Kamha v Australian Prudential Regulation Authority [2005] FCA 173 (2 March 2005)

ASHRAF IBRAHIM HELMY KAMHA v AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY AND ANOR
NSD 271 of 2005

ALLSOP J
2 MARCH 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 271 of 2005

BETWEEN:	ASHRAF IBRAHIM HELMY KAMHA APPLICANT
AND:	AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY FIRST RESPONDENT DARRYL ROBERTS SECOND RESPONDENT
JUDGE:	ALLSOP J
DATE OF ORDER:	2 MARCH 2005
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD271 of 2005

BETWEEN:	ASHRAF IBRAHIM HELMY KAMHA APPLICANT
AND:	AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY FIRST RESPONDENT DARRYL ROBERTS SECOND RESPONDENT

JUDGE:	ALLSOP J
DATE:	2 MARCH 2005
PLACE:	SYDNEY

1 The respondents have filed a notice of motion, which seeks to set aside paragraphs 3, 4 and 5 of the notice to produce dated 24 February 2005, served by the applicant. Alternatively, they seek that they be excused from complying with the said paragraphs.

2 Objection is taken to the scope of paragraph 5. Paragraph 5 of the notice to produce is in the following terms:

3 I have heard Senior Counsel for the applicant and for the respondents. The paragraph calls for documents that were before Mr Mark Godfrey, a senior manager of the Australian Prudential Regulation Authority (APRA), who drafted the show cause notice. Paragraph 6, also calls for documents that were before the delegate who made the decision. Subject to one argument to which I will come, I do not think any basis has been made out for the call for all the documents before Mr Godfrey. As long as the documents before the delegate include, as in my view they must in light of paragraphs 14 and 15, the evidence, which is said to support the show cause notice, then the applicant has all relevant documents. The one argument put forward which may be broader is to the effect that the procedural fairness argument requires the applicant to understand what other documents, beyond the evidence to which I have just referred supporting the show cause notice, may have been before Mr Godfrey.

4 It is said that there may be beneficial or exculpatory documents in the class of documents that were before Mr Godfrey. Thus it is said that if those documents were not in fact passed on to the delegate the natural justice or procedural fairness argument is better able to be made out. Without the slightest discourtesy being intended to counsel for the applicant, Mr Bannon SC, I do not at the moment understand the legitimate basis for that argument; however, I do not propose to decide what may be an important substantive question at a level of deciding on a call on the notice to produce. There is no material put forward by the first respondent to the effect that answering the paragraph would be oppressive and in those circumstances I am prepared, if I may put it this way, again without the slightest intent of disrespect to Mr Bannon or those who appear with him, to give the applicant the benefit of the doubt in relation to the argument and allow the call in paragraph 5 to be made under the notice to produce, with one qualification. That qualification is as it seems on the way the argument has proceeded, to be one, if it can be achieved, that will be of forensic benefit to all parties and to the Court. The production of the documents in paragraph 5 should be in two categories. The first category is the documents that were before Mr Godfrey that were passed on to the delegate and to which the delegate made reference. The second category is the documents, which were before Mr Godfrey but not passed on to the delegate and to which the delegate did not have reference. That division, if it is convenient and does not create procedural or oppression problems, will crystallise most easily any evidential ground for that aspect of the procedural fairness argument which at the moment I am having difficulty understanding.

6 A submission was put on the last occasion by Senior and Junior Counsel and repeated today by different Senior Counsel leading the same Junior Counsel that the basis for the calls there identified is said to be in support of the claim in the application and also asserted in the submissions on interlocutory relief handed to the Court on an earlier occasion. The submission is that in the circumstances of this applicant who has not worked in the insurance industry for some time and who has given undertakings, in effect, in terms of section 24 of the Insurance Act 1973 (Cth), that the discretion was exercised in such a way that suggests, that it may have been exercised pursuant a general policy of exercising the discretion to disqualify any former FAI directors who fall within the scope of the preconditions for the exercise of the discretion in section 25A of the Insurance Act.

7 It is far from clear to me that s 5(2)(f) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) will be engaged if it be shown that there is a pattern of behaviour by the regulator showing a practice in the way it is administering ss 24 and 25A to deal with the FAI directors in a particular way. However, again, as with paragraph 5 of the notice to produce, I am keen not to have decisions at interlocutory stages for the production of documents effectively act as decisions in the case by shutting out what may be development of an appropriate ground for the applicant. I am equally concerned that this exercise might be seen to be in the nature of "fishing" in the old sense. Were there a suggestion that the volume of documents were to show any substantial expense and oppression on the first respondent that would in all likelihood be sufficient to weigh in the balance to strike out paras 3 and 4. However, this is a matter of real gravity to the applicant by the very nature of the orders sought and steps taken by the first respondent and though I have real reservations as to the ultimate utility of any of the material referred to in paragraphs 3 and 4 I am concerned ultimately that the applicant should be, within reasonable limits, entitled to propound a case on the advice of Senior Counsel.

8 Another relevant consideration is that Mr Bannon has indicated that the production of the documents may be limited to counsel and solicitors. In particular given that paragraphs 3 and 4 call for material that concerns other people and which may be delicate and confidential to those other people. I think that should be formalised in a quite clear undertaking and a written one.

9 The terminology of paragraph 4 might be seen to be slightly loose and looser than it need be. I am prepared to allow paragraph 4 in relation to minutes of meeting, board papers and resolutions of the APRA dealing with the prospective disqualification of former directors. It goes without saying that the documents in paragraph 4, in particular, should be masked and APRA is entitled to mask material that does not relate to the question of FAI directors and officers if other material was dealt with at those meetings.

10 One of the further considerations that I have to take into account, and I say this without intending the slightest criticism of the Australian Government Solicitor, counsel or, indeed, the respondents is what fell from Mahoney J, (as his Honour then was) in P & C Cantarella v Egg Marketing Board [1973] 2 NSWLR in particular at 383 to 384. Again, I am not suggesting in the slightest that there is any unfairness being practised by the Executive in the positions taken in opposing the call of the notice to produce. However, what fell from Mahoney J and what was said in the cases to which his Honour referred is not limited to circumstances where the Crown might be criticised for taking an unfair position; it is a matter which informs their conduct and informs, more importantly, for today's purposes, in my view, the conduct of the Court in how it deals with the matter of a citizen in litigation with the Crown.

11 This is a serious matter. It may have significant consequences for the applicant and in my view taking into account and being alive to the need to control unwarranted and excessive discovery, the applicant should not be in a position in dealing with the Crown and a Commonwealth authority whereby, notwithstanding the arguments of Senior Counsel which may be made out on appeal, a possible avenue of debate is either truncated or strangled at a procedural hearing in relation to access to documents. That said, this is not going to become a fishing expedition in relation to a range of other people's disqualifications. At the moment without deciding any issue in advance I fail to see ultimately for the purposes of proof how a body of cognate conduct in relation to directors of FAI, even if it showed a pattern, could be seen to be relevant to the particular circumstances of the applicant in question.

12 The question is whether there was a policy and whether this gentleman's position was dealt with on the merits. Whether it was dealt with on the merits will be understood by reference to his position and how his position was dealt with. I can tell counsel and solicitors that if anyone thinks this is going to be a mini Royal Commission in an administrative case about why all the other FAI directors were disqualified they can think again and they will need, if they want to propound anything like that, to be armed with the most cogent arguments as to why an administrative law decision such as this under review and if that s 5 (2) of the ADJR Act is being relied upon can descend into detailed comparative analysis of the position of different people.

13 With that said, however, as I said, I think it important in a piece of litigation of this kind that the applicant does not leave an interlocutory hearing, as it were, with a view that arguments of Senior Counsel which were propounded on his behalf have been strangled by an interlocutory decision in respect of which there is no real issue at all about oppression in production of the documents. With the limitation of the documents being limited to solicitors and counsel and if paragraph 4 is amended to changing "relating to" to "dealing with" I am prepared to allow paragraphs 3 and 4 of the notice to produce to stand as orders of the Court under the Rules. That undertaking needs to be formalised and it should be an undertaking to the Court.

14 The order that I will make today is one simply dismissing the notice of motion dated today. It is one of the conditions of dismissing the motion that the notice to produce be amended and stand amended in terms that the production of the documents under paragraphs 3 and 4 be to counsel and solicitors for the applicant only and kept confidential until further order.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Counsel for the Applicant:	Mr A Bannon SC with Mr P Zappia

Solicitor for the Applicant:	Varasso and Associates

Counsel for the Respondent:	Mr A Robertson SC with Ms L McCallum

Solicitor for the Respondent:	Australian Government Solicitor

Date of Hearing:	2 March 2005

Date of Judgment:	2 March 2005

1.	That the notice to produce dated 24 February 2005 and served on the respondents be amended and stand amended in the terms set out in the form amended and initialled and placed with the file.
2.	Subject to paragraph 3 below, grant access to the applicant and his legal advisers to documents produced in answer to the notice to produce.
3.	Until further order, access to documents produced in answer to paragraphs 3 and 4 of the notice to produce be granted to counsel and the solicitor for the applicant only on the undertaking, which is given to the Court by Anthony Bannon SC, Pasquale Zappia and Dominic Varrasso, not to use the documents except for the purposes of these proceedings and not to disclose the contents of the documents to any person other than a person who has given a similar undertaking to the Court.

Federal Court of Australia

Kamha v Australian Prudential Regulation Authority [2005] FCA 173 (2 March 2005)