Buckley v Department of Fair Trading; Pym v Department of Fair Trading [2012] QDC 313

DISTRICT COURT OF QUEENSLAND CITATION: Buckley v Department of Fair Trading; Pym v Department of Fair Trading [2012] QDC 313 PARTIES: JAMES PATRICK BUCKLEY (Appellant) v DEPARTMENT OF FAIR TRADING (Respondent) GAENOR PYM (Appellant) v DEPARTMENT OF FAIR TRADING (Respondent) FILE NO/S: 3743/11 3744/11 PROCEEDING: Appeal ORIGINATING COURT: Magistrates Court, Brisbane DELIVERED ON: 12 October 2012 DELIVERED AT: Brisbane HEARING DATE: 8 October 2012 JUDGE: Dorney QC DCJ ORDERS: 1. The conviction and sentence of each appellant is set aside. 2. Each proceeding is sent back to the Magistrates Court at Brisbane. 3. It is directed that the further conduct of each proceeding be undertaken by a Magistrate different from the Magistrate who heard the proceedings which are the subject of these appeals. 4. All parties have leave to file, and serve, written submissions on costs by 4:00pm on 19 October 2012. CATCHWORDS: Appeal – application of onus of proof where potentially exculpatory reasons contained in documents tendered by defendants as “admissions” – different “understandings” of parties as to effect of tender – whether case should be -- 1 of 10 -- 2 returned to Magistrates Court for new trial Criminal Code (Qld) ss 23, 24, 644 Fair Trading Act 1989 (Qld) ss 48, 95, 96(1), 97 Justices Act 1886 (Qld) s 222 Douglass v The Queen [2012] HCA 34 Merrin v Commissioner of Police; Merrin & Anor v Commissioner of Police [2012] QCA 181 Murray v The Queen (2002) 211 CLR 193 Patel v The Queen [2012] HCA 29 Robert Bax & Associates v Cavenham Pty Ltd [2012] QCA 177 R v Coombes [2012] QCA 157 R v LRG [2006] VSCA 288 Teelow v Commissioner of Police [2009] QCA 84 COUNSEL: T Meehan, Solicitor, for each of the Appellants R Vize, Counsel, for the Respondent SOLICITORS: Bosscher Lawyers for each of the Appellants The Office of Fair Trading for the Respondent -- 2 of 10 -- 3 Introduction [1] Each of these appeals, which were heard together, involves a person who was a Director of the company, Global Building Supplies Pty Ltd (“GBS”), which was de- registered as a proprietary company on 13 December 2009, having originally been registered on 20 July 2005. [2] The events in question occurred between 17 January 2007 and 27 December 2008. They arose from GBS advertising for sale, employing the username “globalgbs”, kitchens and kitchen products on eBay (which is an online auction site). [3] The appeals are against convictions of each defendant, respectively, for 21 breaches of the then s 48 of the Fair Trading Act 1989 (Qld) (“FTA”). In particular, the breaches were, pursuant to s 48(b), of a provision that stated that a person shall not, in trade or commerce, accept payment or other consideration for goods or services where, at the time of the acceptance, there are reasonable grounds, of which the person is aware, or ought reasonably to be aware, for believing that the person will not be able to supply the goods or services within the period specified by the person or, if no period is specified, within a reasonable time. The then s 96(1) of the FTA – relied on by the learned Magistrate in her Reasons - stated that, if a body corporate commits an offence, each director is taken to have committed the offence and is liable to be punished accordingly. There is no ground of appeal which concerns this derivative liability (although it is expressed as “vicarious liability”). See, also, s 95 [particularly s 95(2)(a)] concerning primary liability. But of great concern is that s 97 was not raised by the appellants (as defendants) where the gist of their present arguments seems to be the subject of s 97(1)(b) or, possibly s 97(1)(c)(i), at least. It is important that s 97(5) expressly excludes ss 23 and 24 of the Criminal Code (Qld). If so, then, since s 97(1) places the onus on the defendant for such defences, reliance on “hearsay”, even if rendered admissible by waiver, may severely undermine the efficacy of such a “defence”. While the appellants at trial carefully avoided any reliance on s 97, though the prosecution did fleetingly refer the learned Magistrate to it during addresses – and it applies regardless of express reliance - given the stress placed on the prosecution’s onus by the appellants, it may well be that the weight to be given to the “hearsay” should be, at least, slight, simply because of the substance of s 97. Yet these concerns were not brought to the learned Magistrate’s attention, or mine. Her approach, much criticised by the appellants, appears to reflect an application, unexpressed, of the s 97 approach to such evidence, especially by her use of the word “excuse”, though her actual words are to the contrary: see [9] below. [4] The sentences that were imposed, which were the subject of a grant of leave by the Court to amend so as to correct both Notices of Appeal filed 26 September 2011, were, for Mr Buckley, a $40,000.00 fine, a recording of a conviction and an order for restitution in the sum of $98,000.00 and, for Ms Pym, a fine of $10,000.00, no recording of a conviction and a conjoint order for restitution in the sum of $98,000.00. Background [5] Since both appeals are against conviction and since the grounds of appeal are identical, particularly where the trials were conducted together and the learned -- 3 of 10 -- 4 Magistrate gave one series of reasons, it is appropriate in this appeal to deal with both matters together. Limited scope of appeal [6] The grounds of both appeals are: that the learned Magistrate misdirected herself as to the onus of proof; and that the learned Magistrate erred by rejecting the uncontested, unchallenged and admitted evidence contained in emails under the hand of both appellants. [7] It was not put in contest on appeal that the learned Magistrate did not correctly state that the burden of proof lay with the respondent or that the learned Magistrate did not correctly hold that the standard of proof was beyond reasonable doubt. [8] The true centre of the appeal was that the learned Magistrate did not, when considering the evidence, actually apply the burden of proof to the requisite standard. In particular, it was submitted that the learned Magistrate did not properly consider whether the respondent had proved, beyond reasonable doubt, that GBS (through the appellants) accepted payment where, at the time of acceptance, there were “reasonable grounds”, of which GBS was aware, or ought reasonably to have been aware, for “believing” that it would “not be able to supply the goods” within a reasonable time. [9] Each appellant is content to accept that the statement by the learned Magistrate, that, since the “grounds” were raised on the evidence “through admission” the prosecutor had to “negative any excuse raised”, is correct. For the reasons analysed in [3] above, that bold proposition may be doubted. “Evidence” through “admission”? [10] The nature of the “admissions” made by each appellant, particularly in the document tendered as Exhibit 41, provided the basis of both appellants’ main argument. [11] As a survey of the evidence reveals, at the beginning of the third day, the prosecution informed the Magistrates Court that it had come to an agreement with the appellants (then defendants) about what would be “admitted by” the defendants. Exhibit 41 was then tendered without any statement relating to the factual admissions or documents referred to in that Exhibit, either by way of qualification, explanation or waiver of any rights to object as to admissibility. [12] Central to the appellants’ arguments here were the 51 emails sent by GBS, through its representatives, the appellants. [13] During oral argument, counsel for the respondent stated that the content of those emails were not accepted by his client as being “true” because they were only admitted for the limited purposes that they were, respectively: sent; sent by the appellants, as representatives of GBS; and were so sent to various contracting purchasers. This accords with the respondent’s original Outline of Argument: at [8]. -- 4 of 10 -- 5 [14] Contrastingly, the appellants viewed Exhibit 41, and particularly the emails, as being admitted not only as original documents but for the assertions of testimonial fact contained in those documents. [15] Before considering this issue further, it was necessary to look at the legal position where documents have been tendered in, arguably, similar circumstances. [16] Very recently, the Queensland Court of Appeal, in Robert Bax & Associates v Cavenham Pty Ltd1, extensively canvassed this area. Muir JA, with whom Holmes JA and Martin J agreed, surveyed the many cases which deal with documents tendered which contained hearsay. Relevantly, particularly to criminal proceedings, Muir JA considered R v LRG2where Callaway JA, with whose reasons other members of the Court agreed - in considering an argument that a failure to have the complainant verify in Court the content of statements made by her in a police interview constituted a miscarriage of justice - held that the tapes of the interview, having been introduced into evidence by a police witness, were hearsay if the statutory conditions were not satisfied: at [13] in R v LRG and [45] in Cavenham. Nevertheless, such reception was held to be an ordinary incident of a trial regularly conducted and, therefore, if relevant it might be given such probative value as the Court thought it was worth: at [43]. [17] Later, Muir JA noted that, in Queensland, the practice has been that, where a party wishes to confine the evidentiary use which may be made of a document which is admissible for a limited purpose, counsel for that party states that there is no objection to the document being admitted for that purpose or objects to the document being admitted for any other purpose: at [46]. Importantly for present purposes, he then observed that, plainly, the party’s inability to know what evidence was admissible or inadmissible before the close of its case would substantially impede the efficient and due conduct of the case and, to the extent that the consequences of a failure to object are determined by the operation of the doctrine of waiver, the effect of the practice in Queensland is that, generally speaking at least, the party who fails to object to inadmissible hearsay evidence contained in a document which is admissible as original evidence “will have waived its right to limit the use to which the evidence may be put”: also at [46]. In the case in question, it was held that the failure to object to the admissibility of the letter for any purpose other than the limited purpose sought to be identified “resulted in the letter becoming evidence for all purposes” (emphasis added): at [48]. The circumstances of Cavenham were that the letter had been put in evidence as part of an agreed bundle of documents tendered by consent after the plaintiff had opened its case but prior to any evidence being called, with no restrictions being placed by either party on the use to which the evidence could be put: at [49]. [18] The consequence of the application of the principles just discussed could mean that Exhibit 41 as a whole (therefore including the contents of the emails in question) was made admissible for all purposes. That, of course, would not have the consequence that evidence might not be led by the prosecuting authority which went to contradict the testimonial aspects of the emails as sent. In the analogous position, it would be similar to exculpatory statements made in a record of interview in any criminal case. But the evidence here is that it was an “admission”, by the defendants 1 [2012] QCA 177. 2 [2006] VSCA 288. -- 5 of 10 -- 6 alone (see the introductory words in Exhibit 41, plus the statement by Mr Meehan at the time), apparently pursuant to s 644 of the Criminal Code. Since s 644 can authorise prosecution “admissions” as well, the fact that this aspect was not used gives more weight to the respondent’s submissions to how the evidence, particularly in the emails, ought to have been used. With respect to s 644, R v Coombes3 held that “inadmissible hearsay” was not a proper use of this provision: at [53]. It may well be that this aspect of the cases needs a thorough reconsideration in any future trial. [19] Given the contrary “intention” of each party – as discussed earlier – it raises questions of the kind postulated by Muir JA in Cavenham about each party’s approach to how the evidence ought to have been accepted by the Court. [20] Even if it was possible to resolve these appeals on the basis that the respondent to the appeals is bound by the conduct it adopted before the learned Magistrate – and even if that is clear given the above discussion – there is a further troubling issue in these appeals that must be considered. It is one that appears to have a distinct connection with the different approaches revealed in the submissions to this Court on appeal regarding the probative effect of the 51 emails. Onus of proof [21] Both parties on appeal accept that the onus (of establishing that there were reasonable grounds for believing – based on actual or constructive awareness of the directors - that GBS would not be able to supply the goods within a specified period) was on the prosecuting authority. [22] The learned Magistrate, in her reasons, stated that there was “no independent evidence” which supported “the truth” of the contents of the 51 emails. Furthermore, she stated that, with respect to the evidence led Mr Shaw that Mr Buckley had advised him in about October 2008 that delays in shipments from China “did not assist” him, there was “simply no independent evidence to support” this assertion by Mr Buckley. Incidentally, this also raises, again, the question of hearsay not objected to. [23] The difficulty that that approach causes was addressed by the High Court in Murray v The Queen4. As formulated by Gaudron J, it is expressed as follows: although the trial Judge, in the early part of her directions, correctly instructed the jury with respect to the onus of proof, in passages later in her directions, she posed the erroneous question for the jury’s determination with respect to murder “as the question whether it accepted the prosecution’s or the appellant’s version of events”: at 271 [23]. As she then went on to hold, that was a central, or critical, direction in her Honour’s summing up and, as the issue for the jury “was not whether it should accept the appellant’s version but whether the prosecution had negatived it as a reasonable possibility, that direction mis-stated the issue for determination in a way that relieved the prosecution of proving its case beyond reasonable doubt”: at 201- 202 [23]. In the joint judgment of Gummow and Hayne JJ, it was held that the references that she made to the jury concerning “accepting the accused’s evidence or version of events” were apt to mislead the jury about the decision they have to 3 [2012] QCA 157. 4 (2002) 211 CLR 193. -- 6 of 10 -- 7 make, because the choice for the jury was not to prefer one version of events over another but rather whether the prosecution had proved the relevant elements of the offence beyond reasonable doubt: at 213 [57]. As they went on to further hold, this required no comparison between alternatives other than being persuaded and not being persuaded beyond reasonable doubt of the guilt of the appellant: at 213 [57]. As recently reinforced by the High Court in Douglass v The Queen5, referring to Murray, the resolution of a criminal trial depends upon whether the evidence taken as a whole proves the elements beyond reasonable doubt and not upon whether the evidence of one witness is preferred to that of another: at [12]. In the case in question, the joint judgment held that, even if the judge was not persuaded by the appellant’s evidence, he could not convict “unless satisfied that it was not reasonably possibly true”: at [13]. [24] Despite submissions by the respondent that the context in which the learned Magistrate made the statements so canvassed showed that she was fully aware of her earlier, correct statement of the proper approach to take, I remain in considerable doubt as to whether that is so. A complete reading of the reasons given by the learned Magistrate does not convince me that she fully appreciated the principle enunciated in Murray. I also conclude that the parties did not help her in reaching that appreciation. At the end of a consideration of the evidence, it seems clear that her analysis of the evidence in terms of the onus did not comply with the requirement stated above concerning reasonable possibilities for the requisite belief of an ability to supply, even apart from the non-consideration of the application of s 97 of the FTA. Re-evaluation of evidence [25] Recently, in Merrin v Commissioner of Police; Merrin & Anor v Commissioner of Police6 the Court of Appeal reiterated the principle outlined earlier in Teelow v Commissioner of Police7 to the effect that it is a characteristic of a s 222 Justices Act 1886 (Qld) appeal “by way of a rehearing” that the appellate court, subject to its powers to admit fresh evidence, “rehears” the matter on the record of the court from which the appeal comes: at [10], quoting from Teelow at [3]. [26] In Merrin it was held there that his Honour, correctly, thoroughly summarised the evidence given by the witnesses, and then turned to a consideration and an analysis of the decision of the Magistrate (including the Magistrate’s findings, the conclusions upon each of the charges, the way in which the Magistrate dealt with “auxiliary submissions” and the Magistrate’s decision on sentence): at [12]. [27] But the ability of an appeal court to carry out such functions depends on the extent of assistance that is given both from the submissions to, and the reasons of, the learned Magistrate and from the written and oral submissions made on appeal. [28] In this particular set of appeals, I have discerned a great difficulty in meeting those appellate obligations. [29] As already discussed, the nub of the appellants’ argument was simply that the Magistrate fell into error in her approach to the discharge of the onus placed on the 5 [2012] HCA 34. 6 [2012] QCA 181. 7 [2009] QCA 84. -- 7 of 10 -- 8 prosecuting authority. Quite unfortunately, it does not in any way assist as to how the court, appraised of the correct way to approach the evidence, particularly that contained in the emails, should deal with all relevant issues in the rehearing. [30] If, for instance, I should follow the approach that the emails contained hearsay material which, since not objected to, should be given such a probative value as the court thinks it is worth (even apart from s 97 of the FTA), it would still be necessary to judge to what extent each separate email impinged upon each of the 21 offences that are still the subject of the proceedings (being Charges 2 to 22 inclusive). Not every one of those charges has either a related email (though most did) or were associated with an email that was not the subject of any investigation as to its possible truth. [31] But even more concerning is that each offence in question had at its base the “acceptance” of payment. This is because the ascertainment, or not, of reasonable grounds has to be determined “at the time of acceptance”. From Exhibit 41 it would appear that the first acceptance (if that can be equated with the “receipt” of money) was on 9 May 2007. Even with respect to that charge (being Charge 2) there were further payments in September and October of 2007. The last of the “receipts”, at least as demonstrated by Exhibit 41, was on 18 September 2008 (which was the second sum received with respect to Charge 22). [32] There is nothing in any of the submissions made to me which analyses the relevant evidence, especially that with respect to the emails, in terms of the relevant dates of acceptance, although it is conceded that for some charges an attempt has been made to match up some of the expressed “reasons” of GBS relevant to the timing of acceptance. But even in such instances, it has been assumed by the respondent that all reasons proffered in the relevant emails should either have been given no weight at all or have been demonstrated by other evidence as being “not reasonably possibly true”. No attempt has been made, particularly by the respondent, to gather all relevant evidence with respect to each relevant charge and articulate the way in which it is now open to this Court to determine each of the 21 charges in accordance with the relevant authorities, particularly those concerning the onus, or more than one, of proof. [33] In general terms, for instance, it appears to me to be open to conclude that the prosecution onus may not have been discharged for some of the early charges, particularly where there had been an importation, through Customs, in early March 2007 of kitchen products with a value stated to the Australian Customs and Border Protection Service to be $28,693.38, with the stated country of origin being China. There appears to have been no proof which would undermine the inference, consistent with innocence, that those products might be available for some “supply”. A further difficulty arises from the late amendment by the prosecuting authority in both original proceedings to change the wording of the charges such that they stated that there was a “period specified by the person”. This was in contrast to the charge reading that the supply be “within a reasonable time”. As analysed by the learned Magistrate, she accepted that the term of the agreement which purported to deal with delivery did specify a period, though one of some elasticity (i.e. “approximately 8 to 12 weeks”) (emphasis added). Although the grounds for appeal did not deal with this issue, the appellants’ revised Outline did contend that the learned Magistrate erred in finding “as a matter of fact” that the “delivery time” was “approximately” that flexible period “from the payment of the -- 8 of 10 -- 9 deposit”. The submission then stated that, in so finding, the learned Magistrate impermissibly disregarded the rider referrable to there being “no guarantee of delivery time” and not being “held liable for any delays arising out of any act, situation or circumstances outside of its control in the normal course of business”. But the learned Magistrate of course did refer to that rider, and very specifically. The appellants’ outline submits that when the emails are properly dealt with, the issue of the delivery time “is also clarified”, contending that the “reasons” come within the terms used in that limitation of liability. [34] It is difficult to discern whether the attack of the appellants is on the charges, as amended, or simply addresses the issue of the misuse, particularly with respect to discharge of the onus, of the emails. While it seems to be the latter, it merely illustrates yet again the effect of both sets of submissions being so unfocused and lacking in assistance that they disable any rehearing occurring. In the end, I am just unable to effectively address each and every one of the 21 charges brought, because there is no organised way in which the evidence has been arranged such that, even if I conclude what is, in the circumstances of the trial as conducted, the correct way to address the nature of the evidence contained in the emails, and apply the onus of proof as instructed by Murray, and also s 97 of the FTA, I can undertake effectively a re-evaluation of each of the 21 charges in total. [35] What, in essence, has occurred is that each of the parties to the appeal have made the fateful assumption that all that party’s arguments would not only be accepted but that such acceptance would inevitably lead either to a complete overturning of the convictions, or to a complete vindication of them. That is not the circumstance that I face. In truth, the “record” provided to this Court does not, anywhere, contain the complaint of even one of the 21 surviving Charges, much less any particulars (e.g. directed to what are the “reasonable grounds” for the relevant “belief”). As Patel v The Queen8 stresses, their importance lies not only in relation to questions of inadmissibility for relevance, but also to forensic judgments by the defence, cross- examination of prosecution witnesses and the marshalling and deployment of the prosecution’s evidence. Additionally, as here – and there – their absence can make the court itself unsure “of the case being run”: at [168], per Heydon J. Resolution [36] Although initially attracted - as I expressed in oral argument - to the view that this Court would be in as good a position as the Magistrates Court to determine the appeals, particularly in the absence of the need to consider prior findings of credibility – because there was no challenge to any findings that were made, in circumstances where the defendants elected not to give or call evidence – I am now of the view that the combination of the very different approaches to Exhibit 41, the conclusion that the learned Magistrate did not apply the correct test regarding the only onus argued as relevant, and that it is otherwise an impossible task for me to work out what result should now obtain because of the diffuse and unhelpful submissions made both to the learned Magistrate and to me, means that the only course sensibly open to me is to return the matter to the Magistrates Court. 8 [2012] HCA 29. -- 9 of 10 -- 10 [37] Because of the circumstances in which these appeals arose, it is also my view that the proceedings ought to be heard, at first instance, by a Magistrate different from the one who originally heard them. Orders [38] Consequently, the orders I intend to make are that: the conviction of each appellant on each of the 21 charges is set aside; each proceeding is sent back to the Magistrates Court at Brisbane for a new trial; and it is directed that the further conduct of the proceedings be undertaken by a Magistrate different from the Magistrate who heard the proceedings which are the subject of these appeals. Costs [39] Because I am of the view that neither side was of any significant assistance to the learned Magistrate in addressing the proper approach both to how Exhibit 41 should be taken as evidence, either as original, or testimonial, or both, and with respect to how the onus could be discharged on the evidence which was led, and in addressing how I should undertake my own independent evaluation, I am inclined to make no order as to costs. Nevertheless, I will allow both parties seven days in which to file, and serve, written submissions as to costs. -- 10 of 10 --