|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Federal Court of Australia |
COURT
IN THE FEDERAL COURT OF AUSTRALIACATCHWORDS
Administrative Law - judicial review - extension of time - s.16 Administrative Decisions (Judicial Review) Act 1977 - delay by applicant - public policy considerations.Administrative Law - judicial review - investigation by Royal Commission of Tricontinental Group - whether ASC could validly aid Royal Commission - making available ASC powers of investigation - whether purpose contrary to ASC Law - objects of ASC Law - power of ASC to co-operate with other bodies - S.127(4) Australian Securities Commission Act 1989 - continuation of investigation - whether compliance with s.14A.
Administrative Law - judicial review - investigation by Royal Commission of Tricontinental Group - aiding of Royal Commission by ASC - delegation of powers to officers of ASC - delegation to "staff members" - whether officer seconded from ASC to Royal Commission a "staff member" - whether investigation power validly delegated - whether disclosure delegation extends beyond date of delegation.
Administrative Law - judicial review - investigation by Royal Commission of Tricontinental Group - aiding of Royal Commission by ASC - confidentiality - material obtained in examinations by ASC - whether disclosure of material by ASC to Royal Commissiion lawful - Ss.25(3) and 127(4) Australian Securities Commission Act 1989 - whether disclosure of material at public hearings by Royal Commission lawful - whether giving of and reliance on an assurance of confidentiality - consent by ASC to publish - whether decision to publish unreasonable.
Contempt - Royal Commission - pending criminal proceedings - contempt of court - receipt by Commission of final submissions in public - whether risk of interference with administration of justice - whether outweighed by public interest.
Crown - Royal Commission - apprehension of bias - allegedly prejudicial evidence given at special hearing - ruling by Commission to disregard evidence.
Administrative Decisions (Judicial Review) Act 1977: Ss.5(1)(c),(d),(e),(f) and (g), 5(2)(c) and (d)
Australian Securities Commission Act 1989: Ss.1(2),14A,14(1), 25(3), 127(1) and (4).
Amoe v Director of Public Prosecutions (Nauru) [1991] HCA 46; (1991) 103 ALR 595.
Bercove v Hermes (No.3) (1983) 51 ALR 109.
Fraser v Evans (1969) QB 349.
Hinch v Attorney-General (Vic) [1987] HCA 56; (1987) 164 CLR 15.
Livesey v NSW Bar Association [1983] HCA 17; (1983) 151 CLR 288.
Marcel v Commissioner of Police (1991) 2 WLR 1118; (1992) 2 WLR 50.
National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd (1989) VR 747.
Parker v Westby (1941) St R QD 47.
Registrar of the Court of Appeal v Willesee 3 NSWLR 650.
State of Victoria v Australian Building Construction Employees and Builders Labourers Federation [1982] HCA 31; (1982) 152 CLR 25.
Ian Malcolm Johns v Australian Securities Commission and Ors (VG 94 of 1992)
HEARING
MELBOURNECounsel for the Applicant: Mr R. Merkel QC with Mr J.D. Hammond
Solicitors for the Arnold Bloch Leibler
Applicant:
Counsel for the First, Mr A.J. Myers QC with Mr G.T. PagoneSecond and Third Respondents
Solicitors for the First, Australian Securities Commission,Second and Third Respondents: Regional General Counsel
Counsel for the Fourth Mr B.N. Caineand Fifth Respondents:
Solicitors for the Fourth Clayton Utzand Fifth Respondents:
Counsel for the Sixth and Mr M. DreyfusSeventh Respondents:
Solicitors for the Sixth Arthur Robinson and HedderwicksRespondent:
Solicitors for the Seventh Blake Dawson WaldronRespondent:
Counsel for the Eighth Mr R.A. Finkelstein QC with MrRespondent: R.M. Garratt
Solicitor for the Eighth Victorian Government SolicitorRespondent:
ORDER
1. The application be dismissed. 2. The question of costs be adjourned for hearing on 30 April 1992 at
9.30 a.m.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
DECISION
I Introduction2. On 7 September 1990 the Victorian Government secured the appointment by the Governor-in-Council of a Royal Commission to enquire into the affairs of the Tricontinental Group. Two members were distinguished lawyers. The Chairman was Sir Edward Woodward QC, formerly a Judge of the Federal Court of Australia. The second legal member was Mr Douglas Williamson QC of the Victorian Bar. The third member of the Royal Commission was a leading businessman. At all times relevant to the present case that member was Mr John Carden, formerly a director of CRA Ltd.
3. For the remainder of 1990 the Royal Commission was mostly concerned with setting up the necessary administrative arrangements for its vast task and making preliminary enquiries. Two days of public hearings were conducted in December. In 1991 the Royal Commission commenced substantial public hearings. The first phase of those hearings was mainly concerned with the structures and practices of the Group and the roles played by the more important individuals concerned. An interim report dealing with that first phase was presented to His Excellency the Governor of Victoria on 30 July 1991 and published shortly thereafter. In the second half of 1991 the Royal Commission turned to the examination of specific transactions.
4. A central figure in the affairs of the Group was its former Managing Director, Mr Ian Johns, who is the applicant in the present case.
5. During the life of the Royal Commission there has been a major change in the administration of corporate law in Australia. On 1 January 1991 the Australian Securities Commission (ASC), established under Federal legislation called the ASC Law, replaced the National Companies and Securities Commission (NCSC). It is the involvement of the ASC in the work of the Royal Commission which gives rise to most of the issues in the present case.
6. On 11 February 1991 the ASC arranged with the Royal Commission to make available to it the services of ASC officers, including the third respondent Mrs Noreen Megay. The ASC delegated to those officers powers of investigation under Part 3 of the ASC Law. The admitted purpose of this arrangement was to assist the Royal Commission in its work by making available to it the ASC's power to obtain documents and information under the ASC Law. Mr Johns says this arrangement was improper, unlawful and beyond the powers conferred on the ASC under the ASC Law.
7. From July 1991 onwards officers of the ASC, and in particular Mrs Megay, issued summonses to a number of persons, including Mr Johns, examined them on oath in private, and obtained documents from them. Transcripts of these examinations and the documents obtained were made available to the Royal Commission. At public hearings of the Royal Commission many of these transcripts, including those of examinations of Mr Johns, were tendered. The transcripts were used in other ways by the Royal Commission, for example as proofs of evidence of witnesses called in public hearings.
8. Mr Johns says the material obtained in the examinations was given to the ASC in confidence and that it was unlawful for the ASC to make the material available to the Royal Commission, or for the Royal Commission to permit that material to be tendered in public hearings, without the consent of the persons examined. Further, it is said that in the case of Mrs Megay, the disclosure of material to the Royal Commission went beyond the terms of the actual delegation to her. This was particularly so, it is said, in respect of information obtained by her after 1 March 1991, the date of the delegation. It is also said that in any event ASC powers could not be validly delegated to her because she was not at any relevant time a member of the staff of the ASC.
9. Mr Johns says this material and the unlawful use of it has become inextricably interwoven and intermingled with the conduct of the Royal Commission. He complains that the Royal Commission has no power or jurisdiction to conduct its proceedings by using this material directly or indirectly and should be restrained from making any findings adverse to him.
10. There is a further complaint by Mr Johns about the use of transcripts of his examination by Mrs Megay. When tendered in evidence the transcripts were made available to media representatives, including journalists from the Herald and Weekly Times Limited (HWT) and the ABC. Some material from these transcripts has already been published. On 14 February 1992 the Royal Commission made an order prohibiting any further publication of material from the transcripts of examinations of Mr Johns. HWT and the ABC have brought proceedings in the Supreme Court challenging the Royal Commission's non-publication order. Nathan J in the Supreme Court has adjourned a hearing of that application pending a determination of these proceedings. Mr Johns seeks orders against HWT and the ABC restraining further publication of material from these transcripts.
11. On 3 and 4 October 1991 Mr Johns gave evidence on oath before the Royal Commission in confidential session concerning his financial resources. This hearing was solely concerned with Mr Johns' endeavours to obtain Victorian Government assistance for legal representation before the Commission. He complains that in the course of the special sitting, certain prejudicial evidence was admitted. He fears that the Royal Commission may make findings adverse to him on the basis of that prejudicial evidence. The Royal Commissioners have stated that they will disregard this evidence. Nevertheless Mr Johns contends that the receipt of the evidence creates a reasonable apprehension of bias on the part of the Royal Commissioners against him and that they should be restrained from making any finding adverse to him on the issue with which that evidence is concerned, despite the availability of other evidence related to that issue.
12. Finally, Mr Johns seeks orders restraining the Royal Commission from
hearing counsel's final submissions in public. He is awaiting
trial in the
County Court on charges alleging the receipt of secret commissions. He says
that the receipt of submissions in public
will prejudice a fair trial on these
charges and constitute a contempt of Court.
II Extension of time under AD(JR) Act
13. Mr Johns' claim for relief against the ASC seeks the exercise of the power of review conferred on this court by the Administrative Decisions (Judicial Review) Act 1977 (the AD(JR) Act). The relevant "decision under an enactment" for the purposes of the AD(JR) Act is the decision of the ASC on 11 February 1991. Therefore he can only proceed if he obtains an extension of the 28 day period prescribed by s.16 for the bringing of applications for review.
14. The ASC opposes such an extension. It points out that on 31 July 1991 Mr Johns, through his solicitors, was advised in writing by solicitors for the Royal Commission of the use of a transcript of his examinations in the very way of which he now complains. Also he admitted in cross-examination that he knew at the time that information he was providing was going to be used by investigators attached to the Royal Commission. He made no protest until January 1992. In the meantime the Royal Commission proceeded. Not only did this cause great expense to all concerned, but the absence of any protest from Mr Johns resulted in the ASC material becoming "inextricably intertwined" in the proceedings of the Royal Commission.
15. There is considerable force in these submissions. However I should at the same time record that I reject the attack that was made in this context on Mr Johns' solicitor, Mr Robert Heathcote of Arnold Bloch Leibler. I accept Mr Heathcote's evidence that in the latter half of 1991 he was not acting as Mr Johns' legal adviser in relation to the Royal Commission, apart from helping him in an application for government assistance for legal representation, and that when Mr Heathcote received the letter of 31 July 1991 and passed it on to Mr Johns he was doing no more than acting, as he put it, as a "post box".
16. In my opinion, considerations of public policy weigh strongly in favour
of a grant of the extension sought. An attack has been
made on the legal
validity of the Royal Commission's proceedings in a fundamental respect. This
has now been fully argued over a
trial lasting five days. I think there would
be a substantial risk to public confidence in the Royal Commission's conduct
of its
proceedings and any subsequent report were these issues to remain
unresolved. This is particularly so when a contributing cause
to the delay by
Mr Johns in bringing his complaint before a court was a persistent refusal of
the Victorian Government to grant him
legal assistance until quite recently,
notwithstanding that all other major figures appearing before the Royal
Commission had substantial
legal representation (most of them at public
expense) and despite the Royal Commission's recommendation for such a grant as
long
ago as 28 March 1991.
III Could the ASC validly aid the Royal Commission?
1. Is that purpose contrary to the ASC Law?
17. The minutes of the ASC for 11 February 1991 include the following:
"(iii) Relationship with the Royal Commission into the18. It is admitted by the ASC that one purpose of the resolution and the arrangements and agreements mentioned was, in the language of Mr Johns' Further Amended Statement of Claim, "to aid, assist and/or enable the Royal Commissioners to obtain material and information for their own use". I shall hereafter use the expression "to aid the Royal Commission" or grammatical variations thereof as meaning the purpose thus described.
Tricontinental Group
The Commission considered a paper concerning the Victorian Royal
Commission's investigation of the Tricontinental Group and the
degree of overlap between its investigations and the
investigations of the ASC and co-operation between the two
agencies.
The Commission discussed the relationship between its obligation
to treat information in its possession in confidence and providing
assistance to the Royal Commission. The Commission noted that the
most important issue relates to whether the Chairman is satisfied
as to the disclosure of the information under section 127(4) and
the delegation of authority in the manner contemplated by the
draft letter.
The Commission noted that the Chairman may authorise the
disclosure of information where satisfied that the information may
assist a Government agency in the performance of its duties. This
power may be delegated to a staff member under section 127(4).
The Chairman emphasised that staff of the ASC, including Ms Megay,
not appear before public hearings conducted by the Royal
Commission and that staff not be subject to cross examination.
The Commission proceeded to make amendments to the draft letter
attached to the paper addressed to Ms Noreen Megay, Director of
Investigations, Royal Commission into the Tricontinental Group of
Companies (an officer of the ASC on unpaid leave). Point (2) of
the draft letter concerning the Interwest investigation was
amended after consultation between the Chairman and Mr Menzies.
Point 7 paragraph 3 was amended by deleting the words "the
Director of Investigations of the Victorian Regional Office, Mr
Pat Whitehouse" and including the words "Regional Commissioner,
Victoria, Mr Ron Trevethan".
RESOLVED that the ASC enter into an arrangement with the Royal
Commission into the Tricontinental Group in the terms set out in
the draft letter attached to the paper, amended to reflect the
views of the Commission.
AGREED that the Chairman delegate authority to Mr Ron Trevethan,
Regional Commissioner, Victoria and to Noreen Claire Megay in
respect of information gathered by her and her assistants under
ASC powers, to disclose information under Section 127(4) in
accordance with the arrangements proposed.
FURTHER RESOLVED that the Commission delegate to Noreen Claire
Megay, Donald James Christie and Kim Audrey Holmes powers of
investigation under Part 3 of the Australian Securities Commission
Act, subject to direction.
ALSO RESOLVED that the Commission execute the Instrument to give
effect to the Commission's decision concerning the delegation of
power to Megay, Christie and Holmes.
AGREED that Ms Megay might authorise Messrs Bruce Chamberlain,
Peter Collens, Paul Fallon, Frances Hall, Malcolm Howell, Kenneth
Jack, Ian McCubbin, Gailie Oliver, Donald Phillips, Jeremy
Seabridge under section 29 of the Australian Securities Commission
Act to inspect documents".
19. The purpose of aiding the Royal Commission is attacked as being an improper purpose and one with no legislative basis. In terms of the AD(JR) Act the grounds in s.5(1)(c),(d),(e) (f) and (g) and s.5(2)(c) and (j) are relied on.
20. In the course of his opening, Mr Johns' counsel asserted that the ASC's arrangements with the Royal Commission to make ASC powers available "would have done credit to the scheming of the tax avoidance days in the 1970's". It was said that there was a scheme to avoid the restrictions which the new legislative regime imposed on the Royal Commission and, in particular, the restriction that the ASC, unlike the NCSC, did not have the power to conduct hearings in public at which the privilege against incrimination was excluded.
21. But as the evidence unfolded, including evidence I directed that the ASC disclose notwithstanding its claim to public interest immunity, nothing emerged to justify counsel's attack. It was not put in cross-examination to Mr Stephen Menzies, the ASC's Special Adviser for Investigations who had been the officer primarily responsible for the February 1991 arrangements, that such an objective in fact motivated those arrangements. Nothing more was heard of the suggestion. Indeed by the end of the case counsel was urging that it did not avail the ASC that the purpose of aiding the Royal Commission might be "beneficent, sensible and well-intentioned". It was said that "well-intentioned bona fides (and) convenience" were irrelevant.
22. For my part, I would not so readily discard such criteria. This part of the case raises the question of the proper construction of the ASC Law and in particular whether the purpose of aiding the Royal Commission was a proper purpose for which the statute conferred power on the ASC. Courts will, as far as possible, avoid giving a construction to a statute which leads to inconvenient or unjust results: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 at 305.
23. The subject matter of the Royal Commission's enquiry - the collapse of the Tricontinental Group - was squarely within the province of the ASC. Subject to compliance with Part 3 of the ASC Law, the ASC could investigate that collapse itself. It would be within power for the ASC to make arrangements with others for the purpose of such an investigation. But in fact another public body was lawfully carrying out an investigation of its own into the same subject matter. Broadly speaking the ASC had three courses open to it: do nothing, conduct its own investigation or aid the Royal Commission. Mr Johns' argument would accept a decision to take the first two courses as proper and lawful, but not the third. That is to say Parliament's intention, as it appears from the ASC Law, would be that inaction or duplication were all right, but co-operation was not.
24. Another way of testing the validity of Mr Johns' argument is to consider other forms of co-operation. Because it is unlawful to aid the Royal Commission by the provision of information it would presumably be unlawful to aid it in other ways. Any kind of aiding of the Royal Commission by the ASC, be it no more than the loan of a typewriter, would be improper and unlawful. Moreover, the suggested interdict would presumably work both ways; the ASC could not properly arrange to receive any assistance from the Royal Commission for ASC purposes, whether by way of information, personnel or material resources.
25. The ASC Law needs to be seen in an historical context. The use of Royal Commissions and similar public enquiries to enquire into serious allegations of criminal, unlawful or improper conduct has long been a prominent feature of Australian life. See generally Hallett, Royal Commissions and Boards of Enquiry (Law Book Co, 1982); McInerney, Moloney and McGregor, Judges as Royal Commissioners and Chairmen of Non- Judicial Tribunals (AIJA, 1985). In recent years permanent statutory bodies with objects and powers comparable to Royal Commissions have been established at both Federal and State level.
26. When Parliament established the ASC in such a setting and gave it investigative powers, it is not lightly to be assumed that Parliament intended the ASC to be a body that jealously guarded its own territory and declined to co-operate with other public bodies, even those whose functions overlapped or indeed might be investigating the same matter, with consequent duplication, expense and inefficiency. It is unlikely that Parliament intended a return to the spirit which produced different railway gauges and other monuments to Australian parochialism.
27. Turning to the ASC Law itself, there are in my opinion clear indications
in the language of the statute that Parliament did not
intend its operations
to be limited in the way Mr Johns' argument would require. I note s.1(2),
which relevantly provides:
"In performing its functions and exercising its powers, the28. The purpose of aiding the Royal Commission would in my opinion be a purpose completely consistent with those objectives.
Commission must strive:
(a) to maintain, facilitate, and improve, the performance
of companies, and of the securities markets and
futures markets, in the interests of commercial
certainty, reducing business costs, and the efficiency
and development of the economy; and
(b) to maintain the confidence of investors in the
securities markets and futures markets by ensuring
adequate protection for such investors; and
(c) ...
(d) to administer national scheme laws effectively but
with a minimum of procedural requirements; and
(e) ...
(f) ...
(g) to take whatever action it can take, and is necessary,
in order to enforce and give effect to national scheme
laws".
29. More particularly, s.127 (4) provides:
"Where the Chairperson is satisfied that particular information:30. I think the term "agency" in s.127 (4)(b) is not intended to be confined to an agent in the private law sense, and would include a public body such as a Royal Commission. Counsel for Mr Johns did not contend to the contrary.
(a) will enable or assist an agency, being the Advisory
Committee, the Panel, the Disciplinary Board, the Review
Board or any other agency within the meaning of the Freedom
of Information Act 1982, to perform or exercise any of the
agency's functions or powers;
(b) will enable or assist the government, or an agency, of a
State or Territory to perform a function or exercise a
power; or
(c) will enable or assist a government, or an agency, of a
foreign country to perform a function, or exercise a power,
conferred by a law in force in that foreign country;
the disclosure of the information to the agency or government by a
person whom the Chairperson authorises for the purpose shall be
taken to be authorised use and disclosure of the information".
31. Thus the statute expressly contemplates the ASC co-operating with bodies
such as Royal Commissions in one vital respect relevant
to the present case,
that is the disclosure of information obtained by the ASC's use of its own
powers. Moreover, it is difficult
to see that any other form of co-operation
would be improper or beyond the purposes contemplated by Parliament when it
established
the ASC. The reference to disclosure under s.127(4) being "taken
to be authorised use and disclosure of the information" is a reference
back to
s.127(1) which provides:
"The Commission shall take all reasonable measures to protect from32. Therefore insofar as s.127(4) imposes restraints on the disclosure of information by requiring the Chairperson's satisfaction as to the matters in (a), (b) or (c), it is I think only concerned with information given to the ASC in the circumstances referred to in s.127(1). The disclosure of other kinds of information (e.g. information not given to the ASC by anyone), or co-operation in other ways not involving the disclosure of information, would seem to be subject to no restraint. That such co-operation could lawfully take place seems to necessarily flow from the functions of the ASC and the objectives set forth in s.1(2).
unauthorised use or disclosure information given to it in
confidence in or in connection with the performance of its
functions or the exercise of its powers under a national scheme
law of this jurisdiction".
33. I have not overlooked the recent English case Marcel v Commissioner of
Police (1991) 2 WLR 1118 (Browne-Wilkinson V-C); (1992) 2 WLR 50 (CA) which
was strongly relied on by counsel for Mr Johns. But I do not think it affects
the conclusion I have reached in the light
of the provisions of the ASC Law to
which I have referred.
2. The continuing investigation; s.14A
34. At a late stage in the case, counsel for Mr Johns advanced an argument which makes it necessary to look at some events which happened prior to the establishment of the ASC on 1 January 1991.
35. On 7 September 1990, the same day on which the Royal Commission was appointed, the Victorian Attorney-General gave a direction under s.291(1) of the Companies (Victoria) Code (the Code) that the NCSC arrange for an investigation into the affairs of the Tricontinental Group by the same gentlemen who were appointed Royal Commissioners. The matters to be investigated were specified in the direction in terms identical with the Letters Patent appointing the Royal Commission. Also on 7 September 1990 the NCSC appointed the Royal Commissioners as Inspectors under s.292(4) of the Code.
36. The argument was based on s.14A of the ASC Law which relevantly
provides:
"(1) This section applies where, immediately before the37. Section 14(1) provides:
commencement of this section:
(a) a direction was in force under:
(i) subsection ... ... 291(1) ... of the relevant previous
law of this jurisdiction relating to the formation of
companies; ...
(ii) ...
(iii) ... and
(b) no investigation pursuant to the direction had yet begun, or
such an investigation had begun but had not yet been
completed or terminated.
(2) The direction has effect:
(a) with such modifications (if any) as are specified, in
relation to the direction, in an application order; and
(b) with such other modification (if any) as the circumstances
require;
as if it were a direction to the Commission under subsection
14(1).
(3) If, immediately before that commencement, an investigation
was being carried out pursuant to the direction:
(a) the Commission must comply with the direction, as it has
effect because of subsection (2), by continuing the
investigation in accordance with the direction as it so has
effect; and
(b) the investigation, as continued by the Commission, is taken
to be an investigation under section 14".
"Where, in the Minister's opinion, it is in the public interest in38. It was argued that the ASC was obliged under s.14A to take all necessary steps within its power to continue the investigation by the three Royal Commissioners in the manner and upon the terms and conditions specified in the Attorney-General's direction and that the resolution of 11 February 1991 did not purport to comply with s.14A and did not as a matter of fact or substance comply with the section.
respect of this jurisdiction for a particular matter to which
subsection (2) applies to be investigated, he or she may by
writing direct the Commission to investigate that matter".
39. I agree with the answer to this argument made by counsel for the ASC. When s.14A(3) speaks of "continuing the investigation in accordance with the direction", that does not impose upon the ASC an obligation to have the investigation undertaken by the Royal Commissioners; nor do the words preclude the ASC itself from undertaking the investigation. As a matter or ordinary language it would be surprising if a direction that the ASC must continue the investigation had the suggested effect that the ASC could not do that very thing but had to leave the investigation to somebody else. Moreover, what is committed to the ASC is the investigation of the matter in question, that is to say the affairs of the Tricontinental Group.
40. In any case, even if the effect of s.14A(3)(a) was to require the ASC to continue the investigation by the Royal Commissioners, then the ASC has done so. The precise method was for the ASC to determine and it has so determined by the arrangement of 11 February 1991 - which was the very thing that Mr Johns originally complained about.
41. It is also to be noted there is no equivalent under the ASC Law of Inspectors appointed under the Code. The circumstances require therefore that the direction be given modified effect under s.14A. The 11 February 1991 arrangement enabled the direction to be given effect to by the collection and transmission of evidence to the Royal Commissioners. Thus, in the terms of the direction, the ASC arranged (in a modified manner) for the continuation of an investigation into the affairs of the Group by the Royal Commissioners.
42. In the end result, I think the s.14A point strengthens the ASC's case.
Although not expressly adverted to in the 11 February
resolution, it provides
additional legal underpinning of the arrangement the ASC made with the Royal
Commission.
IV Delegation of Powers by ASC
43. Mr Johns says that even if aiding the Royal Commission was a proper purpose of the ASC, there were fatal defects in two delegations to Mrs Megay of powers used for that purpose. The first delegation occurred on 11 February 1991 when the ASC, purporting to act under s.102(1) of the ASC Law, delegated to her all of the powers and functions conferred on the ASC by or under Part 3 of the ASC Law ("the investigation delegation").
44. The second delegation ("the disclosure delegation") was by the Chairman
of the ASC, Mr Anthony Hartnell, purporting to act under
s.127(5). It was
signed on 1 March 1991 and was in these terms:
"Pursuant to sub-section 127(5) of the ASC Law, I Anthony Geoffrey45. There is in fact no Victorian Royal Commissions Act. However no point was made of this.
Hartnell hereby delegate to Noreen Claire Megay all of the powers
and functions conferred or expressed to be conferred on the
Chairman of the Australian Securities Commission by or under sub-
section 127(4) of the ASC Law in respect of disclosures of
information gathered by Noreen Claire Megay, Kim Audrey Holmes,
Donald James Christie and persons authorised by them under
Division 3 of Part 3 of the ASC Law to the persons holding office
as Royal Commissioners under the Royal Commissions Act of the
State of Victoria (sic) enquiry into Tricontinental Corporation
Ltd and other matters".
46. For present purposes it can be taken that both delegations could only be made to a "staff member" of the ASC: see ss.102(2)(b) and 127(5).
47. The precise nature of Mrs Megay's employment status was the subject of substantial investigation and debate. She commenced employment as a Legal Officer with the Corporate Affairs Commission of Victoria on 2 February 1983. She remained in continuous employment with that body until 31 December 1990, the day before it was replaced by the ASC. However on 29 October 1990 she was appointed to the position of Director of Investigations of the Tricontinental Royal Commission under a written agreement dated 29 October 1990 made between herself and the Chief Executive of the Victorian Attorney-General's Department.
48. On 3 December 1990 the Commonwealth Public Service Commissioner made her an offer of appointment to the Australian Public Service "as a Legal 2, in position number 19123, Regional General Counsel Branch, in the Victorian Regional Office of the ASC with effect from 1 January 1991". On 12 December 1990 Mrs Megay wrote to Mr R. Trevethan (then Victorian Regional Commissioner designate of the ASC) referring to the letter from the Public Service Commissioner and stating that she would accept the offer of an appointment "conditional upon the granting of leave of absence for the duration of the Royal Commission into the Tricontinental Group of companies. I am presently seconded to that organisation within the Victoria Public Service".
49. On 2 January 1991 a delegate of the ASC made a direction "unattaching"
Mrs Megay from position number 19123 with effect from
2 January 1991. Since
that time she has been on leave without pay from the ASC in order to enable
her to complete her obligations
to the Royal Commission. Her salary has been
paid by the Victorian Government. On 22 January 1991 Mr Trevethan wrote to
her confirming
this arrangement and stating:
"I will be pleased to agree to the secondment of ASC staff to the50. The arrangements of February 1991 made specific provisions for Mrs Megay's relationship with the ASC while she worked at the Royal Commission. The letter of 14 February confirming the arrangements include a statement that:
Royal Commission. Staff who accept secondments will be regarded
as unattached officers, and upon return to the ASC, they will be
placed in permanent positions as these become available. The time
in which secondees spend at the Royal Commission will be counted
as service in the Commonwealth Public Service".
"It seems appropriate that the ASC (whose acts are subject to51. The letter went on to state that, for those reasons, the delegation would be subject to a number of conditions. One condition required reporting by the delegates to the ASC on a monthly basis as to the circumstances in which their authorities may have been exercised by reference to persons examined and notices issued and answered. Another condition was that:
administrative and judicial review in accordance with applicable
Commonwealth law) can monitor and, if necessary supervise, the
actions of staff to whom authority is delegated under section
102".
"To the extent that the delegate is exercising delegated powers,52. On 16 March 1992 Mrs Megay wrote to the ASC asking that she be advised as to her leave without pay category and noting that the period of approved leave without pay expired on 1 May 1992. She noted that her term at the Royal Commission would not be completed by that date and expected that her services would be required by the State of Victoria in respect of the Royal Commission for some time beyond that date. She asked for the current period of approved leave without pay to be extended. That request was accepted in a letter from the ASC dated 19 March 1992 which advised that her leave without pay category was "leave to engage in employment in the interests of the Australian Public Service" and that the ASC had agreed to extend the period of leave without pay to enable her to complete her obligations to the Royal Commission.
the delegate remains subject to direction by the ASC (although in
practice, the ASC would only intend to give any such direction
after consultation with the Royal Commissioners)".
53. Section 121 of the ASC Law provides that "... the Commission's staff shall be persons appointed or employed under the Public Service Act 1922". I agree with counsel for Mr Johns that this provision is not a definition of the term "staff of the Commission" but rather a stipulation of a particular qualification that staff are to hold. I also agree that the word "staff" as used in the ASC Law is not a term of art and has no particular technical meaning. While in some contexts the term "staff" might comprehend only persons who were actually engaged in the work of a particular establishment at a given time, see e.g. Parker v Westby (1941) St R Qd 47 at 53, the word is very frequently used to include persons who might be absent from their place of employment, perhaps for some considerable time and perhaps without pay. Persons on leave whether annual, long service, compassionate or for study purposes, would ordinarily be regarded as still being on the staff of their employer. There is in my opinion nothing in the ASC Law to indicate that the word "staff" is used in a restricted sense. I think the conclusion I have reached on the first part of the case supports this view. Once it is accepted that it was a proper exercise of the ASC's powers to aid the Royal Commission under the 11 February 1991 resolution, then the seconding of ASC staff is a very obvious and practical way of carrying out such an arrangement. Mrs Megay's work with the Royal Commission was carried out with the express agreement of her employer and indeed was the very purpose for which she had been granted leave. It was also work which was for the direct benefit of her employer in the performance of its statutory function. And, most importantly, her use of the delegated powers was to be directly monitored by the ASC in the way indicated in the 14 February letter.
54. In my opinion therefore the two delegations to Mrs Megay were validly
made to her as a staff member of the ASC.
2. Was the investigation power validly delegated?
55. The point taken here is that the resolution of 11 February 1991 delegated to Mrs Megay "powers of investigation under Part 3" and hence it is said that it extends only to Division 1 of Part 3, which is headed "Investigations" and not to Division 2 - "Examination of Persons" and Division 3 - "Inspection of Books".
56. I think this point is without substance. The natural meaning of the
expression "powers of investigation" would I think extend
to all of the powers
conferred by Part 3.
3. Did the disclosure delegation extend beyond 1 March 1991?
57. In my opinion the delegation is not so limited. I think "gathered" in
the delegation is used in the future perfect tense. It
extends to information
which will have been gathered by the delegates after the date of delegation.
That conclusion is reinforced
by the reference to the Royal Commissioners
"enquiring into Tricontinental Corporation Ltd and other matters" which
suggests a continuing
state of affairs. When one turns to the extrinsic
circumstances, the fact is that as at 1 March 1991 no information at all had
been
gathered by the delegates, which rather confirms that the delegation was
intended to operate as to the future.
V Confidentiality
58. In his Further Amended Statement of Claim Mr Johns claims that the ASC
material obtained by the ASC for the purposes of the 11
February 1991
arrangement was "given to the ASC in confidence and was by its nature and by
the ASC Law to be kept and maintained
as confidential by the ASC". He then
alleges that there was a breach of that obligation of confidence by the ASC
wrongfully giving
such confidential information to the Royal Commission and by
the Royal Commission causing or permitting the ASC material to be tendered
in
public hearing without the consent of the ASC or the persons who provided that
material.
1. Disclosure by ASC to the Royal Commission
59. In my opinion the disclosure of the ASC material by the ASC to the Royal
Commission was lawful because it was expressly authorised
by s.127(4) and also
by s.25(3). Such authority is not conditioned on the consent of the person
who provides the information to
the ASC.
2. Disclosure by the Royal Commission
60. When the transcripts of Mr Johns' examinations under Part 3 of the ASC Law came into the possession of the Royal Commission, was there any legal restraint requiring the Royal Commission to keep them confidential? This question arises against a background in which the Royal Commission could lawfully conduct its proceedings in public and had as a matter of policy decided to do so as far as reasonably possible.
61. In Fraser v Evans (1969) QB 349 at 361 Lord Denning MR, after referring
to Prince Albert v Strange (1849) 1 Mac and G 25 and Duke of Argyll v Duchess
of Argyll
(1967) Ch 302 said:
"Those cases show that the court will in a proper case restrain62. There is no suggestion in the evidence that when Mr Johns was examined by Mrs Megay he sought to impose any obligation of confidence in respect of the information he was giving her or that she gave him any assurance that the information would be treated as confidential.
the publication of confidential information. The jurisdiction is
based not so much on property or on contract as on the duty to be
of good faith. No person is permitted to divulge to the world
information which he has received in confidence, unless he has
just cause or excuse for doing so. Even if he comes by it
innocently, nevertheless once he gets to know that it was
originally given in confidence, he can be restrained from breaking
that confidence".
63. On 31 July 1991 Mr Brian Doyle of Clayton Utz, solicitors for the Royal
Commission, wrote to Arnold Bloch Leibler the letter
concerning Mr Johns to
which I have already referred. The letter referred to an examination by Mrs
Megay of Mr Johns concerning
a transaction involving a company called Atoll,
this being the first interview with Mr Johns that Mrs Megay had conducted. Mr
Doyle
noted that a copy of the amended transcript of the interview had been
made available to Arnold Bloch Leibler to be collected at the
Royal Commission
and continued:
"Mr Johns telephoned the writer early in the afternoon of Friday64. The letter was passed on by Arnold Bloch Leibler to Mr Johns. He was cross-examined about this by the Acting Solicitor-General as follows:
26 July saying that he agreed to the amendments proposed in the
memorandum we had earlier sent to you and he said that he had a
number of additional amendments. He and I went through these on
the telephone and I agreed to each one. The amended transcript of
which he would have a copy contains all of the agreed amendments.
It has been tendered as an exhibit in the hearing commencing today
on the Atoll transaction. Please note that the copy of the
exhibit publicly available has been amended to the extent that
..." (the letter then refers to some deletions from the transcript
not presently relevant)".
You were aware that the Atoll transcript had been tendered in65. He also admitted reading in newspapers that transcript from other people who had been the subject of similar examinations had also been tendered in evidence at the Royal Commission. He read "one or two" of such reports. A number of newspaper reports referring to the tendering of transcripts of his own examination were put to Mr Johns and he agreed that he had seen one of them before, or at least the headline of it. This was an article in the Australian Financial Review of 1 August 1991 dealing with the Atoll transaction which included the passage:
evidence before the Royal Commissioners?---Only through receipt of
a copy of that letter.
Yes. So you knew that in July - late July or early August 1991?---
Yes, but I hadn't turned my mind to it at that point in time.
No, but you knew that it had been tendered?---I had received a
copy of it in advice.
Was there anything said to you by any member of the staff of the
Commission after August 1991 that suggested that other transcripts
that had been produced as a result of examinations of yourself
might not be tendered in evidence at the Royal Commission?---No,
neither was it suggested they would be tendered.
No, but you knew that one had?---I had received an advice which I
hadn't - probably briefly read and hadn't directed my mind to it.
You did not doubt that the advice that you received that
transcript had been tendered was true?---That's - I would assume
the letter coming from Clayton Utz would be true.
Right. So you knew as at the beginning of August that some
transcript had been tendered was?---Via the advice from Clayton
Utz to Arnold Bloch Leibler, yes, it was in that letter.
"In an interview with Commission staff, Mr Johns said he had known Mr66. I find that Mr Johns knew as a fact in early August 1991 that the transcript of his examination concerning the Atoll matter had been tendered as an exhibit at a public hearing of the Royal Commission, that transcripts of subsequent interviews were likely to be dealt with in the same way and that his assertion that he had not "turned his mind to it" means only that he did not then attach any particular significance to those facts.
Sng since 1984 but had been introduced to Mr Peh in 1987 by Mr Sng and
Mr Kevin Parry. Mr Johns agreed that Mr Sng had simply asked for 'some
money to buy some shares'".
67. I think the conclusion to be drawn is that had Mr Johns made any request for confidentiality at the time of his examinations, or even had in his mind any expectation of confidentiality, his subsequent knowledge of the way the transcripts of examination were being dealt with would have prompted an immediate reaction from him. Nor, in my opinion, was Mr Johns in a position to have bargained for an assurance of confidentiality, even had the matter occurred to him, given the compulsory nature of the examination (see ss. 19(2),21(3),61(1) and 68(1)) and the express provisions of s.127(4)).
68. The Full Court of this Court dealt with a comparable claim for
confidentiality in Bercove v Hermes (No.3) (1983) 51 ALR 109. Mr Bercove had
given evidence before the Costigan Royal Commission in camera and was told
that the proceedings were confidential.
However the Commission subsequently
released a transcript of his evidence for use in Public Service disciplinary
proceedings. In
seeking to review a decision of the Disciplinary Appeal Board
confirming his dismissal from the Public Service, Mr Bercove complained
of
that use of the transcript. The Full Court said (at 114):
"When the Commissioner spoke of the 'confidential' character of69. Their Honours referred to Re Pergamon Press Ltd (1971) 1 Ch 388 where Lord Denning MR (at 400) in expounding the right to confidentiality which may arise in the case of examinations under statutory compulsion contemplated the giving of express assurances. Lord Denning said:
the proceedings, he was presumably exercising one or other of the
statutory powers given him by s.6D(2) of (3) (of the Royal
Commissions Act 1902 (Cth)) or even a power available under the
general law and reserved by s.6D(5), and it may be possible to
spell out of the circumstances of the case a duty to act fairly in
this connection subject always to the overriding requirements of
the public interest".
"Every witness must, therefore, be protected. He must be70. The Full Court went on to say (at 115):
encouraged to be frank. This is done by giving every witness an
assurance that his evidence will be regarded as confidential and
will not be used except for the purpose of the report. This
assurance must be honoured".
"In considering the extent of confidentiality of evidence given71. Their Honours referred to London and County Securities Limited v Nicholson (1980) 3 All ER 861 at 866. In that case Browne - Wilkinson J discussed the public interest which arises in the case of such witnesses in contrast with that of police and other informers where there was a public interest to provide the informant with total confidentiality so as to ensure that informers as a class will know that they cannot be identified. His Lordship continued:
before a court or an administrative body the particular role
played by the witness can be significant. In the ordinary case,
confidentiality of the evidence is not complete".
"In the present case, express statutory provisions show that in72. The Full Court said (at 116):
the view of Parliament there are other interests which outweigh
the public interest in giving potential witnesses the assurance of
complete confidentiality".
"Since the appellant was not acting as an informer or in any73. I think it follows from the foregoing that an essential element of any claim for confidentiality in such circumstances is the giving of and reliance on an assurance of confidentiality. That element was present to a limited degree in Bercove but was held not to be sufficient, and in any event outweighed by public interest considerations. In the present case, as I have observed, there is no trace of any such assurance.
similar role, total confidentiality could not be assured ... It
follows, in our opinion, that no total assurance of
confidentiality was given to the appellant by the Commissioner ...
Further, in determining where the public interest ultimately lay
in a case such as this, involving, as it did, the working of the
Public Service, we think that it was reasonably open to the
Commissioner and the Board to form the view that, in all the
circumstances, the public interest required the Board to be
informed of these matters in dealing with the disciplinary charges
brought against the appellant. We therefore find no error of law
and no denial of natural justice in this connection".
74. The mandatory requirement that ASC examinations be conducted in private (ASC Law s.22(1)) does not affect this conclusion. Such a provision does not to my mind create a relevantly different situation from that of an investigator exercising a statutory discretion to hold a hearing in private, as occurred in Bercove. Indeed the latter case might be thought to be stronger in favour of confidentiality because there is at least positive conduct by the investigator which might give some indication of a promise of confidentiality.
75. I conclude therefore that the Royal Commission received the ASC material free of any obligation of confidentiality to Mr Johns. Was there any such obligation owed to the ASC or arising under the ASC Law?
76. In the draft letter referred to in the ASC resolution of 11 February 1991 it was stated that disclosure to the Royal Commission under s.127(4) was "on the basis that all information will be regarded as confidential and only published with the (ASC's) consent". The letter subsequently sent to the Royal Commission on 14 February repeated that stipulation and it was accepted by the Royal Commission.
77. Subsequently consent to such publication was sought by the Royal
Commission and given by the ASC in the course of correspondence
between July
and September 1991 which is exhibited to the affidavit of Mr Menzies. Thus
the allegation of lack of consent by the
ASC is wrong as a matter of fact. In
the course of that correspondence, Mrs Megay, in a letter dated 9 September
1991 to Mr Menzies,
said in relation to the tender in public hearings of
material obtained under ASC powers, it was:
"... crucial to the ongoing efficiency of the Royal Commission78. At this stage I should note that I have already dealt with the question whether the ASC could, in the circumstances of this case, lawfully disclose to the Royal Commission information obtained in the course of examinations under ASC powers. Before further considering whether the Royal Commission could lawfully make public disclosure of that information, I note that there might be an intermediate question, namely whether the ASC could lawfully consent to the Royal Commission publicly disclosing the information.
that transcripts of Johns' interview be available publicly in the
various transaction reports". (her emphasis)
79. In final submissions on the last day of the hearing (21 April 1992) counsel for Mr Johns sought to attack such consent. Counsel for the ASC objected. I upheld his submission that this was a substantial departure from the case pleaded in the Further Amended Statement of Claim, a case where the attack was limited to allegations of wrongful giving of information by the ASC to the Royal Commission and the wrongful tendering in public hearing of that information by the Royal Commission "without the consent of the ASC or the persons who provided that material" (see par 16). I then rejected an application by Mr Johns' counsel for a further amendment to the Statement of Claim. It seemed to me that the application came far too late. The allegation that the publication by the Royal Commission had been made without the consent of the ASC had been clearly refuted by the correspondence exhibited to Mr Menzies' affidavit, which was sworn and served on 6 April. The last amendment to the Statement of Claim for which leave had been granted was made on 13 April. No attempt was made until 21 April to raise a case that, if there was a consent by the ASC, such consent was unlawful. Had this been done earlier the course the ASC took, and in particular its decision as to the calling of evidence, would have been affected.
80. But in any case I think the ASC, in disclosing information to the Royal
Commission subject to a condition that it not be published
without the ASC's
consent, was not acting contrary to the ASC Law. Section 127 does not
expressly or by necessary implication impose
on the ASC a statutory obligation
of confidentiality in absolute terms. On the contrary s.127(6)(b) provides
that:
"Nothing in any of subsections (2), (3) and (4) limits:81. "Authorised" here means authorised by the ASC - it is not referring to authorisation by persons such as Mr Johns who provide information to the ASC. The only limitation on the ASC is that, in this as in all other respects, its powers must be used for the purposes intended by Parliament. If for example the ASC were to authorise the disclosure of information obtained from Mr Johns under a Part 3 examination to a private citizen for the purposes of litigation against Mr Johns no doubt that would be an improper and unlawful purpose.
(a) ...
(b) what may otherwise constitute, for the purposes of
subsection (1), authorised use or disclosure of
information".
82. The purpose of s.127 is not to prohibit the ASC from disclosing information for a proper purpose but to ensure that disclosure is strictly controlled. This is achieved by requiring, as the general rule, authorisation by the ASC itself. Thus it is only in carefully prescribed circumstances that disclosure can be made by a member or staff member of the ASC (ss.(3)), the Chairperson (ss.(4)) or his or her delegate (ss.(5)).
83. If the Royal Commission obtained the information lawfully, and free of any right of Mr Johns to prohibit its publication, then the only remaining question is whether the Royal Commission acted lawfully in deciding to seek the ASC's consent for publication and acting on that consent once obtained. If subject to judicial review at all (a proposition which the Acting Solicitor-General would resist), such a decision could probably only be attacked as being unreasonable in the special Wednesbury administrative law sense, that is to say a decision so unreasonable that no reasonable decision maker could make it. (I do not think any question of natural justice to Mr Johns arises because, for the reasons I have stated, no obligation of confidentiality was owed to him: cf Bercove, supra.)
84. There is in the present case no basis for saying that the Royal Commission's decision was unreasonable in the sense indicated. Mrs Megay thought that the use of the transcripts in public hearing was "crucial to the ongoing efficiency of the Royal Commission". She was in a good position to make this assessment - certainly a better position than I am. There is nothing to say that her view was wrong, still less that it was a view which no reasonable person in her position could have arrived at. Equally it was a request to which the ASC could reasonably accede.
85. I think it follows that the media could lawfully publish transcripts
tendered to public hearings since they were not subject
to as rights of
confidentiality enforceable by Mr Johns, nor had the use of them by the ASC or
the Royal Commission involved any
unlawful conduct.
VI Apprehension of bias
86. At the hearing on 4 October 1991 Mr Johns was cross-examined by counsel assisting the Royal Commission about some financial transactions involving a particular company. Counsel put to Mr Johns a number of documents. Most of the cross-examination involved Mr Johns agreeing that the documents appeared to state the matters which counsel said they did. He also gave some explanations of the transactions. During the course of the cross-examination both the Chairman of the Royal Commission and counsel then appearing for Mr Johns on several occasions made the point that that line of questioning did not seem to relate to the purpose of the special hearing, namely the ascertaining of the assets and liabilities of Mr Johns for the purpose of his application for legal assistance.
87. On 6 February 1992 counsel for Mr Johns made a number of submissions to the Royal Commission, including a complaint about the receipt of the evidence to which I have just referred. The point was made that insofar as the evidence was incriminating, it was extremely unfair because the whole purpose of the 3 and 4 October hearings was to enable information to be obtained about Mr Johns' application for legal assistance to advise him on his rights, including the privilege against incrimination, in respect of his appearance at the Royal Commission generally. I should add that the Royal Commissioners were not asked to make any finding about the separate issue of Mr Johns' financial position, but merely to make the evidence available to the Attorney-General's Department so that a decision could be made.
88. On 14 February 1992 the Royal Commission delivered rulings on a number of matters including the evidence given on 4 October. In the meantime Mr Johns had, when giving evidence before the Commission on 11 December 1991 claimed privilege against incrimination. The Attorney-General had proceeded in the Supreme Court under s.20 of the Evidence Act 1958 (Vic) but on 20 January 1992 Mr Johns' claim had been upheld by Marks J.
89. In their ruling on 14 February 1992 the Royal Commission said that in the
light of the objection and its upholding by the Supreme
Court it would be
unfair to make use of answers given in special sittings held for a different
purpose. The Commission continued:
"Counsel assisting relied on In re Preston [1984] UKHL 5; (1985) 1 AC 835 and90. After pointing out that the Commission's solicitors in correspondence, and counsel assisting in statements made at the time, both made it clear that they reserved the right to rely on evidence given to the special sittings for the general purpose of the Commission, the Commission concluded:
Bunning v Cross [1978] HCA 22; (1978) 141 CLR 54 for the proposition that
evidence should only be rejected in a case such as the present if
it had been obtained with an improper motive, by mistake of law or
in circumstances giving rise to a contractual estoppel. We accept
that there was no improper motive on the part of any of the
officers of the Commission, nor was there any mistake of law or
statements made or assurances given which could amount to an
estoppel. However that is not the end of the matter. We believe
the Commission has a responsibility to do what is fair in all the
circumstances having regard both to the public interest and to the
common law privilege against self-incrimination. Stephen and
Aickin JJ. in Bunning v Cross at 77, stressed the importance of not
constructing legal rules which would fetter judicial discretion to
do what is fair in any particular case".
"In our view it would clearly be contrary to the spirit of that91. Mr Johns was not content with the Royal Commission's ruling that it would not act on evidence given by him on 4 October 1991. At a sitting of the Commission on 25 February 1992 his counsel submitted that the evidence was such that the Commission could not make any findings or report at all concerning the transaction adverse to Mr Johns. To do so it was said would offend against "apprehension of bias" principles because a reasonable and fair-minded bystander might expect the Commissioners would be unable to put the evidence in question out of their minds. Reference was made to the decision of the High Court in Amoe v Director of Public Prosecutions (Nauru) [1991] HCA 46; (1991) 103 ALR 595 at 603-604. On 3 March 1992 the Commission ruled as follows:
Supreme Court judgment to make use of the answers given at the
special sittings, when Mr Johns had no real freedom of choice as
to whether he would answer questions or not. Counsel assisting
have urged on us that Mr Johns chose to attend and give evidence
at this time, that he did so for his own purposes - namely to
obtain financial assistance - and that this 'does not create the
kind of unfairness which would preclude the Royal Commission from
subsequently receiving that evidence'. However the fact remains
that Mr Johns' evidence would not have been given on this occasion
except for his application for funding, which was made conditional
upon his giving evidence as required".
"We consider that, when seen against the background of other92. The Commission concluded by directing that no further use be made for the Royal Commission's purposes of the evidence given by Mr Johns at the special sittings on 3 and 4 October 1991 and that the transcript of those days and the documents would remain confidential.
relevant evidence, the nature of the questions asked of Mr Johns
and the answers given, and their relationship with the issues to
be decided, were not of the exceptional or character referred to
in Amoe's case. Further, the Commission is confident that it will
have no difficulty in segregating and disregarding the quite
discrete evidence which has been put aside. Having regard to the
composition of the Commission, it is reasonable and proper for it
to proceed on that basis: R v Colchester Stipendiary Magistrate
(1979) 1 QB 674 at 686. Any findings made by the Commission about
the particular transaction referred to on 4 October last will be
based entirely on other evidence. The alternative - making no
findings at all on the matters touched on in the discarded
evidence - would be a serious abdication of responsibility. It
will, however, be appropriate for final addresses in relation to
the particular transaction to be held in camera, and for that
aspect of the report to be confidential".
93. The general principle is not in doubt. In Livesey v NSW Bar Association
[1983] HCA 17; (1983) 151 CLR 288 at 293 the High Court stated the rule to be:
"... that a judge should not sit to hear a case if in all the94. I note at once that Mr Johns himself does not in his affidavit or oral evidence depose that he has any apprehension that the Royal Commissioners would not bring an impartial and unprejudiced mind to questions involving him. One therefore must consider whether any such apprehension would be entertained by members of the public, personified by the hypothetical reasonable and fair-minded bystander of whom Mr Johns' counsel spoke.
circumstances the parties or the public might entertain a
reasonable apprehension that he might not bring an impartial and
unprejudiced mind to the resolution of the question involved in
it".
95. The real complaint of Mr Johns under this head is not so much that the Royal Commissioners have conducted themselves in a way that such a bystander might apprehend they have prejudged matters against him - in the way that for example happened in Livesey - but rather that they were not capable of doing what they said they would do, namely disregard certain evidence when considering a particular issue.
96. It is an everyday task for judges to disregard evidence which has been
successfully objected to as irrelevant or otherwise inadmissible.
This is one
of the fundamental skills that a legally qualified tribunal of fact brings to
bear - in contrast with a jury where exposure
to inadmissible evidence of a
substantial nature often does require the discharge of the jury. In Amoe the
High Court was dealing
with a criminal trial but one conducted by a judge in
Nauru sitting without a jury. The Court said (at 603):
"If a judge, trying a case without a jury, comes to the conclusion97. It is true that the High Court go on to say (at 604) that:
that the prejudicial effect of an answer would outweigh its
probative value, must he or she disqualify him or herself? The
answer must surely be that it is only in the most exceptional case
that a judge is required to disqualify him or herself because a
prejudicial question has been asked or answered. In a trial
before a judge without a jury, prejudicial questions and answers
are perceived as having a different effect from that which, by the
common law tradition, they have in a trial by jury".
"From time to time, cases occur where the nature of the98. In the present case I think the evidence in question was quite unexceptional. Most of it consisted of financial documents which really spoke for themselves. Insofar as there was explanation or comment by Mr Johns, it may or may not be believable and may or may not be consistent with honesty. It did not strike me as in any way scandalous or sensational. I totally fail to see how any reasonable bystander could apprehend that the Royal Commissioners would not simply do what they said they would, namely put it out of their minds in deciding this particular issue. The Chairman of the Royal Commission was a judge of a superior court for eighteen years. Mr Williamson QC commenced practice as a barrister in 1957 and was appointed Queen's Counsel in 1975. I think the reasonable bystander would be satisfied that they were capable of disregarding allegedly prejudicial evidence when they said they were going to.
prejudicial material and its relationship with the issues which
have to be decided is such that the appearance of impartiality is
necessarily destroyed by a judge deciding the case after hearing
or reading such material. In such a case, the prudent judge will
disqualify him or herself from further hearing the matter,
irrespective of the degree of confidence that the judge has in his
or her ability to determine the case uninfluenced by the
prejudicial material. If the judge fails to do so, it will fall
on the appellate court to set aside any resulting conviction".
99. I think also such a bystander would be entitled to have regard to the way in which the Royal Commissioners have treated Mr Johns generally. They exercised the discretion favourably to him in declining to rely on his cross-examination at the special sitting on 4 October 1991. Moreover on 14 February 1992 the Commissioners had ruled, notwithstanding cogent arguments to the contrary from their own counsel assisting, that there would be no further tender of ASC transcripts of interviews with Mr Johns and that no further use would be made before the Commission of the transcripts already tendered. In the exercise of a discretion they came to a conclusion that the public interest in the presentation of evidence lawfully obtained from Mr Johns under ASC processes was outweighed by the unfairness to Mr Johns in using that evidence. Also they had on 28 March 1991 made a strong recommendation that Mr Johns be granted legal assistance.
100. Since the hypothetical bystander is presumably a lay person, he or she
when asked about any apprehension of bias of the Royal
Commission against Mr
Johns might respond in the vernacular. I think that such a bystander would
express the view that, so far from
creating any apprehension of bias, the
Royal Commission have given Mr Johns a very fair go.
VII Contempt of Court
101. There was only limited material before me to indicate the nature of counsel's submissions which are to be made before the Royal Commission. Some of that evidence was given in camera and there are therefore problems in explaining the reasons for my decision on this particular issue in an intelligible way. Within those constraints, I think I can make a number of factual findings which would not be contentious.
102. The charges on which Mr Johns is presently awaiting trial in the County Court allege breaches of ss.176 and 321 (1) of the Crimes Act 1958 (Vic). He is alleged to have corruptly received secret commissions in relation to the advance of monies from the Tricontinental Group to certain persons and companies. The Director of Public Prosecutions is to apply late this month to the Chief Judge of the County Court requesting the trial to be listed at the beginning of February 1993. Final submissions of counsel to the Royal Commission would have already been made had it not been for the commencement of the present proceedings and it is likely that they will be made very shortly after the judgment in this present case is delivered and will be in public or in private session depending on the result of this case. I do not think I can speculate as to the possibility of appeals, stays and other contingencies. The best prediction I can make therefore is that counsel's submissions will be made in about early May 1992 and the County Court trial will commence in February 1993.
103. The Royal Commission has not investigated the subject matter of criminal trial. There is only one transaction that has emerged in evidence before the Royal Commission which might raise the possibility of receipt of secret commissions by Mr Johns and the Royal Commission has agreed to hear that matter in camera. A limited number of the matters to be raised in the submissions of counsel assisting the Royal Commission might concern allegations of conduct by Mr Johns' analogous to the receipt of secret commissions. The only indication of the subject matter of submissions of counsel other than counsel assisting the Royal Commission is a statement in the course of the Commission's proceedings by Mr John Middleton QC who appears for officers of the Tricontinental Group other than Mr Johns. Mr Middleton has indicated that his clients' case will be that Mr Johns was the central figure in the demise of Tricontinental.
104. The law on contempt of court in relation to pending proceedings has been authoritatively restated by the High Court in Hinch v Attorney-General (Vic) [1987] HCA 56; (1987) 164 CLR 15. More specifically, the High Court has also considered circumstances in which the conduct of a Royal Commission might constitute contempt of pending proceedings: State of Victoria v Australian Building Construction Employees and Builders Labourers Federation [1982] HCA 31; (1982) 152 CLR 25. These authorities have been the subject of a lucid and helpful analysis by Ms Sally Walker in Freedom of Speech and Contempt of Court: the English and Australian Approaches Compared (1991) 40 International and Comparative Law Quarterly 583.
105. I reject at the outset a submission put by the Acting Solicitor-General
that it is not possible to commit a contempt by the
publication of general
adverse comments relating to a litigant in pending proceedings and that, to
constitute a contempt, publication
must deal with the subject matter of the
litigation itself. In support of that proposition passages were cited from
BLF 152 CLR
at 54-55 and Hinch 164 CLR at 22, 28 and 54-55. In my opinion the
passages cited have to be read in the context of the cases in
which they were
made. But in any case in one of them, in the judgment of Deane J in Hinch at
54-55, where his Honour refers to what
he said when a member of the Federal
Court in BLF, it is said to be a contempt if statements made have a tendency
to affect the due
administration of justice in any of three related ways, one
of which was:
"(iii) to prejudice or bias the public mind in favour of one106. This seems to me inconsistent with ithe suggested limitation. If the proposition was correct, anyone could publish, during the progress of a criminal trial, the most violent vilification of the character of the accused, provided only that no reference was made to the issues in the trial itself. Authorities such as Registrar of the Court of Appeal v Willesee (1985) 3 NSWLR 650 are directly to the contrary. I do not think the law of contempt is constrained in the artificial way suggested.
side as against the other side and thereby substitute
prejudgment or, in some cases, pre-trial by the media,
for determination by the courts of the land".
107. However, the extent to which the publication alleged to constitute a contempt does touch on the subject matter of the pending proceedings will of course always be a relevant factor and certainly is so in the present case.
108. Hinch makes it clear that there will be no contempt unless the publication of the material creates a real risk of interference with the administration of justice. The next step involves a balancing exercise. The court must decide whether the publication of prejudicial material is excused because the public interest in freedom of expression outweighs the public interest in the administration of justice: see 164 CLR at 46-48 per Deane J, 68-70 per Toohey J, at 46-48 per Deane J, at 83-86 per Gaudron J.
109. On the evidence available to me I am not satisfied that the making of counsel's submissions in public would create a real risk of interference with the administration of the justice in the course of Mr Johns' trial in the County Court. I have reached this conclusion largely because of the lapse in time that will occur and (although this is not, for the reason I have mentioned, a conclusive factor) the fact that submissions to the Royal Commission will not touch on the subject matter of the County Court trial. In this regard I would respectfully adopt the comment made by the Full Court of the Supreme Court of Victoria in National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd (1989) VR 747 at 762 that "the intelligence of Australian jurors and witnesses is frequently underrated". A juror in Mr Johns' trial in February 1993 might recall reports of adverse comments made about him in counsel's submissions some seven or eight months previously. But I do not see why such a juror is incapable of putting such matters out of his or her mind, along with other publicity about Tricontinental and Mr Johns which the trial judge will doubtless warn against, and concentrate on the evidence and argument in the trial.
110. But insofar as there is any risk of interference with the County Court
trial, I think the balancing exercise mandated by Hinch
requires a conclusion
that no contempt would be committed. I refer in this regard to what was said
in BLF, particularly by the present
Chief Justice. In that case the Federal
Court had restrained a Royal Commission enquiring into the BLF as being a
threatened contempt
of deregistration proceedings in that court. This
restraint was not absolute but extended to prevent proceedings being held in
public.
The majority of the High Court held that it had not been shown that
the conduct of the Royal Commission in public tended to interfere
with the
course of justice. Mason J said (at 97):
"It was no doubt a recognition of this aspect of the public111. Similarly Wilson J said (at 135):
interest that persuaded the Federal Court to impose, not an
absolute restraint on the proceedings, but a restraint on
proceedings in public. However, this restraint, limited though it
is, seriously undermines the value of the inquiry. It shrouds the
proceedings with a cloak of secrecy, denying to them the public
character which to my mind is an essential element in public
acceptance of an inquiry of this kind and of its report. An
atmosphere of secrecy readily breeds the suspicion that the
inquiry is unfair or oppressive. Especially is this so when the
enquiry has power to compel attendance and testimony".
"It is relevant to observe that there is a distinct public112. In Hinch Gaudron J (at 84) pointed out that, in the context of the issues under consideration in BLF:
interest to be served by the proceedings of a royal commission
being held in public. I do not place much weight on the
'cleansing effect' to which the Solicitor-General for Victoria
referred, but public confidence in the integrity of government
action and in the fair and reasonable conduct of an inquiry is
most likely to be maintained in the proceedings are open to public
gaze and report. It may also contribute to a more effective
inquiry".
"... it is not simply freedom of speech, or discussion, but more113. And in BLF (at 98) Mason CJ stressed:
properly, freedom of information, that enters into competition
with the public interest in protecting the administration of
justice from risk of interference".
"... the overriding importance of freedom of discussion and speech114. There is another aspect of this public interest. In Hinch Gaudron J noted (at 85) that:
to which should be added the equal importance of the public having
access to information which it has a legitimate interest in
knowing".
"... the public interest in obtaining information is not an115. The subject matter of the information in the present case is the collapse of the Tricontinental Group, self-evidently a topic of the highest public interest. Consistently with Gaudron J's view, what in my respectful view is also relevant is the quality of the information. If one can imagine a spectrum, with, at one end, comment that is little more than idle gossip or ill-informed speculation, then information provided in the course of the Royal Commission's proceedings would be at the opposite end. At great public expense - $800,000 per month - many highly skilled people have been investigating the collapse with the aid of substantial statutory powers. Much of the information produced would be unlikely to emerge from other kinds of enquiries such as investigative journalism, still less from what could be gained by ordinary members of the public using their own resources.
interest of constant value. Its value varies according to the
subject-matter of the information, and its relevance to other
heads of public interest".
116. In the present case counsel for Mr Johns sought to confine statements of principle in BLF and Hinch to the hearing of evidence, as distinct from submissions of counsel. It was also said that counsel appearing for other parties (as distinct from counsel assisting the Royal Commission) were required to put submissions according to their instructions and there was no public interest in those submissions being heard in public.
117. I do not accept these distinctions as valid. It was not suggested they were supported by any authority, or in particular by any statements in BLF or Hinch.
118. Counsel play a necessary role in the conduct of Royal Commissions such as the present one. Were that not the case, Royal Commissions presumably would not grant counsel leave to appear. Most who became involved with Tricontinental will be seeking to exculpate themselves and, not infrequently, blame others. A critical analysis and testing of the various cases by counsel for and against is an essential step in the Royal Commission's investigation of a vast mass of complex evidence.
119. Rules which give protection to what is said in court, for example absolute privilege and immunity from action for negligence (cf Giannarelli v Wraith (1988) 165 CLR 543 at 557, 595) extend equally to judge, juror, witness and counsel because it is recognised all are essential to the judicial process. In the same way, the public interest in the access to information applies equally to what is said by witnesses, counsel and the Royal Commissioners themselves in the course of investigating what is beyond argument a matter of legitimate public interest.
120. Nor do I think any distinction can be drawn between counsel assisting the Royal Commission and others representing interested parties. Submissions of the latter kind are not, and will not pretend to be, impartial. But there is no reason to assume they will not be arguments legitimately open on the evidence, even if forcefully or even colourfully put. The public's right to access to information is not limited to information which is anodyne in content and boring in expression.
121. I therefore find no basis for restraining the making and receipt of
counsel's submissions in public.
VII Orders
122. Since I find no case of unlawful conduct on the part of the ASC or the Royal Commission, there is no need to consider the cases of conspiracy and misfeasance of office which were put against the Royal Commissioners nor the arguments put by the Acting Solicitor-General for immunity against such claims and against judicial review generally.
123. I order that the application be dismissed. At the request of counsel I will adjourn the question of costs for a short period. I will hear submissions at 9.30 a.m. tomorrow.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/cth/FCA/1992/169.html