Court of Criminal Appeal Supreme Court New South Wales

• Medium Neutral Citation: DSJ v R; NS v R [2012] NSWCCA 9
• Hearing dates: 5 October 2011
• Decision date: 17 February 2012
• Before: Bathurst CJ at [1]; Allsop P at [11]; Whealy JA at [12]; McClellan CJ at CL at [135]; McCallum J at [136]

Decision

1. Appeal allowed.

2. Order made by Hall J on 23 August 2011 dismissing the applications that the charges in the indictment, other than charges 6-9, be tried separately, be set aside.

3. The motions are referred back to the trial Judge for reconsideration in the light of this Court's rulings.

• Catchwords: EVIDENCE - admissibility - coincidence evidence - s 98 Evidence Act 1995 (Cth) - significant probative value - whether regard must be had to alternative inferences inconsistent with guilt - whether R v Zhang was correctly decided - distinction between judge and jury functions in a criminal trial.; CRIMINAL LAW - appeal - pre-trial order - insider trading - s 1043A(1) Corporations Act 2001 (Cth)
• Legislation Cited: - Corporations Act 2001 (Cth) - ss 1043A(1)(c), (d); - Criminal Procedure Act 1986 (NSW) - s 21; - Evidence Act 1977 (Qld); - Evidence Act 1995 (NSW) - ss 55, 56, 97, 98, 101, 135, 137; - Queensland Criminal Code
• Cases Cited: - DAO v R [2011] HCATrans 298; - DAO v R [2011] NSWCCA 63; (2011) 278 ALR 765; - Dasreef Pty Ltd v Hawchar [2011] HCA 21; - Director of Public Prosecutions (UK) v Boardman [1975] AC 421; - Gardiner v R [2006] NSWCCA 190; (2006) 162 A Crim R 233; - Hoch v The Queen [1988] HCA 50; (1988) 165 CLR 292; - House v The King (1936) 55 CLR 499; - Lodhi v R [2007] NSWCCA 360; - Markby v The Queen [1978] HCA 29; (1978) 140 CLR 108; - Papakosmas v The Queen (1999) 196 CLR 297; - Pfennig v R (1995) 182 CLR 461; 127 ALR 99; - Phillips v The Queen (2006) 225 CLR 303; [2006] HCA 4; - R v Ceissman [2010] NSWCCA 50; - R v Cook [2004] NSWCCA 52; - R v Fletcher (2005) 156 A Crim R 308; - R v Lockyer (1996) 89 A Crim R 457; - R v Mundine [2008] NSWCCA 55; - R v Shamouil [2006] NSWCCA 112; (2006) 66 NSWLR 228; - R v Zhang [2005] NSWCCA 437, 158 A Crim R 504; - Samadi and Djait v Regina [2008] NSWCCA 330; - Smith v The Queen (2001) 206 CLR 650; - Sutton v R [1984] HCA 5; (1984) 152 CLR 528; - Warren v Coombes (1979) 142 CLR 531
• Category: Principal judgment
• Parties: CCA 2010/34654 (DSJ v R); Appellant - DSJ; Respondent - Commonwealth Director of Public Prosecutions; CCA 2010/40493 (NS v R); Appellant - NS; Respondent - Commonwealth Director of Public Prosecutions
• Representation: Counsel: CCA 2010/34654 (DSJ v R); Appellant - Mr RG McHugh SC; Respondent - Mr P Hastings QC; CCA 2010/40493 (NS v R); Appellant - Mr SJ Odgers SC; Respondent - Mr P Hastings QC; Solicitors: CCA 2010/34654 (DSJ v R); Appellant - Speed and Stracey Lawyers; Respondent - Commonwealth Director of Public Prosecutions; CCA 2010/40493 (NS v R); Appellant - Johnson Winter & Slattery; Respondent - Commonwealth Director of Public Prosecutions
• File Number(s): CCA 2010/34654; CCA 2010/40493

Decision under appeal

• Citation: [2011] NSWSC 894
• Date of Decision: 2011-08-23 00:00:00
• Before: Hall J.
• File Number(s): 2010/034654; 2010/040493

Judgment

1 BATHURST CJ: I agree with the orders proposed by Whealy JA and with his Honour's reasons, and make the following additional comments.

2 Subsection s 98(1) of the Evidence Act 1995 (NSW) provides as follows:

"98(1) Evidence that 2 or more events occurred is not admissible to prove that a person did a particular act or had a particular state of mind on the basis that, having regard to any similarities in the events or the circumstances in which they occurred, or any similarities in both the events and the circumstances in which they occurred, it is improbable that the events occurred coincidentally unless:

(a) the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party's intention to adduce the evidence, and

(b) the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value."

3 Whilst probative value is defined in the dictionary to the Act in the following terms:

"probative value of evidence means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue."

4 I have set out the relevant provisions of the Act because the issues raised in the appeal depend upon the application of its requirements: cf Dasreef Pty Ltd v Hawchar [2011] HCA 21 at [37].

5 There are a number of matters that should be noted about s 98(1).

6 First, its provisions will only fall for consideration if the evidence in question is relevant. That is in terms of s 55 of the Act it could rationally affect the probability of the existence of a fact in issue.

7 Second, it requires the Court to form a view, "think", that the evidence had significant probative value, that is, that the evidence could rationally affect the assessment of the probability of the existence of a fact in issue to a significant extent.

8 Third, it follows from the use of the word could in the definition of significant probative value that what the Court is required to assess is the possibility of the evidence affecting the assessment of the probability of the existence of a fact in issue. It is not required to assess whether the evidence would have this effect, that is, engage in a fact-finding exercise involving an assessment of the reliability and credibility of the evidence: cf R v Shamouil [2006] NSWCCA 112; (2006) 66 NSWLR 226 at [59]-[67].

9 Fourth, the matters to which the Court is to have regard in performing this task is the evidence sought to be adduced either on its own or having regard to other evidence adduced or to be adduced by the party seeking to tender it. In particular, regard is not to be had to evidence either adduced or to be adduced by the other party to the proceedings. This also demonstrates, in my opinion, that it is no part of the Court's task to engage in a fact-finding exercise to determine the reliability or credibility of the evidence, or to form a view one way or the other whether the jury would in fact find the evidence to be of significant probative value.

10 However, as Whealy JA has pointed out (at [78]-[81]), the trial judge in forming a view as to whether the evidence has significant probative value must consider by reference to the evidence itself or other evidence adduced or to be adduced by the party tendering it, whether there is a real possibility of an alternate explanation inconsistent with (in this case) the guilt of the party against whom it is tendered. This is because the availability of such an alternative hypothesis will be relevant to forming the view required by the section that the evidence has significant probative value. However, this does not involve either undertaking the fact-finding analysis suggested by senior counsel for DSJ or reaching a conclusion that the explanation for the coincidence proffered by the party seeking to tender the evidence was more probable than an alternative hypothesis. Each of these approaches go beyond what is required by the terms of s 98(1)(b) of the Act and would involve the judge usurping the fact-finding role of the jury.

11 ALLSOP P: I have read the reasons of Whealy JA. Subject to the following, I agree with his reasons. I agree with the orders proposed. I appreciate the reasons for, and importance of, the reconciliation of my reasons in DAO v R ([2011] NSWCCA 63; (2011) 278 ALR 765) with those of Simpson J in R v Zhang [2005] NSWCCA 437, 158 A Crim R 504. I accept his reconciliation of our views. It is important, as Whealy JA recognises, that there be no misunderstanding about the task of the judge. It is his or her task to assess the capacity of the evidence in the manner described by Whealy JA, not to assess what a jury will do. I also agree with the additional comments of the Chief Justice.

12 WHEALY JA: On 9 September 2011, the Court of Criminal Appeal (Allsop P, Kirby and McCallum JJ) granted leave to appeal to DSJ and NS against a pre-trial order made by Hall J on 23 August 2011 dismissing their application to have a number of the charges in the indictment presented against them tried separately.

13 The two men had been charged with insider trading offences under the Corporations Act 2001 (Cth) (the Act). DSJ was charged with 10 counts pursuant to s 1043A(1)(d) of the Act. NS was charged with 10 counts pursuant to s 1043A(1)(c). In essence, the charges against DSJ alleged that he was an insider, that he possessed inside information, and that, contrary to the legislation, he procured NS to apply for, acquire or dispose of relevant products being shares or securities. The charges against NS allege that he had possession of the insider information given him by DSJ and that he intentionally acquired the financial products particularised in the indictment. The products were either shares or activity in relation to seven listed companies.

14 In shorthand terms, the Crown case was described in its early submissions as follows:

There was a scheme in place whereby NSJ would obtain inside or confidential information through the opportunity afforded by his employment at Moody's. He would then pass it on to his trusted friend NS, whom he had recruited to purchase shares - securities in the circumstances pleaded. Each of the counts in the indictment represents an instance of the scheme in action. The fact that 10 separate charges have been laid against each accused ought not to distract from what is the central allegation of the Crown and that is that there was a scheme in place whereby NSJ would pass the relevant information onto his recruit, NS, in the circumstances alleged in the charges. The Crown case is circumstantial. It is the Crown case that taken together, each pair of charges represents the scheme in action.

15 It was the Crown's intention to lead coincidence evidence at the trial. It sought to do so on the basis that the evidence relating to each individual count in the indictment should be admitted and available as evidence in respect of each other count. The Crown had served a notice of coincidence evidence on 25 February 2011. This expressly stated that the evidence was to be adduced for the purpose of establishing that each of the accused did the acts alleged against him in the indictment and that each had the required state of mind on the basis that, having regard to the similarity of the events, it was improbable that the events occurred coincidently. This course was necessary because of the coincidence rule provisions in s 98 of the Evidence Act 1995 (NSW).

16 Each accused filed a notice of motion on 11 March 2011 seeking, in effect, orders that the question of admissibility of the Crown's coincidence evidence be determined in advance of the trial, and that an order be made that it ought not be admitted. Further, an order was sought pursuant to s 21 of the Criminal Procedure Act 1986 (NSW), that the charges in the indictment (other than charges 6-9) be tried separately.

17 It was accepted during the pre-trial hearing that the separate trial issue was interdependent upon the coincidence evidence issue. In other words, it was accepted that the question of the severance of the counts essentially turned upon whether the Crown should be permitted, in relation to each individual count, to rely upon the evidence it sought to tender in proof of each other count and vice versa. This, in turn, depended on whether the coincidence evidence was admissible. The applicants sought to fragment the trial in the sense that they sought orders that there should be a joint trial of the two accused but limited to the counts relating to each of the individual entities in which securities were traded. For example, counts 1 and 11, it was submitted, should be heard separately from counts 2 and 12 and so on.

18 In its original submissions before Hall J, the purpose of the coincidence notice (in relation to DSJ) was stated by the Crown to be as follows:

The evidence of the two or more related events is to be tendered to prove DSJ did the particular acts alleged in each of counts 1-10 in the indictment, namely, that he procured NS to acquire the relevant ... financial products identified in each count in the indictment. The evidence of the two or more related events is also to be tendered to prove that DSJ had a particular state of mind, namely, that at the time he procured NS to acquire the relevant ... financial products ... he acted intentionally and was in possession of the inside information as particularised ...

Conversely, the Crown submits that the evidence will rebut any suggestion that the contacts between DSJ and NS were merely coincidental.

19 A similar submission was made in relation to NS, his acts being the acquisition of the relevant financial products, and his state of mind being that he acted intentionally and was in possession of the inside information. Once again the Crown submitted that, in each case against NS, the evidence would rebut any suggestion that the contact between the two men was merely coincidental.

20 The substance of the coincidence evidence against each accused was set out in a document described as "Table A" of the Crown's Coincidence Notice. The combined course of conduct, alleged to have been an intended course of conduct, was compartmentalised into seven "events" as follows:

(1) The receipt by Moody's of information from or concerning seven corporate entities the subject of the charges, being "inside information".

(2) DSJ's direct receipt of inside information in some instances and indirect receipt of information in others.

(3) Telephone communications between DSJ and NS by which the Crown alleged that the former communicated inside information to the latter, thereby procuring NS to trade while in possession of the inside information.

(4) NS's acquisition of the financial products in the seven entities whilst in possession of the inside information.

(5) An announcement made to the market or an event occurred that pre-empted the transaction.

(6) NS's trading out of his position in the seven entities.

(7) DSJ's significant surveillance of the share price in the entities traded in by NS, usually on CommSec, throughout the material time.

The hearing before the trial Judge

21 The hearing of the pre-trial application turned into something of a marathon. It extended over some five days before the trial Judge and required him to assimilate very extensive written submissions. On 17 August 2011 his Honour ruled that the evidence particularised in the Table to the notice of coincidence evidence, being Table A, was admissible pursuant to s 98(1)(b) of the Evidence Act 1995. On 23 August 2011, mindful of the fact that the parties wished to appeal his decision but that such an appeal depended upon there having been "an interlocutory judgment or order"; Hall J made an order in the following terms:

The applications by the accused in their respective notices of motion filed on 11 March 2011 for an order pursuant to s 21 of the Criminal Procedure Act 1986 that the charges in the indictment, other than charges 6-9, be tried separately, is dismissed.

22 Hall J noted the position of the parties before him, in that they had proceeded on the basis that the admissibility of evidence question had been understood as essentially determining the application for the orders for a separate trial of particular counts.

The leave application

23 As I have previously indicated, leave to appeal was granted on 9 September 2011. There were a number of matters argued on the leave application. However, leave was granted on a limited basis. The decision of the Court was given by Allsop P (with whom Kirby and McCallum JJ agreed) in these terms:

The approach to s 98 by his Honour is one in respect of which, in my view, leave should be given. The matter is an important one to the operation of a provision relating to many aspects of the operation of both the criminal law and the civil law and the arguments raised are real, and without expressing any view one way or the other as to the correctness of his Honour's views, in my view, it is appropriate that leave be granted in relation to the interpretation and application of s 98.

24 Allsop P indicated that the leave granted should be limited to the ground of Hall J's approach to the interpretation and application of s 98 and, to the extent that that fed through, to the operation of s 101 in both matters.

Submissions on appeal

25 The written submissions in this Court are, as they were before the trial Judge, very lengthy. Moreover, Mr McHugh SC for DSJ and Mr Odgers SC for NS have markedly different approaches to the interpretation of s 98. There is, of course, an element of overlap but Mr Odgers' submissions suggest a more radical approach to the interpretation of s 98. The submissions, however, may be substantially distilled into a number of discrete propositions. I shall turn to Mr Odgers' submissions first.

26 Mr Odgers argued that the trial Judge had made the following errors of principle:

(a) The trial Judge erred in following the holding of Simpson J (Buddin J agreeing) in R v Zhang [2005] NSWCCA 437, 158 A Crim R 504 at [139] that a trial Judge, in applying the test of significant probative value in s 98 is "to evaluate in the light of any evidence already adduced, and evidence that is anticipated, the likelihood that the jury would assign the evidence significant (in the sense explained by Hunt CJ at CL in R v Lockyer (1996) 89 A Crim R 457) probative value".

(b) The trial Judge erred at [64] in holding that there is no requirement for the purpose of a ruling on admissibility under s 98 "to determine the existence and weight to be given to inferences that may be considered as alternative or inconsistent with those relied upon by the Crown by analysing parts or segments of evidence in a circumstantial evidence case".

(c) The trial Judge erred at [206] in rejecting a submission made on behalf of NS that a determination whether coincidence evidence has "significant probative value" for the purpose of s 98(1)(b) requires the Court to "evaluate whether it could rationally be concluded that the probability of the inference the Crown seeks to draw is significantly greater than the probability of an inference inconsistent with that fact".

27 Mr McHugh, as I have indicated, pursued a more conservative approach. Mr McHugh's first submission was that the trial Judge in making the assessment required under s 98, ought to have taken into account the possibility of alternative inferences arising from the evidence. This proposition suggested that the Court's task, if Zhang were correctly decided, was to take the evidence at its highest and then form its own view about the strength of the probative value of the evidence. Secondly, Mr McHugh took this proposition a step further by suggesting that the task required of the Court was to make its own comparative assessment of the probabilities or, put differently, to determine the relative strength of the alternative theories to assess whether the Crown theory had significant value. In this regard, it was necessary to take into account the availability and strength of inferences to be found in the Crown evidence other than those sought to be relied on by the Crown. Senior counsel submitted that the trial Judge had fallen into error in that he eschewed altogether any consideration or proper assessment of the probability of alternative theories. He had to weigh up the Crown's theory, examine the alternative theories, and ask himself - what are the probabilities? He had erroneously determined that this last step was unnecessary.

28 Subject to one qualification, Mr McHugh did not submit that Zhang was wrongly decided but rather that Hall J had not appropriately applied it to the circumstances of the present case. The qualification was this: if Simpson J's decision, when correctly construed, abrogated the obligation of the Judge to make the relevant assessment in favour of the jury, it was to that extent incorrect.

The Crown response

29 In its written submissions, the Crown agreed with the submissions of the appellant, DSJ, that the evaluation as to whether there is significant probative value in coincidence evidence involved a relative concept. It did not agree, however, with the proposition that "the internal coherence of the Crown theory had to be assessed relative to other available theories". In other words, as I understood the Crown's submission, it did not agree that the trial Court's task was to make its own assessment of the probabilities of the Crown theory and, by way of contrast, the probabilities of any alternative theory. The Crown submitted that the exercise involved a qualitative assessment requiring an examination of the capacity of the evidence to establish the fact or facts in issue. It did not, however, involve a process of comparison with other available theories, except in order to test the cogency of the hypothesis upon which the prosecution relied to justify the admission of the evidence. (This last proposition, it might be observed, had not been advanced by the then Crown prosecutor before the trial Judge).

30 Secondly, the Crown submitted that Zhang , when read fairly, had been correctly decided. It was, in fact, supported by other authorities in this Court, for example, Gardiner v R [2006] NSWCCA 190; (2006) 162 A Crim R 233; R v Ceissman [2010] NSWCCA 50 at [16]-[17]). The Crown recognised that other judicial pronouncements have emphasised that it is the task of the Judge to consider whether the evidence will have significant probative value (Basten JA in Zhang at [46] and Allsop P in DAO [2011] NSWCCA 63 at [98]-[100]. The Crown accepted that, while some minor criticism might be made of Simpson J's formulation, overall it should be regarded as an appropriate and practical contraction of the test under s 98. The Crown argued that it was clear that Simpson J intended that the requisite task should be that of the Judge in every respect.

31 The Crown took issue with Mr Odgers' submissions. It argued that the test propounded on behalf of NS required, in effect, the trial Judge to usurp the function of the jury ( R v Shamouil [2006] NSWCCA 112; (2006) 66 NSWLR 228 per Spigelman CJ at [64]). In general terms, the Crown submitted that the submissions of both appellants, in the ultimate, advocated a contention that the Judge was required to choose between competing hypotheses. This, however, was the task entrusted to the jury.

32 Finally, the Crown argued that, notwithstanding what had been said by the trial Judge at [64], that particular statement, together with the extensive review of the arguments advanced by the appellants concerning the probative value of the evidence, indicated that the trial Judge had properly discharged the obligation required by s 98 of evaluating the extent of the probative value of the evidence and predicting its capacity, in terms of its likely ultimate effect, in establishing proof of the facts in issue. The Crown argued that the coincidence evidence here had the capacity to show a particular kind of collusion between the two men in relation to NS's trading. This was fundamental to the prosecution case, not only because of the allegation of a scheme or joint venture between them, but also because it was necessary for the Crown to demonstrate that DSJ had procured NS to acquire the financial products. The evidence, it was argued, was clearly capable of establishing a pattern of NS purchasing securities but only in corporations currently dealing with Moody's. It was capable of demonstrating close interaction between the two men at the time of the acquisition and disposal of those particular securities. In relation to each individual charge, the Crown argued that it must be highly probative to adduce evidence of the other occasions when precisely the same thing happened, or where interactive behaviour of the same kind was apparent.

Facts in issue

33 Before endeavouring to resolve the issues between the parties, it may be helpful to identify the nature of the facts in issue. The trial, of course, is at a preliminary stage. It will be many months before a jury is empanelled and no evidence will be taken until after the Crown opening has concluded. Nevertheless, the Crown case statement is both voluminous and detailed. Similarly, the coincidence notices are extremely detailed. The appendix to the trial Judge's decision in the present matter is nearly 60 pages in length and contains over 350 paragraphs involving a careful analysis of the preliminary arguments of the parties in relation to each share and security transaction. Both before the trial Judge and this Court, written and oral submissions in relation to these various transactions, including submissions as to the existence of inside information, the nature of the contacts between the two men and whether the information was, in any event, in the public domain, extend to more than 50 pages.

34 Each appellant has pleaded not guilty to the charges in the indictment. Apart from the plea, neither appellant has indicated at this stage the precise nature of any defence that may be raised or the case sought to be raised on his behalf. For the purpose of the arguments before the trial Judge (and before this Court) NS raised a hypothetical alternative theory that may or may not be raised in the trial. This is the proposition that NS may have simply been "tipped off" by DSJ but did not receive the insider information in relation to any trade. If a jury were to accept that as a reasonable possibility, it would mean that NS would be found not guilty of the present charges. Mr Odgers was careful to indicate that this would not necessarily be his case at trial and that he did not wish to be bound by any such proposition at this stage. It was, he argued, simply an alternative hypothesis that might properly be seen as a possible explanation consistent with innocence.

35 Mr McHugh has also argued that a number of alternative hypotheses could possibly arise based on the evidence to be tendered by the Crown. Each of these may (and probably will) be relied on at trial. Mr McHugh, however, as I have said, has not raised any precise or specific defence at this preliminary stage.

36 The possible hypotheses advanced by Mr McHugh (when prompted by this Court) may be summarised as follows:

Moody's had knowledge of and information about a vast number of companies;

DSJ was not always, on the evidence, in a position to acquire inside information in relation to a number of the charges;

Some of the information, in any event, was already in the public arena;

The men were very close friends with an interest in the stock market. There were many communications between them in the relevant period of time, many more than could be related to the charges. NS was, in any event, possibly a speculator in his own right.

37 The Crown responded to these arguments by suggesting that the evidence would show a pattern of NS commencing trading "out of the blue" as it were. The overall trading activity was within a relatively brief period of time. According to the Crown, the evidence would show NS purchasing shares at first, and then far more adventurous securities, but always in companies currently dealing with Moody's. It would show a very close and constant interaction between the two men at the time of both the acquisition and disposal of the securities. It would also show a plethora of occasions when DSJ was involved in checking share price movements for these securities, far more than his employment required. In the arguments before the trial Judge (and before this Court) those matters were said to have the capacity to impact sharply upon the arguments as to the significance of the coincidence evidence. Indeed, these were the very matters that led the trial Judge to the firm conclusion he reached as to the significant probative value of the coincidence evidence.

38 In the light of all these matters, it may be said that, so far as can be seen at present, the facts in issue for the purpose of the trial are as follows:

(a) Did DSJ possess inside information as alleged?

(b) Did DSJ communicate that information to NS?

(c) Did DSJ procure NS to acquire division 3 financial products?

(d) Did NS, whilst in possession of the inside information, acquire the division 3 financial products as alleged by the Crown.

39 There is no issue that NS acquired the products. But what is very much in issue is whether he did so whilst in possession of the inside information. More broadly, the issue at trial is whether there was an unlawful arrangement or enterprise between the two men that is encapsulated in and by the facts in issue as I have described them. Moreover, it is apparent from the facts in issue that the appellants will raise an argument, if the evidence be allowed, that any similarities in the situation of the communications, possession of inside information and acquisition of the products was and is entirely a matter of coincidence.

Resolution

40 It is first useful to set out the coincidence rule in s 98 of the Evidence Act :

(1) Evidence that 2 or more events occurred is not admissible to prove that a person did a particular act or had a particular state of mind on the basis that, having regard to any similarities in the events or the circumstances in which they occurred, or any similarities in both the events and the circumstances in which they occurred, it is improbable that the events occurred coincidentally unless:

(a) the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party's intention to adduce the evidence, and

(b) the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.

(2) Subsection (1)(a) does not apply if:

(a) the evidence is adduced in accordance with any directions made by the court under section 100, or

(b) the evidence is adduced to explain or contradict coincidence evidence adduced by another party.

41 Section 101 also applies. It provides:

(1) This section only applies in a criminal proceeding and so applies in addition to sections 97 and 98.

(2) Tendency evidence about a defendant, or coincidence evidence about a defendant, that is adduced by the prosecution cannot be used against the defendant unless the probative value of the evidence substantially outweighs any prejudicial effect it may have on the defendant.

(3) This section does not apply to tendency evidence that the prosecution adduces to explain or contradict tendency evidence adduced by the defendant.

(4) This section does not apply to coincidence evidence that the prosecution adduces to explain or contradict coincidence evidence adduced by the defendant.

42 The term 'probative value' is defined in the Dictionary of the Act to mean:

"The extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue."

43 It is necessary, I think, to make a preliminary observation about s 98 in the context of the present trial. It can be seen from the history of the matter that the Crown wished to adduce the relevant body of evidence in the trial as coincidence evidence. The "events" referred to in the notice related to the conduct and state of mind of each of the appellants. It was the Crown's purpose in relying upon the coincidence notice to overcome the coincidence rule. If achieved, this would enable the Crown to argue, upon the admission of the evidence at trial, that it was improbable that the events relied upon had "occurred coincidentally". It would also enable the Crown to meet a defence based on coincidence. These were, no doubt, the primary objects of the exercise. There was, however, an undoubted secondary purpose. Success in the application would secure for the Crown the ability to have the evidence in each count available for use on each of the other counts. That, in turn, would have provided a proper basis for the continuance of a joint trial in the broadest sense.

44 Equally, from the defence point of view, it was clearly imperative, if it could be achieved, to prevent the Crown from relying on the coincidence evidence. In that sense, it was also important, if possible, to succeed in severing the counts. A separate trial on the counts in the indictment was no doubt perceived to be a perfectly legitimate tactic in fragmenting the broader aspects of the Crown case and thereby limited the prospect of forensic damage. Hence the motion before the trial Judge.

45 Against this background, I turn to discuss s 98 itself. This section (together with s 101) may be seen as the statutory replacement of the common law treatment of similar fact evidence. At common law, evidence of other criminal conduct of an accused was admissible if the objective improbability of its having an innocent explanation was such that there was no reasonable view of it other than as supporting an inference that the accused was guilty of the offence charged: Pfennig v R (1995) 182 CLR 461; 127 ALR 99. In that case it was held that "striking similarity", "underlying unity" and such other descriptions used to explain relevant similar facts were not essential to the admission of such evidence, although usually the evidence would lack the requisite probative force if it did not possess those characteristics.

46 In Phillips v The Queen [2006] HCA 4; (2006) 225 CLR 303, the High Court of Australia, in discussion concerning provisions of the Queensland Criminal Code and the Evidence Act 1977 (Qld) referred to certain aspects of the common law tests for the admission of similar fact evidence. At 320-321 [54] the Court made reference to a number of authorities which suggested that there was a fundamental requirement for similar fact evidence to possess a particular level of probative quality. Reference was made, for example, to the Director of Public Prosecutions (UK) v Boardman [1975] AC 421 at 444 per Lord Wilberforce, approved in Markby v The Queen [1978] HCA 29; (1978) 140 CLR 108 at 117 where the admission of similar fact evidence was said to be "exceptional and requires a strong degree of probative force". Reference was also made to Hoch v The Queen [1988] HCA 50; (1988) 165 CLR 292 at 294-295 where the criterion of admissibility for similar fact evidence was said to be "the strength of its probative force". In Boardman , the House of Lords had adopted, as a guiding principle to determine the admissibility of similar fact evidence, the test whether the prejudice to the accused was outweighed by the probative force of the evidence.

47 The present s 98 (as with s 97 dealing with tendency evidence) took its current form as a result of recent amendments to the Evidence Act (Act No 46 of 2007 s 3 and Sch 1). This Act came into operation on 1 January 2009. It refers to "coincidence evidence" as defined in the Dictionary to the Evidence Act . Coincidence evidence means evidence of a kind referred to in s 98(1) that a party seeks to have adduced for the purpose referred to in that subsection. It relates to evidence that is sought to be adduced in both criminal and civil proceedings. It relates to evidence that is sought to be adduced by any party to the proceedings.

48 In its terms, the purpose of the coincidence rule is to render inadmissible similar fact evidence unless prior notice of the use of such evidence has been given, and unless the Court thinks that the evidence either by itself or having regard to other evidence to be adduced by the party seeking to adduce the evidence will have significant probative value.

49 In criminal proceedings, s 101, as has been seen, imposes an additional hurdle to the admission or use of coincidence evidence. The probative value of the evidence must substantially outweigh any prejudicial effect it may have on the defendant.

50 An important cornerstone in the structure of the Evidence Act 1995 is s 55. This deals with the topic of relevant evidence. The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings.

51 Another key section is s 56(1) which provides that, except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in a proceeding. Subsection (2) provides that evidence that is not relevant in the proceeding is not admissible.

52 I have earlier set out the definition of probative value - the extent to which the evidence could rationally affect the assessment of the probability of a fact in issue.

53 As is recognised and stated by the High Court in Smith v The Queen (2001) 206 CLR 650, the first question to be asked when an issue of the present kind arises is whether the evidence is relevant. In the present matter, that the evidence is relevant would hardly be thought to be a matter of contention. However, Mr Odgers SC has queried in his submissions this primary matter. As Gleeson CJ observed in Smith v The Queen , although questions of relevance may raise "nice questions of judgment", no discretion falls to be exercised. Evidence is either relevant or it is not. If the evidence is not relevant, no further question arises about its admissibility. The simple fact is that irrelevant material may not be received. This is a proposition that is fundamental to the law of evidence and well settled.

54 In determining the basic issue of relevance in a criminal trial, it is especially important to identify the ultimate issues. These will ordinarily be expressed in terms of the element of the offence with which the accused stands charged in light of the defence, if known. However, behind these ultimate issues, there will often be many issues about facts that are relevant to facts in issue ( Smith v The Queen at 654; Papakosmas v The Queen (1999) 196 CLR 297 at 307: especially at 312 and 321-322).

55 In my opinion, it is plain that s 98, in its terms, poses this simple question: whether the evidence being considered is capable, to a significant degree, of rationally affecting the assessment (ultimately by a jury) of the probability of the existence of a fact in issue. Again, in its terms, it requires the trial judge to assess whether the evidence has capacity to that extent and for that purpose. In R v Shamouil Spigelman CJ, in examining s 137 of the Evidence Act , pointed out that, by reason of the terminology of the Dictionary definition of "probative value", the focus is on the capacity of the evidence to have the effect mentioned. As the Chief Justice said, "It does not direct attention to what a tribunal of fact is likely to conclude".

56 Assessment of the probative value of the evidence, whether for the purposes of ss 97, 98, 101 or 137 Evidence Act , does not, generally speaking, depend on any assessment of its credibility or reliability: Shamouil At 237 [60]. Nor does it depend upon any prediction of the likelihood that a jury will in fact accept it. The trial Judge considering probative value has to make his own estimate or assessment of probative value predicated upon the assumption that the jury will accept the evidence. See also Lodhi v R [2007] NSWCCA 360 at [174]-[177]; R v Mundine [2008] NSWCCA 55 at [33] where this Court said:

"probative value" is not to be determined by the weight that might be given to any piece of evidence. What is to be considered is the role that that piece of evidence, if accepted , would play in the resolution of a (disputed) fact - or the contribution it might, if accepted , make to that resolution. ... to make the assessment of probative value on the basis of the perceived credibility or reliability of the witness through whom it is given, or perceived weakness in the evidence, would be to attempt to anticipate the weight the jury would attach to it, a task to be undertaken by the jury when all the evidence is complete.

57 A case that is often cited in relation to the requirement that a judge determine whether evidence has "significant probative value" is R v Lockyer (1996) 89 A Crim R 457. This was a decision of Hunt CJ at CL, made in the course of a criminal trial in which he was the presiding Judge. The accused had been charged with the murder of his young daughter. There was no dispute that the child had been seriously physically assaulted and that this had led to her death. The issue in the trial was whether it was the accused who had "bashed" the child. There were only two adults in the premises where the incident occurred at the relevant time. One was the accused and the other was his de facto, Ms Dolan. It was agreed by the Crown that there were only two possible suspects - the accused and Ms Dolan. The defence case was that there was a reasonable possibility that it was Ms Dolan who had injured the child.

58 Unusually, it was the accused who sought to lead tendency evidence under s 97 of the Evidence Act . The proposed tendency evidence was that both the deceased and one of her brothers had previously received injuries in circumstances from which an inference could be drawn that there was a reasonable possibility that Ms Dolan had been responsible for inflicting those injuries. The provisions of s 97 in force at the time provided that such evidence would be inadmissible to prove that a person acted in a particular way if the Court "thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced, have significant probative value". At 459 Hunt CJ at CL said:

The "probative value" of evidence is defined as meaning the extent to which the evidence could rationally affect the assessment of the probability of the existence of the particular fact in issue. The terms of that definition are thus substantially similar to those of the definition of relevance in s 56 ... In other words, the probative value of evidence is the degree of its relevance to the particular fact in issue. There is no definition of "significant" probative value as that phrase is used in s 97. In its context as I have outlined it, however, "significant" probative value must mean something more than mere relevance but something less than a "substantial" degree of relevance. ...

One of the primary meanings of the adjective "significant" is "important", or "of consequence". In my opinion, that is the sense in which it is used in s 97. To some extent, it seems to me, the significance of the probative value of the tendency evidence (whether led by the Crown or by the accused) must depend upon the nature of the fact in issue to which it is relevant and the significance (or importance) which that evidence may have in establishing that fact.

59 His Honour held that the evidence was not excluded by either s 97 or s 135 of the Act and therefore ruled it admissible.

60 It has long been accepted that the approach by Hunt CJ at CL in Lockyer is correct both in relation to s 97 and s 98 (there was no submission made in the present appeal to suggest that Hunt CJ at CL erred in his approach to the construction of the phrase "significant probative value" in s 97. Indeed, counsel for the appellants placed reliance upon it).

61 I turn now to the decision of this Court in R v Zhang . In that case, as will be seen, Simpson J (and the other members of the Court, Basten JA and Buddin J) applied Hunt CJ at CL's reasoning in Lockyer .

62 It appears that Simpson J had earlier analysed the processes by which the tender of tendency evidence under s 97 of the Act was to be determined: R v Fletcher (2005) 156 A Crim R 308 at [32]-[35]. In Zhang , having referred to the earlier decision, her Honour (at [139]; p 573) said:

The analysis is no different in the case of evidence tendered under s 98. The principles are these:

(i) coincidence evidence is not to be admitted if the court thinks that evidence would not, either by itself, or having regard to other evidence already adduced, or anticipated, have significant probative value;

(ii) probative value is the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue (see the Dictionary to the Evidence Act );

(iii) the actual probative value to be assigned to any item of evidence is a question for the tribunal of fact - here, the jury;

(iv) the probative value actually to be assigned to any item of evidence cannot finally be determined until all of the evidence in the case is complete;

(v) the task of the judge in determining whether to admit evidence tendered as coincidence evidence is therefore essentially an evaluative and predictive one. The judge is required, firstly , to determine whether the evidence is capable of rationally affecting the probability of the existence of a fact in issue; secondly (if that determination is affirmative) to evaluate, in the light of any evidence already adduced, and evidence that is anticipated, the likelihood that the jury would assign the evidence significant (in the sense explained by Hunt CJ at CL in Lockyer (1996) 89 A Crim R 457) probative value. If the evaluation results in a conclusion that the jury would be likely to assign the evidence significant probative value, the evidence is admissible. If the assessment is otherwise, s 98 mandates that the evidence is not to be admitted.

63 (It should be noted that at the time the Court considered s 98 in Zhang , the section had been expressed in the terms mentioned in para 58 above. There were other differences as well. Nothing, however, turns on that in relation to the present point under consideration).

64 Buddin J agreed with Simpson J. Basten JA, however, differed from Simpson J in two respects. These were, first, that in examining the decision made by the trial Judge, the appellate Court was obliged to evaluate the evidence on the basis identified in Warren v Coombes (1979) 142 CLR 531 rather than by applying the principles established in House v The King (1936) 55 CLR 499 at 505. Secondly, his Honour took issue with Simpson J's fifth point ("the task of the Judge in determining whether to admit evidence tendered as coincidence evidence etc"). His Honour said:

The decision under s 98 is then said to be a two stage process by which the trial Judge first identifies whether evidence is "capable of" rationally affecting the probability of a fact in issue, and, secondly evaluating the likelihood that the jury would assign the evidence significant probative value. I do not agree with that approach nor do I think it is supported by the judgment of Hunt CJ in CL in Lockyer . ... Evidence has significant probative value if it could have such an effect, to a significant extent. The trial Judge is not required to second-guess the jury: the Judge must make his or her own assessment of probative value for the purposes of s 98.

65 There is no need to say anything further about the first point of disagreement. It is not relevant to this matter and has, in any event, been settled by the decision of this Court (a five Court bench in DAO [2011] NSWCCA 63; (2011) 278 ALR 765; special leave refused in the High Court: DAO [2011] HCATrans 298).

66 As to the second matter, I have reached the conclusion that, broadly speaking, the formulation of the process by Simpson J at [139] does not demonstrate error. In my opinion there is no justification for overruling Zhang or departing in any significant way from the approach advocated by her Honour in relation to s 98. There are, however, some qualifications that need to be stated in that regard.

67 First, it needs to be recalled, as I have mentioned earlier, that s 98 is now expressed in somewhat different terms to the provisions considered by her Honour. The differences need to be factored in, although I do not consider that they impinge on the principal arguments advanced in this appeal. Similarly, it must be borne in mind that Simpson J, no doubt for the benefit of those presiding over trials where tendency and coincidence evidence is likely to arise, was endeavouring to explain in a practical way the process to be undertaken by a trial Judge. Her Honour's formulation of the process was not intended to supplant or replace the language of the section. Thirdly, I accept that the substance of Simpson J's formulation (at [139]) is in truth focused on the evaluation to be performed by the trial Judge, although her language, on one view, might be thought to suggest otherwise.

68 This third point is critical to the debate as to whether Zhang is correctly decided. I shall briefly explain why I have reached the conclusion that the submissions of both Mr Odgers and Mr McHugh in this regard are not to be accepted.

69 Mr Odgers focuses upon her Honour's statement:

"Whether the jury would be likely to assign the evidence significant probative value."

70 Senior counsel argued that this statement is inconsistent with other authorities. A number of decisions were referred to in support of this argument. Three of them, it seems to me, require separate comment.

71 The first is Basten JA's dissenting judgment in Zhang itself. For my part, I do not, with respect, read the language or substance of her Honour's formulation as requiring the trial Judge to "second-guess the jury". Indeed, Simpson J drew a clear distinction between the "actual probative value" of the evidence, the evaluation of which is entrusted to the jury, and the capacity of evidence to rationally affect the probability of the existence of the fact in issue, the evaluation of which falls to be assessed by the Judge. I read the substance of her Honour's formulation as requiring that this distinction be recognised and that the task to be undertaken by s 98 is entirely the task of the trial judge. The phrase used by her Honour ("the Judge is required ... to evaluate ... the likelihood that the jury would assign the evidence significant ... probative value") is unexceptionable if it is intended to convey the meaning that the Judge ask whether a hypothetical jury would be likely to find the evidence of importance or of consequence in coming to a conclusion about the matters in issue in the trial. In my opinion that is the meaning Simpson J intended to convey.

72 As I perceive it, the point being made by her Honour is simply this: if a hypothetical jury would think it unlikely that the evidence were important in relation to the facts in issue then the trial Judge might the more readily conclude that the evidence lacks the capacity required for admissibility. Simpson J's formulation recognises that the trial Judge has no part to play in the evaluation of the actual weight to be given to any of the evidence or to its ultimate assessment. The substance of her Honour's formulation is that the trial Judge is required to take the evidence at its highest, and to determine whether it has the capacity to be of importance or of consequence in establishing the fact in issue. In undertaking that task, the statute also requires, as her Honour recognised, that the evidence may be examined on its own account, or by having regard to other evidence adduced or to be adduced by the tendering party. As I have said, the trial Judge does not make any evaluation of the actual weight of the evidence nor does he or she make any prediction about the weight that will actually be assigned to the evidence by the jury in the trial. As stated in Mundine , what must be assessed is the role that the evidence, if accepted, would play in the resolution of the disputed fact - its capacity to contribute to that resolution.

73 The next matter relied on by Mr Odgers is the statement by Spigelman CJ in R v Shamouil (referred to above at paragraph 55). In my opinion, the reference by the Chief Justice there was to the distinction between the capacity of evidence to establish a fact in issue and the actual impact or weight of the evidence (as assessed) to do so, a very different concept. The expression "likely to conclude" is plainly a reference to the process by which a jury would actually set out to evaluate the evidence and its likely findings in that regard. The Chief Justice's remarks are not inconsistent with the approach taken by Simpson J.

74 The third case of importance referred to by Mr Odgers was DAO , in particular the remarks of Allsop P at 783 [98]-[99]:

The question of probative value is a question of relevance: the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue. This is a matter of logical analysis in the light of the balance of posited evidence. It is a judgment or evaluation, but one by reference to a fixed clear legal standard ... A statutory precondition is provided for in s 97(1)(b) that the court (that is the judge ruling on the admissibility) thinks something. That something is that the evidence "will", that is looking forward, have the required quality. I do not think that that requires predicting how a jury will react to the evidence (if there is a jury), other than through the logical assessment called for by the definition of "probative value". What is required however, as a precondition, is that the court thinks that it will have that effect in the body of anticipated or expected evidence. In the ordinary course this is a quintessential task of a trial judge dealing with the living fabric of the trial and the evidence unfolding before him or her.

75 There is admittedly a tension between the formulation expressed by Allsop P in DAO and that expressed by Simpson J in Zhang . In substance, however, the approach in each case is the same: the task is to decide the capacity of the evidence, either by itself or having regard to other evidence of the kind mentioned in the section, to be significant (that is, to be of importance or of consequence) in establishing the fact or facts in issue.

76 As I have explained, both Simpson J and Allsop P accept that the task of assessing the evidence's capacity to play that role in the trial falls entirely upon the Judge.

77 In my opinion, Mr Odgers' arguments on this point should not be accepted. The reasons for rejecting Mr Odgers' submission apply equally to the more muted submission to similar effect made by Mr McHugh.

The contested interpretations of s 98

78 In this appeal the Crown has conceded that, in performing the task under s 98, a trial Judge may, in an appropriate case, have regard to an alternative explanation arising on the evidence. The Crown, however, insisted that, in so doing, the trial Judge is restricted to examining whether the Crown hypothesis has cogency, that is, whether the Crown evidence is capable of being regarded as significant in its ability to prove the Crown case. If the coincidence evidence, either by itself or having regard to other evidence in the Crown case, positively and forcefully suggested an explanation consistent with innocence, then the coincidence evidence could scarcely be regarded as important or of consequence in proving the fact or facts in issue. What is required is this: the trial Judge must ask whether the possibility of such an alternative explanation substantially alters his (or her) view as to the significant capacity of the Crown evidence, if accepted, to establish the fact in issue. Does the alternative possibility, in the Judge's view, rob the evidence of its otherwise cogent capacity to prove the Crown's case? If it does not, the trial judge may safely conclude that the evidence has significant probative value.

79 In a practical sense, there are two avenues of approach to be taken. First, in examining the coincidence evidence (together with other material already in evidence or to be adduced) the trial Judge is required to ask whether there emerges, from a consideration of all the Crown evidence, a possible explanation inconsistent with guilt. For regard to be had to the alternative explanation, it must be a real possibility, not a fanciful one. It must be a broad or overarching possibility, capable of being stated in general terms, even though it may derive from an individual piece or pieces of evidence or the evidence taken as a whole.

80 Secondly, the trial Judge must ask whether that possibility substantially alters his (or her) view as to the otherwise significant capacity of the coincidence evidence to establish the fact or facts in issue. Of course, if the trial Judge has already concluded that the coincidence evidence does not reach that level of significance in terms of its capacity, he will have rejected the evidence in terms of s 98. In that situation, the possibility of an alternative inference may, for the time being, be set to one side. Later in the trial, when the evidence has concluded, that possibility will become a matter for the jury to assess and determine when it comes to consider whether the Crown has proved its case beyond reasonable doubt.

81 The Crown, in making its concession, however, stressed that at no stage in this process was the trial Judge required or entitled to assess the actual weight of any part of the evidence, or to make any actual assessment concerning the probabilities of any alternative theory. Nor was the trial judge required or entitled to make a comparison of the Crown theory and the probabilities of any alternative theory. This proposition appears consistent with established authority. Any attempt by the trial Judge to anticipate the actual weight the jury would attach to the evidence is prohibited, as I have explained.

82 I agree with the Crown's concession and with the important qualification attached to it by the Crown in it submissions. This brings me to the reason why I consider that the contested interpretations advanced by Mr Odgers and Mr McHugh are not correct and cannot be accepted. This is because, in my opinion, they require the trial Judge to embark on a task that is entrusted solely to the jury. This is the task of fact finding. It is the task of assigning weight to the evidence; of accepting facts that are considered of value, and rejecting those that are not. It is ultimately the task of determining whether the Crown has proved its case beyond reasonable doubt. In a circumstantial case, it is the task of deciding whether, having regard to the whole of the evidence, there is an explanation consistent with innocence. If the jury decide that is the situation, the Crown will have failed to prove its case beyond reasonable doubt. The trial Judge can play no part in any of these matters.

83 Of course, senior counsel for the appellants have insisted that their respective formulations do not require that the Judge trespass into this forbidden territory. A careful examination of their respective positions, however, shows that this insistence is misplaced.

84 Mr McHugh's detailed argument that the task faced by the Court under s 98 is to make its own comparative assessment of the probabilities reveals starkly that Hall J was invited to move impermissibly into the arena of fact finding. Even more so, in the case of Mr Odgers' more radical submission, is that the position.

85 That this is so can be seen clearly when regard is had to a number of the arguments advanced before the trial Judge. Although we were not invited in this appeal to descend to any degree into the factual arena, a number of submissions were made to us concerning various aspects of the practical "evaluation" of the evidence involved in the coincidence notices. This was done to satisfy this Court that the incorrect test had been applied and that, in any event, the trial Judge had failed to apply Zhang correctly. For example, the topic of NS's trading in AWB Limited ("AWB") was examined. The submission comprised a 14 page analysis (see appendix A to Mr McHugh's further submissions). It will be sufficient to refer to several of the matters in this document to make the point.

86 At paragraph 11 of appendix A and following, Mr McHugh makes submissions that the Crown's "theory" with respect to AWB is "highly improbable". The document then pursues an argument based upon the information in the possession of DSJ at the relevant time relating to AWB. This was information actually or arguably received by DSJ in the course of his employment at Moody's. In detailed arguments, Mr McHugh argued that the passing of this information to NS would not have been likely to persuade the latter to take a short position in AWB CFDs. One aspect of the information was that AWB was about to announce to the Stock Exchange that it would indemnify AWB (International) Limited ("AWBI") for its legal costs arising from the Cole inquiry, and for any tax that might be assessed against AWBI in connection with transportation fees paid for wheat sold to Iraq. Another aspect related to information confirming the correctness of an ABARE forecast that was well below AWB's most recent crop forecast for domestic wheat production for 2006-2007.

87 Mr McHugh included in the appendix several pages of detailed argument and analysis about these pieces of information. At the conclusion of his analysis, counsel suggested it would have been "irrational" for DSJ to procure NS to take a short position in AWB CFDs. These arguments included, for example, that the market may already have been well aware of the nature of the potential tax risk for AWBI, and also the worst case figure of about $250 million in that regard; that AWB in any event had little choice but to indemnify AWBI against the risk; and that the likelihood that AWBI would call on the tax indemnity was remote. All these matters, it was argued, supported the proposition the information passed to DSJ suggested a positive for the AWB share price rather than a negative. In relation to the ABARE "pessimistic" forecast as to domestic wheat production for the 2006-2007 crop, Mr McHugh argued that there was already material in the public domain forecasting a likely decline in production. For example, the day before the information came to DSJ at the meeting (if it did), ABARE had published a report stating wheat production was forecast to decline by around 35% in 2006-2007. Further, Mr McHugh argued that there was no direct evidence to suggest that the ABARE report had been mentioned at the meeting in DSJ's presence. Before the trial Judge, however, the Crown had argued that DSJ had made a note at the 20 September meeting stating that the ABARE forecast had been "correct" with certain other details written on it.

88 In appendix A, Mr McHugh argued that, for various reasons, it should not be accepted that DSJ's note reflected something he had been told at the meeting. It was, more likely than not, merely a recording of his own views, rather than a communication to him that the ABARE forecast had been correct.

89 I have gone to some trouble to repeat the detail of these submissions. They highlight the proposition that "the probability or improbability of any alternative theories" argument is in reality a series of detailed submissions on the facts, urging the trial Judge to take an adverse view of those facts contrary to the Crown's position. Each and every of those submissions can properly be seen as more in the nature of arguments to place before the jury in closing address. In reality, they are jury submissions par excellence . Indeed, the Crown response to those submissions can and should be categorised in exactly the same way.

90 One further example will suffice. In paragraph 7 of the appendix, Mr McHugh submitted that there was a powerful argument available to answer the Crown's coincidence reasoning. This was that, during the eight month charge period, NS had traded in three non charged entities, namely, PBL, Australian Pipeline Trust and Downer. The Crown's expert witness had given evidence that Moody's had no inside information in respect of those three listed entities. Yet the Crown case was that NS had been trading in CFDs for those companies. Mr McHugh argued:

The Crown makes much of its claim that CFDs were risky and dangerous and that NS was only prepared to run the risk of trading in them because he had inside information. But that theory collapses when the Crown in unable to establish that NS had any inside information at all with respect to [those entities] but still traded. The proper conclusion to draw from that evidence is that NS was a speculator who was prepared to run the risk of significant losses in the hope of significant gains.

91 This, to my mind, is a clear example of the point I have made above. It is an argument as to the weight to be given to the evidence in the Crown case. It is an argument as to the drawing by a tribunal of fact of inferences suggested by the Crown, and the actual evaluation of inferences to the contrary. Once again, these arguments should properly be classified as jury arguments, not s 98 arguments at all.

92 Yet, Mr McHugh would suggest that these arguments (and many more of those contained in the detailed appendix) were not invitations to the Judge to intrude upon the jury's task of fact finding. The two arguments I have mentioned were said to be examples of alternative "explanations" or "theories" which were "more probable" than the theory advanced in the Crown case. However at paragraph 44 of the appendix, Mr McHugh argued that:

... the Court, having carried out the factual analysis above , is then required under s 98(1)(b) to take those matters into account in following the approach of the Victorian Court of Appeal in CGL ... and set out at paragraph 24 of the main submissions above. [My emphasis]

And again at paragraph 45:

... [DSJ] submits that the factual analysis demonstrates that it is not at all improbable that the events occurred coincidentally. To the contrary, it is highly likely that any similarities in the events or circumstances are mere coincidence. ... [DSJ] submits that the evidence of those events and circumstances does not tend to prove that [DSJ] did the specified acts or had the specified states of mind in relation to the AWB charge. In other words the Crown's coincidence evidence has no real probative value in relation to the AWB charge. [My emphasis]

93 These submissions, based as they are on Mr McHugh's contested interpretation of s 98, demonstrate clearly that he is inviting the Trial Court to accept the submissions he has made in relation to the weight to be given to factual matters and the inferences to be drawn from those factual matters. It is not possible to make an assessment of the probabilities without doing so. Counsel is inviting the Trial Court to come to a conclusion of fact in those regards before making a determination in relation to s 98. This suggested construction of s 98 plainly falls foul of the prohibition against the Judge entering into the factual arena.

94 It needs to be recalled that detailed arguments of this kind, each requiring a "factual analysis" and evaluation, in relation to every trade by NS in the relevant period were placed before the trial Judge in the context of s 98 arguments. Hall J was right to recognise that the s 98 exercise did not require him to resolve these detailed and complex factual arguments. They were matters for a jury at the conclusion of the trial when the actual evidence had been assembled in its totality.

95 It must also follow that Mr Odgers' submissions, based as they are on a more radical proposition than Mr McHugh, equally fall foul of this prohibition. In fairness to Mr Odgers, he did not descend, in his submissions, to the level of factual analysis enunciated by Mr McHugh. Indeed, his principal "alternative theory", based on the admitted evidence of his client's trading, suggested a hypothetical possibility that NS may have been operating on the basis of "tips" he received from DSJ rather than being in actual receipt of inside information. This possibility was said to arise, not from any positive evidence, but from an absence of evidence as to the detail of the communications between the two men.

96 In that situation, how could the trial Judge "evaluate whether it could rationally be concluded that the probability of the inference the Crown seeks to draw is significantly greater than the probability of an inference inconsistent with that fact"? In practical terms, the trial Judge could not do so without evaluating the weight of the evidence. At paragraph 57 of his written submissions Mr Odgers referred to a number of other alternative inferences that might be available in his client's case. These included:

(a) the possibility that NS and DSJ talked about companies or investment trading in general but did not discuss anything to do with the specific companies involved;

(b) the two men discussed the industry or even specific companies at particular times but DSJ neither provided information nor tips.

97 In view of the forceful findings made by Hall J in relation to the cogency of the coincidence evidence, it seems hardly likely that any of these inferences, even if they could be said to arise on the evidence, had the capacity to disturb the trial Judge's conclusions. Mr Odgers' suggested construction of the s 98 process, in any event, required some level of weighting of the inferences akin to the task entrusted to the jury.

Did the trial Judge fall into error ?

98 The narrow point in issue here is whether the trial Judge fell into error by rejecting altogether that, in determining the extent to which the evidence could be significant in establishing the facts in issue, regard should be had to an alternative explanation for the conduct said to have the capacity to point to towards guilt. If that was the conclusion reached by the trial Judge, then, on the basis of the concession made by the Crown in this appeal, an error will have been established. The difficult question is determining, on a fair reading of the comprehensive and detailed judgment, whether that was his Honour's conclusion or not.

99 I should immediately say that if his Honour did fall into error in this regard, it was scarcely his fault. This is so for two reasons. First, far from making the concession that has been made in this appeal, the Crown, during the preliminary hearing, urged his Honour to reach a conclusion "in the absence of any consideration of another party's alternate interpretations of the evidence to the interpretation for the party who seeks to have the evidence admitted" (Appeal book 69 (45)). Secondly, as I have already indicated, Mr McHugh's submissions on behalf of DSJ did not propound a broad alternate explanation inconsistent with guilt. Rather, they required the Judge to analyse, in minute detail, the majority of facts in the coincidence evidence and the Crown case statement with a view to establishing that the Crown case did not have sufficient weight and that there were many arguments on each transaction that might render the Crown case less than substantial.

100 I shall briefly say something further about the position adopted by the Crown before the trial Judge. Its original submission is to be found at Appeal book 275:

It is submitted that the Court, in considering the admissibility of two or more events by the party seeking to adduce the evidence of two or more events, is confined to a consideration of the evidence adduced by the party seeking to adduce the evidence of the two or more events. This consideration should be done in the absence of any consideration of another party's alternate interpretation or possible challenge to the evidence of the party seeking to have the evidence admitted.

In Samadi v The Queen [2008] NSWCCA 330 Beazley JA stated at [97] (Hislop and Price JJ agreeing) that "... a Court is not required to engage in a (sic) imaginative task of speculating what possible other explanations there could be for the circumstances relied upon".

101 A number of points can be made about this submission. First, the proposition contained in the first sentence is undoubtedly correct. Secondly, the proposition in the second sentence (at least in part) is now conceded by the Crown to be incorrect. Thirdly, the reference to Beazley JA's comment in Samadi is apt to mislead. The full quote in that case at [97] demonstrates that Beazley JA had been dealing with an important aspect of the legislation as it stood before the amending legislation in 2007. Her Honour's remarks were concerned with the then s 98(2) which contained a definition of "related events". The subsection read:

For the purposes of subsection (1), two or more events are taken to be related events if and only if,

(a) they are substantially and relevantly similar, and

(b) the circumstances in which they occurred are substantially similar.

102 In its entirety, the paragraph relied upon by the Crown in Samadi is as follows:

Whilst an array of circumstances might be posited against the availability of drawing an inference, s 98, at the admissibility level, does not work in that way. The Court is concerned with determining whether evidence is substantially and relevantly similar and occurred in substantially similar circumstances, so that those events may be relied upon to prove, if accepted, that it is improbable that the events occurred coincidentally. In determining that question, the Court is not required to engage in a (sic) imaginative task of speculating what possible other explanations there could be for the circumstances relied upon.

103 As I have said, s 98 was expressed in different terms in a number of respects prior to the 2007 amendment. It is clear that her Honour's comments relate to the aspect of the subsection that defined the notion of "related events", a concept not mentioned in the current s 98. Further, when the paragraph is read in context in the decision, it is quite clear that her Honour was not seeking to address the question that has been involved in this appeal, namely the method of evaluation of significant probative value.

104 The fact that the Crown relied on the passage in its written submissions before the trial Judge and, in particular, relied on it to support its proposition that "another party's alternate interpretation ... to the evidence" is to be disregarded, reveals quite plainly that the submission was apt to mislead. In fairness to the Crown, it has made it quite clear in this appeal that an alternate explanation inconsistent with guilt arising from the Crown evidence may be recognised in order to test the cogency of the hypothesis upon which the prosecution relies to justify the admissibility of the evidence.

105 Before the trial Judge, the Crown presented further written submissions through the then prosecutor, Mr Agius SC. The proposition I have found to be incorrect was put more nakedly at Appeal book 290:

12. Much of what was submitted on behalf of [DSJ] was directed to demonstrating other explanations for the circumstances relied upon by the Crown, for example some of these explanations pointed to publication of material in the public domain which may have operated upon the mind of [NS] and which may have led to his purchase of shares or securities. However, these possible explanations are to be set aside when considering admissibility under s 98.

13. This approach is in accordance with the scheme of the section which refers in s 98(1) to a court having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence. There is no room to have regard to what the defence claims may be another explanation for the circumstance ...

106 It is clear that these submissions went well beyond the proposition that regard was only to be had to the evidence adduced or likely to be adduced by the Crown. Mr Odgers' argument, for example, had placed reliance on a possible explanation inconsistent with guilt said to arise from evidence in the Crown case statement. This further Crown submission (which once again purported to rely upon the statement by Beazley JA in Samadi (Appeal book 289)) suggested even more forcefully the proposition that is now conceded to be incorrect.

107 The second matter, as I have stated, was the nature of the defence submissions before the trial Judge. Argument proceeded, as I indicated at the outset, over a span of five days. A perusal of the transcript demonstrates that much of the time was taken up with detailed analysis by the Crown and Defence counsel of the contested factual matters. This led to the trial Judge producing the lengthy appendix to his decision. In other words, the main focus throughout was on the various arguments concerning the relative strength and weight to be given to the evidence and the inferences to be drawn from it. At Appeal book vol 2 179, his Honour raised his acute concern with this situation:

At some point in time I do want to visit this question, that is, the extent to which on an application such as this it is within my province to be analysing the evidence in terms of what I might put as the alleged deficiencies in it, or the holes in it, in order to evaluate the probative value of the evidence under s 98 ... There is a boundary which it might be said that I would be crossing over in this application if I were to descend into fact finding, which is the province of the jury and not the province of any Judge ...

108 The then Crown prosecutor assured his Honour that he would address this issue on the following day. On that next occasion, the Crown urged his Honour to "take care" not to trespass into the factual area and to take the Crown evidence "at its highest" in assessing whether it could be ascribed significant probative value. His Honour, however, maintained his concern in these terms (Appeal book 194):

So that at the end of the day many of the factual questions I have raised may not be within the jurisdiction I have on this application. So that raises the question then well there is a myriad of factual matters raised in MFI 1 and your response in MFI 2. The question is to what extent am I entitled to involve myself in fact finding in relation to each and every one of those issues and the issues may run to dozens if not hundreds ...

109 His Honour said that he was concerned to know the extent of his jurisdiction. He asked once again for Counsel's assistance in that regard. The Crown, in essence, simply adhered to its written submissions. Without being overly critical of the parties, it appears that his Honour was not given the assistance that he sought. Thereafter, the submissions on both sides simply re-absorbed themselves into the mass of factual material and concentrated on the strengths and weaknesses alleged by each side to arise from that detailed exercise.

110 In their reply submissions before the trial Judge, Mr Odgers and Mr McHugh essentially adhered to the contested interpretation arguments of s 98 that have been presented in this appeal. Neither counsel, it must be said, expressly suggested that the trial Judge should make factual findings or should actually draw inferences. However, as I have said the contested interpretations for which each argued effectively required a weighting of the evidence and the inferences to be drawn. His Honour was consequently left in a very difficult situation.

The trial Judge's decision

111 I turn then to his Honour's findings. It is convenient, I think, to go directly to the conclusions expressed at Appeal book 121-122. These occur on page 70 of his Honour's reasons. He said:

[227] I am satisfied and determine that the evidence identified and particularised in Table A in the Coincidence Notice is evidence that is capable of rationally affecting the probability of the existence of the following facts in issue:

(1) Possession of [DSJ] of inside information.

(2) That that information was communicated by him to [NS].

(3) That he procured [NS] to acquire Division 3 financial products.

(4) That [NS], whilst in possession of inside information, acquired Division 3 financial products.

[228] For the purpose of determining admissibility, I am satisfied and determine, in light of the evidence which the Crown proposes to adduce that, in accordance with the test to be applied, the jury would be likely to assign that evidence significant probative value within the meaning of s 98(1)(b).

[229] The probative value of the evidence referred to in [228], I assess as being high based upon the following matters:

(1) The similar events identified and particularised in the Coincidence Notice.

(2) The sequence and timing of the specified events before and following the acquisitions the subject of the counts in the indictment.

(3) The number of the events and the attenuated similarity of such events. A pattern of events may still exist on the basis of similarities even though a variation in the pattern may occur in some aspects (as in the case of GasNet).

(4) The capacity of the evidence in relation to such evidence to rationally affect the probability of the existence of facts in issue including, in particular, the issue of "possession" and procurement within s 1043A(1)(d).

(5) The capacity of the evidence in question to establish a relevant interrelationship between the issues of possession of inside information, communications between [DSJ] and [NS], the transfer of such information from one to the other, the issue of procurement by [DSJ] and arrangements for the acquisition of the relevant financial products and the acquisitions themselves.

(6) The evidence establishing that, in relation to all acquisitions in entities referred to in the counts in the indictment, Moody's had previously been entrusted with inside information by and in relation to all such entities.

112 These conclusions were principally in connection with the application of s 101, but they referred back to and gave content to his Honour's earlier findings on significant probative value. After an extensive series of deliberations on the issue of significant probative value his Honour, prior to examining Mr Odgers' submissions, had earlier said at Appeal book 114:

[195] Accepting the Crown's evidence as I must for the purpose of determining the issue of significant probative value, I have concluded that the "events" " and their surrounding circumstances do exhibit similarities and for the purposes of determining admissibility under s 98, I consider they constitute striking similarities. In assessing the probative value of the evidence in question, it is relevant to take into account the facts relied upon in the Crown case in relation to each count that are, at least, consistent with what might be termed selectivity in the acquisitions in the sense that those acquisitions ... related to entities that had provided to Moody's what became inside information.

113 His Honour then turned to Mr Odgers' submissions. First, he rejected Mr Odgers' primary submission relating to the process of finding relevance in s 55. Secondly, in relation to the broader submissions made by Mr Odgers as to the interpretation of s 98, his Honour said:

[205] In relation to the submission that under s 98 more is required than that an inference is " open " on the evidence for a finding in respect of "significant probative value" , I respectfully agree. I have proceeded on that basis. An assessment under that provision is directed to evaluating the strength of the evidence including inferences based on an acceptance of the evidence in question.

[206] I, with respect, do not accept the submission that the requirement under s 98(1)(b) means " ... the Court must evaluate whether it could rationally be concluded that the probability of the inference the Crown seeks to draw is significantly greater than the probability of an inference inconsistent with that fact" ... In that respect, I refer to what has been said on that issue above. However, in my assessment, for the purposes of determining admissibility under s 98(1)(b), I consider that the "probative value" of the evidence relied upon by the Crown in relation to the charged matters is such that, assuming a jury accepted that evidence at trial, then, on that basis, the jury would be likely to assign the evidence significant probative value such as to render the inferences relied upon by the Crown as having a high degree of probability. It need hardly be said that that is not intended to be the expression by me of any final opinion as to what or how a jury should decide. A jury's actual assessment will depend, of course, upon its acceptance of the evidence in the Crown case following cross examination and in light of all the evidence in the case.

114 These conclusions, forcefully stated as they were by the trial Judge, do not, however, clearly indicate whether his Honour had rejected the Crown submission that, in performing the task ascribed by s 98, he must eschew altogether the recognition of any alternative explanation inconsistent with guilt arising from the Crown evidence. Mr McHugh and Mr Odgers placed reliance, however, on his Honour's remarks at paragraph 64 (Appeal book 75) where his Honour had said, in the context of a discussion on "significant probative value":

The Appendix to this judgment contains a summary of facts and particular matters that were raised in the submissions for [DSJ] and in the Crown's reply. For reasons discussed below, I have concluded that there is no requirement for the purpose of a ruling on admissibility under s 98 to determine the existence and weight to be given to inferences that may be considered as alternative or inconsistent with those relied upon by the Crown by analysing parts or segments of evidence in a circumstantial evidence case. In deference to the arguments raised, the appendix endeavours to capture many matters raised and relied upon in the submissions made on behalf of [DSJ]. The summary of factual material relating to the "events" in MFIs set out in the appendix also assist in understanding the contentions made on behalf of [DSJ] and [NS].

115 It is not clear to me that this paragraph, read in isolation, contains the error for which Defence counsel contend. Rather, it seems to my mind that the trial Judge may have been repeating the concerns that he had identified during oral submissions. It may have been that his Honour was simply stating that his task, as he saw it, did not extend to making an assessment of the weight of alternative inferences by scrutinising those parts or segments of the evidence which had been referred to by Mr McHugh for [DSJ]. If that is the meaning that his Honour intended to convey, as the Crown argued in this appeal, he was quite correct in that regard. I have said enough in the earlier part of these reasons to demonstrate why that is so.

116 However, it is necessary to look beyond the particular paragraph and endeavour to see whether his Honour has elsewhere expressed a concluded finding about the broader issue, namely whether it was (or was not) necessary for the purposes of testing the cogency of the Crown hypothesis, to consider any broad alternative or inconsistent inferences arising on the Crown evidence. This topic was raised again by his Honour at paragraphs 68 and 70. His Honour noted that there was no case law authority that had determined whether he should have regard to "the availability and strength of inferences founded in the evidence other than the inferences for which the Crown" contended.

117 His Honour returned to the issue at paragraphs 88-111. At 111 his Honour said:

One difficulty, apart from the absence of authority to support the above line of argument is that, at this stage of proceedings in which an advanced ruling is sought on admissibility, there is evident difficulty in determining the availability of inferences and the comparative strength of alternative inferences in relation to a particular fact or matter. The drawing of inferences will, to an extent, depend, as it does with a jury's finding, upon what particular facts or combination of facts the evidence is found to establish. This, at a pre-trial stage, is problematic where there exists a dispute as to primary facts or where the Crown case is largely or wholly a circumstantial one.

118 His Honour then listed, in broad terms, a number of matters that had been identified by Mr McHugh as matters in "dispute". Secondly, at paragraph 114 and following, his Honour listed, "alternative inferences" identified by Mr Odgers on behalf of NS. These, in one form or another, referred to the possibility that NS had been "tipped off" by DSJ but had not been provided with the inside information. His Honour carefully set out the submissions made out by Mr Odgers in support of this argument.

119 Next his Honour considered a number of authorities that had looked at the issue of similar fact evidence. Having done so, the trial Judge turned to a more general discussion of the evaluation of the probative force of similar fact evidence. He acknowledged Mr McHugh's submission that the probative value of the evidence here, in a number of respects, was low or non-existent, diminished or amenable to alternative explanation or inferences (Appeal book 94, para 134). His Honour commented:

135. A number of submissions for DSJ did not deal with the subject of "alternative inferences" by considering particular evidence referred to in the context of the whole of the evidence in relation to a particular count or the evidence in relation to other counts or both. Rather, the approach was to refer to parts of the evidence in the Crown case relating to particular "events " referred to in MFI 1 as an individual segments [sic] of evidence. As discussed below, such an approach does not sit comfortably with principles that apply to the assessment of probative value of evidence particularly in circumstantial evidence cases.

120 His Honour then referred to authority that supported the approach that, in similar fact cases, cogency is demonstrated when regard is had to the particular fact seen in the context of the other evidence in the case ( Sutton v R [1984] HCA 5; (1984) 152 CLR 528 per Brennan J). His Honour's reasoning turned to the propositions advanced in Zhang and Lockyer . He then set himself the task formulated by Simpson J in Zhang :

152. The analysis of Simpson J in Zhang ... and her Honour's expression "... an evaluative and predictive one" are to be understood on the basis discussed above, namely, that, in determining the admissibility of coincidence evidence, the Judge acts upon an assumption that the evidence in question will be accepted. ... On that basis, the question of which I must satisfy myself is, would it be likely that the jury would assign the evidence significant probative value in the sense that the evidence could rationally affect the assessment of the probability of the existence of the facts in issue.

153. I have earlier referred to submissions on behalf of [DSJ] in which a number of items of evidence relied upon by the Crown were either disputed or one of more bases of which were said to be susceptible to innocent or alternative explanations or inferences. The submission was that alternative inferences were open in relation to such evidence. In dealing with those submissions, it is important to identify the role of a court in determining the admissibility of evidence on the basis of an assessment of the probative value. The cases referred to in the paragraphs that follow have considered that role.

121 The trial Judge then gave consideration to judicial statements in R v Shamouil; R v Cook [2004] NSWCCA 52 and other authorities which had stressed the importance of the division of functions between a trial Judge and the jury in the trial process.

122 Against that background, his Honour entered upon the following discussion (Appeal book 105-106):

165. In the submissions for [DSJ] it was argued ...

...there is nothing in s 98 and s 101 to prevent the Court from assessing the probability of inferences other than those relied upon by the party who seeks to adduce the evidence ...

166. The submission in this respect continued by stating that the Court "must have regard to all the circumstances in which the allegedly similar events are said to have occurred and to all the available inferences" ... and that it was impossible to assess the relative probability or improbability that a similar set of events occurred coincidentally without considering the likelihood of alternative available inferences ...

167. There are a number of matters raised by these submissions in relation to the subject of alternative inferences. Even if evidence on a particular aspect is capable of carrying an alternative inference, that does not detract from the fact that that evidence nonetheless remains open to any rational inference relied upon by the Crown. In other words, in terms of the capability of the evidence in the sense discussed above, it may nonetheless remain capable of carrying significant probative value in the relevant sense as explained in Zhang ... even though other inferences may also be open. This may be because, as a matter of evaluation and prediction, it can be considered likely that the jury would assign it significant probative value and prefer the inference the Crown relies upon. Importantly, the evaluation of the probative value of the evidence, when it is considered along with other evidence, may further enhance the probative value of the evidence in question.

123 I pause there to observe that each of these propositions advanced by Hall J is undoubtedly correct. His Honour continued:

169. At the centre of the submissions made on behalf of both accused is the proposition that the probative value of the evidence proposed to be led by the Crown is diminished if the evidence may be considered to be open to alternative inferences or explanations and not only the inferences which the Crown proposes to ask the jury to draw. Not only, it is suggested, must a Judge in evaluating significant probative value determine whether alternative inferences are open but he or she must set about weighing and evaluating the strength of competing inferences, a task that would require, in most cases, that the whole of the relevant circumstantial and other evidence in the proceedings be evaluated, that is, in similar fashion to the approach required of a jury.

170. These submissions are to be assessed, firstly, by the principle that, in determining the admissibility of evidence, a court is to proceed on the basis of taking the evidence in the Crown case on the basis that it will ultimately be accepted by the jury and, secondly, that parts of the evidence must be considered in the whole context of a circumstantial evidence case.

124 It may be observed at this point of his Honour's discussion that his reasoning has led him to identify clearly enough the propositions that had been advanced to him on behalf of the defence. His Honour has rightly identified that it was no part of his task to weigh and actually evaluate the strength of competing inferences for the purpose of the s 98 exercise. However, it appears that his Honour has left open, at this point in his reasoning, the question whether, in undertaking the s 98 task, the Court should ignore altogether the possibility of an alternative inference being available arising from the Crown's evidence.

125 His Honour next turned to Samadi and the passage from Beazley JA which I have set out earlier. His Honour noted that the point in that case arose in circumstances that were "very different" to those with which he was concerned. His Honour said:

"It is nonetheless instructive to observe the distinction drawn by Beazley JA between the task required by s 98 to be undertaken ( "at the admissibility level" ) from issues that are for a jury's ultimate determination. The former obviously involves a significantly different approach to that involved in the process by which a jury determines subjacent issues of fact (including inferences) and ultimately the facts in issue."

126 His Honour, after further reference to the Chief Justice's remarks in Shamouil (and other cases) referred once more to the distinction between the task performed by the trial Judge and that performed by the jury in relation to factual evaluation. His Honour continued:

178. There is evident difficulty in many of the submissions made on behalf of [DSJ] in determining the question of admissibility of evidence under s 98. In relation to many counts, submissions were made as to the absence of evidence on particular or discrete "events" (as, for example, "no actual evidence" of [DSJ] receiving any information as alleged, of what was said in telephone calls or the content of text messages or of acts of [DSJ] to "procure" acts by [NS]). Particular submissions, as noted above, related to the weight to be given to expert evidence on "materiality" in light of certain information in the public domain.

127 His Honour then concluded:

181. There is nothing either in the terms of s 98 nor in the analysis of Simpson J in Zhang ... or, in my opinion, in any other authority that indicates or mandates that a judge in assessing "significant probative value" under s 98 must identify the possible alternative inferences that could have support from the evidence or parts of the evidence the Crown proposes to rely upon in relation to particular matters and then set out about sifting and weighing the alternative inferences for the purpose of determining "probative value" .

182. In accordance with the common law trial principles, the determination of available rational inferences is to be made in the context of all relevant evidence at the conclusion of the evidence and then only by the tribunal of fact, the jury. The provisions of s 98 do not state or suggest that, at the level of admissibility, the judge is to conduct an inquiry of all evidence with a view to determining whether more than one inference is open on the basis of particular evidence and whether one possible inference, in fact, trumps another. It is not the function or within the province of a judge in determining an admissibility question under s 98 to predict the inferences or hypotheses that might ultimately be drawn by the jury from the evidence in the course of it determining actual probative value. ...

128 In paragraph 184, his Honour noted the difficulty of resolving the comparative availability and strength of alternative inferences or explanations at the admissibility stage. He underlined the fact that "alternative inferences to those relied on by the Crown would often necessarily depend upon how a jury resolves conflicting evidence and how it may determine the probative force of evidence on the basis of the mass of evidence". His Honour endorsed as helpful to his exercise the metaphor referred to by Brennan J in Sutton where similar fact evidence was likened to "the tiles constituting a mosaic". His Honour thought that such a metaphor was equally apposite in relation to coincidence evidence.

129 The trial Judge then moved to the conclusions which I have set out earlier.

130 I have concluded, not without some considerable hesitation, that the trial Judge did fall into the error of rejecting altogether the need to recognise, in the evaluation process, the existence of alternative inferences inconsistent with guilt arising from the Crown evidence. This was as a consequence of the Crown argument that was advanced to him, his reliance on the passage in Samadi , and arising from his overall concern that it was not his task to intrude into the fact finding area which included the weighing and assessment of inferences.

131 In relation to the last matter, his Honour was quite correct. His Honour was also correct in accepting that it is the task of the jury to undertake this weighing task at the point where all the evidence in the trial had been assembled and concluded. None of this, in my opinion, means, however, that the trial Judge in assessing s 98, and making the evaluation required under that section, must ignore and put to one side altogether an alternative explanation that properly arises on the evidence inconsistent with guilt. Of course, it is not for the trial Judge to weigh and assess that alternative explanation, as a jury would do. Nor is the trial Judge required, in that regard, to examine and weigh parts of the evidence only in isolation from the whole body of the evidence.

132 However, in the present matter, the trial Judge was required to ask himself whether, for example, the possibility that NS had been "tipped off" about the corporate entities without receiving inside information might otherwise substantially alter the capacity for cogency he thought the coincidence evidence possessed. Similarly, in the case of DSJ, his Honour was required to ask whether, for example, this mass of phone calls and other communications between the two men might mean no more than that they were engaging in social and recreational communications, without reference to stock market trading. If that were a possibility, did it substantially alter his view as to the otherwise significant capacity of the Crown evidence to establish the facts in issue. He had to ask whether the fact that Moody's had information about a vast number of corporate entities, and that, in some cases, there was no direct evidence that DSJ had acquired inside information, substantially altered the high cogency of the coincidence evidence, as he saw it, to prove the facts in issue. In each case, did the possibility deprive the coincidence evidence, taken with the other evidence, of its capacity to prove significantly the Crown case? His Honour, in considering these alternative inferences, may well have taken the view that none of these possibilities had the capacity to diminish the otherwise strong probative value of the Crown evidence. However, in my opinion, they had to be recognised and taken into account in the limited manner I have suggested, and it was an error not to do so.

133 For these reasons, I have concluded that error has been demonstrated. The order refusing severance of the counts should be set aside and that issue should be sent back to the trial Judge for re-consideration. It may well be that his Honour will, after applying the approach I have suggested is the correct one, reach precisely the same conclusion both as to the admissibility of the evidence and the need for the counts to be tried together. Those matters will be entirely within his province as trial Judge.

134 I propose the following orders:

1. Appeal allowed.

2. Order made by Hall J on 23 August 2011 dismissing the applications that the charges in the indictment, other than charges 6-9, be tried separately, be set aside.

3. The motions are referred back to the trial Judge for reconsideration in the light of this Court's rulings.

135 McCLELLAN CJ at CL: I agree with Whealy JA.

136 McCALLUM J: I agree with the orders proposed by Whealy JA, for the reasons given by his Honour. I also agree with the additional comments of the Chief Justice.

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Decision last updated: 17 February 2012