opes Prime and Chimeara. She told Mr Newton that she had raised concerns repeatedly with her father, but had been told by him that if she did not help him, he would not be able to pay her mortgage. She said to Mr Newton:

'I was so happy to be useful to my dad. He had never praised me for anything, or seemed to think that I was useful to him, and I gladly agreed to do something for him where he might see I was good at something. I was certainly stupid and naïve and eager to please my dad, but I did not know that dad had a margin line he was protecting ...'

30 The other relevant aspect of the reports, tendered on behalf of Mrs Newing, related to the issue of her psychological state. In his report dated 22 May 2010, Dr Sullivan noted that Mrs Newing had been seeing a psychiatrist who had assisted her to cope with her situation. Mr Newton, in his report dated 8 June 2010, concluded that Mrs Newing was suffering significant emotional stress as a result of her protracted legal proceedings. Her symptoms warranted a diagnosis of adjustment disorder with depressed mood, for which she needed treatment. In a second report, dated 17 October 2010, Mr Newton focused on the effect on Mrs Newing of the tragic loss of her youngest son, Reagan. Mr Newton found that, at that time, Mrs Newing was experiencing profound emotional distress. Diagnostically, her grief had exacerbated her preexisting symptoms of reactive depression, and there was a significant risk she could develop a primary mood disorder as a result of her grief.

31 In his latest report dated 26 April 2014, Mr Newton noted that Mrs Newing was suffering substantial anxiety arising from the prospect of being required to give evidence against her father. She described a deep apprehension about the effect such a course of action would have on their relationship, and a near certain conviction that the accused would disown her if she did so. She also described an intense fear of being exposed to crossexamination, believing that that would be both humiliating and distressing. Mr Newton acknowledged that many individuals, on being called to give evidence, experience significant anxiety. However, he considered that Mrs Newing's level of anxiety was well in excess of the level normally expected. Diagnostically she met the DSM5 criteria for an adjustment disorder with anxiety. He stated:

'There is some risk that her mental state could deteriorate if she continues to experience chronic stress and she would be prudent to access some professional assistance for the medium term.'

32 Mr Rapke, on behalf of the prosecution, submitted that the prosecution had established an entitlement to an order, that the evidence of Tamara Newing and Geoffrey Newing be taken before trial. In particular, he submitted that the case falls within s 198(2)(a), (b) and (e) of the Criminal Procedure Act.

33 Mr Rapke pointed out that both Mr Newing and Mrs Newing were important witnesses to the events which are the basis of the charges brought against the accused, and in particular those contained in counts 1 and 35. While, he conceded, the prosecution would be able to prove its case without relying on the evidence of Mr Newing or Mrs Newing, nevertheless the evidence of each of those witnesses is relevant, and highly important, to the central issues in the case. Both Mr Newing and Mrs Newing would be able to provide firsthand evidence concerning the various purchase transactions which were made, on their instruction, first by Mr Wade, and, subsequently, by Mr Musemeci. More importantly, Mr Rapke pointed out that the critical link, in the Crown case, was to establish the purpose of those transactions, and the reason why Mr Newing and Mrs Newing each participated in them. While that issue may be the subject of appropriate inferences drawn from a number of objective facts which the prosecution is in a position to establish, nevertheless Mr Newing and Mrs Newing are the principal witnesses who can give evidence which directly relates to those issues.

34 In this connection, Mr Rapke also pointed to a number of parts of the transcript of the plea made on behalf of Mrs Newing by Mr Clelland, who then appeared for her. In particular, in the course of that plea, Mr Clelland had submitted to the sentencing judge that Mrs Newing had acted on behalf of, and at the behest of, the accused in purchasing shares in GTG. He stated that she had traded within the parameters set for her by both the accused and Geoffrey Newing. He described her role, in those purchases, as an 'agent' or 'functionary' of the accused. Mr Rapke also relied on the passages from the report of Mr Newton, dated 8 June 2010, in which Mrs Newing had told the psychologist she had undertaken the share transactions for the benefit of her father.

35 In response, the submissions made by Mr Clelland dealt first, with the application by the prosecution to take evidence from Mrs Newing under s 198 of the Criminal Procedure Act, and, secondly, with the objection made on behalf of Mrs Newing under s 18 of the Evidence Act, in that event that I make an order under s 198 of the Criminal Procedure Act. However, as I have already outlined, the principal focus of the submissions made by Mr Clelland, in respect of both issues, concerned the effect on Mrs Newing of being required to give evidence, and in particular the effect on her psychological health and the effect on her relationship with the accused.

36 Mr Clelland commenced his submissions by pointing out that Mrs Newing had not pleaded guilty to a charge of conspiracy. She had not been asked by the prosecution to make a statement before her plea hearing, and thus she had not been invited to undertake a course which might have resulted in further leniency in her sentence. Since May 2011, the prosecution has been aware that Mrs Newing did not wish to give evidence against her father, because of the matters which had been stated on her behalf on her plea. The prosecution had taken no steps to obtain an order that Mrs Newing give evidence, until April of this year. It is now eight years since the events in question, and it would be oppressive to Mrs Newing, in those circumstances, to be required to give evidence against her father. Mrs Newing is now in a fragile, emotional state, and she is very attached to her father. In those circumstances, Mr Clelland submitted, it would not be in the interests of justice, pursuant to s 198(4) of the Criminal Procedure Act, that Mrs Newing be required to give evidence in respect of the trial of her father.

37 For the same reasons, Mr Clelland submitted that Mrs Newing should be excused from giving evidence under s 18 of the Evidence Act, if I were to make an order that evidence to be taken from her under s 198 of the Criminal Procedure Act. He submitted that while the offences, charged against the accused, are serious, they are not of such gravity as to outweigh the potential adverse effects to Mrs Newing, should she be required to give evidence. Although her evidence might be important to the prosecution case, it is not vital or critical, and the prosecution could not contend that its case would fail in the absence of evidence from her. In those circumstances, Mr Clelland submitted that, pursuant to s 18(6) of the Evidence Act, the nature and extent of harm which would be occasioned both to Mrs Newing, and her relationship with her father, would outweigh the desirability of her giving evidence in this case.

38 Mr Burns, who appeared on behalf of the accused, made brief submissions in opposition to the application by the prosecution under s 198 of the Criminal Procedure Act. In particular, he pointed out that the prosecution is not permitted to use s 198 as an instrument for investigating the matters alleged against the accused. He submitted that the prosecution could have availed itself, at an earlier time, of the compulsory examination procedures prescribed under s 103 of the Act. In addition, he submitted that if the prosecution were now permitted to take evidence from Mr and Mrs Newing under s 198, the accused would be at a disadvantage on the taking of such evidence. He submitted that the accused is not to know what evidence would be given on such an examination, and thus counsel would be at a disadvantage in preparing crossexamination in respect of those witnesses. Mr Burns also relied on the potential adverse effect on his client's relationship with his daughter, and with his soninlaw, should either of them be required to give evidence in the case.

39 Mr Newing also briefly addressed me. He submitted that he should not be required to give evidence. In particular, he was concerned that, if he was required to give evidence, it might have an adverse effect on his relationship both with the accused and also with Mrs Newing. He was also concerned about the potential consequences to him, if he should give evidence which was contrary to evidence he had given, under compulsory examination pursuant to s 19 of the Australian Securities and Investment Commission Act 2001 (Cth).

Analysis and conclusion: Application under s 198 of the Criminal Procedure Act

40 I shall first consider the competing submissions in respect of the application by the prosecution under s 198 of the Criminal Procedure Act.

41 Mr Clelland, on behalf of Tamara Newing, did not dispute that s 198(2)(a) and (b) apply to the application made by the prosecution. Rather, he submitted, pursuant to s 198(4), that it is not in the interests of justice that an order be made requiring Mrs Newing to give evidence. Mr Burns, on behalf of the accused, did submit that the application was made for permissible investigative purposes, but he did not elaborate on that submission.

42 In light of those submissions, it is not necessary for me to consider the ambit of s 198. I do, however, accept that it would be impermissible for the prosecution, or indeed for either party, to use s 198 for the purposes of investigating the matters which are the subject of the case. Rather, s 198 prescribes a process to be used, where appropriate, in a criminal proceeding for the taking of evidence.[1]

43 On the other hand, it is important to bear in mind that s 198 does not provide that evidence, which is taken pursuant to an order made under it, is thereby admissible in the trial of a proceeding. Rather, the question of the admissibility, of such evidence, is a separate issue. In this respect, I note that s 198(2)(a) and (b) each contemplate situations which, at the least, would ordinarily give rise to an entitlement of an accused to a 'Basha' inquiry.[2] In most cases, where evidence is taken on a Basha inquiry, that evidence is not subsequently admitted as evidence in the trial. Rather, the process is undertaken to ascertain what the particular witness might say, and, in appropriate circumstances, to test that evidence in the absence of the jury. In that way, s 198 clearly contemplates the taking of evidence which might not, ultimately, be admitted in the trial.

44 The procedure provided for by s 198 is available to both the prosecution and the defence. It follows that, in the circumstances prescribed by s 198(2)(a) and (b), the prosecution may obtain an order for the obtaining of evidence from a witness, which, ultimately might not be admitted in the trial, provided, of course, that the court is satisfied under subsection (4) that it is in the interests of justice that the evidence of the witness be taken.

45 Clearly, the evidence, which is to be taken from a witness under s 198, must be relevant to, and for the purpose of addressing, the issues at the trial. An order for the taking of a witness' evidence under s 198 would not provide a warrant for either party to explore, at large, matters that are extraneous to the issues which are in dispute in the trial.

46 I am mindful that a court must be alert to the potential for s 198 to be misused, and in particular, for it to be used for the purposes of either side undertaking an investigation, rather than eliciting evidence. However in the present case, it is clear, from the facts which I have earlier described, that both Tamara Newing and Geoffrey Newing are key witnesses to the events which are central to the charges brought by the prosecution against the accused man. Each of them played a prominent role in effecting the share purchases which, the prosecution alleges, were made pursuant to the two conspiracies alleged, respectively, in count 1 and count 35.

47 Most importantly, both Tamara Newing and Geoffrey Newing are witnesses, who can give direct evidence as to the issue whether the trading in GTG shares between 16 May 2006 and 2 November 2006, through ABN AMRO, was pursuant to a conspiracy, to which the accused was a party, and which is alleged in count 1 of the indictment.

48 Similarly, Tamara Newing, is a witness who can give direct evidence as to the question whether the trading in GTG shares between 27 September 2006 and 2 November 2006, through Bell Potter, was pursuant to a conspiracy, to which the accused was a party, and which is alleged in count 35 on the indictment. In this respect, Mr Rapke pointed out that the prosecution will lead evidence, from Mr Musemeci, that at about 9.37 am on 28 September 2006 the accused telephoned Mr Musemeci from Colorado, and advised Mr Musemeci that he wanted him to take orders from Tamara Newing, as she understood what the accused wanted to achieve, and she was better placed to speak to Musemeci. Telephone records, to be tendered at trial, indicate that 10 minutes earlier, at 9.27 am on the same day, the accused had telephoned Tamara Newing and spoken to her for 7 minutes and 52 seconds. Clearly, a critical issue in the trial, in respect of count 35, will concern the contents and substance of that conversation. While the prosecution, no doubt, would be able to rely on the drawing of an inference by the jury as to that matter, nevertheless, Tamara Newing would be a critical witness as to what transpired in the course of that conversation.

49 In that way, I am persuaded that the interests of justice would be served by the taking of evidence from both Tamara Newing and Geoffrey Newing as to the matters that I have just described. That being so, it would be entirely inappropriate for either of those witnesses to be called at trial, without either side knowing, in advance, what those witnesses would state in their evidence. In particular, it would be unfair to the prosecution and to the accused. If Tamara Newing or Geoffrey Newing were called to give evidence at trial, without their evidence first having been taken pursuant to an order made under s 198, there would be considerable potential for such a course to disrupt the trial of the proceeding. In such a circumstance, it would be necessary, and only fair to the accused, for a Basha hearing to be undertaken in the middle of the trial. In the absence of such a Basha hearing, it would be hazardous to call either those witnesses 'blind'. In those circumstances, I am persuaded that the interests of justice would be served by first taking the evidence of both Tamara Newing and Geoffrey Newing, before trial, pursuant to s 198.

50 Mr Burns submitted that, in such a process, the accused would be at a disadvantage, because his counsel would not know what either witness would say at such an inquiry. However, any such disadvantage could be catered for in the course of the taking of the evidence. Certainly, I would be prepared to grant counsel for the accused a reasonable time, after the taking of the evidence, before counsel were required to crossexamine either witness.

51 I accept the point made by Mr Clelland that there has been some delay by the prosecution in making the application which is now before me. However, I do not consider that that circumstance has the effect that it is not in the interests of justice that the evidence of the two witnesses be taken.

52 As I have already stated, in his submissions, Mr Clelland focused on the effect on the health of Tamara Newing, and on her relationship with her father, should she be required to give evidence. I shall deal, in greater detail, with those considerations when I turn to the objection made under s 18 of the Evidence Act. However, I do accept that, if Tamara Newing were required to give evidence, that might affect her psychological wellbeing. I also accept that it might adversely affect her relationship with the accused. In the same way, I accept that if Geoffrey Newing were required to give evidence, that might adversely affect his relationship with his fatherinlaw. However, as I shall later point out, clearly, in those circumstances, both witnesses would be required to give evidence by way of compulsion. Only the most obtuse father could, in those circumstances, bear resentment to his daughter, or soninlaw, should they give evidence, and should that evidence be unfavourable to him. As I stated, I shall return to this matter in greater detail when I consider the objection under s 18 of the Evidence Act. However, the matters raised by Mr Clelland are not of sufficient moment to undermine my conclusion that, for the reasons stated, it is in the interests of justice that the evidence of both Tamara Newing and Geoffrey Newing be taken pursuant to an order made under s 198 of the Criminal Procedure Act.

Analysis and conclusion: objection by Tamara Newing under s 18 of Evidence Act 2008

53 I turn then to the objection taken on behalf of Mrs Newing, pursuant to s 18 of the Evidence Act 2008. In order that I uphold that objection, I must be satisfied, pursuant to s 18(6), first, that there is a likelihood that harm would or might be caused to Mrs Newing, or to her relationship with the accused, if she gave evidence, and, secondly, that the nature and extent of that harm outweighs the desirability of having the evidence given by Mrs Newing.

54 As I have stated earlier, I accept that it is likely that Mrs Newing might sustain some harm to her psychological state, and also some harm to the relationship between herself and her father, if she were required to give evidence pursuant to the order that I shall make under s 198 of the Criminal Procedure Act. I am also satisfied that the harm to Mrs Newing's psychological state would, to a substantial extent, arise from her perception that, by giving evidence, she might or would thereby damage the relationship between herself and her father. The critical question is whether the nature and extent of that harm outweighs the desirability of Mrs Newing giving evidence.

55 Section 18(7) of the Evidence Act identifies five factors which (inter alia) I must take into account in determining that question. The first three factors - specified in subparagraphs (a) to (c) - are relevant to an assessment of the desirability of having evidence given by Mrs Newing. The offences charged against the accused, and in particular those in respect of which Mrs Newing would give evidence, are serious. Certainly, they are not as serious as a number of other criminal offences, such as murder. Nevertheless, the conduct which is alleged - ongoing systematic manipulation of the price of shares on the share market - is serious, in that such conduct is calculated to strike at the proper functioning and integrity of the securities market.

56 It is not possible, at this stage, to know the content of the evidence which might be given by Mrs Newing. However, while Mr Rapke conceded that Mrs Newing's evidence would not be critical to the success of the prosecution case in respect of count 1 and count 35, nevertheless that evidence would be of the highest importance. Mrs Newing was a key participant in the two conspiracies alleged against the accused. In each of the periods, in which it is alleged that the conspiracies operated, Mrs Newing was involved in ongoing, and, at times, daily communications with the two stockbrokers, Wade and Musemeci, in respect of the acquisition of shares in GTG in her own name, in the name of her husband's company, and in the name of the American corporation owned by the accused. During the same periods, Mrs Newing had ongoing contact with the accused. While it is not possible to gauge the weight which might be attached to the evidence, nevertheless, if evidence given by Mrs Newing in respect of those matters were accepted by the jury, it would be capable of having a significant impact on the ultimate outcome of the case against the accused, particularly in respect of count 1 and count 35.

57 In this respect, Mrs Newing would be a particularly important witness in respect of the matters alleged in count 35. Certainly, Mr Musemeci will be called to give evidence. However, on the plea made on his behalf, he gave an undertaking to the court to give evidence on behalf of the prosecution, and to assist the prosecution, in the case against the accused. In those circumstances, it will be necessary to give the jury a warning, under s 165 of the Evidence Act, that his evidence might be unreliable. That being so, the evidence of Mrs Newing would be of the highest importance in the jury's assessment of the evidence given by Mr Musemeci. Further, as I have already indicated, the prosecution alleges that Mrs Newing had direct contact with the accused concerning the dealings which are the subject of count 35. In particular, only Mrs Newing would be able to give evidence as to the content of the critical conversation which she had with the accused at 9.27 am on 28 September 2006.

58 While Geoffrey Newing might also be a potential witness in respect of the conspiracy charged in count 1, nevertheless Mrs Newing had significant involvement in the acquisition of shares pursuant to the conspiracy alleged in that count. During the period of the alleged conspiracy, she had important contact with the accused. In addition, she received sums totalling $1.4 million from the accused between 19 May and 5 July, and a further sum of $50,000 in September, with which to finance the purchase of those shares.

59 Taken together, the matters, which I have just discussed, satisfy me, in terms of s 18(6)(b) of the Evidence Act, that there is a substantial desirability of having the evidence which might be given by Mrs Newing. The question is whether the potential harm, which might be occasioned both to Mrs Newing, and to her relationship with the accused, is such that it outweighs the desirability of having that evidence given by her.

60 In considering that question, it must be borne in mind that Mrs Newing is the adult daughter of the accused. In many cases, in which a child of an accused takes objection under s 18 to giving evidence, the witness is particularly young. While the relationship between an adult daughter and her father is no doubt important, nevertheless it is not as compelling, or vulnerable, as the relationship between a younger offspring and his or her father. After all, Mrs Newing is a mature married woman, with a family of her own.

61 In his latest report, Mr Newton expresses the view that Mrs Newing presently suffers a level of anxiety well in excess of the level normally expected of a person who is required to give evidence in a criminal trial. However, Mr Newton is somewhat circumspect in expressing the potential harm, which might be caused to Mrs Newing's psychological state, should she be required to give evidence. As I have already indicated, Mr Newton has expressed the opinion that there is 'some risk' that Mrs Newing's mental state 'could deteriorate' if she continues to experience chronic stress, and that she would be prudent to access some professional assistance for the medium term. In that respect, it is, I consider, significant that Mrs Newing has not availed herself, or seen the need to avail herself, of psychological or psychiatric treatment at the present time, notwithstanding the high levels of stress which she has described to Mr Newton. Taking those matters into account, while I am satisfied that, if Mrs Newing were required to give evidence, she would sustain increased levels of stress, I do not consider that that additional harm would outweigh the desirability of her giving evidence.

62 The question, then, is whether, if Mrs Newing were required to give evidence, the potential harm thus occasioned to her relationship with the accused would outweigh the desirability of having the evidence given. As I stated, I am satisfied that there might be some harm to the relationship between the accused and Mrs Newing, if her evidence were unfavourable to him. In particular, in such a situation, if the accused were convicted, it would be natural to expect some potential difficulty in the relationship between the accused and Mrs Newing. However, the level of that damage to the relationship must be placed in some perspective. Both Mrs Newing and the accused are mature adults. The accused is an educated and intelligent man. He has been involved, for a number of years, in sophisticated commercial dealings which have been conducted on an international basis. He would well understand that if Mrs Newing gave evidence in this case, that evidence would be given under the compulsion of a court order. If she gave evidence which is unfavourable to the accused, then, in my view, only the most churlish and selfcentred parent could bear any animosity or resentment to his daughter arising from that circumstance.

63 In that respect, it is relevant that, on the plea made on behalf of Mrs Newing, her counsel squarely blamed the accused for her involvement in the offences to which she pleaded guilty. As I have already stated, in the course of the plea, counsel stated that Mrs Newing, at all times, was acting at the 'behest' of the accused, and 'within parameters' set by the accused. Counsel described Mrs Newing as acting as the accused's 'functionary' and as his 'agent'. In the report of Mr Newton dated 8 June 2010, which was tendered on her behalf in the plea, Mrs Newing blamed her father for her involvement in the offences. Mr Newton, in his report, recorded that Mrs Newing stated that at all times the accused had played an active role in suggesting when she should trade in the GTG shares and at which particular times she should place the orders. She told Mr Newton that 'these suggestions had become more insistent and quite aggressive' as time passed. She also told Mr Newton that when she raised her concerns with the accused, she was met with comments such as, 'If you don't help me (her father), how can I help you pay your mortgage?'.

64 Taking all those matters into account, I am not satisfied that if Mrs Newing gave evidence pursuant to the order which I shall make under s 198 of the Criminal Procedure Act, the nature and extent of any harm either to herself, or to her relationship with the accused, would outweigh the desirability of having the evidence given. On the contrary, I am well satisfied that the desirability of Mrs Newing giving that evidence significantly outweighs the nature and extent of such harm. In those circumstances, I reject the objection made on behalf of Mrs Newing, under s 18 of the Evidence Act, to being required to give the evidence, which I shall order be given under s 198 of the Criminal Procedure Act.

65 For the reasons which I have set out above, I have therefore reached the following conclusions:

(1) I grant the application by the prosecution for orders under s 198(1) of the Criminal Procedure Act 2009 (Vic) that evidence be taken, before trial, for the witnesses Tamara Newing and Geoffrey Newing.

(2) I reject the objection made by Tamara Newing, under s 18 of the Evidence Act 2008 (Vic), to giving such evidence.

66 In reaching those conclusions, I should observe that I am not unmindful of the concern raised, particularly by Mr Newing, as to the consequences for either of the proposed witnesses, should their evidence depart substantially from the answers which they gave, under oath, when questioned pursuant to s 19 of the Australian Securities and Investments Commission Act 2001 (Cth). That concern, raised by Mr Newing, arose from the submission made by Mr Rapke that the prosecution does not accept, as truthful, the answers given by either Mr Newing or Mrs Newing when they were questioned by officers of ASIC. However, the answer to that concern is that, in such an event, Mr Newing and Mrs Newing would each be entitled to take an objection, under s 128 of the Evidence Act 2008, should either of them apprehend that the giving by them of any particular piece of evidence may tend to prove that he or she has committed an offence. Accordingly, it is important that both Mr Newing and Mrs Newing each have available appropriate legal advice in respect of their rights under s 128 of the Evidence Act 2008.

[1] Compare Harvey v County Court (Vic) [2006] VSC 293; (2006) 164 A Crim R 62 (Hollingworth J).