R v Li[2021] QDC 105

DISTRICT COURT OF QUEENSLAND

Background

1. [1]
   The applicant/defendant is charged on indictment with six counts of insider trading contrary to the provisions of s 1043A(1) and 1311(1) Corporations Act 2001 (Cth). Count 1 alleges he acquired relevant financial products (being contracts for difference),^[1] whilst in possession of information not generally available, but which was market price sensitive and which information he knew to be not generally available market price sensitive information. Counts 2 to 6 inclusive allege he procured others to acquire relevant financial products upon the same basis, that is, by misusing that same market price sensitive information.
2. [2]
   The offences are alleged to have occurred between 17 March 2015 and 27 March 2015 and relate to market price sensitive information the applicant is said to have acquired concerning the takeover bid by a Chinese company, Quandong Rising H.Q. (Holding) Ltd (GRAM) for an Australian mining company Aust Pan Ltd (PNA). A takeover was to be announced on 30 March 2015. It is alleged that the applicant possessed inside information not generally available, being market price sensitive information concerning this takeover, and that he misused that information to purchase CFDs personally on 32 occasions and by procuring five others to purchase CFDs over the period alleged. In particulars the Crown alleges the inside information procured by the applicant was:

“That a takeover bid for Pan Aust by GRAM was likely in the near future”.

3. [3]
   The Crown case relies upon both direct and circumstantial evidence. In particular, it relies upon three pieces of evidence:

   1. (a)
      A record of interview (ROI) conducted between an ASIC investigator and himself.
   2. (b)
      The recollection of the applicant’s accountant and friend of what the applicant is alleged to have said to him on 20 March 2015, namely:

“Mr Li told Mr McKenzie that his friend had been told by a finance person who was involved with the preparation of finance for the proposed takeover bid that: GRAM was making another bid for Pan Aust, GRAM making another bid for Pan Aust was likely and that it ‘could happen next week’; and there were loan documents being prepared for GRAM with respect to such a takeover.”

3. (c)
   A WeChat message that the applicant received from a person called “Zhenni” on 26 March 2015 which translated as:

“I’m informed that the contract will be signed today. It may be announced on Monday.”

4. [4]
   That message sat within a bundle of messages between the applicant and Zhenni transmitted during the material time. However, the bundle of messages concerned the purchase and importation by the applicant of various items of merchandise from China.
5. [5]
   The evidence procured for the Crown has largely come from carriage service intercepts, indemnities given to persons relevant to proceedings and material discovered upon the execution of warrants for search and seizure of relevant premises. That includes interviews between the applicant and investigating officers.
6. [6]
   At trial the Crown in particular intends to adduce evidence of:

1. The applicant’s ROI dated 18 November 2015;
2. The applicant’s ROI dated 19 November 2015;
3. Matters detailed in paras 108(b)(ii), 108(b)(iii), 108(b)(v) and 110 of Mark McKenzie’s statement dated 8 December 2016. (McKenzie is one of the persons who procured CFDs as alleged. He is the subject of count 6 and now is a person who now enjoys Crown immunity from prosecution).

7. [7]
   In the applicant’s application, two other bodies of evidence were also identified and subject to application for exclusion, but the applicant no longer pursues his application related to those matters.
8. [8]
   The applicant however seeks a ruling for the exclusion of those three bodies of material noted in paragraph [6] above.

Objection 1 – Record of interview dated 18 November 2015

9. [9]
   The applicant seeks the exclusion of this ROI on the basis that:

   1. (a)
      Its admission would be unfair to the applicant; and/or
   2. (b)
      It was obtained in an unlawful and improper way that is contrary to the public interest as its prejudicial effect outweighs its probative value.
10. [10]
    The ROI was conducted during the course of the execution of the warrant. The circumstances surrounding the execution of the warrant and its relevance to the ROI requires some explanation
11. [11]
    The lead investigator for the investigation was ASIC Officer Flynn. He gave evidence on voir dire that he had been an investigator with ASIC, and I infer he had been for some years. He stated his designation was as “senior investigator”. In evidence he stated that at ASIC he had undertaken training in conducting interviews. That included training concerning the responsibilities associated with the conduct of interviews, although he did not believe it included the obligations that apply generally to the issue of warnings. That matter does seem surprising given he not only administered at least one warning but he also accepted he was aware of the existence of rights pursuant to the Crimes Act 1914 (Cth) as they relate to persons being interviewed in accordance with that Act. He also acknowledged that he had received training in running and managing investigations, including training on the legal framework within which investigations are to be conducted. His knowledge of rights extended to accepting that the occupant of a premises had a right to be present during the search and observe the search being conducted. At the time of execution Mr Flynn attended the premises accompanied by two persons capable of speaking Chinese, one a qualified Mandarin interpreter and the other, an ASIC employee capable of translating Cantonese. In the event, the defendant himself preferred to speak Mandarin.
12. [12]
    It is plain from the pre-planning and warrant preparatory material that Mr Flynn was not only lead investigator but that he had a significant team of investigators and others related to the investigation from within ASIC engaged on this task and that he was also co-ordinating these activities with the Australian Federal Police.
13. [13]
    The warrant issued the day before its execution. It was issued upon the application of Mr Flynn who swore by affidavit placed before the Magistrate that he originally suspected the defendant and others had committed insider trading offences. In the Operation Order he was designated as “co-ordinator” with overall control of the operation. He signed off on the operational order as “senior manager (Project Sponsor)”. While Mr Flynn’s affidavit could support the application for the warrant, s 3E Crimes Act 1914 (Cth) provides a warrant is issued to a “constable” to be responsible for executing the warrant. Section 3 of the Crimes Act 1914 (Cth) defines a constable to mean “a member or special member of the Australian Federal Police…”. In executing the warrant, the constable is authorized to seek assistance of a person who is not a constable. In this case each of the ASIC officers provided for in the execution plans was designated as a constable assistant: see s 3G Crimes Act 1914 (Cth).
14. [14]
    The execution of this warrant entailed quite a deal of planning by both Mr Flynn of ASIC and in turn the AFP, who were requested by ASIC to assist them in this part of their enquiry. The instrument drafted by Mr Flynn and entitled “Operation Order – Draft for Discussion” dated 13 November 2015 addressed the objective as follows:

“Objective:

1. (a)
   execute s 3E Crimes Act 1914 search warrants on the relevant premises;

2. (b)
   undertake voluntary interviews of the Relevant Persons;

3. (c)
   obtain forensic images of electronic devices by the Relevant Persons, with s 33 of the ASIC Act to be relied upon for those persons not the subject of a search warrant.”

For the purpose of obtaining evidence relating to the alleged conduct outlined below.”

15. [15]
    The detailed operational plan identified the defendant and others as being suspected of nefarious insider trading activity and included a broad factual basis for that belief. It identified the relevant premises and persons the object of the investigation. The defendant and his premises were plainly nominated by inclusion of location maps of the various premises. The instrument identified the specific personnel attached to each team. One team was allocated to each specific premises of which there were four. Each team attending the two principal premises comprised 13 persons (five AFP personnel and eight constable-assisting personnel being ASIC staff for the first team, and six AFP personnel and seven constable-assisting personnel for the second team). Teams 3 and 4 each comprised three members. They were to attend the premises of peripheral subjects. All up the operation involved approximately 32 to 33 personnel. It was by no means a small operation.
16. [16]
    The operational timetable noted matters would commence the day before execution with members of both ASIC and AFP attending upon a magistrate for the issue of the warrant. It was proposed that the next day at 8.30am there were to be simultaneous executions of warrants upon four premises, one by each team. As Teams 3 and 4 were involved with peripheral subjects, they were then to make their staff available to back up Teams 1 and 2 as circumstances required. The pre-execution briefing was to be conducted at ASIC offices once the warrants were issued. Mr Flynn was designated “team leader/co-ordinator”, and Constable Cowling was the executing officer. Both Mr Flynn and Constable Cowling were allocated to Team 1 which was to undertake execution of the warrant upon the applicant’s premises. That team was the lead team.
17. [17]
    Each other team also had an allocated leader and executing officer. Each other team member had a designated task, usually described by reference to the activity to be undertaken by it.
18. [18]
    The operational orders stated that the AFP would execute the warrants and ASIC personnel would be constables assisting. The orders reinforced the standing of Mr Flynn, noting that all tactical and procedural decisions would be made by him. The primacy of the AFP in executing the warrants noted that all tactical and procedural decisions concerning it would be made by the executing officer, being AFP Officer Cowling in ­respect of Team 1.
19. [19]
    As part of its engagement, the AFP prepared a “Standard Tactical Plan” which was noted as the “Standard Tactical Plan – ASIC Warrant Assist”. That 46-page plan likewise dealt with the factual background provided to the AFP by ASIC providing a comprehensive summary of the Relevant Persons and the offending said to be “suspected”. The mission was clearly identified, that is to “obtain evidence of involvement of insider trading for the safe and lawful execution of …search warrants” and the execution phase noted five phases, most of which were relevant to the AFP’s execution of the warrant but which also included Phase 5, which was addressed in these terms:

“3.5 Phase 5

Interview

• All investigating officers are reminded of their obligations under Part 1C of the Crimes Act 1914 (Cth); and
• ASIC investigators will conduct any interviews deemed necessary by ASIC.”

At this point, it is noteworthy the AFP plan provided in Phase 5 of its execution for the “conduct of any interviews deemed necessary by ASIC” but ASIC in its own plans made no reference to a similar phase. However, as the evidence indicates, ASIC plainly intended to conduct interviews by having attended the premises with recording equipment, an interpreter and other investigatory material which the ROI reveals was used by the interviewing officer in the course of his interview of the applicant.^[2]

20. [20]
    Further, the AFP investigation practice standard for search warrants at page 8 of 17 provides under the heading “Establish an execution plan” as part of the preparatory stage for the completion of a plan “for anticipated interviews and arrests”. It provides that for the warrants’ execution “all conversations/interviews (as applicable to warrant) must be compliant with the Crimes Act 1914”.
21. [21]
    In addressing roles for warrant execution the nominated “interviewer” is stated to be:

“responsible for planning, conducting and recording interview(s) with the subject(s) in accordance with legislation and AFP best practice, ensuring a corroborator is present.”

22. [22]
    From the affidavit sworn by Mr Flynn in support of ASIC’s application for its warrant, it was apparent that the investigation into these offences was well advanced. ASIC had already identified the relevant suspects whom all feature in the indictment. They had details of the transactions including dates of acquisition, the names of purchasers and an appreciation of the high-volume telephone traffic between the applicant and others alleged to have been involved, including transcript of telecommunication intercepts and relevant and particular details of money transfers between them. These objective features are amplified by conversations recorded in the course of telephone intercepts which in the circumstances do not otherwise appear to be open to innocent interpretation. When that material was coupled with the actual market performance following the material announcements, an inference was open that the applicant and others had engaged in conduct amounting to unlawful insider trading. On its face and in the absence of any other apparent explanation, the only alternative innocent hypothesis was one of serendipitous good fortune.
23. [23]
    Based upon that material, Mr Flynn reasonably suspected that during the relevant period the applicant and others were in possession of information regarding GRAM’s proposed takeover bid for PNA which they knew or would reasonably have known was not generally available, and if it were generally available a reasonable person would expect it to have had a material bearing upon price or value of financial products related to PNA. In those circumstances the applicant himself had caused others to acquire shares and CFDs relating to PNA and accordingly committed these suspected offences.^[3] The particularity of Mr Flynn’s knowledge was manifest in the suspected offence stated in the third condition of the warrant.
24. [24]
    In the circumstances it would appear that apart from any material shedding an exculpatory light upon matters, the execution of warrants would largely have served to establish beyond doubt his actual engagement in this conduct by securing documents relevant to the prosecution and in possession of the applicant and others from devices or equipment used by him. Such might be expected to be found on a hard drive or other electronic devices at the applicant’s property.
25. [25]
    Although the language employed by Mr Flynn in his affidavit sought to characterize his assessment at that time as only being “suspicions”, that clearly was a mischaracterization. At the time the warrant issued he was in possession of a significant body of evidence, more than enough for a prima facie case. However, in fairness, until he had possession of hard drives and devices to firmly establish the defendant’s active participation in placing orders, the prosecution case was at risk.
26. [26]
    It was against that background that the warrant was executed and Mr Flynn attended upon the premises and after a short time commenced the ROI with the applicant. The ROI between Mr Flynn and the applicant took place between approximately 10.08am and 1.00pm. There were two breaks during the course of the interview with a total recording time being approximately two hours and 10 minutes. Mr Flynn was accompanied by a corroborator, Miss Jane Cam. In addition, an accredited Mandarin interpreter, Shan Ma, provided interpreting services in the Mandarin language during the interview. Miss Cam was an unaccredited interpreter and capable of providing assistance in Cantonese only. However, the applicant indicated that he preferred to converse in Mandarin.

Apart from engaging the applicant for the better part of three hours the conduct of the ROI also had the collateral effect of denying him his right to observe a substantial part of the execution of the warrant as that took place around him given no less than five officers would have been devoted to that task while he was in the company of Mr Flynn, his corroborator and the interpreter.^[4]

Court’s discretion to exclude evidence

27. [27]
    Section 130 of the Evidence Act 1977 (Qld) provides:

“Nothing in this Act derogates from the power of the court in a criminal proceeding to exclude evidence if the court is satisfied that it would be unfair to the person charged to admit that evidence.”

28. [28]
    In R v Adcock^[5] Morrison JA (with whom Gotterson JA and North J agreed) stated with approval at [67] a quote from R v D^[6]:

“With respect to s 130, the unfairness invoking the exercise of the statutory discretion would be the variety discussed in R v Swaffield (1997-1998) 192 CLR 159, and particularly at 189; namely a concern with not jeopardising an accused person’s right to receive a fair trial.”

29. [29]
    The approach to admissibility has been extensively considered. Here it is governed by operation of both common law and the provisions of the Evidence Act 1977 (Qld). Generally,

“If evidence is of some, albeit slight, probative value, then it is admissible unless some principle of exclusion comes into play to justify withholding it from a jury’s consideration.”^[7]

30. [30]
    Although the ROI contains a significant body of material which might be considered irrelevant and confusing it includes some relevant material, especially relevant admissions concerning funds transfers evident in the applicant’s bank accounts together with statements by him concerning transactions by related parties which were facilitated by him. There are other matters said to be included in the ROI which might also be relevant, subject to how they are interpreted, such as information concerning relevant relationships.
31. [31]
    In this case I do not think it could be submitted the material contained in the ROI was entirely irrelevant; that is despite it being relatively “weak”. As Gleeson CJ observed on that point in Festa v The Queen^[8],

“The totality of the evidence may be such as to render a conviction unsafe. But that does not affect its admissibility.”^[9]

32. [32]
    However material will be excluded on a discretionary basis pursuant to s130 Evidence Act 1977 (Qld), which permits a court to exclude evidence if the court is satisfied that it would be unfair to admit that evidence. That is the substantive submission for the applicant here.
33. [33]
    It is contended the ROI should be excluded as a matter of fairness because despite its prima facie admissibility, its probative value is outweighed by the prejudice it would occasion because of the danger a jury might use it in a manner that goes beyond its probative value by giving it more weight than it deserves or because the nature or content of it may inflame the jury or divert it from its task.^[10]
34. [34]
    The Crown relies upon matters stated in the ROI as part of the factual foundation upon which material circumstantial facts might be determined. Although generally the “weakness” of such evidence is not a general consideration in the situation of a circumstantial case its weakness would favour exclusion where “the evidence had little weight but was likely to be gravely prejudicial to the accused”.^[11] The applicant contends prejudice arises here because:

    1. (a)
       The confusing form of the ROI occasioned by:

• poor use of the Mandarin translator;
• misinterpretation of the applicant;
• the applicant’s confusing statements attributable to his poor English expression;
• the applicant’s concern that he had not been accurately interpreted;
• the inability of any appropriate jury direction to rectify those defects being available in the circumstances;
  2. (b)
     The public policy considerations warranting its exclusion.

35. [35]
    The plurality in Pollard v The Queen^[12] observed that often the convenient course first would be to determine the issue of “unfairness” before considering exclusion on public policy grounds as resolution of the first question will usually render it unnecessary to consider the second;^[13] although as Deane J observed, often these considerations will overlap.^[14]
36. [36]
    In this case the contention principally advanced by the applicant is that the ROI is so flawed both by the manner in which it was undertaken – that is the mechanism used for asking and answering of questions – and the prospect of misinterpretation of the applicant being so elevated that it was fundamentally unreliable. It was submitted that as unreliability is the touchstone of unfairness^[15] its admissibility should founder on that ground alone.
37. [37]
    In my view, for reasons which follow, I consider the ROI to be unreliable and that in the circumstances it would be unfair to admit it. I will address factors related to public policy considerations relevant to reliability below, but at its essence I am satisfied the ROI is an unreliable document in material respects. I do not consider that any direction can appropriately address its defects.
38. [38]
    Each of the points made in paragraph [34(a)] above can be illustrated from the ROI. Collectively the product of the interview is a confusing statement. The ROI does not reveal a confession to any offending, indeed nothing was put to the applicant. The limited admissions made, particularly concerning bank account entries, can be established by other means. Overall, in my view the difficulties otherwise revealed cannot be corrected by a judicial warning. The ROI extends over two hours and the excising of offending parts would leave a shell that would render the remainder quite misleading. To put the offending parts before a jury would render the ROI a confusing, almost unintelligible mess. Even if an agreed transcript could go before the jury, I do not think that would assist.

Addressing the applicant’s complaints

Poor use of Mandarin interpreter

39. [39]
    The common law provides that at trial an interpreter would be used where the circumstances indicate the witness would be placed at an unfair disadvantage.^[16] It might be inferred that prior to the execution of the warrant such an assessment was made by Mr Flynn based upon his consideration of telephone intercept material; although as he planned to conduct the ROI he may simply have wanted an interpreter present to assist with the intercepted conversations he wished to play to the applicant for comment.
40. [40]
    In any event having listened to the ROI it was apparent he had difficulty with English. It was his second language. Some parts of his expression were relatively plain. It was also clear he understood many questions asked. However, there were many occasions where it was apparent he had difficulty in both understanding matters and questions put to him and in communicating his response. On a number of occasions he requested the aid of the interpreter. On many occasions when he spoke in English his language was tortured and it was plain, he did not understand the question being asked and/or was unable to provide a comprehendible answer. When asked he nominated Mandarin as his preferred language. Despite that nomination there were occasions when he spoke either of Mandarin or Cantonese. There was no apparent explanation for the use of different languages. Furthermore, while some of the interview was conducted in Mandarin and/or Cantonese, a significant part of the interview was conducted in English. It is apparent from the transcript and the audio of the ROI that the applicant’s grasp of English language is poor to passable, but he had significant difficulty speaking English except in a broken format. Putting aside syntax, he struggled even with basic expression, for instance the appropriate use of gender pronouns. See for example the passages referred to in the footnotes.^[17] All these matters made it difficult to follow the applicant’s statement.
41. [41]
    Added to this is the manner in which the interview itself was conducted. Some of the interview appears to have been conducted between Mr Flynn and the applicant in English and other parts involved the applicant and Mr Flynn addressing each other through the medium of the interpreter. However on a number of occasions, the interpreter and the applicant appear to have engaged in conversation between themselves and then in turn it appears that the interpreter has engaged in conversation between himself and Mr Flynn; that is to say, there has not been a strict translation through the medium of the interpreter but rather the interpreter having engaged in discussion with the applicant then answered questions posed by Mr Flynn, no doubt expecting that his answers were consistent with his understanding of the applicant’s earlier statements to him. See for instance this extract from the interview:

“Mr Li:But I never follow up to pay to look into which share, but every day I look all the different share, if some share have interesting like the PNA in 2014 whenever, why I interesting because it relate to Chinese because I heard about that so that’s why I look into, I remember this share.

Anthony:So when you say you heard about that, what is that you heard about it?

Mr Li:Not heard about it, maybe it’s my English.

Anthony:Perhaps you can clarify.

Mr Li:[Mandarin] I was saying, PNA, because in 2014 I noticed it, but afterwards I never paid any attention to or followed this thing, as I watched these every day regarding this industry, the Share, etc.^[18][27:15] I speak, I better to using [inaudible].

Interpreter:Okay. I came across that name in 2014.

Anthony:Sure.

Interpreter:But then that was off my mind –

Anthony:Yes.

Interpreter:- but I still kept looking at this industry in general.

Anthony:In the sector.

Interpreter:In the sector.

Anthony:Not at PNA specifically, but the sector. Yes?

Interpreter:Yes, yes.”

42. [42]
    Other instances can be seen in the passages referred to in the footnotes.^[19]

Adequacy of the translation

43. [43]
    Defects with the interview do not stop with the inadequacy of the warnings of which ought properly to have been administered as is addressed below. There are obvious failures to translate very important parts of the ROI. Annexures A and B to the applicant’s outline in Exhibit 1 detail illustrations of translation errors. Ultimately, the question of translation is one of fact. However, as the applicant’s counsel submits, given the number and nature of the contended errors in translation, there is a significant risk that the jury will be presented with a confusing mess of an interview in seeking to resolve those matters.

Confusing and/or unintelligible exchanges

44. [44]
    There were many confusing and/or unintelligible exchanges which extended over quite a body of the material. For example this exchange.

“Anthony:Not with regards to any information that you might have known about?

Mr Li:No. If you play CMC market, while you’re in that show, but I tell you I play CMC because using a little bit money. Two cents, three cents. It’s much different than you, if one day you buy early than late, it’s much different because you put limited money there. So I better to buy straight away today, otherwise tomorrow they drop another ten cents so that’s why I pushed.

Anthony:Did he open – did he end up opening an account in his name? Do you know?

Mr Li:No. I don’t know that it’s open or not. Finally, no. He told me - it’s funny. I asked him to buy and he still late, late, late. And the date is Friday. In my memory, if you buy next week - another day, I don’t know if he buy it or not yet. After I didn’t have a conversation. But I did know he buy the share from the - he -

Anthony:What about his wife?

Mr Li:Oh his wife. I think he using his wife to buy them.

Anthony:Do you know why?

Mr Li:He’s run out of time.

Anthony:Did he tell you that?

Mr Li:Yeah, he’s too busy. He say he using himself to buy the – using Super Fund, but I don’t know he buy or no. That’s one thing. And second things is that, he, end of the time, he don’t have the time to sort that. Because he told me that that’s why he asked his wife to buy. He told me that.

Anthony:Did he ask you to help his wife to open the account up?

Mr Li:I .. Uh … no, his wife already know. I asked. I tried to help Mark to open up. I told them the CM, about the CMC, how to do that. And then I linked to the CMC, but after, when they opened account, Mark tell me, I said, “Do you open yet or not yet?” “Oh yeah open I using my wife’s name.”

Anthony:That was the first time you

Mr Li:Second time I talked.

Anthony:No, sorry, the first time you became aware that the account was opened up in his wife’s name was when Mark told you that, is it?

Mr Li:Yeah, I tell Mark to open the CMC account. I don’t know he using his own name or his wife name.

Anthony:You didn’t know that.

Mr Li:I didn’t know that.

Applicant misunderstood

45. [45]
    Other instances of confusing or unintelligible exchanges are referenced in the footnote below. ^[20]
46. [46]
    The applicant himself did not think he was being understood. See for instance from the exchange below, it is apparent that the applicant himself did not consider the interpreter accurately interpreted his spoken words. See for instance this exchange towards the end of the ROI:

“Mr Li:12.53pm, yea. I want to say one more thing. Because your conversation, a few of my sentences were somehow misunderstood by him, but I still.^[21]

Interpreter:Yeah, I want to add another point. During the conversation, there are several times, it seems that I had myself misunderstood by you.

Anthony:Are there any questions you would like to clarify?

Mr Li:No.

Anthony:Are there any particular questions that you recall that you don’t think you understood properly?

Mr Li:No, that’s okay. I just worried about I answer you the question you go to. Uh… I am worried that my answers to your questions are not understood as I told. How to say that.

Interpreter:Okay. So I think what he’s saying is that the way he answer your question perhaps you interpreted by yourself not the way he would like to, is that what you said [Mandarin] Is it what you meant?

Mr Li:Yeah, yeah.

Interpreter:You answer the question but the way you [unclear] understanding is not what he intended to convey.

Anthony:Is there anything you think you need to clarify?

Mr Li:No.

Anthony:Are there any things in particular that you think I’ve misunderstood?

Mr Li:Uh… not the particular one item.

Anthony:Is there something you would like to clarify?

Mr Li:I feel like the Mark Mackenzie’s things. [Mandarin] [2:08:40] I want to explain that when I told Mark to buy the shares, what I meant was indeed somehow exaggerated. I used my own opinion, even though I didn’t have reliable and accurate information. However, I gave him the impression that I had a very sure message for him. Actually my intention was to push him to buy.

Interpreter:When I’m talking to mark, I somehow exaggerate the extent that I knew the source of the information. I give him the impression that source was more reliable than it actually was. The intention was to push him to buy.”^[22]

47. [47]
    From that passage it seems self-evident that the applicant and Mr Flynn were not of one mind in relation to certain matters. For instance, through the interpreter, the applicant said, “it seems I had myself misunderstood by you”. Mr Flynn asked whether there were questions he would like to clarify and the applicant said “no”. Shortly after he then proceeded to say, “I am worried that my answers to your questions are not understood as I told how to say that?”. I think the only fair construction of this passage was that the applicant didn’t think he had been fairly interviewed because Mr Flynn hadn’t grasped many of the matters the applicant was seeking to state. Other instances can be found in the references in the footnote below.^[23]

Conclusion

48. [48]
    A significant part of the ROI should be excluded because it is in my view fundamentally unreliable. What is left of the ROI are piecemeal fragments, some of which are relevant, but which lack contextual framework. When considered overall, particularly in light of the applicant’s complaints about him being misunderstood, I am satisfied that the ROI is an unreliable document and on that ground alone ought to be excluded.

Contrary to public interest

49. [49]
    It was submitted for the applicant that the ROI ought to be excluded because it was obtained in an unlawful or improper way and therefore obtained contrary to the public interest. In particular, it was contended the conduct of the ROI on warrant premises and during the execution of the warrant violated the terms of the search warrant and exceeded the statutory authority that was invested in the investigators through Part 1AA of the Crimes Act 1914 (Cth). It was submitted it arose from an undisclosed ulterior purpose for obtaining the search warrant. To that end it was submitted that Mr Flynn and Miss Cam were on the applicant’s premises by virtue of their status as “constables assisting” the constable who was responsible for executing the search warrant, namely AFP Officer Cowling. The argument proceeded that ASIC’s interviewers’ powers of investigation at that time were limited to the search and seizure powers that were authorised by the search warrant. The search warrant did not authorise them or anyone else to engage in official questioning of the applicant of the kind that occurred and at the time it occurred. It was submitted the only official questioning that could be conducted during the execution of the search warrant was that which was ancillary or incidental to the execution of the warrant itself. In their submissions, counsel for the applicant contended the only bases upon which the ASIC officers including Mr Flynn were upon the premises, was by operation of Part 1 AA of the Crimes Act 1914 (Cth) which governs the powers of search, information gathering and arrest.
50. [50]
    In this instance, the warrant was one provided for in s 3E which concerned a search of premises (a premise warrant) and the activities permitted pursuant to the warrant were those provided for in s 3F. So far as the premises were concerned, it provides:

“3F(1)A warrant that is in force in relation to a premises authorises the executing officer or a constable assisting:

1. (a)
   to enter the warrant premises and, if the premises are a …; and

2. (b)
   to search for and record fingerprints found at the premises and to take samples of things found the premises for forensic purposes; and

3. (c)
   to search the premises for the kinds of evidential material specified in the warrant, and to seize things of that kind found at the premises.

…”

51. [51]
    Section 3(1) defines “constable” to mean “a member or special member of the Australian Federal Police or member of the police force…” and s 3C also defines a “constable assisting” to mean “(a) a person who is a constable and who is assisting in executing the warrant; or (b) a person who is not a constable and who has been authorised by the relevant executing officer to assist in executing the warrant.”
52. [52]
    Although it was not unlawful for ASIC to conduct a ROI concurrent with the execution of the warrant, it was unusual. Plainly questions might be asked during the execution of a warrant of matters relevant to or ancillary to the information being uncovered; that is to be expected and is properly ancillary to the execution of a warrant. As a matter of process, it might also be expected that as the warrant is part of the general investigatory process, questions included in a ROI might follow immediately upon its completion.
53. [53]
    The execution of a warrant of itself creates a dynamic environment. Accordingly, until the search is conducted, an investigator might not be armed with all relevant material, nor can the investigator be satisfied that he/she is armed with all such material necessary or required to conduct an efficient ROI. If so, it might be thought that there would be little point in commencing a formal ROI until that time. Finally, the situation of execution might be such as to overwhelm the unsuspecting occupier such that he/she might not appreciate his/her right to depart the place being searched, nonetheless the right to silence or to seek the assistance of support, legal or otherwise, during the course of the search.
54. [54]
    Against that background it should not be forgotten that the purpose of the warrant provisions in Part 1AA are to provide for the gathering of information to determine whether offences have been committed and to facilitate proof of them.^[24] While the undertaking of a ROI is not prohibited in the course of executing a warrant, given that commonly a formal ROI is usually the last step in the investigatory process, it being undertaken in the circumstances under consideration here is quite curious. ROI’s are usually undertaken and directed principally to obtaining useful relevant admissions but also to afford an opportunity for the principal suspect to provide exculpatory statements, if apposite. Accordingly, the undertaking of the ROI before completion of the search seems premature remembering the search powers are supplementary to common law rights in their curtailment of them, consistent with the “principle of legality”. It follows that upon my assessment of the evidence relating to the circumstances, preceding and following upon the execution of the warrant, here immediate concerns arise concerning the exercise of the search power in good faith and in particular whether its exercise was for the purpose for which it was requested and not for some ulterior or collateral purpose.
55. [55]
    Prima facie the warrant was executed for a proper and valid reason, namely, to search for documents and other relevant related material concerning the alleged offences. However, the conduct of the ROI was an intended but unexpressed collateral purpose. By reference to the AFP’s operational plan, it was a matter expressly within its contemplation; although the extent and ambit of the ROI proposed was not specifically within the knowledge of Officer Cowling, who was the executing officer. Plainly however, given the level of preparation by MrFlynn, it was a significant collateral purpose intended by him and one which was also likely to distract him from engaging in the search authorized by the warrant, the very purpose for which he was appointed “constable assisting”.
56. [56]
    While the AFP under the command of the enforcing officer and those ASIC officers who actively partook of the search activity did so properly and in good faith, in my view, the same cannot be said for Mr Flynn and Miss Dam who sought to “colour” their presence on the premises with that of the warrant for at least that period when they were engaged in the collateral activity of conducting a ROI. That activity constituted a collateral or anterior purpose beyond the search permitted under the warrant, and gives rise to a consideration of whether it would be unfair to admit the record upon the exercise of a discretion to exclude it upon the basis of unfairness or a public interest basis.
57. [57]
    For this, it is prima facie necessary for the prosecution to prove on the balance of probabilities that the admissions made by the applicant in the ROI were not influenced by that nefarious conduct of Mr Flynn.^[25]
58. [58]
    However the considerations do not stop there. Section 3P of the Crimes Act 1914 (Cth) permits an occupant of premises being searched to observe the search being conducted. As Flick J in Zhang v Commissioner, Australian Federal Police^[26] observed:

“One purpose achieved by the provisions such as ss 3H [a copy of warrant must be given to the occupier] and 3P [occupier’s right to observe the search] is to ensure that the occupier or other person is fully informed as to the extent of the authority conferred by a warrant. He is thereby placed in a position whereby he can observe that the terms of a warrant are not being exceeded…[and] ensure that the occupier or other person is not reduced to a mere bystander.”^[27]

59. [59]
    The applicant was distracted from his rights to observe for the better part of approximately three hours over an eight-hour period. The significance of that distraction was amplified because of the number of officers (both AFP and ASIC) engaged in search of the premises pursuant to the warrant.
60. [60]
    The applicant contends that as Mr Flynn was on the premises as a constable assisting (in accordance with s 3G Crimes Act 1914 (Cth)) that meant that he was on the premises as an agent of the constable who was executing the warrant, namely AFP Officer Cowling. On that basis it was submitted that the applicant was entitled to treatment by Mr Flynn identical to that which Officer Cowling would have been required to afford him had she conducted the interview with him; that is to say with the privileges and entitlements applicable to a protected suspect as defined in s 23B Crimes Act 1914 (Cth) and subject to the protections provided in sub-division C – Miscellaneous Proceeding from s 23E.
61. [61]
    In particular it was submitted that given the operational plan anticipated Mr Flynn would be conducting interviews, the court should find that pursuant to s 23B(2a) the interview occurred “in the company of an investigating official”, namely AFP Officer Cowling.
62. [62]
    I do not think that argument is sustainable because the conduct of the ROI was not conduct governed by the processes provided for under the execution of the warrant in accordance with s 3G for reasons I have addressed earlier. Further, the applicant was not a protected suspect as defined in s 23B because of the status of the ASIC investigating officer. Mr Flynn was not an “investigating official” as defined as he was not “a member or special member of the Australian Federal Police” or

“…a person who holds an office the functions of which include the investigation of Commonwealth offences and who is empowered by a law of the Commonwealth because of the holding of that office to make arrests in respect of such offences…”^[28]

It is accepted Mr Flynn had no power to make arrests. The protections provided by Part IC – Investigation of Commonwealth Offences are limited by its provisions, particularly to persons who satisfy the definition of “protected suspect” which in turn calls for consideration of whether the relevant investigating official is an “investigating official” as defined. That is not this case.

63. [63]
    It was also submitted that this case was analogist to the decision in R v Ul-Haque.^[29] Respectfully, I do not accept the applicant’s submissions on this matter entirely. In R v Ul-Haque the officers were ASIO officers, so like the ASIC officers here they were on the premises “under colour of the warrant”. While it is correct to observe as His Honour Adams J stated at [44] that:

“…to conduct an extensive interview with the accused, keeping him incommunicado, under colour of the warrant, was a gross breach of the powers given to the officers under the warrant.”

That quote must be seen in context.

64. [64]
    The circumstances of the interview in Ul-Haque, including the lead-up events and events generally, led His Honour to conclude the interviews were conducted in oppressive circumstances. That background is not evident in this case. However, His Honour’s remarks at [43], [61] and [94] support the conclusion that the conduct of the ROI was not ancillary to the search, but undertaken using the colour of the warrant to position the subject for the purpose of a ROI. Although not expressly stated by His Honour, it seems clear that His Honour considered the conduct of the interview in Ul-Haque was not one authorized by the warrant; but because it was being undertaken under colour of the warrant that fact was one of the features to be considered in determining the issue of fairness. Having determined the process was oppressive by reference to other factors particular to that case, Adams J did not proceed to expressly consider the status of the ASIO officers and in turn that of Ul-Haque and whether he was a “protected suspect”. Nor did he comment upon the use or the colour of the warrant to access the suspect for the purpose of an interview in circumstances which otherwise would not have been available to him. His Honour’s conclusion made such finding unnecessary.
65. [65]
    That said, s 23A(5) Crimes Act 1914 (Cth) states the safeguards provided for in Part IC “are in addition to, and not in derogation of, any rights and freedoms of the individual under a law of the Commonwealth or of a State”. Division 3 includes a number of protections, including:

• Right to communicate with friends, relative and legal practitioner – s 23G
• Right to an interpreter – s 23N
• Right of non-Australian to communicate with consular official – s 23P
• Treatment of persons under arrest – s 23Q
• Right to remain silent etc – not affected – s 23S
• Tape recording of confessions and admissions – s 23V

Unsurprisingly, this constitutes an expansion of rights otherwise provided for in state law and which accords with community expectations of fairness in the exercise of such powers.^[30]

66. [66]
    In my view, although s23A(5) considerations have no strict application in this case because the applicant was not a “protected suspect” as defined, their presence in the Crimes Act 1914 (Cth) informs the standard expected of investigators of Commonwealth offences, despite them not being “investigating officials” as defined. As a matter of practice, the Judge’s Rules provide a benchmark against which the behaviour of the ASIC investigators can be measured. Here, at the time of the execution of the warrant, five AFP officers and eight ASIC personal arrived and by force of warrant entered upon the applicant’s premises. At the time the warrant was executed the applicant wasn’t arrested or formally detained. He was never told he could leave. He was initially shown a 16-page single line spaced warrant and ‘Rights of Owner’ document.^[31] One can only wonder what a Chinese speaking national would have made of that, notwithstanding the assistance of an interpreter, given Constable Cowling’s own observation he needed language assistance at the time of the execution of the warrant. She too noted language assistance was necessary despite the applicant being served not only with an English version of that material, but also a traditional and simplified Chinese version of the 16-page rights document.
67. [67]
    In my view he was not effectively informed at the time of execution of his right to observe and the presence of this large body of officials would have created a reasonable apprehension that the applicant was being detained whilst the warrant was executed. At the time the warrant was executed, Mr Flynn had more than ample material to support a reasonable apprehension that the applicant had committed the offence with which he was ultimately charged. So much was evident in the particulars of the warrant itself. In my view, the applicant had a prima facie right to a caution informing him that he was the object of an investigation concerning the various offences with which he was ultimately charged. None of that occurred in a substantial way at that early time.
68. [68]
    He was simply informed that ASIC were “… investigating today in PanAust Limited, otherwise known by its ASX stock code of PNA; in particular ASIC is looking to conduct some voluntary interviews with a number of persons which traded in the financial product of PNA in March 2015, including yourself.”^[32]
69. [69]
    In my view, the circumstances surrounding the conduct of the ROI were prima facie unfair. Mr Flynn sought to use his lawful right of entry for a collateral purpose. This did not happen spontaneously but was pre-planned. The interview was proposed for a time when its conduct would interfere with other rights of the applicant relevant to the search, in particular, including his right to observe. Excluding Mr Flynn, his corroborator and his interpreter, there were six other people engaged in the execution of the warrant in respect of premises that included not only his residence but also his business. It is reasonable to infer in the circumstances that conducting the ROI distracted the applicant from engaging in his lawful right to observe that search. Generally, the circumstances surrounding the conduct of the ROI smacked of ambush with the applicant having to address multiple processes, all of which will have been unfamiliar to him, putting aside self-evident communication issues which are addressed earlier.
70. [70]
    Early in the ROI, Mr Flynn said to the applicant that he was “not obliged to talk” to him. However he did not add at that time that anything the applicant said might be used in evidence. Further to that matter, not only was the warning administered limited in terms, but it was also spoken in English and not subject to translation into Mandarin, the applicant’s preferred language. In seeking to amplify that limited warning, Mr Flynn said the interview was “voluntary”. It seems evident from the translation contained in the transcript that the subtlety of the language of being “not obliged to talk” to Mr Flynn and his conversation with Mr Flynn being “voluntary” did not resonate with the applicant, and in fact, caused him confusion. Further, beyond telling him they were investigating trading in PNA, they never told him he was being investigated in respect of a suspected offence related to insider trading in PNA – and it was information he provided in respect of that matter that would be used against him. The translation of these matters did not assist the situation:

“Anthony:Perhaps I’ll get you to translate this next section. You are not obliged to talk to me, but I would like to speak to you at this early stage and identify the extent to which you may be able to assist ASIC with its investigations.

Interpreter:He’s saying that you are not obliged to have this conversation with him, but he would like to, eh, to tell you today at this early stage of the conversation, and then to tell you, then to tell you in what way you may be able to assist ASIC.

Mr Li:What ASIC?

Interpreter:… ASIC is the name of their organisation, it’s the Australian, a, yes yes, Securities and Investments Commission. They call it ASIC. It is the one in charge of all company, and securities, etc. In charge of all these.

Mr Li:…Ok, I understand.

Interpreter:Ok, understand.

Anthony:This interview is voluntary.

Interpreter:…Hmmm, the interview today is completely voluntary.

Mr Li:Mmm.

Interpreter:He said, earlier he, they also mentioned …, OK Yeah.

Mr Li:… this is voluntary.

Interpreter:Voluntary, that is completely by yourself.

Mr Li:In the beginning, he said I had no rights, what did he mean?

Interpreter:Oh this is voluntary.

Anthony:Yes, you are not obliged.

Interpreter:… that is, you have no obligation to talk to him, if you’re not willing to, you may refuse to talk.

Mr Li:Mmm.

Interpreter:that is, you have no obligation to talk to him.

Anthony:I would like to ask you some questions and you can decide whether you want to answer them or not.

Interpreter:…He’s going to ask you some questions, and you yourself can, you can decide by yourself whether you are willing to answer his question or not.

Mr Li:…Ok.

Anthony:If at any point you do not want to wish to speak to me, you are free to leave or decline specific questions.

Interpreter:…If at any point you do not want to continue to talk like this, you may leave at any time or refuse to answer his questions at any time.

Mr Li:Mmm.

Anthony:Are you now willing to participate in this interview?

Interpreter:…Are you now willing to continue this conversation?

Mr Li:Yes, I am.^[33]

Interpreter:Yes.”

71. [71]
    Upon a fair reading of the ROI, I am not satisfied that the applicant understood entirely what was meant when he was told that he was not obliged to talk. A little later in the ROI and after the applicant had told Mr Flynn that he preferred to speak in Mandarin, Mr Flynn then told the applicant in English that he didn’t have to say anything but that if he did, it would be used in evidence. For my earlier reasons I am not satisfied the concession by the applicant that he understood was fairly obtained. Difficulties in translation had already become apparent. The circumstances during which the ROI was conducted, were in my view, coercive. Ultimately, there are in my view, real concerns about the voluntariness of the interview, particularly in circumstances where the interview was being conducted against the “colour” of the execution of the search warrant and the applicant as interviewee did not have a clear understanding of his rights. However that point is not taken by the applicant and does not inform my ruling.
72. [72]
    In fairness to Mr Flynn, a more expansive warning, in accordance with that which is customarily expected, was given after the first and second breaks that occurred during the course of the ROI. They were administered after approximately one hour and two hours respectively into the interview. However, by that time the interview was in each instance well advanced and the execution of the warrant and the presence of police officers attending upon that task continued. The inherently coercive circumstances in which the ROI was conducted had not changed, and if anything, by a time those additional warnings were administered, issues concerning interpretation would have been apparent to Mr Flynn.
73. [73]
    Upon a fair reading of the ROI, I am not satisfied that the applicant understood entirely what was meant when he was told he was not obliged to talk. The disadvantage to the applicant was compounded, in my view, by the ROI being conducted whilst approximately six other officers were upon his premises conducting a search of his property in circumstances that were plainly involuntary. In my view, given the communication difficulties, I have little doubt that the applicant submitted to interview because the conduct of the ROI had the impression of being part of the involuntary search to which he was required to submit. He was plainly nonplussed by these events of which the ROI was merely a part.
74. [74]
    Further there was a failure to inform the applicant of the relevance of it to him as a suspect for identifiable offences and of his right to communicate with a friend or legal practitioner. Although it was appropriate for Mr Flynn to inform him of the right to consult a consular official, the suggestion of that right alone was not sufficient in my view given the nature of investigation being undertaken.
75. [75]
    Again, given the ROI was being conducted in the course of an entry of the applicant’s premises obtained by warrant with the force of nine people, the failure to inform him of those rights – that is the right to obtain legal assistance – would only have served to reinforce an expectation of general compliance by him, not only of the search, but also of any other activity apparently related to it such as the conduct of an interview during the course of the search in respect of matters associated with its purpose as announced by the police at the time of executing the warrant. The submission by the applicant to the interview without a full appreciation of his rights was further amplified by a series of questions and answers provided towards the end of the interview revealing a somewhat ambivalent appreciation of ‘free will’ by the applicant given his situation:

“Anthony:Okay. Have the answers you have given during this interview been made of your own free will?

Mr Li:Free will what’s that mean?

Interpreter:[Chinese][2:05:26] It means that the answers you have provided him today have been made by you voluntarily?

Mr Li:That’s correct.

Interpreter:Yes.

Anthony:Has any threat, promise of inducement been held out to you to give your answers?

Interpreter:Has he threatened you, or made some kind of promises to you, or offered you anything tempting? In order for you to answer his questions? Has he?

Mr Li:No.

Mr Li:No, no.^[34]

Interpreter:No.^[35]

Anthony:Do you agree the time now is 12.53pm?”

When considering those matters in totality, I am of the view that the conduct of the interview fell well below the standard to be expected of a fair interview between a senior investigator of a well-resourced Commonwealth agency and the applicant.

Conclusion

76. [76]
    I am of the view that the ROI is inherently unreliable for the reasons outlined earlier. I am also satisfied that it was procured unfairly. When considered collectively, I am of the view it should be excluded.

Objection 2 – Record of Interview 19 November 2015

77. [77]
    It is accepted that the discretion in relation to the second record of interview should be exercised consistently with that for the first for similar reasons because:

    1. (a)
       The applicant was not provided access to an interpreter on the second occasion despite him demonstrating his need for one the day before;
    2. (b)
       The caution again was not translated into Mandarin; and
    3. (c)
       Given the first interview is excluded, the second interview standing alone would be confusing and have a tendency to mislead a jury.
78. [78]
    I agree with those submissions and accordingly in the circumstances I am satisfied that as a matter of fairness the second interview should also be excluded.

Objection 3 – Selected paragraphs of Mark McKenzie’s statement

79. [79]
    The applicant seeks the exclusion of paras 108(b)(ii), (iii) & (v) and 110 of Mark McKenzie’s statement dated 8 December 2016. Relevantly those paragraphs provide as follows:

“108

2. (b)

…

2. (ii)
   a number of items were taken including his mobile telephone. At this point, Mr Li told me that ASIC had not taken the mobile telephone that he had used to communicate with people in China. Mr Li further explained that it was this mobile telephone that was used to communicate with people in China through a “cloud base” messaging service.

3. (iii)
   Mr Li asked me whether ASIC would be able to obtain recordings of his other communications. He used words to the effect “whether or not any of my ‘cloud base’ communications are recorded, like those played from CMC Markets?”. As I am not familiar with that type of stuff, I was not able to offer any opinion on it. Mr Li said that he was going to find out. Following this Mr Li and I had a general discussion about Australian brokers recording their client telephone conversations and that must be generally what happens in the industry;

…

5. (v)
   He had participated in an interview with ASIC. In particular Mr Li told me that :

1. A number of CMC market audio files have been played to him by ASIC;

2. He was shown three (think that was the number) pictures of men and asked how did he know them, which he answered he did not know them. I think Mr Li said the men in the pictures (or some of them) had the same surname as him and he explained to ASIC the surname “Li” is very common in China.

3. He was asked questions with respect to the lead up to the announcement;

4. He had told ASIC that he had done research into Pan Aust;

5. ASIC had all the records of his share trading history and that they discussed it and he told them that it was not unusual for him to conduct large share trades;

6. He had told ASIC that he had had two conversations with me with regards to purchasing Pan Aust. Of our conversations, he had ASIC:

• That he had explained to me the research he had undertaken with regards to Pan Aust;
• I had told Mr Li that I hadn’t purchased any Pan Aust shares in between our first conversation and when we spoke again;
• During our subsequent conversation he persuaded me to buy Pan Aust. In particular, he had told me that there was a finance person providing advice, information or research to his friend; and
• He had offered to assist in opening accounts with CMC Market.

…

110. After I provided the respective lawyers’ details, the name of which I cannot now recall, Mr Li said to me to the best of my recollection, words having the following effect:

‘I have made inquiries in China and there is no way that any of the cloud base conversations can be retrieved. Should we get another person to pass communications between us?’

I was shocked at this suggestion and responded ‘no’.

I was not interested in pursuing this conversation with Mr Li and, at this point I said to him:

‘I have been advised that we should not have any further communication with each other.’”

80. [80]
    The Crown relies upon this material as evidence of post-offence conduct demonstrating consciousness of guilt. It was submitted this conversation was had approximately two days after the execution of the search warrants and that during the execution of the search warrant, one of the defendants’ telephones was seized. It contained a WeChat message from Shuzhen which is being relied upon by the Crown as evidence of inside information. It was also submitted the matters discussed by the applicant and Mr McKenzie pertained to the execution of search warrants and interviews, and that the defendant appeared “shocked” at the event were similarly irrelevant. It was submitted that in this context, the defendant raised his concerns about ASIC obtaining evidence from his other phone upon the cloud based communications with persons in China (similarly to the evidence of CMC Market calls obtained by ASIC which the defendant was also discussing and which are alleged to be of an incriminating nature). It was submitted that statements by the applicant confirming that those cloud-based communications couldn’t be retrieved by ASIC and suggesting someone pass messages between he and Mr McKenzie were made with the apparent purpose of concealing their communications. It was submitted this forms part of the circumstantial evidence which together with all the other evidence is capable of supporting an inference of the defendant’s guilt.^[36]
81. [81]
    It was submitted that it is for the Court to determine whether evidence of post offence conduct, when taken in conjunction with any other material acts, facts and circumstances, is capable of constituting evidence of consciousness of guilt for the purposes of an issue.^[37] The applicant submitted that if an innocent explanation of post offence conduct is so inherently likely that a jury could not properly regard the conduct as evidence of guilt, or if the post offence conduct is intractably neutral, leave should not be granted for use of the conduct as evidence capable of demonstrating a consciousness of guilt.^[38]
82. [82]
    While I accept this is correct, as a matter of principle the determination of that matter is conflated with the substantive issue concerning the exercise of the discretion to admit the evidence on that point.
83. [83]
    Here the Crown submits that evidence together with all the other evidence in the case is capable of raising an inference the defendant was concerned ASIC would be able to retrieve cloud-based messages of his communication with persons in China, which would implicate him in the insider trading offences and in particular, in receiving and possessing inside information. If so, it was submitted the evidence was capable of being acted upon by a jury and it would be within the province of the jury to consider how much weight it be afforded and if so what significance it might have in any final determination of the charges. It was submitted that any concern of misuse could be addressed by the provision of appropriate directions in the jury charge.
84. [84]
    The applicant contends the evidence should be excluded principally on two grounds. First is the prejudicial effect of those paragraphs. It was submitted that the prejudicial effect outweighed its probative value and its admission would invite the jury to improperly speculate:

    1. (a)
       The applicant possessed a phone that contained some sort of unknown incriminating evidence when nothing that the applicant allegedly said to Mr McKenzie was any kind of admission of this fact, and further the application says nothing about the nature and content of his communications using this phone; and
    2. (b)
       By raising his use of the phone with Mr McKenzie the applicant has a consciousness of guilt that proves his guilt in relation to the commission of the offences with which he has been charged.
85. [85]
    Other background in this case relevant to these matters and beyond the things identified by the Crown include that the applicant was a businessman who, among other things, was engaged in importation of merchandise from China in respect of which no complaint is made and no basis exists for any suspicion that such trading was coloured by unlawfulness in any respect.
86. [86]
    In the present case it is open for a jury to conclude the evidence of the conversations alleged by Mr Mackenzie had an inculpatory effect evidencing a consciousness of guilt and thus of guilt itself; that is, if left unexplained. Here there is at least one explanation open on the evidence, namely concern that other communications for unrelated commercial purposes might be recorded.
87. [87]
    Against that background, it is submitted for the applicant that leaving this evidence to the jury would invite the jury to engage in impermissible speculation. The first sentence in [108] in (b)(ii) namely the statement: “A number of items were taken, including his mobile telephone” is plainly admissible as a relevant fact directed to the issue of communication. I do not think any issue can arise in respect of its admissibility. In relation to the balance I do not think the applicant’s concern that the jury might engage in impermissible speculation is well founded concerning admissions relied upon by the Crown related to the existence of another mobile phone, comments made concerning “cloud-based messaging services,” their recording, and the capacity of ASIC to obtain recordings of these other communications.
88. [88]
    Concerning impermissible speculation the applicant relies upon remarks in the judgment of the court in Lane v R^[39] in considering the question of inferences. It observed, at [109] that

“The answer to that question lies in the distinction, which is a very real one, between inference and speculation. In Seltsman Pty Ltd v McGuiness; James Hardy Pty Ltd v McGuinness, Spigleman CJ considered this very question. He acknowledged that it is often difficult to distinguish between permissible inference and conjecture. Quoting from Jones v Great Western Railways Co, his Honour adopted a definition of inference as “a deduction from the evidence” which, if reasonable, may have the validity of legal proof.

[110]. He referred also to Caswell v Powell Duffryn Associated Collieries quoting as follows:

“Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it sought to establish. In some cases the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.

Spigelman CJ stated the test as:

“...whether, on the basis of primary facts, it is reasonable to draw the inference.”

To similar effect were observations of Gibbs, Steven and Mason JJ in Barca v The Queen (1975) 133 CLR 82 at 104-105.”

89. [89]
    Here there are facts that point both ways. If that wasn’t the situation the applicant’s arguments would be on firmer ground. Ultimately however on this point the Crown case is circumstantial. As the President observed in R v Boscaino^[40], evidence of post-offending conduct relied upon to prove the guilt of an accused is circumstantial evidence. He continued,

“However, almost by definition, a case based upon circumstantial evidence is a case in which the prosecution seeks to prove guilt by proving multiple circumstances. For this reason, it has repeatedly been held that it is wrong for a fact finder to consider each piece of circumstantial evidence in isolation from all the rest of the circumstantial evidence; or, as the rubric has it, it is wrong to look at circumstantial evidence ‘piecemeal’.”

The President continued to note that the so-called evidence of “consciousness of guilt” is sometimes called evidence of an implied admission. To that end, adopting the works of A P Will he noted:

“…the behaviour of a person who fabricates evidence or lies to conceal facts “necessarily implies an admission of their truth, and a consciousness of their inculpatory effect, if uncontradicted or unexplained.”^[41]

90. [90]
    Here the evidence of the applicant’s statement to Mr Mackenzie could be evidence of consciousness of guilt. But an exculpatory answer is open. It does not invite speculation. However, the explanation is not one that is so inherently likely that a jury could not properly regard the conduct as evidence of guilt. Nor is it intractably neutral. The explanation is one when taken in conjunction with the circumstances and events identified is capable of demonstrating a consciousness of guilt and accordingly it should be left to the jury. ^[42] What the jury makes of the explanation is a matter for it. If at trial a risk arises of prejudicial use of that material, it would, on current indications, be capable of appropriate jury directions to neutralize such a risk.

Conclusion

91. [91]
    I am satisfied;

    1. (a)
       that the ROI obtained by ASIC officers from the applicant should be excluded as one which is unreliable and unfairly procured;
    2. (b)
       The ROI obtained by ASIC officers from the applicant should be excluded as one which is unreliable and unfairly procured.

and otherwise I dismiss the application. I order accordingly.