Court of Criminal Appeal Supreme Court New South Wales Medium Neutral Citation: Fysh v R [2013] NSWCCA 284 Hearing dates: 17 July 2013 Decision date: 20 November 2013 Before: Bathurst CJ at [1] Hoeben CJ at CL at [2] Schmidt J at [216] Decision: 1. Leave to appeal granted. 2. Appeal allowed. 3. The conviction on the counts, the subject of the appeal, be quashed and a verdict of acquittal entered. Catchwords: CRIMINAL LAW - conviction appeal - two counts of insider trading - whether verdicts unreasonable having regard to the evidence - whether the Crown proved applicant possessed each item of information alleged - whether Crown proved that the information possessed by the applicant was material - limitations in Crown's expert evidence - failure by Crown to establish beyond reasonable doubt that important information possessed by applicant on relevant date - whether information not proved by Crown "made no real difference" - factual basis for Crown case not made out - conviction quashed and verdict of acquittal entered. Legislation Cited: Corporations Act 2001 (Cth) - ss 1043A(1)(c) and 1311(1) Criminal Appeal Act 1912 - s6(1) Cases Cited: Libke v R [2007] HCA 30; 230 CLR 559 SKA v The Queen [2011] HCA 13; 243 CLR 400 Category: Principal judgment Parties: Stuart Alfred Fysh - Applicant Regina (Cth) - Respondent Crown Representation: Counsel: Mr B Walker SC/Mr I Pike SC - Applicant Mr D Staehli SC - Respondent Crown Solicitors: Gilbert & Tobin - Applicant Commonwealth Director of Public Prosecutions - Respondent Crown File Number(s): 2011/15688 Decision under appeal Before: McCallum J File Number(s): 2011/15688 Judgment 1BATHURST CJ: I agree with Hoeben CJ at CL. 2HOEBEN CJ at CL: Trial and sentence The applicant for leave to appeal stood trial between 15 October 2012 and 14 November 2012 before McCallum J and a jury with respect to four counts of insider trading under ss 1043A(1)(c) and 1311(1) of the Corporations Act 2001 (Cth). On 14 November 2012 the jury returned verdicts of not guilty on the first two counts and guilty with respect to the third and fourth counts. 3Counts 3 and 4 alleged that in early December 2007, while in possession of inside information which was not generally available concerning Queensland Gas Company Ltd (QGC), the applicant purchased shares in QGC in the amount of 240,000 and 10,000 respectively. 4On 19 December 2012 the applicant was sentenced to 2 years imprisonment with respect to count 3, to commence on 11 December 2012 and expire on 10 December 2014. On count 4 the applicant was sentenced to 18 months imprisonment, to commence on 11 December 2012 and expire on 10 June 2014. Her Honour ordered that the applicant was to be released on recognisance after serving 12 months of imprisonment. 5The applicant sought leave to appeal from his conviction on the following grounds: Ground 1: The verdicts were unreasonable or could not be supported having regard to the evidence, because it was not open to the jury to be satisfied that at the time that he purchased the QGC shares, item (f) of the information in MFI 4 was possessed by Mr Fysh. Ground 2: The verdicts were unreasonable or could not be supported having regard to the evidence, because it was not open to the jury to be satisfied that at the time that he purchased the QGC shares, Mr Fysh possessed the substance of the information in MFI 4 taken as a whole or in combination, in that he did not possess the information in item (f) of MFI 4. Ground 3: The verdicts were unreasonable or could not be supported having regard to the evidence, because it was not open to the jury to be satisfied that the information in MFI 4 was material in the sense that if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares. 6The application for leave to appeal and the appeal were heard by this Court on 17 July 2013. At the conclusion of the appeal, the Court made the following orders: 1. Leave to appeal granted. 2. Appeal allowed. 3. The conviction on the counts, the subject of the appeal, be quashed and a verdict of acquittal entered. 7The Court advised that it would provide reasons at a later date. These are the reasons. Evidence at trial, the Crown and defence case 8Count 3 was in the following terms: "3 Between about 2 December 2007 and 7 December 2007 at Sydney in the State of New South Wales and elsewhere Stuart Alfred Fysh acquired relevant Division 3 financial products, namely 240,000 shares in Queensland Gas Company Ltd, whilst in possession of inside information concerning Queensland Gas Company Ltd which was not generally available, being information which if it was generally available a reasonable person would expect it to have a material effect on the price or value of shares in Queensland Gas Company Ltd and being information which the defendant knew, or ought reasonably to have known: (i) Was not generally available, and (ii) If it were generally available, a reasonable person would expect it to have a material effect on the price or value of shares in Queensland Gas Company Ltd contrary to sections 1043A(1)(c) and 1311(1) of the Corporations Act 2001 (Cth)." 9Count 4 was in the following terms: "4 Between about 3 December 2007 and 8 December 2007 at Sydney in the State of New South Wales and elsewhere Stuart Alfred Fysh acquired relevant Division 3 financial products, namely 10,000 shares in Queensland Gas Company Ltd, whilst in possession of inside information concerning Queensland Gas Company Ltd which was not generally available, being information which if it was generally available a reasonable person would expect it to have a material effect on the price or value of shares in Queensland Gas Company Ltd and being information which the defendant knew, or ought reasonably to have known: (i) Was not generally available, and (ii) If it were generally available, a reasonable person would expect it to have a material effect on the price or value of shares in Queensland Gas Company Ltd contrary to sections 1043A(1)(c) and 1311(1) of the Corporations Act 2001 (Cth)." 10The relevant legislative provisions are as follows: "1042A Definitions In this Division: ... Division 3 Financial Products means: (a) Securities; Generally available, in relation to information, has the meaning given by section 1042C. Information includes: (a) Matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; and (b) Matters relating to the intentions, or likely intentions, of a person. Inside information means information in relation to which the following paragraphs are satisfied: (a) The information is not generally available; (b) If the information were generally available, a reasonable person would expect it to have a material effect on the price or value of particular Division 3 financial products. A material effect, in relation to a reasonable person's expectations of the effect of information on the price or value of Division 3 financial products, has the meaning given by section 1042D ... Relevant Division 3 financial products, in relation to particular inside information, means the Division 3 financial products referred to in paragraph (b) of the definition of inside information. 1042B Application of Division This Division applies to: (a) Acts and omissions within this jurisdiction in relation to Division 3 financial products (regardless of where the issuer of the products is formed, resides or located and of where the issuer carries on business); and (b) Acts and omissions outside this jurisdiction (and whether in Australia or not) in relation to Division 3 financial products issued by: (i) A person who carries on business in this jurisdiction; or (ii) A body corporate that is formed in this jurisdiction; 1042C When information is generally available (1) For the purposes of this Division, information is generally available if: (a) It consists of readily observable matter; or (b) Both of the following sub-paragraphs apply: (i) It has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information; and (ii) Since it was made known, a reasonable period for it to be disseminated among such persons has elapsed; or (c) It consists of deductions, conclusions or inferences made or drawn from either or both of the following: (i) The information referred to in paragraph (1); (ii) Information made known as mentioned in sub-paragraph (b)(i). (2) None of the paragraphs of subsection (1) limits the generality of any of the other paragraphs of that subsection. 1042D When a reasonable person would take information to have a material effect on price or value of Division 3 financial products For the purposes of this Division, a reasonable person would be taken to expect information to have a material effect on the price or value of particular Division 3 financial products if (and only if) the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of the first mentioned financial products. ... Subdivision B - the prohibited conduct 1043A Prohibited conduct by a person in possession of inside information (1) Subject to this Subdivision if: (a) A person (the insider) possesses inside information; and (b) The insider knows, or ought reasonably to know that the matters specified in paragraphs (a) and (b) of the definition of inside information in section 1042A are satisfied in relation to the information; the insider must not (whether as principal or agent): (c) Apply for, acquire, or dispose of, relevant Division 3 financial products or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products; or (d) ... Note 1: Failure to comply with subsection is an offence (see subsection 1311(1)). For defences to a prosecution based on this subsection see section 1043M. Note 2: This subsection is also a civil penalty provision (see section 137E). For relief from liability to a civil penalty relating to this subsection, see sections 1043N and 1317S. (2) ... (3) For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1) or (2): (a) Paragraph (1)(a) is a physical element, the fault element for which is as specified in paragraph (1)(b); and (b) Paragraph (2)(a) is a physical element, the fault element for which is as specified in paragraph (2)(b). General Penalty Provisions 1311(1) A person who: (a) Does an act or thing that the person is forbidden to do by or under a provision of this Act; or (b) Does not do an act or thing that the person is required or directed to do by or under a provision of this Act; or (c) Otherwise contravenes a provision of this Act; is guilty of an offence by virtue of this subsection, unless that other provision of this Act provides that the person: (d) Is guilty of an offence; or (e) Is not guilty of an offence. Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. 11MFI 4, to which reference was made in the Grounds of Appeal, was in the following form: "Counts 3 and 4 - QGC PARTICULARS OF INFORMATION Purchase of shares in QGC between 2 and 8 December 2007. The Information (a) The Team had identified using CSG to produce LNG as a potentially economically viable means of providing BG Group with a source of LNG in the Asia Pacific region. (b) The Team identified four companies, Origin Energy Ltd (Origin), Santos Ltd (Santos), QGC and Arrow as holding over 90 percent of the CSG resources in Eastern Australia and had clearly linked an entry position for BG Group into Eastern Australia to an M & A, a "farm-in" or "partnering" with one of these four. (c) BG Group's Portfolio Development Committee had, in September 2007, approved funding for the Team to pursue its strategic plan to deliver a material CSG entry for BG Group into Eastern Australia within the next 12 months. (d) BG Group had commissioned Advanced Resources International (ARI) to assess the size and quality of CSG resources in Eastern Australia. ARI's assessment was that Eastern Australia had two world class CSG plays which were comparable to the United States San Juan Basin CBM (Coal Bed Methane, another name for CSG), namely the areas of the Undulla Nose/Walloon Fairway in the Surat Basin and Comet Ridge in the Bowen Basin. (e) The Team's assessment of the estimated ultimate recovery (EUR) of the holdings of Origin, Santos, QGC and Arrow in the Walloon Fairway and Comet Ridge areas was 28.2 trillion cubic feet (tcf) for Origin, 13.6 tcf for QGC, 10.2 tcf for Santos and 6.9 tcf for Arrow. Arrow's holdings were of significantly inferior quality to that of QGC. (f) The Team had prepared evaluations of QGC and Arrow in which the Net Asset Valuation (NAV) of QGC was more than 2 ½ times its then current share price on the ASX while the NAV for Arrow was about half its then current share price on the ASX. (g) The head of the Team, David Maxwell, had concluded that the successful companies in Queensland involved in CSG were those with acreage that had unlocked the science of converting CSG to LNG for that acreage and that Arrow appeared to be the poorest in that regard. (h) Mr Maxwell had been working on a "Queensland opportunity" and from 2 December 2007 would be travelling to Australia and for the following two weeks would be locked into leading (and capturing) the Queensland opportunity involving an M & A, farm-in or strategic alliance. (i) It was reasonable to conclude that the "Queensland opportunity" was in respect of such a proposed relationship between BG Group and QGC." 12Much of the relevant law and facts were not in dispute at the hearing. In relation to the law, it was not in dispute that the Crown was required to prove beyond reasonable doubt four elements of the offence being relevantly for Count 3 (and applied in equivalent terms for Count 4, save for the dates and quantum of shares acquired). 1. Has the Crown established beyond reasonable doubt that, between 2 and 7 December 2007, the accused acquired 240,000 shares in Queensland Gas Company Ltd. 2. If so, has the Crown established beyond reasonable doubt that the accused did so intentionally. 3. Has the Crown established beyond reasonable doubt that, at the time he acquired the shares, the accused possessed inside information. 4. Has the Crown established beyond reasonable doubt that the accused knew or ought reasonably to have known that: (i) The information was not "generally available"; and (ii) If the information were generally available, a reasonable person would expect it to have a "material effect" on the price or value of shares in QGC? 13The applicant and the Crown agreed upon a large number of the relevant facts which were set out in the Joint Statement of Agreed Facts, which was provided to the jury (Exhibit A). For example, it was not in dispute that the applicant had bought the shares at the times alleged. The applicant's defence focused on whether he possessed all of the information alleged in MFI 4 and whether the information that he did possess at the time of purchasing the QGC shares was "material" in the relevant sense so as to be "inside information". 14Two of the critical issues at the hearing were: (a) Whether the applicant was required to possess each and every item of the information set out in MFI 4 and whether the Crown had proved the necessary possession; and (b) Whether the Crown had proved that the information possessed by the applicant was material in the sense that if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of the QGC shares. 15In relation to the first of these issues, her Honour determined that the Crown was required to prove that the applicant possessed the body of information, that is, all of the information set out in MFI 4, taken in combination. As her Honour directed the jury, the test was whether the applicant possessed the substance of that information taken as a whole, or in combination, except any part of the information that the jury considered made no real difference. 16No complaint was made by either side in relation to her Honour's determination in this regard or the directions given to the jury by her Honour. The applicant's complaint was that the jury could not have been satisfied that he did possess the body of information set out in MFI 4 because they could not have been satisfied as to his possession of Item (f), which was an important part of the information. Agreed Facts 17Exhibit A was a Statement of Agreed Facts. In order to understand the applicant's submission, it is necessary to understand the factual background and what issues were in dispute. The following facts formed part of Exhibit A and were agreed. 18The applicant held a Bachelor of Science and a PhD in physics from Monash University. He was employed by BHP in various capacities after leaving university and rose to the position of Commercial Manager Asia (CMA). In 1998 he joined the BG Group and was responsible for business development in Asia generally. He was a member of the Group Executive Committee of BG ("the GEC") which was the senior management group within BG. 19BG was a large international energy company with a particular focus on gas, including liquefied natural gas (LNG). Its head office was in the United Kingdom at Thames Valley Park, Reading and it was listed on both the London Stock Exchange and the US Over-the-Counter Market. It was one of the top ten listed UK companies and for the year ending 31 December 2007 had a total revenue of over 8.3 billion pounds, a total operating profit of over 3.2 billion pounds and a market capitalisation of approximately 35 billion pounds. BG had business operations in 27 countries over five continents. 20The GEC was responsible for the overall general management of BG's business and reported to the Board. In 2007 Sir Frank Chapman was the Chief Executive and Executive Director of BG. The GEC delegated functions to the Portfolio Development Committee and the Investment Committee. It approved major investments up to a certain value. Projects above that value had to be approved by BG's Board. A new business opportunity in BG became designated as a "Project" and had a project name allocated only once it reached the stage where BG had decided to actively pursue it. Projects that needed to be kept confidential were given a coded project name. 21For some years before 2006, it had been a goal of BG to enter the LNG business in the Asia Pacific region. In 2006 BG established an Asia Pacific LNG business development team (the Team) based in Singapore. David Maxwell (Mr Maxwell) was appointed to head the Team, which included two senior managers, Gary Thompson and Jim Seaton, each of whom had the title Vice President - Business Development. They both reported to Mr Maxwell. 22In about mid 2007, the Team identified an emerging opinion within the market that coal seam gas (CSG) also known as Coal Bed Methane (CBM) and Coal Seam Methane (CSM) may be able to be used to produce LNG, although what was involved in the process was not completely understood within BG at that time. Mr Maxwell proposed that using CSG as feedstock for the production of LNG should be investigated further. 23From its review of publicly available information, the Team identified Eastern Australia as a possible source of CSG, with four companies holding the majority of CSG resources - Arrow Energy NL (Arrow), Queensland Gas Company Ltd (QGC), Santos Ltd (Santos) and Origin Energy Ltd (Origin). 24On 12 June 2007 BG held its annual strategic review at which Mr Maxwell gave a presentation which identified CSG to LNG as one of a number of ideas that could deliver BG an Asia Pacific source of supply of LNG. The applicant attended that presentation. 25From 1997 the applicant operated an account with Goldman Sachs JB Were (GSJBW) stockbroking in Melbourne, through which he traded securities on the Australian Securities Exchange (ASX). Between 1997 and 2007 the applicant built up a portfolio of industrial and resources stocks listed on the ASX that he traded regularly through GSJBW. Without setting out the various trades in detail, it would be fair to say that the applicant's share trading was substantial with large sums of money involved. His share trading during 2006 is illustrative. In January 2006 he held 1,100,000 shares in TYC worth $968,000. In May 2006 he held 400,000 in MCR worth $336,000 and 600,000 shares in INP worth $192,000. In May 2006 he sold his entire holding in TYC. In the same month, he purchased 500,000 shares in Elk Petroleum, an Australian oil company at a total purchase price of $325,000. He sold out of Elk in July and August 2006 with a loss of around $140,000. In September 2006 he sold his holdings in MCR for a total sum of $713,790 and purchased an additional 708,145 shares in INP at a cost of around of $493,000. Throughout 2007 the applicant gradually purchased an additional 2,591,855 shares in INP investing a further $1,250,121. 26On 14 June 2007 the applicant instructed GSJBW to purchase 100,000 Arrow shares at up to $2.85 per share. 100,000 Arrow shares were transferred to the applicant on 19 October 2007. On 18 June 2007 the applicant placed an order to buy a further 150,000 Arrow shares. This trade was completed on 21 June 2007. 27On or about 1 August 2007 Mr Maxwell spoke to the applicant by telephone about how to get BG interested in business development opportunities. After the meeting, Mr Maxwell sent the applicant an email attaching a Macquarie report on the Gladstone LNG facility and referring to "the big four (Santos, Origin, QGC and Arrow)" and noted that they held "90 percent of the 2P of 5178PJ (bcf)". On 9 August 2007 the applicant sent an email to the BG GEC containing an article about Australian CSM which referred in particular to Arrow and QGC and copied it to Mr Maxwell. In August 2007 Mr Maxwell and the Team prepared a "Traffic Light Paper" (TLP) to seek approval and funding to assess the potential for converting CSG to LNG and also to review and identify opportunities for BG to enter the CSG business in Eastern Australia. 28On 17 August 2007 Mr Maxwell emailed his draft TLP to the applicant. The applicant emailed back comments about the draft proposal and on 19 August 2007 Mr Maxwell thanked him for the comments and told him that the TLP had been amended to pick up most of them. The Portfolio Development Committee approved the recommendation in the TLP and agreed that Mr Maxwell should define the strategy and business case for CSM in Eastern Australia "and identify mature BE options to deliver a material business which should be presented to the Committee for consideration in due course". 29The applicant was one of five people who received an email from Mr Maxwell on 11 September 2007 advising that the Australia CSM work was approved by the Portfolio Development Committee. In the email Mr Maxwell said that he saw Origin as a potential feedstock supplier to a CSM LNG project but that the other three (Santos, QGC and Arrow) had a higher proportion of their gas uncontracted. In due course Mr Maxwell was authorised to engage Advanced Resources International (ARI) to assess the size and quality of the CSG resource in Eastern Australia and to rank the acreage held by the companies with material CSG positions. Core Collaborative (Core) was engaged to review the market and provide economic modelling. 30On 26 and 27 September 2007 Messrs Seaton and Thompson met with representatives of ARI and Core in Singapore to receive the interim results provided by ARI, which they passed onto Mr Maxwell the next day. On 18 October 2007 Mr Maxwell emailed the applicant to request a meeting between the applicant, Mr Thompson and Mr Seaton. In the email Mr Maxwell told the applicant that Messrs Thompson and Seaton "are in Thames Valley Park next week for internal reviews on the CSG work which is going very well. Some very interesting insights are emerging from the technical work and we have identified a valuable opportunity which we are now moving quickly on. I have suggested to Gary and Jim that they spend some time with you sharing the work and insight/results". 31On 23 October 2007 at BG's head office in the United Kingdom, Messrs Thompson and Seaton met with the applicant. 32On 14 November 2007 BG's Mergers and Acquisitions Group assigned a confidential code name "Project Honey" to the negotiations with QGC. On 27 November 2007 Mr Maxwell had dinner with the applicant in Singapore at Mr Maxwell's request. From 27 November 2007 to 2 December 2007 Mr Maxwell and the applicant exchanged a number of emails. 33Relevant emails were: 28 November 2007 - Mr Maxwell (from Singapore) to the applicant with the subject "Queensland CSG Resources" attaching three Powerpoint slides. 29 November 2007 - Applicant (from India) to Mr Maxwell (in Singapore) with the subject "Queensland CSG Resources" replying to Mr Maxwell's email of 28 November 2007. 30 November 2007 - Applicant (from India) to Mr Maxwell (in Singapore) with the subject "A couple of things". 2 December 2007 - Mr Maxwell (from Singapore) to the applicant (in the UK) in response to the applicant's email of 30 November 2007. 2 December 2007 - Mr Maxwell (from Singapore) to the applicant (in the UK) attaching a copy of the presentation entitled "Eastern Australia Coal Seam Gas (CSG) - ARI Technical Overview Presentation 25/26 October 2007". 2 December 2007 - Mr Maxwell (from Singapore) to the applicant (in the UK) with the subject "Re Queensland CSG Resources" in response to the applicant's email of 29 November 2007. 2 December 2007 - Applicant (from the UK) to Mr Maxwell with the subject "CBM". 34On 2 December 2007 at approximately 11.22pm (GMT) (10.22am, 3 December 2007 Australian Eastern Daylight Time), the applicant's stockbroker received a telephone call from him (in the UK) which instructed him to buy 240,000 QGC shares at $3.20 per share. 240,000 QGC shares were bought on the ASX the same day and the applicant was notified. Settlement of the QGC share purchase took place on 6 December 2007. 35On 3 December 2007 at approximately 10.39pm (GMT) (9.40am on 4 December 2007 Australian Eastern Daylight Time), the applicant's stockbroker received an email from him in the UK giving instructions to acquire a further 10,000 QGC shares at up to $3.25 per share. Settlement of the QGC share purchase occurred on 7 December 2007. 36On 3 December 2007 negotiations commenced between BG representatives (Mr Maxwell, Mr Seaton and Mr Allen) and QGC representatives (Mr Cottee and others) regarding a proposal that (among other things) BG take an equity position in QGC of around 9.9 percent. The negotiations continued over some weeks. 37On 8 December 2007 the Chairman of the Investment Committee sent an email to certain members of the GEC, including the applicant, attaching amongst other things a "Project Honey" Board pre-read for discussion. On 13 December 2007 the BG Board discussed "Project Honey" and referred it to the Investment Committee. On 16 January 2008 the Investment Committee resolved to recommend the deal between BG and QGC to the Chairman's Committee. On 21 January 2008 the applicant was added to BG's project list for "Project Honey". On 29 January 2008 the Chairman's Committee approved the deal and authorised the Investment Committee to approve the final terms. 38At some stage before the end of January 2008, the applicant informed Graham Vinter, BG's general counsel, that he held QGC shares. 39On 1 February 2008 at 10.30am (Australian Eastern Daylight Time) the ASX announced a trading halt for shares of QGC at the request of the company pending a company announcement. The last traded price of QGC shares on the ASX before the closure was $3.42. 40Three announcements were released to the Australian market; one on 1 February 2008 by QGC, another on 3 February 2008 by QGC and an Investor Briefing by BG on 4 February 2008 prior to the Australian market opening. The announcement by BG and QGC to the ASX concerned: (a) An $870 million strategic alliance or joint venture which included BG acquiring a 9.9 percent shareholding in QGC at $3.07 per share and a direct ownership interest of up to 30 percent of QGC's CSG assets, some of which was contingent on the construction of an LNG facility or the certification of 7000 petajoules of proven and probable (2P) gas reserves; and (b) A report that QGC currently had more than 7,255 petajoules in reserves and contingent resources as assessed by independent certifiers Netherland Sewell & Associates Inc. 41When the market opened on the ASX at 10am on 4 February 2008 following the release of the three announcements, the QGC share price rose. QGC commenced trading at $3.90 and went as high as $4.14 during the day. On 28 October 2008 BG announced to the market an on-market takeover of QGC at $5.75 per share effective 15 December 2008. On 19 November 2008 the applicant sold his entire holding in QGC on the ASX (295,000 shares at $5.75 per share) accepting BG's on-market offer at a time when it was clear that BG would proceed to compulsory acquisition of QGC. Evidence at trial 42Mr Maxwell gave evidence in the Crown case. He said that he had been recruited by BG in order to grow the BG gas and LNG business with a particular focus on LNG in the Asia Pacific region. The applicant was a senior executive in BG. Mr Maxwell viewed him as a colleague and while he had no direct reporting relationship with him, the applicant was always supportive of what the Team were trying to do. Other senior executives in BG encouraged Mr Maxwell and team members to speak with the applicant because he was probably the person sitting around the GEC table that had the best understanding of Australia. 43Mr Maxwell explained how the thinking of the Team developed in September and October 2007. He said that ARI was engaged to "interpret the technical results that were, the technical information that was publicly available on the resources we were looking at and their techniques and own experience and that allowed them to interpret those results and to then determine in their view what the size of the resources might be and quality of the resources might be and separately we, as a result of the confidentiality agreement we put in place with QGC, ARI were able to access some technical data that QGC had made available to ARI for ARI to then analyse." (AB 2 T219.37) 44With respect to Santos, Mr Maxwell said: "The interest in Project Corn was declining for two reasons; one was the liability issues associated with the Indonesian mudslide and secondly, the more we looked at the resources that QGC, Origin and Arrow had in addition to the resources that Santos had we started to learn that some of those resources were better than we had previously expected them to be and some were not as good as we might otherwise have expected them to be." (AB2, T221.34) And further: "I think it became clear to us, or it did become clear to us, that Origin and QGC and Santos had the best quality resources and Arrow resources in terms of quality were not as good as the resources that the other three companies had." 45In September 2007 BG head office asked the Team to do an evaluation of Arrow as the possibility of a 17 percent shareholding in that company had arisen. In response, on 2 October 2007 Mr Maxwell sent the Arrow Overview Presentation Pack. On 18 October 2007 Mr Maxwell sent an email to BG head office indicating that the Team felt that the best fit and most doable option was QGC. The team had prepared a Queensland Opportunity Pack (the QGC Pack). Mr Maxwell described the QGC Pack: "A document setting out in a summary form the current thinking of the team on the QGC opportunity and flagging up or identifying the value proposition that we felt QGC could represent for the company and identifying some of the issues that would need to be addressed if we were to pursue that opportunity." (AB2, T258.22) 46In late October 2007, the Team received the final ARI report. As a result of ARI's findings, the team concluded: "The opportunity that we were or that we had identified in QGC was firming as the best opportunity for the company." (AB2, T258.20) 47Mr Maxwell and the Team summarised ARI's findings in the "ARI Technical Overview Presentation 25/26 October 2007". 48Mr Maxwell arranged for Messrs Thompson and Seaton to meet with the applicant at the BG head office and share their insights and results. Mr Maxwell said: "I had been encouraged by other members of the Group Executive and people to whom I had reported to work with, to seek the support and work with Mr Fysh because of his business development expertise and his Australian background and understanding of the Australian economic and oil gas circumstances." (AB2, T260.47) 49He said: "I always found Mr Fysh to be very helpful and that is the reason why I continued to communicate with Mr Fysh. And at the appropriate time when we were coming up to key milestones seek, seek his view." (AB2, T261.09) 50Mr Maxwell gave evidence regarding a meeting that took place in November 2007 between BG senior management and Mr Cottee of QGC at BG's head office in the United Kingdom. Mr Maxwell facilitated the meeting: "The BG team management that met with Mr Cottee, after the meeting, encouraged us to continue to progress as quickly as we could, the negotiations with Mr Cottee and his team. With a view to establishing a set of agreements which we could take back to BG Group for BG Group - or recommend to BG Group senior management, the board, for approval. Approval to acquire an interest in Queensland Gas and an approval to acquire from Queensland Gas interest in certain assets that they held." (AB2, T270.11) 51Mr Maxwell said that the email chain between himself and the applicant on 23 November 2007 was indicative of a meeting he was trying to arrange with the applicant because: "It had been announced that we were going - my line of reporting was to move from Mr Friedrich to Mr Martin Heuston and there was a situation which I saw emerging where Mr Fysh had responsibility for the geographic region of South-East Asia, my team had responsibility for the business development aspects in South-East Asia around gas and LNG, which reported in through a different senior executive and I wanted to have a conversation with Stuart around that. That was the main reason for my wanting to meet with him." (AB1 p 285, AB2 T70.39) 52In late November Mr Maxwell met with the applicant in Singapore. Amongst other things, they talked about: "... the business that we were pursuing in LNG and coal seam gas in Queensland, but we didn't talk about the intimate details of that, that business ... We talked more about why QGC was the right opportunity for us to pursue, given the context - given the analysis that we had been undertaking, but we didn't talk about the details of that analysis. It was just that QGC was the better opportunity for us of the four that we had contemplated back in the middle of the year." (AB2, T272.14) 53On 27 November 2007 Mr Maxwell emailed the applicant regarding their discussion the evening before. In that email Mr Maxwell wrote "We'll send you a slide or two on the CSG resources ownership allocation for info". Mr Maxwell gave evidence that he was making "a reference to the share of CSG resources held by the four main companies in Queensland and I would send some information on that to Stuart Fysh" (AB2, T274.20). Mr Maxwell said that he sent the email to the applicant because "it was an element of the conversation that we had the night before and I was just sending information in support of comments that I had made to Mr Fysh at the time". This was at a time when the emails which formed part of the agreed facts were passing between Mr Maxwell and the applicant. In relation to the dinner in Singapore, Mr Maxwell said: "There was discussion at the dinner in Singapore of QGC versus the other opportunities that we had, sorry, there was discussion in Singapore of QGC relative to the other coal seam gas companies ... Why QGC was a good opportunity for BG Group or why that was the opportunity we were pursuing but I can't recall at this point in time any further details of the QGC opportunities at the dinner, at the meeting in Singapore on that evening." (AB2, T278.15) 54Under cross-examination Mr Maxwell said that there were some members of the GEC who knew about "Project Honey" who were not on the distribution list. He agreed that the applicant's name was not on the distribution list. (AB2, T295.49) 55Mr Maxwell agreed that in August 2007 the team was still looking at "Project Corn" (Santos) as one of the options. At that time the team was also meeting with a company called "LNG Limited", a mid/small scale LNG company looking at a CSM to LNG project in Australia. Nothing came of that contact. 56Mr Maxwell agreed that the TLP did not particularly focus upon Arrow and QGC. At that time, the team were pretty much at the beginning of the five stages towards possible approval of the project (AB2, T351.20, 353.47). As of that time (September 2007), he agreed that the team was still conducting a scoping exercise as to whether CSG to LNG was worth doing. He explained that the reason he was asked to look at the possibility of BG purchasing a stake in Arrow in September 2007 was that this was offered by a company that had a large shareholding in Arrow. He agreed that by the end of November 2007 he needed to be conscious of the confidentiality arrangements regarding "Project Honey". 57Mr Maxwell agreed that when questioned in December 2008 about the meeting with the applicant in Singapore in November 2007, he could have said "It can't have been very eventful because I can't remember the dinner". In relation to the apparent discrepancy between what he had said in December 2008 and what he said at trial, Mr Maxwell said: "If that is what the transcript says I guess that is what I said. I think memories get jolted at times and other things come into your mind and you suddenly remember other aspects." (AB2, T363.13) 58Mr Maxwell accepted that in December 2008, when asked by ASIC examiners about whether anything was said about QGC in the course of the Singapore meeting, he responded: "I can't, I can't recall and this came up in an internal meeting, an internal discussion last Friday." Mr Maxwell agreed that he was on oath to tell the truth when questioned by ASIC and had been doing his best to recall the matter (AB2, T366.45, 367.10). 59Mr Maxwell agreed that when he was questioned by ASIC on 10 December 2008, it was much closer in time to the Singapore meeting with the applicant and that he did not claim to have a better recollection at trial than in December 2008. Mr Maxwell said that he did not have a better memory of the meeting but that what he had done was review his notes and his calendar. When questioned about these notes, Mr Maxwell agreed that he could not remember whether he ever had such notes [about the meeting with the applicant in Singapore] (AB2, T368.44). 60Mr Maxwell agreed that when questioned by ASIC about the Singapore dinner with the applicant, the thing he recalled about their conversation was organisational changes in BG. 61Mr Thompson gave evidence in the Crown case. He said that the team headed by Mr Maxwell were looking at new business developments for BG in the Asia-Pacific region with a particular focus on Australian coal and gas. During the first half of 2007, the focus was upon "Project Corn" (Santos) but that this opportunity began to fall away by mid 2007. 62He said that on 21 August 2007 he and Mr Maxwell met with Mr Cottee (QGC) in Brisbane. The purpose of the meeting was to introduce BG and explore whether QGC might be interested in exploring CSG opportunities with BG. After this meeting, the team began preparation of the TLP into which Mr Thompson had input. 63He said that Mr Maxwell presented the TLP on 10 September 2007 and as a result, BG expressed its support for the team to continue looking at CSG in Eastern Australia. He and Mr Seaton met with ARI and Core to discuss their work. The ARI consultants presented their initial assessment of the resource positions in the key places. An Arrow shareholding was becoming a potential option and BG requested that an assessment of Arrow be done to consider whether they should take a shareholding in it. 64On 2 October 2007 the Team, including Mr Thompson, finalised the Arrow Pack, which consisted of ARI's findings. It was intended that the Arrow Pack would be conveyed to BG head office. ARI's findings indicated that there were four major resource holders being Santos, Origin, QGC and Arrow, who had a lot more gas than the team had initially thought existed. The Team put together a similar summary for QGC called the "QGC Pack". 65In the last week of October 2007, he and Mr Seaton and ARI prepared the Arrow Overview Presentation based on ARI's final report. Mr Maxwell emailed that PowerPoint presentation to the applicant on 2 December 2007. 66On 18 October 2007 Mr Maxwell arranged a meeting via email between Mr Seaton, Mr Thompson and the applicant. The email said: "Next week Gary and Jim are in TVP for internal reviews of the CSG work which is going very well ... We feel we have identified a valuable opportunity .... I have suggested to Gary and Jim that they spend some time with you sharing the work and insights/results." The applicant had responded: "Looking forward to it, we will sort out a time." 67Mr Thompson said that on 22 or 23 October 2007 he and Mr Seaton met with the applicant in his office at BG head office. The subject matter of the discussion was CSG in Eastern Australia. Messrs Thompson and Seaton briefed the applicant on the team's work. Slides from both the QGC and Arrow Packs were presented to the applicant by placing the slides in their paper form on the table for discussion. 68The evidence of what happened at that meeting is of importance. Mr Thompson's evidence concerning the meeting was: "Q. What do you recall the subject matter of your discussion was? A. Yes, we were briefing him on our work on coal seam gas in Eastern Australia and we presented some slides from both the QGC pack and the Arrow pack in our discussion. Q. By "presented" what do you mean? A. Just had them on the table for discussion points. Q. In a paper form like they are in the bundle? A. In a paper form, yes. Q. Did you say you had some slides? A. Yes we did have a few, like when we present it to other members of the Group Executive ... When we went through the entire presentation we had some loose slides on the table for referring to in conversation. ... Q. I appreciate that you were relating background, in effect? A. Yes and I provided an overview of the ARI work and I said words to the effect that it shows that Santos, Origin and QGC have the better acreage of the four main players. Q. Which four? A. Santos, Origin, QGC and Arrow. That Arrow's acreage was on the margin of the play. Q. On the what? A. On the edge of the play, on the edge of the fairway. Not in the sweet spots of the fairway. And that there is considerably more gas than we had originally thought was there. ... A. Yes. I also believe I made the comment when the two valuation slides were on the table, which Jim mainly spoke to, that QGC looked like a better opportunity than Arrow. ... Q. Are you saying that one of the documents, I think you referred to as the valuation page, is contained in that pack? A. Yes, slide 9 of that pack, which is page 162. (This was a slide relating to Arrow.) Q. Page 162? A. That's correct. ... I don't believe I specifically spoke to this slide, as in terms of referring to numbers or figures on this particular slide. Q. What about anyone else? A. Jim went through the slide. Q. By "went through" do you mean he said things about them? A. I believe so. It is some time ago. HER HONOUR: Five years to be precise, or four years and 364 days. CROWN: Q: And then you also, I think, referred a little while ago to the valuation sheet or page from the QGC pack; is that right? A. That's correct. Q. Look at the pages which you've previously examined, starting at page 175, please? A. I have the papers in question. Q. Can you see in the bundle, following page 175, the page which you described as a valuation page or sheet, the slide? A. 177 (This was a QGC slide). Q. What happened, if anything, in relation to that page or slide during the meeting you've described? A. Again, it was referred to in the meeting by Mr Seaton as one of the slides that he had brought with him and in front of him, yes I didn't specifically talk to the slide myself. Q. You? A. I did not specifically talk to this slide myself. Q. Thankyou. Do you remember anything else that took place during that meeting? A. Stuart offered some views on how we could, sorry, Mr Fysh put some views on how we could sell the opportunity internally." (AB 2, T386.24-389.50) ... "Q. Do you recall whether or not any other slides or pages from these packs were referred to during that meeting? A. I don't specifically recall any other slides. Q. Do you recall anything else about what was said during the meeting? A. In the dialogue on the size of the resource, I recall Mr Fysh questioning is there really that much gas there? I recall him being enthusiastic and supportive of the opportunity for BG. Q. Which opportunity was that? A. Coal seam gas in Eastern Australia." (AB 2, T391.3) 69Mr Thompson said that on 25 and 26 October 2007 he, Mr Seaton and Mr Kuskra (of ARI) went to BG head office to brief the executive members on CSG and gain general support to pursue the opportunity of CSG in Eastern Australia. Mr Kuskra presented ARI's findings to the BG executive. He said that around November 2007 a transaction team was specifically set up (called "Project Honey") to look at a targeted entry into CSG. He said that in 2007, he was asked to conduct a due diligence on Project Honey in Brisbane and out in the field and to assess their operational practice in anticipation of a potential future transaction (AB 2, T414). 70In cross-examination, Mr Thompson said that the Arrow pack was a quick estimate of the opportunity. "It was done very quickly and it wasn't, it was a very preliminary assessment" (AB 2, T419.8). He agreed that ARI did its own independent drilling and went underground and collated publicly available information. The same applied to the Core consultants. 71Mr Thompson agreed that he did not remember which ARI slides he had on his person going into the meeting with the applicant, but recalled that he had some slides. He acknowledged that he had previously indicated on oath that he was not sure which slides were shown to the applicant at the meeting. Referring to the ASIC questioning, he said: "I answered the questions put to me on the day, which is some time ago, to the best of my recollection." (AB 2, T242.30) He said that although they talked more broadly than just Arrow and QGC, he had a general recollection of Arrow and QGC being discussed by Mr Seaton, but he could not recall specific details. He agreed that his notes did not actually reflect the applicant being shown a slide. 72Mr Thompson agreed that he was involved in a discussion on 17 December 2007 within the BG Executive concerning Eastern Australia CSG to LNG in terms that included the "recommendation" and "Executive summary" in the briefing note of 17 December 2007 (Exhibit 2 - AB 1, p493-4). Mr Thompson confirmed that the document was a paper, basically concluding the end of "create phase" work and recommending going into the "assess phase" work, seeking funding for the "assess phase" work and it followed readiness reviews which were held on 30 November upon completion of the "create phase" work (AB 2, T428.10). 73Mr Seaton gave evidence at trial. He was part of the team under Mr Maxwell in 2006-2007. He recalled that it became apparent that a shareholder in Arrow wanted to sell its shareholding to BG. As a result, an evaluation was conducted as to whether BG would be interested in acquiring that package of shares. He said that he was involved in the preparation of the evaluation, i.e. the Arrow pack. He confirmed that the team specifically put the valuation figures together on slide 9 "High Level Valuation". 74Mr Seaton said he was also involved in the preparation of a QGC pack because they were "evaluating suitable entry opportunities to progress CSG to LNG. We had evaluated the Arrow opportunity and QGC was the next in the sequence to evaluate". He said that both the Arrow and the QGC packs were strictly internal documents. 75Mr Seaton said that he adopted the habit of keeping a copy of the QGC slide pack inside the back of his ring bound notebook, because he was referring to the slide pack on a regular basis and it was very handy to have a hard copy around. He could not recall whether he also kept the Arrow pack on him. 76Mr Seaton said that on 23 October 2007 he and Mr Thompson met with the applicant at BG's head office in Reading. Mr Seaton had with him the QGC pack in his ring bound notebook. Mr Seaton recalled that they discussed CSG business opportunities generally, but he could not recall the specifics of the conversation. 77In relation to this meeting, Mr Seaton said: "Q. You and Thompson went to head office? A. Yes we did. Q. What happened in relation to your custom about carrying the QGC Pack around with you? A. I still had it in the back of my notebook. Q. Did you meet at Reading in the BG head office with Mr Fysh? A. Yes we did on 23 October. Q. And was Mr Thompson also there with you? A. Yes he was. Q. What did you talk about? A. We talked about business opportunities in Australia. We also talked about the CSG opportunity. I can't recall any specifics of the conversation. Q. Was there any attitude that Mr Fysh made plain in relation to what you were talking about? A. My recollection is that Mr Fysh was very supportive, generally, of pursuing business developments in Australia and pursuing CSG to LNG opportunities. ... Q. Are you able to recall whether or not anything was shown to Mr Fysh when you met him? A. I can't recall anything specifically in relation to Mr Fysh." (AB 2, T454.43-455.27) "Q. Was there any discussion about graphs in the meeting? A. I can't recall a discussion about graphs. I made the note. Q. Was there any discussion about any particular companies? A. I can't recall any specific discussions. Q. All right. Insofar as you can recall the general subject matter, what was it that you were seeking from Mr Fysh if anything? A. We were seeking his view on how best to present the CSG or LNG opportunity and potential questions that might be asked by the Executive. ... Q. And what was it that was presented? A. It was the ARI Pack that was presented. ... Q. As suggesting that you had updated Mr Fysh in that regard; had you done that? A. I can't recall specifically discussing QGC with Mr Fysh." (AB 2, T456.41-458.4) 78Mr Seaton was also involved in putting together the slide pack for the ARI Overview Presentation on 25 - 26 October 2007. The purpose of the meeting was an internal technical review to enable BG (both executive and technical people) to have exposure to the ARI work. 79Mr Vinter gave evidence. He was a member of the GEC and headed the legal function at BG. He said that some time before the end of January 2008 or earlier, the applicant informed him that he held QGC shares. His evidence was: "I have been an investor for sometime in Australian Stocks." He may have said "Energy Stocks", and he made a joke that actually he probably earned more from his investment activity than he had through being employed by BG Group. I remember that quite clearly. He said that he had been following the no, he said actually that he had actually seen the prospects of a coal seam gas project providing gas to export project before BG had and had, as a result, acquired shares in QGC. So at this stage we, he had been aware, that we were proposing a transaction with QGC and I said that we needed to just stop and consider about whether there might be an issue here in relation to insider dealing." (AB 2, T500.35) 80In relation to the applicant's knowledge of Project Honey, Mr Vinter said: "A. Yes, there was [a conversation], I don't think we went into any great detail but I do remember in response to a question I put to him that Stuart volunteered something along the lines of, yes, I think I probably asked him, "What did you know in relation to Project Honey", and Stuart replied, "I knew the guys were doing something but not this"." (AB 2, T502.20) 81Mr Vinter said that he did not act any further in relation to the information which the applicant had given him. He said: "The bald answer to that question is that's correct. I did not act any further. We concluded the conversation with words to the effect of "I think you are the right side of the line" and Stuart replied along the lines of "That is what I think too"." (AB 2, T502.50) 82Under cross-examination, Mr Vinter agreed that he did not take notes of his conversation with the applicant in late January 2008 when the applicant disclosed his ownership of QGC shares. As a member of the GEC, Mr Vinter could recall the investment committee meeting on 16 January 2008, but could not recall whether Sir Frank informed the GEC of Project Honey. "I don't specifically recall that. I was already aware of the Project ... I don't specifically recall the resolution, but I do definitely recall that the Chairman's Committee was empowered to basically give us the final go ahead to sign documentation" (AB 2, T508.40). 83Sir Frank Chapman gave evidence. He said that the proposal about Project Honey was put before the Board at BG on 13 December 2007. He received a CSG pre-read before the board meeting. The applicant was copied into that email. Having approved the concept, the Investment Committee were then responsible for completing and delivering the deal. During December and January, negotiations about the form of the deal were proceeding. In mid-January 2008, a meeting of the GEC took place. The purpose of the meeting was to inform those GEC members who were not on the Project Honey list, what was shortly to happen between BG and QGC. The applicant was present at that meeting. 84Mark Greenwood was an Equities Analyst at JP Morgan and gave evidence at the trial. His function at JP Morgan was to evaluate oil and gas stocks in Australia and to forecast future earnings, estimate the value of those companies and provide investors with recommendations about whether they should effectively buy, sell or hold these stocks. He said that in order to form opinions, analysts relied on publicly available information such as financial reports the companies had published historically, information available in the public arena and some data sources, including Bloombergs. Analysts would synthesise information and put together forecasts of earnings to come up with a view on the stock. 85If the analysts saw a valuation that was significantly in excess of the share price, they would have a positive view of the stock, what they would call an "overweight" recommendation, but if the price of the stock was significantly greater than their inherent value, they would recommend that the clients sell the stock. During the period January 2007 to February 2008, Mr Greenwood was responsible for following all publicly available information that would influence companies Woodside, Santos, Oil Search, AWE, Roc Oil and QGC. Mr Greenwood would form views on the valuation and future earnings for those companies. 86In mid-2007, JP Morgan looked at QGC closely and regular reports were produced. From then until January 2008, Mr Greenwood was not aware of information of BG having an interest in dealing with or going into some sort of joint venture with QGC. When QGC announced its alliance with BG to commercialise CSG via LNG, Mr Greenwood produced a report dated 4 February 2008. 87Under cross-examination Mr Greenwood agreed that in a report dated 1 August 2007 he valued the QGC stock as "underweight". By September 2007 his recommendation changed to "overweight" because from the material he analysed it could now be seen as a "buy" recommendation. Mr Greenwood explained that JP Morgan's system was more of a relative recommendation than an absolute recommendation system, i.e. if the target price was more above the share price than it was below, that it would be considered relatively "overweight". 88When shown a JP Morgan document, Mr Greenwood agreed that as early as October 2006 it was known that there was growth of the CSG industry in Australia. It was impressive and it was apparent that people had underestimated its impressive growth. Mr Greenwood agreed that JP Morgan in the report compared the Australian CSG industry favourably to the US market. 89Mr Greenwood agreed that the 2006 JP Morgan document indicated that the enormous reserves potential, combined with reasonable economics would ensure CSM would fill the gaps between supply and demand. Mr Greenwood explained that predicting a "favourable future" for CSG stock would depend upon the valuation of the stock, what share they had of reserves and what those reserves proved to be, their access to technology necessary to exploit the reserves and whether they had customers lined up and access to funding. 90Daniel Dreyfus was a private client investment advisor at RBS Morgans. He gave expert evidence on behalf of the Crown on the issue of the "materiality" of the information in MFI 4, i.e. that if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares. 91Mr Dreyfus gave evidence that his clientele ranged from very conservative people who had retired and were living off the earnings of particular investments, business people who were still working and in the accumulation phase of their savings, some younger people at the starting point of their investing careers and active traders who followed the market all day and traded off the market for gain and invested in shares and fixed income securities. 92Mr Dreyfus had a Bachelor of Commerce from the University of NSW, an MBA from a UK management course called "Cranfield" and since 2004 had been a Master Stockbroker with the Strong Brokers Association in Australia. Mr Dreyfus explained that the status of a Master Stockbroker is ascribed to people who have worked in the industry for a long time. His clients included institutional clients, who were themselves professional fund managers, dealers who had orders to buy and sell shares to people like himself, active traders who were far more active in selling and buying and perhaps made riskier investments and conservative investors for whom capital preservation was very important and who relied heavily on Mr Dreyfus's advice. 93Mr Dreyfus indicated that he had never encountered information about companies that was not publicly available and discussed it with his clients. He agreed that over the years he had cause to discuss the possibility of corporate activity with his clients. He said: "There's a variety of issues that need to be considered but there is not necessarily definitive answers in assessing whether a corporate action may or may not occur and as a financial advisor we try to make those assessments and then from that basis make recommendations to clients." (AB 3, T 811.41) 94Mr Dreyfus was asked to consider whether the information contained in MFI 4 would be likely to influence his clients. He gave the following evidence in relation to MFI 4: (a) Conservative low risk private clients: were unlikely to be interested in this type of information because of the assessment of the risk return trade off. (AB 3, T816.43) (b) Large institutional investors: He agreed that the information in MFI 4 would be unlikely to influence such investors (AB 3, T818.10). (c) Small and mid-cap investors: Yes, the information would influence such investors because "they specialise in small and mid-cap investments and QGC was a small or mid-cap company. If they had investments anywhere in that sector, then this is information that is likely to influence them in making a decision about those investments. (AB 3, T818.24) (d) Active traders: Yes, they had a higher tolerance for riskier investments, and those for whom shorter term capital gain could be more important than dividend income, those able to make quick decisions about whether or not to invest or those who had a good understanding about the energy sector would be likely to be influenced by MFI 4 (AB 3, T819.1). (e) Hedge Fund clients: Yes, if they believed the risk return parameters made a profitable outcome likely, they would be influenced in the decision about whether or not to acquire QGC shares. Those investors were likely to conduct their own research before deciding whether or not to invest, in a shorter timeframe than large institutional funds (AB 3, T819.22). 95Mr Dreyfus said that there were a number of qualifications that might operate on the likelihood of the information in MFI 4 influencing investors to invest in QGC shares. They included: The age of the information, reliability and credibility of the source of the information, the question of how much BG was willing to spend, whether Santos or Origin would be targets if the QGC bid failed and whether BG could afford either of these, whether ARI was a reputable group, whether anyone had seen the ARI report, whether the Teams' assumptions about gas reserves matched that of other analysts, what other analysts thought of the Teams' valuation of Arrow and QGC, whether such valuations had implications for other companies, whether the valuations might tempt other companies to enter the market, what type of deal might be done between the companies, what the information might mean to AGL as a major QGC shareholder, whether AGL might block any deal, whether the market had already factored in the information and the likely impact on the QGC share price (AB 3, T822.31-823.46). 96In cross-examination Mr Dreyfus said that when forming his opinions he drew upon his experience of advising clients on listed securities across all sectors. He agreed that he was not a specialist in advising on gas sector shares (AB 3, T825.31). 97Mr Dreyfus accepted that with respect to MFI 4, the position that the Team at BG had reached was that QGC was very much more favourable, in terms of worth and market price than Arrow. He agreed that he had not done any analysis of the trading records or history of either Arrow or QGC before June or December 2007, to look for comparative events or releases of information to see what could be gauged from such a comparison. He was referred to an ASX release, dated 5 December 2006, announcing that AGL had taken a significant stake in QGC and agreed that it was the sort of information that might cause a price increase in QGC. He also agreed that this occurrence played no part in his opinion expressed about the QGC information that he had given, but denied that there was a resemblance between the 2006 occurrence and the happenings with BG and QGC in December 2007. 98Mr Dreyfus agreed that before a corporate announcement was made, there was always a level of uncertainty about whether it would succeed, and agreed that MFI 4 contained no announcement of any deal or bid and that added "another layer of uncertainty" (AB 3, T870.21). 99Mr Dreyfus was referred to MFI 4 and to particular (e) and agreed that if the information there set out had been obtained from publicly available material it would have made a big difference to his opinion. He was not prepared to make the same concession with regard to particular (f) of MFI 4. In relation to particular (f), he said: "Q. It wouldn't make any difference? A. No, I'm not saying that. I am, I'm saying it didn't have the basis to assess how they arrived at those figures." (AB 3, T897.47) 100Mr Dreyfus agreed that in order to assess the significance of the fact that the BG Team had prepared an evaluation of QGC and Arrow, something would need to be known about the Team. Further, he agreed that it would be relevant to know whether or not BG was playing catch-up in the field of CSG to LNG in Eastern Australia. He stated that what he took into account was the material presented to him in order to arrive at his conclusions (AB 3, T898.40). 101Mr Dreyfus referred to particular (d) of MFI 4 and said that he made no assumptions about whether the ARI resource figures referred to there, were being made known for the first time. He would want to talk with analysts about whether such information had been priced in by the market and did not give consideration to that factor when forming his opinion. He agreed that he did not do any independent research into the reliability of ARI's assessments (AB 3, T900.11). 102The applicant gave evidence. He described his knowledge of LNG as quite extensive and deep and his knowledge of CSG as reasonable. He was referred to the Agreed Facts and said that the share transactions there identified were a representative sample of his share portfolio between July 1997 and August 2007. He said that he initially tended to rely upon the advice of his broker and his own reading of the Financial Review. He focused mainly on buying things you could buy in floats and the banks and such like. He borrowed money to buy shares and deducted interest from his income tax. 103When he moved from Singapore, his practice changed after he lost a quarter of a million dollars on HIH, a company that his broker recommended. That gave him a sour taste for advice from other people and it gave him a sour taste for investing in things he did not really understand. As a result, he moved into resources because he knew about the resource business. The mining and petroleum industries were industries in which he was comfortable. 104He said that he had been attracted to the Eastern Australian gas market because at that time Australian gas prices were extremely low by world standards. He knew that as soon as Australia linked its gas prices to exports, they would rise. He considered investing in five or six CSG companies being Origin, Santos, Arrow, QGC, Sunshine Gas and a little bit later, a company called ESG (Eastern Star Gas). His interest in investing in CSG was to be an owner of a company that owned gas when gas prices rose on the East Coast to meet export standards. 105He said that in mid-June 2007, he attended an annual BG strategy presentation in the UK. The purpose of these meetings was to put in front of the BG Group Executives as a whole, some of the opportunities that lay before the group or, some of the problems that lay before the group. It was the only time that the Group Executives as a whole sat down with the Asset General Managers that ran BG's 30 assets and "It was an opportunity to assess them and see how they handled pressure and so on. It had an HR function as well" (AB 3, T1011.14). On the evening of 13 June 2007 he gave instructions to his broker at JB Ware to buy 100,000 Arrow shares and on 18 June 2007, he instructed the same broker to buy a further 150,000 shares. Around 26 June 2007, the applicant recalled having a telephone conversation with Gary Thompson of BG. He was interested in the potential for their work as it had been discussed a week or two earlier at the strategy session primarily, around small scale LNG and there was also talk about CSM. 106In July 2007 he had a meeting with Mr Maxwell and Mr Thompson in which the topic of discussion was him trying to answer a question from Mr Maxwell about how to get a business development project going and supported in BG. Mr Maxwell was pretty frustrated and was picking the applicant's brains about it. The applicant recalled receiving an email from Mr Maxwell, dated 1 August 2007. The applicant said that the figures cited [for the reserves of gas held by Santos, Origin, QGC and Arrow] were not news to him and he knew roughly what the figures were (AB 3, T1021.28). 107The applicant recalled receiving an email from Tim Hargraves, dated 2 August 2007, in respect of Arrow's likely potential to be able to succeed in places like China and so forth. He thought that what Tim was really saying was "How is Arrow going to do it?" He took this as a cautionary note that it was going to be hard for a company which had about 120 or 130 people in it to handle such a big issue. Around 2 August 2007, he bought 100,000 shares in Sunshine Gas because Tim Hargraves had said that they were good value and he had a lot of regard for his judgment. 108In August 2007 he received an email from Mr Maxwell, attached to which was a copy of the TLP, being a business development plan for Eastern Australia. The applicant had previously commented upon the document and saw his role as trying to see if there was anything he could suggest that would improve the quality of the paper, or the effectiveness of the paper. 109The applicant recalled a meeting in late October 2007 between himself, Messrs Thompson and Seaton in his office at Thames Valley in the UK around lunchtime. He recalled that the meeting was arranged by Mr Maxwell and identified an email from Mr Maxwell, dated 18 October 2007, in which Mr Maxwell suggested that Messrs Thompson and Seaton should spend some time sharing their work and insights regarding CSG with the applicant while they were in the UK. 110The applicant said that the meeting lasted about 45 minutes and they talked about LNG in Australia in general. They then talked about CSG in Eastern Australia and about how a coal seam project in Australia should be structured, or could be structured, or could be put together and how, particularly, it could be shaped to sell it within each group. Other than Woodside, he could not recall any other company names being mentioned. 111The applicant could not recall any documents or slides being before him at the meeting. When referred to the Arrow Opportunity Pack and asked whether he recalled seeing any of the slides in 2008, he responded "No, I did not. I do recall I did not see them" (AB3, T1032.23). The applicant was then asked if he could recall seeing the slides at any time before 2008, to which he responded "No". To the best of his recollection, he first saw the valuation slide in September 2009 in a meeting with ASIC. 112The applicant said that he did not recall seeing any of the slides indicated in AB 1, p213-223 [the QGC Opportunity Pack] before 2008 and that the first time that he saw AB 1, p215 [the QGC valuation slide] was in the same meeting with ASIC in September 2009. 113The applicant said that he recalled a meeting with Mr Maxwell in Singapore in November 2007. He recalled that Mr Maxwell had arranged the meeting and that they had dinner at a restaurant at the Boat Quay. The meeting lasted about an hour and a quarter. They talked about the reorganisation going on at BG and also a number of topics including CSG in NSW and Arrow. They also discussed the Chief Executive of Arrow. The applicant said that a number of companies were discussed but QGC was not mentioned. The applicant said that the only CSM they discussed was in relation to NSW. 114The applicant was directed to emails between himself and Mr Maxwell and said that it was unlikely that he had opened the attachments to an email from Mr Maxwell on 28 November 2007. The applicant was directed to further emails between himself and Mr Maxwell to which he said that he would have opened the attachment to the email from Mr Maxwell dated 2 December 2007 when he returned to the UK on that date (the attachment is the ARI technical presentation on CSG presented to BG in London on 25 - 26 October 2007). 115The applicant agreed that on his return to the UK on the evening of 2 December 2007, he gave instructions to his stockbroker in Australia to sell Arrow and purchase QGC. He said that he made that decision on that evening. He said that before making his decision to sell Arrow and buy QGC, he had looked at some materials, including a report from Eastern Star Gas, the Arrow AGM 2007 publication and the Arrow 2006 AGM publication. After reading these materials, he said, "One of the items that really distinguished Arrow when I purchased them, was their access to very significant funding for exploration, a much bigger funding pot for exploration than any other Australian CSG company had fallen away" (AB 3, T1043.30). 116The applicant also recalled that before his sale of Arrow and his purchase of QGC, he had a number of conversations with people who had influenced his decision to sell Arrow shares and purchase QGC on 2 December 2007. These included the talk with Mr Maxwell in Singapore, a conversation with the Director General of Hydrocarbons while he was in India and a telephone conversation with his friend Tim Hargraves on 1 December 2007. 117The applicant was shown MFI 4 and directed to each particular in turn. In relation to each particular, except (f) and (i), he claimed to have had some knowledge before 2 December 2007. 118When directed to an email, dated 8 December 2007, from Ashley Almanza of BG to him, amongst others, the applicant said that before receiving the email he had not been aware of "Project Honey". He said that it was at that time, 8 December 2007, that he linked the project with QGC and became aware that this was the project that Mr Maxwell had been working on. Before that, he had not been aware that the project that Mr Maxwell had been working on involved QGC (AB 3, T1056.2). 119The applicant recalled a meeting he had with Mr Vinter on 16 or 17 January 2008 in Mr Vinter's office. He recalled the meeting because on 16 January "Project Honey" came before the Group Investment Committee for approval and he was at that meeting. He went to Mr Vinter after the meeting to discuss his concerns about holding QGC shares and participating in the approval of the BG opportunity with QGC. 120Under cross-examination the applicant said that he did not tell Mr Vinter when he had acquired the shares because he did not think that it was relevant. He said that when he spoke to Mr Maxwell in Singapore (26 November 2007), Mr Maxwell did not talk about what his team was doing. He was not particularly interested in knowing what Mr Maxwell and his team were doing as he had enough on his plate. 121The applicant said that in the emails from Mr Maxwell, after their meeting in Singapore, Mr Maxwell had referred to the project he was working on in a roundabout way. When the applicant was referred to an email from Mr Maxwell to him on 2 December 2007, the applicant said that the email did not give him a clue as to the identity of the Queensland opportunity, nor did he think it appropriate to ask. He also did not want to know. 122When the applicant was referred to an email he sent to Mr Maxwell on 2 December 2007 he said that he knew that Mr Maxwell "was pursuing some sort of partnership or something in Australia". The applicant said that most of the thinking he did about his decision to sell Arrow and buy QGC was done on the overnight flight back to England from India. It had nothing to do with what was happening at BG. The applicant said that he did not think it was inappropriate to buy QGC shares because he did not have knowledge of what Mr Maxwell was doing. If he had known, he would not have done so. 123The applicant denied that Mr Maxwell mentioned QGC or Queensland Gas during their Singapore meeting. The applicant agreed that at the time of the purchase of the QGC shares in December 2007, he held around 3 million shares in Innamincka, a small shareholding in Tattersalls, and several million dollars in a stockbroker's account. 124The applicant denied that two valuation slides, with respect to Arrow and QGC, were on the table when the meeting took place between himself, Mr Thompson and Mr Seaton on 23 October 2007. He also denied that he and Mr Seaton went through the slides. He denied that Mr Thompson had said that QGC looked like a better opportunity than Arrow for BG. The applicant said that he did not recall Arrow or QGC being mentioned at the meeting. 125The applicant agreed that the QGC opportunity had moved very quickly from the time that he had seen Messrs Thompson and Seaton to the time when BG decided to act on the relationship with QGC. He denied that he was aware that Mr Maxwell's team thought QGC a better opportunity than Arrow at the time he met Messrs Thompson and Seaton. He said that he was not aware that QGC was a target for BG, until after he bought his QGC shares. 126The applicant said that on 15 January 2008 he received an email from Kim Howell of BG with a very detailed briefing pack about QGC for the Investment Committee Meeting, which was to take place the next day. After the applicant attended the meeting, he went to see Mr Vinter. He said that he did not know at the time of the meeting with Mr Maxwell in Singapore on 27 November 2007 that the Maxwell team did not regard Arrow as an opportunity. 127The applicant said that when he sold his Arrow shares to buy QGC shares, he believed that he was lucky to get his money back. He said that he sold Arrow shares rather than bought QGC shares. He further added that he would not have bought the QGC shares if he had not decided to sell Arrow - he substituted the QGC investment for the Arrow investment. When it was suggested to the applicant that the reason he sold Arrow and bought QGC was because he wanted to take advantage of what he knew about BG's intended corporate action with respect to QGC, he said "I could not do that Mr Crown, I didn't have that information. I wouldn't do that Mr Crown" (AB 3, T1115.26). 128When the applicant was shown MFI 4, he agreed that he had knowledge of the information contained in particulars (a) and (b) [when he purchased the QGC shares]. The applicant agreed that he was aware of particular (c) but drew a distinction between what he knew and what he believed the position was and the details in particular (c). He agreed that he was aware of particular (d), but had no recollection of opening the report [ARI Technical Presentation] when it was sent to him by Mr Maxwell on 2 December 2007. He simply could not remember. The applicant agreed that he was aware of particular (e). He denied that he had seen particular (f) and denied discussing valuations at the meeting with Messrs Thompson and Seaton on 23 October 2007. He said that his memory was crystal clear on this issue. 129The applicant agreed that he possessed the information in particulars (g) and (h). He reiterated that during the meeting with Mr Maxwell in Singapore (27 November 2007) there was no discussion about what Mr Maxwell was going to be doing in Australia. 130The applicant was directed to an email from him to Mr Vinter, dated 21 November 2008, in particular, the words "we [the applicant and Mr Maxwell at the Singapore meeting] talked about Arrow". The applicant was asked whether Mr Maxwell mentioned QGC to which the applicant responded "I am pretty sure he didn't, well, yes, I am clear that he did not mention QGC" (AB 3, T1126.13). Submissions 131The parties accepted that the directions as to the elements of the offence of insider trading given by the trial judge were correct. By reference to counts 3 and 4 those directions were: "ELEMENTS OF THE OFFENCE OF INSIDER TRADING There are four elements of the offence. They are (for counts 3 and 4): 1. that, between 2 December and 8 December 2007, the accused acquired 250,000 shares in Queensland Gas Company Ltd; 2. that he did so intentionally; 3. that, at the time he acquired the shares, the accused possessed inside information; inside information means information in relation to which the following paragraphs are satisfied: (a) the information is not generally available; (b) if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of particular Division 3 financial products 4. that, at the time he acquired the shares, the accused knew or ought reasonably to have known: (i) that the information was not generally available; and (ii) that, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares." 132Elements 1 and 2 of the offence played no part in the appeal and need not be further considered. In relation to element 3, the written direction provided by her Honour was: "ELEMENT 3 - POSSESSION OF INSIDE INFORMATION 3. Has the Crown established beyond reasonable doubt that, at the time he acquired the shares, the accused possessed inside information? The "inside information" relied upon by the Crown for counts 3 and 4 is the information set out in MFI 4. You must be satisfied that the accused possessed that body of information, that is, all of the information set out in MFI 4, taken in combination. However, you do not have to be satisfied that the information was conveyed to the accused in the precise terms in which it is set out in MFI 4. The test is whether the accused possessed the substance of that information, taken as a whole or in combination, except any part of the information that you consider makes no real difference. Information: is not confined to the statements of fact. It includes matters of supposition or assumption, and other matters that would not be sufficiently definite to warrant being made known to the public. It also includes matters relating to the intentions or likely intentions of a person. Inside information: means information that: (a) is not generally available; and (b) is such that, if it were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares. In order to be "inside information", the information relied upon by the Crown must satisfy both limbs of that definition. Each limb of that definition includes a term that is further defined in the Act. You must determine this issue having regard to those further definitions. "Generally available" The first limb is that the information is not generally available. Information is "generally available" if it is readily observable. That includes any deductions, conclusions or inferences from such information. Information is also generally available if it has been made known in a way that is likely to bring it to the attention of investors (persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information) AND a reasonable time has passed for the information to be disseminated among such investors. Again, that includes any deductions, conclusions or inferences from such information. "Division 3 financial products" means financial products that can be traded on a financial market including securities (including shares), derivatives, interests in a managed investment scheme, debentures, stocks or bonds and superannuation products. This test tells you when information is "generally available". In order to establish that the information in MFI 4 was "inside information", the first limb the Crown has to prove is that the information was not generally available. In order to be satisfied that the information was not generally available, you must be satisfied that it does not satisfy this test. You have to determine whether the information particularised in MFI 4, considered as a combination, was not generally available. It is not necessary for the Crown to prove that each part of the combination considered separately, by itself, in isolation from the rest of the information in the combination, was information which was not generally available. "Material effect": The second limb of "inside information" is that, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares. A reasonable person would expect the information in MFI 4 to have a material effect on the price or value of shares in QGC if (and only if) that information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of shares in QGC. You are asked to measure the materiality of the information from the standpoint of a reasonable person and on the basis that you are assessing its likely influence not on just any person in society but on persons with some experience of the stock market. You have to determine the information particularised in MFI 4, considered as a combination. It is not necessary for the Crown to prove that each part of the combination, considered separately and in isolation from the rest of the information in the combination, was information which would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of shares in QGC. "Possessed inside Information": The Crown must establish that the accused had the information in his mind, that is, that he knew that information. 133Given the complexity of Element 3, her Honour provided to the jury a summary. The parties accepted the correctness of that summary. "SUMMARY AS TO ELEMENT 3 3. Has the Crown established beyond reasonable doubt that, at the time he acquired the shares, the accused possessed inside information? (a) Has the Crown established beyond reasonable doubt that the accused possessed the information? (b) Has the Crown established beyond reasonable doubt that the information was not generally available? (c) Has the Crown established beyond reasonable doubt that, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares. This test is satisfied if (and only if) the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of shares in QGC." 134As with Element 3, the parties accepted as correct the trial judge's written direction to the jury in relation to Element 4 of the offence of insider trading. "ELEMENT 4 - KNOWLEDGE THAT THE INFORMATION WAS INSIDE INFORMATION 4. Has the Crown established beyond reasonable doubt that the accused knew or ought reasonably to have known that: (i) the information was not "generally available"; and (ii) if the information were generally available, a reasonable person would expect it to have a "material effect" on the price or value of particular Division 3 financial products (here, shares in QGC)? In determining whether the accused ought reasonably to have known that the information had those two qualities, you must consider all of the relevant circumstances of the accused, including his mental state at the time." Applicant's submissions 135The applicant submitted that the information in particulars (a) - (c) of MFI 4 did not constitute "inside information". He submitted that a general investigation of the kind which BG carried out in relation to CSG on the eastern coast of Australia did no more than elicit matters of general knowledge within the relevant market. He noted that in relation to (d), the Crown had accepted that the information which ARI assembled was all sourced from material which was publicly available. He submitted that it was no part of the Crown case that what ARI reported to BG derived from material other than that which was publicly available. 136The applicant made the same submission in relation to particular of information (e) in MFI 4. He accepted that particular (e) involved quantitative information, as opposed to qualitative information, but as with particular (d) he submitted that it was based on information which was readily available to persons in the industry who chose to inquire about it. 137The applicant accepted that the information, in particular (g), was obviously private in that it related to a conclusion of Mr Maxwell. Nevertheless, he submitted that this conclusion was on its face quite unremarkable in that Arrow appeared to be the poorest in relation to that consideration. The applicant submitted that this was a conclusion which was obvious from information which was publicly available and was a conclusion which had been arrived at by others who had considered that publicly available information. 138In relation to particular (h), the applicant accepted that Mr Maxwell had been working on something called a "Queensland opportunity" and that after they spoke in Singapore in November 2007, Mr Maxwell was going to Queensland to further investigate that matter. The applicant submitted, however, that there were at this stage four companies still under consideration, i.e., Santos, Origin, QGC and Arrow. He submitted that the investigation of the "opportunity" was still in the first phase of investigation, i.e., the "create phase". There was no agreement, but rather there was a range of things which had yet to be agreed. There was at most the possibility or hope of some deal or agreement in the offing. The applicant submitted that this could not be regarded as inside information, in the relevant sense, and that the Crown had not made submissions to that effect at trial or on appeal. 139The applicant submitted that this analysis of the MFI 4 particulars placed into context the importance of particular (f). Particular (f) was private in the sense that a calculation had been made and a conclusion had been reached based on publicly available information. To achieve the information contained in particular (f) involved a process which included the application of judgment. The applicant accepted that the information in particular (f) could satisfy elements 3 and 4 of the offence of insider trading. The applicant submitted that it was particular (f) which tied the other particulars together to bring about the conclusion in particular (i). 140The applicant noted that no submission had been made at trial by either side to the effect that particular (f) was one which would make no real difference if it were omitted from the particulars of information in MFI 4. 141The applicant acknowledged that the test for element 3 of the offence included "whether the accused possessed the substance of that information, taken as a whole in combination, except any part of the information that you consider makes no real difference". In the appeal, that qualification was described as the "proviso". While acknowledging the correctness of that test and of that statement of the proviso, the applicant submitted that the importance of the information in particular (f), both on its own and in its relation to the other particulars of information in MFI 4, made it unreasonable for a jury to treat it as something the omission of which would make no real difference. He submitted that the information in particular (f) went to the very heart of value buying. 142It was the Crown case that the information in particular (f) was conveyed by Messrs Seaton and Thompson to the applicant at the meeting on 23 October 2007. It was not suggested that words to the effect of particular (f) were spoken to the applicant. The inference sought to be drawn was that the information was conveyed to him by what was said and an examination and comparison of two groups of documents - the Arrow opportunity pack and the QGC opportunity pack. The documents particularly relied on were slide 9 of the Arrow pack and slide 2 of the QGC pack which were known as the "valuation slides". 143The applicant submitted that there was no evidence which would enable a jury to be satisfied beyond reasonable doubt that the information in particular (f) was conveyed to him on this occasion. He submitted that the evidence of Messrs Seaton and Thompson did not reach that standard. The applicant submitted that an analysis of their evidence validated that submission. 144In his evidence in chief, Mr Thompson said about the slides - "just had them on the table for discussion points" and "when the two valuation slides were on the table, which Jim [Seaton] mainly spoke to, that QGC looked like a better opportunity than Arrow". Mr Thompson said that it was Mr Seaton who went through the slides and that he "believed" that Mr Seaton "said things about them". 145In cross-examination Mr Thompson said that he could not remember specifically speaking to any slide. Mr Thompson did, however, recollect that the two valuation slides were on the table and were shown by Mr Seaton to the applicant. Mr Thompson agreed that when examined under oath, he said that he could not recall which specific slide or slides Mr Seaton had shown. Mr Thompson agreed that the ASIC examination was much closer in time to the events in question and that he did not claim to have a better recollection at trial than he did when questioned by ASIC. 146The applicant relied upon the following evidence: "Q. It is fair to say isn't it, that you can't possibly now say what it is, if anything, that Mr Seaton went through, that he said, about any of the contents of that slide, do you agree? A. I just have a general recollection of both Arrow and QGC being discussed by Mr Seaton but I can't recall specific details. Q. You don't mean by that, do you, that they were the only companies whose plays were mentioned do you? A. We talked more broadly than just Arrow and QGC." (AB 2, T426.20) 147The applicant submitted that the evidence of Mr Thompson depended upon Mr Seaton filling in the gaps, i.e. giving evidence as to what in fact he said concerning the two slides and to what extent he directed the applicant's attention to them. There was nothing in Mr Thompson's evidence to the effect that he observed the applicant examining or comparing the slides. In that regard, the applicant submitted that the information in particular (f) was not set out in terms on the slides, but required some analysis of the slides themselves. The applicant submitted that the evidence of Mr Thompson at trial, which represented the high point of the Crown case in relation to particular of information (f), was significantly undermined by its inconsistency with the evidence given to ASIC some three and a half years previously. 148The applicant submitted that the evidence of Mr Seaton failed to fill in any of the gaps in Mr Thompson's evidence. While Mr Seaton had a copy of the QGC pack, he could not recall having the Arrow pack at that time. Mr Seaton could not remember saying anything in relation to the Arrow pack at the meeting, he could not recall whether anything was shown to the applicant at the meeting, be that slides or graphs, nor could he recall any specific discussion about any particular companies, in particular QGC, at the meeting. 149The applicant submitted that because the information in particular (f) was not in terms set out in the slides but required some analysis and explanation, there needed to be evidence that some such analysis or explanation took place at the meeting. The applicant submitted that there was no such evidence. The applicant submitted that there was no evidence of any net asset value (NAV) discussion, or any discussion of share price. The applicant submitted that this evidence could not have satisfied the jury beyond reasonable doubt that he possessed the information in item (f) at the relevant time. 150The applicant relied upon a separate and independent basis upon which the verdicts against him should be set aside and the convictions quashed - namely, that it was not open to the jury to be satisfied beyond reasonable doubt that the information contained in MFI 4 was material in the sense that if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares. 151In accordance with the directions of the trial judge, the applicant submitted that in order to satisfy this element of the offence, the jury had to be satisfied beyond reasonable doubt that: (a) If the information in MFI 4 possessed by the applicant (being all of the information in MFI 4 taken in combination) were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares; and (b) A reasonable person would expect the information in MFI 4 to have a material effect on the price or value of shares in QGC if (and only if) that information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of shares in QGC. 152The applicant submitted that the jury could not have been satisfied that the information possessed by him was material on the evidence adduced by the Crown. 153The Crown sought to prove materiality primarily through an "expert", Mr Dreyfus. The Crown also relied on the fact that, in early February 2008, when a deal between QGC and BG was finalised and announced, the QGC share price increased. The applicant submitted that neither of these matters provided a safe basis for the jury to be satisfied to the relevant standard on the issue of materiality. 154The applicant submitted that Mr Dreyfus had no expertise in the LNG and CSG sector. The applicant was critical of the way in which the evidence was given by Mr Dreyfus. The evidence was given "through the prism of what he would be telling his clients". By reference to the information in MFI 4, he was asked "would this be something that you'd consider and use in giving advice?" The questions were not put in terms of "if you were advising your client and after the event were given the information in MFI 4, being something you didn't know before, would it make any difference?" This process was followed in relation to each class of client. The applicant submitted that the relevance of such a process of questioning was problematic when the issue was whether the relevant information would have an effect on the price and value of a security. 155The applicant submitted that the statements of opinion by Mr Dreyfus as to whether or not the information in MFI 4 would be likely to influence certain classes of investors, were on his own admission, so heavily qualified by reference to matters that he was not able to consider or did not consider, as to render them of no utility. 156The applicant submitted that the matters of qualification, which Mr Dreyfus was not able to consider, went to matters that were fundamental in the sense that they made the difference between whether the information could possibly influence a person in deciding to acquire or dispose of shares, or not (those qualifications were set out at AB 3, T820.11-823.46). With specific reference to QGC, these qualifications raised the following issues - the age of the information, its reliability and credibility, its source, how much BG was willing to spend, whether Santos or Origin could be targets if an attempt to strike a deal with QGC failed and whether BG could afford to deal with either Santos or Origin. 157The applicant noted that the qualifications included such rudimentary matters as what was already priced into the QGC share price by the market at the time of the putative announcement of the information contained in MFI 4. Mr Dreyfus did not undertake any analysis of what in fact was already priced in. The applicant submitted that this was a significant issue, and it was not in dispute at trial that much of the information contained in MFI 4 was, as at early December 2007, already in the public domain. 158In relation to the increase in QGC's share price, the applicant submitted that the rise in February 2008 provided no safe basis for the jury to find that the information in MFI 4 was material. There were a number of reasons for this. There were other factors which could account for such an increase, in particular the announcement of substantial gas reserves. The applicant submitted that the information in fact announced by BG and QGC in February 2008 was not properly comparable with the information in MFI 4. He submitted that to do so involved an apples and oranges comparison. The applicant submitted that not only was the information different but that Mr Dreyfus, because he had not made the preparatory inquiries, could not express an opinion concerning the likely impact of the MFI 4 information on the QGC share price. 159The applicant submitted that taken at its highest, the effect of the information in MFI 4 was that as at early December 2007 there was a "possibility" of a "deal" between BG and QGC and that discussions were to be had to see if a deal could be done. By contrast, what was announced in 2008 was an actual finalised deal between BG and QGC of a particular scope and magnitude. The applicant submitted that relevant to the question of materiality of the information contained in MFI 4, as at December 2007, was an understanding of the possibility of a deal being done, the scope of that deal and what the market had already priced into QGC's share price as at that date on account of the possibility of a deal being done. The applicant submitted that none of these matters were dealt with by the Crown. The applicant submitted that the Crown did not provide the jury with any basis whereby it could reason back from the price increase as a result of the announcement in February 2008 to the question of materiality in December 2007. Without such a basis, any link between the increase in the share price of QGC in February 2008 and the information in MFI 4, would involve speculation. 160The applicant noted that the announcement in February 2008 did not relate only to the "deal" between BG and QGC but also that QGC had significantly more gas in reserves and in contingent resources than the market had previously understood. In accordance with the evidence of Cottee, the applicant submitted that this was a significant and positive matter in terms of the future prospects of QGC and thus would likely have had a positive impact on QGC's share price. The applicant submitted that the jury was not given any means by which it could disentangle for itself the obvious effect this positive component would have had on the market in February 2008 from the news of the deal which had been entered into. The applicant submitted that absent any such means, it would have been dangerous for the jury to speculate for itself as to the existence and extent of any connection. 161In summary, the applicant submitted that the Crown did not attempt through Mr Dreyfus or otherwise, to show the jury how, if at all, it could adjust for the obvious differences between the position of BG in early December 2007 and that which was announced in February 2008, e.g., the possibility of a deal with QGC, the details of which were unknown, and an actual deal with clear terms and conditions and an announcement of substantial reserves. The applicant submitted that without providing a methodology for such an adjustment, there was no safe or reasonable way for the jury to treat the price move in February 2008 when working out the materiality of the information in MFI 4 as to price sensitivity. The applicant submitted that the evidence before the jury was insufficient to enable the jury to properly use the QGC share price rise on the issue of materiality. 162In relation to materiality generally, the applicant relied upon an annotated copy of MFI 4 which contained references to and extracts from Exhibit 4 to illustrate that the important parts of the information in MFI 4 were already relevantly available in the public domain. Those extracts from Exhibit 4 were collected in a separate volume, which was provided to the court by the applicant. In doing so, the applicant noted that he was not undertaking the onus of establishing that fact. Rather, he submitted, the extracted parts of Exhibit 4 made clear the extent to which the Crown had failed to establish materiality with respect to the information in MFI 4 and the consequent unreasonableness of the jury's verdict. Crown's submissions 163The Crown submitted that each of the particulars of information in MFI 4 constituted a part of a "pathway" towards the issue of materiality, i.e. price sensitivity. By reference to that analogy, the Crown posed the question whether if a paving stone were missing in that pathway, could the jury still get to price sensitivity? 164While not conceding that there was insufficient evidence to establish particular of information (f) in MFI 4, the Crown submitted that its absence was not fatal to the Crown case. This was because the significance of any discrete component of the body of information in MFI 4 was a question of fact for the jury. This was in accord with the direction by the trial judge in relation to element 3 which both sides had accepted as correct. The Crown submitted that even without particular (f), the information in MFI 4 was sufficient to establish the offence. 165The Crown relied on her Honour's written direction as to element 3 of the offence (par [132] hereof) and on the following oral direction in the summing up: "92 You do not have to be satisfied that the information was conveyed to the accused in the precise terms in which it is set out in MFI 4. The test is whether the accused possessed the substance of that information taken as a whole or in combination, except any part of the information that you consider makes no real difference." (AB 3, T1318) 166The Crown submitted that the effect of that part of the summing up and of the written direction was that the significance of any discrete part of the information in MFI 4 was a question of fact for the jury. The Crown submitted that these directions left the jury in a position of deciding for themselves whether any part of the information made no real difference. 167The Crown submitted that it was left open to the jury to find in respect of particular (f), as with any other particular, that a failure to prove it in part or in whole made no real difference, especially in the context of proof of the other particulars. In that regard, the Crown noted that the applicant did not argue a lack of proof of possession of the information in the other particulars. It also noted that the jury were not directed that proof of any individual particular was essential to their verdict or that any one particular was more important than any other. 168The Crown put the same submission in a slightly different way. The Crown submitted that it was open to the jury to find that any individual particular was of no real importance and to act on the rest. By way of example, the Crown submitted that it could be argued that the content of particulars (h) and (i) relating to the imminent BG activity aimed at "capturing the Queensland opportunity", taken in the context of particulars (a) - (e) and (g), was sufficient in itself to establish the necessary qualities which the information as a whole was required to have, in order for the subject counts to be sustained. The Crown submitted that in such circumstances it followed that the information in particular (f) could satisfy the description of making "no real difference". 169In oral submissions, the Crown submitted that even without the information in particular (f), the other information in MFI 4 was to the effect that the monolithic BG was to enter into a co-operative arrangement, or relationship, with the diminutive QGC and that that of itself would be sufficient to permit a conclusion as to materiality and inside information (Appeal T34.4 - .36). In support of that submission, the Crown relied upon the meeting between the applicant and Mr Maxwell in Singapore on 27 November 2007 and the exchange of emails which took place between the applicant and Mr Maxwell between 28 November and 2 December 2007 when the applicant first acquired QGC shares. The Crown submitted that the inevitable inference to be drawn from the meeting, those emails and the purchase of QGC shares was that the applicant had such information which of its nature was price sensitive. 170The Crown submitted that for the applicant to succeed, the Court would have to be satisfied as to two things: (a) That it had been established by the applicant that it was not open to the jury to find that he possessed the information in particular (f); and (b) If so, that part of the information not found to be possessed by the applicant did not satisfy the requirement of making "no real difference" to the whole of the information as particularised in MFI 4. 171The Crown did not accept the proposition that it was not open to the jury to find that the applicant was in possession of the information in particular (f) of MFI 4. The Crown submitted that it was open to the jury to accept the evidence in chief of Mr Thompson, which of itself was sufficient to allow an inference to be drawn that the information in particular (f) was conveyed to the applicant. The Crown relied upon Mr Thompson's evidence identifying "two valuation slides which were on the table", that Mr Seaton "went through the slides" and that "QGC looked like a better opportunity than Arrow". The Crown relied on Mr Thompson's evidence that the applicant had suggested modifications to another slide (but not one of the two valuation slides). The Crown relied upon the circumstances leading up to the meeting between the applicant and Messrs Thompson and Seaton, i.e. the email from Mr Maxwell of 18 October 2007 advising the applicant that the two men were coming to head office: "... for internal reviews on the CSG work which is going very well. Some very interesting insights are emerging from the technical work and we have identified a valuable opportunity which we are now moving quickly on. I have suggested to Gary and Jim that they spend some time with you sharing the work and insights/results." (AB 1, p 224) 172The Crown relied upon the applicant's admitted interest in Australian oil and gas shares and his substantial shareholding in Arrow. The Crown noted the applicant's prior assistance to Mr Maxwell with the work of the Team and his support for pursuing business developments in Australia. 173The Crown submitted that those matters were available to be taken into account by the jury, so as to enable them to conclude that the information in particular (f) had come into the possession of the applicant at the meeting. The Crown submitted that Mr Seaton's failure to recall relevant detail did not undermine the evidence of Mr Thompson. It simply added nothing to it. The Crown submitted that it was open to the jury to discard the applicant's version of the meeting, leaving it open to accept Mr Thompson's account in chief, when coupled with the surrounding circumstances. 174In relation to Ground 3, i.e. that the evidence in the Crown case could not have satisfied the jury that the information possessed by the applicant was material in the sense of s1042D of the Act, the Crown relied upon the evidence of Mr Dreyfus but not only on that evidence. The Crown adopted as part of its submission the following statement of principle by the trial judge from her judgment as to the admissibility of the evidence of Mr Dreyfus. "11 The intention of the Legislature appears to have been that materiality must be measured against both reasonableness and some knowledge of the market. The expectations of a reasonable person are quintessentially within the province of the jury. That is an issue that need not, and should not, be informed by any subjective opinion or assessment whether or not based on specialised knowledge. However, in expressly confining materiality to the likely influence of the information on "persons who commonly acquire Division 3 financial products", the statute requires the jury to apply that test by reference to a reasonable person armed with some knowledge of the matters likely to influence the trading decisions of persons who commonly trade in the market. That is an issue which draws in part on matters of common sense well within the province of the jury, but one as to which specialised knowledge might also be brought to bear." (AB 3, p 1413) 175The Crown submitted that the evidence of Mr Dreyfus went directly to the issue of the materiality of the information in MFI 4 in that the information was likely to influence certain categories of investors in the relevant way. In relation to some of the qualifications which he expressed when giving that evidence, the Crown submitted that these were answered by other evidence in the case. The Crown referred particularly to the age of the information, the reliability and credibility of the information, the reputability of ARI and whether anyone had seen the ARI report which were all answered in that way. 176The Crown submitted that the evidence of Mr Dreyfus assisted its case in two ways. The first and principal way was his expression of opinion about the significance of the particulars of information in MFI 4. In addition, his evidence had the effect of vesting the jury members with additional knowledge which could be combined with their own common sense in the way referred to by her Honour. This was the secondary effect of his evidence, i.e., to identify the factors which in his view were worthy of consideration when the jury came to consider what should be considered, or might be considered, in relation to the materiality question. 177The Crown submitted that even if the evidence of Mr Dreyfus was significantly discounted so as to reduce its utility, this would not lead to the conclusion that it was not open to the jury to find that the MFI 4 information was material since its members were still able to act on their own common sense. The Crown submitted that the information about the imminent potential involvement of BG with QGC, as contained in MFI 4 and as specifically set out in particulars (h) and (i), left it open to the jury to conclude that materiality had been established. 178On that issue, the Crown relied specifically upon the following directions by the trial judge (which were not challenged by the applicant): "51 Conversely, if you don't accept Mr Dreyfus's evidence, just because you do not accept it does not mean of itself that the Crown has failed to prove materiality. There is no rule that says that the Crown has to have an expert witness to prove that issue. Ultimately, whether you accept Mr Dreyfus's evidence is entirely a matter for you. ... 123 So this question of whether a reasonable person would expect the information to have a material effect is a question of fact but it is one which calls on your collective common sense and your experience of the world and it is also one in respect of which you might be assisted by expert evidence. You were asked to measure the materiality of the information from the standpoint of a reasonable person ... 124 The question whether information is likely to influence investors and the expectations of a reasonable person on that issue are quintessentially within your province, ladies and gentlemen. That is the very kind of issue for which juries are brought together and considered the appropriate decision makers about questions of fact." (AB 3, p 1305 ff) 179The Crown submitted that its case was consistent with these directions but did in addition call in aid the evidence of Mr Dreyfus. The Crown emphasised the significance of the impact of the proposed alliance between BG and QGC based in part on evidence such as that of Mr Cottee, that the deal with BG "opened the world as a place where we can sell gas". On this issue, the Crown also relied upon the disproportion in size between BG and QGC as relevant to the question of materiality. 180The Crown relied on the increase in the share price of QGC in February 2008 as relevant to the materiality of the information in MFI 4. In that regard, the Crown noted that her Honour had cautioned the jury in an extensive direction about reasoning back from the information in the announcement to the effect of the available information as it stood at the time of the applicant's acquisition of QGC shares. The Crown submitted that even though there might be an absence of consideration of or knowledge of the effect of other information on the increase in the QGC share price, the question was still for a person in the position of a juror to consider whether or not a person who commonly acquired shares would, in the circumstances of the information contained in MFI 4, be influenced in deciding whether or not to acquire QGC shares. Consideration 181For the applicant to succeed in this appeal, he has to bring himself within s6(1) of the Criminal Appeal Act 1912 which states that the Court of Criminal Appeal "shall allow the appeal if it is of the opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported, having regard to the evidence". The evidence and the competing submissions based on them have already been reviewed. It is, however, necessary to take account of what the authorities say as to how this Court should determine whether or not the applicant has satisfied that requirement. 182Guidance on this issue was most recently provided by the High Court in SKA v The Queen [2011] HCA 13; 243 CLR 400. There the majority said: "The task of the Court of Criminal Appeal 11 It is agreed between the parties that the relevant function to be performed by the Court of Criminal Appeal in determining an appeal, such as that of the applicant, is as stated in M v The Queen by Mason CJ, Deane, Dawson and Toohey JJ: "Where, notwithstanding that as a matter of law there is evidence to sustain a verdict, a court of criminal appeal is asked to conclude that the verdict is unsafe or unsatisfactory, the question which the court must ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty". 12 This test has been restated to reflect the terms of s 6(1) of the Criminal Appeal Act. In MFA v The Queen McHugh, Gummow and Kirby JJ stated that the reference to "unsafe or unsatisfactory" in M is to be taken as "equivalent to the statutory formula referring to the impugned verdict as 'unreasonable' or such as 'cannot be supported, having regard to the evidence'." 13 The starting point in the application of s6(1) is that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, and the jury has had the benefit of having seen and heard the witnesses. However, the joint judgment in M went on to say: "In most cases a doubt experienced by an appellate court will be a doubt which a jury ought also to have experienced. It is only where a jury's advantage in seeing and hearing the evidence is capable of resolving a doubt experienced by a court of criminal appeal that the court may conclude that no miscarriage of justice occurred." Save as to the issue whether the Court of Criminal Appeal erred in not viewing a videotape of the complainant's police interview, to which reference will be made later in these reasons, this qualification is not relevant to the present matter. 14 In determining an appeal pursuant to s6(1) of the Criminal Appeal Act, by applying the test set down in M and restated in MFA, the Court is to make "an independent assessment of the evidence, both as to its sufficiency and its quality". In M, Mason CJ, Deane, Dawson and Toohey JJ stated: "In reaching such a conclusion, the court does not consider as a question of law whether there is evidence to support the verdict. Questions of law are separately dealt with by s6(1). The question is one of fact which the court must decide by making its own independent assessment of the evidence and determining whether, notwithstanding that there is evidence upon which a jury might convict, 'none the less it would be dangerous in all the circumstances to allow the verdict of guilty to stand'."" 183By way of further guidance, the majority said in SKA: "20 The reasoning of the Court of Criminal Appeal exposes a fundamental problem with its approach to its task. The Court concerned itself with whether, as a question of law, there was evidence to support the verdicts, rather than making its own independent assessment of the evidence. ... 21 To determine satisfactorily the applicant's appeal, the Court of Criminal Appeal was required to determine whether the evidence was such that it was open to a jury to conclude beyond reasonable doubt that the applicant was guilty of the offences with which he was charged." 184An explanation of what is meant by the phrase "open to the jury" was provided by Hayne J (with whom Gleeson CJ and Heydon J agreed) in Libke v R [2007] HCA 30; 230 CLR 559 at [113]: "113 It is clear that the evidence that was adduced at the trial did not all point to the appellant's guilt on this first count. But the question for an appellate court is whether it was open to the jury to be satisfied of guilt beyond reasonable doubt, which is to say whether the jury must, as distinct from might, have entertained a doubt about the appellant's guilt. It is not sufficient to show that there was material which might have been taken by the jury to be sufficient to preclude satisfaction of guilt to the requisite standard. ..." Grounds of Appeal 1 and 2 185Fundamental to the success of Grounds 1 and 2 is the proposition that it was not open to the jury to find beyond reasonable doubt that the information in particular (f) of MFI 4 was possessed by the applicant on 2 December 2007 because such a finding could not be made on the evidence. The applicant's case was that the jury having properly examined the evidence on this issue must have had a reasonable doubt. In my opinion, the applicant has established this proposition. Having reviewed the whole of the evidence, I am left with a reasonable doubt on this issue and that is a doubt which the jury should have had. It is not a doubt which can be resolved by the jury's advantage in seeing and hearing the evidence. 186Even if it be accepted that the information in particular (f) of MFI 4 could have been deduced on a relatively brief evaluation of the valuation slides in question, evidence concerning the slides leaves reasonable doubt as to whether the applicant was in a position to conduct such an examination much less that he had done so. I have set out the evidence of Mr Thompson in pars [144] - [146] above. That evidence even taken at its highest, does not go so far as to suggest that the applicant examined the slides. Further, to the extent that the evidence went further than the sworn evidence of Mr Thompson at his ASIC examination that he could not recall which slides had been shown to the applicant, the evidence at the trial must be considered in the context of the concession by Mr Thompson that he did not have a better recollection at the trial than when questioned by ASIC. 187The evidence of Mr Seaton does not dispel the reasonable doubt. He could not recall (see par [148]) what was shown to the applicant. 188The information in particular (f) of MFI 4 said to be possessed by the applicant, was information of a precise kind. It did not emerge obviously from either the Arrow valuation slide or the QGC valuation slide. It required some analysis of the slides to adduce that information. The information was specifically related to share price. There was nothing in the evidence in chief of Mr Thompson which even remotely referred to that topic. When he said that Mr Seaton "spoke to" the slides, there was no further evidence as to what was said other than "QGC looked like a better opportunity than Arrow". There was no elaboration as to the basis for that observation. Such an observation could refer to a number of considerations besides share price and the undervalue of the QGC share price. 189That deficiency in the evidence was not overcome by the contextual evidence of the email from Mr Maxwell which set out the purpose of the meeting. 190By reference to the evidence of Mr Thompson in chief and the contextual evidence, a jury could not be satisfied beyond reasonable doubt that any discussion of the share price of Arrow and QGC took place, let alone a discussion which included a conclusion that the share price of QGC was significantly undervalued. When one adds to that equation the absence of any confirmatory evidence from Mr Seaton, and the unexplained discrepancy between the evidence at trial and the statement made under oath by Mr Thompson to ASIC over three and a half years before, the difficulty in the jury drawing the necessary inference beyond reasonable doubt was compounded. 191This does not end the matter. It is necessary to consider the point taken by the Crown on appeal that in accordance with her Honour's direction in relation to element 3 of the offence, a failure to prove that the applicant possessed the information in particular (f) did not affect proof of the offence, provided the jury considered that the particular (f) information "made no real difference". That argument depends upon the Crown establishing two matters: first, that it was open to the jury to decide for themselves whether the particular (f) information made no real difference and that the remaining information in MFI 4, absent particular (f), was sufficient in a price sensitive way to establish the offence. 192In considering the first matter, it was the position of the Crown on appeal that the effect of her Honour's summing up and written direction as to element 3 of the offence was that the significance of any discrete part of the information in MFI 4 was a question of fact for the jury. In my opinion, that proposition is too broadly stated. 193The direction by the trial judge which was not disputed by the parties was: "The test is whether the accused possessed the substance of that information taken as a whole or in combination except any part of the information that you consider makes no real difference." 194The submission by the Crown fails to consider the subject matter of the "proviso", i.e. makes no real difference to what. This can only be a reference to "that information" which is the charged information. It cannot refer to a difference to "materiality". Something is either material or it is not. The question was whether it made a difference to the substance of the information as charged, to omit particular (f). 195Particular (f) added a significant consideration which was not elsewhere dealt with in MFI 4 and it was directly related to the asserted unlawful purpose of the decision to acquire the shares in QGC. It would not only be unrealistic for the jury to have ignored or left out of consideration particular (f), it would have been unreasonable. In other words, it would have been quite unreasonable for the jury to have concluded that the information in particular (f) made no real difference to the substance of the information in MFI 4. As was submitted by the applicant, it was the information in particular (f) which tied the other particulars together to bring about the conclusion in particular (i). 196In oral submissions, the applicant put the proposition in this way: "That's why one can say that the proviso ... is something which tells the jury to contemplate whether the omission of an item would make any real difference to the substance of ... the charged information. The charged information is and is only that which is found in the particulars, that's why the metaphor pathway really doesn't help. It's not something that you can step on or off as you please so long as you get to the destination, it is the definition of the destination." (AT 66.28) 197That still leaves for consideration the second matter, i.e. the Crown's submission that even without particular (f) the remaining information in MFI 4 was sufficient in itself to establish the necessary qualities which the information as a whole was required to have in order for the subject counts to be sustained. In that regard, it is important to note that no submission was made at trial by either side to the effect that the information in particular (f) was such as would make no real difference if it were omitted from the particulars of information in MFI 4. While it was argued by the applicant at trial that possession of the information in particular (f) had not been established against him, the Crown case at trial was always that the applicant was in possession of the substance of the whole of the information in MFI 4. 198The problem for the Crown is that this proposition which was put for the first time on appeal was never in terms put to the jury at trial. The jury was never asked to consider whether the information in MFI 4, without that contained in particular (f), had the quality which the information as a whole was required to have in order to substantiate counts 3 and 4. There is a certain unreality in this proposition being raised by the Crown for the first time on appeal. In any event, the proposition should be rejected. 199The particular (f) information made a real difference to the substance of the information as charged. The share price value comparison in (f) gave the more general information in MFI 4 a particular focus. It gave to the other information in MFI 4 a real commercial flavour. It converted general information as to CSG and its reserves in Queensland being valuable into a particular focus upon QGC shares, their undervalue and the implicit advantage in acquiring them before the true value was realised. That was in the context of identifying the "Queensland opportunity" and the likelihood of entering into some relationship with QGC. 200The case put by the Crown on appeal to the effect that in the absence of the particular (f) information, the remaining information in MFI 4 was sufficient to establish counts 3 and 4, significantly departed from the way in which the case was run at trial. It was not open to the Crown on appeal to make out another case, different to that put at trial, as to matters which might be material. The question remained that posed by the trial judge "whether the accused possessed the substance of that information taken as a whole or in combination except any part of the information that you consider makes no real difference". For the reasons indicated, that referred to MFI 4 and included the particular (f) information. That is a very different inquiry to one which says "can you put together some other combination of information drawing on parts of MFI 4 which might satisfy the counts which have been charged". 201It is a fundamental proposition that an accused is entitled to know the case against him or her. Here it was that the information in MFI 4 was in his possession and that it was material. In such circumstances, the accused was entitled to give evidence that he did not have part of the information in MFI 4 and that the information which he did not have was of real importance. The accused did not have to answer permutations of other information not included in MFI 4. 202This was the effect of the Crown submission at [168 - 169] hereof. There, the Crown submitted that absent the particular (f) information, the remaining information in MFI 4 was to the effect that the "monolithic BG" was to enter into a co-operative arrangement or relationship with the "diminutive QGC" and that that of itself would be sufficient to permit a conclusion as to materiality and inside information. 203Even if it were open to the Crown to put this submission on appeal, the submission is not made out. The Crown relied upon the meeting between the applicant and Mr Maxwell in Singapore on 27 November, together with the sequence of events preceding and following the meeting, to provide the factual basis for the submission. Even though "Project Honey" was in contemplation at this time, it was not put by the Crown that the applicant knew what "Project Honey" meant before the QGC shares were acquired. The evidence from Mr Maxwell at trial as to what was said at the dinner was very general. It was also somewhat undermined by its inconsistency with what he said to ASIC in December 2008. In December 2008 he denied any recollection of what was said. 204The emails to which the Court was taken between Mr Maxwell and the applicant following the meeting were also expressed in general terms. Significantly, nowhere do those emails show QGC as having been singled out as a target for some kind of co-operative arrangement or relationship. On the contrary, the emails start with the four target companies (AB 1, p 289) and there was nothing in the subsequent emails to show that QGC had in any way been singled out. Arrow was not put forward as the least attractive of the four companies but was put forward as one of the four. There was nothing in the emails to show that any one of the four companies had been discarded. 205The emails and internal documents of BG at this time, i.e. up to and including 2 December 2007, made it clear that insofar as Mr Maxwell and the team were concerned they were in the "create phase" to use the terminology current within BG. It was common ground that the "create phase" was the first phase of the five phases which had to be completed before a project was entered into. Each one of those phases required the persuasion and approval of the relevant decision makers within BG. Mr Maxwell was not a relevant decision maker. 206It follows that the factual basis for the Crown's alternative submission on the appeal, if the information in particular (f) was disregarded, has not been made out. Ground of Appeal 3 207In the course of argument on the appeal, the Crown accepted that if the Court found that the applicant did not possess the information in particular (f) of MFI 4 at the time when the QGC shares were acquired it would be difficult for the Crown to rely upon the evidence of Mr Dreyfus. This is because the opinion of Mr Dreyfus was based upon possession of the whole of the information in MFI 4 without any differentiation. 208That, however, does not end the matter. As the parties accepted, the question of materiality must be measured against both reasonableness and some knowledge of the market. The reasonableness test was one well within the province of the jury and did not necessarily need to be based on expert evidence such as that of Mr Dreyfus. This is despite the fact that the statute refers to "persons who commonly acquire Division 3 financial products" which requires the reasonableness test to be applied by reference to a reasonable person armed with some knowledge of matters likely to influence the trading decisions of such persons. The parties accepted that this was an issue which drew in part upon matters of common sense but which could also be the subject of specialised knowledge. 209In this case, I have found that the applicant did not possess the information in particular (f). The question is therefore whether it was open to the jury to find materiality by reference to matters of common sense. 210Reliance upon common sense alone without some expert evidence would create a very difficult task for the jury on the facts of this case. There were two significant confounding considerations militating against a finding of materiality. The first was that the material extracted by the applicant from Exhibit 4 made it clear that the fact that QGC was undervalued was known by some in the market and had been published in articles which were readily available to the public. It was also generally known that BG was interested in and was making inquiries about, an involvement in CSG production in Queensland. In those circumstances, a reasonable person would not have expected that information to have a material effect on the price or value of the QGC shares. This is particularly so if the particular (f) information was not taken into account. 211The second consideration is the very general nature of the information in MFI 4, especially when particular (f) is left out of the account. Much more would need to be known about BG's intentions in relation to CSG in Queensland. MFI 4, absent particular (f), does no more than to indicate such an interest. The evidence in relation to that interest showed that four CSG companies were under consideration. This was not one of those cases where the intention of a large company such as BG towards a smaller company such as QGC was so clear that an inference based on common sense could be drawn. 212None of the information in MFI 4 was directed to the terms of any possible relationship between BG and QGC or any of the other three companies. It is difficult to identify anything in the information in MFI 4 absent particular (f), which would influence, or be likely to influence relevantly, the decision to acquire securities in QGC. For that circumstance to exist, one would need to have some knowledge of the nature of the proposed arrangement and its terms. 213It follows that I am left with a reasonable doubt that if the information in MFI 4 (absent particular (f)) were generally available, a reasonable person would expect it to have a material effect on the price or value of QGC shares or would be likely to influence persons who commonly acquire such shares in deciding whether or not to do so in the case of QGC. That being a doubt which I have, the jury should have had the same doubt. This is not a doubt which can be resolved by the jury's advantage in seeing and hearing the evidence. 214The fact that the QGC share price increased after the announcement in February 2008 does not remove the doubt which I have. This is because of the more or less contemporaneous announcement of substantial additional gas reserves held by QGC and because the terms of the arrangement between BG and QGC were known at that time, rather than being in the inchoate state which they were in on 2 December. The submissions of the applicant at [159] - [160] hereof are compelling. 215It is for these reasons that the Court made the orders which it did on 17 July 2013 (see par [6] hereof). 216SCHMIDT J: I agree with Hoeben CJ at CL. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 November 2013